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MPs say
Bank must
cede power
THE GOVERNMENT should use its over-
haul of regulation to bring about a rad-
ical shift of power from the Bank of
England back to the Treasury, an influ-
ential committee of MPs has recom-
mended.
The Treasury Select Committee,
headed by Conservative MP Andrew
Tyrie, says that the Banks antiquated
governance means it is not transparent
or accountable enough to wield the
new powers it is being given. Instead,
ultimate responsibility for financial sta-
bility in a crisis must rest with the
chancellor.
A chancellor can be expected to take
responsibility in times of turbulence,
the committee says, suggesting that the
Treasury should have the power to seize
control of decisions involving the use of
liquidity and credit facilities that could
risk public funds.
This would, it says, create a clear
line of accountability for decisions
taken through the chancellor to parlia-
ment. The MPs report on Bank
accountability also suggests slimming
down the court of the Bank from 12 to
eight members and renaming it the
supervisory board.
The board would then take responsi-
bility for conducting reviews of the
Banks activities and publishing them,
which the Bank has refused to do
despite recent requests.
In addition, the monetary policy
committee and new financial policy
committee must have a majority of
non-Bank members, MPs say.
TREASURY VICTORY ON RENMINBI: P5
BY JULIET SAMUEL
REGULATION

Hopes that Berlusconi might resign buoyed markets Picture: REUTERS


www.cityam.com FREE
BOTH SIDES
OF THE HEDGE
FUNDS REVEAL
THEIR VARYING
FORTUNES P6
QPR AND AIRASIA BOSS
ON RACISM IN FOOTBALL
TONY FERNANDES INTERVIEWP33
BUSINESS WITH PERSONALITY
Certified Distribution
29/08/11 till 02/10/11 is 98,447
Issue 1,506 Tuesday 8 November 2011
A DEFIANT Silvio Berlusconi clung
on to power last night, dismissing
calls for his resignation as bond
yields rocketed to euro-era records
and markets see-sawed on rumours
he was set to resign.
Yields on Italian bonds soared to
6.68 per cent, higher than the levels
seen in August, when the European
Central Bank restarted buying
bonds to lower borrowing costs.
The 14-year high stoked fears that
Italy is approaching the point at
which its debts will become unsus-
tainable.
Thursdays sale of three-month
debt was cancelled yesterday, as
fears grew that Italy may soon be at
a point where either no investors
will be prepared to take the risks
required to lend Italy money, or
Italy will become unable to pay its
debts.
The European Financial Stability
Facility (EFSF) needs to be a lot big-
ger to convince investors that it can
withstand an Italian default, and it
also needs to make clear where its
funding will come from, Simon
Hill, head of investment research at
Buck Consultants, told City A.M.
A crucial budget vote takes place
today, and hopes that a new govern-
ment might take more action on
implementing the budgetary disci-
pline demanded by the EU and IMF
helped markets move off lows.
Rumours spread yesterday morn-
ing that Berlusconi was about to
resign, after a meeting in which
leaders within his own party were
reported to have urged him to go.
Investors cheered the possibility
of Berlusconis departure, with the
FTSE and other European indices
rising by close to one per cent on
hopes of a resignation.
However, Berlusconi took to
Facebook to deny the suggestions,
writing Rumours of my resigna-
tion are groundless on his official
page, quickly deflating the bubble.
The FTSE 100 ended the day down
0.3 per cent, the DAX was down 0.63
per cent and the CAC 40 finished
down 0.64 per cent. The VIX index
rose 0.265 per cent to 30.240.
Economists feared that the politi-
cal situation was impacting more
strongly on markets than any fun-
damentals, highlighting the impor-
tance of finding a real resolution to
the debt problems afflicting the
peripheral Eurozone economies
and Italy.
The mere fact that you have
equity markets rallying on specula-
tion that the Italian Prime Minister
was to resign today shows that
investors have little confidence in
Berlusconis ability to address and
contain Italys debt problems, said
Joshua Raymond, chief market
strategist at CityIndex.
MORE EUROZONE: P2, P3, P4
BY TIMWALLACE
EUROZONE

BERLUSCONI:
ONTHE BRINK
News
2 CITYA.M. 8 NOVEMBER 2011
YIELDS on Italian debt continued
their upward surge yesterday,
despite the European Central Bank
(ECB) appearing to have boosted its
bond purchase programme in a bid
to control debt costs in struggling
peripheral states.
Yields on 10-year Italian debt
reached a 14-year high of 6.67 per
cent yesterday, with analysts again
warning that the governments
finances could be rendered unten-
able if the figure rises above seven
per cent. Meanwhile, Italian five-
year credit default swaps (CDS)
increased by 2.15 per cent to
503.255.
The ECB has splashed a jaw-
dropping 183bn since it began
its bond-buying programme last
year. It revealed yesterday that
it bought 9.52bn in bonds last
week the most the bank has
spent since mid-September.
The jump in outlays
comes days after
Mario Draghi (right)
took over from Jean-
Claude Trichet as the ECBs new
president, and as the bank contin-
ues to publicly resist pressure
from among others -- the
US, Britain and Russia, to
step up the purchases.
In his first news con-
ference as ECB presi-
dent last week, Draghi
offered no commitment
to scaling up the banks
b o n d - b u y i n g ,
describing it
as a limit-
ed pro-
gramme.
ECB ups bond-buying
yet yields still rising
BY JULIAN HARRIS
EUROZONE

THE FIRST bond issue by the European


Financial Stability Facility (EFSF) in its
new form was slightly oversubscribed
yesterday.
Raising 3bn (2.57) to fund
Irelands refinancing needs, the EFSF
paid 104 basis points (bps) above mid
swaps, implying a yield for investors of
3.59 per cent.
The last time such a 10-year bond
was offered, investors snapped it up at
17bp above mid swaps, and it was nine
times oversubscribed. Germany and
the EFSF both have triple-A credit rat-
ings, yet German borrowing costs are
down at 1.78 per cent on 10-year debt.
Analysts believe the spread is linked
to German debt being seen as the
most secure in the Eurozone, while
France also guarantees the EFSF and
may be at risk of losing its coveted
triple-A rating, damaging the EFSF as a
whole and illustrating the higher risk
investors are taking by lending to the
fund.
Yet Stephen Gallo of Schneider FX
believes Eurozone leaders should stay
confident. There is demand for EFSF
paper because the market wants an
alternative to investing in the US dol-
lar in the medium term, and this can
be seen as a precursor to a common
Eurobond, he told City A.M.
The sale was originally due to go
ahead last week but the EFSF suspend-
ed it in the face of market turmoil
caused by doubts over whether Greece
would stick to the euro debt rescue
plans agreed late last month.
BY TIMWALLACE
EUROZONE

KARL Marx is not exactly back, but he


is being mentioned far more frequent-
ly these days, and not just on the steps
of St Pauls. I was even asked recently
(by an accountant whose pay probably
put him in the UKs top one per cent of
earners) whether I thought that elevat-
ed levels of unemployment meant that
Marx had a point.
My short-answer was no my longer
one was that name-dropping the
author of Das Kapital has become a
cheap, lazy and morally indefensible
way of pointing out that the present
system is failing to produce enough
jobs and growth, which of course is
true. It is also a facile way of declaring
empathy with the St Pauls protesters,
without actually having to grapple
with difficult questions.
It is evident there are massive prob-
lems in our society. The question is not
whether something needs to change
that is obvious. What isnt is what
exact reforms are needed. Marx is
hardly the only thinker to have pre-
dicted business cycles and given the
rest of his agenda, you would have
thought that those seeking answers to
our woes might actually spend a little
more time reading other economists
who actually appreciated the astonish-
ing growth that well-functioning capi-
talism could deliver.
Communism has been tried repeat-
edly. It doesnt work. Most people just
about remember this (though most
youngsters will have forgotten by the
time the next crisis comes about).
Communisms degree of failure is
utterly incomparable with the failure
of our present, mixed economy system
(what we have is not pure capitalism or
EDITORS LETTER
ALLISTER HEATH
7
th
Floor, Centurion House,
24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
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 Jo Simpson
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
Distribution helpline
If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email
distribution@cityam.com
neo-liberalism but a weird and
unstable combination of markets com-
bined with a large public sector, high
and graduated taxes, hugely powerful
monetary authorities and a huge
amount of regulation). Communism
leads to collapse, starvation and dicta-
torship. For those who have forgotten
about this, I would recommend the
Black Book of Communism: Crimes,
Terror, Repression, written by a group
of French authors led by Stephane
Courtois. The book details how at least
94m people lost their lives as a result
of communism in the twentieth cen-
tury, especially in China, the Soviet
Union, Cambodia and North Korea but
also in Africa, Afghanistan, Eastern
Europe, Vietnam and Latin America.
Communist regimes were defined by
repression, executions, torture and
labour camps; one gruesome episode
led to the death from starvation of 4m
Ukrainians in the 1930s.
The broader failings of commu-
nism, which delivered a miserable
standard of living for ordinary folk, is
easier to document. Two natural
experiments were run last century: an
unusually pure version of capitalism
in Hong Kong versus real communism
in China; a slightly more diluted but
still highly capitalist model in post-war
Germany versus a socialist system in
East Germany. In both cases the tri-
umph of capitalism was complete.
Instead of wasting time investigat-
ing the views of an economist whose
overall system failed disastrously, we
should be learning from those who
understand that a free-market is the
only possible system but who also
grasp that current institutions tend to
lead to booms and busts, especially if
the price system is distorted by under-
priced credit or underpriced risk as a
result of central bank or government
actions. If you are into dead econo-
mists, try reading Ludwig von Mises or
F.A. Hayek. The latter predicted the
crash of 1929 and the stagflation of
the 1970s; their followers predicted
the dot.com bubble and the collapse of
2008. Marx should remain buried.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
We need reform
but that does not
make Marx right
Printed by Newsfax International,
Beam Reach 5 Business Park,
Marsh Way, Rainham, Essex, RM13 8RS
INTEL SUPERCOMPUTER TO AID
START-UPS IN EAST LONDON
Intel has thrown its weight behind
the Tech City project in East London,
earmarking one its supercomputers
for start-up companies in the areas
Silicon Roundabout to use free of
charge. It has four such computer
clusters in Swindon, each of which is
capable of handling 2.25 trillion cal-
culations per second.
WHAT THE OTHER PAPERS
SAY THIS MORNING
COUTTS TO BE FINED OVER AIG PROD-
UCT SALES
The City watchdog will fine Coutts &
Co, the private bank that counts the
Queen among its clients, about 6m
for the way it sold savings products
linked to failed US insurer AIG. The
fine, expected to be announced as
soon as Tuesday, is one of the stiffest
penalties ever handed down by the
Financial Services Authority.
EURO UNCERTAINTY KEEPS RISING
EFSF raises 3bn for Ireland in face
of low demand and choppy markets
ANALYSIS l ECB steps up bond purchases
7/08 14/0821/0828/08 4/09 11/09 18/09 2/10 25/09 9/10 16/10 23/1030/10
24
12
14
16
18
20
22
10
8
6
4
2
bn
weeks
TOTAL
183bn
ANALYSIS l Italian bond yields keep rising
Jun Jul Aug Sep Oct Nov
6.5
6
5.5
5
Silvio Berlusconi
Rumours of my resignation are groundless.
Like Comment Translate Share
562 people like this.
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Berlusconi is bluffing in a last desperate attempt to save
himself, said opposition politician Dario Franceschini
FRANCE announced 65bn of tax
hikes and budget cuts over five years
yesterday, as President Nicolas
Sarkozy seeks to protect the countrys
creditworthiness in financial mar-
kets without killing his chances of re-
election in six months time.
Ministers salaries, including
Sarkozys, will be frozen as part of the
plan, as the government aims to
make the austerity measures more
politically palatable. Sarkozy previ-
ously attracted criticism for increas-
ing his salary by 170 per cent.
The main goal of the measures is to
protect Frances top-notch credit rat-
ing, which allows the government to
borrow cash at relatively cheap rates
despite the ongoing Eurozone crisis.
But economists said the govern-
ments growth outlook was still too
optimistic, even after cutting the
forecast for 2012 to one per cent from
1.75, meaning the latest measures
might not be enough for France to
meet its deficit reduction goals.
They also said that much of the
plan would have to be carried out
after the April and May election.
BY HARRY BANKS
EUROZONE

France announces fresh


measures for austerity
DAVID Cameron warned the
Eurozone nations they must sort
themselves out before any interna-
tional aid is given, while negotia-
tions between Greeces political
parties continued in an effort to
form a new unity government.
The Prime Minister addressed the
House of Commons, telling MPs
that the UK was prepared, in prin-
ciple to give more to the
International Monetary Fund (IMF)
following discussions at the G20 in
Cannes.
However he also warned that
specific commitments were not
made because the Eurozone must
do its best to combat the debt crisis
before it receives cash from outside.
The Prime Minister reiterated
chancellor George Osbornes stance
that a resolution to the Eurozone
crisis would be the single biggest
boost to the British economy this
autumn.
The Eurozone must now do
what is necessary and see through
the agreement it reached in
Brussels ten days ago, he added.
BY TIMWALLACE
EUROZONE

Cameron returns to UK
talking tough on Europe


















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News
3 CITYA.M. 8 NOVEMBER 2011
BANK STOCKS DIVED AGAIN
3.08%
2.37%
3.64%
2.48%
1.264%
1.352%
2.438%
Lloyds
GOLD RISES AS
LOW-RISK ASSET
Commerzbank
RBS Deutsche Bank
Crdit Agricole Santander
GREEK party leaders are
struggling to agree on a new
prime minister, despite EU
demands that the political
class commit itself to the
nations financial salvation
and end the chaos threaten-
ing the entire euro project.
Yesterday came and went
without any accord on who
will lead a new national
unity coalition, despite talk
that a former vice president
of the European Central
Bank, Lucas Papademos,
would get the job. The cabi-
net is due to hold an emer-
gency session today, and
officials said negotiations
were under way on the 100-
day coalition that must win
parliamentary approval for a
Eurozone bailout.
Frustration was apparent
in Brussels where officials
said the government had to
show it was serious about
promises Athens has made
to the EU and IMF in return
for the 130bn bailout.
Greece struggles to
agree on new premier
EUROZONE

A WAVE of poor economic data


knocked confidence even further in
the Eurozone yesterday, piling more
pressure on the beleaguered single
currency area.
Retail sales across the 17 member
states fell 0.7 per cent in September
compared to August, official figures
showed -- far worse than economists
expected.
It was a pretty disappointing fig-
ure, said Juergen Michels, an econo-
mist at Citigroup. The 0.7 per cent
decline in retail sales really suggests
there is a huge amount of uncertain-
ty coming through to consumers.
In the same month, German
industrial output fell at its sharpest
rate since February 2009, fuelling
concerns that Europes stuttering
growth engine could go into reverse
before the end of the year as an
abrupt slowdown abroad eats into
demand for its exports.
From Germany news also emerged
that investor confidence in the
Eurozone has hit a two year low. The
Sentix index sank by 2.7 points to -
21.2 points, signalling a continued
weakening of the economic dynamic
in Euroland.
Sentix said that while improved
confidence has been recorded in
other regions this month, such as in
the US and Asia excluding Japan, the
Eurozone remained stuck in the
mud.
The current situation remains
under pressure and document there
is the risk of recession in Euroland,
the report warned.
Meanwhile productivity across the
European Union dropped at its
fastest rate or over two and a half
years, a study by Markit revealed.
The UK was the only big four
economy to record improved private
sector productivity, with Germany,
France and Italy all printing further
declines. Even on this side of the
channel, the overall rate of increase
in output per work was only mod-
est, Markit said.
New series of
bearish data
hits Eurozone
Banco de Valencia, Spains smallest
listed bank, warned its plan to
increase its capital by 60m (51m)
may be insufficient. Following a rou-
tine inspection by the Bank of Spain,
Banco de Valencia said it had share-
holder approval to hike capital by up
to 50 per cent if needed. That would
imply about 200m. Trading in its
shares was suspended until the after-
noon by the bourse regulator after a
report in El Mundo paper said it had a
funding gap of about 600m.
Spanish bank in
capital warning
MF Global chief Jon Corzine has faced heavy criticism for his strategy Picture: REUTERS
BY JULIAN HARRIS
EUROZONE ECONOMY

BANKING

Focus | Euro crisis


4 CITYA.M. 8 NOVEMBER 2011
JEFFERIES has cut its holdings of
European sovereign debts by nearly
half in the past week, in a move to dis-
pel fears over its exposure to the
region.
The US investment bank has slashed
its long and short positions in the sov-
ereign debt of Portugal, Italy, Ireland,
Greece and Spain by $1.1bn each since
Friday, it said in a statement and expe-
rienced no meaningful profit or loss
on todays trading activity.
Jefferies said its net exposure to the
Eurozone now stands at $59m.
Jefferies halves
its EU exposure
BANKING

NEARLY two-thirds of positions from


the British unit of MF Global were
still open yesterday, a week after it
filed for bankruptcy protection,
sparking frustration about delays in
moving business to new brokers.
UK administrators KPMG said
954,000 positions were open out of
the 1.6m in place when MF Global
Holdings filed for bankruptcy pro-
tection on 31 October.
KPMG is in talks about selling
parts of the MF Global business in
the UK. It said the $633m (395m) in
missing client assets were unlikely
to affect the winding down of the
British arm.
KPMG said the entire foreign
exchange portfolio in Europe had
been unwound, consisting of 25,000
trades with a notional value of
$60bn.
On Sunday regulator CME also
asked brokers who took over cus-
tomer accounts from MF Global not
to distribute any of the money
before the end of today.
Meanwhile traders on the London
Metal Exchange said turnover was
thinner than usual yesterday.
MF Global clients set for further
delay as empires sell-off begins
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THE CITY has taken a major step
towards becoming the first offshore
trading centre for the Chinese renmin-
bi after the FSA began work on loosen-
ing up regulations for Chinese banks,
City A.M. can reveal.
Following moves by HM Treasury
(HMT) to push the issue up the agenda,
the FSA has kicked off due diligence
on a proposal from Chinese banks that
could exempt them from regulations
preventing the movement of large
amounts of money to China.
The Treasury has been keen to speed
up the process as part of a major
charm offensive to lure Chinese trade
through London rather than the
Eurozone. The goal is to set up a 24-
hour renminbi market in the UK.
But it is fraught with hurdles both
because of Britains ultra-strict regula-
tors and Chinas reluctance to cede
control over its currency.
The FSAs move follows reassurance
from Chinese regulator, the China
Banking Regulatory Commission, that
the UK subsidiaries of its banks will
adhere to certain limitations on their
movement of money out of Britain.
Currently, the rules impose strict
caps on the amount of exposure a
bank can build up to one single coun-
terparty if that entity is not in a state
governed by Basel Committee rules.
In effect, it means that a UK sub-
sidiary of a Chinese bank such as Bank
of China UK or China Construction
Bank could accrue deposits of renmin-
bi abroad but would be unable to get it
all back to their parent company in
China to invest it.
They need the FSA to give a nod to a
larger-scale movement of cash back to
Beijing as a precursor to establishing a
renminbi market in London. The FSAs
stringent adherence to the rulebook
risked damaging the City because
Chinese banks were beginning to sim-
ply route their trade through EU coun-
tries that apply the rules less strictly.
Banks such as HSBC and Standard
Victory in battle to bring
renminbi market to City
George Osborne is trying to make London a world-class renminbi centre Pic: REUTERS
News
5 CITYA.M. 8 NOVEMBER 2011
Chartered have lobbied hard for the
UK to loosen its rules to avoid losing
out to rivals on the continent.
The problem has built up because
companies outside China are increas-
ingly keen to use the renminbi, caus-
ing seven per cent of Beijings external
trade to be settled in the currency ver-
sus one per cent just a year ago.
An HMT spokesman said it was
working on any regulatory or infra-
structure issues that need to be
addressed.
THE
BANKING FILES
BY JULIET SAMUEL
EXCLUSIVE

MORE evidence of the struggles of the


hedge fund industry has emerged as
Lansdowne Partners admitted record-
ing losses of up to 20 per cent at two
of its key funds.
Lansdowne, which manages
$13.3bn (8.31bn) and is one of many
City institutions to have hired Tony
Blair after he left Downing Street, has
been caught out by rising investor
concern over the political risk in glob-
al banks.
The UK Equity fund, Lansdownes
largest with $7.8bn of assets under
management, is down 15.6 per cent
in the 10 months to the end of
October, a stark contrast to its average
annual return of 14.85 per cent in 10
years since it was set up.
Its long-only $490m UK Strategic
Investment fund has been hit harder
and is down 20.4 per cent so far this
year, continuing a weak performance
since 2007.
Lansdowne, which made millions
of pounds by shorting banking stocks
such as Barclays and Anglo Irish Bank
during the crisis, is seen as one of the
best-connected funds.
Last year it hired Blair to give a
small number of geopolitical talks to
its executives and co-founder Paul
Ruddock and fund manager David
Craigen have both donated to the
Conservative Party. Last month
Lansdowne sold its $850m stake in
Goldman Sachs.
The average hedge fund globally
gained 0.8 per cent in October, leav-
ing it down 7.7 per cent for the year
after a volatile summer that has dam-
aged performance across the indus-
try, according to Hedge Fund
Researchs HFRX index.
The FTSE 100 index was, in con-
trast, up 8.1 per cent over the month.
Roberto Botero, director at Sciens
Capital Management, which runs
$3.7bn in hedge fund assets, said
managers had adopted fairly conser-
vative strategies over the quarter,
saving their money so it can be allo-
cated when turmoil has eased.
Turmoil hits
Lansdowne as
hedgies falter
BIG name managers such as Crispin
Odey and Michael Hintze have bucked
the autumn gloom in hedge funds by
making gains amid hopes Eurozone
leaders are finally tackling the debt cri-
sis.
Odey Asset Management, one of
Europes biggest hedge fund firms,
saw its European fund, run by founder
Crispin Odey, gain 9.1 per cent in
October, according to Thomson
Reuters Lipper data.
The gains mean the fund, which has
performed strongly in recent years but
which has suffered this year as Odeys
bullish stance on stocks has been hit
by falling markets, is now down
around 15 per cent this year.
Meanwhile, CQS Directional
Opportunities, a roughly $1.3bn
(812m) multi-strategy fund run by
CQSs Australian founder Michael
Hintze, soared 13.8 per cent during the
month.
One of the top performers was
Horseman Capitals Global fund,
which rose 18.5 per cent in October,
taking year-to-date gains to 6.89 per
cent, thanks to bets on the luxury
brands, luxury retailers, luxury autos
and Chinese bank sectors. The once
high-profile fund has shrunk in size
from $2.8bn to $143m after manager
John Horseman stepped down in 2009.
A FORMER executive at MTV will help
Man Group spearhead its push into
China.
The hedge fund yesterday appoint-
ed Yifei Li as country chair for China.
She will work with Pierre Lagrange,
the star trader who was recently
named chairman of Man Asia.
Man Group has long wished to
grow in the East and is thought to be
planning to open a research and trad-
ing office in the Chinese capital of
Beijing.
Man chief executive Peter Clarke
said: Yifei Lei is widely recognised in
the region for her extensive experi-
ence managing multinationals
growth in the region.
Li, an ex-managing director of MTV
Networks Greater China, and
Lagrange both previously worked for
GLG Partners, bought by Man for
$1.6bn (1.02bn) last year.
Rivals Hintze
and Odey rise
despite gloom
Man hires former MTV
boss for China venture
Beijing could be a lucrative market for Man; inset China chair Yifei Li Picture: GETTY
BY PETER EDWARDS
HEDGE FUNDS

HEDGE FUNDS

News
6 CITYA.M. 8 NOVEMBER 2011
BY PETER EDWARDS
HEDGE FUNDS

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News
8 CITYA.M. 8 NOVEMBER 2011
A WEAK end to the year looms for
British shops, after consumer
spending dropped in October.
Spending was down 0.9 per cent
last month compared to
September, according to a report
published this morning by Visa.
Compared to October 2010, spend-
ing on Visa cards plummeted by
1.9 per cent.
And retailers fear a bleak
Christmas after like-for-like sales
fell by 0.6 per cent in October
compared to the same time last
year, a separate survey also
revealed today.
A lasting lift in consumers
mood needs a sense that better
times will come for jobs, costs and
incomes, said Stephen Robertson
of the British Retail Consortium
(BRC), which compiled the survey.
The chancellor should use this
months Autumn Statement to
help customers and businesses by
offering hope over next years
planned fuel duty and business
rates increases, Robertson added.
Over the last three months total
retail sales are up 1.9 per cent
compared to the same time last
year yet food sales are entirely
responsible for the gain. Sales of
items other than food are down
by 0.3 per cent on last year, in
terms of value.
Allowing for the VAT rise since
last year, that suggests a substan-
tial drop in sales volumes,
Robertson said.
Like-for-like sales, which
exclude expansions in shop
floors, were down by 0.3 per cent
overall, with non-food sales down
by 1.8 per cent.
Gloom on the
high street
as sales drop
BY JULIAN HARRIS
RETAIL

* These views are those of the individuals above and not necessarily those of their company.
There must be a lot of pressure on people this Christmas, but
personally this wont affect what I buy. There is no doubt the
retail industry is suffering, though.
PAUL CLAYTON | JRP UNDERWRITING
When you have a family and kids it is not always easy to cut down: you dont want to let them down. Not everyone is suffering, but for those
who are things have to get worse before they get better. People who cant afford to spend how they usually would should will cut back.
JACKSON SMITH | ROYAL BANK OF CANADA
CITY VIEWS: WILL RETAILERS SEE LOWER SALES THIS CHRISTMAS?
Interviews by Phoebe Torrance
IN ASSOCIATION WITH
www.RateSetter.com Customer Phoneline: 08442490115
Save or Borrow peer to peer at RateSetter.com
People will always try to find spare cash over Christmas, but
with the state the economy is in I think small retailers will
suffer. I am worried about independent shops.
PETER GODFREY | LLOYDS OF LONDON
Consumers are spending less on non-food items in the run up to Xmas
News
9 CITYA.M. 8 NOVEMBER 2011
CLERGY from St Pauls want to go
into City boardrooms to lobby direc-
tors about the gap between the rich
and the poor.
The Right Rev Peter Selby said he
wanted to use the publication of a
report delayed because of the
furore over the Occupy LSX
protests to debate appropriate
levels of pay with chief executives.
He was speaking as the survey
said the majority of City profession-
als think bankers, stockbrokers,
bond traders and FTSE 100 chief
executives are paid too much.
Asked if it meant clergy would
enter boardrooms to ensure recom-
mendations of the St Pauls Institute
report are acted on, Selby said: It
gives us something of a mandate... It
gives us cause, along with every-
thing which is going on, to take this
situation to higher levels and say,
what are you going to do about it?
The churchs institutional com-
plicity in finance had made it a diffi-
cult topic to address in the past,
added Selby, a retired bishop.
The report, Value and Values:
Perceptions of Ethics in the City Today,
includes contributions by St Pauls
former Dean, the Right Rev Graeme
Knowles, and former Canon
Chancellor, Rev Dr Giles Fraser, who
both resigned amid disagreements
over the response to the protests.
The study showed 75 per cent of
City workers think there is too great
a gap between rich and poor and
nearly two-thirds (64 per cent) of
those questioned said salary and
bonuses are their main motivation.
The survey, carried out before the
protests began, involved 515 inter-
views and was carried out to mark
the 25th anniversary of the deregu-
lation of the City. Just over half of
people said the Big Bang had led to
less ethical behaviour.
Last night Occupy LSX said the
report showed a conflict between
morality and financial incentives. St
Pauls has asked the activists to pre-
pare several written responses.
FORUM: P24
Vicars in the
boardroom
to check pay
BY PETER EDWARDS
POLITICS

Occupy LSX has run into a fourth week Pic: Laura Lean / CITY A.M.
NEWS International said yes-
terday its staff had ordered sur-
veillance on two lawyers for
victims suing the group over
the phone-hacking scandal
that has engulfed the group.
The UK newspaper arm of
News Corp admitted that the
action, the latest in a string of
embarrassing and damaging
revelations about illegal eaves-
dropping on phone messages,
was inappropriate.
Private detective Derek
Webb said he had been hired
by the now defunct News of
the World paper to spy on
Mark Lewis and Charlotte
Harris, who represent some of
the victims, the BBC reported.
Lawyers were spied
on says NewsCorp
MEDIA

ONE of Americas top headhunters


has warned Wall Street bonuses
could fall by as much as 50 per
cent.
Ilana Weinstein, founder and
chief executive of executive search
firm IDW, told Bloomberg TV: This
year its going to be a tough year.
Were hearing bonuses at the senior
end are going to be down between
30 and 50 per cent this year.
Weinstein, a former Goldman
Sachs analyst, said between 50 and
80 per cent of bonus awards would
be paid in shares that will vest in
several years time rather than cash.
She added that Wall Street
employees at the more junior end
were expecting bonuses to be
between flat and 15 per cent high-
er. Thats the new up, she said.
Wall Street staff on the sell side
could jump ship to a hedge fund or
other buy-side firm, said Weinstein.
Headhunter: bonuses on Wall
Street could fall by 50 per cent
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ALL MADE TO MEASURE SUITS
LLOYDS insurer Hiscox said steady
losses from catastrophes and a choosy
approach to underwriting this year
had put it in good shape yesterday,
but its investment portfolio lost value
since June as markets plunged.
Hiscox, which insures specialist
commercial risks and reinsurance,
said its revenue from premiums fell
by three per cent to 1.2bn in the
nine months to the end of September.
The only areas to grow were its UK
retail business, which wrote premi-
ums of 280m this year compared to
249.1m in the nine months to
September 2010, and a small increase
in its European business.
Chief executive Bronek Masojada
said Hiscox was waiting for insurance
rates to go up when policies renewed
in January.
The cumulative effect of interna-
tional catastrophes is pushing rein-
surance rates upwards. As nearly a
third of our income comes from rein-
surance, we are ready to benefit at
the January renewal season.
It also surprised analysts by saying
its investment portfolio had lost
value so far this year, making 0.5 per
cent return against inflation of close
to five per cent.
Hiscox has kept 210m reserved
against losses from catastrophes such
as the New Zealand earthquakes so
far this year, but reassured investors
that the only new loss to be added to
it was a net claim of less than 10m
from Hurricane Irene, which swept
the US east coast in August.
Hiscox looks
ahead to New
Year rate rise
INSURERS have warned the UKs
finance regulator that the industry is
unimpressed with the confusion
around the start of far-reaching new
regulation on their capital require-
ments.
The Financial Services Authority has
weathered an angry backlash from the
industry since October when it said it
would delay the start of new Solvency
II rules by a year until January 2014.
Insurers said the change would
force them to comply with two differ-
ent sets of reporting rules Solvency II
and the Individual Capital Assessment
(ICAS) at the same time.
Otto Thoresen, director-general of
the Association of British Insurers
(ABI), told an FSA briefing last week
that the regulator needed to avoid that
situation at all cost.
ABI members do not welcome the
delay in Solvency IIs implementation,
he said. We must provide firms with
viable alternatives.
The FSAs director of insurance,
Julian Adams, defended the change.
What it is emphatically not is a
wholesale delay in the implementa-
tion date, he said.
Our intention is to explore with
firms possible ways of avoiding the
costs associated with the dual running
of an ICAS and Solvency II model.
Insurers urge
FSA to ease
new rules start
BY ALISON LOCK
INSURANCE

INSURANCE

News
11 CITYA.M. 8 NOVEMBER 2011
ANALYST VIEWS: IS THE FALL IN PREMIUM
INCOME A PROBLEM FOR HISCOX? Interviews by Alison Lock

JOY FERNEYHOUGH | BANCO ESPIRITO SANTO


The likely reservations from this update will come from the investments
side where the yield is down. We continue to expect yields to come under pres-
sure, but believe Lloyds insurers have already taken much of the pain here.

Hiscox expects less than 10m losses from Hurricane Irene Picture: PA

SARAH LEWANDOWSKI | PEEL HUNT


The portfolio declined in the third quarter because of a higher equity
allocation and widening corporate bond spreads. Hiscoxs focus remains on capital
preservation, but it is willing to take advantage of market dislocation.

EAMONN FLANAGAN | SHORE CAPITAL


The return reflected the impact of turbulent investment markets, with
about 15 per cent of the bond portfolio in financial bonds, largely senior debt of
strategically important banks. Hiscox said the return improved in October.

ANALYSIS l Hiscox
p
1 Nov 2Nov 3Nov 4Nov 7Nov
372.50
375.00
377.50
380.00
382.50
385.00
387.50
376.80
7 Nov
News
12 CITYA.M. 8 NOVEMBER 2011
BOODLES, the luxury jeweller
beloved by Kate and Pippa Middleton,
could be set for a global push after
seeing annual profits soar by more
than a quarter, City A.M. can reveal.
Pre-tax profits rose 25.5 per cent to
4.71m for the year to 28 February,
according to the accounts of Boodle &
Dunthorne, which were filed last
week. Turnover rose 13.8 per cent to
41.9m and the report also hints at a
strategy to boost global sales.
During the year the company
made sales to overseas clients around
the world of 8.359m (up from
7.822m in 2010)) which the directors
feel illustrates an increased interna-
tional interest in the brand. The direc-
tors consider the company to be
well-placed to take advantage of
opportunities arising in the future.
The firms high-end jewellery sells
for hundreds of thousands of pounds
an item, although it also provides a
range at more affordable prices.
In recent years both Middleton sis-
ters have been spotted at the Boodles
Boxing Ball, an annual event at which
pugilists compete for charity.
The firm is known for its long-serv-
ing staff, which its controlling
Wainwright family ascribe to their
efforts to run the business in a
Christian and ethical manner.
Middleton effect means sales sparkle for Boodles
RETAIL

LONDON restaurateurs Jeremy King


and Chris Corbin are set to retake full
control of their company, three years
after its part-owners collapsed follow-
ing the 2008 credit crisis.
The founders of Rex Restaurant
Associates, which owns several well-
known London venues including The
Wolseley, are close to reacquiring the
50 per cent share in their business,
now under the control of BDO Stoy
Hayward, the administrator to finan-
cial services firm Dawnay Day.
King and Corbin are now in talks to
sell a stake in Rex to a group of private
investors, according to Sky News.
The Wolseley
owners set to
reclaim control
HOTEL and restaurant owner
Whitbread said it had changed the
make-up of its debt facilities yester-
day to rely more on bonds, to bring
down its annual interest bill.
Whitbread, which operates the
Premier Inn hotel chain and Costa
Coffee cafes, exchanged its 930m of
bank loans for a syndicated five-year
loan facility worth 650m to add to
250m in long-dated bonds it had
issued over the past two years.
The change both gives Whitbread a
broader debt funding base to protect
it from any unexpected changes to
interest rates or the banks lending
policies, and a lower overall interest
rate.
We are pleased to have secured
the support of our core relationship
banks for a loan at an attractive rate,
which together with our private
placement notes, meet the medium
term funding needs of the group to
support our growth programme,
said Whitbreads finance director
Christopher Rogers.
Whitbread currently pays six per
cent interest on its debt but that will
fall to 5.5 per cent from next
February onwards.
In September it issued two private
debt placements, of a total 156.4m,
for repayment between 2019 and
2022 at an average 4.8 per cent inter-
est rate. In 2010 it issued 101.8m of
debt private placement notes due in
2017 and 2020.
Whitbread reduces loans
and add bonds for value
RETAIL

PREMIER Foods, the company behind


Hovis bread and Branston Pickle, won
more time to deal with its 1.3bn debt
pile yesterday after its lenders agreed
to move back a crunch test on the
loan conditions.
Premier said the banks would delay
a test of how far its earnings outweigh
its interest payments by three months
until March 31, sending its shares up
9.9 per cent.
Its new chief executive Michael
Clarke will use the extra time to
improve Premiers figures as he tries
to refinance the debt on better terms.
I am very pleased that after shar-
ing our vision and high-level plans,
our banking syndicate has confirmed
its support, he said in a statement.
Premiers shares have lost 90 per
cent of their value since May when
they peaked at 34.8p as trading has
worsened, particularly in its own-label
savoury products and cakes division
Brookes Avana.
The loan covenant Premier would
breach if tested in December states
that its earnings before interest, tax,
depreciation and amortisation (ebit-
da) must be at least 2.75 times its net
interest. Analysts expect Premier to
make 259m ebitda this year, suggest-
ing its interest bill is more than 95m.
The debt was built up through a
series of takeovers such as Campbells
UK and Ireland businesses in 2006, but
it has to pay higher interest rates than
usual because of the debts structure.
Premier Foods wins more
time to meet debt terms
RETAIL

LEISURE

BP was under pressure yesterday


after a 4bn sale of its stake in Pan
American hit the buffers, triggering
renewed questions over the compa-
nys recovery from the Deepwater
Horizon crisis.
The deal was ditched after buyer
Bridas, the oil and gas firm owned by
Cnooc of China and Argentinas
Bulgheroni family, failed to resolve a
string of legal issues. It is chief execu-
tive Bob Dudleys second failed multi-
billion dollar deal this year and has
renewed investor concerns about his
vaunted turnaround of the group.
Dudley hinted last month that the
oil giant could lift its dividend next
February, saying the group had
reached a turning point after its
Gulf of Mexico oil spill.
But the failed deal now puts a ques-
tion mark over those plans.
As with all things to do with BP
the issue is as much to do with risk
and this deal failure does highlight
execution issues again, analysts at
UBS said in a research note.
In May an Arctic exploration deal
with Rosneft collapsed. But BP yester-
day insisted that it would be happy to
hang on to its stake in Pan American,
which it said had good prospects as a
business. It added that its disposals
and strategy were still on track.
BP chief hurt
by deal blow
BY JOHN DUNNE
OIL

Kate
Middleton is
one of the
many
Boodles fans
Picture: REX
ANALYSIS l BP
p
1 Nov 2Nov 3Nov 4Nov 7Nov
460
455
450
445
440
452.80
7 Nov
News
13 CITYA.M. 8 NOVEMBER 2011
THE vast majority of European
investors think it unlikely that other
countries will quickly follow the UKs
lead in forcing banks to separate their
retail and wholesale arms as recom-
mended by the Vickers Commission,
according to a survey by ratings
agency Fitch.
But other states could look into it
in the medium-term, the investors
said, which confirms worries
expressed to City A.M. that interest in
the idea of a ringfence around retail
banking operations could spread.
In the short-term, just 13 per cent
of the fund managers asked who
between them account for 5.8 tril-
lion (5 trillion) in assets under man-
agement think that other states are
in a hurry to put in place their own
version of the Vickers Commissions
proposals, which are currently being
considered by HM Treasury.
The data will raise concerns that
Britain risks damaging its competi-
tiveness as a global financial centre
by forging ahead with new regula-
tions on banks before other states
have done likewise.
The recommendations go beyond
other resolution regimes being devel-
oped. At a time when Eurozone banks
in particular are grappling with more
immediate risks, some of the ICBs
more radical recommendations, for
example around ringfencing, are
unlikely to see widespread replica-
tion anytime soon, said Fitch analyst
James Longsdon.
However, a sizeable minority of
those surveyed 42 per cent believe
that other countries could consider it
if they suffer another banking crisis.
One banking source told City A.M.
that regulators in Belgium, the
Netherlands and Italy have taken an
interest in the Vickers recommenda-
tion to ringfence retail banking oper-
ations from investment banks by
limiting their cross-selling and expo-
sure to one another.
And it is understood that European
banks have held talks with their UK
rivals over the proposals, with the
continental lenders fearful that their
local regulators could eventually take
action.
Other countries will be slow to copy
Vickers ringfence idea, say investors
RYANAIR raised its 2011 profit forecast
by 10 per cent yesterday, saying a focus
on more lucrative routes was pushing
up revenue per passenger and offset-
ting stubbornly high fuel prices.
The budget airline, headed up by
outspoken boss Michael OLeary, said it
had seen virtually no impact from the
global downturn in consumer confi-
dence, but warned traffic would fall in
the coming months as it grounded 80
aircraft because fuel prices made
routes unprofitable.
The airline, which flew over 70m
passengers last year, said it expected to
make a profit of 440m (377.6m) for
its 2011 financial year, up from its pre-
vious forecast of 400m.
Yields -- the keenly watched measure
showing average revenue gained per
mile per passenger -- will grow at 14
per cent in the six months to March,
up from 12 per cent previously fore-
cast. The airline earned 543.5m in the
six months to September, up 20 per
cent, on revenues of 2.71bn.
Focus on more
lucrative routes
boosts Ryanair
AVIATION

SHARES in DTZ have crashed by more


than 86 per cent after the property
consultancy, which is in takeover talks
with several unknown bidders, said
the equity in its business was worth
minimal value, if anything at all.
The company put itself up for sale
last month, just days after its majority
shareholder Saint George
Participations, which owns 55 per cent
of DTZ, was forced to abandon a bid
because of the Eurozone debt crisis.
The collapse of the bid, which
would have seen DTZ then merged
with BNP Paribas Real Estate, left the
agency reviewing its strategic
options.
However, DTZ yesterday announced
that based on the valuation of the pro-
posals it had received so far, and given
its level of debt there is minimal
value, if any, that may be attributed
to its shares.
The fall in the share price has wiped
44m from DTZs market value and
means DTZ is worth less than 10m.
Shares, which were worth as much as
835p in 2006, closed at 2.85p.
The agency, which is saddled with
net debt of 64m, has struggled to
recover since the crisis in 2008.
DTZ yesterday would not confirm
the bidders but said there were no
formal offers on the table yet.
Shares in DTZ
crash by 86pc
BY KASMIRA JEFFORD
PROPERTY

BY JULIET SAMUEL
BANKING

Michael OLearys Ryanair has cut unprofitable routes Picture: REUTERS


ANALYSIS l DTZ Holdings
p
2Nov 3Nov 4Nov 7Nov
25
20
15
10
5
2.85
7 Nov
Sir John Vickers suggestions are unlikely to be taken up outside the UK Picture: REUTERS
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A TAX OFFICIAL lost their bonus follow-
ing a blunder that allowed Goldman
Sachs to escape a tax bill of around
10m, Parliament was told yesterday.
In a hearing by MPs on the Public
Accounts Committee yesterday, Dave
Hartnett, permanent secretary for tax
at HMRC said the error was dealt with
through a staff members annual
appraisal.
HM Revenue & Customs has come
under fire for arranging a so-called
sweetheart deal with Goldman Sachs
that waived 10m interest on a 30m
bill from a failed tax avoidance scheme
on bankers bonuses.
When asked whether that meant the
tax official had lost his bonus, Mr
Hartnett said: I think thats another
way of putting it.
The session was part of an inquiry
into tax deals negotiated by HMRC with
Vodafone and Goldman Sachs, which
were brought to light after findings by
the Guardian and Private Eye.
HMRCs most senior solicitor,
Anthony Inglese and top civil servant
Sir Gus ODonnell, were also asked to
give their accounts.
HMRC has been accused of letting
Vodafone pay only 1.25bn to settle a
tax dispute when the amount owed to
taxpayers should have been around
6bn, leading to protests outside
Vodafones annual meeting in July.
Hartnett has previously described
the sum as an urban myth but MPs
yesterday said the amount of tax lost
could be as high as 8bn.
Margaret Hodge, the Committee
chair, questioned why HMRC appeared
to have a special relationship with big
businesses, doing deals in a way that
would not be possible for smaller enter-
prises or individual taxpayers.
SEE DIARY: P15
HMRC probed
in Commons
BY KASMIRA JEFFORD
TAXATION

News
14
REPSOL MAKES ITS BIGGEST EVER SHALE FIND
ARGENTINE energy firm YPF, the local unit of Spains Repsol, said yesterday it had made a
very large shale oil discovery, identifying unconventional energy resources of 927m barrels of
oil equivalent (boe) in Patagonia. The find is Repsols largest ever, and could elevate
Argentina to becoming one of the worlds leading producers of the oil.
A NIGHT AT
THE OPERA
FOR LEGAL
SOPRANOS
BETRAYAL, revenge and murder it
was business as usual when the Magic
Circle decamped to the dress circle at
Sadlers Wells to watch Allen & Overys
modern-day reworking of Carmen set
in Seville Airport.
The opera, which follows last years
staging of The Magic Flute at
Glyndebourne, involved 74 of the firms
staff past and present. Ex-senior partner
Guy Beringer played El Dancairo, while
Carine Chassol, a banking partner in
the Paris office, played Michaela and
corporate partner Don McGown was the
jaded bullfighter Escamillo.
Trainee lawyers David McDonald and
Edward Rance also helped make the per-
formance a triumph that other City
firms can only dream of, as one client
emailed the next day, while another
described the opera as complete, well-
rounded and, frankly, magnificent.
With reviews like that, it is fair to say
no-one minded that trainee Matt
Farringdon was unable to complete his
star turn as Don Jos due to laryngitis, so
he mimed Act Four as substitute Ed Lee
sang his part from the wings. Nor did any-
one notice that one of the dancers had
been rushed back from hospital moments
before the start of show. No plans for a
transfer to the West End though at least
not in the short-term, said a still-hoarse
McGown, who doubles as head of the law
firms music programme.
SOCIAL NETWORK
FIRST THE Citys forex brokers had voice
trades; then electronic trading came
along and put a mute button on the
conversation.
So prepare yourself for the third act in
the Citys dealing communications says
Stefan Basiuk, the co-founder of
LetsTalkFX.com social FX, or bringing the
worlds most incestuous market closer
together through a private social network.
Electronic trading took away the per-
sonal relationships in the City, said
Basiuk, sitting in the Royal Exchange
where he once worked pre-Big Bang as a
local options trader on the Chicago
Mercantile Exchange. The new genera-
tion of 20-somethings coming into the
City have been using social media forever,
so what tools will they want to use?
Basiuk and his founding partners
who include JP Morgan Chase Private
Banks EMEA chief technology officer
Paul Ronan have so far staked 200k
that the answer is LetsTalkFX, which con-
nects the players in the $4 trillion global
FX community. There is nothing like
us, said Basiuk, as he lines up further
funding talks with five tech investors.
NOT IN THE GOOD BOOK
THESE are testing times in committee
room 15, where members of the
15 EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @dennysharriet
The Capitalist
CITYA.M. 8 NOVEMBER 2011
Left: Flamenco
dancers Kara Lone,
Martina Clay and
Harriet Stephenson
from Allen & Overy in
the firms staging of
Carmen
Above: The Royal
Artillery Band play
at Leadenhall Market
on London Poppy Day
Commons Public Accounts Committee
are trying to get to the bottom of tax deals
negotiated by HMRC with Vodafone and
Goldman Sachs.
Testing for committee chair Margaret
Hodge, certainly. She grew so frustrated
yesterday with the lack of forthcoming
answers from HM Revenues top lawyer
Anthony Inglese, she threw the book at
him, so to speak. She called for a Bible and
made Inglese take the oath.
Testing too for Inglese, who after an
hour more of no comments was asked
by Hodge how much taxpayer money had
been spent on his coaching. None, he
replied. I hope it did not show.
POPPY APPEAL
THE FINAL tally is in, and The Royal British
Legion has confirmed that Londoners
raised almost 450,000 on London Poppy
Day, a new Poppy Appeal record for a col-
lection in a single day.
Perhaps it was the six bands who
played around the capital last Thursday
including the Royal Artillery Band in
Leadenhall Market that encouraged
the City to dig so deeply, with 45,000
collected at Canary Wharf alone.
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MORE NEWS
ONLINE
@
www.cityam.com
Its time for UK institutions to take more risk
W
OULD-BE investors in UK
stocks are in a bad place
right now. The long-only
funds have too few successes
to boast about and the hedge funds
are scared of ever-increasing redemp-
tions.
As far as the majority of the UK
investor base is concerned, IPOs of
untested UK companies are distinctly
off the menu.
Those same investors are also
loathe to back transformational
mergers too. Hence the G4S 5bn-plus
bid for ISS failed; some say it was tor-
pedoed by a reluctance from some
investors to buy out ISS investor
Goldman Sachs at what they believed
was too high a price.
It is too soon to say whether G4S
shareholders were right to have had
qualms about the ISS deal. But
investors in the Prudential, who
vetoed a $31.5bn deal for AIA last year
might be interested to know the
group they turned down is now
worth nearly $38bn.
The loathing of private equity sell-
ers is very real and follows instances
like the float of Debenhams where
private equity groups got out with all
the cream. The existence of private
equity advisers, groups who advise
private equity sellers, to get the high-
est price possible for their stakes, con-
tributes to this feeling of unease.
But if investors are wary of new
companies and transformational
deals, some also seem to be wary of
the very types of groups that are cur-
rently keeping the market alive; the
resource rich groups that are part
owned by Russian oligarchs or other
offshore shareholders. These groups
are often keen to gain a listing in
London and raise billions by offload-
ing a minority shareholding.
Here, UK institutions appear to be
behaving like they still lived in a
world where the FTSE100 index was
comprised of companies like Cadbury
and ICI (both now in the hands of for-
eign owners).
Rather than embracing the new
companies like Polymetal or Essar
Energy, they are running scared of
them, fearing their increasing influ-
ence on the indices and what that
means to their tracker fund offerings.
Yes, there has been the odd corporate
governance disaster (ENRC) but over-
all some of the foreign-owned
resource groups have done well.
As Bank of America Merrill Lynchs
head of equity capital markets Craig
Coben says: The tough markets have
affected the portfolio performance of
institutions, and when performance
suffers, it has a knock-on effect for
their appetite for new issues.
The new issue market will re-open
once we have a recovery in risk
appetite.
For the sake of the London mar-
kets, that appetite for risk had better
return soon.
david.hellier@cityam.com
INSIDE TRACK
DAVID HELLIER
NEWS | IN BRIEF
LOreal reiterates upbeat goal
Cosmetics maker L'Oreal reiterated its
full-year goal to outperform the market
and increase sales and profitability after
strong demand for its luxury products
helped third-quarter sales meet expecta-
tions. Revenue rose 4.8 per cent like-for-
like to 4.94bn (4.2bn) in the three
months to 30 September, the seller of
Garnier shampoo, Lancome creams and
Yves Saint Laurent perfume stated.
US bookseller launches tablet
US bookseller Barnes & Noble has intro-
duced its first ever tablet to compete
with Amazon and Apple for holiday sales.
Barnes & Noble will charge $249 (155)
for the Nook tablet, which is expected to
hit the shelves late next week. That com-
pares to the $199 price tag on Amazons
new Kindle Fire, which will be shipped on
15 November. The firm claims to have a
quarter of the US digital book market.
FORMER ENRC director Ken Olisa yes-
terday slammed as silly a plan by
the mining company to pay $650m
(405.6m) to buy the outstanding 75
per cent of Kazakh coal producer
Shubarkol Komir from its founders.
The ENRC directors were ill
advised to try to do this transaction.
Not because its a bad deal its not.
Its just a bad idea, Olisa told City A.M.
yesterday.
Their priority is to convince the
City that ENRCs corporate gover-
nance is beyond reproach. Trying to
pay $600m to the founding share-
holders so soon after the board revo-
lution was silly and is deeply
unhelpful to the wider debate about
the FTSE.
ENRC decided last week to post-
pone a vote on the deal, fearing the
board would suffer an embarrassing
defeat.
ENRCs independent sharehold-
ers excluding the three founder
shareholders who are selling the
Shubarkol shares had been due to
vote on the deal yesterday.
The London-listed miner planned
to secure control of Shubarkol by buy-
ing the remaining shares from its
founder shareholders for up to
$650m, a figure independently veri-
fied by Lazard, the investment bank.
The companys senior non-execu-
tive director Mehmet Dalman
favoured the deal, saying it gave ENRC
access to good quality thermal coal.
ENRC plan is
silly, says ex
director Olisa
CHIPMAKER InvenSense filed with US
regulators yesterday to sell fewer
shares at a lower price range than it
had originally expected in its initial
public offering (IPO) of common
stock.
InvenSense, which in August
delayed its IPO due to market condi-
tions, said it would sell up to 10m
common shares priced at $7.00-$8.50
(4.37-5.30) each.
The California-based company,
which had filed for an IPO of up to
$100m, originally planned to sell up
to 10.5m shares priced at $8.50-$10.50
apiece.
The companys common stock has
been approved for listing on the New
York Stock Exchange under the sym-
bol INVN, InvenSense said in a filing
to the US Securities and Exchange
Commission.
InvenSense makes motion sensing
chips used in smartphones and gam-
ing devices.
Goldman Sachs and Morgan
Stanley are the lead underwriters for
the offering.
The company was founded in 2003
and booked $130m in revenues for
the 12 months ended 30 September
2011. The deal is expected to price
during the week of 14 November.
InvenSense files
to raise up to
$85m in IPO
Mehmet Dalmans (above) plan was described as silly by ousted director Ken Olisa (below)
BY DAVID HELLIER
RESOURCES

News
CITYA.M. 8 NOVEMBER 2011 17
ANALYSIS l Eurasian Natural Resources Corp
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CAPITAL MARKETS

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Sale is a sensible move but its time to
break out the cava, not champagne
C
ARPHONE took the rough
with the smooth yesterday,
cashing in on one success
while taking the failure of
another on the chin. The US sale
crystallises value for Carphone
shareholders who are in for a pay-
day but the deal is not spectacular
in and of itself. Best Buy has fac-
tored in an expected slowdown in
smartphones in the US next year,
meaning Carphone has missed out
on a premium on the sale.
Shuttering the heavy loss-making
Big Box white goods stores in the UK
is sensible strip them out and
Carphones earnings before interest
and tax (Ebit) are 65m.
Demand for white goods and
flat-screen TVs both staples of the
out-of-town stores show no sign of
picking up in the new year, while
smartphones remain high growth
in the UK.
Rolling out the Best Buy Mobile
formula to emerging markets is a
smart move. The US business was
the only growth division for
Carphone, with Ebit hitting 45m.
However, duplicating the success in
the wildly different Chinese, Indian
and Latin American markets will be
no mean feat.
Chief executive Roger Taylor
called it a low risk move, which will,
in theory at least, limit expenditure
on the venture. One to watch.
BOTTOMLINE
Analysis by Steve Dinneen
CARPHONE Warehouse yesterday
confirmed it has offloaded its US
joint venture for $1.3bn (810m).
The sale of the blisteringly success-
ful mobile phone business to its part-
ner Best Buy was tinged with regret
over the failure of its UK Big Box
joint venture. It confirmed the long
expected shuttering of its 11 white
goods stores after it posted another
quarter of worse-than-expected losses.
Overall the firm posted revenues of
1.59bn, down 4.9 per cent year-on-
year as the slowdown in the con-
sumer electronics market and the
failure of Best Buy UK took its toll.
Pre-tax profits were 8.3m, compared
to 51.2m last year.
The results were broadly in line
with analyst expectations, with the
US deal sending its shares up as much
as 10 per cent before settling back to
close up one per cent.
The proceeds of the US sale will be
returned to shareholders, with
founder Charles Dunstone set for a
payout of around 235m from his 29
per cent stake in the firm.
Carphone said it will maintain its
relationship with Best Buy, and will
launch a new mobile venture cater-
ing for emerging markets. Chief exec-
utive Roger Taylor said: The sale of
our interest in Best Buy Mobile crys-
tallises significant value for our
shareholders. In addition, the agree-
ment is a low risk opportunity to
recreate the success of Best Buy
Mobile and roll out our strategy into
high growth emerging markets.
Carphone hits
forecasts as
it lets US go
BY STEVE DINNEEN
TELECOMS

News
19 CITYA.M. 8 NOVEMBER 2011
NEWS | IN BRIEF
Data traffic to jump ten-fold
Mobile data traffic will grow 10-fold
over the next five years as demand for
video on the go continues to drive
growth. According to new research by
Ericsson, mobile broadband subscrip-
tions grew 60 per cent in the last year
and are expected to jump from 900m
now to almost 5bn in 2016. Total smart-
phone traffic is expected to have tripled
by the end of this year. Ericsson expects
traffic generated by smartphones to
increase 12-fold to roughly equal mobile
PC-generated traffic by 2016.
Telecity to start paying dividend
Data centre operator Telecity said yes-
terday demand remains strong across its
European markets and said its cash
flows will enable it to start paying a divi-
dend next year. The group, whose facili-
ties are located in Europe's major
business centres like London and Paris, is
seeing growth from cloud computing
and social networking. Telecity, which
plans to nearly double its capacity over
the next four years, also announced an
additional server at the Dublin site it
acquired in August.
Google says disputes hurt progress
Googles lawyer has accused Microsoft
of using its patent portfolio to capitalise
on the success of Android, and that legal
disputes are hindering innovation in the
technology industry. Google's patent
counsel Tim Porter told the San
Francisco Chronicle that Microsoft is
trying to use its extensive patent portfo-
lio to make money after its Windows
Phone operating system struggled to
make an impact. Googles Android has
been dogged by patent suits from
Oracle, Apple and Microsoft.
Carphone founder Charles Dunstone is in for a payday after US sale Picture: REX
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LAST CHANCE TO BOOK
HOMEBUILDER Taylor Wimpey said
trading in the busy autumn selling
period had been stable and it is on
track to meet margin targets.
The UKs second-largest volume
housebuilder by market value said its
current order book for future comple-
tions stood at 6,265 homes, against
5,496 homes at the same point last
year.
The group is targeting 10,000 sales
for the year and said it is on track to
deliver a double-digit percentage UK
operating margin in 2012.
Taylor Wimpey, which sold its
North American business earlier this
year, reported an average private net
reservation of 0.55 sales per outlet for
the second half to date, compared
with 0.47 in the same period last year.
Although mortgage availability
remains restricted, we have seen an
ongoing incremental improvement
since the half year results, said the
company in a statement.
This echoed comments from small-
er peer Redrow last week, which said
reservations and prices were stable
while underlying demand is set to
increase despite tough macro condi-
tions weighing on the sector.
But the UK housing market contin-
ues to tread water and housebuilders
are facing further uncertainty as pub-
lic spending cuts and rising unem-
ployment dents confidence. Taylor
Wimpey posted first-half pretax prof-
its of 28.9m earlier this year, against
a loss of 2.3m in the same period last
year. Meanwhile chief executive Pete
Redfern said that a further escalation
of Europes debt problems could
spark a damaging UK banking crisis.
The worse case scenario is that a
problem in Europe causes a UK bank-
ing problem, he said. While the
underlying housing market is strong,
if there was a withdrawal of banking
finance obviously that would be nega-
tive.
OLYMPUSs ousted chief executive
Michael Woodford said he will meet
a member of the third-party panel
probing past M&A deals at the endo-
scope maker in London next week.
I will meet the panel member Mr
Katayama in London, Woodford said
in an e-mail to Reuters.
Eiji Katayama, a lawyer, is one of
six members of a panel headed by
retired supreme court justice Tatsuo
Kainaka that was appointed by
Olympus to investigate a $687m
(429m) advisory fee paid in connec-
tion with its $2.2bn acquisition of
Britains Gyrus in 2008.
Fees paid to advisers in M&A deals
do not typically exceed two per cent.
The group will also scrutinise three
acquisitions in Japan that were quick-
ly followed by large write-downs.
Woodford said last week that he
wanted to meet investigators appoint-
ed to probe the scandal, but believed
it would not be safe for him to travel
to Japan.
The M&A deals have raised ques-
tions about governance at Olympus,
with an internal document showing
that the company replaced its auditor
in 2009 after a disagreement over
how to account for the acquisitions.
Olympus shares have lost more
than half their value since Woodford
was dismissed on 14 October after he
questioned the controversial pay-
ments.
Yesterday, they fell a further 7.5 per
cent to 1,034 yen (8.26).
Former Olympus chief to meet panel
member investigating M&A scandal
ENGINEERING consultant Costain
has said it is continuing to perform
well and that trading is in line with
its expectations.
The groups order book has risen to
2.6bn following major new contracts
awarded by Network Rail and the
development of London Bridge
Station.
In a statement the group said yes-
terday: As well as including in excess
of 600m revenue for 2012, the order
book also provides good long-term
visibility with over 1.8bn of revenue
secured for 2013 and beyond, the bal-
ance of the order book being the
remainder of 2011.
Costain said it was benefitting
from targeting blue chip customers,
which it helps with both general
maintenance and also with meeting
regulations. It also announced the
acquisition of Promanex, an industri-
al support services business operating
in the power, petrochemicals and
nuclear markets.
Costain order book hits
2.6bn with rail contract
ENGINEERING

DELPHI Automotive indicated a price


range for its initial public offering
that values the former General
Motors parts unit below levels project-
ed six months ago when the stock
market was stronger.
Delphi said in a regulatory filing
yesterday that the price range for its
IPO would be $22 (13.70) to $24 a
share, establishing a value for the
company at about $7.55bn. In May,
people familiar with the matter said
the supplier could be worth $10bn to
$14bn.
The offering, which would come
about two years after the company
emerged from bankruptcy, would
raise about $554.3m at the midpoint
of the proposed price range, accord-
ing to the filing. That would be far
less than the $1bn it was originally
aiming for, sources said.
The companys shares are expected
to begin trading on the New York
Stock Exchange on 17 November.
The global auto market has shown
signs of a gradual recovery, but
investors remain concerned about
the strength of demand in the
European and North American mar-
kets.
Delphi filed for bankruptcy in 2005
after succumbing to high costs for
wages and legacy benefits inherited
in its spinoff from GM in 1999. It
emerged from bankruptcy four years
later.
Delphi sets
indicative
float price
AUTOMOTIVE

CLEANING and pest control firm


Rentokil Initial missed third-quarter
profit forecasts yesterday and said it
was unsure if its struggling City
Link delivery business would return
to profit in its key Christmas period.
Rentokil, which offers services
from hiring work uniforms and
tropical plants to catering and secu-
rity, posted an adjusted pre-tax prof-
it of 53.1m for the period, 7.3 per
cent down on last year, and below a
market consensus of 57.4m.
Revenue was up 2.4 per cent to
637m. Growth across most of its
divisions was dampened by an
increased operating loss at City
Link, which rose to 6.8m from
1.3m due to lower prices and more
competition.
The division has dragged on
group profit for some time, ham-
pered by lost contracts and poor
operations during Britains record
cold snap last winter.
We are not yet clear that we are
going to get profit in quarter four
(in City Link), chief executive Alan
Brown said.
A lot will depend on how trading
goes over the next few weeks. I think
we are definitely going to get rev-
enue growth, whether we return to
profit will really depend on how
quickly we are able to make progress
on our productivity agenda.
Rentokil hit by slow City Link
BY HARRY BANKS
SERVICES

Wimpey says
sales solid
for autumn
BY JOHN DUNNE
HOUSEBUILDING

HARRY BANKS
M&A

News
21 CITYA.M. 8 NOVEMBER 2011
DISNEY TEAMS UP WITH YOUTUBE
YOUTUBE and Disney yesterday announced they are partnering for a co-branded YouTube
channel devoted to family-friendly original series. Although relatively small from a cash per-
spective in the range of $10-$15m it adds another major collaborator to YouTubes new
original content plan. YouTube plans to create dozens of online channels with original con-
tent with the help of high-profile names like Jay-Z and Amy Poehler. Picture: REX
NEWS | IN BRIEF
Weir confident on 2011 outlook
British pumps and valves maker Weir
said it was confident of meeting its
expectations for 2011, supported by
strong demand from customers in the
mining and oil and gas sectors. The com-
pany said yesterday that revenue grew in
the three months to the end of
September, boosted by a swelling order
book. But it said margins across the
group were in line with the level seen in
the first half of the year. Weir said that
total orders rose 27 per cent in the three
months to September.
Essar Energy performance solid
India-focused energy company Essar
Energy yesterday reported a solid oper-
ating performance in the three months to
30 September, with energy generated
rising four per cent compared to the
same period a year ago. Export values
also rose, climbing to 42 per cent of the
otal against 31 per cent a year ago.
"While higher gas prices, resulting in a
higher generation cost, have impacted
demand at our gas based plants in recent
months, the quarter saw higher plant
load factors at Hazira (up 24 per cent)
due to increased demand from the
Gujarat State utility," the firm said.
Bunzl buys Brazilian safety firm
Business supplies distributor Bunzl said
yesterday it has bought South American
safety glove and glasses maker Danny
Comrcio Importao Exportao Ltda
from Nielzer and Rita Sudr. Danny is the
fourth acquisition that UK-based Bunzl
has made in Brazil since 2008.
ANALYSIS l Rentokil Initial PLC
p
1 Nov 2Nov 3Nov 4Nov 7Nov
71
70
68
66
69
67
66.30
7 Nov
ANALYSIS l Taylor Wimpey PLC
p
1 Nov 2Nov 3Nov 4Nov 7Nov
37.50
37.00
36.00
35.00
34.50
36.50
35.50
36.78
7 Nov
News
22 CITYA.M. 8 NOVEMBER 2011
HIGHER activity in the property mar-
ket has propped up house prices,
according to two leading surveys of
the industry.
Yet while the market has perked
up, activity remains slow by historical
standards, with prices largely remain-
ing flat over recent months.
The Halifax reported a surprise 1.8
per cent spike in house prices last
month compared to September. Yet
the three-monthly comparison,
which irons out volatility, shows
prices down 0.3 per cent compared to
May, June and July of this year.
And a separate survey of surveyors
released this morning showed that
over half are reporting stable prices.
Of those reporting a decline, almost
three quarters said prices were down
only between zero and two per cent.
It is encouraging that activity lev-
els appear to have edged upwards
over the past month, said Ian Perry
of the Royal Institution of Chartered
Surveyors (RICS), which conducted
the survey.
However, with the chaotic events
in the euro area threatening to
spillover to the UK and banks still
imposing tough conditions on loans
to first time buyers, any recovery in
sales is still likely to be relatively mod-
est, Perry warned. This will
inevitably leave many people who
would like to own a home unable to
access the market.
First time buyers in London may
also be deterred by rising prices,
which continue to buck the national
trend. Yet again the capital was the
only region to show increasing house
prices, according to RICS.
Yet supply and demand recovered
throughout the country, the survey
showed. Eight per cent more char-
tered surveyors reported newly
agreed sales rose rather than fell.
Although still at historically low
levels, this rise represents the best
reading since April 2010, the report
said. Some surveyors attributed this
increase to growing realism from
many sellers, who now appear to
more willing to take offers in order to
secure a sale.
Completed sales rose to the highest
level recorded for six months, averag-
ing 15 sales per surveyor over the past
three months. Both new buyer
enquiries and new instructions to sell
edged up in October.
Meanwhile, another survey claimed
that one in 10 buyers are prepared to
dip into credit card debt or bank loans
as part of their efforts to raise a
deposit. Funding a deposit remains
the biggest financial hurdle to home
ownership, SmartNewHomes said.
House prices
supported by
rising activity
BY JULIAN HARRIS
HOUSING

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THE GROWTH in exports from UK-
based companies has slowed, a
business survey revealed this
morning, with exporters facing a
tough end to the year.
Exporters received fewer orders
than sales in the third quarter of
the year, suggesting a further
slowing of business in the final
three months of 2011.
The UKs exporters are still per-
forming well, said John
Longworth of the British
Chambers of Commerce (BCC),
which conducted the survey
alongside DHL. However, uncer-
tainty around the UKs recovery
combined with the Eurozone cri-
sis means that growth has slowed
in the last quarter, he added.
Order books have weakened,
confidence in increasing turnover
has softened and exporters desire
to expand workforces is muted.
Exporting firms are reluctant to
take on new staff, the report
found. And roughly one fifth (19
per cent) of respondents said they
would cut headcount in the final
quarter of the year.
UK goods exports were up three
per cent in the third quarter, com-
pared to both the previous quarter
and the same time last year.
However, the proportion of firms
reporting an increase in orders (35
per cent) was at its lowest for two
years.
Nearly a quarter of firms (24 per
cent) experienced a fall in orders
double the proportion at the
beginning of the year, when just
12 per cent of exporters said that
orders were down.
Steps must be taken to support
those looking to target overseas
markets, particularly SMEs, who
are less able to ride the trends of
the economic cycle than their
larger counterparts, said DHLs
Phil Couchman.
Growth in exports slows as orders
point to a tough end of the year
BY JULIAN HARRIS
UK ECONOMY

Taskforces
to lead tax
crackdown
TASKFORCES are being set up to target
different types of tax evasion in differ-
ent regions, HM Revenue and
Customs (HMRC) revealed yesterday.
Businesses are the particular focus
in London and the south east, with
those failing to submit statutory
returns for corporation tax, income
self assessment, PAYE and VAT seen as
core targets by the taskforce.
Five such taskforces have been set
up to target problems as they affect
each region. These include scrap
metal dealers and fast food restau-
rants in Scotland and landlords in the
north west and north Wales.
Taskforces bring together a group
of specialists in any one area, be in
VAT, corporation tax or any other tax
where there is a particularly large
problem in collection, HMRCs
Jonathan Hall told City A.M.
The team might look for plumbers
taking cash and failing to declare
their full income, for example, by see-
ing if their statements add up with
the level of activity they are doing.
HMRC said its reaction to wrongdo-
ing will be proportionate to offence,
whether it is encouraging small com-
panies who have accidentally fallen
behind to hand in the relevant forms,
or serial offenders who have not sub-
mitted tax forms for years.
Powers HMRC has acquired in
recent years mean you will be treated
more leniently if you come forward
voluntarily, Dawn Registers from law
firm BDO told City A.M.
BY TIM WALLACE
TAXATION

House prices in London are rising, according to surveyors Picture: REX


NEWS | IN BRIEF
Inflation eases in Switzerland
Swiss annual consumer prices fell for
the first time in two years in October,
arguably boosting the case for policy-
makers to cap the strong franc at a
lower level. Prices fell 0.1 per cent
year-on-year having risen 0.5 per cent
a month ago, the Federal Statistics
Office said yesterday. Core prices
stripping out volatile components like
food, beverages, tobacco and energy
fell 0.5 per cent. Unemployment in
Switzerland stuck at three per cent on
a seasonally-adjusted basis.
Small firms call for more credit
The government should channel its
credit easing plans towards helping
small businesses, an industry body said
yesterday. Credit easing must be bold
and look to boost competition by stim-
ulating innovative models such as peer-
to-peer lending and smaller internet
banks, said John Walker of the
Federation of Small Businesses (FSB).
Over a third (34 per cent) of small
firms to have applied for bank finance
in the last two months have been
turned down, the FSB said.
Consumer credit spikes in US
Americans boosted their levels of bor-
rowing in September, data revealed
last night, while separate figures sug-
gested that the US economy remains
too weak to combat its relatively high
level of unemployment. The
Conference Board index edged up to
101.92 from 101.20 in September yet
the groups statement said: We think
that the economy is simply not strong
enough to deliver more than 125,000
jobs a month. Consumer credit was up
by $7.4bn in September, meanwhile.
Altana Wealth
The new investment management group
founded by ex-Trafalgar Asset
Managers founder Lee Robinson has
appointed David Helm as global head of
sales and marketing. Prior to joining
Altana, Helm was the chief executive of
hedge fund Sofaer Capital.
Scipion Capital
The African investment specialist has
hired Jonathan Hargreaves as an ana-
lyst in its London office and Jean
Cochard as an office manager in its
Geneva office. Hargreaves joins from
IHS Janes and Cochard most recently
worked at Cosmorex SA Geneva.
BlackRock
Paul Tebbit has joined the fund manag-
ers UK real estate team as a director.
Tebbit most recently worked as a direc-
tor for Telereal Trillium, specialising in
real estate and corporate investment
opportunities, debt raising, valuation
and transaction structuring.
Baker Tilly
David Griffin has joined Baker Tilly
Restructuring & Recovery as a director
in the special investigations department.
Griffin was previously a director at Zolfo
Cooper in the British Virgin Islands.
Stephenson Harwood
The law firm has appointed Fraser
Sparks as a partner in the pension
team. Sparks joins from Squire
Sanders & Dempsey, where he has
been a partner since 2008.
Ashmore
The investment manager has appointed
Dominick Peasley as head of European
third party distribution to establish key
relationships with retail and wholesale
distributors. Peasley joins from
Goldman Sachs asset management,
where he was an executive director,
heading UK third-party distribution.
Mytrah Energy
The wind power developer has appoint-
ed Russell Walls and Peter Neville as
independent non-executive directors
with immediate effect. Walls is currently
independent non-executive director and
chairman of the Audit Committee of
Aviva, and Neville is currently chairman
of Kleinwort Benson (Channel Islands)
and non-executive director of Kleinwort
Benson Channel Island Holdings.
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 edges
up in choppy day
U
S stocks closed a volatile, lightly
traded session slightly higher
yesterday, with sentiment con-
tinuing to shift with the latest
headline from Europe.
Wall Street spent most of the ses-
sion lower before rebounding after
Juergen Stark, a member of the
European Central Banks Executive
Board, said the regions debt crisis
might be overcome in one or two
years at the latest.
In a signal that investors remain
cautious, the strongest performers
were healthcare and telecommunica-
tions stocks, both considered defen-
sive sectors. The S&P Health Care
sector rose 1.2 per cent, with Pfizer
gaining 2.1 per cent to $20.07.
Volatility in the stock market has
become more closely correlated with
shifts in European bond markets,
another sign of Europes influence on
US equities.
Given the overhang that Europe
has been having on equities, stocks
are going to be subject to intraday
moves based on innuendo or conjec-
ture as much as fact, said Mark
Luschini, chief investment strategist
at Janney Montgomery Scott in
Philadelphia.
Any news thats viewed positively
is going to move the market, but I
dont trust the move. We could just as
easily fall back down.
The Dow Jones industrial average
was up 85.22 points, or 0.71 per cent,
at 12,068.46. The Standard & Poors
500 Index was up 7.89 points, or 0.63
per cent, at 1,261.12. The Nasdaq
Composite Index was up 9.10 points,
or 0.34 per cent, at 2,695.25.
The latest source of anxiety is Italy,
where Prime Minister Silvio
Berlusconi defied pressure to resign,
keeping markets on edge before a key
parliamentary vote on budget
reforms.
Volume was light, with about 6.3bn
shares traded on the New York Stock
Exchange, the American Stock
Exchange and Nasdaq, below last
years daily average of 8.47bn.
Adding to the uncertainty, Greeces
outgoing Socialist prime minister and
conservative opposition leader raced
to forge a coalition government and
implement a new bailout pro-
gramme.
Equities have been very sensitive to
headlines from Europe, especially
with a light US economic calendar
this week and as earnings season
winds down.
The CBOE Volatility Index fell 0.9
per cent after rising earlier in the ses-
sion. Fresh worries about sovereign
debt default have boosted the stock
markets volatility.
B
RITAINS blue-chip share index
fell yesterday as political tur-
moil in Italy sparked fears the
Eurozones largest debtor may
fail to deliver much-needed economic
reforms.
The FTSE 100 ended down 16.34
points, or 0.3 per cent, to 5,510.82,
with banks weighing the most as
investors positioned for months of
continued uncertainty on the euro
front and declining economic
prospects.
Italys prime minister, Silvio
Berlusconi, struggled to hold a crum-
bling coalition together ahead of a
confidence vote today.
Reports of Berlusconis imminent
resignation had pulled the market off
lows in morning trade, as investors
hoped a new government could
implement urgent measures aimed
at reducing government debt and
spurring growth.
Berlusconis refusal to step down
raised the prospect of a political
impasse, sending benchmark Italian
government bond yields to 14-year
highs, close to levels seen as unsus-
tainable.
Meanwhile, Greece was fast-track-
ing its hunt for a new prime minister,
to appease markets and satisfy EU
calls for a speedy resolution of its
political crisis. Lucas Papademos, a
former deputy head of the European
Central Bank, was tipped as the most
likely successor to George
Papandreou.
Following an irrelevant G20 sum-
mit and the yo-yoing in Greece, the
pillars of the EU summit are starting
to crack as each requires a level of
patience from the market that is just
not there, said Robert Quinn, chief
strategist at Standard & Poors Capital
IQ.
Even if stocks move a lot on politi-
cal decisions, I am still negative on
equities. We are probably in recession
starting in the fourth quarter as the
business cycle downturn has yet to
trough.
What we have seen throughout
the day is buyers of back-end vol, so
longer-dated volatility, he said, sug-
gesting a lack of confidence further
out.
They are not confident at all. I
think there are a lot of shorts in the
market and people are buying volatil-
ity in the longer months now.
Gambling on the market going
down, he said, citing action out to
December 2012 although there has
not been a mass of action.
Volumes were low, with the FTSE
trading at 76 per cent of its 90-day-
average.
ICAP was a notable exception,
recording volumes more than double
its three-month average to close 3.5
per cent higher. The money broker
rebounded after dropping 5 per cent
on Friday and 30 per cent since the
end of June.
Pumps maker Weir, which also
recorded strong volumes, dropped 3.7
per cent despite a solid interim state-
ment, as profit-takers cashed in on a
40 per cent rally since the start of
October.
Meanwhile European stocks fell
yesterday in choppy trading driven by
political turmoil in Italy, where bond
yields hit euro-era highs, though equi-
ties pared losses on hopes Italian
Prime Minister Silvio Berlusconi was
about to resign.
The FTSEurofirst 300 index of top
European shares fell 0.6 per cent to
close at 974.66 points, having been
down almost 2 per cent in early trade.
Volume was light, at 87 per cent of
the 90-day average. Financial stocks
were down, with the STOXX Europe
600 Banking Index down 0.9 per cent.
FTSE ends in the red based
on soaring Italian debt costs
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 Betfair
800
750
700
650
600
Sep Oct Nov
p
789.50
7 Nov
BETFAIR
Numis rates the online betting group as a buy with a target price of
1,150p, ahead of first-half result to be published on 14 December. The bro-
ker forecasts sports revenue for the second quarter of 66m, up from
60m in the first quarter. It expects first-half numbers to show healthy
growth in Ebitda to 42m, up from 36m, and says that as the sportsbook
is added to the site investor sentiment should improve further.
ANALYSIS l Hamworthy
650
625
600
575
550
525
500
Sep Oct Nov
p
648.00
7 Nov
HAMWORTHY
Evolution Securities rates the marine engineering group an add and
increases its target price from 700p to 750p after contract awards were
announced yesterday worth 40m with Hyundai and Hoegh. The broker
increases its forecast for March 2012 earnings per share to 33p from
29.5p, and March 2013 to 40.4p from 38.4p. Evo expects these forecasts to
form a base, and could expect further improvement as the year progresses.
ANALYSIS l Admiral Group
1,500
1,400
1,300
1,200
1,100
Sep Oct Nov
p
1,180.00
7 Nov
ADMIRAL
Nomura rates the insurance group as a buy with a target price of 1,900p,
ahead of a third-quarter management statement on Thursday. The broker
expects Admiral to confirm it will meet consensus earnings expectations
for the full year, and is looking for policy count growth to moderate to
around +28 per cent for the nine-month stage. The focus is likely to be on
claims trends, which have precipitated the recent share price fall.
26Aug 8Aug 16Sep 6Oct 26Oct
5,800
5,400
5,200
5,000
5,600
ANALYSIS l FTSE
5,510.82
7 Nov
RFC Group
John Harrison, who retired as a managing
director of Numis Securities last month, has
been named as chairman of Ambrian
Partners, subject to completion of RFCs
acquisition of 100 per cent of Ambrians
share capital. Harrison joined Numis in 1994
following a career at Lloyds of London.
Since 2003, he has led the Numis corporate
finance activities in the resources sectors,
floating a number of UK and overseas com-
panies in London.
News
23 CITYA.M. 8 NOVEMBER 2011
I
T IS widely expected that the Prime Minister
is going to start calling for a more moral
form of capitalism. I have a simple test of
whether a politician is trying to debate, or
avoid, tough policy questions I ask myself
whether anybody would disagree with the oppo-
site of what the politician is calling for.
During the 1997 election campaign, for exam-
ple, the Labour Party called for an integrated
transport system. Clearly nobody wanted the
opposite a dis-integrated transport system.
What the Labour Party actually wanted was a
state-planned transport system because they did
not believe that the market would bring about a
more integrated system. But it was not conven-
ient for Labour to talk about specifics.
So, who is for a more immoral form of capital-
ism? Since no party would make that its cam-
paign slogan, the harder question is what
detailed policies does David Cameron want to
put behind his empty slogan? Does he
believe that morality within the market
system can be improved by state regula-
tion? Does he simply want people to look
at their own consciences and freely
choose a better way of life? Or does he,
like some other politicians who call for
a more moral capitalism, want a mar-
ket system that punishes people who
are reckless with and lose large
amounts of other peoples money?
These are the substantive policy
issues on which the Prime
Minister needs to reveal his
position.
This newspaper recently
criticised a recent report by
the Vaticans Justice and
Peace Commission pub-
lished under its own auspices, it
should be noted, not by the Pope
himself that called for global regulation
of the financial system and a global bank
bailout fund. Those criticisms were well
targeted. However, if we go back 20
years, we will find some wise statements
in a document called Centesimus annus pub-
lished by John Paul II. The late pope noted that
the social order will be all the more stable if the
pursuit of personal interest is aligned to the
interests of society as a whole so self interest and
the interests of society are brought into fruitful
harmony. Clearly this is not an original insight,
but it was, in fact, an insight rooted in a recogni-
tion of the potential problem of moral failure.
Those who believe in free markets and a more
moral capitalism need to consider this issue. To
put it in more prosaic terms, have people been
allowed to get away with reckless and imprudent
behaviour because they are able to impose the
costs on others? The answer to this question is,
emphatically, yes. We have had the bailout of
some banks in the UK. In the US, risk in the
financial system has been underwritten in a big
way for more than a generation. This has encour-
aged imprudent behaviour both by customers
taking out credit and by bank managers, and
there have been weak incentives for the
providers of capital to rein in that behaviour.
Before financial systems were regulated,
before deposits were insured and in the US
mortgages guaranteed, prudent behaviour blos-
somed. People were disciplined by the market.
Banks would often have unlimited liability or
have double liability for shareholders.
Alternatively, banks and insurance companies
might be owned by their customers. On the stock
exchange, a jobbers word was his bond.
Companies used all sorts of mechanisms to sig-
nal to the market that they would behave pru-
dently and honestly. It was not just the standards
of the time demanding it the demands of the
market helped to form the standards of the time.
This is not to say that, if you have completely
free markets, morality will look after itself. But,
if you ensure that those who behave recklessly,
immorally and imprudently gain the most, you
are asking for trouble and you will attract
exactly the wrong type of people into the mar-
kets. This is true in the welfare state for bankers
just as it is true in the traditional welfare state
where government imposes huge costs on work,
saving and family formation.
Politicians who set up economic systems
where the cost of immoral behaviour is pushed
onto others, and then respond by calling for
more morality, are trying to get water to flow
uphill. Let Cameron make his speech, but then it
would be nice to return to the traditional divi-
sion of labour in this field. Let the Archbishop of
Canterbury and the Vaticans Justice and Peace
Commission comment about the need for
morality in finance. And perhaps the Prime
Minister can start discussing the day-to-day poli-
cy issues that he seems to have left to the church-
es. Does the Prime Minister believe we should
have an economic system that rewards impru-
dence and recklessness? If not, what policy
reforms does he want to see and how is he going
to bring those reforms about?
Philip Booth is Professor of Insurance and Risk
Management at Cass Business School and the editorial
director of the Institute of Economic Affairs.
24
The Forum
CITYA.M. 8 NOVEMBER 2011
People have got away with
imprudent behaviour by
imposing the costs on others
David Cameron is to call for
moral capitalism: He needs
to tackle moral hazard first
cityam.com/forum
PHILIP BOOTH
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.
25
Breakdowns are
not terminal: Its
time to come out
of the Dark Ages
End the stigma
that surrounds
stress in the City
L
LOYDS Banking Group has announced
that Antonio Horta-Osorio is expected
to return before the end of the year, but
City sources have been saying there is
no way that he will be able to come back as
chief executive after taking time off for phys-
ical and mental exhaustion.
The persistent stigma is that after any
episode of stress-related or mental illness the
individual will no longer be a safe pair of
hands able to handle a high pressure job.
In fact, many people will recover entirely
from an episode of stress or other psycholog-
ical illness, while others may be highly effec-
tive while managing ongoing conditions
with medication or talking therapy as neces-
sary. Human beings are frail and risks relat-
ing to illness can never be ruled out
completely. But a mental illness, even a fluc-
tuating one, can be managed in the work-
place in a similar way to chronic physical
conditions like diabetes.
Stigma is born of ignorance. So few people
in public life have disclosed the truth about
remarkably common illnesses (now overtak-
ing back pain as the most common cause of
sickness absence), that we continue to
believe the myth that people are broken by
them.
Yet figures like Alastair Campbell and Lord
Stevenson, the former Chairman of HBOS
and Pearson, have done much to bring us out
of the dark ages. Both have revealed that
they have experienced depression during
their high-profile careers. Impressively, the
former Norwegian Prime Minister Kjell-
Magne Bondevik disclosed his depression
while in power, before returning from sick-
ness leave to finish his term and then be re-
elected.
At Stand to Reason we have thousands of
supporters who have experienced mental
distress from all walks of life, including sen-
ior positions in financial services organisa-
tions. At KPMG, Citi, Deloitte, Ernst & Young
and Legal & General, employees have come
forward to break the silence and change the
culture within their firms.
If one contrasts the mature way that Apple
understood that Steve Jobs could continue to
make a contribution while being treated for
his cancer to how we once used to talk about
the Big C, with people referred to as dying
from a long illness, there is hope that in
time we will progress to a similar modern
approach to psychological illness.
Horta-Osorio had a first-class track record
of handling high-pressure roles and it is
unlikely that these competencies will have
deserted him. Whether he returns to his role
or not in the time allotted is yet to be seen.
Much will depend on the details of his par-
ticular case and whether there are ongoing
stressors outside the workplace of which we
are unaware.
All things being equal, and putting stigma
aside, the expectation should be that Horta-
Osorio will return to work and thrive there,
just as he would after returning from a phys-
ical illness.
Jonathan Naess was a partner in a corporate
finance firm before founding Stand to Reason.
www.standtoreason.org.uk
Pay may be earned
Albert Ellis made some good
points about executive pay [The
debate over chief executives
pay isnt simple, yesterday]. The
debate seems to have reached a
stage where too many look for
data to support their prejudice
about overcompensated fat cats
and dont investigate any fur-
ther the quality of the studies
involved. Research this month
from two academics at the LSE,
Brian Bell and John Van Reenen,
also found that the picture was
nt as simple as some want it to
be. Their study covered 90 per
cent of the UK stock markets
market capitalisation and found
the performance of firms may
explain between one-quarter
and one-half of the rise in the
gap between chief executive
pay and the pay of workers.
Falls in performance are also
followed, although less aggres-
sively, by chief executive pay
cuts and firings.
Mary Willmott Freeman
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
JONATHAN NAESS
CITYA.M. 8 NOVEMBER 2011
The Forum
I
M A big fan of the
Bank of England
museum. I find the
way it attempts to
educate children about
how monetary policy is
conducted to be charm-
ing. There is an exhibit
with a tube of clear
plastic containing a ball. The tube is balanced
when the ball is level with a marker for 2 per cent
inflation, and there is a lever labelled interest rate.
As you pull down on the lever, the tube rotates and
the ball shoots over 2 per cent. If you pull up, the
tube moves in the opposite direction. Just as you
grasp the mechanistic relationship between the tar-
get and the tool, economic shocks are added to
send the tube into constant motion.
They also have a large replica hot air balloon,
once again serving as an engaging representation
of monetary policy. Just pull the lever, and watch
the impact on inflation. It is a live version of the
computer game they have on their website, which
I encourage students to play. Not so that they
understand monetary policy, but so that they
understand how central bankers view monetary
policy. [Find it at: www.bankofengland.co.uk/edu-
cation/inflation/balloon/balloon.htm]
At the San Francisco Federal Reserve museum
the point is the same but the scale bigger. A mas-
sive sphere annotated with terminology rotates in
every direction and the viewer is invited to place a
small magnet on a recoilable cord onto the appro-
priate symbol on the ball. Once youve locked on
your aim is to direct the movement, being careful
not to make any sudden yanks given that the mag-
netic force binding the magnet to the sphere is
weak. I have to confess to being flummoxed as to
what symbolises what (is this the economy? Or the
globe?), and indeed if Ben Bernanke seeks to lobby
Congress for bigger magnets. But its all good
hands-on entertainment.
This computer game is more advanced than the
Old Ladys not only must you control inflation but
also employment. You have 16 quarters in which
you need to respond to different news headlines
with a decision on the Federal Funds rate, attempt-
ing to keep both indicators on track. Of course this
is fiendishly hard, and at the end of the game the
chairman of the Fed is inevitably forced to retake
control and sort things out. The lesson for children
is that monetary policy may appear simple, but it
is really quite difficult and best left in the hands of
the experts.
As a member of the IEAs Shadow Monetary
Policy Committee I felt obliged to keep playing the
game until I managed to gain reappointment. It
was a delightful way to spend a lunchtime. The
complexity of monetary policy is the right lesson,
but not perhaps its enthusiam for the power of
experts to step in and save the day. Perhaps such
stories work for children, but they are certainly
not suitable for politicians.
Economic education is a laudable aim: success-
ful monetary policy relies on public understanding
of economic issues as well as central expertise. But
simplification runs the risk of trivialisation, and
projecting the wrong metaphor can do more harm
than good. The economy is not a balloon and cen-
tral banks dont have hold of any levers. Its far
more complicated than that.
Anthony J. Evans is Associate Professor of
Economics at Londons ESCP Europe Business
School, and Fulbright Scholar-in-Residence at
San Jose State University.
His website is www.anthonyjevans.com.
Monetary policy is not
all about pulling levers
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
BY ANTHONY J. EVANS
Y
ESTERDAY saw the removal of some of the political
uncertainty that has dogged Greece over the past
week. A new coalition government is to be formed,
Papandreou is standing down as Prime Minister and a
general election is expected early next year. All this should be
enough to ensure that Greece receives its next bailout
tranche, so it should be able to struggle on for another month
or so.
Attention has turned back to Italy. Few investors take
either the proposed Italian austerity measures or Prime
Minister Berlusconi very seriously. The countrys bonds fell
sharply again yesterday morning, with yields approaching
dangerously high levels. They bounced sharply higher later
in the day on speculation that Silvio Berlusconi was on the
point of resigning, but reversed quickly after the Italian
Prime Minister denied the stories.
But a change in leadership in a few Eurozone countries
wont address the regions debt crisis. And it looks like a new
European Central Bank (ECB) president wont either. So far,
the European Central Bank has thrown its weight behind
Italys bonds in an attempt to keep a lid on yields. But at his
first ECB meeting as President, Mario Draghi offered a
warning:
What makes you think that to become the lender of last
resort for governments is actually the thing that you need
to keep the euro area together? I dont think that is really in
the remit of the ECB.
This came as a surprise to those observers who felt that
Draghi would be more open to intervention. But he is now
insisting that any bond purchases should be temporary and
limited in scope. This puts him more in line with Bundesbank
thinking and has helped to reinforce his hawkish reputation.
With Italian bonds under such pressure, the major stock
indices are still struggling to break above significant resist-
ance. For the S&P, this comes in at 1,260 which is the 61.8
per cent Fibonacci retracement of the May/October sell-off.
For the FTSE, the 5,600 level is proving to be an obstacle.
For now, all the major indices are positively correlated with
the euro. A rally in the single currency will pull stocks up
with it. But a break below $1.3650-60 would be a big red
flag for equities.
Tomorrow morning David Morrison will speak at a GFT
and City A.M. event. See gftuk.com or call 0808 208 5197.
GREECE SKIRTS
SLIP AS EYES
ROAM TO ITALY
DAVID MORRISON
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Wealth Management| CFDs
26 CITYA.M. 8 NOVEMBER 2011
A
CCOUNTANCY firm BDO joins an
ever-growing group warning that
the UKs economy is on the cusp of
recession. In its latest business
trends report, optimism levels came in
below the crucial 95.0, for the first time
since July 2009, for both the manufactur-
ing and services sectors.
BDO partner Peter Hemington says:
Businesses hiring intentions point to
more job losses ahead which, coupled with
tumbling optimism and output, indicates
tough times in early 2012. He adds: Given
that the latest ONS growth figures have
been revised downwards, this concern is
even more acute. Hemington calls for sup-
ply side reforms particularly reform of
the tax system to introduce measures
encouraging private sector investment.
The UK is a largely powerless spectator in
the unremitting Eurozone crisis, with
many fearing its impact. The National
Institute of Economic and Social Research
is the latest to weigh in on the issue, sug-
gesting that there is a 70 per cent chance of
the UK heading into recession unless the
crisis is resolved, and 50 per cent even if it
is. The think tank also predicts that growth
wont return to pre-recession peak before
2014.
Not everyone is bunkering down.
Against the consensus view that a collapse
in the euro would be a disaster for the UK,
economists at the Centre for Economics
and Business Research (CEBR) think the
end of the euro would not be anything
like the disaster that has been argued. If
the currencys decline were undertaken in
a proactive and orderly way CEBRs bold
claim might be true but this is highly
unlikely given the ineptitude Europes
politicians have displayed to date.
Either way, one things for sure traders
like volatility and we are certainly in for a
lot of that over the coming months.
Philip Salter asks how
five experts trade these
euro-sceptered isles
UKs economic outlook
reveals unsightly view
IG MARKETS
CHRIS BEAUCHAMP
The UK economy may have grown by 0.5 per cent in the third
quarter, but this is not exactly cause for celebration. The medi-
um-term outlook remains fairly bleak, as growth remains decid-
edly anaemic. Not only this, but the travails of our Eurozone
partners threatens to sweep away even this small amount of
progress.
With the Bank of England firing up the printing presses once
again, the prospects for sterling-dollar look bleak indeed. Our own pound might gain
simply from being an alternative to the beleaguered euro, but yet more money printing
from Sir Mervyn and his band is not exactly conducive to the health of the currency.
In addition, UK consumers are still recovering from their debt hangover, as the after-
effects of years of excessive spending continue to be felt. Retailers have been hit hard,
as the great British public errs on the side of caution. Any glance at the share price of
companies like Mothercare, Carpetright or HMV will confirm that this sector is facing a
hard time. However, one company that has weathered the storm so far is Next, whose
shares are up nearly 40 per cent since the start of the year, compared to a drop of 7 per
cent for the FTSE 100. Outside of the high street, northern supermarket Morrisons
might also be a possibility, as consumers trade down to cheaper products, abandoning
the hallowed halls of M&S and Waitrose for low-cost alternatives.
In these difficult times, we can only hope that our eminent chancellor has some fairly
inventive ideas up his sleeve.
CAPITAL CFDS
ANGUS CAMPBELL
The UK economy expanded more than was expected in the third
quarter, which was welcome news for many, in particular the UK
chancellor. But we cant get too excited, as it simply represents a
bounce from the Japanese earthquake and multiple bank holidays
earlier in the year. This growth is not expected to be maintained
into the next quarter and 2012. It will also be particularly difficult
to see the economy grow this winter, if we see anything like the
disruption weve seen in the past two years caused by terrible weather conditions.
Confidence for both businesses and consumers is downbeat with lots of well-respected
think tanks saying that the likelihood of a double dip recession has increased.
Businesses are still very worried about the outlook for growth and as a result they dont
want to invest or employ new staff. As a result, unemployment looks like it will remain
high for some time and even the City is not immune to the downturn, with redundancies
increasing and job vacancies falling, putting further pressure on the wider economy and in
particular the governments coffers.
The woes for the struggling UK economy are not all down to government spending cuts,
but a general slowdown across Europe and the globe as a whole. Our biggest trading
partners across the English Channel are in trouble and it is having a knock on effect for us.
Unfortunately, the future for the UK economy looks bleak and for those political followers
out there we can expect more of the shadow vhancellors impersonation of a cricket
umpire signalling four runs across the despatch box.
L
AST weeks reports of tumbling prof-
its and the ongoing confusion over
the economic outlook for Europe is
weighing on International Airlines
Group, the stock of the merged BA and
Iberia entity, IAG. Even the prospect of
adding more prized take off slots at
Heathrow, through the reported plans to
purchase competitor BMI, is failing to
deliver any cheer, as the share price
descends rapidly back towards post-merg-
er lows. IG Markets quotes 152.3p-152.4p.
Energy provider Scottish and
Southern Energy reports tomorrow.
Households are tightening their purse
strings as the cost of using energy
becomes increasingly expensive. This may
have a knock-on effect on its revenues. It
was recently downgraded by Goldman
Sachs with a target of 1,230p. Capital
CFDs quotes 1,319.3p-1,321.7p.
Gold has had a bullish few days recov-
ering from the $1,600 an ounce mark ris-
ing back towards $1,800. It would
indicate that the bulls are back in town,
driving the price of the precious metal
higher, as investors pile back into the safe
haven. Capital CFDs quotes $1,766.0-
$1,766.4 for spot gold.
Admiral Group releases an interim
management statement tomorrow. Its
shares recently hit a 52-week low of
1,089p, but bounced hard off the 61.8
per cent Fibonacci retracement of the
2008 lows, to 2011 highs, at 1,100p.
With a dividend yield of around 6.5 per
cent and a potential recovery in the share
price on the horizon, dips to around
1,100p should be used to buy with 1,350p
as a target. Spread Co quotes 1,199.1p-
1,202.9p.
Philip Salter
THE TIPSTER
HEAVY LOAD
CAUSES FLIGHT
OF CAPITAL
CITYA.M. 8 NOVEMBER 2011 27

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Better technology, better pricing
ALPARI
JAMES HUGHES
2012 is still being billed as the magic year for the
UK economy. For a long time we have been told that
inflation would start to fall, growth would pick up
and unemployment (the most important barometer)
would turn the corner at the start of the Olympic
year. However, that was before the Eurozone prob-
lems intensified. I think one thing that we can count on is inflation taking
a sharp turn lower. It is expected to fall sharply in the first half of 2012
and gradually continue towards the benchmark 2 per cent, if not a tad
below.
The big issue, and a long term question for many economies is whether or
not we will get any more quantitative easing (QE). Over the last month we
have seen the Bank of England (BoE) expand its bond buying programme,
and many expect to see another shot in the arm in the first quarter and
maybe even more in second of 2012.
The recent minutes from Octobers Monetary Policy Committee meeting
showed yet more concern over the state of the economy in the UK and
this could be set to continue. The November meeting, although unlikely to
see any more QE or a movement in rates, will have the BoE growth and
inflation forecasts to dissect. With a plethora of poor economic data
released in the last few weeks and the worsening crisis in the Eurozone
there is still likely to be a lot to discuss.
All in all, the UK economy will be on high alert as we approach the festive
period. The inflation report on 16 November will be the biggest indication
as to where we are headed, but with QE back on the table, recent poor
economic data and the fear of Eurozone contagion, we look set for at least
another quarter of uncertainty in both the markets and the economy.
FOREX.COM
KATHLEEN BROOKS
The UK has been something of a wall flower of late as
the Eurozone has taken the spotlight. But while Greece
has imploded and Italy is next in the firing line, the UK
has managed to make itself and its own debt problem
fade to the background.
UK gilt yields have sunk as Italian yields have surged
and the UK credit market is becoming a bit of a safe haven. The yield on the
10-year bond is currently 2.3 per cent, a level Rome can only dream about.
Two-year yields are a ridiculously low 0.5 per cent.
The UK had a budget deficit last year of 10.5 per cent of GDP; however,
although its budget gap may be more like levels in Greece, its borrowing costs
are more like Germanys.
So why this discrepancy? The markets like certainty and that is what the UK
government gave them. The UK identified its debt problem fairly early on and
the coalition has implemented an austerity plan. This is something Greece and
Italy have struggled with. Weak growth may mean that the UK misses its fis-
cal targets, but the markets dont seem to mind. The UK at least has a plan
and that is providing certainty to the market.
The credit market may be booming, but the pound and the FTSE are a differ-
ent story. The UKs equity index is mostly made up of foreign corporates with
global reach. Since the Eurozone debt crisis threatens to cause a slowdown in
the world economy, the fortunes of the FTSE 100 lie with Europe and the UKs
equity index is at risk from changes in risk appetite.
The pound is also struggling under the weight of weak growth and general
risk aversion. However, the more the debt crisis threatens Italy the worse it is
for euro-sterling.
A break below 0.8550 would open the way for further losses in the single
currency.
CITY INDEX
JOSHUA RAYMOND
While the latest GDP figures, which showed that
the UK grew at a rate of 0.5 per cent in the third
quarter, higher than earlier estimates, are certainly
positive, it is nothing to get overly optimistic about.
The UK economy is still at significant risk of at least
one quarter of negative growth, particularly should
the Eurozone succumb to its sovereign debt crisis, a prospect that is fast
gathering pace with Italian 10-year bond yields hitting a new euro era
high yesterday.
Germany and France are among the UKs top trading partners in the
world and so a weak Eurozone that impacts these two nations is bad for
UK growth and there is every chance that the Eurozone is heading back
into a recession. An admission by new European Central Bank (ECB) presi-
dent Mario Draghi last week emphasised this point. Whats more, once
you strip out exceptional one off items from the latest initial GDP read-
ing too, it looks far less rosy than from the outset, if 0.5 per cent growth
can look rosy in the first place.
A separate PMI reading also saw the manufacturing sector fall at its
fastest rate in two years to read at 47.4, below the 50.0 growth level. This
is evidence that the UK economy is struggling and could dip back into
recession soon if the drop becomes a trend.
While the move by the Bank of England to increase its asset purchases is
a move designed to reignite the faltering UK economy, the current size of
the increase, 75bn, is unlikely to do much in the near term and we are
also expected to see this size remain unchanged when the Monetary
Policy Committee meets later this week. The UK economy remains teeter-
ing on the edge of recession.
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T
RADING is a solitary pursuit.
All that time spent watching
the screen can leave traders
emotionally tied up in their
trading choices. Pride takes over and
we can become wedded to a bad trad-
ing decision. It takes a lot of disci-
pline to clock your own behaviour
when this happens. But fear not,
weve asked some veteran traders
how they navigated their way
through this when they started out.
1.DONT BET THE FARM
One sure-fire way to prevent yourself
getting emotionally hung up on
your trade is not to bet too much on
any single trade. You dont ever want
to risk the mortgage payment or any-
thing else. Mike van Dulken of
Accendo Markets says that the first
question a trader should ask is what
potential loss can I take on this
trade? Only then should you consid-
er the potential profit. Van Dulken
says: A risk/reward ratio greater
than 1:3 is considered good.
2.BE THE MASTER
OF TRADES
Traders literally cant
afford to be a Jack
of all trades.
They need to
be master
of a few.
Elliott
Winner
of Capital
Spreads says:
Spend time look-
ing at a couple of
markets that you
will eventually go
on to trade. By fol-
lowing only a cou-
ple, you are
learning the ranges, the market
trades and what particular data and
news affects that market.
3. STEP AWAY FROM THE SCREEN
Much like watching the clock at
work, sitting in front of your trading
screen all day only makes a bad situ-
ation worse. David Jones of IG
Markets says: I think one of the best
ways to take the stress out of trading
is simply not to constantly watch the
market. Particularly, if you are trad-
ing over hours, days or weeks. The
temptation to edit your strategy is
too great.
4.EXECUTE A STRATEGY
Winner says that sticking to a strate-
gy prevents you running a loss-mak-
ing position on the hope that it will
bounce back. He explains: Decide
where you will enter and set your
two exit strategies your stop and
limit. City Indexs Joshua Raymond
thinks this advice is best
paired with the last
tip: The best risk
management strategy
is just to set your stops
and profit target and
then walk away.
5.USE THE
TOOLS AT HAND
Every trading
system seems to
offer stops and lim-
its these days, but many also
offer other fancy planning
and history applications.
These allow traders to learn
from their mistakes and put
together more robust strategies
that are harder to get distracted
from.
Trading contracts for difference requires
psychological discipline. Here are our
five top tips, writes Donata Huggins
Discipline isnt much fun, but its necessary Picture: GETTY
Get your
emotions in
check and
under control
Wealth Management | Contracts for Difference
28 CITYA.M. 8 NOVEMBER 2011
GFT is hosting an informal seminar
to equip binary beginners with the
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binary traders to take their strategies
to the next level.
David Morrison, GFTs derivatives
market strategist and a City A.M.
columnist, will present a talk on:
What are binaries?
What influences their pricing?
What markets does GFT offer?
It will be held at the Grange St.
Pauls Hotel at 8.30am-10am on
9 November 2011. Call GFT on 0808
208 5197 or go to www.gftuk.com
for more information.
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EU SHARES
AIR LIQUIDE...............89.34 -1.33 100.65 80.90
ALLIANZ .....................75.39 -0.83 108.85 56.16
ANHEUS-BUSCH INBEV39.870.37 45.11 33.85
ARCELORMITTAL......14.67 0.00 28.55 10.47
AXA.............................10.35 -0.19 16.16 7.88
BANCOSANTANDER ..5.68 -0.14 9.20 5.05
BASF SE .....................50.41 -0.91 70.22 42.19
BAYER.........................46.03 1.13 59.44 35.36
BBVA.............................6.07 -0.06 9.17 4.94
BMW............................58.13 0.27 73.85 43.49
BNP PARIBAS ............30.77 -0.11 59.93 22.72
CARREFOUR..............19.16 -0.51 34.12 14.66
CRH PLC.....................12.52 -0.27 17.40 10.28
DAIMLER ....................34.58 -0.41 59.09 30.52
DANONE .....................48.17 -0.58 53.16 41.92
DEU.BOERSE OFFRE39.11 -0.36 55.75 35.46
DEUTSCHE BANK......28.20 -0.17 48.70 20.79
DEUTSCHE TELEKOM 8.94 -0.07 11.38 7.88
E.ON............................16.62 -0.02 25.54 12.50
ENEL .............................3.33 0.03 4.86 2.81
ENI ...............................15.81 0.26 18.66 11.83
FRANCE TELECOM...12.49 -0.14 17.39 11.12
GDF SUEZ...................20.49 0.41 30.05 18.32
GENERALIASS. .........12.54 0.19 17.05 10.34
IBERDROLA .................4.97 0.06 6.50 4.29
INDITEX.......................64.55 -0.34 69.40 50.92
INGGROEP CVA..........5.77 -0.24 9.50 4.21
INTESA SANPAOLO.....1.16 0.03 2.47 0.85
KON.PHILIPS ELECTR14.63 -0.31 25.45 12.01
L'OREAL .....................77.41 -0.42 91.24 68.83
LVMH.........................114.30 -1.10 132.65 94.16
MUNICH RE ................92.95 -0.52 126.00 77.80
NOKIA...........................4.89 0.08 8.49 3.33
REPSOL YPF ..............20.91 0.24 24.90 17.31
RWE.............................29.33 0.42 55.88 21.22
SAINT-GOBAIN...........31.76 -0.29 47.64 26.07
SANOFI .......................48.93 -0.42 56.82 42.85
SAP .............................43.82 -0.25 46.15 32.88
SCHNEIDER ELECTRIC39.35 -1.10 61.83 35.94
SIEMENS.....................72.84 -1.21 99.39 62.13
SOCIETE GENERALE17.50 -0.43 52.70 14.32
TELECOMITALIA.........0.87 0.01 1.16 0.70
TELEFONICA..............14.14 -0.09 19.67 12.50
TOTAL .........................36.95 -0.09 44.55 29.40
UNIBAIL-RODAMCOSE136.15-2.70162.95 124.05
UNICREDIT ...................0.79 0.01 2.03 0.64
UNILEVER CVA ..........24.61 0.15 25.09 20.90
VINCI ...........................33.86 -0.52 45.48 29.49
VIVENDI ......................15.76 0.28 22.07 14.10
VOLKSWAGEN VORZ125.50 0.20 152.20 86.40
Price Chg High Low Price Chg High Low
WORLDINDICES
US SHARES
3M.................................79.69 0.39 98.19 68.63
ABBOTTLABS............53.63 0.30 55.61 45.07
ALCOA.........................10.75 -0.18 18.47 8.45
ALTRIA GROUP...........27.52 0.15 28.14 23.20
AMAZON.COM...........217.00 0.52 246.71 156.77
AMERICAN EXPRESS 51.25 0.07 53.80 41.25
AMGEN INC.................58.43 3.26 61.53 47.66
APPLE........................399.73 -0.51 426.70 297.76
AT&T.............................29.44 0.28 31.94 27.20
BANK OFAMERICA......6.45 -0.04 15.31 5.13
BERKSHIRE HATAWB77.10 -0.14 87.65 65.35
BOEING CO.................66.29 0.49 80.65 56.01
BRISTOL MYERS SQUI31.39 0.05 33.27 20.05
CATERPILLAR.............95.00 -0.74 116.55 67.54
CHEVRON..................107.72 1.29 110.01 80.41
CISCOSYSTEMS ........18.01 -0.02 24.60 13.30
CITIGROUP..................30.55 0.21 51.50 21.40
COCA-COLA................68.21 0.43 71.77 61.29
COLGATE PALMOLIVE88.45 0.39 94.89 74.86
CONOCOPHILLIPS .....71.58 0.87 81.80 58.65
CVS/CAREMARK ........38.23 0.21 39.50 29.45
DU PONT(EI)DE NMR.48.99 0.29 57.00 37.10
EXXON MOBIL.............79.35 0.83 88.23 63.47
GENERAL ELECTRIC .16.39 0.00 21.65 14.02
GOOGLE A.................608.33 12.19 642.96 473.02
HEWLETTPACKARD..27.88 0.91 49.39 19.92
HOME DEPOT..............37.34 0.95 39.38 28.13
IBM.............................187.32 0.94 190.53 141.18
INTEL CORP................24.28 0.54 26.78 19.16
J.P.MORGAN CHASE..34.24 0.27 48.36 27.85
JOHNSON & JOHNSON64.00 -0.12 68.05 57.50
KRAFTFOODS A ........35.33 0.15 36.30 24.30
MC DONALD'S CORP.94.62 0.81 94.70 72.14
MERCK AND CO.NEW34.32 0.30 37.65 29.47
MICROSOFT ................26.80 0.55 29.46 23.65
OCCID.PETROLEUM..98.52 0.88 117.89 66.36
ORACLE CORP ...........32.87 0.32 36.50 24.72
PEPSICO......................62.50 0.51 71.89 58.50
PFIZER.........................20.07 0.41 21.45 16.25
PHILIP MORRIS INTL..70.50 0.29 72.74 55.85
PROCTER AND GAMBLE63.460.43 67.72 56.57
QUALCOMMINC.........56.92 0.42 59.84 45.98
SCHLUMBERGER.......75.33 0.36 95.64 54.79
TRAVELERS CIES.......58.62 0.48 64.17 45.97
UNION PACIFIC.........101.68 0.44 107.89 77.73
UNITED TECHNOLOGIE78.34 0.54 91.83 66.87
VERIZON COMMS.......37.34 0.17 38.95 31.60
WAL-MARTSTORES...57.94 0.44 57.96 48.31
WALTDISNEY CO.......35.15 0.39 44.34 28.19
WELLS FARGO& CO .25.42 0.02 34.25 22.58
Price Chg High Low Price Chg High Low
FTSE 100 . . . . . . . . . . . . . . 5510.82 -16.34 -0.30
FTSE 250 INDEX . . . . . . . 10302.24 -85.56 -0.82
FTSE UK ALL SHARE ....2839.49 -10.40 -0.36
FTSE AIMALL SH . . . . . . . . 723.54 -0.67 -0.09
DOWJONES INDUS 30 ..12068.39 85.15 0.71
S&P 500 . . . . . . . . . . . . . . . 1261.12 7.89 0.63
NASDAQCOMPOSITE ...2695.25 9.10 0.34
FTSEUROFIRST300 . . . . . . 974.66 -5.35 -0.55
NIKKEI225AVERAGE....8767.09 -34.31 -0.39
DAX 30PERFORMANCE..5928.68 -37.48 -0.63
CAC 40 . . . . . . . . . . . . . . . . 3103.60 -19.95 -0.64
SHANGHAISE INDEX ....2509.80 -18.50 -0.73
HANG SENG. . . . . . . . . . . 19677.89 -164.90 -0.83
S&P/ASX 20INDEX ......2577.10 0.00 0.00
ASX ALL ORDINARIES ...4335.30 0.00 0.00
BOVESPA SAOPAOLO..59198.77 528.85 0.90
ISEQOVERALL INDEX ...2665.13 0.59 0.02
STI . . . . . . . . . . . . . . . . . . . . 2778.97 34.80 1.27
IGBM. . . . . . . . . . . . . . . . . . . 849.84 -14.02 -1.62
SWISS MARKETINDEX...5645.96 -13.87 -0.25
Price Chg %chg Price Chg %chg Price Chg %chg
LONGDONCEFIXAM.............................................1764.00 8.00
SILVERLDNFIXAM ....................................................34.58 0.44
MAPLELEAF1OZ ......................................................37.47 0.73
LONPLATINUMAM .................................................1627.00 -13.00
LONPALLADIUMAM.................................................650.00 -8.00
ALUMINIUMCASH...................................................2129.50 6.00
COPPERCASH........................................................7929.00 84.50
LEADCASH.............................................................2021.50 31.50
NICKELCASH........................................................18480.00 -21.50
TINCASH ..............................................................22070.00 -10.00
ZINCCASH..............................................................1950.00 28.50
BRENTSPOTINDEX..................................................111.79 1.45
SOYA.......................................................................1212.50 -6.75
COCOA....................................................................2697.00 -23.00
COFFEE ....................................................................230.20 3.40
KRUG ......................................................................1844.00 -6.00
WHEAT ......................................................................150.75 -0.50
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 ...........................................................0.820 0.00
LIBOR Euro - 12 months..........................................................2.004 0.00
LIBOR USD - overnight ............................................................0.141 0.00
LIBOR USD - 12 months ..........................................................0.953 0.01
HaIifax mortgage rate...............................................................3.990 0.00
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...................................................................3.020 -0.10
European repo rate ..................................................................0.704 0.08
Euro Euribor .............................................................................0.976 -0.05
The vix index.............................................................................31.89 1.14
The baItic dry index..................................................................1.784 -0.03
Markit iBoxx............................................................................238.15 1.40
Markit iTraxx ...........................................................................171.70 4.46
BAE Systems . . . . . .272.6 -1.3 361.1 248.1
Chemring Group. . . .509.0 -1.5 736.5 485.0
Cobham . . . . . . . . . . .175.9 -0.7 236.5 168.5
Meggitt . . . . . . . . . . . .380.4 -3.8 397.6 304.9
QinetiQ Group. . . . . .121.3 1.3 136.3 96.7
RoIIs-Royce Group. .717.0 2.5 726.0 557.5
Senior. . . . . . . . . . . . .159.5 -3.1 190.6 132.6
UItra EIectronics . . .1625.0 -5.0 1830.0 1305.0
GKN . . . . . . . . . . . . . .186.4 -3.9 245.0 157.0
BarcIays. . . . . . . . . . .179.4 -4.2 333.6 138.9
HSBC HoIdings. . . . .535.0 -5.0 730.9 473.6
LIoyds Banking Gr . . .27.7 -0.9 69.9 27.2
RoyaI Bank of Sco . . .22.3 -0.8 49.0 19.7
Standard Chartere .1394.5 -18.0 1950.0 1169.5
AG Barr . . . . . . . . . .1225.0 12.0 1395.0 1031.0
Britvic. . . . . . . . . . . . .321.4 0.0 503.5 289.9
Diageo . . . . . . . . . . .1309.0 1.0 1344.0 1112.0
SABMiIIer. . . . . . . . .2216.5 0.5 2354.5 1979.0
AZ EIectronic Mat . . .230.5 1.1 338.1 206.1
Croda Internation . .1748.0 0.0 2081.0 1367.0
EIementis. . . . . . . . . .140.5 -1.5 187.4 104.8
Johnson Matthey . .1804.0 -40.0 2119.0 1523.0
Victrex . . . . . . . . . . .1211.0 -5.0 1590.0 1025.0
YuIe Catto & Co. . . . .161.2 -2.6 253.0 148.0
C/$ 1.3776 0.0015
C/ 0.8577 0.0026
C/ 107.30 0.5708
/C 1.1659 0.0036
/$ 1.6028 0.0001
/ 125.09 0.2775
FTSE100
5510.82
16.34
FTSE250
10302.24
85.56
FTSEALL SHARE
2839.49
10.40
DOW
12068.39
85.15
NASDAQ
2695.25
9.10
S&P500
1261.12
7.89
RPC Group . . . . . . . .349.9 -0.1 384.8 215.4
Smiths Group . . . . . .953.5 -12.5 1429.0 907.5
Brown (N.) Group . . .262.0 -0.3 311.2 251.1
Carpetright . . . . . . . . .452.4 -12.2 835.5 441.4
Debenhams . . . . . . . . .65.4 0.8 75.7 51.2
Dignity . . . . . . . . . . . .796.5 -2.5 854.5 640.0
Dixons RetaiI . . . . . . .10.8 -0.0 27.0 10.6
DuneImGroup. . . . . .514.0 17.6 550.0 383.9
HaIfords Group . . . . .340.3 0.2 459.7 268.6
Home RetaiI Group. . .89.5 -1.6 235.0 88.2
Inchcape . . . . . . . . . .327.2 6.8 425.4 268.1
JD Sports Fashion . .835.0 -6.5 1030.0 753.5
Kesa EIectricaIs . . . . .99.7 1.3 174.0 80.0
Kingfisher . . . . . . . . .262.0 -0.5 287.1 217.0
Marks & Spencer G. .326.0 2.5 413.2 301.8
Mothercare . . . . . . . .154.3 3.3 627.5 147.9
Next . . . . . . . . . . . . .2756.0 32.0 2764.0 1868.0
Sports Direct Int . . . .235.6 -3.8 266.2 125.5
WH Smith. . . . . . . . . .555.5 2.0 559.0 433.8
Smith & Nephew. . . .540.5 -8.5 742.0 521.0
Synergy HeaIth . . . . .809.5 -11.5 981.0 773.5
Barratt DeveIopme . . .87.5 -1.9 119.0 67.5
BeIIway. . . . . . . . . . . .699.0 -16.0 753.5 511.0
BaIfour Beatty . . . . . .241.3 -4.5 357.3 228.6
GaIIiford Try. . . . . . . .469.0 -4.0 530.0 276.5
Kier Group. . . . . . . .1408.0 -5.0 1445.0 1097.0
Drax Group . . . . . . . .548.5 7.0 552.5 353.6
SSE. . . . . . . . . . . . . .1338.0 24.0 1423.0 1111.0
Domino Printing S . .563.5 -0.5 705.0 434.3
HaIma . . . . . . . . . . . . .332.5 -5.5 429.6 306.3
Laird . . . . . . . . . . . . . .148.8 -2.9 207.0 127.9
Morgan CrucibIe C . .278.3 -2.6 357.1 222.3
Oxford Instrument . .812.0 -13.5 1010.0 495.0
Renishaw. . . . . . . . . .990.5 -27.5 1886.0 862.0
Spectris . . . . . . . . . .1265.0 -25.0 1679.0 1039.0
Aberforth SmaIIer . . .532.0 -4.5 714.0 508.5
AIIiance Trust . . . . . .338.5 -0.9 392.7 310.2
Bankers Inv Trust . . .383.8 -6.2 428.0 346.5
BH GIobaI Ltd. GB .1175.0 -12.0 1210.0 1058.0
BH GIobaI Ltd. US. . . .11.9 0.1 12.2 10.4
BH Macro Ltd. EUR. . .19.5 0.1 20.1 15.8
BH Macro Ltd. GBP 1995.0 -5.0 2070.0 1630.0
BH Macro Ltd. USD. . .19.0 -0.1 20.1 15.8
BIackRock WorId M .652.0 -7.5 815.5 574.5
BIueCrest AIIBIue . . .167.5 -0.7 176.2 162.4
British Assets Tr . . . .119.0 -0.5 140.5 109.0
British Empire Se . . .450.2 -7.8 533.0 409.9
CaIedonia Investm .1515.0 -35.0 1928.0 1462.0
City of London In . . .278.4 -2.8 306.9 257.0
Dexion AbsoIute L . .134.0 0.1 151.0 130.0
Edinburgh Dragon . .224.0 0.1 262.1 201.4
Edinburgh Inv Tru. . .461.0 -8.4 492.2 414.9
EIectra Private E . . .1505.0 -50.0 1755.0 1287.0
F&C Inv Trust . . . . . .287.5 -2.9 327.9 261.5
FideIity China Sp. . . . .79.0 1.5 128.7 70.0
FideIity European . . .994.0 1.0 1287.0 912.0
HeraId Inv Trust. . . . .457.8 -8.2 545.5 419.0
HICL Infrastructu. . . .118.6 0.0 121.3 112.7
Impax Environment . .95.2 -0.3 130.5 88.5
JPMorgan American.814.5 -17.0 916.0 721.5
JPMorgan Asian In . .191.7 -4.3 250.8 170.1
JPMorgan Emerging.528.5 -1.0 639.0 480.1
JPMorgan European.700.0 -9.0 983.5 692.5
JPMorgan Indian I. . .373.0 -2.4 502.0 350.0
JPMorgan Russian .508.0 -7.5 755.0 415.1
Law Debenture Cor. .350.0 -5.0 385.0 309.8
MercantiIe Inv Tr . . . .911.5 -18.0 1137.0 856.5
Merchants Trust . . . .366.9 -7.1 431.8 347.0
Monks Inv Trust . . . .320.0 4.0 367.9 298.1
Murray Income Tru . .606.0 -18.0 673.0 568.0
Murray Internatio . . .890.0 -6.5 991.5 818.5
PerpetuaI Income . . .248.1 -6.9 276.0 234.8
PersonaI Assets T .33690.0 300.0 33725.030210.0
PoIar Cap TechnoI . .345.0 -4.5 391.2 299.5
RIT CapitaI Partn. . .1334.0 -4.0 1348.0 1131.0
Scottish Inv Trus. . . .450.1 -4.9 524.0 417.0
Scottish Mortgage . .642.5 -10.5 781.0 586.5
SVG CapitaI . . . . . . . .196.3 -3.7 279.8 187.9
TempIe Bar Inv Tr . . .858.0 -17.0 952.0 791.0
TempIeton Emergin .559.5 -1.5 689.5 497.0
TR Property Inv T . . .165.0 0.0 206.1 150.0
TR Property Inv T . . . .75.5 -0.3 94.0 69.5
Witan Inv Trust . . . . .446.0 -3.7 533.0 401.5
3i Group. . . . . . . . . . .196.7 0.9 340.0 184.1
3i Infrastructure . . . .120.3 0.1 125.2 113.1
Aberdeen Asset Ma .190.9 0.0 240.0 167.8
Ashmore Group . . . .338.0 2.4 420.0 301.5
Brewin DoIphin Ho . .120.7 -0.8 185.4 113.7
CameIIia. . . . . . . . . .8851.5 39.010950.0 8800.0
CharIes TayIor Co. . .135.0 -0.5 187.0 122.0
City of London Gr . . . .70.0 0.0 93.6 68.0
City of London In . . .348.9 -0.9 461.5 321.3
CIose Brothers Gr. . .697.5 1.5 888.5 656.5
CoIIins Stewart H . . . .57.3 -1.0 90.8 57.0
EvoIution Group . . . . .82.8 -0.3 94.0 62.3
F&C Asset Managem .69.7 1.3 92.9 56.1
Hargreaves Lansdo .495.0 -0.7 646.5 402.5
HeIphire Group . . . . . . .3.0 -0.1 19.8 2.2
Henderson Group . . .115.8 0.9 173.1 95.1
Highway CapitaI . . . . .12.0 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .362.7 12.3 570.5 345.4
IG Group HoIdings . .452.7 0.0 537.5 393.6
Intermediate Capi . . .232.3 1.4 360.3 197.9
InternationaI Per . . . .218.6 -6.4 388.8 196.5
InternationaI Pub. . . .116.2 0.0 118.3 108.6
Investec . . . . . . . . . . .366.6 -1.7 538.0 331.8
IP Group. . . . . . . . . . . .70.3 -0.5 72.0 29.9
Jupiter Fund Mana . .219.3 -1.3 337.3 184.9
Liontrust Asset M . . . .58.3 0.0 94.3 57.5
LMS CapitaI . . . . . . . . .60.0 -0.3 64.8 44.8
London Finance & . . .23.0 0.0 23.5 16.5
London Stock Exch .897.0 24.0 1076.0 717.0
Lonrho . . . . . . . . . . . . .12.5 -1.0 19.8 12.3
Man Group. . . . . . . . .141.3 1.3 311.0 136.0
Paragon Group Of . .182.3 -2.5 206.1 134.6
Provident Financi . .1044.0 -7.0 1124.0 728.5
Rathbone Brothers.1071.0 -17.0 1257.0 972.0
Record . . . . . . . . . . . . .19.4 -1.6 43.0 19.4
RSM Tenon Group . . .26.0 -0.5 66.3 20.3
Schroders . . . . . . . .1380.0 10.0 1922.0 1183.0
Schroders (Non-Vo.1206.0 -6.0 1554.0 970.0
TuIIett Prebon . . . . . .326.6 2.5 428.6 316.4
WaIker Crips Grou . . .46.0 0.0 51.5 45.0
BT Group . . . . . . . . . .190.9 -0.3 204.1 158.6
CabIe & WireIess . . . .39.2 0.2 52.9 31.3
CabIe & WireIess . . . .27.7 0.3 76.9 26.3
COLT Group SA . . . .101.0 0.5 156.2 91.6
KCOM Group. . . . . . . .70.5 -2.2 84.0 47.5
TaIkTaIk TeIecom . . .123.2 -3.8 168.3 119.8
TeIecomPIus. . . . . . .735.0 -5.0 750.5 379.8
Booker Group . . . . . . .74.2 -2.2 80.0 54.5
Greggs . . . . . . . . . . . .511.5 0.5 550.5 429.1
Morrison (Wm) Sup .310.3 -1.9 312.2 262.7
Ocado Group. . . . . . . .87.1 -1.2 285.0 84.8
Sainsbury (J) . . . . . . .298.6 -3.4 391.5 263.5
Tesco . . . . . . . . . . . . .404.7 -0.9 439.0 356.3
Associated Britis. . .1112.0 -18.0 1182.0 940.0
Cranswick . . . . . . . . .704.0 -5.5 883.5 588.5
Dairy Crest Group. . .334.9 -4.2 424.9 325.0
Devro . . . . . . . . . . . . .249.7 -8.0 296.9 223.5
Premier Foods. . . . . . . .3.7 0.3 35.1 3.3
Tate & LyIe. . . . . . . . .679.0 -2.0 689.0 510.0
UniIever . . . . . . . . . .2077.0 10.0 2114.0 1777.0
Mondi . . . . . . . . . . . . .467.1 1.6 664.0 448.1
Centrica . . . . . . . . . . .302.5 4.8 345.8 282.6
InternationaI Pow . . .335.3 5.3 448.6 279.4
NationaI Grid . . . . . . .622.5 0.0 649.5 530.0
Pennon Group. . . . . .714.5 3.5 737.5 584.5
Severn Trent . . . . . .1568.0 25.0 1573.0 1368.0
United UtiIities . . . . .624.0 7.5 631.5 543.5
Cookson Group . . . . .474.2 -10.1 724.5 395.8
DS Smith . . . . . . . . . .209.5 -1.5 266.2 164.4
Rexam . . . . . . . . . . . .336.8 -8.4 400.0 299.8
Price Chg High Low
BerkeIey Group Ho.1234.0 -14.0 1299.0 789.5
Bovis Homes Group.465.0 -13.2 485.5 326.5
Persimmon . . . . . . . .496.3 -6.2 518.5 338.4
Reckitt Benckiser . .3270.0 -23.0 3648.0 3015.0
Redrow. . . . . . . . . . . .110.8 -3.7 139.0 98.4
TayIor Wimpey . . . . . . .36.8 -0.7 43.3 23.8
Bodycote . . . . . . . . . .283.1 2.9 397.7 225.6
Charter Internati . . . .905.0 -5.0 910.0 538.5
Fenner . . . . . . . . . . . .344.1 -1.8 422.5 264.7
IMI . . . . . . . . . . . . . . . .803.5 -19.0 1119.0 636.5
MeIrose . . . . . . . . . . .336.6 -1.5 365.4 265.7
Northgate. . . . . . . . . .243.9 -5.1 346.7 202.0
Rotork . . . . . . . . . . .1722.0 -5.0 1858.0 1501.0
Spirax-Sarco Engi. .1860.0 -30.0 2063.0 1649.0
Weir Group . . . . . . .1860.0 -71.0 2218.0 1375.0
Ferrexpo. . . . . . . . . . .304.5 -12.4 499.0 238.7
TaIvivaara Mining . . .228.3 1.4 622.0 205.0
BBAAviation . . . . . . .180.1 -2.8 240.8 156.0
Stobart Group Ltd. . .119.9 -0.1 163.6 117.5
AdmiraI Group. . . . .1180.0 -6.0 1754.0 1126.0
AmIin . . . . . . . . . . . . .284.0 -6.7 427.0 270.6
Huntsworth . . . . . . . . .60.6 0.9 85.0 55.3
Informa. . . . . . . . . . . .371.6 -1.3 461.1 313.9
ITE Group. . . . . . . . . .181.2 -2.6 258.2 157.7
ITV. . . . . . . . . . . . . . . . .63.6 -1.6 93.5 51.7
Johnston Press. . . . . . .4.6 -0.1 12.8 4.1
MecomGroup . . . . . .153.0 -3.8 310.0 134.5
Moneysupermarket. .106.2 -1.2 120.4 75.7
Pearson . . . . . . . . . .1155.0 3.0 1207.0 926.0
PerformGroup . . . . .210.3 -1.7 234.5 150.0
Reed EIsevier . . . . . .547.0 0.5 590.5 461.3
Rightmove . . . . . . . .1404.0 23.0 1407.0 736.5
STV Group. . . . . . . . .106.8 0.8 168.0 90.3
Tarsus Group . . . . . .128.8 1.8 165.0 114.0
Trinity Mirror . . . . . . . .48.0 -0.8 106.3 37.5
UBM . . . . . . . . . . . . . .506.5 2.5 725.0 416.0
UTV Media . . . . . . . . .120.0 -0.9 150.0 101.0
WiImington Group . . .88.0 0.0 183.0 82.5
WPP . . . . . . . . . . . . . .667.5 4.0 846.5 578.0
YeII Group . . . . . . . . . . .3.7 -0.1 16.1 3.4
African Barrick G . . .567.0 16.0 618.5 393.5
AIIied GoId Minin . . .157.9 -0.3 281.3 34.4
AngIo American . . .2369.5 31.0 3437.0 2138.5
AngIo Pacific Gro . . .280.0 -1.0 369.3 237.9
Antofagasta. . . . . . .1206.0 -5.0 1634.0 900.5
Aquarius PIatinum . .159.9 -5.6 419.0 159.0
BeazIey. . . . . . . . . . . .125.3 -0.7 139.2 109.6
CatIin Group Ltd. . . .389.0 2.0 421.4 331.5
Hiscox Ltd. . . . . . . . . .376.8 -3.5 424.7 340.5
Jardine LIoyd Tho. . .737.5 -23.5 764.5 571.5
Lancashire HoIdin . . .755.5 15.5 768.0 529.0
RSA Insurance Gro. .108.5 -1.2 143.5 105.3
Aviva. . . . . . . . . . . . . .322.3 -6.5 477.9 275.3
LegaI & GeneraI G . . .104.7 -1.0 123.8 89.8
OId MutuaI . . . . . . . . .107.4 -0.8 144.8 98.1
Phoenix Group HoI . .485.0 -32.0 688.0 451.1
PrudentiaI . . . . . . . . .618.0 -2.5 777.0 509.0
ResoIution Ltd. . . . . .270.3 -1.2 316.1 211.3
St James's PIace. . . .330.0 -7.6 376.0 236.2
Standard Life. . . . . . .207.1 -1.2 244.7 172.0
4Imprint Group . . . . .237.0 -8.0 295.0 200.0
Aegis Group . . . . . . .138.2 1.1 158.5 115.7
BIoomsbury PubIis. . .96.8 -0.3 138.0 95.0
British Sky Broad . . .741.5 2.5 850.0 618.5
Centaur Media. . . . . . .38.5 -0.3 73.0 36.0
Chime Communicati.207.0 -0.5 298.5 173.0
Creston . . . . . . . . . . . .87.0 -1.5 121.0 72.0
DaiIy MaiI and Ge . . .425.7 5.0 594.5 343.4
Euromoney Institu . .668.5 -8.5 736.0 522.5
Future. . . . . . . . . . . . . .10.5 0.0 30.0 9.5
Haynes PubIishing . .225.0 5.0 257.0 203.5
BHP BiIIiton. . . . . . .1983.5 -4.0 2631.5 1667.0
Centamin Egypt Lt . .109.0 1.9 197.1 89.7
Eurasian NaturaI . . .676.5 1.5 1125.0 522.0
FresniIIo. . . . . . . . . .1866.0 27.0 2150.0 1296.0
GemDiamonds Ltd. .218.7 -1.3 306.0 179.8
GIencore Internat . . .435.7 1.1 531.1 348.0
HochschiId Mining . .444.6 -1.3 680.0 397.0
Kazakhmys . . . . . . . .935.0 -16.0 1671.0 730.0
Kenmare Resources. .40.1 -0.0 59.9 22.8
Lonmin. . . . . . . . . . .1071.0 8.0 1983.0 974.5
New WorId Resourc .520.5 7.5 1060.0 410.5
PetropavIovsk . . . . . .750.0 -3.5 1165.0 543.5
RandgoId Resource 7455.0 145.0 7475.0 4425.0
Rio Tinto . . . . . . . . .3467.5 -17.5 4712.0 2712.5
Vedanta Resources 1251.0 -6.0 2559.0 948.0
Xstrata . . . . . . . . . . .1003.0 1.0 1550.0 764.0
Inmarsat . . . . . . . . . . .461.0 -2.1 719.5 389.7
Vodafone Group . . . .172.9 -0.1 182.8 155.1
Genesis Emerging . .464.2 -10.2 568.0 430.0
Afren. . . . . . . . . . . . . . .74.9 -7.0 171.2 73.6
BG Group. . . . . . . . .1372.0 -11.0 1564.5 1144.0
BP. . . . . . . . . . . . . . . .452.8 0.3 509.0 363.2
Cairn Energy . . . . . . .288.1 -3.8 469.7 261.4
EnQuest . . . . . . . . . . .106.0 0.3 158.5 86.6
Essar Energy . . . . . .306.5 -5.6 589.5 235.1
ExiIIon Energy. . . . . .298.0 -2.6 469.7 184.2
Heritage OiI . . . . . . . .205.0 -0.2 486.0 190.0
Ophir Energy. . . . . . .248.9 -7.6 299.0 184.5
Premier OiI. . . . . . . . .369.6 -3.9 535.0 310.0
RoyaI Dutch SheII . .2173.5 4.5 2326.5 1883.5
RoyaI Dutch SheII . .2232.5 13.5 2336.0 1890.5
SaIamander Energy .206.2 1.7 317.6 182.3
Soco Internationa . . .314.7 -4.6 400.0 279.8
TuIIow OiI . . . . . . . . .1418.0 -12.0 1493.0 945.5
Amec . . . . . . . . . . . . .901.0 0.0 1251.0 740.5
Hunting . . . . . . . . . . .653.5 -7.5 817.0 530.0
Kentz Corporation . .484.0 -6.8 508.0 275.5
LampreII . . . . . . . . . . .240.1 -5.3 395.2 220.7
Petrofac Ltd. . . . . . .1397.0 -6.0 1685.0 1108.0
Wood Group (John) .619.5 0.0 715.8 469.0
Burberry Group. . . .1353.0 -15.0 1600.0 996.0
PZ Cussons. . . . . . . .365.6 -2.3 409.0 320.5
Supergroup . . . . . . . .652.0 52.5 1820.0 591.0
AstraZeneca . . . . . .2966.5 -7.5 3194.0 2543.5
BTG . . . . . . . . . . . . . .282.6 -2.8 309.7 210.1
Genus. . . . . . . . . . . . .991.0 -22.0 1111.0 800.0
GIaxoSmithKIine. . .1372.0 -7.0 1400.5 1127.5
Hikma Pharmaceuti .634.5 -13.0 900.0 555.5
Shire PIc. . . . . . . . . .1988.0 -19.0 2136.0 1481.0
CapitaI & Countie . . .171.7 -1.3 203.7 142.5
Daejan HoIdings . . .2767.0 17.0 2954.0 2282.0
F&C CommerciaI Pr .104.0 -0.5 108.0 88.0
Grainger . . . . . . . . . . . .90.1 -2.2 133.2 77.3
London & Stamford .116.5 2.0 140.0 111.6
SaviIIs. . . . . . . . . . . . .301.7 -7.5 427.1 256.2
UK CommerciaI Pro . .78.5 0.5 85.5 70.4
Unite Group. . . . . . . .171.3 -2.7 224.1 152.9
Big YeIIow Group . . .255.9 -2.4 352.2 234.2
British Land Co. . . . .495.8 -10.7 629.5 452.0
CapitaI Shopping . . .315.5 -2.0 424.8 296.4
Derwent London . . .1653.0 -25.0 1880.0 1400.0
Great PortIand Es . . .363.0 -4.0 445.0 317.4
Hammerson. . . . . . . .395.0 -11.6 490.9 353.0
Hansteen HoIdings. . .76.0 -1.0 89.5 70.0
Land Securities G. . .680.0 -11.0 885.0 616.0
SEGRO. . . . . . . . . . . .229.4 -2.3 331.3 210.1
Shaftesbury. . . . . . . .495.7 -4.3 539.0 431.7
Aveva Group . . . . . .1614.0 -11.0 1799.0 1298.0
Computacenter . . . . .383.1 -3.9 490.0 354.8
Fidessa Group. . . . .1595.0 -7.0 2109.0 1409.0
Invensys. . . . . . . . . . .210.2 -12.8 364.3 199.6
Logica . . . . . . . . . . . . .81.3 -3.1 147.2 73.9
Micro Focus Inter . . .341.1 -2.0 426.2 239.4
Misys . . . . . . . . . . . . .284.7 -5.3 420.2 214.9
Sage Group . . . . . . . .278.7 2.6 302.0 231.7
SDL. . . . . . . . . . . . . . .640.0 -8.0 711.5 555.0
TeIecity Group. . . . . .600.0 2.5 602.5 430.0
Aggreko . . . . . . . . . .1754.0 -33.0 2034.0 1394.5
Ashtead Group . . . . .160.1 -3.0 207.9 99.4
Atkins (WS) . . . . . . . .545.0 -5.0 820.0 490.2
Babcock Internati . . .696.0 -9.0 733.0 513.5
Berendsen . . . . . . . . .438.0 -5.6 568.0 391.3
BunzI . . . . . . . . . . . . .799.0 -1.5 820.5 676.5
Cape . . . . . . . . . . . . . .452.4 -23.6 591.5 358.3
Capita Group. . . . . . .700.0 -7.5 786.5 635.5
CariIIion . . . . . . . . . . .319.4 -12.3 403.2 298.8
De La Rue . . . . . . . . .863.5 -0.5 879.5 549.5
DipIoma . . . . . . . . . . .319.3 -9.2 414.3 263.3
EIectrocomponents .212.6 -2.3 294.9 182.2
Experian. . . . . . . . . . .790.5 -9.0 833.5 665.0
FiItrona PLC . . . . . . . .376.1 -1.9 397.1 227.5
G4S. . . . . . . . . . . . . . .250.0 -3.9 291.0 219.9
Hays . . . . . . . . . . . . . . .77.1 -1.0 133.6 66.6
Homeserve . . . . . . . .297.1 -25.3 532.0 296.0
Howden Joinery Gr. .116.4 -1.2 127.5 90.0
Interserve. . . . . . . . . .325.1 -4.5 341.3 183.5
Intertek Group. . . . .1915.0 -36.0 2148.0 1715.0
MichaeI Page Inte . . .375.5 -9.5 567.0 338.7
Mitie Group . . . . . . . .246.5 0.0 257.5 194.1
Premier FarneII . . . . .167.0 -3.0 308.8 144.5
Regus. . . . . . . . . . . . . .78.3 0.2 119.0 64.0
RentokiI InitiaI . . . . . . .66.3 -2.7 104.9 64.8
RPS Group. . . . . . . . .187.1 -2.0 253.0 156.6
Serco Group . . . . . . .511.0 0.5 618.5 490.9
Shanks Group . . . . . .115.1 -0.2 130.9 103.0
SIG . . . . . . . . . . . . . . . .92.8 -3.2 153.5 83.8
SThree . . . . . . . . . . . .239.9 -12.4 447.6 213.2
Travis Perkins . . . . . .849.0 -4.0 1127.0 715.0
WoIseIey . . . . . . . . .1841.0 -10.0 2261.0 1404.0
ARM HoIdings . . . . . .620.5 -24.5 651.0 349.7
CSR . . . . . . . . . . . . . .170.9 -4.7 447.0 170.0
Imagination Techn . .459.8 -3.3 502.0 296.9
Pace . . . . . . . . . . . . . . .67.4 1.2 231.8 66.1
Spirent Communica .124.6 -3.4 160.3 109.5
British American . .2904.5 -16.5 2939.5 2282.5
ImperiaI Tobacco . .2306.0 20.0 2316.0 1784.0
Betfair Group. . . . . . .789.5 20.0 1490.0 567.0
Bwin.party Digita . . .135.0 0.4 257.6 100.6
CarnivaI . . . . . . . . . .2205.0 22.0 3153.0 1742.0
Compass Group . . . .569.5 4.0 612.0 512.5
Domino's Pizza UK. .454.8 -5.6 586.0 377.0
easyJet. . . . . . . . . . . .352.4 -1.4 477.3 301.0
FirstGroup . . . . . . . . .329.0 -2.5 412.6 301.8
Go-Ahead Group. . .1343.0 -4.0 1598.0 1203.0
Greene King . . . . . . .444.9 -2.4 518.0 410.0
InterContinentaI . . .1095.0 8.0 1435.0 955.0
InternationaI Con . . .149.8 -7.1 305.0 141.6
JD Wetherspoon. . . .418.0 -7.4 468.3 380.5
Ladbrokes . . . . . . . . .137.5 0.4 155.3 114.0
Marston's. . . . . . . . . . .93.3 -0.7 117.1 84.6
MiIIennium& Copt . .411.9 -7.4 600.5 375.6
MitcheIIs & ButIe. . . .228.3 -3.0 361.0 216.4
NationaI Express . . .218.3 -2.8 270.2 216.6
Rank Group . . . . . . . .138.6 3.2 153.7 109.5
Restaurant Group. . .281.9 -7.1 335.0 254.9
Stagecoach Group . .246.3 -1.2 272.4 200.0
Thomas Cook Group .46.9 -0.8 204.8 33.7
TUI TraveI. . . . . . . . . .159.6 -2.6 271.9 137.2
Whitbread . . . . . . . .1646.0 2.0 1887.0 1409.0
WiIIiamHiII. . . . . . . . .214.2 0.7 244.1 155.5
Abcam . . . . . . . . . . . .361.0 4.5 460.0 307.0
AIbemarIe & Bond . .326.0 15.5 400.1 272.0
Amerisur Resource . .12.5 -0.5 29.0 9.5
Andor TechnoIogy . .504.3 0.3 685.0 370.0
ArchipeIago Resou. . .65.0 1.0 79.0 40.5
ASOS . . . . . . . . . . . .1473.0 18.0 2468.0 1234.0
AureIian OiI & Ga . . . .24.5 1.5 92.0 16.0
Avanti Communicat .305.3 -9.8 735.0 248.5
Avocet Mining . . . . . .232.0 0.5 286.8 177.5
BIinkx . . . . . . . . . . . . .145.8 -4.5 158.0 70.5
Borders & Souther . . .56.5 -0.3 72.3 43.5
BowLeven . . . . . . . . .102.0 -4.0 398.0 74.5
Brooks MacdonaId 1280.0 0.0 1372.5 940.0
Cove Energy . . . . . . . .84.5 -1.8 112.8 61.0
Daisy Group . . . . . . . .99.5 2.3 127.0 88.0
EMIS Group . . . . . . . .515.0 -5.0 580.0 406.0
Encore OiI . . . . . . . . . .76.3 -1.0 151.5 40.8
Faroe PetroIeum. . . .151.5 -2.3 218.3 130.0
GuIfsands PetroIe. . .194.8 -12.3 401.5 142.5
GWPharmaceuticaI . .96.0 -2.0 130.0 87.0
H&T Group. . . . . . . . .320.0 2.0 395.0 277.0
Hamworthy . . . . . . . .648.0 12.0 705.0 373.8
Hargreaves Servic .1130.0 0.0 1180.0 685.0
HeaIthcare Locums . . . .4.7 -0.4 5.3 4.7
Immunodiagnostic . .918.0 22.0 1218.0 768.5
ImpeIIamGroup . . . .284.0 -6.0 387.5 180.5
James HaIstead. . . . .460.0 -5.0 495.0 350.0
KaIahari MineraIs . . .233.0 0.0 301.0 186.8
London Mining . . . . .303.0 -9.0 436.5 283.0
Lupus CapitaI . . . . . .102.0 -1.0 150.0 86.0
M. P. Evans Group . .395.0 -6.5 500.5 371.0
Majestic Wine . . . . . .420.5 -4.5 510.0 352.0
May Gurney Integr . .296.5 9.5 300.0 211.0
Monitise . . . . . . . . . . . .39.8 0.0 40.0 18.5
MuIberry Group. . . .1500.0 -13.0 1920.0 530.0
Nanoco Group. . . . . . .43.5 4.3 114.3 38.0
NauticaI PetroIeu . . .280.3 -9.3 547.0 223.5
NichoIs. . . . . . . . . . . .529.0 -7.0 579.0 410.0
Numis Corporation. . .94.0 1.0 137.8 89.0
Pan African Resou . . .14.0 -0.3 14.5 9.5
Patagonia GoId . . . . . .55.8 3.5 70.0 28.0
Prezzo . . . . . . . . . . . . .58.0 0.0 71.5 53.3
Pursuit Dynamics . . .195.8 -10.0 700.0 160.5
Rockhopper ExpIor .214.0 -1.5 386.0 141.0
RWS HoIdings. . . . . .431.0 -1.0 479.8 266.5
Songbird Estates . . .115.5 -0.5 160.3 110.3
VaIiant PetroIeum . . .445.5 -20.8 672.0 435.0
Young & Co's Brew. .652.5 0.0 712.0 542.5
PremierFoods........3.7 9.9
Supergroup ........652.0 8.8
DuneImGroup......514.0 3.6
ICAP..............362.7 3.5
AfricanBarrickGo ..567.0 2.9
LondonStockExcha 897.0 2.8
BetfairGroup.......789.5 2.6
RankGroup ........138.6 2.4
Mothercare ........154.3 2.2
Inchcape ..........327.2 2.1
Afren ..............74.9 -8.6
Homeserve ........297.1 -7.9
PhoenixGroupHoId.485.0 -6.2
Invensys ..........210.2 -5.7
Cape..............452.4 -5.0
SThree ............239.9 -4.9
InternationaICons ..149.8 -4.5
Ferrexpo ..........304.5 -3.9
RentokiIInitiaI .......66.3 -3.8
ARMHoIdings ......620.5 -3.8
Risers FaIIers
MAINCHANGESUK350
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Tsy 3.250 11. . . . .100.08 -0.14 102.9 100.1
Tsy 9.000 12 . . . .106.23 0.00 114.1 105.8
Tsy 5.000 12 . . . .101.46 -0.03 105.8 101.4
Tsy 5.250 12 . . . .102.72 -0.01 107.2 102.7
Tsy 4.500 13 . . . .105.26 0.00 108.4 105.2
Tsy 2.500 13 . . . .284.82 -0.02 287.7 277.6
Tsy 8.000 13. . . . .113.93 0.00 120.1 113.8
Tsy 5.000 14. . . . .112.11 0.08 113.5 109.2
Tsy 4.750 15. . . . .114.51 0.14 114.8 108.6
Tsy 8.000 15 . . . .128.20 0.14 130.4 123.7
Tsy 7.750 15 . . . .101.55 0.00 108.4 101.0
Tsy 4.000 16. . . . .113.34 0.19 113.4 104.9
Tsy 2.500 16 . . . .342.38 0.08 342.8 310.2
Tsy 8.750 17 . . . .140.38 -0.10 141.9 132.9
Tsy 12.000 17 . . .123.00 -0.43 133.2 122.5
Tsy 1.250 17. . . . .115.21 0.07 115.5 106.7
Tsy 5.000 18 . . . .120.89 0.21 121.2 109.7
Tsy 4.500 19. . . . .118.64 0.28 119.2 105.4
Tsy 3.750 19. . . . .113.31 0.29 113.9 99.4
Tsy 2.500 20 . . . .357.33 0.09 358.5 312.4
Tsy 4.750 20 . . . .120.97 0.29 121.6 106.6
Tsy 8.000 21 . . . .149.79 0.27 151.8 133.8
Tsy 1.875 22 . . . .123.96 0.06 125.4 111.3
Tsy 4.000 22. . . . .115.40 0.33 116.2 99.0
Tsy 2.500 24 . . . .317.26 0.08 320.1 273.5
Tsy 5.000 25 . . . .126.97 0.40 128.0 107.4
Tsy 4.250 27. . . . .118.06 0.37 118.9 97.9
Tsy 1.250 27. . . . .118.46 -0.05 121.0 104.6
Tsy 6.000 28 . . . .142.55 0.34 143.7 119.5
Tsy 4.750 30 . . . .125.27 0.38 126.1 103.0
Tsy 4.125 30 . . . .301.88 -0.13 305.4 261.2
Tsy 4.250 32. . . . .117.60 0.39 118.3 96.0
Tsy 4.250 36. . . . .117.52 0.41 118.8 95.0
Tsy 4.750 38 . . . .127.13 0.41 128.6 102.8
Tsy 4.500 42 . . . .123.72 0.50 125.1 98.9
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Hang Seng
Harry

H
H
y r r a H
g S n a H g n e g S
Wealth Management
30 CITYA.M. 8 NOVEMBER 2011
BUNGA BUNGA
37 Battersea Bridge Road, SW11 3BA
020 7095 0360, bungabunga-london.com
FOOD hhiii
SERVICE hiiii
ATMOSPHERE hhhii
Cost per person without wine: 25
T
heres often a point in the
Apprentice TV show when a contes-
tants confidence surpasses sense.
Someone has an idea, and you
spend the next 50 minutes watching the
team run round and execute it in some
terrifying way, pretending to be experts in
something theyre not.
There was a sense of Apprentice dj vu
in last weeks visit to Bunga Bunga in
Battersea. Except the chaos was not on
screen. Instead, we were living in Team
Bunga chaos the overexcitement for a
great idea far outstripping the execution.
To be fair, the evening did start promis-
ingly. Though the front of house were
chatting away for a while before I could
ask them about my booking, there were
no airs and graces. Nor was there the stiff
service you might have expected from a
place that had royalty and the cast list
Not as wild as the original
from Made in Chelsea in their opening
party pictures. The website promised
tongue-in-cheek banter, and there were
nice little touches all guests were given a
fun newspaper with updates within
Bunga world, and there were phrases at
the bottom of the menu to help you order
in Italian should you want to have a go.
Cocktails were okay (although Ive
never had a Bellini before with a foamy
top layer), and the food on the menu
sounded like simple rustic fare, named
things like artichoke heart stealer, and
Italys fun guy. Guffaw.
But then the entertainment started. My
goodness. It was as though someone with-
in Team Bunga had said wouldnt it be
great if a contortionist in flesh-coloured
leotard stretched their groin next to the
diners. Because thats what he did. The
next act simply stopped halfway through
(we hadnt even noticed it had until the
manager made a point of coming up to
tell us). The staff themselves seemed unim-
pressed with the acts, dodging a contor-
tionists limb or an opera singers
gesticulation with resentment as they
delivered pizza to table. And then there
was the re-enactment of the murder of
George Bizets Carmen and the awkward
scene where fake blood was smeared all
over Carmens dcolletage while the room
tucked into their plates of Prosciutto di
Parma. At that moment, it seemed that
most in the room couldnt help but share
a withering Merkozy-esque smirk with fel-
low diners. The bizarreness was unfath-
omable.
And then the food. Lets start with the
good things. The pizza wasnt too bad
(although my companion was less forgiv-
ing as a prime supporter of the best-ever
pizza in London from Brixtons Franco
Manca). The sourdough base was lovely
and crisp, with a smatter of spicy sausage
and juicy squirt-as-you-bite cherry toma-
toes. And even though it looked like a tart-
ed-up Jackson Pollock, the salad of
avocado, tomato and mozzarella tasted
fine and fresh.
The rest of the food was a bit of a disas-
ter. Fried sage leaves with anchovy fillets
were bitter and terrible. Courgettes were
limpid batons of blandness and were
served with a basil non-garlic aioli that
had the extraordinary talent of increasing
their blandness. A bruschetta with under-
cooked wild mushrooms was forgettable.
The cured meats on garlic bread were
tasty, but then its hard to mess that up.
And, worst of all, Team Bunga couldnt
quite get the hang of the meaning of serv-
ice, which consisted of constant badger-
ing, and almost 30 instances of
conversation-stopping interruption.
What would have been charming
became try-hard kitch, and as the DJ spun
Kings of Leons sex on fire, we felt as
though we were coming to the end of the
night at a batty uncles wedding. Bunga
Bunga will thrive because there are
enough real-life Made in Chelsea types to
populate the bar. I would rather spend my
time watching the drama unfold on my
television. And as far as Team Bunga is
concerned, Im afraid, youre fired.
Above: the kitch inte-
rior at Bunga Bunga,
above right: a crisp
sourdough pizza
Bizarre performances
and intrusive service
make for a very odd
party, says Helena Lee
HEAD SOMMELIER AND MANAGER OF
LUTYENS RESTAURANT
ANDREW CONNOR
QUAFFERS CORNER
W
ith Thanksgiving fast approaching,
Im devoting this week to helping
my American readers select a
wine to have with their turkey. Its
not a festival that we celebrate in New
Zealand but, as my sister-in-law is from New
Mexico, Im familiar with the palate of
flavours and the challenges there are to
matching these with wine.
I think its only right to drink American
for such a quintessentially American festival.
Champagne has its place at other celebra-
tions but this is the perfect time to kick off
with one of the hoppy US craft beers that
have become increasingly easy to find in UK
shops (Sierra Nevada Pale Ale is widely
available and delicious). Its the perfect
palate cleanser to sharpen your appetite.
Lets be frank here: there is a lot of sweet-
ness going on, from the squash and sweet
potato (maybe with some sneaky marshmal-
lows) to the cranberry sauce and pumpkin
pie.
Turkey is a forgiving (dare I say bland)
meat and will happily accommodate just
about anything, but I tend to think that as
the nights are getting shorter its best to
drink red. I like the red fruit and warm spice
of Sonoma Coast Pinot Noir (Belle Glos, La
Crema) and my Canadian assistant Andres
is a great advocate for Beaujolais (but stick
to one of the 10 Crus such as Morgon or
Julinas). Theres been an explosion in quali-
ty in Beaujolais recently (particularly with
the excellent 2009 vintage) so if youve not
tried one recently, give it a shot. If its not
vulgar to say so, this is a celebration of
natures bounty so choose something at a
price that will allow wine to flow abundant-
ly (while drinking responsibly of course
ahem).
When the pumpkin pie comes around, I
must confess that I struggle to select a wine
to accompany it. Why not throw caution to
the wind with a bottle of rye whiskey (spicy
Sazerac 18 would be my choice), then tweak
the nose of the trade embargo by sitting
back and enjoying a fine Cuban cigar. If
youre celebrating in London rather than
back home, why not take full advantage?
Follow Andrew on Twitter @LutyensWine
Giving thanks
for all the wine
FOOD & BOOZE NEWS
HELENA LEE
TOP VIEWS AT REVAMPED BAR
With 360-degree views across London, this
bar is particularly stunning on a clear night
over Oxford Street where you can see the
Christmas lights. The revamped viewing
gallery on the 33rd floor has extended its
cocktail bar so you can enjoy well-crafted
cocktails, such as the aged Barcardi 8 year
Manhattan that has been matured in oak
casks for six weeks, and hearty bar snacks.
The Merguez sausages are a treat. Centre
Point, 101-103 Oxford Street, WC1A 1DD
CANTEEN IN COVENT GARDEN
Covent Garden markets first restaurant in
residence is a pop-up version of the Canteen
restaurants. They are also hosting one-off
menus with former Gordon Ramsay chef
Mark Sargeant on 8 December,
and the up and coming Neil
Borthwick on 15 December. Each
dinner is 45 and also includes a
glass of hot cider.
Email events@canteen.co.uk, or phone
020 7608 2627 to book.
TSURU SUSHI LUNCH DELIVERIES
Feeling peckish, but too busy to leave the
desk? Tsuru have launched a lunchtime deliv-
ery service for all EC postcodes. Now you can
pick up the phone and order fresh maki, tem-
pura and miso soup, katsu sandwiches and
even sake or champagne should the occasion
call for it.
To order, call Bankside 020 7928 2228,
Bishopsgate 020 7377 1166, Mansion
House 020 7248 1525, www.tsuru-
sushi.co.uk
Left: Paramount bar
at Centre Point
Lifestyle | Restaurants
TOYOTA YARIS
REVIEW
IN TOMORROWS
LIFESTYLE
31
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JAMES MAYS MAN LAB
BBC2, 8PM
James works in his own foundry to
form a lemon squeezer from various
kitchen utensils, and provides a lesson
in how to cheat at playing the guitar.
THE UNFORGETTABLE NORMAN
WISDOMITV1, 7.30PM
Family and friends pay tribute to the
funnyman. Including contributions by
Normans son Nick, singer Vera Lynn
and actress Honor Blackman.
MY TRANSSEXUAL SUMMER
CHANNEL 4, 10PM
Seven transgender individuals gather
at a summer retreat, where they share
mutual understanding of what it is like
to be a transsexual in Britain today.
BBC1
SKY SPORTS 1
7pmSky Sports News at Seven
7.30pmLive Johnstones Paint
Trophy Football. Sheffield United
v Bradford City (Kick-off 7.45pm).
10pmRevista De La Liga 11pm
A League of Their Own 12am
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Paint Trophy Football 2.30am
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& Her 11pmFamily Guy 11.45pm
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4am-5amThe Growing Pains of
a Teenage Genius
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Seconds
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HEALTH
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Know I Was Pregnant 9pm
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Change Your Life 5.10am-6am
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Professionals: Five chefs face a
skills test of spinning sugar.
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Smash the German Dams
10pmLater Live with Jools
Holland: Steve Earle performs.
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Wives
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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
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Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
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
2 Evaluating (9)
6 Bulgarian
capital (5)
7 Girl who features
in Lewis Carrolls
famous stories (5)
9 Pin (3)
10 Grin (5)
12 Enrol (5)
14 Of the cuf (2-3)
17 Grate (teeth) (5)
19 Melody (3)
20 Voice qualities (5)
21 Famous American
battle (5)
22 Refuse to stop (9)
DOWN
1 Helper (9)
2 Civilian dress worn by
a military person (5)
3 With the mouth
wide open, as in
wonder or awe (5)
4 Employment (5)
5 Imbecile (5)
8 Creature found
in the soil (9)
11 Hawaiian oral
garland (3)
13 Grandmother (3)
15 Ocean-going vessel (5)
16 Coat in fat (5)
17 Level (5)
18 Speedily (5)
A
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O A
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G
E
4

4
4
4


4
H A S T E N I S
I A E T H N I C
J E R I C H O H U
A C R I B A L D
B A S H F U L L S
A I L E W E
A V E N T H R A L
G O A T E E I E
N G C A R N A G E
E X E T E R G R
S D S E E M L Y
1 6 2 7 8 7
3 4 2 1 6 2 4 1
4 7 1 3 5 6 9 8 2
7 8 6 8 9 9 7
5 9 8 9 1 8
2 5 3 1 7 9 8 5
9 7 5 7 5 3
1 7 2 1 6 3 2
5 9 7 3 2 8 4 6 1
2 3 1 4 9 8 7 6
8 9 3 7 9 4
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
TREMBLING
Lifestyle | TV&Games
CITYA.M. 8 NOVEMBER 2011 32
Sport
33 CITYA.M. 8 NOVEMBER 2011
WORDS BY FRANK DALLERES
Ive been physically and mentally
abused many times at games in UK
QPRs new owner
and airline mogul
Tony Fernandes on
racism and polishing
a rough diamond
T
OPICS of conversation are not hard
to come by with Tony Fernandes,
the gregarious Malaysian entrepre-
neur who recently added Premier
League football club Queens Park Rangers
to an empire that includes AirAsia and
Formula One racing team Lotus.
In a whirlwind half-hour he explains his
recipe for business success, discusses QPR
becoming bigger than Liverpool within 10
years, reveals the clubs plans for a new
40,000-seat stadium in west London and
his attempts to sign England star and glob-
al brand David Beckham.
The charismatic 47-year-old (motto: No
dream is too big) could not be more at ease
in a hospitality box at the teams Loftus
Road ground, expounding on his ambi-
tious plans for Rangers and recalling the
childhood experiences that would later
colour his portfolio.
But there is an elephant in the room.
When Fernandes meets City A.M. the club
is still engulfed in a racism row that began
almost two weeks earlier, when Chelsea
and England captain John Terry was
accused of shouting vile insults at QPR
defender Anton Ferdinand.
Terry denies racial abuse and his club
have supported him fully, yet the potential
damage posed by separate investigations
by the Metropolitan Police and the
Football Association (FA) have kept the
story firmly in the spotlight.
Fernandes and QPR have pledged sup-
port for Ferdinand and co-operated with
the FA but Fernandes is at pains to point
out that, contrary to popular belief and in
a development that casts a fresh light on
reports of death threats received by
Ferdinand, neither the club nor player
complained to the FA over the incident.
He also rejects the suggestion that a
guilty verdict against Terry would wreak
severe damage on the reputations of both
one of Englands most distinguished play-
ers and the game in this country.
Lets put the matter in context, he
begins. I dont think Anton has com-
plained. I dont think QPR have com-
plained. We have just said If you want to
investigate we will give you full support,
which we have. And we have given our
player full support.
I dont think, if it happens, its the end
of English football. I dont necessarily
think if John Terry said it, hes a racist. We
all say things in the heat of the matter. All
I can say, as someone who has been watch-
ing football for the best part of 30 years, is
that English football should be proud of
how racism has, in my opinion, become a
smaller issue than it was.
KICKED, SPAT AT
Fernandes, who fell in love with football
via the BBCs World Service and Shoot!
magazine as a schoolboy in England and
played striker for London School of
Economics (I was a poacher, but with a
different body, he jokes), vividly remem-
bers the dark days of the 1980s, when ter-
race violence and racism were rife.
Ive been physically and mentally
abused many, many times at football
games in the UK, he says. I have been
kicked, spat at. I used to be scared. Id still
go because I loved the game, but youd
worry which Tube you took, where you
were standing, youd hide your scarf some-
times. I dont feel that one bit [now].
So comfortable is he in his new role as
majority shareholder of the top-flight
newcomers that he regularly chats with
fans on social media sites Twitter and
Facebook, and even met them in a pub for
drinks before a recent home game to the
discomfiture of the clubs media staff.
I wasnt worried about security he
was, he laughs, pointing at QPRs press
manager. They sent two [security] guys
who couldnt even get through the door,
they were so wide. It didnt scare me for
one moment. The fans here are fantastic,
they need to be appreciated and I need to
hear their views; to show I am like them.
He goes on: I want to watch a game in
the stands. Will he? Yeah. I havent
thrown it at the guys here yet, but Id like
to do that, because then you get to really
understand what the club is all about.
It is hard not to warm to Fernandes and
QPR fans have, with an influx of signings
and some good results, including a win
over more illustrious neighbours Chelsea,
lifting them to mid-table since his August
takeover. He has tremendously enjoyed
the ride, even if he has been taken aback
at its effect on his already high profile.
Ive got a Formula One team, Ive got
an airline, Ive been relatively public any-
way, but football has put it on another
wavelength, he says, launching into a
favourite anecdote. Its funny: one of the
other owners came into Heathrow and the
immigration officer said Why are you
here?. He said Ive come to watch my foot-
ball club, QPR. The officer said You dont
own it, Tony Fernandes does! He chuck-
les and surmises: Its a global sport.
His wealth was built on AirAsia, the
struggling carrier he bought for a few
pence and turned into a business worth
more than 2bn, using what he calls his
little recipe. He has high hopes the same
approach My whole philosophy is pol-
ishing an unfinished diamond will revi-
talise car manufacturer Caterham, whose
name will replace Lotus in his Formula
One team next year, and also QPR, who he
believes can make money long term.
BECKHAM
One part of that plan involves moving to a
new stadium and Fernandes confirms the
club have identified soon-to-be-former
BBC premises at White City as the pre-
ferred site. Its true, but its one hell of a
job, he says. Without a doubt I think
QPR could fill a 40,000-seat stadium, and a
bit more. Ive only looked at White City.
Logically, Id like to stay where we were
born, so we havent looked at other sites.
Overseas owners have been accused of
heresy for floating the idea of scrapping
relegation and, in the case of Liverpools
American investors, switching from collec-
tive to individual selling of broadcast
rights. Fernandes is firmly opposed to
both proposals and insists he cannot see
them gaining sufficient support.
No I really cant. I think, if we stay up,
in 10 years time we could be as popular as
Liverpool. Secondly, the Premier League
was set up in this structure. Its not right
to say Drop this, screw everybody else.
Fernandes, who calls Kuala Lumpur
home but has a house in London, has com-
piled a shopping list for the January trans-
fer window. However, Beckham, who may
leave LA Galaxy, is unlikely to be on it,
despite QPRs interest.
I think signing Beckham is dead in the
water, to be honest, he admits. It was a
nice thought but midfield is probably one
of our strongest parts and Im not sure
where Beckham would play, to be honest.
We had initial discussions. It will be nicer
in this transfer window because we have a
bit of time. Weve got a list, Ive told every-
one to dream big and they certainly have.
With Fernandes at the helm, it looks
like QPR will be giving people plenty to
talk about for years to come.
Fernandes believes
QPR could become as
popular as Liverpool
within a decade
Picture: Laura
Lean/CITY A.M.
I dont think
Anton has
complained. I
dont think
QPR have
complained.
We have just
supported an
investigation
Sport
34
SECRETARY of State for Culture,
Olympics, Media and Sport Jeremy Hunt
has defended the Governments deci-
sion to spend nearly 750,000 on tickets
for next summers London Games.
Hunts department applied for and
have been allocated 8,846 tickets to the
Games, including 213 tickets to the
Opening Ceremony at a total price of
194,525.
The allocation, which also incorpo-
rates 33,085 spent on 256 athletics
tickets and 26,600 on 410 beach volley-
ball tickets, primarily funded by the tax-
payer, is sure to anger the general
public, especially after 700,000 of the
1.9m people who applied ended up
with nothing.
But Hunt said yesterday: The first
point to make is that this is less than
0.1 per cent of all tickets and none of
them are going to be given away to
civil servants or politicians.
A small number of those tickets will
be made available to people who have
been working hard on the project for
the last five years or so but they have to
buy those tickets at face value.
Government
splashes out
750,000 on
2012 tickets
BY JAMES GOLDMAN
OLYMPICS

IRELAND captain Brian ODriscoll has


been ruled out for six months with a
shoulder injury and will miss next
years Six Nations.
The 32-year-old has not played since
the World Cup quarter-final defeat
against Wales last month and is set to
undergo surgery for a trapped nerve
in his shoulder next week.
The centre, who recently revealed
his intention to bow out of the game
after the 2013 Lions Tour to Australia,
is likely to be out of action for up to six
months and faces a race to be fit in
time to take any part in Leinsters
Heineken Cup defence.
The shoulder has become uncom-
fortable over the last eight months
and has just got progressively worse,
said Irelands record try-scorer. I cer-
tainly see myself coming back from
this and playing another season.
I have been out for six months
before so I know how to cope with
these things its about keeping fit
and involved. The danger of being
away for six months is that you could
be totally forgotten about.
ODriscoll out
of Irelands
Six Nations
campaign
BY JAMES GOLDMAN
RUGBY UNION

QPR owner Tony Fernandes says nei-


ther Anton Ferdinand nor the club
are to blame for prompting the ongo-
ing police and Football Association
investigations into allegations
Chelsea and England captain John
Terry used racially abusive language
towards the Rangers player.
Ferdinand has received death
threats since the controversy erupted
last month, following QPRs 1-0
defeat of Chelsea at Loftus
Road, and was the subject
of derogatory chants
from some Chelsea fol-
lowers in their
Champions League
match at Genk last
week. He has co-operat-
ed with the FAs probe
into the Terry incident
and last week gave the
governing body a full state-
ment.
But Fernandes, in an interview
with City A.M. published today and
conducted before the death threats
against Ferdinand emerged, said the
FA made the first move by asking
QPR to co-operate, contrary to wide-
spread reports that the club had
lodged a complaint against Terry.
I dont think Anton has com-
plained. I dont think QPR have com-
plained, Fernandes (inset) said. We
have just said If you want to investi-
gate we will give you full support,
which we have. And we have given
our player full support.
The complaint about Terry, who
vehemently denies racially abusing
Ferdinand, is understood to have
been made to the FA by a member of
the public. A separate complaint to
the Metropolitan Police over the
same incident was last month also
made by a member of the public.
Malaysian Fernandes, who says he
was spat at and kicked on visits to
British football grounds in the 1980s,
defended Ferdinand over his han-
dling of the controversy.
I think he has behaved in an
incredibly polished and gentle-
manlike way, he said. He
called up to say thank you
for the support. I didnt get
into the details of how he
felt; I just said We are
there 100 per cent for you,
focus on the football, stand
above it, dont let people
taunt you into silly state-
ments.
Fernandes does not believe a guilty
verdict would necessarily damn Terry
and says the game has made huge
strides since his own days as a school-
boy and student in England.
I dont necessarily think if John
Terry said it, hes a racist, he added.
We all say things in the heat of the
matter. All I can say, as someone who
has been watching football for the
best part of 30 years, is that English
football should be proud of how
racism has, in my opinion, become a
smaller issue than it was.
TONY FERNANDES INTERVIEW: P33
Death threat
Anton not to
blame, says
Fernandes
I
TS FAR from ideal to have to com-
ment on matters that have taken
place away from the golf course,
but it would be remiss of me not
to voice my disappointment at the
comments made by Steve Williams
towards his former employer Tiger
Woods.
I dont wish to inflame an already
delicate situation, but while Im sad-
dened by what Williams said at a cad-
die awards dinner in Shanghai last
week, Im equally upset at the lack of
action taken by Adam Scott, who has
opted to retain his services.
FAIR PLAY
On a far more positive note I was
delighted to see Martin Kaymer
return to winning ways at the WGC
Champions tournament. In a year of
tremendous individual performanc-
es the Germans final round was
right up there with anything Ive
seen this season.
I felt more than a measure of sym-
pathy for Freddie Jacobson, who real-
ly did very little wrong on the final
day, and you can only really hold
your hands up and say fair play
when someone reels off nine birdies
in the last 12 holes of such a high-pro-
file event.
SPOTLIGHT
It would be harsh to describe
Kaymers year as sub-standard but its
fair to say hes struggled to cope with
the extra trappings and media focus
that comes as part of being ranked
No1 in the world.
He admitted as much last week
and I wasnt entirely surprised. Rory
McIlroy seems to have taken the extra
attention in his stride, but the spot-
light isnt for everyone and its easy
to forget that at just 26, Kaymer is
still relatively young in golfing terms.
It was a remarkable achievement
to have headed the rankings, howev-
er briefly, at that age and Im sure
hell have learned a lot over the past
12 months and certainly done a lot of
growing up.
NATURAL GAME
To me it seemed like he reverted back
to his natural game in Shanghai
which is encouraging its the way
he should be playing. After the Ryder
Cup he was looking to draw the ball
in order to add an extra dimension to
his game and I think that threw him
out of kilter.
Winning in Shanghai couldnt be
compared to lifting a Major but
it was the next best thing and Im
sure it will trigger a return to
more consistent performances.
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GOLF COMMENT
SAM TORRANCE
Let down by Williams, pleased for Kaymer
BY FRANK DALLERES
EXCLUSIVE

Ferdinand has received


death threats since the
controversy erupted last
month
Picture: ACTION IMAGES
35
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WORLD and European champions
Spain have named seven members of
the Barcelona side that lifted the
Champions League trophy at
Wembley back in May in their squad
to face England on Saturday.
Vincente del Bosques squad also
includes former Arsenal captain Cesc
Fabregas, who returned to Camp Nou
in the summer, while injured club
colleague Pedro has been replaced by
Sevilla winger Jesus Navas.
Del Bosque has selected four
Premier League based players in his
23-man squad, including Chelsea duo
Fernando Torres and Juan Mata and
Manchester Citys David Silva, whose
team-mate at Etihad Stadium, Micah
Richards, insists he is
ready to fight for an
England place, having
again been overlooked
by manager Fabio
Capello.
The 23-year-old right-
back, man of the match
in his sides 6-1 victory
over rivals
Manchester United
last month, has
made only one
appearance since
the Italian took
charge of the nation-
al team.
Despite being an
integral part of Citys
rise to the Premier
League summit,
Richards, who became
Englands youngest-ever
defender when Steve
McClaren picked him as
a 17-year-old in 2006, has
failed to force his way
into Capellos plans,
with Liverpools Glen Johnson and
Tottenham youngster Kyle Walker
preferred.
Richards reacted angrily on
Twitter on Sunday when he learned
of his latest omission, but yesterday
he was in more reflective mood,
believing international recognition
will come his way if he is able to
maintain his current form.
I must be doing something right,
Richards admitted. In seasons gone
by I have not been playing my best.
Now Ive started off well and we are
top of the league.
As Ive said before, its up to
Capello. If he wants to give me a
shout I am always there. I have
improved, twice, three times since
the first time I played for England.
Ive still not been given a start
under this England manager, so Ive
not been able to show what I can do.
I know my form has to be right for
City before he can pick me, but if he
gives me my chance I am sure I can
take it with both hands, just like I did
before.
To be fair when I first
got called up I was play-
ing centre-half for
City. I then played
right-back for
England, so I
cant really
complain
it happens.
J o n e s
a n d
S ma l l i n g
have been
doing well for
Manc he s t e r
United. If the
manager wants
to give them a
chance it is up to
him, there is no
point me moaning.
BY JAMES GOLDMAN
FOOTBALL

Richards still hopes


to join Silva on the
international stage
Results
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email sport@cityam.com
SPORT | IN BRIEF
Gourlay outlines stadium need
FOOTBALL: Chelsea chief executive Ron
Gourlay has warned the club could strug-
gle to compete in Europe unless they
move to a new stadium. He said: We
have corporate hospitality that is second
to none and 30,000 season ticket hold-
ers. But we have a stadium slightly larger
than 40,000 which drops to 38,000 on
Champions League nights.
Sarries sign Wigans Tomkins
RUGBY UNION: Wigan centre Joel
Tomkins, 24, has completed his switch
from league to union by signing a
four-year deal with Saracens in a move
that has cost the Premiership champions
a reported 250,000.
BASE CAMP | England 2012 HQ revealed
This is the Polish train-
ing base England will
use to launch their
Euro 2012 campaign.
Fabio Capellos side will
plot their tactics at the
Hutnik Municipality
Stadium in Krakow
next summer. And from
the look of this scuffed
goalmouth, Joe Hart
may have to bring a
pair of tracksuit bot-
toms with him.
Picture: GETTY
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