BUSINESS WITH PERSONALITY
WHY CAMERON’S WRONG
Issue 1,207 Thursday 26 August 2010
SANTANDER
SUSPENDS
TOP ANALYST
REGULATION
▲
BY OLIVER SHAH
US authorities will step up their
investigation into insider trading at
Banco Santander today as the scandal
threatens to engulf BHP Billiton’s
$39bn (£25bn) bid for PotashCorp.
The Securities and Exchange
Commission (SEC) has secured pow-
ers to seize documents, emails and
phone logs from Santander’s Madrid
office after charging senior executive
Juan José Fernández García with mar-
ket abuse.
Fernández García is accused of
making nearly $1.1m in illegal profits
by piling into call options in
PotashCorp before BHP made its hos-
tile offer and selling them shortly
afterward when the stock had soared.
Santander, which is advising BHP
on its attempted takeover, yesterday
suspended Fernández García and
insisted it had followed the “appropri-
ate procedures”. “We are awaiting the
results of both our internal and the
supervisors’ investigations,” a last two weeks, and dismissed talk of
spokesperson said.
FTSE 100 ▼ 5,109.40 -46.55 DOW ▲ 10,060.06 +19.61
TO TAKE PATERNITY LEAVE
A FATHER OF TWO SPEAKS OUT P23
The SEC will question Santander’s
Mergers &Acquisition bankers to see
whether they leaked news of the
impending bid to Fernández García,
who works in a separate part of the
bank as head of European equity
derivatives research.
Daniel Hawke, head of the SEC’s
market abuse division, told City A.M.:
“We will be examining all avenues of
inquiry relating to the circumstances
surrounding the trading. It appears
highly suspicious and the likelihood
that it was based on an investment
decision without access to private
information is low.”
Fernández García, 35, has hired top
lawyer Scott Lassar of Sidley Austin in
Chicago to help argue his case. Lassar
is a former US attorney and has
worked for clients such as Charles
Fernández García is
accused of making nearly
$1.1m in illegal profits by
piling into call options in
PotashCorp before BHP
made its hostile offer
NASDAQ ▲ 2,141.54 +17.78 £/$ ▲ 1.55 +0.01
www.cityam.com
Conaway, the former Kmart chief
executive, who was fined more than
$10m for misleading investors in the
retail chain in February.
It is not known whether Fernández
García’s co-accused, Luis Martín Caro
Sánchez, has engaged a lawyer. Caro
Sánchez also lives in Madrid but is
not thought to work for Santander.
The two men have been sum-
moned to appear before judge Marvin
Aspen at the US District Court for the
Northern District of Illinois today.
Aspen will set another date in two
weeks’ time, by when the SEC must
report with details of its probe.
Santander, the Eurozone’s largest
bank, is one of several institutions
that helped BHP line up a $45bn debt
facility for its PotashCorp approach.
BHP chief executive Marius Kloppers
launched a fresh attack at speculators
yesterday saying that “fast money”
was piling into Potash in an attempt
to profit from the deal. He said as
much as 40 per cent of Potash’s share
register had changed hands in the
a counter-bid. MORE: P2 and P8
ASIL NADIR
Under fire Minerva boss Salmaan Hasan received backing from Standard Life
Standard Life supports
Minerva in board battle
▲
PROPERTY
BY MARION DAKERS
CITY stalwart Standard Life threw its
weight behind the board of Minerva
yesterday, after the property investor
and its activist shareholder KiFin trad-
ed another round of inflammatory
statements.
“It is not clear to us that the KiFin
nominated board candidates would
act in the best interests of all share-
holders,” said Andrew Jackson, an
investment director at Standard Life
Investments, which owns a 4.89 per
cent stake in Minerva.
KiFin, owned by billionaire Nathan
Kirsh, defended its plans to oust sever-
£/¤ 1.22 unc ¤/$ ▲ 1.27 +0.01
BACK IN UK
RETURNS AFTER
17 YEARS ON THE
RUN P2
FREE
al Minerva board members in its lat-
est strongly-worded letter to share-
holders yesterday.
It complained of the apparent apa-
thy of Minerva’s non-executive direc-
tors, and claimed the firm “has
continued to mislead you” by couch-
ing the planned overhaul as KiFin’s
attempt to seize control by stealth.
KiFin also turned on chief executive
Salmaan Hasan, pointing out his
salary represents 14 per cent of the
firm’s wage bill.
Minerva hit back, telling sharehold-
ers it regrets KiFin’s continued public
criticism, but strongly recommends
they vote down the proposals at a
crunch meeting on 8 September.
Certified Distribution
05/07/2010 till 01/08/10 is 94,889
 2 News
Kloppers won’t fall into the bid trap
DEPUTY EDITOR’S LETTER
DAVID HELLIER
BHP chief executive Marius Kloppers
was determined yesterday to play
down fears that he is about to over-
pay for PotashCorp, the Canadian fer-
tiliser group.
As Kloppers unveiled healthy annu-
al results, most people’s minds were
focused on what he had to say about
the group’s pursuit of Potash, for
which he has made a $39bn bid.
Different times require different
tactics, and that applies to mergers
and acquisitions as well as anything
else.
In the heady days of the 1980s, for
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WHAT THE OTHER PAPERS SAY THIS MORNING
US CHAINS BEEF UP MEALS TO LIFT
PROFITS
Fast-food chains in the US are rolling
out more expensive premium prod-
ucts after two years of relentless focus
on lower priced meals in the hope of
recouping profit margins surren-
dered during the recession of 2008
and 2009. McDonald’s is selling a
“smokehouse deluxe” burger in
Canada priced at more than US$5.00
at close to 100 restaurants in the
province of Ontario.
UK COAL EXPECTS RETURN TO BLACK
UK Coal said the end of lossmaking
legacy contracts coupled with bur-
geoning production should return
the group to profitability next year.
However, pre-tax losses at the UK’s
largest coal miner widened from
£81.5m to £93.2m in the six months
to June 26, on revenues down from
£159.8m to £141.3m.
example, the City loved a deal junkie
and flocked to back the likes of Lord
Hanson and Williams’ Holding’s
Nigel Rudd.
Obviously investors were con-
cerned at the kinds of premium being
paid to take companies out, but in the
main they trusted management to
get it right.
But the financial crisis we have just
been through has changed all that.
The careers of men such as Sir Victor
Blank and Sir Fred Goodwin took a
turn for the worse after they were
considered to have made ill-judged
acquisitions.
Then there is the case of Tidjane
Thiam at the Prudential whose $35bn
proposed acquisition of AIA had to be
aborted due to a lack of support from
investors.
With markets as nervous as can be
and with sentiment clearly against
the macho deal-doer, Kloppers could
be forgiven for emphasising he won’t
overpay for Potash.
He was keen to dampen down spec-
Coalition hits
back at IFS
POLITICS
▲
BY STEVE DINNEEN
THE coalition government hit back
yesterday against claims its austerity
budget is regressive and will hit the
poorest hardest.
The Institute of Fiscal Studies (IFS)
claimed poorer families will suffer
most from stringent welfare cuts
such as slashing housing benefits.
But deputy Prime Minister Nick
Clegg, whose reputation relies on
convincing the electorate that the
Budget is fair, criticised the “partial”
IFS report.
He said: “If you just look at who is
receiving benefits then, in a sense,
you don’t ask the most important
question of all – how you can relieve
poverty and make Britain fairer.”
He added: “[It is a] single snapshot
that simply doesn’t provide the full
OUTLOOK IMPROVES FOR FORTH PORTS
Oil producers’ safety concerns follow-
ing April’s Deepwater Horizon acci-
dent in the Gulf of Mexico hit
first-half throughput at two of the
Scottish oil and gas terminals operat-
ed by Forth Ports, its chief executive
said on Wednesday. Announcing
interim results at the ports and prop-
erty business, Charles Hammond said
oil shipments through Hounds Point
and gas exports through Braefoot Bay,
both on the Firth of Forth, had fallen.
DUBAI WORLD PLANS $19BN ASSET
SALE
Dubai World has told lenders it could
raise up to $19.4bn from selling its
assets, in a bid to repay $14.4bn of the
holding company’s debt, the terms of
which it is looking to restructure,
according to people close to the situa-
tion. In late July, the company set out
its debt restructuring plan, including
a time frame over which it would con-
sider selling assets to raise funds to
repay lenders.
ulation there would be a host of other
bidders for the Saskatchewan-based
fertiliser group, something that
might lead to the price being ramped
up. “This is the only bid on the table,”
he said.
In the next few days Kloppers will
embark on a globe-trotting roadshow
where he will canvass shareholders
about the bid.
He has not had an opportunity
between Potash’s rejection last week
and yesterday’s results to meet the
Saskatchewan-based company’s man-
agement.
My guess is that he will reassure
investors he won’t get into some crazy
bidding war but that he might be pre-
pared to up his $130 a share bid a
touch in return for an agreed deal.
Moving to $140 a share would not
break the bank. The bid at current lev-
els, for example, is worth just two and
a half years of BHP’s cash-flow.
I’m fairly convinced that if there is
an auction, Kloppers will walk away if
he thinks he has to. And he will be
picture of what we are trying to do.”
He was joined by financial secre-
tary Mark Hoban, who said the report
made “some fairly challenging
assumptions about the impact of
some of the welfare reforms.”
The IFS’s conclusions were support-
ed by the National Institute of
Economic and Social Research, anoth-
er respected thinktank. Simon Kirby,
an economist, said the work appeared
“very robust”, and added that the situ-
ation may be even worse than the IFS
suggested because its model did not
account for spending cuts.
Nick Clegg criticised
the “partial” IFS report,
which he said does not
consider plans to get
people off benefits
CONFUSED.COM FAILS TO COMPARE TO
A TENOR
Confused.com lost the battle of the
price comparison websites in the first
half, ceding the market-leading posi-
tion in online car insurance to its
upstart rival GoCompare.com.
Confused.com, owned by the Admiral
Group, has been locked in a high-pro-
file TV marketing war with
GoCompare.com.
IT COMPANY THAT AXED 700 JOBS
HAS 700 NEW VACANCIES
Hewlett Packard, a global computer
company that axed 700 jobs last year
at its factory at Erskine,
Renfrewshire, has announced that it
is to create 700 new jobs there. The
remarkable turnaround by Hewlett
Packard exemplifies global trends in
manufacturing, for while the lost
jobs were in making computer equip-
ment.
well regarded for doing that.
DOUBLE DIP
There’s been so much conjecture
about whether we’re headed for a
double dip recession and yet nobody
really is any clearer about it now than
they were a few weeks ago.
Each set of economic data is pored
over voraciously by analysts and the
media alike in an effort to make sense
of where the world economy is going.
And yet....
Today on page 12, Dan Corry, for-
mer economics adviser to Gordon
Brown, sets out his thoughts on the
circumstances that face the coalition
government and concludes that
many of the events – most of them
outside the UK, such as the outcome
of the Eurozone crisis – which will
determine success or otherwise for
the chancellor George Osborne lie
outside his control. Somehow that
doesn’t sound too comforting.
david.hellier@cityam.com
Allister Heath is away
Asil Nadir faces 66 charges of false accounting and theft
Nadir is back after 17 years
LEGAL
▲
BY EMMA SADOWSKI
ASIL NADIR, the multimillionaire
businessman, who fled the UK after
facing a series of significant fraud
charges, is to return after almost two
decades to face the courtroom.
Nadir will arrive at Luton from his
native North Cyprus today to face
multimillion-pound fraud charges
linked to the collapse of his Polly Peck
business, according to The Times.
Nadir fled to North Cyprus, which
APPLE TAKES A BITE AT HULU WITH TV
SHOW RENTAL
Apple is poised to unveil a major
revamp of its Apple TV offering, a
make-over which includes giving US
users the option to rent – rather than
buy – programmes for as little as 99
cents. The consumer technology giant
is reported to be talking to a number
of US television networks about its
proposals, which could be announced
as early as next month.
ROEWE CASHES IN ON MG ROVER'S
BRITISH HERITAGE
Five years ago, the last car stuttered
off the production line at Longbridge
as MG Rover, Britain’s last major car
manufacturer, collapsed ignomin-
iously. Today, however, sales of Rover’s
twin brother, the Roewe, are soaring
in China. And the white gates of
Longbridge are open again, producing
a new MG6.
CITYA.M. 26 AUGUST 2010
NEWS | IN BRIEF
Unions set Tube strike dates
Transport unions RMT and the
Transport Salaried Staffs’ Association
(TSSA) yesterday confirmed dates for a
series of 24-hour strikes to be launched
by 10,000 London Underground staff in
what will bring severe disruption to
London’s commuters. The unions said
the first staff walk out will start at 5pm
on 6 September, with similar action
planned for 3 October, 2 November and
28 November. The dispute between the
unions and London Underground is over
plans to axe up to 800 jobs. London
Underground urged union leaders Bob
Crow and Gerry Doherty to call off the
strike, which is expected to cost the city
up to £48m a day. RMT said yesterday
that London Underground has failed to
answer requests to meet with Acas, the
conciliation service provider.
Plus gets derivatives facelift
Plus Markets, the small-cap listing and
price-reporting platform, is to relaunch
as a full blown derivatives and stock
exchange. The move, which is part of a
strategy set out in March, will put Plus
against the London Stock Exchange, Chi-
X Europe and similar trading venues.
Picture: PHOTOSHOT
has no extradition treaty with
Britain, in 1993 rather than stand
trial and is now expected to go court.
The businessman will appear before
the Old Bailey on 3 September where
he will comply with £250,000 bail
conditions.
In 1993 Nadir was due to stand trial
on 66 charges of false accounting and
theft involving £34m but fled the
country in the middle of the night
first to France and later to North
Cyprus where he has lived for the
past 17 years.
COST SAVINGS, SALES HELP L'ORÉAL'S
FIRST-HALF PROFIT
L'Oréal, the world’s largest cosmetics
company by revenue, said Wednesday
its first-half profit jumped 21 per
cent, as a sharp sales increase and
drastic cost cuts drove a rebound. The
French company, owner of such
brands as Maybelline, L'Oréal Paris
and Lancôme, said net profit reached
€1.31bn in the first six months of the
year, up from €1.08bn a year earlier.
RUSSIA'S AUTO MARKET PICKS UP
SPEED
Russia’s car market is rebounding
more quickly than expected, buoyed
by a return of cheap credit and a suc-
cessful government scrappage
scheme, top auto makers said on
Wednesday. Car sales in the country
are up 9 per cent for the first seven
months of the year compared to the
same period in 2009.
CITYA.M. 26 AUGUST 2010
Breeden hurt
as Xchanging
PR push fails
▲
SUPPORT SERVICES
BY OLIVER SHAH
HEDGE fund boss Richard Breeden
was burned by a second support serv-
ices company yesterday as a badly-
timed PR move by Xchanging wiped
11 per cent from its market value.
Breeden European Partners saw
£158m shaved from its stake in the
outsourcing provider as nervy
investors fled the stock. Just a fort-
night ago, Breeden crystallised a
£30m loss by selling out of troubled
support services firm Connaught,
which is battling for survival in the
face of government spending cuts.
Shares in Xchanging fell 10.8 per
cent to 110p after the market was
spooked by an unexpected conference
call in which chief executive David
Andrews tried to dispel “baseless
rumours” circulating about the com-
pany. Andrews insisted Xchanging’s
accounting practices had been
approved by its auditor, while finance
director Richard Houghton said its
profit and loss account had not been
flattered by deferred income.
Although the announcements
were designed to reassure investors
following the high-profile problems
suffered by Connaught and Rok,
many analysts missed the call as it
coincided with results from Serco.
Caroline de La Soujeole at Seymour
Pierce said the board was right to
fight back against gossip. “They just
picked the wrong day to do it.”
Mike Allen at Panmure Gordon
said: “If a company in this market has
to defend its accounting policy, it’s a
bit of a recipe for disaster.”
ANALYSIS l Xchanging
130 p
110.00
125 25 Aug
120
115
110
105
8am 10am 12pm 2pm 4pm
FSA policy director Paul Sharma (inset) is arguing for tougher rules
FSA says banking trading
warrants tougher action
▲
REGULATION
BY HARRY BANKS
ENDING the regulatory dividing line
between a bank’s trading and core
books would price risk better and
help avoid public bailouts sparked by
the financial crisis, the markets
watchdog said yesterday.
The Financial Services Authority
unveiled a 126-page discussion paper
looking at approaches to tightening
Picture: REX
up the rules, that would prevent
banks from exploiting differences in
the amount of capital they must hold
against losses in their trading and
banking books.
Paul Sharma, FSA director of pruden-
tial policy, said: “The financial crisis has
highlighted that, for trading activities
in particular, an over-reliance on the
principles of efficient financial markets
can lead to severe consequences when
risks are misunderstood.”
News 3
ABI struggles to
save UK insurers
from US rules
▲
INSURANCE
BY OLIVER SHAH
UK life insurers could be hit with tens
of millions of pounds of costs if they
are forced to comply with tough regu-
lations on tax evasion being drafted
by US authorities.
Companies such as Aviva, Old
Mutual and Prudential would be
forced to report the tax details of
their US account holders every year
under proposals being drafted in
Washington. The life insurance indus-
try is anxious about the potential cost
of overhauling information systems if
it is caught up in the wave of red tape.
The Association of British Insurers
(ABI) yesterday went into battle to try
to win the exemption of UK life firms
from the rules. Peter Vipond, director
of taxation at the ABI, said: “UK insur-
ers represent no significant risk to US
tax revenues and we are keen to avoid
unnecessary and onerous costs on the
industry that will ultimately be borne
by all policyholders.”
The trade body has written to the
US Treasury and Internal Revenue
Service. It will attend a series of meet-
ings with policymakers over the com-
ing weeks to point out that savings
sold by UK life insurers are taxed by
HM Revenue & Customs, and US resi-
dents make up just 0.1 per cent of UK
life policyholders.
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Tullow boss Aidan Heavey faces hold up Picture: Micha Theiner/ CITY A.M
0845 601 0174 www.bbk.ac.uk/cityam

Tullow slides
on Ugandan
project delay
ENERGY announcement raised concerns.
▲

BY MARION DAKERS “When you get beyond the headline

figures you find significant problems
OIL explorer Tullow faced tough ques- in Uganda,” said Doug Youngson, oil
tions over its plans in Uganda yester- analyst at Arbuthnot. “It’s misleading
day, as shares dipped despite a 152 per for the company to say this will be
cent increase in pre-tax profit in the resolved in weeks, since it’s been
last six months. going on for months. And the longer
Its $10bn (£6.6bn) project on oil this goes on, the colder the deal gets
fields once owned by Heritage stalled for its partners Total and CNOOC.”
in January, after the Ugandan govern- Pre-tax profit more than doubled to
ment disputed Heritage’s capital gains $131m (£84.8m) in the six months to
tax payments on the sale. 30 June.
Exploration director Angus McCoss
told City A.M. yesterday: “It’s a very ANALYSIS l Tullow Oil
short-term situation and we want to p
1,238.00
make sure that we set the industry off 25 Aug
on the right foot in Uganda.” 1,300
McCoss added: “I think these things
are characteristics of a new entrant to 1,200
the oil industry. We encounter similar
problems in other places; it’s the real- 1,100
ity of being a frontier explorer.”
Tullow, which is led by Aidan 1,000
Heavey, saw its stock closed down 4.6
per cent at £12.38 after the results 16 Jun 6 Jul 26 Jul 13 Aug

ANALYST VIEWS: WHAT DO TODAY’S RESULTS

MEAN FOR TULLOW? Interviews by Marion Dakers

JONATHAN JACKSON | KILLIK

“ The interim results from Tullow were in line with

expectations. However, the commentary on Uganda is less

”
positive. While today’s news is frustrating, we believe the
potential upside from the region remains intact.

IVOR PETHER | ROYAL LONDON ASSET MANAGEMENT

“ There isn’t an awful lot to say about the results, but

there is a lot of disappointment with the delays in Uganda.

”
It’s an expensive place to drill anyway, given the distance
from the pipeline to a export point, without this.

JOB LANGBROEK | DAVY

“ While not directly Tullow's problem, the group cannot

complete its intention to farm down to CNOOC and Total until

”
the dispute is resolved. This is unfortunate as it will overshad-
ow what is otherwise a strong performance.
 6 News CITYA.M. 26 AUGUST 2010

Why are the Irish banks still in such a mess?

which threatens to squash the eco-
nomic recovery under an estimated
€24bn of bad loans. It has already
caused credit rating agency S&P to
downgrade Ireland’s sovereign rating
from AA to AA-.
But how does a country with a pop-
ulation of 4m get itself into this posi-
ANALYSIS tion in the first place? Whereas the
rest of the world suffered a financial
KATHLEEN BROOKS crisis because of very complicated debt
structures like CDO’s, Ireland’s bank-
growth had been on a secure export-
led basis, underpinned by wage
restraint. However, from about 2000
the character of the growth changed: a
property price and construction bub-
ble took hold,” wrote Patrick Honohan
of Trinity College Dublin – now gover-
nor of the Irish Central Bank – in a
report published in 2009.
Anecdotal evidence of the scale of
the boom is staggering. In one prosper-
ous Dublin suburb an acre of land sold
owners defaulting on their mortgages,
but as a result of a small number of
property developers. These guys bor-
rowed billions during the boom years
and are now facing bankruptcy.
Taxpayers have been consigned to
spending huge sums to prop up the
banks, including Anglo Irish, which
ran aground after making bad loans.
Former chief executive Sean
Fitzpatrick took $114m in personal
loans over eight years at the bank, but
problems. It would have happened
anyway, the straight-talking central
banker says, and the collapse of
Lehman Brothers in autumn 2008
only exacerbated the Irish banks’ fund-
ing problems.
The end of Honohon’s report sums
up this chapter in Ireland’s history:
“The Celtic Tiger period represented a
solid convergence of Ireland to the
frontier. But it ended in 2000, to be suc-
ceeded by an old-fashioned property

I
RISH banks seem unable to shake
off the financial crisis, in fact they
seem to be in worse shape now
then at the start of the year. The
main casualty is Anglo Irish Bank,
ing crisis is essentially home grown. It
boils down to the bursting of one of
the largest property bubbles in history.
The genesis of Ireland’s problems go
back 10 years. “Until about 2000,
for over €80m in 2005.
This is also a tale of hubris. Philip
Lane, head of economics at Trinity
College Dublin, notes that the banks
are in trouble not because of home-
recently declared bankruptcy. The gov-
ernment has been investigating.
What is most startling in Honohan’s
report is his refusal to blame the inter-
national financial crisis for Ireland’s
bubble.”
At least its central bank governor is
under no delusion of what caused the
crisis. It took a decade to grow, it may
take a decade to unwind.

Dublin in row
with S&P due
to downgrade
Agency (NAMA) — which is buying up
▲

EUROPEAN ECONOMY
BY KATIE HOPE
A ROW broke out between S&P and
Ireland yesterday after the country
accused the credit rating agency of
“flawed” analysis of its debt position.
The war of words broke out after
S&P cut its rating for Ireland by a
notch to AA- after the markets closed
on Tuesday night and placed the
Or this? country on a “negative outlook”, indi-
cating that another rating cut could
be on the cards.
The agency expects debt to peak at
137 per cent of GDP, compared with
the 97 per cent estimated by the Irish
government. S&P also estimates that
the cost of bailing out the nation’s
banks will surge to €50bn – more
than double the government’s own
predictions.
John Corrigan, chief executive of
Ireland’s National Treasury
Management Agency, insisted that
the analysis failed to take into
account the value of its investment in
AIB or Bank of Ireland. There was fur-
ther disagreement over the ratings
agency’s inclusion of the liabilities of
the National Asset Management
ANALYSIS l IRELAND 10 Year Gilt Yield
6
5.511
5.8
5.6
5.4
5.2
5
4.8
4.6
4.4
Sep Nov 10
Ireland’s bad property loans — in the
debt figure. “They have invented a
new standard that doesn’t conform
with Eurostat or IMF measures. It
results in a very exaggerated figure.
Where you see faulty analysis you
have to challenge it,” Corrigan said.
But S&P fought back, saying in its
original document: “We understand
that NAMA has been organised in
such a way as to keep it off the Irish
government’s balance sheet under
Eurostat’s accounting rules. We take
a different approach and have treated
similar off-balance-sheet arrange-
ments to support national financial
systems in other countries as direct
obligations of the government.”
The downgrade pushed up the cost
of borrowing for the Dublin govern-
ment as yields on ten-year bonds rose
from 5.5 per cent to 5.7 per cent. That
took the premium that investors
demanded to hold the bonds rather
than German bunds to the highest
level since the Greek financial crisis.
Yields on ten-year gilts also
dropped to a record low of 2.79 per
cent as investors fled to the safety of
British government bonds.
Mar May Jul

ANALYSIS l GERMAN 10 Year Gilt Yield

3.4

3.2 2.118
3

2.8

2.6

2.4

2.2

2
Sep Nov 10 Mar May Jul
CITYA.M. 26 AUGUST 2010
Deloitte upbeat despite
lower partner profits
▲
ACCOUNTANCY
BY EMMA SADOWSKI
DELOITTE, one of the Big Four
accountancy firms, has seen UK rev-
enues fall for the second year in a row
in the face of challenging markets and
a difficult economic environment.
The global firm posted £1.95bn in
UK revenue for the year ended 31
May, marking a £16m fall from last
year.
“Despite a second successive year of
very challenging markets for Deloitte
and our clients, we are emerging
from the recession with a very satis-
factory performance,” said Deloitte
senior partner and chief executive
officer John Connolly.
Connolly, said that revenue in
Deloitte’s UK corporate finance divi-
sion was up 10.6 per cent during the
year, while income in the firm’s UK
consulting business fell by four per
cent and the group’s tax division saw
revenue decrease by 2.3 per cent.
Also, Deloitte’s UK auditing busi-
ness posted a 2.9 per cent decline in
parks from £15
theme
m £15
alton towers fro
thorpe park from £19
legoland from £19
Prices correct at the time of going to print, subject to availability and conditions, based on selected dates and prices.
Please see www.lastminute.com for full terms and conditions.
News 7
revenue, despite winning FTSE 100 payable to retired partners, marking
companies Kingfisher and Essar a drop from 2009 when partners
Energy as new audit clients. earned £883,000.
Connolly said that although the
economic environment remained FAST FACTS | DELOITTE UK INCOME
fragile, he anticipated a return to rev-
enue growth for the firm’s audit, tax ● Overall 2010 revenue fell £16m to £1.95bn.
and consulting business by 2011. ● Corporate finance revenue up 10.6 per cent.
Meanwhile, Deloitte added 750 ● Consultancy revenue down four per cent.
people to its roster during the year ● Audit income fell 2.9 per cent.
after bolstering its business through a ● Tax revenue down by 2.3 per cent.
series of acquisitions, most notably its Deloitte senior partner John Connolly is confident on the year ahead Picture: REX
January merger with property con-
sultants, Drivers Jonas.
Deloitte also added advisory firm
ReportSource and Swiss group
Exsigno to its consultancy division
and expanded its risk and security
business through the acquisition of
IM Global and Simulstrat.
Connolly added: “We will continue
to look for opportunities to bring in
highly skilled people who enable us
to offer increased range and depth of
advice to a broader number of
clients.”
Partners earned £873,000 in profits
last year after pensions and annuities
 8 News CITYA.M. 26 AUGUST 2010

Chief executive
Marius Kloppers
said he had full
confidence in BHP
Billiton’s bid for
Potash at the com-
pany’s annual
results announce-
ment at the Merrill
Lynch Financial
Centre yesterday

Picture:
Micha Theiner
/CITY A.M.

BHP Billiton stands

firm on Potash bid
MINING with its all-cash hostile offer, and Earnings per share more than
▲

BY MARION DAKERS
INDUSTRIAL giant BHP Billiton
posted bumper profits in nearly all
areas of its business yesterday, as
chief executive Marius Kloppers
remained confident over the
firm’s $40bn (£25.9m) offer for
Canadian fertiliser group Potash.
“I have heard all the specula-
tion, but I have only seen one bid
on the table. Given the all-cash
nature of what have offered, it
doesn’t seem like there is an enor-
mous universe of potential inter-
lopers here,” Kloppers said
yesterday.
He said the world’s biggest
miner will remain disciplined
will not increase the bid if it risks doubled to 228.6 cents.
the firm’s A+ credit rating. Six of the firm’s nine areas of
Kloppers and four teams from BHP operation posted growth, with
will this week begin a charm offen- some of the biggest jumps due to
sive on all its shareholders to con- rising commodities prices.
vince them of the takeover’s value. Shares fell two per cent yester-
Kloppers said around 50 per day to close at £17.67.
cent of BHP shareholders in the
USA also hold stakes in Potash. ANALYSIS l BHP Billiton
p 1,767.00
“More information is always a 25 Aug
good thing,” he added. 2,000
The company identified potash
fertiliser as a candidate for expan- 1,900
sion as early as 2005, said Kloppers,
along with investing in platinum. 1,800
BHP Billiton posted a 65 per cent
rise in operational profit to $20bn 1,700
yesterday, on the back of a 5.2 per
cent rise in revenue to $52.8bn. 16 Jun 6 Jul 26 Jul 13 Aug

The Halifax Reward ANNUAL RESULTS TO JUNE 2010

Current Account. TOTAL REVENUE: $52.80bn (+5 per cent on 2009)

(Petroleum: $8.78bn (+22 per cent), Aluminium: $4.35bn (+5 per cent), Base metals: $10.41bn (+47 per cent), Iron ore:
$11.14bn (+11 per cent), Metallurgical coal: $6.06bn (minus 25 per cent)
Make the jump to simple, EARNINGS PER SHARE: 228.6 cents (+116.5 per cent)
great value banking. COST OF ONGOING PROJECTS: $10.1bn
At Halifax we like to look after our customers. OPERATING CASH FLOW: $17.9bn
That’s why our Reward Current Account gives you
£5 each month. And moving to us is easy, our

Hammonds in merger talks

Switching Team take care of everything for you.
To get your fiver just pay in £1,000 each month.
To find out more, pop into branch, call us

with American legal rival

on 0845 122 1425 or visit halifax.co.uk

LEGAL ing due diligence with expecta- Hammonds needs 75 per cent of its
▲

BY EMMA SADOWSKI
UK law firm Hammonds con-
firmed yesterday that it is in merg-
er talks with American rival Squire
Saunders & Dempsey, marking an
increasing trend of trans-Atlantic
consolidation within the legal sec-
tor.
Discussions between the two
Pay in £1,000 each calendar month to receive £5 (net)/£6.25 (gross) monthly. Reward paid net of income tax (at legal outfits are at an early stage,
the rate specified by law, currently 20%). Higher rate tax payers may need to pay additional tax on the reward but should they merge, the consol-
Call us, go online or visit one of our branches for more information on all fees and interest rates. Available only to idated firm is expected to generate
personal customers, aged 18 or over and who are resident in the UK. Halifax is a division of Bank of Scotland plc
Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. annual revenue of $625m (£405m).
Currently the firms are undergo-
tions that a decision to merge will
be brought to a partnership vote
before the end of the year.
Hammonds managing partner
Peter Crossley said a merger with
Squire Saunders would help the
firm to meet its long-term growth
strategy.
He said: “Operating as one firm
around the world is a foundation
of the Hammonds culture which is
shared by Squire Saunders.”
Senior management at both law
firms notified partners yesterday
of thier intentions to join forces.
partners to vote in favour of the
merger to go through, while Squire
Saunders needs support from two-
thirds of its partnership.
Should the merger go through,
it will mark the third significant
trans-Atlantic tie-up in the legal
sector this year.
In May, City based law firm
Lovells officially merged with
Washington’s Hogan & Hartson,
while Denton Wilde Sapte
announced in the same month its
plans to merge with Sonnenschein
Nath & Rosenthal.
CITYA.M. 26 AUGUST 2010 News 9

Crystal: Grade still

the wrong leader
MEDIA Michael Grade declined to com- increased its stake in the studio
▲

BY STEVE DINNEEN
ROGUE shareholder Crystal Amber
has continued its campaign against
Pinewood chairman Michael Grade
despite the film-studio upgrading
its expectations for the year.
Crystal Amber has waged a cam-
paign against Grade, whose stew-
ardship of the firm and track
record has been called into ques-
tion.
Yesterday a spokesman told City
A.M.: “We are pleased to see there
are encouraging signs for the sec-
ond half but our underlying con-
cerns remain. Our views as the
largest shareholder remain valid.”
ment when contacted by City A.M. behind the Bond films from 16 to
yesterday but chief executive Ivan 27 per cent, making it the firm’s
Dunleavy defended the board’s per- largest shareholder. January to
formance. June pre-tax profit for the group
He said: “We’re pleased with a was £1.5m, down from £1.7m last
resilient performance. We’re sure year.
all of our shareholders are pleased ANALYSIS l Crystal Amber Fund
that our revenue is expected to rise. 108 p
“We’re enthusiastic about the 104.00
25 Aug
business. With Michael Grade as 107
chairman we are running the busi-
ness for shareholders. It is not 106
appropriate to comment on indi-
105
vidual personalities.
“We meet all of our shareholders 104
individually on a regular basis and
take their views into account.” 103
Crystal Amber recently 7 Jun 25 Jun 15 Jul 4 Aug

CITY VIEWS: IS FACEBOOK WORTH ITS $33BN

VALUATION? Interviews by Tom Day
Cleaning firm
ISS considers
PAUL STAPELY | CONNING ASSET MANAGEMENT
“As a non-user, I struggle to imagine where a pri-
£4.4bn IPO
vate company can possibly make anywhere near SUPPORT SERVICES
▲

that much money with an asset like BY HARRY BANKS

Facebook.” ISS, the Denmark-based cleaning
services firm, is looking into a stock
market flotation as its owners join a
line of private equity firms testing
MARCANTOINE DE ROYS | GROUP M markets with an eye to selling long-
term investments.
Confirming what sources familiar
“It is difficult to measure the impact Facebook with the matter said last month, ISS
said yesterday it was considering an
has had on 500m-plus lives as a monetary value, initial public offering which analysts
especially since we do not know the profitabil- say could value the group at nearly
ity. But it is hard to see how the current rev- 40 billion crowns (£4.4bn).
The company has appointed The Halifax Reward
enue models could justify such a valuation.” Goldman Sachs and Morgan Stanley
to assist in its strategic review and
Rothschild to act as adviser to ISS
Current Account.
DEREK TYLER | WASPFORD & SALTING and its shareholders.
Jyske Bank corporate bond analyst
Alex Hauge Andersen said ISS should Make the jump to simple,
“Facebook is obviously an unbelievably popular be valued at nine times expected
website. With the right marketing strategy, it
earnings before interest, tax, depreci-
ation and amortisation, based on its
great value banking.
could plausibly generate that kind of valu- size and earnings potential, within
the range of its peers that trade
ation. Nonetheless, as it stands I cannot between seven and 11 times earn- With our simple, straightforward overdraft fees it’s easy
see how it can be worth that much.” ings. to work out how much using your overdraft will cost;
s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬YOUR¬ARRANGED¬OVERDRAFT¬ON¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬

Indian oil firms step back

AMOUNTS¬UP¬TO¬AND¬INCLUDING¬a¬¬
¬ ¬ ¬ ¬ ¬ ¬¬
s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬YOUR¬ARRANGED¬OVERDRAFT¬ON¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
from move to buy into Cairn
OIL
▲
BY HARRY BANKS
STATE-RUN Oil and Natural Gas
Corp, GAIL India and Oil India will
not make a counterbid against
Vedanta Resources’ $9.6bn (£6.2bn)
stake purchase in Cairn India, a
senior official in India’s oil min-
istry said yesterday.
The decision makes it likely that
Cairn Energy’s planned sale of up
to a 51 per cent stake in its Indian
division will proceed, analysts said,
and boosted the Edinburgh-based
company’s shares.
“There is no chance for a coun-
terbid by Indian firms as the valua-
tion done by Vedanta for Cairn
India is already very high,” the oil
ministry official said.
He declined to be named as he
was not authorised to speak pub-
licly.
Previously, an oil ministry
source had said all options were
open for Indian state-run firms on
Cairn India and domestic media
reported the firms had held infor-
mal talks on a joint bid.
ONGC, Oil India and GAIL
declined to comment yesterday.
AMOUNTS¬OF¬OVER¬a
¬ ¬ ¬
s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬AN¬UNARRANGED¬OVERDRAFT
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
s¬!S¬WE¬CHARGE¬FEES¬ON¬THIS¬ACCOUNT¬INSTEAD¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
of interest, the typical rate is 0% EAR.
!ND¬THATS¬IT¬.O¬INTEREST¬TO¬PAY¬.O¬SET¬UP¬FEE¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
!ND¬NO¬COST¬WHEN¬YOU¬DONT¬USE¬IT¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
Last week, India-focused miner
)F¬ONLY¬ALL¬OVERDRAFTS¬WERE¬SO¬SIMPLE¬
¬ ¬ ¬ ¬ ¬ ¬ ¬
Vedanta said it agreed to spend up
to $9.6bn to buy a majority stake in To find out more, pop
Cairn India from parent company
Cairn Energy. into branch, call us
“I think it is very likely to go on 0845 122 1425
through,” said Will Armstein, oil or visit halifax.co.uk
analyst at brokerage Finncap,
adding that since it was a corpo-
rate transaction rather than the
sale of an individual field, the gov-
ernment had few mechanisms
available to block the deal even if it Call us, go online or visit one of our branches for more information on all fees and interest rates. EAR is the equivalent annual
sought to. rate. This is the actual annual interest rate for an overdraft. It does not take into account fees and charges. Overdrafts are
repayable on demand. Available only to personal customers, aged 18 or over and who are resident in the UK. Halifax is a
Shares in Cairn closed up 0.9 per division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ.
cent at 449p yesterday.
 The Capitalist
10
HEDGE FUND
MAN GOES
LONG ON
BANGERS
CELEBRITY endorsement works, at least
if the celebrity involved is a glamorous
sportsman like Usain Bolt, who yesterday
announced the biggest deal ever, to help
Puma flog its pumps and T-shirts. But
can you really imagine Crispin Odey, the
permanently pin-striped hedge fund
guru, as a brand ambassador?
Well, he is. The new branch of the
Union Market organic grocery store in
Fulham – a company that is run by
Odey’s pal Tony Bromovsky, and which
the fund manager has invested in – has
added an “Odey Sausage” to its range,
made from prime Middle White rare
breed pork.
This raises several questions. Firstly,
what sort of person buys a sausage
because it is named after a hedge fund
manager? And secondly, could this be
the start of a trend for Odey? Can we
expect to see Crispin Duck pancakes on
Mayfair menus soon?
But most importantly, will his wife,
Nichola Pease, who works at investment
manager JO Hambro, bring out her own
range of peas to go with her husband’s
bangers? Surely an opportunity too good
to be missed.
Would you buy sausages from this man?
BARKING BANKERS
I’VE never yet set foot in a Metro Bank
branch, but judging by a press release
they sent out yesterday they sound like a
cross between a particularly gaudy funfair
and an EasyJet check-in desk in Magaluf,
with some mild hallucinogens thrown in.
And dogs. Dogs everywhere.
A press release announcing the launch
of three new branches breathlessly boasts
that customers will be “greeted by three
days of free giveaways including free
breakfasts, smoothies, and popcorn… stilt
walkers, musicians, jugglers and shoe
shiners”. The branches will all have “the
Metro Bank Magic Money Machine™” and
offer “A friendly welcome to dogs and
CITYA.M. 26 AUGUST 2010
EDITED BY
JEREMY HAZLEHURST
GOT A STORY? EMAIL
jeremy.hazlehurst@cityam.com
Will Crispin
Odey’s wife
Nichola
Pease launch
a range of
frozen peas
to go with
her husband’s
Bangladesh to boot.
sausages? The reason – profitability is secondary
to ensuring a survivable future for human-
ity – according to the release. Putting the
environment before investor returns for an
oil company seems a tad unlikely. A quick
call to Cairn confirms that it is indeed a
hoax release from a mystery party that has
hacked into its systems. “It’s simply not
their owners, with water bowls and dog true,” a spokeswoman confirms.
biscuits on hand for man’s best friend –
dogs rule at Metro Bank!”
Hmm. Somehow I’m not sure I
want the people who run my bank
WHAT’S IN A NAME?
WHEN the birth of the Camerons’
acccount to be having quite so daughter was announced, speculation
much fun. about the name was rife. Borisina?
Nichola? Nobody copuld have expect-
ed Florence Rose Endellion. What can
POLAR BEARS we make of it? That third, Cornish
name sounds like an investment fund,
BEFORE PROFIT? but could it also be an attempt to woo
Just one day after Cairn Energy Cornish voters? After all, the south west
enthustically talked up its prospects is a hotbed of Lib Dem seats, and any-
in Greenland, a press release pops up thing the Tories can do to make headway
in The Capitalist’s inbox saying it’s has got to help. If he wants to keep that
pulling out of not just Greeland – part of the country yellow, the deputy PM
land of polar bears – but Nepal and will have to get procreating, and fast.
CITYA.M. 26 AUGUST 2010
Serco boss Christopher Hyman says public spending cuts will benefit his firm Picture: GETTY
Aggreko in
boost from
World Cup
▲
SUPPORT SERVICES
BY HARRY BANKS
AGGREKO, the world’s biggest
provider of temporary power, again
upgraded its outlook for the year
after posting a jump in first-half prof-
it, helped by contracts for major
sporting events.
Aggreko said events such as the
Vancouver Winter Olympics and the
soccer World Cup, for which it provid-
ed generators and chillers, brought its
local business unit £48m in revenues
in the first half.
“We believe that we will make fur-
ther good progress in the second half
and the outcome for the year as a
whole will be slightly better than our
previous expectations,” chairman
Philip Rogerson said.
The company, which is supplying
cooling and power equipment to peo-
ple cleaning up the Gulf of Mexico oil
spill on the Louisiana coast, said it
also planned to raise the interim and
final dividend by 50 per cent each to
reflect recent profit growth.
For the six months to the end of
June, underlying trading profit rose
23 per cent to £131.2m on revenue up
17 per cent at £585.6m.
Pre-tax profit rose 19 per cent to
£127.1m and the interim dividend is
being increased to 6.55p.
A poll of analysts taken before yes-
terday’s results showed a mean esti-
mate of £285m for 2010 pre-tax profit.
ANALYSIS l Aggreko
1,343.00
p p
25 Aug
1,700
1,600
1,500
1,400
1,300
1,200
16 Jun 6 Jul 26 Jul 13 Aug
Germany agrees to take up banking levy Airline workers snub deal
▲
BANKING
BY HARRY BANKS
GERMANY’S cabinet yesterday agreed
to adopt a levy on bank assets which
will raise around €1bn (£818m) a year
for bailouts, a government source
said, a move that small lenders
slammed.
Small banks complained the new
bank restructuring bill fails to rule
them out as potential contributors
pr
o m i se
e
W i
“1
www.cityindex.co.uk
0845 077 1178
1 point spreads available during our market hours only.
Spreads lowered on our rolling and daily future spread bet markets.
Spread betting can result in losses that exceed your initial deposit.
toward a common pot for rescuing
big banks, whose collapse would send
shock waves through the financial
system.
The levy aims to shift the cost of
bailouts to the private sector in a bid
to avoid future taxpayer-led salvage
efforts.
The bill, which is expected to come
into force next year after parliamen-
tary approval, would also give the
state powers to coordinate restructur-
News 11
Serco bullish on outlook
pre-tax profit for the first half to 30 used by the government were in talks
▲
SUPPORT SERVICES
June was £101.4m, against £83.4m with government officials about how
BY HARRY BANKS last year. to help achieve its cuts.
OUTSOURCING giant company Serco Support services companies with “[The coalition government] have
posted a 21 per cent increase in half- significant exposure to government called us in to say ‘where can we save
year pre-tax profit and said govern- contracts are bracing for Downing money?’ We see Serco as a big partner
ment spending cuts would boost sales Street’s October Spending Review, to government, we still see them as a
in areas where outsourcers would be which will outline the extent of the very strong customer, they still see us
hired to achieve savings. coalition’s drive to cut public spend- as a very strong supplier,” chief execu-
Serco, which runs Boris Johnson’s ing. tive Christopher Hyman said yester-
new cycle hire scheme, said yesterday Serco said it and other companies day.
SIG fears
government
t
n a s ”
,
oi pre
d
es:
cash cuts
p S nd
ic
▲
SUPPORT SERVICES
jor
BY HARRY BANKS
a SIG, the insulation and roofing
sem group, said UK government austerity
e measures were a drag on its outlook
th 0 despite an encouraging start to the
on 10 second half after a fall in first-half
SE St
pretax profit.
T 3 0 Sales across the group recovered in
F y May and June -- with sales per day in
all an
July up four per cent year-on-year --
after cold weather badly affected sales
W rm 40 at the start of the year.
Ge nce
“We think that certainly over the
last three to five months, things have
been gradually improving,” said chief
a
Fr
executive Chris Davies.
SIG reported a core pre-tax profit of
£18.5m for the six months to the end
of June, compared with £21.9m in the
same period last year.
However, the company offered a
note of warning due to a faltering eco-
nomic recovery and the British gov-
ernment’s programme to slash public
spending.
“SIG’s management remains cau-
tious on how its markets will develop
over the next few months ... based on
the continuing macroeconomic
uncertainty and concerns about the
potential impact of government aus-
terity measures and credit availabili-
ty,” chairman Les Tench said
yesterday.
Shares in SIG closed up 2.5 per cent
at 93p yesterday.
ANALYSIS l SIG
120 93.00
25 Aug
110
100
Jun 2010 Jul Aug
ing of banks struck by crisis. sional pay deal.
AVIATION
“We can’t understand the list of A third bargaining unit -- the tech-
those called upon to contribute,” a MEMBERS of American Airlines’ nical specialists -- approved their deal.
spokesman for the association of mechanics union rejected a contract “Our members have spoken loud
German savings banks said. proposal and authorised union lead- and clear,” said TWU International
He added: “It’s like asking the driv- ers to call a strike, the Transport vice president Garry Drummond,
er of a small car to help pay the insur- Workers Union (TWU) said yesterday. who heads the union’s Air Transport
ance for a large hazardous goods The union said on its website late Division. “After four years of negotia-
transporter.” on Tuesday that two American tions, a majority of TWU members ...
Large banks would benefit at the Airlines work groups represented by were not convinced that this agree-
expense of smaller and stable lenders, the TWU -- the mechanics and the ment represented an adequate
the spokesman said. stock clerks -- voted against a provi- return,” he added.
 12 News
The old guard offers Osborne advice
CITY COMMENT
DAN CORRY
E
CONOMIES are pretty resilient
things. Of course output can
decline extremely sharply as a
result of negative shocks – and
the British economy shrunk 6.4 per
cent in 2008-9 as a result of the
world financial crisis and subse-
quent recession. But at some point
they do usually bounce back to
decent growth rates, particularly if
you are lucky enough to get decent
employment rates. That is the good
news.
The trouble is that the length of
time it takes and the pace of that
recovery is very uncertain, and is not
under the control of anyone. And
that is news to make you nervous
not only if you are tending to a busi-
ness on the edge or searching for a
job, but if you are the chancellor
tasked with making sure the econo-
my comes right in time to win you
the next election.
Of course this last is never explicit-
ly stated, but that is what all George
Osborne’s colleagues are expecting
of him. Indeed he needs to pull it off
a lot faster if the Coalition is to hold.
Bewitched by the lure of power, the
Liberal Democrats have supported
very tough fiscal policies despite hav-
ing stood full square against them in
the general election. But that sup-
port won’t hold for ever if there are
no visible signs that the pain is
going to be worth it.
IT’S ABOUT THE WORLD NOT THE UK
So much can go wrong with econom-
ic recoveries. The world economy is
the most important factor for a
medium sized, open economy like
the UK. So if the US falters, if the
German obsession with fiscal consol-
idation rather than growth is too
strong, if the Greek crisis does spill-
over to Portugal and Spain, if China
stalls, then however low our
exchange rate, a booming export led
recovery to save the day will not
materialise.
And then there is that elusive driver
of domestic demand that Keynes
called animal spirits, and that busi-
ness and the city usually call “confi-
dence”. Osborne staked the house on
some old fashioned, pre Keynesian
economics in his first Budget.
He bet that getting down spend-
ing fast to reduce the deficit would
allow interest rates to stay low,
would get the thumbs up from inter-
national markets and would con-
vince business decision makers that
now was the time to invest, to
expand, to hire. In other words he
bet that this strategy would boost
not dent confidence.
For Osborne this course of action
was not a risk at all. Broadly speak-
ing most Conservative economic
thinking sees the deficit and debt as
the root of virtually all our econom-
ic problems. In the Tory version of
history the harsh Budget of 1981 was
not an event that prolonged and
deepened the degree of recession,
but the vital ingredient in the strong
growth later on in that decade. The
lesson is cut and cut fast whatever
the external circumstances.
The trouble is that while the pub-
lic have never bought into the con-
cepts of Keynesian economics (every
mythical housewife knows you pull
in your belt when in debt, you don’t
spend more), they know bad times
coming when they stare them in the
face and that is what they seem to
feel the first Osborne Budget offered
them.
CUTTING FOR RECOVERY?
It was a categorical rejection of
the idea that the state has
any role in supporting
demand through fiscal pol-
icy. Instead, to bring down
the deficit swiftly, thou-
sands of jobs are to go –
directly in the public
sector and indi-
rectly from
the firms
which sup-
ply them
and from the
consequent fall in spending power.
And VAT is to go up steeply.
And to add to that this
week Martin Weale, the
newest member of the
MPC, has said there is
still a real risk of a dou-
ble dip recession while
centre-right think
tank, Policy Exchange,
has claimed that infla-
tion may take off forcing
interest rates to rise to
eight per cent. No won-
der confidence indicators
are not looking healthy.
George Osborne and his
team will be sweating over
each and every economic
statistic, looking for
signs of life and
momentum.
T h e y
may pull
CITYA.M. 26 AUGUST 2010
through and he will be a hero.
Or he may just prove that
you cannot cut your way out
of a recession.
Both the economy and
the future politics of
Britain will be heavily
influenced by the gam-
ble he has taken and
by events he cannot
control.
That indeed is the
lot of a chancellor.
Dan Corry, ex-senior advis-
er on the economy to former
Prime Minister Gordon
Brown
CITYA.M. 26 AUGUST 2010 Economic News 13

Durable orders
fuel doubt over US new home
recovery’s legs
sales slump
▲

US ECONOMY
ONLY a surge in orders for commer- US ECONOMY things are improving whatsoever.

cial aircraft kept durable goods orders
in positive territory last month, cast-
ing yet further doubt over the
resilience of the US recovery.
Durable goods orders only man-
aged to grow by 0.3 per cent on the
previous month but the more closely-
watched core capital goods orders fig-
ure slumped eight per cent on June.
Consequently, the three-month
growth rate dropped to just 19.8 per
cent from 30.9 per cent.
Paul Ashworth, senior US econo-
mist at Capital Economics, said:
“July’s durable goods report adds to
the recent evidence from numerous
activity surveys that the manufactur-
ing recovery has lost nearly all of the
considerable momentum it had.”
He added: “The rebound in manu-
facturing was one of the bright spots
in an otherwise disappointing recov-
ery. Take it away, throw in a renewed
collapse in housing, and you don’t
have much left.”
The pace of new home sales dropped sharply in July.
▲
BY JESSICA MEAD
FEARS of a double-dip in the US hous-
ing market intensified yesterday
after data showed that new home
sales fell at the sharpest monthly
pace in July since records began.
Sales of new homes plummeted
12.4 per cent to an annual rate of
276,000 – the lowest since the data
was first recorded in 1963 and well
below the market’s expectations of a
rate of 330,000 homes. The
Commerce Department also revised
down June’s annual sales pace to
315,000 units.
New home sales have struggled to
pick up over the past few months
and the annual pace is only a quarter
of what was seen in the boom years
of the early 2000s.
New York-based Steven Ricchiuto at
Mizuho Securities said: “It is a bad
report through and through, there is
Picture: GETTY nothing in the details to tell you that
The odds of the dreaded double-dip
are increasing.”
The downbeat data initially
weighed on US equities but buying
activity capped losses.
Analysts expect the pace of new
home sales to remain depressed for
some months to come and predicted
possible years of excess supply.
ING’s Teunis Brosens said: “Sales
may recover slightly in the coming
months, as the demand fallout fol-
lowing the expiry of the homebuyer
tax credit fades. But we expect them
to remain low.”
“Homebuilders continue to face
tough competition from distressed
sales. These typically sell at a dis-
count and currently make up about
30 per cent of total sales. Moreover,
while the building spree peaked in
2006, the housing market is still bur-
dened with substantial excess supply.
It may take several years to clear this
excess,” he warned.

German businesses
remain confident
EUROPEAN ECONOMY German economic thinktank, said:
▲

BY JESSICA MEAD “Manufacturing firms have reported

GERMAN businesses have this month
shrugged off weak markets and con-
cerns about the health of the United
States and are now as confident as
they were in June 2007, according to
the Ifo institute’s business climate
index, which was published yesterday.
The headline index rose to 106.7
from 106.2 in July while firms’ assess-
ment of the current situation contin-
ued to rise to 108.2, from 106.8.
Although the expectations index
dipped slightly in August to 105.2
from 105.5, it remains far above its
historical average, indicating that the
manufacturing-led recovery in
Europe’s largest economy is showing
little sign of losing momentum.
Hans-Werner Sinn, president of the
a better business situation than in
July. With regard to the six-month
business outlook they are still very
confident.”
Societe Generale’s Klaus Baader
said: “There is no sign whatsoever of a
cyclical downturn in this survey
which has historically provided a very
reliable guide to growth.”
Carsten Brzeski, economist at ING
agreed:
“The Ifo index reflects untarnished
confidence and bodes very well for
near-term growth prospects. Second
quarter growth will remain excep-
tional. However, even with an
inevitable shift into a lower gear in
the second half of the year, the
Eurozone’s growth engine will con-
tinue to run smoothly.”

Swiss franc surges to a

record high against euro
the Swiss National Bank dropped its
▲

CURRENCIES
THE Swiss franc surged to an all-time
high against the euro yesterday as
fears over the potential for a double-
dip recession continued to drive
investors into perceived safe-haven
assets.
The franc traded at €1.300 yester-
day, within sight of the record level of
€1.2968 hit earlier in the session. And
yields on 10-year Swiss bonds fell to
1.02 per cent as weaker-than-expected
US new-home sales and durable
goods orders intensified the flight
out of equity markets.
The franc’s rise accelerated after
pledge to intervene in the currency
markets at its June meeting, saying
that deflation risks had largely disap-
peared and the economy was on track
for a healthy recovery.
The Dow Jones was off as much as
103 points at one stage, before rally-
ing to close up 19.6 points – or 0.2 per
cent – at 10,060, while the broader
S&P 500 index gained 0.3 per cent,
ending four straight days of losses.
The FTSE 100 index closed 0.9 per
cent down at 5,109.40, Germany’s
DAX fell 0.6 per cent and Tokyo’
Nikkei dropped 1.7 per cent to hit a
16-month low of 8845.39.
 14 Focus on Admiral CITYA.M. 26 AUGUST 2010

Admiral looks Strong trading

but the stock
at Linea deal has had its day
WITH a moniker reserved for the

as profits rise
highest-serving officers in the
Navy, you’d expect Admiral to be
sailing ahead of its competitors. At
first glance, yesterday’s numbers
don’t disappoint. It was UK motor-
ing, where insurance rates grew 14
per cent, which put in the
strongest performance. Customer
s

INSURANCE
BY OLIVER SHAH
ADMIRAL GROUP could bid for
Spanish insurer Linea Directa and is
eyeing an expansion into the house-
hold market after growing its interim
profit by more than a fifth to £127m.
Admiral, which specialises in car
insurance, said an offer for Linea
Directa was a possibility at the right
valuation. The Spanish business
could be worth around €850m
(£700m) based on the price at which
its parent, Bankinter, bought out
joint venture partner Royal Bank of
Scotland’s 50 per cent share last year.
Admiral finance director Kevin
Chidwick told City A.M.: “It’s a ‘maybe’
if it was at a very good price, but
we’ve got fantastic growth on the
organic side too.”
Separately, Chidwick said Admiral
would launch a household insurance
leverage its brand to enter the home
insurance space, Chidwick said.
His comments came as rising sales
and prices boosted Admiral’s pre-tax
profit 20.5 per cent to £126.9m. The
group, run by Henry Engelhardt,
increased its half-year dividend 18 per
cent to 32.6p and announced plans to
hand out 1,500 free shares to each
employee worth £6m in total.
One dark spot was Confused.com,
Admiral’s comparison website,
which saw profits drop 20 per cent
as it was outgunned by
Comparethemarket.com.
ANALYSIS l Admiral Group
550 p 1512.00
500
25 Aug
450
400
350
numbers were up 23 per cent
while the combined ratio – a key
indicator of performance for insur-
ers – held stable at 89 per cent
(numbers under 100 indicate prof-
itably). However, the main driver
was growth in profit commission
(the amount Admiral earns from
Admiral boss Henry Engelhardt is looking for growth Picture: Micha Theiner/ CITY A.M sharing in the profits of the firms
it underwrites for); this was up
ADMIRAL'S HALF-YEAR RESULTS: from £23m to £37m, but doesn’t
reflect Admiral’s performance,
just improving conditions for
everyone in the industry.
Pre-tax profit s 20.5% to £126.9m Elsewhere things were less rosy.
Confused.com profit fell from
£11m to £9m after rival Compare
Interim dividend s 18% to 32.6p per share the Market’s meerkat campaign
won the marketing battle. Already
trading on a hefty 20.3 times earn-
Turnover s 33% to £720.5m ings, these shares have had their
day. Investors should reduce.

300
Customers s 23% to 2.37m
pilot project toward the second half
of next year. The FTSE 100 company
has a large database of motoring
250
Shares in Admiral s 2.7% to £15.12
BOTTOMLINE
200 Analysis by David Crow
cover customers and would hope to 7 Jun 25 Jun 15 Jul 4 Jul
CITYA.M. 26 AUGUST 2010
Johnston Press back in black
MEDIA
▲
BY STEVE DINNEEN
EMBATTLED Scotsman owner
Johnston Press breathed a sign of
relief yesterday as it limped to its first
profit since 2006.
The Scotsman owner arrested its
declining revenue amid a remarkable
turnaround in the advertising market.
Total advertising income fell by 6.3
per cent after plummeting 18 per
cent during the darkest days of the
advertising drought in 2009.
But stringent cost cutting in the
Paddy Power
sees profits
soar by 54pc
GAMING
▲
BY STEVE DINNEEN
PADDY Power reported soaring profits
yesterday, despite admitting trading
in its Irish home-market is tough.
The firm saw pre-tax profits grow
54 per cent to €52.5m (£43m), buoyed
by strong performances in its interna-
tional divisions.
The bookmaker says it expects full-
year earnings to rise by up to 30 per
cent after an “exceptional” World Cup
helped it to smash profit expectations.
Chief executive Patrick Kennedy
told City A.M. the firm has performed
well across the board but admitted
Irish customers have been “spooked”
by the country’s precarious financial
situation.
He said: “We are continuing to
grow in Ireland and our market share
has risen by seven per cent to 32 per
cent since the recession. We are trad-
ing there harder than ever. But cus-
tomer confidence is not great. The
government finances have spooked
customers and trading is tough.
Roast New Season Grouse
Justerini & Brooks Red Burgundy
Game dish of
the year
wake of the financial crisis allowed
Johnston to post a first-half pre-tax
profit of £26.1m on revenue of
£207.3m.
Chief executive John Fry said:
“These industry leading trends along
with our continued focus on costs,
efficiencies and debt reduction, give
the board confidence, in the absence
of a further deterioration in the UK
economy, that the outcome for the
group in 2010 will be in line with cur-
rent market expectations.”
The results follow a remarkable
recovery for advertising giant WPP,
“Most of our expansion is coming
internationally now. Our customers in
Australia have shot up 84 per cent and
we are now launching in France.
“Three quarters of our online rev-
enue comes from the UK, which is
our biggest market.”
However, he added that changing
the firm’s domicile to London to
reflect its increasingly international
business model is “not on our imme-
diate agenda”.
The firm also acknowledged new
taxes and fees in the UK and Ireland
could affect earnings going forward.
ANALYSIS l Paddy Power
€ 26.50
29 25 Aug
28
27
26
25
24
16 Jun 6 Jul 26 Jul 13 Aug
Restaurant
Magazine 2008
Boisdale of Bishopsgate
Reservations on 020 7283 1763
Boisdale of Belgravia
Reservations on 020 7730 6922
News 15
Dell to challenge HP with
which saw first-half profits jump 36
an improved bid for 3PAR
per cent.
ANALYSIS l Johnston Press TECHNOLOGY HP has more cash and cash equiva-
▲
p lents than Dell but with $15bn and
21 16.00 BY STEVE DINNEEN
25 Aug $11bn, respectively, both could easily
20
DELL is planning to submit a more afford to buy 3Par.
19 competitive bid for data storage firm Dell is following HP’s expansion
18 3PAR, challenging Hewlett-Packard’s into services and is increasing its
17 offer of $24 per share, a source famil- foray into smartphones.
16 iar with the talks said yesterday. Analysts are expecting a fierce bid-
15 3PAR said on Tuesday it would start ding war between the two firms for
14 merger talks with HP after HP’s 3PAR.
13
$1.6bn offer topped Dell’s previous, Dell and HP both declined to com-
7 Jun 25 Jun 15 Jul 4 Aug $1.15bn bid. ment yesterday.
RTL: Five should
make a profit
later this year
MEDIA
▲
BY STEVE DINNEEN
FORMER Five owner RTL expects the
loss-making broadcaster to swing
back into profit this year, despite
clocking a first half loss of €49m
(£40m) on the channel.
The venture was sold to Express
Richard Desmond (above) hopes owner Richard Desmond last month
Five will post a second half prof- for £103.5m. Its operating loss was
it, while Dawn Airey (below) just €6m but RTL wrote down a fur-
will take up a post with the ther €36m before offloading it.
channel’s former owner RTL. Desmond plans to streamline the
operation, with 80 of its 300 staff
expected to be out of a job.
Among the most high profile leavers
is Five chair and chief executive Dawn
Airey, who actioned a clause in her con-
tract guaranteeing her a job with RTL if
Five was sold. RTL would not comment
yesterday on what role Dawn would
take with the firm.
The news comes as RTL posted rev-
enue growth of 7.5 per cent in its first
half, with advertising income finally
beginning to pick up.
This allowed the media giant to
swing to a profit of €257m, a remark-
able turnaround after posting losses
of €105m the year before.
Chief executive Gerhard Zeiler said:
“The stronger than expected rebound
seen in the Western European TV
advertising markets is the result of
the overall economic recovery.”
with a glass of
£27.50
The Lamb at Hindon
Reservations on 01747 820 573
Subject to availability from
17th August until 30th September
 16 News
Geely warns of tough outlook Fortis successor Ageas
bigger and better quality cars in
▲
AUTOMOTIVE
China, posted a 804.85m yuan
BY HARRY BANKS (£76.61m) net profit for the first six
CHINA’S Geely, whose parent bought months of this year against 595.91m
Ford’s Volvo unit this month, warned yuan a year earlier.
of tougher competition and slower The record profit topped an average
sales after its record first-half earnings forecast of 756.4m yuan from ana-
beat forecasts yesterday. lysts.
China overtook the United States The company sold 195,734 cars in
last year to become the world’s biggest the first six months, up 42 per cent
car market, as Beijing rolled out from a year earlier. But its July sales
incentives to boost spending during growth turned negative, falling 12 per
the global downturn. cent to 21,684 year-on-year.
But that growth is expected to Competition is rising in China as
wane in the second half as the govern- some car makers cut prices to boost
ment presses the brakes to keep the sales, which have been slowing down
economy from overheating. from last year’s breakneck pace.
Geely, which has been trying to Founded by chairman Li Shufu,
move up the value chain by launching dubbed the Henry Ford of China,
Cost savings
help Heineken
boost profits
▲
LEISURE
emerging markets.
BY HARRY BANKS Just over half of Heineken’s rev-
HEINEKEN, the world’s third-largest enue last year came from western
brewer, reported a higher than Europe. Heineken said the integra-
expected rise in first-half net profit tion of FEMSA Cerveza was on track,
yesterday after cost savings helped with synergies due in the second half.
offset lower beer sales in Europe and For the full-year, Heineken forecast
the United States. the percentage growth of net profit
The Dutch-based brewer, whose to be at least in low double digits
chief brands are Heineken and with further cost savings and price
Amstel, Europe’s number one and hikes continuing to have some
three beers, said group beer volumes impact.
fell 2.3 per cent on a like-for-like Heineken’s net profit before one-
basis. offs increased to €621m (£508m).
But costs savings, lower raw mate- Analysts had on average expected a
rial and interest costs and its joint net profit of €595m.
ventures led to a 17 per cent rise in
net earnings. ANALYSIS l Heineken
The company said it remained cau-
37 € 35.20
tious about beer consumption in 20 Aug
36.50
Europe and the United States due to
continued weak consumer spending 36
and planned austerity measures, but 35.50
expected volumes to grow in Latin 35
America, Africa and Asia. 34.50
Heineken’s first-half results includ- 34
ed two months from the beer busi-
33.50
ness of Mexico’s Femsa, bought to
33
boost exposure to faster-growing 7 Jun 28 Jun 12 Jul 2 Aug
CITY MOVES | WHO’S SWITCHING JOBS
Borro
Paul Gratton, formerly chief executive of Egg,
has been elected to the board of the online
pawnbroker. Gratton, who founded the survey-
or Shepherd Direct, was part of the founding
team at First Direct. His experience in the mort-
gage broking market is intended to assist
Borro’s new venture, which will launch at some
point during the autumn. He joins Sportingbet
founder Mark Blandford, who was appointed to
the board in April.
Netplay ing Moshe Edree. Mickley still holds
Tim Mickley joins the board of the numerous directorships, including at
interactive TV gaming company as non- TSM Consultancy and Brickington
executive director, replacing the outgo- Trading and recently left a role in cor-
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Geely said it will launch new and
higher end car models this year and
focus on building its export business
to making it less vulnerable to China’s
volatile domestic market.
Despite the dimming outlook for
China’s car market, there is a poten-
tial bright spot for the carmaker -- its
parent’s new Volvo unit.
If the Geely’s parent, Zhejiang Geely,
can turn Volvo around, that could
allow Geely to benefit from technolo-
gy transfers and eventually take over
the premium brand, said Man.
Volvo has been profitable since the
start of the year, said Li Shufu, a big
change for the luxury brand, which
posted a $653m (£423m) pre-tax loss
last year.
BEST OF THE BROKERS
ANALYSIS l Amlin
440
p 408.20
25 Aug
430
420
410
400
390
380
370
16 Jun 6 Jul 26 Jul 13 Aug
AMLIN
The insurer’s underlying performance
remained solid despite results at the bot-
tom end of consensus estimates, according
to Jefferies. The broker added that Amlin
should see the benefits of pruning its port-
folio in 2011. Jeffries kept its EPS forecasts
for 2011 unchanged at 6.3 times after high
acquisition costs, but kept its “buy” rating.
Watchdog slaps £1.6m fine on SocGen
▲
REGULATION
THE Financial Services Authority
(FSA) regulator fined French bank
Societe Generale £1.575m yesterday
for failing to provide accurate transac-
tion reports.
The fine handed out to SocGen,
which in 2008 lost around €5bn
(£4.1bn) in a trading scandal, follows
previous penalties handed out to
Barclays, Credit Suisse and
porate finance as a managing director
with Collins Stewart, where he led the
gaming team and advised on significant
transactions in the sector.
Tullow Oil
Tutu Agyare has been appointed non-
executive director of the oil explorer
with immediate effect. He has held
numerous senior positions at UBS, most
recently as the head of European
Emerging Markets. He joins from
Nubuke Investments, a company he
founded in 2007, and will maintain his
role of managing partner. His new
capacity will see him assist in Tullow’s
expansion in Africa.
reports strong earnings
▲
INSURANCE
BELGIAN insurer Ageas reported a
surge of cash coming into its business
in the first half, particularly in Asia,
and strong earnings from its life
insurance business.
The company, formerly known as
Fortis, said yesterday that inflows
grew by 22 per cent during the first
six months of 2010 and by 59 per cent
in Asia.
Insurance net profit dropped to
€180.5m (£145m) from €260.4m a year
ago, when it booked a €94m one-off
tax benefit in Belgium. Almost all of
ANALYSIS l Persimmon
420
p
347.20
410
25 Aug
400
390
380
370
360
350
340
16 Jun 6 Jul 26 Jul 13 Aug
PERSIMMON
The housebuilder’s margins jumped in its
interim results this week, said Citi, though
its asset writeback remains conservative at
around 23p per share. The broker was
impressed by Persimmon’s improving bal-
ance sheet, with gearing of just seven per
cent. Citi said the firm’s land bank would
provide continued support. “Buy” at 650p.
To appear in Best of the Brokers email your research to notes@cityam.com
Commerzbank for similar failings.
The FSA said that between
November 2007 and February 2010,
SocGen had either failed to report, or
inaccurately reported, 18.8m of its
23.5m reportable transactions.
It added that the SocGen breaches
occurred despite the FSA sending out
repeated reminders to companies of
their obligations to provide accurate
data, and of the importance of com-
plying with FSA rules concerning the
Edited by Tom Day
Hermes
Zu Cowperthwaite has been appoint-
ed as a portfolio manager in the
company’s global equities team. She
joins from Loomis Sayles where she
managed a global consumer
long/short hedge fund containing
both domestic and international
equities. The move is designed to
boost the asset management firm’s
Boston-based global equities team.
Cowperthwaite has previously held
posts at Evergreen Investments and
David L. Babson & Co as a senior
analyst and has 17 years of experi-
ence in market research and man-
agement.
CITYA.M. 26 AUGUST 2010
the insurance net profit came from its
life business.
The overall net profit, a difficult fig-
ure to forecast because of legacy issues
related to its previous incarnation as
Fortis, was €455m, higher than the
€261m average forecast.
Ageas, which operates as AG
Insurance in Belgium and sells insur-
ance for the supermarket giant Tesco,
reiterated its forecast that the amount
of cash coming into the business in
2010 should be higher than in 2009. It
halved its exposure to southern
European sovereign bonds in the first
half of the year to €8.9bn.
ANALYSIS l WPP Group
p
720 634.00
25 Aug
700
680
660
640
620
16 Jun 6 Jul 26 Jul 13 Aug
WPP
Deutsche Bank said buying shares in the
advertiser is a balanced way of gaining
exposure to the recovery in media budgets,
after upgrading its full year EPS forecasts
by 4.5 per cent. The broker said the gap
between WPP and rival Omnicom is clos-
ing, thanks to organic revenue growth of
seven per cent in July. “Buy” at 860p.
reporting of transactions.
“SocGen failed to accurately report
a very high proportion of its transac-
tions for a significant length of time,”
Margaret Cole, FSA director of
enforcement and financial crime,
said.
“This failure is a serious breach of
our rules as it can have a damaging
impact on our ability to detect and
investigate suspected market abuse,”
she added.
in association with
Fortis Global Liquidity Funds
Marc Raynaud has joined the fund
manager as a director, with immedi-
ate effect. He remains chairman of
BNP Paribas Partners in Luxembourg.
He also became head of global fund
solutions at the bank in 2010, and has
held several managerial roles in the
company since he joined in 1979. His
work for BNP Paribas has taken him
to Italy, France and the USA. Raynaud
studied Italian and Russian at the
University of Paris Sorbonne, and
holds a Master of Sciences in
Management from the Ecole
Supérieure des Sciences Economiques
et Commerciales.
+44 (0)20 7557 7245
morganmckinley.com
CITYA.M. 26 AUGUST 2010 News 17

Derwent posts
Crucial time higher profit on
wasted after bargain hunters

rig explosion
PROPERTY

BP IN CRISIS
BY EMMA SADOWSKI
DEEPWATER Horizon-owner
Transocean changed a locking mecha-
nism on the blow out preventer,
resulting in a severe delay in respond-
ing after the Gulf Oil rig exploded,
according to a BP vice president.
Harry Thierens, executive vice pres-
ident for drilling and completions at
the oil major, told a panel of federal
investigators that crucial hours after
the 20 April explosion were wasted
after it became apparent that
Transocean had made the changes.
The Texas-based panel heard from
Thierens, who had a personal role in
trying to stop the leak, yesterday that
it took between 12 and 24 hours to
locate drawings of the changes.
His testimony is part of a joint inves-
tigation by the US Coast Guard and
the Interior Department into the caus-
es of the Deepwater Horizon explo-
sion, which killed 11 people and led to
one of the worst oil spills in history.
Thierens testified alongside Billy
Stringfellow a subsea superintendent
for Transocean and Halliburton’s
Vincent Tabler.
On Tuesday, Jesse Gagliano, a
Halliburton technical adviser told the
panel that BP had ignored his con-
cerns that a cement seal inside its
Macondo well might fail.
He also alleged that the oil major
had argued with him when he sug-
gested that more devices used to plug
the well were needed.
However, BP’s lawyers disputed his
allegations after producing email evi-
dence that Gagliano had said that he
was happy with the procedure.
BP hired Halliburton to perform
and design the cement jobs on the
Macondo well.
The oil giant is currently attempt-
ing to retrieve the damaged blow out
preventer from the floor of the Gulf.
Meanwhile, BP confirmed yester-
day that it has withdrawn its applica-
tion for an exploration licence in
Greenland, currently the centre of a
new oil rush.
▲
OFFICE landlord Derwent London
reported sustained growth in the
value of its portfolio to £2.2bn yester-
day, easing fears of a new real estate
slump as Britain’s economic
prospects wilt.
Chief executive John Burns said
Derwent’s signature strategy of pro-
viding affordable offices in the capi-
tal’s nascent business hubs would
hold up as firms budgeted for slower
expansion and higher rates of infla-
tion.
“We have a sort of formulaic busi-
ness model, operating off the middle
market for rents between £30-50 a
square foot and I’m just very positive
Halliburton’s Jesse Gagliano accused BP of ignoring his concerns over the well that the momentum has continued.
Even over this summer period, we
ANALYSIS l BP were making lettings,” Burns said.
“We have been able to deal with all
p
550 376.80 the crises without having a rights
25 Aug issue and we’ve still bought property,
500 we’ve got a lot of uncharged property
that’s not mortgaged and a lot of
450 unused facilities,” he added.
Derwent marked a long-awaited
400 return to investment with the £146m
purchase of the West End’s Central
350
Cross building in July.
The firm posted a 17 per cent rise in
300
first-half net asset value to 1,365p a
250 share, against 18 per cent six months
16 Jun 6 Jul 26 Jul 13 Aug earlier.

To register for this event, visit:

www.rbs.co.uk/markets

This adver tisement contains numerous trade marks belonging to The Royal Bank of Scotland Group plc and other companies in the RBS Group. These trade marks include, but are not limited to, The Royal Bank of Scotland logo, The Royal Bank of Scotland and RBS. If you are
in doubt as to whether an item is a trade mark of The Royal Bank of Scotland Group plc or a member of the RBS Group, please contact us for clarification at the registered office address The Royal Bank of Scotland plc, Registered in Scotland No 90312. Registered Office: 36
St Andrew Square, Edinburgh EH2 2YB. RBS is authorised and regulated in the UK by the Financial Ser vices Authority
y. RBS is an authorised
authorise agent of The Royal Bank of Scotland plc N.V in cer tain jurisdictions.
 Investment
18 CITYA.M. 26 AUGUST 2010

| Listed Products

Be prepared for
the turbulent
autumn ahead
Listed products can is now is struggling to stay above the psy-
chologically important 5,000 level.
offer a low-risk way Richard Perry, chief market strategist at
Central Markets, reckons that the FTSE
could see further falls towards the mid-
to trade the FTSE, 4000s once the market comes back to
work: “A lot of people are talking about the
writes Jessica Mead market having a poor September and
October; this seems to be supported by the
charts and the fundamentals that are com-

I
NVESTORS fed up with volatile, range-
bound markets that apparently have
little sense of clear direction will be
cheering the end of the summer and
the dust being swept off the City trading
floors. But those hoping for an immediate
return to normality and a bullish rebound
are likely to be sorely disappointed.
The FTSE 100 has been drifting down-
wards as US economic data disappoints
and Hindenburg Omens – a little-known
market timing gauge which points to an
imminent market crash – have been sight-
ed and are hitting the investment pages
and blogs on a disturbingly regular basis.
And things aren’t expected to get any
better any time soon. While October might
be more renowned for market crashes, his-
torical data reveals that September is the
worst month for market returns in the
United States – the average September loss
for the Dow between 1980 and 2010 was
1.25 per cent. In contrast, the much-
maligned October enjoys average gains of
about 1.2 per cent.
But with a choppy September to con-
tend with first, what will happen to the
FTSE 100 and how should traders be look-
ing to play the markets?
After reaching the giddy heights of
5,833 back in April, the UK blue-chip index
ing out.”
PRECARIOUS POSITION
He explains: “From a chart perspective the
overriding feeling is that there continues
to be a bearish look about the FTSE 100
Index. Although the original head and
shoulders top pattern may have been
recently aborted [which saw the index
drop briefly below 5,000 in July] the long-
term position continues to look rather pre-
carious for the market bulls.”
Equally worrying, the 200-day moving
average, which shows the long-term trend
of the market, has stopped rising for the
first time in a year and the sequence of
higher lows, which is a bullish signal has
been broken. Perry warns: “The index
would probably now need to make a deci- Don’t get swept away take positions that leave you exposed to have turned a profit and if it isn’t, then
sive move through 5,832 to defer what con- unlimited losses and use leverage, even if you only lose your initial investment.
tinues to look like an extended topping out Picture: GETTY you can set stop losses to ensure you don’t
phase.” end up owing thousands of pounds. SANTA RALLY
The buyers of the FTSE 100 just aren’t By picking a covered warrant, you can However, you might be expecting an
there at the moment. Simon Denham, bet on the FTSE 100 hitting at least a cer- immediate decline followed by an upturn
managing director of Capital Spreads says: tain level on a pre-specified date. For exam- in the fourth quarter – markets tend to
“Normally on a move down of 250 points ple, if you think that the index is going to perform well at this time year, in what is
we would be finding a large number of suffer over the next few months, then you known as a Santa rally.
buyers looking for a bounce but this time could buy put covered warrants with a To bet on a rally, you could buy a call cov-
they are almost matching themselves out.” strike price of 5,000 with an expiry date of ered warrant with a strike price of 5,400
For retail traders looking to navigate a 17 December. Providing the index is trad- with an expiry date of 17 December.
stormy September, it can be daunting to ing at or below 5,000 on this date, you will For those investors who are more risk

Getting a grip on listed products

Investing is getting IN FOCUS | EXCHANGE-TRADED NOTES (ETN)
more complex, says Barclays launched the first ETNs listed on
the London Stock Exchange earlier this
Kathleen Brooks year. An ETN is actually a promise of an
issuer (say Barclays) to pay the value of a
specified index minus any fees to the
slight slippages. An ETN is different – the
provider owes the holder of the note the
performance of the index, irrespective of
whether they hedge themselves or not.
The risk is that you have to rely on the fact
IN FOCUS | SYNTHETIC ZERO
These products have been knocking
around for a while and are popular in
Europe. Now the UK is catching on too.
RBS offers a Synthetic Zero on the
FTSE 100. It’s also a long-term invest-
level is constant throughout its lifetime,
so you win as long as the index is 50
per cent higher than your entry level – it
doesn’t scale higher each year. Societe
Generale also has a large selection of

T
OO much choice can be a problem
for investors these days. Online con-
sumer champion Which? singled out
structured products as being some of
the most confusing instruments on offer
and was particularly unhappy about their
lack of transparency, particularly when it
comes to counterparty risk. The UK
Structured Products Association hit back at
the research saying that listed products are
regulated by the FSA and praising the stan-
dard of educational material produced by
the providers. This argument doesn’t exact-
ly help investors who are trying to find
returns in an environment of low interest
rates. So to help our readers, we have
looked in depth at some of these products
to de-bunk some myths and figure out
what the lingo actually means. These prod-
ucts are complex, but not impossible for a
retail investor to understand.
owner. Uwe Becker of Barclays says that
the chief attraction of an ETN, as opposed
to an ETF, is that there is no tracking error.
An ETF is created by a provider to mimic
the actual index and sometimes there are
IN FOCUS | UK DEFENSIVE AUTOCALL
This product is available from RBS and
isn’t nearly as scary as it sounds. But it is
a long-term investment. The life of the
product is five years and each year has a
trigger point, which, if reached, adds a
6.75 per cent “coupon” to your final pay-
out. For example, in the first year if the
FTSE 100 is equal to or above 80 per
cent of the starting level, then it auto-
matically redeems early and you would
that the issuer, such as Barclays, is able to
pay you at any time you choose to redeem
your ETN. The benefit is that they give you
access to a wide range of markets such as
commodity indices.
receive 6.75 per cent plus your original
investment. If on the final valuation date
the index is at or above 60 per cent of
the level when the product was issued,
then you will receive 33.75 per cent of
the total issue price, plus 100 per cent of
your original investment. But if the FTSE
is trading at 59 per cent of your entry
level, then you would only receive 59 per
cent of your original investment.
ment and expiry date is six years. It will
pay you 9.25 per cent for every year
that the FTSE 100 is 50 per cent higher
than your entry level. What is good
about this product that the 50 per cent
IN FOCUS | EXCHANGE-TRADED FUNDS (ETFS)
These tend to track an underlying index,
such as the FTSE or the S&P 500. The
beauty of an ETF is two-fold: first you
pay low fees to get exposure to an entire
index compared to buying each individ-
ual stock through a broker; second, you
can buy short ETFs, so if you think the
FTSE will fall in the coming weeks, then
you could use an ETF to take a short
position. The issuer tries to mimic the
Synthetic Zero products that track a
wide variety of indices and stocks,
including mining giants Rio Tinto and
BHP Billiton, with a variety of strike
prices.
underlying index, but be aware that
sometimes the issuer’s portfolio can
slightly slip out of line with the underly-
ing index, which is called a tracking
error. You receive the performance of
the issuer’s portfolio, so the tracking
error is important. You need the issuer
to remain solvent but your investment is
backed by an actual portfolio of assets
unlike an ETN.
CITYA.M. 26 AUGUST 2010
averse, there are a range of autocalls and
accelerated tracker products (see story
on left hand page). For example, RBS’s
UK Accelerated Tracker 3 product has a
potential payout at expiry of two times
any positive gain in the FTSE 100 and
investors’ capital is protected providing
the index has never fallen to or below 65
per cent of its initial level.
Post-crisis, we’re still a long way from
market normality, whatever that might
turn out to be. You can still keep your toe
in the water, but don’t get swept away.
LISTED PRODUCT
NEWS
ETP TURNOVER 10PC OF EQUITY ACTIVITY
The latest figures from BlackRock’s
exchange-traded fund (ETF) division show
that exchange-traded product turnover
was 10.45 per cent of equivalent equity
market activity but was down 8.8 per cent
on the previous week at €10bn. Country-
related products saw the greatest turnover
at €2.1bn, an increase of 1.8 per cent on
the previous week. The fixed income area
had the highest increase in turnover, up 10
per cent on the previous week, while
regional turnover fell by 26 per cent.
RBS SEMINAR ON FALLING MARKETS
Flat or falling markets present traders with
a real challenge to make profits but it is
possible to make some money even when
the markets aren’t moving up or down.
RBS is holding a seminar next Tuesday
between 5.30pm and 6.30pm to show you
how its listed products range can help you.
Its range runs from Autocalls and
Synthetic Zeros to put covered warrants,
catering for all levels of risk. The seminar
will be held at RBS’s HQ at 250
Bishopsgate. To register, call 0800 121
6286 or email markets.uk@rbs.com.
TCF ADVISES DUE DILIGENCE WITH ETFS
Low cost passive asset manager TCF
Investment warned this week that
Investment | Listed Products 19
ANALYSIS l FTSE 100 Index A mine belonging to
Kazakhmys, which
6000 publishes interim
results today
5800
5600
5400
5200
5000
4800
Source: Digital Look
4600
Sep09 Nov Jan 10 Mar May Jul
THE
TIPSTER
RISK AVERSION BOOSTS
BONDS, HITS MINERS
D
ESPITE the yawning deficit in
Britain’s public finances, 10-year gilts
have been finding favour thanks to
the ongoing theme of risk aversion.
The flight from equities has seen yields
dropping dramatically in recent days.
Although attention is now focusing on a
break-out, this could struggle to find sup-
port unless bargain hunters move back into
equities. The current IG Index December
2010 spread on the long gilt is 12502-
12506.
There have been a number of comments
over recent weeks about the renewed pos-
sibility of a slide back into recession,
encouraging further risk aversion among
investors. The US dollar-yen currency pair
hit a new 15-year low of ¥83.57 on
Monday – will it continue its slide against
the yen should US GDP data disappoint on
Friday? City Index was offering a spread on
dollar-yen of ¥84.57-¥84.60.
Miners such as Kazakhmys, which pub-
lishes its interim results today, have taken a
bashing recently. But analysts still appear
to be feeling positive about the London-list-
ed stock and an upbeat statement in July
means the firm could still have a long way
to climb. Cantor Index offers a spread of
1,085.16p-1,089.84p.
Promethean World, which supplies
interactive white boards to schools, has
seen its share price fall by 40 per cent
from its high of 211.50p in June to lows of
114.60p yesterday. The government’s
potential cuts to education spending budg-
ets have hit the firm hard and not even
first-half figures, which saw revenues rise
35 per cent, have been able to stop the
slide. Will there be even further to fall?
ShortsandLongs.com has a rolling spread
of 122.7p-124.7p.
Advertising giant WPP reported results
earlier this week and the recovery across
most markets delighted analysts. Chief
executive Sir Martin Sorrell was cautious
about the outlook, prompting some profit-
taking. This simply represents a better level
at which to buy. Spreadex offers 631.80p-
633.70p Jessica Mead
investors should exercise thorough due dili- SOCGEN LAUNCHES WHEAT WARRANTS New ways to trade
gence before investing in ETFs or passive Recent volatility in the agricultural markets wheat
funds by checking an ETF’s index suitability, its has prompted Societe Generale’s listed prod-
stock lending policy, the vehicle structure and ucts team to launch four wheat covered war- PICTURE: Reuters
whether it is geared or not. For example, rants, of which three are call warrants. The
swap-backed ETFs expose you to fundamental shortest warrants expire on 26 November
credit risk with the swap counterparty, which with a strike price of $8 while the put warrant
TCF feels any investors are largely unaware of. has the same expiry, also with a strike of $8.
The rise of ETFs that offer leveraged returns, The call warrant returns a profit if the price of
short exposure and active management is the underlying exceeds $8. The remaining two
seen by TCF as cause for concern and only call warrants will expire in February 2011 with
really suitable for the most sophisticated strike prices of $9 and $10, indicating demand
investors. to bet on rising food prices.
 20 Markets & Investments CITYA.M. 26 AUGUST 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .254.10 –5.60 314.80 246.90 Cobham . . . . . . . . . . . . . . . . . . .207.80 –0.90 278.60 199.90 Investec . . . . . . . . . . . . . . . . . . .461.20 –5.40 565.00 411.50 SABMiller . . . . . . . . . . . . . . . . .1847.00 –23.00 2090.00 1394.00
3i Infrastructure . . . . . . . . . . . . . 113.10 –0.10 115.00 89.35 COLT Group . . . . . . . . . . . . . . . . 111.00 +2.00 144.20 107.70 ITV . . . . . . . . . . . . . . . . . . . . . . . .55.35 –1.70 71.75 41.04 Sage . . . . . . . . . . . . . . . . . . . . . .239.30 –4.20 260.50 208.20
A.B. Foods . . . . . . . . . . . . . . . .1047.00 –4.00 1096.00 785.50 Compass . . . . . . . . . . . . . . . . . .516.50 +3.00 574.50 322.40 Jardine Lloyd Thompson. . . . . . .577.00 –4.50 604.50 420.70 Sainsbury(J) . . . . . . . . . . . . . . . .360.50 –2.60 373.00 307.60
Aberdeen Asset Man . . . . . . . . . .133.00 +0.10 155.60 111.00 Cookson . . . . . . . . . . . . . . . . . . .412.30 –13.50 616.00 347.60 Johnson Matthey . . . . . . . . . . .1550.00 –29.00 1814.00 1302.00 Schroders . . . . . . . . . . . . . . . . .1330.00* –38.00 1450.00 1029.00
Admiral. . . . . . . . . . . . . . . . . . .1512.00 +39.00 1556.00 1003.00 Croda Intl . . . . . . . . . . . . . . . . .1230.00 –26.00 1361.00 607.00 JPMorgan Emerg Mkts . . . . . . . .522.00 –9.00 549.00 397.00 Schroders N/V. . . . . . . . . . . . . .1071.00* –25.00 1185.00 864.00
Aegis . . . . . . . . . . . . . . . . . . . . . 110.70 –2.20 137.30 96.60 Daily Mail ‘A’ . . . . . . . . . . . . . . . .441.30 –11.20 539.00 371.80 Kazakhmys . . . . . . . . . . . . . . . .1073.00 –30.00 1634.00 901.50
Afren . . . . . . . . . . . . . . . . . . . . . .96.60 –2.50 111.00 60.50 Dana Petroleum . . . . . . . . . . . .1806.00 +1.00 1817.00 968.50 Kesa Electricals . . . . . . . . . . . . .129.60 +0.30 162.00 98.45 Scot. & Sthrn Energy. . . . . . . . . 1126.00* –1.00 1206.00 357.50
African Barr Gold . . . . . . . . . . . .567.00 –0.50 685.00 520.50 Davis Service . . . . . . . . . . . . . . .364.00 +0.90 442.30 356.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .198.50 –2.60 255.00 196.50 Scottish Mortgage. . . . . . . . . . . .571.00 +2.50 623.50 441.00
Aggreko . . . . . . . . . . . . . . . . . .1346.00 –83.00 1639.00 596.00 De La Rue . . . . . . . . . . . . . . . . . .689.50 –3.50 1021.00 666.50 Ladbrokes . . . . . . . . . . . . . . . . .131.40* –0.60 174.29 114.60 SEGRO . . . . . . . . . . . . . . . . . . . .275.00 –1.10 403.10 244.00
Alliance Trust . . . . . . . . . . . . . . .307.60 –1.30 352.70 286.40 Debenhams . . . . . . . . . . . . . . . . .56.05 –0.05 90.00 51.95 Lancashire Hldgs . . . . . . . . . . . .525.50 +3.50 545.00 416.70 Serco . . . . . . . . . . . . . . . . . . . . .586.50 +27.00 656.50 440.90
AMEC . . . . . . . . . . . . . . . . . . . . .848.50 –24.00 937.00 720.50 Derwent London . . . . . . . . . . . .1383.00 +9.00 1490.00 1077.00 Land Securities . . . . . . . . . . . . . .603.00 +5.00 743.50 543.00 Severn Trent . . . . . . . . . . . . . . .1301.00 +13.00 1358.00 939.50
Amlin . . . . . . . . . . . . . . . . . . . . .408.50 +3.70 437.60 350.80 Dexion Absolute . . . . . . . . . . . . .135.60 –0.80 148.00 121.10 Legal & General . . . . . . . . . . . . . .89.40 –1.35 97.00 66.90 Shaftesbury . . . . . . . . . . . . . . . .409.00 +5.00 426.50 341.70
Anglo American . . . . . . . . . . . .2254.00* –66.00 3015.50 1846.50 Diageo . . . . . . . . . . . . . . . . . . .1066.00 –10.00 1176.00 930.50 Lloyds Banking Gp . . . . . . . . . . . .66.00 –1.41 77.61 45.30 Shire. . . . . . . . . . . . . . . . . . . . .1387.00 –31.00 1526.00 999.00
Antofagasta . . . . . . . . . . . . . . . .977.50 –34.50 1100.00 699.50 Dimension Data . . . . . . . . . . . . .120.00 –0.30 125.50 56.50 Logica . . . . . . . . . . . . . . . . . . . .108.20 –1.70 149.10 100.80 Smith & Nephew . . . . . . . . . . . . .545.00 –7.00 700.50 505.50
Aquarius Platinum . . . . . . . . . . .261.90 –1.20 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .409.80 +0.80 431.30 231.10 London Stk Exchange . . . . . . . . .641.50 –7.00 949.50 540.50 Smiths . . . . . . . . . . . . . . . . . . . 1135.00 –3.00 1242.00 771.50
ARM Holdings . . . . . . . . . . . . . . .331.80 +1.80 370.00 123.30 Drax . . . . . . . . . . . . . . . . . . . . . .385.50 –4.60 496.50 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1477.00 –21.00 2198.00 1336.00 SOCO Intl . . . . . . . . . . . . . . . . . .437.40 –4.10 476.60 380.60
Arriva . . . . . . . . . . . . . . . . . . . . .773.00 +0.50 782.50 428.20 DSG Intl . . . . . . . . . . . . . . . . . . . .24.00 +0.25 39.75 23.32 Man . . . . . . . . . . . . . . . . . . . . . .206.60 +0.10 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .880.00 +10.50 949.00 612.00
Ashmore . . . . . . . . . . . . . . . . . . .283.10 –1.10 311.20 211.60 Dunelm . . . . . . . . . . . . . . . . . . . .381.30 +1.30 438.40 250.70 Marks & Spencer. . . . . . . . . . . . .334.20 –3.80 412.70 321.90
Astrazeneca . . . . . . . . . . . . . . .3230.00* –3.50 3376.00 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .352.30 –3.50 499.90 308.50 Meggitt . . . . . . . . . . . . . . . . . . . .265.10* –3.30 331.00 202.20 Spirax-Sarco Eng . . . . . . . . . . .1562.00 –1.00 1617.00 947.00
Atkins(Ws) . . . . . . . . . . . . . . . . .676.50* –20.50 801.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .392.40 –2.10 412.40 327.40 Melrose . . . . . . . . . . . . . . . . . . .212.50 –6.50 251.50 139.30 Spirent Comms . . . . . . . . . . . . . .125.10* –2.90 135.90 74.05
Autonomy Corp . . . . . . . . . . . .1560.00 –7.00 2012.00 1272.00 Electrocomponents . . . . . . . . . . .205.70 –1.20 245.00 142.90 Mercantile IT . . . . . . . . . . . . . . . .907.50 –8.50 1002.00 822.50 Sports Direct Intl . . . . . . . . . . . . .103.50 –0.20 134.00 81.80
Aveva . . . . . . . . . . . . . . . . . . . .1400.00 +12.00 1419.00 805.00 EnQuest . . . . . . . . . . . . . . . . . . . 116.30 +0.70 125.90 87.35 Michael Page Intl. . . . . . . . . . . . .385.80 –9.80 461.50 309.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1160.00* — 1190.00 536.00
Aviva . . . . . . . . . . . . . . . . . . . . .375.30 –6.60 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .395.70 –0.40 475.90 358.50 Millen & Copthorne . . . . . . . . . . .482.70* +2.90 514.50 321.40 St James’s Place . . . . . . . . . . . . .253.00* –1.50 296.90 203.40
Babcock International . . . . . . . . .492.80 –8.20 660.50 482.10 Eurasian Nat Res . . . . . . . . . . . .827.00 –3.50 1276.00 776.00 Misys . . . . . . . . . . . . . . . . . . . . .269.90 –0.40 281.70 173.90 Stagecoach. . . . . . . . . . . . . . . . .170.00 –0.60 204.90 126.20
BAE Systems . . . . . . . . . . . . . . .299.10 +0.80 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .590.00 +12.00 630.00 258.00 Mitchells & Butlers . . . . . . . . . . .284.40 –4.60 343.90 228.30 Standard Chartered . . . . . . . . . .1661.00* –26.50 1927.00 1351.00
Balfour Beatty . . . . . . . . . . . . . . .235.10 +0.50 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .606.00 –10.50 664.50 489.00 MITIE . . . . . . . . . . . . . . . . . . . . .188.70 –2.90 281.70 187.80 Standard Life . . . . . . . . . . . . . . .199.00* –4.10 237.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .298.00* –11.15 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .89.50 –0.50 96.80 79.00 Mondi . . . . . . . . . . . . . . . . . . . . .447.00 –9.60 491.30 278.00 SuperGrp . . . . . . . . . . . . . . . . . .952.00 –20.50 1100.00 499.00
Barratt Development . . . . . . . . . . .91.45 –1.20 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .278.20* –11.80 396.20 138.00 Monks Inv Tst . . . . . . . . . . . . . . .292.10 –1.30 321.20 242.10 TalkTalk . . . . . . . . . . . . . . . . . . .123.60 –1.10 147.10 106.60
BBA Aviation . . . . . . . . . . . . . . .180.50 –12.10 220.00 136.60 FirstGroup . . . . . . . . . . . . . . . . .343.50 –3.20 448.80 331.20 Morrison Wm . . . . . . . . . . . . . . .289.70 +0.50 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .391.80 –9.70 501.50 341.40
Beazley. . . . . . . . . . . . . . . . . . . . 111.90* +0.70 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .263.80* –2.10 297.20 232.70 Murray Intl Tst . . . . . . . . . . . . . . .837.00 –9.50 893.50 667.50 Tate & Lyle . . . . . . . . . . . . . . . . .412.40 +0.50 509.00 388.00
Bellway. . . . . . . . . . . . . . . . . . . .513.00 –7.50 927.50 510.00 Forth Ports . . . . . . . . . . . . . . . .1288.00 +2.00 1425.00 1020.00 National Express. . . . . . . . . . . . .221.20 –3.00 258.60 155.86
Berkeley . . . . . . . . . . . . . . . . . . .805.00 +1.00 984.00 735.00 Fresnillo . . . . . . . . . . . . . . . . . . .997.50* –2.50 1139.00 583.00 National Grid . . . . . . . . . . . . . . .533.50 –1.00 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .24.95 –1.16 54.90 24.29
BG . . . . . . . . . . . . . . . . . . . . . .1059.00* –15.50 1248.00 966.90 G4S . . . . . . . . . . . . . . . . . . . . . .247.10 –1.00 285.70 210.00 Next . . . . . . . . . . . . . . . . . . . . .1932.00 –12.00 2360.00 1601.00 Telecity . . . . . . . . . . . . . . . . . . . .465.00 +7.60 485.00 311.30
BHP Billiton . . . . . . . . . . . . . . .1767.00 –36.00 2346.00 1527.50 Genesis Emerging Mkts Fd . . . . .462.00 –11.20 484.00 370.00 Northumbrian Water . . . . . . . . . .327.90* +7.30 341.30 225.20 Templeton Emrg Mkts . . . . . . . . .539.00 –4.50 598.00 398.00
BlackRock Mining . . . . . . . . . . . .557.00 –3.00 654.50 420.00 GKN . . . . . . . . . . . . . . . . . . . . . .138.50* –1.80 155.00 100.20 Old Mutual . . . . . . . . . . . . . . . . .122.90 –4.10 130.20 86.85 Tesco . . . . . . . . . . . . . . . . . . . . .402.70 +0.20 454.90 366.30
Bluecrest Allblue GBP . . . . . . . . .167.40 +0.20 169.00 137.10 GlaxoSmithKline . . . . . . . . . . . .1205.50* +5.50 1347.00 1088.00 Pace . . . . . . . . . . . . . . . . . . . . . .207.90 –2.10 243.80 145.00 Thomas Cook . . . . . . . . . . . . . . .181.20 +0.60 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .43.50 –0.75 49.50 34.75 Great Portland Estates . . . . . . . .310.70 –3.30 332.10 236.60 Partygaming . . . . . . . . . . . . . . . .255.70 –4.30 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .322.70 +1.20 325.70 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .375.15 –2.35 658.20 296.00 Greene King . . . . . . . . . . . . . . . .403.80* –0.80 504.00 372.50 Pearson . . . . . . . . . . . . . . . . . . .937.00* –2.00 1069.00 715.50 Travis Perkins . . . . . . . . . . . . . . .747.00 –16.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . . .952.00 +5.50 1017.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .485.70 +0.70 562.50 324.00 Pennon . . . . . . . . . . . . . . . . . . . .565.00* +5.00 613.00 440.40 TUI Travel . . . . . . . . . . . . . . . . . .198.60 –3.00 313.90 189.20
British Airways . . . . . . . . . . . . . .208.70 –6.80 255.80 172.40 Halma . . . . . . . . . . . . . . . . . . . . .270.00* –4.70 298.70 192.00 Persimmon . . . . . . . . . . . . . . . . .347.30 –0.80 534.50 335.90 Tullett Prebon . . . . . . . . . . . . . . .371.00 –1.20 436.20 261.20
British Amer. Tob . . . . . . . . . . .2181.00* –20.50 2335.50 1832.00 Hammerson . . . . . . . . . . . . . . . .352.20* –1.80 460.30 332.20 Petrofac . . . . . . . . . . . . . . . . . .1355.00 –37.00 1428.00 849.00 Tullow Oil . . . . . . . . . . . . . . . . .1238.00 –59.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .422.50 –2.60 467.90 338.50 Hargreaves Lansdown . . . . . . . .392.00 –9.20 408.40 229.00 Petropavlovsk . . . . . . . . . . . . . . .976.00 +11.00 1370.00 675.50 UK Commercial Prop. . . . . . . . . . .77.50* +0.50 84.90 68.75
British Land . . . . . . . . . . . . . . . .449.40 +1.70 531.00 416.00 Hays . . . . . . . . . . . . . . . . . . . . . . .89.15 –1.35 119.00 82.50 Premier Farnell . . . . . . . . . . . . . .215.00 –4.80 252.60 140.60 Ultra Electronics . . . . . . . . . . . .1616.00* –5.00 1718.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .475.50 –1.10 518.00 324.80 Henderson . . . . . . . . . . . . . . . . .121.00 –2.10 157.80 112.10 Premier Oil . . . . . . . . . . . . . . . .1480.00 –54.00 1610.00 984.00
Brown(N.) . . . . . . . . . . . . . . . . . .221.00 –0.50 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .305.00* –14.40 585.00 298.20 Provident Financial . . . . . . . . . . .824.50 +2.50 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1688.00* –4.00 2024.00 1610.00
BSkyB . . . . . . . . . . . . . . . . . . . .704.50 –3.50 732.00 521.00 Hikma Pharma . . . . . . . . . . . . . .734.50 +5.50 746.00 440.00 Prudential . . . . . . . . . . . . . . . . . .547.00* –13.50 665.00 475.70 United Utilities . . . . . . . . . . . . . .565.50 +1.00 620.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .132.60* –2.60 151.00 108.40 Hiscox . . . . . . . . . . . . . . . . . . . .360.80 +9.80 369.30 299.60 PZ Cussons . . . . . . . . . . . . . . . .339.80* –9.80 373.20 210.50 Utd Business Media . . . . . . . . . .547.00 –6.50 579.50 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . .682.00 +3.00 784.50 570.00 Hochschild Mining . . . . . . . . . . .326.00 +5.50 370.60 220.00 Qinetiq . . . . . . . . . . . . . . . . . . . .104.90 +0.20 179.10 103.50 Vedanta Resources . . . . . . . . . .1839.00 –43.00 2967.00 1616.00
Burberry . . . . . . . . . . . . . . . . . . .820.50 –28.00 891.50 457.70 Home Retail . . . . . . . . . . . . . . . .212.10 –3.10 336.50 208.50 Randgold Resources. . . . . . . . .5740.00 +10.00 6600.00 3456.00 Victrex . . . . . . . . . . . . . . . . . . .1080.00 –13.00 1320.00 681.00
Cable & Wire Comms . . . . . . . . . .57.90 –1.25 150.00 53.00 Homeserve . . . . . . . . . . . . . . . . .436.10 –3.60 488.20 435.40 Reckitt Benckiser . . . . . . . . . . .3130.00* –35.00 3667.00 2765.00 Vodafone . . . . . . . . . . . . . . . . . .149.40 –0.45 155.50 126.50
Cable & Wire Wwide . . . . . . . . . . .62.75 +0.10 94.80 60.05 HSBC Hldgs . . . . . . . . . . . . . . . .631.50* +1.60 766.80 595.20 Reed Elsevier . . . . . . . . . . . . . . .514.50* –6.50 566.00 435.40 Weir . . . . . . . . . . . . . . . . . . . . . 1130.00 –7.00 1275.00 599.00
Cairn Energy. . . . . . . . . . . . . . . .449.40 +3.90 497.60 306.80 Hunting . . . . . . . . . . . . . . . . . . .554.00 –15.50 659.50 429.10 Regus . . . . . . . . . . . . . . . . . . . . . .66.05 –1.00 125.50 64.05 WH Smith . . . . . . . . . . . . . . . . . .406.50 +2.90 551.00 392.20
Caledonia Invs . . . . . . . . . . . . .1545.00 –5.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .396.20 –3.90 478.30 291.70 Renishaw . . . . . . . . . . . . . . . . . .850.00 +10.50 915.50 457.00 Whitbread . . . . . . . . . . . . . . . . .1368.00 –11.00 1645.00 992.50
Capita . . . . . . . . . . . . . . . . . . . . .700.50 –2.00 829.50 661.00 IG . . . . . . . . . . . . . . . . . . . . . . . .508.50 +7.00 510.50 291.00 Rentokil Initial . . . . . . . . . . . . . . . .91.85 –1.55 140.20 91.35 William Hill . . . . . . . . . . . . . . . . .166.90 –1.10 217.80 160.50
Capital & Counties . . . . . . . . . . . 116.80 +0.30 125.40 99.60 Imagination Tech Gp . . . . . . . . . .338.00 –1.00 362.00 149.75 Resolution . . . . . . . . . . . . . . . . .246.60 +0.90 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .429.20 –1.00 487.00 380.00
Capital Shopping Centres . . . . . .325.40 +0.70 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .664.50 –9.00 786.00 393.30 Rexam . . . . . . . . . . . . . . . . . . . .293.00 –2.90 348.80 252.80
Carillion . . . . . . . . . . . . . . . . . . .298.20 +7.00 361.90 263.90 Imperial Tobacco. . . . . . . . . . . .1819.00 –16.00 2159.00 1706.00 Rightmove . . . . . . . . . . . . . . . . .596.50 –2.50 729.00 456.90 Wolseley . . . . . . . . . . . . . . . . . .1223.00 –16.00 1742.00 1155.00
Carnival . . . . . . . . . . . . . . . . . .2037.00* –27.00 2937.00 1804.00 Inchcape. . . . . . . . . . . . . . . . . . .253.20 –10.00 347.00 235.00 Rio Tinto . . . . . . . . . . . . . . . . . .3105.00* –56.50 4104.00 2262.50 Wood Group (John). . . . . . . . . . .345.60 –4.30 411.70 277.00
Catlin . . . . . . . . . . . . . . . . . . . . .334.00 –6.50 394.60 303.20 Informa . . . . . . . . . . . . . . . . . . . .372.00* –7.60 439.40 263.30 RIT Capital Partners . . . . . . . . . 1124.00 –7.00 1215.00 927.00 WPP . . . . . . . . . . . . . . . . . . . . . .633.00 –11.50 744.00 489.00
Centamin Egypt . . . . . . . . . . . . .169.80 +2.40 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .661.00 +6.00 831.00 503.00 Rolls Royce . . . . . . . . . . . . . . . .553.00 –4.50 631.50 434.50 Xstrata . . . . . . . . . . . . . . . . . . . .976.10 –13.50 1344.50 765.50
Centrica . . . . . . . . . . . . . . . . . . .324.90 +4.20 333.10 232.50 Intercontl Hotels . . . . . . . . . . . . .999.50 –17.50 1244.00 721.00 Rotork . . . . . . . . . . . . . . . . . . .1507.00 –29.00 1569.00 939.50 LONDON TOP 250 BY MARKET CAPITALISATION
Charter Intl . . . . . . . . . . . . . . . . .567.00* –28.00 855.50 560.50 Intermediate Capital . . . . . . . . . .275.40 –0.70 332.00 233.50 Royal Bank Of Scot . . . . . . . . . . . .42.99 –1.11 58.95 28.25
Chemring . . . . . . . . . . . . . . . . .2617.00 +19.00 3711.00 2033.00 Intertek . . . . . . . . . . . . . . . . . . .1675.00 –23.00 1770.00 1136.00 Royal Dutch Shell A . . . . . . . . .1703.00* –16.50 2068.50 1621.00 * Ex-Dividend † Suspended
Chloride Group . . . . . . . . . . . . . .374.00 +0.80 390.50 138.60 Intl Power . . . . . . . . . . . . . . . . . .366.50 –4.20 384.10 248.20 Royal Dutch Shell B . . . . . . . . .1642.00* –9.50 1997.50 1550.00
Close Bros . . . . . . . . . . . . . . . . .670.00 –9.00 806.50 657.00 Invensys . . . . . . . . . . . . . . . . . . .234.70 –6.70 350.30 232.30 RSA Insurance . . . . . . . . . . . . . .122.30* –1.10 142.00 114.10 www.interactivedata.com

3G 13:05

Markets

SPREAD BET NOW

Cash: 20719.24 Unrealised P&L: 92.70
Margin: 560.00 Total Position: 20092.70

List One Long name... List Three

Sell Buy Change Status
UK 100 Rolling Spread
Trade
4917.0 4919.0 +45.2 >
Wall Street Rolling Spread
Trade
9599 9605 +24 >
US SP 500 Rolling Spread
Trade
1034.6 1035.2 +4.8 >
Trade
US Tech 100 Rolling Spread
1644.4
884.8 1647.4
885.2 +6.6
-15.0 >
Germany 30 Rolling Spread
Trade
5538.5 5540.5 +67.0 >
Trade
US Crude Oil Oct 09 Spread
1644.4
884.8 1647.4
885.2 +6.6
-15.0 >
GP/USD Rolling Spread
Trade
16346 16350 +61 >
5

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FTSE hits seven-week closing low as Wall St stages comeback

fears over recovery’s strength intensify as bargain hunters move in
THELONDON
global growth, the world’s largest
miner BHP Billiton said it was cau-
tious on the short-term outlook and
due to a spat between the govern-
ment and its former partner.
Economically-sensitive banks fell
THENEW YORK 10,060.06. The Standard & Poor’s 500
Index added 3.46 points, or 0.33 per
cent, to 1,055.33. The Nasdaq

REPORT
the economy in China, its biggest cus-
tomer, would slow from recent highs.
Shares in BHP, which reported
1.1 per cent, with Barclays down 3.6
per cent. As investors sought safer
shelter, the yield on the 10-year
REPORT Composite Index gained 17.78 points,
or 0.84 per cent, to 2,141.54.
The KBW bank index briefly hit
bumper results yesterday, fell 2 per British gilt hit an all-time low of 2.790 42.70. The index finished down 0.4

B U
RITAIN’S top share index fell to cent, while the sector lost 1.8 per per cent. By comparison, the UK blue S stocks staged a comeback yes- per cent at 43.41.
a seven-week closing low yester- cent. chip index offered a dividend yield of terday, breaking a four-day los- The Nasdaq fared better than the
day on growing unease that the However, robust company earnings 3.54 per cent. ing streak by major indexes, as other two main indexes, boosted by
global economy may slip back helped limit the losses on the FTSE key technical support triggered Apple.
into another recession following fur- 100, which closed 46.55 points or 0.9 ANALYSIS l FTSE 100 Index bargain hunting that offset weak eco- But the market’s gains may prove
ther weak economic data from the per cent lower at 5,109.40, after trad- 5500 5,109.40 nomic data. to be short lived. The S&P’s 14-day
United States. ing as low as 5,070.94. 25 Aug The S&P 500 index sagged as much moving average fell below its 50-day
5400
New orders for long-lasting US A one-notch downgrade of Ireland’s as one per cent after data showed new moving average.
5300
made goods rose far less than expect- credit rating by Standard & Poor's also single-family home sales slumped to a About 8.14bn shares traded on the
ed in July and, excluding transporta- weighed on sentiment as it reignited 5200 record slow pace in July. But positive New York Stock Exchange, the
tion equipment, posted their largest concerns over sovereign debt issues at 5100 momentum grew through the ses- American Stock Exchange and
decline in 1-1/2 years, while new US Eurozone peripheral economies. 5000 sion after the benchmark S&P 500 Nasdaq.
single-family home sales unexpected- Tullow Oil sank 4.6 per cent, the 4900 bounced back from a breach of the Advancing stocks outnumbered
ly fell last month to set their slowest second biggest faller on the FTSE 100, 4800 1,040 level. declining ones on the NYSE by 1,832
pace on record. after saying development of its 4700 The Dow Jones industrial average to 1,167, while on the Nasdaq,
Also illustrating concerns over Ugandan oil fields would be delayed 7 Jun 25 Jun 15 Jul 4 Aug rose 19.61 points, or 0.20 per cent, to advancers beat decliners 1,676 to 977.
 City Focus
The course that turns you into a trader
Kathleen Brooks finds out if trading training
is worth the money for wannabe City boys
F
OR graduates, it’s harder than ever
to get a job as a trader. Unless you
have a double first in something
maths-related then you can kiss
good-bye to the dream. But is there a way
to increase your chances? One way of get-
ting first-hand knowledge is on a “trader
training school.” But are they any good?
As a former trading analyst at an oil
company, it was with heavy heart that I
went along to a course run by Amplify
Trading. I thought these courses were
expensive tosh in out-of-town locations.
But Amplify’s office is just behind Canada
Square. Even if the course is rubbish I will
feel like I am where the action is happen-
ing, I thought. The trading floor wasn’t
quite Goldman Sachs standard, but it cer-
tainly looked professional: desks had mul-
tiple computer screens and phone lines
and there was a squawk box – a loud-
speaker system that is used to channel
market news straight to a trader’s desk.
I was led to my desk and told that I and
the others on the course could trade euro-
dollar, oil and the S&P 500 mini contract
on a simulator. My heart sank. Simulators
were always inferior to real trading sys-
tems and tended to malfunction. Or so I
thought. Technology has moved on. In
front of me were two screens. On the right
were my charts that automatically updat-
ed every minute. Impressive. The screen
on the left was the control centre where I
would make the trades. We could start
trading immediately, so once I realised
how to place a buy or sell order – it was
only slightly more complex then placing a
grocery order online – off I went.
Things started slowly. Oil seemed to
move first, with the S&P and then euro-
dollar following closely behind. After half
an hour I was down $1,000. Time to
change tack. Since I write investment fea-
tures all day, I have a pretty good idea
about themes in the market. But what I
did learn is that when you trade intra-day
you will only make money by reacting to
minute-by-minute price action.
GOOD CAMERADERIE
There was good camaraderie during the
course. An instant messaging system
allowed experienced traders to share mar-
ket tips with everyone else. I found this
useful for generating ideas and also check-
ing what other traders were investing in.
Even so, with half an hour to go, I was still
$2,000 down. I needed to come up with a
plan. Not only did none of the others look
like they had made any losses, I was the
only one with experience of working in
the actual markets. How embarrassing.
Suddenly my competitive streak let
loose. I knew that I wouldn’t make a prof-
it, but I at least had to claw back some of
my losses. I decided on a buy and hold
strategy. I bought all three products when
the market was low in the hope it would
rise in the next 30 minutes. Finally, things
started to go in my direction. The euro
ticked up against the dollar. Oil rose, and
the S&P 500 also moved in my direction.
By the end of the session I was pleading
for just “five more minutes”; I clawed back
half of my euro losses, eradicated my oil
losses and made a slight dent in the S&P
loss. Walking back to the DLR I felt a real
thrill. Because the prices were all in real-
time it didn’t seem to matter that I was
only trading a simulator. I also came away
with a different understanding of the
markets. If you aren’t looking at the charts
and seeing where it is actually going, all
the theory in the world is useless.
Are these courses worth it? About 40
21
BACK TO SCHOOL
| Careers KIT FOR COOL
KIDS, TOMORROW
per cent of people who have completed
Amplified’s courses go on to work in
investment banks, but usually in non-trad-
ing jobs. JC Zuidmeer completed Amplify’s
course after he left his role as a product
controller at Morgan Stanley. Although he
loved it, he is back working as a product
controller for another investment bank.
“This is a temporary role, I needed the
cash, but my passion is still trading.”
Amplify has definitely benefited his CV, he
says, and he is continuing to look for a job
in trading.
Manoj Ladwa, senior trader at ETX
Capital, says: “These courses can be useful
since they give new recruits a good idea
about how a market works. But what
makes a good trader is aptitude to take
risk, a quick head for numbers as well as
creativity and these things can’t be
taught.” The sceptics include Fiona
Sandford, director of careers services at
London School of Economics. “I would be It could be you.
nervous to advise students who are
already in debt to go on a course like this,”
she says. “Banks tend to look at a passion
for trading, not a huge knowledge of it.” GCU London – Glasgow Caledonian
She says there are many ways for to show
your passion for trading – interning at University’s specialist postgraduate London
investment banks in holidays and joining campus – announces a range of professionally
investment clubs at your university where
you can play simulated trading games. accredited master’s degree programmes.
Personally, I loved the thrill of it. While I
wouldn’t advocate anyone to get into debt
for a course such as this, if you haven’t had
the opportunity while at uni to get into
the trading community, these courses are Study for a
certainly one route to doing so. master’s degree
with
DETAILS | SCHOOLS FOR TRADERS
l Amplify’s four month trading course costs £3,600, a two month professional
course £1,275 plus Vat. Students will spend two months on the sim-
ulator, then if they are good enough, spend the last two months accreditation
trading the actual markets. www.amplifytrading.com
l Schneider Trading Associates offers a free four-week full time
course for those who get selected to take part in its professional
trader programme. You need to have a minimum 2.2 degree to
apply. www.schneidertrading.com/tradercourse/ Open events
l TCA Markets has a remote trading programme for trainee traders. Sunday, August 29
tcamarkets. tradercareers.com 11am-3pm and
Banking & Finance: Wednesday, September 8
Executive MBA Financial Services Management 4pm-8pm
MSc International Banking & Finance
MSc Banking, Finance & Risk Management
MSc Finance Services, Risk & Operations
Risk Management:
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Tourism:
MSc International Tourism Enterprise
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Located in the heart of the City,
GCU London is a leading-edge
learning environment with excellent
industry links and partnerships.
To find out more:
call 0203 369 3000
email enquiries@gculondon.ac.uk
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 Lifestyle
22
The angry wannabe queen
All hail another royal
corker from Gregory,
says Zoe Strimpel
THE RED QUEEN
BY PHILIPPA GREGORY
Simon & Schuster, £18.99
hhhhi
MEGA-novelist and Tudor historian
Gregory returns to her new series, The
Cousins’ War, with an instantly, electri-
cally gripping story about Margaret
Beaufort. Who? Indeed. Beaufort, the
grandmother of Henry VIII, was merely a
shadowy character on the edge of The
White Queen, Gregory’s previous book
about Elizabeth Woodville, matriarch of
the House of York. But here she takes
centre stage as the heiress to the red rose
of Lancaster. We meet her as a child – a
deeply devout, grandiose nine-year-old
who wishes she could be like Joan of Arc
and believes angels talk to her.
The Red Queen begins when mad King
Henry VI marries the child Margaret to
his half-brother Edmund Tudor, twice
her age. Their son is born just as the wars
are starting, and Beaufort vows that he
will become king. She never surrenders
her belief that her House is the true
ruler of England and that she has a great
destiny before her.
There’s plenty to pity about Margaret
Beaufort. She’s born without much love
from her mother or her (quickly dead)
father, penalised for being a girl. She’s
repeatedly raped by Edmund Tudor in
order to produce an heir: once she does,
the birth is so butchered by midwives
that she becomes infertile.
But make no mistake, Gregory paints
an egotistic, jealous and unscrupulous
person. Unlike Woodville, who spares
barely a thought for the homely
Margaret, Beaufort is completely
obsessed with the beautiful head of her
rival household, whom she believes has
taken her place as the rightful queen.
As usual, Gregory has gone against the
grain. She’s put a nasty character at the
centre of her work, but it doesn’t mean
the book is too sour to digest. On the con-
trary, it’s a riproaring induction to the
period for those who may not have con-
sidered themselves interested in late
Medieval history, and a must-read for
anyone else.
TIGERLILY’S ORCHIDS
BY RUTH RENDELL
Hutchinson, £18.99
hhhhi
by ZS
RUTH Rendell is the grande dame of
mannered, urban mystery, homing in on
precise segments of London and excavat-
ing the sinister secrets and motives lurk-
ing below the surface. Over the years she
has manoeuvred her way through death
among the bohemian middle classes of
Holland Park in its hippy days, and vio-
lence in post-property boom red brick ter-
races, skewering the mannerisms and
fads of the capital at the turn of this cen-
tury and beyond.
Now she brings us a tale of sordid mur-
der in a suburban block of flats – a who-
dunit among neighbours. Stuart Font, a
rakishly handsome but naïve young pro-
fessional, decides to throw a housewarm-
ing party and invite the whole block. And
what odd ducks they are: the 60-year-old
| Books
Olwen, merrily drinking herself to death
in a virtually unfurnished flat, the young
doctor with a disastrous career, the vile
caretaker and his wife. The one person he
doesn’t invite is his girlfriend, as she
might invite her husband. Needless to
say, the party doesn’t go as planned,
thanks to a murder – and the guests’
lives will never be the same again.
Living across the road is a beautiful
Asian woman with bruises all over her,
christened Tigerlily by Stuart. As if super-
natural, she emerges to cast a malevolent
spell over the cast of characters. After the
murder, Tigerlily becomes entwined
with Stuart’s cold-hearted girlfriend and
the other inhabitants of Lichfield House.
As ever with Rendell, there are multi-
ple mysteries here, the stories of myriad
displaced souls are all interwoven, from
a young woman drawn into petty crime,
to the curious activities of the Asian
characters. What emerges is a beautifully
constructed answer to the murder mys-
tery.
The scope of this book is huge, but
under Rendell’s control, it’s also razor
sharp and acutely spine-chilling. It’s not
quite perfect – she’s done this for so long
you get the sense that sometimes she’s
writing from an older place, with the
result that the book can feel a bit dated.
All in all, though, you’re in for a treat.
Phillipa Gregory’s The SHADOWPLAY
Cousins’ War series is BY KAREN CAMPBELL
getting better and Hodder, £18.99
better.
hhhii
by ZS
THIS gutsy new book from star-to-be Karen
Campbell is set right in Campbell’s own
stomping ground of Glasgow.
An ex-policewoman herself, Campbell’s
well-drawn star is Anna Cameron, recently
promoted to Chief Inspector in the
Glasgow police. Her new boss is a woman,
but rather than this making Cameron’s
life easier in a traditionally misogynistic
force, she’s wound up with the fearsome JC
Hamilton.
Still, she’s determined to be a brave and
above all, a good cop. But suddenly, every-
thing turns topsy turvy when her mother
goes into a coma in a foreign country and
an old woman disappears from a Glasgow
care-home in deeply suspicious circum-
stances.
The screws only tighten further on Anna
with the gang-related murder of a young
Asian boy and an assault on one of her offi-
cers. All at once, her personal and profes-
sional lives threaten to implode. Can Anna
be both a good cop and a good person? It’s
high time we had a good, gritty British
crime novel by a woman – and here it is.
CITYA.M. 26 AUGUST 2010
GOING
OUT
TIM BADHAM
Take a world
tour in London
bars and clubs
I
T may still be peak holiday season but in
our cosmopolitan capital you can com-
plete a world tour whenever you like by
taking a glamorous (if slightly less exotic)
journey around London’s more exclusive inter-
national nightlife.
Starting with Japan, the chic Kyashii has
just re-launched on Upper St Martin’s Lane
offering a sophisticated, ultra modern hide-
away in which to enjoy your sake. Above
ground you’ll find a sleek white champagne
lounge and glossy, dark mezzanine bar, while
the restaurant rooms downstairs are posi-
tively Bond-esque with wall-to-wall fish tanks
and futuristic lights. No longer Kingly Club-
owned, the new management has introduced
less exorbitant prices with a reasonable
Japanese and pan-Asian menu and after-
work “Shaker” sessions with two-for-one
cocktails. Well worth re-discovering.
To continue on the tour, for further Asian
influence you could drop into Chinawhite,
Taman Gang or even Funkybuddah (with
Buddha Bar recently departed) and for
African influence there is, of course, the new
Shaka Zulu or the Moroccan classic (but
recently refurbished) Momo on Heddon
Street. Representing the Middle East we have
champagne overflowing at Merah on Wells
Street.
Moving to Europe, for France there‘s the
quirky yet stylish Sketch on Conduit Street
and for Italy, Luxx on New Burlington Street,
along with the still achingly trendy Polpo and
its new little sister Polpetto (confusingly on
top of the French House). The champagne bar
at the effortlessly stylish and refreshingly
Icelandic Texture on Portman Square bridges
the mid Atlantic gap.
Meanwhile, American Bar at the Stafford
is best in class for the USA, with Floridita’s
Cuban passion and the Argentinean Gaucho
bars making a showing for South America
(there’s Sushinho on Kings Road too if you
don’t mind Japanese with your Brazilian).
Mahiki and Kanaloa’s tongue in cheek Tiki-
ness take us round to the South Pacific.
Closer to home it’s hard to beat the cigar bar
at Boisdale for Scottish influence and – for
something less formal – the new Platform
down by London Bridge for good old Blighty,
with its local ciders and farm to table feasts.
If you are looking for a
mish-mash of the interna-
tional Jet Set head
for Maddox or
Cuckoo but there
is also the
brand new
Jet Lounge
on Haymarket for
clientele waiting to depart
to the crazy late-night Jet Black
at a very antisocial hour.
We have, of course, skipped
Australia’s lovely Walkabout pubs
which are only for very special occa-
sions, as I’m sure you know all too well.
Tim Badham is the founder of
Innerplace, London’s leading providers of
VIP entertainment, including film pre-
mieres, fashion shows, launch parties and
members club access.
www.innerplace.co.uk.
CITYA.M. 26 AUGUST 2010
David and pre-baby Samantha on holiday in Cornwall.
Should Daddy David
really take leave now?
A couple of fathers-of-two debate the importance of paternity leave
ANDREW WATSON
YES
A P
S experienced a father as
David Cameron may be,
he absolutely needs to be
around in these first
formative weeks not just to
build a relationship with the
baby, but to help his wife and
older children adapt as well.
Crucially, he must establish a
pattern of involvement that
will last long into the future.
Should the situation be dif-
ferent because he’s Prime
Minister? Yes – how can he
pledge to make Britain “the
most family-friendly country in
Europe” without demonstrat-
Picture: PA ing those family values right
now? Those who want him to
lose out on this special time by
remaining at the helm are
short-sighted. Better to hand
over briefly to Nick Clegg than
give rise to the guilt and resent-
ment too often faced by par-
ents in similar situations. I’d
rather the leader of our coun-
try be happy in his own home,
enjoying the stability gained
through sharing parental
responsibilities, than that he’s
turning to public office to
escape the strain of family life.
This is an opportunity for
David Cameron to redefine
himself as a dad while demon-
strating to the world the cru-
cial role that fathers play in the
family. Given what’s waiting
for him at home, I don’t know
why he wouldn’t jump at the
chance to set an example.
Andrew Watson is a commentator on
parenting issues. His guide for new
fathers, Be A Great Dad, is out in
October, and his diary of first-time
fatherhood, Down To Earth With A
Bump, will be published next spring.
Lifestyle | Debate
HARRY OWEN
NO
ATERNITY leave is sup-
posed to be about enjoy-
ing your newborn baby
and helping the mother
out. But in my experience (hav-
ing been through it twice), it’s a
bit different. Mainly, I’ve felt like
a spare part, of little use to any-
one. Paranoid. Restless.
A woman who has just given
birth has no need of the sperm-
donor – she’s got her hands full
enough. Until men grow
breasts, they are pretty irrele-
vant in the very first two weeks.
Mothers and NCT (National
Child Trust) friends are far
more useful, as well as able to
23
talk babies 24/7. Me – I couldn’t
stop looking at my BlackBerry
and I imagine David Cameron is
the same. Then there’s the ques-
tion of who at the office might
be using my enforced absence
to stitch me up.
All of which leaves me won-
dering why I have to take this
“holiday” now – my children,
my wife and I would all rather
paternity leave kicked in six
months down the line.
Caribbean holiday en famille,
anyone?
Cameron refusing to take
paternity leave would lead to
mass disapproval, even though
I’ll bet he’s dying to get back –
at least while he’s in possession
of a BlackBerry. But what peo-
ple don’t understand is that in
refusing his paternity leave
now, he wouldn’t be setting a
bad example. On the contrary,
he’d be showing an astute
understanding of the role and
place of fathers in the child-
birth saga. Harry Owen is com-
mercial director of CityA.M.
 24 Lifestyle | TV& Games CITYA.M. 26 AUGUST 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders; BBC News
8pm CHOICE DIY SOS: The
Big Build – Brynmawr
9pm Mistresses
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10.25pm Regional News
10.35pm FILM The Mexican:
Comedy thriller, starring Brad
Pitt and Julia Roberts. 2001;
Holiday Weatherview
12.35am Sign Zone: Panorama
1.05am Sign Zone: Countryfile
2.05am Sign Zone: Celebrity
MasterChef 3.05am Sign Zone:
n Fogle’s Escape in Time
3.50am-6am BBC News
6pm Eggheads
6.30pm Restoration Roadshow
7pm The Culture Show
at the Edinburgh Festival:
Opera Australia discusses
its production Bliss.
Last in the series.
8pm CHOICE E Numbers: An
Edible Adventure: New series.
Stefan Gates tries to uncover
the truth about food additives.
9pm Digging for Britain
10pm Grumpy Old Men
10.30pm Newsnight: Weather
11.20pm Nurse Jackie
11.45pm Nurse Jackie
12.15am The Culture Show at
the Edinburgh Festival
1.15am BBC News
6pm London Tonight 6pm The Simpsons 6pm The Boss Is Coming to
6.30pm ITV News 6.30pm Hollyoaks Dinner
7pm Emmerdale 7pm Channel 4 News 6.25pm Live from Studio Five
7.30pm Nightmare Tenants: 7.55pm 4thought.tv 7pm Five News at 7
Tonight 8pm Location, Location, 7.15pm Cricket on Five:
8pm Emmerdale Location England v Pakistan.
8.30pm Coronation Street 9pm Hurricane Katrina: 8pm Egypt’s Lost Queen;
9pm Florida – Paradise Lost Caught on Camera Five News at 9
10pm ITV News at Ten 10pm Ultimate Big Brother 9pm The Hotel Inspector
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Barbarian: Fantasy adventure, 12.10am Music on 4: Album Chart
11pm CHOICE Britain’s BRYNMAWR BBC1, 8PM
Show: The Klaxons 12.45am Music New series. Nick Knowles and the team
starring Arnold Ugliest Models
on 4: 4Play: Imelda May 12.55am
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2.55am British Touring Car Brother: Live 4.35am Dispatches: 4.55am County Secrets 5.10am
Championship Highlights 4.15am- When Cousins Marry 5.25am- The New Tomorrow 5.35am-6am
5.30am ITV Nightscreen 6.10am Countdown Michaela’s Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT BBC THREE HISTORY DISCOVERY HOME &
SATELLITE & CABLE

7pm Sky Sports News 7.30pm
ATP Tour Uncovered 8pm Test
Cricket: England v Pakistan.
10pm Time of Our Lives:
Former Arsenal stars
reminisce. 11pm Premier
League World 11.30pm Test
Cricket 1.30am Carling Cup
Football 3am Time of Our
Lives 4am Premier League
World 4.30am-6am Carling
Cup Football
SKY SPORTS 2
6.30pm Race World 7.30pm
Live Greyhound Racing 10pm
Live Poker 12am Race World
1am Show Jumping 2am-
2.30am IAAF Athletix Weekly
SKY SPORTS 3
7pm Live Carling Cup Football
10pm WWE: Late Night – Raw
12am WWE: NXT 12.30am
Golfing World 1am World
Hockey Monthly 1.30am-2am
ATP Tour Uncovered
6.10pm MotoGP 7.35pm Live
UEFA Europa League Football
9.45pm Fight Club 11.15pm-
12.15am World Superbikes
ESPN
6pm Live UEFA Europa League
Football 8.45pm ESPN Kicks
Extra 9pm Motorcycling 10pm
MMA Live 10.45pm ESPN
Premier League Kicks 11pm
Goal! 11.30pm 30 for 30
12.30am Press Pass 2010 1am
Live NFL 4am Superleague
Formula 4.30am-5am Goal!
LIVING
7pm Four Weddings: A Sikh
wedding with a modern twist.
8pm Private Practice 9pm
Criminal Minds 12am CSI:
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Charmed 3am CSI: Crime
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The Jerry Springer Show
4.40am Nothing to Declare
5.30am-6am Home Shopping
7pm Total Wipeout 8pm Young,
Dumb and Living Off Mum 9pm
I Can’t Stop Stealing 10pm
EastEnders 10.30pm The Real
Hustle: Celebrity Scammers
11pm Family Guy 11.45pm I
Can’t Stop Stealing 12.45am
Baby Beauty Queens 1.15am
Small Teen, Big World 2.15am
Total Wipeout 3.10am The Real
Hustle: Celebrity Scammers
3.40am Young, Dumb and
Living Off Mum 4.40am-
5.10am Baby Beauty Queens
E4
7pm Hollyoaks 7.30pm Friends
9pm The Big Bang Theory
9.30pm How I Met Your
Mother 10pm Accidentally on
Purpose 10.35pm Alan Carr:
Chatty Man 11.25pm
Important Things with Demetri
Martin 11.55pm The Big Bang
Theory 12.25am-6am Ultimate
Big Brother: Live
7pm Britain’s Lost Mega- HEALTH
Fortress 8pm Pawn Stars 9pm 7pm Portland Babies 8pm 10
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10pm Decoding the Past 11pm Know I Was Pregnant 10pm I
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the Ancients 2am Britain’s Lost ADVENTURE BBC2, 8PM
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That Work? Answer sign the world’s most pierced woman.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
17 37 7 11 21 11 
9 6 14
24 22   
34 16
Place the numbers from 1 to 9 in each empty cell so that each 17  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 10 11
9 13
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 23 17
 
above or to the left of it. 35 28
9 16 
You can only use the digits 1-9
   and you must not use the
15 20
13 29   
same digit twice in a block.
  The same digit may occur 32
8
4  
6
    more than once in a row or
column, but it must be in a 22
13
11 14
15
 

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13
11
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8 33
  16 5 3
 

    ACROSS DOWN
1 Divisible by two (4) 1 Hinge joint in
   
  WORDWHEEL E M
3
6
Less common (5)
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the arm (5)
2 Not any (4)
Using only the letters in the Wordwheel, you have 7 Edible leguminous seed (4) 3 People sent to locate
   ten minutes to find as many words as possible,
A S 9 Might, possibly (3)
and help others (8)
4 Setting straight
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A 10
12
Fiasco (7) or right (9)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
S R 13
Came first (3)
Gaming cube (3)
5 Be similar in end
sound, eg cat
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
D C 14 Sport of shooting arrows and mat (5)
with a bow (7) 8 Latin phrase:
QUICK CROSSWORD 15 Feverish cold (3) done so often that
SUDOKU
8 9 3 7 1 3 8
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         16 Vex (3)
7 1 4 6 5 9 8          tiresome (2,7)
2 2 & 5 $ 9 $ 7
1 5 1 2 2 7 1 18 Cowboy’s hat (7)
/ 8 6 7 $ 5 &          11 Unmarried man (8)
2 7 3 5 $ 1 & ( 5 4 3 2 6 9 1
         20 Source of metal (3)
6 3 ( / / 8 $ 7 ( 2 6 1 9 2 9 7 8 15 Drift on water (5)
         21
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Finished (4)
17 Item of cutlery (5)
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7 4 8 9 1 3 1 The nine-letter word          19 Yours and mine (4)
9 $ 7 $ % / (
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 Sport
25
‘WE WANT REAL MADRID AND
INTER MILAN’
CROUCH COURTS EURO GIANTS AFTER
MAKING TOTTENHAM HISTORY: P27

Injury hits Borthwick England hopes

▲
RUGBY UNION
BY FRANK DALLERES
FORMER England captain Steve
Borthwick’s prospects of returning
to the national team this autumn
have diminished after he tore a
thigh muscle.
The Saracens skipper is expected
to be sidelined for three weeks by
the quadriceps injury, meaning he
will miss their first two matches of
the new Premiership season.
Borthwick will sit out the opener
against London Irish, which takes
place at Twickenham as part of the
traditional London double header
on 4 September, and the visit of Sale
the following weekend.
That spell in the treatment room
will not help Borthwick fight his
way back into the England set-up
for the autumn internationals.
The 30-year-old lock forward was
surprisingly omitted when England
manager Martin Johnson named
his 32-man elite performance squad
last month. That was despite cap-
taining the team for the first 20
Tests of Johnson’s tenure.
Injury ruled him out of the sum-
mer tour Down Under, where Lewis
Moody impressed as skipper, while
locks Tom Palmer, Dave Attwood
and Courtney Lawes also advanced
their claims.

Alastair Cook boosted his confidence with a century in the last Test. Picture: ACTION IMAGES

Strauss: Our
batsmen will
shine at Lord’s
▲

CRICKET of reasonable innings but I missed out

BY MARTIN CAPARROTTA
CAPTAIN Andrew Strauss has vowed to
lead by example when England take on
Pakistan in the series showdown at
Lord’s this morning.
The hosts’ batting line-up has come
under scrutiny following two collapses
during their four-wicket defeat at the
Oval last week as Pakistan kept the
series alive at 2-1.
But Strauss is keen to help his side
avoid a repeat of events in the third
Test as England aim to finish the sum-
mer on a strong note ahead of their
Ashes tour of Australia this winter.
“I would like to have scored more
runs than I have done this series, clear-
ly,” said the England skipper, who has
recorded 142 runs in six innings
against Pakistan.
“But it has been tough for the open-
ing batsmen, and the ball has been
swinging around. I would like to get a
score both as a batsman and as a cap-
tain to lead by example.
“I’ve had a couple of starts, a couple
at the Oval. I generally enjoy batting at
Lord’s so hopefully there’s a good score
there for me.”
England opener Alastair Cook’s posi-
tion at the top of the order was under
scrutiny going into the last match but
he silenced his critics with a confi-
dence-boosting century in the second
innings.
And Strauss, 33, believes dips in form
are simply part of the life of any bats-
man.
“Just as I said about Alastair Cook, as
batsmen you are not going to score
runs every time you bat – otherwise
your name would be Don Bradman.
“You’ve got to realise there are going
to be games when things don’t go your
way. The key is that when you get in,
you cash in.”
Meanwhile, Pakistan captain
Salmaan Butt has set his sights on level-
ing the series at Lord’s.
“I think it would be the most won-
derful thing,” said Butt. “To come from
2-0 down to level the series would boost
confidence for the rest of our futures.”

SPORT | IN BRIEF
Monty: Westwood fit for Ryder
GOLF: European Ryder Cup captain Colin
Montgomerie insists world No3 Lee
Westwood will be fit in time for the Ryder
Cup in October.
Europe’s top player is currently recover-
ing from a torn calf muscle he picked up in
June, but Montgomerie has guaranteed his
participation at Celtic Manor – even if
Westwood is unable to play any competi-
tive golf before the match.
Semenya runs at Commonwealths
ATHLETICS: World 800m champion
Caster Semenya has been named in the
South Africa team for October’s
Commonwealth Games in Delhi following
her return to competition last month.
The 19-year-old, who was out of action
for almost a year while gender tests were
concluded, won her first two comeback
races in Finland and Germany last month
and also triumphed in Berlin on Sunday.
 26 Sport CITYA.M. 26 AUGUST 2010

Results
UEFA CHAMPIONS LEAGUE
PLAY-OFF SECOND LEG
Tottenham ...................(2) 4 Young Boys .......................(0) 0
Crouch 5, 61, 78 (pen)
Ferdinand defends Capello
and lambasts fickle critics
Defoe 32 Att: 34,709
Agg: 6-3.
Ajax...................................(1) 2 Dynamo Kiev...................(0) 1
Agg: 3-2.
Auxerre ..........................(1) 2 Zenit St Petersburg....(0) 0
Agg: 2-1.
FC Copenhagen.........(1) 1 Rosenborg.........................(0) 0
Agg: 2-2; FC Copenhagen win on away goals rule.
MSK Zilina....................(1) 1 Sparta Prague................(0) 0
Agg: 3-0.
CARLING CUP SECOND ROUND
Accrington St.............(1) 2 Newcastle ..........................(1) 3
“Before the World Cup he
Putterill 45 Taylor 36
Hessey 90
Att: 4,098
Ameobi 48
Lovenkrands 67
was the best thing since
Everton...........................(2) 5 Huddersfld.........................(1) 1
Fellaini 7, Rodwell 14
Beckford 50 (pen), Saha 77
Heitinga 40 (og) sliced bread,” reasons
Osman 85 Att: 28,901
Fulham............................(4) 6 Port Vale ............................(0) 0
Gera 10, 45
vexed England skipper
Dembele 26
Zamora 36, 66
Dempsey 70 Att: 9,031
▲

CRICKET FOOTBALL
LV COUNTY CH’SHIP - DIV ONE (Edgbaston); Essex 90-7 v BY FRANK DALLERES
Warwickshire.(Trent Bridge); Lancashire 319 (S
Chanderpaul 92, A R Adams 6-79, R J Sidebottom 4-79) v ENGLAND captain Rio Ferdinand has
Nottinghamshire 178-4 (53.0 overs). (Taunton); Somerset leapt to Fabio Capello’s defence, insist-
287-4 (81.0 overs) (M E Trescothick 128). v Durham. No play ing the head coach’s critics have been
Wednesday due to rain. (Scarborough); Yorkshire 322-9 dec.
(A U Rashid 76, A Lyth 63, D G Cork 5-64) v Hampshire 367- too quick to turn against him.
3 (99.0 overs). DIV TWO: (Derby); Middlesex 228-3 (61.0 Capello was widely depicted as the
overs) v Derbyshire. (Northampton); Northamptonshire 96- steely general England’s cosseted
3 (34.5 overs) v Worcestershire. (Grace Road); Surrey 483
(M R Ramprakash 179, G C Wilson 125, J J Roy 76, C W underachievers needed during an
Henderson 4-119) v Leicestershire 32-0 (12.2 overs). unerringly successful march to the
CLYDESDALE BANK 40 - GROUP A: Sussex v Glamorgan World Cup finals.
(Hove); Match abandoned, rain, 1pt each. But his stock has fallen off a cliff fol-
lowing a disastrous tournament in
TODAY’S DIARY South Africa, and his decision not to
(Football 7.45pm unless stated) step down only appears to have
UEFA Europa League Play-off Round Second Leg enraged his detractors further.
AEK Athens (1) v Dundee Utd (0) (7pm) .......................................................... The Italian’s popularity in the Press
Aston Villa (1) v Rapid Vienna (1)........................................................................
FC Utrecht (0) v Celtic (2) (7.30) ........................................................................ plummeted to a new low yesterday
Man City (1) v FC Timisoara (0) .......................................................................... when one newspaper portrayed him as
Motherwell (1) v Odense BK (2) .......................................................................... a donkey – complete with photo-
The New Saints FC (0) v CSKA Sofia (3) (7.35) ............................................ shopped ears – alongside a scathing Capello has come under fresh fire for dropping youngster Jack Wilshere. Picture: ACTION IMAGES
Trabzonspor (0) v Liverpool (1) (6.30) .............................................................. report on his latest squad selection.
Carling Cup 2nd rnd
Birmingham v Rochdale............................................................................................ “You don’t become a bad player the Godfather, Don Fabio and what- Jack Wilshere and overlooking the Ferdinand added: “It is up to him who
overnight and I don’t think all of a sud- not. claims of Andy Carroll and Jack he picks and who he feels is right for
CRICKET den our manager became a bad man- “Now they have changed course. Yes, Rodwell, despite pledging after the the squad.
Fourth Test Match—day 1 of 5: England v Pakistan (Lord’s). ager overnight,” said Ferdinand, who we didn’t play well at the tournament, World Cup to blood new talent. “If he sees it right to make changes,
GOLF missed the World Cup through injury no-one is getting away from that. But All three have been named in the who are we to argue as players? We are
European Tour: Johnnie Walker Championship at Gleneagles and will not return for several weeks. that doesn’t make him a bad manager Under-21 squad, meaning they will just out there to go and do a job.
(The Gleneagles Hotel, Perthshire, Scotland). “Before the tournament he was the overnight, and I think a lot of people miss the senior team’s first Euro 2012 “It’s all about England winning, it is
best thing since sliced bread, we quali- are probably jumping the gun.” qualifier against Bulgaria on 3 not about individuals. And if that
SPORTS EDITOR JON COUCH fied in great style. All of these so-called Capello has come under renewed September. means some people have to be disap-
email sport@cityam.com people in the know were saying he is fire this week for dropping youngster But Manchester United defender pointed by being dropped, so be it.”

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And her twice-weekly routine has
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and it helps me maintain it.”
Sign up your office for the Garmin
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www.garmin4milechallenge.co.uk. Holly has shaved four minutes off a route that takes in St Paul’s. Picture: GETTY

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CITYA.M. 26 AUGUST 2010
Hat-tricks for London and Crouch
as Tottenham revel in historic night
TOTTENHAM
6-3 on aggregate
4 Teams prepare to
YOUNG BOYS 0 learn fate in Euro
▲
CHAMPIONS LEAGUE PLAY-OFF
BY FRANK DALLERES
TOTTENHAM finally took their place
at the top table of European football
last night – and ensured London has
three clubs in the Champions League
for the first time – but all manager
Harry Redknapp wanted by way of
celebration was a bacon sandwich.
A hat-trick from Peter Crouch and
a goal from strike partner Jermain
Defoe emphatically overturned
Young Boys’ slender first-leg advan-
tage and guaranteed Spurs a place in
the group stage for the first time in
the competition’s history.
Victory rained joy onto a sodden
White Hart Lane and earned the club
a £20m windfall as Redknapp
became the first man to lead the club
into the European Cup since the icon-
ic Bill Nicholson in 1961.
But the east Londoner, whose team
join Chelsea and Arsenal in the last
32, shunned a night of champagne-
fuelled jubilation that few would
have begrudged him in favour of
more homely, quintessentially
English treats.
“I will probably just go home, have
a bacon sandwich and a cup of tea,
that is all I want,” he said. “I always
felt it was possible. Tottenham were a
club which had underachieved for a
long time.”
A third London team in the group
stages will increase hopes that a side
from the capital can lift the
European Cup for the first time – par-
ticularly with the final in May to be
played at Wembley.
But hero Crouch is only looking as
far as the next round, and is eager to
test himself against the continent’s
elite. “That’s why we worked so hard
last season,” he said. “We want mas-
sive games. We want Real Madrid and
Inter Milan.”
Defoe admitted controlling the
ball with his arm before driving
Spurs’ second goal in off the post. “It
was handball for my goal, yes,” he
said. “The linesman didn’t see it,
Magpies dodge giant-killing as ruthless
Fulham and Everton show no mercy
ACCRINGTON 2 the two teams went in level at half-
TL
EU
NI
NEWCASTLE 3 Shola Ameobi needed less than
▲
CARLING CUP
PREMIER League heavyweights
Newcastle needed a second-half resur-
gence to avoid an upset at League Two
Accrington.
Ryan Taylor looked to have put the
underdogs in their place when his
long-range strike gave an under-
strength Magpies side the lead late in
the first half. But a spectacular
Crouch (left) scored a hat-trick while Bale (right) laid on three goals as Spurs eased past their Swiss opponents.
though, and sometimes it goes your
way.”
Winger Gareth Bale was outstand-
ing, setting up three goals, including
Crouch’s first inside five minutes.
Nerves settled, Defoe added a sec-
ond before half-time and Crouch
ended the contest by meeting Bale’s
corner on the hour. A trip on Bale
earned Senad Lulic a red card and
allowed Crouch – the man whose goal
against Manchester City secured
Tottenham’s place in the top four – to
complete his hat-trick with a penalty.
equaliser from Ray Putterill ensured
time and revived a raucous home
crowd’s hopes of a giant-killing.
three minutes of the second period to
reassert Newcastle’s superiority with
a low shot, however, and Peter
Lovenkrands tapped in a rebound to
extend the lead on 67 minutes.
Putterill saw another effort cleared
off the line and Sean Hessey lashed
home a second for Stanley deep into
stoppage time, but the home side had
to settle for a gallant second-round
defeat.
England striker Bobby Zamora and
Zoltan Gera both netted doubles as
Capital clubs’ feat is rare achievement
LONDON is only the second city ever to
boast three teams in the Champions
League group stages in the same sea-
son. The last time the feat was man-
aged was in 2003-04 when Athens
was represented by Olympiacos,
Panathinaikos and AEK.
Sadly, however, it proved a season
Fulham routed League Two Port Vale
6-0 at Craven Cottage. Recent signing
Moussa Dembele notched his first for
the Premier League club, who made
just three changes from the weekend,
while Clint Dempsey completed the
scoring.
Everton also enjoyed easy progress
to round three, with a 5-1 win over 10-
man Huddersfield.
Marouane Fellaini, Jack Rodwell,
Jermaine Beckford, Louis Saha and
Leon Osman all struck against the
League One side, who had Lee Peltier
sent off for a second yellow card. But
Toffees defender Johnny Heitinga had
a night to forget, scoring an own goal
and then missing a penalty.
Sport | Football 27
group stage draw
CHELSEA, Manchester United and
Arsenal will all be among the top
seeds when the draw for the
Champions League group stage takes
place this afternoon.
That will see them avoid big-hitters
such as Barcelona, Bayern Munich,
AC Milan and reigning champions
Inter Milan, who will also be in Pot
One when the groups are decided in
Monaco at 5pm BST.
Tottenham will be drawn from Pot
Three, meaning they will not play
Rangers or the likes of Ajax, Schalke
and Spartak Moscow.
But the team everyone will want to
avoid is Jose Mourinho’s Real Madrid,
who look to be the strongest team in
Pot Two.
Teams cannot be drawn against
other from the same pot or the same
country, so Spurs cannot face any of
their Premier League rivals until the
knockout stage.
The seedings are based on a rank-
ing system calculated using perform-
ances in continental competition over
the last five seasons.
Pot One
Inter Milan Barcelona
MAN UTD CHELSEA
ARSENAL Bayern Munich
AC Milan Lyon
Pot Two
Picture: GETTY Werder Bremen Real Madrid
Roma Shakhtar Donetsk
Benfica Valencia
Marseille Panathinaikos
Pot Three
TOTTENHAM Rangers
to forget for the sides from the Greek Ajax Schalke
capital after all three failed to make it Basle Braga
past the group stages. FC Copenhagen Spartak Moscow
Panathinaikos were the only one of Pot Four
the trio able to avoid bottom spot in Hapoel Tel Aviv FC Twente
their group. Olympiacos were drubbed Rubin Kazan Auxerre
7-0 by Juventus while AEK earned just CFR Cluj Partizan Belgrade
two points and scored only one goal. MSK Zilina Bursaspor
EUROPA LEAGUE | IN BRIEF
No Gerrard or Torres for Reds ly yesterday in training and
LIVERPOOL are without key trio Steven then declared him not for sale.
Gerrard, Fernando Torres and Javier “I have been able to see Jo close up in
Mascherano for tonight’s tricky trip to the last two months and what I have
Trabzonspor. seen makes me think he’s a good player,”
Captain Gerrard has a back injury and said the Italian, whose team won the
Torres is rested as a precaution, while play-off first leg 1-0 in Romania. “We
Mascherano remains omitted amid spec-
ulation about a move to Barcelona.
want to keep him.”
“It’s going to be a very tough ask for MacDonald not deterred by rout
the players in a difficult place,” said
Hodgson, whose side hold a 1-0 lead
ASTON VILLA caretaker boss Kevin
MacDonald insists Sunday’s 6-0 mauling
from the play-off first leg. “They’re a hos-
at Newcastle has not put him off taking
tile and fanatic crowd and it’s a difficult
the job permanently.
pitch. But if we come through it we’ll MacDonald maintains he will only
come through it stronger.” decide whether to put himself forward
after tonight’s visit of Rapid Vienna and
Mancini decides to keep Jo the weekend fixture with Everton.
MANCHESTER CITY outcast Jo has “It hasn’t changed my stance,” he said.
been welcomed in from the cold by man- “Whether it’s damaged my opportunity,
ager Roberto Mancini and could start I’ve not thought of it as that yet.”
tonight’s visit from Timisoara. Villa drew 1-1 in Austria and are with-
The Brazil striker had looked sure to out Stewart Downing, Stephen Warnock
be sold, but Mancini used him prominent- and Richard Dunne for the return leg.