BUSINESS WITH PERSONALITY

CHAMPION JOCKEY HOPES FSA UNDER

PRESSURE
TO LAND TOP BBC AWARD TYRIE WANTS RBS
REPORT TO BE
MCCOY EYES BIG PRIZE P25 PUBLISHED P3
Issue 1,285 Wednesday 15 December 2010 www.cityam.com FREE

FED’S DOVES WILL UK banking

bailouts to
KEEP CASH CHEAP break even

▲
BANKING
BY MARION DAKERS
THE UK is likely to break even or make
WORLD ECONOMY a profit on its bailout of the banking
▲

BY JULIAN HARRIS system, a report from the National

Audit Office claimed today.
INTEREST rates will stay “exceptional- The NAO said the country will proba-
ly low for an extended period”, the US bly suffer “no overall loss” from its
Federal Reserve announced last night. £850bn injection into Britain’s strug-
And despite claims from home and gling institutions, despite a lingering
abroad that it is fuelling a fresh bub- £512bn exposure to banks including
ble, the Fed will continue its lastest Northern Rock, Lloyds and RBS.
phase of quantitative easing (QE2), The figures are much more opti-
buying around $75bn (£47.5bn) of mistic than the Treasury’s estimate in
Treasury assets every month. 2009 that taxpayers would be on the
Markets reacted to the news with hook for between £20bn and £50bn.
30-year Treasury yields spiking to an The government said in its latest budg-
eight-month high of 4.56 per cent. et that the bailout would cost £2bn.
And the Dow Jones Industrial However, the report warns that the
Average closed at a two-year high of state’s 83 and 41 per cent stakes in RBS
11,514, after the Fed’s announcement and Lloyds respectively stand to make a
followed a day of positive news for the £12.5bn paper loss if the government
US recovery. were to sell its shares immediately.
But growth remains “at a rate that For every 10p increase in the share
has been insufficient to bring down prices, taxpayers would secure an addi-
unemployment”, the Fed argued, tional £9bn on RBS and £3bn on Lloyds.
requiring interest rates to stay at zero The sell-off is set to be six times larg-
to 0.25 per cent. Under fire chairman Ben Bernanke insists he is right to keep monetary policy at historically loose levels Picture: GETTY er than the largest European sale of
In its final statement of the year, already listed shares.
the Federal Open Market Committee yesterday before the Fed’s statement. long term inflation expectations that enhance growth with strong, confi- “Banks have made real progress as
(FOMC) repeatedly stressed its “dual And inflationary pressures are could destabilise the economy”. dence inducing steps to reduce longer the NAO update shows,” said the
mandate to foster maximum employ- being felt throughout the world, part- The continuation of QE “really sets term structural deficits.” British Bankers’ Association. “[It] sup-
ment” as well as price stability. ly from rising commodity prices. off inflation fears”, said Jim Paulsen, “Fiscal policy may even be a little ports the view that, when the govern-
Last week Bernanke raised the spec- Chinese consumer prices increased chief investment strategist at Wells irresponsible, given the worldwide ment chooses to sell its shareholding in
tre of deflation, saying the US was by 5.1 per cent last month, while the Capital Management. trend to fiscal austerity, and lack of three banks, the taxpayer will be in the
“getting close to a point where prices Bank of England is facing inflation- Last month Bernanke courted con- plans for fiscal consolidation in the black.”
start falling.” Even further easing, ary levels of 3.3 per cent and rising. troversy by commenting on President US,” he added. The report has found that the UK’s
QE3, was “certainly possible”, he said. One of the FOMC members, Obama’s fiscal stimulus package. On Over half Americans want to rein in £5bn annual interest rate payments on
But core producer prices actually Thomas M. Hoenig, voted against the top of the Fed’s measures, Bernanke the Fed, a poll revealed last week. And loans used to rescue the banks are
rose in November, by 0.3 per cent on monetary accomodation, arguing called for “a fiscal programme that 16 per cent want the Fed scrapped alto- being more than covered by fees as the
the previous month, it was revealed that it “would cause an increase in combines near term measures to gether. ECONOMICS: P12 companies pay back the money.

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 2 News
Inflation now a real problem for UK
EDITOR’S LETTER
ALLISTER HEATH
IN the long-term, we are all dead – or
so claimed John Maynard Keynes.
True, of course, but only in a meaning-
less kind of way, as yesterday’s danger-
ously high UK inflation figures
demonstrate. For ages now, the Bank
of England has been justifying its fail-
ure to meet its inflation target in the
short-term by repeatedly pointing to
the fact that its forecasts suggest all
would be well in the medium-term. At
first, most commentators were satis-
fied by this. No longer.
The trouble is that a succession of
short-terms must eventually become
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WHAT THE OTHER PAPERS SAY THIS MORNING
INVESTOR IRE OVER SIG CHIEF’S PAY
Investec Asset Management has hit
out at the board of SIG for ignoring
investor outcry about the amount its
chief executive is being paid. Investec,
which owns 3.3 per cent of the
Sheffield-based insulation and plas-
terboard maker, has written a letter
to SIG to protest against a 15 per cent
pay rise awarded to Chris Davies, its
chief executive.
THERE IS NO PLAN B, INSISTS
TREASURY
The Treasury has insisted it is not
drawing up a “Plan B” to prop up the
economy if the recovery falters in
2011, despite suggestions from
Britain’s top civil servant that stimu-
lus measures should be put on stand-
by.The proposal, in a private memo by
Sir Gus O’Donnell, the cabinet secre-
tary, was revealed in Monday’s
Financial Times. It caused irritation
the medium term (and eventually the
long-term, the point the congenitally
short-termist Keynes failed to grasp).
That time is surely now. Every month
for the past 12 months, inflation has
been above the government’s two per
cent inflation target – and every time
the message has been not to worry,
the overshoot is just due to temporary
factors and powerful disinflationary
forces mean all will be well. Yet over
the past 37 months, CPI inflation has
been below target only six times (all
between June and November 2009)
and above 31 times. It’s a poor record,
especially ahead of the Vat rise next
month which will put further
upwards pressure on prices.
Inflation on the Consumer Prices
Index (CPI) hit 3.3 per cent last month,
up from 3.2 per cent in October, the
highest level for six months. The retail
price index was up 4.7 per cent year-
on-year in November, from 4.5 per
cent in October. Great news if you
have a mortgage or credit card debt, as
its real value drops and you are effec-
Rivals eye up
Virgin Atlantic
AVIATION
▲
BY MARION DAKERS
RICHARD Branson’s Virgin Atlantic
could fall into American hands after
several rivals including US-based
Delta approached the company
about a merger or tie-in deal.
A handful of airlines have made
enquiries about an eventual partner-
ship with the carrier, according to
Sky News, and Virgin has asked
Deutsche Bank to help examine its
options.
Virgin Atlantic reportedly said
there is no formal process underway
to team up with other airlines.
Virgin and Delta did not return
calls for comment last night.
Branson mentioned earlier this
year that he was considering merg-
ing Virgin Atlantic with other carri-
ers to keep up with rivals as the
in the Treasury, which says its auster-
ity plan is working.
GOLDMAN’S ASIAN DILEMMA AS
REGION HEAD PRESSES TO STAY IN US
Goldman Sachs is seeking an execu-
tive to run its day-to-day operations in
Asia even as the bank struggles to
find a new role in its New York head-
quarters for the region’s chairman,
Michael Evans. The months-long
uncertainty over Mr Evans’ next posi-
tion underscores the sense of flux
within Goldman.
FURTHER SETBACK FOR NOKIA AS E7
IS DELAYED
Nokia has warned that another of its
new range of smartphones will be
delayed, highlighting the difficulties
facing the Finnish group as it strug-
gles to regain lost ground in the fast-
growing smartphone market. The
world’s biggest mobile maker said its
E7 device would not hit the market
until early 2011, after being due to
launch before the end of this year.
tively allowed to default on part of
your debt; terrible if you rely on a
fixed income. To maintain the pur-
chasing power of their savings, a basic
rate tax payer needs to find a savings
account paying 4.13 per cent per
annum, while a higher rate tax payer
at 40 per cent needs to find an
account paying 5.5 per cent,
Moneyfacts calculates. The figures
need to be even higher if one wants to
protect against RPI inflation or for
those on the 50p tax rate. There are
very few instant access bank accounts
that provide such protection, which
means that people are wasting their
time holding on to cash.
It is sometimes claimed that high
inflation is the only way Britain’s mas-
sive debt burden, private as well as
public, will be eroded in real terms.
Others argue it is the only way to tack-
le the UK’s high labour costs – output
per worker fell during the crisis, while
wages rose slightly. But this assumes
nobody reacts to higher prices – yet
UK gilt yields are starting to rise again
market continues to consolidate.
Singapore Airlines, which owns 49
per cent of Virgin Atlantic, has been
seeking a suitable buyer for its stake
for several years.
British Airways and Iberia cleared
their £5bn merger last month, rais-
ing hopes that other large partner-
ships could be cleared by
competition regulators in the
future.
Virgin Atlantic posted a pre-tax
operating loss for the period March
2009 to February 2010 of £132m.
IATA UPS PROFIT FORECAST: P9
Sir Richard Branson
has already considered
pairing Virgin Atlantic
with another airline in
order to compete
WORLDWIDE AIRLINES ON A
DESCENDING PATH
The merger of British Airways and
Iberia will do little to stave off falling
profits in the airline industry, ana-
lysts predicted yesterday. Combined
profits for all European airlines are
forecast to fall to $100m (£63m) next
year, from the $400m expected this
year.
SOARING REPOSSESSIONS, STAGNANT
SALES: IT’S DOOM ON THE HOME
FRONT
The housing market is likely to
remain in an extremely gloomy state
for “many years to come” as banks
continue to restrict lending and a
shaky economy deters buyers,
Britain’s biggest lending body has
warned. The number of households
falling into arrears will rise to 180,000
in 2011 according to the Council of
Mortgage Lenders.
as investors protect themselves
against the ever shrinking pound.
Higher inflation will also push up
mortgage rates and all interest rates
charged to firms and individuals. The
more people think inflation will rise,
the more they put up their prices and
wages in anticipation, and the more
inflation actually rises, triggering a
self-fulfilling loop. Once an inflation-
ary spiral kicks off, only vicious hikes
in interest rates can stop it.
Higher inflation brings with it sig-
nificant other costs. Real incomes are
falling, which means that there is less
money left to spend; inflation is a hid-
den tax. It is all good and well to try
and boost the money supply, as the
Bank has done, but the benefits of this
are eliminated with excessively high
levels of inflation. We need higher
interest rates and absolutely no more
QE – and a strong message of intent
from the Bank. Time is running out
for the authorities to show that they
truly care about keeping inflation low.
allister.heath@cityam.com
Xstrata chairman Willy Strothotte will leave his post in the coming year
Xstrata to shake up board
MINING
▲
BY JULIET SAMUEL
WILLY Strothotte, the chairman of
Glencore and FTSE 100-listed miner
Xstrata, is due to leave his post at
Xstrata in the coming year as part of
a board-room changeover.
Strothotte has been at the helm of
Xstrata since it floated in London in
2002, and several other non-execu-
tive directors have been on the board
for eight to nine years.
The company has started to look
YAHOO! TO CUT 560 JOBS
Yahoo!, the US technology giant, is set
to cut about four per cent of its work-
force as the company continues to
streamline operations in the face of
sluggish revenues. Yahoo! has strug-
gled to stanch a migration of users
and advertising dollars to Facebook.
Carol Bartz, chief executive since
January last year, is leading a job cull
which cut around 560 positions.
US JUDGE THROWS OUT FRAUD CASE
AGAINST BAUGUR’S JON ASGEIR
JOHANNESSON
A New York judge has thrown out a
legal case against London-based
Viking raider Jon Asgeir Johannesson,
which claimed he was the architect of
a $2bn (£1.2bn) fraud. The court decid-
ed the case should not be tried in the
US, as most of the key players are
Icelanders and it revolves around the
collapse of Icelandic banks.
CITYA.M. 15 DECEMBER 2010
NEWS | IN BRIEF
Wikileaks founder still in jail
Wikileaks founder Julian Assange was
granted bail by Westminsters magis-
trates yesterday but returned to
Wandsworth prison last night, after the
Swedish authorities appealed against
the decision. Sweden has 48 hours to
convince the court that Assange is likely
to flee attempts to extradite him to face
allegations of sexual offences. Lawyers
for Assange said he was being persecut-
ed and that the Swedish prosecutors
“clearly will not spare any expense to
keep Mr Assange in jail”. Meanwhile,
another tranche of diplomatic cables
was released yesterday. KING: P9
GE predicts sales rise in 2011
General Electric said it expects rising
demand for heavy equipment to drive
strong profit growth in 2011 in an
update last night, promising to beat
Wall Street expectations of a dip in
turnover. The company forecast that
sales will be up to five per cent more
than those seen in 2010, driving profit
even as margins come under pressure
from research and acquisition costs,
including its £800m purchase of
Wellstream announced this week.
for replacements for Strothotte and
several other directors, ahead of a
possible Glencore flotation next
year. Glencore, which owns a 34 per
cent stake in Xstrata, shares several
board members including Strothotte
and Glencore chief executive Ivan
Glasenberg, who is a non-executive
on the Xstrata board.
A source close to the firm told City
A.M. that the changes are “part of a
general look at whether the board
needs refreshing.”
Xstrata declined to comment.
PAULSON-LED GROUP WEIGHS
ALTERNATE LEHMAN BANKRUPTCY
PLAN
A group of investors including hedge-
fund manager Paulson & Co. are
weighing a competing reorganization
plan for Lehman Brothers Holdings
Inc. that would provide a better recov-
ery to creditors of the original
Lehman parent company while offer-
ing a smaller payout to some credi-
tors of Lehman subsidiaries,
according to a person familiar with
the investors’ thinking.
PFIZER’S NEW CEO SHUFFLES TEAM
New Pfizer Inc. CEO Ian Read shuf-
fled his executive team yesterday,
installing associates he’s worked
closely with at the pharmaceutical
giant while keeping key leaders in
their posts. The moves come just a
week after Read succeeded Jeffrey
Kindler, who retired unexpectedly.
CITYA.M. 15 DECEMBER 2010
Tyrie calls for
FSA to reveal
RBS findings
▲
POLITICS
BY DAVID CROW AND MARION DAKERS
THE FSA is expected to release a pub-
lic summary of its investigation into
stricken bank RBS, after an influen-
tial MP wrote to chairman Lord
Turner demanding a fuller account.
Andrew Tyrie, the Conservative
chairman of the Treasury select com-
mittee, said it was “crucial to learn
the lessons” from the “catalogue of
mistakes” that led to the huge taxpay-
er-funded bailout of RBS.
The FSA conducted a lengthy probe
into the rescue of the Scottish bank,
which is now 70 per cent owned by
the state after almost perishing in the
financial crisis.
The report cleared former chief
executive Fred Goodwin of any
wrongdoing, but the FSA came under
fire after it said it could not make its
findings public for confidentiality
reasons.
Goodwin has already said he has
no objection to the details being pub-
lished.
While Tyrie acknowledged that the
Financial Services and Markets Act
restricts the FSA from publishing
details relating to individuals with-
out their consent, he said the watch-
dog could still release a summary of
its findings.
He said: “The FSA have assured us
that they have conducted a thorough
investigation. We need to see it.”
Pressure also came from a cable
released by Wikileaks yesterday that
claimed current RBS chairman Sir
Philip Hampton said the bank’s direc-
tors had failed to live up to their
“fiduciary duties”, contradicting the
FSA’s announcement that exonerated
them last week.
Hampton is said to have told visit-
ing politicians that one of the biggest
mistakes made by the bank was its ill-
timed takeover of ABN Amro.
RBS and the FSA yesterday declined
to comment on whether any of the
watchdog’s findings would now be
made public.
News 3
US considers
capital rules for
banking groups
▲
BANKING
Andrew Tyrie (l)
has written to Lord
Turner (r), calling
on him to release
BANK holding companies would not
be allowed to dip below the strict cap-
ital standards of their federally
insured bank units, under a proposal
issued by US bank regulators yester-
day.
the findings of the Advocates of this approach argue
FSA’s probe into
bank holding companies relied too
RBS heavily on their insured banking
units as a source of capital strength
during the financial crisis, leading to
government bailouts.
The rule proposed by the Federal
Deposit Insurance Corp (FDIC) and
other banking regulators yesterday
would set a uniform risk-based capital
floor across the banking industry, but
will not necessarily spark any capital
raising in the short term.
US banks, pushed in part by indus-
try regulators, have already built
large reserve pools of capital in the
wake of the financial crisis.
“This should have been in place
years ago. I’m not saying it would
have stopped the crisis, but it would
have helped to hold bank holding
companies to the same standards,”
said Paul Miller, bank analyst at FBR
Capital Markets.
The FDIC is required to take the
action under the Collins amendment
in this year’s Dodd-Frank financial
overhaul law.
 4 Eurozone Debt Crisis
ECB to ask for
more cash to
buy up bonds
EUROZONE CRISIS
▲
BY JULIET SAMUEL
The European Central Bank (ECB) is to
ask for more cash to aid in its battle
against the spread of the Eurozone cri-
sis.
In its governing council meeting
today and tomorrow, the bank will dis-
cuss whether to ask for a capital hike.
With Germany, now seen as the
Eurozone’s paymaster, already indicat-
ing that it would back an increase in
the bank’s capital, it is likely to have its
request granted.
The move would be a departure
from Germany’s stance on other meas-
ures touted as possible solutions to the
Eurozone crisis.
Chanceller Angela Merkel has
blocked other extraordinary measures
such as the issuance of Eurozone-wide
Spain feels the
pain as the cost
of its debt soars
▲
EUROZONE CRISIS
SPAIN paid over 100 basis points more
to sell its treasury bills at an auction
yesterday compared to last month,
but met strong demand as investors
piled in to scoop up an attractive
yield. The Treasury sold €2.51bn
(£2.13bn) in 12- and 18-month bills, in
the middle of a €2-3bn target range.
The results had little impact on
bond markets, but yields at the ten-
der jumped dramatically from last
month’s auctions after a renewed sell-
off that has driven up borrowing
costs for Spain.
bonds, which was called for by the
Luxembourg finance minister, or an
increase in the size of the Eurozone’s
€440bn (£373bn) bailout fund.
As for what the ECB will do with the
extra cash, a German official said: “I
imagine the ECB would hope to
strengthen its basis in order to show
the markets that it was well capi-
talised, if for example, it wanted to buy
additional sovereign bonds.”
The ECB was forced to resume its
special bond-purchasing programme
last month as gilt yields spiked to
record highs and threatened to tip the
Eurozone into chaos.
It bought €2.67bn of bonds on the
secondary market last week in an
effort to keep government borrowing
costs down, but it has been reluctant
to relaunch the programme on the
same scale as earlier in the year.
S&P in warning to
Belgium on deficit
EU ECONOMY
RATINGS agency Standard & Poor’s
(S&P) warned Belgium yesterday it
faced being downgraded if it failed to
form a government within the next
six months lowering its outlook to
negative from stable.
The warning came a day after the
International Monetary Fund (IMF)
told Belgium it needed to produce a
strong deficit reduction plan soon.
The warning from S&P is likely to
fuel market speculation that Belgium
could follow Greece and Ireland in
needing an international bailout. The
Silvio Berlusconi has clung to power despite a motion of no-confidence
country has the third highest debt to
GDP ratio in the European Union and
has been without a government for
six months following elections in
June. The elections gave victory to the
separatist N-VA party but it has been
unable to create a working coalition.
The political paralysis has led
financial markets to demand a high-
er risk premium to hold Belgian debt,
with the spread on Belgian 10-year
government bonds over benchmark
German bunds widening 10 basis
points to 110 points on S&P’s warning
yesterday.
Picture: REX
Irish government to have
power to impose haircuts
▲
POLITICS
IRELAND’S government will have
extensive powers to restructure its
banking sector, including the ability
to impose losses on lenders’ subordi-
nated bondholders, under a new law
published yesterday.
Ireland agreed to radically over-
haul and shrink its banks as part of
an €85bn (£72bn) EU/IMF rescue pack-
age designed to prevent future loan
losses at its lenders tipping the econo-
my over the edge and damaging the
wider Eurozone.
“This bill will allow the minister
to take the actions required to bring
about a domestic retail banking sys-
CITYA.M. 15 DECEMBER 2010
Romans riot as
Berlusconi pulls
off narrow win
POLITICS
▲
ITALIAN Prime Minister Silvio
Berlusconi clung to front-line politics
by the skin of his teeth yesterday after
defeating a vote of no confidence by
just three votes.
Romans took to the streets in
protest as some of the most serious
rioting the city has seen in years broke
out. Dozens were injured as protestors
threw smoke bombs and firecrackers
and fought baton-wielding police in
running street battles in the historic
city centre.
The result underlined Berlusconi’s
reputation as one of the great sur-
vivors of Italian politics, but left him
unable to ensure the stability of the
government at a time of major eco-
nomic problems and a menacing
Eurozone debt crisis.
The no-confidence motion, brought
by the centre-left opposition, was
defeated by 314 votes to 311, and vote
counting in the chamber was briefly
interrupted by a scuffle between
deputies from rival camps.
The result was secured after a
fevered campaign of back room deals.
tem that is proportionate to and
focussed on the Irish economy,”
finance minister Brian Lenihan
said.
“The banking system must play its
role in providing the credit to the real
economy to support our recovery.”
The law will allow the finance min-
ister to transfer banks’ assets and lia-
bilities and “take or prevent any
actions in order to support the gov-
ernment’s banking strategy”.
The law, which applies to banks
that have received state support,
building societies and credit unions,
will enable the government to force
losses on holders of junior bank debt
on a case-by-case basis.
6 News CITYA.M. 15 DECEMBER 2010

Bookies’ favourite loses maiden race

HORSERACING clichés at the ready:
thoroughbred betting exchange
Betfair has fallen at the first hurdle;
the bookies’ favourite has failed to
win its maiden race, after the jockey
dropped his whip in the final fur-
long.
Turning to another mammal, it’s
hard to be anything but bearish on
Betfair’s first half results. Core rev-
enue might have increased by 11 per
cent over the six months, but
growth ground to a halt in the final
three. First quarter revenue was up
22 per cent, slowing to just one per
cent in the second.
Management brought ebitda in
almost on consensus at £35.5m, giv-
ing bullish analysts a reason to
remain positive. Still, it’s easy for a
gambling company like Betfair to
protect earnings when revenue falls,
because its two biggest costs – mar-
keting and R&D – are easy to cut
when times get tough.
Marketing bore the brunt of the
reductions, with spend falling by 170
basis points. Quite how management
expects to grow the top line while
cutting back in this area remains
clear, although it does enable them
to hit earnings numbers – at least in
the short term. Investec is right when
it says this approach will just push
problems into 2012.
Nor will Betfair have the betting
exchange space to itself for long,
with traditional bookies quickly
improving their own offerings. It
should be using this time to steal a
march, not falling behind.
Those who backed Betfair at £13 a
share when it floated will be sorely
disappointed; yesterday, shares
closed at 990p, some 24 per cent
below the offer price. Still, you pays
your money, you take your chances.
BOTTOMLINE Chief executive David Yu oversaw the firm’s successful IPO
Analysis by David Crow
Picture: Daniel Lewis/VisualMedia

| PROMOTION Betfair tanks

after falling
at first hurdle
quarter to date.”
▲
GAMING
Power
The BY STEVE DINNEEN Betfair chief financial officer
Stephen Morana said the group’s tar-

Hundred RACING certainty Betfair yesterday dis-

mayed punters after reporting lower
than expected half-year earnings.
get of returning to 2010’s levels in
poker next year is not likely to be met,
with core poker revenue down 6.5 per

TELL US YOUR TOP 3 CHOICES 2011 The online gambling firm had rid-
den a lucky streak since its £1.4bn
flotation earlier this year.
cent after the migration of users onto
a new platform in July.
Morana declined to give a new
FOR THE POWER HUNDRED 2011 But its pre-tax profits dipped 18.9
per cent to £7.4m after taking
timeframe but said: “Being realistic,
it’s going to take longer. We are tar-
account of one-off items including geting double digit growth for 2011

WIN ONE OF 7 PAIRS OF FLIGHTS
TO ANY CITYJET DESTINATION*
The Power Hundred 2011, published on
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Two years ago, the Power Hundred was
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the cost of its IPO, down from £9.2m
the year before.
Underlying revenue rose 12.3 per
cent to £188.5m but core revenue
grew just 1.6 per cent year-on-year.
Its active customers jumped 31 per
cent to 654,000, with strong revenue
growth, but average customer spend
dropped sharply in poker and horse
racing.
Betfair floated at £13 a share in
October and subsequently rose to over
£15. But yesterday it closed at £9.90 –
a 16 per cent fall on the day and 24
per cent below the IPO price.
Chief executive David Yu said con-
overall... but poker will be a challenge
for us.”
The results have tarnished the halo
surrounding the firm after it pressed
ahead with a float despite difficult
market conditions. It managed to
avoid the fate of online grocer Ocado,
which was forced to slash its valua-
tion to get its flotation away earlier
this year. Ocado closed yesterday at
160p after floating at 180p.
ANALYSIS l Betfair
1,500 p 990.00
14 Dec
1,400

WHO WILL TOP OUR EXCLUSIVE CLUB THIS YEAR? ditions at the firm had been tough,
admitting results in poker had fallen
short of expectations and blaming
1,300

1,200
Go to www.CityJet.com/cityam the heavy snow for slowing growth.
He said: “Recent weather condi- 1,100
tions in the UK and Ireland... caused a
to submit your entries and for full number of race meeting cancella-
tions, moderating growth rates in the
1,000
15 Nov 28 nov 29 Nov 6 Dec 13 Dec

terms and conditions.

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To celebrate this year’s list, CityJet, City A.M.’s partner for the Power
Hundred 2011, is giving away one pair of flights each day for 7 days in the run DAVID Yu joined the Betfair Group as
chief technology officer in 2001 and
up to the list. CityJet is a subsidiary of one of the largest airlines in the world has also held the position of chief
operating officer prior to his appoint-
and offers a choice of over 480 flights a week to 14 major European and UK ment as chief executive in 2006.
He guided the company through its
business centres from London City Airport. With just a 15 minute check-in successful IPO earlier this year.
Its prospectus admitted that Yu
time - the shortest of any UK airport - CityJet are the smartest choice for had been “absent from work for a
time-conscious business and leisure passengers in London. brief period in March 2010 with a car-
diological complaint,” although it
insisted he is still fit for duty.
He has taken a hard line about the
possible impact on the business of the
British Horseracing Authority (BHA)’s
horse racing levy.
He was quoted as saying last
month that Betfair is “happy to be
licensed and to pay sensible tax but if
we don’t see movement we’d have to
consider what’s right for the business
over the long term.”
He was previously vice president,
engineering for Alta Vista’s e-com-
merce and international divisions.
He has spent almost 20 years
working in technology, mainly for
internet companies. He holds an MS
computer science from Stanford
University and a BS computer science
and electrical engineering from the
University of California at Berkeley.
 8 News CITYA.M. 15 DECEMBER 2010

Goldman Sachs hits back at

accusations over Bear Stearns
Asset Management to fail when it utable to the market-wide decline in
▲

BANKING
BY ALISON LOCK
GOLDMAN Sachs has hit back at alle-
gations that its actions caused the col-
lapse of two key mortgage hedge
funds in 2007 at the onset of the
financial crisis.
In letters now published, Goldman
told the US agency investigating the
credit crunch it did not intend to
force two funds run by Bear Stearns
drastically lowered the valuation of
their sub-prime assets in early 2007.
The Financial Crisis Inquiry
Commission had suggested that
Goldman’s valuations of the securi-
ties were deliberately low and led the
funds to fail. Their collapse ultimate-
ly led to the fall of Bear Stearns.
Goldman said its markdown would
not have materially altered the funds’
valuation, which was instead “attrib-
prices of mortgage-backed securities
during this period,” its letter to the
FCIC’s Christopher Seefer said.
Goldman had loaned the funds
$453m (£286m) with only mortgage- Goldman Sachs’
backed securities as collateral, so Lloyd Blankfein
stood to lose out if they failed, it said. says the firm did
“It was against the financial inter- not intend to
est of Goldman Sachs to cause the cause the crash:
failure of the fund and it did not do Picture: GETTY
so,” the letter from 1 November said.

OFT to probe
UK’s private
health sector
has led to concerns that too much of
▲

HEALTHCARE
BY ALISON LOCK
THE UK’s lucrative £5.5bn private
healthcare market is to come under
scrutiny from market watchdog the
Office of Fair Trading (OFT), it
announced yesterday.
The regulator has opened a consul-
tation into whether the market for
private hospitals and medical proce-
dures offer customers enough choice
and value, ahead of a full investiga-
tion in early 2011.
As the NHS accounts for 25 per cent
of all revenues into the private health
industry, the government is increas-
ingly eager to get value for money
from providers.
“We are keen to establish whether
patients and buyers of private health-
care services, including the NHS, are
getting the full benefit of choice and
competition,” said OFT senior director
Sonya Branch.
The top five private healthcare
providers according to acute medical
revenues, which includes names such
as Spire Healthcare and Nuffield
Health, accounted for 71 per cent of
the UK market in 2008. OFT research
the market is too concentrated in the
hands of a few major companies,
making it harder for new players to
gain ground.
Branch told City A.M. that “our own
research suggests markets are not
working optimally,” adding that a
range of submissions from people at
different stages in the market alerted
the OFT to the fact that “something
more endemic” was wrong than any
one isolated factor.
The market study will investigate
concentration and market access
but also whether the industry impos-
es any restrictions on doctors and
how easily consumers can access,
understand and compare provider
information.
Medical insurance provider Bupa
said it would support the study.
“Competition in the private health-
care market is good for our cus-
tomers,” said Dr Natalie-Jane
Macdonald, managing director of
Bupa Health and Wellbeing.
Ageing populations, longer life
expectancy and reforms to the NHS
have all added to the role private
healthcare provision plays in the UK.

UK tax breaks Rio Tinto in $1bn

under review Alcan expansion
▲

TAX
TAX breaks that encourage house
“flipping” when selling could be
ruled out as part of a government
review. The Office of Tax
Simplification has evaluated 13 tax
reliefs in a provisional exercise to
understand how to either scrap or
simplify the UK’s 1,042 tax breaks.
Capital gains tax relief on private
homes “remains as valid today as in
1965, if not more so,” it said, though
it was “questionable” whether its
three-year time frame encouraged
flipping. Others such as R&D tax cred-
its and Gift Aid, a tax break on chari-
table donations, were endorsed.
ENERGY
RIO TINTO plans to spend more than
$1bn on two of its Canadian alu-
minum smelters, aiming to boost effi-
ciency, cut costs and deliver on
commitments made when it acquired
Canada’s Alcan.
The Anglo-Australian mining giant,
which bought giant Canadian alu-
minum maker Alcan in 2007, said yes-
terday it will spend about $760m to
complete the first phase of its AP60
plant in Quebec. The new plant will
house the most cost-effective, energy-
efficient and environmentally friend-
ly smelting technology commercially
available, the company said.
CITYA.M. 15 DECEMBER 2010 News 9

King planned bailout fund six

months before banking crisis
The cable dated 17 March 2008 could be temporary but was neces-
▲

WORLD ECONOMY
BY MATTHEW WEST
THE governor of the Bank of England
was so concerned about the global
economy that he suggested the UK,
US, Switzerland and Japan create an
international bailout fund six
months before the economic crisis
hit its peak, a confidential US diplo-
matic cable released by Wikileaks
revealed yesterday.
details discussions over lunch
between US ambassador Robert
Tuttle, US Treasury deputy secretary
Robert Kimmitt and Mervyn King, in
which the Bank governor said the
group of four countries must find a
way to keep the banks from collaps-
ing and that a coordinated effort to
recapitalise the global banking sys-
tem could become necessary. He sug-
gested the creation of the group
sary given the “almost dysfunctional”
nature of the G7 in relation to eco-
nomic issues.
It said King’s proposals were “not
casual ideas” adding King’s “principal
objective in the meeting” was to out-
line his thinking for Kimmit.
Six months later Royal Bank of
Scotland, Lloyds Bank and Halifax
Bank of Scotland had been rescued by
the government.

BP’s Bob Dudley is selling assets to pay for the spill Picture: Micha Theiner/City A.M.

BP set to sell
Pakistan unit
for $775m
▲

OIL Argentina-based Pan American

BY ROGER BAIRD
BP agreed to sell virtually all of its oil
and gas assets in Pakistan to Hong
Kong-listed United Energy Group for
$775m (£491m) as it raises cash to
pay for the Gulf of Mexico oil spill.
BP said the Pakistan sale has
brought to $21.8bn the amount that
the firm has raised in recent
months. The British oil major said it
expects the clean up costs, compen-
sation and fines from the worst oil
spill in American history to hit
$40bn.
The oil firm said it will sell assets
worth $25-$30bn by the end of 2011
to help pay for it. BP group chief
executive Bob Dudley said: “We are
continuing to identify further assets
that may be strategically more valu-
able to others than to BP as we com-
plete the programme.”
Most recently it raised $7bn
through the sale of its stake in
Energy to China’s CNOOC.
BP closed up 3.2 per cent at 473p,
with traders citing talk of potential
bid interest from Royal Dutch Shell.
Meanwhile, an Alaska judge yester-
day dismissed the state’s claim that
BP owes several hundreds of millions
of dollars in tax revenues the state
claims it lost when the Prudhoe Bay
oil field was partially shut down in
2006 because of a BP oil spill. The law-
suit sought $1bn in civil damages.
ANALYSIS l BP 473.10
p 14 Dec
460
440
420
400
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec

Airline body IATA increases its

profit forecast as market lifts
financial forecast yesterday.
▲

AVIATION
AIRLINES will post higher profits
than expected this year and next,
according to the industry association
IATA.
However, margins remain low and
the sector’s recovery is patchy, with
European airlines underperforming
those in other regions, the
International Air Transport
Association (IATA) said in its latest
IATA said the increase is due to an
upturn in the market, “exceptionally
strong third-quarter performance”
and better capacity usage. It therefore
raised its profit forecast for this year
from $8.9bn (£5.6bn) to $15.1bn and
predicted profit next year of $9.1bn,
up from an earlier forecast of $5.3bn.
The industry body represents 230
airlines covering 93 per cent of sched-
uled international traffic.
 The Capitalist
10
FIRST GIG IN
600 YEARS
TO COME TO
GUILDHALL
GUILDHALL has seen its fair share of
important cultural events over the years:
the trials of Lady Jane Grey, Thomas
Cranmer and those involved in the gun-
powder plot.
But only now is this hallowed hall to
host the first ever rock concert in its 600
year history, in the miserable month of
February next year, when Bryan Adams
will take to the stage for the City of
London’s charity appeal.
The Lord Mayor Michael Bear will be
attending this unusual iteration of the
many celebrations and rituals to have
taken place at Guildhall over the years,
with the show to be produced by Harvey
Goldsmith and Don Black.
The target is to raise £200,000, with an
auction to be conducted by Nick Nugent
selling off, among other trinkets, an old
necklace of Angelina Jolie’s. As for the
masterminds of the shindig, you can
count City lawyer Neil Murray among
them: he’s been chairing the committee
in charge of the preparations, while
Canary Wharf Group, Stephenson
Harwood, Eurohypo AG and
Westdeutsche Immobilien Bank AG are
sponsoring the party.
Bryan Adams is set to rock Guildhall
Tickets are on sale for a cool £600, with
the money raised going to Coram, the
children’s charity.
SCROOGE BRITAIN
Britain might be struggling its way
towards economic recovery, but that’s
surely no excuse for delivering a well-
wrapped IOU to your loved ones this
Christmas.
Yet according to research from
uSwitch.com, 32 per cent of Brits say
they have received just such a promise in
place of a present at Christmas. Partners
are the most likely to not get their act
together in time, with 20 per cent saying
they got an IOU from their loved one. Yet
CITYA.M. 15 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
After 600
years of
hosting such
boring events
as the trial of
Lady Jane
Grey, it’s time
for Guildhall
number on air.
to rock. “This season, Americans are facing 9.8
per cent unemployment,” Colbert
announced. “And the only chestnuts
they want to see roasting on an open fire
are the ones attached to Wall Street
Bankers.”
Picture: GETTY, REUTERS But if the unlucky banker complies,
will Colbert justify his own salary,
only 15 per cent of Brits admit to giving rumoured to be at $3.5m? Perhaps you
them, so either a few disorganised gift- have more in common with the well-paid
givers are disappointing a lot of people, suits than you think, Stephen.
or there’s a group out there not owning
up to their Christmas flops.
Still, an IOU has got to be better than a CAPITAL MEALS
lump of coal, right? Perhaps not, with Time to stop bashing British food. A sur-
commodity prices skyrocketing... vey by tourist agency VisitBritain (soon
for the fiscal chop, it seems) reveals
that tourists’ primary reason for vis-
CARD FRAUD iting London is to eat out at our
Intrepid spoof reporter Stephen fabulous restaurants. Food came
Colbert has issued a challenge to first for 82 per cent, while 70 per
an unfortunate Goldman Sachs cent came to shop and see old
partner unlucky enough to mis- buildings and monuments. With
lay his credit card: come on the tourists dropping £8.2bn in the
Colbert show to justify your bonus capital alone last year, it seems
or he’ll read out your credit card they’re not disappointed either.
CITYA.M. 15 DECEMBER 2010
Snow disturbs
sales jump at
Travis Perkins
▲
PROPERTY
BY MARION DAKERS
BUILDERS merchant Travis Perkins
said yesterday that turnover for the
year had risen 6.5 per cent, though
the wintry weather has hit recent
sales, as it completed its £558m
takeover of BSS Group.
The firm saw a jump in sales in
the last two months to 30 November,
although it said the snow and freez-
ing conditions will have “some
impact on our sales trends and
financial performance” during
December.
Its Wickes DIY chain saw turnover
for the year to 27 November rise 2.7
per cent, with like-for-like turnover
per trading day up 0.6 per cent.
Sales accelerated by 4.2 per cent in
the last eight weeks. Travis Perkins
said this was due to shoppers splash-
ing out ahead of the VAT rise in
January, although the pre-Christmas
jump has been less marked than in
2009, when sales in the nine weeks
to December rose 10.2 per cent.
Turnover in the firm’s merchanti-
ng business rose 7.6 per cent in the
first 11 months of the year, with like-
for-like turnover rising 7.2 per cent.
Travis Perkins also completed its
acquisition of BSS Group yesterday,
creating the country’s biggest
plumbing and heating trade and
retail distribution.
Travis Perkins announced the deal
in July, although it was forced by the
Office of Fair Trading to sell off 20
plumbing branches before it could
take over its rival.
Its shares closed 2.62 per cent up
at 997.5p yesterday.
ANALYSIS l Travis Perkins
p lenging economic conditions in the
1,000 997.50
14 Dec
900
800
20 Sep 8 Oct 28 Oct 17 Nov
News 11
Go-Ahead sees
FSA BANS TWO BROKERS
profit growth
in train travel
TRANSPORT
▲
TRANSPORT group Go-Ahead said yes-
terday that it expects first-half operat-
ing profit to nudge ahead of its
expectations, driven by its rail unit,
but will not move its full-year targets
given the economic uncertainty.
The company, which operates com-
muter rail franchises including
Southeastern and London Midland,
said yesterday its bus division is
expected to remain robust, with sec-
ond-half revenue in its unregulated
businesses returning to last year’s lev-
els.
However, revenue in its regulated
London bus services is likely to be
around seven per cent below last year
due to lower contract prices.
Turnover in its rail unit Southern is
expected to be around six per cent
higher than last year due to a four per
cent growth in passenger journeys.
“We continue to anticipate chal-
near term and therefore believe it is
prudent to maintain our full-year
expectations as previously reported,”
it said in a statement.
Go-Ahead also said that it contin-
THE Financial Services Authority’s (FSA) head of enforcement Margaret Cole yesterday ues to look for bolt-on acquisitions in
fined and banned two stockbrokers for using inside information to allow their clients to the UK and will continue its cautious
buy shares in listed health food company Provexis before it announced a deal with a major expansion in North America.
unnamed food firm. The FSA fined William James Coppin and Perry John Bliss £70,000 Shares closed up 5.5 per cent at
7 Dec and £30,000 respectively for their role in the 2007 deal. Picture: Micha Theiner/ CITY A.M £12.80 yesterday.
 12 Economics
Eurozone industry rebounds
▲
EUROZONE ECONOMY
BY JULIAN HARRIS
EUROZONE industrial production
rebounded in October, driven
upwards by a resurgent Germany,
official data revealed yesterday.
After a decline the previous
month, production sprung back with
a 0.7 per cent increase across the sin-
gle currency area.
Compared to the same time in
2009, industry expanded by 6.9 per
cent, according to the Eurostat office.
Yet growth was lower than expect-
ed by economists. And the Eurozone
remains reliant on strong core
Inflation hits
highest level
in six months
▲
UK ECONOMY
BY JULIAN HARRIS
ABOVE target inflation rose further
in November, jumping higher than
economists expected, official data
showed yesterday.
The news cast further doubt over
the Bank of England’s loose policy
and monetary stimulus.
“Another round of quantitative eas-
ing was always a long shot and this
will reduce the odds still further,”
said economist Andrew Goodwin of
the Ernst and Young Item Club.
Consumer prices were up 3.3 per
cent compared to the same time last
year, above October’s rate of 3.2 per
cent – and considerably above the
government’s two per cent target and
the EU average of 2.3 per cent.
And the retail price index (RPI),
which includes mortgage payments,
increased by 4.7 per cent, a jump
from October when it stood at 4.5 per
cent.
The Bank is watching the “uncom-
fortably” high levels of inflation “like
hawks,” deputy governor Charles
Bean said on Monday.
Yet Bean and his colleagues show
little sign of increasing interest rates,
blaming “temporary” inflationary
Boost for US retailers as strong holiday Report: For-profit schools
sales offer hope for American recovery improve chances for poor
▲
US ECONOMY
BY JULIAN HARRIS
THE Fed’s second phase of quantita-
tive easing (QE2) came under attack
yesterday, after jumps in retail sales,
business morale and inflation.
Retail sales for November increased
by 0.8 per cent, and figures for the
previous month were revised
upwards to show a 1.7 per cent rise.
“Today’s figures suggest that QE2,
announced on 3 November, is totally
superfluous, as well as being largely
economies, as the troubled periphery
stalls recovery.
“The German industrial sector very
much led the way for the Eurozone,
markedly out performing most other
countries,” said Howard Archer of IHS
Global Insight.
Industrial production contracted
in Greece (-4.6 per cent), Portugal (-2.8
per cent) and Spain (-1.9 per cent)
from the previous year.
Meanwhile, Ireland’s production fell
by 4.8 per cent compared to September,
as the crisis grew in the run up to last
month’s €85bn (£72bn) bailout.
Germany recorded a 12.1 per cent
increase on the previous year, and
pressures such as high commodity
prices, the depreciation of sterling
and increases in VAT.
“Measures of inflation supposedly
stripping out tax effects remain very
low at around 1.5 per cent,” said
Jonathan Loynes of Capital
Economics.
And low borrowing costs and rising
productivity are actually causing falls
in business prices, financial consult-
ants Fathom reported yesterday.
However, core inflation, which
excludes rising food and energy
prices, remains stubbornly high at 2.7
per cent – “way higher than the
equivalent measures in the US and
Eurozone,” said Loynes.
Core prices are “simply not
responding to the apparent spare
capacity” that the Bank had assumed,
he added.
Constantly high inflation could
cause people to demand higher wages
and places further pressure on prices,
according to economists.
The risk from inflation expecta-
tions “has probably increased,” admit-
ted Bean, who also sits on the
Monetary Policy Committee (MPC).
Andrew Sentance is believed to be
the only member of the MPC to have
voted for an increase in rates.
ineffective -- except for pushing up
stock prices,” said Rob Carnell, chief
economist at ING.
“Underlying sales growth [exclud-
ing petrol price hikes] has been tick-
ing along at this decent rate for four
months,” said Capital Economics.
And the National Federation of
Independent Business (NFIB)
announced a rise in optimism to its
highest level for three years.
Despite the rise, business optimism
is still at recession levels, Bill
Dunkelberg of NFIB warned.
was boosted by another rise in busi-
ness morale, as the ZEW Indicator of
Economic Sentiment climbed 2.5
points on November.
The survey measures the expecta-
tions of investors, with more antici-
pating an improvement in business
conditions (than those expecting a
deterioration) over the next six
months.
In neighbouring France, new infla-
tion figures showed consumer prices
rising by 0.1 per cent in November.
Year-on-year consumer price index
(CPI) inflation stands at 1.6 per cent.
Eurozone inflation figures are
expected tomorrow.
High inflation is worrying Mervyn King’s Bank of England
ANALYSIS l Inflation
% Organization ruling that the US was
6 entitled to impose extra safeguard
5
4 Ministry of Commerce said in a state-
3 ment on its website that it was “deeply
2 Target CPI rate
1 condemned the US safeguard measures.
0 toward Chinese tyres are trade protec-
-1
-2
-3
Nov
2009
Core producer prices (excluding oil
and food) jumped 0.3 per cent in
November, against the previous
month.
“Whilst not inflationary, the high
figures suggest that the Fed’s con-
cerns over deflation are substantially
overdone,” said Carnell.
Last week Fed chairman Ben
Bernanke hinted at a third period of
easing (QE3), citing concerns over
growth and unemployment. “That
really does not look credible right
now,” commented Carnell.
Productivity gap is due to
regulation, research says
▲
EU ECONOMY
RED tape that deters new businesses
is responsible for low levels of
European productivity, according to
research released today.
The costs of setting up a business
result in uncompetitive markets,
higher prices and less innovation, said
Dr Markus Poschke, an economist
from McGill University in Quebec.
Even small start up costs of around
£5,000 have knock on effects “leading
to large losses in terms of productivi-
Picture: REX
Consumer Price Index
Retail Price Index
May Nov
2010
▲
EDUCATION
EDUCATION reforms by the coalition
government must allow profit mak-
ing schools, an influential thinktank
said today.
Reforms in Sweden -- which the
UK’s plans are loosely based upon --
only worked due to the contribution
of for-profit schools, according to the
Institute of Economic Affairs (IEA).
“This is especially the case in pro-
viding access to good schools for
those from low socioeconomic back-
CITYA.M. 15 DECEMBER 2010
ty and output,” the report said.
Some European countries have
“miniscule” start up costs along the
same levels as the US, Canada and
New Zealand. While rates are low in
Denmark, Norway and the UK, coun-
tries like Germany, France and Italy
have significantly higher barriers to
entry, Poschke said.
The research, published in the
Economic Journal, found that up to
one third of the productivity gap
between Germany and the US could
be due to entry costs.
ASIA | IN BRIEF
Deflation unavoidable for Japan
Japan’s deflation is due to proximity to
low cost Asian economies, the govern-
ment’s chief cabinet secretary said yes-
terday. Yoshito Sengoku said that
aggressive monetary and fiscal easing
can fail to tackle falling prices, and risk
“leaving a burden for the next genera-
tion.” However, the Bank of Japan is
pursuing its asset buying scheme. The
Bank announced that it would purchase
exchange-traded funds (ETF) and
Japanese real estate investment trusts
(J-REIT) starting from today.
Markets keep eye on China rates
Uncertainty over China’s monetary
stance is affecting Asian markets, after
Monday’s sharp gains turned sluggish
yesterday. China avoided a rise in inter-
est rates last week, opting only to nudge
up the reserve requirement ratio (RRR).
“The market’s sharp gains on Monday
were driven by pent up demand follow-
ing milder than expected policy tighten-
ing,” said Zhuo Xiangyu of China
Securities Information. But “many peo-
ple” fear that monetary tightening will
come before the year end, he said.
China to appeal WTO tyre ruling
China plans to appeal a World Trade
duties on Chinese tyres, the Ministry of
Commerce said yesterday. China’s
concerned” about negative conse-
quences from the Monday ruling and
"The US safeguard measures adopted
tionism intended to shift domestic politi-
cal pressure. They are not in line with
WTO rules and have been widely criti-
cised,” it said. President Barack Obama
imposed the 35 pe rcent duties on
Chinese tyres in September 2009.
grounds,” said the IEA’s Mark
Littlewood.
A statistical analysis of the Swedish
system found that the profit incen-
tive boosted the number of new
schools, driving up standards.
In Sweden 13 per cent of schools
make a profit. Yet the UK government
has received only 62 applications for
independent new “free schools.”
“It is hardly surprising that we have
seen such a low uptake when the
profit motive has been excluded,”
said Littlewood.
CITYA.M. 15 DECEMBER 2010
GOOGLE DOMINANCE UNDER SPOTLIGHT
FRANCE’S antitrust regulator yesterday put Google on notice not to abuse what it said
was its dominant position in online search advertising. Amid growing regulatory scruti-
ny of Google in Europe, the watchdog said Google’s market power was not necessarily
bad or illegal but needed careful monitoring to avoid anti-competitive impact. Picture:
iSoft sells iBS
arm to Capita
▲
TECHNOLOGY
BY STEVE DINNEEN
DEBT-LADEN healthcare IT firm iSoft
yesterday offloaded its financial man-
agement solutions arm to outsourc-
ing group Capita.
It sold iSoft Business Solutions (iBS)
to Capita for £23.2m after it was ear-
marked as “non-core”. Last year the
division generated revenue of £17.7m,
and £5.8m in earnings.
The firm behind the £6.2bn
upgrade of the NHS computer sys-
tems – one of the world’s largest IT
projects – was rocked by a series of
scandals involving making mislead-
ing statements to the market
between 2003 and 2005, ending with
its former accountant Ian Storey
being banned for eight years.
Problems with the NHS IT pro-
gramme have also hit the firm, send-
ing its share price tumbling a
staggering 90 per cent this year alone.
Siemens sells IT unit Solutions
to Atos Origin in €850m deal
▲
TECHNOLOGY
FRANCE’S Atos Origin will acquire
Siemens’ IT unit Solutions and
Services (SIS) in an €850m (£721.1m)
deal, the German conglomerate said
late yesterday.
“We are creating a European
Champion,” Siemens chief executive
officer Peter Loescher said.
The deal is expected to have a “con-
siderable negative earnings impact”
in Siemens’ fiscal 2011, it said in a
statement. The deal is structured in
order to be short-term accretive on
News 13
Imagination Technologies to
snap up 3D company Caustic
embedded products. nologies in all markets and to contin-
▲
TECHNOLOGY
BY STEVE DINNEEN “The acquisition will enable us to ue our mission of delivering the most
accelerate our plans to be the leading advanced graphics technologies to
IMAGINATION Technologies, the supplier of all forms of graphics tech- mainstream markets.”
British firm behind video chips in Caustic chief executive Chip
Apple’s iPhone, will acquire 3D Imagination chief Stearns said: “Our vision is to enable
graphics group Caustic for £17m. cinema quality computer graphics at
Imagination chief executive executive Hossein new cost and power consumption
Hossein Yassaie said: “We have a Yassaie says that design points. We will utilise their
proven track record of disrupting Caustic will help grow extensive resources and partnerships
markets by bringing new and high- its 3D operations. to bring our technology to every con-
end technologies to consumer and sumer screen.”
HAVE A BALL THIS
CHRISTMAS!
The firm, which was bought by
Australia’s IBA Health in 2007, is des-
perate to repair its dented reputa-
tion and claw itself back into the
black. Its debt pile stands at around
£150m, although some of the pro-
ceeds of the sale will go towards pay-
ing this down.
Storey accepted he had provided
“false and misleading” information
to iSoft’s former auditors in relation
to an iSoft contract.
Chief executive Andrea Fiumicelli
said: “While iBS is a profitable busi-
ness, its key products, Oracle’s e-busi-
ness suite and Integra financial
accounting solutions, have little over-
lap with iSoft’s proprietary core
patient-focused healthcare IT busi-
ness. Given this, and our strong desire
to reduce debt, the divestment was
deemed appropriate and in line with
our strategy of focusing on core
patient-specific healthcare products
going forward.”
CHRISTMAS PERFORMANCE SCHEDULE
Monday 20 Dec
Tuesday 21 Dec
3.00 PM & 7.30 PM
3.00 PM & 7.30 PM
Monday 27 Dec
Tuesday 28 Dec
7.30 PM
3.00 PM & 7.30 PM
Wednesday 22 Dec 7.30 PM Wednesday 29 Dec 7.30 PM
Thursday 23 Dec 3.00 PM & 7.30 PM Thursday 30 Dec 3.00 PM & 7.30 PM
the earnings per share for Atos
Origin, it added. Friday 24 Dec 3.00 PM Friday 31 Dec 3.00 PM
The deal caps efforts by Europe’s No Shows Saturday 1 Jan
biggest engineering company to spin
Saturday 25 Dec 3.00 PM & 7.30 PM
off its money-losing IT unit and paves
the way for Atos Origin to reach a
global scale.
Following this deal, Atos Origin
will become a major league player in
0844 482 5115 • mamma-mia.com
cloud computing, which Siemens
said will be a major growth driver in
PRINCE OF WALES THEATRE
future. The combined group will have © LITTLESTAR
pro forma revenues of around €8.7bn,
making it the largest in Europe.
 14 News CITYA.M. 15 DECEMBER 2010

BT sells 5.5pc stake

Beazley chief execu-
tive Andrew
Horton said the
firm would look for
other growth

in Tech Mahindra
strategies after
withdrawing its
offer for rival
Hardy
Underwriters

Tech Mahindra, which provides

▲

TELECOMS
BT yesterday completed the sale of a
5.5 per cent stake in Tech Mahindra
in a move that could pave the way for
further share sales in the Indian tele-
coms firm.
The sale takes BT’s stake in the firm
down to 24.4 per cent, with the UK
telecoms giant saying “further sales
may be considered in the future”. The
6.9m shares netted BT a total of £63m.
information technology services to
the telecoms industry, is a unit of
tractor and utility vehicle maker
Mahindra & Mahindra (M&M). BT
Group owns about a 30-per cent stake
in Tech Mahindra.
BT and M&M established the joint
venture that became Tech Mahindra
in 1986. It has grown to over £630m of
annual revenues after listing on the
Bombay Stock Exchange in 2006.

Beazley drops
What women £180m bid for
find attractive its rival Hardy
in stockings. ▲
INSURANCE
BY MATTHEW WEST
LLOYDS of London insurer Beazley
withdrew its £180m offer for rival
Lloyds firm Hardy Underwriters yes-
terday after failing to win an agreed
deal and said it might now return
cash to investors.
In a brief statement issued yester-
Personalised Seven day, Beazley said it had submitted a
Ring Initial Bangle £97 final offer of up to 350p per share for
Hardy but the firm said it would only
consider an offer substantially above
this level.
The withdrawal of the offer was
not unexpected. Beazley had initially
offered 300p per share for Hardy in
October but this was rejected by the
underwriter as opportunistic and
designed to exploit a low point in the
insurance cycle. Beazley then said on
15 November it might pull the bid
after its revised offer, increased to
330p per share from an initial 300p,
was once again rejected by Hardy.
Beazley said it would now look at
other growth strategies. Hardy shares
fell 4.6 per cent to 269p. Beazley
shares edged up 1.3 per cent to 115.3p
on the announcement.
“We will continue to look at ways
to grow in the United States, at
Lloyd’s of London and in Europe,”
said chief executive Andrew Horton
Horton said Beazley could continue
to look for acquisitions but added: “If
we end up with surplus capital, I am
sure we will look at ways of handing
back cash to shareholders.”
Lloyd’s of London insurers have
been at the centre of takeover specu-
lation as a difficult trading environ-
ment has weighed on their share
prices, opening up potentially attrac-
tive acquisition opportunities. In
October, a four-month takeover battle
led to Brit Insurance agreeing to be
taken over by buyout firms Apollo
Management and CVC Capital
Partners.
ANALYSIS l Beazley
p
120 114.70
118 14 Dec
116
114
112
110
108
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec

NEWS | IN BRIEF
Best Buy reports profit drop
Best Buy shares tumbled 14 per cent
yesterday, their biggest decline in more
than eight years, as the biggest US elec-
tronic retailer reported an unexpected
third-quarter dip in profit. The company
also cut its outlook after decreased
demand for televisions, notebook com-
puters and videogames took its toll on
sales. Net income in the fiscal third quar-
ter, which ended 27 November, fell four
per cent to $217m (£137.4m), or 54
cents per share, from $227m, or 53 cents
per share, last year. Analysts had expect-
ed 61 cents per share. Revenue fell one
Christmas shopping made easy. Shop now at per cent to $11.89bn, from $12.02bn last
year. Analysts expected revenue of
quarter operating profit will be "clearly neg-
ative" rather than close to breaking even.
The forecast had the knock on effect of
reducing shares in ThyssenKrupp, Germany’s
largest steelmaker.
British Airways lifts fuel charge
British Airways yesterday announced it
will raise its fuel surcharge on longhaul
flights following a recent surge in oil
prices. “BA will increase its fuel sur-
charge on longhaul services from
Thursday, 16 December,” the group said
in a statement. “The move reflects the
substantial recent increase in the price of
oil.” There will be no increase on short-
haul flights. BA, which is merging with

www.notonthehighstreet.com $12.45bn.

Stainless-steel firms’ shares sink

Shares in Finnish stainless-steel maker
Outokumpu declined 5.9 per cent to €13.04
(£11) yesterday after it forecast that fourth-
Spanish peer Iberia to save costs, added
that it would increase the surcharge by
£10 for a single longhaul ticket, and £20
for a return journey. Crude oil futures last
week struck two-year highs above $92 a
barrel.
CITYA.M. 15 DECEMBER 2010 News 15

Homeowners relaxed about negative equity

equity with nearly one in ten record-
ing a no equity or negative equity
score.
This data is in line with figures
released Monday by the Bank of
England which put the scale of nega-
tive equity at between four and five
per cent of all UK mortgage holders:
BRANDINDEX translating into approximately half a
STEPHAN SHAKESPEARE million UK households currently
operating at levels of debt outweigh-
ing the value of existing assets.
When coupled with Bank of
England figures that suggest one in
five mortgage holders have debts
exceeding 75 per cent of the value of
their properties, it makes for a bleak
forecast for lenders.
The average level of negative equity
among those in negative equity is
£52,338. On this basis, these adults
will not come out of negative equity
until house prices rise by 37 per cent.
Meanwhile, it would appear that
amongst mortgage holders below the about negative equity those in nega-
age of 35 while a no equity status is a tive equity or with no equity appear
rarity over the age of 55. pretty sanguine, the majority neither
Despite this, mortgage holders overly worried nor blissfully dismis-
would appear to be taking it all in sive of the consequences.
their stride. Stephan Shakespeare is chief executive of
When asked to rate their concerns YouGov
ANALYSIS l Penetration of mortgage holders on negative equity, by age
100%
8%
3%
1%
99%
90% 24% 24% 97%

I
N the latest YouGov SixthSense In addition to those in negative negative equity is most severe for peo- 92%
80% Positive Equity
Mortgages Report, mortgage hold- equity, the YouGov report puts eight ple who bought a property between
ers were asked to estimate the cur- per cent of mortgage holders in the 2000 and 2008, especially those buy- 70% Negative Equity/
75% 75% No Equity
rent value of their household and “no equity” bracket – the point at ing at the peak of the market in 2005
cost of their mortgage. which asset value just meets debt – to 2007. 60%
Ninety-one per cent who were able translating into 1.5m households tee- The graph shows that the negative
to give these figures were in positive tering on the brink of negative equity. equity is disproportionally present 18-34 25-34 35-44 45-54 55+

App sales to hit $35bn

Worldwide app sales

App downloads App revenue personal and business lives will be At present analysts estimate
▲

TECHNOLOGY
2010: 2010: BY STEVE DINNEEN one of the hallmarks of the new Apple’s app store contributes just one
decade with enormous opportuni- per cent of its gross profit – roughly
10.9bn $5bn Text Calendar Photos Camera
APP sales are set to rocket to $35bn
(£22.2bn) a year by 2014, according to
ties for virtually every business sec-
tor.”
$198m. However, the rapid growth
combined with the firm’s new iAds
new research by IDC. The roaring growth is great news platform, which allows it to charge
A staggering 10.9bn apps for for app marketplaces including for adverts contained within adverts,
devices including smartphones and Apple’s app store, which keeps 30 per is set to drive this far higher.
YouTube Stocks Maps Weather tablets such as Apple’s iPad will be cent of the sale price of every down- Apple has also shown its belief that
downloaded this year alone, with the load. Google and Microsoft both apps will drive future sales by allow-
10
9
11 12 1
2
3
number rising to 76.9bn annually in charge a lower commission for access ing them to be installed for the first
8
7 6 5
4 2014 – a growth rate of around 60 per to their app platforms. time on its new generation of laptops
Clock Calculatior Notes Settings
cent a year. as well as its hand held devices.
Scott Ellison, vice president of No of apps Angry Birds is among the most suc-

10.9bn
Estimated Estimated Mobile and Wireless research at IDC cessful app, with 7m downloads in
said: “Mobile app developers will downloaded the 12 months since its release, with
app downloads app revenue
‘appify’ just about every interaction worldwide $4.9m of that going to developer
2014: 2014:
you can think of in your physical and within the Rovio. Doodle Jump, another simple
76.9bn $35bn O
N

L
digital worlds. The extension of
mobile apps to every aspect of our
last year but addictive game, has similar sales
figures.
S

CITY VIEWS: WOULD YOU BE WILLING TO PAY FOR

SMARTPHONE APPS? Interviews by Chris Barker

ALAN NELSON | THREADNEEDLE

“At the moment, I have a Blackberry provided by
my company, which doesn’t have any apps on it.
All I have on it at the moment is a few games. I’m
going to wait until my contract is reviewed in
January and then see if I get an iPad.”

NICK BOOT | VIELIFE HEALTHCARE

“Yes, I have bought applications before. I’ve got a
lot, a whole range, and they are mainly ones that
help me to do my job better. I’ve got ones like Sales
Force and a programme that allows me to do con-
versions quickly.”

NIGEL HOLLAND | ARTHUR J GALLAGHERS

“I have bought some apps in the past, so I suppose
so, yes. It’s just like everything else really: if you
want something a lot, you’ll pay for. And if you
don’t, then you won’t.”
 16 News CITYA.M. 15 DECEMBER 2010

Japanese tax received coolly Nissan and Mitsubishi

Korean competitors unless the gov- a bright outlook for the future, and
expand ties to cut costs
▲

JAPANESE ECONOMY
ernment provides tax breaks for for that a reduction in the corporate
BY HARRY BANKS research and capital investment, tax rate is not enough. The yen is still
JAPAN’S plan to boost its ailing econo- helps combat the strong yen and very strong, and for companies like will provide a light van to Mitsubishi

my by cutting corporate taxes got a
guarded welcome from business yes-
terday, but is unlikely to help restore
the fortunes of unpopular Prime
Minister Naoto Kan.
Kan gave orders on Monday for a
five percentage point cut in the tax
rate from the year starting next April,
despite the country’s ballooning
debt, saying it would enable business-
es to increase domestic investment,
boost jobs and raise salaries.
But executives, especially in the car
and electronics industries, say their
firms will still lose out to South
makes progress on free trade deals.
Political analysts said the tax cut
would neither induce businesses to
back Kan’s ruling Democratic Party of
Japan, nor help raise voter support,
which hit a fresh low of 21 per cent in
a media poll published yesterday.
“Corporate taxes in Japan are high
compared with countries around the
world, so a reduction of the tax rate is
a good thing,” Mitsubishi Motors pres-
ident Osamu Masuko said yesterday.
He added: “But in order to boost
jobs and capital outlays on facilities,
management needs to be able to have
ours that rely heavily on exports, it’s a
tough situation.”
Cutting the tax rate to 35 per cent
from 40 per cent would still leave it
higher than the 28 per cent corporate
tax rate in Britain, 29.4 per cent in
Germany and 24.2 per cent in South
Korea, which is gaining overseas mar-
ket share in cars and electronics at
Japan’s expense.
Many Japanese companies are
more inclined to invest abroad as
they try to reduce reliance on the
stagnating home market, doing little
to reduce the 5.1 per cent jobless rate.
▲
AUTOMOTIVE
NISSAN and Mitsubishi Motors said
yesterday that they would deepen
their operational ties to make better
use of their resources as a strong yen
makes competing tougher for
Japanese automakers.
Nissan and Mitsubishi, Japan’s
third and sixth largest carmakers
respectively in 2009, have been work-
ing together since 2003, mainly
involving Mitsubishi Motors building
660cc minivehicles under Nissan’s
badge in Japan.
Under the new agreement, Nissan
Motors for the Japanese market,
while Mitsubishi will supply an SUV
to Nissan for sale in the Middle East,
they said.
Discussions are also underway for
the production of Nissan’s Navara
pickup truck at Mitsubishi’s Thai fac-
tory, and for the establishment of a
50-50 joint venture to develop and
produce 660cc minivehicles for Japan.
Nissan said it was also considering
providing Mitsubishi Motors with
higher-end models in Japan.
Carmakers around the world are
seeking partnerships to cut costs.

Bunzl says US BEST OF THE BROKERS

ANALYSIS l Barclays
p
272.00
ANALYSIS l Punch Taverns
95 p
ANALYSIS l Capita Group
800 p
680.00

growth helps
320 14 Dec 68.75 14 Dec
85 14 Dec 750

300
75 700

280

to boost sales
65 650
260

20 sep 8 Oct 28 Oct 17 Nov 7 Dec 20 sep 8 Oct 28 Oct 17 Nov 7 Dec 20 sep 8 Oct 28 Oct 17 Nov 7 Dec

BARCLAYS BANK PUNCH TAVERNS CAPITA GROUP

Deutsche Bank rates the bank “buy” with a Numis rates the pub chain “buy” with a tar- Evolution Securities rates the outsourcing
target price of 372p. The researchers see get price of 100p. The broker expects the group “sell” with a fair value price of 660p.
▲

MANUFACTURING
BY HARRY BANKS
BUNZL, the distribution and out-
sourcing company, predicted full-year
revenue growth would meet expecta-
tions as strength at its US business
and acquisitions offset sales falls in
Britain and Ireland.
FTSE 100-listed Bunzl, which sup-
plies products such as carrier bags,
take-away boxes and healthcare prod-
well,” Bunzl said in a statement.
Bunzl, which started life as a haber-
dashery in Bratislava in 1854, added
“the environment for further acquisi-
tions was promising and discussions
are ongoing with a number of inter-
ested parties.”
The firm, led by chief executive
Michael Roney, said that while in
North America underlying revenue
was strong, in Britain and Ireland rev-
potential for a restructuring programme
under new management, or at least a strip-
ping out of undervalued capital. However,
the broker has cut its target price from
395p and earnings per share estimates by
four to six per cent for the next two years.
firm’s interim results due on Friday to con- The broker thinks Capita can benefit from
centrate on operational performance, with the government’s new localism bill, which
like-for-like sales set to rise by two per raises the prospects for increased out-
cent, slightly lower than last year because sourcing. It adds that Capita’s acquisition
of the weather. Numis also predicts dispos- of iSoft this week will add around one per
al rates for failing pubs to have halved. cent to operating profit this year.
To appear in Best of the Brokers email your research to notes@cityam.com

Drax expects to beat market forecasts

ucts related to the H1N1 flu virus, enue was lower than last year because
said in a trading statement it expect- of tough economic conditions in
ed full-year revenue to grow, support- Ireland as well as a decline in demand
ed by its acquisition strategy. for safety equipment from construc-
The company’s sales over the full- tion firms.
year are expected to grow by an aver-
age of 3.8 per cent to £4.8bn, ANALYSIS l Bunzl North Yorkshire. at £376m.
▲

according to market consensus.
For the first half ended 30 June, the
company posted a six per cent rise in
pre-tax profit to £100m, as revenue
rose two per cent to £2.34bn.
“Acquisitions continue to be a key
component of the group’s growth
strategy. The nine acquisitions which
have been announced to date in 2010
have annualised revenue of approxi-
mately £150m and are integrating
UTILITIES
p The group, which is led by chief The group will announce its full
770 711.50 DRAX, the operator of Britain’s executive Dorothy Thompson, added results on 22 February.
14 Dec largest coal-fired power station, said that it had maintained a high load Drax has plans to build three bio-
750 yesterday it expects its earnings for factor and improved profitability. mass-fired power plants at a cost of
the full-year to be slightly ahead of It anticipates that earnings before £2bn, but investment has been
730 current market consensus. interest, tax, depreciation, amortisa- delayed because it wants the govern-
“While the commodity markets in tion and underlying earnings per ment to offer better incentives.
710 which we operate remain challeng- share for 2010 will beat the market The government is expected to pro-
ing, as previously described, we bene- consensus. pose what subsidies it will offer for
fit from a strong contracted position,” The market consensus for full-year low-carbon projects in an electricity
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec said the business based in Selby, Ebitda for the group currently stands reform paper due this week.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

IG Group
IG Group has appointed Christopher Hill as its
new chief financial officer from April next year.
In his new role he will also be a member of the
group’s board, helping to make strategic deci-
sions about the company. To take the job, he
will be moving over from his role as CFO of
Travelex, where he has worked since 2007.
Formerly, he has also worked at VWR
International, a US-based lab supply company
and General Electric.
Ernst & Young India & Africa financial services adviso-
Ernst & Young has appointed five new ry practice: Nasir Ahmad, Richard
partners in its Europe, Middle East, Brown, Maren Hausmann, Andreas
Lannes and Knut Schafer.
Motive Television
Paul Cuatrecasas has joined the digital
TV company as a non-executive direc-
tor, starting immediately. He will draw
on his mergers and acquisitions experi-
ence in order to offer advice to the
company. He is also the founder and
chief executive of Aquaa Partners and
founded Alegro Capital in 2003.
Previoulsy, he has worked at ARC
Associates and during his career has
worked on over 35 M&A transactions.
Coutts & Co
Coutts has added James Hosking to its
private banking team. He will be report-
ing to Peter Blatchford, a client partner,
and will be responsible for giving sup-
port and advice to the bank’s private
clients in Devon.
He has previously worked at the
Bank of Scotland Investment Service
and HSBC.
Futures and Options
Association
The FOA has appointed Kathleen
Trayner as director of regulation, effec-
tive from January. She joins the associ-
ation from the London Stock Exchange,
where she was head of regulatory
strategy. She has also worked for six
years at TSX Group as senior legal
counsel.
RBC Wealth Management
The Royal Bank of Canada’s Wealth
Management division has added Julian
Washington as a director in its British
Isles’ private client fiduciary services
team. He will be in charge of drumming
up business in London, reporting to
Steve Sokic.
Washington will bring over 17 years’
experience in private client trust, tax
and estate planning services. He moves
to RBC Wealth Management from
Forsters, where he was a partner. He
has also worked at Charles Russell.

To appear in CITYMOVES please email your career

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com morganmckinley.com
CITYA.M. 15 DECEMBER 2010 Consumer News 17

London misses rates ballot Purchase of jeweller Amor

have already been hit with a Business faces rate hikes totalling £125m a
adds shine to 3i portfolio
▲

RETAIL
Rates Supplement (BRS) of 2p in the year which can now only be slapped
BY JOHN DUNNE pound, primarily as a contribution to on them after they agree in a vote.
RETAILERS across the UK will be bal- the Crossrail scheme. BRC director general Stephen strengthen this presence and expand

loted on whether they want to pay
extra on their business rates to help
bankroll local projects – but London
has missed out because a rate has
already been imposed.
The government – under pressure
from the British Retail Consortium
(BRC) – has made it a legal require-
ment for rate-setting local authorities
to gain the agreement of firms under
its Localism Bill, published on
Monday.
However, businesses in the capital
Retailers are obliged to pay the sup-
plement, which has been set for at
least the next 20 years.
The argument was made that the
£16bn east-west London rail scheme
would help boost commerce across
the capital, so making it of overall
benefit to London businesses.
A BRC spokesman said: “The argu-
ment in London is not relevant now
because the rate has already been
set.”
The BRC said the rest of the UK
Robertson said: “Compulsory busi-
ness ballots are a major victory for
the BRC on behalf of vulnerable retail-
ers big and small.
“It would be fundamentally unde-
mocratic to put extra taxes on local
businesses without establishing their
views first and assessing the potential
impact on jobs.”
A spokesman for the London
Chamber of Commerce said it had
supported the rate supplement for
Crossrail.
▲
PRIVATE EQUITY
PRIVATE equity investor 3i has added
new sparkle to its European portfolio
after buying German jewellery sup-
plier Amor yesterday.
Amor, which sells more than eight
million pieces of affordable jewellery
each year, has been sold by Pamplona
Capital Management for an undis-
closed amount.
Pamplona acquired Amor in 2006
and has grown it into a significant
international business. 3i intends to
it into further overseas markets.
Peter Wirtz, managing director of
3i Deutschland, said Amor had expe-
rienced continuous growth over sev-
eral years and 3i was “convinced of
the great potential the company has
for further growth.”
“We are delighted about this invest-
ment,” he said.
Family-owned Amor is Germany’s
largest wholesale and in-store jew-
ellery retailer and sources, distributes
and supplies jewellery to retail outlets.

Carpetright in
Whitbread in profit blow as
boost from sales tumble

Premier Inns
RETAIL

▲
CARPETRIGHT, the country’s biggest
floor coverings retailer, said the out-
look for 2011 looked poor as sluggish
mortgage approvals meant housing
market activity was unlikely to pick
up quickly.
He added: “It’s always hard to see Chief executive Andy Harrison said he had inherited a strong business British mortgage approvals, which
▲

LEISURE
what the new year has got in store are a key lead indicator for
BY JOHN DUNNE
WHITBREAD has seen sales rise at its
but Whitbread has traded very well
throughout the recession and I
ANALYST VIEWS: CAN WHITBREAD MAINTAIN Carpetright, fell to 30,766 in October,
their lowest monthly level in more
budget Premier Inns and Costa Coffee
bars, which will help it stay on target
believe we’ll do well whatever the
economy throws at us.”
GROWTH ACROSS ITS BRANDS? Interviews by John Dunne than one and a half years.
“The availability of mortgages, par-
for its full-year forecasts, the company Whitbread is planning to expand ticularly for first time buyers, is sig-
said yesterday.
Sales at Premier Inns open for
its Premier Inns brand and has
opened 26 new sites so far this year.
SIMON FRENCH | PANMURE GORDON nificantly different from what it was
three years ago (with people) needing

“
more than a year grew 8.7 per cent in More than 300 new Costa outlets a much higher level of deposit.
the third quarter to 2 December. will have opened by the end of the “I think that’s having a knock-on
Occupancy rose to 80 per cent in financial year. We are not expecting consensus expectations to move impact through the rest of the hous-

the year to date, up from 70 per cent
last year while revenue per available
room (RevPAR), a key industry meas-
ure, grew 9.2 per cent to £43.70.
Meanwhile sales at Costa Coffee
The total is now 1,200 in the UK
and 650 internationally.
At its restaurant business, offers
such as two meals for £10 at Brewers
Fayre helped the group lift sales at
”
upwards given what seems to have been a difficult start to ing chain at the moment,”
the fourth quarter and harsh weather conditions. Carpetright finance director Neil
Page said.
He was speaking after the firm
RICHARD HUNTER | HARGREAVES LANSDOWN posted a 28 per cent fall in first-half

rose 11 per cent over the period, bene-
fiting from a surge in demand for
mince pies as the festive season
approaches, with over 200,000 sold
“
outlets open more than a year by 1.5 profit.
per cent while rivals have seen sales Page is also concerned that the
decline. Despite the company warning at the half year stage country’s prolonged cold snap could
hit third-quarter trade.

already this year.
The average forecast for full-year
pre-tax profit across the company,
which also includes the Beefeater
chain, stands at £279m, compared
”
ANALYSIS l Whitbread 1,740.00 in October that the second half would be more difficult, “If we have Arctic conditions for six
p
14 Dec Whitbread has maintained its impressive growth. to 10 weeks... I’m sure it will impact
1,800 consumer demand. But it won’t just
impact Carpetright, it will impact the
1,750
MARK BRUMBY | LANGTON CAPITAL whole of retail,” he said.

with £208m the year before.
Andy Harrison, the former easyJet
chief executive who succeeded Alan
Parker as Whitbread chief executive
“
1,700 However, he added that the compa-
ny, which has 584 stores in the UK
1,650 and Ireland, was continuing to win
It’s a good company, operating in growing markets market share from smaller rivals, and

”
last month, said the company was in
1,600 & focused on what it does best but the share price had got a said he has high hopes for the firm’s
good health and he would not be pur- 1,550
17 Nov 7 Dec
little ahead of itself. Comparatives are tough and fast-growing beds business, which
suing a change in strategy. 20 Sep 8 Oct 28 Oct will be in 200 stores by Christmas.
will get tougher through the fourth quarter.

TUI opts not to pay a dividend after its NEWS | IN BRIEF

revenues slump amid tough conditions Renovo sees its losses narrow
Anti-scar treatment firm Renovo's loss-
es have narrowed – thanks to lower
operating costs from restructuring. The
company said it remains well funded.
Renovo, which had £51.8m in cash, cash
However, its underlying profit Travel up almost 11 per cent year-on- equivalents and investments in
▲
Odds for a White Xmas slashed
Bookmakers have shortened the odds on
a white Christmas, as weather
forecasters warn of an icy blast on its
way later this week. With less than a
fortnight to go until Christmas, tempera-
tures are set to drop as winds from the

LEISURE
BY HARRY BANKS
TUI Group, the parent of Tui Travel,
reported a 45 per cent fall in profits
for the year to September despite a 14
per cent increase in operating earn-
ings from tourism.
The company reported a group
profit of €114m (£135m) down from
€206m a year ago and chief executive
Michael Frenzel said it would not pay
a dividend in 2010 because of tough
markets.
from operations rose by a quarter
year-on-year to €589m.
TUI derives almost all its earnings
from travel – about one-third of them
from the UK – after moving into the
sector in the 1990s from heavy indus-
try and shipping.
The German group reported total
revenue of €16.4bn, of which Tui
Travel contributed €15.7bn and sepa-
rate companies Tui Hotels & Resorts
and Tui Cruises added €559m.
TUI reported earnings from Tui
year, in line with the results of the
London-based tourism company stat-
ed earlier this month.
The group is reported to be prepar-
ing to sell its stake in shipping compa-
ny Hapag-Lloyd after rescuing the
company from failure during the
downturn of 2009. Hapag-Lloyd is all
that remains of TUI’s former heavy-
industry empire. The group was in
the process of completing its divest-
ment in 2008 when the world finan-
cial crisis struck.
September, said it would have at least
£30m in cash when it reports data from
a late-stage trial of its key anti-scarring
product Juvista in the first half of next
year. Pre-tax loss for the year to
September was £8.6m, compared with
£20.2m a year ago. Revenue rose more
than three times to £16.2m. Operating
expenses, excluding revenue-related
research and development, fell by 22.4
per cent to £19m as the company
reduced staff and pre-clinical pro-
grammes.
north bring a band of rain and high winds
tomorrow. The Met Office expects the
wintry weather to last, with snow very
probable over the Christmas weekend.
On 25 December, snow is the most likely
to fall in Aberdeen, with odds
of 9/4, followed by Newcastle, Edinburgh
and Glasgow, with odds of 3/1
at bookmaker William Hill. For Leeds,
Liverpool and London, the odds of snow
falling on Christmas day are 4/1. One
flake of snow must fall on monitoring
stations for the payout to be made.
 18 Markets & Investments CITYA.M. 15 DECEMBER 2010

LONDON’S TOP 250

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 Group 321.25 5.5 326 250 Colt Telecom 130.5 3.75 142.5 109 John Wood Group 537.5 16.5 537.5 288 RSA Insurance Grp 127.5 0 136.5 114.75
3i Infrastructure 120.75 -0.75 121.5 97 Compass Group 569.5 -4 588.5 425 Johnson Matthey 1964 4 1973 1446 SABMiller 2195 15.5 2195 1650
A.B. Foods 1108 4 1136 804.5 Cookson Group 640 2 640 367.5 JPM Flem.Emerg Mkt. 615 3 621 450.5 Sage Group 283.25 0.25 289 220
Aberdeen Asset.Man. 204.75 2.5 205 112.75 Croda International 1515 -6 1610 751 Jupiter Fund Man 304 9 310 180.25 Sainsbury (J) 377.25 1.25 395 313
Admiral Group 1535 -21 1693 1110 Daily Mail & Gen 544.5 -3.5 567.5 404 Kazakhmys 1581 -11 1630 965 Schroders 1788 -3 1791 1116
Aegis Group 141 -1 145.5 103.5 Davis Service 418 -0.25 435 360.25 Kesa Electricals 168.5 2 174 99.25 Schroders NV 1414 -4 1418 929.5
Afren 143.25 1.25 143.25 79 De La Rue 853.5 15 1005 549.5 Kingfisher 253.5 0.25 259 198.5 Scot.& Sth. Energy 1150 14 1198 1010
African Barrick Gold 607.5 5.5 670 503 Debenhams 71.5 0.5 84 53 Ladbrokes 126.75 -0.5 162.75 123.5 Scottish Mortgage 705 2 705 475
Aggreko 1515 -3 1685 825 Derwent London 1550 -7 1605 1208 Lancashire 551 -3.5 647 422.25 SEGRO 295.5 7 352 250.25
Alliance Trust 373.25 1.25 373.25 293.5 Dexion Abs 139.25 0 148 131.25 Land Securities 667.5 4.5 696.5 545 Serco Group 577.5 12 651 494.25
Amec 1141 3 1155 733.5 Diageo 1170 -3 1193 1000 Legal & General 100 1.25 106.25 69.75 Severn Trent 1431 1 1468 1062
Amlin 404.25 3.75 433 357.25 Dixons Retail 26 0 38 23.75 Lloyds Banking Grp 69.25 0.5 77.5 46.5 Shaftesbury 455.25 0.25 460 349.25
Anglo American 3080 26.5 3080 2254 Domino’s Pizza 539.5 12.5 552.5 287.5 Logica 124.5 -0.25 148 101.75 Shire 1488 1 1567 1174
Antofagasta 1553 10 1553 761 Drax Group 379 3 444 326.25 London Stock Ex. 807 1.5 812.5 544 SIG 122 1.25 137.75 90.75
Aquarius Platinum 352.5 3.25 458 227 DS Smith 207.5 -2 210 104 Lonmin 1864 -21 2157 1355 Smith & Nephew 651 5.5 696.5 537.5
ARM Holdings 395.5 -1.25 414.5 170.25 Dunelm 539 -10 549 325.25 Man Group 287.5 1 327.5 202
Smiths Group 1256 -4 1285 954
Ashmore Group 357 -2.25 383.75 218 easyJet 429.5 -1 496.5 341.5 Marks & Spencer 376.25 -3.5 427.5 323.5
Ashtead Group 158 -1.75 160 71 Edin.Inv.Tst. 449.5 2.5 464.25 351.5 Meggitt 365.75 1.5 367.5 243 Soco International 369.75 3.5 484.25 292
AstraZeneca 3107 55.5 3385 2732 Electrocomponents 265.25 0.25 279.5 161.75 Melrose 292.25 2.25 304.25 162 Spectris 1295 28 1295 691.5
Atkins (WS) 714.5 15.5 792.5 556.5 Enquest 136.5 -0.5 146.5 89.25 Mercantile Inv Tst 1073 1 1073 822.5 Spirax-Sarco 1926 54 1926 1096
Autonomy 1407 3 1975 1271 Essar Energy 577 -3 580 383 Michael Page 500 -1 513.5 346.5 Spirent 154 2.75 160.25 94.5
Aveva Group 1587 0 1589 980.5 Eurasian Nat Res 988 9 1266 818 Micro Focus 403.5 4.25 546.5 276 Sports Direct 145.5 -1.25 152.75 92.25
Aviva 394.5 -0.75 423.5 294.25 Euromoney Inst. 704.5 -4.5 727 414 Millennium & Cop. 546.5 1.5 570 357 St James’s Place 278.5 0.5 292 204.25
Babcock International 555 6.5 635 492.75 Experian Group 791.5 6.5 791.5 572 Misys 298.5 2 304 201.5 Stagecoach Group 206.25 2 224 160.75
BAE Systems 337.5 7 388.75 294.75 Ferrexpo 372 2 396 179.5 Mitchells & Butlers 360 1.25 360 247.5 Standard Chartered 1750.5 -14 1950 1351.75
Balfour Beatty 312 -0.25 312.25 229.75 FirstGroup 386.5 -3.5 426 336 Mitie Group 230 0.25 241 188.75 Standard Life 212.5 0.5 236 173
Barclays 272 -1.25 383.25 255.25 For.&Col.Inv.Tst 305 1.5 305 251.5 Mondi 497.5 6 557.5 323.75 Supergroup 1628 -2 1638 535
Barratt Development 87.25 0 142 70 Fresnillo 1595 1 1605 669.5 Monks Inv.tst. 363 2.25 363 265.5 TalkTalk 165 1 167 108.5
BBA Aviation 216 -0.5 217.25 155.5 G4S 250.5 0.5 283.5 237.75 Morrison (Wm) 270 1 306.25 257.5 Talvivaara Mining 548 0 581 342.5
Bellway 641 4.5 826 511 Genesis E.m.f. 540 3.5 542.5 399 Murray Int.Tst 933 -4 937 720 Tate & Lyle 544.5 0.5 544.5 388.75
Berkeley Grp Hldgs 895 10 932.5 742 GKN 207.5 -1.5 210.5 102 National Express 227.25 -1 259.5 182.25 Taylor Wimpey 28.5 0.25 44 22.25
BG Group 1318 4.5 1333.5 984 GlaxoSmithKline 1257.5 4.5 1339.5 1095 National Grid 554 0 613.25 484.25 Telecity Group 507.5 5.5 532.5 357
BHP Billiton 2520 -4 2524 1684.5 Great Portland Est. 359 4.25 364 271.75 Next 2017 -6 2344 1817 Templeton Emrg. 656 1 685 471.5
BlackRock Mining 799 8.5 799 492 Greene King 482.5 2.75 482.5 376.25 Northumbrian Water 331.25 -0.75 361.5 252.75 Tesco 429.25 -2.75 454.5 377.5
BlueBay 484 -0.5 489.25 258 Halfords Group 447.5 -2.5 550 372.75 Ocado Group 160 -2 170 123.5 Thomas Cook Group 183.25 -1.75 272 171.75
BlueCrest AllBlue 173 0 174.5 152 Halma 366.5 5.75 366.5 223 Old Mutual 120 0.5 145.25 97.25 Travis Perkins 997.5 25.5 997.5 664.5
Booker Group 59.75 -0.5 60.25 38.75 Hammerson 414.5 1.5 434.5 336.25 PartyGaming 229 -6.5 334.5 206 TUI Travel 236.5 -1.5 308.5 190
BP 473 14.75 655.5 303 Hargreaves Lansdown 552.5 6.5 552.5 273.5 Pearson 998 -18 1051 855 Tullett Prebon 374 -1 417.25 262
Brit Insurance 1037 -5 1045 728 Hays 123.5 1.5 123.5 88.5 Pennon Group 634 3.5 639 483 Tullow Oil 1236 -3 1369 991.5
British Airways 278 0 286 184.25 Henderson Group 133.25 1.25 151.75 112.75 Persimmon 427.25 20.25 507.5 336.5 UK Commercial Prop 80.25 1.25 85 72.75
British Amer.Tob 2407 30 2464.5 1926 Heritage Oil 423.25 -0.75 581 296.75 Petrofac 1477 -16 1540 876.5 Ultra Electronics 1679 12 1895 1265
British Empire Tst 496.5 -2 498.5 394 Hikma 813.5 1 813.5 509 Petropavlovsk 1151 15 1365 852 Unilever 1943 24 2015 1688
British Land 511.5 1 520 418.25 Hiscox 373.5 4 373.5 304.25 Phoenix Group Hldgs 643 6 758 557.5 United Utilities 598 0.5 628.5 488.25
Britvic 480.5 3.75 518 379 Hochschild Mining 626.5 6.5 658 234 Premier Farnell 279 0.5 304.5 171.5 Utd Business Media 669.5 -4 682.5 409.75
Brown (N.) Group 298 -2 301.75 206.5 Home Retail Group 202.25 1.25 296 199.5 Premier Oil 1954 35 1954 1017 Vedanta 2363 25 2934 1839
BSkyB 732 -3 736 524.5 Homeserve 457.5 3 487.5 322.75 Provident Financial 850 10.5 974 728.5 Victrex 1445 31 1445 788
BT Group 181.75 -2 183.5 110 HSBC Holdings 671.75 6.25 740.5 596.25 Prudential 660.5 5.5 660.5 487.5 Vodafone Group 169.5 1 175 129.5
Bunzl 711.5 4 777 616.5 Hunting 724 6 724 439.5 PZ Cussons 394.25 1.5 409 234.75
Burberry Group 1126 7 1156 566.5 ICAP 532 1 532 294 QinetiQ Group 132.5 4.5 167 96.75 Weir Group 1764 -15 1861 676
C&W Comms 51.5 0.25 63.75 44.25 IG Group 509 -8 553 362.5 Randgold Res 5770 15 6655 4209 Wellstream Holdings 785.5 -4.5 790 436
C&W Worlwide 70 0.5 100 60.5 Imagination Tech 380 20.5 441.75 215 RDS ‘A’ 2089.5 23 2100.5 1624 WH Smith 523 6.5 529.5 398.25
Cairn Energy 414.5 1 493.25 303.5 IMI 914 5 948 504.5 RDS ‘B’ 2081.5 28.5 2081.5 1554 Whitbread 1740 -50 1812 1266
Caledonia Inv. 1900 -2 1902 1511 Imperial Tobacco 1913 18 2154 1753 Reckitt Benckiser 3599 26 3655 3037 William Hill 165.25 0 216.5 155.5
Capita Group 680 1 826 635.5 Inchcape 345.25 -2.25 368 237 Reed Elsevier 529.5 5 563 460.5 Witan Inv Trust 507.5 2 507.5 410
Capital & Counties 148.5 0.5 157 100 Informa 404.25 0.75 448 296 Regus 79.5 -0.5 120 66 WOLSELEY 1905 25 1905 1166
Capital Shop Centre 396.25 2.75 411.5 301 Inmarsat 676.5 -5 821 606.5 Renishaw 1256 -3 1259 516.5 WPP Group 766.5 -8.5 776.5 572.5
Carillion 369 -0.5 370.75 273 InterContinental Htl 1236 5 1236 867 Rentokil Initial 98 0 138.5 87.75 Xstrata 1448.5 -13 1461.5 845.75
Carnival 2724 -16 2920 2037 Intermediate Cap.Grp 322 -0.25 351 240.5 Resolution 235 -1 349 211.25
Catlin Group 365 3 393 320 International Pers Fin 348.5 -3.5 352.25 183.25 Rexam 311 0 346.75 272.5
Centamin Egypt 165.75 -2.5 197 106.75 International Power 424.25 4.5 436.75 284.5 Rightmove 770 5.5 810 474.5
Centrica 328.75 2.75 346 264 Intertek Group 1884 -16 2000 1150 Rio Tinto 4440 -39 4505 2812 LONDON TOP 250 BY MARKET CAPITALISATION
Charter 781 9.5 848.5 567 Invensys 338.5 3.75 349 230.25 RIT Capital Partners 1196 -7 1210 969 POWERED BY
Chemring Group 3019 -10 3663 2598 Investec 502 5.25 562 417.75 Rolls-Royce Group 628.5 -1.5 654.5 473.5
Close Brothers 860 0 861.5 664 ITV 72.5 -1.5 74.25 48.25 Rotork 1780 18 1895 1145
Cobham 206 0 276 192.25 Jardine Lloyd 604 -4 609.5 458 Royal Bank of Scot 41.25 -0.5 58 28.5 www.digitallook.com
CITYA.M. 15 DECEMBER 2010
FTSE 100 nudges higher on Dow surges to close
oil firms but miners miss out at a two-year high
THELONDON
REPORT
B
RITAIN’S leading share index
pushed higher yesterday, led by
energy stocks with BP boosted
by Royal Dutch Shell bid inter-
est talk.
The FTSE 100 index ended up 30.46
points, or 0.5 per cent at 5,891.21, a
closing level not seen since June 2008.
“Volumes remain thin, but the
FTSE keeps going up, with oils adding
the main fuel today, although
whether the 5,900 level can be
breached without more momentum
is a big question,” said Mic Mills, head
of electronic dealing at ETX Capital.
Integrated oils gave the blue chips
strength, although the crude price
slipped back following strong gains
made on Monday after data high-
lighted continued growth from
China.
BP was the biggest FTSE 100 riser,
up 3.2 per cent as traders cited vague
talk of potential bid interest from
Shell, ahead 1.4 per cent. Both compa-
nies declined to comment.
BP was also supported by its
announcement that it would sell a
portfolio of oil and gas assets in
Pakistan for $775m (£490.7m), above
analysts’ forecasts.
In addition, oil majors were helped
by a bullish note from Credit Suisse
which raised its oil price forecasts for
2011 and hiked target prices across
the sector.
The broker reiterated that BP was
its top sector pick.
Among individual blue chip gain-
ers, outsourcing firm Serco gained
2.1 per cent after being selected as
preferred bidder for a prison manage-
ment contract in New Zealand, val-
ued at around £190m.
And Scottish & Southern Energy
added 1.2 per cent after newspaper
reports revived possible takeover
interest in the multi-utility.
Miners were the biggest blue chip
fallers, retreating after gains on
Monday, with Lonmin shedding 1.1
per cent.
Whitbread, however, was the top
FTSE 100 decliner, down 2.8 per cent
despite posting strong profit growth.
Panmure Gordon downgraded its rat-
ing to “hold”, saying it did not expect
consensus expectations to be raised.
Tour operator TUI Travel fell 0.6 per
cent as its German parent company
TUI posted full-year results, and as
JPMorgan Cazenove cut targets for
both TUI Travel and mid-cap peer
Thomas Cook, down 0.9 per cent.
Elsewhere on the second line,
Investment | Markets & Investment
housebuilders provided the main
support led by Persimmon and
Redrow, up five and four per cent
respectively, after a survey said the
decline in house prices in England
and Wales was at a slower pace in
November than analysts had expect-
ed.
British consumer price inflation,
however, rose unexpectedly to a six-
month high of 3.3 per cent in
November, which could increase the
pressure on the Bank of England to
raise interest rates.
Analysts expected no surprises
after the markets closed from the US
Federal Reserve Open Market
Committee, with sentiment towards
the panel’s decision making little
impact on UK trading.
US blue chips were up 0.6 per cent
by London's close supported by
stronger than expected US retail sales
data.
ANALYSIS l FTSE
5,900 5,891.21
14 Dec
5,800
5,700
5,600
5,500
20 Sep 8 Oct 28 Oct 17Nov 7 Dec
THENEW YORK
REPORT
U
S stocks cut gains to end mostly
flat after a late-day sell-off yes-
terday as yet another cautious
statement from the Federal
Reserve on the economy offset strong
retail sales data for November.
The Dow Jones industrial average
was up 47.98 points, or 0.42 per cent,
at 11,476.62 – its highest close since 8
September 2008. The Standard &
Poor's 500 Index was up 1.13 points,
or 0.09 per cent, at 1,241.59. The
Nasdaq Composite Index was up 2.81
points, or 0.11 per cent, at 2,627.72.
With trading volume still anaemic,
the afternoon’s drop could be a sign
that the major indexes have hit the
upper range of a rally that has pro-
pelled them all to recent two-year
highs.
The Fed, in a policy statement after
its last scheduled meeting of 2010,
said the economic recovery was still
too slow to bring down unemploy-
ment and reaffirmed its commit-
ment to buy $600m in government
bonds. The move pushed bond yields
sharply higher and pressured finan-
19
cial shares, which are hurt by higher
rates.
“I’m slightly disappointed that the
(Fed) doesn’t see the world in the
same light that investors do,” said
Andrew Wilkinson, senior market
analyst at Interactive Brokers Group.
The PHLX KBW Bank Index lost 1.5
per cent. Recent winners, such as
Regions Financial and Marshall &
Ilsley, led losers, falling 5.3 per cent
and 3.4 per cent respectively.
US retail sales rose for a fifth
straight month in November, point-
ing to a firm rebound in consumer
spending, which accounts for roughly
two-thirds of the US economy. But
shares of Best Buy plummeted 14.8
per cent after the top US electronics
retailer posted a third-quarter profit
that missed expectations and cut its
full-year profit view.
“The data was encouraging overall
and shows that retailers are driving
traffic into the stores,” said Liam
Dalton president of Axiom Capital
Management. “But Best Buy is a
reminder that there’s a lot of dis-
counting and market share being
pulled in several directions, meaning
it could still be a choppy Christmas.”
Financial stocks were the top losers
yestesrday, with the group down 0.9
per cent, the biggest drop among S&P
sectors. Dow-listed JPMorgan Chase &
Co lost 1.7 per cent to $40.79.
 20 Investment | Foreign Exchange
EURO’S RALLY
IS DEPENDENT
ON THE DATA
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
W
ITH the euro bears still fixated on sover-
eign debt problems, Monday’s 200 point
rally in euro-dollar caught many curren-
cy traders by surprise and created a
massive short squeeze. As Ireland appeared to be
on its way towards finalising the EU bailout, risk
aversion flows abated and credit spreads sta-
bilised, leaving late shorts wrong footed.
Meanwhile, China’s refusal to raise its bench-
mark rates despite strong inflationary signals
was seen as positive for risk FX. Although the
Chinese economy is experiencing pricing pres-
sures and a rise in food costs – a gallon of milk is
now more expensive in Shanghai than it is in
Seattle – Chinese monetary authorities are reluc-
tant to use interest rate hikes to fight the prob-
lem. Instead, the People’s Bank of China (PBoC)
opted to raise the bank reserve requirements for
the sixth time this year to try to control the
developing asset bubble without hampering
growth in the real economy.
The PBoC’s pro-growth stance was viewed as
positive for Germany, whose economy benefits
greatly from Chinese demand for capital goods.
In fact, as long as Germany’s economy continues
to expand at a robust pace, the risk of sovereign
debt default in the Eurozone remains contained.
The currency market views Germany as the
financial backstop for the whole region. So the
current consensus view is: as goes Germany, so
goes the rest of the Eurozone.
That’s why the latest data could determine
whether this move in euro-dollar can extend
beyond the $1.3500 figure or stall and retrace
towards the low $1.30s. Tomorrow, the market
will get a look at the flash purchasing managers’
index (PMI) readings in both the manufacturing
and service sectors, which provide the most accu-
rate reading of the latest economic conditions in
the region. If they surprise positively, showing
even a modicum of improvement in demand, the
euro could have further to run. Just as last week
when I noted that the Aussie’s fortunes were
dependent on the Australian jobs report, this
week it all comes down to data for euro-dollar.
Boris Schlossberg and Kathy Lien are directors
of currency research at GFT. Read commentary
at www.GFTUK.com/commentary or e-mail
borisandkathy@gftuk.com
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CITYA.M. 15 DECEMBER 2010
Looking ahead
to 2011: some
likely winners
and laggards
A weaker greenback daily moves for currency traders to capi-
talise on.
and euro are on the But which currencies are likely to be
the winners or the losers next year?
cards but the Aussie Societe Generale’s Kit Juckes says:
“Barring a dramatic change, the scene is
set for the 2011 currency outlook to be
should still do well, dominated by Fed accommodation,
European Central Bank (ECB) fire-fighting
writes Jessica Mead to save the euro, and the response of
almost every other central bank in the
world to currency appreciation.”
He reckons we will see a weaker euro
F
ROM sovereign debt crises threaten- and dollar with the latter likely to win the
ing the very future of the euro to losers’ race. In contrast, the Aussie dollar
currency wars and more quantita- and the Norwegian krone will benefit
tive easing, 2010 has been an event- from interest rate differentials, solid fun-
ful year in the foreign exchange markets. damentals and appetite for natural
Currency traders will be pleased to hear resources.
that volatility, which has been so charac- Here we take a look at six of the most
teristic of the FX markets since the crisis, popularly traded currencies and what
is unlikely to disappear any time soon. analysts expect 2011 is likely to hold for
Consequently, there will still be plenty of them.
MAJOR FX | FOCUS MAJOR FX | FOCUS
US DOLLAR EURO
ancing, which is likely to be very gists reckon that pressure on the
dollar negative over the next few dollar will be greater because of
years. Equally, further QE would high unemployment in the US.
weigh on the greenback. Barclays Capital’s Paul Robinson
But others say that since the dollar thinks that it’s unlikely that the euro
It has not been a good second half has fallen against almost every 2010 will be a year that members of will sink against the dollar to the
of the year for the greenback, other G10 currency over the past the euro will want to forget. As the level it reached in June. He has
which has come under pressure decade, being bearish on the dollar year draws to a close, the future of reduced the three month forecast to
from a sluggish US recovery and “is somewhat in the price” now. the euro is still under threat – $1.28 but raised the forecast for
additional quantitative easing by But dollar buyers should remain although the odds suggest the sin- end-2011 to $1.42. Others are more
the Federal Reserve. cautious as there is the potential for gle currency is likely to survive for bearish: although Xenfin Capital’s
Opinions are somewhat divided a major dollar fight-back as a result now. Over the next few months, the Luca Rubinelli thinks the pair could
about the outlook for 2011. Some of risk aversion, says Mark Deans, euro is expected to continue to trade higher in the near-term, he
analysts point to the need for rebal- dealing manager at Moneycorp. come under pressure but FX strate- foresees $1.20 by the end of 2011.
SPREAD BETS | CFDs | FOREX
free phone 0800 358 0864
gftuk.com
GFT Global Markets UK Ltd. is autho-
rised and regulated by the Financial
Services Authority. CD03UK.129.120310
CITYA.M. 15 DECEMBER 2010 Investment | Foreign Exchange 21

MAJOR FX | FOCUS THE

JAPANESE
YEN
sheet and the Fed’s increased stimu- TIPSTER
lus. Alongside more risk averse
trading, this could see the yen ODD SIGNALS
strengthen further to test a 15-year
high.”
ACROSS THE
Against all odds the Japanese yen
has managed to remain very strong,
But since dollar-yen is the most sen-
sitive major dollar pair to changes
EUROZONE

MAJOR FX | FOCUS
BRITISH
POUND
For a currency that has spent most
of the year plagued by fiscal and
political crises, sterling has not
done too badly. While concerns
about further quantitative easing
Currency traders all
want one of these from the Bank of England and the
for Christmas
risk of contagion from the Eurozone
Picture: GETTY remain, these worries are starting
to dissipate.
MAJOR FX | FOCUS
A sluggish US recovery and loose
monetary policy should keep the
pound well supported against the
dollar with some predicting $1.82
by end-2011.
Yet it is still all too easy to be a ster-
ling bear. Stephen Gallo at
Schneider FX says: “From the per-
spective of trade and financial flows
alongside the UK’s fiscal imbalance,
there is certainly no shortage of
downside risks to sterling that need
to be squared over the medium-
term.”
trading at around ¥83 to the dollar
yesterday. Japanese exporters have
revised their currency estimates to
account for a stronger yen.
Xenfin trader Ian Langton agrees:
“We foresee the emphasis shifting
to focus on the negative US balance
AUSTRALIAN
DOLLAR
A combination of (relatively) high
interest rates, exposure to commodi-
ty demand and the distinction of
being one of the few advanced
economies to escape recession has
kept the Aussie dollar in demand. It
hit parity with the US dollar a month
ago and traded back through this
level on an intra-day basis yesterday.
ANALYSIS l Currencies' year-to-date performance against the US dollar
12 %
8 it proved to be somewhat short lived after
6
0
-4
-8
Source: Societe Generale
JPY AUD CHF CAD
in US yields, if US yields start to
rise, the yen would fall against the
dollar. “With a predicted pick up in
risky assets in 2011, the yen will
likely be sold by traders looking for
carry trade plays elsewhere,” says
World First’s Jeremy Cook.
The Aussie is likely to see some dips
in 2011 – with the key risks being
Chinese tightening and risk aversion.
“Among all the G10 currencies, the
Aussie remains the most sensitive to
yuan moves. The market will need to
adjust to tighter conditions in China.
The immediate impact may be brutal
on the FX markets,” says BNP
Paribas’ Ian Stannard.
But the Aussie remains a clear
favourite and SocGen’s Juckes
believes it could still have further
upside against the US dollar.
SEK NZD GDP NOK EUR
E
URO-US dollar formed a bullish engulfing
candlestick yesterday and in the process
made a breakout from its recent down-
ward trend. A break of the $1.3280 level
was crucial and led to further buying with the
cross back above $1.3400. The strength could
continue following this move and in the run up
to the meeting of European leaders on
Thursday. Capital Spreads quotes a price of
$1.3420-$1.3421 for Euro-US dollar.
A major British clearer sold sterling-
Australian dollar quite aggressively yester-
day, helping drive it down to AU$1.5836, not
far off its all-time lows. Although it might be
dangerous to try to catch a bounce in this
pair, the area around AU$1.5840 offered
strong support in October, November and as
recently as last week. If you are tempted to
try a long trade, it might be wise to keep your
stop losses tight, around AU$1.5760, in case it
does break October’s low of AU$1.5768.
Spread Co offers a spread on sterling-
Australian dollar of AU$1.5837–AU$1.5849.
A rise in German sentiment announced in
yesterday’s ZEW survey coupled with
October’s increase in Eurozone industrial pro-
duction is good news for the struggling euro.
But the bullish trend we have seen cannot con-
tinue for long amid doubts over the future of
the euro. Against the yen, the resistance area
of ¥111.70 has been robust since November
and shows no sign of being broken. Cantor
Index offers euro-yen at ¥111.72–¥111.75.
Marginally hotter than expected inflation in
the UK offered some support for sterling but
better than expected ZEW economic senti-
ment readings from the Eurozone. As a result,
euro-sterling is rallying and a test of
December highs would be the obvious next
level to watch for. The debate over a pan-
European bond issue continues, however, and
there is a chance that this recent episode may
serve to accelerate harmonisation of econom-
ic policies across member states. IG Index
offers a price on euro-sterling of 84.91p-
84.93p. Daniel Knowles

FOREX ANALYST PICKS

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

My pick: Stay long dollar-yen
Expertise: Global macro
Average time frame of trades: 1 week-6 months
I entered long dollar-yen at ¥83.08 in mid-November expecting the
pair to rise along with US Treasury yields in the aftermath of QE2
after the $600bn increase in asset purchases matched traders’ expec-
tations and opened the door for profit-taking into the year-end.
Indeed, US yields have started to rebound aggressively over recent
weeks and I will remain long, initially targeting ¥85.87. A stop-loss
will be activated on a daily close below ¥81.72.
My pick: Sell Kiwi-dollar, go long Aussie-Kiwi
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
We are coming into the thin-liquidity, end-of-the-year period. Therefore, I
will cut my dollar-Canadian dollar. My long dollar-yen from ¥82 and short
Aussie-Loonie from Ca$0.99 are meant as long-term setups and shall
remain in place. What I want to fall back on now are setups that take big
events and moves. For that I am looking at a Kiwi-US dollar break below
US$0.74 (with a 200 point stop and first target) and perhaps even
Aussie-Kiwi above NZ$1.3225 (stop to be determined).
My pick: Buy US dollar-Swiss franc at SFr0.9810
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
The market is currently carving out a major base after putting in a
record low at SFr0.9460 several weeks back. Look for a fresh higher
low to carve out in the SFr0.9700 area ahead of the next major upside
extension towards our target at the 200-day simple moving average at
SFr1.0500. A push back above SFr0.9920 will strengthen the construc-
tive outlook, while SFr1.0070 will confirm and accelerate gains. Only a
daily close below SFr0.9550 would give reason for concern.
 City Focus
22 CITYA.M. 15 DECEMBER 2010

| Accounting

Auditors are not

watchdogs, they
are bloodhounds
on a tight leash
The audit industry may not have been in auditors’ job
description at the time, but it could well
did not simply miss be expected of them in the future.
Though audit is seen to be an incredi-
the cracks in the bly valuable tool to increase public and
investor confidence in businesses and
therefore the wider economy, problems
banks. It was never were highlighted, particularly about the
relevance of the information presented
meant to spot them by auditors and how that information
was communicated.

A WISHLIST
The first step in the hoped-for evolution
of audit is an increase in its scope. If
auditors didn’t spot the problems at the
banks and other companies it wasn’t
because they missed them, it was
because they weren’t expected to look
for them. The problem wasn’t misrepre-
IAN WELCH sented accounts – auditors would have
raised an alarm if it had been – but
HEAD OF POLICY, ACCA
rather it was the underlying business

T
HERE are two sides to every story.
This particular story concerns audit
and its value to society. Are you sit-
ting comfortably?
“Extraordinarily self-satisfied” is how
the former chancellor Lord Lawson
described the suggestion by top auditors
that there hadn’t been a failure of audit
prior to the financial crisis. “You were
the auditor of [a bank] which went belly-
up within a few months of you giving it
a clean bill of health,” he told one Big
Four chief who was giving evidence to a
House of Lords inquiry.
Unfortunately, though Lord Lawson’s
criticisms grabbed headlines, they didn’t
really capture the nuances of the debate
about the role of audit.
It’s easy to accuse auditors of failing to
spot the financial storm on the horizon,
but in reality, that wasn’t really their
job. Lord Lawson said that auditors were
the dog that “didn’t bark”, but auditors
are more like bloodhounds on a leash
than free-roaming watchdogs. There was-
n’t anything worth barking about where
they were being told to look – a point
agreed on by many reviews preceding
the Lords’ inquiry.
That still leaves a question to be
answered though. If it wasn’t the audi-
tors’ job to look out for the problems
that rocked global banks then what
exactly is the point of audit? The prob-
lem however, for those that try to define
and defend the value of audit for society
is that until recently there’s a been real
paucity of research into this area.
To rectify this, the Association of
Chartered Certified Accountants (ACCA)
has spent the past twelve months run-
ning a series of roundtables around the
world looking at the value of audit. They
brought together businesses, finance
providers, regulators, auditors, ratings
agencies and others to tell us what they
think of and expect from audit.
And the message delivered was clear.
Audit is valued by stakeholders, but they
are increasingly expecting more from it.
Picking up on the problems at the banks
models that weren’t sustainable. If the
scope of audit was expanded to look at
things like business models or even the
assumptions that supported them,
financial crises like the one we’ve just
experienced could maybe have been
averted.
Roundtables in Britain indicated that
they would appreciate auditors looking
at forward-looking information.
Malaysian roundtables wanted more
information from auditors on a compa-
ny’s risks. Roundtables in the above two
countries and also in the Ukraine all
hoped for almost real-time reporting as
opposed to the easily out-dated end-of-
year report that is currently the norm.
Alongside expanding the scope of
audit, the idea that attracted most wide-
spread support was throwing open the
audit “black box”. Frustration was
expressed that despite paying for the
audit, all shareholders ever get to see of
the extensive work done by auditors is a
two-page boilerplate, once a year, which
mostly consists of a detailing of auditor
responsibility anyway.
Audit reports may give an answer to
shareholders, but they don’t tell them
what the question was in the first place.
Malaysian participants were keen to see
“red-flags” waved at shareholders by
auditors ahead of any impending prob-
lems. Communicating the detail of the
audit process more widely than just the
audit committee could re-assure share-
holders that auditors really do put a
company through its paces.
A REALITY CHECK
No point on the audit wish-list can be
implemented easily, however – some-
thing recognised by the roundtables.
Some wishes are potentially mutually
exclusive. Real time audit reporting
could hamper attempts to broaden the
scope of audit because of the amount of
required work, while increasing the
scope of work required could push audit
fees up. Requiring auditors to be more
candid in their published statements
could risk the openness of auditors in
Auditors are held their dealings with management.
tight on a leash The biggest problem with changing
the role and scope of auditors is auditor
Picture: GETTY liability. If auditors are asked to do more
then there are more things that can go
wrong. This wouldn’t be so much of a
problem if liability was reformed along-
side audit, but even minor attempts at
reforming audit liability have run
aground.
A change in British rules in 2006
which allowed the possibility of ad hoc
restrictions on liability was a welcome
step, but it floundered on American reg-
ulatory scepticism and other practical
issues. Without audit liability reform,
auditors are unlikely to want to expand
their roles.
It’s interesting to note at this point
that those countries, such as Germany,
with some sort of statutory limited lia-
bility have been most successful in
increasing the pool of audit firms that
operate in the listed sector. Addressing
ROUNDTABLES | ACCA/DELOITTE
l Poland – Delegates believed that auditors
had to do more to re-assure shareholders that inclusion of forward-looking information.
their investments were being looked after
l Ukraine – Delegates, including Big Four
auditors, called for monthly management
accounts to be available online and audited
– Leading auditors were concerned that fees more information on risks from auditors.
weren’t high enough for firms to be able to
invest in quality improvement procedures and interim reports and auditing so “red flags”
employee training
auditor liability could help kill two birds
with one stone.
Caught in the middle of all these ques-
tions and caveats is the audit profession
itself. Auditors were criticised for not
doing what wasn’t their job, and they
now find that an important part of liv-
ing up to such expectations is out of
their hands. Audit is valued by those
that use it, but it is beginning to test the
patience of some stakeholders.
Consequently and appropriately, audi-
tors are feeling the pressure to change,
but audit liability is not a hurdle that
the audit profession can overcome by
itself. Action will be needed by govern-
ments to help break the log jam, but
until we get that, we’ll be stuck in a very
unsatisfactory place; indeed we’ll be
stuck where we were three years ago.
Auditors may not have barked, but
were they supposed to in the first place?
There are two sides to every story.
Ian Welch is head of policy at the Association
of Chartered Certified Accountants (ACCA)
l UK – British roundtables welcomed the
– Delegates urged that the “audit black box”
be opened, and process communicated much
more effectively to shareholders
l Malaysia – Shareholders wanted to see
– Shareholder groups wanted to see more
could be raised at the first sign of trouble.
 Lifestyle
23

| Motoring WORDS BY
RYAN BORROFF

Boxy and practical but no beauty

Unfortunately you Plenty of window

lose out on a good in the back will

help with car
drive with this sickness. Below:
Roomster’s dash.
sensible car

I
F the Škoda Roomster looks a little
strange – as if the front half of the
car was developed by a different
team to the back of it – it’s not acci-
dental, it’s by design. The concept under-
lying the Roomster set out to split the car
into two “rooms”, a “driving room” up
front and a “living room” in the back.
Looks-wise, the front of the car suggests
sportiness while the back is more practi-
cal and the resulting car is more success-
ful as a living space than a driving one
and gives the car its quirky split
personality.
From the outside, this 2010 Roomster S
may look a little schizophrenic but not
unattractively so. Looking at some of its
small MPV rivals, it’s a positive oil paint-
ing, though there’s no doubt that reac-
tions are mixed. But it’s a clever design
inasmuch that as a family car it’s practi-
cal and flexible.
Two things in particular mark the
Roomster out. The first is that the win-
dows in the rear are extra low, lower than
the front in fact, which contributes to its
unusual looks. Second, the seats sit much
higher than conventional rivals, which is
why the roof pitches upwards at the rear.
Together these two unusual characteris-
tics mean there is loads of visibility in the
rear, even for the smallest kids. Rear seat
passengers can see the road outside and
the road ahead. Which is pretty cool if
you’re a little one. From a parent perspec-
tive it helps alleviate boredom and travel
sickness in kids. Which is quite com-
pelling. steering wheel and gearknob in particu- unusual looking. It’s a very imaginative
Unfortunately you may have to compro- lar – let the interior down somewhat, THE FACTS: and practical car that is really quite
mise elsewhere. There’s no avoiding it but although this is the lowest trim option. SKODA unusual amongst its rivals. It’s not
the 1.2 12V 70bhp engine in the Roomster But the fabric trim on the doors helps to ROOMSTER thrilling, just very sensible and practical.
we tested is just too slow. It feels surpris- lift what would otherwise be a fantastical- If you’re in the market for such a family-
ingly bunged up on the motorway and ly dull place to sit. The Roomster’s master focused car its worth a look, but go for
though comfortable enough around stroke inside is its seats which tumble for- PRICE: £11,260 one of the turbocharged engines in the
town, it’s a tortoise. Pootling will be what ward individually – or can even be 0-62MPH: 15.9secs range rather than this one if you can.
you’ll be doing, whether you’re in a hurry removed – so you have a great deal of flex- TOP SPEED: 99mph
or not. Combine this with light steering,
an unremarkable ride and a noisy diesel
ibility to carry whatever stuff you’re into.
There really is a lot of space for both pas-
CO2 G/KM: 143g/km THE VERDICT
engine – and not a nice noise either – and sengers and luggage, 450 litres with the MPG Combined: 45.6 DESIGN iihhh
it’s quite clear that the Roomster is all seats up and a mahoosive 1,780 litres with PERFORMANCE iiihh
about the inside. them folded. PRACTICALITY iihhh
Cheap plastics – on the dashboard, There’s no doubt the Roomster is VALUE FOR MONEY iihhh

CAR TALK BY RYAN BORROFF

NEW SERIES M COUPE
This is the new 340hp BMW 1 Series M Coupé that will debut at
January’s Detroit motor show. The twin-turbocharged car will have a
0-62mph time of just 4.9 seconds which, amazingly, is just a fraction
slower than the existing M3, despite the fact that the car will be a lot
cheaper at £39,990 when it goes on sale in May 2011. Other tweaks
include 19-inch alloy wheels and quad exhaust pipes.
FERRARI’S FAST CAR OF THE YEAR
The TV show Fifth Gear has nominated Ferrari’s stunning-looking 458
Italia as its “Fast Car of the Year”. The 4.5 litre, 560bhp, mid-engined V8
sports car can reach 62mph from standstill in just 3.4 seconds and has a
top speed of more than 202 mph. The award follows a raft of other inter-
national awards including BBC Top Gear Magazine’s “Supercar of the
Year” and “Car of the Year”, and GQ Magazine’s “Supercar of the Year”.
NISSAN LEAF TO BE CHEAPER TO RUN THAN THOUGHT
There’s been a lot of negative press about how expensive electric cars
will be when they get here next year. But Nissan says its new electric
LEAF car can be had for just under £400 per month, which should
mean more people will be able to afford to “go electric” than previously
thought. Running costs will be cheap; a full battery charge should cost
just £2 and there’ll be no road tax and no congestion charge to pay.
 24 Lifestyle | TV& Games CITYA.M. 15 DECEMBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News 6.30pm BBC
London News 7pm The One Show
7.30pm Dig 1940: BBC News 8pm
Jimmy’s Food Factory 8.30pm Nigel
Slater’s Simple Suppers
9pm The Apprentice
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Wednesday Night Draws
10.45pm CHOICE Film 2010
with Claudia Winkleman:
National Lottery Update
11.25pm FILM When a Man Loves
a Woman 1994; Weatherview
1.30am Sign Zone: Country Tracks
2.25am Return of the Rhino: A Last
Chance to See Special 3.25am
A Life without Work 4.25am-6am
BBC News
6pm Celebrity Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm Escape to the Country:
Two singers hope to find a rural
idyll in Ceredigion, West Wales.
8pm Edwardian Farm:
Re-creating 24 hours in an
Edwardian farmer’s household.
9pm CHOICE Ancient Worlds:
The rise and fall of the Roman
empire. Last in the series.
10pm The Apprentice: You’re
Fired!
10.30pm Newsnight: Weather
11.20pm At Home with the
Georgians
12.20am BBC News
4.25am-6am Close
6pm London Tonight 6pm The Simpsons 6pm Home and Away:
6.30pm ITV News 6.30pm Hollyoaks Robertson senses an
7pm CHOICE Emmerdale: 7pm Channel 4 News opportunity to rekindle his
Rhona receives the results of 7.55pm 4thought.tv: romance with Leah.
the Down’s syndrome test. The relevance of Jesus in 6.25pm Live from Studio
7.30pm The Lakes: A record- contemporary Britain. Five: Topical reports.
breaking egg farmer. 8pm The Million Pound Drop 7pm Five News at 7
8pm A Touch of Frost Live: New series. Game show. 7.30pm Live UEFA Europa
10pm ITV News at Ten 9pm Grand Designs League Football: Liverpool v FC
10.30pm London News 10pm Hollyoaks Utrecht (Kick-off 8.05pm).
FILM 2010 WITH CLAUDIA
10.35pm FILM Falling Down: 11.05pm The Event 10.10pm FILM Second in
Urban thriller, starring 12.05am Reaper Command: Thriller, starring WINKLEMAN BBC1, 10.45PM
Michael Douglas. 1993. 12.50am FILM Isolation: Jean-Claude Van Damme The host and Danny Leigh review
12.40am The Zone; Premiere. Horror, starring and William Tapley. 2006. Burlesque, starring Christina Aguilera
ITV News Headlines Essie Davis. 2005. 12am Poker and Cher, sci-fi sequel Tron: Legacy,
2.40am FILM End of Days: 2.30am King of the Hill 2.55am 1am SuperCasino 4am The FBI and documentary Catfish.
Supernatural action thriller, starring ER 3.40am Brothers & Sisters Files 4.45am House Doctor 5.10am
Arnold Schwarzenegger. 1999. 4.30am Hill Street Blues Michaela’s Wild Challenge 5.35am-
4.40am-5.30am ITV Nightscreen 5.25am-6.10am One Tree Hill 6am Michaela’s Wild Challenge

SKY SPORTS 1 12.30am European Tour LIVING 10pm Desperate Housewives 3.50am Nasa’s Greatest
SATELLITE & CABLE

7pm Sky Sports News at
Seven 7.30pm FIFA Futbol
Mundial 8pm Live Ringside
Boxing: Martin Lindsay v John
Simpson. 10pm You’re on Sky
Sports! 11.30pm FIFA Futbol
Mundial 12am Ringside Boxing
2am-6am Live Test Cricket:
Australia v England.
SKY SPORTS 2
7pm IRB Rugby Sevens 10pm
Darts 11pm Bowls 12am Darts
1am Transworld Sport 2am
Snow Ride 2.30am European
Tour Weekly 3am European
Tour Golf 3.30am-4.30am
Watersports World
SKY SPORTS 3
7pm Transworld Sport 8pm
Darts 9pm European Tour Golf
9.30pm European Tour Weekly
10pm Cage Fighter 10.30pm
International Judo World
Circuit 11pm Golfing World
12am Asian Tour Golf Show
Weekly 1am-4am
IRB Rugby Sevens
BRITISH EUROSPORT
7pm European Tour Golf
7.30pm Ladies European Tour
Golf 7.40pm Golf Club 7.45pm
Yacht Club 7.50pm Wednesday
Selection: Sport round-up.
8.05pm Live Equestrian: The
Olympia International Horse
Show. 10.15pm Bobsleigh
11.15pm-12.20am Skeleton
ESPN
6pm Live UEFA Europa League
Football 8pm Live UEFA
Europa League Football:
Coverage of a matchday six
fixture. 10pm Premier League
World 10.30pm Ski World Cup
Report 11pm Snowboarding
11.30pm ESPN Kicks Extra
11.45pm 30 for 30 1.45am
Press Pass 2010 2.15am
ESPN Kicks Extra 2.30am-
5am Live NBA Basketball
7pm CSI: Miami 8pm Four
Weddings 9pm Cheryl Cole’s
Crazy 2010 10pm Criminal
Minds 1am CSI: Miami
2am CSI: Crime Scene
Investigation 3am Charmed
4.40am Boston Legal 5.30am-
6am Home Shopping
BBC THREE
7pm Mad About the House
8pm FILM Catch Me If You
Can 2002. 10.15pm Family Guy
11pm The Real Sleeping Beauty
12am Russell Howard’s Good
News 12.30am Mad About the
House 1.30am The World’s
Strictest Parents 2.30am
Russell Howard’s Good News
3am The Real Sleeping Beauty
4am Lip Service 4.55am-
5.25am The Real Hustle:
Celebrity Scammers
E4
7pm Hollyoaks 7.30pm
Friends 9pm Ugly Betty
11pm Alan Carr: Chatty Man: Missions 4.40am Days That
With Colin Farrell, David Shook the World 5.30am-6am
Hasselhoff and the cast of The How Does That Work?
Inbetweeners. 12am Scrubs
1am Glee 1.45am Alan Carr: DISCOVERY HOME &
Chatty Man 2.40am What HEALTH ANCIENT WORLDS
About Brian 3.20am Reno 911! 7pm A Baby Story 8pm 10 BBC2, 9PM
4.05am Being Erica Years Younger 9pm Richard Miles investigates the rise and
4.50am-6am Switched Emergency 10pm Hospital fall of the Roman empire, and learns
Sydney 11pm Emergency how Christianity superseded the
HISTORY Medics 12am Emergency 1am Roman multi-god belief system.
7pm Ancient Aliens 9pm Ax Hospital Sydney 2am
Men 10pm The British UFO Emergency Medics 3am 10
Files 11pm The Sword 12am Years Younger 4am Baby Tales
Ancient Aliens 2am Extreme 5am-6am A Baby Story
Trains 3am-5am Mega Movers
SKY1
DISCOVERY 8.30pm Raising Hope 9pm
8pm How Do They Do It? Justin Lee Collins: The
8.30pm How It’s Made 9pm Wrestler 10pm FILM Stargate
Shark Attack File 10pm Behind – Ark of Truth 2008. 12am
Bars 11pm Frontline Battle Road Wars 1.50am Shadow of EMMERDALE
Machines with Mike Brewer the Shark 2.40am Oops TV ITV1, 7PM
12am Bear Grylls: Born Survivor 3.30am The Dresden Files Rhona is unsure whether she can go
1am Deadliest Catch 2am 4.20am Sell Me the Answer through with the pregnancy after the
Chris Barrie’s Massive Engines 5.10am-6am Are You Smarter midwife confirms her fears and tells
3am The First World War Than a 10 Year Old? her the baby has Down’s syndrome.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
7 28 22 11 12 13 23 13
35 24
  
16 9
Place the numbers from 1 to 9 in each empty cell so that each 14 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 10 16
27 34
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 4 10
   
above or to the left of it. 17 29 26
You can only use the digits 1-9 23 17 3
   and you must not use the
12 5
45     
same digit twice in a block.
  The same digit may occur 13 9 21 
28 29
   more than once in a row or
column, but it must be in a 8 19
30
6
10
 

   separate block. 25
8
10
11
7 33
    17 15


   ACROSS DOWN
2 Animal that feeds 1 Metal fastener in
  
  WORDWHEEL O R
on refuse (9)
6 Worries excessively (5)
the form of a clasp,
with a guard (6,3)
2 Oozes (5)
Using only the letters in the Wordwheel, you have 7 Measures of land (5)
   ten minutes to find as many words as possible,
D E 9 Each and every (3)
3 Analysis of a substance
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 Sport
Getting to know the real McCoy
Bill Esdaile meets the
best jump jockey of
all time and hot tip
to be crowned Sports
Personality for 2010
W
E meet outside Ascot’s weighing
room just after lunch. That’s my
lunch, not AP’s, as he doesn’t
really do lunch. That’s the sacri-
fice he and other jockeys make to main-
tain their racing weights. But, that’s
where comparisons with other jockeys
stop. With over 3,300 career winners to his
name and 15 consecutive Jockey
Championships, there never has been and
probably never will be another like
Anthony Peter McCoy.
“I’m really an incredibly spoilt human
being,” he warns pretty early on. That’s
coming from someone who’s been up
since 6.15am, schooled eight horses over
fences, sat in a sauna for 40 minutes and
already ridden in one race. And he did all
this on the back of just one piece of toast,
a cup of tea and, more importantly, no
lunch. It’s not hard to think of more spoil-
ing days, particularly as he only has a
small portion of fish and vegetables (no
potatoes) to look forward to for his dinner.
LUCKY
McCoy’s amazing story began in County
Antrim on 4 May 1974 and AP recalls how
there is a photo of him sitting on the back
of a horse at the tender age of just two.
“None of my four sisters or brother had
ever ridden a horse before,” he says, “So
the whole thing really was a bit bizarre.”
Yet by the time he was 13, the years
spent with ponies had convinced him he
should become a jockey. Within two years
he was based with trainer Jim Bolger in
Kilkenny and served his flat apprentice-
ship there for four and a half years. “I
moved to England in 1994. I was
Champion Conditional Jockey in my first
season and have been Champion Jockey
every season since.”
He makes the whole journey sound so
simple, but it would be wrong to underes-
timate the sweat, toil and pain he has
endured to reach the very top of his profes-
sion. He has had more than 13,000 rides
which means he has covered a distance on
horseback which would very nearly take
him around the world twice. It’s also
worth remembering that the journey has-
n’t always been a smooth one. He has fall-
en off well over 500 of those mounts and
SPORT | IN BRIEF
Blackburn determined to go British
FOOTBALL: Blackburn are on the lookout for a than two weeks later.
British manager to replace Sam Allardyce but
insist they are in no rush to appoint a new
boss. Coach Steve Kean was placed in tempo- FOOTBALL: Liverpool manager Roy Hodgson
rary charge of first team matters after
Allardyce was axed on Monday. “It’s a very
prestigious decision so we have to take some
time,” said Venkatesh Rao, one of the club’s
Indian owners.
Notts to start defence against Hants long term and they are going to be patient.”
CRICKET: Nottinghamshire will not begin the
defence of their LV= County Championship
title until 14 April after being given a week off BOXING: Promoter Frank Warren has told
in the opening round of next season’s fixtures. Amir Khan that he would be “mad” to fight
Mick Newell’s side travel to Abu Dhabi for the Floyd Mayweather. Trainer Freddie Roach led
season curtain-raiser against an MCC XI on
27 March, but will not be in action again until for-pound king next year after his thrilling vic-
has broken both shoulder blades, a middle
and lower vertebrae, his ankle, wrist, leg,
cheekbone, not to mention various ribs
and teeth. Even after all this, he describes
himself as an incredibly lucky person.
RAISE THE BAR
Fortune certainly favoured him at Aintree
in April when, at the 15th attempt, he
finally won the Grand National. “The
whole day was amazing,” he recalls as a
wide smile appears on his face. “I have
never experienced an atmosphere like it
and never will again. It was definitely my
greatest day’s racing, but I don’t think it’s
my greatest achievement; that would still
be breaking Sir Gordon Richards’ record of
winners in a season.” That record of 269
winners had stood for 55 years – until
McCoy raised the bar by 20 in 2002.
His wife Chanelle and three-year-old
daughter Eve now give McCoy the perfect
distraction after a bad day at the office. “I
used to be a terrible dweller on things,” he
confesses. “I used to go home and replay
races over and over again, watching out
they face Hampshire at Trent Bridge more
Hodgson not worried about the sack
insists he does not fear for his job and is still
confident he can turn around the Reds season.
“I don’t have any fears, worries or concerns,”
said Hodgson ahead of tonight’s Europa
League clash with Utrecht. “The owners have
made it perfectly clear they are in it for the
Khan not ready for Mayweather test
calls for Khan to take on the former pound-
“DON’T BELIEVE THE AUSSIES
ARE DEAD AND BURIED YET”
TUFFERS TELLS ENGLAND TO GO FOR
THE JUGULAR IN THIRD TEST: P26
McCoy finally claimed for mistakes. It used to drive me dement-
victory in the Grand ed. Now, Eve wants entertaining and she
National aboard Don’t doesn’t care whether I had a successful
Push It in April day or not.”
So, if he’s not watching Peppa Pig or
Picture: GETTY reading stories to Eve, the 36-year-old can
often be found with a set of golf clubs on
his shoulder. “I was lucky enough to play a
round of golf with Tiger Woods in the
summer. You need a lot of luck to ride a
National winner, but not everyone can say
they have played 18 holes with Tiger.”
Perhaps Woods, too, brags about having
played with Tony McCoy.
“I’m also a huge Arsenal fan,” he goes
on. “I often travel to see them for a mid-
week Champions League or Carling Cup
game.” He also confesses to being a huge
sports fan and a bit of a couch potato. “I
love watching all sport… football, snooker,
golf, darts, boxing... you name it.”
SELECT GROUP
On Sunday he will take his place among
the select group of 10 sportsmen and
women he spends so much time watch-
Results
=FFK98CC
tory over Marcos Maidana last weekend, but EGFN<IC<8>L<)
Warren warned: “He’s got to go up in weight :_\ck\e_Xd%%%%%%'  ' Jflk_\e[%%%%%%%%%)  )
to fight Mayweather – it’s madness.” 8kk1)#))0
=8:LGJ<:FE;IFLE;
Henson hopeful of Wales return ?Xikc\gffc%%%%%%%%)  + P\fm`c%%%%%%%%%%%%%%%)  )
Jn\\e\p*,#+'#,0
RUGBY UNION: British and Irish Lions back
?ldg_i\pj+0
Gavin Henson has declared that Wales can win  8kk1(#0(+
next year’s Six Nations – and is eyeing a place Efkkj:flekp%%%*  * 9flie\dflk_%%'  (
in the national side’s squad. Henson, who is G\XiZ\(/
?l^_\j*,
hoping to make his return to competitive
:ldd`e^j+,f^ 
rugby for Saracens against Wasps on Boxing
Day, said: “I think we’re due another Grand J<:FE;IFLE;I<GC8P
C`eZfce:`kp%%%%%%%%%%% G ?\i\]fi[%%%%%%%%%%%%%%%  G
Slam and I want to be part of it.” Meanwhile,
the ERC have asked Saracens to ensure that :CP;<J;8C<98EB
GI<D@<IC<8>L<
coach Brendan Venter co-operates fully with Dfk_\in\cc%%%%%% (  ( ?\Xikj%%%%%%%%%%%%%% (  )
the media. The request comes in the wake of CXjc\p+,
the South African's bizarre post-match inter- 8kk1*#*)+
view – in which he gave curt answers to ques-
tions – following the defeat to Racing Metro.
25
“I used to be
a terrible
dweller on
things. I’d
replay races
over and over
again. It used
to drive me
demented.”
CV | TONY MCCOY
Name: Anthony Peter (AP) McCoy
Born: Moneyglass, Co Antrim, 4 May 1974
Achievements: Champion Jockey every
year since 1995; more than 3,000 win-
ners; Grand National winner (2010)
Other major wins: King George VI Chase,
Champion Hurdle, Champion Chase,
Cheltenham Gold Cup
ing, to face the public vote for the title of
BBC Sports Personality of the Year.
He admires Graeme McDowell enor-
mously for winning a Major and then the
Ryder Cup, but feels fellow golfer Lee
Westwood is the one they all have to beat.
“Lee’s achievement in dethroning Tiger as
world No1 is enormous. Everyone sets out
to reach the top and he has done just
that.”
He won’t be drawn on life after riding,
although he admits that there is a lot
more behind him than in front; an equal-
ly apt description of most of the races he
rides in. “I’m not thinking about that yet,”
he insists. “When you start thinking about
that, then you know it’s time to stop. I
know it’s going to come eventually, but I
want to go out as champion and not slide
down the pecking order.”
There can be few sportsmen out there
with more drive and determination.
McCoy departs with his mantra that no
matter what you win, there will always be
someone who has achieved more than
you. In his case, that may not be true.
AF?EJKFE<ËJG8@EKKIFG?P
JFLK?<IEJ<:K@FEJ<D@$=@E8CJ
9i\ek]fi[%%%%%%%%%'  ' :_Xickfe%%%%%%%%%%'  '
 8kk1)#./*
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9i`jkfcIfm\ij%% (  ) <o\k\i%%%%%%%%%%%%%%'  )
?fjb`ej)' 8ek_fep-,f^
8N`cc`Xdj(/
JnXccfn./ ?Xic\p/0
 8kk1*#//(
Lgjfe*( <o\k\in`e,$+feg\eXck`\j%
EFIK?<IEJ<:K@FEJ<D@$=@E8C
=c\kZ_\i/+ KiXed\i\%%%%%%%%%%'  ' ?l[[\ij]c[%%%%%% (  )
8kk1)#,0/ I_f[\j(/#-.
8kk1)#//(
KF;8PËJ;@8IP
<LIFG8C<8>L<>iflgB
C`m\igffcmLki\Z_k/%', %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
EXgfc`mJk\XlX9lZ_Xi\jk/%', %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
=@=8:clYNfic[:_Xdg`fej_`g
I\pefc[j++f^ J\d`$=`eXc
Bpc\-'g\e J\fe^eXd:_ledXm@ek\iD`cXe,gd %%%%%%%%%%%%%%%%%%%%%%%%%%%
email sport@cityam.com
 26 Sport CITYA.M. 15 DECEMBER 2010

England must go
for jugular. This
isn’t over... yet
In his exclusive Ashes column, spin king
Phil Tufnell urges KP and co not to let up

I
CAN’T think of a better Christmas
present to everyone involved in
English cricket than securing the
Ashes; it would be absolutely fan-
tastic. Victory in the third Test, which
starts in the small hours of tonight,
would guarantee we bring the urn
back to these shores, and you can be
sure that’s exactly what all of the
England team will be utterly focused
on, despite their short break and the
arrival of wives and families.
Australia are on the back foot and
what we need now is a big push to fin-
ish them off. That’s why head coach
Andy Flower has been emphasising
that there is no room at all for com-
placency. Flower has to marshall the
troops and beat the Aussies because,
simply, we are better than them.
REST WILL PROVE A BOOST
A week away from the strains of Test
cricket can work in two ways. For
Australia, it has been time to chew
over their woeful start to the series.
But for England, it has allowed them
to savour and appreciate just how
well they’ve played and the lead that
they’ve built up.
They’ll still have their momentum,
and they’ll have kept the team spirit
alive by playing golf and doing other
group activities. This is where the
backroom staff really matter; it’s
their job to keep the squad together
and focused as they gradually step up
preparation for the match in Perth.
DON’T FEAR THE WACA
England don’t have a great record at
the Waca: they’ve won there once,
and that was 32 years ago. It’ll be for-
eign to Flower’s men; The pitch is
hard, bouncy and will crack up as the
Test progresses. But none of this
should be a great concern.
England have adapted well to every
condition so far and everything is
going right for them. If they win the
toss they have to bat. The batsmen
have been racking up the runs, so we
want to be aggressive, get a big score
and keep them under pressure.
TREMLETT COULD BE NEXT STAR
Stuart Broad’s injury was very disap-
pointing but you couldn’t ask for a
more ideal replacement than Chris
Tremlett. On a fast, bouncy wicket
you want a tall, pacy bowler; the
Surrey player is 6ft 7in and delivers at
90mph – perfect. If he, as expected,
gets the nod I fancy him to play a star-
ring role in Perth. Alastair Cook,
Kevin Pietersen (right) and Graeme
Swann have all dazzled so far;
I reckon this might just
be Tremlett’s
turn.
HAPPY
FAMILIES
J i m m y
Anderson has
come in for
some criticism
for cramming in a flying
visit back home to see his sec-
ond child being born in
between the second and third
Tests. It didn’t happen in my
day but I am behind him: if
he wants to do that and it
falls at a convenient time,
which it did, then he’s enti-
tled to do so.
Far from being affected
badly, Anderson will proba-
bly now have an extra
spring in his step after such
a happy occasion. The trav-
el may tire him a bit but
overall I think he’ll be rejuvenated by
the experience. For me it’s also up to
the individual whether they want
their family to join them out there, as
many have this week. As long as cou-
ples don’t break off from the group, it
can actually make the squad a
stronger unit.
AUSSIES IN DISARRAY
Of course it’s nice to see Australia get
a taste of their own medicine. Not in
a malicious or vindictive way, just
because it’s a joy to see England play-
ing such brilliant cricket.
The Aussies are going through a
hard time and need to look around
for where the next Warne or Ponting
is coming from. England have
everything in place because
they’ve been working on this
team for a couple of years now.
While they have the luxury
of a settled side, Australia are
in disarray.
One minute Mitchell
Johnson’s in the side, the
next minute he’s out. It
sounds more like an
England tour.
They’ll be feeling
under huge pres-
sure, but one
thing you can be
sure of is they
will regroup,
prepare very well
and still be confi-
dent. They’ll do that
until the last ball is
bowled. Don’t think
they’re dead and buried.
Phil Tufnell is part of Paragon
Sports Management. For all
your hospitality and event
requirements please contact
Paragon on 020 83328640 or visit
www.paragonhospitality.co.uk

CRICKET TRADER OLLIE DREW HIGHLIGHTS THE BEST BETS AHEAD OF THE THIRD
ASHES TEST

Little appeal in backing struggling

Australia despite record in Perth
M
OMENTUM is with
England as the Ashes
roadshow heads west to
Perth for the third Test
of a series that has so far seen
the tourists soothe some painful
memories.
The draw in Brisbane and win
in Adelaide has given England a
huge boost and their fortunes
couldn’t be more different to
four years ago. England lost by
206 runs at the Waca on their
last visit and have only won once
and drawn three of 11 Tests on
the banks of the Swan River.
That victory was in 1978 and the
last five clashes all ended in com-
fortable home wins.
While statistics should be
respected, it must be considered
just how badly this Australia side
is struggling. So much so that
England are pre-match
favourites with most bookmak-
ers and 6/4 with Paddy Power.
Ricky Ponting’s men are best-
priced at 7/4 and while some
might argue that represents
value, the evidence points to
mounting problems. Their bat-
ting line-up is average at best
compared to yesteryear and to
describe their bowlers in the
same light would be hugely flat-
tering.
The Waca normally provides a
result and the weather is not
expected to determine the out-
come. Despite England’s record
on this ground the opportunity
to take an unassailable series
lead is real. Australia have lost
two of their last three Tests at
Perth while the Waca has lost
some of the hostile pace which
made it so feared.
Taking 20 wickets has proved
impossible for Australia so, for
spread bettors, Sporting Index’s
Volcano market could appeal. It
makes a prediction on which
side will score the most aggre-
gate runs over both innings and
buying England’s supremacy at
15 looks the way to go.
POINTERS...
Back England to win the third Test at 6/4
with Paddy Power
Buy England’s Volcano (total runs)
supremacy at 15 with Sporting Index
CITYA.M. 15 DECEMBER 2010
Tremlett looks set
to come into the
side in Perth as a
replacement for the
injured Broad
Picture: GETTY
THE ALL-ROUNDER |
CONDITIONS, STATS AND BANTER
DAY ONE FORECAST
HIGH
LOW
Bright sunshine
310
160
PITCH
Comfortably the most interesting
surface of the series to date. It’s
traditionally fast and bouncy, but
early reports suggest this track also
has a green tinge. If that’s the case,
it could muddle England’s thinking
when it comes to selecting either
Ajmal Shahzad or Chris Tremlett to
step in for Stuart Broad.
STAT OF THE DAY
No doubt you’ll be hearing a lot
about the Fremantle Doctor over
the next few days. Don’t mistake
him for England’s team physio, it’s
the afternoon sea breeze which
occurs in south west coastal areas
of Australia, and is known to assist
swing bowlers. Despite it’s useful-
ness, it shouldn’t be ignored that in
the warm-up match between
Western Australia and England, 11
wickets fell to spinners.
FIGHTING TALK
“We planned before the series that
we wanted Mitchell up and run-
ning for Brisbane and Perth. It has-
n’t all gone to plan.” Aussie
selector Greg Chappell excels at
stating the obvious.
“Somebody has to be game
enough, maybe Greg Chappell, to
tell Ricky Ponting to drop down
the order.” Daryl Foster, Western
Australia selector, says what other
shrewd observes have noticed, but
haven’t been brave enough to say.
Arshavin: no time for self pity
▲
FOOTBALL
BY JAMES GOLDMAN
ARSENAL forward Andrey Arshavin
has implored his teammates not to
dwell on Monday’s damaging defeat
at Old Trafford and quickly turn their
attention to Saturday’s visit of Stoke.
Ji-Sung Park’s solitary goal handed
Manchester United a significant edge
in the title race – Sir Alex Ferguson’s
charges now hold a two point lead
with a game in hand – and extended
Arsenal’s lacklustre record against
their main title rivals.
Despite a miserable return of one
draw and 10 defeats against United
and Chelsea from their last 11 games
in all competitions, a win over Stoke
Mancini to keep Tevez out of Juve game
▲
FOOTBALL
BY JAMES GOLDMAN
WANTAWAY Manchester City striker
Carlos Tevez returned to the club yes-
terday, but won’t travel with the rest
of the squad ahead of tomorrow’s
Europa League dead rubber against
Juventus.
The City skipper trained at the
club’s Carrington complex having
flown back from a pre-approved holi-
day in Tenerife, where he met up
at Emirates Stadium would see the
Gunners return to the summit, with
the champions and United clashing
at Stamford Bridge the following day.
With the visits of Chelsea and
Manchester City to north London also
on the horizon, Arshavin believes
Arsenal would be better served look-
ing toward the future rather than
focusing on their apparent big game
paralysis.
He said: “There is no time to be
melancholy or sad. We need to forget
this defeat and start thinking about
the next match.
“We need to prepare properly for
each opponent. The championship is
very interesting this year and nothing
has been lost yet.
with his teammates for the first time
since handing in his shock transfer
request last week.
It is understood City manager
Roberto Mancini had already taken
the decision to rest the Argen-
tina striker for the match in Turin
before the story of his desire to leave
broke.
Tevez is yet to be stripped of the
captaincy, but former City striker
Uwe Rosler believes that should be
Mancini’s first course of action.
Sport 27
Arshavin hopes
Arsenal will go
top with a win
against Stoke
Picture: GETTY
“We didn’t deserve defeat. The
match was a battle. Both teams
fought for the result and unfortu-
nately we lost. We didn’t play for a
draw. We simply acted responsibly in
defence and looked for chances.”
FIXTURES | ARSENAL’S NEXT FIVE
Defeat at Old Trafford will be forgotten if
Arsenal win their next five league games.
18 December – Stoke (h)
27 December – Chelsea (h)
29 December – Wigan (a)
1 January – Birmingham (a)
5 January – Manchester City (h)
He said: “City supporters idolise
Tevez because of the way he is playing
and the way he is leading by example
on the field.
“But we have seen the other side
when he is not living up to his respon-
sibility as club captain off the field.
“He has been making strange com-
ments about his future, about his
ambitions in football and lately hand-
ing in a transfer request.
“I would take the captaincy away
from him, 100 per cent.”
 ONS reveals 0.8% growth for Q3,
double the predicted rate.
Real amount of debt tumbles.
Gilt yields fall as markets Inflation returns to UK.
factor in the optimism.
UK debt servicing
costs fall.
Can sterling stay on
its feet? Take a position at
igindex.co.uk
The flood of money
Will George Osborne’s increases business credit
and mortgage lending.
spending cuts send sterling Will sterling
deflate?
down the tubes? Take a position at
igindex.co.uk
Bank of England steps in with
further quantitative easing.
Chance of Bank of England
using more quantitative
easing weakens.
20th October 2010 and the
full scale of George Osborne’s Does sterling
comprehensive spending strengthen?
review is revealed. Take a position at
igindex.co.uk
S&P revises UK to ‘stable’
from ‘negative’, affirms triple
Debt perceived to Will the FTSE
‘A’ credit rating. Fall in consumer
be under control. follow suit?
Take a position at confidence
Private igindex.co.uk causes retail
sector contracts sales to drop.
squeezed. Reduced tax revenue
plus increased benefit
claims inflate the UK
Will Gilt prices fall? deficit.
Take a position
at igindex.co.uk
But what’s the
reality for the FTSE?
Take a position
at igindex.co.uk
Investors fear a UK
Profits feel credit downgrade. Job loss fears prompt those
under pressure.
still employed to pay off more
As companies personal debt.
take a hit do shares
feel the blow?
Take a position at
igindex.co.uk
Predicted UK corporate Private sector layoffs add to estimated
tax revenue falls. 490,000 public sector redundancies.
Spread betting can result in losses that exceed your initial deposit.