BUSINESS WITH PERSONALITY
INVESTMENT
Issue 1,183 Friday 23 July 2010
WALL ST CHEERS
BUMPER RESULTS
ECONOMY
▲
BY MARION DAKERS
WALL Street bellwethers cheered
investors with a raft of good results
last night, pushing up US indices and
raising hopes of a sustained economic
recovery.
Corporate stalwarts UPS, Caterpillar
and 3M all posted double-digit profit
growth for the last quarter, while
Microsoft surpassed Apple’s recent
sales to report a record rise in revenue.
The upbeat results helped catapult
the Dow Jones index two per cent
higher to 10,323.30. The S&P 500
index closed up 2.3 per cent at
1,093.67, while the Nasdaq rose 2.7
per cent to 2,245.89.
Only 397 stocks fell on the New
York Stock Exchange yesterday while
2,675 rose in the biggest rally in two
weeks, despite gloomy data on the
housing market and jobs.
UPS, the world’s largest delivery
company, unveiled a 90 per cent
increase in profit for the latest quar-
ter, up to $845m (£554m), and report-
ed earnings per share of 84c – far
above analyst forecasts of 77c.
The parcel firm – seen as a barome-
ter of business demand – credited a
40 per cent boost in Asian business
for the massive rise, which sent
shares soaring 5.2 per cent to $63.99.
Construction equipment maker
Caterpillar also topped expectations
with a 91 per cent surge in net
income to $707m, thanks to expan-
sion in China and Latin America. The
impressive results prompted the firm
to raise its annual profit forecast by
$1bn.
ANALYSIS l Microsoft
32 $
30 25.91
22 Jul
28
26
24
22
26 Apr 14 May 4 Jun 24 Jun
FTSE 100 ▲ 5,313.81 +99.17 DOW ▲ 10,322.30 +201.77 NASDAQ ▲ 2,245.89 +58.56 £/$ ▲ 1.53 +0.01 £/¤ ▲ 1.18 +0.01 ¤/$ ▲ 1.29 +0.01
CATHERINE ZETA-JONES BANK GLOOM
GOES ON THE REBOUND CREDIT SUISSE
FAILS TO BUCK
FILM REVIEWS P21 THE TREND P5
www.cityam.com FREE
City doubts
over Euro
stress test
results
▲
BANKING
BY VICTORIA BATES
EUROPE’S much-vaunted stress tests
have met with deep scepticism in the
City ahead of the publication of the
results today, with concerns rife that
the test criteria will prove too lax to set-
tle anxieties over the health of the
region’s banks.
Market observers yesterday levelled
criticism at the Committee of
European Banking Supervisors for
watering down the tests. Banks have
been asked to forecast their extra fund-
ing needs under a range of scenarios,
including a double dip recession and
huge losses on government bonds.
Investors baulked at the likely lack
of comprehensive disclosure on banks’
exposure to sovereign risk in the wake
of the Greek crisis. They also said the
use of core tier one capital ratios as a
basis for the tests would have been bet-
ter than the less rigorous standard of a
tier one capital ratio of six per cent.
Officials from the affected countries
have insisted that the majority of
banks will pass the tests comfortably,
with the exception of nationalised
German lender Hypo Real Estate.
Microsoft boss Steve Ballmer surprised markets with sales that beat arch rival Apple Picture: REUTERS Emily Adderson, manager of the
Henderson global financials fund, said
And in a sign of renewed consumer the firm raised a greater-than-expect- Microsoft smashed expectations with the template for the tests looked over-
confidence, 3M – which makes every- ed $13.5bn for its new buy out fund, a 48 per cent annual rise in quarterly simplified. “Most of the banks appear
thing from Scotch Tape to TV parts – giving it a war chest of $29bn. profits, thanks to massive sales of its to have passed, but there’s a feeling
reported a 43 per cent profit increase There were some gloomy notes, new Windows 7 operating system. Its that if you are going to have these
to $1.12bn for the quarter and upped however. Amazon missed its profits $16bn revenue beat Apple’s results on tests, there needs to be an element of
its profit forecast for the year. target due to rising costs and disap- Tuesday, which chief executive Steve cleansing to them,” she said.
Private equity group Blackstone pointing sales of its Kindle e-book Jobs had described as “phenomenal”. David Sayer, global head of banking
also surprised analysts by posting reader. Shares fell 14 per cent in after- “It looks really good,” said Jefferies at KPMG, added that the tests “need to
$205m net income for the quarter, hours trading. & Co analyst Katherine Egbert. be, and be seen to be, robust enough to
with a jump in its property portfolio However, other technology firms “There’s not a lot not to like.” expose obvious weaknesses in some
credited for the 12 per cent rise. And posted blockbuster revenues. US MARKETS: P16 banks’ positions – there will have to be
some relative underperformers”.
ANALYSIS l UPS ANALYSIS l Caterpillar ANALYSIS l 3M Last night, officials were unclear on
72 $ 75 $ 68.00 90 $ 84.75 how much detail banks should be
53.15 22 Jul 88 22 Jul forced to give on their sovereign debt
70
22 Jul 70 86 holdings.
68
84
66 65
82 Henderson fund manager
64
80
62 60 Emily Adderson said the
78
60 76
stress tests should involve
55
58 74 an element of “cleansing”
56 50 72 among Europe’s banks
15 Jul 26 Apr 14 May 4 Jun 24 Jun 15 Jul 26 Apr 14 May 4 Jun 24 Jun 15 Jul 26 Apr 14 May 4 Jun 24 Jun 15 Jul
Certified Distribution
31/05/10 till 04/07/10 is 103,725
 2 News
Strong US profits good for recovery
EDITOR’S LETTER
ALLISTER HEATH
TWO major stories have been domi-
nating market sentiment this week.
The first was the run-up to the
Eurozone bank stress tests; we will
know results this afternoon but few
are convinced of their rigour. It won’t
quite be a whitewash but many Club
Med banks will be let off too easily.
The second story has been the US
earnings season; these days, the single
most important variable determining
whether the UK markets open up or
down is the previous night’s perform-
ance on Wall Street.
I have argued numerous times in
7th Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
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Email: news@cityam.com www.cityam.com
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News Editor Ben Griffiths
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Associate Editor David Crow
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WHAT THE OTHER PAPERS SAY THIS MORNING
TARGETFOLLOW SEEKS MPS’ HELP
The owner of a large property portfo-
lio that includes the Centre Point
tower in London has enlisted the help
of his local MPs to stave off adminis-
tration after loans of more than
£200m provided by Lloyds expired on
Thursday. Targetfollow, the Norwich-
based property developer managed by
Ardeshir Naghshineh, has been
locked in talks to extend its debt,
which totals almost £700m.
FAROE SHARES JUMP 23 PER CENT ON
DISCOVERY
Shares in Faroe Petroleum jumped 23
per cent after the Aim-quoted explor-
er announced its second North Sea
discovery this year. The company,
focused on the Norwegian North Sea
and areas around the Faroe and
Shetland islands, said the find at its
Maria South well contained up to
520m barrels of oil equivalent.
recent weeks that fears of a double-dip
have been overblown; we are facing
difficult times ahead but no return to
shrinking output, assuming no major
geopolitical catastrophe and that no
major country defaults on its debt.
What is interesting is that the US
earnings data is increasingly confirm-
ing this, and the markets have begun
paying attention after weeks of obsess-
ing about the chance of another reces-
sion. Caterpillar, 3M, UPS and AT&T all
beat earnings forecasts yesterday and
raised their outlooks; other firms have
also been doing well and those that
haven’t – such as Goldman Sachs – are
not being dragged down by the overall
economy. So while the US is slowing a
little, companies are recovering, sug-
gesting greater investment spending
and growth in the medium term.
There was even some good news in
Europe. The Eurozone’s July compos-
ite purchasing managers index, which
marries the manufacturing and serv-
ices figures, rose to 56.6 in July from
55.6 in June, its first increase in three
Storm delays
BP clean-up
BP IN CRISIS
BY EMMA SADOWSKI
BP WORKERS were preparing last
night to temporarily halt clean-up
efforts as a tropical storm brewing in
the Caribbean Sea threatened the oil
giant’s response to the worst environ-
mental disaster in US history.
BP stopped drilling its relief well
yesterday, while its slow-moving
skimming ships left the Gulf of
Mexico spill site to dock as choppy
waves disrupted operations.
There is a 20-30 per cent chance of
storm force winds of 39mph (63km/h)
or more hitting the area by Tuesday,
said the US National Hurricane
Center.
Admiral Thad Allen, who is leading
the government’s response to the
spill, said increasing confidence in
DIGITAL AD BOOST FOR NEW YORK
TIMES
The New York Times yesterday report-
ed its first rise in quarterly revenue
since 2007 as double-digit gains in
digital advertising helped offset a
continued slide in print ad revenue.
The publisher, which owns the epony-
mous paper, as well as the Boston
Globe and the About.com website, is
looking to new digital businesses to
replace revenues from an improving,
but still weak market in print adver-
tising.
VOLVO WOULD BE HAPPY TO SEE
BRAKES PUT ON CHINA’S GROWTH
Volvo, the world’s second-largest
truckmaker, would welcome a slow-
down in the Chinese economy and
other emerging markets amid con-
cerns over possible overheating,
according to the Swedish company’s
chief executive. Leif Johansson said
Volvo would have preferred “a little
less growth” in large developing
countries during the second quarter.
months. Industrial good orders rose
3.8 per cent in May, taking the year on
year rise to 22.7. Capital Economics
thinks second quarter Eurozone
growth may come in at 0.8 per cent,
which would be a pretty good result.
That said, the US news is far from
disastrous; the worst problem
remains the labour market, with job-
less claims still high. Existing home
sales fell 5.1 per cent last month but it
makes sense for the housing market
to be subdued given the crazed jour-
ney of the past few years. The
Conference Board’s leading indicators
index fell 0.2 per cent but this follows
a 0.5 per cent increase in May.
It is easy to confuse cautious, evi-
dence-based realism – my position –
with absurd optimism. Of course,
there are huge headwinds, monetary
policy remains ludicrously loose,
Chinese growth is slowing to a more
manageable rate, interest rates and
yields over all maturities have yet to
return to normal, the first burst of
post-recession growth is running out
the security of a new cap placed on
the leaking well had convinced scien-
tists it would be safe to leave the
capped well unmonitored for several
days. Allen warned a storm could
delay operations by up to 14 days. The
approaching storm has already
caused flooding in Haiti, Puerto Rico
and the Dominican Republic, and
threatens to be a massive set back to
BP’s attempts in stopping the leak.
This is second weather-related dis-
ruption BP has faced, after Tropical
Storm Alex threatened the clean-up
effort late last month.
US Admiral Thad Allen
warned a storm delay
could disrupt clean-up
operations by as much
as 14 days
EAST LONDON IS NEXT STOP FOR
PARISIANS
Weeks after Deutsche Bahn bought
up 20 per cent of the London bus
market, Paris’s largest public trans-
port company is planning to trump it
with a deal to become the capital’s
premier red bus operator. RATP is
understood to be in pole position to
buy the East London Bus Group,
which until recently was owned by
Australia’s Macquarie but is now con-
trolled by its lenders.
JAGUAR STRIKE THREAT AFTER STAFF
REJECT PAYOFF TERMS
Two thirds of Jaguar workers have
rejected the company’s proposals to
limit voluntary redundancy terms,
raising the prospect that strike action
will disrupt production next month.
The vote by 350 workers came after
Tata agreed to sell the facility for
£15m.
of steam and economies are much less
flexible than they used to be, which is
crimping the private sector and hit-
ting jobs creation.
But there is simply no evidence in
the data to back up the Armageddon
scenarios being dreamt up by the
perma-bears – at least not yet. My
biggest worries over the coming
months are not what concerns the
mainstream (which is obsessed with
the impact of fiscal tightening) but
rather what will happen to the US
money supply (there have been some
worrying signs that it may be drop-
ping uncontrollably) and the impact
of new rules on the US financial sys-
tem, including increased capital
requirements (which force banks to
lend less) and Barack Obama’s new
mammoth reform bill (which is
already threatening chaos for asset-
backed securities and could hit corpo-
rate financing). In the meantime, the
earnings numbers suggest a tradition-
al cyclical recovery; let’s enjoy it.
allister.heath@cityam.com
Ben Bernanke is prepared to step in if the economy falters
Jobs market worries Fed
US ECONOMY
▲
BY MARION DAKERS
FEDERAL Reserve chairman Ben
Bernanke told the US Congress yester-
day he was willing to ease monetary
policy even further if the economic
recovery wobbles.
Bernanke said the Fed “needs to be
taking steps to reassure the American
people and the markets that our fis-
cal situation is going to be well con-
trolled” during his twice-yearly report
to the House.
NO MONEY LEFT TO DEFEND BRITAIN
FROM EVERY THREAT
Britain cannot afford to protect itself
against all potential threats to its secu-
rity, Liam Fox, the Defence Secretary,
has warned. In an interview with The
Daily Telegraph, he said the dire state
of the public finances meant the
Armed Forces could no longer be
equipped to cover every conceivable
danger.
SCOTLAND ON THE BRINK OF A DOUBLE
DIP RECESSION
Scotland’s economy is teetering on
the brink of a double-dip recession
and the number of companies going
bust has reached record levels, official
figures have revealed. There was zero
Scottish growth in (GDP), which meas-
ures national wealth, during the first
three months of this year despite
Britain as a whole recording a 0.3 per
cent increase over the same period.
CITYA.M. 23 JULY 2010
NEWS | IN BRIEF
Desmond closes in on Five
Richard Desmond, the owner of the
Express newspapers, is understood to
have tabled a £104m offer for television
channel Five, and could be named as a
preferred bidder as early as today.
Despite a last-minute approach from
Channel 4, owner RTL is understood to
be much more interested in Desmond’s
offer, which is considerably higher. As
the smallest of Britain’s five terrestrial
broadcasters, the channel – which was
launched to much fanfare in 1997 – has
struggled in the face of the advertising
recession. RTL has written down the
value of the broadcaster by £402m in
the last two years.
Auditor regulations may change
Auditors need to be more transparent
about pay and non-audit services they
provide, according to the Auditing
Practices Board. In its consultation
paper out today, the APB calls for firms
to have their say on whether auditors
should be permitted to take on other
work such as management consultancy,
and if so how they should take steps to
remain independent. It has warned the
rules could change next year.
Picture: REUTERS
He expressed concern that the pri-
vate sector jobs market is not expand-
ing fast enough to dent
unemployment figures, which saw
464,000 new claimants last week, but
said he expects moderate growth and
subdued inflation over time.
Even with interest rates effectively
at zero, Bernanke argued there is
more the central bank can do to spur
growth, including lowering interest
rates on excess reserves or purchasing
yet more debt, though he warned
both options carry risks.
WHITE HOUSE TO ALLOW TAX CUTS
FOR WEALTHY TO EXPIRE
Treasury Secretary Timothy Geithner
said the Obama administration will
allow tax cuts for the wealthiest
Americans to expire on schedule
despite calls from a small but increas-
ingly vocal group of Democrats to
delay any tax increases. Geithner said
the White House will allow taxes on
top earners to increase on 1 January
2011, as part of an effort to help bring
down the mounting budget deficit.
MOTOROLA’S SUIT POSES CHALLENGES
FOR HUAWEI’S SUCCESS
Motorola’s lawsuit against Huawei
Technologies alleging a plot to steal
the US company’s trade secrets could
complicate years of largely successful
efforts by the Chinese telecommuni-
cations-equipment giant to demon-
strate itself as an innovator in the
industry.
CITYA.M. 23 JULY 2010 News 3

Boussard & Gavaudan trader

sets up hedge fund boutique
Garidel-Thoron, an ex-Goldman Sachs Goldman’s European single stocks

▲
HEDGE FUNDS
BY OLIVER SHAH
ONE of Boussard & Gavaudan (B&G)’s
star traders has left to set up his own
hedge fund, Occitan Capital, after
just over three years at the company’s
London office.
Financials specialist Thomas de
Garidel-Thoron stepped down as a
partner of B&G earlier this month,
according to a regulatory filing. De
staffer, has reunited with former col-
league Hervé Gallo to launch the ven-
ture, which will focus on arbitrage
opportunities in European equities
and derivatives.
His departure is a surprise for B&G.
The long-only alternative asset man-
ager hired the French national from
Goldman in 2007 to lead its UK and
financials equity trading. At the time,
it hailed his experience as head of
options desk, before which he spent a
four-year stint at Salomon Brothers as
senior options trader. De Garidel-
Thoron began his career as a lecturer
in economics at UCL.
Occitan will activate its first fund
in November, according to a report. It
will be fuelled with large pre-commit-
ments from two seed investors.
De Garidel-Thoron was unavailable
for comment. B&G declined to talk.

Ocado boss Tim Steiner (l) says the firm is undervalued at its current market price

Deadline over
for Ocado’s
retail shares
The retail part of the float – which
▲

RETAIL
BY STEVE DINNEEN
OCADO last night closed the window
of opportunity for retail investors to
cancel their application to buy shares
in the firm.
Analysts warned there could now
be a backlash among small investors
who do not realise they are over-pay-
ing on the market price.
Customers and staff had been invit-
ed to buy stock as part of the online
grocer’s IPO. However, when Ocado
was forced to slash its valuation at the
last minute owing to a lack of uptake
from institutional investors, it was
required to offer retail buyers a
chance to cancel their purchase.
Anyone who had bought in at the
200-275p price range was given the
option to buy shares at the lower valu-
ation of 180p. However, Ocado has
been left in a difficult situation as,
after two days conditional trading, its
stock has fallen almost 20p to 160.25p.
Ocado was warned against by its
banks – had already failed to attract
anywhere near the interest the firm
had hoped for, with reports suggest-
ing it had netted just £5m to £10m.
Ocado had hoped for £50m.
Ambrian analyst Nick Bubb said:
“Whether there will be a reduction in
the number of retail investors
depends on whether people realise
the shares have gone down.”
Bubb added: “If the investors are
aware of that, it’s unlikely they will
want to pay 180p a share unless they
have a very long-term view. Ocado
risks some negative feedback from
those who haven’t withdrawn their
application.”
Company sources said there was no
update last night on how many cus-
tomers had cancelled their purchases.
The flotation, which ended up at
the lower end of the revised range, val-
ued Ocado at £937m including £200m
of new funds.

Taxpayers set to profit from

bank asset protection scheme
cess,” Stephan Wilcke, the head of the
▲

BANKING
THE taxpayer should make a healthy
profit from an insurance scheme set
up to handle billions of pounds worth
of toxic bank assets, the head of the
body organising the scheme said yes-
terday.
The Asset Protection Agency –
which insures some £230bn worth of
risky assets held by Royal Bank of
Scotland -- was set up last December
under pressure from regulators.
I’ve previously said I was hoping
the taxpayer would end up with a
profit. I’m now saying I’m confident
the taxpayer will end up with a prof-
it, with a 90 per cent chance of suc-
Asset Protection Agency.
The Asset Protection Agency, which
runs the insurance set-up, said in its
annual report yesterday that the tax-
payer should end up with a profit of
£5bn from the scheme.
The Treasury has already received
£2.5bn for the scheme’s management
of risky assets held by Lloyds Banking
Group, and the Asset Protection
Agency said the Treasury should get a
further £2.5bn for handling the Royal
Bank of Scotland’s assets.
As of March 31 this year there were
£230.9bn of risky Royal Bank of
Scotland assets covered by the asset
protection scheme.
 4 News CITYA.M. 23 JULY 2010

Equitable Life policyholders CONRAD BLACK BACK IN COURT

hit by £400m cap on payouts

Britain’s oldest mutual insurer, The Conservative-Liberal Democrat
▲

INSURANCE
BY HARRY BANKS
POLICYHOLDERS of mutual insurer
Equitable Life, which nearly collapsed
a decade ago, face a £400m cap on
compensation payments for their
losses, the coalition government said
yesterday.
The figure produced by an inde-
pendent review is less than a tenth of
the £5bn of government compensa-
tion sought by policyholders.
with 1.5m policyholders at its peak,
almost collapsed in 2000 after being
forced to honour unsustainable guar-
antees stretching back 30 years.
It eventually closed to new business
in a historic financial scandal.
In 2008, parliamentary ombuds-
man Ann Abraham recommended
payouts for more than a million poli-
cyholders who lost pension savings,
but the then-Labour government said
it could not offer full compensation.
coalition said shortly after coming to
power in May that it would design a
“swift, simple, transparent and fair”
payout plan.
Yesterday Treasury Minister Mark
Hoban said a review by government
adviser John Chadwick had recom-
mended restricting compensation to
between £400m and £500m. Hoban
said he would reflect on the numbers
before publishing the final level of
compensation in October.

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media empire Hollinger International . Picture: REUTERS

Smaller banks
recover in US
we will see an improving environ-
▲

BANKING
BY HARRY BANKS
US REGIONAL banks, including
SunTrust Banks and PNC Financial
Services Group, reported improved
quarterly results and said credit loss-
es and funding costs are dropping,
triggering hopes that banks are stabil-
ising after years of pain.
Shares of SunTrust, PNC, KeyCorp,
Fifth Third Bancorp and Huntington
Bancshares rose strongly after the
banks reported quarterly results.
BB&T shares were lower after the
bank came in with higher profit but
fell short of expectations.
Regional banks are setting aside
less money to cover bad loans, and
some are seeing loan losses ebb.
Meanwhile, their funding costs are
dropping as depositors grow willing
to accept lower rates on their money.
“Margins will remain pressured,
but as sure as there is rain in October,
ment for lending too, sometime in
late 2010 or 2011,” said Gary
Townsend, head of Hill-Townsend
Capital.
Fifth Third reported its lowest level
of loan losses since the second quar-
ter of 2008; losses fell to $434m
(£284m) from $626m year-on-year.
Banks still face real headwinds,
however, as credit costs remain high
and loan demand is broadly weak.
Even if costs are declining somewhat,
it is not clear where future revenue
growth will come from.
“We’re in a very slow-growth econ-
omy, and people are not borrowing
money to expand or grow either indi-
vidually or corporately,” PNC chief
executive James Rohr said.
Pittsburgh-based PNC’s net interest
margin, a measure of the profit it
wrings out of money it borrows from
depositors, increased to 4.35 per cent
from 4.24 per cent in the first quarter.

SEC grants six-month reprieve

on ratings for asset-backed debt
filings, after the new legislation
▲

FINANCIAL SERVICES
ISSUERS of asset-backed securities in
the US have been given a six-month
grace period that allows them to sub-
mit regulatory filings without credit
ratings, amid fears they are unable to
comply with President Obama’s
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. tough financial reforms.
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Edinburgh EH1 1YZ. Available to homemovers, first time buyers, remortgage customers and buy to let customers. Offer available by phone, ble to get rating agencies to allow
online or in branch. We may monitor and record calls. Lines are open Monday-Friday 8am-8pm, Saturday 9am-4pm. Compliance number 10/04102 them to use their ratings in public
opened the door to litigation against
the likes of Moody’s, Standard &
Poor’s and Fitch if the securities turn
sour.
Marion Cross, the director of the
SEC’s division of corporate finance
said the new regulations will “pro-
vide issuers, rating agencies and
other market participants a transi-
tion period in order to implement
changes to comply”.
CITYA.M. 23 JULY 2010 Focus on Credit Suisse 5

Credit Suisse
CREDIT SUISSE'S NUMBERS QUARTER-ON-QUARTER

Net income Investment

banking income
t 24%
falls on weak to SwFr1.6bn Private
banking income
to SwFr784m
t 56%

t 2%
client activity
Net new assets Return
on equity
t 44% to SwFr874m
to SwFr 14.5bn t 4.5% points
to 17.8 per cent
▲

BANKING Christian Stark of stockbroker

BY OLIVER SHAH
CREDIT Suisse shares fell yesterday
after the bank disappointed investors
with news of ongoing weakness in its
private client division and crumbling
investment banking income.
Analysts had expected the slump in
pre-tax corporate finance earnings,
which more than halved quarter-on-
quarter to SwFr784m (£492m), but
were surprised by the poor perform-
ance from Credit Suisse’s traditional-
ly reliable private banking arm.
Pre-tax income slipped two per
cent to SwFr874m as flat revenues
were eroded by a nine per cent
increase in operating expenses.
Observers said the institution was
throwing resources at client relation-
ships at a time when Switzerland’s
reputation for secrecy could no
longer be relied upon to attract cash.
Credit Suisse’s margin on assets
under management was almost
unchanged at 120 basis points.
A Daimler Brand
Chevreux said: “Most people were Credit Suisse boss Brady Dougan hailed the second quarter numbers as “a resilient performance”.
looking for upside on the private
banking side and that’s probably the
main reason the shares went down.
Margins were flat, costs went up and
there wasn’t much sign of improve-
ment in terms of client activity.”
Credit Suisse’s group net income
This is no time for a bold expansion
came in at SwFr1.6bn, up one per DON’T say you didn’t see it coming. environment and the wealth man- ANALYSIS l Credit Suisse
cent year-on-year but down 24 per Like just about every investment agement arm continues to capitalise
CHF
cent compared to the first three bank that has reported before it, on the woes of arch rival UBS. 52 43.80
months of the year. Net inflows fell Credit Suisse found the second quar- Still, costs are creeping up quickly, 22 Jul
50
44 per cent quarter-on-quarter. Shares ter tough going. The reasons are well- increasing by 10 per cent on the pre- 48
in Credit Suisse dropped one per cent rehearsed: meeker clients lost their vious quarter, as the bank starts to
46
to close at SwFr43.80 in Zürich. verve and volatility took its toll. build out its fixed income, curren-
Chief executive Brady Dougan Profit before tax in the investment cies and commodities business. Such 44
described the figures as “a resilient bank was off from SwFr1.66bn last a bold play seems a little overzealous 42
performance during a difficult sec- year to SwFr784m, while net rev- in these uncertain times.
40
ond quarter for the banking sector”. enues tumbled 32 per cent to Instead, Credit Suisse should hold
But sell-side pundits were down- SwFr4.1bn. fire. Investors will find its 11.3 per
beat, seeing few causes for hope in Make no mistake: there was lots to cent Tier 1 capital ratio and 18 per 26 Apr 17 May 7 Jun 25 Jun 15 Jul
the second half. Peter Thorne of encourage investors that want to cent return on equity immensely
Helvea said all eyes would be on pri- stick by Credit Suisse. Its equities attractive in today’s climate.
vate client activity, but remarked it
was highly geared to broader macro-
division performed well, advisory
fees benefited from a thawing M&A
Ambitions of building a significantly
bigger bank should wait – for now.
BOTTOMLINE
economic conditions.
Analysis by David Crow

One day. Could be tomorrow.

The C-Class.
Visit www.mercedes-benz.co.uk/today

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Monthly payment* £299 Retailer deposit contribution** £1,335.52 On-the-road price £25,300 Total amount payable by the customer‡ £26,763
†
Customer deposit £3,699 Optional purchase payment £12,025 Total charge for credit £2,798.52 Total amount payable‡ £28,098.52
Number of payments 36 Acceptance fee £180 Amount of credit £20,265.48 Purchase activation fee† £95

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Official government fuel consumption figures in MPG (Litres per 100km) for the C180 K BlueEFFICIENCY Executive SE Saloon with manual transmission: Urban: 32.8 (8.6), Extra Urban: 54.3
(5.2), Combined: 43.5 (6.5). CO2 emissions: 154 g/km. Model shown is a Mercedes-Benz C180 K BlueEFFICIENCY Executive SE Saloon manual with optional metallic paint at £630.00. Total price: £25,300.00 on-the-road (price includes VAT, delivery, maximum Road
Fund Licence, number plates, new vehicle registration fee and fuel). *Based on a Mercedes-Benz Agility agreement. **The Retailer contribution is only available with this finance offer. †Payable if you exercise the option to purchase the car. ‡Includes optional purchase payment and purchase activation
fee. Example based on 10,000 miles per annum. Excess mileage charges may apply. Guarantees and indemnities may be required. This finance campaign is available for C-Class Saloon models, excluding special request engines, registered between 1st July and 30th September 2010. Offer cannot be
used in conjunction with any other published offer from the Retailer and is subject to availability. Terms and conditions apply. Prices correct at time of going to print. Credit provided subject to status by Mercedes-Benz Financial Services UK Ltd, MK7 8ND.
 6 Economics CITYA.M. 23 JULY 2010

NEWS | IN BRIEF
UK car production jumps in June
US HOME SALES HIT THREE-MONTH LOW
UK poised to record
its fastest growth
UK car production jumped 28.6 per cent
last month compared to June 2009, fig-
ures from the Society of Motor
Manufacturers and Traders (SMMT)
showed yesterday. Almost 118,000 cars

rate in three years

were produced in June, marking the
eighth month in a row that production
increased. However, it was at a slower
rate than the 54 per cent rise in May.

IMF cancels Haiti’s $268m debt

The International Monetary Fund (IMF)
announced yesterday that it had can- UK ECONOMY The London economy saw contin-

celled the $268m debt it was owed by
Haiti and approved a new loan worth
$60m to boost international reserves in
the earthquake-hit nation.
Eurozone factory orders rise
Eurozone industrial new orders rose in
May at their fastest annual rate in 10
years, data showed yesterday, outpacing
expectations and pointing to economic
recovery despite the currency area's
debt problems. Industrial new orders
increased 3.8 per cent month-on-month
and 22.7 per cent year-on-year, the EU’s
research body Eurostat said.
European PMI jumped in July
European purchasing managers' indices
showed private sector business activity
rose in July. Markit’s Eurozone Flash
Services purchasing managers’ index
▲
BY JESSICA MEAD
BRITAIN is expected to have recorded
its fastest economic growth in three
years between April and June when
second-quarter GDP figures are
released this morning.
Much of the acceleration is likely to
come from a rebound in industrial
output – economists estimate that it
expanded by around 1.2 per cent in
the three months to June.
The services sector, which makes
up around three-quarters of econom-
ic output, is also likely to have per-
formed strongly, despite a setback in
April due to disruption caused by
Iceland’s volcanic ash cloud.
SALES of previously-owned homes in the US hit a three-month low in June while new Analysts say that recent purchas-
claims for jobless benefits surged last week. Existing home sales fell 5.1 per cent to an ing managers’ surveys point to a
annual rate of 5.37m units, the National Association of Realtors said. Initial claims for modest improvement in the second
ued but slow growth in the second
quarter, the London Chamber of
Commerce and Industry said yester-
day in its quarterly economic survey.
The survey shows only slow growth
in the three months to June with a
small margin of improvement in the
key business indicators. Businesses
expecting to see an increase in
turnover rose from 57 per cent to 64
per cent. Just over half of firms
expected to see their profits increase.
But the outlook for the next 12
months is less positive. Bank of
England MPC member Spencer Dale
said in an interview published yester-
day that the near-term outlook for
growth and inflation had deteriorat-
ed over the past couple of months.
He expected inflation to remain
above target until the end of 2011 and

@
jumped to 56.5 in July from 55.6 in June. state unemployment benefits jumped 37,000 to 464,000 last week. quarter. said there were signs of softer growth.

Hot High Street cheers

Traffic! after World Cup fillip
@
RETAIL second quarter GDP growth – to be Britons are still spending. But econo-
▲

BY JESSICA MEAD
WARM weather and the World Cup
encouraged Britons back to the high
street last month, boosting retail sales
volumes by 0.7 per cent in June, offi-
cial data showed yesterday.
nüvi 1690 tops Which? The Office for National Statistics
sat nav test June 2010
published this morning – would be a
positive surprise.
Every retail sector experienced
growth of at least 0.6 per cent during
the month to June except for automo-
tive fuel sales, which fell 2.2 per cent
in June from May. The highest month-
ly growth occurred in household
mists warned that the trend lacks
momentum. Over the first half of
2010, retail sales excluding petrol
were down 0.4 per cent on the previ-
ous half.
“The softening in retail spending
has coincided with a stalling in con-
sumer confidence, and is likely to

@
Sat
(ONS) also revised up the May increase
Nav June 2010
to 0.8 per cent. Consequently, retail
sales volumes rose 1.7 per cent in the
second quarter compared to the first
three months of the year.
Analysts said this raised hopes that
goods stores, with sales increasing by
1.6 per cent – partly fuelled by a surge
in sales of televisions during the
World Cup.
Despite flagging consumer confi-
dence following the austerity Budget,
reflect increased pessimism on the
part of households about the econom-
ic outlook, probably linked to con-
cerns about government budget
cuts,” said Simon Hayes at Barclays
Capital.

CITY VIEWS: HAS THE SUNNY WEATHER MADE YOU SPEND MORE?
Interviews by Eliza Brown and Emma Sadowski

NICHOLAS POTTER | PALMARIUM GROUP

“I have been spending more because I am outside of the house more. When you’re
out you to tend to spend more on things like ice cream and beer. I tend to
Instant traffic updates help you spend less during the winter.”
hit the beach not the traffic.
ROBERT SIMPSON | VINE RESOURCES
nüvi® 1690 sat nav with Hot Traffic and
other nüLink! live services FREE for 1 YEAR*
™
“I should be spending less but this weather does makes me want to go out and
garmin.co.uk/1690
spend more on eating food and drinking wine. I also have to update my summer
wardrobe and so I am spending more on shorts.”

LAURA SAWYER | BUSINESS ENVIRONMENTS

www.cityam.com “On the one hand I am spending less because I bring in my own lunch every
*see website for details

AVAILABLE FROM:
MORE NEWS day so I can sit outside. But on the other hand I am spending more on going to
HALFORDS / AMAZON / CURRYS / JOHN LEWIS / BEST BUY ONLINE the pub and socialising.”
CITYA.M. 23 JULY 2010
Ed Whitacre is expected to take GM back to the stock market
GM snaps up
AmeriCredit
▲
AUTOMOTIVE
BY HARRY BANKS
US CAR giant General Motors (GM) yes-
terday said it would acquire auto
finance company AmeriCredit for
$3.5bn (£2.29bn) in cash in a deal
aimed at easing financing terms for
subprime car buyers.
The deal, which remains subject to
approval by AmeriCredit’s sharehold-
ers, would give GM a captive finance
arm for the first time since it sold off a
controlling stake in GMAC in 2006. GM
dealers have complained that tighter
financing terms have cost them sales
in a US car market that has failed to
deliver the strong recovery many had
anticipated in 2010.
GM, which was restructured by the
US government in bankruptcy, is
preparing for an initial public offering
later this year, people familiar with
those discussions have said.
Addressing its lack of a captive
finance company removes an uncer-
Future of MF Global fuel oil swap
desk in question as brokers resign
▲
FINANCIAL SERVICES
MF GLOBAL, the futures broker, suf-
fered a hammer blow to its London-
based fuel oil swaps operations after
the majority of the team resigned ear-
lier this month.
Eight out of nine brokers on the
fuel oil desk have left the firm, it
emerged yesterday, with sources sug-
gesting that the one remaining mem-
ber is also due to also leave .
News 7
Paulson plans to launch retail
version of flagship hedge fund
institutions. The Luxembourg-based funds. Paulson, which made a profit
▲
HEDGE FUNDS
BY OLIVER SHAH mirror would be wrapped in a regu- of £280m short-selling Royal Bank of
lated Ucits structure, a European Scotland in 2008, is the latest hedge
JOHN Paulson, the hedge fund tycoon standard for open-ended investment fund to seek a wider audience by pro-
who made millions betting against ducing retail versions of its vehicles.
British banks during the financial cri- John Paulson is design- Brevan Howard in the UK and
sis, is planning to launch a retail ver- America’s York Capital have also
sion of his flagship portfolio. ing a Ucits fund to be opened onshore mirrors.
New York-based Paulson & Co is launched in Europe in Robert Mirsky of consultancy Laven
marketing a mirror of its Advantage collaboration with Partners said Ucits funds were often
fund which would be based in Europe Deutsche Bank designed to attract institutional cash
and open to high street investors and rather than individuals’ money.
Picture: REUTERS
tainty for GM as it prepares for a stock
offering intended to reduce the US
government’s nearly 61 per cent own-
ership stake. Under terms of the deal,
GM would pay AmeriCredit sharehold-
ers $24.50 per share. That compares
with Wednesday’s closing price of
$19.70 before the deal was announced.
GM boss Ed Whitacre said: “This
acquisition supports our efforts to
design, build and sell the world’s best
vehicles by expanding the financing
options we can offer to consumers.”
ANALYSIS l AmeriCredit
$
26 24.00
22 July
24
22
20
18
26 Apr 14 May 4 Jun 24 Jul 15 Jul
Fantastic deals on these destinations
Alicante 3+ Hotels
from £45 per night
Alicante Car Hire
from £17 per day
Insurance
5 Star Rated Cover
A spokeswoman insisted the desk Book now and only Best Price Guarantee! from £5 single trip
has not been shut down, adding: “We pay on check-out (or we’ll refund double or £39.99 Annual trip
are still committed to that space.”
She added that the hiring freeze at the difference)
the firm did not necessarily extend to
areas where appointments were
deemed critical to continuing opera- We fly from Stansted, Luton and Gatwick. Price correct as at 12 July 2010. Flights available to book now for travel between
tions, though declined to comment 12 July and 30 October 2010. Hotel price based on 2 adults staying (in one room) 7 nights from 30 August 2010. Car price
on the staff departures specifically. based on economy 4 door car (picked up at the airport) with 7 days hire from 30 August 2010. easyJet is an Appointed
The news comes less than a month Representative of Mondial Assistance (UK) Limited which is authorised and regulated by the Financial Services Authority
after MF Global closed down its Asia (FSA). Variable charges for hold baggage apply and some payment methods attract a handling fee. See website for details.
fuel oil broking desk in Singapore.
 8 News
Continental figures
fly as traffic surges
▲
AVIATION
CONTINENTAL AIRLINES saw a dou-
ble digit growth in revenue after the
carrier experienced an increase in
passenger traffic and reduced its
capacity.
The airline reported an 18 per cent
hike in revenue to $3.7bn (£2.42bn)
during the last three months, while
passenger revenue rose 19.7 per cent
to $544m.
Continental, which is set to merge
with United Airlines, said it had filled
85 per cent of its planes, at the same
time cutting capacity by 0.7 per cent.
Excluding the $24m in merger
costs, net income for Continental
came to $257m during the quarter,
placing the airline back into prof-
itability.
Continental paid staff members an
extra $6m in cash for on-time incen-
tives.
Airbus deals total
$28bn
Virgin America signs
$3.3bn deal for 60
aircraft with Airbus
Biggest Airbus deal
with GE Aviation
Capital for
$4.9bn
Airbus signed deals for
255 aircraft
Airbus signs
over $28bn in
deals at show
▲
AVIATION
BY EMMA SADOWSKI
AIRBUS, which has already signed
$28bn (£18.3bn) in deals, topped the
last days of the Farnborough show
after announcing a bumper order
from Virgin America for 60 planes.
The EADS-owned manufacturer
said yesterday that its total commit-
ments, signed at the show, had
reached 255 aircraft valued at $28bn.
Airbus has seen firm orders for 133
planes worth more than $13bn,
helped by a mammoth order from GE
Aviation Capital for 60 A320 aircraft
worth $4.9bn.
Orders for a further 122 aircraft
have been agreed to through a memo-
randum of understanding, or pur-
chase agreement, valued at $15bn.
John Leahy, Airbus chief operating
officer – customers, said: “Before the
Farnborough Air Show we already
had 131 orders, and we predicted that
by the end of the week we’d double
that.
He added: “This clearly proves that
the market is back, and that our new
end of year target for over 400 orders
is within reach.”
Sir Richard Branson’s Virgin
Daniel Stewart Merchant back
denies cash call to profitability
▲
FINANCIAL SERVICES
STOCKBROKER Daniel Stewart yester-
day insisted that it had no need to
raise more funds for the business,
adding that April and May are expect-
ed to have been profitable months for
the company.
Daniel Stewart, which has suffered
during the financial crisis as liquidity
on the junior stock market all but
dried up, said its balance sheet had
been strengthened recently by a
£1.5m cash injection from Aim-listed
investment group Brainspark.
The company has also raised funds
in recent months via a share placing
with its staff.
CITYA.M. 23 JULY 2010
A spectator
admires Airbus’
A380 giant at the
Farnborough Air
Show as it draws
to a close.
Picture:
Micha Theiner
/City A.M.
America also signed up to a $3.3bn
order for 40 A320 single-aisle aircraft,
with buying potential for another 20
jets.
Branson said: “I am happy to cele-
brate my 60th birthday this week and
I can’t think of a better present than
getting 60 new planes.”
The deal will triple the size of the
US budget airline’s Airbus planes.
Meanwhile, US rival Boeing signed
a purchase agreement with
Azerbaijan Airlines to substitute two
next-generation 737 airplanes for one
767-300ER and two 767 freighters.
Azerbaijan Airline’s latest agree-
ment is on top of an existing order for
two 767-300ERs, two 767 Freighters,
two Next-Generation 737s and two
787-8s.
“With our centralised geographic
location, Azerbaijan is becoming a
busy hub in the region between east
and west and north and south,” said
Jahangir Askerov, president of
Azerbaijan Airlines.
The vast number of orders in the
commercial aviation sector has sig-
nalled a return to confidence
amongst manufacturers and airlines.
Business levels by the midweek point
of the show already totalled £37.5bn.
FINANCIAL SERVICES
FINANCIAL services group Merchant
Securities saw its business surge back
to profitability over the last year,
helped along by improved trading
conditions and the acquisition of
wealth manager Cavendish Young.
Merchant turned last year’s pre-tax
loss of £4.58m into a £0.64m profit for
the year to end of March. Revenue
increased by 40 per cent to £7.61m,
including a seven month contribu-
tion to the private client wealth man-
agement arm from Cavendish Young.
Chairman John Green said the
group will “continue to consider any
complementary acquisitions”.
CITYA.M. 23 JULY 2010
Commodities
staff slashed
at JPMorgan
▲
ENERGY
BY OLIVER SHAH
JPMORGAN has made around 50
commodities traders around the
world redundant as a result of its
takeover of Royal Bank of Scotland’s
Sempra Commodities, a source said
yesterday.
The American bank closed the
$1.6bn (£1bn) purchase of RBS Sempra
earlier this month. It inherited the
Scottish institution’s share of a joint
venture (JV) with US-based Sempra
Energy, comprising 500 employees
working across oil, coal, metals and
European power and gas businesses.
JPMorgan is understood to have
cut between 40 and 50 people since
the merger finalised. Some of those
made redundant were veteran
JPMorgan staffers, while others had
recently moved across from RBS
Sempra.
The integration comes at the end of
a long and winding deal process. RBS
put its share of Sempra on the block
last November after the European
Union ordered it to sell off assets as a
condition of having received taxpayer
help during the financial crisis.
JPMorgan was originally interested in
acquiring the entire JV, including
Sempra Energy’s share, but cooled
after US President Barack Obama
announced plans to crack down on
proprietary trading by banks.
JPMorgan eventually fought off
Deutsche Bank and Macquarie to buy
RBS Sempra in February. Head of
commodities Blythe Masters brushed
off concerns over the implications of
Obama’s so-called “Volcker rule”
three weeks ago, saying the law
would “not substantially” affect RBS
Sempra purchase.
Commodities boss
Blythe Masters said
tough rules on trading
would not substantially
affect JPMorgan
Dubai World owns the companies that built the palm islands
Dubai World ready to use
tribunal for deal on debts
FINANCIAL SERVICES
▲
BY HARRY BANKS
STRUGGLING state firm Dubai World
is to be ready to use a special tribunal
to force rebel lenders into line on
plans to delay repayment of $14.4bn
(£9.4bn) in debts.
The indebted conglomerate would
use a special tribunal set up by decree
to hear disputes over the delayed
repayment plan, a source familiar
with the matter said ahead of a key
Picture: REUTERS
creditor meeting in the emirate. A
banker in the meeting said that was
the message lenders got.
“Basically they said ‘this is the deal
and the alternative is we’ll invoke the
decree and then you’ll have to wait a
long time for your money back’,” said
a Gulf-based creditor bank. The Gulf
Arab emirate is labouring under
more than $100bn of debt, including
the $14.4bn Dubai World debt, which
is the company that owns firms that
built the palm islands project.
News 9
Swedbank tops
forecasts while
provisions drop
BANKING
▲
SWEDBANK yesterday posted a second-
quarter profit more than twice as big
as forecasts as loan losses related to the
recession-hit Baltic region, where the
bank is the top player, shrank sharply.
The Swedish lender, which expects
to post a full-year profit after spending
2009 in the red, was upbeat about the
rest of the year, forecasting a contin-
ued improvement in results, lower
loan losses and a net positive core
income.
Nordic banks were hit hard by the
financial crisis as a steep downturn in
Estonia, Latvia and Lithuania led to big
loan loss provisions. Profits were also
held back by low interest rates and
higher costs as banks extended their
funding duration to calm nerves about
short-term liquidity.
But Swedbank has been pulling out
of the crisis quicker than many expect-
ed. It said it posted a profit in Estonia
for the first time since 2008 in the sec-
ond quarter.
Sweden’s fourth-biggest bank
swung to an operating profit of 2.3bn
crowns (£203.2m) from a 1.8bn crowns
loss a year ago.
Loan losses including provisions for
possible future non-payment of loans
slid to 963m crowns, half an expected
2bn crowns loss and above the 2.2bn
crowns loss in the first quarter.
 The Capitalist
10
55 PER CENT BEER BREWER GETS
HAMMERED BY ANIMAL ACTIVISTS
A DOLLOP of mirth for the City yester-
day as it emerged that independent
brewery BrewDog is up to its record-
breaking tricks again.
BrewDog, which has twice before
held the record for the strongest beer
in the world, yesterday unveiled its
latest offering, a 55 per cent proof
blond ale retailing at £500 a bottle,
which it dubbed The End of History.
BrewDog’s Scottish founders James
Watt and Martin Dickie have happily
courted controversy before over their
super-strong beers, drawing criticism
from the likes of drinks industry
watchdog the Portman Group and
Alcohol Focus Scotland.
This time round, though, it’s the
animal rights activists who are up in
arms, due to the firm’s decision to
sell their latest offering encased in
the bodies of dead animals. That’s
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
right: only 12 bottles of the lethal
brew have been produced, and the
bottles have been made using seven
dead stoats, four squirrels and a hare.
Cue a volley of outrage from ani-
mal charities and the aforemen-
tioned Alcohol Focus Scotland, which
said the stunt was “another example
of this company pushing the bound-
aries of acceptability, all in the pur-
suit of cheap marketing tactics”.
The bottles for the world’s strongest beer were made using dead stoats and squirrels
BrewDog, for its part, remains calm
in the eye of the storm. “We wanted
to do something a little shocking, and
open people’s minds to the potential
of beer,” Watt tells The Capitalist. “This
is fusing art, beer and taxidermy – but
we obviously don’t want to kill any
animals. All the animals we used
were roadkill…” Appetising stuff.
BOOZY LUNCH
All too rarely do we hear these days of
a proper, old-fashioned City lunch –
the type when a well-oiled bunch of
co-conspirators roll into the restau-
rant at 12.30 and are still there at clos-
ing time. Thank heavens, then, for
Jonathan Keeling: 25 years in the City
Arden Partners boss Jonathan
Keeling, who celebrated 25 years in
the City yesterday with just such a
lunch at Gordon Ramsay’s Maze
restaurant in Mayfair. Keeling
was joined by SWIP’s head of UK
equities Peter Cockburn,
Schroders fund manager Andy
Brough, Aegon’s head of UK
equities Steve Adams, and
Ben Levenstein and Rob
Rees from USS.
Salmon, steak, Louis
Roederer champagne
and an extensive selec-
tion of wines later,
and the boys were
onto the sambuca and
the kümmel – which
explains why The
Capitalist was told that
Scotsman Adams
would be on the “9
o’clock air ambulance
out of City airport” yes-
terday evening. Needless to
say, the others didn’t make it
back to the office either,
though a couple of sore heads
this morning are a small price
to pay for a cracker of a silver
anniversary celebration.
BRAND POWER
A record oil spill, botched clean-
up operation and untimely
gaffes from chief Tony Hayward
CITYA.M. 23 JULY 2010
might have sent BP’s corporate repu-
tation lower than that of Goldman
Sachs, but it seems all is not lost.
An email pops into The Capitalist’s
inbox claiming that an astonishing 90
per cent of brand experts reckon BP’s
brand will recover completely over
the long term, while 57 per cent
would relish taking on the challenge
of masterminding the turnaround
themselves. Perhaps there’s hope on
the Horizon still.
SWANNING AROUND
Business secretary Vince Cable and his
fellow Twickenham locals can rejoice
after one of their favourite local pubs
was saved by a group of crusading City
folk.
Former Humberts Leisure property
consultant Anthony Miller heard
about the fate of the White Swan pub,
on the south bank of the river
Thames, and decided to invest in its
future by buying it out from owner
Enterprise Inns.
He and a group of fellow Humberts
investors acquired the freehold inter-
est and appointed their own manage-
ment team three months ago, and
have since been busy refurbishing the
pub’s interior, installing a piano for
locals to showcase their skills and put-
ting together a menu and selection of
real ales and lagers.
Nice work if you can get it,
eh?
HOME COMFORTS
Anyone ever wondered what
top-flight bank bosses put
in the luxury homes in
which they spend bare-
ly any time? Well, we
now have the answer,
thanks to the Luxist
blog – which has
posted an array of
pictures of the interi-
or of JP Morgan chief
executive Jamie
Dimon’s home on the
Chicago Gold Coast.
Dimon’s palace has a
sizeable rooftop terrace,
state of the art gym, eight
bedrooms and all the glitz
and old-school luxury you
could want, as well as a
painting of a suited torso
that looks suspiciously like a
self-portrait (see for yourself at
http://tinyurl.com/2dxlxug).
Dimon bought the house in
2000 for $4.7m, though the
price has dipped from $13.5m
to just $9.5m since he first put
it up for sale a couple of years
ago. Damn that pesky credit
crunch.
CITYA.M. 23 JULY 2010
Eurostar sees
ash cloud help
lift revenues
▲
TRANSPORT
BY EMMA SADOWSKI
ICELAND’S volcano Eyjafjallajokull
significantly bolstered Eurostar’s
business after the high-speed
European train operator carried
100,000 more passengers during the
first half of the year pushing revenue
up by 18 per cent.
Additional passengers looking to
avoid air travel during the last six
months boosted Eurostar’s revenue to
£404m.
Eurostar saw passenger numbers
climb six per cent to 4.6m during the
first half of the year and said there
has been a notable increase in cus-
tomers including a higher number of
Americans and Australians using
their trains.
Nicolas Petrovic, chief executive of
Eurostar, said: “Over the last six
months, we have delivered strong
growth in both business and leisure
bookings. As the economic environ-
ment has strengthened we have seen
an uplift in the business market and
News 11
Lonmin keeps
IMPACT OF THE VOLCANO ON EUROSTAR
Ran 70
extra trains and
2010 targets
Passenger
carried
100,000
extra passengers Revenue up
as sales halve
Numbers up COMMODITIES
▲
6% to 18% to LONMIN’S third-quarter refined plat-
inum sales almost halved the miner
4.6m £404m revealed yesterday following a closure
of its main furnace, but it reiterated
full-year sales guidance.
The world’s third-biggest platinum
an overall increase in the number of producer, which operates in South
passengers travelling.” Africa, had said on 24 May it would
The train group, jointly owned by need to send material out to be
British, French and Belgium bodies, refined by rivals to meet the compa-
said it is expecting to place a further ny’s sales target of 700,000 ounces of
20 trains on its Paris route during platinum for its year to end-
August due to increased demand. September. “On this basis, we contin-
“While our core routes continue to ue to expect to meet our sales target
be busy more and more people are of 700,000 platinum ounces,” it said,
opting to travel further afield and adding the cost of so-called toll refin-
explore new destinations by train, for- ing would be around $17.5m (£11.5m).
ward bookings are looking strong The adjustments were needed after
and with the increasing appetite for Lonmin suffered a setback with its
high speed rail travel in Europe, the troublesome No. 1 furnace which
trend looks set to continue,” said needed to be shut down again shortly
Petrovic. after being repaired.
Airlines including British Airways, Lonmin said sales of refined plat-
Air France, easyJet and Ryanair all inum fell 49 percent to 91,952 ounces
reported losses after the UK’s airports in the three months to end-June.
were closed for six days in April due “We are encouraged by the restate-
to the threat of volcanic ash. ment of sales guidance for 2010 and
Ryanair, which reported its first the limited impact on financials via
quarter results earlier this week, said third quarter toll treating due to
the volcanic disruptions dented its smelter problems,” analyst Tyler
profits, which fell by up to 24 per cent Broda at Canaccord Genuity said in a
and caused it to ground more than note.
10,000 flights at a cost of €50m The stock closed up 3.9 per cent at
(£42m). 1,495p.
 12 Consumer News
M&B sales hit by World Cup
▲
CONSUMER
BY JOHN DUNNE
PUBS and restaurants group Mitchells
& Butlers said yesterday sales growth
slowed in June and July as diners
were lured away by the attraction of
the World Cup.
M&B, which has over 2,000 pubs
and restaurants and whose brands
include Harvester, All Bar One and
Toby Carvery, said the World Cup had
a “negative impact” on the group’s
food sales.
Sales at outlets open for more than
a year were up 1.2 per cent in the nine
weeks to July 17, down from 1.8 per
Sports Direct
in profit rise
▲
RETAIL
BY JOHN DUNNE
FOOTBALL fans buying personalised
shirts and other World Cup gear,
helped to fuel a 50 per cent profit rise
for Sports Direct.
The retailer celebrated its
strongest-ever trading on the day of
the England versus USA game.
The company said World Cup
demand helped it maintain the sales
trends that saw post and annual pre-
tax-profit to £102.1m for the year to
April.
Sports Direct, which owns Sports
World and Lillywhites in Piccadilly
Circus as well as brands including
Slazenger, Lonsdale and Dunlop said
it was “operationally stronger than
ever”.
Sports Direct – which is 71 per cent
owned by Newcastle United owner
Mike Ashley – said it was aiming for
underlying earnings of £195 m for
this financial year.
Chief executive Dave Forsey said:
“Looking ahead, we are confident
that improved staff training and new
in-store merchandising areas put us
in a strong position for the next
phase of our growth.”
But the company warned that
some of the gains would be offset by
Kingfisher sees sales dip
as UK stores struggle on
▲
CONSUMER
BY JOHN DUNNE
B&Q owner Kingfisher said yesterday
it was on track to meet first-half prof-
it expectations, with cost cutting and
business improvement measures off-
setting a dip in underlying sales.
The firm, which runs Castorama
and Brico Depot chains in France said
sales at stores open at least a year fell
0.8 per cent in the 10 weeks to 10 July
its fiscal second quarter.
That compared with analysts’ fore-
casts for a broadly flat outcome and
follows a 1.8 per cent drop in the first
quarter. Underlying sales in Britain
fell 4.4 per cent, hit by a drop in
cent in the preceding 33 weeks.
Chief executive Adam Fowle said:
“When an England football match
kicks off mid-evening on a Friday or
on a Sunday lunchtime, which are
peak dining occasions, it knocks a
number of people back who would
normally come in.”
M&B, whose chains also include
the Sizzling Pub company, O’Neills
and the Premium Country Dining
Group, is reshaping itself into a food-
led business in a search for higher
margins.
Drink-led rivals such as Punch
Taverns and Enterprise Inns have
however seen their sales boosted by
England’s early exit from the World
Cup, with leftover stock piled high.
It added: “The negative impact of
clearing the excess stock will offset
some of the gains.”
The overall earnings rise may acti-
vate the company’s bonus scheme,
the company said.
Under the system, set up last year,
eligible staff will be in line for anoth-
er shares windfall worth 75 per cent
of base pay.
The firm fared better than most UK
retailers during the recession thanks
to its discount pricing and the weak-
ness of its main rival JJB Sports. Net
debt has been cut by 27.7 per cent to
£311.9m.
In March this year, Blacks Leisure
dismissed a £26m takeover approach
from Sports Direct.
ANALYSIS l Sports Direct
120
p 116.80
22 July
115
110
105
100
95
6 May 26 May 16 Jun 6 Jul
demand for kitchen, bathroom, bed-
room and building products as cau-
tious consumers shy away from large
purchases. But that was partly offset
by a 2.6 per cent rise in underlying
sales in France and a 0.8 per cent
increase in other international mar-
kets, which include Poland and
China. Kingfisher said gross profit
margins rose in both Britain and
France, lifted by cost cutting
“While we remain cautious about
the outlook for consumer spending,
well established self-help initiatives
leave us well-placed to continue our
good progress over the balance of the
year,” chief executive Ian Cheshire
said.
CITYA.M. 23 JULY 2010
Imperial Tobacco suffers
the World Cup.
as cigarette volumes fall
Fowle said underlying trading
remained strong and he was “very
confident” about prospects for the Chief executive Alison Cooper, who
▲
CONSUMER
fourth quarter. took over from Gareth Davis in May,
M&B scrapped paying dividends in IMPERIAL Tobacco, the world’s said: “Overall we are performing well
2008 to focus on paying down debt. fourth-biggest cigarette maker, said in what remains a challenging oper-
However, Fowle said the business cigarette volumes fell 4.3 per cent in ating environment.”
would make a decision on the possi- the nine months to June – a worsen- She added: “Our Global Strategic
ble resumption of payouts in the ing from a 3.7 per cent decline in its cigarette brands continue to grow
autumn, depending on it reducing its first half. and we saw some strong performanc-
unsecured bank borrowings to below Imperial, with cigarette brands es from a number of our regional and
£300m and on broader economic con- including Lambert & Butler, West and local brands.”
ditions. Gauloises, said declines in Russia, The company said its overall finan-
The company, serves around 130m Spain, Ukraine and the United States cial performance and position
meals and 575m drinks each year to were being partly offset by gains in remained in line with the board’s
its customers. central Europe. expectations.
NEWS | IN BRIEF
SABMiller beer volumes fall
Brewer SABMiller reported a
decline in first-quarter beer vol-
umes yesterday despite a World
Cup boost, after floods, national
mourning and a tax hike hit drink-
ing in key markets. The brewer of
Miller Lite, Peroni and Pilsner
Urquell said that underlying beer
and soft drink volumes were one
per cent down year-on-year.
Analysts were on balance expecting
fractionally lower lager volumes.
COMPANY IS However, chief executive Graham
Mackay said in a trading statement
71 PER CENT for its April-June quarter that lager
OWNED BY A 50 PER CENT volumes improved through the
NEWCASTLE PROFIT RISE quarter, showing growth in June.
UNITED FOR SPORTS Barclays analyst Alex Olroyd said:
OWNER MIKE DIRECT. “Volumes recovered in June and
that is probably the reason why the
ASHLEY shares are up a bit”
ANNUAL
SPORTS PRE-TAX- Champagne sees fizz return
DIRECT IS PROFIT TO Champagne makers Remy
Cointreau and Vranken-Pommery
AIMING FOR £102.1M FOR Monopole have posted quarterly
£195 M OF THE YEAR TO sales growth, signalling customers
UNDERLYING APRIL were returning to high-end brands
EARNINGS FOR after a lull during the financial cri-
THIS sis. Remy Cointreau, which makes
Piper-Heidsieck champagne, said
FINANCIAL sales of champagne rose 23 per
YEAR cent to £14m in its fiscal first
quarter to 30 June. Vranken-
Pommery said sales rose 52 per
cent to 66m in the quarter.
Chairman Paul-Francois Vranken
said: “Because of the crisis, con-
sumers temporarily switched to
cheaper brands. This phenomenon
is now receding. We’re seeing a
move back to the major brands
and cuvees de prestige.”
ANALYST VIEWS: HOW IS KINGFISHER HOLDING UP IN LEANInterviews
TIMES? by John Dunne
NICK BUBB |
ARDEN PARTNERS
JOSEPH ROBINSON |
VERDICT RESEARCH
“ We had hoped to see a small posi-
tive, on the view that the weather has been
“ Conditions for B&Q are looking
more challenging compared to this time last
helpful and the World Cup impact overstat- year, particularly in its showrooms cate-
ed. The UK is in fact disappointing, with gories, which will be up against tough sec-
B&Q like-for-like sales down by 4.3 per cent, ond half 2009/10 comparatives. Moreover,
” ”
albeit gross margins are good. The read- the business is facing weak consumer confi-
across for Homebase and Home dence and high unemployment.
Retail is negative.
RICHARD HUNTER | HARGREAVES LANSDOWN
“
In particular, the UK business remains under pressure, with management guidance understandably
cautious for the foreseeable future. The bright spot in the update arrived from France, where the Castorama
and Brico Depot chains produced a 2.6 per cent increase in sales. On the whole the market is positively dis-
”
posed towards the shares due to its geographical diversification, with some sporadic but rapid growth
patterns being seen in the likes of China and Poland. The general view is that the shares remain a buy.
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 14 Telecoms and Technology News
Rake: BT has hit a watershed Tough trading as Colt
▲
TELECOMS
BY STEVE DINNEEN
BT HAS reached a watershed this year
when it finally crawled back to profit,
according to its chairman Sir Michael
Rake.
Speaking at the firm’s annual
meeting Rake said BT had achieved
“year of delivery” as it turned a profit
and arrested its declining revenue.
He said: “A lot has changed since
last year’s annual general meeting
and I’m pleased to say that, from BT’s
perspective, a lot of that change has
been for the better.”
He praised the firm for cutting its
Nokia in crisis
as profits fall
sharply again
▲
TELECOMS
BY STEVE DINNEEN
PRESSURE on Nokia boss Olli-Pekka
Kallasvuo reached fever pitch yester-
day when the embattled phone maker
announced a sharp drop in second-
quarter profits.
The firm, which makes every third
mobile phone sold in the world, has
been rocked by two profit warnings
and a management shakeup in the
second quarter alone as it struggles to
keep pace with smartphone rivals
Apple and Google.
Nokia has already begun to send
out headhunters to replace Kallasvuo,
who has spent more than half of this
life at the company. He may be ousted
as early as this month.
Kallasvuo, a 57-year old former
company lawyer and chief financial
officer who married a veteran Nokia
attorney, told CNBC television that
talk of his exit was hurting the compa-
ny and had to stop.
A Nokia spokeswoman declined to
comment after the results on whether
Kallasvuo still enjoys board support.
Nokia’s underlying second-quarter
earnings per share fell 27 per cent
from a year ago to €0.11, in line with
market expectations.
AT&T enjoys halo-effect from iPhone Autonomy disappointed
as it posts better than expected profits by lacklustre results
▲
TELECOMS
BY STEVE DINNEEN
AT&T yesterday posted better-than-
expected profits and said it was more
optimistic on growth prospects for
the year.
The exclusive US provider for
Apple’s iPhone forecast strong earn-
ings per share growth for the full year
2010 after previously promising “sta-
ble-to-improved” results.
AT&T’s profit rose to $4bn (£2.6bn),
from $3.2bn in the same quarter a
cost base by £1.8bn in the last finan-
cial year and increasing its cash flow
by more than a billion pounds to
£1.9bn in the same period. He singled
out the turnaround of the firm’s
embattled Global Services division,
which had performed so badly it was
forced to axe former boss Francois
Barrault in 2008.
He said, “We have seen cost trans-
formation at Global Services, leading
to a marked improvement in prof-
itability. I am now in the happy posi-
tion where I can stand before you and
say that we have a very solid perform-
ance across all of our main operating
divisions”.
Nokia warned last month that
phone sales and profits in the quarter
would be weaker than earlier forecast,
with the Finnish firm forced to slash
prices to battle against Apple’s iPhone
and smartphones using Google’s soft-
ware.
Underlying second-quarter earn-
ings per share fell 27 per cent from a
year ago to €0.11, in line with market
expectations. Operating profit margin
at its key cellphone unit dropped to
9.5 per cent in the second quarter and
warned it could fall further in the
third quarter.
The firm is now resting its hopes
on its new N8 phone, its first using its
new Symbian software, which it says
will have a user experience superior
to that of any smartphone Nokia has
created.
Nokia shares have dropped around
20 per cent so far this year, strongly
underperforming the technology
index, which is up seven per cent.
Nokia boss Olli-Pekka
Kallasvuo looks set to
lose his job over the
Finnish firm’s continu-
ing poor form.
year earlier.
Revenue rose to $30.8bn from
$30.6bn in the same quarter the year
before.
AT&T said that second-quarter
comparisons are based on results
from continuing operations, which
excludes revenue from Sterling
Commerce, a unit it is selling to IBM.
However, AT&T’s growth of valu-
able monthly-bill paying wireless cus-
tomers was lower than analysts
expected
The operator’s addition of 496,000
Rake said the “achievements”
enabled BT to invest for the future,
reduce its debt, support its pension
scheme and reward its shareholders
with a progressive dividend.
However, he warned that while BT
was a “much better company than a
few years ago” it could not afford any
complacency.
Deep cuts and improvements in
service slowed BT’s drop in revenue to
just two per cent last year and the
company now predicts a return to
growth in 2012-13. Its sales for the
year totalled £21bn and it predicts
this will fall to around £20bn in the
coming year.
VODAFONE RESULTS EXPECTED TO BE POSITIVE
VODAFONE’S chief executive Vittorio Colao will today announce first-quarter results,
which are expected to show continued improvement in European revenue growth.
Service revenue is expected to marginally improve. German and Indian operations are
expected to show an improvement but its Spanish operations are set to continue to suffer
from the economic turmoil engulfing the country.
monthly bill paying customers,
known as postpaid customers, was
below the average analyst expectation
for 552,000.
But including prepaid services and
connections to devices such as the
Amazon.com electronic reader Kindle
AT&T said it added 1.6m new cus-
tomers in the quarter.
The firm has benefited from the
“halo effect” of being associated with
Apple’s new iPhone 4, despite the
much publicised antenna issues it
has suffered from.
profits drop 25 per cent
▲
TELECOMS
CITY of London Telecoms (Colt) yester-
day reported a 25 per cent drop in
profits, from £45.9m to £34.4m.
Total revenue also fell from
£817.4m to £794.2m in the six month
period. Voice revenue fell more
sharply, dropping nine per cent from
£345.6m to £314.4m.
The firm pointed to marginally
improved Ebitda margins and said it
is confident moving into the second
half of this year.
Picture: PA
▲
TECHNOLOGY
SOFTWARE firm Autonomy posted
forecast-lagging quarterly earnings
and lower margins, raising analyst
concerns that growth was slowing
and sending its shares sharply lower.
Shares in the group, which have
outperformed the FTSE 100 by 16 per
cent since the start of the year, fell as
much as 12 per cent yesterday as the
market expected more from the high-
ly-rated stock.
Autonomy, whose software search-
CITYA.M. 23 JULY 2010
Rakesh Bhasin, chief executive,
said: “These results are in line with
our expectations and our cautious
approach adopted for the first half of
2010.
“While Data and Managed Services
did not create the growth to cover
Voice decline at a revenue level we are
seeing positive signs in the market
which indicate an improvement in
the second half and into 2011.”
Colt provides businesses and
wholesale customers with network
and IT infrastructure resources.
NEWS | IN BRIEF
Motorola legal scrap with Huawei
US mobile phone maker Motorola has
sued China’s Huawei Technologies for
alleged theft of trade secrets, highlight-
ing the fast-growing Chinese firm's diffi-
culty in shaking the nation’s reputation
for piracy. In an initial suit, filed in 2008,
Motorola sued five of its former workers
for allegedly sharing trade secrets with
Lemko, which was also named in the
suit and has a reseller agreement with
Huawei. In the amended complaint, filed
on 16 July in a federal court in Chicago,
Motorola claimed an engineer shared
information about a Motorola transceiv-
er and other technology with Huawei’s
founder.
Google in court over privacy
Connecticut’s attorney general, who is
leading a 37-state probe of Google’s col-
lection of data from private Wifi net-
works, asked the internet search leader
on yesterday if it had tested the soft-
ware before using it. Attorney general
Richard Blumenthal also asked for the
names of the people responsible for the
software, which Google has said was
supposed to only use Wifi to determine
location, not to download personal email
and other data.
Amazon steps up ebook war
Online retailer Amazon.com said yester-
day it will exclusively publish digital edi-
tions of 20 classic books owned by the
Wylie Agency, including authors such as
Philip Roth, John Updike and Norman
Mailer, for the first time on its Kindle
electronic reader. Amazon’s move is a
sign of intensifying competition in the
crowded digital book format, including
Apple iPad and Barnes & Noble Nook e-
reader. The Wylie deal may set off a
race among the makers of electronic
readers to buy digital rights to classic
books that will help them to win more
customers. Kindle customers can down-
load the books for $9.99 (£6.50).
es and organises unstructured data
like emails and telephone calls, post-
ed adjusted earnings per share of 18p
on 13 per cent higher revenue of
£145m.
The company said its adjusted oper-
ating margin in the second quarter
was 44 per cent, down from 47 per
cent a year earlier, while it gross mar-
gin also fell, by two percentage
points, due to its sales mix.
It won contracts from companies
such as supermarket Sainsbury’s and
food maker Kraft in the quarter.
CITYA.M. 23 JULY 2010 News 15

Development Securities eyes £100m rights issue

PROPERTY Collins Stewart and the rights issue cases. Those projects, especially in
▲

BY JOHN DUNNE
BRITISH property firm Development
Securities yesterday said it planned to
raise about £100m through a share
placing and rights issue to fund
future projects.
The company, which specialises in
office and retail development proj-
ects, said it would place about 4.1m
shares at 250p a piece, a discount of
8.8 per cent to their closing price on
Wednesday.
Development Securities will raise
the remaining amount through a
rights issue of about 36m shares at
250p per share.
The placing is underwritten by
by Barclays Capital and Collins
Stewart, the company said.
Chief executive Michael Marx said:
“The plan was clearly explained to
our shareholders and they have been
very supportive. Raising this money
means projects can continue and it is
incredibly important in these diffi-
cult times.
“In general I think property is at
about the right price at the
moment – not too high or too low.”
The company has been responsi-
ble for numerous largescale projects
around the UK including in
Paddington in west London.
Marx added: “We are not talking
about prestige projects in many of
London tend to go ahead anyway MARK DICKENSON The team at Collins Stewart has
because property in the capital is so also been working in partnership
attractive. COLLINS with Barclays Capital – a common
“It’s the others which become diffi- STEWART approach as companies try to spread
cult to fund.” risk around, with the economy still
spluttering.
ANALYSIS l Development Securities The placing is expected to go
290
p 260.00 smoothly, with shareholders won
22 July over without any need for a hard
280
THE placing is being underwritten by sell. Development Securities needs
270
Collins Stewart. Mark Dickenson, the money to kick new life into proj-
260
head of corporate broking, and Bruce ects around the UK and Dickenson
250 Garrow have been working with and his team have used their expert-
240 Development Securities, assessing ise to steer the package through
230 the risk of the placing, and generally when other rights issues have been
220 oiling the wheels to make sure the hit by controversy and the ire of
rights issue happens. some shareholders.
6 May 26 May 16 Jun 6 Jul

Asset values BEST OF THE BROKERS

ANALYSIS l Reckitt Benckiser
3,700 p
ANALYSIS l Morgan Stanley
32
31
$
26.79
ANALYSIS l BHP Billiton
2,200 p
1,964.50

rise at Great
3,600 3,293.00 22 Jul 2,100 22 Jul
22 Jul 29
3,500
2,000
3,400 27
1,900
3,300
25 1,800
3,200

Portland trust 3,100 1,700

23
3,000
6 May 26 May 16 Jun 6 Jul 6 May 26 May 16 Jun 6 Jul 6 May 26 May 16 Jun 6 Jul

RECKITT BENCKISER MORGAN STANLEY BHP BILLITON

Execution Noble rates Reckitt Benckiser as JP Morgan Cazenove reiterates its “over- Citigroup rates BHP Billiton as “buy”, and
growth to support further price
“sell”, with a fair value of 3,106p. Execution weight” rating for Morgan Stanley, with a recommends a target price of 2,700p. Citi
PROPERTY
▲

BY HARRY BANKS
BRITISH landlord Great Portland
Estates said yesterday its asset values
had risen in its first quarter to end
June, at the same time noting a slow-
down in the volatile London property
market’s rebound.
In an interim management state-
ment, Great Portland Estates said its
portfolio valuation had risen 4.6 per
increases,” Courtauld said in the believes the SSL deal makes strategic target price of 3,300 cents. Morgan Stanley reports BHP’s June production was better,
statement. “Whilst we expect senti- sense, but cites the timing of the deal as reported better performance in fixed income but slightly below expectations due to
ment to remain relatively volatile in evidence of increased competition in the clean revenues than its peers, according to lower-then-expected iron ore and oil pro-
the near term, looking two or three company’s core categories and expects JP Morgan, and said it has positive trends in duction. Economic commentary remains
years ahead, we maintain our confi-
dence in London as a global financial continued evidence of this in second quar- wealth management and equities sales, and cautious on uncertaintly on near-term-
centre,” he said. ter results next week. an improving capital position. growth in the developed world, said Citi.
Courtauld saw rents rising over
this period, citing a prospective sup-
ply-demand balance that favoured
To appear in Best of the Brokers email your research to notes@cityam.com
landlords.

Aer Lingus hopes to break even in 2010

cent since 31 March on a like-for-like
basis.
Its estimated net asset value per
share was 295p at 30 June, up 4.2 per
cent in the quarter.
The company said it had completed
£165m of new property deals over the
Shares in Great Portland Estates
climbed 1.8 per cent on the London
market to close at 307p, valuing the
company at £942.7m.
ANALYSIS l Great Portland Estates AVIATION “Recent yield performance and For the first six months, average
▲

past three months.
Chief executive Toby Courtauld
said London’s property investment
markets had continued to recover
during the quarter, noting this was at
a lesser pace than the “unsustain-
ably” high rates of the previous two
quarters.
“We expect this less urgent mood
to persist for the balance of the year,
with investors looking to rental
330 p long haul load factors have exceeded long haul fares increased by 17.4 per
307.10 IRISH airline Aer Lingus said it expect- our expectations and the forward cent over the prior year supported by
320 22 Jul
ed to at least break even in 2010, after booking profile suggests that this improved business class performance.
310 first-half trading was boosted by strength should continue for at least It said it was too early to provide guid-
strong revenues and lower fuel and the third quarter,” the airline said. ance for 2011.
300
staff costs. Provided there are no significant Looking forward, the company said
290 The former state carrier, which has disruptions such as the ones caused that recent yield performance and
been cutting costs to survive competi- by the volcanic ash crisis, it said it long haul load factors had exceeded
280 tion from former suitor and share- expects “its 2010 operating result its expectations and it expected this
270
holder Ryanair, said trading in June (before exceptional items) should be trend to continue for at least the
26 Apr 17 May 7 Jun 25 Jun 15 Jul was stronger than expected. no worse than break even.” third quarter.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates in association with

DLA Piper
The law firm has poached Stephen Hoyle from
Ernst & Young to join its London office as a
partner and head of UK tax.
Hoyle, a specialist in corporate tax and struc-
tured transactions, was a partner at E&Y’s
international tax services group. Prior to that,
he worked as a managing director in Deutsche
Bank’s structured capital markets group, hav-
ing originally spent 18 years as a tax partner at
Freshfields Bruckhaus Deringer.
RSM Tenon tor within its tax service line.
The accountancy firm has promoted McGrory will lead the firm’s new
Karen McGrory to the position of direc- employer solutions team, providing all-
round business advice to employers.
She specialises in advising on inter-
national assignment policy develop-
ment and processes, complex cross
border tax and social security planning,
cross border employer compliance
requirements and remuneration plan-
ning and structuring.
Kleinwort Benson
The private bank has appointed Mark
Bright as managing director of its
Guernsey operations.
Bright has had a 33 year career in
finance, beginning at the National
Westminster Bank in London and then
moving to the firm’s Bahrain offshore
banking unit. He moved to Guernsey in
1993, joining Credit Suisse as a member
of the executive board with responsibili-
ty for business development.
He has since worked at MeesPierson
Channel Islands and Ansbacher, were
he was chief executive of the Channel
Island business.
Skyline Capital Management
The long/short equity specialist, co-
founded by former Nevsky Capital ana-
lyst Geoff Bamber and Vernon West,
previously head of the public sector
client business at Barclays, has appoint-
ed a new head of research.
David Tovar previously worked as an
analyst at Merrill Lynch, initially focus-
ing on European beverages and then on
European tobacco and food names.
Grant Thornton
Michael Posener, formerly a vice presi-
dent in the infrastructure team at
investment bank Macquarie, has joined
the business advisory firm as an associ-
ate director in the government and
infrastructure advisory team.
His new role will be focused on finan-
cial due diligence for bank debt and pri-
vate equity, private finance initiatives
(PFI) and public-private partnerships
(PPP), financial scheme structuring and
funding agreements.

To appear in CITYMOVES please email your career

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com morganmckinley.com
 Markets&Investment
16 CITYA.M. 23 JULY 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .281.90 +7.80 314.80 245.50 COLT Group . . . . . . . . . . . . . . . .133.80 +4.20 144.20 106.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .52.45 +0.35 71.75 34.50 Schroders . . . . . . . . . . . . . . . . .1239.00 +8.00 1450.00 863.50
3i Infrastructure . . . . . . . . . . . . . 110.50 +1.60 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .566.00* +12.00 574.50 307.75 Jardine Lloyd Thompson. . . . . . .583.00 +12.50 604.50 420.70 Schroders N/V. . . . . . . . . . . . . .1034.00 +12.00 1185.00 737.50
A.B. Foods . . . . . . . . . . . . . . . .1061.00 +20.00 1066.00 766.00 Cookson . . . . . . . . . . . . . . . . . . .458.10 +20.30 616.00 286.00 Johnson Matthey . . . . . . . . . . .1665.00* +29.00 1814.00 1225.00 Scot. & Sthrn Energy. . . . . . . . . 1169.00 +5.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .131.00 +3.00 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . . 1168.00 +15.00 1203.00 536.00 Kazakhmys . . . . . . . . . . . . . . . . 1163.00 +57.00 1634.00 710.50 Scottish Mortgage. . . . . . . . . . . .600.50 +7.00 623.50 420.75
Admiral. . . . . . . . . . . . . . . . . . .1488.00 +33.00 1488.00 921.00 CSR . . . . . . . . . . . . . . . . . . . . . .399.90 +9.40 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .127.30 +2.70 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .279.40 +3.80 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . . 114.00 +4.00 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .476.10 +12.80 539.00 290.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .225.30 +1.80 255.00 196.50
Afren . . . . . . . . . . . . . . . . . . . . . .84.85 +2.10 111.00 51.75 Dana Petroleum . . . . . . . . . . . .1505.00 +29.00 1549.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .137.30 +1.60 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .564.00 +24.50 656.50 394.30
African Barr Gold . . . . . . . . . . . .581.00 –12.50 685.00 520.50 Davis Service . . . . . . . . . . . . . . .380.60 +12.10 442.30 323.25 Lancashire Hldgs . . . . . . . . . . . .540.50 +4.50 543.50 416.70 Severn Trent . . . . . . . . . . . . . . .1276.00* +6.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1604.00 +12.00 1639.00 524.50 De La Rue . . . . . . . . . . . . . . . . . .780.50* +27.50 1021.00 744.00 Land Securities . . . . . . . . . . . . . .603.00* +13.50 743.50 475.25 Shaftesbury . . . . . . . . . . . . . . . .400.50 +13.40 426.50 307.75
Alliance Trust . . . . . . . . . . . . . . .317.50* +3.10 352.70 277.50 Debenhams . . . . . . . . . . . . . . . . .62.00 +2.60 91.95 51.95 Legal & General . . . . . . . . . . . . . .90.15 +2.55 94.40 57.00 Shire. . . . . . . . . . . . . . . . . . . . .1500.00 +32.00 1526.00 834.50
AMEC . . . . . . . . . . . . . . . . . . . . .895.50 +27.00 898.00 684.50 Derwent London . . . . . . . . . . . .1341.00 +20.00 1490.00 903.00 Lloyds Banking Gp . . . . . . . . . . . .63.58 +2.57 75.58 45.30 SIG . . . . . . . . . . . . . . . . . . . . . . .102.00 +2.00 146.60 96.90
Amlin . . . . . . . . . . . . . . . . . . . . .425.80 +1.00 430.00 312.00 Dexion Absolute . . . . . . . . . . . . .139.10 +2.20 148.00 117.00 Logica . . . . . . . . . . . . . . . . . . . .106.40 +3.40 149.10 81.50 Smith & Nephew . . . . . . . . . . . . .570.00 +9.50 700.50 448.75
Anglo American . . . . . . . . . . . .2477.50 +68.50 3015.50 1777.50 Diageo . . . . . . . . . . . . . . . . . . . 1127.00 +18.00 1176.00 893.00 London Stk Exchange . . . . . . . . .627.50* +10.50 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .143.00 +2.20 147.00 67.50
Antofagasta . . . . . . . . . . . . . . .1008.00 +27.00 1100.00 676.00 Dimension Data . . . . . . . . . . . . .124.50 +1.10 125.50 55.00 Lonmin . . . . . . . . . . . . . . . . . . .1495.00 +56.00 2198.00 1101.00 Smiths . . . . . . . . . . . . . . . . . . . 1144.00 +29.00 1186.00 715.00
Aquarius Platinum . . . . . . . . . . .275.00 +11.30 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .427.50* +12.60 428.70 228.40 Man . . . . . . . . . . . . . . . . . . . . . .217.90 +2.70 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .421.40 +8.40 444.60 380.60
ARM Holdings . . . . . . . . . . . . . . .316.50 +8.50 362.40 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .374.00 +6.90 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .353.50 +8.40 412.70 321.90 Spectris . . . . . . . . . . . . . . . . . . .884.50 +2.00 949.00 530.50
Arriva . . . . . . . . . . . . . . . . . . . . .770.00 — 782.50 408.50 DSG Intl . . . . . . . . . . . . . . . . . . . .27.24 +0.73 39.75 23.00 Meggitt . . . . . . . . . . . . . . . . . . . .314.80 +8.30 331.00 168.50 Spirax-Sarco Eng . . . . . . . . . . .1589.00 +11.00 1598.00 870.00
Ashmore . . . . . . . . . . . . . . . . . . .282.80 +11.40 311.20 195.00 Dunelm . . . . . . . . . . . . . . . . . . . .390.40 +4.80 438.40 250.70 Melrose . . . . . . . . . . . . . . . . . . .232.50 +3.60 251.50 105.00
Astrazeneca . . . . . . . . . . . . . . .3223.00 +37.50 3277.50 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .429.10 +3.00 499.90 271.00 Mercantile IT . . . . . . . . . . . . . . . .938.50* +23.00 1002.00 772.00 Spirent Comms . . . . . . . . . . . . . .126.10 +5.30 127.80 62.50
Atkins(Ws) . . . . . . . . . . . . . . . . .744.50 +18.50 747.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .397.40* +4.00 412.40 313.50 Michael Page Intl. . . . . . . . . . . . .399.00 +5.70 461.50 253.50 Sports Direct Intl . . . . . . . . . . . . . 116.00 –1.10 134.00 81.80
Autonomy Corp . . . . . . . . . . . .1649.00 –164.00 2012.00 1161.00 Electrocomponents . . . . . . . . . . .225.00* +4.90 245.00 139.50 Micro Focus . . . . . . . . . . . . . . . .422.80 –4.70 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1184.00 +7.00 1190.00 522.50
Aveva . . . . . . . . . . . . . . . . . . . .1297.00* +21.00 1365.00 742.00 EnQuest . . . . . . . . . . . . . . . . . . .104.00 — 112.70 87.35 Millen & Copthorne . . . . . . . . . . .468.00 +19.30 496.30 246.50 St James’s Place . . . . . . . . . . . . .245.20 +4.80 296.90 172.25
Aviva . . . . . . . . . . . . . . . . . . . . .351.00 +11.00 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .448.50 –2.50 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .251.00 +0.20 281.70 171.00 Stagecoach. . . . . . . . . . . . . . . . .181.90 +3.00 204.90 126.20
Babcock International . . . . . . . . .608.00 +16.00 660.50 459.80 Eurasian Nat Res . . . . . . . . . . . .922.00 +31.50 1276.00 731.00 Mitchells & Butlers . . . . . . . . . . .304.50 +1.10 343.90 228.30 Standard Chartered . . . . . . . . . .1842.00 +73.00 1847.00 1242.00
BAE Systems . . . . . . . . . . . . . . .315.80 +0.60 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .590.00 +9.50 630.00 220.00 MITIE . . . . . . . . . . . . . . . . . . . . .201.40* +3.40 281.70 195.20 Standard Life . . . . . . . . . . . . . . .196.30 +5.10 237.00 170.00
Balfour Beatty . . . . . . . . . . . . . . .255.20 +4.90 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .649.00* +2.50 664.50 459.00 Mondi . . . . . . . . . . . . . . . . . . . . .437.00 +14.60 488.00 228.25 SuperGrp . . . . . . . . . . . . . . . . .1021.00 +11.00 1030.00 499.00
Barclays . . . . . . . . . . . . . . . . . . .303.65 +13.40 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .92.85* –1.15 96.80 74.50 Monks Inv Tst . . . . . . . . . . . . . . .294.60* +8.40 321.20 238.00 TalkTalk . . . . . . . . . . . . . . . . . . . 119.50 +1.60 147.10 106.60
Barratt Development . . . . . . . . . . .98.00 +2.45 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .285.50 +5.80 396.20 138.00 Morgan Crucible . . . . . . . . . . . . .220.30 +7.40 223.60 101.00 Talvivaara Mining . . . . . . . . . . . .400.00 +0.50 501.50 341.40
BBA Aviation . . . . . . . . . . . . . . .194.90 +0.70 220.00 116.50 FirstGroup . . . . . . . . . . . . . . . . .383.40* +11.40 448.80 322.75 Morrison Wm . . . . . . . . . . . . . . .281.70 — 306.30 255.00 Tate & Lyle . . . . . . . . . . . . . . . . .470.40* +2.40 509.00 304.50
Beazley. . . . . . . . . . . . . . . . . . . .122.00 +0.90 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .275.80 +3.80 297.20 226.00 Murray Intl Tst . . . . . . . . . . . . . . .839.00* +11.50 893.50 632.00 Taylor Wimpey . . . . . . . . . . . . . . .26.55 +0.96 54.90 24.29
Bellway. . . . . . . . . . . . . . . . . . . .574.00 +10.50 927.50 554.00 Fresnillo . . . . . . . . . . . . . . . . . . 1104.00 +9.00 1139.00 539.50 National Express. . . . . . . . . . . . .245.10 +4.90 256.80 155.86
Berkeley . . . . . . . . . . . . . . . . . . .837.00 +14.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .263.00 +4.70 285.70 208.50 National Grid . . . . . . . . . . . . . . .496.80* +6.10 607.65 474.80 Telecity . . . . . . . . . . . . . . . . . . . .425.20 +3.40 455.00 300.00
BG . . . . . . . . . . . . . . . . . . . . . .1073.00 +18.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .477.50 +7.60 484.00 370.00 Next . . . . . . . . . . . . . . . . . . . . .2185.00 +51.00 2360.00 1601.00 Templeton Emrg Mkts . . . . . . . . .557.00* +6.50 598.00 384.00
BHP Billiton . . . . . . . . . . . . . . .1964.50 +46.00 2346.00 1475.00 GKN . . . . . . . . . . . . . . . . . . . . . .142.80 +3.30 155.00 88.25 Northumbrian Water . . . . . . . . . .323.50 –2.00 329.20 219.90 Tesco . . . . . . . . . . . . . . . . . . . . .399.20 +1.45 454.90 361.20
BlackRock Mining . . . . . . . . . . . .571.50 +8.00 654.50 399.50 GlaxoSmithKline . . . . . . . . . . . .1203.50 +17.50 1347.00 1088.00 Old Mutual . . . . . . . . . . . . . . . . . 118.50 +3.40 127.20 85.80 Thomas Cook . . . . . . . . . . . . . . .195.00 +0.80 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .43.79 +1.78 49.50 33.00 Great Portland Estates . . . . . . . .307.00 +5.50 332.10 215.00 Partygaming . . . . . . . . . . . . . . . .232.10 –0.40 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .307.20 +7.20 314.00 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .400.00 +0.10 658.20 296.00 Greene King . . . . . . . . . . . . . . . .440.90 +6.20 504.00 372.50 Pearson . . . . . . . . . . . . . . . . . . .962.00 +28.00 1069.00 603.00 Travis Perkins . . . . . . . . . . . . . . . 811.00 +21.00 915.00 613.00
Brit Insurance . . . . . . . . . . . . . . .908.00 +8.50 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . . 511.50* +8.50 562.50 322.25 Pennon . . . . . . . . . . . . . . . . . . . .578.50 –1.50 587.50 434.40 TUI Travel . . . . . . . . . . . . . . . . . .231.80 +2.80 313.90 202.30
British Airways . . . . . . . . . . . . . .217.50 +7.40 255.80 127.50 Halma . . . . . . . . . . . . . . . . . . . . .279.40* –2.20 298.70 184.25 Persimmon . . . . . . . . . . . . . . . . .367.50 +11.70 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .349.90 +2.30 436.20 261.20
British Amer. Tob . . . . . . . . . . .2266.00 +32.50 2335.50 1774.00 Hammerson . . . . . . . . . . . . . . . .378.00 +7.00 460.30 316.50 Petrofac . . . . . . . . . . . . . . . . . .1333.00 +48.00 1335.00 730.00 Tullow Oil . . . . . . . . . . . . . . . . . 1158.00 +28.00 1375.00 948.00
British Empire Tst . . . . . . . . . . . .437.10 +10.00 467.90 338.50 Hargreaves Lansdown . . . . . . . .353.10 +17.10 387.00 206.25 Petropavlovsk . . . . . . . . . . . . . . 1106.00 +9.00 1370.00 601.00 UK Commercial Prop. . . . . . . . . . .80.70 –0.05 84.90 62.25
British Land . . . . . . . . . . . . . . . .456.70* +7.20 532.00 402.00 Hays . . . . . . . . . . . . . . . . . . . . . . .95.00 +0.95 119.00 84.50 Premier Farnell . . . . . . . . . . . . . .238.10 +6.30 252.60 136.00 Ultra Electronics . . . . . . . . . . . .1596.00 +32.00 1678.00 1094.00
Britvic. . . . . . . . . . . . . . . . . . . . .518.00 +10.00 518.00 315.00 Henderson . . . . . . . . . . . . . . . . .127.00 +1.80 157.80 95.75 Premier Oil . . . . . . . . . . . . . . . .1505.00 +39.00 1508.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1949.00 +29.00 2024.00 1515.00
Brown(N.) . . . . . . . . . . . . . . . . . .242.00* +2.60 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .414.00 +1.10 587.00 368.70 Provident Financial . . . . . . . . . . .861.00 +9.50 986.00 786.00
BSkyB . . . . . . . . . . . . . . . . . . . .700.00 +2.00 732.00 505.50 Hikma Pharma . . . . . . . . . . . . . .732.50 +5.50 739.50 430.00 Prudential . . . . . . . . . . . . . . . . . .531.00 +10.50 665.00 410.75 United Utilities . . . . . . . . . . . . . .564.00* +6.50 575.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .141.00 +4.70 151.00 108.40 Hiscox . . . . . . . . . . . . . . . . . . . .351.70 +2.80 369.30 290.00 PZ Cussons . . . . . . . . . . . . . . . .361.60 +6.70 366.90 210.10 Utd Business Media . . . . . . . . . .550.00 +15.50 579.50 366.00
Bunzl . . . . . . . . . . . . . . . . . . . . .723.50 +20.50 784.50 514.00 Hochschild Mining . . . . . . . . . . .307.40 +0.80 370.60 220.00 Qinetiq . . . . . . . . . . . . . . . . . . . .129.70 +4.10 179.10 113.90 Vedanta Resources . . . . . . . . . .2444.00* +45.00 2967.00 1531.00
Burberry . . . . . . . . . . . . . . . . . . .856.00* +15.00 856.50 431.25 Home Retail . . . . . . . . . . . . . . . .240.10* +5.10 336.50 208.50 Randgold Resources. . . . . . . . .6055.00 +40.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1158.00 +25.00 1193.00 610.00
Cable & Wire Comms . . . . . . . . . .59.50* +1.75 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2213.00* +55.00 2214.00 1336.00 Reckitt Benckiser . . . . . . . . . . .3293.00 –7.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .149.05* +2.50 153.80 113.70
Cable & Wire Wwide . . . . . . . . . . .68.75* +3.05 94.80 64.85 HSBC Hldgs . . . . . . . . . . . . . . . .655.00 +17.00 766.80 546.95 Reed Elsevier . . . . . . . . . . . . . . .527.00 +10.00 548.00 403.75 Weir . . . . . . . . . . . . . . . . . . . . .1222.00 +24.00 1229.00 501.50
Cairn Energy. . . . . . . . . . . . . . . .472.30 +20.10 479.20 306.80 Hunting . . . . . . . . . . . . . . . . . . .505.00 +19.00 659.50 395.75 Regus . . . . . . . . . . . . . . . . . . . . . .73.00 +0.50 125.50 67.50 WH Smith . . . . . . . . . . . . . . . . . .426.00 — 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1614.00 +11.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .396.70* +8.50 478.30 291.70 Rentokil Initial . . . . . . . . . . . . . . .106.60 +0.60 140.20 86.75 Whitbread . . . . . . . . . . . . . . . . .1459.00 +26.00 1645.00 827.50
Capita . . . . . . . . . . . . . . . . . . . . .737.00 +27.00 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .475.50 –5.10 492.20 274.00 Rexam . . . . . . . . . . . . . . . . . . . .337.00 +6.70 337.40 222.50 William Hill . . . . . . . . . . . . . . . . .173.40 +1.90 217.80 160.50
Capital & Counties . . . . . . . . . . . 112.80 –0.60 125.40 99.60 Imagination Tech Gp . . . . . . . . . .330.10 +12.10 334.60 147.00 Rightmove . . . . . . . . . . . . . . . . .645.00 +12.00 729.00 373.00 Witan Inv Tst . . . . . . . . . . . . . . . .443.90 +4.80 487.00 353.25
Capital Shopping Centres . . . . . .344.00 +5.00 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .774.50 +24.50 776.00 281.75 Rio Tinto . . . . . . . . . . . . . . . . . .3314.50 +67.00 4104.00 2205.00 Wolseley . . . . . . . . . . . . . . . . . .1380.00 +25.00 1742.00 1102.00
Carillion . . . . . . . . . . . . . . . . . . .319.00 +5.80 361.90 246.25 Imperial Tobacco. . . . . . . . . . . .1853.00* –55.00 2159.00 1617.00 RIT Capital Partners . . . . . . . . . 1139.00 –6.00 1215.00 910.00
Carnival . . . . . . . . . . . . . . . . . .2306.00 +97.00 2937.00 1649.00 Inchcape. . . . . . . . . . . . . . . . . . .310.30 +0.40 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . . 611.50 +32.00 631.50 367.50 Wood Group (John). . . . . . . . . . .351.00 +9.20 411.70 261.50
Catlin . . . . . . . . . . . . . . . . . . . . .387.40 +6.60 389.60 303.20 Informa . . . . . . . . . . . . . . . . . . . .380.20 +6.80 439.40 225.00 Rotork . . . . . . . . . . . . . . . . . . .1435.00* +35.00 1482.00 848.50 WPP . . . . . . . . . . . . . . . . . . . . . .674.50 +19.00 744.00 433.75
Centamin Egypt . . . . . . . . . . . . .155.10 +0.60 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .744.00 +15.00 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .44.70 –0.48 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1015.00 +24.30 1344.50 683.40
Centrica . . . . . . . . . . . . . . . . . . . 311.60 +3.50 320.00 215.50 Intercontl Hotels . . . . . . . . . . . . 1160.00 +24.00 1244.00 622.50 Royal Dutch Shell A . . . . . . . . .1830.00 +42.50 2068.50 1521.50 Yell Group. . . . . . . . . . . . . . . . . . .25.76 +0.41 86.00 22.25
Charter Intl . . . . . . . . . . . . . . . . .724.00 +22.00 855.50 483.75 Intermediate Capital . . . . . . . . . .264.70* +7.20 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1759.50 +46.50 1997.50 1505.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2959.00* +83.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1699.00 –13.00 1745.00 1024.00 RSA Insurance . . . . . . . . . . . . . .124.50 +1.20 142.00 114.10
Chloride Group . . . . . . . . . . . . . .373.00* +0.10 390.50 130.75 Intl Power . . . . . . . . . . . . . . . . . .358.10 –3.70 365.30 243.00 SABMiller . . . . . . . . . . . . . . . . .1957.00 +55.00 2090.00 1307.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .710.50 +8.00 806.50 660.00 Invensys . . . . . . . . . . . . . . . . . . .295.00* +14.50 350.30 234.50 Sage . . . . . . . . . . . . . . . . . . . . . .245.00 +5.80 260.50 182.70
Cobham . . . . . . . . . . . . . . . . . . .240.50 +4.30 278.60 173.20 Investec . . . . . . . . . . . . . . . . . . .502.50 +17.70 565.00 378.20 Sainsbury(J) . . . . . . . . . . . . . . . .345.00 –0.90 373.00 307.60 www.interactivedata.com

Bank and industry stocks up Wall St rallies on

as FTSE 100 breaks 5,300 corporate outlook
for the blue chips, with Barclays the show this week. and 3M, up three per cent to $84.75,
THELONDON best sector performer, up 4.6 per cent,
while Lloyds rose 4.2 per cent.
Invensys also stood out, up 5.2 per
cent as an old rumour was revived THENEW YORK were among multinationals that
raised their outlooks, suggesting the

REPORT The banking sector was also boost-

ed by recent results from US peers in
the last week, while Credit Suisse was
that the firm could be a bid target for
Germany's Siemens.
“The recent bid approach for
REPORT global economy may also be on a
stronger footing.
“The companies that are doing well
the first of the big European invest- Tomkins, and yesterday's offer for SSL generally are the ones that have sig-

T U
he FTSE 100 index jumped 1.9 ment banks to report yesterday. from Reckitt, have just stirred up pbeat outlooks from economic nificant overseas revenues or some
per cent yesterday, boosted by There was some positive economic some of the old chestnuts,” said one bellwethers 3M, UPS and kind of unique product,” said Kim
strong banks ahead of today’s data, as British retail sales volumes trader. Caterpillar catapulted US Caughey, senior equity research ana-
European stress test results, and received a World Cup boost in June Software firm Autonomy was the stocks yesterday as investors lyst at Fort Pitt Capital Group in
by firmer miners and oils as US stocks after strong sales of electrical goods top FTSE 100 faller, down 9.1 per cent shed some of their fears about the Pittsburgh.
rallied on earnings and data. drove a faster than expected 0.7 per after second-quarter earnings. strength of the recovery. The Dow Jones industrial average
Britain’s top share index closed up cent monthly rise, official data “We estimate that after adjusting The parade of prominent names gained 201.77 points, or 1.99 per cent,
99.17 points at 5,313.81, ending above showed. for one-offs, Autonomy failed to grow reporting earnings continued after to 10,322.30. The Standard & Poor’s
5,300 for the first time since 18 May, Miners pushed higher in London, its core business in Q2 2010,” KBC Peel the market's close with Microsoft, 500 added 24.08 points, or 2.25 per
the day before Germany introduced a led by Kazakhmys up 5.2 per cent, as Hunt said in a note, maintaining its whose shares rose 2.9 per cent in reg- cent, to 1,093.67. The Nasdaq
short-selling ban at the height of the metals prices firmed helped by the “sell” rating. ular trading. The software company Composite rose 58.56 points, or 2.68
euro-zone sovereign debt crisis. US data, with copper hitting its high- And Imperial Tobacco shed 2.9 per reported quarterly results after the per cent, to 2,245.89.
The gain took a two-day rally by the est level in nearly two months. cent after it said cigarette volumes close and its shares were trading little Yesterday’s rally reversed losses
UK index to 3.3 per cent after it Energy stocks also benefited as fell 4.3 per cent in the nine months to changed in extended hours. from a day earlier after testimony by
snapped a five-session losing streak crude prices moved higher, with BG June. The major indexes posted their Federal Reserve Chairman Ben
on Wednesday. Group and Royal Dutch Shell adding largest daily gains in more than two Bernanke soured investors on the eco-
“Strong rallies have not been scarce 1.8 per cent and 2.4 per cent respec- ANALYSIS l FTSE weeks, led by United Parcel Service, nomic outlook. But for the fourth
over the past couple of months but tively. Cairn Energy also climbed 4.4 5,800 which rose 5.2 per cent after raising time this month the S&P 500 failed to
5,313.81
they have ultimately come to noth- per cent. 5,600 22 July its outlook. The firm is viewed as a break through 1,100, a level that is
ing,” said Yusuf Heusen, senior sales But BP was flat as investors worried barometer of business demand. proving to be a tough hurdle and
trader at IG Index. about the possible impact of a storm 5,400 “UPS guiding higher is a very good could be in the way of further gains.
“The real test over the next couple on the firm's operations to end the 5,200
sign since the amount of shipping vol- Also, data showed weekly applica-
of days is whether shares can build on worst oil spill in US history. ume is directly correlated to the tions for unemployment insurance
the recent gains to push higher still Among individual stocks, Rolls- 5,000 strength of the economy,” said Peter rose. Job growth has slowed after
and finally shake off the wary atti- Royce was the top FTSE 100 gainer, up Jankovskis, co-chief investment offi- strong gains early in the year, cutting
4,800
tude investors have had for some 5.5 per cent as investors’ cheered the cer of OakBrook Investments in Lisle, into household spending and holding
time,” said Huesen. flow of orders booked by the aero 4,600 Illinois. back the economy’s recovery from the
Banks provided the main strength engines firm at the Farnborough air- 26 Apr 17 May 7 Jun 25 Jun 15 Jul Caterpillar, up 1.7 per cent to $68, toughest recession since the 1930s.
CITYA.M. 23 JULY 2010
CGT: the legal implications
It is vital to understand the ins
and outs of the latest changes to
capital gains tax, say Emma-Jane
Weider and Sophie Mazzier
T
HE initial collective sigh of relief fol-
lowing the chancellor’s announce-
ment of the limited rise in the
capital gains tax rate to 28 per cent
for higher rate earners has given way to
the noise of tapping calculators and the
scratching of heads as the number crunch-
ers endeavour to work out exactly who the
winners and losers will be.
The measure goes some way to achieve
the chancellor’s objective of raising the
capital gains tax rate without compromis-
ing simplicity, but the absence of taper
relief (rewarding long term investment),
or indexation allowance (countering infla-
tion) means that the burden of the rate
change will fall squarely on those who
have long-term holdings with low base
costs.
For those with liquid assets such as
quoted shareholdings, it may be possible
to orchestrate carefully-timed asset sales
in tranches, so as to remain under the
higher rate threshold or within the annu-
al capital gains tax free allowance year on
year. For others with less easily divisible
Expat Expert: the power of local knowledge
A survey gives
greater insight into
the daily lives of
expatriate workers
T
HANKS to globalisation and mod-
ernisation, individuals now have
unparalleled levels of choice when it
comes to relocation overseas.
And London remains an extremely pop-
ular destination for individuals looking to
experience life in another country – not
only is it a hub for transport into mainland
Europe and across the Atlantic, it has also
retained its position as one of the world’s
leading financial centres.
But what is life actually like for those
Investment | Personal Finance
assets such as a second home, it may be
possible to mirror this strategy by making
gifts or sales of a share in the asset to fam-
ily members to prevent the entire gain
accruing in one year – but always with an
eye on the inheritance tax implications of
gifts.
We have seen an increased focus on
how to qualify for entrepreneurs’ relief,
which reduces the rate of tax on the dis-
The ramifications of posal of certain business assets to 10 per
George Osborne’s CGT cent. This was introduced in 2008 when
changes are still being the 18 per cent flat rate was implemented,
clarified. and the lifetime allowance for this relief
has been increased to £5m.
Picture: GETTY While this may encourage long-term
investment in business, it falls far short of
the business asset taper relief available in
the relevant years up to 2008, and it is
unlikely to assist many taxpayers who
receive shares in the company for which
they work as part of their remuneration,
because of shareholding/voting threshold
requirements for the relief.
So how will the new rate operate? The
draft legislation has now been published,
containing the expected transitional pro-
visions to accommodate the mid-year rate
increase, which takes effect for gains aris-
ing on or after 23 June 2010.
Basic rate tax payers will continue to pay
capital gains tax at 18 per cent. Once the
basic rate band limit is reached (the thresh-
old is determined by adding the amount of
the gain to an individual’s taxable income
for the year), the balance of any gain will
who choose to move to the UK? For a
provider of expat services such as HSBC
Bank International, regional expertise is
essential. The bank’s annual Expat
Explorer survey gives it a unique perspec-
tive into the global expat picture and, as a
result, a better understanding of expats’
daily lives and needs.
Unsurprisingly, UK residents – expats
and non-expats alike – have been hit hard
by the financial crisis over the past couple
of years. In fact, the impact has been so
great that almost half of all expats in the
UK said they were considering moving
back home, largely due to the pressures
caused by the crisis. This was the highest
proportion of expats from the 26 countries
surveyed.
This is partly due to the cost of living –
the survey found that expats in the UK
generally have less disposable income than
expats living elsewhere in the world,
be taxable at 28 per cent. Higher-rate tax
payers will automatically pay tax at 28 per
cent on the entire gain, as will trustees and
personal representatives. Gains which
arose before 23 June will not be treated as
using up the basic rate band for the pur-
poses of determining the rate at which
subsequent gains will be taxed.
For UK resident but non-UK domiciled
individuals (so-called non-doms) who opt
to be taxed on the remittance basis, gains
remitted to the UK are treated as arising at
the time they are remitted, so gains aris-
ing before 23 June but remitted on or after
that date will be taxed at 28 per cent.
There are also transitional provisions
relating to gains made in offshore trusts,
adding further complexity to already com-
plicated rules.
It was thought that closer alignment
between capital gains and income tax
rates would have prevented further ero-
sion of the income tax base by discourag-
ing people from exploiting the
differential between the rates. However,
the government said its research indicat-
ed that a greater increase would have led
to an overall fall in tax receipts. For some,
therefore, it may remain attractive to gen-
erate capital gains rather than income
where possible, and the industry which
exploits this arbitrage is bound to remain
active for the time being.
Emma-Jane Weider and Sophie Mazzier are
respectively a partner and a counsel at law firm
Maurice Turnor Gardner LLP
which can be caused by above-average
monthly spend on accommodation. UK
expats also found it more difficult to save
or invest – more than a quarter said they
had reduced their savings and investments
compared to in their home country.
As well as being expensive, the expats
surveyed felt that the quality of life in the
UK was relatively poor with transport, liv-
ing standards, and even general health all
highlighted as areas where the UK fell
short relative to other countries such as
Canada, Thailand and the US.
But the UK was the best country to live
in for entertainment and the second best
for fashion. The UK’s expatriate population
is also relatively young indicating that
lifestyle is more important than liveability
for most foreign nationals living here.
While being an expat has plenty of
advantages from career development and
financial benefits to cultural opportuni-
17
PERSONAL
FINANCE NEWS
BY JESSICA MEAD
DEADLINE FOR ABERDEEN LAT AM FUND
The deadline for investing in the Aberdeen
Latin American Income Fund is looming.
Those wishing to invest must complete an
application form and payment must be
received no later than 28 July 2010. The
fund is the first first UK-listed Latin
American closed-end fund with an income
bias and will be jointly managed by Devan
Kaloo and Brett Diment. The initial target for
the dividend yield is 4.25 per cent with the
aim of growing dividends over time and will
be paid quarterly. Initially the portfolio blend
will be approximately 60 per cent invested in
listed equities and the balance in sovereign
bonds.
INVESTORS BECOMING MORE INDEPENDENT
Fewer investors are seeking financial advice
now than they did in January, according to
research from financial services provider Fair
Investment Company. The survey found that
only 22 per cent of investors sought advice
before taking an investment decision com-
pared to 36 per cent in January. despite
recent market volatility, investors are not
scared to move away from cash investment
products. Even though almost half still have
the greatest exposure in cash, just 31 per
cent said they would be looking to invest in
cash going forward. And of those who said
they would be looking at investments other
than cash, 38 per cent said they would be
looking at structured products.
AEGON’S GUARANTEED INCOME OPTION
International life insurance, pension and
investment company Aegon has this week
launched a new guaranteed income option
for those about to retire. The secure income
option on the Investment Control bond pro-
vides customers with the security of a guar-
anteed income of 5 per cent of their original
investment over 20 years, no matter what
happens to investment performance. Each
year on the anniversary of taking out the
bond, if the value of the bond grows to more
than the original investment, the growth is
locked in and returned to the customer at
the end of the term. The guaranteed income
option is available from any age while the
secure income option is for those aged 18-
74.
INVESTORS USING CHEAP LEVELS TO BUY
Investors have been making the most of the
flagging FTSE and jumping in at these
cheaper levels, trade data from execution-
only broker TD Waterhouse showed. Buy
trades increased in the week to 20 July, out-
numbering sells by almost two to one. BP
topped both the buy and sell list. London-list-
ed Mongolian oil explorer Petro Matad
appeared for the first time in this week’s top
10 buys, rising to the number four spot.
Miner Aquarius Platinum and video search
technology firm Blinkx were also in demand.
ties and a better quality of life, moving to
an unfamiliar country throws up plenty of
challenges too. For example, you will have
probably left family and friends behind
and need to establish a new social life. You
might also struggle with the language and
organising your finances.
Through its regional expertise, HSBC
Bank International can give you reassur-
ance wherever you relocate to and you can
feel confident that help is always on hand
from somebody who understands your
needs and speaks your language.
For more details about HSBC Bank
International, go to www.offshore.hsbc.com or
call +44 1534 616079.
In association with
 Living
18 CITYA.M. 23 JULY 2010

| The Knowledge

FOCUS ON: GREENWICH, SE10 BUYING

Q&A
BY JESSICA MEAD

ROYAL MILITARY FINGAL STREET

ACADEMY
Price: From £165,000
A luxury flat in an 18th
century military school
is not the typical home
of a first-time buyer. But
a regeneration project
has turned the academy
into a luxury develop-
ment with studios, one-
beds and two-beds on
offer.
Contact: Hamptons on
020 8856 0034,
www.theacademy-
woolwich.com
9 WEST GROVE
Price: £2.7m
An impressive Victorian
terraced house close to
Greenwich Park, this
five-bedroom property
has been refurbished
fully. The period features
have been maintained
but underfloor heating,
roof terrace with views
over London, and 5,016
sq ft of space give it
that touch of luxury.
Contact: Savills on 020
7531 2500, www.sav-
ills.co.uk
CURRENT MORTGAGE DEALS BY JESSICA MEAD
NEED TO KNOW | AREA INSIGHT
Commuting: The DLR from Greenwich
station takes 20 minutes to reach
Bank, while the overland train reaches
London Bridge in 8-10 minutes. A boat
to Blackfriars takes 35 minutes.
Schools: Halstow Primary School and
Millennium Primary School have over
80 per cent of pupils achieving strong-
ly at Key Stage 2. St Ursula’s Convent
School averaged 88 per cent of pupils
achieving A*-C at GCSE.
Crime: Though its historic centre is
picturesque and safe, Greenwich bor-
Price: £435,000
A well-sized four bed-
room house with a loft
conversion and a cellar.
It has a decked rear
garden. Close to Maze
Hill and Westcombe
Park railway stations.
It’s within walking dis-
tance of the leisure cen-
tre and in the Halstow
school catchment area.
Contact: Winkworth on
020 8852 0999,
www.winkworth.co.uk
ders more deprived areas and has a
higher than average crime rate.
Restaurants and pubs: Plenty of cosy
old pubs, some with gastro inclina-
tions. The Trafalgar Tavern and The
Vanbrugh are favourites.
Parks and leisure: Greenwich Park,
one of the Royal Parks, is one of
London’s great green spaces, and home
to the Greenwich Observatory. The
National Maritime Museum, Old Royal
Naval College and Queen’s House also
make Greenwich a tourist hub.
Source: MoneySupermarket.com
Camilla Dell
MANAGING PARTNER
AT BLACK BRICK
Dear Camilla, I am thinking of
Q. selling my property but I am con-
cerned that it is summer and
there are fewer buyers around. When is
the optimum time to put my property
on the market?
A.
Summer tends to be quieter in the
sales market, especially in August
when many people are away.
But the decision of when to sell depends on
what you are selling and where. For buyers
selling family homes in areas like Wimbledon,
Richmond or Barnes, now is probably not the
best time because these areas tend to appeal
more to the domestic buyer.
But you should still be talking to local estate
agents, making them aware of your plans and
choosing which agency to work with – you
never know, they may have a buyer for you.
Realistically, September is probably the opti-
mal time to be listing your home in these types
of locations.
The situation is different in parts of central
London. For anyone thinking of selling a lateral
apartment in a portered building in prime
parts of London, – ie, Mayfair, Knightsbridge
and Belgravia – now is an excellent time. There
is a shortage of good quality stock in these
areas, particularly for apartments. August is
also a peak month when buyers from the
Middle East, Asia, India and Africa come to
London seeking a cooler climate. Our advice to
anybody thinking of selling in these locations is
to take advantage of the foreign buyers’ mar-
ket and the shortage of stock.

Q.
Dear Camilla, now that home infor-
mation packs (HIPs) have been abol-
Lender Fixed/Flexible Rate Until Standard Rate APR Maximum Loan ished, has more property come on to
the market?
(per cent) (per cent) (per cent) to Value (per cent)

A.
Far fewer properties have come on to
the market as a result of the abolition
NatWest Flexible 2.19 To Aug 2012 4 4 60 of HIPs. The reality is that even when
HIPs were required, we were offered proper-
First Direct Flexible 2.29 Term 2.3 2.3 65 ties before the HIP had been completed and
Yorkshire BS Flexible 2.29 To Jul 2012 4.99 4.7 75 were gaining access to off-market properties.
The central London market is still incredibly
ING Direct Flexible 2.29 2 years 3.5 3.5 60 tight on supply. The key is to either have the
capacity to spend time searching the market
The Co-operative Bank Flexible 2.49 To Nov 2013 4.24 3.9 75 and building relationships with estate agents
or employ the services of a good buying
HSBC Fixed 2.69 To Oct 2012 3.94 3.9 60 agency. A buying agent should have access to
properties that are not being openly marketed
Santander Fixed 2.85 To Sep 2012 4.24 4.2 60 – for example, we have a database of more
Market Harborough BS Fixed 2.89 To Jul 2012 5.49 5.1 70 than 50 such properties.
Camilla Dell is the managing partner at search
Leeds BS Fixed 3.65 To Jul 2013 5.69 5.5 75 and acquisition consultancy Black Brick.
www.black-brick.com.
Yorkshire BS Fixed 3.99 To Sep 2015 4.99 4.5 75

PROPERTY NEWS
BY JESSICA MEAD

SAVILLS’ PROPERTY AUCTION NEXT TUESDAY
Bargain-hunting property investors rejoice. Next
Tuesday sees Savills hold one of its residential auctions.
There’s a tenanted three-bedroom flat in a portered
block on Great Cumberland Place next to Marble Arch
is starting at £380,000 and a derelict semi-detached
house on the Chiswick High Road is also up for grabs,
starting at £175,000. The auction will be held on
Tuesday 28 June at 10.30am at the Millenium Hotel, 44
Grosvenor Square London, W1K 2HP.
SURGE IN PRIME LONDON RESIDENTIAL RENTS
Buy-to-let landlords in central London will be cheering
the latest research from Knight Frank, which shows
that rents in London’s prime residential market are on
the rise. Rents climbed 9.2 per cent in the year to June,
with strong rental growth in Knightsbridge, Chelsea
and Notting Hill. A steady improvement in the London
jobs market, particularly in the business and financial
services sector, has meant that 5 per cent more people
are looking for housing compared to last summer.
GREEN HOMES COULD AVOID EXTRA STAMP DUTY
Turning your house green may be even more essential
than you previously thought. The government is cur-
rently mulling proposals that would force homebuyers
to pay extra stamp duty on energy-guzzling homes. One
scenario would see buyers of poorly insulated homes
(those rated F or G on a scale of A to G) pay an extra
0.5 per cent in stamp duty. Homeowners have already
been offered eco-makeovers to improve the energy effi-
cieny of their properties.
A FIFTH OF LANDLORDS SUFFER RENT ARREARS
One of the most difficult situations as a private landlord
is collecting unpaid rent from tenants. However, the sit-
uation is starting to improve: the National Landlords’
Association (NLA) said yesterday that a fifth of private-
residential landlords have suffered rental arrears over
the past quarter compared to nearly a quarter in the
first three months of 2010. Those landlords needing to
recover unpaid rent need to contact the tenants, visit
them and even serve notices where appropriate.
 20 Living | Freehold Enfranchisement
It pays to get your hands on the title deeds
Buying the freehold
can cost the same as
extending the lease,
writes Juliet Samuel
M
ORE London leaseholders than
ever are taking advantage of their
right to freehold enfranchisement
– that is, the right to buy the free-
hold of their property – before the lease
length drops below 80 years. “80 years is a
magic number and not many people realise
that,” says Katie Cohen of Jaffe Porter
Crossick, a specialist property law firm. “It’s
because of the marriage value.”
This is nothing to do with promising to
love and obey your landlord; the “marriage
value” is the size of the fee you have to pay to
extend your lease. Once the lease length
drops below 80 years, the fee jumps and
thenceforth increases the shorter the lease
gets. Alongside this, the sale value of your
property drops. So if your lease is coming up
to the 80-year level, it can make good finan-
cial sense to start arranging the purchase of
your apartment block’s freehold.
Because commercial tenants can now use
this right, increasing numbers of residents
are becoming aware that if they can get
together at least half the other tenants in a
block to make a reasonably priced bid, the
freeholder is obliged to sell. Cohen says she
has seen around a 50 per cent jump in the
number of people interested in freehold
enfranchisement over the last year, in part
Sq a t
a s w le
ua lk
an m nt tic
re
ad in s to
C 10 e as
m ly rtm nt
fro on pa Fa
a
PAN PENINSULA
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due to shortening leases and the recession
prompting home-owners to become more
savvy about their investments.
This can prove to be a worthwhile invest-
ment because in many cases, it costs no
more than it would to extend the lease and
gives tenants direct ownership and control
over the management of the building. To
start off, tenants have to arrange an entity
that will be the new owner – often a compa-
ny whose shareholders are the building’s
tenants. The entity then serves a notice to
the landlord with a reasonable offer, fol-
lowed by a period of negotiation over the
price. If this is disputed, cases can end up
going to the Leasehold Valuation Tribunal,
where valuers and lawyers will argue tire-
lessly over the niceties of the freehold price.
But because of the legal costs of this process
to both sides, the vast majority of cases strike
a deal before it gets to this stage.
While most tenants in small blocks can
get away with meeting informally to
arrange this process, larger blocks require
more organisation to pull it off. In one
recent block of 180 flats in Lambeth known
as The Perspective, the residents hired an
expert advisor to manage the purchase.
David Jones, the tenant who organised
bringing Enfranchisement Lease Solutions
on board, says: “None of the residents had
the time or expertise to manage the process,
so the best option was to get an expert to do
the job. Mobilizing 180 people is like herd-
ing cats and having an independent expert
advising on the benefits and best way for-
ward was very comforting for everyone.”
Engaging a professional will cost, of
course, so it is important that tenants
streamline their decision-making to give
CITYA.M. 23 JULY 2010
More London
leaseholders are
buying the free-
hold of their
flats.
Picture: GETTY
lawyers and valuers just one or two points
of contact – people who are prepared to
THE FACTS | FREEHOLD ENFRANCHISEMENT
scrutinise the fee proposal to make sure it
is fair. Otherwise, you risk racking up hours l The right to freehold enfranchisement applies only when over 50 per
of costs as busybody neighbours all try to cent of a building’s tenants can agree to make a purchase offer together.
weigh in over one another. “Half the trick is l The tenants set up a company to buy the building, of which they
to keep a cap on the costs,” says Bruce become shareholders.
Maunder Taylor of Maunder Taylor char- l The company serves a notice to the landlord with a reasonable offer.
tered surveyors. “You’ve got to keep your l If the landlord agrees to the offer, the purchase goes ahead. If not,
eye on those costs because they can end up
being more than you pay the landlord.”
negotiations ensue, with a costly tribunal to decide if there is no deal.
An organised group of tenants, by con- l Tenants pay for the freehold in proportion to the cost of buying it for
trast, will gain from a well-judged purchase their own particular apartment. Therefore, tenants with little time left
many years down the line. Not to mention on their lease will pay more than tenants who still have long leases.
that freehold enfranchisement brings the l The main costs of the process include independent valuations and
added bonus of forcing you to get to know legal fees, so it is important to read any fee agreements in detail.
your neighbours – a rare phenomenon in a l It is vital to find advisers who have the right specialist knowledge.
modern apartment block.
FEATURES INCLUDE:
• private cinema
• 24 hour concierge
• 50th floor cocktail bar with
stunning panoramic views
• lavishly equipped health spa
and fitness complex
• a wealth of amenities nearby with many restaurants
and bars – all within walking distance
TO ARRANGE A VIEWING CALL LISA-JANE STRATTON:
020 7038 8057 Letting Agents
canarywharf@brlets.co.uk
www.brlets.co.uk
London | Hong Kong | Singapore | Dubai
 Lifestyle BEYOND VOLCANOS 21
AND BANKRUPTCY
| Reviews ICELAND IN MONDAY’S
TRAVEL SECTION

When experiments go wrong...

A topical horror thriller inspired
by genetic cloning manages to
be clever, sinister and enjoyable
Right, Sarah Polley
Film and Delphine Chaneac
(as Dren) in Splice.
SPLICE Below, Catherine Zeta
Cert: 15 Jones in The Rebound.

Rhys Griffiths hhhhi

A CONTEMPORARY morality tale, this hor-
ror thriller pushes topical science contro-
versies – stem cell tinkering, genetic
cloning – to nightmarish extremes.
Clive (Adrien Brody) and Elsa (Sarah
Polley) are superstar genetic engineers.
Endowed with great scientific talent but
seriously lacking in common sense, the
pair cross ethical boundaries like they
don’t exist to create an artificial life form
by splicing human and animal genes. The
result is “Dren”, a disturbing creature of
uncommon intelligence who grows at an
alarming rate. Inevitably things get out of
hand, to an increasingly alarming and
freakish degree, and Clive and Elsa are
forced to deal with the nightmare they’ve
created. It’s a thrilling worst-case scenario.
Though the film doesn’t quite hold its
nerve throughout its entirety, descending
into a Jeepers Creepers-esque horror sham-
bles towards the end, it’s successful
enough in creating the sort of uncomfort-
able but incredibly watchable viewing
experience that David Cronenberg pio-
neered. There’s a dark, foreboding atmos-
phere throughout, and a script that’s coffee shop where nice-guy Aram It’s formulaic, sitcom-level stuff, with montage in movie history.
intelligent enough to raise questions (Justin Bartha) – who’s just found out desultory supporting characters, some But The Rebound is helped by appeal-
beyond the most obvious ones. that his new French wife was only badly shoehorned gross-out humour (sur- ing performances from its leads, the odd
Importantly though, like Cronenberg, after a green card, duh – works. He rounding Sandy’s date with a flatulent genuinely funny line and a hazy sense of
Splice is often delivered with a subtle becomes part-time babysitter for chiropractor) inserted for the chaps and good will that should make it a date night
humour which eases the intensity of the Sandy’s kids while she throws the worst ever fast-forward-five-years winner.
nightmare. Splice is a weird, sinister and herself into her job after a dis-
rather enjoyable thriller. astrous dating attempt. What
do you think happens?
SIX OF THE BEST
There’s nothing here that
THE REBOUND will surprise anyone, but ART The Serpentine This summer’s THEATRE Sweet Charity Another success to
Cert: 15 then there’s not meant to pavilion at the Kensington Gardens have originated at the Menier Chocolate
be. The obstacle to their gallery is a striking red construction Factory in Southwark, this swinging musical
Timothy Barber hhhii relationship is age – she’s by architect Jean Nouvel, and boasts a stand-out performance from Tamzin
40, he’s 25. Her sophisticat- includes red ping pong tables. The Outhwaite in the title role.
CATHERINE ZETA JONES sheds what has ed (ie bitchy) New York current exhibition is by acclaimed
become her rather cold image in this rom friends think she’s nuts, artist and photographer Wolfgang FILM Heartbreaker A charming and very
com which, while lightweight, has just and the fact that he lives Tillmans. funny French rom-com in the Hollywood
about enough bright humour to get over with his eccentric (ie Jewish) mould, starring Romain Duris and Vanessa
its generic flimsiness. parents, played by Joanna THEATRE The Railway Children A mar- Paradis as the mismatched couple in love.
Zeta Jones plays Sandy, a suburban Gleason and Art Garfunkel, vellous adaptation of the family favourite,
mom who discovers that her husband, hardly helps. Once they fall making inspired use of the old Eurostar ter- ART Fra Angelico to Leonardo: Italian
Frank, is having an affair. With her two for each other, you can pret- minal at Waterloo Station. Renaissance Drawings You’ve got until
young kids in tow, she moves into an ty much set a timer to the Sunday to catch this superb examination of
apartment in Manhattan and lands her- jokes about the kids discov- FILM Leaving A beautifully-pitched the draughtsmanship of many of the
self a job with a TV company (ah, if only ering mom making out with French drama, with Kristin Scott Renaissance greats, full of beautiful, fascinat-
life was so simple). Downstairs there’s a the baby sitter. Thomas on terrific form. ing works.

OUT THIS WEEKEND

PREVIEWS

FILM DVD MUSIC GAMES

CITY ISLAND Indie comedy about a disfunctional ALICE IN WONDERLAND Tim Burton’s disappoint- STING Symphonicities features orchestral versions DRAGON QUEST IX: SENTINELS OF THE STARRY
family with Andy Garcia and Emily Mortimer. ing take on the Lewis Carroll tale. of His Stingness’s biggest hits. A tiring thought. SKIES (DS) Ninth installment of the fantasy game.
IVUL French arthouse drama directed by the artist THE GIRL WITH THE DRAGON TATTOO Adaptation PROFESSOR GREEN The London rapper and MC’s FREDDIE FLINTOFF’S POWERPLAY CRICKET (DS)
Andrew Kotting. of the Stieg Larsson book. debut album is called Alive Till I’m Dead. How prosaic. The first cricket game for the Nintendo DS.

MY NIGHT WITH MAUD Classic drama by the late NANNY MCPHEE & THE BIG BANG Family fun with SETH LAKEMAN The folk crossover artist releases CATS & DOGS: THE REVENGE OF KITTY GALORE
French director Eric Rohmer, re-released. Emma Thompson in this enjoyable sequel. his latest album Hearts & Minds. (DS) Movie tie-in.
 22 Lifestyle | TV& Games CITYA.M. 23 JULY 2010

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
6pm Eggheads
6.30pm Antiques Road Trip
6pm London Tonight
6.30pm ITV News
6pm The Simpsons
6.30pm Hollyoaks
6pm Home and Away
6.25pm Don’t Stop Believers
TV PICK
7pm The One Show 7pm Victorian Pharmacy 7pm Emmerdale 7pm Channel 4 News 6.30pm Live from Studio Five
7.30pm DIY SOS: BBC News 8pm RHS Tatton 7.30pm Coronation Street 7.25pm 4thought.tv Topical reports.
8pm EastEnders Flower Show 2010 8pm Dickinson’s Real Deal 7.30pm CHOICE Love, Virtually 7.30pm Zoo Days;
8.30pm Celebrity MasterChef 8.30pm Gardeners’ World 8.30pm Coronation Street 8pm A Place in the Sun: Five News Update
9pm My Family 9pm Monsoon Railway 9pm Doc Martin: Home or Away: 8pm Nature Shock;
9.30pm The Old Guys 9.55pm Coast: Nicholas PC Penhale’s older brother 9pm Big Brother Five News at 9
10pm BBC News Crane explores Northern arrives in the village. 10pm The IT Crowd 9pm CHOICE The Mentalist:
10.25pm Regional News Ireland’s coastline. 10pm ITV News at Ten 10.30pm Big Brother Last in the series.
10.35pm CHOICE Would I Lie 10pm How Not to 10.30pm London News 11.05pm Stand Up for 10pm CSI: NY WOULD I LIE TO YOU?
to You? New series. Live Your Life 10.35pm FILM Midnight Run: the Week 10.55pm Don’t Stop Believers BBC1, 10.35PM
11.05pm The National Lottery 10.30pm Newsnight: Weather Comedy thriller, starring 11.50pm Music on 4: Fern Britton, Richard E Grant, Sanjeev
Draws 11.15pm FILM Crimson 11pm Grey’s Anatomy
11.05pm Mock the Week Robert De Niro. 1988. Intros: I Blame Coco 12am SuperCasino Bhaskar and Martin Clunes join David
Tide 1995; Weatherview 1.10am
Sign Zone: The Great Rift: Africa’s
11.35pm Shooting Stars 12.50am The Zone; 12am Intros – Lauren Pritchard 4am Motorsport Mundial 4.30am Mitchell and Lee Mack for the comedy
Wild Heart 2.10am Monty Halls’ 12.05am Rev ITV News Headlines 12.10am Wakestock Festival House Doctor 4.55am Animal panel show. Rob Brydon hosts.
Great Hebridean Escape 3.10am 12.35am FILM Man Dancin’: 2.50am Touching Evil 12.45am Big Brother: Live Rescue Squad 5.10am The New
High Street Dreams 4.10am-6am Drama, with Alex Ferns. 2003. 3.40am Touching Evil 4.30am- 3.40am This Week’s 4Music Top 20 Tomorrow 5.35am-6am Michaela’s
BBC News 2.25am-6am Close 5.30am ITV Nightscreen 5.25am-6.10am Countdown Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT 4.40am Nothing to Declare HISTORY DISCOVERY HOME &
SATELLITE & CABLE

7pm Live Darts. Day seven of
the World Matchplay. 11pm
Test Cricket. Pakistan v
Australia. 1am Darts 5am FIFA
Futbol Mundial 5.30am-6am
Football’s Greatest
SKY SPORTS 2
7pm Ocean Ride 7.30pm Live
Super League. Hull FC v Wigan
Warriors (Kick-off 8.00pm).
10pm Live Friday Fight Night.
Stuart Hall v Martin Power.
12am WWE: Late Night –
Smackdown 2am WWE: Late
Night – Bottom Line 3am
Friday Fight Night 5am-6am
NFL: Total Access
SKY SPORTS 3
7pm Tight Lines 8pm Live PGA
Tour Golf. The Canadian Open.
11pm European Tour Golf. The
Scandinavian Masters. 1am
Golfing World 2am World
Sport 2.30am PGA Tour Golf
5.30am-6am World Sport
7pm UEFA Under-19s
Championship Football 7.30pm
Live Football 9.30pm Cycling:
Tour de France 10.30pm Ten
Pin Bowling 11.30pm Planet
Armstrong 11.35pm-12.40am
Cycling: Tour de France
ESPN
5.30pm Pre-Season Friendly
Football 7.15pm Live
Premiership Rugby Sevens
Series 10.30pm The Ultimate
Fighter 11.30pm ICC Cricket
World 12am X Games Classix
1am Live Pre-Season Football
3am-5am Friday Night Fights
LIVING
7pm Celebrity Four Weddings
8pm Passport Patrol 9pm
Medium 10pm CSI: Miami
11pm Criminal Minds 12am
CSI: Crime Scene Investigation
2am So You Think You Can
Dance 3am The Fresh Prince of
Bel-Air 3.50am Maury
5.30am-6am Home Shopping
BBC THREE
7pm Doctor Who’s Greatest
Moments 7.15pm Doctor Who
9.30pm Mongrels: Nelson’s
friend Christian begins to
exhibit unusual behaviour.
10pm EastEnders 10.30pm
Big Meets Bigger 11.30pm
Family Guy 12.20am Lee
Nelson’s Well Good Show
12.50am Mongrels 1.20am
Danielle Lineker – My New
Stepfamily 2.20am Big Meets
Bigger 3.20am Lee Nelson’s
Well Good Show 3.50am
Mongrels 4.20am-5.20am The
Real Hustle Undercover
E4
7pm Hollyoaks 7.30pm Friends
9pm Supernanny 10pm
Supersize vs Superskinny
11.05pm Big Brother’s Big
Mouth 12.10am-6am Big
Brother: Live
7pm The Six Wives of Henry HEALTH
VIII 8pm Britain’s Lost Mega-
Fortress 9pm Black Death
7pm Test Tube Babies 8pm 10
Years Younger 9pm 18 Kids and
10pm Disappearing Britain Counting 10pm Little People, Big
11pm How the West Was World 11pm Mystery Diagnosis LOVE, VIRTUALLY
Made 12am Britain’s Lost 12am 18 Kids and Counting 1am
CHANNEL 4, 7.30PM
Mega-Fortress 1am The Six Little People, Big World 2am
Wives of Henry VIII 2am
First Cut takes a look at the world of
Mystery Diagnosis 3am 10 online dating, suggesting that technology
Ancient Discoveries 3am Death Years Younger 4am Baby Tales
has completely changed the ways in
of the Iceman 4am-5am 5am-6am Babes in the Wood
which people conduct their love lives.
Decoding the Past
SKY1
DISCOVERY 8pm Missing Children: Lorraine
8pm How Do They Do It? Kelly Investigates. A teenage
8.30pm How It’s Made 9pm
boy who disappeared on New
Clash of the Dinosaurs 10pm Year’s Day in 2001. 9pm Top
How the Universe Works 11pm 50 Celebrity Meltdowns.
Wartime London with Harry Moments when public figures
Harris 12.30am Destroyed in went off the rails. 11pm Lie to
Seconds 1am Bear Grylls: Born Me 12am Bones 1.50am Ross
Survivor 2am Mark Williams Kemp: Battle for the Amazon THE MENTALIST
on the Rails 3am Weaponology 2.40am Road Wars 3.30am FIVE, 9PM
3.50am Nasa’s Greatest Shear Genius 4.20am Tim Kristina Frye makes a televised appeal to
Missions 4.40am Unsolved Gunn’s Guide to Style 5.10am- Red John, bringing back dark memories
History 5.30am-6am How 6am Are You Smarter for Jane – who is forced to protect his
Does That Work? Than a 10 Year Old? rival from the ruthless serial killer.

COFFEE BREAKCopyright Puzzle Press Ltd, www.puzzlepress.co.uk


QUICK CROSSWORD
   

SUDOKU KAKURO
6 15 45 10 21 34 11
6 5 12
29  
38 13
Place the numbers from 1 to 9 in each empty cell so that each 45  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 7 22
7 15 9
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 16 8
   
above or to the left of it.
You can only use the digits 1-9 35 22  
    and you must not use the
32
17 3    
same digit twice in a block. 8 33 5 17 6
   The same digit may occur 14 20 

  more than once in a row or

column, but it must be in a
23
15
23

7 9
   separate block.
16 4 15
14 37
    16 7 24
 

   ACROSS DOWN
1 Large gathering 1 Loose-fitting
 
   WORDWHEEL I C
of people (6)
4 Type of sousaphone (4)
6 Bring something new
garment (5)
2 Bars of rolled steel
making a track (5)
Using only the letters in the Wordwheel, you have to an environment (9) 3 Aquatic South American
    ten minutes to find as many words as possible,
M O 8 Unwell (3) rodent resembling
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters D 10 Cinnamon-yielding
tree (6)
a small beaver (6)
4 Child learning
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
D E 13 Elevate, raise (4)
14 No longer fashionable (5)
to walk (7)
5 Profound emotion
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
I L 16 Group of islands, inspired by a deity (3)
capital Suva (4) 7 Popular drink (6)
QUICK CROSSWORD 3 4 1 2 1 3 8 17 Similar things placed 9 Unstintingly
5 $ ) 7 $ % $ 7 (
6 9 3 8 3 2 1 7 SUDOKU          in order (6) extravagant (6)
( , & ( 6 5 ;
1 8 1 3 5 5 9          20 Maiden name 11 Coppice (7)
7 3 9 8 4 2 12 Pompous fool (3)
+ ( / 3 7 % 3          indicator (3)
2 6 9 3 1 4 8
$ $ 7 2 1 ( 7 , 0 (
         21 Place of complete 15 Mentally or physically
% $ < 2 8 5 7 / 8 9 5 7 8 6 7 9
         infirm with age (6)
%
3 ( 7
( '
7 ,
6
( 5
1 $ , /
6 8 4 5
5 1
9 7 3
5 1 2 3
WORDWHEEL         
bliss (7-2)
22 Watery part of milk 18 Fatuous, mindless (5)
$ , 5 3 2 & . ( 7 2         
/ 6 2 5 ( 1 7 9 7 4 8 9 9 2 The nine-letter word separated from the curd 19 Grasslike marsh
6 3 2 1 2 7 4 1         
/ 2 5 8 1 * 8
was ACCOUNTED in making cheese (4) plant (5)
8 6 5 6 9 8 4         
6 2 1 * 6 < $ : 6
23 Cut or eliminate (6) 21 Cut wood (3)
 EX
TE Jul
29
ND y
ED
JOHN GRIFFITH-JONES

DE 01
AD
LI
2
NE
IS READY. ARE YOU?

0
John Griffith-Jones, Chairman of KPMG, is ready to judge entries to
the inaugural CITY A.M. Awards – the new financial business awards
from the UK’s leading, free, business daily. And, like CITY A.M. itself,
all entries are free to companies, teams and individuals working in the
financial business. Entry is online and there are 15 company awards
recognising corporate excellence and 6 awards that celebrate the
individual or team stars of the financial community.
Extended deadline for entries: 29 July 2010
For full details and helpful contact points please visit the
Awards website: www.CityAMAwards.com
For information on becoming a sponsor of the City A.M. Awards
contact Harry Owen: 020 7015 1241/ harry.owen@cityam.com
Book now for the City A.M. Awards reception, dinner, ceremony
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 City Focus
24
Investing with a conscience
Brazil cast a spell on these two
former property investors.
Kathleen Brooks meets them.
F
EW property developers can thank
the financial crisis for leading them
to their next business idea. Omari
Bowers and Andrew Skeene are a rare
exception. They could see that banks were
pulling back on their lending since they
specialised in arranging bridging finance
loans for property developments. When
they asked why, the genesis of Global
Forestry Investments was born. That was in
2008. “They told us they were investing in
land overseas as this was the next big mar-
ket,” says Bowers, who met Skeene through
a mutual friend in 2007.
That market was natural resources – par-
ticularly timber and farmland – and it
instantly appealed. “Banks were buying
land in Africa and Brazil, all fertile areas,
because diets were changing in emerging
markets,” explains Skeene.
The next step was to see this change for
themselves. That sent them on a journey
that covered the Middle East and China.
What they found tallied with their
research. “I went to three regions in
China,” explains Bowers. “Everything
revolved around food. I went to a 25 course
meal, it was meat and more meat.”
They had the demand, the next step was
to find the supply, which led them to
Brazil. They decided to test the market and
acted as a broker to a deal for 1,000
hectares of farmland in southern Brazil.
This turned out to be a crucial step: “We
learnt that the banking system in Brazil is
crazy, contracts are complicated and you
definitely need a solicitor who is bi-
Why now is the age
for private equity
London is becoming a hub for the funding of
strong companies, says Kathleen Brooks
T Q.
HE venture capital and private
equity industries had a bruising
time during the credit crunch. But
now that banks are less willing or
able to lend they have found some good
investment opportunities.
Mark Lilley’s business Abokado, a take-
away lunchtime chain with six branches,
recently benefited from a capital injection
from private equity group Kings Park
Capital to fund another 20 shops. Likewise,
my-wardrobe.com, the online fashion
retailer shunned by banks when it was
formed in 2007, also secured £6m of fund-
ing from Balderton Capital this year.
But what is it like to have private equity
partners? “I met some stuffy private equity
funders, which wouldn’t have worked well
at all. The relationship we have feels like a
partnership. We are all similar ages, from
similar backgrounds and with similar atti-
tudes. That helps,” says Lilley.
The industry has changed in the last cou-
ple of years, says Simon Clark, managing
partner at Fidelity Growth Partners and
chairman of the venture committee of the
British Venture Capital Association (BVCA).
| Entrepreneurs
Omari Bowers (left)
and Andrew Skeene,
founders of Global
Forestry Investments
lingual,” says Skeene.
After navigating these hurdles they
made a profit and realised they could do
this for investors in the UK. With their own
funds, they joined forces with a UK trust to
develop a product that would invest in
farmland and forests in Brazil. The product
will be available from the 1 August and the
minimum investment is £5,000, which will
buy you 100 trees.
Although the company was set up with a
firm profit motive, Bowers and Skeene
were altered by their experiences in Brazil:
“I saw a guy juggling on a highway to try
and get money from the drivers then I
looked over and saw his family huddling at
the side of the road,” Bowers recalls. This
sparked a plan to invest 10 per cent of their
profits in a sports and performing arts
academy to help the locals enhance their
natural talents.
The company employs 30, with 10 in
“Firstly, there has been a clear, noticeable
improvement in the standard of
companies being set up here,” says Clark.
“The second thing is that more successful
entrepreneurs are helping the next genera-
tion,” he says. This can be a fountain of
good advice for young companies. For
example, the founders of Skype launched a
$165m venture capital fund called Atomico
back in March.
The recession has also helped to sift out
the wheat from the chaff, making it easier
for venture capital to find good invest-
ments: “Businesses have been built in a
tough environment, which makes them
stronger,” adds Clark.
The rapid pace of innovation these days
also makes for interesting opportunities
for venture capitalists, says Patrick Reeve,
the managing partner of Albion Ventures:
“Change is a great incentive for new busi-
nesses, which is what we like.”
But standards have risen. Unlike during
the years of plenty, funding is now only
going to the best quality companies. Lilley
says that Kings Park Capital chose Abokado
because of its scalable business model and
CITYA.M. 23 JULY 2010
H&S LAW
Q&A
Q.
Does my company
need to worry about
health and safety law?
A.
The main requirement for small com-
panies is to draw up a written risk
assessment if you employ five or more
people. There is no legally required form that a
risk assessment must take, but it must involve
assessing potential risks to one’s employees,
customers, contractors, members of the public
and any visitors. This ranges from the obvious
– ensuring your toy products aren’t covered in
lead paint – to the parochial – making sure
there are no live wires hanging out of the
office walls. Increasingly, however, it also
requires you to take account of less obvious
potential risks: for example, if an employee is
planning to drive to a work-related event, you
need to check that she has a valid driving
license. Putting together a risk assessment
also requires you to consult your employees
about the risks and to make sure you have col-
lectively formed a policy for mitigating and
monitoring these risks. Eversheds’ Tim Hill
says: “You get to choose what those risks are.
You say, ‘Here are the risks, this is my assess-
Brazil looking after the plantation. Both ment, can we eliminate them or deal with
men live by the maxim that hard work will them safely?”.
get you anywhere: “Your career takes up 70
Q.
per cent of your life, so be sure to do some- How much of a bore is it to make
thing that you love doing,” says Skeene. sure you have complied?
Without the crisis, Bowers and Skeene
would not have become involved in the
A.
great commodity boom. They also In theory, abiding by health and safety
wouldn’t have come into contact with law should simply be good business
Brazil, a country for which they both have practice – you don’t want any of your
palpable affection. company’s valuable employees to get hurt,
after all. Hill says: “In most forward-thinking
CV | OMARI BOWERS AND ANDREW SKEENE companies, they get the message which is to
forget the headlines; it’s about what’s a risky
OB Age: 33 for Crystal Palace, while Bowers business – it’s about a good understanding of
AS Age: 32 played for both Charlton Athletic how your business works, how well-trained
and motivated your employees are.” As such,
OB Lives: Bromley, with 8-year and Wimbledon. Both still play there is only one principle that judges and
old son football for local teams. juries are meant to use to determine whether
AS Lives: Hertfordshire For more details go to: www. you are in breach of the law: whether you
have done everything “reasonably practicable”
Hobbies: Skeene once had a trial globalforestryinvestments.com to minimise risks in the workplace. But in
addition to following this principle, it is also
important to take note of any guidance
released on the subject – all collated on the
website of the Health and Safety Executive
(HSE), which is the government quango in
charge of administering the relevant regula-
tion and prosecuting breaches. Although
health and safety guidance is not technically
law, the courts will often take into account
whether you have followed the guidance. The
HSE website stipulates, for example, that in
relation to corporate manslaughter: “Juries
may also consider whether a company or
organisation has taken account of any appro-
priate health and safety guidance and the
extent to which the evidence shows that there
were attitudes, policies, systems or accepted
practices within the organisation that encour-
aged any such serious management failure.”
What happens if I don’t bother?
A.
Health and safety law is a criminal
matter and since January last year,
the maximum sentence changed
from a fine to up to two years in jail. This will
only apply in the worst cases – if, for exam-
ple, employees die as a
result of negligence. In
addition, there is the
threat of being sued to
consider. Although this is not
technically part of health and
safety law, again, lawyers
will draw on health and
safety guidance to impli-
cate you or your com-
pany. So it’s probably
Private equity strong management team. “After all, it is a good idea to
funds can feed management that delivers the business incorporate some
small businesses plan and if necessary steers the business safety measures
through difficult or unexpected times.” into your busi-
Picture: GETTY If this is the age of private equity ness opera-
funding, then make sure your business is tions.
well-positioned to take advantage. Juliet Samuel
 Punter
25

| Racing

RACING TRADER BILL ESDAILE, OUR RACING EXPERT, TAKES A LOOK AT THE BEST BETS OVER THE WEEKEND…

Dar Re Mi to be
crowned Queen
in tomorrow’s
King George
T
HE only place to start when looking
at tomorrow’s King George and
Queen Elizabeth Stakes is champion
trainer Sir Michael Stoute. He
trained the first three home in this race 12
months ago and looks to have another
massive chance of getting a one-two with
Derby winner Workforce and Hardwicke
Stakes hero Harbinger.
Workforce was hugely impressive at
Epsom and if the same horse turns up he
contest. She has been using up far too
much energy battling with her pilot on
her two most recent starts and will war-
rant plenty of respect when racing a little
less keen. That said, she will most likely
find Margot Did too tough a nut to crack
tomorrow and the Hayley Turner ridden
filly can gain compensation for her nar- Dar Re Mi is a
row defeat at the Royal meeting. striking each-way
It could be a day to remember for John bet for the
Gosden as he also has a decent chance King George.

will be very hard to beat. However, there
are reasons to doubt the form with pace-
maker At First Sight finishing second and
the majority of the others disappointing
in their subsequent races. There also has
to be a slight worry about the form of the
I GET
with MASS RALLY in the 3.15pm contest.
This son of Kheleyf was beaten just a head
by Kakatosi at Sandown over seven fur-
longs last time and the winner went in
again on Wednesday night. Mass Rally was
staying on at the finish, indicating he will

yard, as it’s been an untypically quiet July.
Don’t get me wrong, Workforce is easily
the most likely winner, but at even money
I’ll be looking elsewhere.
Harbinger, like so many of Stoute’s hors-
es, has progressed markedly as a four-year-
A £30
appreciate the step up to a mile, and I like
the fact he has strong form on the all-
weather, a good omen for Ascot.
Andrew Balding’s DECENT FELLA had
some excellent form in Ireland last season
and he could be thrown in off his current

FREE BET.
old and the form of his Ascot win isn’t that mark in the International Stakes (3.50pm),
far off Workforce. However, he has to give so is worth a bet at 10/1 with William Hill.
his stablemate chunks of weight and is also Meanwhile, over at Salisbury tomorrow
opposable on ground that is sure to be plen- night, look out for the Richard Hannon
ty quick enough. Cape Blanco is clearly a trained ARDOUR in the 7.05pm. His trainer
talented horse and he could turn out to be was very sweet on his chances at the
Aidan O’Brien’s best three-year-old, but I Goodwood Open Day earlier in the week
doubt if he’s quite good enough for this, and labelled him as his best bet of the NEW ONLINE & PHONE CUSTOMERS – Place a bet online
while perennial bridesmaid Youmzain, as weekend. His next best was AULD BURNS
always, has a small each-way chance. in the 2.05pm at Ascot so I’ll also be back- or by phone of between £10 - £30 and we will match your
However, the one to be on each-way is ing him.
the Lady Lloyd-Webber-owned DAR RE MI, Finally, Brian Meehan’s FIELD DAY looks stake with a Free Bet. Quote promo code: RP30*
who gave William Buick the biggest win of to be progressing at a rate of knots and can
his career to date in the Dubai Sheema justify the step up to Listed class at Ascot
Classic in March. She has since finished this afternoon (3.20pm). The daughter of
fourth of five in the Coral Eclipse, but that
race wasn’t run to suit and she will relish
Cape Cross improved dramatically from
her seasonal reappearance at Nottingham
KING GEORGE VI & QUEEN ELIZABETH STAKES
the step back up in trip. This is her time of when bolting up at Salisbury almost a fort- 1 mile 4 furlongs, Ascot, Saturday 4.25pm, Live on BBC TV.
year and with John Gosden’s horses start- night ago and she may well take this on
ing to hit form, she looks a great each-way
bet at 16/1 with Paddy Power.
her way to tackling Group races.
Evs Workforce
The two that I’m drawn to in the
Princess Margaret Stakes (2.40pm) are Sir
POINTERS... 5/2 Harbinger
Mark Prescott’s Hooray and Michael Bell’s FIELD DAY 3.20pm Ascot (today) 13/2 Cape Blanco
MARGOT DID. The former is improving AULD BURNS 2.05pm Ascot (tomorrow)
with every outing and finished a gallant MARGOT DID 2.40pm Ascot (tomorrow) 12 Youmzain
third to Memory at Newmarket last time.
She looks sure to step up again and may
MASS RALLY e/w
DECENT FELLA e/w
3.15pm Ascot (tomorrow)
3.50pm Ascot (tomorrow) 14 Daryakana
well be worth backing in-running on
Betdaq if she settles in the early part of the
DAR RE MI e/w
ARDOUR
4.25pm Ascot (tomorrow)
7.05pm Salisbury (tomorrow)
15 Dar Re Mi
200 Confront

INSIDER
the

oddschecker.com
All the latest odds and £100s of bookie freebets
Each way one-quarter the odds a place 1, 2.
Above race: Prices subject to fluctuation. In the event of any withdrawal(s), S.P place terms
and Tattersalls Rule 4(c) will apply based on these prices. Non-Runner-No Bet.

I
t’s about time the Derby winner
came out and took on his elders
in the King George. Great horses
like Shergar, Nashwan and
Lammtarra completed the double
and I think WORKFORCE can add his
name to the list tomorrow. His
Epsom performance was breathtak-
ing, scything through the field like a
knife through butter. Yes, the form
hasn’t been franked but that was only
his third career start and there
should be a lot of improvement to
come. Plus, he gets a handy weight-
for-age allowance and that should be
enough to see off stablemate
Harbinger.
The Richard Hannon team will be
going to Goodwood mob-handed and
the one I’m really interested in is the
Sir Alex Ferguson-owned PAUSA-
NIAS. We all know that the yard’s
two-year-olds have been absolutely
flying this season, but he did a piece
of work upsides some really decent
juveniles earlier this week. That sug-
gested he will win his maiden, so
keep an eye out for whichever race
he is entered in next week.
Another Hannon horse who I’ll be
backing on the Sussex Downs is
ORATORY in the last race on 0800 44 40 40 williamhill.com
Wednesday’s card. He has always
threatened to win a decent handicap *Free Bet is a win single added to your account on settlement of first bet. Free Bet must be on a different event to the initial stake. Free Bet stake not
included in any winnings/returns, valid for 7 days. Correct promo code must be used. All prices subject to fluctuation. Prices correct as at 4.00pm yesterday.
and the drop back to seven furlongs William Hill rules apply. Over 18s only. FOR ADVICE & INFORMATION VISIT WWW.GAMBLEAWARE.CO.UK
should suit him perfectly.
 Sport
26
Results
CRICKET
FIRST TEST MATCH: Sri Lanka v India (Galle); Sri Lanka 520-8 dec.
(N T Paranavitana 111, K C Sangakkara 103) and 96-0 (T M Dilshan
68no) v India 276 (V Sehwag 109, Yuvraj Singh 52, M Muralitharan
5-63) and 338 (S R Tendulkar 84, S L Malinga 5-50). Sri Lanka beat
India by 10 wickets.
SECOND TEST MATCH: Australia v Pakistan (Headingley
Carnegie); Australia 88 and 136-2 (41.0 overs) v Pakistan 258(S
R Watson 6-33).
LV COUNTY CH’SHIP - Division One: Warwickshire v
Nottinghamshire (Edgbaston); Warwickshire 313 (N M Carter
99no) and 100(S C J Broad 8-52) v Nottinghamshire 389 (M A
Wagh 139, C M W Read 83, A D Hales 53, N M Carter 5-116) and
25-0. Nottinghamshire (23pts) beat Warwickshire (6pts) by 10
wickets. Lancashire v Durham (Emirates Durham ICG);
Lancashire 344 (L D Sutton 101no, S Chanderpaul 92) v
Durham96-5 (33.1 overs). Essex v Yorkshire (Chelmsford); Essex
399 (R S Bopara 142, J S Foster 61, A U Rashid 5-87) and 229-3
(57.0 overs) (R S Bopara 102). v Yorkshire 324 (A Lyth 75, A U
Rashid 52no, T J Phillips 4-94). Somerset v Kent (Taunton);
Somerset 205(D I Stevens 4-38) and 128-2 (31.0 overs) v Kent
172(M Kartik 5-50). No play Thursday due to rain Division Two:
Worcestershire v Derbyshire (Derby); Worcestershire 279
(Shakib Al Hasan 90, J G Cameron 89) v Derbyshire183-4 (70.0
overs) (W L Madsen 75). Leicestershire v Glamorgan (Swansea);
Leicestershire 247 (J du Toit 75, J W A Taylor 70) v
Glamorgan45-0 (10.3 overs). Sussex v Middlesex (Uxbridge);
Sussex 452 (L J Wright 134, E C Joyce 85, M W Goodwin 80, T
S Roland-Jones 4-100) v Middlesex127-2 (38.3 overs). Surrey v
Northamptonshire (Brit Insurance Oval); Surrey 620-7 dec. (M R
Ramprakash 248, M N W Spriegel 103, R J Hamilton-Brown 103,
E Chigumbura 4-100) v Northamptonshire 240 (A G Wakely 50,
G J Batty 5-76) and 205-10 (S D Peters 50, S C Meaker 4-59).
Surrey (24pts) beat Northants (3pts) by an innings and 175 runs.
FIRST UNDER 19 TEST MATCH: Sri Lanka v England
(Northampton); Sri Lanka 287 (K D K Withanage 52, M P Dunn
4-50) v England 255-5 (71.0 overs).
CYCLING
TOUR DE FRANCE—STAGE 17 (Pau - Col du Tourmalet, 174km): 1 A
Schleck (Lux) Team Saxo Bank 5hrs 03mins 29secs, 2 A Contador
Velasco (Spa) Astana at same time , 3 J Rodriguez (Spa) Team
Katusha at 1.18. Overall: 1 A Contador Velasco (Spa) Astana 83hrs
32mins 39secs, 2 A Schleck (Lux) Team Saxo Bank at 0.08, 3 S
Sanchez Gonzalez (Spa) Euskaltel - Euskadi at 3.32. Others: 24 B
Wiggins (Gbr) Sky Professional Cycling Team at 41mins 03secs, 68 G
Thomas (Gbr) Sky Professional Cycling Team at 2.02.10, 153 S
Cummings (Gbr ) Sky Professional Cycling Team at 3.44.19, 155 M
Cavendish (Gbr) Team HTC - Columbia at 3.49.32.
SPORTS EDITOR JON COUCH
email sport@cityam.com
| PROMOTION
WIN
THE CHANCE TO BE A MCDONALD’S
PLAYER ESCORT AT THE FA COMMUNITY SHIELD
CITYA.M. 23 JULY 2010
Magic man
Murali bows
out in style
this is the opportunity I was waiting
▲
CRICKET
BY JON COUCH for to win this match and finish it
nicely,” said Murali, who made his
SPIN king Muttiah Muralitharan Test debut in 1992.
enjoyed a dream farewell to Test crick- Showing gratitude to his family,
et in Galle yesterday after claiming his team-mates, officials and president
800th wicket with the very last ball of Mahinda Rajapaksa, he added tearful-
his career. ly: “Thank you supporting me all
The Sri Lankan rewrote the history through these 19 years.”
books when he had Indian tail-ender Despite his glorious send-off, it isn’t
Pragyan Ojha caught by Mahela yet the end for Murali, who has still
Jayawardene at slip for his milestone made himself available for the shorter
wicket, while helping his country to a forms of the game.
ten-wicket success in the first Test.
As is traditional, the 38-year-old was LEADING TEST WICKET TAKERS
hoisted aloft by team-mates and car-
ried shoulder-high around the field to Tests Wickets
fireworks and rapturous applause.
Muttiah Muralitharan (SL) 133 800
Ojha’s wicket gave Muralitharan fig- Shane Warne (Aus) 145 708
ures of 3-128 and ensured he claimed Anil Kumble (Ind) 132 619
the eight wickets needed to reach the Glenn McGrath (Aus) 124 563
magical 800 in his final match.
Courtney Walsh (WI) 132 519
“Galle is my favourite ground and Muralitharan is hoisted aloft by team-mates in Galle. Picture: ACTION IMAGES
For your chance to win the escort place simply email your contact number to win@cityam.com
P
RESENTING Partner of The FA Wembley, goody bag and tickets for both
Community Shield, McDonald’s, has child and guardian to the match.
teamed up with City AM to give an McDonald’s has been the FA’s Community
aspiring young footballer between 7 – Partner since 2002, proudly supporting foot-
11 years old the chance to escort Manchester ball in local communities. In that time
United and Chelsea FC players onto the McDonald’s has helped to create more foot-
Wembley pitch at this year’s FA Community ball for all by recruiting and training more
Shield on Sunday 8th August 2010. than 16,500 community coaches, with one in
This once-in-a-lifetime experience includes four restaurants now supporting a local foot-
the exclusive opportunity to walk out, hand in ball club.
hand, with some of the country’s greatest Over the next four years, McDonald’s is
footballers - taking centre stage as the new committed to working with The FA to
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the chance to meet McDonald’s Director of communities across the UK through the FA
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Hurst, an overnight stay at a London hotel offering continuing to support coaches, clubs,
with breakfast and dinner, return transfers to players and volunteers.
TERMS & CONDITIONS:Entry closes Sunday 25th July at midnight, winner drawn at random from all the entrants and noti-
fied on the 26th July; The prize is for a minor aged between 7 -11 years old to escort the teams out for the FA Community
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Please note that, in addition to these Special Rules, participants are bound by McDonald’s standard Ticket Promotion General
Rules (the “General Rules”) which can be found at www.cityam.com/communityshield
CITYA.M. 23 JULY 2010
Sven back on Fulham
radar after Jol blow Alex and Benayoun add
▲
FOOTBALL
BY FRANK DALLERES
FULHAM could revive their interest in
former England manager Sven-Goran
Eriksson after a drawn-out attempt to
lure Martin Jol from Ajax ended in
embarrassing failure yesterday.
Ivory Coast coach Eriksson was on
the Cottagers’ initial shortlist to
replace Roy Hodgson and was said to
be aggrieved at the club opting to
pursue ex-Spurs boss Jol instead.
But the Londoners may now be
forced to eat humble pie and renew
discussions with the Swede after Jol’s
inability to break his contract left
them managerless with just over
three weeks until the start of the new
SPORT | IN BRIEF
Oosthuizen goes marching on
GOLF: Open champion Louis Oosthuizen
picked up where he left off at St
Andrews to take a share of the lead
going into the second day of the
Scandinavian Masters in Stockholm.
The South African, who won by seven
holes to claim his first Major title last
week, shot a five-under-par 67 to join
Richard Green and Dustin Johnson at the
top of the leaderboard.
“I wanted to play nicely,” the 27-year-
old said. “The last thing I wanted was to
put on a bad show and it was important
not to think too much about next week.”
Torrance stalks leading pack
GOLF: City.A.M columnist Sam Torrance
shot a steady two-under-par 69 to trail
leading trio by two shots after the open-
ing round of the British Seniors Open at
Carnoustie.
Torrance lies in a tie for seventh while
fellow ex-Ryder Cup captain Bernhard
Langer leads the way with a 67. Langer is
joined at the top of the leaderboard by
England’s Carl Mason and American Jay
Don Blake.
season. Cardiff’s Dave Jones, USA
coach Bob Bradley and ex-Manchester
City manager Mark Hughes are also
among the favourites to take the
helm.
Dutchman Jol, who was sacked by
Spurs in 2007 but still has a house in
the London area, had agreed personal
terms with Fulham and looked cer-
tain for a return to the Premier
League. But chief executive Alistair
Mackintosh was forced to accept
defeat yesterday morning after Ajax
made it clear there was no way they
would let the 54-year-old leave,
despite his wishes.
“It was unbelievable,” said Jol. “I
like Fulham, I like England, I like
London. So I was probably a bit disap-
Winner Schleck fails to close gap
CYCLING: Andy Schleck claimed the hon-
ours in the final major climb of this year’s
Tour de France – but failed to make any
ground on Albert Contador in the race
for the yellow jersey.
Luxembourg rider Schleck powered to
victory in the tough 174km 17th stage
from Pau and up the Col du Tourmalet,
but defending champion Contador
remained right on his rear wheel and
maintains his eight-second lead with
three stages to race.
Schleck admitted: “I think it is
between him [Contador] and me now.”
Watson leads Aussie charge
CRICKET: Shane Watson and captain
Ricky Ponting led the Australian fight-
back after day two of their second Test
with Pakistan at Headingley.
All-rounder Watson took 6-33 as
Pakistan crashed from 171-3 to 258 all
out in response to Australia’s first-innings
88.
Ponting then hit 61no as Australia
ended the day on 136-2 – still 34 runs
behind.
pointed I had to say no, because the
board don’t want to let me go under
any circumstances.
“I was willing to go there but as I
said, I’m under contract. I had to tell
them [Fulham] I had to stay. All the
problems, going to court, I didn’t
want that, because Ajax is too big to
be put through that misery.”
Fulham admitted their hopes had
been dashed in a statement, adding:
“When Fulham commenced negotia-
tions with Martin Jol, the club was
informed that an exit clause existed
in his contract with Ajax.
“Subsequent negotiations revealed
that the clause was no longer valid
and Ajax remained steadfast in their
desire to keep their manager.”
Defiant Schumacher insists he won’t
abort comeback and eyes eighth title
FORMULA 1
2010
BY FRANK DALLERES
SEVEN-TIME champion Michael
Schumacher has categorically denied
he could abort his comeback after an
underwhelming first half of the sea-
son and confirmed he will definitely
race again next year.
Schumacher had been tipped to
challenge for an eighth title after
ending his self-imposed exile and
agreeing to drive for the revamped
Mercedes team.
But the 41-year-old German has yet
to finish on the podium since return-
ing to the track and languishes in
ninth place in the drivers’ standings
going into his home Grand Prix this
weekend.
I’ll let Milner leave
if Man City’s price
is right, says O’Neill
▲
FOOTBALL
BY FRANK DALLERES
ASTON VILLA manager Martin O’Neill
has told James Milner he can leave if
Manchester City table an acceptable
offer after admitting the sought-after
midfielder has asked to leave.
Manchester City have had one bid,
thought to be worth £20m, turned
down by Villa, who are holding out
for nearer £30m.
But the big-spending Eastlands out-
fit are expected to return with an
improved offer, which could see
Nedum Onuoha or Stephen Ireland
used in part-exchange.
“The state of affairs is really
straightforward,” said O’Neill. “James
and his agent came to see us before
the World Cup and intimated that
they would like to go.
“Then Manchester City made the
offer which we told them about.
There is a difference of valuation at
this moment between the buying
club and the selling club.
to Chelsea’s injury woes
▲
FOOTBALL
CHELSEA boss Carlo Ancelotti has
now been handed a triple injury blow
ahead of his side’s defence of the
Premier League crown.
Just 24 hours after goalkeeper Petr
Cech was ruled out for the start of the
new season with a calf strain, the
Italian has now lost defender Alex
and new signing Yossi Benayoun for
the rest of the pre-season campaign –
and maybe even the season opener
against West Brom on 14 August.
Centre back Alex, 28, sits out
Yet Schumacher was on bullish
form yesterday on the eve of the
Hockenheim meeting, insisting his
disappointing recent form has not
dented his conviction that he can
win another world championship.
Asked to categorically confirm
that he would race next season,
Schumacher said: “Yes.”
And when quizzed over his
targets for 2011, he added: “It is
what I mentioned the other
day – that I officially publi-
cised when I rejoined
F1 – which is to win
the title. That is my
focus and that is what
I am here for.”
The former Ferrari
racer admits his come-
back has not gone according to
plan but directed some of the
Sport 27
“That may well be resolved and if
that is the case then absolutely fine. I
think James’ agent has told our chief
executive that he wouldn’t be signing
a new contract. Obviously that puts a
different slant on things.
“Although I haven’t spoken to
James since that day, he has played in
the World Cup and the rest really is
pretty well straightforward. If a fee is
agreed, at the end of the day, the play-
er can leave.”
City have already made three big-
money signings this summer –
Germany defender Jerome Boateng,
Spanish World Cup winner David
Silva and Barcelona’s Yaya Toure –
and are hopeful of landing Serbia full-
back Aleksandar Kolarov and Inter
Milan forward Mario Balotelli.
And Villa defender Richard Dunne
has warned Milner about competi-
tion for places at City, his former
club.
“At Aston Villa he will play every
week, at Manchester City he may
not,” Dunne said.
tonight’s pre-season friendly with
Ajax with a thigh injury picked up in
training, while Benayoun, a £5m
summer capture from Liverpool, has
already suffered a groin injury.
Indeed, Ancelotti admits he doesn’t
know whether Hilario or Ross
Turnbull will replace the injured
Cech for the start of the season, insist-
ing both will get their chance to
impress during pre-season.
“I think that against Ajax we will
play 45 minutes each for Turnbull
and Hilario, and I think Turnbull will
start the game,” he said.
blame at his car and suggested hopes
of instant success had been unrealis-
tic.
“Am I perfectly happy with my
own performance? That is probably
the wrong thing to say,” said
Schumacher (left).
“There is an expectation out
there, but you have to be real-
istic that it is probably
impossible to meet. To be
out three years and start
where I finished in a car
that doesn’t allow me do
it, is unrealistic. I will
take my time. I enjoy
most of it, this process.
There are ups and
downs and that is part
of motorsport. I am very
confident I can achieve it, which
is what I am focusing for.”