Cityam 2011-09-13

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www.cityam.com Issue 1,466 Tuesday 13 September 2011 FREE
BANKS BASHED
THE UK yesterday took a radical step towards
imposing new regulations that will cost banks
billions and risk eroding the competitiveness
of the City.
The Independent Commission on Banking
(ICB) unveiled a report that its chair Sir John
Vickers said goes further than international
regulation.
The ICB says that the reforms will cost banks
between 4bn and 7bn a year a number
that lenders claim dramatically underesti-
mates the impact but will benefit the econo-
my because of greater financial stability.
Its good for the City too, Sir John insisted.
A more stable domestic banking system will
underpin, not jeopardise, the UK as a global
financial centre.
Chancellor George Osborne endorsed the
report and promised to pass legislation to put
it in force this year, with banks given until
2019 to implement the changes fully.
Critics suggested the move, which will see
retail banks hived off into separate sub-
sidiaries and forced to treat their investment
banking arms as third parties, could in fact
exacerbate financial instability.
Clifford Chance partner Simon Gleeson
pointed to the risks of mortgage and commer-
cial real estate lending, saying: The activities
of the ring-fenced bank are likely to be riskier
than the activities of the wholesale bank.
Some of the costs will stem from measures
that are already due to come into force due to
international regulatory changes, such as the
imposition of losses on bondholders rather
than taxpayers if a bank gets into trouble.
Behind the scenes, several banking sources
expressed frustration that the Vickers report
adds a layer of complication to the existing
onslaught of regulation.
ALLISTER HEATH: P4, MORE: P4-11
BY JULIET SAMUEL
BANKING
Sir John Vickers

says banking
reforms will cost
banks 4-7bn a year
but will be good for
the City
Picture: REX
Vickers hits UK lenders with
a raft of new rules and limits
French bank shares hammered
despite SocGens reassurances
SOCIETE Generale attempted to defend its
tumbling stock yesterday, detailing plans to
cut costs and sell assets to free up 4bn
(3.4bn) in fresh capital. Yet investors still
fled from the banks shares, which sank a
further 10.8 per cent during the day.
French banks were hammered on fears
over their exposure to Greek debt, as con-
cern for the ailing Eurozone economy
peaked. Worries spread that French banks
could face a downgrade from leading credit
rating agency Moodys.
BNP Paribas was the hardest hit among
the French banks, losing 12.4 per cent, while
Credit Agricole shed 10.6 per cent.
SocGen chief executive Frederic Oudea
yesterday denied vehemently that any dis-
cussions were taking place regarding a possi-
ble government rescue of the bank. Oudea
blamed market volatility and nervousness
for its recent downturn.
The bank plans to sell assets primarily in
its asset management and specialised finan-
cial services divisions.
WEALTH MANAGEMENT: PAGE 25
Hundreds of City jobs to go
as BofA cuts costs by $5bn
BANK of America chief executive Brian
Moynihan yesterday said the bank would take
drastic action to cut $5bn (3.1bn) from its
annual cost base.
Moynihan told a New York conference BofA
would sell assets and slash 30,000 jobs in the
first phase of an overhaul to put it on a firmer
financial footing and convince investors it can
survive a series of damaging lawsuits.
The sale of assets such as some credit card
businesses, and job cuts in its US retail divi-
sion and technology centres, will strip BofA of
its position as the biggest US bank.
The City will also suffer, as several hundred
of BofAs 6,500 London-based employees are to
be made redundant. But Moynihan denied
that BofA would sell its investment bank
Merrill Lynch, and City A.M. understands that
Londons investment banking strength means
it will bear less than 300 job losses in this
phase of cuts at least.
BofA has sold off $40bn of assets and accept-
ed $5bn from Warren Buffett as it faces legal
claims related to its sale of mortgage-backed
securities. MORE ON THE CUTS: PAGE 14
BY JULIAN HARRIS
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News
4 CITYA.M. 13 SEPTEMBER 2011
Yet again the emperor has no clothes
SURELY not. I mean, the Vickers
Independent Commission on Banking
couldnt possibly be a case of the
emperor having no clothes, could it?
Yet as I read through the 358-page
tome, a conclusion I couldnt quite
believe kept staring me in the face. If
Vickers had never existed, many of the
biggest reforms his report endorsed
on capital requirements, bail-in bonds,
resolution, leverage caps and the like
would have happened anyway, albeit
in slightly different form. Page after
page is devoted to justifying what is
happening anyway as a result of
domestic or global reforms. Sure, for
those with no knowledge of the
dozens of radical new rules being
introduced, and the long-overdue shift
towards ensuring taxpayer guarantees
are removed, it will have sounded new
and exciting, the biggest revolution in
banking for decades. And of course,
the industry is facing huge change.
But even the 2019 deadline is similar
to the Basel III deadline, and most
banks may already have enough equity
and certainly enough loss-absorbing
capital to meet the new rules. Higher
funding costs from the removal of the
implicit subsidy from state guarantees,
the bulk of the official cost of Vickers,
would have happened anyway under
UK and G20 plans. These particular
costs are welcome as they are about
introducing more market rigour and
eliminating moral hazard.
But there is one major difference
between what Vickers proposes and
the emerging global consensus. Nearly
everybody wants to make even the
biggest banks easily resolvable in a cri-
sis via a new kind of bankruptcy law
which allows firms to be wound-down
gently while hitting shareholders and
some bondholders and protecting tax-
payers, depositors and the payments
system. Where Vickers differs is that
he thinks the best structural reform is
a ring-fence unfortunately, he never
substantiates this claim.
The ring-fence has no real purpose
and will merely add a layer of complex-
ity to global reforms while damaging
big banks. Living wills will be harder to
write. Other reforms such as opera-
tional subsidiarisation would have
worked better. As a brilliant analysis by
Simon Gleeson of Clifford Chance
points out, details of the ring-fence
remain vague. The view that a ring-
fenced bank could continue to provide
clients with a full service on an
agency basis for its wholesale bank
does not seem compatible with the
idea that its relationship with its
wholesale bank should be on an arms-
length, unpreferred basis. It is equally
hard to reconcile the idea that ring-
fenced banks should be able to con-
duct treasury activities with the view
that they shouldnt be allowed to
engage in derivatives or trading. There
is another problem: it could cripple
private banking in London. Individuals
and small firms will apparently be pro-
hibited from banking with any entity
other than a ring-fenced bank or at
least it will be tricky for them to do so.
Perhaps most damningly of all, EU
banks will be able to operate branches
in the UK bypassing the ring-fence.
There are many other issues.
Making depositors senior creditors is a
good idea but it will hike the cost of
services such as rent to the retail oper-
ations, as providers will worry about
losing money. If what matters is total
loss-absorbing capacity, why hike the
equity component to higher than Basel
III? Radical reforms are imperative
shame that Vickers chose to tag com-
petitiveness-destroying measures onto
other, sounder changes.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
LLOYDS Banking Group will not be
required to get rid of more branches
than the current tranche of 632 it is
currently selling, the Vickers report
said yesterday.
The concession to Lloyds marks a
departure from the Independent
Commission on Bankings previous
position that the taxpayer-backed
company should substantially raise
the number of branches put on the
block to increase competition.
But the ICB said instead that the
emergence of a strong challenger
bank should be fostered through the
existing asset sale in light of further
evidence.
The Co-operative Bank, NBNK and
Sun Capital are seen as the front-run-
ners in the race to buy the 632
branches currently on the market.
Lloyds will not
be forced to sell
more branches
BANKING
EDITORS LETTER
ALLISTER HEATH
Editorial Statement
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self-regulation overseen by the Press Complaints
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
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ANALYSIS l Barclays PLC
p
Jul Aug Sep
250
225
200
175
150
141.65
12 Sept
ANALYSIS l HSBC Holdings PLC
p
Jul Aug Sep
620
600
580
560
540
520
500
492.55
12 Sept
ANALYSIS l Royal Bank of Scotland Group PLC
p
Jul Aug Sep
40
35
30
25
20
20.77
12 Sept
ANALYSIS l Lloyds Banking Group PLC
p
Jul Aug Sep
50
45
40
35
30
30.56
12 Sept
l Barclays could suffer a severe hit from
the ring-fence proposed by the
(ICB).
l In particular, the policy will prove
costly for the bank because it prevents
lucrative cross-selling between its retail
and investment banking arms and
requires the two sides of the business to
interact as third parties to one another.
l However, it could have been worse for
the bank. It will at least be permitted to
transfer capital between its investment
bank and its retail bank, subject to mini-
mum capital requirements. And it will be
permitted to put its corporate lending
business on either side of the fence, and
to switch its location from year to year.
l RBS is despondent about the Vickers
proposals, which it views as creating an
impenetrable barrier between two
interlinked parts of its business. It could
suffer the most severe impact to its
bottom line from the report.
l The bank is also worried that the pol-
icy will give its non-universal banking
rivals an unfair advantage because they
will have to undergo minimal structural
change.
l And it argues that a ring-fence could
in fact contribute to financial instability
by concentrating risky activities in the
retail bank. The bank believes that forc-
ing senior debtholders to take losses in
a crisis would have delivered most of
the necessary advantages.
l Of all the main banks, Lloyds is happiest
with the outcome of the final report. That
is because the Commission performed a
U-turn on its recommendation for the
banks sale of 632 branches.
l Whereas in its April interim report, the
ICB said that Lloyds should substantially
enhance its sale to include more branch-
es, it has now shifted this stance to wave
through a sale so long as it creates a
viable challenger bank with at least six
per cent of the personal current account
(PCA) market by 2015. In effect, Lloyds
believes that this recommendation will
have little bearing on the sale.
l In addition, most of Lloyds activities
will be inside the ring-fence, requiring min-
imal structural change.
l HSBC will suffer less of a hit than RBS
or Barclays because its UK investment
bank makes up a lower proportion of its
total income. It will have to make some
structural changes, however.
l And the bank does not welcome the
imposition of a ring-fence because its
executives believe it unnecessarily compli-
cates the global regulation agenda.
l It could also see a hit to its private
banking business because most individuals
will only be allowed to conduct their per-
sonal banking business with ring-fenced
entities. High net worth individuals who
want to do business directly with their
lenders investment banking operations
will have to go through a registration
process to gain permission.
UNICREDIT CHIEF SIGNALS RIGHTS
ISSUE TO INCREASE CAPITAL LEVELS
UniCredit has given its clearest signal
yet that it will seek to raise its capital
buffers as market turmoil continues
to hit European bank shares. In his
first big interview since becoming
chief a year ago Federico Ghizzoni
told the Financial Times that details
of his industrial plan a blueprint
for the banks future strategic direc-
tionas well as its forecast capital and
liquidity needs were still a work in
progress.
GALLAGHER TAKES ON SPIRIT
FINANCE ROLE
Spirit, the managed pub operator
that demerged from Punch Taverns
this year, has appointed Paddy
Gallagher as finance director.
Gallagher was finance director of
Rank until he resigned during the
companys controversial takeover by
Guoco, the investment group.
GOVERNMENT TO PRESS GOOGLE FOR
ACTION AGAINST ROGUE WEBSITES
The government will this week press
Google to block more copyright-
infringing websites in its search
results, opening a new front in the
UKs battle against online piracy.
Jeremy Hunt, the UKs secretary of
state for culture, media and sport, is
expected to say in a speech tomorrow
that search engines, advertisers and
credit card companies should take
reasonable steps to make life more
difficult for sites that flout copy-
right.
SWATCH CALLS TIME ON TIFFANY
WATCH PARTNERSHIP
Swatch Group and Tiffany & Co are
locked in an acrimonious dispute
after each company accused the other
of failing to honour the terms of a
watchmaking partnership that the
Swiss watch group has abruptly ter-
minated.
ARMS MANUFACTURERS GET THEIR
RETALIATION IN FIRST
The defence industry has gone on the
offensive before the opening of a big
arms exhibition today by publishing
research indicating that it generated
exports of 9.5bn last year. The indus-
try trade body ADS said that defence
companies produced total revenues
of 22.1bn last year and directly
employed 110,000 people.
FIVE LITRES OF WHITE EMULSION AND
A DECORATOR TO APPLY IT, PLEASE
Britons are increasingly saying Do It
For Me rather than attempting a bit
of Do It Yourself and Homebase
hopes to cash in on the trend with a
painter and decorator service.
Homebase has been testing the serv-
ice in shops in the north west for
three months, offering to paint, floor
and tile customers homes using inde-
pendent tradespeople.
ACCENTURE ENDS BRIBE CASE WITH
$63.7M DEAL
Accenture will pay US authorities
$63.7m (40m) to settle allegations
that the consulting firm received
kickbacks for recommending certain
technology to the government. The
settlement follows allegations that
were originally made in a lawsuit
filed by two whistleblowers against
Accenture in the eastern district of
Arkansas. Under the law, the whistle-
blowers will each be given a portion of
the fine.
BOMBARDIER JOBS AT RISK DESPITE
120M LIFELINE
Hundreds of jobs at the Bombardier
train factory in Derby are still at risk
despite government efforts to provide
a 120m stop-gap order to save the
plant. Bombardier announced 1,400
jobs would go when it lost a 1.4bn
contract to build Thameslink trains.
HURRICANE IRENE'S INSURED-LOSS
TALLY REACHES $5.5BN
Hurricane Irene, the storm that
struck the East Coast late last month,
could cost insurers up to $5.5bn
(3.5bn), according to the latest esti-
mate from a disaster-modelling com-
pany. Risk Management Solutions,
said Irene caused insured losses of
$2bn to $4.5bn in the US and $500m
to $1bn in the Caribbean.
QUATTRONE REVISITS FRIENDS
Frank Quattrone, a top technology
banker once sidelined by regulatory
woes, has returned to big-time deal
making partly by tapping a network
of former clients, including several
executives who held controversial
Friends of Frank brokerage
accounts containing hot initial pub-
lic offerings. Quattrone was the lead-
ing Silicon Valley banker of the
dot-com era.
WHAT THE OTHER PAPERS SAY THIS MORNING
TENSIONS between Conservatives and
Liberal Democrats over implementing
the Vickers Commissions ring-fence
proposals could be defused by leaving
much of the detail to regulators.
Chancellor George Osborne vowed
yesterday to give clarity on exactly how
he will implement the Vickers
Commissions proposal for a ring-
fence around retail banks by the end
of the year. But he added: The central
benefit of a ringfence is not to end
large universal banking groups but to
make them more easily resolvable in a
crisis.
That could put him on a collision
course with business secretary Vince
Cable, who has called investment
banking the equivalent of playing the
roulette wheel and argued for an end
to universal banks that conduct both
retail and investment banking.
However, the Independent
Commission on Banking (ICB) report
suggests that much of the detail of the
structural changes could instead be
thrashed out between banks and their
regulators, allowing the coalition to
duck a political row.
The ICB specified that assets and
deposits should be carved up into
three categories on the basis of a set
of ring-fence principles that will
determine which activities take place
inside or outside the ring-fence.
But, it added: These principles are
not in a format which would be appro-
priate for legislation or regulatory
rules.
That means that the legislation to
bring about the changes can include
only a broad ring-fencing require-
ment, with much left to regulators
and banks discretion.
In particular, the ICB recommends
that banks decide whether lending to
corporates takes place inside or out-
side the ring-fence.
One banking law expert told City
A.M. that the leeway means that work-
ing out how the ring-fence will work
for each bank could simply become
part of the ongoing process of drawing
up resolution regimes for banks. If so,
it will reduce their ability to stoke
political conflict within the coalition.
The ICB report also contained rec-
ommendations on the timeline for
implementation. Vickers suggested
that legislation be passed soon, with
Osborne promising to pass it in the
next year. But banks will have until
2019 to fully implement the changes.
Vickers could
defuse bank
policy row
BY JULIET SAMUEL
POLITICS
Mandated Services
Prohibited Services
Permitted Services
Source: Commission estimates, company accounts 2010,
Bank of England, European Central Bank, Office for National Statictics
64%
18%
18%
%
ANALYSIS l Services inside/ outside the ring-fence
Focus on Vickers
TIME LINE | THE INDEPENDENT COMMISSION ON BANKING
16 JUNE 2010
Chancellor George Osborne appoints the
Independent Commission on Banking,
chaired by Sir John Vickers, to identify
reforms to improve competition and stability.
24 SEPTEMBER 2010
The Commission publishes its first issues
paper setting out options for reform. It pro-
poses for the first time separating retail and
investment banks; contingent capital; living
wills and resolution plans among other possi-
ble structural reforms.
26 JANUARY 2011
Commission publishes the more than 150
responses from the issues paper, which show
support for living wills and opposition to the
concept of creating narrow banks. Most
respondents say Basel III is not stringent
enough, but support the idea of bail-in cap-
ital. Opinion is divided over ring-fencing.
11 APRIL 2011
Commission publishes its interim report firm-
ing its views on reforms. The report backs
the ring-fencing of UK banks through a fire-
wall, but stops short of calling for complete
separation. It adds that the sale of 632
Lloyds branches should be substantially
enhanced to improve competition.
13 JULY 2011
Commission publishes the 170 responses to
its interim report, showing its plan for a ring-
fence is still receiving a mixed response.
12 SEPTEMBER 2011
The final report is published, recommending
ring-fencing of operations and higher capital
requirements on retail banks among others.
1 JANUARY 2019
Commission gives banks eight years to erect
firewalls and raise additional capital.
ANALYSIS | WHERE THE RING-FENCE WILL FALL
Lending to consumers and businesses on a secured and unsecured basis
Trade finance and project finance.
Advising on and selling products from non-ring-fenced banks
Mandated in a ring-fenced bank
Taking deposits from and providing overdrafts to individuals and SMEs.
Permitted in a ring-fenced bank
Taking deposits from and providing overdrafts to ANY customer within the
EEA, including providing current accounts, savings accounts and investment
products that do not give rise to the ring-fenced bank being required to hold
regulatory capital against market risk.
Services of the following kinds to individuals and non-financial companies of
any size within the EEA:
Prohibited in a ring-fenced bank
ANY services outside the EEA or any services, other than
deposit-taking and payments services, to financial institutions.
Also, any services to ANY customer involving activities of the
following kinds:
Structuring, arranging or executing derivatives transactions.
Investing in stock, corporate debt securities, convertible/
exchangeable securities, convertible bonds, partnership inter-
ests, mutual funds, exchange traded funds, etc.
Originating, trading, lending or making markets in securities.
However, ring-fenced banks can originate and retain portions of
own-label securitisations.
Underwriting the sale of debt and equity securities.
Focus on Vickers
ICB: THE BENEFITS
OF RING-FENCING
l Sir John Vickers, chair of the
(ICB), stuck to his guns in insisting that his
ring-fence proposal is the best way to
ensure Britains banks are more stable and
do not require costly bailouts if they fail.
l His main argument is that a ring-fence
will make it easier to resolve banks that
get into trouble that is, to wind them up
in an orderly way. The ICB also claims that
a ring-fence will insulate vital domestic
retail services from global shocks that
originate in investment banks that are
plugged in to international markets.
l Under the plan outlined, banks would
have a large degree of discretion over
which activities they place in their ring-
fenced arm, but any deposit-taking services
or overdraft facilities offered to consumers
and small and medium-sized enterprises
(SMEs) will have to be included.
l Other types of activity will be strictly
banned from the ring-fenced bank.
Anything not integral to the provision of
payments services to customers within
the European Economic Area (EEA) or to
intermediation between savers and bor-
rowers in non-financial sectors, or which
increases exposure to global markets will
be prohibited.
l That covers: services to non-EEA cus-
tomers; services resulting in exposure to
financial institutions; trading book activi-
ties; trading related to secondary market
activities, including loan and security pur-
chases; and derivatives trading, except
when managing the retail banks own risk.
l Another set of operations will be
allowed on either side of the fence. These
include the wholesale funding of retail
operations within limits and loaning
out consumer and SME deposits to larger
corporates.
l However, despite the flexibility over
what is allowed on either side of the fence,
its interactions with its groups investment
banking arm are strictly proscribed. The
retail and investment banks will not be
allowed to cross-sell products to one
anothers customers and must interact as if
they were third parties, limiting their expo-
sure to one another. Each subsidiary must
be run at arms length from the other.
l These new rules are principle driven.
At a glance: everything you need
to know from the Vickers report
ICB chair Sir John Vickers (pictured) believes that his proposal for a ring-fence
around retail banks will deliver safer domestic lenders. But his commission has not
shown how. The ICB suggests both that a ring-fence will make it easier to
wind up a failing bank and that it will make it easier to save the part
thats truly vital to consumers. But both cannot be true: if the aim is to
get taxpayers off the hook, no part of a bank should have to be saved
during a crisis, whether it is inside or outside Vickers ring-fence.
VERDICT | THE RING-FENCE
Focus on Vickers
That means they aim to apply general
rules to all products and operations but
will also result in negotiations on the exact
structures banks can adopt.
l The core principle is: only ring-fenced
banks will be able to take on vital services
where any interruption in service has sig-
nificant economic costs, or where cus-
tomers are not well-equipped to plan for
such an interruption.
l The retail bank must also have its own
board and no director will be allowed on
both the board of the retail bank and that
of the universal or investment bank. This is
an attempt to ensure that the culture of
each is be very different.
l However, the Commission says that
ring-fencing is better than full separation
because it means that investors will still
be able to benefit from diversified income
streams.
l Despite all the wrangling over timelines,
Vickers is fairly clear: the legislation
should be passed soon, but banks should
be given until 2019 to implement the
changes.
HIGHER CAPACITY
TO ABSORB LOSSES
l The ICB says that banks do not hold
sufficient capital to protect themselves in
a crisis. Moreover, many of their creditors
are not required to take losses in the event
of a bankruptcy, which means that tax-
payers end up footing the bill.
l Basel III, the collection of international
regulations governing capital require-
ments, comes into force in 2019. But it
mandates only a certain level of common
equity as a capital cushion, set at 9.5 per
cent of banks risk-weighted assets (RWA)
for globally significant banks. The
Commission instead recommends an equi-
ty capital ratio requirement of ten per cent.
l However, this is not enough, the ICB
argues. A far larger proportion of banks
creditors need to be on the hook for losses
if a lender fails. Otherwise, taxpayers end
up picking up the tab.
l In order to solve this problem, a far
higher proportion of banks debt needs to
be able to absorb losses. The ICB sets a
minimum level of 17-20 per cent of RWAs
that must be loss-absorbing.
l However, most of banks senior long-
term debt will already qualify to fulfill this
requirement because regulators are gain-
ing more powers to impose losses on sen-
ior bondholders, turning normal bonds
into bail-in bonds, whereby holders see
the value of their asset written down dur-
ing the wind-down of a bank. If the banks
assets decline in value and it needs to use
its capital buffer, these bondholders quick-
ly lose their money as the bank pays high-
er-priority liabilities. That means a higher
proportion of their debt will become loss-
absorbing and in practice means that
very little extra issuance will be necessary.
l Other capital types can also contribute
to the higher requirement, for example,
contingent convertible bonds, or cocos.
Cocos are a form of debt
which is converted into
equity when a certain
agreed trigger point is
reached, rather than
being written down or
converted by regulators.
l Regulatory discre-
tion will play a large
part in determining
the size and content
of each banks
buffer. For example
banks with poor
resolution proce-
dures may be
forced to hold
more capital in
case of a resolution,
to protect depositors
and the taxpayer from its weak plan.
l The ICB also calls for lower leverage of
assets to equity capital. During the crisis
leverage boomed to around 40 times;
Basel III will impose a limit of 33 times;
the ICB wants the limit to fall to 24.6.
l One reason for this is that the ICB does
not believe the process of risk-weighting
of assets is flawless because it requires
banks to make their own calculations
about the riskiness of their balance sheets.
To counter the weightings of risk being
imperfect, the ICB wants an un-weighted
leverage cap too.
INTERNATIONAL
COMPARISONS
l British banks will face tougher regula-
tions than foreign competitors after ICB.
l Aware of the international picture, the
ICB implies that the fear of regulatory
arbitrage stopped it raising capital
requirements further, but claims that the
structural reforms it recommends will
make banks safer anyway.
l Overall, the ICB believes increased sta-
bility should boost Londons reputation as
a financial services centre. It also says
that because retail banks tend to focus on
domestic markets, the impact on those
operations will be limited.
l It is worth noting that this is not the
ICBs overriding concern however. It is
more concerned with public interest and
the removal of implied government sup-
port for banks that get into trouble.
l The ICB could run into difficulties with
CRD IV, the EUs directive implementing
Basel III. In an effort to harmonise rules,
it could in theory prevent the UK from
increasing capital requirements above
Basel IIIs. However, European
Commissioner Michel Barnier has indicat-
ed that goldplating the rules will probably
be allowed.
COSTS FOR BANKS
l Banks face costs of around 6bn,
according to the report, which says ana-
lysts estimates range from 2bn to
10bn. These come both from increased
funding costs and from reorganising the
banks structures due to the ring-fence
requirement.
l Funding costs will rise as the current
implicit government guarantee is with-
drawn. The ICB emphasises that this is a
cost to the bank rather than to the econo-
my as a whole, however, reflecting a more
accurate pricing of risk and a shift of the
burden onto investors rather than taxpay-
ers.
l Investment banks funding costs are
expected to rise more than the ring-
fenced banks because they will not have
easy access to retail deposits for funding,
which are generally cheaper than whole-
sale debt.
l The main emphasis, though is that the
costs are lower than those faced by banks
and the economy as a whole as a result of
a financial crisis which the ICB hopes
will now become less likely to occur.
SYSTEMIC STABILITY
l Higher capital ratios should make banks
stronger and therefore more stable, the
ICB hopes. The sector as a whole should
benefit too, with systemic risks specifi-
cally targeted.
l Regulators will, under the proposed
changes, receive the power to impose
higher capital and bail-in requirements on
the largest and most interconnected
banks. Further, with a ring-fence in place,
other sections of a large bank can collapse
without as much impact on their own or
other banks retail operations, according
to the ICBs analysis.
UK COMPETITION
l Vickers has maintained his view that
long-standing problems exist in personal
current accounts (PCAs), services to
SMEs and market dominance.
l A large part of the reforms will there-
fore aim to make PCA switching simpler
for individuals and SMEs. The new system
will see all credits and debits to and from
the old account automatically redirected
for a year following the switch.
l The ICB has backed down on requiring
Lloyds to sell more branches to boost the
competitive position of the buyer. But it
asks the Treasury to get Lloyds to agree
to sell to a viable challenger entity.
The Commissions new position on compe-
tition is a marked shift from the views it
expressed in its interim report. Most
notably, it has performed a U-turn on its
recommendation that Lloyds be required
to sell more than the 632 branches that
are currently on the block. Instead, it has
made a vague recommendation that the
Treasury seek agreement with Lloyds to
make sure the sale creates a viable chal-
lenger bank.
In effect, the ICB says, that means a bank
with at least six per cent of the personal
current account market. Lloyds believes
that, in effect, the proposal will have little
impact on the sale. Instead, the ICB has
refocused on transparency of fees and
ease of switching accounts, both of which
are likely to have a greater impact on con-
sumer choice.
VERDICT | COMPETITION
Since the ICBs recommendations on loss-
absorbing capital are mostly in line with
international requirements and dont
require much new capital issuance, they
are unlikely to have a big impact on UK
banks competitiveness. But the ring-fence
requirement will hit the profitability of uni-
versal banks at a time when they are
struggling to build up their capital bases
and deliver better returns to investors who
have been hit by equity losses and sparse
dividends. UK banks will be the only
lenders subject to these structural rules,
putting them at a disadvantage. Banks
also say that Vickers analysis radically
underestimates the costs of the proposal.
Despite this, it could have been worse: the
ring-fence is somewhat flexible and allows
them to transfer capital between sub-
sidiaries.
VERDICT | UK PLC
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Reaction | Focus on Vickers
THE UNION MEN
The Vickers Report fails to deal with what real-
ly needs to be done to transform our banks
lets argue for real reform of our financial sys-
tem, turning the banks from casinos that enrich
themselves into utilities that serve us.
TRADES UNION CONGRESS
BRENDAN BARBER
THE ECONOMIST
The devil is in the detail of the
Vickers Report the cost of borrow-
ing is likely to rise by about 0.7 per
cent and GDP growth will be 0.1 per
cent less. In reality there is more sub-
stance in this report than in the inter-
im report and there are important
recommendations on capital adequacy
and on competition which are in many
ways more relevant to the future of
banking than the ring-fencing propos-
al. The report proposes that banks
have equity and bail in bonds worth
17-20 per cent of their risk weighted
assets. This is substantially more than
is the norm internationally under the
Basel rules and would provide a sub-
stantial buffer against banks needing
to be bailed out. On the other hand,
having nearly a fifth of the assets tied
up in minimally productive invest-
ments will widen bank spreads by per-
haps as much as 0.7 per cent.
There is a trade-off for minimising the
risk of a bailout reduced economic
growth. A rough back of the envelope
calculation is that GDP growth for the
UK could be reduced by around 0.1
per cent by the proposals.
CENTRE FOR ECONOMICS AND
BUSINESS RESEARCH
DOUG MCWILLIAMS
THE ANALYST
The Final ICB report looks mostly as
expected to anyone reading the UK
press in the last month. Domestic
retail banking services should be
inside the ring-fence; global wholesale
or investment banking should be out-
side; and the provision of straightfor-
ward banking services to large
domestic non-financial companies can
be in or out. The ICB recommends
that the retail and other activities of
large UK banking groups should both
have primary loss-absorbing capacity
of at least 17-20 per cent of risk-
weighted assets.
This looks like it might be a little bet-
ter for Barclays and RBS than expect-
ed. Lloyds is not required to sell more
branches, but the ICB recommends
that Lloyds divestment must have
enough funding in place to allow a
strong challenger bank to emerge.
SEYMOUR PIERCE
BRUCE PACKARD
Andrew Tyrie, the chairman of the
Treasury Select Committee, has done
more to influence the thinking of Sir
John Vickers than most politicians,
writes David Crow.
The ICB appears to have heeded his
committees advice on competition for
example. He's moved away from vey
prescriptive approach to competition
and much closer to our position by
emphasising the need for transparen-
cy and account switching, Tyrie told
City A.M.
Tyrie was adamant that the pro-
posed ring-fence was a matter for
primary legislation that is, it can not
be tacked on to any existing laws.
However, he cautioned the law should
not be too prescriptive, because a ring-
fence designed today might not be fit
for purpose at the end of
decade, when it will have to
be erected.
Any ring-fence designed
now will need to look dif-
ferent in a decade because
banks are so innovative, he
said.
The new requirements
around capital and debt
should not be phased in
until 2018, or perhaps
even later, he said.
He said the commit-
tee would be exploring
whether the proposed
ring-fence is as effective as a com-
plete separation of investment and
retail banks, similar to the now-
defunct US Glass-Steagall Act.
Although Vickers is proposing that
banks comply with some of the most
onerous capital requirements in the
world, Tyrie played down fears
that banks could quit the UK.
We should work out what's
best for British banks and for the
British economy, but above
all whats best for
British taxpayers. We
need to listen to the
arguments from banks
but not allow them to
turn those arguments
into a veto on these
reforms, he said.
TREASURY SELECT COMMITTEE
ANDREW TYRIE MP
THE BUSINESS LEADER
The UK is going it alone on ring-fenc-
ing, so the government must rigorous-
ly examine how and when to
implement these proposals, otherwise
it risks damaging businesses and
threatening growth. The Commission
is right to recommend a flexible
approach to ring-fencing and suggest
a reasonable time frame for imple-
mentation. However some of the serv-
ices that might be prohibited within
the ring-fence, such as exchange rate
hedging and other risk management
products, could increase costs for
firms to access critically important
financial services. The proposals on
capital requirements are out of step
with internationally agreed measures
underway so will increase the cost of
lending for UK businesses, putting
them at a disadvantage to their over-
seas competitors. Companies want
greater competition in banking so its
positive that the Commission has set
out measures on making switching
much easier and improving price
transparency. The UK needs a stable
and resilient banking system, but it is
critical that the government imple-
ments these reforms in a way that
supports lending to businesses.
CONFEDERATION OF BRITISH INDUSTRY
DR NEIL BENTLEY
THE COMMITTEE CHAIRMAN
The suggestion to create firewalls in 2019
will bring immediate uncertainty to work-
ers across the sector, while the greedy
bankers find ways to manoeuvre around,
and lobby against these reforms.
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SIR John Vickers yesterday claimed
that reforms proposed in the final
report from the Independent
Commission on Banking might have
helped avoid collapse of banks such as
Northern Rock and Lehman Brothers,
which have since been deemed too
big to fail.
While intended as systemic
reforms for the future, said the
report, it is still useful to consider
how they might have affected the fail-
ures of HBOS, Lehman Brothers,
Northern Rock and RBS.
HBOS and Northern Rock, for exam-
ple, were dragged down by an over-
reliance on wholesale funding and a
lack of access to liquidity.
More intrusive supervision of the
banks and particularly of Northern
Rocks securitisation investments
would have helped rein in exactly how
they were funding growth, argues the
report, while the ring-fence would
have curbed wholesale funding and
required higher equity capital ratios.
RBS, nationalised by the UK govern-
ment in 2008, would have benefited
from greater emphasis on equity, use
of a leverage ratio, and a recalibration
of risk weights, according to Vickers.
RBS was criticised for its debt-
financed buy-out of a majority stake in
ABN Amro in 2007, but the report
claims that the acquisition would not
be allowed in the future without rais-
ing substantial new equity.
And Lehman Brothers, which was
heavily exposed to US sub-prime mort-
gages and over 30 times leveraged,
would have been helped by increased
regulation of shadow banks and liq-
uidity. Though Lehman would have
fallen outside of the UKs regulatory
jurisdiction, the report says that mini-
mum loss-absorbency of 17-20 per cent
of risk weighted assets as proposed
by the ICB would have restricted the
impact of losses and the resulting liq-
uidity run that drove the broker-dealer
to bankruptcy.
Report claims
it could have
saved banks
BY ELIZABETH FOURNIER
BANKING
Focus on Vickers
MORE NEWS
ONLINE AT
@
@
www.cityam.com
UNCERTAINTY over how structural changes
proposed in the ICB report should be imple-
mented will leave banks reluctant to hire,
adding to the drag that the financial sector is
having on UK job creation.
After a upturn in banks hiring six months
ago, optimism is the sector is now way down,
according to the latest employment outlook
survey from recruiter Manpower.
After a strong performance in the past two
quarters when the outlooks for financial and
business hiring were +16 per cent and +10
per cent respectively, the sector has suffered
a setback this quarter, with the outlook
falling sharply to +6 per cent.
Six months ago it looked like the banks
were going to lead the way out of the reces-
sion, said Manpowers UK managing direc-
tor Mark Cahill. But this has now fallen
away quite dramatically over the summer.
Though the overall hiring trend in the UK
remains narrowly positive at +2 per cent, the
slowdown in the banking sector has hit the
outlook, which fell for the first time since
2009. And with Vickers recommendations
set to hit profits at the UKs biggest banking
employers, investment in headcount is
unlikely to be a top priority.
The decline in employment prospects
could be compounded by the Vickers report,
said Manpower director James Hick. It will
send yet more negative vibes through the
banking sector.
Vickers reforms will worsen the effect of
financial jobs slump on the UK economy
BY ELIZABETH FOURNIER
RECRUITMENT
The report says better regulation of liquidity may have saved Lehman
Curbing wholesale funding might have helped Northern Rock
Focus on Vickers
I personally support ring-fencing, and I think this is
the right time for it to be done. I sense that there will
be a big impact on banks lending, and the only way
for that to not be a negative impact would be to delay
the regulations.
IAN TAYLOR | TAYLOR FRANKLIN CONSULTING
Yes; ring-fencing retail arms of
banks is a panic decision. I think
that increased regulation of
banks will have a negative
effect on the public
and it will
ultimately harm
the financial
recovery, and
even harm bank
lending.
HANOZ TAJMIGAR |
MAXFIELD
In the short-term I am worried
about the proposed regulations. I
expect them to have a lot of neg-
ative implications for the British
public. In the long-term, though,
I think it
could prove
beneficial
to the econo-
my.
JOHN MACKINNAN |
BPL
Lower returns, in return for what?
R
EADING most papers this
morning might lead you to
believe that you have awak-
ened in a brave new world for
Britains banks.
This is a world where stable retail
lenders are insulated from global
shocks brought on by reckless
investment bankers and one where
taxpayers are finally off the hook
for bank losses thanks to John
Vickers et al.
A reality check: much of the report
pored over by analysts, bankers and
journalists yesterday merely reiterates
longstanding regulatory arguments.
But it would be wrong to con-
clude that nothing has changed.
Unlike discussions over the loss-
absorbing capacity of banks debt,
which international regulators
have been examining as a way to
protect taxpayers for months,
Vickers proposal for a ring-fence
around banks retail arms is both
new and unusual.
If implemented in full, it means
that RBS and Barclays will have to
undergo structural changes that will
wipe between 14 and 27 per cent off
their pre-tax profit, according to
some speedy number crunching con-
ducted by Credit Suisse yesterday.
Lloyds could see its earnings cut by
between four and 28 per cent.
Commission member Martin
Wolf warned yesterday that banks
must learn to accept these lower
returns, akin to those of absolute
core utilities. A safer, lower return
can be really quite attractive, he
declared.
Unfortunately, it might not be
attractive enough to keep credit
flowing at a rate that is sufficient to
feed the UKs nascent recovery. And
the jury is still out on whether the
returns will indeed be safer.
Theres no question, however, that
they will be lower.
BOTTOMLINE
Analysis by Juliet Samuel
* These views are those of the individuals above and not necessarily those of their company.
CITY VIEWS: ARE YOU WORRIED ABOUT THE PROSPECT
OF MORE BANK RULES? Interviews by William Turvill and Phoebe Torrance
20-27 November
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NOVAK DJOKOVIC
JITTERY markets were shaken yester-
day over escalating fears of a poten-
tial default by the Greek government
and subsequent contagion spreading
to other Eurozone states.
The yield on Greek one-year bonds
exploded past the 100 per cent mark,
rising nearly a fifth to over 117 per
cent. Investors are demanding more
than double their money back to pay
for the risk of lending to the sover-
eign for just 12 months.
Senior German politicians
including Angela Merkel
(right) are believed to be rap-
idly losing patience with
Greece, stoking fears that the
political will to deliver
another bailout could
be on the wane.
The fear goes well
beyond Greece. The
yields at Italys T-bill
auction surged, sig-
nalling that con-
tagion is real,
said David
Thebault of
French broker
G l o b a l
Equities.
One year
Treasury bills
were sold at
an average of 4.15 per cent way
above the last similar bond auction,
in August, which sold at 2.96 per cent.
Italys outlook was knocked by fig-
ures that revealed a 0.7 per cent dip
in industrial production in July..
Italian credit default swaps (CDS),
which measure the probability of a
default, hit record highs above 500
basis points as markets fretted over
the countrys ability to raise money at
affordable rates to finance its huge
debt burden.
Greek CDS showed an eye-watering
$5.8m upfront cost of insuring $10m
in Greek debt, with a further
100,000 per annum.
Even gold sank yesterday as
investors sold the metal after last
weeks record highs to cover losses
elsewhere, including European
equity markets, which were
pushed to two-year lows by
growing fears about the
debt crisis.
The Eurostoxx 50 was
down 3.8 per cent in the
days trading; the French
CAC 40 was down over
four per cent; Germanys
DAX index fell nearly 2.3
per cent.
The MSCI World Index was
down nearly three per cent,
as fears over the Eurozone
spread well beyond its bor-
ders.
Concern over
Eurozone hits
the markets
THE EUROPEAN Central Banks contro-
versial purchases of government
bonds picked up pace last week as one
of its top policymakers was preparing
to quit the bank over the programme.
ECB figures published yesterday
showed the bank bought 14bn worth
of bonds during 1-7 September, up
from 13.3bn the previous week and
taking the programmes total to
143bn.
The amount was above expecta-
tions. No previously-bought bonds
matured last week and as usual the
ECB said it will hold a sterilisation
operation today to neutralise the infla-
tion pressure the purchases create.
Debt crisis fears continued to esca-
late last week as Greeces fiscal repair
efforts appeared to be faltering and as
Italy and Spain continued to be sucked
deeper into the troubles.
Under the bond buy programme
the ECB and the 17 Eurozone national
central banks can buy government
and corporate bonds from banks and
other investors, but not directly from
governments.
The ECB was also rocked last Friday
by the sudden resignation of Juergen
Stark, a move that sources said was
down to his opposition to the banks
bond purchases.
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,
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Dates:
Jan, Apr, Jul, Oct 2012
ECBs bond buys reach total
of 143bn as Stark resigns
BY JULIAN HARRIS
EUROZONE
ANALYSIS l ECB bond yields

%
2010 2011
25
20
15
10
5
Greece
Ireland
Portugal
Spain
Italy
BY HARRY BANKS
EUROZONE
News
CHANCELLOR Angela Merkel is sym-
pathetic with the hard lines taken by
some coalition partners, after they
spoke publicly on the option of Greece
departing from the currency bloc or
carrying out an orderly bankruptcy.
Economy minister Philipp Roesler, who
leads junior coalition party the Free
Democrats said in an article for daily
Die Welt that to stabilise the euro
there could no longer be any taboos.
Meanwhile in troubled Italy, prime
minister Silvio Berlusconi yesterday
promised an austerity bill would be
approved quickly without further
changes, seeking to calm fears that
Italy had lost the will to push through
the unpopular plan. The 54bn pack-
age, aimed at balancing the budget by
2013, is in the final stages of a parlia-
mentary approval process after weeks
of changes to the measures, squab-
bling among allies and public protests
that have unnerved European part-
ners and bond markets. Rumours
again circulated last night that Italy
was expecting China to come to its
rescue. A report in the Financial Times
claimed that negotiations are under-
way between China Investment Corp
and the Italian authorities over debt-
buying.
POLITICS: TALKING SHOP CHATTERS ON
BANK of America Merrill Lynch is
looking to reduce annual expenses by
$5bn (3.16bn) by the end of 2013
through its cost-cutting plan,
including slashing 30,000 jobs,
chief executive Brian Moynihan
said yesterday.
The plan known as New
BAC after the companys stock
symbol focuses on consumer
banking and the banks systems
architecture for now, he
said. The second phase
will focus on institu-
tional client business-
es such as corporate
banking.
The bank current-
ly employs around
288,000 people
worldwide, meaning
more than one in ten
workers will lose their
jobs.
Bank of America did
not say how many of its 14,000
employees in Europe, the Middle East
and Africa will be affected.
The group, which reshuffled its
executive team last week, is targeting
an expense-to-revenue ratio to 55 per
cent and is cutting from roughly
$73bn in annual expenses.
Bank of America shares have
lost nearly half their value this
year amid rising fears the bank
will need to sell more shares to
boost its capital levels.
By many estimates, the bank
will need to raise about
$50bn in coming
years to meet new
global capital
requirements, a
level the bank says
it can reach
through earnings
and asset sales.
At a conference
yesterday, Moynihan
said the bank was not
required by regulators to
seek outside capital.
30,000 jobs
to go at Bank
of America
AB Foods said yesterday that margins
were being squeezed at its Primark
stores as prices were slashed in the
tough consumer climate.
The company said it is having to cut
prices and launch early sales to keep
tills ringing, in an update before the
end of its trading year on 17
September.
AB Foods, which also owns
Twinings, Ovaltine and Kingsmill,
said the budget retailers like-for-like
sales rose by three per cent but that
operating margins had been hit.
It said second half operating profits
across the company will be in line
with its expectations with annual
adjusted earnings seen flat.
Full year results at the company,
whose chief executive is George
Weston, will be released on 8
November. Sugar and agriculture rev-
enues are ahead of the previous year.
AB Foods said in a statement: As
previously indicated, adjusted earn-
ings for the full year are expected to
be similar to last years very strong
results which benefited from 53
weeks trading.
Grocery revenues and profit for the
full year are expected to be ahead of
last year.
Shares in AB Foods closed 1.7 per
cent down at 10.52.
AB Foods says
Primark margin
dented by sales
BY HARRY BANKS
BANKING
CONSUMER
News
ANALYST VIEWS: IS AB FOODS PERFORMING
WELL IN TOUGH MARKETS? Interviews by John Dunne
GRAHAM JONES | PANMURE GORDON

We have pencilled in 10 store openings at Primark next year, we remain
bullish about the expansion opportunities across Continental Europe, where trad-
ing has remained strong, and believe the pipeline for new stores remains
good. We reiterate our Buy recommendation and 1200p price target
ANDREW WOOD | BERNSTEIN

Despite having outperformed the market by nine per cent year to date,
ABF is still bottom-of-class in our European Food Group, which is probably
deserved. We consider it is due to mixed operating performance with
good top-line growth but less success on margins, earnings and cash flow.
JAMES DAWSON | CHARLES STANLEY

Pressure continues to be at the operating margin level and hence the
risks to forecasts appear to be on the downside. Whilst operational efficiencies
may well materialise once the expansionary and enhancement capex is
complete, this may prove too early at present. Hold.
Associated British Foods chief executive George Weston.

US industrial giant Colfax raised the
stakes in the battle for Charter
International yesterday, tabling a for-
mal bid valuing the company at
1.5bn and gaining the backing of
Charters board.
Colfax, which makes industrial
pumps and valves, tabled a 910p per
offer with 80 per cent in cash and the
rest in its shares, trumping rival bid-
der Melroses highest indicative offer
of 850p per share.
But sources familiar with the
process told City A.M. that Melrose, a
turnaround investment firm, was
still in the game and may muster
support from long-term Charter
shareholders who were lukewarm
about taking shares in a US company.
Colfax said buying Charter would
give it more diverse revenue streams
and new product platforms but also a
bigger presence in emerging markets.
Charters air and gas handling
business (Howden) would extend
Colfaxs existing fluid handling plat-
form, and Charters welding, cutting
and automation (ESAB) business
would establish a new growth plat-
form, it said in the offer statement.
Colfax believes there are signifi-
cant upside opportunities from apply-
ing its established management
techniques to improve both margin
and return on invested capital.
Charters board recommended
investors vote for Colfaxs offer and
said the directors would support it
with their total 0.1 per cent stake.
But the offer of Colfax shares could
be difficult for Charter investors such
as fund managers that can only hold
UK paper, and City A.M. understands
that major investor Schroders was
unimpressed at the offer structure.
A Colfax spokesman told City A.M. it
included the paper element as there
was demand to share the upside in
Colfax as an enlarged company.
Those investors holding shares in
Melrose as well as Charter may also
continue to push for a sale to Melrose
but as Charters shares closed at
857p yesterday, Melrose may have to
raise its price. The Takeover Panel said
Melrose had until ten days before the
vote on Colfaxs offer to either make a
formal bid or walk away.
Colfax weighs
in with 1.5bn
Charter offer
BY ALISON LOCK
SERVICES
News
DEUTSCHE Bank is advising US manu-
facturing firm Colfax on its cash and
share bid for Charter International,
fielding a team fronted by Richard
Sheppard, the banks newly appointed
UK head of M&A.
Sheppard moved into the role from
his previous position as Deutsches head
of European industrials M&A at the end
of July 2011. He is joined by Scott Bell,
who has also been recently appointed
as head of UK investment banking cov-
erage and advisory. Charles Wilkinson,
co-head of corporate broking, and
James Cass director of UK M&A, are
also working on the deal.
Last month, Deutsche Bank was sole
adviser and corporate broker to
Northumbrian Water during its
takeover talks with CKI, the invest-
ment consortium led by chinese tycoon
Li Ka-shing. The bank was also appoint-
ed as broker to Stagecoach Group on
Friday, marking a coup for the firm.
DAVID HELLIER: P20 COLUMN
MEET THE ADVISER: DEUTSCHE BANK
RICHARD
SHEPPARD
UK HEAD OF M&A
ANALYSIS l Charter International PLC
p
6Sept 7Sept 8Sept 9Sept 12Sept
860
840
820
800
780
857.00
12 Sept
FOREX billionaire Joe Lewis con-
firmed he is considering taking con-
trol of pub landlord Mitchells &
Butlers yesterday in a deal that
could value the firm at more than
940m.
Lewis, Mitchells & Butlers biggest
shareholder with a 22.8 per cent
stake through his investment vehi-
cle Piedmont, said he may offer to
buy the remainder of the pub group
for 230p per share in cash after his
initial overtures two weeks ago were
rejected by the board.
Sources familiar with the deal
told City A.M. Bahamas-based Lewis is
keen to stabilise M&Bs fortunes
after chronic underperformance
and 34 board changes in three years.
Speculation has been growing
about Lewiss plans for Mitchells &
Butlers ever since City A.M. reported
on 6 September that his yacht,
Aviva, was moored near Tower
Bridge.
After six decades in business, Joe
has proved more than anyone else
you can do business from anywhere
in the world. But the fact he is in
London is very helpful, a Piedmont
spokesman said.
Mitchells & Butlers shares closed
seven per cent up at 235.6p.
Joe Lewis eyes a takeover of
pub chain Mitchells & Butlers
Bahamas-based Joe Lewis may buy M&B
BY HARRIET DENNYS
LEISURE
HSBC has launched the sale of its non-

life insurance business, sources said
yesterday, a division worth about
$1bn (633m) and part of the banks
plan to strip away non-core units.
HSBC sent out an information
memorandum to potential buyers,
with first round bids due by mid-
October, a source said. Its non-life
insurance businesses earned profit
before tax of about $1bn in 2010,
according to a presentation in June.
We do not comment on market
rumours or speculation, a Hong
Kong-based HSBC spokeswoman said.
HSBC to sell off
insurance arm
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The Capitalist
16 CITYA.M. 13 SEPTEMBER 2011 16
THE PACE was frenetic as Ronnie Wood
approached the euro interest rates desk
with intent to broker a multimillion deal
for BGC Partners at yesterdays fundraiser
to mark the tenth anniversary of 9/11.
How do you like being a trader? The
Capitalist asked the Rolling Stone as he
moved on to the euro and dollar corpo-
rates broking ring surrounded by burly
minders. Its fantastic thanks, said
Wood, clapping his hands as his
Brazilian girlfriend Ana Araujo looked
on admiringly. Ive done two million,
fifty billion I dont know.
In actual fact, Wood had traded two mil-
lion Shell bonds under the eye of Euro cor-
porates broker Daniel Carter he got it
down quite easily although he was
trumped by Cherie Blair, who handled an
$100m interest rates swap between
Deutsche Bank and RBS. Now I can go
back to my son Euan, who works at
Morgan Stanley, and say I have done a
deal, she said, passing the phone back to
IRS broker Robert Brown with relief.
Also assisting the BGC brokers with
their multimillion-pound trading deals
were London Mayor Boris Johnson; HRH
Prince Harry; Spurs manager Harry
Redknapp and his football pundit son
Jamie; TalkSport presenters Richard Keys
and Andy Gray, who broadcast their daily
radio show from the trading floor; and
country singer Dolly Parton, who
instructed the traders via video link from
America to: Get out there and work nine
to five to raise more money than ever
before.
Meanwhile, Speakers wife Sally Bercow,
out in force to raise money for Scope,
revealed she has no regrets about taking
part in Celebrity Big Brother not least
because of meeting the
fantastic Paddy
Doherty, the traveller
from Salford who went
on to win the show. He
is now on the Bercows
Christmas card list
alongside X
Factor act
Jedward.
As trad-
ing on the
US markets
gat her ed
pace, it was
too early to
call how
much money
the day would
raise for the 79
beneficiary chari-
ties, but the
firms newly
retired market
analyst David
Buik was confi-
dent last years total would be beaten,
despite the emotion of the day and the
fear in the global markets. We started
very slowly but the pace is picking up,
added interest rates broker Joseph
Allegue. Our clients are being very sup-
portive they know what we are doing
and they are really helping us out.
And, in a sober reminder of the terrorist
atrocities that killed two-thirds of the
workforce of Cantor Fitzgerald, Shaun
Lynn, the global president and London
chief executive of BGC Partners, which
spun off from the London office of Cantor
Fitzgerald in 2004, spoke of his hope the
company can finally start to put the
tragedy behind it.
Speaking after witnessing
the incredible grief of the
victims families at the
ten-year 9/11 memori-
al in the shadow of
the US Embassy in
Grosvenor Square on
Sunday, Lynn (left)
told The Capitalist:
We will never for-
get, and we are not
drawing a line
under the tragedy.
But ten years
marks the point at
which we can start
to move on.
RONNIE WOOD TURNS MILLION-DOLLAR
TRADER AS STARS DIAL UP 9/11 RELIEF
EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
Above: singer Duffy
Left: Rolling Stone Ronnie Wood and his girl-
friend Ana Araujo with BGC brokers
Right: Princess Eugenie; Sarah, Duchess of
York; BGC CEO Shaun Lynn; Princess Beatrice;
BGC chief operating officer Sean Windeatt
Above: Tottenham Hotspurs manager Harry Redknapp and foot-
ball pundit Jamie Redknapp
Right: TalkSport presenters Richard Keys and Andy Gray
Above: Mayor of London
Boris Johnson
Above right: Prince Harry
Right: champion jump jockey
A P McCoy
Far right: Capital FM presen-
ter Lisa Snowdon
Above: Cherie
Blair QC
Left: Former
BGC markets
analyst David
Buik
TAKEOVER target Omega Insurance
received a vote of confidence from
one of its numerous potential buyers
yesterday as insurance scion Mark
Byrne tabled an informal offer to buy
a 25 per cent stake for 50m.
Shares in the Lloyds insurer closed
up 7.6 per cent as investors saw the
offer as a vote of confidence in
Omegas prospects following 18
months of losses.
But after months of speculation
that Byrne planned to buy Omega out-
right, industry sources questioned
why he had not taken a bigger stake.
Byrnes investment firm Haverford
will buy up to 60m Omega shares for a
maximum of 83p per share. It also
said major shareholder Invesco would
not tender any of its shares, a sign it
would work with Haverford.
Although Omega has experienced
a challenging period, it continues to
have a solid underlying core business
with clear opportunities, it said.
Byrne, the founder of reinsurer
Flagstone Re and son of insurance
tycoon Jack Byrne, will become execu-
tive chairman and his father will also
become a non-executive director.
Omegas chairman John Coldman
will become a non-executive director
and chief executive Richard Pexton
will stay in post.
The news is the latest twist in
Omegas takeover saga after Lloyds
rival Canopius approached it in
January and US insurer Barbican start-
ed talks in June, while a third insurer,
Novae, walked away in July.
Byrne boosts
Omega with
50m stake
MCGRAW-HILL, agreeing to investor
demands to unlock shareholder
value, said yesterday it will divide
itself into a markets data company
that includes its Standard & Poors rat-
ings businesses and an education com-
pany for textbook publishing.
The breakup of the mini-conglomer-
ate follows public demands starting in
July from the Ontario Teacher's
Pension Fund and hedge fund Jana
Partners for a broad reorganisation.
The activists suggested breaking up
the company into more than two
pieces to highlight the value of its indi-
vidual equities, commodities and
financial analytics units.
Its a first step, said Pat English,
chief executive of Fiduciary
Management, a large holder of
McGraw-Hill shares, who argued for a
more radical plan. It doesnt make
sense to have S&P Credit Ratings, S&P
Indices, Capital IQ, Platts and other
information companies under one
roof, English wrote in an e-mail.
Terry McGraw, the 63-year-old chair-
man and chief executive of the compa-
ny founded by his great-grandfather,
said he will lead the bigger and more
profitable part of the company that
will include the S&P credit rating, mar-
ket index and Capital IQ corporate and
markets analytics businesses.
HEALTHCARE Locums shareholders
defied rebel investors to vote in favour
of a 60m fundraising plan tabled to
repay the firms debt pile yesterday.
More than 50 per cent of sharehold-
ers supported the plan to raise the
funds primarily from two large funds,
Toscafund and Ares Capital, while
only 16 per cent backed the rebels.
The result means HCL can pay
down some of its 110m outstanding
debt and its shares have been re-listed
on the Alternative Investment Market
today but at 10p per share, far below
the 112p price at which they were sus-
pended in January after accounting
irregularities came to light.
The vote proved that the rebel
shareholders never had the support
they claimed. The company can now
move on and focus on developing
what is fundamentally a good busi-
ness, an HCL spokesman said.
McGraw-Hill set
to split into two
listed companies
Investors pass Healthcare
Locums fundraising plan
Healthcare Locums founder Kate Bleasdale still holds a stake Picture: REUTERS
BY ALISON LOCK
INSURANCE
MEDIA
News
BY ALISON LOCK
SERVICES
ANALYSIS l Omega Insurance

p
72
68
71.00
12 Sept
GREAT Portland Estates unveiled
plans yesterday to expand into
Londons West End by buying two
properties for more than 250m.
The London property developer has
agreed to buy a 2.3-acre site near
Oxford Street from the Royal Mail
Group for 120m in cash its largest
deal to-date.
Royal Mail will lease back the site
until June 2013, then vacate it to allow
Great Portland begin work on redevel-
oping it into a mix of shops, apart-
ments and offices.
Meanwhile, Great Portland Estates
and the BP Pension Fund have agreed
to buy the London headquarters of
British broadcaster ITN News in a deal
valued at 133m.
The Great Ropemaker Partnership,
a 50:50 joint venture, said it has
acquired 200 and 214 Grays Inn Road
from an arm of Beacon Capital
Partners, a Boston-based real-estate
investment company.
The 246,500 square feet property,
houses ITVs Carlton
Communications as well as ITN News
and generates a combined annual
rent of 8.42m.
Both the Royal Mail site and the
Grays Inn road block are set to benefit
from an uplift in property values after
the opening of the Crossrail link in
2018, Toby Courtauld, Great
Portlands chief executive said.
Its redevelopment will accelerate
the regeneration of the East End of
Oxford Street, one of Londons most
exciting submarkets, which is set to
benefit significantly from the open-
ing of Crossrail, he said.
Farringdon, home to the Grays Inn
property, will also be one of the
London districts that benefits most
from the Crossrail east-west train link
and the Thameslink project.
In May, the company was also given
the green light to redevelop Hanover
Square in Mayfair into 205,400 square
feet of office space, retail units and
residential apartments, as part of the
Crossrail scheme.
Shares in Great Portland Estates fell
1.65 per cent yesterday to close at
350.8p.
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BILLIONAIRE investor Warren
Buffett (pictured right) advanced
his succession plan yesterday by
naming Ted Weschler, a low-pro-
file hedge fund manager who has
produced out-sized returns in the
last decade, to help manage the
investments of Berkshire
Hathaway.
Weschler, 50, will start at the
company early next year and work
with Todd Combs, who joined
Berkshire last year, to manage its
equity portfolios.
Buffett, 81, has said he may also
bring in a third manager, but
meanwhile he continues to
oversee the lions share of the
companys $52.36bn (33bn)
in US equities.
Weschler, like
Combs before him,
has succeeded
while keeping a
low profile far
from the canyons
of Wall Street.
The Virginia-
based money
manager deliv-
ered total gains
of 1,236 per
cent over the
last 11 years, according to
investors. Over the same peri-
od, Berkshires own Class B
shares have risen 84 per cent
and the S&P 500 index has
fallen nearly 23 per
cent.
As of 30 June,
Weschlers Peninsula
Capital Advisors had
long positions in
about $2bn worth
of stock, according
to regulatory fil-
ings. Combs was
managing about
$400m when he
was hired.
Warren Buffett taken on new asset
manager as part of succession plans
BY HARRY BANKS
INVESTMENT
Broadcom
to buy rival
for $3.7bn
AMERICAN chipmaker Broadcom
plans to buy NetLogic Microsystems
for about $3.7bn (2.3bn) to expand
its lineup of chips used in wireless
network equipment to take advan-
tage of growing demand for mobile
data services.
The $50-per-share deal, which rep-
resents a premium of 57 per cent
over NetLogics Friday close on the
Nasdaq, sent NetLogics shares soar-
ing 50 per cent yesterday. But
Broadcom shares were down 2.5 per
cent as some investors questioned
the steep premium.
Broadcom chief executive Scott
McGregor defended the premium,
noting that NetLogic would bring
faster profit and revenue growth
and that the addition of the prod-
ucts to Broadcoms lineup would
double the size of the network
equipment market it can go after to
about $12bn by 2015.
Premier assets are going to cost
more than a fixer-upper, McGregor
said. Theyre a decent growth com-
pany. They accelerate our revenue
growth and increase our market
opportunity.
He said that Broadcom would con-
tinue to look for more acquisitions
in the communications chip mar-
ket.
In its latest quarterly report,
NetLogic posted a 14.4 per cent rev-
enue increase to $98.7m. Roughly 42
per cent of revenue depends on net-
work equipment sales in China.
BY HARRY BANKS
TECHNOLOGY
News
ANALYSIS l Great Portland Estates PLC
p
370
365
360
355
350
350.80
12 Sept
MARKS & Spencer boss Marc
Bolland yesterday laid out detailed
plans for a 600m stores revamp.
Bolland said at a presentation at
the retailers High Street
Kensington branch that M&S will
open 14 pilot stores in October
incorporating refurbished designs
and new store layouts with deli
and bakery counters for its food
section. M&S today opens in
Westfield Stratford City with the
new features.
Up to 100 more will be refur-
bished by March 2012, and the 500
or so remaining stores will be com-
pleted by 2013. The changes will
include improved signage and dif-
ferentiation between M&Ss in-
house brands, as well as a focus on
speciality foods and better product
packaging. They represent the first
major changes since Bolland took
over the reins of the company from
Sir Stuart Rose.
M&S unveils 600m store revamp as Bolland
looks to put his stamp on retailer after Rose
RETAIL
MONUMENTAL NEW BUILDING

Rockspring Property Investment Managers has secured planning consent to redevelop an
80,000 square feet office in the City of London. The fund manager, together with its devel-
opment partner, Charterfield Asset Management, will push ahead with plans to revamp
Centurion House, the well-known 1980s building next to The Monument in the Square
Mile and replace it with a new Grade A office building.
Great Portland
swoops on two
London offices
THE ECONOMIC slowdown is set to
be even sharper than expected,
according to forward-looking data
released yesterday by the
Organisation for Economic
Cooperation and Development
(OECD).
A fourth consecutive month of
decline in the OECD area was record-
ed in the leading indicators for July,
while the UKs indicators have fallen
for six straight months.
The indicators aim to predict eco-
nomic turning points six months in
advance.
The further deterioration in the
OECD leading indictor for the UK ties
in the current softness of the UK
economy and the increasingly worry-
ing outlook, said Howard Archer of
IHS Global Insight.
We project UK GDP growth at just
one per cent in 2011, improving mod-
estly to 1.5 per cent in 2012, Archer
said, while stressing risks to the
downside.
The UKs indicator slipped by half a
point between June and July, its
sharpest decline of the year.
The UKs score came in at 100.4
only marginally above the 100 mark
that predicts stagnation six months
ahead.
Across the OECD as a whole the
outlook also slipped by half a point,
yet remains healthier at 101.6.
However, some peer countries have
worse prospects than the UK, accord-
ing to the data. France is set for stag-
nation towards the end of the year,
while Canada, with a reading of 99.7,
is set for economic decline.
The outlook for Germany, Europes
powerhouse economy for much of
the recovery, has collapsed, the OECD
said.
Germanys indicator has fallen
more than 2.5 points in the last three
months, so that the country is on
course for only modest growth
towards the end of the year.
Developing economies, too, have
taken a hit. Brazil and Indias scores
suffered falls of 6.4 points and 6.2
points respectively over the last year.
THE UNSTABLE economic outlook
kept the UKs housing market sub-
dued last month, a survey published
this morning suggests.
The average number of house sales
per surveyor fell to 14 in August, the
Royal Institution of Chartered
Surveyors (RICS) has found taking
transactions back to June 2009 lev-
els.
Nearly eight in 10 surveyors report-
ed general economic uncertainty
as a reason for the sluggish market
conditions.
Meanwhile seven in 10 said that a
lack of mortgage finance was hold-
ing back new sales, particularly for
aspiring first time buyers.
The number of mortgage loans to
first time buyers slipped two per cent
between June and July, according to a
separate survey released yesterday.
Only 18,200 mortgages were grant-
ed to people taking their first step
onto the property ladder, the Council
of Mortgage Lenders (CML) revealed,
down seven per cent on the same
time last year.
Overall loans for house purchase
edged up to 48,800 in July yet
remained 12 per cent below the same
time last year, the CMLs data
showed. The value of house purchase
loans, 7.3bn, was up six per cent on
June, but still 13 per below its level in
July 2010.
According to the RICS data, 23 per
cent more surveyors saying that
prices fell rather than rose in August.
Economic uncertainty keeps housing
market weighed down during August
OPEC has cut its forecast for global oil
demand growth next year because of a
worsening economic outlook and said
that disappointing economic perform-
ance in America, the top consumer,
could further weigh on fuel use.
The Organization of the Petroleum
Exporting Countries, in a monthly
report yesterday, also said concerns
were easing about a tight oil supply
and demand balance and that it
expected Libyan oil output to return to
full capacity in less than 18 months,
more quickly than some estimates.
The weaker economic recovery is
negatively impacting oil demand,
OPEC said. Looking ahead, the percep-
tion of market tightness and worries
of supply shortages in the fourth quar-
ter appear to be easing.
Deepening concerns over Europes
sovereign debt crisis and slowing glob-
al growth are weighing on oil prices,
which yesterday were trading around
$111 a barrel, some $16 below the 2011
high reached in April.
Weak recovery will knock
growth in oil consumption
WORLD ECONOMY
OECD expects
even sharper
UK slowdown
BY JULIAN HARRIS
WORLD ECONOMY
BY JULIAN HARRIS
HOUSING
News
Boris Johnson (r) has been urged to reveal Olympic transport plans Picture: REUTERS
NEWS | IN BRIEF
Morale boost at Japans factories
Big Japanese manufacturers turned
optimistic in the third quarter as output
recovered swiftly after the 11 March
earthquake and tsunami, but scaled
back forecasts for the months ahead
due to the yen's strength and a looming
global slowdown, a Ministry of Finance
survey showed yesterday. The index of
sentiment at large manufacturers rose
to plus 10.3 in the July-September quar-
ter from minus 23.3 in April-June.
Turkish GDP surprises on up side
Turkeys economy smashed expectations
in the second quarter of the year, official
data showed yesterday. The countrys
GDP grew by 8.8 per cent compared to
the same time last year, after surprising
growth of 1.3 per cent compared to the
first three months of the year. The mar-
kets had been led to believe by the cen-
tral bank that there would be no growth
in the second quarter, said Daiwas
Donald Egginton.
Imports hit new high in China
Chinas monthly imports hit a record
high after jumping sharply in August,
official figures showed yesterday. The
country imported 30.2 per cent more
than a year earlier, with imports for the
month standing at $155.6bn (98bn).
Exports also jumped, however, surging
almost 25 per cent to give China a trade
surplus of $17.8m. However, the surplus
fell from $31.5bn in July.
Mexico output jumps in July
Mexican industrial output rose by 0.5
per cent in July, beating analyst fore-
casts, helped by strength in manufactur-
ers such as carmakers. However,
analysts expect a slowing US economy
to drag down growth in the coming
months.
Deutsche beginning to make its presence felt
N
OTWITHSTANDING worries
over the Eurozone and jitters
about the state of the invest-
ment banking sector, there
were some happy bankers at
Deutsche Bank yesterday.
Deutsche is the lead adviser on US
group Colfaxs 1.5bn bid for Charter
that was made yesterday, higher than
a rival bid from the UK group
Melrose.
There are not many bids around
these days so to get in on the act of
the larger ones around is an under-
standable reason for celebration.
Deutsche was also the lead broker for
Northumbrian Waters defence when
it was courted by Li Ka Shing in a
2bn deal recently.
In addition, Deutsche last week
extended its number of brokerships
by being taken on by Stagecoach
alongside Nomura.
So, is there a pattern to this activi-
ty? Deutsches aim, since hiring Nick
Bowers from Credit Suisse as co-head
of corporate broking in 2009 to work
alongside Charles Wilkinson, has
been to reach 25 FTSE 100 broking
clients.
To date, it has taken its FTSE 100
client list from 15 to 20, with confi-
dence that others will shortly follow.
Alongside Goldman Sachs and
Barclays Capital, and to some extent
RBC, Deutsche is in the ascendancy in
terms of brokerships.
Brokerships in themselves are not a
profit-making business; but the
rationale, as I have argued before, is
that they traditionally lead to an
investment house being involved in
investment banking transactions if
and when they arise.
In Deutsches case the bank acted
as lead financial adviser and broker to
Reckitt Benckiser on its 2.5bn for
SSL, a clear reward for cementing a
relationship with the company by
being its corporate broker.
Indeed the bank has estimated that
its share of the UK investment bank-
ing market has risen by 50 per cent
since it started growing its number of
brokerships in 2008.
There is no guarantee, however,
that winning a brokership will lead
automatically to riches in terms of
fees. Goldman Sachs, for example,
became joint broker to Autonomy in
June but found itself in the back row
of the advisory team alongside UBS
and Citigroup, when the software
group was recently bought by
Hewlett Packard. Instead, Autonomy
chose Frank Quattrones boutique
investment bank as its lead adviser.
As some win mandates, others obvi-
ously lose them. UBS, Citigroup and
Nomura look quite vulnerable,
though none look ready to give up
the chase completely.
david.hellier@cityam.com
INSIDE TRACK
DAVID HELLIER
ECONOMIC NEWS
RETAILERS have been left in the dark
over transport plans in London dur-
ing next summers Olympic Games,
with a leading industry body urging
Mayor Boris Johnson to shed some
light on the authorities arrange-
ments.
Retailers are being encouraged to
put plans in place for next summer
but thats difficult to do without a
full picture of what the situation is
going to be, said Stephen Robertson
of the British Retail Consortium (BRC)
this morning.
Restrictions on deliveries, typically
imposed by local authorities, need to
be lifted during the Games, the BRC
said.
The industry body has called for
detailed plans to be made available by
London authorities by October, rather
than in December, as is currently
scheduled.
London retailers unhappy
over Olympics confusion
BY JULIAN HARRIS
RETAIL
FOSTERS chairman David Crawford

has written to shareholders asking
them to brush off SABMillers $11bn
(6.2bn) takeover bid.
Crawford urges them to stick with
current management while promis-
ing that the benefits of a demerger of
the companys wine business are yet
to be seen.
The board has consistently claimed
that SABMillers bid undervalues the
business.
Crawford claimed there was signif-
icant value in Fosters remaining
independent. The letter comes as the
Anglo-South African brewer prepares
to dispatch its bidders statement to
Fosters shareholders, where the com-
pany will argue the case for investors
to accept its hostile $4.90 per share
offer.
Your board unanimously recom-
mends you reject SABMillers offer....
Your board believes the offer signifi-
cantly undervalues your company.
The offer is also highly conditional
and subject to significant uncertain-
ty, Fosters said. The company has
consistently dismissed the bid since it
first disclose the approach on 21 June.
SABMiller, which makes Peroni and
Grolsch, announced plans to take its
offer directly to shareholders on 17
August after the board refused to
enter negotiations.
Fosters has said it is open to talks
on a sensible bid from SABMiller.
without being more specific.
Fosters takes
new swipe at
SABMiller bid
A FORMER escort agency boss yester-
day revived her story of allegedly tak-
ing cocaine with chancellor George
Osborne in his student days, as she
claimed the News of the World pub-
lished the details after hacking her
phone.
In an interview on Australian televi-
sion, Natalie Rowe accused the
Murdoch tabloid of hacking her
mobile in 2005 after she sold details of
her friendship with Osborne to its
rival paper the Sunday Mirror.
Rowe, who dated a close friend of
Osbornes at the time, said she was
horrified when the News of the World
printed a spoiler of her story that dis-
tanced Osborne from the events.
The allegation that the News of the
Worlds then-editor Andy Coulson
deliberately portrayed Osborne sympa-
thetically has raised questions over
links between the Conservative party
and the Murdoch-owned press.
Osborne was then in charge of
David Camerons campaign to become
party leader. His office has consistent-
ly denied all such allegations.
Former News International chief
executive Rebekah Brooks disclosed in
July that Osborne had pushed for
Andy Coulson to become Camerons
communications chief after he
resigned from the paper in 2007.
Escort claims
NotW hacked
Osborne story
BY JOHN DUNNE
CONSUMER
POLITICS
News
CITYA.M. 13 SEPTEMBER 2011 21
FREUD AUCTION SET TO BUCK ECONOMIC GLOOM
LUCIEN Freuds 1952 painting Boys Head is set to prove that art is still seen as a
worthwhile investment when it goes on sale at Sothebys later this month, expected to
fetch up to 4m. Earlier this year, the Bond Street-based auction house posted record
sales of $3.4bn (2.15bn) for the first half of 2011. Boys Head and several other works by
Freud will lead an auction of contemporary art on 13 October.
ANALYSIS l SABMiller
p
2,240
2,200
2,160
2,170.00
12 Sept
A RECORD number of passengers
flew from Heathrow airport last
month despite the impact of
Hurricane Irene, which disrupted
flights to the east coast of the US.
Heathrows owner BAA said 6.6m
travellers passed through Londons
biggest airport last month, up 0.7
per cent on the previous year.
Much of the growth in passenger
flights came from journeys across
the North Atlantic, with trips to
Montreal up 50 per cent and
Detroit up 42 per cent in August.
BAA said that about 40,000 addi-
tional passengers would have trav-
elled through Heathrow had it not
been for the hurricane.
Growth at Heathrow helped off-
set a 5.1 per cent drop in traffic at
Stansted airport compared with the
August last year, which BAA blames
on its airlines, including the budget
carrier Ryanair, cutting back on
capacity.
Meanwhile, the number of trav-
ellers at BAAs Scottish airports rose
strongly in August ,with a three per
cent increase at Edinburgh and a
5.5 per cent rise at Glasgow.
BAA, owned by Spains Ferrovial,
has been ordered by the
Competition Commission to sell
Stansted and either its Edinburgh
or Glasgow airport in Scotland to
improve competition in the sector.
But BAAs chief executive Colin
Matthews said the group, which
was forced to sell Gatwick in 2009,
is considering a judicial review that
could further delay the watchdogs
ruling, which first started in 2007.
Overall, BAAs six UK airports
handled 10.7m passengers in
August, up by around 0.2 per cent
on the previous year.
Passengers through
Heathrow on the up
BY KASMIRA JEFFORD
AVIATION
News
LONDON commuters yesterday suf-
fered severe delays on the train net-
work following the theft of
copper-based signal cables in
Guildford, Surrey.
The incident, believed to have taken
place on Sunday night, disrupted the
journeys of hundreds of thousands of
rail customers travelling on South
West Trains between Hampshire and
London Waterloo.
There have been three further inci-
dents of signal cable theft in the south
east of England in the last week alone,
delaying trains at London Bridge and
Paddington stations.
The British Transport Police has
introduced a number of defensive
measures to fend off this crime, but
have been unable to prevent rising
cable theft amid soaring demand for
copper worldwide.
hugely inflated copper prices have
led to UK cable thefts increasing by a
third since 2008. The surge has been
fuelled by the economic boom in
China, where the need for copper
increased by 38 per cent in 2010.
UK transport minister Norman
Baker has estimated that cable thefts,
as well as the frustration and incon-
venience they cause to staff and cus-
tomers, have cost the UK a total of
1bn.
He said: Thefts like this cause mis-
ery for thousands of commuters and
cause damage to the economy out of
all proportion to the value of the cable
itself.
RMT general secretary Bob Crow
said that cuts to security staffing have
turn[ed] the rail network into a crimi-
nals paradise.
Rising copper prices
hit commuters as
thieves steal cables
BY WILLIAM TURVILL
TRANSPORT
August 2011 Passenger Numbers

Heathrow
UP
Edinburgh Stansted
UP 3%
0.7%
6.6m
passengers
954, 600
passengers
2m
passengers
DOWN5.1%
LONDON: total number of passengers
in the six months to the end of August - 58.7m
UK: total number of passengers in
the six months to August 10.7m
UK BUSINESS luminaries Martin
Gilbert of Aberdeen Asset
Management and Michael Spencer of
Icap were last night honoured for
their contribution to global corpo-
rate leadership, at a star-studded din-
ner in New York to raise money for
the British Memorial Garden Trust.
The gala was held at the historic
Gotham Hall on Broadway, and
forms part of a series of fundraising
events to raise the 4m needed to
secure the future of the British
Garden at Hanover Square, created as
a memorial to the Britons that died
in the 11 September attacks on New
York.
Gilbert said: Our roots as an
investment business go back a hun-
dred years between Scotland and
North America.
I am very touched personally to be
honoured, but also we as a group are
delighted to remain involved with
the Garden and help raise its profile
with the financial and professional
community.
New York gala
honours British
business leaders
CHARITY
METROPOLITAN POLICE GETS A NEW HEAD

Bernard Hogan-Howe was named as the new commissioner of London's Metropolitan
Police yesterday, giving him the job a year before the capital hosts the Olympic Games
and a month after the worst riots in the city in years. The 53-year-old, who has a no-non-
sense reputation, replaces Paul Stephenson who resigned in July. Picture: REUTERS
News
Newedge
The multi-asset brokerage and clearing
company has appointed Franoise
Guillaume as global chief operating
officer and deputy chief executive,
based in Paris. Guillaume joins from
Socit Gnrale, where she was most
recently chief financial officer for SG
Group Management Resources.
mxData
The mobile devices information
provider has appointed ex-Amazon
managing director Brian McBride as its
first chairman. McBride stepped down
from Amazon.co.uk in January this
year, following a 25-year career hold-
ing senior positions at IBM, Dell
Computers and T-Mobile.
Nighthawk
The Aim-listed oil development and
production company has appointed
Stephen Gutteridge, a former chairman
of Star Energy Group and President
Petroleum, as non-executive chairman.
Towers Watson
Peter Lewis has joined the professional
services firm as head of its US real
estate investment manager research
team. Lewis joins from Liberty Mutual
Group, where he was a senior invest-
ment officer directing its real estate
portfolio.
RBS
The Royal Bank of Scotland has
appointed Richard Roach as UK man-
aging director of financial sponsors UK.
Richard has over 30 years of banking
experience with RBS, most recently as
sector head of manufacturing, industri-
als and construction.
Standard Bank Group
Michael Starke has been hired as a
research analyst in Standard Banks
mining and metals team, based in
London. Stark worked in the mining
team at Edison, covering a number of
mid-cap commodities companies.
Mike Thomsen, the companys current
executive chairman, will remain on the
board as president of US operations.
Zouk Capital
The private equity fund manager has
appointed Dr Erich Becker as a partner
to co-lead the infrastructure team with
Colin Campbell. Becker joins from
Macquarie Bank.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Hope of help for
Italy lifts stocks
U
S stocks rose yesterday, bounc-
ing back in late trading, as
hopes that Italy could get finan-
cial support from China tem-
pered investors worst fears over the
Eurozones sovereign debt crisis.
Traders started the day braced for a
possible downgrade of Frances top
banks by Moodys rating agency, but
sentiment improved as various
European officials succeeded in tamp-
ing down fears that political and
financial leaders were losing control
of the situation.
Italy has asked China to make sig-
nificant purchases of Italian debt,
the Financial Times reported.
It shows the Chinese are serious
about addressing the stresses in the
marketplace, said Robbert Van
Batenburg, head of equity research at
Louis Capital in New York.
Nasdaq led gains, with merger
news helping to support tech shares.
NetLogic Microsystems ended up 50.8
per cent at $48.12 per cent after wire-
less chipmaker Broadcom agreed to
buy the company for about $3.7bn.
Broadcomshares dipped 1.1 per cent
to $33.06.
Besides technology, financials were
among the best performers on the
S&P 500. The S&P financial index
gained 1.2 per cent.
Fears Europes credit crisis would
drag on US banks have been pressur-
ing financial stocks for months, send-
ing some shares to two-year lows.
The Dow Jones industrial average
finished up 68.99 points, or 0.63 per
cent, at 11,061.12. The Standard &
Poors 500 Index was up 8.04 points,
or 0.70 per cent, at 1,162.27. The
Nasdaq Composite Index ended 27.10
points higher, or 1.10 per cent, at
2,495.09.
The S&P 500 is down 13.6 per cent
since 22 July, roughly when the
recent market downtrend began.
Much of the recent selling has been
tied to worries over the Eurozone
debt crisis.
In another sign leaders have
stepped up action, Eurozone officials
said US Treasury Secretary Timothy
Geithner will attend a meeting of
Eurozone finance ministers on Friday
to show unity in the face of market
turmoil and risks to growth.
A backdrop to the markets early
losses was a weekend meeting of the
Group of Seven industrialised
nations, which failed to come up with
fresh proposals for boosting global
growth.
Also weighing on stocks, Barclays
Capital, citing higher levels of eco-
nomic uncertainty, cut its full-year
target for the S&P 500 stock index by
about nine per cent to 1,325.
B
RITAINS leading share index
fell yesterday, on weakness in
heavyweight mining and ener-
gy issues as commodity prices
retreated, while a partial recovery by
banks brought blue-chips back from
intra-days lows for the month.
At the close, the FTSE 100 index
was down 85.03 points, or 1.6 per
cent, at 5,129.62, having bounced off
the session low of 5,059.22.
Banks were weaker after a volatile
session as investors digested the
much-anticipated Independent
Commission on Banking (ICB) report
on reforming the sector.
Part-nationalised Royal Bank of
Scotland and Lloyds Banking Group
shed 3.4 per cent and 1.5 per cent
respectively, while Barclays fell 1.6 per
cent, albeit with all three well above
hefty session lows.
Barclays shares hit a 52-week low
earlier in the session.
It seems that the ideas in the
report have been touted around for so
long that it is no longer news. We all
knew about the ringfencing of bank-
ing divisions so the whole thing has
not surprised us in the slightest, said
James Hughes, senior market analyst
at Alpari UK.
Global banking heavyweight HSBC
shed 2.4 per cent, with the sector
weighed also by Eurozone debt con-
cern and by talk of a downgrade for
French banks.
But emerging markets-focused
lender Standard Chartered bucked
the trend, adding 0.7 percent.
With the exception of Standard
Chartered, the implications of the ICB
report are negative to long-term
return on equity prospects for all UK
banks, Shore Capital said.
Integrated oils were the biggest
drag on the blue-chips, with BG
Group down 2.2 per cent.
Miners suffered similar falls in tan-
dem with copper prices , which fell to
one-month lows on concern about
policymakers ability to permanently
solve Europes debt crisis and worries
about economic and demand slow-
down.
While Greece pledged fresh meas-
ures over the weekend to help it meet
fiscal targets and secure bailout
funds, a hardening in the tone of
some German politicians over the
possibility of a Greek debt default
unnerved markets.
Azad Zangana, strategist at
Schroders, said the market had
arguably overreacted to the news,
especially as the weekend moves on
the part of Athens should smooth the
way for bailout funds to be disbursed.
What has changed has been the
tone out of Germany, with the minis-
ter of finance talking about the need
to think about the default scenario
playing out," Zangana said, although
he viewed the news as precautionary.
Market heavyweight Vodafone was
also a big drag, with the mobile tele-
coms operator losing 2.5 per cent
after a report said Verizon
Communications had ruled out a
return to a recurring dividend from
the two companies US mobile phone
joint venture.
US blue-chips were 0.6 per cent
lower by London's close, well above
sharper early falls, while the Nasdaq
was up 0.2 per cent, boosted by gains
from semiconductors after Broadcom
Corp agreed to acquire NetLogic
Microsystems in a $3.7bn deal.
Back in London, chip designer ARM
Holdings was among the minority
FTSE 100 gainers, up 1.6 per cent on
the sector consolidation move.
Man Group was the top FTSE gain-
er, up five per cent, with traders see-
ing the hedge fund manager as a
likely beneficiary of market volatility.
Weak commodities take toll
on FTSE but banks rebound
THELONDON
REPORT
THENEW YORK
REPORT
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l ArcelorMittal SA
24
20
16
Jul Aug Sep
12.59
12 Sept
ARCELORMITTAL
JP Morgan rates the global steel giant as overweight and reduces its price
target from 35 to 26. The broker also reduces its 2011 earnings outlook,
with its forecasts for Ebitda down from $11.4bn to $10.6bn, and earnings per
share at $2.61 instead of $3.12. The change is mainly due to a fall in flat car-
bon Europe shipments and the weak US dollar. JP Morgan expects long steel
and mining to support 2012 earnings.
ANALYSIS l Carillion
380
340
300
Jul Aug Sep
p
321.80
12 Sept
CARILLION
UBS rates the building group as neutral and reduces its target price to
350p from 390p. The brokers forecasts are largely unchanged after the first-
half performance, with profit and earnings per share in line with expectations.
UBS anticipates low growth of two per cent in support services, excluding
the consolidation benefit of Eaga/Carillion Energy Services, and increases its
pension deficit forecast as market volatility impacts its value by 20p.
ANALYSIS l Adidas
56
52
48
44
Jul Aug Sep
45.45
12 Sept
ADIDAS GROUP
Citi initiates coverage of the German sporting goods group with a buy/medi-
um risk rating and a target price of 56, seeing it as a premium growth
stock that is trading on a modest valuation, and underpinned by a strong bal-
ance sheet. The broker expects the contribution of emerging markets to
group revenue to increase from one third to 50 per cent over five years, giv-
ing Adidas rising exposure to the highest growth sportswear markets.
13Jun 01 Jul 21 Jul 31 Aug 10Aug
6,200
5,400
5,000
5,800
ANALYSIS l FTSE
5129.62
12 Sept
Savills
The property services firm has hired Iain
Chapman as senior director of regional com-
mercial leasing in Asia, based in Hong Kong.
Chapman began his real estate career in Asia
in 1990, joining Savills in 1995, before moving
to Colliers in 2000, as director and co-head of
Hong Kong commercial leasing. Chapman will
work with the existing team on key projects
and also service international corporate clients
in Asia, linking with Savills European teams
and US strategic partner, CresaPartners.
B
USINESSES prosper at different
times. Over the duration of a busi-
ness cycle, which typically lasts for
about seven years, certain businesses
do well in the early period of economic
expansion, some do better during mid-
expansion and others prosper as economic
activity begins to lessen. These fluctua-
tions in the business activity of companies
can be traded by buying stocks in hot sec-
tors and selling stocks in less hot sectors
throughout the period.
The diagram (right) illustrates when
each business sector within the equity
asset class is likely to outperform other sec-
tors during the business cycle. Lets take
basic materials as an example. Basic mate-
rials such as iron ore, cement, lumber, tin
and copper are all used in construction,
and the period of middle expansion dur-
ing a business cycle upturn is normally
when construction work tends to gather
pace. Then, such materials as produced by
companies like Rio Tinto Zinc are in
demand. So during periods of expansion
companies who produce basic materials
that support the construction industry
tend to enjoy higher-moving share prices
than utility companies, that are less likely
to benefit from a boom in construction.
In a similar way, technology stocks tend
to outperform at the beginning of an eco-
nomic cycle as the business world starts to
gear up their IT spend and upgrade their IT
infrastructure as business prospects start
to look brighter. Transportation companies
also begin to benefit from the increased
flow of business activity during early
expansion, when more goods are bought
by recovering companies and need to be
Wealth Management| CFDs
Trade with the equity
sectors economic cycle
A
T THE end of last week, investors were digest-
ing President Obamas proposed $447bn jobs
package. This was significantly bigger than
the $300bn expected, and the hope is that it
will encourage firms to start hiring again. But every-
thing comes with a cost, and savings will have to be
made elsewhere. The President has passed these
decisions over to the Joint Select Committee on
Deficit Reduction. The committee meets again today,
and in addition to the $1.2-1.5 trillion savings it has to
find over the next decade, it must now decide where
the $447bn of spending cuts is going to come from.
The majority of market participants are unim-
pressed, saying that the plan simply repeats meas-
ures that have been taken before which have done
nothing to help the economy. As equity markets
slump, many investors are pounding the table for
another round of Federal Reserve stimulus (QE3). The
FOMC meets on the 20 and 21 September and the
central banks options seem to break down as follows:
l Additional asset purchases this is difficult to justi-
fy and will lead to an outcry both internationally and
domestically. More stimulus will undermine the dollar
and spur inflation, which is particularly hard on
emerging economies. In the US, Wall Street is seen
as the only beneficiary of quantitative easing so far.
l Operation Twist the Fed sells its shorter duration
debt and buys longer-dated Treasuries. The aim is to
reduce borrowing costs for companies and individu-
als. But yields are already at record lows, and it is dif-
ficult to see how any fall from here will encourage
further borrowing. Also, flattening the yield curve (as
this would do) will hurt bank profitability.
l Cut the rate paid on bank reserves. This is supposed
to stimulate bank lending. But the rate is already low
at 0.25 per cent and banks have plenty of lending
capacity. The problem is that those who need to bor-
row arent credit-worthy, while the ones that are
dont want additional debt.
So the FOMC has no easy choices. In the mean-
time the European debt crisis has taken a turn for the
worse. If Greece does default, then the decision to ini-
tiate a QE3 may get a whole lot more compelling.
OBAMAS JOB
PLAN BRINGS
CALLS FOR QE3
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
ANALYSIS l Equity sector rotation within a single economic cycle
S
o
u
r
c
e
:
J
.
M
u
r
p
h
y
,
I
n
t
e
r
m
a
r
k
e
t

A
n
a
ly
s
is
,
P
r
o
f
it

f
r
o
m

G
lo
b
a
l
M
a
r
k
e
t

R
e
la
t
io
n
s
h
ip
s

(
2
0
0
4
)
One complete economic cycle
Early
expansion
Energy
Consumer
staples
Utilities
Financials
Consumer cyclicals
Basic
materials
Capital goods
Services
Technology
Transportation
Middle
expansion
Late
expansion
Early
contraction
Late
contraction
shipped. Then, as companies start to grow
their businesses during middle expansion,
they require more services to manage their
growth, including professional services
like accountants and lawyers.
As the business cycle picks up and reach-
es late expansion, infrastructure spending
starts to rise. Construction companies start
to see increased business, and capital
goods producers begin to build more com-
ponents for factories to assemble. A greater
demand for logistics spending leads to
greater requirements for the use of iron
ore, copper, zinc, aluminium, cement and
other raw materials that help to build
more air conditioning units, aeroplanes,
factory machines and packaging materi-
als. As the economic cycle gathers pace,
the share prices of companies in the busi-
ness sectors that are seeing increased
demand start to appreciate relative to
other sectors that are not seeing greater
business activity, as investors expect high-
er dividend payments and stock price
appreciation.
Then as business begins to tail off in the
period of early contraction, spending on
capital goods falls, demand for basic mate-
rials collapses and the sector rotation con-
tinues. If traders are able to time their
entry and exit points carefully, they can
take advantage of trading equity sectors
and profit by buying stocks that are in
demand and selling stocks that are not.
David James Norman is visiting professor at
the Essex Business School, where he is running
trader bootcamps in September and November
2011. Visit www.tradertraining.net and follow
the link to Essex Business School, or contact
Denise Sherer at deniseh@essex.ac.uk.
TRADING COMMENT
DAVID JAMES NORMAN
Resistance is
futile: French
banks come
under fire
A
T the end of yesterdays
European trading session,
the equities market was a sea
of red. European banking
stocks were sold across the board,
with the French banks being hit
hardest. BNP Paribas fell by more
than 10 per cent. Its Gallic brothers
in arms, Societe Generale and Credit
Agricole, also took a heavy battering,
amid a fear that Moodys ratings
review of the French banks could
become a downgrade this week.
So why are the Continental and,
in particular, the French banks look-
ing so vulnerable? The biggest worry
is uncertainty about the size of their
exposure to the event of a Greek
default. If Greece finally caves in,
and should there be a domino effect
within the Eurozone periphery,
then there would be a significant
writedown of assets in the European
banking sector. Estimates suggest
that holdings of sovereign debt by
European banks tops 3 trillion, or
around 8 per cent of their assets.
The bond markets yesterday did
nothing to assuage these worries.
The yield on one-year Greek bonds
hit an eyewatering 117 per cent,
with default looking a foregone con-
clusion.
French Central Bank head
Christian Noyer and Societe
Generale chief executive Frederic
Oudea gave statements yesterday,
doing their best impressions of Rene
Artois in an Allo Allo sketch
telling everybody theres nothing
to see here as French banking
stocks tumbled around their ears.
But markets paid them scant atten-
tion.
So should traders be trying to
cash in on this volatility? Trading
in French banks is definitely for the
brave or the crazy at the moment,
says Ian OSullivan, head of sales at
SpreadCo. Despite the statements
made by Oudea and Noyer yesterday,
he advises that if yesterdays price
action is anything to go by, any
profitable trades should be banked
straight away. It seems that any sort
of rally will be met with selling
interest for the moment, says
OSullivan. So better to bank a prof-
it on a short term trade and move on
than see it turn to a loss just as
quick.
And listen very carefully, I shall
say this only once any traders look-
ing to profit in the French equity
markets should pay particular atten-
tion to their stops.
As Eurozone volatility spikes, traders
should be wary, writes Craig Drake
THE TIPSTER
NEXT MOVE
FROM NEXT
could leave them looking under-
valued. IG Markets current
price on Credit Agricole is
4.892-4.895
Kesa Electricals owns elec-
trical retailer Comet and is one
of the major high street chains
that has found the recent slow-
down in economic activity really
affecting revenues.
Investors will be hoping that
Thursdays trading statement
will be enough to stop a further
decline in its share price which
has dipped below the 1 mark
for the first time since 2009.
Capital CFDs quotes 88.6p-
89.1p for Kesas share price.
As speculation over a possi-
ble Greek default intensifies, so
does the flight to safety, and the
yield on 10-year US Treasuries
is trading at a record low.
Traders have also been buying
into them on the back of expec-
tation that US retail sales will
show a slow down for the
month of August. Capital CFDs
quotes US 10-year December at
130.93 130.97.
Craig Drake
C
FD traders were selling
shares in Next as they
approached 23.50, a line
which has held its advances
several times over the last 17
months. Next updates the market
with interims on Thursday, where
good catalogue and online sales
are expected to offset a 1.7 per
cent fall in store sales. Spread Co
offers a spread on Next of 23.342
-23.398
Theres no end in sight to the
worrying over the health of the
Eurozone and French banks have
been feeling the heat. Moodys put
them on ratings review back in
June so with a 90-day deadline
looming, the risk is that we could
see a downgrade this week. Price
falls have been seen across the
board, but of course any reprieve
CITYA.M. 13 SEPTEMBER 2011 25
You may wonder
what I am
doing...
Picture: REX
LON GD ONCE FIX AM...........1843.00 -36.50
SILVER LDN FIX AM ..................40.78 -0.99
MAPLE LEAF 1 OZ ....................42.77 1.29
LON PLATINUM AM................1831.00 -26.00
LON PALLADIUM AM...............732.00 -30.00
ALUMINIUM CASH .................2342.00 -23.00
COPPER CASH ......................8904.00 -136.50
LEAD CASH...........................2453.00 30.00
NICKEL CASH......................21475.00 -60.00
TIN CASH.............................24090.00 -310.00
ZINC CASH ............................2185.00 -10.50
BRENT SPOT INDEX ................111.79 -0.74
SOYA .....................................1416.50 9.25
COCOA..................................2868.00 -41.00
COFFEE...................................271.25 -14.15
KRUG.....................................1898.80 -10.20
WHEAT ....................................167.38 -0.88
AIR LIQUIDE........................................85.22 -2.40 100.65 80.90
ALLIANZ..............................................57.47 -3.97 108.85 57.04
ALSTOM ..............................................25.95 -1.59 45.32 25.85
ANHEUS-BUSCH INBEV ....................36.27 -1.11 46.33 33.85
ARCELORMITTAL...............................12.59 -0.44 28.55 12.24
AXA........................................................8.48 -0.91 16.16 8.20
BANCO SANTANDER...........................5.26 -0.26 9.80 5.25
BASF SE..............................................43.66 -0.54 70.22 42.19
BAYER.................................................38.44 -0.56 59.44 35.36
BBVA......................................................5.14 -0.29 10.21 5.10
BMW ....................................................50.90 -0.79 73.85 44.52
BNP PARIBAS.....................................26.12 -3.68 59.93 25.41
CARREFOUR ......................................15.26 -0.94 36.06 15.26
CREDIT AGRICOLE..............................4.83 -0.58 12.92 4.65
CRH PLC .............................................10.50 -0.56 17.40 10.31
DAIMLER.............................................31.78 -0.59 59.09 30.93
DANONE..............................................43.63 -1.33 53.16 42.08
DEU.BOERSE OFFRE ........................38.31 -1.06 55.75 37.03
DEUTSCHE BANK..............................21.40 -1.69 48.70 20.79
DEUTSCHE TELEKOM.........................7.95 -0.20 11.38 7.92
E.ON.....................................................12.88 -0.50 25.54 12.50
ENEL......................................................2.93 -0.09 4.86 2.86
ENI .......................................................13.04 -0.32 18.66 11.83
FRANCE TELECOM............................11.39 -0.63 17.45 11.39
GDF SUEZ ...........................................19.62 -0.22 30.05 18.32
GENERALI ASS...................................10.65 -0.28 17.05 10.34
IBERDROLA..........................................4.42 -0.16 6.50 4.35
ING GROEP CVA...................................4.49 -0.42 9.50 4.41
INTESA SANPAOLO.............................0.87 -0.09 2.53 0.86
KON.PHILIPS ELECTR.......................12.23 -0.39 25.45 12.06
L'OREAL..............................................71.70 -1.34 91.24 70.74
LVMH..................................................107.70 -3.60 132.65 97.54
MUNICH RE.........................................79.55 -2.11 126.00 78.47
NOKIA....................................................4.23 -0.17 8.49 3.33
REPSOL YPF.......................................18.75 -0.46 24.90 17.31
RWE.....................................................21.77 -0.92 55.88 21.37
SAINT-GOBAIN...................................28.71 -1.67 47.64 28.15
SANOFI ................................................46.51 -1.73 56.82 42.85
SAP......................................................35.60 -0.69 46.15 32.88
SCHNEIDER ELECTRIC.....................38.21 -1.26 61.83 37.42
SIEMENS .............................................64.45 -0.51 99.39 62.13
SOCIETE GENERALE.........................15.57 -1.88 52.70 14.80
TELECOM ITALIA..................................0.73 -0.04 1.16 0.72
TELEFONICA ......................................12.69 -0.50 19.69 12.65
TOTAL..................................................32.12 -0.71 44.55 30.34
UNIBAIL-RODAMCO SE...................136.05 -4.90 162.95 124.50
UNICREDIT............................................0.69 -0.08 2.05 0.69
UNILEVER CVA...................................22.41 -0.53 24.08 20.82
VINCI ....................................................31.42 -1.20 45.48 30.67
VIVENDI ...............................................15.46 -0.60 22.07 14.10
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5129.62 -85.03 -1.63
FTSE 250 INDEX . . . . . . . . 9983.75 -167.68 -1.65
FTSE UK ALL SHARE . . . . 2662.11 -44.42 -1.64
FTSE AIMALL SH . . . . . . . . 764.53 -9.81 -1.27
DOWJONES INDUS 30 . . 11061.12 68.99 0.63
S&P 500. . . . . . . . . . . . . . . . 1162.27 8.04 0.70
NASDAQ COMPOSITE . . . 2495.09 27.10 1.10
FTSEUROFIRST 300 . . . . . . 890.98 -24.54 -2.68
NIKKEI 225 AVERAGE. . . . 8535.67 -201.99 -2.31
DAX 30 PERFORMANCE. . 5072.33 -117.60 -2.27
CAC 40 . . . . . . . . . . . . . . . . 2854.81 -119.78 -4.03
SHANGHAI SE INDEX . . . . 2497.75 -1.19 -0.05
HANG SENG. . . . . . . . . . . 19030.54 -836.09 -4.21
S&P/ASX 20 INDEX . . . . . . 2422.40 -91.40 -3.64
ASX ALL ORDINARIES . . . 4125.10 -152.30 -3.56
BOVESPA SAO PAOLO. . 55685.47 -92.92 -0.17
ISEQ OVERALL INDEX . . . 2382.06 -61.96 -2.54
STI . . . . . . . . . . . . . . . . . . . . 2743.58 -81.52 -2.89
IGBM. . . . . . . . . . . . . . . . . . . 770.26 -27.98 -3.51
SWISS MARKET INDEX. . . 5303.14 -127.63 -2.35
Price Chg %chg
3M........................................................78.22 1.57 98.19 76.00
ABBOTT LABS ...................................50.51 0.08 54.24 45.07
ALCOA.................................................11.55 -0.03 18.47 10.99
ALTRIA GROUP..................................26.54 0.17 28.13 23.20
AMAZON.COM..................................216.56 5.17 227.45 139.26
AMERICAN EXPRESS........................47.46 0.18 53.80 37.33
AMGEN INC.........................................54.06 0.02 61.53 47.66
APPLE...............................................379.94 2.46 404.50 261.40
AT&T....................................................27.88 0.34 31.94 27.20
BANK OF AMERICA.............................7.05 0.07 15.31 6.01
BERKSHIRE HATAW B.......................69.24 1.47 87.65 66.51
BOEING CO.........................................62.39 0.60 80.65 56.01
BRISTOL MYERS SQUI ......................29.44 0.28 30.14 20.05
CATERPILLAR....................................83.87 -0.09 116.55 70.01
CHEVRON...........................................95.91 0.72 109.94 77.27
CISCO SYSTEMS................................16.09 0.27 24.60 13.30
CITIGROUP.........................................26.96 0.22 51.50 25.40
COCA-COLA.......................................69.38 0.01 71.77 57.22
COLGATE PALMOLIVE......................87.72 -1.24 92.00 73.62
CONOCOPHILLIPS.............................64.24 0.01 81.80 54.68
CVS/CAREMARK................................36.78 0.28 39.50 28.60
DU PONT(EI) DE NMR........................44.28 -0.99 57.00 42.08
EXXON MOBIL....................................71.84 0.83 88.23 60.36
GENERAL ELECTRIC.........................15.01 -0.08 21.65 14.72
GOOGLE A........................................530.12 5.27 642.96 470.58
HEWLETT PACKARD.........................22.58 -0.07 49.39 22.13
HOME DEPOT.....................................32.35 0.48 39.38 28.13
IBM.....................................................162.42 1.05 185.63 126.15
INTEL CORP .......................................20.28 0.58 26.78 17.84
J.P.MORGAN CHASE.........................32.42 0.34 48.36 31.21
JOHNSON & JOHNSON.....................63.59 -0.05 68.05 57.50
KRAFT FOODS A................................34.25 -0.26 36.30 24.30
MC DONALD'S CORP ........................86.19 1.16 91.22 72.14
MERCK AND CO. NEW......................32.00 0.16 37.68 29.47
MICROSOFT........................................25.89 0.15 29.46 23.65
OCCID. PETROLEUM.........................79.54 -1.00 117.89 73.86
ORACLE CORP...................................26.75 0.75 36.50 24.21
PEPSICO.............................................60.14 0.15 71.89 59.25
PFIZER ................................................18.25 -0.04 21.45 16.25
PHILIP MORRIS INTL .........................66.02 0.12 72.74 53.22
PROCTER AND GAMBLE ..................61.83 -0.01 67.72 56.57
QUALCOMM INC ................................51.39 0.99 59.84 40.07
SCHLUMBERGER ..............................72.38 0.58 95.64 57.28
TRAVELERS CIES..............................48.96 0.82 64.17 46.62
UNITED TECHNOLOGIE ....................71.13 0.60 91.83 67.12
UNITEDHEALTH GROUP...................46.26 0.74 53.50 33.80
VERIZON COMMS ..............................35.25 0.01 38.95 30.55
WAL-MART STORES..........................51.82 0.46 57.90 48.31
WALT DISNEY CO ..............................31.29 0.25 44.34 29.60
WELLS FARGO & CO.........................24.10 0.58 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.816 0.00
LIBOR Euro - 12 months ................2.029 0.00
LIBOR USD - overnight...................0.143 0.00
LIBOR USD - 12 months.................0.828 0.00
HaIifax mortgage rate .....................3.990 0.00
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.240 -0.08
European repo rate.........................0.957 0.20
Euro Euribor ....................................1.096 0.00
The vix index ...................................41.78 3.26
The baItic dry index ........................1.838 0.05
Markit iBoxx...................................233.12 1.38
Markit iTraxx..................................200.55 27.74
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
C/$ 1.3605 0.0046
C/ 0.8599 0.0004
C/ 105.16 0.7650
/C 1.1634 0.0023
/$ 1.5816 0.0065
/ 122.30 0.9707
FTSE 100
5129.62
85.03
FTSE 250
9983.75
167.68
FTSE ALLSHARE
2662.11
44.42
DOW
11061.12
68.99
NASDAQ
2495.09
27.10
S&P 500
1162.27
8.04
Smiths Group . . . . . .914.0 -21.0 1429.0 907.5
Brown (N.) Group . . .273.0 2.2 311.2 229.4
Carpetright . . . . . . . . .501.0 -15.0 835.5 483.7
Debenhams . . . . . . . . .51.2 -2.3 77.4 50.8
Dignity . . . . . . . . . . . .822.0 -11.5 838.0 633.0
Dixons RetaiI . . . . . . .10.8 -0.2 28.5 10.2
DuneImGroup . . . . . .422.9 0.9 550.0 378.4
HaIfords Group . . . . .269.7 -7.4 498.4 267.4
Home RetaiI Group . .105.1 -1.7 235.0 99.8
Inchcape . . . . . . . . . .269.8 -5.4 425.4 267.5
JD Sports Fashion . .855.0 19.5 1030.0 726.0
Kesa EIectricaIs . . . . .90.3 -2.8 174.0 88.4
Kingfisher . . . . . . . . .232.8 0.7 287.1 211.1
Marks & Spencer G . .315.0 0.5 427.5 301.8
Mothercare . . . . . . . .346.4 -6.5 627.5 343.7
Next . . . . . . . . . . . . .2339.0 -8.0 2426.0 1868.0
Sports Direct Int . . . .216.8 -6.8 266.2 124.0
WH Smith . . . . . . . . . .487.5 -9.6 523.0 431.8
Smith & Nephew . . . .585.0 -9.5 742.0 521.0
Synergy HeaIth . . . . .887.0 0.0 981.0 690.0
Barratt DeveIopme . . .74.9 -1.3 119.0 67.5
BeIIway . . . . . . . . . . . .559.5 -6.0 753.5 511.0
BerkeIey Group Ho .1213.0 -13.0 1299.0 789.5
BaIfour Beatty . . . . . .229.3 -6.3 357.3 227.7
KeIIer Group . . . . . . .343.0 -7.0 698.5 343.0
Kier Group . . . . . . . .1125.0 -9.0 1418.0 1068.0
Drax Group . . . . . . . .521.5 -7.0 536.5 353.6
Scottish & Southe . .1254.0 -21.0 1423.0 1108.0
Domino Printing S . .542.0 -10.5 705.0 489.0
HaIma . . . . . . . . . . . . .338.6 -7.1 429.6 303.6
Laird . . . . . . . . . . . . . .138.1 -6.8 207.0 127.9
Morgan CrucibIe C . .250.9 -13.5 357.1 205.3
Renishaw . . . . . . . . .1278.0 -40.0 1886.0 950.0
Spectris . . . . . . . . . .1346.0 -35.0 1679.0 998.0
Aberforth SmaIIer . . .539.0 -7.0 714.0 533.0
AIIiance Trust . . . . . .329.4 -4.6 392.7 322.8
Bankers Inv Trust . . .356.5 -3.5 428.0 352.3
BH GIobaI Ltd. GB .1179.0 0.0 1180.0 1058.0
BH GIobaI Ltd. US . . . .11.6 0.0 11.8 10.4
BH Macro Ltd. EUR . . .19.6 0.2 19.6 15.8
BH Macro Ltd. GBP 2008.0 16.0 2015.0 1630.0
BH Macro Ltd. USD . . .19.4 0.1 19.5 15.8
BIackRock WorId M .672.0 -10.0 815.5 600.0
BIueCrest AIIBIue . . .169.3 0.0 176.2 162.4
British Assets Tr . . . .113.3 -0.8 140.5 112.0
British Empire Se . . .457.0 -6.0 533.0 448.0
CaIedonia Investm .1507.0 -43.0 1928.0 1502.0
City of London In . . .263.2 -4.0 306.9 257.0
Dexion AbsoIute L . .141.6 1.4 151.0 135.2
Edinburgh Dragon . .218.7 -4.4 262.1 213.0
Edinburgh Inv Tru . . .435.2 -4.6 492.2 414.9
EIectra Private E . . .1295.0 -48.0 1755.0 1289.0
F&C Inv Trust . . . . . .273.5 -2.5 327.9 268.5
FideIity China Sp . . . . .82.5 -1.6 128.7 80.0
FideIity European . . .961.5 -34.5 1287.0 945.0
FideIity SpeciaI . . . . .454.2 -10.8 595.0 452.9
HeraId Inv Trust . . . . .432.5 -4.5 545.5 402.3
HICL Infrastructu . . . .115.2 -0.2 121.3 112.0
Impax Environment . .97.5 0.0 130.5 97.3
JPMorgan American .764.0 -19.0 916.0 719.0
JPMorgan Asian In . .202.0 -2.0 250.8 197.1
JPMorgan Emerging .520.5 -4.5 639.0 499.3
JPMorgan European .714.5 -17.5 983.5 688.0
JPMorgan Indian I . . .365.6 -9.4 502.0 354.8
JPMorgan Russian .501.0 -4.5 755.0 495.5
Law Debenture Cor . .323.1 -0.9 385.0 306.9
MercantiIe Inv Tr . . . .886.5 -15.0 1137.0 877.0
Merchants Trust . . . .353.2 0.2 431.8 343.1
Monks Inv Trust . . . .325.9 -3.1 367.9 311.3
Murray Income Tru . .587.0 -8.0 673.0 576.5
Murray Internatio . . .869.5 -16.5 991.5 845.5
PerpetuaI Income . . .240.2 -1.4 276.0 230.6
PoIar Cap TechnoI . .317.0 2.0 391.2 299.5
RIT CapitaI Partn . . .1211.0 6.0 1334.0 1110.0
Scottish Inv Trus . . . .434.4 -5.6 524.0 423.5
Scottish Mortgage . .649.0 -19.0 781.0 606.0
SVG CapitaI . . . . . . . .235.9 -1.2 279.8 153.8
TempIe Bar Inv Tr . . .815.5 -17.0 952.0 782.0
TempIeton Emergin .565.5 -3.0 689.5 554.0
TR Property Inv T . . .163.8 -3.1 206.1 151.7
TR Property Inv T . . . .75.5 -0.3 94.0 68.5
Witan Inv Trust . . . . .426.8 -5.7 533.0 420.0
3i Group . . . . . . . . . . .188.4 -9.1 340.0 188.4
3i Infrastructure . . . .120.3 -0.6 125.2 112.9
Aberdeen Asset Ma .182.7 -8.2 240.0 144.7
Ashmore Group . . . .399.9 -10.4 420.0 301.5
Brewin DoIphin Ho . .126.4 -2.3 185.4 117.0
CameIIia . . . . . . . . . .9392.5 25.010950.0 8895.0
CharIes TayIor Co . . .144.0 0.0 198.3 122.0
City of London Gr . . . .76.3 0.0 93.6 76.3
City of London In . . .378.5 -5.0 461.5 289.0
CIose Brothers Gr . . .665.5 -22.5 888.5 656.5
CoIIins Stewart H . . . .69.5 -1.5 90.8 67.0
EvoIution Group . . . . .88.0 -4.5 94.0 62.3
F&C Asset Managem .66.6 0.4 92.9 58.7
Hargreaves Lansdo .466.4 -11.4 646.5 402.5
HeIphire Group . . . . . . .2.7 -0.0 39.0 2.2
Henderson Group . . .117.4 -4.8 173.1 116.8
Highway CapitaI . . . . .14.5 0.0 21.0 6.0
ICAP . . . . . . . . . . . . . .468.5 -7.0 570.5 391.3
IG Group HoIdings . .428.5 -3.9 553.0 393.6
Intermediate Capi . . .225.1 -6.9 360.3 204.8
InternationaI Per . . . .223.1 -11.8 388.8 216.5
InternationaI Pub . . . .115.0 -0.1 118.3 108.6
Investec . . . . . . . . . . .403.6 -11.0 538.0 378.7
IP Group . . . . . . . . . . . .46.3 -2.0 54.5 27.9
Jupiter Fund Mana . .200.0 -2.2 337.3 184.9
Liontrust Asset M . . . .72.5 -3.0 95.3 72.0
LMS CapitaI . . . . . . . . .61.0 0.0 64.8 44.5
London Finance & . . .21.5 0.0 23.5 16.5
London Stock Exch .836.5 -21.5 1076.0 675.0
Lonrho . . . . . . . . . . . . .14.5 -0.3 19.8 10.5
Man Group . . . . . . . . .227.1 10.9 311.0 178.0
Paragon Group Of . .146.8 -2.3 206.1 134.6
Provident Financi . .1058.0 -18.0 1124.0 728.5
Rathbone Brothers .1050.0 11.0 1257.0 828.0
Record . . . . . . . . . . . . .29.4 0.0 52.0 20.3
RSM Tenon Group . . .27.0 -0.5 66.3 21.3
Schroders . . . . . . . .1328.0 -56.0 1922.0 1314.0
Schroders (Non-Vo .1068.0 -38.0 1554.0 1056.0
TuIIett Prebon . . . . . .355.4 -5.3 428.6 329.8
WaIker Crips Grou . . .49.0 0.0 51.5 45.0
BT Group . . . . . . . . . .162.3 -3.5 204.1 138.9
CabIe & WireIess . . . .37.5 0.0 61.1 31.3
CabIe & WireIess . . . .31.1 -1.6 78.4 30.8
COLT Group SA . . . .100.6 -2.8 156.2 100.5
TaIkTaIk TeIecom . . .126.5 -3.1 168.3 119.8
TeIecomPIus . . . . . . .668.0 -9.5 700.0 365.5
Booker Group . . . . . . .67.9 -1.0 77.9 46.1
Greggs . . . . . . . . . . . .472.4 -3.6 550.5 429.1
Morrison (Wm) Sup .294.0 -5.8 308.3 262.7
Ocado Group . . . . . . .113.0 -0.6 285.0 107.0
Sainsbury (J) . . . . . . .275.6 -10.1 395.0 274.1
Tesco . . . . . . . . . . . . .363.7 -5.2 440.7 358.8
Associated Britis . .1052.0 -18.0 1182.0 940.0
Cranswick . . . . . . . . .619.5 0.0 896.0 606.0
Dairy Crest Group . . .339.3 -8.9 424.9 334.1
Devro . . . . . . . . . . . . .236.8 1.8 296.9 218.0
Premier Foods . . . . . . .11.4 -0.8 35.1 11.2
Tate & LyIe . . . . . . . . .584.0 -18.5 656.0 461.6
UniIever . . . . . . . . . .1941.0 -41.0 2081.0 1750.0
Mondi . . . . . . . . . . . . .506.0 -16.5 664.0 468.8
Centrica . . . . . . . . . . .289.1 -3.4 345.8 283.1
InternationaI Pow . . .318.7 -3.8 448.6 279.4
NationaI Grid . . . . . . .616.0 -6.0 632.5 530.0
Northumbrian Wate .461.3 0.1 469.5 295.5
Pennon Group . . . . . .653.0 -19.5 737.5 579.5
Severn Trent . . . . . .1420.0 -34.0 1517.0 1306.0
United UtiIities . . . . .582.0 -10.0 632.0 543.5
Cookson Group . . . . .421.1 -13.8 724.5 414.9
DS Smith . . . . . . . . . .189.4 -6.0 266.2 145.9
Rexam . . . . . . . . . . . .319.5 -10.0 400.0 301.5
RPC Group . . . . . . . .307.8 -7.2 384.8 215.4
BAE Systems . . . . . .271.0 -1.5 369.9 248.1
Chemring Group . . . .533.0 -1.0 736.5 485.0
Cobham . . . . . . . . . . .179.3 -3.5 245.6 173.4
Meggitt . . . . . . . . . . . .306.0 -10.4 397.6 288.3
QinetiQ Group . . . . . .117.9 -0.1 136.3 96.7
RoIIs-Royce Group . .606.0 -16.5 665.0 557.5
Senior . . . . . . . . . . . . .137.1 -4.2 190.6 122.4
UItra EIectronics . . .1408.0 -33.0 1895.0 1305.0
GKN . . . . . . . . . . . . . .175.9 -4.2 245.0 158.2
BarcIays . . . . . . . . . . .141.7 -2.4 333.6 135.9
HSBC HoIdings . . . . .492.6 -12.0 730.9 488.2
LIoyds Banking Gr . . .30.6 -0.5 77.6 27.6
RoyaI Bank of Sco . . .20.8 -0.7 50.2 19.7
Standard Chartere .1334.0 9.5 1950.0 1295.0
AG Barr . . . . . . . . . . .1111.0 -36.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .307.1 -8.4 503.5 289.9
Diageo . . . . . . . . . . .1188.0 -12.0 1307.0 1070.0
SABMiIIer . . . . . . . . .2170.0 -27.0 2340.0 1968.0
AZ EIectronic Mat . . .240.0 -0.1 338.1 210.0
Croda Internation . .1766.0 -35.0 2081.0 1367.0
EIementis . . . . . . . . . .138.9 -4.5 187.4 88.4
Johnson Matthey . .1534.0 -41.0 2119.0 1518.0
Victrex . . . . . . . . . . .1224.0 -22.0 1590.0 1178.0
YuIe Catto & Co . . . . .163.5 -7.1 253.0 150.1
Price Chg High Low
Bovis Homes Group .390.0 -9.9 464.7 326.5
Persimmon . . . . . . . .432.1 -4.1 502.5 336.5
Reckitt Benckiser . .3220.0 -49.0 3648.0 3015.0
Redrow . . . . . . . . . . . .111.0 -2.2 139.0 98.4
TayIor Wimpey . . . . . . .30.0 -0.6 43.3 22.3
Bodycote . . . . . . . . . .268.0 -9.5 397.7 240.8
Charter Internati . . . .857.0 53.0 880.0 538.5
Fenner . . . . . . . . . . . .341.5 -3.5 422.5 229.0
IMI . . . . . . . . . . . . . . . .777.5 -19.0 1119.0 733.0
MeIrose . . . . . . . . . . .289.2 9.2 365.4 254.0
Northgate . . . . . . . . . .258.0 -6.0 346.7 202.0
Rotork . . . . . . . . . . .1632.0 -30.0 1895.0 1501.0
Spirax-Sarco Engi . .1777.0 -31.0 2063.0 1649.0
Weir Group . . . . . . .1754.0 -52.0 2218.0 1371.0
Ferrexpo . . . . . . . . . . .357.9 -4.9 499.0 292.4
TaIvivaara Mining . . .290.2 -15.6 622.0 289.8
BBAAviation . . . . . . .160.0 -1.6 240.8 156.0
Stobart Group Ltd . . .129.5 -2.5 163.6 124.1
AdmiraI Group . . . . .1280.0 -27.0 1754.0 1278.0
AmIin . . . . . . . . . . . . .283.5 -13.9 427.0 283.5
BeazIey . . . . . . . . . . . .111.4 -2.8 139.2 109.6
Informa . . . . . . . . . . . .327.5 -6.5 461.1 325.1
ITE Group . . . . . . . . . .182.5 -1.8 258.2 158.0
ITV . . . . . . . . . . . . . . . . .51.7 -0.9 93.5 50.3
Johnston Press . . . . . . .4.7 -0.3 15.5 4.4
MecomGroup . . . . . .154.0 -0.5 310.0 150.7
Moneysupermarket. .107.5 -2.3 120.4 75.7
Pearson . . . . . . . . . .1060.0 -15.0 1207.0 926.0
PerformGroup . . . . .202.0 3.0 234.5 150.0
Reed EIsevier . . . . . .470.8 -9.6 590.5 461.3
Rightmove . . . . . . . .1243.0 15.0 1307.0 725.0
STV Group . . . . . . . . .109.0 -1.0 168.0 89.8
Tarsus Group . . . . . .137.5 -4.5 165.0 112.5
Trinity Mirror . . . . . . . .39.3 -1.8 124.0 37.5
United Business M . .416.0 -7.7 725.0 406.7
UTV Media . . . . . . . . .127.8 0.1 151.0 101.0
WiImington Group . . .85.3 -1.5 183.0 85.3
WPP . . . . . . . . . . . . . .590.0 -16.5 846.5 578.5
YeII Group . . . . . . . . . . .4.2 -0.3 16.6 3.8
African Barrick G . . .605.5 3.5 638.0 393.5
AngIo American . . .2358.5 -45.5 3437.0 2234.0
AngIo Pacific Gro . . .287.1 -8.6 369.3 257.1
Antofagasta . . . . . . .1249.0 -40.0 1634.0 1120.0
Aquarius PIatinum . .217.8 1.0 419.0 207.9
BHP BiIIiton . . . . . . .1933.5 -27.5 2631.5 1846.0
Centamin Egypt Lt . .104.7 -4.6 197.1 89.7
CatIin Group Ltd. . . .336.0 -3.8 421.4 325.0
Hiscox Ltd. . . . . . . . . .349.0 -5.5 424.7 340.5
Jardine LIoyd Tho . . .617.0 1.0 709.0 564.5
Lancashire HoIdin . . .631.0 0.5 700.0 529.0
RSA Insurance Gro . .107.9 -2.7 143.5 107.4
Aviva . . . . . . . . . . . . . .289.2 -13.5 477.9 286.7
LegaI & GeneraI G . . . .90.9 -3.1 123.8 90.0
OId MutuaI . . . . . . . . .110.4 -1.3 145.2 103.2
Phoenix Group HoI . .503.0 -7.0 730.0 458.0
PrudentiaI . . . . . . . . .568.0 -8.5 777.0 549.5
ResoIution Ltd. . . . . .235.3 -10.8 316.1 211.3
St James's PIace . . . .320.0 -17.0 376.0 236.2
Standard Life . . . . . . .186.8 -3.4 244.7 172.0
4Imprint Group . . . . .207.0 -8.0 295.0 195.0
Aegis Group . . . . . . .121.3 -2.2 163.5 119.0
BIoomsbury PubIis . . .99.5 -1.3 138.0 98.7
British Sky Broad . . .673.5 -10.0 850.0 618.5
Centaur Media . . . . . . .37.3 -1.3 73.0 37.0
Chime Communicati .176.8 -4.3 298.5 173.0
Creston . . . . . . . . . . . .84.8 -0.5 121.0 78.5
DaiIy MaiI and Ge . . .360.0 -9.9 594.5 357.3
Euromoney Institu . .522.5 -12.5 736.0 522.5
Future . . . . . . . . . . . . . .10.9 -0.8 30.0 10.8
Haynes PubIishing . .235.0 0.0 262.5 202.5
Huntsworth . . . . . . . . .57.8 -0.5 86.0 56.5
Eurasian NaturaI . . .622.5 -22.5 1125.0 585.5
FresniIIo . . . . . . . . . .1989.0-161.0 2150.0 1137.0
GemDiamonds Ltd. .216.0 6.0 306.0 179.8
GIencore Internat . . .407.7 -6.3 531.1 348.0
HochschiId Mining . .532.0 -2.0 680.0 390.5
Kazakhmys . . . . . . . .998.5 -19.5 1671.0 918.0
Kenmare Resources . .43.2 -1.3 59.9 17.2
Lonmin . . . . . . . . . . .1173.0 -27.0 1983.0 1103.0
New WorId Resourc .537.0 -39.0 1060.0 514.5
PetropavIovsk . . . . . .855.5 -28.5 1252.0 676.0
RandgoId Resource 6910.0-160.0 7070.0 4425.0
Rio Tinto . . . . . . . . .3510.0 -54.0 4712.0 3387.5
Vedanta Resources 1330.0 -32.0 2559.0 1225.0
Xstrata . . . . . . . . . . . .980.7 -6.4 1550.0 933.4
Inmarsat . . . . . . . . . . .476.6 6.9 724.5 389.7
Vodafone Group . . . .158.0 -4.0 181.9 155.1
Genesis Emerging . .460.0 -5.0 568.0 444.5
Afren . . . . . . . . . . . . . .108.0 4.3 171.2 92.5
BG Group . . . . . . . . .1242.0 -27.5 1564.5 1082.5
BP . . . . . . . . . . . . . . . .375.5 -2.5 509.0 363.2
Cairn Energy . . . . . . .312.5 -6.1 469.7 281.4
EnQuest . . . . . . . . . . . .98.3 -3.8 158.5 95.1
Essar Energy . . . . . .241.5 -9.5 589.5 235.1
ExiIIon Energy . . . . . .249.5 -6.6 469.7 190.0
Heritage OiI . . . . . . . .222.8 -8.1 486.0 190.0
JKX OiI & Gas . . . . . .181.8 0.3 335.1 160.0
Premier OiI . . . . . . . . .342.9 -1.1 535.0 310.0
RoyaI Dutch SheII . .1990.0 -27.5 2326.5 1842.5
RoyaI Dutch SheII . .2016.5 -29.5 2336.0 1792.0
SaIamander Energy .204.8 -7.6 317.6 201.6
Soco Internationa . . .359.4 -2.3 467.9 279.8
TuIIow OiI . . . . . . . . .1397.0 -16.0 1493.0 945.5
Amec . . . . . . . . . . . . .891.5 -17.5 1251.0 834.0
Hunting . . . . . . . . . . .640.5 -14.0 817.0 592.5
LampreII . . . . . . . . . . .268.0 -9.0 395.2 254.5
Petrofac Ltd. . . . . . .1321.0 -47.0 1685.0 1110.0
Wood Group (John) .542.5 -19.0 715.8 390.1
Burberry Group . . . .1258.0 -24.0 1600.0 894.5
PZ Cussons . . . . . . . .332.1 -13.8 409.0 320.5
Supergroup . . . . . . .1050.0 0.0 1820.0 818.5
AstraZeneca . . . . . .2738.5 -58.0 3385.0 2543.5
BTG . . . . . . . . . . . . . .260.7 -1.3 309.7 210.1
Genus . . . . . . . . . . . . .995.0 0.0 1046.0 765.0
GIaxoSmithKIine . . .1277.5 -18.5 1385.0 1127.5
Hikma Pharmaceuti .557.5 -20.5 900.0 557.0
Shire PIc . . . . . . . . . .1942.0 -35.0 2136.0 1405.0
CapitaI & Countie . . .166.1 -0.9 203.7 128.3
Daejan HoIdings . . .2403.0 -83.0 2954.0 2282.0
F&C CommerciaI Pr .100.0 -1.7 108.0 88.0
Grainger . . . . . . . . . . .100.5 -2.2 133.2 86.3
London & Stamford .120.3 -2.3 140.0 110.3
SaviIIs . . . . . . . . . . . . .292.5 3.7 427.1 288.2
St. Modwen Proper . .125.5 -3.8 196.2 123.5
UK CommerciaI Pro . .76.4 -0.3 85.5 70.4
Unite Group . . . . . . . .179.4 -1.6 229.8 152.9
Big YeIIow Group . . .261.1 -7.4 353.3 234.2
British Land Co . . . . .505.0 -8.5 629.5 464.0
CapitaI Shopping . . .317.7 -6.5 424.8 312.5
Derwent London . . .1549.0 -55.0 1880.0 1411.0
Great PortIand Es . . .350.8 -5.5 445.0 325.4
Hammerson . . . . . . . .382.0 -6.8 490.9 377.0
Hansteen HoIdings . . .78.1 0.6 89.5 64.7
Land Securities G . . .690.5 -22.0 885.0 620.5
SEGRO . . . . . . . . . . . .246.0 -4.7 331.3 232.4
Shaftesbury . . . . . . . .458.6 -9.8 539.0 426.3
Autonomy Corporat 2517.0 -1.0 2525.0 1271.0
Aveva Group . . . . . .1508.0 -33.0 1799.0 1385.0
Computacenter . . . . .407.8 17.8 490.0 286.4
Fidessa Group . . . . .1563.0 -21.0 2109.0 1409.0
Invensys . . . . . . . . . . .232.0 -3.0 364.3 221.7
Kofax . . . . . . . . . . . . .296.1 -13.2 535.0 253.0
Logica . . . . . . . . . . . . .81.8 -2.2 147.2 80.2
Micro Focus Inter . . .327.9 -1.6 426.2 239.4
Misys . . . . . . . . . . . . .269.7 -5.4 420.2 234.7
Sage Group . . . . . . . .248.4 -4.2 302.0 231.7
SDL . . . . . . . . . . . . . . .612.5 -3.5 711.5 554.5
TeIecity Group . . . . . .530.0 -13.5 572.5 430.0
Aggreko . . . . . . . . . .1817.0 -58.0 2034.0 1394.5
Ashtead Group . . . . .137.7 -2.7 207.9 94.4
Atkins (WS) . . . . . . . .532.0 -18.0 820.0 513.5
Babcock Internati . . .598.5 -13.0 733.0 513.5
Berendsen . . . . . . . . .460.0 -6.9 568.0 390.0
BunzI . . . . . . . . . . . . .762.5 -20.5 812.5 676.5
Capita Group . . . . . . .705.5 -14.5 794.5 635.5
CariIIion . . . . . . . . . . .321.8 -4.9 403.2 298.8
De La Rue . . . . . . . . .772.0 -3.0 853.5 549.5
EIectrocomponents .194.5 -5.5 294.9 190.0
Experian . . . . . . . . . . .686.0 -9.0 833.5 659.5
FiItrona PLC . . . . . . . .350.5 -10.5 385.5 227.5
G4S . . . . . . . . . . . . . . .264.0 0.0 291.0 237.7
Hays . . . . . . . . . . . . . . .70.9 -2.2 133.6 69.4
Homeserve . . . . . . . .476.5 -9.5 532.0 408.0
Howden Joinery Gr . . .99.2 -1.5 127.5 70.6
Intertek Group . . . . .1940.0 -53.0 2148.0 1715.0
MichaeI Page Inte . . .338.7 -8.9 567.0 334.2
Mitie Group . . . . . . . .218.0 -2.5 242.5 191.2
Premier FarneII . . . . .151.9 -1.8 308.8 149.8
Regus . . . . . . . . . . . . . .72.0 0.7 119.0 64.0
RentokiI InitiaI . . . . . . .72.9 -2.8 107.1 72.9
RPS Group . . . . . . . . .186.1 -3.2 253.0 179.5
Serco Group . . . . . . .499.2 -6.3 633.0 491.9
Shanks Group . . . . . .112.8 1.7 130.9 101.1
SIG . . . . . . . . . . . . . . . .96.6 -3.9 153.5 96.0
SThree . . . . . . . . . . . .223.5 -8.3 447.6 221.0
Travis Perkins . . . . . .722.0 -24.5 1127.0 706.5
WoIseIey . . . . . . . . .1547.0 -6.0 2261.0 1381.0
ARM HoIdings . . . . . .590.0 9.5 651.0 338.9
CSR . . . . . . . . . . . . . . .211.5 3.5 447.0 198.1
Imagination Techn . .362.3 -3.0 502.0 296.9
Pace . . . . . . . . . . . . . .102.2 -2.8 231.8 91.0
Spirent Communica .122.7 -0.2 160.3 116.0
British American . .2684.0 -45.5 2871.0 2282.5
ImperiaI Tobacco . .2033.0 -43.0 2231.0 1784.0
Avis Europe . . . . . . . .313.7 -0.1 314.2 184.0
Betfair Group . . . . . . .707.0 0.0 1550.0 567.0
Bwin.party Digita . . . .114.0 -3.3 297.9 100.6
CarnivaI . . . . . . . . . .1931.0 6.0 3153.0 1742.0
Compass Group . . . .537.5 -7.5 612.0 511.5
Domino's Pizza UK . .508.5 -11.5 586.0 377.0
easyJet . . . . . . . . . . . .307.7 -2.6 479.0 301.0
Enterprise Inns . . . . . .33.1 0.6 122.7 31.8
FirstGroup . . . . . . . . .340.8 -8.3 412.6 311.3
Go-Ahead Group . . .1401.0 -15.0 1598.0 1085.0
Greene King . . . . . . .435.5 -5.4 518.0 410.0
InterContinentaI . . . .994.0 -17.0 1435.0 955.0
InternationaI Con . . .148.1 -3.9 305.0 145.4
JD Wetherspoon . . . .392.2 -5.8 468.3 381.5
Ladbrokes . . . . . . . . .120.0 -4.7 155.3 119.7
Marston's . . . . . . . . . . .91.4 -1.6 117.1 87.1
MiIIennium& Copt . .399.3 -0.6 600.5 391.9
MitcheIIs & ButIe . . . .235.6 15.5 361.0 215.2
NationaI Express . . .221.1 -1.2 270.2 216.1
Rank Group . . . . . . . .126.0 -0.9 153.7 109.5
Restaurant Group . . .267.7 -1.6 335.0 254.9
Spirit Pub Compan . . .38.9 0.3 55.0 37.0
Stagecoach Group . .239.2 -4.4 268.5 180.4
Thomas Cook Group .33.8 -1.3 204.8 32.5
TUI TraveI . . . . . . . . . .137.8 -3.8 271.9 134.1
Whitbread . . . . . . . .1547.0 -27.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .221.3 -5.8 237.3 155.5
Abcam . . . . . . . . . . . .344.0 -7.3 460.0 307.0
AIbemarIe & Bond . .370.0 5.8 400.1 248.5
Amerisur Resource . .15.5 -1.3 29.0 11.5
Andor TechnoIogy . .565.0 -5.0 685.0 324.0
ArchipeIago Resou . . .77.0 0.0 79.0 32.3
ASOS . . . . . . . . . . . .1710.0 -48.0 2468.0 1067.0
AureIian OiI & Ga . . . .47.0 -1.8 92.0 42.5
Avanti Communicat .330.5 0.5 735.0 288.8
Avocet Mining . . . . . .274.8 -11.5 286.8 129.0
BIinkx . . . . . . . . . . . . .137.0 0.5 148.8 70.5
Borders & Souther . . .49.0 -1.0 93.0 44.8
BowLeven . . . . . . . . .131.3 -6.0 398.0 115.3
Brooks MacdonaId 1077.5 -34.5 1372.5 907.5
Conygar Investmen . .93.5 1.0 120.0 92.0
Cove Energy . . . . . . . .71.3 -1.8 112.8 59.5
Daisy Group . . . . . . . .111.0 0.0 127.0 88.0
EMIS Group . . . . . . . .543.5 11.8 580.0 318.0
Encore OiI . . . . . . . . . .50.8 -1.8 151.5 40.8
Faroe PetroIeum . . . .152.8 -4.0 218.3 133.0
GuIfsands PetroIe . . .170.0 10.5 401.5 142.5
GWPharmaceuticaI .104.0 3.0 130.0 83.0
Hamworthy . . . . . . . .530.5 -9.5 705.0 352.0
Hargreaves Servic . .885.0 -22.0 1076.0 620.0
HeaIthcare Locums . .84.6 0.0 84.6 84.6
Immunodiagnostic .1000.5 -9.5 1218.0 768.5
ImpeIIamGroup . . . .347.5 2.9 387.5 130.0
James HaIstead . . . . .429.0 1.6 495.0 318.8
KaIahari MineraIs . . .240.0 -1.5 301.0 142.0
London Mining . . . . .380.0 -2.3 436.5 283.0
Lupus CapitaI . . . . . . .90.5 -4.5 150.0 85.3
M. P. Evans Group . .396.0 0.0 500.5 371.0
Majestic Wine . . . . . .408.0 -12.0 510.0 314.0
May Gurney Integr . .243.0 0.0 295.0 177.0
Monitise . . . . . . . . . . . .33.5 -0.5 39.0 18.5
MuIberry Group . . . .1490.0 -2.0 1920.0 375.0
Nanoco Group . . . . . . .60.4 -1.1 115.8 57.5
NauticaI PetroIeu . . .264.3 -8.8 547.0 190.0
NichoIs . . . . . . . . . . . .522.0 -17.3 579.0 410.0
Numis Corporation . . .97.0 -2.9 142.5 91.9
Pan African Resou . . .13.3 -1.3 14.5 7.8
Patagonia GoId . . . . . .68.5 -1.5 70.0 19.5
Prezzo . . . . . . . . . . . . .59.6 -0.1 71.5 47.5
Pursuit Dynamics . . .196.8 -5.0 700.0 160.5
Rockhopper ExpIor .237.8 -0.8 510.0 141.0
RWS HoIdings . . . . . .430.0 10.0 479.8 258.5
Songbird Estates . . .121.5 0.5 160.3 110.3
VaIiant PetroIeum . . .447.0 -14.0 761.5 442.5
Young & Co's Brew . .652.5 0.3 712.0 525.0
MitcheIIs & ButIer . . .235.6 7.0
Charter Internatio . . .857.0 6.6
Man Group . . . . . . . . .227.1 5.0
Computacenter . . . . .407.8 4.6
Afren . . . . . . . . . . . . .108.0 4.2
MeIrose . . . . . . . . . . .289.2 3.3
Gem Diamonds Ltd. .216.0 2.9
JD Sports Fashion . .855.0 2.3
Enterprise Inns . . . . . .33.1 1.7
CSR . . . . . . . . . . . . . .211.5 1.7
FresniIIo . . . . . . . . . .1989.0 -7.5
New WorId Resource 537.0 -6.8
Premier Foods . . . . . . .11.4 -6.5
Morgan CrucibIe Co .250.9 -5.1
TaIvivaara Mining . . .290.2 -5.1
St James's PIace . . . .320.0 -5.0
InternationaI Pers . . .223.1 -5.0
CabIe & WireIess W . .31.1 -4.8
Laird . . . . . . . . . . . . . .138.1 -4.7
AmIin . . . . . . . . . . . . .283.5 -4.7
Risers FaIIers
MAIN CHANGES UK 350
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Tsy 3.250 11 . . . . .100.53 -0.14 103.2 100.5
Tsy 5.000 12 . . . .102.15 -0.05 106.4 102.1
Tsy 5.250 12 . . . .103.45 -0.02 107.8 103.4
Tsy 9.000 12 . . . .107.51 0.00 115.2 106.7
Tsy 4.500 13 . . . .105.84 -0.02 108.8 105.8
Tsy 2.500 13 . . . .284.39 -0.07 287.7 277.5
Tsy 8.000 13 . . . . .115.00 -0.02 120.7 115.0
Tsy 5.000 14 . . . . .112.64 0.09 114.1 109.2
Tsy 8.000 15 . . . .129.00 0.15 131.3 123.7
Tsy 7.750 15 . . . .102.30 -0.33 342.1 102.0
Tsy 4.750 15 . . . . .114.81 0.17 114.9 108.6
Tsy 4.000 16 . . . . .113.39 0.26 113.5 104.9
Tsy 2.500 16 . . . .340.40 0.14 340.9 310.2
Tsy 12.000 17 . . .125.20 0.00 185.9 124.8
Tsy 1.250 17 . . . . .114.55 0.28 115.0 106.7
Tsy 8.750 17 . . . .141.30 0.01 142.1 132.9
Tsy 5.000 18 . . . .121.05 0.38 121.2 109.7
Tsy 4.500 19 . . . . .118.49 0.43 118.7 105.4
Tsy 3.750 19 . . . . .112.92 0.53 113.1 99.4
Tsy 2.500 20 . . . .354.00 0.35 355.6 312.4
Tsy 4.750 20 . . . .120.68 0.52 120.9 106.6
Tsy 8.000 21 . . . .151.54 0.58 151.8 133.8
Tsy 4.000 22 . . . . .114.04 0.68 114.2 99.0
Tsy 1.875 22 . . . .123.19 0.52 123.4 111.3
Tsy 2.500 24 . . . .316.08 0.50 316.9 273.5
Tsy 5.000 25 . . . .124.57 0.79 124.8 107.4
Tsy 4.250 27 . . . . .114.78 0.81 115.0 97.9
Tsy 1.250 27 . . . . .118.53 0.51 118.9 104.6
Tsy 6.000 28 . . . . .139.11 0.79 139.4 119.5
Tsy 4.125 30 . . . .300.28 0.45 301.3 261.2
Tsy 4.750 30 . . . .121.15 0.82 121.5 103.0
Tsy 4.250 32 . . . . .113.62 0.87 113.9 96.0
Tsy 4.250 36 . . . . .112.63 0.89 113.0 95.0
Tsy 4.750 38 . . . .121.70 0.89 122.1 102.8
Tsy 4.500 42 . . . . .116.19 0.00 116.2 98.9
% %
Wealth Management | Markets
WWW./LEllFEEL.CC.L|
Ts&Cs: OfferappliestoAustinReedMadetoMeasureCloths. Notvalidinconjunctionwithanyotheroffer, discountorpromotion. Notvalidonlineorinoutlets.
Simply quote City AM ofer in your nearest Austin Reed store
Austin Reed are ofering City AM readers
100 off ALL Made to Measure Suits
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27
CITYA.M. 13 SEPTEMBER 2011
In association with
Zurich Insurance plc
Business Features
TECH SKILLS A
WORRY DESPITE
THE OPTIMISM
GEOFF WHITE
SENIOR MARKET UNDERWRITER,
TECHMEDIA, ZURICH INSURANCE
T
HE technology sector is under continual pressure to
adapt, develop and deliver with a high expectation for
innovation. The UK economy thrives in the technology
arena as we have a rich vein of creativity and entrepre-
neurialism, especially emanating from universities and other
further education facilities. Arguably the greatest invention
of the last 35 years came from an English computer scientist
and professor at MIT, Sir Timothy John Berners-Lee; his
invention being the World Wide Web.
Zurich recently released the second of our Hazard
Warning Reports, this time looking in-depth at the views of
the technology industry especially the risks associated
with data in the internet age, the opportunities for the
technology sector both in the UK and overseas, and the
future of this industry over the next decade.
Worryingly, more than half of Britains mid-size technolo-
gy companies feel they are at risk from losing skilled
employees a figure which, while it is concerning itself,
rises to 70 per cent among UK companies with a larger
annual turnover of 25-100m. Our research also reveals
that technology companies rank attracting staff with the
right skills as their greatest area of risk.
One key area of concern is Technology Evolution Risk
which underlines the reliance that many companies have on
each other in the sector for the latest technological
advances and stresses the importance of keeping abreast
of developments to ensure their business model is up to
date.
But the good news is that despite these challenges, more
than three quarters of them (77 per cent) say they feel
more optimistic about the future than they did last year.
Throughout the years we have seen many small technol-
ogy companies grow into successful and thriving organisa-
tions and its encouraging to see the renewed focus that the
government has put on the sector as it recognises the sig-
nificant benefits it can bring to our economy. Its essential
that both businesses and government work together to
overcome these issues in order to ensure British technology
companies are able to survive and grow in this fast moving
global technology market.
Amid a rapid technological evolution, these businesses
carry the hopes of generations to come, as the UK seeks to
stabilise and grow amid global economic uncertainty. Its
encouraging that technology companies remain optimistic
about the future, even though they clearly have some real
concerns, particularly, recruiting and retaining skilled
employees. Are you ready for the future?
For more information contact your broker or visit
www.zurich.co.uk/expertise. The Technology report can be
found at www.zurich.co.uk/technologyhazards
Healthcare technology
is ready for an upgrade
In the latest of a series examining the outlook for different sectors of
the UK economy, Philip Salter considers healthcare technology
T
HE UKs healthcare technolo-
gy companies are producing
some the worlds most inno-
vative devices, turning prof-
its and making the world a
healthier place. However, the UKs
healthcare system does them a dis-
service, restricting them from
punching even further above their
weight.
EXCITING PRODUCTS
With a market capitalisation of
$5.1bn (3.22bn), Smith and
Nephew stands head and shoulders
above its UK competitors. Its near-
est challengers are Abcam and
Axis-Shield, which are respectively
300m and 236m in size. But
there are some very exciting young
companies that could challenge in
the future.
Julian Hickman of Juno Capital
likes a couple of UK companies he
thinks are poised to be highly dis-
ruptive for their markets. The first
is Sky Medical. It has launched a
new product for the prevention of
deep vein thrombosis and
Hickman thinks this product is
far more effective than other cur-
rent devices. The second company
is Biotronics3D, which is the first
company to be able to provide
advanced medical imaging purely
in the cloud. He says this enables
real time collaboration between
different doctors in different loca-
tions using just a browser and the
internet.
Andrew Elder of Albion
Ventures, who practiced as a neuro-
surgeon for six years and is now a
venture capitalist, likes Dysis
Medical which is in the business
of imaging systems for the detec-
tion of cancerous and pre-cancer-
ous lesions he is invested in it and
believes it could reach a market
capitalisation of 300m. He also
likes the look of Touch Bionics, a
Scottish-based global leader in
advanced upper limb prosthetics,
and Aircraft Medical, which pro-
duces video laryngoscopes that
look like iPods. Polar Capitals
Daniel Mahony picks out Optos,
another Scottish-based company.
A NATIONAL DISSERVICE
It is common knowledge that
world demographics point to an
opportunity from rising demand
in healthcare. This predicted rising
tide should buoy up the ship of UK
healthcare technology. The emerg-
ing markets of Brazil, Russia, India
and China could open up con-
sumers and profits in the billions.
David Pinniger of the International
Biotechnology Trust says the West
is aging, while people in emerging
markets are increasingly willing
and able to pay for healthcare. He
also points out that Chinas one
child policy will mean that its pop-
ulation will age rapidly. Hickman
says: People are living longer and
many are carrying chronic illness-
es for longer.
Dominic Carter of Mastek adds
that the huge cost of todays ever
more sedentary lifestyle is leading
to conditions such as Type 2 dia-
betes and other long term condi-
tions. Carter says: there is a time
bomb waiting to explode.
However, increasing demand for
a good doesnt necessarily trans-
late into its increasing supply. The
monopolistic NHS and constant
regime and regulatory uncertainty
are not the ideal structures for
health technology to flourish.
Elder says the problem is that the
NHS is the last adopter of technolo-
gy because of its conservative
with a small c nature. Mahony
points to areas of healthcare domi-
nated by discretionary spending
dentistry, laser eye surgery and cos-
metic surgery where innovative
technology dominates. These offer
a glimpse of the potential benefits
for UK healthcare technology com-
panies as well as the UK popula-
tions health of radical supply
side reforms. A glance into the future Picture: REUTERS
The i-Lima bionic
hand from Touch
Bionics, a compact
Scottish company
T
HERES an old saying that if you
want to know if a mans well-
dressed, look down. Its absolutely
true: good shoes make an outfit and
bad ones stand out terribly, and thats
especially true of the City. So what should
you be looking for in a good pair of
English lace-ups?
First, if youre going to spend more than
100 on a pair of shoes, its really worth
investing a little knowledge. The tradition-
al heart of the industry, Northampton, is
still producing a lot of very good shoes. This
means that the shoe, with a plastic mold
inside it, is taken around a factory from
one Victorian machine to another, with the
leather being stretched, stitched and soled.
More expensive shoes involve more steps
like the bed laster, for instance, which pulls
the leather around the toe separately.
Cheaper shoes also use cheaper leather,
which will not polish or soften to your feet
as well, or corrected grain, which covers
up imperfections in the leather. The
cheapest of all use a plastic-coated leather
that doesnt take polish and cant recover
from scuffs thats why those cheap, high-
street ones with the turned-up toes dont
quite look leather.
Many English brands make great shoes
Barker, Loake, Crockett & Jones,
Churchs, Edward Green and John Lobb
are among the most famous brands. Value
for money extends to American brands,
such as Alden and Allen Edmonds, but less
so to Italian and French shoes where a
large part of what you pay for is design.
The problem is that men simply arent
spending enough; they dont see shoes as
a priority. But they should, says Euan
Denholm of Edward Green. Its always
worth spending as much as you can afford
on a good pair of shoes, since they will
reward the investment several times over.
If youre smartening up your wardrobe
and have 1,000 to spend, think about put-
ting two thirds of that on a suit and one
A well-made pair of Oxfords are
the making of a smart, business
like look, says Simon Crompton
Right, the recently-
opened Shoe Salon at
Harrods, dedicated to
the best mens
footwear.
Lifestyle | Fashion
OUT OF OFFICE
TIMOTHY BARBER
DEGAS AT THE ROYAL ACADEMY
The great French Impressionist artist (though
he rejected the term) is the latest Master to
receive a retrospective at the Royal Academy.
Opening this weekend, the exhibition focuses
on Degas most famous subject matter: ballet
dancers. In pastels, drawings and paintings,
Degas explored the capacity for movement
and expression of the body, as well as the
style and atmosphere of the ballet world in
late 19th century Paris. Until 11 Dec.
www.royalacademy.org.uk
POLIAKOFF RETURNS TO THE STAGE
Stephen Poliakoff is a writer and direc-
tor best known for his elegant, intellec-
tually-minded TV dramas. My City is his
first play in over a decade, making its
debut this week at the Almeida the-
atre, and examines the meeting
between an inspiring school teacher
and two of her former pupils.
Tracey Ullmann and David
Troughton star. Until 5 Nov.
www.almeida.co.uk
ADAM HILLS LIVE
The popular Australian
comedian Adam Hills is
set to appear at the
Soho Theatre perform-
ing an hour of sponta-
neous, ad-libbed stand
up. Hills is the consu-
mate comedy performer
and bringer of good
vibes. 19 Sept-1 Oct.
wwwsohotheatre.com
Left, Ballerinas en
pointe by Degas.
A mans
shoes are
as crucial
as his suit
third on a pair of shoes. The same goes if
you have 5,000 to spend get a bespoke
suit and a bespoke pair of shoes.
So what types of shoes should you be
buying to wear with your suit? The big two
are Derbys and Oxfords, both lace-ups but
differentiated by the fact that one has a V-
shaped split in the middle of the shoe
(Oxford) and the other laces up two sepa-
rate pieces of leather on either side of the
shoe (Derby). Then there are monk straps
(with the buckles) and slip-ons.
The Oxford, with its clean front and
often single piece of leather, is smarter
than a Derby. When you add holes
(brogueing) or a toecap to that Oxford, it
becomes less smart. So for the big meeting
wear your navy suit, white shirt and plain
black Oxfords. A more casual day in the
office can be met with dark brown Derbys
perhaps with that checked suit.
Suede is generally considered casual,
but it can also make a nice alternative to
calf [leather] with a suit. The change in tex-
ture stands out just the right amount. Just
make sure they are very nice suede shoes,
recommends George Glasgow of bespoke
shoemaker GJ Cleverley & Co.
Then all you have to do is look after your
shoes. Because whats the point in an
investment if you neglect it? Dont wear
the same shoes on consecutive days; put
wooden shoe trees in them at the end of
the day to support their shape; and polish
them every few weeks. Properly main-
tained, English leather shoes will reward
you more and for longer than anything
else in your wardrobe.
Simon Crompton is the writer of the mens tailor-
ing website, www.permanentstyle.co.uk
ULTIMATE IN EUROPEAN LUXURY
FOOTWEAR COMES TO LONDON
Word reaches City A.M. of the launch in
November of the first London outlet for the
French ultra-luxe shoe brand Corthay.
The supremely gifted shoemaker
Pierre Corthay, who used to run the
atelier of fellow French luxury shoe
specialist Berluti, will be opening a
boutique in Knightsbridge. Expect to
find bespoke, made-to-measure and
ready-to-wear creations of that
are the ultimate in Continental
elegance and chic.
www.corthay.fr
SHOE NEWS | FRENCH INSPIRATION
SHOES THAT ARE BUILT FOR
THE BEST BOARDROOMS
Each year shoe company John Lobb
Bootmaker releases a limited edi-
tion line to celebrate the feast day
of St Crispin, the patron saint of
cobblers. That might seem so much,
er, cobblers in itself, were it not for
the fact that these shoes are such
seriously desirable items. This years
Saint Crepin selection (the brand
is owned by French company
Hermes) is a classic capped-toe Oxford , the
quintessential City shoe. Theyll be available
from October 25. www.johnlobb.com
SHOE NEWS | JOHN LOBBS BEAUTIFUL OXFORDS
1.
Brows If your
eyes are the
windows to
your soul,
then your brows are
the curtains. This sea-
son eyebrows are big
and bold, which apart
from lending a more
masculine look, also
defines your eyes.
Blinc do a wonderful
Brow Mousse that not
only defines them
and builds body, but
holds their shape
wherever you want it
and doesnt adhere to
your skin.
2.
Hair Continuing along the mini-
malist theme we have seen a
r es ur -
g e nc e
of the good old
Ponytail: cue
communal sigh
of relief, finally
a do we can do.
For the office,
its all about
keeping it sleek
and high: a boar
bristle brush is
key for taming
the strays. This also works well with the
conspicuous brow and simple, 60s eyeliner
in either black or metallics and a strong
red lip to carry the look into the evening.
3.
L a s h e s .
Mascara has
gone into
over- dri ve.
Forget everything
youve been told
about holding back
on the lower lashes,
and spider them up
This seasons beauty looks lend
themselves well to the office. Cult
Beauty director Alexa Inge tells
Zoe Strimpel how to get it right
Right: Marie
Antoinettes style,
with her rouged
cheeks and swept
back hair has inspired
Marc Jacob and Nars,
whose Autumn 2011
catwalk looks have
defined how were
applying makeup
today.
MAZDA MX-5
ROADSTER COUPE
IN TOMORROWS
LIFESTYLE SECTION
Minimalism meets Frances
Ancien Regime this autumn
Episode 27: What to wear for the awards dinner?
H
OW about this one? asks Noel,
hauling a capacious green item
into view. It resembles a hefty
tarpaulin from my boy scout
days.
Emma looks at me. Im idly finger-
ing a rail of backless, ivory silk dresses.
Well? she asks.
Darling, I dont know why you want
to come. I mean, Id love you to come.
Ordinarily. But not so close to your due
date.
But thats exactly why David.
Theyre going to be fine now and it
might be our last chance to go out.
And I want to see you win your prize.
Im nominated for City A.M.s
International Corporate Financier of
the Year. Running through diary dates
with Emma a couple of weeks ago I
made the schoolboy error of mention-
ing the nomination. Then Gina, my
thoroughly malevolent PA, revealed to
Emma on the telephone under no
pressure whatsoever from what I can
tell that Sir Roderick was sponsoring
a couple of tables and would be
attending himself. Nudge, nudge
So here we are. Looking for a dress.
Emma also knows that Caroline
Davison is nominated and that Juliette,
along with the rest of my team, will be
attending. After all, the nomination
recognises the hard work of all yes,
ok, I admit it I have rehearsed an
acceptance speech.
Im not going to win, I insist. And
what if you go into labour during the
dinner?
Its going to happen sometime,
says Emma. Youd either go home
with the prize or with the twins. Isnt
that what you call a hedge? So, the
green tarpaulin? Very practical if you
have to deliver twins in a crowded
hotel dining room.
No, I say.
An hour later we leave the shop
with an elegant, utterly ravishing, char-
coal, silk Empire line dress. It must,
indeed, be love.
CITY DAD
FIT IN
THE CITY
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
Get inspired by
Bloombergs
City relay race
T
THIS Thursday, the fifth annual
Bloomberg Square Mile Relay is hap-
pening. This race is a little bit unique in
that you get to race against rival busi-
nesses, in relay, right on your doorstep.
I love the combination of the competitive
edge with the fitness bit with this event. And
the fact that the winners get to donate their
winnings to the charity of their choice doesnt
hurt either. But for those of you whove yet to
discover running or racing, let me try and win
you over Ive lost count over the last decade
of the number of times Ive heard people say,
I hate running. I cant stand it, when theyve
never given it a chance. I understand this to a
certain extent Im no Paula myself but I
do believe in giving easy, cheap forms of exer-
cise which tick multiple boxes a go. Its easy
to get waylaid with cosmetic goals but the
problem with cosmetic goals is that the nov-
elty wears off pretty quick. Even if you man-
age to stay the course and achieve them,
youre still left with that now what?
predicament at the finish line. Not so when
you race. There are always new challenges to
be had (think fell running, marathons, ultra-
marathons, team events...and so on).
And what about the physical benefits?
Lets list the biggies:
1. Runnings a weight bearing activity (when
your bones are working against gravity to
support your body weight) so, contrary to
popular opinion, it doesnt actually grind
away your joints. In fact, your bones respond
to this pressure by adding osteoblasts (bone-
forming cells) which will help to slow down
the natural loss of bone density in adults
that happens with age
2. If were talking waistlines, youd have to
go some to beat runnings calorie-burn. Not
to mention the fact that if you interval-train
or include random speedwork (running fast
for two lampposts; walking for one) in your
session, youll ramp up your metabolic rate
no end.
3. Lets not forget the most important mus-
cle of all, your heart. Running will raise your
heart rate, giving your heart an all-important
workout and improving your circulation, tak-
ing you one step further away from nasties
like heart attack, high blood pressure, stroke
and diabetes.
www.squaremilesport.com
with the most volumising brand you can
find. Of course, dont let them dry
between layers for this look we love the
DuWop Lash Venom Mascara. Another tip
to avoid clumping is to give them a brush
with a cleaned, old mascara wand from
your previous tube.
4.
Che e ks
The only
area of
beaut y
that has kept its
playful edge is
blusher: try
brushing it a lit-
tle lower and covering more of your cheek.
With all this minimalism around, try
ramping up the pigment a little. Its not
called the flush of youth for nothing!
5.
S c e n t
F r o m
t h e
point of
view of fra-
grance, the flirty
feminine florals
of the last few
seasons are out
in favour of more
woody, musky,
oriental scents,
more Dietrich
than Diaz. If you
are unsure in this
arena, Molecule
01 is a great one to start with as it actually
works with your individual pheromones.
Or the signature scent of the Uber-trendy
Hotel De Costes in Paris.
HEAD SOMMELIER AND MANAGER OF
LUTYENS RESTAURANT
ANDREW CONNOR
QUAFFERS CORNER
I
TS Rugby World Cup time so lets cast an eye
over the state of play in host country New
Zealand also my home nation. Im confident
in predicting that the winning country will be
a wine producer but I wont tempt fate by going
any further.
Its been a tough couple of years for Kiwi
wine-makers. The global economic crisis and
over-production led to some deep discounting of
Marlborough Sauvignon Blanc in the UK and,
inevitably, wines are now emerging to target the
lower price point. Production is becoming
polarised between those pursuing an ambitious,
quality agenda (often with wild ferments and
judicious oak ageing; for this try Seresin
Marama or Dog Point Section 94) and dull,
increasingly sweet, commercial styles.
A white grape with loads of potential in New
Zealand is Riesling. At this stage, its really hitting
the mark in Waipara (I love Pegasus Bay and
their second label Main Divide) and the future
looks very bright indeed.
On the red front, the Pinot Noir bandwagon
has wobbled with Central Otago producing too
many green examples (though they can be aston-
ishing as Block 3 & 5 from Felton Road attest)
and the Marlborough regions efforts often lack-
ing fruit. Id look to Martinborough for an
intense, savoury Pinot consider Martinborough
Vineyards or, oh so consistent, Ata Rangi.
The best examples of NZ Shiraz (syrah) are
steering a middle course between the savoury
complexity of the Northern Rhne and the big
concentration of Australia. Ive been most excit-
ed in recent years by fantastic wines in Hawkes
Bay (Craggy Range Le Sol, Te Mata Bullnose,
Brookfields Hillside) and Waiheke Island(Man
OWar Dreadnought).
Itd be great to drink a New Zealand wine to
toast the victory of the All Bl... no, dont say it!
Lifestyle | Restaurant Review
Thirty Six
Dukes Hotel, St Jamess Place, SW1A 1NY
020 7491 4840 www.dukeshotel.com
FOOD hhhhi
SERVICE hhhhh
ATMOSPHERE hhiii
Cost per person without wine: 60
D
UKES Hotel, which lies in one of
those impossibly cute courtyards off
St Jamess street, has for aeons been
famous for one thing: martinis. Its
bar, a cosy nest of nooks, crannies, corners
and alcoves, is the kind of male-centric
place which allows you to pretend youre a
member of a gents club, even when the
guardians of Brooks and Boodles wouldnt
give you a second dismissive glance.
Its presided over by a diminutive, snowy-
haired Italian called Alessandro, who Im
told is to martini making what
Michelangelo was to ceiling decoration.
Since all martinis taste like turpentine to
me and Im afraid even Alessandros
exquisitely prepared, thyme-infused cre-
ation put me into a cross-eyed wince Im
not the person to judge. My martini-loving
companions assured me his reputation is
fully justified though.
However, hes no longer the only
alchemist of ingredients in the hotel.
The Dukes basement, a warren of meet-
ing rooms with a restaurant Im not sure
anyone born since 1955 was previously
aware of, is being upgraded.
One of the rooms is now a champagne
lounge, where you can sit and drink bubbly
cocktails amid a rococo swirl of pink, green
and gold furnishings its the feminine yin
to the cocktail bars yang.
And in the restaurant a chap called Nigel
Mendham has been installed as chef. Look
out, Alessandro young Nige picked up a
Michelin star last year for his work at the
tiny Samling hotel in the Lake District (part
of the bust hotel group Von Essen). Now
hes come to make it amid the bright lights
of the big city. If he can make it here
POLITE SPACE
Im sure he can, but the room isnt doing
him too many favours. Its a dull, ho-hum,
awfully polite space with all the romantic
intimacy of a conference centre. Genteel lit-
tle pictures on the walls, orange-pink
chairs, old-fashioned silver platters, not a
lot else its a space that lacks spice. It
needs some big artworks, flowers, foliage,
charm, pizzazz, something a flickering tea-
light on each table doesnt cut it.
Dukes: its no longer just for martinis
AVENUE
A huge, bright place with tables as far as the eye can
see you can tell this used to be a Conran gaff. The
Finnish chef does pretty decent things with classic,
ultra-fresh British ingredients. 7-9 St Jamess St, SW1A
1EE. www.avenue-restaurant.co.uk
WHEELERS OF ST JAMESS
A darkly sumptuous place with some rather rude S&M
style photos on the walls that may not impress your
mother. The seafood dishes, and the fact of Marco Pierre
Whites ownership, may win her round. 72-73 St Jamess
Street, SW1A 1PH. www.wheelersrestaurant.org
LORANGER
Garlanded in stars and glowing with romantic atmos-
phere, this little place down the bottom of St Jamess
street is one of the best French restaurants in London.
The Provencale food is, guess what, swoonsome. 5 St
Jamess St, SW1A 1EF. www.atozrestaurants.com
Anyway, theres time for all that it only
opened last week, and the star of the show
is Mendhams cooking. And so to the
menu, which is whoppingly expensive.
Theres no a la carte option you can either
go for the eight course, 95 tasting menu
(150 with matched wines), or a set menu
thats 49 for two courses or 60 for three.
It keeps fuss to a blessed minimum
there are no adjectives, prepositions, pan
frieds or slow roasteds just prime ingredi-
ents. Scallops, cauliflower, smoked eel, red
sorrel, for instance, or brill, rib of beef,
watercress, native oysters.
The latter surfnturf oddity, incidentally,
gives a clue to Mendhams cooking style,
which is of the deconstructive, dab-of-foam-
here, swish-of-jus-there variety.
The minimalist descriptions make the
arrival of each dish a bit of a surprise,
though I suspect stoic St Jamess tradition-
alists may splutter when their lemon sole
turns out to be a pair of crisply caramelised
fillets, rather than an ovoid fish in a pool of
brown butter. However my guest, who
chose the dish over the aforementioned
brill and beef affair, spluttered more at the
fishs lack of discernible taste. He swooned
over the langoustine tortellini accompany-
ing it though bits of prawn cased in the
lightest, most translucent pasta, and each
wearing a hat of fishy white foam.
Before that, there were starters. I had
some delectable scallops huge things,
beautifully browned on the outside but
with a texture as light as cotton wool that
sat alongside sugar lump-sized cubes of
deeply smoked eel. My friend had the soft-
est pork cheek served with a Waldorf salad
that was like the refreshing, distilled
essence of Basil Fawtys culinary nemesis: a
quenelle of celery sorbet, surrounded by
tiny bits of caramelised apple and spiced
walnuts. It was perfectly lovely.
While my pal struggled with his lemon
sole main, I had some spot-on venison red
slithers of rosy rich meat accompanied by
spatzle noodles (a kind of itty-bitty egg noo-
dle the Germans are fond of) cooked with
bacon. Alongside was a whispy fondant of
butternut squash, upon which sat a little,
foam-topped savoy cabbage leaf in the
shape of a shower cap. It contained a magi-
cal veal shank melange Mendhams take
on ossobucco, and a delight.
INTRIGUE, IMAGINATION
After that, my trio of apple and bramble
crumble, brulee and sorbet was fine, partic-
ularly the subtle brulee, while my guest
made appreciative noises over his cheese
selection.
Mendham can certainly cook. His style
isnt revolutionary, but it offers intrigue
and imagination. Most importantly, he
knows all about flavour and texture combi-
nations, and hell try out interesting things
with them.
The restaurant, by the way, is called
Thirty Six, which could be confusing when
Caprice Holdings opens its new Grosvenor
Square place, 34, later this year. But
Mendham may well have got himself estab-
lished by then, and hopefully the powers
that be will have thought a little more
about the room.
THREE OTHER ST JAMESS RESTAURANTS
TIMOTHY BARBER
Above, Thirty Six is
the relaunched
restaurant at Dukes
hotel.
The famous St Jamess
hotel has brought in
an acclaimed chef to
revamp its restaurant
WORDS BY
TIMOTHY BARBER
Rugby and wine:
NZs state of play
T
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THE BODY FARM
BBC1, 9PM
New series. Tara FitzGerald reprises
her Waking the Dead role in this
forensic crime drama. With Keith Allen
and Mark Bazeley.
71 DEGREES NORTH
ITV1, 9PM
New series. Paddy McGuinness and
Charlotte Jackson take over as hosts
for a second run of the challenge set in
Arctic conditions.
SHAMELESS
CHANNEL4, 10PM
Jackson goes berserk when he sees
Letitia kissing Dee Davies, and Frank
drunkenly stumbles onto a minibus
before waking up in a synagogue.
BBC1
SKY SPORTS 1
7pmSky Sports News at Seven
7.30pmSoccer Special 10.30pm
The Match Fixers 11pmRevista
De La Liga 12amFootballs
Greatest 12.30amUEFA
Champions League Goals 1.30am
Football Asia 2amRevista De La
Liga 3amUEFA Champions
League Goals 4amFootballs
Greatest 4.30amFootball Asia
5am-6amRevista De La Liga
SKY SPORTS 2
7pmLive UEFA Champions
League 10pmUEFA Champions
League Goals 11pmICC Cricketer
of the Year Awards 12amFIA F2
Championship 1amCycling
1.30amCycle Sports World 2am
ICC Cricketer of the Year Awards
3amFIA F2 Championship 4am
Cycling 4.30am-5amCycle
Sports World
SKY SPORTS 3
7pmLadies European Tour Golf
8pmInternational Bowls 10pm
Golfing World 11pmLadies
European Tour Golf 12am-2am
International Bowls
BRITISH EUROSPORT
7pmTriathlon 7.30pmMotoGP
9.30pmBritish Superbikes
10.30pmGT Racing 10.45pm
Intercontinental Rally Challenge
11.15pmWorld Touring Car
Championship 12.05am-12.40am
Inside Racing
ESPN
7pmNFL 11pmEredivisie Review
Show12amLive Major League
Baseball 3amESPN Press Pass
3.30amRussian Premier League
Review4amBundesliga Review
Show5.15amESPN Kicks: Serie
A 5.30am-6amPlanet Speed
SKY LIVING
7pmCriminal Minds 8pmBritain
& Irelands Next Top Model 9pm
Pushy & Proud: Junk Food Mums
10pmCriminal Minds 11pmJerry
Bruckheimers Chase 12amCSI:
Crime Scene Investigation
1.50amDating in the Dark
2.40amMaury 3.30amNothing
to Declare 4.20amCharmed
5.10am-6amJerry Springer
BBC THREE
7pmTotal Wipeout 8pmYoung,
Dumb and Living Off Mum9pm
Dont Tell the Bride 10pm
EastEnders 10.30pmWilfred
10.50pmFamily Guy 11.35pm
Dont Tell the Bride 12.35am
Young, Dumb and Living Off Mum
1.35amWilfred 1.55amBritains
Youngest Undertaker 2.55am
Comedy @ The Fringe 3.55am
Total Wipeout 4.55am-5.25am
The Real Hustle: New Recruits
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmDavid
Blaine: Street Magic 9pm
Smallville 10pmThe Cleveland
Show11pmShameless 12.05am
The Big Bang Theory 1.05am
Scrubs 1.55amHow I Met Your
Mother 2.20amShameless
3.15amReaper 3.55amGlee
4.40am-6amSwitched
HISTORY
7pmTerry Jones Great Map
Mystery 7.30pmHighlands 8pm
American Pickers 9pm9/11: The
Days After 11pmChasing
Mummies 12amMud Men 1am
Only in America 2amMega
Movers 3amTerry Jones Great
Map Mystery 3.30amHighlands
4amPawn Stars 4.30am
Storage Wars 5am-6amAncient
Discoveries
DISCOVERY
7pmMythbusters 9pmMan,
Woman, Wild 10pmDeadliest
Catch 11pmIce Pilots 12amBear
Grylls 1amMan, Woman, Wild
2amDeadliest Catch 3.50am
Mutant Planet 4.40amInvisible
Worlds 5.30am-6amDestroyed
in Seconds
DISCOVERY HOME &
HEALTH
7pmPortland Babies 8pm19
Kids and Counting 9pmLast
Chance Surgery 10pmThe Boy
with Bloody Tears 11pmHospital
Sydney 12amLast Chance
Surgery 1amThe Boy with
Bloody Tears 2amHospital
Sydney 3am19 Kids and
Counting 4amA Baby Story
5am-6amBaby Days
SKY1
8pmShowboaters 9pmInside
Gatwick 10pmFILMOut for
Justice 1991. 11.45pmBig
Trouble in Thailand 1.40amDom
Jolys Happy Hour 2.35am
Emergency with Angela Griffin
3.30amLaw & Order 4.20amIts
Me or the Dog 5.10am-6am
Beauty School
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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&
C
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TVPICK
6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders; BBC News
8pmHolby City
9pmCHOICE The Body Farm
10pmBBC News
10.25pmRegional News;
National Lottery Update
10.35pmThe Bomb Squad
11.35pmMy Boyfriend the
War Hero; Weatherview
12.40amSign Zone: Harrys Arctic
Heroes 1.40amSign Zone: Cant
Take It with You 2.40amSign
Zone: Antiques Road Trip
3.25am-6amBBC News
6pmEggheads
6.30pmReel History of Britain:
7pmDragons Den
8pmThe Great British Bake
Off: The remaining bakers test
their pie-making skills.
9pmHairy Bikers Meals on
Wheels
10pmNever Mind the
Buzzcocks: Tim Westwood
hosts the music quiz.
10.30pmNewsnight; Weather
11.20pmFILMTootsie:
Cross-dressing comedy,
starring Dustin Hoffman. 1982.
1.10amBBC News 3.25am-6am
Close
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmMayday Mayday
8pmMissing Millions
9pmCHOICE 71 Degrees
North: New series. Celebrity
challenge set in Arctic
conditions.
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMLand of the
Dead: 2005.
12.15amThe Zone; ITV News
Headlines
2.20amHeist 3.10am-5.35amLive
Rugby World Cup
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmInside Natures Giants
9pmSeven Dwarves
10pmCHOICE Shameless 11.05pm
True Blood 12.10amPokers Million
Dollar Girl 1.10amSailing 1.35am
KOTV Boxing Weekly 2am
European Wheelchair Fencing
Championships 2011 2.30am
Freesports on 4 2.55amThe Grid
3.20amBeach Volleyball 4.15am
British Formula 3 International
Series 4.40amGrudge Match
4.50amCookery School
5.45am-6.10amYo Gabba Gabba!
6pmHome and Away
6.25pmOK! TV
7pm5 News at 7
7.30pmChinese Food in
Minutes
8pmMysteries of the Vampire
Skeletons: Revealed; 5 News
at 9
9pmCSI: Miami
10pmBig Brother 11pmCSI:
Crime Scene Investigation
11.55pmCSI: NY 12.45am
Forensic Files 1.15amSuperCasino
3.50amChinese Food in Minutes
4.05amHouseBusters 4.35am
HouseBusters 4.55amRough Guide
to Islands 5.10amWildlife SOS
5.35am-6amHouse Doctor
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29
16
5
28
10
13
15
21
3
6
10
Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Collection of cakes,
for instance (5)
3 Horde (5)
6 Malicious (5)
7 Coral reef (5)
10 Lotteries in which the
prizes consist of the
monies paid by the
participants (11)
13 Ill-fated (4-7)
15 Church passage (5)
18 Uncertainty (5)
19 Musical half-note (5)
20 Cold dessert often
served at childrens
parties (5)
DOWN
1 Fillip, incentive (5)
2 Large and important
church (9)
3 Large body of
salt water (3)
4 Fuss (3)
5 Boys, men (5)
8 Change the order or
arrangement of (9)
9 Seize and take control
without authority (5)
11 Drenched with water (3)
12 Stretch (3)
13 Cramp (5)
14 Short simple song (5)
16 Ofence (3)
17 Deciduous tree (3)
T
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S
N R
D
T
Y
4

4

4

C O M E T J U L E P
A I H E I I
B L O O S E E N D S
E N D U S E R E T
R R E A S S U R E
D L P
M E R M A I D S G
O Y G O R I L L A
T E R M I N A T E R
E O L F A B
L A T H E T A N G O
7 2 1 6 1 8 3
9 5 2 6 8 7 3 1
1 3 2 4 3 7 2
2 3 8 7 6 4 9 5
8 6 9 9 1 2
9 4 7 8 7 6 9 8
4 2 1 1 4 3
1 2 5 3 4 7 8 1
5 9 8 5 9 8 7
3 7 5 3 8 7 6 9
6 8 1 2 2 1 8
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
CARPENTRY
Lifestyle | TV&Games
ARSENAL manager Arsene Wenger
believes his side has been placed in
the toughest Champions League
group he has ever encountered.
Following their tense two-legged
victory over Udinese in the final qual-
ifying round, the Gunners continue
their European campaign against
German champions Borussia
Dortmund in the atmospheric Signal
Iduna Park, which is expected to
house close to 70,000 home fans
tonight.
Arsenal will also encounter hostile
atmospheres when they travel to
Marseille and Olympiacos later in the
group and Wenger knows a fast start
is essential if his side are to
qualify for the knockout
stages.
Especially because Pot Four
gave us Dortmund, said
Wenger. Thats why it is very dif-
ficult Marseille, Dortmund and
Olympiacos.
Sometimes you discover the
real difficulty when you are in it
and when we play the games.
Its a good opportunity for us
to get positive vibes, and we
need a bit of that.
Every team, no mat-
ter how good they are,
needs confidence, and I
believe my team needs
that at the moment.
It would create a cer-
tainty that we have a good
chance to go through. For us
to get a positive result tomor-
row night would be a big lift.
Arsenals preparations
have been hit by the two-
match touchline ban
Wenger incurred after being
charged by Uefa following the
first leg of the play-off against
Udinese when defied an exist-
ing ban.
But Wenger is sure his
absence from the techni-
cal area wont have a
detrimental impact on
the performance of
his team.
Overall, there is
no difference until
we arrive at the
stadium, he said.
Its not ideal in
the first game, espe-
cially because I dont
understand what the
rules are.
Wenger will be with-
out midfielder Aaron
Ramsey, who has picked
up an ankle injury, but
Alex Song and Gervinho
will both return from
their domestic suspensions.
Wenger primed for toughest
of European assignments
Sport 32 CITYA.M. 13 SEPTEMBER 2011
SPORT | IN BRIEF
Trott and Cook land awards
CRICKET: Jonathan Trott pipped fellow
Ashes-winner Alastair Cook to the Sir
Garfield Sobers Trophy Award for the
International Cricket Councils Cricketer
of the Year. Trott, along with Cook, was
the bedrock of Englands victory in
Australia last winter with 445 runs bat-
ting at No3. Cook, who made 766 runs
in Australia, won the Test Cricketer of
the Year award ahead of team-mates
Trott and James Anderson, as well as
South Africas Jacques Kallis.
Dawson could miss two months
FOOTBALL: Tottenham defender
Michael Dawson is set to be sidelined
for at least two months due to an
Achilles injury. The England international
picked up the problem in training and
played no part in Spurs 2-0 victory
away to Wolves on Saturday. William
Gallas and Vedran Corluka also missed
the clash with Wolves due to injury,
although Ledley King made a welcome
return to partner Younes Kaboul.
Hamilton focused on next year
FORMULA ONE: McLaren driver Lewis
Hamilton says he has already started to
turn his attention towards next years
Formula One campaign. The Briton fin-
ished fourth in Sundays Italian Grand
Prix behind winner Sebastian Vettel, and
as a result finds himself 126 points
adrift of the defending world champion
with six races left to run. Asked for his
target for the remainder of the season,
Hamilton said: To finish the rest of the
races, and also work hard on trying to
make sure next years car is quick.
Jacquelin replaces Quiros
GOLF: Frenchman Raphael Jacquelin has
replaced Alvaro Quiros for this weeks
Vivendi Seve Trophy at St. Nom-La-
Breteche in Paris. Quiros is out of the
Continental Europe team to face Britain
and Ireland because of a wrist injury.
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email sport@cityam.com
Wright-Phillips was one of five Rangers debutants last night Picture: ACTION IMAGES
QPR manager Neil Warnock heralded
the start of a new era after his over-
hauled side outclassed Newcastle but
failed to crown their dominance with
a winning goal.
Controversial recent signing Joey
Barton captained Rangers on his
debut and Shaun Wright-Phillips stole
the show with a dazzling display.
His and Adel Taarabts trickery
deserved better finishing than that
provided by the wasteful Jay
Bothroyd, but Warnock was delighted
with the improvement nonetheless.
This is the first game of our season
for me, he said. I couldnt have asked
any more. You dont normally domi-
nate for 90 mins in the Premier
League and we werent far off that
tonight. I think we can go anywhere
home and away and try and win the
game and thats a step in the right
direction.
An improbable stalemate lifts QPR
to 11th in the top flight, while
Newcastle climb to a heady fourth.
Warnock handed debuts to five
signings from last months deadline-
busting trolley-dash, including
Barton, given him the armband
against the team who discarded him.
But the midfielder was quickly
overshadowed by Wright-Phillips and
Taarabt, who created chance after
chance in a first half of near-total QPR
dominance only for Bothroyd to
repeatedly fail to finish.
First Bothroyd volleyed over, next
he was unable to meet a teasing deliv-
ery across the six-yard box, and finally
he got the ball caught under his feet
from the former Manchester City
stars cut-back.
No wonder, then, that Wright-
Phillips had a go himself next time,
beating Fabricio Coloccini to the ball
and chipping Tim Krul beautifully.
But this time Steven Taylor denied
him under the crossbar.
Rangers looked certain to score and
after the break Shaun Derry headed
down and inches wide from a corner.
Wright-Phillips almost capped a
fine debut with an exquisite winning
goal with seven minutes left but, after
slaloming past three defenders he
swerved a shot narrowly wide.
New signings
give Warnock
cause for hope
BY FRANK DALLERES AT LOFTUS ROAD
FOOTBALL
0
0
QPR
NEWCASTLE
CASTLEUNITE
KNOW YOUR ENEMY |
BORUSSIA DORTMUND
FORM
The Bundesliga champions have had
a mixed start to the new campaign,
winning two, losing two and drawing
one. They come into this game hav-
ing lost at home for the first time in
more than a year at the weekend,
when a Dortmund side missing sus-
pended star Mario Gotze went down
2-1 to promoted Hertha Berlin.
MANAGER
Jurgen Klopp (inset) has dragged
Borussia out of the doldrums and
back to the top of
German football in
his three years at
the club with a
youthful squad
that Arsene
Wenger would
be proud of.
STAR MAN
Wonderkid Gotze, 19, has already
netted twice in nine international
appearances and shares the distinc-
tion of being the joint-first player
born in a unified Germany to repre-
sent the national team. Gotze may
sound familiar to Gunners fans
Wenger tried to buy the playmaker
before last months transfer deadline.
Fernandes AirAsia
signs sponsor deal
QPR have filled their vacancy for a
shirt sponsor by signing a two-year
deal with Air Asia and Malaysia
Airlines. AirAsia was founded by Tony
Fernandes, who completed a takeover
of Rangers just weeks ago, and last
month agreed an alliance with
Malaysia Airlines, the national flag-
carrier and a long-time rival. Malaysia
Airlines appears on QPRs home shirt
it was debuted last night and AirAsia
on away jerseys.
BY JAMES GOLDMAN
FOOTBALL
BORUSSIA DORTMUND
ARSENAL
Sport
KNOW YOUR ENEMY
| BAYER LEVERKUSEN
FORM
Last-years runners-up, Bayer cur-
rently sit fourth in the Bundesliga,
having recovered from an opening-
day defeat to post three wins and a
draw. In their last outing they
thrashed Augsburg 4-1 a match
that took place on Friday, meaning
they will have enjoyed an extra days
rest to Chelsea.
MANAGER
Robin Dutt swapped Freiburg for
Bayer over the summer and has had
a hard act to follow,
after Jupp
Heynckes upped
sticks and left
Leverkusen for
the bright lights
of Bayern
Munich, but the
half-Indian Dutt has
made a reasonable start.
STAR MAN
Former Germany captain and
Chelsea midfielder Michael Ballack
(above) is the biggest name in the
Bayer line-up, although at 34 years
old is no longer assured of a starting
place. Germany striker Stefan
Kiessling is a threat up front, as is
Swiss youngster Eren Derdiyok.
MISFIRING record signing
Fernando Torres Chelsea future
has been plunged into doubt after
the club launched an investigation
into an interview in which he
appeared to criticise his team-
mates slow play.
Blues manager Andre Villas-Boas
has vowed to quiz 50m striker
Torres over his alleged remarks,
which appeared on the players
own website and included the
alleged assertion that Chelsea have
an older player, who plays very
slow, who has a lot of possession.
The controversy comes as Torres
aims to win back his place in the
team for tonights Champions
League opening fixture against last
seasons German runners-up Bayer
Leverkusen at Stamford Bridge.
We are going in-depth to regain
the tape of that interview. Well see
if things play exactly as they are in
that interview, said Villas-Boas.
Torres is likely to escape a fine as
it is understood the interview,
which originally appeared on the
website of the Spanish Primera
Liga, was authorised by the club.
And Villas-Boas suggested he
would solve any problem through
dialogue rather than seek to
impose sanctions on a player
already experiencing difficulties in
west London, if the quotes proved
accurate. Wed just talk. If it was
unauthorised, Id fine him of
course. Anyhow, its one players
perspective. I dont think its a per-
spective that the manager shares.
I dont have to share my players
ideas sometimes. I think we have
competence, apart from the age
problem, which for me is not a
problem. Maybe we just have to
speak and he has to see our view as
well.
Villas-Boas refused to let on
whether Torres might be recalled
for this evenings match the man-
agers first in Europes premier
club competition having dropped
him at Sunderland on Saturday.
The Spain forward has scored
just once in 21 appearances since
his British record move from
Liverpool in January and now finds
himself out of favour with his
national team too.
Strike rival Didier Drogba is
unavailable tonight following his
concussion last month, which
could open the door for Torres, but
he also faces competition from
youngster Daniel Sturridge, who
scored at the weekend and has
caught the eye of Villas-Boas.
Drogba could return on Sunday,
when Chelsea travel to Manchester
United for an early clash of two of
the Premier League title favourites.
VIllas-Boas added: You will see
some changes [today], and then of
course we will have to address the
rest of the four days after to make
as wise a decision as possible for
Old Trafford. Didier is away, he did
some damage to his teeth when he
fell to the ground and we decided
to give him some days off.
Chelsea boss to quiz Torres
BY FRANK DALLERES
FOOTBALL
CHELSEA
BAYER LEVERKUSEN
ENGLAND all-rounder Stuart Broad
is unlikely to play for his country
again this year after a scan yester-
day revealed he has torn a muscle
in his shoulder.
Broad will miss the last match of
the one-day series against India and
the return tour next month, which
compromises five ODI fixtures, as
well as the chance to skipper the
Twenty20 side in the two fixtures
against the West Indies next week.
The Nottinghamshire star suf-
fered a sudden pain in his right
arm almost at the point of delivery
in the last over of Indias innings
during the tied ODI match at Lords
on Sunday.
England will already be without
batsman Eoin Morgan, who is to
undergo an operation on his
injured shoulder, and will now
have to make do without one of
their leading strike bowlers.
Broad (inset), 25, also missed the
culmination of both Englands
Ashes and World Cup campaigns
with an abdominal strain and then
a cracked rib last winter.
An ECB statement
read: England
bowler Stuart
Broad will miss
the final ODI
against India
and the
N a t W e s t
T w e n t y 2 0
series against
West Indies, as
well as the ODI
leg of the India
tour, with a mus-
cle tear within his
right shoulder.
Broad may be fit to
join the England squad for
the Twenty20 fixture scheduled for
October 29 in Kolkata.
ECB chief medical officer Nick
Peirce added: Stuart has a muscle
tear within his shoulder and will
require an initial period of rest and
rehabilitation.
Exact timescales will be deter-
mined in due course, but he
is likely to be ruled out
of cricket for a num-
ber of weeks.
Meanwhi l e,
spinner Graeme
Swann was the
only England
player to be
named in
International
C r i c k e t
Councils one-
day internation-
al team of the
year.
The ICCs team
also features four mem-
bers of Indias world-beating
line-up, two from the World Cup
finalists Sri Lanka, two from South
Africa, and one each from Pakistan
and Australia.
Broad shoulder provides
England with more worries
BY JAMES GOLDMAN
CRICKET
Torres has scored just once in 21 appearances for Chelsea Picture: ACTION IMAGES
Villas-Boas to take
embattled striker to
task over apparent
criticism of colleagues
Sport
34
BEATEN US Open finalist Serena
Williams avoided a ban and escaped
with a fine of $2,000 for her outburst
during her defeat to Samantha
Stosur on Sunday.
Williams received a code violation
for verbally abusing umpire Eva
Asderaki during her 6-2, 6-3 defeat,
after a furious rant that included the
remarks: If you ever see me walking
down the hall look the other way.
Youre out of control, youre a hater
and youre unattractive inside.
The incident came just two years
after the former world No1 was fined
a grand slam record 53,000 and
handed a suspended ban from the US
Open for launching a foul-mouthed
diatribe at a line judge. She was
warned another major offence
before the end of 2011 would trigger
the ban and another fine.
Williams erupted on Sunday after
she was penalised a point for shout-
ing Come on before Stosur had
returned her forehand which is
deemed an offence. Arent you the
one that screwed me over last time?
she asked, mistaking Asderaki for her
previous nemesis Louise Engzell.
British No2 Anne Keothavong said
that while she sympathised with
Williams frustration at being
penalised, she believed her reaction
overstepped the mark and tainted
Australian Stosurs success.
She took it a little bit too far. I
think she had a point but rules are
rules and she did shout out too early,
and just carried it on for far too long.
The decision was made by the
umpire youve go to accept it as a
player and move on, said
Keothavong.
Most players in that situation
would have had one or two things to
say to the umpire but its the US Open
final, youve got to set an example out
there, lots of young kids look up to
her. It took a little bit of the gloss
away from Sam Stosurs victory.
Stosur, 27, upset the odds by beat-
ing Williams. Even though the
American was only seeded 28 follow-
ing a year in which her playing time
has been severely restricted by injury.
Williams refused to apologise for
her behaviour after the match, insist-
ing: I dont even remember what I
said, it was just so intense out there.
She added: Its the final for me,
and I was just I have to go I guess
Ill see it on YouTube. I dont know. I
was just in the zone. I think every-
one, when they play, they kind of
zone out kinda thing. I dont know,
Ill see it later, Im sure.
We live for these moments, you
know. Everyone lives to be, you know,
in the final of Wimbledon or the
final at the US Open. Whatever hap-
pens in that moment, you live for
them and we breathe for them, and
hopefully Ill be back for them.
Stosur admitted being left con-
fused by the incident, saying: I did-
nt really know what was going on. I
was just there. I know about the rule
but never dealt with it before.
Surly Serena
avoids a ban
and escapes
with a fine
BY FRANK DALLERES
TENNIS
Full-back Foden was hardly given any opportunities to run with ball in hand against Argentina Picture: GETTY
35
ENGLAND HIT BY BROAD
SHOULDER SETBACK
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THE BREAKDOWN | WORLD CUP BRIEFS
ITS A KNOCKOUT FOR WALES
Lock Luke Charteris has reflected on
Wales' shattering defeat against South
Africa by declaring: We are playing
knockout rugby now. Wales flew out of
Wellington yesterday ready to regroup
and prepare for Sundays Pool D show-
down with Samoa in Hamilton. Its the
World Cup, and unfortunately we are
playing knockout rugby now, said
Charteris. We cant lose again. We
have got to win all our games through
to the final.
IOANE MISSES IRELAND CLASH
Australia winger Digby Ioane has been
ruled out of Saturdays World Cup clash
with Ireland because of a fractured
thumb. Ioane sustained the injury dur-
ing Sundays 32-6 Pool C win over Italy
after coming into contact with the
boot of Mirco Bergamasco. The
26-year-old will be operated on
and will remain with the
Wallabies in New Zealand with
a view to playing later in the
tournament.
TIESI BLOW FOR PUMAS
Argentina centre Gonzalo Tiesi will
miss the rest of the Rugby World Cup
after suffering knee ligament damage in
the Pumas' 13-9 defeat to England.
Tiesi, the former Harlequins player, was
injured in a tackle from Englands
Courtney Lawes and has been replaced
in the squad by Lucas Borges.
LAWSONS RECORD
Scrum-half Rory Lawson (left)
will aim to extend his 100
per cent record as Scotland
captain in the World Cup
Pool B clash with Georgia
tomorrow. He said: We got a
bit of a fright on Saturday
against Romania and if ever we
needed a little bit of wake-up call, that
was it. But we came out of that with
five points, and now we're looking for-
ward to Georgia.
WORLD CUP organisers have warned
England they face a potential fine if
they fail to fix their peeling shirt
numbers.
The white numbers on the contro-
versial black jerseys began to rub off
during Englands opening victory
over Argentina.
Rugby World Cup Ltd have said
they will be seeking assurances from
England that there will be no repeat
in Sundays Pool B encounter with
Georgia.
A lack of clear shirt numbers
breaches the tournament participa-
tion agreement. It is not just fans
and broadcasters who need clear
numbers but also referees, touch
judges and anti-doping officers in
order to identify players.
A Rugby Football Union
spokesman said: There was an issue
with the bonding of the numbers to
the shirts and we will work with Nike
this week to ensure the problem is
rectified.
Meanwhile, Chris Ashton, Nick
Easter and Ben Foden recovered from
Englands victory over the Pumas
with an extreme sports outing in
Queenstown including bungee jump-
ing and jetboating.
Weve been together since the
beginning of June and the guys
havent had a lot of time to enjoy
each others company. This is an
opportunity for them to do a few
things and actually be together,
explained coach John Wells.
RUGBY UNION
Getting shirty: England

told to sort numbers out
FORMER England centre Will
Greenwood has urged Martin
Johnsons side to throw off the shack-
les and return to the expansive style of
rugby that saw them brush Australia
aside last autumn if they are to make
a major impact at the World Cup.
The error-strewn performance
against Argentina on Saturday could
not have been further removed from
the show Johnsons men put on
against the Wallabies at Twickenham
last November, when Chris Ashtons
100m dash to the try line capped a
thrilling 35-18 win.
England face minnows Georgia on
Sunday in their next Pool B clash and
Greenwood, a World Cup winner in
2003, believes the Red Rose must
make a statement of intent if they are
to be seen as a genuine threat to the
southern hemisphere heavyweights.
He told City A.M: It doesnt matter
how early it is in the tournament or
who the opposition are its time to put
all the cards on the table. Look at they
way Australia played against Italy scor-
ing a couple of wonderful tries.
Forget about not showing your
hand too early. If other teams know
youre capable of great moves theyll
be preparing for it. We should be look-
ing to batter Georgia, score loads of
points and send a real message.
England need to rediscover their
intensity and play with pace as they
did against Australia last year. Forget
this shroud of secrecy that should be
burned.
Im not saying England were try-
ing to hide anything against
Argentina, but they need to get back
to the way they played against the
Wallabies and look for the likes of Ben
Foden and Chris Ashton.
With the World Cup taking place in
New Zealand the start of the Aviva
Premiership has somewhat slipped
under the radar. But with so many
players away on duty with their
national sides, Greenwood believes it
has provided a clutch of talented
youngsters the opportunity to
enhance their own claims for interna-
tional recognition.
He said: When you look through
all the team theres some real super
quality young English talent. You look
at Wade bagging a hat-trick for Wasps
and George Ford at Leicester stepping
up to the plate.
There really is a depth to the
English game right now and I dont
think weve ever had it so good. The
Premiership is of such an outstanding
quality right now that it can only be of
benefit to the national team moving
forwards.
Will Greenwood is an ambassador for
Aviva proud title sponsors of Aviva
Premiership Rugby. This season, Aviva are
undertaking a project to scientifically prove
which Aviva Premiership club has the most
passionate fans. For more information and
for the chance to prove your passion, search
Premiership Rugby on Facebook or visit avi-
vapremiershiprugby.com/passionate
Greenwood:
England must
utilise Foden
and Ashton
BY JAMES GOLDMAN
RUGBY UNION
V
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2
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