US HEDGIES:
...
FBI PROBES
INSIDER
DEALING p2
Issue 1,269 Tuesday 23 November 2010
IRISH BAILOUT FAILS
TO CHEER INVESTORS
■ Markets fall
and bond yields
continue to rise
■ Cowen resists
snap election call
ahead of budget
■ UK confirms
intention to offer
£7bn in loans
EU ECONOMY
▲
BY JULIET SAMUEL AND STEVE DINNEEN
MARKET turmoil failed to subside yes-
terday in spite of the announcement
of a multi-billion euro Irish bailout.
As the Irish governing coalition
threatened to fall apart and inde-
pendent MPs said they would vote
against the emergency budget needed
to secure the aid, investors fled stocks
and the yields on peripheral
Eurozone sovereign debt rose.
Despite initially rallying, the
Eurostoxx 50 fell two per cent to close
at 2,811 yesterday, while the Irish
ISEQ 20 index dropped 1.9 per cent to
close at 445 and the FTSE 100 closed
down 1.7 per cent at 5,683.
The yield on European government
bonds rose, reflecting that most buy-
ers were not reassured by Ireland’s
application for cash. Irish 10-year gilt
yields rose to 8.1 per cent, Spanish 10-
year gilt yields closed up at 4.74 per
cent and Portuguese 10-year yields
FTSE 100 t 5,680.83 -52.00
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BUSINESS WITH PERSONALITY
Protestors outside the Irish parliament yesterday protested plans for a multi-billion euro bailout
closed down at 6.72 per cent having
risen from a low of 6.7 per cent.
The cost of insuring Eurozone debt
also jumped in response to renewed
uncertainty about Ireland’s fate. Five-
year credit default swaps (CDS) rose
25 basis points to 530bps (a cost of
€530,000 or £453,000, to insure €10m
of debt) and Portuguese five-year CDS
rose 40bps to 460bps. Traders also
dumped the euro, with the single cur-
rency falling against sterling from
DOW t 11,178.58 -24.97 NASDAQ ▲ 2,532.02 +13.90 £/$ 1.60 unc £/¤ 1.17 unc ¤/$ t 1.36 -0.01
info@bbk.ac.uk
www.cityam.com
86p to 85p and against the greenback
from $1.38 to $1.36.
Market fears were driven by the
bailout’s political fallout, which
threatened to spiral out of control
yesterday.
Rebel independent MPs said they
may withdraw support for Ireland’s
austerity budget – a necessary precon-
dition of the European bailout.
With the governing coalition hav-
ing a majority of just three and
0845 601 0174
Pictures: PA Photos
upcoming by-elections liable to wipe
out even this advantage, the defec-
tion of several independents could
threaten its ability to pass the contro-
versial emergency budget due in early
December.
Failure to pass the budget for 2011,
which is to make €6bn worth of cuts,
would hasten the likely inevitable
demise of embattled Prime Minister
Brian Cowen.
And in a further blow, coalition
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partner the Green Party dramatically
announced it will walk away from the
partnership, calling for a general elec-
tion in January to oust the PM.
The Greens say they will still back
the austerity measures but even this
will not guarantee their success if the
government loses the impending by-
elections.
Analysts believe a complete col-
lapse of the rescue package is unlike-
ly, however, as opposition Labour and
Fine Gael MPs are also desperate to
see the deal go through and would
almost certainly allow the austerity
bill to be passed. In a worst-case sce-
nario, in which the bill is rejected and
the government collapses, it is under-
stood Europe will allow time for a
new government to be formed rather
than completely withdrawing the
bailout package.
Last night, Cowen vowed to soldier
on until the bill is passed but said he
would then call an election. He said:
“It has always been my intention to
ensure we get the job done... It is my
intention at the conclusion of this
budgetary process... to seek the disso-
lution of [parliament] to enable the
people to determine who should
undertake the responsibilities of gov-
ernment.”
The developments have left
Portugal looking particularly
exposed, with bears fearing it could
be the next Eurozone domino to fall.
Prime Minister Jose Socrates was
defiant, claiming: “The country does
not need any help,” but markets react-
ed negatively, raising the cost of
insuring its debt by 40 basis points.
Greece was also hit hard, with cred-
it default swaps on Greek govern-
ment debt rising to over 1,000 basis
points, meaning bond-holders will
have to pay more than €1m to insure
€10m of its debt for five years.
Chancellor George Osborne con-
firmed yesterday the UK would com-
mit around £7bn to the Irish rescue.
FOCUS ON IRELAND: P6-P7, P8-P9
Certified Distribution
04/10/10 - 31/10/10 is 110,406
 2 News
Start planning for Eurozone break-up
EDITOR’S LETTER
ALLISTER HEATH
ONE should always have a Plan B, an
emergency exit strategy. Offices, cine-
mas and restaurants always have a
way out in the event of a fire; nobody
would want to travel on a boat with-
out life rafts in working order. It is
bizarre, therefore, that such common
sense has until now been absent from
economic and financial planning.
Financial institutions grew into
giant behemoths without anybody
working out what would happen if
things went wrong – there were no liv-
ing wills, no special resolution proce-
dures to unwind bust banks without
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Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
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Pictures Alex Ridley
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Commercial Director Harry Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
GENEVA SET TO TRUMP LONDON IN OIL
TRADING
Geneva will leave London behind and
become the world’s most important
trading hub for physical energy com-
modities, including oil, as leading
companies relocate dozens of traders
to Switzerland, according to industry
executives. The transfers threaten the
UK capital’s leadership in physical
crude and oil products and come
amid broader financial industry com-
plaints about stiffer regulation, high-
er taxes and poor transport
infrastructure in London.
YANUKOVICH GIVES EUROPE GAS
PLEDGE
Viktor Yanukovich, the Ukrainian
president, has promised Europe that
it will not face the natural-gas supply
disruptions that have plagued it in
recent years.The pledge, made while
Yanukovich was in Brussels for
taking down entire economies, no real
plan of action to deal with catastro-
phe. The assumption appeared to be
either that Armageddon would never
happen or that the government would
always be able to step in and sort
everything out easily if it did.
It was the same with the single cur-
rency. Countries that took part pur-
chased a one-way ticket on the Titanic.
There was no way of exiting, no mech-
anism to allow states that ultimately
couldn’t cope to pull out. Problems
were defined away: in theory, bailouts
were illegal and all member states
were contracted to pursue sustainable
policies. In the case of the Eurozone,
this was deliberate: political projects
of that magnitude need to feel
inevitable if they are ever to have a
chance of getting off the ground.
Lots of work has taken place on try-
ing to devise special bankruptcy proce-
dures for banks, especially in America.
Yet progress has been slow and none
of this is ready for Ireland’s fallen
giants. But it is not too late for a new
Trio of hedge
funds raided
BANKING
▲
BY MATTHEW WEST
THE FBI has raided three American
hedge funds as part of a widening
investigation into potential insider
trading within the $1.7 trillion (£1.1
trillion) hedge fund industry.
The funds include Diamondback
Capital Management and Level
Global Investors, two Connecticut
funds run by former managers of
Steven Cohen’s SAC Capital Advisors.
The third fund is Boston-based
Loch Capital Management, a person
familiar with the raid said. Loch has
had close ties with a witness who
pleaded guilty in a separate insider
trading probe that centres on hedge
fund Galleon Group.
The raids come as federal prosecu-
tors prepare to unveil a series of new
insider trading cases against hedge
Monday’s European Union-Ukraine
summit, was seconded by Sergei
Shmatko, Russia’s energy minister.
SPANISH BANKS EYE WHOLESALE
EXPANSION
Spain’s big banks have maintained
high profits during the economic cri-
sis thus far largely because they diver-
sified into lucrative foreign markets,.
Now Santander and BBVA are diversi-
fying across business areas as well as
geographical regions. Both are put-
ting more emphasis on the high-mar-
gin global business of wholesale and
investment banking to reduce
dependence on their core retail oper-
ations.
IN-BUILT SIM FOR APPLE’S IPHONE 5
RULED OUT
Apple has told European mobile oper-
ators that the next version of its
iPhone will not include a technology
innovation that several network
providers fiercely oppose, say people
familiar with the situation.
plan to allow weaker countries to exit
the euro at a minimum economic cost
to the rest of us. George Osborne was
right to warn Eurosceptics that “I told
you so isn’t much of an economic pol-
icy” but that doesn’t mean that end-
less bailouts are the answer either.
Imagine what would happen were
the contagion to reach Italy or Spain.
The European Central Bank would
step in, purchasing hundreds of bil-
lion of euros worth of bonds from
those countries, paid for by freshly cre-
ated money. This would outrage the
Germans, who only put up with the
euro because they think the European
Central Bank shares the Bundesbank’s
hawkishness. German citizens would
rightly hate to see the value of the
euro in their pocket being put at risk
by the ECB monetising the debt of
profligate Club Med countries. They
would be even more angered by the
next step, an Irish or Greek-style
bailout. The disenchantment would
work both ways. There have been
dozens of IMF bailouts over the years,
fund traders, consultants and Wall
Street bankers, several lawyers famil-
iar with the investigation said.
FBI spokesman Richard Kolko con-
firmed that search warrants had
been executed on Level Global
Investors and Diamondback Capital
Management, both founded by for-
mer SAC Capital Advisors traders.
“Agents from the FBI’s New York
and New Haven offices are conduct-
ing a search of the offices of
Diamondback Capital Management,”
Kolko said. “The search is ongoing at
that address and all matters regard-
ing the matter remain under seal.”
Level Global was founded in 2003
by David Ganek, a former fund man-
ager under Steven Cohen’s hedge
fund SAC Capital Advisors.
Diamondback, declined to comment.
But a spokesman for Level Global con-
firmed the FBI had visited its offices.
DIAGEO IS REACHING ABOVE THE
CLOUDS TO ADD ANOTHER TOT OF RUM
TO COCKTAIL
Diageo is in negotiations to add a
“super-premium” rum from
Guatemala to its drinks cabinet. The
drinks group, which already owns
Captain Morgan, a spiced rum from
Puerto Rico and the Pampero and
Cacique rums from Venezuela is in
talks to acquire a 50 per cent stake in
the Zacapa Centenario from its
owner Industrias Licoreras de
Guatemala.
WAGAMAMA FREEZES SALE AS BIDS
FAIL TO MEASURE UP
The Times understands that an auc-
tion launched for Wagamama in the
summer has been put on ice after
final bids fell short of the minimum
£230m asking price. Despite the com-
pany’s impressive growth, it has not
been enough to attact a premium bid.
mainly of countries in Africa and
Latin America; rarely do the recipients
thank their “rescuers”. Bailouts
always come with strings attached
and invariably fuel rage, protection-
ism and nationalism. It would be no
different in the EU.
So it is looking grim for the single
currency. One option would be for
troubled countries to be booted out.
Unfortunately, replacement curren-
cies would lack credibility and slump
instantly, making it impossible for
countries to repay any euro-denomi-
nated debt. They would have to peg
their new currencies to a commodity,
such as gold, but that would require a
credible economic policy. Another
option would be for the Eurozone to
break into two, with the core – led by
Germany – adopting a strong curren-
cy and the periphery a weaker one.
Again, this would be fraught with
problems. One thing is certain, howev-
er: now is the time to begin working
on a plan B for the Eurozone.
allister.heath@cityam.com
Right Rev McCulloch opposes News Corp’s bid for BSkyB
Church opposes Sky sale
MEDIA
▲
BY MATTHEW WEST
THE Church of England became
embroiled in the row over News
Corporation’s bid to take full control
of BSkyB yesterday.
The Right Reverend Nigel
McCulloch, Bishop of Manchester and
former member of the House of Lords
Select Committee on communica-
tions, said if the bid were successful
News Corp would “dominate both
the television and newspaper land-
GRANDMOTHERS COULD COST
FAMILIES CHILD BENEFIT,
GOVERNMENT ADMITS
Under changes to child benefit due to
come into force in 2013, households
would have their payments taken
away if anyone in the family was a
higher rate taxpayer. During a debate
in the Hosue of Lords Lord Sassoon,
failed to rule out a Labour suggestion-
that wealthy grandmothers as well as
parents would be covered by the
move.
HALF OF BRITONS WILL START THE
NEW YEAR IN DEBT
Almost half of Britons will start the
New Year in debt according to new
research. The statistics suggest mil-
lions of people will take on additional
debt because of the strain on their
finances. Credit cards will be the most
popular type of credit, followed by
overdrafts and personal loans.
CITYA.M. 23 NOVEMBER 2010
NEWS | IN BRIEF
Business insolvencies fall
The number of business insolvencies fell
17 per cent to 1,635 in October com-
pared to a year earlier business informa-
tion provider Experian said yesterday.
The downward trend in the number of
companies going out of business is being
maintained, despite worries about the
economic outlook and some high-profile
casualties. The figures back up official
statistics released earlier this month by
the Insolvency Service showing insol-
vencies in the third quarter at 3,974
were 2.2 per cent down on the second
quarter and almost 14 per cent lower
than last year.
Google in talks with Filmyard
Google is in talks with Filmyard Holdings
to gain digital rights to film studio
Miramax’s archives to boost its efforts
to turn YouTube into a destination with
longer-form content, the New York Post
said, citing people close to the situation.
The current deal may include rights for
more than 700 films. Google may have
to compete with streaming and mail-in
rental company Netflix, which has also
shown interest in Miramax’s film library.
Google was unavailable for comment.
Picture: PA
scape”, adding Sky News could poten-
tially come under “subtle editorial
influence” from its parent company.
The Church has written to the
media regulator Ofcom, saying
Rupert Murdoch’s company should
not be allowed to buy out the rest of
BSkyB because it would threaten
media plurality.
News Corp rejected the Church’s
argument saying: “There has been an
increase in plurality in UK media
with more people consuming news
from more sources than ever before.”
STATOIL NORTH SEA PLATFORM
STRUGGLED TO AVERT BLOWOUT
Norwegian police have launched an
investigation into oil firm Statoil ASA
after the country's oil safety watch-
dog said only luck averted a major
blowout at a North Sea oil-drilling
operation earlier this year. The trou-
ble Statoil encountered with the off-
shore platform, Gullfaks C, shows
incidents like the disastrous blowout
that ripped apart BP PLC's Macondo
well in the Gulf of Mexico last April
may not be as isolated as the oil
industry has said.
REMOTE BHUTAN AIMS TO DRAW
INVESTORS TO THE HIMALAYAS
The government of Bhutan, which
didn't have television until the late
1990s and was ignored in the rush to
emerging markets in recent decade
has a message for the outside world:
it is open for business.
CITYA.M. 23 NOVEMBER 2010
Osborne axes
plan to reveal
bank bonuses
▲
POLITICS
BY DAVID CROW
GEORGE Osborne has performed a
remarkable U-turn over plans to force
banks to reveal details of pay and
bonuses, in a major coup for the City.
The chancellor has repeatedly said
he would press ahead with proposals
to make banks publish the pay and
bonuses of employees who earn more
than £1m in bands, while keeping
their names anonymous.
But yesterday Osborne said it
would be wrong to impose the new
measures without some kind of inter-
national agreement, after senior
banking figures argued it would
make the City less competitive.
“There are European rules that are
being developed in this area and it
might be better for Britain to pro-
mote this internationally rather than
just unilaterally,” Osborne said.
The volte-face followed a similar
change of heart from Sir David
Walker, the architect of the rules. He
said the rules were designed in the
hope that other countries would fol-
low suit.
Sir David also fears that greater
transparency could lead to wage
BP $20bn compensation
fund likely to be enough
▲
ENERGY
BP’s $20bn (£12.5bn) fund should be
enough to cover the billions owed in
compensation, according to the
lawyer administering the claims.
Kenneth Feinberg, appointed by
Obama to head up the compensation
fund, said yesterday he had already
paid $2bn to 125,000 people but had
approved “less than half” of claims
made. He said he wanted to see evi-
dence of loss from people claiming
damages from the Deepwater
Horizon oil spill.
“Based on what I’ve seen so far I’m
cautiously optimistic that $20bn is
News 3
Spotify lost £1m
Osborne said he
was concerned that
the reforms would
leave the City at a
competitive disad-
per month in 2009
vantage
Picture: PA
was £4.5m while subscription-based
▲
MEDIA
BY MATTHEW WEST revenue reached £6.5m, compared
with £380,000 in 2008.
SPOTIFY, the online music service is However, it suffered net losses of
losing £1m a month by offering free £16.6m over the period as a result of
music funded by advertising, it was hefty payments to music rights-hold-
revealed yesterday. ers.
The web based music streaming The Swedish-based company had
site which is attempting to challenge 7m users at the end of 2009, com-
i-Tune’s dominance in the market pared with only 1m at the start of the
finally reported its 2009 figures year. But only 250,000 of those were
which showed its advertising revenue paying a monthly fee to subscribe.
Chinese buy
buyers
ers driv
drivee a)
a) Start
Start nicking lead off the
church
church rroof.
oof.
inflation, with lower-paid bankers
metal
metal prices to a
b)
b) Buy mining stocks and
demanding more once they realise
they are earning less than their col- ten-year
ten-year high. Do yyou:
ou: invest
invest in the Aussie dollar.
leagues.
Osborne’s U-turn is likely to pro-
voke a furious response from Liberal
Democrat business secretary Vince
Cable, a long time campaigner for
greater transparency in City pay.
Yesterday he said: “Transparency is
key to creating confidence in any
commitment from our banks to
behave more responsibly on pay and
bonuses. Outrageous and irresponsi-
ble pay structures were a driver in our
financial crisis.”
In May, Cable told City A.M. there
was a case for introducing similar
reforms for all British corporations.
“There is an argument for applying
them across the board,” he said.
Meanwhile, former City minister
Lord Myners – who was instrumental
in preventing the names of bankers
being published – yesterday hit out at
Osborne’s about turn.
He said the climb-down demon-
strated “the power of the banking
lobby” and accused the chancellor of
departing from the coalition agree-
ment he signed up to on entering gov-
ernment.
more than enough,” said Feinberg.
But Alabama politicians have
accused Feinberg of bias towards BP, Spr
Spread
ead betting and CFD tr trading
ading ccarry
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and taking too long to process pay- yyou
ou ccan
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ments. They warned claimants to con- be suitable
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advert should be construed as investment
investment advice.
Government clean-up costs will
also be claimed from the fund as well
as the lost income of businesses and
individuals.
Meanwhile, BP’s early fight to con-
tain the massive oil spill at its rup- C
Capital
apital Spreads is a tr
trading
ading name of London
London C
Capital
apital Group
Group Ltd, which is authorised and regulated
regulated by
by the Financial Services Authority and a
member of the LLondon
ondon Stock Exchange. Registered
Registered address: 12 Appold St, LLondon,
ondon, EC2A 2A
2AW.
W. RRegistered
egistered number: 3218125.
tured Macondo well may have failed
because the oil giant underestimated
how much oil was gushing into the
Gulf of Mexico, the White House oil
spill commission said yesterday.
 4 News CITYA.M. 23 NOVEMBER 2010

Headhunters make progress

in search for new Mecom boss
rebels selling its stake, has sparked non-executive directors such as for-
▲

MEDIA
BY DAVID HELLIER
MECOM, the pan-European newspa-
per group, has scotched suggestions
that its chief executive David
Montgomery is planning to stay on
ahead of his scheduled departure in
January next year.
Montgomery was earlier this year
persuaded to step down by dissident
shareholders but an improving share
price, combined with one of the
speculation that the former Mirror
Group boss might be planning an
extended stay.
However, sources say that the
recruitment consultants Russell
Reynolds now has a credible list of
possible replacements and add that a
recent share placing by Invesco went
ahead on the understanding that
Montgomery would not be staying
on.
Mecom’s board, which includes
mer Telewest executive Stephen
Davidson, meets tomorrow.
A Mecom spokesman insists the
meeting will look at budgets for next
year and that the subject of the chief
executive’s position will “not be on
the agenda”.
Invesco recently sold its 14 per cent
shareholding in a placing organised
by Numis Securities. Other dissident
shareholders Aviva and L&G still have
more than 30 per cent of the equity.

Rolls Royce chief executive Sir John Rose Picture: Micha Theiner/City A.M.

Jet deal lifts

LONDON
Rolls-Royce
CITY TO
▲

AEROSPACE the A380 after Qantas flight QF32

STOCKHOLM BY PHILIP WALLER from Sydney from Singapore had to

make an emergency landing.

FROM £65
EMBATTLED jet engine maker Rolls- Airbus wants compensation for dis-
Royce got a much-needed boost yes- ruption and Rolls says its profits are

ONE WAY
terday from a $1.8bn (£1.13bn) order likely to be slightly lower as a result of
from Air China, only weeks after one the cost of correcting the problems.
of its engines exploded on an Airbus Meanwhile, in further good new
super-jumbo. for Rolls Royce, Australian airline
Rolls, which is facing potential Qantas said it will resume flying its
compensation claims after a Trent Airbus 380 fleet from Saturday after
900 engine broke up in mid-air on an engine inspections concluded the air-
Airbus A380, said the airline was buy- plane was safe to fly.
ing engines for 20 Airbus aircraft.
The order includes Trent XWB ANALYSIS l Rolls Royce 590.50
engines for 10 A350 XWB jets and 660 p 22 Nov
Trent 700 turbines for 10 A330s.
It comes after China Eastern
Airlines ordered $1.2bn of Trent 700 620
engines on November 9 for 16 A330
jets. Rolls also won a $100m share of a
deal from Brazil’s TAM Airlines. 580
Rolls will welcome the news as a
vote of confidence from airlines
despite the accident on 4 November.
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
It is repairing Trent 900 engines on

FACT BOX | ROLLS-ROYCE TRENT ENGINES

● The Trent 900 is part of the Trent
series of engines made by Rolls in Derby
in the East Midlands.
● The Trent family includes the 1000 for
the Boeing 787 Dreamliner,
the Trent XWB for the Airbus A350, the
Trent 900 for the A380, the Trent 800
for the Boeing 777, the Trent 700 for the
Airbus A330 and the Trent 500 for the
Airbus A340-500/600.
● Trent 900 for A380 super-jumbo in
service with three operators so far
including Singapore Airlines,
Qantas and German flag carrier
Lufthansa.
● Trent 900 was chosen by nine out of
14 airline operators of the A380, making
it the most popular engine on the aircraft
against an alternative from US rivals
General Electric and Pratt & Whitney.
● Of the 37 A380s currently in the air,
20 are equipped with the Trent 900.
● British Airways has ordered 12 Airbus
A380s with Trent 900 engines.
● The Trent 900 powered the first flight
of the A380 in April 2005.
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 6 Ireland Focus
Irish rebels
threaten EU
bailout plans
▲
EU ECONOMY
BY STEVE DINNEEN
THE Irish government could collapse
within days amid fears the controver-
sial EU bailout could fall through.
Rogue independent MPs Jackie
Healy Rae and Michael Lowry threat-
ened to derail the estimated €90bn
(£77bn) bailout by refusing to back
the coalition’s austerity budget.
Any handout from Europe would
depend on Ireland agreeing to meet a
tough new round of budget cuts.
The government was also hit by
coalition partner the Green Party dra-
matically announcing it will walk
away from the partnership.
It called for a general election in
January but said it will still vote in
favour of the austerity cuts, set to be
unveiled on on 7 December.
But even this support will not guar-
antee the success in the vote. Greens
included, Brian Cowen’s party has the
thinnest of margins – just three MPs –
and a series of upcoming by-elections,
the first on Thursday, could wipe out
CITYA.M. 23 NOVEMBER 2010
The party of
Irish prime
minister Brian
Cowen has
only a tiny
majority
Ireland’s finance minister
Brian Lenihan
its advantage altogether.
With Cowen’s Fianna Fáil party
looking almost certain to lose the
seat, its grip on power is weakening
fast.
If enough MPs vote against the bill
it would almost certainly trigger an
immediate general election, with
Fianna Fáil unable to continue in
government. This could cause Portuguese Prime Minister
Ireland to miss the deadline for Jose Socrates
receiving the Eurozone bailout.
“This scenario is unlikely,” Phyllis
Reed, head of economic research at
Kleinwort Benson said. “If the bill
looked like it was in real danger of
falling through, the opposition par-
ties would thrash out a deal to make
it pass. They both want the same
broad outcome. If the austerity bill
was out-voted then I suspect Europe
would extend the deadline. Nobody
wants to see Ireland go bankrupt.”
Cowen yesterday continued to defy
calls for an immediate election, but British chancellor
pledged to trigger a poll in the new George Osborne
year once the emergency budget has
been passed.
CITYA.M. 23 NOVEMBER 2010
MP anger over UK
contribution to aid
▲
POLITICS
BY JULIET SAMUEL
CRITICS from across the political
spectrum yesterday voiced their
opposition to chancellor George
Osborne’s decision that the UK
should contribute several billion to
the Irish bailout.
Labour MP John Mann said that he
would vote against the contribution,
saying: “What George Osborne has
chosen to do is use money from the
average taxpayer to bail out the
bankers – including British bankers
– yet again.”
Osborne: We
will help our
friend in need
▲
POLITICS
BY DAVID CROW
THE chancellor yesterday said Ireland
was a “friend in need” that Britain
would support, likely with a direct
loan that will run into billions of
euros.
George Osborne said the loan would
probably be in the “billions, not tens of
billions”, but declined to give any fur-
ther details of the package being dis-
cussed.
Britain will not charge Ireland a
“punitive” rate of interest, Osborne
said. “We are not seeking to make a
buck out of this. We are looking to
help a friend in need,” he added.
Any bilateral loan would come on
top of Britain’s contribution to the
€60bn European Financial Stability
Mechanism (EFSM), which former
chancellor Alistair Darling signed up
to in May.
However, aides to the chancellor
Eurozone dominoes
teeter on the brink
▲
EU ECONOMY
BY STEVE DINNEEN
PORTUGAL’S future was hanging by a
thread last night as ministers desper-
ately tried to deflect fears it will be
the next Eurozone domino to fall.
Portugal’s Prime Minister Jose
Socrates was defiant, claiming: “The
country does not need any help...
What the country needs is to do what
is necessary, to approve the budget,
and to continue in its efforts.”
But markets reacted negatively,
credit default swaps (CDS) tied to
Portuguese debt jumped 29.5 basis
Ireland Focus 7
CITY VIEWS: SHOULD THE UK HELP BAIL OUT IRELAND?
RICHARD YOUNG | CONTROLCIRCLE
Interviews by Marion Dakers
“I’m not sure why we are trying to support an independent country when we have got moun-
tains of debt of our own. There needs to be an underlying trade or political reason to do so.”
Tory Douglas Carswell MP also
CHRISTOPHER MILLER |
voiced his discontent, highlighting
INVESTMENT QUOTIENT
KEVIN CLARK | RK HARRISON
that the mooted figure of £7bn for a
UK contribution was “more than we
struggled to reduce public expendi- “It's not ideal, but it would be far “The money would be better spent
ture by when we first came to office.” worse if companies with links to on our own country right now, help-
John Redwood MP, also a
Conservative, said: “We’ve just gone Irish financial health such as the UK ing to make our own economy
through quite a big exercise making Post Office bank collapsed.” stronger – though I can see how
cuts so we’re not looking for ways to
spend several billion more outside
Irish trade benefits us.”
the UK.”
However, Osborne is likely to win
any vote on the matter, with all the
three main parties supporting his
decision.
told City A.M. that Britain would cap its
overall contribution at around £7bn.
If it has to pay more than expected
into the EFSM, it will reduce the bilat-
eral loan accordingly, they said.
Meanwhile, Osborne said he would
oppose any attempts to top up the
EFSM to “make good” on the bailout
package that has been promised to
Ireland, and confirmed the UK would
not sign up to any future Eurozone
bailout initiatives.
Britain is not a contributor to the
much-larger €440bn European
Financial Stability Facility.
Despite dissent on virtually all sides
of the House of Commons, Osborne
staunchly defended his decision to
help Ireland.
He said: “We have strong economic
relations with Ireland. Ireland
accounts for five per cent of Britain’s
total exports abroad. Indeed we export
more to Ireland than to Brazil, Russia,
India and China put together.”
points to a one-week high of 447 basis
points. CDS on Greek government
debt, the first nation to receive a
Eurozone bailout, rose 37 basis points
to over 1,000, meaning bond-holders
will have to pay more than €1m
(£850,000) to insure €10m of Greece’s
debt.
Portugal’s problems are struc-
turally different to those of Ireland
and Greece. However, it is struggling
to meet a target of lowering its
deficit to 7.3 per cent of GDP this
year. If the target is missed, it could
push its debt servicing costs to
unsustainable levels.
 8 Ireland Focus
Bailout fails
to bring calm
to markets
▲
WORLD ECONOMY
BY JULIET SAMUEL
THE announcement of an internation-
al bailout for Ireland failed to enforce
calm on the markets yesterday as
political turmoil and ongoing insol-
vency issues stoked fears.
After initially gaining, the
Eurostoxx 50 fell two per cent to close
at 2,811, tracing a pattern seen also on
the FTSE 100, which closed down 1.7
per cent at 5,683 and the Dax, which
fell one per cent to close at 6,830.
The Irish ISEQ 20 index dropped 1.9
per cent to close at 445 while the
Portuguese PSI 20 fell two per cent to
7,801.
The yield on European government
bonds also reversed their direction
after the news that the Irish coalition
government could break up.
After initially falling, Irish 10-year
gilt yields rose to 8.1 per cent while
Portuguese 10-year yields closed down
at 6.72 per cent but up slightly from
the day’s low of 6.7 per cent. Spanish
CITYA.M. 23 NOVEMBER 2010
News of Ireland’s
bailout yesterday
prompted turmoil
in the markets –
and in Dublin,
where around
100,000 protested
government policy
10-year gilt yields closed up at 4.74 per
cent.
The cost of insuring peripheral
Eurozone government debt, mean-
while, rose on the back of political
developments. Five-year credit default
swaps (CDS) rose 25 basis points to
530bps – that is, €530,000 (£453,000)
to insure €10m of debt. Greek five-year
CDS spreads grew by 37bps to 1000bps
and Portuguese five-year CDS rose
40bps to 460bps.
The euro also opened up initially
but fell later in the day. Sterling-euro ANALYSIS l Euro vs dollar ANALYSIS l Irish five-year credit default
dropped from 86p to 85p while euro- swaps (bps)
1.38 USD
dollar fell from $1.38 to $1.36. 650
The movements reflect ongoing 1.375
fears not only that the Irish govern-
ment could encounter political trou- 1.37
ble as it attempts to pass the cuts 450
necessary to secure bailout funding, 1.365
but also that the Eurozone crisis is far
from over. 1.36 250
Even if Ireland passes its budget, it
will still need to solve the underlying
00:00 06:00 12:00 18:00 24 May 21 Jun 19 Jul 16 Aug 13 sep 11 Oct 8 Nov
insolvency of its banking system in
order to restore economic health.
 CITYA.M. 23 NOVEMBER 2010 Ireland Focus 9

ANALYST VIEWS: WHAT NEXT FOR IRELAND? Interviews by Steve Dinneen

Banking stocks
JULIAN JESSOP |
CAPITAL ECONOMICS
JAMIE STUTTARD |
SCHRODERS fall on fears of
“ The price of international sup-
port may be an even tougher period of
fiscal austerity, which ultimately risks an “ The plans will involve further fis-
cal austerity. For those looking at the
potential economic impact, it should be
Irish exposure

” ”
even deeper recession. Ireland therefore noted that the Greek economy is currently

▲
BANKING
still has a mountain to climb. contracting at 4.5 per cent of GDP. BY JULIET SAMUEL
BRITISH banking stocks fell yesterday
on the back of uncertainty about
JOHN HARDY | SAXO BANK their exposure to the Irish crisis.

“
Barclays fell 2.7 per cent to 270.1p,
while Lloyds dropped 5.8 per cent to
The initial response was a spurt of euro-buying, as Irish bond spreads have come in sharply. 64p and RBS saw a 6.1 per cent fall to

”
But spreads on the other PIG countries failed to improve, as focus shifted – as expected – to the next 40p.
dominos in line at the Eurozone periphery. The falls in Lloyds and RBS stock
were also exacerbated by the declara-
tion by Independent Banking
Commission member Clare
Spottiswoode that state-owned

Investors in Irish bank bonds could

banks could be broken up.
Data from the Bank of
International Settlements shows
that the UK as a whole has an expo-

be forced to share in the bailout pain

sure of $140-$150bn to Ireland.
And figures published by City A.M.
yesterday revealed that RBS, Lloyds
and Barclays have exposure to
peripheral European debt equivalent
ANALYSIS l Exposure to Ireland ($bn) to 113 per cent, 61 per cent and 42
27
▲

Others $243bn WORLD ECONOMY their debt. Anglo Irish Bank Corp their debt – on their Irish bank secu- per cent respectively.
50 BY JULIET SAMUEL yesterday announced that bondhold- rities will be decided over the com- Creditors to Irish banks could be
UK $149bn 54 ers of €1.58bn’s worth of its debt – ing weeks as the Irish government forced to take losses as a condition of
243
Germany $139bn INVESTORS in some of the riskiest bonds due to mature in 2014, 2016 negotiates the terms of the nation’s the aid package being put together
USA $69bn
69
$bn kinds of Irish bank debt could face
big losses as part of the bailout deal
and 2017 – had agreed to swap their
notes for one-year government-
bailout.
However, some think haircuts are
by the IMF and EU.
UK exposure to Irish debt was one
Belgium $54bn being thrashed out between the Irish backed securities paying 3.75 per unlikely. In a note to investors, ana- of the reasons cited by chancellor
139
France $50bn
149 government, the EU and the cent over the euro interbank offered lysts at Deutsche Bank wrote: “There George Osborne as justification for
International Monetary Fund (IMF). rate. is only around €20bn of senior unse- the UK’s contribution to Ireland’s
Japan $27bn Source: BNP Paribas Already, some Irish banks, many The question of whether bond- cured, non-government guarantee rescue package, with fears that if
of which have been semi-nation- holders will have to take haircuts – bank paper. Even a 50 per cent hair- Irish banks were allowed to fail, it
alised, are attempting to restructure that is, write-downs on the value of cut would only save €10bn.” could have a knock-on effect.
 The Capitalist
10
BLAIR WOOS
LAWYERS
WITH FOND
MEMORIES
CITY law firm Clifford Chance last night
played host to a gathering of 250 of the
City’s most prominent names in a one-
off chance to hear from former Prime
Minister Tony Blair.
Blair blitzed into the event and had to
run off to another engagement immedi-
ately afterwards, but in between he
found time to cover the small topics of
Chinese growth, constituency politics
and what it’s like to have 24-hour protec-
tion.
Names on the guest list included for-
mer deputy PM John Prescott, former
Lloyds boss Sir Victor Blank and Rolls
Royce director Peter Morgan, as well as a
collection of managers and analysts from
Bank of America Merrill Lynch, Barclays,
Prudential and KPMG.
Our silver-tongued speaker began with
some reminiscences. As a young barris-
ter, he claimed, he had waited months
for a case from Clifford Chance to come
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
along. “It never arrived,” he said, “and my
life has been downhill ever since.”
As the public well knows, Blair’s noth-
ing if not a flatterer.
As for benefiting from police protec-
tion 24-7, it sounds like a bit of a breeze –
with his police escort, the former PM
doesn’t even have to pay a congestion
charge as he sails through central
London and parks wherever he pleases.
Funnily enough, it sounds rather like still
being in power.
Is there black gold at the end of this rainbow?
WELL WISHING
The heavens have smiled on Northern
Petroleum this week – for a moment at
least. The oil explorer has just “spud-
ded” or begun drilling at Markwells
Wood in the south-east of the UK in the
hopes of making a big find. The weather
augured well: on the first day of drilling,
as one of the firm’s consultants drove
home from the well, he glanced back to
see the end of a glorious rainbow touch
down on the facility (see picture above).
As godly City folk will know, the rain-
bow is traditionally a symbol of God’s
covenant with Noah that he has
brought an end to 40 days of devastat-
ing floods, but perhaps more impor-
tantly, rainbows are also meant to
have a massive pot of gold at their
end. Northern Petroleum can only
watch and wait to see if there is
black gold at the end of this rain-
bow.
EASY RIDER
Helical Bar chief executive Mike
Slade is at it again – finding new
ways to raise money for his cho-
sen causes, that is. This time, he has
teamed up with Frogmore managing
director Paul White (pictured top right)
to buy up a Triumph Bonneville motor-
CITYA.M. 23 NOVEMBER 2010
“My life has
been downhill
ever since,”
Mr Blair
reminisced,
recalling his
days as a
London
barrister.
bike and auction it off to raise money for
LandAid, a charity that draws on dona-
tions from the property industry to help
disadvantaged young people acquire use-
ful skills.
Left: Blair addressed a Now The Capitalist doesn’t know much
City crowd of 250 in about motorbikes – except that they’re
Canary Wharf yester- fun to ride – but this looks like a rather
day. Top right: Mike special machine. It features seven-spoke
Slade and Paul White alloy wheels, a 865cc parallel twin
take the Triumph engine and electronic fuel injection. And
Bonnevile motorbike it looks just snazzy.
for a spin before it’s Bidding is open until 28 November,
auctioned for charity. when the highest bidder will get an
invite to the annual movers and shakers
dinner on 2 December where an addi-
tional silent auction will be held to get
the donations up to a respectable level.
Bids should be sent to
Julia.horsley@moversandshaker.uk.com.
STRICTLY PARTIAL
Left-wing blog Labour Uncut yesterday
received a setback in its newly-launched
campaign for BBC impartiality. Launched
just last week, the “Mandy4Strictly” cam-
paign could already have received a fatal
blow. Prompted by the crushing unfair-
ness of having one Conservative and one
Liberal Democrat booked for the Strictly
Come Dancing’s Christmas special, and
no Labour representative, Labour
Uncut’s Dan Hodges has written to the
BBC to demand that it enforce the impar-
tiality required in its charter.
And Hodges has a candidate in mind
to take on ex-Tory MP Ann Widdecombe
and business secretary Vince Cable, who
has promised an appearance: “There is
one man with poise, grace and elegance
to lead us to our Canaan, (The Tower
Ballroom, Blackpol [sic]),” wrote Hodges
longingly last week.
That man, it turns out, is Lord
Mandelson, already known for his
fondness for doing the tango.
But the dream might have
already died. In response to Hodges’
letter, BBC head of comms Kate Toft
has some bad news: “Both Ann
Widdecombe and Vince Cable are
huge fans of the show and of ball-
room dancing, as is Peter
Mandelson, although he declined
an offer to take part in the show,”
she wrote.
Clearly, it is time to take the cam-
paign to the lord himself.
FACE THE MUSIC
Never mind the disappointment
over Lord Mandelson – it’s time to
dust off your dancing shoes any-
way. The John East Project, the
melodic jazz band led by
Merchant Securities deputy chief
executive John East, has
announced that it will be playing
one more date in the City before
Christmas. The first will be in
Club Ten in the Grange Hotel
near St Pauls on 8 December.
But luckily, if you can’t catch
the band this side of the new year,
you’ll have another chance afterwards:
East is taking his music to the 606 Club
for a second time on 19 January.
CITYA.M. 23 NOVEMBER 2010
FOX CALLS FOR BETTER INTERNET SERVICE
HP upbeat as
posts 8pc rise
in total sales
▲
TECHNOLOGY
BY MATTHEW WEST
HEWLETT Packard (HP), the world’s
largest personal computer manufac-
turer, reported fourth quarter net rev-
enue of $33.3bn (£20.9bn) yesterday,
up $2.5bn, or eight per cent, year-on-
year and raised its profit forecast for
next year following higher global
sales and growth in its core PC busi-
ness.
HP said it now expects earnings of
around $5.16 to $5.26 per share on
revenue of between $132bn and
$133.5bn.
It reported net profit for the fourth
quarter ending 31 October of $2.54bn
up from $2.41bn a year earlier.
Revenue climbed 10 per cent in the
Americas to $15.1bn, was up six per
cent in Europe, the Middle East and
Africa to $12.4bn and rose eight per
cent in the Asia Pacific region to
$5.8bn. Revenue from outside of the
US accounted for 64 per cent of HP’s
total.
Profit at the core PC business rose
23 per cent, while shipments grew
two per cent. Notebook revenue fell
three per cent but desktop revenue
Germany’s K+S snaps up
Potash One for £266m
▲
M&A
GERMAN fertiliser producer K+S AG is
buying Canada’s Potash One for
C$434m (£266.8m), joining a rush for
scale in an industry that will play a
crucial role in feeding the world.
K+S’s C$4.50-a-share offer, a 31 per
cent premium to the average price
over the previous 10 sessions, comes
less than three weeks after Canada
blocked a $39bn hostile bid by BHP
Billiton for Potash Corp, the indus-
try’s dominant player.
Unlike that bid, K+S said its
takeover would not be subject to a
News 11
MARTHA Lane Fox,
Firms don’t trust
coalition tax pledge
the UK digital
champion, yester-
day called for radi-
cal improvements
in the quality and
accessibility of gov-
ernment internet
services. Her report chancellor would not keep his prom-
▲
UK ECONOMY
said shifting 30 per BY DAVID CROW ise. However, 77 per cent of business-
cent of government es surveyed said they were satisfied
service delivery con- THE overwhelming majority of busi- with the government’s proposed
tracts to digital nesses do not think that George reforms of the much-maligned con-
channels could save Osborne will meet his pledge to make trolled foreign companies regime,
more than £1.3bn a Britain the most competitive tax which covers tax on profits made by
year. regime in the G20, according to a sur- overseas subsidiaries.
vey of 60 leading firms. “If the UK is to compete with other
Picture: Micha Big Four accountancy firm countries then more needs to be done
Theiner/ CITY A.M PricewaterhouseCoopers found that to deliver stability,” said PwC tax part-
82 per cent of firms thought the ner Andrew Boucher
leapt 13 per cent.
Revenue at HP’s printer division
jumped eight per cent, however prof-
it remained flat. Printer revenue has
stabilised recently but consumers
seem to be printing less than in the
past.
Léo Apotheker, HP president and
chief executive officer, said: “HP
proved once again that it is able to
execute given its market strengths
and technology leadership.
“I have seen first hand that we have
talented people who are focused on
delivering value for our customers.
Our market opportunity is vast, and I
am confident that we will extend our
leadership into the future.”
ANALYSIS l HP 43.25
$ 22 Nov
43
41
39
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
review under the Investment Canada
Act. The law, which stipulates a for-
eign takeover must carry a “net bene-
fit” for the country, was the basis of
Ottawa’s rejection of BHP’s offer.
In K+S’s case, the value of Potash
One’s assets – as opposed to the deal
value – falls well short of Investment
Canada’s C$299m threshold, said a
lawyer specialising in foreign invest-
ment at a large Canadian law firm.
K+S said yesterday it made its cash
offer for Potash One as it looks to
build up new reserves to replace
domestic deposits it expects will be
depleted in about four decades.
 12 News
GenSpring
ready to buy
in Europe
▲
FINANCIAL SERVICES
GENSPRING Family Offices, the largest
US-registered investment adviser, is in
“very deep conversations” to buy a
European wealth advisory firm, the
firm’s international business head
told Reuters yesterday.
New York-based GenSpring expects
to complete a takeover of the unidenti-
fied firm by the first quarter of 2011,
Santiago Ulloa, president of
GenSpring International, said in an
interview. The deal will establish a
European beachhead for a firm cater-
ing to the ultra-rich.
“We expect to be in Europe in the
very short term,” Ulloa said. He
declined to identify the firm or give
the scope of the deal, GenSpring’s first
major expansion overseas.
GenSpring, a unit of SunTrust
Banks, manages $21bn (£13.2bn) in
assets in a “multi-family office” busi-
ness, where the average customer has
$30m to $35min investable assets.
STRIKE THREATS PERSIST
▲
HUNDREDS of London Underground workers start voting this week on whether to call a
strike over the treatment of two union members, threatening to bring the capital to a
standstill during the festive season. The RMT union said a health and safety representa-
tive on the Bakerloo Line was fired because of his role as a union official.
Tesco China aims to
quadruple its sales
CONSUMER
▲
BY MARION DAKERS
SUPERMARKET Tesco plans to
quadruple sales in its Chinese busi-
ness over the next five years, the
firm said yesterday.
Tesco told investors and analysts
it hopes to hit £4bn in annual sales
by 2015, in a country where sales
are currently rising at eight per
cent year-on-year.
The firm aims to build more
than 1,000 Chinese hyper- and
supermarkets by February 2015, to
bring its total number of stores to
3,800 in an attempt to compete
with grocers such as Wal-Mart and
Carrefour with a more established
presence in the region.
It aims to almost triple the num-
ANALYSIS l Tesco’s global operations
2,463 stores
across
all formats
Market value of
international property is
£14.7bn
31% of sales and 22% of
profits from international
(10% and 5% respectively
10 years ago)
Hitachi tipped to
win revamped high
speed train deal
TRANSPORT
BY PHILIP WALLER
THE government is tipped to confirm
Japanese train manufacturer Hitachi
this week as the winner of a slimmed-
down deal to replace the UK’s ageing
Intercity 125 high-speed trains.
It is thought ministers have re-
jigged an existing agreement with
Hitachi’s consortium Agility Trains to
make the £7.5bn trains it offered for
the UK’s Intercity Express (IEP) scheme
cheaper and simpler to run.
Agility is already the preferred bid-
der on the deal, which will replace 40-
year-old diesel trains on lines from
London to Edinburgh and to Wales.
But the previous Labour govern-
ment reviewed the IEP project amid
cost concerns and proposed changes.
Ministers originally asked manufac-
turers to propose three types of train
ber of Chinese customers shopping
at Tesco per week to around 12m,
which represents around four per
cent of the urban population in
the firm’s target regions. In the
UK, around 15m people, or 25 per
cent of the population, use Tesco
loyalty cards regularly.
“Tesco has spent six years learn-
ing about the local market and
developing a strategy for prof-
itable growth,” said Tesco China
chief executive Ken Towle in a
presentation. “The path to long-
term profitability is now clear –
leveraging our substantial up-
front investment as we grow our
scale.”
Tesco will focus on the most
affluent regions of China, in par-
ticular in the country’s growing
Group Trading profit - £bn
3.5
International
3.0 Group less international
2.5
2.0
1.5
1.0
0.5
0.0
96/97
More than half of profit
growth for 2010/11 from Asia
and Europe
CITYA.M. 23 NOVEMBER 2010
powered by electricity, diesel and a
mix of both, allowing them to run on
electrified and un-electrified lines.
Under the revised scheme, Hitachi is
thought to have offered a modified
version of its original train, with some
diesel-powered carriages and others
using power from overhead lines.
If Hitachi and Agility are confirmed
as winners, it would be bad news for
the UK’s last train builder Bombardier,
which has 3,000 staff in Derby.
The Canadian group bid for the con-
tract with German firm Siemens and
is understood to be the reserve bidder.
The Department for Transport said
it plans a rail announcement on
Thursday, but declined to give details.
A rail industry source said: “The sup-
position is it will be something on the
proposed replacement for the high
speed train and the suspicion is that it
may involve Hitachi.”
number of cities with more than
1m residents. The firm has already
had success with stores in shop-
ping malls in mid-sized cities.
The firm is eyeing further
expansion in Asia following its suc-
cess in Thailand under the Lotus
brand, which is now the most pop-
ular grocer in the country.
ANALYSIS l Tesco
450 p
421.85
22 Nov
430
410
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
65% of selling space
outside the UK
Number 1 or 2
in nine international markets
- 90% sales of sales
are international
09/10
Tesco operates in
markets representing
53% of global GDP
(vs. 8% 10 years ago)
FedEx is now faster between Asia and Europe

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 14 News
Defence boss
to take over
at water firm
▲
UTILITIES
BY PHILIP WALLER
WATER group United Utilities is
recruiting the boss of a subsidiary of
Italian helicopter and aircraft maker
Finmeccanica to replace outgoing
chief executive Philip Green.
United, which provides water and
sewage services to about 7m people
in north-west England, said Steve
Mogford will become chief executive
on 31 March when Green steps down.
Mogford is chief executive of elec-
tronics firm Selex Galileo, part of
Finmeccanica, which owns UK heli-
copter maker AgustaWestland.
Previously, he was chief operating
officer at defence firm BAE Systems,
which is in the Eurofighter Typhoon
military jet group and is building
two new Royal Navy aircraft carriers.
United Utilities announced the
departure of Green following week-
end newspaper speculation that he
would leave the company with a pay-
out of more than £4m. His salary and
bonus last year totalled about £1.7m.
A United Utilities spokeswoman
said Green would not be receiving a
payout because he had resigned, but
he would be entitled on 31 March to
exercise about £650,000 of share
options he bought when he joined
the company in 2006.
Green has led the utility’s drive to
re-focus on water and sewage services
after moving into electricity and sup-
port services under previous bosses.
Mogford will oversee United
Utilities’ £3.6bn plan to modernise
and improve ageing water networks
in the north-west.
ANALYSIS l United Utilities
630 p
610
627.00
22 Nov
590
570
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
BA has hired Go-Ahead finance boss Nick Swift as chief finance officer Picture: PA
NICK SWIFT, Keolis. It also runs buses in Brighton
FINANCE CHIEF, and elsewhere on the south coast as
GO-AHEAD well as Oxford and Newcastle.
Prior to becoming Go-Ahead’s
group finance director in 2007 Swift
worked as group finance manager at
building materials group Hanson,
where he had been responsible for
investor relations. Previously he had
BRITISH Airways is recruiting a new been head of Hanson’s tax and treas-
finance boss with experience in the ury and a group financial controller.
building and financial services industry Swift joined Hanson in 2000 fol-
as well as transport. lowing its acquisition of Pioneer
Nick Swift (46) is currently the International where he held a number
group finance director of the Go- of senior corporate and operational
Ahead Group, a FTSE 250 company finance roles including European
employing more than 22,000 people finance director.
and carrying in excess of1bn passen- Swift has also been group financial
gers a year. reporting manager at Air New
Go-Ahead runs the Southern, Zealand. He joined the airline from
Southeastern and London Midland Touche Ross, where he qualified as a
train franchises in partnership with chartered accountant.
CITYA.M. 23 NOVEMBER 2010
BA swoops on
bus company’s
finance chief
AVIATION
▲
BRITISH Airways (BA) has poached the
finance boss of train and bus operator
Go-Ahead to become its new chief
financial officer.
BA said Nick Swift would join the
flag carrier on 7 March next year,
replacing Keith Williams, who
becomes chief executive of the com-
pany when its merger with Spanish
rival Iberia goes ahead.
BA’s current chief executive, Willie
Walsh, will become chief of the new
holding group under the merger,
International Consolidated Airlines.
Swift, who began his career in
financial management with Air New
Zealand, said he was pleased to be
returning to the aviation industry.
“Go-Ahead has been a great place to
work and to get things done,” he said.
“I definitely would have stayed longer
if the role at BA hadn’t come my way.”
Go-Ahead’s chief executive Keith
Ludeman, who is also stepping down
in July next year, said Swift had man-
aged to do a great deal in his time at
Go-Ahead and wished him success.
“I have thoroughly enjoyed work-
ing with Nick and we have achieved a
great deal together,” he said.
“I understand why Nick felt he
couldn’t refuse this opportunity to
return to the aviation sector and I
wish him every success.”
CITYA.M. 23 NOVEMBER 2010 News 15

Taylor Wimpey begins

£250m bond offering
Rickard. debt before July 2011 at the latest, or if
▲

PROPERTY
BY MARION DAKERS
HOUSEBUILDER Taylor Wimpey
rounded off its refinancing plan yes-
terday by announcing a new £100m
debt facility and plans to sell £250m of
five-year bonds.
The news follows on from the firm’s
£950m credit facility, which was
announced last week as the last act by
outgoing chief financial officer Chris
Prudential’s M&G UK Companies
Financing Fund will provide the com-
pany’s £100m facility.
The company has applied for a cred-
it rating from Moody’s and Standard &
Poor’s (S&P). S&P yesterday gave the
firm a B+ rating for its bond issue,
with a negative outlook due to uncer-
tain market conditions.
“We are likely to lower the rating if
the company does not refinance its
the company does not manage its debt
leverage very carefully while acquiring
new land,” said S&P analyst Maxime
Puget.
The firm rejigged its debt last week
in an effort to gain more flexible
terms. Chief executive Pete Redfern
said its new structure lifted conditions
on buying new land.
Shares closed up 3.3 per cent at
25.3p yesterday. Taylor Wimpey chief executive Peter Redfern Picture: Micha Theiner/ CITY A.M

ROYAL BANK OF while Lloyds TSB Corporate Markets

SCOTLAND HOARE
GOVETT
ANTONIA ROWAN
TAYLOR Wimpey’s bond issue will be
coordinated by Royal Bank of
Scotland’s corporate broking branch
Hoare Govett and Barclays Capital,
and HSBC will act as bookrunners.
Antonia Rowan is a managing director
of RBS Hoare Govett, and has been
with the firm since 1999 when she
joined from Merrill Lynch. She acted as
joint broker for Taylor Wimpey’s pred-
ecessor George Wimpey when it
merged with Taylor Woodrow in 2007,
and has also worked with Tate & Lyle,
Wolseley and Wm Morrison. She is
joined by Hoare Govett managing
director Iain Leigh-Pollitt.

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Breakfast Briefings We understand expat life
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 16 News
NEWS | IN BRIEF
Pensions buy stake in Westfield
The Australian owner of the Westfield
shopping centre has sold a stake in its
Stratford shopping development to
Dutch and Canadian pension funds for
£871.5m. Westfield Group has agreed to
sell a 50 per cent stake in the retail arm
of the development next to the 2012
Olympic Games site to APG and the
Canadian Pension Plan Investment
Board. The deal, due to complete in late
2011, is part of Westfield’s strategy to
create a new $12bn property fund.
Polo starts share buyback
Polo Resources began a £208m share
buyback yesterday, lengthening the odds
of another acquisition attempt. The
AIM-listed firm bought 40m of its own
shares yesterday for 5.205p each. Polo
made a £129m offer for rival Caledon
Resources in April, before pulling out in
July due to volatile market conditions.
US finalises health insurance law
New US health insurance spending rules
aimed at ensuring more customer dol-
lars go toward medical care were
finalised yesterday, ending a source of
uncertainty for investors in the sector.
Insurers including Aetna and WellPoint
have won welcome concessions about
the implementation of the new rules,
which require large group health plans
to allocate at least 85 cents per premi-
um dollar to medical care.
BARNIER STAYS TOUGH ON BONUSES
NO member state will escape the European Union’s stringent curbs on excessive bank
pay, the bloc's financial services chief Michel Barnier said yesterday. “There will not be a
margin for flexibility,” Barnier said. The EU has approved what are seen as the toughest
pay curbs in the world for the financial sector. They take effect from January. Picture: PA
Oracle and SAP in
compensation feud
TECHNOLOGY
▲
BY JENNY FORSYTH
SOFTWARE heavyweights Oracle
and SAP were yesterday battling
over compensation figures at the
climax of a closely-watched US trial
over copyright infringement.
Oracle’s lawyers called for SAP to
pay $1.7bn (£1.1bn), while SAP
replied a more appropriate award
would be closer to $28m.
The compensation debate comes
at the end of a federal trial, where
German-based SAP acknowledged
its TomorrowNow unit had inap-
propriately accessed Oracle materi-
al in a drive to recruit Oracle
customers. TomorrowNow, which
provided third-party support for
software applications acquired by
Novell finally agrees a sale, with
Attachmate buying it for £2.2bn
▲
TECHNOLOGY
SOFTWARE provider Novell has
agreed to be bought by privately
held Attachmate for about $2.2bn
.com
(£1.38bn).
The deal will also involve Novell
selling some assets to a consor-
tium led by Microsoft.
Novell shares closed 6.5 per cent
higher at $5.96 after the news but
were still below the deal value of
$6.10 per share.
The deal will end months of
speculation about the future of
the company, with many expect-
Talk Talk faces
Ofcom probe over
sales practices
MEDIA
▲
BY MATTHEW WEST
OFCOM said yesterday it was investi-
gating whether fixed telephone line
and internet services provider
TalkTalk Telecom mis-sold services to
customers.
The communications regulator
said it had received over 1,000 com-
plaints relating to TalkTalk’s selling
practices, the most common of which
appeared to have been that customers
were either mis-sold the fixed line
telephone service or were switched
from their provider to TalkTalk with-
out their knowledge or consent.
The complaints also relate to Tiscali
UK, which TalkTalk acquired from
the Italian internet service provider
last year. Ever since TalkTalk has been
trying to resolve legacy issues relating
to the different types of service con-
Oracle, was bought by SAP in 2005
for $10m, but shut down in 2008.
Oracle’s lawyers said the trial
will be an important test case for
the industry – not just two technol-
ogy giants slugging it out in court.
Oracle attorney David Boies said:
“The reason it is so important is
because protection of intellectual
property is at the heart of the soft-
ware industry,” Boies said.
He added that SAP believed it
could use its TomorrowNow sub-
sidiary, which wrongfully down-
loaded millions of Oracle files, as a
“liability shield” that could take
the fall for copyright infringement.
An attorney for SAP, Europe’s top
software maker, retorted that
Oracle was trying to get jurors to
award damages far in excess of
ing it to be carved up.
In March Novell rejected an
unsolicited bid from Elliott
Associates to buy the firm for
$5.75 per share.
After it rejected that offer the
Novell board ran an auction
process that drew multiple
rounds of bids that dragged out
over several months.
Novell chief executive Ron
Hovsepian said: “The board
explored all alternatives... and
found this to be the best value for
our shareholders.”
This included the option of
CITYA.M. 23 NOVEMBER 2010
tracts offered by the internet firm.
Both companies, which operate
under the umbrella of TalkTalk
Group, could face a substantial fine
the regulator said.
A statement from the company
said: “TalkTalk is fully cooperating
with Ofcom and will continue to pro-
vide all the information it needs to
conduct its investigation. We continu-
ally review our sales processes and
take any potential issues of mis-sell-
ing extremely seriously.”
TalkTalk was already the subject of
an investigation by Ofcom over
billing errors. The firm had been
accused of billing customers for serv-
ices they had not received and Ofcom
issued a notification warning it to get
its house in order by 2 December. The
firm could face a fine equal to 10 per
cent of its relevant turnover if it is
unable to do so.
TomorrowNow’s true value.
“They are trying to trick you into
doing that,” lawyer Robert
Mittelstaedt said.
He added SAP never used the
software downloaded, and the sub-
sidiary only netted a handful of
customers, with little profit.
ANALYSIS l Oracle
$ 28.05
28 22 Nov
26
24
22
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
remaining independent, he said.
Novell said the $2.2bn deal
value includes its concurrent sale
of some intellectual property
assets for $450m to the Microsoft
consortium known as CPTN
Holdings.
Both deals are expected to close
in the first quarter of next year.
The Attachmate deal needs
approval from regulators and
Novell shareholders.
The IP sale is also subject to the
closing of the Attachmate merger
as well as regulatory approval,
Novell said.
CITYA.M. 23 NOVEMBER 2010 News 17

Orascom sells 50pc

A pipeline at TNK-
BP’s Samotlor oil
field near Nizhn in
Russia

stake in $1.2bn deal

Picture: GETTY

cent of Tunisiana, the Qatari fixed

▲
TELECOMS
BY HARRY BANKS
ORASCOM Telecom has sold its 50 per
cent stake in Tunisian mobile opera-
tor Tunisiana to a Qatari-Tunisian
consortium for $1.2bn in a further
sign of consolidation in the Arab tele-
coms market.
The consortium includes Qatar
Telecom’s (Qtel) Kuwaiti unit
Wataniya, which already owns 50 per
line and wireless carrier said yester-
day. Proceeds will be used to cut
Orascom’s debt, its parent company
Weather Investments said.
Weather Investments – the vehicle
through which Egyptian billionaire
Naguib Sawiris controls his telecoms
empire – agreed on 4 October to sell
most of Orascom’s assets to Russian
telecoms operator Vimpelcom in a
potential $6.6bn deal.

BP to ramp up
production of
Russian gas
The firm will also invest $2bn on
▲

COMMODITIES
BY MATTHEW WEST
RUSSIA’s third largest oil firm, TNK-
BP, said yesterday it was to invest
$3.8bn (£2.4bn) in its gas business
over the next three years in a bid to
more than double production to
30bn cubic metres (bcm) by 2020.
The oil firm, which is half-owned
by British oil company BP, will invest
$1.8bn between now and 2013 in
developing associated gas from its oil
deposits. TNK-BP said this was in
order to meet a government target of
increasing associated gas utilisation
to 95 per cent by 2012.
Associated gas is often found dis-
solved in oil at high pressures exist-
ing in a reservoir or as a gas cap above
the oil
Vice president Alistair Ferguson
said yesterday associated gas would
provide over half of the oil firm’s pro-
duction.
“Critical to achieving this (95 per-
cent utilisation rate) is getting associ-
ated gas priority access to the gas
pipeline. But you also need to have
customers for it, so access to the
power market is another important
element,” added Ferguson.
regular natural gas extraction proj-
ects over the next three years, putting
the total natural gas investment plan
at $3.8bn.
TNK-BP, is set to produce 13 bcm of
gas this year from 143 fields and
already processes 85 per cent of the
associated gas that it extracts from
the ground together with oil.
Part of TNK-BP’s $1.8bn associated
gas utilisation project is a $700m
investment in its own energy proj-
ects, such as gas processing facilities
and power plants, which will supply
electricity for the firm’s own oil field
operations.
But that output target does not fac-
tor in the gas assets it is in negotia-
tions to buy from BP in Venezuela
and Vietnam.
It does, however, include potential
unconventional gas production in
Ukraine, where TNK-BP has submit-
ted applications for six licences to
invest $50m to explore for tight gas.
TNK-BP’s main gas-producing assets
in Russia are its Rospan fields in
Arctic Yamal-Nenets region in the
Arctic. Production at Rospan grew by
12 per cent year-on-year for January to
September 2010 to 1.9 bcm.

OPEC keeps its Bain’s interest in

quotas on hold Seagate fades
▲

ENERGY
OPEC ministers do not plan to discuss
production quotas at their next meet-
ing in Ecuador in December,
Venezuela’s energy minister said yes-
terday.
“I think all the OPEC nations agree
on the consensus to keep quotas as we
have them and to continue monitor-
ing the oil market,” Rafael Ramirez
said ahead of the 11 December get-
together in the Ecuador’s capital
Quito. Venezuela still believes oil at
$100 (£62.7) per barrel is a “fair” price
for crude, Ramirez added. “That’s our
position and it’s a position gaining
currency in OPEC.”
M&A
PRIVATE equity firm Bain Capital’s
interest in a deal for hard-disk drive
manufacturer Seagate Technology is
waning, three sources familiar with
the situation said yesterday.
The private equity firm was one of
several that had been initially inter-
ested in Seagate – the others were
TPG Capital and Kohlberg Kravis
Roberts (KKR).
A deal could still materialise for
TPG, which has been trying to find
equity partners. KKR has lost interest,
while private-equity firm Silver Lake
left the process in October. Bain
declined to comment.
 18 News
London boosts Winkworth
▲
REAL ESTATE
BY ALISON LOCK
LONDON estate agent Winkworth
expects to beat its 2010 profit targets
after growing revenues 20 per cent in
the first nine months of the year, it
announced yesterday.
Its third quarter trading update
said it saw “further strong perform-
ance” in the three months to
September, despite relatively low
transaction volumes and a weaker
pricing environment.
Broker Finncap forecasts-pre tax
profits of £1.1m for the end of 2010.
The franchise chain’s existing
Pearson buys
CTI Education
in £31m deal
▲
PUBLISHING
BY STEVE DINNEEN
EDUCATIONAL publisher Pearson
will acquire CTI Education Group for
£31m as it continues its expansion in
South Africa.
The Financial Times publisher will
buy 75 per cent of the firm, which is
among the leading private higher
education providers in South Africa
with more than 9,000 students.
Pearson says it expects the transac-
tion to enhance its adjusted earnings
per share and return on invested cap-
ital from 2011.
The agreement includes a provi-
sion under which Pearson may
acquire the remaining 25 per cent of
CTI in three years. The transaction is
subject to regulatory approval and is
expected to close in the first quarter
of 2011.
Pearson says it plans to recruit
more students from throughout
southern Africa to CTI’s campuses, as
well as expanding its distance learn-
ing facilities.
John Fallon, chief executive of
Pearson’s International Education
business, said: “We are excited to
bring our global resources to bear on
the higher education sector in South
Put your money where your mouth is Genzyme offers Sanofi
FEW can deny the rationale behind
Sanofi-Aventis’ bid for US-based
Genzyme. The French pharma
different deal structure
giant is losing patents on its block-
buster drugs more quickly than it
can replace them, and it has to act
fast. That’s why Genzyme is such an
attractive proposition.
It specialises in niche high-mar-
gin treatments for rare genetic dis-
eases, which are less vulnerable to
competition from generic insur-
gents. Meanwhile, Genzyme, bedev-
illed by production problems and a
tetchy relationship with regulators,
could benefit from Sanofi’s scale. In
a sense, the two are a perfect
offices grew property sales by 42 per
cent year-on-year from reduced levels.
Six new offices were opened this year,
including one in Highbury.
Chief executive Dominic Agace said
London remains a prime property
market and Winkworth’s best per-
forming offices were those that “lever-
age off London.”
Winkworth has 58 London offices
and is “expanding into markets that
look to London for their buyers,” he
said.
Agace expects prices in prime mar-
kets to rise by five per cent next year
due to low interest rates and a weak
sterling.
Africa, to help meet a growing
demand for high-quality, career-
advancing higher education.
“We are deeply impressed by the
quality of CTI’s business and the com-
mitment of its management and staff
to produce excellent outcomes for
students.”
Pearson has a growing presence in
southern Africa, with a network of
companies including Maskew Miller
Longman, Heinemann South Africa
and the South African operations of
Edexcel.
The firm has a strategy of moving
away from traditional book publish-
ing to educational technology. Sales
in its International Education divi-
sion are up eight per cent year-on-year
for the nine months of 2010.
ANALYSIS l Pearson
1,040 p
939.00
1,000 22 Nov
960
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
match.
Although the two firms can see
the strategic benefit, they disagree
on price. Genzyme thinks Sanofi’s
$18.5bn (£12bn) offer is derisory,
because it doesn’t take into account
future sales of experimental drugs
like multiple sclerosis treatment
Campath.
Genzyme says Campath could
bring in $3.5bn-a-year at the height
of its powers; Sanofi, along with
plenty of others in the industry, dis-
agrees, largely because a promising
competitor has emerged in the
form of Novartis’ Gilenya.
Now Genzyme is offering to put
Currency weakness is making
London attractive to international
buyers, who now make up 70 per cent
of applicants to buy London proper-
ties, he said.
A supply shortage in the rental mar-
ket, fuelled by a lack of buy-to-let
mortgage approvals, is expected to
increase rents by five per cent in 2011.
Winkworth chief
executive Dominic
Agace said London is
still a prime market for
property.
POWER COUPLE
SUPERBIKE company Ducati and Mercedes-Benz performance arm AMG yesterday said
they would pool their marketing resources and explore other strategic tie-ups in the
future. Analysts said the partnership could lead to a new range of Mercedes-branded
motorbikes. Mercedes-Benz owner Daimler denied suggestions it was readying a full bid
for the superbike maker.
its money where its mouth is, to a
fashion. It is suggesting the deal is
designed differently, using a struc-
ture known as contingent value
right.
If Sanofi agrees, it would stump
up a certain amount to acquire
Genzyme at first, but then pay
more to its shareholders if
Campath hits a series of targets.
That would remove the dispute
over Campath, leaving the pair to
argue over price.
BOTTOMLINE
Analysis by David Crow
Hana set to pay £2.6bn
for stake in Korean bank
▲
BANKING
HANA Financial Group is set to clinch
a deal to buy a 51 per cent stake in
Korea Exchange Bank (KEB) worth
about $4.1bn (£2.6bn), marking a set-
back for rival suitor Australia and
New Zealand Banking Group (ANZ).
In addition to being a blow to ANZ,
Hana’s offer for KEB places a hurdle
on South Korea’s $6bn-plus sale of the
government’s stake in Woori, as Hana
was expected to be a leading bidder in
that auction.
Picture: GETTY
▲
PHARMA
US BIOTECHNOLOGY firm Genzyme,
which is fending off an $18.5bn
(£12bn) hostile takeover bid from
France’s Sanofi-Aventis, is consider-
ing a new deal structure that Sanofi
has said it would be open to.
Genzyme has been holding inter-
nal discussions to consider the use of
a contingent value right (CVR), which
gives shareholders more value if the
acquired company hits benchmarks.
This particular CVR would likely be
CITYA.M. 23 NOVEMBER 2010
The deal by Hana to purchase US
private equity firm Lone Star’s 51 per
cent stake in South Korea’s fifth-
largest bank has seen an auction that
began at least four years ago and saw
several failed bidders, various advis-
ers and a raid by government prosecu-
tors on Lone Star’s Seoul offices. The
firm was later cleared of any wrong-
doing.
A deal with KEB – which will likely
be announced tomorrow – would
mark the biggest private equity auc-
tion in Asia this year.
NEWS | IN BRIEF
Ping An to expand into banking
Ping An Insurance Co of China, the
world’s second-biggest insurer, said it
aims to draw half of its profit from non-
insurance operations within three to five
years, up from about 30 per cent cur-
rently. The firm said it aims to become a
financial conglomerate modelled after
the likes of HSBC and Citigroup, with
banking and investment income each
contributing around a third of total prof-
it each within 10 to 15 years. The move
will put Ping An head to head with
banks such as Industrial and
Commercial Bank of China, which is
looking into providing insurance.
Qatar gas industry suffers
Qatar’s profit growth from its burgeon-
ing liquefied natural gas industry could
come to a halt if neighbouring countries
cannot afford to keep up with rising
prices, energy sources said yesterday. A
pipeline to the United Arab Emirates has
been running at less than two-thirds of
full capacity, because the UAE cannot
afford the fuel. Qatar has turned to the
US and Europe to buy its fuel, though
margins have suffered due to the cost of
transporting the fuel, and is considering
building an underwater pipeline to
secure its future as a long-distance
exporter.
Australia’s biggest float soars
Shares of Australian rail-freight firm QR
National, the country’s biggest float
since 1997, rose four per cent in their
trading debut yesterday, offering mild
hope for a clogged pipeline of more than
A$10bn (£6.2bn) worth of floats. QR
National, which was wholly-owned by
the state of Queensland until it floated a
60 per cent stake, was snapped up by
offshore hedge funds and index fund
managers to propel it into the ranks of
Australia’s top 50 stocks. The firm main-
ly transports coal from Queensland to
ports to be exported to buyers in China.
tied to the performance of Genzyme
drug Campath, an experimental
drug for multiple sclerosis that has
already been approved for cancer.
Sanofi has called Genzyme’s pro-
jection of up to $3.5bn in peak sales
for Campath unrealistic, pointing to
competing drugs that could steal
market share.
Genzyme has dismissed Sanofi’s
$69 per share bid, as it considers it
too low.
Sanofi and Genzyme could not be
immediately reached for comment.
CITYA.M. 23 NOVEMBER 2010
EU consumer
confidence at
two-year high
▲
EU ECONOMY
BY JULIAN HARRIS
MORALE among consumers in
Eurozone countries has surged to its
highest level in almost two years,
according to research announced
today.
The European Commission’s
“flash” consumer confidence index
for November was measured at -9.5,
considerably higher than the expect-
ed level of -11, around which the
index has floated for the last couple
of months. In May the index reached
a seven month low of -17.8.
The result is a boost for retailers,
yet it remains to be seen if the
greater confidence translates into
higher sales. In August and
September there were falls in retail
sales across the Eurozone, according
to data compiled by the EU’s Eurostat
office.
In September retail trade fell by 0.2
per cent on the previous month in
Eurozone countries, and by 0.1 per
cent across the whole of the EU.
Sales of non-food items fell by 0.3
per cent in both areas.
October’s results contained mixed
messages, according to Howard
Archer of IHS Global Insight.
European consumers were more will-
ing than before to make major pur-
chases, but less willing to splash
their cash over the coming 12
months, he said.
“Improved consumer confidence
may not translate into significantly
higher spending over the coming
months,” warned Archer.
Europe’s prospects of recovery will
be clearer today as the Eurozone
announces findings of the latest
Purchasing Managers Index (PMI),
and Germany’s GDP figures are made
public.
The PMI, which measures econom-
ic activity, is expected to fall accord-
ing to Ben May of Capital Finance.
“We expect the strength of the
euro and the effects of fiscal squeeze
to have prompted both the manufac-
turing and services indices to have
fallen,” he said.
Economic News 19
OECD reveals
CHINA REASSURES POOR OVER FOOD PRICES
18 months of
straight growth
ECONOMICS
▲
GROSS domestic product (GDP) has
grown for the sixth consecutive quar-
ter among members of the
Organisation for Economic Co-opera-
tion and Development (OECD).
Across 30 of the OECD’s member
countries, the economy grew by an
average of 0.6 per cent in the three
months to September, according to
data released yesterday. The results
marked the fifth consecutive quarter
of growth across the Eurozone.
Meanwhile in Japan the rate of
growth hit 0.9 per cent, up from 0.4
per cent growth in the last quarter.
Overall, the rate of GDP growth in
OECD countries slowed, down from
0.9 per cent in the second quarter.
The OECD – a Paris-based group
with 33 member countries – estimat-
ed British GDP growth at 0.8 per cent,
slower than the previous quarter’s
rate of 1.2 per cent.
Tomorrow the UK’s Office for
National Statistics (ONS) will publish
its latest figures on British GDP,
expected to show a 0.8 per cent rate of
growth that would match the OECD’s
calculations.
CHINA’S government yesterday insisted that inflation is firmly under control, after food Last week the OECD revised up its
prices jumped 10.1 per cent in October. The government threatened price controls, and forecasts for UK growth this year, yet
promised food subsidies for the poor. Meanwhile, Thailand technically entered recession cut its forecasts for growth in 2011
after its economy retracted for the second quarter in a row, falling by 0.2 per cent. The due to the expected effects of the gov-
annual rate of growth however, is still positive, expanding at 6.2 per cent. Picture: GETTY ernment’s fiscal consolidation plans.
 20 News CITYA.M. 23 NOVEMBER 2010

Mitie targets outsourced jobs Big Yellow pays its first

at the ministry of justice, within edu- despite underlying profit in the divi-
interim dividend since ‘07
▲

SUPPORT SERVICES
cation and property in particular,” sion falling 8.1 per cent to £12.4m.
BY MARION DAKERS chief executive Ruby McGregor-Smith “More consolidation in the sector

SUPPORT services firm Mitie said it
plans to cash in on growing govern-
ment outsourcing in the next 12
months, as it reported a 12 per cent
growth in pre-tax profit for the latest
half.
Mitie said yesterday pre-tax profit
for the six months to the end of
September was £47.5m, while rev-
enue grew 14.7 per cent from last year
to £918.7m, largely due to recent
acquisitions.
“We see a number of opportunities
in the public sector, in social housing,
told City A.M.
The firm said in an update it was
speaking to the cabinet office about
taking on more public sector work,
with the first contracts expected in
spring 2011. Mitie, which already pro-
vides security in English and Welsh
courts, is bidding for work including
prisoner escorting, community serv-
ice and property management.
McGregor-Smith emphasised the
strength of its social housing busi-
ness, which makes up 40 per cent of
its property management revenue,
and good organic growth across our
contracts means we are very positive
about the market,” she said.
Seymour Pierce analyst Caroline de
La Soujeole upgraded her rating from
“reduce” to “add”, adding in a
research note: “This morning’s
results show that the company is
clearly making good progress on its
strategy of becoming a provider of
integrated facilities management and
… is now evolving in areas with high-
er growth and higher margin poten-
tial.”
▲
STORAGE
SELF-storage firm Big Yellow Group
posted a 26 per cent rise in first-half
adjusted pretax profit and resumed its
interim dividend.
“The business is experiencing the
usual seasonal slowdown, but as in
previous years, we look forward to an
improvement in demand from early
2011 as we enter our more buoyant
spring and summer trading periods,”
executive chairman Nicholas Vetch
said.
The company, which has 61 stores
and a further nine in development,
said it would pay an interim dividend
of 4p per share. The company last
paid an interim dividend in 2007.
Pre-tax profit in the six months to
September was £9.7m, excluding one-
off items, compared to £7.7m a year
ago. Revenue was up seven per cent to
£31.1m.
Big Yellow, whose stores are mainly
in London and the South East, said its
occupancy growth more than dou-
bled to 209,000 sq ft in the first half.

Qinetiq wins BEST OF THE BROKERS

ANALYSIS l Dixon
29 p
25.16
ANALYSIS l Autonomy Corporations
1,900 p
ANALYSIS l Paragon Group
170 p 160.00
22 Nov

NASA deal
22 Nov
1,700
1,395.00
27 22 Nov 150

25 1,500

worth $2bn
130

23 Aug 13 Sep 1 Oct 21 Oct 10 Nov 23 Aug 13 Sep 1 Oct 21 Oct 10 Nov 23 Aug 13 Sep 1 Oct 21 Oct 10 Nov

DIXONS AUTONOMY PARAGON GROUP

Seymour Pierce rates the retailer “buy” Deutsche Bank rates the IT firm “hold” UBS rates the mortgage provider “buy”
with a target price of 37p. The broker is with a target price of £16. The broker with an upgraded target price of 235p. The
▲

DEFENCE terms over the next four years while

BY HARRY BANKS
UK DEFENCE technology group
Qinetiq has won a multi-year engi-
neering contract with US Space
Agency NASA worth up to $2bn
(£1.25bn).
Qinetiq’s US arm will provide engi-
neering support and ground opera-
tions to the Kennedy Space Centre in
Florida from March 2011, although
contract terms are still being
the US recently cancelled NASA’s looking for progress in the Nordic countries believes the firm’s recent acquisitions can broker expects the firm to rapidly restart
$108bn Constellation manned space and the UK in the firm’s results on deliver incremental revenue, though it must new lending thanks to improving demand
programme to get astronauts to the Thursday, with a first-half loss of £8m. It invest in sales infrastructure to deliver real and a new £200m warehouse facility. UBS
Moon by 2020 and Mars by 2030. forecasts 37 per cent growth in 2011 pre- growth. Deutsche adds that it still has con- has raised its pre-tax profit estimate for
Qinetiq shares fell by more than a
third in October after it lost a major tax profit as the firm’s new strategy takes cerns about the maturity of the business 2010 by 14 per cent to £69.8m, and by
MoD army, navy and air force train- effect and new products boost sales. model, given the large size of the company. three and nine per cent for 2011 and 2012.
ing contract, but rallied last week as it
announced a 14 per cent rise in 2010
first half profits. To appear in Best of the Brokers email your research to notes@cityam.com
The group employs about 6,000
people in the UK and has staff in most

Anglo American continues mine sell-off

finalised.
The deal is for at least five years,
with options for a further three, and
is worth up to $2bn (£1.25bn).
Profit margins will be at the lower
end of Qinetiq’s range due to the size
US states.
It was forced to issue two profit
warnings in November 2009 and
January 2010 due to delays in UK and
US government contract decisions.
ANALYSIS l Qinetiq ANALYSIS l Anglo American
▲

and quality of the contract. MINING Metallurgical Coal business, based in

3,200 p
The work is expected to include 120 p Australia, is to focus on growing its
designing and developing ground sys- MINING group Anglo American plans metallurgical coal and high margin 2,889.00
tems and equipment for NASA 113.70 to divest its Callide coal mine in export thermal coal businesses,” the 22 Nov
22 Nov
launch vehicles and spacecraft and Australia to better focus on high-mar- firm said in a statement.
technology for NASA mission require- gin export operations. Earlier this month, Anglo American 2,800
110
ments and operations, among others. Callide, located in central announced it was selling two steel
Qinetiq shares closed up by 1.25 per Queensland state, primarily supplies businesses in the Americas to OneSteel
cent at 113.70p as investors welcomed coal to domestic power stations. of Australia for $932m (£600m), as part
the news, which comes at a time of The mine produced 8.8m tonnes of of its plan to focus on its core com-
government spending cuts on both 100 thermal coal in 2009 and has a modities businesses. 2,400
sides of the Atlantic. resource base of more than 1bn Analysts at Numis welcomed the
The UK Ministry of Defence budget tonnes. sale, which they said would allow it to
has been cut by eight per cent in real 23 Aug 13 Sep 1 Oct 21 Oct 10 Nov “The strategy for Anglo American’s develop its thermal coal business. 23 Aug 13 Sep 1 Oct 21 Oct 10 Nov

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

Matrix Group
Matrix, the financial services firm, has
announced the appointment of a new chief
operating officer for asset management: Paul
Bramley. Bramley has worked in financial serv-
ices for more than 20 years, including occupy-
ing previous COO and chief financial officer
roles. He is also a qualified chartered account-
ant and has worked at NatWest Markets,
Kidder, Peabody and Merrill Lynch
International.
BoA Merrill Lynch Research has appointed Athanasios
Bank of America Merrill Lynch Global Vamvakidis to be head of European G10
forex strategy, reporting to David Wood.
Vamvakidis will be responsible for leading
the G10 forex marketing effort as well as
covering the subject and will be based in
London. He joins the company from the
International Monetary Fund where has
spent the last 13 years, most recently as
a deputy division chief.
Gleeds
Management consultancy Gleeds has
appointed Peter Kelland as a director in
Gleeds Advisory. He will be building on 32
years’ experience in tax advice, having
worked at Crosher & James. He will now
be responsible for several client portfolios
and for developing relationships and
drumming up new business.
SEI
Former Barclays Wealth head of UK
asset management David Simpson has
moved over to SEI to be senior business
development director. The position is
newly created in order to enable the firm
to react to interest from global business-
es and insurance companies. Simpson has
spent 22 years in financial services, hav-
ing been responsible for the management
and development of retail services for
Barclays Wealth in the UK and Europe.
American Century Investments
Simon Chester has joined American
Century Investments as VP and senior
corporate analyst. He will be responsible
for providing credit analysis on European
and UK issuers and will be based in the
London office. Formerly, Chester has
spent nine years as a senior credit analyst
as Western Asset Management
Company, specialising in Europe.
Previously, he has worked at ABN AMRO
Bank, NatWest and First National Bank
of South Africa.

To appear in CITYMOVES please email your career +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com
 Investment
THE VIX INDEX
HINTS AT NOT
ENOUGH FEAR
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
V
OLATILITY on the S&P 500 (as meas-
ured by the CBOE Volatility Index) has
fallen by over 30 per cent since the end
of August, even as equities and other
financial instruments have ground higher. That
was when Ben Bernanke signalled the likelihood
of additional stimulus at Jackson Hole. By pur-
chasing US Treasuries, the Fed is holding down
fixed income yields, forcing investors to sell gov-
ernment debt and take on more risk to get
decent returns. This became even more impor-
tant when the Federal Open Markets
Committee (FOMC) made it clear that they
want to see higher inflation, reducing the
appeal of bonds.
Now that renewed quantitative easing is
finally under way, global equity markets (other
than the Nikkei) are beginning to struggle.
Bond yields have also risen. Investors are
already concerned about what happens when
easing ends. The Eurozone is back in the spot-
light with growing fears that Portugal, Spain
and even Italy may soon too require help. Last
week, China also raised its reserve ratio in an
attempt to counter inflation. Yet the volatility
index (VIX) has barely moved.
The VIX measures the 30-day forward
volatility of the S&P 500 using call and put
options. A low number indicates that traders
and investors are relaxed about future equity
movements and so happy to hold long posi-
tions. High numbers indicate that investors are
nervous and willing to pay more for insurance.
Currently, the index is at around 21, which is
pretty close to the long-term average and a lot
lower than 33 where it stood before
Bernanke’s speech. After the collapse of
Lehman Brothers, it shot up above 80.
Despite last week’s price movements,
investors remain remarkably sanguine. They
may be right to be. But for less optimistic
traders, now may be a good time to pick up
some cheap insurance.
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| Contracts for Difference
21
Commodity prices are
not all that they seem
Speculative investors
are holding an awful
lot of long positions,
says Daniel Knowles
T
HERE’S a tiny corner of pessimism
in the commodity investment
world. Amid a multitude of bulls, a
few bears are pointing at what they
think might be the unnoticed elephant in
the room: large institutional investors.
With the possibility of that demand
reversing, should contracts for difference
(CFD) traders perhaps be a little worried?
Certainly it seems unwise to ignore the
amount of speculative money in com-
modities. Hedge funds, pension funds,
and other institutional investors have
been accumulating long positions in com-
modities for a while now, anticipating
that quantitative easing and expanding
emerging market demand will continue
to drive prices up.
Mike O’Rourke, an analyst with BTIG,
says, “Commodity inflation talk has Institutional investors: the unnoticed elephant in the room? Picture: GETTY
finally hit a feverish extreme”. He argues
that a “mistaken” understanding of the rel of crude oil also fell by $7.37. sentiment of institutional investors. There
likely effects of quantitative easing drove According to a poll by Royal Bank of are still an awful lot of those around, and
the recent rally. O’Rourke argues that Scotland, more investors expect to move no one wants to get trampled by a fright-
quantitative easing is unlikely to have the into equities in 2011, while commodities ened elephant.
inflationary effects that many investors should get less popular. Next year could Additional reporting by Thomas Hamed
are expecting, and a little downward pres- well see further unwinding of speculative
sure could throw the markets off. positions then.
As he puts it: “When that much money So should CFD traders go short on com- ANALYSIS l Recent copper prices have
is in position for a trade, especially after modities? Well, possibly not. While the closely tracked speculative demand
80,000 c/lb 450
significant gains have been registered, lit- “massive passives” – large institutional
tle things like increased margin require- investors – may start selling, the demand
ments or a stronger dollar can and will for most physical commodities, and espe- Copper 350
send fast money running.” If institutional cially industrial metals and energy com- 60,000 price
investors start unwinding their positions, modities, is likely to keep increasing faster (rhs)
then the price of everything from copper than the supply. According to analysts at 250
to corn could fall very quickly. Goldman Sachs, the fundamentals are 40,000 Copper
speculative
That already appeared to be happening strengthening faster than the Chinese shorts (lhs)
last week, as the combination of high government is tightening, and so com- 150
Chinese inflation and the Irish sovereign modity prices ought to keep increasing. 20,000
debt crisis scared many investors. Metals In the meantime, however, CFD traders Copper
speculative 50
were hit particularly hard, with the price should watch out for further corrections. longs (lhs)
Source: CFTC, Bloomberg
of copper and aluminium falling by As last week’s sell-off demonstrated, com-
Dec 05 Dec 07 Dec 09
around 12 per cent, but the price of a bar- modity prices are highly vulnerable to the
Get started at
gftuk.com.
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CITYA.M. 23 NOVEMBER 2010 Contracts for Difference 23

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trade this year
BUYERS WON’T Day 2 l Week 4
RETURN AFTER Picture: GETTY
Better day’s trading for most with increases across the board
THANKSGIVING and as in the new film Gekko1981 is back into second but
jasonkhan with his steady profit building now leads the way.
Time is running out to play with a £7,000 prize pot still available.

T
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sovereign debt and China both remaining high on age at 5,770 on Monday morning, the FTSE 100 the market this week. A decent update could 6 sbwilliams £88,629.21 786
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another bout of volatility could materialise cannot reaction to the Irish bailout began to wane. This it has been in for the best part of 2010. There 7 urosbric3 £72,723.78 627
be overlooked. The current IG Markets price on also took it back below a six-month trend sup- appears to be strong support in the 530p–520p 8 hsctrading £56,485.00 465
the Wall Street Cash (the Dow) is 11,235-11,236. port line and below the 30-day moving average. region so the path of least resistance looks to
Mining stocks have seen substantial gains this The 50-day moving average lent some support the upside. A break out of the 545p area could 9 orcanz £35,945.04 259
year. Despite concern that China will rein in its around 5,694 but this may well give way and we well see it target the summer highs around
lending its uptrend remains intact. Capital CFDs could see 5,600–5,550 come into play this 570p. Spread Co offers a spread on Compass 10 tellme £30,428.34 204
quotes a price of 2,343.8p-2,346.7p for BHP week. Spread Co offers a spread on the FTSE Group of 538.6p–539.9p.
Billiton. 100 index of 5,695.4–5,697.4. Donata Huggins To register and the full standings, visit www.intertrader.com/champion

CONTRACTS FOR DIFFERENCE NEWS

BY DONATA HUGGINS
FOREX.COM BRINGS IPHONE APP TO THE UK
Online trading provider GAIN Capital’s
FOREX.com has brought its American
iPhone application to the UK, Japan and
Russia. The application is built for the v2.0
version of the iPhone and will include all the
features of the American mobile platform
such as line and candlestick charting facili-
ties, 40 currency pairs, live newsfeed from
Dow Jones, an economic calendar and a
variety of order types including limit, stop,
FOREX.com has brought its American iPhone app to the UK one-cancels-other (OCO) and trailing stop.
WORLDSPREADS LAUNCHES COMPETITION
WorldSpreads is celebrating its tenth birthday
by holding a trading competition with a prize of
£10,000 for new and existing customers. To
win, traders must complete ten profitable
trades in a row, making a five point profit over-
all. If more than one trader wins, the cash will
be split equally. But if nobody wins, the prize
will go to the trader with the highest number
of consecutive wins. This should not be too dif-
ficult considering WorldSpreads research shows
three-quarters of its clients close in profit.
IG MARKETS LAUNCHES FURTHER BINARIES
IG Markets has launched another binary con-
tract for difference (CFD) on dollar-Canadian
dollar. Binaries allow traders to take a view on
whether a specific outcome will occur. For
example, will the dollar close above or below
Ca$1.0160? David Jones says: “Historically this
pair was of little interest to those outside of
North America but the struggling US economy
– combined with rampant growth in Canada –
has made this pair very much one to watch in
the global currency landscape.”

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LMAX Limited is authorised and regulated by the Financial Services Authority in the United Kingdom (Registration Number 509778). LMAX Limited is registered in England and Wales (number 06505809) and our registered address is
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 Markets&Investment
24 CITYA.M. 23 NOVEMBER 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .310.00 –4.00 328.30 246.90 Compass . . . . . . . . . . . . . . . . . .539.00 +10.00 574.50 399.30 Kazakhmys . . . . . . . . . . . . . . . .1440.00 –10.00 1634.00 955.50 Sainsbury(J) . . . . . . . . . . . . . . . .361.80* –5.00 397.00 307.60
3i Infrastructure . . . . . . . . . . . . . 118.10 –0.20 118.50 97.00 Cookson . . . . . . . . . . . . . . . . . . .533.00 +6.50 616.00 364.80 Kesa Electricals . . . . . . . . . . . . .166.10 +6.20 172.40 98.45 Schroders . . . . . . . . . . . . . . . . .1589.00 –12.00 1670.00 1096.00
A.B. Foods . . . . . . . . . . . . . . . .1075.00 –9.00 1113.00 790.00 Croda Intl . . . . . . . . . . . . . . . . .1447.00 +10.00 1540.00 735.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .249.20 +4.50 255.00 196.50 Schroders N/V. . . . . . . . . . . . . .1262.00 –13.00 1330.00 912.50
Aberdeen Asset Man . . . . . . . . . .178.00 –1.40 191.60 111.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .565.50 –1.00 576.00 401.70 Ladbrokes . . . . . . . . . . . . . . . . .128.50* –0.80 164.60 120.00 Scot. & Sthrn Energy. . . . . . . . . 1167.00 +11.00 1206.00 1006.00
Admiral. . . . . . . . . . . . . . . . . . .1520.00 –34.00 1721.00 1003.00 Davis Service . . . . . . . . . . . . . . .399.90 –1.30 442.30 356.00 Lancashire Hldgs . . . . . . . . . . . .634.00 –13.00 650.00 416.70 Scottish Mortgage. . . . . . . . . . . .641.50* –5.00 684.00 475.00
Aegis . . . . . . . . . . . . . . . . . . . . .132.90 –0.50 137.30 103.10 Debenhams . . . . . . . . . . . . . . . . .70.70 +0.25 85.75 51.95 Land Securities . . . . . . . . . . . . . .651.50 –18.00 705.00 543.00
Afren . . . . . . . . . . . . . . . . . . . . .126.90 +0.30 135.90 77.00 Derwent London . . . . . . . . . . . .1449.00 –8.00 1633.00 1183.00 Legal & General . . . . . . . . . . . . . .94.80 –2.75 107.50 69.05 SEGRO . . . . . . . . . . . . . . . . . . . .293.40 +1.60 368.20 244.00
African Barr Gold . . . . . . . . . . . .537.00 –5.00 685.00 520.50 Dexion Absolute . . . . . . . . . . . . .138.40 –0.20 148.00 131.20 Lloyds Banking Gp . . . . . . . . . . . .63.93 –2.79 79.15 45.30 Serco . . . . . . . . . . . . . . . . . . . . .558.50 +2.50 656.50 491.20
Aggreko . . . . . . . . . . . . . . . . . .1490.00 –25.00 1698.00 727.50 Diageo . . . . . . . . . . . . . . . . . . . 1184.00 –5.00 1240.00 988.00 Logica . . . . . . . . . . . . . . . . . . . .122.30 –0.80 149.10 100.80 Severn Trent . . . . . . . . . . . . . . .1459.00 +20.00 1468.00 981.50
Alliance Trust . . . . . . . . . . . . . . .350.50 –2.80 363.00 292.80 Dixons Retail . . . . . . . . . . . . . . . .25.16 –0.01 39.50 23.07 London Stk Exchange . . . . . . . . .755.00 –2.00 869.00 540.50 Shaftesbury . . . . . . . . . . . . . . . .437.30 –0.50 465.00 348.00
AMEC . . . . . . . . . . . . . . . . . . . . 1130.00 –22.00 1166.00 728.00 Domino’s Pizza . . . . . . . . . . . . . .522.00 +6.50 535.50 278.20 Lonmin . . . . . . . . . . . . . . . . . . .1734.00 –46.00 2198.00 1344.00 Shire. . . . . . . . . . . . . . . . . . . . .1533.00 –8.00 1552.00 1122.00
Amlin . . . . . . . . . . . . . . . . . . . . .378.10 –3.50 437.60 357.30 Drax . . . . . . . . . . . . . . . . . . . . . .374.30 +3.70 451.80 321.50 Man . . . . . . . . . . . . . . . . . . . . . .288.50 –6.60 353.10 199.60 SIG . . . . . . . . . . . . . . . . . . . . . . . 117.80 –3.70 142.10 89.55
Anglo American . . . . . . . . . . . .2889.00 –50.00 3069.00 2210.00 Dunelm . . . . . . . . . . . . . . . . . . . .507.00 +11.80 543.50 319.40 Marks & Spencer. . . . . . . . . . . . .377.60* –3.00 431.40 321.90 Smith & Nephew . . . . . . . . . . . . .585.50 –1.50 700.50 532.00
Antofagasta . . . . . . . . . . . . . . .1375.00 –2.00 1482.00 755.50 Easyjet . . . . . . . . . . . . . . . . . . . .445.30 +5.50 499.90 339.80 Meggitt . . . . . . . . . . . . . . . . . . . .334.60 –2.10 345.70 234.50 Smith(Ds) . . . . . . . . . . . . . . . . . .184.90 +1.80 186.30 103.00
Aquarius Platinum . . . . . . . . . . .327.00 –12.00 490.00 211.50 Edinburgh Inv Tst . . . . . . . . . . . .434.60* –3.40 466.80 345.50 Melrose . . . . . . . . . . . . . . . . . . .293.00 +0.70 306.80 160.00 Smiths . . . . . . . . . . . . . . . . . . . 1135.00* –10.00 1297.00 930.00
ARM Holdings . . . . . . . . . . . . . . .383.70 –1.20 419.50 150.60 Electrocomponents . . . . . . . . . . .267.00 –2.50 271.90 159.50 Mercantile IT . . . . . . . . . . . . . . . .997.00 –5.00 1029.00 822.50 SOCO Intl . . . . . . . . . . . . . . . . . .354.50 +5.00 510.00 287.40
Ashmore . . . . . . . . . . . . . . . . . . .359.60* –0.10 400.50 215.00 EnQuest . . . . . . . . . . . . . . . . . . .131.50 +0.50 138.50 87.35 Michael Page Intl. . . . . . . . . . . . .474.90 –4.10 507.50 326.00 Spectris . . . . . . . . . . . . . . . . . .1218.00 –3.00 1234.00 653.00
Ashtead . . . . . . . . . . . . . . . . . . .128.40 +0.40 135.60 61.25 Essar Energy . . . . . . . . . . . . . . . 511.00 –7.50 566.50 358.50 Micro Focus . . . . . . . . . . . . . . . .340.80 –2.60 550.00 272.20
Astrazeneca . . . . . . . . . . . . . . .3055.00 –3.00 3389.50 2687.00 Eurasian Nat Res . . . . . . . . . . . .898.00 –12.00 1276.00 801.00 Millen & Copthorne . . . . . . . . . . .524.50 –8.50 585.00 329.20 Spirax-Sarco Eng . . . . . . . . . . .1844.00 +84.00 1888.00 1060.00
Atkins(Ws) . . . . . . . . . . . . . . . . .728.00 –10.00 801.00 549.50 Euromoney Inst Inv . . . . . . . . . . .700.00* –5.00 714.00 383.00 Misys . . . . . . . . . . . . . . . . . . . . .293.50 +0.40 300.00 196.60 Spirent Comms . . . . . . . . . . . . . .148.80 –0.10 158.30 90.45
Autonomy Corp . . . . . . . . . . . .1395.00 –21.00 2012.00 1319.00 Experian . . . . . . . . . . . . . . . . . . .735.00 –7.50 763.50 559.00 Mitchells & Butlers . . . . . . . . . . .353.80 –2.20 363.60 242.50 Sports Direct Intl . . . . . . . . . . . . .132.30 +3.80 154.30 89.85
Aveva . . . . . . . . . . . . . . . . . . . .1575.00 +13.00 1575.00 930.00 Ferrexpo . . . . . . . . . . . . . . . . . . .371.20 +2.30 401.60 177.50 MITIE . . . . . . . . . . . . . . . . . . . . .203.10 +2.10 245.90 187.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1164.00 +1.00 1190.00 660.50
Aviva . . . . . . . . . . . . . . . . . . . . .392.80 –6.20 428.70 290.20 FirstGroup . . . . . . . . . . . . . . . . .381.10 –0.40 428.40 331.20 Mondi . . . . . . . . . . . . . . . . . . . . .488.00 –6.80 562.00 304.70 St James’s Place . . . . . . . . . . . . .246.80 –7.60 298.00 203.40
Babcock International . . . . . . . . .513.50 –5.50 645.50 489.00 Foreign & Col Inv Tst. . . . . . . . . .293.30 –0.90 300.00 250.00 Monks Inv Tst . . . . . . . . . . . . . . .337.40 — 349.70 265.00 Stagecoach. . . . . . . . . . . . . . . . .204.40 +0.30 226.10 144.10
BAE Systems . . . . . . . . . . . . . . .345.90* –3.80 389.90 288.10 Fresnillo . . . . . . . . . . . . . . . . . .1404.00 –4.00 1480.00 647.00 Morgan Crucible . . . . . . . . . . . . .242.70 –1.30 254.90 142.90 Standard Chartered . . . . . . . . . .1786.00 –17.00 1975.00 1316.50
Balfour Beatty . . . . . . . . . . . . . . .275.50* –3.50 304.80 228.60 G4S . . . . . . . . . . . . . . . . . . . . . .247.20 –2.00 285.70 238.70 Morrison Wm . . . . . . . . . . . . . . .273.00 –1.50 307.10 255.00 Standard Life . . . . . . . . . . . . . . .216.00* –6.90 238.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .270.00* –4.20 394.25 253.40 Genesis Emerging Mkts Fd . . . . .520.50 –0.50 542.50 383.00 Murray Intl Tst . . . . . . . . . . . . . . .905.00 +0.50 938.50 720.00 SuperGrp . . . . . . . . . . . . . . . . .1460.00 –15.00 1490.00 499.00
Barratt Development . . . . . . . . . . .74.80 –0.15 145.00 72.15 GKN . . . . . . . . . . . . . . . . . . . . . .191.60 –2.10 196.90 100.40 National Express. . . . . . . . . . . . .239.70 –2.10 261.30 164.80 TalkTalk . . . . . . . . . . . . . . . . . . .153.80 +2.30 154.90 106.60
BBA Aviation . . . . . . . . . . . . . . .196.40 –1.40 220.00 145.90 GlaxoSmithKline . . . . . . . . . . . .1247.50* –4.00 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .581.00 +2.50 607.65 474.80 Talvivaara Mining . . . . . . . . . . . .528.00 –11.00 597.00 341.40
Berkeley . . . . . . . . . . . . . . . . . . .806.00 +0.50 917.50 735.00 Great Portland Estates . . . . . . . .337.60* –0.40 368.60 265.40 Next . . . . . . . . . . . . . . . . . . . . .2063.00 –8.00 2361.00 1816.00 Tate & Lyle . . . . . . . . . . . . . . . . .523.50 –8.00 539.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . .1209.50 –12.50 1302.50 966.90 Greene King . . . . . . . . . . . . . . . .452.70 +1.70 484.00 372.50 Northumbrian Water . . . . . . . . . .347.80 +1.10 364.00 240.50
BHP Billiton . . . . . . . . . . . . . . .2319.50 –13.00 2500.00 1678.00 Halfords . . . . . . . . . . . . . . . . . . .422.70 –5.30 562.50 370.10 Ocado Grp . . . . . . . . . . . . . . . . .141.00 +2.00 169.00 120.90 Taylor Wimpey . . . . . . . . . . . . . . .25.30 +0.80 46.34 22.12
BlackRock Mining . . . . . . . . . . . . 711.00 +3.00 737.50 490.00 Halma . . . . . . . . . . . . . . . . . . . . .337.90 –0.40 345.50 221.80 Old Mutual . . . . . . . . . . . . . . . . .124.50* –3.30 146.90 95.30 Telecity . . . . . . . . . . . . . . . . . . . .446.70 –1.30 546.00 327.60
BlueBay . . . . . . . . . . . . . . . . . . .482.00* — 495.00 251.00 Hammerson . . . . . . . . . . . . . . . .399.50 –4.30 439.20 332.20 Partygaming . . . . . . . . . . . . . . . .238.00 +2.60 339.70 205.80 Templeton Emrg Mkts . . . . . . . . .647.00 +1.50 688.00 470.00
Bluecrest Allblue GBP . . . . . . . . .174.00 +0.50 174.50 151.90 Hargreaves Lansdown . . . . . . . .496.00 +2.30 502.50 259.40 Pearson . . . . . . . . . . . . . . . . . . .939.00 +8.50 1069.00 812.00 Tesco . . . . . . . . . . . . . . . . . . . . .421.85* –4.80 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .56.00* +0.40 56.20 37.50 Hays . . . . . . . . . . . . . . . . . . . . . .107.80* –1.30 125.30 82.50 Pennon . . . . . . . . . . . . . . . . . . . .628.00 — 644.00 476.80 Thomas Cook . . . . . . . . . . . . . . .192.40 +3.80 277.20 167.50
BP . . . . . . . . . . . . . . . . . . . . . . .431.00 –4.85 658.20 296.00 Henderson . . . . . . . . . . . . . . . . .126.10 –1.30 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .351.00* –2.00 520.00 335.90 Travis Perkins . . . . . . . . . . . . . . .852.00 –0.50 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1036.00 –1.00 1052.00 709.00 Heritage Oil. . . . . . . . . . . . . . . . .374.40 –11.20 585.00 295.90 Petrofac . . . . . . . . . . . . . . . . . .1460.00 –21.00 1545.00 900.00 TUI Travel . . . . . . . . . . . . . . . . . .208.00 +7.20 313.90 189.20
British Airways . . . . . . . . . . . . . .265.70 –4.70 290.00 180.20 Hikma Pharma . . . . . . . . . . . . . .774.00 –5.00 813.00 480.00 Petropavlovsk . . . . . . . . . . . . . .1043.00 –7.00 1370.00 834.00 Tullett Prebon . . . . . . . . . . . . . . .354.50 +0.50 427.00 261.20
British Amer. Tob . . . . . . . . . . .2412.00 –15.50 2490.50 1832.00 Hiscox . . . . . . . . . . . . . . . . . . . .349.00 –2.60 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .668.50 –6.50 775.00 550.50 Tullow Oil . . . . . . . . . . . . . . . . . 1198.00 –8.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .480.30 –1.70 497.00 338.50 Hochschild Mining . . . . . . . . . . .564.50 –7.50 591.50 220.00 Premier Farnell . . . . . . . . . . . . . .296.20 –0.50 300.00 150.80 UK Commercial Prop. . . . . . . . . . .76.00* –0.50 84.90 71.00
British Land . . . . . . . . . . . . . . . .487.20 –9.10 525.00 416.00 Home Retail . . . . . . . . . . . . . . . .206.00* –0.70 316.30 201.70 Premier Oil . . . . . . . . . . . . . . . .1881.00 –9.00 2032.00 984.00 Ultra Electronics . . . . . . . . . . . .1605.00 –5.00 1903.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .502.50 +4.10 518.00 366.10 Homeserve . . . . . . . . . . . . . . . . .426.00 –4.50 502.00 405.40 Provident Financial . . . . . . . . . . .766.00* +9.00 983.50 725.50 Unilever . . . . . . . . . . . . . . . . . .1874.00* –10.00 2024.00 1662.00
Brown(N.) . . . . . . . . . . . . . . . . . .290.00 +5.00 308.00 204.80 HSBC Hldgs . . . . . . . . . . . . . . . .653.80* –3.70 752.00 595.20 Prudential . . . . . . . . . . . . . . . . . .600.50 –14.00 665.00 475.70
BSkyB . . . . . . . . . . . . . . . . . . . .724.00 –2.00 737.00 521.00 Hunting . . . . . . . . . . . . . . . . . . .625.00* –11.50 663.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .377.00 –5.50 406.80 231.70 United Utilities . . . . . . . . . . . . . .627.00 –1.00 634.50 470.00
BT . . . . . . . . . . . . . . . . . . . . . . .163.30 –1.70 170.10 108.40 ICAP . . . . . . . . . . . . . . . . . . . . . .462.30 –12.70 501.50 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . . 113.70 +1.40 179.10 96.00 Utd Business Media . . . . . . . . . .639.00 –3.50 692.00 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . . 711.00* –10.00 784.50 614.00 IG . . . . . . . . . . . . . . . . . . . . . . . .497.40 –4.60 560.00 312.60 Randgold Resources. . . . . . . . .6005.00 –20.00 6755.00 4126.00 Vedanta Resources . . . . . . . . . .2221.00 +13.00 2967.00 1795.00
Burberry . . . . . . . . . . . . . . . . . .1029.00 –4.00 1065.00 555.50 Imagination Tech Gp . . . . . . . . . .322.40 –9.60 445.00 200.00 Reckitt Benckiser . . . . . . . . . . .3584.00 –6.00 3667.00 3019.00 Victrex . . . . . . . . . . . . . . . . . . .1232.00 –8.00 1355.00 753.00
Cable & Wire Comms . . . . . . . . . .45.56* –1.47 150.00 45.04 IMI . . . . . . . . . . . . . . . . . . . . . . .846.00 –3.00 860.00 483.10 Reed Elsevier . . . . . . . . . . . . . . .535.50 — 566.00 454.60 Vodafone . . . . . . . . . . . . . . . . . .166.10* –1.65 179.90 126.50
Cable & Wire Wwide . . . . . . . . . . .65.35 –0.95 94.80 60.05 Imperial Tobacco. . . . . . . . . . . .2001.00 –12.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .74.90 –2.60 125.50 64.05 Weir . . . . . . . . . . . . . . . . . . . . .1705.00 –28.00 1750.00 660.00
Cairn Energy. . . . . . . . . . . . . . . .368.80 –4.30 497.60 306.80 Inchcape. . . . . . . . . . . . . . . . . . .337.70 –2.30 358.00 235.00 Renishaw . . . . . . . . . . . . . . . . . 1194.00 +22.00 1250.00 479.00 Wellstream Hldgs . . . . . . . . . . . .735.00 –4.00 810.00 429.70
Caledonia Invs . . . . . . . . . . . . .1752.00 –11.00 1833.00 1496.00 Informa . . . . . . . . . . . . . . . . . . . .418.40 +1.10 450.50 263.30 Rentokil Initial . . . . . . . . . . . . . . . .92.75 –1.15 140.20 89.40 WH Smith . . . . . . . . . . . . . . . . . .475.40 +0.40 551.00 392.20
Capita . . . . . . . . . . . . . . . . . . . . .674.00 –3.00 829.50 655.00 Inmarsat . . . . . . . . . . . . . . . . . . .681.50 –9.50 831.00 603.50 Resolution . . . . . . . . . . . . . . . . .230.80 –6.20 280.50 220.10 Whitbread . . . . . . . . . . . . . . . . .1705.00* –4.00 1807.00 1260.00
Capital & Counties . . . . . . . . . . .145.00 +0.10 159.00 99.60 Intercontl Hotels . . . . . . . . . . . . 1138.00 –3.00 1244.00 803.00 Rexam . . . . . . . . . . . . . . . . . . . .313.70 –0.90 348.80 271.40 William Hill . . . . . . . . . . . . . . . . .158.00* +1.40 217.80 156.30
Capital Shopping Centres . . . . . .361.90 –3.80 523.50 300.10 Intermediate Capital . . . . . . . . . .335.90 –1.20 352.80 233.50 Rightmove . . . . . . . . . . . . . . . . .765.50 +3.00 830.00 456.90 Witan Inv Tst . . . . . . . . . . . . . . . .475.40 –4.60 492.00 397.30
Carillion . . . . . . . . . . . . . . . . . . .342.70 –1.90 361.90 272.00 Intertek . . . . . . . . . . . . . . . . . . .1799.00* –23.00 1964.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .4185.00 –45.00 4477.50 2751.00
Carnival . . . . . . . . . . . . . . . . . .2605.00* –16.00 2937.00 1963.00 Intl Personal Fin . . . . . . . . . . . . .315.60 +0.80 340.90 181.40 RIT Capital Partners . . . . . . . . . 1174.00 –13.00 1215.00 940.00 Wolseley . . . . . . . . . . . . . . . . . .1754.00 — 1837.00 1155.00
Catlin . . . . . . . . . . . . . . . . . . . . .344.00 –0.70 394.60 303.20 Intl Power . . . . . . . . . . . . . . . . . .433.20 –3.60 439.20 268.70 Rolls Royce . . . . . . . . . . . . . . . .590.50* –1.50 661.50 466.10 Wood Group (John). . . . . . . . . . .478.50 –0.30 492.60 279.60
Centamin Egypt . . . . . . . . . . . . .184.20 –0.90 202.80 103.50 Invensys . . . . . . . . . . . . . . . . . . .329.00* –6.00 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1623.00 –16.00 1906.00 1101.00 WPP . . . . . . . . . . . . . . . . . . . . . .733.00 –8.50 758.50 562.50
Centrica . . . . . . . . . . . . . . . . . . .329.50 –0.40 347.00 252.00 Investec . . . . . . . . . . . . . . . . . . .508.50 –0.50 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .39.84 –1.93 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1299.00 –20.00 1462.50 832.50
Charter Intl . . . . . . . . . . . . . . . . .693.50 –13.50 855.50 563.50 ITV . . . . . . . . . . . . . . . . . . . . . . . .68.40 +0.10 73.00 46.77 Royal Dutch Shell A . . . . . . . . .2003.00* –27.50 2106.50 1621.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2865.00 –1.00 3711.00 2551.00 Jardine Lloyd Thompson. . . . . . .578.00 — 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1977.50* –23.00 2071.00 1550.00
Close Bros . . . . . . . . . . . . . . . . .813.00* +4.50 834.00 657.00 Johnson Matthey . . . . . . . . . . .1878.00 –17.00 1999.00 1435.00 RSA Insurance . . . . . . . . . . . . . .124.40* –2.10 137.40 114.10 * Ex-Dividend † Suspended
Cobham . . . . . . . . . . . . . . . . . . .199.90 –5.10 278.60 199.20 JPMorgan Emerg Mkts . . . . . . . .606.00 +7.00 618.00 448.00 SABMiller . . . . . . . . . . . . . . . . . 2113.00 –1.50 2165.50 1638.00
COLT Group . . . . . . . . . . . . . . . .121.80 –0.20 144.20 107.70 Jupiter Fnd Mgmt . . . . . . . . . . . .284.90 +0.60 310.00 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .260.00 –1.00 286.80 208.20 www.interactivedata.com

FTSE hits a three-week low as fears of Bank shares drop amid

debt contagion in Eurozone take hold insider trading probes
Capital Markets in Baltimore.

THELONDON Ireland’s debt crisis might spread to

other Eurozone countries, such as
Portugal and Spain.
the engineer to “neutral” from “buy”
on valuation grounds.
Defensive stocks came into favour
THENEW YORK Worry about a broad insider trad-
ing probe in the United States hit
shares of large brokerages and

REPORT “Of course if Spain does get caught

in the crosshairs, it’s going to be an
absolute nightmare for Europe
as investors switched out of sectors
perceived as more risky, with utilities
Severn Trent and Scottish & Southern
REPORT Goldman Sachs Group fell 3.4 per
cent to $161.05.
“The situation on insider trading
because it just can’t bail it out. It has- Energy adding 1.4 per cent and 1 per put some more fuel on the fire for

B B
BRITAIN’S top share index n’t got the facilities to bail it out,” cent respectively. ANK shares weighed on stocks short-term trading in the afternoon,”
closed lower yesterday, hurt by David Morrison, market strategist at On the upside, TUI Travel rose 3.6 yesterday as Europe’s smoulder- said Schrader, who added the con-
banks and commodity stocks as GFT Global, said. per cent to top the FTSE 100 leader- ing debt crisis and fears of an cerns were “probably a gross over-
initial upbeat sentiment over Britain’s decision to commit board after a report said parent TUI insider trading probe in the reaction” to the insider trading probe.
Ireland’s bailout subsided, giving way around £7bn to help Ireland was met was in talks with investor John United States sapped buying interest The Dow Jones industrial average
to fears over potential problems in with mixed reactions, with the gov- Fredriksen over its stake in shipyard for most of the session. fell 24.97 points, or 0.22 per cent, to
other Eurozone countries. ernment finding it difficult to sell firm Hapag-Lloyd, traders said. The Nasdaq fared better than the 11,178.58. The Standard & Poor’s 500
The FTSE 100 closed down 52 the policy decision to British taxpay- A report on Sunday in German Dow and the S&P 500 after upgrades Index dipped 1.89 points, or 0.16 per
points, or 0.9 per cent, at 5,680.83, its ers. newspaper Welt Am Sonntag said to chipmaker SanDisk and chip-gear cent, to 1,197.84. But the Nasdaq
lowest since October 29, retreating “We are doing this because it is Hapag-Lloyd was in the process of makers Amkor Technology and Composite Index gained 13.90 points,
from 5,783.14 earlier in the session overwhelmingly in Britain’s national appointing investment banks. Teradyne. or 0.55 per cent, to 2,532.02.
after Ireland agreed to a bailout by interest that we have a stable Irish The news fuelled talk TUI could use Risk aversion kicked in as stocks fol- Ireland’s unpopular coalition gov-
European partners and the economy and banking system," said the sale of its stake, or a portion of its lowed the euro’s fall against the US ernment began to crumble a day after
International Monetary Fund. chancellor George Osborne. stake, to fund further stake-buying in dollar after turmoil in Ireland’s frag- agreeing on an European
Banks, also up earlier in the ses- Mining stocks slipped, following TUI Travel, traders said. ile coalition government overshad- Union/International Monetary Fund
sion, went into reverse. Royal Bank of metals prices lower, on nagging fears owed an agreed-on bailout of the bailout, casting doubt on its ability to
Scotland, which traders said is the of further tightening of monetary ANALYSIS l FTSE country. push through an austerity budget
most exposed to Ireland through its policy in China, the world’s biggest 6,000 5,680.83 Investors fear the crisis will spread crucial to receiving assistance.
Ulster Bank business, topped the consumer of metals. 22 Nov throughout Europe, raising the spec- US-listed shares of Bank of Ireland
blue-chip fallers’ list, off 4.6 per cent, Integrated oil stocks, the top blue- 5,800 tre of losses by exposed US banks. The tumbled 16.9 per cent to $2.22, and
while Lloyds Banking Group shed 4.2 chip performers earlier yesterday, fell, KBW bank index lost 1.5 per cent and those of Allied Irish Banks lost 9.8 per
per cent. with BG Group down 1 per cent. 5,600 Dow component JPMorgan Chase & cent to $1.11. Both have lost nearly
The European Union and the IMF Interdealer broker ICAP dropped Co fell 2.3 per cent to $38.51. half their market value since August.
agreed on Sunday to help bail out 2.7 per cent as broker Execution 5,400 “All the continued concerns com- The S&P energy index bounced
Ireland with loans expected to total Noble cut its rating on the stock to ing out of Europe and the debt situa- from a more than 2.2 per cent decline
€80-90bn to resolve its banking and “hold” from “buy”. 5,200 tion there is what got us started on to close down 0.4 per cent after US
budget crisis. Invensys was also hit by a broker the way down today,” said Tom light crude futures capped losses,
Market participants said investors downgrade, shedding 1.8 per cent, as 5,000 Schrader, managing director of US trading at $81.72 per barrel after earli-
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
were rattled by concerns that BofA Merrill Lynch cut its rating for equity trading at Stifel Nicolaus er falling below $81.
CITYA.M. 23 NOVEMBER 2010 25

WORDS BY
JESSICA MEAD

The ex-investment banker who is

shaking up the retail trading world
The chief executive of LMAX
believes a different approach is
why his new venue is here to stay

R
OBIN OSMOND does not come
across as somebody intent on dis- Robin Osmond is
rupting the status quo. But this is intent on opening
exactly what the softly spoken and up opportunities
quietly animated LMAX chief executive has for retail traders
in his sights with the launch of the firm’s
new retail trading venue. Picture:
The exchange, which currently offers Micha Theiner/
contracts for difference (CFD) and rolling CITY A.M
spot FX, aims to shake up the market in
which it operates. “What LMAX is about is
disrupting the market for retail financial
trading just as Betfair successfully disrupt-
ed the market for online sports gambling,”
says Osmond, who stresses that he didn’t
join LMAX nearly three years ago just to
head up a “me-too company”.
It has been an exciting few years for
Osmond, who had been in investment
banking for some 20 years prior to heading
up LMAX. He had initially dismissed his
chances of working at LMAX because of his
lack of knowledge about LMAX’s parent
company Betfair or spread betting before
being convinced by a head-hunter.
Since he joined, he has overseen the
exchange from project stage to software
development to seeking approval from the
Financial Services Authority (FSA) to finally
going live on 25 October. From the
moment it opened for business – and
indeed before – LMAX has sought to differ-
entiate itself from existing market partici-
pants, emphasising its neutrality,
transparency and wholesale liquidity as
well as its status as an exchange.
Sitting in LMAX’s offices in West
London, 45-year-old Osmond argues that
LMAX has a better business model for Oxford nightclub on a Monday night while owns 73.5 per cent – with further options having looked at how an exchange can dis-
retail traders because an exchange is not still at university. to subscribe in the company if they per- turb a market and do something exciting
positioned against its clients: “There is a But the FSA took some convincing. form its market-making obligations while before being approached by Betfair, is now
widespread perception out there among LMAX was getting the ball rolling in the Optiver has similar options to invest. a self-confessed “exchange convert”. He
retail traders that when they are requoted autumn of 2008 when the FSA had plenty The intention is to increase this number and LMAX are hoping you’ll be equally
or stopped out at a single tick point this on its plate and LMAX was proposing a to three to five liquidity providers per convinced.
behaviour stems from their providers’ multilateral trading facility in leveraged instrument. “That gives a very high level of
desire to profit from their losses. By offer- products aimed at retail clients. liquidity, it will lead to very tight pricing –
ing an exchange venue, LMAX gets away though even today we are seeing market
CV | ROBIN OSMOND
from all this.” BETTER PROPOSITION leading prices particularly on some FX Age: 45. Born in the UK but grew up in equity capital markets and as HSBC’s
Osmond explains that he wanted to be This rang a lot of alarm bells, smiles crosses and major indices – and will also
Bangkok, Hong Kong and Sudan. global head of investment banking. He
part of something different in a fast-grow- Osmond, but adds: “At the end of the day I give the exchange that resilience.”
ing market, where increasing broadband believe that the FSA authorised us and got But Osmond’s expectation is that LMAX started his career at Morgan Stanley,
penetration, customer dissatisfaction with behind our project because our product is will not always be reliant on institutional Lives: In Barnes with his wife and where he spent 15 years.
paying intermediaries 2-3 per cent a year to about bringing a better proposition to liquidity, believing that the volume of three children, aged 12, 10 and seven.
underperform the index and the sophisti- retail clients than some of the existing retail-to-retail trading will rise and the He cycles to work each day Interests: Cycling, running, cooking.
cation of the retail trader should fuel business models and about bringing more importance of the institutional liquidity
growth. For LMAX to succeed fully in dis- and more OTC trading on exchange.” providers will diminish. But he qualifies Education: History at Worcester Books: Just finished Lacuna by
rupting an already competitive market- LMAX has already brought three liquidi- this: “I think that we will always need to College, Oxford; MBA at Insead. Barbara Kingsolver. “I’m not a sub-
place, it will certainly need the retail ty providers on board – Goldman Sachs, have a level of institutional liquidity so scriber to reading a lot of business
market to grow. But Osmond is far from a Optiver and JPMorgan – under deals span- that there are always prices when clients Career: Prior to joining LMAX, he books or management self-help books;
novice at drumming up demand – after ning about two-and-a-half years. Goldman want to close out a position.” worked for JPMorgan in corporate reading is for relaxing.”
all, his first venture involved filling an also holds a 12.5 per cent stake – Betfair Osmond, who admits to never really

“Alpha-beta. Active-passive. Style-judgement. Core-satellite.

Master the language, seize the opportunity.”
Narayan Naik, Professor of Finance

Investment Management Evening Programmes

Maximise your portfolio performance
Call +44 (0)20 7000 7051 or email finance@london.edu or visit www.london.edu/imp/ Leading Financial Thinking
 Lifestyle
26
Gifts with
a sense of
history
Antiques are in fashion this
Christmas, says Timothy Barber
I
T’S no coincidence that the recession
has overlapped with a surge in the
popularity of all things old fashioned.
If our confidence in a bold, sparkling
future has faltered, our interest in the aes-
thetics of the past – and the values of qual-
ity, provenance and craftsmanship that go
with it – has rocketed upwards. 1940s-
themed club nights are thriving, vintage
fashion items are hotter than ever, Savile
Row is once again an epicentre of male
style – and at home, nothing says now like
something that was made way back when.
Which means that, for Christmas,
antiques make for far more stylish gifts
than things bought brand new, and
they’re better value too.
“You can get the same quality as a mod-
ern piece of jewellery or other decorative
item at a fraction of the cost,” says Neil
Jackson, manager of Grays, the popular
Mayfair antiques market. “You’re buying
something made years ago by artisans,
that wasn’t mass produced and is likely to
be unique, that has a history and charac-
ter that can’t be replicated.”
The antiques market is subject to the
vicissitudes of taste and fads – dealers are
gearing up for a rush of interest in engage-
ment rings with sapphires and diamonds
in the wake of last week’s royal announce-
ment. Mark Dodgson, secretary general
of the British Antique Dealers’
Association (BADA), says a flurry of calls
from people wondering about the value of
the pottery in their attics was one result of
the spectacular sale two weeks ago of a
18th century Chinese vase for £53.1m.
“That was a fluke, but good quality ori-
ental ceramics that were made for the
home market rather than for
export are very strong right now,
as Asian collectors are very
active bringing them home,”
he says.
But while a few people will
get lucky with their antique
investments or their inherited
heirlooms, Dodgson’s advice to
novices is not to get overly wor-
ried about the potential of an
antique’s future value. After all,
if something has already been
around decades or centuries, you
should be looking to pass it on
rather than offload it at a profit.
“Buy something because you, or the
OUT OF OFFICE
TIMOTHY BARBER
| Collecting
Below, the Chinese
vase sold in a Ruislip
auction house for
£53m two weeks ago. person you’re giving it to, will like it and it
Picture: REX will mean something,” Dodgson says. “Buy
from dealers who are specialists in their
areas rather than generalists – if you’re
spending a lot of money, you need to have
confidence that the person selling it to
you knows exactly where it fits in, what its
history is and can value it accurately.”
And that’s half the fun, of course –
ANTIQUES IN LONDON | WHERE TO GO
Grays Antiques Market Just round the corner
from Bond Street station, this is the vintage
lover’s alternative to Mayfair’s exorbitant bou-
tiques, with over 200 dealers gathered under
one roof. It’s open Monday to Saturday, and on
2 December its Christmas shopping party
includes live music and drinks, though you’ll
need an invitation to attend. Call 020 7619
7034 to attend. 58 Davies St and 1-7 Davies
Mews, W1K 5AB. www.graysantiques.co.uk
The London Silver Vaults In the heart of
lawyer land, the Silver Vaults houses a vast col-
lection of historical silverware in a site that
once rented safe deposit vaults to wealthy
Left, Black Watch BLACK WATCH RETURNS TO THE BARBICAN
tells the story of Quite simply one of the greatest theatrical
Scottish soldiers sent achievements of the past decade, Gregory
to fight in Iraq and Burke’s astonishing play about Scottish sol-
Afghanistan. diers fighting in the Middle East is returning
to the Barbican this month. Taking in military
traditions, the desolation of working class
Scottish life, the boredom and terrors of
desert warfare, it’s a moving, electrifying
show and absolutely essential viewing. 27
Nov-22 Jan, Barbican Theatre, EC2Y 8DS.
Tickets £35/40 from www.barbican.org.uk
shopping for antiques can be a journey of
discovery whether you end up buying any-
thing or not, as Jackson points out.
“You’re getting an education and history
of the period you’re buying from, and for
the dealers explaining things and impart-
ing knowledge is their passion – you
always come out feeling that you’ve
gained something.”
Victorians. For gift hunters, it has a dedicated
Christmas selling exhibition, this year themed
around the cocktail party, with items including
an Art Deco silver cocktail shaker and a pair of
Old Sheffield Plate wine coolers dating from
around 1880. 53-64 Chancery Lane, WC2A
1QS. www.thesilvervaults.com
Alfies Antiques Market The more bohemian
sister site of Grays specialises in 20th century
furniture, vintage fashion, art and collectibles.
Perfect for those looking to kit out their city
pads with some on-trend retro furniture. Alfies
is also holding a Christmas shopping party on 9
December. For an invitation to attend, call 020
SEVEN DIALS CHRISTMAS SHOPPING
Anyone looking to get their Christmas
shopping wrapped up early should
head to Seven Dials in Covent Garden
tomorrow evening, where over 100
shops and venues will be offering 20
per cent off. Fred Perry, Diesel and
American Apparel are among those
involved, as well as various bars and
restaurants in the area.
For more information go to
www.sevendials.co.uk.
CITYA.M. 23 NOVEMBER 2010
REVIEW:
SEASONAL PEDICURE
CHRISTMAS PEDI AT THE
SPA AT BROWN’S HOTEL
£85
hhhhi
T
HERE’S something very lovely about a
wintry, Christmassy pedicure. It’s cold
outside, you’ve got a flush in your cheeks
and your hands are full of goody bags.
What could be nicer than ducking out of the
shopping mayhem and settling onto a warm
bed in a delicious cavern of a spa in one of
Mayfair’s most luxurious boutique hotels, stick-
ing your feet into a warm wooden tub of hot
milk with apple and cinnamon and getting your
feet pampered while your read Vogue (or City
A.M.)?
Very little is the answer. And so it was with
a deep sense of bliss that I settled in at the
Spa at Brown’s last week for the seasonal
Christmas pedicure, and with a sense of well-
being that I departed in flipflops to preserve
the immaculate French pedicure my therapist
had applied.
Like the signature seasonal and milk and
honey pedicures at Brown’s, this one begins
with a drink of your choice (champagne is sug-
gested – hot chocolate is the alternative,
though I had a cappuccino since your wish is
their command at these prices) as your thera-
pist scrubs your feet. Next, my tootsies were
scrubbed with Demerara sugar – more hydrat-
ing than salt – and rubbed with sticky treacle
before being settled into that gorgeous warm
broth of apple, cinnamon and milk. My nostrils
were full of Christmas and my feet were soft-
ening by the second. Next comes a hot paraffin
wrap on both feet to ensure total softness and
finally, the shaping and painting of the nails.
I walked away feeling soothed and happy
and – of course – full of
both Christmas spirit
and ready for open-
toed party shoe
season. Pedicure
available from 1
Dec to 31 Jan
2011. To book, call
020 7518 4009,
www. brown-
shotel.com. 33
Albemarle Street,
W1S 4BP.
Zoe Strimpel
7723 6066. 13-25 Church Street, NW8 8DT.
www.alfiesantiques.com
Lots Road West London is arguably the heart
of the UK’s antiques scene, with a number of
high-end dealers dotted around Kensington and
Pimlico. Over in Chelsea, Lots Road Auctions
holds auctions every Sunday, with over 500
items auctioned each time. There are specialist
sales each month in areas like fine antiques,
continental furniture, fine carpets and rugs;
while items to be auctioned are available for
viewing four days and one evening per week.
71-73 Lots Road, SW10 0RN.
www.lotsroad.com
THE BOOK OF THE DEAD
The British Museum’s new exhibi-
tion, Ancient Egyptian Book of the
Dead, is one of its most enthralling
shows. Papyrus and linen versions
of the Book of the Dead – a collec-
tion of spells for guiding the dead
through the underworld – are dis-
played along with figurines, jew-
ellery, statues, coffins and other
artefacts. Until 6 March, The British
Museum. www.britishmuseum.org
CITYA.M. 23 NOVEMBER 2010
There is no folly in eating here
Bank’s big new
opening is a buzzing,
all-purpose affair
with a great vibe ...
and middling food
The Folly
41 Gracechurch Street, EC3V 0BT
Tel: 0845 468 0102
FOOD hhhII
SERVICE hhhhI
ATMOSPHERE hhhhI
Cost per person without wine: £20
T
HE City, it appears, has been truly
starved of a good, affordable restau-
rant/bar with funky design (yes,
funky, rather than drab, formal,
sticky or cafe-style). Because from the
moment the Folly, the enormous, windowy
multi-story venue on the corner of
Gracechurch Street opened with a pound-
ing launch party complete with heavily
guarded doors, it has been rammed.
Rammed morning, noon and night. I want-
ed to go on Friday but there wasn’t space –
Monday lunchtime was the best I could get
at short notice. Today, as we sat in the
bustling (but not totally booked-up) restau-
rant, the manager told him the place books
up entirely by Tuesday for the rest of the
week and I believed him.
So what’s the appeal? It’s the sense that
you’re in good hands. In the hands of
absolute pros, actually; that every touch,
from the real dripping candelabra on the
tables to the herb pots wrapped in bits of
the FT (good riddance) to the assertive,
affordable Anglo-American menu to the
staff are all part of a machine that functions
and will continue to function well. After all,
the group has proved itself before: the
Folly’s owners are also behind the successful
Anthologist on Gresham St, the Refinery in
Southwark and Parlour in Canary Wharf.
I also think the City is thrilled to have a
good bar: a good place to gather and people-
watch. The manager reacted with firm dis-
taste when I proposed the idea of a “meat
market” but I’ve been to the Folly on both
Thursday and Friday nights and it’s like a
scene from 1980s boom-time Manhattan –
girls holding Chardonnay glasses and
Cosmos over here, guys over there downing
beers, all watching each other with a mix-
ture of lust and suspicion. An air of excite-
ment certainly pervades.
But the Folly is keen on encouraging
female business and has recognised the
value of the female pound. In the City in
particular, men can be predatory and some-
THREE OTHER HEAVING CITY RESTAURANTS
ZOE STRIMPEL
THE ANTHOLOGIST
Nearly the same as the Folly, but “darker” as the Folly
manager puts it, with a pink butterfly as its logo. It’s also
smaller. But passing down Gresham Street it’s more of a
mellow, tempting den than a dingy dive. A proper
nightspot, with “Soul Saturdays”, a good wine list and a
huge variety of grazing and proper food menus ensure
it’s always buzzing. 8 Gresham Street, EC2V 7BB.
WORDS BY
ZOE STRIMPEL
times distasteful, and as a woman it is easy
to feel uncomfortable in its watering holes.
And so they are wise to give the place a girly
feel – from the white fur-lined rocking
chairs and the floral, whimsical vibe (see
the candles; globular lights, rosemary, and
sale of flowers by the deli), to the frowning
on meat-market behaviour.
Of course, at a Monday lunchtime, we
were not there for a meat market. We were
there for lunch. Top: a seating area in
Now, as with everything else, the Folly the downstairs area.
has its food credentials in order. Meat is Above: the upstairs
sourced from Allens of Mayfair, fish from bar.
James Knight, also of Mayfair.
But bizarrely, neither the meat nor fish
(well, shellfish – we didn’t try the fish) is par-
ticularly great. The Folly gets so much right,
but the food is more of an aside than a main
event. You can choose from great huge
boards of antipasti, enormous pizza-style
flatbreads, party-food style starters, sand-
wiches and burgers, mains and specials.
Our lemongrass prawn lollipops were just
big deep-fried prawns; likewise the crispy
squid was deep fried, tasteless calimari. The
pair of them left me feeling over-fried and a
bit sick. Burgers come medium no matter
what (you can request rare but they don’t
ask you) and mine came with frosted toma-
GOODMAN
The sibling of the hit Russian-owned steak joint in
Mayfair, the best thing about the City branch is the visi-
ble meat room, so that you can choose the piece of
cow – side and loin rather than cute little ears or tail –
that you want sliced up and cooked for you. It’s such a
hit with the City crowd that you’d best book well in
advance. 11 Old Jewry, EC2R 8DU.
Lifestyle | Restaurant
toes that had been on a too-cold shelf in the
freezer. Jessica’s chicken was bland but fine.
Other people’s sandwiches were defined by
enormous hunks of bread (cheap) and plant
pots of chips (cute). Desserts, though – wow.
Big, decadent creamy things that come in
martini glasses are the norm. The Tiramisu
sundae was delicious in an obscene way,
and we loved a dessert martini of vodka,
honey cream, dark chocolate and chilli. “I’d
just come for dessert,” concluded Jessica.
The Folly is a heaving, attractive and very
welcoming spot and the result is a rather tit-
illating ocean of City bodies eating, drink-
ing and ogling. The genius lies in the fact
that you can pick and choose what you
want from it – from a casual dinner with
friends to flowers to focaccia at the deli to
picking up a date – and you’re probably
going to enjoy whatever it is very much.
THE MERCER
A more formal option for lunchers near Bank, The
Mercer packs a serious culinary hit. The interior is gra-
cious, with high ceillings and nice globular lights. There is
an emphasis on meat and the daily specials ensure you’ll
be well fed. Service is impeccable and geared towards
people in a hurry. The result? A packed restaurant. 34
Threadneedle Street, EC2R 8AY.
27
FOOD & BOOZE
NEWS
ZOE STRIMPEL
THE BIG EASY DOES THANKSGIVING
This iconic King’s Road American diner takes
Thanksgiving (this Thursday) very seriously.
There will be a live band from 8:30, by which
time you’ll have tucked into your roasted breast
of Norfolk turkey with giblet gravy, chestnut
stuffing, green beans and candied sweet pota-
toes with toasted hazelnuts. Afterwards, it’ll be
a choice of pumpkin pie with whipped cream or
pecan pie with vanilla bean ice cream. 332-334
King's Road, SW3 5UR, tel: 020 7352 4071.
...AND SO DOES LE CAFE ANGLAIS
There may be nothing American about an
English cafe with a French name, but for some
reason, Le Cafe Anglais is jumping on board with
Thanksgiving, with a continental twist, naturelle-
ment. Dinner includes hors d’oeuvres of chicken
boudin, oysters rockefeller, pickled squash, radish
and ricotta salad and shrimp cocktail, followed
by the main event: roast turkey with apple and
chestnut bread stuffing, cranberry sauce, sweet
potatoes and, of course, pumpkin pie. Menu
costs £39.50. 8 Porchester Gardens, W2 4DB. To
reserve, call 020 7221 1415.
PLYMOUTH GIN MARTINI MASTER-
CLASS
As part of the Juniper Society's
monthly gin club, Plymouth Gin will
be hosting a masterclass – with
one session to teach martini his-
tory, and one to teach you the
secrets in action. 29 Nov, 6-9pm
at Graphic Bar, Golden Square.
graphicbar.com/juniper-
society.php
BABBO TURNS ONE: NO BILL
To celebrate, the Italian
restaurant is offering diners
the chance to dine without a
bill. The lucky customers on
“Tavola Una” (Table One) will
have a free dinner and drinks, to be
revealed at the end of their meal.
Offer until 27 Nov. 39 Albemarle
Street, W1S 4JQ.
 28 Lifestyle | TV& Games CITYA.M. 23 NOVEMBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders; BBC News
8pm Holby City
9pm Turn Back Time – The
High Street
10pm BBC News
10.25pm Regional News
10.35pm Imagine
11.40pm FILM Where the
Truth Lies: Mystery, with Kevin
Bacon 2005; Weatherview
1.25am Sign Zone: See Hear
1.55am Sign Zone: MasterChef: The
Professionals 2.55am Sign Zone:
Renaissance Revolution
3.55am Sign Zone: The Bionic Vet
4.25am-6am BBC News
6pm Eggheads: Quiz show,
hosted by Jeremy Vine.
6.30pm Strictly Come
Dancing – It Takes Two
7pm Coast: The team explores
the Normandy shoreline.
8pm CHOICE Alan
Titchmarsh’s Garden Secrets:
The presenter visits Biddulph
Grange in Staffordshire.
9pm The Foods That Make
Billions: New series. How
everyday commodities are
turned into profitable brands.
10pm Miranda
10.30pm Newsnight: Weather
11.20pm American Dream
12.20am BBC News
4am-6am BBC Learning Zone
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm River Monsters 7.55pm 4thought.tv 7.30pm Street Market Chefs;
8pm CHOICE The Zoo: The 8pm CHOICE Kirstie’s Five News Update
search begins for a new male Homemade Home: A Surrey 8pm Sea Patrol UK: A man and
gorilla. Last in the series. couple transform their home. his son are trapped on the
9pm I’m a Celebrity Get Me 9pm The Family: Devon coast; Five News at 9
Out of Here! 10pm Frankie Boyle Live 9pm CSI: Miami
10pm ITV News at Ten 11.05pm FILM 1 Day: 10pm CSI: NY; Five News
10.30pm London News Premiere. Hip-hop musical, Update ALAN TITCHMARSH’S GARDEN
10.35pm Celebrity Juice: X starring Dylan Duffus. 2009. 11pm CSI: Crime Scene SECRETS BBC2, 8PM
Factor Special 1.05am Bull Run: The New York to
Las Vegas rally continues. 1.35am Investigation The presenter visits Biddulph Grange in
11.20pm Swingtown World B-Boy Series 2am Beach 12am NCIS Staffordshire, a Victorian garden that
12.10am The Zone; ITV News Volleyball 2.55am KOTV Boxing 12.55am SuperCasino is an important example of the era’s
Headlines Weekly 3.20am World Sport 3.55am Emergency Bikers 4.45am taste for exotic plants.
2.10am The Rockford Files 3.05am 3.45am Cardiff Half Marathon House Doctor 5.10am Michaela’s
The Jeremy Kyle Show 4am- 4.40am Great London Swim Wild Challenge 5.35am-6am
5.30am ITV Nightscreen 5.35am-6.25am Deadliest Catch Michaela’s Wild Challenge

SKY SPORTS 1 Show 2.30am Premier League LIVING Scrubs 12.55am Life Mystery Investigator: Olly
SATELLITE & CABLE

7pm Sky Sports News at Seven
7.30pm Soccer Special
10.30pm Football Asia 11pm
Revista De La Liga 12am A-
League 12.30am UEFA
Champions League Goals
1.30am Football Asia 2am
Revista De La Liga 3am UEFA
Champions League Goals 4am
A-League 4.30am Revista De La
Liga 5.30am-6am Football Asia
SKY SPORTS 2
7pm Live UEFA Champions
League 10pm UEFA Champions
League Goals 11pm Poker
Million 1am World Pool Masters
2am-4am British Basketball
SKY SPORTS 3
6pm Live ATP World Tour
Finals Tennis 10pm European
Seniors Tour Golf 11pm Asian
Tour Golf Show 11.30pm
Golfing World 12.30am Sailing
1am European Seniors Tour
Golf 2am Asian Tour Golf
Bowls 3.30am-4am Sailing
BRITISH EUROSPORT
7pm Test Cricket 9pm Boxing
10pm Freeride Spirit Show
10.15pm World Touring Car
Championship 10.45pm
Eurogoals 11.15pm Olympic
Magazine 11.20pm Eurogoals
Flash 11.30pm-12.30am
Champions Club 4.20am-5am
Live Test Cricket
ESPN
6.30pm Eredivisie Review Show
7.30pm NFL: Monday Night
Football 10pm FA Cup Preview
Show 10.30pm Premier League
Review 11.30pm Russian
Premier League Review 12am
ESPN Serie A Kicks 12.15am
ESPN Scottish Premier League
Kicks 12.30am Press Pass 2010
1am Eredivisie Review Show
2am Live NHL Ice Hockey
4.30am-5.45am Bundesliga
Review Show
7pm CSI: Miami 8pm
America’s Next Top Model 9pm
Four Weddings 10pm Sex
Change Soldier 11pm Criminal
Minds 1am CSI: Miami 2am
Four Weddings 3am Charmed
4.40am Exposed: Julia Roberts
5.30am-6am Home Shopping
BBC THREE
7pm Total Wipeout 8pm Don’t
Tell the Bride... Best of Bride
9pm Mad About the House
10pm EastEnders 10.30pm
Young Hairdresser of the Year
11.30pm Family Guy 12.15am
Mad About the House 1.15am
Young Hairdresser of the Year
2.15am Don’t Tell the Bride...
Best of Bride 3.15am Total
Wipeout 4.15am-5.15am Love
Me, Love My Face
E4
7pm Hollyoaks 7.30pm Friends
9pm FILM Cellular 2004.
10.50pm The Event 11.50pm
Unexpected 1.55am The Event Steeds
2.40am Reno 911! 3am What
About Brian 3.45am The DISCOVERY HOME &
Happiest Gay Couple in All the HEALTH
World 4.05am Switched 7pm Ultimate Guide to
Pregnancy 8pm 10 Years THE ZOO
HISTORY Younger 9pm Your Kid Ate ITV1, 8PM
7pm How the Earth Was Made What? 10pm Embarrassing London Zoo’s lucrative Gorilla Kingdom
8pm Clash of the Gods 9pm Illnesses 11pm Strange Sex exhibition suffers a setback with the
The Sword 10pm Warriors 12am Your Kid Ate What? 1am death of its male animal and the search
11pm Decoding the Past 12am Embarrassing Illnesses 2am for a replacement begins.
The Sword 1am Secret Gold Strange Sex 3am 10 Years
2am Tunnellers 3am Younger 4am Multiple Mums
Prehistoric Megastorms 4am- 5am-6am Portland Babies
5am Ancient Discoveries
SKY1
DISCOVERY 7.30pm Modern Family 8pm
8pm How Do They Do It? UK Border Force 9pm Stargate
8.30pm How It’s Made 9pm Universe 10pm Fringe 11pm
Swamp Loggers 10pm Built FILM Croc 2006. 12.45am
from Disaster 11pm River Road Wars 1.40am Ross
Monsters 12am Deadliest Kemp: Battle for the Amazon KIRSTIE’S HOMEMADE HOME
Catch 1am Bear Grylls: Urban 2.30am Bite Size Brainiac CHANNEL4, 8PM
Survivor 2am Mark Williams 2.40am Oops TV 3.30am Lost Kirstie Allsopp helps a couple
on the Rails 3am World War 4.20am Sell Me the Answer transform their living room and 12-
Two in HD Colour 3.50am How 5.10am-6am Are You Smarter year-old son’s bedroom, showing them
the Universe Works 4.40am Than a 10 Year Old? how to buy furniture with character.

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
28 12 11 14 15 25 12
7 15 5
34 17   
45
Place the numbers from 1 to 9 in each empty cell so that each  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 29 24
3 6
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 10 9 3
  
above or to the left of it. 8
You can only use the digits 1-9 18 5 
 and you must not use the
9 38 35 11
10 27   
same digit twice in a block. 4
   
 The same digit may occur 6 10 
13 25
    more than once in a row or
column, but it must be in a
14
11 8
12
18
13
 
22 11
   separate block.
5 16
45
     7 8 23
 

   ACROSS DOWN
1 Fry quickly over a high heat (5) 1 Fastener with
   
     WORDWHEEL B D
3 Japanese rice dish (5)
6 Overabundant (4)
a threaded
shank (5)
2 Entertainment
Using only the letters in the Wordwheel, you have 8 Horse’s fastest pace (6)
 ten minutes to find as many words as possible,
R C
venue (7)
9 Collection of rules imposed 3 Mining waste
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A by authority (3)
11 Furious indignation (5)
hill (4,4)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
O E 12 Euphoric (5)
4 Nitre (9)
5 State
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
S N 14 Ancient Greek or indirectly (5)
Roman warship (7) 7 Person who
QUICK CROSSWORD 2 4 1 9 7 7 1

3 $ 5 . $ + 2 2 )
3 7 9 1 6 2 5 8 4 SUDOKU         
15 Eight singers who
perform together (5)
uses insincere
praise (9)
9 8 5 7 2 9         
8 ( , 1 / $ : /
4 8 3 8 1 3 1 16 Trick (5) 10 Little fib (5,3)
0 $ 1 / 5 ( 1 2         
1 5 8 4 3 1 5 2
$ 1 7 / ( 5 $ 2
         18 For every (3) 13 Loss of
1 5 2 , 6 7 ( 5 5 1 2 6
         memory (7)
( 5
( ; 3 $
2
1
$ ' 6
6 (
(
5
8 6 9
6 4
7 5
9 3 8
9 7
4
8
3
WORDWHEEL         
19 Ancient rolled document (6)
15 Desert
0 & 7 $ & 7 , &          20 Despatch (4)
% 5 $ ( / + ( 5 2 9 1 6 3 2 The nine-letter word garden (5)
( 6 0 $ / / 2 $ 8 1 6 4 2 9 7 3 5
was RACETRACK
         21 Twilled woollen fabric (5)
5 $ . ( < 2 8 1 * 9 3 9 7 5 1 2          17 Tea container (5)
22 Loose-fitting (5)
 Sport
Flower backs
KP to deliver
▲
CRICKET
BY JAMES GOLDMAN
ENGLAND coach Andy Flower says his
side are united in their quest to retain
the Ashes – and that includes Kevin
Pietersen.
South African-born Pietersen, who
yesterday signed a one-year deal with
Surrey, has been labelled an “outcast”
by legendary Australian leg-spinner
Shane Warne.
The form of England’s stellar bats-
man has tailed off since he lost the
captaincy in controversial circum-
stances last year, but Flower insists
that is purely coincidental and that
Pietersen remains an important fig-
ure in the dressing room.
“He’s anything but an outcast,” said
Flower, whose team will face Australia
at the Gabba in the first Test from
Thursday.
“He’s a good guy to have in the
dressing room, a great player to have
on your side – a very dangerous player
that the opposition worry about.
“We expect great things from him
and [also] that he takes part in team
dynamics like everyone else does –
and that is what he does.”
Flower concedes the mercurial
Pietersen has a compulsion to take
the starring role, but reasons that is
no bad thing for someone so talented.
“We have very good team unity, and
that is one of our strengths. But Kevin
does like the big stage, and that’s a
great thing about him.
“He enjoys the pressure situations;
he enjoys the chance to bat brilliantly
while everyone’s watching. It’s part of
what makes a very fine competitor.”
Meanwhile, Australia have called
up Usman Khawaja as cover for vice-
captain Michael Clarke who is strug-
gling with a long standing back
injury.
BREAKDOWN | KP’S TEST RECORD
PRE-CAPTAINCY: 42 Tests; 3,777
Runs; 50.36 Ave.
AS CAPTAIN: 3 Tests; 262 Runs;
52.40 Ave.
POST CAPTAINCY: 21 Tests; 2,267
runs; 42.23 Average.
29
ANCELOTTI MAKES LIGHT OF
CHELSEA QUIT SUGGESTIONS
ONLY THING GIVING CARLO THE BLUES
ARE HIS TEAM’S RESULTS: PAGE 30
A-ROD CAN’T STOP NADAL’S PURPLE REIGN SPORT | IN BRIEF
Poulter still prefers it Stateside
GOLF: England’s Ian Poulter insists he
has no plans to return to the European
Tour full-time after winning the UBS
Hong Kong Open at the weekend. The
European Tour has increased the num-
ber of mandatory events to retain mem-
bership from 12 to 13, meaning Poulter
has a decision to make on how he will
spread his commitments from next year.
“I live in Orlando, so the family is
schooled there, I have three children,
two of which school in the States,” he
said. “Rory McIlroy lives in Ireland. His
family is in Ireland. So therefore for him,
I guess it’s difficult to see being over
that side of the pond.”
Monteith death saddens Johnson
HORSE RACING: Leading owner David
Johnson has expressed his shock and sad-
ness at the death of trainer Peter
Monteith, 61, who was found dead at his
home in Scotland on Sunday. Johnson,
who had a dozen horses with Monteith,
said he was devastated and had not come
to terms with the news. He said: “I can-
not believe it. I speak to him every week.
It’s just like a bolt out of the blue. It’s dev-
astating news for Scottish racing.”
Abraham out to destroy Froch
BOXING: Arthur Abraham has vowed to
send Carl Froch into retirement when
DECKED out in a garish purple T-shirt, Rafael Nadal began his ATP World Tour Finals the pair battle for the WBC super-mid-
campaign with a hard-fought win over Andy Roddick. The American took advantage of dleweight belt in Helsinki on Saturday.
Nadal’s shaky service to claim the opening set 6-3. But Nadal rallied to claim the second “After the fight, Froch can plan his
on a tie break and the third 6-4 to complete his first ever win at London’s O2 Arena. In retirement,” Abraham said. “It will be
yesterday’s other Group B match, Novak Djokovic beat Tomas Berdych 6-3 6-3. Picture: PA difficult but I will win.”
 30 Sport CITYA.M. 23 NOVEMBER 2010

Results
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my position. My position in the club
is very clear. I am a coach, I have to
KF;8PËJ;@8IP
▲

FOOTBALL train my players, to maintain the

=ffkYXcc.%+,gdlec\jjjkXk\[
L<=8:_Xdg`fejC^\ BY FRANK DALLERES team and the club at the best level.
>iflg< “Now, this moment is not good on
9Xjc\m:=I:cla%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% CHELSEA manager Carlo Ancelotti the pitch and they have to do better
IfdXm9Xp\ieDle`Z_%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% admits he has grown unhappy at there. I think they have to stay
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his team have forgotten how to sweep problem.”
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L<=8:_Xdg`fejC^\ Categorically denying intense spec- confirmed to City A.M. they had con-
>iflg> ulation that he was considering quit- tacted Ancelotti on Sunday night
8aXomI\XcDX[i`[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% ting just six months after leading the after hearing rumours he had
8lo\ii\m8:D`cXe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Blues to the double, Ancelotti blamed resigned. Bevan added that this was
L<=8:_Xdg`fejC^\
>iflg? the rumours on his side’s slump in normal protocol.
9iX^Xm8ij\eXc%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% form. He also rubbished claims he Ancelotti rejected suggestions he
GXik`qXe9\c^iX[\mJ_Xb_kXi;fe\kjb%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% had contacted the League Managers’ and his team had been affected by the
egfn\i=ffkYXccC\X^l\Fe\ Association (LMA) for advice on his departure of his former No2 Ray
9flie\dflk_mP\fm`c%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% position, and insisted the firing of for- Wilkins, who has accused the club of
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mer assistant Ray Wilkins had not unfair dismissal.
:fcZ_\jk\im9i\ek]fi[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% affected results. “I am sad because the team doesn’t
?l[[\ij]`\c[mD`ckfeB\pe\j;fej%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% “This rumour is totally untrue. I win,” he added. “Nothing has
Efkkj:flekpmJn`e[fe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% don’t know why this rumour came changed in my personal behaviour
Fc[_Xdm<o\k\i%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% out today in the papers. I didn’t speak with Ray. The club decided to change
G\k\iYfifl^_mC\pkfeFi`\ek%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% to the LMA – the LMA just called me and I have to stay focused on my job Ancelotti insisted
Gcpdflk_m;X^\e_XdI\[Yi`[^\%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
J_\]]`\c[N\[e\j[XpmNXcjXcc%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% to understand what’s happening,” with another assistant. This is not a the LMA had called
Jflk_Xdgkfem9i`^_kfe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% said the Italian, who was on jocular problem for me and this is not the him – not the other
KiXed\i\m?Xikc\gffc%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% form. “I have a contract until 2012 at reason the team is losing games in way around.
egfn\i=ffkYXccC\X^l\Knf this club. I said a lot of times that I’d this moment.”
9Xie\km>`cc`e^_Xd%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% like to stay here – I love not just this Ancelotti revealed young English Picture: ACTION
9iX[]fi[m8ZZi`e^kfeJkXec\p%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
club but also these players – so there midfielder Josh McEachran, 17, will IMAGES
SPORTS EDITOR FRANK DALLERES is no reason to change my idea. make his first start for Chelsea in
email sport@cityam.com “I don’t know if it is enough to tonight’s Champions League fixture.

Wenger admits he can’t take

risks with Cesc’s hamstring
longer be of concern.
BRAGA “It is getting better,” said Wenger.
“He was out for a while and had a
recurrence of his hamstring problem,
ARSENAL then it gets in your head.
“When it gets in your head, it is dif-
ficult to play free of your mind.
“I feel it is getting better in every
▲
Wenger revealed he will also
attempt to nurse Dutch striker Robin
van Persie back to full fitness rather
than throw him in at the deep end
against the Portuguese champions.
Van Persie injured his ankle
against Blackburn back in August
and has only recently returned to

FOOTBALL
match, from game to game he first team action, but Wenger
BY JAMES GOLDMAN becomes stronger. feels it is still too soon for him to
ARSENAL manager Arsene Wenger “On Saturday against start a game of this importance.
admits Cesc Fabregas’ hamstring Tottenham, he has created He said: “Van Persie has
troubles could be having a detrimen- three great goal chances, not travelled so he can
tal psychological impact on his per- so we are getting back to improve his fitness
formances. the normal Cesc. because he is not 100 per
Fabregas has been suffering with “Sometimes after the cent fit – I mean his
the muscular injury in his right leg game he has a little physical condition to
since his return to the club following recurrence, but at the fight in a big game.
GROUP H his exploits in South Africa with
Spain during the World Cup.
moment I do not want
to take a massive gam-
“If I take him to
Braga and he is not
TEAM PLD W D L F A PTS
The Arsenal skipper has admitted ble. 100 per cent and is on
Arsenal 4 3 0 1 15 4 9 the issue had been playing on his “We cannot afford the bench and doesn’t
Shakhtar 4 3 0 1 7 6 9 mind but Wenger (right), whose side to lose him, so I come on then it is a
Braga 4 2 0 2 3 9 6 will be looking to book their place in check every morning waste. I leave him
Partizan 4 0 0 4 1 7 0 the next round of the Champions of the game how he is behind and he will take
League with a win over Braga tonight, and we monitor him the opportunity to
Cesc Fabregas has failed to find his best form this season. Picture: ACTION IMAGES believes the injury will soon no quite well.” work.”
CITYA.M. 23 NOVEMBER 2010 Sport 31

Ancelotti Johnson calls up trio for England cover

show can’t

▲
RUGBY UNION Meanwhile, Johnson’s charges will The man affectionately known as
BY JAMES GOLDMAN play Wales and Ireland in three ‘The Beast’ missed yesterday’s train-

banish all
ENGLAND manager Martin Johnson
has called up three players, Anthony
Allen, James Simpson-Daniel and
Chris Robshaw, as injury cover ahead
warm-up games ahead of next year’s
World Cup in New Zealand.
Johnson’s side will host Wales at
Twickenham on 6 August before
heading to Cardiff for a return match
ing session with the medial knee lig-
ament injury he picked up in
Saturday’s surprise 21-17 defeat
against Scotland at Murrayfield.
Should the Sharks loosehead miss

doubts of Saturday’s showdown with South

Africa at Twickenham.
Allen and Simpson-Daniel replace
the Wasps centres Riki Flutey and
one week later.
On 27 August, England take on
Ireland in Dublin before departing to
New Zealand the following week.
out, CJ van der Linde is likely to be
the man to deputise, and scrum
coach Os du Randt believes the
Springboks have the strength to cope
Dominic Waldouck, who have been Johnson said: “These three games with any front-row injury problems.
COMMENT
BY FRANK DALLERES
sent back to their club.
Harlequins flanker Robshaw,
are an important element in our
build-up to the World Cup.”
“CJ van der Linde covers both prop
positions and we have Coenie
meanwhile, has been called up as Saturday’s opponents, South Oosthuizen who has been making
cover for a third Wasps man, Joe Africa, meanwhile, could be without his way as a loosehead,” said Du
IN FRONT of a baying press pack Worsley, who has a cheek injury. their totemic prop Tendai Mtawarira. Randt.
Carlo Ancelotti yesterday gave a
first-rate impression of a manager
utterly untroubled by his job. Yet
for some it will be hard to shake
the suspicion that it was just that:
an impression.
He flashed a broad grin on his
entrance to the media room at
Chelsea’s Cobham training com-
plex, and exited after engaging in
banter with newspaper journalists
over whether he ought to read
today’s editions.
In between he denied rumours
he had considered quitting, main-
taining his laid-back charm
despite searching questions about
his happiness at Stamford Bridge.
Even when his patience wore
thin, when he reminded reporters
there was a game that also merit-
ed discussion, it was done with a
warmth that elicited laughter.
Yet some moments raised eye-
brows other than his own. Did he
still think Chelsea was a normal
club, he was asked in reference to
suggestions he had no say in the
replacing of his assistant? Yes, he
said, although his hearty laughter
was hardly convincing.
GROUP F Had Ambramovich ever tried to
impose a team selection on him,
TEAM PLD W D L F A PTS one ambitious interlocutor
Chelsea 4 4 0 0 12 2 12 offered? “Don’t joke!” he replied.
Spartak 4 2 0 2 5 6 6 Lingering doubts aside, it was a
Marseille 4 2 0 2 8 3 6 composed, consummate perform-
ance from Ancelotti. How his team
MSK Zilina 4 0 0 4 1 15 0 could use one tonight.

Things looking better for

Everton thanks to Arteta
FOOTBALL through the first-half when Danny
▲

Welbeck stabbed home at the near

EVERTON moved two points clear of
the relegation zone after Mikel
Arteta’s 83rd minute strike helped his
side salvage a 2-2 draw at Sunderland.
Tim Cahill had put the visitors into
an early sixth minute lead when he
powered home Leighton Baines’ cross
with a trademark header for his sev-
enth goal of the season.
Sunderland responded midway
post, and the Manchester United loa-
nee looked to have sealed maximum
points for Steve Bruce’s side when he
helped Kieran Richardson’s cross up
and over Tim Howard with 20 min-
utes left.
But Arteta secured a deserved
point for Everton with strike which
took a cruel deflection off Phil
Bardsley.

FOOTBALL | IN BRIEF
Graham backs Spurs title charge SFA draw up contingency plan
FORMER Tottenham manager George
Graham insists Harry Redknapp’s side have
the potential to end a 49-year wait for a
league title. Their 3-2 comeback victory at
Arsenal on Saturday has put Spurs back to
within six points of leaders Chelsea. He
said: “I think this is a season when there
could be a real surprise. I think it’s all up
for grabs at the present time. Why can’t
Spurs go on from here?”
THE SCOTTISH FOOTBALL ASSOCIA-
TION have confirmed they’ve drafted con-
tingency plans to bring in match officials
from outside the country amid a planned
strike by referees in Scotland. Chief execu-
tive Stewart Regan said: “We remain
hopeful that the situation can be resolved
but we have no option but to draw up con-
tingency plans, which will involve sourcing
match officials in other countries.”
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