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HOLIDAY p11
BUSINESS WITH PERSONALITY
Issue 1,276 Thursday 2 December 2010 www.cityam.com FREE
FED’S $3 TRILLION
IN EMERGENCY AID
Ben Bernanke: Banks and firms
used our temporary liquidity facili-
ties 21,000 times during the crisis
FINANCIAL SERVICES three-month funding emphasising the
▲
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2 News CITYA.M. 2 DECEMBER 2010
WIN
www.cityamsurvey.com for the chance to
The details suggest manufacturing The truth, of course, was much more opportunities for exporters and inter- a truly amazing
output is surging at a quarterly rate of upbeat; King was also wrong. The national firms are greater than ever. week-long holiday
1.2 per cent, the best performance in “anemic” nature of global growth, has The trouble is that the private sec-
ages. Economists have been guilty of in fact been extremely strong thanks tor is in other ways in a weaker posi- FOR TWO
TO ONE OF SANDALS’ LUXURY INCLUDED ® RESORTS IN BEAUTIFUL SAINT LUCIA
excessive pessimism since the recov- to emerging markets. tion than it was in the early 1990s, today’s somewhat depressed climate,
ery began – just as they were guilty of What about next year? The Office largely because there is now much we realise that the chance to win a
brilliant holiday in the sun is just what
the doctor ordered.
So everybody who fills in the sur-
vey will be entered into a draw for an
all-inclusive trip for two to one of
excessive optimism in the dying days for Budget Responsibility’s growth more regulation and higher taxes. EDITOR’S LETTER
ALLISTER HEATH
Sandals' Luxury Included resorts in
beautiful St Lucia, a package which
includes return flights
(see terms and conditions below;
heartfelt thanks to the company for
of the bubble. forecast of 2.1 per cent is eminently London is less competitive; institu-
making this amazing prize possible).
IT is that time of the year again. To add further spice to the survey,
Today, City A.M. begins our annual we will also be entering survey par-
readership survey. As a quality news- ticipants into a daily draw to win a
paper provided free of charge, it is bottle of Bollinger.
important for us to understand who We reached our highest ever audit-
EDITOR’S LETTER Even Mervyn King misjudged the plausible. But it is worth highlighting tions are relocating elsewhere. our readers are and what you think of ed circulation in October 2010 and
us, and this survey is one of the main have very ambitious plans for the
vehicles we have to achieve this. future. We are by no means finished
We know that many of our growing improving the paper and we are very
band of readers will be keen to help – keen to hear any thoughts or sugges-
and spend just a few minutes filling in tions you may have.
rate at which the economy would that its official forecast that growth Manufacturing is bouncing back but
ALLISTER HEATH
our very simple and straightforward Thanks for reading City A.M., thank
survey at www.cityamsurvey.com – but you for your loyalty and we look for-
as good capitalists here at City A.M. we ward to receiving your feedback at
also believe in incentives. And in www.cityamsurvey.com
recover in 2010. The US embassy cable will average 2.4 per cent per year dur- only for cyclical reasons; competition www.cityamsurvey.com
dated 17 February released by ing 2010-14 is much lower than the 3.4 is continuing to intensify as emerging
FAR from slowing down, Britain’s
recovery is intensifying. Yesterday’s
economic data was remarkably good,
WikiLeaks and which created a fuss
yesterday as a result of King’s criticism
of David Cameron and George
per cent achieved over 1994-98, accord-
ing to figures from Henderson,
despite fiscal retrenchment on a simi-
economies become better at produc-
ing valued-added goods and services.
The real domestic risk, however, is
WIN A
with the purchasing managers’ index
(PMI) suggesting that manufacturing
is now growing at its fastest rate since
Osborne’s inexperience also con-
tained an intriguing passage on the
jobs situation. The private sector has
lar scale. In theory at least, the UK
could grow much faster than anybody
is expecting. That concerns about
that interest servicing costs will surge
much faster than anybody expects.
Each percentage point rise in interest
HOLIDAY
1994. Manufacturing accounts for created well over 300,000 extra jobs credit supply are starting to wane is rates and inflation will raise debt www.cityamsurvey.com
under nine per cent of UK employ- this year, the majority of which were another plus – many wrongly predict- interest spending in 2015-16 by
ment but remains vital to exports,
despite the growth in recent years of
part-time but a large number full-
time, yet this was what the US was
ed that weak credit would drag down
the previous recovery in the 1990s, fol-
£10.7bn, or 0.6 per cent of GDP. Who
could cope with mortgages at seven or TAKE PART
financial and business services.
The survey once again shocked
briefed: “Businesses will cut jobs faster
this year and eliminate many part-
lowing a hit to banks’ capital.
Company finances are in better
eight per cent in three years’ time?
Strong growth means higher interest IN OUR
many “experts” – the consensus was
for a drop in the PMI survey yet the
time positions, as employers realise
that the economic recovery will be a
shape. Households have been insulat-
ed by low interest rates, resulting in
rates – and a return to reality guaran-
tees trouble ahead. SURVEY: P11
actual figure shot up from 54.9 to 58. long, drawn-out process, said King.” fewer arrears and repossessions. The allister.heath@cityam.com
Optimism for
ANALYSIS l Dow
11,255.78
11,600 01 Dec
7th Floor, Centurion House,
24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334 11,200
US recovery
Email: news@cityam.com www.cityam.com
Editorial 10,800
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
10,400
Night Editor Katie Hope
Business Features Editor Marc Sidwell
consumer spending. “Households 13 Sep 1 Oct 21 Oct 10 Nov 1 Dec
US ECONOMY
▲
to improve, on balance” from Overall, however, the report was per cent, to 2,549. A US official con-
early/mid-October to mid-November. cautiously optimistic. “Anecdotal BY MATTHEW WEST firmed there had been talks with the
Distribution helpline Manufacturing activity continued reports of the districts suggest that European Commission about possibly
If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email to grow in “almost all” districts, activity, on balance, has accelerated US stocks leapt yesterday on news enlarging the €750bn (£630bn) EU
distribution@cityam.com reflecting optimistic results from yes- modestly,” said Michael Gapen of that America could be ready to sup- IMF stability fund adding that
terday’s ISM manufacturing index. Barclays Capital Research. port the extension of the European although it was a decision for Europe
Editorial Statement The beige book found positive MANUFACTURING BOUNCES BACK: P14 Financial Stability fund by providing the US would support using the IMF
This newspaper adheres to the system of signs for employment. “Hiring activi- extra money to the International in such circumstances. The remarks
self-regulation overseen by the Press Complaints ty showed some improvement across Ben Bernanke’s Federal Monetary Fund (IMF) came before a visit to Europe this
Commission. The PCC takes complaints about the most Districts,” it said. The Dow Jones Industrial Average week by a US Treasury envoy who is
editorial content of publications under the Editor’s Reserve offered some
Code of Practice, a copy of which can be found at And expectations for the holiday surged 249 points, or 2.27 per cent, to expected to visit Berlin, Madrid and
www.pcc.org.uk season are high, “with several dis- hope for the US close at 11,255, while the Standard & Paris to hold talks about the debt cri-
Printed by Newsfax International,
tricts expecting higher sales when recovery in its beige Poor’s 500-stock index gained 25 sis. The IMF has committed €250bn
Beam Reach 5 Business Park, compared to year-ago levels.” book for November. points to 1,206, and the Nasdaq to the fund already.
Marsh Way, Rainham, Essex, RM13 8RS Yet there was also bad news for Composite added 55 points, or 2.05 EUROZONE:P4-P5, MARKETS: P21
Number 10 is
BarCap to cut relaxed over
hundreds of King doubts
▲
POLITICS
London jobs
BY DAVID CROW
DOWNING Street yesterday insisted
the Prime Minister was perfectly
relaxed about disparaging comments
made by Mervyn King.
Before the election, King told the
US ambassador that David Cameron
▲
BANKING globally. The firm had already cut and George Osborne were inexperi-
BY JULIET SAMUEL 300 jobs in August but overall added enced and relied too heavily on a
2,000 workers in the first half of small number of advisers, according
BARCLAYS Capital has confirmed 2010 to fill places in its new equities Commuters struggle into work yesterday Picture: PA to cables released by the WikiLeaks
plans to shed hundreds of jobs in its advisory division. foundation.
to reduce its headcount, a process finance jobs are overall being added BY MATTHEW WEST nificant disruption, delays and can- Bank of England governor’s com-
only required if a company plans to in London, the Asian job market is cellations. Meanwhile Southeastern ments. Asked if King was doing a good
cut more than 100 workers. much more vibrant. “The UK is fail- SNOW caused chaos around the UK trains, which runs services out of job, the spokesman replied “yeah”.
The firm has had a difficult year, ing to keep pace with global rival, yesterday as road, rail and air services London Victoria and Charing Cross However, shadow defence secretary
with revenues dropping off in a slow Singapore,” said Hedger, pointing to were disrupted. Weather forecasters said it was operating an emergency Jim Murphy voiced concern, saying he
market for investment banks. Its the market for skilled accountants. said temperatures were set to freeze timetable today and that services will “has to take great care” with his opin-
income was down 14 per cent in the “In Singapore [it] is burning white- overnight once again marking one of finish early. ions.
third quarter to £2.8bn, having hot: the average salary rise has hit 20 the coldest starts to December in Also, half of Eurostar services Danny Blanchflower, a former
already fallen 15 per cent during the per cent this year, although we have more than 20 years. between London and Brussels today member of the Monetary Policy
previous quarter. seen rises of 50 per cent offered to Gatwick Airport, which was closed have been cancelled, as have seven Committee and persistent critic of the
However, the UK office is the only tempt departing accountants to stay today because of the cold snap, said it out of 17 services each way between governor yesterday called for King to
one currently slated for job cuts at the firm,” he added. would be at least 10am today before London and Paris. resign.
4 Eurozone Debt Crisis CITYA.M. 2 DECEMBER 2010
First Eurozone
bonds go on ANALYSIS l Euro - dollar
USD/
EUR
1330
1310
1300
WORLD ECONOMY
that markets should not “underesti- ANALYSIS l 10 year government bond
BY JULIET SAMUEL Basis yields over German bunds
mate the determination of govern-
points
THE Eurozone is to issue its first ever ments” to save the euro and EU Greece
region-wide bonds in January 2011, officials have been anxious to demon- Spain
800 Ireland
said Klaus Regling, head of the strate that they are prepared to con- Portugal
European Financial Stability Fund sider radical measures to shore up the 600
(EFSF), yesterday. single currency. The comments by the
Klaus said that the €440bn (£370bn) EFSF’s Klaus were quickly followed by 400
bailout fund, which was set up in May indications by the US government
after the Greek rescue, would sell that it would willingly contribute to 200
€5bn-€8bn’s worth of debt with an an expanded EFSF via the Source: Thomson/Reuters
average maturity of 7.5 years. “If every- International Monetary Fund. “It is up
2009 Jan 2010 Apr Jul Oct
thing goes to plan they will make a to the Europeans. We will certainly
profit,” he said, speaking during a support using the IMF in these cir- ANALYSIS l 2011 share of Eurozone
visit to Singapore. The fund currently cumstances,” an unnamed US official gross sovereign debt
has a triple-A rating. said. The euro saw its first rally since Portugal (1.7%)
The bond issue heralds an unprece- the Irish bailout after his remarks, Ireland (1.8%)
Greece (4%)
dented move towards a single debt moving over $1.31 versus the dollar. Spain 9%
market for the Eurozone at a time
when many are discussing the possi- FAST FACTS | EFSF
bility of a euro break-up. 23% 61%
Peripheral Eurozone government ● The European Financial Stability Fund (EFSF) Italy *Other
bond yields are at record highs, but is a sovereign bailout fund created in May using Europe
the EU is clearly hoping that the cre- funds from Eurozone members. *Germany, France,
ation of a single euro bond will send a Netherlands, Belguim, Austria,
● It will issue €5bn-€8bn’s worth of bonds Finland, Luxembourg Source: Thomson Reuters,
strong signal to punitive markets. early next year, with average 7.5 years maturity.
OECD Economic Outlook
European Central Bank President
CITYA.M. 2 DECEMBER 2010 Eurozone Debt Crisis 5
▲
WORLD ECONOMY
EMERGENCY overnight borrowing
from the European Central Bank
es’ business. It also announced plans (ECB) rose to just under €2.5bn
▲
WORLD ECONOMY
BY MATTHEW WEST to privatise 30 per cent of its state lot- (£2.1bn), figures showed yesterday, as
bond purchases slightly in recent tery. Eurozone debt fears continued to dom-
▲
WORLD ECONOMY
weeks and on Tuesday, ECB president THE Spanish government said yester- Spain’s biggest airports, Madrid inate the mood in financial markets.
BY JULIET SAMUEL Jean-Claude Trichet suggested that it day it planned to part privatise air- and Barcelona, would be run private- Banks usually refrain from using
THE European Central Bank (ECB) is might scale up its activities. ports operator AENA, which could be ly under operating concessions, the ECB’s overnight borrowing facili-
expected to announce a resumption of Many suspect the ECB has already worth up to €30bn (£25.3bn), as a way Prime Minister Jose Luis Zapatero told ty because the interest rate is 0.75 per
its special government bond-purchas- increased its intervention in second- of reducing its national debt. parliament. cent higher than the one per cent
ing programme today in a desperate ary bond markets, for example during The government said it would No decision has yet been made that cash is available on offer at its
bid to stop the spread of the sovereign yesterday’s auction of Portuguese debt. allow private companies to take about whether the part privatisation main refinancing operation.
debt crisis in its tracks. Evolution Securities’ Elisabeth Afseth stakes of up to 49 per cent in the will take the form of a financial part- It is typically well above market
But the markets are likely to be dis- said it “wouldn’t be a surprise if they country’s airports and airport servic- ner, or a stock market listing. rates.
appointed by the scale of its interven- had bought paper ahead of the auc-
tion, with most analysts saying that tion”.
the ECB would have to buy gilts on the The auction saw strong demand, for
scale of the Federal Reserve’s $600bn €500m of 12-month debt, but Portugal
(£384bn) quantitative easing pro- was forced to pay an unprecedented
gramme to halt the euro contagion. premium for the cash. Yields rose to
Capital Economics’ Jennifer 5.3 per cent, versus 4.8 per cent just a
McKeown said: “Its purchases have fortnight ago.
been really small compared to sover- Most observers view these soaring
eign financing needs. To really make a sovereign borrowing costs as unsus-
difference, it would probably need to tainable for the Eurozone’s peripheral
purchase about €500bn – seven times members. However, unlike the Fed,
the size of its purchases so far.” the ECB is only permitted to buy sover-
The ECB has reluctantly stepped up eign debt in the secondary market.
Chief operating
HSBC spins off officer at News
Asian private Int steps down
equity unit
▲
MEDIA
BY STEVE DINNEEN
NEWS International chief operating
officer Clive Milner has been placed
on gardening leave after a shake-up
led by chief executive Rebekah
Brooks.
▲
BANKING The biggest of the five private equi- He will formally leave the firm
BY MATTHEW WEST ty businesses being spun out of the early next year after more than 30
bank is HSBC Specialist Investments years. City A.M. understands his role
HSBC’s Asian private equity unit has in the UK, which manages some $4bn Alliance Trust boss Katherine Garrett-Cox (l) and Burberry chief Angela Ahrendts Picture: PA became superfluous to requirements
been taken over in a management of assets, mostly in infrastructure and when Brooks reshuffled her executive
units in the UK, US, Canada and ANALYSIS l HSBC 656.20 BY MATTHEW WEST UK was to improve female representa- sumer-facing sales. He played a key role
Middle East. p 01 Dec tion on company boards. in the development of News
Headland’s management team will 690 BUSINESS groups reacted with disap- “Clearly some level of intervention International’s print plants at
own 80.1 per cent of the firm with pointment to the news that only 12.5 from government is needed, whether Broxbourne, Knowsley and Eurocentral.
680
HSBC holding the rest. per cent of FTSE 100 company board it is the Australian-style ‘comply or
The bank is keeping hold of its 670 directors were women yesterday. explain’ system or the more directive Chief operating
investments in Headland’s funds. The Penny de Valk, chief executive of system of quotas,” she said.
firm, which raised a $1.47bn fund in 660 the Institute of Leadership & Meanwhile, Katja Hall, director of
officer Clive Milner
2008, invests $40m-$150m for control- Management, reacted to research employment policy at the CBI, said will leave News
650
ling or minority stakes in companies from Cranfield University saying gov- while companies were already taking International after
based in greater China, South Korea, ernment enforced quotas were by no steps to boost the number of female more than 30 years.
south-east Asia and India. 15 Sep 14 Oct 12 Nov means an ideal solution but would directors “more needs to be done.”
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CITYA.M. 2 DECEMEBER 2010 News 7
NEWS | IN BRIEF
▲
FINANCIAL SERVICES
BY THOMAS HAMED the Great Depression, the proposal swap agreements.
Final Standings THE US futures regulator unveiled
defined which firms will be subject to
capital and margin requirements as
The law also defines a “major swap
participant”, or firms with large swap
yesterday a key piece of its plan to swap dealers and major swaps partic- positions.
The competition is over and a big congratulations to jasonkhan a deserving winner who has been toughen rules on trading in the vast ipants. The law also gives major swap par-
around in the top 10 since the first week. jasonkhan managed to make over £340,000 in just over swaps market, making clearer which An exempt commodity must have a ticipants status to participants with
four weeks, well done! We also have to credit alonsove who chased him all the way swapping posi- firms will have to set aside more book value less than $100m (£64m), “substantial counterparty exposure”
tions regularly. Thanks to everyone who played, we hope you enjoyed it. funds to cover their deals. have fewer than 15 swap counterpar- that may cause economic risk.
After last-minute wrangling that ties, and less than 20 swaps as a deal- Congress meant this clause to
User Name Account Value % Difference underscored the strain facing agen- er in less than a year. avoid a repeat of AIG’s failure, caused
cies trying to implement the biggest It is expected that only certain by swaps and high leveraging.
1 jasonkhan £350,017.63 3400
2 alonsove £292,399.03 2824
3 urosbric3 £131,317.12 1213
4 garnz123 £93,159.05 832
5 ragbull1 £90,185.77 802
6 sbwilliams £88,629.21 786
7 paulmh £59,237.25 492
8 1winner2day £47,761.02 378
9 rhona45 £34,892.18 249
10 patial_naveen £31,549.36 215
To register and see the full standings, visit www.intertrader.com/champion
CITYA.M. 2 DECEMBER 2010 News 9
▲
ENERGY
stood at €3.4bn, resulting in a book gic investments. The sale of our
BY MARION DAKERS gain of around €2.5bn. Gazprom stake does not alter our
GERMAN energy giant E.ON has sold The sale is part of E.ON’s aim of gen- Russia strategy,” said E.ON chief execu-
its 3.5 per cent stake in Russian gas erating €15bn (£12.6m) over the next tive Johannes Teyssen.
firm Gazprom to market investors three years through disposals and It was reported last week that
and Russia’s state-owned investment cost-savings. The firm has previously Russian Prime Minister Vladimir
bank. described the stake as a non-strategic Putin, also chairman of VEB, dis-
Vnesheconombank (VEB) will take a investment. cussed the sale of the stake with
2.7 per cent stake, while 0.8 per cent “We will use these proceeds to fur- German chancellor Angela Merkel
E.ON boss Dr Johannes Teyssen says the proceeds will be used to pay down debt Picture: GETTY has been placed in the market. E.ON ther reduce our debt and to increase during a meeting in Berlin.
▲
FINANCIAL SERVICES ACCOUNTANCY
BY HARRY BANKS BY ALISON LOCK
BRITISH financial services group THE CHRISTMAS bonus season should
Brewin Dolphin yesterday said it post- be good for UK accountants, but their
ed a 25 per cent increase in underly- salaries look set to rise at below infla-
ing pre-tax profits during the year to tion rates, a new survey has found.
26 September as it brushed off the Six in ten City businesses expect to pay
impact of higher regulatory costs. their finance staff bonuses this year, the
Brewin Dolphin said profits exclud- survey by recruitment consultancy
ing redundancy costs, contract renew- Ambition found – and while account-
al payments and the amortisation of ants on average expect a bonus of 8.7 per
client relationships was £40.2m for cent of salary, employers anticipated pay-
the full-year. ing an average 10.8 per cent.
After exceptional costs, pre-tax But while finance staff surveyed
profits were £31.4m, a 43 per cent expected five per cent salary rises in
increase from a year earlier. 2011 – almost two percentage points
Brewin Dolphin said the year had above inflation – employers said they
seen a “material rise” in the costs of expect to offer an average 2.6 per cent
regulation as British authorities raise, which falls below the current 3.2
shake up selling of financial services per cent inflation rate.
after the financial crisis and that the Jamie Lyon, head of employer servic-
company planned to find ways to mit- es at the ACCA, said accountants
igate the cost. recognised that economic conditions
“Your board believes that the had been challenging and bonuses
impact of regulation upon the busi- may not be as high as in booms.
ness is unlikely to reduce in the fore- “Finance departments are the
seeable future,” the company said. unsung heroes of businesses and we
The investment management busi- support our members in trying to get
ness, which accounted for 96 per cent the best remuneration,” he said.
of group turnover, saw an 18 per cent Based on current average account-
rise in revenues while total funds ants salaries of £42,000, bonuses
under management increased 13 per should average £4,536 – £880 higher
cent to £23.3bn. than expected, creating a total bonus
The company proposed a final divi- pot for all UK qualified accountants of
dend of 3.55p per share, bringing the up to £3.1bn. In 2009 accountants’
total dividend to 7.1p. total bonus pot was £0.57bn, an aver-
age of £1,974 each.
“It’s understandable that staff now
ANALYSIS l Brewin 148.00 want to get their pay back in line but
p 01 Dec the fact that businesses will be paying
150
higher bonuses than expected will go
some way to appeasing any disappoint-
140 ment,” said Ambition managing direc-
tor Tim Gilbert.
130 In March, the Institute of Chartered
Accountants in England and Wales
reported that members’ salaries were
120 down about two per cent on 2009’s
15 Sep 14 Oct 12 Nov
level, to an average £79,100. Bonuses
had fallen 26 per cent over the year.
Broughton makes key hire at sports fund GM car sales jump 11pc
four-year stint as the worldwide man- Nic Couchman, a partner at the ures were GM’s first since its $23bn
▲
LEISURE AUTOMOTIVE
BY DAVID HELLIER aging director of Octagon until 2001. sports business law firm Couchmans. (£14.8bn) IPO last month.
In this time he sat on the board of “Matthew’s experience in both run- GENERAL MOTORS’ sales rose 11 per GM said its average transaction
MARTIN Broughton, the former chair- both DC United and Major League ning leading sports businesses and in cent in the US last month, slightly prices were up $1,300 in November
man of Liverpool Football Club, has Soccer in the US and Eintracht putting together deals that add value less than industry-wide predictions from a year earlier, while incentives
made a key hire at his fledgling Frankfurt of the Bundesliga in to all parties will be invaluable as we but providing a sign of returning con- were down. GM said growing pent-up
investment fund and advisory fund, Germany. continue to examine potential invest- sumer demand. demand for cars will be released as
Sports Investment Partners. He developed a reputation for suc- ments in the sport industry,” said GM said yesterday its four core the economy continues to improve.
Sports Investment said yesterday it cessfully building market leading Broughton, who is also chairman of brands – Chevrolet, Buick, GMC and Ford also reported US sales rose
is hiring Matthew Wheeler, who was sports agency propositions. British Airways. Cadillac – clawed back some market 24.3 per cent in November from the
chief executive of Alan Pascoe’s API Others involved in the new firm Broughton led a dramatic sale of share with a 21 per cent rise in sales same period in 2009, with 147,338
Group in the 1990s. He then had a include Broughton’s son Michael and Liverpool to the Boston-based NESV. compared with last year. The sales fig- vehicles sold.
10 News CITYA.M. 2 DECEMBER 2010
Prudential plans to
double sales in Asia
INSURANCE
▲
WIN
www.cityamsurvey.com for the chance to
a truly amazing
week-long holiday
FOR TWO
TO ONE OF SANDALS’ LUXURY INCLUDED ® RESORTS IN BEAUTIFUL SAINT LUCIA
today’s somewhat depressed climate,
we realise that the chance to win a
brilliant holiday in the sun is just what
the doctor ordered.
So everybody who fills in the sur-
vey will be entered into a draw for an
all-inclusive trip for two to one of
Sandals' Luxury Included resorts in
beautiful St Lucia, a package which
EDITOR’S LETTER includes return flights
ALLISTER HEATH (see terms and conditions below;
heartfelt thanks to the company for
making this amazing prize possible).
IT is that time of the year again. To add further spice to the survey,
Today, City A.M. begins our annual we will also be entering survey par-
readership survey. As a quality news- ticipants into a daily draw to win a
paper provided free of charge, it is bottle of Bollinger.
important for us to understand who We reached our highest ever audit-
our readers are and what you think of ed circulation in October 2010 and
us, and this survey is one of the main have very ambitious plans for the
vehicles we have to achieve this. future. We are by no means finished
We know that many of our growing improving the paper and we are very
band of readers will be keen to help – keen to hear any thoughts or sugges-
and spend just a few minutes filling in tions you may have.
our very simple and straightforward Thanks for reading City A.M., thank
survey at www.cityamsurvey.com – but you for your loyalty and we look for-
as good capitalists here at City A.M. we ward to receiving your feedback at
also believe in incentives. And in www.cityamsurvey.com
www.cityamsurvey.com
Terms and Conditions – CITY AM. 7 nights’ accommodation is provided for two adults at any Sandals resort in St. Lucia. Accommodation is on a Luxury Included® (all-inclusive) basis in a deluxe room. Resort transfers and return flights from London to St. Lucia are included but domestic
transfers are not included. There is no cash alternative to the prize and spending money is not included. Holiday insurance is not included and must be purchased before travel. The prize is subject to availability, cannot be taken during peak seasons (Easter, July, August, December and New Year) and
must be confirmed no later than 30 days and no earlier than 90 days prior to departure. Once dates are confirmed there will be an administration fee for any changes made to the reservation. This fee varies in accordance with the airlines. The prize is strictly non transferable, non refundable, and
is subject to Sandals Resorts’ normal terms and conditions. The prize must be taken before 30 November 2011. Sandals’ resorts are for couples. Sandals Resorts reserve the right to relocate prize winners from the stated resort to an alternative Sandals resort if rooms become unavailable for the
travel dates requested. By entering this competition you consent to your details being shared with our parent company located outside the European Economic Area. The competition is not open to employees and their immediate families of promoter Unique Vacations (UK) Ltd and their associated
agencies. Prize winners must be over 18. One entry per household. ATOL protected 2538. ABTA V2043.
12 News CITYA.M. 2 DECEMBER 2010
CITY EYE
TRADERS at the London Metal Exchange make their voices heard in the Ring, which is
one of the last open outcry pits in the world. The exchange, which was founded in 1877,
deals in aluminium, copper, tin, nickel, zinc and lead among other traded metals. The
exchange also started trading plastics in 2005. Picture: Micha Theiner/City A.M.
14 Economic News CITYA.M. 2 DECEMBER 2010
helps US jobs
▲
Germany drives
Industry bounces back in UK manufacturing
all figures above 50 indicate a rise. up in Eurozone
▲
UK ECONOMY
BY JULIAN HARRIS The figures reflect stronger output
growth and inflows of new work and
RECORD breaking statistics are point- new export orders, the authors said.
ing to a resurgent UK economy, “Job creation was attributed to the EUROZONE ECONOMY
▲
according to authoritative data ongoing economic recovery,” they
released yesterday. added. On Monday employment fore- RECOVERY in the Eurozone continues
Jobs growth in manufacturing for casts were revised upwards by the to be driven by Germany and France,
November raced forwards at its Office for Budget Responsibility. new figures revealed yesterday.
fastest rate since 1992, when the The private sector is forecast to add Manufacturing growth showed a
Markit/CPI Purchasing Managers 1.5m jobs by 2015, with unemploy- modest increase in November across
Index (PMI) began collecting data. ment falling to around six per cent. the single currency area.
And UK manufacturing growth hit “Today’s survey supports our view The Purchasing Managers Index
a sixteen year high, after production that growth this quarter will be at (PMI) for manufacturing rose to 55.3,
rose for 18 months in a row. least 0.5 per cent,” said Hetal Mehta of up from 54.6 in October.
The index increased to 58 in Daiwa Capital Markets. should now be dispelled,” she said. “Nonetheless, this is a superb, encour- French PMI hit its highest rate for a
November, and October’s rate was “Any notion that the Bank of Yet manufacturing only accounts aging survey,” he added. “And the decade, shooting up to 57.9, from
revised up to 55.4. The PMI is used as England is poised to implement more for 12.8 per cent of GDP, warned more forward looking elements October’s 55.2.
an indicator of economic activity, and quantitative easing in the near term Howard Archer of IHS Global Insight. showed improvement.” Meanwhile in Germany, the
increase in manufacturing employ-
ment rose at the second highest rate
Indian factory output recovers well..... .....but high inflation scares China in the history of the index.
Yet the situation remains bleak in
peripheral areas of the Eurozone, par-
ticularly troubled states such as Spain
and Greece.
reaching its strongest rate for four higher costs to consumers, with “facto- Manufacturing PMI in Spain
▲
279,000 business
Economists warn
that house prices
could continue to
tumble throughout
the next year.
Picture:
Micha Theiner
/City A.M. closures reported
cent, the ONS announced.
▲
UK ECONOMY
BY JULIAN HARRIS This week the government said it
would cut corporation tax to 10 per
BUSINESS closures have hit their cent on UK produced patented goods.
highest level for ten years, according The plans were criticised by the
to figures the Office of National Institute for Fiscal Studies, who said it
Statistics (ONS) released yesterday. would harm tax receipts and add
Closures were up 26 per cent in complexity to the tax system.
2009, amounting to 279,000 compa- But Alec van Gelder of the think
nies winding up their operations. tank International Policy Network
Research and development (R&D) said the policy would “stimulate
was also down in 2009, by 4.1 per innovation, investment, and jobs.”
House prices
down 3.9 per Starts
Friday 03 Dec
MORTGAGES
BY JULIAN HARRIS Low real wages and continuing dif-
opens books
440 465
01 Dec 01 Dec
455
430
2,050
445
420
to its suitors
435
1,950
410 425
6 Sep 24 sep 14 Oct 3 Nov 23 Nov 6 Sep 24 sep 14 Oct 3 Nov 23 Nov 6 Sep 24 sep 14 Oct 3 Nov 23 Nov
ENERGY
BY HARRY BANKS business in 2009. and that planned investment in marketing week to confirm pedestrian UK trading sees founder and chief executive Jonathan
“It’s important that these compa- and IT would hold back any increase in momentum that could add to a short-term Lane’s retirement as a potential drag on the
WELLSTREAM has entered into for- nies make sure that Petrobras is on margins. Nomura notes SAB’s recent claim drag on shares. It predicts quarterly sales share price, but is more optimistic about
mal talks with General Electric and board with their acquisition of the
National Oilwell Varco over a poten- company because clearly that’s the that revenue growth would be around two growth of six per cent, making it the slow- rental value growth. It has raised its 2011
tial £755m bid, it is understood. future driver of growth,” Scholl per cent, slightly below earlier guidance. est growing of the big four grocers. net asset value forecast by one per cent.
The oil pipe-maker is said to have added.
allowed both firms access to its books GE said in October it was “disci-
as it tries to negotiate a higher offer plined” about deals and it might not To appear in Best of the Brokers email your research to notes@cityam.com
from the two bidders. make another approach or could do
DUBAI
gence,” said Royal Bank of Canada in the last month. delayed the loan in July and still on almost $25bn of debt. The
analyst Todd Scholl. Yesterday, the shares closed up 1.2 CONGLOMERATE Dubai Holding’s September. company secured unanimous
Scholl said he thought any new bid per cent at 742p. main unit has extended a $555m “The extension is required to approval for its restructuring plan in
would have to be pitched at between Wellstream, whose main competi- (£355m) loan due on 30 November by finalise a new long-term facility,” the under a year.
775p and 800p per share and proba- tor in flexible pipe making is the one month, reinforcing niggling company said yesterday. DHCOG, a unit of the conglomer-
bly closer to 800p. French offshore engineering group doubts over Dubai’s ability to resolve Analysts say there was general ate owned by the Gulf Arab emirate’s
Wellstream makes flexible pipes Technip, has been a frequent subject its debt troubles. optimism that Dubai would be able ruler, took a big hit from its exposure
used by oil companies in deep water, of takeover speculation. This was the third extension for to successfully restructure debt at to Dubai’s property crash and said in
an area set for strong growth due to Market chatter has often linked it Dubai Holding’s loss-making hospi- Dubai Holding and its units. June it might resort to asset sales to
major finds in Brazil, where state-run to Europe's largest oil services compa- tality and property arm, Dubai State-owned conglomerate Dubai deal with its debt after posting a
oil firm Petrobras accounted for ny, Saipem. Holding Commercial Operations World sent global markets reeling $6.2bn loss for 2009.
CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with
Churston Heard, which was bought by but in insurance. She has worked at responsible for the development of the
HSBC Jones Lang LaSalle in 2008. Prudential UK and set up a specialist firm’s strategy in this area and will be
HSBC has announced the appointment of annuity company Synesis Life in 2006. reporting to Ed Casal.
Hossam Alsaady as head of its Saudi Arabia MGM Advantage
team within the London-based Middle East and Retirement specialist and mutual socie- Generation Investment PricewaterhouseCoopers
North Africa division of its private banking ty MGM Advantage has appointed Generation Investment Management, PwC has hired Nigel Vooght as head
business. Alsaady is moving over from his role Brian Harrison and Isabel Hudson as the investment management firm, has of its financial services business, replac-
at NCB Capital in Jeddah, where he has held non-executive directors. Harrison will appointed Mike Ramsay a partner in its ing Jeremy Scott. Vooght will lead
several senior positions, most recently head of be the firm’s new chairman of the risk London office. Ramsay moves from the PwC’s global banking and capital mar-
strategy. At HSBC, he will be reporting to committee while Hudson will sit on the Carlyle Group, where he was global ket services.
Bassem Snaije in London and Sobhi Tabbara in investment committee among other head of leveraged finance. He has also
Geneva. duties. worked at Prudential M&G. Metro Bank
Harrison has over 30 years’ experi- Mark Price has been appointed man-
ence in the pensions business, having Aviva Investors aging director of commercial banking
Cushman & Wakefield ment of Tony Edwards and Simon Wild begun his career at the Gresham Group Bart Coenraads has joined Aviva at new high-street bank Metro Bank.
Real estate services firm Cushman & as partners in its southern retail agency and worked at Friends Provident. Investors as head of real estate multi- Price will be responsible for building up
Wakefield has announced the appoint- team. They both move over from Hudson also has 30 years’ experience, manager, Asia-Pacific. He will be the firm’s business clients.
UBS
team advising UBS.
Warshaw has spent 24 years at
UBS, and helped found the bank’s
media sector group in the 1990s. He
made it onto the Guardian’s Media
100 list last year for his role in Lord
have announced they will invest tions last year worth £243bn through Carter’s Digital Britain report.
▲
M&A
£200m on expanding the business, brands including Streamline, which Warshaw also advised RBS on its
BY MARION DAKERS which will create 250 jobs in the next the firm says underpins half of all UK disposal of 318 high street branches
ROYAL BANK OF SCOTLAND (RBS) six months. high street card payments. RBS hired UBS to run the WorldPay to Santander earlier this year.
finalised the sale of its WorldPay busi- Ron Kalifa, who will remain chief auction earlier this year and the bank UBS is currently advising BSkyB,
ness yesterday, while new owners executive at WorldPay following the ANALYSIS l RBS 39.88 has advised throughout the disposal. along with Morgan Stanley, in its bid
Advent International and Bain sale, said: “Independence and private p
01 Dec The contract was another win for to get the best price from Rupert
52
Capital pledged to invest £200m in ownership give us the potential to UBS which has cashed in on the Murdoch’s News Corp. It also worked
50
the payment processing firm. transform the payments industry bounce-back in the M&A market, fin- with Telefonica on its €7.5bn (£6.3bn)
The EU-enforced sale of the £2bn through long term investment in our ishing in the top ten global advisers in bid for a stake in Vivo, which fell
business, agreed in August, leaves technology, our people and our busi- 46 the first half of this year. It was the through in July. Advent International
RBS with a 20 per cent stake in the ness.” top adviser in Asia Pacific, with the and Bain Capital were advised by
company. Advent and Bain promised Advent and Bain’s respective man- 42 highest revenues in that region. Credit Suisse, Weil Gotshal & Manges,
at the time to invest in technology aging directors James Brocklebank Head of EMEA investment banking Kirkland & Ellis, PwC, FT Advisors Ltd,
platforms and product range for and Robin Marshall will take up 38 Simon Warshaw and managing direc- First Annapolis and McKinsey &
WorldPay, which processes credit and places on WorldPay’s board. 15 Sep 14 Oct 12 Nov
tor Patrick Porritt were part of the Company.
debt card payments. The new owners WorldPay processed 6.8bn transac-
UK superfast
broadband
take-up lags
nificantly over the next two years,
▲
TELECOMS
with two major spectrum auctions
BY STEVE DINNEEN coming up which will relieve pres-
THE UK has the worst take-up of sure on mobile data networks. The
superfast broadband of any major most significant will be the auction
developed nation, new research by of the 800MHz spectrum which is cur-
the communications watchdog has rently used for analogue TV but will
revealed. be available after the digital
Just 0.2 per cent of people in the UK switchover is complete.
have access to broadband speeds of The study of communications
30Mbits a second or higher. This com- trends also shows that the UK is
pares to 34.4 per cent of people in cheaper than any major European
Japan, 12 per cent in Sweden and 7.1 nation or the US for mobile, broad-
per cent in the US. band and TV.
Ofcom says it expects this to The UK leads Europe for internet
increase as BT rolls out its Infinity purchases, with the average online
broadband package and Virgin con- spend per person reaching £1,031 –
tinues to expand its cable offering. almost twice the next highest
With ambitious rollout plans that nations, France with £595 and
include connecting rural areas to Germany with £588.
superfast networks, Ofcom estimates Ofcom believes this is down to the
the UK will have the highest prolifera- higher proliferation of credit cards in
tion of speeds over 30Mbits a second the UK, the early growth of Amazon
in Europe by 2015. here and the tradition of catalogue
The UK also lags behind in super- purchases. The share of online adver-
fast mobile networks, with a maxi- tising is also higher in the UK than in
mum possible download speed of just any of the comparator countries, at
7.2Mbits a second – level with France 27 per cent. The US has 17 per cent
but far behind Sweden with 100Mbits and Japan has 15 per cent.
a second. Japan, Australia and Poland IPTV has been slow to take off in
all have theoretical download speeds the UK but this is expected to grow
of 42Mbits a second. when BBC-backed venture YouView
Ofcom also expects this to rise sig- launches next year.
34.4%
Cable
Superfast broadband
Fiber to the home
12.0%
7.1%
5.2%
2.0% 1.4%
1.1% 0.4% 0.3%
0.2%
UK FRA GER ITA USA JPN AUS SPA NED SWE
20 News CITYA.M. 2 DECEMBER 2010
MEDIA
Aegis chief executive Jerry be joining Aegis, which he said had
BY HARRY BANKS Buhlmann said the acquisition would “an amazing track record of innova-
MEDIA group Aegis yesterday expand- give it the scale to expand further in tion.” well in the first half of this financial
▲
TECHNOLOGY
ed its presence in Russia by snapping the relatively immature Russian mar- year compared to a weak first half last
up a majority stake in the country’s ket research sector. ANALYSIS l Aegis 136.30 SOFTWARE testing firm Anite yester- year.
biggest independent market research Meanwhile, Aegis Media has p 01 Dec day announced its first half pre tax “Strong recovery in both handsets
business. appointed Simon Francis as its new 140 profits soared 160 per cent to £6.5m. and networks produced a result sub-
Aegis acquired Comcon through chief executive for the Europe, 135 Its revenue jumped 20 per cent to stantially ahead of last year with
Synovate, its market research group, Middle East & Africa (EMEA) region. £42.3m. It also hiked its interim divi- group revenues and profits exceeding
for an undisclosed amount. Francis, who was poached from dend five per cent to 0.315p per share. the Board’s prior expectations.
According to the terms of the deal, it rival Saatchi & Saatchi, will report 125 It was buoyed by a market-led “We believe that Anite is better
could acquire the remainder of the directly to Buhlmann. recovery in both its handsets and net- positioned to take advantage of the
business in 2015. Buhlmann said: “Simon has a works divisions but saw its travel arm new 4G market than for previous
Comcon, which has offices in wealth of experience both in the sec- 115 profits dip. technologies, and that the 4G cycle is
Moscow and St Petersburg, produced tor and the region with an impressive Chief executive Christopher also likely to be deep and long last-
$18.9m (£12.1m) of sales in 2009 and track record which speaks for itself.” 15 Sep 14 Oct 12 Nov Humphrey said: “Anite performed ing.”
Airbus plans
Thomas Cook €1bn upgrade
profits dip in of key aircraft
tough market
▲
AVIATION
Thomas Cook chief
executive Manny EUROPEAN planemaker Airbus plans
Fontenla-Novoa to upgrade its best-selling A320 medi-
said 2009 to 10 um-haul jets from 2016 with new
would be “demand- engines offering 15 per cent fuel sav-
ing”. ings, as it fends off upstart competi-
Picture: REX tors.
2009 to 10 would be demanding,” said Airbus said yesterday that it would
▲
AVIATION
chief executive Manny Fontenla- invest just over €1bn (£840m) in the
BY ALISON LOCK
HOLIDAY operator Thomas Cook yes-
Novoa. “While we made good
progress in many of our operating
ANALYST VIEWS: WHAT DO YOU MAKE OF “A320neo” project to improve effi-
ciency and cut harmful emissions
terday said it would slash costs by up
to £50m after a “demanding” year
segments and delivered a strong
improvement in operating cash flow,
THOMAS COOK’S RESULTS? Interviews by Alison Lock and noise.
Until now, Airbus and US rival
that saw profits come in at the lower trading in the UK was even tougher Boeing, with its 737, had resisted
end of expectations. than anticipated.” KEVIN BOWMAN | HARGREAVES LANSDOWN changing winning designs that are
“
Profit before tax fell six per cent The results meant an overall loss the backbone of the global airline
compared to 2009 to £277m, while per share of 0.3p, down from 2009 eps business and helped give birth to the
revenues were down four per cent to of 0.8p per share. The company will Despite a year that investors and management will want to forget, low-cost sector.
£8.89bn. The UK and US markets were pay a final dividend of 10.75p, Thomas Cook continues to receive the benefit of the doubt. Costs in more mature The new planes, with upward-
”
particularly tough, with UK underly- unchanged from 2009’s level. markets continue to be targeted, while sales expansion in emerging markets pro- slanting wingtips, will look almost
ing profit falling by a third on the pre- Analysts remained upbeat about vide future growth prospects, and winter bookings offer further cheer. identical to existing aircraft but have
vious year. This was due to the fundamentals and said the results larger and more efficient engines
“significant foreign exchange head- were as expected, though Wyn Ellis of from either US group Pratt &
winds” from sterling’s weakness Numis warned of a tough year ahead. NICK BATRAM | PEEL HUNT Whitney or CFM International, a
“
against the dollar and euro, as well as “We find it difficult to identify a near joint venture between US conglomer-
lower demand for holidays. The five- term catalyst; while shares look cheap ate General Electric and French
day closure of EU airspace in April due they may continue to drift,” he said. Trading conditions are challenging but overall we think the update is reassur- group Safran.
to volcanic ash also cost it about ing. Good underlying progress has been overshadowed by the tough consumer back- The long-awaited decision hit back
”
£100m in revenues, the company said. ANALYSIS l Thomas Cook drop. While market conditions stay difficult we feel the group is close to trough at Canadian group Bombardier,
Thomas Cook is now reducing its earnings; a price to earnings ratio of under eight times hardly looks demanding. China and Russia, who all aim to
UK cost base and aims to generate p 178.00 challenge Airbus and Boeing for a
200 01 Dec
£40m to £50m in cost savings. 195
segment of the global jetliner mar-
It expects the changes to cost £20m SAM HART | CHARLES STANLEY ket, worth $1.7 trillion (£1.09 trillion)
“
to implement, incurred in the 2010-11 over 20 years. It was also a critical
financial year, but believes they will 185 move in a war between enginemak-
mitigate any further deterioration in These results were in line with soft expectations, impacted by disrup- ers for dominance as the aviation
the market. tion relating to the volcanic ash cloud and weak underlying trading in the UK busi- industry climbs out of recession.
”
It has already cut 500 managerial 175 ness. The shares look cheap but the quality of earnings in the tour operator The new engines will be offered as
and support jobs since October. sub-sector is poor. We expect investors to remain wary of the shares. an option on A320 and derivative
“We recognised at the outset that 15 Sep 14 Oct 12 Nov A319 and A321 models.
FINANCIAL SERVICES
▲
ing the business by recruiting new very good quality clients,” Hemsley said.
TECHNOLOGY in the second quarter next year.
BY ALISON LOCK BY STEVE DINNEEN
teams, adding new capabilities and, Numis has strengthened its bal- Meanwhile, Virgin Media yesterday
INVESTMENT banker and broker crucially, growing its client base. It ance sheet, reporting net assets of THE BBC yesterday announced it will announced details of its new TiVo-
Numis has strengthened its position, brought 29 new clients on board this £106.7m with £58.2m cash and collat- launch a global commercial version powered internet TV service.
reporting improved profits as well as year, taking the total to 133 and its eral, and it lowered costs by seven per of its iPlayer TV-on-demand platform The roll out will begin later this
growing its client portfolio, it report- stable of FTSE 250 clients to 26, chief cent on the previous year. through a subscription service on the month. The package will cost £199
ed in its full-year results yesterday. executive Oliver Hemsley said. Hemsley said he anticipates more iPad. plus a monthly subscription fee.
Operating revenues rose nine per The firm has also conducted major M&A activity in 2011 and growing A BBC spokesman told City A.M. the TiVo, which has been available in
cent to £51.9m, from £47.5m the pre- flotations such as Betfair, Ocado and demand for non-bank lending from iPad app will launch in the second the US for several years, includes a
vious year, and profit before tax grew Better Capital, he said. It assisted companies. “Banks will be curtailed quarter of 2011. It is expected to be fol- recommendation feature which will
87 per cent to £7.9m from £4.2m, clients in raising £1.3bn in equity in their ability to lend to corporate lowed by a full online roll out which predict shows a user may enjoy based
excluding one-off charges relating to funds in the past year, 67 per cent clients, so we think there will be sig- will offer some free content supple- on their viewing habits and personal
its employee share scheme. more than the previous year. nificant opportunities,” he said. mented by advertising. ratings.
Markets&Investment 21
B T
RITAIN’S leading share index Commodity stocks were big movers although uncertainty will keep HE Dow and the Standard & the world."
staged its biggest one day really on the index, tracking firmer metal something of a lid on it,” said Yusef Poor’s (S&P) 500 posted their The global economic recovery
in three months yesterday, claw- and crude CLc1 prices after the Heusen, senior sales trader at IG biggest gains in three months remained sound. US private-sector
ing back some of the losses Chinese data suggested demand was Index. yesterday as efforts to resolve payrolls achieved their biggest gain in
made in the past three sessions, with robust. BAE Systems slipped 1 per cent, the European Union’s debt crisis three years, according to ADP data,
commodities boosted by upbeat Miners Kazakhmys, Antofagasta knocked by a bearish sector note by helped push the S&P above 1,200, an while global manufacturing picked
Chinese data and banks rallying after and BHP Billiton gained 3.4 to 5.3 per Goldman Sachs, with the broker reit- important technical level that signals up speed, boosted by China and
being hit by sovereign debt concern. cent, while Xstrata jumped 5.8 per erating its “conviction sell” on the the potential for the rally to continue. Germany.
The rally was also boosted by hopes cent, also buoyed by a bullish note company. Ex-dividend factors The S&P 500 moved out of its The US-traded-stock of Banco
the European Central Bank (ECB) from Barclays Capital. accounted for the two heaviest FTSE recent trading range as some of the Santander, the Spanish bank in the
could step up its purchase of euro- Oil stocks BG Group, BP and Royal 100 fallers, Severn Trent and panic of previous days eased. eye of the euro storm, jumped 7.9 per
zone government bonds in a bid to Dutch Shell rose 0.9 to 2.7 per cent. National Grid, while Land Securities Investors focused on valuations that cent to $10.38. US investors have sold
support the borrowing needs of strug- Banks were also in demand and fea- and Johnson Matthey lost their pay- many analysts say are cheap, but vol- the stock relentlessly in recent weeks,
gling states. tured among the top performers after out attractions yesterday. ume was average in a sign fund man- turning it into a proxy for Eurozone
The FTSE 100 index gained 114.23 being sold off in previous sessions on agers were not fully participating. risk aversion.
points, or 2.1 per cent, to 5,642.50, worries about the euro zone debt cri- ANALYSIS l FTSE
5,900
5,642.50 Economically sensitive cyclicals led The Dow Jones industrial average
having ended November back at levels sis. 01 Dec a broad rally. Aluminum producer gained 249.76 points, or 2.27 per cent,
not seen since mid-September. British banks Royal Bank of Alcoa Inc rose 3.4 per cent to $13.57, to 11,255.78. The S&P 500 rose 25.52
“There has been good news consis- Scotland, Barclays and Lloyds Banking 5,700 while Home Depot Inc, whose for- points, or 2.16 per cent, to 1,206.07.
tently across the globe, starting with Group rose 4.6 to 6.1 per cent. tunes are tied to the US consumer, The Nasdaq Composite Index added
the Chinese PMIs. UK manufacturing Insurer Prudential gained 5.5 per jumped 4.6 per cent to $31.61. 51.20 points, or 2.05 per cent, to
data was also much better than cent after it announced plans to dou- 5,500 Stocks rallied as speculation grew 2,549.43.
expected and the U.S. figures were ble new business profits in Asia by that the European Central Bank Volume was moderate, with 8.29bn
good,” Mike Lenhoff, chief strategist at 2013. could step up its purchases of govern- shares traded on the New York Stock
5,300
Brewin Dolphin, said. Among individual risers, Sage ment debt and a US official said Exchange, the American Stock
China’s official purchasing man- Group was 5.3 per cent higher after Washington would support boosting Exchange, and the Nasdaq, compared
agers’ index (PMI) climbed to a seven- the British accountancy software 5,100 an EU rescue facility via IMF funds. with an average of 8.48bn so far this
month high in November, while company's results beat full-year expec- 6 Sep 24 Sep 14 Oct 3 Nov 23 Nov "It seems that as bad as Europe's year.
22 Investment | Listed Products CITYA.M. 2 DECEMBER 2010
Spreading risk
is crucial if you
want to build a
stable portfolio
Investors need to remember why they are
investing, be diligent and hedge risk when
using ETFs as a tool, writes Daniel Knowles
O
NE traditional rule of investing is to diversify”.
quite simple. Take your age, subtract How you diversify is, of course, also cru-
it from 100 and invest that percent- cial. Unsurprisingly, most older people will
age of your portfolio in equities and want to consider holding more fixed
the rest in bonds. When you are young, income investments, though with interest
you have more of your money in stocks, rates as low as they currently are, high div-
which traditionally perform better over idend yield, blue chip equities are also
time. As you get older, you move more into worth considering. Most younger people,
bonds, thereby escaping volatility and so conversely, might want to consider more
insuring yourself against risk when you exciting emerging market products so as
actually need the money. to cash in on long run growth.
Even after decades of financial innova- Commodities like gold are worth holding
tion, that rule still near enough sticks – in small amounts – about 5 per cent is typ-
the most important thing is to understand ical, according to Draper – as a hedge Constructing an ETF Swenson, the chief finance officer at Yale uncorrelated investments. Investors
your personal circumstances and go from against financial uncertainty, but it is portfolio is like put- University, achieved returns of 11.8 per would do well to follow that advice.
there. But there are some things that important not to buy heavily into fads. ting up a house cent per year from 1999 to 2009, riding
investors should know about, especially The important thing is that investors out the recession, by doing just that – his ONCE BALANCED, STAY BALANCED
when investing with ETFs. know what their aims are and structure Picture: GETTY model of investment stressed the impor- It is also essential to make sure that your
As Dan Draper, global head of ETFs at their portfolios accordingly. David tance of choosing several exciting but investments remain balanced. If the con-
Credit Suisse, explains, constructing a
portfolio is “a little like building a house”. ANALYSIS l David Swenson's Ivy League Portfolio
What makes a house’s design conservative BUILDING YOUR PORTFOLIO | THE BALANCING POINT
or architecturally outlandish isn’t so much
the building materials – though those are 15% FTSE 100 Growth Investors: balanced ETF portfolio could be made up of:
of course important. Rather it is how they Young investors will probably want riskier, l 50 per cent equities, divided between
are arranged. By diversifying, and so buy- 15% FTSE 250 more growth oriented assets, because they riskier growth equities and blue chip firms.
ing a mix of assets – bonds, shares and can afford to endure wealth losses and ride l 45 per cent fixed income assets.
even commodities and more liquid assets 5% MSCI Emerging Market Equity out the peaks and troughs of the market. A l Five per cent commodities such as gold.
like currencies – investors are spread their typical growth portfolio might include:
risk between uncorrelated, or inversely l 70 per cent equities, including some Conservative Investors:
correlated assets. So if one part of the port- 15% FTSE Developed World ex-UK
folio loses value, then another part may emerging market or new technology funds. Someone approaching retirement is probably
strengthen. l 20 per cent fixed income assets such as going to be more concerned by volatility than
20% FTSE EPRA/NAREIT UK Property
corporate or government bonds. growth, and so will want assets that provide
IDEAL BUILDING BLOCKS l 10 per cent alternative assets such as a relatively stable income without risking
According to Draper, ETFs help investors 15% FTSE UK All Stocks Gilt commodities or currencies. capital. Such a portfolio might include:
achieve that. “They’re pretty ideal building l 70 per cent fixed income assets.
blocks”, he says. “The great thing about 15% £ Index-Linked Gilts Balanced Investors: l 25 per cent high dividend, stable equities
ETFs is that even if you’re just investing As investors grow up, they will probably such as blue chips.
your ISA allowance, you can get 6 to 8 want to reduce their risk exposure. A more l 5 per cent alternatives.
Source: Monevator.com
funds into that £10,200, so it’s really easy
FOOD PRICES
income to rise 24 per cent in 2010 to $77bn,
the fourth largest on record. Farm balance
sheets are strong and low gearing is leaving
PUT FOCUS ON
farmers with ample borrowing capacity. The
strength of the US farm sector is reflected in
booming activity in the agricultural mid-West,
AGRIBUSINESS
with unemployment in states like North
Dakota almost one-third that of national rates.
Farmers in the US, the world’s largest cereal
producer, are expected to respond to higher
prices by boosting production. If similar pat-
DANIEL WILLS terns from 2009-10 are repeated, this could
potentially translate into higher cotton and
SENIOR ANALYST, ETF SECURITIES corn plantings – crops that tend to be relative-
ly input intensive. For example, the nitrogen
application rate for corn is estimated to be
M
OST agriculture prices have seen dou- over five times that of soybeans according to
ble-digit gains this year, reflecting a the USDA. On the back of these developments,
trend towards higher and more volatile markets have begun to increase agribusiness Agribusiness is a fertile investment Picture: ALAMY
prices since 2003. For agribusiness, valuations, reflecting higher expected earnings
this could lead to stronger returns for agricul- via both demand volumes and prices. The fer- eral agricultural products, mirroring trends in account for over half of the world’s cereal pro-
ture producers and support companies, irre- tiliser industry is a prominent example since other basic resources. Food inflation has his- duction. Emerging markets face shortages in
spective of near-term gyrations in the business BNP Billiton’s bid for Potash was recently at torically had a weak relationship to the busi- infrastructure, training and technologies to
cycle, if suppliers strive to boost productivity. the centre of M&A speculation. ness cycle, suggesting that recent Chinese boost food production adequately: improving
Rising prices have significantly boosted farm Looking ahead, emerging market imports tightening could have a more modest impact. productivity via agribusiness investment will
income, with the US Department of will be a key barometer to watch, with China Emerging markets will be the chief source of be critical to avoiding global food shortages in
Agriculture (USDA) projecting 2010 net farm recently becoming a large net importer of sev- food demand growth in the future and already the medium term.
CITYA.M. 2 DECEMBER 2010 Investment | Listed Products 23
Carphone Warehouse
is on the way up THE
TIPSTER
Picture: REUTERS
F
EW retail stocks have managed to see
their share price recover to the halcy-
on days of 2007, but Carphone
Warehouse has recently achieved that
feat with the stock now eyeing the 400p
level. Clearly the Christmas season has the
potential to bring further cheer for the
stock. Furthermore, given the ongoing tide
of innovation in mobile communication as
well as the company’s decision to start pay-
ing a dividend, this stock could remain a
popular choice for some time yet. The cur-
rent IG Index price is 388.5p-391p
With continuing speculation in the mar-
kets about the safety of European sover-
eign debt, gold could once again be viewed
by the markets as a safe haven. With the
precious metal making a steady charge
back up towards the $1,400 level, a breach
above here could well lead to an extended
move higher. WorldSpreads offers a spread
on the rolling spot price of $1,391.25-
$1,391.75.
The tide seems to be turning for travel
firm Thomas Cook, after its shares suf-
fered in late September from a profit warn-
ing. Yesterday it released its preliminary
2010 results statement, revealing a lower-
than-expected 6 per cent fall in adjusted
underlying operating profits. The deal with
Russia's VAO Intourist, concluded on 25
November, adds a new dimension to the
stituent parts of a portfolio all do very group and analysts says it fully exposes
differently, then a fund can get out of Thomas Cook to immense emerging mar-
line very quickly. Imagine, for example, kets growth potential. Spreadex offers a
a fund half in equities and half in bonds. December spread of 176.5p-178.3p
If equity prices increase by 50 per cent, Broadband satellite operator Avanti
and bond prices halve, the portfolio is Communications yesterday reported bet-
now balanced 3:1 in favour of equities. ter-than-expected results and already has a
By rebalancing every year, or even strong balance sheet. The Aim-listed start-
more frequently if you have invested in up company already has one satellite in
particularly volatile investments, you orbit and a second in the pipeline. Analysts
effectively take profits in investments at Galvan Research say that with the first
that have done well and shore up those satellite successfully launched, the compa-
that have done badly but might still ny will be viewed by analyst and the mar-
recover. Over time, that helps you ride kets alike as a maturing satellite
out volatility and also, at least according communications provider. “This alone will
to some, increase your performance. prompt a near-term re-rating of the stock
Thanks to their relatively low transac- and will in our view propel the share price
tion costs, ETFs make that quite easy to to new highs long before HYLAS 2 [the
do – meaning that even small investors second satellite] reaches the launchpad,”
can build and maintain a well balanced Galvan says. Spreadex quotes a rolling
portfolio with an appropriate level of spread of 719.1p-730.4p.
risk. Markets went a little crazy yesterday
Investors should also remember to afternoon after the news came through
consider all of their assets, including that the US said that it was prepared to
very illiquid ones like houses and life make additional contributions to support
insurance, when building a portfolio. European bailouts. Stocks and commodities
ETFs are best considered as a way to plug rallied and the dollar got smashed. Yet in
holes in a broader life investment plan. spite of this shoot higher, sterling-dollar
Thanks to their liquidity and the range still failed to take out the important
of markets they offer access to, they can $1.5640 level for the second time in a day.
be very useful. Traders should look to sell further rallies in
Effectively planning for retirement is the $1.5620-$1.5640 area. Spread Co
more than just selling stocks and buy- offers a spread on sterling-dollar of
ing bonds. But with financial markets $1.5612-$1.5614.
exceptionally volatile at the moment,
having a well balanced and properly Jessica Mead
managed portfolio is vital.
| Careers
1. ASK “WHY?”
If you think that something is wasteful,
Some come from cultures where it is dis-
respectful to criticise. These are corrosive
ideas that you have to change. Reiterate to
don’t accept that it is “just the way we do staff that you are all in business together –
it here”. Bad habits can become lower costs and higher profits mean more
engrained. In her book 100 Great Cost- money for everybody. Explain that man-
Cutting Ideas, Anne Hawkins tells the agers can’t make savings on their own, Packaging can be The key here is to go and look at the way Make sure people understand that, and
story of a technology manufacturer which but that they need the input of the people a waste of money the customers are using your product. talk about timescales and follow-on
had been including needless technical on the ground, and communicate that This is the best way to work out what actions from the start.
information with all its products for 15 you are a team. Picture: GETTY they do and don’t value.
years, at massive cost. The best way to spot
these sorts of inefficiencies is to bring in
4. MANAGE EXPECTATIONS 5. WATCH YOUR MAVERICKS
somebody from another part of the organ-
isation to look at processes. They are more
likely to ask the fundamental question:
3. DITCH UNLOVED EXTRAS
It can be tempting to over-deliver on
Not all your cost-cutting tactics will have
immediate effects, so make sure every-
Every organisation has people who break
the rules and appear to get results, but
you need to check if these are results you
“Why do we do this?” things like pretty packaging, but if cus- body knows that some of your changes want. They might make deals from per-
tomers aren’t using some parts of your will only see returns in the long-term. sonal contacts, but does chasing the
A disappointing bonus
should be a call to action
worries swiftly infect every part of our
Tra
inin
g
MS life. If you’d already spent assuming a
fes
sio
nal c bigger windfall, act now to cut your out-
goings, say, with more modest
Pro
Christmas presents or a staycation in
Cornwall instead of a fancy fortnight in
the Bahamas. Learn from Ireland’s mis-
takes.
Check the environment. If the reason
OCTAVIUS BLACK for your low bonus is the performance
of the whole organisation or depart-
ment, then assess the chances that this
Stand out from the crowd START will be any different next year. If the
H
OW did you feel when Santa leadership has a credible plan to turn
JANUARY failed to come for the first time? things around, then stick with them. If
with an MSc+ 2011
Of course, you know that Father
Christmas is a fiction; you are
even warned that he isn’t coming this
they’re relying on a change in the mar-
kets or other circumstances beyond
their control, it may be time to look else-
An MSc is a great introduction to a new career, but we know that to stand out Apply by year. But the reality that he has gone for- where.
from the crowd and be ready for employment you'll need something extra in an January 21st ever only really hits home when you Find out what will secure a bigger
ultra competitive job market. That's why we've designed the MSc+. wake up on Christmas morning and bonus next year. Ask your manager for
find there’s nothing at the end of your objective measures that you will need to
As well as being taught by industry professionals in the heart of the City of bed. deliver against and subjective advice on
London, for January 2011 we're offering additional specialist training (such as Getting a lousy bonus can arouse sim- how to manage your reputation along
negotiation, management and networking) worth £2,000 for no extra cost. ilar feelings. The good news is that while the way. If their answers aren’t convinc-
This will equip you with the professional skills to improve your career prospects. we can’t bring the reindeer back down ing, then seek out people who’ve done
the chimney, there’s plenty we can do to well and uncover what they did.
get over an unexpectedly low bonus. Get going. The journey to a stellar
MSc Finance | MSc Management | MSc Marketing Here is a plan for how to cope with a dis- bonus next year has already started.
appointing compensation round. Focus on three things: the skills you
For an MSc worth more www.bpp.com/cityam As a start, get the facts. Seventy-five need to acquire to raise your underlying
per cent of us think we’re above aver- contribution, the inputs that are most
or call 0845 078 0936 age (and 90 cent of us think we’re likely to affect the outcome, and the way
above average drivers). Find out how you conduct yourself.
your performance actually compared Is this year’s bonus a blip or a trend?
Undergraduate MASTERS Law Professional Learning Professional with your peer group. Maybe you were You decide.
degrees DEGREES qualifications qualifications media development fairly rewarded for what you delivered. Octavius Black is CEO, of The Mind Gym
Sort your personal finances. Money www.themindgym.com
CITYA.M. 2 DECEMBER 2010 City Focus | Careers 25
English shoe-makers
THESE THINGS I KNOW | are talented, but often
can’t sell themselves
TIPS FOR GETTING ON IN THE CITY
Picture: GETTY
First develop a
skill, and then
add knowledge
COMBINE DEEP SKILLS AND WIDE
KNOWLEDGE. They say that you have
to paint a thousand pictures before
you can produce your first master-
piece and it’s true; until you have
made 30 deals and watched them
progress for five years, then you don’t
know what can happen.
NATHAN BROWN You have to work hard to develop
deep skills, but then marry them
FOUNDER OF LUXURY SHOE BRAND with broad experience. English shoe-
LODGER makers are as skilled as you can get,
but they would have more success if
REMAIN OPEN TO OPPORTUNITIES. they learned about marketing and
Some of the best things that have branding. For example, I always keep
happened to me have come from up to date with the technology indus-
oblique angles. Opportunities come try, because it is so fast-moving and
out of nowhere and you have to be disruptive. You can’t be an expert in
prepared to open yourself up to them everything, of course, but if you have
and investigate. a wide-ranging curiosity you can add
new lessons to your core skills.
EXPLORE POTENTIAL LEADS quickly
and ruthlessly and shut down any- I HATE “ALMOST”. In business, and
thing that doesn’t have potential. certainly in the world of fashion and
Otherwise it’s a distraction. There are luxury it’s the final 1 per cent that
lots of things that merit a quick look, makes all the difference. At Lodger
but if you are constantly searching we made a classic wing-tip Chelsea
for new possibilities, you’ll never get boot, and it took us a year to get it
anything done. right. The first one we did was good,
but the eighth was perfect.
WORK HARD. Most people are lazy. In order to stand out in a competitive
Most don’t want to put in the last two marketplace you have to be 100 per
hours on a project, or won’t wake up cent all the time. I hate things that
30 minutes earlier to do emails or are almost right.
prepare for a meeting. I’m not a It infuriates me to see something that
workaholic, but my success has come is almost beautifully done, but
from a willingness to do the things stopped short. Either do it right, or
that many others won’t. don’t do it at all.
W
HILE turkey and Christmas pud-
ding are held back for the meal Fortnum’s St Clement’s pies are delicious –
on the big day, mince pies are big, crumbly pies brushed with just the
the real staple of the festive sea- right dusting of sugar, while a citrusy sur-
son. People who wouldn’t normally dream prise lurks inside, where an abundance of
of a mid-afternoon snack will suddenly orange and lemon peel adding aromatic
find themselves gobbling down piles of loveliness. Classy.
pastry and fruity mincemeat, while every www.fortnumandmason.com
cocktail party and seasonal bash is over-
flowing with them. But all mince pies are MARKS & SPENCER, £2.99
not created equal – far from it. So we’ve
risked our waistlines to pick through some
hhhhh
of the best, and offer a little guidance for M&S has come up trumps with its top
those hosting Christmas parties, or just tier Collection mince pies. The best thing
sneaking in a cheeky pie before bed. of all is the sheer boozy brilliance of the
mincemeat, while the glazed, rustic pas-
try is crispy and flavoursome. There’s
LAVERSTOKE PARK FARM, £10.50 also a collection of 12 mini mince pies in
hhiii different styles (£4.99), in which the use
of pecan nuts as a topping for four of
Large, crusty and uneven, Laverstoke’s them is sheer genius.
Luxurious mince pies look terrifically www.marksandspencer.com
enticing – until you find out that most of
the pie is pastry. As you’d expect from WAITROSE, £1.29
these specialists in organic produce, the
mincemeat is pretty good – fruity, boozy,
hhiii
not too sweet. But all we’re really left We expected Waitrose’s offerings to be a
with is the taste of flour from the pastry cut above those from other supermar-
overload – and they’re rather pricey too. kets, but they weren’t. They’re a gener-
www.laverstokepark.co.uk ous size and look nice, but all we could
really taste from the gloopy mincemeat
SELFRIDGES, £5.99 was sugar. Unexceptional in the
hhhii extreme.
www.waitrose.co.uk
These look a little too uniform for our
liking, though the softish pastry has a DUCHY ORIGINALS FROM WAITROSE, £3.99
fine buttery taste and melty texture.
Here’s the problem though: the pie actu-
hhhhi
ally sags in the middle due to a lack of The pastry, though delicious, is very filling
filling – we reckon barely a teaspoonful. – it’s more like shortbread than pastry.
Shame, because it’s good, sweet mince- There was a good amount of mincemeat
meat, and the overall taste is superb – a inside, and while it had plenty of fruit and
hit of fruit and spice with a hint of deca- wasn’t too viscous like some of the others,
dence. If only the mincemeat portions it was bland. A rather polite mince pie.
were that bit more decadent too. www.waitrose.co.uk
www.selfridges.co.uk
ABEL & COLE, £4.49
WHOLE FOODS, £6.99 hhhhi
hhhhi It’s always good to see a mince pie that rises
We tried two versions, with wholemeal in the middle because it’s got so much
pastry and with white pastry – and both mincemeat packed into it, and the mince-
were superb. The pies are topped off with meat in A&C’s Luxury pies doesn’t disap-
a pastry star that just about sits over the point: it’s chunky, full of apple and raisins,
huge scoops of mincemeat. And boy, and substantial. These feel handmade and
what mincemeat – chunky, wholesome, artisanal, and are very satisfying.
firm, and free of the sickly sweetening www.abelandcole.co.uk
OUT OF OFFICE
TIMOTHY BARBER
ROMEO & JULIET AT THE ROUNDHOUSE POP-UP: PETER JONES FOR MEN
After its highly acclaimed 2008 season, Sloane Square department store Peter Jones
the RSC is returning to Camden’s has a solution for men who are given cold
Roundhouse with a ten-week season of eight shivers by the very thought of Christmas
productions. Kicking things off is Romeo & shopping. It has set up a special room with
Juliet (right, 30 Nov-01 Jan), directed by the an edited selection of the best Christmas
prolific and brilliant Rupert Goold. Other pro- gifts, and personal shoppers will be on hand
ductions to come include The Winter’s Tale, to give one-on-one guidance to chaps need-
Julius Caesar, Antony and Cleopatra, Hamlet ing a bit of present-buying inspiration.
and King Lear, each of which will be making There’s also a chill out zone for shoppers to
the most of the Roundhouse’s unique environ- relax in, with leather sofas, table football and
ment. Until 5 Feb, Roundhouse, Chalk Farm pool, Wii consoles and video games. Peter
Road, NW1 8EH. Tickets £10-£40 from Jones, Sloane Square, SW1W 8EL.
www.roundhouse.org.uk www.peterjones.co.uk
CITYA.M. 2 DECEMBER 2010 Lifestyle | Books 27
SKY SPORTS 1 BRITISH EUROSPORT BBC THREE HISTORY Know I Was Pregnant 10pm
SATELLITE & CABLE
7pm Sky Sports News at 7pm Test Cricket: Sri Lanka v 7pm Mad About the House 7pm How the Earth Was Made Paralysed and Pregnant with
Seven 7.30pm Premier League West Indies. 9pm Fight Club: 8pm Young Plumber of the 8pm Ice Road Truckers 10pm Twins 11pm Your Kid Ate
World 8pm The Rugby Club The K1 World Max event in Year 9pm My Boyfriend the Oil Spill: The Exxon Valdez What? 12am I Didn’t Know I
9pm Ringside 10pm Time of Japan. 12am-12.30am War Hero 10pm EastEnders Disaster 11pm Decoding the Was Pregnant 1am Paralysed
Our Lives 11pm-6am Live Test Eurosport for the Planet 10.30pm Russell Howard’s Past 12am Ice Road Truckers and Pregnant with Twins 2am
Your Kid Ate What? 3am 10 AT HOME WITH THE GEORGIANS
Cricket Good News 11pm Family Guy 1am Grand Central Station
ESPN 11.45pm Freak Like Me 2am Lost Ships 3am-5am
Years Younger 4am Portland BBC2, 9PM
SKY SPORTS 2 6pm Live UEFA Europa League 12.15am My Boyfriend the Decoding the Past
Babies 4.30am Baby Tales Amanda Vickery uses the diaries and
7pm ATP Tour Uncovered Football 8pm Live UEFA 5am-6am A Baby Story letters of Georgian era to explore how
War Hero 1.15am Russell
7.30pm Live Victory Shield Europa League Football 10pm
Howard’s Good News 1.45am DISCOVERY SKY1
the British obsession with homes
Football: England v Scotland Goal! 10.30pm MMA Live 8pm How Do They Do It? began 300 years ago.
(Kick-off 7.35pm). 9.45pm 11.15pm ESPN Kicks Extra Young Plumber of the Year 7pm Modern Family 7.30pm
2.45am Beyond Walford: Roxy 8.30pm How It’s Made 9pm The Simpsons 8pm Modern
Carling Cup Special: Action 11.30pm UEFA Europa Wheeler Dealers: 10pm Swamp
from the quarter-final ties. League Football 12.30am Press Mitchell 3.45am Love Me, Love Family 8.30pm The Simpsons
My Face 4.45am-5.15am Loggers:11pm Death Machines 9pm An Idiot Abroad 10pm
10.45pm The Rugby Club Pass 2010 1am Live NBA 12am Deadliest Catch 1am
11.45pm Ringside 12.45am Basketball 3.30am-6am Live Freak Like Me Raising Hope: Jimmy tries to
Bear Grylls: Born Survivor 2am baby-proof the house. 10.30pm
Sky Sports Classics 1am Live
NFL 4.30am-5am Premier
NHL Ice Hockey
E4 Industrial Revelations 3am A League of Their Own: With
League World LIVING 7pm Hollyoaks 7.30pm Friends World War Two in HD Colour Jack Whitehall and Michael
7pm CSI: Miami 8pm Drop 9pm The Big Bang Theory 3.50am Raging Planet 4.40am Owen. 11pm Wayne Rooney’s
SKY SPORTS 3 Dead Diva 9pm Nikita 10pm 9.30pm Meet the Parents Unsolved History 5.30am-6am Street Striker 12am NCIS: Los
6.30pm Live LPGA Tour Golf Chuck 11pm Criminal Minds 10pm Misfits 11.05pm This Is How Does That Work? Angeles 1am Road Wars LAW & ORDER: CRIMINAL INTENT
9pm Live PGA Tour Golf 12am 1am CSI: Miami 2am Exposed: England ‘86 12.10am Scrubs 1.50am Inside: Predator Task CHANNEL 5, 10PM
Golf 1.30am Golfing World Jordan 3am Charmed 4.40am 1.10am Misfits 2.05am This Is DISCOVERY HOME & Force 2.40am Oops TV 3.30am A student’s apparent suicide turns out
2.30am The Rugby Club The Hoff: When Scott Came to England ‘86 3am Glee 3.40am HEALTH Lost 4.20am Sell Me the to be murder, prompting Goren and
3.30am Race World 4.30am- Stay 5.30am-6am Home Reno 911! 4.05am Being Erica 7pm A Baby Story 8pm 10 Answer 5.10am-6am Are You Eames to investigate the complex
5am FEI Equestrian World Shopping 4.45am-6am Switched Years Younger 9pm I Didn’t Smarter Than a 10 Year Old? social hierarchy among the students.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
QUICK CROSSWORD
SUDOKU KAKURO
4 8 29 42 21 14 37 11
26 16
15 28
Place the numbers from 1 to 9 in each empty cell so that each 8
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 24 8
7 39 13
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 15 9
above or to the left of it. 31
You can only use the digits 1-9 11 35
and you must not use the
10 24
27 13
same digit twice in a block. 23
The same digit may occur 16 9
30 10
more than once in a row or
column, but it must be in a
10
6
34
16 17
separate block.
7 12 16
22 14
12 25
ACROSS DOWN
1 Occasions for buying at 1 In short supply (6)
WORDWHEEL E E
reduced prices (5)
4 Solid projectiles shot
by a musket (5)
2 Acquired
knowledge (7)
3 Prophet (4)
Using only the letters in the Wordwheel, you have 7 Rouse (6) 5 Trembling poplar (5)
ten minutes to find as many words as possible,
T R 9 Scheme (4) 6 Mentally healthy (4)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters M 10 Run competitively (4)
12 Walking-stick (4)
8 Country, capital
Windhoek (7)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
C O 13 Oval fruit with a very
large seed (5)
11 Feline mammal (3)
14 Person who cuts
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
G I 15 Relax in a chair (3) and sets panes
17 Remark made into windows
QUICK CROSSWORD 9 5 7 9 4 2 spontaneously (2,3) or doors (7)
& $ & + ( ( $ 5 / <
6 2 4 5 8 1 9 3 7 SUDOKU 19 Front of the human head (4) 15 Half a dozen (3)
1 2 4 6 3 1 3 16 Seven people
2 + / / , 21 Group of countries in a
1 4 6 7 8 7 9
0 8 ( 6 / , $ 6 % 2 special alliance (4) considered as
0 6 7 , 1 * 5 $ < 6 9 5 8 2 7 4 8
$ 5 7 , 6 7 0 ( $ / 3 9 3 9
23 Oxidisation caused by a unit (6)
18 Espresso coffee
1
' , /
/
/
(
5
%
+ (
(
6 8 6
3 4 1
9 8 2
2 4 5
9 7
2
4
1
6
WORDWHEEL
moisture in the air (4)
24 Smear with ointment (6) with milk (5)
7 $ 1 * , % / ( 2
& $ 3 ( 0 2 / ( 6 7 1 7 9 8 6 7 5 The nine-letter word was 25 Blue ___, flag indicating a 20 Harvest (4)
/ 6 0 ' + 2 6 1 4 7 5 9 3 8
TANGERINE ship is ready to sail (5) 22 Stuck-up person (4)
* < 3 6 < % $ 6 6 2 9 8 2 1 1 3
26 Explode (5)
Sport
29
Birmingham boss
Alex McLeish (inset)
hopes last night’s
violence will not
have a negative
impact on
England’s 2018
World Cup bid
Picture: PA/
ACTION IMAGES
FOOTBALL The FA were swift in releasing a statement The game itself was a lively affair with
BY JAMES GOLDMAN last night which read: “The FA will fully investi- Birmingham taking the lead through a
gate the matter in conjunction with the appro- Sebastien Larsson penalty, which was can-
BIRMINGHAM are through to the Carling Cup priate authorities. The FA abhors acts of violent celled out on the half hour by Gabriel
semi-final after edging out local rivals Aston behaviour.” Agbonlahor. The match was drifting towards
Villa at St Andrews, but victory was marred by Birmingham manager Alex McLeish admit- extra-time, but Nicola Zigic’s scrappy 84th
scenes of fan violence which are set to be inves- ted that the disgraceful scenes threatened to minute effort booked the Blues a place in their
tigated by the Football Association. drag English football “back to the dark ages” first league cup semi-final for nine years.
CRICKET TRADER OLLIE DREW HIGHLIGHTS THE BEST BETS AHEAD OF THE ASHES
SECOND TEST
Results
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HE first punches have been great position at the Gabba. England that will galvanise the dressing room. in the second innings. They could
thrown and, as England pre- will have been disappointed not to be It confirms what they believed: make changes but just don’t have
pare to start the second Ashes batting on the second day and were, that they can do this. They now know bowlers who will scare England.
Test tonight, it is Australia who frankly, staring down the barrel. that if they find themselves in trou- Phil Tufnell is part of Paragon Sports
are reeling from some body blows to But the way they came back, led by ble they are capable of getting 500-1 Management. For all your hospitality and
their confidence. Alastair Cook, was sensational. For to dig their way out of it again. event requirements please contact Paragon
The Aussies are used to starting Australia it was a massive kick in the Australia have major worries in on 020 83328640 or visit www.paragonhos-
with a win and got themselves in a teeth; for England, it was an outcome their attack, which proved toothless pitality.co.uk
something funkier with his fielding positions day went they did so well to not let it cost the plate in the most impressive manner pos-
after England’s attack had failed to dislodge them, because it was looking precarious. The sible, refusing to let their heads drop or Sunny intervals
them for a while, but he didn’t do much second Test will be completey different. become dispirited. Now all the England play-
wrong. I might have left the Aussies in the Adelaide might spin and won’t be as flat and ers have got into the Ashes their perform- PITCH
field for another half hour, but he got the hard a wicket as Brisbane, so an extra ances are likely to be even more Pity the bowlers. After toiling in
timing of the declaration about right. bowler is an option. accomplished. Brisbane, Adelaide looks likely to
live up to its reputation as being a
batsman’s paradise.
FOOTBALL
BY FRANK DALLERES caused by Panorama’s allegations of
corruption among ExCo members
ENGLAND’S hopes of winning today’s earlier this week, insisting: “We can
vote to host the 2018 World Cup trust every one of them.”
surged last night after frantic Beckham met several ExCo mem-
schmoozing and some late hiccups bers in an attempt to win over float-
from rival bidders appeared to turn ing voters, as did Prince William, who
the tide in their favour. rose at 7am for breakfast with
A stellar cast of ambassadors Paraguayan ExCo member Nicolas
including former England captain Leoz – one of those accused by the
David Beckham, Prince William and BBC programme.
Prime Minister David Cameron led an Cameron was similarly busy woo-
impressive charm offensive ahead of ing the 22 men who will take part in
today’s secret ballot of Fifa’s executive this afternoon’s vote and flew back to
committee (ExCo). Switzerland last night to continue his
And while England parachuted in efforts, having returned home for
its big hitters, key rivals Russia and Prime Minister’s Questions.
Spain/Portugal suffered from the The day did, however, end on a sour
damaging withdrawals of high-pro- note with crowd violence at the Former England captain Beckham was part of London’s successful bid for the 2012 Olympics, which also swung late on Picture: GETTY
file frontmen Vladimir Putin and Carling Cup quarter-final between
Cristiano Ronaldo. Birmingham and Aston Villa poten- LOWDOWN | HOW THE VOTE DRAMA WILL UNFOLD TODAY
Bookies slashed England’s odds tially underminding England’s claim
amid comparisons with London’s dra- to be offering a “fan-friendly” experi-
matic victory in the battle to host the ence. ● The four bidders will make their concluding appointment. fewest votes is eliminated and another
2012 Olympics, when Beckham and Russian premier Vladimir Putin final 30-minute presentations to the round of voting held until a majority is
Lord Coe engineered a late swing in pulled out of a planned trip to the executive committee, starting at 8am ●The all-important secret ballot of the achieved. In the event of a tie Fifa pres-
opinion in Singapore in 2005. gathering in Zurich, where he had GMT. 22 ExCo members then finally takes ident Sepp Blatter has the casting vote.
Beckham said: “It adds a hell of a been expected to present his coun-
weight to our bid to have the Prime try’s case in today’s final pitches.
place at Fifa’s headquarters on banks of
Minister and the future King of If that was not enough, Putin ● As pre-determined by a draw, Lake Geneva, with a majority needed ●The result – and that for the 2022
England on our side lobbying. I saw risked further damage to Russia’s oth- Holland/Belgium will make the first for victory. World Cup, which will also be voted on
that in Singapore, how having Tony erwise fancied proposal by releasing a pitch, with England in the penultimate today – is expected to be announced
Blair there supporting the bid was a bizarre statement in which he cried slot at 10am. Spain/Portugal go at 9am ●If no bidders have a majority – ie 12 sometime after 3pm, by Blatter at the
huge thing. It’s the same here.” foul play, saying ExCo members had and Russia have the much coveted votes – then the candidate with the Zurich exhibition centre.
The midfielder was at his diplomat- been “smeared”.
FOOTBALL
0 at Portman Road last night.
that horror show – Trott is the only about – we won’t be worrying about ARSENAL’S position as overwhelming West Ham’s reward for their 4-0 win
▲
CRICKET
newcomer – will return to the scene what’s happened in the past or what Carling Cup favourites was enhanced over Manchester United is a tie against
BY JAMES GOLDMAN of the crime when play gets under- happened in the last innings. That’s last night when they were paired with Birmingham. Alex McLeish’s side beat
ENGLAND batsman Jonathan Trott is way in the second Test today, but the finished as far as we’re concerned. Championship side Ipswich in the Aston Villa 2-1 in the Second City
adamant Andrew Strauss’s side are Warwickshire batsman, who now has “We showed great character the draw for the semi-finals. derby to qualify for the semi-finals.
made of stronger stuff than the one two centuries from two Tests against way we were able to get back into the The Gunners, without a trophy VIOLENCE MARS BLUES JOY: PAGE 29
that crumbled to an Ashes series defin- Australia following his heroics in game. There’s a good feeling in the since their FA Cup victory over
ing defeat in Adelaide four years ago. Brisbane, says the fightback in the dressing room at the moment – it’s a Manchester United in 2005, are now
From a position of total comfort on first Test highlights this England nice feeling having a settled XI and ideally placed to win their first silver- SEMI-FINALS | CARLING CUP
the final afternoon, England col- side’s never-say-die mentality. have a group who are working hard.” ware since they moved into Emirates
lapsed to 129 all out inside a single He said: “I don’t think anyone is While England are certain to name Stadium. Ipswich Town v Arsenal
session, Australia picked off the 168 worried about what happened four and unchanged side, Australia are set Ipswich, through to the last four for West Ham v Birmingham City
runs required in just 32 overs to claim years ago. We come to Adelaide with to axe Mitchell Johnson after he fin- the first time since 2001, are currently
a miraculous win and take an all but real determination and energy to ished the first Test wicketless and just four points outside of the First legs to be played: w/c 10 Jan
unassailable 2-0 lead in the series. hopefully go 1-0 up in the series. bring in either Ryan Harris or left- Championship relegation zone but Second legs to be played: w/c 24 Jan
Four of England’s top five from “That’s what we’ll be thinking armer Doug Bollinger. secured their place in the last four by