BUSINESS WITH PERSONALITY

IS IT ALL OVER FOR BP IN NEW

$10BN SUIT
FREDDIE FLINTOFF? OIL GIANT HIT BY
CHEMICAL LEAK
CRICKET ACE IN NEW SETBACK P23 CLAIMS P3
Issue 1,191 Wednesday 4 August 2010 www.cityam.com FREE

CITIGROUP PUTS RIM unveils

Blackberry
EGG UP FOR SALE iPhone rival

▲
TELECOMS
BY STEVE DINNEEN
M&A RESEARCH in Motion (RIM) yesterday
▲

BY MARION DAKERS unveiled its hotly anticipated “iPhone

CITIGROUP is gearing up to sell
British internet banking firm Egg,
kicking off a bumper period for asset
sales as banking giants across the
world move to slim down.
Citi Holdings, home to the bank’s
non-core operations, is believed to
have plans in place for an auction to
sell Egg in the next month for an esti-
mated £500m, according to Sky News.
Egg, bought by Citigroup for
£575m in 2007 when it was trying to
attract UK clients, still has around 2m
banking customers in the UK. While
it is held in Citi’s “bad bank” asset dis-
posal arm, it has worked with Citi to
introduce new products to enhance
its profitability over the last three
years. It still employs around 1,300
people in its London and Derby
offices.
Virgin Money was understood to
have expressed an interest in taking
over Egg when it was last slated for
sale in January 2009. However, Sir
Richard Branson’s firm is not
thought to be in the running for Egg’s
latest outing.
Citigroup said it did not comment
on rumours and speculation last
night, but a spokesperson added: “It is
already public knowledge that Egg is
part of Citi Holdings. Citi’s strategy is
to reduce the assets and businesses
within Citi Holdings, its portfolio of
non-core operating businesses and
Citi chief executive Vikram Pandit (above) sees Egg, headed by Bert Pijls (inset) as a non-core operation
assets, in an economically rational
manner while working to generate
long-term profitability and growth
from Citicorp, its core franchise.”
Any move to dispose of Egg would
be in line with chief executive Vikram
Pandit’s aim to cut back the bank’s
balance sheet. He told Congress last
year that his salary “should be $1 per
year with no bonus until we return to
profitability”.
The American group sold its pri-
vate equity fund of funds last month
to Lexington Partners for $5bn, in an
attempt to consolidate operations.
Moves are also underway for the US
government to sell off its 27 per cent
stake in the bank, which is expected
to rake in $30bn for the Treasury fol-
lowing its purchase of stock as part of
the Troubled Asset Relief Programme
(TARP) in 2008.
Royal Bank of Scotland is also
ramping up its asset sale, which was
Picture: REUTERS
ordered by the EU in return for its
£45.5bn government bailout.
Sempra Energy confirmed yester-
day it plans to sell the remaining
assets in its North American com-
modities joint venture with RBS by
the end of September.
Northern Rock is also poised to
rejoin the market after the firm hint-
ed yesterday the government may sell
the beleaguered bank by the end of
the year. NORTHERN ROCK: P7
killer” phone, the BlackBerry Torch.
The phone is the firm’s first sliding
keyboard model, and also features a
track-pad and touch-screen.
The firm hailed the device as the
“best BlackBerry ever”, calling the
release one of the most important in
its history. As well as the new hard-
ware, the phone offers an updated ver-
sion of the BlackBerry software which
allows better web browsing and more
intuitive access to its app store.
It was released in the US in an
exclusive deal with mobile operator
AT&T and will cost $199 (£125) with a
$15 or $25 a month contract.
Release dates for the UK and
Europe, as well as further pricing
information, is expected soon.
BlackBerry, which was hit last week
by a ban on its email and Messenger
services in the UAE after refusing to
unencrypt user data, is hoping the
phone will compete with big-name
rivals including the iPhone and models
powered by Google’s Android software.
The BlackBerry Torch has a
large touch screen that
slides up to reveal a thumb-
operated mini Qwerty key-
board. It also has a more
intuitive “home page” that
makes it easier for users to
keep track of email.

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 2 News
Why unemployment remains so high
EDITOR’S LETTER
ALLISTER HEATH
UNEMPLOYMENT in the UK is far
higher than most commentators
realise. The figures used by econo-
mists and the media only include peo-
ple who are looking for work, thus
missing out several million benefit
claimants who are on the dole in all
but name. The latest official statistics
(from last November) reveal that there
are 5.87m adults on one of the out of
work benefits, 15.8 per cent of the
working age population. This extraor-
dinary figure includes everybody offi-
cially on the dole, as well as all those
on other benefits such as incapacity.
7th Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Lifestyle Editor Zoe Strimpel
Art Director Darren Soulsby
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
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If you have any comments about the distribution
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self-regulation overseen by the Press Complaints
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editorial content of publications under the Editor’s
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www.pcc.org.uk
Printed by Newsfax International,
Beam Reach 5 Business Park,
Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
BARCLAYS OFFLOADS LOANS IN
STRUGGLING CONNAUGHT
Lenders to Connaught have started
selling their loans to the company, in
a sign of their concern about the state
of the embattled social housing main-
tenance group. Barclays, one of
Connaught’s syndicate of banks,
which is led by Royal Bank of
Scotland, on Monday night sold its
entire exposure of £19m for about 37
per cent of face value, people with
knowledge of the transaction said.
S&P OWNER REJECTS CRITICISM
FROM CHINA
Accusations made by a new Chinese
credit agency that its western coun-
terparts caused the financial crisis
were rejected by the head of McGraw-
Hill Companies, which owns
Standard & Poor’s. Harold “Terry”
McGraw III, chairman and chief exec-
utive, said global rating agencies S&P,
A decent guesstimate is that 1m of
these are incapable of working, either
because they suffer from debilitating
physical or psychological disabilities
or because they are acting as carers.
That leaves close to 5m people who
should be working but are not, a near-
criminal waste of resources and lives.
In Liverpool, 27.4 per cent of the
working age population are on out of
work benefits, in Glasgow 25.7 per
cent, in Birmingham 23.3 per cent
and in Manchester 22.5 per cent. The
disparities within the UK are enor-
mous: in Richmond upon Thames, it
its just 8.1 per cent; in Kingston 8.3 per
cent. London isn’t as bad as some
places but the stats can be awful here
too: over 20 per cent are on out of
work benefits in Hackney, Tower
Hamlets, Barking and Newham. At the
height of the bubble, 5.12m adults
were on out-of-work benefits across
the UK – so the recession is only partly
responsible for Britain’s high jobless-
ness. The real problem is the welfare
system, which has trapped many onto
BofA spins off
equity branch
BANKING
▲
BY MARION DAKERS
BANK of America has spun off part of
its mid-market private equity arm,
the first US bank to do so since the
financial reform bill was passed in
the States last month.
The bank is understood to be the
only investor in Ridgemont Equity
Partners to date, in a move which is
almost certainly directly linked to
Washington’s recent overhaul of
financial regulation.
“The decision to launch Ridgemont
Equity Partners was a collaborative
one, as we agreed that a new inde-
pendent platform is well suited to the
composition of our group and our
strategy going forward,” said
Ridgemont partner Travis Hain in a
statement yesterday.
The firm will manage around
Moody’s and Fitch were being unfair-
ly targeted by politicians, commenta-
tors and competitors.
MOSCOW URGED TO IMPOSE BAN ON
EXPORT OF GRAIN
Executives at Glencore, the world’s
largest commodities trader, yesterday
called on Moscow to impose an
export ban on grain to allow compa-
nies to renegotiate their contracts, in
the starkest sign yet of the severity of
the crop failure in Russia.
ALLY LIFTED BY RECOVERY IN CAR AND
HOME LOANS
Ally Financial, the financing compa-
ny formerly known as GMAC that was
rescued by the US government,
reported its second consecutive quar-
terly profit yesterday, driven by a
recovery in car and home loans. The
company, which changed its name to
Ally in May, reported net income of
$565m in the second quarter, com-
pared with a loss of $3.9bn a year ear-
lier.
a life of benefits. Millions of jobs were
created during the past decade but
few went to those on benefits.
It often makes little financial sense
for low-skilled individuals who are out
of work to take a low-paid, entry level
position: the loss of benefits elimi-
nates almost all the extra income
gained. That is why the proposals to
reform welfare from Iain Duncan
Smith, the secretary of state for work
and pensions, are so welcome. IDS
knows all about the system’s crippling
disincentives, as well as its absurd
complexities.
There are more than 50 benefits,
administered by the department of
work and pensions, HMRC, local
authorities, the department for educa-
tion and the department of health.
The existence of so many benefits
makes life extremely tough for
claimants. One woman with a dis-
abled son was forced to complete ten
application forms, containing 1,200
questions, to apply for benefits.
As David Martin, formerly head of
$1.5bn (£941m) of assets, representing
approximately 23 per cent of Bank of
America’s private equity portfolio. It
will focus on middle market buyout
and growth equity investments of
$25m to $100m.
The 19 investment professionals
moving to Ridgemont have invested
$3bn in 140 companies since 1993.
The new so-called Volcker Rule,
introduced in the States last month,
prevents banks from trading on their
own account or owning or sponsor-
ing hedge funds and private equity
businesses.
Bank of America, led
by chief executive
Brian Moynihan, has
spun off a part of its
private equity arm
DRAX DELAYS BIOMASS PLANT OVER
FINANCING
Controversial plans to build a string
of huge wood-fired power stations to
generate “green” electricity were
dealt a blow yesterday after one of
Britain’s biggest energy companies
shelved a £2bn project to construct
three plants, blaming continued
uncertainty over state subsidies.
ASIA BEGINS WORLDWIDE SCRAMBLE
FOR FARMLAND
Asia’s largest economies have begun
an aggressive worldwide scramble to
secure grain-producing farmland in a
bid to secure future food supplies and
ride out what are expected to be
increasingly frequent commodity-
market storms. The farmland grab is
expected to accelerate following the
latest eruption in wheat prices,
which logged their biggest monthly
gain in 51 years in July.
tax at Herbert Smith, notes in a pam-
phlet for the Centre for Policy Studies,
the DWP issues a total of 14 manuals –
8,690 pages of guidance – to its staff.
An additional set of four volumes
totalling over 1,200 pages covers hous-
ing and council tax benefits, primarily
the responsibility of local authorities.
HMRC’s tax credits manual is a fur-
ther 260 pages – though one also
needs to consult other tax manuals to
understand what is going on. There
also exists a cornucopia of circulars,
press releases and guidance notes, as
well of course as all the legal statutes
and statutory instruments.
It is vital that all of these rules and
benefits be torn up and replaced by a
single, simple universal benefit, as
advocated by Duncan Smith, and for
the poor to be able to retain as much
of any income they earn in the labour
market as possible, to incentivise
them to quit welfare and get a job.
David Cameron must back his secre-
tary of state all the way.
allister.heath@cityam.com
Wheat prices eased after Russia insisted a shortage is not on the cards Picture: REUTERS
Russia calms wheat price
COMMODITIES
▲
BY ALAIN TOLHURST
WHEAT prices have fallen back from
a 22-month high after Russia stated
that its exports would remain stable
despite the drought that has ravaged
the country’s crops.
Russia’s agriculture ministry said
the country’s grain crop will drop
this year but insisted large stocks will
prevent a shortage.
High temperatures and a long peri-
od of drought in Russia sparked fears
COPPER THIEVES UP THE ANTE
Thieves are used to taking a few risks
to steal lead off church roofs.
However, the soaring price of copper
has seen them amping up the danger
level as they steal power lines hum-
ming with thousands of volts.
According to E.ON, the electricity sup-
plier, criminals armed with chainsaws
have cut down 14 wooden poles that
carry the copper wires in the past
week, leaving thousands of customers
across the Midlands without power.
A THIRD OF PROPERTIES FOR SALE SEE
PRICE REDUCTION
A third of all properties for sale have
seen their prices reduced amid an
uncertain outlook for the housing
market, a new survey suggests. The
properties have seen their values cut
at least once since they were first list-
ed on the market, according to the
survey by property website Zoopla.
CITYA.M. 4 AUGUST 2010
NEWS | IN BRIEF
Motorola plans iPad competitor
Motorola is planning to release a com-
petitor to Apple’s iPad, based on
Google’s Android software. The device is
expected to feature television services,
two cameras and Adobe Flash compati-
bility, and will be marketed in conjunc-
tion with the Verizon mobile network.
The ten-inch tablet is slated for release
in time for the pre-Christmas rush.
DIC wins control of Almatis
Dubai International Capital has secured
approval for its restructuring plans for
bankrupt aluminium firm Almatis, after
debt investor Oaktree withdrew its
opposition in the US courts. Oaktree’s
departure from the tussle for control of
Almatis marks the end of a year-long
battle.
Och-Ziff quadruples its profits
Hedge fund company Och-Ziff Capital
Management said yesterday quarterly
profit more than quadrupled as
investors added billions in new money,
boosting its fee income. Total assets
under management at New York-based
Och-Ziff remained stable at $25.3bn as
of 1 August on $300m net inflows.
of a wheat shortage, and prices rose
to a high of €211 (£175) a tonne on
Monday, a surge of 18 per cent in five
days and a rise of 50 per cent in a
month.
Russia, along with other former
Soviet Republics such as Kazakhstan,
accounted for a quarter of the world’s
wheat exports last year, and the news
that at least one-fifth of that will be
destroyed this year prompted fears of
a return to the global food shortage
of 2007-08, which saw record food
costs and riots across the globe.
BARNES & NOBLE GOES ON BLOCK
Barnes & Noble put itself up for sale
yesterday, succumbing to mounting
pressure from shareholder activists
concerned about how digital books
are eroding the traditional business
of the largest US book-store chain.
New York-based Barnes & Noble said a
falling stock prompted its board to
consider all “strategic alternatives,
including a possible sale of the com-
pany.” Founder Leonard Riggio is also
mulling the possibility of forming an
investor group to buy the company.
CONDE NAST STEPS CLOSER TO WORLD
TRADE CENTER MOVE
Publishing giant Conde Nast has
agreed to tentative terms with the
Port Authority of New York and New
Jersey to move into about a million
square feet at One World Trade
Center, according to a person familiar
with the matter.
CITYA.M. 4 AUGUST 2010
Drugmaker Shire in £428m
bid for Belgian rival Movetis
▲
PHARMACEUTICALS
BY HARRY BANKS
DRUGMAKER Shire yesterday
unveiled plans to buy Belgium’s
Movetis for £428m in cash to boost its
portfolio of gastrointestinal products
and drive international growth.
The acquisition would give Shire
the rights to Resolor, which treats
chronic constipation in women, in 27
countries of the European Union and
BP faces fresh
leak costs in
$10bn lawsuit
BP IN CRISIS
BY EMMA SADOWSKI
BELEAGUERED oil giant BP was hit by
a $10bn (£6.27bn) legal headache yes-
terday in Texas, where it is being sued
for a chemical leak completely unre-
lated to the Gulf of Mexico oil spill.
Lawyer Tony Buzbee yesterday filed
the class action lawsuit on behalf of
2,000 people who claim their health
has been jeopardised by the leak of
Benzene and other toxic chemicals at
the company’s Texan oil refinery in
April and May this year, coinciding
with the Deepwater Horizon explo-
sion.
The lawsuit came as BP said it had
raised $1.9bn towards the spill costs
by selling its Columbian exploration
business to a consortium of rivals.
Under the terms of the deal,
Ecopetrol, Colombia’s national oil
company, will take on 51 per cent of
the business, while Canada’s
Talisman will take up the remaining
49 per cent. The two are set to hand
over $1.25bn upfront and will pay the
remainder once the sale is complete.
The sale forms part of BP’s 18-
Government should scrap new
City watchdog, says think-tank
▲
REGULATION
THE coalition’s plans for financial
reform will do little to benefit super-
visors, banks or the stock market,
according to research by the free-mar-
ket think-tank the Institute of
Economic Affairs (IEA).
Any replacement of the FSA will
not prevent financial scandals, the
IEA argues in a research paper, which
says UK regulators have historically
lacked proper accountability.
The IEA contends that the Bank of
England should have the power to
regulate banks with a deposit-taking
function, but should monitor capital
requirements instead of introducing
News 3
elsewhere. Shire estimates potential hunt out promising deals to drive the
annual peak sales of Resolor of more company’s growth beyond 2015.
than €300m (£248.9m). The venture capital firms backing
Buying Movetis fits Shire’s long- Movetis – Sofinnova Partners, sister
standing strategy of building its busi- firm Sofinnova Ventures, and Life
ness through acquisitions of firms Sciences Partners – support the bid,
selling specialist drugs. News of the and in total institutional sharehold-
latest bolt-on deal was cheered by ers owning 38.9 per cent have agreed
investors, with Shire shares rising to accept the offer, Movetis said. Shire chief execu-
1.31 per cent to 1,473p in London. Shire is offering €19 for each share tive Angus Russell
Chief executive Angus Russell said in Movetis, a premium of 74 per cent Picture: REUTERS
this year that Shire would continue to to Monday’s closing €10.90 share price.
month plan to shed up to $30bn in
assets to help pay for the dramatically
escalating costs of the Gulf of Mexico
disaster.
US government scientists have esti-
mated that around 4.9m barrels of oil
have so far billowed into the ocean
since the initial well explosion three
and a half months ago – a figure
which could cost BP in excess of
$20bn if charges of gross negligence
are successfully brought against the
company.
BP has already kick started its fire
sale of assets by agreeing a deal with
American group Apache to sell off
$7bn in US, Canadian and Egyptian
assets.
ANALYSIS l BP
p
660
550
500 415.65
450 3 Aug
400
350
300
10 May 21 May 18 Jun 8 Jul 28 Jul
a banking levy as suggested by David
Cameron’s government. It argues
hedge funds and investment banks
would be more efficient if left to self-
regulate.
The report says the Treasury’s
plans for regional stock markets
could be an ideal test case for self-reg-
ulation, and points out that the UK
markets were self-policed until 1986.
The report’s co-author, Philip
Booth, said: “If the coalition genuine-
ly wants to create better regulation,
along with more competition and
cheaper capital for companies, they
should scrap the FSA and the vast
majority of its functions and leave the
sector to itself as far as possible.”
 4 Focus on ITV CITYA.M. 4 AUGUST 2010

ITV to make
its first foray
into pay TV
▲

MEDIA Virgin Media.

BY STEVE DINNEEN
ITV BOUNCED back to first half prof-
its after a “hugely successful” World
Cup, announcing a raft of changes to
its business model.
The firm says the move is part of ITV’s new look board includes chief execu-
an effort to reduce the percentage of tive Adam Crozier (l), chairman Archie
revenue brought in by core advertis- Norman (above) and head of studios Kevin
ing from 74 per cent now to 50 per Lygo (r).
cent. Pictures:Micha Theiner/ CITY A.M/ PA
ITV will invest an extra £75m in its

New chief executive Adam Crozier

It reported a £97m profit after online business and develop micro-
limping to a £105m loss in the first payment technology in a bid to catch
half of 2009. up with its rivals.
New chief executive Adam Crozier It will use Project Canvas, the

says group has stagnated in recent years

says the beleaguered broadcaster –
which saw its share price fall almost
85 per cent during the advertising
drought between June 2007 and April
2009 – will now move away from its
reliance on core television advertis-
ing.
upcoming online-TV joint venture
with firms including Orange and the
BBC, to offer some content on a pay-
per-view basis.
It will also plough £800m – more
than expected – into new program-
ming to bolster its export business. MEDIA the firm is “over-reliant on one stag- Channel 4 despite dwarfing its rival’s
▲

It also unveiled its first foray into
the lucrative pay TV market, selling
its digital ITV2, ITV3 and ITV4 HD
channels to Sky. Sky will pay ITV an
undisclosed carriage fee in the deal,
which Crozier says is not exclusive.
The move, described by the firm as
“dipping our toe in the water” is like-
ly to be followed up with deals with
other pay TV broadcasters such as
Crozier accepted the firm must
change the way it develops new pro-
grammes – adopting a US-style focus
on branding for shows – admitting
the last major hit ITV developed was
Dancing on Ice back in 2006.
Advertising in the industry enjoyed
a cyclical upturn, with the market up
15 per cent on last year. ITV beat the
market with an 18 per cent spike.
INCOMING ITV chief executive Adam
Crozier used his first results briefing
to lay bare the failings of the previous
administration.
He slammed the old board, which
presided over the biggest ever decline
in the firm’s share price, claiming it
had failed to tackle the fundamental
issues facing the broadcaster. He said
nating form of income”, core TV
advertising, and is in desperate need
of branching out.
He said there has been “poor execu-
tion and decision-making” and a lack
of quality exportable content. He also
said ITV is lagging behind its rivals in
technology and punching below its
weight in terms of its online follow-
ing. It is roughly on a par with
TV audience share.
He welcomed the raft of changes to
the board, including Kevin Lygo, for-
mer director of television at Channel
4, as head of studios and Peter
Fincham as head of broadcast.
Chairman Archie Norman praised
Crozier’s arrival, saying more had
been achieved in three months than
in the previous three years.

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CITYA.M. 4 AUGUST 2010
David Cameron and Nick Clegg wrote to the Cabinet yesterday
Cameron: The
deficit is our
main priority
▲
POLITICS
BY DAVID CROW
DAVID Cameron yesterday insisted
spending cuts would boost the econ-
omy, amid rumblings of discontent
from coalition backbenchers who
fear the toughest spending squeeze
in peacetime history could go too
far.
Speaking at a public question and
answer session in the West
Midlands, the Prime Minister said
there would be “light at the end of
the tunnel” if his government man-
ages to slash spending and reduce
Britain’s huge budget deficit.
He added: “People need to know
there’s a prize at the end of this,
which is a successful decade for
Britain, which is what I’m trying to
deliver.”
Earlier in the day, Cameron and
deputy Prime Minister Nick Clegg
sent an open letter to all cabinet col-
Government slashes advertising
and PR jobs after spending freeze
▲
POLITICS
THE government’s information office
yesterday said it was slashing its
workforce by around 40 per cent,
resulting in almost 300 job losses.
The Central Office of Information
(COI) said a government freeze on
non-essential advertising and market-
ing spending had significantly
reduced its workload, with its
turnover falling 52 per cent in June
News 5
Increased spending pushes
Procter & Gamble off target
11.3 per cent to $2.19bn (£1.37bn) over ANALYSIS l Procter&Gamble
▲
CONSUMER GOODS
the quarter. 64 $
BY ALAIN TOLHURST 59.89
The fall came in spite of an eight 3 Aug
PROCTER & Gamble (P&G), the per cent hike in P&G’s sales volumes, 63
world’s largest consumer goods firm, the company’s most impressive gain
saw profits drop 12 per cent in the for 22 quarters. Total net sales for the 62
final quarter of its fiscal year as the year rose three per cent to $78.9bn.
61
company’s generous marketing P&G said it had ramped up adver-
spend outstripped rising sales vol- tising spend by 13 per cent to over 10
60
umes. P&G, which owns household per cent of total sales, while it also
brands such as Pampers nappies and increased its outlay on marketing
59
Crest toothpaste, said earnings fell and product development. 12 May 2 Jun 22 Jun 13 Jul 2 Aug
Picture: REUTERS
leagues, reminding them that cut-
ting the deficit was “the most urgent
issue facing Britain”.
The letter comes amid growing
uneasiness among a handful of
Tories and Lib Dems, who feel the
government is talking up austerity
at the expense of outlining a positive
strategy for boosting growth.
An official at the business depart-
ment said the chancellor was using a
“particularly blunt axe” to reduce
Whitehall spending, instead of cut-
ting more judiciously. “The
Treasury’s take no prisoners
approach means projects that actu-
ally boost growth and so reduce the
deficit are marked for the chop.”
And City A.M. has learned that
some cabinet ministers have been
approaching Cameron directly with
their spending plans, in a bid to win
a reprieve for projects that are likely
to be scrapped in the spending
review.
compared to the same month last
year.
“The new government has made it
clear that this reduction in spend
should be expected to continue into
the future,” the COI said in a state-
ment. “A leaner COI is in line with
new government priorities.”
It said it would be cutting 287 jobs,
taking its staff numbers to 450 and
making compulsory redundancies all
but certain.
 6 News CITYA.M. 4 AUGUST 2010

M&S hires new finance boss

to help Bolland’s revolution
cer Morrisons and is due to outline company AWAS, but from 2005 to
▲

RETAIL
BY JOHN DUNNE
MARKS and Spencer has hired former
WH Smith executive Alan Stewart to
help new chief Marc Bolland ring the
changes at the company.
Stewart, 50, who has held a series
of senior posts at public companies,
will join the retailer in October.
He will be the right hand man to
Bolland, who joined in May from gro-
his long-term strategy for the group
in November.
Marks & Spencer was hit in the
recession, after tough competition
from discount clothing chains like
Primark.
The company is now embarking on
a new era for improving its perform-
ance, with food sales high on the
agenda. Stewart is currently chief
financial officer at aircraft leasing
2008 was group finance director at
WH Smith.
Before that he spent seven years at
holiday firm Thomas Cook.
Bolland said: “Alan has an impres-
sive track record and will be joining
us with extensive experience of retail
and other highly competitive indus-
tries including travel and banking.”
Stewart replaces Ian Dyson who is
now boss at Punch Taverns. Alan Stewart will join M&S as right hand man to Marc Bolland

Housebuilder
shows profit
turnaround
and mortgage availability is a con-
▲

CONSTRUCTION
BY ALAIN TOLHURST
HOUSEBUILDER Taylor Wimpey
swung back into profit over the first
half of the year, helped by an improv-
ing outlook for the property sector
and a determined cost cutting drive.
Taylor Wimpey, the second largest
homebuilder by volume in the UK,
posted a pre-tax profit for the six
months to 4 July of £19.6m. That com-
pared to a pre-tax loss of £681.9m in
2009 when it was forced to write
down the value of work in progress by
more than £500m.
While house completions were up
only slightly in the first half com-
pared with last year, the average sell-
ing price rose by 9.8 per cent to
£168,000, up from £153,000.
That, along with a material
improvement in operating margins,
helped bring Taylor Wimpey back
into the black. The company said it
reduced build cost during the period
by nearly 10 per cent, and the UK
order book was up by over £100m
from the end of 2009 to £952m.
Chief executive Pete Redfern said:
“Although conditions are not normal
straint, we feel we are in good shape.”
Taylor Wimpey’s net debt also fell
sharply to £634m from more than
£1bn this time last year.
A combination of continued low
interest rates and lower unemploy-
ment than feared has helped house
prices rebound over the year so far.
Though tighter lending conditions
and falling confidence caused prices
to fall in July for the first time in five
months, experts said it would be a
temporary blip. The Centre for
Economics and Business Research
said the recovery would continue
through until 2014 due to low inter-
est rates and a shortage of supply.
ANALYSIS l Taylor Wimpey
p 31.01
40
3 Aug
38
34
30
26
10 May 21 May 18 Jun 8 Jul 28 Jul

Focus on margins helps push up profit

but concerns over debt pile still remain
BUILD it, and they will buy. Well, not
quite. Taylor Wimpey managed to
beat expectations in its first half by
focusing on higher prices – not vol-
ume. In the UK, it completed 4,804
sales at an average price of £168,000,
compared to 4,702 sales at £153,000
in the first six months of 2009.
Along with lower building costs,
higher prices helped push margins
up by 8.5 percentage points to 7.5 per
cent, more than beating expecta-
tions of around three per cent.
The second half of this year also
looks strong, with a robust forward
order book. After that, things are
less clear. Coalition plans to toughen
up planning laws and economic
uncertainty mean that the impres-
sive recovery could run out of steam.
That’s a worry for Taylor Wimpey,
thanks to its high gearing. Debt is
still a dirty word – especially for
housebuilders. It spent £60.2m serv-
icing its £634m debt pile in the first
half, and is likely to spend even
more in the second half.
More risk averse investors should
look at Berkeley instead, which has a
£317m cash pile and a more resist-
ant focus on London and the South
East. david.crow@cityam.com
BOTTOMLINE
Analysis by David Crow
CITYA.M. 4 AUGUST 2010
FSA fines RBS for deficient
money laundering controls
▲
REGULATION
BY EMMA SADOWSKI
THE ROYAL Bank of Scotland has been
slapped with a record £5.6m fine by
the Financial Services Authority (FSA)
for failing to adequately screen cus-
tomers and payments to prevent its
banks – RBS, NatWest, Ulster Bank
and Coutts – from being used for
money laundering or the financing of
terrorist activities.
In December 2007 to 2008, RBS did
not check if customers were on govern-
ment sanctions lists, which the FSA
said had led to an “unacceptable risk”
of it facilitating terrorist financing.
RBS received a 30 per cent discount
on the fine for cooperating with the
FSA’s investigation.
In 2007, RBS processed the largest
volume of foreign payments of any
UK financial institution, which the
FSA said left it vulnerable to “facilitat-
ing transactions involving sanctions
targets, including terrorist financing”.
Margaret Cole, the FSA’s head of
enforcement, said: “The involvement
of UK financial institutions in provid-
ing funds or financial services to des-
ignated persons on the sanctions list
undermines the integrity of the UK’s
financial services sector.”
RBS said it had acknowledged its
failings and was improving its sys-
tems.
Rock falls into
the red but its
bad arm heals
▲
BANKING
BY OLIVER SHAH
NORTHERN ROCK’S boss insisted
there was no timetable for returning
the bailed-out bank to private owner-
ship yesterday as it slumped to a
£142.6m loss in the first half.
Chief executive Gary Hoffman said
there was no deadline for a sale of the
“good” part of Northern Rock, which
holds savings accounts and lends new
mortgages, despite speculation a dis-
posal process could begin in the
autumn. The institution fell into the
red due to the cost of attracting retail
deposits in a low-interest environ-
ment and the weight of carrying
£6.3bn cash on its balance sheet.
Northern Rock also saw £1.9bn of
customers’ money leave after the gov-
ernment withdrew its 100 per cent
guarantee for deposits in February.
In contrast, Northern Rock Asset
Management – the “bad” part of the
NORTHERN ROCK EXPLAINED
Q. WHAT IS NORTHERN ROCK’S
BACKSTORY?
A. Northern Rock has its roots as a
quiet regional bank formed
through the merger of two building
societies. But under the control of
former chief executive Adam
Applegarth the bank pursued an
aggressive expansion strategy, selling
a record £10.7bn mortgages in the
first half of 2007 alone.
Q. WHY IS THE BANK IN PUBLIC
OWNERSHIP?
A. The company’s business model
relied on bundling up mort-
gages and selling them on as securi-
ties to repay loans from the
wholesale market. When demand for
mortgage-backed instruments dried
up in summer 2007, Northern Rock
was forced to ask the government for
emergency funding. The news
sparked the first run on a British
bank for 150 years as panicked savers
withdrew cash. After months of pro-
crastination, the government finally
took Northern Rock into state hands
in February 2008.
News 7
Northern Rock’s
Gary Hoffman
Picture:
Micha Theiner/
CITY A.M.
bank, housing £51bn of potentially
toxic debt – made a pre-tax profit of
£349.7m. The rebound from a
£724.2m loss last year was driven by a
90 per cent repayment rate on mort-
gages and a swing in the value of its
derivatives portfolio.
The bad bank reduced its reliance
on a government loan from £22.8bn
to £22.5bn over the six months.
Northern Rock was split in half at
the start of the year, two years after it
was nationalised at the start of the
banking crash. The government plans
to merge the bad bank with Bradford
& Bingley by the end of the year and
return the good side to the stockmar-
ket at an unspecified time.
In a statement alongside its results,
Northern Rock said: “The company
continues to prepare the business for
an eventual return to the private sec-
tor, but only when conditions are
right to do so, in the best interests of
taxpayers.”
Q. WHAT
NOW?
HAPPENS Q&A
A. Yesterday’s first
half results point to a remark-
able turnaround in the “bad” part of
Northern Rock’s business. A
spokesperson says that bit of the
bank is on course to be merged with
the nationalised part of Bradford &
Bingley, the building society, by the
end of this year. The “good” bank is
experiencing short-term difficulties
driven by the Bank of England’s 0.5
per cent interest rate. Northern Rock
is coy as to when the government
will begin winding down its expo-
sure, but there are suggestions it
could come as early as autumn.
Q. WHO IS IN CHARGE OF
NORTHERN ROCK?
A. Adam Applegarth resigned at
the end of 2007. Andy Kuipers
served as an interim chief executive
before Gary Hoffman, previously
vice-chairman of Barclays, joined in
July 2008. Hoffman is in charge of
piloting Northern Rock through the
next phase of its history.
 8 Economic News
Construction
growth slows
down in July
▲
UK ECONOMY
BY JESSICA MEAD
CONSTRUCTION activity in the UK
dropped sharply to a four-month low
last month, according to a leading
survey published yesterday.
The Markit/CIPS purchasing man-
agers’ index for the construction sec-
tor fell to 54.1 in July from 58.4 in
June, highlighting concerns that
activity in the sector may have
peaked. However, this is the fifth con-
secutive month that the PMI has
remained above the 50 level that sep-
arates expansion from contraction.
UK construction companies report-
ed a further rise in new business dur-
ing July but there was a four-point
drop in the balance measuring con-
struction firms’ business expecta-
tions, which came on the heels of a
10-point fall in June.
This is likely to reflect their percep-
tion of lower demand stemming
from fiscal austerity measures
announced in June’s Budget, said
Varun Bhabha at Barclays Capital,
who added: “This fall underscores
the risk of a sharp weakening in the
total activity balance in the coming
months.”
Howard Archer at IHS Global
Insight said: “While the construction
sector’s recovery still appears to be
intact after extended, deep recession,
the loss of momentum evident in the
July purchasing managers’ survey
highlights the fact that the sector
continues to face a very challenging
environment. This will likely cause
the recovery to be gradual overall
and bumpy.”
He added: “In particular, the con-
sruction sector is likely to be hit sig-
nificantly by the coalition
government’s need to substantially
rein in public spending for an
extended period as this is clearly
going to hit expenditure on infra-
structure and public buildings.”
The PMI indicated that there was
slower expansion in July in house
building and commercial activity,
while civil engineering grew only
marginally last month.
Retailers have slashed prices to reel in customers
Discounts take non-food
inflation to 10-month low
RETAIL
▲
BY JESSICA MEAD
AGGRESSIVE discounting by retailers
caused non-food inflation to deceler-
ate to just one per cent, its slowest
rate of growth since November 2009,
the British Retail Consortium (BRC)
will say today.
Overall, shop price inflation
remained at 1.5 per cent thanks to an
acceleration in food inflation to 2.5
per cent.
Picture: Micha Theiner/ CITY A.M
Stephen Robertson, director gener-
al of the BRC, said: “Shop prices have
remained stable largely due to aggres-
sive discounting driving non-food
inflation down to its lowest rate since
November 2009.”
The BRC continues to believe that
the the past period of high and
volatile shop price inflation appears
to be over for now, although it added
that the recent shock in the supply of
wheat is likely to put pressure on food
inflation in the coming months.
CITYA.M. 4 AUGUST 2010
Treasury yields
at record low as
Fed mulls new QE
US ECONOMY
▲
YIELDS on short-term US Treasury
debt fell to a record low yesterday
after a raft of negative data height-
ened expectations that the Federal
Reserve may seek to further stimulate
the stagnating economy.
Two-year note yields, which move
inversely to prices, fell three basis
points to 0.53 per cent, after touching
a new record low of about 0.51 per
cent earlier.
The move came after data from the
US Commerce Department showed
that the savings rate among US
households rose to the highest level
in a year in June as income and spend-
ing were flat – failing to show growth
for the first month since July 2009.
The June report was slightly weaker
than expected and included down-
ward revisions to figures from April
and May. Meanwhile, an index of U.S.
pending sales of homes fell 2.6 per
cent in June while factory orders
declined 1.2 per cent.
According to The Wall Street
Journal, given signs the economy is
losing momentum, Fed officials are
now mulling whether to use cash the
central bank receives from maturing
mortgage bond holdings to buy new
mortgage or Treasury bonds, rather
than allowing its portfolio to shrink
gradually.
CITYA.M. 4 AUGUST 2010
BILLINGSGATE PORTERS PROTEST CHANGES
888 on radar
as takeover
fever spreads
▲
LEISURE
BY HARRY BANKS
ONLINE gaming firm 888 said yester-
day it had been contacted by rivals
looking for takeover opportunities in
the wake of last week’s tie-up between
Austria’s bwin and PartyGaming.
The merger between bwin and
PartyGaming will create the world’s
biggest internet gambling firm and
puts pressure on other companies in
the sector to strike deals or risk losing
out as online gambling laws are
relaxed across the world.
“This puts us in a position in which
we are one of the best assets in the
field – we got a few phone calls imme-
diately from various people. Everybody
in the industry is looking and saying
‘who is the best one to merge with if
we need to?’,” chief executive Gigi Levy
said. “We don’t see anything happen-
ing imminently but there’s definitely
expressions of interest.”
KBC Peel Hunt analyst Nick Bartram
said 888 must strike a deal in order to
fully realise value in its business, in
light of its weak trading performance
in recent quarters. “The pressure is
now on for others to pursue consolida-
RBC on hiring spree for eastern
Europe and Middle East bankers
▲
WEALTH MANAGEMENT
RBC WEALTH MANAGEMENT, the
high net worth specialist, is looking
to hire 10 bankers to cover eastern
Europe and the Middle East by the
end of the year.
In his new role as head of private
client wealth management for the
British Isles, former UBS veteran
Philip Harris is embarking on an
aggressive recruitment spree. Harris
wants to bring in five people apiece
for eastern Europe and the Middle
East, with one “rainmaker” at the
head of each team, as well as extra
staff for the UK.
“I’m trying to recruit people who
News 9
PORTERS at
JC Flowers buys
into Kent Reliance
Billingsgate fish
market near Canary
Wharf began a cam-
paign against
reform plans yester-
day, which they
claim would destroy
the 680-year-old Provident Society.
▲
BANKING
institution. The BY JOHN DUNNE JC Flowers would receive shares
market generates and convertible preference shares in
£200m in annual BUYOUT firm JC Flowers yesterday the bank in return for a £50m capital
revenues and its said it would take a £50m stake in injection.
porters transport Kent Reliance as part of a restructur- The deal still requires the backing
25,000 tonnes of fish ing plan. of Kent Reliance’s customers as well
every year. Under the deal, Kent Reliance’s as the approval of the Financial
assets and liabilities would be trans- Services Authority. Kent Reliance said
Picture: REUTERS ferred to a new bank, which would yesterday that it was likely to clinch
become a subsidiary of a new mutual similar deals with other mutually-
organisation, the Kent Reliance owned British lenders.
tion or risk being left behind. For 888
consolidation looks imperative and,
given the bottom line performance,
the group could be pursuing this from
a sole position of weakness,” he said.
888, which runs online casino,
bingo and poker websites, said it made
second quarter operating income of
$61m (£38.3m), unchanged on the pre-
vious year, after growth in bingo and
emerging markets offset weak trading
in its poker division. Poker has been
hit by competition from websites con-
tinuing to take bets from US-based
gamblers illegally.
888 said average daily revenues in
July were down six per cent on the pre-
vious quarter.
ANALYSIS l 888
p
80
70
48.25
60 3 Aug
50
40
10 May 21 May 18 Jun 8 Jul 28 Jul
have existing books and an existing
run rate,” Harris said. “To be a success-
ful banker in high net worth you
need to be turning over at least £1m
in revenue per annum.”
RBC, which manages C$240bn
(£146.9bn) globally, has been pushing
its London-headquartered wealth
management arm. The Canadian
bank has hired 1,100 people around
the world in the past 12 months and
believes there is an opportunity to
steal market share from rivals in the
aftermath of the financial crisis.
“The industry has not served itself
brilliantly [in the downturn],” Harris
said. “The challenge for the industry
generally is client confidence.”
 The Capitalist
10
GOODHART: IF I WERE ON TODAY’S
MPC, I’D WANT TO BE PUT TO SLEEP
ATTENDEES at the London School of
Economics’ (LSE) monetary policy
conference yesterday morning were
treated to an A-list talking heads
line-up, with former members of the
Monetary Policy Committee (MPC)
Sir John Gieve and Charles Goodhart
joining Fitch Ratings’ Brian Coulton
to discuss interest rates.
Unfortunately, the audience was
not about to flatter its illustrious
panel. A survey of the spectators
revealed that 48 per cent thought
regulations had not reduced the
chances of another Northern Rock –
bad news for Gieve, who has been
dubbed “the fall guy” for the
Northern Rock crisis.
But current MPC members might
have been even more dismayed by
words from old sage Professor
Goodhart. Musing on the difficult job
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
facing the committee in these chal-
lenging times, Goodhart suggested
that he would want to be Rip Van
Winkle if he were sitting on the com-
mittee nowadays.
Keen American literature students
will remember Van Winkle as the fic-
tional Dutch settler in a children’s
story who, after wandering into the
mountains to escape his wife, drinks a
potion that makes him fall asleep for
Professor Charles Goodhart says he’d want to be Rip Van Winkle
20 years.
Fortunately, Goodhart soon
revised his prognosis from 20 years
of monetary turmoil to two, conclud-
ing: “I would want to be anaes-
thetised till 2012 if I were on the
MPC at the moment.”
Bad luck, Mervyn.
MUGABE-COMMS
Ryanair just couldn’t resist jumping
into the increasingly vicious internal
row over easyJet’s punctuality. Last
week, easyGroup founder Sir Stelios
Haji-Ioannou wrote a letter to
easyJet’s board threatening removal
of the “easy” brand if they didn’t up
Ryanair’s Mugabe spot Picture: GETTY
their game. Quick to capitalise on
the fuss and drawing inspiration
from reports that easyJet’s punctual-
ity lags behind even that of Air
Zimbabwe, Ryanair bought up news-
paper ads featuring Zimbabwean dic-
tator Robert Mugabe under the
headline, “Here’s easyJet’s new head
of punctuality”. Its point? Unclear.
But its marketing team certainly
knows how to throw fuel on a
fire.
TALK FOREX TO ME
Forex analysts and their cohorts
now have a new way to procras-
tinate online between trades.
LetsTalkFX.com, a social net-
working site for anyone con-
nected to the forex industry,
has now topped 700 mem-
bers since going live in June,
and the site is due to under-
go its first upgrade soon.
The site provides its vet-
ted membership with a
range of services from
social forums to events
listings and blogs. Asked
how they vet their mem-
bers for the more exclu-
sive parts of the site,
co-founder Paul Ronan
tells The Capitalist: “We
have fairly good con-
nections through-
out the
CITYA.M. 4 AUGUST 2010
Picture: GETTY
marketplace.” But he was coy about
where he works – it’s still top secret.
Ronan is one of five co-founders who
began the site as a business venture
with their own money, the others
being Stefan Basiuk, FXecosystem’s
Jon Vollameare and two as-yet myste-
riously unnamed figures.
With Finotec Group’s CEO Xavier
Alexandre offering exclusive blogged
content on “strap-on algorithmics”
and the site’s membership expected
to expand by 6,000 over the coming
months, forex traders might finally
be about to give up yelling down the
phone at one another in favour of
more genteel, online banter.
ARCHITASTIC
The Capitalist hears that savvy workers
at Architas Multi Manager have been
scoring some strategic brownie
points with their new managing
director this week. Having been
lured from Barclays Wealth after 15
years there, Hans Georgeson came
into work for his first day on Monday
to greet a workforce somewhat
depleted by the summer holidays.
Those who are around haven’t wast-
ed any time, however: while working
late in Architas’ swanky Old Broad
Street HQ, Georgeson has been
joined by colleagues still slaving
away at their desks in a solid effort
to curry favour early. We salute your
cunning – but analysts should be
warned: it won’t take long for the
new boss to get wise, so best score
points early on.
SLUMMING IT
News from Cowes Week slipped
through the grapevine into The
Capitalist’s inbox yesterday, with City
folks being treated to sightings of
the new face of Musto clothing, Zara
Phillips. Phillips has been in town to
promote the brand, which is hoping
to cement its equestrian and yacht-
ing credentials by bringing the royal
horsewoman on board. Meanwhile,
former Formula One owner Eddie
Jordan was spotted sailing into
place to take part in the Queen’s
Cup on a 39-foot yacht called
Erivale. Jordan was dwarfed by
the more impressive 100-foot
competitors and spectators
could only wonder why the
multi-millionaire was
“slumming it” on one of
the little ’uns. Did no
one invite him aboard
one of the nice big
boats?
Victoria Bates is
away.
CITYA.M. 4 AUGUST 2010
Trading income hit
prompts slump in
UniCredit’s profits
BANKING
▲
BY HARRY BANKS
UNICREDIT, Italy’s biggest bank, post-
ed a 70 per cent drop in second-quar-
ter net profit yesterday, hit by a slump
in trading income and a goodwill
impairment, sending the shares
lower.
UniCredit, whose roots stretch back
to a 15th-century Bologna municipal
pawnshop, posted a net profit of
€148m (£122.8m), including a €162m
goodwill impairment charge stem-
ming from the economic crisis in
Kazakhstan. Analysts had forecast a
consensus net profit of €251m.
The bank, the biggest lender in cen-
tral and eastern Europe, also recorded
€1.716bn in loan loss provisions over
the quarter.
Trading revenues fell to €58m from
€1bn in the same period in 2009, hit
Xstrata set to spend
$5bn on new mines
MINING
▲
BY STEVE DINNEEN
MINER Xstrata said yesterday it would
pump over $5bn (£3.1bn) into new
mines and keep targeting organic
growth as a priority rather than acqui-
sitions, after first-half profits surged
on higher metals prices.
Net profit was $2.29bn for the six
months to 30 June, compared with
$690m a year earlier, when results
were impacted by a $219m exceptional
charge. Revenue rose 43 per cent to
$13.61bn from $9.54bn.
The Anglo-Swiss group said it was
cautious about the global economy in
the near term, echoing the concerns of
mining peers, but was optimistic
ANALYST VIEWS: WHAT DOES THIS MEAN FOR XSTRATA?
DAVID BUIK | BGC PARTNERS
“ These results are up 300 per cent on
last year. It is a staggering achievement to deliver
figures this robust. It shows how much demand
for coal has increased in China. This is leading the
firm’s push and will continue to be a strong driver
for growth into the future. The results are also a
strong statement of how healthy the sector is at
the moment, with Anglo also performing very
” ”
well. I expect these firms to continue to
perform and the outlook looks good.
TOM GIDLEY-KITCHIN | CHARLES STANLEY
“ The interesting thing about these results is that they show a marked change in strategy for Xstrata. Back in
February, when the firm released its preliminary results, it focused on organic growth and not mergers and acquisitions,
where there were limited opportunities. However, management has now made it clear that it will give a higher profile to
M&A again going forward. It seems highly likely that Xstrata will try to increase its stake in Glencore, which will make the
company an unusual entity in the sector as both a producer and a major trader with a global reach.
News 11
Public sector
cuts begin to
impact jobs
ECONOMY
▲
BY SAM SHEPHERD
GROWTH in recruitment activity
demonstrated a marked slowdown in
July, in the first tangible sign that the
by the government debt crisis. government’s public sector austerity
Net interest income – what a bank cuts are starting to take their toll.
earns on loans less what it pays on The month saw weaker rises in
deposits – was up 1.5 per cent quarter- both permanent and temporary
on-quarter at €3.98bn. appointments, the KPMG and
UniCredit’s core tier one ratio, or Recruitment and Employment
the standard of capital held against Confederation (REC) Report on Jobs
risky assets, was 8.41 per cent at the showed. The number of net new per-
end of June, down from 8.45 per cent ANALYSIS l Staff appointments via recruitment consultancies manent appointments grew 24.4 per
Increasing rate of growth
in March. 70 Temp contract billings
cent, compared to 28.9 per cent in
June, while the number of job vacan-
65
ANALYSIS l UniCredit 2.1750 cies rose at their lowest level for eight
60
2.2
€ 3 Aug months.
55
Bernard Brown, head of business
50 services at KPMG, warned the report
2.0
45 was “a sign of things to come as the
40 public sector prepares for more
1.8 35 Permanent placements
spending cuts which are likely to
30 impact the jobs market further”.
Increasing rate of decline
1.6 Engineering and construction was
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
the most sought-after sector in terms
1.4
of staff demand, a sign of a sustained
@
25 May 14 Jun 2 Jul 22 Jul The job market is looking tough once again Picture: Micha Theiner/ CITY A.M recovery in manufacturing.
@
about medium-term growth in metals likely to persist for the foreseeable
demand, particularly from emerging future. We remain very confident in
economies such as China and Brazil. the buoyant outlook for Xstrata’s com-
Xstrata, the world’s biggest exporter modities in the medium term. The
of coal used in power plants, said it developing economies, led by China,
had approved $4.2bn to build the Las Brazil and India, are set to continue to
Bambas copper mine in Peru and provide the main driver of demand
$1.1bn for the Ulan West coal project growth for our products.”
in Australia. Analysts welcomed the results and
@
The company, which built itself up the approval of new projects, which
as a formidable competitor to major came earlier than expected.
mining groups through a series of
acquisitions, has shifted focus recently Chief executive Mick
and now has 15 major growth projects
that will cost $14bn in total. Davis says he remains
Chief executive Mick Davis said: confident after his firm
“The short-term outlook for macroeco- unveiled better than
nomic conditions remains mixed, expected results.
with a ‘three-speed’ global economy
By Steve Dinneen
CHARLES KERNOT | EVOLUTION
“ Xstrata generated coal revenues around
£226m better than anticipated and this largely
flowed through to the bottom line leaving net earn-
ings at £1.44bn against our £1.25bn forecast. Our
concern about Xstrata’s coal performance proved
unfounded. These are a good set of results. It is, how-
ever, all about growth and the company makes a big
play of its £8.77bn pipeline – but we think Anglo has
more growth and cost-cutting opportunities
hence it remains our preferred stock.
MORE NEWS
ONLINE
”
www.cityam.com
 12 News CITYA.M. 4 AUGUST 2010

CITY VIEWS: WHAT IS THE FUTURE FOR PENSIONS?

Top firms in
Profits surge KEVIN HUGHES | AXA
Interviews by Sam Shepherd and Alain Tolhurst

a bid to fill
25pc at NYSE “Working in insurance I’m pretty well looked
after. I’ve heard people talk about concerns but
from a personal perspective I’m not that worried
about the future of pensions.”
pension gap
Euronext firm

▲
PENSIONS
BY ALAIN TOLHURST
BRITAIN’S top companies doubled
JONATHAN WEITZMANN | APPLEBY GLOBAL the amount they paid into pension
schemes in 2009 compared to 2008,
FINANCIAL MARKETS shrink as upstarts like BATS and Chi-X according to a report by actuaries
▲

BY HARRY BANKS
NYSE Euronext beat expectations
with a 25 per cent rise in second-quar-
ter profits, boosted by new initiatives
to combat fierce competition in tradi-
tional share trading.
The trans-Atlantic exchange opera-
tor said a surge in derivatives trading
helped it earn $184m (£115m) in the
period – or 64 cents per share – up
from $132m a year ago, while revenue
climbed seven per cent. Analysts on
average had expected NYSE Euronext
to earn 59 cents per share on $659.6m
in revenue.
Its derivatives segment accounted
for 35 per cent of net revenues and 49
per cent of operating income, up
from 28 and 32 per cent from the
year-earlier period respectively, in a
sign that the push into that business
is paying off. However, the firm
warned that it may now be January
before its US futures arm can launch
new interest rate products because
regulators have to first approve its
plans for a new clearing house. NYSE
Euronext had planned to introduce
the new products in the third quarter
as part of its expansion of the US
derivatives business.
NYSE Euronext and other estab-
lished exchanges have seen profit
margins for traditional share trading
fight for market share. And the
decline in the traditional bread-and-
butter business of cash equities trad-
ing continued in April to June.
Revenues fell 11 per cent from a year
ago to $321m due to price reductions
in Europe in 2009 and lower US vol-
umes and market share in cash trad-
ing. But on a quarterly basis, the
firm’s fortunes recovered. Its US cash
transactions business grew on the
back of a 26 per cent rise in daily vol-
umes and larger market share.
NYSE Euronext’s results include a
pre-tax gain from disposals of $54m.
Revenue got a boost from a 10 per
cent increase in transaction and clear-
ing revenues, mostly related to deriva-
tives trading. A further $26m, or 53
per cent, increase in technology serv-
ices revenue also boosted quarterly
activity.
ANALYSIS l NYSE Euronext
$ NICK GRAHAM | JP MORGAN
33
29.98
3 Aug
31
29
27
12 May 2 Jun 22 Jun 13 Jul
“Ultimately the future depends on how the gov- Lane Clark & Peacock (LCP).
In an attempt to plug gaps in com-
ernment splits up the funds. Raising the retire- pany pension schemes, FTSE 100
ment age could be a good idea as there are plenty firms put £17.5bn into defined bene-
of people still able to work.” fit schemes in 2009, a rise of 50 per
cent on the previous year.
The figures come from the 17th
annual Accounting for Pensions
report from LCP, and show Royal
Dutch Shell made the largest contri-
BARNABY DIXSON | HISCOX bution of £3.3bn – a rise of £2.5bn.
Lloyds Banking Group, Royal Bank
of Scotland and Unilever also paid
“There needs to be a big change in regulation. more than £1bn into their defined
benefit schemes, and eight compa-
There’s a big shortfall and it’s people on low and nies paid more to their pension
middle incomes that are being affected the schemes than they did to their share-
holders in dividends. The contribu-
most. I think we should go back to linking tions drove the aggregate FTSE 100
pensions to earnings.” pensions deficit – the difference
between funds held and the amount
of money needed to pay out to
retirees – down from £96bn, a record
high, to nearly half of that at £51bn.
The government’s switch from
using RPI to CPI for how pensions are
calculated could have helped reduce
“With the way things are, by the time I retire that figure further, as historically,
there may not be a pension to draw from. the CPI has risen by around 0.5 per
Pensions don’t seem to be a major concern for cent less than the RPI, which means
pensions linked to final salary will
the government and they should be. If rise more slowly. LCP estimates the
they aren’t sorted now it could be too overall deficit for FTSE 100 firms may
now be £30bn lower than when it
2 Aug
late.” produced the report.

Weir Group pumps out record result

thanks to strong commodity market
ENGINEERING guide towards an adjusted pre-tax the interim dividend to 6.0p, up by
▲

BY HARRY BANKS
PUMP maker Weir Group yesterday
posted a 58 per cent rise in first
half pre-tax profit and said a posi-
tive trend in equipment orders
underpinned its confidence that
the second half would be signifi-
cantly ahead of last year.
Weir, which makes valves and
pumps for the oil, mining and
power industries, reported first half
pre-tax profit of £144m compared
with £91.4m in the same period of
2009. In June, Weir said a pick-up in
original equipment orders over the
previous two months helped it to
profit for the first half of £140m.
The company, whose customers
include EDF, Rio Tinto and Royal
Dutch Shell, said order input stood
at £863m, 24 per cent higher than
the first six months of last year
with original equipment input up
28 per cent.
Weir also said it was increasing
Weir Group’s chief
executive Keith
Cochrane unveiled a
record set of results
for the firm
25 per cent compared to what it
paid out in the same time period
last year. The average forecast for
full-year pre-tax profit is £259.7m.
Chief executive Keith Cochrane
said: “Our growth plan is well on
track across all our divisions and
the strong increase in orders
demonstrates our robust business
model and ability to respond quick-
ly to the changing economic envi-
ronment.”
Shares in Weir , which have risen
by 74 per cent since the beginning
of the year closed flat at 1,226p yes-
terday, valuing the company at
£2.47bn.

NEWS | IN BRIEF
Metal prices buoy Fresnillo
Mexican precious metals miner
Fresnillo, the world’s largest primary
silver producer, said yesterday its first
half profit had jumped on higher gold
and silver production and stronger
metal prices. The FTSE 100-listed
group said earnings before interest,
tax, depreciation and amortisation
surged 93 per cent to $392m
(£245.8m), while revenue grew 60 per
cent. Shares in Fresnillo, which rose to
a record 1,139p in mid July, have
gained 35 per cent this year.
Mouchel hit by austerity cuts
Outsourcer Mouchel yesterday blamed
public spending cuts as it warned full-
year results will be at the lower end of
its expectations. Mouchel secured
£650m of new contracts over the past
year, but said a lack of clarity over the
government’s austerity measures is
weighing on the outlook for this year.
But analysts said Mouchel’s order
pipeline – which it valued at £2.2bn,
unchanged from 2009 – showed con-
tract cancellations had not materi-
alised to the extent initially feared.
Rio Tinto ups Aussie investment
Mining giant Rio Tinto has announced
plans to invest a further $790m
(£495.6m) to expand the annual
capacity of iron ore operations in the
Pilbara, Western Australia, to 330m
tonnes a year. The expansion centres
on increasing Rio Tinto’s port at Cape
Lambert from its current capacity of
80m tonnes to 180m tonnes by 2016.
The world’s second-biggest iron ore
miner said the proposed spending
brings total investment funds
approved in recent weeks to $1bn.
CITYA.M. 4 AUGUST 2010
MasterCard is
lifted by rise
in card spend
BANKING flat at $244bn.
▲
BY HARRY BANKS MasterCard also said more con-
sumers have resumed travelling – and
MASTERCARD, the world’s second- spending money – abroad, as the eco-
largest credit and debit card process- nomic conditions slowly start to
ing network, said its second quarter improve. Its cross-border volumes
profit rose 31 per cent yesterday, beat- increased 15.2 per cent from a year
ing expectations as the company earlier.
reined in expenses and consumers Revenues rose 6.7 per cent to
slowly resumed spending and travel- $1.4bn, slightly below analysts’ aver-
ling abroad. age expectations, while MasterCard
The New York-based company cut expenses by 10.4 per cent, to
reported net income of $458m $648m, from a year earlier. The com-
(£287.4m) or $3.49 per share yester- pany said it paid less in salaries and
day, compared with $349m or $2.67 severance this quarter, after laying off
per share in the same period a year employees during 2009.
earlier. Analysts on average had
expected MasterCard to post a profit ANALYSIS l Mastercard
of $3.33 per share, according to 260 $
Thomson Reuters.
250
200.91
The company attributed its results 3 Aug
in part to an increase in spending on 240
its cards, especially outside of the 230
United States.
220
The gross dollar volume of the
transactions MasterCard processed 210
rose about 8.5 per cent globally from 200
a year earlier, to $656bn, though
190
growth in US gross dollar volume was 12 May 2 Jun 22 Jun 13 Jul
CITY MOVES | WHO’S SWITCHING JOBS
PricewaterhouseCoopers
The financial services firm has made a number
of changes to its UK insurance group. Tim
Edwards has joined as director, with immediate
effect, after previously working for the
Financial Services Authority. He will be respon-
sible for assisting clients with the requirements
of Solvency II.
In addition, Paul Clarke has replaced Mark
Batten as chairman of PwC’s European steering
group on Solvency II.
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Whole Native Lobster & Chips
With A Glass Of J&B NV Champagne
Celebrating Justerini & Brooks 250th Anniversary
Boisdale of Belgravia - Boisdale of Bishopsgate - The Lamb at Hindon
PFIZER GAINS AFTER GUZZLING RIVAL
Overall revenue up 56%
to $34.1bn
US revenue up 55%
to $14.7bn
International revenue up
57% to $19.4bn
Wyeth acquisition added
$10.7bn in revenue
Pfizer results pop after $68bn Wyeth
buyout and forex benefits boost profits
▲
PHARMACEUTICAL
US DRUGS giant Pfizer has posted a
bumper set of financial results, bol-
stered by its mammoth 2009 acquisi-
tion of rival Wyeth.
The $68bn (£42.6bn) transforma-
tional deal last October helped
Pfizer’s revenues grow 58 per cent
during the first six months of the
year. The company raked in $34.1bn
(£21.4bn) over the period, compared
to just $21.9bn in the first half last
year, adding that foreign exchange
2 Aug benefits had also had a very
Edited by Marion Dakers
Olivetree Securities
The equities intermediary broker has
hired Martin Lupton to its distribution
group. He will take a lead role in rela-
tionship management for key clients, as
well as developing the firm’s training
programme.
Lupton previously worked at Bear
Stearns, where he developed the com-
pany’s UK equity sales presence, and at
Kleinwort Benson as global head of
equity trading. He began his career in
1970 at Wedd Durlacher Mordaunt.
£24.50
15 Eccleston Street,
London, SW1W 9LX
020 7730 6922
www.boisdale.co.uk
News 13
Pfizer chief execu-
tive officer and
chairman Jeff
Kindler said he
was “reaffirming
every element of
our targets for
2012 despite the
headwinds of glob-
al economic chal-
lenges, US
health-care reform,
European pricing
challenges and for-
eign-exchange fluc-
tuations.”
favourable impact on earnings. its previous forecast of $2.10 to $2.20
The Brooklyn-based pharmaceuti- per share, excluding special items.
cal group also reiterated its long-term JP Morgan analyst Chris Schott
profit view, allaying investor concern called Pfizer’s numbers the
over looming generic drug competi- “strongest we have seen” among US
tion when its top-selling Lipitor cho- pharmaceutical companies for the
lesterol product loses its patent second quarter.
protection from 2012. Pfizer is the last of the large US
Lipitor sales are expected to fall as drugmakers to report quarterly earn-
much as 75 per cent late next year ings over the past two weeks, and
when cheaper generics flood US phar- with the exception of Johnson &
macies, a main reason Pfizer bought Johnson, which cut its 2010 profit
Wyeth and its array of medicines. view due to product recalls, industry
The company said it now expected peers beat forecasts despite the costs
2010 profit to be at the upper end of of US healthcare reform.
in association with
Russell Investments Hoare Capital Markets
The financial services firm has expand- The broker has hired Gianluca Lesina
ed its London consulting and advisory and Isabel Lopes-White to join its fixed
team by hiring Greg Clerkson and Joan income team.
Lee. Lesina joins from Macquarie Bank,
Clerkson joins from RBC Investment where he was responsible for the devel-
Management, where he was a senior opment of absolute return strategies to
manager. He will focus on advising on European institutional investors. Lopes-
alternative investment strategies. Lee White has worked at Unicredito, BB
joins from Deloitte, where she was an Securities and most recently Standard
investment consulting analyst. They will Bank. Her expertise covers emerging
both start immediately and be based in markets, sub-investment grade and
the firm’s London office. investment grade bonds.
+44 (0)20 7557 7245
morganmckinley.com
Subject to availability until 16th August
Swedeland Court, Hindon near Salisbury,
202 Bishopsgate Wiltshire, SP3 6DP
London, EC2M 4NR 01747 820 573
020 7283 1763
 14 News
BMW profits
rise on higher
China demand
AUTOMOTIVE to more than 1.4m vehicles while the
▲
BY HARRY BANKS automotive EBIT margin would sur-
pass five per cent. Pre-tax profit is
BMW, the world’s top maker of luxu- growing even faster than initially
ry cars, reported forecast-beating prof- expected, it said, adding its 2012
it for the second quarter yesterday, return targets remained in place.
driven by sales of its popular 5 Series All three German premium car-
model and rising demand from makers including Volkswagen’s Audi
brand-conscious China. reported second-quarter operating
The German group saw earnings
before interest and tax (EBIT) as a per-
centage of revenue grow to 9.6 per
cent in the three months to June
margins north of nine per cent just
one year after the biggest industry cri-
sis since the second World War.
Both Mercedes and BMW are enjoy-
from a loss last year thanks to rising
volumes and better pricing.
The firm made €834m (£692.8m)
ing currency tailwinds along with a
rebound in luxury car markets driven
by China, while volume carmakers
between April and June, up from like Fiat are expected to struggle with
€121m a year earlier. Sales climbed by shrinking demand as scrapping
18.3 per cent to €15.35bn. schemes expire.
BMW reaffirmed its 2010 sales and Meanwhile, data published yester-
earnings forecast that it raised in day showed that overall, US auto sales
mid-July, predicting retail volumes rose 5.1 per cent in July from a year
would increase by around 10 per cent ago to 1,049,101 cars and light trucks,
according to Autodata Corp.
ANALYSIS l BMW 43.16 Autodata estimated the annualised
43 €
3 Aug selling pace in the month was 11.98m
42 vehicles, compared with 11.24m in
41 July 2009, although the research firm
40 warned that figure may be revised.
39 If confirmed, the July sales pace
38 would be the second-highest rate
37 since September 2008, surpassed only
36 by August 2009, when the govern-
35
ment’s “cash for clunkers” incentive
programme caused auto sales to
10 May 31 May 21 Jun 12 Jul 2 Aug spike.
The PLA employs 45,000 people and contributes £3.7bn to the UK each year Picture: REX
Port of London Authority sees
goods trading increase in 2010
TRANSPORT
▲
BY EMMA SADOWSKI
THE volume of goods passing
through the Port of London recovered
in the first six months of this year
after a downturn in 2009, it was
announced yesterday.
The port handled 23.3m tonnes of
goods in January to June this year – a
1.3 per cent rise on the figure for the
first half of last year, the Port of
London Authority (PLA) said.
In the whole of 2009, London han-
dled 45m tonnes, 14 per cent down
on 2009 and the lowest annual
amount since 1992.
“This result is consistent with the
modest recovery in economic activity
BEST OF THE BROKERS
ANALYSIS l Renault
€ 35.67
3 Aug
34
32
30
28
12 May 1 Jun 21 Jun 9 Jul 29 Jul
RENAULT
Bank of America Merrill Lynch (BoAML)
has confirmed its “buy” rating on French
car manufacturer Renualt and raised its
price target by €4 to €50. BoAML cites
a solid performance in core business,
and results ahead of consensus by affili-
ates Nissan and Volvo, and forecasts full-
year net industrial debt will drop to
€5.1bn.
NEWS | IN BRIEF
Capital & Counties progresses
Property developer Capital & Counties
yesterday said it is making progress on
getting planning consent to redevelop
London concert and exhibition venues
Earls Court and Olympia. The company
hopes to begin work on a residential
project after Earls Court is used to
host events related to the 2012
Olympic Games.
that we have seen since the middle of
last year,” said PLA chief executive
Richard Everitt.
Coal trading fell by a staggering
67.8 per cent to 0.2m tonnes during
the last six months, while aggregate
trades, including sand and gravel,
dropped 14.8 per cent to 3.1m tonnes.
Everitt said the fall in aggregate
trades was consistent with the contin-
ual low levels of construction activity,
while containers and other unitised
cargoes, including lorry trailers,
showed strong growth pointing to
London as a centre for trade.
PLA, which contributes £3.7bn to
the economy every year, said public
sector cuts made it impossible to pre-
dict full-year trade figures.
ANALYSIS l BNP Paribas
€ 55.79
3 Aug
54
50
46
42
12 May 1 Jun 21 Jun 9 Jul 29 Jul
BNP PARIBAS
Deutsche Bank reiterates its “buy” rat-
ing on BNP Paribas after second quarter
net income was 15 per cent above its
estimates. Deutsche Bank said that all
indicators are in the green and that BNP
passed its stress test easily, raising tier-
one ratio to 8.4 per cent, with the only
residual uncertainty the prospect of a
French bank tax.
To appear in Best of the Brokers email your research to notes@cityam.com
Devro sees 86pc profit boost
Scottish sausage skin maker Devro yes-
terday announced an 86 per cent rise
in first-half profit, from £9.2m in 2009
to £17.1m this time around. The compa-
ny, headed by chief executive Peter
Page, also announced an increase in its
interim dividend to shareholders of 40
per cent to 2.0p per share, up from
1.425p per share last year.
CITYA.M. 4 AUGUST 2010
Car industry
boosts GKN
profitability
▲
TRANSPORT
BY EMMA SADOWSKI
CAR parts and engineering firm GKN
yesterday surged back into the black,
bolstered by an increasing demand
from the car industry.
Pre-tax profits during the first half
of the year rose to £175m compared
to the £6m loss the group posted in
the same period last year.
GKN said its business was boosted
by upward levels of demand from the
car industry, including a 47 per cent
hike in sales within its driveline divi-
sion, which makes parts for brands
such as Volkswagen and Audi.
Powder metallurgy sales rose by 65
per cent, which GKN attributes to an
increasing trend towards fuel effi-
ciency.
Total sales for GKN during the first
half climbed by 25 per cent to £2.7bn,
despite a five per cent fall in aero-
space sales.
“[Our] recovery has moved into
another gear and we are continuing
to build on our global market-leading
businesses,” said chief executive Sir
Kevin Smith.
Meanwhile, GKN’s civil aircraft
production is likely to stabilise
through the remainder of the year,
according to the group, with manu-
facturing of the Airbus A400M,
Boeing Dreamliner and 747-8, and
the joint strike fighter already under-
way.
Shares in GKN closed 5.9 per cent
higher yesterday at 144.6p, boosted
by the group’s decision to restore div-
idend payments.
ANALYSIS l HSBC Holdings
p
680 671.40
3 Aug
660
640
620
600
10 May 28 May 18 Jun 8 Jul 28 Jul
HSBC HOLDINGS
Despite a pre-tax profit of $11.1bn, 15
per cent ahead of consensus, Citigroup
reiterates its “hold” rating on HSBC
Holdings, saying that lower loan losses
caused it to increase 2010 estimates but
that its 2011 and 2012 revisions are
mixed, with lower profits forecast at
HSBC due to higher costs and a smaller
boost from lower loan losses.
SDL bullish for rest of 2010
Translation software firm SDL yester-
day posted a 13 per cent increase in
first-half revenue and a nine per cent
rise in profit. SDL said the growth
came thanks to a recovery in demand
from its major multinational cus-
tomers. In a statement to the London
Stock Exchange, the company said it is
confident about the rest of the year.
 Markets&Investment
15

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 . . . . . . . . . . . . . . . . . . . . . . . .286.90 +1.00 314.80 246.90 COLT Group . . . . . . . . . . . . . . . .127.90 +2.50 144.20 109.60 Investec . . . . . . . . . . . . . . . . . . .475.20* –28.30 565.00 378.20 Sage . . . . . . . . . . . . . . . . . . . . . .240.40 –2.10 260.50 194.30
3i Infrastructure . . . . . . . . . . . . . 111.80 –0.10 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .547.00* –1.50 574.50 308.10 ITV . . . . . . . . . . . . . . . . . . . . . . . .51.60 –1.95 71.75 40.34 Sainsbury(J) . . . . . . . . . . . . . . . .352.30 +3.50 373.00 307.60
A.B. Foods . . . . . . . . . . . . . . . .1041.00 +1.00 1096.00 777.00 Cookson . . . . . . . . . . . . . . . . . . .478.60 +11.60 616.00 314.40 Jardine Lloyd Thompson. . . . . . .593.00 –4.50 604.50 420.70 Schroders . . . . . . . . . . . . . . . . .1331.00 –3.00 1450.00 924.50
Aberdeen Asset Man . . . . . . . . . .140.80 –1.20 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . .1303.00 –41.00 1355.00 577.50 Johnson Matthey . . . . . . . . . . .1753.00* +13.00 1814.00 1302.00 Schroders N/V. . . . . . . . . . . . . . 1100.00 –5.00 1185.00 804.50
Admiral. . . . . . . . . . . . . . . . . . .1518.00 +5.00 1519.00 947.50 CSR . . . . . . . . . . . . . . . . . . . . . .349.00 +0.30 524.00 339.50 Kazakhmys . . . . . . . . . . . . . . . .1262.00 –16.00 1634.00 803.50 Scot. & Sthrn Energy. . . . . . . . . 1125.00* –4.00 1206.00 357.50
Aegis . . . . . . . . . . . . . . . . . . . . . 117.20 –2.00 137.30 82.25 Daily Mail ‘A’ . . . . . . . . . . . . . . . .493.80 –5.30 539.00 299.50 Kesa Electricals . . . . . . . . . . . . .133.80 +3.30 162.00 98.45
Afren . . . . . . . . . . . . . . . . . . . . . .95.20 –0.70 111.00 52.50 Dana Petroleum . . . . . . . . . . . .1708.00 –11.00 1729.00 968.50 .LQJÀVKHU . . . . . . . . . . . . . . . . . .223.80 +2.00 255.00 196.50 Scottish Mortgage. . . . . . . . . . . .599.50 –7.50 623.50 439.70
African Barr Gold . . . . . . . . . . . .543.00 +5.00 685.00 520.50 Davis Service . . . . . . . . . . . . . . .392.00 +3.70 442.30 333.20 Ladbrokes . . . . . . . . . . . . . . . . .140.10 –0.60 174.29 114.60 SEGRO . . . . . . . . . . . . . . . . . . . .276.70 –7.90 403.10 244.00
Aggreko . . . . . . . . . . . . . . . . . .1562.00 –6.00 1639.00 540.00 De La Rue . . . . . . . . . . . . . . . . . .761.50* +23.50 1021.00 725.50 Lancashire Hldgs . . . . . . . . . . . .535.00 –4.50 545.00 416.70 Serco . . . . . . . . . . . . . . . . . . . . .558.50 –7.50 656.50 394.30
Alliance Trust . . . . . . . . . . . . . . .320.90* –1.30 352.70 281.00 Debenhams . . . . . . . . . . . . . . . . .65.65 +0.65 91.95 51.95 Land Securities . . . . . . . . . . . . . .628.50 +1.50 743.50 517.00 Severn Trent . . . . . . . . . . . . . . .1351.00 +7.00 1351.00 921.00
AMEC . . . . . . . . . . . . . . . . . . . . .896.50 –4.50 909.50 693.50 Derwent London . . . . . . . . . . . .1399.00 +26.00 1490.00 946.50 Legal & General . . . . . . . . . . . . . .90.80 –0.45 94.70 57.00 Shaftesbury . . . . . . . . . . . . . . . .408.80 +3.20 426.50 324.00
Amlin . . . . . . . . . . . . . . . . . . . . .426.40 –2.70 433.40 330.00 Dexion Absolute . . . . . . . . . . . . .138.70 –0.80 148.00 121.10 Lloyds Banking Gp . . . . . . . . . . . .71.92 –0.52 75.58 45.30 Shire. . . . . . . . . . . . . . . . . . . . .1473.00 +19.00 1526.00 850.00
Anglo American . . . . . . . . . . . .2604.00 –23.00 3015.50 1777.50 Diageo . . . . . . . . . . . . . . . . . . . 1118.00 –9.00 1176.00 912.50 Logica . . . . . . . . . . . . . . . . . . . . 111.60 +1.80 149.10 100.80 Smith & Nephew . . . . . . . . . . . . .561.50 –5.00 700.50 458.60
Antofagasta . . . . . . . . . . . . . . .1037.00 — 1100.00 680.00 Dimension Data . . . . . . . . . . . . .121.50 –0.40 125.50 55.00 London Stk Exchange . . . . . . . . .673.00* +9.50 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .145.00 +1.00 150.20 75.90
Aquarius Platinum . . . . . . . . . . .272.60 –13.70 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .413.30* –6.00 431.30 228.40 Lonmin . . . . . . . . . . . . . . . . . . .1645.00 +13.00 2198.00 1330.00 Smiths . . . . . . . . . . . . . . . . . . . 1138.00 –1.00 1186.00 720.00
ARM Holdings . . . . . . . . . . . . . . .312.10 –19.90 370.00 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .386.80 +0.10 496.50 321.50 Man . . . . . . . . . . . . . . . . . . . . . .227.60 +4.30 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .439.00 –0.20 444.60 380.60
Arriva . . . . . . . . . . . . . . . . . . . . .770.50 –2.00 782.50 428.20 DSG Intl . . . . . . . . . . . . . . . . . . . .27.56 +0.12 39.75 23.32 Marks & Spencer. . . . . . . . . . . . .360.60 +1.40 412.70 321.90 Spectris . . . . . . . . . . . . . . . . . . .912.50 –14.00 949.00 556.00
Ashmore . . . . . . . . . . . . . . . . . . .283.90 –3.20 311.20 208.20 Dunelm . . . . . . . . . . . . . . . . . . . .403.80 –1.30 438.40 250.70 Meggitt . . . . . . . . . . . . . . . . . . . .294.60 –13.70 331.00 179.00
Astrazeneca . . . . . . . . . . . . . . .3282.00 +23.00 3376.00 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .401.00 –6.20 499.90 293.50 Melrose . . . . . . . . . . . . . . . . . . .235.30 –3.80 251.50 114.50 Spirax-Sarco Eng . . . . . . . . . . .1547.00 –21.00 1617.00 909.50
Atkins(Ws) . . . . . . . . . . . . . . . . .760.00 +15.00 764.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .399.90 –1.10 412.40 315.60 Mercantile IT . . . . . . . . . . . . . . . .968.00 –1.00 1002.00 820.00 Spirent Comms . . . . . . . . . . . . . .129.40 +1.40 135.90 68.00
Autonomy Corp . . . . . . . . . . . .1667.00 +7.00 2012.00 1177.00 Electrocomponents . . . . . . . . . . .222.30 –5.70 245.00 142.90 Michael Page Intl. . . . . . . . . . . . .401.60 –3.20 461.50 289.10 Sports Direct Intl . . . . . . . . . . . . . 111.80 +1.10 134.00 81.80
Aveva . . . . . . . . . . . . . . . . . . . .1343.00 –20.00 1371.00 803.00 EnQuest . . . . . . . . . . . . . . . . . . . 116.00 –1.00 121.40 87.35 Micro Focus . . . . . . . . . . . . . . . .417.30 –2.50 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1177.00 –1.00 1190.00 522.50
Aviva . . . . . . . . . . . . . . . . . . . . .376.50 +3.60 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .427.50 –7.60 475.90 358.50 Millen & Copthorne . . . . . . . . . . .487.60 –4.40 504.00 267.10 St James’s Place . . . . . . . . . . . . .277.50 –0.20 296.90 180.00
Babcock International . . . . . . . . .559.00 –7.00 660.50 459.80 Eurasian Nat Res . . . . . . . . . . . .939.50 –0.50 1276.00 731.00 Misys . . . . . . . . . . . . . . . . . . . . .254.50 –2.80 281.70 173.90 Stagecoach. . . . . . . . . . . . . . . . .177.00 +3.50 204.90 126.20
BAE Systems . . . . . . . . . . . . . . .320.80 +1.90 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .620.00 +1.00 630.00 234.70 Mitchells & Butlers . . . . . . . . . . .314.40 –3.10 343.90 228.30 Standard Chartered . . . . . . . . . .1902.50 +41.00 1927.00 1310.00
Balfour Beatty . . . . . . . . . . . . . . .259.30 +2.70 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .634.00 –3.00 664.50 488.60 MITIE . . . . . . . . . . . . . . . . . . . . .209.80* –2.60 281.70 195.20 Standard Life . . . . . . . . . . . . . . .212.30 +3.10 237.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .342.75 –1.20 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .92.00 –0.50 96.80 76.30 Mondi . . . . . . . . . . . . . . . . . . . . .460.80 –0.70 488.00 258.30 SuperGrp . . . . . . . . . . . . . . . . . .944.50 –5.50 1030.00 499.00
Barratt Development . . . . . . . . . .103.50 +2.30 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .295.90 +0.10 396.20 138.00 Monks Inv Tst . . . . . . . . . . . . . . .295.00* +0.60 321.20 240.00 TalkTalk . . . . . . . . . . . . . . . . . . .122.00 +0.80 147.10 106.60
BBA Aviation . . . . . . . . . . . . . . .205.90 +1.80 220.00 135.70 FirstGroup . . . . . . . . . . . . . . . . .379.50* +4.10 448.80 331.20 Morrison Wm . . . . . . . . . . . . . . .272.80 +1.50 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .419.30 +2.80 501.50 341.40
Beazley. . . . . . . . . . . . . . . . . . . .120.00 –1.00 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .274.20 –2.60 297.20 229.50 Murray Intl Tst . . . . . . . . . . . . . . .866.00* –9.00 893.50 632.00 Tate & Lyle . . . . . . . . . . . . . . . . .451.30 +1.30 509.00 356.20
Bellway. . . . . . . . . . . . . . . . . . . .601.00 –4.50 927.50 554.00 Fresnillo . . . . . . . . . . . . . . . . . .1070.00 +12.00 1139.00 539.50 National Express. . . . . . . . . . . . .240.10 +3.40 258.60 155.86
Berkeley . . . . . . . . . . . . . . . . . . .822.00 +0.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .264.10 +0.10 285.70 208.50 National Grid . . . . . . . . . . . . . . .525.00* +1.00 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .31.10 +2.58 54.90 24.29
BG . . . . . . . . . . . . . . . . . . . . . .1056.00 +6.00 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .473.40 –6.60 484.00 370.00 Next . . . . . . . . . . . . . . . . . . . . .2199.00 –3.00 2360.00 1601.00 Telecity . . . . . . . . . . . . . . . . . . . .420.50 –14.50 458.90 300.00
BHP Billiton . . . . . . . . . . . . . . .2019.50 –15.00 2346.00 1481.00 GKN . . . . . . . . . . . . . . . . . . . . . .144.10 +7.50 155.00 100.20 Northumbrian Water . . . . . . . . . .340.80 +3.00 340.80 219.90 Templeton Emrg Mkts . . . . . . . . .553.00 –9.00 598.00 390.00
BlackRock Mining . . . . . . . . . . . .576.00 –1.50 654.50 413.00 GlaxoSmithKline . . . . . . . . . . . . 1138.50* +14.50 1347.00 1088.00 Old Mutual . . . . . . . . . . . . . . . . .122.60 –2.50 127.20 85.80 Tesco . . . . . . . . . . . . . . . . . . . . .401.50 +2.90 454.90 361.20
Booker . . . . . . . . . . . . . . . . . . . . .43.13 –0.37 49.50 33.00 Great Portland Estates . . . . . . . .316.30 +5.80 332.10 227.60 Pace . . . . . . . . . . . . . . . . . . . . . .212.50 –3.00 243.80 145.00 Thomas Cook . . . . . . . . . . . . . . .191.00 +0.30 277.20 172.30
BP . . . . . . . . . . . . . . . . . . . . . . .415.65 +2.55 658.20 296.00 Greene King . . . . . . . . . . . . . . . .449.00 –2.00 504.00 372.50 Partygaming . . . . . . . . . . . . . . . .308.90 –0.60 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .324.00 –1.00 325.70 155.00
Brit Insurance . . . . . . . . . . . . . . .999.00 –1.00 1017.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .490.30* +1.00 562.50 324.00 Pearson . . . . . . . . . . . . . . . . . .1003.00 –6.00 1069.00 681.00 Travis Perkins . . . . . . . . . . . . . . .873.50 — 915.00 647.50
British Airways . . . . . . . . . . . . . .236.00 +5.10 255.80 142.80 Halma . . . . . . . . . . . . . . . . . . . . .283.80* +2.20 298.70 186.60 Pennon . . . . . . . . . . . . . . . . . . . .600.00 — 603.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .218.50 +3.00 313.90 202.30
British Amer. Tob . . . . . . . . . . .2234.00 +46.00 2335.50 1807.00 Hammerson . . . . . . . . . . . . . . . .389.40 –9.30 460.30 332.20 Persimmon . . . . . . . . . . . . . . . . .379.70 +4.50 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .378.40 +18.90 436.20 261.20
British Empire Tst . . . . . . . . . . . .438.00 –1.60 467.90 338.50 Hargreaves Lansdown . . . . . . . .370.60 –0.70 387.00 214.00 Petrofac . . . . . . . . . . . . . . . . . .1299.00 –29.00 1372.00 776.50 Tullow Oil . . . . . . . . . . . . . . . . .1284.00 –16.00 1375.00 979.50
British Land . . . . . . . . . . . . . . . .469.50* –2.00 532.00 416.00 Hays . . . . . . . . . . . . . . . . . . . . . . .93.30 –0.35 119.00 88.05 Petropavlovsk . . . . . . . . . . . . . .1049.00 +6.00 1370.00 601.00 UK Commercial Prop. . . . . . . . . . .75.80* –0.70 84.90 64.25
Britvic. . . . . . . . . . . . . . . . . . . . .474.30 –11.00 518.00 324.80 Henderson . . . . . . . . . . . . . . . . .133.90 –0.30 157.80 107.00 Premier Farnell . . . . . . . . . . . . . .242.60 –2.80 252.60 139.50 Ultra Electronics . . . . . . . . . . . .1650.00 +2.00 1681.00 1150.00
Brown(N.) . . . . . . . . . . . . . . . . . .237.70 +4.70 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .449.90 +24.10 587.00 368.70 Premier Oil . . . . . . . . . . . . . . . .1548.00 +26.00 1610.00 984.00
BSkyB . . . . . . . . . . . . . . . . . . . . 711.00 –3.00 732.00 521.00 Hikma Pharma . . . . . . . . . . . . . .721.50 +2.00 746.00 433.90 Provident Financial . . . . . . . . . . .833.50 +6.50 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1802.00 –13.00 2024.00 1524.00
BT . . . . . . . . . . . . . . . . . . . . . . .143.60 +1.10 151.00 108.40 Hiscox . . . . . . . . . . . . . . . . . . . .358.20 +4.40 369.30 299.20 Prudential . . . . . . . . . . . . . . . . . .572.00 +5.50 665.00 432.80 United Utilities . . . . . . . . . . . . . .593.00* +2.50 594.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .697.00 +4.00 784.50 514.00 Hochschild Mining . . . . . . . . . . .306.50 +1.50 370.60 220.00 PZ Cussons . . . . . . . . . . . . . . . .340.50 –9.30 373.20 210.10 Utd Business Media . . . . . . . . . .561.00 –10.00 579.50 408.30
Burberry . . . . . . . . . . . . . . . . . . .864.00* +4.50 886.50 440.20 Home Retail . . . . . . . . . . . . . . . .244.50 +0.70 336.50 208.50 Qinetiq . . . . . . . . . . . . . . . . . . . .125.50 +0.10 179.10 113.90 Vedanta Resources . . . . . . . . . .2549.00* –19.00 2967.00 1616.00
Cable & Wire Comms . . . . . . . . . .60.55* +0.55 150.00 53.00 Homeserve . . . . . . . . . . . . . . . . .449.00* –1.80 451.80 435.40 Randgold Resources. . . . . . . . .5555.00 –80.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . .1228.00 –55.00 1320.00 613.50
Cable & Wire Wwide . . . . . . . . . . .68.00* –0.05 94.80 64.85 HSBC Hldgs . . . . . . . . . . . . . . . .671.40 –8.60 766.80 593.60 Reckitt Benckiser . . . . . . . . . . .3220.00 +34.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .148.10* –2.80 153.80 122.25
Cairn Energy. . . . . . . . . . . . . . . .477.10 –4.90 485.30 306.80 Hunting . . . . . . . . . . . . . . . . . . .544.00 –6.50 659.50 420.90 Reed Elsevier . . . . . . . . . . . . . . .561.00 +5.50 566.00 414.00 Weir . . . . . . . . . . . . . . . . . . . . .1226.00 — 1266.00 549.00
Caledonia Invs . . . . . . . . . . . . .1612.00 –13.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .412.00* –2.10 478.30 291.70 Regus . . . . . . . . . . . . . . . . . . . . . .74.80 –0.90 125.50 68.65 WH Smith . . . . . . . . . . . . . . . . . .427.70 –1.10 551.00 396.00
Capita . . . . . . . . . . . . . . . . . . . . .719.00 –13.50 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .486.20 –0.80 492.20 291.00 Renishaw . . . . . . . . . . . . . . . . . .870.50 +19.50 874.00 399.00 Whitbread . . . . . . . . . . . . . . . . .1439.00 –11.00 1645.00 865.50
Capital & Counties . . . . . . . . . . . 113.40 +1.40 125.40 99.60 Imagination Tech Gp . . . . . . . . . .332.00 –4.90 345.60 149.75 Rentokil Initial . . . . . . . . . . . . . . .106.20 — 140.20 94.10 William Hill . . . . . . . . . . . . . . . . .170.10 –2.30 217.80 160.50
Capital Shopping Centres . . . . . .339.50 –7.90 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .728.50 –7.50 786.00 337.00 Rexam . . . . . . . . . . . . . . . . . . . .310.30 –0.70 348.80 222.50 Witan Inv Tst . . . . . . . . . . . . . . . .443.40 –6.30 487.00 363.00
Carillion . . . . . . . . . . . . . . . . . . .314.50 –1.70 361.90 260.00 Imperial Tobacco. . . . . . . . . . . .1821.00* +14.00 2159.00 1642.00 Rightmove . . . . . . . . . . . . . . . . .667.00 –9.50 729.00 399.50
Carnival . . . . . . . . . . . . . . . . . .2329.00 –11.00 2937.00 1681.00 Inchcape. . . . . . . . . . . . . . . . . . .308.40 –0.30 347.00 235.00 Rio Tinto . . . . . . . . . . . . . . . . . .3433.50 –16.50 4104.00 2205.00 Wolseley . . . . . . . . . . . . . . . . . .1462.00 — 1742.00 1155.00
Catlin . . . . . . . . . . . . . . . . . . . . .388.00 –5.10 394.60 303.20 Informa . . . . . . . . . . . . . . . . . . . .393.90 –5.30 439.40 238.50 RIT Capital Partners . . . . . . . . . 1166.00 –17.00 1215.00 913.50 Wood Group (John). . . . . . . . . . .382.00 +2.00 411.70 266.00
Centamin Egypt . . . . . . . . . . . . .152.60 +0.10 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .745.00 –10.50 831.00 491.00 Rolls Royce . . . . . . . . . . . . . . . .570.00 –16.50 631.50 406.60 WPP . . . . . . . . . . . . . . . . . . . . . .684.00 –11.00 744.00 456.50
Centrica . . . . . . . . . . . . . . . . . . .321.00 +11.10 321.50 215.50 Intercontl Hotels . . . . . . . . . . . . 1121.00 — 1244.00 671.50 Rotork . . . . . . . . . . . . . . . . . . .1512.00 –23.00 1537.00 875.00 Xstrata . . . . . . . . . . . . . . . . . . .1072.00 –3.00 1344.50 713.00
Charter Intl . . . . . . . . . . . . . . . . .705.00 –23.50 855.50 560.50 Intermediate Capital . . . . . . . . . .269.80* +1.30 332.00 198.50 Royal Bank Of Scot . . . . . . . . . . . .52.05 –0.05 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2933.00* –23.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1662.00 –12.00 1745.00 1033.00 Royal Dutch Shell A . . . . . . . . .1835.00 +14.50 2068.50 1521.50
Chloride Group . . . . . . . . . . . . . .373.00* –0.20 390.50 138.60 Intl Personal Fin . . . . . . . . . . . . .249.40 –2.90 283.00 128.25 Royal Dutch Shell B . . . . . . . . .1764.50 +14.00 1997.50 1505.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .686.00 +9.00 806.50 660.50 Intl Power . . . . . . . . . . . . . . . . . .370.00 +4.00 375.90 243.00 RSA Insurance . . . . . . . . . . . . . .129.40 –0.60 142.00 114.10
Cobham . . . . . . . . . . . . . . . . . . .237.00 –3.50 278.60 173.60 Invensys . . . . . . . . . . . . . . . . . . .273.70* –0.30 350.30 234.50 SABMiller . . . . . . . . . . . . . . . . .1970.00 –7.00 2090.00 1307.00 www.interactivedata.com

3G 13:05

Markets

SPREAD BET NOW

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

List One Long name... List Three

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

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FTSE closes flat as Monday’s zeal for Procter & Gamble drags
banks wanes and energy firms recover on Wall Street in flat day
seen again the FTSE fail to finish Barclays fell 0.4 per cent ahead of quarter earnings that missed expec-

THELONDON above the psychologically important

5,400 level,” said Jimmy Yates, head of
its results on Thursday.
Standard Chartered, however, THENEW YORK tations.
“After a nice little rally, it’s proba-

REPORT
equities at CMC Markets.
Light volumes accentuated share
price moves as investors took off on
their summer holidays, with the FTSE
bucked the sector trend, rising 2.2 per
cent ahead of first-half results today.
Energy firms were the main sup-
port, rallying along with US crude oil
REPORT bly a little bit of a pause,” said
Tommy Huie, president of Marshall
Funds in Milwaukee.
The Dow Jones industrial average

B U
RITAIN’S top shares ended 100 trading at just 70 per cent of its futures. BP added 0.6 percent as it S stocks slipped yesterday as dropped 38.00 points, or 0.36 per
steady yesterday as strength in 90-day average volume. tested equipment to permanently Dow component Procter & cent, to 10,636.38. The Standard &
oils offset falls in banks follow- Banking stocks, which rallied on plug its Gulf of Mexico oil well. Gamble’s lacklustre results, Poor’s 500 Index shed 5.40 points, or
ing weaker-than-expected US Monday after forecast-beating results Chipmaker Arm Holdings, which coupled with weaker-than-esti- 0.48 per cent, to 1,120.46. The Nasdaq
data that stoked concern about the from HSBC, were the biggest drag on had surged to more than eight-year mated data on consumer spending Composite Index lost 11.84 points, or
strength of the economic rebound. the blue-chip index. highs following strong results and and housing, prompted investors to 0.52 per cent, to 2,283.52.
The FTSE 100 closed down 0.63 HSBC, which gained 5.3 per cent on after signing a deal with Microsoft, exercise caution a day after the mar- An index of pending home sales
point at 5,396.48 following a 2.7 per Monday, lost 1.3 per cent after RBS fell 6 per cent. ket’s two per cent rally. slid to a record low in June while con-
cent gain on Monday to a three- cut its recommendation to “hold” Centrica was the top performer on P&G dropped 3.4 per cent to sumer spending and personal
month closing high. from “buy”, saying it expects pre- the FTSE 100, up 3.6 per cent as $59.94, ranking as the top drag on incomes were flat. But losses were
“Weak US data in the afternoon impairment profit growth and mar- Goldman Sachs lifted its earnings the Dow industrials after the con- curbed by Dow component Pfizer, up
has not helped sentiment as we have gins to struggle until US rates rise. forecast on the gas supplier. sumer goods maker reported fourth- 5.6 per cent to $16.34.
 16 Investment | Foreign Exchange CITYA.M. 4 AUGUST 2010

TREAT RALLY
IN THE POUND
WITH CARE
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT

T
O THE surprise of many market analysts,
including yours truly, sterling has been on a
tear lately. Not only has the pound rallied,
but it has significantly outperformed the
euro, gaining more than 200 pips on the continen-
tal currency over the past several weeks.
So why such sudden explosive strength in the
currency? Part of the reason for the pound’s
recent gains has to do with the rebound in global
capital markets in July. The better-than-expected
corporate earnings in Europe and US soothed
investors’ concerns about an imminent global
economic slowdown, reviving risk appetite with
cable benefiting from speculative flows.
However, cable has also been boosted by posi-
tive investor response to David Cameron’s eco-
nomic policies, which seek to curtail fiscal
spending, reduce the UK government deficit and A stable Australian dollar will help prime minister Julia Gillard in elections later this month Picture: REUTERS
strengthen the country’s credit rating. Cameron
has argued that fiscal austerity and economic

Aussie’s hot August run

growth are not incompatible. So far, his plan
appears to be working: UK economic data has
been remarkably resilient with the latest UK PMI
manufacturing data registering above 57 for the
fifth month in a row. Goldman Sachs has stated
that the UK is likely to outperform both the US
and European economies in 2011.
Yet I remain sceptical that UK economic
growth can maintain this pace going into the sec- The currency still has But FX analysts expect the currency pair
to initially pull back to the US$0.90 level
to be caused by domestic factors since the
economy is expected to remain relatively
ond half of the year. Cameron’s fiscal cuts have
yet to hit the economy, and when they do, the some upside left, says in the next few days before rising to
US$0.93 over the next month or so. Jones
strong. For example, Capital Economics’
Sukhi Ubhi argues: “Consumer spending
impact on aggregate demand could be much adds: “The Australian dollar looks strong will probably just stay on a weaker track,
more severe than the market believes. In the Magdalena Brzezniak right now and is one to watch in the next rather than slump.”
meantime, the so-called second derivative UK few weeks as we could see further gains.” The Aussie dollar is expected to contin-
economic indicators are beginning to show that However, historical data suggests that any ue to fluctuate but it should benefit from

deceleration is in trend. For example, the pace of
improvement in UK labour markets has declined
from a reduction of 40,000 in the claimant count
in February to only 20,000 in July, while the Rics
house price index has fallen to 9 per cent after
peaking at 21 per cent in May. In short, even if
the pound rallies in the near-term, it may face a
much more difficult path ahead and $1.6000
could signal a near-term top if economic reality
cannot keep up with investor expectations.
Boris Schlossberg and Kathy Lien are directors
of currency research at GFT. Read commentary
at www.GFTUK.com/commentary or e-mail
borisandkathy@gftuk.com.
I
T WAS no change yesterday for the
Reserve Bank of Australia, which
agreed to keep the cost of borrowing
on hold at 4.5 per cent for the third
consecutive month. This signalled contin-
ued stabilisation in the Australian econo-
my, which is good news for its first female
prime minister Julia Gillard. The decision
to hold rates did not take the markets by
surprise, which had widely expected the
outcome, but the Australian dollar
nonetheless slipped 0.2 per cent against
the US dollar and hit US$0.9071.
After sliding against the buck in April
and May this year, the Aussie dollar has
since started to recover on the back of
stronger risk appetite and positive global
economic growth figures. Therefore, IG
Index’s David Jones said that even after its
latest rally, the Australian dollar still has
ample upward momentum behind it over
the next few weeks.
upside is likely to be capped at US$0.94 – world economic growth, ongoing com-
so it would not be worth buying at this modity demand and relatively high inter-
level and currency traders should only buy est rates, making it a fairly safe long-term
the Aussie on dips. buy.
But what about the prospects for the But it will be the next few weeks that
Aussie in the longer-term? Australia’s should be the most interesting ones for
strong mining and commodity industries the Aussie dollar and for FX traders.
have kept the economy strong. However,
the country (and its currency) is largely ANALYSIS l Australian interest rates
6
dependent on its exports of raw materials % Forecasts
to emerging markets and especially to Market forecast
China due to its geographical proximity. A
slowdown there would have a negative
5 Capital
impact on Aussie dollar strength because Economics
emerging countries’ demand for raw Forecasts
4
materials such as base metals will fall.
If the US dollar strengthens and
Chinese growth slows, then Michael 3
Hewson at CMC Markets thinks that the
Australian dollar could potentially fall
over the next 12 to 18 months to the Source: Capital Economics
2
US$0.88 level. However, any fall is unlikely 2009 2010 2011

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CITYA.M. 4 AUGUST 2010 Investment | Foreign Exchange 17

THE
Go long on the TIPSTER
COMMODITY
CURRENCIES
rupee to target IN FAVOUR

C
OMMODITY currencies such as the
Australian dollar and the Canadian dol-

Indian growth lar have been back in vogue this week,

with decent bids backed by a 10 per
cent rally in the Reuters/Jefferies CRB com-
modity index since June. US dollar-Canadian
dollar has just broken a major trendline sup-
port at Ca$1.0287 and momentum is skewed
Further rate hikes will cause the Indian to the downside. On an intra-day basis strong
support is seen at Ca$1.0140 while resistance
is eyed at Ca$1.0330. Spread Co quotes US
currency to appreciate, writes Juliet Samuel dollar-Canadian dollar at C$1.0230-C$1.0234.
Renewed appetite for risk has boosted
both the equity markets and pushed the

W
ITH the Indian government
finally adopting a standardised
symbol for the rupee last month,
there are ever more signs that
the currency is going to become more
accessible to investors. Given its persistent
weakness against the dollar in recent times
– out of line with other Asian currencies, as
the chart on the right shows – traders
should look to the rupee both for near-term
rallies and long-run appreciation.
Despite its growing availability to forex
traders, the rupee is still far from a freely
traded currency. It is easy to buy for long
bets, but the Reserve Bank of India (RBI)
makes it difficult to sell the currency, so
short trades require the purchase of a non-
deliverable forward (NDF). Given that a NDF
on unusual currency pairs is likely to have a
wide spread, in practice, shorting the rupee
is only worth it for large institutions.
Fortunately, traders should currently be
going long on the rupee. Although the
rupee has rallied in the last week from a
high around R46.8 to around R46 per dol-
lar, most analysts think it will rise further
this year. One of the primary drivers of
rupee appreciation is likely to be a steady
rise in Indian interest rates – or repurchase
rates – throughout the rest of the year.
With non-food inflation at 10.6 per cent
and growth projected to be 8.5 per cent, the
RBI hiked repurchase rates by 0.25 up to
5.75 per cent and reverse repurchase rates
by 0.5 to 4.5 per cent. Because of the lack of
a developed credit market, the RBI uses
repurchase rates to influence money sup-
ply: the “repo rate” is the interest rate the
RBI gives on deposits, while the reverse
repurchase rate is the rate it pays on loans.
And the Bank has signalled that it is likely
to raise both rates further to combat infla-
tion, which has become even more chal-
lenging in light of this week’s 38 per cent
spike in the wheat price.
Yet, as analysts at Deutsche Bank high-
lighted last week, the rupee has not yet
strengthened on the back of this signal. In a
note entitled “Why is the rupee so weak?”,
DB speculated that increased gold imports
for the festival season, greater oil imports to
meet new clean diesel regulations, and a
combination of foreign direct investment
and defence imports could be behind
Indian demand for the dollar. Combined,
the cyclical nature of these factors have con-
vince analysts that we could be in for a ris-
ing rupee in the fourth quarter.
Standard Charter’s Callum Henderson
and Thomas Harr agree, citing India’s
strong economic outlook and the possibili-
ty of higher-than-expected capital inflows
as drivers of rupee appreciation. They tar-
get a rate of R45.5 to the dollar by the end
of the year.
The long-term outlook is similarly rosy
Aussie dollar back towards its 2010 high.
For Australian dollar-US dollar, parity
could still be on the cards and Capital
Spreads quotes US$0.9120-US$0.9123.
As the US economy begins to lose steam,
the dollar has been losing ground. The signs
of weaker US growth have become appar-
ent in recent weeks. Cable has rallied from
$1.4250 and is currently within touching
distance of the $1.6000 level.
The financial markets have certainly
rewarded the government’s aggressive aus-
terity measures. However, in the coming
with the rupee likely to offer growth D Udaya Kumar, month we will see the effects of the deficit
alongside Indian equities. So with more designer of the new cuts on the economy. Sterling could struggle
“exotic” currency products coming out all rupee sign, seen here to maintain its pace, since once fiscal cuts
the time and spread betting providers with his creation. hit the economy the impact could be much
expanding their coverage, forex traders Picture: GETTY more severe than anticipated. It is likely we
should keep an eye on India. will see a retest of lower levels before fur-
ther upside. FairFX are quoting spot ster-
ANALYSIS l Recent rupee weakness versus other Asian currencies ling-dollar at $1.5927.
48.0 USD/INR (lhs) Jan 2010 = 100 103 There is still the nagging concern that the
47.5 USD/Asia* (rhs) 102
European debt crisis may yet raise its head
*Basket of Asian currencies once again, causing the euro to drop against
47.0 101
the pound and indicating that the euro-
46.5 100 sterling downtrend since March is still in
46.0 place. This has led some traders to specu-
99
45.5 late that a trip back towards this year’s
98
45.0 lows at just below £0.8100 could be on the
97 cards in August. The IG Index daily spread
44.5
44.0 96 bet price for euro-sterling is £0.8301-
43.5
Source: DB Global Markets Research, Bloomberg Finance LP
95
£0.8304.
Jan 2010 Mar 2010 May 2010 Jul 2010 Jessica Mead

FOREX ANALYST PICKS

CURRENCY STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
ILYA SPIVAK JOHN KICKLIGHTER JOEL KRUGER

My pick: Short euro-US dollar (pending market movement)
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
Euro-dollar rallied after confirming an inverse head and shoulders in
early July. Prices are poised to challenge resistance at $1.3266, the
76.4 per cent Fibonacci retracement of the 12 April-7June down-
swing as well as the upside target implied by measuring the dis-
tance between the head and neckline of the head and shoulders. I
am bearish and I look for the upswing to yield an attractive selling
opportunity.
My pick: Short euro-dollar below $1.30 / stay long euro-yen from ¥113.50
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
The most attractive currency pairs this week are euro-US dollar and
sterling-US dollar but their runs are already mature in my opinion. My
euro-yen long setup from last week is underway from ¥113.50 with a
stop at ¥111.15 but the follow through has yet to take up. As an offset
to the euro’s questionable health, I am also looking for a potential euro-
dollar reversal. A short below $1.30 with a 150 point stop and 250
point first target should do.
My pick: Stay short New Zealand dollar-US dollar at $0.7350
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
Despite the latest surge, the market shows formidable resistance on
rallies above $0.7300 and we still like the idea of fading any rallies
beyond this psychological barrier. Longer-term technicals confirm
the bearish bias, with the market likely to roll over in favour of some
deeper setbacks towards $0.6500. A weekly close below $0.7250
should accelerate declines towards initial support at $0.7000,
below which lies our $0.6500 objective. Place a stop at $0.7775.
 18 Investment | Fund Management
It’s not time to give up on
the land of the free just yet
The US is still strong,
says Kathleen Brooks
T
HE tide has turned against the out-
look for US growth. A flurry of
weaker than expected data – culmi-
nating with economic growth data
released last week, showing the pace of
expansion had slowed from 3.7 per cent
in the first quarter of the year to 2.4 per
cent in the second – saw investors con-
cerns shift from Europe and its sovereign
debt crisis, to fears about US growth
grinding to a halt.
But while financial markets are quick
to react to any economic weakness, are
they making the situation more dramatic
than it actually is? Yes, says Philip
Isherwood, equity strategist at Evolution
Securities. “Some see the loss of macro
momentum that has set in as something
sinister, and a portent of much worse to
come. But according to previous post-
recessionary periods, the truth is that this
is inevitable… The loss of altitude is a fair-
ly normal post-recessionary experience,
and the fact that a rate of change cannot
be sustained doesn’t mean it has to go
negative.”
GROWTH IS MODERATING
Isherwood argues that at current levels
the US’s main manufacturing index the
ISM, which traditionally has a strong rela-
tionship with equities, is still pointing to
further growth, albeit at a more moder-
ate pace. The ISM reading for July was
55.5, down from 56.2 in July. However, it
remains above the crucial 50 level, which
indicates that manufacturing activity is
still expanding. Only if this index falls
below 50, should investors be worried,
says Isherwood, as that would hurt
European and US equity markets.
Virginie Maisonneuve, head of multi-
regional equities at Schroders, says that
in amongst the disappointing data releas-
es there have been some bright spots for
the US economy, most notably in corpo-
rate spending, which has ticked up by a
whopping 22 per cent. “There has been a
big upswing in spending on software in
the US, and there are investment oppor-
tunities in the US software sector,” says
Maisonneuve. She is also attracted to
industrials and large US companies that
have exposure to fast growing emerging
markets.
Regarding the domestic economy,
Maisonneuve says that the outlook for
consumption will remain weak as long as
unemployment stays close to 10 per cent.
However, the performance of US retailers
has turned into a two-tier affair: “We are
looking at companies with a strong com-
petitive advantage. Some discount retail-
ers have done extremely well during the
recession compared to mid-range outlets.”
FUND MANAGEMENT NEWS
BY JESSICA MEAD
Demand for office blocks stacks up Picture: Micha Theiner/City A.M.
INVESTORS SHOULD HAVE FAITH
Reports last weekend suggested that the
US economy could fall behind its counter-
parts in Europe and the UK. But should
investors be worried that the US economy
will be the laggard in the developed
world? The shift in emphasis from
Europe’s woes to those faced by the US ANALYSIS l The ISM is behaving normally post the recession
coincided with the release of stress tests
80
on European banks and some impressive
economic data from Germany. “I think 70
this is a period of recalibration,” says Brad
Sorensen, director of market and sector 60
research at Charles Schwab. “Europe has
temporarily worked through its problems 50
– it passed its stress tests. But the econom-
40
ic growth out of the US is still good. The
recent weakness is just US growth retreat- 30
ing to a more sustainable level.” Source: Thomson Datastream
Investors who are worried about the 20
prospects for the world’s largest economy Jul 82 Jul 86
REAL ESTATE INVESTMENT INCREASES
Pension funds ramped up their investments in
real estate last year, the European
Institutional Asset Management Survey
(EIAMS) showed. At 6.6 per cent of investors’
total assets, real estate is now at an eight-
year high. The survey showed that all sizes of
investors increased their allocations to real
estate, with medium investors making the
largest increase, perhaps starting to redress
the significant cuts made the previous year.
Pension funds have moved down the liquidity
scale and diversified into alternatives such as
real estate, hedge funds and private equity.
The US growth
outlook is
moderating not
slowing
Picture: SXC
can rest easy. Although growth figures
have moderated, they remain solid. This
should fuel growth for the rest of the
year, which is good news for equity mar-
kets. Investors with long time horizons
shouldn’t ditch the US equity market yet.
Periods of US recession
ISM survey
ISM New Orders
Jul 90 Jul 94 Jul 98 Jul 02 Jul 06 Jul 10
PENSIONS FUNDS CUT INFLATION HEDGES
UK pension funds decreased their inflation
hedging by nearly a third between April and
June compared to the first quarter of the
year, according to the latest LDI survey from
F&C. This fall can be attributed to the combi-
nation of unattractive market levels, an acute
and prolonged period of pre-election wariness
and renewed concerns about the prospects of
a “double-dip” recession and deflationary
fears, F&C said. However, interest rate hedg-
ing was maintained at similar levels due to
swap rates being perceived as low and falling
sharply in May as gilt yields retreated further.
CITYA.M. 4 AUGUST 2010
THREE TOP-RATED
US EQUITY FUNDS
NEPTUNE US OPPORTUNITIES FUND
Launched on 31 December 2002, Neptune’s
US Opportunities fund has been managed by
Felix Wintle since August 2005.
Although it has underperformed the S&P
500 over the past year due to manager cau-
tion – 14.99 per cent compared to 25.96 per
cent for the wider market – it has enjoyed
robust outperformance since inception. Since
launch it is up 95.62 per cent compared to
the benchmark’s 46.35 per cent. The OEIC’s
fund size is currently £594.2m.
For institutional investors, the minimum
investment is £250,000 and the annual
charge is 1.1 per cent. Wintle employs a top-
down stock selection approach with strong
sector and sub-sector views. A fifth of the
fund is invested in IT and 18.9 per cent is in
financial stocks. The fund is normally invested
in between 30 and 50 stocks.
BAILLIE GIFFORD AMERICAN
Managed by Mick Brewis since its launch in
July 1997, the Baillie Gifford American OEIC is
notable for being one of the few funds that has
outperformed the S&P 500 over a 10-year
timeframe. In terms of more recent perform-
ance, the American fund has beaten the index
over the past year, three years and five years.
Morningstar rates the fund as superior and
commends Brewis for looking for stocks that
offer conservative long-term earnings growth
prospects but that trade at attractive valua-
tions. Currently it is overweight technology
stocks and underweight financials. The fund
had £118.54m of assets under management as
of the end of June. For institutional investors,
who buy B shares, the minimum investment is
£250,000 and with an initial charge of 1 per
cent and an annual fee of 0.65 per cent.
NEWTON AMERICAN
Although it was launched in October 1986, this
fund has been managed by Simon Laing since
2000. Laing took over sole charge of the fund
in October 2002 and applies a bottom-up
approach. The fund typically invests in around
40-60 stocks and is currently overweight
healthcare, basic materials, industrials and
consumer services. The fund is underweight
financials, oils and gas and technology. Over
the past year it has underperformed the
benchmark, gaining 37.9 per cent compared to
the FTSE World North America Index’s 43.2
per cent. But over the three and five-year time-
frame it has outperformed the benchmark. It
has £56.19m in assets under management and
has a total expense ratio of 1.68 per cent,
according to Morningstar, which rates the
fund as standard. The minimum investment for
institutional clients is £500,000.
ABSOLUTE RETURN FUNDS DO WELL
New research by S&P Fund Services has
found that absolute return funds performed
well due to a combination of low libor rates –
the typical benchmark for these type of funds
– and a strong market recovery. The review,
which covered 2009 and 2010 to date, found
that although absolute return funds had a
good recovery, fewer funds had achieved their
targets over the last three years as they were
adversely affected by market volatility. The
review found that more fund managers were
turning to equities as the number of fixed
income funds in the sector fell in 2009-2010.
 City Focus THE NEW VOLVO 19
REVIEWED
| Law SEE MOTORING, P20

China crisis as
firms quit Aim
first instance, they need to acknowledge
that to improve their performance on the
market they need better investor relations
and communications with the market
and must address issues of disclosure and
poor corporate governance.
With solid and consistent management
and good trading history, some Aim-listed
Chinese companies have sufficient track
JAMES WILKINSON record to move up to the main market –
REED SMITH another option for those considering
delisting from Aim. Listing on the main

B
EFORE the onset of the economic
downturn, there seemed to be no
end to the approaches being
received by London Aim advisers
from Chinese companies seeking an
admission to Aim.
Since then, however, regulatory
changes in China concerning overseas list-
ings and the depressed nature of the
world equity markets in 2008 and 2009
have brought a halt to the number of new
entrants to the market. Yet the most sig-
nificant development recently is the num-
ber of Chinese companies leaving
London’s junior market. Twelve compa-
nies with their operations centred in
China have left Aim since 2008. Macau
Property Opportunities Fund departed for
the main market, China Biodiesel was
bought out in a tender offer, and West
China Cement is expected to move to
Hong Kong later in the year. Many of the
48 Chinese companies remaining on Aim
will also be considering their options.
But what are the alternatives available
for these companies considering delisting
from Aim and how can this sudden
change in attitude towards the junior
market be explained?
If used properly, Aim can be a platform
for senior markets and is likely to remain
a good home for growing technology and
resource companies. Perhaps, then, the
first and most obvious option available is
for Chinese companies to remain on Aim,
but to change their approach to the mar-
ket in order to make better use of it. In the
market would certainly address some of
the liquidity and profile concerns many
Chinese companies have about Aim, but
the reluctance to disclose information,
and the resistance to acceptable levels of
corporate governance, would remain
problematic. Additionally, majority own-
ership in many cases remains with the
original founder, which will always
restrict liquidity, hold back the introduc-
tion of suitable governance structures,
and limit opportunities for transition to
the main market.
A seemingly innocuous problem, which
is often overlooked, is the lack of English-
speaking finance directors and executive
directors in these Aim-listed Chinese com-
panies. Investors cannot be expected to
develop an interest in a stock if the execu-
tive directors are unable to communicate
the opportunity effectively.
This becomes less of an issue for those High-tech firms are down their holdings at higher multiples companies that do progress a delisting
companies pursuing the further alterna- delisting from AIM. but there are challenges and costs associat- from Aim, it is unlikely that they will be
tive strategy of a dual listing on Aim and in ed with a dual listing that may prevent able to come back to the UK markets
Hong Kong, as demonstrated by surveil- Picture: this being a viable strategy for some. (unless any exit takes out the minority
lance and security systems specialist RCG REUTERS Many will cite the low valuations, high external investors at an acceptable level).
and orange plantation owner Asian Citrus. costs and lack of interest in Chinese small Merely cancelling the listing would be per-
This is an attractive option for some as it cap companies as good reasons to leave ceived as a very negative step.
provides an opportunity to access alterna- Aim. Many owners will take advantage of Chinese companies are not the only
tive sources of capital in a market that is the current depressed market valuations ones deserting Aim. In June 2010, 16 com-
closer to home and where the language to take their companies private, whereby panies left Aim, with others planning to
barrier is less problematic. For RCG and the listing and associated advisers’ costs cancel their listing very soon. Therefore it
Asian Citrus, trading volumes have will be saved and management time can is clear that Chinese companies are not
increased significantly and higher valua- be focused on developing a domestic the only ones to have failed to fulfil their
tions have been achieved since completing Chinese market position rather than con- potential on Aim – perhaps Aim also has
their dual listing in Hong Kong. Some own- vincing investors that an international some work to do if it wants to continue to
ers may see this as an opportunity to sell growth strategy is a realistic prospect. For attract and retain foreign entrants.

City should look to international arbitration

revealed a 16 per cent increase. These find-
ings indicate both an increase in commer-
cial disputes and a shift in the attitude of
the global business community towards
the use of international arbitration and the
bespoke dispute resolution mechanism
that it provides.
In view of the increasing usage of inter-
national arbitration it is perhaps surprising
DAVID EARNEST that financial institutions, for the most
HOGAN LOVELLS part, do not routinely incorporate interna-
tional arbitration clauses into their agree-
tration from litigation is that it can meet
the particular needs of parties from differ-
ent legal and cultural backgrounds.
Depending on each particular transaction
or contract, the parties can create a cus-
tomised arbitration agreement to govern
how any potential dispute should be
resolved. Parties are able to decide, among
other things, the national law that will gov-
ern their dispute, in what country the dis-
pute will be decided, the procedure that
will be followed and, perhaps most impor-
are reasonably able to control the extent to
which their dispute enters the public
domain. Judgements of awards from inter-
national arbitration can also be enforced in
more than 140 countries. The convention
requires courts of contracting countries to
give effect to private agreements to arbi-
trate, and to recognise and enforce arbitra-
tion awards made in other contracting
countries. This stands in contrast to court
judgments where, at least outside the EU,
the existence of reciprocal enforcement

F
OLLOWING the banking collapse of
2007 there was much speculation that
disputes would increase as parties
sought legal redress for a range of
alleged wrongdoings including mis-selling,
professional negligence and breach of con-
tract. It is only now that data is starting to
filter through as to whether this specula-
tion was justified.
Disputes, however, do not always pass
through the courts. For this reason, a key
indicator of the “market” for contentious
matters has been the number of disputes
referred to the leading international arbi-
tration institutions in the course of 2009. A
recent survey conducted by Hogan Lovells
ments. One theory is that resistance to the
use of arbitration is generally derived from
the comfort and familiarity banks and
financial institutions have with the tried
and tested, but perhaps inefficient, solu-
tions that litigation in national courts pro-
vides. Litigation does indeed retain an
advantage in situations where, for exam-
ple, a simple domestic debt claim is all that
is at issue. It is however the financial indus-
try’s increasing use of complex financial
agreements that frequently extend across
multiple jurisdictions which can signifi-
cantly benefit from the use of internation-
al arbitration.
What distinguishes international arbi-
tantly, who will decide the dispute. The
selection of the law, procedure and loca-
tion of the arbitration encourages legal
neutrality and comfort between multi-
national business partners, while the abili-
ty to choose who will decide the dispute is a
unique advantage.
Shipping and construction disputes have
long relied on arbitrators with specific
industry expertise, but now it is cross-bor-
der financial and commercial transactions
that require persons with specific experi-
ence and understanding to efficiently
resolve these disputes. Furthermore, since
international arbitration is a private and
typically confidential process, businesses
mechanisms is at best patchy, and which
sometimes face years of protracted litiga-
tion to be recognised and enforced in a for-
eign jurisdiction.
Given the benefits of a mutually agreed
and confidential dispute resolution
process, coupled with arbitrators who are
leaders in their field and judgments that
are enforceable by way of an international
convention, it is no surprise that the use
and acceptance of international arbitration
has steadily increased. It is time the City re-
evaluated its perspective on what its com-
mercial counterparts have long known and
enjoyed as an efficient and effective forum
for the resolution of cross-border disputes.
 Lifestyle
20 CITYA.M. 4 AUGUST 2010
WORDS BY
| Motoring RYAN BORROFF

&
Safety is still the foremost feature
of this newly glamorous Volvo.
Nothing wrong with that Safe
D
RIVING along in the new Volvo
S60, I am so engrossed in conversa-
tion with my passenger that I’ve
completely taken my eyes off the
road. This is why I don’t see a pedestrian
in front of me. Fortunately, a sensing sys-
tem at the front of the car automatically
brings the car to a sudden stop and the
sound
pedestrian is unharmed. It is as convinc-
ing a display of the S60’s latest safety
technology as I need. The pedestrian is
actually a surprisingly well-attired
dummy and I’m on a special test circuit
in the highlands of Scotland.
This display is interesting for a couple
of reasons. The first is that this is the first
time such pedestrian safety technology –
called City Safety – has been fitted as
standard to a production vehicle. Second,
that despite all of their remonstrations
about how sporty and well-designed the
new S60 is, it is to safety that Volvo
remains so committed. But then if you
asked most people what Volvo Cars was
known for, what would they say?
Buying a Volvo has been a sensible
choice for decades. Yet with the new S60,
Volvo is hoping to change people’s per-
ceptions and tap straight into con-
sumer’s emotions, to seduce your heart
as well as convince your head.
To start with, the new S60 is obviously
a step-up in terms of looks. It has a wedge-
like, forward-sloping shape that gives the
car a meaner intent. Not aggressive so
much as quite annoyed – this is a Volvo
after all. It also has a coupé-like roof
shape, yet it’s still a four-seater that actu-
ally has quite a lot of legroom, and head-
room, in the back.
Inside, the car is still understated in a diesel engine that sounds a little bit who have become tired or distracted, and
Scandinavian kind of way, yet the cockpit rough, but in a nice way, like Tom Waits. a Blind Spot Information System (BLIS) THE FACTS:
is now angled a bit towards the driver, On the marvellous roads of Scotland, that lets you know whether there are VOLVO S60 D5
and metallic elements frame key feature the car feels a good deal sharper and other vehicles in your blind spots by flash-
areas in the dash and doors. As if Volvo tauter to drive than any Volvo I can ing an LED. Then there’s a Lane Departure PRICE: £27,995
created the car for a new breed of driver remember. It is fun and it does feel sporty. Warning – which alerts drivers if the vehi- 0-60MPH: 7.4secs
that may just be an incy-wincy bit self- This is due to the fact that the car’s chas- cle runs across the lane markers without TOP SPEED: 146mph
focused and a little bit of a show-off. Not sis was tuned on UK roads and the car has the turn indicator being used. This does-
as much as an Audi driver, oh no, but still a firmer suspension than its predecessor. n’t even include the fleet of airbags and CO2 G/KM: 139g/km
the interior is as interesting as anything The result is that after a full day’s driv- other passive safety features that are also MPG COMBINED: 53.3mpg
BMW is doing. And it’s comfortable with ing, I’ve not really paid much attention to included.
supportive and sporty seats. the car’s safety systems. So much so that I The thing is I don’t care because the THE VERDICT:
Which is important because the real have to consult the press pack to confirm car is a genuine pleasure to drive. And if
question is whether the new S60 can what’s included. Here’s the roll call: the these safety features are available on a
DESIGN hhhii
deliver a drive that is both fun and engag- City Safety system that can avoid low- car that’s almost as fun to drive as its
PERFORMANCE hhhii
ing as well as safe. I’m driving the D5 speed impacts of up to 19mph, a Driver German competitors, then why wouldn’t
PRACTICALITY hhhhi
model, a 2.0 litre, 205ps, five-cylinder Alert Control system which alerts drivers you choose it?
VALUE FOR MONEY hhhhi

CAR TALK BY RYAN BORROFF

The facts:
you can afford a Mercedes
The figures:
mercedes-benz.co.uk/offers
For more information on our tailor-made
PORSCHE’S GREEN LEAD
packages or to book a test drive, visit us online. Dreams can come true...Porsche has
announced it will build its astonishing 918
Spyder concept for the road. The mid-
engined plug-in hybrid super-sports car
should have a top speed of 200mph and a 0-
62mph time of just 3.2 seconds, yet should
emit just 70g/km of CO2 with fuel consump-
tion of around 94mpg. Its technology should
also change the car industry forever.
COLLECTOR’S GOLD
If you fancy yourself as a bit of a car collector,
a rare convertible version of the most famous
Aston Martin ever made – the DB5 – is com-
ing up for sale on 25 September. Only 123
convertible examples of the DB5 were made
and this car – which should fetch around
£450,000, 100 times more than the original
price – features an extremely rare factory-fit-
ted hardtop. www.historics.co.uk
FIAT LIMITED EDITION
Fiat has launched a limited edition 500
model in a special – and quite stunning –
matt black paint.
The paint has only been available on
supercars up until now. Called BlackJack,
the car comes with matching matt black 16-
inch alloy wheels and red brake callipers.
Just 200 cars are available in the UK and
the car can only be bought online.
CITYA.M. 4 AUGUST 2010 Lifestyle | TV& Games 21

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show:
7.30pm Penguin Island:
BBC News
8pm CHOICE Celebrity
MasterChef
9pm The Secret Tourist
10pm BBC News
10.25pm Regional News
10.35pm The National
Lottery Draws
10.45pm FILM Disturbia;
National Lottery Update
12.30am Sign Zone:
Country Tracks
1.25am My Life 1.55am Dragons’ Den
2.55am Put Your Money Where Your
Mouth Is 3.55am-6am BBC News
6pm Eggheads
6.30pm Antiques Road Trip:
7pm Wainwright Walks:
Coast to Coast
7.30pm Mastermind:
Champion of Champions
8pm Coast: The team explores
Brittany in northern France.
9pm CHOICE The Normans:
New series. The expansion and
unchecked ambition of the
Norman empire.
10pm QI: With Sean Lock,
Rich Hall and Bill Bailey.
10.30pm Newsnight: Weather
11.20pm Deadliest Crash: The
Le Mans 1955 Disaster:
12.20am BBC News
4.50am-6am Close
6pm London Tonight
6.30pm ITV News
6pm The Simpsons: Homer
challenges Marge to a
6pm The Boss Is
Coming to Dinner
TV PICK
7pm Emmerdale: The police ooking competition. 6.25pm Don’t Stop Believers
confirm the DNA on the 6.30pm Hollyoaks: 6.30pm Live from Studio Five
chain matches Ryan’s. 7pm Channel 4 News 7pm Five News at 7
7.30pm The Lakes: 7.55pm 4thought.tv: 7.30pm Escape from Red
8pm Midsomer Murders: 8pm How to Look Good Naked: Berlin: Five News Update
A schoolteacher is killed 9pm Newlyweds: 8pm Emergency Bikers:
in a hit-and-run. The One Year Itch: Five News at 9
10pm ITV News at Ten 10pm Big Brother: 9pm NCIS
10.30pm London News 11.15pm The Big Bang Theory: 10pm CHOICE Law & Order: CELEBRITY MASTERCHEF
10.35pm TV’s Naughtiest 11.40pm My Name Is Earl: Criminal Intent BBC1, 8PM
Blunders: 12.10am My Name Is Earl 10.55pm Don’t Stop Believers 11pm Three well-known faces compete in the
11.35pm iTunes Festival K-Ville 11.55pm Poker 12.55am kitchen of London restaurant Asia de
12.40am Music on 4: The SuperCasino 4.05am The Boss Is
Highlights 2010: Album Chart Show Spotlight Cuba in a bid to impress judges John
Coming to Dinner 4.30am Wildlife
12.30am The Zone; 12.50am Big Brother: Live SOS 4.55am Rough Guide to Eco Torode and Gregg Wallace.
ITV News Headlines 4.15am Beach Volleyball 5.10am- Escapes 5.10am The New
2.30am The Jeremy Kyle Show 6am Triathlon ITU World Tomorrow 5.35am-6am Michaela’s
3.25am-5.30am ITV Nightscreen Championship Series Wild Challenge

SKY SPORTS 1 Transworld Sport 11pm British LIVING E4 3.50am Mayday! 4.40am Days
SATELLITE & CABLE

3.30pm Live ECB 40 League
Cricket 9pm Football’s Greatest
9.30pm Time of Our Lives
10.30pm FIFA Futbol Mundial
11pm Football’s Greatest
11.30pm Boots ‘n’ All 12.30am
Time of Our Lives 1.30am
Football’s Greatest 2am Boots
‘n’ All 3am FIFA Futbol Mundial
3.30am European Tour Weekly
4am Max Power 5am-6am
Transworld Sport
SKY SPORTS 2
7pm Football’s Greatest 7.30pm
Total Rugby 8pm Golf 10pm
Boots ‘n’ All 11pm Golfing
World 12am European Tour
Weekly 12.30am Inside the
PGA Tour 1am Golf 3am Total
Rugby 3.30am-4.30am Poker
SKY SPORTS 3
7pm British Motocross
Championship 8pm Boots ‘n’ All
9pm Spirit of Yachting 9.30pm
FIFA Futbol Mundial 10pm
Motocross Championship 12am
Watersports World 1am Max
Power 2am British Motocross
Championship 3am-4am
Transworld Sport
BRITISH EUROSPORT
6.10pm Women’s Under-20s
World Cup Football 7.10pm
Wednesday Selection 7.15pm
Show Jumping 8.15pm Riders
Club 8.20pm US Tour Golf
9.20pm European Tour Golf
9.50pm Ladies European Tour
Golf 10.45pm Golf Club
10.50pm Yacht Club 11pm
Olympic Magazine 11.30pm-
12.30am Cycling
ESPN
7pm Live Pre-Season Football
9pm Superleague Formula
10pm 30 for 30 11pm Major
League Baseball 2am Press Pass
2010 2.30am 30 for 30 3.30am
Russian Premier League Review
4am-5am Superleague Formula
7pm Bulging Brides 8pm Four
Weddings US 9pm Ghost
Whisperer 10pm Medium
11pm Criminal Minds 12am
CSI: Crime Scene Investigation
1am Passport Patrol 2am So
You Think You Can Dance 3am
The Fresh Prince of Bel-Air
3.50am Maury 4.40am CSI:
Crime Scene Investigation
5.30am-6am Home Shopping
BBC THREE
7pm Doctor Who 7.45pm
Doctor Who Confidential 8pm
FILM Lara Croft: Tomb Raider
2001. 9.30pm Baby Beauty
Queens 10pm Glamour Models,
Mum and Me 11pm Family Guy
11.45pm American Dad!
12.30am Mongrels 1am
EastEnders: The Murders of
Lucas Johnson 2am Alice and
Her Six Dads 3am Baby Beauty
Queens 3.30am Mongrels
4am-5am Glamour Models,
Mum and Me
7pm Hollyoaks 7.30pm Friends That Shook the World 5.30am-
9pm FILM 10 Things I Hate 6am How Does That Work?
About You 1999. 11pm Rude
Tube 12.05am You Have Been
DISCOVERY HOME &
Watching 12.55am-6am Big HEALTH
Brother: Live 7pm Labour and Delivery: A THE NORMANS
baby born on the back seat of a BBC2, 9PM
HISTORY car. 8pm 10 Years Younger Robert Bartlett explores the expansion
7pm Warriors: Cortes 8pm 9pm Hospital Sydney 10pm and unchecked ambition of the Norman
How London Was Built 10pm Untold Stories of the ER 11pm empire, and how its impact still
Victorians Uncovered 11pm The Trauma Team 12am resonates in today’s culture and politics.
Marked 12am How London Hospital Sydney 1am Untold
Was Built 2am Warriors: Stories of the ER 2am The
Cortes 3am The Roman Empire Trauma Team 3am 10 Years
in the First Century 4am-5am Younger 4am Test Tube Babies
The True Story 5am-6am Multiple Mums
DISCOVERY SKY1
8pm How Do They Do It? How 8pm My Pet Shame 9pm FILM
peanut butter is made. 8.30pm Happy Gilmore 1996. 10.45pm
How It’s Made 9pm Violent The Real A&E 11.15pm Real
Nation 10pm Manhunt: Search Filth Fighters 11.45pm Oops TV LAW & ORDER: CRIMINAL INTENT
for a Killer 11pm Time Warp 12.45am Road Wars 2.30am FIVE, 10PM
12am Deadliest Catch 1am Ross Kemp on Gangs 3.30am Logan and Falacci investigate the
Bear Grylls: Born Survivor Shear Genius 4.20am Project brutal murder of an obstetrician found
2am More Industrial Runway 5.10am-6am Are You posed in a ritualistic fashion, spread-
Revelations 3am Weaponology Smarter Than a 10 Year Old? eagled on an examination chair.

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

QUICK CROSSWORD
    

SUDOKU KAKURO
8 16 29 21 8 11 34 12
12 10

28 23
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2 In the centre of (5)
3 Anon (4)
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    ten minutes to find as many words as possible,
R D 11 Of teeth (6) 4 Take by force (5)
14 Boiler (6) 5 Have actual being (5)
none of which may be plurals, foreign words or
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LAST ISSUE’S or more, all must contain the central letter and
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O G 21 Based on or involving
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SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
A H 22 Faces (5) 11 Pass from
23 Awake (5) physical life (3)
QUICK CROSSWORD 12 Forty winks (3)
SUDOKU
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 Sport
22
Results
CRICKET
LV COUNTY CHAMPIONSHIP—Division One (Basingstoke):
Hampshire 373-5 (98.0 overs) (M A Carberry 162, M J Lumb
158). v Durham. (Canterbury): Somerset 363-7 (96.0 overs)
(J C Hildreth 151, A V Suppiah 125). v Kent. (Headingley
Carnegie): Yorkshire 178 v Nottinghamshire 147-3 (37.0
overs) (M J Wood 59).
LV COUNTY CHAMPIONSHIP—Division Two (Grace Road):
Derbyshire 182 (D J Redfern 85, M N Malik 4-32, M J
Hoggard 4-77) v Leicestershire 117-1 (39.0 overs).
CLYDESDALE BANK 40—Group A (Old Trafford):
Lancashire 244-7 (P J Horton 69) v Sussex 248-6 (J S
Gatting 71). Sussex (2pts) beat Lancashire by 4 wickets.
THIRD TEST MATCH (Colombo): Sri Lanka 293-4 (86.5
overs) (K C Sangakkara 75, D P M D Jayawardene 56). v
India.
FOOTBALL
UEFA CHAMPIONS LEAGUE—Third Qualifying Round
Second Leg: Anderlecht 3 The New Saints FC 0
FRIENDLY MATCHES: Benfica 0 Tottenham 1, Bishops
Cleeve 2 Cheltenham 1, Boreham Wood 0 Arsenal XI 3,
Bristol Rovers 1 Stoke 2, Dartford 2 Leyton Orient 2, Forfar 1
Dundee Utd 4, Hearts 0 Wolverhampton 2, Milton Keynes
Dons 2 Birmingham 3, Tranmere 0 Liverpool XI 2, Ashton
Utd 1 Oldham 1, Belper Town 1 Derby XI 1, Wakefield FC 0
Leeds 5, Northwich 0 Preston 2, Southend 1 West Ham 1.
SNOOKER
SHANGHAI MASTERS QUALIFYING (Sheffield)—22nd Rnd:
Tony Drago (Mlt) bt Xiao Guodong (Chn) 5-2, Matthew
Couch (Eng) bt Bjorn Haneveer (Bel) 5-0, Igor Figueiredo
(Bra) bt David Gilbert (Eng) 5-4, James McBain (Sco) bt
Jimmy Robertson (Eng) 5-4, Alfie Burden (Eng) bt Matthew
Selt (Eng) 5-4, Thanawat Thirapongpaiboon (Tha) bt Mark
Joyce (Eng) 5-4, Zhang Anda bt Paul Davies 5-1, David
Morris (Irl) bt Patrick Wallace (NIrl) 5-3, James Wattana
(Tha) bt Liu Song (Chn) 5-3, Peter Lines (Eng) bt Joe Jogia
(Eng) 5-2, Barry Pinches (Eng) bt Anthony McGill (Sco) 5-4,
Michael White (Wal) bt Michael Judge (Irl) 5-2, Jamie
Jones (Wal) bt Jimmy Michie (Eng) 5-2, Andy Hicks (Eng) bt
Kyren Wilson (Eng) 5-1.
TENNIS
ATP LEGG MASON TENNIS CLASSIC (Washington D.C)—
1st Rnd: Dmitry Tursunov (Rus) bt Teymuraz Gabashvili (Rus)
5-7 7-5 6-4, Thiemo De Bakker (Ned) bt Lukas Lacko (Svk) 5-
7 6-3 6-3, Michael Berrer (Ger) bt Karol Beck (Svk) 6-3 6-4,
Ryan Sweeting (USA) bt James Blake (USA) 3-6 6-3 6-4,
Illya Marchenko (Ukr) bt Rainer Schuettler (Ger) 6-4 3-6 6-
4, Viktor Troicki (Ser) bt Kevin Kim (USA) 6-1 6-2, Denis
Istomin (Uzb) bt Leonardo Mayer (Arg) 6-4 5-7 7-6 (7-5),
David Nalbandian (Arg) bt Rajeev Ram (USA) 6-4 6-0, Igor
Kunitsyn (Rus) bt Kei Nishikori (Jpn) 6-2 6-3, Grega Zemlja
(Slo) bt Benjamin Becker (Ger) 6-2 6-3.
WTA MERCURY INSURANCE OPEN (San Diego,
California)—11st Rnd: Alisa Kleybanova (Rus) bt Aravane
Rezai (Fra) 6-2 5-7 6-3, Dinara Safina (Rus) bt Alona
Bondarenko (Ukr) 6-1 7-6 (7-2), Sara Errani (Ita) bt Olga
Govortsova (Blr) 6-3 1-6 7-5, Jie Zheng (Chn) bt Shenay
Perry (USA) 6-3 6-2, (7) Shahar Peer (Isr) bt Ana Ivanovic
(Ser) 7-6 (7-3) 6-3, Yaroslava Shvedova (Kaz) bt Nadia
Petrova (Rus) 5-7 6-4 6-1, Coco Vandeweghe (USA) bt Gisela
Dulko (Arg) 6-0 3-0 ret.
WTA E-BOKS DANISH OPEN (Copenhagen)—11st Rnd: Anne
Keothavong (GB) bt Sofia Arvidsson (Swe) 1-6 6-4 6-3, Elena
Baltacha (GB) bt Marina Erakovic (Nzl) 3-6 6-3 6-1, Sandra
Zahlavova (Cze) bt Marta Domachowska (Pol) 6-1 6-2,
Katarina Srebotnik (Slo) bt Alexa Glatch (USA) 6-2 4-6 6-1,
Iveta Benesova (Cze) bt Elena Bovina (Rus) 6-4 6-0, (6)
Polona Hercog (Slo) bt Anna-Lena Groenefeld (Ger) 6-3 7-5,
Kristina Barrois (Ger) bt Yvonne Meusburger (Aut) 7-5 6-2,
Tatjana Malek (Ger) bt Malou Ejdesgaard (Den) 6-0 6-1, (1)
Caroline Wozniacki (Den) bt Petra Martic (Cro) 6-3 6-2.
SPORTS EDITOR JON COUCH
email sport@cityam.com
SUMMER SALES
FOOTBALL UPDATE
Hammers land Ben Haim
WEST HAM have further strengthened
their squad after landing Israeli defender
Tal Ben Haim on a five-month loan deal.
The 28-year-old former Chelsea and
Manchester City centre-back played
under Hammers boss Avram Grant at
Portsmouth and is the fourth new arrival
at Upton Park.
Grant also says he does not want to
sell striker Carlton Cole, insisting his new
4-3-3 system will suit the front man.
Cole has been linked with a £9m move
to Stoke, but Grant said: “I don’t want to
sell Carlton. He is working very hard. His
attitude is good. He’s a good player.”
Iniesta latest to tout Cesc
WORLD CUP winner Andres Iniesta is
the latest Barcelona star to express his
wish to play alongside Cesc Fabregas at
Camp Nou next season.
The Spanish giants have been chasing
the Arsenal midfielder all season but the
Torres vows
to stay loyal
in Kop pledge
▲
FOOTBALL
BY MARTIN CAPARROTTA
FERNANDO TORRES yesterday ended
months of speculation about his
future by pledging to stay with
Liverpool.
The £60m-rated striker had been
linked with moves to Manchester City
and Chelsea but has now reassured
Reds fans that his commitment to
Liverpool is as strong as ever.
“My commitment and loyalty to
the club and to the fans is the same as
it was on my first day when I signed,”
said Torres, 26, who has scored 56
goals in 79 appearances for the Reds.
“I am looking forward to the chal-
lenge ahead. I’m looking forward to
starting the season and playing with
my team-mates and for the fans. This
is the best club in the country so the
targets and expectations are always
high.”
“From my first day I got the same
welcome as Stevie [Gerrard] or Carra
[Jamie Carragher] or players who have
been here for a long time. I felt at
Blues edge closer to £17m Ramires deal
▲
FOOTBALL
BY JON COUCH
CHELSEA are set to unveil Brazilian
star Ramires as their new £17m sign-
ing today.
The 23-year-old midfield ace will
undergo a medical at Stamford
Bridge this morning after the
Premier League champions agreed a
deal with Portuguese club Benfica.
Right-sided Ramires, who has 16
caps for Brazil, is expected to put pen-
Gunners are unwilling to negotiate a
transfer.
Iniesta said: “We all want him to come
because he will help us to go up a level –
he’s very complete. However, he belongs
to Arsenal and the two clubs must
understand each other.”
Arsenal, meanwhile, have let young-
ster Sanchez Watt rejoin Leeds United on
a season-long loan deal.
Hodgson eyes Flamini bid
LIVERPOOL boss Roy Hodgson is eyeing
up a move for former Arsenal midfielder
Mathieu Flamini to replace wantaway
Javier Mascherano.
Flamini, 26, has endured a nightmare
two years at AC Milan since joining from
Arsenal, making just 14 starts last season,
many of them at right-back.
Aston Villa have also expressed an
interest, but Hodgson heads the list of
suitors with £25m-rated Mascherano
admitting his desire to leave Anfield.
home from the first day.
“I feel the fans love me and every-
one knows I am really happy here and
really happy to play at Anfield.”
The news will come as a boost to
Liverpool boss Roy Hodgson who visit-
ed Torres during the Spaniard’s holi-
days in order to persuade the forward
to stay with the club. “I really appreci-
ated the fact that Roy came out to see
me while I was on my holidays,” he
added. “He told me about his plans
for the club and what he wanted
from me and I appreciated that.”
“I hope he will be the right man to
reach the targets of Liverpool Football
Club and I am really looking forward
to working with him.”
Torres’s pledge is be the perfect fil-
lip to Liverpool’s fans, who made the
striker the most popular Premier
League player when it came to shirt
sales last season.
He beat the likes of team-mate
Gerrard and Wayne Rooney in becom-
ing most popular name to be printed
on the back of replica shirts, accord-
ing to a list compiled by SportingiD.
to-paper on a four-year deal and
become Carlo Ancelotti’s second
signing of the summer following
the arrival of Yossi Benayoun
from Liverpool.
If the deal does go
through, Benfica will
have to pay £6m to
sports supremo Kia
Joorabchian, who
part-financed the
player’s transfer
from Cruzeiro.
Hughes hails perfect fit as
Al Fayed slams Hodgson
▲
FOOTBALL
MARK HUGHES believes his appoint-
ment as Fulham boss as a “good fit”
and has targeted a top-10 finish.
Hughes, 46, was last week con-
firmed as Roy Hodgson’s successor
after the Cottagers’ move for Ajax
boss Martin Jol fell through.
And in an unexpected twist at yes-
terday’s press conference, Cottagers
owner Mohamed Al Fayed accused
former boss Roy Hodgson of “taking
advantage” of Fulham.
Interrupting proceedings, he said:
“Unfortunately this guy [Hodgson],
after we put him where he is now, he
took advantage and left us.”
Torres has scored 56 goals in 79 appearances for Liverpool.
Reds serve notice of imminent takeover
LIVERPOOL’S takeover took another
stop closer to completion yesterday
after the club and several potential
owners, including Chinese businessman
Kenny Huang, alerted the Premier
League to a possible change in owner-
ship.
That said, Joorabchian, who
brought Carlos Tevez and Javier
Mascherano to the Premier
League, does not own any direct
stake in Ramires, so it is not
regarded as third-
party ownership.
Benfica president
Luis Felipe Vieira said: “Ramires
staying at Benfica does not depend
solely on us. We have a partner and
we must respect the contracts.”
Ancelotti admitted he was hope-
Hughes, however, remained quite
content, adding: “I made the decision
that this is the right club for me at this
time. It feels a good fit. The attraction
is the opportunity to get back into
work. I needed to get back to work.”
As Fulham are not in Europe this
season, Hughes believes his new club
can better last season’s 12th place
Premier League finish.
“We don’t have the distraction of
the Europa League,” added the for-
mer Manchester City boss. “That’s a
big ask when you’re involved in that
competition. I think the fact we
haven’t got that this year is a bonus. If
we can get into the top 10 this year,
that’ll be good progress.”
CITYA.M. 4 AUGUST 2010
Picture: P.A.
Under new Premier League rules,
outlined in the wake of the Portsmouth
fiasco, all prospective owners are
obliged to give the league 10 days’
notice of a takeover and to prove they
have sufficient funds to sustain the
club.
ful the deal would be reached, but
insists nothing is finalised yet.
“I will speak about Ramires when
Ramires will be a Chelsea player,”
Ancelotti said. “Until now, he is not a
Chelsea player. We hope, but until
now nothing is decided.”
Ancelotti made Ramires his No1
target following the departures of
midfielders Michael Ballack and Joe
Cole, while Deco is also expected to
leave the club before the start of the
season.
Portsmouth
face liquidation
threat in court
FOOTBALL
▲
PORTSMOUTH will learn tomorrow
whether they face a further points’
penalty and possible liquidation when
they re-appear at the High Court.
HM Revenue & Customs are chal-
lenging a Company Voluntary
Agreement (CVA) to allow the club to
come out of administration, insisting
they are owed £13m more than the
£24m claimed by the administrators.
If successful, the club, who were rel-
egated to the Championship last sea-
son, could face a points’ deduction for
the coming campaign, or, even worse,
the threat of liquidation.
CITYA.M. 4 AUGUST 2010
Is it the end
for Fred after
new setback?
▲
CRICKET
BY JON COUCH
THE longevity of Andrew Flintoff’s
career was thrown into question
again yesterday when his long-await-
ed comeback from injury was cur-
tailed by yet another setback.
The injury-plagued 32-year-old was
due to return to action with
Lancashire’s second string this week
after spending a year on the sidelines
following two knee operations.
But the all-rounder wasn’t deemed
fit enough by his county and has now
been ruled out of all cricket for the
rest of the summer.
Flintoff was hoping to finish the
final six weeks of the domestic season
with Lancashire and then make him-
self available to play for Chennai Super
Kings, in next month’s Twenty20
Champions League.
Now, this latest setback not only
casts doubt as to whether he will fea-
ture for England in their one-day
series with Australia this winter, but
also raises concerns as to whether he
will ever return to first-class cricket.
A Lancashire statement read:
“Following consultation with
Andrew Flintoff, Andy Williams
[Flintoff’s surgeon] and our own med-
ical team, Lancashire CCC have today
confirmed Flintoff will not be return-
ing to competitive cricket for the
remainder of the 2010 season.”
Flintoff has not played at all since
undergoing major surgery on his
right knee last August, leading to a
second operation in January.
But sources close to Flintoff have
played down fears his career may be
over, insisting he is being held back as
a matter of precaution and not due of
a recurrence of his knee injury.
Lancashire’s cricket director Mike
Watkinson added: “Whilst Andrew
has made significant progress, the
combined opinion is that he is not
quite ready for a return to cricket.
“He will continue his rehabilita-
tion into the winter months and we
will constantly monitor and review
his progress so that he is better
equipped for a return to action.”
Injury-hit Flintoff has not played for almost a year.
Sport 23
SPORT | IN BRIEF
Tendulkar in record books again
CRICKET: Sachin Tendulkar yesterday
became the most capped player in Test
history after walking out for his 169th
appearance for India.
The 37-year-old surpassed the record
set by former Australia captain Steve
Waugh on day one of the third Test
against Sri Lanka in Colombo.
Tendulkar, however, couldn’t prevent
Sri Lanka racing to 293-4 at the end of
day one. Kumar Sangakkara top-scored
with 75.
Finalists fined for ill-discipline
FOOTBALL: Fifa have fined Spain and
Holland for their players’ poor discipline
during the World Cup final.
The Dutch federation was fined a
total of £9,080 as their Spanish coun-
terparts were ordered to pay £6,053.
Referee Howard Webb handed out 13
yellow cards and sent off Holland’s John
Heitinga in last month’s ill-tempered
match, which Spain won 1-0.
Khan handed US PGA lifeline
GOLF: England’s Simon Kahn has been
handed a last minute invitation to play
in next week’s US PGA Championship at
Whistling Straits.
Kahn, currently ranked 102 in the
world, will be looking to build on his
BMW PGA Championship triumph at
Wentworth in May.
Westlife head Sandown festival
RACING: Pop sensations Westlife will be
performing live after a packed day of
racing at Sandown tomorrow.
The Grandstand Enclosure is now sold
out but premier tickets are still available
by calling 01372 470047 or by visiting
Picture: PA www.sandown.co.uk.
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