www.cityindex.co.
uk
FINAL DEADLINE: 29 JULY P2 & P15
Issue 1,182 Thursday 22 July 2010
MERGER MANIA
GRIPS THE CITY
M&A
▲
BY OLIVER SHAH
A SUMMER flurry of corporate activi-
ty gathered pace yesterday as SSL, the
maker of Durex condoms, agreed a
£2.5bn takeover offer from Reckitt
Benckiser, and the owners of United
Biscuits put the firm up for sale.
Shares in SSL soared 33.5 per cent
to £11.77 after the board recommend-
ed the FTSE 100 household goods
company’s long-awaited approach.
Reckitt, whose brands include
Clearasil and Gaviscon, said the “step
change” acquisition would boost its
health and personal care sales by
more than a third to £2.8bn.
Reckitt was last night bracing itself
for the possibility of a counter-bid
from a trade buyer such as
GlaxoSmithKline, Merck or Bayer, or a
buyout player. Brian McKay, a banker
at corporate finance house Houlihan
Lokey, said: “Every major private equi-
ty firm in the UK will have looked at
this.” A counter-bid is on the cards
“simply because there’s a dearth of
large deals out there and there’s a sur-
plus of private equity cash,” he said.
Separately, it emerged Blackstone
and PAI Partners are sounding out
investment banks to advise on an auc-
tion of United Biscuits. The manufac-
turer of Penguin chocolate bars and
Hula Hoops crisps could be worth
£2bn. Its snacks and biscuits divisions
may be sold individually.
FTSE 100 ▲ 5,214.64 +75.18 DOW ▼ 10,120.53 -109.43
&&&#('$
BUSINESS WITH PERSONALITY
LAST CHANCE TO ENTER
CITY A.M.’S AWARDS
UNITED BISCUITS
put up for sale for an estimated
£2bn
INTERNATIONAL POWER in merger
talks with GDF Suez worth around
£6.4bn
Other stocks bounced on hopes of
further dealmaking. Hedge fund Man
Group climbed three per cent to
215.2p as traders again speculated it
was on Bank of New York Mellon’s
shopping list. Tui Travel added 3.2 per
cent to 229p after an analyst note sug-
gested its German parent could buy
out the 45 per cent it does not own.
Earlier in the week, industrial com-
ponents group Tomkins said it was in
talks with a consortium of Canadian
NASDAQ ▼ 2,187.33 -35.16 £/$ ▼ 1.52 -0.01 £/¤ ▲ 1.09 +0.01 ¤/$ ▼1.28 -0.01
*
www.cityam.com
SSL agrees sale to
Reckitt Benckiser for
£2.5bn
Unilever sells Italian frozen food
firm Findus to Bird's Eye Iglo for
€805m
investors over a £2.9bn deal, while
International Power, the energy gen-
eration firm, said it had resumed on-
off talks with France’s GDF Suez. The
talks could lead to GDF Suez taking a
majority stake in the operator.
Deal advisers warned the macro-
economic backdrop remained fragile
and said sterling’s weakness relative
to the dollar did not necessarily
make British companies more attrac-
tive, because earnings in pounds
 !"

# 
 #" ! "
TOMKINS in talks with Onex and a
Canadian pension fund for an offer of
£2.9bn
Emerson Electric
buys CHLORIDE for
£997m
were marked down as well as valua-
tions.
However, analysts said FTSE valua-
tions had yet to catch up with corpo-
rates’ improved balance sheets.
Deloitte’s Paul Zimmerman said:
“Companies are able to demonstrate
how they fared in an actual recession
and that can make them more attrac-
tive assets. You’ve seen how they per-
formed in the good times and bad.”
UNITED BISCUITS: P2; RECKITT: P6
!"
BANKING
RESULTS
TOP US FIRMS
UPDATE THE
MARKETS P4-5
FREE
Oil giants to
create $1bn
spill squad
▲
ENERGY
BY OLIVER SHAH
FOUR oil giants have pledged $1bn
(£659m) for a rapid response unit to
battle future spills in the Gulf of
Mexico, in a bid to regain America’s
trust following the BP disaster.
Chevron, ConocoPhillips,
ExxonMobil and Royal Dutch Shell
will contribute equally to create the
non-profit Marin Well Containment
Company (MWC). BP, whose Macondo
well leaked millions of barrels of
crude into the sea around Louisiana
over three months, will not immedi-
ately be involved.
The independent joint venture will
be able to react to a spill within 24
hours and capture up to 100,000 bar-
rels of oil flowing 10,000 feet below
the sea, according to a document
released last night. It will be equipped
with a containment vessel, a shuttle
tanker and an array of high-tech
underwater tools.
“Its primary objective is to fully
contain the oil with no flow to the
sea,” the document said.
The move is designed to encourage
Washington to lift the moratorium
on deepsea drilling it re-imposed on
12 July. Rex Tillerson, chief executive
of Exxon, which is leading the pro-
ject’s engineering, said it “clearly
would address” concerns over the
industry’s capacity to contain huge
slicks.
The four oil majors last night
announced the MWC will be opera-
tional within 18 months.
MORE ON BP: P3
Certified Distribution
31/05/10 till 04/07/10 is 103,725
  )  # )
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     ! ##  !"$#  """ ## ' ($! #  "#
 2 News
Obama turning US into a bureaucracy
EDITOR’S LETTER
ALLISTER HEATH
LET us hope Barack Obama actually
read the Dodd-Frank Financial Reform
Bill he signed into law last night.
Astonishingly, it is 2,319 pages long
and instructs government agencies to
create new rules in 243 separate areas,
guaranteeing many thousands more
pages of guidance. That is as excessive
as it sounds and confirms yet again
that America is gradually becoming as
bureaucratic as Europe, a sad thought
– especially for the tens of thousands
of Londoners employed by large US
financial institutions affected by the
new rules.
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London, EC3R 8AJ
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Lifestyle Editor Zoe Strimpel
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Pictures Alex Ridley
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WHAT THE OTHER PAPERS SAY THIS MORNING
FIAT CONFIDENT OF BANK FINANCING
Fiat’s ambitions to marry off its auto
division with Chrysler of the US took
a step forward yesterday, as it said
banks were ready to provide €4bn
($5.1bn) in loans to help finance the
demerger of its non-automotive oper-
ations next January. The Italian group
also reported better-than-expected
second quarter results.
PAULSON IN UCITS MOVE
Paulson & Co is to launch a version of
its hedge funds that will be open to
retail investors. Hedge fund investing
is typically restricted to wealthy peo-
ple and institutions, but the fund,
which will be a Ucits structure domi-
ciled onshore in Europe, will be open
to anyone. The fund will launch this
year, according to people familiar
with the move, and follows a wave of
similar set-ups from European hedge
fund managers.
The infamous Sarbanes-Oxley Act of
2002, which imposed stringent box-
ticking on all quoted US business and
created vast amounts of work for
accountants, was just 66 pages long.
Mark Perry, an economist at the
American Enterprise Institute, has
crunched the numbers; they confirm
that the US economy is about to be
overwhelmed by an unprecedented
torrent of red tape. It took only 31
pages in 1913 to create the US central
bank and the entire Federal Reserve
System with all its component banks,
as well as the “new” US currency. In
stark contrast, Perry notes, the table of
contents (15 pages) and the list of defi-
nitions (11 pages) in Dodd-Frank are
almost as long as the entire Federal
Reserve Act. And what about the Glass-
Steagall Act of 1933, so beloved of the
Left? It overhauled America’s banking
system in a much more dramatic way
than Dodd-Frank ever will and yet
took only 37 pages of legislation – 1.6
per cent the number of pages in the
present bill. In fact, Perry calculates
Fed chairman
sparks sell-off
ECONOMY
▲
BY OLIVER SHAH
US EQUITIES tanked and government
bonds rallied yesterday after Federal
Reserve chairman Ben Bernanke said
the country’s economy faced “unusu-
ally uncertain” prospects.
All sectors of the S&P 500 shares
index fell as Bernanke delivered a
cloudy outlook a week after his staff
slashed growth forecasts.
The 56-year-old told the Senate
Banking Committee: “Even as the
Federal Reserve continues prudent
planning for the ultimate withdrawal
of monetary policy accommodation,
we also recognise the economic out-
look remains unusually uncertain.”
His comments, delivered in a tone
more downbeat than many had
expected, sparked a broad flight from
risk. The S&P 500 closed down 1.3 per
OMRON HIT BY CHINA LABOUR UNREST
Another Japanese manufacturer has
been hit by labour strife in
Guangdong province as a wave of
Chinese strikes that began in May
refuses to subside. The unrest is put-
ting increasing pressure on Japanese
managers to review the way they run
plants in China. Several hundred
workers walked off the job at an
Omron factory in Guangzhou, which
supplies electronic components to
carmakers in the region.
FUND FOR RELIEF OF POVERTY EYES
RICH RETURNS
BlueOrchard, the largest private sec-
tor investor in microfinance loans,
has raised $195m for a type of private
equity fund that will buy minority
stakes in microfinance lenders to refi-
nance their expansion and moderni-
sation. Jean-Philippe de Schrevel,
co-founder and chief executive of
BlueOrchard, said the fund would
provide capital and expertise to help
microfinance institutions expand.
that the combined size of the five pre-
vious major US financial bills come to
only 340 pages, one-seventh the size of
the preposterous Dodd-Frank.
It is not just in finance that gargan-
tuan and excessively complex legisla-
tion has become the norm in the US:
Nick Schulz, also of the American
Enterprise Institute, compared the
2,074-page Obama Healthcare Bill
(which sets up 183 new agencies, com-
missions and other official govern-
ment bodies) to the 82-page Social
Security Act of 1935 and the 74-page
Civil Rights Act of 1964, legislation
which had a much greater impact yet
was much more concise. Of course,
the size of a bill hardly tells the entire
picture but it is a good pointer to its
cumbersomeness.
Dodd-Frank is largely misguided
but not all bad. Procedures are being
set up to allow even the largest of
firms to be wound down and to go
bust in a controlled, managed man-
ner. Dozens of small US banks have
been liquidated over the past year;
cent at 1,069.56, the Dow Jones
dropped 1.1 per cent to 10,120.30 and
the Nasdaq shed 1.6 per cent to finish
at 2,187.33. Safe-haven US Treasuries
rallied, with the 30-year bond rising
nearly two points in price as traders
bet on a low-growth, low-inflation
and low-interest rate environment for
some time to come.
Lou Brien, a market strategist for
DRW Trading in Chicago said: “The
key is the more subdued outlook for
economic growth in general and
inflation in particular.”
US MARKETS: P17
US Federal Reserve
chairman Ben
Bernanke said America
faced an “unusually
uncertain” outlook
GALA CORAL CEO TO STAND DOWN
The new owners of Gala Coral Group,
the betting and gaming operator,
have launched a search for a chief
executive after deciding that the com-
pany needed some fresh blood at the
top. Gala Coral, which had insisted
last month that Dominic Harrison
would be staying on after the recent
financial restructuring, announced
today that he would be leaving at the
end of September “to seek new career
opportunities”.
LORD BLACK WALKS FREE
Lord Black of Crossharbour walked
out of a Florida prison last night in
his greatest victory yet in the legal
struggle he calls “the fight of my life”.
Black, who was sentenced to six and a
half years in 2007 for defrauding
investors in his newspaper empire,
left the Coleman Correctional
Institute after just 870 days.
there is no reason why even giant
firms cannot be closed and their
investors wiped out without requiring
bailouts. But US sources I trust have
pointed out to me that the way the
legislation is drafted could allow
firms to be improperly seized by the
authorities; it will also give huge pow-
ers to politicians who will decide
whether or not a firm is to be wound
down. This means that firms will have
an incentive to kowtow to politicians
and make donations to keep them on
side – and that can only be bad news
for property rights and democracy.
AWARDS DEADLINE
Good news for those of you who have
still not entered our inaugural City
A.M. awards: we’ve extended the clos-
ing date for entries to 29 July. We were
flooded with panicked calls yesterday
from readers concerned about miss-
ing the deadline – so don’t worry, you
have another week. For full details, go
to www.cityamawards.com
allister.heath@cityam.com
The biscuits unit, which includes McVitie’s, could be sold separately from the snacks unit
United Biscuits on the block
CONSUMER GOODS
▲
BY JOHN DUNNE
UNITED Biscuits, the snack food firm
whose products include Jaffa Cakes
and Hula Hoops, is up for sale.
Private equity firms Blackstone and
PAI Partners, who bought the compa-
ny for £1.6bn in 2006, are looking for
offers of £2bn and above.
Banks including Goldman Sachs
and JP Morgan, are said to be compet-
ing for the contract to handle the
sale plans which will begin in the
SWISS ENDURE SAFE-HAVEN AGONY
Switzerland is fighting a losing battle
to stop massive inflows of funds from
investors fleeing sovereign risk in the
euro area and the rest of the world,
raising the risk of a violent spike in
Swiss franc if global debt jitters
return. The Swiss National Bank said
it lost over 14bn francs (£8.8bn) in the
first half of the year in a forlorn
attempt to hold down the currency
against the euro.
18,000 MORTGAGE HOLDERS FACE BILL
HIKE AFTER CLYDESDALE BANK ERROR
Thousands of Scottish mortgage hold-
ers are facing increases in their
monthly repayments thanks to a
banking error, with some being
charged an extra £300 per month.
Clydesdale Bank and its sister compa-
ny, Yorkshire Bank, apologised after
miscalculating monthly repayments
on variable rate mortgages.
CITYA.M. 22 JULY 2010
NEWS | IN BRIEF
Judge seals Goldman’s SEC deal
Manhattan district judge Barbara Jones
yesterday gave the thumbs-up to the
$550m (£362m) compensation arrange-
ment between Goldman Sachs and the
US Securities and Exchange
Commission. Goldman Sachs was fined
as punishment for allegedly deceiving
investors during the structuring of
Abacus, a sub-prime mortgage-backed
collateralised debt obligation. Abacus
was designed with input from hedge
fund investor John Paulson, who was
planning to sell the instrument short.
Facebook records 500m users
Social networking website Facebook has
crossed the landmark figure of 500m
users. Since its launch in 2004,
Facebook has become the largest and
fastest-growing online tool, and with
some of the most dedicated followers.
Facebook says half its users log onto the
site for an average of 34 minutes every
day. Around 150m users access the site
by mobile. Facebook said the half-billion
number was “an important milestone”
and said it was “humbled and inspired”
by the experiences of its users, which it
is asking them to share on the site.
autumn and conclude early next
year.
United Biscuits’ range of well-
known brands includes McVitie’s,
Jacob’s, Carr’s, McCoy’s, KP, Mini
Cheddars and the lower-fat Go Ahead
range. Blackstone and PAI Partners
would be prepared to sell the firm’s
snacks division and its biscuits unit
to different buyers, it is understood.
United Biscuits was founded in
1948 following the merger of two
Scottish family businesses – McVitie
& Price and MacFarlane Lang.
COMPUTER VIRUS ATTACKS SIEMENS
CONTROL SYSTEMS
Computer hackers have designed a
virus that targets industrial control
systems built by German engineering
giant Siemens, activating a kind of
malicious software that analysts say
represents a growing corporate espi-
onage threat. The virus, dubbed
Stuxnet, is spread by devices plugged
into USB computer ports.
INVESTOR URGES SHAKE-UP OF ELAN’S
BOARD, MANAGEMENT
An activist shareholder in Elan is
launching a campaign to shake up
the Irish biotech company’s board
and management, saying “ineptitude
and mismanagement” have destroyed
shareholder value in recent years. In a
letter to the board, Danish investor Ib
Sonderby accused it of failing to
“monitor” chief executive Kelly
Martin.
CITYA.M. 22 JULY 2010 News 3

Business lashes out as Obama

signs finance reforms into law
the American people will never again exchanges. It will cap banks’ stakes in
▲

POLITICS
BY OLIVER SHAH
AMERICAN business groups rounded
on President Barack Obama as he
signed the country’s historic finance
reform bill into law last night.
Sealing the most comprehensive
overhaul of banking regulation since
the 1930s, Obama acknowledged the
importance of the financial industry.
But he declared: “Because of this law,
be asked to foot the bill for Wall
Street’s mistakes.”
The legislation will create a
Consumer Financial Protection
Bureau to oversee mortgage and cred-
it-related businesses, set up a
Financial Services Oversight Council
to act as an early warning radar for
corporate problems, give regulators
the power to dismantle troubled
firms and force derivatives onto
hedge funds and private equity at
three per cent of their capital.
Obama won applause as the law
was passed in the symbolic location
of the Ronald Reagan Building in
Washington. However, the US
Chamber of Commerce said: “Such a
broad, sweeping bill epitomises a law
with unintended consequences that
creates more uncertainty for
American businesses.” Barack Obama chose to sign the law in the Ronald Reagan Building Picture: REUTERS

BP boss to say
spill liabilities
exceed $20bn
BP IN CRISIS
BY EMMA SADOWSKI
EMBATTLED BP chief executive Tony
Hayward is expected to tell share-
holders that liabilities connected to
the Gulf of Mexico spill have passed
$20bn (£13.2bn) when he outlines a
new business strategy alongside the
oil major’s second quarter results
next Tuesday.
Hayward, who has recently been
absent from the public eye, will tell
shareholders that costs connected to
the spill, including legal, clean-up
and any fines, will climb beyond
$20bn.
He is also expected to report that
BP saw its year-on-year profits climb
to $5bn during the second quarter of
the year.
Investors are expected be told that
a leaner looking company can sur-
vive the impact of the Gulf oil spill,
and Hayward will announce new
drilling agreements in Egypt,
Azerbaijan and Libya. BP refused to
comment on the planned announce-
ments.
The change of tact may help
Hayward hang on to the top job at BP,
but there are growing suggestions he
will be forced to quit in three
months.
BP has rigorously denied that
Hayward, who took the helm in May
2007, will step down and reiterated
that he had full support from the
board.
The group faced further legal
action in the US yesterday after it
emerged that the Ohio and New York
state pension funds have filed suits
against BP for “securities fraud”.
The funds allege that BP had made
“misleading and false statements
about its safety and protocols”.
Meanwhile, Admiral Thad Allen,
the US official overseeing the oil
clean-up, said the team was in a good
position to complete the relief well
within the next few days but warned
that a developing storm could ham-
per operations.
“Once the well is capped we expect
BP’s share price performance to
reflect the tension between investor
fears on costs and litigation on the
one hand offset by asset sales and
merger speculation on the other,”
said Deutsche Bank.

Santander revives £3bn flotation

plan for UK arm to fund growth
lic offering (IPO) of part of its
▲

BANKING
SPANISH bank Santander is re-exam-
ining plans to list its UK operations to
raise cash for the purchase of assets
including 318 Royal Bank of Scotland
branches, it is understood.
Depending on economic condi-
tions, the group could float 20 per
cent of the division comprising
Abbey, Alliance & Leicester and parts
of Bradford & Bingley in the autumn.
Such a move would generate around
£3bn to fund bolt-on growth.
The idea was first mooted in
February after conversations between
Santander and investment banks. The
institution’s $7bn (£4.6bn) initial pub-
Brazilian subsidiary last year was
taken as a model.
Economic conditions deteriorated
in the second quarter due to market
fears over the indebtedness of various
periphery Eurozone countries.
Santander is still said to be unsure as
to whether the London stock market
will be sufficiently buoyant to sup-
port a large flotation in the third
quarter. It is lining up alternative
means to finance expansion should
investors continue to be fickle.
One route would be to use group-
level retained profits to cover costs
such as the £1.8bn RBS asset pur-
chase, it is understood.
 4 Focus on Wall Street CITYA.M. 22 JULY 2010

Morgan Stanley continues

down the road to recovery
tations with post-tax profit of $1.4bn analysts as a sign that new chief exec- its employee compensation pot over
▲

BANKING
BY VICTORIA BATES
WALL Street lapped up a solid set of
second-quarter results from Morgan
Stanley yesterday, buoying market
sentiment after a disappointing per-
formance over the same period from
some of the bank’s peers, notably
Goldman Sachs.
Morgan Stanley beat analyst expec-
(£921m) for the three months to June,
swinging back into the black after
posting a loss of $138m in the second
quarter of 2009. Net revenue came in
at $8bn, boosted by a positive contri-
bution from the bank’s debt-related
credit spreads.
The figures come after a particular-
ly torrid time for the bank over the
financial crisis and were welcomed by
utive James Gorman has begun to
turn its fortunes around.
“While markets were challenging
this quarter, Morgan Stanley benefit-
ed from a deliberate and disciplined
focus on execution,” Gorman said,
though he acknowledged that the
bank still has “a great deal of work to
do” across its global franchise.
Morgan Stanley poured $3.9bn into
the period, equivalent to 49 per cent
of its revenue. Like its peers, the bank
took a substantial hit from the UK gov-
ernment’s payroll tax, for which it
coughed up $361m over the quarter.
Morgan Stanley’s investment bank
saw revenues ease to $885m, hit by a
30 per cent decline in underwriting
revenues to $597m as fears of a double
dip and a crisis in the Eurozone
caused market activity to dry up.
But this was offset by a seven per
cent increase in the advisory fees
raked in by the bank, reflecting a
surge in completed M&A deals.
Analysts were also encouraged by the
performance of Morgan Stanley’s
wealth management division, which
turned a loss last year into a pre-tax
profit of $207m.
ANALYSIS l Morgan Stanley
$
32

26.80
30 21 July
28

26 US banks and other financial

services firms continue to post
24 healthy returns
Picture: REUTERS
6 May 26 May 16 Jun 6 Jul

Wells Fargo tops expectations

thanks to declining loan losses
WELLS Fargo, the fourth-largest US
bank, posted higher-than-expected
quarterly earnings, helped by
declining losses on commercial and
consumer loans.
While suffering higher credit
losses than in the year-ago quarter,
Wells said it saw signs that the
worst was over in terms of loan
write-downs, even as its outstand-
ing loans continued to shrink.
“We believe credit quality has
indeed turned the corner with net
charge-offs declining to $4.5bn
(£3bn), down 16 per cent from first
quarter and down 17 per cent from
last year’s peak quarter, and we
expect this positive trend will con-
tinue over the coming year,” said
chief financial officer Howard
Atkins.
Wells Fargo, which is in the
process of integrating Wachovia,
acquired during the 2008 financial
crisis, reported a five per cent drop
in revenue to $21.39bn, but man-
aged to eke out an improved net
interest margin, which investors
saw as a positive sign.
Net charge offs were 3.27 per cent
of total loans, up from 2.86 per cent
a year ago but down slightly from
the first quarter.
Wells Fargo reported second-quar-
ter earnings of $3.06bn, or 55 cents
a share, compared with $3.17bn, or
57 cents a share, a year earlier.

US Bancorp cheers after profit

rises on back of new lending
MINNEAPOLIS-based US Bancorp
said profit soared as new lending
boosted revenue.
Bucking a trend among its larger
rivals, US Bancorp said it made
more new loans in the second quar-
ter compared with a year earlier.
Its loan book grew four per cent
from the 2009 quarter to $191.2bn
(£126.5bn) as credit card issuance
and residential mortgages rose.
Quarterly revenue climbed almost
nine per cent to $4.5bn.
Loan losses increased slightly, to
$1.11bn from $929m, but losses on
commercial loans, home equity and
residential mortgages broadly fell.
The bank put aside $1.13bn against
bad loans, down from $1.4bn a year
earlier.
“We believe the company has
reached the inflection point in cred-
it quality and we expect net charge-
offs and nonperforming assets to be
lower in the third quarter than the
current quarter,” chief executive
Richard Davis said.
US Bancorp’s second-quarter prof-
it was $766m, or 45 cents a share,
compared with $471m, or 12 cents a
share, a year earlier. Excluding one-
off items, it earned 40 cents a share.
But Davis warned that President
Barack Obama’s Wall Street reform
bill could hurt the group in the
future, “by either lowering revenue,
increasing expense and/or raising
capital requirements”.
CITYA.M. 22 JULY 2010 Focus on Wall Street 5

Fidelity notches up a 52pc rise in

US BANKS REPORT SECOND QUARTER EARNINGS
Q2 net profit (2009):
Compensation (2009):
UK bonus tax payment:
Q2 net profit (2009):
Compensation (2009):
UK bonus tax payment:
net income on back of Sedgwick sale
FIDELITY National Financial posted
a 52 per cent rise in quarterly profit
as the number one US title insurer
$4.8bn ($2.7bn) gained from a recent sale of its stake
[First half] $5.85bn ($6.01bn) in Sedgwick Claims Management
Services.
$550m Net income attributable to share-
holders for the second quarter was
$139.6m (£92m), or 61c a share,
compared with $91.9m, or 40c a
$2.7bn ($4.3bn) share, a year ago. Analysts were
looking for a profit of 35c a share.
$5.96bn ($6.36bn)
$404m
Fidelity booked a pre-tax gain of
about $98m from the sale of
Sedgwick, which was bought over
by private equity firms Stone Point
Capital and Hellman & Friedman
for about $1.1bn in April.
Title insurance guarantees that
property owners have title to prop-
erty and can legally transfer that
title. Many lenders require that buy-
ers have the insurance before
extending loans.
Shares of the Florida-based com-
pany closed at $13.54 yesterday on
the New York Stock Exchange. They
have fallen 20 per cent since hitting
a 52-week high of $17 last October.
Earlier this month, Fidelity
agreed to sell some assets to settle
allegations that a 2008 acquisition
violated antitrust law.
Fidelity agreed to sell assets in
Oregon and Michigan as part of the
settlement.

BlackRock boosts profits but Northern Trust

Q2 net profit (2009): $3.1bn ($3.2bn)
fails to soothe investor nerves reports profit drop
Compensation (2009): $8.8bn ($7.8bn)
UK bonus tax payment: $425m but beats forecasts
BLACKROCK failed to impress more-lucrative actively managed
investors with better-than-expected stock and bond funds. NORTHERN Trust said second-
second-quarter profits, amid contin- Still, BlackRock’s profits rose quarter profit dropped amid lower
Q2 net profit (2009): $453m ($2.7bn) uing concerns that founder and sharply in the quarter, boosted by a servicing fees and waivers on
Compensation (2009): $3.8bn ($6.65bn) chief executive Laurence Fink’s big comparatively stronger market and money funds, but still beat analyst
move into exchange-traded funds is the $13.5bn (£11.4bn) buyout of expectations. Chicago-based
UK bonus tax payment: $600m making the firm more dependent Barclays Global Investors last year, Northern Trust, whose services
on low-fee products. with its iShares ETF business. include both asset management
Shares of the world’s largest asset Net income rose to $432m or and record-keeping, reported prof-
Q2 net profit (2009): $1.4bn (–$138m) manager were down 2.4 per cent in $2.21 per share for the quarter, com- it of $199.6m (£131.5m) or 82 cents
Compensation (2009): $3.9bn ($3.8bn) afternoon trading as the firm’s pared with $218m, or $1.59 per per share, versus $314.2m or 95
results showed clients were picking share, a year earlier. Revenue rose cents per share, for the same peri-
UK bonus tax payment: $361m up passively managed products, like 97 per cent to $2.03bn, while ana- od a year earlier. Revenue in the
its iShares ETFs, and getting out of lysts expected $2.01bn. quarter was $974m.

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 6 Focus on Reckitt Benckiser
Reckitt agrees
£2.5bn bid for
Durex maker
▲
CONSUMER
BY JOHN DUNNE
CONSUMER goods group Reckitt
Benckiser yesterday agreed to buy
Durex condoms and Scholl sandals
maker SSL International for £2.5bn in
cash to increase its presence in the
health and personal care markets.
The Anglo-Dutch maker of Nurofen
painkillers, Strepsils and Lemsip cold
remedies, said SSL stockholders would
receive 1,171p a share.
Regulators and investors are still to
be officially presented with the deal
and rival bidders could still jump in.
SSL – which made sales of £802.5m
last year – also has pain relief brands
such as Cuprofen and Paramol.
Reckitt chief executive Bart Becht
said: “It is anticipated that the acquisi-
tion will increase Reckitt Benckiser’s
health and personal care net revenues
by over 36 per cent to approximately
£2.8bn, one third of the group’s total
net revenues.”
Reckitt added the purchase would
also boost its presence in markets in
Japan and China.
Gerald Corbett, chairman of SSL,
said the offer was four times the level
of SSL’s share price five years ago. He
added: “I am sure our brands and peo-
ple will be in good hands.”
But the groups warned that the
integration of the two firms is expect-
ed to lead to job cuts in commercial
and administration functions.
The company said it expected cost
savings in the region of £100m a year
from the combined group by the end
of 2012. London-based SSL currently
employs 10,000 people worldwide
including at two UK factories in
Manchester and Cornwall.
Deutsche Bank was hired as an
adviser to Reckitt, while JP Morgan
Cazenove, Lazard and Credit Suisse
were all signed up by SSL.
Darren Shirley, an analyst at Shore
Capital, said: “We believe the proposed
acquisition represents good business
for Reckitt, increasing the exposure to
consumer healthcare while offsetting
some of the ongoing challenges from
the sluggish European consumer.”
Reckitt Benckiser owns a portfolio of key household brands
MELANIE GEE
LAZARD
MELANIE Gee led a team of six senior
bankers working for SSL on the pro-
posed deal with Reckitt Benckiser.
William Rucker, chief executive of
Lazard London and Alexis de Rosnay,
head of global healthcare, were also on
the team.
The move for SSL has been shroud-
ed in secrecy for the past five weeks
as the negotiations went on behind the
scenes. Lazard is satisfied that it has
negotiated an “excellent” price for SSL
£2.5bn
Reckitt's offer for SSL
£100m
estimated cost savings
by combining the
groups
36 per cent
rise in revenues at
Reckitt's health and
personal care sales
arm through the
purchase
£802.5m
SSL sales last year
shareholders and indicated that the
deal could signify that confidence in
the consumer market was picking up.
Gee also advised the Al Fayed Trust
on the sale of Harrods. She also
advised the management of Marken
Group and Intermediate Capital
Group on the sale of Marken to a con-
sortium comprising funds advised by
Apax Partners.
Lazard operates in 40 cities in key
business and financial centres across
26 countries in Europe, North
America, Asia, Australia and South
America. It advises corporations,
partnerships, institutions, govern-
ments and high-net-worth individuals
on a range of deals. It was founded in
New Orleans in 1848 following the
Californian Gold Rush. It specialises in
mergers and acquisitions.
CITYA.M. 22 JULY 2010
Delayed move
could end up
proving costly
WHAT a difference a couple of
years makes. Back then, SSL was
trading at 400-500p and Reckitt
was said to be sniffing around. Its
shareholders will wish it made its
move then: its hefty £1,171p per
share offer – equivalent to 18
times forecast ebitda in the year to
March 2011 – is going to prove
costly. That said, the strategic fit is
clear. The pair can combine their
sales forces and distribution net-
works, merge product portfolios
and eke out £100m of cost syner-
gies, according to Reckitt.
Reckitt is also keen to act before
two key SSL products come to
market. The CSD500, a condom
that helps men stay erect, and
Vivagel, a female gel that reduces
the chance of sexually transmit-
ted infections, are set to be block-
buster products.
With the household goods mar-
ket getting more competitive,
Reckitt would do well to shift
more of its focus onto health and
personal care. This deal would
split its business 50/50 between
the two categories. It had better
hope a counter bidder stays away.
BOTTOMLINE
Analysis by David Crow
CITYA.M. 22 JULY 2010
Hedge funds perform well
HEDGE FINDS
▲
BY HARRY BANKS
HEDGE funds pulled in $9.5bn
(£6.3bn) during the second quarter,
with nervous investors preferring to
send their money to the biggest and
best established managers, according
to industry tracker Hedge Fund
Research (HFR).
Hedge fund managers have seen
flat returns on average as they have
battled a volatile market so far this
year, but that hasn’t stopped wealthy
investors from sinking more cash
Ocado shares
tumble after
its flotation
RETAIL
▲
BY STEVE DINNEEN
OCADO’S share price tumbled yester-
day as investors gave the thumbs
down to its stock, even at its massive-
ly reduced valuation.
Shares in the firm – which floated
at 180p – were selling as low as 155p
during its first morning of condition-
al trading.
Analysts queued up to take a pop at
the firm, with some warning hedge
funds are likely to short the stock.
Chief executive Tim Steiner was
forced to defend the firm during a
terse briefing, saying: “Shares are
volatile in the short term. The mar-
ket is entitled to its view. Some hedge
funds may try their luck. We’ll see in
two years.
“People are missing things about
Ocado. They are looking in the rear
view mirror. In ten years’ time we
will be in the future, not the past.”
Steiner said the firm reduced its
price from 200-275p to 180-200p, a
reduction of 23 per cent, in order to
into the industry. Strategies like glob-
al macro and event-driven funds that
seek to insulate investors from stock
market swings, have been particular-
ly attractive.
The fund industry’s most estab-
lished firms with more than $5bn in
assets under management, saw
$8.8bn of the total inflows in the sec-
ond quarter, according to HFR.
“The hedge fund industry contin-
ues to be dominated by investor pref-
erence for robust fund infrastructure,
encompassing enhanced liquidity
and transparency,” Ken Heinz, presi-
attract a higher percentage of high
quality investors who would benefit
the firm in the long-term. The firm
scraped the flotation at the lower
end of the lower value. It valued the
online grocer at £937m, including
the £200m of new equity raised.
Steiner also attacked the analysts
who claimed the price was too high,
saying there were people “very happy
to see their name in print.”
Steiner said he chose not to sell
any of his shares, and claimed he
would still have held onto his stock at
a price of 275p.
The management team, including
the Employee Benefit Trust, now own
around 15 per cent of the firm. The
John Lewis Pension Fund reduced its
holding to 10.36 per cent.
Steiner said investors were 40 per
cent from the UK, 30 per cent from
the EU and 30 per cent from the US.
Collins Stewart subsidiary Quest
released a revised target price of
122p, adding: “We maintain our neg-
ative stance on the stock with our
sell.”
News 7
AIA appoints banks for
dent of HFR, said.
its upcoming flotation
Overall, hedge fund performance
declined by about 0.2 per cent in the
first half of 2010, according to HFR. AIA and formally announced the IPO.
▲
INSURANCE
While the performance may seem Bankers have previously said the
shabby compared to blockbuster 2009 AMERICAN International Group (AIG) AIA IPO could raise about $15bn
returns, hedge funds have shown that is set to appoint Deutsche Bank, (£9.9bn). The sources declined to be
they are getting better at holding Goldman Sachs and Morgan Stanley identified as the decision had yet to
onto investor capital. as joint global coordinators for the be made public. AIA declined to com-
Global macro, event-driven and planned initial public offering of its ment.
fixed income arbitrage funds have Asian life insurance business, AIA, Deutsche Bank and Morgan Stanley
been the best performing funds so far sources with knowledge of the matter did not immediately respond to
this year and also attracted the most said yesterday. requests seeking comment, while
new capital, according to data from On Monday, AIG named Mark Goldman Sachs declined to com-
Credit Suisse. Tucker as the new chief executive of ment.
ANALYSIS l Ocado's first day of conditional trading
Picture: REUTERS
p
165.50
21 July
180
170
160
150
140
ANALYST VIEWS: HOW DO YOU RATE OCADO’S CHANCES NOW THE
COMPANY HAS FLOATED? Interviews by Steve Dinneen
CLIVE BLACK | SHORE CAPITAL AMISHA CHOHAN | HB MARKETS
“ “
We believe that a revised 180p issue Uptake from retail investors looks likely
price is still far too high for Ocado at this junc- to be weak, with one article suggesting the com-
ture, which has been reflected by the market. To pany will raise only £10m (or much lower than)
our minds the reputation of the company and the the anticipated £50m. Even at the revised valua-
stock can only be tarnished by recent events, tion, the company is still overvalued and expen-
” ”
which is a shame for all concerned. We still mark sive. We would not be surprised to see hedge
the Ocado stock a ‘sell’. funds shorting the stock.
MALCOLM PINKERTON | VERDICT RESEARCH
“
The slump in share price is no surprise given that Ocado is yet to make a profit. Other contributing factors are
”
the underlying frailties of the business model, such as its reliance on one supplier, mounting competitive threats and the
financially unviable cost base. Even at this much lower price, it is a risky investment.
 8 News
ANALYSIS l GlaxoSmithKline’s second quarter results
Pharmaceutical
turnover
£5.8bn
Europe sales
▲1% to
▲17% to
£1.6bn
US sales
▼13% to
£1.9bn
Legal charges
leave Glaxo
£304m in red
▲
PHARMACEUTICAL
BY EMMA SADOWSKI
MAMMOTH legal costs and restruc-
turing charges hit GlaxoSmithKline’s
(GSK) second quarter financial per-
formance causing the pharmaceuti-
cal giant to report losses for the
period.
The drugmaker said losses amount-
ed to £304m for the three months
ended 30 June after it swallowed a
£1.57bn legal charge connected to a
number of court disputes while at the
same time paying out £590m in
restructuring costs.
However, the drugmaker’s underly-
ing business remained fairly stable
with turnover up four per cent for the
period to £7bn.
Chief executive Andrew Witty said
he felt encouraged by GSK’s perform-
ance and that he remained confident
about the firm’s full year prospects.
GSK’s drug sales in the US, which
make up 45 per cent of its business,
performed poorly after falling by 13
per cent during the second quarter to
£1.9bn.
Sales in the region declined after
GSK lost herpes drug Valtrex to gener-
BP dents FTSE Rail bonuses
100 dividends are approved
▲
MARKETS
UK DIVIDENDS among FTSE 100 firms
are forecast to fall by eight per cent
this year to £54.7bn, mainly due to
the BP freeze on shareholder payouts.
The BP disaster has put a big dent
in the income payments that
investors can expect with over £5.4bn
of dividends being cancelled up until
31 December 2010. However, the num-
ber of firms increasing or reinstating
dividends rose to 189, double the
number who cut or cancelled them.
Last year by contrast, in the teeth of
the recession, almost as many firms
slashed or abandoned their payouts
as increased them.
CITYA.M. 22 JULY 2010
TOTAL TURNOVER Billiton ups iron ore output
Consumer
Healthcare turnover
£7bn £1.25bn but uncertain over growth
Emerging
Markets sales Europe sales
duced to reduce growth to more sus-
▼2% to
▲
MINING
BY MARION DAKERS tainable levels means volatility in
commodity end-demand is likely to
MINING giant BHP Billiton reported a persist.”
£848m £493m 16 per cent jump in quarterly iron ore
production yesterday, but voiced cau-
Copper output dropped five per
cent from a year earlier. Billiton said
tion over the short-term outlook for its Olympic Dam mine in Australia
Asia Pacific sales Rest of the world
▲11% to
commodities markets. will return to full production soon
▲9%to
“Uncertainty surrounds the near- after a mining accident in October
term prospects for growth in the cut output by 80 per cent.
developed world as governments Petroleum set a third consecutive
£727m £496m adjust fiscal policies,” BHP Billiton
said in its June quarter production
production record, mostly due to
projects in the Gulf of Mexico which
report. are now suspended. Shares closed 2.5
“Within China, measures intro- per cent up at £19.20.
ic competitors, at the same time it
discontinued its osteoporosis treat-
ment Bovnia.
It also saw a 26 per cent fall in sales
to £152m for its diabetes drug
Avandia but the company did receive
some good news last week after an
advisory committee of America’s
Food and Drugs Administration voted
to recommend keeping the drug on
the market – albeit with additional
warning labels over potential side-
effects.
Meanwhile, GSK and partners
Shionogi have entered into the final
stages of testing a new anti-HIV drug
expected to increase competition in
this area.
ANALYSIS l GlaxoSmithKline
p
1,300 1,184.00
21 July
1,250
1,200
1,150
1,100
6 May 26 May 16 Jun 6 Jul
TRANSPORT
CONTROVERSIAL six-figure bonuses
for Network Rail bosses have been
approved, despite criticism from the
Prime Minister and unions.
Members of the not-for-profit com-
pany’s ruling body voted in favour of
the pay package by 37 votes to 31,
with nine abstentions.
Outgoing chief executive Iain
Coucher will get £641,000.
A spokeswoman for Number 10
said: “The Prime Minister said at the
time that he was deeply disappointed.
Now, clearly, they have voted for those
bonuses, and his view remains the
same.”
 The Capitalist
GET PRACTISING YOUR POKER FACE:
A NEW CLUB IS COMING TO TOWN
WOULD you believe it, but I hear
London’s very first official poker club
is only just preparing to open its doors
to the public.
The venture is the brainchild of
Chris North, a former captain of the
Harlequins under-21 rugby team
before he joined the world of online
gaming 12 years ago. It was while
working next to private members’
club The Fox Club in Mayfair that
North gleaned the idea for the Fox
Poker Club. He then applied for a casi-
no licence, secured a partnership
with gaming site PKR.com and roped
in a couple of gaming veterans – for-
mer Rank Group finance director
Brian Mattingley and Ian Hogg, the
ex-chief executive of the At The Races
channel – to get the venture going.
A couple of hiccups on the location
front later, and they’re now happily
ensconced on Shaftesbury Avenue,
on the site of the former Teatro mem-
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
bers’ club, all ready for the launch on
7 August.
Seating for 200 players, a memora-
bilia “Hall of Fame” and a restaurant
are all available to poker enthusiasts,
who can choose to go for either free
membership or a choice of two
souped-up membership packages, the
“Full House” for £250 a year and the
“Royal Flush” for £750 a year.
By City standards, that’s a dirt
cheap option for schmoozing clients
The Fox Poker Club will be London’s first official den devoted to poker
in style – no wonder the capital’s vari-
ous dens of iniquity will be getting
their knickers in a twist.
STROKE OF LUCK
To Stoke Park Golf Club in
Buckinghamshire on Tuesday for a
charity golfing day hosted by profes-
sional Justin Rose and sponsored by
inter-dealer broker Tradition, which
raised over £176,900 in aid of Cancer
Research.
Brokers are pretty competitive lot,
as we all know, so it must have been
hard for Tradition’s five golfing teams
to accept that not one of them ended
up being placed – not even deputy
Collins with his teammate Tim Henman
chairman Bruce Collins’ squad, led by
celebrity tennis star Tim Henman.
Still, client relationship manager
Mickey White managed to salvage
some respect in the individual stakes
when he won a competition to get
nearest to the pin in two shots, beat-
ing even Rose to the honour. Now
there’s a claim to fame if ever The
Capitalist heard one.
SITTING TARGET MAFIA BOOM
Oh, how the analysts basked yesterday The financial crisis brought to its
in the glory of having been right all
along about the over-inflated price of
grocer Ocado’s flota-
tion. Shore Capital’s
Clive Black, one of
the most outspoken
critics of the original
200-275p target price
range, was one of the first
to gleefully rub Ocado manage-
ment’s noses in it when the
price was chopped to 180p and
subsequently sank to as low as
155p in conditional trading.
“Ocado’s rhetoric through this
flotation process has been that ana-
lysts sceptical as to the business’ true
value, such as us, were somehow
missing something, seemingly not
fully understanding the full story,”
wrote Black in a mischievous note.
“Quite what it was that we did not
‘get’ is still a mystery to us; we take
some comfort that the market holds a
9
Picture: GETTY
similar view…”
This was from the man who previ-
ously dreamt up a number of corking
acronyms for the firm: Over-Costed
Average Daily Orders; Oligopolistic
Competition And Dangerous
Overvaluation; and Overvalued
Company, A Disappointing Outcome.
BIG SPENDERS
Members’ clubs are usually rather
picky about the calibre of their clien-
tele, so it was with some amusement
that The Capitalist chanced yesterday
upon a list of “club commandments”
drawn up for the new Searcys Club at
the top of the Gherkin.
Alongside the usual tit tat about
privacy and etiquette (read: ringing
endorsements of afternoon tea and
champagne) nestle a couple of gems.
“Groucho Marx was wrong,” pro-
claims one, while another insists that
“money might be vulgar but spend-
ing it should be fun”. Quite.
BACK HANDER
An invitation arrives to an event next
week held by US billionaire Vernon
Hill’s new high street bank, Metro
Bank, which will be handing out
water bottles, rucksack covers and
reflective bracelets to hapless cyclists
zooming past the Holborn branch on
their way to work.
Yowzer, Metro really is taking its
commitment to customer service seri-
ously. Either that, or it’s stocked up
on branded merchandise that will be
worth a mint in free advertising
when strapped to the backs of
London’s herd of bicycle fanatics…
knees virtually every business sector
over the past couple of years – almost
every one, that is, apart from those
outside the law. The Bank of Italy’s
deputy general director tells
Bloomberg that the crisis has given
the Italian mafia food on which to
thrive, since access to bank cap-
ital all but dried up.
“Whoever holds large
amounts of cash, like
crime groups, can
make investments
that aren’t possible
for others,” Anna
Maria Tarantola
said, adding that
the central bank
flagged up 15,000
suspicious deals
in the first half of
this year, up over
50 per cent from
last year. Scary stuff.
 10 News CITYA.M. 22 JULY 2010

HMRC under
MPC moots
HOW THE MPC VOTED ON RATES IN JULY 2010
Mervyn King Paul Tucker Andrew Sentance
fire for backlog
revival of QE of tax cases

▲
TAXATION

programme Spencer Dale Charles Bean David Miles

HM REVENUE & Customs (HMRC) has
been criticised by the National Audit
Office (NAO) for failing to deal with
its huge backlog of more than 18m
unresolved income tax cases.
The NAO said about half the 18.2m
cases might involve underpayment or
UK ECONOMY But with inflation likely to remain overpayment of tax.
▲

BY JESSICA MEAD
BANK OF ENGLAND policymakers
considered extending the £200bn
quantitative easing (QE) programme
this month after weaker data pointed
to a deteriorating economic outlook.
At the monetary policy meeting
held on 7 and 8 July, the minutes
revealed that the committee consid-
ered “arguments in favour of a mod-
est easing in the stance of monetary
policy”.
“A further modest monetary stimu-
lus would act to offset the softening
in demand prospects and make it
more likely that the inflation target
would be met in the medium term,”
the minutes said.
above target for some months, the
committee chose to keep policy on
hold.
Simon Hayes at Barclays Capital
said that if growth is more disap-
pointing than the MPC expects, the
committee “may find itself grappling
more actively with the dilemma of
whether it can print more money
without jeopardising the credibility
of the inflation-targeting frame-
work”.
Once again, the minutes showed
that Andrew Sentance was the lone
dissenting hawk this month. As
expected, he again voted for an
increase in interest rates of 0.25 per
cent but has yet failed to convince
other members to join him.
It warned that as much as £4.4bn
was at stake.
The Revenue acknowledged it had
“a lot of work to do”.
“Just like every government depart-
ment we are going to have to do more
with less and today’s report will help
Adam Posen Paul Fisher Unknown us to focus on those areas of our busi-
ness that need to improve,” said an
HMRC spokeswoman.
The Chartered Institute of Taxation
(CIOT) also blamed the continued
backlog on cuts to the Revenue’s
Martin Weale will take
resources. “Repeated staffing cuts
up his position on the
have stretched HMRC to the limit,”
MPC next month. He
said Tina Riches of the CIOT.
replaces Kate Barker.
“Further cuts are likely to create
even more difficulties,” she added yes-
terday.

Inflation
expectations
EU told to punish Stress test banks asked
deficit offenders to predict capital needs
ease in July Committee of European Banking
▲

EUROZONE ECONOMY
Supervisors (CEBS).
and tougher rules for the Stability and EUROPEAN banks have been asked to The results of the tests are due to be
▲

UK ECONOMY EUROZONE ECONOMY

BRITONS’ expectations for inflation
in the coming year eased to 2.7 per
cent in July from three per cent in
June, their lowest since April, a survey
by Citi/YouGov showed yesterday.
That is still well above the Bank of
England’s two per cent inflation tar-
get, but the survey showed that 30 per
cent of respondents expected infla-
tion to be below target in the year
ahead, compared with only 19 per
cent in the June survey.
The survey also showed expecta-
tions for inflation over the next 5-10
years held steady at 3.3 percent in
July.
FRANCE and Germany yesterday
urged the European Union to impose
tougher sanctions on serial budget
deficit offenders, including stripping
them of their voting rights in the
Eurozone.
The Franco-German proposal, made
in a joint letter and approved by a
French cabinet meeting attended by
German finance minister Wolfgang
Schaeuble, forms part of European
efforts to repair damage from the
Greek debt crisis, which also include
the bank stress tests.
“We are sure that these bank tests
and measures such as deficit cutting
Growth Pact will allow us to restore
confidence... in the stability of Europe
and the stability of the euro,”
Schaeuble said.
The document called for tougher
penalties, including a temporary sus-
pension of the Eurozone voting rights
of a country in persistent breach of
the EU’s budget deficit limits,
although it acknowledged that this
may require a change in the EU treaty.
It also suggested strengthening
peer surveillance to ensure better
budget coordination, and broader
monitoring of gaps in competitive-
ness, structural reforms and private
debt.
estimate how much additional capi-
tal they would need under different
scenarios, as part of stress tests aimed
at reviving confidence in the ailing
Eurozone.
Lenders were asked to estimate
how much more capital they might
need to achieve a Tier 1 capital ratio
of six per cent at the end of 2011
under three different scenarios – a
base scenario, an adverse scenario
including two years of economic dete-
rioration and an adverse scenario
with an “additional sovereign shock”.
The letter has been sent to all of the
91 banks participating in the test,
which is being coordinated by the
published tomorrow afternoon after
European markets close, in order to
allow banks and regulators to clarify
any capital-raising plans over the
weekend.
Major listed banks, which face con-
stant investor scrutiny, are expected
to pass, but the tests may show the
worst problems lie with smaller play-
ers such as Spanish cajas and German
Landesbanks, which are mainly
unlisted. German nationalised lender
Hypo Real Estate, which is already
being recapitalised, is also expected
to fail the test, while analysts have
raised questions over National Bank
of Greece and Banco Popular.

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CITYA.M. 22 JULY 2010
Qualcomm posts higher
than expected revenue
▲
TECHNOLOGY
BY JOHN DUNNE
CELLPHONE chip supplier
Qualcomm’s fiscal third-quarter earn-
ings and revenue beat Wall Street esti-
mates on strong smartphone
demand, sending its shares up 3.4 per
cent after hours yesterday.
Qualcomm said earnings rose to
$767m, or 47 cents per share, for the
quarter ended 27 June, from $737m,
Blacks Leisure prays for
rain as sales take tumble
▲
CONSUMER
BY JOHN DUNNE
CAMPING and hiking specialist Black
Leisure saw sales fall as the good
weather took its toll.
In the 17 weeks to the end of June,
sales fell by a worse-than-expected 7.5
per cent – a result that seems sure to
hit year-end profits.
The 313-store company, which runs
the Blacks Outdoor and Milletts
chains, came close to administration
last year.
Chief executive Neil Gillis said:
“Other observers might get con-
cerned about short-term perform-
ance.
“I know that you can go from
minus 20 to plus 20 within a week.”
Consumer News 11
or 44 cents per share, in the year-ago ANALYSIS l Qualcomm
quarter. 42
$ 36.16
Excluding unusual items and its 21 Jul
investment arm, Qualcomm said it 40
earned 57 cents per share, exceeding 38
analyst’ average expectation for 54
36
cents. Revenue fell to $2.71bn from
$2.75bn over the same period, but 34
beat the average analyst expectation
for $2.63bn. Qualcomm shares rose 32
3.4 per cent to $37.42 in extended
trading after the news. 17 May 7 Jun 28 Jun 19 Jul Paul Jacobs, Qualcomm chief, said strong smartphone demand has boosted revenues
Gillis said once bad weather
returns, sales will pick up as demand-
for outdoor all-weather clothes and
equipment returns.
Total sales fell to £53.9m from
£76.9m, partly reflecting the closure
of 107 stores after the firm struck a
rescue deal with creditors in
November.
Blacks said it had made “very good
progress” with its new store opening
programme, with seven outlets open
so far and another eight to follow
between now and the end of the
financial year. Trading in these new
stores was described as “very encour-
aging”. An exclusive range of lines
from the likes of North Face and
Berghaus and customer loyalty cards
are being introduced in a sales push.
 12 News
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chair’s head
▲
TELECOMS
BY STEVE DINNEEN
A POWERFUL investor group has
called for the head of veteran
Vodafone chairman Sir John Bond.
The Ontario Teachers’ Pension Plan
(OTTP), which has a 0.42 per cent
stake in the telecoms giant, has
demanded a radical shake-up at
board level and says it will vote
against his re-election.
Though the OTTP stopped short of
criticising chief executive Vittorio
Colao, it lambasted the firm’s “disas-
trous” record of acquisitions and poor
cash allocation.
However, analysts told City A.M. the
board is unlikely to be shaken by the
rebel shareholder. John Tysoe, an
analyst with Mobile World, said: “I
don’t think this will worry John
Bond. If it had been someone colos-
sal it might have had more of an
impact.
“I’m not convinced the good peo-
ple at OTTP know better than
Vodafone how to run a telecoms busi-
ness. There are certain things it is a
pity Vodafone did not take advantage
of sooner, in particular expanding
faster into emerging markets.
SIR JOHN BOND
VODAFONE
CHAIRMAN
SIR John Bond became chairman of
Vodafone Group in July 2006, having
previously served as a non-executive
director of the board since 2005.
He retired from the position of
group chairman of HSBC in May 2006
after a 45-year career with the bank.
His tenure as HSBC chair was criti-
cised for its profligacy, with the bank
embarking on a £24bn spending spree
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“These were missed opportunities
but I’m not sure these calls for a
board shake-up are helpful.”
Vodafone, which will release its
interim management statement
today, said it does not comment on
individual shareholders’ views.
The firm, which has 341m sub-
scribers worldwide, reported an
annual pre-tax profit of £8.6bn in
May. The figure was up from £3.1bn
last year, while sales rose to £44.5bn
from £41bn.
However, it was forced to take a
giant hit on its key Indian business
with a £2.3bn impairment charge
attached to buying new licences, one
of several high profile acquisitions it
has been forced to write down.
ANALYSIS l Vodafone
146.30
155 p 21 Jul
150
145
140
135
130
26 Apr 17 May 7 Jun 25 Jun 15 Jul
which, like many of its ilk, had over-
lent in the sub-prime market and
resulted in £7bn in losses in 2008.
His own bonus and the £22m pay-
out received by Household’s bosses
were especially criticised.
He is now also chairman of the
nominations and governance commit-
tee at Vodafone.
Previous non-executive director-
ships include the London Stock
Exchange, Orange, British Steel, the
Court of the Bank of England and
Ford. He is also an adviser to Northern
Trust in Chicago.
He was Chairman of the Institute of
International Finance in Washington
from 1998 to 2003 and was elected
President of the International
Monetary Conference in 2002.
He is a non-executive director of AP
Møller – Mærsk and Shui On Land.
CITYA.M. 22 JULY 2010
Motivation is more than a bulging pay packet
CITY COMMENT
BEN GRIFFITHS
M
ORALE among employees is
reported to be at an all time
low in Britain as we drag our-
selves out of one of the worst
recessions on record. Job cuts, lack of
A Eurofighter Typhoon on display at the Farnborough Air Show yesterday
Farnborough show
business hits $37bn
AVIATION
▲
BY EMMA SADOWSKI
MORE THAN $37bn (£24bn) in busi-
ness has been agreed during the
first three days of the Farnborough
trade show with military spending
news overshadowed by a raft of
commercial aviation deals.
Organisers of the show said yes-
terday that $37.5bn in new deals
had already been signed by the
midweek point.
“We’ve seen buoyant activity in
all areas of the aerospace, defence
and security areas. After a slow
down in sales across all sectors in
recent years, it is really encourag-
Analysts warn over easyJet dispute
▲
AVIATION
ANALYSTS have warned that the
bitter dispute between easyJet
owner Sir Stelios Haji-Ioannou and
the budget airline could “under-
mine the value of the company’s
shares”.
A note issued by stockbroking
pay rises and bonuses and the snail’s
pace of the recovery have left many
workers demotivated and disengaged
– giving their employers a headache
about how to turn things around.
But surely this can’t be true of City
workers can it? Some of the biggest
earners in the country ply their trade
here with remuneration packages
consistently rated as the hot topic for
water-cooler gossip.
Yet delve a little deeper and you
find pay is actually pretty low down
the list of motivators for the work-
force once employees find they have
enough to live on and money ceases
to be a stress factor in their lives.
ing to see confidence returning to
the market,” said Amanda Stainer,
director of exhibitions and events
at the show.
Royal Bank of Scotland (RBS)
kicked off yesterday’s flurry of deal
activity after agreeing to a £5bn
order for 52 aircraft from Airbus
and 43 from Boeing.
News of the deal overshadowed
comments made on Tuesday by
government figures, including
defence secretary Liam Fox, that
military spending would be cut
unless the industry delivered bet-
ter value for money to taxpayers.
The defence segment of the
show was also hit with the news
group Numis yesterday said that
the ongoing argument over the use
of the “easy” brand makes it “diffi-
cult to see marginal new investors
being enticed into the shares”.
Numis, which downgraded its
recommendation of easyJet to
“reduce”, also warned that current
shareholders could lose patience
Stephen Archer of leadership con-
sultancy Spring Partnerships argues
that the past two years in which
employees and organisations have
been subdued has changed the
unspoken contract that exists
between staff and their paymasters.
Employers hoped workers would
hang on and remain motivated
despite the lack of pay rises and
bonuses, while employees just hoped
they could hold onto their jobs.
Now though, Archer explains, as
we come out of recession and the job
market is more healthy, businesses
are starting to grow again and they’re
going to have to work harder to keep
Picture: Micha Theiner/City A.M.
earlier in the week that Italy can-
celled an order for 25 fighter jets.
EADS North America boss Sean
O’Keefe said yesterday, despite the
gloomy news, that the group was
looking to invest in a variety of mil-
itary services companies.
Meanwhile, a raft of deals took
off yesterday signalling a return to
confidence in the commercial avia-
tion sector. Airbus signed deals
with Germania, Garuda Indonesia,
Thai Airways and Kuwait based
Aviation Lease and Finance
Company.
Boeing signed deals with Air
Austral, Okay Airways, Qatar
Airways and American Airlines.
given the circumstances.
The rating change is on the back
of a letter issued by Stelios’ lawyers
Bird & Bird on behalf of easyGroup
giving the airline until 17 October
to improve its performance, while
threatening to remove easyJet’s
right to the “easy” brand if it does-
n’t meet his requirements.
News 13
people because employees feel they’ve rises,” Archer adds. “People stay in an
got their mobility back. organisation because they feel good
“People no longer see themselves as about themselves. No-one does this if
being in careers but more as guns for they’re just slogging through – no
hire,” Archer warns. “Employers have matter how much they are paid.”
got to keep people motivated and give For any organisation that is faced
them a reason to stay where they are with an unmotivated and disengaged
– which is something they would not workforce the first priority, Archer
have had to do 20 to 30 years ago.” argues, is to share with employees
Interesting jobs, training and what is being done to turn that busi-
coaching and developing leadership
skills have got to come to the fore, he
ness around. “Explaining what they
can do to be a part of that, making
says. “The best motivation you can them involved in the turnaround
give workers now is to invest in them task, will motivate people because it
and give them a clear development gives them a role in securing their
path in the organisation. These own futures,” he says.
things are far more valuable than pay ben.griffiths@cityam.com
US officials give BA the go
ahead to fly alongside AA
AVIATION pool revenues, target business cus-
▲
BY EMMA SADOWSKI tomers and collude on ticket prices,
however they will have to give up four
BRITISH AIRWAYS’ (BA) shares took off takeoff slots at Heathrow airport.
yesterday on news that US officials have Last week BA received approval from
given its transatlantic partnership with the European Commission to allow its
American Airlines (AA) the green light. merger with Iberia to go through.
A nod from the US Department of
Transport (DOT) was the last hurdle for ANALYSIS l BA
the airline after receiving approval from 240 p
European regulators last week. 210.10
230 21 Jun
The approval means the two airlines,
along with Spanish merger partner 220
Iberia, can operate a joint business on
transatlantic flights. 210
News of the approval sent BA’s shares 200
up almost five per cent by the close to
210.1p as the airline said it plans to 190
launch the joint venture by the autumn.
180
The tie up will allow the airlines to 26 Apr 17 May 7 Jun 25 Jun 15 Jul
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 14 News CITYA.M. 22 JULY 2010

Coca-Cola profits top forecast Ebay rises after predicting

CONSUMER the three per cent gain expected by ended on 2 July, up from $2.04bn, or
a strong 2010 for PayPal
▲

BY HARRY BANKS UBS analyst Kaumil Gajrawala. He 88 cents per share, a year earlier.
said that Coke’s sales exceeded his
COCA-COLA reported a higher-than- expectations in various regions, ANALYSIS l Coca Cola time, it warned that the negative

expected quarterly profit yesterday,
helped by increased sales volume in
most of its markets.
The maker of Diet Coke, Sprite and
Fanta soft drinks saw worldwide sales
by volume rise five per cent, driven by
gains in all of its markets except
Europe, where volume fell one per
cent due to the debt crisis and chal-
lenged economies.
That overall increase was ahead of
including the critical North American
market, where the industry has seen
sluggish demand for some time.
Coke’s volume rose two per cent in
North America, seven per cent in
Latin America, six per cent in the
Pacific region and 10 per cent in the
Eurasia and Africa region.
Atlanta-based Coca-Cola said net
income was $2.37bn, or $1.02 per
share, in the second quarter that
▲
TECHNOLOGY
55 $ 54.08 effect of a stronger US dollar would
21 Jul WEB commerce company eBay beat hurt full-year results and trimmed
54
Wall Street’s quarterly profit esti- the high end of its 2010 forecast.
53 mates, helped by a record perform- Net profit in its second quarter rose
ance at its PayPal online payments to $412m (£272m), or 31 cents per
52 unit and strong marketplace sales in share, from $327m, or 25 cents per
51 Europe. share, a year earlier. On an adjusted
Shares in the company jumped 3.6 basis, earnings were 40 cents versus 37
50 per cent after-hours as it predicted cents in the year-ago period. Analysts,
PayPal would maintain its strong on average, had been expecting adjust-
49
26 Apr 14 May 4 Jun 24 Jun 15 Jul results through the year. At the same ed earnings of 38 cents per share.

Starbucks let
down by 2010
earnings goal Starbucks plans
to add 100 net
US stores and
200 elsewhere
this fiscal year
CONSUMER The company also wants to build
▲

BY HARRY BANKS Via instant brew and Seattle’s Best

STARBUCKS disappointed Wall Street
with fiscal 2010 and 2011 profit fore-
casts that matched or lagged Wall
Street’s expectations, sending its
shares down more than two per cent.
The Seattle-based chain, which has
just completed a restructuring, yester-
day raised its fiscal 2010 earnings tar-
get to $1.22 (80p) to $1.23 per share,
from $1.19 to $1.22 per share previ-
ously. Analysts on average were look-
ing for a profit of $1.23 for the fiscal
year ending September 2010.
It now expects earnings of $1.36 to
$1.41 per share in fiscal 2011, versus
Wall Street’s average projection of
$1.41.
After slashing costs and closing fail-
ing stores, Starbucks has returned to
building. It plans to add 100 net new
stores in the United States and 200
internationally during this fiscal year,
which ends in September. For 2011 it
plans to add 500 net new stores, most-
ly overseas.
Coffee into billion-dollar businesses.
Those operations should help rev-
enue, but margins will stay low for
CITY VIEWS: DO YOU THINK STARBUCKS CAN MAKE A COMEBACK?
now as Starbucks spends money on Interviews by Marion Dakers and Eliza Brown
Via advertising.
Via, which debuted in September
2009, is on track for $100m in sales in ALAN KERSLAKE | MIZUHO CORPORATE BANK DAIRN BRERTZ | DAIWA CAPITAL MARKETS
its first year.
Starbucks reported a quarterly
profit that matched the average ana- “I’m not a great coffee drinker – I only tend to “There’s a cafe across the road that does
lyst view. Net income for the fiscal get one as a treat. Starbucks has donated vol- better coffee for a better price, so I don’t
third quarter was $207.9m or 27c per unteers and free coffee to school fairs in tend to go to Starbucks. The prices don’t
share, versus $151.5m, or 20c per
share, a year ago. Bromley, which has been beneficial for all seem to have gone up. Starbucks could
It earned 29c per share excluding involved. But the price of coffee is get- pick up more sales, especially with a
charges in the latest quarter, match- ting a bit silly nowadays.” less corporate approach.”
ing analysts’ estimates.
Net revenue rose nine per cent to
$2.61bn. Sales at restaurants open at
least 13 months -- a key gauge of retail NIMESH BHARADIA | LINE DATA
health -- rose nine per cent, driven by
a six per cent increase in traffic and a “The price of coffee has gone up, but it hasn’t bothered me at all. I tend to go to Caffe Nero more, or to Bonds on
three per cent rise in per-visit spend.
Starbucks shares slipped to $24.62 Threadneedle Street, which seem to have better coffee at half the price. I don’t think Starbucks can go back
in extended trade after closing down to having a more local feel to their branches, now they’re on every street corner.”
2.3 per cent at $25.17 on the Nasdaq.

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CITYA.M. 22 JULY 2010
Land Secs set
to restart its
£350m mall
▲
PROPERTY
BY MARION DAKERS
THE UK’S largest real estate invest-
ment trust Land Securities will
restart work on a £350m shopping
centre in Leeds next month, in the
biggest retail project seen outside of
London since the recession.
The property group said it waited
until 47 per cent of the Trinity Leeds
mall was let before agreeing a con-
struction contract, after work was
halted last year due to the recession.
In the City, its One New Change
development on Cheapside is 98 per
cent let and on course for completion
in October, according to the compa-
ny’s interim management statement.
Chief executive Francis Salway said:
“If you were to ask me to sum up in
one word what I see in our business it
is momentum. We are progressing
our London development pro-
gramme, and… we have been the first
to put large scale retail development
back on the agenda.”
Talks are still progressing with an
unnamed potential partner for the
Walkie Talkie development on
Fenchurch Street, said Salway in a
Madoff trustee City jobs boom
files fresh suit for accountants
▲
FINANCIAL CRIME
THE trustee overseeing the liquida-
tion of Bernard Madoff’s financial
advisory firm has sued 43 new defen-
dants affiliated with a hedge fund
firm that fed money to the now-
imprisoned swindler.
The trustee is seeking more than
$3.6bn (£2.4bn) of damages in the law-
suit. Walter Noel, a co-founder of
Fairfield Greenwich Group, was
among those added to the year-old
lawsuit in a 217-page amended com-
plaint by Irving Picard, the court-
appointed trustee trying to recover
money for victims of Madoff’s esti-
mated $65bn Ponzi scheme.
conference call, with construction on
the 36-storey tower set to restart in
January and end in early 2014.
“Our outlook and plan remain the
same – a recovery in property values
over the medium term, but inter-
spersed by ripples,” said Salway, who
added the firm has a “wonderful
pipeline of organic opportunities”.
The company also announced that
Simon Palley would join its board as a
non-executive director on 1 August.
Palley was chief executive at private
equity firm BC Partners until 2007,
after which he became core adviser
and non-executive director at invest-
ment managers Haymarket Financial.
Land Securities stock closed up 1.5
per cent at 589.5p.
ANALYSIS l Land Securities
p
680 589.50
21 July
660
620
580
540
6 May 26 May 16 Jun 6 Jul
RECRUITMENT
THE JOB market looks rosy for quali-
fied accountants, as recruitment lev-
els recovered to pre-recession levels at
several firms in the second quarter of
the year.
Employers were paying up to £100
more per day for contractors than
they were during 2009, according to
recruiter Robert Walters, with experi-
enced product controllers command-
ing between £375 and £475 per day.
Salary offers are also up dramatically.
Newly-qualified accountants are
entering the jobs market sooner and in
increasing numbers, in what the firm
said is a sign of renewed buoyancy.
News 15
Northacre losses up
Land Securities
chief executive
Francis Salway
said the property
market is gaining
as projects shelved
“momentum”.
Picture: REUTERS
securing work, which has spread to
▲
PROPERTY
BY MARION DAKERS its subsidiaries Nilsson Architects and
the Intarya design agency. The firm
PROPERTY developer Northacre suf- lost over £2m on its doomed residen-
fered pre-tax losses of £3.9m last year, tial project at Kensington Odeon,
though the firm softened the blow by which was shelved in October after
selling off several assets including the buyers pulled out.
Kensington Odeon and taking advan- The company said in its final
tage of rising property values. results statement it could not give
The central London specialist any details on the sudden departure
blamed a lack of confidence in the of chief executive John Hunter in
lending market for its difficulty in February for legal reasons.
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 16 News
Rail ticket machines confuse
of information and incomplete infor-
▲
TRANSPORT
mation about ticket restrictions”
BY EMMA SADOWSKI resulting in the purchase of over-
RAIL ticket machines are confusing priced tickets.
which leads to passengers overpaying Anthony Smith, Passenger Focus
for fares, said an industry watchdog chief executive, said: “As a result
yesterday that called on train compa- some passengers would rather queue
nies to simplify the system. to speak to a member of staff, buy
Research conducted by Passenger more expensive tickets than they
Focus found that overly complicated need to or just give up and join the
ticket machines found in UK train sta- ticket office queue.”
tions forced customers to pay higher Smith struck out against the com-
fares and wait in longer queues. plexity of the machines and called on
The consumer watchdog argued train companies to provide better
that automated ticket machines in information to passengers and have
train stations presented passengers more staff available to help with
with “bewildering jargon, a barrage transactions.
Profits up for
Johnson on
demand jump
John Banham said in a statement.
▲
CHEMICALS
The company said sales at its
BY HARRY BANKS
Environmental Technologies division
BRITISH speciality chemical company were up 39 per cent while its Precious
Johnson Matthey yesterday said first- Metals Products unit benefited from
quarter profit jumped 47 per cent as strong platinum prices.
it recovered from a slump in demand, However, Charles Stanley analyst
and forecast an improved full-year Jeremy Batstone-Carr said the compa-
performance. ny’s prospects were far from certain,
The platinum refiner and world’s despite the generally robust trading
largest supplier of catalytic convert- performance: “Economic conditions
ers said yesterday Apri to June sales are likely to deteriorate. We note, too,
excluding precious metals rose 32 per
cent on the 2009 period, and were
slightly ahead of the prior three
months.
that Brazil sales have started to slip,
for the first time in over a year while
the European passenger car market
remains extremely tough and that
Falling demand for automotive
products hit the group last year as the
recession took its toll on sales.
Johnson Matthey, which profited
Asia remains highly competitive.”
Johnson Matthey’s shares closed 2.3
per cent higher at 1,636p yesterday
valuing the company at £3.4bn.
from a precious metals price increase
in the second half of its 2009-10 year, ANALYSIS l Johnson Matthey
forecast a strong first half earlier this p ny agreed on sales to rival firms.
1,636.00
year. 1,750 21 Jul
It said yesterday that second-quar-
ter sales would be slightly lower than
1,650
in the first quarter but the outlook
for the year was robust.
“The outlook for the second half of 1,550
the year still remains harder to pre-
dict but if demand remains at cur- 1,450
rent levels our full-year results will be
well ahead of last year,” chairman 26 Apr 17 May 7 Jun 25 Jun 15 Jul
CITY MOVES | WHO’S SWITCHING JOBS
Bank of Ireland
The bank has appointed Bill Greaves to the
position of head of corporate banking in the UK.
Greaves previously led the bank’s technology,
media and telecoms team, which he established
in early 2005 upon joining the group. Prior to
that, he led the media team at Barclays.
In his new role, he will lead a team concen-
trating on lending to corporates in the TMT,
retail and leisure, healthcare, business services
and utilities sectors.
RSA its new general counsel, responsible for
The insurer has hired Derek Walsh as leading the legal, group secretarial and
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
The time spent using the ticket
machines was also the cause behind
lengthy queues during peak travel
periods.
According to the watchdog’s
research, queues usually exceeded
the industry’s standard of five min-
utes waiting time.
FAST FACTS | MACHINE COMPLAINTS
● Ticket machines use “bewildering jargon” and
give customers a “barrage of information”.
● Ticket machines cause passengers to pay
more than they should for tickets.
● Ticket machine confusion causes queues.
BEST OF THE BROKERS
165
160
ANALYSIS l Goldman Sachs
$
149.36
21 Jul
150
140
130
6 May 26 May 16 Jun 6 Jul
GOLDMAN SACHS
JP Morgan Cazenove rates Goldman Sachs
as “overweight” despite disappointing sec-
ond quarter results. JP Morgan said that it
has lowered its earnings per share predic-
tions for Goldman, but believes the bank
still maintains a strong position in its peer
group, and that its potential for restructur-
ing could help offset any negative impact.
BDO called in as joint administrator of
Halliwells as law firm sells off business
▲
LEGAL
BDO HAS been appointed as adminis-
trator of collapsed legal outfit
Halliwells as rivals move in to buy up
the firm’s assets.
Restructuring partners Dermot
Power and Shay Bannon at BDO were
appointed as joint administrators of
the Manchester-based firm late on
Tuesday night just before the compa-
Edited by Victoria Bates
regulatory risk and compliance teams.
Walsh was most recently general
counsel at Argo Group and Benfield
Group, and has also held positions at
law firms Pinsent Curtis (now Pinsent
Mason), McKenna & Co (now CMS
Cameron McKenna) and Norton Rose.
Deloitte
The business advisory firm has appoint-
ed a new partner, Nigel Willis, to its risk
and regulatory practice.
Willis has spent the past 14 years
focused on prudential regulation and
has advised on a wide range of policy
and business issued relating to capital
Dana expands in Egypt
with Nile Delta venture
▲
ENERGY
OIL and gas explorer Dana Petroleum
has agreed to acquire a 50 per cent
stake in a potential oil field off the
coast of Egypt from rival BG Group,
boosting its prospects in Africa.
The Aberdeen-based firm said yes-
terday it has agreed to fund the cost
of the next exploration well in the
Nile Delta, which is planned for early
2011, up to an agreed cap.
“This further extends Dana’s
strategic position and growth oppor-
ANALYSIS l IG Group
500 p
480
480.60
21 Jul
440
400
360
6 May 26 May 16 Jun 6 Jul
IG GROUP
Bank of America Merrill Lynch (BoAML)
rates IG Group as “buy”, after the group
saw a good start to the 2011 year. June
revenues were the second highest on
record, according to BoAML, with higher
levels sustained to date. BoAML increased
2011 and 2012 earnings per share esti-
mates for IG by three per cent.
To appear in Best of the Brokers email your research to notes@cityam.com
Barlow Lyde & Gilbert, Hill
Dickinson, HBJ Gateley Wareing and
Kennedys have all moved in to buy up
parts of the business which employed
136 partners and 690 professional
staff.
Power said: “Securing sales of the
business to other highly regarded
firms is positive news for the employ-
ees and the industry as a whole.”
in association with
adequacy, liquidity and the associated
governance, systems and controls.
He joins from Ernst & Young, where
he was a partner and head of financial
regulation for the EMEIA region.
BNY Mellon
The bank has appointed Patrick Tadie
as business head for its Derivatives
360SM initiative, an integrated deriva-
tives investment services offering.
Tadie joined the company in 2003
and was most recently executive vice
president in charge of the global struc-
tured credit group within the BNY
Mellon Corporate Trust.
CITYA.M. 22 JULY 2010
tunities across Egypt, where we are
already 50/50 partners with GDF Suez
in the western area of the Nile Delta,”
said Dana chief executive Tom Cross.
Dana is still in takeover talks with
Korea National Oil Corporation
(KNOC), after receiving a preliminary
approach from the South Korean
state-run company at the start of July.
The FTSE 250-listed company has
made two gas discoveries off the coast
of Egypt but its Bamboo well disap-
pointed the market in June when it
failed to find oil.
ANALYSIS l Ryanair
4
€ 3.95
21 Jul
3.8
3.6
3.4
3.2
3
6 May 26 May 16 Jun 6 Jul
RYANAIR
Citigroup rates Ryanair as “buy”, despite
results for the June quarter being lower
than expected. Lower ticket price revenue
and the effects of the volcano were the
main causes, according to Citi, which pre-
dicts margins will recover from a strong
September quarter onwards. Citi gives the
Irish budget airline a target price of €4.60.
Barlows bought Halliwells insur-
ance practice, while Hill Dickinson
acquired the firm’s Liverpool office.
HBJ Gateley Wareing has agreed to
take on parts of Halliwells’
Manchester and City offices, while
Kennedys will takeover the firm’s
Sheffield office.
Over 700 jobs was have been saved
through the sales with just 38
Halliwells staff facing redundancy.
He has also worked as a portfolio
manager for Freddie Mac and director
of finance for First Union Capital
Markets.
Barclays Corporate
The bank has hired Lisa Le Goater as
head of global development organisa-
tions, a new specialist team based in
London.
Le Goater joins from the European
Bank for Reconstruction and
Development and has also held senior
positions at Merrill Lynch, the Federal
Reserve Bank of New York and
Citibank.
+44 (0)20 7557 7245
morganmckinley.com
 Markets&Investment 17

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 . . . . . . . . . . . . . . . . . . . . . . . .274.10 +6.00 314.80 245.50 COLT Group . . . . . . . . . . . . . . . .129.60 +0.70 144.20 106.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .52.10 +1.35 71.75 34.50 Schroders . . . . . . . . . . . . . . . . .1231.00 +37.00 1450.00 861.00
3i Infrastructure . . . . . . . . . . . . .108.90 –0.10 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .554.00* +6.50 574.50 307.75 Jardine Lloyd Thompson. . . . . . .570.50 +3.00 604.50 420.70 Schroders N/V. . . . . . . . . . . . . .1022.00 +19.00 1185.00 734.00
A.B. Foods . . . . . . . . . . . . . . . .1041.00 +26.00 1066.00 766.00 Cookson . . . . . . . . . . . . . . . . . . .437.80 +26.70 616.00 286.00 Johnson Matthey . . . . . . . . . . .1636.00* +36.00 1814.00 1215.00 Scot. & Sthrn Energy. . . . . . . . .1164.00 –1.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .128.00 +3.50 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . . 1153.00 +15.00 1165.00 536.00 Kazakhmys . . . . . . . . . . . . . . . . 1106.00 +72.00 1634.00 710.50 Scottish Mortgage. . . . . . . . . . . .593.50 +13.50 623.50 420.75
Admiral. . . . . . . . . . . . . . . . . . .1455.00 +30.00 1483.00 908.00 CSR . . . . . . . . . . . . . . . . . . . . . .390.50 +0.50 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .124.60 +2.00 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .275.60 +5.20 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . . 110.00 +3.00 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .463.30 +11.40 539.00 290.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .223.50 +6.50 255.00 196.50
Afren . . . . . . . . . . . . . . . . . . . . . .82.75 –0.85 111.00 51.75 Dana Petroleum . . . . . . . . . . . .1476.00 +5.00 1549.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .135.70 +1.20 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .539.50 +2.50 656.50 394.30
African Barr Gold . . . . . . . . . . . .593.50 –2.50 685.00 520.50 Davis Service . . . . . . . . . . . . . . .368.50 +6.70 442.30 323.25 Lancashire Hldgs . . . . . . . . . . . .536.00 +6.00 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1270.00* +6.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1592.00 +52.00 1639.00 524.50 De La Rue . . . . . . . . . . . . . . . . . .753.00* –23.50 1021.00 744.00 Land Securities . . . . . . . . . . . . . .589.50* +8.50 743.50 475.25 Shaftesbury . . . . . . . . . . . . . . . .387.10 +2.70 426.50 307.75
Alliance Trust . . . . . . . . . . . . . . .314.40* +2.80 352.70 276.25 Debenhams . . . . . . . . . . . . . . . . .59.40 +0.95 91.95 51.95 Legal & General . . . . . . . . . . . . . .87.60 +2.90 94.40 57.00 Shire. . . . . . . . . . . . . . . . . . . . .1468.00 +5.00 1526.00 828.50
AMEC . . . . . . . . . . . . . . . . . . . . .868.50 +8.50 891.00 682.00 Derwent London . . . . . . . . . . . .1321.00 +16.00 1490.00 903.00 Lloyds Banking Gp . . . . . . . . . . . .61.01 +1.17 75.58 45.30 SIG . . . . . . . . . . . . . . . . . . . . . . .100.00 +1.00 146.60 96.90
Amlin . . . . . . . . . . . . . . . . . . . . .424.80 +2.10 430.00 312.00 Dexion Absolute . . . . . . . . . . . . .136.90 –0.10 148.00 117.00 Logica . . . . . . . . . . . . . . . . . . . .103.00 +1.30 149.10 81.50 Smith & Nephew . . . . . . . . . . . . .560.50 –26.50 700.50 439.75
Anglo American . . . . . . . . . . . .2409.00 +32.00 3015.50 1768.00 Diageo . . . . . . . . . . . . . . . . . . . 1109.00 +9.00 1176.00 886.50 London Stk Exchange . . . . . . . . .617.00 –8.00 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .140.80 –0.20 147.00 67.50
Antofagasta . . . . . . . . . . . . . . . .981.00 +45.00 1100.00 676.00 Dimension Data . . . . . . . . . . . . .123.40 +1.00 123.80 55.00 Lonmin . . . . . . . . . . . . . . . . . . .1439.00 –8.00 2198.00 1101.00 Smiths . . . . . . . . . . . . . . . . . . . 1115.00 +24.00 1186.00 715.00
Aquarius Platinum . . . . . . . . . . .263.70 +8.60 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .414.90 –5.80 426.00 228.40 Man . . . . . . . . . . . . . . . . . . . . . .215.20* +6.40 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .413.00 +0.60 444.60 380.60
ARM Holdings . . . . . . . . . . . . . . .308.00 +7.50 362.40 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .367.10 –11.20 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .345.10 +6.10 412.70 321.90 Spectris . . . . . . . . . . . . . . . . . . .882.50 +7.00 949.00 522.00
Arriva . . . . . . . . . . . . . . . . . . . . .770.00 +1.00 782.50 408.50 DSG Intl . . . . . . . . . . . . . . . . . . . .26.51 +0.43 39.75 23.00 Meggitt . . . . . . . . . . . . . . . . . . . .306.50 +11.70 331.00 168.50 Spirax-Sarco Eng . . . . . . . . . . .1578.00 +24.00 1596.00 866.00
Ashmore . . . . . . . . . . . . . . . . . . .271.40 +6.00 311.20 195.00 Dunelm . . . . . . . . . . . . . . . . . . . .385.60 +14.50 438.40 250.70 Melrose . . . . . . . . . . . . . . . . . . .228.90 +8.70 251.50 105.00
Astrazeneca . . . . . . . . . . . . . . .3185.50 –16.50 3277.50 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .426.10 +3.30 499.90 271.00 Mercantile IT . . . . . . . . . . . . . . . .915.50* +11.00 1002.00 772.00 Spirent Comms . . . . . . . . . . . . . .120.80 +3.20 127.80 61.50
Atkins(Ws) . . . . . . . . . . . . . . . . .726.00 — 747.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .393.40* +2.40 412.40 313.50 Michael Page Intl. . . . . . . . . . . . .393.30 +0.70 461.50 253.50 Sports Direct Intl . . . . . . . . . . . . . 117.10 +3.10 134.00 81.80
Autonomy Corp . . . . . . . . . . . .1813.00 –2.00 2012.00 1161.00 Electrocomponents . . . . . . . . . . .220.10* +1.90 245.00 139.50 Micro Focus . . . . . . . . . . . . . . . .427.50 –8.00 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1177.00 +295.00 1190.00 522.50
Aveva . . . . . . . . . . . . . . . . . . . .1276.00* +16.00 1365.00 721.50 EnQuest . . . . . . . . . . . . . . . . . . .104.00 –1.10 112.70 87.35 Millen & Copthorne . . . . . . . . . . .448.70 +17.20 496.30 243.50 St James’s Place . . . . . . . . . . . . .240.40 +3.60 296.90 172.25
Aviva . . . . . . . . . . . . . . . . . . . . .340.00 +6.00 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .451.00 +3.00 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .250.80 +0.10 281.70 171.00 Stagecoach. . . . . . . . . . . . . . . . .178.90 +1.90 204.90 126.20
Babcock International . . . . . . . . .592.00 +3.00 660.50 459.80 Eurasian Nat Res . . . . . . . . . . . .890.50 +27.00 1276.00 731.00 Mitchells & Butlers . . . . . . . . . . .303.40 +7.50 343.90 228.30 Standard Chartered . . . . . . . . . .1769.00 +25.00 1847.00 1224.00
BAE Systems . . . . . . . . . . . . . . .315.20 +2.30 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .580.50 –8.00 630.00 220.00 MITIE . . . . . . . . . . . . . . . . . . . . .198.00* –2.00 281.70 195.20 Standard Life . . . . . . . . . . . . . . .191.20 +0.50 237.00 170.00
Balfour Beatty . . . . . . . . . . . . . . .250.30 +1.90 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .646.50* +10.50 664.50 454.25 Mondi . . . . . . . . . . . . . . . . . . . . .422.40 +24.30 488.00 209.75 SuperGrp . . . . . . . . . . . . . . . . .1010.00 +5.00 1027.00 499.00
Barclays . . . . . . . . . . . . . . . . . . .290.25 +5.40 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .94.00* –0.90 96.80 74.50 Monks Inv Tst . . . . . . . . . . . . . . .286.20* +3.30 321.20 238.00 TalkTalk . . . . . . . . . . . . . . . . . . . 117.90 +3.60 147.10 106.60
Barratt Development . . . . . . . . . . .95.55 +1.75 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .279.70 +22.80 396.20 138.00 Morrison Wm . . . . . . . . . . . . . . .281.70 +1.80 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .399.50 +1.90 501.50 333.00
BBA Aviation . . . . . . . . . . . . . . .194.20 +0.70 220.00 116.50 FirstGroup . . . . . . . . . . . . . . . . .372.00* +0.80 448.80 322.75 Murray Intl Tst . . . . . . . . . . . . . . .827.50* +1.00 893.50 632.00 Tate & Lyle . . . . . . . . . . . . . . . . .468.00* +6.20 509.00 302.50
Beazley. . . . . . . . . . . . . . . . . . . .121.10 +0.10 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .272.00 +3.60 297.20 226.00 National Express. . . . . . . . . . . . .240.20 +3.60 256.80 155.86 Taylor Wimpey . . . . . . . . . . . . . . .25.59 +0.65 54.90 24.29
Bellway. . . . . . . . . . . . . . . . . . . .563.50 +3.50 927.50 555.50 Fresnillo . . . . . . . . . . . . . . . . . .1095.00 +33.00 1139.00 539.50 National Grid . . . . . . . . . . . . . . .490.70* +0.60 607.65 474.80
Berkeley . . . . . . . . . . . . . . . . . . .822.50 +9.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .258.30 –1.70 285.70 208.50 Next . . . . . . . . . . . . . . . . . . . . .2134.00 +66.00 2360.00 1580.00 Telecity . . . . . . . . . . . . . . . . . . . .421.80 –7.70 455.00 300.00
BG . . . . . . . . . . . . . . . . . . . . . .1054.50 –1.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .469.90 +5.90 484.00 370.00 Northumbrian Water . . . . . . . . . .325.50 +4.10 329.20 219.90 Templeton Emrg Mkts . . . . . . . . .550.50* +8.50 598.00 384.00
BHP Billiton . . . . . . . . . . . . . . .1918.50 +46.50 2346.00 1475.00 GKN . . . . . . . . . . . . . . . . . . . . . .139.50 +6.40 155.00 82.50 Old Mutual . . . . . . . . . . . . . . . . . 115.10 +3.50 127.20 85.80 Tesco . . . . . . . . . . . . . . . . . . . . .397.75 +3.70 454.90 361.20
BlackRock Mining . . . . . . . . . . . .563.50 +14.50 654.50 398.25 GlaxoSmithKline . . . . . . . . . . . . 1186.00 +12.50 1347.00 1088.00 Partygaming . . . . . . . . . . . . . . . .232.50 +2.10 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .194.20 +6.70 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .42.01 –0.48 49.50 33.00 Great Portland Estates . . . . . . . .301.50 +5.60 332.10 215.00 Pearson . . . . . . . . . . . . . . . . . . .934.00 +14.00 1069.00 603.00 Tomkins . . . . . . . . . . . . . . . . . . .300.00 +1.10 314.00 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .399.90 +12.45 658.20 296.00 Greene King . . . . . . . . . . . . . . . .434.70 –0.30 504.00 372.50 Pennon . . . . . . . . . . . . . . . . . . . .580.00 +1.50 587.50 434.40 Travis Perkins . . . . . . . . . . . . . . .790.00 +24.00 915.00 613.00
Brit Insurance . . . . . . . . . . . . . . .899.50 — 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .503.00* +3.20 562.50 322.25 Persimmon . . . . . . . . . . . . . . . . .355.80 +2.70 534.50 340.20 TUI Travel . . . . . . . . . . . . . . . . . .229.00 +7.00 313.90 202.30
British Airways . . . . . . . . . . . . . .210.10 +10.70 255.80 127.50 Halma . . . . . . . . . . . . . . . . . . . . .281.60 –4.50 298.70 184.25 Petrofac . . . . . . . . . . . . . . . . . .1285.00 +23.00 1317.00 730.00 Tullett Prebon . . . . . . . . . . . . . . .347.60 +8.60 436.20 261.20
British Amer. Tob . . . . . . . . . . .2233.50 –4.50 2335.50 1765.00 Hammerson . . . . . . . . . . . . . . . .371.00 +5.10 460.30 312.75 Petropavlovsk . . . . . . . . . . . . . .1097.00 –23.00 1370.00 601.00 Tullow Oil . . . . . . . . . . . . . . . . . 1130.00 +4.00 1375.00 947.50
British Empire Tst . . . . . . . . . . . .427.10 +2.20 467.90 338.50 Hargreaves Lansdown . . . . . . . .336.00 +10.90 387.00 204.50 Premier Farnell . . . . . . . . . . . . . .231.80 +3.20 252.60 135.25 UK Commercial Prop. . . . . . . . . . .80.75 –0.05 84.90 62.25
British Land . . . . . . . . . . . . . . . .449.50* +6.40 532.00 402.00 Hays . . . . . . . . . . . . . . . . . . . . . . .94.05 +1.45 119.00 83.50 Premier Oil . . . . . . . . . . . . . . . .1466.00 +36.00 1502.00 984.00 Ultra Electronics . . . . . . . . . . . .1564.00 +16.00 1678.00 1094.00
Britvic. . . . . . . . . . . . . . . . . . . . .508.00 –2.00 516.50 312.00 Henderson . . . . . . . . . . . . . . . . .125.20 +2.80 157.80 93.00 Provident Financial . . . . . . . . . . .851.50 +11.00 986.00 786.00 Unilever . . . . . . . . . . . . . . . . . .1920.00 +41.00 2024.00 1512.00
Brown(N.) . . . . . . . . . . . . . . . . . .239.40* +0.90 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .412.90 –7.10 587.00 368.70 Prudential . . . . . . . . . . . . . . . . . .520.50 +14.50 665.00 408.25
BSkyB . . . . . . . . . . . . . . . . . . . .698.00 +1.50 732.00 503.50 Hikma Pharma . . . . . . . . . . . . . .727.00 +1.00 739.50 430.00 PZ Cussons . . . . . . . . . . . . . . . .354.90 +15.50 356.80 210.10 United Utilities . . . . . . . . . . . . . .557.50* +3.00 575.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .136.30 +1.80 151.00 108.40 Hiscox . . . . . . . . . . . . . . . . . . . .348.90 +1.90 369.30 290.00 Qinetiq . . . . . . . . . . . . . . . . . . . .125.60 +0.10 179.10 113.90 Utd Business Media . . . . . . . . . .534.50 +20.50 579.50 366.00
Bunzl . . . . . . . . . . . . . . . . . . . . .703.00 +9.00 784.50 514.00 Hochschild Mining . . . . . . . . . . .306.60 +13.60 370.60 220.00 Randgold Resources. . . . . . . . .6015.00 +25.00 6600.00 3351.00 Vedanta Resources . . . . . . . . . .2399.00* +83.00 2967.00 1515.00
Burberry . . . . . . . . . . . . . . . . . . .841.00* +21.50 851.50 425.50 Home Retail . . . . . . . . . . . . . . . .235.00* +5.00 336.50 208.50 Reckitt Benckiser . . . . . . . . . . .3300.00 +110.00 3667.00 2686.00 Victrex . . . . . . . . . . . . . . . . . . . 1133.00 — 1193.00 590.00
Cable & Wire Comms . . . . . . . . . .57.75* +1.80 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2158.00* +23.00 2190.00 1336.00 Reed Elsevier . . . . . . . . . . . . . . .517.00 +6.00 548.00 403.75 Vodafone . . . . . . . . . . . . . . . . . .146.55* +3.60 153.80 112.75
Cable & Wire Wwide . . . . . . . . . . .65.70* –3.30 94.80 64.85 HSBC Hldgs . . . . . . . . . . . . . . . .638.00 +10.20 766.80 546.95 Regus . . . . . . . . . . . . . . . . . . . . . .72.50 +0.40 125.50 67.50 Weir . . . . . . . . . . . . . . . . . . . . . 1198.00 +43.00 1229.00 499.25
Cairn Energy. . . . . . . . . . . . . . . .452.20 +9.20 479.20 306.80 Hunting . . . . . . . . . . . . . . . . . . .486.00 +2.70 659.50 395.75 Renishaw . . . . . . . . . . . . . . . . . .800.00 +15.00 823.50 363.00 WH Smith . . . . . . . . . . . . . . . . . .426.00 +6.00 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1603.00 +25.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .388.20 –4.40 478.30 291.70 Rentokil Initial . . . . . . . . . . . . . . .106.00 +1.90 140.20 86.75 Whitbread . . . . . . . . . . . . . . . . .1433.00 +11.00 1645.00 827.50
Capita . . . . . . . . . . . . . . . . . . . . .710.00 –8.00 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .480.60 +37.30 492.20 267.25 Rexam . . . . . . . . . . . . . . . . . . . .330.30 +7.70 333.40 222.50 William Hill . . . . . . . . . . . . . . . . .171.50 –3.10 217.80 160.50
Capital & Counties . . . . . . . . . . . 113.40 –0.20 125.40 99.60 Imagination Tech Gp . . . . . . . . . .318.00 +5.80 334.60 144.00 Rightmove . . . . . . . . . . . . . . . . .633.00 +22.00 729.00 367.00 Witan Inv Tst . . . . . . . . . . . . . . . .439.10 +5.30 487.00 353.25
Capital Shopping Centres . . . . . .339.00 +9.50 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .750.00 +24.00 756.50 281.75 Rio Tinto . . . . . . . . . . . . . . . . . .3247.50 +74.50 4104.00 2205.00 Wolseley . . . . . . . . . . . . . . . . . .1355.00 +26.00 1742.00 1102.00
Carillion . . . . . . . . . . . . . . . . . . .313.20 –2.80 361.90 246.25 Imperial Tobacco. . . . . . . . . . . .1908.00 –36.00 2159.00 1614.00 RIT Capital Partners . . . . . . . . .1145.00 –7.00 1215.00 910.00
Carnival . . . . . . . . . . . . . . . . . .2209.00 +59.00 2937.00 1649.00 Inchcape. . . . . . . . . . . . . . . . . . .309.90 +21.20 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . .579.50 +1.50 631.50 367.50 Wood Group (John). . . . . . . . . . .341.80 +6.90 411.70 261.50
Catlin . . . . . . . . . . . . . . . . . . . . .380.80 +9.50 386.30 303.20 Informa . . . . . . . . . . . . . . . . . . . .373.40 +20.60 439.40 225.00 Rotork . . . . . . . . . . . . . . . . . . .1400.00* +3.00 1482.00 842.50 WPP . . . . . . . . . . . . . . . . . . . . . .655.50 +20.50 744.00 433.75
Centamin Egypt . . . . . . . . . . . . .154.50 +1.50 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .729.00 +17.50 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .45.18 +0.97 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . . .990.70 +38.80 1344.50 683.40
Centrica . . . . . . . . . . . . . . . . . . .308.10 +4.70 320.00 215.50 Intercontl Hotels . . . . . . . . . . . . 1136.00 +31.00 1244.00 622.50 Royal Dutch Shell A . . . . . . . . .1787.50 +10.00 2068.50 1521.50 Yell Group. . . . . . . . . . . . . . . . . . .25.35 +0.20 86.00 21.50
Charter Intl . . . . . . . . . . . . . . . . .702.00 +18.50 855.50 481.75 Intermediate Capital . . . . . . . . . .257.50* +4.80 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1713.00 +12.00 1997.50 1505.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2876.00* –27.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1712.00 +39.00 1745.00 1024.00 RSA Insurance . . . . . . . . . . . . . .123.30 +0.40 142.00 114.10
Chloride Group . . . . . . . . . . . . . .372.90* +0.80 390.50 130.75 Intl Power . . . . . . . . . . . . . . . . . .361.80 +6.10 365.30 243.00 SABMiller . . . . . . . . . . . . . . . . .1902.00 +24.00 2090.00 1293.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .702.50 +9.00 806.50 660.00 Invensys . . . . . . . . . . . . . . . . . . .280.50* +10.50 350.30 234.50 Sage . . . . . . . . . . . . . . . . . . . . . .239.20 +3.90 260.50 180.90
Cobham . . . . . . . . . . . . . . . . . . .236.20 +3.00 278.60 173.20 Investec . . . . . . . . . . . . . . . . . . .484.80 +19.10 565.00 375.25 Sainsbury(J) . . . . . . . . . . . . . . . .345.90 +3.00 373.00 307.60 www.interactivedata.com

London breaks five days of Wall St falls after

losses on strong US earnings dour Bernanke view
range bound between 5,000 and 5,300 move also resulted in hedge fund cent, to 1,069.57. The Nasdaq
THELONDON until the year-end but in the short
term sees no reason to desert equities
manager Man Group adding 3.1 per
cent. THENEW YORK Composite Index dropped 35.16
points, or 1.58 per cent, to 2,187.33.

REPORT when the signals out of certain com-

panies are encouraging.
Integrated oils were led higher by
Other big gainers included British
Airways, up 5.4 per cent after the US
approved a bid by the Oneworld
REPORT Bernanke spoke to the Senate
Banking Committee in the first of
two days of semiannual testimony to
BP, up 3.2 per cent after the company alliance to broaden a transatlantic tie- Congress.

B F
RITAIN’S leading shares broke a announced the first asset sales to up and cooperate over scheduling, EDERAL Reserve Chairman Ben The downbeat remarks sapped
five-day losing streak yesterday help pay for the worst oil spill in US pricing and other services. Bernanke’s dour assessment of most of the buying interest even after
after upbeat corporate earnings history. On the downside, Smith & Nephew America’s recovery hit US stocks a spate of strong earnings reports
from the US and positive merg- Reflecting the market’s appetite fell 4.5 per cent after investors yesterday, as the Fed chief’s com- prior to the market’s open. Morgan
ers and acquisitions sentiment for risk, miners were on the front foot weighed up disappointing results ment on “unusually uncertain” eco- Stanley was one of the day’s few big
spurred a rebound, led by banks and along with firmer metal prices. from US orthopaedics peer Stryker nomic prospects discouraged winners after it reported stronger-
commodities. BHP Billiton gained 2.5 per cent Talk Citigroup had placed 8 mil- investors. than-expected profit, lifted by new
The FTSE 100 closed up 75.18 after reporting a 16 per cent jump in lion shares in Smith & Nephew at Stocks sank after Bernanke business. Its stock shot up six per cent
points, or 1.5 per cent, at 5,214.64, quarterly iron ore output, although it 559p each was also a drag on the acknowledged the labour market’s to $26.80.
having shed 2.5 per cent over the pre- voiced caution on the short-term out- stocks. continued weakness while offering Apple rose 0.9 per cent to $254.24
vious five sessions. look for commodity markets. Cable & Wireless Worldwide few specific options to stimulate lend- after it posted robust quarterly
UK Banks were given a lift as US Peer Kazakhmys was the top FTSE dropped 4.8 per cent as brokers con- ing and investment. results, but the company’s conserva-
peer Morgan Stanley reported higher gainer, up 7.0 per cent, while tinued to cut their ratings and esti- “The market sold off because unfor- tive margin forecast limited gains.
than expected second-quarter profit. Antofagasta added 4.8 per cent. mates on the firm, following tunately there is no remedy provided The benchmark S&P 500 found sup-
Barclays was a top performer in the Household and personal-care prod- Tuesday’s downbeat trading update. in Bernanke’s commentary to the ris- port at its 14-day moving average and
sector, up 1.9 per cent, with investors ucts firm Reckitt Benckiser gained 3.5 ing threat of deflation, the excess held above 1,060, a level seen as criti-
also awaiting the results of European per cent after agreeing a £2.5bn ANALYSIS l FTSE 5,214.64 capacity in the economy and the mal- cal by some technical analysts.
5,800 21 July
bank stress tests, due out on Friday. takeover of mid-cap condom maker functioning of the credit system,” said Investors have been reluctant to
Soft drinks maker Coca-Cola also SSL International, which leapt over 33 5,600 Joe Battipaglia, market strategist at make big commitments in equities
beat the Street expectations, with per cent higher. Stifel Nicolaus in Yardley, due to growing worry about the eco-
Google earnings due after the close. M&A possibilities were a spur to 5,400 Pennsylvania. nomic outlook, sparked by disap-
“We expect the markets to bounce gains by tour operator TUI Travel, up 5,200
“We are now giving up on the pointing economic data.
around like a cork in the bath for the 3.2 per cent after the Daily notion of a standard recovery in the “Considering everything the [Fed
next three months responding to Telegraph’s market report suggested 5,000 US economy.” has] done already, it will be alarming
good and bad news accordingly,” said a possible mop-up bid by 54 per cent The Dow Jones industrial average when the time comes that they feel
4,800
David Buik, senior partner at BGC shareholder TUI of Germany, citing a lost 109.51 points, or 1.07 per cent, to they need to do more,” said Peter
partners. recent Morgan Stanley note. 4,600 10,120.45. The Standard & Poor’s 500 Boockvar, equity strategist at Miller
Buik expects the FTSE 100 to be Revived talk of a possible takeover 26 Apr 17 May 7 Jun 25 Jun 15 Jul Index fell 13.91 points, or 1.28 per Tabak & Co in New York.
 18 Investment | Listed Products
Volatility can’t keep
the FTSE down for long
Profit growth and compelling valuations should boost stock prices this
year, but it could be a very bumpy ride ahead, writes Kathleen Brooks
T
HE UK equity market has lacked
a champion of late, but analysts
at UBS are taking up that man-
tle. They argue that the FTSE 100
will end the year at 6,250, about 1,000
points above its current level.
But the road toward a higher FTSE
will not be smooth. Stress test results
for the European banking sector, sover-
eign debt problems in Southern
Europe, austerity budgets and fears of a
double-dip are likely to keep volatility
high. UBS also predicts that the UK
index will trade in a wide range from
4,280 to 6,250 until the end of the year.
There are some compelling reasons
to buy UK stocks if you have the stom-
ach for it. The UK Shiller price-to-earn-
ings ratio, which measures if stocks are
cheap or expensive, is firmly in buy ter-
ritory. Stocks also look attractive rela-
tive to gilts. The 12-month forward
dividend yield on the UK equity market
is just short of 4 per cent – even after
BP suspended its dividend last month –
well above the yield on 10-year bonds,
which is currently 3.34 per cent.
Using historical data, UBS has found
that profit growth should remain
strong for the next couple of years. It
argues that when a profit cycle turns in
the UK, as it did last year after a slump
in 2008, the cycle tends to last for five
years. This is good news for equity
prices.
But what should investors do?
Structured products are a good option
if you want to limit your downside risk.
RBS offers covered call warrants that
expire on the 16 December with a
strike price of 6,000 or 6,500 and the
maximum you can lose is your initial
investment. However, they can be
expensive if volatility is falling, as it is
right now: the Vix index has fallen
from a high of 45 in mid-June and was
trading at 24 yesterday.
Another option is an autocallable on
the FTSE. These products automatically
mature if the market reaches a pre-
agreed level. It’s also worth considering
accelerated trackers, which are avail-
able from Societe Generale and RBS.
These products have expiry dates a few
years in the future and you gain if the
index reaches a pre-determined level
on the date of expiry. Crucially,
though, you don’t have to hold the
product for its entire lifetime. You can
sell it back to your issuer and still make
a profit since the value of the accelerat-
ed tracker rises with the FTSE 100.
For investors who think the UK is on
the right track then a long FTSE posi-
tion could pay off later this year.
LISTED PRODUCT NEWS
JESSICA MEAD
Learn how to make the most of Europe
RBS FREE SEMINAR ON EUROPE TONIGHT
Europe has never been far from the headlines
and the falls in European stock markets have
garnered lots of interest from investors. RBS
is holding another free seminar tonight
where David Stevenson will be discussing
why he feels that Europe and especially
Euroland could be looking good value com-
pared to its peers. The seminar will look at
how you can use RBS’s listed products to
profit from this opportunity. The seminar will
run from 5.30pm to 7.30pm and will be held
at RBS’s headquarters at 250 Bishopsgate.
Picture: REUTERS To register, email markets.uk@rbs.com
Traders will be watching the FTSE 100
DB X-TRACKERS CLARIFIES TAX POSITION
There has been considerable uncertainty in
recent weeks about the tax treatment of
exchange-traded funds (ETFs). Deutsche
Bank’s db x-trackers is the latest UK provider
to clarify its position. On Tuesday it said that
all its ETFs are managed such that they will
be compliant with the HMRC requirements to
meet the distributor status or reporting fund
status. Consequently, any gains will be liable
for capital gains tax at either 18 or 28 per
cent. ETFs that do not fall into either of these
categories will be taxed at the income tax
rate of up to 50 per cent.
CITYA.M. 22 JULY 2010
Picture: REUTERS
THE
TIPSTER
EURO-DOLLAR STILL THE
FOCUS OF ATTENTION
T
HE vacillations of euro-US dollar are
never far from the headlines. And this
week is no exception – the Eurozone
stress test results are scheduled for
tomorrow and Federal Reserve chairman
Ben Bernanke is continuing his testimony
today. Euro-dollar has recovered an impres-
sive 9.5 per cent since its low of $1.1875 on
7 June.
But the rally seems to have been over-
done and the pair should encounter some
fresh selling interest. A break of the key
trendline support at $1.2760 could add to
the downside momentum. A target would
be $1.2670 and there is minor support at
$1.2550. Some stiff resistance is expected
around $1.2870 and $1.2915 area. A close
above $1.2915 would trigger intra-day
stops. Spread Co quotes $1.2813-$1.2815
on the pair.
The cocoa market has also been attract-
ing plenty of interest this week after hedge
fund trader Anthony Ward bought up 7 per
cent of the world’s annual cocoa produc-
tion last week. There have also been
reports of supply shortfalls on the Ivory
Coast as a result of bad weather. Buying
cocoa on dips towards the two-year trend
line support at $2,890 could be a low risk
way of playing this trade. But place a close
stop loss unless you want to see your prof-
its melt away. CMC Markets quotes
$2,946-$2,954.
The second-quarter earnings season is
still in full swing and tomorrow sees
mobile giant Vodafone update the market.
It has been a steady, if unspectacular,
2010 so far for the FTSE heavyweight. But
with uncertain markets over recent
months, the company has retained its
appeal to investors because of a healthy
dividend yield.
However, some are starting to ask ques-
tions about the performance of its Italian
and Spanish operations and whether, after
a 25 per cent rise in the last 12 months, the
current share price is stretching the defini-
tion of fair value. The current IG Index
spread bet price is 145p-145.35p.
Jessica Mead
ADVISERS BRAVER ABOUT USING ETFS
Financial advisers are increasingly adventur-
ous and are using ETFs to to access a broad-
er range of asset classes, a survey conducted
by iShares showed yesterday. Sixty per cent
of advisers use ETFs to gain exposure to equi-
ty markets while a third gain exposure to
fixed income and commodities markets.
Three-quarters use them as a core element of
their market exposure or for strategic asset
allocation. But only 8 per cent currently use
ETFs to provide leveraged exposure to mar-
kets, for short positions or to track alterna-
tive asset classes.
 Lifestyle DON’T MISS OUR 19
REVIEW OF SPLICE
| Gadgets IN TOMORROW’S
LIFESTYLE SECTION

Photo purists NICK

will adore this BOOTH
TECH TALK

retro gem Let the latest

in Babel fish
The graceful Leica X1 will delight
camera buffs, writes Juliet Samuel technology do
the talking
T
HE X1 is the first in Leica’s new com-
pact digital camera series and arrives
in a cabinet-like black box complete LEICA X1
with two sliding drawers of acces- £1,389
sories and manuals (the latter, with an This fixed-lens model
English-language section of 50 pages, will is smart and simple Nick Booth, editor of www.mobileb2b.co.uk,
no doubt soon join the recycling pile). had builder trouble with his home – and his
The camera itself handles beautifully; it website. If only he’d used these translation
sits gracefully in your hands as you pan services...
across the landscape and the cylindrical

T
flash tower pops out of the top when need- OO tired to text? All thumbed out? Are
ed with an immensely satisfying click. For you one of life’s great dictators? There are
enthusiasts of the retro look and feel, the all kinds of gizmos that claim to translate
front view with its circular red Leica badge, your words into prose. But how “egg
grainy black body, rounded ends and metal only compact digital model approved for will look. The auto-focus, meanwhile, can curate” are they at taking your dictation?
trim make this camera a work of art. use by Getty Images. The 24mm lens, con- handle up to 11 focal points, and you can
But the X1 is more than just a pretty face. sisting of eight elements in six groups, is choose from six white balance settings as NUANCE
Its clean design also enables maximum mounted in front of a 12.9 megapixel well as store two manually adjusted modes. If you’re one of life’s mobile shouters, you’ll love
manual control with minimal fuss. Two of CMOS sensor, which in practice gives it a Another nice feature is that at any time the new software from Nuance. Even if your
the main optical functions – aperture and 35mm wide-angle view. Its ISO (light) sensi- a quick click of the shoot button will bring contact has asked you to text your proposal to
shutter speed – are controlled via click-turn tivity ranges from 100 to 3,200 but the quickly back into single point mode as them, you can still let the entire train know
dials, which, in addition to a few simple although it functions optically at low light it prioritises shooting above all other func- about the prestigious project, as Nuance’s
buttons at the back, makes it possible to levels, its processing software speed drops tions. Casual holiday snappers might Dragon app turns your Blackberry or iPhone
change all the visual functions without substantially. lament the lack of a zoom, but for a dedi- into a secretary who writes out your dictation
messing about in complex drop-down Even outside a low-light environment, it cated camera buff in search of top-level as a text.
menus. The aperture can be adjusted enforces a noticeable pause as you switch picture quality the X1 delivers a smooth, Install Dragon on your laptop, and you can
through F2.8 to F16, while the shutter into play mode and its focus is slower than enjoyable experience. With its sharp dictate your entire CV and have it translated
speed ranges from 1/2000 of a second up to that of some rivals. The manual focus can image, fixed lens and easily adjusted man- into a well laid out word document. You might
30 seconds for a long exposure. be adjusted using a sliding scale, however, ual optical functions, this model is a cam- have to speak in an American accent.
The image quality is top notch, which and brings up a very useful digitally era purist’s dream – if you can afford the Other time savers: Vlingo.com’s app lets you
has gained the X1 the honour of being the zoomed box to show how the area in focus hefty price tag. shout instructions at your mobile (rather than
endlessly explore menus with your thumb) and
TOP PICKS: HOLIDAY CAMERAS Parrot.com’s software will read out all your
messages while you’re driving.
www.nuance.com
OLYMPUS E-PL1 OLYMPUS STYLUS TOUGH
£606 8010, £270 SPINVOX
This ultra-compact, high-zoom model On the other hand, the SpinVox service some-
If just taking your camera times uses humans to type out your missed
from Olympus is easy to slip into your snorkelling isn’t enough, consider phone messages and text them to you. A bril-
hand luggage as you pack for the hol- Olympus’ aptly named Stylus liant time saver, well worth a fiver a month, as
idays and its dust-reduction filter Tough 8010. The 8010 is good long as you don’t mind the possibility of a man
makes it a good choice for a rugged for up to 33ft underwater – in Bangalore listening in to your calls.
destination. Its 19 scene modes and www.spinvox.com
about as deep as most divers are
an auto ISO range from 200 to 3,200 allowed to go, and is freeze-proof ALS
mean you can shoot in different envi- to -10 degrees centigrade. It can also be dropped and Remote foreigners can be incredibly useful, espe-
ronments with minimal effort. It also sat upon with impunity, being shock-proof for a 6.6 ft drop, and crush-proof for up cially if you’re dealing with a web or house
enables you to add one of six art filters, from “grainy builder who doesn’t speak English. Auto web
to 220 pounds of pressure. It has up to a 5x optical zoom and can deliver pictures translation systems only add to the confusion (as
film” to “pop art” and “gentle sepia”. The 14x optical zoom allows you to get a of a resolution up to 14 megapixels as well as high-definition video. Its auto-focus the state of my home extension or “perestroika”
close picture from afar, aided by a sensor shift image stabiliser with three possible tracking automatically fixes on fast-moving elements to enable you to get non-blur- will testify). A subscription to ALS allows you to
modes (two-dimensional, vertical or horizontal activation). www.lambda-tek.com ry action shots as you tumble down mountainsides. www.amazon.co.uk set up a three-way conversation on your mobile
(you, a translator and the Ukrainian builder who
told you he was Polish) instantly.
www.appliedlanguage.com
CANON D10 SAMSUNG ST600
£205 £300 ABBYY
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optical zoom and can shoot pic- to display hilarious cartoons to force
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megapixel resolution. Canon has also ture and you only need to tilt the camera to scroll Organising a conference for international dele-
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www.cambridgeconsultants.com
 20 Lifestyle | Books
Brett Easton Ellis is back
with a chilling seventh novel
The American Psycho
author does not
disappoint here
IMPERIAL BEDROOMS
BY BRETT EASTON ELLIS
PICADOR, £16.99
hhhhi
BY ZOE STRIMPEL
ONCE part of the American literary brat
pack of the 1980s that included Jay
McInerney and Tama Janowitz, Ellis is in
many ways the most intriguing and –
thanks to his famed use of violence in
1991’s American Psycho, about Manhattan
yuppie serial killer Patrick Bateman – the
most compulsive to read.
Imperial Bedrooms is a sequel, 25 years
on, to Ellis’s debut novel, Less Than Zero,
which was about a group of rich, druggy
LA teenagers. Clay, its star, is now a moder-
ately successful screenwriter and returns
to LA from New York for a hedonistic
Christmas. LA is still very much LA and
his friends Trent, Julian and Rip are
recognisably themselves, only more
depressingly so. Trent is now a producer
and married to Clay’s ex, Blair; Julian
runs an escort service and Rip, once a gor-
geous trustafarian, has had so much plas-
tic surgery he’s almost unrecognisable.
While casting a script he’s written, Clay
falls for a third-rate actress called Rain.
Soon enough, an ominous (one of Ellis’s
favourite adjectives) atmosphere devel-
ops; stalkerish warnings begin appearing
in Clay’s phone and apartment. His affair
with Rain is so booze-fuelled that reality
takes on a swirling quality, but there’s no
doubting that something grisly is cook-
ing as images of brutality and death –
including a videotaped execution with an
internet link nobody can activate – begin
to swarm the text.
Deeply noirish and at times shockingly
violent, Imperial Bedrooms is ultimately
depressing: at its core is an LA completely
empty of soul; a vacuum-packed
labyrinth of blue skies, tan limbs and
misery. Its protagonists (if they can be
called that) are drug and sex-fuelled shad-
ows of their former selves. You could call
them tragic, if they weren’t so – well,
so LA.
HARD TIME
BY SHAUN ATTWOOD
MAINSTREAM, £8.99
hhhhi
BY ZOE STRIMPEL
REAL-LIFE Sherriff Joe Arpaio, lord of the
Maricopa County Jail system in Arizona,
is known (to his detractors) as the Angel
of Death. He brags about spending less
money feeding the inmates than the
prison dogs; he makes everyone wear
pink underpants and women are put on
chain gangs. Look at his website
– www.mcso.org – and you’ll get a sense
of this man’s fervour for punishment.
His prison, then, is not the kind of
environment a successful day trader
from a happy family in Widnes is suited
to. Yet this most dreadful of US prisons is
just where Englishman Shaun Attwood
wound up after a SWAT team busted him
for money laundering and drug dealing
at his Scottsdale Arizona apartment,
where he lived a double life as dotcom
millionaire and raver.
Hard Time is the gripping account of
Attwood’s time among lethal gangsters,
including the Aryan Brotherhood, and of
living in fear amid sewage and cock-
roaches. At first, he is in shock – then he
slowly adapts, learning how to avoid vio-
lence and garner some peace and quiet.
Having only read books on finance
before, he submerges himself in litera-
ture, psychology and philosophy in a
quest to understand his past. He begins
to write letters home, his first one with a
golf pencil he sharpened on a cell wall.
These became a blog attracting world-
wide acclaim; they’re harrowing, horrify-
ing and often funny.
Hard Time begins with Attwood’s
arrest in the middle of the night and pro-
ceeds through his two years in jail prior
to his sentencing to nine-and-a-half years
in prison (he was released after six). It’s
shocking, but readers will be cheered to
know that for Attwood, the ending is
happy, as he’s now back in the UK and
free, spending his time giving talks on
the perils of drugs.
POWER GRAB: HOW OBAMA’S
GREEN POLICIES WILL STEAL
YOUR FREEDOM AND
BANKRUPT AMERICA
BY CHRIS HORNER
REGENCY PRESS, £16.99
hhhhi
BY MATTHEW SINCLAIR
LAST year Citigroup Investment Research
released a devastating report on the
“affordability crisis” threatening energy
investors. They set out how Britain needs to
invest more in its energy sector than
Brett Easton Ellis was Germany, France and Italy combined to
part of the famous meet environmental targets, a massive
literary Brat Pack of £139bn investment in the energy sector.
the 1980s. Paying for that and the smaller amount
(£66bn) needed to keep the lights on will
Picture: GETTY require roughly doubling profits and, in
turn, doubling prices. That could lead to a
consumer backlash as households whose
disposable incomes will be squeezed by
the fiscal adjustment rightly don’t want
to see such a huge bill for offshore wind-
mills that aren’t economical without sub-
sidies of up to £100/MWh. Firms could
face dramatic cuts in subsidies – some-
thing already happening in Germany,
Spain and Italy – or windfall taxes.
If anyone in the City wants to know
what the backlash will look like then
they should start with Chris Horner’s
new book Power Grab. As the subtitle
makes abundantly clear, it is a furious
blast at climate change policies that
threaten enormous harm to the standard
of living enjoyed by ordinary American
families. Some of the stories are fascinat-
ing. To give just one example, environ-
mentalists in the Sierra Club boast that
they have blocked 100 coal power plants
since 2001 through regulatory and legal
roadblocks. It received $47.7m from 2005
to 2009 from David Gelbaum, a promi-
nent investor in renewable energy. The
book is full of examples like that of how
global warming has become an excuse
for US politicians and rent-seeking busi-
nesses to grab money and power. The
same thing has happened here in the UK.
As the public find out they’re going to
get angry just like Chris Horner. Matthew
Sinclair is research director at the
Taxpayers’ Alliance.
CITYA.M. 22 JULY 2010
LIFE
COACH
How to cycle
to work – in a
pencil skirt
W
ITH Boris Johnson’s Paris-style
bicycle hire scheme launching on 30
July, Londoners who have hitherto
been put off by the hassle of owning
a bike will see a brave new world of green,
healthy travel opening up before them.
But for the commuter – particularly the
female one –  cycling to work isn’t always sar-
torially or logistically straightforward. So we
asked Helen Pidd, bicycle blogger, jounalist
and author of the indispensable cyclist’s book
The Bicycle (Penguin), to tell us how she navi-
gates her commute.
HP: “Unless it's raining, I almost always
cycle to work in whatever I am planning to
wear that day and avoid getting sweaty by
just pootling along. That includes smart
dresses and jackets if I'm covering a court
case. If I do have to transport clothes, I
swear by rolling, rather than folding (particu-
larly for suit jackets). You can buy suit-carry-
ing panniers (for example at www.
highson.com) but I'm not sure I would rely
on them. If you need to wear a suit and
ironed shirts, I would really recommend
bringing in a job lot at the beginning of the
week by public transport and then cycling
the rest of the week. But to keep things wrin-
kle free, www.eaglecreek.com has some
pretty good packing folders.
“I cycle in a skirt almost every day of my
life – my secret weapon is a pair of padded
pants that I wear underneath to disappoint
perverts at traffic lights (I like the Craft
Ladies Pro Cool Boxer with Mesh hot-
pants from www.wiggle.co.uk) If you
want to wear cycling shorts under your
dress, the Sheila Moon Lingerie Liner from
www.minx-girl.com is a great option.
“The main thing for cycling in skirts is to
have a bike with no cross bar. Sometimes
these bikes are advertised as having a “step-
through” frame – good for preserving mod-
esty. I can cycle in a pencil skirt on my
crossbar-less sit-up-and-beg-bike, though the
material needs to have a bit of stretch in it. If
I'm on my racing bike, which does have a
crossbar, I have to wear swooshier skirts
which won't split up the back.
“When it comes to cleavage-flaunting, if
you like wearing low-cut tops, either resign
yourself to having blokes shout "lucky saddle!"
at you all day, or invest in a bike with the most
up-right riding position possible. A sit-up-and-
beg style “Dutch” bike with swept-back han-
dlebars is best because you will barely have to
lean forward at all (www.bobbinbi-
cycles.co.uk have some excellent
ones).
“Cycle-friendly fabrics and styles
include jersey knit, thick cotton
and wool (particularly merino
wool, which hardly ever needs
washing and never smells
bad). Avoid silk and linen –
these wrinkle and smell
extremely quickly.
“If you need to look
smart, never wear a
rucksack. You'll get a sweaty
back. Cycle slowly and put
everything you need in a
pannier. If you want to
use panniers, you'll need
to put a rack on the back
of your bike. Most bikes
can fit one, and they're
not more than about
£30.”
lifecoach@cityam.com
CITYA.M. 22 JULY 2010 Lifestyle | TV& Games 21

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders; BBC News
8pm Celebrity MasterChef
9pm It Shouldn’t
Happen at a Vet’s
10pm BBC News
10.25pm Regional News
10.35pm Question Time
11.35pm This Week;
Holiday Weatherview
12.25am CHOICE
Sign Zone: Panorama
12.55am The Fox Attack Twins
1.25am For Queen and Country
2.25am Cracking Antiques
2.55am The Delicious Miss Dahl
3.25am-6am BBC News
6pm Eggheads
6.30pm Antiques Road Trip
7pm Wainwright Walks:
Coast to Coast:
7.30pm RHS Tatton
Flower Show 2010
8pm CHOICE The Private Life
of Pigs: Jimmy Doherty
explores the habits and
intelligence of pigs.
Last in the series.
9pm Victorian Pharmacy
10pm Mock the Week
10.30pm Newsnight; Weather
11.20pm Dragons’ Den
12.20am How to Beat Tough
Times: Money Watch
1.20am BBC News 3.25am-6am
Close
6pm London Tonight
6.30pm ITV News
6pm The Simpsons
6.30pm Hollyoaks
6pm Home and Away
6.25pm Don’t Stop Believers
TV PICK
7pm Emmerdale 7pm Channel 4 News 6.30pm Live from Studio Five;
7.30pm Behind Closed Doors: 7.55pm 4thought.tv Topical reports.
Tonight 8pm CHOICE Location, 7.30pm Fifth Gear;
8pm Emmerdale Location, Location: Helping Five News Update
8.30pm Coronation Street prospective buyers in Wiltshire. 8pm The Man Who Moves
9pm Homes from Hell 9pm Undercover Boss: The Buildings; Five News at 9
10pm ITV News at Ten manager of London’s Tower 9pm The Hotel Inspector
10.30pm London News Hamlets council works 10pm FILM Quicksand: Crime
10.35pm Cops with Cameras alongside his staff. thriller, starring Michael Keaton PANORAMA
11.35pm Superhuman: World’s 10pm Big Brother and Michael Caine. 2003. BBC1, 12.25AM
Smallest People 11.10pm Skins 11.55pm Don’t Stop Believers Adam Shaw investigates the cost of
12.30am The Zone; 12.10am Dirty Sexy Money 12.05am SuperCasino borrowing from high-street banks, ask-
ITV News Headlines 1.05am The Ascent of Money 2am 4.05am Red Bull Air Race: Aerial ing Vince Cable whether the promised
2.30am The Jeremy Kyle Show Dispatches: Catching the Gun obstacle course. 4.55am Animal reforms will actually materialise.
3.25am Behind Closed Doors: Runners 2.50am Big Brother: Live Rescue Squad 5.10am The New
Tonight 3.50am-5.30am ITV 5.05am Countdown 5.50am- Tomorrow 5.35am-6am
Nightscreen 6.15am The Hoobs Michaela’s Wild Challenge

SKY SPORTS 1 9.30pm Cycling: Tour de 4.40am Nothing to Declare HISTORY 5.30am-6am How Does That
SATELLITE & CABLE

7pm Live Darts 12am Time of
Our Lives 1am Test Cricket
3am Premier League World
3.30am Time of Our Lives
4.30am IAAF Athletix Weekly
5am ATP Tour Uncovered
5.30am-6am Premier League
World
SKY SPORTS 2
7pm Premier League World
7.30pm ATP Tour Uncovered
8pm Test Cricket 10pm WWE:
Late Night – Raw 12am WWE:
NXT 1am NRL Fulltime 1.30am
Championship Rugby League
3.30am-5.30am Premiership
Years
SKY SPORTS 3
7pm Race World 8pm Live
PGA Tour Golf 11pm European
Tour Golf 1am Golfing World
2am-3am Race World
BRITISH EUROSPORT
7pm Fight Club 9pm Cycling
France 10.30pm Planet
Armstrong 10.35pm Triathlon
11.35pm Cycling: Tour de France
12.35am-12.40am Planet
Armstrong
ESPN
7pm Motorcycling 8pm Serie A
9pm Live Caribbean Twenty20
Cricket 12am MMA Live
12.45am Talk of the Terrace
1am Press Pass 2010 1.30am
Live Pre-Season Football
3.30am-6am Live Major
League Soccer
LIVING
7pm Celebrity Four Weddings:
Celebrity edition of the reality
show. 8pm Cougar Town 9pm
Criminal Minds: Prentiss and
Reid are taken hostage. 10pm
Private Practice 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
5.30am-6am Home Shopping
BBC THREE
7pm Total Wipeout: The
Legends 8pm Undercover
Princesses 9pm Big Meets
Bigger 10pm EastEnders
10.30pm Lee Nelson’s Well
Good Show 11pm Family Guy
11.50pm Big Meets Bigger
12.50am Underage and
Pregnant 1.20am Total
Wipeout: The Legends 2.20am
Lee Nelson’s Well Good Show
2.50am Undercover Princesses
3.50am The Blind Me 4.50am-
5.20am Bizarre ER
E4
7pm Hollyoaks 7.30pm Friends
9pm The Big Bang Theory
9.30pm How I Met Your
Mother 10pm Accidentally on
Purpose 10.35pm Alan Carr:
Chatty Man 11.40pm Important
Things with Demetri Martin
12.10am-6am Big Brother: Live
7pm The Six Wives of Henry Work?
VIII 8pm How Britain Was
Built 9pm Britain AD: King
DISCOVERY HOME &
Arthur’s Britain 10pm HEALTH
7pm Test Tube Babies 8pm 10
Disappearing Britain 11pm
Years Younger 9pm Hospital THE PRIVATE LIFE OF PIGS
How the West Was Made BBC2, 8PM
12am How Britain Was Built 10pm The Real ER 11pm Dr G:
Medical Examiner 12am Jimmy Doherty visits a farm in
1am The Six Wives of Henry
Hospital 1am The Real ER 2am Dartmoor, Devon, to explore the
VIII 2am Ancient Discoveries
3am Guns, Germs and Steel
Dr G: Medical Examiner 3am habits and intelligence of pigs. Last in
10 Years Younger 4am Baby the series.
4am-5am Decoding the Past Tales 5am Baby Whisperer
5.30am-6am Babes in the
DISCOVERY Wood
8pm How Do They Do It?:
Transforming rubbish into SKY1
power. 8.30pm How It’s Made 8pm The Real A&E 8.30pm
9pm Venom Hunter with Real Filth Fighters 9pm Lie to
Donald Schultz 10pm River Me 10pm A League of Their
Monsters 11pm World’s Own 11pm NCIS: Los Angeles
Toughest Tribes 12am Man vs 1am Ross Kemp: Battle for the
Fish with Matt Watson 1am Amazon 1.50am Road Wars LOCATION, LOCATION, LOCATION
Bear Grylls: Born Survivor 2am 2.40am Oops TV 3.30am CHANNEL 4, 8PM
Mark Williams on the Rails Shear Genius 4.20am Tim Kirstie Allsopp and Phil Spencer help
3am Weaponology 3.50am Gunn’s Guide to Style 5.10am- prospective buyers in Wiltshire,
Nasa’s Greatest Missions 6am Are You Smarter Than a including a couple who have very
4.40am Unsolved History 10 Year Old? different ideas about their perfect home.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
10 28 4 38 3 22 24 
10 12
8  
26 13
Place the numbers from 1 to 9 in each empty cell so that each 20  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 9 9 14
15 16
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 27 6

above or to the left of it. 36 17
You can only use the digits 1-9 33  
    and you must not use the
14 38
29 30   
same digit twice in a block. 22
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24
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column, but it must be in a 23
6
5
11
7

16 21 11
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7 16 
12 14
    19 27
 

 ACROSS DOWN
1 Vessel made of planks (4) 1 Amy Winehouse
  
   WORDWHEEL A O
3
6
7
Become less intense (5)
Decorates with frosting (4)
Assistance (4)
hit of 2007 (5)
2 Walk silently (6)
3 Star-shaped
Using only the letters in the Wordwheel, you have 9 character used
    ten minutes to find as many words as possible,
U D 11
Formerly (2,3,4)
Slow-moving outlet in printing (8)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters C 12
of a lake (5)
More contemptibly
4 Act as a mediator (9)
5 Throw out (5)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
E T 15
narrow in outlook (7) 8 One who is not
a member of
SOLUTIONS
Gastropod with a
KAKURO is at least one nine-letter word in the wheel.
C N spiral shell (5) the clergy (9)
10 In the open air (8)
17 Local region of low
QUICK CROSSWORD 4 1 2 3 4 6 8 9 pressure which causes 13 Enterprising or
6 & $ 0 3 , & %
9 7 6 8 5 8 9 7 SUDOKU          a plane to lose height ambitious drive (6)
8 ( 6 / $ / 2 0
1 5 6 2 3 4          suddenly (3,6) 14 Round objects used
4 1 7 9 1 6 9
% 8 5 5 / % 5          18 Payment made by a in games (5)
7 6 5 9 8 1 2 8
3 2 ' ( / , 9 ( 5
7 1
         tenant to a landlord (4) 16 Water lily (5)
2 : 1 ( 5 $ 1 2 ' ( 6 6 2 5
         19
(
1
$
2 8
2 )
1 6
7
+ (
5
$ 3
$
6
8 9 2
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8 9 3 7
6 1 3 3
6
1
WORDWHEEL          20
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Musical compositions
$ 5 7 , 6 7 ( & 6         
* ) , / , ( 8 5 4 9 6 7 8 The nine-letter word with words (5)
        
3 $ 1 7 ( ' 7 5 9 4 2 8 2 7 3 1
was ABSEILING 21 Swerves off course
1 < ( 1 = < 0 ( 3 2 1 5 8 9 7 2         
momentarily (4)
 Sport
22 CITYA.M. 22 JULY 2010

Results
UEFA CHAMPIONS LEAGUE SECOND
QUALIFYING ROUND SECOND LEG
Rosenborg ....................(1) 2 Linfield.................................(0)
Prica 32, Henriksen 87
Agg: 2-0.
0 The time has MANCINI HOPES TO LAND DONOVAN

FRIENDLY MATCHES
Barnet................................... 1 Watford.....................................
Beijing Guoan................... 0 Birmingham............................
Bournemouth................... 3 Derby...........................................
Grasshoppers .................. 0 Liverpool...................................
Huddersfld......................... 1 Blackburn.................................
Lowestoft Town............. 0 Colchester ...............................
Northampton................... 0 Coventry...................................
0
1
3
0
0
0
1
come for Sam
SK Sturm Graz ................ 0 Arsenal ...................................... 3
Torquay................................ 2 Bristol City..............................
Tranmere ............................ 2 Nottm For.................................
1
0 Sam Torrance has set his to anything I’ve done in my career.”
Torrance has suffered a recent dip
CRICKET
LV COUNTY CH’SHIP - DIV ONE (Emirates Durham ICG);
sights on Seniors Open in form on the Seniors Tour in recent
weeks, and this week made the three-
Lancs 344 (L D Sutton 101no, S Chanderpaul 92) v Durham
27-1 (12.1 overs). (Chelmsford); Essex 399 (R S Bopara 142, J
S Foster 61, A U Rashid 5-87) v Yorkshire 227-5 (76.0 overs)
glory, writes Jon Couch hour trip from Carnoustie to the fam-
ily home on the western coast of
(A Lyth 75). (Taunton); Somerset 205(D I Stevens 4-38) and Scotland to seek advice from his

S
128-2 (31.0 overs) v Kent 172(M Kartik 5-50). (Edgbaston); AM TORRANCE admits victory father, Bob, the experienced coach of
Warwicks 313 (N M Carter 99no) v Notts 373-9 (103.0 in the British Seniors Open this Ernie Els and Padraig Harrington.
overs) (C M W Read 83, A D Hales 53, N M Carter 4-107).
DIV TWO (Derby); Worcs 279 (Shakib Al Hasan 90, J G weekend would prove the “It was great to see my father and
Cameron 89) v Derbyshire 43-0 (11.0 overs). (Swansea); crowning glory to his presti- now I feel I’m playing to the level I
Leics 225-5 (98.0 overs) (J du Toit 75, J W A Taylor 70) v gious 40-year career. should be playing at,” Torrance added.
Glamorgan. (Uxbridge); Sussex 413-9 (96.0 overs) (E C Torrance, 56, has claimed 43 Tour “I’ve not got the best of records at
Joyce 85, M W Goodwin 80, T S Roland-Jones 4-82) v
Middlesex. (Brit Insurance Oval); Surrey 620-7 dec. (M R wins as a professional and played in Carnoustie, although I did finish sec-
Ramprakash 248, M N W Spriegel 103, R J H-Brown 103, E no fewer than eight Ryder Cups – ond there in 1968, so one better this
Chigumbura 4-100) v Northants 174-8 (56.0 overs) (A G including famously captaining the time round would be fantastic.”
Wakely 50).
European side to victory in 2002. Torrance is part of a strong Open
But the three-time Seniors Tour field, which includes four of the last
TODAY’S DIARY Order of Merit winner still has the five European Ryder Cup captains in
Europa League Second Qualifying Round - Second Leg void of a Major title on his impressive Torrance, Mark James, Bernhard
Bangor City (1) v FC Honka (1) (7.30) ................................................................ CV and has his heart set on fulfilling a Langer and Ian Woosnam, while Sir
Bnei Yehuda (1) v Shamrock Rovers (1) (6.30) ..............................................
Breidablik (0) v Motherwell (1) (8.15) .............................................................. dream and landing this year’s Open Nick Faldo was forced to withdraw
Dundalk (0) v Levski Sofia (6) (7pm).................................................................. title at Carnoustie, which starts this with tendonitis.
FK Qarabag (2) v Portadown (1) (5pm) ............................................................ morning. “It’s the only Major I play Tom Watson will be looking to land
HNK Cibalia (0) v Cliftonville (1) (7.45).............................................................. now and the highlight of my year,” a fourth Senior Open title, while fel- MANCHESTER CITY boss Robert Mancini is looking to add United States’ World Cup star
Sporting Fingal (2) v Maritimo (3) (7.45).......................................................... says the City.A.M columnist. low American Tom Lehman is among Landon Donovan to his list of star signings. Donovan, 28, is still contracted to Major
“I will only know just how much it the favourites following his tied 14th League Soccer side LA Galaxy and spent a loan spell at Everton last season. Mancini, who
SPORTS EDITOR JON COUCH means if I come out on top on Sunday place finish in the Open at St has already landed Jerome Boateng, Yaya Toure and David Silva to his City squad this
email sport@cityam.com night, but it will run extremely close Andrews last week. summer, said: “Donovan is a good player. Could be possible.” Picture: ACTION IMAGES
CITYA.M. 22 JULY 2010
Liverpool move was
Injury-plagued Eduardo
no-brainer, says Cole seals £6m Shakh switch
▲
FOOTBALL
BY FRANK DALLERES
LIVERPOOL’S newest recruit Joe Cole
insists he has not moved to Anfield
for the money, but because they are
“the biggest club in the country”.
Cole yesterday rubber-stamped a
four-year deal thought to be worth
£80,000 a week after passing a med-
ical at the club’s pre-season training
camp in Switzerland.
The England midfielder has
swapped a team that has just won the
double and will play in next season’s
Champions League for a side that
limped home a disappointing sev-
enth and face a qualifying round just
to reach the Europa League.
SPORT | IN BRIEF
Villeneuve’s investment denial
FORMULA ONE: Jacques Villeneuve has
dismissed claims that the son of contro-
versial Libyan leader Muammar Gaddafi
is behind the investment of his new F1
team.
Villeneuve Racing, run by the Canadian
ex-world champion, will attempt to join
the F1 starting grid in 2011 after joining
forces with Italian-based firm Durango.
But Villeneuve, 39, confirmed: “To be
clear, right now all the money comes
from corporate sponsorship and not from
personal investors.”
It’s D-day for Schleck
CYCLING: Front-runner Andy Schleck
believes his battle with Albert Contador
to win the Tour de France will be decid-
ed during today’s climb up Col de
Tourmalet.
Defending champion Contador holds
an eight-second lead over the
Luxembourg rider with four stages
remaining, but Schleck said: “I believe
the Tour will be decided on the
Tourmalet – the first guy up there will
also win the Tour.”
But he said: “This is a massive club.
I tried to take everything out of the
equation, take the financial and loca-
tion side out and just thought in foot-
ball terms.
“I thought about the semi-final of
the Champions League in 2005 when
I ran onto the field and the hairs on
the back of my neck stood up. I was
thinking about playing in that atmos-
phere every week and that swung it
for me.
“I know I have made the right deci-
sion and I am looking forward to the
challenge.
“I have played in London all my life.
I could have stayed at Chelsea because
the fans loved me and I won things,
but I wanted to challenge myself and
Flintoff eyes Champions League
CRICKET: Andrew Flintoff is targeting to
play for the Chennai Super Kings in the
Champions League Twenty20 in
September.
The England all-rounder has been out
of action since undergoing knee surgery
in August 2009 but is hoping to make his
return for Lancashire in the next couple
of weeks.
Centrally-contracted Kevin Pietersen
and Eoin Morgan will miss the tourna-
ment in South Africa due to their
England commitments.
Woods is still No1 earner
GENERAL: Golfer Tiger Woods is the top
earner in sport for the seventh year run-
ning – even though he lost 10 per cent on
last year.
According to Sports Illustrated’s
SI.com, Woods earned £59.6m ($90.5m),
topping the American list ahead of golf
rival Phil Mickelson on £40.6m ($61.7m).
Tennis star Roger Federer heads the
international list on £40.7m ($61.8m),
ahead of footballers Lionel Messi ($44m)
and David Beckham ($40.5m).
Cole moves to Anfield having played
his entire career in London.
Picture: GETTY
when I knew Liverpool were interest-
ed it was a no-brainer because they
are the biggest club in the country.”
Liverpool boss Roy Hodgson, whose
side were held 0-0 by Grasshoppers in
his first game in charge last night,
admitted Cole’s signing would not
single-handedly reverse the club’s
recent decline.
“It’s not going to be an overnight
thing,” said the former Fulham man-
ager. “Last season was a very disap-
pointing season for the club in every
respect, culminating in a popular
manager leaving. You don’t change
doom and gloom or disenchantment
with a signing or two. There’s a lot
more work to do, a lot more players
are needed.”
Ashes hope for England
as Aussies stunned for 88
▲
CRICKET
BY JON COUCH
ENGLAND were handed early Ashes
encouragement yesterday after
Australia were dismissed for under
100 for only the second time in a
quarter of a century.
Ricky Ponting’s side slumped to 88
all out in the second Test against
Pakistan at Headingley – their second
lowest total ever against the Asian
side.
Wicketkeeper Tim Payne top scored
with just 17 – one of only four
Australian batsmen to reach double
figures – as the Pakistani bowling
attack ran riot in Salman Butt’s first
match as captain, following Shahid
Afridi’s shock resignation as skipper.
The Australians failed to handle
Mohammad Aamir and Mohammad
Chelsea blow as
injured Cech ruled
out for a month
▲
FOOTBALL
BY FRANK DALLERES
CHELSEA will be forced to launch
their Premier League title defence
without Petr Cech after the goalkeep-
er was struck down with a calf injury.
The Czech stopper hurt himself in
training yesterday and scans have
revealed a tear that is expected to
keep him sidelined for a month.
That will mean he misses the rest
of the double winners’ pre-season
campaign, including the Community
Shield clash with Manchester United
at Wembley on 8 August.
And he also looks likely to be
unavailable for the Blues opening
Premier League fixture, at home to
top-flight newcomers West Bromwich
Albion on 14 August.
Cech, 28, suffered a similar injury
last season against Inter Milan,
sidelining him for exactly a month as
Chelsea crashed out of Europe.
▲
FOOTBALL
STRIKER Eduardo ended his ill-fated
spell Arsenal last night by completing
a £6m move to Shakhtar Donestk.
The Croatian international agreed a
four-year deal with the Ukrainian club
after passing a medical.
Brazilian-born Eduardo joined the
Gunners from Dinamo Zagreb for
around £7.5m in July 2007 and made
an encouraging start until suffering a
horrendous broken leg against
Birmingham in February 2008.
Sadly, he never quite rediscovered
his best form, amid concerns of psy-
chological scars from the injury, and
Eduardo slipped down the Arsenal
Asif, who bagged three wickets
apiece, while fellow seamer Umar Gul
chipped in with two more as the
Aussies, leading 1-0 in the series, were
skittled out in just 33.1 overs.
Pakistan showed how it’s done in
reply, Butt (45) and Imran Farhat (43)
putting on 80 for the first wicket
before ending the day on 148-3.
The collapse will come as welcome
news to England, who go Down
Under to defend their Ashes urn this
winter – but only after they play a
summer series against Pakistan.
l Meanwhile, a decision of
whether future home England Ashes
Test matches will be available on free-
to-air television has been deferred
until after the digital switchover
process in 2013, Sports and Olympics
minister Hugh Robertson said yester-
day.
Sport 23
His latest setback will see either
Portuguese keeper Hilario or Ross
Turnbull step in between the posts.
Hilario, the more experienced of
the two, stepped into the breach
when Cech got injured in February,
but when he too was ruled out,
Turnbull got the nod, but failed to
keep a clean sheet in three attempts.
“Scans have shown Petr Cech has
torn a calf muscle in his right leg and
the goalkeeper is expected to be out
for a month,” read a statement from
Chelsea. “Cech suffered the injury
yesterday in training and is now
expected to miss the start of our com-
petitive season.”
Blues striker Franco di Santo could
be on his way out of Stamford Bridge,
however, with Feyenoord declaring
their interest in the 21-year-old. The
Argentinian has also been linked
with Wigan.
Chelsea step up their pre-season
with a friendly at Ajax tomorrow.
pecking order, prompting Shakhtar
to throw him a career lifeline.
Meanwhile, Gunners defender
Thomas Vermaelen claims he can
forge an impressive partnership with
new signing Laurent Koscielny.
“He is a good defender, he puts
pressure on the attackers all the time
and he is tight with his marking,”
Vermaelen said of the Frenchman.
“I have played alongside him a few
times in training and that has gone
well. He is a good defender.”
Vermaelen, meanwhile, captained
Arsenal to a 3-0 friendly victory at
Sturm Graz last night. Samir Nasri
netted a first-half double before sub-
stitute Henri Lansbury added a third.
Murali closes
in on 800 in
farewell Test
SPIN king Muttiah Muralitharan
needs just two wickets today to
reach the magical 800 mark before
he retires as Sri Lanka close in on vic-
tory against India in his farewell Test
in Galle.
The 38-year-old claimed figures of
5-63 – his 67th five-wicket haul – to
help dismiss India for 276 in pursuit
of 520-8dec.
Muralitharan struck again with the
wicket of Yuvraj Singh in the final
over of the day as India, following on,
were left reeling on 181-5 in their
second innings – still 63 runs behind.
Record Test run scorer Sachin
Tendulkar top-scored for India with
85 after sharing a record 18th centu-
ry stand with Rahul Dravid (44).