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FTSE 100 5,089.37 +22.56 DOW 11,043.86 +272.38 NASDAQ 2,516.69 +33.45 /$ 1.56 +0.01 / 1.15 unc /$ 1.35 unc
Euro bank
debt issues
drying up
EUROPEAN bank debt markets are dry-
ing up, according to data compiled for
City A.M., in a development that is exac-
erbating funding concerns and could
see the European Central Bank (ECB)
re-enter the market for bank bonds.
Data supplied by Dealogic shows
that the value of bonds issued by
European banks has dropped off dra-
matically so far this quarter. While
they sold 285.3bn (248bn) in the first
quarter and 168.3bn in the second,
lenders have so far sold just 64.5bn
this quarter, which ends in one week.
The vast majority of that issuance
has been in covered bonds, which are
considered safer by investors but
require banks to tie up a pool of assets
in order to generate interest on the
bonds. Last week, the regions lenders
sold just 2bn in non-covered bonds.
The scarcity of buyers for bank
paper has seen European leaders sig-
nal they could step into the breach.
ECB board member Lorenzo Bini
Smaghi said with regard to banks: For
liquidity, we are there we are ready to
do what is needed. EUROZONE: P4
BY JULIET SAMUEL
BANKING

(Left to right) Bosses Ian Powell of PwC, David Sproul of Deloitte, Mark Otty of Ernst & Young and John Griffith-Jones of KPMG could face increased competition under new audit plans
RADICAL plans to force the UKs
biggest auditing firms to hive off their
huge consultancy arms or ban them
from cross-selling services to their
clients have been tabled by European
authorities, it emerged yesterday.
The European Commission has set
out new draft regulations to drastical-
ly curb the UKs Big Four accountants
Ernst & Young, PwC, Deloitte and
KPMG, potentially depriving each of
up to 1bn in annual revenue from
their consulting businesses.
The shock heavy-handed proposals
go much further than industry
observers had expected and are now
set to trigger a fierce battle. Countries
BRUSSELS WAGES
WAR ON BIG FOUR
BY ALISON LOCK
PROFESSIONAL SERVICES

www.cityam.com Issue 1,476 Tuesday 27 September 2011 FREE

CANNON
PLACE OPEN
NEW LANDMARK
AWAITS CITY
BUSINESS P18
WHEN CHIMPS MAKE
THE BEST FORECASTS
WHY EXPERTS OFTEN FAIL P22
BUSINESS WITH PERSONALITY
such as the UK may decide to block or
dilute the proposals.
The consultation document, from
internal markets commissioner
Michel Barnier, said Europes auditors
independence was neither assured
nor demonstrable.
The harshest option proposed
would outlaw all sales of advisory and
consultancy services, from tax adviso-
ry to risk management, to the firms
clients even those it does not audit.
Such a law could cause massive
financial damage and disruption to
professional services firms, as they
would have to pull their business
model apart and service clients from
two separate entities. A watered-down
alternative would bar firms from
cross-selling to audit clients only.
The draft plans also propose forcing
companies to change auditor at least
once every nine years, a move the
Commission believes would improve
audit quality and competition by
destroying the cosy relationships
between partners and their clients.
It said the low rate of rotation
FTSE 100 companies change their audi-
tor only on average once every 48 years
had deprived audit of its key ethos:
professional scepticism, according to
the draft document seen by trade pub-
lication Accountancy Age.
Further costly changes include mak-
ing large, economically important
companies employ two separate audi-
tors, including at least one non-Big
Four firm, to jointly audit their
accounts.
Audit industry sources told City A.M.
the bid to split audit and consultancy
functions wouldnt make sense and
would be a massive jolt.
Unwinding their client services
would be a costly and complex process
that would raise the cost of providing
services and could have wide-ranging
tax implications.
They could also potentially spark a
regulatory mismatch across the EU as
different states adopted different lev-
els of change, the sources said.
The vast majority of the more than
700 responses to the EC had already
overwhelmingly opposed such a plan,
they added.
Smaller auditors such as BDO and
Grant Thornton would gain from
parts of the proposed shake-up.
Certified Distribution
01/08/11 till 28/08/11 is 92,745
ANALYSIS l European bank debt markets have
ground to a halt
Debt
issuance
(m)
2 6 10 14 18 22 26 30 34 38
45,000
35,000
25,000
15,000
5,000
Total
Covered
Bonds
weeks
News
2 CITYA.M. 27 SEPTEMBER 2011
Stelios starts
easyJet rival
EASYJET founder Sir Stelios Haji-
Ioannou has told the airline he is plan-
ning to launch a rival airline called
Fastjet, in the latest twist in a series of
bitter disputes between the tycoon
and the firm he set up 16 years ago.
The shock move comes just a week
after easyJets management promised
to pay out a special dividend of 190m
to shareholders, including Sir Stelios
and his family, who own a 38 per cent
stake in the budget airline.
In turn, Sir Stelios backed down on
demands for an extraordinary share-
holder meeting to force non-executive
Professor Rigas Doganis off the board.
In a statement yesterday easyJet said
its founder had already set up a web-
site, which currently reads only:
Fastjet.com by Stelios. Coming soon!
The bold red background echoes
easyJets own orange branding. A
spokesperson for Sir Stelios declined to
comment further on the launch.
EasyJet vowed to take necessary
action if Fastjet infringes on the
rights of the airline and its investors.
Sir Stelios also alleges that the com-
pany breached the terms of a comfort
letter dated October last year mak-
ing it void, a claim which easyJet says
it emphatically rejects.
The letter which prevents him
from setting up a rival airline includ-
ed a mutual respect clause that pre-
vents Sir Stelios and easyJet from
speaking negatively of each other.
In a statement yesterday, Sir Stelios
said he strongly believes that the
directors of easyJet, via a smear cam-
paign conducted by off the record
briefings to journalists, have repeated-
ly breached the clause.
Analysts have derided Sir Stelioss
latest actions, warning that it could
damage shareholder confidence in
easyJet if the airline became further
embroiled in disputes with Sir Stelios.
One analyst said the world has
moved on since the time since he
launched easyJet when there was a
greater gap between low budget air-
lines and legacy carriers.
Carolyn McCall took over the reins
at easyJet a year ago with the chal-
lenge of finding some middle ground
in the battle with Sir Stelioss
easyGroup. A two-year row over the
licensing of the brand was resolved
last October, when easyJet increased
annual royalty payouts to easyGroup.
Keynesians failing their own theory
LET us assume for a moment that
todays self-styled Keynesians are right
and that what the UK and the West
need is not austerity but even greater
public spending. To me, given that the
UK government could borrow 130bn
this year, that the OECD puts public
spending at 50.1 per cent of UK GDP,
and that countries are going bankrupt
as a result of spending and borrowing
too much, this is a nonsensical
assumption. But it is worth exploring,
if only better to point out the flaws in
the reasoning of many so-called
Keynesians, including those in the
Labour party (they have distorted John
Maynard Keynes theories beyond
recognition, but that is a moot point).
A proper Keynesian stimulus does-
nt mean an extra couple of billion or
a slight slowdown in the pace of
deficit reduction. What would really
be required is shock and awe. The UK
economy is expected to be worth
1.539 trillion this year; so a proper
Keynesian-style boost to demand
worth a semi-decent 3 per cent of GDP
would be worth around 46bn.
Arguably, it would need to be even
larger, say 4 or 5 per cent of GDP. Yet
taken at face value and excluding any
damage they would cause to confi-
dence and incentives, Ed Balls series
of proposals probably amount to a
debt-financed boost to demand of
18bn, roughly 1.2 per cent of GDP.
This includes his proposal to cut
VAT back to 17.5 per cent, and his bid
to move forward infrastructure proj-
ects, partly compensated for by yet
another crippling 2bn-3bn tax on
banks (additional to Osbornes own
new tax). From a Keynesian perspec-
tive, it would make only a small differ-
ence. Even on its own terms, it is only
just better than a gimmick. It certain-
ly wouldnt mark a major intellectual
shift. Even if it did trigger more con-
sumption, quite a lot of this would be
on imported goods, which reduce
GDP. A lot of the construction spend-
ing would be conducted via imported
labour, thus failing to dent domestic
unemployment by much.
So even if one were to believe
Keynesian models in an open-econo-
my context, and pretend that the mar-
kets wouldnt panic, the boost to GDP
would be marginal, probably half a
per cent or so in the first year and less
in subsequent years. In the longer run,
taxes would have to be hiked; given
that Balls is obsessed with cutting
taxes on consumption, that would
mean even higher incentive-destroy-
ing taxes on income and capital. It was
interesting that Balls said yesterday
that the issue of land taxation is one
which we should actively look at in
other words, he is moving closer to the
kinds of crippling wealth taxes
beloved of Vince Cable. It is strange
that Balls appears to think that what
the UK needs more of today is debt-
financed consumption; in reality it
needs to rebalance towards invest-
ment, savings and exports.
What Keynesians should really be
demanding if they were serious advo-
cates of their own ideology is a mas-
sive cut in VAT to 12 per cent, or the
biggest government construction proj-
ect in UK history, or something of that
magnitude. The fact that they are not
doing so suggests a singular (and
healthy) lack of self-confidence in fis-
cal demand management. Britain
doesnt need another artificial boost
to demand. It needs a genuine boost to
the incentives of people and compa-
nies to work and invest, together with
a credible long-term commitment to
balancing the governments books.
Shame that Ed Balls cant see this.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
CREDIT rating agency Standard &
Poors could be hit with legal action
from the US markets regulator for
mis-rating a risky package of sub-
prime mortgage bonds in 2007, it dis-
closed yesterday.
S&P said the Securities and
Exchange Commission was consider-
ing recommending action against it
for violating securities laws in its rat-
ing of a collaterised debt obligation
(CDO) called Delphinus CDO 2007-1.
S&P rated almost $950m (614m) of
liabilities in the CDO in August 2007
but by December it had downgraded
the packages top-rated bonds. By
January the CDO was in technical
default and by the end of 2008 all its
AAA bonds were classed as junk.
S&P warned it might have to pay
civil penalties in the case.
US may charge
S&P over sub
prime ratings
EasyJet founder Sir Stelios Haji-Ioannou has said he plans to take off with a rival airline
ENFORCEMENT

EDITORS LETTER
ALLISTER HEATH
Editorial Statement
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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
Art Director Jo Simpson
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
BY KASMIRA JEFFORD
AVIATION

y
BP PROPOSES FOURTH PIPELINE ROUTE
TO BRING AZERBAIJAN GAS TO
EUROPE
BP is planning a pipeline stretching
1,300 km across three countries to
bring gas from Azerbaijan to Europe.
The scheme is a new entrant in the
highly charged competition to con-
struct a supply route to the Caspian
basin and reduce Europes depend-
ence on Russian gas.
FSA CONSIDERS MASHKEVICH BID TO
JOIN ENRC BOARD
The UK Listing Authority is consider-
ing an application by Alexander
Mashkevich, the billionaire co-
founder of Eurasian Natural
Resources Corp, to join the ENRC
board, people close to the company
said. A board seat for Mashkevich,
who has publicly defended the FTSE
100 Kazakh mining company, could
precede his drive for the chairman-
ship and would mark a new begin-
ning for the embattled company.
CHINA THE REAL THING FOR BUSINESS
RATHER THAN US, SAYS COKE CHIEF
Coca-Cola now sees the US as a less
friendly business environment than
China, its chief executive has
revealed, citing political gridlock and
an antiquated tax structure as rea-
sons its home market has become less
competitive. Its like a well managed
company, China, Muhtar Kent,
Cokes chief executive, told the
Financial Times.
BANKER TO STAND TRIAL ACCUSED OF
F1 BRIBES
A German banker is set to stand trial
next month over charges that he
received $33m in bribes from
Formula One boss Bernie Ecclestone
and a family trust in connection with
the sale of a stake in the motor racing
series. Gerhard Gribkowsky, the for-
mer chief risk officer at BayernLB,
will stand trial in Munich.
HALCROW STAFF SET FOR 124M
WINDFALL AFTER ENGINEER FALLS TO
AMERICAN RIVAL
One of the grand names of British
civil engineering has fallen to an
American takeover. Halcrow, which
played a central part in the war effort
between 1939 and 1945, is being
bought by its Denver-based rival
CH2M Hill. The takeover could gener-
ate windfalls of tens of thousands of
pounds each for the consultant engi-
neers staff.
UK PLC FIRES THE STARTING GUN IN
THE RACE TO REBUILD LIBYA
Britain is gearing up for a postwar
reconstruction bonanza in Libya by
organising an invitation-only confer-
ence today to outflank potential
rivals from France and Italy. UK Trade
and Investment aims to broker deals
between British investors and Libyas
National Transitional Council.
SERGEI MAGNITSKY'S MOTHER
DEMANDS RUSSIAN MURDER PROBE
Russia has come under fresh pressure
to investigate the high-profile prison
death of Sergei Magnitsky, the lawyer
who uncovered the biggest tax fraud
in Russian history.
In a complaint lodged with prosecu-
tors, the late mans mother has
alleged he was illegally arrested, tor-
tured and murdered in a Moscow
prison in November 2009. Magnitsky
was working for UK-based investment
fund Hermitage at the time of his
death.
GULF KEYSTONE AND EXCALIBUR IRAQ
LEGAL BATTLE HOTS UP
New court documents have shed fresh
light on Gulf Keystone Petroleums
links with Excalibur, the obscure com-
pany that claims it is owed 30 per cent
of the 1.2bn explorers Iraq oil
wealth.
MOTOROLA SOLUTIONS INVESTIGATED
US authorities are investigating
whether Motorola Solutions paid
bribes to win business in Europe, peo-
ple familiar with the matter said.
Justice Department and Securities
and Exchange Commission officials
have asked the company which
makes two-way radios and systems for
police, fire and other public-safety
organisations for information over
the past two years about transactions
in seven European countries,
DELOITTE & TOUCHE SUED OVER
TAYLOR BEAN COLLAPSE
The trustee overseeing the bankrupt-
cy of Taylor Bean & Whitaker
Mortgage Corp filed a lawsuit yester-
day against Deloitte & Touche, saying
the firms grossly negligent audits
contributed to the mortgage lenders
collapse. The trustees lawsuit seek a
total of at least $7.6bn in damages.
WHAT THE OTHER PAPERS SAY THIS MORNING
2011 Rank City Change to score New score
1 London -1 774
2 New York +4 773
3 Hong Kong +11 770
4 Singapore +13 735
5 Shanghai +30 724
6 Tokyo +1 695
7 Chicago +19 692
8 Zurich +21 686
9 San Francisco +26 681
10 Toronto +22 680
Source: The Global Financial Centres Index, Long Finance
LONDON clung to the top place on a
list of the most important global
financial centres yesterday but saw its
lead over rivals slashed to almost zero
as its competitive edge vanished, a
new report showed.
In a worrying sign that the City is
losing its place as the worlds leading
finance hub, Londons competitive-
ness score fell one point in 2011, leav-
ing it just one point ahead of its
biggest rival New York, according to
the Global Financial Centres Index.
Hong Kong jumped 11 points to take
third place in the ranking, which
assesses factors such as business envi-
ronment, market access and talent. It
now sits just four points below
London, while Singapore and
Shanghai made double-digit gains.
The indexs publisher Long Finance
said the margin between London and
its next two rivals was negligible.
There is no signicant difference
between London, New York and Hong
Kong in the ratings, it said, warning:
London in particular must not rest on
its laurels.
The Vickers report recommends
some fairly fundamental reforms of
the banking and many in the sector
believe that these might damage the
competitiveness of London.
Furthermore, tax levels in the UK are
unpopular within the nancial servic-
es sector, it added.
London is still the clear leader with-
in Europe, where its nearest competi-
tor is Zurich, ranked eighth. Frankfurt,
the nearest Eurozone rival, was ranked
16th and the report said it does not
appear that London will be overtaken
any time soon.
But Long Finance said the survey
showed demand for finance centres in
each time zone, with London, New
York and Hong Kong filling the three
major trading sessions worldwide.
If you are one of the big banks you
need a presence in New York, London
and Hong Kong you cannot claim to
be global otherwise, one Hong Kong-
based banker told the survey.
The popularity of offshore centres
fell in the past year, but survey respon-
dents believed South Koreas capital
Seoul, Shanghai and Singapore were
most likely to gain ground as financial
centres in future. MORE: PAGE 14
London clings
to top spot as
finance hub
ED Miliband, the Labour party leader,
will use his conference speech today to
attack businesses he labels asset strip-
pers.
His speech shows Labour keen to
draw a line between good businesses
that behave responsibly and bad
firms that make profits recklessly.
Miliband places in the bad catego-
ry firms such as care home operator
Southern Cross, which is to cease trad-
ing after running up huge debts on its
rent obligations after selling and leas-
ing back its care home real estate.
Let me tell you what the 21st-centu-
ry choice is: are you on the side of the
wealth creators or the asset strippers?
he will tell delegates in Liverpool.
For years as a country we have been
neutral in that battle. Theyve been
taxed the same, regulated the same,
treated the same, celebrated the same.
They wont be by me.
But his stance is likely to be viewed
as an attack on private equity and its
strategy of growing companies by load-
ing them with debt a tactic that
backfired in the financial crisis.
His approach also reverses the pro-
private equity stance taken by the pre-
vious Labour government.
LABOUR CONFERENCE: PAGE 7
COMMENT: PAGE 25
Ed Miliband launches attack
on the private equity industry
BY ALISON LOCK
ECONOMY

Labour party leader Ed Miliband will today attack firms he has labelled asset strippers
BY ALISON LOCK
POLITICS

News
3 CITYA.M. 27 SEPTEMBER 2011
THE TOP GLOBAL FINANCIAL CENTRES IN 2011
FRENCH banks will need a capital
injection in the tens of billions,
according to analysts.
In several notes yesterday, analysts
began to lay out how a new bailout of
the countrys lenders could happen,
with some suggesting that it is the
best risk-reward medicine.
Following comments by Banque
de France governor Christian Noyer
that Europes bailout fund could
step in the rescue the banks, ana-
lysts have said that any capital
injection will have to be on a larger
scale than the action taken in 2009.
Nomuras Jon Peace wrote that in
a recessionary scenario, they
could need as much as 60bn
(52bn) to meet capital require-
ments. That dwarves the 8.5bn
they received in the last financial
crisis.
JP Morgans Kian Abouhossein
says that bailing out the banks is a
better option than socialising
bank risk in other ways such as
the European Central Banks deci-
sion to extend access to its liquidity
facility or governments underwrit-
ing bank debt.
Abouhossein estimates that a
15-20bn bailout is likely for
French banks but that across the
region, his top 28 lenders would
require 45bn in extra capital. A
regional bailout, meanwhile,
would cost 150bn, he calculates.
French banks rallied yesterday on
the prospect of a bailout being
organised by European authorities.
Credit Agricole closed up 3.66
per cent, Socit Gnrale rose 5.44
per cent and BNP Paribas gained
3.99 per cent, despite the possibili-
ty that current shareholders could
be wiped out in the event of a res-
cue. THE FORUM: P24
French bailout
would dwarf
2009 rescue
BY JULIET SAMUEL
BANKING

RETURNS on US Treasuries have

boomed in recent months, as investors
have turned to long-term American
debt.
Hopes of political action over the
Eurozone crisis saw Treasuries slip yes-
terday, yet 2011 as a whole is on course
to be one the most successful ever
years for bond-buyers.
Despite losing around one and a
half points in yesterdays trading, 30-
year Treasuries remain elevated. Yields
rose yesterday, following an upturn at
the very end of last week, yet stayed
below three per cent mark.
And 10-year Treasuries are set to
return over 30 per cent this year, ana-
lysts expect, smashing the returns
gained from government bonds in
recent years.
The bonds have steadily increased
since earlier in the summer, and are
now outperforming gold (see chart on
page 5).
Long-term Treasuries have perked
up since last week, when the Federal
Reserve announced its latest attempt
to stimulate the struggling US econo-
my Operation Twist.
Some analysts had feared that the
Feds asset purchases would stoke
inflation and weigh down on the US
dollar.
News
4 CITYA.M. 27 SEPTEMBER 2011
Returns on US Treasuries set
to pass 30 per cent this year
Germany denies imminent
plans for trillion-euro fund
THE Eurozone descended into confu-
sion yesterday, with officials giving
contradictory signals on the prospects
for a capital increase for the regions
bailout fund.
German finance minister Wolfgang
Schuble denied that the Eurozone is
considering plans to boost the firepow-
er of the European Financial Stability
Facility (EFSF) by a factor of five so that
it could deploy 2-3 trillion.
Asked if an increase could be
pushed through on Thursday when
the German parliament votes on the
smaller increase to the EFSF agreed in
July, he said: No, that is clear... We do
not intend to increase it.
But markets are still awash with
rumours that a plan to create a bailout
facility in the trillions is afoot.
Some economists, however, say that
it wouldnt save the region anyway.
Capital Economics analysts said:
Overall, the reported proposals are
perhaps the minimum required to buy
some time in the event of a Greek
default. But, just like the many previ-
ous bailout packages, they would not
be a permanent solution.
EUROZONE

Fed chief Ben Bernankes easing policies have not yet harmed bond-buyers
ANALYSIS l BNP Paribas SA

21 Sept 20Sept 22Sept 23Sept 26Sept

26
25
28
27
24
23
26.33
26 Sept
BY JULIAN HARRIS
MARKETS

News
5 CITYA.M. 27 SEPTEMBER 2011
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PRECIOUS metals plunged again yes-
terday morning as investors continue
to be spooked by the unexpected
downturn in supposed safe havens.
Gold and silver both pared losses
later in the day, yet have taken a huge
hit since earlier in the month.
Spot gold tumbled as much as 7.4
per cent to a low of $1,534.49 yester-
day, its weakest since early July, before
cautious buying repaired some of the
damage.
Gold has fallen by nearly nine per
cent in its largest three-day slide since
October 2008 and implied volatility
has risen to a two and a half year high.
Spot silver dropped as much as 16
per cent to $26.04, a level not seen
since November 2010, and platinum
slid as much as nine per cent before
paring losses.
It shows you that at times of
extreme stress, there is not a suitable
substitute to liquidity, said Credit
Suisse analyst Tom Kendall.
Other highly-traded commodities
also took a knock yesterday, with cop-
per -- often a bellwether for the
strength of the global economy -- suf-
fering its sharpest fall since October
2008, before trimming losses.
Aluminium fell to its lowest level for a
year before recovering to trade higher.
Golds safe haven status
questioned by investors
ANALYSIS l Asset performance since July 2011
Rebased
to 100
EU
emergency
summit
US
stripped
of AAA
Jackton
Hole
speech
Operation
Twist
Coordinated
liquidy
measure
Swiss
franc
peg
130
120
110
100
90
0
4 11 18 25 1 8 15 22 29 5 12 19
CRB Index
US 10Y Treasury
S&P 500
Gold
Dollar Index
Source: Reuters Datastream
Jul 2011 Aug 2011 Sep 2011
BY JULIAN HARRIS
MARKETS

@
@
@
MORE NEWS
ONLINE
www.cityam.com
GOLD - ITS NOT INDESTRUCTIBLE
Q.
DOESNT GOLD RALLY DURING
ECONOMIC TURMOIL?
A.
Not always. Investors often flee
from all their positions, and in
this case have largely turned to the US
dollar as the most liquid option.
Q.
BUT WHY HAS IT BEEN HIT SO
HARD?
A.
There are several possible factors,
with gold likely being affected by
a combination. Losses on equities has
seen some profit-tak-
ing on the metal. The
Chicago exchange (CME)
has hiked its margin requirements.
Q.
SO IS IT GAME OVER FOR THE
GOLD RALLY?
A.
Not at all. Uber-loose monetary
policy appears to be here to stay,
while economic uncertainty still
makes it more attractive than most
alternative investments.
Q A
&
ED Balls yesterday unveiled an 18bn
plan to stimulate the economy,
including slashing VAT on home
improvements to five per cent and
giving small firms a national insur-
ance holiday if they take on new
workers.
Balls repeated calls for the govern-
ment to reintroduce Labours bonus
tax; to lower the headline rate of VAT
from 20 per cent to 17.5
per cent; and to
bring forward capi-
tal projects such as
building schools
and roads.
He said: The gov-
ernment must adopt
a steadier, more bal-
anced plan to get our
deficit down and take
immediate action now
to support the economy
and create jobs here in
Britain.
Balls measures
would cost the
exchequer around
21bn while his
bonus tax would raise between 2bn
and 3bn, bringing the net cost of his
five point package to around 18bn.
Justine Greening, economic secre-
tary to the Treasury, said: This
speech failed the credibility test.
Everyone can now see that Ed Balls is
dangerously addicted to debt.
The director general of employers
organisation the CBI, John Cridland,
said some of the proposals for stimu-
lating growth were worth consider-
ing but that the headline VAT cut
which would cost the exchequer
12.1bn in 2011-12 was not afford-
able.
Balls used his first conference
speech as shadow chancellor to
sound a more measured note on
the deficit, responding to fears
that Labour has lost its credibility
on the economy by failing to
acknowledge the parlous state of
the public finances.
He promised to introduce
tough fiscal rules that Labour
would need to adhere to
should it win the next
election, although
he failed to set
them out, merely
saying they would
put the national
debt on a down-
ward path.
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Balls unveils
18bn plan to
aid economy
News
7 CITYA.M. 27 SEPTEMBER 2011
CITY VIEWS: DO YOU BELIEVE LABOUR WILL INTRODUCE TOUGH FISCAL RULES TO CUT
THE DEFICIT? Interviews by Claire Farrell
Just look at the Labour partys track
record. I don't believe Ed Balls. We built
up this deficit when he was in power. I
don't believe his party has changed at
all. Labour wont be any different next
time round.
TROY SOP | DEUTSCHE BANK
It's easy for Balls to say he will be tough on
the deficit, but I don't believe him. The main
reason the UK has such a large deficit is
because Labour was in power. If they were
to win the next election, I dont think
theyd be any different to Gordon Brown.
MARC TAYLOR | CNS
I don't believe Balls. He is just giving the typical response you always get from parties in opposition. If Labour
were in power, David Cameron would be saying something similar, and I wouldn't believe him either. Politicians
only say what people want to hear.
ROGER INGLES | ELYSIAN
Talk about damning some-
one with faint praise. Balls
pretends he is cutting the
Prime Minister and chancellor
some slack by saying they arent
entirely to blame for Britains eco-
nomic woes. Of course, very few
people blame the Tories for the
state of the British economy let
alone the 2008 financial crisis
they were in opposition.

BEHIND THE LINES | BALLS SPEECH

Its not right to blame
David Cameron and
George Osborne for everything
thats wrong with our econo-
my. They didnt cause the
global financial crisis.
That crisis was a body blow
to our economy and our
public finances.

Classic Balls. The 2008

public debt was only lower
as a share of GDP com-
pared to 1997. And while Britains
debt was lower than these coun-
tries, he has picked nations with
uniquely high debt piles amassed
well before the crisis. The UKs
deficit as a share of GDP in 2008
was higher than all these coun-
tries with the exception of the US.

Don't let anyone tell

you that Labour in gov-
ernment was profligate with
public money when we went
into the crisis with lower
national debt than we inher-
ited in 1997 and lower than
America, France,
Germany and Japan.

Balls identifies a handful of

mistakes made by Labour
when in government. But
the first two are things that actu-
ally generated revenue for the
exchequer. On the principal
charge that Labour was profli-
gate he offers no examples of
overspending, merely observing
the government didnt spend every
pound well. By David Crow

When they say we made

mistakes in government,
they're right... we must admit
them and show we've learned
from them. The 75p pension rise
that was a mistake. So was
abolishing the 10p tax rate. We
didn't spend every pound
of public money well.

* These views are those of the individuals above and not necessarily those of their company.
News
8 CITYA.M. 27 SEPTEMBER 2011
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A GROUP of shareholders yesterday
led the calls for Alex Weber to join
UBS early as more contenders
emerged for the chief executives role.
Swiss campaigning group Ethos
said UBS could use an EGM, within a
month, to install Weber, amid claims
the former Bundesbank chief has
been has been involved in all strategic
decisions since the $2.3bn (1.5bn)
rogue trade emerged.
Weber is set to join the UBS board
next year and replace Kaspar Villiger
as chairman in 2013. Last night the
bank declined to comment on sugges-
tions this could be accelerated but
pointed to an interview in which
Villiger said the board saw no rea-
son to change the plan.
The Bundesbank would need to
agree to Weber joining UBS early but
said no request had been received.
It came as several other candidates
emerged to replace Oswald Gruebel,
who resigned despite winning a vote
of confidence from the board.
Interim head Sergio Ermotti and Bill
Winters, the former co-chief execu-
tive at JPMorgan Investment Bank,
are seen as contenders alongside
Weber, Lukas Ghwiler, head of UBS
Switzerland and Hugo Banziger, chief
risk officer at Deutsche Bank.
Shareholders calling for
Weber to join UBS now
Interim head Sergio Ermotti is tipped to win the top job at UBS Picture: REUTERS
BY PETER EDWARDS
BANKING

LCH.Clearnet
mulls offers
THE BIDDERS for Europes sought-
after clearing house LCH.Clearnet
were waiting for the outcome of a crit-
ical board meeting yesterday to decide
which of the offers will be accepted.
The decision is crucial for the
London Stock Exchange, which is one
of two main bidders for a controlling
stake in LCH, Europes last independ-
ent clearing house.
The LSE is competing against post-
trade services group Markit, which is
keen to buy LCH in entirety, while US
exchange the Nasdaq OMX Group has
also put in a bid for a minority stake.
One industry source told City A.M.
both sides would gain from the LSE
winning the bid.
BY ALISON LOCK
CAPITAL MARKETS

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4
Ashurst set
for merger
CITY law firm Ashurst is set to merge
operations with Australian group
Blake Dawson to create a legal firm
with turnover approaching 500m.
The pair hopes to rebrand as
Ashurst in early 2012, having tied up
their Asian businesses, with a full
merger expected in 2014.
The tie-up was sealed by a vote by
both partnerships late last week.
Ashurst already has operations in
Asia, including offices in Hong Kong,
Singapore and Tokyo, but hopes the
tie-in with Blakes will give it greater
access to markets in the region.
The silver circle currently has
more than 200 partners in 12 coun-
tries.
BY HARRY BANKS
LEGAL

SOMETHING to look forward to for

UBS alleged fraudster Kweku Adoboli,
once he has emerged from the trau-
ma of the courts: following in the
footsteps of the original rogue trader
Nick Leeson by entertaining drunken
clients at corporate events.
Leeson has been quietly raking it in
on the after-dinner speaking circuit
for years, says celebrity booker Stanley
Jackson, who first took a gamble on
the man who broke Barings by hiring
him as the entertainment at a din-
ner organised by Caspian Publishing
founder Mike Bokaie.
Just about every sector of trade
and commerce was represented,
recalled Jackson. Including several
firms of accountants and lawyers who
were at that very moment appearing
in court to defend themselves from
their part in Barings collapse.
Jackson was speaking at last nights
launch of his book Get Me A
Celebrity!, where guests including for-
mer CBI director general Digby, Lord
Jones of Birmingham and Luke
Johnson, chairman of Risk Capital
Partners, heard about the highs and
lows of working with celebrities.
Despite the Murdoch meltdown, I
remain optimistic about the business
of celebrity hire 20 years after stum-
bling across it, he said. People with
talent continue to need audiences.
Although whether rogue trading is a
talent is, of course, debatable
MODEL BEHAVIOUR
CNBC has already delved into the past
of media baron Richard Desmond
and Jimmy Choo founder Tamara
Mellon, and tomorrow night it is the
turn of supermodel Naomi Campbell.
In the 30-minute CNBC Meets inter-
view with Tania Bryer, Campbell (bot-
tom) revisits her childhood home in
Streatham for the first time in 27
years, where its new owners have kept
many things the same the
door handles, the mirrors
and the plant in the gar-
den named after the
famously volatile model.
Dark and fiery Im
flattered, she tells Bryer,
before pointing out
the grave of
her first
dog. We
d r e s s e d
him in
c l o t h e s
f r o m
Mothercare and
hes under there. I
made the whole fam-
ily come to the funeral.
SENIOR MOMENT
AGE IS no barrier to 69-year-old Alan
Harris, manager of Charles Stanleys
Brighton branch, who was the most
senior candidate to pass this sum-
mers Private Client Investment
Advice & Management exams.It was
a relief to pass and amusing to hear
that I was the senior statesman of the
group, he told The Capitalist.
In fact, Charles Stanley is pretty
sure Harris is the oldest candidate
to pass the PCIAM diploma full
stop although rumours persist of
a 70-year-old currently working
towards taking that record.
Not that Harris is bothered he
and his wife have just returned
from a canoeing holiday along the
wilderness of the Yukon River in
Canada, arriving 200 miles and
eight days of paddling later at the
Gold Rush town of Dawson City.
COLLECTORS ITEMS
CLIFFORD Chance takes its art very
seriously the 1,200 original prints in
the firms expanding collection are
designed to make the day go better.
The art is not only asked to act as
an antidote to the daily task of lawyer-
ing but also to provide stimulation and
inspiration, said Clifford Chances art
curator Nigel Frank. Challenging it
can be, insipid it cannot.
So look out for the latest additions
to the collection, which will hang in
the law firms Canary Wharf office: a
prize-winning set of prints from
Polish artist Marta Lech (below) where
the light causes the illusory impres-
sion of measured, finite structure.
LEARNING CURVE
THE CITY has a responsibility to pro-
vide opportunities for bright young
people to ensure they reach their
full potential, said Lord Mayor
Michael Bear at last nights City of
London Business Traineeship
Awards at Deutsche Bank.
Top of the leaderboard at the
awards, which marked the end of
the City of London Business
Traineeship scheme, was
Socit Gnrale,
which won
Employer of
the Year for
giving 12
paid sum-
mer intern-
ships to young
people from some of
Londons most deprived
boroughs.
ROGUE TRADING TALENT
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9 EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
The Capitalist
CITYA.M. 27 SEPTEMBER 2011
Left: UBS
rogue trader
Kweku Adoboli
Right: Barings
rogue trader
Nick Leeson,
now a public
speaker and
former CEO of
Galway United
FC
News
10 CITYA.M. 27 SEPTEMBER 2011
UBS has little scope to outflank Joe Lewis
T
HE spotlight, when it comes
to UBS, is currently on where
the investment bank goes
from here, but elsewhere
there are teams of bankers getting
on with their day jobs.
In London, Nick Reid and his team
are trying to do the impossible;
advise the pubs group Mitchells &
Butler on how it might get a higher
bid for the group from the currency
dealer and investor Joe Lewis.
Lewis has offered just 230p a share
for the group and does so from hav-
ing a shareholding of more than 20
per cent.
What worries shareholders, and
UBS, is that Lewis might also have
the support of the Irish tycoons JP
McManus and John Magnier, not to
mention another of the Sandy Lane
set, Derrick Smith, who has a 3.4 per
cent stake and was yesterday deemed
to be acting in concert with the Irish
investors.
Whilst the two main shareholders
were recently deemed not to be act-
ing in concert, many feel they know
each other well enough to negotiate
a deal that will give the Irish tycoons
a stake in a new Joe Lewis-controlled
company, leaving other shareholders
with no option but to accept the
230p a share offer.
UBS will be talking to sharehold-
ers to get their view of develop-
ments. They will also be in touch
with the Citys Takeover Panel to
keep the Panel aware of concerns
that the two largest shareholders
might be acting together (in which
case there might be an argument for
Lewis having to raise his bid slightly
to reflect the higher level the Irish
tycoons bought shares at in April).
The strongest card might be in try-
ing to persuade Lewis that he should
consider a higher bid in order to get
a recommendation from the board.
But in this deal Lewis very much has
the upper hand and it would be no
surprise if UBSs best defence strate-
gy comes to nought.
FAILING IPOS
Famously Lloyd Blankfein, the
Goldman Sachs chief executive,
turned up to the pitch for the IPO of
Evonik, the German chemicals
group, so keen were Goldman to win
the mandate. The US bank won the
job but on Friday lost the war as
Evonik became the latest share issue
to be pulled due to market condi-
tions.
European IPO volumes are looking
weak. At 42, the number of deals
completed in the third quarter is the
lowest for a couple of years, accord-
ing to Dealogic.
Inevitably there will now be ques-
tion marks over the success or other-
wise of the Spanish lottery, which is
in its pre-marketing phase. The nine
banks involved in this one will do
well to get it away.
david.hellier@cityam.com
INSIDE TRACK
DAVID HELLIER
NEWS | IN BRIEF
Bunzl completes two deals
FTSE 100 distribution and outsourcing
group Bunzl has completed two new
acquisitions, the firm stated yesterday.
Bunzl has bought Ideal Global Sistemas
de Higiene Ltda, a cleaning and hygiene
products supplier in Brazil and D-Care
BV, a medical products distributor in the
Netherlands. Bunzl also recently bought
Majestic Products.
All Saints Stephen Craig quits
All Saints chief executive Stephen Craig
has quit after falling out with chairman
and co-founder Kevin Stanford over who
was in charge. Craig stated yesterday the
current leadership structure is unten-
able given the lack of clarity of roles
between the chairman, Kevin Stanford,
and me. He said he would seek other
more entrepreneurial opportunities.
News
12 CITYA.M. 27 SEPTEMBER 2011
N
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t
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r
k
B
a
n
k
e
r
.
c
o
.
u
k
N
e
t
w
o
r
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B
a
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SHARES in Aberdeen Asset
Management climbed yesterday
despite plunging markets and depart-
ing clients pulling the value of its
funds down by nearly 9bn.
The stock closed 0.89 per cent up at
170p after it said full year profits
would be near the top of analysts pre-
dictions of 262m to 297m.
Aberdeen said clients pulled a net
800m from its funds in the two
months to 31 August, as fears over the
global economy hit demand for fixed
income and alternative products.
It also said its assets under manage-
ment fell 8.1bn, or 4.79 per cent, to
176.9bn. Chief executive Martin
Gilbert told City A.M. the loss is just
the market falling, which happens.
We are still in good shape.
He also said he was not seriously
concerned by the prospect of a fur-
ther fall in September, when equities
have plummeted amid Eurozone tur-
moil.
Aberdeen said clients added 300m
to its equity fund range during the
period, buying global emerging mar-
ket and global equities strategies to
offset weaker European markets.
Gilbert said: The expectation is for
anaemic economic growth in the
West for some time.
Aberdeen chief defiant
despite a slump in funds
Looking ahead: Martin Gilbert said Aberdeen wass in good shape Picture:PHOTOSHOT
BY PETER EDWARDS
ASSET MANAGEMENT

ANALYST VIEWS: HOW IS ABERDEEN DOING

IN A TROUBLED MARKET? Interviews by Peter Edwards

DAVID MCCANN | NUMIS SECURITIES

Recent flows have been strong and importantly in high margin areas
(global and emerging market equities) and we expect this trend to continue as
investors continue to seek more international assets... the business is stronger
now than in 2008-09.

KEITH BAIRD | ORIEL SECURITIES

Aberdeen is arguably better positioned than other asset managers
because of its expertise in emerging markets as can be seen in the 11 month
inflows into higher margin equities... The assets under management total is likely
to have fallen further in September.

STUART DUNCAN | PEEL HUNT

In what were challenging conditions, this is a good result. Assets under
management fell by five per cent over the two month period, primarily reflecting
negative market movements in equities, with only modest net outflows showing
the groups resilience.

News
14 CITYA.M. 27 SEPTEMBER 2011
TWITTER will establish an interna-
tional office in Dublin, in a move that
has been seen as a snub to Londons
flagship Tech City project.
The microblogging site follows the
lead of web giants including Google,
Facebook, Microsoft and Intel in tak-
ing advantage of Irelands generous
tax system.
Its headline rate of corporation tax
is just 12.5 per cent compared to 26
per cent in the UK but companies
are also lured by rules allowing them
to easily transfer funds to offshore
locations, provided they have a base
of operations there.
Analysts say Twitter could save the
equivalent of 16 per cent on its corpo-
ration tax bill by locating in Dublin,
rather than London. The tech indus-
try has become a major Irish employ-
er, with Google alone carrying a
workforce of some 2,200.
The move was hailed by the Irish
inward investment agency as a fur-
ther sign of the countrys status as
the internet capital of Europe.
A Twitter spokesman said: The
office in Dublin, our third location
outside of the US, is a great next step
in the companys global expansion.
A UK department for business
spokesman declined to comment.
Twitter is one of the hottest of the
new breed of internet giants, with a
round of funding in the summer
valuing it at more than $8bn (5.2bn).
Its advertising revenue is under-
stood to have risen to well over
$100m, as the popularity of the site
continues to soar.
Tech City, which encompasses
developments at Old Street and
Stratford, is home to promising start-
ups including Last FM, Huddle,
Yammer and SoundCloud but is yet to
attract a blockbuster name.
Twitter snub
to Tech City
BY STEVE DINNEEN
TECHNOLOGY

ANALYSIS l How the UK's corporation tax rate stacks up

Japan
39.5%
39.25%
US
34.4%
France
34%
Belgium
30.2%
Germany
30%
Australia
28.5%
Luxembourg
26%
UK
27.5%
Italy
26.3%
Sweden
21.2% Switzerland
12.5% Ireland
Tax rules mean UK lacks headline acts
W
HEN David Cameron
launched the Tech City ini-
tiative last November, he
said he wanted the UK to
rival Silicon Valley as a global hub of
innovation. A year later and that
goal seems as far away as ever.
Far from competing with Silicon
Valley, Tech City is struggling to
keep pace with Ireland and other UK
hubs such as Cambridge.
If the European tech market was a
festival, Ireland would be the main
stage, attracting headline acts like
Google, Facebook and Microsoft.
Tech City more closely resembles
the new bands stage. Its talent is
promising Last FM has been joined
by the likes of Huddle, Yammer,
Mixcloud and SoundCloud but
they lack the international clout of
an Apple or an Intel. An anchor
company of this ilk would attract
smaller firms, either by directly
spinning them off or by creating
demand for support services. But to
snare a blue chip firm, the UK needs
to provide a level playing field. Some
analysts say Google has saved 3.1bn
over three years by filtering its
European profits through Ireland.
Setting up the infrastructure for
Tech City without laying down a
competitive tax system is like a din-
ner party host cooking the food but
failing to send out any invitations.
The parallels with the UKs video
games industry are striking. In 2006
we ranked third in the world in
terms of turnover. Since then rivals
notably Canada have introduced
lucrative tax breaks, pushing the UK
into sixth place, according to indus-
try body Tiga. The UK gaming work-
force has dropped 10 per cent in the
last two years, while the Canadian
equivalent has risen 35 per cent.
Tech City is an exciting project
but one that will need more than
rousing speeches to make it work.
BOTTOMLINE
Analysis by Steve Dinneen
News
15 CITYA.M. 27 SEPTEMBER 2011
MARK Byrne, the insurance entrepre-
neur bidding to take control of
Omega Insurance, said yesterday he
hoped there would be a quick resolu-
tion to the three-way takeover contest
that has left the company in a state of
flux.
Its difficult to hire people when
theres a for sale sign on the door,
Byrne told City A.M. yesterday, just
hours before his tender document is
due to be published.
Im not letting grass grow under
my feet, he said.
Byrne is tendering for up to 25 per
cent of the groups shares in an offer
that will be worth between 70p to 83p
depending on demand. He is up
against a possible full offer from
insurance group Canopius and a rival
offer from Barbican Insurance, which
is the form of a reverse takeover.
Byrne said he would manage the
company from London, where he has
a home, and he ruled out suggestions
that he would use a company jet as
he did at Flagstone Re, an earlier ven-
ture of his.
Ive got no plans to increase the
cost base, he said, and Ive no plans
to change the senior management.
He defended Omega chief execu-
tive Richard Pexton, who has over-
seen a recent 25 per cent reduction in
assets. I dont think it is fair to criti-
cise him. Hes made good decisions
on technology, for example.
Byrne said that he might consider
injecting some of his other business
interests into Omega, such as his
micro-insurance business that he
owns through another vehicle
Leapfrog.
Its not a high priority on day one
but if we got the opportunity to do
something at some point it might be
worth looking at. There are higher
priorities right now.
Much depends now on the decision
of Neil Woodford whose Invesco
Perpetual funds own around 27 per
cent of Omega. Up until now he
appears to have decided with Byrne,
indicating that he might tender a
stake of up to five per cent of Byrnes
offer.
Byrne still needs regulatory
approval, which he expects to get by
November.
Byrne aims to
revive morale
inside Omega
THE dotcom investment firm started
by the son of Tory donor David
Spotty Rowland made an operating
loss of more than 1m in its first four
months trading.
Jonathan Rowlands Jellybook said
the losses were largely down to costs
associated with its incorporation in
March and its listing on AIM in June.
In a gloomy reflection of the eco-
nomic climate, the fund, which is
looking to invest in a European social
network, failed to identify a suitable
acquisition target.
Rowland blamed the difficult and
volatile economic climate and said
he is continuing to evaluate poten-
tial investments.
The fund raised 11m in the stock
market float, hoping to take advan-
tage of the expanding tech bubble
that has seen valuation of dotcom
giants rocket.
However, the market has cooled in
recent months, with Zynga, Groupon
and Facebook all delaying their
upcoming multi-billion dollar IPOs.
Meanwhile a new study suggests
the UK could face a technology skills
shortage, with less than three per
cent of graduates considering a
career in the sector, compared to 10
per cent in finance.
Jellybook struggles to find
next Facebook as it loses 1m
BY DAVID HELLIER
INSURANCE

BY STEVE DINNEEN
TECHNOLOGY

Jellybook chairman
Jonathan Rowland
says he was dis-
couraged from
making an invest-
ment by the volatile
economic climate.
Picture: Rex
Europes M&A slumps to
worst quarter since 2004
EUROPEAN mergers and acquisitions
activity fell 32 per cent in the third
quarter compared with a year ago as
volatile markets and plunging confi-
dence put dealmaking on ice, new
data yesterday showed.
Targeted M&A deal value in Europe
fell to $146.6bn (94.8bn) in the three
months to the end of September, the
lowest quarterly value experienced
since the second quarter of 2004,
according to preliminary estimates
from Dealogic.
That compares to $214.3bn seen in
the third quarter a year ago, and
points to serious weakness in senti-
ment among European chief execu-
tives amid mounting fears over the
Eurozone debt crisis.
But European M&A value rose 11
per cent to $614.4bn over the year to
date, from $552.7bn in 2010.
The UK saw the most M&A deals of
all European countries as cross-border
deals surged to a record high, but year-
to-date deal value was nine per cent
down on 2010, at $119.3bn.
Global M&A deals fell 23 per cent in
the third quarter, to $599bn.
M&A

News
16 CITYA.M. 27 SEPTEMBER 2011
PUBLISHERReed Elsevier is bolstering
its financial data business by buying
US-based Accuity for 343m.
The firm says it will combine
Accuity with its Bankers Almanac
and LexisNexis Risk Solutions busi-
nesses. It has agreed to acquire the
online subscription data provider
from Bahrain-listed investment man-
ager Investcorp.
Mark Kelsey, chief executive of
Reeds business information unit,
said Bankers Almanac and Accuity
were highly complementary.
He said: The combination of the
two companies will enable us to offer
customers much more comprehen-
sive products and services to meet
their developing needs.
Reed Elsevier said the cash deal,
which was expected to close in the
fourth quarter, would add to its
adjusted earnings from the outset.
The firm rose 2.2 per cent yesterday
despite a negative note from Espirito
Santo, which said the acquisition
seems to take Reed further away
from front office business and into a
more crowded, less proprietary field.
It posted better than expected first-
half results after seeing a revival in
subscriptions to its scientific and
health publications.
The LexisNexis Risk Solutions busi-
ness intelligence arm saw six per cent
profit growth. A spokesman for Reed
Elsevier said the firm did not use any
banks to oversee the deal.
Reed Elsevier
buys Accuity
for 343m
BY STEVE DINNEEN
PUBLISHING

GOLDMAN Sachs has agreed to invest

up to 130m in an Indian renewable
energy start-up, as the US bank looks
to cash in on the demand for energy
in the world's second-fastest growing
major economy.
It will be the single largest invest-
ment into Indias renewable energy
sector, Goldman and ReNew Wind
Power said in a statement yesterday.
ReNew, founded six months ago by
Sumant Sinha, a former chief operat-
ing officer of Suzlon Energy, the
world's fifth-largest wind turbine
maker by capacity, currently has sever-
al wind projects under development.
India is in desperate need for ener-
gy for its economy to expand and has
turned increasingly to renewables to
make up for the shortfall from con-
ventional sources.
The sector currently accounts for
six per cent of the total power mix.
ReNew plans to expand its wind
portfolio by 200-300 megawatts annu-
ally and said it expects to reach capac-
ity of one gigawatt by 2015.
Goldman has invested more than
$1.5bn in clean energy-related compa-
nies, including in Horizon Wind
Energy, part of Portugal's utility firm
EDP, and Germanys wind turbine
maker Nordex AG.
Goldman invests 130m in
Indian renewables start-up
Goldman has agreed to plough money into renewable energy firm ReNew Pic: Reuters
ANALYSIS l Reed Elsevier
p
20Sep 21 Sep 22Sep 23Sep 26Sep
505
495
485
475
497.30
26 Sept
Rio Tinto mulls spin-off
of Aussie aluminium unit
MINING giant Rio Tinto is consider-
ing spinning off part of its alumini-
um assets in Australia.
The company is understood to be
working with Macquarie Group and
PricewaterhouseCoopers on options
for its aluminium operations, which
could come under pressure if the
Australia governments proposed
carbon tax comes into force.
The miner said it would not com-
ment on market speculation yester-
day.
However, Rio chief financial offi-
cer Guy Elliott told investors last
week there were some assets in its
aluminium portfolio, which were
not aligned with its strategy.
These are assets that we would
consider divesting if it makes sense.
Of course, we would want to achieve
good value if we decided to sell
them, Elliott said.
Rios aluminium business in
Australia is made up of three refiner-
ies, three smelters and two bauxite
mines, the paper said, adding Rio
would hold onto the mines as they
offer the highest margins.
Rio last week told investors it
plans to achieve 40 per cent earnings
before interest, tax, depreciation and
amortisation margin from the alu-
minium business through the sale of
two non-specified assets.
Shares in Rio Tinto closed down
41p at 2,943.29p to value the group
at around 56bn.
MINING

BY KASMIRA JEFFORD
ENERGY

News
17 CITYA.M. 27 SEPTEMBER 2011
ALERE, the US medical diagnostics
firm involved in a 230m hostile
takeover for UK firm Axis-Shield, yes-
terday maintained its bid price but
lowered its acceptance threshold, as
it looked unlikely that the US firm
will win over enough shareholders
for a full takeover.
Alere, which had set 90 per cent
acceptance as a condition for its bid,
said it now required more than 50 per
cent of voting rights, leaving them
the option of becoming a majority
shareholder in Axis-Shield.
Axis-Shield, in response to Aleres
statement, termed the takeover
approach as highly opportunistic
and said it was disappointed that
the US firm had not taken notice of
its previous rejections.
Alere, which increased its stake in
Axis-Shield to 11.09 per cent last
week, stood firm with its 460p offer
for Axis-Shield. Alere needs 75 per
cent acceptances to delist Axis-
Shields London-listed shares.
We have maintained that we
would remain financially disciplined
and Alere is offering shareholders
460p in cash despite significant eco-
nomic uncertainty and turmoil,
Alere chief executive Ron Zwanziger.
Axis-Shield shares dived nearly 11
per cent yesterday to 405p.
Alere holds
firm on Axis
BY HARRY BANKS
M&A

AROUND three-quarters of assets

under the management of Asia-
focused hedge funds are managed by
fund managers based in the region,
up from about 60 per cent three years
ago, according to a survey by industry
tracker AsiaHedge released yesterday.
The growth is a big leap from the
year 2000, in the early years of the
industry, when half of the industrys
assets were managed by ex-Asia man-
agers, mainly those in Britain and the
United States, said Aradhna Dayal,
editor of AsiaHedge.
The survey, which showed Asia
hedge fund assets shrinking five per-
cent in the first half to $145bn
(94.5bn), said $109bn was managed
from within Asia as global funds set
up local offices and a growing realisa-
tion that Asian assets are best man-
aged locally.
Shift in hedge fund management
to Asia Pacific gains more pace
HEDGE FUNDS

BLOGGING site Tumblr said yesterday

it has raised $85m (54.6m) to help
fund expansion, in an investment
drive that values the firm at $800m.
Prominent tech investors such as
Sequoia Capital and Greylock Partners
were among those named as investors
in Tumblr, which provides a free,
photo-focused blogging platform. Sir
Richard Branson is also thought to be
among those injecting fresh capital
into the firm.
Founder David Karp said in a state-
ment that the cash allows us to con-
tinue to scale our business and give
real focus to the further development
of Tumblr.
Tumblr, set up in 2007, reported
13bn page views per month recently,
though the firm is yet to deliver a
proven revenue model.
Tumblrs new funds
value it at $800m
BY MARION DAKERS
TECHNOLOGY

LONDON & STAMFORD BUYS FLATS IN OVAL

Property firm London & Stamford said it has completed the acquisition of a residential
block near Oval, south London, for 24.4m. The company said it had exchanged contracts
with Kilmorie Investments for the long leasehold interest of 74 private residential units on
Clapham Road, a month after it bought residential block in Islington for 50m.
ANALYSIS l Axis Shield PLC
p
21 Sept 22Sept 23Sept 26Sept
440
430
460
450
420
410
405.00
26 Sept
London prime
property soars
INVESTORS fleeing from the Eurozone
turmoil are parking increasing
amounts of money in top London
property, pushing the price of prime
houses close to 4m in recent weeks.
Viewings are up by 25 per cent over
the three months to September.
The number of available properties
has risen by 13 per cent, but not
enough to keep pace with demand,
leading to a 0.6 per cent rise in asking
prices for London properties in the
more desirable postcodes, according
to research by Knight Frank.
PROPERTY

|
PROMOTION
A PHOTO-SHOOT WITH
ONE OF THE WORLDS
LEADING FASHION
PHOTOGRAPHERS,
COURTESY OF AVIVA
Terms & Conditions: Five lucky winners will be drawn at randon from all the entries and must be available on 11th October for make over and photo shoot. The promoter is Avivia and the promoter
reserves the right to change the prize to one of equivalent or greater value without notice. Entry into the promotion is free and no purchase is necessary. Entrants must be aged 18 and over. Only
one entry per reader is permitted. The closing date is 2nd October 2011 at 11:59pm. By entering the promotion you agree to receive further information and similar promotions from City A.M. and
Avivia. If you wish not to receive any further information please add No in your email . The winners, by accepting the prize, agree to publicity if required. The Editors decision is final.
WIN
Fancy having your own fashion-mag style shoot and
seeing your family portrait up in lights? Aviva has
teamed up with City A.M. to give five lucky readers
(and friend) a once-in-a-lifetime opportunity to be made
up like the stars and snapped by one of the worlds most
renowned fashion photographers, Jillian Edelstein, as
part of its You are the Big Picture campaign.
Each lucky winner will get an exclusive photo taken by
Jillian Edelstein on Tuesday 11th October as well as a
professional makeover at Avivas specially created Pop
Up Photography Studio on the South Bank. The winners
can then see their image projected onto the flytower of
the National Theatres Lyttelton Theatre later that
evening.
For your chance to win this fantastic prize, simply send
your email and contact number to:
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In addition to the promotion, anyone can get
involved in You are the Big Picture:
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People can submit photos and tell the world
what matters to them via Facebook -
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Each person will receive a unique piece of
online art: a collage of words in the shape of
their face and a personal film to share with
friends
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If they are selected at random for
projection, their photograph and message is
then projected onto the National Theatre
and streamed on YouTube for the world to
see. Each person selected will be given the
time of their moment of fame so they can
watch it in person or via YouTube livestream.
They will also receive an individual snapshot
commemorating the projection moment to
share with friends online.
For each photo and
message uploaded, Aviva
will donate 2 to Save
the Children as part of its
global Street to School
programme, which helps
street children into
education and training.
CANNON Place is set to officially
open today, marking an end to almost
four years and 200m of construction
work though the building will be
launched without a tenant.
The 400,000 square foot, eight
storey building above Cannon Street
train station is one of the only large
offices to complete in 2011, ahead of
the Shard tower in 2012 and several
years in advance of other skyscrapers.
Our plan was always to specula-
tively build. We are talking to several
parties, Mark Swetman, project
director for Cannon Place developer
Hines, told City A.M.
The parties in talks about taking
space include one financial services
firm looking to expand, while anoth-
er is a conglomerate looking to move
from an outdated building.
Its likely to be multi-let, with up
to 3,500 people in there in total,
Swetman said.
The project head said the firm is
relaxed about the spectre of the
Walbrook, Minervas office building
across the road that has stood empty
since completion in 2010.
Honestly, everyone who looks at
our building will be looking at the
Walbrook. But we have a letting void
built into the development timetable,
which we have not even come close to
the end of, he said.
We know that there is enough
demand to fill both of these buildings
up. Its a matter of when the tenants
push the button.
The building contains no columns
jutting through the floor plates, in a
bid to attract firms in need of open-
plan trading space.
The building is one of Hines first
in London, and is unlikely to be the
last Swetman says the firm views
Cannon Place as a springboard into
the capital, with more projects
already on the horizon.
Hines and its partners have spent
an additional 30m on improving the
railway station directly beneath the
new building.
Cannon Place
kicks off hunt
for tenants
Cannon Place replaces two 1960s tower blocks over Cannon Street train station
BY MARION DAKERS
PROPERTY

News
18 CITYA.M. 27 SEPTEMBER 2011
LORD Mayor Michael Bear, who ends
his 12-month tenure in November, is
due to open Cannon Place at a ceremo-
ny today.
Its designed as a suspension bridge
over the railway, which is such a feat of
engineering. It will really enhance that
corner of the City, he told City A.M.
yesterday. Cannon Place is the first
property he has formally opened during
his time at Mansion House.
The Lord Mayor said his 822 speeches,
visits to 37 cities and 20 countries dur-
ing his tenure have gone some way to
improving the image of the Square Mile
though more so internationally.
The further away from London you
get, the easier it is to promote. Here,
Ive moved from promoting the City to
promoting a better understanding of its
value for the country.
But despite recent grumblings, he says
he has seen no evidence of banks
gunning to move their operations away
from London.
On life after the
Mayorship, Bear
hinted that he
would consider
returning to
property. Im
available. Having
had the best
unpaid job
in the
world, I
would
now like
the best
paid job
in the
world.
LORD MAYOR BEAR ON THE LAUNCH
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News
19 CITYA.M. 27 SEPTEMBER 2011
BILLIONAIRE US investor Warren
Buffett has nudged up his stake in
retailer Tesco in what is being seen as
a vote of confidence in new chief
executive Phil Clarke.
Buffetts Berkshire Hathaway last
has bought around 34m Tesco shares
for about 120m, lifting its stake in
the British supermarket group to 3.64
per cent from 3.21 per cent.
Earlier this year, Buffett caused a
stir by saying he thought Tesco
should look hard at its loss-making
Fresh & Easy chain in the United
States. Clarke, who succeeded long-
serving predecessor Sir Terry Leahy in
March, has laid out a plan for the
chain to significantly reduce its loss-
es.
He has made changes such as intro-
ducing fresh bakery products and cof-
fee and testing a loyalty card as well
as triggering a price war by making
reductions on thousands of lines.
Buffett, the so-called Sage of
Omaha, has been supportive of Tesco
for some time.
His holding went past three per
cent back in 2007. Last month
Berkshire Hathaway invested $5bn
(3.2bn) in struggling Bank of
America and its share price has fallen
17.5 per cent since.
Separately the Berkshire Hathaway
board yesterday authorised the busi-
ness to buy back an indefinite
amount of its stock. It would be the
first buyback under Buffett and indi-
cated that the conglomerate may not
be enjoying the returns on its invest-
ments it had expected.
Buffett buys
another 34m
Tesco shares
STRUGGLING home shopping retailer
Flying Brands, in which entrepreneur
Sir Tom Hunter owns a stake, yester-
day confirmed the disposal of a build-
ing on the island of Jersey, as it
attempts to pay off its 1.7m banking
loan.
Jersey-based property developer JAJ
Properties has agreed to pay 2.1m in
cash and ten per cent in any eventual
development profits for the Retreat
Farm premises, which is currently
unutilised office space.
Last week the Flying Brands admit-
ted that it could breach its banking
covenants due to poor trading.
Despite only renegotiating the
terms of its loan facility in April of
this year, Hunter has seen his stake in
Flying Brands fall by 97 per cent after
the online retailer issued another
profit warning and said it might
breach its banking covenants.
Flying Brands renegotiated the
terms of its banking facilities in the
first half of its financial year despite
reporting a loss from its continuing
operations of 480,000 plus a 1.49m
loss from its discontinued businesses.
Finsbury Foods earnings
climb despite downturn
FINSBURY Foods, the UKs second
largest supermarket cake supplier,
said yesterday it saw an increase in
profits despite the economic
downturn.
The group, which
makes cakes for
We i g ht wa t c he r s ,
Thorntons and Disney,
said its underlying
profits rose by 8.3 per
cent to 5m for the year
to 2 July, after sales rose
by 12.6 per cent to
189.6m. Thorntons-brand-
ed sales jumped by 17 per cent
and Weightwatchers products gained
market share.
Finsbury said it was focused on
making its products more affordable
despite facing the rising cost of
ingredients such as butter,
sugar and wheat, where it
expects high prices to
persist or even
increase in the
future.
The firms shares
rose more than five per
cent in trading on
Londons Alternative
Investment Market yester-
day to close at 25.75p.
Flying Brands sells
off property assets
BY JOHN DUNNE
RETAIL

CONSUMER

CONSUMER

BRITISH testing firm Intertek has

announced that outgoing Tesco chair-
man David Reid will join the firm to
fill the same role next January.
Intertek, which tests products from
toys and clothes to oil and renewable
technology, said Reid, also a former
chairman of Kwik-Fit Group, would
replace Vanni Treves, who will retire
on 1 January after 10 years in the post.
Reid, 64, will join the Intertek
board as a non-executive director
from December.
The FTSE-100 listed company, which
last month posted a 14 per cent rise in
first-half profit.
Intertek used Spencer Stuart as its
headhunter.
Shares in Intertek closed up 1.8 per
cent yesterday at 20.03.
Intertek names
new chariman
as David Reid
INDUSTRIAL

David Reid said he was

delighted to be joining
Intertek and working to
build the growth and
success of the business
ANALYSIS l TESCO Plc
p
20Sept 21 Sept 22Sept 23Sept 26Sept
370
365
360
355
371.40
26 Sept
A SNAPSHOT OF HATHAWAYS PERFORMANCE IN SECOND QUARTER OF 2011
Company shareholding performance
of investment
Mastercard $122m (405,000 shares) 7.2%
General Electric $146.7m (7.8m shares) 20.8%
Procter & Gamble $4.9bn (76.8m shares) 3.9%
Kraft $3.5bn (99.5m shares) 4.9%
GSK $64.8m (1.5m shares) 5.4%
Tesco Has gained 34 pc since first investment
Bank of America Invested $5bn in Aug, shares have fallen
Sir Tom Hunter Picture: Reuters
News
20 CITYA.M. 27 SEPTEMBER 2011
BUSINESS confidence in Germany for
the coming six months has sunk to its
lowest level since June 2009, a leading
survey revealed yesterday.
The Ifo business climates expecta-
tions sub-index fell for the seventh
straight month, measuring 98 points
for September -- down from 100 last
month.
Yet the headline Ifo index -- which
also includes sentiment related to cur-
rent business conditions -- fell less
than expected, down to 107.5, from
108.7 last month.
Many economists had expected the
headline measure to sink below the
107 mark.
The sub-index that records the cur-
rent business situation was barely
down in September, suggesting that
the expected hit to the Eurozones
largest economy is yet to come.
The current situation index came in
at 117.9, down slightly on Augusts
score of 118.1.
The continuing favourable situa-
tion of companies shows that the
German economy has so far managed
to decouple from political turbulence,
the report said.
Yet the survey showed that business-
es are preparing for the worst. The
German economy could fall into con-
traction in the fourth quarter of the
year, the Organisation for Economic
Co-operation and Development
(OECD) predicted earlier in the month.
And firms are expecting a hit from
economic slowdown throughout the
world. The index measuring export
market expectations for the next six
months declined again, said Ken
Wattret of BNP Paribas. High uncer-
tainty and sharp declines in equity
prices were cited by Ifo as impacting
on companies expectations.
Nonetheless, any such downturn
should not turn into a double-dip,
according to Wattret, as industrial
firms continue to hire. Companies in
Germany still perceive that the decline
should be of a temporary nature and
not turn into a recession, he said.
German firms
downbeat on
next half year
Broadbent hints at fresh QE
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THE PROSPECT of a second phase of
quantitative easing was heightened
yesterday by a dovish speech by senior
Bank of England official Ben
Broadbent (pictured right).
The pound edged lower after
Broadbent provided a downbeat out-
look for the economy, stating: Most
importantly for policy today, the
international environment is clearly
disinflationary.
But sterling later recovered due to
rumours of a UK clearer needing to
convert dollars into sterling as part
of its quarterly dividend pay-
ment.
Yet traders are eyeing the
Bank of Englands move
towards even looser policy,
with Broadbent telling journal-
ists that he nearly voted for
more asset purchases at the
September meeting of the mon-
etary policy committee.
Broadbent took a
loyal line on the
Banks recent deci-
sions, closely echoing the sentiment
of its governor Mervyn King.
The Bank could have kept con-
sumer price index inflation
closer to its two per cent target,
Broadbent said, but defended
its loose stance. Doing so
would have meant an unac-
ceptably high cost in foregone
output and employment, he
said.
The Banks remit lends it
flexibility to tackle
inflation in the long
run, Broadbent said.
BY JULIAN HARRIS
GERMAN ECONOMY

BY JULIAN HARRIS
UK ECONOMY

NEW HOME sales fell to a six-month

low in the US last month, according
to figures released yesterday by the
Commerce Department.
The number of sales fell 2.3 per
cent, from a seasonally adjusted
302,000 in July to 295,000 in August.
That is the fourth consecutive month-
ly drop, leaving sales 6.6 per cent
below Aprils level.
More evidence of a slowdown came
from the Chicago Feds national activ-
ity index, also released yesterday.
The index declined from +0.02 in
July to -0.43 in August, indicating
below-trend growth.
Growth may remain muted even
when the recovery returns, the Feds
James Bullard said yesterday.
It is not reasonable to expect the
economy to climb rapidly back to the
2007 Q4 peak that was a bubble.
US home sales fall to a six
month low as activity dips
US ECONOMY

Chancellor Angela Merkel faces another headache from falling morale Pic: Reuters
NEWS | IN BRIEF
Cut red tape says business body
UK firms are constrained by red tape
and held back from investing, which has
a damaging effect on the economy, the
British Chambers of Commerce (BCC)
announced yesterday. The business lob-
bying group said the government should
take five steps immediately to boost the
economy. Current regulations should be
slashed and no new restrictions intro-
duced, the body said, in line with the
governments previous promises. More
quantitative easing is also needed,
according to the BCC, which wants lend-
ing for small companies and infrastruc-
ture projects to be expanded.
Italian confidence hits new lows
Consumer confidence slid in September
on the back of widespread pessimism
focused on the economic situation,
Italys official statistics agency Istat
revealed yesterday. The indicator fell to
98.5, compared with 100.3 in August
and 106.4 back in May. Sentiment with
regard to the future declined from 87.5
to 87.2, whilst the economic climate
measure fell from 70 to 67.8. The only
measures showing any improvement in
sentiment were savings future possibili-
ty, rising from -72 to -63 from last
month, and forecasts on unemploy-
ment which increased from 86 to 88.
France cuts growth forecasts
Official estimates for Frances GDP
growth in the three years to 2015 have
been cut. The government now antici-
pates growth of two per cent, rather
than 2.5 per year. Growth for 2011 and
2012 is expected to come in at 1.75 per
cent. Analysts at Barclays Capital
believe the figures still remain on the
optimistic side.
ANALYSIS l German confidence is on the decline
IFO business climate index (right-scale)
94 96 98 2000 02 04 06 08 10
100
50
-50
-100
0
120
115
110
105
100
95
90
85
80
ZEW economic sentiment indicator
News
21 CITYA.M. 27 SEPTEMBER 2011
ISAM
Rupert Douglas has joined
International Standard Asset
Management as head of European
sales, responsible for marketing ISAM
Systematic to European institutions,
distributors and consultants. Most
recently, Douglas worked for RAB
Capital, where he focused solely on
European sales.
Thomson Reuters
Ralf Roth has been appointed as glob-
al head of elektron transactions and
strategy for the Enterprise Solutions
business. Roth joins from Deutsche
Bank, where he was responsible for
product innovation and delivery for
algorithmic and high frequency trad-
ing, analytics, execution and order
management.
Inflexion Private Equity
The private equity investor has hired
Mark Williams and Florencia Kassai as
investment director. Williams joins
from Sovereign Capital Partners,
where he was an investment director,
and Kassai joins from HgCapital, where
she was an associate director.
Carbon Trust
James Smith, the former chairman of
Shell UK, has been appointed as chair-
man of the Carbon Trust. Smith
replaces Sir Ian McAllister, who steps
down after ten years as chairman.
Norton Rose
The law firm has appointed Catrina
Smith, formerly a partner in the
Employment and Incentives practice at
Linklaters, as a partner in the London
office. Smith, a specialist in employ-
ment law, acted on the insolvencies of
Lehman Brothers and Woolworths.
Santander Corporate Banking
Julian Alexander has been appointed
as regional director for the South West
of England, based in Bristol. Alexander
joins from Barclays, where he was the
head of real estate in the Midlands.
Barclays Wealth
The wealth manager has appointed
Trevor Kelham as a director and
international wealth advisor in its
Wealth Advisory division, based in
Guernsey. Kelham was most recently
managing director at Rothschild
Trust Guernsey Limited.
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
Plans for Greece
lift US sentiment
U
S stocks rose yesterday as senti-
ment swung toward hope
European officials would find a
way to cut Greeces debt and
shore up European banks.
Shares rallied to session highs in
the afternoon after a report said a
plan to leverage money from the
European Financial Stability Facility
was in the works.
Investors were reluctant to make
long-term commitments because of
conflicting reports about whether or
not European officials were prepar-
ing to take bold new action to solve
the crisis.
Given how markets have behaved
over the past two months, people are
interested in the vaguest of rumors
because any kind of action being
taken would be well-received, said
Michael Church, president of Addison
Capital in Yardley, Pennsylvania.
Markets have been highly sensitive
to European efforts to cauterise the
Eurozones credit crisis that has
Greece teetering near a default.
Last week, the Dow had its biggest
weekly loss since the depths of the
financial crisis in October 2008 while
the S&P 500 shed 6.6 per cent for the
week.
Financial shares were among the
sessions best performers, with the
KBW bank index up 5.2 percent. Dow
component JPMorgan Chase & Co
advanced 7 per cent to $31.65 while
Citigroup gained 7 per cent to $26.72.
However, gains on the Nasdaq were
limited after a report on Apple sug-
gested the tech company was cutting
back on some key orders.
Talk of plans for a 50 per cent write-
down in Greek debt and improve-
ments in the Eurozone rescue fund
buoyed the market, although
European officials called the talk pre-
mature.
A CNBC report cited a top European
official who said the plans involved
using leverage and the European
Investment Bank to buy sovereign
debt to save European banks.
The Dow Jones industrial average
ended up 272.38 points, or 2.53 per
cent, at 11,043.86. The Standard &
Poors 500 Index was up 26.52 points,
or 2.33 per cent, at 1,162.95. The
Nasdaq Composite Index was up
33.46 points, or 1.35 per cent, at
2,516.69.
The CBOE Market Volatility index
fell 4.8 per cent but remains up 24 per
cent for the month.
Apple fell 0.3 per cent to $403.17
after an analyst said the iPhone
maker was cutting orders from sup-
pliers of parts for its iPad tablet. The
tech bellwether fell as much as 3.2 per
cent earlier in the session.
A
FTER a tumultuous session,
strong financials hauled
Britains top shares into posi-
tive territory yesterday as
investors, spurred by hopes for deci-
sive action to deal with the Eurozone
debt crisis, sought out bargains in
the beaten-down sector.
The UK benchmark ended up
22.56 points, or 0.5 per cent, at
5,089.37, having vacillated sharply
between positive and negative terri-
tory from an early session low of
4,974.03 to a peak of 5,148.81.
The outlines of a Eurozone rescue
plan gave the market cause for
cheer, but with little in the way of
tangible detail, traders said further
volatility most likely lay in store.
Banks added most points to the
index, led by Barclays, up 6.8 per
cent, while part state-owned lenders
Lloyds Banking Group and Royal
Bank of Scotland both ended the ses-
sion 3.2 per cent ahead.
At the weekend, European leaders
were reported to be working on new
ways to stop the fallout from the
Eurozone sovereign debt crisis exact-
ing more damage on the world econ-
omy.
EU leaders, under pressure from
tumbling markets, might agree on
bolder steps to ring fence heavily
indebted Greece, Portugal and
Ireland.
I think whats been talked about
so far seems to have raised more
questions than answers, Joshua
Raymond, market strategist at City
Index, said.
Whilst certainly investors are
looking for any excuse to try and buy
into a market thats been very
sharply sold, I think theyre ques-
tioning a little bit whats to come.
Eurozone officials played down
reports yesterday of emerging plans
to halve Greeces debts and recapi-
talise European banks to cope with
the fallout, stressing that no such
scheme is yet on the table.
Life insurers also got a boost from
the Eurozone debt hopes which
should boost equity markets insur-
ers underlying assets, with Aviva
and Legal & General both 6.4 per
cent firmer.
We shouldnt kid ourselves that
this means were through the worst,
David Jones, chief market strategist
at IG Index, said.
The worry is, if we dont get any
definite concrete plan to add to the
talk over the weekend, we could well
see the rug pulled out from under-
neath this rally.
Precious metals miners were
among the biggest FTSE 100 fallers,
with Fresnillo and Randgold
Resources down 6.9 per cent and 2.8
per cent respectively, as the gold
price fell sharply.
Other miners suffered after cop-
per prices dropped to 14-month lows
as fears of a renewed global reces-
sion raised worries over falling
demand.
Kazakhmys and Vedanta
Resources were both left nursing
falls of 3.9 percent.
JPMorgan Cazenove sees a further
10-15 per cent downside risk for UK
miners with equity and commodity
prices moving in tandem, though it
thinks that stronger balance sheets
should support valuations above
2008/09 levels.
Integrated oils were also weaker as
a sector, with Royal Dutch Shell
down 1.5 per cent.
In Europe, the STOXX Europe 600
Banks index and Insurance index led
sectoral gainers, up 3.8 per cent and
6.4 per cent respectively, with Italian
banks including Intesa Saopaolo, up
8.3 per cent, among the top gainers.
Banks rally on hope of action
to fix the Eurozone debt crisis
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 Reckitt Benckiser Group PLC
3,500
3,400
3,300
3,200
3,100
3,000
Jul Aug Sep
p
3,259.00
26 Sept
RECKITT BENCKISER
ING rates the consumer goods group buy with a target price of 40.55. The
broker sees Reckitt as one of its top picks in the fast moving consumer goods
sector, with expected growth in developing markets set to more than make
up for stagnant performance in Europe. ING also notes that the firm has one
of the most attractive free cash flow yields in the sector, with 7.4 per cent
forecast in 2012.
ANALYSIS l Blinkx PLC
150
140
130
120
110
100
90
Jul Aug Sep
p
144.00
26 Sept
BLINKX
Goldman Sachs has initiated coverage on the video search engine with a
buy rating and a 250p target price. The firms strong technology and intel-
lectual property gives it strategic appeal, the broker says, plus it gives expo-
sure to the structural growth in the online video advertising market. Despite
the execution risk in the firms lack of scale, Goldman expects Blinkx to gener-
ate compound annual earnings growth of 60 per cent plus over three years.
ANALYSIS l Virgin Media Inc
2,000
1,800
1,600
1,400
Jul Aug Sep
p
1,569.00
26 Sept
VIRGIN MEDIA
Morgan Stanley rates the media group as overweight with a target price of
25. Following a meeting with management, the broker thinks the firm con-
tinues to transmit a positive message on its strategy. Morgan Stanley thinks
the firm has exposure to rising prices in the UK fixed line market, which cou-
pled with an ongoing buyback means investors are in line for further share
price growth.
27Jun 15Jul 4Aug 14Sep 24Aug
6,200
5,400
5,000
5,800
ANALYSIS l FTSE
5089.37
26 Sept
Linklaters
David Cheyne will stay on at the law firm as a
consultant in an active client-facing role, after
his term as senior partner comes to an end on
30 September. Cheyne joined Linklaters in
1972 and became a partner in 1980. He was
global head of the firms corporate department
from 2000 to 2005, and was elected senior
partner for a five-year term in 2006. Notable
transactions over his 39-year career at
Linklaters include BPs acquisition of Amoco,
and Vodafones acquisition of AirTouch.
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Business Features| Insight
22
CITYA.M. 27 SEPTEMBER 2011
IN 1984, the Economist asked six-
teen people to make ten-year fore-
casts of economic growth rates,
exchange rates, oil prices, and other
staples of economic prognostication.
Four of the test subjects were former
finance ministers, four were chair-
men of multinational companies,
four were economics students at
Oxford University, and four were
London dustmen. A decade later, the
Economist reviewed the forecasts
and discovered they
were, on average,
awful. But some were
more awful than oth-
ers: The dustmen tied
the corporate chairmen
for the first place, while
the finance ministers
came last.
Many other publica-
tions have conducted sim-
ilar exercises over the
years, with similarly
humiliating results. The
now-defunct magazine
Brills Content, for one, com-
pared the predictions of
famous American pundits
with a chimpanzee named
Chippy, who made his guesses by
choosing among flashcards. Chippy
consistently matched or beat the
best in the business.
NOBEL EFFORTS
Even economists who win Nobel
Prizes have been known to blow big
calls. In 1997, as Asian economies
struggled with a major currency cri-
sis, Paul Krugman New York Times
columnist and winner of the Nobel
in 2008 worried that Asia must act
quickly. If not, he wrote in Fortune
magazine, we could be looking at a
true Depression scenario
the kind of slump that 60
years ago devastated soci-
eties, destabilised govern-
ments, and eventually led
to war. Krugmans pre-
scription? Currency con-
trols. It had to be done or
else. But mostly, it was-
nt done. And Asia was
booming again within
two years.
PROMISED JETPACKS
Pessimists have no
monopoly on fore-
casting flops, howev-
er. Excited
predictions of the
amazing technologies to
come Driverless cars! Robot maids!
Jet packs! have been dazzling the
public since the late nineteenth cen-
tury. These old forecasts continue to
entertain today, though for quite dif-
ferent reasons. And for every bear
prophesying blood in the stock mar-
kets, there is a bull who is sure
things will only get better. The
American economist Irving Fisher
was one. Stock prices have reached
what looks like a permanently high
plateau, the esteemed economist
assured nervous investors. I do not
feel there will soon be, if ever, a 50 or
60 point break from present levels,
such as they have predicted. I expect
to see the stock market a good deal
higher within a few months. That
was October 17, 1929. The market
crashed the following week. But that
crash was none of Britains concern,
the legendary John Maynard Keynes
believed. There will be no serious
consequences in London resulting
from the Wall Street Slump, Keynes
wrote. We find the look ahead
decidedly encouraging. Shortly
afterward, Britain sank with the rest
of the world into the Great
Depression.
Reprinted with permission. Future
Babble: Why Expert Predictions Fail and
Why We Believe Them Anyway by Dan
Gardner (Virgin Books, 11.99).
Prophets and loss: why forecasts fail
Two edited extracts from Dan Gardners
book on prediction, Future Babble, find
chimps outdoing expert prognosticators
WHY CANT WE predict the price
of oil? Thats the wrong question.
What we should ask is, in a non-lin-
ear world, why would we think oil
prices can be predicted. Practically
since the dawn of the oil industry in
the nineteenth century, experts
have been forecasting the price of
oil. Theyve been wrong ever since.
And yet this dismal record hasnt
caused us to give up on the enter-
prise of forecasting oil prices.
Vast numbers of intelligent peo-
ple continue to spend their days
analysing data and crafting fore-
casts that are no more likely to be
right than all those that came
before. Nassim Taleb, author of The
Black Swan, recalled giving a lec-
ture to employees of the U.S. govern-
ment about the futility of
forecasting. Afterward, he was
approached by someone who
worked for an agency doomed, like
Sisyphus, to do the impossible. In
January, 2004, his department was
forecasting the price of oil for 25
years later at $27 a barrel, slightly
higher than what it was at the time.
Six months later, around June 2004,
after oil doubled in price, they had
to revise their estimate to $54,
Taleb wrote. It did not dawn on
them that it was ludicrous to fore-
cast a second time given that their
forecast was off so early and so
markedly, that this business of fore-
casting had to be somehow ques-
tioned. And they were looking 25
years ahead! That 25-year predic-
tion was actually modest. The inter-
national Energy Agency routinely
issues 30-year forecasts.
In 2005, as oil prices climbed
steadily and sharply, Steve Forbes,
publisher of Forbes magazine, said
it was a bubble that would soon
pop. Ill make a bold prediction, he
said. In 12 months, youre going to
see oil down to $35 to $40 a barrel.
The price kept rising. By 2007, a new
consensus had emerged: oil was
going higher. And it did. In the first
half of 2008, oil pushed above the
previously unimagined level of $140
a barrel. The Age of Oil is at an end,
declared environmental writer
Timothy Egan in the New York
Times, echoing, whether he knew
it or not, M.King Hubberts decla-
ration thirty-five years earlier.
Experts who had led in fore-
casting the rising trend
became media stars, quoted
everywhere, and what they
had to say was not good:
The price would continue
to climb. It will break the
$200 mark soon, pre-
dicted Arjun Murti at
Goldman Sachs. Jeff
Rubin, the
chief econo-
mist at CIBC
W o r l d
Ma r ke t s ,
agreed. Its
going to go
higher. It
might go
way high-
er, invest-
ment banker and energy analyst
Matthew Simmons said on CNBC.
Its not going to collapse. Simmons
said that in July 2008, when oil was
selling at $147 a barrel.
It didnt go higher. In September
2008, financial markets melted
down, precipitating a dramatic
slowing in the global economy. The
experts hadnt foreseen that. The
decline in growth drove down
demand for oil. By December, oil
traded at $33 a barrel. If any analyst
had made that call six months earli-
er, when the price was more than
four times higher, he would have
found himself out of a job.
Maybe the era of Mad Max
really is coming, finally. Or
maybe cheap oil will rise
from the dead once again.
Or maybe new technolo-
gies will surprise us all and
create a future quite
unlike anything we imag-
ine. The simple truth is no
one really knows, and no
one will know until the
future becomes present.
The only thing we can
say with confidence is
that when that time
comes, there will be
experts who are sure
they know what the
future holds and peo-
ple who will pay far
too much attention
to them.
Reprinted with
permission.
To understand the future of oil, ask the right question
Better than some
finance ministers
23
CITYA.M. 27 SEPTEMBER 2011
In association with
Zurich Insurance plc
Business Features
WORKING WITH
INSURERS CAN
CUT OUT FRAUD
SCOTT CLAYTON
UK CLAIMS FRAUD & INVESTIGATIONS
MANAGER, ZURICH INSURANCE
D
AY in day out, we hear about the impact of fraud
on the personal insurance market. The industry-
led Insurance Fraud Bureau (IFB) was formed to
work on this area specifically and their hard work,
alongside insurers has really helped to bring the issue to
the forefront of peoples attention. Indeed, we all pay for
it as undetected general insurance claims fraud total
1.9bn a year and add an average of 44 to our motor
insurance premiums each year.
But what about corporate fraud? Zurich has been in
the corporate insurance market for nigh on 90 years
and so we have developed expertise across the busi-
ness into what makes business work, but also, what
stops business working. Criminal and fraudulent activi-
ty is rife across many aspects. We see particular issues
in small businesses and sole traders with claims for
things like arson, malicious damage, escape of water
and theft. Many wholesale and other businesses are
facing similar financial pressures, particularly with the
slowdown of the property market (difficult to sell or
rent premises), the reduction in public spending and
increased running costs. We also see what we call
underwriting fraud cases of deliberate misrepresen-
tation or non-disclosure as customers look to reduce
their premiums by falsely representing key facts. And
then theres fraud linked to employees claiming for
injuries or illnesses allegedly caused by the workplace
or work practices; occupational disease fraud.
So what are we doing about all this? At Zurich were
investing in fraud and working very closely with the
police authorities as we have a policy of always prose-
cuting cases we uncover. Therefore the more resourced
we are to identify it at source, the more we can pass to
the police and any saved costs can be passed onto our
customers. Weve created a new network evaluation
team to really analyse some of the flags raised across
our business. We have a fraud ring handling team to
handle the bigger cases and an occupational disease
centre, which is leading a counter fraud initiative to
identify the fraudulent activity that is prevalent in that
sector. That initiative alone has resulted in a fivefold
increase in cases where fraud has been detected.
So, were aware of all these things, but are you?
Have you considered these aspects in your workplace
or business? How much could you be saving by work-
ing with your insurer to crack down on these issues?
It could end up saving you both money and stress in
the long run.
If you suspect any form of insurance fraud, call the
IFB Cheatline on 0800 328 2550.
Defending wholesalers
Often disparaged as providing no added value middlemen are vital
for a country to flourish and recover from disasters, says Philip Salter
W
holesalers are the middle-
men that oil the wheels
of commerce integral
for national and interna-
tional economic coordination, and
crucial for the growing wealth of
nations. Particularly maligned
when supplies are disrupted,
wholesale businesses are also vital
to the recalculation necessary to
deal with change.
ECONOMIC COORDINATION
Complex economic coordination is
a wonder of human civilisation. In
the book If We Can Put a Man on
the Moon, Deloittes William D.
Eggers and Scudder Kempers John
OLeary ask the question: Who is
in charge of getting the right num-
ber of chickens to Manhattan every
day? After all, few chickens live
there, but a lot of chickens get
eaten there. The answer is that
nobody is in charge: When it
comes to the essence of the chicken
delivery system how much chick-
en, of what kind, at what price it
is the invisible workings of supply
and demand that align the produc-
tive activities of a loose network of
thousands of people (and compa-
nies) in making sure New Yorkers
get their chicken potpie, chicken
vindaloo, and extra-spicy buffalo
chicken wings. Middlemen are the
reason New York isnt full of farm-
ers travelling in from the country-
side every day, chickens in hand,
visiting restaurants in an attempt
to offload their produce.
Wholesalers make supply chains
cheaper and more efficient.
BETTER THAN GOVERNMENTS
Hubristic central planners through-
out the ages have assumed that
they can employ resources better
than middlemen. The nineteenth-
century economist Frdric Bastiat,
in section six of his famous essay
What Is Seen and What Is Not Seen,
exposed the fallacy of this belief.
Bastiat defended the profiteering
of middlemen, precisely because
unlike government officials they
are directed by the comparison of
prices, distributing food beginning
always at the highest price, that is,
where the demand is the greatest.
Bastiat wrote: It is impossible to
imagine an organisation more
completely calculated to meet the
needs of those who are in want.
It is not just man-made interven-
tions that can impede the market
process natural disasters can
cause havoc too. Richard McIntosh
of Inverto says: Geopolitical, social
and natural events are occurring all
the time. He adds procurement
functions are dealing with supply
chain disruption on an ongoing
basis, from civil unrest in Egypt,
natural disasters such as ice-storms
on the eastern seaboard of the US
or to give an example more closer
to home, the rapid emptying of
supermarket shelves from the fuel
blockades of 2007. In these circum-
stances, the profit motive of mid-
dlemen finds solutions.
MANAGING COMPLEXITY
Complex supply chains bring chal-
lenges for producers, wholesalers
and retailers. According to Coolin
They want be a
part of it: New
York, New York
Picture: Alamy
Desai, who is Head of UK
Transportation & Logistics at PwC:
The supply relationships between
producers, suppliers and con-
sumers have become more com-
plex and more accident-sensitive in
the last few years. PwC estimates
that currently 90 per cent of the
worldwide trading volume is con-
centrating on about 39 gateway
regions. As such, Desai says, if only
a single one of these hubs fails, the
economic consequences could be
enormous after just a short period
of time, and affect most economies
around the globe. He notes that
last years volcanic eruption in
Iceland caused a ripple effect across
the world, with the airline industry
losing around $1.7bn in revenues,
when over 100,000 flights were can-
celled in six days. Added complexi-
ty pushes businesses to change.
Emma Scott of the Chartered
Institute of Purchasing and Supply
(CIPS) says: The very nature of
these events are that they are
unpredictable in their location as
well as in their timing. She relates
the example of AstraZeneca, which
had a data centre in Mumbai that
was disrupted by the terrorist
attacks in 2008. Their backup plant
was on a small Indian coastal town
and all business was switched over
within hours. However, within
days this site was hit by a freak tidal
wave flooding the whole town. For
Scott, the calculation facing busi-
nesses is: When does your invest-
ment outweigh your risks? Failure
is inevitable, but risk is better taken
by businesses than governments. Seeking out all the loungers and idlers Picture: Getty
24
The Forum
CITYA.M. 27 SEPTEMBER 2011
T
HERE was quite a bit of excitement in
the media and financial markets over
the weekend. The hot news was that
Eurozone leaders, on the sidelines of
the G20 summit, forged a new grand scheme
to save the embattled euro. The plan, we
were told by some, would be announced
within days. Alas, details are still thin on
the ground and talk of an imminent deal
looks wide of the mark. So whats the fuss
about? The key proposal would see the
Eurozones undersized bailout fund, the
European Financial Stability Facility (EFSF)
topped up through a complicated scheme
involving the balance sheet of the European
Central Bank (ECB). This would increase the
funds lending capacity to around 2 trillion,
allowing it to contain a Greek default, by
providing a much needed backstop to Italy
and Spain, as well as covering the recapitali-
sation needs of Europes banks. EFSF funds
would be used to cover the first 20 per cent
of any losses the ECB makes on purchases of
government bonds or the recapitalisation of
European banks. The proposal gets good
marks for creative thinking, acknowledging
that an orderly Greek default is the pre-
ferred option and attempting to address
Europes unhealthy banking system.
Unfortunately, the proposal is also a non-
starter.
Firstly, the plan would require a radical
reworking of the EFSF framework, since it is
not designed to be leveraged or be subordi-
nate to the ECB in terms of covering losses.
Remember, following a deal agreed in July,
most of these countries are still scrambling
to get a more moderate boost to the EFSF
past national parliaments, which are becom-
ing increasingly resistant to what they see as
a potential blank cheque.
Secondly, using the ECBs balance sheet to
top up the EFSF would further expose the
former to even more risky debt. As of August
this year, the ECB was leveraged around 25
times with an exposure of around 510bn to
the peripheral Eurozone economies with
much of this debt being of very dubious
quality. It faces potentially hefty write-downs
should a Eurozone country actually default
(it remains unclear how these losses would
be covered).
In theory, the ECB has an unlimited capac-
ity to lend, and can even do so to some
extent without triggering inflation, due to
control over future money supply. But this is
where politics kick in. By effectively merging
its balance sheet with that of a government-
run institution, the EFSF, the ECB would
fully enter the domain of fiscal policy. This is
critical for a number of reasons. The ECBs
freedom to act without political influence
affords it the trust of financial markets, and
allows it to effectively transmit monetary
policy, including managing inflation expec-
tations. It was on this premise that the sin-
gle currency was sold to the German
electorate in the 1990s the ECB was going
to be the heir to the trusted Bundesbank. As
former European Commission President
Jacques Delors once famously observed, Not
all Germans believe in God, but all Germans
believe in the Bundesbank. In contrast, a
growing number of Germans now view the
ECB with growing suspicion, as was seen in
the dramatic resignation last month of
Juergen Stark, the German representative on
the ECBs executive board, allegedly over the
banks decision to start buying Italian and
Spanish government bonds. One step fur-
ther, and German support for the entire
euro project could start to diminish.
This links with another crucial question:
who, exactly, is in charge? The advantage of
using the ECB as lender of last resort for the
Eurozone is that it can act quickly without
seeking a democratic mandate from voters,
which is a slow process. Combined with its
capacity to massively expand its balance
sheet, this is one of the reasons why the ECB
is, in theory, the one institution that can
move markets. But since it hinges on EFSF
loans, the proposal discussed over the week-
end would presumably still be subject to
approval by each member state (and various
national parliaments), meaning that we
would be stuck with the same political bot-
tlenecks as now.
There are also, it should be said, familiar
economic risks involved. Leveraging the
EFSFs lending capacity, which is mostly
backed by six triple-A states, could negatively
impact on the credit ratings of the member
states, most notably France (through contin-
gent liabilities). This could lead to a vicious
circle, with the rating of the EFSF suffering a
corresponding blow.
Not much of a surprise then, that politi-
cians and central bankers in triple-A coun-
tries have lined up to criticise this proposal,
with Bundesbank president Jens Weidmann
saying: If [the EFSF were to finance govern-
ment bond purchases] through the central
bank, it would be monetary state financing.
Whether you do it directly or whether you
do it via the detour of a special purpose vehi-
cle makes no difference economically.
Whats positive about the apparent
change in mood over the weekend is that
Eurozone leaders are beginning to realise
that without a restructuring of Greeces, and
possibly some other countrys debts, and
proper recapitalisation of European banks,
theres absolutely no way out of this crisis.
But proposals need to be rooted in political,
legal and economic reality. Otherwise, the
huge gap between what markets demand or
expect, and what politicians can deliver, will
grow ever wider and the rollercoaster ride
will continue.
Mats Persson is the director of Open Europe.
The ECB is leveraged around
25 times; 510bn is in the
Eurozone peripherys debt
The euro rollercoaster isnt
over: The new plan to save
it is a complete non-starter
cityam.com/forum
MATS PERSSON
25
A pearl-handled
revolver for the
Labour leader if
he isnt on form
Red Ed needs the
speech of his life
to survive today
I
T IS RARE that a party leader of just
twelve months standing is faced with
making a speech that is considered to
be make-or-break for his future
prospects. But that is exactly the position
facing Ed Miliband as he delivers his Labour
conference speech in Liverpool today.
A strong summer performance on phone
hacking cannot mask a string of polls where
he consistently trails David Cameron by 10 to
20 per cent in respect of perceived leader-
ship capabilities. That the Labour Party is
marginally ahead in most polls of voting
intentions suggests its slender lead exists
despite Miliband, not because of him.
The root of Milibands difficulties is of
course the 156bn UK government borrow-
ing in 2009/10. Even if the public were in the
mood to forgive and forget such a large
deficit (which they are not), Miliband and
his shadow chancellor Ed Balls have strug-
gled to articulate how they would tackle the
current financial crisis if they were in power.
So while borrowing remains extremely high
this year, a double dip recession is a strong
possibility, and public spending cuts remain
deeply unpopular, Miliband has been unable
to capitalise on the coalitions woes.
Milibands other major problem is,
Miliband. So far as they are aware of him,
significant numbers of respondents to opin-
ion polls just do not warm to him and can-
not envisage him in 10 Downing Street.
Words like nerdy and geeky tend to
emerge quite quickly. To many, he simply
does not have the communication skills of
David Cameron, the kind you need to be a
Prime Minister.
So today in Liverpool Miliband will seek to
build his reputation as competent, likeable
and trustworthy. His pitch is to middle
England particularly voters in the south
and the Midlands who have deserted Labour
in droves. He understands that economic
insecurity is a major concern for the British
people, hence his repeated references to the
squeezed middle.
A senior Labour figure said at the weekend
we dont need to shout louder, but explain
more. Explain what we got right and wrong
before the crash, explain how we would get
the economy growing and so deal with the
deficit, and explain how we will deal with
social justice with less money around. No
doubt this is true, but it is highly unlikely
that Miliband will be able to tick all those
boxes in one go. His speech today will not set
out the manifesto that Labour intends to
fight the next election upon, although there
may be some eye-catching policies on energy
and higher education. Overall, his task is to
try to convince a sceptical public that he
shares their worries and has credible ideas to
do something about them.
If Miliband can do this, perhaps he can
move to the foothills of the mountain he has
to climb between now and May 2015. But he
will have to make quick and steady progress
if he is to prevent a pearl-handled revolver
being passed his way.
Phillip Snape is the managing director of PSA
Communications. www.psauk.com.
Rating the OBR
Dagong Global Credit cut the
UKs credit rating in May. The
cut came with a revision of the
UKs growth forecast to 1.3-1.5
per cent this year, rather than
the 1.7 per cent predicted by the
Office for Budget Responsibility.
The IMF just revised its UK
growth forecast to 1.1 per cent,
even lower. How come the OBR
are less informed of the state of
our domestic finances than
Beijing-based analysts?
Ibukun Adebayo
Unfair exchange
Recent Consumer Focus research
shows many pay high fees on for-
eign exchange. We find people
think being charged 10 for a 5
sandwich on a credit card feels
wrong and they increasingly want
alternatives. Innovative solutions
like ours provide transparency and
help cut out the middleman. Banks
shouldnt be embarrassed to dis-
close their margin on the true, ver-
ifiable mid-market FX rate.
Kristo Kaarmann,
CEO, TransferWise
Speak your mind
The Forum is open for you to
take part. Got a sharp comment
on one of todays columns or
rapid response topics? Do you
have another subject relating to
business and the economy you
want to share your opinion on?
We want to hear your views.
Readers are invited to comment
on the web: cityam.com/forum;
by email: theforum@cityam.com;
and on Twitter: @cityamforum.
The best responses will be
reprinted in The Forum.
RAPID RESPONSES
In association with
PHILLIP SNAPE
BY ANTHONY J. EVANS
CITYA.M. 27 SEPTEMBER 2011
The Forum
B
ARACK Obama
realises that
the key to keep-
ing his own job
is to start creating
them for other peo-
ple. The US unem-
ployment figures are
high (above 9 per
cent), sustained (the
recession officially ended almost two years
ago), and deepening (half of the unemployed
have been out of work for more than 6
months). His $447bn American Jobs Act
intends to create jobs through a mixture of tax
cuts, public works, and training programmes,
but is severely flawed.
The UK is facing a similar problem to
America, with unemployment rising from 5
per cent at the beginning of 2008 to almost 8
per cent in the summer of 2009, staying at that
level until now. Why has unemployment
remained so persistent?
Some economists will point to a collapse in
aggregate demand a lack of spending that is
keeping output below its full employment rate.
Some will focus on the supply side the regu-
lations that make it prohibitively costly to hire
new workers, or a deficiency of the right skills.
Others might stress expectations, and how it is
unlikely that firms will make long term hiring
decisions based on temporary policy changes.
All of these views are important, but theres
another to consider.
Part of the problem is looking at the unem-
ployment rate itself of trusting the ability of
a single, aggregate figure to summarise the
entire labour market. This masks the mecha-
nisms of change, the complex process by
which some jobs become outdated and unpro-
ductive, while others emerge to take their
place. Bundling all jobs together implies that
they are comparable, or that they are homoge-
nous. But hiring is an investment decision.
Workers have their own unique abilities and
aspirations, and are better suited to some tasks
than others.
The puzzle is not why unemployed people
dont take the first available job they can find,
but as economist Steve Horwitz has stressed
what factors are blocking the creation of the
complementary capital goods required to fit
together with human capital as profitable
entrepreneurial plans. That is harder to solve.
And as economic development increases spe-
cialisation, it makes the matching of workers
and jobs even more complex.
This might all sound a little abstract after
all, arent the jobs being subsidised by govern-
ment often in low-skilled industries where
labour is relatively homogenous? Perhaps, but
things like construction projects take time to
come to fruition, and the employment of low
skilled workers occurs late in that process.
Obamas jobs plan assumes that any job is
better than no job that the goal of public pol-
icy should be to employ idle resources. But
resources are never idle. Regardless of whether
they are in use they are performing an impor-
tant economic function, and it is costly to put
them to the wrong use. The challenge isnt to
create more jobs, but to create the right type.
Policymakers are facing a coordination prob-
lem, not an unemployment problem.
Anthony J. Evans is associate professor of economics at
ESCP Europe Business School in London, and Fulbright
scholar-in-residence at San Jose State University. His web-
site is www.anthonyjevans.com.
Creating the right jobs
is harder than it looks
Email: theforum@cityam.com
Twitter: @cityamforum
Wealth Management| Contracts for Difference
26
Kicking the Eurozone
can down the autobahn
A
NYONE hoping that last weeks FOMC statement
would help to calm markets has been bitterly dis-
appointed. On Wednesday, the US Federal Reserve
announced that it plans to sell $400bn of short-
term debt and buy $400bn of longer-dated Treasury
bonds. This operation is designed to put a lid on longer-
term interest rates while keeping the size of the Feds bal-
ance sheet unchanged. While this was pretty much as
expected, the plunge in stocks, oil and precious metals
shows that investors were hoping for more. An additional
round of outright asset purchases would have sent the
dollar lower while putting a floor under stock and com-
modity prices.
The Fed chose to keep its powder dry for now, and the
next FOMC meeting is in early November. But rather
than assume that additional quantitative easing has sim-
ply been postponed for six weeks, investors now fear
that the Fed is anxious to keep something in reserve in
anticipation of further economic shocks. There were also
concerns that three members of the FOMC voted against
the monetary policy action saying that they didnt sup-
port additional policy accommodation at this time.
These are the same members who dissented against the
August decision to announce that the federal funds rate
would be kept low until mid-2013 at the earliest.
So the markets got what they expected, but not as
much as they hoped. Equities fell sharply, giving back all
the gains made in the run-up to the FOMC statement.
But the biggest shock has been the collapse in precious
metals. The initial sell-off could be explained as a reaction
to the soaring US dollar. As the Fed wasnt about to print
money to purchase Treasuries, the greenback flew high-
er, undermining dollar-denominated commodities. But
the selling turned into a rout as leveraged investors
bailed out of their long positions. Gold and silver were
caught up in the de-risking as investors sold indiscrimi-
nately in a desperate rush to raise cash.
There is plenty of anecdotal evidence that demand for
physical gold and silver is strong. But chart-wise, many
significant support levels have been smashed. While
owners of the physical metals can take this volatility in
their stride, many leveraged buyers will wait until they
judge that selling has reached exhaustion point.
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Y
ESTERDAY saw more volatility in
the markets triggered by a mix-
ture of the weekends announce-
ments and by bargain-hunters
going shopping in the equity markets hop-
ing to snap up stocks that they saw as
being oversold.
At the weekend, Christine Lagarde led
an IMF summit, warning that the $384bn
(248bn) earmarked as an emergency bail-
out fund is not sufficient support for the
Eurozones troubled periphery nations.
This summit came hot on the tail of
suggestions that European policymakers
were planning to boost the European
Financial Stability Facility (EFSF), by
increasing the capital available from
440bn to 780bn and leveraging this cap-
ital to as much as 3 trillion. But the
chances of an increase in funding for the
European bailout fund hangs upon the
outcome of the EFSF expansion ratifica-
tion vote to be held in Germany on
Thursday a vote which could have a big
impact on European and world markets.
An early sign of the volatility expected
in the markets in the coming weeks was
summed up by an announcement made
by the CBOE Futures Exchange. It
announced that the futures contract
opening time for the the CBOE Volatility
Index (Vix), often dubbed the Fear Index
would be moving from 7:20 am to 7 am,
pending regulatory approval. It
announced that: The earlier opening
offers market participants more time to
establish or offset Vix futures positions
surrounding potential market-moving
events overnight news, banking actions
or key economic reports before the gen-
eral market opens.
Craig Drake asks
four experts for
their assessment of
what will come next
in the debt crisis
Many European leaders hope this will solve the European debt crisis Picture: Alamy
20 Sep 21 Sep 22 Sep 23 Sep 26 Sep
42
38
34
ANALYSIS l Volatility Index (Vix)
41.81
26 Sept
27
CAPITAL SPREADS
ANGUS CAMPBELL
When things are really starting to get into a wor-
rying state, little warning signs emerge. The first is
that risk assets take a big hit and the second is that
safe havens see an influx of capital. Some of the riski-
er assets like commodities and equities have seen
substantial corrections in recent weeks and only yes-
terday gold saw a mass sell off. It may traditionally
be considered a safe haven but it is susceptible to
sharp sell offs just as any other asset is.
The ultimate safe haven is the US dollar, which has appreciated some 7
per cent in the past few weeks alone and this is the other alarm bell. Similar
moves happened in the run up to and after Lehman Brothers, so investors
should beware of another possible collapse in the markets.
The problem with the European situation is that politicians are shutting
the stable door well and truly after the horse has bolted. Confidence is shot
to pieces, inflation is still ravaging real incomes both of which are things
that are not conducive to a growing global economy. The future is bleak Im
afraid, even if political leaders have just woken up to the gravity of the situa-
tion.
ACCENDO MARKETS
MICHAEL VAN DULKEN
I see the political wrangling and time-wasting con-
tinuing, and this lack of urgency to take harsh, but
ultimately essential decisions is a real worry. The
longer this persists, the more confidence can leak
from the key but undercapitalised European banking
sector, and thus the region itself. With bank shares
having taken a real savaging, how much more can the
sector take? A gloomy economic outlook doesnt help.
In the case of a double-dip, Germanys reputation as the regions backbone
would be of little help.
While fears remain, the euro could fall back to $1.29 against the dollar.
Preference for the greenback, combined with lower industrial demand, would
also likely continue to weigh on commodities, including the safe-haven metals.
Contagion is the fear, but the powers that be seem unconcerned by their
own pedestrian pace of progress. On the flip side, this slow pace has meant
increased speculation and heightened volatility, both of which appeal to short-
term traders. I see Greece getting its next tranche of aid. However, without
any real progress elsewhere, well likely be discussing direction again come the
middle of next quarter. Actions speak louder than words.
SPREADCO
IAN OSULLIVAN
Traders returned to their screens Sunday night to
find the euro rally initially hit resistance around the
$1.355 area. Almost as soon as the Asian markets
opened in earnest though, it was downhill all the way
to lows of $1.336, as traders once again fretted about
the perilous state of the Eurozone.
The reports coming from the meetings of the IMF
in Washington over the weekend suggested the US
and other major nations pressed European leaders to increase the effective
size of their 440bn rescue fund to perhaps trillions of euros by borrowing
against it. Germany is reluctant to add any more funding to the EFSF, so this
attempt to leverage the fund in an attempt to ward off a deeper crisis in
Europe seems to be the latest attempt at a solution.
Some are saying an orderly default for Greece is inevitable. It looks like
traders are treating these plans with a degree of cynicism until a full plan is
delivered, and the euro remains under pressure. $1.340 is an important line in
the sand in euro-dollar. But should the situation worsen for Greece or indeed
if the dollar rally continues then we could see euro-dollar plunge as far as
$1.300 the lows of last November and January before long.
THE TIPSTER
YOU CAN DO IT
SHORT THOMAS
COOK FOR A BIT
is unlikely to deliver any positive
sentiment. Current IG Markets
price is 36.95p-37.11p
A big focus has been on gold
and the tumble it has taken, but
let's not forget silver either. In
line with its sibling, it has seen a
sharp decline from over $40 last
week, to as low as $26. The
trend is pointing down and
momentum is strong, so the
bears could certainly be out for
now. Capital CFDs quotes
December Silver $28.74-$28.77.
Defensive play Centrica goes
ex-dividend on Wednesday so
those income-hungry investors
might want to take advantage
of a 4.3p payout. Capital CFDs
quotes a price of 292.0p-292.5p
for the stock which has drifted
around the 3 mark for some
time now.
Burberry shares have fallen
some 15 per cent in a week since
breaking above the 15 level
again. The pull back may be
overdone and it is getting sup-
port from trend lines around
12.75-13. Look for Burberry
to check its fall and cap the
week off with a return towards
the 13.50-14 level. Spread Co
offers a spread on Burberry of
1,308.1p-1,311.2p.
Philip Salter
W
ITH Thomas Cook set
to serve up results later
in the week, its difficult
to see much cheer for
the industry against the current
economic backdrop. The company
has already revised down guidance
for the full year and even the
prospect of plummeting oil prices
IG INDEX
CHRIS BEAUCHAMP
This weekends summit in Washington produced
little more than a lot of empty rhetoric, leaving the
Greeks still teetering on the very edge of default
with just such an outcome now looking increasingly
likely. Thursday sees the German vote over the latest
changes to the EFSF and although this will probably
manage to claw its way through, the growing ranks
of Germans utterly disillusioned with more of their funds being thrown into a
seemingly bottomless pit in Athens suggests again that this route cant have
that much longer left to run. Add to that the fact weve got the risk of anoth-
er sovereign downgrade hitting one of those too big to fail nations like
Spain or Italy and we have another trigger that could serve to reignite the
crisis. Will Greece receive its next tranche of bailout funds? With the Troika
still to get back on the ground, safe havens like the greenback, US Treasuries
and German Bunds will all remain popular since any resurgence in risk
appetite is likely to be temporary at best. Eurozone politicians may have given
themselves six weeks to resolve the crisis, but markets may not wait that
long.
LON GD ONCE FIX AM...........1615.00 -115.00
SILVER LDN FIX AM ..................29.81 -3.01
MAPLE LEAF 1 OZ ....................32.55 1.02
LON PLATINUM AM................1542.00 -153.00
LON PALLADIUM AM...............628.00 -37.00
ALUMINIUM CASH .................2169.50 -56.00
COPPER CASH ......................7280.00 -510.50
LEAD CASH...........................2045.00 -120.00
NICKEL CASH......................17920.00-1580.00
TIN CASH.............................19095.00-1055.00
ZINC CASH ............................1941.00 -40.50
BRENT SPOT INDEX................105.11 -1.67
SOYA .....................................1258.00 -25.00
COCOA..................................2634.00 -46.00
COFFEE ......................................0.00 0.00
KRUG.....................................1665.20 -80.20
WHEAT ....................................156.88 0.25
AIR LIQUIDE........................................85.28 0.91 100.65 80.90
ALLIANZ..............................................65.01 5.99 108.85 56.16
ANHEUS-BUSCH INBEV ....................38.74 0.83 46.33 33.85
ARCELORMITTAL...............................11.57 0.10 28.55 10.47
AXA........................................................8.98 0.68 16.16 7.88
BANCO SANTANDER...........................5.92 0.19 9.67 5.15
BASF SE..............................................45.40 1.13 70.22 42.19
BAYER.................................................41.10 1.68 59.44 35.36
BBVA......................................................5.89 0.22 10.19 5.03
BMW ....................................................50.80 -1.38 73.85 47.49
BNP PARIBAS.....................................26.33 1.01 59.93 22.72
CARREFOUR ......................................15.76 0.28 36.06 14.66
CRH PLC..............................................11.00 0.33 17.40 10.28
DAIMLER.............................................32.15 -0.26 59.09 30.93
DANONE..............................................44.99 1.32 53.16 41.92
DEU.BOERSE OFFRE ........................39.72 0.72 55.75 37.03
DEUTSCHE BANK..............................25.12 2.00 48.70 20.79
DEUTSCHE TELEKOM.........................8.46 0.24 11.38 7.88
E.ON.....................................................15.35 0.79 25.54 12.50
ENEL......................................................3.02 0.11 4.86 2.81
ENI .......................................................12.54 0.17 18.66 11.83
FRANCE TELECOM............................11.72 0.22 17.45 11.12
GDF SUEZ ...........................................21.03 0.84 30.05 18.32
GENERALI ASS...................................11.46 0.61 17.05 10.34
IBERDROLA..........................................4.88 0.14 6.50 4.29
INDITEX ...............................................65.20 1.69 66.37 50.92
ING GROEP CVA...................................5.00 0.43 9.50 4.21
INTESA SANPAOLO.............................1.10 0.08 2.53 0.85
KON.PHILIPS ELECTR.......................13.25 0.79 25.45 12.01
L'OREAL..............................................72.17 0.95 91.24 68.83
LVMH..................................................104.85 -0.60 132.65 97.67
MUNICH RE.........................................85.63 5.65 126.00 77.80
NOKIA....................................................3.97 0.05 8.49 3.33
REPSOL YPF.......................................18.93 0.25 24.90 17.31
RWE.....................................................25.84 1.69 55.88 21.22
SAINT-GOBAIN...................................27.57 0.20 47.64 26.07
SANOFI ................................................48.10 1.11 56.82 42.85
SAP......................................................36.40 0.58 46.15 32.88
SCHNEIDER ELECTRIC.....................37.89 0.30 61.83 35.94
SIEMENS .............................................66.41 0.88 99.39 62.13
SOCIETE GENERALE.........................17.55 0.91 52.70 14.32
TELECOM ITALIA..................................0.78 0.02 1.16 0.70
TELEFONICA ......................................13.83 0.36 19.69 12.50
TOTAL..................................................31.32 0.47 44.55 29.40
UNIBAIL-RODAMCO SE...................127.65 0.75 162.95 124.05
UNICREDIT............................................0.72 0.04 2.03 0.64
UNILEVER CVA...................................23.12 0.27 24.08 20.82
VINCI ....................................................30.90 0.12 45.48 29.49
VIVENDI ...............................................14.80 0.04 22.07 14.10
VOLKSWAGEN VORZ ......................101.55 -2.25 152.20 81.80
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5089.37 22.56 0.45
FTSE 250 INDEX . . . . . . . . 9839.24 23.74 0.24
FTSE UK ALL SHARE . . . . 2637.46 10.48 0.40
FTSE AIMALL SH . . . . . . . . 707.17 -11.26 -1.57
DOWJONES INDUS 30 . . 11043.86 272.38 2.53
S&P 500. . . . . . . . . . . . . . . . 1162.95 26.52 2.33
NASDAQ COMPOSITE . . . 2516.69 33.46 1.35
FTSEUROFIRST 300 . . . . . . 897.58 15.40 1.75
NIKKEI 225 AVERAGE. . . . 8374.13 -186.13 -2.17
DAX 30 PERFORMANCE. . 5345.56 149.00 2.87
CAC 40 . . . . . . . . . . . . . . . . 2859.34 49.23 1.75
SHANGHAI SE INDEX . . . . 2393.18 -39.98 -1.64
HANG SENG. . . . . . . . . . . 17407.80 -261.03 -1.48
S&P/ASX 20 INDEX . . . . . . 2334.20 -13.20 -0.56
ASX ALL ORDINARIES . . . 3927.60 -50.90 -1.28
BOVESPA SAO PAOLO. . 53747.52 517.16 0.97
ISEQ OVERALL INDEX . . . 2441.33 36.59 1.52
STI . . . . . . . . . . . . . . . . . . . . 2654.31 -44.49 -1.65
IGBM. . . . . . . . . . . . . . . . . . . 828.20 20.29 2.51
SWISS MARKET INDEX. . . 5401.01 102.18 1.93
Price Chg %chg
3M........................................................75.19 1.20 98.19 72.00
ABBOTT LABS ...................................50.75 -0.21 54.24 45.07
ALCOA ................................................10.45 0.38 18.47 9.91
ALTRIA GROUP..................................26.00 0.23 28.13 23.20
AMAZON.COM..................................229.85 6.24 244.00 150.97
AMERICAN EXPRESS........................47.56 1.11 53.80 37.33
AMGEN INC.........................................55.43 0.33 61.53 47.66
APPLE...............................................403.17 -1.13 422.86 275.00
AT&T....................................................28.34 0.49 31.94 27.20
BANK OF AMERICA.............................6.60 0.29 15.31 6.00
BERKSHIRE HATAW B.......................72.09 5.72 87.65 65.35
BOEING CO.........................................62.01 2.50 80.65 56.01
BRISTOL MYERS SQUI ......................30.94 0.05 31.78 20.05
CATERPILLAR....................................76.85 2.99 116.55 72.60
CHEVRON...........................................91.49 1.48 109.94 78.16
CISCO SYSTEMS................................15.99 0.38 24.60 13.30
CITIGROUP.........................................26.72 1.74 51.50 23.19
COCA-COLA.......................................68.76 1.34 71.77 57.72
COLGATE PALMOLIVE......................90.89 1.97 94.89 73.62
CONOCOPHILLIPS.............................64.13 1.62 81.80 55.00
CVS/CAREMARK................................34.40 0.27 39.50 29.45
DU PONT(EI) DE NMR........................41.54 1.08 57.00 40.21
EXXON MOBIL....................................71.72 2.41 88.23 60.90
GENERAL ELECTRIC.........................15.57 0.36 21.65 14.72
GOOGLE A........................................531.89 6.38 642.96 473.02
HEWLETT PACKARD.........................22.71 0.39 49.39 19.92
HOME DEPOT.....................................34.00 0.28 39.38 28.13
IBM.....................................................174.51 5.17 185.63 131.22
INTEL CORP .......................................22.24 0.08 26.78 18.75
J.P.MORGAN CHASE.........................31.65 2.06 48.36 28.53
JOHNSON & JOHNSON.....................62.69 1.10 68.05 57.50
KRAFT FOODS A................................34.26 0.54 36.30 24.30
MC DONALD'S CORP ........................89.34 1.97 91.22 72.14
MERCK AND CO. NEW......................31.61 0.56 37.68 29.47
MICROSOFT........................................25.44 0.38 29.46 23.65
OCCID. PETROLEUM.........................76.99 4.73 117.89 69.90
ORACLE CORP...................................29.71 0.81 36.50 24.72
PEPSICO.............................................61.89 1.55 71.89 59.25
PFIZER ................................................17.77 0.32 21.45 16.25
PHILIP MORRIS INTL .........................64.58 0.77 72.74 54.61
PROCTER AND GAMBLE ..................62.54 1.29 67.72 56.57
QUALCOMM INC ................................50.58 0.29 59.84 42.45
SCHLUMBERGER ..............................63.27 2.07 95.64 57.80
TRAVELERS CIES..............................48.34 1.22 64.17 46.62
UNITED TECHNOLOGIE ....................71.55 2.63 91.83 67.12
UNITEDHEALTH GROUP...................48.81 1.21 53.50 33.94
VERIZON COMMS ..............................36.36 0.48 38.95 31.60
WAL-MART STORES..........................51.83 1.03 57.90 48.31
WALT DISNEY CO ..............................30.30 0.47 44.34 29.05
WELLS FARGO & CO.........................24.79 1.10 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 ..................0.910 0.00
LIBOR Euro - 12 months ................2.031 0.00
LIBOR USD - overnight...................0.146 0.00
LIBOR USD - 12 months.................0.850 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 .........................2.990 0.13
European repo rate.........................0.752 -0.01
Euro Euribor ....................................1.195 0.01
The vix index ...................................42.48 1.23
The baItic dry index ........................1.920 0.03
Markit iBoxx...................................232.83 -1.55
Markit iTraxx..................................186.69 0.00
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
C/$ 1.3455 0.0038
C/ 0.8673 0.0055
C/ 102.86 0.4200
/C 1.1505 0.0049
/$ 1.5516 0.0059
/ 118.65 0.2892
FTSE 100
5089.37
22.56
FTSE 250
9839.24
23.74
FTSE ALLSHARE
2637.46
10.48
DOW
11043.86
272.38
NASDAQ
2516.69
33.46
S&P 500
1162.95
26.52
RPC Group . . . . . . . .315.0 2.0 384.8 215.4
Smiths Group . . . . . .922.0 10.0 1429.0 892.0
Brown (N.) Group . . .275.4 -4.7 311.2 232.3
Carpetright . . . . . . . . .492.0 14.1 835.5 474.6
Debenhams . . . . . . . . .57.3 1.4 77.4 51.2
Dignity . . . . . . . . . . . .830.0 -24.0 854.5 633.0
Dixons RetaiI . . . . . . .11.5 0.5 28.5 10.5
DuneImGroup . . . . . .462.6 7.6 550.0 380.0
HaIfords Group . . . . .316.0 2.9 459.7 268.6
Home RetaiI Group . .116.0 -0.9 235.0 105.1
Inchcape . . . . . . . . . .279.3 -4.2 425.4 268.1
JD Sports Fashion . .860.0 10.0 1030.0 753.5
Kesa EIectricaIs . . . . .82.5 2.5 174.0 78.6
Kingfisher . . . . . . . . .241.6 0.8 287.1 217.0
Marks & Spencer G . .327.0 -0.9 427.5 301.8
Mothercare . . . . . . . .333.4 14.2 627.5 311.8
Next . . . . . . . . . . . . .2547.0 -17.0 2649.0 1868.0
Sports Direct Int . . . .221.7 -5.7 266.2 125.5
WH Smith . . . . . . . . . .495.1 -2.6 523.0 433.8
Smith & Nephew . . . .581.0 3.5 742.0 521.0
Synergy HeaIth . . . . .890.5 8.5 981.0 713.5
Barratt DeveIopme . . .80.4 0.3 119.0 67.5
BeIIway . . . . . . . . . . . .609.5 -0.5 753.5 511.0
YuIe Catto & Co . . . . .148.1 0.1 253.0 144.6
BaIfour Beatty . . . . . .252.6 4.5 357.3 228.6
Kier Group . . . . . . . .1248.0 24.0 1418.0 1097.0
Drax Group . . . . . . . .497.9 6.9 536.5 353.6
Scottish & Southe . .1281.0 -3.0 1423.0 1108.0
Domino Printing S . .460.0 -2.0 705.0 454.4
HaIma . . . . . . . . . . . . .317.6 0.3 429.6 305.5
Laird . . . . . . . . . . . . . .129.5 -1.9 207.0 124.2
Morgan CrucibIe C . .230.0 -1.4 357.1 209.5
Oxford Instrument . .800.0 5.0 1010.0 470.0
Renishaw . . . . . . . . .1016.0 -24.0 1886.0 1001.0
Spectris . . . . . . . . . .1210.0 10.0 1679.0 1016.0
Aberforth SmaIIer . . .547.0 7.5 714.0 531.6
AIIiance Trust . . . . . .324.2 2.6 392.7 318.0
Bankers Inv Trust . . .365.0 5.0 428.0 354.4
BH GIobaI Ltd. GB .1209.0 -1.0 1210.0 1058.0
BH GIobaI Ltd. US . . . .12.1 0.0 12.1 10.4
BH Macro Ltd. EUR . . .19.2 -0.1 20.1 15.8
BH Macro Ltd. GBP 1995.0 0.0 2070.0 1630.0
BH Macro Ltd. USD . . .19.1 -0.1 20.1 15.8
BIackRock WorId M .604.0 -9.5 815.5 593.8
BIueCrest AIIBIue . . .171.5 1.0 176.2 162.4
British Assets Tr . . . .113.5 -0.1 140.5 111.0
British Empire Se . . .443.0 3.7 533.0 428.4
CaIedonia Investm .1505.0 25.0 1928.0 1455.0
City of London In . . .265.2 4.2 306.9 256.0
Dexion AbsoIute L . .135.5 -0.3 151.0 134.6
Edinburgh Dragon . .208.0 -4.9 262.1 205.1
Edinburgh Inv Tru . . .437.1 1.1 492.2 414.9
EIectra Private E . . .1315.0 7.0 1755.0 1287.0
F&C Inv Trust . . . . . .272.9 0.0 327.9 268.1
FideIity China Sp . . . . .72.8 -1.6 128.7 70.1
FideIity European . . .942.5 5.0 1287.0 921.0
HeraId Inv Trust . . . . .446.0 7.0 545.5 428.5
HICL Infrastructu . . . .116.0 0.1 121.3 112.7
Impax Environment . .94.0 0.4 130.5 92.5
JPMorgan American .792.0 4.5 916.0 721.5
JPMorgan Asian In . .178.9 -3.8 250.8 174.5
JPMorgan Emerging .483.0 -2.0 639.0 471.7
JPMorgan European .744.5 16.0 983.5 701.0
JPMorgan Indian I . . .351.3 -3.6 502.0 341.1
JPMorgan Russian .443.0 -0.9 755.0 424.0
Law Debenture Cor . .329.2 3.5 385.0 309.8
MercantiIe Inv Tr . . . .896.5 6.5 1137.0 869.1
Merchants Trust . . . .363.0 6.4 431.8 348.7
Monks Inv Trust . . . .321.9 3.8 367.9 311.3
Murray Income Tru . .587.0 9.0 673.0 568.0
Murray Internatio . . .840.0 -4.0 991.5 834.1
PerpetuaI Income . . .243.9 4.9 276.0 232.6
PoIar Cap TechnoI . .319.5 -2.5 391.2 299.5
RIT CapitaI Partn . . .1190.0 -5.0 1334.0 1110.0
Scottish Inv Trus . . . .439.4 3.4 524.0 423.5
Scottish Mortgage . .636.0 4.5 781.0 618.0
SVG CapitaI . . . . . . . .198.2 4.5 279.8 168.6
TempIe Bar Inv Tr . . .829.0 7.0 952.0 782.0
TempIeton Emergin . .511.0 -5.5 689.5 502.2
TR Property Inv T . . .159.5 2.7 206.1 153.3
TR Property Inv T . . . .72.5 1.2 94.0 69.3
Witan Inv Trust . . . . .422.5 2.5 533.0 414.7
3i Group . . . . . . . . . . .192.3 5.1 340.0 181.0
3i Infrastructure . . . .121.5 0.6 125.2 112.9
Aberdeen Asset Ma .170.0 1.5 240.0 159.8
Ashmore Group . . . .341.1 -9.9 420.0 301.5
Brewin DoIphin Ho . .120.5 -2.9 185.4 119.8
CameIIia . . . . . . . . . .9127.5 176.510950.0 8900.0
CharIes TayIor Co . . .136.0 0.0 198.3 122.0
City of London Gr . . . .77.8 0.0 93.6 76.3
City of London In . . .360.0 0.0 461.5 328.0
CIose Brothers Gr . . .672.5 8.5 888.5 651.5
CoIIins Stewart H . . . .62.8 -0.3 90.8 60.0
EvoIution Group . . . . .79.8 -1.5 94.0 62.3
F&C Asset Managem .64.8 1.5 92.9 58.7
Hargreaves Lansdo .438.4 5.8 646.5 402.5
HeIphire Group . . . . . . .2.4 -0.2 39.0 2.2
Henderson Group . . .109.6 -1.5 173.1 105.9
Highway CapitaI . . . . .15.5 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .432.0 -4.8 570.5 391.3
IG Group HoIdings . .444.6 5.5 553.0 393.6
Intermediate Capi . . .212.0 -2.1 360.3 204.8
InternationaI Per . . . .196.5 -1.8 388.8 191.5
InternationaI Pub . . . .114.3 0.3 118.3 108.6
Investec . . . . . . . . . . .357.5 -3.9 538.0 350.6
IP Group . . . . . . . . . . . .45.5 -0.5 54.5 27.9
Jupiter Fund Mana . .203.0 0.7 337.3 184.9
Liontrust Asset M . . . .72.5 0.0 94.3 70.5
LMS CapitaI . . . . . . . . .59.5 0.3 64.8 44.8
London Finance & . . .21.5 0.0 23.5 16.5
London Stock Exch .827.0 -10.0 1076.0 675.0
Lonrho . . . . . . . . . . . . .13.0 -0.8 19.8 11.0
Man Group . . . . . . . . .227.6 -3.8 311.0 178.0
Paragon Group Of . .146.6 1.0 206.1 134.6
Provident Financi . .1013.0 -5.0 1124.0 728.5
Rathbone Brothers .1058.0 9.0 1257.0 840.5
Record . . . . . . . . . . . . .29.3 0.0 51.0 20.3
RSM Tenon Group . . .22.5 -0.3 66.3 21.3
Schroders . . . . . . . .1228.0 34.0 1922.0 1168.0
Schroders (Non-Vo .1000.0 30.0 1554.0 941.5
TuIIett Prebon . . . . . .354.1 -5.3 428.6 329.8
WaIker Crips Grou . . .46.0 0.0 51.5 45.0
BT Group . . . . . . . . . .171.0 2.2 204.1 140.0
CabIe & WireIess . . . .38.6 -0.9 60.8 31.3
CabIe & WireIess . . . .29.5 -0.3 76.9 28.4
COLT Group SA . . . .103.5 -1.0 156.2 97.7
KCOM Group . . . . . . . .70.8 0.7 84.0 47.5
TaIkTaIk TeIecom . . .127.0 2.0 168.3 119.8
TeIecomPIus . . . . . . .708.0 16.5 712.5 370.0
Booker Group . . . . . . .72.5 0.5 77.9 47.9
Greggs . . . . . . . . . . . .462.0 3.2 550.5 429.1
Morrison (Wm) Sup .287.1 2.9 308.3 262.7
Ocado Group . . . . . . . .91.0 -3.0 285.0 90.5
Sainsbury (J) . . . . . . .270.9 4.6 395.0 262.8
Tesco . . . . . . . . . . . . .371.4 6.2 440.7 356.3
Associated Britis . . .1137.0 48.0 1182.0 940.0
Cranswick . . . . . . . . .615.0 -0.5 896.0 588.5
Dairy Crest Group . . .332.0 -4.0 424.9 325.0
Devro . . . . . . . . . . . . .243.0 10.9 296.9 218.0
Premier Foods . . . . . . .10.3 -0.6 35.1 10.0
Tate & LyIe . . . . . . . . .592.5 -5.0 656.0 466.8
UniIever . . . . . . . . . .1981.0 0.0 2081.0 1777.0
Mondi . . . . . . . . . . . . .482.7 5.7 664.0 461.3
Centrica . . . . . . . . . . .292.6 5.6 345.8 282.6
InternationaI Pow . . .315.6 10.2 448.6 279.4
NationaI Grid . . . . . . .623.5 -3.5 647.0 530.0
Northumbrian Wate .463.3 0.4 469.5 295.5
Pennon Group . . . . . .683.5 20.5 737.5 579.5
Severn Trent . . . . . .1494.0 30.0 1517.0 1306.0
United UtiIities . . . . .601.5 2.5 631.5 543.5
Cookson Group . . . . .410.5 -9.9 724.5 403.1
DS Smith . . . . . . . . . .175.6 0.2 266.2 149.0
Rexam . . . . . . . . . . . .306.9 6.0 400.0 295.1
BAE Systems . . . . . .271.6 -2.2 369.9 248.1
Chemring Group . . . .523.5 0.0 736.5 485.0
Cobham . . . . . . . . . . .181.0 1.6 245.6 173.4
Meggitt . . . . . . . . . . . .318.8 2.0 397.6 296.2
QinetiQ Group . . . . . .113.3 -1.7 136.3 96.7
RoIIs-Royce Group . .599.5 3.5 665.0 557.5
Senior . . . . . . . . . . . . .136.9 1.3 190.6 128.7
UItra EIectronics . . .1505.0 13.0 1895.0 1305.0
Hansen Transmissi . . .65.0 0.0 65.5 32.5
GKN . . . . . . . . . . . . . .168.2 -4.5 245.0 164.2
BarcIays . . . . . . . . . . .156.0 10.0 333.6 138.9
HSBC HoIdings . . . . .499.9 1.9 730.9 484.9
LIoyds Banking Gr . . .35.2 1.1 76.7 27.6
RoyaI Bank of Sco . . .23.6 0.7 49.5 19.7
Standard Chartere .1275.5 3.5 1950.0 1237.0
AG Barr . . . . . . . . . .1188.0 33.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .305.8 11.9 503.5 289.9
Diageo . . . . . . . . . . .1235.0 21.0 1307.0 1092.0
SABMiIIer . . . . . . . . .2092.0 9.5 2340.0 1979.0
AZ EIectronic Mat . . .244.0 5.2 338.1 210.0
Croda Internation . .1671.0 -9.0 2081.0 1367.0
EIementis . . . . . . . . . .120.0 -4.4 187.4 99.6
Johnson Matthey . .1531.0 -29.0 2119.0 1487.0
Victrex . . . . . . . . . . .1133.0 -24.0 1590.0 1121.0
Price Chg High Low
BerkeIey Group Ho .1200.0 -32.0 1299.0 789.5
Bovis Homes Group .402.6 -3.3 464.7 326.5
Persimmon . . . . . . . .456.2 -4.1 502.5 336.5
Reckitt Benckiser . .3259.0 60.0 3648.0 3015.0
Redrow . . . . . . . . . . . .107.0 1.2 139.0 98.4
TayIor Wimpey . . . . . . .34.5 0.6 43.3 22.3
Bodycote . . . . . . . . . .253.8 2.7 397.7 245.3
Charter Internati . . . .854.0 -2.5 876.0 538.5
Fenner . . . . . . . . . . . .308.8 0.8 422.5 232.2
IMI . . . . . . . . . . . . . . . .729.5 4.0 1119.0 707.0
MeIrose . . . . . . . . . . .273.1 -2.0 365.4 256.7
Northgate . . . . . . . . . .246.5 -4.0 346.7 202.0
Rotork . . . . . . . . . . .1570.0 -34.0 1895.0 1471.6
Spirax-Sarco Engi . .1812.0 22.0 2063.0 1649.0
Weir Group . . . . . . .1601.0 55.0 2218.0 1380.0
Ferrexpo . . . . . . . . . . .283.3 -13.2 499.0 280.3
TaIvivaara Mining . . .265.0 -5.0 622.0 261.2
BBAAviation . . . . . . .161.8 2.2 240.8 156.0
Stobart Group Ltd . . .127.4 4.9 163.6 121.7
AdmiraI Group . . . . .1333.0 62.0 1754.0 1230.0
AmIin . . . . . . . . . . . . .287.5 5.0 427.0 278.5
Huntsworth . . . . . . . . .57.5 -0.3 86.0 56.0
Informa . . . . . . . . . . . .325.9 -3.6 461.1 318.0
ITE Group . . . . . . . . . .164.2 -5.4 258.2 160.5
ITV . . . . . . . . . . . . . . . . .59.6 1.8 93.5 51.7
Johnston Press . . . . . . .4.8 -0.1 15.0 4.4
MecomGroup . . . . . .140.8 0.8 310.0 135.3
Moneysupermarket. .109.2 -1.5 120.4 75.7
Pearson . . . . . . . . . .1137.0 4.0 1207.0 926.0
PerformGroup . . . . .202.0 -4.0 234.5 150.0
Reed EIsevier . . . . . .497.3 10.7 590.5 461.3
Rightmove . . . . . . . .1228.0 -12.0 1307.0 732.5
STV Group . . . . . . . . .105.3 0.3 168.0 89.8
Tarsus Group . . . . . .120.0 0.5 165.0 112.5
Trinity Mirror . . . . . . . .41.3 0.3 117.0 37.5
UBM . . . . . . . . . . . . . .444.2 0.0 725.0 416.0
UTV Media . . . . . . . . .123.5 0.0 151.0 101.0
WiImington Group . . .89.5 0.0 183.0 82.5
WPP . . . . . . . . . . . . . .609.0 7.5 846.5 578.5
YeII Group . . . . . . . . . . .4.1 -0.0 16.1 3.9
African Barrick G . . .500.0 -69.5 638.0 393.5
AngIo American . . .2264.0 11.0 3437.0 2181.0
AngIo Pacific Gro . . .269.1 -3.9 369.3 257.1
Antofagasta . . . . . . . .950.0 -21.0 1634.0 920.0
Aquarius PIatinum . .177.0 -14.4 419.0 175.6
BHP BiIIiton . . . . . . .1747.0 -14.5 2631.5 1689.5
BeazIey . . . . . . . . . . . .113.5 -1.1 139.2 109.6
CatIin Group Ltd. . . .377.2 21.2 421.4 325.0
Hiscox Ltd. . . . . . . . . .366.6 7.5 424.7 340.5
Jardine LIoyd Tho . . .640.0 4.0 709.0 564.5
Lancashire HoIdin . . .723.5 3.5 738.5 529.0
RSA Insurance Gro . .109.9 2.9 143.5 105.5
Aviva . . . . . . . . . . . . . .295.0 17.7 477.9 270.6
LegaI & GeneraI G . . . .97.5 5.9 123.8 89.8
OId MutuaI . . . . . . . . .106.6 2.6 145.2 101.4
Phoenix Group HoI . .492.3 -5.3 699.5 458.0
PrudentiaI . . . . . . . . .561.0 14.5 777.0 531.5
ResoIution Ltd. . . . . .249.2 9.4 316.1 211.3
St James's PIace . . . .304.3 3.1 376.0 236.2
Standard Life . . . . . . .199.9 5.2 244.7 172.0
4Imprint Group . . . . .213.0 11.0 295.0 200.0
Aegis Group . . . . . . .125.7 4.4 163.5 118.6
BIoomsbury PubIis . . .96.5 0.5 138.0 94.0
British Sky Broad . . .683.5 13.0 850.0 618.5
Centaur Media . . . . . . .36.5 0.5 73.0 35.5
Chime Communicati .184.3 -1.3 298.5 173.0
Creston . . . . . . . . . . . .77.5 0.5 121.0 74.0
DaiIy MaiI and Ge . . .347.0 3.6 594.5 336.3
Euromoney Institu . .610.0 28.0 736.0 522.5
Future . . . . . . . . . . . . . .11.8 0.0 30.0 10.8
Haynes PubIishing . .232.0 0.0 260.0 202.5
Centamin Egypt Lt . . .97.8 -2.1 197.1 89.7
Eurasian NaturaI . . .550.0 -4.0 1125.0 531.0
FresniIIo . . . . . . . . . .1524.0-112.0 2150.0 1223.0
GemDiamonds Ltd. .214.3 -5.7 306.0 179.8
GIencore Internat . . .414.6 2.2 531.1 348.0
HochschiId Mining . .450.0 -14.4 680.0 423.9
Kazakhmys . . . . . . . .782.0 -32.0 1671.0 764.5
Kenmare Resources . .37.5 -1.4 59.9 17.2
Lonmin . . . . . . . . . . .1067.0 -10.0 1983.0 1038.0
New WorId Resourc .472.5 -2.5 1060.0 441.3
PetropavIovsk . . . . . .660.0 -30.5 1226.0 656.0
RandgoId Resource 6170.0-180.0 7215.0 4425.0
Rio Tinto . . . . . . . . .2964.5 -20.5 4712.0 2865.0
Vedanta Resources 1070.0 -43.0 2559.0 1058.0
Xstrata . . . . . . . . . . . .820.0 -6.0 1550.0 792.7
Inmarsat . . . . . . . . . . .487.9 10.1 719.5 389.7
Vodafone Group . . . .162.5 0.9 182.8 155.1
Genesis Emerging . .438.0 -3.1 568.0 430.1
Afren . . . . . . . . . . . . . . .84.7 -1.2 171.2 83.0
BG Group . . . . . . . . .1144.0 -18.5 1564.5 1118.5
BP . . . . . . . . . . . . . . . .384.7 -0.4 509.0 363.2
Cairn Energy . . . . . . .281.1 2.0 469.7 271.5
EnQuest . . . . . . . . . . . .90.4 -3.3 158.5 89.2
Essar Energy . . . . . .245.0 -4.7 589.5 235.1
ExiIIon Energy . . . . . .199.9 -6.1 469.7 195.0
Heritage OiI . . . . . . . .237.2 14.5 486.0 190.0
Ophir Energy . . . . . . .272.5 -0.5 299.0 184.5
Premier OiI . . . . . . . . .318.4 -1.4 535.0 310.0
RoyaI Dutch SheII . .1959.5 -29.0 2326.5 1883.5
RoyaI Dutch SheII . .1999.5 -24.0 2336.0 1845.0
SaIamander Energy .189.2 6.9 317.6 176.5
Soco Internationa . . .334.1 14.1 454.7 279.8
TuIIow OiI . . . . . . . . .1290.0 -6.0 1493.0 945.5
Amec . . . . . . . . . . . . .838.0 -3.5 1251.0 819.0
Hunting . . . . . . . . . . .579.5 -1.0 817.0 565.0
Kentz Corporation . .459.0 4.0 494.5 275.5
LampreII . . . . . . . . . . .247.6 -1.6 395.2 240.5
Petrofac Ltd. . . . . . .1229.0 -19.0 1685.0 1110.0
Wood Group (John) .519.0 -12.0 715.8 430.5
Burberry Group . . . .1309.0 -32.0 1600.0 959.5
PZ Cussons . . . . . . . .339.2 7.4 409.0 320.5
Supergroup . . . . . . .1025.0 25.0 1820.0 818.5
AstraZeneca . . . . . .2783.5 7.5 3359.0 2543.5
BTG . . . . . . . . . . . . . .257.9 3.0 309.7 210.1
Genus . . . . . . . . . . . .1026.0 36.0 1046.0 772.0
GIaxoSmithKIine . . .1329.5 20.0 1385.0 1127.5
Hikma Pharmaceuti .566.5 9.0 900.0 550.0
Shire PIc . . . . . . . . . .1965.0 17.0 2136.0 1405.0
CapitaI & Countie . . .170.0 0.5 203.7 131.2
Daejan HoIdings . . .2449.0 109.0 2954.0 2282.0
F&C CommerciaI Pr . .96.8 1.5 108.0 88.0
Grainger . . . . . . . . . . . .86.0 -0.6 133.2 86.0
London & Stamford .113.9 0.2 140.0 112.9
SaviIIs . . . . . . . . . . . . .293.5 -6.5 427.1 288.2
UK CommerciaI Pro . .75.2 2.3 85.5 70.4
Unite Group . . . . . . . .165.4 1.7 229.8 152.9
Big YeIIow Group . . .250.0 4.5 353.3 234.2
British Land Co . . . . .477.0 0.2 629.5 465.0
CapitaI Shopping . . .304.3 7.9 424.8 289.6
Derwent London . . .1511.0 -26.0 1880.0 1411.0
Great PortIand Es . . .347.0 -4.6 445.0 329.0
Hammerson . . . . . . . .367.0 0.5 490.9 358.3
Hansteen HoIdings . . .74.0 3.8 89.5 69.2
Land Securities G . . .633.5 -1.0 885.0 623.0
SEGRO . . . . . . . . . . . .217.0 0.5 331.3 211.6
Shaftesbury . . . . . . . .464.3 -0.6 539.0 431.7
Autonomy Corporat 2534.0 11.0 2535.0 1271.0
Aveva Group . . . . . .1514.0 2.0 1799.0 1391.0
Computacenter . . . . .367.1 -17.9 490.0 286.4
Fidessa Group . . . . .1552.0 2.0 2109.0 1409.0
Invensys . . . . . . . . . . .223.3 2.2 364.3 214.8
Logica . . . . . . . . . . . . .74.2 0.3 147.2 72.1
Micro Focus Inter . . .325.3 9.6 426.2 239.4
Misys . . . . . . . . . . . . .214.9 -6.0 420.2 214.5
Sage Group . . . . . . . .257.9 0.1 302.0 231.7
SDL . . . . . . . . . . . . . . .629.0 13.0 711.5 555.0
TeIecity Group . . . . . .568.5 26.0 583.5 430.0
Aggreko . . . . . . . . . .1699.0 18.0 2034.0 1394.5
Ashtead Group . . . . .134.1 6.1 207.9 99.4
Atkins (WS) . . . . . . . .497.2 7.0 820.0 490.2
Babcock Internati . . .654.0 7.0 733.0 513.5
Berendsen . . . . . . . . .427.4 -0.7 568.0 391.3
BunzI . . . . . . . . . . . . .770.0 1.0 812.5 676.5
Cape . . . . . . . . . . . . . .471.9 12.7 591.5 326.0
Capita Group . . . . . . .702.0 -11.5 794.5 635.5
CariIIion . . . . . . . . . . .325.7 -5.2 403.2 298.8
De La Rue . . . . . . . . .793.0 3.0 853.5 549.5
EIectrocomponents .191.3 -2.4 294.9 188.0
Experian . . . . . . . . . . .704.5 9.5 833.5 665.0
FiItrona PLC . . . . . . . .356.9 -1.1 385.5 227.5
G4S . . . . . . . . . . . . . . .260.2 5.9 291.0 237.7
Hays . . . . . . . . . . . . . . .72.4 0.8 133.6 69.4
Homeserve . . . . . . . .471.9 11.2 532.0 408.0
Howden Joinery Gr . .104.3 3.3 127.5 73.5
Interserve . . . . . . . . . .300.0 5.8 341.3 183.5
Intertek Group . . . . .2003.0 35.0 2148.0 1715.0
MichaeI Page Inte . . .361.5 3.9 567.0 338.7
Mitie Group . . . . . . . .231.9 6.9 242.5 191.2
Premier FarneII . . . . .148.6 0.5 308.8 141.4
Regus . . . . . . . . . . . . . .74.4 0.1 119.0 64.0
RentokiI InitiaI . . . . . . .73.0 0.1 104.9 70.9
RPS Group . . . . . . . . .161.4 -0.4 253.0 158.2
Serco Group . . . . . . .499.8 5.2 633.0 484.8
Shanks Group . . . . . .106.5 3.5 130.9 100.6
SIG . . . . . . . . . . . . . . . .92.4 1.4 153.5 88.2
SThree . . . . . . . . . . . .213.2 -4.8 447.6 212.5
Travis Perkins . . . . . .715.5 0.5 1127.0 692.0
WoIseIey . . . . . . . . .1437.0 12.0 2261.0 1394.0
ARM HoIdings . . . . . .564.0 -10.5 651.0 338.9
CSR . . . . . . . . . . . . . .221.3 -0.5 447.0 208.0
Imagination Techn . .423.0 4.0 502.0 296.9
Pace . . . . . . . . . . . . . . .99.5 1.3 231.8 91.0
Spirent Communica .120.1 -3.1 160.3 116.0
British American . .2709.0 7.0 2871.0 2282.5
ImperiaI Tobacco . .2128.0 42.0 2231.0 1784.0
Avis Europe . . . . . . . .314.8 0.1 314.9 184.0
Betfair Group . . . . . . .753.0 8.0 1550.0 567.0
Bwin.party Digita . . .122.2 -1.1 289.1 100.6
CarnivaI . . . . . . . . . .2056.0 5.0 3153.0 1742.0
Compass Group . . . .526.5 2.0 612.0 511.5
Domino's Pizza UK . .512.0 14.0 586.0 377.0
easyJet . . . . . . . . . . . .353.0 1.0 479.0 301.0
FirstGroup . . . . . . . . .320.3 6.5 412.6 310.0
Go-Ahead Group . . .1356.0 12.0 1598.0 1085.0
Greene King . . . . . . .441.8 -0.2 518.0 410.0
InterContinentaI . . .1055.0 17.0 1435.0 955.0
InternationaI Con . . .147.1 5.0 305.0 138.0
JD Wetherspoon . . . .386.3 -7.0 468.3 370.6
Ladbrokes . . . . . . . . .121.5 -1.6 155.3 120.0
Marston's . . . . . . . . . . .94.5 -0.1 117.1 87.1
MiIIennium& Copt . .401.0 -1.7 600.5 392.4
MitcheIIs & ButIe . . . .252.5 0.9 361.0 216.4
NationaI Express . . .232.1 5.2 270.2 220.7
Rank Group . . . . . . . .122.3 -5.2 153.7 109.5
Restaurant Group . . .273.0 1.8 335.0 254.9
Stagecoach Group . .241.5 0.8 268.5 180.4
Thomas Cook Group .35.5 -0.6 204.8 33.7
TUI TraveI . . . . . . . . . .151.3 2.3 271.9 137.2
Whitbread . . . . . . . .1600.0 5.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .225.6 3.0 237.3 155.5
Abcam . . . . . . . . . . . .347.3 -4.0 460.0 307.0
AIbemarIe & Bond . .335.5 -14.5 400.1 254.0
Amerisur Resource . .14.3 0.3 29.0 11.5
Andor TechnoIogy . .560.0 0.0 685.0 340.0
ArchipeIago Resou . . .69.0 1.0 79.0 32.3
ASOS . . . . . . . . . . . .1552.0 -18.0 2468.0 1089.0
AureIian OiI & Ga . . . .18.3 0.3 92.0 16.0
Avanti Communicat .255.8 0.8 735.0 245.0
Avocet Mining . . . . . .222.5 -33.8 286.8 160.0
BIinkx . . . . . . . . . . . . .144.0 8.5 152.0 70.5
Borders & Souther . . .45.0 1.5 89.8 42.4
BowLeven . . . . . . . . . .89.8 -5.0 398.0 89.3
Brooks MacdonaId 1220.0 5.0 1372.5 907.5
Cove Energy . . . . . . . .71.5 -1.3 112.8 61.0
Daisy Group . . . . . . . .110.8 1.5 127.0 88.0
EMIS Group . . . . . . . .532.0 -18.0 580.0 361.0
Encore OiI . . . . . . . . . .48.5 3.0 151.5 40.8
Faroe PetroIeum . . . .139.8 -2.3 218.3 133.0
GuIfsands PetroIe . . .180.8 0.5 401.5 142.5
GWPharmaceuticaI . .97.5 1.5 130.0 83.0
H&T Group . . . . . . . . .336.0 -4.0 395.0 277.0
Hamworthy . . . . . . . .502.0 0.0 705.0 360.0
Hargreaves Servic .1030.0 -30.0 1078.0 675.0
HeaIthcare Locums . . . .5.8 -0.6 6.3 5.0
Immunodiagnostic . .985.0 -44.0 1218.0 768.5
ImpeIIamGroup . . . .320.0 0.3 387.5 134.0
James HaIstead . . . . .432.5 10.5 495.0 323.8
KaIahari MineraIs . . .224.5 -6.0 301.0 142.0
London Mining . . . . .325.5 -3.5 436.5 283.0
Lupus CapitaI . . . . . . .98.5 1.3 150.0 86.0
M. P. Evans Group . .420.0 0.0 500.5 371.0
Majestic Wine . . . . . .419.3 1.8 510.0 330.0
May Gurney Integr . .269.0 3.5 295.0 181.0
Monitise . . . . . . . . . . . .33.5 -0.3 39.0 18.5
MuIberry Group . . . .1515.0 -34.0 1920.0 383.5
Nanoco Group . . . . . . .50.5 -2.5 115.8 50.0
NauticaI PetroIeu . . .289.5 1.5 547.0 223.5
NichoIs . . . . . . . . . . . .533.5 0.5 579.0 410.0
Numis Corporation . . .91.5 -0.5 137.8 89.0
Pan African Resou . . .11.5 0.0 14.5 8.2
Patagonia GoId . . . . . .52.0 -4.5 70.0 20.3
Prezzo . . . . . . . . . . . . .56.3 -0.6 71.5 53.3
Pursuit Dynamics . . .182.0 -9.5 700.0 160.5
Rockhopper ExpIor .194.5 1.5 510.0 141.0
RWS HoIdings . . . . . .455.0 0.0 479.8 258.5
Songbird Estates . . .115.8 -4.3 160.3 110.3
VaIiant PetroIeum . . .440.0 -8.0 761.5 435.0
Young & Co's Brew . .621.5 -11.0 712.0 530.0
BarcIays . . . . . . . . . . .156.0 6.9
Heritage OiI . . . . . . . .237.2 6.5
LegaI & GeneraI Gr . . .97.5 6.4
Aviva . . . . . . . . . . . . .295.0 6.4
CatIin Group Ltd. . . .377.2 6.0
Hansteen HoIdings . . .74.0 5.3
AdmiraI Group . . . . .1333.0 4.9
Euromoney Institut . .610.0 4.8
TeIecity Group . . . . . .568.5 4.8
Ashtead Group . . . . .134.1 4.8
African Barrick Go . .500.0 -12.2
Aquarius PIatinum . .177.0 -7.5
FresniIIo . . . . . . . . . .1524.0 -6.9
Premier Foods . . . . . . .10.3 -5.5
Computacenter . . . . .367.1 -4.7
Ferrexpo . . . . . . . . . .283.3 -4.5
PetropavIovsk . . . . . .660.0 -4.4
Rank Group . . . . . . . .122.3 -4.1
Kazakhmys . . . . . . . .782.0 -3.9
Vedanta Resources .1070.0 -3.9
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
GILTS
AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
ELECTRICITY
ELECTRONIC & ELECTRICAL EQ.
EQUITY INVESTMENT INSTRUM.
FINANCIAL SERVICES
FIXED LINE TELECOMS
FOOD & DRUG RETAILERS
FOOD PRODUCERS
FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
HEALTH CARE EQUIPMENT & S.
HHOLD GDS & HOME CONSTR.
INDUSTRIAL ENGINEERING
INDUSTRIAL TRANSPORTATION
MEDIA
LIFE INSURANCE
PERSONAL GOODS
PHARMACEUTICALS & BIOTECH
REAL ESTATE INVEST. & SERV.
SOFTWARE & COMPUTER SERV.
SUPPORT SERVICES
TECHNOLOGY HARDW. & EQUIP.
TOBACCO
TRAVEL & LEISURE
AIM 50
NON LIFE INSURANCE
REAL ESTATE INVEST. TRUSTS
http://corporate.webfg.com
mailto:
globaltechsales@webfg.com
AUTOMOBILES & PARTS
BANKS
ALTERNATIVE ENERGY
CHEMICALS
BEVERAGES
GENERAL INDUSTRIALS
MOBILE TELECOMS
OIL & GAS PRODUCERS
OIL EQUIPMENT & SERVICES
MINING
NONEQUITY INVESTM. COMM.
Tsy 3.250 11 . . . . .100.40 -0.02 103.2 100.4
Tsy 9.000 12 . . . .106.48 0.00 115.0 106.5
Tsy 5.000 12 . . . .101.96 -0.02 106.3 101.9
Tsy 5.250 12 . . . .103.26 -0.03 107.7 103.3
Tsy 4.500 13 . . . .105.67 -0.04 108.8 105.7
Tsy 2.500 13 . . . .283.33 -0.03 287.7 277.5
Tsy 8.000 13 . . . . .114.69 -0.06 120.7 114.6
Tsy 5.000 14 . . . . .112.10 -0.12 114.1 109.2
Tsy 4.750 15 . . . . .114.17 -0.19 114.8 108.6
Tsy 8.000 15 . . . .128.16 -0.21 131.3 123.7
Tsy 7.750 15 . . . .102.00 -0.41 109.1 101.7
Tsy 4.000 16 . . . . .112.49 -0.28 113.4 104.9
Tsy 2.500 16 . . . .337.57 -0.30 341.0 310.2
Tsy 8.750 17 . . . .139.94 -0.30 142.1 132.9
Tsy 12.000 17 . . .123.86 -0.81 134.2 123.9
Tsy 1.250 17 . . . . .114.05 -0.33 115.0 106.7
Tsy 5.000 18 . . . .120.19 -0.32 121.0 109.7
Tsy 4.500 19 . . . . .117.58 -0.43 118.5 105.4
Tsy 3.750 19 . . . . .112.25 -0.45 113.0 99.4
Tsy 2.500 20 . . . .351.43 -0.48 355.6 312.4
Tsy 4.750 20 . . . .120.00 -0.43 120.8 106.6
Tsy 8.000 21 . . . .150.62 -0.45 151.8 133.8
Tsy 1.875 22 . . . .122.70 -0.84 123.8 111.3
Tsy 4.000 22 . . . . .113.90 -0.51 114.7 99.0
Tsy 2.500 24 . . . .314.04 -0.45 316.9 273.5
Tsy 5.000 25 . . . .124.51 -0.47 125.4 107.4
Tsy 4.250 27 . . . . .114.83 -0.68 115.9 97.9
Tsy 1.250 27 . . . . .117.34 -0.78 118.9 104.6
Tsy 6.000 28 . . . .139.16 -0.67 140.3 119.5
Tsy 4.750 30 . . . .121.36 -0.74 122.3 103.0
Tsy 4.125 30 . . . .297.35 -0.74 301.4 261.2
Tsy 4.250 32 . . . . .113.69 -0.82 114.6 96.0
Tsy 4.250 36 . . . . .112.81 -0.87 113.8 95.0
Tsy 4.750 38 . . . .121.84 -0.93 123.0 102.8
Tsy 4.500 42 . . . . .117.56 -0.64 119.3 98.9
% %
WWW./LEllFEEL.CC.L|
Ts&Cs: OfferappliestoAustinReedMadetoMeasureCloths. Notvalidinconjunctionwithanyotheroffer, discountorpromotion. Notvalidonlineorinoutlets.
Simply quote City AM ofer in your nearest Austin Reed store
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100 off ALL Made to Measure Suits
lCW
2OO
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Wealth Management | Markets
28 CITYA.M. 27 SEPTEMBER 2011
/$ 1.3533 0.0030
/ 0.8673 0.0055
/ 102.86 0.4200
/ 1.1505 0.0049
/$ 1.5565 0.0106
/ 118.65 0.2892
B
EWARE, King of Shaves, theres a
threat to your dominion. The new
generation of mens skincare has
evolved from an unexpected quar-
ter. Womens beauty brands have cottoned
on to the fact that after shaving, men real-
ly do take care of their skin.
Cult classics from luxury brands such as
Eve Lom and Dr Sebagh are capitalising on
their already stellar skincare reputation
and have developed ranges for men.
Here are our top choices for every step
of the shaving routine that will ensure
that your chin remains even more sculpt-
ed and pampered than ever.
Helena Lee rounds up the best
grooming products that will
ensure your smoothest shave
Lifestyle | Grooming
29
Brush up on your shaving
skills with luxury skincare
FIT IN
THE CITY
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
From
Formula 1
to organic
energy
C
AFFEINE makes the headlines nearly
every week with studies claiming that
its responsible for everything from
improving memory to raising metabolic
rate. But now theres a new reason for caf-
feine to hit the headlines: last week, Toby
Scheckter, racing driver and son of F1 driver
Jody Scheckter, released his very own organ-
ic energy drink. After retirement, Scheckter
found a gap in the market for a healthier
energy drink: After retiring from racing, I
began working in motorsport management
and became tired of drinking energy drinks
that tasted dreadful... full of cheap, unhealthy,
poor quality ingredients. I wanted to create a
real energy drink using real ingredients that
consumers would enjoy...hence the arrival of
Scheckters Organic Energy Drink. I met
Toby and asked him some specifics that
might be relevant to City workers...
WHAT NUTRITIONAL ADVANTAGES DOES
THE DRINK PROVIDE OVER OTHER DRINKS?
Being organic and natural means no use of
artificial flavours, colours, preservatives. All
our ingredients are grown without pesti-
cides, herbicides or fertilisers and are GM
free. Plus we have nutritional benefits over
our competitors: from organic pomegran-
ates (high in fibre and Vit C), lemons and
elderberries (high in Vits A & C).
HOW WOULD YOU ADVISE BUSY CITY
WORKERS TO USE ENERGY DRINKS
SENSIBLY?
To use them like coffee when tired and
needing a boost of mental and physical per-
formance. The organic Brazilian Guarana in
our drink is slower release than the synthet-
ic lab-created caffeine found in most energy
drinks. This slow release of energy means a
more sustained boost in energy, so you dont
experience the rapid boom and bust you get
from many other energy drinks.
WHAT ROLE DO YOU THINK ENERGY DRINKS
SHOULD/DO PLAY IN EXERCISE, EITHER PRE
OR POST WORKOUT?
Energy drinks play a part both pre and post
workout giving you a boost in energy
beforehand to get a strong workout, and
after to ensure productivity and energy is
sustained for the rest of the day. And you
dont need much the Australian Institute
of Sport in Canberra reported that athletes
get the full caffeine effect with as little as 1
milligram of caffeine per kilogram of body
weight.
Toby is offering five City A.M. readers the
chance to win a case of his new drink. Just
tweet him @scheckterenergy today letting
him know when you most need an energy
boost during the day.
EPISODE 29 AWARDS TIME: TO WIN OR NOT TO WIN?
A
nd the winner is Hushed anticipation
falls over the ballroom of the Grange St.
Pauls Hotel. Even Sir Roderick has ceased
pontificating and looks across the table
at me, swollen with pride or perhaps its the foie
gras with a hint of menace about the lips. The
envelope is opened.
Emma grasps my hand beneath the table.
Aware that everyone at the table has at least
half an eye on me and with my free hand, I sur-
reptitiously check that the notes for my accept-
ance speech are in my top inside pocket. Just in
case
Caroline Davison.
Fixed grins all round. I release my hand from
Emmas grasp and applaud. Caroline strides
towards the stage, beaming and waving to her
delighted colleagues. Sir Roderick glares at me,
harrumphs and grabs the bottle of port from
the middle of the table. I remember when, as a
graduate trainee, Caroline couldnt calculate
NPVs and DCFs on an ancient bond calculator. I
remember when she kept a working weeks
supply of black silk underwear in the top draw-
CITY DAD
er of my chest of drawers.
I turn to Emma. Theres a tear in her eye.
Sorry, I say.
Dont be silly. I love you, she replies, barely
audible above the wild applause. She rests her
forehead against mine. Just for a moment.
Then I turn back to the spectacle before us and
continue applauding. Some minutes later my
hair is ruffled. I turn. Its Caroline. Hey buster,
bad luck. You know, Alfred Hitchcock never
won the Oscar for Best Director. So dont
worry.
Easy for you to say Caroline. Im mortally
wounded, I reply.
How about lunch sometime? she asks.
Thanks but I dont think so. Ive got a lot on at
the moment. I reach for Emmas hand and
hold it tightly. City Dad will continue next
Tuesday. For past episodes, see cityam.com
SHAVING CREAM
Youll probably find some Lancme in
every womans cupboard, and with good
reason, as the mix of reliability and luxury
is a winning one. This high definition shav-
ing foam is rich, softens the beard and
allows a smooth shave. Has a masculine
woody fragrance.
Lancme Men High Definition Shaving
Foam, 17.50 www.johnlewis.com
MOISTURISER
Theres a reason why women swear by Dr
Sebagh the backstage secret behind the cat-
walk. Quite simply, it works. This post-shave
serum not only moisturises, making your skin
supple and firm, but also repairs the rough and
tumble your skin goes through.
Dr Sebagh Serum Repair, 69
www.drsebagh.com
BADGER HAIR SHAVING
BRUSH
Apply your cream properly with one
of these. Fashioned from badger
bristle, wenge wood, burnished
brass your chin will thank you for
it after a brush with this beauty.
Acqua di Parma badger hair
shaving brush, 194.99
www.liberty.co.uk
THE ESSENTIAL TOOLS
SCRUB
An Eve Lom cleanser is a thing of legend
and has evolved into something perfect
for the man who shaves. With extracts of
papaya, the cleanser gently exfoliates, and
the Egyptian chamomile helps with any
razor burn.
Eve Loms Morning Time Cleanser, 38
www.spacenk.com
Moisturising is nothing if youre still using a 5-week-old rusty disposable.
Equip yourself with the best for the ultimate home shave. If youre after a
lasting blade with 24 carat gold, and a brush with animal hair, look no further.
THE CUT-THROAT RAZOR
The worlds oldest barbershop,
Truefitt & Hill in London, swears by
German-made Dovo razors that are
crafted in Solingen, the town
renowned for its blades since its
sword-making days.
Dovo of Solingen Bismarck Black
straight razor, 138.60
www.executive-shaving.co.uk
www.truefittandhill.co.uk
AFTERSHAVE BALM
With a bottle fashioned by for-
mer Dior Homme-genius Hedi
Slimane, this after-shave lotion
really does give you designer-
treatment. This is a lightweight
balm that soothes as it
moisturises.
Dior Homme Dermo System
repairing after-shave lotion, 37
www.boots.com
Galoupet
13 Beauchamp Place, SW3 1NQ
0207 036 3600; www.galoupet.co.uk
FOOD hhhii
SERVICE hhhhi
ATMOSPHERE hhhii
Cost per person without wine: 40
T
HERE is so much that is pleasing
about Galoupet. It looks like the
kind of place youd find in one of
those super-cool northern
European cities like Malmo or Arrhus,
frequented by thin-legged crowds of
effortlessly wealthy hipsters.
Or, if not to northern Europe, its the
kind of place that belongs to the future.
The dining room is a pale box, flooded
with natural light, lined with enomatic
wine dispensers and defined by sheer
lines.
But the food the food belongs to a
future in which everyone is thin. The
menu is completely without simple car-
bohydrate: no potatoes, bread, rice, pasta.
There is natural sugar in fruit, yes, and
sugar in the pudding menu. But probably
for the first time in my life, I felt neutral
(not full, not empty) after eating about
six plates at a restaurant. It was all herbs,
citrus, vegetable, fruit and small portions
of meat. It was, in short, a dieters para-
dise.
But was it a foodies paradise?
Sort of. The menu is beautiful and
enticing in its strangeness. One gets
bored of pork belly with mash and
dressed crab, after all. But its risky in the
sense that its fusion, melding Asian
influence with bits of Europe and the
T
HERE are a lot of champagne-
matched dinners to be had in
London. But few are as stellar, or
premium, as the one at Gordon
Ramsays relaunched Petrus in Belgravia
(not far from the old site at the Berkeley).
This is a 450 per head chance to sup on
Petrus chef Mark Askews finest dishes,
prepared in front of your nose, paired
with a host of Krugs to show off not just
the sophisticated, almondy taste of the
Champagne but the elegant way in
which it sets off the flavours of the food.
The dinner kicks off with plenty of
Krug Grande Cuvee to keep the amuse
bouche company sublime, tiny foie gras
and quince chips and smoked salmon bli-
nis with Oscietra caviar. Naturally.
The theme of well-honed decadence
continues with pressed foie gras with
Sauternes jelly and truffles a wondrous
slab of melting pink liver set off with a
daub of sunshine in the form of the jelly,
and all set alight with a glass of Krug
Vintage 1998 a fiercely well-made bub-
bly that knows its place.
The lightest dinner out in town
The last word in dinner: the Krug experience at Petrus
Middle East. Thai pork salad meets
Scandinavia with cured wild sea bass,
seaweed and pickled elderberry. Lebanon
(or is it the Deep South?) hovers with
corn-crusted courgettes with red pepper
marmalade and goats curd. Italys here
too: burrata with grilled fennel and
orangeand purple shiso. Does the menu
deliver on its promise of being delicious
and different?
Sort of. I have something of a fetish for
multi-courses of vegetables dressed in
Asian-style sauces with a bit of this and a
bit of that thrown in. Im known for my
wacky salads. But whichever way the
cookie crumbles, grilled watermelon in a
savoury salad wont fly. I once had it in
Bangkoks best restaurant, Nahm, and
hated it.
Tomato salad was goodwell, almost.
The tomatoes were a bit too spongey and
large (a bit late in the season, perhaps) to
merit being the star attraction but the
vinaigrette was perfect.
Thai pork salad was the only real disap-
pointment (after all, some may like grilled
watermelon): it was basic in the extreme,
with a stinky marinade, fatty meat and
standard shards of iceberg lettuce.
Onwards and upwards, though: the bur-
rata was good small for 8 but melting
and cool with a welcome tang from the
orange. Norfolk white free range chicken
with miso, pear and ginger was excellent:
the miso adding to the chickens sticky
unctuousness, whereby the white meat
revealed itself moist and bright from
inside the richly sauced skin. We had
another couple of really super-healthy
dishes that put us firmly in line with the
thin, beautiful people of the future one
composed almost entirely of different
kinds of radish. The star turn which was
probably the most refreshing plate I have
ever had out consisted of mile-long slices
of granny smith apple with broad beans,
spring onions and a light dressing.
We didnt drink, and so I really think we
did miss out. Galoupet has a vinous
emphasis each dish is paired with a
glass. There are 36 wines on offer four
fine wines, four dessert wines, four
Galoupet wines and 20 everyday
wines. The food is light and piquant and
is made for wine twinning.
Galoupet can obviously do vegetables
and understands what is meant by light
dishes. Theyve tried to make a virtue of
them and almost succeed. If youre the
type who eats out in Knightsbridge or the
type who spares a thought for your calorie
intake (or both), then this slice of airy min-
imalism is an exciting new addition. I, for
one, was happy to be genuinely able to
breathe after the meal.
Lobster and Oscietra caviar linguini
with a champagne and chive veloute was
next the linguini a dense parcel waiting
to be unfolded and set afloat in the pale,
warm lobster gravy. With this the Krug
Collection 1989 shone brilliantly, offer-
ing a caramelly haze of nutty bite and
enveloping the food and us in a warm
halo of pleasure.
Then the veal ah the veal. Brought
to the table and carved in front of us,
this rack of English Rose with crispy
sweetbread and caper jus was a sym-
phony in carnivorous joy, engaging
all pleasure receptors in the mouth at
once. Melting pale pink meat with
belly fat; milky sweetbread and the
tart hit of caper jus made the perfect
mouthful. What did we drink along-
side it? Krug Rose, of course proba-
bly my favourite of the bunch, after
the 1989.
A beautiful cheese board came
next and understanding that
even Krug has its limits we
were given some rather special
Bordeaux (2007 Chambolle-
Musigny 1er cru, Les Charmes,
Domaine Hudelot-Noellat, to
be precise) to go with and were
jolly thrilled by it.
Tapering down, now, we are
kindly given a light pudding of
marinated pineapple with
coconut pannacotta, lime and
If youre tired of feeling full (and fat) after
eating out, Galoupet might just become your
new favourite restaurant, writes Zoe Strimpel
Dinner matched with
Frances nest zz
didnt disappoint
Zoe Strimpel
The small but airy-
feeling dining room at
Galoupet.
Above:
Petrus. Left:
the worlds
classiest
Champagne.
chilli syrup, served with a return to the
Grande Cuvee. Fresh-baked (and still
warm) madeleines came next and some
pretty chocolates.
Its a first-rate experience, perfectly
executed. Mark Askew, one of Ramsays
longest-serving chefs, has a wonderful
feeling for food. And the sommelier, the
award-winning, very youthful Johannes
Hartmann, is something of a genius as
well as being a charming chaperone for
the evening.
The chefs table is popular, so book
ahead if youre planning a Christmas spe-
cial treat for colleagues of family.
The Krug experience includes the tasting
menu and Champagne at 450 per guest based
on a minimum of 6 guests. To book, go to
www.gordonramsay.com/petrus or call 020
7592 1373/4.
Lifestyle | Restaurant Review
30 CITYA.M. 27 SEPTEMBER 2011
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Fill the grid so that each block
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above or to the left of it.
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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 Apartments (5)
4 Multiplication (5)
7 Gown (4)
8 German submarine in
World War II (1-4)
9 Measures of land (5)
11 Feasible
alternative (11)
15 At a great
distance (3)
16 Done with careful
diligence (11)
19 Board used as a
planchette (5)
21 Small drum played
with the hands (5)
22 Soft light (4)
23 Do without (5)
24 Joint of the leg (5)
DOWN
1 Dowdy woman (5)
2 Snares (5)
3 Chronic drinker (3)
4 Afternoon meal (3)
5 Cocktail of vermouth
and gin (7)
6 Unassertive man
or boy (5)
10 Slacken of (5)
12 More lustrous (7)
13 ___ and buts,
objections (3)
14 Brother of George
Gershwin (3)
16 Evidence (5)
17 Understood (5)
18 Item worn on the hand (5)
20 In the past (3)
21 Flufy scarf of
feathers (3)



4
4



4
G R U F F B A R R Y
L M O G E
A P R E B E C C A
N O T E S I E
D E A B A S E D
S P E C K I M P E L
U N R E E L S A
M A M U T E D
B I C Y C L E E I
C O N I E
S E I N E T O N G S
3 5 7 9 2 1 8 3
6 7 9 8 4 2 9 1
1 6 1 8 5 3
2 3 9 6 4 7 8
2 1 4 7 3 1 9
4 9 8 6 1 2 4 6
1 8 9 3 7 6 8
2 4 5 3 1 2 1
9 8 2 6 3 2
6 1 7 5 1 6 5 3
9 5 8 7 8 9 6 5
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
SHELLFISH
E
R
L
W
A T
E
H
C
Lifestyle | TV&Games
31 CITYA.M. 27 SEPTEMBER 2011
Results
ENGLAND lock Courtney Lawes con-
cedes he faces an uphill struggle to
win back his starting place at the
World Cup, with the team having
gone from strength to strength in his
absence.
Lawes has missed the last two
games, a flawed thrashing of Georgia
followed by an impressive demolition
of Romania, after being cited for strik-
ing an opponent in the scrappy open-
ing win over Argentina.
But he is back in contention
for Saturdays Pool B show-
down with Scotland, and hop-
ing to convince manager
Martin Johnson that he is
ready to return and
book Englands
place in the last
eight.
There was
a very good
game at the
w e e k e n d
[ a g a i n s t
Ro ma ni a ]
and a lot of
the boys
played really
well, he said. In
training this week I
have to do whatever I
can to try and get back
into the team. The next
couple of days will tell
when I find out the
team.
The 22-year-old still
views his citing, for kneeing
Pumas hooker Mario
Ledesma, as harsh but says he did not
take up the opportunity to appeal
because he could not risk having his
punishment increased.
I thought it was a bit harsh but
what can you do? You just have to get
on with it and take it on the chin and
thats what I have done, he added.
It has never happened before. I
didnt try and do anything malicious,
Im always physical but I dont aim to
hurt people, thats just part of my
game.
There was no point in risking it
[an appeal]. If I miss out on Scotland
then I might struggle to get back into
the team for the quarter-finals.
I have only been cited once in
the five years I have been playing so
it is pretty rare and I dont think it
is going to happen again soon.
England will find out today
whether they face more disci-
plinary action, relating to fly-
half Jonny Wilkinsons
attempts to change balls
against Romania on
Saturday.
Rules state that a ball
can only be changed in
between try-scoring and
conversion if it is defec-
tive something
Wilkinson twice
attempted.
England, who have
already been warned
by officials after the
numbers peeled off their
shirts, face a possible fine
if found guilty of break-
ing either the laws of
the game or the World
Cup participation agreement.
Lawes faces
battle to win
back England
starting spot
BY FRANK DALLERES
RUGBY UNION

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email sport@cityam.com
Sport 32 CITYA.M. 27 SEPTEMBER 2011
B
ILL HAAS will have woken up
yesterday morning not only sig-
nificantly wealthier, but also in
the knowledge that when peo-
ple debate the greatest shot of all time,
his recovery on the second play-off
hole at the Tour Championship will
always be mentioned.
SHOT OF THE CENTURY
The staggering $11.5m prize on offer
to the victor only added to the level of
difficulty, and for Haas to have put it
virtually stone dead from a position
where his ball was partially sub-
merged in water, not to mention the
fact he was playing blind over a steep
bank, represented the shot of the cen-
tury.
As a pro you wouldnt necessarily
practise a shot from that lie, but as
soon as Haas saw what he was faced
with he wouldve recognised the need
to address it as a regulation bunker
shot.
From then on it was about trusting
and committing fully to the shot
the outcome was extraordinary and
clearly represented a knockout blow
to his opponent Hunter Mahan.
Haas comes from a terrific golfing
family, I competed against and know
his father Jay extremely well, and
Sundays win has propelled him into
the big-time which is where a golfer
of his ability should be.
Aside from that drama, it was
another excellent performance from
Luke Donald, who finished third, and
ends the year as world No1. People
might dwell on the fact a Major still
eludes him but hell have no regrets
looking back on his performances in
2011.
JOY FOR EUROPE
Talking of dramatic finishes, hearty
congratulations go to the European
women who wrestled back the
Solheim Cup from Americas grasp in
Ireland also on Sunday.
In team match play events its very
difficult, especially on the final day
when theres so match activity on the
course, to blank everything out and
concentrate solely on your own game,
that really is the key to success.
With America, who had won the
previous three renewals, leading, it
wouldve been easy for the final three
Europeans to panic, but they showed
admirable composure and no little
skill to turn things around to seal a
memorable win.
A SMART APPOINTMENT
After such an exciting weekend, news
of Joe LaCavas appointment as Tiger
Woods new caddy somewhat slipped
under the radar.
Clearly Tiger has some issues with
his game at the moment that wont
be fixed by his bag man, but if hes
ever to rediscover his former glories
this was a decision he needed to get
spot on and I firmly believe he has.
LaCava is a terrific guy who boasts a
wealth of experience having spent
the majority of his career working
with Freddie Couples. Latterly he has
overseen Dustin Johnsons rise to
prominence and Im delighted hes
landed such a high-profile job.
Haas escape was the shot of the century
SPORT | IN BRIEF
Broad hopeful of touring India
CRICKET: England fast bowler Stuart
Broad is targeting an international
return in the Twenty20 game with India
next month. Broad tore a muscle in his
shoulder during the one-day internation-
al against India at Lords earlier this
month and feared he wouldnt play again
in 2011, but is now confident of facing
India in Kolkata on 29 October. Its
going to be okay, the Nottinghamshire
seamer said. Ive got it in mind that I
want to play that Twenty20 game in
India.
Hamilton needs more support
FORMULA ONE: Under-fire Lewis
Hamilton needs more support from his
management team, according to the
McLaren stars father Anthony. The
2008 world champion clashed with
Ferraris Felipe Massa during a frustrat-
ing weekend in Singapore in the latest of
a number of high-profile incidents this
season. Asked whether Hamilton needed
another manager, his father replied:
What I will say is look up the paddock;
every driver thats got a driver manager,
the manager is here [in Singapore] and
in the drivers life.
Paralympic ticket demand high
OLYMPICS: Sessions in several sports
were oversubscribed for the first time in
Paralympics history during the window
to apply for tickets, which closed yester-
day. Ballots will be held for sessions in
track cycling, swimming and the final
rounds of wheelchair rugby and wheel-
chair tennis at next years Games.
London 2012 chairman Sebastian Coe
said: We have a head-start with
Paralympic sport in Britain.
GOLF COMMENT
SAM TORRANCE
Williams scored a hat-
trick on his full debut.
Picture: ACTION IMAGES
Sport
33 CITYA.M. 27 SEPTEMBER 2011
CHELSEA striker Fernando Torres
hopes his new-found ruthlessness in
front of goal will help repay loyal
Blues fans who backed him through
his drought.
Torres goal against Swansea on
Saturday, following his effort at
Manchester United six days previous-
ly, means he has now scored in suc-
cessive games for the first time since
his 50m January move from
Liverpool.
Obviously, when you are doing
great, scoring goals from the first day
and doing good performances, its
easy for the fans to love and support
you, he said. But the first six
months for me at Chelsea have been
very, very difficult and I have been
struggling, and I have always had the
support of the fans. From the first day
till now, every time I talk with them
on the street, the cafe, I can feel the
support they are giving me so it is
nice to start scoring for them.
The Spaniards goal against the
Swans was soured slightly by his sub-
sequent straight red card his first in
the Premier League for a lunge on
Mark Gower. It means Torres will
serve a three-match domestic ban,
but he is likely to get the chance to
build on his scoring run tomorrow
against Valencia.
Its a pity and Im really disap-
pointed for that, said Torres, reflect-
ing on his dismissal.
Its the first time I have received a
red card in the Premier League and I
hope its the last one. It was really dis-
appointing, especially because the
team had to play with 10 men.
Ill repay loyal Chelsea fans with
goals, swears revitalised Torres
FOOTBALL

WALES coach Warren Gatland admits

it took a half-time dressing down to
inspire his team to their biggest ever
World Cup victory yesterday against
Pool D whipping boys Namibia.
Gatlands men looked on course for
a huge score after claiming three tries
inside the first 17 minutes centre
Scott Williams, wing Aled Brew and
No8 Toby Faletau all going over.
They then eased off, however
until Gatland tore a strip off them at
the break, and they responded by
running in a dozen tries and etching
several new entries in the record
books.
Williams, 20, completed a hat-trick
on his full debut, teenager George
North became the tournaments
youngest ever try scorer and fly-half
Stephen Jones broke the 900-point
mark on his record 101st appearance.
We started off with 22 points in
the first 15 minutes [sic], I think, and
then the guys felt the game was all
over, went to sleep and stopped being
aggressive, said Gatland.
They got a bit of a rollicking at
half-time and came out in the second
half and did the job. The impact off
the bench was really good and over-
all, with the number of changes we
made for the game 11 Im really
pleased. The bonus-point triumph
lifted Wales ahead of Samoa to sec-
ond in the pool and put them on
course for the quarter-finals, where
they look likely to face Six Nations
rivals Ireland.
Replacement winger North
claimed a second try while there were
also scores for prop Gethin Jenkins,
centre Jonathan Davies, full-back Lee
Byrne, replacement scrum-half Lloyd
Williams and second-row Alun Wyn-
Jones.
No10 Jones became the first Wales
player to exceed a century of Test caps
and celebrated the occasion by kick-
ing 15 points to breach the 900 mark,
although his day was tainted when
his pass was intercepted and Heinz
Koll darted 40 metres to touch down.
Captain Sam Warburton said:
Namibia made it very tough for us,
particularly in the contact area which
was a bit of a disappointment from
our point of view. But credit to the
boys, we got 12 tries and the all-
important bonus point.
Gatland refused to get carried
away, insisting there was still work to
be done before Fiji on Sunday. He
added: The disappointing thing of
the night was the scrums were pretty
messy, there were a lot of penalties,
but well have a look at the tape and
sit down over the next couple of days
and look at the side for Fiji.
Gatland reads
the riot act to
inspire Welsh
landslide win
BY FRANK DALLERES
RUGBY UNION

81
7
WALES
NAMIBIA
South Africa 3 3 0 0 2 14
Wales 3 2 0 1 2 10
Samoa 3 2 0 1 2 10
Fiji 3 1 0 2 1 5
Namibia 4 0 0 4 0 0
POOL D
TEAM PLD W D L BP PTS
THE BREAKDOWN | WORLD CUP BRIEFS
IRELAND FIGHTING FIT
IRELAND trio Sean OBrien (bruised
arm), Rob Kearney (jarred knee) and
Keith Earls (dead leg) are all
expected to recover from
the injuries they picked up
in last weekends win
over Russia in time for
Sundays pivotal Pool C
clash against Italy.
Meanwhile, Paul
OConnell, Gordon DArcy
and Tommy Bowe, who all
missed the 62-12 win over
Russia, all trained with the team
today for the first time in over a week.
LOBBE BLOW FOR PUMAS
ARGENTINAS World Cup hopes have
been rocked by the news that vice-cap-
tain Juan Fernandez Lobbe (inset) has
been ruled out of the rest of the tour-
nament after suffering a knee liga-
ment injury during Sundays
13-12 win over Scotland.
BOKS SET FOR BATTLE
SOUTH AFRICA are ready-
ing themselves for a Samoan
physical onslaught ahead of
Fridays Pool D clash. The
Pacific Islanders are in with an
outside chance of reaching the last
eight and Springbok hooker Bismarck
du Plessis believes Samoa possess one
of the most effective scrums in the
tournament. I think their scrums are
superb and it was one of their main
weapons against Fiji, he said.
Talismanic lock Victor Matfield, mean-
while, is likely to feature after damag-
ing his hamstring against Wales a
fortnight ago.
POCOCK BOOST FOR AUSSIES
AUSTRALIAS No7 David Pocock has
declared himself fit for Saturdays final
Pool C clash against Russia. The 23-
year-old missed the surprise defeat
against Ireland two weeks ago with a
back injury. I am available for full
training and selection this week, which
is pretty exciting, he said. I did a run-
ning session yesterday morning and it
was great to be doing a bit of fitness
and moving freer. I was getting cold
though my hands were freezing.
Sport
34
SPRINT sensation Mark Cavendish
may well have secured an anticipated
move to Team Sky after his World
Championship heroics in
Copenhagen, according to his Great
Britain team-mate Geraint Thomas.
The Isle of Man speedster has yet to
announce which colours he will ride
in next season, with his current team
HTC-Highroad set to disband.
Thomas was part of an eight-strong
GB team that helped propel
Cavendish to glory on Sunday, cap-
ping a sensational year for the 26-year-
old, who also won the prestigious
Milan-San Remo and claimed the
green jersey at the Tour de France.
Most of us there on Sunday are in
Sky and good mates of Cav, said
Thomas. Hes obviously been talking
to them [Sky]. He wants to come, I
think Im pretty sure of it.
To be leading out the world cham-
pion next year would be really special.
I dont think he really needs telling
how good itd be.
British Cycling performance direc-
tor Dave Brailsford, who also runs the
Team Sky squad, believe Cavendishs
world road race win was the result of
one of the best team displays in the
history of the sport.
Cavendish stole the headlines by
becoming the first British male to don
the rainbow jersey in 46 years, but
Brailsford was keen to stress the
importance of his team-mates who
managed to control the peleton and
deliver the Manx Missile to the front
right on cue.
Everybody played their part but
special credit must go to team captain
David Millar for keeping it all togeth-
er and that final lap by Bradley
Wiggins was just incredible, he said.
Team Skys the limit for world champion
Cavendish, insists GB colleague Thomas
BY JAMES GOLDMAN
CYCLING

MANCHESTER UNITED manager Sir

Alex Ferguson insists only once his
side have claimed a fourth Champions
League crown can they claim to be
enjoying a golden period in their
European history.
United have contested three of the
last four finals, a return which not
even current holders Barcelona can
match, but the schoolings the Premier
League champions received at the
hands of the Catalans in Rome and at
Wembley have left Ferguson with a
sour taste.
Its not a golden period for us
because we have lost two finals, so I
dont think it can be called a golden
period, said Ferguson ahead of
tonights meeting with FC Basel.
We have been consistent in the
Champions League, our form away
from home has been outstanding and
we hope we can do better this year
and win it, thats the aim of this club
all the time.
United will again be without lead-
ing scorer Wayne Rooney and
Ferguson was unwilling to put a date
on his possible return. The England
striker missed Saturdays draw at
Stoke with a hamstring strain and will
be joined on the sidelines by Javier
Hernandez.
Hes not playing tomorrow. Its dif-
ficult to assess with hamstrings but
we hope we have him back quickly. He
did a bit of jogging this morning but
thats all, said Ferguson.
Basel won their opening fixture in
Group C 2-1 against Romanian side
Otelul Galati, while United were for-
tunate to escape with a draw from
their visit to Lisbon on match day one.
Ferguson
determined
to improve
Euro record
BY JAMES GOLDMAN
FOOTBALL

MANCHESTER UNITED
BASEL
Cavendishs HTC-
Highroad team will
dissolve at the end of
the season
Pic: ACTION IMAGES
ARSENAL and England have been
rocked after midfielder Jack Wilshere
was told his persistent ankle prob-
lems will keep him sidelined for most
of the rest of the campaign.
Wilshere, who broke down during
pre-season and has not played since,
underwent surgery on a stress frac-
ture yesterday after attempts to let it
heal naturally failed.
The Gunners later said the
midfielder (inset), who
emerged last season as
a key figure for both
club and country, is
expected to be out
for as long as five
more months.
The initial
indications are
that the surgery
has been success-
ful and Jack will
now undergo a pro-
longed period of
rehabilitation, Arsenal
said in a statement. It is
envisaged that Jacks rehabili-
tation will take a period of four to five
months.
It is a bitter blow to Arsenal, who
are already enduring a very difficult
start to the season and could desper-
ately use Wilsheres drive and creativ-
ity. They are tipped to be in a
three-way scrum for fourth place, and
a lucrative Champions League spot,
with Liverpool and north London
rivals Tottenham.
Before Saturdays defeat of 10-man
Bolton they languished in 17th place,
and have suffered demoralising
reverses at Manchester United and
Blackburn this term.
Manager Arsene Wenger is also
already without two of his most cre-
ative players from recent seasons,
after selling Cesc Fabregas and Samir
Nasri in the summer.
His setback will also come as a con-
cern to England head coach Fabio
Capello, with next summers
European Championships on the
horizon.
Wilshere, 19, is projected to be fit
for the tournament but will
have, at best, the final three
months of the season in
which to achieve form
and fitness.
He will miss next
months final Euro
2012 qualifier in
Montenegro
Englands final
competitive fix-
ture before next
summer.
Wilshere last
played in late July
against New York Red
Bulls in the Emirates Cup,
when he limped off early on
with pain in his ankle.
Wenger, who considered it minor
at the time, has blamed it on a knock
he picked up playing for England
against Switzerland in June.
England boss Fabio Capello, in
turn, insists Wilshere has a weak spot
on his ankle owing to another injury
two years ago.
Wilshere had been wearing a pro-
tective boot in an attempt to cure the
problem through rest, but revealed
on Friday night that he would need
surgery after all.
England blow
as Wilshere
ruled out for
five months
BY FRANK DALLERES
FOOTBALL

Hargreaves won
the Champions
League with
Bayern in 2001
Picture: ACTION
IMAGES
NORWICH catapulted themselves
into the top half of the Premier
League table following their first
home win of the season at the
expense of Sunderland.
Centre-back Leon Barnett put the
Canaries ahead in front in the 31st
minute after winger Elliott Bennett
cut into the penalty area and deliv-
ered low across the face of goal.
It was Barnetts maiden Premier
League strike, a feat matched by sum-
mer signing Steve Morison, whose
bullet 48th minute header gave
Sunderland goalkeeper Simon
Mignolet no chance.
Kieran Richardson set up a tense
finale when he drilled in a late conso-
lation, but Norwich held firm to
record back-to-back top flight wins.
Manager Paul Lambert said:
Winning away last week at Bolton
was terrific and getting your first win
at home is a big step. Were new to it
but were playing very well at this
moment in time.
Stuttering Sunderland downed
by Lamberts improving Canaries
MANCHESTER CITY manager Roberto
Mancini has reiterated his belief that
the Premier League upstarts can
ignite their maiden Champions
League campaign with victory at one
of Europes traditional superpowers.
Mancini joked in the aftermath of
the 1-1 draw at home to Napoli
Citys opening Group A fixture that
his team would make up for the
dropped points by going to
Germanys biggest side and winning.
It was a tongue-in-cheek remark
from a man enjoying his best spell at
the club, but the Italian was not jok-
ing yesterday when he insisted they
could reasonably expect three points
from their toughest fixture.
Why not? We are not here to lose,
he said. We know it will be difficult
but we want to win if possible. I am
certainly satisfied with the progress
we have made, even if we need to
improve a lot.
Now we are a good team. But if we
want to arrive on the top like Bayern
Munich, who have such a big history,
we need to work very hard. Against
Napoli we just wanted to win. With
that pressure you can make some
mistakes. Here it will be different
because we know it will be a tough
game. I am sure we will do well.
Mancini has midfielder Nigel de
Jong fit again after his recovery from
a foot injury, while striker Carlos
Tevez is pressing for a place, especial-
ly with Mario Balotelli suspended.
Even without the precocious
Italian, City are spoiled for choice in
attack and midfielder David Silva,
who has arguably shone brightest of
an all-star line-up, believes they
should take the game to Bayern.
City, who have already racked up
22 goals in eight games, meet per-
haps the biggest test of their potency
yet in a team who are currently enjoy-
ing a run of nine successive clean
sheets.
I think we can attack them like we
do at home; we can stick to our foot-
balling principles. We dont have to
change our style against other teams
home or away, said Silva.
We believe in what we are doing
and have confidence in each other so
we will keep doing the same things.
The truth is Napoli played very well
against us. They are a strong team.
But against Bayern we will try the
same things to keep the ball, play
with the same style and get a positive
result.
Tonights fixture is a first return to
Bayern as a City player by Owen
Hargeaves. The former England mid-
fielder, who made a goalscoring
return from a three-year injury night-
mare in the Carling Cup last week, is
not expected to start.
Euro aristocrats
Bayern hold no
fear for Mancini
and Man City
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You could also benefit from the expertise Michelin has derived from motorsport with
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Experience the performance at www.michelin.co.uk/experience-the-performance
BY FRANK DALLERES
FOOTBALL

BAYERN MUNICH
MANCHESTER CITY
KNOW YOUR ENEMY | BAYERN MUNICH
FORM
After the ignominy of having to pre-
qualify for the Champions League,
Bayern have begun the current cam-
paign in imperious form. Theyve won
six of their seven league matches scor-
ing 21 goals, including a 7-0 thrashing
of Freiburg earlier this month. They
began their European assault with a 2-
0 win away against Villarreal.
MANAGER
Veteran Jupp Heynckes, 66, is back for
his third spell at the club and the early
indications suggest this could be
the most successful reign of
them all. He won two
league titles with Bayern
in the late 1980s before
embarking on a successful
career in Spain which saw
him steer Real Madrid to
Champions League glory in
1998. Last year he guided
Bayer Leverkusen back into
European footballs premier club com-
petition for the first time since 2004.
STAR MAN
Striker Mario Gomez (left)
endured a mediocre first
year at Bayern but
responded by landing the
Bundesliga Golden Boot
last season, scoring 28
goals in an underperforming
side. The 26-year-old Germany
international already has eight
goals to his name this season.
35
LAWES HUNTS INSTANT
ENGLAND RECALL
LOCK AVAILABLE AND EAGER
TO PLAY AGAIN: PAGE 32
Bayern 1 1 0 0 2 0 3
Napoli 1 0 1 0 1 1 1
Man City 1 0 1 0 1 1 1
Villarreal 1 0 0 1 0 2 0
GROUP A
TEAM PLD W D L F A PTS
BY JAMES GOLDMAN
FOOTBALL

NORWICH
SUNDERLAND
2
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