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OSBORNE: LABOUR Goldman in

running for
DENYING DEFICIT RBS loans

CONSERVATIVE
CONFERENCE
BY DAVID CROW IN BIRMINGHAM
GEORGE Osborne will today launch a
scathing attack on Labour’s approach
to the deficit, insisting that a slower
pace of spending cuts would lead to a
credit downgrade, higher interest rates
and turmoil in financial markets.
The chancellor will use his speech to
the Tory conference in Birmingham to
round on Labour’s new leader Ed
Miliband, who has said that plans to
cut public spending by an average of
25 per cent by 2014-15 could tip Britain
back into recession
“Imagine, if I were to stand up in the
House of Commons in two weeks time
and say: I’m cancelling the deficit
plan. I agree with Ed Miliband. Let’s
delay the tough decisions. Let’s borrow
more. Let’s go on adding to our debt,”
Osborne is expected to say.
“Imagine what would follow. The
market turmoil. The flight of
investors. The dismay of business. The
loss of confidence. The credit down-
grade. The sharp rise in market inter-
est rates. The extra debt interest. The
lost jobs. The cancelled investment.
The businesses destroyed. The recovery
halted. The return of crippling eco-
nomic instability.”
Osborne will claim that Miliband
and the trade unions, who have also
called for a more leisurely pace of
spending cuts, are increasingly isolat-
ed in the debate over Britain’s £109bn
structural deficit
He is expected to reel off a long list
of those who have backed his plan for
deep cuts, including the IMF, the
OECD, credit rating agencies, the
European Commission, the CBI, and
Bank of England governor Mervyn
King.
Osborne will also confirm the gov-
ernment’s intention to “rebalance”
the economy, so it is less reliant on
the financial services sector and the
City. Britain cannot create “prosperity
for all... by hitching the country’s
entire fortunes again to the City of
London,” he will say.
Osborne’s decision to focus on the
need for swingeing public spending
cuts is seen as risky by some party
strategists, who fear the government is
failing to outline an optimistic vision
for the economy.
Sources close to Ed Miliband last
night said his approach to the deficit
was “near identical” to David
Miliband’s, and accused the chancellor
of “resorting to the politics of scare-
mongering and pessimism”.
But an aide to Osborne told City A.M.:
“This isn’t about optimism or pes-
simism, it’s about living in the real
work. George is tackling the economic
arguments head-on”.
ALLISTER HEATH: P2, FOCUS: P4-5
▲
BANKING
BY STEVE DINNEEN
AT LEAST three potential bidders
are casting an eye over a £3bn port-
folio of property loans that will
soon be offloaded by Royal Bank of
Scotland (RBS).
Goldman Sachs is a shock con-
tender for the loans, alongside dis-
tressed debt specialist Lone Star and
private equity firm Blackstone.
Lazard is advising RBS on the sale of
the assets, which come from the
bank’s “non-core” division. Although
this represents the “bad” section of
the bank, which is being gradually
wound down, it is understood the
loans are not in default.
First round bids are expected to be
submitted within the next two weeks.
Royal Bank of Scotland declined to
comment, though a source with
knowledge of the matter said the
Edinburgh-based bank had not made
any decision concerning the sale of
the portfolio.
He told City A.M.: “At this stage this
is just speculation. The bank hasn’t
agreed to any proposals yet.”
The three potential bidders were
either not immediately available for
comment, or could not immediately
be reached for comment.
It is understood Lazard is also con-
sidering setting up a scheme through
which more than one buyer could
take a stake in the loan portfolio.
The move is part of a wider asset
sale by the bank, which is 84 per cent
owned by the taxpayer after a bailout
Chancellor George Osborne wants swingeing cuts on spending Picture: REUTERS at the height of the financial crisis.

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 2 News
Coalition still too complacent on tax
EDITOR’S LETTER
ALLISTER HEATH
I
T IS heating up here in
Birmingham at the Conservative
Party conference. George Osborne
is about to launch a scathing
attack on Ed Miliband for failing to
grasp the importance of cutting the
deficit; and a deal has been agreed to
sweep away the plethora of incentive-
destroying benefits, eventually replac-
ing them with a single payout
designed to ensure that work always
pays more than welfare.
All good stuff. But the government
remains too complacent on tax. I have
learnt that around 25-50 hedge funds
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
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
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Pictures Alex Ridley
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Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
THE SUNDAYS TODAY
EURO MAY NOT SURVIVE, CAUTIONS
STIGLITZ
One of the world’s leading econo-
mists has warned that the future of
the euro is “looking bleak” and the
fragile European economic recovery
could be irreparably damaged by a
“wave of austerity” sweeping the con-
tinent. Joseph Stiglitz, the former
chief economist of the World Bank
and a Nobel prize winner, also pre-
dicted that short-term speculators in
the market could soon start putting
pressure on Spain, which is strug-
gling with a large deficit and high
unemployment.
EXPANSION HELPS DYSON DOUBLE
PROFITS
Sir James Dyson’s privately-owned
engineering group delivered record
financial results last year with profit
doubling to £190m.
have already moved out to
Switzerland, with up to 10 relocated
to Jersey. Meetings regularly take
place between Jersey and other, much
larger financial institutions, includ-
ing top UK-based asset managers.
Kinetic Partners estimates that
around 1,000 hedge fund managers
have already left the UK; it puts their
average income at £1.5m-£2m per
year. The loss to the exchequer has
now reached a minimum of £500m
and is probably much higher. Two
individual moves alone will have cut
the exchequer’s revenues by £200m.
Over time, the biggest problem will
not be the jobs that actually relocate –
it is the jobs that won’t be created in
the UK, including support staff, retail-
ers and others. We ought to be trying
to attract companies and labour, not
to repel them. The Kinetic report adds
that the increasingly nasty political
climate, constant banker-bashing and
general anti-capitalist mood music is
also beginning to drive people away.
Nobody likes to be loathed.
London faces
Tube chaos
TRANSPORT
▲
BY EMMA SADOWSKI
LONDONERS are facing another gru-
elling day of commuting across the
capital as London Underground (LU)
workers launch a second 24-hour
strike in as many months.
The walkout, which will finish at
6:28pm tonight, will cause extreme
disruption to this morning’s com-
mute as the entire Underground net-
work is affected by the action.
At 6:29pm yesterday, over 10,000
Tube staff walked off the job in
protest at planned staffing cuts by LU
management that would see more
than 800 jobs axed.
TfL has added 100 extra buses on
the roads today, increased the capaci-
ty of the Thames river services and
has organised marshalled taxis in a
bid to deal with the strike and help
GOLDMAN ENDS PAY CAP
Goldman Sachs is to scrap a self-
imposed limit on bankers’ pay in a
move that will reignite the debate on
City bonuses. Last year the US invest-
ment bank capped pay for its London
staff at £1m in a response to govern-
ment calls for restraint. Goldman and
CreditSuisse were the only large insti-
tutions to introduce voluntary limits.
MARKS & SPENCER SHOWS IT’S BACK
IN FASHION
Marks & Spencer will defy the eco-
nomic gloom this week as it reveals a
bounce in fashion sales powered by a
celebrity-heavy advertising campaign
starring Lisa Snowdon and Dannii
Minogue. M&S is expected to be the
star performer in an important week
for gauging the mood of the British
consumer. Tesco has half-year results,
while J Sainsbury and M&S will pub-
lish trading results.
The research, which comes barely a
week after Wolseley became the latest
high-profile firm to relocate for tax
reasons to Switzerland (and to Jersey),
makes for grim reading. Wolseley will
save about £23m a year in reduced
taxes. That is grim news for the
Treasury as this could pay for 230 GPs
or 1,000 nurses. The damage from the
hedge fund exodus is substantially
greater. Those who dislike the City
should pay attention: you can’t claim
to like jobs yet hate those who create
or pay for them.
This quantification of the harm
caused by Britain’s counter-produc-
tive return to the politics of envy is
backed up by a separate study from
the Institute of Directors. The UK’s
corporation tax rate of 28 per cent
means that 18 out of 31 OECD coun-
tries now have lower rates. Even the
planned rate of 24 per cent will not
put the UK in front of the pack.
Skilled workers look for low marginal
tax rates; this is especially true of
those based in London, many of
commuters get around the city.
The public transport group said it
ran one-third of underground trains
during the last strike.
Tube unions the RMT and
Transport Salaried Staffs’ Association
(TSSA) have warned that the job cuts
pose severe safety risks to workers
and the public, but Transport for
London (TfL) said that changes to
staffing levels were unavoidable.
Mayor Boris Johnson, said: “As we
saw in the last strike, the belligerent
actions of the union leaderships will
not bring London to a halt.”
London Mayor Boris
Johnson said that TfL
will try to run as many
services as possible
during the Tube strike.
GM LOWERS SIGHTS ON FLOTATION
The first step in the US government’s
efforts to extricate itself from General
Motors is likely to raise substantially
less money than initially expected.
Challenging markets and the difficul-
ties of planning a long-term exit strat-
egy from the Detroit carmaker have
reduced the expected size of the float
– from $12bn, when GM first filed its
prospectus, to about $8bn.
JP MORGAN REOPENS NEW YORK
GOLD VAULT
JPMorgan has reopened an under-
ground gold vault in New York that
was mothballed in the 1990s, in the
latest sign of the soaring appetite for
bullion. Investors are piling money
into gold in record quantities, push-
ing the price to a record nominal
high of over $1,320 a troy ounce.
whom have already left one country
in search of better work. The 40 per
cent rate was just about tolerable,
although it was becoming increasing-
ly uncompetitive. The 50 per cent rate
is too high, especially when accompa-
nied by other measures such as the
hike in capital gains tax, the assault
on non-doms and higher national
insurance contributions (which take
the real top rate to 51.5 per cent, one
of the highest in the world). The
never-ending consultation on reforms
to international taxation, including
the destructive controlled foreign
companies (CFCs) regime, may be
going well but the process is too slow
and insufficiently credible to stop the
exodus.
Waging war on the “rich” is always
fashionable in difficult times. But it is
also the best way to kill jobs and lose
tax receipts. The coalition needs to
act: trimming spending is not enough
– Britain also desperately needs a pro-
growth tax policy.
allister.heath@cityam.com
CBI is calling for a 40 per cent minimum vote for a strike to go ahead
CBI hits out at strike laws
INDUSTRIAL ACTION
▲
BY EMMA SADOWSKI
THE CBI is calling for an overhaul of
current strike laws to provide greater
protection to the public and compa-
nies as the threat of industrial action
in the UK continues to rise.
The business lobby group said the
current laws need to reflect the fact
that 85 per cent of private sector
employees are not union members.
It has outlined a number of
changes it said will raise the thresh-
BORIS JOHNSON: WE NEED NEW LAWS
TO STOP WAVE OF STRIKES
The Conservative mayor of London
has called for ministers to raise the
legal threshold for triggering a strike,
threatening to undermine the Prime
Minister’s attempts to avoid con-
frontation with the unions. Writing
in The Daily Telegraph, Mr Johnson
accuses the trade unions, with Labour
support, of pursuing a “nightmarish
return to the politics of the 1980s”
with “wave after wave of debilitating
strikes”. “The government should con-
sider a law insisting on a minimum
50 per cent participation in a strike
ballot,” he writes.
BANKS MOVE TO CALM FEARS OVER
CITY’S FUTURE
Britain’s top banking industry trade
body has attempted to calm fears over
the City’s with a month-long tour of
Europe's largest financial centres.
CITYA.M. 4 OCTOBER 2010
NEWS | IN BRIEF
RBS exposed to Irish debt
Royal Bank of Scotland will be the
biggest loser should the Ireland fail to
repay its debts, it has emerged. The 84
per cent state-owned bank holds a stag-
gering £3.3bn of Irish sovereign debt –
more than any other UK lender – and the
figure is set to rise even further.
Industry sources defended RBS’ posi-
tion, claiming it was normal for a bank
with such developed Irish operations to
be so exposed to government debt. The
cost of bailing out the Irish banking sys-
tem could rise to as much as £43.6bn,
according to finance minister Brian
Lenihan. IRISH CUTS: PAGE 9
Banks may need fresh bailout
Many British banks may need another
state bailout next year and their bor-
rowing requirements could hit £25bn a
month, the New Economics Foundation
(NEF) thinktank will say this morning.
The NEF said it had examined Bank of
England data and concluded that many
UK banks appeared to face a funding
cliff. UK banks have a January 2012
deadline to repay £185bn they bor-
rowed from the Bank of England against
£287bn of illiquid assets.
Picture: GETTY
old for industrial action.
Strikes should only go ahead if 40
per cent of union members vote in
favour of action, according to the CBI,
which has also argued that firms
should be able to continue trading
through a strike period by employing
agency staff.
Other proposals include, extending
the strike notice period to 14 days,
giving employees the option of
whether they want to be represented
by a union and imposing frequent
audits of union memberships.
BANK URGED TO LIFT INTEREST
RATES RATHER THAN PRINT MORE
MONEY
Sir John Gieve, the former deputy gov-
ernor of the Bank of England, has
stepped into the increasingly divided
debate over monetary policy and
urged the Bank not to print more
money. Claims that Britain’s econo-
my was heading into a Japanese-style
slump were far too pessimistic, Sir
John said.
CHINESE LEADER OPTIMISTIC THAT
EURO WILL RECOVER
Wen Jiabao, the Chinese Premier,
pledged support for a stable euro and
said that China would not reduce its
holding of European government
bonds. Mr Wen visited the Parthenon
with the Greek Prime Minister
George Papandreou on a tour of
Athens before next week’s EU-China
summit.
CITYA.M. 4 OCTOBER 2010 News 3

AIG cut Asian IPO

PwC senior partner
Ian Powell believes
China will con-
tribute as much to
group revenues as

to court investors
the UK within the
next five years

Picture:
Micha Theiner
/City A.M.

shares in AIA at a level that would

▲
INSURANCE
BY HARRY BANKS
AIG is understood to have lowered its
valuation for the planned initial pub-
lic offering of its Asian life insurance
business, AIA, to secure a $1bn
(£631.6m) commitment from the
Kuwait Investment Authority and
other cornerstone investors.
American International Group is
thought to have initially aimed to sell
value the company at $35bn to
$37bn, but cut the valuation in order
to get Kuwait’s sovereign wealth fund
on board.
The sovereign wealth fund signed
up to the IPO on the basis that AIA
would be valued between $30bn and
$32bn.
Other big investors, including a
number of Hong Kong tycoons, have
also signed up for cornerstone stakes.

Middle East,
China boost
PwC revenue LONDON CITY
TO CHAMBERY
FROM ONLY
is set to double in size in just two
£59 ONE WAY.
▲

PROFESSIONAL SERVICES
BY VICTORIA BATES
ACCOUNTANCY giant PwC has seen
revenues inch up 1.5 per cent in the
past year, as booming demand from
the emerging markets offset a slow-
down in corporate activity and mar-
gin pressure from an aggressively
competitive pricing environment.
PwC will announce this morning
that gross revenues hit $26.6bn
(£16.8bn) across its global business in
the year to June, a slight increase on
last year at constant exchange rates.
Senior partner Ian Powell said con-
ditions had been pretty tough in the
group’s more developed markets, but
added that PwC capitalised over the
year on its programme of investing in
its emerging markets businesses.
The Australasia and Pacific arm
grew revenues by almost 10 per cent
over the year to $1.29bn, while
Southern and Central America grew
11.3 per cent to $780m and the
Middle East and Africa region by near-
ly 17 per cent to $820m.
Powell said PwC expects China to
contribute as much as the UK to its
revenue pool within the next five
years, while the Middle East practice
years.
Across the globe, PwC’s assurance
services division, which accounts for
roughly half of all its revenues, saw IT’S ALL DOWNHILL
turnover fall 1.3 per cent over the year
due to the competitive pricing envi- FROM THEN ON.
ronment, as the world’s biggest audi-
tors scramble to land large contracts
from firms ever more conscious of
their costs in the post-recession era.
“The pricing of audits has become
ferociously competitive on a global
basis,” Powell said. “Pricing pressure
makes a material impact on a firm of
our size, and it means we need to
invest more and more in other areas
such as consulting and advisory.”
The consulting and advisory arm of
the business grew by 9.4 per cent over
the year to contribute $6.2bn to PwC’s
balance sheet. However, this was off-
set by PwC’s third principle revenue
stream, tax services, which saw rev-
enues fall 2.9 per cent to $7.1bn over
the year due to the slowdown in cor-
porate dealmaking activity and
restructurings.
“The general mood across the
world is that the transaction climate
is improving, but we are still cautious
as it is relatively fragile,” said Powell.

IMF renews its call for bank levy

and a revamp of global regulation
“Although important steps have
▲

FINANCIAL SERVICES
THE International Monetary Fund has
called for a new world system to dis-
mantle troubled financial institutions
and a levy on banks to pay for it.
The IMF’s statement, released last
night, comes ahead of meetings here
this week among fund officials, the
World Bank and leading nations'
finance officials. It urges better inter-
national regulatory cooperation and
stronger supervision.
Two years after the peak of the
worst global financial crisis in genera-
tions, the IMF is seeking to keep
momentum going for substantive
cross-border financial reforms.
been taken like Basel III... much more
remains to be done,” said Jose Vinals, a
senior executive at the fund. “We need
to work together.”
The Basel III accord on bank capital
standards was finalised weeks ago.
Earlier this year, the US approved
sweeping bank and Wall Street
reforms. European nations have been
moving along on reforms of their own.
After massive taxpayer-financed
bailouts in the last crisis, one of the
toughest aspects of the two-year-old
push for a regulatory overhaul has
been finding a way to ensure that tax-
payers don’t get stuck with the bill for
the next crisis.
 4 Conservative Conference
Pensiveness is mood
of the day for Tories
DAVID CROW
POLITICAL EDITOR
THIS shouldn’t be an annus horribilis
for the Tories. For the first time in 13
years, their leader will address the
party conference as Prime Minister.
The long slog of opposition is, at last,
over. And yet things are not quite right.
Maybe the party should have gone
to Brighton or Bournemouth this year
– anywhere but Britain’s “second city”,
Birmingham. The International
Conference Centre is right next door
to Birmingham Edgbaston, exactly the
kind of seat the Tories needed to win
to secure an outright majority in May.
Their failure to win in this constituen-
cy – and scores of others like it – cost
them the election. It serves as a painful
reminder of the fact that the
Conservatives failed to seal the deal
with the electorate.
The mood in the conference halls
reflects this. As one would expect for
an era of austerity, excess has been
banned. Deputy party chairman
Michael Fallon has, for the second year
in a row, outlawed champagne.
Pensiveness, not celebration, is the
watchword.
Many in the Conservative party
think David Cameron is glad the elec-
tion delivered a hung parliament,
rather than outright Tory rule. The
coalition has allowed him to drag the
Tories to the centre while slaying the
right-wing dragons that made the
party so unelectable, or so his critics
allege. This is only partly true. Even
Cameron’s biggest critics accept that
his best trait is adaptability. He might
not have wanted to lead a coalition
government but he recognises its
advantages. Policies have to be agreed
by both the Conservatives and the
Liberal Democrats, meaning they are
examined more rigorously; by the
time they are presented to the public,
they should be watertight. Collective
cabinet responsibility, rather than the
autocratic decision making of the New
Labour years, is back. Two parties, not
one, will have to bear the brunt of pub-
lic disquiet over the most ambitious
fiscal tightening in Britain’s peacetime
history.
Nor have the Lib Dems stopped the
Tory party from implementing some
CITYA.M. 4 OCTOBER 2010
of its more radical policy proposals.
Iain Duncan Smith’s welfare reform
proposals, which will ensure that work
is rewarded in the benefits system,
have been rubber-stamped, or just
about. Sadly, the Treasury has insisted
the reforms are phased in over two par-
liaments – or ten years – meaning they
are more likely to hit the brakes when
a new welfare secretary or govern-
ment takes the reins.
Similarly, Michael Gove’s plan to roll
out academies and free schools has got
the go-ahead, even if vested interests in
local authorities are trying to stop the
proposals in their tracks. As Cameron-
friendly Tories constantly point out
with glee, their programme for gov-
ernment has emerged from the coali-
tion negotiations relatively unscathed.
There are, of course, major sources
of anxiety. On defence spending, the
Conservatives are beginning to think
the unthinkable, much to the chagrin
of rank-and-file supporters.
Increasingly, it looks as though just
one new aircraft carrier will be built,
meaning Britain will only be able to
guard its own waters. In the words of David Cameron
the late poet Philip Larkin, that means will address con-
places we “guarded or kept orderly, ference as Prime
must guard themselves, or keep them- Minister for the
selves orderly” because “we want the first time.
money for ourselves at home”. Picture: GETTY
CITYA.M. 4 OCTOBER 2010
Middle class
benefits set
to be slashed
as cuts begin
CONSERVATIVE
CONFERENCE
BY DAVID CROW IN BIRMINGHAM
THE Prime Minister yesterday hinted
that “middle class” benefits like child
support could be scaled back to pay
for the biggest overhaul of the welfare
state in 40 years.
David Cameron signalled that
some universal payouts wouldn’t be
“affordable” if the government pur-
sues root-and-branch reform of the
benefits system.
Cameron’s comments come after
the Treasury gave Ian Duncan Smith,
the work and pensions secretary, the
green light to announce massive
changes to benefits for the unem-
ployed and low-paid in his conference
speech today.
Duncan Smith will announce a
new “universal credit” to replace the
myriad of benefits that are currently
available, including housing benefit
and jobseekers’ allowance.
Crucially, the credit will eventually
be available to those working in low
income jobs to ensure they don’t lose
out when they move off of benefits
and into employment.
But chancellor George Osborne has
demanded savings to the overall wel-
fare bill to fund the upfront cost of
the proposals, expected to total some
£3bn. Although the plans will ulti-
mately lead to a lower claimant count
Health and safety rules to
be culled to save money
▲
CONSERVATIVE CONFERENCE
THE government yesterday unveiled
plans to scrap health and safety legis-
lation that costs firms billions of
pounds a year.
Healthy and safety tsar Lord Young,
the special adviser that helped Sir
Keith Joseph usher in privatisation in
1979, said he would “sweep away tick-
box bureaucracy that undermines
personal responsibility”.
And he announced plans to crack
down on so-called “ambulance chas-
er” lawyers that work on a “no-win
no-fee basis” for people who have
been injured in an accident.
“As a onetime lawyer, I am today
ashamed of the depths some in the
law have stooped to, with their
aggressive ‘no-win, no-fee’ advertis-
ing,” he said.
“What a temptation this provides
to someone watching afternoon tele-
vision. This is not Access to Justice –
this is incitement to litigate. And it
must stop.”
According to the Forum of Private
Conservative Conference 5
CONSERVATIVE PARTY CONFERENCE AGENDA 2010
Sunday 3rd October - People Power: Lord Freud 15.45 – 17.00 – Tackling Global Poverty
14.00 – 15.15 – A Strong Start Andrew Mitchell
Baroness Sayeeda Warsi 15.45 – 17.00 – Environment and Climate
Change Wednesday 6th October – Putting Britain First:
15.30 – 17.00 – People Power Caroline Spelman 10.00 – 11.00 – Defence and
and the Big Society Oliver Letwin Foreign Affairs
Eric Pickles Liam Fox
Francis Maude Tuesday 5th October – Tackling the Causes of Timothy Kirkhope
William Hague Poverty: William Hague
10.00 – 11.15 – Public Services
Monday 4th October - Green Growth: Andrew Lansley 11.00 – 11.25 – Olympics
10.00 – 11.15 – 21st Century Economy Michael Gove Jeremy Hunt
Philip Hammond
David Willetts 11.30 – 12.30 – Cutting Crime, 11.30 – 12.25 –Devolved Nations and New
Boris Johnson Reforming Justice. Politics
Ken Clarke Cheryl Gillan
11.30 – 12.30 – The Economy Theresa May Owen Paterson
George Osborne Nick Bourne
14.30 – 15.30 – Reforming Annabel Goldie
14.30 – 15.30 – Get Britain Welfare Sir George Young
Working Iain Duncan Smith
Chris Grayling 14.30 – 15.30 – Prime Minister’s speech
and less fraud, it will be several years
before any savings to the £194bn-a-
year welfare bill feed through.
Duncan Smith has also agreed to
phase in the changes over two parlia-
ments to save on the initial outlay.
The unemployed and economically
inactive will be moved onto the uni-
versal credit in this parliament, while
the low-paid will be transferred from
2015 onwards.
The delay will come as a blow for
the work and pensions secretary, as
the plans are more likely to be
shelved if the Tories lose the next elec-
tion or Duncan Smith is replaced.
Meanwhile, the Treasury has
drawn up plans to axe child benefit
for parents with children over 16.
Currently, the benefit is paid to all
parents with children that are 18 or
under.
According to internal Treasury pro-
jections, scrapping the payment of up
to £1,055 for 2m parents with
teenagers aged 17 and over could save
around £2bn.
Welfare reform has been a major
source of tension in the coalition,
with the Treasury claiming that
Duncan Smith’s plans are unafford-
able and undeliverable. But yester-
day’s compromise suggests that
Osborne and Duncan Smith have
buried the hatchet. “Iain had to take
George on an intellectual journey
and prove that the reforms were
affordable,” an aide to Duncan Smith
said yesterday.
Business, small and medium-sized
companies spend over £2bn-a-year to
comply with existing health and safe-
ty guidelines.
However, it is not clear how much
power Cameron actually has to roll
back health and safety legislation, as
many of the laws are dictated by EU
directives.
• Meanwhile David Cameron
appeared to back up defence secretary
Liam Fox yesterday when he said at
least one new aircraft carrier will get
the thumbs up. Fox had written a furi-
ous letter to Cameron warning against
cuts to the defence budget. However,
the ministry of defence will only buy
40 new fighter jets instead of the 140
previously expected.
ROGER CARR: P6
Health and safety Tsar
Lord Young, a former
lawyer, says he is
ashamed by how low
some lawyers stoop
 6 News
Centrica chairman Carr mulls
role advising on defence cuts
▲
POLITICS
CENTRICA chairman Roger Carr has
been approached by the government
about taking a role on the board of
the Ministry of Defence (MoD), as part
of its plan to appoint business leaders
to oversee efficiency drives across all
Whitehall departments.
A number of business grandees
have already been sounded out about
Roger Carr is understood to be receptive to the idea of a role at the MoD Picture: REX the roles by Lord Browne, the former
BP boss appointed earlier this year to
spearhead the initiative, though talks
are still at a preliminary stage.
Carr, who as the former chairman
of Cadbury led the chocolatier’s
defence against hostile bidder Kraft
earlier this year, is understood to be
receptive in principle to the idea of
taking up the senior independent
director post at the MoD, believing
the role to be a highly important one
as ever-controversial cuts to the
Premier Foods
in talks to sell
Quorn brand
▲
CONSUMER
BY MARION DAKERS
PREMIER Foods confirmed yesterday
that it had received an approach for its
meat-free brand Quorn.
The UK’s largest food producer,
whose brands include Hovis bread,
Branston Pickle and Bisto gravy, prom-
ised in August to reduce its £1.4bn
debt pile by £100m each year.
The FTSE 250-listed group refused to
name the suitor or asking price for
Quorn yesterday, and said there was
no guarantee of a sale at this stage.
“As stated at the time of its interim
results on 4 August, the board remains
open minded about disposals, provid-
ed they deliver shareholder value and
accelerate the reduction of average net
debt/EBITDA,” the firm said.
Premier has been grappling with a
mounting debt pile recently, having
closed its costly final salary pension
scheme in August with a black hole of
around £431m. Chief executive Robert
Schofield, who mounted a £400m debt
restructuring and cash call in 2009,
said after the firm’s latest results the
Premier was ready to sell assets.
“It takes us a few years to get to our
target of cutting debt organically.
John Laing prepares to float its
assets via a new investment fund
▲
CONSTRUCTION
CONSTRUCTION company John Laing
is believed to be preparing to float
some of its assets on the London
Stock Exchange.
Laing, owned by asset manager
Henderson Group, will spin out some
of its assets into a new fund by year-
end, according to the Infrastructure
Journal, which cited a source close to
the deal.
The report did not elaborate on the
asset size or the reason why John
Laing is seeking to raise funds. It said
investment bank JP Morgan Cazenove
is adviser to the deal.
Henderson declined to comment,
CITYA.M. 4 OCTOBER 2010
defence budget start to bite.
However, he and Browne have yet
to meet formally to discuss what such
a position would entail, a process
which will take place in the coming
months.
Other business leaders approached
about similar board director roles
include GlaxoSmithKline chairman
Sir Chris Gent, though concerns over
potential conflicts of interest are said
to have derailed his appointment.
Therefore we are open minded about
disposals if they accelerate that jour-
ney,” he told reporters in August.
Fund managers such as Warburg
Pincus, Franklin Templeton and
Paulson have taken large stakes in the
company since a share placing in
March 2009. Analysts including
Investec have published notes warning
that the new investors will soon
demand to see value for money.
Meanwhile, Premier’s new chair-
man Ronnie Bell, a former boss of
Kraft in Europe, takes over from David
Kappler today, while ex-ICI boss
Charles Miller Smith moves up to
become deputy chairman. Smith was
put forward to the board by Warburg
Pincus in June 2009.
ANALYSIS l Premier Foods
p 16.21
22 1 Oct
20
18
16
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
while John Laing was unavailable for
comment.
A source familiar with the situa-
tion said the fund to be floated does
not include assets of the Henderson
PFI Secondary Fund II, which as of
March this year had lost 60 per cent
of its value.
Investors in this infrastructure
fund, including pension funds, have
demanded compensation for the loss-
es and threatened to take Henderson
to court if it fails to do so.
Henderson acquired John Laing for
£1bn in 2006 after trumping rival bid-
der Allianz with an offer of 405p a
share. It has a portfolio of PFI and
public private partnership projects.
 8 News
GE closes in
on UK oil firm
with top bid
▲
OIL AND GAS
BY EMMA SADOWSKI
GENERAL ELECTRIC (GE) is plotting
an £800m-plus takeover of British oil
services group Wellstream, it
emerged over the weekend.
The US based conglomerate is
thought to have been the first bidder
for Wellstream, which makes special-
ist pipes used in offshore drilling.
Late last month, Wellstream con-
firmed that it had received several
bid approaches but would not dis-
close the name of the suitors.
The group said it had “received a
number of preliminary approaches
regarding a possible offer for the com-
pany” but there was “no certainty
that an acceptable offer will ultimate-
ly be made”.
It is understood that GE’s approach
was made through its oil services
arm, Vetco Gray, which it bought for
$1.9bn (£1.2bn) in 2007.
Although a number of other bid-
ders have expressed interest, it is
thought that GE is the leading con-
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CITYA.M. 4 OCTOBER 2010
tender.
If the deal goes through, it could (Left to right) Barclays’ Marcus Agius,
stand as the largest for the company Lord Mayor Nick Anstee and FSA chief
in the UK since 2007 when it bought Hector Sants will speak at the summit
medical equipment firm, Amersham,
Banking bosses call on the City to work
for £5.7bn.
Shares in Wellstream, which was
floated three years ago by Candover,
have skyrocketed since last month’s
together to restore industry reputation
takeover news, climbing by 29 per
cent and valuing the company at
£778m.
It currently employs 1,000 people,
while GE employs more than 19,000
people in Britain.
BANKING Agius, Lazard chairman Ken Costa, to take an active role in restoring the
▲
ANALYSIS l Wellstream 773.50 BY VICTORIA BATES RBS chairman Sir Philip Hampton industry’s image by collectively find-
1 Oct and Sir Win Bischoff. Figures from ing solutions to address problems
800 p
LEADERS of the UK banking industry the areas of regulation, politics and with its corporate culture, remunera-
are this morning set to gather at the religion are also set to attend, includ- tion policy and attitude towards cus-
700
Mansion House for a summit to dis- ing Financial Services Authority chief tomers.
cuss ways to help the City rebuild executive Hector Sants, TheCityUK’s “We have a big job to do,” Anstee
600 public trust in the industry following Dame Clara Furse, former Treasury will tell the delegates. “To guarantee
the excesses and risk-taking of the Select Committee chairman Lord that unethical behaviour is inexcus-
500 pre-crisis years. McFall and Paul Tucker, deputy gover- able and that reckless risk taking is
Lord Mayor Nick Anstee will be nor for financial stability at the Bank not acceptable and will be treated as
joined at the event by banking scions of England. such, so that our reputation is unas-
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep such as Barclays chairman Marcus The attendees will call on the City sailable.”
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CITYA.M. 4 OCTOBER 2010 News 9

Irish government
Greece’s premier
George
Papandreou shows
Chinese counter-
part Wen Jiabao

targets €4bn cuts

around the ancient
sites of Athens
ahead of a key
China- EU
summit.

Picture: GETTY
November after estimating the cost of

▲
WORLD ECONOMY
BY HARRY BANKS
IRELAND’S government is understood
to be targeting target savings of €4bn
(£3.5bn) in the 2011 budget as it seeks
to get its fiscal crisis under control.
Finance minister Brian Lenihan said
this week he would need to go above
an initial target of €3bn in savings
from next year’s budget and would
unveil a four-year fiscal plan in
saving the banking system could top
€50bn.
Citing unnamed sources, The
Sunday Business Post newspaper
reported Lenihan would need a €4bn
package for the 2011 plan, which will
be unveiled on 7 December. The
Sunday Tribune, also citing unnamed
sources, said savings of up to €4.5bn
would be needed in Ireland’s fourth
austerity budget in two years.

Chinese head
backs a stable
THERE’S FLAT.
euro currency
ally conservative about investing in THEN THERE’S
▲

WORLD ECONOMY
BY HARRY BANKS foreign financial markets and the

CHINA pledged yesterday to support a

stable euro and not reduce its hold-
ings of European government bonds
in an effort to deflect criticism of its
foreign exchange policy ahead of an
EU-China summit this week.
China, at loggerheads with the US
over the yuan and likely to face similar
complaints during his tour of
European countries this week, empha-
sised its willingness to cooperate with
the 27-nation EU..
“I have made clear that China sup-
ports a stable euro,” Chinese Premier
Wen Jiabao said during a visit to
Greece at the start of a one-week
European tour. “We will not reduce
the holdings of European bonds in our
foreign exchange portfolio,” he added.
Wen, who offered on Saturday to
buy Greek government bonds when
debt-laden Athens resumes issuing,
said he was glad Greece was starting to
emerge from the shadows of its debt
crisis.
China has said it needs to diversify
its foreign currency holdings and has
bought Spanish government bonds.
Chinese state entities have been gener-
Chinese government faces domestic
political criticism over losses they
incurred during the global financial
crisis.
Policy moves by the Chinese govern-
180º FLAT.
ment to free the yuan from a dollar
peg will help the Chinese currency
rise, Dominique Strauss-Kahn, the ®
head of the IMF said on Saturday. BusinessFirst . 5 times daily
Wen and his Greek counterpart
George Papandreou said in a joint
statement the world's nations need to Heathrow to New York with 180º flat bed seats.
coordinate economic policies for glob-
al recovery to find a sure footing.. In BusinessFirst, you’ll find that our flat beds really are 180º flat, unlike those you’ll find
“Global economic recovery is a jour-
on some other airlines. We know that a little difference makes all the difference.
ney with many turns and a full exit
from it requires joint efforts,” Wen From the larger personal video screen with On Demand entertainment to
said. He made no comments on the gourmet food and fine wine, and an even more convenient flight
yuan. On Saturday he said he was will- schedule, you’ll find the difference is in the details. Welcome
ing to work with the EU to confront to BusinessFirst. Flying from Heathrow to Newark Liberty
the financial crisis and reform the International Airport, our New York area hub.
international financial system. For reservations and information,
Ahead of a China-EU summit on 6 go to continental.com
October, Wen urged the block to recog-
nise China as a market economy, a sta-
tus that would make it less vulnerable
to anti-dumping charges under WTO
rules. In exchange, China offered to
boost copyright protection and widen
bilateral trade.

Germany’s Hypo Real Estate puts

€173bn of assets into a bad bank
measures from the government, HRE
▲

FINANCIAL SERVICES
GERMANY’S Hypo Real Estate complet-
ed its transfer of non-strategic and
risky assets to a “bad bank” as the
nationalised lender restructures in the
wake of the financial crisis.
Hypo Real Estate (HRE) transferred
loans and securities worth a nominal
€173bn (£150.8bn) to a work-out insti-
tution called FMS Wertmanagement,
HRE said in a statement yesterday,
adding that this was the largest trans-
fer of its kind in Germany to date.
Following the transfer, the remain-
ing core or “good” bank, called pbb
Deutsche Pfandbriefbank, will no
longer depend on liquidity life-support
said. “The transfer of assets to FMS
Wertmanagement represents the sin-
gle most important milestone in
realigning the group,” HRE’s chief
executive Manuela Better said in the
statement. “Our new core bank, pbb
Deutsche Pfandbriefbank, has
retained those assets that match its
strategic focus and we will concentrate
on writing new business in our
European core markets,” she said.
HRE’s business model combining
property finance with investment
banking came unstuck in the finan-
cial crisis, forcing the lender to turn to
Berlin for more than €100bn in assis-
Flat bed seats may not be available in the event of aircraft substitution. Fifth daily service begins on 31 October, 2010. © 2010 Continental Airlines. Inc.
tance.
 The Capitalist
10 CITYA.M. 4 OCTOBER 2010
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com

HEDGIE IAN “One of the

first things
WACE TAKES for Wace to
get stuck into
CHAIRMAN is finding a
JOB AT ARK new venue
for next The Facebook movie is top at the box office

THE GLAMOROUS world of hedge fund
philanthropy had a shuffle at the top over
the weekend, as Ian Wace – co-founder of
Marshall Wace – took over from hedgie
“godfather” Stanley Fink as chairman of
Arki Busson’s charity, Absolute Return for
Kids (ARK).
Wace will now be tasked with the dual
responsibilities of overseeing ARK’s work
– including its new maternal health pro-
gramme in Zimbabwe and a rotavirus vac-
cination programme in Zambia – and
raising as much dosh as possible from his
moneyed industry colleagues.
Top of the latter agenda, of course, is
ARK’s annual gala dinner next summer,
the most extravagant charity event of the
social calendar. This year, the event – held
in the old Eurostar terminal at Waterloo
for the second year running and featuring
a live performance by the Killers – drew
the likes of Queen Rania of Jordan, mod-
els Eva Herzigova and Sophie Dahl and
actor Kevin Spacey to rub shoulders with
the financiers present, including GLG co-
founder Pierre Lagrange, Moore Capital’s
Greg Coffey and Icap boss Michael
Spencer.
This coming year’s event will need
to be doubly special in order to mark
ARK’s tenth anniversary – and I hear
that a third outing at Waterloo has
already been ruled out, leaving Wace to
lead the search for an even more
unique and spectacular venue.
No tall order, then.
BABY BOND BOOM
An interesting note pops into
The Capitalist’s inbox from
Schroders’ senior fixed income
portfolio manager David Harris,
who reckons that the “baby
boomer” generation’s lifestyle
preferences are currently heavi-
ly influencing the bond market.
Apparently, following periods
of very loose Fed policy in the
past, baby boomers have invest-
ed their cheap money heavily
into particular asset classes,
year’s ARK which took $19m last weekend in the
highest grossing debut weekend of direc-
gala dinner” tor Oliver Stone’s career.
This week, Wall Street 2 was pushed in
rather undignified fashion into third
place, with $10.1m, by “Legend of the
Guardians: The Owls of Ga’Hoole” – a
good-vs-evil family romp featuring scores
of wide-eyed owl soldiers.
depending on their age – first goods and Above: Ian Wace exception, with the debut of “The Social
services in the late 1970s; then into stocks arrives at this year’s Network”, following the story of billion-
in the late 1990s; then into housing in the ARK gala dinner aire Facebook founder Mark Zuckerberg.
mid-2000s. The movie raked in $23m over its open-
And now, as they crave stability on the Pictures: ing weekend, according to preliminary
approach to retirement, the boomers are GETTY, Micha estimates yesterday – earning it the num-
piling into bonds. “Cyclical forces will nor- Theiner ber one spot at the US and Canadian box
mally dominate other factors, however the /City A.M. office.
collective force of the boomer investment For comparison, that’s quite a bit
can keep yields lower for longer than stronger than the opening of the second
might otherwise be the case,” Harris rea- Wall Street film, “Money Never Sleeps”,
sons. Investors, take note.
BILL OF THE WEEK
CLEVER CLOGS
Wannabe City boffins should start put-
ting their heads together now, ahead
of the upcoming annual Brain Game,
in aid of St John Ambulance.
This year’s quiz will be hosted by
funnyman David Mitchell, the star of
Peep Show, who will lead the teams
in eight rounds of questions on
topics ranging from history
to literature and art. KPMG
are the ones to watch, since
they triumphed last year at
an event which raised
£52,000 for charity. (This
year’s is on 20 October at OFF to Primrose Hill this week for lunch at Odette’s, setting our din-
the Guildhall and costs ers back £1,344.
£2,010 for a table of ten. For They began with gin martinis, cocktails and Dom Perignon cham-
more details email pagne, before moving onto the food – scallops, pigeon and terrine to
events@nhq.sja.org.uk start, followed by salt lamb, turbot, halibut and braised pork, then
decadent cheeses, chocolate fondant, cheesecake and lemon curd
for pud.
MOVIE STAR Accompanying their gastronomic delights were a couple of bottles
of Corton Charlemagne and another of Chateau Talbot Grand Cru
It’s been a busy time over the
past couple of weeks for busi- Classe, as well as two bottles of Royal Tokaji Blue Label dessert
ness-related Hollywood film ven- wine, originating from north eastern Hungary, and some Welsh
tures, and this weekend was no Penderyn whiskies.

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CITYA.M. 4 OCTOBER 2010
Banks ready
to lend for big
property buys
▲
PROPERTY
BY MARION DAKERS
MORE banks were willing to help
fund large UK real estate purchases in
the last six months than in the previ-
ous year, though many commercial
property deals are being done with-
out the need for debt, according to
research out today.
Twelve banks have lent at least
£100m each in the period, in typical
loan sizes of above £20m, said proper-
ty advisor Savills.
Nine of these lenders are based in
Germany, including Deutsche Bank.
Eurohypo and DG Hyp. Only Barclays,
RBS and Santander stand out as non-
German large property lenders.
Savills said that banks from other
countries are instead teaming up to
provide large-scale loans for property
purchases. A syndicate of French
banks and ING helped fund the
Carlyle Group’s £671m purchase of
six properties in the White Tower
portfolio in July.
Many other lenders with existing
property loan books have worked
with existing customers to restruc-
ture existing loans, in particular
HSBC and Lloyds Banking Group, said
Savills.
Savills’ head of UK valuation
William Newsom said: “In the com-
mercial property investment market
there has been a reduced volume of
properties coming to the market, and
often those prime assets that lenders
would like to lend against are being
snapped up by non-debt-backed pur-
chasers.
“The transaction markets are being
dominated by equity players, leading
to a scarcity of opportunities for
lenders.”
Felix Rabeneck, director of central
London investment, said: “The mar-
ket this year has been largely driven
by equity buyers who are in some
cases favoured by vendors given the
perception that debt is difficult to
secure with a lengthy approval
process. We estimate that of the ten
largest deals in the City this year, six
have been equity driven.”
Bookseller Foyles has signed up for One New Change
Picture: Micha Theiner/City A.M.
News 11
Foyles to open
a shop in One
New Change
PROPERTY
▲
BOOKSELLER Foyles is to open its
first branch in the City after signing
for space in the One New Change
shopping centre near St Paul’s
Cathedral.
The book shop’s fifth branch in
London will open on 28 October, the
same day as the retail centre is set to
launch.
Land Securities, developer of the
mall on Cheapside, is also close to
signing up an occupant for its
rooftop restaurant space.
Gordon Ramsey and Jamie Oliver
are both understood to have consid-
ered the rooftop terrace, but have
both taken space inside the develop-
ment instead. The terrace overlook-
ing the cathedral will open to the
public in November.
Talks are also ongoing between
Land Securities and several compa-
nies for 210,000 square feet of avail-
able office space. US law firm K&L
Gates reserved 120,000 square feet,
around 35 per cent of the total office
space, in 2007.
Martha Carson, head of marketing
at One New Change, said: “One New
Change is set to bring a whole new
shopping and dining experience to
the City of London – something we
are delighted Foyles will be a part
of.”
 12 News
If
lif e
Big banks top
High Court
g i ve s appearances
▲
LEGAL
BY EMMA SADOWSKI
THE UK’S largest four banks were
repeatedly in court last year as the
number of High Court cases involving
yo u
FTSE 100 companies jumped by 16 per
cent.
Lloyds Banking Group, Barclays,
the Royal Bank of Scotland (RBS) and
HSBC collectively made up 43 per
cent of all High Court appearances by
the UK’s largest companies, according
to a yearly survey by legal services
group Sweet & Maxwell.
Of the banks, Lloyds topped the list
for the highest number of cases seen
by a judge after it went to court 24
times in the year ending 30 June
2010.
FTSE 100 companies in the finan-
cial services sector, which make up 18
per cent of the elite group, accounted
for over 58 per cent of appearances in
front of the High Court.
Sweet & Maxwell said the rising
Taylor Wessing bolsters financial
disputes group with BLG poach
lem o n s
▲
LEGAL
CITY law firm Taylor Wessing has bol-
stered its financial disputes practice
after poaching Barlow Lyde &
Gilbert’s (BLG) head of financial serv-
ices.
Tim Strong, who has led BLG’s
financial services practice since
October last year, will join Taylor
Wessing within the coming months
after more than a decade with the
insurance-based firm.
His departure from BLG is one of a
number of exits by partners from the
financial services practice within the
last year after regulation expert Ian
Mason recently left for Baker &
FTSE-100 COMPANIES IN HIGH COURTS
Top 10 July 1 2009 to
June 30 2010
Lloyds Banking Group 24
Barclays 22
Royal Bank of Scotland 22
HSBC 9
Aviva 8
Standard Life 6
British Airways 6
AMEC 5
Royal Dutch Shell 5
number of court disputes involving
companies within the financial serv-
ices sector, including insurance com-
panies, is connected to the fallout
from the economic crisis.
Meanwhile, the total number of
High Court commercial disputes
involving a FTSE 100 company are up
on last year after 179 cases were held
before a judge, marking a rise from
the same period last year when 154
rows hit the courts.
However, the rise in litigation sug-
gests that the flood of commercial
disputes following the economic
downturn has yet to peak, said Sweet
& Maxwell.
And that number is expected to
rise, according to the legal services
group, as claimants have a six-year
window to launch a claim.
Other companies to dominate the
courts include British Airways, man-
agement consultancy group, AMEC,
Royal Dutch Shell and British Sky
Broadcasting.
McKenzie.
Strong will join Taylor Wessing’s
City base and the firm’s 104-partner
commercial disputes group.
Shane Gleghorn at Taylor Wessing
said Strong’s reputation of acting in
significant financial disputes and reg-
ulation investigations will help the
firm in its strategy to grow the prac-
tice.
Strong recently advised a private
equity house on a £250m dispute
with lenders over the acquisition
financing for a stake in a European
bank.
BLG’s senior partner Simon Konsta
said he hoped it “all goes well for Tim
at Taylor Wessing”.
CITYA.M. 4 OCTOBER 2010 News 13

SocGen rogue trader Kerviel to

get his day of reckoning in court
AIM delistings soar as M&A
guilty of charges of breach of trust, deals in the market increase
▲

COURTS
A PARIS judge will tomorrow decide
whether former trader Jerome Kerviel
should be punished for his freewheel-
computer abuse and forgery.
At the end of Kerviel’s high-profile
three-week trial in June, his defence
team pleaded guilty to computer Young. finances to pursue a ‘buy and build’

ing market bets that brought French
bank Societe Generale to the brink of
collapse in 2008.
The 33-year-old ex-trader, who now
works for a technology consultancy,
risks five years in prison and a
€375,000 (£323,000) fine if found
abuse but rejected the other charges.
The public prosecutor has recom-
mended Kerviel serve at least four
years behind bars, with a fifth year sus-
pended. Tuesday’s verdict is critical for
SocGen, which has worked hard to
clean up its image since the scandal.
▲
STOCK EXCHANGE
BY MARION DAKERS
THE NUMBER of companies removing
themselves from the AIM stock mar-
ket rose by 25 per cent in the last
quarter to 45, according to research
out today.
Of the 45 firms that delisted, 20
did so because of merger and acquisi-
tions, said law firm Trowers &
Hamlins and accountant UHY Hacker
M&A activity now represents 44 per
cent of delistings, up from 33 per cent
in the second quarter. In total, the
number of companies leaving has
risen from 36 to 45.
Eight firms left because of insol-
vency, which is down slightly from
the 10 who did so in the first three
months of the year.
Charles Wilson, partner at Trowers
& Hamlins, said: “Businesses with the
policy clearly believe conditions are
now stable enough for them to do so.
“The levelling out of delistings over
the last three quarters, once M&A
activity is factored out, suggests some
companies are in fact being acquired
before they are forced to delist
because of financial stress.”
Meanwhile, the number of new
entrants to the AIM rose from 13 to 16
in the quarter.

BHP Billiton chief Marius Kloppers Picture: Micha Theiner/City A.M.

Report mulls
impact of BHP
bid for Potash
tion over the emergence of a Chinese
▲

M&A
BY VICTORIA BATES
AN INDEPENDENT report on the
impact of a takeover of Canada’s
PotashCorp will today reignite the
country’s debate over the implica-
tions of such a move, as expectations
of a Chinese-led counterbid to BHP
Billiton’s $39bn (£24.7bn) offer begin
to dwindle.
The report by the Conference Board
of Canada will make no recommenda-
tions, though it will assess the respec-
tive implications of a bid from a large
corporate like BHP, a state offer from
China, and a takeover by an invest-
ment board or sovereign fund.
It comes as Canadian authorities
continue to mull over a decision on
whether a takeover of the fertiliser
giant would be of “net benefit to
Canada” – a key requirement under
the country’s Investment Act.
There has been widespread specula-
bid since BHP launched its hostile
offer in August, though reports over
the weekend suggested interest from
the East is cooling. China’s govern-
ment is thought to be unwilling to
put up more than around a quarter of
the funds needed to block BHP’s $130-
a-share offer, while attempts by state
chemical firm Sinochem to court
potential co-investors are said to have
fallen on unreceptive ears.
On Friday, BHP filed a motion in a
Chicago court, asking it to dismiss a
lawsuit brought by PotashCorp over a
week ago. PotashCorp claimed BHP
fed the market misleading informa-
tion in order to drive down potash
prices and allow it to make a low-ball
offer. But BHP said the complaint
“offers only implausible, uncorrobo-
rated and largely irrelevant specula-
tion”, adding that shareholders have
access to all the relevant information
to make a decision on the deal.
 14 News
North Face fuels sales climb
as Vanity Fair eyes expansion
▲
RETAIL
BY JOHN DUNNE
VANITY Fair, whose brands include
North Face and Vans, is targeting
new stores in the UK to build on a 55
per cent first half rise in earnings.
The company made $274.4m
(£174m) with strong growth in Asian
markets and record revenues of
$3.3bn.
Patrik Frisk, president of outdoor brands at Vanity Fair, has big plans for the UK North Face, which consists of out-
door high performance clothing, is
continuing to drive sales, with skate
fashion brand Vans also reporting a
24 per cent jump in sales. Meanwhile
earnings per share rose 55 per cent to
$2.47.
President of outdoor bands Patrik
Frisk said that the company has man-
aged to prosper despite the global
downturn and is looking at opening
more stores in the UK.
“We have seen our brands prove
Retailers go
head to head
with results
▲
RETAIL
BY MARION DAKERS
SUPERMARKETS are set for a show-
down this week as Tesco, J Sainsbury
and Marks & Spencer post interim
results.
Smaller retailers Ted Baker,
Halfords and Greggs are also due
results, in a week that will indicate
how the High Street has fared since
the general election.
Tesco is expected to post a 10 per
cent rise in first-half pre-tax profit on
Tuesday, as growth in its Asian opera-
tions offsets sluggish sales in the UK.
Analysts expect Tesco to have
improved since the start of the year.
Evolution Securities predicted an 8.5
per cent rise in total sales last week
but warned of slow growth in the UK
thanks to lagging petrol prices and a
lack of new branches.
Sainsbury’s, Britain’s third-biggest
supermarket group behind Tesco and
Asda, is tipped to show stronger UK
growth in a second-quarter sales
update on Wednesday, helped by its
strength in the more affluent south.
Wealthier shoppers are also likely
to prove a fillip for clothing, food and
Ikea announces profits for first
time, promises to be more open
▲
RETAIL
SWEDISH furniture retailer Ikea has
released full-year trading results for
the first time announcing net profit
increased 11.3 per cent to €2.5bn
(£2.2bn) for the year to 31 August.
The store said group sales for 2009
increased by 1.4 per cent to €21.8bn,
equivalent to 3.1 per cent growth,
despite what it called “difficult”
external economic circumstances
It said while rivals suffered a sharp
decline in sales it had benefited from
customers searching for cheaper fur-
niture and had opened 15 new stores.
Ikea said it also planned to move into
new markets, including India.
CITYA.M. 4 OCTOBER 2010
very resilient. The quality we offer at
the price has allowed us to keep on
expanding.“
“We are doing well in the UK and
want to have the brands in more
stores as there is demand.”
Traditionally North Face has been
associated with mountain climbing,
but the brand is now worn for casual-
wear as well as sport. “In New York
everyone wears this stuff, it’s every-
where,” he said.
homewares chain Marks & Spencer
when it publishes second-quarter
sales figures on Thursday.
The group is expected to post a
fourth consecutive rise in underlying
quarterly sales, though analysts will
be keen for any news on profit mar-
gins amid rising cotton, wage and
freight prices.
Sales at UK stores open over a year
are tipped to rise between 1.3 and 4.6
per cent, according to a company poll
of 16 analysts, compared with first-
quarter growth of 3.6 per cent.
Bakery chain Greggs is expected to
post small first-half improvements on
Wednesday, making up for the rise in
wheat prices with some sales growth.
Analysts expect bicycles-to-car parts
chain Halfords to report a drop in sec-
ond-quarter underlying sales of 4.0 to
4.6 per cent on Thursday, exacerbated
by teething problems at a new distri-
bution depot, though they also think
cost cuts will keep it on track to meet
full-year profit expectations.
Fashion chain Ted Baker is set to
announce strong sales over spring
and summer on Thursday, after post-
ing its first growth in two years at the
start of 2010.
Group sales so far for this year
increased by 7.7 per cent to €23.1bn.
Ikea said profits would be announced
at a later date.
The retailer’s results are contained
within a new leaflet called “Welcome
Inside” and it is believed they are
part of reforms designed to dispel
allegations of secrecy by chief execu-
tive Mikael Ohlsson, who took over
from Anders Dahlvig last year.
Dahlvig had been in charge of Ikea
for a decade.
The leaflet added net income fluc-
tuated between 10 and 13 per cent of
revenue in the past 10 years. It added
figures would be published every
year from now on.
CITYA.M. 4 OCTOBER 2010 News 15

MPC split points to uncertainty about rates

recommended last week that more
stimulus be pumped into the econo-
my to avoid a Japan-style lost decade.
In stark contrast, hawk Andrew
Sentance still argues that no further
stimulus is needed… and then you
have all the other MPC members
somewhere in the middle.
CNBC COMMENT Ian Harnett, a European Strategist
LOUISA BOJESEN from Absolute Strategy Research, says
the split within the MPC highlights a
deep uncertainty at the heart of mon-
sides of the Atlantic will seek to cre-
ate a greater certainty about the
framework used to solve internal and
external debate. If more of a defini-
tion on normalisation were to be
introduced (what policy makers actu-
ally are looking for), then chances are
it could accommodate views by both
Sentance and Posen.
Harnett points out there seems to
be a nominal GDP target (early last
year, Bank of England (BoE) Deputy
that the BoE isn’t looking at inflation
at all at the moment. In other words,
the BoE hasn’t recapitalised the capi-
tal markets to get bankers rich; it has
done so to get people back to work.
For the remainder of the year, and
once we get more clarity on mone-
tary policy, Harnett thinks we’ll see
the FTSE 100 taking on its April peaks
of around 5,800. He says we’re still in
an environment where you want to
re-risk rather than de-risk, and he rec-
Alpha Limited, thinks the split at the
BoE is similar to what is seen at other
central banks, and says it is impor-
tant for central banks to be much
more global in their views.
Pomery says that Posen and BoE
Governor Mervyn King are definitely
aware of the global implications of
the financial markets and that global
considerations should be at the fore-
front of their thoughts when they
look at where rates should be in this

T
HE rate setting arm of the Bank
of England is officially divided.
Monetary Policy Committee
(MPC) member, Adam Posen,
etary policy, and this is one of the Governor Charlie Bean spoke about ommends maintaining a cyclical bias country.
things holding back the markets. getting nominal GDP over five per with industrials beating retail stocks, Louisa Bojesen co-anchors European
According to Harnett, over the next cent), and an implicit unemployment and banks beating pharmaceuticals. Closing Bell weekdays on CNBC.
three months, policymakers on both target, but he thinks it’s apparent Maurice Pomery, CEO of Strategic MPC SPLIT: P17

Tesco plan to
sell mortgages Buyout deals
delayed by FSA
enjoy strong
▲

FINANCIAL SERVICES
TESCO’S plans to sell mortgages in
Britain could face a delay because it
has yet to receive approval from the
country’s financial services watch-
dog.
“The FSA (Financial Services
third quarter
Authority) is just being careful. It is a ECONOMY of around 30 per quarter.
▲

Tesco Bank chief executive Benny Higgins
new process and it is very difficult,” a
Tesco spokesman said.
He declined to comment on a
report in a Sunday newspaper that
Tesco’s plans to enter the home loans
market could be delayed by up to 12
months.
Tesco, Britain’s biggest retailer, had
originally hoped to start selling mort-
gages late this year. However, it was
recently reported that the group was
aiming to launch a home loans prod-
uct in March.
The company, which reports first-
half results tomorrow, is building up
its banking and insurance business,
and is expected to launch a fixed-rate
savings account later this month, and
a current account next year.
Only last week Tesco Bank, which is
led by Benny Higgins, agreed a £59m
deal that will see Fortis UK provide
travel insurance to some 170,000 cus-
tomers each year. A year ago the pair
announced a similar tie-up on motor
Picture: Mark Pinder and household insurance.
BY MATTHEW WEST
PRIVATE equity firms enjoyed a
strong third quarter, taking the aver-
age value of merger and acquisition
(M&A) deals to their highest for three
years, KPMG research has revealed.
Its latest management buyout
research showed nearly £9.3bn
changed hands in the last three
months, almost three times the value
of M&A deals in the previous quarter,
which stood at £3.6bn, despite a lower
volume of deals being completed.
The average value of M&A deals
was in the region of £180m, a figure
last seen in 2006, although the num-
ber of deals remains at the 2003 level
2010
Quarter Larger MBOs
number value (£m)
I 36
II 36
III 30
101
Private equity fund managers took
advantage of the summer while their
rivals were away on holiday, KPMG
said, recording three £1bn deals dur-
ing July and August.
Among recent deals to make head-
lines were Canadian Pension Plan,
Onex’s acquisition of engineering
firm Tomkins for nearly £3bn.
Another deal was the buyout of vend-
ing machine company Autobar by
CVC Capital Partners for £1bn in
August.
Meanwhile, Advent International
and Bain Capital’s acquisition of
financial services firm RBS Worldpay
for just under £2bn was the largest
private equity deal since 2008.
Larger MBOs Larger MBOs
average (£m)
5,136 143
3,621 101
9,348 312
18,105 179

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 16 News
Financial services industry must aid economy
Labour and Liberal Democrat
Conferences, this is the third time I
have attempted to address this issue
in as many weeks.
The focus of the City’s fringe event
neatly and deliberately encapsulates
the inherent conundrum facing the
UK financial services industry at the
CITY COMMENT present time.
STUART FRASER If our industry is to restore its repu-
tation and win back the public’s trust
then it must help the UK economy to
T
ODAY I will be speaking at the grow and help people to understand
City of London’s Conservative the role it plays in wider society.
Party Conference fringe event At the same time, our ability to
entitled “The Challenge for realise this goal is being constrained;
Financial Services – Helping the UK the public’s negative perception of
Economy Grow.” firms and individuals working in
Having already spoken at the financial services means that politi-
BSkyB braces
for crunch EU
sports ruling
▲
SPORT FINANCE
UK. The case has the potential to
BY STEVE DINNEEN open the floodgates for other publi-
BSKYB is braced for a high court hear- cans to switch their costly Sky sub-
ing this week that could change the scriptions for cheaper European
football rights landscape. ones.
A pub landlady has taken a case to Many landlords say they have been
the European Court of Justice claim- forced to switch off the football
ing Sky is breaching European free- because the prices are prohibitively
trade rules with the way it sells its high, giving the commercial edge to
commercial Sky Sports packages. larger chain pubs and driving compe-
Portsmouth-based Karen Murphy tition out of the industry.
was fined after an enforcement team Sky and the FAPL are already fight-
from Football Association Premier ing to stop landlords using foreign
League Limited (FAPL), an organisa- decoders to screen games that kick
tion working for the interests of the off at 3pm, which UK-broadcasters
individual clubs, discovered she was are prohibited from showing.
screening matches through a Greek
satellite broadcaster. ANALYSIS l BSkyB
Murphy claims the £1,000 a month p 705.50
Sky charges for the right to screen 720 1 Oct
matches is an unfair fee and she 715
should be free to shop around other
710
broadcasters.
The charges were brought against 705
Murphy by FAPL. However, should 700
Murphy be successful, the case could
have drastic implications for Sky, 695
which holds exclusive rights for com-
mercial screening of matches in the 5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates
Merchant Securities
The financial services group has appointed
Chris Smith as its new head of institutional
broking, focusing on establishing a research
capability in the financials sector.
Smith has covered financials for over 20
years, latterly at Jefferies International and
Oriel Securities.
He also previously worked for HSBC James
Capel, where he was the top-ranked speciality
financials analyst.
Clifford Chance opment and marketing, effective from
The law firm has hired Karim Klaus the start of December.
Emara as global head of business devel- Emara joins from Deutsche Bank,
To appear in CITYMOVES please email your career
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
updates and pictures to citymoves@cityam.com
cians simply cannot be seen to be con-
ferring any kind of benefits or advan-
tages on the industry at this time.
If we want to diversify the UK econ-
omy in order to tackle our fiscal
deficit – the UK government’s oft-stat-
ed “top priority” – and to help us bet-
ter withstand future economic
downturns, it will require substantial
amounts of capital, the provision of
which will be largely down to the
financial services industry.
Inadvertently limiting the size of
the financial services industry
through poor regulation will
inevitably result in much lower
growth and will also increase the pos-
sibility of a double dip recession.
Not only would we see a huge loss
BEST OF THE BROKERS
ANALYSIS l Legal & General
105
p 103.10
1 Oct
95
85
75
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
LEGAL & GENERAL
Legal & General has confronted the UK life
industry’s strategic challenges, transform-
ing both its product range and cash flow,
according to UBS. The broker maintains a
“buy” recommendation and says that the
fruits of this are now evident and the com-
pany has answered the existential ques-
tions that still vex some peers.
Prudential denies strategic review talk
▲
INSURANCE
PRUDENTIAL has dismissed sugges-
tions that a strategic review had sug-
gested it should sell its US division
and focus on its Asian business.
A report in a Sunday newspaper
suggested the insurer had called in its
broker Goldman Sachs to carry out a
strategic review of the business to
ease investor concern about its inher-
ent value. The review was believed to
where he is currently a managing direc-
tor and head of client marketing in the
global banking division.
Prior to working at Deutsche, he was
a partner at management consulting
group Accenture.
MaxCap Partners
The wealth management group has
appointed Mohammad Kamal Syed as
its new chief executive, leaving founder
Michael George to concentrate on the
group’s investment committee.
Syed previously founded Axiom
Funds Group in 2002, a fund of hedge
funds specialising in fixed income rela-
tive value and market neutral strate-
of income, leading to much higher
taxes, but jobs would also be lost
throughout the UK and would by no
means be restricted to those working
in financial services.
If the financial services industry is
to play its full and proper role in help-
ing secure our future prosperity, we
need better regulation on a global
basis. Unfortunately the last few
weeks have offered little in the way of
encouragement for potential overseas
investors, many of whom are already
nervous about current and future reg-
ulatory and legislative reforms in the
UK and the wider European Union.
I fully understand that speeches
given at Party Conferences are neces-
sarily designed to appeal to a party
ANALYSIS l Tate & Lyle 469.30
500 p 1 Oct
460
420
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
TATE & LYLE
Citigroup resumes coverage of Tate & Lyle
with a “buy” recommendation after a peri-
od of restriction following the disposal of
the food group’s sugars business. The bro-
ker says Tate & Lyle’s business is still sweet
without the sugars and updates its fore-
casts to reflect the disposal of the business
and gives the stock a £5.10 target price.
To appear in Best of the Brokers email your research to notes@cityam.com
suggested that if the insurer needed
to dispose of an asset it should sell its
US operation rather than its Asian
business.
But a spokesman for Prudential
said no such review had been con-
ducted adding: “As part of our nor-
mal planning process we routinely
seek external advice. That is normal
for Prudential and it is inaccurate to
say that is a strategic review. It is not.”
Prudential has had a difficult year
in association with
gies. Axiom’s funds have now been
merged with MaxCap.
Barclays Wealth
The wealth management firm has
appointed Robert Darlington as a direc-
tor to lead its wealth structuring busi-
ness in Switzerland.
Based in Geneva, Darlington will be
responsible for leading the trust and
fiduciary business, developing and
implementing wealth structuring solu-
tions for high and ultra-high net worth
clients.
He joins from Lloyds TSB Geneva,
where he was head of business develop-
ment for the wealth structuring solu-
CITYA.M. 4 OCTOBER 2010
political audience but our political
leaders must remember that every
time they speak, the international
business community will be listening
and judging.
Let us hope that when Parliament
is back in session, we can move past
this anti-City rhetoric and start to
deal with these important issues in a
rational way that will benefit the
financial services industry and thus
the whole of the UK. I know our
industry wants to play its part in the
recovery and demonstrate that
Britain is indeed “open for business”
– we now need to agree on a course of
action to make this happen.
Stuart Fraser is the Policy Chairman at the
City of London Corporation
ANALYSIS l BT
150 p
142.80
1 Oct
140
130
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
BT
JP Morgan Cazenove views the pension
issues facing BT as a reducing concern.
The broker says that given the numbers
involved, this is material for BT’s equity
value, and underpins its “overweight” rec-
ommendation. The broker continues to
view BT’s financial guidance as conserva-
tive.
after a $35.5bn (£22.5bn) bid for AIA,
the Asian business of American
International Group, fell through.
The Insurer was forced to lower its
initial offer for AIA following share-
holder concern that it overvalued the
company.
Some shareholders are believed to
have been angered by the way the bid
process for AIA was handled.
The bid is estimated to have cost
the company $450m.
tions group, and has also previously
worked at Credit Suisse.
Standard Life
The savings and investment group has
appointed Alan Armitage as director of
its new “Take to Market” business, com-
bining sales, marketing and distribution.
Armitage was previously chief execu-
tive of Standard Life Asia, where he led
the group’s Hong Kong business. He has
spent over 20 years at Standard Life,
including management roles in the UK
and Canada.
Roy Halliday, currently chief distribu-
tion officer in Hong Kong, will step up
to chief executive of that business.
+44 (0)20 7557 7245
morganmckinley.com
CITYA.M. 4 OCTOBER 2010
Tensions rise
among MPC
over more QE
▲
UK ECONOMY
BY JESSICA MEAD
SPECULATION of a three-way split
among the Bank of England’s
Monetary Policy Committee (MPC)
has intensified in recent days, creat-
ing a debate among City economists
about whether the Bank will loosen
policy even further.
External MPC member Adam Posen
last week put the cat among the
already nervous pigeons when he
argued strongly in favour of further
quantitative easing (QE) if Britain is to
avoid a Japan-style stagnation.
Although Posen said his vote
should not be seen as a foregone con-
clusion, the likelihood of a three-way
split has grown, with Andrew
Sentance remaining the hawk. Three-
way splits are relatively rare – the last
time was in July and August of 2008.
Since central bank independence in
1997 there have only been three other
occurrences of a three-way split.
Recent economic data has proved
disappointing. On Friday, the
September manufacturing purchas-
ing managers’ index (PMI) showed a
slowdown while public spending cuts
are expected to curb activity and eco-
nomic growth.
However, the MPC is faced with per-
sistently-high inflation, which will be
stoked by rising food prices and the
Janaury VAT hike. Sentance argues
that the MPC risks losing its inflation-
fighting credibiliy if no action is
taken.
But economists doubt that either
Posen or Sentance will sway the MPC
this month: “With long-term infla-
tion expectations roughly stable,
Sentance’s worries over lost MPC cred-
ibility lack immediate bite. At the
same time, Posen’s case – that the UK
is like Japan – is weakened by the
marked pick up in nominal GDP and
ongoing stimulus from the low
pound,” said Citi’s Michael Saunders.
November is seen as a likely month
for the Bank to move. Until then,
committee members’ speeches and
interviews will be scrutinised for
hawkish or dovish tones.
News 17
Losing talented
staff costs UK
£42bn a year
RECRUITMENT
▲
UK EMPLOYERS are facing an annual
£42bn bill to replace top talent, while
MPC member Adam Posen is in favour of further QE Picture: GETTY almost a quarter of employees are
looking for a new job because of
DO YOU THINK THE BANK OF ENGLAND insufficient pay.
According to new research from
WILL RESTART QE?
Interviews by Jessica Mead audit giant PricewaterhouseCoopers
(PwC), the cost of replacing a compe-
tent member of staff equals roughly a
year of that person’s salary – on aver-
PETER DIXON | COMMERZBANK age £25,000 – for each company.
“
The figure reflects the costs associ-
ated with lost skills and productivity,
Desperate times may call for desperate measures, but until such times replacement charges and training of
as the economic recovery goes into reverse, doing nothing may be the best strate-
”
new recruits.
gy. And if the Fed does begin its QE2 programme, the UK can afford to keep its Twenty-four per cent of the 1,148
powder dry by free-riding on the Fed’s coat-tails. workers polled by PwC said they were
either looking or intend to look for
PHILIP SHAW | INVESTEC another job because pay is insuffi-
cient.
“
“Companies often vastly underesti-
The chances of the MPC resuming its QE operations have increased, mate the financial benefits of retain-
amid fears that the recovery is losing momentum and that activity could be dealt a ing existing employees… Many
”
downward jolt from the proposed cuts in spending. The November meeting is likely employees who sat tight during the
to be the focal point of the MPC’s collective angst over the recovery. downturn may now be looking for
new opportunities elsewhere,” said
Richard Phelps at PwC.
JAMIE DANNHAUSER | LOMBARD STREET RESEARCH Meanwhile, more workers are quit-
“
ting their jobs in the UK compared to
other mature economies, with annu-
It is clear that the huge dose of monetary stimulus has achieved much al resignations averaging 10.4 per
of what it set out to do. To call for more QE ignores the slew of monetary data cent. That figure is seven per cent in
”
arguing against it. The balance of risks may deteriorate in the future but right the US and five per cent in both
now, monetary conditions remain sufficiently easy to promote recovery. France and Germany.
 18 News
Immigration cap is City’s biggest complaint
GUEST COMMENT
JAMES BETHELL
M
ARIA from the Home Office
called me about a recent key-
worker visa application at
9.00am and suggested, in no
uncertain terms, that she drop by for
an immigration audit at lunchtime.
We settled on teatime the next day.
Britain’s clampdown on skilled
migrant workers is in a rush.
My encounter with Home Office
enforcers last week was typical of a
Nakheel mulls
more Islamic
bond issuance
▲
PROPERTY
BY HARRY BANKS
NAKHEEL is in preliminary talks to list
an Islamic bond, part of its restructur-
ing plan, on Nasdaq Dubai and a
“good percentage” of banks have
agreed to the developer’s repayment
plan, its chairman said yesterday.
Ali Rashid Lootah said he was “very
confident” the builder of islands in
the shape of palms will complete the
restructuring by the end of the year.
“It is on the way. We have achieved a
good percentage,” Lootah said told
reporters when asked about banks
agreement on the plan. “We are in the
final stages of negotiation and we are
confident we will reach an agreement
in the near future.”
Under Nakheel’s restructuring plan,
trade creditors have been offered 40
per cent of what they are owed in cash
and the remaining 60 per cent
through a sukuk, or Islamic bond.
Conglomerate Dubai World has
near-unanimous approval for its
$24.9bn debt plan, it said in
September. But Nakheel – its flagship
property arm undergoing parallel
negotiations – has yet to secure back-
ing needed for the plan.
An industry executive said on
Dividend growth could hit 22 per cent
▲
FINANCIAL SERVICES
BY STEVE DINNEEN
THE UK is likely to experience double-
digit dividend growth in 2011 accord-
ing to a top fund manager.
Tineke Frikkee, manager of the
Newton Higher Income Fund says she
is optimistic about the outlook for
growth next year after three consecu-
tive years of declining dividend
income.
She says the UK is likely to see
new trend. Visa numbers cut. Visa
lengths shortened. Key skill shortages
holding up projects. Business going
overseas where qualified workers can
more easily settle. I talk to City people
every day and the single greatest
source of complaint has recently
become the arbitrary implementa-
tion of the governments new interim
immigration cap.
This cap, installed in July ready for
new rules in April, is proving bad for
business, they tell me. Companies
operating in global markets, employ-
ing the best workers from around the
world, are finding that they are get-
ting to the front of the queue and
finding that the shop is shut.
In a globalised world, no one coun-
try has all the skills it needs. One of
the great things about globalisation
is the way the best people work
together on international projects,
Tuesday he expected the sukuk to be
worth around 6bn dirhams ($1.63bn).
“We are just doing a preliminary
talk and preliminary investigation,”
Lootah said when asked if the compa-
ny had applied to list the bond on the
Nasdaq Dubai exchange.
Dubai contractor Arabtec’s chief
financial officer Ziad Makhzoumi said
late last month that Nakheel had
applied for the listing on Nasdaq
Dubai. Nakheel said it has already
repaid trade creditors 4.6bn dirhams
as part of the plan.
Lootah’s comments on the restruc-
turing affirmed the time-frame for
completion of the deal that Nakheel
chief executive Chris O’Donnell gave
in late September.
Nakheel said it has about 85 per
cent of acceptances, by value, for its
debt restructuring and was “well on
target to achieve its 95 per cent accept-
ance of all payables and claims within
the near future”.
Nakheel has recently announced
the restart of several projects and
expects to start building again on all-
short term projects by the end of
October. It is looking expand its retail
business with the expansion of its
Dragonmart mall and possibly Ibn
Battuta mall in Dubai early next year.
between eight and 22 per cent mar-
ket dividend growth.
Frikkee says the growth will be
driven by two main factors: move-
ment in the US dollar/sterling
exchange rate next year and BP’s divi-
dend decision in early 2011.
She said: “Should BP reinstate its
dividend at the consensus level of
$0.105 per quarter, then 2011 market
dividend growth is likely to be
around 14 per cent.
“We believe that the company can
exchanging ideas from around the
world and producing innovative, cost-
effective products.
The government’s policy, due to be
finalised by April, should be encour-
aging this. Or else Britain will be
handing a competitive advantage to
economies offering a more welcom-
ing regime. At a time when we need
more economic growth to pay off the
nation’s debt, it seems crazy to many
CEOs that the government is bringing
in a twenty first century “brain
block”.
With millions of people on bene-
fits, the immigration minister
Damien Green is right to expect com-
panies to “look to fill vacancies from
the resident labour force before they
look for skills outside the UK”.
But every time a British company
compromises on the quality of its
human resources, it loses an edge and
Dubai (pictured) could soon have Nakheel bonds on its exchange
afford this, and it would bring its div-
idend yield slightly higher than that
of Royal Dutch Shell.
“If BP reinstates its 2011 dividend
at the previous level of $0.14 per
quarter then market dividend
growth of around 18 per cent could
be achieved.”
She also says that, as more than 40
per cent of UK dividends are declared
in US dollars, any further weakening
in sterling would push the dividend
level even higher.
foreign competitors can steal some
market share here, some margin
there. Before long the British compa-
ny is out of business.
Companies are increasingly break-
ing cover and saying publicly that
they are frustrated by having one
hand tied behind their back.
GlaxoSmithKline, International
Business Machines, General Electric,
J.P. Morgan Chase and Deutsche Bank
are amongst those businesses express-
ing concern in one way or another.
Even the CBI last week seemed to be
changing its stance, calling on the
government to prioritise skilled work-
ers with a job offer.
On the government benches, Vince
Cable seems to agree. He told the
BBC’s Today programme that he was
“optimistic” current discussions with
the Home Office would lead to a
“more flexible system that worked for
Picture: REX
Two US media firms vying for
stake in BBC Worldwide’s UKTV
▲
MEDIA
TWO US media companies are vying
to become BBC Worldwide’s new part-
ner in UKTV, the broadcaster behind
digital channels Dave, Watch and
Gold, according to the Sunday Times .
Discovery Communications and
Scripps Networks are trying to team
up with BBC Worldwide, which owns
50 per cent of UKTV, to buy the
CITYA.M. 4 OCTOBER 2010
the benefit of Britain in general”.
Just to be clear, my friends in the
City are not rejecting controls on
immigration. The current system has
lost credibility. But it seems unreason-
able that British businesses, growing
the payroll after recent recessionary
cut-backs, are being rationed to
24,100 non-EU key-worker visas when
360,000 non-EU student visas were
granted in the year to June, mostly to
non-degree courses.
Most people see the need for better
immigration controls. What we don’t
need is an arbitrary cap that puts key-
workers at the back of queue, making
British business uncompetitive and
hampering Britain’s future economic
growth. The government should lis-
ten to Britain Plc and rethink how it
handles the annual limit.
James Bethell is director of Westbourne
Communications.
NEWS | IN BRIEF
Terror threat raised by US and UK
The US and Britain both warned yester-
day of an increased risk of terrorist
attacks in Europe, with Washington say-
ing al Qaeda might target transport
infrastructure. The US State
Department issued a warning directed
at American citizens travelling in
Europe, without singling out any specific
countries. The UK raised the terrorism
threat level in its advice for citizens trav-
elling to Germany and France to “high”
from “general”. It left the threat level at
home unchanged at “severe,” meaning
an attack is highly likely, and said it
agreed with the US assessment for the
continent as a whole.
Sovereign funds insource more
Sovereign funds are developing in-house
portfolio management techniques after
the global crisis, a worrying trend for
asset management companies, an execu-
tive at research firm Cerulli Associates
said. Global asset managers, who have
historically pocketed attractive fees by
managing a significant share of the sover-
eign funds, need to be aware of this devel-
opment while approaching them for
funds, according to Shiv Taneja, manag-
ing director at Boston-based Cerulli.
Bumper pay for new HP boss
New HP boss Leo Apotheker could earn
as much as $50m (£32m) in his first
year at the firm. Apotheker, who joined
the computer manufacturer from SAP
last week, will receive a basic pay pack-
age of $1.2m, a bonus of up to $6m and
a lucrative share package. However, the
market reacted badly to the appoint-
ment, with investors worried the Silicon
Valley outsider lacks the experience to
steer the sprawling company.
Apotheker, 57, spent seven months as
CEO of German software giant SAP
before resigning abruptly amid cus-
tomer complaints over software support
fee increases.
remaining stake from cable group
Virgin Media, the paper said, without
citing sources.
Sources familiar with the situation
said in August that Virgin Media had
appointed banks UBS and Goldman
Sachs to help sell its stake in UKTV
and that the holding had been valued
at about £350m.
BBC Worldwide and Virgin Media
did not comment.
 Markets&Investment 19

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 . . . . . . . . . . . . . . . . . . . . . . . .283.90 –2.60 310.00 246.90 Cookson . . . . . . . . . . . . . . . . . . .553.50 +6.50 616.00 347.60 Jupiter Fnd Mgmt . . . . . . . . . . . .260.20 +0.70 264.00 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .281.30 +5.00 283.90 208.20
3i Infrastructure . . . . . . . . . . . . . 114.00 +0.10 115.00 97.00 Croda Intl . . . . . . . . . . . . . . . . .1480.00* –2.00 1529.00 647.00 Kazakhmys . . . . . . . . . . . . . . . .1461.00* +9.00 1634.00 955.00 Sainsbury(J) . . . . . . . . . . . . . . . .389.00 –1.70 397.00 307.60
A.B. Foods . . . . . . . . . . . . . . . .1031.00 –18.00 1096.00 790.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .525.50 –0.50 539.00 381.00 Kesa Electricals . . . . . . . . . . . . .147.20* +0.80 162.00 98.45 Schroders . . . . . . . . . . . . . . . . .1446.00 +8.00 1459.00 1055.00
Aberdeen Asset Man . . . . . . . . . .162.90 +2.40 164.90 111.00 Dana Petroleum . . . . . . . . . . . .1798.00 — 1817.00 968.50 .LQJÀVKHU . . . . . . . . . . . . . . . . . .233.90 –0.30 255.00 196.50 Schroders N/V. . . . . . . . . . . . . . 1169.00 +3.00 1187.00 864.00
Admiral. . . . . . . . . . . . . . . . . . .1682.00 +16.00 1695.00 1003.00 Davis Service . . . . . . . . . . . . . . .403.90* +2.40 442.30 356.00 Ladbrokes . . . . . . . . . . . . . . . . .134.30* +0.10 166.62 114.60 Scot. & Sthrn Energy. . . . . . . . . 1120.00 +2.00 1206.00 357.50
Aegis . . . . . . . . . . . . . . . . . . . . .125.10 +1.60 137.30 103.10 Debenhams . . . . . . . . . . . . . . . . .66.50 +1.20 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .352.50* –3.90 372.30 157.30
Afren . . . . . . . . . . . . . . . . . . . . . 115.50 +4.90 116.00 76.25 Derwent London . . . . . . . . . . . .1557.00* +53.00 1562.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .564.00* +9.00 568.00 416.70 Scottish Mortgage. . . . . . . . . . . .642.00 +2.00 645.00 475.00
African Barr Gold . . . . . . . . . . . .599.50 +9.50 685.00 520.50 Dexion Absolute . . . . . . . . . . . . .140.00 –0.30 148.00 130.00 Land Securities . . . . . . . . . . . . . .651.00* +10.50 743.50 543.00 SEGRO . . . . . . . . . . . . . . . . . . . .280.20* +7.20 389.90 244.00
Aggreko . . . . . . . . . . . . . . . . . .1539.00* –31.00 1639.00 664.50 Diageo . . . . . . . . . . . . . . . . . . . 1104.00* +8.00 1176.00 930.50 Legal & General . . . . . . . . . . . . .103.70* +0.20 105.70 69.05 Serco . . . . . . . . . . . . . . . . . . . . .607.50* –7.50 656.50 485.60
Alliance Trust . . . . . . . . . . . . . . .332.20 +1.50 352.70 292.80 Dimension Data . . . . . . . . . . . . . 119.70 +0.10 125.50 62.00 Lloyds Banking Gp . . . . . . . . . . . .73.50 –0.62 79.15 45.30 Severn Trent . . . . . . . . . . . . . . .1306.00 –5.00 1404.00 939.50
AMEC . . . . . . . . . . . . . . . . . . . .1010.00 +24.00 1018.00 724.50 Dixons Retail . . . . . . . . . . . . . . . .26.20 +0.49 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .128.80* +2.00 149.10 100.80 Shaftesbury . . . . . . . . . . . . . . . .441.40 +8.50 456.00 348.00
Amlin . . . . . . . . . . . . . . . . . . . . .400.80* –0.50 437.60 350.80 Domino’s Pizza . . . . . . . . . . . . . .465.00 –4.60 484.70 278.20 London Stk Exchange . . . . . . . . .684.50 +3.50 949.50 540.50 Shire. . . . . . . . . . . . . . . . . . . . .1420.00* –14.00 1532.00 999.00
Anglo American . . . . . . . . . . . .2570.00 +44.50 3015.50 1846.50 Drax . . . . . . . . . . . . . . . . . . . . . .384.10* +0.80 479.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1716.00 +47.00 2198.00 1344.00 Smith & Nephew . . . . . . . . . . . . .583.00 +2.50 700.50 525.50
Antofagasta . . . . . . . . . . . . . . .1248.00* +12.00 1258.00 699.50 Dunelm . . . . . . . . . . . . . . . . . . . .390.70 –1.00 438.40 303.00 Man . . . . . . . . . . . . . . . . . . . . . .216.20 –2.90 373.60 199.60 Smith(Ds) . . . . . . . . . . . . . . . . . .154.80 +5.40 156.00 103.00
Aquarius Platinum . . . . . . . . . . .338.50* –2.10 490.00 211.50 Easyjet . . . . . . . . . . . . . . . . . . . .368.30 –1.60 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .391.60 +3.50 412.70 321.90 Smiths . . . . . . . . . . . . . . . . . . .1242.00 +23.00 1253.00 864.50
ARM Holdings . . . . . . . . . . . . . . .405.00* +12.80 419.50 134.40 Edinburgh Inv Tst . . . . . . . . . . . .421.70 +4.70 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .297.10* +0.90 331.00 224.90 SOCO Intl . . . . . . . . . . . . . . . . . .436.30 +6.30 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .337.30 +2.70 338.60 215.00 Electrocomponents . . . . . . . . . . .244.00 +1.20 251.00 142.90 Melrose . . . . . . . . . . . . . . . . . . .279.20* +5.60 280.00 160.00 Spectris . . . . . . . . . . . . . . . . . .1084.00 +11.00 1117.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3222.00 –11.50 3389.50 2668.00 EnQuest . . . . . . . . . . . . . . . . . . . 117.60 +1.80 125.90 87.35 Mercantile IT . . . . . . . . . . . . . . . .962.50* +9.50 1002.00 822.50
Atkins(Ws) . . . . . . . . . . . . . . . . .748.00 +12.00 801.00 532.50 Essar Energy . . . . . . . . . . . . . . .467.10 +4.50 475.90 358.50 Michael Page Intl. . . . . . . . . . . . .461.10* +0.30 470.70 314.40 Spirax-Sarco Eng . . . . . . . . . . .1802.00 +2.00 1859.00 1026.00
Autonomy Corp . . . . . . . . . . . .1844.00 +31.00 2012.00 1278.00 Eurasian Nat Res . . . . . . . . . . . .922.00* +3.50 1276.00 781.00 Micro Focus . . . . . . . . . . . . . . . .384.00 +2.50 550.00 272.20 Spirent Comms . . . . . . . . . . . . . .143.40 +1.50 145.40 84.40
Aveva . . . . . . . . . . . . . . . . . . . .1503.00 +40.00 1504.00 856.50 Euromoney Inst Inv . . . . . . . . . . .607.50 –3.50 630.00 352.90 Millen & Copthorne . . . . . . . . . . .520.00* — 547.00 321.40 Sports Direct Intl . . . . . . . . . . . . .140.50 –0.50 143.20 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .394.50* –4.40 474.00 290.20 Experian . . . . . . . . . . . . . . . . . . .674.00 –19.00 698.50 516.50 Misys . . . . . . . . . . . . . . . . . . . . .288.40 +2.80 295.80 192.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1158.00 — 1190.00 616.00
Babcock International . . . . . . . . .580.00 +10.00 660.50 489.00 Ferrexpo . . . . . . . . . . . . . . . . . . .313.30 +5.00 396.20 138.00 Mitchells & Butlers . . . . . . . . . . .292.90 +2.40 343.90 228.30 St James’s Place . . . . . . . . . . . . .292.00 +2.20 298.00 203.40
BAE Systems . . . . . . . . . . . . . . .343.10 +0.80 389.90 288.10 FirstGroup . . . . . . . . . . . . . . . . .357.00 –5.80 428.40 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .192.40 +1.20 257.00 187.60 Stagecoach. . . . . . . . . . . . . . . . .180.40 –1.80 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .266.60 –0.90 304.80 228.60 Foreign & Col Inv Tst. . . . . . . . . .285.20 +1.50 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .524.00 +9.50 533.00 300.70 Standard Chartered . . . . . . . . . .1835.00* +9.00 1946.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .299.75 +0.15 394.25 253.40 Fresnillo . . . . . . . . . . . . . . . . . .1270.00 +28.00 1288.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .321.80 –0.20 325.80 265.00 Standard Life . . . . . . . . . . . . . . .229.70* –1.50 237.00 170.00
Barratt Development . . . . . . . . . . .97.20 –1.55 178.75 89.10 G4S . . . . . . . . . . . . . . . . . . . . . .253.50* –1.10 285.70 217.70 Morrison Wm . . . . . . . . . . . . . . .293.40* –2.30 307.10 255.00 SuperGrp . . . . . . . . . . . . . . . . .1224.00 +9.00 1312.00 499.00
BBA Aviation . . . . . . . . . . . . . . .189.90* +1.50 220.00 145.90 Genesis Emerging Mkts Fd . . . . .508.00 +0.50 513.50 370.00 Murray Intl Tst . . . . . . . . . . . . . . .892.00 +11.00 907.50 720.00 TalkTalk . . . . . . . . . . . . . . . . . . .149.80 +3.10 153.80 106.60
Bellway. . . . . . . . . . . . . . . . . . . .573.50 –2.50 842.50 510.00 GKN . . . . . . . . . . . . . . . . . . . . . .169.40 — 174.30 100.40 National Express. . . . . . . . . . . . .239.10 –3.20 258.60 155.86 Talvivaara Mining . . . . . . . . . . . .491.40 –0.40 501.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .829.00 +3.00 949.50 735.00 GlaxoSmithKline . . . . . . . . . . . .1252.50* –2.00 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .541.00 +1.00 607.65 474.80 Tate & Lyle . . . . . . . . . . . . . . . . .469.30 +2.50 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . . 1170.00 +51.50 1248.00 966.90 Great Portland Estates . . . . . . . .350.70 +9.40 356.50 236.60 Next . . . . . . . . . . . . . . . . . . . . .2227.00 +11.00 2360.00 1726.00
BHP Billiton . . . . . . . . . . . . . . .2058.00* +33.00 2346.00 1583.50 Greene King . . . . . . . . . . . . . . . .414.00 +3.20 484.00 372.50 Northumbrian Water . . . . . . . . . .333.40 +0.80 353.00 225.20 Taylor Wimpey . . . . . . . . . . . . . . .28.63 +0.28 46.34 24.29
BlackRock Mining . . . . . . . . . . . .637.50 +12.00 654.50 474.00 Halfords . . . . . . . . . . . . . . . . . . .444.00 +1.20 562.50 343.00 Ocado Grp . . . . . . . . . . . . . . . . .134.20 +3.10 169.00 129.20 Telecity . . . . . . . . . . . . . . . . . . . .500.00 +4.50 546.00 311.30
BlueBay . . . . . . . . . . . . . . . . . . .344.60 –0.30 393.00 251.00 Halma . . . . . . . . . . . . . . . . . . . . .319.60 +3.10 323.90 215.40 Old Mutual . . . . . . . . . . . . . . . . .139.40 +0.60 142.50 94.75 Templeton Emrg Mkts . . . . . . . . .633.50 +14.00 633.50 449.00
Bluecrest Allblue GBP . . . . . . . . .169.00 –0.50 170.00 147.00 Hammerson . . . . . . . . . . . . . . . .398.00* +3.70 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .278.00 +2.50 339.70 205.80 Tesco . . . . . . . . . . . . . . . . . . . . .428.10 +4.10 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .48.46 +0.41 49.99 37.50 Hargreaves Lansdown . . . . . . . .455.60 +15.60 478.00 259.40 Pearson . . . . . . . . . . . . . . . . . . .979.50 –6.00 1069.00 751.50 Thomas Cook . . . . . . . . . . . . . . .173.70* +1.90 277.20 167.50
BP . . . . . . . . . . . . . . . . . . . . . . .440.50 +12.70 658.20 296.00 Hays . . . . . . . . . . . . . . . . . . . . . . 113.90 +0.80 119.00 82.50 Pennon . . . . . . . . . . . . . . . . . . . .579.50* –2.00 616.50 440.40 Travis Perkins . . . . . . . . . . . . . . .837.00 –6.50 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1029.00 +4.00 1045.00 709.00 Henderson . . . . . . . . . . . . . . . . .125.40 +1.20 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .393.20 –6.20 520.00 335.90 TUI Travel . . . . . . . . . . . . . . . . . .215.00* +0.60 313.90 189.20
British Airways . . . . . . . . . . . . . .242.90 +0.10 255.80 172.40 Heritage Oil. . . . . . . . . . . . . . . . .299.30 +2.50 585.00 296.80 Petrofac . . . . . . . . . . . . . . . . . .1392.00* +19.00 1446.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .399.40 +2.00 436.20 261.20
British Amer. Tob . . . . . . . . . . .2360.50 –14.00 2439.00 1832.00 Hikma Pharma . . . . . . . . . . . . . .687.50* –1.00 813.00 452.20 Petropavlovsk . . . . . . . . . . . . . .1099.00* –11.00 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1308.00* +34.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .469.60 +4.10 469.60 338.50 Hiscox . . . . . . . . . . . . . . . . . . . .350.60 +1.80 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .686.00* +1.00 775.00 550.50 UK Commercial Prop. . . . . . . . . . .77.90 +1.40 84.90 69.30
British Land . . . . . . . . . . . . . . . .473.70 +8.70 515.00 416.00 Hochschild Mining . . . . . . . . . . .438.30 –6.70 457.50 220.00 Premier Farnell . . . . . . . . . . . . . .269.00* +2.40 273.30 140.60 Ultra Electronics . . . . . . . . . . . .1718.00 +14.00 1774.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .481.20 –4.00 518.00 340.00 Home Retail . . . . . . . . . . . . . . . .203.80 –2.20 326.30 203.00 Premier Oil . . . . . . . . . . . . . . . .1691.00 +37.00 1703.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1831.00 –10.00 2024.00 1662.00
BSkyB . . . . . . . . . . . . . . . . . . . .705.50 — 732.00 521.00 Homeserve . . . . . . . . . . . . . . . . .430.00 –9.50 502.00 422.00 Provident Financial . . . . . . . . . . .824.50 +0.50 986.00 795.00
BT . . . . . . . . . . . . . . . . . . . . . . .142.80 +2.80 151.00 108.40 HSBC Hldgs . . . . . . . . . . . . . . . .653.60* +8.60 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .647.00 +10.50 665.00 475.70 United Utilities . . . . . . . . . . . . . .575.00 +2.00 620.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .760.00 +1.00 784.50 614.00 Hunting . . . . . . . . . . . . . . . . . . .641.00 +19.50 659.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .372.10* +5.10 382.70 231.70 Utd Business Media . . . . . . . . . .618.50* –11.00 656.50 408.30
Burberry . . . . . . . . . . . . . . . . . .1030.00 –10.00 1065.00 492.10 ICAP . . . . . . . . . . . . . . . . . . . . . .436.40 +4.90 478.30 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . .108.00 +0.20 179.10 103.50 Vedanta Resources . . . . . . . . . .2209.00 +44.00 2967.00 1795.00
Cable & Wire Comms . . . . . . . . . .56.75 — 150.00 53.00 IG . . . . . . . . . . . . . . . . . . . . . . . .497.60* +0.40 532.00 291.00 Randgold Resources. . . . . . . . .6525.00 +155.00 6620.00 3930.00 Victrex . . . . . . . . . . . . . . . . . . .1338.00 +62.00 1344.00 726.50
Cable & Wire Wwide . . . . . . . . . . .73.10 –0.45 94.80 60.05 Imagination Tech Gp . . . . . . . . . .378.90 –2.50 399.00 154.00 Reckitt Benckiser . . . . . . . . . . .3488.00* –13.00 3667.00 2971.00 Vodafone . . . . . . . . . . . . . . . . . .158.85 +1.75 164.95 126.50
Cairn Energy. . . . . . . . . . . . . . . .457.10 +3.50 497.60 306.80 IMI . . . . . . . . . . . . . . . . . . . . . . .767.50* — 786.00 410.00 Reed Elsevier . . . . . . . . . . . . . . .535.00 –3.00 566.00 454.60 Weir . . . . . . . . . . . . . . . . . . . . .1450.00 +27.00 1469.00 635.00
Caledonia Invs . . . . . . . . . . . . .1638.00 +11.00 1759.00 1496.00 Imperial Tobacco. . . . . . . . . . . . 1911.00 +14.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .81.00* +1.00 125.50 64.05 Wellstream Hldgs . . . . . . . . . . . .773.50* +8.50 810.00 429.70
Capita . . . . . . . . . . . . . . . . . . . . .788.00* +2.00 829.50 693.00 Inchcape. . . . . . . . . . . . . . . . . . .318.10 +6.30 347.00 235.00 Renishaw . . . . . . . . . . . . . . . . .1056.00* +25.00 1056.00 479.00 WH Smith . . . . . . . . . . . . . . . . . .449.00 –4.20 551.00 392.20
Capital & Counties . . . . . . . . . . .133.70 +2.50 137.50 99.60 Informa . . . . . . . . . . . . . . . . . . . .417.50 –1.40 439.40 263.30 Rentokil Initial . . . . . . . . . . . . . . .101.50 –1.50 140.20 91.15 Whitbread . . . . . . . . . . . . . . . . .1624.00 — 1653.00 1141.00
Capital Shopping Centres . . . . . .376.90 +9.20 533.50 300.10 Inmarsat . . . . . . . . . . . . . . . . . . .668.50* +5.00 831.00 526.00 Resolution . . . . . . . . . . . . . . . . .244.30* –0.70 264.80 220.10 William Hill . . . . . . . . . . . . . . . . .168.90 +2.90 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .315.50* +2.00 361.90 269.30 Intercontl Hotels . . . . . . . . . . . . 1128.00* –8.00 1244.00 762.50 Rexam . . . . . . . . . . . . . . . . . . . .304.60* –2.40 348.80 258.20 Witan Inv Tst . . . . . . . . . . . . . . . .465.50 +0.50 487.00 396.30
Carnival . . . . . . . . . . . . . . . . . .2505.00 +3.00 2937.00 1876.00 Intermediate Capital . . . . . . . . . .300.80 +1.80 307.20 233.50 Rightmove . . . . . . . . . . . . . . . . .742.50 +9.00 796.50 456.90
Catlin . . . . . . . . . . . . . . . . . . . . .346.10 +5.60 394.60 303.20 Intertek . . . . . . . . . . . . . . . . . . .1818.00 –12.00 1863.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .3753.50 +32.50 4104.00 2435.00 Wolseley . . . . . . . . . . . . . . . . . .1582.00 –17.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .173.50 –3.50 194.40 92.00 Intl Personal Fin . . . . . . . . . . . . .271.00* +1.20 283.00 160.40 RIT Capital Partners . . . . . . . . . 1128.00 +18.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .437.90 +1.30 443.50 279.60
Centrica . . . . . . . . . . . . . . . . . . .321.00* –2.50 347.00 236.30 Intl Power . . . . . . . . . . . . . . . . . .390.50* +2.50 396.80 248.20 Rolls Royce . . . . . . . . . . . . . . . .595.50 –8.00 631.50 434.50 WPP . . . . . . . . . . . . . . . . . . . . . .706.50 +2.00 744.00 520.50
Charter Intl . . . . . . . . . . . . . . . . .699.00 +5.00 855.50 563.50 Invensys . . . . . . . . . . . . . . . . . . .304.20 +5.70 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1744.00 +24.00 1747.00 1101.00 Xstrata . . . . . . . . . . . . . . . . . . .1241.50* +23.50 1344.50 815.00
Chemring . . . . . . . . . . . . . . . . .3002.00 –4.00 3711.00 2389.00 Investec . . . . . . . . . . . . . . . . . . .507.00 –1.50 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .47.67 +0.46 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .746.50 +9.00 803.50 657.00 ITV . . . . . . . . . . . . . . . . . . . . . . . .59.35 –0.30 71.75 41.04 Royal Dutch Shell A . . . . . . . . .1944.00 +28.00 2068.50 1621.00
Cobham . . . . . . . . . . . . . . . . . . .227.40 –3.60 278.60 205.50 Jardine Lloyd Thompson. . . . . . .564.50* –13.00 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1888.00 +31.00 1997.50 1550.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . . 119.60 +1.30 144.20 107.70 Johnson Matthey . . . . . . . . . . .1766.00 +4.00 1814.00 1302.00 RSA Insurance . . . . . . . . . . . . . .132.60* +1.90 142.00 114.10
Compass . . . . . . . . . . . . . . . . . .521.00 –9.50 574.50 375.00 JPMorgan Emerg Mkts . . . . . . . .594.00 +14.00 594.00 443.00 SABMiller . . . . . . . . . . . . . . . . .2010.00 –25.50 2090.00 1450.00 www.interactivedata.com

Traders braced for busy week with new data out

points higher at 5,602, with similar data from the publication of the ADP week. Alcoa will be amongst the first
MARK ONTHE gains for the German DAX 40, up 15
points to 6,226 and the French CAC
employment report on Wednesday
and initial claims on Thursday.
to announce, when they update the
market on Thursday.

MARKETS 40, up 14 points to 3,706.

Looking ahead to the rest of the
week, traders will be bracing them-
On the corporate side, US third
quarter earnings season kicks off this
Mark Outten, Senior Dealer GFT Global
Markets Uk Ltd.

selves for a busy schedule. Both the ANALYSIS l FTSE 5,592.90 ANALYSIS l DAX
6,400 6,211.34
UK and Eurozone publish their PPI 1 Oct 1 Oct
and PMI data. We also have figures for 5,600
industrial production in the UK.
The MPC and ECB both meet this
week. No changes in interest rates are 6,200
expected and we will probably need
to wait until the MPC minutes are 5,400
published to gain any indication as to
the likelihood of further quantitative 6,000
MARK OUTTEN easing in the UK.
Looming at the end of the week is
the US Non-Farm Payrolls report. The

T
HIS morning GFT expects a posi- payroll figure itself is expected to be 4,800
5,800
tive start for the major flat, with the unemployment rate
European indices. Our call is for inching up to 9.7 per cent. The mar-
the FTSE 100 index to open 10 ket will look for clues to the payrolls 5 Jul 23 Jul 12 Aug 2 Sep 22 Sep 5 Jul 23 Jul 12 Aug 1 Sep 21 Sep

WALL STREET WEEK AHEAD

A
S September’s surge fades into will be tested this week by a round of employment report on Friday. on Friday, are forecast to remain and 1,150 levels, but has fallen back
a fond memory, the question economic data, including the much- “People are still exhibiting a lot of unchanged after a loss of 54,000 jobs from the top end of that range in the
for the US stock market is: Now watched nonfarm payrolls report, as fear in their investment decisions, in August, according to a poll of econ- past six sessions.
what? well as the start of third-quarter earn- with so much money flowing into omists. However, the forecast range is While analysts have attributed
The market shook off the summer ings season. The S&P has also been bond funds and Treasuries, that any wide, with a gain of 106,000 jobs on some of September’s move to “perfor-
doldrums last month, breaking out of bumping up against a technical resist- uptick in economic data could catch the upside and a loss of 75,000 jobs on mance chasing”, where gains beget
a stubborn trading range and giving ance level that could spark further investors off guard,” said Michael the downside. more gains, O’Rourke thinks the real
investors the second-best September gains if the index breaks through it. O'Rourke, chief market strategist at As the bulls and bears keep fight- action might not happen until the
on record with a gain of 8.8 per cent Trading has been in a tight range BTIG LLC in New York. ing over the stock market’s direction, fourth quarter.
on the S&P 500. It also racked up its the past week as the quarter wound “That should help fuel a nice technical indicators have become “I view it more as a lot of people
best quarter in a year. down and the muted action could fourth-quarter rally in equities.” more widely scrutinised. The S&P 500 were sitting out the volatility, waiting
The strength of that momentum continue in the lead up to the September nonfarm payrolls, due has been bouncing between the 1,140 for a trend to emerge,” he said.
 20 Investment | Spread Betting CITYA.M. 4 OCTOBER 2010

Clearing away
spread betting
misconceptions
Regulation and competition mean providers
are on the trader’s side, writes Jessica Mead

S
PREAD BETTING has become much
more mainstream over the past
decade but there still exist plenty of
myths and misconceptions about
how providers actually operate, leaving
traders liable to be confused and frustrat-
ed. Here we clear away the some of the con-
fusion surrounding the industry.
It is certainly not the case that the
whole system is rigged against traders.
Fierce competition has seen spreads nar-
row to just a few basis points in many cases
and providers have been forced to improve
their customer service and technology.
Since the vast proportion of their revenues
is generated from the spreads, providers
have every incentive for clients to place as
many spread bets as possible and to keep
trading with them.
It is not just competition that has helped
to make the industry more transparent
and more customer-focused. Under the
Markets in Financial Instruments Directive
(Mifid), which was passed in November
2007, spread betting firms are obliged to
offer best execution.
“This means that the spread will be
fixed and the price offered to will be the
best price possible in the underlying mar-
ket. This also removes the idea of skewed
spreads when markets are moving in a par-
ticular direction,” says Tim Hughes, man-
giving clients greater flexibility, says GFT’s
David Morrison.
When it comes to the dealing book, it is
a common misconception that firms will
hedge by taking the opposite position to
yours. In fact, the ideal scenario for a
provider is that they are able to match
trades without need to hedge at all.
For example, if one client goes long on
the FTSE 100 at £10 a point and another is
short the index at £10 a point, the two
orders offset each other, leaving the
provider with no risk and simply a facilita-
tor of trades. “We try to have as many
clients as possible because the more clients
you have, the more likely you will get posi-
tions that match,” explains Hughes.
Of course, not every position – particu-
larly those of larger sizes – has an equal
opposite and the provider is likely to have a Make sure your view isn’t obscured Picture: GETTY
net exposure to a market. In this scenario,
it won’t hedge every trade one-for-one
because this would be expensive and which has repeatedly failed to break
impractical. Instead, IG Index aggregates THE TIPSTER through resistance. Since we are in
its net exposure to a market and sets limits October, historically a month of falls, a dip
that are dependent on the liquidity and
popularity of the security. Any positions
SAINSBURY’S STATEMENT is expected. Capital Spreads quotes
5,581.0-5,582.0 for the FTSE 100.
that push the net exposure beyond that
approved limit will be hedged one-for-one,
WILL BRING BUYERS BACK The euro continues to push higher at the
expense of the dollar and New York Fed
however, says Hughes. president William Dudley’s dovish com-
Finally, it is no myth that traders are ments will not have made this any better.
more likely to lose money than win. Angus CMC Markets offers $1.3763-$1.37645 on

aging director of IG Index. He adds: “The
spread betting companies also cannot
widen spreads to balance their book and
they won’t be able to move spreads if they
have an opinion that the markets are like-
ly to move in one direction.”
Competition and increased volumes
have allowed providers to become more
accommodative to their clients’ needs. For
example, GFT can deal with small and
large trades and there is no requirement to
deal in recognised exchange contract sizes,
Campbell, head of sales at Capital Spreads,
says that despite the fact that there are
more winning trades than losing trades,
only about 20 to 25 per cent of clients will
make money overall. “The problem is that
the winning trades are a lot smaller in size
– clients run their losses, move their stops
too far away and they are too quick to take
profit,” he explains.
Competition and Mifid give transparen-
cy but successful traders will still need to
plan and stick to their strategies.
S
UPERMARKET J Sainsbury had a
bumper summer with the share price
plotting a course towards the 400p
mark. The trading statement, due mid-
week, has potential to bring buyers back in. For
as long as talk of a double dip recession is kept
at bay retailers may be in for a good Christmas.
But be warned, there is no consensus on the
share price. Many think it is overpriced – an
update could give some meaningful direction.
The current IG Index price is 387.5p-388.5p.
Traders continue to sell the FTSE 100,
euro-dollar.
Spread betters were dipping their toe
back in the water with Barclays on Friday
as the price fell to the 300p level. For sev-
eral months 295p-300p has been a sup-
port/resistance level and it is also a 50 per
cent retracement of the 253p-348p move
seen during the summer. It is now below
the major moving averages and other
technical indicators are pointing to a dip.
Spread Co offers a spread on Barclays of
298.6p–299.2p. Donata Huggins

YOU’RE NO STRANGER TO SPREAD BETS. Get started at

gftuk.com.
AND NEITHER ARE WE.

We’re GFT and we want to be your next spread bet firm.

From award-winning software to 24/7 service—not to mention some of the most competitive pricing out there —GFT has you covered.
CFDs, spot forex and spread bets are leveraged products and may not be suitable for everyone as it is possible to lose more than the funds you deposit.
Please ensure that you fully understand the risks involved. GFT Global Markets UK Ltd. is authorised and regulated by the Financial Services Authority.

SPREAD BETS | CFDs | FOREX / gftuk.com / free phone 0800 358 0864
CD03UK.113.073010
CITYA.M. 4 OCTOBER 2010
SPREAD BET
GURU
JOSHUA
RAYMOND
MARKET
STRATEGIST
josh@cityindex.com
Q.
Dear Josh, I am starting to trade
more on my mobile. What should I
be careful of?
A.
First and foremost, I think mobile
dealing is fantastic. It allows you to
keep abreast of the markets wherev-
er you are, whenever you want. With many
markets available to trade 24 hours a day,
The iPhone is most punters’ mobile trading gadget of choice
ETX joins the
iTrade party
with new app
As mobile dealing improves, trading
will speed up, writes Juliet Samuel
S
PREAD betting and contracts for
difference (CFD) provider ETX
Capital this week joined its
peers in bringing out a cus-
tomised iPhone app to let traders alter
their positions on the go. ETX now
joins IG Markets, City Index and GFT as
one of many brokers with an iPhone-
specific trading platform. And, judg-
ing by the others’ experiences, the app
will soon jumpstart its mobile trading.
City Index launched its app nearly
two years ago and today, 25 per cent of
its clients places at least one trade via a
mobile each week, with 15 per cent of
total trades placed through phones.
And with 90 per cent of City’s mobile
trades involving an iPhone, its app was
essential in expanding the market.
IG Markets, meanwhile, launched
its app in August this year and, in just
its first month, saw over 12,000 down-
loads. Even before the platform specif-
ically designed for the iPhone went
live, the broker saw 110,000 mobile
trades per month (out of a total of 5m),
Investment | Spread Betting 21
and especially since the markets have been
volatile recently, it is imperative that you can
the short term, not worked. Having initially
surged from 82.85 to 85.77, dollar-yen has
react with just a few clicks of a button. For recovered well and quickly, with 10 days of
me, the future of spread betting is mobile straight gains against the US currency forc-
dealing. That said, along with the advan- ing the price back towards the 83.50 level.
tages, there are risks that you should consid-
er. The concept behind mobile dealing is to
It is hard to see Japan succeeding in
devaluing its currency without co-operation
increase your potential to access prices from the US, which will also want to keep its
whenever you want. The disadvantage could currency from strengthening too much in case
be that the more you look at prices moving, this hurts its exports. Moreover, with the Fed
the higher is the potential for you to make indicating it is ready and willing to start a sec-
impulse trades without proper research and ond round of quantitative easing, this is keep-
analysis. Make sure you have carefully ing the US dollar pinned down. My hunch, as I
analysed your market before trading, regard- said a few weeks ago, is that there will be a
less of whether you execute your trades via a lot more to play out on this one.
mobile, online or phone. Only last week, Japan’s vice finance minis-
ter said that he expects the Bank of Japan
Q.
Dear Josh, the yen continues to (BoJ) to make appropriate policy decisions
strengthen against the dollar. Will this week at a monetary policy meeting to
this entice Japan to intervene once support Japanese growth so there could well
again? be some volatility in dollar-yen this week.
A.
There is every chance it could. The Learn more about the markets and spread
move by Japan to intervene a little betting with Josh at his free City Index semi-
over two weeks ago has, at least in nars. Tokyo could try to devalue again Picture: GETTY
placed through a variety of phones
using its PureDeal platform. But with
an iPhone app in play, that number
jumped quickly, adding another
65,000 mobile trades to August’s fig-
ures.
IG’s David Jones says: “Before the
app came along we’d seen a steady rise
in mobile trading and the iPhone has
kicked it up to another level.” He puts
it down to the iPhone’s large display
and ease of use, which enables clients
to take full advantage of IG’s auto-
refreshing charts (connection speeds
are too slow for a live-streamed chart
to make sense).
Most apps aren’t currently able to
display charts, although many have
functions beyond the bare minimum
– often including a news ticker, for
example. And as brokers ratchet up
their mobile trading facilities (at least
one firm is already working on an app
for Google’s Android platform), trad-
ing is only going to get faster and more
accessible.
 Lifestyle
22 CITYA.M. 4 OCTOBER 2010

| Travel

Staying aboard the

Tui Tai tall ship was
the perfect way for
Esther Shaw to
discover Fiji’s islands
I
T’S a hot and humid afternoon in
Nadi on the Fijian mainland as we
squash into the rather intimate 14-
seater plane that is to deliver us to
Taveuni in the north-east of the
archipelago.
Known as Fiji’s Garden Island for its pris-
tine tropical rainforests and ridiculously
beautiful beaches, Taveuni is to be the
starting point of our journey aboard the
Tui Tai, a lovingly converted tall ship
which operates in this rarely-visited area of
the south pacific.
Fiji’s 322 islands range in size from the
large Viti Levu and Vanua Levu to much
smaller islands, of which just over 100 are
inhabited.
I spend the 90-minute flight with my
face pressed against the window gazing
out over turquoise seas and tiny volcanic
atolls before the pilot sets us down at
Taveuni’s Matei airport (little more than a
dusty track cleared out of the dense under-
growth); from here, a small speedboat zips
us across the waves to the vessel that is to
be our home for the next few days.
We climb aboard to the harmonies of
the crew singing a traditional Fijian song,
and welcoming cries of “bula” (a far cry
from the greeting given to our European
ancestors not so long ago, when cannibal-
ism was still rife in these parts.)
The country’s people are a fascinating
blend of Melanesian, Polynesian,
Micronesian, Indian, Chinese and
European influences, and are rarely with-
out a smile on their faces – and flowers in
their hair.
The Tui Tai staff are incredibly welcom-
ing, and within minutes of arriving our
luggage has been whisked away, garlands
of hibiscus have been hung around our
necks, and fresh coconuts placed in our
hands.
The vessel was once kitted out for budg-
et travellers, and while it may still pride
itself on venturing off the beaten track to
some of the most inaccessible islands in
the Fijian chain, the refurbished boat is
now a byword for luxury.
With a maximum of 22 guests at any
time (and only four during my visit), the
fact there are 18 staff on hand to see to
your every need means there is no compro-
mising on service.
My home was an “expedition cabin,” a
simple affair with a double bunk and mod-
est en-suite bathroom, but if you want to
splash out, there are also staterooms
which come with their own private
rooftop cabanas.
Guests are spoiled with a gourmet menu
How to live the
Polynesian dream
served from the on-deck outdoor kitchen,
an amply-stocked bar, a daily house-keep-
ing and laundry service, and long list of
spa treatments.
Each day, the boat sails at the crack of
dawn, with staff going about their daily
business for several hours before the guests
arise.
For us, the day starts with an invigorat-
ing Mana yoga class (a fusion of yoga and
The day starts with a Mana yoga class on
pilates) on the gently swaying deck before
the mats are cleared away to make space
the gently swaying deck before the mats
for a breakfast of fresh fruit and stacks of
syrup-filled pancakes.
are cleared to make space for breakfast
Days are then free to explore, and can be
as action-packed or as laid-back as you so
desire.
I signed up to just about every activity
on the itinerary – from guided snorkelling
trips over giant rainbows of soft coral, to
bike rides along the coast past remote vil-
lages, to gentle kayak outings through the
mangrove-flanked lagoons.
Not many tourists make it as far as these
islands, so we are treated as something of a
curiosity – although soon prove popular
once we join in with the children’s games
of volleyball or football.
The behind-the-scenes organisation on
the Tui Tai runs with clockwork precision,
and food, cold drinks, kayaks, bikes – and
even a massage table – appear on even the
most remote sandy white beaches.
Fiji is rated one of the world’s top ten
dive destinations for its sheer diversity,
offering something spectacular for divers
of every level from breathtaking corals to
caves, and even shark dives.
As a complete beginner, the Tui Tai staff
walk me through the basics on board
before kitting me out and taking me to the
calm shallows to learn a few simple skills.
With these mastered, I am able to dive at
up to 12 metres to explore the kaleido-
scope of corals and the vibrant reef fish
which inhabit them.
As the days go by on the Tui Tai, they
start to acquire their own rhythm, with
snorkelling, kayaking, paddle-boarding,
hiking and biking outings punctuated by
tea and cake at 11am, lunch under the
verandah, and plenty of down time to soak
up the sunshine from the super-sized can-
vas day-beds. For those eager to learn a bit
more about their environs, there are also
daily lectures on Fijian history, culture,
wildlife and efforts to protect the marine
environment.
Each day then ends with a gourmet din-
ner under the stars, and the staff singing
along to the strumming of a ukulele until
the small hours.
On one night, we are privileged to
receive an invite from a tiny village on the
island of Qamea where we meet the village

TRAVEL NOTES
ZOE STRIMPEL

Picardie at Four Seasons Terre Blanche
It’s all go at the Four Seasons Provence this October. On 16-17 Justine
Picardie, author of Coco Chanel: The Legend and the Life, will be in situ to
give two talks about the secret life of Gabrielle Chanel. Superfacialist
Vaishaly will also be at the resort. Pamper your mind and body. £475 per
room per night. www.fourseasons.com/provence.
Eden Roc’s new superluxe spa
Hotel Eden Roc on Lake Maggiore has a brand new sparkling spa that –
following a refurb of CHF20m – will knock your socks off. At over 2,000
sq m, the spa has spectacular views of the lake and mountains, numerous
pools, lounges along the lake, “a sauna world” and whirlpool. Spa pack-
ages from €557 for three nights, www.edenroc.ch/en/.
Go natural in the Canaries
The 4-star Fuerteventura Princess has a fully-clothed policy so you don’t
actually have to bare all in public – but for the more curious, there is the
one dedicated naturist pool, or the clothes-optional beach nearby. From
£629 pp (two sharing) including flights (Gatwick). Call Travelzest’s Peng
Travel, tel: 0845 345 8345; www.pengtravel.co.uk.
CITYA.M. 4 OCTOBER 2010 MEET THE WORLD’S 23
GREATEST PATISSIERE
IN TOMORROW’S
FOOD PAGE

chief and are treated to a performance of

dancing by the warrior boys and Fijian
girls (and despite our British reserve,
encouraged to join in.)
We are also given the chance to take part
in a traditional kava ceremony which
involves a ritual of sitting cross-legged in a
circle on the sandy ground, clapping once,
as is the custom, and then downing a small
coconut shell full of the mildly narcotic liq-
Heaven looks like this: the chilled-out scene on board the Tui Tai, where
sunset is the ideal time for relaxing.
the best ways to see some of the more Above left: Fijians play
remote island groups – especially if you in a river; above: the
want to let someone else take the strain.
Tui Tai expeditions cater for a maximum of
Tui Tai seen from land.
HURRY, OFFER ENDS SOON
22 passengers and depart each week on five

uid. While the grog looks a little bit too
similar to dirty dishwater for my lik-
ing – and is most definitely an acquired
taste – it does leave you feeling pleasant-
ly benign.
With pristine oceans, spectacular
marine life and accessible anchorages
Fiji is an ideal destination for a vessel
like the Tui Tai, and it’s arguably one of
&
and seven-night cruises. Packages partnered
with resort accommodation and private char-
ters are also available.
A seven-night expedition cruise on an all-
inclusive basis (including scuba diving and
spa treatments) costs from £2,530 based on
two people sharing a double room. For more
information go to www.tuitai.com and
www.fijime.com

YOUR PARTNER
Where to stay ming pools, sun-drenched balconies, and steps leading
The Fiji Orchid Inn (www.fijiorchid.com) on the largest straight into the ocean. Highlights include kayaking to the
island of Viti Levu, offers the perfect stopover to relax and island's largest salt lake, and taking on the resort staff

refresh before continuing your journey on to the white
sandy beaches of the outer islands.
Located 15 minutes drive north of Nadi International
Airport, and set in five acres of lush tropical landscape, this
boutique resort has six deluxe bures with large canopied
beds and rain showers, two day rooms, a restaurant, bar,
FLIES FREE!
(placed second in the Fiji Volleyball Championships) in a
late afternoon “friendly” on the beach-front court. A one-
bed Ocean View bure for two people costs from £143 per
night, inclusive of all meals and transfers to and from
Savusavu airport.
* During November, Bridge & Wickers (www.bridgeand-

& SAVE 40%

spa, and large swimming pool encircled by orchids. Prices
for a garden bure start from £218 per person per night,
based on two people sharing.
At the Koro Sun Resort (www.korosunresort.com), a
relaxed, friendly resort in Savusavu, the capital of Fiji's
wickers.co.uk) is offering seven nights on a room-only basis *
in a garden bure at the Fiji Orchid from £1,999 per person UP
based on two sharing including transfers and international TO
flights. It is also offering seven nights for the price of six on
a B&B basis in a raintree bure at the Koro Sun from £1,972

this one
second major island, Vanua Levu, I stayed in one of the per person, based on two sharing. This includes internation-
uber-plush Edgewater Villas which have private swim- al flights, domestic flights and transfers.

Adventure travel
Fiji really is the perfect adventure playground with a wide
array of activities for adrenaline junkies and nature lovers
alike.
It offers fantastic diving, snorkelling, surfing, kayaking,
hiking, biking and trekking, as well as sky-diving, and hot air
ballooning for those who want to experience the archipela-
go from the air.
Travellers looking for a real taste of adventure can scuba
the White Wall of the Somosomo Strait near Taveuni – one
of the world’s top dive sites – or venture into the Beqa
Lagoon off southern Viti Levu where tiger sharks are often
found lurking beneath the surface of calm blue.
Skydive Fiji (www.skydivefiji.com) offers both novices
and experienced skydivers the opportunity to experience a
free-fall skydive from up to 10,000 feet over the beautiful
Denarau Island, while Zip Fiji (www.zipfiji.com) gives visi-
tors the chance to fly through the tree canopy on zip lines
running from platforms up to 45m high at speeds of up to
flies free
60km/h.
Adrenaline junkies can also surf the Cloud Breaker, the
world-renowned six-metre wave found offshore at the
island of Tavarua, or sand-board down the Sigatoka sand
dunes on Viti Levu's southern coast.
For something a little more sedate, join a dawn hot air
balloon flight over the rainforest-covered Fijian highlands
with Adrenaline Fiji (www.adrenalinefiji.com), or, for a
taste of the more traditional, try your hand at Bilibili rafting
on a Fijian bamboo raft. For more information go to
www.fijime.com/thrillme.

How to get there Thursday and Saturday with Air Pacific

Fiji is easily accessible from the UK, and while travelling
does take the best part of a day each end, it's definitely
worth the journey if you can stretch to a two-week holiday,
or use it as a stopover en route to or from Australasia.
Nonetheless, you do need to plan carefully, as it's an
awfully long way to go for things to go wrong (as I discov-
ered when my luggage failed to show up, and had to man-
age without it for almost half a week).
I flew with Cathay Pacific (www.cathaypacific.co.uk)
which flies four times a day from London to Hong Kong
with two weekly interconnecting flights to Fiji every
(www.airpacific.com).
Return flights from London to Fiji start from £1,019 in In conjunction with
Economy Class and £3,270 Business Class.
Internal flights can be arranged through Pacific Sun WORLD’S LEADING ALL
INCLUSIVE RESORTS Appointed Operator
(www.pacificsun.com.fj) which offers regular inter-island
flights.
My outward route to meet the Tui Tai took me from
Nadi to Taveuni (a one-and-a-half-hour flight) which costs
Call 0800 742 742 Visit www.sandals.co.uk
from £125 each way; the return leg was a one-hour flight See your local travel agent
from Savusavu back to Nadi which costs from £100 each
way. * Terms & conditions apply. Book by 15 Oct 2010.
Travel up to 11 June 2011. ABTA & ATOL protected.
 24 Lifestyle | TV& Games CITYA.M. 4 OCTOBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Saints and Scroungers;
BBC News
8pm EastEnders
8.30pm Panorama
9pm CHOICE Spooks
10pm BBC News
10.25pm Regional News
10.35pm Ask Rhod Gilbert
11.15pm Damages
12am Damages; Weatherview
12.50am Sign Zone: My Story
1.20am The Great British Bake Off
2.20am Out of the Frying Pan 3.20am
Penguin Island 3.50am Gears and
Tears 4.20am Britain’s Empty
Homes 4.50am-6am BBC News
6pm Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm Games Today: A round-up
of action from the opening day
in Delhi, India.
8pm CHOICE University
Challenge
8.30pm MasterChef: The
Professionals
9pm Horizon: The Death of the
Oceans?
10pm Genius with Dave Gorman
10.30pm Newsnight; Weather
11.20pm Today at Conference
11.50pm Gareth Malone’s
Extraordinary School for Boys
12.50am BBC News
4am-6am BBC Learning Zone
6pm London Tonight
6.30pm ITV News
7pm Emmerdale
7.30pm Coronation Street
8pm Countrywise
8.30pm Coronation Street
9pm CHOICE DCI Banks:
Aftermath
10pm ITV News at Ten
10.30pm London News
10.35pm Real Crime with Mark
Austin: Britain’s Biggest Heist
11.35pm Stephen Tompkinson’s
Australian Balloon Adventure
12.30am The Zone; ITV News
Headlines
2.30am UEFA Champions League
Weekly 3am The Jeremy Kyle Show
3.50am-5.30am ITV Nightscreen
6pm The Simpsons 6pm Home and Away: Penn’s
6.30pm Hollyoaks condition suddenly deteriorates.
7pm Channel 4 News 6.25pm Live from Studio Five
7.55pm 4thought.tv 7pm Five News at 7
8pm Dispatches 7.30pm How Do They Do It?;
9pm Titanic: The Mission Five News Update
10pm Jamie’s American Food 8pm The Gadget Show; Five
Revolution News at 9
11pm 3 Minute Wonder: New 9pm Rory and Paddy’s Even
Sensations 2010 Greater British Adventure
11.05pm This Is England ’86 10pm FILM Assassins: Thriller, SPOOKS
12.10am Music on 4: 360 starring Sylvester Stallone and BBC1, 9.00PM
Sessions: Linkin Park Antonio Banderas. 1995. The team tries to prevent a member of
12.45am Premier League Poker 12.40am Cops in Crisis the Azakstan Freedom Front from
1.40am FILM Bobby: Indian 1am SuperCasino 4.05am Police releasing a lethal nerve agent in
romantic musical, with Rishi Kapoor. Interceptors 4.55am Animal London. Peter Firth stars.
1973. 4.35am-6.10am FILM The Rescue Squad 5.10am Michaela’s
Private Life of Henry VIII: Historical Wild Challenge 5.35am-6am
biopic, with Charles Laughton. 1933. Michaela’s Wild Challenge

SKY SPORTS 1 2am Live WWE: Late Night – 12.30am CSI: CSI 1.30am 3.05am A Shot at Love with 3.50am Raging Planet 4.40am
SATELLITE & CABLE

6pm Live Darts 12am How The
2010 Ryder Cup Was Won
2am FIFA Futbol Mundial
2.30am Sports Unlimited
3.30am Watersports World
4.30am Max Power 5.30am-
6am FIFA Futbol Mundial
SKY SPORTS 2
7pm Netbusters 7.30pm Live
Speedway 10pm Netbusters
10.30pm SPL Round-Up 11pm
Premier League Review 12am
Soccer AM: The Best Bits 1am
15 Years of the European Cup
2am Golfing World 3am-5am
How the 2010 Ryder Cup Was
Won
SKY SPORTS 3
7pm 15 Years of the European
Cup 8pm How the 2010 Ryder
Cup Was Won 10pm WWE:
Late Night – Bottom Line 11pm
WWE: Late Night – Afterburn
12am WWE: NXT 1am WWE:
Vintage Collection
Raw 4.15am-4.45am Angling
BRITISH EUROSPORT
6.45pm Champions Club 8pm
Football 8.45pm World
Superbikes 9.45pm MotoGP
10.45pm Eurogoals 11.15pm
Champions Club 12.30am-
12.40am WATTS
ESPN
6.30pm Talk of the Terrace.
Football debate show. 7.45pm
Live NBA Basketball 10.45pm
Between The Lines. 11.15pm
ESPN Scottish Premier League
Kicks. 11.30pm ESPN Game of
the Week 12am NFL: Monday
Night Countdown 1.30am Live
NFL: Monday Night Football
4.30am-5am Press Pass 2010
LIVING
7pm Baggage 8pm Dating in the
Dark US 9pm Britain’s Next Top
Model 10.30pm Hairy Women
11.30pm Criminal Minds
Charmed 3.25am Trolley
Dollies 3.50am Diet on the
Dancefloor 4.40am The Jerry
Springer Show 5.30am-6am
Home Shopping
BBC THREE
7pm Merlin 7.45pm Doctor
Who 8.30pm E20 9pm Cherry
Goes Drinking 10pm EastEnders
10.30pm Him and Her 11pm
Family Guy 11.45pm Cherry
Goes Drinking 12.45am Him
and Her 1.15am E20 1.45am
My School Prom 2.45am
Cherry Gets Married 3.40am
Snog Marry Avoid? 4.10am-
5.10am My School Prom
E4
7pm Hollyoaks 7.30pm Friends
9pm One Tree Hill 10pm The
Inbetweeners 10.35pm School
of Comedy 11.05pm Shameless
12.20am A Shot at Love with
Tila Tequila 1.15am Scrubs
2.05am Shameless
Tila Tequila 3.50am Samantha Unsolved History 5.30am-6am
Who? 4.10am The Hills How Does That Work?
4.35am-6am Switched
DISCOVERY HOME &
HISTORY HEALTH
7pm How the Earth Was Made 7pm Extreme Pregnancy 8pm UNIVERSITY CHALLENGE
8pm America: The Story of the The Fat Family 9pm Chopper BBC2, 8.00PM
US 9pm Pawn Stars 10pm Rescue 9.30pm Emergency Merton College, Oxford, takes on St
American Pickers 11pm The 10pm Mystery ER 11pm Life or John’s College, Cambridge, in the
Nostradamus Effect 12am Death: Medical Mystery 12am student quiz. Presented by Jeremy
America: The Story of the US Chopper Rescue 12.30am Paxman.
1am The Lost Evidence 2am Emergency 1am Mystery ER
How the Earth Was Made 3am 2am Life or Death: Medical
Britain’s Lost Mega-Fortress Mystery 3am The Fat Family
4am-5am Mountbatten: Death 4am A Baby Story 5am-6am
of a Royal Bringing Home Baby
DISCOVERY SKY1
8pm How Do They Do It? 8pm Best of Oops TV. Selection
8.30pm How It’s Made 9pm of home videos and out-
Mythbusters 10pm Is It takes. 9pm NCIS: Los
Possible? 11pm How the Angeles 11pm Alex Zane’s Guest DCI BANKS: AFTERMATH
Universe Works 12am Bear List 11.30pm Law & Order ITV1, 9.00PM
Grylls: Born Survivor 1am 12.30am Road Wars 2.25am The death of serial killer Marcus Payne
Deadliest Catch 2am Rory Street Wars 3.20am The 4400 makes the task of finding his accomplice
McGrath’s Best of British 4.15am Vroom Vroom 5.10am- harder and holds up the search for
Engineering 3am Weaponology 6am Sell Me the Answer Leanne Wray. Stephen Tompkinson stars.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
15 33 4 17 38 9 17
7 20 3
6  
35 10
Place the numbers from 1 to 9 in each empty cell so that each 28  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 8 29
19 39 15
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 17 28
   
above or to the left of it. 28 11
You can only use the digits 1-9 12 39  
  and you must not use the
30
12 10    
same digit twice in a block. 14
   The same digit may occur 22 3 

    more than once in a row or

column, but it must be in a 7 22
21
17
8

24 13
   separate block.
9 10 12
6 23
    11 23 16
 

   ACROSS DOWN
1 Burnt remains (3) 1 Sign of the zodiac,
   
   WORDWHEEL R A
3 Second totting up of votes
in a close election (7)
the ram (5)
2 Women’s
quarters (5)
Using only the letters in the Wordwheel, you have 6 Record-keeper (9)
  ten minutes to find as many words as possible,
S L 8 Before, poetically (3) 3 Frayed (6)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 10 Season of the year (6)
13 Bellow (4)
4 Got too large for (7)
5 Pitch (3)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
H T 14 Love intensely (5) 7 Died down (6)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
I B 16 At another time (4) 9 Rivulet (6)
17 Pump that draws liquid 11 Handcuff (7)
QUICK CROSSWORD 1 3 2 9 7

6 $ / 7 ( 7 + 2 6
6 3 2 4 1 8 2 9 SUDOKU         
from underground
storage tanks (6)
12 Steal from a
person (3)
9 8 9 3 8 6 4 7         
$ + 2 3 6 2 7
/ , ) ( 3 / ( 8 5 9 5 3 1 2
        
20 Lyric poem (3) 15 Go round and
7 4 5 4 9 7 round (6)
( 2 1 3 8 5 3 2 6 (
         21 Extortion of money
6 , 5 ( ( & 2 ' 2 3 8 1 6 7
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         by threats to divulge 18 Of the sun (5)
6 7 $ 7
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WORDWHEEL          discrediting information (9) 19 Prove to be false (5)
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9 6 8 9 7 8 6 4         
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was ORDINANCE          23 Long-tailed rodent (3)
7 , ( , 1 ' , & ( 1 6 1 5 2
 Sport
Revealed: The REAL Games
Ourexclusivepicturesand
athlete’s testimony show
Commonwealth Games
facilities are surprisingly
good. By Frank Dalleres
D
IRTY bathrooms, unfinished
balconies, a dog’s filthy paw-
prints on a bed: the images
that spread from Delhi across
the globe little more than a week ago
and told us there was something seri-
ously wrong with preparations for
the Commonwealth Games.
Coming in the week in which a
Saracens boss Venter unhappy despite
earning revenge over final opponents
SARACENS 26
LEICESTER TIGERS 20
▲
RUGBY UNION
BY JON COUCH
FLY-HALF Derick Hougaard used his
boot to great effect again as Saracens
earned a measure of revenge for last
season’s Premiership final defeat to
Leicester.
First-half tries from Schalk Brits
and Richard Wigglesworth, both con-
verted by former Tigers man
footbridge collapsed outside the
main stadium, injuring dozens of
workmen, and a section of ceiling
gave way in the weightlifting arena,
it contributed to a growing fear that
the event would have to be dramati-
cally cancelled at the 11th hour.
Scores of stars pulled out, suddenly
concerned by injuries, as Indian offi-
cials uttered hurried reassurances
and international Games chiefs
squirmed when asked how it had got
to this stage.
But quietly the work has been done
and the Games are on. Last night
Prince Charles was among those at
the Jawaharlal Nehru Stadium for
the opening ceremony and events
will get underway today.
And now City A.M. can reveal exclu-
sive pictures from inside the much-
Hougaard, helped the home side go
in 17-7 up at half-time. Hougaard’s
lethal kicking then allowed Sarries to
open up a 26-10 lead which would
prove decisive, despite a Leicester try
from Lucas Amorosino and the boot
of Billy Twelvetrees.
Victory kept up Saracens’ healthy
start to the campaign, leaving them
third behind London Irish and
Northampton, but director of rugby
Brendan Venter was not happy at his
side’s failure to secure a bonus point.
“I’m a bit deflated to be honest
because we should have had them
and finished the job much earlier,”
said Venter. “Leicester were conceding
penalties because we had the ball for
DROG’S ADDICTION
DIDIER FEEDS HABIT OF SCORING
PAST ARSENAL IN 2-0 WIN: PAGE 26
maligned athletes village, showing
outstanding accommodation fin-
ished to the highest standards and
testimony from one British athlete
that facilities are “better than any-
thing at home”.
Sarah Thomas, who represents
Wales at badminton, admits she was
stunned at the excellent level of
accommodation that greeted her
when she arrived on Tuesday, having
seen swathes of negative coverage in
the days before she flew out.
“All I can comment on is how great
the village and the whole games is. I
know in the UK it is getting really
negative media but out here it’s noth-
ing like they are portraying it,” said
Thomas.
“The accommodation was a huge
shock to us, after seeing all the bad
sustained periods but we butchered a
couple of sitters. We must learn to
put teams away when we have out-
played them as much as we outplayed
Leicester.”
Venter’s opposite number David
Cockerill admitted his team had been
outplayed and blamed it in part on
absences due to injury and enforced
resting of Elite Player Squad mem-
bers. “I thought we had a team to win
this game but having seen it I’ll take
that losing bonus point,” said
Cockerill. “We have a number of play-
ers missing and we’ve played
Northampton, Wasps and Saracens –
so when everyone comes back I’m
convinced we will get better.”
25
Results
Drogba 39
Alex 85
BARCLAYS PREMIER LEAGUE
Chelsea.................................(1) 2 Arsenal ..........................(0) 0
Att: 41,828
Liverpool............................(0) 1 Blackpool......................(2) 2
Kyrgiakos 53 Adam 29 (pen)
Att: 43,156 Varney 45
Man City..............................(1) 2 Newcastle.....................(1) 1
Tevez 18 (pen) Gutierrez 24
Johnson 75 Att: 46,067
P W D L F A GD Pts
Chelsea 7 6 0 1 23 2 21 18
Man City 7 4 2 1 9 3 6 14
Man Utd 7 3 4 0 16 9 7 13
Arsenal 7 3 2 2 16 9 7 11
Tottenham 7 3 2 2 8 6 2 11
West Brom 7 3 2 2 9 12 -3 11
Stoke 7 3 1 3 8 9 -1 10
Aston Villa 7 3 1 3 9 12 -3 10
Blackpool 7 3 1 3 11 15 -4 10
Fulham 7 1 6 0 8 7 1 9
Sunderland 7 1 5 1 7 7 0 8
Bolton 7 1 5 1 10 11 -1 8
Blackburn 7 2 2 3 7 8 -1 8
Wigan 7 2 2 3 4 13 -9 8
Newcastle 7 2 1 4 10 10 0 7
Birminghm 7 1 4 2 7 10 -3 7
Everton 7 1 3 3 6 7 -1 6
Liverpool 7 1 3 3 7 11 -4 6
Wolves 7 1 2 4 7 12 -5 5
West Ham 7 1 2 4 5 14 -9 5
CRICKET
FIRST TEST MATCH.-Mohali: Australia 428 (S R Watson
126, T D Paine 92, R T Ponting 71, Z Khan 5-94) (151.4
overs) India 405 (S R Tendulkar 98, S K Raina 86, R Dravid
77, V Sehwag 59, M G Johnson 5-64) (108.1 overs).
GOLF
38TH RYDER CUP (Celtic Manor Resort, Newport)—
Foursomes (Europe names first): Luke Donald & Lee
Westwood bt Steve Stricker & Tiger Woods 6 & 5; Graeme
Our pictures are in stark McDowell & Rory McIlroy bt Zach Johnson & Hunter Mahan
contrast to those circulat- 3 & 1. Fourballs: Padraig Harrington & Ross Fisher bt Jim
ed just over a week ago Furyk & Dustin Johnson 2 & 1; Peter Hanson & Miguel Angel
(inset). Jimenez bt Bubba Watson & Jeff Overton 2 up; Edoardo
Inset picture: BBC Molinari & Francesco Molinari v Stewart Cink & Matt
Kuchar Match Halved; Ian Poulter & Martin Kaymer bt Phil
Mickelson & Rickie Fowler 2 & 1. Europe 9 1/2 USA 6 1/2.
media before we got here. We were
expecting it to be terrible but we TODAY’S DIARY
were pleasantly surprised. The rooms
are very spacious and clean. The only
ATHLETICS
2010 Commonwealth Games (Delhi).
problems we have had are with the
wifi and our air con dying. All the CRICKET
Welsh team are in one block, and
there is great team spirit here.”
Thomas, at 17 one of the youngest
First Test Match—day 4 of 5: India v Australia (Mohali).
GOLF
British competitors in Delhi, has also
been delighted by the quality of facil-
The 2010 Ryder Cup (Celtic Manor, Newport, Wales).
SPEEDWAY
ities at her disposal as she prepares
Elite League Grand Final 2nd Leg: Poole v Coventry
for a crack at a gold medal. (7.30pm).
“The training facilities are good,”
she adds. “We are training once a day TENNIS
in a hall which is better than any- ATP & WTA China Open (Bejing).
thing we have at home. Then we train ATP Rakuten Japan Open Championships (Tokyo,).
again in the stadium, which is fantas-
tic for playing and spectating. The
only problem is the facilities are 45 SPORTS EDITOR JON COUCH
minutes away from the village.” email sport@cityam.com
SPORT | IN BRIEF
Eriksson appointed Foxes boss Workforce wins Prix de l’Arc
FOOTBALL: Former England boss Sven- HORSE RACING: Derby winner
Goran Eriksson believes he can lead Workforce added the Prix de l’Arc de
Leicester back into the Premier League Triomphe after seeing off Japanese chal-
within two years. lenger Nakayama Festa at Longchamp.
Eriksson took charge of the Victory was trainer Sir Michael
Championship strugglers yesterday after Stoute’s first in the Arc and another
agreeing a two-year contract to succeed
Paulo Sousa, who was sacked on Friday.
feather in the cap of jockey Ryan Moore.
Sarafina pipped favourite Behkabad to
“I think it’s realistic because they’re third place. Earlier, Goldikova won a
wealthy owners and they want to have
the club in the Premier League,” said the
record 11th European Group One contest
by claiming the Prix de la Foret.
Swede, who last coached Ivory Coast at
the World Cup over the summer. Capello to name England squad
“The stadium is there, the supporters FOOTBALL: England head coach Fabio
are there, the training ground is there, so Capello is expected to recall captain Rio
why not? It’s going to be a big go and I Ferdinand and John Terry when he
like to try. I think it’s possible.” names his latest squad today.
Eriksson was in the stands at the The pair missed last month’s wins over
Walkers Stadium on Saturday to see the Bulgaria and Switzerland but are fit
Foxes climb off the bottom by beating again for next week’s Euro 2012 qualifier
Scunthorpe and will take charge of his against Montenegro. Newcastle’s Andy
first game against the Thailand national Carroll is tipped for a first senior call-up,
team at the weekend. despite being dropped yesterday.
 26 Sport | Football
Drogba shows Arsenal how to finish
as Wenger rues spurned chances
Chelsea striker keeps up
amazing record against
Gunners as Blues increase
lead at top of the table
CHELSEA 2
ARSENAL 0
▲
PREMIER LEAGUE
BY FRANK DALLERES AT STAMFORD BRIDGE
ARSENAL manager Arsene Wenger
blamed his side’s wastefulness in
front of goal after Didier Drogba kept
up his incredible scoring record
against the Gunners to extend
Chelsea’s lead at the top of the table
to four points.
Drogba deftly backheeled Ashley
Cole’s low cross in off both posts just
before half-time, and the Blues weath-
ered heavy pressure before clinching
victory in the 85th minute through
Alex’s thunderbolt free-kick.
The visitors, out-muscled and
soundly beaten home and away by
Chelsea last season, gave as good as
they got on this occasion and had sev-
eral chances to go ahead and, once
trailing, equalise.
But those opportunities were
spurned, including two in the first
minute that fell to Marouane
Chamakh and Laurent Koscielny, and
Chelsea showed all the ruthlessness
of old to punish the Gunners and pull
seven points clear of them with just
seven games played.
“We have demonstrated that you
can play well and lose the game. The
game should have been over before
we started. We had two chances in the
first minute, one very easy,” said
Wenger. “We missed too many
chances and at that level you need to
be more clinical. Their strikers were
more clinical and that’s what made
the difference. Apart from that I
Liverpool in bottom three
after Blackpool shocker
LIVERPOOL 1 possible 12 in the last four Premier
BLACKPOOL 2
PREMIER LEAGUE
▲
LIVERPOOL manager Roy Hodgson
insists he is not thinking about rele-
gation despite slipping into the bot-
tom three with a shock home defeat
by Blackpool.
Goals from Charlie Adam and Luke
Varney put the top-flight newcomers
in charge and they held for a famous
victory despite Sotirios Kyrgiakos
reducing the deficit.
The Reds have made a disastrous
start to the season and now lie 18th,
believe Chelsea suffered a lot and
were on the ropes for long periods.”
Chelsea might easily have added to
their two fine goals, Nicolas Anelka
spurning one notable chance, but
will be content to have emphatically
re-established their authority in the
top flight with relative ease and at
such an early point in the campaign.
While it may be premature to write
off Arsenal’s title chances, this result
will do nothing to convince their
doubters that they are better
equipped to mount a lasting chal-
lenge this season. A win would have
changed all that, and they ought to
have been in front inside 60 seconds,
first Chamakh heading wide, albeit
having taken just two points from a
League games.
“Their great result is our night-
mare result. It is a very bad day and
there is nothing I can say. At the
moment things look bleak and really
bad and it is difficult for me to put a
bright face upon it,” said Hodgson.
“But I really don’t think my con-
cerns are with relegation, my con-
cerns are that we are not playing to
our full potential. I am not going to
think too much about relegation
with 31 games to go.”
Blackpool went ahead through
Adam’s penalty and on the stroke of
half-time Varney doubled the lead
with a powerful finish. Kyrgiakos
headed home a Steven Gerrard free-
kick soon after the restart.
deflected, and then, incredibly,
Koscielny nodding over unchallenged
from inside the six-yard box. Drogba
stung Lukasz Fabianski’s palms as the
half ebbed and flowed intensely,
before Cole capitalised on confusion
caused by a quick free-kick to cross
low and the forward – the Gunners’
nemesis – touched in his 13th in 13
games against Arsenal.
Wenger’s men started the second
half in the mood to make amends but
it was Chelsea who almost scored
again, Anelka streaking clear and
evading Fabianksi only to hit the side-
netting. The oft-criticised Pole was in
solid form, however, and saved again
from Anelka before Chamakh wasted
City go second as Hughton
rails at ref over penalty calls
MANCHESTER CITY 2 awarded City a questionable penalty,
NEWCASTLE UTD 1 appeal from the Magpies after Joleon
PREMIER LEAGUE
▲
NEWCASTLE manager Chris Hughton
criticised referee Martin Atkinson
after seeing midfielder Hatem Ben
Arfa suffer a suspected broken leg in a
narrow defeat at Eastlands.
Hughton was unhappy at the tack-
le from Nigel de Jong that con-
tributed to Ben Arfa’s injury after just
five minutes, and for which the
Dutchman was not booked. And he
a superb chance to equalise, leaping
highest but nodding a yard wide of
the near post.
Five minutes form time they were
punished when Drogba was fouled
and Alex unleashed an unstoppable
free-kick that went inside the wall
but rose away from Fabianski and
into the top corner.
TOP FOUR
TEAM PLD W D L F A PTS
Chelsea 7 6 0 1 23 2 18
Man City 7 4 2 1 9 3 14
Man Utd 7 3 4 0 16 9 13
Arsenal 7 3 3 1 16 9 11
was even more irate after Atkinson
from which Carlos Tevez took the
lead, and then turned down a later
Lescott felled Shola Ameobi.
“It is an injustice we have come out
with a result like that,” said Hughton.
“Games like this are difficult enough
but you need decisions to go your way
and with those two incidents, the ref-
eree made two horrendous ones.”
On Ben Arfa’s injury and De Jong’s
challenge, Hughton added: “It does
not look good. He has gone to hospi-
tal and we will make an announce-
ment in due course but it looks like
he has broken his leg. Everyone will
have their own opinion but it was a
CITYA.M. 4 OCTOBER 2010
Drogba (left) put Chelsea ahead; Wenger
(top) slammed his strikers; Ancelotti
(above) attended despite his father’s death.
Pictures: ACTION IMAGES, GETTY
Players wanted to win
for grieving Ancelotti,
says No2 Wilkins
CHELSEA assistant manager Ray
Wilkins said the players put in extra
effort yesterday for manager Carlo
Ancelotti, who coached the team yes-
terday despite his father passing
away last week.
“It’s been a very tough week for
him but today we saw from the work
ethic the boys had how much they
wanted to win this game,” he said.
Didier Drogba once again proved a
thorn in Arsenal’s side, netting his
13th goal in 13 games against the
Gunners. “Didier Drogba’s record is
phenomenal,” Wilkins added. “The
goal [he scored] is what he’s all bout.
When he’s on fire as he was today he
makes a difference.”
tackle that did not need to be made.”
City assistant manager Brian Kidd
insisted De Jong had not intended to
harm Ben Arfa, after a victory,
secured by Adam Johnson’s winner,
which lifted them to second.
Tevez put the home side in front on
18 minutes, after Atkinson judged
Mike Williamson to have fouled the
Argentina striker. If the decision was
debatable, there was no arguing with
his explosive finish. Moments later,
however, Newcastle drew level, Jonas
Gutierrez lashing a similarly unstop-
pable volley past Joe Hart and into the
top corner. Substitute Johnson won it
15 minutes from time when he cut in
from the right and beat two men
before firing low into the far corner.
CITYA.M. 4 OCTOBER 2010 Sport | Golf 27

Europe scent
victory after
phenomenal
fightback
▲

RYDER CUP just lose but to lose that convincingly,

BY FRANK DALLERES
EUROPE will take a commanding 9 ½-
6 ½ lead into today’s historic final ses-
sion after turning this Ryder Cup on
its head with an irrepressible charge
yesterday at Celtic Manor.
Trailing the United States 6-4
overnight, Colin Montgomerie’s men
signalled their determination to
reclaim the trophy by winning all but
one of the six matches and halving
the other.
The English pairing of Lee
Westwood and Luke Donald and the
Northern Irish duo of Rory McIlroy
and Graeme McDowell both complet-
ed foursomes victories, over Steve
Stricker and Tiger Woods, and Zach
Johnson and Hunter Mahan.
And there were further triumphs
when the fourballs were concluded
for Padraig Harrington and Ross
Fisher, Miguel Angel Jimenez and
Peter Hanson, and Ian Poulter and
Martin Kaymer.
Brothers Francesco and Edoardo
Molinari halved their fourball against
Stewart Cink and Matt Kuchar, but
even that was tinged with defeat for
the beleaguered Americans after
Francesco holed a decisive birdie at
the last.
“That’s incredible what happened
there,” said Montgomerie. “All credit
to every one of them. This is what the
word momentum is all about. When
Woods loses 6&5 that is a serious
defeat for the rest of the American
team. He is their No1 guy – he’s No1
in the world. But for him to lose, not
helped us through today. The best I
thought we could do was 8-8.”
It was day of ominous milestones
for US captain Corey Pavin. The defeat
Woods suffered at the hands of the
outstanding Westwood and Donald
was the heaviest of the 14-time major
winner’s matchplay career. World
No2 Phil Mickelson, who alongside
youngster Rickie Fowler lost 2&1 to
Poulter and Kaymer, has now lost
more Ryder Cup matches than any
American in history: 17 from 33. Europe star Westwood
Pavin said: “I am really proud of the (main), captain
guys because they fought hard and Montgomerie (top), US
hopefully we can figure out how to do skipper Pavin (above)
it.” and No1 Woods (left).
Heavy rain, the like of which
wiped out much of Friday’s play, Pictures: PA, GETTY
again delayed yesterday’s action and
means the competition will be
decided on a Monday for the first
time in its 83-year history. SESSION 3 RESULTS OVERALL RESULTS
When play did eventually FOURSOMES SESSION 1: FOURBALLS
begin, the two foursomes L Donald / L Westwood won 6&5
matches were the first to be EUROPE 1 1/2
against S Stricker / T Woods UNITED STATES 2 1/2
wrapped up, with
McDowell and McIlroy G McDowell / R McIlroy won 3&1
against Z Johnson / H Mahan
SESSION 2: FOURSOMES
earning their first win
together at the third EUROPE 2 1/2
attempt.
FOURBALLS UNITED STATES 3 1/2
In the fourballs, Fisher P Harrington / R Fisher won 6&1
against J Furyk / D Johnson SESSION 3:
then excelled alongside
Harrington to help see off
FOURSOMES & FOURBALLS
P Hanson / MA Jimenez won 2Up
a dangerous American EUROPE 5 1/2
against B Watson / J Overton
pairing of Jim Furyk and UNITED STATES 1/2
Dustin Johnson, prompt- E Molinari / F Molinari halved
ing his Irish playing part-
ner to call the rookie’s
against S Cink / M Kuchar TOTAL
I Poulter / M Kaymer won 2&1 EUROPE 9 1/2
display “the best golf anybody’s against P Mickelson / R Fowler
seen at the Ryder Cup”. UNITED STATES 6 1/2

Pavin defiant as Montgomerie goes for jugular

▲

RYDER CUP Europe need five points to reclaim Brookline in 1999.

BY FRANK DALLERES
UNITED STATES captain Corey Pavin
insists his team will fight tooth and
nail to retain the Ryder Cup when the
decisive singles session gets under-
way today.
The holders are up against it, need-
ing 7 ½ points from the 12 on offer to
hang onto the trophy they claimed at
Valhalla two years ago.
And Europe skipper Colin
Montgomerie appears to be going for
the jugular by naming a host of his
strongest performers at the top of his
order.
But Pavin said: “We have got 12 of
the best players in the world, they
have 12 of the best players in the
world and in match play anything
can happen. The one thing I can guar-
antee you is Team USA is going to
come out tomorrow and play hard
and try to win the Ryder Cup. We are
going to come out firing, and if we do
Rory McIlroy is up second for Europe this morning. Picture: PA I think we have a chance.”
the cup and Montgomerie looks to be
aiming to maintain the momentum
his team generated in yesterday’s
remarkably one-sided session.
Lee Westwood, arguably Europe’s
best player so far, will tee off in the
first match against world No4 Steve
Stricker, and is followed by
Montgomerie’s next three highest-
ranked players: Rory McIlroy, Luke
Donald and Martin Kaymer.
“They are going to come out
tough,” said Ian Poulter, who is fifth
up against Matt Kuchar. “They are a
great US team and you’ve got to
expect them to come out quick. So we
need to keep the blue on the board
and hit the right shots at the right
time and play some good golf.”
The US need an almighty turn-
around to claim their first triumph
on European soil since 1993, but
Montgomerie will need no remind-
ing that the States overturned a 10-6
deficit to win in magnificent but
somewhat tainted fashion at
Padraig Harrington, scheduled to
play the penultimate match against
Zach Johnson, quipped: “It is the
Sunday we have probably all dreamt
about. Unfortunately there is a
Monday.”
ORDER OF PLAY | SINGLES
0905: Westwood v Stricker
0917: McIlroy v Cink
0929: Donald v Furyk
0941: Kaymer v D Johnson
0953: Poulter v Kuchar
1005: Fisher v Overton
1017: Jimenez v Watson
1029: F Molinari v Woods
1041: E Molinari v Fowler
1053: Hanson v Mickelson
1105: Harrington v Z Johnson
1117: McDowell v Mahan
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