Markets Hit As Euro Hopes Fade: FSA: Beef Up EU Rules After RBS

THE UK must vigorously oppose
Europes stance on new capital rules in

the wake of RBSs collapse, FSA chair-
man Lord Adair Turner said yesterday.
The long-awaited report into the
banks 2008 bail-out by taxpayers pub-
lished yesterday said that regulators
were using a fundamentally flawed
set of rules for how much a bank must
put aside in reserves.
As part of its response to the col-
lapse of RBS under the leadership of
Sir Fred Goodwin (pictured), the FSA
wants the UK to introduce its own,
hyper-strict capital regime. But Europe
wants all states to have the same capi-
tal rules, one of the major flashpoints
leading to David Camerons veto of the
EU treaty on Friday, as he told parlia-
ment yesterday.
There is a debate going on with dif-
ferent points of view, said Turner. And
he even suggested that Britain look at
the example of other states that are
simply ignoring the EUs stance.
Some other countries are just get-
ting on with it and putting facts on
the ground the Dutch, the Irish, the
Swedes This is an argument we can
win, he said. But he claimed that he
didnt think Camerons use of a veto
had made a difference.
In response to RBSs col-
lapse, the FSA and Bank of
England want to gold-
plate Brussels rules on
capital. The bigger the
capital rules the
less we need an
army of people
checking the
d e t a i l s ,
Turner said
yesterday.
FTSE 100 5,427.86 -101.35 DOW 12,021.39 -162.87 NASDAQ 2,612.26 -34.59 /$ 1.56 -0.01 / 1.18 +0.01 /$ 1.32 -0.02
FSA: beef
up EU rules
after RBS
BY JULIET SAMUEL
BANKING
www.cityam.com
Issue 1,531 Tuesday 13 December 2011 FREE
RBS
SPECIAL:
MORE ON P4,
P8-9, P10
BUSINESS WITH PERSONALITY
Certified Distribution
31/10/11 till 27/11/11 is 100,007
do what the markets want.
Germanys DAX stock index fell
3.36 per cent yesterday, while Frances
CAC 40 dropped 2.61 per cent and the
FTSE 100 closed the day down 1.83 per
cent. Investors also rushed out of
peripheral bonds as fears that some
countries cannot pay their debts
resurfaced.
Yields on 10-year Italian debt hit
6.779 per cent at one stage, close to
the seven per cent danger zone
beyond which Greece, Ireland and
Spain had to be bailed out, before
falling back later in the day.
Spanish yields rose back above six
per cent, hitting 6.069 per cent, before
also edging down.
As a sign of investors seeking out
safe havens, yields on 10-year UK gilts
fell to a fresh low of 2.07 per cent,
before rising slightly to 2.102 per cent.
The euro fell 1.496 per cent against
the dollar to $1.32. Sterling, too, rose
0.94 per cent against the euro.
US stocks were also not immune to
the spreading panic, with the Dow
sinking more than 200 points during
trading before recovering slightly to
close down 1.34 per cent.
And shares in Commerzbank
plunged 7.8 per cent yesterday after
reports that the beleaguered bank
was in talks over a government
bailout a plan the firm denied.
Fears have been growing in recent
weeks over the German lender, which
must raise more than 5bn to meet
capital requirements by mid-2012.
MORE: P6, THE FORUM: P27
GLOBAL markets were shaken yester-
day as fears returned that govern-
ments will not manage to save the
Eurozone.
The honeymoon period that fol-
lowed last weeks euro deal proved all
too brief, making way yesterday after-
noon for a show of bitter disappoint-
ment from traders.
Stocks fell sharply, peripheral
Eurozone economies saw their bond
yields soar towards the danger zone
again, and the euro dropped as
investors fled risky assets once more.
Markets had risen last week as
Europes politicians raised hopes that
a solution to the crisis would be
agreed by Friday, allowing countries
to begin to plan how to pay down
their huge debts.
Leaders pledged to enforce good fis-
cal behaviour on governments, stop-
ping them running up large deficits
and so preventing a similar crisis aris-
ing in the future.
But many traders were left unim-
pressed by a deal that threatened to
come unwound almost as soon as it
was agreed.
Markets want a firm commitment
either for Germany to stand behind
the Eurozones debts or for the ECB to
step up its bond purchases, said Alex
Lawson, financial risk manager at
Moneycorp.
Investors still seem in love with
the euro, but it is beginning to slide
and only concrete action will begin to
halt or reverse that, he added.
Sooner or later the pain will
become acute enough for Germany to
BY TIM WALLACE AND JULIET SAMUEL
EUROZONE
Traders showed their

lack of trust in the
euro deal yesterday
by selling off stocks
Picture: REUTERS
ANALYSIS l Eurostoxx 50 loses 3 per cent
09:00 11:00 13:00 15:00 17:00
2,330
2,340
2,350
2,320
2,310
2,300
2,290
2,280
2,270
2,260
2269.46
12 Dec
ANALYSIS l Yields on UK 10-yr gilts
fall to record low
%
Jul Aug Sep Oct Nov Dec
2.5
3
3.5
2.102
12 Dec
MARKETS HIT AS
EURO HOPES FADE
ANALYSIS l Dow falls 163 points
10:00 11:00 12:00 13:00 14:00 15:00 16:00
12,100
12,150
12,200
12,050
12,000
11,950
12021.39
12 Dec
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News
4 CITYA.M. 13 DECEMBER 2011
PERSONAL finance must be taught in
schools to equip young people with
the knowledge they need to navigate
an increasingly complex financial
world, said a group of MPs yesterday,
as they called for compulsory lessons
to be part of the curriculum.
A report released by the all-party
parliamentary group (APPG) on
financial education for young people
called for obligatory teaching to be
part of both primary and secondary
education, after finding that the UK
was in danger of being left behind
other countries where the agenda is
further advanced.
According to the report, personal
finance is only taught on an ad hoc
basis in UK schools at the moment,
with just 45 per cent of teachers say-
ing they had ever run lessons on the
subject.
The group wants this to change,
with personal finance education
introduced into the existing mathe-
matics and PSHE (personal social
health and economic) curriculum.
The proposals mean children
could start learning the basics of per-
sonal finance as young as age five,
with the aim that young people
should leave school able to calculate
percentages, fractions and decimals,
and be able to apply these methods
to everyday life.
The report is the culmination of
eight months work by the APPG,
which was put together in January
and is now the largest in parliament,
with 226 MPs and peer members
across all main parties.
The issue will be also be debated in
the Commons on Thursday, after a
petition launched by moneysavingex-
pert.coms Martin Lewis calling for
compulsory financial education got
more than 100,000 signatures.
BY ELIZABETH FOURNIER
FINANCIAL LITERACY
RBS probe doesnt answer key issues

THERE was lots of good stuff in yester-
days report on the demise of RBS and
the idiocy, stupidity and incompetence
of the top executives including Sir
Fred Goodwin advisers, politicians
and regulators in charge, including
Gordon Brown and Ed Balls. RBSs rise,
fall and slow-motion crash is an aston-
ishing tale of hubris: human beings
who think they can defy the laws of
gravity, as well as the reality of eco-
nomics and finance, always end up
destroying themselves and those
around them.
But in other ways the report is
flawed; here are some reasons why.
There was no proper attempt at justify-
ing RBSs bailout. A disorderly collapse
would have been horrid but it might
have been possible to forcibly convert
at least some debt into equity, thus
protecting taxpayers. Those decisions
were just as important as errors in the
run-up to RBSs failure. We need an
inquiry into them too.
There was no proper plan to deal
with a major bank going bust no res-
olution mechanism to protect taxpay-
ers and allow an orderly wind-down.
Why did regulators not think of this
during the boom? The fact that no
such plan B existed was tantamount to
an implicit guarantee that an institu-
tion could do anything, safe in the
knowledge that it would be rescued.
Yet the report doesnt go into this.
Another much misunderstood issue
is light-touch regulation, blamed for
allowing RBS to happen. Supporters of
a free-market economy believe human
action needs to be governed by a com-
plex web of rules and restrictions,
based around private property, profit
and loss, freely functioning price sig-
nals, the rule of law, liability and con-
tracts. Under this system, resources are
allocated reasonably efficiently, with
greed tamed by fear. Bad decisions are
penalised by losses; good ones reward-
ed by profits. Behaviour is regulated
by market mechanisms: if you lend
money to a bank, and know you will
lose it if it takes silly decisions, you will
pay close attention.
Real capitalists dont believe behav-
iour should be unconstrained or
unregulated they do not think that
people should be able to do whatever
they want, with no consequences.
What they do believe is that it is best if
the constraints and consequences are
market-based, harnessing the power of
self-interest, rather than imposed by
supposedly selfless or omniscient regu-
lators. A few decades ago, before the
Basel Accords, capital ratios were often
higher than they are today investors
and depositors demanded the protec-
tion and extra prudence.
A real free-market is not the rule of
the jungle a system with no private
property, no contracts and violence
but neither is it the pre-2008 model.
That crazy system, perfected in
Browns Britain, saw the authorities
repeal many traditional market-based
constraints on CEOs because liabili-
ties were guaranteed, private creditors
relaxed and ceased to exercise proper
supervision and replaced them with
an ineffectual regulatory system. This
was the worst of all worlds: private
investors no longer cared, consumers
thought they were safe and the regu-
lators were useless. There was also
intervention in other ways, with exces-
sive liquidity from central banks cor-
rupting the price of credit.
What is wrongly called light-touch
regulation was in fact a corporatist sys-
tem that insulated creditors, promot-
ed moral hazard and encouraged the
likes of Sir Fred Goodwin. Its a shame
the disease has been so misdiagnosed.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
LLOYDS has completed a debt
exchange that reduces its 2012 financ-
ing needs by a fifth, the bank
announced yesterday.
That means it will have to issue 15-
20bn of new debt next year instead of
the previous target of 20-25bn. The
move reduces Lloyds short-term
reliance on wholesale funding mar-
kets, which have seized up over the last
quarter due to the Eurozone debt crisis
and regulatory uncertainty.
The debt exchange effectively
lengthens the maturity of Lloyds debt.
The bank did not state the total it had
to pay investors to participate, but said
they were given a premium.
It comes at the start of a crucial
week for Lloyds, whose board meets on
Thursday to discuss the return of its ill
CEO and its sale of 632 branches.
Lloyds bond
swap cuts debt
needs by 20pc
EDITORS LETTER
ALLISTER HEATH
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Gavin Billenness
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
Personal finance education should be a
compulsory part of every schools cur-
riculum
Quality resources and appropriate vis-
its should be made available to teach-
ers
Primary teachers should
build upon their teaching of
basic money and mathemat-
ics skills from an early age
across the curriculum
Primary school teachers
should be required to have
a minimum grade B in
GCSE mathematics
Training days should
be used to refresh
the mathematics
skills of primary
school teachers
Personal finance education should be
taught cross-curricular in mathematics
and PSHE (Personal Social Health &
Economic) education at secondary level
Personal finance elements of maths
should be clearly highlighted to empha-
sise how they relate to real life deci-
sions
A school coordinator, or champi-
on, should be appointed in each
school with responsibility for
sourcing resources
and ensuring maths
and PSHE education
covers personal
finance goals
FINANCIAL EDUCATION | KEY RECOMMENDATIONS
Justin Tomlinson
MP is chair of the
group pushing for
change
MPs: Finance must be taught
BY JULIET SAMUEL
BANKING
EVRAZ RAISES PROSPECT OF

SEVERSTAL MERGER
Evraz has raised the possibility of a
merger with Severstal in a deal that
would unite Russias two biggest steel-
makers to create the worlds eighth-
largest producer by output, with a
combined market capitalisation of
12bn. Alexander Abramov, Evrazs
chairman and founder, said in an
interview with the Financial Times
that uniting the two businesses would
be a good idea.
BG PREPARES TO SELL $600M STAKE
IN GUJARAT GAS
BG, the oil and gas producer, has
lined up Citigroup to advise on a
potential sale of its stake in Gujarat
Gas in a deal that could raise about
$600m, say people familiar with the
matter. It comes as the explorer looks
to raise capital and as part of a review
of its global portfolio amid specula-
tion of plans to divest a stake in its
Brazilian operations.
CALL OF DUTY SALES OUTSTRIP
BLOCKBUSTER FILMS
Call of Duty: Modern Warfare 3, the
latest instalment in Activision
Blizzards hit war-game franchise, has
realised $1bn-worth of sales in 16
days, outpacing blockbuster movies
including Avatar and Harry Potter,
but marking a slowdown after its
record-breaking first week.
FEMINISTS CLAIM VICTORY IN TOY
SIGNS FIGHT
Feminist groups are claiming victory
in a campaign against gender stereo-
typing in Hamleys, the London toy
shop, which has changed the signs in
its girls and boys toy departments to
reflect particular types of toys, rather
than who should be playing with
them. Blue signs marked Boys had
previously directed shoppers to the
fifth floor of its flagship store to buy
action and war-themed toys.
ANGLIAN IS ACCUSED OF PLAYING
MONOPOLY OVER WATER SUPPLIES
A planned housing development out-
side Milton Keynes has become the
unwitting scene of a water industry
row that strikes at the heart of gov-
ernment plans to open up the market
to competition. Anglian Water was
handed a statement of objections by
Ofwat yesterday effectively a charge
sheet of alleged misdemeanours
over a stalled property development
called Fairfields.
RUSSIAN BILLIONAIRE PLAYBOY SEEKS
TO CHALLENGE PUTIN FOR PRESIDENCY
Mikhail Prokhorov, the Russian bil-
lionaire, is to stand against Vladimir
Putin to be the next President of
Russia, he announced yesterday. The
countrys third-richest man pledged
to gather two million signatures to
qualify for the ballot, declaring: My
base is the middle class.
FEARS GROW OVER THE FUTURE OF 5,500
HIGH STREET SHOPS
One of the UKs largest property com-
panies has drawn up a confidential
list of struggling retailers amid fears
that more than 5,500 shops in Britain
could be handed back to landlords or
closed within months. The property
company is one of a number to have
identified a collection of retailers suf-
fering from poor trading and another
group facing liquidity pressures.
MPS' SALARIES COULD BE BOOSTED
WITH ALLOWANCES
MPs salaries should be boosted with
flat-rate allowances worth tens of
thousands of pounds a year to fund
second homes and travel, a MPs com-
mittee has suggested. The Committee
on Members Expenses also recom-
mended that MPs should be given
back the power to scrutinise their own
expenses.
CANADA PULLS OUT OF KYOTO
CLIMATE PACT
The Canadian government said
Monday it was formally withdrawing
from the Kyoto protocol on climate
change-the first country to do so-
though it said it would honor a sepa-
rate, carbon-reducing agreement
reached over the weekend in Durban,
South Africa. The move had been
telegraphed by Canadian officials for
weeks. Canadas environment minis-
ter Peter Kent made the announce-
ment yesterday afternoon.
AT&T MAY RECUT T-MOBILE DEAL
AT&T and Deutsche Telekom AG
edged closer to abandoning AT&Ts
$39 billion acquisition of T-Mobile
USA in its current form, putting a
court fight with the Justice
Department on hold as they focus on
coming up with alternatives to the
deal.
WHAT THE OTHER PAPERS SAY THIS MORNING
THE London Stock Exchange took total
control of stock index provider FTSE
International yesterday, by buying
Pearsons 50 per cent stake for 450m.
The move cements the LSEs hold
over the FTSEs 200,000 indices and
global, high growth trajectory. It also
puts it in control of a critical piece of
trading infrastructure as it seeks to
grow its derivatives and clearing capa-
bilities to compete better against rivals
in Europe and the US.
The LSE is currently also in the
process of buying clearing house
LCH.Clearnet.
Pearson said the disposal of its half
of FTSE was in line with its strategy to
sell out of financial data businesses
and grow its presence in news and
analysis instead.
David Lester, the LSEs director of
information services, said the deal was
part of the groups diversification
away from pure equities trading and
would allow the group to create new
benchmarks and tradeable derivatives
products.
In our view it is a very high growth
and high quality asset, he told City
A.M. It grew at 30 per cent in 2010 and
this year we expect it to grow at
beyond 31 per cent.
He said FTSEs growth into global
markets was of huge value and the LSE
would continue to invest in new
indices and data services worldwide.
The LSE will finance the takeover
from 100m of cash and 350m of
bank facilities, taking its leverage ratio
from 1x to 1.6x. THE FORUM: P26
LSE buys FTSE
to win control
of key assets
HEDGE fund boss Hugh Hendry (pic-
tured below) has bucked the gloom
afflicting rivals and recorded stellar
gains on his China short fund.
The charismatic Glaswegian told
City A.M. the fund had returned 52 per
cent so far this year. The performance
contrasts with a loss of 4.37 per cent
for the average global hedge fund,
according to data from Hedge Fund
Research.
Hendry has profited by shorting
China amid the global turmoil, despite
being mocked in 2009 when he posted
online an amateur video in which he
warned of slowing growth in China by
highlighting a series of empty office
blocks and skyscrapers.
Chinese authorities have admitted
economic growth has slowed from its
long-term double-digit rate to around
nine per cent but some commentators
have suggested the rate of
slowdown is signifi-
cantly greater.
Hendry set up his
fund after working
for Baillie Gifford
and Odey Asset
Management. He is
known for often
taking con-
trary posi-
tions.
Hendry hedge
fund soars as
China slows
BY ALISON LOCK
CAPITAL MARKETS
HEDGE FUNDS
News
ANALYSIS l London Stock Exchange Group PLC
p
6Dec 7Dec 8Dec 9Dec 12Dec
860
840
820
800
780.00
12 Dec
SIMON Robey, Morgan Stanleys
UK chief executive and co-chair of
M&A, advised the London Stock
Exchange on this latest deal.
The LSE is just one of Robeys
star clients, but he has experienced
a tough year for dealmaking as
political issues have transpired to
prevent transactions going ahead.
He led the advisory work on the
LSEs ill-fated bid for Canadian rival
TMX this year, but the LSE was
forced to walk away after TMXs
Canadian shareholders blocked the
deal. Robey also saw BSkyBs
potential takeover by News Corp
abandoned after the phone hacking
scandal at the News of the World,
while his advice to BP on its last-
ditch efforts to save its Arctic tie-
up with Rosneft foundered on
tensions with TNK-BP.
Robey is known as a star at
Morgan Stanley, however, and over
the years he has acted for UK
chocolate maker Cadbury in its
11.5bn sale to US rival Kraft last
January, and on Santanders pur-
chase of Abbey National in 2004.
Robey was a choral scholar at
Magdalen College, Oxford. He is
the chairman of the Royal Opera
House and has held a season ticket
at Arsenal for more than 20 years.
ADVISERS: MORGAN STANLEY
SIMON ROBEY
UK CHIEF
EXECUTIVE
LSE chief exec Xavier Rolet bought the rest of FTSE Picture: Micha Theiner/CITY A.M
THE UK will work to repatriate powers
from the European Union while still
seeking a resolution to the Eurozone
crisis, David Cameron told MPs yester-
day, as he robustly defended his deci-
sion to veto a new treaty agreement in
last weeks summit.
With deputy PM Nick Clegg conspic-
uous in his absence, Cameron stressed
that his actions on Friday prevented
the EU exerting more control over UK
financial services, and repeated his
stance that he protected our interests.
Opposition leader Ed Miliband
attacked Cameron for allowing the UK
to be left behind and failing to
build alliances with other nations,
though he failed to say whether he
would have signed the new treaty.
Cameron received warm support
from many previously hostile
Conservative MPs.
But Clegg, who has called the veto
bad for Britain, failed to show his
face in the Commons for Camerons
speech, claiming his presence would
have been a distraction.
John Redwood came out as one of
Camerons strongest backers, saying
the use of the veto had made Britains
position stronger allowing the Prime
Minister to attack Labours record in
negotiations as flimsy. Laying out his
hopes for the EUs future, Cameron
explained that markets need more
reassurance to prevent a collapse.
Markets want to be assured that
the firewall is big enough, that banks
will be recapitalised and Greeces crisis
is properly dealt with, he told the
House of Commons.
PM: We will
bring powers
back from EU
MOODYS has placed eight Spanish
banks on review for possible down-
grade, in light of a worse than expect-
ed economic outlook and exposure to
real estate.
The ratings agency said 21 financial
institutions have also had their ratings
cut after a review of systemic support.
And it warned yesterday that more
Eurozone banks and governments
may have their credit ratings cut if
they do not find a solution to the sov-
ereign debt crisis soon.
Moodys said the communiqu
issued by European leaders on Friday
contained little substance.
Risks to the cohesion of the
Eurozone continue to rise, the
agencys report read.
Adverse economic conditions are
becoming more likely the longer any
solution is postponed for, and would
add to the already sizeable challenges
facing the authorities coordination
and debt reduction efforts.
Ratings will be revised in the com-
ing weeks and months in the absence
of any decisive policy initiatives that
stabilise credit market conditions
effectively.
CBI lashes out at political
row over Camerons veto
RECRIMINATIONS over David
Camerons veto last Friday are under-
mining efforts to secure the single
market and unnerving businesses, the
Confederation of British Industry (CBI)
claimed yesterday.
The group stressed that thousands
of jobs rely on trade with Eurozone
economies, and so the coalition gov-
ernment must re-double its efforts to
ensure that the UK is not put at an eco-
nomic disadvantage.
It is ironic that the focus on the
British veto has overshadowed the
pressing issue of Eurozone stability
which is critical to all British business-
es, said CBI director general John
Cridland.
The reality of this summit is that
some useful steps were taken on fiscal
unity but not enough was done to
secure the Eurozones future, he said.
The CBI is now calling for the
European Central Banks position
and potential to be a lender of last
resort to governments to be resolved.
The UKs economic future will con-
tinue to hang in the balance until it
has been sorted, Cridland continued.
Nonetheless, he acknowledged that
David Cameron had responded to
legitimate concerns over other
European leaders proposals.
Spanish banks on
downgrade watch
BY TIM WALLACE
POLITICS
ITALY sold 7bn in one year debt at

near-record highs yesterday, as
Fridays summit failed to calm mar-
ket fears over the weak sovereign.
The yield came in at 5.952 per cent,
just below the euro-era high of 6.087
per cent paid on a similar issuance in
November. The sale was covered 1.9
times.
Italys issuance was in contrast to
Hollands. The Dutch government
paid a negative yield of 0.007 per cent
on 1.1bn of debt maturing in March,
reflecting its safe haven status..
Borrowing cost
stays high for
Italys Monti
EUROZONE
EUROZONE
EUROZONE
World Economy
CITY STILL WITHIN OUR GRASP, SAYS REHN
BRITAINS veto of a new European treaty to tighten fiscal oversight of states will not stop
Europe regulating the City, Olli Rehn, the European Unions economic and monetary affairs
commissioner, said yesterday. Rehn said the UKs veto was a matter of regret as Europe did
not want it on the sidelines. The European Commission, meanwhile, said yesterday it would
fund a 100m (84.6m) fund to free up government data for public use. Picture: Reuters
US LAWMAKERS agreed late last
night to fund the government
through next year, potentially avoid-
ing a shutdown that would have fur-
ther eroded Congres tattered
reputation ahead of the 2012 elec-
tion.
A group of Republican and
Democratic politicians in charge of
government spending agreed on
how to fund crucial government
functions until the current fiscal
year to the end of October 2012, con-
gressional aides said.
Politicians are expected to publish
the massive spending bill, also
known as the omnibus, today.
The House of Representatives and
the Senate must still vote in favor of
the spending bill before a temporary
funding measure expires on Friday.
A Senate panel also said yesterday
that it had agreed new sanctions
against Irans central bank, and
frozen $700m in aid payments to
Pakistan, in a bid to curtail the
movement of explosives into
Afghanistan.
US agrees a
funding deal
for next year
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THE FINANCIAL Services Authority
(FSA) participated in a mass delusion
that drove markets and underlay a
flawed regulatory regime in the run-
up to RBSs collapse, the authority con-
cluded yesterday in its long-awaited
report on the collapse of the bank.
The FSA had a tendency to share
the delusions of the then conventional
confidence, the report says.
But the regulator also points the fin-
ger at RBSs management and at pres-
sure from the previous government.
FSA chairman Lord Adair Turner
blamed underlying deficiencies in
RBS management, governance and
culture for causing bad decisions.
Those mistakes were left unchecked
by regulators inadequate scrutiny
due to pressure to run a light touch
regime, the report suggests.
Ed Balls, now shadow chancellor
and then economic secretary to the
Treasury, is singled out as keen to pro-
mote a lightly resourced regulator.
In particular, under the regime Balls
praised for its efficiency, Turner com-
plains that the FSA had just five people
responsible for supervising RBS in
2007, a job now done by 23 people.
The report also condemns RBSs
executives for overseeing an aggres-
sive expansion of its balance sheet
fourfold in four years while having
little idea of its capital levels and vul-
nerability to high-risk asset classes.
Executives and the board were not
sufficiently aware of their exposure,
the report says.
As possible remedies, Turner sug-
gests automatically barring directors
of a collapsed bank from future
finance jobs and beefing up the UKs
pay rules, already the worlds strictest.
FSA admits it
joined market
mass delusion
Lord Adair Turner blamed underlying deficiencies at RBS management Pic: REUTERS
BY JULIET SAMUEL
BANKING
Taxpayers spent over 25bn bailing out the

bank in 2008. It has lost value since then.
Its balance sheet expanded fourfold to a
value of 2.4 trillion during 2004-2008.
RBSs pre-tax loss in 2008 was over 34bn.
FAST FACTS | RBS
Focus on RBS report
Two lever arch
folders and a CD
the amount of
information given to
RBS by ABN Amro in
April 2007
Words by Peter Edwards
01:00
25 Nov
01:00
24 Nov
01:00
28 Nov
01:00
29 Nov
01:00
30 Nov
01:00
01 Dec
01:00
02 Dec
01:00
05 Dec
01:00
06 Dec
01:00
07 Dec
01:00
08 Dec
01:00
09 Dec
01:00
10 Dec
01:00
11 Dec
13:00 12:00
5,100.0
5,140.0
5,180.0
5,220.0
5,260.0
5,300.0
5,340.0
5,380.0
5,420.0
5,460.0
5,500.0
5,540.0
5,580.0
5,620.0
UK100
(25th November to 9th December)
5,629.9
0.0%
5,418.3
38.2%
5,353.0
50.0%
5,287.7
61.8%
5,077.4
100.0%
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Focus on RBS report
Regulator also shared investors hubris
M
ARKETS are very good at
telling us theres a problem
like ratings agencies when
its bleeding obvious, FSA
chair Lord Turner opined yesterday.
Unfortunately, if there is one thing
the FSAs 450-page report made obvi-
ous yesterday, that adage could just
as well apply to regulators.
Determined readers of the tome
were treated to a mind-numbing
account of the back-and-forth
between RBS and its supervisors.
The picture that emerges is one of
a body constantly playing catch-up,
whether it was on liquidity rules,
asset values, financial engineering or
the basics, like data collection.
Only with the benefit of hindsight
is it clear quite how muddled regula-
tors and markets assumptions were:
using the modern rulebook RBS
would have recorded a common equi-
ty tier one ratio of just 1.97 per cent
in 2007 (compared to the new mini-
mum of 9.5 per cent for large banks).
In order to illustrate the degree to
which supervisors had participated
in the delusions of this time,
Turner pointed to a pre-crisis report
by international regulators praising
the stabilising influence of now-
hated complex financial instruments
that many banks had invested in.
None of this excuses the shoddy
judgements made by RBSs manage-
ment. But it highlights the hubris of
Britains regulatory overhaul, which
assumes that regulators can spot
bubbles and deflate them gently.
This new role for regulators is
meant to come with a strengthening
of market discipline, with creditors
forced to take losses if a bank fails.
The danger is that amid the cur-
rent debt crisis, the latter reform gets
watered down, leaving us wholly in
the hands of a muddled regulator.
Based on yesterdays report, that is
hardly a reassuring prospect.
BOTTOMLINE
Analysis by Juliet Samuel
2
5
.5
b
n
Total am
ount injected into RBS by the U
K
governm
ent
INVESTIGATION OF
A BANK FAILURE
ANALYSIS l Royal Bank of Scotland Group PLC
p
2006 2007 2008 2009 2010 2011
100
200
300
400
500
600
20.56
12 Dec
RBS REPORT: AT A GLANCE
Why publish this report?
Last year the FSA caused a public outcry
by saying it would take no action against
RBS chief executive Fred Goodwin and
others despite a 17-month investigation.
After pressure from MPs such as Andrew
Tyrie, it agreed to produce a full report.
Cause of RBS losses
The FSA said the rapid expansion of
RBS global banking and markets (GBM)
division under chairman Johnny Cameron
was behind its huge losses. The market
view that RBS had been visibly aggres-
sive in expanding into high risk areas
destroyed confidence, adding to its losses.
Focus on profit, not balance sheet
The FSA cited RBS investors that said
Goodwins pay rewarded earnings growth
rather than balance sheet strength. The
FSA said RBS was slow to realise, during
the course of 2007, that the risk it was
facing was not only to its annual profit
targets, but massively greater and
amounting to a major balance sheet hit.
ABN Amro takeover
The FSA has pledged far greater scrutiny
of major bank takeovers. RBS did not
have to seek regulatory approval to buy
ABN Amro but the FSA admits it could
have blocked the deal by other less
direct means... if really determined.
Making executives accountable
The FSA wants bank executives to take
fewer risks. It suggested making execu-
tives strictly liable for the impact of bad
decisions to make it easier to fine or ban
them after a collapse, or structuring pay
so they are penalised for poor decisions.
But it warned a strict liability basis for
action risked breaching human rights and
could discourage people from top jobs.
Other regulatory reforms
The FSA also proposes wider reforms,
including new leverage requirement to
make sure banks focus on leverage as
well as capital ratios. It wants the power
to block hostile bank takeovers, and more
assessment of how far a banks capital
resources depend on minority interests.
The FSA also wants to check how banks
calculate their regulatory capital position,
and if a firms shortcomings force the FSA
to delay its capital guidance, the require-
ments it sets in the interim will be
tougher than normal.
Amending past mistakes
The regulator has belatedly beefed up its
supervision of RBS from just six people in
August 2007 to 23 today. It says its
supervision regime has been radically
transformed with a greater focus on
capital, liquidity and asset quality.
Whos to blame
The previous government, RBS executive
management and board and the FSA
itself all shared the blame for the banks
collapse. The FSA shared the delusions
of the conventional confidence of the
time, it admitted.
Labour light touch regulation
The regulator said if it had suggested
tougher oversight of banks before the cri-
sis, there would have been extensive
complaints that the FSA was pursuing
a heavy-handed, gold-plating approach
which would harm Londons competitive-
ness. It quotes Ed Balls, then economic
secretary to the Treasury, endorsing light
regulation and then chancellor Gordon
Brown opposing intrusive oversight.
Why there were no sanctions
against Fred Goodwin and others
There was not enough evidence to bring
Goodwin or others from RBS either to
court or a tribunal, the FSA said, as RBS
failure did not automatically make its
chief executive personally liable. The FSA
would have to prove a particular execu-
tive was incompetent, dishonest or lacked
integrity. RBS executives made many
poor decisions, but the errors were not
enough to take action.
On management failures:
RBS management and board
undoubtedly made many decisions which,
at least in retrospect, were poor
On the ABN Amro acquisition:
the board decided to go ahead with it on
the basis of due diligence which was clearly
inadequate relative to the risks entailed
On regulatory supervision: The key prudential
regulations being applied by the FSA, and by
other regulatory authorities across the
world, were dangerously inadequate
THE CITY regulator has vowed to get
deeply into the guts of any future
financial services takeover on the scale
of Royal Bank of Scotlands acquisition
of ABN Amro.
Chairman Lord Turner said the
Financial Services Authority would
take a far more proactive approach
today to the 71bn (47bn) takeover of
the Dutch bank, led by RBS with Fortis
and Santander in 2007.
Now we would be deeply into the
guts of whether we were going to let
you publish details of a bid, Turner
said yesterday at a briefing.
He spoke out after the FSA made a
series of damning criticisms of Fred
Goodwins mega-deal. The report high-
lighted RBS limited due diligence,
which amounted to little more than
two lever arch files and a CD.
Turner used his foreword to call for
regulators to be required to give
approval for major bank deals because
society has an interest in the major
risks which banks take, not just man-
agement, board and shareholders.
The main report also contains a
series of detailed criticisms of how the
deal, a misjudgement with cata-
strophic consequences, would hit
RBS capital base and the confidence
of the market.
The decision to fund the acquisi-
tion primarily with debt, the majority
of which was short-term, rather than
equity eroded RBSs capital adequacy
and increased its reliance on short-
term wholesale funding. The acquisi-
tion significantly increased RBSs
exposure to structured credit and
other asset classes on which large loss-
es were subsequently taken.
Two years later Sir Philip Hampton,
who took over from Sir Tom McKillop
as chairman, described the ABN Amro
deal as the wrong price, the wrong
way to pay, at the wrong time and the
wrong deal.
It falls to Johnny Cameron, however,
the former investment banking chief,
to explain how the 21bn takeover of
NatWest in 2000 left the board over-
confident about its ability to pull-off
transformative deals.
I think that lulled us into a sense of
complacency... The fact is that the
acquisition of ABN was also hostile. We
got bits and pieces of information but
fundamentally it was hostile. Theres
this issue of did we do sufficient due
diligence[?] Absolutely not. We were
not able to do due diligence that was
part of doing a hostile acquisition.
FSA vows no
repeat of ABN
Amro fiasco
BY PETER EDWARDS
BANKING
Focus on RBS report

RBS: WHO TAKES THE BLAME?
Sir Fred Goodwin
The FSA had harboured worries
about Fred the Shreds internal
dominance as far back as 2003.
It criticised the ABN Amro deal,
his brainchild, as a gamble and
dismissed the due diligence car-
ried out as little more than two
lever arch folders and a CD.
Goodwins relationship with the
FSA slumped to the extent that
a clear the air meeting was arranged with the regulators
supervision director in October 2004. Conditions appear to
have worsened by 2006, however, when the then RBS chair-
man Sir George Mathewson added a clause to Goodwins for-
mal performance objectives demanding he improve the banks
relationship with the FSA.
Hector Sants
The FSA, led by Sants, heaps blame on itself for variously placing a
low priority on liquidity supervision, failing to carry out detailed tests
on the effect of the ABN Amro deal on RBS capital and liquidity lev-
els, assuming that markets were inherently stable and succumbing
to political pressures for light touch regulation.
Lord Turner, chairman of the regulator, also highlights deficiencies in
the global system of financial regulation which increased the likeli-
hood of a systemic crisis. The FSA has introduced widespread
reforms, however, and Turner defends its controversial decision not to
take enforcement action, saying mistakes in commercial judgement
are not subject to sanctions and not with the benefit of hindsight.
Gordon Brown
Not so much the Iron Chancellor as
the man who couldnt say no to
tax receipts created by the bub-
ble. The report says a sus-
tained political emphasis on
the need for the FSA to be
light touch and the need
for Britains financial servic-
es to remain competitive
globally helped create the
climate for RBSs growth. It
also describes Browns desire
to avoid unnecessarily
restrictive and intrusive regu-
lation and highlights the role of
his adviser, Ed Balls.
Sir Tom McKillop
The FSA suggests the
board of RBS, led by
McKillop, failed ade-
quately to challenge
RBSs focus on increas-
ing revenue, assets
and earnings per
share when it
should have paid
attention to cap-
ital and liquidity levels. The report said the
key discussions over the doomed acquisi-
tion of ABN Amro were held in board meet-
ings and the chairmans committee but the
outcome of the decisions over ABN, it hardly
needs to be said, were dramatically negative.
Johnny Cameron
He admitted the relatively smooth
acquisition of NatWest had lulled
us into a sense of complacency
around further hostile takeovers,
such as the deal for ABN Amro.
Losses racked up by Camerons
global banking and markets division
eroded RBSs capital base and under-
mined confidence. GBM is also criti-
cised for the decision to aggressively
expand structured credit and lever-
aged finance which exacerbated
losses. Previously faced an FSA inquiry
after which he agreed not to take on
any full-time jobs in the City, although
he did not admit any guilt.
Matthew Greenburgh
Goodwins favourite adviser, who retired from Bank of America
Merrill Lynch last year, does not even merit a mention in the FSA
report. Although he worked on a series of major deals in an often
successful 28-year career in the City, he became known as one of
the architects of RBS disastrous takeover of ABN Amro, alongside
Fortis and Santander. He also worked on Lloyds takeover of HBOS
in 2009, which increased its exposure to bad debt. After leaving
BoA he said he would consider taking a PhD in English Literature.
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VIRGIN Atlantic has muscled into the
auction for BMI, a month after British
Airways parent IAG agreed to buy the
airline.
Lufthansa, which owns BMI, said yes-
terday it has also reached an agreement
in principle to sell the carrier Virgin,
stressing that its deal with IAG had not
been exclusive.
Virgin, which has shown interest in
BMI since it was put on the block in
September, is thought to have made a
bid worth much less than IAGs.
But the firm hopes its smaller market
share would make its offer more
straightforward in the eyes of regula-
tors. Virgin hit out against BA and
Iberias merger on competition grounds.
BMI controls around nine per cent of
the landing slots at close-to-capacity
Heathrow, while Virgin has just three
per cent. Lufthansa hopes to complete a
sale early next year.
TIME Warner has revised its bid
for the debt-ridden television
production company Endemol,
restating its previous proposal of
1bn (859m) as an all-cash
offer.
This comes amid talks of debt
restructuring at the Dutch com-
pany behind Big Brother and Deal
or No Deal, which has racked up
2.8bn of debt.
It is expected that Endemols
lenders will reject Time Warners
bid as it currently stands, voting
in favour of the debt restructure
that will see creditors reduce the
debt significantly to about
500m in return for equity.
Endemols creditors include
Goldman Sachs, RBS, Apollo,
Centrebridge, Barclays, and the
Lehman Brothers estate.
A spokesman for Endemol,
Charles Armitstead, said: The
preferred route is to continue to
reach an agreement with the
lenders rather than consider any
offers from Time Warner, or
indeed anybody else.
Were confident that an agree-
ment that puts the company back
on a strong financial footing is
imminent.
Keith Cocozza, Time Warners
spokesman, refused to comment.
Cash bid for
Endemol in
face of debt
BY LAUREN DAVIDSON
MEDIA
News
BEHIND THE SCENES AT ENDEMOL
Q.
WHAT IS TIME WARNER
HOPING TO ACHIEVE?
A.
Time Warner has turned its
eyes to Europe: of the compa-
nys 20 deals in the last few years,
about 80 per cent have been out-
side the US. Endemols deadline for
sorting out its finances is today, so
this is an opportune time for Time
Warner to make its move.
Q.
HOW HAS ENDEMOL
RESPONDED TO TIME
WARNERS APPROACH?
A.
It says the revised offer does
not really change anything.
Endemols negotiations with
lenders have been going on for
about a year, and the far more
likely option, according to one
source, is that the bid will not be
accepted.
Q.
WHY DOES ENDEMOLS DEBT
NEED RESTRUCTURING?
A.
Endemol is currently 2.8bn in
debt. When the TV company
was acquired by Goldman Sachs,
Mediacinco and Cyrte in May 2007,
these companies raised the debt
financing. Endemol has struggled
to meet the required interest pay-
ments, partly because the enter-
tainment industry has taken a hit
lately. The company has been in
discussion with its creditors for a
year or so about revising its capital
structure to avoid the breaching of
loan covenants. A waiver was
extended last month, which
expires today.
Q.
WHAT WILL THE DEBT
RESTRUCTURE INVOLVE?
A.
The existing debt is expected
to be written down significant-
ly and in return the lenders will
receive equity in the business. This
will require two thirds of the
lenders support to go through.
Endemols loan covenants will be
revised and it will be left with a
smaller amount of debt to service.
Q.
WHAT WILL HAPPEN NEXT?
A.
It is likely that Time Warners
bid will not be successful and
the lenders will write Endemols
debt down to around 500m.
PETER
MARSHALL
CO-HEAD OF
EUROPEAN
RESTRUCTURING
ANALYSIS l Time Warner Inc
$
34.80
35.00
34.60
34.40
34.20
34.00
34.24
12 Dec
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Virgin wades
back into the
fight for BMI
Houlihan Lokey is advising Endemol
through its debt restructuring process
and will be on call to offer its advice
on Time Warners revised bid.
Leading the team is Peter Marshall,
a managing director at Houlihan
Lokey and co-head of the firms
European restructuring department.
A specialist in corporate restructuring
and turnaround, he has experience in
complex cross-border transactions, so
should be well-equipped to advise
Endemol in this case.
Marshalls previous clients include
Gate Gourmet, Welcome Break
Group, 20:20 Mobile Group and JVH
Gaming.
He is joined by Gijs de Reuver, a
director at Houlihan Lokey. Formerly
vice president of Houlihan Lokey
Howard & Zukin and an executive
director of Goldman Sachs, de Reuver
focuses on financial restructuring.
Endemols creditors, which include
Goldman Sachs, RBS, Apollo,
Centrebridge, Barclays and the
Lehman Brothers estate, are being
advised by Rothschild.
Charles Armitstead is managing
Endemols communications in this
case. He recently left FTI Consulting
to work for Pendomer
Communications.
Big Brother contestant
Pamela Anderson.
Programme creator
Endemol, led by president
Marco Bassetti (inset), is
2.8bn in debt
Picture: REX
Q A
&
BY MARION DAKERS
TRANSPORT
ADVISERS:
HOULIHAN LOKEY
Intel sales hit
by Thai hard
drive drought
SHARES in US chip maker Intel fell
more than four per cent in trading yes-
terday as it warned that supply short-
ages of computer hard drives caused by
floods in Thailand would hurt its rev-
enue in the current quarter.
More than 600 people have died in
the flooding, which has caused billions
of dollars in damages since July and dis-
rupted international supply chains in
the PC and automobile industries.
In the last two weeks, as the supply
became more apparent, we saw a sub-
stantial change in our order rate. Most
of our customers are concerned the
shortage will continue especially
through the early part of the first quar-
ter, said Intels senior vice president
Tom Kilroy on a conference call.
Intel said customers were reducing
their stock of chips in anticipation of
the hard drive shortage continuing
early next year.
BY ALISON LOCK
TECHNOLOGY
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News
NEWS | IN BRIEF
Carrefour launches bid for G&G
Carrefour, the worlds second-largest
retailer, said yesterday it was offering to
buy Guyenne et Gascogne, in a cash bid
worth 494m (418m) to secure its rela-
tionship with its largest French fran-
chisee. The supervisory board of Guyenne
et Gascogne has approved the proposed
transaction, which includes an option to
be paid in Carrefour shares, the two com-
panies said in separate statements.
Battersea Power Station folds
Battersea Power Station was put into
administration yesterday after its owner
failed to repay it creditors 324m of debt.
Irish developer Real Estate Opportunities
had been seeking a new investor to repay
the debts and fund a 5.5bn regeneration
scheme. A High Court ruling yesterday
confirmed Ernst & Young as administrators
a move set to attract property investors
hoping to develop the station.
The Citys Takeover Panel needs to get a grip
W
HEN Omega Insurance
decided five years ago to
redomicile to Bermuda, I
would think it unlikely that
many shareholders gave much
thought to how the company would
be regulated from here on in, specifi-
cally in regard to being within the
remit of the Citys Takeover Panel.
But in the past few days many of
them have had cause to reconsider
the implications of that move.
Omega has been in the throes of
lengthy takeover discussions and
recently appeared to be on the way to
agreeing a deal that would see the
group effectively in the control of
Mark Byrne, an insurance entrepre-
neur who also happens to be the god-
son of Warren Buffett.
Byrne, with the encouragement of
the groups board, put in an offer for
up to 25 per cent of Omegas shares.
His offer, on which he was advised by
Citi, was an unusual reverse tender
which envisaged him paying up for
shares in a price range. The more
investors agreed to sell at a lower
price, the less he would have to pay.
Sources close to the deal say that
Citi gave Byrne confidence that he
would be able to buy the majority of
the shares at the low end of the
range. But the tender actually fin-
ished with virtually all shareholders
agreeing to sell shares only at the top
end.
Just before the offer closed, Byrne
let it be known that his offer was set
to lapse because it had all along been
conditional on various regulatory
clearance being given, which had not
been completed.
Shareholders are now in a mess.
One top ten shareholder says the
whole thing is a farce. Were waiting
to hear back from the company but
its been 12 months now since
Omega first announced it had had a
takeover approach and were still
waiting for something to happen.
Bankers close to the deal are con-
vinced that this impasse would not
have happened if Panel rules had
applied and the Panel had been able
to bang heads together. They worry
that other companies such as Hardy
Underwriting (also the subject of a
bid) have redomiciled.
The Panel should surely consider a
change in its remit so that all UK-list-
ed companies come within its
purview.
At the moment its view seems to
be that youre either in or youre
out, and that shareholders in com-
panies that change their domicile
know the risks.
While that may be so, UK financial
markets can do without too many
more Omega Insurances.
david.hellier@cityam.com
INSIDE TRACK
DAVID HELLIER
City A.M. Christmas Appeal
Lloyds trader,
a Boris bike,
and the appeal
OUR Christmas charity appeal has raised a stagger-
ing 250,000 in just three weeks all thanks to our
generous readers.
Please find the time to make your contribution,
and through our match funding agreement, all dona-
tions from UK individuals will be matched by the
Government pound for pound.
You can also try your hand at City A.M.s online
auction at www.cityam.com/auction. Bid for a deca-
dent night of fine dining and whiskies at Boisdale
restaurant at Canary Wharf or golf with Sam
Torrance, former European Ryder Cup team captain.
250,000 RAISED IN THREE WEEKS
BY PHONE: by debit or credit card to
01865 725 304
Text donations may not work from company mobile phones as these often block
premium messages
BY TEXT: CITY11 and amount
(5 or 10 only) to
70070
www.cityam.com/appeal
Lindsay Williams tackling his 200-mile Boris bike challenge, at 5:30am
250,000
THERE seems to be no limit to the feats
of endurance some City workers will
perform for a good cause.
For Opportunity International, the
charity behind City A.M.s Christmas
appeal, one brave Lloyds Banking
Group trader decided to tackle a 200-
mile bike ride in less than 24 hours.
What made the challenge particu-
larly gruelling was that interest rate
trader Lindsay Williams decided to
make the trip on a Boris bike one of
those far from light and streamlined
bicycles available for Londoners to use.
Lloyds is sponsoring our appeal, and
its wholesale and international bank-
ing division has partnered with
Opportunity since 2005 to help raise
money for its projects worldwide.
One Friday evening in September,
Williams swapped his suit and comfy
weekend at home for a flat-out tour of
the South East with friend Lee
Bartholomew. The two started ped-
alling in Greenwich after choosing
their Boris bikes in central London,
tackling both the 2012 Olympics
marathon and mens road race cours-
es, deep into the night.
At 4.30am Lindsay and Lee arrived
at Box Hill, Surrey, to face the biggest
challenge of the route; nine vertical
zig-zag ascents of the hill.
The heavy frames of the bikes tested
their strength to the limit. With just
seven miles to go and almost no ener-
gy left, they battled through the after-
noon traffic in Fulham to cross the
finishing line in the Mall 22 and a half
hours later.
Lindsay was thrilled to complete the
course within 24 hours, raising more
than 2,000 for Opportunity.
He said: If anyone uses Boris bike
18282, please be gentle with it. It
deserves a rest!
WEEK THREE UPDATE
CITY A.M. CHRISTMAS APPEAL
CHIEF EXECUTIVE
OPPORTUNITY INTERNATIONAL UK
EDWARD FOX
Proudly sponsored by Matching your donations with
T
here has been more news over the
past week focusing on the increasing
numbers of people in the UK running
up large debts.
At this time of year, of course, there is
always heightened concern as consumers
stretch credit limits to push the boat out
for the festive season.
Listening to the talk of payday loans,
zombie debtors and debt traps, I am
reminded yet again that what happens here
often mirrors what plays out in Africa,
where loan sharks are prevalent.
Lending is the core of our service at
Opportunity International, but it goes
hand in hand with financial education and
training programmes.
We aim to equip our clients with the
knowledge to understand the upsides and
downsides of debt.
With a repayment rate of 96 per cent,
these micro-entrepreneurs have proved
over and again that they can make good
financial choices.
pitality but if guests expect Hixs
signature British style at his latest
opening, then think again. Weve
had fun with the menu and are
going off-piste, said Hix.
CASINO BANKING
RUMOURS circulated that Daniel
Stewart had bankrolled a third round
of quantitative easing, securing a
licence to print money at its
Christmas party at Harrys Bar on
Ironmonger Lane.
The firm even let guests speculate
that the banknotes at the roulette
table were fakes, funded by Chinese
investment firm Jade Investments.
The money was NOT real,
stressed a spinner. It was fake
money with Marilyn Money [written]
on it, as the theme was Hollywood.
With hindsight, the Elvis imperson-
ator was a giveaway as enjoyed by
David Newton of the Helium Special
Situations fund, over from Monaco for
the occasion, and Daniel Stewarts
chairman and chief executive Peter
Shea and consultant Adam Wilson.
FEEDING THE 5,000
BUSINESS is booming at Pret A
Manger, the sandwich
and coffee company
majority-owned by
private equity
firm Bridgepoint.
So while other
firms are scaling
back on corporate
entertainment,
the chain still
throws both
summer and
Christmas events
for its 5,000 staff,
the latest last
Saturday at the
HAC Artillery
Garden.
The food, howev-
er, was not that
great, according to
one guest. Perhaps
Pret a Manager
should have served its
own products even if only the
famous porridge, credited with help-
ing the company hit its 37 per cent
rise in core earnings last year.
END OF THE AFFAIR
NO STONE was left unturned when
journalists yesterday quizzed FSA
chairman Lord Adair Turner at the
press call to release the report on why
RBS failed. Not even whether the
alleged affair by the banks former
CEO Sir Fred Goodwin affected his
concentration on the job in hand, as
one newspaper reporter queried.
We found out who this person
was, said Turner, to sniggers from
the room. If this person had been a
chief risk officer, there might have
been concerns. Did we go back and
work out precisely how focused on
the job Fred was? No.
LUCK OF THE DRAW
SAY WHAT you like about bankers, at
least they know how to run a simple
charity raffle. Or do they?
The Capitalist hears that one 30-
something investment banker man-
aged to sell both the raffle ticket and
the counterfoil at a City firms recent
Christmas drinks, meaning he made
twice the money but the punter had
zero chance of winning.
Sound familiar? Its no surprise
the City is in so much trouble when
you have people who dont even
understand how a raffle works run-
ning the banks, said a mole.
GOING DUTCH
KELLY Rowland is big in Saturday
night television, as a judge on the X
Factor. And now the ex-Destinys
Child singer is big in expensive
watches, as the face of TW Steel,
the Dutch watchmaker known
for its oversized timepieces.
The partnership was
unveiled at a party at
The Box, the Soho
burlesque club
favoured by Icaps
excitable traders,
and special edi-
tion Kelly
Rowland watch-
es will follow in
2012, assures
TW Steels
chief executive
Jordy Cobelens
(pictured left
with Rowland).
Perhaps pre-
sumptuously,
he added: I
know theyll be a
huge success.
EXPECT THE UNEXPECTED AS MARK
HIX MOVES INTO BELGRAVES HOTEL
THE RUMOURS have been swirling
around the leisure industry for
months, and Thompson Hotels yes-
terday confirmed that chef Mark
Hix will run the restaurant and bar
at its new hotel launch Belgraves,
due to open in January.
The 80-seat Hix Belgravia, the
chefs fourth restaurant, will offer a
menu inspired by his travels around
the world, while Marks Bar, his sec-
ond after the Soho original, will
contain a cigar garden and art-
works commissioned from artist
Mat Collishaw.
Belgraves, located on Chesham
Place behind Sloane Square, is the
first transatlantic opening from
Thompson Hotels, the New York and
Los Angeles-focused group owned by
brothers Larry, Jason and Michael
Pomeranc and Stephen Brandman.
The 85-room hotel is a joint ven-
ture with the Harilela Group, the
Hong Kong-based family-owned hos-
pitality empire led by Dr Hari
Harilela, an adviser to the Chinese
government, with interior design by
Tara Bernerd and EPR Architects to
make the hotel a second home for
Londons business leaders.
Jason Pomeranc has said he is
inspired by traditional British hos-
Chef Mark Hix has had fun with the menu for Hix Belgravia at Belgraves hotel
Elvis performed to Daniel Stewarts guests
The Capitalist
EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @dennysharriet
IMPACT ON
THE WEST
Some of Americas most iconic
moments and symbols The Boston
Tea Party, and The Stars and Stripes -
stem from its history with The East
India Company.
In December 1773, American colonists
stole aboard ships and dumped 342
crates of East India Company tea into
Boston harbour to protest taxation.
The act became a rallying point for
what would become The War for
American Independence, changing
the course of history. Today, The East
India Companys Boston Tea Party
blend, based on the original teas sent by
The East India Company to America,
allows you to enjoy fine tea free of any
taxing troubles.
And, the US Flag is said to be based on
the original East India Company flag.
With alternating red and white stripes,
the similarity is undeniable.

THE EAST I NDI A COMPANY
introduced tea to Britain and India,
spices to the West Indies, and porcelain
to Russia. The Company held Napoleon
captive in St. Helena and its tiny spice
island, Pulo Run, was later exchanged
for Manhattan.
Granted a Royal Charter by Queen
Elizabeth I in 1600, The Company
mapped trade routes, discovered exotic
goods, and established trading ports
which would grow into the cities of
Singapore, Hong Kong, and Mumbai.
Food lovers will delight at the fine
selections, exotic tastes, and rich
flavours from around the world.
s THE JOY OF CHOCOLATE
Macademia Nuts Ginger
StrawberriesThe collection of
fine Belgian Chocolate Enrobed
Nuts, Fruits, and Coffee Beans
make the ideal stocking fillers for
those with a sweet tooth.
And if youre looking for a unique
twist, discover the exotic flavours
of Nutmeg, Cinnamon, Peppercorn
and Sea Salt paired with rich
chocolate, in our selection of
chocolate bars.
Or, cosy up with a warm hot
chocolate using our Supreme
Drinking Chocolate, with real
chocolate shavings.
s LUXURY HAMPERS
Select from our pre-designed
hampers, or create your own with
a gourmet collection of teas,
coffees, biscuits, condiments,
salts, and sugars.
s LUXURY HAMPERS
Select from our pre-designed
hampers, or create your own with
a gourmet collection of teas,
coffees, biscuits, condiments,
salts, and sugars.
s LEATHER TRUNKS
To create a lasting impression,
look no further than The East
Indias Companys Christmas
Trunks. Made with high quality
leather and authentically
weathered with tea, they create
the ideal culinary gifts for
gourmands.
THE EAST INDIA COMPANY
range is available from its
flagship store on 7-8 Conduit
Street, London W1 (Oxford Circus
Tube just off Regent St) or
www.eicfinefoods.com
Last order for Christmas delivery
is 15th December 2011.
TRADE, THE WORLD AND
THE EAST INDIA COMPANY
INFLUENCES FROM
THE EAST
THE GREAT EXHIBITION took place
in 1851 in Hyde Park, London. As the
first of many World Fairs to come, it was
held for Britain to show its expertise
and leadership on a world scale. Held
in a structure called The Crystal Palace,
one of the main features was The East
India Companys exhibit on India.
The highlight of the Great Exhibition
was the Koh-I-Noor, the infamous
diamond from India, brought over by
The Company. They used The Exhibi-
tion to prove the benefits of the
relationship with India, creating a
display of Indian materials, art and
culture bar none, dazzling and impress-
ing this worldwide audience.
Various artefacts from The Great
Exhibition were used to create the
V&As first collection, and profits from
the show enabled the purchase of land
near Hyde Park in South Kensington,
where the V&A was developed, in
addition to the Natural History
Museum, and the Science Museum.
LAST MINUTE
CHRISTMAS IDEAS
COMPUTER chip manufacturer CSR
was the highest riser in the FTSE 250
yesterday after the company
announced its intent to pull out of its
loss-making digital television and sili-
con tuner businesses.
Shares rose by as much as 15 per
cent before closing up 10 per cent at
183p.
The move, which will save the chip
developer $60m (38m) a year in oper-
ational costs, is part of a plan to focus
on areas where the company has a
stronger market presence.
CSR will axe 400 jobs mainly out-
side the UK as a result of this clo-
sure, incurring an additional $10m in
restructuring costs by the end of the
first half of 2012.
This comes after the firm cut 400
jobs this summer as the Cambridge-
based company acquired Zoran, the
US image technology group, for
300m.
Joep van Beurden, chief executive
officer of CSR, said: The actions we
have announced today will allow us to
increase our focus on the areas of the
business that offer the best prospects
for delivering sustained and prof-
itable growth.
CSR will continue to support its cur-
rent products in the closed sectors,
but will stop developing new models.
Fourth quarter 2011 revenues are
expected to be in line with previous
guidance, in the range of $230m to
$250m.
CSR cuts off
loss-making
digital arm
CSRs chief exec Joep van Beurden says the firm will focus on areas of profitable growth
BY LAUREN DAVIDSON
TECHNOLOGY
News
CITYA.M. 13 DECEMBER 2011 19
www.RateSetter.com Customer Phoneline: 08442490115
In association with RateSetter: A better way to Save and Borrow, Peer to Peer
* These views are those of the individuals below and not necessarily those of their company
CITY VIEWS: WHAT ARE THE MOST DESIRABLE
TECH ITEMS THIS CHRISTMAS? Interviews by Kasmira Jefford
KENNY BHATTI
EGLIN HOLDINGS
MICHELLE OCONNELL
INVESTMENT SOLUTIONS
I will be looking to buy
Apple products like the
Mac book pro or the LED
cinema display, which is
better to work with and
watch films. I am
also waiting for
Apple around
February to
release its
televi-
sion.
In terms of whether I am
buying them for other peo-
ple this Christmas, I would
say no, because most peo-
ple I know have got the
gadgets they need. Those
into their gadg-
ets are waiting
for the next big
thing to come
out like
the iPad.
ANALYSIS l CSR
p
185
190
195
200
180
175
170
165
183.10
12 Dec
NEWS | IN BRIEF
OFT tobacco fines overturned
Imperial Tobacco and several leading
retailers have won a court battle to over-
turn record fines imposed by the Office of
Fair Trading (OFT) over allegations of
unlawful pricing. A fine of 112.3m hand-
ed down to Imperial Tobacco last year
was reversed, while Morrisons, Asda, Co-
Op and Shell also had cases against them
overturned by the Competition Appeal
Tribunal. The original tribunal related to
promotional deals between Imperial and
the retailers in 2000-03, and resulted in a
record total fine of 225m after the OFT
alleged unlawful pricing deals.
Thyssen sells superyacht business
ThyssenKrupp has sold its Blohm + Voss
superyacht and two other marine units to
British buyout firm Star Capital, in a deal
worth up to 150m, as the German steel-
maker focuses instead on building military
vessels. The sale is part of the companys
10bn divestment plan begun this year to
lower its debt, including a spin-off of its
stainless steel division. Among Blohm +
Vosss superyachts, the biggest by far was
Roman Abramovichs Eclipse, a 557-footer
equipped with two heli-pads, a pool and a
missile-detection system.
Martin Marietta bids for Vulcan
Construction aggregates maker Martin
Marietta Materials has made an unsolicit-
ed $5bn offer to buy larger rival Vulcan
Materials in stock, in a bid to create the
global leader in the industry. The compa-
nies began considering a deal more than a
year and a half ago, but Vulcan broke off
talks in recent months. CJS Securities
analyst Arnold Ursaner said the deal
makes sense because of the synergies it
offers, but that Vulcan may reject it.
ADVERTISEMENT
I dont have any requests
per say for any tech
devices. I basically have
everything I need through
work so I dont need to
buy them a second
time for person-
al use. Im also
unlikely to
buy things
for the
house.
JESSICA REEVES
LEAP CR
SHARES in Areva Frances state-owned
nuclear energy company were sus-
pended in Paris yesterday after losses
associated with the Fukushima crisis
in Japan took their toll.
The nuclear reactor maker had been
expected to take heavy writedowns
related to cancellation of orders.
The declining value of UraMin, a
Canadian uranium miner bought by
Areva in 2007 for 1.9bn (1.6bn), was
also taking its toll.
French industry minister Eric
Besson sounded the alarm at the week-
end, indicating that Areva was on the
ropes. The French state owns 87 per
cent of the company.
Chief executive Luc Oursel met with
the companys board yesterday to ham-
mer out restructuring plans which
include job cuts in its international
operations.
The firm plans to write off 2.36bn
from its accounts this year and expects
an operating loss for 2011.
Areva said it had asked for the sus-
pension shortly before the market
opened yesterday. The NYSE Euronext
stock market operator immediately
suspended trading.
Areva is a world leader in the field of
nuclear energy facilities, but the out-
look for the sector has been heavily
clouded by a switch in sentiment away
from nuclear energy in some coun-
tries, notably in Germany, in light of
the disaster at Fukushima in Japan.
The group faces a huge exceptional
charge that will push it into a loss for
the first time in 10 years.
UraMin was sold to Areva just two
years after it joined Londons junior
stock market with a 120m market
value. The French government backed
the firms decision at the time.
The huge spike in its value in 2007
reflected a $138 a pound price tag for
uranium at the time at the time
because of upbeat outlooks on the
future of nuclear reactors.
However, uranium is now priced at
less than $60 a pound as the
Fukushima events have led several
states to decide that nuclear power is
no longer an option for their power
production.
UK-LISTED explorer Gulfsands
Petroleum and Chinese company
Sinochem have shut down their oil
operations in Syria following
European Union sanctions related to
the crackdown on the uprising
against the rule of President Bashar
al-Assad, Gulfsands said.
Although China has resisted sanc-
tions on Syria, Sinochem is bound by
EU sanctions since it bought its inter-
est in the Syrian fields by taking over
UK-listed Emerald Energy, through
which it still owns the assets, a
Gulfsands spokesman said.
Syrian state-controlled General
Petroleum Corporation (GPC) will
continue to produce oil from the
fields, in exploration block 26.
Analysts said the further develop-
ment of the block would be delayed.
The Syrian fields are the only cash-
generating assets Gulfsands owns,
but a spokesman said it had $120m
on the balance sheet and no debt.
Gulfsands shares dropped 8.7 per
cent to 170p yesterday.
Areva halts
trading over
nuclear loss
BY JOHN DUNNE
INDUSTRY
Bespoke Stationery
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craftsmanship and style. Every product is designed, developed and hand-crafted
by our team of highly skilled individuals, making each piece truly exceptional.
BP is over the worst phase of its
problems after the Gulf of Mexico
oil spill, chairman Carl-Henric
Svanberg (right) claimed yester-
day, clearing the way for him to
lead the board at world number
two truck maker Volvo.
The Volvo nomination commit-
tee said in a statement it had
backed Svanberg to head the
board at Volvo. Svanberg has been
chairman of BP since January
2010.
Svanberg, who had to apologise
for referring to those hurt by the
April 2010 oil spill as small peo-
ple, said that his working week
at BP was about two to three days.
We are no longer in the acute
crisis phase of the oil spill situa-
tion, he said, adding that most of
the work now was related to
dealing with compensa-
tion issues.
But he said his ambition
was to leave the board of
mobile network gear maker
Ericsson, where he is a direc-
tor and where, from
2003 until 2009,
he was president
and chief execu-
tive.
I think that he should be able
to handle these two jobs [at BP
and Volvo], but not anything else.
One of the most important things
is that the nomination committee
has taken up the question of
whether he can handle both posi-
tions, said Helena Levander,
head of Nordic Investor
Services, which offers advice
and analysis on corporate gover-
nance issues.
In a Swedish merry-go-round,
Volvos former chief
executive officer, Leif
Olofsson, became
chairman of Ericsson
earlier in the year.
Svanberg plans to keep BP chair
as he takes on new role at Volvo
BY HARRY BANKS
MANUFACTURING
E.ON lowers
profit range
on charges
GERMAN utility group E.ON will
bear a 3bn (2.6bn) charge in its
2011 accounts as large Eurozone
countries such as Spain and Italy
intervened to lower prices, it said yes-
terday.
E.ON, the worlds biggest utility
company by sales, said the charge
would damage its overall net profits,
and lowered the top end of its profit
range to 2.5bn from 2.6bn.
Net profit is now expected to be
within the range of 2.1-2.5bn, while
its adjusted earnings before interest,
tax, depreciation and amortisation
in 2011 is expected to be between
9.1-9.3bn. It had previously forecast
adjusted Ebitda of up to 9.8bn.
The company said the biggest
chunk of the charges, 2.1bn, were
due to a pessimistic outlook for long-
term power prices in Spain and Italy,
as well as reduced load hours for gas
and coal power plants in those coun-
tries.
In addition, lower than expected
volume and margin assumptions for
some of E.ONs Eastern European
spread generation assets in Hungary
and Slovakia trigger an impairment
of 0.4bn. In central Europe, mainly
in Benelux, impairments amount to
0.5bn, it said.
Along with peer RWE, E.ON is cur-
rently suffering from the fallout
from Germanys decision to exit
nuclear power, leading to shrinking
profits, massive job cuts as well as an
asset disposal programme.
BY ALISON LOCK
ENERGY
NEWS | IN BRIEF
Cosalt chair talks up his offer
Cosalt chairman David Ross has writ-
ten to investors urging them to accept
his offer to buy their shares in the
embattled firm. Ross, who wants to
de-list the company, has made a
400,000 offer for the marine safety
equipment provider Cosalt. Carphone
Warehouse founder Ross said in the
letter, published yesterday: Without a
sufficient inflow of finance into the
business, the companys whole future
is at stake and its options are extreme-
ly limited. Shareholders have until 20
December to accept his controversial
offer of 0.1p per share.
Xcite looks to appease investors
Xcite Energy said yesterday a viable
and more financially efficient means
of commercialising the Bentley North
Sea oil field was being investigated,
after shareholders had expressed con-
cerns over an apparent lack of
progress. The department of energy
and climate change must first sign-off
the Bentley field development plan.
Xcites shares fell 4.8 per cent.
Essar execs charged with fraud
India's federal police yesterday filed
fraud charges against five executives
at Essar Group the parent company
of London-listed Essar Energy and
Loop Telecom, as part of a sprawling
probe into a multi-billion-dollar tele-
coms case. Fraud and criminal conspir-
acy charges have been filed against
billionaire Ravi Ruia, vice chairman of
Essar Energy, and his brother
Anshuman Ruia. The firm denied all
charges in a statement, adding that it
would take legal recourse.
News
Gulfsands shuts down its
Syria project amid unrest
BY HARRY BANKS
ENERGY
Gulfsands is pulling out of Syria in the wake of European Union sanctions

TURKEY
IRAQ
SYRIA
O
il P
ip
e
lin
e
BLOCK 26
3D
Seismic
Taramish 3D
0 30km
ANALYSIS l Areva SA

21.50
20.50
21.25
20.25
21.00
20.75
19.20
12 Dec
SHARES in CPP Group plunged by
nearly a sixth yesterday after the cred-
it card insurer said a regulatory probe
would drag down profits.
Its stock closed at 117p last night,
down 15.83 per cent, 21 months after
listing at 235p. The group said it does
not know how long the Financial
Services Authority will spend on an
investigation into the way it sold pro-
tection against identity theft, or the
likely outcome. The inquiry, opened
in March, is having a material
impact on its UK sales.
CPP said it expects organic revenue
growth to be in line with expecta-
tions at around six per cent in 2011.
Underlying group operating profit
in 2012, however, is likely to be signif-
icantly lower than 2011 due to the
impact of lower sales this year, and
increased regulatory costs and eco-
nomic pressures in southern Europe.
The transition to a new Identity
Protection product has meant lost
sales opportunities and this, com-
bined with challenging trading con-
ditions in Southern Europe, will
impact the business in the near
term, the company said.
CPP shares slump
on profit warning
and probe worries
BY PETER EDWARDS
INSURANCE
News
NEWS | IN BRIEF
Train stations to house offices
Workers struggling to get to the office
during the Olympics will be able to work
from train stations through a new ven-
ture by Network Rail. The 40m move,
made in conjunction with The Office
Group, will see flexible office space
spring up at five London stations. The
first drop-in hub, which should be ready
by mid-2012, will accommodate up to
250 people in a range of flexible office
sizes at Paddington Station.
Centaur Media in new Venture
Centaur Media, the business informa-
tion and events group, has acquired
Venture Business Research (VBR), a
specialist digital data and analytics
business in the clean energy and global
security sectors, for a maximum pay-
ment of 7.5m. The cash consideration
comprises an initial payment of 2.5m
at completion and a further payment,
subject to VBR's performance in the
year to 30 June 2015.
Mac App Store passes 100m mark
Apple yesterday said it has passed
100m downloads from its Mac App
Store the version of its online shop
installed on its range of laptop and desk-
top computers in less than a year.
Apples main app store has more than
500,000 apps and more than 18bn cus-
tomer downloads, with the total grow-
ing at more than 1bn a month.
SWISS Re said yesterday chief execu-
tive Stefan Lippe (pictured) will take
early retirement after roughly three
years at the helm, in a surprise move
that analysts said added a new ele-
ment of uncertainty to a company
which Lippe had helped stabilise.
No reason was given for the depar-
ture, which Swiss Re said would take
effect next year. Some analysts saw
reinsurance chief Christian
Mumenthaler as likely successor, but
Swiss Re said it will also look outside
for candidates for the position.
The 56-year-old Lippe informed the
Zurich-based firms board over the
weekend of his decision, a Swiss Re
spokesman said. In a statement, Lippe
cited the turnaround of the reinsurer
as the appropriate time to step down.
The board of directors very much
regrets Stefan Lippes decision to
retire early after almost three
decades at Swiss Re, chairman
Walter Kielholz said. A successor
will be appointed soon, Swiss
Re said.
Analysts said
the departure was
a note of uncer-
tainty at Swiss
Re after Lippe
ushered in an
era of greater
stability fol-
lowing a push to take more risk under
his predecessor, Jacques Aigrain.
Lippes main achievement was
steadying Swiss Re after it lost its AA
rating in 2009 when risky invest-
ments jeopardised its capital
base, prompting a SwFr3bn
(2.05bn) loan from Warren
Buffetts Berkshire Hathaway.
Swiss Re repaid the Buffett
loan late last year
and in October
won backing from
ratings agency
Standard & Poors,
which lifted its
credit rating for
the reinsurer to
AA- from A+.
Lippe plans to retire
early from Swiss Re
BY HARRY BANKS
INSURANCE
BAA reported a slowdown in the num-

ber of passengers visiting its airports
last month after Londons biggest air-
port Heathrow was impacted by pub-
lic sector strike action.
The airports operator said passenger
numbers at Heathrow fell 0.5 per cent
to 5.2 m, compared with the same
time last year. An estimated 50,000
fewer passengers flew after airlines
reduced load factors in preparation
for the strike.
The number of travellers on domes-
tic flights tumbled by 12.3 per cent
year-on-year meaning passengers were
down even after the impact of the
Border Agency strike on 30 November
was taken into account.
This sustained domestic decline
reflects the UK regions being progres-
sively cut off from the UKs only hub
airport by a lack of capacity at
Heathrow, BAA claimed.
In total, the company said its air-
ports, which also include Stansted,
Glasgow and Aberdeen, handled BAAs
airports handled 7.8m passengers,
down 0.9 per cent on the previous
year.
BY KASMIRA JEFFORD
TRANSPORT
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MORE NEWS
ONLINE
www.cityam.com
ANALYSIS l CPPGroup
p
7Dec 8Dec 9Dec 12Dec
140
150
160
130
120
110
117.00
12 Dec
Chief exec Paul Stobart faces a challenge in restoring investor confidence in CPP
ANALYST VIEWS: WILL CPP GROUP RECOVER
AFTER A WEAK PERFORMANCE? Interviews by Peter Edwards
HENRY CARVER | PEEL HUNT

The FSA investigation remains un-resolved and the UK business is still
materially impeded....Our estimates and recommendation remain under review.
ALEX HUGH | UBS

We think new income has worsened in Q4 to date due to card protection
being a more mature product, and Spain having deteriorated further.
HUGO MILLS | CITI

Short term the shares continue to be driven less by fundamentals and more
by uncertainty around the outcome from the FSA investigation.
TORONTO-LISTED Chinese forestry

firm Sino-Forest is further delaying
the release of its third-quarter finan-
cial results until unnamed outstand-
ing issues have been resolved to the
satisfaction of its board of directors.
Sino-Forest, whose shares have been
halted for months following allega-
tions of fraud, yesterday said execu-
tives were considering several options
for the firm including a sale.
The firm had been expected to file
its results on Thursday, under a 30 day
period agreed in November. The firm
also said a report by an independent
committee into fraud allegations will
not be issued until 2012, instead of the
year-end as planned.
Sino-Forest to
put off results
INDUSTRY
ROAD TRAFFIC (VEHICLE EMISSIONS)

(FIXED PENALTY) (ENGLAND) REGULATIONS 2002
Notice is hereby given that from 1st January 2012, the City of
London intends to issue Fixed Penalty Notices to drivers of vehicles
which are left idling unnecessarily. The Notices will be issued under
the Road Traffic Vehicle Emissions (Fixed Penalty) (England)
Regulations 2002.
It is already a requirement of Regulation 98 of the Road Vehicles
(Construction and Use) Regulations 1986, as amended, that drivers
switch off engines in parked vehicles. From 1st January 2012, if a
driver refuses to turn off an engine when requested to do so by an
authorised officer, a Fixed Penalty Notice will be issued, for which
the penalty will be 20. This will increase to 40 if it is not paid
within 28 days.
The City of London has been declared an Air Quality Management
Area for fine particulates (PM10) and nitrogen dioxide (NO2). Both
pollutants are harmful to heath at high levels, and are found in the
City at levels which exceed health-based air quality objectives.
Vehicle engines which are left running unnecessarily are a
source of both PM10 and NO2, and enforcement of the
legislation cited above is part of the overall effort being
made by the City of London to improve air quality.
Please see www.cityoflondon.gov.uk/air for further
information.
EUROPES economic weakness has
hurt trade, affecting the world econ-
omy, analysts at Fitch warned, as fig-
ures from the Organisation for
Economic Cooperation and
Development (OECD) yesterday
strongly suggested worse it yet to
come in the Eurozone, the BRICS
nations and the US.
Fitch raised concern about the
impact of the Eurozone crisis in its
global economic outlook.
Intensified market pressure and
fast changing political events, rein-
forces the view that the Eurozone
faces persistent problems with its
banking and sovereign debt crisis,
said the ratings agency.
It slashed its 2012 GDP growth
forecast for the currency area from
0.8 per cent last quarter to 0.4 per
cent now.
Slowing global growth as a
result has impacted on India and
Chinas growth forecasts, Fitch
reported, cutting 2012 forecasts
from 7.5 per cent to seven per cent
and 8.5 per cent to 8.2 per cent
respectively.
The OECDs leading indicators
include business sentiment, con-
sumer confidence and employment
expectations, and are used to esti-
mate economic growth relative to its
trend rate in six months time.
Every area covered by the OECD
recorded a slowdown prediction in
October, with the Eurozones indica-
tor registering a year-on-year fall of
5.1 per cent, a drop of 7.9 per cent in
Brazil, and India falling 8.7 per cent.
Those figures represent a slide
from a 4.2 per cent year-on-year fall
in the Eurozone in September,
minus 7.7 in Brazil and minus 7.7 in
India, indicating the situation is
deteriorating further.
When it comes to Britain, the indi-
cators are similarly gloomy, with the
indicators decline on a monthly
basis slowing only slightly from
minus 0.7 to minus 0.6, and annual-
ly declining to a 3.8 per cent drop.
This is the ninth successive
monthly decline, and highlights the
growing danger of a renewed reces-
sion, said Howard Archer, econo-
mist at IHS Global Insight.
OECD warns
euro slump is
going global
Halifax: Housing market will stay weak
WEAK economic growth and persist-
ent high unemployment will hold
down house prices through 2012,
Halifax warned yesterday in its hous-
ing market outlook.
Only record low interest rates will
help stop the market falling further,
the banks economists claimed,
although mortgage funding pressures
are expected to weaken this support.
Prices will keep rising in London,
according to separate data out today
from the Royal Institution of
Chartered Surveyors (RICS), but
remain stable or continue to fall else-
where in the country.
Sales activity increased for the third
month in a row, according RICSs sur-
vey, with a net balance of 14 per cent
of surveyors reporting a rise in sales in
November compared with nine per
cent the month before.
However, expectations of sales
growth are slowing a net balance of
five per cent predict expansion, down
from 17 per cent in October.
Halifax, too, forecasts stronger
prices in the south east and London, as
other regions economies are weaker,
relying more on public sector jobs.
The governments housing policy is
only expected to have an impact in the
longer-run.
The long-standing deficit between
supply and demand whereby the
rate of house building has failed to
match the rate at which new house-
holds are being formed has widened
in recent years as levels of house build-
ing have fallen to record lows, said
economist Martin Ellis.
Measures recently announced in
the governments housing strategy
should help to boost housing supply
over the longer term, but they are
unlikely to be sufficient to eliminate
the gap.
Low interest rates will continue to
have an impact payments for the
average new borrower have fallen
from 48 per cent of disposable income
in mid-2007 to 26 per cent in 2011
but the ratio of house prices to earn-
ings still above its long term average,
any price growth is likely to remain
weak over the coming few years, Ellis
predicted.
BY TIM WALLACE
WORLD ECONOMY
INDUSTRIAL output fell for the first

time in more than two years in India
in October as consumer demand
waned, adding pressure on the central
bank to ease monetary or liquidity
conditions, possibly as soon as Friday.
Production at factories, mines and
utilities plunged 5.1 per cent from a
year earlier the deepest drop since
March 2009. Septembers annual out-
put was revised marginally upwards to
1.99 per cent.
Indian factory
output plunges
INDIAN ECONOMY
BOOSTING energy efficiency is

good for business, and firms should
work more closely with the govern-
ment to cut costs and protect the
environment, the Confederation
for British Industry (CBI)
announced yesterday.
There is a business case for act-
ing on resource efficiency, and a
threat to our growth prospects if we
dont, said the CBIs Neil Bentley.
You need to be green and grow.
The industry body also hit out at
the government, accusing it of hav-
ing an incoherent overall strategy.
Too many different government
departments at too many different
levels are coming up with their
own ways of dealing with this prob-
lem, said Bently.
Were looking to the business
secretary and the EU commissioner
to give us the right policy frame-
work.
The CBI is urging businesses to
recognise the growing importance
of resource efficiency.
It is also pushing governments to
come up clear indicators to meas-
ure efficiency and targets to force
businesses and countries into line.
The CBI pointed to the European
Commissions low-carbon economy
2050 roadmap as an example.
The group also called on the gov-
ernment to help improve the over-
all investment environment to
drive resource efficiency, which it
says is key to transitioning to a
green economy.
CBI calls on
business to
save energy
THE UK jobs market is set for a
bleak midwinter, a survey
reveals today, after hiring
expectations fell to their weak-
est level since the last recession
three years ago.
Yet hundreds of thousands
of vacancies exist for people
with the right skills or who are
willing to retrain, according to
Manpower, which conducts the
widely-regarded survey.
Employers continue to look
for skilled and motivated candi-
dates who show a real desire
and determination to work,
said Manpowers Mark Cahill.
People who are willing to
learn new skills are the ones
who will succeed in this chal-
lenging environment. Those
with a refuse-to-lose attitude
will find work.
The survey revealed a surpris-
ing east-west divide in the UK
(excluding Scotland), with east-
ern regions registering positive
employment outlooks, com-
pared to negative outlooks in
their neighbours to the west.
The south east is plus four
per cent and London plus five
per cent despite a wave of
recent redundancies in the
financial sector, the report
said. Yet in the financial and
business sector, employers have
gone from being the most
optimistic at the start of 2011 to
being among the most pes-
simistic, the survey found.
Employers are most opti-
mistic in the north east, despite
high levels of unemployment.
Nationally the outlook has
flat-lined, with eight in 10
employers set to freeze staff lev-
els in the next quarter.
Brits told to retrain for new jobs
News
PENSIONERS LIVING STANDARDS DIP
HALF of pensioners have had to dip into savings to maintain their living standards,
and a quarter have taken a hit to bail out their adult children, according to research
out yesterday from MetLife. If you are on a fixed income the effect of an unbudgeted
financial shock like bailing out adult children is magnified, said MetLifes Dominic
Grinstead.
Picture: GETTY
BY TIM WALLACE
REGULATION
BY JULIAN HARRIS
EMPLOYMENT
BY TIM WALLACE
UK ECONOMY
NEWS | IN BRIEF
Japans consumer morale drops
Japanese consumer confidence in
November worsened from the previous
month, a Cabinet Office survey showed
yesterday, suggesting that turmoil
from Europe's debt crisis and slowing
global growth are weighing on senti-
ment. The survey's sentiment index for
general households, which includes
views on incomes and jobs, was 38.1 in
November, down from 38.6 in October.
The Japanese Cabinet Office down-
graded its assessment to say that con-
sumer confidence is almost flat.
Previously, it had said the pace of pick-
up in consumer confidence was moder-
ating. Any reading below 50 suggests
consumer pessimism.
ANALYSIS l Europes economy is slowing
Composite
leadingindex
2001 2003 2005 2007 2009 2011
100
105
110
95
90
Barclays
Barclays corporate and employer solu-
tions business has recruited Paul
Wilson as head of employee benefit
consulting and Chris Mowatt as head
of the banks global stock and reward
services division. Wilson joins from St
Jamess Place Wealth Management
and Mowatt moves from Morgan
Stanley Smith Barney.
Towers Watson
The professional services company
has hired Claire Farrelly as a director
in its risk consulting and software
business. Farrelly joins the companys
Reigate office from KPMG, where she
led two of the UK regional actuarial
consulting teams.
Lombard Odier
Lombard Odier Investment Managers
has appointed Jan Straatman to the
newly created position of chief invest-
ment officer (CIO), effective from 1
March 2012. Straatman joins from
ING Investment Management, where
he was global CIO.
Aviva
Paul Sahota, the former head of insur-
ance at specialist risk consultancy
Avantage, has been confirmed as the
new audit director at Aviva. Sahota,
who previously held senior risk advi-
sory roles at AXA, AIG, Deloitte and
KPMG, will lead the global audit func-
tions response to the emerging
Solvency II regulation.
Rockspring
Rockspring Property Investment
Managers has hired Ben Lonsdale as
senior research analyst. Lonsdale
joins from DTZ, where he was an eco-
nomics consultant.
Avoca Capital Holdings
Tarek Saber and Jasper Van Ingen, who
worked together at Dutch asset manag-
er APG, have joined the investment man-
ager as chief executive of convertible
bond strategies and senior portfolio
manager respectively. In addition,
Jonathan Sharkey, previously chief oper-
ating officer at Lydian Asset
Management, joins as head of operations
and Darren Carter, former chief execu-
tive of KBC Financial Products and non-
executive chairman of Peel Hunt,
becomes a partner and a co-investor in
Avocas new convertible bond venture.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Wall Street slides
on European fears
U
S stocks tumbled yesterday, as
concerns about Europe
returned to the forefront
after major credit ratings
agencies warned that European lead-
ers had not done enough to tackle the
regions debt crisis.
The decline was broad. All ten S&P
industry groups ended in negative
territory, and most dropped more
than one per cent. Banks took the
biggest hit, while technology shares
also fell after Dow component Intel,
the worlds largest chip maker, low-
ered forecasts for quarterly revenue.
After initial elation on Friday over
an agreement reached at an EU sum-
mit to enforce tighter budget control
over the Eurozone, the mood turned
yesterday as more doubts arose over
whether the measures would be
enough to quell the debt crisis.
The pact that was agreed upon by
European officials still has a long way
to go in order to come to fruition, and
that leaves the market open to riot,
said Mark Luschini, chief investment
strategist at Janney Montgomery
Scott.
Fitch Ratings said failure by
European Union leaders to come up
with a comprehensive solution to
the regions debt crisis has increased
short-term pressure on debt ratings of
Eurozone countries.
Investors in Europe gave their ver-
dict by spurning Spanish and Italian
debt, causing borrowing costs to rise.
The yield on Italys benchmark 10-
year note again came within range of
seven per cent, seen as a danger zone,
but recovered to close at 6.6 per cent.
Were seeing that sentiment sur-
face in Italian bond yields, and that
suggests the market is still highly
sceptical of any solution to the risk of
significant default that could be
brought forward in the coming days,
Luschini said.
US banks were among the worst
performers on renewed concern that
problems in Europes financial sys-
tem could spill over to US institu-
tions. The S&P financial sector was
down 2.6 per cent while Bank of
America slumped 4.7 per cent and
JPMorgan Chase lost 3.4 per cent.
Sentiment over Europe had been
more positive, helping the S&P to a
second week of gains last week, but
volatility remains high as markets
continue to be dictated by headlines.
The Dow Jones industrial average
was down 162.87 points, or 1.34 per
cent, at 12,021.39. The Standard &
Poors 500 Index was down 18.72
points, or 1.49 per cent, at 1,236.47.
The Nasdaq Composite Index was
down 34.59 points, or 1.31 per cent, at
2,612.26.
B
ritains FTSE 100 fell in light vol-
ume yesterday, with investors
selling riskier banking and min-
ing assets as analysts concluded
that the lack of detail in a European
deal on fiscal union left question
marks over its long-term plausibility.
Londons blue-chips fell 101.35
points, or 1.8 per cent, to 5,427.86,
erasing Fridays 0.8 per cent rise, as
analysts said there was far more work
for European leaders to do before
Europes debt crisis could be solved.
Analysts at RBS, Brewin Dolphin
and Credit Suisse said the lack of
detail left doubts over Eurozone fiscal
union, which in turn could prevent
more meaningful support from the
European Central Bank.
There are no details on any of the
key issues (of the European agree-
ment) just lots of promises. And his-
torically, follow-through has
disappointed, Credit Suisse said.
Standard and Poors credit rating
agency also warned that the
European Union will need more sum-
mits to resolve its debt turmoil and
time is running out.
Banks were the main drag on a
FTSE 100 index that has remained
largely between 5,400 and 5,600 since
the start of December.
Royal Bank of Scotland shed 6.5 per
cent as the Financial Services
Authority (FSA) reported into the near-
collapse of the bank in 2008. Seymour
Pierce analyst Bruce Packard, who has
a reduce rating on RBS, said he did
not think the report altered the
investment case for the bank.
UK mining shares fell, with worries
about Europe more than offsetting
strong copper import data from
China. Kazakh miner ENRC dropped
7.4 per cent after a weekend news
report citing talks with the Serious
Fraud Office on corruption allega-
tions revived scepticism about its cor-
porate governance.
Inmarsat shed 5.3 per cent on con-
cerns over the wireless service run by
partner LightSquared.
Across the Atlantic, Wall Street
indices were lower as the US joined
the post-summit sell-off, and as Intel
said fourth-quarter results would miss
its forecast.
The demand for stocks offering
shelter from the economic storm was
the main reason the UKs benchmark
index did not register a steeper fall.
Undeniably the post-bubble land-
scape is a challenging one ... An
extended period of depressed eco-
nomic activity and a low average
returns environment appear
inevitable, said Jeff Munroe, chief
investment officer at Newton, which
has about 43.4bn of assets under
management.
We believe growth opportunities
lie in selective emerging economies
especially those with positive demo-
graphics and low debt-to-GDP ratios,
as well as in the technology, energy
and healthcare sectors.
Defensive stocks rose: drugmaker
GlaxoSmithKline climbed 0.3 per cent
and drinks firm Diageo one per cent.
Imperial Tobacco gained 0.5 per
cent, also boosted by the quashing of a
112m Office of Fair Trading penalty
imposed for allegedly restricting com-
petition.
SABMiller outperformed the FTSE
100 as a defensively-perceived brewer,
and was boosted by an upgrade to
neutral from underperform by
Exane BNP Paribas.
With stock valuations beaten down
on the back of the global financial cri-
sis, UK-listed companies are proving
attractive. Mothercare rose 4.6 per
cent, after the Sunday Telegraph said
buyout firm Cinven was assessing an
150m-plus takeoverof the retailer.
FTSE tumbles as doubts over
Eurozone deal take their toll
THELONDON
REPORT
THENEW YORK
REPORT
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Associated British Foods
1,140
1,120
1,100
1,080
1,060
Oct Nov Dec
p
1,085.00
12 Dec
ASSOCIATED BRITISH FOODS
Panmure Gordon rates the owner of Silver Spoon and Twinings as a buy
and said it remained confident of its 14 per cent earnings per growth fore-
cast for the year. ABF last week confirmed that trading for the first two
months of the year is in line with expectations and that it will benefit from
good sugar pricing this year. The broker said with the shares having drift-
ed lower, they remain attractive.
ANALYSIS l Ashmore Group
400
380
360
340
320
Oct Nov Dec
p
327.50
12 Dec
ASHMORE GROUP
Goldman Sachs said it expects a solid 2012 performance from the financial
services group Ashmore and reiterated its neutral rating, with a target price
of 380p. Consensus earnings forecasts for Ashmore have declined 14 per
cent from their peak in October, which the US bank said was due in part to a
dampening in near-term performance fee expectations following volatility in
financial markets. It said expectations are now at more realistic levels.
ANALYSIS l Aegis Group
140
135
130
125
120
Oct Nov Dec
p
137.40
12 Dec
AEGIS
Nomura has reiterated its positive view on Aegis and rates the marketing
services company as a buy with a target price of 175p. The bank said the
firm continues to be the best-performing agency in 2011 both in terms of
fundamentals and share price performance and predicts organic growth
of 7.6 per cent for the full year 2011, well ahead of its peers. Nomura also
highlighted Aegis clear acquisition strategy.
p
30Sep 12Sep 20Oct 9Nov 29Nov
5,800
5,000
5,200
5,400
5,600
ANALYSIS l FTSE
5,427.86
12 Dec
Cushman & Wakefield
The global property consultant has expanded its
EMEA sustainability team by appointing Justy
Mathew as sustainability analyst, based in
London. He joins from Pensions & Investment
Research Consultants, where he worked on cor-
porate social responsibility. Reporting to Andries
van der Walt, head of sustainability for EMEA,
Mathew will deliver sustainability consultancy
for corporate occupiers and investor clients
alongside Alison Matthews, who joined as sus-
tainability advisor earlier this year.
News
M
UCH has been written in recent weeks
about the question of safeguarding
the high standards of Londons listed
equity market in the face of a spate of
listings of international commodity stocks.
Many of these articles assume it is the role of
the UK Listing Authority (UKLA) to insist on full
compliance with the Corporate Governance
Code, or to use the free float requirement for all
listings (which sets the proportion of shares
freely available for trading) as a basis for de-list-
ing or refusing to list certain companies or
even, in some cases, that the UKLA should regu-
late inclusion in relevant stock indices.
This misunderstands the UKLAs role. It also
overlooks the benefits the UK derives from pro-
viding markets that are attractive for overseas
companies and through which investors can
choose (or not) to invest in those companies.
The UKLAs role is not to require compliance
with the Corporate Governance Code. The list-
ing rules require companies to disclose
whether they comply with the Codes princi-
ples, and if not, to explain why not. That com-
ply or explain approach has consistently had
strong support from both companies and
investors. The Codes contents are overseen by
the Financial Reporting Council, not the UKLA.
It is also a misperception that the UKLA can
use its free-float requirements as an arbiter of
whether a stock is suitable for admission to list-
ing. These requirements derive directly from
European law, and focus on liquidity alone.
There has been no suggestion to date that the
companies in question have been admitted to
listing without sufficient liquidity to ensure
the formation of a proper secondary market.
The UKLAs powers do include the possibility
of taking action for inaccurate market disclo-
sure that breaches the listing or disclosure
rules. And it is also worth noting that the relat-
ed party regime which applies to the compa-
nies because of their premium listings here has
had an important role, enforced by the UKLA, in
ensuring minority shareholders are protected in
respect of transactions where controlling share-
holders have conflicting interests (as the recent
ENRC decision in relation to Shubarkol shows).
These related party requirements sit alongside
a broader set of investor protections within the
UKLAs premium listing regime that include the
class test regime, where large transactions are
automatically put to shareholder vote, and the
sponsor regime. This latter allows the UKLA to
operate a risk-based approach to regulation
deferring to the sponsor duties of diligence, doc-
ument preparation and director briefing which
it would be too onerous for the regulator to per-
form. This is not to suggest that the UKLA is pas-
sive in its role; merely that its regulatory
responsibility is also borne by sponsors, who are
themselves subject to high degrees of UKLA
supervision.
The UKLAs document vetting role is in itself
an important piece of investor protection, but it
has as a guiding principle the idea that clear and
prominent disclosure provides sufficient
investor protection against most risks. In many
cases the UKLA seeks to put the investor in an
informed position of choice, by ensuring key
risks are drawn out and clarified for an investor,
rather than deciding for the market as a whole
which companies or investments are, or are not,
suitable for investment.
The principle of investor choice, as promoted
by the UKLA, can be called into question when
investors are perceived as being forced into buy-
ing stocks by index-tracking mandates whose
parameters may be drawn too tightly, for exam-
ple, tracking the components of the FTSE 100.
While this is a charge that is frequently laid at
the door of the UKLA, the UKLA has no input
into index requirements and cannot have regard
to index rules in considering approval of listings.
This narrow question is being addressed in
part by FTSE through its consultation on
whether to modify its own selection criteria to
exclude companies in the FTSE 100 which, for
example, fail to meet a specified free float
threshold.
However, the recent discussions have opened
up a far larger debate than is likely to be resolved
by changes to FTSEs free float requirements and
involves many of the long-standing foundations
of the UKs vibrant equity market. This broader
debate draws in questions of whether the com-
ply or explain basis of the FRCs Corporate
Governance Code continues to meet the needs of
investors, and whether the current investor pro-
tections in the UKLAs listing regime should be
further strengthened. This debate will also play
out against the backdrop of the passage of the
Financial Services Bill, where broader questions
still about the balance between international
competitiveness and consumer protection con-
tinue to be discussed.
Given the importance of what is at stake, this
broader debate should be welcomed by all mar-
ket participants, but it is essential that this
debate takes place on a more fully informed
basis than has been the case to date.
Andrew Tusa is the chairman of the Listings
Authority Advisory Committee (LAAC).
26
The Forum
CITYA.M. 13 DECEMBER 2011
In many cases, the UKLA
seeks to put the investor in a
position of informed choice
Critics of listing rules in the
UK should bear in mind how
the system actually works
cityam.com/forum
ANDREW TUSA
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
27
Utopian dreams
of political union
leave no place for
stability in the EU
Another summit,
another letdown
by Europes elite
A
USTAN Goolsbee, former chairman of
President Obamas council of econom-
ic advisers, is hardly a virulent
eurosceptic. However, his assessment
of the prospects of the common currency is
very stark: in his view, as long as European
leaders remain wedded to a utopian vision of
political union in Europe, they will have to
keep fighting off fiscal and financial panics.
But that cant go on forever.
Last weeks summit of European leaders
was supposed to deliver a definitive solution
to the Eurozones financial woes. It didnt, and
it would be preposterous to blame David
Cameron for that outcome. The crucial ele-
ment of last weeks fiasco is the commitment
of European political leaders to an unwork-
able model for the Eurozone.
The main conclusion of the summit is
strengthened fiscal governance within the
Eurozone or rather an illusion thereof. In
theory, no future structural deficits will be
allowed, and violations of the 3 per cent
deficit rule would trigger automatic sanc-
tions. Furthermore, the European
Commission is to be empowered to interfere
with the budgeting process in individual
member states whenever fiscal performance
is unsatisfactory.
Of course, these commitments are not cred-
ible and are going to fail, for the same reason
as most New Years resolutions do. Just as
youre not going to lose weight by merely say-
ing so, Europe is not going to solve its fiscal
and structural problems by fiat. After all, the
Eurozone already has a set of fiscal rules,
which have been ignored by most member
states for a decade.
But there is another, deeper flaw, to the
agreement reached on Thursday night. The
periphery of the Eurozone has an immediate
solvency problem, which is not going to be
solved by better fiscal rules. And the
Eurozones approach to this solvency problem
is just as unconvincing as before. Neither the
EFSF nor the ESM are serious mechanisms for
solving the problem: their whole point is to
mask the fact that there is no one willing to
pay for the debts of the Eurozones periphery.
What if last weeks summit had agreed to
the creation of a closer fiscal union? A solu-
tion to the problem in the form of fiscal trans-
fers would require that the Germans commit
to pay not only for the existing Greek debt but
also that it will always provide the ailing
periphery with funds in the future. In other
words, the fiscal union would mean trans-
forming the peripheral countries into the
equivalent of those parts of the UK perma-
nently dependent on fiscal transfers from
London and the southeast.
Europe will not become a well-functioning
union. By now, everyone should see very clear-
ly that it lacks the elements that would make
it work as a monetary union. It also lacks the
elements that would make it work as a politi-
cal union common electorate, shared narra-
tive and moral like-mindedness. And unless
European political elites renounce their ideo-
logical commitment to this utopia, we are all
going to get badly hurt.
Dalibor Rohac is the deputy director of economic
studies at the Legatum Institute. Follow him on
Twitter at @daliborrohac.
Deutsch courage
[Re: David Cameron was right to
say No, yesterday] Believe me:
most people here in Germany
are very concerned about that
elite project called . Once more
in history, the UK is doing the
right thing. It seems that
German leaders havent learned
anything from the past. See the
readers comments in German
newspapers: theres deep
respect for Camerons decision. I
wish we had one like him.
Rolf Heine
Vetting bulldogs
[Re: David Cameron was right to
say No, yesterday] Ive been real-
ly surprised how people (both Jo
Public and political commenta-
tors) have so quickly jumped to
binary conclusions about whether
the veto was good or bad. Since
Friday, I havent heard anyone
quantify and set out the pro and
con of Camerons decision in
order for the nation to have a
rational and less British bulldog
approach to the euro crisis.
Ajit Madan
Speak your mind
The Forum is open for you to
take part. Got a sharp comment
on one of todays columns or
rapid response topics? Do you
have another subject relating to
business and the economy you
want to share your opinion on?
We want to hear your views.
Readers are invited to comment
on the web: cityam.com/forum;
by email: theforum@cityam.com;
and on Twitter: @cityamforum.
The best responses will be
reprinted in The Forum.
RAPID RESPONSES
DALIBOR ROHAC
BY ANTHONY J. EVANS
The Forum
W
HEN looking at
i nves t ment
data during the
recent reces-
sion two key things
emerge. The first is that
UK investment (or Gross
Fixed Capital Formation)
has not fully recovered
(see top chart, below). It did bounce back, but once
more the growth rate is negative.
However, to understand what is going on, its impor-
tant to look beyond the headline figure, and study the
composition of investment.
The second key lesson from the output data is that
the recession saw a massive shift from private invest-
ment spending to government spending (see bottom
chart, below).
GFCF is comprised of the sum of business invest-
ment, general government, public corporations, and pri-
vate sector dwellings. The chart shows how private
investment (business investment and private sector
dwellings) was mitigated by increases in general gov-
ernment investment.
The Keynesian view is that governments can boost
aggregate demand with government spending when
investment is too low. But there are well known prob-
lems with this. Put simply, 1m of government spend-
ing is not the same thing as 1m of private spending.
Chinese ghost cities have the potential to increase GDP,
but at the expense of genuine economic development.
When private sector investment declines, then the
reasons need to be identified and a solution found. The
key policy question needs to be why arent businesses
investing? Attempting to offset it with government
spending is just an accounting deception. And too
much government intervention can be the underlying
Government spending
wont fix the economy
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
ANALYSIS l Private v Goverment investment
07
Q1
07
Q3
08
Q1
08
Q1
09
Q3
09
Q3
10
Q3
10
Q3
11
Q1
39.20
58.80
19.60
0.00
-19.60
Private investment
General government
ANALYSIS l Gross Fixed Capital Formation
97
Q1
98
Q2
99
Q3
00
Q4
02
Q1
03
Q2
04
Q3
05
Q4
07
Q1
08
Q2
09
Q3
10
Q4
10.00
20.00
0.00
-10.00
-20.00
cause, not the cure through high tax rates, burden-
some regulations and policy uncertainty.
Successive interventions destabilise the climate of
investment, exposing the folly that government can
simply step in and replace it. The only way forward
is to focus on reducing barriers to business. It is pro-
duction that gives us the power to consume, and it is
private sector production that needs to recover.
Anthony J. Evans is Associate Professor of
Economics at Londons ESCP Europe Business
School, and Fulbright Scholar-in-Residence at
San Jose State University. anthonyjevans.com
Marius Hampden is the 2011 SG Market Master
A
FTER four weeks of fierce com-
petition which saw over
290m in virtual money trad-
ed across the range of Societe
Generale Covered Warrants, Turbos
and Super10s, the SG Market Master
Virtual Portfolio Challenge is now
over, and we are pleased to announce
Marius Hampden as our overall cham-
pion.
In just four weeks, Marius gen-
erated a highly impressive return
of over 260 per cent. And he did it
with just one trade. Commenting
on what drove his winning strate-
gy, Marius said: I came into this
challenge having learnt three
essential lessons in Societe
Generales previous ETF Master chal-
lenge: buy only what you know,
research and understand all the
available data and stand by your con-
viction.
Marius started a little later than
many. He explains that on joining the
challenge he was immediately
struck by the huge choice of products,
and initially felt out of my depth. At
this stage, the leaders had already
amassed gains of 75 per cent, but this
Covered Warrants, Turbos and Super10s are leveraged products. The underlying assets may be volatile and both gains and losses could be proportionately greater than those incurred by investing
directly in the underlying asset. Covered Warrants, Turbos and Super10s are issued by Societe Generale Acceptance, a member of the Societe Generale group of companies. Any failure of Societe
Generale Acceptance to perform obligations when due may result in the loss of all or part of an investment. Covered Warrants, Turbos and Super10s are not suitable for everyone. Investors capital
is at risk. Investors should not deal in these products unless they understand their nature and the extent of their exposure to risk.
Marius wins
membership to
DreamCarHire.com
Picture: REX
ADVERTISEMENT FEATURE
How some super
traders turboed
into the fast lane
did not shake Mariuss resolve to par-
ticipate in the challenge. However,
first he wanted to familiarise himself
with the products: I found the edu-
cational videos and slides very help-
ful, and the entire experience an
effective way to learn.
The inspiration to trade came on
24 November when Marius read that
the FTSE had fallen for 9 consecutive
days the most since 2003. This was
the news he had been waiting for.
Marius knew the FTSE well and sud-
denly the challenge was not so daunt-
ing. Now it was time for principle
two: do the research. Marius identi-
fied the SY03 to SY08 series of out-the-
money FTSE Call Warrants with
expiry dates in mid-December. This is
quite an aggressive strategy as these
warrants were short-dated and need-
ed the FTSE 100 to rise before they
would be in the money. To compen-
sate for the additional risk, these
products offer strong gearing and the
chance to really boost returns. Marius
eventually selected SY04, a Call
Warrant with a 5,500 strike price
which expired on 16 December, as he
felt the potential for the FTSE reach-
ing 5,500 was a realistic target.
Having checked all the available
data like spreads and gearing he
bought in with 100 per cent of avail-
able funds. Marius does stress he
wouldnt have contemplated invest-
ing everything on a single instru-
ment for himself, never mind a client
in a real trading situation. But for the
purposes of the competition it made
sense to go for it, and he bought
1,851,629 units for 5.4p each.
Despite dropping initially, Mariuss
strategy paid off and lesson number
three, stand by your conviction,
proved true as SY04 continued to rise.
With just days to go and a clear lead,
Marius took the brave move to consol-
idate his position and he sold back
the full position at 19.46p each, mak-
ing a profit on his portfolio of
260,315.04 after the virtual trading
fees had been deducted. When asked
how Marius found the challenge, he
was very complimentary, saying:
While these products would
undoubtedly form part of a wider
investment strategy, I do see them,
when properly researched, as sitting
comfortably as a cost effective means
of both leveraging returns and miti-
gating loss. I am delighted with the
prize and would like to extend my sin-
cere thanks to everyone at SG for the
initiative.
THE RUNNERS UP
Mariuss closest rival, Rhys Davies,
also restricted his trading to the range
of Covered Warrants, focusing main-
ly on the FTSE 100, but also including
Barclays and Antofagasta. Rhys exe-
cuted a short-term view, choosing
short-dated (December 2011 expiry)
and only just out-the-money Covered
Warrants to take full advantage of the
recent market volatility. Rhys selected
products with gearing of up to 30
times, which meant that profits or
losses on his chosen underlying assets
were magnified by 30 times. Rhys
explains how he adapted his strategy
to limit the impact of time decay
where the warrants price falls
because it is nearing expiry: I tried
not to leave very short-dated positions
in place for too long as the loss of
time value could be significant. With
longer term views, two to four weeks,
I chose longer dated instruments
say, six months where I was able to
stay invested for a longer period of
time with less loss of time value. The
strategy was successful as Rhys man-
aged a fantastic profit of 191,558.25
in the four week challenge.
Third place went to Tolga Halil
from Icap who generated a profit of
182,821.61 despite being completely
new to the products. Tolga explained
that he played two main views during
the challenge: US strength and the
European crisis. This he expertly
implemented with a series of Call
Warrants on the Dow Jones and FTSE
100 indices, and Put Warrants on
euro-dollar and sterling-dollar
exchange rates. Although Tolga
admits that he had a bit to learn
about the products pricing, his
strong performance in the challenge
has inspired him to look at Covered
Warrants in his real portfolio.
Shaun Pacey finished fourth after a
storming run on the final day, plac-
ing 40 trades and making a stagger-
ing 72,462.07 profit in a single day
finishing with an impressive return
of 168,302.49. Shaun had led the
rankings for most of the challenge,
but had it not been for his impressive
late surge, he would have left empty
handed. The majority of his trades
were on the FTSE 100 across a combi-
nation of Covered Warrants and
Turbos, but he included some tactical
trading on the Nikkei, CAC 40 and
Barclays when the opportunities
arose. Shaun said that his strategy
was all about short-term momen-
tum, combined with strict discipline
on stops. My big regret was that I was
in cash, and at lunch, when the vari-
ous central banks announced their
co-ordinated liquidity moves that
cost me dearly.
Kaustubh Misra who finished in
fifth place with a return of
164,527.63 was our most prolific
trader in the top five, posting 240
trades during the four weeks.
Interestingly, Kaustubh stuck to
Turbos entirely; trading LONG and
SHORT turbos to take maximum
advantage of the rises and falls in the
FTSE 100. Kaustubh explained his
preference for Turbos: For me,
Turbos are the best products as there
is no time decay and if the strike is far
enough, one can hold winning posi-
tions for longer periods. Turbos cer-
tainly are suitable for traders like
Kaustubh who are looking to execute
a short-term strategy, whereas
Covered Warrants tend to be more
pertinent for medium to long-term
strategies.
Like Marius, Kaustubh was very dis-
ciplined: There is nothing more
important than cutting losses in trad-
ing, particularly trading in leveraged
products. I used some long-term and
short-term support and resistance lev-
els of the FTSE to enter into any
trades. Then, if the trade did not go
into a positive position immediately
and stay that way, I would choose my
stop loss level, and cut the trade at
that point, no matter how much I
lost. However, if I had a positive result,
I would take profit once the trend
stops. This approach is indeed used
by many successful investors in listed
products.
GENERAL TRENDS
Over 7,000 trades were placed
between when Market Master opened
on 7 November 2011, and when it
closed on 5 December. Over 500 sepa-
rate instruments were traded in total
but 34 per cent of trades were
polarised around four particular
Turbos.
There is no surprise that 64 per
cent of trades were on the FTSE 100,
and that gold, the Dax and the Dow
Jones Index were the next most popu-
lar underlying assets given the flight
to quality that weve witnessed for the
last few months.
We would like to thank everyone
that took part. The response was over-
whelming, and we sincerely hope
that everyone enjoyed the challenge.
But more importantly, that you
learnt something useful about
Covered Warrants, Turbos and
Super10s.
If youve enjoyed the challenge and
find yourself wanting to know more,
you can continue to use the SG
Market Master website as your own
demo trading site. The educational
guides and downloads and videos will
remain on the website so that you can
continue to learn. Plus, you can find
more educational materials, free sem-
inars, a weekly email and our quarter-
ly magazine online at
www. sgl i stedproducts. co. uk.
Everything is completely free and you
may find it a useful way to research
and learn about the huge variety of
products on offer.
TOP 10 MOST POPULAR PRODUCTS
EPIC Product type Underlying Strike Value traded
T380 SHORT Turbo FTSE 100 5,800 41,929,531.27
T381 LONG Turbo FTSE 100 5,000 32,163,614.24
T382 LONG Turbo FTSE 100 5,200 18,042,051.93
SY05 Call Covered Warrant FTSE 100 5,500 9,430,885.41
T365 SHORT Turbo FTSE 100 5,900 7,925,987.16
SX79 Put Covered Warrant FTSE 100 5,500 7,726,071.24
SY16 Put Covered Warrant FTSE 100 5,700 6,339,616.47
SR29 Call Covered Warrant DJIA 50 12,000 5,880,808.02
SY03 Call Covered Warrant FTSE 100 5,300 5,683,428.26
SY14 Put Covered Warrant FTSE 100 5,400 4,590,798.94
Source www.sgmarketmaster.co.uk. This is not a recommendation. This is for illustrative purposes only
MOST POPULAR UNDERLYINGS
Underlying traded value %
FTSE 100 INDEX 188,443,118.49 64.83
GOLD 7,938,535.81 2.73
DAX INDEX 7,878,726.46 2.71
DJIA 50 5,880,808.02 2.02
FOREX EUR USD 5,456,965.93 1.88
EURO STOXX 50 Net Return 5,342,044.95 1.84
DOW JONES INDEX 5,330,229.33 1.83
BARCLAYS 4,784,627.16 1.65
S&P 500 INDEX 3,690,303.75 1.27
XSTRATA PLC 3,578,148.28 1.23
Source www.sgmarketmaster.co.uk. This is not a recommendation. This is for illustrative purposes only
T
HE use of moving day averages is a
very simple idea. By taking an aver-
age of the price over a certain period
of time, you can concentrate on
long-term trends.
The most common time frames used by
traders are the 200-day, 100-day, 50-day
and 10-day moving averages. The shorter
the time span, the more sensitive it is to
price changes, says OSullivan. If youre
looking for short-term trades, look to use
some of the shorter term moving aver-
ages. Conversely, the longer the time
span, the less sensitive that it is to sudden
changes and moves.
So how should they be used? As with all
indicators, moving day averages are not a
cast-iron way to predict the direction that
will be taken by an asset. However, when
used in conjunction with other indicators,
it can help to increase the probability of
your trade being successful.
There were two great trades using
moving averages that we flagged up on
our twitter feed in crude and gold in the
last couple of days, says OSullivan. For
crude, when it tried to rally back to a
trend line it had fallen below last
Thursday, it was now facing the resistance
of the 50-day and 100-day moving aver-
ages, which were both around the $101
level. Selling here on Thursday with a $1
stop loss would have seen you make over
300 points profit by Monday afternoon,
says OSullivan.
The second move was seen in gold as it
broke below $1,680 (see chart, right). At
10am, we picked out the long-term 150-
day exponential moving average at 1,660
as a likely target it was hit by 3pm, says
OSullivan. This could have been a good
level to close any short positions entered
in the morning or even to enter a long
trade with a relatively tight stop loss.
Craig Drake asks Ian
OSullivan of Spread
Co for his guide to
moving day averages
Moving day averages help to give you an accurate measure of the direction of an asset Picture: REX
Wealth Management| Contracts for Difference
Filtering out the noise
to help measure trends
W
ERE rapidly approaching the year-end and
analysts are busy finessing and publishing their
2012 outlooks. With just a couple of weeks to
go before we can consign 2011 to the dustbin
of history, it is probably useful to have a brief look back at
how some of the major financial markets behaved over
the past twelve months.
All-in-all, it hasnt been a good year for buy-and-hold
equity investors. The S&P 500 is now pretty much
unchanged. Yet it has held up better than many other
global indices. The FTSE 100 is down around 7 per cent;
the German Dax has fallen 14 per cent while the
Japanese Nikkei and Chinas Shanghai Composite are
down 15 per cent and 18 per cent respectively.
However, it is interesting to contrast the S&Ps perform-
ance with that of three other major US indices: both the
Dow Jones Industrial Average and the Nasdaq 100 are
around 4 per cent higher since the start of the year. Yet
the broader-based Russell 2,000, where the average
market capitalisation of its constituents is relatively
small at around $1.25bn, has fallen over 6 per cent.
It may have been a better year for active traders
given some of the extraordinary market swings weve
experienced, especially since the end of July. The diffi-
culty has been calling the turns, as so many of the
moves have been driven once again by political head-
lines and the actions of central bankers. This has made
life much more difficult for traders who rely on technical
analysis, as major policy decisions or a lack of them
have tended to trump charts and studies.
Will 2012 prove to be any different? Traders are
keeping a close eye on 200-day moving averages (DMA)
for a number of indices. Both the S&P and FTSE contin-
ue to knock up against their 200-DMAs at 1,260 at
5,630 respectively, although the Dow and the Nasdaq
have both cleared their own. Meanwhile, European poli-
cymakers have made their move towards fiscal integra-
tion. Stock market bulls are hoping that this will
persuade the ECB to step up to the plate as lender of
last resort. But time is running out, and the danger is
that the ratings agencies decide that they can no longer
hold off from downgrading European banks and their
sovereigns.
WERE BACK TO
SQUARE ONE
FOR S&P 100
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
Experience Binary Brilliance Visit gftuk.com/binaries or freephone 0808 208 5192
2011 Global Futures and Forex, Ltd. All rights reserved. CD03UK.181.100711
facebook.com/gftmarketsuk twitter.com/gftuk
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$/oz
150-day MA
05 03 04 03 02 02 04 04 04 01 31 31 30 29 Jan2012 03 Jan2011
1,900.00
1,300.00
1,450.00
1,600.00
1,750.00
ANALYSIS l Spot gold
100-day MA
30
Wealth Management
LON GD ONCE FIX AM...........1680.00 -32.00
SILVER LDN FIX AM ..................31.25 -0.96
MAPLE LEAF 1 OZ ....................33.60 1.19
LON PLATINUM AM................1492.00 1.00
LON PALLADIUM AM...............668.00 3.00
ALUMINIUM CASH .................2066.00 7.00
COPPER CASH ......................7800.00 0.00
LEAD CASH...........................2092.00 -26.00
NICKEL CASH......................18320.00 195.00
TIN CASH.............................20245.00 -155.00
ZINC CASH ............................1985.00 -20.00
BRENT SPOT INDEX................108.36 -0.79
SOYA .....................................1107.00 -25.50
COCOA..................................1936.00 -32.00
COFFEE...................................224.65 -1.05
KRUG.....................................1726.10 -48.80
WHEAT ....................................141.75 -0.50
AIR LIQUIDE........................................91.00 -1.25 100.65 80.90
ALLIANZ..............................................74.24 -5.15 108.85 56.16
ANHEUS-BUSCH INBEV ....................44.09 -0.12 45.61 33.85
ARCELORMITTAL...............................13.19 -0.95 28.55 10.47
AXA......................................................10.45 -0.72 16.16 7.88
BANCO SANTANDER...........................5.72 -0.25 9.20 5.05
BASF SE..............................................51.61 -2.29 70.22 42.19
BAYER.................................................45.82 -1.56 59.44 35.36
BBVA......................................................6.26 -0.26 9.17 4.94
BMW ....................................................52.52 -1.28 73.85 43.49
BNP PARIBAS.....................................30.87 -1.64 59.93 22.72
CARREFOUR ......................................17.83 -0.69 31.98 14.66
CRH PLC .............................................13.35 -0.15 17.40 10.28
DAIMLER.............................................33.06 -1.10 59.09 29.02
DANONE..............................................47.70 -0.16 53.16 41.92
DEU.BOERSE OFFRE ........................41.47 -0.33 55.75 35.46
DEUTSCHE BANK..............................27.97 -1.62 48.70 20.79
DEUTSCHE TELEKOM.........................9.02 -0.27 11.38 7.88
E.ON.....................................................17.00 -0.81 25.54 12.50
ENEL......................................................3.07 -0.09 4.86 2.78
ENI .......................................................15.69 -0.41 18.66 11.83
FRANCE TELECOM............................12.27 -0.27 16.65 11.12
GDF SUEZ ...........................................20.71 -0.64 30.05 17.65
GENERALI ASS...................................11.95 -0.49 17.05 10.34
IBERDROLA..........................................4.87 -0.17 6.50 4.29
INDITEX ...............................................62.54 -0.86 69.40 50.92
ING GROEP CVA...................................5.36 -0.47 9.50 4.21
INTESA SANPAOLO.............................1.20 -0.07 2.47 0.85
KON.PHILIPS ELECTR.......................15.13 -0.58 25.45 12.01
L'OREAL..............................................78.92 -1.48 91.24 68.83
LVMH..................................................111.35 -3.10 132.65 94.16
MUNICH RE.........................................91.04 -3.96 126.00 77.80
NOKIA....................................................3.73 -0.13 8.49 3.33
REPSOL YPF.......................................22.39 -0.74 24.90 17.31
RWE.....................................................26.75 -1.19 55.70 21.15
SAINT-GOBAIN...................................29.79 -0.99 47.64 26.07
SANOFI ................................................52.58 -0.76 56.82 42.85
SAP......................................................43.36 -0.45 46.15 32.88
SCHNEIDER ELECTRIC.....................40.05 -1.74 61.83 35.00
SIEMENS .............................................72.73 -2.02 99.39 62.13
SOCIETE GENERALE.........................18.60 -0.96 52.70 14.32
TELECOM ITALIA..................................0.82 -0.03 1.16 0.70
TELEFONICA ......................................13.50 -0.40 18.75 12.50
TOTAL..................................................38.05 -0.81 44.55 29.40
UNIBAIL-RODAMCO SE...................131.80 -5.30 162.95 123.30
UNICREDIT............................................0.75 -0.05 2.03 0.64
UNILEVER CVA...................................25.51 0.01 25.72 20.90
VINCI ....................................................32.28 -0.24 45.48 28.46
VIVENDI ...............................................16.61 -0.30 22.07 14.10
VOLKSWAGEN VORZ ......................120.00 -4.65 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5427.86 -101.35 -1.83
FTSE 250 INDEX . . . . . . . . 9901.15 -229.42 -2.26
FTSE UK ALL SHARE . . . . 2786.80 -53.03 -1.87
FTSE AIMALL SH . . . . . . . . 692.52 -7.85 -1.12
DOWJONES INDUS 30 . . 12021.39 -162.87 -1.34
S&P 500 . . . . . . . . . . . . . . . 1236.47 -18.72 -1.49
NASDAQ COMPOSITE . . . 2612.26 -34.59 -1.31
FTSEUROFIRST 300 . . . . . . 967.49 -18.32 -1.86
NIKKEI 225 . . . . . . . . . . . . . 8653.82 117.36 1.37
DAX 30 PERFORMANCE. . 5785.43 -201.28 -3.36
CAC 40 . . . . . . . . . . . . . . . . 3089.59 -82.76 -2.61
SHANGHAI SE INDEX . . . . 2291.55 -23.73 -1.03
HANG SENG. . . . . . . . . . . 18575.66 -10.57 -0.06
S&P/ASX 20 INDEX . . . . . . 2556.60 0.00 0.00
ASX ALL ORDINARIES . . . 4311.40 47.30 1.11
BOVESPA SAO PAOLO. . 57346.86 -889.60 -1.53
ISEQ OVERALL INDEX . . . 2711.14 -30.15 -1.10
STI . . . . . . . . . . . . . . . . . . . . 2701.72 7.12 0.26
IGBM. . . . . . . . . . . . . . . . . . . 840.34 -26.91 -3.10
SWISS MARKET INDEX. . . 5747.09 -46.48 -0.80
Price Chg %chg
3M........................................................80.59 -1.61 98.19 68.63
ABBOTT LABS ...................................54.27 -0.30 55.61 45.07
ALCOA ..................................................9.35 -0.29 18.47 8.45
ALTRIA GROUP..................................28.87 0.09 29.05 23.20
AMAZON.COM..................................189.52 -3.51 246.71 160.59
AMERICAN EXPRESS........................47.89 -0.91 53.80 41.25
AMGEN INC.........................................57.16 -1.43 61.53 47.66
APPLE...............................................391.84 -1.78 426.70 310.50
AT&T....................................................29.01 -0.02 31.94 27.20
BANK OF AMERICA.............................5.45 -0.27 15.31 5.03
BERKSHIRE HATAW B.......................76.27 -1.34 87.65 65.35
BOEING CO.........................................70.90 -1.03 80.65 56.01
BRISTOL MYERS SQUI ......................33.18 -0.36 33.72 20.05
CATERPILLAR....................................93.24 -2.73 116.55 67.54
CHEVRON.........................................103.07 -1.18 110.01 85.84
CISCO SYSTEMS................................18.53 -0.35 22.34 13.30
CITIGROUP.........................................27.22 -1.55 51.50 21.40
COCA-COLA.......................................66.89 -0.68 71.77 61.29
COLGATE PALMOLIVE......................90.21 -0.25 94.89 74.86
CONOCOPHILLIPS.............................70.48 -1.47 81.80 58.65
CVS/CAREMARK................................38.15 -0.22 39.50 31.30
DU PONT(EI) DE NMR........................43.91 -1.13 57.00 37.10
EXXON MOBIL....................................80.05 -1.29 88.23 63.47
GENERAL ELECTRIC.........................16.46 -0.38 21.65 14.02
GOOGLE A........................................625.39 -2.03 642.96 473.02
HEWLETT PACKARD.........................27.34 -0.56 49.39 19.92
HOME DEPOT.....................................40.05 -0.18 40.93 28.13
IBM.....................................................192.18 -2.38 194.90 143.52
INTEL CORP .......................................24.00 -1.01 26.78 19.16
J.P.MORGAN CHASE.........................32.04 -1.14 48.36 27.85
JOHNSON & JOHNSON.....................63.51 -1.02 68.05 57.50
KRAFT FOODS A................................36.42 -0.28 36.90 24.30
MC DONALD'S CORP ........................98.48 0.45 98.53 72.14
MERCK AND CO. NEW......................35.41 -0.27 37.65 29.47
MICROSOFT........................................25.51 -0.19 29.46 23.65
OCCID. PETROLEUM.........................91.78 -2.62 117.89 66.36
ORACLE CORP...................................31.32 -0.37 36.50 24.72
PEPSICO.............................................64.66 -0.53 71.89 58.50
PFIZER ................................................20.39 -0.17 21.45 16.59
PHILIP MORRIS INTL .........................75.15 -0.43 77.03 55.85
PROCTER AND GAMBLE ..................64.31 -0.66 67.72 56.57
QUALCOMM INC ................................54.78 -0.40 59.84 45.98
SCHLUMBERGER ..............................71.92 -2.23 95.64 54.79
TRAVELERS CIES..............................55.83 -0.19 64.17 45.97
UNITED TECHNOLOGIE ....................74.48 -1.83 91.83 66.87
UNITEDHEALTH GROUP...................48.20 -0.71 53.50 34.94
VERIZON COMMS ..............................38.35 -0.08 38.95 32.28
WAL-MART STORES..........................58.09 -0.23 59.40 48.31
WALT DISNEY CO ..............................36.65 0.09 44.34 28.19
WELLS FARGO & CO.........................26.29 -0.62 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.593 -0.01
LIBOR Euro - 12 months ................1.973 0.00
LIBOR USD - overnight...................0.150 0.01
LIBOR USD - 12 months.................1.087 0.01
HaIifax mortgage rate .....................3.990 -0.02
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.050 -0.06
European repo rate.........................0.718 0.18
Euro Euribor ....................................0.800 -0.03
The vix index ...................................27.47 0.66
The baItic dry index ........................1.922 0.04
Markit iBoxx...................................239.80 1.28
Markit iTraxx..................................174.27 -1.99
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
BAE Systems . . . . . .275.3 -4.6 361.1 248.1
Chemring Group . . . .377.7 -14.1 736.5 368.8
Cobham . . . . . . . . . . .173.2 -2.5 236.5 165.9
Meggitt . . . . . . . . . . . .348.2 -10.2 397.6 304.9
QinetiQ Group . . . . . .135.0 -2.4 137.5 101.5
RoIIs-Royce Group . .719.0 -6.5 738.0 557.5
Senior . . . . . . . . . . . . .163.3 -8.6 190.6 132.6
UItra EIectronics . . .1468.0 -16.0 1830.0 1305.0
GKN . . . . . . . . . . . . . .178.7 -7.6 245.0 157.0
BarcIays . . . . . . . . . . .181.5 -8.8 333.6 138.9
HSBC HoIdings . . . . .488.8 -16.2 730.9 463.5
LIoyds Banking Gr . . .24.4 -2.3 69.6 21.8
RoyaI Bank of Sco . . .20.6 -1.4 49.0 17.3
Standard Chartere .1419.5 -39.0 1769.0 1169.5
AG Barr . . . . . . . . . .1196.0 -16.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .311.2 2.1 488.1 289.9
Diageo . . . . . . . . . . .1374.0 14.0 1383.0 1112.0
SABMiIIer . . . . . . . . .2180.5 -3.5 2354.5 1979.0
AZ EIectronic Mat . . .236.8 0.8 338.1 206.1
Croda Internation . .1761.0 -39.0 2081.0 1456.0
EIementis . . . . . . . . . .133.1 -1.8 187.4 107.5
Johnson Matthey . .1813.0 -63.0 2119.0 1523.0
Victrex . . . . . . . . . . .1100.0 -10.0 1590.0 1025.0
YuIe Catto & Co . . . . .162.9 -7.1 253.0 148.0
C/$ 1.3203 0.0185
C/ 0.8468 0.0075
C/ 102.77 1.1364
/C 1.1811 0.0105
/$ 1.5592 0.0079
/ 121.38 0.2629
FTSE 100
5427.86
101.35
FTSE 250
9901.15
229.42
FTSE ALLSHARE
2786.80
53.03
DOW
12021.39
162.87
NASDAQ
2612.26
34.59
S&P 500
1236.47
18.72
RPC Group . . . . . . . .347.4 -7.6 384.8 217.0
Smiths Group . . . . . .904.0 -19.5 1429.0 869.5
Brown (N.) Group . . .234.6 -0.5 311.2 233.4
Carpetright . . . . . . . . .395.4 -23.1 835.5 375.0
Debenhams . . . . . . . . .58.0 -1.1 74.8 51.2
Dignity . . . . . . . . . . . .803.5 -14.0 854.5 648.5
Dixons RetaiI . . . . . . .10.8 -0.1 26.0 9.4
DuneImGroup . . . . . .428.4 -1.6 550.0 383.9
HaIfords Group . . . . .311.0 -1.9 459.7 268.6
Home RetaiI Group . . .87.4 -1.4 235.0 72.5
Inchcape . . . . . . . . . .293.0 -12.2 425.4 268.1
JD Sports Fashion . .650.0 -44.5 1030.0 650.0
Kesa EIectricaIs . . . . .69.0 -1.6 168.6 65.6
Kingfisher . . . . . . . . .248.1 -7.2 287.1 217.0
Marks & Spencer G . .312.3 -3.0 402.2 301.8
Mothercare . . . . . . . .168.0 7.4 626.5 127.3
Next . . . . . . . . . . . . .2600.0 5.0 2810.0 1868.0
Sports Direct Int . . . .203.2 -8.4 266.2 145.4
WH Smith . . . . . . . . . .505.0 -12.0 558.0 433.8
Smith & Nephew . . . .586.5 -2.5 742.0 521.0
Synergy HeaIth . . . . .849.5 20.5 981.0 808.0
Barratt DeveIopme . . .92.7 -4.0 119.0 67.5
BeIIway . . . . . . . . . . . .735.0 -14.0 776.5 540.5
BaIfour Beatty . . . . . .244.6 -7.3 357.3 214.6
GaIIiford Try . . . . . . . .450.0 -7.5 530.0 286.5
Kier Group . . . . . . . .1342.0 -28.0 1458.0 1097.0
Drax Group . . . . . . . .546.5 -4.0 581.5 359.2
SSE . . . . . . . . . . . . . .1260.0 5.0 1423.0 1125.0
Domino Printing S . .436.5 -55.9 705.0 434.3
HaIma . . . . . . . . . . . . .337.1 -4.9 429.6 306.3
Laird . . . . . . . . . . . . . .145.0 0.5 207.0 127.9
Morgan CrucibIe C . .252.0 -9.0 357.1 224.0
Oxford Instrument . .993.0 -13.0 1012.0 600.5
Renishaw . . . . . . . . . .905.0 -44.0 1886.0 800.0
Spectris . . . . . . . . . .1188.0 -48.0 1679.0 1039.0
Aberforth SmaIIer . . .503.0 -8.5 714.0 503.0
AIIiance Trust . . . . . .335.0 -5.4 392.7 310.2
Bankers Inv Trust . . .371.0 -7.0 428.0 346.5
BH GIobaI Ltd. GB .1200.0 2.0 1212.0 1058.0
BH GIobaI Ltd. US . . . .11.9 0.2 12.2 10.4
BH Macro Ltd. EUR . . .19.7 -0.1 20.2 15.8
BH Macro Ltd. GBP 2046.0 9.0 2078.0 1630.0
BH Macro Ltd. USD . . .19.8 0.1 20.2 15.8
BIackRock WorId M .609.0 -18.0 815.5 574.5
BIueCrest AIIBIue . . .166.1 0.1 176.2 162.4
British Assets Tr . . . .114.0 -2.9 140.5 109.0
British Empire Se . . .417.3 -9.4 533.0 409.9
CaIedonia Investm .1395.0 -26.0 1928.0 1395.0
City of London In . . .277.2 -4.9 306.9 257.0
Dexion AbsoIute L . .133.3 -0.7 151.0 130.0
Edinburgh Dragon . .211.6 -4.4 262.1 201.4
Edinburgh Inv Tru . . .462.0 -2.5 492.2 414.9
EIectra Private E . . .1446.0 -11.0 1755.0 1287.0
F&C Inv Trust . . . . . .282.2 -5.7 327.9 261.5
FideIity China Sp . . . . .75.0 -3.8 122.9 70.0
FideIity European . . .967.0 -29.5 1287.0 912.0
HeraId Inv Trust . . . . .437.0 -8.7 545.5 419.0
HICL Infrastructu . . . .117.4 -0.2 121.3 112.7
Impax Environment . .94.7 -1.6 130.5 88.5
JPMorgan American .821.5 -16.0 916.0 721.5
JPMorgan Asian In . .183.5 -2.0 250.8 170.1
JPMorgan Emerging .515.5 -16.0 639.0 480.1
JPMorgan European .643.0 -22.5 983.5 643.0
JPMorgan Indian I . . .315.3 -18.2 488.0 315.3
JPMorgan Russian .480.0 -18.0 755.0 415.1
Law Debenture Cor . .343.1 -5.6 385.0 321.0
MercantiIe Inv Tr . . . .847.5 -25.5 1137.0 825.0
Merchants Trust . . . .355.4 -9.6 431.8 341.5
Monks Inv Trust . . . .309.5 -3.0 367.9 298.1
Murray Income Tru . .601.0 -16.5 673.0 568.0
Murray Internatio . . .895.5 -17.5 991.5 818.5
PerpetuaI Income . . .246.6 -3.4 276.0 236.5
PersonaI Assets T .33670.0-140.0 34060.030210.0
PoIar Cap TechnoI . .325.5 -5.6 391.2 299.5
RIT CapitaI Partn . . .1200.0 -33.0 1360.0 1173.0
Scottish Inv Trus . . . .446.0 -7.0 524.0 417.0
Scottish Mortgage . .599.0 -17.5 781.0 573.5
SVG CapitaI . . . . . . . .184.5 -2.8 279.8 182.1
TempIe Bar Inv Tr . . .840.0 -16.5 952.0 791.0
TempIeton Emergin .543.0 -12.0 689.5 497.0
TR Property Inv T . . .147.0 -3.4 206.1 140.5
TR Property Inv T . . . .67.6 -0.3 94.0 67.6
Witan Inv Trust . . . . .431.0 -10.8 533.0 401.5
3i Group . . . . . . . . . . .180.4 -3.2 340.0 176.9
3i Infrastructure . . . . .119.7 0.1 125.2 113.1
Aberdeen Asset Ma .209.0 -3.7 240.0 167.8
Ashmore Group . . . .327.5 -12.5 420.0 301.5
Brewin DoIphin Ho . .133.0 -0.2 185.4 113.7
CameIIia . . . . . . . . . .9550.0 49.010950.0 8800.0
CharIes TayIor Co . . .125.3 4.3 166.5 119.4
City of London Gr . . . .61.3 0.0 93.6 61.3
City of London In . . .338.3 -10.3 461.5 321.3
CIose Brothers Gr . . .597.5 -17.5 888.5 597.5
CoIIins Stewart H . . . .50.0 0.5 90.8 48.5
EvoIution Group . . . . .78.8 -4.0 94.0 62.3
F&C Asset Managem .65.6 -2.1 92.9 56.1
Hargreaves Lansdo .440.9 -16.7 646.5 402.5
HeIphire Group . . . . . . .2.0 -0.2 17.4 1.4
Henderson Group . . .106.7 -4.9 173.1 95.1
Highway CapitaI . . . . .12.0 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .329.5 -12.2 570.5 311.6
IG Group HoIdings . .461.6 -11.4 528.0 393.6
Intermediate Capi . . .226.2 -7.5 360.3 197.9
InternationaI Per . . . .189.6 -14.5 388.8 170.1
InternationaI Pub . . . .118.7 -1.2 119.9 108.6
Investec . . . . . . . . . . .342.6 -12.1 538.0 318.4
IP Group . . . . . . . . . . . .72.3 0.3 76.5 30.2
Jupiter Fund Mana . .221.5 1.7 337.3 184.9
Liontrust Asset M . . . .77.3 0.0 87.5 57.9
LMS CapitaI . . . . . . . . .54.9 -0.1 64.8 44.8
London Finance & . . .22.5 0.0 23.5 16.5
London Stock Exch .780.0 -40.0 1076.0 772.5
Lonrho . . . . . . . . . . . . .10.0 0.0 19.8 8.9
Man Group . . . . . . . . .130.2 -4.6 311.0 123.6
Paragon Group Of . .178.2 -6.8 206.1 134.6
Provident Financi . . .949.0 -11.0 1124.0 825.5
Rathbone Brothers .1059.0 -26.0 1257.0 977.0
Record . . . . . . . . . . . . .13.9 -0.1 40.5 13.5
RSM Tenon Group . . .14.0 -0.3 66.3 13.8
Schroders . . . . . . . .1302.0 -62.0 1922.0 1183.0
Schroders (Non-Vo .1055.0 -59.0 1554.0 970.0
TuIIett Prebon . . . . . .272.6 -11.3 428.6 272.5
WaIker Crips Grou . . .44.0 -0.5 51.5 44.0
BT Group . . . . . . . . . .189.6 -3.8 204.1 161.0
CabIe & WireIess . . . .37.4 -0.4 52.9 31.3
CabIe & WireIess . . . .17.2 -0.1 76.9 14.2
COLT Group SA . . . . .92.3 -2.4 156.2 84.1
KCOM Group . . . . . . . .69.5 -1.3 84.0 52.3
TaIkTaIk TeIecom . . .135.9 -0.7 168.3 119.8
TeIecomPIus . . . . . . .772.0 -8.0 802.0 432.0
Booker Group . . . . . . .70.3 -3.8 80.0 54.5
Greggs . . . . . . . . . . . .499.4 -6.1 550.5 436.4
Morrison (Wm) Sup .314.1 -2.5 322.9 262.7
Ocado Group . . . . . . . .80.0 -4.3 285.0 80.0
Sainsbury (J) . . . . . . .292.7 -4.5 391.5 263.5
Tesco . . . . . . . . . . . . .391.5 -7.5 439.0 356.3
Associated Britis . .1085.0 0.0 1182.0 940.0
Cranswick . . . . . . . . .748.0 -9.0 882.0 588.5
Dairy Crest Group . . .322.7 -3.1 424.9 318.8
Devro . . . . . . . . . . . . .251.6 -4.2 296.9 223.5
Premier Foods . . . . . . . .5.9 0.1 35.1 3.3
Tate & LyIe . . . . . . . . .675.5 -10.0 689.5 511.0
UniIever . . . . . . . . . .2116.0 -16.0 2142.0 1793.0
Mondi . . . . . . . . . . . . .442.0 -15.2 664.0 413.5
Centrica . . . . . . . . . . .285.1 -1.7 345.8 282.6
InternationaI Pow . . .324.4 -0.9 448.6 279.4
NationaI Grid . . . . . . .604.5 -1.0 649.5 530.0
Pennon Group . . . . . .676.5 -7.0 737.5 584.5
Severn Trent . . . . . .1473.0 -5.0 1600.0 1368.0
United UtiIities . . . . .599.0 -2.0 637.0 543.5
Cookson Group . . . . .470.3 -20.3 724.5 395.8
DS Smith . . . . . . . . . .190.4 -4.6 266.2 164.4
Rexam . . . . . . . . . . . .342.8 -4.5 400.0 299.8
Price Chg High Low
BerkeIey Group Ho .1260.0 -27.0 1360.0 884.5
Bovis Homes Group .453.0 -9.9 499.6 326.5
Persimmon . . . . . . . .469.0 -12.7 518.5 374.0
Reckitt Benckiser . .3204.0 -38.0 3648.0 3015.0
Redrow . . . . . . . . . . . .110.0 -4.2 139.0 103.5
TayIor Wimpey . . . . . . .36.1 -0.9 43.3 27.3
Bodycote . . . . . . . . . .253.3 -11.0 397.7 225.6
Charter Internati . . . .931.5 -3.5 952.0 538.5
Fenner . . . . . . . . . . . .379.0 -4.0 422.5 280.0
IMI . . . . . . . . . . . . . . . .724.5 -6.5 1119.0 636.5
MeIrose . . . . . . . . . . .343.1 -5.9 365.4 268.0
Northgate . . . . . . . . . .216.8 -8.0 346.7 215.1
Rotork . . . . . . . . . . .1780.0 -29.0 1858.0 1501.0
Spirax-Sarco Engi . .1787.0 -40.0 2063.0 1649.0
Weir Group . . . . . . .1893.0 -72.0 2218.0 1375.0
Ferrexpo . . . . . . . . . . .266.8 -21.0 499.0 238.7
TaIvivaara Mining . . .229.9 -4.5 622.0 195.2
BBAAviation . . . . . . .175.9 -1.6 240.8 156.0
Stobart Group Ltd . . .118.0 -2.6 163.6 112.0
AdmiraI Group . . . . . .824.5 -30.0 1754.0 800.5
AmIin . . . . . . . . . . . . .317.7 -9.9 427.0 270.6
Huntsworth . . . . . . . . .39.0 0.3 85.0 36.3
Informa . . . . . . . . . . . .344.9 -12.3 461.1 313.9
ITE Group . . . . . . . . . .196.6 -7.2 258.2 157.7
ITV . . . . . . . . . . . . . . . . .61.7 -3.0 93.5 51.7
Johnston Press . . . . . . .5.1 0.3 12.8 4.1
MecomGroup . . . . . .200.0 0.0 310.0 134.5
Moneysupermarket. .103.8 -3.6 120.4 75.7
Pearson . . . . . . . . . .1128.0 -16.0 1207.0 983.0
PerformGroup . . . . .202.0 -9.0 234.5 150.0
Reed EIsevier . . . . . .510.0 -11.5 590.5 461.3
Rightmove . . . . . . . .1187.0 -25.0 1408.0 743.0
STV Group . . . . . . . . . .85.5 0.0 168.0 83.9
Tarsus Group . . . . . .131.5 0.5 165.0 114.0
Trinity Mirror . . . . . . . .51.0 -1.5 93.0 37.5
UBM . . . . . . . . . . . . . .469.8 -18.3 725.0 416.0
UTV Media . . . . . . . . .100.5 0.5 150.0 99.0
WiImington Group . . .85.0 0.3 183.0 82.5
WPP . . . . . . . . . . . . . .650.0 -15.5 846.5 578.0
YeII Group . . . . . . . . . . .5.2 -0.2 14.8 3.4
African Barrick G . . .472.3 -36.7 618.5 393.5
AIIied GoId Minin . . .163.8 -2.7 281.3 34.4
AngIo American . . .2347.0-102.0 3437.0 2138.5
AngIo Pacific Gro . . .272.4 -9.9 369.3 237.9
Antofagasta . . . . . . .1156.0 -72.0 1634.0 900.5
Aquarius PIatinum . .160.0 -15.0 419.0 150.0
BeazIey . . . . . . . . . . . .131.2 -3.9 139.2 109.6
CatIin Group Ltd. . . .391.7 -14.0 421.4 334.0
Hiscox Ltd. . . . . . . . . .362.5 -12.5 424.7 340.5
Jardine LIoyd Tho . . .635.0 -15.5 764.5 576.0
Lancashire HoIdin . . .713.5 -11.0 774.5 532.5
RSA Insurance Gro . .102.9 -3.1 143.5 102.2
Aviva . . . . . . . . . . . . . .301.0 -20.3 477.9 275.3
LegaI & GeneraI G . . .102.7 -3.8 123.8 89.8
OId MutuaI . . . . . . . . .113.5 -3.8 144.8 98.1
Phoenix Group HoI . .529.5 -20.5 688.0 451.1
PrudentiaI . . . . . . . . .624.0 -30.5 777.0 509.0
ResoIution Ltd. . . . . .247.5 -5.6 316.1 229.5
St James's PIace . . . .322.6 -9.5 376.0 265.7
Standard Life . . . . . . .196.6 -7.2 244.7 172.0
4Imprint Group . . . . .220.0 0.0 295.0 200.0
Aegis Group . . . . . . .137.4 -1.5 158.5 115.7
BIoomsbury PubIis . . .99.3 1.5 138.0 91.3
British Sky Broad . . .728.5 -5.0 850.0 618.5
Centaur Media . . . . . . .35.9 0.1 73.0 34.6
Chime Communicati .166.8 -2.0 298.5 166.8
Creston . . . . . . . . . . . .72.8 -0.3 121.0 71.3
DaiIy MaiI and Ge . . .391.7 -10.5 594.5 343.4
Euromoney Institu . .658.0 -5.5 736.0 522.5
Future . . . . . . . . . . . . . . .9.0 0.0 30.0 8.5
Haynes PubIishing . .215.0 0.0 257.0 210.0
BHP BiIIiton . . . . . . .1897.0 -64.0 2631.5 1667.0
Centamin Egypt Lt . . .93.1 -2.8 177.2 80.8
Eurasian NaturaI . . .634.5 -50.5 1125.0 522.0
FresniIIo . . . . . . . . . .1654.0-115.0 2150.0 1296.0
GemDiamonds Ltd. .188.9 8.6 306.0 179.8
GIencore Internat . . .387.5 -17.2 531.1 348.0
HochschiId Mining . .408.3 -24.7 680.0 394.9
Kazakhmys . . . . . . . .880.0 -63.0 1671.0 730.0
Kenmare Resources . .38.6 -1.7 59.9 25.8
Lonmin . . . . . . . . . . . .975.0 -47.0 1983.0 963.0
New WorId Resourc .412.6 -28.4 1060.0 410.5
PetropavIovsk . . . . . .646.5 -39.0 1158.0 543.5
RandgoId Resource 6655.0-215.0 7555.0 4425.0
Rio Tinto . . . . . . . . . .3119.0-126.5 4712.0 2712.5
Vedanta Resources 1065.0 -47.0 2559.0 928.0
Xstrata . . . . . . . . . . . .955.4 -56.1 1550.0 764.0
Inmarsat . . . . . . . . . . .400.9 -22.5 719.5 389.3
Vodafone Group . . . .173.2 -1.0 182.8 155.1
Genesis Emerging . .440.0 -10.0 568.0 424.0
Afren . . . . . . . . . . . . . . .80.0 -4.5 171.2 73.6
BG Group . . . . . . . . .1324.5 -24.0 1564.5 1144.0
BP . . . . . . . . . . . . . . . .444.6 -7.5 509.0 363.2
Cairn Energy . . . . . . .274.6 -2.4 469.7 261.4
EnQuest . . . . . . . . . . . .89.6 -4.2 158.5 85.7
Essar Energy . . . . . .203.9 -19.0 589.5 203.9
ExiIIon Energy . . . . . .258.0 -9.3 469.7 184.2
Heritage OiI . . . . . . . .176.9 -2.7 486.0 160.0
Ophir Energy . . . . . . .252.8 -8.2 299.0 184.5
Premier OiI . . . . . . . . .371.2 -4.3 535.0 310.0
RoyaI Dutch SheII . .2261.5 -32.0 2326.5 1883.5
RoyaI Dutch SheII . .2325.0 -31.0 2361.0 1890.5
SaIamander Energy .206.0 -3.2 317.6 182.3
Soco Internationa . . .288.3 -11.0 400.0 278.0
TuIIow OiI . . . . . . . . .1328.0 -42.0 1493.0 945.5
Amec . . . . . . . . . . . . .897.5 -13.5 1251.0 740.5
Hunting . . . . . . . . . . .700.0 -5.5 817.0 530.0
Kentz Corporation . .453.4 -24.6 508.0 290.5
LampreII . . . . . . . . . . .265.7 -15.5 395.2 220.7
Petrofac Ltd. . . . . . .1373.0 -41.0 1685.0 1108.0
Wood Group (John) .633.0 -16.0 715.8 469.9
Burberry Group . . . .1217.0 -46.0 1600.0 1030.0
PZ Cussons . . . . . . . .318.3 5.0 404.0 308.7
Supergroup . . . . . . . .495.4 -5.6 1820.0 435.2
AstraZeneca . . . . . .2920.5 -34.0 3194.0 2543.5
BTG . . . . . . . . . . . . . .300.5 -4.6 309.7 210.1
Genus . . . . . . . . . . . .1030.0 -14.0 1111.0 831.5
GIaxoSmithKIine . . .1428.5 4.5 1449.5 1127.5
Hikma Pharmaceuti .646.0 -8.5 900.0 555.5
Shire PIc . . . . . . . . . .2106.0 -25.0 2152.0 1481.0
CapitaI & Countie . . .171.2 -1.8 203.7 142.8
Daejan HoIdings . . .2726.0 1.0 2954.0 2282.0
F&C CommerciaI Pr .100.1 -1.1 108.0 92.6
Grainger . . . . . . . . . . . .98.0 -4.2 133.2 77.3
London & Stamford .104.9 -0.7 140.0 104.0
SaviIIs . . . . . . . . . . . . .300.0 1.6 427.1 256.2
UK CommerciaI Pro . .69.2 -0.2 85.5 69.0
Unite Group . . . . . . . .162.7 -7.4 224.1 152.9
Big YeIIow Group . . .260.0 0.0 352.2 218.0
British Land Co . . . . .456.4 -12.1 629.5 452.0
CapitaI Shopping . . .305.7 -10.5 424.8 288.7
Derwent London . . .1521.0 -55.0 1880.0 1400.0
Great PortIand Es . . .325.9 -9.0 445.0 317.4
Hammerson . . . . . . . .359.2 -11.8 490.9 352.0
Hansteen HoIdings . . .69.0 -1.0 89.5 69.0
Land Securities G . . .629.0 -22.0 885.0 616.0
SEGRO . . . . . . . . . . . .208.0 -7.2 331.3 204.8
Shaftesbury . . . . . . . .474.0 -18.9 539.0 435.4
Aveva Group . . . . . .1477.0 -23.0 1799.0 1298.0
Computacenter . . . . .344.0 -2.2 490.0 327.7
Fidessa Group . . . . .1608.0 -9.0 2109.0 1444.0
Invensys . . . . . . . . . . .198.8 -3.8 364.3 180.9
Logica . . . . . . . . . . . . .73.6 -3.5 147.2 67.6
Micro Focus Inter . . .369.6 -10.8 426.2 239.4
Misys . . . . . . . . . . . . .234.5 -9.3 420.2 214.9
Sage Group . . . . . . . .284.8 -1.8 302.0 231.7
SDL . . . . . . . . . . . . . . .676.0 -12.5 711.5 586.0
TeIecity Group . . . . . .622.0 -13.5 638.5 430.0
Aggreko . . . . . . . . . .1812.0 -41.0 2034.0 1394.5
Ashtead Group . . . . .200.0 -6.9 211.7 99.4
Atkins (WS) . . . . . . . .616.5 -9.0 820.0 490.2
Babcock Internati . . .711.5 0.0 733.0 540.5
Berendsen . . . . . . . . .412.0 -2.5 568.0 402.7
BunzI . . . . . . . . . . . . .840.0 -3.0 844.5 676.5
Cape . . . . . . . . . . . . . .319.6 -11.8 591.5 295.0
Capita Group . . . . . . .618.0 -8.0 786.5 614.5
CariIIion . . . . . . . . . . .304.0 -11.4 403.2 281.0
De La Rue . . . . . . . . .868.0 -1.0 936.0 667.0
DipIoma . . . . . . . . . . .321.7 -11.3 414.3 263.3
EIectrocomponents .192.2 -3.4 294.9 182.2
Experian . . . . . . . . . . .809.0 -7.0 844.0 665.0
FiItrona PLC . . . . . . . .370.7 -15.3 397.1 236.9
G4S . . . . . . . . . . . . . . .249.5 -1.7 291.0 219.9
Hays . . . . . . . . . . . . . . .62.2 -1.1 133.6 62.1
Homeserve . . . . . . . .294.5 -6.6 532.0 218.5
Howden Joinery Gr . . .98.3 -3.5 127.5 93.1
Interserve . . . . . . . . . .315.2 -4.8 341.3 201.5
Intertek Group . . . . .1921.0 -22.0 2148.0 1715.0
MichaeI Page Inte . . .324.5 -1.2 567.0 322.2
Mitie Group . . . . . . . .240.0 -1.8 258.1 195.9
Premier FarneII . . . . .176.0 -1.0 308.8 144.5
Regus . . . . . . . . . . . . . .79.1 -5.7 119.0 64.0
RentokiI InitiaI . . . . . . .61.4 -2.3 104.9 61.0
RPS Group . . . . . . . . .180.0 -1.5 253.0 156.6
Serco Group . . . . . . .465.7 -5.5 618.5 465.7
Shanks Group . . . . . .103.8 -2.2 130.9 103.0
SIG . . . . . . . . . . . . . . . .77.5 -2.5 153.5 76.8
SThree . . . . . . . . . . . .205.5 -3.0 447.6 205.0
Travis Perkins . . . . . .814.5 -15.5 1127.0 715.0
WoIseIey . . . . . . . . .1915.0 -51.0 2261.0 1404.0
ARM HoIdings . . . . . .565.0 -5.0 651.0 389.6
CSR . . . . . . . . . . . . . .183.1 16.3 447.0 154.1
Imagination Techn . .437.0 -12.3 502.0 296.9
Pace . . . . . . . . . . . . . . .67.4 -4.5 231.8 44.0
Spirent Communica .112.5 -7.4 160.0 109.5
British American . .3000.0 1.5 3042.5 2282.5
ImperiaI Tobacco . .2363.0 12.0 2391.0 1784.0
Betfair Group . . . . . . .785.0 -13.5 1235.0 567.0
Bwin.party Digita . . .131.8 -7.7 235.5 100.6
CarnivaI . . . . . . . . . .2175.0 -15.0 3153.0 1742.0
Compass Group . . . .584.0 -3.5 612.0 512.5
Domino's Pizza UK . .405.3 -14.8 586.0 377.0
easyJet . . . . . . . . . . . .376.0 -3.0 474.0 301.0
FirstGroup . . . . . . . . .320.4 1.2 412.6 301.8
Go-Ahead Group . . .1232.0 -3.0 1598.0 1190.0
Greene King . . . . . . .465.5 -2.4 518.0 410.0
InterContinentaI . . .1105.0 -12.0 1435.0 955.0
InternationaI Con . . .146.8 -6.5 305.0 132.0
JD Wetherspoon . . . .415.0 -3.6 468.3 380.5
Ladbrokes . . . . . . . . .125.0 -3.6 155.3 114.0
Marston's . . . . . . . . . . .92.5 -2.8 117.1 84.6
MiIIennium& Copt . .406.6 -8.3 600.5 371.2
MitcheIIs & ButIe . . . .222.7 -2.5 361.0 215.6
NationaI Express . . .213.2 -3.4 270.2 201.6
Rank Group . . . . . . . .147.0 -3.9 153.7 109.5
Restaurant Group . . .292.4 -2.6 335.0 254.9
Stagecoach Group . .254.2 -0.7 272.4 200.0
Thomas Cook Group .15.3 0.1 204.8 10.2
TUI TraveI . . . . . . . . . .152.2 -4.2 271.9 136.7
Whitbread . . . . . . . .1576.0 -23.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .192.6 -4.4 244.1 164.2
Abcam . . . . . . . . . . . .345.0 -12.0 460.0 307.0
Advanced MedicaI . . .90.0 0.0 96.0 64.8
AIbemarIe & Bond . .340.6 6.0 400.1 272.0
Amerisur Resource . .16.8 -1.0 29.0 9.5
Andor TechnoIogy . .567.5 -9.0 685.0 387.1
ArchipeIago Resou . . .69.0 -1.0 79.0 51.0
ASOS . . . . . . . . . . . .1240.0 10.0 2468.0 1214.0
AureIian OiI & Ga . . . .18.3 0.0 92.0 16.0
Avanti Communicat .280.5 -19.5 728.0 248.5
BIinkx . . . . . . . . . . . . . .67.3 -0.8 158.0 64.8
Borders & Souther . . .61.0 -1.8 72.3 43.5
BowLeven . . . . . . . . . .67.0 -3.5 398.0 65.0
Brooks MacdonaId 1040.0 -32.5 1372.5 940.0
Cove Energy . . . . . . . .94.0 -3.3 112.8 61.0
Daisy Group . . . . . . . .99.0 -4.0 127.0 88.0
EMIS Group . . . . . . . .520.0 10.0 580.0 415.8
Encore OiI . . . . . . . . . .77.0 -0.3 151.5 40.8
Faroe PetroIeum . . . .150.0 -5.3 218.3 130.0
GuIfsands PetroIe . . .170.0 -16.3 401.5 142.5
GWPharmaceuticaI . .90.0 -0.8 130.0 87.0
H&T Group . . . . . . . . .330.0 -10.0 395.0 277.0
Hamworthy . . . . . . . .827.5 -0.5 833.5 373.8
Hargreaves Servic .1121.0 -14.0 1180.0 760.0
HeaIthcare Locums . . . .2.9 -0.2 3.5 2.8
Immunodiagnostic . .450.0 0.0 1218.0 430.0
ImpeIIamGroup . . . .265.0 -2.6 387.5 180.5
James HaIstead . . . . .447.6 0.1 495.0 365.0
KaIahari MineraIs . . .242.0 -0.5 301.0 198.3
London Mining . . . . .305.3 -8.8 436.5 278.5
Lupus CapitaI . . . . . .104.6 -0.4 150.0 86.0
M. P. Evans Group . .406.5 2.0 500.5 371.0
Majestic Wine . . . . . .347.5 2.5 510.0 345.0
May Gurney Integr . .291.5 1.5 302.0 234.0
Monitise . . . . . . . . . . . .25.5 -2.5 40.0 18.5
MuIberry Group . . . .1550.0 8.0 1920.0 890.0
Nanoco Group . . . . . . .60.0 -0.8 107.0 38.0
NauticaI PetroIeu . . .259.0 -7.0 547.0 223.5
NichoIs . . . . . . . . . . . .524.0 4.0 579.0 410.0
Numis Corporation . . .85.0 -0.5 131.0 80.0
Pan African Resou . . .15.5 -1.5 17.0 9.5
Patagonia GoId . . . . . .50.5 -1.0 70.0 37.3
Prezzo . . . . . . . . . . . . .55.3 1.3 71.5 53.5
Pursuit Dynamics . . .202.0 -1.0 560.0 160.5
Rockhopper ExpIor .240.8 -10.3 386.0 141.0
RWS HoIdings . . . . . .460.0 -10.0 479.8 267.0
Songbird Estates . . . .111.3 -3.8 160.3 104.0
VaIiant PetroIeum . . .420.0 -2.0 672.0 400.0
Young & Co's Brew . .683.0 3.0 712.0 565.0
CSR . . . . . . . . . . . . . .183.1 9.8
Gem Diamonds Ltd. .188.9 4.8
Mothercare . . . . . . . .168.0 4.6
Synergy HeaIth . . . . .849.5 2.5
BH GIobaI Ltd. USD . .11.9 2.0
PZ Cussons . . . . . . . .318.3 1.6
Diageo . . . . . . . . . . .1374.0 1.0
Premier Foods . . . . . . . .5.9 0.9
Jupiter Fund Manag .221.5 0.8
Britvic . . . . . . . . . . . . .311.2 0.7
Domino Printing Sc .436.5 -11.4
LIoyds Banking Gro . .24.4 -8.6
Aquarius PIatinum . .160.0 -8.6
Essar Energy . . . . . .203.9 -8.5
Eurasian NaturaI R . .634.5 -7.4
Ferrexpo . . . . . . . . . .266.8 -7.3
African Barrick Go . .472.3 -7.2
InternationaI Pers . . .189.6 -7.1
Regus . . . . . . . . . . . . . .79.1 -6.7
Kazakhmys . . . . . . . .880.0 -6.7
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
GILTS
AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
ELECTRICITY
ELECTRONIC & ELECTRICAL EQ.
EQUITY INVESTMENT INSTRUM.
FINANCIAL SERVICES
FIXED LINE TELECOMS
FOOD & DRUG RETAILERS
FOOD PRODUCERS
FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
HEALTH CARE EQUIPMENT & S.
HHOLD GDS & HOME CONSTR.
INDUSTRIAL ENGINEERING
INDUSTRIAL TRANSPORTATION
MEDIA
LIFE INSURANCE
PERSONAL GOODS
PHARMACEUTICALS & BIOTECH
REAL ESTATE INVEST. & SERV.
SOFTWARE & COMPUTER SERV.
SUPPORT SERVICES
TECHNOLOGY HARDW. & EQUIP.
TOBACCO
TRAVEL & LEISURE
AIM 50
NON LIFE INSURANCE
REAL ESTATE INVEST. TRUSTS
http://corporate.webfg.com
mailto:
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AUTOMOBILES & PARTS
BANKS
CHEMICALS
BEVERAGES
GENERAL INDUSTRIALS
MOBILE TELECOMS
OIL & GAS PRODUCERS
OIL EQUIPMENT & SERVICES
MINING
NONEQUITY INVESTM. COMM.
Tsy 5.000 12 . . . .101.07 0.00 105.2 101.0
Tsy 5.250 12 . . . .102.36 0.00 106.5 102.3
Tsy 9.000 12 . . . .105.66 0.00 113.1 104.8
Tsy 4.500 13 . . . .105.08 0.02 107.5 105.0
Tsy 2.500 13 . . . .283.55 -0.02 287.7 277.6
Tsy 8.000 13 . . . . .113.58 0.04 118.6 113.5
Tsy 5.000 14 . . . . .112.44 0.08 112.9 109.2
Tsy 4.750 15 . . . . .115.33 0.15 115.4 108.6
Tsy 8.000 15 . . . .128.83 0.12 129.2 123.7
Tsy 7.750 15 . . . .100.10 -1.09 107.6 100.1
Tsy 4.000 16 . . . . .114.47 0.14 114.7 104.9
Tsy 2.500 16 . . . .340.86 -0.07 342.7 310.2
Tsy 8.750 17 . . . .141.46 0.24 142.1 132.9
Tsy 1.250 17 . . . . .114.92 -0.12 115.4 106.7
Tsy 12.000 17 . . .124.73 1.38 131.2 122.3
Tsy 5.000 18 . . . .122.27 0.27 122.4 109.7
Tsy 4.500 19 . . . .120.38 0.37 120.5 105.4
Tsy 3.750 19 . . . . .115.13 0.38 115.1 99.4
Tsy 2.500 20 . . . .360.64 0.10 361.9 312.9
Tsy 4.750 20 . . . .122.89 0.47 122.9 106.6
Tsy 8.000 21 . . . .152.09 0.52 152.1 133.8
Tsy 4.000 22 . . . . .116.95 0.61 117.0 99.0
Tsy 1.875 22 . . . .124.99 0.16 125.5 111.3
Tsy 2.500 24 . . . .323.45 0.23 324.8 275.4
Tsy 5.000 25 . . . .128.89 0.68 128.9 107.4
Tsy 4.250 27 . . . .120.33 0.77 120.8 97.9
Tsy 1.250 27 . . . .120.94 0.29 123.7 104.8
Tsy 6.000 28 . . . .145.13 0.73 145.8 119.5
Tsy 4.750 30 . . . .127.35 0.94 128.5 103.0
Tsy 4.125 30 . . . .307.64 0.38 316.0 262.1
Tsy 4.250 32 . . . . .119.75 1.02 121.1 96.0
Tsy 4.250 36 . . . .120.54 1.22 122.2 95.0
Tsy 4.750 38 . . . .130.30 1.35 132.3 102.8
Tsy 4.500 42 . . . .126.75 1.53 129.2 98.9
% %
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www.novoaltum.com
Winners of the prestigious Management Consulting Association (MCA) Award
Best Finance and Risk Management Firm in the United Kingdom 2011
Novo Altum Dening CFO performance to deliver sustainable results.
AN INDEPENDENT SUPPLEMENT BY MEDIAPLANET
MANAGEMENT
CONSULTANCY
Major asset: Alan Leaman, chief executive of the Management
Consultancies Association discusses what the consulting industry can ofer
IMPROVE YOUR
EFFICIENCY
Economic crisis
A look at how
consultants are
helping banks
through current
difculties
Unsung heroes
Consultants
proven as a
reliable source
of growth
Changes ahead
We see them
opening up to
the SME market
3
STEPS
P
H
O
T
O
:
P
R
O
V
I
D
E
D
B
Y
T
H
E
M
C
A
No. 1 / Dec. 11
2 DECEMBER 2011 AN INDEPENDENT SUPPLEMENT BY MEDIAPLANET
S
entiment has de-
clined dramatical-
ly in recent weeks.
A survey of senior
management con-
sultants, conducted
for the MCA by Ip-
sos Mori, shows a rapid increase in
the proportion of those who expect
the economic climate to deteriorate
over the next year.
For financial services compa-
nies, the task now is to navigate a
clear path out of the nancial cri-
sis towards a more responsible and
successful future.At the same time
there is the dif cult job of reconcil-
ing the immediate needs of busi-
ness customers with the require-
ment to build up capital. The sec-
tors leaders are heavily engaged in
this process and are reaching out to
politicians and the wider public.
Some people argue that this jour-
ney must lead to a smaller and less
ambitious financial services in-
dustry; they think that this is part
of the re-balancing of the economy
that they advocate.
We must profoundly hope that
these doomsters dont have their
way. Financial Services is and must
remain a vital source of competi-
tive advantage for the UK economy.
We wont achieve a new and sus-
tainable balance for UK plc just by
shrinking one of our most success-
ful industries.
Close finance link
1
The role of management con-
sultancy has been intimately
linked with nancial services in re-
cent years. The sector remains the
largest user of consulting services
outside of government; in recent
times, we have seen a signicant
bounce-back in demand.
After a dif cult year in 2009,MCA
members reported an increase in
fee income from nancial servic-
es companies of around 24 per cent
in 2010,with banks leading the way.
Fee income from the sector grew
further in 2011 for nearly three quar-
ters of MCA member companies.
This rate of increase is, perhaps,
not surprising. There is a massive
amount of change underway in
banking and insurance, much of
CHALLENGES
Rebuilding growth
through offering value
As Britain comes to the end of a year of low growth, the pressure is on all of us to
demonstrate what we can do to build greater prosperity in the future, surmises
Alan Leaman, Chief Executive of the Management Consultancies Association
SMEs have perhaps
traditionally thought
they werent the type
of company to bring in
consultants, but thats
changing
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1ST EDITION, DECEMBER 2011
Managing Director:
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Business Development Manager:
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it complex and demanding. And
the consulting industry ofers a
wide diversity of services, exper-
tise and insight that is proving to
be invaluable.
Code assurance
2
Recent years have also seen big
changes in management con-
sultancy. All MCA member compa-
nies have signed up to our Code of
Practice and submit an annual
statement of compliance.They rec-
ognise that clients are increasingly
looking for quality and commit-
ment, and expect consultancies to
maintain the highest standards of
behaviour and service.
There is also an increasing fo-
cus on value and the return on
investment that consultancies
can generate.
Clients are increasingly contract-
ing for consulting in ways that get
away from simply paying for time
and materials,and focus instead on
the achievement of dened results.
Our recent research suggests
that,across the consulting industry
as a whole, the typical assignment
generates benets for clients that
are equivalent in value to around 6
for every 1 spent in fees. By work-
ing efectively together, clients and
their consultancies can ensure that
they capture this value and more.
Like nancial services, the man-
agement consulting industry is a
major asset for the UK,and for Lon-
don in particular.
We generate export earnings, we
make our own economy more com-
petitive and we generate jobs here
at home. The industry has proved
that it is resilient in tough times
and able to adapt for the good.
Alan Leaman, Chief Executive,
Management Consultancies Association
PAGE 8
Stella Bowdell
Head of the
Institute of
Consulting
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The word crisis normally fea-
tures in any news broadcast or ar-
ticle about the nancial services
sector and so it is not surprising
that consultants within the bank-
ing sector are nding clients re-
quire calm, independent advice.
As crises are never a time for
reasoned thinking,those involved
in the day-to-day running of a -
nancial institution are beginning
to bring in consultants to ask dif-
ficult questions, according to
Chris Cooper, Founding Partner of
Challenge Consulting.
Asking some fundamental
questions of a bank, to ensure it is
in better shape going forward, is
the antidote to a crucial mistake
many nancial services compa-
nies had made in the good years,
Cooper believes.
A lesson most banks are learning
is that prior to 2008 it said bank
above the front door, he says.
Banking isnt rocket science,
you dont actually make anything
complicated. Its all about deal-
ing with numbers. Its about tak-
ing on risk, balancing that risk
and charging accordingly for
that risk. The very fact that weve
needed so much banking regula-
tion shows that banks could not
be trusted to look after their own
best interest. Theyd forgotten
they were banks, they built ev-
erything on a model that things
would always work out, they
hadnt balanced risk, they hadnt
managed their exposure.
Time to act
Cooper believes the more forward
thinking banks are currently seeing
they have a window of opportuni-
ty to ask consultants what position
they are in and how far from good
they might currently be.
Telling banks that banking is
all about balancing risk by man-
aging it properly and charging ac-
cordingly may sound pretty obvi-
ous, says Cooper.
However,we dont really get in-
volved on the micro level of whom
theyre lending to and what the
forms look like. We ask the more
fundamental questions such as
what their exposure is to difer-
ent sizes of companies and each
industrial sector in diferent re-
gions. The biggest one of all, the
real acid test for us, is how do they
know when its time to stop.
There have to be measures
in place, there has to be a strong
form of control or banks will just
continue to keep moving further
and further away from where they
should be.
Branding advice
The next few years will see a lot of
this activity expanding as banks
work on their brands and initiate
programmes to get to know cus-
tomers better,Cooper predicts.
With Virgin buying Northern
Rock, Cooper foresees nancial in-
stitutions will be calling in consul-
tants to see what the impact will be
and how they could sharpen their
brand image to compete better and
have their name mean something
for consumers to help it stand out.
With a new name on the high
street, that is traditionally seen as
a challenger brand, carrying on as
normal will not be an option.
Chris Cooper
Founding Partner,
Challenge
Consulting
BALANCING
THE BOOKS
Question: Why are banks
calling in consultants to help
them through the current
economic difculties?
Answer: They are realising
there is a window of opportunity
to get top advice on getting
back to basics and managing
risk better
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The size and scale of the merger and
acquisitions seen in the personal -
nance sectors over the past handful of
years are at a scale where they can tru-
ly be described as once in a generation.
Given that most people in-
volved will probably never have
been responsible for executing
mergers of anywhere close to a
comparable size, it will come as
little surprise that most are call-
ing in management consultants.
Phil Dunmore, Managing Direc-
tor at PIPC,has been involved advis-
ing the likes of RBS and Lloyds. He
claims that when two sides come
together an independent, guiding
hand can ensure that eforts are di-
rected towards building a strong,
combined company and potential
rivalries between the two boards
and senior managers avoided.
The nancial services providers
know consultants whove seen
through major mergers and ac-
quisitions before will have the ex-
perience and wont be swayed by
the internal politics of either or-
ganisation, he says.
They need impartiality and inde-
pendence of focus from consultants
who are not seen as being from either
camp and have the one goal of seeing
through a successful integration.
Success plan
Dunmores advice, and the plan
which he believes management
consultants can bring to banks go-
ing through large-scale change, in-
volves several steps.
First a management consultant
will ensure there is an agreement
on what the nal company is going
to look like, he says.
Then youve actually got to start
integrating systems so the bank can
operate as one,you can optimise lat-
er but you have to get going or noth-
ing will get done. You also need a
plan, that might well change, but
you have to have a plan and you also
need people that are accountable for
each part of it. You need leadership
and accountability but, most of all,
you need honest communication at
every level of the company. People
need to know how change will af-
fect the company and them.
The years that have recently
passed and the ones immediately
ahead will see bank heads make the
biggest decisions they will ever be
confronted with. Those decisions,
Dunmore insists, are more likely
to be for the better if they are made
with the impartial advice from ex-
perts who have been in similar situ-
ations many times before.
Keeping mergers
politics free
SEAN HARGRAVE
Unprecedented mergers
are being kept on track by
independent consultants
free of internal politics
NEWS
NEWS IN BRIEF
Bernie Levins, Head of Financial
Services consulting at PIPC
US Foreign Account
Tax Compliance Act
(FATCA)
Retail Distribution
Review (RDR)
This review aims to tackle the po-
tential conict of interest that could
occur as a result of selling commis-
sion-based products.The impact of
this regulatory change will be felt
by product providers and the Inde-
pendent Financial Advisors.
The US Government has an-
nounced measures to identify US
Nationals seeking to use of-shore
facilities to avoid domestic tax li-
abilities. Institutions providing
banking services to those liable for
US tax must identify these custom-
ers,provide details to the US tax au-
thorities and in certain circum-
stances, withhold an appropriate
amount to cover any liability.
How do 30% of the FTSE 100
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Phil Dunmore
Managing Director,
PIPC
Vickers Report/
Independent
Commission on
Banking
The recommendations from
this report are currently being
reviewed by the Treasury. While
much of the reported focus has
been on how to split Investment
and Retail Banking activities, it
also addresses other issues such
as improving the ef ciency by
which customers can switch ac-
counts from one bank to another.
FINANCIAL DISTRICT
Consultants are helping
banks go back to basics
to guide them through the
economic difficulties
PHOTO: SHUTTERSTOCK
INSPIRATION
Skilled consultants in
constant demand
The management consultancy
industry, like any other, is evolv-
ing in the current period of eco-
nomic difficulty.
The biggest impact on consul-
tants has been a decline in the
public sector work which has
seen a large-scale move from
public to private work. Neverthe-
less, a recent government report
did underline the value consul-
tants can provide to central and
national authorities and so the
trend is not seen as permanent.
So, todays management con-
sultants are far more likely to
find themselves working in the
private sector and, here, flexibil-
ity is the key, advises Alan Lea-
man, Chief Executive of the Man-
agement Consultancies Associa-
tion (MCA).
What are the priorities?
In his experience, management
consultancy agencies are now
prioritising hiring consultants
with demonstrable skills who
have the potential to move be-
tween roles, companies, sectors
and countries at short notice.
I think were going to see
more of the growing trend for
management consultants to find
themselves being asked to work
abroad, he says.
While I think most are con-
fident we will see some growth
in the UK, a lot of consultancies
are actively expanding their op-
erations in areas showing bet-
ter growth than their tradition-
al strongholds in the UK and USA.
So there is a lot of activity in the
Middle East,Asia and Africa.
Adapting to change
There are obviously very dif-
ferent customs and cultures
in each country within these
areas and so consultancies are
looking for people who can show
they are flexible and adaptable
to cope with doing business in a
totally different way from what
they have been used to.
Make yourself stand out
Hence, if Leaman were to pass on
advice to any young person con-
sidering a career in management
consultancy, it would be to learn
a language.
In addition, there is a single
buzz word consultancies are us-
ing to describe the type of can-
didate that will always stand out
from the crowd.
Authenticity is the word every-
ones using for the characteristic
which is really in demand, he says.
Transparency is very much in
demand with colleagues and cli-
ents. Nobody wants to work with
someone who doesnt give them
the full picture; nobody wants
the wool pulled over their eyes.
Efficiencies in demand
Richard Stewart, Managing Di-
rector of consultancy recruit-
ment agency, Mindbench, agrees
that people skills are very im-
portant in the current mar-
ket which is proving buoyant
as small and medium consul-
tancies have continued to hire
through the entire year.
The large firms reached their
yearly hiring targets early on and
are now generally more cautious
given the uncertain economic
outlook, he reveals.
The smaller and mid-size con-
sulting firms continue to hire in
significant numbers. The firms
with specialist expertise in the
areas of cost reduction includ-
ing BPR, supply chain and pro-
curement, continues to be high
demand. This is as a result of the
needs for corporates to cut costs
in a tough market. Likewise,
firms with expertise in risk-re-
lated areas of financial services
are in high demand as the level
of regulatory legislation affect-
ing banks continues to increase.
Question: Has demand for
consultants suffered with the
economic downturn?
Answer: Driving efciency
programmes is actually
boosting recruitment demand
for exible, skilled consultants
but mainly in the private
sector
SEAN HARGRAVE
SHOWCASE
Authenticity is the
word everyones
using for the
characteristic
which is really in
demand
Alan Leaman
Chief Executive of the MCA
QUESTION & ANSWER
How has the credit crunch
and economic turmoil
impacted the financial services
industrys requirement for
consultant services?
!
Before 2008 nancial servic-
es companies werent look-
ing at their cost structures or
overall strategies in the same way
as other sectors,such as manufac-
turing and retail were.Times were
good so it was understandable.
However, for the past three
years or so theyve been starting to
seek guidance on cost and strategy
to help them become more com-
petitive. Diferent companies are
at diferent stages on the journey.
What sort of areas are
financial services companies
looking at?
!

The big one, that Im in-
volved with, is systems.
There are savings and ef ciencies
to be made across any company
but the nancial services compa-
nies are very keen on engaging
management consultants to look
at the computer systems they
have in place.
When the economic situation
was a lot better they were invest-
ing in expensive bespoke systems
that were built virtually from
scratch.This makes them expen-
sive to maintain because its such
a specialist job. So, theres a lot of
work going on helping banks to
pick where they can rely on more
generic computer systems. This
enables them to save money as
well as lowers the risk they expe-
rience by only a select few IT ex-
perts being able to maintain spe-
cialist systems.
What about the overall
strategic picture?
Strategy, in the past, wasnt
central to purchasing deci-
sions but it most denitely is now.
Financial services companies are
taking a far closer look at what
they invest in and if it delivers on
their strategy.
I think a lot of companies realise
they are not diferentiated enough
and so everyones waiting to see
what happens when Virgin takes
over Northern Rock. Will it be an-
other challenger brand? So were
seeing a lot of management con-
sultancy activity around dening
what each company stands for,
where it sees itself going and how
it can focus entirely on the cus-
tomer at the same time as appeal-
ing to new customers bases.
Tim Kerr,
Director,
Novo Altum
!
UNDERSTAND
THE DEMAND
2
STEP
STAND OUT FROM THE CROWD
Alan Leaman, Chief Executive
of the MCA, discusses
the growing demand for
management consultants with
demonstrable skills
PHOTO: PROVIDED BY THE MCA
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Traditionally, the
public sector and global
enterprises have provided
the main demand for
management consultancy
services. However,
changes in market
conditions and how
modern consultancies
are now prepared to work
is helping to open up the
SME market.
Certainly, Stella Bowdell, Head of
the Institute of Consulting, is no-
ticing an increased interest in
small and medium businesses to
hire experts they might have previ-
ously considered too expensive or
not suited to a company their size.
SMEs have perhaps traditional-
ly thought they werent the type of
company to bring in consultants,
but thats changing, she says.
A lot of company heads are re-
alising that if you bring in con-
sultants its actually a lot better
value than going to the lengths
of hiring someone. If they know
they need a part of the business
turning around or refocused, and
they havent got the skills inter-
nally to see to it, then bringing in
an expert for a pre-determined
length of time is actually really
good value.They dont need train-
ing up and youre not committed
to employing the person or peo-
ple once the project is finished.
In safe hands
One of the big advantages that
working with management con-
sultants will provide for the
board of an SME is they can allow
directors to get on with the day
to day running of the business
while an expert, with a fresh pair
of eyes, addresses the business
concern they have.
At the same time, it would
appear that flexible billing is do-
ing more than any other change
in the industry to give SMEs the
confidence to bring in consul-
tants. For many small company
directors there has always been
a fear that they could be faced
with a large bill and not necessar-
ily have all their objectives met.
However, Bowdell is finding that
many consultancies are now will-
ing to offer tempting assurances.
Payment by results is certain-
ly something were seeing a lot
of, she says.
Its because consultants are
normally so talented and that
theyve got results in the past
for similar companies looking to
achieve similar goals that they
can go in with full condence and
SMEs opening
up to consultants
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Innovating
through fresh
eyes
Against the backdrop of an
economic downturn and
many goods and services
being commoditised, stand-
ing out is crucial.
Hence, the driving force behind
many new engagements with
management consultants is com-
ing from companies looking for
a fresh pair of eyes to help renew
their ofering and help diferenti-
ate them.
If you leave milk in the saucer,it
goes sour, sums up Huw Hilditch-
Roberts, Director in Charge of the
Institute of Consulting.
Thats why companies are ea-
ger to step back and re-evaluate
what they do and the best way of
getting that new perspective is
someone whos had experience in
helping other businesses innovate
in diferent industries. Sometimes
the clients have a clear idea where
they want to go but often they
cant see the wood for the trees
and need someone to come in and
guide them.
According to Hilditch-Roberts,
this can include a wide variety
of areas. It could be a consultant
coach improving performance
and helping executives discover
new routes to market,or an IT spe-
cialist improving the bottom line
through more cost-efective sys-
tems which allow the business to
become more agile and improve
speed to market.
Innovation does not necessar-
ily mean new goods and services,
then, but can also include chang-
ing processes or ways of working
which enable the end product to
be improved and more attractive
than rival oferings.
SEAN HARGRAVE
ensure they are paid by results.
Quite often this could mean that
rather than a consultant saying
they need so many days, theyll
actually explain that it will prob-
ably take between a range of days
to complete the work and they on-
ly need to be paid if its completed
to the clients satisfaction.
Niche firms
Also,with the rise of boutique con-
sultancy agencies, she is observ-
ing that SMEs who may have been
put of working with a large rm
now appear happy to have the op-
tion of engaging a smaller agency.
By contracting a small team
of consultants who are experts
in the niche area where the SME
is seeking to improve, they can
proceed with greater confidence
they have dedicated experts and
that, crucially, they will contin-
ue to deal with the same person
or people once an agreement has
been signed.
SMEs have perhaps
traditionally thought
they werent the type
of company to bring
in consultants, but
thats changing
Stella Bowdell, Head of the
Institute of Consulting
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PROFESSIONAL INSIGHT
Management consultants are all about driving growth but taking none of the credit,
according to Paul Winter, President of the Management Consultancies Association
Unsung heroes driving growth
B
ehind most suc-
cessful business an-
nouncements and
turnarounds there
is nearly always sol-
id advice from man-
agement consult-
ants who are often long-gone by the
time the CEO gets a standing ova-
tion at the AGM.
That is certainly the experience
of Paul Winter, President of the
Management Consultancies Asso-
ciation who believes that is exact-
ly how it should be.
Management consultants have a
long, proven history of being a reli-
able source for growth, he says.
So whenever you see a company
or organisation has come on in leaps
and bounds you can almost always be
certain there was engagement with
management consultants involved.
The fact they never get the plaudits
or are never featured in the head-
lines about the turnaround is ne,its
what the role is all about.
Were in the background and
the pats on the back should always
go to the people who show strong
leadership through getting a good
and well-advised management
team around them.A management
consultant will get the job done
and make sure theyre replaced so
someone else can carry on the pro-
gramme when theyre gone.
Crossover specialists
One of the major challenges a man-
agement consultant has to get over,
other than accepting a clients board
will always take the credit,is how the
role actually goes against what most
people are brought up to believe.
Management consultants are
hired by boards who want to drive
growth and turn around a business
yet most business people, like ev-
eryone else, expect people to be ex-
perts in just one area.
Were a nation of specialists, we
all grow up and then do a job that we
largely stick to,becoming an expert
in that area, reects Winter.
The thing is,becoming an expert
can be limiting because people as-
sume thats all you can do. Manage-
ment consultants are the opposite.
Theyre people who are very good
at what they do but they dont spe-
cialise in doing one thing in one in-
dustry.Its all about taking what you
learn and observe in one industry
to another because things are gen-
erally highly repeatable. More of-
ten than not the hugely successful
business turnaround stories come
simply from taking something that
works well in one industry and in-
troducing it into another.
Decisive and early
Hence,most of what a management
consultant will bring to a company
is observing how things are done,
looking at good behaviour and re-
placing the negative behaviour
with something that has worked
elsewhere. Inventing a new service
or product is almost unheard of,
Winter assures,but helping them to
This stimulus for growth and
innovation can only come about
when a management consultant
has made an assessment of the
board and unit leaders they are
working with.
To help a company grow,youve
got to be very canny at under-
standing people and making ac-
curate judgements about them,
Winter reveals.
You have to gure out where
peoples strengths and weaknesses
are, but crucially you have to estab-
lish who you can trust. You need to
gure out who is really backing the
process and who you can trust to
carry it through and keep on driv-
ing it once youre gone.
The benet for client compa-
nies is that once they have over-
come the understandable concern
of allowing in consultants to show
them how to do things better,they
are likely to have a more success-
ful company and they are more
likely to use management consul-
tants again.
The key, Winter maintains, is to
act early and be reassured when
making the decision that others in a
similar position have done so in the
past and will do so again. The big-
gest risk is acting late and allowing
rivals to steal a march on your busi-
ness and its customer base while
you ponticate on whether some-
thing needs to be done.
Management
consultants
have a long,
proven history
of being a
reliable source
for growth
Boosting
public bodies
If management consultants
have to get used to watching
someone else receive the
plaudits for transformation
in the private sector, then
public sector work only
deepens the requirement
not to expect positive
headlines and awards.
The crucial diference between the
two sectors is that, perhaps ironi-
cally, success in the private sec-
tor can appear very public while
in the public sector it is decidedly
private. Rather than concerning
growth, most current public sec-
tor engagements will be around
ef ciencies,points out Winter.
The public sector,particularlyin
the current time of austerity,is main-
lylooking for efficiencies, he says.
So a lot of the work is in the sort
of advances that wont really be
very visible outside of the organ-
isation. Of course, public authori-
ties arent like businesses: they
cant grow or export themselves as
theyre usually a local authority or
government department.
Winter believes that although
the public sector is scaling back
engagement with management
consultants, there is still much
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Lifestyle | Health
DOES THE CLIO ECO
MEASURE UP TO THE REST
OF THE GREEN CROP?
FIND OUT IN MOTORING TOMORROW
31
FIT IN
THE CITY
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
Top gifts for
gym fiends
W
hether youre trying to nudge a
loved one in a healthier direction,
or stuck for a gift for your fitness
fiend friend, these are the fitness
gizmos that would make my Christmas list.
The perfect stocking filler for the gym
bunny, the new SmartShake is no ordinary
shaker cup. With three different compart-
ments, you can store anything from a handful
of nuts to your keys in one section while sip-
ping your protein shake from another. Ace.
9.99, smartshake.co.uk.
Technogym describe their home cable and
pulley resistance system, Kinesis Personal, as
a piece of fitness equipment like no other. I
cant really argue with that. A flat, 3.5 square
metre station designed to accommodate 200
exercises, it comes with a hefty price tag
(6,877) but is a fine looking bit of kit. Finer
still if you have a budget that can stretch to
12,982 for a 24k gold leaf covering. Check it
out at technogym.com.
If youre stuck for a pressie for the person
who has everything, how about this for origi-
nal? Ellis Brighams Learn-to-Ice-Climb
voucher is just 50 and entitles the recipient
to a one-hour session of ice climbing at their
Covent Garden store (where theres an 8m ice
wall). Head www.vertical-chill.com
StepSuccess is no ordinary pedometer pro-
gramme not only does the activity monitor
(aka pedometer) give you an accurate calorie
burn (most pedometer-type devices respond
to a gentle shake so you can cheat), you also
have access to a huge online community and
apps galore with the 12-month subscription.
http://www.stepsuccess.com.
TRX are the market leaders in suspension
training and theyve just added the Rip
Trainer to their range, a piece of kit weighing
less than 2kg that enables you to increase
muscle strength, challenge your core and
perfect for the golfers among you or your
family boost your rotational power. For
more details go to www.trxtraining.com.
Visit www.laurawilliamsonline.co.uk or follow
me on twitter @laurafitness
Birchenall only looked about 70. That
means he cant have been more than -
what? Quickly I do the maths. Surely
not. That means he cant have been
more than about 45 when we were at
school, I say to Nick, incredulously.
I know. Scary, replies Nick. Im sure
Birch-Them-All looked about a hundred
back then. Even through a haze of chalk
dust. He looked younger at your party 25
years ago.
Maybe retirement works. Or maybe
he moisturises, I suggest.
Get the beers in Granddad, says
Nick pointedly, downing his remaining
half a pint.
The only people who were young at
the party were my kids, the waiting staff
and your girlfriend, I reply.
You mean the lovely Mirjana? Well,
Im just brushing up my Godparenting
skills with her, says Nick.
I choke on my beer. How did you
manage to swing that with Emma? I
was surprised she even invited you.
Oh, were best pals again. I took her
out for lunch and
What?
Just kidding, says Nick.
Look, we need I begin but Nick
interrupts. We stayed in actually. Had
oysters.
Ha-ha. We do need to talk business
Nick.
Im absolutely happy to renounce
Satan, says Nick, crossing his heart.
I dont mean Godparent business. I
mean your business. The one thats going
bust, I say, emphatically.
Its not going bust. Its a cash flow
issue.
Nick
Anyway, Caroline Davidson
I correct Nick. Davison. Theres no
second d.
The fragrant Caroline, whatever her
name is. I was talking to her at your
party and she suggested I We? That
we chat to her SME lending team. She
thinks they could do something for us.
So, am I a clever boy or what?
Im lost for words. And after a
moment, Let me get the beers in.
City Dad will continue next Tuesday.
For previous episodes go to cityam.com
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CITY DAD
EPISODE 40: BEER, BUSINESS AND BIRCH-THEM-ALL
Living in the city doesnt mean you cant enjoy the thrill
of extreme sports and a new bike track in
Tottenham just made it even easier, says Steve Dinneen
Pete Bowcock from
the "Old Skull Race
Team" sprints around
the Lordship Loop
track in Tottenham
Picture:
DaveMacPhotos
and without flying half way around the
world can head to the new Lordship
Loop mountain bike track in Tottenham.
The 391m course, which opened last
week, boasts rollers, berms, roller doubles
and step-up jumps to test your cycling acu-
men to the max.
The International Mountain Biking
Association-affiliated track is open all year
and is free for the public to use, although
some of the more difficult routes will be
beyond beginners. Those with a competi-
tive edge will also have the chance to enter
British Cycling supported races at the
course from next year, with all levels
catered for. If youre not quite up to racing
standard, local club The Trax runs classes
for 8-15 year-olds and are considering
adult courses in the new year.
After a few laps through the Tottenham
dirt, you may well start to dream of rat-
tling through the mean streets of Chile.
Just leave the suit at home.
DORKING (50 MINS FROM VICTORIA)
Dorking is host to a number of great moun-
tain-biking trails, including Pitch Hill, Holbury
Hill and Leith Hill to the south and Ranmore
Common and Box Hill to the north. Navigate
the stunning scenery and youll find enough
routes and jumps to keep you going for
months.
AYLESBURY (53 MINS FROM MARYLEBONE)
A veritable warren of routes lie in the hilly
Chilterns around Aylesbury and Reading.
Good spots include Aston Hill, Wendover and
Ashridge, where local cycling groups are
usually happy to let new-comers tag along.
Further afield towards Swindon is Ridgeway,
which is famous for its network of mountain
bike trails. The well-worn paths are ideal for
relative novices as well as hardcore adrena-
line junkies.
UNDER ONE HOUR AWAY
I
n Chile there is a downhill bike race
built through the middle of the city
of Valparaiso. If you have never seen
the footage, get your phone out and
watch the YouTube video. If you have no
signal, stop what you are doing and go to
the nearest computer. If youre in the
supermarket, abandon your basket; if
youre on the underground, get off at the
next stop.
The four and a half minute clip shows a
rider hurtling through insanely steep cob-
bled streets, flying down rows of stairs and
jumping through buildings. At one point
a stray dog almost meets its maker under
his tyres. At the finishing line, he looks
down and you realise he rode the course
wearing a business suit.
For adrenaline-seeking City workers,
this is an impossible dream; only a hand-
ful of riders in the world could finish the
race. Those wanting to recreate the experi-
ence in a less terrifying environment
Get your
adrenaline
fix without
leaving
London

HEAD SOMMELIER AND MANAGER OF
LUTYENS RESTAURANT
ANDREW CONNOR
QUAFFERS CORNER
n the great age of exploration, Portuguese
sailors would fill the holds of their ships
with the wines of Madeira and sail to the
New World. Like many wines of the era,
destined for export, they were fortified
grape spirit was added to improve their stabil-
ity and keeping properties.
As the ships crossed the wide oceans the
barrels of wine nestled in their bellies were
gradually heated by the tropical sunshine
and the wine inside began to cook. It is this
process of heating and the consequent oxi-
dised character of the wine that makes
Madeira so distinctive.
It also gives it the useful property that,
unlike other wines including other fortified
wines, a bottle of Madeira can be opened,
enjoyed, and the bottle can be left half fin-
ished on the shelf for months without dete-
riorating. In a sense, this is because the
wine has already spoiled: it goes to show
that the concept of a faulty wine can be
rather narrow and prescriptive.
In the world of fortified wines, there are
two paradigms; Sherry-style where the
wine is fermented to dryness (all the grape
sugars are converted to alcohol) before the
spirit is added and any sweetness is added
later, and Port-style where the addition of
spirit stops the fermentation leaving some
unfermented grape sugars remaining in the
wine. Madeira is generally made in the Port
fashion.
The traditional grape varieties of Madeira
(still used for the most premium wines) are
Sercial, Verdelho, Bual and Malmsey. These
correspond, handily enough, to styles of
increasing sweetness and richness, so a
Sercial is a light style suitable as an aperitif
where a Malmsey is a powerful and rich
wine that is the perfect finish to a big meal.
Cheaper, commercial, styles will be labelled
Dry, Medium Dry, Medium Sweet and
Sweet.
This year marks the 200th anniversary of
the founding of one of the great Madeira
houses, Blandys. Why not celebrate their
birthday with the Alvada five years old (a
contemporary blend of Bual and Malmsey,
available at Waitrose) or really push the
boat out, so to speak, with the Colheita Bual
1993 (available from Planet of the Grapes).
You dont need to finish the bottle right
away but Im certain you wont be able to
resist for long.
Follow Andrew on Twitter
@LutyensWine
Stuck for wine
this Xmas? Try a
Madeira my dear
FOOD & BOOZE NEWS
BY STEVE DINNEEN
KRUG TOASTS HAPPINESS WITH EXHIBITION
Krug today launches its Happiness exhibi-
tion at The Royal Academy of Arts, in
which it asked celebrities to create their
own version of happiness and donate it to
the exhibition. David Bailey, Vivienne
Westwood and Tony Blair are among those
to have contributed to the exhibition, which
will raise money for the The Royal Academy
Schools.
HARVEY NICHOLS REOPENS FIFTH FLOOR CAFE
Harvey Nichols Fifth Floor Caf has reopened
following its first major refurbishment in
twenty years. The Knightsbridge institution
now boasts a bigger, open plan space with an
interior created by EDGE Architecture +
Design alongside a new food and drink menu.
The firm says the new interior incorporates
elements of luxury, glamour and wit synony-
mous with the Harvey Nichols experience.
Alyn Williams at
The Westbury
37 Conduit Street W1S 2YF
Tel: 020 8283 5036
FOOD hhhhh
SERVICE hhhhh
ATMOSPHERE hhhii
Cost per person without wine: 65
A
lyn Williams, who was
head chef at Marcus
Wareing at The Berkeley
for four years, was sick of
being the bridesmaid. You could
tell hes been wearing white for
years.
Now he has his name above the
door at The Westburys flagship
restaurant but getting the job
youve always wanted isnt easy
just ask Gordon Brown. Hes
cooked for me once before
(Williams, not Brown thats a
story for another day), at a chefs
table at The Berkeley: a glutinous
12 course affair, which would take
some beating.
So much beating, in fact, that it
didnt but it was a pretty even
contest, which is still a ringing
endorsement. We ordered two tast-
ing menus one vegetarian and
not one dish fell flat. The fourme
dAmbert gougers (bread-balls
filled with cheese) were so light I
Alyn Williams debut sparkles
The Westburys
new restaurant
doesnt disappoint
Lifestyle
showing off. The pace was flaw-
less just enough time to remi-
nisce about the passing of one
before another arrived. Some
restaurants never nail timing
like that: Alyn Williams seems to
have done it in just two weeks.
For the main course the
only choice on the set menu,
although the chef will vary
the other options it if you ask
him nicely I took myself by
surprise, inexplicably order-
ing the Cotswold chicken
with smoked egg and
charred leek over the
Devon beef sirloin. I was duly
rewarded. Williams painted a
dusky, Constable-esque land-
scape on my plate, with murky
greens lurking around the edges
of a globular terracotta egg yolk,
which oozed satisfyingly when
lanced with a fork. I would love
to tell you how good the gnocchi
was, but it had disappeared
from my guests plate before I
got a chance to taste it. She
assures me it was very good.
Order the cheese and youll be
treated to the sight of two wait-
ers heaving a gigantic bureau of
cheese less a trolley than a
wagon. Even The Chief from One
Flew Over the Cuckoos Nest
would have failed to sling this
thing through a window,
although if they had been order-
ing cheese boards it would have
been a very different movie.
The dessert tiramisu with
nutella brioche and limoncello
slush struggled to compete
with the ferocious aftertaste of
the cheese, proving to be the
weakest link in an excellent
meal.
Given the quality of the food,
it seems churlish to pick up on
the dcor. So here we go. There is
a chapter in Bret Easton Ellis
American Psycho in which
Patrick Bateman, at some point
between murdering prostitutes
and exchanging embossed busi-
ness cards, meets his younger
brother Sean for lunch. In an
unexpected flourish, the
Westbury has plucked Alyn
Williams (the restaurant, not
the chef) from my mental pic-
ture of this scene. Enormous,
glowing glass bowls loom over
the booths, jarring with the
dark wood paneling. The carpet
is worse: it sparkles. At first
glance it looks like a gigantic
hen party has trouped through
the restaurant, shedding tinsel
and broken glass and tears in its
wake. The seats hailing from a
more somber ilk seem reluc-
tant to stand in it.
The overall effect is some-
thing akin to a 1980s nightclub
not necessarily unpleasant
but verging alarmingly close to
gauche. Some of the artistic
license is better rewarded: one
wall features a bank of back-lit
terrariums, self contained eco-
systems filled with weeds and
herbs found in Williams food.
From a distance they look like
tiny aquariums, which I sup-
pose fits with the nightclub
ambiance.
But dcor is dcor and food is
food. Williams is a master of his
game; his subtle flavours seem
effortless; the sommeliers wine
recommendations were spot on
(especially the 2008 Sancerre
Rouge). And, while 55 for a tast-
ing menu is hardly pocket-
change in these troubled
economic times, neither is it
unreasonable.
Williams is finally the blush-
ing bride; take along some con-
fetti to celebrate at very least
itll blend in with the carpet.
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had to stand on the table and
chase them around the ceiling.
The cauliflower panna cotta
with acorn, served in a martini
glass, was almost spectacular,
although it disappeared a little
too quickly to be fully appreci-
ated. The Dorset snails
slithered down a treat,
far exceeding the
(admittedly fairly
low) expectations
set by the menu,
which promised
snails/soil/weeds.
I could list every
starter but it
would seem like
The carpet sparkles
like a hen party has
trouped through,
shedding tinsel and
broken glass and
tears in its wake
Below: Alyn Williams
WORDS BY STEVE DINNEEN
T
E
R
R
E
S
T
R
I
A
L
DEATH IN PARADISE
BBC1, 9PM
Dwayne is in high spirits after meeting
a new woman on a night out, but his
joy is cut short when she is found dead
the following morning.
MONEY
BBC2, 9PM
Exploring how couples and families
manage to live on 40,000, the
average British income for a household
with two working adults.
THIS IS ENGLAND 88
CHANNEL 4, 10PM
New series. Sequel focusing on the
relationship between Lol, now a single
mother haunted by the events of the
last series, and her soulmate Woody.
BBC1
SKY SPORTS 1
7pmSky Sports News at Seven
7.30pmLive Scottish Premier
League Football 10pmSuper Six
Final Countdown 10.30pm
Revista De La Liga 11.30pm
Football Asia 12amScottish
Premier League Football 1.30am
Revista De La Liga 2.30amSuper
Six Final Countdown 3amFootball
Asia 3.30amScottish Premier
League Football 5am-6amRevista
De La Liga
SKY SPORTS 2
6.30pmSquash 7.30pmSuper
Six Final Countdown 8pmBritish
Basketball 10pmSports Unlimited
11pmTen Pin Bowling 12am
British Basketball 2amBadminton
3am-3.30amISAF World Sailing
Championship
SKY SPORTS 3
7pmBadminton 8pmTest Cricket
10pmGolfing World 11pmLadies
European Tour Golf 12amGolf
12.30amBadminton 1.30amTest
Cricket 3.30amLadies European
Tour Golf 4.30amGolf 5am-6am
Ten Pin Bowling
BRITISH EUROSPORT
7pmBoxing 10pmGT Academy:
Road to Dubai 10.15pmWorld
Touring Car Championship
11.15pmIntercontinental Rally
Challenge 12.15am-12.45am
Cross-Country Skiing
ESPN
7pmLive FA Cup Football
10.15pmSerie A 12amESPN
Press Pass 12.30amEredivisie
Review Show1.30amUFC
4.30amPlanet Speed 5amSerie
A Rivals 5.30am-6amFIS
Alpine Ski World Cup Report
SKY LIVING
7pmCriminal Minds 8pm
Supersize Kids 9pmAmericas
Next Top Model 10pmCriminal
Minds 11pmBones 12amJerry
Bruckheimers Chase 1amCSI:
Crime Scene Investigation
2.40amBones 3.30amCSI:
Miami 4.20amCSI: Miami
5.10am-6amJerry Springer
BBC THREE
7pmTotal Wipeout: The Final
8pmGlamour Models, Mum and
Me 9pmDont Tell the Bride:
Christmas Revenge 10pm
EastEnders 10.30pmHim & Her
11pmFamily Guy 11.45pm
American Dad! 12.30amDont Tell
the Bride: Christmas Revenge
1.30amHim & Her 2amGlamour
Models, Mum and Me 3amThe
Real Hustle: New Recruits 3.30am
Skin Deep: The Business of Beauty
4am-5amTourettes: I Swear I
Can Sing
E4
7pmHollyoaks 7.30pmHow
I Met Your Mother 8pm
Shipwrecked: The Island 9pm
Rude Tube: Ultimate Champions
10pmTool Academy 11.05pm
PhoneShop 11.40pmThe IT
Crowd 12.10amThe Big Bang
Theory 1.05amScrubs 1.55am
How I Met Your Mother 2.20am
PhoneShop 2.45amThe IT Crowd
3.10amGreek 3.55amRules of
Engagement 4.15amWildfire
5am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmAmerican Pickers 9pm
Cash Cowboys 10pmSeeking
Salvage 11pmAncient Aliens
12amDecoding the Past 1am
Seeking Salvage 2amCash
Cowboys 3amHeir Hunters 4am
America: The Story of the US
5am-6amAncient Discoveries
DISCOVERY
8pmWheeler Dealers Revisited
9pmCoal 10pmSwamp Loggers
11pmIce Pilots 12amBear
Grylls: Born Survivor 1am
Coal 2amSwamp Loggers
3amDeadliest Catch 4.40am
Moon Machines 5.30am-6am
How Its Made
DISCOVERY HOME &
HEALTH
7pm18 Kids and Counting 8pm
Supernanny 9pmMystery
Diagnosis 10pmBaby ER 11pm
My 40-Year-Old Child 12am
Mystery Diagnosis 1amBaby
ER 2amMy 40-Year-Old Child
3amSupernanny 4amLabour
and Delivery 5am-6amBringing
Home Baby
SKY1
8pmThe Great Treehouse
Challenge 9pmInside Gatwick
10pmFILMA Knights Tale 2001.
12.35am35mm1.05amBig
Trouble in Thailand 1.55am
Armed and Dangerous: Ultimate
Forces 2.45amMental 4.20am
The Man Who H ad Minutes to
Live 5.10am-6amBill Baileys
Birdwatching Bonanza
BBC2 ITV1 CHANNEL4 CHANNEL5
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
TVPICK
6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders: BBC News
8pmHolby City
9pmCHOICE Death in
Paradise
10pmBBC News
10.25pmRegional News;
National Lottery Update
10.35pmImagine: Books The
Last Chapter? 11.40pmFILM
Heavenly Creatures 1994. 1.15am
Weatherview1.20amSign Zone:
Frozen Planet 2.20amSign Zone:
The Story of Ireland 3.20am
MasterChef: The Professionals
4.20am-6amBBC News
6pmCelebrity Eggheads
6.30pmStrictly Come Dancing
It Takes Two
7pmVictorian Farm Christmas:
The farmers celebrate the
festive season in Victorian
style.
8pmMasterChef: The
Professionals
9pmCHOICE Money
10pmLifes Too Short
10.30pmNewsnight: Weather
11.20pmLeonardo: Biography
of Leonardo da Vinci.
12.20amThe Company
1.55amBBC News
4.20am-6amClose
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmThe Adventurers
Guide to Britain
8pmHigh Stakes
9pmMy Childs Not Perfect
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24
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45 10
7
11
Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
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KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
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
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Fundamental (5)
4 Destined (5)
7 Complexion (3)
8 Sufuse with
colour (5)
9 Cause to move
forward with
force (5)
10 One-hundredth
of a yen (3)
11 Machine used for
printing (5)
14 Concise in manner (5)
17 Pulse vegetables (5)
20 Acute pain (5)
23 Animal kept for
companionship (3)
24 On your own (5)
25 Make a rhythmic
sound (5)
26 Alias (inits) (3)
27 Very small spot (5)
28 Plant exudation (5)
DOWN
1 Barrage balloon (5)
2 Animal prized
for its fur (5)
3 Board game (5)
4 Deceptive move (5)
5 Narrow to a point (5)
6 Dig deeply into (5)
12 Perennial herb with
grey-green bitter-
tasting leaves (3)
13 Earths nearest star (3)
15 Hens produce (3)
16 Immoral act (3)
17 Troublesome children (5)
18 Roused from slumber (5)
19 Talk (5)
20 Essential oil or
perfume obtained
from owers (5)
21 Fragrant rootstock
of various irises (5)
22 Country, capital
Sanaa (5)
T
A
I
E
P T
G
S
H

4

4

4

O C L O C K D L
V U I M P E D E
E L A T E S F V
R L S P L I C E
S T E A M U A R
S W A G M A N
A C C A N T I C
R E A M E R T E
M P A L L I E D
E V E L Y N E A
D E T E R R O R
9 8 4 7 9 2
8 4 2 1 6 5 3
3 2 1 7 6 4 8 9
7 5 8 5 1 5 2
3 5 2 1 7 8
6 8 2 7 4 3 1 9 5
7 9 9 8 6 3
1 7 3 9 5 1 8
2 6 1 4 3 8 6 9
2 8 1 4 9 3 5
8 9 1 7 2 3
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
SLAVERING
Lifestyle | TV&Games
Sport
34
ENGLANDS iconic World Cup win-
ning fly-half Jonny Wilkinson yester-
day announced his retirement from
international rugby.
The 32-year-old, arguably Englands
greatest ever player, won 91 caps over
the course of an injury-plagued
career and also represented the
British and Irish Lions on two tours.
Wilkinson will forever be remem-
bered as the man who kicked
England to glory in Australia eight
years ago, but with youngsters such
as Toby Flood and Owen Farrell gun-
ning for his place, the Toulon No10
has decided the time is right to bow
out.
In a statement, Wilkinson said: I
would like to take this opportunity to
announce my retirement from inter-
national rugby.
To do so fills me with great sad-
ness, but I know I have been
blessed in so many ways to
have experienced what I
have with the England
rugby team.
Wilkinson retires sec-
ond on the all-time Test
scoring list with 1,246
points 1,179 of those for
England placing him
just behind New
Zealands Dan Carter. His
record for his country includes six
tries, 162 conversions, 239 penalties
and a record 36 drop
goals.
To say I have
played through
four World Cups,
two Lions tours,
91 international
games and a
ridiculous num-
ber of injuries
and other set-
backs gives
me an incred-
ibly special
feeling of ful-
fillment, he
added.
I will continue to focus ever hard-
er on my goal of being the very best I
can be with Toulon Rugby Club and
continue to embrace and enjoy wher-
ever that path takes me.
Tributes to Wilkinson, hailed as the
ultimate professional, poured in last
night including from Englands inter-
im head coach Stuart Lancaster and
former team-mate Lewis Moody, who
announced his own retirement from
international rugby in October.
Im humbled to have played along-
side him, said Moody. Im saddened
but his contribution over the years,
his work ethic and commitment, has
been immense. He put everything
into what he did. It was incredible to
watch him train and perform.
End of the road for England legend Wilkinson
BY JAMES GOLDMAN
RUGBY UNION
l Second youngest England interna-

tional at 18 years and 314 days.
l Kicked the extra-time drop goal that
won England the 2003 World Cup final.
l Total of 277 points at Rugby World
Cups is 50 more than anyone else.
l Total of 1,246 points is second only
to Dan Carters 1,250 in the history of
the sport.
l England won 67 of the 91 Tests
Wilkinson played.
l Finished with a record 1,179 points
for England.
JONNY WILKINSON | THE PERFECT 10
Lampard ignites race
Late penalty from Chelsea super-sub ends Citys unbeaten
run and catapults Villas-Boas side back into the top four
CHELSEA manager Andre Villas-Boas
declared his teams faltering Premier
League title challenge back on track
after Frank Lampard climbed off the
bench to puncture leaders Manchester
Citys unbeaten record.
Lampard, left out again, staked his
claim for a recall by slamming home
the 83rd-minute penalty that complet-
ed the home sides deserved comeback
against a City side reduced to 10 men
by the sending off of defender Gael
Clichy.
It hoisted the Blues back up to third
place, leapfrogging London rivals
Tottenham and Arsenal, further justi-
fied Villas-Boass belief that he is here
to stay and widened the tiny fissures
beginning to appear in Citys hitherto
excellent season.
Lampard will enjoy the glory, but
credit must go to former City striker
Daniel Sturridge, whose shot won the
penalty and who also
crossed for Raul
Meireles to can-
cel out Mario
Balotellis second-
minute opener.
Victory in the battle of the
top flights two richest clubs moved
Chelsea within seven points of City,
feeding their managers confidence
that they can prevail in one of the most
open title battles for some time.
Its a very gratifying win for us, said
Villas-Boas. It changes a little bit our
challenge for the Premier League.
Seven points in this league at the
moment, with seven teams competing
for the title, is nothing. And a lot of
games will continue to happen.
Shortening it to seven points is good for
us but we need to continue to perform.
Villas-Boas, who also denied asking
his players to celebrate with him after
goals, was unrepentant at City contro-
versially being denied a first-half penal-
ty for a foul on David Silva that could
have put them two goals ahead.
I was made aware there might have
been contact with David Silva, but its
unlucky for him, he added. That is
the nature of the game. At least our
penalty is a blatant penalty so nobody
can say anything about that one.
City manager Roberto Mancini
restored the quicksilver Balotelli to the
starting line-up despite the Italian
flouting a curfew by visiting an Indian
restaurant -- and engaging in what has
been described as a playful rolling pin
swordfight -- late on Saturday night.
Within 98 seconds, Balotelli had
proven he is even better value on the
pitch than off it, and even more rapier-
like with ball at feet than
when wielding baking
apparatus, by skipping
nonchalantly round
goalkeeper Petr Cech to
open the scoring.
W h i l e
B a l o t e l l i
applied the
final cut, it
was Sergio
A g u e r o
who sliced
Chelseas notorious high line to rib-
bons. Back to goal on the right wing, he
darted inside, turning John Terry and,
with a waft of the outside of his right
boot, found Balotelli lurking behind
Branislav Ivanovic. One-nil.
City looked assured, powerful, while
Chelsea reeled and skidded in the teem-
ing rain, and twice should have
increased their lead. First, Aguero shot
narrowly wide and then referee Mark
Clattenburg turned down Silvas strong
penalty claim following an apparent
trip by Jose Bosingwa.
Reprieved, Chelsea found their feet
and Sturridge engineered the reply. The
youngster teased Clichy, reached the
bye-line and crossed to the penalty spot,
where Meireles had escaped Yaya Toure
to volley a 34th minute equaliser.
The balance had swung, as Sturridge
demonstrated by firing a rising half-vol-
ley over straight after the re-start, and
Vincent Kompany, the bedrock of Citys
defence, flirted with a second yellow
card before Clichy earned his, for a rash
tackle on Ramires in the 58th minute.
Enter Lampard. Uncanny timing has
long been his calling card, and he was
on hand when Joleon Lescott was
penalised for handling Sturridges shot.
Having missed his last two spot kicks,
he opted to blast down the middle, and
Joe Hart leapt obligingly to his left.
BY FRANK DALLERES AT STAMFORD BRIDGE
FOOTBALL
2
1
CHELSEA
MANCHESTER CITY
Man City 15 12 2 1 49 15 38
Man United 15 11 3 1 35 14 36
Chelsea 15 10 1 4 33 18 31
Tottenham 14 10 1 3 30 18 31
Arsenal 15 9 2 4 31 23 29
Liverpool 15 7 5 3 18 13 26
TOP SIX
TEAM PLD W D L F A PTS
ARSENAL chiefs are planning to take
the club into new territory next sum-
mer by embarking on a pre-season
tour to Africa.
The Gunners are in talks about
playing a number of matches in
Nigeria next summer, before the
2012-13 campaign gets underway.
Other tours are also being dis-
cussed and it is understood Arsenal
could schedule a repeat of last sum-
mers trip to the Far East.
Arsenal have more scope for play-
ing abroad next year as they have can-
celled the Emirates Cup, their
traditional pre-season tournament,
because of the London 2012 Olympics.
The club has a particularly large
following in Africa, thanks to stars
such as Cameroons Alex Song,
Ivorian Gervinho and Moroccos
Marouane Chamakh.
Profile-raising and often lucrative,
foreign tours have become increasing-
ly common among the Premier
Leagues elite, with Manchester
United and Chelsea visiting Asia and
the United States in recent years.
Arsenal, meanwhile, have lost
defender Andre Santos for three
months after doctors advised the
Brazilian needs surgery on his ankle
ligament injury.
Arsenal to conquer new frontier
with pre-season tour of Nigeria
Results
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email sport@cityam.com
35
SPORT | IN BRIEF
Kauto Star set for King George
HORSE RACING: Four-time winner Kauto
Star has been entered for the King
George VI Chase at Kempton Park on
Boxing Day by his trainer Paul Nicholls.
The 11-year-old defied the critics by
beating Long Run to win the Betfair
Chase at Haydock three weeks ago.
Hoy caught in Foy crossfire
FOOTBALL: British cyclist Sir Chris Hoy
has been accidentally targeted on
Twitter by Tottenham fans angry with
referee Chris Foy following Sundays
defeat at Stoke. Foy made several con-
troversial calls and a number of Spurs
fans have mistakenly written to Olympic
champion Hoy expressing their displeas-
ure. Getting some rather amusing grief
from Spurs fans! Hoy said on Twitter.
Just for the record 1) I dont need glass-
es and 2) I do not lead a double life as a
ref. Thats Chris Foy.
KEY MOMENT
Manchester Citys early dominance
was hardly reflected by a 1-0 scoreline
handed to them by Mario Balotellis
second minute strike and a famous
Chelsea comeback may never have
materialised had referee Mark
Clattenburg spotted Jose Bosingwas
trip on David Silva inside the penalty
area in the 14th minute. Only after
super-slow-motion replays was it
apparent that contact had been
made, but the official could not have
been better placed to see it.
TALKING POINT
Despite making a record-breaking start to the season, should Manchester United win
at QPR in Sundays early kick-off, City will start at home to Arsenal later that after-
noon from the an all too familiar position, beneath their local rivals. Suddenly, the
Premier League title race has taken on a totally different complexion and Citys reac-
tion to having their authority questioned will provide fascinating viewing. Their
resolve and discipline was tested last night, as it was in Naples last month, and on
both occasions they have been found wanting. Discipline and control was required in
the face of a Chelsea storm instead experienced campaigners like Gael Clichy and
Yaya Toure lost their heads. The signs for the chasing pack are encouraging.
MATCH ANALYSIS
BY JAMES GOLDMAN
GAME STATS
CHELSEA 2 - 1 MAN CITY
7 ATTEMPTS ON TARGET 4
6 ATTEMPTS OFF TARGET 4
5 CORNERS 1
58% POSSESSION 42%
4 YELLOW CARDS 3
0 RED CARDS 1
0 OFFSIDES 1
7 FOULS AGAINST 11
11 FOULS CONCEDED 7
82% PASS COMPLETION 84%
DUGOUT VIEW
After the sending off the game
was totally changed. We did a big
performance in the first half, we
played very well and should have
scored two or three goals. There was
a big penalty; the referee was very
close but didnt see. We didn't score
other goals in the first half when we
had the chance. It doesnt change
anything for us. We knew before we
could lose one game. We lost today
but the season is very long.
Man City boss, Roberto Mancini
BY FRANK DALLERES
FOOTBALL
Shanghai eye
Drogba and
Anelka pairing
AMBITIOUS Chinese outfit
Shanghai Shenhua want to
reunite Nicolas Anelka with his
old Chelsea strike partner Didier
Drogba.
Anelka, 32, will move to the Far
East in January on a two-year con-
tract believed to be worth 8m a
year, it was confirmed yesterday.
But, not content with just one
former Stamford Bridge frontman,
the Chinese Super League club
have also approached Drogba.
Like Anelka, Drogbas current
contract expires in the summer,
meaning he is free to discuss
terms with other clubs next
month.
Shanghai Shenhua director
Zhou Jun said: Drogba is an excel-
lent player. We got in touch with
him two weeks ago. From our
clubs perspective, we have this to
say: if he is willing to come, we will
definitely welcome him.
Drogbas recent return to form
has increased the 33-year-olds
hopes of being offered a new two-
year contract in west London.
However, his advancing years
raise questions about where he fits
into manager Andre Villas-Boass
plans to overhaul an aging squad.
Anelka is likely to be followed to
Shangahi by former Fulham and
Monaco coach Jean Tigana, whom
Zhou confirmed had agreed a deal
to take charge.
Anelka will move to China in January, it
was confirmed yesterday Picture: PA
FOOTBALL
for title
Lampard had
missed his last
two penalties
Picture: PA

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