PREMIUM
TICKETS
Issue 1,215 Wednesday 8 September 2010
EXODUS FEARS AS
BANKS RESHUFFLE
BANKING
▲
BY VICTORIA BATES
A SHAKE-UP at the helm of two of the
UK’s largest banks is fuelling fears
that the country could lose its top
banking institutions overseas due to
an over-zealous approach to regula-
tion of the industry.
Barclays yesterday shocked the
markets by appointing Barclays
Capital boss Bob Diamond to run the
business. Current chief executive
John Varley will retire next year. The
turmoil was compounded by the deci-
sion of HSBC chairman Stephen
Green to step down before the end of
the year end to take up the position of
trade minister.
Analysts are warning the new chief-
tains make the prospect of a high-pro-
file relocation for either bank look
ever more plausible if the govern-
ment decides to go ahead with legisla-
tion to split up retail and investment
banking operations.
Diamond, a US-born investment
banker, has fewer ties to the UK than
his predecessor Varley and has been
an impassioned defender of the inte-
grated banking model. HSBC is yet to
appoint a successor to Green, but a
decision to install a chairman with
substantial Eastern ties could prove
crucial to future relocation plans.
Current chief executive Mike
Geoghegan, one of the top contenders
for the role, relocated to Hong Kong
earlier this year; while the man seen
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BUSINESS WITH PERSONALITY
ROONEY SCORES AWAY
FROM HOME IN KEY WIN
STRIKER FIRES ENGLAND
(L-R) Bob Diamond, Stephen Green and Marcus Agius are all changing jobs
as the favourite to step up to the plate
– Barclays non-executive director and
ex-Goldman Sachs banker John
Thornton – has extensive ties to Asia.
The government refused to com-
ment on Diamond’s appointment yes-
terday, saying it was a matter for
shareholders. But one government
minister described the choice to the
BBC as a “bank taken over by casino”
while there was a feeling among anti-
City forces in Westminister that the
move was a provocation. Friends of
Vince Cable – a critic of the City and
of Diamond – said that he would be
outraged by the move, while Lib Dem
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Pictures: Micha Theiner/City A.M., REUTERS
Treasury spokesman Lord Oakeshott are headed by those who have no par-
said: “We have pledged to tackle unac- ticular emotional or business interest
ceptable bonuses and to reduce risk: to keep their operations headquar-
‘Bonus’ Bob Diamond personifies tered in the UK, that is bound to
both of those things.” speed up discussions over potential
City figures warned the backlash moves overseas.
will make an exodus even more likely. “I wouldn’t be raising the panic
“Nothing preordains that these insti- flags now, but if Bob Diamond were
tutions are based in the UK – if they to look someone in the eyes and say
go on making it uncomfortable for he wants to move, it would take a
banks to operate here, then politi- brave man to call his bluff.”
cians are going to get a rude awaken- In yet another move, Barclays chair-
ing at some point,” one investment man Marcus Agius is stepping up to
banker told City A.M. yesterday. chair the British Bankers’ Association.
Tim Linacre, boss of stockbroker ALLISTER HEATH: P2,
Panmure Gordon, added: “If banks BANKING MERRY-GO-ROUND: P4-5
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Hurd sued
by HP over
Oracle job
▲
TECHNOLOGY
BY EMMA SADOWSKI
MARK HURD, the former chief execu-
tive of Hewlett-Packard (HP), is being
sued by the computer company over
his move to join rival Oracle.
Hurd was appointed as co-president
and director of Oracle, the world’s
third-largest software maker, yester-
day and just one month after he
resigned from HP.
HP has alleged that Hurd’s move to
Oracle puts its own trade secrets “in
peril” as his move will “give Oracle a
strategic advantage as to where to
allocate or not allocate resources and
exploit the knowledge of HP’s
strengths and weaknesses”.
A statement filed with the
Supreme Court in Santa Clara said:
“In his new position, Hurd will be in a
situation in which he cannot perform
his duties for Oracle without neces-
sarily using and disclosing HP’s trade
secrets and confidential information
to others.”
But Hurd’s separation agreement
with HP did not have a non-compete
clause contained within it. It did,
however, have a two-year confidential-
ity pact. Non-compete clauses are gen-
erally unenforceable in California.
Hurd resigned from HP on 6
August after the company said he
filed inaccurate expense reports relat-
ed to a marketing contractor, Jodie
Fisher, who worked for his office.
Fisher accused Hurd of sexual harass-
ment, but HP has found no evidence
to back her allegations.
HP and Oracle are direct rivals.
Certified Distribution
05/07/2010 till 01/08/10 is 94,889
 2 News
Diamond is the right man for the job
EDITOR’S LETTER
ALLISTER HEATH
GOOD on Barclays for promoting Bob
Diamond, head of the bank’s invest-
ment banking unit, to be the firm’s
overall chief executive. He is the best
man for the job, proving himself again
with the successful integration of
Lehman’s US operations. Yet given
Diamond’s demonisation in the
broadcast media and popular press,
not least by the likes of Vince Cable
and even the prime minister, it was a
brave move; it was also a strong state-
ment by one of the few banks that did-
n’t require a taxpayer bailout that it
will do what is best for its global share-
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WHAT THE OTHER PAPERS SAY THIS MORNING
EUROZONE FEARS SEND INVESTORS TO
HAVENS
Investor worries over the Eurozone
have deepened, hitting the markets
of the single currency’s weaker
economies and sparking a flight to
the safety of US Treasuries, German
bunds, the yen and the Swiss franc.
Global equities lost ground and the
euro weakened on Tuesday, while
European bank stocks came under
pressure as doubts over the conti-
nent’s financial system resurfaced.
DANA PITCH FOR HIGHER KNOC OFFER
FALTERS
Dana Petroleum has made a last-ditch
attempt to convince a group of its
largest shareholders to demand Korea
National Oil Corp raise its $1.87bn
hostile offer. Dana, which is due to
issue its official defence document on
Wednesday, has approached a collec-
tion of institutional investors and
holders, rather than pander to vote-
hungry, City-hating UK politicians.
This is something that ought to reas-
sure markets: shareholders are still
nursing big losses from the financial
crisis, even from the better managed,
non-bailed out firms such as Barclays.
As a result of the dominant narrative
of the recession, the politics of envy has
made a spectacular return. One of the
main objections to Diamond’s appoint-
ment yesterday was that Barclays’ CEO-
designate was too wealthy; apparently,
only poor bankers or those willing to
work for much lower salaries should be
allowed to run banks. But given that
taxpayers did not bail his bank out,
that part of his fortune comes from his
stake in a very successful wealth man-
agement arm he helped to build up for
Barclays, and that he will be paying
vast amounts of tax when he moves
back to the UK, it is hard to see what
the problem is with Diamond’s
wealth. If Barclays’ customers object,
they are free to move their business.
Barclays, like other banks, has
Tube strike
causes chaos
TRANSPORT
▲
BY EMMA SADOWSKI
THE TUBE is expected to run a nor-
mal service today, according to
Transport for London (TfL), after the
strike by London Underground (LU)
workers triggered intense disruption
in London yesterday. However, more
people than expected braved the
strikes and came to work.
By 5pm last night TfL said it was
already operating one-third of its
trains throughout the network, but
delays continued past 9pm, when
strikers returned to work, as LU
moved to get the trains on the right
tracks. Commuters walked and
cycled as a number of station clo-
sures, slower trains and increased
buses gridlocked traffic on the capi-
tal’s roads.
“I stayed over in London last night
hedge funds to marshal support for a
higher offer.
EQUITIES SEEN AS NEW FOCUS FOR
BANKS
Equity derivatives and increased
leverage will be key to revenue
growth for the global investment
banks in the next couple of years,
with the big US and Swiss groups best
positioned to prosper, according to a
JP Morgan report on the sector.
ELAN HITS BACK AT CONFLICT OF
INTEREST CLAIMS
Elan, the Irish drug company, stepped
up an unusual defence against a cata-
logue of alleged conflicts of interest
and corporate governance failings. In
a letter to shareholders, Kelly Martin,
the chief executive, confirmed con-
nections that he and other directors
had with external companies, includ-
ing some that did business with Elan,
while arguing that they did not act
against shareholders’ interests. He
accused Ib Sonderby.
reformed its compensation practices
to put emphasis on long-term incen-
tives; there is nothing in Diamond’s
new employment contract which will
fuel short-term risk.
Investment banks are not casinos;
and even if they were, critics should
remember that the central rule of
gambling is that the house always
wins. Casinos always make money;
they don’t go bust – so in that sense
“casino banking” should be a good
thing for taxpayers, shareholders and
the stability of the banking system. I
jest, of course, but the terminology of
this debate is truly idiotic.
What makes banking dangerous
are traditional loans: it is those that go
dud and bring down economies, not
trading. Another weakness is the mis-
match between the duration of assets
(loans) and liabilities (bank deposits or
money market borrowing) but again
this is nothing new. Despite the new-
fangled derivatives, this recession was
very much like all the others. Sub-
prime lending was at the heart of the
at a huge cost to myself in order to
miss the chaos. Then my taxi driver
refused to take me to Canary Wharf
due to the traffic, so I had to walk to
my meeting in any case,” said Michael
Derbyshire of Savills.
On Monday evening, LU workers,
members of the RMT and Transport
Salaried Staffs’ Association (TSSA)
trade unions, launched the strike in a
protest to plans by TfL to axe up to
800 staff.
More strikes could occur on 3
October, 2 November and 28
November if tensions continue.
London Underground
boss Howard Collins is
being called on by the
unions to stop plans to
cut 800 jobs.
OUT GO JEANS AS DUNCAN DROPS
INTO THE LUXURY CAR BUSINESS
Andy Duncan, the former head of
Channel 4 and possibly one of the
scruffiest chief executives to have led
a large British commercial organisa-
tion, has landed a job where a hand-
crafted suit and Hermes tie are de
rigueur: running the HR Owen luxu-
ry car group. In an extraordinary and
abrupt change of career direction, Mr
Duncan has swapped Big Brother and
Hollyoaks for selling Rolls-Royces and
Ferraris.
GOVERNOR BRACED TO FACE TUC
SHORT OF BROTHERLY LOVE
Mervyn King will walk into a political
bear pit next week when he becomes
only the second Governor of the Bank
of England to address the annual
Trades Union Congress. Delegates are
gearing up for the most highly politi-
cised annual conference.
CITYA.M. 8 SEPTEMBER 2010
NEWS | IN BRIEF
Ryanair boss mulls buying spree
Ryanair boss Michael O’Leary has
revealed he is considering buying up to
financial crisis; at its most basic, a tra- 300 planes. The European budget airline
ditional form of retail banking gone boss says he is also writing to aviation
wrong. Investment bankers repack- authorities, asking for permission to
aged the bad loans; but they only got have only one pilot per flight. The airline
that opportunity because of stupid, is preparing to pay its first dividend of
traditional lending decisions. €500m (£414m) next month – but a
Instead of bashing those who pro- spending spree could ruin hopes of
vide huge tax revenues and employ future payouts.
tens of thousands of Londoners, the
government ought to focus its atten- Capital increase for Greek bank
tion on 2010’s real financial disgrace: Greece’s largest lender National Bank
the abysmal failure of HMRC and its announced a €2.8bn (£2.3bn) capital
computerised pay as you go income increase yesterday to better deal with
tax system to get its sums rights. the economic crisis and position for fur-
Around 1.4m people are about to be ther expansion in Turkey and Eastern
sent letters demanding £2bn in under- Europe, the bank said.
paid tax, courtesy of official incompe-
tence. There ought to be a purge at FTI hires Lord Malloch-Brown
HMRC, with all top executives losing Lord Malloch-Brown, 56, has joined an
their jobs. Of course, it won’t happen, American corporate investigations and
just as the officials and central consulting group to spearhead its push
bankers who did so much to fuel the into emerging markets. The former
bubble have walked away unscathed. Foreign Office minister and United
It is high time politicians put their Nations deputy secretary-general has
own houses in order, rather than try been appointed chairman of global
and chase away successful UK firms. affairs at FTI Consulting, the business
allister.heath@cityam.com advisory group said yesterday.
CITY VIEWS: HOW WAS YOUR COMMUTE AFFECTED
BY THE STRIKE?
ZUBY UDEZUE | ACCENTURE
Interviews by Marion Dakers
“I was supposed to be working out in Hangar Lane today, but
it’s on the central line so obviously that’s not happening. I’ve
come into another office in Bank, using the northern
line, which was packed.”
ISAAC GASKIN | JEEVES
“I live in Paddington, but today the trip took two hours, four
buses and more than £7 in various fares. I’ve also seen
Trafalgar Square today, which is definitely not part of my
usual commute.”
PHIL HEALY | WILLIS
“There were loads of people trying to commute on the
streets, getting a bit angsty. I saw a few taken by surprise
by the typical London cyclists on the morning com-
mute, going through red lights and so on.”
GEORGE SOROS GIVES $100 MILLION ANHEUSER WINS PARTIAL VICTORY IN
TO HUMAN RIGHTS WATCH US COURT
George Soros, the billionaire finan- A federal judge here handed a partial
cier, is giving $100m (£65m) to a victory to the US arm of Anheuser-
human rights organisation in one of Busch InBev, ruling that an Illinois
the largest acts of philanthropy so far beer-distribution law discriminates
this year. Famous for betting against against out-of-state brewers. At issue
the pound when Britain was forced to is Anheuser’s bid to acquire a control-
withdraw from the Exchange Rate ling stake in its largest Chicago beer
Mechanism in 1992. distributor, City Beverage, which
could help the brewing giant com-
BANK CAPITAL RULES UNCERTAINTY pete more effectively the market.
SETS UP MARKET FOR AN ANXIOUS
WEEK OF WAITING BP TO TAKE SOME, NOT ALL, BLAME IN
A group of central bankers and regula- GULF-SPILL REPORT
tors from around the world agreed on BP’s report on its investigation into
the new capital requirements for the Deepwater Horizon disaster will
banks, however the industry will have assign some of the blame to itself but
to wait until after a further meeting also hold other companies responsi-
at the weekend to hear the final pro- ble for the various decisions that led
posals. On Sunday, the Group of to the explosion, said a person famil-
Governors and Heads of Supervision, iar with the matter. It is unclear how
the oversight body for the Basel much of the blame will be shoul-
Committee, will meet. dered by BP in the report.
CITYA.M. 8 SEPTEMBER 2010
Vodafone sells
£4bn stake in
China Mobile
▲
TELECOMMUNICATIONS
BY HARRY BANKS
VODAFONE, the world’s largest
telecommunications operator by rev-
enue, has sold its 3.2 per cent stake in
China Mobile for $6.6bn (£4.3bn).
The sale was part of Vodafone’s
new strategy to exit non-strategic
minority investments, which analysts
and investors believe have weighed
on the company’s overall value in
recent years.
Vodafone said UBS, Goldman Sachs
and Morgan Stanley were handling
the placing, managed by corporate
adviser Rothschild, and around 70
per cent of the net proceeds would be
returned to shareholders via a buy-
back, while the remainder would be
used to pay down debt.
Vodafone chief executive Vittorio
Colao has said the group’s minority
holdings are not considered essential
and it would focus on its core mar-
kets in Europe, Africa and India
instead.“Today’s transaction achieves
a near doubling of Vodafone’s origi-
nal investment in China Mobile and
combines our stated portfolio strate-
gy with ongoing cooperation with
China’s leading telecommunications
company,” said Colao.
The two groups said they would
continue to work together on issues
such as roaming and research.
After buying into China Mobile in
2000, Vodafone increased its stake in
2002, paying a total of $3.25bn.
At Vodafone’s AGM in July, some
shareholders criticised its chairman,
Sir John Bond, for the company’s “dis-
astrous” acquisition record.
ANALYSIS l Vodafone
p third parties were interested in buy-
159.90
7 Sep
155
145
135
7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
Potash boss Bill Doyle said BHP will be joined by other bidders
Sinochem seeks Temasek
help for rival Potash bid
MINING
▲
BY EMMA SADOWSKI
SINOCHEM, China’s state-owned trad-
ing company, has approached
Temasek to join a consortium of
firms looking to rival BHP Billiton’s
bid for Canada’s PotashCorp.
The move by Sinochem comes after
Chinese authorities demanded state
companies meet with investment
bankers to look at ways to block BHP’s
$39bn (£25.4bn) move for PotashCorp.
Bill Doyle, PotashCorp chief execu-
tive, said yesterday that a number of
ing the fertilising giant.
“There is a wide universe of poten-
tially interested parties and we
believe BHP will not be the only bid-
der,” said Doyle.
BHP has recently come under
immense pressure to sweeten its
$130-a-share bid for PotashCorp,
which has been called “grossly inade-
quate”.
News 3
Citigroup paid
on both sides
of EMI deal
PRIVATE EQUITY
▲
CITIGROUP investment bankers boast-
ed of getting paid on both sides of a
deal after the private equity group
Terra Firma made a £4.2bn bid for the
music group EMI, according to court
documents listed in New York yester-
day.
According to a filing from Guy
Hands’ Terra Firma, which alleges
that it was advised by Citi to pay more
than it needed to win ownership of
EMI, one of Citi’s bankers said: “Please
make sure that....David Wormsley and
me get revenue credit for Terra Firma
buyside financing as well as EMI sell-
side M&A.”
Banker Matthew Smith, went on to
write in response to congratulatory
messages from colleagues: “We got
paid on both sides of the deal!”
Terra Firma is suing Citigroup for
allegedly giving it bad advice during
its bid for EMI which has since turned
out disastrously.
A Citigroup statement said last
night: “The evidence in this case is
overwhelming that Citi has done
nothing wrong, and we firmly believe
that Citi will prevail” in this case.”
In its filing to the courts, Citigroup
said EMI authorised the bank to pro-
vide financing to potential bidders
including Terra Firma. Citigroup is
trying to have the action struck out.
 4 Focus on Banking reshuffle CITYA.M. 8 SEPTEMBER 2010

Diamond crowned as
Barclays’ new chief
▲

BANKING
BY OLIVER SHAH
CITY insiders voiced concern over the
future of Barclays’ retail banking
operation yesterday after the group
confirmed Bob Diamond would
replace John Varley as chief executive.
Diamond, who has won renown
aggressively building the Barclays
Capital investment bank, will take
over from Varley next March. Varley
will stay on for six months as an
adviser to Barclays on regulatory
issues as Sir John Vickers delivers his
verdict on whether large institutions
should be split up to the chancellor.
The outgoing boss has also been
tipped for a position in government.
Diamond will enjoy a £11.5m annu-
al pay and bonus deal, significantly
more modest than the total haul of
£63m he took home last year.
Chairman Marcus Agius defended
the package as having been “bench-
marked” against Diamond’s peers.
But analysts were more worried
about the implications of the
appointment for Barclays’ plan to cut
its reliance on BarCap’s revenues. Last
year the investment banking arm
delivered nearly half the group’s
income, a ratio Varley said would be Bob Diamond’s roots
lie in investment
banking
Picture: REUTERS

reduced to a third over time. to see continuity within Barclays’ sen-

Evolution Securities wrote: “All in
all we feel the management changes
at Barclays are likely to make even
more pronounced what we consider
to be its main weakness: too much
investment banking, too little retail.”
Merrill Lynch said there “will be
question marks over Bob Diamond’s
retail commitment” but was pleased
ior management line-up.
Diamond was at pains to empha-
sise his commitment to Barclays’
model of combined high street and
capital markets banking. He pledged
a “seamless” transition from Varley.
Observers said they doubted his pres-
ence would increase the likelihood of
Barclays quitting the UK.

ANALYST VIEWS: HOW WILL BOB DIAMOND

FIT IN AS CHIEF EXECUTIVE? Interviews by Oliver Shah

NEIL SHAH | EDISON INVESTMENT RESEARCH

“ It’s a great example of succession planning as far as I’m concerned.

He’ll be in a different position as chief executive, though, and he will probably be

”
more measured in his approach. Where he was before and where he’s going to
now are different and he’ll probably be operating in a different way.

DAVID BUIK | BGC PARTNERS

“ Though Bob Diamond comes from an investment banking background,

above all else he is a brilliant delegator, and let’s face it, the art of good manage-

”
ment is delegation. He is also a bold man. If the heads of retail banking are not
doing their job to the standard required, trust me, they will be replaced.

ANGELA KNIGHT | BRITISH BANKERS ASSOCIATION

“ With Bob Diamond taking over the helm from John Varley there will be
welcome continuity from a formidable team which steered one of the UK’s leading

”
financial institutions safely and successfully through the recent global financial
problems. It is also testament to Barclays’ faith in universal banking.

Barclays’ Agius to
take helm at BBA
while at the same time defending the
▲

BANKING
BY VICTORIA BATES
BARCLAYS chairman Marcus Agius
yesterday announced he would step
up to chair the British Bankers’
Association after HSBC chairman
Stephen Green resigned to take up a
new appointment as UK minister for
trade and investment.
Agius, a former Lazard investment
banker, has chaired Barclays since the
beginning of 2007.
He has maintained a lower profile
during the financial crisis than some
of his peers, including Green himself,
who has proved himself unafraid to
call on bankers to show restraint on
thorny issues such as remuneration
role of the City.
In his new role, Agius will support
BBA chief executive Angela Knight,
the banking industry’s staunchest
defender in the face of the criticism
heaped upon it in the wake of the
crunch.
“[Agius] has helped the global uni-
versal bank grow and successfully
weather the last three years’ financial
turbulence,” Knight said.
“He brings a sound understanding
of the City, the key issues facing the
industry and an international per-
spective which reflects well the BBA’s
broad global membership.”
The Barclays chairman takes up his
new role with immediate effect.
CITYA.M. 8 SEPTEMBER 2010 Focus on Banking Reshuffle 5

ANALYSIS l How Barclays’ group earnings break down geographically

BOB DIAMOND at Morgan Stanley and four years at
Credit Suisse before joining Barclays
BECOMES CHIEF in 1996. He has waited 14 years to
EXECUTIVE, take the top spot at the UK bank.
BARCLAYS Although the 59-year-old consis-
tently denied an aspiration to succeed
John Varley, declaring last year that
his existing role of president “sounds
like a great title to me”, Diamond has
BOB DIAMOND is known as a thrust- occasionally hinted at the depth of his
ing dealmaker but his appointment is a ambition. In a 2009 interview he said:
reward for remarkable patience. “I recall my dad saying about me once
Having started his career as a busi- that the only time he’d ever heard me
ness lecturer at the University of say ‘never’ was when I was asked if
Connecticut, Diamond spent 13 years I’d had enough.”
UK Africa and Middle East
55,700 employees 50,700 employees
£13.3bn income £3.9bn income
RICH RICCI and the Bank of New England. A
£2,500m profit before tax £900m profit before tax finance graduate of Creighton
University, Ricci is known as a details
BECOMES CO- man who has been integral to
US Rest of Europe Rest of World
CHIEF EXECUTIVE, BarCap’s rapid growth in recent years.
12,300 employees 13,500 employees 12,000 employees BARCAP He left the limelight to his boss but
£6.6bn income £4.5bn income £2.7bn income Ricci was at Diamond’s side through
£400m profit before tax £900m profit before tax £600m profit before tax the purchase of Lehman Brothers’ US
brokerage in 2008. He became tem-
ANALYSIS l Barclays
p
Bob Diamond’s domain RICH RICCI and Jerry del Missier, Bob
Diamond’s trusted lieutenants, will
porary chief executive to oversee the
integration of the American bank.
360 314.55 become co-chief executives of Ricci’s pay has not come under the
340
7 Sep
Barclays Capital Barclays Wealth Barclays Capital next month. same scrutiny as Diamond’s, but he
320 Ricci started at Barclays in 1994 has earned decent sums in recent
following stints at the Bank of Boston years even by Wall Street standards.
300

280 Barclays Capital is a global Barclays Wealth provides

260
investment bank, offering its international and private
clients the normal range of banking, fiduciary services,
services from strategic investment management and JERRY DEL built”. Del Missier was handed control
7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
advisory and M&A, equity and brokerage. MISSIER of BarCap’s important credit products
fixed income capital raising and in September 2007 before being given
corporate lending to risk BECOMES CO- full deputy status the January after.
management across foreign CHIEF EXECUTIVE, Educated at Queen’s University in
ANALYSIS l HSBC exchange, interest rates, Ontario, del Missier started his career
p equities and commodities. BARCAP
700 at the Bank of Nova Scotia before
662.40
680 7 Sep moving to Bankers Trust in Toronto.
TOTAL INCOME £11.6bn TOTAL INCOME £13bn CANADIAN-BORN Jerry del Missier He joined Barclays in 1997 from
660
CLIENTS GENERATING MORE CLIENT ASSETS £151.3bn has been Bob Diamond’s chosen heir Bankers Trust in London.
640 THAN £10M INCOME 232 COUNTRY LOCATIONS 25 for at least two years. Alongside Rich Ricci, del Missier
620 AVERAGE TOTAL INCOME Naming del Missier as president of won his spurs working on the Lehman
600 GENERATED PER MEMBER Barclays Capital in 2008, Diamond Brothers transaction at the height of
OF STAFF £515,000 told analysts the investment banking the financial crisis. The two men
unit was “the machine that Jerry worked through the night on the deal.
7 Jun 23 Jun 13 Jul 2 Aug 20 Aug

Ex-Goldman banker tipped for HSBC

the coalition government. spent 23 years at Goldman, where he Green earlier this year when he relo- ing to persuade ex-Standard
▲

BANKING
BY VICTORIA BATES
FORMER Goldman Sachs investment
banker John Thornton was yesterday
touted as the most likely candidate to
step into Stephen Green’s shoes, after
the HSBC chairman accepted the role
of trade and investment minister in
Green is due to step down before
the year is out to fill the last remain-
ing vacancy in the cabinet.
Thornton, a non-executive director
at HSBC, joined the board two years
ago. A hardened industry veteran
with very strong links to China –
HSBC’s core market – he previously
was right hand man to then-chief
executive Hank Paulson.
However, HSBC insiders said a
move over to the chairmanship for
current chief executive Michael
Geoghegan “should not be ruled
out”. Geoghegan took over responsi-
bility for the bank’s strategy from
cated to Hong Kong, leaving the chair-
man free to play more of an
ambassadorial role.
Green’s appointment to
Westminster marks the culmination
of an arduous search process for
Cameron, who has struggled to fill
the trade minister position since fail-
Chartered boss Lord Davies to contin-
ue in the role after the election.
Green, also an ordained Anglican
priest, leaves HSBC after 28 years. He
will also step down from his positions
as chairman of the British Bankers’
Association and deputy president of
the CBI.
LONDON
CITY TO
COPENHAGEN
FROM £65
ONE WAY
With a flight time of less than
2 hours and a check in time of
only 15 minutes, you’ll hope the
rest of your stay doesn’t go as
quickly. Book at ba.com
CITYA.M. 8 SEPTEMBER 2010 News 7

Insider trading bounty hunter

promoted to the board of FSA
cial crime. She joins chairman Adair Bosses at the regulator decided to

▲
REGULATION
BY OLIVER SHAH
MARGARET COLE staked her claim to
a top job when City regulation is
passed to the Bank of England by join-
ing the board of the Financial
Services Authority yesterday.
The enforcement chief, who is
described as “tough as old boots” by
Connaught chief Ian Carlisle had tried to convince creditors the firm could stay solvent former private sector colleagues,
becomes managing director of finan-
Turner and chief executive Hector
Sants on the FSA’s 16-strong board.
Cole has been closely associated
with the watchdog’s tougher stance
on insider trading, claiming the high-
est-profile scalp in its history with the
jailing of former Cazenove partner
Malcolm Calvert in March. Shortly
after, she said: “People should be
afraid of the FSA. We mean what we
say and we mean business.”
reward Cole’s efforts amid a spate of
impending defections from senior fig-
ures such as Jon Pain and Sally Dewar.
Chancellor George Osborne’s plan to
roll supervisory duties into the Bank
of England have spooked some staff.
Simon Morris at CMS Cameron
McKenna said: “This is Margaret Cole
nailing her colours to the FSA mast
and laying claim to a prominent role
on one of the new regulatory bodies.”

Connaught in
administration
made today, once negotiations with
▲

PROPERTY
BY MARION DAKERS
TROUBLED social housing repair firm
Connaught put most of its business
into administration yesterday, after
its lenders refused to further fund
the company.
The FTSE 250 component said last
night that its public sector business
will be put into the hands of adminis-
trators KPMG, though its environ-
ment and compliance arms will
remain in operation.
The company suspended trading of
its shares yesterday morning, and
later said in an announcement to the
stock market: “Following extensive
discussions with the group’s secured
lenders, it is now clear that sufficient
support would not be extended to the
group as a whole to enable it to con-
tinue trading as a going concern.”
It added that an update on funding
for its remaining business would be
Support services companies compared:
CAPITA
l Aids the BBC, government and local
councils with outsourcing.
l First half pre-tax profit up 15 per cent
to £163m.
l Unite union currently balloting work-
ers over strike action.
CONNAUGHT
l Offers social housing repair work.
l Annual results will show "material loss".
l Shares lost more than 90 per cent of
their value after profit warning.
lenders are complete.
The value of Connaught shares
froze at 16.65p yesterday, meaning a
drop of over 90 per cent since a sur-
Get equipped for a
prise profit warning in June.
The company blamed government
spending cuts for its dire financial
management career
state at the time, though rivals Mears
and Rok stressed their social housing
and public property businesses
in financial services
remained strong.
Connaught drafted in Deloitte to
examine its accounting practices in
July, the results of which have not
MSc in Banking Practice and
been made public.
The company has around £220m of Management (part-time)
debt, provided by six banks and four
other creditors.
The Connaught administration The ifs’ MSc in Banking Practice and Management
will be one of KPMG’s largest jobs in
several years. The auditor recently is designed to develop in-depth knowledge of
dealt with company voluntary
arrangements for sports chain JJB and banking and finance that will give you the essential
outdoor retailer Blacks. understanding and skills needed for a successful
career in financial services management.
SERCO
Registration is now open for
l Runs the DLR and detention centres.
l First half pr-tax profit up 21 per cent the January 2011 intake.
to £101.4m.
l Signed a £415m contract to run a
new prison in July.
ROK For more information please visit
www.ifslearning.ac.uk/msc
l Offers social housing repair work to
local councils. Join us at the MSc open evening on
l First half pre-tax profit fell by 50 per
cent to £3m. Tuesday 21 September from 6.00pm-8.00pm,
l Company blamed financial misman- please register your attendance at
agement for the drop. www.ifslearning.ac.uk/cityam

Ex-Standard Chartered boss Lord

Davies joins $78bn PineBridge
regulatory issues. The American
▲

FUND MANAGEMENT
FORMER Standard Chartered head
Lord Davies has taken his second non-
executive job since leaving govern-
ment by agreeing to chair New
York-based asset manager PineBridge.
Davies joined the firm last month.
Although he will continue to work
from the UK, the banking veteran will
deploy his considerable contacts in
the Far East to advise PineBridge on
group runs more than $78bn
(£50.1bn) of assets, 65 per cent of
which are located outside the US.
The 57-year-old Welshman also sits ifs School of Finance, Peninsular House, 36 Monument Street, London, EC3R 8LJ
on the board of buyout firm Corsair
Capital. The Corsair job marked his W www.ifslearning.ac.uk/msc E events@ifslearning.ac.uk T 0207 337 6286
return to the world of finance after 16
The ifs School of Finance is incorporated by Royal Charter and is the only specialist financial education
months as former Prime Minister body with the power to award its own taught degrees.
Gordon Brown’s trade minister. He
was previously chief executive, then
chairman of Standard Chartered.
 8 Economic News
Growth in UK jobs weakens Commodities
as doubts over recovery hit drive surge in
▲
UK ECONOMY
BY JESSICA MEAD
BRITAIN’S struggling job market con-
tinued to suffer in August with the
number of permanent appointments
rising at the slowest rate since
October 2009, against a gloomy back-
drop of public sector layoffs and
downbeat business confidence.
The monthly survey conducted by
professional services firm KPMG and
the Recruitment and Employment
Confederation (REC) showed that the
number of people placed in new jobs
by recruitment consultancies contin-
ued to increase in August, but growth
slowed further from March’s peak.
Kevin Green, the REC’s chief execu-
tive, said: “We are concerned about
the UK jobs market. Growth is rapidly
slowing as public sector job freezes
start to bite and private sector employ-
ers’ confidence remains fragile.
There was also evidence of weaken-
ing pay pressures in August with per-
food inflation
manent staff salaries rising at the
slowest rate for seven months, while
temporary staff pay growth hit a five-
month low.
Bernard Brown, partner and head
of business services at KPMG, said: “In
the months ahead we will see a sub-
stantial reduction in public sector
headcount. The big question is
whether the private sector can create
new jobs in sufficient numbers and
quickly enough to offset the down-
turn in the public sector.”
Food price inflation is the highest in over a year
▲
UK ECONOMY
BY JESSICA MEAD
FOOD price inflation surged to its
highest level in more than a year as
rising commodity prices fed through
into the supermarkets, the British
Retail Consortium (BRC) will say
today.
The BRC’s monthly shop price
index shows that annual food infla-
tion increased to 3.8 per cent in
August from 2.5 per cent in July, the
highest level since July 2009. In con-
trast, non-food inflation slowed to 0.5
per cent on a year earlier.
Stephen Robertson, director gener-
al of the BRC, said: “Past rises in the
cost of global commodities, such as
wheat and sugar, are filtering
through to food prices. In response,
retailers are offering more deals with
milk and bread particularly competi-
tive battlegrounds.”
However, he added that food price
Fears of an economic slowdown
after German factory orders drop
▲
EUROPEAN ECONOMY
GERMAN factory orders unexpectedly
plummeted in July, raising fears of a
slowdown in Europe’s largest econo-
my, which rebounded sharply in the
second quarter.
Official data published yesterday
showed that orders fell 2.2 per cent
on June, the sharpest monthly drop
since February 2009. But they are still
up 18 per cent on a year earlier.
CITYA.M. 8 SEPTEMBER 2010
Picture: Micha Theiner/City A.M.
inflation is nowhere near the return
of the double-digit food inflation of
two years ago.
Although non-food inflation eased
in August, the BRC anticipates a pick
up in prices in the coming months.
“Over the coming months, we expect
non-food inflation to experience
weak downward pressures, but
remain relatively stable, as competi-
tion among retailers intensifies in
the run-up to Christmas,” the BRC
said. It added: “With the new 20 per
cent VAT rate coming into effect in
January, non-food inflation is likely to
rise sharply in the first quarter of
2011.”
Nonetheless, with a third of gro-
ceries already on promotion and con-
sumer demand likely to remain
lacklustre, the BRC expects retailers
to continue to use discounts and pro-
motions to drive sales in the coming
months, keeping shop price inflation
low.
Economists brushed off yesterday’s
surprise data. ING’s Carsten Brzeski
said: “The drop is no reason to worry.
Today’s numbers just illustrate the
inevitable return to a normal growth
path, after the exceptional second
quarter. Deriving any double-dip
ideas from today’s numbers would be
exaggerated and very premature.”
However, the figures emphasise the
importance of global growth to the
Germany economy.
CITYA.M. 8 SEPTEMBER 2010
Google boss Eric
Schmidt said the
group will work
with programmers
when it launches
its TV service.
Picture: REUTERS
De La Rue to
take £35m hit
from note slip
▲
MANUFACTURING
BY HARRY BANKS
CURRENCY printer De La Rue faces a
hit of at least £35m to first-half profit
and a possible fraud investigation fol-
lowing the falsification of banknote
quality certificates by staff.
Updating on its investigation into
production errors at its banknote
plant in southern England the firm
said yesterday the behaviour of some
of its staff was “totally unacceptable”.
De La Rue has reported its findings
to the relevant law enforcement agen-
cies and taken “appropriate discipli-
nary action”.
A company spokesman declined to
say if any employees had been dis-
missed but said the managing direc-
tor of the currency division had left.
A spokesman for the Serious Fraud
Office said the agency had been con-
tacted by the company.
“The company has reported some
concerns to us. We’ve noted those
concerns, we are alert to them and we
will have further discussions with the
company,” he said.
Banknote paper specifications have
a large number of detailed parame-
BofA bolsters M&A team after
poaching Nomura rainmaker
▲
BANKING
ADRIAN MEE, head of European
mergers and acquisitions at Nomura
and one of the bank’s key rainmak-
ers, has quit the Japanese investment
bank to join Bank of America Merrill
Lynch (BoA).
The move will come as a blow to
Nomura which has suffered a series
of high-profile defections just two
years after acquiring the European
and Asian investment banking of
Lehman Brothers.
Mee, global head of M&A at
Nomura, will become head of inter-
national M&A at BoA. He joins his for-
mer colleague Christian Meissner,
ters and the company’s investigation
found in certain cases that a small
number of them failed to meet the
required standard.
The spokesman for De La Rue,
which is involved in the production
of over 150 national currencies,
declined to name the customers
involved, say how many staff were
implicated or comment on their
motives.
The £35m hit relates to stock write-
offs, professional fees, rectification
and production trial costs, and some
slippage of currency volumes into the
second half. De La Rue said it was too
early to assess the financial impact
for the full year and future years.
ANALYSIS l De La Rue
p
1000
900
680.50
7 Sep
800
700
7 Jun 25 Jun 15 Jul 4 Aug
who ran the investment banking
business at Nomura before resigning
earlier this year to join BoA.
The pair, along with William
Vereker, co-head of global investment
banking at Nomura, were the three
main negotiaters in the acquisition of
Lehman’s businesses.
The duo recently advised
International Power on its deal with
France’s GDF Suez to create the
world’s largest utility with annual
revenue of €84bn (£69.3bn).
Nomura still ranks 18th in the
league tables for European M&A,
compared with BoA which has held a
top five position under the leadership
of Carlo Calabria.
News 9
Google set to offer
TV service in the US
ANALYSIS l Google
$ 464.45 Google would work with a variety of
▲
7 Sep TECHNOLOGY
500
BY HARRY BANKS programme makers and electronics
manufacturers to bring it to con-
480 GOOGLE will launch its service to sumers.
bring the web to TV screens in the “We will work with content
United States this autumn and world- providers, but it is very unlikely that
460
wide next year, its chief executive Eric we will get into actual content pro-
Schmidt, said, as it extends its reach duction,” said Schmidt.
440 from the desktop to the living room. The news comes less than a week
Schmidt said the service, which after rival Apple unveiled its latest
7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
will allow full Internet browsing via Apple TV product and will intensify a
the television, would be free, and battle for consumers’ attention.
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 The Capitalist
10
SPEARMINT
RHINO BOSS
RETURNS TO
CLUB SCENE
AMID all the talk of a strict clampdown on
City jaunts to strip clubs, it comes as some-
thing of a surprise for The Capitalist to
learn that another such den of iniquity
popped up this week claiming to be the
classiest table dancing joint in town.
That’s right, folks, it’s back – courtesy of
founder Simon Warr, the former manag-
ing director of Spearmint Rhino, who
split from the chain’s founder John Gray
recently, taking control of its out-of-
London clubs and rebranding them as
Platinum Lace.
The new club, on the former site of the
CC Club, next to the Trocadero centre at
Piccadilly Circus, aims to be “the very best
and most exclusive” that London has to
offer, and it’s not shy about tapping a
market of which predecessors steered well
clear: the ladies.
On board to help raise awareness of the
venue among female punters is Emma
Sayle, she of orgy-organiser Killing Kittens
fame, as a consultant. “We’ve themed it as
a crossover club, with themed nights,
entertainment and burlesque as well as
the usual dancers,” she tells me. “We’d
love the ladies to come along too – the
idea that strip clubs are a primarily male
domain is outdated.”
BEAR NECESSITY
SocGen’s lovable über-bear strategist
Albert Edwards was back on top form yes-
terday predicting his usual decline into
the icy depths of recession.
No optimism over market prospects in
this camp: Edwards believes we’re firmly
back in the same situation as we were
prior to the financial crisis in 2007.
“Investors then were content to stick
their heads into very deep sand and
ignore the fact that The Great Unwind
had clearly begun. But in August and
September 2007, even though the wheels
were clearly falling off the global econo-
my, the S&P still managed to rally 15 per
cent!” Edwards notes, incredulously.
“The recent reaction to data suggests
the market is in a similar deluded state of
mind. Yet again, equity investors refuse to
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“Simon Warr
starts afresh
with new
club Platinum
Lace, which
aims to
entice the
girls as well
as the boys”
Above: Former
Spearmint Rhino
managing director
SHARK ATTACK
Brokering million-dollar deals or fishing
wants to throw out human remains from the stomachs of the
the concept that strip world’s deadliest sharks? It’s all in a day’s
clubs are just for the work for Bahamian investment banker
boys Humphrey Simmons, who wins the prize
for daredevil of the week after his eye-pop-
Pictures: GETTY, REX ping tale of terror on the high seas.
Simmons tells the local Tribune paper
that he was out deep sea fishing when he
reeled in a tiger shark – but as he was
about to cut the creature free, it spat out a
human foot.
Later investigations on land revealed
the headless remains of a man, though
officials believe he had drowned before
Are the markets in a Vulcan death grip? coming to his grisly rest. Quite
the most unusual extra-cur-
accept they are now locked in a Vulcan ricular achievement The
death grip and are about to fall uncon- Capitalist has ever heard
scious…” from the banking sector.
Will the Star Trek indicator of market
volatility soon catch on?
LOVE BOAT
Valentine’s Day may be
NEWS HOUND half a year away, but if any
Rivalry bubbles over on Twitter between City gentlemen want inspi-
the two doyens of financial television jour- ration for a romantic treat
nalism, the Beeb’s Robert Peston and Sky’s for their better halves, look
Mark Kleinman. no further.
“BBC appears to have ‘learned’ how to St Katherine’s Dock reck-
read output of other news organisations. ons it’s housing a true slice
Stephen Green appointment as trade min- of history in the form of
ister now imminent,” tweeted Kleinman, classic yacht the Flamont
hours after Pesto had picked up on the Rose, which it believes
story first broken by his rival. was once the “love boat”
Should it be briefcases at dawn, gentle- of French songstress Edith
men? Piaf and French boxing champi-
CITYA.M. 8 SEPTEMBER 2010
Piaf’s love vibes can be yours, but it’ll cost you
on Marcel Cerdan.
At £1,500 a pop for a weekly rental, the
old gal sure wants to get her money’s
worth, though.
MONKEY BUSINESS
As City runners prepare for the ever-popu-
lar Bloomberg Square Mile Relay tomor-
row, word reaches The Capitalist of a
slightly more off-the-wall fun run offering
coming to the Square Mile.
On 26 September, I’m told, 750 people
will take to the streets to run 7km… and
every single one of them dressed up as a
gorilla, in order to raise money for the
endangered creatures in West Africa.
“It is ideal for those who want to do
something that little bit different and
push themselves physically,” say the organ-
isers.
“7k may not be far, but 7k in a
gorilla suit is a lot harder…” I’ll
say.
SEX SELLS
Ping! In pops an email from
merchandise group
Icons.com, which clearly has-
n’t been reading the papers
of late.
“The 2010 World Cup
may not have lived up to
expectations, but Friday’s
4-0 defeat of Bulgaria at
Wembley showed the future
may be brighter for the passion-
ate England following,” the
firm shouts, excitedly, proceed-
ing to offer unique signed foot-
ball memorabilia at a discount.
“With £60 off a hand-signed
Wayne Rooney England shirt,
now could be the time to
make that special purchase,”
it adds, seemingly without
irony.
CITYA.M. 8 SEPTEMBER 2010
Whitbread given a
lift by Premier Inn
business travellers
LEISURE
▲
BY JOHN DUNNE
WHITBREAD yesterday reported a 14
per cent sales surge across the group –
fuelled by a return of business trav-
ellers to its Premier Inns and the
growth of Costa Coffee.
Premier Inn like-for-like sales were
10.7 per cent higher in the 24 weeks
to 19 August, while Costa’s like-for-
like sales in the quarter jumped
another 8.1 per cent.
Its hotel chain saw business trav-
ellers using its budget hotels jump by
a fifth. Overall occupancy of rooms
was up almost ten per cent compared
with the same period last year. At
their lowest rates the rooms are £29-a-
night. The company has opened nine
new hotels this year with a total of
795 rooms.
Chief executive Alan Parker said:
Ocado sales surge
but investors wary
RETAIL
▲
BY JOHN DUNNE
ONLINE retailer Ocado yesterday
said its sales had surged by almost
30 per cent – but investors
remained unconvinced and the
announcement was greeted with a
dip in its share price.
The company, which recently
completed a controversial flota-
tion, hasn’t made an annual oper-
ating profit since it launched ten
years ago, but hopes to go into the
black next year.
Ocado said gross sales in the 12
weeks to 8 August rose 29.5 per
cent to £126.5m from £97.7m in
the same period last year, support-
ed by higher take-up of its pre-
ordered fish and meat “service
counter” offer.
Ocado, which mainly sells
Waitrose products, began listing
A long, hard struggle for credibility
OCADO chiefs were yesterday
upbeat about the company’s
prospects and had seemingly jus-
tifiable reasons for optimism with
an almost 30 per cent sales hike.
But the figures cannot be
looked at in isolation and come
on the back of a torrid flotation
which saw chief executive Tim
Steiner and crew pitched against
some analysts who claimed the
stock was still overpriced.
Indeed the way the share price
has gone since the issue at a
much reduced 180p would sug-
gest that the sceptics were correct
to rein in the company as it
“We are very pleased at how well
Premier Inns has been performing.
The rise in business travellers shows
that people want to make the trips
but in this age of austerity they want
a cheap room. All of our businesses
have been performing well.”
Whitbread created another 1,000
jobs over the period and now employs
34,000 workers in total. It also owns
the Beefeater chain and its restaurant
sales were up 4.3 per cent.
The company has 98 Costa Coffee
franchises, with total sales up 28 per
cent.
Whitbread chief exec
Alan Parker says the
age of austerity is
helping to fuel a sales
rise at Premier Inn
its shares in July, but a lack of inter-
est among investors forced the
company to cut the asking price for
the float to 180p from an initial fig-
ure of 200p-275p. It has been trad-
ing below that since the float.
Its shares yesterday closed seven
per cent lower at 146p valuing the
company at around £825m.
Chief executive Tim Steiner said
he was “disappointed” for share-
holders that the price was not
higher but that the company was
looking to the medium to long
term to reap the rewards of hard
work done now. “We are delighted
with the (sales) performance. We
hope that 2011 will be the year
when people can stop calling us
the loss-making online retailer”.
Average order size during the
quarter was £113.59, marginally
down on the £114.73 recorded a
year earlier.
sought to bankroll expansion.
The neigh sayers were again out
in force yesterday helping the
share price to close around 146p.
Jonathan Pritchard at Oriel dis-
missed the stock saying: “No
changes to forecasts and the fun-
damentals will reassert them-
selves. The fundamentals, from
this valuation, look poor.”
Meanwhile the company said it
was “very focused on where it
(the stock) will be trading in two
or three years time, not where it
will be trading at lunchtime”.
However, what the stock is
doing at lunchtime – and indeed
SPORTS DIRECT NETS A WORLD CUP BOOST
SPORTS Direct, the biggest seller of England team shirts, saw profits rise during the
World Cup despite the side’s dismal performance. In the 13 weeks to 25 July, sales
jumped 8.8 per cent to £408m, while profit rose 17.8 per cent to £185m. Chief executive
Dave Forsey said: “These results clearly show that Sports Direct had a good World Cup.”
Ocado said gross profit margins
were stable while earnings were ris-
ing in line with trend in the first half.
“The group has to engage in
material capital investment to sus-
tain its sales growth and has yet to
demonstrate profitability on an
already considerable sales base, we
continue to harbour reservations
about the valuation of Ocado,” said
Shore Capital analyst Clive Black.
ANALYSIS l Ocado 146.00
160 p 07 Sep
155
145
135
9 Aug 16 Aug 23 Aug 31 Aug 7 Sep
next week – is being watched
closely and the company cannot
afford to appear aloof and dismis-
sive if it is to build its reputation.
Ocado is also facing a challenge
from Morrisons which is expected
to announce a foray into online
retail.
With the picture so mixed a
“hold” as advised by Keith
Bowman at Hargreaves Lansdown
would appear to be the best
option.
BOTTOMLINE
Analysis by John Dunne
Consumer News 13
NEWS | IN BRIEF
Greene King toasts sales rise
Greene King has seen an upturn in sales
thanks to its pub grub. The brewer and
pub operator saw sales lift by 4.4 per
cent in the last 18 weeks. Like-for-like
food sales rose 8.6 per cent. However
sales of Greene King's own beer, which
includes IPA, dropped five per cent.
Chief executive Rooney Anand said: “The
economic and consumer environment
remains uncertain. However, we are con-
fident of delivering another successful
year for our shareholders."
He added that the business would con-
tinue to expand its managed pub opera-
tion, from its current near-900 pubs to
around 1,100 sites.
Debenhams slashes prices
Department store group Debenhams is
cutting prices by up to 25 per cent, in a
sign retailers are increasingly nervous
about the outlook for consumer spend-
ing. Debenhams said yesterday it was
lowering prices on "tens of thousands"
of goods now in a bid to attract wary
shoppers, rather than waiting to use dis-
counting as a way of clearing stock at
the end of the season. "Many remain
cautious due to the continuing, challeng-
ing economic climate following spending
cuts and the 'will we, won't we?' double-
dip recession debate," it said.
Retail sales values rose one per cent
year-on-year in August, an industry sur-
vey found.
Breakfast Briefings
‘10
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 14 News
Flight to size
hurts smaller
hedge funds
▲
HEDGE FUNDS
BY OLIVER SHAH
BOUTIQUE hedge funds are suffering
as investors’ cash flows into larger
investment houses in a trend dubbed
the “flight to size”, a survey pub-
lished last night revealed.
The top five European hedge funds
by size grew their assets under man-
agement by 18 per cent to $112bn
(£73bn) in the year to mid-2010,
according to research compiled by
NewEdge Prime Brokerage Group for
The Hedge Fund Journal. In contrast,
the 10 smallest funds saw their capi-
tal shrink by seven per cent to $14bn.
The numbers suggest investors are
rushing for the perceived brand safe-
ty and improved liquidity of larger
hedge funds. Giant asset manager
Brevan Howard and Guernsey-based
BlueCrest Capital Management were
among the beneficiaries, with
BlueCrest increasing its assets by a
generous 58 per cent to $20.5bn.
Revealing its Europe50 league
table, The Hedge Fund Journal wrote:
LET’S
LET
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FOREX / gftuk.com
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GFT Global Markets
Markets UK LLtd.
td. is authorised and regulated
CITYA.M. 8 SEPTEMBER 2010
Dubai Holdings
delays $555m
loan repayment
WORLD ECONOMY
▲
DUBAI Holding’s main unit will delay
repayment on a $555m (£361.4m)
loan until 30 November, the company
said yesterday, the second time it has
failed to meet a repayment deadline.
DHCOG, a unit of the conglomerate
“Much anecdotal evidence suggests owned by the Gulf Arab emirate’s
the flight to size is having an even ruler, took a big hit on its exposure to
more pronounced impact on the hun- Dubai’s property crash.
dreds of smaller firms that fall below The company said in June it may
the threshold for inclusion. What’s resort to asset sales to deal with its
more, the tough environment for cap- debt after posting a $6.2bn loss for
ital raising and the cost of regulatory 2009. Its assets include Jumeirah
changes is likely to crimp the emer- hotel group and business parks.
gence of new funds for some years.” DHCOG was due to repay the
Despite difficult conditions, a num- $555m loan yesterday, having already
ber of fledglings appeared in the top extended it for two months in July.
50 list. Veteran London trader Tony Market participants had expected the
Chedraoui’s event-driven Tyrus move.
Capital vehicle charted at 43rd place “The restructuring and reschedul-
with $1.6bn of assets. Finisterre ing of debt is still in progress,”
Capital, an emerging markets vehicle Haissam Arabi, chief executive and
founded by ex-Citigroup trader Yan fund manager at Gulfmena
Swiderski, was 49th with $1.2bn. Alternative Investments said.
INVESTMENT FEATURE: P19 Concerns about the overall debt
burden of Dubai’s state-linked compa-
TOP FOUR HEDGE FUNDS BY SIZE nies mounted after Dubai announced
a standstill on repaying $26bn in debt
1. Brevan Howard as it restructured conglomerate
Dubai World. It unveiled a $9.5bn res-
2. Man Investments cue plan for the firm in March.
3. BlackRock The $555m revolving credit is the
4. BlueCrest Capital Management drawn part of a $1bn loan that was
Larry Fink of BlackRock (top) and Peter Clarke of Man Group Pictures: GETTY, REUTERS agreed in 2007.
Join Allister Heath, editor of City AM as he welcomes Boris Schlossberg,
Director of Currency Research at GFT for an ‘all-things-forex’ seminar.
Thursday, 23 September | 8:00 am – 10:00 am | The Grange Hotel, St Paul’s Register online
at gftuk.com//ccityam
gftuk.com/cityam
During
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CITYA.M. 8 SEPTEMBER 2010
Mining tax headache returns
▲
MINING
BY EMMA SADOWSKI
AUSTRALIAN Prime Minister Julia
Gillard secured a wafer thin parlia-
mentary majority yesterday, ending a
political impasse but hardly cheering
investors worried about the fragility
of her government and its plans to
tax mining profits.
Gillard’s Labor Party, which was
punished by voters in 21 August
inconclusive elections despite a
robust economy, secured enough sup-
port from three independents and
one Green lawmaker to form a one-
seat majority in the lower house of
Basel banking
rules focus on
capital buffer
▲
REGULATION
BY HARRY BANKS
CENTRAL bank and regulatory offi-
cials agreed tougher new global bank
capital rules yesterday but will keep
investors on tenterhooks until
Sunday when formal endorsement is
expected.
The Basel Committee ended its
meeting with recommendations on
how much extra capital banks will
have to hold in future to avoid govern-
ments having to bail out the sector in
the next crisis, a source familiar with
the process said.
It also agreed arrangements for
phasing in higher standards on the
quality of capital banks must hold in
future. “The Basel Committee has
said they are on track with their dis-
cussions but there will be no
announcement today,” a committee
spokeswoman said without elaborat-
ing further.
The recommendations will be put
to the group of governors and heads
of supervision, chaired by European
Central Bank president Jean-Claude
Trichet, which meets in the Swiss
town of Basel on Sunday.
The so-called Basel III reform is the
cornerstone of the world’s response
Pinnacle team brings in second agent DS Smith says trading on
to attract pre-let tenants to the tower track after it boosts sales
▲
PROPERTY
BY MARION DAKERS
ARAB Investments, the developer of
the Pinnacle skyscraper, has brought
in an extra letting agent to sell leases
in the tower on Billingsgate.
Property company CB Richard Ellis
has joined Savills as joint leasing
agent on the tower, which is set to be
the tallest building in London when
completed in 2013.
“It’s something we’ve always want-
ed to be a part of,” Mark Slim, execu-
parliament.
Her narrow victory means Labor
can implement its proposed 30 per
cent mining tax, a prospect that dent-
ed resources stocks and the dollar, as
well as pursue a $38bn telecoms proj-
ect, which supported shares in phone
company Telstra.
Shares in mining heavyweights
BHP Billiton and Rio Tinto extended
losses yesteray after the independents
backed Labor, dashing hopes that the
conservatives -– who were opposed to
the tax -- would take power.
BHP Billiton closed at 1895p after
falling by 1.3 per cent, while rival
Xstrata was down 1.56 per cent to
to the financial crisis and endorse-
ment by Basel’s oversight body will
pave the way for the G20 summit of
leaders in November to give their seal
of approval.
Germany’s Die Zeit newspaper
reported on Monday evening that a
draft of the finalised package showed
banks will have to hold Tier 1 capital
of 9 per cent, including a three per
cent so-called “conservation buffer”.
At least five per cent of Tier 1
would have to be in the form of pure
equity or retained earnings for maxi-
mum market shock absorbency. The
current Tier 1 ratio minimum is four
per cent, with a core pure equity min-
imum of two per cent.
Germany continued to press for
more time to implement the changes
so its banks do not have to raise huge
amounts of capital quickly.
Analysts and regulators have been
expecting the new levels under Basel
III to come in at around six per cent
for core Tier 1, with a conservation
buffer of at least two per cent
Andrew Lim, an analyst at Matrix
Group said the minimum ratios out-
lined in the newspaper leak were at
the more onerous end of what the
market had been expecting once the
additional buffers are added.
tive director of the City agency at
CBRE, told City A.M. “Savills has been
working on it for some time, and very
well I might add, and Arab
Investments has decided to bring in
some reinforcements.”
Savills secured Rex Restaurants as
the tower’s first pre-let in February,
but is yet to announce takers for the
rest of the 1m square feet of commer-
cial space and 27,000 square feet of
retail space.
“There is a great deal of interest so
far and we will put together a market-
1072p.Similarly, Rio Tinto dropped
1.78 per cent to 3447.50p and Vedanta
was down 1.1 per cent to close at
1980p. A group of miners had earlier
threatened to exit Australia when for-
mer Prime Minister Kevin Rudd had
proposed a 40 per cent mining tax.
MARKETS: P18
FAST FACTS | AUSTRALIAN ELECTION
● The new goverment has been formed after 17
days of political deadlock.
● Welsh-born Gillard now controls 76 seats,
and can finally call herself Australia's first elect-
ed female Prime Minister.
Irish minister for finance Brian Lenihan has guaranteed liabilities
ing campaign and get the tenants,”
said Slim. “We will put the full global
resources of CBRE into motion on
behalf of The Pinnacle Limited and its
shareholders.”
The Pinnacle Limited, a subsidiary
set up by Arab Investments, is in dis-
cussions with several potential back-
ers to fund the £800m project.
Khalid Affara’s company has
already obtained £130m from a 60-
strong consortium of investors and
£200m worth of debt from HSH
Nordbank.
SEC mulls tightening up
process for stock orders
▲
REGULATION
US regulators are probing certain
practices around “quote stuffing,”
where large numbers of rapid-fire
stock orders are placed and cancelled
almost immediately, Securities and
Exchange Commission (SEC) chair-
man Mary Schapiro said yesterday.
“The SEC and other regulators are
looking carefully at certain practices
in this area to assess whether they
violate existing rules against fraudu-
lent or other improper behaviour,”
Picture: REUTERS
▲
MANUFACTURING
PACKAGING supplier DS Smith said
trading over the summer was encour-
aging, helped by an uptick in fast
moving consumer goods (FMCG).
The FTSE 250 firm said it was confi-
dent for the rest of the year, and said
it was ahead of the market for growth
in the FMCG sector.
“Our aim is to produce a more
focussed business with less cyclicali-
ty,” said chief executive Miles Roberts
in a call with analysts yesterday. “We
News 15
Schapiro said in remarks to be deliv-
ered at the Economic Club of New
York.
Regulators were also looking at
quote stuffing in connection with the
mysterious 6 May flash crash, when
the Dow Jones industrial average
dropped dramatically before quickly
recovering.
However, it is not seen as the cause
of the dramatic market drop, sources
have said. A report that may explain
the flash crash is expected toward the
end of the month, Schapiro said.
Anglo relief
as Ireland
extends aid
▲
BANKING
IRELAND extended its guarantee for
short-term bank liabilities, including
corporate and interbank deposits, as
expected yesterday as the government
sought to reassure investors about its
financial position.
The move came as Irish bond
spreads hit fresh peaks amid
renewed jitters about the health of
the European banking sector piling
more pressure on Ireland as it seeks
to hammer out a deal with the
European Commission over the
future of nationalised lender Anglo
Irish Bank.
Dublin saved Anglo from collapse
two years ago when it agreed to guar-
antee the liabilities of the entire
banking sector and finance minister
Brian Lenihan said yesterday that
guarantee would be extended until
the end of the year for short-term lia-
bilities.
With Ireland once again at the cen-
tre of European debt fears amid con-
cerns over the escalating cost of
bailing out Anglo Irish, there were
real fears corporate depositors would
pull funds out of Irish banks if the
guarantee had been left to expire at
the end of this month.
Analysts said while the guarantee
kept Ireland on the hook for its strug-
gling banks, it at least gave them
breathing space ahead of a crucial
month in which they need to refinace
around €26bn (£21.5bn) of funding.
are looking at five to six per cent like-
for-like growth in our main markets,
and more in developing markets such
as Poland.”
The company acquired French
packaging firm Otor for about €247m
(£205m) in July and said it expected
Otor to add to both earnings and mar-
gins in the first full financial year of
ownership in 2011.
The firm announced a 227 per cent
rise in annual profits to £55m in
June, on sales of £2.1bn.
Shares closed flat at £147.7p.
 16 News
PROFESSIONAL SERVICES FIRM
OF THE YEAR | The Shortlist
W
HETHER it’s advising firms,
publishing reports or driv-
ing efficiency, professional
services firms are never far
from the front line in the City. With
DELOITTE
In common with all the firms in
this section, the government’s
spending cuts are sure to hit
Deloitte hard. For now, though, its
employees can be forgiven for
celebrating. 2010 was its second-
best year ever, with partners on
average taking home £873,000.
Its results for 2009/10 showed
that its revenue dropped £16m to
£1.95bn in the year to May, mean-
ing it narrowly failed to overtake
PWC as the world’s biggest finan-
cial services firm.
INSURANCE
OF THE YEAR
COMPANY
T
HE management of risk has
always been at the heart of the
City’s business, and in these
turbulent times it has never
been more important. The five firms
ADMIRAL
Of all the areas that our shortlist-
ed firms work in, motoring is per-
haps the toughest. But Admiral
has made a fantastic success of it,
with pre-tax profits for the first
half of 2010 jumping 21 per cent
to £126.9m. The group’s customer
numbers increased by 23 per cent
to almost 2.4m. Meanwhile, its
operation in Spain, called
Balumba, made a profit too – oth-
ers in the US, Italy and Germany
haven’t yet, but you wouldn’t bet
against them.
Headline sponsor
Category sponsors
their global reach and diversified port-
folios, the best-known firms have
emerged looking healthy and ready to
face the challenges of the new, post-
downturn world.
ERNST &
YOUNG
The smallest of the big four, E&Y
is planning for serious future
growth. Two years ago it merged
its EMEA and India practices,
something that has proved prof-
itable. It recently admitted
almost 400 new partners, its UK
and Ireland advisory practice
continues to grow, and it is look-
ing to recruit 1,000 more people
in that area. The only shadow? It
could still face investigation over
Lehman Brothers’ Repo 105
accounting practice.
|
on our shortlist work across the
whole sector, from shipping and the
oil industry to motor insurance. All of
them have innovated and continue to
flourish.
JLT
Formerly known as Jardine Lloyd
Thompson, the firm formally re-
branded itself JLT last year, and
in the 12 months since it has gone
from strength to strength, and
income for the first half of 2010
rose 40 per cent. Half the profit
on the retail side of the business
came from Australasia, with an
impressive 24 per cent growth in
that market. A truly global player
with an eye on the future, it also
saw good performance in
Canada, Latin America and Asia.
In association with
Sponsored by
Don’t miss the City event of the year – get
online now and book your table for the
City A.M. Awards on Thursday 28 October
2010 at Grange St Paul’s Hotel, London
EC4.www.CityAMAwards.com.
MCKINSEY
It must be tough being outside
the Big Four, but McKinsey still
holds its own in this most chal-
lenging of company. True, it’s
smaller than the others on this list,
but employing 8,600 people
worldwide, it is by any standard a
big firm. Regularly voted the best
consultancy to work for in surveys
of employers, it is renowned for
employing MBAs rather than
more experienced managers, and
for giving young, talented people a
chance to make an impact.
Don’t miss the City event of the year – get
online now and book your table for the
City A.M. Awards on Thursday 28 October
2010 at Grange St Paul’s Hotel, London
EC4.www.CityAMAwards.com.
LANCASHIRE
GROUP
The firm has repositioned itself
in recent times, moving away
from property and towards the
flourishing energy sector. Unlike
many in that sector, however, it
escaped from the Deepwater
Horizon disaster with relatively
few losses. Results for the first
half of the year showed that it
delivered a return on equity of
7.5 per cent for the first half of
the year, while its combined
ratio for the second quarter was
51.5 per cent.
Awards reception sponsor
KPMG
Voted the best Big Four auditor
for the third year in a row last
month, KPMG continues to play a
central role in the life of the City,
not to mention government too.
PWC
If popularity is a measure of suc-
cess, then PwC is doing alright; it
recently received an incredible
800 applications for just 60
graduate jobs. Earlier this week it
STANDARD
LIFE
Operating profits were up 10 per
cent to £182m in the first half,
largely because of its overseas
earnings. The City stalwart
makes our list, though, because
WILLIS
The world’s third-largest insur-
ance broker recently announced
revenues of $2.8bn for the year
to June 2010. It’s a far cry from
1998, when the aerospace,
CITYA.M. 8 SEPTEMBER 2010
TOMORROW
PROPERTY FIRM
&
RETAIL BROKER
With a presence in 146 countries
and employing 140,000 people,
the operation is massive. Globally,
its revenue was $20.1bn
(£13.1bn) for the last year avail-
able – to September 2009. In
recent years it has also prided
itself on its green credentials, and
recently won an award for its
environmentally friendly offices,
and for a ban on short-haul
flights.
announced that net revenues rose
4 per cent to £2bn in the year to
June, with pay for its 820 UK
partners of £759,000 – down
from its record of £777,000 the
year before, but still healthy. It
also hired 57 new partners and
1,750 other new staff over the
past 12 months. It plans to add
800 more in the next year, and in
2011 it will move to an impressive
new HQ on the Southbank.
it has stuck up for the UK as a
place to invest. When the Pru
was engaged in its ill-fated ven-
ture into Asia, Standard Life
CEO David Nish – who took over
the top job at the end of last
year – criticised it and other
firms of looking to Asia rather
than at opportunities closer to
home. “The UK is a stunning
place to do business,” he said.
Bravo.
marine, construction, and energy
specialist was bought out for $3
a share by Kohlberg Kravis
Roberts. But since then it has
flourished and in 2008 it pushed
through the acquisition of Hilb
Rogal & Hobbs for $2.1bn. If
confidence counts for anything,
then Willis has a bright future:
last year it re-named it Chicago
HQ, formerly known as the Sears
Building, the Willis Building.
Official venue partner
CITYA.M. 8 SEPTEMBER 2010
Scottish & Southern poised to reopen European Central Bank
the market for corporate hybrid bonds offers banks a safe haven
INVESTMENT
▲
A deal from SSE would be only the
BY HARRY BANKS second corporate hybrid issue this
year, following Dutch utility TenneT’s
UTILITY Scottish & Southern (SSE) is €1.5bn (£1.2bn) transaction in
poised to reopen the European corpo- February.
rate hybrid bond market this week, French utility Suez Environnement
giving investors a rare chance to pick is also due to kickstart a roadshow for
up yield and the company an alterna- a hybrid issue tomorrow. The issues
tive source of capital. would be SSE and Suez debuts in the
Lead managers said the size and hybrid market.
price of SSE’s planned issue would be “The structure of the SSE deal will
decided following the end of a week- be very similar to TenneT,” said Gavin
long roadshow to meet with Kirkpatrick, capital structuring and
investors, but they expect the issue to advisory banker at Royal Bank of
be launched by the end of the week. Scotland, who was a structuring
APX and NYSE
Euronext plan
green venture
FINANCIAL MARKETS
▲
shareholding in French emissions
BY HARRY BANKS exchange BlueNext and be the major-
NYSE Euronext and environmental ity owner of NYSE Blue.
markets infrastructure provider APX Shareholders in APX, including
will create a joint venture, NYSE Blue, Goldman Sachs, MissionPoint Capital
to develop global environmental mar- Partners and ONSET Ventures will
kets, the companies said yesterday. take a minority stake in NYSE Blue in
“The intention is to create other return for their shares in APX.
exchanges in other parts of the mar- NYSE Blue will try to attract
ket. NYSE Blue will operate as one sin- “important and strategic” investors
gle company around the world and into the new company, Storms said.
the trading infrastructure will be It will offer services such as pre-
linked,” Brian Storms, who will trade and post-trade platforms, envi-
become NYSE Blue’s chief executive ronmental registry services, markets
when the deal is cleared, said yester- reference data and the BlueNext spot
day. emissions platform.
NYSE Blue will focus on environ-
mental commodities related to car- ANALYSIS l NYSE Euronext Inc
bon emissions and renewable energy 25 € 23.04
trading but it also sees potential for 07 Sep
new types of trading around energy 24
efficiency and water.
Storms, who is currently the chair- 23
man and chief executive of APX,
would not comment on the value of 22
the joint venture.
21
US-based financial markets opera-
tor NYSE Euronext said earlier it 20
would contribute its 60 per cent 7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
CITY MOVES | WHO’S SWITCHING JOBS
Deloitte
The accountancy firm has appointed UK part-
ner Chris Harvey as the new head of its finan-
cial services group.
Harvey has been a partner since 2002 and
has been global head of banking and securities
since 2008. He will focus on growing the finan-
cial services business in Asia, Latin America,
the Middle East and Eastern Europe, having
replaced Jack Ribeiro, who is now chair of the
firm’s global financial services industry group.
Schroders Bateman joined the group in early
The asset manager has appointed Rory 2008 as head of European institutional
Bateman as head of European equities, portfolios. In his new role, he will con-
effective immediately. tinue to have responsibility for the core
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
adviser on both the TenneT and SSE
hybrids.
While TenneT had dual-call dates at
7- and 12-years, the SSE issue will have
5- and 10-year call dates, he said.
Companies can use hybrids, which
are a blend of debt and equity, to raise
capital more quickly than a rights
issue. They also have the key benefit of
not diluting shareholders, like tradi-
tional equity capital. The riskier nature
of hybrids, mainly that the issuer will
not redeem the debt at the stated call
dates, means investors demand a high-
er return than senior bonds.
BEST OF THE BROKERS
ANALYSIS l British Airways
p 226.70
8 Sep
230
220
210
200
190
180
Jun 7 Jun 25 Jul 15 Aug 4 Aug 24
BRITISH AIRWAYS
UBS expects that British Airways’ (BA’s)
strong yield recovery will continue until the
end of the year after the airline showed a
strong yield delivery in the first quarter, up
13.5 per cent, and surpassing European
rivals. UBS said that BA is trading well post
its year-end results and continues to rate
the shares a “buy”.
Dr Pepper and Unilever warned by FDA
TECHNOLOGY
▲
THE US Food and Drug
Administration (FDA) yesterday
warned beverage makers Dr Pepper
Snapple and Unilever about making
improper statements regarding green
tea on product labels and web sites.
In a letter dated 30 August and
released yesterday, the regulator said
Dr Pepper’s Canada Dry Sparkling
Green Tea Ginger Ale was misbrand-
Edited by Victoria Bates
European equity portfolios and the
team of research analysts.
GE Capital
James Fenner has been named as the
new president and chief executive of GE
Capital’s leveraged finance business,
effective immediately.
Fenner was previously head of capi-
tal markets for the group in the EMEA
region. Prior to joining GE in 2009, he
was head of leveraged loan capital mar-
kets at Merrill Lynch.
AXA Investment Managers
The investment management firm has
promoted Laurent Gueunier to head of
ECONOMY
▲
BANKS accepted lowly returns on
their cash from the European
Central Bank (ECB) yesterday, high-
lighting the appeal of the ECB’s safe-
haven status in the ongoing
environment of money market ten-
sion.
The ECB comfortably attracted the
€61bn (£50.6bn) it needed from banks
to offset the controversial Eurozone
government bond purchases it has
made since May.
The ECB paid a weighted average
ANALYSIS l Legal and General
p
94.00
100
7 Sep
95
90
85
80
75
7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
LEGAL & GENERAL
Legal & General (L&G) has been upgraded
by JP Morgan Cazenove from “under-
weight” to “neutral” as its investment man-
agement business is currently performing
well and is seen by JP Morgan as a valu-
able asset. Along with the international
dividends, it should be more than funding
the total group dividend, JP Morgan believes.
To appear in Best of the Brokers email your research to notes@cityam.com
ed because the product label improp-
erly used the word “enhanced” relat-
ing to antioxidants from green tea.
“We received the FDA’s letter today
and are reviewing its contents,” a Dr
Pepper spokesman said. “We look for-
ward to working with the FDA and
addressing the issues raised.”
In a letter dated 23 August and
released yesterday, the FDA said
Unilever improperly promoted a
Lipton green tea product with word-
in association with
AXA Structured Finance, effective from
mid-October.
Gueunier joined the group in 2002 to
set up the structured corporate credit
department. Prior to that, he had spent
three years in the financial institutions
derivatives marketing team at JP
Morgan Chase, where he was in charge
of structuring and developing deriva-
tives in France and Belgium.
HSBC Alternative Investments
The alternative investment firm has
hired Amy McNally from Barclays
Wealth as its new global marketing
manager.
At Barclays, McNally was a product
News 17
interest rate of 0.33 per cent on the
one-week deposits, the same as a
week earlier.
It is also well below the 0.5 per cent
available on open markets, highlight-
ing banks’ preference to park cash at
the ECB rather than lend it more
profitably to peers.
The ECB takes seven-day deposits
from banks on a weekly basis to
match the amount it has spent buy-
ing government bonds – a controver-
sial tactic it turned to in May in a bid
to calm the Eurozone government
debt crisis.
ANALYSIS l Petroplus
Sfr 12.40
7 Sep
18
17
16
15
14
13
12
2010 28 Jun 19 Jul 9 Aug 30 Aug
PETROPLUS
Deutsche Bank has upgraded Petroplus to
a “buy” rating after the bank said that it
sees value in the utility giant’s stock. This
rating comes despite a 32 per cent plum-
met in Petroplus’ stock, which has hit an
all-time low since the group’s second quar-
ter results. Deutsche Bank said that it sees
no obvious reason for the earlier fall.
ing that would make it a drug under
federal regulations. The promotion
cited studies showing that tea lowers
cholesterol.
“The therapeutic claims on your
web site establish that the product is
a drug because it is intended for use
in the cure, mitigation, treatment, or
prevention of disease,” the FDA said.
It also said that Lipton had made
unauthorised nutrient claims for the
tea.
specialist covering alternative invest-
ments, a role involving the marketing
and distribution of hedge funds, private
equity and real estate products in the
UK and EMEA region.
Prior to that, she worked in JP
Morgan’s treasury services arm.
Freshfields
The law firm has appointed John Davies
and Martin Klusmann to co-head its
antitrust, competition and trade prac-
tice.
Davies was formerly managing part-
ner of the firm’s Brussels office for a
decade, while Klusmann managed the
Düsseldorf office for the past four years.
+44 (0)20 7557 7245
morganmckinley.com
 Markets&Investment
18 CITYA.M. 8 SEPTEMBER 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .266.90 –4.50 312.00 246.90 Cookson . . . . . . . . . . . . . . . . . . .452.60 –7.00 616.00 347.60 Johnson Matthey . . . . . . . . . . .1694.00 –24.00 1814.00 1302.00 Sainsbury(J) . . . . . . . . . . . . . . . .369.70 –2.10 373.10 307.60
3i Infrastructure . . . . . . . . . . . . . 115.00 +0.40 115.00 94.75 Croda Intl . . . . . . . . . . . . . . . . .1344.00* –10.00 1381.00 626.50 JPMorgan Emerg Mkts . . . . . . . .551.00 –6.00 558.50 411.00 Schroders . . . . . . . . . . . . . . . . .1381.00* –14.00 1450.00 1053.00
A.B. Foods . . . . . . . . . . . . . . . .1070.00 +2.00 1096.00 790.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .482.90 –1.70 539.00 381.00 Kazakhmys . . . . . . . . . . . . . . . .1246.00 –22.00 1634.00 955.00 Schroders N/V. . . . . . . . . . . . . . 1123.00* –12.00 1187.00 864.00
Aberdeen Asset Man . . . . . . . . . .136.90 –3.10 155.60 111.00 Dana Petroleum . . . . . . . . . . . .1808.00 +2.00 1817.00 968.50 Kesa Electricals . . . . . . . . . . . . .133.00 –0.90 162.00 98.45 Scot. & Sthrn Energy. . . . . . . . . 1161.00* –2.00 1206.00 357.50
Admiral. . . . . . . . . . . . . . . . . . .1571.00 –1.00 1586.00 1003.00 Davis Service . . . . . . . . . . . . . . .382.60 –1.20 442.30 356.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .213.90 –4.00 255.00 196.50 Scottish Mortgage. . . . . . . . . . . .601.50 –4.50 623.50 452.20
Aegis . . . . . . . . . . . . . . . . . . . . . 114.50 –2.50 137.30 103.10 De La Rue . . . . . . . . . . . . . . . . . .681.00 –22.50 1021.00 638.00 Ladbrokes . . . . . . . . . . . . . . . . .137.50* –0.50 174.29 114.60
Afren . . . . . . . . . . . . . . . . . . . . .103.90 –1.60 111.00 68.00 Debenhams . . . . . . . . . . . . . . . . .61.85 –0.20 90.00 51.95 Lancashire Hldgs . . . . . . . . . . . .540.00* +0.50 545.00 416.70 SEGRO . . . . . . . . . . . . . . . . . . . .266.70 –8.30 403.10 244.00
African Barr Gold . . . . . . . . . . . .599.00* +4.50 685.00 520.50 Derwent London . . . . . . . . . . . .1436.00 –3.00 1490.00 1150.00 Land Securities . . . . . . . . . . . . . .641.50 –11.50 743.50 543.00 Serco . . . . . . . . . . . . . . . . . . . . .608.00* –5.00 656.50 465.50
Aggreko . . . . . . . . . . . . . . . . . .1485.00 –28.00 1639.00 659.50 Dexion Absolute . . . . . . . . . . . . .140.80 –1.00 148.00 123.00 Legal & General . . . . . . . . . . . . . .94.00* –0.75 97.00 69.05 Severn Trent . . . . . . . . . . . . . . .1365.00 +32.00 1368.00 939.50
Alliance Trust . . . . . . . . . . . . . . .322.50 –2.30 352.70 292.70 Diageo . . . . . . . . . . . . . . . . . . . 1105.00 +1.00 1176.00 930.50 Lloyds Banking Gp . . . . . . . . . . . .72.51 –0.37 77.61 45.30 Shaftesbury . . . . . . . . . . . . . . . .428.20 –1.20 434.00 341.70
AMEC . . . . . . . . . . . . . . . . . . . . .918.50 –24.50 958.50 724.50 Dimension Data . . . . . . . . . . . . . 119.30 — 125.50 57.50 Logica . . . . . . . . . . . . . . . . . . . . 113.70 –3.30 149.10 100.80 Shire. . . . . . . . . . . . . . . . . . . . .1451.00 –8.00 1526.00 999.00
Amlin . . . . . . . . . . . . . . . . . . . . .417.30 +1.30 437.60 350.80 Domino’s Pizza . . . . . . . . . . . . . .465.60 +19.10 467.40 245.50 London Stk Exchange . . . . . . . . .681.50 –13.00 949.50 540.50 Smith & Nephew . . . . . . . . . . . . .542.00 –6.00 700.50 522.50
Anglo American . . . . . . . . . . . .2460.50* –32.00 3015.50 1846.50 Drax . . . . . . . . . . . . . . . . . . . . . .403.40 –3.70 496.50 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1586.00 –18.00 2198.00 1344.00 Smith(Ds) . . . . . . . . . . . . . . . . . .147.70* — 150.20 81.70
Antofagasta . . . . . . . . . . . . . . .1076.00 –16.00 1105.00 699.50 DSG Intl . . . . . . . . . . . . . . . . . . . .24.74 –1.03 39.75 23.11 Man . . . . . . . . . . . . . . . . . . . . . .225.70 –9.70 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . . 1194.00 –4.00 1242.00 814.00
Aquarius Platinum . . . . . . . . . . .301.90* –0.70 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .391.70 –1.10 438.40 265.60 Marks & Spencer. . . . . . . . . . . . .354.10 –5.60 412.70 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .452.60 +9.10 510.00 380.60
ARM Holdings . . . . . . . . . . . . . . .366.30* –4.30 381.00 127.60 Easyjet . . . . . . . . . . . . . . . . . . . .378.10 –3.00 499.90 326.00 Meggitt . . . . . . . . . . . . . . . . . . . .274.60* +2.50 331.00 212.60 Spectris . . . . . . . . . . . . . . . . . . .963.00 –1.50 973.00 653.00
Ashmore . . . . . . . . . . . . . . . . . . .301.40 –1.90 311.20 215.00 Edinburgh Inv Tst . . . . . . . . . . . .417.60 –4.00 422.50 338.00 Melrose . . . . . . . . . . . . . . . . . . .267.00 –2.00 272.80 159.60 Spirax-Sarco Eng . . . . . . . . . . .1637.00 –7.00 1651.00 962.00
Astrazeneca . . . . . . . . . . . . . . .3339.50* –0.50 3376.00 2668.00 Electrocomponents . . . . . . . . . . .220.40 –1.60 245.00 142.90 Mercantile IT . . . . . . . . . . . . . . . .963.50 –3.50 1002.00 822.50
Atkins(Ws) . . . . . . . . . . . . . . . . .694.50* +5.50 801.00 532.50 EnQuest . . . . . . . . . . . . . . . . . . . 116.20 –2.50 125.90 87.35 Michael Page Intl. . . . . . . . . . . . .425.80 –9.70 461.50 309.90 Spirent Comms . . . . . . . . . . . . . .132.00* –1.60 135.90 81.15
Autonomy Corp . . . . . . . . . . . .1713.00 –35.00 2012.00 1278.00 Essar Energy . . . . . . . . . . . . . . .433.10 +3.10 475.90 358.50 Micro Focus . . . . . . . . . . . . . . . .334.50* +17.60 550.00 272.20 Sports Direct Intl . . . . . . . . . . . . . 117.00 +3.50 134.00 89.85
Aveva . . . . . . . . . . . . . . . . . . . .1445.00 +3.00 1482.00 846.00 Eurasian Nat Res . . . . . . . . . . . .856.00* –19.50 1276.00 781.00 Millen & Copthorne . . . . . . . . . . .508.50* –2.50 527.50 321.40 SSL Intl . . . . . . . . . . . . . . . . . . . 1157.00 +1.00 1190.00 559.00
Aviva . . . . . . . . . . . . . . . . . . . . .390.60 –8.00 474.00 290.20 Euromoney Inst Inv . . . . . . . . . . .589.50 –0.50 630.00 260.00 Misys . . . . . . . . . . . . . . . . . . . . .283.00 –4.40 288.80 177.10 St James’s Place . . . . . . . . . . . . .258.50* –4.60 296.90 203.40
Babcock International . . . . . . . . .530.00 +2.00 660.50 489.00 Experian . . . . . . . . . . . . . . . . . . .649.00 –2.00 664.50 489.00 Mitchells & Butlers . . . . . . . . . . .303.40 –2.90 343.90 228.30 Stagecoach. . . . . . . . . . . . . . . . .185.50 –1.00 204.90 137.00
BAE Systems . . . . . . . . . . . . . . .323.20 +0.70 389.90 288.10 F&C Comm Prop . . . . . . . . . . . . . .91.50* +1.60 96.80 79.50 MITIE . . . . . . . . . . . . . . . . . . . . .201.90 –3.10 281.70 187.80 Standard Chartered . . . . . . . . . .1854.50* –5.50 1927.00 1366.00
Balfour Beatty . . . . . . . . . . . . . . .244.30 –2.70 328.85 228.60 Ferrexpo . . . . . . . . . . . . . . . . . . .304.60* –7.40 396.20 138.00 Mondi . . . . . . . . . . . . . . . . . . . . .488.00* –8.30 503.00 290.40 Standard Life . . . . . . . . . . . . . . .210.70* –4.10 237.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .314.00* –8.85 394.25 253.40 FirstGroup . . . . . . . . . . . . . . . . .360.50 –3.70 448.80 331.20 Monks Inv Tst . . . . . . . . . . . . . . . 311.10 –1.90 321.20 251.00 SuperGrp . . . . . . . . . . . . . . . . . .982.50 –24.50 1100.00 499.00
Barratt Development . . . . . . . . . .104.30 –0.40 193.31 89.10 Foreign & Col Inv Tst. . . . . . . . . .280.90* +0.40 297.20 233.40 Morrison Wm . . . . . . . . . . . . . . .291.00 +1.60 306.30 255.00 TalkTalk . . . . . . . . . . . . . . . . . . .127.80 –1.30 147.10 106.60
BBA Aviation . . . . . . . . . . . . . . .186.00* +1.30 220.00 145.90 Fresnillo . . . . . . . . . . . . . . . . . . 1100.00* –4.00 1139.00 647.00 Murray Intl Tst . . . . . . . . . . . . . . .884.00 –5.50 893.50 679.50 Talvivaara Mining . . . . . . . . . . . .417.00 –18.80 501.50 341.40
Bellway. . . . . . . . . . . . . . . . . . . .549.50 –12.00 927.50 510.00 G4S . . . . . . . . . . . . . . . . . . . . . .255.00 –1.20 285.70 217.70 National Express. . . . . . . . . . . . .238.60 +0.10 258.60 155.86 Tate & Lyle . . . . . . . . . . . . . . . . .450.80 +12.30 509.00 388.00
Berkeley . . . . . . . . . . . . . . . . . . .838.00 –2.00 960.50 735.00 Genesis Emerging Mkts Fd . . . . .490.00 –6.00 496.80 370.00 National Grid . . . . . . . . . . . . . . .544.50 +1.00 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .28.60 –0.03 51.80 24.29
BG . . . . . . . . . . . . . . . . . . . . . .1065.50* –18.50 1248.00 966.90 GKN . . . . . . . . . . . . . . . . . . . . . .147.70* –3.90 155.00 100.40 Next . . . . . . . . . . . . . . . . . . . . .2033.00 –19.00 2360.00 1657.00
BHP Billiton . . . . . . . . . . . . . . .1892.50 –27.50 2346.00 1583.50 GlaxoSmithKline . . . . . . . . . . . .1260.00* +11.00 1347.00 1088.00 Northumbrian Water . . . . . . . . . .343.20* +1.00 344.90 225.20 Telecity . . . . . . . . . . . . . . . . . . . .483.00 –2.50 512.00 311.30
BlackRock Mining . . . . . . . . . . . .589.00 –7.50 654.50 448.00 Great Portland Estates . . . . . . . .324.70 –3.90 333.60 236.60 Old Mutual . . . . . . . . . . . . . . . . .134.00 –1.80 138.50 90.10 Templeton Emrg Mkts . . . . . . . . .568.00 –2.00 598.00 410.20
Bluecrest Allblue GBP . . . . . . . . .167.60 –0.30 169.00 138.30 Greene King . . . . . . . . . . . . . . . .425.50* –4.00 504.00 372.50 Pace . . . . . . . . . . . . . . . . . . . . . .203.90 –4.10 243.80 145.00 Tesco . . . . . . . . . . . . . . . . . . . . .410.45 –4.35 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .45.00 –0.50 49.50 35.00 Halfords . . . . . . . . . . . . . . . . . . .501.00 –3.50 562.50 324.00 Partygaming . . . . . . . . . . . . . . . .272.60 –0.40 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .192.30 –1.70 277.20 172.30
BP . . . . . . . . . . . . . . . . . . . . . . .406.80 +0.30 658.20 296.00 Halma . . . . . . . . . . . . . . . . . . . . .282.50 –4.10 298.70 198.00 Pearson . . . . . . . . . . . . . . . . . . .985.00* –15.00 1069.00 733.00 Tomkins . . . . . . . . . . . . . . . . . . .323.10 –0.20 325.70 155.00
Brit Insurance . . . . . . . . . . . . . . .956.50 –12.00 1017.00 709.00 Hammerson . . . . . . . . . . . . . . . .374.20* –1.10 460.30 332.20 Pennon . . . . . . . . . . . . . . . . . . . .597.00* +3.50 613.00 440.40 Travis Perkins . . . . . . . . . . . . . . .799.00 –3.50 915.00 647.50
British Airways . . . . . . . . . . . . . .227.00 +6.20 255.80 172.40 Hargreaves Lansdown . . . . . . . .386.00 –1.00 408.40 259.40 Persimmon . . . . . . . . . . . . . . . . .396.70 –0.20 534.50 335.90 TUI Travel . . . . . . . . . . . . . . . . . .218.20* –3.20 313.90 189.20
British Amer. Tob . . . . . . . . . . .2310.00* –5.00 2335.50 1832.00 Hays . . . . . . . . . . . . . . . . . . . . . . .98.15 –0.60 119.00 82.50 Petrofac . . . . . . . . . . . . . . . . . .1405.00 –12.00 1446.00 892.50 Tullett Prebon . . . . . . . . . . . . . . .378.70 –7.80 436.20 261.20
British Empire Tst . . . . . . . . . . . .445.50 –7.50 467.90 338.50 Henderson . . . . . . . . . . . . . . . . .132.40* –1.40 157.80 112.10 Petropavlovsk . . . . . . . . . . . . . . 1101.00 –12.00 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1228.00 +46.00 1375.00 979.50
British Land . . . . . . . . . . . . . . . .474.80 –5.40 531.00 416.00 Heritage Oil. . . . . . . . . . . . . . . . .327.90 –5.50 585.00 298.20 Premier Farnell . . . . . . . . . . . . . .238.70 –1.80 252.60 140.60 UK Commercial Prop. . . . . . . . . . .81.25 +1.95 84.90 69.10
Britvic. . . . . . . . . . . . . . . . . . . . .469.30 –5.60 518.00 324.80 Hikma Pharma . . . . . . . . . . . . . .800.00 — 813.00 440.00 Premier Oil . . . . . . . . . . . . . . . .1573.00 –6.00 1634.00 984.00 Ultra Electronics . . . . . . . . . . . .1722.00* –7.00 1761.00 1198.00
Brown(N.) . . . . . . . . . . . . . . . . . .231.50 +0.80 284.30 204.80 Hiscox . . . . . . . . . . . . . . . . . . . .362.40* +0.60 371.10 299.60 Provident Financial . . . . . . . . . . .846.50 –8.50 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1743.00* –15.00 2024.00 1610.00
BSkyB . . . . . . . . . . . . . . . . . . . .708.50 –0.50 732.00 521.00 Hochschild Mining . . . . . . . . . . .360.00* –4.00 377.20 220.00 Prudential . . . . . . . . . . . . . . . . . .588.50* +0.50 665.00 475.70
BT . . . . . . . . . . . . . . . . . . . . . . .138.60* –2.00 151.00 108.40 Home Retail . . . . . . . . . . . . . . . .222.50 –4.60 336.50 208.50 PZ Cussons . . . . . . . . . . . . . . . .330.80* +1.60 373.20 213.30 United Utilities . . . . . . . . . . . . . .594.50 +7.50 620.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .746.00 –1.50 784.50 580.00 Homeserve . . . . . . . . . . . . . . . . .476.80 –7.40 491.10 435.40 Qinetiq . . . . . . . . . . . . . . . . . . . . 115.50 –0.80 179.10 103.50 Utd Business Media . . . . . . . . . .570.00* +1.50 587.50 408.30
Burberry . . . . . . . . . . . . . . . . . . .874.00 +1.00 891.50 457.70 HSBC Hldgs . . . . . . . . . . . . . . . .662.40* –0.40 766.80 595.20 Randgold Resources. . . . . . . . .6080.00 +65.00 6600.00 3930.00 Vedanta Resources . . . . . . . . . .1980.00 –22.00 2967.00 1761.00
Cable & Wire Comms . . . . . . . . . .57.95 +0.15 150.00 53.00 Hunting . . . . . . . . . . . . . . . . . . .620.00 –4.50 659.50 429.10 Reckitt Benckiser . . . . . . . . . . .3360.00* +3.00 3667.00 2887.00 Victrex . . . . . . . . . . . . . . . . . . . 1149.00 +9.00 1320.00 726.50
Cable & Wire Wwide . . . . . . . . . . .70.10 –2.65 94.80 60.05 ICAP . . . . . . . . . . . . . . . . . . . . . .419.40 –12.50 478.30 291.70 Reed Elsevier . . . . . . . . . . . . . . .538.00 –4.00 566.00 442.80 Vodafone . . . . . . . . . . . . . . . . . .159.90 +0.10 160.35 126.50
Cairn Energy. . . . . . . . . . . . . . . .449.00 –7.80 497.60 306.80 IG . . . . . . . . . . . . . . . . . . . . . . . .504.00 –6.50 532.00 291.00 Regus . . . . . . . . . . . . . . . . . . . . . .73.85 +0.60 125.50 64.05 Weir . . . . . . . . . . . . . . . . . . . . .1319.00 +36.00 1326.00 631.00
Caledonia Invs . . . . . . . . . . . . .1580.00 –34.00 1759.00 1496.00 Imagination Tech Gp . . . . . . . . . .382.60 –0.70 385.00 154.00 Renishaw . . . . . . . . . . . . . . . . . .865.00 — 915.50 479.00 Wetherspoon(J.D.) . . . . . . . . . . .440.60 –5.90 556.00 378.70
Capita . . . . . . . . . . . . . . . . . . . . .732.00* –10.50 829.50 674.50 IMI . . . . . . . . . . . . . . . . . . . . . . .739.00 –3.00 786.00 410.00 Rentokil Initial . . . . . . . . . . . . . . .102.20 +0.30 140.20 91.15 WH Smith . . . . . . . . . . . . . . . . . .431.90 –3.10 551.00 392.20
Capital & Counties . . . . . . . . . . .128.80 +2.10 129.30 99.60 Imperial Tobacco. . . . . . . . . . . .1865.00 +7.00 2159.00 1709.00 Resolution . . . . . . . . . . . . . . . . .251.30 –2.00 264.80 220.10 Whitbread . . . . . . . . . . . . . . . . .1501.00 –11.00 1645.00 1100.00
Capital Shopping Centres . . . . . .349.40 –9.00 580.00 300.10 Inchcape. . . . . . . . . . . . . . . . . . .280.70 –2.10 347.00 235.00 Rexam . . . . . . . . . . . . . . . . . . . .313.50 –2.90 348.80 253.40 William Hill . . . . . . . . . . . . . . . . .176.50 +0.20 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .310.90 –3.30 361.90 263.90 Informa . . . . . . . . . . . . . . . . . . . .402.20* +0.90 439.40 263.30 Rightmove . . . . . . . . . . . . . . . . .691.50 –1.50 729.00 456.90 Witan Inv Tst . . . . . . . . . . . . . . . .448.90* –0.70 487.00 385.00
Carnival . . . . . . . . . . . . . . . . . .2288.00* –3.00 2937.00 1872.00 Inmarsat . . . . . . . . . . . . . . . . . . .689.50 –6.00 831.00 523.00 Rio Tinto . . . . . . . . . . . . . . . . . .3447.50* –62.50 4104.00 2423.00
Catlin . . . . . . . . . . . . . . . . . . . . .348.70* — 394.60 303.20 Intercontl Hotels . . . . . . . . . . . .1065.00* –8.00 1244.00 737.50 RIT Capital Partners . . . . . . . . . 1149.00 –10.00 1215.00 940.00 Wolseley . . . . . . . . . . . . . . . . . .1353.00 –9.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .179.70 –0.80 182.90 92.00 Intermediate Capital . . . . . . . . . .279.80 –8.10 332.00 233.50 Rolls Royce . . . . . . . . . . . . . . . .570.00 –3.50 631.50 434.50 Wood Group (John). . . . . . . . . . .378.10* –8.30 411.70 279.60
Centrica . . . . . . . . . . . . . . . . . . .331.10 –1.10 333.40 236.30 Intertek . . . . . . . . . . . . . . . . . . .1698.00 +12.00 1770.00 1136.00 Rotork . . . . . . . . . . . . . . . . . . .1615.00* –14.00 1641.00 967.00 WPP . . . . . . . . . . . . . . . . . . . . . .673.00 –8.50 744.00 510.00
Charter Intl . . . . . . . . . . . . . . . . .658.50* –13.00 855.50 563.50 Intl Personal Fin . . . . . . . . . . . . .258.50 +4.90 283.00 135.30 Royal Bank Of Scot . . . . . . . . . . . .46.11 –0.84 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1070.00 –19.00 1344.50 815.00
Chemring . . . . . . . . . . . . . . . . .2792.00 +8.00 3711.00 2166.00 Intl Power . . . . . . . . . . . . . . . . . .386.90 +0.60 394.10 248.20 Royal Dutch Shell A . . . . . . . . .1803.00* –24.00 2068.50 1621.00 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .670.50 –5.50 806.50 657.00 Invensys . . . . . . . . . . . . . . . . . . .269.20 +18.60 350.30 224.90 Royal Dutch Shell B . . . . . . . . .1749.00* –12.00 1997.50 1550.00
Cobham . . . . . . . . . . . . . . . . . . .222.50 +0.40 278.60 205.50 Investec . . . . . . . . . . . . . . . . . . .491.70 –9.30 565.00 411.50 RSA Insurance . . . . . . . . . . . . . .125.70* –1.50 142.00 114.10 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . .120.40 –0.60 144.20 107.70 ITV . . . . . . . . . . . . . . . . . . . . . . . .57.05 –1.50 71.75 41.04 SABMiller . . . . . . . . . . . . . . . . .1925.50 –20.00 2090.00 1436.00
Compass . . . . . . . . . . . . . . . . . .540.50 +1.50 574.50 337.90 Jardine Lloyd Thompson. . . . . . .561.00* –13.00 604.50 420.70 Sage . . . . . . . . . . . . . . . . . . . . . .249.30 –3.20 260.50 208.20 www.interactivedata.com

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FTSE’s winning streak comes to an end US market falls as fears

after Barclays and mining shares sink on European banks weigh
ment. 2.92 per cent from benchmark 10-year bined. That contrasted with the 2009

THELONDON The FTSE 100 closed 31.37 points or

0.6 per cent lower at 5,407.82, after
gaining 6.5 per cent in the previous
British gilts.
Barclays dropped 2.7 per cent after
it said it had appointed Bob
THENEW YORK average daily volume of 9.65bn
shares.
The Dow Jones industrial average
REPORT seven sessions, and volumes were 63
per cent of its 90-day daily average.
“The market will be very range-
Diamond, the head of its investment
and wealth management business, as
its new group chief executive.
REPORT fell 107.24 points, or 1.03 per cent, at
10,340.69. The Standard & Poor’s 500
Index lost 12.67 points, or 1.15 per

B
RITAIN’S top share index fell bound between the 5,000 and 5,500 The appointment raised the issue cent, at 1,091.84. The Nasdaq

U
from a four-month closing high level. It’s difficult to see what will be of whether the lender might become S stocks fell in very light vol- Composite Index shed 24.86 points, or
and ended a seven-session win- the catalyst to enable it to break more of an investment bank, a trader ume yesterday as investors 1.11 per cent, at 2,208.89.
ning run yesterday, led lower by through the ceiling at 5,500,” said said. seized on renewed concerns The KBW Bank index lost 3.2 per
Barclays after management changes Tim Whitehead, head of portfolio The banking sector, down 0.7 per about European banks as a rea- cent and the S&P financial index fell
and miners on concerns over service at Redmayne-Bentley. cent, was also hurt by renewed fears son to sell shares after strong gains 2.4 per cent.
Australia’s tax plan. “There is definitive support of the over capital reform from the Basel last week. European bank shares traded on
In positive news, Invensys climbed market at 4,800 on yield ground, committee and after Wall Street Banks, energy companies and chip- Wall Street lost ground. Barclays US-
7.4 per cent, with traders citing a especially with government bond Journal said the recent European makers were the biggest decliners. traded shares dropped 5.7 per cent to
newspaper report that the engineer- yields yielding so little.” bank stress tests understated some Trading was among the lightest of $19.13, Deutsche Bank ADRs were
ing group is a takeover target. An The UK benchmark offered a divi- lenders’ holdings of potentially risky the year, with 6.07bn shares traded down 3.2 per cent at $62.52, and UBS
Invensys spokesman declined to com- dend yield of 3.37 per cent, versus the government debt. on the NYSE, Nasdaq and Amex com- ADRs dipped 2.9 per cent to $17.52.
CITYA.M. 8 SEPTEMBER 2010
Size does matter: the rise
of the mega pension fund
Big can be beautiful
but success depends
on enhancing the
governance structure,
writes Jessica Mead
F
OR pension funds, size really does
matter. While the need to match
assets and liabilities concerns all
funds, big or small, the largest face
unique advantages and challenges.
And the number of large funds is grow-
ing. Last week, the IPE Global Top 1,000
survey of institutional investors highlight-
ed the rise of the mega-fund, showing that
the number of European pension funds
with assets under management (AUM) of
€10bn or more has risen by 24 per cent
between 2006 and 2009 to 75.
Research conducted jointly by Towers
Watson and Pensions & Investments yes-
terday showed that the top 20 funds glob-
ally saw their assets rise by 6.2 per cent to
$4.4 trillion in 2009. This is their highest
AUM ever and accounts for more than 16
per cent of global pension assets.
These larger funds usually have greater
internal resources. This gives them much
more ability to diversify not only among
investment managers but also across asset
classes, says Tom Geraghty, European head
of Mercer Investment Consulting.
In contrast, smaller institutional
investors, which are less likely to have the
internal resources to do the due diligence
on alternatives such as private equity and
property, find themselves hamstrung.
Bigger funds also tend to be in a better
negotiating position: “Size affords you the
ability to negotiate harder with suppliers
of products and services to reduce run-
ning costs in a serious and significant
way,” says John Belgrove, principal in
Hewitt’s investment division.
But while bigger can be better, more
assets under management can pose chal-
lenges for pension funds’ governance
structures and allocation decisions. When
you have a significant amount of assets it
can be difficult to be dynamic whereas
small and mid-sized funds can move assets
around without market impact. “The chal-
lenge to make timely decisions applies to
both larger and smaller funds. But for larg-
er funds there could be more operational
headaches associated with moving large
sums of money,” says Mercer’s Geraghty.
Make sure your active fund manager earns her fee
More correlated returns are
making it harder to beat the
market, writes Juliet Samuel
F
OR years, the debate has raged over
whether hedge funds and actively
managed funds – in which managers
pick assets individually as opposed to
simply tracking an index – are worth their
high fees. Now, research by Saltus Partners
suggests that the current economic climate
makes it particularly difficult for active
funds to differentiate themselves.
Saltus took 21 different kinds of invest-
ment, ranging from oil to US treasuries to
small cap companies, and compared the
Investment | Fund Management
Big beasts enjoy some Larger funds can also be slower to alter
natural advantages their investment decisions and to change
Picture: GETTY managers, he adds. The largest funds may
also come under more scrutiny when it
comes to shareholder engagement and
stewardship.
To meet all of these issues, the gover-
nance models of the large pension funds
are starting to change, says Hewitt’s John
Belgrove. He says that the traditional
model of governance resulted in pension
funds that had a fairly significant equity
weighting but with little exposure to alter-
natives. They also took a very long-term
investment approach and consequently
were prepared to take on more risk.
However, funds such as USS and Railpen
are moving towards a more active
approach, which involves much more use
of alternatives. They have also hired inter-
nal resources to facilitate a broader range
of investment options and provide more
real-time stewardship of assets.
degree of correlation in their returns in the
last ten years versus the last three months.
They found that across the board, returns
are more correlated with one another now
than they have been over the last decade.
This means that it is harder for active
managers to pick assets that will outper-
form the average benchmark – and conse-
quently harder for them to earn their
premium fees. Actively managed funds typ-
ically charge 1-1.5 per cent in fees plus a
levy of around 20 per cent on returns above
a stated watermark (this is down from 4
and 40 per cent in the heyday of hedge
funds). This compares with a normal pas-
sive fund fee of around 0.25-0.5 per cent.
Shiv Taneja of Cerulli Associates says
that in the current climate, “Active man-
agers are really having to earn their keep
Consequently, the mega pension funds are
now calling on consultants more for proj-
ects and specific tasks.
Ever-larger funds will be forced to follow
the lead of the likes of USS and RailPen.
They will have to diversify more broadly
and bolster their internal resources to
cope with coordination and more thor-
ough due diligence on such epic scales.
ANALYSIS l Total value of top 20 fund assets
Value of assets (US$ bn)
5,000 Source: Towers Watson
4,350
4,500
3,829
4,000 3,525
3,500 3,237
3,000
2,500
2,000
1,500
1,000
500
0 managing emerging market resource equity
2004 2005 2006 2007
and a large number are not doing well at
all”. This is borne out by data compiled by
Hedge Fund Research: its global hedge
fund index shows that, year-to-date, the
average return has been just 0.18 per cent.
Investors can still hedge by diversifying
the assets to which they are exposed, but
the usefulness of the middle man who
promises to deliver better hedges than the
market average has diminished. Saltus’
research finds, for example, that in the past
three months, UK 10-year treasuries have
been almost perfectly negatively correlated
with UK large cap stocks, which means that
investors do not need a fund manager to tell
them which shares will make a good hedge.
The reason for this correlative strength,
says Saltus Partners’ Dan Kemp is that
“everyone has become entirely macro-
19
FUND
MANAGEMENT
NEWS
BY JESSICA MEAD
Bright new offering from Threadneedle
NEW ABSOLUTE RETURN FUND TO LAUNCH
Threadneedle has this week announced
plans to launch its UK Absolute Alpha Fund
in the fourth quarter of this year, bolstering
the asset management house’s range of
absolute return funds and responding to
growing client appetite for such products.
Mark Westwood and Chris Kinder, who both
have long/short experience, will manage the
UCITS-III fund. For institutional investors,
the annual management charge will be 1 per
cent and the performance fee is 20 per
cent.
OBSR REINSTATES SCHRODER FUND RATINGS
Research house Old Broad Street Research
(OBSR) yesterday announced that it has
reintroduced Schroder’s Income and Income
Maximiser funds ratings. Both ratings were
suspended in 2010 following the departure
of previous managers Nick Purves and Ian
Lance. The two funds are now managed by
Nick Kirrage and Kevin Murphy, who have
successfully managed the Schroder Recovery
fund since July 2006. The Income fund is
now rated A, having been AA-rated prior to
its suspension while the Income Maximiser
fund has been reinstated at A.
ST JAMES’S PLACE ADDS INCOME FUND
St James’s Place announced earlier this week
that it has added a UK & International
Income fund to its range. The fund, which will
launch on 18 October, will be run by Artemis
Investment Management’s Adrian Frost and
Adrian Gosden. St James’s Place said the new
fund aims to achieve an income exceeding the
average yield of stocks comprising the FTSE
All-Share, while providing scope for capital
appreciation over the medium-to-long term.
JP MORGAN EXPANDS COMMODITIES TEAM
4,432
4,172 JP Morgan Asset Management has added to
its natural resources team with the appoint-
ment of Neil Gregson, who was formerly sen-
ior portfolio manager at CGS Asset
Management. Gregson has worked in com-
modity investments for his whole career,
having been a mining investment analyst at
Gold Fields, a South African firm and, during
his time at Credit Suisse Asset Management,
2008 2009 funds.
focused because they realise that the share
price of a fantastic company doing all the
right things can be completely over-
whelmed by the background noise”. In
other words, in a fragile economic environ-
ment, investors are adopting a more top-
down, macro strategy of moving in and out
of sectors or asset classes wholesale, rather
than stock-picking.
But Kemp believes that instead of veering
away from active management in bad
times, investors should use this fallow peri-
od in which fees are relatively low (when
many funds are below their watermark
level) to find talented managers with strate-
gies that could bear fruit in the future.
Which means that investors should be sub-
jecting their premium-cost fund managers
to more scrutiny than ever.
 20 Investment | Foreign Exchange CITYA.M. 8 SEPTEMBER 2010

THE SWISSIE:
A SAFE HAVEN
FOR TRADERS
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT

O
NE of the strongest trends in the currency
market this year has also been one of the
least noticed. While the majority of curren-
cy traders have been focusing on dollar-yen
as risk aversion flows pushed that pair to 15 year
lows, the Swiss franc has quietly forged a massive
rally of its own against the euro while reaching
near parity status against the dollar. Since the end
of last year euro-Swiss franc has fallen steadily
from SFr1.5000 to hit a new record low of
SFr1.2920 early this week as the Swissie has Złoty strength is still bound by the global economic climate Picture: REX
become the preferred currency alternative amid
the sovereign debt concerns in Europe and the

Złoty jumps as leu sinks

double dip recession fears in the United States.
Some analysts are now calling the Swiss franc
the “new deutschmark” due to the strength of the
Swiss economy, the country’s massive capital
reserves and the franc’s traditional status as a
safe haven instrument. Given the strength in the
underlying economy, the Swiss National Bank
(SNB) under normal conditions would have
already moved away from its ultra accommoda-
Europe’s north-south the euro but, barring the resurgence of
global economic instability, could be set to
Likewise the Romanian leu shows little
sign of shifting upwards from its current
tive policy by raising rates from their record low
of 25 basis points. But the persistent rise in the divide moves east, break out of this band to continue its
strengthening against the euro. Traders
4.3-lei level against the euro. Shearing says:
“There’s a combination of a fragile banking
franc has curtailed any tightening measures, and
the strength of the currency itself appears to have writes Juliet Samuel should beware, however, of central bank
intervention if this occurs, which, though
sector still dependent on IMF measures and
austerity measures that will bring that
curbed any nascent inflationary pressures. unlikely to keep the koruna down in the under increased tension.”

For now Switzerland is enjoying the best of all
worlds as its economy continues to expand
despite the strengthening franc while inflation
remains contained. However, if Eurozone growth
begins to wane into the end of the year while at
the same time sovereign debt concerns precipitate
a further fall in euro-Swiss franc, the economic
picture for Switzerland may no longer look nearly
so benign. The country’s critical export sector
could face a much more challenging environment
in 2011 and the SNB would then face a much
tougher task of combating the rise of an already
record high Swiss franc just as growth begins to
slow. Swiss monetary officials may be forced to
intervene in the markets if the euro-Swissie pair
hits SFr1.2500 and dollar-Swissie breaks parity.
However, despite their best efforts the rally in the
Swiss franc is likely to continue as long as global
economic uncertainty persists.
Boris Schlossberg and Kathy Lien are directors
of currency research at GFT. Read commentary at
www.GFTUK.com/commentary or e-mail borisand-
kathy@gftuk.com.
T
HE Polish złoty broke out of a two-
week trading range this week,
strengthening from 4.017zł to
3.9277zł to the euro – a level close to
that seen in May during the explosion of
the euro crisis.
The movement is the latest in a growing
divergence among Eastern Europe’s most
widely traded currencies. While, on the one
hand, the złoty and Czech koruna have
strengthened against the euro over the
summer, the Romanian leu and Hungarian
forint have sunk lower. This suggests that
while risk appetite is still the governing fac-
tor in regional currency fluctuations, the
market could eventually begin to price in
more specific national factors.
Poland’s currency has benefited from
higher-than-expected GDP growth figures
for the second quarter – at 3.5 per cent ver-
sus an anticipated 3.2 – as well as the expec-
tation of a rate rise. Analysts at Societe
Generale suggest: “The fundamental envi-
ronment is supportive, including the forth-
coming tightening of monetary policy and
the government’s commitment to
reducing fiscal imbalances.” As a result,
SocGen targets 3.90zł in the near-term.
The Czech koruna, meanwhile, remains
stuck in its current range of 24.6-24.8Kc to
long-term, could delay its rise.
Among the weaker southern currencies,
the Hungarian forint has suffered from
Budapest’s ongoing dispute with the
International Monetary Fund (IMF) over its
program of deficit reduction. Capital
Economics’ Neil Shearing thinks that
although most of the current bad news is
priced in, the likelihood of more to come
could push the forint lower: “I wouldn’t be
surprised to see further spats with the IMF
push the forint back towards 300,” he says.
ANALYSIS l Euro - Polish złoty
zł
4.20
4.15
4.10
4.05
4.00
3.95
14 Jun 21 Jun 28Jun 5 Jul
Despite this north-south divergence,
however, global economic trends still tend
to rule the roost when it comes to minor
currencies. This means that even with the
best GDP growth on record and convincing
deficit reduction plans, Eastern Europe’s
currencies will find it difficult to attract
buyers if the sovereign debt crisis erupts.
The market’s counter-intuitive flight to
“safe” havens still means that euro turmoil
results in euro strength against almost any
minor currency.
12Jul 19 Jul 26 Jul 2 Aug 9 Aug 16 Aug 23 Aug 30 Aug

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CITYA.M. 8 SEPTEMBER 2010 Investment | Foreign Exchange 21

THE
Get exposure to ANALYSIS l Performance of sterling-dollar
1.548
1.546
1.544
1.542
$ over the past five sessions
TIPSTER
YEN HOVERS
AT CURRENCY
fast markets by
1.540
1.538
1.536 CROSSROADS
1.534
1.532

Y
ESTERDAY the dollar hit a 15-year low
against the yen. Much has been made

day trading FX
1 Sep 2 Sep 3 Sep 6 Sep 7 Sep of the effect this will have on the
Japanese recovery. Monday saw the
Bank of Japan announce that interest rates
will remain unchanged, and that the quantita-
tive easing programme will not be extended
to defeat deflation. Some think that the yen
is likely to weaken in the next few months
Volatility can offer big wins, but traders need to with resistance remaining at ¥84.55 –
traders who agree should buy at that level.
employ the right tactics, says Donata Huggins The current Cantor Index price is ¥83.83-
¥83.85. On the other hand some analysts
stress the Bank of Japan’s impotence and
expect the yen to strengthen even further.

D
OLLAR-STERLING moved 150 points
on Monday’s US Labor Day holiday.
The market clearly did not take a
break. It is a reminder that the rest-
less forex market offers day traders real
opportunities: tight spreads and sharp
movements that can be dipped in and out
of at low cost.
The volatility can mean big wins, but
traders need tactics to ensure they put
the right foot forward. Sometimes strate-
gies can be as simple as watching for
momentum, eyeing a gradual tumble or
up-swing and following suit. For instance,
Monday saw sterling tumble against the
dollar all morning. Whereas yesterday
saw the pound slide to 153.50 and bounce
back 30-40 points three times over. Follow
quickly enough and traders could edge
themselves ahead of the pack.
Although national holidays don’t make
for sleepy forex days, David Jones of IG
Index does suggest picking trading days
wisely, particularly when new to the busi-
ness. Macro data releases such as employ-
ment figures, inflation and interest rates
can drive a currency wild. Savvy traders
will have an economic calendar to hand,
with dates such as US non-farm payroll
figures circled for attention.
Don’t be alarmed by every announce-
ment, many – including retail sales data –
can be pretty tame.
Some traders lose out as lively currency
makes them either overly cautious or too
lax. A poorly placed stop loss will either
fail to protect or take a trader out too
soon. The trick is to consult the charts
and work out the trends.
Jones says: “You mustn’t be too cau-
tious, a currency can easily jump between
50-80 points in a day. It’s silly to put a stop
loss in too tight, putting one in at 50-100
points doesn’t necessarily mean accept-
ing that kind of loss.”
Forex is a different game to stocks, even
Vodafone – regardless of the effect that
could be caused by its chairman’s depar-
ture – is generally unlikely to move more
than five to six points in a day. Factoring
in turbulence doesn’t mean blindly stick-
ing with the initial bid, but being aware
that playful markets need space to move
around.
New traders can go exotic with bids on
the Hungarian forint (see opposite), but
it’s better to play it safe with the common-
ly traded currencies. The dollar-euro is
most popular with 32 per cent of the mar-
ket trading it. The dollar-yen and dollar-
sterling follow close behind (see chart). FX
trading tends to mirror the underlying
market. This is a helpful way for traders to
think through their pair choice.
For detailed tactics and strategies join City
A.M.’s editor Allister Heath and GFT’s Boris
Schlossberg for an “all-things-forex” seminar.
Thursday 23 September, 8am-10am, The Grange
Hotel, London. Register at gftuk.com/cityam
ANALYSIS l Percentage of traded currency pairs as a share
of average daily turnover
USD/EUR 32%
USD/JPY 14%
USD/Other 13%
% USD/GBP 13%
USD/AUD 6%
USD/CAD 4%
Source: Bank of International Settlement
NB: Figures may not sum to 100 due to rounding
Spreadex offers a spot price for dollar-yen of
¥83.72-¥83.78.
Germany factory orders have slowed,
spelling economic vulnerability for the
Eurozone, but at a time when the outlook is
equally bleak for the UK, the euro is holding
up well against the pound. Unless sovereign
debt issues or ratings downgrades begin to
resurface in the Eurozone, any weakness in
the single currency is likely to be capped at
€0.8300. The current IG Index price is
€0.8328-€0.8331.
There was no holiday Cable hit a six and a half week low of
this Monday for $1.5296 on Monday after it broke through
dollar-sterling support at $1.5350. However, the dollar did
weaken late in the European session, allowing
Picture: GETTY cable to retrace back to the $1.5345 region.
Sterling-dollar does look to be in a bearish
downtrend and $1.5350-$1.5400 should act
as resistance in the near term so look to sell
around these levels with a target of $1.5150.
USD/CHF 4% Spread Co offers a spread on sterling-dollar
EUR/JPY 3% of $1.5338-$1.5341.
Every time dollar-Swiss franc aims for
EUR/GBP 4% parity, the rally is met with fresh waves of
EUR/Other 3%
EUR/CHF 2%
selling. A downtrend resistance line has been
in place since the beginning of August, cur-
rently sitting at around SFr1.0140 to the dol-
Other pairs 3% lar. Traders should sell SFr1.0140-SFr1.0170
for a target of SFr1.000. Spread Co offers a
spread of SFr1.0117-SFr1.0120.
Donata Huggins

FOREX ANALYST PICKS

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

My pick: Stay short cable from $1.55; long euro-Swissie above SFr1.3150
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day-1 week
My interest in the sterling last week has paid off more with my sterling-
Aussie short (having booked profit) than my sterling-dollar short. I will
remain short on this major currency pair. In the meantime, event risk this
week is light; which means the market could be more conducive to
trends. As a risky, short time frame setup, I like a potential head-and-
shoulders reversal on euro-Swissie on a move above SFr1.3150 with a
stop 100 pips away and a target 200 basis points above.
My pick: Remain short euro-US dollar at $1.2660
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
I sold euro-dollar at $1.2660 on 23 August as prices confirmed the
break of a rising trend line set from the low in early June with a push
through horizontal support in the $1.2715-$1.2755 congestion region. A
shallow recovery has taken rates higher for re-test of $1.29 but I expect
the re-emergence of risk aversion in the autumn to boost safety-linked
demand for the dollar and will stay short. My initial target remains at
$1.2130, with a stop-loss to be activated on a daily close above $1.2925.
My pick: Sell Aussie-US dollar at US$0.9060
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
The market has been well bid for several months – the latest rally
opened yet another move beyond critical psychological barriers
near US$0.9000 – but longer-term studies show the price trading
near cyclical highs. A closer look at the major moving averages on
the daily chart shows them all coiling together to warn of a major
move ahead, which we contend will be to the downside. Sell at
US$0.9060 with a US$0.8500 target and a stop at US$ 0.9310.
 City Focus
22
Clash of cultures
can scupper law
firms’ mergers
Transatlantic tie-ups
don’t always solve
problems, writes
Jeremy Hazlehurst
T
HE Americans are coming.
Hammonds has become the latest
firm to announce that it is to merge
with a US firm, confirming last
week that it is to link up with Squire
Sanders. It follows the merger of Hogan
Lovells with Hartson earlier in the year,
and the announcement that SJ Berwin is
talking to Boston-based Proskauer Rose
about a tie-up. Dean Wilde Sapt’s link-up
with Sonnenschein Nath & Rosenthal will
be signed at the end of this month.
Mergers between British and American
firms are nothing new, of course. City
stalwarts DLA Piper, Clifford Chance,
Dechert, Mayer Brown, Jones Day and
Reed Smith are all the results of US/UK
link-ups. The million-dollar question is:
are they a good idea?
That depends on what you want out of
a merger. In the Hammonds-Squire
Sanders deal, it’s pretty clear. Squire
Sanders says that it wants to strengthen
its presence in Central and Eastern
Europe, areas in which Hammonds is
strong. For Hammonds it is about sur-
vival. The firm’s announcement of the
deal is telling, boasting that when the
merger goes through on 1 January the
new firm will have 1,300 lawyers and rev-
enue of $400m. That suggests that size
How to show cyber-bullies the chatroom door
SARAH WEBB
RUSSELL JONES & WALKER
L
AST month Aim-listed oil company
Nighthawk Energy went to court to
force two investment chatrooms to
reveal the identities of people who
had been posting “persistent defamatory
and untrue postings” about the firm.
This is the first time that such a case has
been undertaken, and it could offer a
course of action for firms that have been
the victims of malicious postings on web-
sites.
Specialist business websites and blogs
have helped spread information about
firms on the internet. But when false
rumours about performance are posted
on these sites the damage can be consid-
erable and enduring. Now companies are
| Law
means solidity, and is intended to head
off worries about the firm caused by its
shedding 42 fee earners and a larger num-
ber of back-office staff at the end of 2008.
Hammonds suffered during the down-
turn. Its revenues fell 6 per cent to
£117.8m in the 2009-10 financial year. The
redundancies allowed it to shore up its
profits, although they were still only
£22.6m in 2009/10. Profit per equity part-
ner rose 32 per cent to £364,000. That
number looks healthy enough, but the
accusation of smoke and mirrors is
strong; the figure only remained so high
because of the savings gained from the
redundancies. Hammonds certainly looks
like a firm in need of a shot in the arm.
Squire Sanders’ revenues in 2009 were
$545m (£353m), and so it seems that it
might be in a position to offer one.
So from the point of view of
Hammonds’ partners it’s clear that this is
a good move, but many lawyers in the
City are wary of mergers. Some argue Saying hello is
that they are all too often the inevitable the easy bit.
result of internal pressure, rather than
carefully thought-out commercial tactics. Picture: GETTY
As firms grow they hire young associates,
goes the argument, but as their careers
progress they eventually demand to be
made partners and there is a pressure to
move into new practice areas to create
work for them. This means more associ-
ates, and eventually the firm balloons
dangerously out of control, desperately
taking on more work that is far from its
core competency. Sooner or later, a merg-
er starts looking attractive, just to pull in
more work to fuel the uncontrolled
growth.
One lawyer who worked for a tradition-
beginning to realise the severe negative
impact of such blog postings on their
share price and trading reputation.
It is always difficult for the target of
such rumours to decide whether to
ignore them or to try and deal with them
either through public relations or the
courts. Frequently, corporate gossip will
spread as quickly as the latest antics of
footballers and celebrities.
But there is a quick and relatively
straightforward way to deal with damag-
ing and false information. Like an indi-
vidual, a company can sue for
defamation. Defamatory allegations that
damage a firm’s trading reputation or
negatively affect its business are action-
able, and companies are understandably
keen to protect themselves. Increasingly,
they are finding that they can obtain the
identity of what appear to be anony-
mous publishers of defamatory posts on
the internet, and potentially sue for
defamation.
This is possible through the use of
what are called Norwich Pharmacal
orders – where you can apply to the court
for a third party to disclose information
when it has innocently become caught
al City firm taken over by an American
one several years ago is sceptical about
whether these deals can work at all, sug-
gesting that in the end something has to
go. “In my firm they ended up cutting all
US/UK MERGERS | CITY VIEWS
Kevin Gold, managing partner at mid-sized
London firm Mischon de Reya: “There’s no doubt
these international mergers will dissipate cultures
and cause clashes. It can take many years to build
the new firm. You have to think about the fallout on
people who had loyalty to the old firm. You have to
wonder if you are adding value, or just creating a big-
ger problem.”
up in the “wrongdoing of another”. The
third party can be compelled to disclose
the identity of the “wrongdoer” so that
proceedings can be brought.
Organisations that host bulletin
boards or which invite comments in
response to articles on websites are usual-
ly protected from action against them for
defamation by Section 1 of the
Defamation Act. This protects what are
known as “innocent disseminators” –
those who are merely a conduit for the
publication of the defamatory material.
Because most bulletin board hosters do
not moderate content before it is pub-
lished, they are not considered to be pub-
lishers and can rely on the protection of
Section 1.
However, if defamatory allegations are
posted then the hoster is “caught up in
the wrongdoing”. This means that the
company which has been defamed can
apply for a Norwich Pharmacal order
against the firm that published the
defamatory material to disclose the
email address of the person who posted
it. It is also possible to use internet serv-
ice providers to get at the underlying IP
address for that email – sometimes nec-
CITYA.M. 8 SEPTEMBER 2010
of their traditional UK work, which sug-
gests they didn’t know what they were
getting in the first place,” he says. “The
Americans never quite know what they’ve
let themselves in for.”
Matthew Rhodes, founder of legal community
website RollOnFriday: “Firms on both sides of the
Atlantic are looking to crack Asia, and know that con-
solidation and global reach are vital. Add a market
obsessed with brand, and mergers look attractive. The
Hogan Hartson-Lovells merger has created a firm that
competes in size and reach with Baker & McKenzie
and DLA Piper, but a better brand than either.”
essary because the person who posts the
email will often disguise their identity.
Once details are obtained from the inter-
net service provider, it should be possible
to obtain the address of the registered
user of the fictitious email address. The
good news for firms that are defamed is
that these orders are generally obtained
without objection from the third party.
And because the courts are familiar with
them, they are easy and inexpensive.
Of course, the person who posted the
defamatory allegations is no more at risk
than any other defendant in defamation
proceedings. They can rely on the same
defences of truth, fair comment or quali-
fied privilege as any defendant can in
such a case if they can argue that the
matter is of public interest.
But Norwich Pharmacal orders mean
that the poster of a defamatory allega-
tion cannot simply hide behind a mask of
anonymity or attempts to disguise their
true identity. Because of the damage that
persistent defamatory allegations can
have on an organisation these orders can
be a very useful tool to a company that
needs to protect its reputation from
untrue allegations.
 Lifestyle
A car that’s easy to
live in
Peugeot’s new one is
every young family’s
dream – it’s all
about practicality
W
HEN I was a kid, we spent every
summer with family in
Cornwall, and every year my
father’s car used to break
down, extending what was a gruelling
journey into an epic, Herculean trial.
Fortunately for me, motoring has moved
on, and I’ve just done more than twice
the distance in about the same time it
took us to get to Cornwall – albeit in 1976,
before the M25 existed – sailing from
London to Provence in maximum com-
fort. Obviously throwing a skipload of
euros into the pockets of the tollbooths
along the motorway network made the
odyssey less than painful, offering as it
CAR TALK
MINI COUNTRYMAN LAUNCHES
MINI is launching its MINI Countryman on 18
September. With ALL4 four wheel drive available, the
crossover car offers extra space inside, has 350 litres of
boot space and a higher seating position for occupants.
So it’s a less mini and more maxi version of the MINI –
it's also the car with which the brand will return to the
World Rally Championships.
| Motoring
did the privilege of driving along empty
roads (save for a selection of other,
equally content tourists) also speed-
ing smugly from the Eurotunnel
towards their lavender-shut-
tered village haven. We were
driving the Peugeot 5008 – a
clever seven-seat MPV – and I
pretty much set the cruise
control at 130km/h in
Calais and just steered the
car to Provence.
It was a practical choice
for the journey. Unlike most
cars with this many seats
there is still room to swing a
cat, or at least transport a few of
them. With 578 litres of stowage
space when the third row seats are
folded down, that’s a lot of cats travel-
ling. It’s also pleasing to be able to stash
all your belongings in the boot rather The family-friendly
than find yourself nesting in between inside of the Peugeot
your paraphenalia as it is shoehorned
into every available space in the car, as so
often happens on family holidays.
LUXE NEW HATCHBACK FROM CITROEN
This is Citroën’s DS4, a new luxury family hatchback for
people that think a regular Citroën is just not posh
enough. The car is the second in the DS line up (are two
cars a line-up?), the first being the existing DS3. The
DS4 will be customisable like the DS3 and will have LED
running lights and a premium interior with lots of
chrome.
WORDS BY
RYAN BORROFF
Bigger than its 3008 sibling and possi-
bly more aesthetically pleasing, the
5008 is a marvel of functional design
practicality. Because the car is
squarely targeted at the family
market, it’s designed with a
whole bunch of stowage cub-
bies to ensure your little loved
ones can happily bring their
stuff too. The glovebox and
the centre console are big
enough to ensure that rum-
maging through them whilst
driving is a no-no. And in the
back there’s clever trapdoor
stowage under your feet too.
The seating too is superbly prac-
tical. We travelled from London to
the South of France with the rear-most
two seats in the floor to make use of the
large boot space available. Once there, we
pootled about with three other friends. It
is unusually easy to raise and lower the
rear-most seats into the floor – without
even needing to consult the manual.
With just one of the rear two seats down,
BY RYAN BORROFF
The facts:
you can afford a Mercedes
The figures:
mercedes-benz.co.uk/offers
For more information on our tailor-made
packages or to book a test drive, visit us online.
LAMBO’S NEW SUPERCAR
Look at this. This is the new Lamborghini super car that
will be launched at the Paris Motor Show at the end of the
month. It’s a teaser shot for the car – we don't know what
car it is either – but by the looks of it it’s constructed from
carbon fibre. A new low-weight, fuel-efficient super car
would certainly justify the boast that the car will show the
way “to the future of super sports cars”.
23
THE FACTS:
PEUGEOT 5008
PRICE: £21,195
0-62MPH: 10 secs
TOP SPEED: 121mph
CO2 G/KM:
MPG COMBINED:
THE VERDICT:
DESIGN
PERFORMANCE
151g/km
48.6mpg
hhhii
hhhii
PRACTICALITY hhhhi
VALUE FOR MONEY hhhii
there was still a surprising amount of
space. With six of us in the car, we took
turns leaping into what we named the
“jump seat” which turned out to be quite
a choice position, as it meant getting out
of the role of in-car entertainer for two
truculent tots in the
middle seats.
The car is a decent size and somehow
feels bigger inside than it is – even when
full – which is what you need when you’re
on a trip so long you feel like you’ve
moved into your car. And with enough
room in the rear footwells for a learner
walker to potter about in while powering
her way through the Channel Tunnel or
during breaks from a long odyssey along
the Autoroute des Anglais.
Other nice details include a sunglasses
holder, individual – and controllable – air
conditioning vents for rear seat passen-
gers, plus a seatbelt alarm to let you know
when your wrigglers have released them-
selves from their safety belt, and a display
panel, above the rear view mirror, which
flashes to let you know exactly which pas-
senger is trying to make a break for it. The
car even has an additional mirror above
the rear view mirror to enable you to keep
an eye on events in the back.
We were driving the 2.0 litre 150bhp
diesel Sport version. The car is surprising-
ly quiet when cruising along and with an
acceleration time of just 10 seconds to get
to 62mph it even feels swift. It also rides
well and doesn’t even feel like hard work
when parking either.
So what’s not to like? Well, the magnif-
icent panoramic roof is let down by the
fact that it’s non-opening – but then, it
does run almost the entire length of the
car, so no doubt engineering one that
could open would be tricky indeed.
So utterly designed for the family mar-
ket – the car even has built-in retractable
blinds to keep sunlight from children’s
eyes – it’s probably not for you unless you
need such practicality. But then if you do,
it’s a seductive proposition.
 24 Lifestyle | TV& Games CITYA.M. 8 SEPTEMBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Bang Goes the Theory;
BBC News
8pm Waterloo Road
9pm CHOICE Crimewatch
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Draws
10.45pm Crimewatch Update
10.55pm Reggie Perrin;
National Lottery Update
11.25pm FILM The Singing
Detective 2003; Weatherview
1.15am Sign Zone 2.15am Country
Tracks 3.10am Ben Fogle’s Escape in
Time 3.55am-6am BBC News
6pm Eggheads: Quiz show,
hosted by Dermot Murnaghan.
6.30pm Climbing Great
Buildings
7pm Queens of Heartache:
Profiles of 20th-century singing
icons.
8pm Coast: From Newcastle to
Hull.
9pm CHOICE The Big School
Lottery
10pm Grumpy Old Holidays
10.30pm Newsnight; Weather
11.20pm E Numbers: An Edible
Adventure
12.20am Home Movie
Roadshow Uncut
1.20am BBC News 3.55am-6am
Close
6pm London Tonight
6.30pm ITV News
7pm Emmerdale: Maisie
prepares to leave the village.
7.30pm CHOICE The
Unforgettable Mollie Sugden
8pm Midsomer Murders: A
land dispute leads to murder.
10pm ITV News at Ten
10.30pm London News
10.35pm Words of the Blitz
11.35pm Send in the Dogs
12.30am The Zone; ITV News
Headlines
2.30am FILM The Lion in Winter:
Oscar-winning histo rical drama,
with Peter O’Toole and Katharine
Hepburn. 1968. 4.50am-5.30am
ITV Nightscreen
6pm The Simpsons 6pm Home and Away
6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Channel 4 News 7pm Five News at 7
7.55pm 4thought.tv 7.30pm Michaela’s Zoo Babies;
8pm How to Look Good Naked Five News Update
9pm Ultimate Big Brother 8pm Emergency Bikers; Five
10pm Derren Brown: Hero at News at 9
30,000 Feet 9pm NCIS
11.15pm Ultimate Big Brother 10pm Law & Order: Criminal
11.45pm School of Comedy Intent
12.15am Student Tour 11pm Law & Order CRIMEWATCH
BBC1, 9.00PM
12.35am 4Play: Laura Marling 11.55pm Poker
Appeals for information on the cases of
12.50am The Crush 12.55am SuperCasino
1.15am Ultimate Big Brother: Live 4.05am Chinese Food in Minutes two burglars and a rapist. Kirsty
2.45am FILM Broken Lizard’s Club Young, Rav Wilding and Matthew
4.30am The Boss Is Coming to
Dread: Premiere. Comedy horror, Dinner 4.55am Animal Rescue Amroliwala present.
starring Bill Paxton. 2004. 4.30am
Squad 5.10am The New Tomorrow
Beach Volleyball 5.25am-6.10am
5.35am-6am Michaela’s Wild
Countdown Challenge

SKY SPORTS 1 BRITISH EUROSPORT 12am CSI: Crime Scene HISTORY DISCOVERY HOME &
SATELLITE & CABLE

Investigation 2am Charmed

7pm Sky Sports News 7.30pm
International Football 9.30pm
Total Rugby 10pm Boots ’n’ All
11pm FIFA Futbol Mundial
11.30pm International Football
1.30am Boots ’n’ All 2.30am
FIFA Futbol Mundial 3am
International Football 5am
FIFA Futbol Mundial 5.30am-
6am Total Rugby
SKY SPORTS 2
4pm Live US Open Tennis
10pm Transworld Sport 11pm
Inside the PGA Tour 11.30pm
Total Rugby 12am-4am Live
US Open Tennis
SKY SPORTS 3
7pm Total Rugby 7.30pm Live
Greyhound Racing 10pm Cage
Fighter 10.30pm Watersports
World 11.30pm Golfing World
12.30am European Tour Weekly
1am Inside the PGA Tour
1.30am Champions Tour Golf
2.30am-4.30am Poker Million
6.30pm Cycling: Vuelta a
Espana 7.30pm Snooker:
Shanghai Masters 9.20pm
Cycling: Vuelta a Espana
10.20pm MotoGP 11.50pm
Cycling: Vuelta a Espana
12.50am-1am Eurogoals Flash
ESPN
6.45pm VW Scirocco Cup
7.45pm DTM Review Show
8.45pm F3 Euroseries Review
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COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
    

SUDOKU KAKURO
6 13 5 8 21 41 19
3 13 11
29 9 
45
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 Fill the grid so that each block 20 10
11 35
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 22 15
 
above or to the left of it. 7 28 15 16
You can only use the digits 1-9 21 17    
     and you must not use the 10 18 12 
same digit twice in a block. 13
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16
    more than once in a row or
column, but it must be in a 6
16
23
8
22 15

12 24
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3 8
45
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   ACROSS DOWN
1 Ancient Mexican 1 Fisherman (6)
   
 WORDWHEEL G K
civilisation (5)
4 Skin covering the
top of the head (5)
2 Type of sousaphone (4)
3 Dress (7)
Using only the letters in the Wordwheel, you have 5 Monument built to
     ten minutes to find as many words as possible,
O J 7 One of the languages
honour soldiers (8)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters I spoken on the
Iberian Peninsula (7) 6 Wound (6)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N Y 8 Smallest amount (5) 9 Having a regular
wage (8)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E C
10 Scrutinise accounts (5)
12 Kingdom (5)
11 Cut off (7)

QUICK CROSSWORD 7 9 2 8 8 7 9 14 Finnish steam bath (5)

13 Railway locomotive (6)

+ $ 5 9 ( 6 7 ( '
4 2 3 1 6 6 3 1 SUDOKU          16 Fabulist of ancient
15 Fit for cultivation (6)
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1 $ 2 0 , 5 $ 7 , 2          singing voice (4)
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 Sport
25
“THE PRESSURE WAS REALLY
STRONG BUT HE PLAYED WELL”
ENGLAND BOSS CAPELLO LAUDS
SCORER ROONEY: PAGE 26

HAYE TAKES AIM AT AUDLEY

Pavin puts
his faith in
DAVID HAYE has
vowed to “close the
Audley Harrison
show once and for

Tiger for
all” when the for-
mer friends meet in
an all-British
heavyweight show-

Ryder Cup
down in November.
Harrison, 38, has
been given a shot
at Haye’s WBA
world heavyweight
title at the MEN

▲
Arena, Manchester, GOLF
on 13 November. BY JON COUCH
Haye, left, said: “I
don’t believe TIGER WOODS has vowed to repay the
Audley deserves a faith shown in him by captain Corey
chance but enough Pavin after getting the nod to play on
people want to see the US Ryder Cup team.
him finally The world No1 was one of Pavin’s
destroyed, that is four wildcard picks for the event at
why this fight is Celtic Manor on 1-3 October, joining
happening.” Zach Johnson, Stewart Cink and
Harrison added: “I Rickie Fowler.
am ecstatic at get- Woods, 34, missed out on the eight
ting a shot at the automatic qualifying places for the
title. When I land first time in his career following a tor-
my left hand on rid year, which led to five months out
him he is done.” from the game as he battled to save
his marriage.
Picture: ACTION “It’s great to be a part of this team,
IMAGES I’m honoured to be selected,” said
Woods, who missed the last event at
Valhalla in 2008 after knee surgery. “If
you go back a couple of months ago, I

Colly in seventh heaven after

was trying to make the team on points.
It wasn’t until the PGA that I didn’t.
“I think my game was turning
around then. I’ve played better the last
two weeks and here we are. I’ve been to
Wales previously in the Walker Cup

England stroll to series win

and looking forward to going back and
having a great time with the team and
hopefully bring the cup back.”
On picking Tiger, Pavin added: “I
was hoping he would qualify on
points,” said Pavin. “He didn’t but
then I was just waiting to see how he
in with two each as Pakistan were put haven’t conceded over 148 runs which going for just 10 runs and Swann was going to play. I was pleased to see
▲

CRICKET
BY JON COUCH
ENGLAND captain Paul Collingwood
hailed his side after rallying to a
record-equalling seventh successive
Twenty20 victory.
Collingwood’s men cruised to a
thumping six-wicket victory after
bowling Pakistan out for just 89 –
their lowest total ever in the short
form of the game.
All-rounder Tim Bresnan led the
way with 3-10, while fellow seamers
Ryan Sidebottom and Stuart Broad
and spinner Graeme Swann chipped
to the sword.
Only Collingwood scored above 20
in a jittery England reply, but they
never looked in danger with Eoin
Morgan (18no) and Michael Yardy
(6no) seeing them home safely with
six overs to spare.
“It’s a special achievement and we
obviously did it during the best time
which was during the World Cup,”
the proud captain said.
“I’m delighted in the response of
the dressing room and the bowlers as
a unit are doing fantastically well. I
think in the last seven games they
is fantastic in the Twenty20 format.
“We are just doing a lot of things
really good – and we still have a lot of
intent with the bat as well. Hopefully
that continues into the future.”
Pakistan got off to a flying start,
hitting Sidebottom for 11 in the first
over before Bresnan and Broad (2-18)
both struck to reduce them to 22-4
inside the powerplay overs.
Indeed, it was to prove a position
from which the tourists would never
recover with spin pair Swann and
Yardy doing their best to restrict the
middle order – Yardy’s four overs
claiming the wicket of top-scorer
Umar Akmal (17) on his way to 2-27.
Sidebottom polished off the tail to
finish with 2-22, giving the world
champions foundation for a series-
clinching win. Craig Kieswetter hit
two fours and a six in a quickfire 16
before Ravi Bopara and Collingwood
took a more cautious approach – the
former making just 12 from 24 balls.
But a typically stylish innings from
Morgan saw England through to keep
confidence high ahead of the first of
a five-match one-day international
series at the Riverside on Friday.
him playing better.”
Fowler, meanwhile, at 21, is the
third youngest American Ryder Cup
player ever and creates history by mak-
ing the leap from Walker Cup to Ryder
Cup in the space of just a year.
“It’s awesome to be selected and I
have to thank Corey for giving me the
opportunity,” he said.
European captain Colin
Montgomerie welcomed Woods’s par-
ticipation, adding: “I am delighted to
see Tiger Woods amongst Corey’s
selections – the Ryder Cup is a better
event with him in it.”

Ferrari to learn Champion Higgins pleads Murray conqueror Stan

fate in team
orders probe
innocence in fix hearing survives Querrey thriller
It claims Higgins agreed to fix the
US OPEN into the last eight with a 7-5, 6-2, 4-6,
▲

SNOOKER
outcome of four future frames for 6-4 victory over Spaniard Tommy
FORMULA ONE JOHN HIGGINS maintains he is “100 €300,000 (£259,000) during a meeting 2010 Robredo, who, at 41, was the lowest-
▲

FERRARI will discover today whether
they will be punished further for
using banned team orders.
The Italian team were fined
$100,000 (£65,100) after Felipe Massa
appeared to move over to let team-
mate Fernando Alonso past him on
his way to winning the German
Grand Prix.
The case was subsequently referred
to the World Motor Sports Council,
but Ferrari team principal Stefano
Domenicali is confident that no fur-
ther sanctions will be taken.
per cent” innocent of match-fixing
charges as the battle goes on to clear
his name.
The three-time world champion
spent around nine hours defending
himself at an independent two-day
tribunal in central London yesterday.
The hearing, organized by Sport
Resolutions, a London-based inde-
pendent dispute resolution service,
stemmed from a News of the World
investigation in May which accused
Higgins and his manager Pat Mooney
of agreeing to throw frames for
money.
with undercover reporters in Kiev.
Higgins swiftly denied the claims,
insisting in a statement: “Can I say
that I have never been involved in any
form of snooker match-fixing.
“In my 18 years playing profession-
al snooker I have never deliberately
missed a shot, never mind intention-
ally lost a frame or a match.”
His agent Jim Cassidy added: “John
Higgins is 100 per cent innocent of
any aspect of match-fixing.”
Higgins, who has been suspended
by World Snooker, is expected to dis-
cover his fate later today.
BY JON COUCH
ANDY MURRAY’S conqueror Stanislas
Wawrinka powered his way into his
first Grand Slam quarter-final last
night after a gruelling five-set thriller
with Sam Querrey.
Wawrinka, the Swiss 25th seed,
was pegged back twice by the
American before coming through
7-6, (11-9) 6-7 (5-7), 7-5, 4-6, 6-3 in
four hours 28 minutes at Flushing
Meadows.
He now takes on Russian 12th seed
Mikhail Youzhny, who blasted his way
ranked player in the draw.
“It’s the first time in a year that I
have already had two quarter-finals in
Grand Slams,” a delighted Youzhny
said.
“It maybe means I’m starting to
play a little bit more consistently. I
hope to continue.”
Meanwhile, it was a mixed day for
the British hopefuls in the junior
events. Laura Robson cruised into the
third round of the girls’ singles with
a 6-3, 7-6 (7-3) win over Chanelle van
Nguyen, but Oliver Golding and
George Morgan both lost in the boys’.
 26 Sport | Football CITYA.M. 8 SEPTEMBER 2010

Results
EUROPEAN CHAMPIONSHIP QUALIFYING
GROUP A
Austria...........................(0) 2 Kazakhstan ......................(0) 0
Germany........................(3) 6 Azerbaijan.........................(0) 1
Turkey.............................(0) 3 Belgium................................(1) 2
P W D L F A GD Pts
Germany 2 2 0 0 7 1 6 6
Turkey 2 2 0 0 6 2 4 6
Austria 1 1 0 0 2 0 2 3
Belgium 2 0 0 2 2 4 -2 0
Azerbaijan 1 0 0 1 1 6 -5 0
Kazakhstan 2 0 0 2 0 5 -5 0
GROUP B
FYR Macedonia.........(1) 2 Armenia...............................(1) 2
Rep of Ireland...........(2) 3 Andorra ...............................(1) 1
Kilbane 14 Martinez 45
Doyle 41
Keane 54 Att: 39,206
Russia..............................(0) 0 Slovakia...............................(1) 1
P W D L F A GD Pts
Rep of Ireland 2 2 0 0 4 1 3 6
Slovakia 2 2 0 0 2 0 2 6
Russia 2 1 0 1 2 1 1 3
Armenia 2 0 1 1 2 3 -1 1
FYR Macedonia 2 0 1 1 2 3 -1 1
Andorra 2 0 0 2 1 5 -4 0
GROUP C
Italy..................................(3) 5 Faroe Islands ..................(0) 0
Serbia .............................(0) 1 Slovenia..............................(0) 1
P W D L F A GD Pts
Italy 2 2 0 0 7 1 6 6

Rooney enjoys relief

Serbia 2 1 1 0 4 1 3 4
N Ireland 1 1 0 0 1 0 1 3
Estonia 2 1 0 1 3 3 0 3
Slovenia 2 0 1 1 1 2 -1 1
Faroe Islands 3 0 0 3 1 10 -9 0
GROUP D
Albania............................(1) 1 Luxembourg ....................(0) 0
Belarus...........................(0) 0 Romania..............................(0) 0
Bosnia-H........................(0) 0 France ..................................(0) 2
P W D L F A GD Pts

and Switzerland pay

Albania 2 1 1 0 2 1 1 4
Belarus 2 1 1 0 1 0 1 4
France 2 1 0 1 2 1 1 3
Bosnia-H 2 1 0 1 3 2 1 3
Romania 2 0 2 0 1 1 0 2
Luxembourg 2 0 0 2 0 4 -4 0
GROUP E
Holland...........................(2) 2 Finland..................................(1) 1
Hungary.........................(0) 2 Moldova..............................(0) 1
Sweden ..........................(3) 6 San Marino.......................(0) 0
P W D L F A GD Pts
Sweden 2 2 0 0 8 0 8 6
Holland 2 2 0 0 7 1 6 6
Hungary 2 1 0 1 2 3 -1 3 itors failed to make their superiority was an ankle injury that forced off lenge of the qualifying campaign.
Moldova
Finland
2 1 0 1 3
2 0 0 2 1
2
4 -3 0
1 3 SWITZERLAND 1 count until Switzerland were
reduced to 10 men by the sending
Theo Walcott early on, but Capello
played down the knock. “Theo tells
The Manchester United star put
Capello’s side in control with the
San Marino 2 0 0 2 0 11 -11 0
off of Stephen Lichtsteiner. me it’s not such a big problem. I opener, arriving late to tuck home
GROUP F
Croatia ...........................(0) 0 Greece..................................(0) 0
Georgia ..........................(0) 0 Israel ....................................(0) 0
ENGLAND 3 But substitutes Adam Johnson
and Darren Bent made the three
said: ‘Two weeks?’ He told me less,”
the Italian added.
Glen Johnson’s cut-back, after
Walcott had sent the defender gal-
Malta...............................(0) 0 Latvia.....................................(1) 2 points safe, either side of a blister- World Cup wounds may be too loping free down the right.
▲

P W D L F A GD Pts FOOTBALL ing strike by Swiss starlet Xherdan fresh for England fans to get excited Defoe, scorer of three against
Croatia 2 1 1 0 3 0 3 4 BY FRANK DALLERES
Israel 2 1 1 0 3 1 2 4 Shaqiri, to hoist Capello’s team top about the team’s prospects, but Bulgaria, missed a hat-trick of
Latvia 2 1 0 1 2 3 -1 3 of Group G. there was much to cheer last night. chances and Glen Johnson saw a
Georgia 2 0 2 0 1 1 0 2 ENGLAND manager Fabio Capello “I think he played well,” Capello Captain Steven Gerrard excelled fierce drive tipped wide before
Greece 2 0 2 0 1 1 0 2 praised Wayne Rooney after the said of Rooney. “He was always at again in the central role afforded to Lichtsteiner’s 65th-minute dismissal
Malta 2 0 0 2 1 5 -4 0
troubled striker brushed aside off- the centre of the play, the centre of him in the last three matches, cast- for a second booking.
GROUP G
Bulgaria.........................(0) 0 Montenegro......................(1) 1 field concerns to set the team on the movement. I think the pressure ing further doubt on the injured Johnson capitalised just four min-
Switzerland................(0) 1 England ................................(1) 3 their way to an encouraging victory was really strong on him, but he Frank Lampard’s place in Capello’s utes later when he latched onto
Shaqiri 71 Rooney 10 in Basel. played very well. starting XI. Gerrard’s precise through ball
A Johnson 69 Rooney, who insisted on playing “I think we played fantastic foot- Winger Adam Johnson, too, before expertly rounding Diego
Att: 39,700 Bent 88
P W D L F A GD Pts despite intense newspaper scrutiny ball in the first half. This game was enhanced his standing and capped a Benaglio.
England 2 2 0 0 7 1 6 6 of his private life in recent days, very important to win, but we fine five days by terrorising the Swiss substitute Shaqiri revived
Montenegro 2 2 0 0 2 0 2 6 took just 10 minutes to justify the played really, really well. I was really Swiss defence and adding to his goal home hopes of a comeback with a
Wales 1 0 0 1 0 1 -1 0
Switzerland 1 0 0 1 1 3 -2 0 decision by scoring the opening goal happy after the first half. The sec- in Friday’s 4-0 defeat of Bulgaria. thunderbolt effort that bewildered
Bulgaria 2 0 0 2 0 5 -5 0 – his first in England colours for a ond half we probably played too But it is Rooney who will derive goalkeeper Joe Hart, but Bent
GROUP H year. slow.” the most satisfaction from starring restored the two-goal cushion and
Denmark.......................(0) 1 Iceland.................................(0) 0 Chances came and went, notably On an overwhelmingly positive in a match that had been expected opened his international account
Norway ...........................(1) 1 Portugal..............................(0) 0 to forward Jermain Defoe, as the vis- night for England, the main worry to pose England’s toughest chal- with a clinical low finish.
P W D L F A GD Pts
Norway 2 2 0 0 3 1 2 6
Denmark 1 1 0 0 1 0 1 3
Cyprus 1 0 1 0 4 4 0 1

Capello is reaping the rewards of a

Portugal 2 0 1 1 4 5 -1 1
Iceland 2 0 0 2 1 3 -2 0
GROUP I
Czech Republic.........(0) 0 Lithuania.............................(1) 1
Scotland........................(0) 2 Liechtenstein..................(0) 1
Miller 63 Frick 46

new, adventurous selection policy

McManus 90 Att: 37,050
P W D L F A GD Pts
Scotland 2 1 1 0 2 1 1 4
Lithuania 2 1 1 0 1 0 1 4
Spain 1 1 0 0 4 0 4 3
Czech Republic 1 0 0 1 0 1 -1 0
Liechtenstein 2 0 0 2 1 6 -5 0
CRICKET
INTERNATIONAL TWENTY20 SERIES (The SWALEC
Stadium); Pakistan 89 v England 90-4. England beat edge and Capello has decided to go here’s the reason why. playing well below par.
Pakistan by 6 wickets. adventurous in this European If Jermain Defoe is seen as the main It will be interesting to see how he
GOLF Championship campaign as opposed finisher then that gives Wayne handles the next few weeks.
USPGA DEUTSCHE BANK CHAMPIONSHIP (The TPC of Boston,
to the ‘tried and tested’ method in Rooney licence to drop off and play
Norton, Massachusetts)—FFinal round (USA unless stated, par South Africa which clearly didn’t the area that both playmakers like to ENGLAND | TREVOR’S RATINGS
71): 262 Charley Hoffman 64 67 69 62. 267 Luke Donald (Eng) work. He’s being rewarded for proper drift into. With Rooney there,
65 67 66 69, Geoff Ogilvy (Aus) 64 72 65 66, Jason Day (Aus)
63 67 66 71. 268 Adam Scott (Aus) 67 69 65 67, Tom Gillis 67 71 selection if you like. Gerrard or Lampard would have to 1 Joe Hart 7
65 65, Brandt Snedeker 66 64 67 71. All of a sudden with the likes of take up a more holding role, giving 2 Glen Johnson 8
TENNIS ON THE BALL WITH Theo Walcott, Adam Johnson and a England extra stability in the middle
3 Ashley Cole 8
confident goalkeeper in Joe Hart we of the park.
US OPEN (Flushing Meadows, New York)—M Men’s Singles
Rnd 4: (12) M Youzhny (Rus) bt T Robredo (Spa) 7-5 6-2 4-6
6-4. Men’s Doubles Quarter-finals: E Schwank (Arg) & H
TREVOR STEVEN have an extra sharpness to our game In short, there’s just no room for 4 Steven Gerrard
5 Joleon Lescott
7
7
and it’s paying dividends. the three of them in the ‘hole’ and
Zeballos (Arg) bt (5) L Kubot (Pol) & O Marach (Aut) 6-3 7-6

I
N some ways, England’s fresher,
(7-3), (16) R Bopanna (Ind) & A-Ul-Haq Qureshi (Pak) bt (10)
W Moodie (Rsa) & D Norman (Bel) 7-5 7-6 (7-2). Women’s livelier performance in Basel last
Doubles Quarter-final: (6) V King (USA) & Y Shvedova (Kaz) night has left me feeling even
bt (1) G Dulko (Arg) & F Pennetta (Ita) 6-3 6-3. more short-changed by the Fabio
Capello reign.
SPORTS EDITOR JON COUCH It’s clear he has learned that inter-
email sport@cityam.com
national football is all about cutting
the best partnership for me is Gerrard 6 Phil Jalgielka 8
STABILITY protecting Rooney. 7 Theo Walcott 8 (Adam Johnson, 13, 8)
One thing he should have learned As for Rooney himself, it was nice 8 Gareth Barry 7
from last night and Friday’s 4-0 win to see him getting his head down and 9 Jermain Defoe 8 (Darren Bent 70, 8)
over Bulgaria is that the days of Frank rolling his sleeves up despite the alle- 10 Wayne Rooney 7 (S. Wright-Phillips 79, 7)
Lampard and Steven Gerrard playing gations surrounding his private life,
11 James Milner 8
alongside each other are over, and but he is still clearly distanced and
CITYA.M. 8 SEPTEMBER 2010 Sport | Football 27

EURO 2012 QUALIFYING ROUND-UP

Liechtenstein give Scotland

huge scare before late drama

▲
INTERNATIONALS
BY FRANK DALLERES
SCOTLAND came within minutes of
the most embarrassing result in
their history before scraping a 2-1
Winger Theo Walcott was forced off after just 13 minutes with an victory at home to minnows
ankle injury but scans later showed no break. Liechtenstein.
Mario Frick set up the possibility
of a huge upset when he curled the
visitors ahead just after half-time in
the Group I Euro 2012 qualifier.
Striker Kenny Miller thumped
home an equaliser off the underside
of the bar on 63 minutes as Craig
Levein’s men fought to avert a disas-
trous outcome.
Scotland still looked certain to be
held to a draw, not least because of
Liechtenstein’s persistent fouling,
until McManus headed the winner
in the seventh minute of stoppage
time. Victory sent them top of the McManus (left) scored a 97th-minute winner. Picture: ACTION IMAGES
group and was all the more gratify-
ing because Lithuania managed a
shock 1-0 win over favourites Czech
Republic. England Under-21s reach Euro play-offs
Republic of Ireland also topped
Group B after seeing off Andorra 3-1 ENGLAND and Scotland Under 21s Colchester, while a late Chris Maguire
in their first competitive match at booked their spots in the play-offs for strike earned Scotland a decisive 2-1
Adam Johnson (centre) scored his second England goal in two the revamped Lansdowne Road. next year’s European Championships win over Austria.
games, showing compsure to round Diego Benaglio. Kevin Kilbane, Kevin Doyle and with vital wins yesterday. Wales, who lost 1-0 in Italy, the
captain Robbie Keane scored to put Danny Welbeck scored twice and Republic of Ireland and Northern
Giovanni Trapattoni’s men in good Marc Albrighton got the other as Ireland all missed out, as did heavy-
spirit for next month’s visit of England beat Lithuania 3-0 at weights Germany and France.
Russia.

Houllier set to sign two-year Villa deal

currently his country’s technical off to recover from emergency heart
▲

PREMIER LEAGUE
BY FRANK DALLERES
FORMER Liverpool manager Gerard
Houllier is poised to complete an
emotional return to the Premier
League by signing a two-year con-
tract with Aston Villa.
Houllier, who left Anfield in 2004
after six years at the helm, is
thought to have agreed a deal to
Darren Bent (right) notched the third after coming off the bench, become Martin O’Neill’s permanent
the Sunderland striker firing low past Benaglio. successor. The Frenchman, who is
director, is expected to install his surgery. The 63-year-old’s last man-
former Liverpool assistant Phil agement role was at Lyon, where he
Thompson as his No2 at Villa Park. spent two seasons, winning the
Houllier won the Uefa Cup, the French league title in both years
FA Cup, two League Cups, a before leaving in 2007.
European Super Cup and a Charity
Shield during his spell on HOULLIER AT LIVERPOOL
Merseyside. He also earned an hon-
orary OBE for services to British foot- 16 July 1998 – 24 May 2004
ball, but his tenure was interrupted P W D L Win %
by a major health scare in October 325 165 81 79 50.77
2002, when he needed five months
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Spread betting can result in losses that exceed your initial deposit.

*Investment Trends report 2009.

Tax law can be changed or may differ depending on your personal circumstances.