City Protesters Set Up in Finsbury Square: Legal Action Looms

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Cameron in
promise to
defend UK
PRIME Minister David Cameron last
night attempted to deflect attention
away from a massive rebellion of
Eurosceptic Tory MPs by pledging to
defend the interests of EU member
states that remain outside the
Eurozone.
Further fiscal integration in the
Eurozone seen as one solution to the
single currency areas debt crisis is
supported by the chancellor, George
Osborne. Yet it must not be at the
expense of Britains national interest,
Cameron insisted yesterday.
I have secured a commitment
today that we must safeguard the
interests of countries that want to stay
outside the euro, particularly with
respect to the integrity of the single
market for all 27 countries of the
European Union, he said.
The Prime Minister said there was a
danger of core Eurozone states taking
decisions over areas that are key to the
UK benefiting from the single market,
for instance financial services.
Other states outside the Eurozone,
such as Sweden and Poland, also
made the call for a level playing
field so that crucial decisions do not
get made without their involvement.
Cameron hopes that his stance will
appease Conservative MPs and voters
at home who have demanded a refer-
endum on whether or not Britain
should remain a part of the European
Union. The Westminster vote on the
motion is scheduled for today.
MPs SET TO REBEL: P6
BY JULIAN HARRIS
POLITICS
David Cameron will now attend a summit of European leaders on Wednesday Picture: REUTERS
CRACKS appeared in Europes show of
solidarity yesterday as politicians
descended into bickering and again
pushed back the deadline for present-
ing a rescue plan for the euro.
Prior to a stark warning from Prime
Minister David Cameron that the crisis
is having a chilling effect on growth,
French president Nicolas Sarkozy
reportedly lost his cool and snapped at
Cameron: Were sick of you criticising
us and telling us what to do.
Last night brought the end of a two-
day summit that had already been
postponed by a week and which was
meant to result in a comprehensive
plan that would give details of a bigger
haircut on Greek bonds, a bank recap-
italisation scheme and a boost to the
euro bailout fund.
It is thought that a new round of
stress tests will result in a bank recapi-
talisation scheme costing around
110bn, but in the event, no details or
confirmation emerged.
Instead, leaders spent much of their
time trying to smooth over a row
about the inclusion of non-Eurozone
EU nations in crisis talks.
EU president Herman Van Rompuy
attempted to reassure politicans about
the logistics of leaders next meeting,
now scheduled for Wednesday.
While the original plan had been to
include only the 17 Eurozone nations
on Wednesday, the ten other EU coun-
BY JULIET SAMUEL
EUROZONE
www.cityam.com FREE
UNITED HIT
FOR SIX
MAN CITY THUMP
NEIGHBOURS IN
DERBY SPORT: P38
CITY PROTESTERS SET UP
IN FINSBURY SQUARE
LEGAL ACTION LOOMS NEWS: P15
BUSINESS WITH PERSONALITY
tries will now also attend a set of talks.
EU countries had become worried
about being marginalised in decisions
that affect their economic welfare.
Those who share a common curren-
cy must take some common decisions
related to that currency, Van Rompuy
said. But it is vitally important to safe-
guard the union of the 27... We must
keep the links between the two types of
decision-making as close as possible.
But despite the display of unity,
leaders were manoeuvring against one
another behind the scenes. German
chancellor Angela Merkel was said to
have teamed up with Sarkozy to deliv-
er a rebuke to Italian Prime Minister
Silvio Berlusconi for his flip-flopping
on Italys austerity budget.
Sarkozy is also reportedly furious
that Berlusconi has decided to nomi-
nate an Italian to plug a hole on the
ECBs executive committee left by
Mario Draghi, who takes over as ECB
president next week. Italys move
leaves France with no representation
on the committee once current presi-
dent Jean-Claude Trichet retires.
But there were also tensions
between Sarkozy and Merkel after
France was said to have folded to
Berlins demands that the ECB not be
involved in bailing out banks or states.
Sarko had wanted the Bank to guaran-
tee the regions bailout fund.
ALLISTER HEATH: P2, MORE: P5-6
Issue 1,495 Monday 24 October 2011
Certified Distribution
29/08/11 till 02/10/11 is 98,447
ROW ENGULFS EU
CRUNCH SUMMIT
News
2 CITYA.M. 24 OCTOBER 2011
US rating may
be cut again
THE United States will likely suffer
the loss of its triple-A credit rating
from another major rating agency by
the end of this year due to concerns
over the deficit, Bank of America
Merrill Lynch forecasts.
The trigger would be a likely failure
by Congress to agree on a credible
long-term plan to cut the US deficit,
the bank said in a research note pub-
lished over the weekend.
A second downgrade either from
Moodys or Fitch would follow
Standard & Poors downgrade in
August on concerns about the govern-
ments budget deficit and rising debt
burden. A second loss of the coun-
trys top credit rating would be an
additional blow to the sluggish US
economy, Merrill said.
The credit rating agencies have
strongly suggested that further rating
cuts are likely if Congress does not
come up with a credible long-run
plan to cut the deficit, Merrills
North American economist, Ethan
Harris, wrote in the report.
Hence, we expect at least one cred-
it downgrade in late November or
early December when the super com-
mittee crashes, he added.
The super committee is a biparti-
san congressional committee formed
to reach a deal by 23 November to cut
$1.2 trillion from deficit
BY HARRY BANKS
WORLD ECONOMY
Cameron gets it wrong over EU mess

IT is a messy, angry and confusing pic-
ture. But some elements of the long-
awaited deal to rescue the Eurozone
are beginning to emerge. Banks will
have to raise over 100bn in capital;
Frances proposal to boost the firepow-
er of the bailout fund by turning it
into a bank and letting it borrow from
the European Central Bank has been
defeated. We will probably end up
with some horrible system to guaran-
tee some losses on Italian and Spanish
bonds, combined with an off-balance
sheet vehicle, possibly backed by the
IMF. This may work in the sense that
it could ring-fence Greece (whose hair-
cut will probably be 50-60 per cent,
not the pathetic 21 per cent previous-
ly agreed) but at the cost of destroying
the finances of other countries and
building vast resentment among the
public. The scheme wont tackle the
root cause of the problem: the weaker
economies are losing competitiveness
and stagnating because they dont
have the political strength to reform
their economies and cut costs and
can no longer opt for the cheap way
out of debasing their currencies.
We are now likely to see a scramble
for capital, as institutions try to raise
the funds they need to cope with writ-
ing down toxic sovereign debt and
ensuring they meet the 9 per cent cap-
ital requirements. Existing sharehold-
ers as well as sovereign wealth funds
will be tapped; but governments and
the bailout fund may also step in.
This will have unintended conse-
quences: because capital is scarce,
many institutions will find it easier to
meet requirements by reducing their
balance sheets, rather than by finding
extra funds. This means fewer loans,
increasing the chances of recession.
And even though the toxic debt
responsible for this crisis was issued
by failed governments, and that finan-
cial institutions must for regulatory
reasons stock up on sovereign debt,
bailouts will prove to be another repu-
tational and political disaster for
Eurozone banks and all financial insti-
tutions. If they had any sense, govern-
ments would authorise bail-ins in the
form of debt for equity swaps, recapi-
talising banks without the need for
any taxpayer cash. To avoid panicking
the bond markets, this could be
phased in over a longer period.
Given this backdrop, and the
absurdity of the European machinery,
it beggars belief that David Cameron
has chosen this moment to pick a
fight with his backbenchers over
Europe. It is obviously true that there
are huge costs to the UKs member-
ship of the EU. There are also benefits,
of course, but these are less than the
costs, which keep going up as a result
of new regulations, some of them
deliberately targeted to inflict maxi-
mum damage on London (such as the
proposed Tobin tax). As Cameron him-
self has promised repeatedly, it is time
for the UK to forge a new settlement
with the EU. The UK, fortunately, is
not part of the euro (the only major
decision Gordon Brown got right) but
it also needs to regain control over its
economic and social policies, as well
as over a raft of other areas.
Reasonable people can disagree on
how exactly this should be done. But
the status quo is no longer tenable. It
is crippling the economy, increasing
unemployment and blocking a sup-
ply-side revolution to liberate Britains
economy and society. The Tory back-
benchers who will be revolting today
may be destroying their careers, cour-
tesy of the prime ministers strange
refusal to see sense but they will be
doing their country a favour.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
JUBILANT Libyans celebrated yester-
day as politicians declared the coun-
try liberated after 42 years of rule
by Colonel Muammar Gaddafi.
At a huge rally in Benghazi, where
the uprising began eight months ago,
Abdel Hafiz Ghoga, the National
Transitional Councils vice chairman
said: Declaration of Liberation. Raise
your head high. You are a free
Libyan.
Meanwhile defence secretary
Philip Hammond said yesterday the
new Libyan governments reputation
has been a little bit stained by the
killing of Gaddafi.
Its certainly not the way we do
things, he said in a television inter-
view. We would have liked to see Col
Gaddafi going on trial to answer for
his misdeeds.
Hammond said court proceedings
would have held the dictator to
account and an investigation should
be held into his death.
BY JENNY FORSYTH
WORLD
Libya declared liberated

Libyans yesterday celebrated the end of Gaddafis 42-year regime Picture: REUTERS
NEWS | IN BRIEF
Turkish earthquake toll mounts
As many as 1,000 people were feared
killed yesterday when a powerful earth-
quake hit southeast Turkey, destroying
dozens of buildings and trapping some
victims alive under rubble. As night fell,
survivors and emergency workers bat-
tled to pull people out of the debris in
the city of Van and town of Ercis, where
a student dormitory collapsed. Residents
in Van joined in a frantic search, using
hands and shovels and working under
floodlights and flashlights, hearing voic-
es of survivors crying for help under
mounds of shattered concrete in pitch
darkness and bitter cold.
Euro crisis immense: Broadbent
The scale of the deepening financial cri-
sis in the Eurozone is so great that policy
can not protect Britain from it, accord-
ing to MPC member Ben Broadbent.
Banking policy would work only to
some extent as the scale of some prob-
lems were such that one cannot offset
them, he told the Financial Times. The
former Goldman Sachs economist, who
joined the rate setting committee in
June, likened the gathering crisis to the
unpreventable 2008/2009 recession.
EDITORS LETTER
ALLISTER HEATH
Editorial Statement
This newspaper adheres to the system of
self-regulation overseen by the Press Complaints
Commission. The PCC takes complaints about the
editorial content of publications under the Editors
Code of Practice, a copy of which can be found at
www.pcc.org.uk
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of City A.M. Please ring 0207 015 1230, or email
distribution@cityam.com
President Barack
Obama will likely see
the US credit rating
cut by Fitch or Moodys
by the end of the year
4th Floor, 33 Queen Street, London, EC4R 1BR
Tel: 020 3201 8900 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Jo Simpson
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
ABN AMRO SEEKS NEW LIFE AS
GLOBAL FORCE
ABN Amro, the Dutch bank that has
seen two of its three post-crisis own-
ers collapse, is on a mission to re-
emerge as a force in the sector and
has promised to be a buyer of
Eurozone financial assets that capi-
tal-stretched banks are preparing to
sell. Gerrit Zalm, the former Dutch
finance minister who is now chief
executive of the nationalised rump of
ABN, said he had spoken to almost
all of its European rivals about the
idea.
VW TO OVERTAKE TOYOTA FOR TOP
SPOT
Volkswagen will become the worlds
biggest carmaker this year seven
years earlier than its managements
aim to replace Toyota in top spot,
according to three leading consultan-
cies.
FRC FIRES ACROSS THE BOW OF REGU-
LATOR
The guardian of the UK corporate
code has warned that it will speak
out against overzealous regulators if
it believes their activities are damag-
ing Britains boardroom governance
culture. The move by the Financial
Reporting Council is seen by many as
a shot across the bows of the
Financial Services Authority.
F1 MEDIA RIGHTS SHOWDOWN LOOMS
The Formula One Teams Association
has hired Evolution Media Capital, a
boutique investment bank, to assess
the value of its media rights before
it negotiates a new funding agree-
ment with CVC, the private equity
firm that owns the sport. Fota,CVC,
Bernie Ecclestone, the head of F1,
and the Federation Internationale
de lAutomobile, the sports govern-
ing body, are next year due to nego-
tiate a new Concorde agreement,
which is set to divide up F1 rev-
enues.
ONLINE BETTING CHIEFS OFFERED
WORKERS INCENTIVES TO STRIKE
Britains most profitable online gam-
ing and betting company is facing a
deepening crisis after staff alleged
that rebel managers offered them
incentives to stage a walkout last
week. William Hill Online continues
to face disruption from its 180 staff in
Israel and many did not turn up to
work yesterday. The online betting
group is a partnership between
William Hill which owns 71 per
cent and Playtech.
NERVOUS STEEL BUYERS CUT ORDERS
Steel production from British mills
fell by 7.3 per cent over the past quar-
ter, reflecting the weakness in manu-
facturing markets. UK Steel, the trade
body, said that production of 179,300
tonnes per week between July and
September was more than a third
lower than pre-recession levels.
HEATING OIL SHORTAGE MAY BE
WORSE AFTER LATE ORDERS
The heating-oil crisis exposing more
than a million families to price spikes
and shortages last winter may be even
worse this year, according to the UKs
largest supplier. During the chaos, the
Government had to intervene with
emergency measures to deal with
blockages, as the snow hampered
deliveries. Prices also shot up by
around 70pc, amid a rush for heating
oil needed to keep many rural house-
holds warm.
RUPERT MURDOCH STILL UNDER PRES-
SURE FROM HERMES AND CHURCH OF
ENGLAND FUNDS
The Church of England and Hermes
have pledged to keep pushing for
change at News Corp after Rupert
Murdoch saw off a shareholder revolt
last week over the phone-hacking
scandal.
PACT MOVES TOWARD APPROVAL AT
CHRYSLER
The United Auto Workers union
appeared to be days away from com-
pleting its work with all three Detroit
auto makers as more Chrysler Group
workers threw their support behind
the tentative contract. Rank-and-file
members at the big Sterling Heights
assembly plant in Michigan approved
the accord, with more than 53 per
cent of those voting supporting the
pact, according to a union official.
STEVE JOBS DOWNPLAYED HIS
CANCER, BIOGRAPHER SAYS
Apple co-founder Steve Jobs down-
played the seriousness of his battle
with cancer for years even as he
received secret treatments, biogra-
pher Walter Isaacson told CBSs 60
Minutes in a segment scheduled to
air yesterday evening. It said Jobs
resisted having surgery for cancer.
WHAT THE OTHER PAPERS SAY THIS MORNING
LLOYDS could delay the disposal of 632
branches by up to two years in order to
wait out volatile markets if its sale
process falls through.
The plan was to offload the branch-
es by selling them before 2012.
But a lack of interest in the assets
could now push Lloyds towards an
alternative plan to float them.
And insiders say that any float
would probably necessitate waiting at
least a year for capital markets to
recover from their current precarious
state.
You could see them waiting two
years for the market to get better, said
a source familiar with the situation.
However, waiting too long could
push it close to EU regulators
November 2013 deadline for selling
the branches. Some bankers in the
industry think Lloyds will have to
apply for an extension to the deadline.
Lloyds branch float
could lead to delay
Nick Buckles could
be in for a long
battle to persuade
shareholders of the
merits of his deal
to buy ISS
Picture:
REUTERS
BY JULIET SAMUEL
BANKING
News
THE fight to stop security giant G4S
5.2bn takeover of Danish rival ISS is
mounting with one of the countrys
proxy groups speaking of its concerns
over the deal.
Institutional Shareholder Services,
a corporate governance adviser to
1,700 large investors, spoke out over
the weekend about concerns over the
difficulties of integrating the two
firms and the level of debt involved in
the deal.
We see risk in terms of increased
leverage, integration of a sizeable busi-
ness in a different sector, and potential
loss of focus during the integration
period in a business that is competi-
tive and exhibits tight margins. We
believe its unclear whether the upside
in this deal compensates shareholders
for the risk they will bear. On the
other hand, we see clear upside should
shareholders vote down the transac-
tion.
Shares in G4S plunged 22 per cent
after it announced the deal last week
and have only recovered a bit since.
Chief executive Nick Buckles faced a
further blow when Edoardo
Mercadante, the founder of fifth-
largest shareholder Parvus, said the
asset manager would vote against the
deal, which would involve a 2bn
rights issue and G4S assuming ISS
debt of 3.67bn. When asked about
Institutional Shareholder Services a
spokesman for G4S said: They have
not met the company, they have not
heard the strategy and there are factu-
al inaccuracies in their report.
If the merger between G4S and ISS
goes ahead then the group could raise
around 250m by selling off the non-
core parts of its French arm.
Anger grows
over 5.2bn
deal by G4S
BY PETER EDWARDS
M&A
Recovery may take time as

Buckles gets investors onside
SHARES in G4S have recovered
about a quarter of the 20 per cent-
plus they lost on Monday after it
announced the ISS deal, but that
still leaves the firm chasing a seri-
ous hit to its market cap with no
storming comeback visible on the
horizon.
Mired in a game of tugowar
with investor groups, G4S has gone
on the defensive, saying supportive
meetings have been held and
shareholders are being persuaded
to come onside once theyve had
the rationale and significant ben-
efits explained to them.
But opposition has strengthened
over the weekend, adding weight
to Parvus objections, and with
influential investor adviser group
International Shareholder Services
(currently urging NewsCorp
investors to throw out 13 of its
board members) wading into the
debate, its likely to drag on for
sometime.
Nick Buckles clearly believes in
the deal he was quoted yesterday
as saying the drop in price had
come as a shock and is currently
on a global charm offensive meet-
ing investors but hes still got a
long way to go to be sure of the 75
per cent approval that the deal
needs, making any further recov-
ery in the shares unlikely soon.
BOTTOMLINE
Analysis by Elizabeth Fournier
ANALYSIS l G4S
p
18Oct 19Oct 20Oct 21 Oct 17Oct
260
240
220
242.30
21 Oct
DETAILS of a mass-bailout for Europes
banks continued to elude the regions
leaders yesterday, but they are now
thought to be mulling stress tests that
would result in banks having to raise
around 110bn (95.6bn).
Banks will have to try and raise the
cash themselves by an agreed dead-
line, whereupon sovereign states will
then use public funds to bring them
up to the required level for those that
have failed to tap up private investors.
Analyst estimates for the cost fall
into a wide range of 100bn-400bn,
with Goldman Sachs suggesting that
50 of the 90 banks being stress-tested
in order to generate their capital tar-
gets will fail the exercise. Credit Suisse
suggests 66 will fail.
More important than the pass rate
for the tests, however, will be the time-
line for raising capital. JP Morgan ana-
lyst Kian Abouhossein called it
unrealistic, saying: The discussed
six to nine months timeframe to reach
adequate capital levels without euro
[mass bailout] is unacceptable Bank
equity investors need immediate capi-
tal injection through mandatory con-
vertibles by governments not a six to
nine-month time vacuum.
Overall, investors are cautious on
Spanish, Italian and French banks and
more relaxed about UK banks, which
are not expected to need to raise capi-
tal. The consensus on German banks is
more mixed.
Deutsche Bank chief executive Josef
Ackermann has vocally opposed
imposing large losses on banks that
hold a large number of Greek bonds
and has said any recapitalisation
should be selective and limited rather
than taking a blanket approach.
Bank capital
timeline seen
as unrealistic
Deutsche Bank chief Josef Ackermann opposes a blanket recapitalisation Picture: REUTERS
BY JULIET SAMUEL
EUROZONE
The third round of EU stress tests will be used

to work out which banks need to raise cash.
They are believed to have a pass rate of a 9 per
cent core tier one capital ratio after writing down
sovereign bond holdings to market prices.
FAST FACTS | STRESS TESTS
News
EU SUMMIT:
THE TOP
ISSUES
Q.
WHAT ACTION WILL BE TAKEN TO
BOOST THE BAILOUT FUND?
A.
France wants the euro bailout
fund to become a bank and bor-
row from the ECB, boosting its
440bn firepower. The leveraged fund
would then be used to help troubled
banks and nations. Germany believes
this breaks treaties preventing the
ECB from funding state spending. It
favours using the fund to take the
first 20 per cent of losses on sovereign
debt, cutting risk for investors; or ask-
ing countries like China and Brazil to
beef up the fund.
Q.
AND HOW ABOUT THE GREEK HAIR-
CUT?
A.
Politicians, led by Germany, want
private investors to agree to a 50
per cent haircut, reducing Greeces
national debt to 120 per cent of GDP.
However, debtholders, mostly in the
form of European banks, say this is
too much, and want a haircut of 40
per cent or less. Either way, this is
much larger than the 21 per cent
agreed in July, reflecting politicians
admission that Greece is still insol-
vent.
Q.
WHAT IS THE PLAN ON BANK
RECAPITALISATION?
A.
Supposedly, agreement has been
reached on a framework, but no
details announced. It is expected that
the newest round of stress tests will
result in a capital-raising requirement
of 110bn for Europes weakest banks.
However, some analysts warn that
over 400bn could be needed.
Q A
&
THREATS to clamp down on Tory MPs
who defy the partys three line whip
are expected to go ignored today, with
rebels determined to vote for a referen-
dum on the UKs membership of the
European Union.
Despite three line whips unusually
being imposed by all three main par-
ties against the motion, around 70
Conservative MPs and even some
Liberal Democrat and Labour MPs
could vote in favour of the controver-
sial move.
I dont think this is the right time
to legislate for an in-out referendum,
Prime Minister David Cameron argued
yesterday, speaking from Brussels.
This is time to sort out the Eurozone.
Yet arch-eurosceptic John Redwood
said the timing was due to Camerons
own very good idea of setting up a
petitions website for the public.
Thats why its happening now,
Redwood said. Over 100,000 names
are on the petition, with more signing
other petitions.
We can see the intention of
Eurozone governments to take their
relationship forward, Redwood told
City A.M. And so the UKs own relation-
ship with the EU needs to be on the
agenda.
However, Defence Secretary Philip
Hammond said Cameron would stick
to his decision to impose the toughest
voting orders on Conservative MPs.
It is not government policy to have
an in/out referendum on Britains
membership of the European Union,
Hammond said. The three-line whip
remains because the motion is con-
trary to government policy.
MPs who defy a three line whip can
be expelled from the party. Yet the
Conservatives are unlikely to be able to
punish a widespread rebellion.
Rebels set to
stick to guns
BY JULIAN HARRIS
POLITICS
LORD Adair Turner, chairman of the

Financial Services Authority, yesterday
admitted he was wrong to argue
Britain should have joined the euro.
Turner, a former director general of
the Confederation of British Industry,
argued in a 2002 paper that joining
the euro would increase our incomes
and our standard of living.
At each stage the opponents of the
euro have forecast disasters which
have never happened and always
looked unlikely, said the paper, which
he co-authored. The eurosceptics con-
stantly underestimated the compe-
tence of the Europeans and their abili-
ty to organise things properly.
But now he recognises that a disas-
ter has happened and the UK would be
in a worse position had it joined.
The bit I failed to realise is the issue
of Eurozone banks, Turner, pictured,
told the Observer. The thing that has
gone wrong is the way weve encour-
aged Italian banks to hold to Italian
debt, and so on. I wish Id been clever
enough to think of that in advance.
His opponent, economist Patrick
Minford, told City A.M. Turner was
very enthusiastic at the time. He was a
typical pro-European, arguing in polit-
ical terms and pooh-poohing econom-
ic risks. It does him credit that he
changed his mind.
We did a lot of modelling before
hand that showed the UK is more
similar economically to the US than
to Europe and so monetary freedom
was a great benefit.
The experience in Ireland can
be seen as a microcosm of
what may have hap-
pened had the UK
joined they com-
pletely lost con-
trol on the
e c o n o mi c
upswing and
downswing.
The UKs
bust was
not on the same scale.
William Hague, now
foreign secretary, cam-
paigned against joining.
I always thought that
the idea you could have
monetary union among
many very different
economies without
further economic
and fiscal integra-
tion was extreme-
ly unlikely to
work and would
have some very
damaging con-
sequences, he
told City A.M.
If we had gone in it would not only
have been a catastrophe for Britain but
with the deficit Gordon Brown built
up it would also have been a catastro-
phe for the Euro.
Ken Clarke, now Justice Secretary,
wanted to join the euro. He declined
to comment, but in July refused to
rule out British membership in future.
Ed Balls, Labours shadow chancel-
lor was a key adviser to then-chancel-
lor Gordon Brown. He devised the five
economic tests which Britain would
have to meet to join the euro, thus
keeping Britain out. I do not believe
for a moment that Britain could have
sustained being a member of the
euro in the crisis, he said.
Lord Turner admits error in arguing for the euro
BY TIM WALLACE
UK ECONOMICS
News
Tory MP John Redwood wants a referendum on EU membership Picture: REX
News
GOOGLE has emerged as a surprise
potential suitor for embattled
Yahoo, with the search giant
understood to be in talks with pri-
vate equity backers over a possible
deal.
The prospective partners are
thought to have held preliminary
discussions in which Google could
partly finance a deal but have not
come up with a formal proposal
Any bid is likely to attract fierce
scrutiny on competition grounds,
with a tie-up, even in a joint ven-
ture with private equity partners,
likely to further boost Googles
dominance.
Google could not be reached for
comment.
A deal would also raise ques-
tions about Microsofts relation-
ship with Yahoo. The software
giant, which had a $44.6bn
(28.5bn) bid for the firm rejected
in 2008, has forged a partnership
in which Microsofts Bing search
engine is integrated into Yahoos
portal.
Microsoft has already been
linked with a possible move for the
company, albeit for a price closer to
its current market cap of $18bn
than its previous offer.
A bid may also involve a tie-up
with a private equity firm, people
familiar with the matter have said.
Yahoo has been in a state of
chaos since it fired former chief
executive Carol Bartz last month.
The company retained investment
banking firm Allen & Co to help
conduct a strategic review of its
business and is reportedly working
with executive search firm
Heidrick & Struggles to find a new
boss.
A number of potential buyers
have expressed interest in a deal
with Yahoo. Private equity firms
Silver Lake Partners, Providence
Equity Partners, Bain Capital,
Hellman & Friedman, Blackstone
Group, and KKR are among those
likely to get a look at the limited
financial data Yahoos advisers are
circulating.
It is not clear which private equi-
ty firms Google has spoken to,
according to the Wall Street
Journal.
Google could mount
a shock Yahoo bid
BY STEVE DINNEEN
TECHNOLOGY
CANADA warned yesterday it will

defend its interests if the
European Union (EU) goes through
with a proposal to rank Canadian
oil sands as a highly polluting fuel.
In a letter to EU Energy
Commissioner Guenther
Oettinger, Canadian Natural
Resources Minister Joe Oliver also
said the European Commissions
Fuel Quality Directive (FQD) poten-
tially violates the EUs internation-
al trade obligations.
Canada objects to policy meas-
ures that ignore evidence-based
approaches to meet the stated goal
of the FQD, in favour of what
appears to be an asymmetrical and
arbitrary proposal, the letter said.
If unjustified, discriminatory
measures to implement the FQD
are put in place, Canada will not
hesitate to defend its interests.
The letter is part of a broader
push by Canada, the western
province of Alberta and the energy
industry to sway the EU from label-
ing the lucrative export as inher-
ently dirty.
The government of Alberta,
home to the bulk of Canadas oil
sands, has written to EU experts
voicing grave concerns that the
blocs plans to rank unconvention-
al oil as a highly polluting fuel are
unfair and a potential threat to
trade ties.
EU legal advisers said the propos-
als can probably be defended if
Ottawa challenges the move at the
World Trade Organisation (WTO).
Canada exports no oil sands-
derived crude to Europe, but indus-
try officials worry the labelling
could set a costly precedent for cur-
rent or potential markets.
Canada vows to defend its interests
over oil sands being called pollutants
ENERGY
A SLOWDOWN in the Chinese

economy would be unhelpful
to both the UK and Europe,
according to the majority of
participants in our latest Voice
of the City poll, run in associa-
tion with PoliticsHome.com.
Seventy-one per cent of our
panel said a slower Chinese
growth would be either very or
somewhat unhelpful to the
Western economies, with
two per cent labelling the
potential effect as devas-
tating.
However, the panel
was divided on
whether a real threat
exists, with 36 per
cent agreeing that
China was running
out of steam, while
44 per cent dis-
agreed.
At the G20 meeting
in Paris earlier this month, the
Chinese delegation, led by
finance minister Xie Xuren
(pictured) urged countries to
work together to
enhance coordination
on macroeconomic
policies to guard
economic growth
and financial
stability.
According to official
figures, Chinas econom-
ic expansion slowed to
9.1 per cent from a year earlier
in the third quarter, its weakest
pace in more than two years as
euro-debt strains and a sluggish
US economy took a toll.
But just 26 per cent of our
panel believed the official sta-
tistics, with 57 per cent deem-
ing the results either somewhat
or not at all credible.
To join the panel and have
your say as part of our weekly
political survey, apply at
www.cityam.com/panel.
PoliticsHome.com PoliticsHome.com The Chinese economy is running out of steam." To what
extent do you agree or disagree with this statement?
Agree completely
Tend to agree
Neither agree nor disagree
Tend to disagree
Disagree completely
Don't know
5
%
4
32
18
33
11
2
What would be the effect of a slowdown in the
Chinese economy on the UK and European economies?
Excellent
Very helpful
Somewhat helpful
Neither helpful nor unhelpful
Somewhat unhelpful
Very unhelpful
Devastating
Don't know
5
%
25
1
1
2
2
8 15
46
To what extent do you believe that official Chinese
Government growth statistics are credible?
Totally credible
Somewhat credible
Neither credible nor not credible
Somewhat not credible
Not at all credible
Don't know
5
%
11
44
13
41
16
25
Apply to join today at www.cityam.com/panel
In association with PoliticsHome.com
BY ELIZABETH FOURNIER
CHINA ECONOMY
In partnership
with
Slowdown in Chinese economy would be
bad for the UK and Europe, says our panel
News
LAW firm Taylor Wessing is set to
become the first professional services
firm to join the east London Tech City
project.
The company will open a dedicated
office there, from which it hopes to
attract business from the growing tech-
nology hub.
Taylor Wessing says it already acts
for a number of the fastest growing
technology businesses in the UK and
hopes the move will cement it as the
go-to law firm for the sector.
The office will be manned by a rota-
tion of partners from its TMT, venture
capital, intellectual property, tax and
incentives, inward investment and
employment divisions.
Simon Walker, the partner leading
the dedicated Tech City team said: We
see companies in Tech City as an area
in need of dedicated investment. Our
office in Tech City brings us closer to
the businesses of tomorrow and allows
us to help them grow by sharing our
experience and understanding of the
issues they face. We want to ensure we
are supporting these firms from the
centre, not the sidelines.
The news is a boost to the develop-
ment, which has faced criticism from
some quarters for not attracting
enough marquee firms. So far the proj-
ect has struggled to live up to govern-
ment hopes it will become a rival to
Silicon Valley in the US.
Twitters decision to establish an
international office in Dublin last
month was seen as a snub to Tech City.
However, Googles announcement
that it has signed a ten-year lease there
has helped to answer some of those
critics. Chancellor George Osborne said
the move was great news for the area.
It is hoped large companies like
Google will help to spawn an ecosys-
tem where smaller support firms
emerge to provide support services.
Tech City, which encompasses devel-
opments at Old Street and Stratford, is
also home to promising start-ups
including Last FM, Huddle, Yammer
and SoundCloud.
Technology hubs already exist
around Cambridge and in Bristol.
Tech City gets
law firm boost
The Tech City area in east London will be joined by law firm Taylor Wessing
BY STEVE DINNEEN
TECHNOLOGY
ROTHSCHILD
GIVES STAFF
ITS TURKEY
OF A BONUS
EVERY little helps, as the Tesco slogan
goes. So the price-conscious supermarket
giant will be pleased to learn that the
competitively remunerated London
employees of Rothschild receive daily
luncheon vouchers for the sum of 3 that
can be refunded in any of its stores.
But Rothschilds solicitous attempts to
ensure its workforce is well fed dont stop
there. Thanks to an arrangement with
one of the banks clients, understood to be
in the poultry farming line of business,
The Capitalist hears every member of the
London office is also being given a free
turkey this Christmas.
Staff have already filled in their order
forms for the fowls which come in small,
medium or large options in a heartwarm-
ing display of Dickensian largesse.
A word of warning though the large
birds, which feed a small army of 20, are
reportedly so big one banker last year had
to cut her feathered Christmas bonus in
half before it would fit in the oven
AGENDA SETTING
ENTERTAININGLY for a pressure group
supposedly protesting against capital-
ism, the Occupy London Stock Exchange
activists spent a lot of energy debating
which bank should hold their expanding
assets at their general meeting.
Are we seriously standing here and
talking about the ethics of transferring
money? quibbled one member as the
merits of The Co-op versus the Post Office
as a recipient of the movements 4,000
donations dominated the agenda.
By the time the group had covered
whether paper cups can be recycled and
ratified the on-site intoxication policy
40 per cent voted for discreet use of
drugs and alcohol there was no time to
decide what the protest actually stands
for. We have not discussed anything ide-
ological, which is a shame, concluded
the minutes. We need to keep ourselves
here for a reason, but we still havent
decided what the reason is.
SOCIAL NETWORK
THERE IS more than one visionary in the
Saatchi advertising dynasty step forward
Edward, son of Maurice Saatchi, whose
tech start-up NationalField has launched
in the UK following a road test on Barack
Obamas election campaign in the US.
The private social network, which
connects managers to their underlings,
aims to do for big business what
Facebook has done for individuals
hence Saatchi Jnrs new billing as the
UKs answer to Mark Zuckerberg.
Fowl play: Rothschild is giving its well-fed bankers a feathered bonus this Christmas Picture: REX
The Capitalist
EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @dennysharriet
THE TOUGH times have finally
reached Mayfair. When four pri-
vate investors hit Bellamys on
Bruton Place, they economised
by settling for only the second-
most expensive vintage on the
wine list that prides itself on
accessible prices the 1982
Chteau Cos dEstournel St
Estphe at 975. Add in a 150
bottle of 2007 Clos des
Mouches and some fine French
brasserie-style cooking by for-
mer Annabels chef Stphane
Pacoud, and youre looking at
north of 1,500, including serv-
ice. Patron Gavin Rankin was
like the grave when asked to
name his oenophile associates,
but did reveal some of his fel-
low investors in the consor-
tium-owned restaurant:
former M&S chairman Sir
Stuart Rose and Jigsaw own-
ers John and Belle Robinson.
BILL OF THE WEEK

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KPMG, the auditors of the British
medical equipment company at the
heart of the Olympus scandal, quit
last year over a series of mysterious
payments made to the Cayman
Islands.
Last week, Olympus former chief
executive turned whistleblower
Michael Woodford sent the technol-
ogy firms share price plummeting
after claiming he was fired after
questioning $1.3bn (815m) pay-
ments spent by the firm during
acquisitions betwen 2006-2009.
Woodford discovered that one of
the payments included a $687m fee
to a Cayman Islands-registered
company, AXAM for advice in con-
nection to the $2.2bn acquisition of
Gyrus in 2008.
It was revealed yesterday that
KPMG resigned as auditors to Gyrus
two years later after qualifying the
firms accounts for the year to
March 2009, citing discrepancies in
the accounts.
In a resignation letter filed on
Companies House in June 2010,
KPMG said: We consider that there
are circumstances connected with
our ceasing to hold office that
should be brought to the attention
of the companys members or credi-
tors.
In the accounts, KPMG said it had
not been provided with details of
Axam sufficient to enable us to
form an opinion as to whether it is
a related party... In our opinion,
proper accounting records have not
been maintained.
Last week Woodford handed his
findings to Britains Serious Fraud
Office, which is considering launch-
ing an investigation. Olympus
agreed on Friday to set up an inde-
pendent committee to look into the
scandal.
Auditors quit over
Olympus payments
BY KASMIRA JEFFORD
TECHNOLOGY
News
TUNISIANS FLOCK TO VOTE IN FIRST ELECTION
Tunisians flocked
to the countrys
first democratic
election yesterday,
with officials esti-
mating 90 per cent
of the 4.1m people
registered to vote
turned out at the
polls, as well as
many who had not
registered in
advance. Even
Nejib Chebbi (left),
head and founder
of Tunisias
Progressive
Democratic Party
(PDP) waited in
line.
Picture: REUTERS
NEWS | IN BRIEF
Hungarians protest at cuts
Tens of thousands of Hungarians
protested in central Budapest yester-
day against the centre-right govern-
ment, demanding more transparent
legislation and protection for the coun-
try's free-market democracy. The rally
was timed to coincide with the 55th
anniversary of Hungary's 1956 revolt
against Soviet rule. Protesters, organ-
ised mainly through Facebook, came
from a loose alliance of liberal intellec-
tuals and unions, which has grown in
recent months alongside deep discon-
tent with all political parties.
Hungary's ruling Fidesz party has lost
more than a million voters since it won
a two-thirds majority in parliament
last year, alienating them with meas-
ures many feel have been forced on
them after little or no consultation.
To cut public debt and the budget
deficit, Fidesz grabbed about $15bn
worth of private pension fund assets.
MORE NEWS
ONLINE AT
@
@
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News
KESA Electricals is considering quit-
ting the London Stock Exchange in
favour of a Paris listing once it has
sold its troubled Comet business.
Moving the group to France
would help it to avoid constant
comparisons with Britains retail
sector, a shift some major share-
holders would view as beneficial.
It could also change its name to
Darty, after its stellar European
brand, in an attempt to revive its
fortunes, but this is not thought to
be a priority.
Kesas directors have already
looked at moving the listing to
France, which was suggested earlier
this year by activist shareholder
Knight Vinke, but no decision has
been made.
In the meantime it is pushing
ahead with a revamp of Comet,
which has seen sales tumble and its
performance described as neither
satisfactory nor acceptable by Kesa
chairman David Newlands.
Kesa, which yesterday declined to
comment, had hoped to auction off
Comet but its plans have been hit
by poor results and concerns over
its pension pot and property com-
mitments.
Directors are, however, still con-
sidering a sale of Comet and have
reportedly held discussions with
private equity house OpCapita and
restructuring and buyout group
Hilco. Kesa may retain a stake in
Comet if a deal goes through.
Yesterday Kesa chief executive
Thierry Falque-Pierrotin told a
Sunday newspaper: we have not
given up on the UK.
Last month Comet said first quar-
ter sales at stores open over a year
had slumped 22.1 per cent, partially
driven by a comparison with the
World Cup year of 2010.
Kesa mulls move to
quit London listing
BY PETER EDWARDS
RETAIL
Kesa chief executive Thierry Falque-Pierrotin may decide to list the company in France instead of the UK
NEWS | IN BRIEF
Paranormal 3 jolts box ofce
Horror movie Paranormal Activity 3
jolted awake a sleepy movie box ofce
with an estimated $80m (50.2m) in
global ticket sales over the weekend. The
third instalment of the low-budget
haunted house movies topped domestic
charts with $54m from US and
Canadian theatres, the highest-grossing
domestic debut for a horror lm and a
record for an October release. The movie
added $26m from international markets
including Britain over the weekend, dis-
tributor Paramount Pictures said yester-
day. Like the rst two lms in the series,
"Paranormal 3" was released just before
Halloween and produced on a budget
tiny by Hollywood standards. The latest
movie, the most expensive of the trio,
cost $5m to make. The movie is a pre-
quel about two young sisters and their
creepy encounters with an invisible pres-
ence in their home, all recorded by sur-
veillance cameras.
News
THE City of London has vowed to get
tough with protesters camping outside
St Pauls as the Occupy LSX movement
enters its second week.
A crunch meeting today will see the
City of London Corporation meet with
representatives of the cathedral and
lawyers to discuss how to close down
the makeshift commune.
A spokesman for the Corporation told
City A.M.: Clearly we cant go on indefi-
nitely having a campsite in the middle
of the City.
We have held daily meetings and
will discuss our legal options today.
Legitimate protest is a proper part of
democracy but camping in one of the
most densely used spaces in the world is
not an option.
Meanwhile, members of Occupy LSX
are set to discuss adding new bases after
an overspill at St Pauls prompted
them to move into the Moorgate area.
A spokesman for the group yesterday
told City A.M. a third site is on the
cards.
The new camp at Finsbury Square, set
up on Saturday, puts the protesters
within close reach of the offices of Royal
Bank of Scotland, UBS and a series of
other global banks.
Yesterday around 30 tents were set up
but that number is expected to grow
over the coming days, which could hit
trade at the nearby bars and restaurants
favoured by City workers. A spokesman
for Chiswell Street Dining Rooms said
the protests could affect our business
and could concern us.
Around 2,000 people gathered at St
Pauls on Saturday, after the cathedral
announced it was closed to visitors for
the first time since the end of World
War Two.
The Right Reverend Graeme Knowles,
the Dean, said the decision to shut
indefinitely had been taken due to
health and safety concerns and with a
very heavy heart.
Today members of Occupy LSX and
UK Uncut are set to march on the offices
of HM Revenue & Customs and to call
for the resignation of its head David
Harnett, after he admitted it made a
mistake in its so-called sweetheart tax
deal with Goldman Sachs. HMRC has
denied doing sweetheart deals.
STUART FRASER P:27
City of London calls in lawyers over St Pauls
campers as disruptions enter second week
Protesters set up
camp in Finsbury
Square (far left),
while remaining in
situ at St Pauls (near-
est left)
Pictures: Laura Lean /
City A.M.
BY STEVE DINNEEN AND PETER EDWARDS
PROTESTS
*Based on a pension fund of 100,000 with a trail commission payable to a client over 30 years (i.e. a 35 year old retiring at 65) the total amount would be 67,041 (gross is 83,801). This calculation assumes a fund of 100,000
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Founder, PayMeMy.com
As seen on Channel 4s The Secret Millionaire.
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News
Olympic Media Buzz
IN ASSOCIATION with Repskan, the media
monitoring and analytics platform, City A.M.
is measuring the relative Olympic media buzz
around the partners for the London 2012
Olympic and Paralympic Games, week by
week. The leaderboard, right, reflects their
ranking over the past week, in this case from
Wednesday 12 October to Wednesday 19
October.
While it doesnt feature in
the top ten this week,
where Coca-Cola and
Samsung are tied for the
top spot, our data reveals
that Cadbury is one to watch. Coming in six
places shy of this weeks top ten, Cadbury is
running a lively national campaign called
Keep Our Team Pumped. You can visit the
website at www.keepourteampumped.com
and actually add your voice to an electronic
choir singing one of several inspirational
Olympic anthems to cheer on Team GB as
they train. An accompanying television
advertisement is increasing attention for the
campaign, and the pie chart below reveals
Twitter, blog and video mentions are very
high as a result.
Cadbury Olympic mentions by category
Blog
Industry/topicals
News
Twitter
Social Networks
Video
Other
Discussion
%
7.1%
3.3%
27.6%
2.4%
18.6%
12.4%
5.7%
22.9%
Source:
LONDON 2012 PARTNERS
TOP TEN PARTNERS BY MENTIONS
Brand
Coca-Cola
Samsung
BMW
Visa
UPS
BP
Adidas
Heineken
Lloyds
Omega
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PARTNERS in the upmarket estate
agent Knight Frank have landed a
73m payout after profits rose by 10
per cent in the last financial year,
buoyed by foreign investors flocking to
Londons luxury property market.
The firm, which advises on both res-
idential and commercial property
deals, saw pre-tax profits rise to
101.9m in the year to March its
highest level since the credit crisis
while turnover increased seven per
cent to 308.4m.
Equity rich buyers seeking proper-
ty in London helped boost the firms
residential arm, which has instructed
on deals including the sale of St Johns
Wood Barracks in northwest London.
The bonus pool is more than double
the amount awarded in 2009,
although it is now shared by more peo-
ple as Knight Frank has extended its
partnership.
Nick Thomlinson, senior partner
and chairman of Knight Frank, con-
ceded he remained cautious about the
outlook for the year ahead but said the
group had strengthened its balance
sheet and was focusing on growth in
key markets like Asia.
The firm also opened new offices in
Dubai, South Africa, Austria and
Switzerland.
Knight Frank partners
share 73m bonus pool
Knight Franks senior partner Nick Thomlinson saw increased turnover Picture: REX
BY KASMIRA JEFFORD
PROPERTY
NEWS | IN BRIEF
Panasonic to cut its output
Japanese electronics maker Panasonic
Corp will scale back domestic semicon-
ductor output by the end of March 2012
and cut about 1,000 jobs, reflecting its
recent move to reduce TV panel produc-
tion, the Nikkei business daily said yester-
day. All of the firms five domestic
chip-manufacturing facilities will cut out-
put. The firm is struggling to compete
with Asian rivals like Samsung.
Swiss unions want weaker franc
Swiss trade union and business groups
pressed the Swiss National Bank (SNB)
to weaken the franc further to support
struggling exporters, the head of Swiss
industry lobby group Swissmem said yes-
terday. Representatives from Swiss trade
union Unia and Swissmem held a meet-
ing at the Swiss National Bank last week.
The SNB recently set a lower limit of
1.20 francs to the euro.
SIR James Crosby has been named as
chairman of sub-prime car finance
business MoneyBarn, in his first
financial appointment since resign-
ing as deputy chairman of the
Financial Services Authority (FSA).
MoneyBarn, whose backers
include Octopus Investments and
merchant bank Quayle Munro,
rebranded from Duncton in August.
The online company provides
finance for consumers and business-
es with bad credit ratings, offering
financing of up to 25,000 per car
on a representative annualised per-
centage rate of 30.2 per cent.
Sir James, who oversaw the merger
of Bank of Scotland and Halifax in
2001, left the FSA under a cloud in
February 2009, following allegations
that while he was chief executive of
the newly formed HBOS he sacked
whistleblower Paul Moore.
At the time, Sir James said there
was no substance in the allegations
made by Moore, a senior manager,
that HBOS was exposed to too much
risk. An investigation on behalf of the
HBOS board concluded Moores
claims had no merit.
Since leaving the City watchdog,
Sir James has been appointed as
chairman of software company Misys
and as a non-executive director of
leisure group Compass. Sir James was
unavailable for comment.
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Sub-prime motor group
snaps up ex-FSA deputy
BY HARRIET DENNYS
RECRUITMENT
News
MORE NEWS
ONLINE
@
www.cityam.com
Sir James Crosby, former FSA deputy chair and ex-chief executive of HBOS
A TOTAL of 3,515 construction firms
have gone bust in the past year as the
downturn takes its toll, according to
new research.
The sector has been hit by the gov-
ernment spending squeeze, which
has led to the shelving of several pub-
lic works projects.
The Highways Agency the largest
customer to the construction sector
is due to cut its spending by 44 per
cent during the next three years
from 1.6bn in the 12 months to
March 2011 to 922m by 2014.
Insolvencies were 18.4 per cent
down in the year to the end of June
from the 4,305 reported two years
ago. But accountant Wilkins
Kennedy, which carried out the
research, said that construction com-
panies were still under intense pres-
sure. It was one of the sectors hardest
hit since the recession, registering a
total of 11,862 business failures since
the beginning of 2009.
Nick Parrett, partner in charge of
property and construction at the
company said: Construction orders
in the second quarter are at their low-
est level since 1980.
But the good news for the sector is
that both office rents and house
prices have been clawing their way
back. We are also seeing a modest
recovery of some public sector activi-
ty. we are beginning to see a number
schools starting to commission.
Construction
firms close in
bleak climate
BY JOHN DUNNE
CONSTRUCTION
News
19
Construction firms are feeling the squeeze during the downturn Picture: REUTERS
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RYANAIR is preparing for take off
with ambitious growth plans, includ-
ing almost doubling its passenger
numbers over the next decade.
Colourful chief executive Michael
OLeary says he is ready to buy up to
300 new aircraft in a bid to fly as
many as 130m passengers a year, up
from the current 70m, according to
the Financial Times.
The Irish carrier is understood to be
in talks with manufacturers from
China and Russia over the potential
orders, which would be due for deliv-
ery in the next few years.
The ambitious plans would make
Ryanair, the airline famous for its no
frills approach, one of the biggest car-
riers in Europe.
Earlier this month OLeary proposed
cutting costs on his airline by remov-
ing some of the toilets and replacing
them with extra seats, causing an out-
cry and a flood of publicity.
He has also been involved in a bit-
ter spat with fellow Irish carrier Aer
Lingus, in which Ryanair has a 29 per
cent stake.
OLeary is furious Aer Lingus has
decided not to pay a dividend,
prompting the rival airline to say
Ryanair should not maintain its stake
in the long run.
Ryanair has twice had attempts to
take over Aer Lingus rebuffed on com-
petition grounds and chairman Colin
Barrington said Ryanair should sell
its stake, which is valued at around
113m (98.4m).
Ryanair has said it would consider
selling its stake if the government
sells its 25 percent shareholding.
Ryanair lays
out ambitious
growth plans
THE Co-operative Bank has urged the
coalition to speed up its review of
green energy incentives as new fig-
ures show it has lent more than
500m to fund renewable power proj-
ects since 2007.
The bank has warned that progress
to catch up with the low carbon sec-
tor in continental Europe could be
lost if action is not taken soon.
There is real danger that these
gains could fall away should the
review of incentive schemes for large
(renewable obligation certificates)
and small (feed in tariffs) green ener-
gy generation not be completed
quickly and with a view to maintain-
ing momentum.
The bank said its specialist renew-
ables tem has funded 108 schemes as
part of an attempt to double its lend-
ing to the sector to 1bn by 2013. The
loans have a capital value of up to
25m and are typically taken on by
small developers, community groups
and landowners, the Co-op said.
Richard Wilcox, head of social
banking at the Co-op Bank, said:
Despite all the economic turmoil
and retrenchment by many lenders,
our historically prudent approach
meant we were able to maintain this
support (for the renewable energy sec-
tor).
INDUSTRY group the British Bankers
Association has warned that the new
system of financial regulation may
need to be bolstered once the
Financial Services Authority is
scrapped.
The BBA said money transmission
and credit must continue without a
hiccough in the event that banks so-
called living wills a blueprint of
how they could be broken up if they
run into trouble have to be enacted.
A spokesman said: We need to
have a regulator which has the
strength and depth to oversee this
and while the FSA has recently need-
ed to recruit we trust the system will
settle down as regulation completes
its move to the Bank of England.
The Bank and a series of new
authorities are set to take on regula-
tory powers when the FSA is disband-
ed in 2013.
Co-op Bank in
clean energy
funding plea
Regulator may need to
be beefed up, warns BBA
The Bank of England will have greater powers from 2013 Picture: REX
BY HARRY BANKS
AVIATION
BANKING
Ryanair flew 72m passengers last year, mak-

ing it one of Europes largest carriers.
It has been involved in a bitter dispute with
Aer Lingus, in which it holds a 29 per cent
stake, over its dividend and pension deficit
FAST FACTS | RYANAIR
News
CITYA.M. 24 OCTOBER 2011
BY PETER EDWARDS
BANKING
21
THE UK is missing out on billions of
pounds each year by ignoring the
huge productivity growth potential of
mid-sized companies, a leading busi-
ness lobby group will say today.
UK efforts to foster bigger small and
medium-sized enterprises (SMEs)
those with turnovers of 10m to
100m have lagged behind countries
such as the US and Germany, which
have deployed tax incentives and fund-
ing to create a bedrock of growth
firms that have transformed their
economies.
In the UK these firms are a forgot-
ten army crying out for a better sup-
ply of growth capital, greater
incentives and more support to make
the leap from small businesses to large
employers, the Confederation of
British Industry (CBI) argues in a new
report with McKinsey.
Accelerating growth in these key
dynamos of growth could add 50bn
to the economy or 0.2 per cent to GDP
every year by 2020 at a time when the
government is searching for ways to
kick-start the private sector, CBI direc-
tor-general John Cridland said.
Cridland said the UK should aim to
develop both the high-growth
gazelle companies cultivated in
Silicon Valley in the US, and the
steady, solid exporters of Germanys
Mittelstand. If more UK companies
grew in both these ways, the impact
on the economy would be truly phe-
nomenal, he said.
But he warned that banks, capital
markets and investors needed to be
freed up to provide bigger tranches of
funding to firms such as fuel cell
maker Ceres Power, which has needed
more than 25m since its launch.
These companies have had few
non-bank options in the UK in recent
years, Cridland said. We need to look
at the various points in the growth
cycle of these businesses where they
need extra capital.
Growth businesses make up less
than one per cent of UK companies
but employ 16 per cent of the work-
force and supply more than a fifth of
economic revenue.
They grow at about five per cent a
year, but should aim for more like 6.8
per cent, while their job creation
could also be far higher, the CBI said.
To tackle the pressure points hold-
ing them back, the CBI says chief exec-
utives need to be given the support
and capabilities to aim higher.
INFLATION-linked hikes in business
rates will offset any gains from gov-
ernment plans to encourage local
businesses, the British Retail
Consortium (BRC) has said today.
Business rates are set to increase by
a colossal 5.6 per cent in April, the
BRC has warned, as it is tied to
Septembers level of the retail price
index (RPI).
Coming on top of a 4.6 per cent
rise this year, such an uplift would
make it even harder for retailers to
thrive at a time of low consumer con-
fidence and poor spending, said Tom
Ironside, the BRCs director of busi-
ness.
Last month inflation spiked, large-
ly due to higher energy costs. The con-
sumer price index (CPI) soared to 5.2
per cent, while the RPI touched its 20-
year high of 5.6 per cent.
The BRC has welcomed govern-
ment reforms that will allow local
authorities to keep a share of tax
income, thereby incentivising coun-
cils to encourage business growth.
The review of local government
resources looks at proactive ways of
supporting and promoting business
growth for the benefit of local com-
munities, Ironside said. We ask that
the government supports businesses
and local authorities in the same way
by imposing a lower increase in busi-
ness rates for the coming year.
Inflation-linked taxes worry retailers
BRITISH steel producers are cutting
back production due to falling busi-
ness morale across Europe, it was
revealed this morning.
Companies are running down
stock levels over fears of tumbling
demand in key markets.
Steel production sank 7.3 per cent
in the three months to September,
compared to in the second quarter, a
report from UK Steel revealed.
The summer holiday period is
always relatively quiet but there is
usually a distinct rebound, com-
mented Ian Rodgers of UK Steel, a
subsidiary of the EEF manufacturers
association.
What is disturbing about these
figures is that September output
improved only slightly from August.
Production equalled 179,300
tonnes per week in the third quarter
of the year, compared to 193,400
tonnes per week in the previous sec-
ond quarter.
Steel output remains 34 per cent
below its pre-recession level, meas-
ured in the third quarter of 2008, the
report said.
It is now essential that govern-
ment implements a compensation
package for energy intensive sectors
such as steel, Rodgers added. This
will help companies maintain their
competitiveness and control their
cost base through this uncertain
phase in demand.
Economic
turmoil hits
steel makers
MANUFACTURING
UKs mid-size
firms can add
50bn to GDP
BY ALISON LOCK
ECONOMY
BY JULIAN HARRIS
TAXATION
News
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WickedTheMusical.co.uk
Well-run companies profit even in hard times
Y
OU could be forgiven for not
noticing, but it is earnings sea-
son again. Once you finish
trawling through the endless
speculation about the next phase of
Eurozone debt crisis in the papers and
on TV, youll eventually find some
good old-fashioned company news
reporting.
Let me summarise. Well-run com-
panies with good products are hold-
ing up well. Badly-run companies that
sell stuff people dont want all that
much are doing badly. Its ground-
breaking stuff. And so to some ran-
dom examples.
WHITBREAD DOES WELL
Whitbread is heavily exposed to the
struggling UK consumer with its
pubs, restaurants, hotels and coffee
shops, but still reported a pick up in
sales.
Its Premier Inn hotel chain is both
appropriate to austere times and capi-
talising on its formula by grabbing
market share from independent
hotels. Its growing fast too, with plans
to add 50 per cent more rooms in the
next five years.
COSTA SEES BUZZ FROM COFFEE
And while Whitbreads Beefeater and
Brewers Fayre pub restaurant busi-
nesses are down, the Costa coffee shop
unit is growing fast thanks to a well-
executed and expanding format.
Also grappling with the woes of the
UK consumer is Home Retail. The
owner of Argos and Homebase report-
ed a 70 per cent drop in first-half prof-
its. Selling generic stuff at a tiny
margin to low-income families in a
UK ravaged by unemployment and
inflation is not a good thing in this
instance, apparently. Stock is down 17
per cent. Again, groundbreaking stuff
(not).
ERICSSON BEATS PROFIT FORECASTS
Its not just the UK consumer-facing
companies were talking about.
Ericsson is the worlds biggest maker
of mobile network equipment. It beat
profit forecasts.
Even in lean times, the number of
mobiles and smartphones in the
world is increasing. Ericsson still cau-
tioned on the outlook for global
growth, but looks in good shape ver-
sus its rivals and so investors drove
the stock higher.
NOKIA FOCUSES ON BASIC PHONES
Nokia reported last week, too. The
company was struggling, but it has
made valiant efforts since chief exec-
utive Stephen Elops infamous burn-
ing platform memo and its push
into basic phones in key growth mar-
kets like India is paying off. Stock is
up. Obviously, it is not doing as well
as Apple who is? but it is undoubt-
edly a firm that is on the up once
again.
Conversely, Philips continues to
swim against the tide. Earnings prac-
tically halved, as expected, again. The
last bastion of European consumer
electronics makers announced anoth-
er 4,500 job cuts in the face if Asian
dominance in the sector.
So, while Eurozone leaders wring
their hands about what to do next,
companies are still going about their
day-to-day business with varying
degrees of success.
REMEMBER SIMPLE ECONOMICS
No-one gets off scot free from this cur-
rent economic turbulence, but my
worry is that were being excessively
distracted by the macro stuff and for-
getting what makes economies func-
tion people going to work, making
stuff at a decent cost and selling it at
a profit. The key is to keep an eye on
the businesses that do this well, even
when times are tough and ignore
those who use tough times as an
excuse to do badly.
Beccy Meehan is an anchor at CNBC.
CNBC COMMENT
REBECCA MEEHAN
AS THE COST of rental accommoda-
tion creeps upwards, a survey
released this morning reveals that
over half the UKs renters would like
to buy their own home but can not
afford to make the jump.
Trapped renters amount to 55
per cent of the rental market, the
Rightmove study shows. Over a quar-
ter (27 per cent) of these frustrated
tenants are over the age of 40.
And nearly four in 10 renters (39
per cent) expect to still be renting in
three years time. A year go, under a
third (32 per cent) of renters were this
downbeat.
The chances of affording a first step
onto the property ladder are falling,
as weak supply and high demand
boost the cost of renting. Search activ-
ity for rental accommodation is up
more than 50 percentage points on a
year ago, according to Rightmove.
First step onto property
ladder eludes UK renters
Many renters would rather buy their own homes but can not afford to Picture: REX
BY JULIAN HARRIS
HOUSING
@
@
www.cityam.com
MORE NEWS
ONLINE
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THE SQUEEZE on Britons finances is
showing no sign of relaxing, accord-
ing to a downbeat report by Markit,
released this morning, thanks to job
losses and soaring prices.
The outlook for household
finances plummeted to its lowest
level for six months, Markits index
has shown.
The measure of peoples expecta-
tions for their finances over the next
12 months collapsed in October, com-
ing in at 34.5, down from 42.2 in
August.
All scores below 50 indicate a wors-
ening in the situation.
Over half the respondents to the
survey (54 per cent) expect their
finances to deteriorate. Just over a
fifth (22 per cent) forecast an improve-
ment in their finances.
Weak labour market conditions,
combined with elevated inflationary
pressures, have made rising debt and
falling willingness-to-spend recurring
themes this year, commented Tim
Moore, senior economist at Markit.
Price pressures continue to be a
major worry for Brits, despite reassur-
ances from the Bank of England that
inflation will ease in 2012.
Around 88 per cent of households
anticipate a rise in their cost of living
next year, Moore reported, While
only 31 per cent of respondents fore-
cast increased income over this peri-
od.
The politicians mantra that were
all in it together was partly vindicat-
ed by the poll, which showed deterio-
rating finances across every single
income group and region.
However, there was some variation.
The prospects for mortgage-holders
are the worst in the surveys history,
with 59 per cent anticipate deteriorat-
ing household finances. Only 20 per
cent forecast an improvement.
Public sector workers, too, are par-
ticularly downbeat. Sixty-three per
cent expect their finances to get
worse. Just 17 per cent predict
improvements.
Households
struggling as
prices rocket
GROWTH prospects for 2011 have been
slashed, but Lloyds Bank Corporate
Markets is forecasting a rebound into
2012 in its latest quarterly bulletin.
Global GDP will have increased by
3.8 per cent in 2011, the banks quar-
terly report predicts, down from earli-
er forecasts of 4.1 per cent.
The G10 countries lead the slow-
down, revised from 1.9 per cent to 1.4
per cent. US expectations fell fastest,
from 2.2 to 1.7 per cent.
Next year, the global economy
should bounce back slightly, with
forecast growth of 4.1 per cent.
China will continue to perform
solidly, growing at above eight per
cent, the study said, whilst Brazilian
growth will expand from 3.9 per cent
in 2011 to 4.3 per cent in 2012.
The Eurozone, however, risks reces-
sion as policymakers fail to find
swift solutions to contain market
stress and restore confidence, or else
the risk of a recession grows rapidly.
Germany is the only major econo-
my with a positive outlook.
Citis latest reports are downbeat
on the UKs outlook, too.
Our forecast implies the UK econo-
my will even underperform the 1930s
recession/recovery cycle, said analyst
Michael Saunders, who expects total
QE purchases to reach 500bn.
Global recovery
is set to bypass
Europe in 2012
Most households expect their finances to deteriorate Picture: GETTY
BY TIM WALLACE
UK ECONOMY
WORLD ECONOMY
News
BUMI, the Indonesian coal mining
firm created by Nat Rothschild, is
understood to be close to finalising a
deal to refinance the first part of the
$1.9bn debt owed by one of its sub-
sidiaries to the Chinese sovereign
wealth fund.
It was reported yesterday that the
FTSE 100 firm, which owns a 29.2 per
cent stake in thermal coal producer PT
Bumi, may be considering approach-
ing the CIC about reducing some it its
subsidiarys debt in return for control
of a series of exploration assets.
Sources close to the situation, how-
ever, have refuted this, saying that it is
more likely that the loan will be
swapped for cheaper facilities that will
allow the company to repay its debt
two years earlier than scheduled.
The deal, which is still being negoti-
ated, would cut the interest charge on
the first tranche from the current 19
per cent to around 10 per cent a year.
Rothschild came under fire last
week after Bumi abandoned its pro-
posed $2bn (1.73bn) acquisition of
another subsidiary, Bumi Resources
Minerals , which was aimed to simplify
the groups complex structure.
The announcement came just
weeks after the groups majority share-
holder, the Indonesia Bakrie family,
said it had received a margin call on a
$1.34bn loan against Bumis assets.
Sign up at cityam.com
BY KASMIRA JEFFORD
MINING
THE president and co-manager of

Fairholme Capital Management has
resigned, as the $8.9bn (5.6bn) mutu-
al fund firm continues to suffer from
bets on financial stocks and a real-
estate development company.
Charles Fernandez, who was also a
director, stepped down on 17 October
for what Fairholme chief Bruce
Berkowitz said were personal rea-
sons.
Fred Fraenkel, the former head of
research for Lehman Brothers, will
become Fairholmes chief research
officer, and Dan Schmerin, a former
Treasury Department official who
oversaw its Public-Private Investment
Programme, will become director of
special situations.
The companys flagship Fairholme
Fund lost 26 per cent of its net asset
value this year through to 21 October.
Fairholme president resigns as
weak performance buffets firm
FINANCIAL SERVICES
UBS will cut its return on equity tar-

get by five percentage points to 10-15
per cent at an investor day next
month when the Swiss bank is
expected to announce shrinking its
investment bank, a newspaper report-
ed yesterday.
The SonntagZeitung said the new
target would be announced by Sergio
Ermotti who took over as interim
chief executive last month after
Oswald Gruebel stepped down over
the $2.3bn unauthorised trading
scandal.
UBS declined to comment on the
article, according to Reuters.
Two years ago, Gruebel set a medi-
um-term return-on-equity target of
15-20 per cent along with other ambi-
tious forecasts which he had already
been forced to abandon in recent
months as the UBS investment bank
failed to deliver.
Citing an unnamed manager famil-
iar with Ermottis plan, the newspa-
per said Ermotti would not set an
absolute profit target but would
announce cuts to the investment
bank, which should in future be ori-
ented to serving the wealth manage-
ment business.
However, the newspaper said UBS
wanted to maintain its leading posi-
tion in some investment banking
businesses, including global foreign
exchange and equities trading.
UBS set to cut its return on
equity target, says report
BY HARRY BANKS
BANKING
News
Bumi, created by Nat Rothschild, may be close to refinancing PT Bumis debt Picture: REX
Bumi close to
refinancing
CIC debt deal
ANALYSIS l Bumi PLC
p
17Oct 19Oct 20Oct 21 Oct 18Oct
770
740
750
760
710
720
730
740.00
21 Oct
News
Hamilton Lane
The private equity investment and advi-
sory firm has appointed managing direc-
tor Andrea Kramer to the board of the
Private Equity Women Investor
Network. Kramer also becomes the
bodys finance chair for 2011 to 2012.
Russell Investments
The business advisory firm has appoint-
ed Carole Crossley as a director to lead
its growth and markets team in the
global employer services group, part of
the firms tax practice. Crossley previ-
ously held senior HR leadership roles at
BP and Lloyds Banking Group.
Cushman & Wakefield
The property consultant has appoint-
ed real estate finance specialist
Michael Lindsay as a partner and
head of its EMEA corporate finance
team. Lindsay previously held roles
including partner and UK head of
corporate finance at KPMG and
director in Citigroups real estate
investment banking team.
Aviva
Gay Huey Evans has been appointed as
an independent non-executive director
and a member of the corporate responsi-
bility committee, effective from 20
October. Evans is currently vice-chair-
man and non-executive director of the
International Swaps and Derivatives
Association, and a non-executive director
of the London Stock Exchange Group.
She was formerly vice chairman of
investment banking and investment
management at Barclays Capital.
Coutts
The private bank has appointed
Michael Bulloch as head of regulatory
affairs and compliance. Bulloch joins
Coutts from HSBC Private Bank,
where he was most recently global
head of compliance.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
Little Chef
The roadside chain has appointed Graham Sims as
its new chairman. Sims is currently chief executive
of Qunatilis, a non-executive board member at the
UK Border Agency, and chairman of Kensington
Consultancy Group. Earlier in his career, he spent
seven years at BP, rising from operations manager
for Portugal to UK retail managing director, fol-
lowed by three years at leisure group Compass as
managing director of its UK & Ireland business.
+44 (0)20 7557 7245
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
WALL STREET WEEK AHEAD
Chinese manufacturing data starts a busy week
T
HIS is set to be a busy week as
market participants get to grips
with a pile of economic data, US
corporate earnings and the sec-
ond act of the EU summit this
Wednesday.
CHINA MANUFACTURING PMI
The first thing to confront traders
this morning will be Chinas HSBC
Flash Manufacturing PMI. This can be
a big market-mover as it gives an early
clue to Chinas manufacturing per-
formance.
The PMI has indicated contraction
for three consecutive months and
another reading below 50 will raise
concerns about the rate of Chinas
slowdown.
US HOUSING MARKET DATA DUE
Later this week we have more data
covering the US housing market plus
the first look at US third quarter GDP.
GFT quotes two-way prices on stock
indices around the clock, even when
the underlying markets are closed.
The FTSE 100 index is called to open
up 12 points at 5500. The German
DAX is expected to open up 14 points
at 5995 and the French CAC 40 is fore-
cast to open up 10 points at 3181.
DELAYED EU SUMMIT BEGINS
On Wednesday the second part of the
delayed and extended EU summit
takes place. Investors are hoping that
European policymakers will come up
with a package that addresses a
bailout fund for banks, haircuts on
Greek sovereign debt and a constitu-
tionally acceptable method of leverag-
ing the European Financial Stability
Facility.
On top of this, the US third quarter
earnings season moves up a gear with
around 1,000 corporations expected to
announce their results this week.
Big names include Amazon, BP,
Boeing, Broadcom, Caterpillar, Coca-
Cola, ConocoPhillips, Exxon Mobil,
Ford, Merck, Royal Dutch Shell and
Texas Instruments.
Martin Slaney is director of global prod-
uct management at GFT
MARTIN ON
THE MARKETS
P
ROSPECTS for corporate earn-
ings are dimmer in the coming
quarters even though reports
so far this quarter have been rel-
atively bright.
Third-quarter reports among the
big names have been reasonably solid,
with Google, McDonald's and others
reporting strong results. But, unless
theres a turnaround in the outlook
for the US economy, the next few
quarters may be less rosy.
Currently, the market is focused on
Europe. Hope for a series of summits
designed to find a way to solve the
growing Eurozone debt crisis buoyed
the Standard & Poors 500 index to a
1.1 per cent gain for the week and put
the index at the top of a recent range
it has struggled to break through.
With so much focus on Europe,
earnings even with most companies
beating expectations have been
given less of the spotlight. At the
same time, S&P 500 earnings fore-
casts for the fourth and first quarters
have come down since the start of
October, especially in the materials,
energy and financial sectors, accord-
ing to Thomson Reuters data.
Much of whats driving worries
about earnings is related to expecta-
tions for less demand from Europe
and other parts of the world, includ-
ing China, where indicators show
growth is slowing.
The sovereign debt crisis in Europe
has plagued markets for months, and
the US economy has been a worry,
too, with the nations high unemploy-
ment rate among the chief problems.
Much of third-quarter profit strength
stems from international revenue
growth, according to a report.
MARTIN SLANEY
25Jul 12Aug 2Sep 12Oct 22Sep
6,000
5,200
5,600
ANALYSIS l FTSE
5,488.65
21 Oct
25Jul 12Aug 1 Sep 11 Oct 21 Sep
7,500
5,500
6,500
ANALYSIS l DAX
5970.96
21 Oct
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l BG Group PLC
1,500
1,400
1,300
1,200
1,100
Aug Sep Oct
p
1,354.50
21 Oct
BG GROUP
Nomura rates the integrated natural gas company as a buy with a target
price of 1750p, ahead of third quarter results on 25 October that could bring
downward market revisions on production guidance and earnings per share
for 2012. The broker says it is more positive on Brazil after the appointment
of Fabio Barbosa as finance chief, and sees notable potential in the companys
exploration projects in both Norway and China.
MECOM
JP Morgan rates the pan-European newspaper publisher as overweight and
reduces its target price from 338p to 311p after the company released its
three-month trading statement to 30 September. The broker expects current
consensus 2011/12 earning per share estimates of 0.48/0.52 to decrease
to 0.44/0.47 respectively, but says the market is missing Mecoms strong
cash flow generation.
MOBISTAR
Citi rates the Belgian telecoms group as a sell with a target price of 37.10,
and lowers its expectations for 2012 and 2013 earning by two to three per
cent to reflect increased competition in the Belgian mobile and TV markets.
The broker sees easier comparisons for the fourth quarter and forecasts a 35
per cent margin on service revenues. Citi says Mobistar has scope to remain
resilient despite an uncertain macro outlook for Belgium over the next year.
ANALYSIS l Mecom Group PLC
225
200
175
150
125
Aug Sep Oct
p
150.75
21 Oct
ANALYSIS l Mobistar SA
50
48
46
44
42
Aug Sep Oct
41.19
21 Oct
W
HATS your image of a socially respon-
sible company? One that pledges not
to pollute unnecessarily and donates a
percentage of its profits to supporting
vulnerable communities or habitats maybe?
Better still, one that encourages its staff to volun-
teer their time to achieving this? Certainly one
whose aims go beyond making a profit and are
clear for all to see.
Welcome to the world of corporate social
responsibility, or CSR. Born in an age of disillu-
sion as to the proper purpose and conduct of
business in the midst of the economic turmoil
of the early 1990s, CSR is making a comeback
now as another period of financial confusion
besets ruling elites the world over with the limi-
tations of their system and an even deeper crisis
of confidence. But this time it is coming back
with a vengeance.
One need not be a capitalist die-hard,
announcing that the business of business is
business, or suggesting that anything other
than enhancing shareholder value is an aberra-
tion, to note a few problems and inconsistencies
with CSR. On paper, of course, who could possi-
bly oppose companies that think beyond the bot-
tom-line and who put people and the planet
before their profits or at the very least on a
more balanced footing?
But that would be to confuse the rhetoric
about CSR with its content. Indeed, many of its
original corporate supporters are no longer
around today, suggesting they were better at
talking the CSR talk than walking the CSR walk.
SELF PRESERVATION SOCIETY
Right from its earliest inception the advocates of
CSR were more interested in saving themselves
than saving anything else. One of its proponents
noted that a key area to examine was the
notion of business as the most important agent
of social change, in an age when governments
are redefining and limiting their own sphere of
influence.
In other words, as state leaders the world over
became confused in the immediate aftermath
of the Cold War as to their purpose and direc-
tion, so some, encouraged no doubt by a few dis-
illusioned CEOs, sought to invest business with
the role of social leadership instead.
But by arguing that there had to be a purpose
to business beyond simply making a profit, the
prophets of CSR slyly assumed that which had to
be achieved in the first place realising suffi-
cient surplus to ensure their companies own
employees were adequately rewarded in the first
place.
What is notable about many CSR schemes is
how much they focus their benefits elsewhere
typically on people without a voice (ideally in
Africa) or better still the dumb (animals), or the
inert (the environment). Staff who, collectively,
consciously and loudly fought for better wages
were ignored. So British Airways could be com-
mended for its social and environmental reports
whilst facing down its workers in a series of
strikes.
That way, businesses could patronise impover-
ished communities, eco-activists and their
media groupies with token sums and gestures
rarely held to account or scrutiny and at the
same time encourage their staff to subsidise
these schemes by volunteering their own time.
That way, the real role and responsibility of gov-
ernment in achieving effective change was
simultaneously overlooked.
CSR today is not significantly different,
although it has added one ominously new ele-
ment to its arsenal. Inspired by the supposed
insights of behavioural economics, evolutionary
psychology and neuroscience, its advocates want
businesses to nudge us all into shape by selling
us things that are held to be good for us, or
teaching customers how to recycle their goods.
Mathew Taylor, chairman of the Royal Society
for the Encouragement of the Arts,
Manufacturing and Commerce (RSA), whose
institution was behind the promotion of CSR in
the mid-1990s through its Tomorrows Company
Inquiry, is quite explicit about this. The state
has many competing objectives, he laments,
and when it uses its power to nudge it opens
itself up to charges of paternalism and social
engineering. He thus encourages businesses to
build on a relationship based on choice and con-
sent, and in some cases a good degree of trust.
Of course, in the process, the notion that
choice, consent and trust, are qualities we
should expect if not demand from govern-
ment, gets overlooked. What gives businesses
the legitimacy and authority to act on behalf of
the people is never clarified still less NGOs,
which Taylor proposes should act as the quasi-
regulators of business.
CSR has never been about doing good. It was,
from the very beginning, a mechanism that a
confused ruling class used to maintain its legiti-
macy and control in a disillusioned age. Today,
combined with the fashionable, but sinister,
new orthodoxy of nudge, it is more backward
still. If we want to do good for other people, the
planet, or whatever else we choose, it is high
time we refocused our attention on getting the
right government to do this, rather than expect-
ing businesses to act as its prefect.
Dr Bill Durodi is associate fellow in the internation-
al security programme at Chatham House. He is speak-
ing at the debate Profiting responsibly? Business in the
Big Society at the Battle of Ideas festival at the Royal
College of Art on Saturday 29 October, sponsored by City
A.M. www.battleofideas.org.uk.
26
The Forum
Why so-called corporate
social responsibility is not
the answer to our problems
cityam.com/forum
BILL DURODIE
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
27
Under new EU
regulation, the
raising of capital
may be harder
An insiders take
on what Mifid 2
means to the UK
A
T A TIME when growth in the UK econo-
my is stalling, any proposal that aims to
make it easier for businesses to raise
capital should be welcomed. I hope that
a single rulebook will improve the regulatory
framework for investors but there are many
elements of the Commissions new Market in
Financial Instruments Directive (Mifid 2) pro-
posals that could do the opposite.
I share the concerns expressed that the rules
on third countries may stop institutions from
emerging markets advertising their services in
the EU, which could disproportionately affect
London. Having had experience of this issue in
the context of the Alternative Investment Fund
Manager Directive (AIFMD), I am very con-
cerned that this will become a major problem
as negotiations get under way on Mifid 2.
The European Securities and Market
Authoritys (Esma) interpretation of the third
country proposals at the actual implementa-
tion stage of AIFMD will only add to fears of
European protectionism. The EU needs as
much investment from emerging markets as
possible, so building up walls to these valuable
flows of finance would be incredibly unwise.
Also, the new proposals on fixed income and
other asset classes could upend the structure
of the bond markets. We must not cause a loss
of liquidity at this of all times. There are legiti-
mate concerns about the growth in impor-
tance of dark pools, which have developed in
response to the fact that tough pre-trade trans-
parency rules are waived for large trades. They
serve a valuable purpose and if these waivers
are removed or altered, we should ensure that
this does not adversely affect market liquidity.
The proposals to regulate commodity deriva-
tives look like sledgehammers searching for a
nut to crack. There is no consensus on what
has caused the wild swings in the commodities
markets in recent years, and it is premature to
introduce regulation that will not tackle root
causes. Done badly, the regulation could make
commodities markets much less efficient.
A further issue that has been included is
high frequency trading (HFT). Investors are
rightly worried that technology is fast outpac-
ing regulation. Indeed some market players
believe that the 6 May US flash crash of last
year and the recent volatility in the markets
were in part a consequence of HFT. This is an
area that needs new regulation, but I am con-
cerned that the Commission has been heavy-
handed with these proposals. Data is still being
gathered and we should wait for the hard facts
so that we can legislate proportionately and
without causing unintended consequences.
Esma is being given too much power to
enforce the proposed new rules. As a conse-
quence, the regulator could become the police-
man of the rulebook rather than its
interpreter. We must ensure that it is not given
discretionary powers over individual firms.
Its vital that both the Council and the
European Parliament ensure negotiations
remain rooted in evidence and that the impli-
cations for the real economy are borne in
mind. These proposals put in danger much of
the progress made under the original Mifid.
Syed Kamall is MEP for London and a member of
the ECON committee.
Brain drain fears
I read Fridays article by Emma
Boon on the merger of income tax
and national insurance contribu-
tions (NIC) with interest, as a
Chartered Tax Adviser and mem-
ber of the Association of Taxation
Technicians.
I fear the global nature of social
security contributions and its
underlying contributory principle
(contributions made by an individ-
ual directly affect their entitle-
ment to state benefits) means
merging tax and NIC would dimin
ish the UKs international
competitiveness. Take, for exam-
ple, a US national not wishing to
forfeit Medicare entitlement.
Currently he or she will pay UK
income tax up to 50 per cent, US
FICA contributions but no UK NIC.
Merging income tax and NIC in
the UK unilaterally will result in
this individual paying UK income
tax up to 62 per cent and US FICA
contributions. Merging income tax
and NIC will result in decreased
net pay for foreign workers in the
UK and could lead to a brain drain
greater than that experienced
through the increase in income tax
to 50 per cent.
Name withheld
Speak your mind
Readers are invited to comment
on the web: cityam.com/forum;
by email: theforum@cityam.com;
and on Twitter: @cityamforum.
Top responses will be reprinted in
the newspaper.
RAPID RESPONSES
In association with
SYED KAMALL
BY STUART FRASER
The Forum
A
S THE geographic
and financial heart
of London,
protests have
been part of the Square
Miles history ever since
the settlement was first
founded.
So while demonstra-
tors pitching their tents outside St Pauls Cathedral
may make for an eyesore and pose considerable
logistical and environmental challenges it is impor-
tant these alternative views are respected as long as
they are expressed in a way that is peaceful and does
not cause unnecessary disruption.
The City will accommodate lawful protest but this
should not involve a long-term campsite, especially one
that forces a major place of worship to close and has a
significant economic impact on nearby businesses,
almost all of which are retail rather than financial.
We hope common sense will prevail and those
camping around the Cathedral will recognise that they
are damaging the integrity of their protest by their
actions and decide to disband in a peaceful manner.
Although there does not appear to be a single
coherent message behind these protests which
started in Wall Street, and spread to many other coun-
tries they do seem to reflect and draw upon a wide-
spread anger at the perceived inequalities created by
the financial crisis between the financial industry and
the ordinary citizen.
This disconnect between the UK financial services
industry and the rest of the economy is an issue that
has to be addressed. We need to work harder to
improve understanding of how the City benefits the
whole economy by providing the finance for innovation
and job-creation.
That is why this week we are launching a new
Angels in the City initiative in partnership with London
Business Angels, one of Europes leading Angel
Investment Networks. This scheme will recruit individ-
uals to invest as business angels in small businesses on
the Citys fringes, including the so-called Tech City
development supported by the government.
Several leading companies including Google,
Vodafone, Facebook, Intel and McKinsey have commit-
ted to invest in the long-term future of Tech City. This
is a positive sign but we also need to reach out and
channel investment to small and medium-sized enter-
prises (SME) that could one day become British digital
technology blue chips in their own right.
The City Corporation is working closely with London
Business Angels to put on a series of workshops
designed to attract individuals that could help facili-
tate such rapid growth by making their skills, experi-
ence and contacts available in addition to capital.
Business angel finance is often the most appropri-
ate source of funding for these early stage SMEs to
assist them to build their business and bring their
products to market. It is also an increasingly tax-effi-
cient investment vehicle for angel investors, with
income tax relief on investments now standing at 30
per cent.
Entrepreneurship and innovation will play a vital
role in driving the UK economy forward over the com-
ing years. Angels in the City will help unlock the fund-
ing pipeline needed to support these twin drivers of
economic growth. This is a model of how the City can
support other industries by working in partnership to
bring together investors and firms with high growth
potential. To register your interest please visit
www.cityoflondon.gov.uk/angelsinthecity.
Stuart Fraser is policy chairman at the City of
London Corporation.
Angels will help show
the Citys power to all
Email: theforum@cityam.com
Twitter: @cityamforum
T
HE week ahead could prove to
be the most crucial in the rela-
tively short history of the conti-
nents common currency. We
now know that banks will have to
raise capital but markets are still
hoping for news of just how much
money the better-funded elements of
the Eurozone are prepared to throw at
the crisis. It doesnt seem to address
the fundamental issues however, so
unless we see some bigger picture
proposals, the euro may be in for a
choppy spell. IG Index quotes euro-
dollar at $1.3775-$1.3776.
The fortunes of the partially state
owned Lloyds Banking Group have
failed to improve in recent weeks. Its
shares are sitting just a few pence
above year-to-date lows, with the
market still generally lacking in
enthusiasm for the stock and of
course all banking stocks are trading
at rock-bottom. However, with the
likes of Germany and France poised to
throw in a significant tranche of
funds to bolster the EFSF, even
lenders such as Lloyds that wont
directly be affected will be hoping
this might mark a turning point. IG
Index quotes 32.6p-32.7p.
The FTSE 100 behaved as we
thought it might for the past week:
finding support from the former
resistance of the top of the trend
channel it was in for months, around
5,360-5,400. There is reason for now
to change that strategy: buy around
these levels with a stop loss around
5,320, with a target of 5,550-5,600.
Spreadco quotes the UKs index of
100 of the most highly capitalised UK
companies at 5,489.4-5,490.2.
Philip Salter
Oil prices
in a fierce
tug of war
C
RUDE prices fell last week on
the assumption that the
demise of Muammar Gaddafi
would have the magical effect
of freeing up oil supplies. Gaddafis
welcome demise is hopefully a sign
that Libya will eventually rejoin the
supply-side fold, but this return will
not happen tomorrow. In the longer
term, oil prices are being pulled in
two directions at once. On one hand,
recent worrying reserve inventory
figures coupled with attacks on
Yemeni pipelines and the slow pace
at which Libyan oil supply could get
back online points to a restriction of
supply, forcing up prices. However,
deteriorating world economic condi-
tions are pulling prices in the other
direction. A recurring bearish theme
in all things macro, dominated by
unresolved Eurozone debt worries
and an impecunious US govern-
ment, points to a continuing down-
ward pressure on oil demand.
Which side is the most likely to win
this tug of war?
DEMAND SIDE: MACRO WORRIES
Oil prices and commodities in gener-
al have become increasingly corre-
lated with the fortunes of the S&P
500 (see the left-hand graph, below).
Barclays Capital announced last
week that oil prices continue to
trace macroeconomic sentiment
and ignore fundamentals entirely.
Despite some strong US Department
Traders need to watch demand
and supply, writes Craig Drake
One slip, and things
will change fast
Picture: GETTY
THE WEEK AHEAD in association with
COMPANY NEWS
l Tomorrow, BG and BP announce third-
quarter results. The tide might just be
turning for BP its run of bad news is dis-
sipating somewhat on the news of new
North Sea investments. Royal Dutch Shell
announces on Thursday.
l Reckitt Benckiser announces tomor-
row. The worlds largest producer of
household products, which is headquar-
tered in Slough, will be hoping results
show it is still cleaning up.
l On Wednesday, Arm Holdings
announces third-quarter results. The suc-
cessful Cambridge based semiconductor
company has good reason to be chipper.
Autonomy also announces on Thursday.
Both are a product of the Cambridge Fen
cluster phenomenon.
l GlaxoSmithKline announces on
Wednesday, AstraZeneca on Thursday
and Shire on Friday. All three pharmaceu-
tical companies will be hoping results
point to healthy profits.
ECONOMIC NEWS
l Traders eyes will be on the central
banks of the Pacific Rim. Tomorrow, the
Bank of Canada will deliver its decision on
interest rates. The Reserve Bank of New
Zealand will do the same on Wednesday
and the Bank of Japan on Thursday.
l On Thursday, US third quarter GDP sta-
tistics will be released by the Bureau of
Economic Analysis. Hold onto your hats.
POLITICAL NEWS
l Today, parliament will vote on whether
to hold a referendum on UK membership
of the EU. The leaderships of all three
political parties are against a renegotia-
tion and are prepared to quash rebellions
with a three-line whip if needed. One rea-
son some MPs want out is because they
dont want to be tied to Europes econom-
ic crisis. On Wednesday, prime ministers
and presidents will have to produce a con-
vincing solution, if Europes assets arent
to be ravaged by the markets.
28
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THE TIPSTER
UNCOMMON
EURO CRISIS
CONDITIONS
of Energy data, the oil market has
remained focused on the European
debt crisis, and any fundamental
data was lost in background noise.
Ongoing European and US difficul-
ties in dealing with their debt woes
are likely to continue weighing on
demand in the future.
The economy has been in the dol-
drums since the crash in 2008, at
which point US oil consumption
shrank by 5 per cent or about 1m
barrels per day (bpd). At this point,
the oil cartel Opec intervened to
slash supplies in an attempt to sup-
port oil prices.
DIFFERENT VIEWS ON WHETHER THE
OIL PRICES ARE
GOING TO SHINE
LIOR ALKALAY
SENIOR RESEARCH ANALYST, ETORO
May Jun Jul Aug Sep Oct
ANALYSIS l US sentiment and commodity demand
Source: Bloomberg
Dollar spot index
S&P500
CRB index
-10
0
29
Prices rebounded, and were
driven ever higher by supply fears
during the north African upris-
ings in the spring of this year,
which affected a number of major
oil supplying nations. But the dou-
ble hit of European and American
political wrangling caused a shift
from supply fundamentals to
macroeconomic sentiment.
When the American political
class clashed over an agreement to
raise the debt ceiling this summer,
anybody who wasnt yet fully cog-
nisant woke up to the fact that the
US has its own economic mire to
deal with. Since then, neither
European nor US policymakers
have shown real willingness to
address their economic problems.
However, traders also need to
consider how much these woes
have filtered down to the con-
sumer. US consumer confidence
figures have fallen to -45, the low-
est figure since February 2009. But
it could be argued that this num-
ber reflects consumers sentiment
towards the direction of the econo-
my US car sales were up last
month and the September retail
sales report pointed to real con-
sumer spending growth of 2.5 per
cent. Barclays Capital economists
are confident that, combined with
US ISM figures rising in
September, there are encouraging
signs that the US mid-cycle slow-
down in the manufacturing sector
has largely run its course. They
have upgraded their third quarter
US GDP forecast to 2.5 per cent. As
the chart below right shows, oil
demand growth would stand to
benefit from this growth. But in
the long term, combined US and
European problems could really
start to bite, degrading this small
increase in demand.
SUPPLY SIDE: RUNNING ON EMPTY
On the other side of that tug of
war, supply still looks fragile. As
oil futures declined last week, they
did so despite signs that the sup-
ply side of the oil market could be
hit by disappearing inventory
cover and declining production.
International Energy Authority
(IEA) data show that a weak supply
side has driven both Opec and
non-Opec inventories to around
25m barrels below the 5-year aver-
age.
On the medium to long term, in
the event of a real EU implosion
causing worldwide contagion, it is
difficult not to see Opec pursuing
its 2008 policy of turning off the
tap restricting supply to try and
counteract slipping demand
pulling down prices.
Powerful forces are acting on
the oil price from both sides.
Equity sentiment volatility is a key
driver at the moment, but funda-
mental weaknesses in both
demand and supply risk coming
into play.
If demand falls, Opec is likely to
try to restrict supply to keep prices
buoyant, but if the economic situ-
ation starts to look sunnier, supply
problems may be a significant con-
straint. Anybody taking short-term
and intra-day positions should do
so cautiously. The combination of
macro and fundamental plays,
alongside the potential for sur-
prise supply manipulation by
Opec or by the IEA leaves traders at
risk of being hit by big price
swings.
Dec 1997 Dec 2000 Dec 2003 Dec 2006 Dec 2009 Dec 2012
ANALYSIS l US GDP and oil demand
US GDP y/y% - LHS
Basecase forecast
Basecase forecast
US oil demand
y/y mbd - RHS
-2
-4
-6
-8
8
6
4
2
0
-.05
-1.0
-1.5
2.0
2.0
1.5
1.0
0.5
0.0
OIL PRICE IS GOING UP OR DOWN CRAIG DRAKE IS UNSURE, LIOR ALKALAY IS BULLISH
ON THE CONTRARY
W
HILE some see uncertainty in
the future direction of oil, (see
feature, left) I take a bullish
view. The recent crude oil
review prepared by analysts at Morgan
Stanley points to a very slowly improv-
ing supply outlook. Their analysts are
forecasting a growth in supply by 1.1m
barrels per day, on average, in the years
between 2011 and 2016, and at 1 per
cent, thats below trend growth esti-
mates. That is the barest minimum need-
ed to sufficiently meet growing oil
demand and assumes a global economic
environment of low to modest growth.
In other words, there is barely enough
crude oil coming onstream even given
the current global economic situation.
That may also be an overestimate.
The increase of 1.1m barrels per day
that Morgan Stanley is forecasting pre-
sumes what its analysts call flawless
execution. That could be achievable in
a perfect world, perhaps, but in this
one? Even its analysts believe that there
is a razor-thin margin for error, and his-
torical evidence suggests that it will be
tested.
Supply disruptions and outages are
common, and could pose a major prob-
lem during periods of tightened spare
capacity. Consider the suppliers; several
of the oil-producing countries have
recently had production problems of
one sort or another. In Nigeria and
Yemen it was infrastructure-related,
while in Angola it was a technical glitch.
In Canada, it was a fire; in the US and
Australia, it was adverse weather that
resulted in plant closures. Libya is in the
news, but the list goes on and on.
Flawless execution? Not likely.
And while downbeat economic senti-
ment abounds, what if the current glob-
al economic situation was about to
explode? A reacceleration in oil demand
would place significant stresses on the
already challenged supplies.
But this is exactly where the global
economic situation is headed, if analysts
are reading their tea leaves right. The
US, the UK, Brazil and more than likely
China are all about to loosen their mon-
etary policy.
Although the effect of looser policies
around the world could take time to
drill down into underlying demand, it is
clear that this time, looser policy condi-
tions are here to stay. And not only that,
but skirting this near to a double-dip
scenario which is very close to materi-
alising, thanks to premature tightening
by policy makers practically ensures
that the next wave of tightening will be
slow and cautious. That, in turn, should
pave the way to a longer oil price rally.
How much of a rally? If we consider
effective money printing, interest rate
cuts and the thin thread of margin
capacity then it is possible that the
$100 per barrel threshold might be in
reach once again. Will we see the peaks
of 2008? That depends on producers
willingness to increase and invest in
more capacity; but oil prices are des-
tined to shine.
BAE Systems . . . . . .275.6 3.8 361.1 248.1
Chemring Group . . . .501.5 4.9 736.5 485.0
Cobham . . . . . . . . . . .179.3 1.1 245.6 168.5
Meggitt . . . . . . . . . . . .364.6 -0.2 397.6 304.9
QinetiQ Group . . . . . .116.4 2.1 136.3 96.7
RoIIs-Royce Group . .701.0 -1.0 709.5 557.5
Senior . . . . . . . . . . . . .157.5 4.2 190.6 131.1
UItra EIectronics . . .1593.0 -2.0 1895.0 1305.0
GKN . . . . . . . . . . . . . .184.1 2.7 245.0 157.0
BarcIays . . . . . . . . . . .182.0 10.0 333.6 138.9
HSBC HoIdings . . . . .518.0 5.3 730.9 473.6
LIoyds Banking Gr . . .32.9 1.2 71.9 27.6
RoyaI Bank of Sco . . .24.4 0.8 49.0 19.7
Standard Chartere .1402.5 32.5 1950.0 1169.5
AG Barr . . . . . . . . . .1210.0 10.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .340.0 12.0 503.5 289.9
Diageo . . . . . . . . . . .1331.5 11.5 1339.5 1112.0
SABMiIIer . . . . . . . . .2295.0 32.0 2340.0 1979.0
AZ EIectronic Mat . . .238.7 6.1 338.1 206.1
Croda Internation . .1842.0 34.0 2081.0 1367.0
EIementis . . . . . . . . . .133.6 2.5 187.4 104.8
Johnson Matthey . .1796.0 66.0 2119.0 1523.0
Victrex . . . . . . . . . . .1156.0 19.0 1590.0 1025.0
YuIe Catto & Co . . . . .163.0 0.0 253.0 148.0
LON GD ONCE FIX AM...........1623.00 -6.00
SILVER LDN FIX AM ..................31.11 0.77
MAPLE LEAF 1 OZ ....................33.65 0.72
LON PLATINUM AM................1491.00 1.00
LON PALLADIUM AM...............596.00 -1.00
ALUMINIUM CASH .................2171.00 0.00
COPPER CASH ......................7305.00 0.00
LEAD CASH...........................1889.50 0.00
NICKEL CASH......................18930.00 0.00
TIN CASH.............................21550.00 0.00
ZINC CASH ............................1831.50 0.00
BRENT SPOT INDEX................110.50 0.00
SOYA .....................................1225.00 0.00
COCOA..................................2562.00 -41.00
COFFEE...................................231.65 -4.50
KRUG.....................................1705.80 23.40
WHEAT ....................................147.88 0.88
AIR LIQUIDE........................................92.11 1.65 100.65 80.90
ALLIANZ..............................................78.56 2.96 108.85 56.16
ANHEUS-BUSCH INBEV ....................40.00 0.38 46.33 33.85
ARCELORMITTAL...............................13.68 0.65 28.55 10.47
AXA......................................................10.71 0.61 16.16 7.88
BANCO SANTANDER...........................6.03 0.17 9.37 5.05
BASF SE..............................................50.79 1.69 70.22 42.19
BAYER.................................................44.75 1.61 59.44 35.36
BBVA......................................................6.29 0.15 9.72 4.94
BMW ....................................................57.19 3.08 73.85 43.49
BNP PARIBAS.....................................31.78 1.86 59.93 22.72
CARREFOUR ......................................18.08 0.90 34.29 14.66
CRH PLC .............................................13.40 -0.04 17.40 10.28
DAIMLER.............................................36.72 1.74 59.09 30.52
DANONE..............................................47.70 1.04 53.16 41.92
DEU.BOERSE OFFRE ........................41.08 0.45 55.75 35.46
DEUTSCHE BANK..............................27.83 1.80 48.70 20.79
DEUTSCHE TELEKOM.........................9.26 0.06 11.38 7.88
E.ON.....................................................17.14 0.74 25.54 12.50
ENEL......................................................3.41 0.02 4.86 2.81
ENI .......................................................16.08 0.26 18.66 11.83
FRANCE TELECOM............................12.94 0.33 17.45 11.12
GDF SUEZ ...........................................21.50 0.60 30.05 18.32
GENERALI ASS...................................12.65 0.18 17.05 10.34
IBERDROLA..........................................5.23 0.17 6.50 4.29
INDITEX ...............................................68.50 1.58 69.34 50.92
ING GROEP CVA...................................6.29 0.11 9.50 4.21
INTESA SANPAOLO.............................1.28 0.08 2.53 0.85
KON.PHILIPS ELECTR.......................15.28 0.36 25.45 12.01
L'OREAL..............................................79.50 1.03 91.24 68.83
LVMH..................................................115.40 3.25 132.65 94.16
MUNICH RE.........................................97.80 3.10 126.00 77.80
NOKIA....................................................4.71 -0.02 8.49 3.33
REPSOL YPF.......................................21.68 0.28 24.90 17.31
RWE.....................................................30.40 1.65 55.88 21.22
SAINT-GOBAIN...................................33.31 1.19 47.64 26.07
SANOFI ................................................50.97 0.76 56.82 42.85
SAP......................................................42.33 0.76 46.15 32.88
SCHNEIDER ELECTRIC.....................42.16 0.94 61.83 35.94
SIEMENS .............................................74.01 2.10 99.39 62.13
SOCIETE GENERALE.........................18.97 1.01 52.70 14.32
TELECOM ITALIA..................................0.88 0.02 1.16 0.70
TELEFONICA ......................................15.23 0.57 19.69 12.50
TOTAL..................................................38.00 0.62 44.55 29.40
UNIBAIL-RODAMCO SE...................144.45 3.75 162.95 124.05
UNICREDIT............................................0.90 0.06 2.03 0.64
UNILEVER CVA...................................24.57 0.32 24.90 20.90
VINCI ....................................................34.44 0.72 45.48 29.49
VIVENDI ...............................................16.00 0.43 22.07 14.10
VOLKSWAGEN VORZ.......................117.40 4.15 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5488.65 103.97 1.93
FTSE 250 INDEX . . . . . . . 10265.49 154.35 1.53
FTSE UK ALL SHARE . . . . 2827.83 51.60 1.86
FTSE AIMALL SH . . . . . . . . 708.81 4.14 0.59
DOWJONES INDUS 30 . . 11808.79 267.01 2.31
S&P 500 . . . . . . . . . . . . . . . 1238.25 22.86 1.88
NASDAQ COMPOSITE . . . 2637.46 38.84 1.49
FTSEUROFIRST 300 . . . . . . 978.13 23.86 2.50
NIKKEI 225 AVERAGE. . . . 8678.89 -3.26 -0.04
DAX 30 PERFORMANCE. . 5970.96 204.48 3.55
CAC 40 . . . . . . . . . . . . . . . . 3171.34 87.27 2.83
SHANGHAI SE INDEX . . . . 2317.28 -14.09 -0.60
HANG SENG. . . . . . . . . . . 18025.72 42.62 0.24
S&P/ASX 20 INDEX . . . . . . 2498.80 -4.60 -0.18
ASX ALL ORDINARIES . . . 4203.40 -3.40 -0.08
BOVESPA SAO PAOLO. . 55255.23 1245.25 2.31
ISEQ OVERALL INDEX . . . 2629.56 30.38 1.17
STI . . . . . . . . . . . . . . . . . . . . 2778.97 34.80 1.27
IGBM. . . . . . . . . . . . . . . . . . . 890.17 24.56 2.84
SWISS MARKET INDEX. . . 5753.52 95.86 1.69
Price Chg %chg
3M........................................................80.48 1.80 98.19 68.63
ABBOTT LABS ...................................53.86 -0.19 55.61 45.07
ALCOA ................................................10.23 0.28 18.47 8.45
ALTRIA GROUP..................................27.45 0.20 28.14 23.20
AMAZON.COM..................................234.78 1.17 246.71 156.57
AMERICAN EXPRESS........................48.46 2.27 53.80 38.88
AMGEN INC.........................................58.59 1.32 61.53 47.66
APPLE...............................................392.87 -2.44 426.70 297.76
AT&T....................................................29.13 0.14 31.94 27.20
BANK OF AMERICA.............................6.46 -0.01 15.31 5.13
BERKSHIRE HATAW B.......................77.45 1.58 87.65 65.35
BOEING CO.........................................64.59 2.10 80.65 56.01
BRISTOL MYERS SQUI ......................32.56 0.12 33.20 20.05
CATERPILLAR....................................87.39 3.13 116.55 67.54
CHEVRON.........................................105.53 2.14 109.94 80.41
CISCO SYSTEMS................................17.38 0.19 24.60 13.30
CITIGROUP.........................................30.30 0.22 51.50 21.40
COCA-COLA.......................................68.19 1.07 71.77 60.30
COLGATE PALMOLIVE......................93.92 2.30 94.89 74.39
CONOCOPHILLIPS.............................71.83 1.56 81.80 58.37
DU PONT(EI) DE NMR........................45.15 1.02 57.00 37.10
EXXON MOBIL....................................80.13 1.42 88.23 63.47
GENERAL ELECTRIC.........................16.31 -0.32 21.65 14.02
GOOGLE A........................................590.49 6.82 642.96 473.02
HEWLETT PACKARD.........................25.38 0.64 49.39 19.92
HOME DEPOT.....................................36.86 1.13 39.38 28.13
IBM.....................................................181.63 4.38 190.53 138.13
INTEL CORP .......................................24.03 0.42 26.78 19.16
J.P.MORGAN CHASE.........................33.42 0.29 48.36 27.85
JOHNSON & JOHNSON.....................63.78 1.25 68.05 57.50
KRAFT FOODS A................................35.20 0.14 36.30 24.30
MC DONALD'S CORP ........................92.32 3.31 92.45 72.14
MERCK AND CO. NEW......................33.35 0.55 37.68 29.47
MICROSOFT........................................27.16 0.12 29.46 23.65
OCCID. PETROLEUM.........................86.74 2.15 117.89 66.36
ORACLE CORP...................................32.12 0.59 36.50 24.72
PEPSICO.............................................62.28 0.16 71.89 58.50
PFIZER ................................................19.06 0.33 21.45 16.25
PHILIP MORRIS INTL .........................70.00 1.81 72.74 55.85
PROCTER AND GAMBLE ..................66.26 1.17 67.72 56.57
QUALCOMM INC ................................52.02 0.01 59.84 42.45
SCHLUMBERGER ..............................67.38 -0.61 95.64 54.79
TRAVELERS CIES..............................57.35 2.82 64.17 45.97
UNION PACIFIC ..................................96.96 2.37 107.89 77.73
UNITED TECHNOLOGIE ....................75.56 1.31 91.83 66.87
UNITEDHEALTH GROUP...................47.92 1.04 53.50 34.50
VERIZON COMMS ..............................37.42 0.32 38.95 31.60
WAL-MART STORES..........................56.92 0.55 57.90 48.31
WALT DISNEY CO ..............................35.16 1.32 44.34 28.19
WELLS FARGO & CO.........................26.31 0.55 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.856 0.00
LIBOR Euro - 12 months ................2.071 0.00
LIBOR USD - overnight...................0.141 0.00
LIBOR USD - 12 months.................0.921 0.00
HaIifax mortgage rate .....................3.990 0.00
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.230 0.06
European repo rate.........................0.725 0.00
Euro Euribor ....................................1.158 0.00
The vix index ...................................32.37 -2.41
The baItic dry index ........................2.161 0.02
Markit iBoxx...................................233.14 -1.08
Markit iTraxx..................................182.59 6.77
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
C/$ 1.3663 0.0088
C/ 0.8704 0.0022
C/ 105.64 0.2037
/C 1.1489 0.0029
/$ 1.5930 0.0141
/ 121.36 0.0400
FTSE 100
5488.65
103.97
FTSE 250
10265.49
154.35
FTSE ALLSHARE
2827.83
51.60
DOW
11808.79
267.01
NASDAQ
2637.46
38.84
S&P 500
1238.25
22.86
RPC Group . . . . . . . .344.0 4.5 384.8 215.4
Smiths Group . . . . . .937.5 16.0 1429.0 907.5
Brown (N.) Group . . .260.5 -0.9 311.2 252.5
Carpetright . . . . . . . . .486.9 -3.2 835.5 472.5
Debenhams . . . . . . . . .68.9 1.3 77.4 51.2
Dignity . . . . . . . . . . . .835.0 0.0 854.5 640.0
Dixons RetaiI . . . . . . .11.4 0.2 28.5 10.6
DuneImGroup . . . . . .494.0 9.1 550.0 383.9
HaIfords Group . . . . .322.7 2.6 459.7 268.6
Home RetaiI Group . .102.7 -0.7 235.0 99.5
Inchcape . . . . . . . . . .317.8 6.5 425.4 268.1
JD Sports Fashion . .816.5 -18.5 1030.0 753.5
Kesa EIectricaIs . . . . .94.6 3.1 174.0 80.0
Kingfisher . . . . . . . . .263.2 2.9 287.1 217.0
Marks & Spencer G . .330.6 -2.0 427.5 301.8
Mothercare . . . . . . . .192.0 3.3 627.5 179.6
Next . . . . . . . . . . . . .2668.0 54.0 2672.0 1868.0
Sports Direct Int . . . .236.2 6.6 266.2 125.5
WH Smith . . . . . . . . . .550.0 -4.5 560.0 433.8
Smith & Nephew . . . .576.5 7.5 742.0 521.0
Synergy HeaIth . . . . .832.0 7.5 981.0 738.5
Barratt DeveIopme . . .88.0 1.8 119.0 67.5
BeIIway . . . . . . . . . . . .700.5 5.5 753.5 511.0
BaIfour Beatty . . . . . .245.8 3.5 357.3 228.6
GaIIiford Try . . . . . . . .435.4 10.8 530.0 276.5
Kier Group . . . . . . . .1375.0 9.0 1418.0 1097.0
Drax Group . . . . . . . .536.5 7.5 537.5 353.6
SSE . . . . . . . . . . . . . .1354.0 3.0 1423.0 1108.0
Domino Printing S . .537.5 10.5 705.0 434.3
HaIma . . . . . . . . . . . . .331.3 3.6 429.6 306.3
Laird . . . . . . . . . . . . . .135.9 0.6 207.0 127.9
Morgan CrucibIe C . .259.1 6.7 357.1 222.3
Oxford Instrument . .762.5 2.0 1010.0 495.0
Renishaw . . . . . . . . . .915.0 8.0 1886.0 862.0
Spectris . . . . . . . . . .1196.0 14.0 1679.0 1039.0
Aberforth SmaIIer . . .536.5 13.0 714.0 508.5
AIIiance Trust . . . . . .335.5 2.7 392.7 310.2
Bankers Inv Trust . . .389.7 5.7 428.0 346.5
BH GIobaI Ltd. GB .1200.0 5.0 1210.0 1058.0
BH GIobaI Ltd. US . . . .11.7 0.0 12.2 10.4
BH Macro Ltd. EUR . . .19.2 0.1 20.1 15.8
BH Macro Ltd. GBP 1975.0 -8.0 2070.0 1630.0
BH Macro Ltd. USD . . .18.9 0.1 20.1 15.8
BIackRock WorId M .613.0 15.0 815.5 574.5
BIueCrest AIIBIue . . .168.7 0.1 176.2 162.4
British Assets Tr . . . .117.0 1.6 140.5 109.0
British Empire Se . . .451.7 0.4 533.0 409.9
CaIedonia Investm .1532.0 8.0 1928.0 1470.0
City of London In . . .286.1 5.2 306.9 257.0
Dexion AbsoIute L . .134.0 -0.3 151.0 130.0
Edinburgh Dragon . .218.4 0.8 262.1 201.4
Edinburgh Inv Tru . . .469.2 10.2 492.2 414.9
EIectra Private E . . .1435.0 25.0 1755.0 1287.0
F&C Inv Trust . . . . . .285.8 4.1 327.9 261.5
FideIity China Sp . . . . .77.0 1.9 128.7 70.0
FideIity European . .1014.0 9.0 1287.0 912.0
HeraId Inv Trust . . . . .457.1 -1.5 545.5 419.0
HICL Infrastructu . . . .117.4 0.2 121.3 112.7
Impax Environment . .91.6 0.5 130.5 88.5
JPMorgan American .817.0 -7.5 916.0 721.5
JPMorgan Asian In . .182.0 -4.3 250.8 170.1
JPMorgan Emerging .510.0 0.5 639.0 480.1
JPMorgan European .755.0 0.5 983.5 692.5
JPMorgan Indian I . . .357.1 -5.8 502.0 350.0
JPMorgan Russian .494.9 4.9 755.0 415.1
Law Debenture Cor . .345.0 2.0 385.0 309.8
MercantiIe Inv Tr . . . .918.0 17.0 1137.0 856.5
Merchants Trust . . . .376.4 10.5 431.8 347.0
Monks Inv Trust . . . .324.2 5.0 367.9 298.1
Murray Income Tru . .622.0 9.0 673.0 568.0
Murray Internatio . . .878.0 2.0 991.5 818.5
PerpetuaI Income . . .252.4 3.0 276.0 234.8
PersonaI Assets T .33050.0 60.0 33725.030210.0
PoIar Cap TechnoI . .334.1 0.1 391.2 299.5
RIT CapitaI Partn . . .1306.0 6.0 1334.0 1130.0
Scottish Inv Trus . . . .447.0 9.0 524.0 417.0
Scottish Mortgage . .652.5 5.5 781.0 586.5
SVG CapitaI . . . . . . . .209.9 4.5 279.8 187.9
TempIe Bar Inv Tr . . .863.5 16.0 952.0 791.0
TempIeton Emergin .534.0 2.0 689.5 497.0
TR Property Inv T . . .166.5 -2.5 206.1 150.0
TR Property Inv T . . . .74.6 0.1 94.0 69.5
Witan Inv Trust . . . . .445.5 6.5 533.0 401.5
3i Group . . . . . . . . . . .202.5 6.1 340.0 184.1
3i Infrastructure . . . . .119.7 0.6 125.2 112.9
Aberdeen Asset Ma .189.0 5.6 240.0 167.8
Ashmore Group . . . .326.0 7.9 420.0 301.5
Brewin DoIphin Ho . .119.4 0.7 185.4 113.7
CameIIia . . . . . . . . . .8950.5 150.510950.0 8800.0
CharIes TayIor Co . . .139.5 1.8 193.0 122.0
City of London Gr . . . .68.3 0.0 93.6 68.3
City of London In . . .323.0 -0.9 461.5 320.9
CIose Brothers Gr . . .716.0 14.5 888.5 656.5
CoIIins Stewart H . . . .61.3 -0.5 90.8 59.0
EvoIution Group . . . . .81.5 1.8 94.0 62.3
F&C Asset Managem .62.2 1.0 92.9 56.1
Hargreaves Lansdo .499.3 25.6 646.5 402.5
HeIphire Group . . . . . . .3.1 0.2 32.5 2.2
Henderson Group . . .118.6 1.5 173.1 95.1
Highway CapitaI . . . . .14.5 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .428.8 22.1 570.5 383.7
IG Group HoIdings . .475.0 1.4 553.0 393.6
Intermediate Capi . . .234.0 7.7 360.3 197.9
InternationaI Per . . . .247.1 4.3 388.8 196.5
InternationaI Pub . . . .115.4 0.1 118.3 108.6
Investec . . . . . . . . . . .373.5 12.3 538.0 331.8
IP Group . . . . . . . . . . . .67.0 1.5 67.5 27.9
Jupiter Fund Mana . .221.2 5.1 337.3 184.9
Liontrust Asset M . . . .58.0 0.1 94.3 57.0
LMS CapitaI . . . . . . . . .60.8 1.3 64.8 44.8
London Finance & . . .22.5 0.0 23.5 16.5
London Stock Exch .882.0 30.0 1076.0 697.0
Lonrho . . . . . . . . . . . . .14.3 0.3 19.8 12.5
Man Group . . . . . . . . .155.5 5.5 311.0 150.0
Paragon Group Of . .159.0 5.0 206.1 134.6
Provident Financi . .1087.0 -10.0 1124.0 728.5
Rathbone Brothers .1040.0 0.0 1257.0 866.5
Record . . . . . . . . . . . . .23.8 0.5 46.0 20.3
RSM Tenon Group . . .24.3 0.0 66.3 20.3
Schroders . . . . . . . .1347.0 44.0 1922.0 1183.0
Schroders (Non-Vo .1150.0 39.0 1554.0 970.0
TuIIett Prebon . . . . . .380.0 4.9 428.6 327.8
WaIker Crips Grou . . .46.0 0.0 51.5 45.0
BT Group . . . . . . . . . .182.0 3.8 204.1 152.1
CabIe & WireIess . . . .36.0 0.7 54.1 31.3
CabIe & WireIess . . . .26.9 0.6 76.9 26.3
COLT Group SA . . . . .95.6 1.9 156.2 91.6
KCOM Group . . . . . . . .70.0 -0.3 84.0 47.5
TaIkTaIk TeIecom . . .134.2 3.2 168.3 119.8
TeIecomPIus . . . . . . .720.0 -1.5 740.0 375.5
Booker Group . . . . . . .78.2 -1.9 80.0 53.4
Greggs . . . . . . . . . . . .502.0 5.0 550.5 429.1
Morrison (Wm) Sup .301.1 -0.9 308.3 262.7
Ocado Group . . . . . . . .88.8 4.1 285.0 84.8
Sainsbury (J) . . . . . . .306.0 6.5 391.5 263.5
Tesco . . . . . . . . . . . . .405.2 2.5 439.0 356.3
Associated Britis . .1099.0 9.0 1182.0 940.0
Cranswick . . . . . . . . .666.5 -9.5 896.0 588.5
Dairy Crest Group . . .344.8 0.8 424.9 325.0
Devro . . . . . . . . . . . . .234.3 -8.2 296.9 218.0
Premier Foods . . . . . . . .4.1 0.1 35.1 3.8
Tate & LyIe . . . . . . . . .650.0 6.0 656.0 490.2
UniIever . . . . . . . . . .2091.0 22.0 2109.0 1777.0
Mondi . . . . . . . . . . . . .453.2 4.8 664.0 444.2
Centrica . . . . . . . . . . .303.1 5.1 345.8 282.6
InternationaI Pow . . .334.9 4.7 448.6 279.4
NationaI Grid . . . . . . .636.0 -2.0 649.5 530.0
Pennon Group . . . . . .698.5 1.5 737.5 584.5
Severn Trent . . . . . .1535.0 11.0 1571.0 1359.0
United UtiIities . . . . .619.5 7.5 631.5 543.5
Cookson Group . . . . .487.1 26.4 724.5 395.8
DS Smith . . . . . . . . . .197.3 4.3 266.2 164.4
Rexam . . . . . . . . . . . .336.3 12.3 400.0 299.8
Price Chg High Low
BerkeIey Group Ho .1190.0 15.0 1299.0 789.5
Bovis Homes Group .458.8 3.8 464.7 326.5
Persimmon . . . . . . . .486.4 -0.5 502.5 336.5
Reckitt Benckiser . .3449.0 113.0 3648.0 3015.0
Redrow . . . . . . . . . . . .118.7 0.1 139.0 98.4
TayIor Wimpey . . . . . . .36.4 0.7 43.3 22.3
Bodycote . . . . . . . . . .270.0 5.9 397.7 225.6
Charter Internati . . . .856.0 2.0 876.5 538.5
Fenner . . . . . . . . . . . .329.6 4.8 422.5 259.3
IMI . . . . . . . . . . . . . . . .779.0 22.5 1119.0 636.5
MeIrose . . . . . . . . . . .322.0 10.0 365.4 265.7
Northgate . . . . . . . . . .241.2 0.3 346.7 202.0
Rotork . . . . . . . . . . .1597.0 46.0 1858.0 1501.0
Spirax-Sarco Engi . .1816.0 52.0 2063.0 1649.0
Weir Group . . . . . . .1773.0 98.0 2218.0 1375.0
Ferrexpo . . . . . . . . . . .294.3 1.0 499.0 238.7
TaIvivaara Mining . . .210.4 4.5 622.0 204.9
BBAAviation . . . . . . .181.9 3.7 240.8 156.0
Stobart Group Ltd . . .125.0 2.0 163.6 121.2
AdmiraI Group . . . . .1222.0 16.0 1754.0 1201.0
AmIin . . . . . . . . . . . . .301.6 1.5 427.0 270.6
Huntsworth . . . . . . . . .58.6 2.1 85.0 55.3
Informa . . . . . . . . . . . .345.0 9.7 461.1 313.9
ITE Group . . . . . . . . . .175.0 3.0 258.2 157.7
ITV . . . . . . . . . . . . . . . . .60.0 1.3 93.5 51.7
Johnston Press . . . . . . .4.2 0.1 13.5 4.1
MecomGroup . . . . . .150.8 9.3 310.0 134.5
Moneysupermarket. . .98.0 1.0 120.4 75.7
Pearson . . . . . . . . . .1152.0 17.0 1207.0 926.0
PerformGroup . . . . .203.9 3.9 234.5 150.0
Reed EIsevier . . . . . .534.5 11.5 590.5 461.3
Rightmove . . . . . . . .1298.0 17.0 1308.0 736.5
STV Group . . . . . . . . .103.0 2.5 168.0 90.3
Tarsus Group . . . . . .133.0 1.5 165.0 112.5
Trinity Mirror . . . . . . . .47.0 -0.5 108.0 37.5
UBM . . . . . . . . . . . . . .503.5 16.0 725.0 416.0
UTV Media . . . . . . . . .123.1 -1.6 150.0 101.0
WiImington Group . . .88.0 0.5 183.0 82.5
WPP . . . . . . . . . . . . . .632.0 13.0 846.5 578.0
YeII Group . . . . . . . . . . .3.7 0.0 16.1 3.5
African Barrick G . . .531.0 2.0 618.5 393.5
AIIied GoId Minin . . .147.1 5.7 281.3 34.4
AngIo American . . .2220.0 39.5 3437.0 2138.5
AngIo Pacific Gro . . .255.4 -3.8 369.3 237.9
Antofagasta . . . . . . .1096.0 57.0 1634.0 900.5
Aquarius PIatinum . .170.7 -3.5 419.0 163.1
BeazIey . . . . . . . . . . . .124.0 1.0 139.2 109.6
CatIin Group Ltd. . . .389.9 3.7 421.4 331.5
Hiscox Ltd. . . . . . . . . .380.0 4.5 424.7 340.5
Jardine LIoyd Tho . . .701.0 9.0 714.0 571.5
Lancashire HoIdin . . .743.5 20.0 746.0 529.0
RSA Insurance Gro . .112.7 2.2 143.5 106.0
Aviva . . . . . . . . . . . . . .339.3 15.1 477.9 275.3
LegaI & GeneraI G . . .104.0 2.1 123.8 89.8
OId MutuaI . . . . . . . . .108.4 2.7 144.8 98.1
Phoenix Group HoI . .505.0 -0.5 688.0 451.1
PrudentiaI . . . . . . . . .633.0 24.5 777.0 509.0
ResoIution Ltd. . . . . .277.1 3.2 316.1 211.3
St James's PIace . . . .349.9 19.5 376.0 236.2
Standard Life . . . . . . .210.6 3.5 244.7 172.0
4Imprint Group . . . . .230.0 3.0 295.0 200.0
Aegis Group . . . . . . .134.5 3.7 163.5 119.4
BIoomsbury PubIis . . .99.0 1.3 138.0 95.1
British Sky Broad . . .732.5 7.5 850.0 618.5
Centaur Media . . . . . . .39.0 0.0 73.0 36.0
Chime Communicati .196.0 -1.0 298.5 173.0
Creston . . . . . . . . . . . .84.3 1.3 121.0 72.0
DaiIy MaiI and Ge . . .400.8 11.7 594.5 343.4
Euromoney Institu . .622.0 6.5 736.0 522.5
Future . . . . . . . . . . . . . .10.1 0.4 30.0 9.8
Haynes PubIishing . .215.0 0.0 257.0 203.5
BHP BiIIiton . . . . . . .1897.0 64.0 2631.5 1667.0
Centamin Egypt Lt . .103.2 0.2 197.1 89.7
Eurasian NaturaI . . .658.0 24.5 1125.0 522.0
FresniIIo . . . . . . . . . .1505.0 7.0 2150.0 1247.0
GemDiamonds Ltd. .201.3 1.0 306.0 179.8
GIencore Internat . . .403.5 8.0 531.1 348.0
HochschiId Mining . .449.0 3.0 680.0 397.0
Kazakhmys . . . . . . . .856.5 26.0 1671.0 730.0
Kenmare Resources . .37.3 0.1 59.9 18.9
Lonmin . . . . . . . . . . .1033.0 12.0 1983.0 974.5
New WorId Resourc .495.0 28.8 1060.0 410.5
PetropavIovsk . . . . . .727.5 39.5 1165.0 543.5
RandgoId Resource 6280.0 -5.0 7215.0 4425.0
Rio Tinto . . . . . . . . .3151.0 136.0 4712.0 2712.5
Vedanta Resources .1167.0 35.0 2559.0 948.0
Xstrata . . . . . . . . . . . .951.5 55.7 1550.0 764.0
Inmarsat . . . . . . . . . . .480.2 14.1 719.5 389.7
Vodafone Group . . . .175.6 0.9 182.8 155.1
Genesis Emerging . .450.0 4.0 568.0 430.0
Afren . . . . . . . . . . . . . . .87.5 1.6 171.2 73.6
BG Group . . . . . . . . .1354.5 36.0 1564.5 1144.0
BP . . . . . . . . . . . . . . . .439.4 9.6 509.0 363.2
Cairn Energy . . . . . . .295.8 13.0 469.7 261.4
EnQuest . . . . . . . . . . .103.0 0.0 158.5 86.6
Essar Energy . . . . . .287.4 7.8 589.5 235.1
ExiIIon Energy . . . . . .264.0 2.0 469.7 184.2
Heritage OiI . . . . . . . .238.4 6.7 486.0 190.0
Ophir Energy . . . . . . .240.0 10.0 299.0 184.5
Premier OiI . . . . . . . . .369.2 7.4 535.0 310.0
RoyaI Dutch SheII . .2249.5 35.0 2326.5 1883.5
RoyaI Dutch SheII . .2314.0 24.5 2336.0 1890.5
SaIamander Energy .198.3 1.7 317.6 182.3
Soco Internationa . . .331.7 3.2 400.0 279.8
TuIIow OiI . . . . . . . . .1423.0 41.0 1493.0 945.5
Amec . . . . . . . . . . . . .909.0 28.5 1251.0 740.5
Hunting . . . . . . . . . . .673.5 33.5 817.0 530.0
Kentz Corporation . .486.3 16.3 499.0 275.5
LampreII . . . . . . . . . . .225.8 5.1 395.2 220.7
Petrofac Ltd. . . . . . .1372.0 59.0 1685.0 1108.0
Wood Group (John) .585.5 25.5 715.8 432.5
Burberry Group . . . .1247.0 13.0 1600.0 993.0
PZ Cussons . . . . . . . .355.0 2.7 409.0 320.5
Supergroup . . . . . . . .655.0 5.0 1820.0 650.0
AstraZeneca . . . . . .3040.5 67.0 3304.0 2543.5
BTG . . . . . . . . . . . . . .270.0 -3.3 309.7 210.1
Genus . . . . . . . . . . . . .989.0 7.0 1111.0 800.0
GIaxoSmithKIine . . .1400.5 8.0 1408.0 1127.5
Hikma Pharmaceuti .628.0 4.0 900.0 555.5
Shire PIc . . . . . . . . . .2002.0 -10.0 2136.0 1454.0
CapitaI & Countie . . .171.1 5.9 203.7 142.5
Daejan HoIdings . . .2700.0 3.0 2954.0 2282.0
F&C CommerciaI Pr . .98.7 1.3 108.0 88.0
Grainger . . . . . . . . . . . .85.5 -0.1 133.2 77.3
London & Stamford .118.2 1.0 140.0 112.9
SaviIIs . . . . . . . . . . . . .276.2 8.5 427.1 256.2
UK CommerciaI Pro . .77.7 0.2 85.5 70.4
Unite Group . . . . . . . .175.0 5.9 224.1 152.9
Big YeIIow Group . . .259.1 2.2 352.2 234.2
British Land Co . . . . .512.0 22.9 629.5 452.0
CapitaI Shopping . . .332.4 7.3 424.8 296.4
Derwent London . . .1647.0 45.0 1880.0 1400.0
Great PortIand Es . . .361.9 12.9 445.0 317.4
Hammerson . . . . . . . .401.8 13.0 490.9 353.0
Hansteen HoIdings . . .77.0 0.2 89.5 70.0
Land Securities G . . .672.0 19.0 885.0 616.0
SEGRO . . . . . . . . . . . .239.5 6.6 331.3 210.1
Shaftesbury . . . . . . . .500.0 11.8 539.0 431.7
Aveva Group . . . . . .1484.0 64.0 1799.0 1298.0
Computacenter . . . . .375.0 6.0 490.0 354.8
Fidessa Group . . . . .1685.0 -5.0 2109.0 1409.0
Invensys . . . . . . . . . . .211.0 1.0 364.3 199.6
Logica . . . . . . . . . . . . .89.3 2.6 147.2 73.9
Micro Focus Inter . . .337.6 3.6 426.2 239.4
Misys . . . . . . . . . . . . .257.5 -1.2 420.2 214.9
Sage Group . . . . . . . .278.5 1.8 302.0 231.7
SDL . . . . . . . . . . . . . . .658.0 4.5 711.5 555.0
TeIecity Group . . . . . .587.0 -1.5 604.5 430.0
Aggreko . . . . . . . . . .1710.0 6.0 2034.0 1394.5
Ashtead Group . . . . .157.0 4.2 207.9 99.4
Atkins (WS) . . . . . . . .523.5 22.0 820.0 490.2
Babcock Internati . . .687.0 17.0 733.0 513.5
Berendsen . . . . . . . . .439.7 5.7 568.0 391.3
BunzI . . . . . . . . . . . . .815.0 11.0 819.0 676.5
Cape . . . . . . . . . . . . . .464.7 6.2 591.5 358.3
Capita Group . . . . . . .708.0 10.0 786.5 635.5
CariIIion . . . . . . . . . . .338.7 5.2 403.2 298.8
De La Rue . . . . . . . . .842.5 2.5 854.5 549.5
DipIoma . . . . . . . . . . .300.2 -1.8 414.3 258.0
EIectrocomponents .207.9 2.4 294.9 182.2
Experian . . . . . . . . . . .773.5 24.5 833.5 665.0
FiItrona PLC . . . . . . . .352.6 -0.4 385.5 227.5
G4S . . . . . . . . . . . . . . .242.3 1.3 291.0 219.9
Hays . . . . . . . . . . . . . . .77.0 3.0 133.6 66.6
Homeserve . . . . . . . .470.1 10.7 532.0 408.0
Howden Joinery Gr . .114.3 1.7 127.5 75.5
Interserve . . . . . . . . . .311.5 1.6 341.3 183.5
Intertek Group . . . . .1973.0 63.0 2148.0 1715.0
MichaeI Page Inte . . .378.6 17.2 567.0 338.7
Mitie Group . . . . . . . .242.6 2.2 244.0 194.1
Premier FarneII . . . . .171.0 3.0 308.8 144.5
Regus . . . . . . . . . . . . . .74.1 1.9 119.0 64.0
RentokiI InitiaI . . . . . . .69.5 1.7 104.9 64.8
RPS Group . . . . . . . . .171.4 4.8 253.0 156.6
Serco Group . . . . . . .513.0 14.1 633.0 490.9
Shanks Group . . . . . .107.5 2.3 130.9 103.0
SIG . . . . . . . . . . . . . . . .99.6 0.6 153.5 83.8
SThree . . . . . . . . . . . .268.0 7.9 447.6 213.2
Travis Perkins . . . . . .846.5 15.5 1127.0 715.0
WoIseIey . . . . . . . . .1796.0 35.0 2261.0 1404.0
ARM HoIdings . . . . . .567.5 -0.5 651.0 338.9
CSR . . . . . . . . . . . . . .183.6 3.1 447.0 176.9
Imagination Techn . .462.1 9.9 502.0 296.9
Pace . . . . . . . . . . . . . . .77.4 -2.6 231.8 77.0
Spirent Communica .125.6 0.6 160.3 109.5
British American . .2880.0 90.0 2889.5 2282.5
ImperiaI Tobacco . .2248.0 27.0 2250.0 1784.0
Betfair Group . . . . . . .782.5 37.5 1550.0 567.0
Bwin.party Digita . . .105.0 2.2 280.9 100.6
CarnivaI . . . . . . . . . .2256.0 96.0 3153.0 1742.0
Compass Group . . . .561.5 -1.0 612.0 511.5
Domino's Pizza UK . .440.0 -11.0 586.0 377.0
easyJet . . . . . . . . . . . .351.5 6.8 479.0 301.0
FirstGroup . . . . . . . . .329.8 7.1 412.6 301.8
Go-Ahead Group . . .1398.0 -22.0 1598.0 1203.0
Greene King . . . . . . .449.9 5.7 518.0 410.0
InterContinentaI . . .1115.0 53.0 1435.0 955.0
InternationaI Con . . .164.9 4.8 305.0 141.6
JD Wetherspoon . . . .433.0 3.3 468.3 380.5
Ladbrokes . . . . . . . . .136.6 0.4 155.3 114.0
Marston's . . . . . . . . . . .96.5 0.6 117.1 84.6
MiIIennium& Copt . .423.4 10.3 600.5 375.6
MitcheIIs & ButIe . . . .237.0 1.9 361.0 216.4
NationaI Express . . .225.3 -4.1 270.2 219.6
Rank Group . . . . . . . .126.1 -0.9 153.7 109.5
Restaurant Group . . .286.9 1.3 335.0 254.9
Stagecoach Group . .245.7 3.0 272.4 200.0
Thomas Cook Group .51.5 6.0 204.8 33.7
TUI TraveI . . . . . . . . . .164.0 5.8 271.9 137.2
Whitbread . . . . . . . .1671.0 38.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .227.0 0.8 244.1 155.5
Abcam . . . . . . . . . . . .332.0 3.5 460.0 307.0
AIbemarIe & Bond . .318.0 0.0 400.1 272.0
Amerisur Resource . .12.8 1.0 29.0 9.5
Andor TechnoIogy . .505.0 5.0 685.0 356.0
ArchipeIago Resou . . .64.0 -4.6 79.0 33.5
ASOS . . . . . . . . . . . .1450.0 21.0 2468.0 1234.0
AureIian OiI & Ga . . . .17.8 0.3 92.0 16.0
Avanti Communicat .307.0 8.0 735.0 248.5
Avocet Mining . . . . . .238.0 6.8 286.8 173.8
BIinkx . . . . . . . . . . . . .148.0 3.5 158.0 70.5
Borders & Souther . . .50.0 0.0 73.0 43.5
BowLeven . . . . . . . . .105.0 0.0 398.0 74.5
Brooks MacdonaId 1262.5 2.5 1372.5 940.0
Cove Energy . . . . . . . .88.5 0.5 112.8 61.0
Daisy Group . . . . . . . .110.5 0.0 127.0 88.0
EMIS Group . . . . . . . .532.5 7.5 580.0 396.0
Encore OiI . . . . . . . . . .77.5 0.3 151.5 40.8
Faroe PetroIeum . . . .155.8 -0.3 218.3 130.0
GuIfsands PetroIe . . .184.8 1.0 401.5 142.5
GWPharmaceuticaI . .90.6 -1.9 130.0 83.0
H&T Group . . . . . . . . .327.5 -2.5 395.0 277.0
Hamworthy . . . . . . . .515.0 0.0 705.0 373.8
Hargreaves Servic .1052.0 4.0 1080.0 681.0
HeaIthcare Locums . . . .6.3 0.1 7.0 6.0
Immunodiagnostic . .875.0 7.0 1218.0 768.5
ImpeIIamGroup . . . .330.0 0.0 387.5 177.5
James HaIstead . . . . .470.0 5.0 495.0 345.5
KaIahari MineraIs . . .233.0 4.3 301.0 168.0
London Mining . . . . .329.0 8.3 436.5 283.0
Lupus CapitaI . . . . . .101.1 1.4 150.0 86.0
M. P. Evans Group . .403.0 3.0 500.5 371.0
Majestic Wine . . . . . .422.0 -7.0 510.0 350.0
May Gurney Integr . .288.3 -2.8 300.0 211.0
Monitise . . . . . . . . . . . .35.0 -0.5 39.0 18.5
MuIberry Group . . . .1400.0 0.0 1920.0 530.0
Nanoco Group . . . . . . .40.0 -1.3 115.8 40.0
NauticaI PetroIeu . . .313.0 3.3 547.0 223.5
NichoIs . . . . . . . . . . . .542.5 0.0 579.0 410.0
Numis Corporation . . .92.5 -0.5 137.8 89.0
Pan African Resou . . .12.0 -0.3 14.5 9.4
Patagonia GoId . . . . . .54.0 0.5 70.0 20.3
Prezzo . . . . . . . . . . . . .53.8 -0.8 71.5 53.3
Pursuit Dynamics . . .201.0 10.0 700.0 160.5
Rockhopper ExpIor .204.5 2.0 386.0 141.0
RWS HoIdings . . . . . .426.0 0.0 479.8 266.5
Songbird Estates . . .118.3 2.3 160.3 110.3
VaIiant PetroIeum . . .482.0 -0.8 750.0 435.0
Young & Co's Brew . .642.5 32.5 712.0 530.0
Thomas Cook Group .51.5 13.1
Xstrata . . . . . . . . . . . .951.5 6.2
New WorId Resource 495.0 6.2
St James's PIace . . . .349.9 5.9
Weir Group . . . . . . .1773.0 5.9
BarcIays . . . . . . . . . . .182.0 5.8
PetropavIovsk . . . . . .727.5 5.7
Cookson Group . . . . .487.1 5.7
Antofagasta . . . . . . .1096.0 5.5
ICAP . . . . . . . . . . . . . .428.8 5.4
Devro . . . . . . . . . . . . .234.3 -3.4
Pace . . . . . . . . . . . . . . .77.4 -3.3
Domino's Pizza UK .440.0 -2.4
JPMorgan Asian Inv .182.0 -2.3
Booker Group . . . . . . .78.2 -2.3
JD Sports Fashion . .816.5 -2.2
Aquarius PIatinum . .170.7 -2.0
NationaI Express G . .225.3 -1.8
JPMorgan Indian In . .357.1 -1.6
Go-Ahead Group . . .1398.0 -1.6
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
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Tsy 3.250 11 . . . . .100.19 -0.02 103.0 100.2
Tsy 9.000 12 . . . .105.80 0.00 114.6 105.8
Tsy 5.000 12 . . . .101.64 -0.03 106.1 101.6
Tsy 5.250 12 . . . .102.91 -0.03 107.5 102.9
Tsy 4.500 13 . . . .105.33 -0.04 108.8 105.3
Tsy 2.500 13 . . . .284.65 -0.02 287.7 277.6
Tsy 8.000 13 . . . . .114.10 -0.07 120.7 114.0
Tsy 5.000 14 . . . . .111.71 -0.12 114.1 109.2
Tsy 4.750 15 . . . . .113.74 -0.19 114.8 108.6
Tsy 8.000 15 . . . .127.43 -0.22 131.3 123.7
Tsy 7.750 15 . . . .101.25 0.00 108.8 101.3
Tsy 4.000 16 . . . . .112.16 -0.25 113.4 104.9
Tsy 2.500 16 . . . .339.70 -0.30 342.2 310.2
Tsy 8.750 17 . . . .138.72 -0.34 141.9 132.9
Tsy 12.000 17 . . .123.50 0.00 134.0 122.5
Tsy 1.250 17 . . . . .113.88 -0.35 115.3 106.7
Tsy 5.000 18 . . . . .119.06 -0.44 121.0 109.7
Tsy 4.500 19 . . . . .116.50 -0.50 118.8 105.4
Tsy 3.750 19 . . . . .111.10 -0.51 113.5 99.4
Tsy 2.500 20 . . . .350.98 -0.26 355.6 312.4
Tsy 4.750 20 . . . . .118.65 -0.52 121.4 106.6
Tsy 8.000 21 . . . .147.13 -0.65 151.8 133.8
Tsy 1.875 22 . . . .122.22 -0.42 125.4 111.3
Tsy 4.000 22 . . . . .112.97 -0.65 115.6 99.0
Tsy 2.500 24 . . . . .311.80 -0.27 320.1 273.5
Tsy 5.000 25 . . . .124.04 -0.75 126.9 107.4
Tsy 4.250 27 . . . . .115.23 -1.01 118.1 97.9
Tsy 1.250 27 . . . . .115.96 -0.47 121.0 104.6
Tsy 6.000 28 . . . .139.41 -0.99 142.9 119.5
Tsy 4.750 30 . . . .122.46 -1.14 125.6 103.0
Tsy 4.125 30 . . . .294.66 -0.46 305.4 261.2
Tsy 4.250 32 . . . . .114.56 -1.21 117.9 96.0
Tsy 4.250 36 . . . . .114.51 -1.31 117.6 95.0
Tsy 4.750 38 . . . .123.69 -1.36 126.9 102.8
Tsy 4.500 42 . . . . .120.11 -1.49 123.0 98.9
% %
ALTERNATIVE ENERGY
Wealth Management
1.3893 0.0002
0.0002 1.5950
Business Features | Entrepreneurs
31
Donata Huggins asks
Deborah Meaden of
BBCs Dragons Den for
her secrets for success
A
S chancellor George Osborne and his team
try to simplify our over-complex tax sys-
tem, they are looking at taxes whose harm-
ful effects outweigh any good that comes
from their revenue. Obviously the 50 per cent top
rate of income tax must be a prime candidate,
given that the Institute for Fiscal Studies has
joined the Adam Smith Institute recently in argu-
ing that it will probably reduce tax revenues
instead of raising them.
Hot on its heels as a tax that distorts and dam-
ages the economy must come inheritance tax.
When Dr Bracewell-Milnes wrote his classic stud-
ies in 1994 and 1995, he concluded that the tax
had probably had a negative yield in every single
year since it was first introduced as estate duty
in 1894. To that can be added the difficulties
which the tax puts in the way of entrepreneurs.
When someone starts up a new business that
creates jobs and wealth, they usually want to
pass it on to their children to give them a better
start than they enjoyed themselves. This is what
parents do; it is part of human nature, and no talk
of giving some people an unfair start is going to
change that. There is nothing unfair about par-
ents caring for their children. They build up a
business and want to pass on to their children
what they have saved after taxes, only to see it
taxed again.
Perversely, inheritance tax rewards spending
rather than saving. The spender enjoys 100 per
cent of value, whereas the saver is allowed only
60 per cent. The incentive is to dissipate the pool
of capital rather than preserve it. Some unincor-
porated businesses that could continue as going
concerns under family stewardship are sold and
dissipated. Other businesses guard against this by
ceasing to be entrepreneurial and growing,
diverting energies instead into ways of minimising
their exposure to inheritance tax rather than into
expanding their activity and their markets.
The taxs adverse effects on entrepreneurship
go much further than discouraging parents from
building up and passing on businesses. Several
studies have shown that ordinary bequests boost
self-employment. They provide capital sums to
children at just the time when some contemplate
branching out from paid employment into their
own business. The bequest makes it possible, and
by taxing bequests we are inhibiting future self-
employment and the new businesses it would
bring.
Furthermore, it is overwhelmingly family
wealth that provides start-up businesses with
lower cost and less risky capital than that avail-
able from banks. Family wealth is less demanding
and more forgiving of the hiccups and cash flow
crises that many start-ups experience. By taking
money from families and into the Treasury, inheri-
tance tax is taking away part of the capital stock
available to fund new enterprises.
When George Osborne in 2007 announced a
plan to raise the inheritance tax threshold to 1m,
the moves popularity caused Gordon Brown to
postpone the election
that might have re-
elected him. If
the tax were
abolished
today,
entre-
pre-
neurs
and
would-
be
entre-
preneurs
would be
among
those leading
the applause.
INHERITANCE
TAX: ENEMY OF
ENTREPRENEURS
PRESIDENT OF THE ADAM SMITH INSTITUTE
D
RAGONS are supposed to be scary,
but in real life Deborah Meaden is
warm and approachable. She is sur-
prisingly open about her weakness-
es too: Well, I never imagined I wouldnt
set up a business, she explains. Not least
because I dont take instruction very
well, she laughs.
I wasnt academic. I didnt like school,
but I was bright enough to be able to turn
it on when I needed to, says Meaden. She
left school at 16 with O-levels and headed
to Brighton to study business. This prob-
ably isnt a good message for students,
but I probably just went because I wanted
to leave home to have some fun.
After graduation, she still knew she
wanted to own a business, but had no
idea how to get one. I got a job as a fash-
ion model, I hated it, but I stayed for a
while because the person who gave me
the job had been good to me.
I was desperate to get on with it, but I
didnt have any cash. How do you start a
business with absolutely nothing? You at
least have to have enough money to cover
the rent for a little bit.
She eventually packed her bags and
left for Italy. I just thought: if I stay here
doing the same thing, nothing will
change. Meaden had no money and no
idea what she planned to do. I managed
to convince these four Italian companies
to let me be their agent for their products
in the UK. But it didnt last long. The
companies began bypassing her and sell-
ing directly to the UK stores. I had them
all under contract, but I thought life is
too short to waste my time fighting
them.
I actually think thats one of my
secrets of success. I know when to call it a
day. That, and I presume I can do things
until proven otherwise, she says.
That logic certainly gave her a break.
She came back to the UK and convinced
Stefanel, a clothing company, to let her
set up a franchise at low cost. I literally
bounced into Stefanel in Knightsbridge
and asked if they were interested in fran-
chising. They said funny you should say
that, we are. She tracked down a busi-
ness partner and premise and set up shop
in Somerset.
That was the first business I made
money on. I sold it to my business part-
ner for 10,000. Not a fortune, but
enough to get going on my own. And
thats how she got into the leisure busi-
nesses that lead her to the limelight.
It started with a bingo concession at
Butlins, she explains. It taught me
more about business than anything else I
had done until then because I was so
close to the customer. After three years
she sold it back to Butlins for a profit.
There were just so many businesses
between bingo and Weststar Holidays
[Meadens biggest business]. They were all
retail and leisure though. I feel most
comfortable with them because Ive done
most of the jobs within them myself. Im
very hands on.
Now shes a full-time investor, breath-
ing fire into the UK economy.
Meaden is promoting the Local Business
Accelerators initiative, an incubation scheme
that supports start-ups (details below).
Presume you can do it
until proven otherwise
Meaden giving other entrepreneurs a helping hand
CAREERS NEWS | IN BRIEF
NUMBER OF MBOS HAVE TRIPLED
The number of business owners prepared to
consider a management buyout (MBO) has
tripled in the last three years since entrepre-
neurs have had to consider all options in a
difficult economic market, according to new
research by Coutts. However, most entrepre-
neurs will only instinctively sell their business
to their own management team as a last
resort, although those that have been
through a MBO say it is the best way to exit
a business. Around a third (30 per cent) of
entrepreneurs who have completed an MBO
say it represents the best form of exit.
SMES USING ALTERNATIVE FINANCE
MarketInvoice, the online invoice trading plat-
form for small and medium-sized businesses
(SME), announced it has reached 2m volume in
total invoices sold through online auctions since
trading began in February 2011. This has come
on the back of its most successful month yet
with 500,000 of SME business capital raised
through the platform in August alone. Anil
Stocker, co-founder of MarketInvoice, says:
Over the last few months we have seen an
increasing number of small businesses turn to
alternative financing solutions to help run their
businesses.
NEW MEDIA KEY TO GROWTH
A survey of small and medium-sized businesses
(SME) conducted by Entrepreneur Country
shows that four out of 10 small business owners
believe that the influence of social networking
and in particular new media are key technology
growth areas over the next five years. With the
popularity of social networking sites such as
Facebook and Twitter, SMEs believe that not
only will these medias continue to influence con-
sumer choice and marketing spend but that new
disruptive social networking and communication
platforms are likely to dominate over the next
five years.
MADSEN PIRIE
What is it: 15m of free advertising will
be given to the very best fledgling busi-
nesses across the UK who will also
receive mentoring support from local
business leaders.
How does it work: Each regional news-
paper taking part will select up to three
businesses to receive free advertising and
mentoring, so around 1,500 business are
expected to benefit from the scheme.
Open to businesses that are:
l Active in the local community
l Between one and three years old
l Full of potential
Visit www.accelerateme.co.uk for more
information on the scheme and how to
enter. Entries close 14 November 2011.
LOCAL BUSINESS ACCELERATORS | NEED TO KNOW
T
HE Nina J is bobbing up and down in
the clear sparkling Riviera water,
flanked by other super yachts that
occasionally eject bevies of python
and white linen-clad babes ready to take
Monaco by storm. Around the pier, portly
perma-tanned sugar daddies squeeze the
waists of their young Ivankas as they pon-
der how to blow the next $100m at the
Monaco Yacht show. Here, dogs come in
handbags and breasts come in three sizes:
30, 40, or $50,000. This is the land of the
uber rich.
Appropriately enough, it is here I have
come to meet Thomas Flohr, the smooth,
bronzed, curly haired CEO and owner of
VistJets, the only leviathan in the private jet
market other than US company NetJets.
And if he is selling the lifestyle of his clients
he isnt doing badly.
The inside of the yacht is dominated by a
Vertical Garden by french artist du Jour
Patrick Blanc who, for around $200 per
square foot, transforms your space into a liv-
ing, breathing montage. The sofas are by
Zaha Hadid, and the artfully arranged
trunks are of course, vintage Vuitton.
Such attention to artistry and detail are
what Flohr and his gamine, beautiful
daughter Nina hope to achieve inside their
30m planes, that are now flying entre-
preneurs and CEOs around the world for
7,000-18,000 an hour. The 30+ jets,
with their signature shiny metallic
outsides, white Italian leather interi-
ors and cashmere throws, are, Mr
Flohr explains over seared fillet of
beef and Tinganello, what I would
expect myself; there was
never a brand representing
what the owners type of
people actually want. Nina,
24, wearing the neutral
clean logo-less lines that
only the most understated
designer labels can deliver,
has used her creative tal-
ents to commission LA
street artist RETNA to
design some of the jet tails,
and she is in talks with
others.
Started in 2004, the company grew after
Flohr who made his money in asset man-
agement bought a jet for his company.
When it wasnt in use, Flohr had the jet
chartered out, and it was soon completely
booked for the year so he bought another.
It was then that Flohr had his lightbulb
moment.
I thought: It cannot be that I, having no
idea of this business, have more of an idea
than everyone else, he says. I put all my
financial analysts onto it they came back
saying the asset was very strong, it would
hold its value very well. There was NetJets
but that is very corporate American. I asked
myself: wheres the brand, wheres the Four
Seasons? I couldnt find it, so I started it.
Unlike NetJets, where you buy a share of
the plane, there is no management con-
tract; you are literally just buying the hours
you fly per year. There is a 20 per cent lee-
way either side if you overfly or underfly;
the investment works if you are flying
between 50 and 500 hours a year. After that,
Flohr would expect clients to get their own
private jet; below that it is the occasion-
al charter.
Flohr believes the reason his
company grew 25 per cent in
the past three years (he predicts
further growth of 25 per cent a
year for the next three years)
is that, fundamentally, the
world has changed.
In this business it used to be
corporate executives fly-
ing. Until about five to
eight years ago, world
trade was mostly
through Western com-
panies. However, glob-
al trade today is
happening between
countries which
never traded togeth-
er. Siberia with
Saudi Arabia,
Nigeria with China,
China with Brazil.
Inner Mongolia
Above: one of
VistaJets fleet, with
designer tail.
Below: VistaJet
owner Thomas Flohr
and daughter Nina.
Lifestyle | Travel
Opening up a new vista in air travel
A new business elite is making use of a whole new network of routes,
along with unprecedented levels of luxury and style. Jemima Sissons
goes to Monaco to meet private aviations hottest entrepreneurs
used to be just the Gobi desert, now it is
exploding.
As a result, the travel power routes have
shifted from the obvious.
Try to fly from Abuja to Ulan Bator its
impossible, says Flohr. These countries
now trade directly but the infrastructure is
not geared up for it, and that is where we
come in. I wouldnt say this is the secret of
our success but it is my conclusion we will
prosper as long as we believe that the glob-
al trade will exist between more remote
countries.
The type of client has also changed con-
siderably in the last five years. Whereas it
used to be FTSE CEOs, it is now typically
the entrepreneur rather than the multina-
tional. You wouldnt recognise 95 per cent
of my client list, he adds.
Predictably, the most frequented airport
is Moscow, which VistaJets flies into five or
six times a day more than British Airways.
The biggest growth area is West Africa, but
the next frontier is, inevitably, China.
As you would expect from the kind of
anonymous entrepreneur who has the odd
million to spend on chartering a jet, high
standards are expected.
If the client wants to smoke, he can
smoke, says Flohr. If someone pays these
kinds of prices they should be able to do
what they want. There is no having to
enable mobile phones to flight mode, and if
you want to bring your surfboard, in it goes.
A keen oenophile and gourmand, Flohr
is in talks with some of his favourite restau-
rants around the world so sushi will be by
Nobus Matsuhisa in LA and clients passing
through London can expect Italian delica-
cies from Scalinis.
However, as Flohr points out, its not the
in-air expeirence that bothers people; its
how they are treated on the ground. Your
7,000 an hour means you are driven
straight up to the aircraft stairs, there is no
customs, no security, and at the other end,
the private channels are all red carpets and
smiling professionals, ready to whisk your
passport away for a quick inspection, and
you straight into a waiting limo.
So next time you have to fly direct from
Douala to Novosibirsk, and only
Montecristos and toro sashimi will do, you
know who to call. www.vistajet.com.
Fleet type: Bombardier, Learjet, Challenger,
Global and Global Express.
Price: Depends on hours required and plane
selected. Range: 7,000-18,000 an hour.
Routes: Europe, Middle East, Asia Pacific,
Russia, West Africa and US East Coast. 75
per cent of flights are based in BRIC coun-
tries.
Packages: There are two: program or on
demand. With program, you buy a
Bombardier jet from VistaJet and lease it
back to VistaJet to manage. With on
demand, you buy an agreed number of fly-
ing hours per year and have guaranteed
availability.
FAST FACTS | VISTAJETS
pari s
mi l an
mexi co cit y
young mexi can des i gner s have
s omet hi ng t o s ay about t hei r wor k.
and we hear t hem l oud and cl ear.
_ny l on ma g a z i ne
me x i c o c i t y
Food
DC's West End lies within an easy
stroll of the White House, so there are
plenty of opportunities for "power din-
ing" among the area's officials, lobby-
ists - and visitors alike. The Old Ebbitt
Grill's Oyster Bar is rightfully
renowned, has an authentic Victorian
interior, and being two blocks from
the White House was a favourite of
presidents past.
For something a bit more Southern
in flavour, Georgia Brown's is a local
favourite, serving Carolina gumbo and
the kind of southern-fried chicken that
doesn't come out of a bucket. The
Lafayette Room at the Hay-Adams
Hotel has an astounding view across
Lafayette Park to the White House.
Nearby Dupont Circle has plenty more
upscale eateries to choose from, and
choices more diverse than steak or
ribs.
If suits and silverware don't appeal,
head down to the Waterfront for a
fish-straveganza at the Maine Avenue
Fish Market, a genuine DC tradition.
The Potomac River empties into the
Chesapeake Bay so you can expect a
host of fantastic shellfish both fresh
and cooked. Seafood restaurants line
the wharf, meaning you can snack on
freshly caught crabs while yachts
cruise along in front of the DC skyline.
The nearby Cantina Marina is hugely
popular on the weekends, serving up a
beach bar menu and atmosphere.
Alternatively, inside the Mandarin
Oriental is CityZen, run by acclaimed
chef Eric Ziebold and renowned for
its world-class menu.
After a hard day's sightseeing on
the National Mall, The Source, a
Wolfgang Puck creation, at the
Newseum is a welcome respite. Belly
up to the bar for Asian-inspired nibb-
bles or feast with friends on mouth-
watering entrees. Anything with
pork, duck or lamb is a winner. After
something more casual? You might
be tempted to try one of DC's indige-
nous hot-dogs, the half-smoke. This
half-pork-half-beef chimera is served
smothered in onions and chilli sauce,
and is sold by most of the street food
stands. Locals know the real deal can
be found at Ben's Chili Bowl on
vibrant U Street, the centre of a
neighbourhood that has become a
hotspot for Ethiopian cuisine and for
nightlife.
If you're visiting the eastern side
of the Mall, consider a walk through
the residential splendour of Capitol
Hill towards Barracks Row, a street
unfrequented by the common trav-
eller, and full of eateries buzzing with
political and gastronomic discourse.
Caf 8 is a fixture for the locals,
offering celebrated Turkish food that
won't break the bank. On the other
side of the U.S. Capitol is DC's Union
Station, which is a fine piece of archi-
tecture in itself but features B.
Smith's, a soul food favourite for vis-
iting celebrities and politicos.
Nightlife
Unsurprisingly, downtown DC is pop-
ulated with working stiffs who long
at the end of the day for a beautifully
mixed cocktail. Bartending has
become an artform in the nations
capital and theres a lot of choice.
From the fanciful Salt Air
Margaritas at modern Mexican
Oyamel to the made-to-order mixolo-
gy at The Passenger, it is easy to
drink ones way up 7th Street NW
between E Street and Massachusetts
Avenue, and hard to stop after just
one or two.
DC is also home to a fantastic jazz
scene, where as a boy, Duke Ellington
earned his chops on the numerous
jazz bars of U Street. This is where
Washingtonians come to relax in
bars just the right side of trendy, and
listen to fantastic live music.
America loves its microbrewing, and
the ChurchKey beer house on 14th
Street boasts 555 labels (with 50 on
draft). The place is packed during
happy hour.
As for music clubs near U Street,
the city's most popular is the 9:30
Club (whose doors open at 6 p.m.)
which scores world-class acts on a
nightly basis. At Marvin, a Belgian-
American restaurant inspired by
Washingtons favourite soul son
Marvin Gayes time in Europe, dinner
recedes into a DJs beat. The rooftop
lounge attracts a chic set. Former
(and present) Marxists will appreci-
ate Busboys & Poets, a caf-bar that
hosts regular beatnik recitals and
political "discussions". However, it's
jazz where this neighbourhood really
excels, and the historic Bohemian
Caverns in a basement on 11th Street
features local jazz, genuine quartz
walls and tables of petrified wood.
If all that jazz isn't to your taste,
DC has a vibrant bar and club scene
split into two major sectors: one is
populated by the well-heeled locals,
the other by the younger alternative
crowd. Dupont Circle is regarded as
the centre of DC nightlife, with
numerous bars and clubs leading
directly off the Circle and plenty
more in the streets surrounding it.
Bars like the Big Hunt with its
safari theme and open-air rooftop
cater to the singles market, while the
Lucky Bar is the requisite Irish pub
full of college kids and yuppies. The
Eighteenth Street Lounge, owned by
electronica act Thievery Corporation,
hosts a weekend bossa-nova shake-
down, while Ozio purports to be a
cigar bar but actually turns out to be
a swanky four-level dance club.
The antidote to all this swank is to
be found in Adams-Morgan.
Treasures such as Bourbon (with its
150-whiskey selection) and the
aquatic Reef bar are not difficult to
dig up. When youre ready to dance,
Habana Village offers salsa lessons
all night and mojitos to cool you
down.
Lifestyle | Washington DC
in assocation with
Lifestyle
21
Culture
Shopping
DC is, when it comes down to it, a glori-
ous fabrication. Constructed as a federal
oasis on the banks of the Potomac, free
from the influence of state government,
full rein for its urban planning was given
to up-and-coming architect Pierre
L'Enfant. What gradually took shape
was a living national monument, a city
that revolved around, and drew its bus-
tle from, the process of government.
The heart of this conceit is the
National Mall, a two-mile-long stretch of
inner-city parkland featuring not only
the centre of government, but the coun-
try's most prestigious cultural treasure
chest, the Smithsonian Institution. Not
one museum but a sprawling collection
of art, natural history, technology and
anthropology, the entire east end of the
Mall is taken up with museums display-
ing its collection, all of which are free to
enter.
Like Berlin's Museum Island or the
Museumsplatz in Vienna, the
Smithsonian Institution is one nations
assertion of cultural sovereignty. Its
architecture is suitably grandiose, and
its collections suitably global: from the
National Museum of Natural Historys
notorious Hope Diamond to the National
Gallery of Art's priceless Vermeers,
Monets and da Vinci. The National Air
and Space Museum catalogues
American success with the Wright
brothers' original 1903 Flyer, and the
Apollo 11 command module.
Not entirely unfairly, the Americans
are known for their whole-hearted patri-
otism, and with a collection of national
monuments like those that make up the
western end of the National Mall, it's
easy to see why. They paint a poetic pic-
ture of sacrifice, unity and idealism, and
serve as a breathtaking introduction to
the American psyche. Recommended is
a wander around the monolithic carved
statue of President Lincoln that watches
over the Reflecting Pool and the obelisk
of the Washington Monument beyond to
the seat of government.
Just north of the Mall is Penn Quarter,
hub of tourist activity and location of
many a historic site including Ford's
Theatre, where Lincoln was assassinated
and performances of classic American
plays continue to this day. It also con-
tains a number of DC's more progressive
museums, chief among them The
Newseum which over seven floors cata-
logues the development of the press in
America from the basic freedom-of-
speech rights enshrined in the
Constitution on display two blocks
away at the National Archives.
Highlights include a gallery of Pulitzer
Prize-winning photographs, an interac-
tive newsroom and a gallery of the day's
international newspaper front pages.
For a more artistic experience, head
to Adams-Morgan. The DC Arts Center
hosts a rotation series of high-calibre
local artists, while the surrounding
streets are covered in murals and fea-
ture plenty of import shops and record
stores to browse around.
Leave your shoulder pads at home
along with the misconception that
Washington DC doesnt have great
shopping. So 80s. These days
there are several neighbourhoods
all reachable by the citys clean
and efficient Metro system that
offer distinctive retail therapies.
Choose from teeny boutiques,
funky galleries, American classics
and outlets. In Georgetown, small-
er shops, from internationally
known retailers to one-of-a-kind
boutiques dot the main thorough-
fairs. Not only will you find stan-
dard preppy fare such as
Abercrombie & Fitch and Ralph
Lauren, but a burgeoning selection
of upmarket designer and vintage
stores along M Streets at
Wisconsin Avenues NW.
For some funkier shopping, 18th
St in Adams-Morgan hosts a boho
selection of import shops (stocking
handmade Tibetan arts and crafts),
vintage boutiques (such as Meeps)
and combination record and book-
stores. This is the vibrant hub of
the city's youth, with the occasion-
al mural brightening the area. The
streets around Logan Circle have
recently carved out a name for
themselves as home to DC's small-
scale boutiques, particularly U
Street with its quirky collective-run
jewellery shops and eco-friendly
fashion houses. Around here you
will also find the city's high-end
contemporary art scene, full of gal-
leries hoping to sell you work by up
and coming DC artists.
DC is indeed a fine destination
for the prospective art buyer.
Georgetown also plays host to a
number of successful contempo-
rary galleries, including the Anne
C. Fisher Gallery, in which the
owner also practices her main
occupation, psychotherapy. But
for an altogether different experi-
ence, DC's Eastern Market is held
up on Capitol Hill and features a
rotating array of antique dealers,
and local artists, as well as the
usual produce and packed lunches
and a weekend Farmers' Market.
Friendship Heights claims the
most robust mix of high-end
department stores and bargain
retailers.
Fly direct with Virgin Atlantic
into Washington Dulles
International Airport from
399 for departures between
25 October and 16 December
2011 or between 25 December
2011 and 31 March 2012
when booking on or before
31 October 2011. See
virginatlantic.com to book and
for full terms and conditions.
Follow us: @virginatlantic
and share your Washington DC
tips with #toptipDC
Lifestyle
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ORIGINS OF US
BBC2, 9PM
Anatomist Alice Roberts charts how
the hunt for food down the ages has
affected the way people look and
behave today.
CORONATION STREET
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John watches from afar as Fiz is led
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The Big Bang Theory 1.05am
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2.40amMeet the Parents 3.05am
Make It or Break It 3.50amRules
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7pmAmerica: The Story of the US
8pmStorage Wars 9pmPawn
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7pmiPod Revolution 8pmIgenius:
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6pmBBC News
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hosted by Jeremy Vine.
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Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
4 Hard drink
originating in
Russia (5)
7 Come into
possession of (7)
8 Rises upward
into the air (5)
10 Contend (5)
12 Her (3)
13 Doctor (9)
17 Excessive, extreme
(inits) (3)
19 Cockeyed (5)
22 Eye covering (5)
23 Out of the
ordinary (7)
24 One sixteenth of
a pound (5)
DOWN
1 Strong, lightweight
wood (5)
2 Flatten (6)
3 Osculates (6)
4 ___ Lynn, wartime
songstress (4)
5 Medicine (4)
6 Britains only native
venomous snake (5)
9 Piece of poetry (5)
11 Indian side dish of
yogurt and chopped
cucumbers (5)
14 Metallic reddish-
brown element (6)
15 Accomplish (6)
16 Fruit with aromatic pulp
and a large seed (5)
18 Large marine snail (5)
20 Oven for ring pottery (4)
21 Sagacious (4)
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R E C E N T I C
O L H E R N I A
L O R E A S M
L V I G N I T E
S O B E R R D L
O N E T I M E
A L I M A R C H
P L I A N T T U
A V A T A P S
R E A D E R E S
T R E E R I L Y
9 8 2 1 9 5
1 4 9 8 7 3 6 2 5
8 7 2 7 4 1
8 5 6 9 1 3
1 2 4 7 6 8 9 5
4 1 8 9 4 6 3
2 3 1 4 5 7 2 1
5 9 2 5 1 4
1 7 2 6 5 8
4 8 3 7 2 6 9 5 1
9 7 4 8 6 9
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
WINEGLASS
Lifestyle | TV&Games
CITYA.M. 24 OCTOBER 2011 36
ENGLAND captain Alastair Cook
insists he is still enjoying lead-
ing the one-day side, despite
a fourth successive defeat
in India that leaves the
tourists facing a white-
wash.
Half-centuries from
Virat Kohli (right) and
Suresh Raina propelled
India to a six-wicket win
that they wrapped up with
10 overs to spare, despite feisty
bowling from Steven Finn (3-45).
England batted first but could only
rack up 220, Tim Bresnan top-scoring
with 45 from 45 balls, before being
dismissed with 23 deliveries remain-
ing leaving Cook staring at a 4-0
deficit.
Ive had better couple of weeks,
I wont lie to you, he said.
But you know when you
take over a young side its
never always going to be
that straightforward.
Its certainly a chal-
lenge, and one that I
am strangely enjoying.
Cook had to defend
Finn, who had strong
words with Raina after dis-
missing him. Id much
rather the side play on that sort of
edge than sit back and accept fate,
he added. Its desperation to win.
FULHAM manager Martin Jol last
night refused to blame Bobby Zamora
for missing a glaring open goal after
the Cottagers paid a hefty price for
the strikers late blunder.
With the score at 1-1 in the 89th
minute, Zamora rounded Everton
goalkeeper Tim Howard yet aston-
ished the crowd by chipping the ball
over the unguarded goal.
Everton went straight down the
other end and took the lead through
Louis Saha, and Fulhams misery was
compounded when Jack Rodwell
hammered a third in injury time.
Theres nothing you can say to
Bobby hes sick and were all sick,
Jol said. They play together and they
lost together. We should have won
this game and we didnt.
The visitors had taken the lead in
the third minute of the game, with a
curling 30-yard drive from summer
signing Royston Drenthe.
Fulham drew level midway
through the second half, substitute
Bryan Ruiz netting with an auda-
cious chip from 12 yards. Yet his
effort failed to pay off for Fulham,
whose defeat leaves them fourth
from bottom in the Premier League.
Cook puts on brave face
as India near whitewash
Jol forgives Zamora after
Toffees punish late miss
ARSENAL manager Arsene Wenger
insists the Gunners are not a one-
man team despite again relying on in-
form striker Robin van Persie, this
time off the bench, to claim all three
points.
Van Persie, who was rested from
the start and has now scored 25 goals
in 26 Premier League games this year,
netted twice late on after Stokes
Peter Crouch had cancelled out
Gervinhos opener for the home side.
I dont have that feeling at all,
said Wenger to suggestions Arsenal
were too reliant on the Dutchman.
When you want to be a team with
quality you always have a player who
stands out and who gets on the end of
things. We had Thierry Henry before.
Robin has exceptional quality and so
you get these questions.
Stoke manager Tony Pulis said Van
Persie changed the game when he
replaced Marouane Chamakh after
66 minutes, and Wenger revealed he
almost left his talisman out of the
squad altogether due to muscular
tightness.
Winger Gervinho put the Gunners
on their way to a sixth win in seven
games when he ran onto midfielder
Aaron Ramseys chipped through-ball
and prodded past Asmir Begovic in
the 27th minute.
Crouch equalised seven minutes
later, however, tapping in on the line
after Arsenal failed to deal with a
Stoke free-kick.
Enter Van Persie, who twice fin-
ished ruthlessly after Gervinho scam-
pered to the goal-line and cut back to
the six-yard area, lifting the Gunners
to seventh in the table.
Wenger: Arsenal not reliant on Robin
TOTTENHAM boss Harry Redknapp
urged Blackburn fans to rally behind
Steve Kean after deepening the
embattled managers troubles with
victory at Ewood Park.
A fine goal in each half from Rafael
van der Vaart eclipsed Mauro
Formicas equaliser, lifted Spurs to
fifth and kept Rovers bottom of the
Premier League on goal difference.
Blackburn supporters staged
protests calling for Kean to be sacked
for the third successive home game,
but Redknapp lent support to his
opposite number.
The fans have got to stick with
him, he said. If the players didnt
like him [Kean], they wouldnt have
been playing like they did today. I
think its unfair.
Van der Vaart slotted the first on 15
minutes after Kyle Walkers maraud-
ing run and cut-back, only for
Formica to volley level into the roof of
the net before the half-hour.
The Dutchman had the final say,
however, capitalising on a ricochet on
the edge of the penalty area to bend
home a first-time effort left-footed.
Spurs pile
misery on
Rovers boss
CHELSEA captain John Terry last
night emphatically denied allega-
tions he made racist comments to
QPR defender Anton Ferdinand in yes-
terdays explosive west London derby.
Blues stars Didier Drogba and Jose
Bosingwa were both sent off in a
match decided by Heidar Helgusons
first-half penalty, and manager Andre
Villas-Boas could face punishment
after admitting confronting referee
Chris Foy in a very aggressive man-
ner at full-time.
Television footage of Terry in a
heated exchange with Ferdinand
later sparked speculation of a racist
outburst, but the England skipper
last night hit back, saying the matter
had been a misunderstanding.
I thought Anton was accusing me
of using a racist slur against him,
said Terry. I responded aggressively,
saying I never used that term. Id
never say such a thing, and Im sad-
dened that people would think so.
Ive known Anton for a long time and
spoke to him after the game and
there was no problem between us.
Villas-Boas was furious after his sec-
ond Premier League defeat and
blamed Foy, who dismissed Drogba
for a two-footed lunge and Bosingwa
for fouling Shaun Wright-Phillips as
he broke clear. The ref was very, very
poor, and it reflected in the result,
Villas-Boas said. I spoke to him at the
end and I was very aggressive to him.
I dont care if he is okay or not.
The Football Association could
investigate the remarks, while Chelsea
are likely to face a charge of failing to
control their players, triggered by two
red and seven yellow cards.
QPR manager Neil Warnock
praised Foy after his first home
league win of the season, which he
called the greatest day of my career.
He said: I am so pleased that we
had the referee because a lot would
have been conned.
Terry denies racism
as AVB rails at ref
BY FRANK DALLERES
CRICKET
Sport
SPORT | IN BRIEF
Donald tops PGA money list
GOLF: Englands Luke Donald last night
won the PGA Tour money list, keeping
him on course to become the first player
to top the lists in American and Europe
in the same year. World No1 Donald
notched six birdies in a 64 as he over-
hauled a five-shot overnight deficit to
win the Disney Classic in Florida. The
33-year-old currently leads the
European money list by more than 1m
with eight events left.
Bears cling on at Wembley
AMERICAN FOOTBALL: Chicago Bears
saw off a late Tampa Bay Buccanneers
recovery to win the annual NFL match
at Wembley 24-18. Touchdowns from
Matt Forte, Roy Williams and Marion
Barber put the Bears in charge before
Kellen Winslow and Dez Briscoe gave
the Buccanneers hope in the fourth
quarter. It was a second defeat of the
day for Tampa owners the Glazers, after
Manchester Uniteds defeat to City.
Farrell shines for Saracens
RUGBY UNION: Fly-half Owen Farrell
scored 28 points as Saracens earned a
bonus-point 43-20 win over Exeter
Chiefs in the LV= Cup yesterday at
Vicarage Road. Elsewhere London Irish
beat Newcastle 39-23 and Scarlets won
30-3 at Cardiff Blues.
Golden finish to Euros for Britain
CYCLING: Victoria Pendleton won kierin
gold as Britain finished track cyclings
European Championships in style. Matt
Crampton completed a double by win-
ning the mens keirin, while Ed Clancy
and Laura Trott won omnium golds.
Results
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email sport@cityam.com
FOOTBALL
3
1
ARSENAL
STOKE CITY
FOOTBALL
1
2
BLACKBURN
TOTTENHAM
FOOTBALL
1
3
FULHAM
EVERTON
BY JULIAN HARRIS AND FRANK DALLERES
FOOTBALL
1
0
QPR
CHELSEA
Heidar Helgusons penalty decided a fiery derby Picture: ACTION IMAGES
Sport
38
ENGLAND captain Lewis Moody may
have called time on his own Test
career but the flanker insists under-
fire manager Martin Johnson must
not follow him out the door.
Moody yesterday announced that
the World Cup, which ended in the
disappointment of a quarter-final
defeat to France, would be his last
action for the Red Rose.
But the 33-year-old is adamant
Johnson has the backing of the entire
squad to lead the team into the next
tournament, which England will host
in 2015.
There is not a single member of
the World Cup squad who does not
believe Johnno should stay on and fin-
ish the job, just as Clive Woodward
did after 1999, he said.
Moody, who has battled increasing
injury problems, will now focus on
extending his club career with Bath.
Johnson hailed the bravery of
Moody, who played in two World Cup
finals during a 71-cap Test career.
He said: Lewis has been a great ser-
vant to English rugby and has literally
put his body on the line more times
than he can probably remember.
Moody retires
from Test stage
RUGBY UNION
Lewis Moody Picture: REUTERS

On top of the
world at last:
All Blacks lift
World Cup
Much-improved France take hosts all the way as
Donald and Woodcock prove unlikely heroes
NEW ZEALANDS unlikely hero
Stephen Donald revelled in answer-
ing his critics after the fourth choice
fly-halfs decisive penalty ended the
All Blacks 24-year wait to lift the
World Cup.
Donald, who had been whitebait
fishing and drinking beer when
handed a late call-up two weeks ago
amid an injury crisis, landed the
winning penalty in the second half
of a titanic match. That put the hosts
8-0 ahead, following an early try
from veteran prop Tony Woodcock,
and although France captain Thierry
Dusautoir mustered a converted try
to set up a nervy finale, the All
Blacks survived for Richie McCaw to
hoist the trophy (above).
Defeat was hard on Les Bleus, who
belied their status as overwhelming
underdogs with their best perform-
ance of the tournament, and their
last under coach Marc Lievremont.
But it was vindication for Donald,
who entered the fray after 34 min-
utes following an injury to Aaron
Cruden, who himself began the
competition behind Dan Carter and
Colin Slade in the pecking order.
There are people out there who
undermined my status as an All
Black, he said. To get the chance to
prove that I am an All Black is good.
I think a World Cup final is a pretty
good place to start.
New Zealand have repeatedly
failed to translate their global domi-
nance into trophies, and head coach
Graham Henry admitted the result
would finally bring him peace. He
added: This thing was about win-
ning, and the guys have won the
World Cup. That is outstanding.
Eden Park fretted during a tense
final half-hour as the All Blacks
relied on some last-ditch defending
to deny France another try and a
huge upset.
McCaw said: It wasnt very pretty,
but it came down to how much
desire and courage the boys had. We
probably didnt play our best, but
we played good enough.
France, who have now lost three
World Cup finals, demonstrated
their appetite for confrontation
when they marched, arm-in-arm
and in an arrow formation, towards
the All Blacks as they performed
their pre-match haka.
Lievremont was left tremendous-
ly sad, but tremendously proud,
adding: We said the All Blacks were
the best team in the world. Today,
the French team was great.
BY FRANK DALLERES
RUGBY UNION
8
7
NEW ZEALAND
FRANCE
SHELLSHOCKED Manchester United
manager Sir Alex Ferguson reflected
on the worst result in my history,
ever after his side were subjected to
their heaviest home defeat since 1955
by their bitter rivals.
Two goals apiece from Mario
Balotelli and Edin Dzeko plus strikes
from Sergio Aguero and David Silva
humiliated the 10-man Premier
League champions and extended
Manchester Citys lead at the top of
the table to five points.
Darren Fletchers fine curling goal
brought United back to 3-1 and gave
them hope of a late fightback, but the
second-half sending-off of Jonny
Evans left them exposed and the visi-
tors scored three more in injury time.
It was our worst ever day, said
Ferguson. Its the worst result in my
history, ever. Even as a player I dont
think I ever lost 6-1. I cant believe the
scoreline.
City manager Roberto Mancini
refused to gloat, insisting United
remained one yard above us, still
despite a victory that removed any
lingering doubts that the club are
now serious title challengers.
He added: I think we can only
change this after we win the title in
the end. After, maybe it will
be different, but now
United are better
than us.
Talk of Balotelli
dominated the
build-up, after fire-
fighters had to tack-
le a blaze at the
Italians home early on
Saturday morning caused by fire-
works being lit in the bathroom.
But Mancini resisted calls to omit
the flamboyant youngster, instead
starting him, and Balotelli repaid
him with two goals that effectively
settled the contest before Evans red
card turned it into a free-for-all. His
first came on 22 minutes when the
outstanding Silva cut back to the
edge of the area, where a lurking
Balotelli nonchalantly steered a low
shot first time into David de Geas far
corner. In a nod to his history of con-
troversy, Balotelli celebrated (below)
by revealing a T-shirt with the slogan
Why always me? and sure enough
it was
him again wreaking havoc on United
after the break.
First, Evanss foul on him brought
the red card and then, on the hour,
he arrived at the far post to tap in
James Milners superb drilled cross
from the right.
When Aguero scored an almost
identical third, from a Micah
Richards delivery this time, it was all
over, although Fletchers effort
on 81 minutes hinted at
more goals to come.
The floodgates
opened as the final
whistle loomed,
substitute Dzeko
tapping in before he
and Silva ruthlessly
finished counter-attacks.
MOTORSPORT suffered its second
high-profile fatality in the space of
eight days yesterday when Italian
motorcycling star Marco Simoncelli
died following an accident at the
Malaysian Moto GP.
Simoncelli, who was 24, suffered a
heart attack after two other drivers
collided with him as he skidded
across the track, knocking off his hel-
met. The race was abandoned.
The incident comes amid height-
ened concern over the safety of
motorsport, following the death of
British IndyCar driver Dan Wheldon
in Las Vegas seven days earlier.
Moto GP death
heightens fears
over race safety
MOTO GP
Marco Simoncelli Picture: GETTY

Balotelli sparkles as ruthless City inflict
Uniteds worst home defeat for 56 years
BY FRANK DALLERES
FOOTBALL
1
6
MANCHESTER UTD
MANCHESTER CITY
Man City 9 8 1 0 33 7 25
Man Utd 9 6 2 1 26 12 20
Chelsea 9 6 1 2 20 10 19
Newcastle 9 5 4 0 12 6 19
TOP FOUR
TEAM PLD W D L F A PTS
39
BEATEN BLUES SEE RED
BOSINGWA AND DROGBA SENT OFF IN
FIERY WEST LONDON DERBY: PAGE 37
Y
OU cant contemplate how big
an achievement it is to win a
World Cup with your fourth
choice fly-half. Not only have
New Zealand been the best team for
the last four years and at this tourna-
ment, they have also had to overcome
so many setbacks. They deserve all
the credit that they get.
It was a courageous effort from
people under immense pressure.
There have been, in my opinion, bet-
ter All Black sides over the last four
years than this one. But the fact they
ended up playing with their fourth
choice fly-half had a massive impact
on their game.
Dan Carter is the best No10 in the
world and when he played in the first
two games New Zealand looked mag-
nificent: incisive and effective. But
they lost him, then another kid and
then another kid, and were left with
Stephen Donald (below) in the final,
who actually ended up playing really
well.
GOT AWAY WITH MURDER
Yet France were the better team yes-
terday, which is an amazing thing to
say. Beforehand I gave them no
chance; I thought they were dreadful
in all areas. But they proved me com-
pletely wrong, summoned their best
performance in a very long time and
could have won the World Cup had a
couple of things gone their way.
They did not get much help from
the referee. I expected France to lack
discipline at the breakdown but they
were excellent, while the All Blacks
got away with murder, so Les Bleus
did not get reward for the risks
they took.
Its been a successful World
Cup but now the players return
to their clubs, although I have
been delighted that Saracens
are second in the
Premiership after six games
with so many players away. This is
when our youth policy and rotation
system is very beneficial. People know
they are full-blown squad players, not
just back-up until others return, and
thats important as yesterdays
important LV= Cup win over Exeter
showed.
Brendan Venter is technical director of
Saracens, who play Sale Sharks in
the Aviva Premiership at Vicarage
Road on Sunday 6 November,
kick-off 3pm. See
www.saracens.com
or call 01727
792800.
France better on day but
all credit to New Zealand
RUGBY UNION COMMENT
BRENDAN VENTER
KEY MOMENTS | RUGBY WORLD CUP FINAL
France show they wont be
rolled over by marching
towards and then staring
down the New Zealand players
as they perform the pre-match
haka (right). The move could
earn Les Bleus a fine for cross-
ing the half-way line.
Picture: GETTY
The All Blacks take an early
lead with a well-executed line-
out, Jerome Kaino catching
and feeding Tony Woodcock to
burst through and touch down
(left). But scrum-half Piri
Weepu, who struggled with
his kicking throughout the
final, fails to convert.
Picture: ACTION IMAGES
Frances inspirational captain
Thierry Dusautoir drags the
underdogs right back in it and
sets up a nervy final half-hour
when he scores after sus-
tained pressure. Francois
Trinh-Duc converts to make
the score 8-7.
Picture: ACTION IMAGES
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