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Issue 1,171 Wednesday 7 July 2010 www.cityam.com FREE

ROW OVER
FRANKFURT
POWER GRAB
POLITICS involved in negotiations between the A Treasury spokesperson said the
▲

BY OLIVER SHAH
A CRUNCH vote on sweeping changes
to financial regulation in Europe has
been delayed amid accusations of a
secret attempt to shift power from
London and Paris to Frankfurt.
The European Parliament has
pushed back a decision on the work-
ings of three super-watchdogs until
September after 11th-hour tweaks to
the legislation caused a furore among
member states. Amendments slipped
into the document last Thursday
include moving the headquarters of
all three super-regulators to
parliament and individual countries,
said the session had been postponed
to allow more time to thrash out how
much authority the super-watchdogs
would have. However, it is understood
the parliament will still effectively
rubber-stamp the meat of the text
today – including the push to create a
regulatory hub in Frankfurt.
Godfrey Bloom, a UK Independence
Party MEP who joint-coordinates
Brussels’ economic and monetary
affairs committee, said: “This is a fun-
damental movement of regulation
away from the UK. Europe wants to
break the power of the City of London
government opposed the European
parliament’s attempt to move the
planned banking super-regulator
from London to Frankfurt.
Andrew Tyrie, the Conservative Gerald Ronson enjoying the heights at the top of his new project Picture: GETTY
chair of the Treasury select commit-
tee, added: “Britain has massive inter-
ests in the way the City is regulated
from continental Europe. It is vital
the coalition government fights its HERON TOWER SNAPS
corner as it promised in the election.”
Syed Kamall, a Conservative MEP,
said there was still time for Britain to
negotiate the ability to veto super-reg-
UP ITS FIRST TENANT
ulators in extreme circumstances.
The spat over quiet alterations to firm is expected to complete the 46-
▲

Germany, away from Britain and
France, and giving the new entities
power to overrule their local counter-
parts such as the Financial Services
Authority or the Bank of England.
The trio of agencies will control
oversight of Europe’s banking, insur-
ance and financial instruments
industries. They have been the sub-
ject of controversy since they were
unveiled by the European
Commission (EC) last year.
Sven Giegold, a German MEP
and this is all part of that strategy.”
EC head Jose Manuel Barroso (l) has set a
January deadline for super-regulators, a move
opposed by the Treasury’s Andrew Tyrie (r)
the financial reform law will fuel con-
cerns a rushed lawmaking process
will damage the Square Mile. José
Manuel Barroso, head of the EC, has
set a tough deadline of next January
to have the system of super-regulators
up and running.
He said yesterday: “It would be very
difficult to explain to our partners in
the G20 that we who were the first to
start the process [of overhaul] cannot
be the first to complete it.”
Additional reporting: David Crow
PROPERTY
BY MARION DAKERS
HERON International has signed up
international law firm McDermott
Will & Emery as its first tenant in the
Heron Tower, a person familiar with
the situation confirmed to City A.M.
yesterday.
McDermott has agreed to pay £55
per square foot for around 40,000 sq
ft of office space on the eighth and
ninth floors of the skyscraper.
Property tycoon Gerald Ronson’s
storey tower in March 2011. It is
already the tallest building in the
City of London. Office space on the
higher floors could command even
bigger rents – some say around 10 per
cent more – once tenants are secured.
“Heron isn’t even marketing high-
er up the building at the moment.
They have only been marketing for
three months, and very discreetly,
and they are seeing considerable
interest from around the world,” said
a property source.

FTSE 100 ▲4,965.00 +141.47 DOW ▲9,743.62 +57.14 NASDAQ ▲2,093.88 +2.09 £/$ 1.52 ▲+0.01 £/¤ t 1.20 -0.01 ¤/$ ▲1.26 +0.01 Certified Distribution
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 2 News
This is a square root shaped recovery
EDITOR’S LETTER
ALLISTER HEATH
HERE are some more weird and won-
derfully expressive ways of describing
the economy over the next few years.
Yesterday, the Institute of Directors
(IoD) warned of an “L of a recovery” –
though the horizontal bit would actu-
ally boast a slight upward gradient,
denoting weak rather than zero
growth. But the IoD is also floating
the possibility of a (far more exciting)
square root shaped recovery. In this
scenario we would see an acceleration
in GDP growth in the second half of
2010, which will combine with sticky
inflation to trigger an interest rate
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Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
BARCELONA SEEKS LOAN TO HELP PAY
PLAYERS
Barcelona, the Spanish football giants
whose players will make up the bulk
of Spain’s team in Wednesday’s
World Cup semi-final against
Germany, are seeking a €150m loan to
help pay player and staff wages. The
move was announced by new
Barcelona president Sandro Rosell
who took up his post last week, on
the club’s website.
DUBAI INVESTMENT BODY SUES
FORMER MD
The investment arm of the Dubai
International Financial Centre is
suing its former managing director
for the return of $1.2m (£792,000) in
“unlawful” bonuses, according to
court documents.The allegations pro-
vide a rare insight into an official
anti-corruption campaign and
include details of the claims against
hike or a reversal of quantitative eas-
ing (QE) by the Bank of England (by
the way, the opposite of QE is QT – or
quantitative tightening, which may or
may not happen on the quiet). The
result is that GDP growth quickly lev-
els off and instead of an L the cycle
looks more like a square root symbol.
There was more evidence yesterday
that the global economy is slowing a
little – yet that the outlook is one of a
stuttering recovery (Societe Generale’s
phrase) rather than a double-dip. The
US ISM non-manufacturing index fell
to 53.8 in June, from 55.4, adding to
concerns. Of course, any reading
above 50 implies growth so there is
still a decent expansion going on.
Other countries have seen falls in sim-
ilar indices: China’s manufacturing
purchasing managers index is down
from 53.9 to 52.1. But that survey’s
long-term average for China has been
just 53.4, a rate which went hand in
hand with extraordinary expansion. A
sharp slowdown, sure, but no hard
landing yet.
AgBank’s IPO
to get $22bn
BANKING
▲
BY HARRY BANKS
AGRICULTURAL Bank of China priced
its Hong Kong and Shanghai dual list-
ing yesterday, a deal that would break
all IPO records by raising more than
$22bn when adding in over-allotment
shares.
The initial public offering (IPO),
which is raising funds to replenish
capital, still faces a tough aftermar-
ket, with a debut planned for 15 July
in Shanghai, and a day later in Hong
Kong. It has fought through a plung-
ing Chinese stock market and a Euro
zone debt crisis that has shaken other
markets across the globe.
Despite the headwinds, China’s
third largest bank by assets was able
to pull in strong demand for the IPO.
AgBank, the last of China’s big bank-
ing institutions to go public, has a
Omar bin Sulaiman, the former gov-
ernor of the DIFC, whose detention in
March caused a scandal at the tax-
free financial hub.
BORROWING COSTS INCREASE AS ECB
DRAINS CASH
Eurozone market interest rates head-
ed higher yesterday, in effect tighten-
ing monetary policy in the 16-country
bloc, as European Central Bank opera-
tions drained excess liquidity from
the financial system. The rise in bor-
rowing costs highlighted the balanc-
ing act faced by the ECB, which holds
an interest-rate setting meeting in
Frankfurt tomorrow.
SARKOZY URGED TO ACT OVER DONA-
TION CLAIM
Nicolas Sarkozy faced demands from
his UMP party on Tuesday to reshuf-
fle his embattled government urgent-
ly after a scandal implicating France’s
richest woman turned into the
biggest political crisis of his three
years in office.
As Bank of America Merrill Lynch
reminds us, the slope of the yield
curve (which shows how the interest
rate changes depending on the matu-
rity of government bonds) is the best
single indicator of recession risk. The
US yield curve has inverted ahead of
every postwar recession (ordinarily,
the interest rate on short-term bonds
is lower than on long-term bonds,
because of the extra risk and uncer-
tainty entailed with any long-term
contract; this maturity gap switches
in recessions). Even with the drop in
yields in recent weeks, the yield curve
remains extraordinarily steep and
thus is predicting a boom, not a bust.
The data is similar in most developed
economies. I’m sure we won’t be get-
ting a boom – but again, no evidence
here of a double-dip, as I’ve been argu-
ing for the past several days.
One more piece of data, courtesy of
Evolution Securities: most post-war US
recessions – including that of 2008/09
– have been preceded by profits
declines. Company profits, however,
sprawling network of branches in
China’s rural parts but also a pres-
ence in its major cities as well.
Only three years ago, AgBank was
technically insolvent, with non-per-
forming loans of around 24 per cent.
Its turnaround comes after a $30bn
bailout and bad loan carve-out.
AgBank will sell 22.24bn yuan
(£2.17bn)-denominated A-shares at
2.68 yuan apiece, after indicating a
2.52-2.68 yuan range. That means
AgBank will raise a total of $19.3bn,
but a greenshoe over-allotment
would expand proceeds to $22.2bn.
AgBank president
Zhang Yun is at the
forefront of what could
be the biggest IPO
deal ever made
WASHINGTON TIES BP’S HANDS TO
STOP SALE OF WORLD ASSETS
BP has agreed an unprecedented deal
to give the US Government the last
word on worldwide asset sales, merg-
ers or corporate restructuring in the
wake of the Deepwater Horizon oil
disaster. It has bowed to pressure
from the Department of Justice,
which has asked to be notified at
least 30 days before BP undertakes
any transaction that could affect the
future shape of the company.
FRESH WARNING TO M&S OVER
BOLLAND PAY
Marks & Spencer is facing the fresh
threat of a shareholder rebellion as
an influential pension fund consult-
ant called for a veto of its pay report
at next week’s AGM. Pirc said that it
was concerned about a £14.8m sign-
ing-on package for Marc Bolland.
rose strongly in the first quarter and
are likely to have continued to have
done so in the second, the reporting
season will confirm.
It is equally not the case that every-
one is slowing together: in a clear case
of decoupling, one country that is
enjoying an almost strange spurt is
Japan: SocGen has hiked its growth
forecast from 1.9 per cent to 2.8 per
cent in 2010 and from 1.8 per cent to
2.2 per cent in 2011. I’m no bull (in
fact, I hate the species) but the bears
are overplaying their case – unless, of
course, the Eurozone were to collapse
and make the sub-prime crisis look
like a Tea Party. Other risks include a
major geopolitical catastrophe – we
have all become too complacent about
terrorism. But barring these kinds of
events, we should all plan for 1-2 per
cent growth a year for the time being,
still low interest rates, sharply tighten-
ing fiscal policy and an increasingly
regulated credit supply. Welcome to
the new normal.
allister.heath@cityam.com
George Roberts, (l) and Henry Kravis were paid $22m last year
Huge pay for KKR chiefs
PRIVATE EQUITY
▲
BY HARRY BANKS
KOHLBERG Kravis Roberts co-
founders Henry Kravis and George
Roberts were paid about $22m
(£14.5m) last year in fee and other
income, and own about a quarter of
the private equity firm which is
about to list on the NYSE, according
to a regulatory filing.
The firm is moving closer to gain-
ing its long-sought New York Stock
Exchange listing, and yesterday it
CHINA'S PROPERTY MARKET BRACED
FOR 30PC DROP
Standard Chartered has told clients to
prepare for a fall in property prices of
up to 30 per cent in Beijing, Shanghai,
Shenzen, and other large cities in
China as the delayed effects of mone-
tary tightening begin to bite. Stephen
Green, the bank’s China economist,
said a glut of newly built homes were
hitting the market just as buyers are
restrained by higher down-payments
and curbs on speculation.
MERCEDES-BENZ TO ALLOW NIGHT
SHIFT WORKERS TO WATCH GERMANY
TAKE ON SPAIN
German car group Daimler, the owner
of Mercedes-Benz, has decided to let
workers at one of the country’s
biggest factories join the nation in the
streets and bars to watch the World
Cup semi-final. Night-shift workers
will start work later.
CITYA.M. 7 JULY 2010
NEWS | IN BRIEF
Peers quit for non-dom status
Four members of the House of Lords
have quit in protest at new “non-dom”
rules. The Conservative Lords quitting
are Lord Laidlaw, based in Monaco, Lord
McAlpine, a former party treasurer and
Lord Bagri - former London Metal
Exchange chair. Baroness Dunn, former
deputy chair of HSBC bank, has also
resigned her right to sit in the Lords. She
has been living and working in Hong
Kong since getting her peerage. New
rules force Lords to choose between
membership of the upper house and
retaining their non-dom status, which
allows them to pay no UK tax on world-
wide income. They will retain their titles.
Booz & Co ends merger talks
Management consulting firm Booz & Co
said yesterday it ended discussions with
rival A.T. Kearney for a possible merger,
saying it decided “their future aspira-
tions will be best realised as separate
partnerships.” Booz, established in 1914,
now has more than 3,300 people in 61
offices around the world. In 2008, pri-
vate equity firm Carlyle Group bought
the firm’s US government consulting
business and last month filed for an IPO.
Pictures: REUTERS
updated its filing with the US
Securities and Exchange
Commission with details of senior
executive ownership and pay.
Kravis and Roberts were also both
awarded a $70m non cash amount,
which represents how KKR accounts
for the difference in value between
what they owned before KKR became
a public company and how it is val-
ued after becoming publicly traded.
KKR is going public by buying its
Amsterdam-quoted fund and becom-
ing a Euronext-listed company.
LOCKHEED OFFERS BUYOUTS TO
EXECUTIVES
Lockheed Martin, facing what it
called a “new reality”, in which cus-
tomers have tighter budgets, said it is
offering incentives to thin out its
executive ranks in a move to lower
overhead costs. “Our customers are
facing increasing demands with con-
strained resources, and they're rely-
ing on us to give them the very best
value within these constraints," said
Bob Stevens, chairman and chief exec-
utive of the aerospace and defence
company.
MONSANTO CAN'T STOP SALE OF
PATENTED SOY, EU COURT RULES
The European Union’s top court
ruled that Monsanto cannot block
Argentine farmers from exporting to
Europe soy meal containing the com-
pany’s patented genetic modifica-
tions.
CITYA.M. 7 JULY 2010 News 3

Toscafund boss feels the pinch

as revenues and profits tumble
£15.4m. Toscafund was hit hard by In accounts, Toscafund’s directors
▲

HEDGE FUNDS
BY OLIVER SHAH
MARTIN HUGHES, the hedge fund
manager nicknamed “the rottweiler”
for his aggressive trading tactics, saw
his pay drop steeply for the second
year in a row in 2009.
Profits at Hughes’ asset manage-
ment firm, Toscafund, fell by two
thirds to £9.2m in the 12 months to
December, with revenues halving to
collapsing investor confidence during
the financial crisis and saw its asset
base fold by half to around £2.6bn as
clients pulled money out.
Although outflows have now been
stemmed, the highest paid member
last year – likely to be Hughes –
received £2.4m, 84 per cent less than
in 2008 and far below the bumper
packet of £75m handed out in the
boom year of 2007.
wrote: “[We] are satisfied with the
group’s performance in the year in
which the impact of the worldwide
financial crisis that began in 2008
continued to be felt. The performance
of the financial markets, as well as
the partnership itself, recovered dur- Martin Hughes,
ing 2009 and despite the fact a full dubbed “the rot-
recovery is still some months away, tweiler”, saw his
[we] are confident the partnership remuneration fall
has a strong future.”

Ocado warns Halifax Mortgages

investors of
We know that it’s expensive moving home or buying a house for the first time.
So, to help lower the cost of your move, at Halifax we’ve cut our product fee in
half across a number of mortgages. Just apply on or before 9th August 2010.

To find out more go online at halifax.co.uk/mortgages

Waitrose risks or call 0845 122 1511

The 284-page document draws

▲

RETAIL
BY STEVE DINNEEN
OCADO finally launched the hotly
anticipated prospectus for its £1.1bn
flotation, to a muted response from
the City.
The firm has set the price-range
between 200p and 275p a share, giv-
ing it a value of between £800m and
£1.1bn, despite never having turned a
profit.
The document contains 18 pages of
risk factors associated with the firm’s
stock, many of which focus on
Ocado’s potentially precarious rela-
tionship with its major supplier
Waitrose.
The prospectus acknowledges the
business will be in direct competition
with WaitroseDeliver, which could
eventually lead to supply problems
and conflicts of interest.
There are a number of provisions
which limit Waitrose’s ability to com-
pete with Ocado, especially in
London, which will be stripped back
from 2011. The prospectus acknowl-
edges this could have “an adverse
impact on the ability of the business
to win new and retain existing cus-
tomers”.
The contract would also be at risk if
Ocado is acquired by a rival of
Waitrose, with the firm then liable for
a £40m termination of contract fee.
attention to Ocado’s losses, totalling
£341m since its inception in 2000 and
the fact it has not yet turned a profit.
It also highlights concerns about
Ocado’s reliance on a single distribu-
tion hub and the risks associated
with building a second base, which
the firm says is vital to achieve its
growth plans.
Arden analyst Nick Bubb told City
A.M. he was surprised by the apparent
confidence of the board given the
unproven business model.
He said he expects the float to go
ahead but claimed the “big risk” is
getting beaten down on the price by
find managers. “I can see the price
being stuck at the bottom end of the
valuation,” he said.
Ambrian analyst Philip Dorgan
agreed, adding the firm’s relation-
ship with banks including Goldman
Sachs should be enough to shift the
shares on offer, which will have a
value of up to £430m. “Goldman has
a massive client base it can convince
to take up the offer,” he said. He also
said sentiment might be affected by
the £160m plus paper windfall the
founders stand to make.
Founding directors Tim Steiner and
Jason Gissing are both former
Goldman bankers and the institution
will remain a major shareholder in
the company.

RBS instructs Lazard to aid with

£3bn real estate debt sell off
RBS is working alongside Lazard to
▲

BANKING
ROYAL Bank of Scotland (RBS) is gear-
ing up to sell off £3bn of real estate
loans made during the property
boom, reports said yesterday.
The move, according to a story in
the Financial Times, is the largest
property disposal from its non-core
banking business to date and is part
of a five-year project to shed portions
of the business it cannot afford to
maintain.
develop a structure to sell the vast
portfolio of debt, according to the
newspaper, marking the first time a
UK lender has delivered a substantial
amount of loans to the market since
the crash.
The sale is part of a number of
measures it intends to make as it
attempts to offload some its debt. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
RBS declined to comment on the Terms and conditions apply. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office: The Mound,
sale and Lazard could not be reached Edinburgh EH1 1YZ. Available to homemovers, first time buyers, remortgage customers and buy to let customers. Offer available by phone,
online or in branch. We may monitor and record calls. Lines are open Monday-Friday 8am-8pm, Saturday 9am-4pm. Compliance number 10/04102
for comment last night.
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CITYA.M. 7 JULY 2010
Civil service pay-offs capped
POLITICS
▲
BY DAVID CROW
THE government escalated its stand-
off with the public sector unions yes-
terday, announcing plans to bring
forward legislation that will slash the
amount of compensation civil ser-
vants receive when they are laid off.
A new bill will cap all compulsory
redundancy payments at 12 months’
salary and all voluntary payments at
15 months – a far cry from the six
years’ worth of pay that some civil
servants are currently entitled to.
Fresh exodus
puts Osborne
on the spot
POLITICS
▲
BY DAVID CROW
A FURTHER two members of the Office
for Budget Responsibility are set to fol-
low chairman Sir Alan Budd out the
door, City A.M. has learned, leaving the
chancellor’s newly-created economic
forecasting body rudderless.
George Osborne, who set up the
independent body to lend credibility
to the government’s economic fore-
casts, is now under pressure to appoint
a strong team as soon as possible to
counter claims the office is being used
as an adjunct of government.
Yesterday, Budd announced he
would stand down in the summer,
while Geoffrey Dicks plans to return to
his job as chief economist at Novus
Capital. Graham Parker, who came out
of retirement to take up his post, will
also stand down shortly.
That will leave the three-member
body without any of its founding
members at a crucial juncture in its
genesis.
Andrew Tyrie, the chairman of the
Treasury select committee, yesterday
Early goal.
Sausage and Egg McMuffin.
Official Restaurant of the FIFA World Cup™
Served before 10:30am. Participating restaurants only. © 2010 McDonald’s.
Francis Maude, the minister for
the cabinet office, said: “Sadly the
huge deficit we inherited means
there is a real urgency now for
change. It is for this reason, and in
the light of the current deadlock,
that we have had to reluctantly start
this process today.”
The government is also changing a
law that requires it to get the backing
of unions before changing a work-
force’s terms and conditions.
That will stop PCS, the left-wing
civil servants’ union, from blocking
the legislation in the high court,
called on the government to resolve
the situation “as quickly as possible”.
“It’s extremely important to have a
strong team for a body of this poten-
tial influence. Undoubtedly a problem
has been created that must be dealt
with as quickly as possible,” he told City
A.M.
Tyrie also said it was important that
the OBR was accountable to parlia-
ment and set up on a “proper statuto-
ry basis”.
Yesterday, Treasury officials insisted
Budd’s departure was amicable and
dismissed suggestions he had left after
disagreeing with the chancellor.
Last week, after a leaked Treasury
document suggested 1.3m jobs would
be lost as a result of Osborne’s
Budget, the OBR rushed out its own
contrary forecasts a day early, leading
to suggestions it had been leant on
politically.
But sources close to Budd yesterday
insisted he was acting independently.
“It was his decision, made because he
has a particular objection to leaked
data, especially when it’s incorrect,” a
member of the OBR’s secretariat said.
®
which it did when the Labour govern-
ment tried to alter the compensation
scheme.
Yesterday, the PCS was forced to
defend its decision to block Labour’s
reforms, which were much less dra-
conian than the coalition’s. Had the
union signed up to the changes, the
new government would have been
less likely to pursue its own, more
radical reforms.
Maude is changing the law ahead
of widescale job losses in the public
sector, amid fears that the cost of pay-
offs could prove incredibly expensive.
RMT accused the DfT of putting the IEP update into the long grass
Public sector pensions
worth 40pc of salary
▲
PENSIONS
PUBLIC sector pensions are twice as
valuable as previously thought and a
lack of transparency over their true
costs has delayed reform, according
to a new report published by the
Public Sector Pensions Commission.
The Commission found that the
use of artificially high discount rates
to report unfunded liabilities and cal-
culate contribution rates appeared to
Picture: PA
News 5
lower the reported cost of provision.
It called for greater transparency of
costs and its recommendations
included a move to a reformed
defined benefit pension scheme and
raising employee contribution rates.
The Institute of Economic Affairs’
Mark Littlewood said: “It underlines
the urgent need for the government
to take action. The appalling lack of
transparency in public sector pen-
sions has exacerbated this crisis.”
DfT delays
high-speed
train update
▲
TRANSPORT
PHILIP HAMMOND, the transport sec-
retary, dealt a blow to the train indus-
try yesterday after announcing that
the Department for Transport (DfT)
would further delay updating ageing
trains in the Intercity Express
Programme (IEP).
The decision, which came on the
back of a “value for money” report by
former audit commission head Sir
Andrew Foster, stirred anger amongst
trade unions, which have called the
move “deeply concerning”.
Hammond said that a decision on
the future of the IEP will be made
during October’s spending review.
“[This] is a complex programme
which has interdependencies with
several other major rail projects, and
as expenditure on rail projects will be
re-assessed in the context of the
spending review, it would be irrespon-
sible to make a decision on IEP in iso-
lation at this time,” said Hammond
yesterday.
But RMT general secretary Bob
Crow said the review was an “excuse
to kick the Inter City replacement
programme deep into the long grass”.
He said: “We are in serious danger
of passengers being driven off the rail-
ways and onto the roads.”
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CITYA.M. 7 JULY 2010 News 7

Unite to ballot BA crew on a

fresh offer to avert strikes
years of guaranteed rises in basic that staff are being given the chance

▲
AVIATION
BY EMMA SADOWSKI
BRITISH AIRWAYS (BA) cabin crew are
to be balloted by trade union Unite on
a recent offer from the airline that
could put an end to the lengthy dis-
pute.
The union handed out a ballot yes-
terday to the crew it represents on
the latest package proposed by BA
management, which includes two
salary from February 2011 and annu-
al incremental pay increases.
Unite said that it will not make rec-
ommendations to members on how
they should vote, a move that has
been widely welcomed by BA.
“Unite have said they will give the
crew the chance to speak their own
mind with respect to the offer that’s
currently on the table from the com-
pany. I certainly think it’s positive
to express themselves in a confiden-
tial ballot,” said BA’s group treasurer
George Stinnes.
The vote could take up to two
weeks to complete, with Unite wait-
ing on the result before it decides
whether to take further strike action.
Meanwhile BA expects a decision
later this month on whether regula-
tors will allow its tie-up with Iberia
and American Airlines.

Workers clean up oily beach as tar balls reach Texas Picture: PA

US in bid for
control of BP
BP IN CRISIS
BY EMMA SADOWSKI
BP last night denied reports that it
has agreed to give the US government
final say in its business as pressure
from the Obama administration con-
tinues to heat up.
The deadline for BP to respond to
an aggressive letter by the assistant
attorney-general, Tony West, demand-
ing that the oil major provide 30 days
notice before “any planned or con-
templated events that may involve
transfers of cash or other corporate
assets outside of its ordinary course
of business”, passed last week.
But BP rejected claims that it was
caving in to the demands made by
the Department of Justice (DoJ),
which also included giving monthly
updates to the government on the
financial health of the company.
It is understood that the DoJ sent
similar letters to other parties
involved in the Deepwater Horizon
disaster.
The news comes as BP is seeking
almost $400m (£263m) from
Anadarko Petroleum and Mitsui as
Rio and Xstrata start Australian
the embattled oil major turns up the
heat on its Macondo well partners to
pay for their share of the clean-up.
Anadarko, which owns 25 per cent
of the leaking Gulf of Mexico well,
has been sent a bill for $272m, while
BP has asked Mitsui to pay $111m for
its 10 per cent stake. A spokesperson
from BP said: “Other parties may be
responsible for the costs and liabili-
ties. We expect those parties to live up
to their obligations.”
Anadarko, which earlier refused to
pay, said that it is “currently review-
ing and assessing its contractual
remedies”. It is expected that BP will
know this week whether its well part-
ners will pay.
ANALYSIS l BP
p
550 345.50
06 Jul
550
450
350
21 Apr 12 May 2 Jun 22 Jun
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power shower, nothing beats a tasty hot breakfast.
As well as our ever-popular continental style selection,
you can now enjoy scrambled eggs, crispy bacon or
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New complimentary hot breakfast.
▲

MINING
MINING giants have resumed expan-
sion plans in Australia following a
deal with the government over a new
profits tax.
Xstrata resumed A$186m (£104m)
of exploratory work in Queensland
yesterday, lifting a spending ban that
stood during negotiations over the
levy, which will now charge miners
30 per cent on some operations.
division Sam Walsh said yesterday the
firm is reopening its study into STAY YOU.™
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expanding operations at Pilbara in
Western Australia.
“We needed to resolve this subject
to get on with life,” said Walsh.
Meanwhile, BHP Billiton sent a let-
ter to shareholders saying the levy
deal was encouraging, and that for- STAY YOU.™ is a registered trademark of Six Continents Hotels, Inc.
mer BHP chairman Don Argus will co-
chair a policy transition group.
 8 News
Shop prices seen stabilising
RETAIL
▲
BY JESSICA MEAD
SHOP prices are expected to be less
volatile for the rest of the year but
January’s VAT hike to 20 per cent will
put upward pressure on inflation in
2011, the British Retail Consortium
will say today as it reveals that overall
shop price inflation slowed to 1.5 per
cent in June from 1.8 per cent in May.
Stephen Robertson, director-gener-
al of the BRC, said: “Low and stable
inflation appears likely for the rest of
the year. The fluctuations in com-
CVC looks for
€7bn for joint
Abertis bid
PROPERTY
▲
BY HARRY BANKS
SPANISH infrastructure group
Abertis’ core owners and private equi-
ty firm CVC are set to secure up to
€7bn (£5.8bn) to fund their buyout of
the firm, a source close to the opera-
tion said yesterday.
Spanish builder ACS, savings bank
La Caixa’s unit Criteria and
Luxembourg-based CVC Capital
Partners have persuaded a total of 14
banks to come up with the cash to
help them launch a full bid for
Abertis, the source said, despite the
global credit squeeze.
“The financing is going well. It
ought to close next week. The financ-
ing banks are 14 and the size is €6-7
bn. The plan foresees an equal share
among all (banks), who will all act as
bookrunner,” the source said.
Criteria and ACS, which together
control over half of Abertis, said on
Monday they might sell a large chunk
of their stakes to a three-way invest-
ment vehicle with CVC, ahead of a
NOW BOOKING
TO JANUARY 2011
‘ANDREW
LLOYD WEBBER’S
FINEST SHOW SINCE THE
ORIGINAL PHANTOM’
Charles Spencer - The Daily Telegraph
‘THE ALLURE OF THE
PHANTOM NEVER DIES’
Paul Callan - Daily Express
modity costs and exchange rates over
the last 18 months have now fed
through. Barring any major shocks,
we’re not expecting sharp move-
ments in price.”
In June, food inflation slowed to 1.7
per cent from 2.2 per cent, mostly
because fresh food such as fish and
vegetables were cheaper than a year
ago. Non-food inflation also eased to
1.4 per cent from 1.6 per cent as
items, including electricals and cloth-
ing, continue to be cheaper than they
were this time last year.
The BRC expects retailers to contin-
full bid for Abertis.
The deal comes after months of
rumours that ACS was attempting to
sell all or part of its stake in Abertis –
around 26 per cent – to finance its
plan to raise its stake in power utility
Iberdrola to 20 per cent from the 12
per cent currently.
Although the structure of any
acquisition alongside two existing
shareholders is not yet clear, CVC was
expected to need to raise up to €8bn
in debt in order to take over Abertis.
It appears the companies want
Abertis to stay listed after the bid.
ANALYSIS l Albertis
€ stock market in February 2006 after
14.33
14 6 Jul
13
12
11
12 Apr 3 May 24 May 14 Jun
ue to use widespread discounts and
promotions.
Mike Watkins, senior manager, of
retailer services at Nielsen, which
jointly conducted the survey, said
that retailers have been promoting
and price cutting to attract shoppers
into store with World Cup activity fea-
turing in many campaigns.
But the BRC says that retailers’ thin
margins means that there will be lit-
tle scope for them to absorb next
year’s VAT increase. This will put sig-
nificant pressure on inflation from
January onwards.
ECB WARNS ON ECONOMIC RECOVERY
REBALANCING the global economy and establishing new financial regulations should be
done gradually so as not to harm the economic recovery, ECB Governing Council member
Christian Noyer (above) said yesterday. Noyer said countries facing serious fiscal challenges
5 Jul should speed up the pace of fiscal consolidation.
US service sector growth
continues to slow in June
▲
WORLD ECONOMY
THE US service sector expanded in
June for a sixth straight month but
growth was at the slowest pace since
February, the latest evidence that the
economic recovery is cooling.
The Institute for Supply
Management (ISM) said its service sec-
tor index fell to 53.8 in June from 55.4
in May.
A reading above 50 shows expan-
Picture: REUTERS
loveneverdies.com | 0844 412 4651
ADELPHI THEATRE
ALBUM NOW ON SALE
CITYA.M. 7 JULY 2010
sion, while a reading below 50 shows
contraction.
The data on business activity in the
service sector follows weak reports
on consumer spending, factory activi-
ty, employment and housing.
Analysts said the data released yes-
terday by the ISM did not signal that
the United States is slipping back into
recession – something which has
been a persistent fear in the wake of a
raft of disappointing data.
Defence firm
Qinetiq plans
391 job cuts
▲
AVIATION
DEFENCE firm Qinetiq
announced plans to cut 391 jobs
has
across the country, blaming the cur-
rent “challenging business environ-
ment”.
The firm, which has around 6,500
UK staff, said it would cut about 130
jobs in Farnborough, Hampshire, and
a further 230 may be axed in Malvern,
Worcestershire. The remaining 30
cuts would be spread across its UK
business.
Yesterday trade union Prospect
slammed the cuts, saying they would
harm the UK’s defence capabilities.
It said the redundancies in the
technololgy solutions and advice
group were just the start of what is
likely to be more than 700 job cuts.
The further scale down is likely to
come when Qinetiq reviews its busi-
ness operations with the Ministry of
Defence in summer.
Qinetiq was floated on the London
being formed from the previously
state-owned Defence Evaluation and
Research Agency.
Leo Quinn, chief executive for the
company, whose main customer is
the Ministry of Defence, said he had
no choice but to make the planned
cuts and that they would help make
the company become more competi-
tive and productive.
© TM 2009 RUG LTD
 The Capitalist
10
BUSINESS IS
BOOMING
FOR TABLE
DANCE KING
TABLE-dancing mogul Stephen Less may
have made his fortune building up Secrets,
London’s largest chain of lap dancing
clubs, but he’s certainly no one-trick pony.
I hear Less has been a rather busy man
of late, broadening his horizons to
include no less than four satellite busi-
ness interests. The first – and most austere
– of the bunch is a recruitment company,
Harrington Starr, which launched a few
weeks ago, specialising in IT and run by
his son-in-law Tony Babb.
With the serious stuff out of the way,
Less is also returning to his more glam-
orous roots with a trio of forays into the
world of showbusiness. He is already well
underway with a feature film script fol-
lowing the true story of a couple in the
Sixties trying to leave Russia for a better
London
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life in the West – and isn’t short of lofty
ambitions for the project, since he tells
me he’s planning to pitch it to super-direc-
tor Steven Spielberg.
On the side is a game show for which
Less claims to have secured interest from
his “good friend Chris Tarrant”, and also a
West End musical which he is writing
despite admitting he has never played an
See London in
a different
light...
A partnership between Maggie’s and Open City
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
instrument except for “the piano with one
hand”.
“Well, Lionel Bart wrote tons of songs,
and he couldn’t play anything either,” Less
grumbles, defensively. “I’m actually very
musical.”
Turns out the club tycoon has some-
thing else in common with Bart, too – he
played the blink-and-you’ll-miss-it parts of
a policeman and a tramp in the 1968 film
version of “Oliver!”. It all makes for a
rather unusual CV, doesn’t it?
ON THE HIGH SEAS
It was off to the annual Stock Exchange
Sailing Association regatta at the week-
end, held at the Isle of Wight’s Seaview
Yacht Club.
Salty sea dogs from the likes of Brewin
Stock Exchange sailors are a competitive lot
Dolphin, Charles Stanley, JM Finn,
Rensburg Sheppards, Cheviot and King &
Shaxon all made their way down to the
island for the fun and games, though I’m
told none of them managed to get even
close to the winning team from WH
Ireland.
Skipper Nick Alexander, collecting his
eleventh trophy from the event, delivered
the sad news that this year would be his
last at the regatta, since he is retiring from
WH Ireland. Mind you, at least it opens up
the field for all the other sailors next year.
LATE SHOW
City folk well accustomed
to the trials and tribula-
tions of commuting in
on the District Line
will prick up their
ears at the news of a
new website service
which aims to make
claiming back money on late journeys as
easy as clicking a button.
The site – www.mytubewaslate.com –
says that once you’ve filled in your details,
it will automatically fill out the refund
form for you, meaning all that’s left to do
is to press the “send” button.
The stats are convincing – 147 Tube
CITYA.M. 7 JULY 2010
“With the
austere stuff
out of the
way, Less is
returning to
his glamorous
roots with a
trio of forays
into showbiz”
trains were severely delayed (by more than
15 minutes) last month alone, 37 of which
were on the dreaded District line.
And while just 19,276 refund claims
were submitted for a total of £52,000, the
Main picture: Stephen number of unmade potential claims hit
Less, the founder of 3,622,990, worth a substantial £9.73m.
Secrets, is launching a Of course, there’s a catch of sorts, in
simultaneous drive that the money refunded can’t be spent
into recruitment – and on shoes or gadgets but comes in the form
showbusiness. of Oyster top-up vouchers and travel cards.
But if you’re going to have to face the
Above right: Who morning wrath of your boss anyway, at
doesn’t want compen- least now you won’t be out of pocket.
sation for delays on
the morning com-
mute? IN THE WARS
Word reaches The Capitalist of a very lucky
Pictures: GETTY, PA, escape last week for Simon Pearson-Miles,
REUTERS the boss of City printing firm Sterling.
P-M, as the jovial chap is known, was
hurrying to a physio appointment for
treatment after a recent nasty fall, when
he stepped out into the road too fast and
was knocked down by a taxi.
No harm was done, thank heavens,
though he can rely on the incident provid-
ing even more fodder for the merciless
taunts of his unsympathetic City mates –
between whom the accident-prone nature
of P-M and his employees is a constant
source of amusement…
FREE VIEW
Grumbles all round in the world of news-
papers yesterday as an invi-
tation email was
bounced around to
hundreds of hacks con-
taining the most elemen-
tary of communications
mistakes. The sender in ques-
tion omitted to “BCC” the group
mailing list, meaning that every
email address on there was freely
available to view by all. And the organ-
isation responsible for the technological
gaffe? None other than the press team at
Google, that most respected of hi-tech
giants. These things happen even to the
best of us, it seems.
EQUITY STRIKE
A dose of World Cup doom-mongering
darkened The Capitalist’s inbox yesterday,
courtesy of Evolution Securities’ fixed
income guru Gary Jenkins.
“For the sake of the equity market,
let’s just hope that the semi finals do
not result in a Holland v Germany
final,” Jenkins warned. “That last
occurred in 1974, in which year the
Dow was down 29 per cent [and] 23
per cent after the final. The Dow is
down 7 per cent this year so far – it’s
all rather worrying…”
Still, there’s hope for our bond
expert yet – Germany’s famous
“psychic” octopus, Paul, yesterday
dampened the spirits of our
Teutonic chums by picking
Spain as the winner of tonight’s
game, choosing a tasty
mussel from a contain-
er marked with his
rival’s flag rather than
his own.
CITYA.M. 7 JULY 2010
OPEC reserves
rise 4pc thanks
to Venezuela
▲
COMMODITIES
OPEC’S proven crude oil reserves rose
four per cent in 2009 to 1.06 trillion
barrels, led by an increase in
Venezuela, the group said in its
Annual Statistical Bulletin.
The Organisation of the Petroleum
Exporting Countries also saw the
value of its petroleum sales abroad
plummet to $575bn (£380bn) in 2009
from the record $1 trillion in 2008 as
the recession hit.
OPEC’s growth in oil reserves was
mainly a result of Venezuela, whose
holdings climbed to 211bn barrels
from 172bn in 2008. Top OPEC
exporter Saudi Arabia’s reserves rose
0.2 per cent to 264.6bn barrels.
The reserves of some countries,
including Kuwait, the United Arab
Emirates and Nigeria, have not
changed for several years according to
OPEC’s report. OPEC, which groups 12
countries, pumps more than a third of
the world’s oil and straddles almost
four fifths of global proven crude oil
reserves.
Oakley Capital eyes
deals after NAV lift
PRIVATE EQUITY
▲
BY OLIVER SHAH
OAKLEY Capital, the turnaround spe-
cialist run by former Pipex
Communications boss Peter Dubens,
is eyeing two deals in the second half
after making a strong start to the year.
The company said its net asset
value (NAV) would come in at 143p to
147p for the six months to 30 June, an
increase of up to 17 per cent on its
NAV of 125p at the same point last
year. Oakley was buoyed by an upturn
in profitability from private equity
portfolio holdings such as Verivox,
the German energy and telecoms
price comparison website, and Host
Europe Corporation, the server com-
puter operator.
Dubens, who sold Pipex to rival
internet service provider Tiscali UK in
NEWS | IN BRIEF
eXpansys buys Peter Jones firms
Smartphone retailer eXpansys yesterday Walton bought £69,700 and £24,702
agreed to buy two companies controlled worth of shares respectively this week,
by its key shareholder Peter Jones, the
BBC Dragon, for £38m in a cash and
stock deal. The company said it would
fund the acquisition of SIM cards distrib- shares jumped a further 3.27 per cent
utor Data Select Network Solutions and yesterday to close the day’s trading at
online marketing services provider PJ
Media by raising £30m through a placing
of 535.7m shares at 5.6p each – a 58 per Collins Stewart adds non-exec
cent discount to its last closing price.
Rockhopper directors still bullish another non-executive director in the
Directors of star-performing oil and gas
explorer Rockhopper Exploration yester- of Hambros Bank and senior adviser to
day delivered a further vote of confi-
dence in the stock’s potential to continue Page held a number of roles at Hambros,
on its meteoric rise. Aim-listed
Rockhopper has been the darling of the
junior market recently, having risen
almost 800 per cent in value over the
past year. Executive chairman Dr Pierre
News 11
CITY VIEWS: WHERE DO YOU SEE THE CITY JOBS
MARKET HEADING? Interviews by Marion Dakers and Daniella Farsiani
DAVID HALE | QBE INSURANCE
Job market is
“I don’t think there are going to be more jobs in the
near future. Companies seem to still be making redun-
dancies, and people are just grateful they have a job at
still on the up
all. It’s people coming back in to the jobs
market, rather than moving around.” EMPLOYMENT impact of the government’s efficiency
▲
BY VICTORIA BATES savings strategy, which is likely to
leave hundreds of thousands of pub-
RECRUITMENT firms continued to see lic sector workers looking for employ-
JASON BRUNTON | FRL RECRUITMENT rising demand for workers across all ment,” said KPMG’s head of business
sectors last month, showing that the services Bernard Brown. “The big chal-
impact of the Budget spending squeeze lenge will be to transfer as many of
“It’s not great, to be honest. A lot of employers are has yet to filter through to the public these jobs as possible to the private
holding back and getting their existing staff to do multi- sector job market. sector through outsourcing and
Both permanent and temporary divestment, otherwise the economy
ple jobs rather than hiring. Normally there is a lot of staff placements grew in June, accord- will be put under enormous pressure
temporary work at this time of year, but we are ing to a monthly job report published at all levels.”
just not seeing that this time.” by accountancy firm KPMG, with KPMG’s survey also reflected a
engineering and construction record- boost for employees’ wallets, as both
ing the strongest level of demand. permanent salaries and temporary
However, the rate of growth has wage rates grew further in June. The
SUNIL BHAGWANDEEN | LLOYDS TSB eased back, with the level of perma- rate of growth was equal to that
nent staff placements now showing reported in May.
its slowest improvement since
“It feels like it’s looking up. Banks are now hiring more in January, reflecting nervousness in the Chancellor George
line with increased trading so it’s looking OK, but I don’t business world over the strength and Osborne’s spending
sustainability of the economic recov-
know if this is just short-lived. There’s a lot of migration ery and fears over the impact of the
squeeze has yet to
within companies in place of movement chancellor’s fiscal tightening policies. translate into a public
between them.” “It can now be only a matter of sector job decline
time before we will start to see the
2007, said he expected to make a cou-
ple of acquisitions in the period to
December as weaker companies begin
to struggle to finance themselves.
Dubens said: “A lot of businesses
that would have become turnaround
situations a while ago have been able
to avoid going to market because of
the lower cost of capital and lower
interest rates. Over the next two
years, as we see interest rates
increase, those businesses will find it
more challenging and we’ll see deals
being done.”
Oakley is keen on the financial
services and internet spaces, Dubens
said, remarking that while some
parts of the equity market offered
“great value”, others remained risky.
Oakley began in 2001 and launched

its private equity fund in 2007. It      
employs a team of 18 dealmakers.
 
     
   
Jungels and non-executive director Chris
     
 
after the group confirmed that it had hit
medium-grade crude oil at its Sea Lion
prospect in the Falkland Islands. The
307.75p.
Investment banking group Collins
Stewart said yesterday it had taken on
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form of Nicholas Page, a former director
private equity firm Star Capital Partners.
including as joint deputy chairman of
Hambro Group Investments and manag-
ing director of Hambro Insurance
Services. He is also a non-executive at
International Personal Finance.
 12 News
New car sales
enjoy a 20pc
surge in 2010
▲
TRANSPORT
BY STEVE DINNEEN
THE car industry continued its steady
recovery, reporting a 10.8 per cent
year-on-year rise in new registrations.
Registrations topped 195,000 in
June, the 12th successive monthly
increase. The figures were helped by a
25 per cent increase in sales in the
fleet market and large-scale orders
from businesses.
This helped to offset the end of a
scrappage scheme offering motorists
incentives to trade in older models.
Society of Motor Manufacturers
and Traders (SMMT) chief executive
Paul Everitt said: “The new car mar-
ket continued to perform above
expectations in June.
“The industry still expects chal-
lenging economic conditions in the
second half of the year, and govern-
ment action to improve access to cred-
it for consumers and businesses will
be important in sustaining the
momentum of recovery.”
The Vauxhall Astra was the best-
selling model in June, the first time it
has topped the sales chart since
February 2008.
Ford’s Fiesta model was the best-
selling car over the first half of 2010,
ahead of Ford’s Focus and the Astra.
The scrappage scheme accounted
for only a fraction of registrations
after it closed to new orders earlier
this year.
Jointly funded by the government
and the industry, the scheme offered
new motorists £2,000 to trade in cars
more than a decade old for more fuel
efficient vehicles.
Similar to schemes in other
European nations, it was designed to
shield the industry from the worst
effects of the recession.
FAST FACTS | CAR SALES
● The car industry has recorded 12 consecutive
increases in new registrations.
● The axing of a scrappage scheme designed to
encourage owners of old cars to trade for efficient
new models did not adversely hit the figures.
New car registrations
2010: 195,226
2009: 175,699
Growth in first half of year
19.9 per cent
Increase in large-scale business orders
25 per cent
A rocky road ahead for industry
AT last, there’s something Britain
does better than the Germans: sell-
ing cars. New car registrations in the
UK rose for the twelfth successive
month in June, up 10.8 per cent year-
on-year – an increase that shouldn’t
be sniffed at. The growth is less
robust than it was in the first half of
the year, when registrations climbed
19.9 per cent; but the car industry
has been pulled off its life support
machine (the scrappage scheme)
and lives to tell the tale, for a little
while longer at least.
Over in Germany, car registrations
collapsed in June, down 32 per cent
on the same month last year, with
year-to-date sales of 29 per cent. That
doesn’t bode well for the picture in
Britain, which withdrew its stimu-
lus for the industry after Germany.
Still, there’s a ray of light in the
British figures: fleet buyers rather
than private individuals are driving
the growth. Fleet sales were up 25.3
per cent while business sales were
up by 18.4 per cent (private sales
actually dipped 3.3 per cent). That
suggests business confidence is
improving, which can only be good
news for the nascent recovery.
Still, the global outlook for the big
CITYA.M. 7 JULY 2010
manufacturers is far from rosy. The
growth in car sales in China is slow-
ing, along with just about every
other economic indicator, while the
restructuring of some makers sim-
ply hasn’t been radical enough.
Hopefully business investment,
which was held back during the
recession, will keep things ticking
over in the near future. But there’s a
rocky road ahead.
david.crow@cityam.com
BOTTOMLINE
Analysis by David Crow
CITYA.M. 7 JULY 2010
Boost for Balfour share price
BUILDING
▲
BY ALAIN TOLHURST
SHARES of Balfour Beatty advanced as
much as eight per cent yesterday
after the British infrastructure giant
said its order book was growing
despite tighter infrastructure spend-
ing from governments throughout
Europe.
Balfour Beatty also reassured
investors that trading has met its
expectations so far this year. Its order
book is expected to be ahead of the
£14.1bn it reported at the end of the
FSA fines ex
Sibir chief for
market abuse
ENFORCEMENT
▲
BY VICTORIA BATES
A DAMAGING corporate ruse was
finally rumbled yesterday after the
City regulator slapped a £350,000 fine
on Henry Cameron, the former chief
executive of oil company Sibir Energy.
Last year, Sibir was embroiled in
controversy over debts owed to the
company by Russian tycoon Chalva
Tchigirinski, one of its major share-
holders. Sibir informed the market
on two separate occasions that it had
advanced $115m (£76bn) as partial
payment for real estate assets it had
purchased from Tchigirinski, though
the company later reported that the
true amount was almost triple that
amount at around $325m. The com-
pany’s shares were later suspended
from trading on the Alternative
Investment Market and were ulti-
mately cancelled in August 2009.
Cameron was suspended by Sibir in
February last year and officially dis-
missed two months later, when the
company launched High Court pro-
year. At its professional services divi-
sion, the firm said that trading was in
line with expectations and that the
integration with Heery in the US and
Balfour Beatty Management in the
UK had progressed faster than antici-
pated. At the construction services
business, tight cost control has offset
a volume decline, particularly in the
US, the firm said.
Balfour said it remains “confident”
about its outlook, even though there
are “uncertainties” in some of its
markets, particularly with regard to
government funding of infrastruc-
ceedings against him and
Tchigirinski to recoup the money
from the controversial property deals.
At the time, Sibir said it had
informed the Financial Services
Authority that it believed its shares
had been manipulated during a two-
week period the previous October.
The FSA yesterday ruled that
Cameron was “directly responsible
for this market abuse” in his position
as Sibir’s chief executive. The regula-
tor said the company had given incor-
rect figures to the market regarding
the payments, which amounted to
unsecured loans.
Cameron’s fine included a 30 per
cent settlement discount, without
which he would have been ordered to
pay £500,000.
Sibir has since been bought out by
oil giant Gazpromneft. Tchigirinsky,
who was ranked 44th on the 2008
Forbes list of Russia’s richest men, has
had to dispose of his property assets
to pay down his debts to Sibir, includ-
ing Hugh House in Eaton Square,
Belgravia.
News 13
EMC to take on Oracle
ture investment. Its shares eventually
after Greenplum buyout
closed 2.8 per cent higher at 243.1p.
ANALYSIS l Balfour Beatty equipment in January with its pur-
▲
TECHNOLOGY
p chase of Sun Microsystems.
300 243.10 HARDWARE maker EMC said yester- Greenplum sells software for data
6 Jul day it will buy Greenplum, a small warehousing computer systems that
280 software firm, taking on Oracle in large businesses use to analyse data
selling programs that help companies about business trends. The top
260 analyse business trends. providers of data warehousing soft-
Financial terms of the all-cash deal ware and hardware include Oracle,
240 were not disclosed. Teradata and International Business
Oracle, the long-time leader in the Machines.
220
database software market, entered The deal is expected to close in the
12 Apr 30 Apr 21 May 11 Jun 1 Jul EMC’s core business of selling storage third quarter, the companies said.
NEWS | IN BRIEF
London is top pick for tourists
Britain’s big industrial towns are gaining
ground on London as tourist destina-
tions for overseas visitors, according to
a survey by Visit Britain. While the capi-
tal tops the list of cities most visited by
foreigners, with nearly 15m overnight-
stay trips from overseas visitors a year,
Edinburgh took second place and
Manchester, Birmingham and Glasgow
all proved popular. Average annual fig-
ures for city visits from 2006 to last
year show Edinburgh had 1.3m
overnight-stay trips, Manchester just
under 900,000, Birmingham 737,000
and Glasgow 687,000. London was top
for holidays, with 6.65m overnight stays,
and also for business trips, which
accounted for 3.2m visits.
Countryside harder hit by crisis
Unemployment rose faster in the coun-
try than in cities during the recent
recession, according to the Commission
for Rural Communities. The report said
rural workers usually hold on to jobs
during economic downturns, while those
in town are more likely to be laid off. But
in the crisis-hit second half of last year
joblessness rose by 73 per cent to
almost 250,000 people – around five
per cent of the population. By compari-
son the unemployment level rose 39 per
cent to 1.7m in urban areas.
Staffline issues trading update
Staffline, a provider of recruitment and
outsourced HR services to industry, yes-
terday issued a half year trading update
and notice of its results. The firm said
its first half was strong, driven by new
business wins, recent acquisitions and
increased demand from existing
Former Sibir Energy chief executive Henry Cameron has agreed to a £350,000 fine clients.
14 News
Figures are looking up for new
easyJet boss Carolyn McCall
Picture: Micha Theiner/City A.M.
EasyJet says it is back on
track after battling volcano
▲
AVIATION
BY STEVE DINNEEN
INCOMING easyJet chief executive
Carolyn McCall was greeted by a 9.4
per cent year-on-year increase in pas-
sengers on the budget airline.
The figures represent the largest
monthly increase since before flights
were interrupted by the Icelandic vol-
canic ash cloud.
The airline carried 4.54m passen-
ger in June, up from 4.15m a year ago,
while its load factor – a measure of
how it fills its planes – increased 0.9
percentage points to 87.2 per cent.
A spokesman told City A.M. the air-
line has bounced back after being hit
by the volcano.
He said: “This is a very strong
record. The figures are back where we
expected them to be before things
were disrupted by the ash cloud.
“We were also given a helping hand
by passengers choosing us thanks to
disruptions at British Airways.”
Global IPOs to
continue rise,
indicates E&Y
▲
FINANCIAL SERVICES
BY ALAIN TOLHURST
A REPORT by Ernst & Young shows
global IPO activity has continued its
momentum despite current market
conditions.
The figures, which come from
E&Y’s seventh annual global IPO
report, demonstrates both in terms of
funds raised and deals completed
that the momentum created in the
first quarter has been sustained into
the second of this year.
According to the Global IPO Trends
Report 2010, global IPO activity
raised $46.1bn (£30.4bn) in the sec-
ond quarter compared with $52.6bn
in the first quarter, but the number
of deals rose from 290 to 301.
Compared with the first half of
2009, this year represented a signifi-
cant increase, with the total deals
worldwide rising from 134 to 590 and
the funds raised shooting from
$11.8bn to $98.8bn.
The UK, however, saw a slight dip
from the first to second quarter, with
the number of deals dropping from
14 to 11, and the amount raised from
GLOBAL
Q1 amount raised
$52.6bn (£34.7bn)
Q2 amount raised
$46.1bn (£30.4bn)
Difference
▼$6.5Bn (£4.3bn)
US
Q1 amount raised
$4.2bn (£2.76bn)
Q2 amount raised
$4.7bn (3.1bn)
Difference
▲$500m (£340m)
INDIA
Q1 amount raised
$1.2bn (£790m)
Q2 amount raised
$2.9bn (£1.9bn)
Difference
▲$1.7bn (£1.11bn)
CITYA.M. 7 JULY 2010
EasyJet swallowed an estimated
£75m in losses during the six-day vol-
canic ash crisis, forcing the budget
airline to revise its yearly profit fore-
casts. The Luton-based carrier said
pre-tax profits for the year are likely
to come in between £100m and
£150m, marking a drop from the
group’s estimates of up to £200m.
McCall left the Guardian to take up
the top job at easyJet at the start of
this month. She was replaced by
chief financial officer Andrew Miller.
IPO’s sliding £366m from £1.789bn to
£1.423bn, something the report puts
down to the impact of the General
Election.
Gregory K Ericksen, global vice
chair for strategic growth markets at
Ernst & Young said: “The market for
IPO’s has been challenging due to the
ongoing volatility in global stock mar-
kets on the back of the sovereign debt
crisis. However we are seeing a signif-
icant increase in the interest of the
number of companies proceeding
with a listing.”
Ericksen is confident the IPO mar-
ket will continue to grow and points
out that Asia is leading the global
recovery in the capital market, rais-
ing $25.7bn in the second quarter
and accounting for 65 per cent of the
global market, including the largest
global IPO, Samsung Life Insurance,
which raised $4.4bn in April in Korea.
The second quarter has seen a
strong showing in Europe, with
Poland launching 20 IPO’s, including
two of the largest globally, while the
continent overall accounted for 18 per
cent of the funds raised, compared
with 12 per cent from North America.
UK
Q1 amount raised
$2.72bn (£1.789bn)
Q2 amount raised
$2.16bn (£1.423bn)
Difference
▼$560m (£366m)
POLAND
Q1 amount raised
$42m (£27.6m)
Q2 amount raised
$4.1bn (£2.7bn)
Difference
▲$4.058bn (£2.672bn)
SPAIN
Q1 amount raised
$22m (£14.5m)
Q2 amount raised
$1.9bn (£1.25bn)
Difference
▲$1.878bn (£1.235bn)
CITYA.M. 7 JULY 2010 News 15

PORSCHE REVS UP FOR CHANGE AT THE TOP

Nigel Wray boosts his stake
in Alliance Pharma to 12pc
age share from 11.08 per cent to 11.26 holder with 46.6m shares, 20.17 per

▲
PHARMACEUTICAL
BY ALAIN TOLHURST
NIGEL Wray has increased his stake in
Alliance Pharma to 12 per cent
through the purchase of 1.9m shares.
Wray, the second largest sharehold-
er in the pharmaceutical company
with 27.9m shares, has been steadily
increasing his stake, buying 0.75m
shares in May and a further 0.8m last
month. He has increased his percent-
to his current level of 12.03, but the cent of the share capital.
company’s chief executive John Alliance Pharma purchased
Dawson remains the largest share- Cambridge Laboratories in February
and the deal, which adds 18 new pre-
Entrepreneur Nigel scription products to its portfolio, is
Wray was made non- expected to significantly enhance prof-
its in this financial year. Figures
exec chairman of holding released in March for 2009 results
company Southern showed a 44 per cent increase in sales
Bear in January to £31.2m and the shares have risen
from 25p to 32.75p in six months.

3 WAYS OF CELEBRATING

VOLKSWAGEN has set the wheels in motion for a management reshuffle at Porsche AG,
with 57-year-old Volkswagen production strategy chief Matthias Mueller (inset) to become
its new chief in October. He will succeed Michael Macht, who will in turn take over
Jochem Heizmann’s position as head of Volkswagen production.

Spice rejects
Cinven again L
markets around at the moment, and THE ORIGINA
▲

UTILITIES
BY OLIVER SHAH
UTILITIES services company Spice will
talk with its largest shareholders
today after knocking back an
improved takeover offer from Cinven,
the private equity house.
The FTSE 250 firm rejected a sec-
ond approach of between 62p and
65p per share, worth up to £230m, as
it revealed full-year results in line
with expectations yesterday. Spice
delivered a flat pre-tax profit of
£31.5m on an 11 per cent rise in rev-
enues to £310.7m. Pro-forma net debt
was down to £91m or 2.2 times under-
lying earnings. The market reacted
positively. Shares in Spice closed 6.5
per cent higher at 57.5p.
Geoff Allum, an analyst at Arden
Partners, described Cinven’s sweet-
ened offer as “ridiculous”. He said: “I
don’t know what they’re playing at.
This company’s in one of the best
to be offering a price at this range is
not going to bother either the board
or the investors.”
Chief executive Martin Towers told
City A.M. the conditional approach
came “with a lot of assumptions and
preconditions attached to it”, adding:
“We feel that undervalues Spice.”
Announcing his first performance
figures since taking over from
founder Simon Rigby in February,
Towers indicated Spice’s facilities
unit could be sold in a bid to further
reduce the company’s debt. It has
been under review following the dis-
posals of Spice’s telecoms and loss- WITH A STAR CAST
making gas businesses, and could OF OVER 300
fetch up to £10m. Towers described
the overhaul as “part of the process of
rebuilding credibility for Spice”.
Finance director Oliver Lightowlers
said the outfit’s profits would increas- TH E SE N SATI
G
ingly be fed into bringing borrowing D CO U N TI N O N AL N EW
below two times underlying earnings. 25 YE AR S AN PRO D U CT IO
N

Uganda gives Tullow Oil green QUEEN’S THEATRE IN CONCERT AT THE BARBICAN
light to acquire Heritage’s sites NOW BOOKING
THROUGH
22 PERFS ONLY
14 SEPT - 2 OCT
2011 3 OCT 2010 2010
“We have given Heritage and
▲

ENERGY
UGANDA yesterday gave conditional
Tullow a conditional approval for
their transaction and the condition
1.30PM AND 77.00
.0
00PPM SOLD
OUT

approval for the sale of Heritage Oil’s
assets there, paving the way for
Tullow Oil to start a $10bn (£6.6bn)
project for Uganda’s oil reserves.
Tullow and Heritage have been wait-
ing since January for Uganda’s
approval, which will see Tullow buy
Heritage’s stakes in two exploration
blocks on the shores of Lake Albert.
is... that the deal will be fully endorsed
after Heritage has deposited the 30
per cent of the capital gains tax with
the Treasury,” energy minister Hilary
Onek said. The remaining 70 per cent
would be given to the government of
www.lesmis.com
Uganda via a bank guarantee which TM © 1986 CMOL
would be redeemable upon comple-
tion of an arbitration process.
 16 Consumer News CITYA.M. 7 JULY 2010

NEWS | IN BRIEF
N Brown sales growth slows
Punch Taverns on
track as summer
Home shopping group N Brown posted a
slowdown in underlying sales growth in
its second quarter as its customers
assessed the likely impact on their
finances of the new coalition govern-
7,100
sun boosts takings
ment's policies. The firm, which targets
older and larger customers, said its like- Punch pubs in the UK
for-like sales increased 0.1 per cent in
the 18 weeks to 3 July. That compares

£3.2bn
with a rise of 3.1 per cent in the eight
weeks to 24 April. The firm, whose
brands include Simply Be, Oxendales,
Marisota and Jacamo, said trading since debt LEISURE expectations for the year.

▲
the 6 May general election had been BY JOHN DUNNE The City has forecast profits of
“subdued.” Total revenue rose 1.1 per £128.7m.
cent over the 18 week period.

Green in youth retail pledge

Billionaire retailer Sir Philip Green said
£128.7m
profit forecast for year
BRITAIN’S biggest pubs firm Punch
Taverns yesterday reported an
upturn – fuelled by the warm weather
and World Cup football fans.
Average earnings per pub in its ten-
anted estate, where pubs are run by
publicans who pay rent, were down
five per cent in first 44 weeks of the
yesterday he was considering opening The company, which has 7,100 pubs financial year.

2.7 per cent

more retail schools after the success of
London’s Fashion Retail Academy.
Speaking at the Academy’s 2010
awards ceremony, the Arcadia owner
pledged to approach the new coalition
government about the possibility of an
expansion. Green said: “My aim is to
open another two or three across the
country. That’s got to be our target.” The
in the UK, said trading had been brisk At pubs managed directly by the
in recent weeks. company, sales were down 2.7 per
However, with debts of £3.2bn, cent, an improvement on the 3.4 per
how much takings were Punch remained cautious about cent fall seen in the first 28 weeks.
down in pubs managed by future trading. The company insisted that it had
the company in the first 44 It said in a statement: “We expect continued to tackle its debt.
weeks of the year the trading outlook in the near term It reduced gross debt by £664m
to continue to be uncertain. with a series of measures, including
“The tax rises and reduction in pub- selling off pubs for a total of £263m.

Academy, which is backed by retailers
including Marks & Spencer, Next and
Tesco, has been running for five years
and this year 60 per cent of students
graduating have jobs lined up in the
retail sector.
£263m
lic spending announced in the recent
Budget will inevitably put further pres-
sure on unemployment levels, reduce
the money raised so far this disposable incomes and constrain con-
year by selling off pubs sumer confidence.”
Punch said it was “on track” to meet
Shares in Punch closed 3.3 per cent
higher at 66.7p after the company’s
statement yesterday, which said a long-
awaited upturn had arrived after dire
weather had hit the pub sector early in
the year.

PartyGaming hit by
Dedicated compliance
World Cup betting
expertise to help reduce LEISURE below the previous three months in line with the board’s expecta-
▲

BY JOHN DUNNE
your regulatory burden ONLINE gaming group
PartyGaming said the World Cup
had seen some of its punters ditch
poker for football.
The company also revealed that
it was continuing to pursue
We provide financial institutions with bespoke, takeover opportunities with a
number of parties as it reported a
practical compliance solutions two per cent decline in second
quarter revenue.
Contact Philip Chapman or Peter Carlisle on The group, which is reported to
020 7399 4980 to discuss how we can help you have held merger talks with
Austria’s bwin said the World Cup
www.complyport.com as well as the summer weather had
seen its online poker games
attracting fewer players.
Revenues at its PartyPoker card
room will be up to 13 per cent
due to the impact of the tourna- tions despite the summer weather
ment as well as warmer weather, it
said.
and the World Cup providing alter-
native attractions for gamblers.
PartyGaming chief executive Jim Market expectations for full-year
Ryan said: “Whilst progress on con- earnings before interest, tax, depre-
solidating the online gaming ciation, and amortisation are esti-
industry has been slower than mated at £89.2m.
expected, we remain committed to
playing an active role and are con- ANALYSIS l PartyGaming
tinuing to pursue opportunities 340 p
with a number of parties.” 231.50
Analysts say the online gaming 300 06 Jul
industry is ripe for consolidation and
a mooted deal between PartyGaming 260
and bwin had been seen as a poten-
tial catalyst for a wave of takeover
activity in the sector. 220
PartyGaming, which operates
the PartyPoker and PartyCasino 190
sites, said overall trading had been 21 Apr 12 May 2 Jun 22 Jun

ANALYST VIEWS: IS PARTYGAMING A GOOD BET FOR INVESTORS?

Interviews by John Dunne

GEETANJALI SHARMA | GEORGE GODBER |

“ “
EXECUTION NOBLE MATTERLEY ASSET MANAGEMENT
We continue to like PartyGaming’s mar- For PartyGaming, the US legislation is
ket position and would expect gaming revenues to the big thing because the betting market is so
start stabilising post World Cup as we had high- massive there. If the ban is lifted, as the governm-
lighted before. Overall, a messy but fair statement net realizes how much tax it can raise on betting,
from PartyGaming and we remain buyers. Poker is then the company is very well placed. It’s a cash
weakest with USD decline of 15-17 per cent. generative, strong business and the business
However, this is being compensated by Casino. model is absolutely superb. Obviously the World

” ”
Bingo and Sports performance is broadly in line Cup has produced record volumes and betting is
with expectations. becoming a very big success story.

GREG FEEHELY | ALTIUM SECURITIES

“ PartyGaming is a strong brand and I wouldn’t bet against it. It has a strong cash business and although the World
Cup hasn’t heped it will be okay. It has strategic value and would be a good takeover for bwin or other companies with an

”
interest in sports betting. I’m glad to see that it is reporting in euros now so it is much easier for investors and analysts to see
exactly what is going on. We’ll obviously have to see what happens with gaming legislation in the US, but on the whole
the company is due a bit of a bounce and is in good shape.
ROLAND RUDD IS READY.ARE YOU?
Roland Rudd, Founder of Finsbury

Roland Rudd is ready to judge entries to the inaugural

CITY A.M. Awards – the new financial business awards from the
UK’s leading, free, business daily. And, like CITY A.M. itself, all
entries are free to companies, teams and individuals working in the
financial business. Entry is online and there are 15 company
awards recognising corporate excellence and 6 awards that
celebrate the individual or team stars of the financial community.
Start thinking about your entries and nominations now.
The deadline for entries is 22 July 2010
For full details and helpful contact points please visit
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For information on becoming a sponsor of the City A.M. Awards
contact Harry Owen: 020 7015 1241/ harry.owen@cityam.com

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 18 News
BP’s mishandling of crisis adds to its troubles
compared to Exxon Mobil.
It shows us that it was the particu-
lar company, not the industry in gen-
eral, that was blamed for the disaster
that struck on 20 April. Before the
undersea explosion, BP actually
enjoyed a much more positive image
than its US rival.
BRANDINDEX
EXXON’S REPUTATION SURVIVES
STEPHAN SHAKESPEARE Since then, Exxon Mobil has only
declined a little, while the reputation
W
E return to the woeful tale of the British-based oil giant not only
of the BP brand. How has it sunk to the depths, but shows no
fared – and how has it signs of the recovery that we normal-
affected other British ly see on BrandIndex.
brands?
Graph one shows the BrandIndex MISHANDLING OF CRISIS HURTS BP
daily tracking data for BP in America, The fact that the damage to Exxon
Ryanair won’t
be put off by
court block
▲
AVIATION
that the long term financial viability
BY ALAIN TOLHURST of Aer Lingus can only be secured as
RYANAIR yesterday said an EU court part of one strong Irish airline group,
decision upholding a takeover block particularly when the rest of
would not stop them from bidding Europe’s airlines are consolidating to
for Aer Lingus again in the future. three main flag carriers, lead by Air
The airline also welcomed the deci- France, British Airways and
sion to allow it to retain its 29.8 per Lufthansa and two large low fares
cent share in Aer Lingus. carriers, Ryanair and Easyjet.
The EU Commission, the body that A statement from the company
looks after European competition, said the current merger proposal
ruled in 2007 the deal from Ryanair between Olympic and Aegean air-
to buy the former Irish state airline lines in Greece shows the need for
would make the combined carriers small regional carriers such as Aer
too dominant on many routes. Lingus need to merge or consolidate.
They then added that by blocking O’Leary added: “Unless Aer Lingus
the takeover there was no reason to finds a strong airline partner then
make the airline divest its minority we believe it is doomed to fail
shareholding in Aer Lingus as they because it can’t compete with
requested. Ryanair’s low fares, customer service
The General Court, Europe’s sec- or scale.”
ond highest court, agreed with the
conclusions of EU Competition com- Ryanair chief executive
missioner Nellie Kroes. A statement
Michael O’Leary says
from the court said the merger was
“incompatible with the common Aer Lingus will fail
market”. unless it merges with a
Ryanair’s chief executive Michael stronger airline partner
O’Leary said: “We continue to believe
CITY MOVES | WHO’S SWITCHING JOBS
Clifford Chance
The legal giant said yesterday that Simon
Tinkler has been elected leader of its London
corporate practice, for a term of four years.
Tinkler has been at Clifford Chance since
1995. A private equity expert, he has recently
advised on deals such as Duke Street’s disposal
of Simple, Sandpiper on its sale of supermar-
kets to Waitrose, and Clayton Dubilier & Rice
on its acquisition of British Car Auctions from
Montagu Private Equity.
Based in London, he replaces incum-
Bank of America Merrill Lynch bent EMEA risk boss Price Sloan, who
The investment bank has hired David will relocate to New York later in the
Oman as its new chief risk officer for year to become international opera-
the EMEA region, effective from early tional risk executive.
October. Oman joins from UBS, where he was
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
flattens out quickly while the other
continues unabated also shows us
that it’s the handling of the crisis, not
just the accident itself, that is driving
the company down.
The Britishness of the BP brand has
been much stressed in the US media –
has this affected other British brands?
First we must report, sadly, that
there are only two obviously British
brands that are big enough to be fea-
tured on the US version of
BrandIndex: British Airways, and
Virgin Atlantic.
BRITISH BRANDS HURT BY SPILL
Graph two shows how they have fared
compared to American Airlines. The
UK brands have drifted down while
Shares in embattled Connaught rise on
speculation of break up bid by Breeden
▲
PROPERTY
BY STEVE DINNEEN
SHARES in struggling social housing
group Connaught rose for a second
day yesterday on speculation it may
be a takeover target.
Breeden Capital announced it has
doubled its holding in the firm to 13
per cent, despite Connaught posting
profit warnings at the end of last
month. Since then it has lost 65 per
cent of its value and the rumour mill
suggests Breeden may seek to break
up the group.
most recently European chief risk offi-
cer and global head of counterparty
credit risk.
Union Bancaire Privée
The Swiss private bank has appointed
Larry Morgenthal as chief executive of
UBP Asset Management, the group’s
US business.
Morgenthal, who also becomes chief
investment officer of alternatives, is
tasked with spearheading activity in
the firm’s fund of hedge funds platform.
He has previously headed up Bank of
America’s alternative investment group
as well as working as managing partner
of Opus Capital Group and chief execu-
tive of Ivy Asset Management, part of
the BNY Mellon group.
CITYA.M. 7 JULY 2010
AA is higher over the period – though pond, with Exxon untouched.
admittedly, this might be chance. The only difference is that there
Meanwhile, on the UK version of has been a tiny recovery in the past
BrandIndex, we find, perhaps sur- month.
pringly, that BP has seen its image Stephan Shakespeare is founder and
plummet as severely as across the chief executive of YouGov
ANALYSIS l BrandIndex for BP ANALYSIS l BrandIndex for US versus
versus Exxon UK airlines
15
14
10
5 12
0 10
-5
-10 8
-15 6
-20 American Airlines
Exxon 4
British Airways
-25
-30 BP 2 Virgin Atlantic
-35 0
23 Apr 7 May 21 May 4 Jun 18 Jun 2 Jul 23/4/10 7/05 21/05 4/06 18/06 2/07
(l-r) Sir Roy Gardner, Connaught non exec-
utive chairman, chief executive Mark
Tincknell and Tim Ross, outgoing interim
chairman. The firm has been buoyed on
takeover speculation.
However, analysts poured cold housing sector contracts would be
water on this theory, claiming delayed.
Breeden will hold the stock.
Persistent speculation also ANALYSIS l Connaught 117.90
abounds that a private equity shark is 350 p 6 Jul
circling, with 3i thought to be eyeing
300
the prize.
The firm’s stock was up eight per 250
cent in morning trading, ending the
day up 2.26 per cent at 117.9p. 200
Breeden also owns a three per cent 150
stake in Connaught’s rival Mears.
Connaught became one of the first 100
big victims of government belt-tight- 50
ening, after it said a number of social 12 Apr 30 Apr 21 May 11 Jun 1 Jul
Edited by Victoria Bates
Franklin Templeton Investments and hedge fund clients on finance and
The investment manager has appointed derivative transactions, credit default
Andrew Ashton as a senior director and swaps, lending and borrowing arrange-
head of the firm’s operations in the cen- ments, debt and equity offerings, insol-
tral and eastern Europe, Middle East vency and restructuring and fund
and Africa region. investments.
Prior to this, Ashton was chief execu- In the past, he has also worked as an
tive and president of Franklin investment banker at Bankers Trust,
Templeton’s Korean asset management now Deutsche Bank.
business.
Ropes & Gray
Dechert The law firm has appointed Daniel
James Waddington has joined the law Martin to its bankruptcy and business
firm as a partner in the financial servic- restructuring practice as counsel.
es group. Martin was previously at Weil,
Waddington was formerly a partner Gotshal and Manges, where he advised
at Orrick, Herrington and Sutcliffe. He debtors, creditors, insolvency practi-
specialises in advising commercial and tioners and private equity sponsors on
investment banks and private equity insolvency and restructuring matters.
CITYA.M. 7 JULY 2010
HMRC gets City’s
vote of confidence
but change needed
TAX
▲
BY EMMA SADOWSKI
HM REVENUE and Customs (HMRC),
despite winning a vote of confidence
from the City still needs to make
improvements, an influential survey
published yesterday found.
After speaking to 22 of the UK’s
largest companies, information gath-
ered by law firm Norton Rose found
that their relationship with the
HMRC was broadly on the right track
but that it needed to make changes to
the way it deals with disputes.
According to 82 per cent of those
surveyed, the new system of having a
single point of contact improved
HMRC’s services, while 31 per cent
said the new risk assessment of tax-
payers positively changed the dynam-
ic of the working relationship.
But the City has criticised HMRC
Persimmon wary
despite sales rise
PROPERTY
▲
BY MARION DAKERS
HOUSE builder Persimmon report-
ed higher sales and improved debt
for the first half of the year, but
said consumer uncertainty follow-
ing the election and the emergency
Budget had dampened its outlook.
The country’s largest house
builder by market value said legal
completions on properties in the
first half increased by 16 per cent
to 4,657 homes, with the average
selling price rising by eight per
cent to £168,500.
The figures translate to annual
sales of around £1.5bn, up 13.8 per
cent year on year.
But the chief executive Mike
Farley said sales had been hit by a
Housing market confidence takes a
knock as job losses worry owners
▲
PROPERTY
CONFIDENCE in the housing mar-
ket dipped slightly last month, as
worries about interest rate rises
and job losses loomed over home-
owners, according to a survey
released yesterday.
Just over three-quarters of home-
owners believe property prices will
rise in the next six months, down
from 81 per cent who predicted
gains in April.
Around 27 per cent think it is
harder to get a mortgage now than
three months ago, while 23 per
for its approach to litigation, after 68
per cent said they felt the tax body
was unwilling to settle matters under
the current system.
The way HMRC approaches con-
tentious matters changed three years
ago in a bid to become more efficient.
An additional 23 per cent of
respondents said the change meant
that the Revenue has failed to honor
previous agreements.
Matthew Hodkin, a tax lawyer at
Norton Rose said: “There was general
recognition that the Revenue had
become more commercially sensitive,
and a number of the initiatives it has
brought in to ease its relationship
with large corporates have been posi-
tive.
“Some see [the litigation strategy]
as a tool used by HMRC to revert to
the working practices that charac-
terised it some years ago,” he added.
cautious mood in house buyers fol-
lowing the Budget on 22 June,
though this dip was in line with
expectations.
“How severely people take the
Budget, that is the fundamental
issue for us, that is something we
won’t know more about until the
autumn,” he said.
Persimmon said operating mar-
gins increased to 7.5 per cent from
1.5 per cent last year, in line with
the group’s strategy of improving
margins and lowering debt, which
fell to £122m from £494m.
Persimmon acquired 4,000 land
plots in the last six months at what
the company said were attractive
margins, and has agreed terms on
another 3,500. However, the com-
pany said it remained cautious
cent think it is easier, said 5,442
homeowners surveyed by property
website Zoopla in early June.
Scottish households were most
upbeat about the future, with 84
per cent forecasting a rise in house
prices in their area over the next
six months, while Northern
Ireland homeowners were most
pessimistic with 67 per cent pre-
dicting a jump in property values.
Respondents’ biggest concerns
for the health of the housing mar-
ket were higher interest rates,
which were cited by a quarter of
homeowners as a threat to recov-
News 19
BEST OF THE BROKERS
ANALYSIS l WM Morrison
310 p
275.00
WM MORRISON
NEWS | IN BRIEF
Lexus problem prompts recall
Collins Stewart upgrades Wm Morrison to Toyota yesterday recalled 3,238 Lexus
300 6 Jul
a “buy” with a new target price of 300p. vehicles that could be affected by a rare
290 Cites Morrison’s valuation relative to the problem with the valve operating sys-
tem. The carmaker said the valve spring
280 European food retail peer group, strength could degrade, causing it to break and
of the balance sheet and its many strategic
270 make the engine misfire or run rough. It
260
opportunities as key positives. Believes stressed there have been no accidents
shares offer good value relative to peers. related to the issue – which affects cer-
250 tain vehicles from the Lexus GS 450h,
12 Mar 30 Apr 21 May 11 Jun 1 Jul
GS 460, LS 460 and LS 600h model
ANALYSIS l Atos Origin ranges. Lexus sweetened the pill for
42 €
ATOS ORIGIN owners by offering free valve spring
32.77 S&P maintains its “sell” recommendation replacement and a complimentary car
40 6 Jul
on Atos Origin but raises its 12-month tar- for the time the car is being repaired.
38 get price from €26 to €30. Expects sales to
36 rise as well. However, S&P cuts future GeoPark finds Chile gas and oil
GeoPark has revealed new gas and oil
34 earnings per share forecasts by five per finds in the Fell block in Chile. In a
32
cent citing its cautious medium-term view drilling update yesterday, the company
on Atos’ recovering end markets. released details about the successful
30
12 Mar 30 Apr 20 May 9 Jun 29 Jun testing of the wells – Cerro Iturbe 1, the
new gas discovery, and Tetera 4, the
ANALYSIS l Pendragon PENDRAGON new oil producer. GeoPark operates and
34 p 23.50 has a 100 per cent working interest in
6 Jul Brewin Dolphin maintains its “buy” recom- the Fell block.
32
mendation and says the shares are good
30 value at their current price. Pendragon has Cape wins Abu Dhabe contract
28 impressive after sales initiatives and a Industrial services group Cape yester-
day announced it has won an $18m
26 promising outlook thanks to effective inter- (£12m) contract to provide thermal
24
net marketing, usage of empty outlets and insulation works on the Borouge phase
monthly service plans, it says. of three petrochemical projects in
22
12 Mar 30 Apr 21 May 11 Jun 1 Jul Ruwais, Abu Dhabi. The Yorkshire-based
company has been operating in Abu
To appear in Best of the Brokers email your research to notes@cityam.com Dhabi since 1979.
WIN 
| PROMOTION
Need a break from
SUPER
LEAGUE 
the World Cup?
about the future. RUGBY  Want to enjoy live
Rival builder Taylor Wimpey said
last week that sales had picked up
since a drop-off around the elec-
TICKETS rugby and music?
tion in May.
But British house price growth
has stalled, with a rise of just 0.1
T
per cent in June according to
Nationwide, while Halifax reported
HEN the Twickenham contact number to enter
a drop in prices in May. Stoop is the place to the draw.
KBC Hunt issued a “sell” note,
saying: “The first half of 2010 is be this Friday night (9th If you're not lucky enough
likely to prove to have been like the
last days of Rome for the new
July), Harlequins RL take on to win, match tickets can be
homes market...We see another the Bradford Bulls in the obtained from the Harlequins
step down after the comprehensive
spending review in late October, club's first ever Friday RL ticket hotline on
when the extent of public sector
cuts is unveiled.”
evening match (8.00pm KO). 0871 527 1315 or by going
Shares closed up 6.2 per cent at There will be a distinctive to www.league.quins.co.uk
370.2p yesterday.
summer party feel to the oc-
casion with a live steel band, For parties of 10 or
barbecue and special offers
on drinks.  Half-time enter-
more adults, there are
two extra free tickets
tainment will feature a 'Big
Dance' demonstration and
competitions, and after the
for every 10 purchased.
ery, and public sector job losses,
final whistle the party will 
which were mentioned by around resume with more live music
one in five people.
“Confidence amongst homeown- until 11.00pm.
ers remains high for the time
being, but the dip does signal a
We have 10 tickets to
directional shift as concerns are give away, simply email
building again around the outlook
for the property market,” said
win@cityam.com and your
Zoopla commercial director
Nicholas Leeming.
“The fear remains that the revival Draw closes Wednesday 7th July at midnight and the winner will be drawn at random; entrants must be
in the housing market will be aged 18 and over; hospitality, travel expenses & overnight accommodation are not included; no cash al-
derailed unless the banks make a ternative. By entering you agree to receive similar information and promotions from City AM, please add
concerted effort to increase their No if you don’t wish to receive. The Editor’s decision is final.
willingness to lend.”
 Markets&Investment
20 CITYA.M. 7 JULY 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .263.10* +6.60 314.80 216.75 Cobham . . . . . . . . . . . . . . . . . . .220.40* +6.20 278.60 173.20 ITV . . . . . . . . . . . . . . . . . . . . . . . .49.27 +0.99 71.75 31.75 Schroders . . . . . . . . . . . . . . . . .1204.00 +37.00 1450.00 764.00
3i Infrastructure . . . . . . . . . . . . . 112.00* +0.80 115.00 89.35 COLT Group . . . . . . . . . . . . . . . .127.60 +2.00 144.20 106.75 Jardine Lloyd Thompson. . . . . . .530.50 +5.50 604.50 399.00 Schroders N/V. . . . . . . . . . . . . . .989.00 +26.00 1185.00 643.50
A.B. Foods . . . . . . . . . . . . . . . . .970.50 +23.50 1045.00 752.00 Compass . . . . . . . . . . . . . . . . . .522.50* +11.00 574.50 307.75 Johnson Matthey . . . . . . . . . . .1525.00* +46.00 1814.00 1108.00 Scot. & Sthrn Energy. . . . . . . . . 1150.00 +16.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .125.50 +2.50 155.60 111.00 Cookson . . . . . . . . . . . . . . . . . . .398.80 +15.70 616.00 220.00 Kazakhmys . . . . . . . . . . . . . . . .1037.00 +69.50 1634.00 574.50 Scottish Mortgage. . . . . . . . . . . .556.00 +10.50 623.50 376.00
Admiral. . . . . . . . . . . . . . . . . . .1418.00 +20.00 1441.00 863.50 Croda Intl . . . . . . . . . . . . . . . . .1061.00 +31.00 1068.00 534.50 Kesa Electricals . . . . . . . . . . . . .127.10 +2.10 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .261.60 +8.50 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . .107.50 +1.50 137.30 81.50 CSR . . . . . . . . . . . . . . . . . . . . . .371.30 +13.40 524.00 338.75 .LQJÀVKHU . . . . . . . . . . . . . . . . . .215.20 +4.90 255.00 179.90
Afren . . . . . . . . . . . . . . . . . . . . . .85.65 +3.10 111.00 48.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .442.80* +2.70 539.00 279.00 Ladbrokes . . . . . . . . . . . . . . . . .131.00 +3.60 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .563.50 +2.00 656.50 394.30
African Barr Gold . . . . . . . . . . . .584.00 –16.50 685.00 520.50 Dana Petroleum . . . . . . . . . . . .1453.00 +10.00 1549.00 968.50 Lancashire Hldgs . . . . . . . . . . . .513.50 +12.50 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1229.00* –1.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1437.00 +19.00 1496.00 492.50 Davis Service . . . . . . . . . . . . . . .365.00 +2.00 442.30 311.25 Land Securities . . . . . . . . . . . . . .563.00* +18.00 743.50 415.25 Shaftesbury . . . . . . . . . . . . . . . .359.40 +4.90 426.50 285.25
Alliance Trust . . . . . . . . . . . . . . .302.40* +7.00 352.70 260.25 De La Rue . . . . . . . . . . . . . . . . . .943.50 –9.00 1021.00 808.50 Legal & General . . . . . . . . . . . . . .78.80 +3.20 94.40 49.37 Shire. . . . . . . . . . . . . . . . . . . . .1386.00 +36.00 1526.00 818.00
AMEC . . . . . . . . . . . . . . . . . . . . .843.50 +22.50 891.00 603.50 Debenhams . . . . . . . . . . . . . . . . .60.05 +2.85 91.95 51.95 Lloyds Banking Gp . . . . . . . . . . . .56.96 +2.19 75.58 40.42 SIG . . . . . . . . . . . . . . . . . . . . . . .103.30 +3.50 146.60 86.75
Amlin . . . . . . . . . . . . . . . . . . . . .398.70 +4.10 428.50 291.00 Derwent London . . . . . . . . . . . .1235.00 +12.00 1490.00 844.00 Logica . . . . . . . . . . . . . . . . . . . .105.80 +2.10 149.10 74.50 Smith & Nephew . . . . . . . . . . . . .587.00 +7.00 700.50 435.25
Anglo American . . . . . . . . . . . .2360.50 +105.50 3015.50 1557.50 Dexion Absolute . . . . . . . . . . . . .137.70 +0.20 148.00 117.00 London Stk Exchange . . . . . . . . .575.00 +27.00 949.50 540.50 Smiths . . . . . . . . . . . . . . . . . . .1077.00 +26.00 1186.00 677.50
Antofagasta . . . . . . . . . . . . . . . .818.50 +57.50 1100.00 561.00 Diageo . . . . . . . . . . . . . . . . . . .1048.00 +15.00 1176.00 857.00 Lonmin . . . . . . . . . . . . . . . . . . .1426.00 +66.00 2198.00 950.00 SOCO Intl . . . . . . . . . . . . . . . . . .398.30 +6.40 444.60 380.60
Aquarius Platinum . . . . . . . . . . .314.80 +13.40 490.00 172.75 Dimension Data . . . . . . . . . . . . . .93.80 +3.10 105.00 54.75 Man . . . . . . . . . . . . . . . . . . . . . .218.20* +5.50 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .762.00 +13.00 928.00 512.50
ARM Holdings . . . . . . . . . . . . . . .273.00 +2.10 362.40 116.00 Domino’s Pizza . . . . . . . . . . . . . .400.00 +7.00 401.10 202.00 Marks & Spencer. . . . . . . . . . . . .352.70* +10.80 412.70 303.75 Spirax-Sarco Eng . . . . . . . . . . .1446.00 +88.00 1591.00 809.00
Arriva . . . . . . . . . . . . . . . . . . . . .765.00 +1.50 782.50 378.50 Drax . . . . . . . . . . . . . . . . . . . . . .386.00 +5.40 496.50 321.50 Meggitt . . . . . . . . . . . . . . . . . . . .308.00 +6.20 331.00 151.75 Spirent Comms . . . . . . . . . . . . . . 112.90 +2.40 127.80 54.50
Ashmore . . . . . . . . . . . . . . . . . . .241.80 +1.60 311.20 183.25 DSG Intl . . . . . . . . . . . . . . . . . . . .26.40 +0.81 39.75 19.25 Melrose . . . . . . . . . . . . . . . . . . .214.10 +7.10 251.50 90.00
Astrazeneca . . . . . . . . . . . . . . .3143.00 +91.50 3262.00 2642.00 Dunelm . . . . . . . . . . . . . . . . . . . .335.60 +8.80 438.40 202.50 Mercantile IT . . . . . . . . . . . . . . . .882.00* +18.50 1002.00 726.00 Sports Direct Intl . . . . . . . . . . . . .109.10 +3.10 134.00 72.50
Atkins(Ws) . . . . . . . . . . . . . . . . .675.00 –9.00 747.00 532.50 Easyjet . . . . . . . . . . . . . . . . . . . .399.60 +7.60 499.90 260.00 Michael Page Intl. . . . . . . . . . . . .365.60 +6.30 461.50 218.50 SSL Intl . . . . . . . . . . . . . . . . . . . .832.50 +30.50 893.50 506.00
Autonomy Corp . . . . . . . . . . . .1832.00 +71.00 2012.00 1121.00 Edinburgh Inv Tst . . . . . . . . . . . .387.00* +8.50 412.40 298.50 Micro Focus . . . . . . . . . . . . . . . .440.70 +4.40 550.00 300.90 St James’s Place . . . . . . . . . . . . .221.00 +10.30 296.90 172.25
Aveva . . . . . . . . . . . . . . . . . . . . 1185.00* +40.00 1237.00 666.50 Electrocomponents . . . . . . . . . . . 211.20* +1.60 245.00 134.25 Millen & Copthorne . . . . . . . . . . .409.70 +14.70 496.30 227.75 Stagecoach. . . . . . . . . . . . . . . . .179.80 +3.50 204.90 123.50
Aviva . . . . . . . . . . . . . . . . . . . . .330.40 +12.70 474.00 274.75 EnQuest . . . . . . . . . . . . . . . . . . . .98.75 +1.25 112.70 87.35 Misys . . . . . . . . . . . . . . . . . . . . .235.30 +5.30 281.70 165.25 Standard Chartered . . . . . . . . . .1660.50 +52.50 1847.00 1119.00
Babcock International . . . . . . . . .620.00* –4.00 660.50 448.50 Essar Energy . . . . . . . . . . . . . . .460.00 +6.10 475.90 358.50 Mitchells & Butlers . . . . . . . . . . .288.00 +6.60 343.90 228.30 Standard Life . . . . . . . . . . . . . . .180.00 +5.10 237.00 170.00
BAE Systems . . . . . . . . . . . . . . .314.80 +5.70 389.90 294.20 Eurasian Nat Res . . . . . . . . . . . .862.50 +44.50 1276.00 632.00 MITIE . . . . . . . . . . . . . . . . . . . . .213.10* +5.10 281.70 198.70 SuperGrp . . . . . . . . . . . . . . . . . .785.00 +16.00 799.00 499.00
Balfour Beatty . . . . . . . . . . . . . . .243.10* +6.50 328.85 228.60 Euromoney Inst Inv . . . . . . . . . . .575.50* –1.00 630.00 218.25 Mondi . . . . . . . . . . . . . . . . . . . . .383.10 +15.50 488.00 187.50 TalkTalk . . . . . . . . . . . . . . . . . . . 117.70 –1.10 147.10 106.60
Barclays . . . . . . . . . . . . . . . . . . .274.60 +15.40 394.25 253.40 Experian . . . . . . . . . . . . . . . . . . .587.50* +5.00 664.50 437.50 Monks Inv Tst . . . . . . . . . . . . . . .281.20 +5.20 321.20 222.00 Talvivaara Mining . . . . . . . . . . . .384.00 +22.30 501.50 319.00
Barratt Development . . . . . . . . . . .98.90 +5.00 193.31 89.10 F&C Comm Prop . . . . . . . . . . . . . .92.25 +1.20 96.80 73.50 Morrison Wm . . . . . . . . . . . . . . .275.00 +7.90 306.30 234.75 Tate & Lyle . . . . . . . . . . . . . . . . .479.90* +10.00 509.00 284.75
BBA Aviation . . . . . . . . . . . . . . .188.30 +7.60 220.00 108.75 Ferrexpo . . . . . . . . . . . . . . . . . . .254.10 +16.30 396.20 112.00 Murray Intl Tst . . . . . . . . . . . . . . .831.50 +9.00 893.50 593.50 Taylor Wimpey . . . . . . . . . . . . . . .26.75 +1.69 54.90 24.29
Beazley. . . . . . . . . . . . . . . . . . . . 115.50 +1.80 124.80 95.25 FirstGroup . . . . . . . . . . . . . . . . .366.60 +3.30 448.80 322.75 National Express. . . . . . . . . . . . .221.30 +3.60 256.80 135.86 Telecity . . . . . . . . . . . . . . . . . . . .394.00 –3.90 455.00 298.00
Bellway. . . . . . . . . . . . . . . . . . . .597.00 +9.00 927.50 580.50 Foreign & Col Inv Tst. . . . . . . . . .263.60 +4.80 297.20 210.25 National Grid . . . . . . . . . . . . . . .490.30* +2.60 607.65 469.37
Berkeley . . . . . . . . . . . . . . . . . . .807.50 +22.00 989.50 735.00 Fresnillo . . . . . . . . . . . . . . . . . . .996.50 +46.50 1115.00 438.00 Next . . . . . . . . . . . . . . . . . . . . .2077.00 +63.00 2360.00 1500.00 Templeton Emrg Mkts . . . . . . . . .535.50* +10.00 598.00 349.50
BG . . . . . . . . . . . . . . . . . . . . . .1060.50 +22.50 1248.00 966.90 G4S . . . . . . . . . . . . . . . . . . . . . .268.60 +2.40 285.70 208.50 Northumbrian Water . . . . . . . . . .309.90 +5.90 312.00 219.90 Tesco . . . . . . . . . . . . . . . . . . . . .391.00* +1.95 454.90 347.40
BHP Billiton . . . . . . . . . . . . . . .1777.00 +92.50 2346.00 1274.50 Genesis Emerging Mkts Fd . . . . .456.00 +10.00 484.00 370.00 Old Mutual . . . . . . . . . . . . . . . . .107.10 +4.10 127.20 74.60 Thomas Cook . . . . . . . . . . . . . . .185.20 +5.40 277.20 172.30
BlackRock Mining . . . . . . . . . . . .543.50 +10.00 654.50 346.00 GKN . . . . . . . . . . . . . . . . . . . . . . 119.50 +7.40 155.00 71.75 Partygaming . . . . . . . . . . . . . . . .231.50 +10.70 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .226.70 +5.30 261.10 141.75
BlueBay . . . . . . . . . . . . . . . . . . .301.70 +15.00 393.00 188.00 GlaxoSmithKline . . . . . . . . . . . . 1123.00* +28.00 1347.00 1058.00 Pearson . . . . . . . . . . . . . . . . . . .886.00 –1.50 1069.00 574.00 Travis Perkins . . . . . . . . . . . . . . .777.00 +24.00 915.00 539.00
Booker . . . . . . . . . . . . . . . . . . . . .41.00* +0.80 49.50 33.00 Great Portland Estates . . . . . . . .282.90 +1.90 332.10 203.75 Pennon . . . . . . . . . . . . . . . . . . . .561.50 +4.50 567.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .214.80 +5.00 313.90 202.30
BP . . . . . . . . . . . . . . . . . . . . . . .345.50 +12.20 658.20 296.00 Greene King . . . . . . . . . . . . . . . .426.50 +6.60 504.00 372.50 Persimmon . . . . . . . . . . . . . . . . .370.20 +21.70 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .327.50 +13.50 436.20 261.20
Brit Insurance . . . . . . . . . . . . . . .907.00* +10.00 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .501.50* +4.70 562.50 307.00 Petrofac . . . . . . . . . . . . . . . . . . 1194.00 +30.00 1294.00 633.50 Tullow Oil . . . . . . . . . . . . . . . . .1083.00 +42.00 1375.00 834.50
British Airways . . . . . . . . . . . . . .195.40 +8.80 255.80 117.30 Halma . . . . . . . . . . . . . . . . . . . . .276.60 +5.00 284.90 184.00 Petropavlovsk . . . . . . . . . . . . . . 1192.00 +49.00 1370.00 516.50 UK Commercial Prop. . . . . . . . . . .79.60 –0.40 84.90 62.25
British Amer. Tob . . . . . . . . . . .2171.50 +46.00 2335.50 1676.00 Hammerson . . . . . . . . . . . . . . . .342.50 +6.20 460.30 277.00 Premier Farnell . . . . . . . . . . . . . .214.00 +2.90 252.60 122.25 Ultra Electronics . . . . . . . . . . . .1556.00 +28.00 1678.00 1079.00
British Empire Tst . . . . . . . . . . . .413.00 +8.90 467.90 338.50 Hargreaves Lansdown . . . . . . . .332.40 +15.00 387.00 197.25 Premier Oil . . . . . . . . . . . . . . . .1355.00 +5.00 1431.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1787.00 +51.00 2024.00 1419.00
British Land . . . . . . . . . . . . . . . .450.00 +12.30 532.00 353.00 Hays . . . . . . . . . . . . . . . . . . . . . . .91.05 +1.95 119.00 80.00 Provident Financial . . . . . . . . . . .841.00 +8.00 986.00 763.00 United Utilities . . . . . . . . . . . . . .528.00* +2.00 575.00 429.00
Britvic. . . . . . . . . . . . . . . . . . . . .493.50 +13.00 498.50 286.25 Henderson . . . . . . . . . . . . . . . . .121.90 +3.20 157.80 87.75 Prudential . . . . . . . . . . . . . . . . . .503.00 +12.70 665.00 350.25
Brown(N.) . . . . . . . . . . . . . . . . . .243.10* –11.80 284.30 204.25 Heritage Oil. . . . . . . . . . . . . . . . .414.00 +36.00 587.00 368.70 PZ Cussons . . . . . . . . . . . . . . . .342.90 –0.10 344.50 197.50 Utd Business Media . . . . . . . . . .504.00 +10.50 579.50 364.75
BSkyB . . . . . . . . . . . . . . . . . . . .695.00 +1.00 732.00 460.25 Hikma Pharma . . . . . . . . . . . . . .698.00 +10.00 730.00 430.00 Qinetiq . . . . . . . . . . . . . . . . . . . .121.70 +2.60 179.10 113.90 Vedanta Resources . . . . . . . . . .2222.00 +122.00 2967.00 1264.00
BT . . . . . . . . . . . . . . . . . . . . . . .130.20 +3.90 151.00 99.50 Hiscox . . . . . . . . . . . . . . . . . . . .347.30 +3.90 369.30 279.50 Randgold Resources. . . . . . . . .6185.00 +60.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1103.00* +24.00 1193.00 537.00
Bunzl . . . . . . . . . . . . . . . . . . . . .669.00 +11.00 784.50 503.50 Hochschild Mining . . . . . . . . . . .307.90 +10.20 370.60 220.00 Reckitt Benckiser . . . . . . . . . . . 3113.00 +76.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .140.25* +3.75 153.80 111.90
Burberry . . . . . . . . . . . . . . . . . . .769.00 +24.00 815.50 403.25 Home Retail . . . . . . . . . . . . . . . .223.00* +7.70 336.50 208.50 Reed Elsevier . . . . . . . . . . . . . . .500.50 +5.40 548.00 403.75 VT . . . . . . . . . . . . . . . . . . . . . . .795.00 — 799.00 416.00
Cable & Wire Comms . . . . . . . . . .58.45* +0.25 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2076.00* +59.00 2190.00 1336.00 Regus . . . . . . . . . . . . . . . . . . . . . .70.90 +0.15 125.50 61.00 Weir . . . . . . . . . . . . . . . . . . . . . 1115.00 +66.00 1183.00 437.50
Cable & Wire Wwide . . . . . . . . . . .86.65* +0.65 94.80 68.60 HSBC Hldgs . . . . . . . . . . . . . . . .615.90* +19.70 766.80 487.00 Rentokil Initial . . . . . . . . . . . . . . .105.40 +1.00 140.20 82.25 WH Smith . . . . . . . . . . . . . . . . . .413.80 +1.80 551.00 396.00
Cairn Energy. . . . . . . . . . . . . . . .433.90 +17.50 448.60 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .416.80 +23.80 478.30 291.70 Resolution . . . . . . . . . . . . . . . . . .69.00 +1.00 99.15 58.45 Whitbread . . . . . . . . . . . . . . . . .1388.00* +15.00 1645.00 778.50
Caledonia Invs . . . . . . . . . . . . .1600.00 +25.00 1759.00 1495.00 IG . . . . . . . . . . . . . . . . . . . . . . . .442.60 +16.70 458.20 261.25 Rexam . . . . . . . . . . . . . . . . . . . .297.30 +6.90 331.20 222.50 William Hill . . . . . . . . . . . . . . . . .173.90 +3.30 217.80 160.50
Capita . . . . . . . . . . . . . . . . . . . . .739.00 +0.50 829.50 643.50 Imagination Tech Gp . . . . . . . . . .277.00 +1.80 311.60 130.00 Rightmove . . . . . . . . . . . . . . . . .624.50 +5.50 729.00 334.00 Witan Inv Tst . . . . . . . . . . . . . . . .422.00 +6.00 487.00 329.50
Capital & Counties . . . . . . . . . . .107.50 +0.70 125.40 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .689.00 +15.50 756.50 275.25 Rio Tinto . . . . . . . . . . . . . . . . . .3049.50 +169.00 4104.00 1822.00 Wolseley . . . . . . . . . . . . . . . . . .1362.00 +32.00 1742.00 1026.00
Capital Shopping Centres . . . . . .306.30 +4.70 580.00 300.10 Imperial Tobacco. . . . . . . . . . . .1882.00 +17.00 2159.00 1564.00 RIT Capital Partners . . . . . . . . . 1179.00 +17.00 1200.00 890.00
Carillion . . . . . . . . . . . . . . . . . . .313.90 +8.60 361.90 244.00 Inchcape. . . . . . . . . . . . . . . . . . .261.80 +20.00 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . .557.00 +15.50 631.50 346.50 Wood Group (John). . . . . . . . . . .334.90 +15.60 411.70 231.25
Carnival . . . . . . . . . . . . . . . . . .2185.00 +68.00 2937.00 1574.00 Informa . . . . . . . . . . . . . . . . . . . .356.10 +9.00 439.40 216.00 Rotork . . . . . . . . . . . . . . . . . . .1310.00* +41.00 1482.00 779.50 WPP . . . . . . . . . . . . . . . . . . . . . .630.50 –1.00 744.00 380.50
Catlin . . . . . . . . . . . . . . . . . . . . .348.70 +3.90 380.50 284.75 Inmarsat . . . . . . . . . . . . . . . . . . .720.00 +9.00 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .40.91 +1.95 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . . .905.80 +54.80 1344.50 555.10
Centamin Egypt . . . . . . . . . . . . .155.30 +0.40 174.75 77.86 Intercontl Hotels . . . . . . . . . . . .1084.00 +37.00 1244.00 584.50 Royal Dutch Shell A . . . . . . . . .1670.50 +35.00 2068.50 1431.00 Yell Group. . . . . . . . . . . . . . . . . . .25.76 +0.76 86.00 21.00
Centrica . . . . . . . . . . . . . . . . . . .299.20 +5.90 320.00 212.50 Intermediate Capital . . . . . . . . . .258.30 +12.00 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1590.50 +29.50 1997.50 1437.00 LONDON TOP 250 BY MARKET CAPITALISATION
Charter Intl . . . . . . . . . . . . . . . . .633.00 +28.00 855.50 406.50 Intertek . . . . . . . . . . . . . . . . . . .1521.00 +45.00 1576.00 1024.00 RSA Insurance . . . . . . . . . . . . . .120.50 +2.10 142.00 113.10
Chemring . . . . . . . . . . . . . . . . .2992.00 +29.00 3711.00 1993.00 Intl Power . . . . . . . . . . . . . . . . . .300.70 +3.80 354.00 231.00 SABMiller . . . . . . . . . . . . . . . . .1875.00 +47.50 2090.00 1210.00 * Ex-Dividend † Suspended
Chloride Group . . . . . . . . . . . . . .372.20 +0.20 390.50 129.00 Invensys . . . . . . . . . . . . . . . . . . .255.50* +13.00 350.30 212.25 Sage . . . . . . . . . . . . . . . . . . . . . .228.10 +5.40 260.50 167.20
Close Bros . . . . . . . . . . . . . . . . .687.00 +14.00 806.50 623.00 Investec . . . . . . . . . . . . . . . . . . .444.70 +13.40 565.00 324.25 Sainsbury(J) . . . . . . . . . . . . . . . .328.20* +7.40 373.00 307.60 www.interactivedata.com

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FTSE hits one-week closing high aided Banks boost US as Dow

by miners as low prices tempt traders ends 5-day losing streak
serious knock over the past two calen- Barclays leading the sector higher, up establish new long positions.

THELONDON dar weeks, shedding 7.9 per cent, on

investor concerns over global eco-
5.9 per cent, while Royal Bank of
Scotland rose five per cent. THENEW YORK The Dow Jones industrial average
was up 57.14 points, or 0.59 per cent,

REPORT
nomic recovery.
Mining stocks dominated the FTSE
100 leader board, bouncing back after
hefty falls in the previous session.
BP rose 3.7 per cent as the British
oil major ruled out a share issue and
on persistent talk of sovereign wealth
fund interest.
REPORT at 9,743.62. The Standard & Poor’s
500 Index was up 5.48 points, or 0.54
per cent, at 1,028.06. The Nasdaq
Composite Index was up 2.09 points,

F W
IRMER miners helped push Antofagasta, Kazakhmys and Tullow Oil was another strong ALL Street rebounded or 0.10 per cent, at 2,093.88.
Britain’s top share index to a Xstrata were the best off, jumping gainer, up four per cent, as Uganda yesterday, but strong Banks stocks ended higher, with
one-week closing high yesterday between 6.4 and 7.6 per cent. gave conditional approval for the sale buying interest evapo- Bank of America up 1.6 per cent to
on improving risk appetite, French banks are likely to pass of Heritage Oil’s assets there, paving rated in the afternoon $14.06 and the KBW bank index 1.2
while signs of strength in Europe’s ongoing Europe-wide stress tests by the way for Tullow to start a $10bn as bearish sentiment reasserted per cent higher. Goldman Sachs rose
banking system lifted banks. regulators, European Central Bank project to develop Uganda's oil itself. 0.9 per cent to $132.26.
The FTSE 100 closed up 141.47 Governing Council member Christian reserves. Ending a five-day string of losses, Overall volume was tepid, with
points, or 2.9 per cent, at 4,965.00, its Noyer said yesterday, relieving some Among the mid-caps, Balfour the major indexes bounced back about 8.69bn shares traded on the
highest closing level since 28 June, concerns about the health of the sec- Beatty, Persimmon and Spirax-Sarco after the S&P 500 closed at a 10- New York Stock Exchange, the
and its biggest one-day percentage tor. Engineering rose between 2.8 and 6.5 month low on Friday, but investors American Stock Exchange and
rise since 27 May. Banks, which were weak on per cent after issuing upbeat trading used the morning’s gains as an Nasdaq, below last year’s estimated
The UK blue-chip index has taken a Monday, provided firm support, with updates. opportunity to sell rather than daily average of 9.65 bn.
CITYA.M. 7 JULY 2010 Investment | Foreign Exchange 21

THE AUSSIE
No longer safe or sound IS NOT JUST
The dollar will hold A RISK PLAY
up initially, but weak BORIS SCHLOSSBERG
data is just the start, DIRECTOR OF CURRENCY RESEARCH, GFT
writes Juliet Samuel
W
ITH the economic calendar light on
both sides of the Atlantic this week,
the most interesting event risk is tak-

W
ITH disappointing datasets com-
ing out of the US – from employ-
ment to house prices – and
equity markets looking shaky,
some analysts have started to question
whether this could be the beginning of
the end for the greenback as the world’s
“safe haven”. While such scenarios are
usually imagined to play out over five- or
10-year periods, some traders are increas-
ingly basing their long-term investments
on the dollar’s inevitable depreciation,
seeing weak US data as underlining the
ineffectiveness of quantitative easing.
Despite these dollar naysayers, the
greenback is likely to hold up in the short-
to medium-term. Even in light of the
euro’s recent rally – it rose to $1.2644 yes-
terday – the Eurozone’s troubles won’t dis-
appear quickly and there is a continuing
scarcity of “safe” currencies. The rising
price of gold is testament to the forex mar-
kets’ nervousness, with new record highs
this year at $1,249 an ounce.
The US is undoubtedly in a pitiable fis-
cal state, with gross government debt at
83.2 per cent of GDP last year and forecast
to rise to 109.7 per cent by 2015. But
depiste this, BNY Mellon’s Neil Mellor says:
“There is this delineation between funda-
mentals and what the dollar can be
expected to do by virtue of its status as a
safe haven.” Even during the post-Lehman
equity crash, for example, the dollar only
dropped temporarily against the yen and
strengthened against the euro (see chart).
For most forex traders, it is hard to
imagine that this strength won’t continue
– there is simply nowhere else to go. CMC
Markets’ Michael Hewson underlines the
point: “The US, having been a reserve cur-
rency, is always going to be a haven of last
resort. The Chinese own a cart-load of US
Treasuries so (the Fed has) got a captive
audience in terms of buyers of their
papers.” That “cart-load” is valued at
around $1trillion, meaning that even if no
one else buys US Treasury bills, China
must do so to prop up its reserves’ value.
But for Ashmore’s Jerome Booth, this
view is short-sighted. He sees the financial
crisis as a wake-up call to investors that
“there is no such thing as a risk-free asset”.
The notion of a “safe haven” is therefore
Despite Fed action, Bernanke might not be able to save the dollar as a safe haven Picture: REUTERS
hubristic. Even without the doomsday sce-
nario of a depression, he argues that the
safest bet is now not the dollar but emerg-
ing markets. Comparing the dollar to its
mean is a flawed approach in this view: “If
the structure changes over time, (it’s) not
necessarily going to come back to the
mean. The appropriate parallel is the
1930s, not the mean.” He thinks the dollar
needs to depreciate by around 30 per cent.
Of course, even if Booth is correct, the
medium- and short-term are still likely to
see flights towards the greenback as a per-
ceived cushion against risk. But the ques-
tion for traders who take Booth’s bearish
view is not if, but when in the next decade
to start selling the dollar.
ing place down under where the
Reserve Bank of Australia (RBA) just left its
benchmark rates unchanged at 4.5 per cent.
Although the RBA acknowledged that the glob-
al recovery is beginning to slow, the policymak-
ers in Sydney did not signal the end of its
tightening cycle. Instead the RBA surprised the
market by providing a relatively upbeat assess-
ment of Australian economic conditions indicat-
ing that this month’s action was merely a pause.
The RBA’s next policy move is likely to be dic-
tated by the strength of the labour market and
the extent of the inflationary pressures perco-
lating in the system. To that end, tonight’s
employment report and the CPI data due on 28
July will be key factors in determining the likeli-
hood of further rate increases for the rest of
2010. Given the persistent rise in inflation
expectations and the pickup in the employment
subcomponent of the latest Services PMI
report, there is some evidence that both data
points will surprise to the upside, eliciting a
more hawkish posture from the RBA.
Still, even with supportive economic data on
the domestic front, demand from China will
remain the most important driver of Australian
monetary policy going forward. If Chinese
growth begins to cool markedly over the next
several months, the RBA is likely to err on the
side of caution even if inflationary pressures
continue to persist.
Growth however, is just one part of the story.
The Aussie remains one of the most attractive
G-20 currencies on a balance sheet basis. With
a positive trade balance for the past two
months in a row, a plan to return to a budget
surplus by 2012 and the highest yield in the G-
ANALYSIS l The dollar has so far held up in 20 universe the Aussie may no longer be just a
recent volatile times play on risk. In contrast to the Herculean fiscal
20% problems facing the Eurozone and US,
Australia’s well managed economy stands as an
example of financial probity in the industrialized
0%
world and may now start to attract investors
looking for safety instead of merely speculators
20% seeking yield.
40%
USDJPY
USDEUR
S&P 500
60%
Jan 06 Jan 07 Jan 08 Jan 09 Jan 10

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 22 Investment | Foreign Exchange CITYA.M. 7 JULY 2010

Expect long-run
zloty strength
Eventually, the euro’s ern European currencies, and vice versa.
This peculiarity stems from the fact that in
neighbours will rise, bad times it is often perceived risk, rather
than hard realities, that drive currency
writes Juliet Samuel fluctuations. And so, perversely, the risks to
growth posed by Eurozone sovereign debt
crises actually make forex traders even
more nervous about the euro’s smaller eco-

T
HE euro has gained ground in the
last week, but with fears of a double
dip returning and doubts raging
about the rigor of the EU’s banking
stress tests, the rally seems unlikely to last.
So if the euro does fall back against most
major currencies, what does this mean for
eastern European forex?
Intuitive wisdom might suggest that
when the euro drops against the yen and
dollar, it would similarly fall against its
eastern neighbours, the most easily trad-
able of which are the Polish zloty, the
Hungarian forint, the Czech koruna and
the Romanian leu. After all, investors on
the eastern side of the continent have to
put their money somewhere.
But history suggests that the correlation
is in fact entirely in the opposite direction:
when the euro plummets against the dol-
lar and the yen, it actually rises against east-
ANALYSIS l Polish Zloty strength roughly correlates with US equities
3.0
PLN weakens vs
EUR, S&P 500falls
3.5
4.0
4.5
Zloty per EUR (lav’d, LHS)
5.0 S&P 500 (RHS)
5.5
2004 2005 2006 2007
nomic neighbours than it makes them anx-
ious about the Eurozone itself. If investors
are unwilling to take a punt on the euro,
they become ever more unwilling to bet on
the leu.
Given the likelihood of ongoing euro
weakness against supposedly “safe haven”
currencies, traders should therefore antici-
pate euro strength vis-a-vis the leu or forint.
But Capital Economics’ Neil Shearing
stresses that this correlation is not the only
reason why eastern European currencies
will weaken. More fundamentally, anaemic
global growth will hit their exports as they,
like developed economies, struggle with
deficit problems. Societe Generale’s Gaelle
Blanchard adds: “If the Eurozone countries
slow down it’s not good for the Czech
Republic, which is a good exporter. In
Poland, there is strong domestic demand
and they suffer less if trade weakens, but
1,800
1,600
1,400
1,200
1,000
800
600
Source: Bloomberg, Capital Economics
400
2008 2009 2010
Warsaw will see still they need to export right now.”
growth in the long- But although these currencies often
run. move together in relation to the euro, there
are some fundamental differences among
Picture: REUTERS them. On the one hand, there is Hungary
and Romania, both on IMF-mandated pro-
grammes to control their debt and forecast
to have negative or below 1 per cent GDP
growth until 2012. Hungary also has the
worst debt-to-GDP ratio in the region at
close to 80 per cent, and though Romania’s
public debt is relatively low at 35.5 per cent,
its deficit is forecast to swell to 5.55 per cent
of GDP this year.
Poland and the Czech Republic are in dif-
ferent situations. While they are certainly
still exposed to the Eurozone crisis, they
have manageable – if high – public debt-to-
GDP ratios, and governments with man-
dates to take tough action on their deficits
(although this could change in next year’s
Polish parliamentary election). Shearing
also highlights that the zloty alone bucks
the regional currency norm of overvalua-
tion in relation to its 10-year average.
So while the short-term should see most
eastern European currencies weaken
against the euro, this could provide a good
buying opportunity for investors to take
advantage of likely long-term strength in
the zloty and Czech koruna. Societe
Generale expects to see the zloty rise to
around 3.80 versus the euro by the end of
the year (versus 4.10 now), while it forecasts
the koruna strengthening to 26.5 (from
25.5 now).
The outlook for the forint and the leu
remains less certain, but if both govern-
ments are able to stick to their IMF pro-
grammes, there is potential for very
gradual appreciation. Nonetheless, asked
which eastern European country’s curren-
cy they would buy, most analysts single out
Poland without hesitation. It might not be
viewed with as much confidence as its
namesake “zloto” – Polish for gold – but as
a long-term investment, the zloty looks like
a good bet.

FOREX ANALYST PICKS

CURRENCY STRATEGIST CURRENCY STRATEGIST CURRENCY STRATEGIST
DAVID RODRIGUEZ JOHN KICKLIGHTER ILYA SPIVAK

My pick: Short Aussie dollar-US dollar below $0.8900
Expertise: Algorithmic trading
Average time frame of trades: 2-10 weeks
I am a market bear, and believe that the S&P 500 still has further
to fall. In line with this view, I remain bearish commodity curren-
cies, especially the Australian dollar, because they tend to be
extremely risk sensitive. Due to this I think that the Australian dol-
lar will fall against the safe-haven US dollar. There is a resistance
level at $0.8900, which is where I would like to go short. I will tar-
get $0.81 as a minimum.
My pick: Short S&P 500 at 1,050 and short euro-US dollar below
$1.2500
Expertise: Fundamental and technical analysis with risk management
An unusual break between a sharp drop in risk appetite and a rally in
the euro this past week was unexpected, since the euro typically fol-
lows equity markets lower. Even so, I am looking for the euro/risk
trade to resume. I am looking to sell the S&P 500 at 1,050, with a
stop at 1,075. I will target 925. Coupled with this, I expect the euro to
fall and will short the euro against the US dollar below $1.25. I will put
in place a stop at $1.2650, and I will target $1.19.
My pick: Short euro-US dollar (pending market movement)
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
Euro-dollar looks to be putting in a head-and-shoulders bottom chart
formation. This will be confirmed on daily close at $1.2570, whcih is the
38.2 per cent Fibonacci retracement of the December to July down-
swing. Initial upside targets are seen at $1.2785 and $1.30, the 50 per
cent and 61.8 per cent retracement levels, respectively. On balance, my
long term bias for the pair remains bearish, and I look for any periods of
euro strength as good selling opportunities for the future.
CITYA.M. 7 JULY 2010
The new safe havens
Commodity currencies look well
placed to outperform for the rest of
the year, writes Kathleen Brooks
S
IGNS pointing to a slowdown in
global growth make life slightly
trickier for forex traders since cur-
rencies tend to appreciate if the
domestic growth outlook is good. In
among all of this economic uncertainty,
the job of the forex trader is to sniff out
where growth is most likely to be found.
Countries that don’t have to imple-
ment austerity budgets in the coming
years are a good place to start.
Commodity exporters such as Norway,
Canada and Australia all have relatively
strong public finances compared to the
US, Europe and the UK, and don’t require
years of slimmed-down public budgets.
This has led analysts at Societe
Generale to call the commodity curren-
cies the new “safe havens”, which is typi-
cally attributed to the US dollar, Japanese
yen and the Swiss franc.
But for this to happen, currency mar-
ket convention would have to turn on its
head. Traditionally the Aussie dollar,
Canadian dollar and the Norwegian
krone move in line with equity markets
because their countries’ fortunes are
tightly connected to the prospects for
global economic growth. This would sug-
gest that commodity currencies should
be on the back foot. Indeed, the Aussie
dollar has fallen 7 per cent against the US
dollar since the period of market turbu-
lence began in April. However, this
equates to only half of the 14 per cent fall
THE TIPSTER
THE EURO IS
UNLIKELY TO
MAINTAIN
ITS UP TREND
A
FTER hitting twenty month lows last
week at £0.8067 euro-sterling has
bounced nearly 300 pips to £0.8335. It
broke the 20-day simple moving aver-
age on Monday along with a four-month
resistance line yesterday at £0.8280. Look for
support around this level, which could thwart
further euro gains. Resistance should come in
around £0.8385, the June high. Spread Co
offers a spread on euro-sterling of £0.8338-
£0.8340.
Investment | Foreign Exchange
RBA governor Glenn
Stevens
Picture: GETTY
for the S&P 500 index over the same time
period.
Does this suggest that commodity cur-
rencies are no longer as aligned with
risky assets? Analysts at Societe Generale
note: “even as double-dip recession fears
grip global markets, (the commodity) cur-
rencies have held up well”. The commodi-
ties boom since March last year has
helped to boost government coffers in
Australia, Canada and Norway, which
have helped to immunise them from sov-
ereign debt problems. So even though
commodity markets have come off – the
Reuters/ Jefferies CRB commodities index
has fallen 9 per cent since April – these
countries are still in good economic
shape.
But before another climb higher, com-
modity currencies could take a breather,
says Currencies Direct’s Mark O’Sullivan:
“If you have had long positions in the
Aussie or the Canadian dollars in recent
months then you’ve had a fantastic run,
so now might be a sensible time for some
profit taking.” He adds that the interest
rate differential has added fuel to com-
modity currency appreciation – ing for sovereigns and financial institutions,
Australia, Norway and Canada have all
raised interest rates this year and rates
are 4.5 per cent, 2 per cent and 0.5 per
cent respectively, compared to 0-0.25 per
cent in the US. In the absence of a severe
slowdown in China, this yield differential
should particularly help the Aussie to
appreciate even if China’s growth
machine slows later this year.
So while analysts come up with
acronyms to describe the new normal of
sluggish growth rates in the west, curren-
cy markets have their own “new normal”
to contend with: commodity currencies
that trade like safe havens.
Cable has enjoyed a tremendous rally from
lows reached prior to the Budget. But for the
second time since Friday though, it has hit the
$1.5230 area and met strong resistance. For
example, yesterday cable dropped 50 pips in
about thirty minutes. Support should come in
around $1.5110, so look to trade the edges of
this range. Spread Co offers a spread on ster-
ling-dollar of $1.5181-$1.5184.
The Aussie dollar moved higher yesterday
even after the central bank left interest rates
on hold. This created a bullish engulfing can-
dle stick pattern. This could lead to further
strength in the days and weeks ahead.
Capital Spreads quotes $0.8545-$0.8548 for
Aussie dollar-US dollar.
Euro-US dollar has pushed towards its high-
est levels in weeks, however fears over
European bank stress tests are likely to cap
any upside with resistance around the
$1.2700 area. Look to sell on rallies CMC
Markets’ spread is $1.2600-$1.2602.
Kathleen Brooks
MARKETS | Government Debt
FOCUS TURNS
TO EU FUNDING
PROBLEMS
GEORGE TCHETVERTAKOV
HEAD OF MARKET RESEARCH, ALPARI
O
VER the past three months, confi-
dence in a global economic recovery
has waned and volatility has risen
spectacularly in May. And as we enter
the second half of 2010, most asset classes
are severely underperforming consensus
estimates made at the beginning of the year.
Libor (the London inter-bank offered rate)
have spiked higher, equities have weakened
across the world and US Treasuries have
benefited from strong safe-haven demand.
Yields on the two-year Treasury note have
now fallen below their 2009 lows.
On the whole, fixed income markets have
outperformed equities throughout the first
half of the year while commodities have
broadly weakened. But the stand-out per-
former so far this year has been gold, which
reached a lifetime high of of $1,265 per troy
ounce in mid-June indicating a strong ele-
ment of risk-aversion still present in today’s
post-crisis marketplace.
The European sovereign debt crisis has
overshadowed global financial markets over
the past quarter and a crucial side effect of
European over-indebtedness has been to
push the normally conservative European
Central Bank (ECB) into embarking on a
path of Anglo-Saxon market resuscitation.
Peripheral countries such as Portugal,
Greece, Ireland and Spain have been able to
find adequate funding since the emergence
of the sovereign debt crisis but at the cost
of being increasingly reliant on the ECB for
capital. This is hurting investor confidence
about the viability of non-core Euro mem-
bers skewing investment decisions and pre-
venting a broad recovery in the EU.
One of the major themes over the next
two to three months will be European fund-
which will face substantial difficulties this
month despite the combination of the
recent €750bn stabilisation fund, exten-
sions in ECB lending facilities and even full-
blown quantitative easing (QE). The latter is
a policy tool that, by their own admission,
gave ECB members nightmares when the
US and the UK implemented similar policy
responses in 2009.
The funding requirement for European
sovereigns and financials is heavier in June
and July 2010 than in any other two-month
period for the next two years. This leaves
the door open for distressed auctions, fund-
ing issues, deleveraging, duration mismatch
and bouts of quasi-panic, pointing to
strength in the buck, the yen and the franc.
Euro bears are adamant that a funding
crisis is ongoing in the Eurozone and that
23
the debt burden faced by many European
countries is far too large for desperate
budget cuts to alleviate. This may have an
element of truth over the mid-to-long-term
if the proposed fiscal austerity measures
are not implemented efficiently. But in the
short-term, if there was a true funding cri-
sis then we would have seen European
banks bid aggressively for US dollar funding
given the greenback’s relative cheapness.
What’s more, we should also have seen a
strong rise in the repatriation of existing
dollar-denominated assets and capital. Yet
neither of these have occurred so far, in
contrast to the 2008 financial crisis.
The huge liquidity and government sup-
port measures that have been put in place
by most G20 countries over the past year
have helped to raise confidence, business
activity and trade. But the reality is that as
the near-term outlook becomes clearer
thanks to government and central bank
support, the long-term becomes more blur-
ry because of the inevitable problems that
will arise when central bankers decide to
unwind their immense liquidity provisions
and governments cut into inflated budget
deficits. We are already seeing a raft of fis-
cal adjustment in the US, the UK and main-
land Europe – other territories are certain
to follow if only to hide away from specula-
tors looking for the next weak spot.
In the currency space over the next six
months, we expect weakness in commodi-
ty-linked currencies to abate. The Swiss
franc, the Japanese yen and the pound had
been the top performers against the major
currencies over the second quarter while
the euro posted gains against both the
Australian dollar and the Canadian dollar.
Moves away from cyclical currencies such
as the Aussie, the Canadian dollar and the
Kiwi dollar into the greenback, the yen and
the Swissie should diminish if fiscal austeri-
ty is implemented rather than simply
announced and if the Chinese yuan is
allowed to appreciate against the dollar by
the Chinese central bank.
Emerging market currencies such as the
Brazilian real and the Indian rupee are in a
good position to benefit from foreign capi-
tal flows over the next 12 months because
of increasing worries about inflation and
excessive growth. Monetary policy in
emerging markets is more concerned about
inflation rather than fiscal imbalance or
funding problems at domestic banks. This
points to a widening yield differentials
between rapidly expanding countries in the
emerging markets and the developed world.
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 24 Investment | Fund Management
WHY DEFENCE
IS BETTER
THAN OFFENCE
DICK TURPIN
MANAGING DIRECTOR, ARTEMIS
C
OMMENTING on a complaint last week
from a Mr Arthur Purdey about a large gas
bill, a spokesman for the gas company said:
“We agree it was rather high for this time
of year. It is possible Mr Purdey has been charged
for the gas used up during the explosion that
destroyed his house.” With the FTSE 100 now
down some 10 per cent year-to-date as I write
and as volatile as gas, investors know how Mr
Purdey feels.
The key Baltic Dry Index, which measures
freight rates for bulk goods, has dropped by 46
per cent since its peak in May this year – and
has collapsed by 80 per cent from its all-time
high posted back in May 2008. Alarmed about a
slow-down in China, sovereign debt issues in
Europe, weak US data that casts doubt on eco-
nomic recovery, the meaning of life, everything
and anything, investors sense explosion as,
through higher taxes and tighter credit, they
even have to pay for their own pyres.
It is certainly ominous that negative real
interest rates, quantitative easing and $800bn
from the EU/IMF to bail out peripheral
European countries should have delivered so lit-
tle. Once it seemed that governments could sim-
ply conjure away the Great Debt. But such
supposed acts are, of course, mere illusions.
Consider the reality in Britain alone. UK banks
and building societies wrote off £9.6bn of loans
to individuals in the last 12 months. In the first
quarter of 2010 alone, they wrote off £2.13bn.
£1.25bn of that was credit card debt. And that’s
before we turn to the real culprit – successive
governments with net income and gross habits.
Well, the Romans knew a thing or two about
both offence and defence. The main entrance to
any military camp, for example, was always on
the side furthest from the enemy – and called
the Decuman Gate because it was guarded
invariably by the tenth cohort of each legion.
In these testing times, defence matters. In
quiet sorties from their Decuman Gate, prudent
and defensive investors should look for compa-
nies with strong balance sheets, free cash flow
yield, stable earnings, non-cyclical sectors, divi-
dend growth and yield.
Vinamilk is one of Vietnam’s largest listed companies
Explore new frontiers
Vietnam will benefit
from liberalisation
and secular growth,
says Jessica Mead
W
ITH the attention that has been
lavished on China, it has been all
too easy to neglect the region’s
little dragons such as Vietnam.
Investors fled these frontier markets dur-
ing the financial crisis. In early 2008,
Vietnam suffered from a combination of
economic overheating and surging interna-
tional commodity prices.
Standard Chartered analysts reckon that
the conditions that originally put Vietnam
on investors’ radar screens will return:
“Foreign investors are attracted by abun-
dant resources, such as cheap labour, oil
and agricultural products. Political stability,
an increasingly open economy and rising
consumerism are supporting the country’s
economic development.” Vietnam was one
of just five Asian economies to maintain
positive growth throughout the crisis – the
others were China, India, Indonesia and the
Philippines.
And while Vietnam’s stock market is not
yet fully developed, it is rapidly becoming a
serious financial platform and liquidity is
steadily improving – volumes are now rou-
tinely reaching $250m-$350m per day
while market capitalisation is now $36bn
compared to just $0.7bn in 2005. It is slowly
becoming a country that is more amenable
to foreign investors.
Yet it is still not easy for investors of any
size to get exposure to Vietnam’s secular
growth story. Consequently, the typical
route is through an Asian frontier markets
fund such as Baring Asset Management’s
ASEAN Frontier Fund, which has returned
9.6 per cent since its inception in August
2008. The Barings fund has a 3.2 per cent
exposure to true frontier markets in Asia-
Pacific, which includes Vietnam, Laos and
Sri Lanka. It holds a stake in Vinamilk, the
largest dairy products producer in Vietnam
with a 40 per cent market share and which
has a 4 per cent dividend yield. The fund is
betting on a surge in Vietnam’s consump-
tion of dairy products over the next decade.
However, for the brave long-term institu-
tional investor looking for a purer play on
the country, there are a handful of
Vietnam-specific asset managers such as
Dragon Capital.
Dragon Capital, which has offices in
Vietnam and the UK, has been investing in
Vietnamese companies for the past 15
years. Its largest fund is its Dublin-domi-
ciled Vietnam Enterprise Investments
Limited (VEIL) closed-end fund, which was
CITYA.M. 7 JULY 2010
launched in 1995.
It reckons that long-term outperfor-
mance will come from “closely aligning
investments with the underlying economic
growth drivers, which in Vietnam are pre-
dominantly in the domestic sector. This
includes financial modernisation so banks
account for 30.3 per cent of the fund and
they will continue to be held as a strategic
long-term overweight. Until 2009, the fund
outperformed the market almost every
year but is slightly down on the Vietnam $-
index year-to-date.
Investors seeking an alternative growth
market should actively consider Vietnam
but remain cautious given that the finan-
cial market is still relatively immature.
ANALYSIS l Young and active population
mn
120
0-4 5-14 15-24
25-60 60+
100
80
Source: Standard Chartered
60
40
20
0
2000 2005 2010 2015 2020 2025 2030 2035
CITYA.M. 7 JULY 2010 Investment | Fund Management 25

Valuations are a
Spain’s Telefonica
looks like a good value
stock at current levels

welcome boost
for markets
Stocks in Europe are now oversold and
deserve a second look, says Kathleen Brooks

P
ICKING the bottom of the market can
be a fool’s game, especially in the
capricious times we live in. But after
a 14 per cent fall in the S&P 500 in
recent weeks, valuations are at deeply
attractive levels.
But is this just low hanging fruit that is
too good to be true? No, according to Pierre-
Yves Gauthier at Alphavalue, the equity
research house. Gauthier has calculated
that European stocks (excluding financial
companies) have an average price-to-earn-
ings (P/E) ratio for 2010 of 12.5, and 10.5 for
2011. “We see the potential upside for
stocks as the same as where we were back
in March 2009 (when the market bottomed
after the financial crisis). When valuations
are this attractive there doesn’t even need
to be a catalyst for stocks to appreciate,”
ties’ earnings yields rise. Mike Lenhoff, chief
strategist at Brewin Dolphin, says that when
equity yields are compared with US dollar
investment grade corporate bonds, this
ratio is actually at its lowest level for two
decades: “On this metric the valuations for
equity markets are seriously compelling.”
Lenhoff argues that a strong earnings
season could push stocks up for the rest of
the year, and notes that this would make says that European equities are more ANALYSIS l Bond-equity earnings yield ratio for FTSE World Index
“our year-end target for the FTSE 100 of attractive than their counterparts in the 1.40 (using 30-year US Treasuries)
5,500 look like something to go for”. US; for example, compared to the S&P 500,
Markets are pricing in a very depressing which has fallen 14 per cent since April, 1.20
earnings season. Even if the economy slips equity indices in Milan and Greece have
into a double-dip, equities should be okay. fallen 19 per cent and 25 per cent respec- 1.00
Research by Saxo Bank has found that cor- tively. “If you are a long-term investor, buy-
porate earnings tend to perform better dur- ing names cheaply in Europe (have) the 0.80
ing the second downturn compared to the potential to appreciate over time as the
first. Alphavalue’s Gauthier points out that market learns that these names actually

Source: Datastream
0.60
Gauthier says. during the 2008-2009 downturn, profit aren’t that exposed to the negatives of
Other technical indicators are also point- margins only decreased by 1 per cent, Europe,” Lehr says.
0.40
ing to oversold equity markets. The bond- which bodes well if the global economy Generations of investors have made their
equities earnings yield, see chart, has also dips for a second time. fortunes adhering to the motto “buy low
fallen to lows not seen since the peak of the But where should you invest? Charles and sell high”. According to this proven for- 0.20
2000 2002 2004 2006 2008 2010
financial crisis. This ratio falls when equi- Lahr, executive vice president at Pimco, mula, now is the time to go long equities.

FUND MANAGEMENT NEWS

VERITY PUGH
SANLAM LAUNCHES AFRICAN FUND
Sanlam Investment Management have
launched a Ucits African Frontier Markets
Fund. The minimum investment stands at
£1,000, with a performance fee of 20 per
cent and management fee of 1.75 per cent.
The fund, managed by Eric Kibe, exploits
African equities’ low correlation with main-
stream global equity markets by investing in
companies, with a potential return in line
with long-term capital growth. The fund will
select stocks on a bottom-up basis and
intends to invest in companies that are priced
Picture: GETTY lower than their fundamental value.
AIC FINDS LOW CHARGES
The Association of Investment Companies
(AIC) has discovered that nearly a third of
investment companies have charges of less
than 1 per cent a year. 60 per cent of global
growth investment companies and 58 per
cent of UK growth and income investment
companies have charges under 1 per cent,
measured by the total expense ratio (TER).
The figures don’t take account of perform-
ance fees, though. The lowest cost AIC mem-
ber was Edinburgh US Tracker Trust with a
TER of 0.38 per cent, followed by City of
London Investment Trust at 0.43 per cent.
NEW CREDIT FUND MANAGER FOR AVIVA
The new socially responsible investng (SRI)
credit fund manager for Aviva Investors,
Colin Purdie, joins the company from a back-
ground at Charles Stanley and Aegon Asset
Management. His position will see him work-
ing to incorporate environmental, social and
governance factors into appraisals of credit
investments. He will also be responsible for
the overseeing of Aviva Investors Sustainable
Future Corporate Bond Fund. Peter Michaelis,
the head of SRI at Aviva Investors, says that
Purdie’s appointment will enhance their SRI
credit offering.

Each determined, tenacious and above all independent.

Yet united in a common cause.

Talk to your Financial Adviser, call 0800 092 2051 or visit www.artemisonline.co.uk
Issued by Artemis Fund Managers Limited which is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk), 25 The North Colonnade, Canary Wharf, London E14 5HS.
For your protection calls are usually recorded. CAM/AE
 City Focus
26 CITYA.M. 7 JULY 2010

| Law

Hedge fund law

will damage City
New EU regulations way. Given the concern about the long-
term stability of banks themselves and the
raise questions for risk to the financial system if they were to
fail, one could see the justification for dis-
regulators, and may couraging short-termism and tying
rewards more closely to the organisation’s
future stability. However, hedge fund man-
force firms overseas agers are paid bonuses based on perform-
ance fees which are already aligned with
the interests of the funds they manage.
RICHARD MARTIN & Additionally, the risks to the financial sys-
tem or significant numbers of sharehold-
SEAN DONOVAN-SMITH
SPEECHLY BIRCHAM
ers associated with a hedge fund failing
are much less.
These new measures seem to be more

Y
ESTERDAY the EU parliament
delayed its plans to vote through
amendments to the Capital
Requirements Directive concerning
bankers’ remuneration until September.
The directive is expected to implement
bankers’ pay reforms that will take effect
in January 2011. The main change it is
planning is that only 30 per cent of any
bonus (20 per cent for “larger bonuses”)
may be payable immediately and in cash
with the remainder to be deferred for
three to five years. At least half of the total
bonus will have to be paid in shares or
other securities linked to the institution’s
performance. The rules will apply to senior
management, risk takers and those with
equivalent remuneration.
Hedge funds will be treated in the same
way as banks. This is the first time that
hedge fund manager pay will be regulated.
The EU parliament’s rationale is that
“when investors’ money is put at risk, the
investing firm’s incentives should be
aligned with theirs”. Arlene McCarthy,
Euro MP and vice chair of the Economic
and Monetary Affairs Committee, last
week remarked: “these tough new rules on
bonuses will transform the bonus culture
and end incentives for excessive risk-tak-
ing… it would be obscene to allow the dis-
credited bank bonus culture to continue”.
This is all very well but the reasons why
curbs were introduced on banking bonus-
es do not apply to hedge funds in the same
about attacking high levels of pay than
about safeguarding the financial system.
That may be a legitimate aim in itself, but
the justification ought to be made clear
rather than slipped through under the
guise of something else. Given the capital
they control, hedge fund trading activity
can have significant effects on the market
and so there may be a belief that extending
the rules to hedge funds will have an effect
on trading activity and market volatility –
but this is a different issue entirely.
In reality, imposing bonus restrictions is
more likely to result in significant sums
being legitimately left offshore instead of
being brought into the UK. Funds may
choose to either simply accrue perform-
ance fee entitlement for longer periods or
reinvest bonus proceeds into the funds
being managed – an option that is already
increasing in popularity.
A key issue is how much flexibility is left
with the national regulator. As directives Will people be saying the discretion of national regulators such Although this vote has been delayed,
are not “directly applicable” but only goodbye to London? as the FSA, or its successors. given the sheer number of regulatory
instructions to the member states to bring Most hedge fund managers’ contracts changes that have recently been pro-
their national legislation into line with EC Picture: REUTERS will provide for when and how bonuses are posed, there is a severe risk that further
requirements, there may be some leeway to be paid. How these employment con- change will result in hedge funds simply
for national authorities when implement- tracts will be varied to accommodate the upping sticks and carrying on exactly as
ing the rules. For example, it has already regulatory changes may cause issues and they are, but outside the reaches of the
been agreed that national regulators be subject to legal challenge. It may, for EU. Eighty per cent of European hedge
should decide what amounts to a “larger example, require existing arrangements to funds are based in London, so this could
bonus”. The EU’s system of financial over- run their course for the current financial have disastrous effects on London.
sight is due to be overhauled in January year with anyone not agreeing to the new Coupled with the 50 per cent tax rate and
2011 and the new EU institutions may take regime for the next year being dismissed the incoming AIFM directive, the pres-
a more interventionist approach, limiting and offered a new contract. sure to leave may become irresistible.

An LLP can bring employment law troubles

tempted by this structure, then getting a
proper LLP deed in place and careful prepa-
ration for termination is the key to ensur-
ing an effective exit strategy.
The termination of an LLP member is
governed mainly by the terms of the LLP
agreement, but many LLP deeds fail to take
account of the quasi-employment status of
their members and so don’t include the
JOANNA BLACKBURN contractual protections which would be
MISCHON DE REYA standard in employment contracts.
An LLP agreement must provide a notice
liability for unfair dismissal. This is too
simplistic. As with partners in unlimited
liability partnerships, the test of whether a
member is genuinely self-employed is not
a question of titles. An LLP cannot evade
liability for unfair dismissal claims simply
by pointing to the fact that the person con-
cerned was a member of the LLP.
Instead, an employment tribunal will
look at considerations such as whether the
member genuinely shares in the risk and
reward of self-employment, whether they
statutory sick pay or parental leave.
Regardless of whether members are gen-
uinely self-employed, they will continue to
be protected by all of the discrimination
laws: sex, race, disability, age, sexual orien-
tation, and religion and belief. Given that
it tends to be the more senior (and higher
paid) personnel who are members of the
LLP, the applicability of discrimination
laws can have very significant conse-
quences for LLPs.
One of the key issues is retirement.

L
IMITED liability partnerships are tra-
ditionally associated with law firms,
but the LLP structure is increasingly
the structure of choice for private
equity firms, hedge funds, or other part-
nerships. An LLP can seem the best way for
the business to structure itself. There’s bet-
ter tax status, limitations of liability, and
the ability to avoid employment obliga-
tions to senior staff, (who instead become
members of the LLP), to name but a few.
But businesses often don’t realise the
risk they’re taking with LLPs. they can be a
minefield when a partner leaves – whether
they choose to go, or are pushed. If you are
period, regardless of whether there is any
particular reason for termination. It
should also include terms covering when
termination can occur without any notice.
It should give the LLP the ability to garden
leave a member once notice has been
given, and provide post-termination
restrictive covenants as well as allowing for
the ability to pay in lieu of notice. And it
should have clauses dealing with profit
sharing arrangements and outline what
the entitlements will be when there are
separate sources of remuneration, such as
carried interest schemes.
It’s often thought that LLPs do not have
invested their money in the business,
whether they share in the proceeds if the
business is sold, and whether they lose any
money invested, should the business fail.
It would also consider whether the
member works autonomously, shares prof-
its on a year-on-year basis, whether the
member can bind the LLP in third-party
agreements, and whether the member
pays their own tax. The answers to these
questions will provide the clues to
whether the member is still an employee,
and therefore has unfair dismissal rights,
along with the right to statutory redun-
dancy payments, statutory maternity pay,
Members of LLPs are not subject to the
retirement age of 65. If an LLP forcibly
retires a member when they reach a cer-
tain age, they may face a claim of age dis-
crimination unless they can justify it. This
is regardless of whether the departing
member has signed up to an LLP agree-
ment with a specified retirement age. The
member may struggle to find another job
which pays them the same level of money,
and so the risk of significant damages pay-
ments is one which any LLP needs to con-
sider. With LLPs becoming more popular,
those who are tempted by them should be
aware of the potential pitfalls.
 Lifestyle
Real men
only apply
This pickup-style truck is for City guys
who see themselves as tree surgeons
F
OR A WHILE, a few years back, it
looked like the US trend for vast
trucks and pickups was going to
catch on here. Stateside rappers wear-
ing signet rings the size of dinner plates
applied the same “bigger is better”
approach to all of their purchases, and
cars like the mahoosive Hummer were
suddenly very much in vogue. And then
pick-ups, long the preserve of cowboys and
home improvement herberts, looked set
to follow.
Since then Hummer has died and we’ve
had a global recession. Ostentatious fuel
consumption and general excess when it
comes to motoring is no longer chic. So
a truck like the L200 now seems oddly
outmoded as a lifestyle vehicle.
And take one look at this, the L200
Barbarian, and there’s little doubt that
it’s got its eye on a market beyond
builders, plumbers and landscape gar-
deners. The Mitsubishi L200 is almost
single-handledly responsible for the
growth of so called double cabs in the
UK. This, a long cab pick-up, has rear as
well as front seats – so can seat five –
and can thus double as a work vehicle
during the week and a family
runaround at the weekend. The L200
Barbarian is an L200 with some body kit
styling additions. It’s pretty aggressive to
look at, although that said it’s not –
strangely – unattractive. At least it’s
attractive in a Wolf-from-Gladiators kind
of a way.
NOT FOR THE SHY
With alloy wheels and mirror-shiny
chrome elements including chrome rear
bars, chrome grille, chrome handles,
chrome wing mirrors and even a
chrome fuel cap cover, this car will cer-
OUT OF OFFICE
TIMOTHY BARBER
Bennett’s play about old age.
| Motoring
tainly attract attention. And just in case
passers-by are in doubt as to what the
origin of so much bling is, “Barbarian” is
written on both flanks, on the rear tail-
gate and even sewn into the seats. And
passers-by will notice it, believe me, in
the same way that they would notice
Sigourney Weaver striding down Oxford
Street yelling “Get away from her, you
bitch” in a wearable fork-lift truck. (This
is an Alien reference that you really
ought to know).
So it’s not a car for the shy. But who
indeed is it for? It’s a vehicle for hot air bal-
loonists, mountain bikers, mountaineers
and City workers who fantasize about
being tree surgeons. Or tree surgeons who
like bling. Basically, macho suits guys who
see themselves as outdoorsy. And strong.
NOISY AND RUGGED
So what’s it like? Inside, the Barbarian is
utilitarian but it’s easy enough to drive,
even quite enjoyable. The leather-trimmed
seats are genuinely comfortable and in the
cabin there’s a lot of plastic. The cabin
then is unremarkable, other than being
surprisingly comfortable for a vehicle of
this type.
This Barbarian is specced with a
Kenwood satellite navigation system,
which frankly has the air of the after-
thought about it. Yet the fact is it is
undoubtedly the best satnav system I have
ever used. It also has the ugliest display,
although my wife found the cartoonish
Capri with the go-faster stripe rather
endearing.
The L200 Barbarian has a 175bhp 2.5
litre turbo diesel engine coupled with a
five speed automatic gearbox. It’s noisy
and rugged and hardly refined although
strangely far quieter and refined at speed,
HABIT OF ART RETURNING
After a sell-out run at the National, Alan
Bennett’s amusing play about old age, the
creative spirit and sexuality is returning to
the Lyttelton from next week. National
Theatre regulars Desmond Barrit and
Malcolm Sinclair take over the roles of WH
Auden and Benjamin Britten, towering fig-
ures of the arts staring into the disappoint-
ment of their twilight years. 15 Jul-21 Sep,
NT Lyttleton Theatre, Southbank. Tickets
from £10 from www.nationaltheatre.org.uk.
27
WORDS BY
RYAN BORROFF
so much so that it is easy to creep up to
about 80mph without realising that you’re THE FACTS:
doing so. It comes with a three year or
100,000 mile warranty and a tax advantage MITSUBISHI L200 BARBARIAN
in that it’s in VED band LGV. The economy PRICE: £26,935
is not great and it was never going to be
clean, but then if you need something that 0-62MPH: 13 secs
can carry 2,700kg this will be the least of TOP SPEED: 109 mph
your concerns. CO2 G/KM: 248
The L200 is long but actually surprising- MPG COMBINED: 30.1mpg
ly easy to park, thanks to the rear view
camera. The turning circle takes some get-
ting used to: turning a steering wheel so
THE VERDICT:
much seems strangely old-fashioned. And DESIGN hhiii
accessing the cargo floor is tricky some- PERFORMANCE hhhii
how. The rear tailgate door is pretty heavy PRACTICALITY hhhhi
for light-weights like my wife. It works in VALUE FOR MONEY hhhii
combination with a roller cover which
pulls out across the cargo bed like a roller
blind. To open it you need to heave it back
towards the tailgate using the pull tether,
then twiddle around with the lock to lock
it. It’s fine for transporting big, serious
stuff but it would become a pain for trans-
porting the usual detritus of life like
overnight bags and buggies. But then it’s
when you find yourself sticking your
Christmas tree into it, transporting a mar-
ble fireplace and/or a wardrobe from Ikea,
that you are finally able to justify it.
Maybe.
The facts:
you can afford a Mercedes
The figures:
mercedes-benz.co.uk/offers
ONE ON ONE AT BAC For more information on our tailor-made
Theatre of a more intimate kind can be
found at the Battersea Arts Centre, which is packages or to book a test drive, visit us online.
hosting a festival of theatre pieces. There are
performances secreted around every part of
the sprawling Victorian building, with audi-
ence members sent off on personal expedi-
tions to encounter tiny shows that range
from funny to disturbing. One-on-One
Festival, until 18 Jul, Battersea Arts Centre,
Lavender Hill, SW11 5TN. Tickets £17.50
from www.bac.org.uk.
 28 Lifestyle | TV& Games CITYA.M. 7 JULY 2010

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm Match of the Day Live:
2010 FIFA World Cup: Germany
v Spain (Kick-off 7.30pm).
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Draws
10.45pm The Bionic Vet
11.15pm FILM The Man
without a Face 1993; National
Lottery Update
1.10am Sign Zone: Country Tracks
2.10am Sign Zone: Holby City
3.10am Sign Zone: Put Your Money
Where Your Mouth Is 4.10am Sign
Zone: The Delicious Miss Dahl
4.40am BBC News
6pm Eggheads
6.30pm Antiques Road Trip
7pm Mary, Queen of Shops:
Helping the owners of a London
homeware shop.
8pm The Private Life of Cows:
New series. Jimmy Doherty
investigates the nature of
farmyard animals.
9pm In Loving Memory
10pm Rev: A fellow priest takes
up temporary residence in
Adam’s church.
10.30pm Newsnight: Weather
11.20pm How to Beat Tough
Times: Money Watch
12.20am Gareth Malone Goes
to Glyndebourne
1.20am BBC News
6pm London Tonight
6.30pm ITV News
7pm Emmerdale: Holly goes
back to her old ways.
7.30pm The Lakes
8pm CHOICE Midsomer
Murders: A scandal resurfaces
following the murder of a
former detective.
10pm ITV News at Ten
10.30pm London News
10.35pm World Cup Highlights
11.35pm FILM Pale Rider:
Western, directed by and
starring Clint Eastwood. 1985.
1.40am The Zone; ITV News
Headlines 3.40am The Jeremy
Kyle Show 4.35am-5.30am ITV
Nightscreen
6pm The Simpsons
6.30pm Hollyoaks
6pm Home and Away
6.25pm Live from Studio Five:
TV PICK
7pm Channel 4 News Topical reports.
7.55pm 4thought.tv 7.30pm Escape from Apollo 13;
8pm Big Brother Five News Update
9pm The Sex Education Show: 8pm Secrets of the Jesus
Am I Normal? Tomb; Five News at 9
10pm CHOICE Desperate 9pm CHOICE NCIS: The team
Housewives flies to Israel for a final
11pm The Big Bang Theory showdown. Last in the series.
11.30pm My Name Is Earl 10pm CSI: NY MIDSOMER MURDERS
12am My Name Is Earl 10.55pm K-Ville ITV1, 8PM
12.30am Music on 4: The 11.55pm Poker Barnaby (John Nettles) rakes over a
Album Chart Show Spotlight 12.55am SuperCasino sex scandal at Causton station 16
12.45am Music on 4: The Crush 4.05am House Doctor 4.30am years earlier after his former CID
1.15am Big Brother: Live 3.25am House Doctor 4.55am Rough Guide colleague Jack Colby is murdered.
Unreported World 3.55am Beach to Eco Escapes 5.10am The New
Volleyball 4.50am World Sport Tomorrow 5.35am-6am Michaela’s
5.15am-6am Countdown Wild Challenge

SKY SPORTS 1 10pm Modern Pentathlon 11pm 1am DTM Review Show 2am F3 E4 Shook the World 5.30am-6am
SATELLITE & CABLE

5.30pm Live Twenty20 Cup
Cricket 9pm Spirit of Yachting
9.30pm Total Rugby 10pm World
Cup Report 10.30pm Football’s
Greatest 11pm Twenty20 Cup
Cricket 1am Soccer AM: The Best
Bits 2am Football’s Greatest
2.30am FIFA Futbol Mundial
3am Twenty20 Cup Cricket 5am
FIFA Futbol Mundial 5.30am-
6am Football’s Greatest
SKY SPORTS 2
7pm Live Winning Post. Coverage
from Naas and Worcester. 9pm
Transworld Sport 10pm Boots ‘n’
All 11pm State of Origin Rugby
League 12am Football’s Greatest
12.30am FIFA Futbol Mundial
1am Transworld Sport 2am Wild
Spirits 2.30am Spirit of Yachting
3am Boots ‘n’ All 4am-5am State
of Origin Rugby League
SKY SPORTS 3
7pm Champions Tour Golf
8pm Boots ‘n’ All 9pm State
of Origin Rugby League
Champions Tour Golf 12am
Golfing World 1am European Tour
Weekly 1.30am Inside the PGA
Tour 2am Champions Tour Golf
3am-5am PGA EuroPro Tour Golf
BRITISH EUROSPORT
6.05pm US Tour Golf 7.05pm
European Tour Golf 7.35pm
Ladies European Tour Golf
7.45pm Golf Club 7.50pm Sailing
8.50pm Yacht Club 9pm
Eurosport for the Planet 9.30pm
Cycling: Tour de France 10.30pm
Eurosport Flash 10.35pm Soccer
City 11.05pm Eurosport Flash
11.10pm Sport Traveller 11.25pm
Planet Armstrong 11.30pm
Olympic Magazine 12am-
12.30am Soccer City
ESPN
7pm VW Scirocco Cup 8pm DTM
Review Show 9pm F3 Euroseries
Review Show 10pm 30 for 30
11pm South Africa Nightly
11.30pm Baseball Tonight
12.00am Superleague Formula
12.30 Press Pass 2010
Euroseries Review Show 3am
VW Scirocco Cup 4am-5am AFL
Review Show
LIVING
7pm Four Weddings 8pm
Nothing to Declare 9pm Ghost
Whisperer 10pm Most Haunted
11pm Criminal Minds 12am CSI:
Crime Scene Investigation 2am
So You Think You Can Dance 3am
The Fresh Prince of Bel-Air
3.50am Maury 4.40am Nothing
to Declare 5.30am-6am Home
Shopping
BBC THREE
7pm The World’s Strictest Parents
8pm Big Meets Bigger 9pm
FILM Casanova 2005. 10.45pm
Family Guy 11.30pm American
Dad! 12.15am Mongrels 12.45am
Big Meets Bigger 1.45am Match
of the Day: 2010 FIFA World Cup
3.25am Mongrels 3.55am The
Real Hustle on Holiday 4.55am
World Cup’s Most Shocking
Moments 5.10am-5.15am Great
Movie Mistakes
7pm Hollyoaks 7.30pm Friends How Does That Work?
9pm Gok’s Fashion Fix 10pm
FILM Hot Shots! 1991. 11.40pm
DISCOVERY HOME &
HEALTH
You Have Been Watching
7pm Babes in the Wood 8pm Jon
12.30am-6am Big Brother: Live
and Kate Plus 8 9pm Hospital DESPERATE HOUSEWIVES
HISTORY Sydney 10pm Untold Stories of CHANNEL 4, 10PM
7pm How the Earth Was Made the ER 11pm Emergency Medics Bree considers revealing an old secret,
8pm Earthquake Italy 9pm The 12am Hospital Sydney 1am the fate of Lynette’s unborn child lies in
Lost Pyramid 11pm Sicily’s Untold Stories of the ER 2am Eddie’s hands, and Gabrielle risks her
Mummies 12am Earthquake Italy Emergency Medics 3am Jon and safety to help Angie. Last in the series.
1am How the Earth Was Made Kate Plus 8 4am Baby Tales 5am
2am Ancient Discoveries 3am Mum’s the Word 5.30am-6am
Pawn Stars 4am-5am Decoding Mum + One
the Past
SKY1
DISCOVERY 7pm The Simpsons 8pm Fat
8pm How Do They Do It?: The Families: Second Helpings 9pm
secrets of a near-perfect shave. FILM The Librarian: Return to
8.30pm How It’s Made 9pm Real King Solomon’s Mines 2006.
Poltergeist 10pm Cook County 10.45pm The Real A&E 11.15pm
Jail 11pm The Cumbrian Murders: Real Filth Fighters 11.45pm Oops
The Untold Stories 12am TV 12.45am The Real World: Key NCIS
Deadliest Catch 1am Bear Grylls: West 1.40am Oops TV 2.35am FIVE, 9PM
Born Survivor 2am Chris Barrie’s Road Wars 3.30am 24 4.20am Gibbs learns that Ziva was
Massive Machines 3am World Tim Gunn’s Guide to Style romantically involved with Rivkin and
War Two in HD Colour 3.50am 5.10am-6am Are You Smarter is forced to make a tough decision.
Raging Planet 4.40am Days That Than a 10 Year Old? With Mark Harmon and Cote de Pablo.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
5 45 8 7 42 13 
11 12
  
3 28
Place the numbers from 1 to 9 in each empty cell so that each 13 45 16 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 10 9 6
4 36 6
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 10 27
   
above or to the left of it. 21
7 37  
You can only use the digits 1-9
    and you must not use the
24
40  
same digit twice in a block.
 The same digit may occur 22
8
7
5
 
16
    more than once in a row or
column, but it must be in a
29
21
14
  

    separate block. 9
12
15
8
11
14
11 15
  30 6
 

    ACROSS DOWN
1 Wild dog of Australia (5) 1 Business that
   
 WORDWHEEL E I
3 Forepart (5)
7 Produce incisors,
molars, etc (6)
operates primarily
on the internet (3,3)
2 Acquire (3)
Using only the letters in the Wordwheel, you have 9 Intend to express 4 Person who takes
    ten minutes to find as many words as possible,
R N or convey (4) long walks in the
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 10 Science room (abbr) (3)
11 Bowling period in the
country (7)
5 Minuscule (4)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
R G game of cricket (4)
13 Strong washing
6 Plant with greenish-
white flowers (9)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
P E solution (3) 8 Pitchers (5)
15 Official who is expected 12 Drive back (7)
QUICK CROSSWORD to ensure fair play (7) 14 Agent used in
SUDOKU
4 6 3 8 9 3 1
8 7 3 2 9 4 1 5 6          17 Type of cobra (3) fermenting beer (5)
6 $ / ( 0 * 8 6 7 6
7 / ( 2 +
5 2 1 2 9          18 Inclined surface (4) 16 Orb, globe (6)
9 8 7 9 7 8 9
$ 3 5 2 1 / $ 1 & (          20 Visitor from space? 19 Elegant and stylish (4)
5 1 6 ) ( 4 9 5 2 3 8 1 7 6
6 2 8 * + 7 $ ) 7 ( 5 8 5 9 5
         (inits) (3) 23 God of the sun, also
         21 High mass of land (4)
8 $
3 5 ( 7 (
2
1
/ 0
7 , 2 8 6
8 6 1
9 7
3 7 5 4
1 4 2
2
1
9
6
WORDWHEEL         
22 Steal cattle (6)
known as Helios (3)
, ( ( & +         
& 5 , 6 3 6 7 2 9 (
4 1 9 7 6 The nine-letter word 24 Cat-like mammal yielding
5 9 8 6 7 2 3 4 1         
2 & 2 ( $
was CUSTODIAL musk used in perfumes (5)
7 2 < ( ' $ ' ' ( 5 1 8 8 9 6 3 7         
25 Primitive plant forms (5)
 Sport
Hamilton and Button calm
talk of simmering rivalry
FORMULA 1
2010
BY FRANK DALLERES
MCLAREN team-mates and world
championship rivals Lewis Hamilton
and Jenson Button have laughed off
suggestions their rivalry is about to
erupt at this weekend’s British Grand
Prix.
The English pair go into Sunday’s
race at Silverstone locked in a fierce
battle for the title, with Hamilton top
of the standings and Button second.
Former champion Damon Hill
So far, so good for England
AT THE CREASE WITH
ANDY LLOYD
T
HERE’S no better habit than a
winning habit and England’s
recent 3-2 series success over
Australia will give them plenty
of confidence for the rest of the sum-
mer – and beyond.
True, the Ashes is a different ball
game altogether, but with a World
Twenty20 victory and one-day series
believes the competitive tension
between the pair is already at a “sim-
mer” and is soon going to “boil over”.
But the colleagues put on a united
front yesterday, making light of Hill’s
remarks and joking with each other
about their supposed conflict.
Button said: “We are both very
competitive and we both want to
win, but as we keep saying, first of all
you have to work together. For me it
is a good relationship. I am sure it is
going to continue. If you are both
quick you are going to be racing
wheel-to-wheel.”
Hamilton joked that their cama-
win behind them, England can head
Down Under in the autumn without
fear and in familiar territory.
The Australians were a few bowlers
light but you can only beat what’s put
in front of you and England stole an
edge on the Aussies with good, solid
performances which is bound to have
had an affect on the Australian mind-
sets.
UNNOTICED
Before the Ashes, however, there is
plenty of cricket left to play and next
up for England is a three-match one-
day series with Bangladesh and a
chance to mix a few things up ahead
of their toughest task, against
Pakistan later in the month.
The Bangladeshis are punching
above their weight here and I expect
GIO’S RASPER SPARKS
DUTCH DELIGHT
VAN BRONCKHORST WONDER
GOAL HELPS HOLLAND
END URUGUAY DREAM: P30-31
raderie was a sham, adding: “We’re
just great actors. We’re going for the
Oscars next year – I’ll be going to
Bollywood, Jenson’s going to
Hollywood.”
Both men are desperate to win on
home soil, with Hamilton rating the
experience almost as highly as win-
ning the championship, and Button
longing for a first victory in his native
country.
But even the more cavalier
Hamilton, who boasts a six-point lead
over Button, insists he would not put
his race on the line if he is trailing his
team-mate in the closing stages.
the England selectors to give some
squad players a chance to stake their
claim for a place, while the likes of
Graeme Swann and Kevin Pietersen
are rested.
Ian Bell, for example, is back on top
of his game right now and his 158 for
the Lions against India ‘A’ yesterday
could well have earned him his
chance, while Liam Plunkett’s four
wickets in the tied match at New
Road won’t go unnoticed I’m sure.
But whichever side is selected,
England will be looking for a convinc-
ing 3-0 victory to go into the long
series with Pakistan.
As they have already showed in
their Twenty20’s with Australia this
week, the Pakistanis are an extremely
talented side, if not unpredictable.
England can leave nothing to chance.
Button (left) trails
McLaren team-
mate Hamilton by
six points going
into this weekend’s
British Grand Prix.
Picture: PA
“I think the important thing to
remember is that the championship
won’t be won or lost on Sunday,” said
the 2008 champion.
“It’s not the end of the world if you
don’t win. It’s our home grand prix
so it’s special but in terms of the
championship it’s just another race,
so I don’t think its necessary to do
anything silly on the last lap.”
Button added: “If we’re first and
second I think it’s great for the
British Grand Prix but we both want
to win – that’s what we’re here for –
and we will always fight to be the
best.”
SPORT | IN BRIEF
Semenya free to compete
ATHLETICS: South African athlete Caster
Semenya has been given the all-clear to
return to competition by the International
Amateur Athletics Federation.
The world 800m champion, 19, has
been out of the sport for 11 months after
undergoing gender tests.
But an IAAF statement yesterday
read: “The IAAF accepts the conclusion of
a panel of medical experts that she can
compete with immediate effect.”
Legend Murali bows out
CRICKET: Legendary Sri Lankan spinner
Muttiah Muralitharan is to retire from
Test cricket after the first Test of their
home series with India in Galle this
month, it has been announced.
The 38-year-old is one of the finest
bowlers ever produced, taking a world
record 792 wickets from 132 Tests.
Muralitharan is expected to carry on play-
ing limited-overs cricket, however.
29
Terse Tiger
is feeling
the heat as
Open looms
▲
GOLF
BY JON COUCH
TIGER WOODS showed signs of feeling
the pressure as he fronted the media
yesterday on his first visit to British
shores since last year’s Open
Championship.
The world No1 met any questions
about his private life with short, terse
responses as he spoke during the JP
McManus Pro-Am event at Adare
Manor, Ireland.
Woods was asked as to why he
would not be practicing on a links
course prior to next month’s Open at
St Andrews to which he replied sim-
ply: “Because I need to go home”.
Questioned as to whether that was
due to “personal stuff”, Woods glared
at the reporter and added abruptly:
“To see my kids”.
Clearly this was a different Tiger
Woods which fronted the world’s
media back in February, when he
issued a public apology for the extra-
marital affairs, which tarred his image.
Since his return from a five-month
absence, Woods has struggled with
form and could even be displaced as
world No1 this weekend if rival Phil
Mickelson finishes first or second in
the Scottish Open at Loch Lomond.
Woods could only finish tied for
46th in last weekend’s AT&T National
in Pennsylvania – won by England’s
Justin Rose – but the American feels
he is still improving as he goes in
search of a fourth Claret Jug and 15th
Major title overall.
“I felt I made some good strides last
week,” he added, “I drove it great last
week, I just putted terrible and fin-
ished way down the board. Something
I need to work on is my light putting
and there will be a lot of light, long
putts at St Andrews.”
l Meanwhile, R&A chiefs have
announced that overall prize money
at the Open will rise by £600,000 to
£4.8m this year with the eventual win-
ner taking home £850,000.
White jersey for Brit Thomas
CYCLING: British Team Sky rider Geraint
Thomas claimed the white jersey after fin-
ishing second behind Norwegian Thor
Hushovd in a brutal third stage of the Tour
de France between Wanze and Arenberg.
Swiss Fabian Cancellara regained the
yellow jersey from Sylvain Chavanel,
while defending champion Alberto
Contador and Lance Armstrong both lost
time on the cobblestone sections of the
course. Bradley Wiggins finished eighth.
Bell century roars Lions on
CRICKET: Ian Bell smashed a career-best
‘List A’ score of 158, but couldn’t prevent
India ‘A’ battling back to earn a draw
against the England Lions at New Road.
Bell’s knock, from 143 balls, guided the
Lions to 343-8 before India opener
Abhinav Mukund led the reply with 114.
Meanwhile, Pakistan completed a 2-0
win over Australia in their Twenty20
series with an 11-run win at Edbaston.
 30 Sport | Football CITYA.M. 7 JULY 2010

Results

Oranje-Boom!
WORLD CUP SEMI-FINAL
Uruguay..........................(1) 2 Holland .................................(1) 3
Forlan 41 Van Bronckhorst 18
Maxi Pereira 90 Sneijder 70
Att: 62,479 Robben 73
CRICKET
LV COUNTY CH’SHIP - DIVISION ONE (Chelmsford); Essex
154 and 265-4 (81.0 overs) (J C Mickleburgh 91, M J Walker
70, J K Maunders 70). v Nottinghamshire 180 (A D Brown
50no, M A Chambers 6-68). (The Rose Bowl); Kent 251 (J L
Denly 67, S A Northeast 50, D G Cork 5-50) v Hampshire
408-5 (108.4 overs) (M A Carberry 158, N D McKenzie 113).
(Headingley Carnegie); Yorkshire 425 (G L Brophy 103, A
Lyth 84, A McGrath 57, N M Carter 4-87) v Warwickshire

Holland march into World Cup final

221-7 (65.0 overs) (I J Westwood 66, A U Rashid 4-61).
DIVISION TWO (Northampton); Northamptonshire 494 (D
J G Sales 127, N Boje 98, A J Hall 84no, S D Peters 76, J W
M Dalrymple 4-71) v Glamorgan 207 (J Allenby 59no, E
Chigumbura 4-67).
TOUR MATCH (New Road); England Lions 343-8 (I R Bell
158, D I Stevens 64, S M Davies 54) v India A 343-8 (A
Mukund 114, L E Plunkett 4-58). England Lions tied with
India A. minutes later.
INTERNATIONAL TWENTY20 SERIES (Edgbaston);
Pakistan 162-9 v Australia 151. Pakistan (-2147483645pts)
beat Australia (3pts) by 11 runs.
URUGUAY 2 Victory seals Holland a final place
for the first time since 1978 and also
VARSITY MATCH (The Parks); Oxford University 470-2
assures a European winner on for-
(103.5 overs) (D King 189, S S Agarwal 117). v Cambridge
University.
HOLLAND 3 eign soil for the first time with
either Germany or Spain awaiting
CYCLING them in Sunday night’s showpiece at
TOUR DE FRANCE (Wanze, Belgium to Arenberg Porte du
Hainaut, France, 132.4 miles)—33rd stage: 1 T Hushovd
WORLD CUP 2010 Soccer City
Cheered on by their Oranje Army,
(Norway, Cervelo) 4h 49m 38s; 2 G Thomas (GB, Team Sky); BY JON COUCH the Dutch started nervously, leaving
3 C Evans (Australia, BMC); 4 R Hesjedal (Canada, Garmin);
5 A Schleck (Luxembourg, Saxo Bank); 6 F Cancellara HOLLAND survived late Uruguayan Uruguay, playing their first semi-final
(Switzerland, Saxo Bank) all same time; 7 J Van Summeren pressure to maintain their incredible for 40 years, enjoying the lion’s share
(Belgium, Garmin) +53s; 8 B Wiggins (GB, Team Sky); 9 J 25-game winning streak and book of possession. But without striker Luis
Van Den Broeck (Belgium, Omega Pharma-Lotto); 10 A their place in the World Cup final. Suarez, sent-off in the quarter-final
Vinokourov (Kazakhstan, Astana) all same time.
Others (GB unless stated): 12 N Roche (Ireland, AG2R) +53s; The Cape Town skyline descended against Ghana for his last-minute
21 D Millar (Garmin) 1m 46s; 25 M Cavendish (GB, HTC- into a sea of orange as Bert van goal-line handball, they lacked that
Columbia) 2-08; 91 S Cummings (GB, Team Sky) 2-37; 128 D Marwijk’s side remained on course killer instinct and a tepid opening
Lloyd (Cervelo) 6-28; 172 J Hunt (Cervelo) 13-54; 182 C
Wegelius (Omega Pharma-Lotto) 17-03. to lift the country’s first-ever world prevailed.
Overall: 1 Cancellara 14h 54m 00s; 2 Thomas +23s; 3 Evans trophy and finally bury the ghost of That was, however, until the 18th
39; 4 Hesjedal 46; 5 S Chavanel (France, Quick Step) 1m 01s; two heartbreaking final defeats in minute when the ball was fed out to
6 A Schleck 1-09; 7 Hushovd 1-19; 8 Vinokourov 1-31; 9 A the 1970s. van Bronckhorst on the left flank
Contador (Spain, Astana) 1-40; 10 Van Den Broeck 1-42.
Otther: 11 Roche 1-42; 14 Wiggins 1-49; 15 Millar 2-06; 69 Giovanni van Bronckhorst set and the veteran former Arsenal full-
Cummings 3-44; 110 Cavendish 9-11; 141 Hunt 15-07; 150 them on their way with a spectacu- back let fly with a magnificent strike
Lloyd 17-32; 180 Wegelius 24-06. lar 40-yard effort into the top corner, which flew past Fernando Muslera.
RACING only for Diego Forlan to lead the Holland might have upped a gear
PONTEFRACT Uruguayan fightback with a long- at that point, but back came Uruguay
2.30 1 Majestic Myles (P Hanagan) 4-9 Fav 2 Witzend (T range effort of his own four minutes and they were fully deserved of their
Hamilton) 20-1 3 Orientalist (K Fallon) 14-1. 3.00 1 Monkton before the interval. equaliser, carved out by that man Then, with 20 minutes left, Robben, who planted his header
Vale (P Hanagan) 15-8 Fav 2 River Ardeche (P Donaghy) 14-1 The Dutch were hardly on vintage Forlan, whose swerving strike Holland were handed a lifeline when expertly off the near post.
3 Sadler’s Mark (J P Spencer) 9-2. 3.30 1 Perfect Blossom (P
Hanagan) 11-4 Fav 2 Jack Luey (Andrew Heffernan) 7-1 3 form as the south Americans contin- deceived Dutch keeper Stekelenburg. Sneijder’s shot ricocheted off Maxi Pereira sparked a mad dash with a
Tillys Tale (P Pickard) 25-1. 4.00 1 Off Chance (D Fentiman) ued to press after the break, but Indeed, you got the feeling Holland Pereira and in off the post with Robin sweet, curling effort in the third
8-1 2 Please Sing (C Catlin) 11-1 3 Tropical Paradise (Jim Wesley Sneijder put them back in were there to be got at as they strug- van Persie looking suspiciously off- minute of added time but, despite a
Crowley) 15-2. 4.30 1 Cornus (J Doyle) 9-1 2 Red Cape (I J
Brennan) 5-1 3 Gertmegalush (B Mchugh) 16-1. 5.00 1 front with a deflected shot from the gled to find their feet at the start of side. Uruguay were fuming but had couple of brief scares, the Dutch held
Lajidaal (R Hills) 7-2 2 Fascination (J P Spencer) 11-8 Fav 3 edge of the box before Arjen the second half – Forlan testing no complaints three minutes later on to keep their World Cup dream
Charming Man (L Dettori) 5-2. 5.30 1 Vito Volterra (M Robben’s header sealed victory three Stekelenburg with a dipping free-kick. when Dirk Kuyt’s cross found alive.
Stainton) 3-1 2 Dutiful (T E Durcan) 7-4 Fav 3
Danceintothelight (T Eaves) 5-1.
SOUTHWELL
6.40 1 Berberana (D Allan) 7-2 2 Nine Before Ten (S De
Sousa) 8-1 3 Key Lago (P Makin) 5-2 Fav. 7.10 1 Heresellie (G

Dutch will ensure a cracking finale

Gibbons) 3-1 Fav 2 Liberty Ess (P Hanagan) 6-1 3
Look’n’listen (S De Sousa) 16-1. 7.40 1 Tomintoul Star
(James P Sullivan) 7-2 Fav 2 Green Community (T P Queally)
7-1 3 Dandarrell (B Mchugh) 14-1. 8.10 1 Zubova (W A
Carson) 11-1 2 Takajan (Louis-Philippe Beuzelin) 12-1 3 Law
Of Attraction (J P Spencer) 11-4. 8.40 1 City Stable (P
Hanagan) 5-1 Jt Fav 2 Three Boars (J P Spencer) 14-1 3
Benozzo Gozzoli (N Mackay) 13-2. 9.10 1 Westwood (Dane
O’neill) 9-1 2 Bookiesindex Boy (J P Spencer) 9-1 3 Elusive
Warrior (Conor Quish) 25-1. with their abundance of talent just have thought that Khalid favourites tonight, simply due to their
UTTOXETER ready to show the world how good Boulahrouz, after his nightmare at World Cup pedigree and experience
6.50 1 Sahrati (Peter Toole) 2-1 2 Heron Bay (O Dayman) 8- they are. Chelsea, or Dirk Kuyt, after a poor sea- in getting over the finish line.
11 Fav 3 Desolait (S Twiston-Davies) 20-1. 7.20 1 Rio Gael (T Personally, I’d like to see a son with Liverpool, could be so influ- It will be interesting to see, howev-
J O’brien) 11-1 2 Tri Nations (J M Maguire) 9-4 Fav 3 Hollies Spain/Holland final, not only because ential in a World Cup final team. er, just how much possession of the
Favourite (Alex Merriam) 50-1. 7.50 1 Gabreselassie (R P of their similar style of play, but also From left to right, back to front, they ball they will get from the Spanish
Mclernon) 11-2 2 Merry Terry (J Tizzard) 7-2 3 San Deng (F
Keniry) 8-1. 8.20 1 Folie A Deux (S Twiston-Davies) 3-1 Fav 2 because it means a new name on the look a complete team. midfield masters in Xavi and Iniesta,
Kirkhammerton (Danny Cook) 9-2 3 Red Jester (M trophy. Uruguay, it has to be said also, had and I’ve just got this sneakiest feeling
Goldstein) 12-1. 8.50 1 Wensleydale Web (G Lee) 16-1 2 But Germany have winning in their a great tournament themselves and that it could be the night for
Zoenicibel (James Halliday) 11-1 3 Basford Lass (A O’keeffe) OUR MAN IN SOUTH AFRICA
blood and it wouldn’t surprise me in with the terrific Diego Forlan en tow, Fernando Torres to come alive.
8-1. 9.20 1 Very Stylish (R P Mclernon) 11-2 2 Aldiruos (Lee
Edwards) 16-1 3 Starlight Air (L Treadwell) 14-1. TREVOR STEVEN the least if they pulled off another
Argentina-style performance in
they can go back
to south America
WOLVERHAMPTON

W
2.15 1 Athaakeel (Luke Morris) 25-1 2 Towy Boy (Catherine HETHER it’s Germany or Durban tonight. proud in the fact
Gannon) 13-2 3 Divertimenti (A Hamblett) 5-1 Jt Fav. 2.45 1 Spain who meet Holland in Holland will be a match for either. they flew the con-
Romantic Queen (Matthew Davies) 12-1 2 Cavitie (R Sunday’s World Cup final, They have great pace and creativity tinent’s flag in the
Kennemore) 4-1 Fav 3 The History Man (Kirsty Milczarek) you can be sure of one thing going forward with Arjen Robben and last four.
14-1. 3.15 1 Reality Show (Ahmed Ajtebi) 5-1 2 Wulfrida (P
Cosgrave) 8-1 3 Bavarian Nordic (Rosie Jessop) 14-1. 3.45 1 – it’s going to be a cracker. Robin van Persie, and in playmaker The bookies
One Scoop Or Two (R Kennemore) 12-1 2 Flying Valentino (S While the Germans have lit the Wesley Sneijder they have the man of may slightly
Donohoe) 11-4 Fav 3 Full Victory (L Keniry) 4-1. 4.15 1 Miss tournament up with their movement the tournament for me. favour Spain, but I
Antonia (T P Queally) 8-1 2 Fourth Generation (A Elliott) 12-
1 3 White Devil (J Fortune) 4-6 Fav. 4.45 1 Fifth Dimension and flowing, counter-attacking style, What I like about the Dutch is the think Germany
(D Sweeney) 10-1 2 Fabiello (R Kingscote) 14-1 3 Stacey (N the Spanish are warming up nicely way they are balanced. Who would will start as
Chalmers) 9-1. 5.15 1 Crocodile Bay (Paul Eddery) 13-2 2
Guildenstern (J Quinn) 8-1 3 Shannon Golden (A Hamblett)
12-1. 5.45 1 Handsome Jack (R Kingscote) 5-4 Fav 2 Lady

Facebook sparks Nigeria U-turn

Morganna (Kieren Fox) 8-1 3 Not So Bright (P Cosgrave) 10-
1.

TODAY’S DIARY
World Cup Semi-Final
Germany v Spain (7.30)............................................................................................
Facebook. change of heart. Meanwhile, Facebook have denied
CRICKET
LV County Ch’ship - Division Two—day 3 of 4:
WORLD CUP World governing body Fifa threat- “To the hundreds of Nigerians who reports they are in talks with the
Northamptonshire v Glamorgan (Northampton), day 1 of 4:
Sussex v Gloucestershire (Arundel).
2010 ened to blacklist the Super Eagles if
the ban was not dropped, as their
appealed to me on this page, I have
listened to your voices and those of
Football Association over a sponsor-
ship deal. A spokesman for the social
BY FRANK DALLERES
Friends Provident T20 - North Division: Leicestershire v rules forbid government interference others,” he wrote. networking site said: “Facebook is not
Worcestershire (Grace Road). NIGERIA’S president has admitted in teams. “We must now work together to in talks with the England football
that he felt compelled to scrap his But Goodluck Jonathan said it was make sure that the Nigerian Football team regarding sponsorship. I don’t
SPORTS EDITOR JON COUCH two-year ban on the national team the huge number of messages on his Federation and our players do us know where it has come from but it is
email sport@cityam.com after receiving hundreds of pleas on Facebook page that prompted his proud in future events.” not true. It’s bizarre.”
CITYA.M. 7 JULY 2010 Sport | Football 31

Gerrard: I’m not ready to call

Arjen Robben (left),
celebrates
Holland’s victory
with team-mate
Dirk Kuyt.

Picture: GETTY

time on my England career

Gerrard’s Liverpool team-mate has low and I am determined to do as

▲
ENGLAND
BY FRANK DALLERES
ENGLAND star Steven Gerrard
expects manager Fabio Capello to
make sweeping changes to the squad
after sifting through the wreckage of
their World Cup campaign.
But the 30-year-old midfielder has
told Capello that he is not ready to
step aside and call time on his inter-
national career.
announced that is England career is
over, following a tournament that
ended with a brutal 4-1 defeat to
Germany.
But the Three Lions’s stand-in cap-
tain is adamant he will not bow out
of the national set-up until he has
eradicated that painful memory.
“There is no way I want the disap-
pointment of the Germany game to
be my last for England. It was such a
much as I can to make amends for
what happened,” said Gerrard.
“I expect there to be a lot of
changes to the squad and it is up to
the manager whether I am selected,
but I am going to continue to make
myself available for my country.”
Gerrard is set to lead England in
their next match, the friendly with
Hungary at Wembley on 11 August, as
skipper Rio Ferdinand is injured.

AM G
I T D IN
BR A
Y
LE L E
CE ’ S
O UK
PR HE
T

FROM YOUR DESK

IN THE CITY
TO THE FIRST TEE RETURN IN 24HRS!
ARCHERFIELD LINKS, MONDAY 19TH JULY 2010

Spain are still

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WORLD CUP 2010 teams that appear the better ones on
paper. For me, Spain are the best
PREMIER PARTNER:

BY JON COUCH team in the world.

BASTIAN SCHWEINSTEIGER has
played down his side’s chances of
clinching a World Cup final place,
insisting Spain are favourites for
tonight’s last-four clash in Cape Town.
The young German side have
arguably been the most impressive
team in the competition so far, while
the Spanish have endured a more
subdued run to the semi-final.
But Schweinsteiger is still daunted
by his side’s Euro 2008 final defeat
two years ago and admits Vicente del
Bosque’s side are the “best team in
“It will be tough just like it was
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