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Issue 1,146 Wednesday 2 June 2010
CRUNCH TIME
▲
INSURANCE
BY OLIVER SHAH
PRUDENTIAL’S future was hanging
in the balance last night after its
dream of taking over AIA died,
drawing a line under what one
shareholder called “an unprece-
dented shambles”.
The insurer is expected to tell the
London stockmarket this morning
it will abandon its calamitous
$35.5bn (£25bn) pursuit of AIG’s
Asian operation. Following a series
of mishaps that frustrated
investors, Prudential’s bid was
effectively torpedoed when AIG’s
US government backers refused to
shave $5bn from AIA’s price in 11th-
hour haggling.
Sources close to Prudential said it
would pull out of the transaction
rather than face the humiliation of
being voted down by more than 25
per cent of its shareholders at a
meeting on 7 June.
According to one estimate, the
beleaguered blue chip will now
have to pay up to £500m in break
fees and advisory costs – the equiva-
lent of its 2009 dividend.
Chief executive Tidjane Thiam
and chairman Harvey McGrath
called a lengthy board meeting yes-
terday as Prudential’s shares soared
on news of the failed talks with the
US Treasury. It is understood nei-
ther man is close to resigning even
though some shareholders want
their scalps.
Robin Geffen of Neptune Invest-
ment Management, who led a cam-
FTSE 100 ▼5,163.30 -25.13 DOW ▼10,024.02 -112.61
&&&#('$
BUSINESS WITH PERSONALITY
CAPELLO AXES WALCOTT
FROM WORLD CUP SQUAD
ENGLAND FOOTBALL SHOCK P32
Prudential boss Tidjane Thiam (left) and chairman Harvey McGrath are under pressure to quit Pictures: NEWSCAST, GETTY
paign against the AIA tie-up, said:
“It’s a matter of honour. Given
what’s happened it’s inconceivable
they can continue. This is a sham-
bles on an unprecedented scale.”
One large shareholder, who
asked to remain anonymous, said
McGrath’s position was more pre-
carious than Thiam’s. “The chair-
man has let himself down. He
should have kept the new chief in
check and warned him of the
potential pitfalls. This is a fiasco.”
NASDAQ ▼2,222.33 -34.71
*
www.cityam.com
M&G boss Michael McLintock and
former Prudential head Mark
Tucker were two names being
bandied about for the post of inter-
im chief executive. But some
investors called for reflection
before any management changes.
A second shareholder said:
“Whether senior management
think they have lost so much of the
shareholders’ support they can’t
continue, I don’t know. It’s going to
be a personal decision.”
£/$ 1.47 ▲+0.02 £/¤ 1.20 ▲+0.02 ¤/$ ▼1.22 -0.01
 !"

# 
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Prudential shares gained 6.3 per
cent to 575.5p on hopes of a break-
up bid for the company.
Analysts at BNP Paribas put out a
note remarking the insurer could
be in play, echoing previous
rumours of interest from Clive
Cowdery’s Resolution and Aviva.
However, one investor said the
outcome was far from obvious. “It’s
the wrong time in the cycle to be
breaking up the Pru,” he said.
ALLISTER HEATH: P2; MORE: P5
!"
www.cityindex.co.uk
AUDI’S NEW
ALLROAD
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A VERY SPECIAL
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FBI set to
probe BP’s
oil disaster
▲
ENERGY
BY EMMA SADOWSKI
PRESSURE on BP mounted last night
as the US attorney general said he
would launch a criminal and a civil
investigation into its massive Gulf of
Mexico oil spill.
Eric Holder said the federal agen-
cies, including the FBI, would partici-
pate in the probe and warned: “If we
find evidence of illegal behaviour, we
will be forceful in our response.”
The investigation came as BP’s
shares suffered their worst one-day fall
for 18 years yesterday, hit by news that
the oil giant’s latest efforts to plug the
leak over the weekend had failed.
BP’s shares closed 13 per cent lower
at 430p yesterday. The shares have now
lost 34 per cent of their value since the
accident started, wiping £40bn off BP’s
market capitalisation.
Analysts warned cleaning up the
spill, still leaking up to 19,000 barrels
of oil into the Gulf per day, could cost
over $20bn (£13.6bn), which, together
with the shares’ collapse left the com-
pany vulnerable to a possible
takeover. BP said yesterday that the
cost of its failed bids to stem the flow
had risen to $990m as it launched
new measures to cap the leaking oil
using remotely operated vehicles.
Concerns that BP’s latest move
could fail and make things worse per-
sist as pressure from the US govern-
ment on chief executive Tony
Hayward continues to escalate.
One shareholder said: “The pres-
sure on Hayward goes up with every
step.”
Certified Distribution
5/04/10 - 2/05/10 is 106,285
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 2 News
Why Pru’s chair and CEO must resign
EDITOR’S LETTER
ALLISTER HEATH
WHAT a mess. Prudential’s entire strat-
egy lies in tatters, its supposedly trans-
formative $35.5bn bid for AIG’s Asian
operations all but over. The firm’s last-
ditch attempts at cajoling the US gov-
ernment, AIG’s majority shareholder,
into cutting AIA’s price never got off
the ground. The deal’s demise is a vic-
tory for shareholders and London’s
long-suffering institutional investors,
who have at last had the guts and fore-
sight to block a value-destroying mega-
deal; but it is a bitter, personal
humiliation for Tidjane Thiam, the
Pru’s chief executive, and Harvey
7th Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7248 1729
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Features Editor Jeremy Hazlehurst
Art Director Darren Soulsby
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Deputy Sales Director Harry Owen
Head of Distribution Nick Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
OPTIONS TRADING REACHES RECORD
VOLUMES
Options trading volumes in the US
soared to a record last month as mar-
ket volatility and the “flash crash”
added to secular growth in the indus-
try. Nearly 406m listed options con-
tracts were traded in May, according
to figures released by the Options
Clearing Corporation, up 29 per cent
from May 2009.
GHOSN SEES RECORD YEAR FOR
CARMAKERS
The global car industry is poised for a
rebound to a record year in 2010 on
the back of strong demand in emerg-
ing markets, the chief executive of
Renault and Nissan has forecast.
Carlos Ghosn said the global industry
should produce and sell 70m light
vehicles in 2010, with most of the
growth coming outside the US,
Europe and Japan.
McGrath, the firm’s chairman. The
idea of turning the Pru into an Asian
powerhouse – an HSBC for the insur-
ance world – wasn’t a bad one but the
price of the deal was ludicrously high.
A business is owned by its sharehold-
ers, not its managers; unfortunately, in
this case as in so many others, a hubris-
tic, empire-building CEO started to act
as if he owned the place. While Thiam
is a charming, self-effacing and highly
intelligent man, some of his team con-
ducted themselves in an arrogant and
often incompetent manner, angering
shareholders as well as the Financial
Services Authority (FSA), which forced
the Pru into an astonishing climb-
down over capital requirements.
The FSA was clearly desperate to
establish that it had changed since the
bad old days when it allowed RBS’s cap-
ital to fall to rock-bottom after its pur-
chase of ABN Amro – but Thiam
should have seen this coming and
been more respectful of the regulator’s
authority. The fact that he was plan-
ning to accept a directorship at Societe
Caja Madrid
seeks €3bn
EUROZONE CRISIS
▲
BY STEVE DINNEEN
SPAIN’S banking woes continued yes-
terday after its second-largest savings
bank Caja Madrid is understood to
have sought up to €3bn (£2.5bn)
from a government rescue fund.
Caja Madrid entered preliminary
merger talks with five regional sav-
ings banks last week. But the Spanish
lender released a statement saying
the reports it will seek government
funds are “speculation”.
The rescue fund is set up to pro-
mote mergers among the country’s
network of unlisted regional banks.
The bank’s misery was compoun-
ded when its ratings were placed on
CreditWatch negative by Standard &
Poor’s, which expects “pronounced
pressure” on its profits this year.
Following the bailout of savings
HALABI’S £150M PICCADILLY ESTATE
PUT UP FOR SALE BY RECEIVERS
One of the most exclusive addresses
in London has been put on sale for
more than £150m after receivers took
control of a 1.3-acre site on Piccadilly
owned by the family trusts advised by
Simon Halabi, the property mogul.
The buildings were once at the centre
of plans by Halabi to create the UK’s
most exclusive six-star hotel and club.
Allsop and Jones Lang LaSalle have
been appointed to sell the Piccadilly
estate.
SHAN QUITS TPG TO START ASIA FUND
TPG Capital’s leading China dealmak-
er is quitting as a partner of the US
private equity group, becoming the
latest high-profile investor to launch
an Asia-focused investment fund.
Weijian Shan established TPG as a
pioneer in foreign private equity
investing in China and Asia and led a
string of lucrative deals after joining
the firm in 1998, including its buyout
of Shenzhen Development Bank.
Generale in the middle of all of this
was the last straw even for his support-
ers, who couldn’t understand how he
could have been so badly advised.
Given the turmoil in which the Pru
has now been plunged and the dra-
matic thumbs down given to its stra-
tegy, the only right and proper
outcome is for Thiam and McGrath to
resign, preferably immediately.
Michael McLintock, the excellent
boss of the Pru’s M&G Investments
unit, should become the interim (and
possibly permanent) chief executive,
while James Ross, the senior non-exec-
utive director, should become acting
chairman. Their mission should be to
ensure that the Pru pulls through the
next few weeks, to hammer out a
robust strategy for growth and to
mend fences with institutions.
Perhaps more than anything else,
this sorry affair has seen a rare tri-
umph of buy-side firms – fund man-
agers and others investors, aided by
brave, independent research houses
such as Hong Kong’s CLSA – against a
bank CajaSur last month, the Bank of
Spain is pushing harder for mergers
among small savings banks, whose
credit quality has deteriorated
sharply due to heavy exposure to
Spain’s ailing property sector.
But analysts have already questioned
the cost-saving potential of a merger
between institutions with little scope
for branch closure or staff cuts.
Fellow Spanish bank Caja Avila said
it is in talks for a virtual merger with
Caja Madrid, Caja Insular de
Canarias, Caixa Laietana, Caja
Segovia and Caja Rioja.
Miguel Fernández
Ordóñez, president of
the Bank of Spain, is
pushing for regional
lenders to merge.
VIVENDI’S MASTER OF THE UNIVERSE
LANDS IN PARISIAN COURT
Jean-Marie Messier, the dashing
Frenchman who proclaimed himself
a master of the universe while chief
executive of Vivendi Universal, will
stand trial for criminal fraud in a
courtroom in Paris today. Messier,
who transformed Vivendi from a
sleepy French water company into a
$51bn media group, is accused of mis-
leading the stockmarket, manipulat-
ing Vivendi’s share price and
misappropriating company money.
THE BELL NEVER TOLLS FOR considering quitting the buy-to-let sec-
WHITECHAPEL FOUNDRY
Output at the Whitechapel Bell
Foundry, Britain’s oldest manufactur-
ing company, rose 27 per cent last
year. Alan Hughes, whose family has
run it for more than 100 years, says
the foundry is often at its busiest dur-
ing times of recession.
sell-side coalition of 30 investment
banks tasked with the fundraising.
The received wisdom was that the
power of the banks – and the vast
amount of money they were promised
to underwrite the deal – was such that
the ordinarily lily-livered institutions
were bound to surrender. Their refusal
to do so marks an important shift in
the balance of power in the City.
WHY MICHAEL FALLON IS BEST
With so many dramatic changes being
planned to the way the UK economy is
managed and regulated, the House of
Commons’ Treasury Select Committee
will soon take on a renewed impor-
tance as a watchdog and check on the
government and Bank of England.
Michael Fallon, Tory MP for Sevenoaks,
deserves to be its new chairman. He is
financially literate, economically
sound and spent years as an entrepre-
neur and director of a top City firm.
Let us hope MPs vote for him at next
week’s elections.
allister.heath@cityam.com
Business secretary Vince Cable says he hopes to protect firms from short term investors
Cable begins M&A review
M&A
▲
BY STEVE DINNEEN
BUSINESS secretary Vince Cable yes-
terday launched a formal investiga-
tion into M&A rules.
The move comes after intense criti-
cism of Kraft’s conduct in the lead-up
to its takeover of Cadbury. It follows
calls from Cable’s predecessor Peter
Mandelson. The panel will examine
whether the threshold of sharehold-
ers voting in favour of a bid needs to
be increased to prevent short-term
EU PLANS GREEN TAXES TO CUT DEBT
The European Union could seize con-
trol of green taxes across the conti-
nent in order to make low-carbon
energy cheaper. Biofuels and wind or
wave power would become less costly
than energy produced from fossil
fuels, under draft plans obtained by
Reuters, the news agency. The EU
wants to overhaul Europe’s €240bn
annual taxation of energy.
BUY-TO-LET LANDLORDS “CONSIDERING
SELLING UP OVER CGT RISE”
A quarter of landlords claim they are
tor ahead of the new government’s
planned hike in capital gains tax,
research has shown. Around 26 per
cent of landlords said they were think-
ing about selling their properties
before the tax is increased from its
current rate of 18 per cent, according
to LSL Property Services.
CITYA.M. 2 JUNE 2010
NEWS | IN BRIEF
Darling backs David Miliband
Former chancellor Alistair Darling has
backed David Miliband in the Labour
leadership race. He released a statement
last night saying: “We are fortunate to
have a field of very strong candidates,
each with different qualities. However, I
believe strongly that David Miliband is
the right person to lead our party, first
in Opposition and then back to power.”
David Miliband is currently neck and
neck with his brother Ed for the top job
at the party.
BA and Unite to resume talks
British Airways (BA) and Unite have
resumed negotiations in a bid to settle
the bitter dispute that has resulted in
cabin crew taking to the picket lines.
The news comes as the airline
announced it will increase its capacity
during the final five-day strike period,
which starts 5 June. BA said it will fly
up to 80 per cent of long-haul and 60
per cent of short-haul flights from
Heathrow. The commercial liner will also
fly a full schedule to South Africa for
World Cup football fans. Currently
Heathrow Airport is the only BA hub
that has been affected by the strikes.
investors having an undue influence
over the process.
It will also look at whether compa-
nies making bids should be forced to
supply more financing information.
The new rules could prevent hedge
funds and others from voting on
takeovers if they bought stock during
a bid battle, and could force compa-
nies to disclose the fees paid to invest-
ment banks for merger advice.
Cable said: “We welcome foreign
investors but we want all sharehold-
ers to be empowered.”
COVIDIEN TO BUY EV3 FOR $2.6BN
Covidien agreed to buy vascular
device maker ev3 for $2.6bn in a
move aimed at accessing markets for
products that treat problems with
blood vessels in the legs and head.
Covidien has been reshaping its port-
folio since its separation from Tco
International in mid-2007 to focus on
higher-growth, higher-margin busi-
nesses. Yesterday, it agreed to sell its
sleep-therapy business to privately
held PH Invest in Luxembourg.
TELEFÓNICA SWEETENS BID FOR JV
Spain’s Telefónica has sweetened its
bid for Portugal Telecom’s indirect
stake in Vivo Participacoes to €6.5bn
from an earlier offer of €5.7bn. In a
filing to Portuguese stockmarket reg-
ulator CMVM, Portugal Telecom said
it had received Telefónica’s revised
bid. The new proposal comes with
two alternatives.
CITYA.M. 2 JUNE 2010 News 3

City A.M. panel blasts CGT rise

PoliticsHome.com
OUR panel of City opinion-formers
has slammed the government’s pro-
posed hike in capital gains tax.
More than 65 per cent of voters
disagreed with the planned tax,
Brian Winterflood (above), property
mogul Nick Leslau (left) and Jupiter
fund manager Ian McVeigh support City in association with
A.M.’s campaign against CGT hikes PoliticsHome.com
compared with just 34 per cent in impact of the tax. Our panel was
favour of it. firmly behind calls to taper relief to
Predictably, Tory voters were most be introduced on CGT, meaning the
vehemently opposed, with 71 per tax rate falls over the period an asset
cent saying they “somewhat dis- is held, with 84 per cent agreeing,
agree” or “strongly disagree” with
the rise. Traditional Labour voters
including 91 per cent of Tories.
Liberal Democrat MP David Laws
were split 50-50 on the proposed tax. did not fare well with our voters,
David Cameron’s pledge that with 64 per cent saying he should
there will be “generous allowances” have resigned over his expenses
for entrepreneurs went down better scandal. But 53 per cent think his
with the panel, with 55 per cent replacement Danny Alexander will
agreeing this lessens the undesirable be less effective. STEVE DINNEEN
Apply to join today at
www.cityam.com/panel

More protest
over CGT plan
CITY A.M.
CAMPAIGN
BY VICTORIA BATES
CITY heavyweights rushed yesterday
to add their voices to City A.M.’s cam-
paign against the new coalition gov-
ernment’s damaging plans to raise
capital gains tax (CGT) to levels simi-
lar to income tax rates.
City veteran Brian Winterflood, the
founder of the market-making firm
of the same name, threw his weight
behind the cause, claiming that the
proposals would wreak havoc on
entrepreneurial spirit and invest-
ment in the UK.
Other big-hitters who yesterday
signed up to the campaign included
Nick Leslau, the Prestbury Invest-
ments property entrepreneur who
last year pulled off one of the most
successful floats of the year, raising
£220m by listing his investment
vehicle Max Property on Aim.
“I have always believed that short-
term investing should be penalised
and that people should be rewarded
for making long-term investments
and creating jobs,” Leslau told City
A.M. “It is crucially important that the
Conservatives don’t just roll over and
let the Liberal Democrats take the
lead on a proposal that could damage
our economy and jeopardise the
recovery.”
Jupiter Asset Management fund
manager Ian McVeigh also pledged
his support. “Politicians rely on gen-
eral ignorance of how companies are
owned to attempt tax hikes on savers
when they should be cutting the
deficits that their gross overspending
has caused,” he said.
The campaign has already received
backing from the likes of private
equity mogul Jon Moulton, Seymour
Pierce boss Keith Harris, Tullett
Prebon chief executive Terry Smith
and entrepreneur Luke Johnson.
Instead of the proposed CGT hikes
– which could see rates rise as high as
40 per cent, in line with income tax –
this newspaper supports the system
of tapering CGT rates over time,
which would prevent people disguis-
ing income as short-term gains while
propping up long-term investment in
the UK economy.

NEWS | IN BRIEF
Phoenix closes fund at £450m
Phoenix Equity Partners, the mid-market
buyout owner of fashion brand LK
Bennett and handbag company Radley,
has raised £450m for a new private
equity fund. Ontario Teachers’ Pension
Plan, AlpInvest, Adam Street and New
York State Teachers’ Pension Plan were
among investors in the vehicle, which
surpassed its fundraising target of
£375m despite a tough environment.
UK holds onto investment title
The UK has retained the top spot as the
most attractive destination for inward
investment in Europe, according to a
report by Ernst & Young today. Good
corporate links with America and a
world class financial services hub helped
the UK keep its ranking, even as foreign
money flowed into Europe at a slower
pace than during previous years. France
came second and Germany was third.
Starbucks brings latte to NYSE
Starbucks, the upmarket coffee chain, is
opening an outlet on the floor of the New
York Stock Exchange as the platform
tries to transform itself into a modern
working environment. As part of a $7.5m
(£5.1m) overhaul of the iconic dealing
space, Starbucks will begin serving lattes
and frappuccinos to the NYSE’s 500
equity traders.
CITYA.M. 2 JUNE 2010 Focus on Prudential 5

PRUDENTIAL AND AIA EXPLAINED

Q. WHY SHOULD PRUDENTIAL

WITHDRAW NOW?
A. Prudential -- after suffering its
first major setback with an
unprecedented regulatory delay to
the deal last month -- was already
facing growing shareholder discon-
tent. A withdrawal today, after
Prudential management meets top
investors, would avoid taking the
deal to a vote at a general meeting
scheduled for 7 June. Prudential
would need 75 per cent of voting
stock in favour to push ahead, and it
was increasingly unclear it would
push ahead with plan A -- the
takeover offer for AIA and an auda-
cious plan to become Asia’s biggest
foreign-owned insurer. This is widely
seen as implausible. AIG’s manage-
ment is unlikely to return to the
negotiating table and accept even a
face-saving discount for Prudential,
after the earlier statement sticking
to the original terms. And Prudential
has little motivation to take the
$35.5bn offer to shareholders next
week and face what would likely be
an unprecedented defeat.
emphasising to
investors high levels
Q&A
of growth seen in first-
quarter results, when sales rose 26
per cent to a record £807m.
Q. WHAT ARE THE ODDS ON A
BREAK-UP BID?
A. Talk of breaking up Prudential
into its US, UK and Asian arms
has been in the market for several
years. But with several major rivals
dealt body blows by the credit
crunch -- not least AIG -- this scenario
is now seen as unlikely. Analysts

James Leigh Pemberton of

have gathered that support.
Credit Suisse is among
Prudential’s advisers Q. ISCOULD
THERE A CHANCE THE FIRM
PRESS AHEAD?
Picture: REUTERS
A. The alternative option for
Prudential management is to
Q. HOW IS PRUDENTIAL’S
UNDERLYING BUSINESS?
emphasise hedge funds and some
banks will continue to pursue this
A. Prudential, faced with volatile
markets and ruffled sharehold-
option. But hostile bids this complex
-- reminiscent of the three-way
ers, will most likely return to its pre-
vious, independent strategy,
takeover of ABN Amro -- are virtually
unheard of in insurance.

Bankers miss
Pru fees but
eye AIA float
Shareholders mocked the compa-
▲

BANKING
BY OLIVER SHAH
LONDON bankers will miss the fees
bonanza promised by Prudential’s
swoop on AIA, but advisers in Asia are
rubbing their hands at the prospect
of a listing for AIG’s Far Eastern arm.
Prudential was preparing to show-
er £850m on a raft of investment
banks led by Credit Suisse, HSBC and
JPMorgan, and lawyers led by
Slaughter & May, to strong-arm the
City into backing its $35.5bn (£25bn)
takeover of AIA.
After the collapse of the deal,
expected to be confirmed this morn-
ing, the advisers will receive an esti-
mated £350m for their services to
date. Prudential will shell out a
£153m break fee to AIG. It budgeted
£500m for currency hedging,
although market movements since
then may make the resolution of that
exposure less painful.
The insurer’s advisers came under
fire alongside management yesterday
for the gaffe-laden process that culmi-
nated in the deal’s implosion. Ian
Nelson at Wyvern Partners said: “At
least 50 per cent of the blame would
go to the investment banks.”
ny’s reliance on a lengthy cast of
advisers. Referring to the afternoon’s
board meeting, one investor joked: “It
was probably held in the O2 Centre,
there are so bloody many of them.”
The refusal of the US Treasury and
New York Federal Reserve, who own
83 per cent of AIG, to accept a lower
price for AIA sparked suggestions an
initial public offering (IPO) for the
asset could be back on the cards.
AIA had been due for a $35bn flota-
tion on the Hong Kong market before
Prudential’s trade offer halted the
process in February. Investment
bankers in the region are already dis-
cussing a flotation in the third quar-
ter after AIA’s first half results.
ANALYSIS l Prudential 575.50
p 1 Jun
580
560
540
520
500
480
1 Mar 19 Mar 12 Apr 30 Apr 21 May

A good idea, a bad deal

EVERYTHING about Prudential’s
play for AIA happened back-to-front.
Desperate to pounce on the Asian
business before it floated,
Prudential boss Tidjane Thiam
raced in with the generous offer of
$35.5bn (£25bn) – 25 times new
business profits, a multiple
unheard of for insurers even in
China – and then had to work back-
wards to model an aggressive sce-
nario to make the numbers work.
The news leaked before the idea
could be properly road-tested with
Prudential’s largest shareholders,
meaning a dialogue that should
have happened sensibly behind
closed doors was increasingly
played out through the press.
And the British company was
finally found trying to batter AIA’s
price down in last-ditch talks with
the US government over the bank
holiday weekend, a discussion it
should have had before Christmas
when the batting opened.
At $30.4bn it might just have
worked. A multiple of 1.4 times
embedded value (EV) rather than
1.6 times would have been more
palatable, and the deal would have
been earnings neutral by 2013.
That’s the poignant thing: AIA
was almost a great concept. But at
the wrong price, a good idea quick-
ly became a bad deal.
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CITYA.M. 2 JUNE 2010 Aviation News 7

AirAsia moves into profit as

leisure travellers flood flights
of 2010, despite recent violence in one already trades on the Bursa Malaysia

▲
AVIATION
BY MARION DAKERS
BUDGET airline AirAsia yesterday
posted bumper quarterly profits of
£46.4m after tax thanks to a surge in
leisure travel, but remained coy about
plans for an initial public offering of
its Thailand operations.
The group credited its success to a
17 per cent rise in passenger numbers
to 3.7m during the first three months
of its hub cities, Bangkok.
Tony Fernandes, the group’s chief
executive, refused to be drawn on the
likelihood of an IPO, saying only that
AirAsia is “constantly reviewing,
re-evaluating and restructuring” its
internal operations. “We are deter-
mined to stay ahead of the competi-
tion through constant innovation and
wider use of technology,” he said.
Asia’s biggest low-cost airline
Stock Exchange.
Head of Thai operations Tassapon
Bijleveld said on Monday it was consid-
ering an additional flotation on the
Stock Exchange of Thailand, but did
not elaborate.
Revenues rose 10 per cent year-on-
year during the quarter to £181.9m.
The Indonesian arm of the group pos-
ted its first ever profits thanks to a 37
per cent jump in revenue.

Ryanair boss Michael O’Leary will receive a €20m payout once the plan is approved

Ryanair pays
out €500m as Independent Experienced Responsive

earnings leap
to do a deal with Boeing that would
▲

AVIATION
BY EMMA SADOWSKI
RYANAIR is to pay out a €500m
(£417m) dividend to shareholders
after the budget airline saw profits
for the year soar by 204 per cent.
Subject to approval, the Ireland-
based airline said yesterday that it
would be in a position to make the
€500m return to shareholders
through either share buy-backs or a
one-off dividend payment.
Ryanair said it anticipates it will
make the payment, which will see
chief executive Michael O’Leary
receive €20m for the four per cent of
shares he owns in the airline, in
October following a shareholder vote
the month before.
“Now is the appropriate time to do
a dividend payment,” said O’Leary
yesterday morning. He explained that
the payout was possible because
Ryanair last year pulled out of plans
ANALYST VIEWS: WHAT DO YOU THINK OF
RYANAIR’S RESULTS? Interviews by Emma Sadowski
DOUGLAS MCNEILL | CHARLES STANLEY
have seen the airline buy up to 200
new aircraft.
Qualities that have
Ryanair also surpassed many rivals
last year as profits trebled to €319m.
stood the test of time
According to the airline, the rise in
profits were due to lower fuel costs, The fact that Close Brothers enjoys a long-standing
which were partially offset by a 13 per reputation as one of the City’s most respected
cent decline in average fares during financial institutions is no accident.
the year.
More than 66m passengers flew It’s a testament to our commitment to the qualities
with the budget airline last year, on which we were founded.
representing a 14 per cent increase
from the previous year. In the current economic climate, changes don’t
However, Ryanair took a €50m hit always happen overnight, they can occur minute-
from the Iceland volcano disruptions, to-minute. So reacting quickly to changes in the
which caused 9,400 flight cancella- economic climate enables us to ensure that we’re
tions for the airline alone and the loss always acting in the best interests of our clients,
of 1.5m passengers. and realising every opportunity.
The airline expects to pay out
€300m in rising fuel costs next year, Flexibility and agility are nothing new for us. They’ve
but it expects passenger numbers been central to our business model since 1878,
to climb by 11 per cent and fare prices and now, more than ever, we’re helping clients and
to increase between five and 10
shareholders to weather the economic storm.
per cent.
All of which we believe helps to make us one of the
most trusted and dependable financial institutions
in the UK today.
There when it matters

“ The business model for the airline seems to be in good shape

and Ryanair has strengthened its top line with the sale of lower fares.
The fact that the airline will pay out a dividend is good news because

”
dividend payments for airlines are as rare as leprechauns.

Banking Asset Management Securities

MATT BROWN | DAVID BUIK |
ETX CAPITAL BGC PARTNERS

“ “
Discover the qualities that define our business at
These are a These are www.closebrothers.co.uk/qualities
great set of numbers and it is very positive record profits for an airline that posted
for the market that Ryanair is to pay a losses last year. Ryanair’s done it by offering
dividend. With the disruption caused by cheaper tickets coupled with a substantial
the volcano, the airline seems to be soaring cut in fuel prices. O’Leary has every right

” ”
Approved for issue by Close Brothers Limited (a subsidiary of Close Brothers Group plc) Registered office 10 Crown Place, London, EC2A 4FT. Registered in England and Wales
above incidents like that and has posted to be bumptious because these are very Company No. 195626. Close Brothers Limited is authorised and regulated by the Financial Services Authority No. 124750. To register for more details visit www.fsa.gov.uk.
The services referred to above are offered by respective Financial Services Authority regulated subsidiaries of Close Brothers Group plc.
strong numbers. encouraging results. It’s clear that
the business model is very good.
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CITYA.M. 2 JUNE 2010
Gartmore star trader
will face an FSA probe
▲
ENFORCEMENT
BY STEVE DINNEEN
JUST as embattled find manager
Gartmore thought the worst of its
woes were over, the Financial Services
Authority (FSA) yesterday announced
it will launch its own investigation
into one of its star traders.
Guillaume Rambourg’s “directing
shares” scandal will be put under the
spotlight just a month after he
Guillaume Rambourg will remain as an analyst until after the probe
returned to the firm following an
internal investigation.
The high-flying fund manager, who
was jointly responsible for more than
20 per cent of Gartmore’s £21bn
investment portfolio, is now working
as a lowly investment analyst while he
awaits an FSA ruling to reinstate him.
The fresh probe casts further doubt
over his long term future, as
Rambourg will have to wait until the
investigation is complete before he
News 9
can resume his former position.
Gartmore said the investigation
was “no big surprise” and claimed it
will not affect Rambourg’s position in
the company.
It added that the FSA probe centred
only on Rambourg and “not any
other individuals or Gartmore itself”.
In the wake of the scandal shares
in the firm tumbled by 30 per cent in
a single day. Yesterday they fell 2.75
per cent to 120.2p.
 The Capitalist
10
MICHAEL O’LEARY STEPS UP ATTACK
ON ‘PERMA-TANNED’ UNION LEADER
RYANAIR’S Michael O’Leary isn’t
known as a man his rivals could turn
to in a jam, but it appears leopards
really can change their spots.
Just a few weeks ago, O’Leary
lashed out at the Unite union, which
is representing British Airways cabin
crew in a series of damaging strikes,
labelling them a “bunch of dimwits”
and “lions leading donkeys”.
Fast forward to yesterday’s full-year
results presentations and the notori-
ously verbose airline mogul was still
very firmly on the bandwagon in sup-
port of his one-time arch-enemy,
beleaguered BA boss Willie Walsh.
O’Leary repeatedly labelled the BA
strikers “grannies” and “wrinklies”,
roaring: “Flying is like taking a bus
with wings. BA cabin crew should, at
this point, realise that the days of fly-
ing to New York, being put up by BA
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
in a hotel for three days, then flying
back and taking a week’s holiday are
long gone.”
Mind you, that little tirade was
tame in comparison to the stinging
indictment that the Ryanair chief
reserved for Unite boss Tony Woodley,
whom he dubbed an “old beast with
a perma-tan”.
Should we expect trolley dolly bags
at dawn?
O’Leary’s behind BA when it comes to “Tangoed” Tony Woodley
EASYJET JIBE
Speaking of Ryanair and the airline
industry’s most colourful represen-
tatives, how could activist easyJet
founder Sir Stelios Haji-Ioannou resist
having a simultaneous dig at both
O’Leary and the executives with
whom he is clashing over dividends
and aircraft purchases at his own
airline?
Nestled in the top of Ryanair’s
results announcement yesterday was
the revelation that the group will be
paying a one-off dividend to share-
holders, the first since its float in
1997.
Stelios promptly fired off a riposte
Stelios isn’t one to pass up an opportunity
via his preferred ultra-private method
of communication – RNS – quoting
O’Leary from a newspaper article in
2008 as saying: “When the Queen
knighted Stelios she hit him a bit
hard with the sword… He is
suffering concussion. Look-
ing for a dividend from an
airline is absurd.”
“I never thought the day
would come so quickly
when I would be able to
say, ‘Thank you,
Michael’,” Stelios
taunted. “Obviously I
hope (incoming
easyJet chief) Carolyn
McCall and (chair-
man) Sir Mike Rake are
watching this closely. I
would expect nothing
less from easyJet…”
HIGH STAKES
Just days to go until the
Investec Derby festival this
weekend at Epsom and
anticipation is in the air.
One chap hoping for success
in particular is none other
than Investec’s managing
director Bernard Kantor, him-
self a huge horseracing fan and
owner.
Last year, just weeks after his
firm had announced its high-
profile sponsorship of the festi-
CITYA.M. 2 JUNE 2010
Picture: REUTERS
val, Kantor was disappointed when
his horse South Easter was pulled out
of the running on the morning of the
Derby after developing a nasty cough.
With any luck, though, this year
may be a different story – I hear that
South Easter has been entered for the
Coronation Cup at the weekend (a
similar race to the Derby itself but for
older horses).
He may not be favourite to win the
race – an accolade that goes to the
part-John Magnier-owned Fame and
Glory – but here’s hoping he gets the
chance to give the competition a run
for their money this time round.
PATERNAL ADVICE
City World Cup fever continues apace,
with Gary Jenkins, the fixed income
specialist at Evolution, the latest to
offer his predictions for the winner of
the tournament before the weekend.
Jenkins plumped for Brazil as the
eventual winner, though I hear he
decided to use a different prediction
model this time around compared to
the last time he ventured a World
Cup forecast eight years ago.
Back then, he asked his dad to pick
his favourite all-time team, which
promptly got knocked out in the early
stages and caused a flood of client
complaints. This time, he saw fit to
use a whole raft of economic data
from the competing countries along-
side footballing prowess, though his
poor old man didn’t get a look in.
“No way,” Jenkins tells me, firmly.
“He got me into enough trouble last
time…”
FAIR PLAY
While we’re on the subject of
football fever, the Federation
of Small Businesses has pro-
duced a handy guidance
pack for firms concerned
about “employment
issues” during the World
Cup – squabbling over
time off, pulling carefully
timed sickies, you know
the drill.
Advice includes gran-
ting employees special
unpaid leave to watch
England player Wayne Rooney
(left), flexible working hours
on match days, having the TV
on in the background,
demanding GP sick notes for
unplanned absences, and “not
favouring male employees
over female employees”.
“There are 32 teams partici-
pating in the World Cup and
football has a strong female
following,” the FSB reminds
us, sternly. Hear, hear.
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 12 News CITYA.M. 2 JUNE 2010

European insurers line up to

buy half-stake in Barclays Vie
interest, as have Britain’s Aviva, tion of up to €450m, payable in cash
▲

INSURANCE
BY VICTORIA BATES
A QUEUE of European insurers is
waiting in the wings to snap up half
of Barclays’ French life insurance
business, Barclays Vie, after the bank
last week entered talks to offload a 50
per cent stake in the venture for
around €65m (£54.2m).
French groups CNP Assurances,
Axa and La Mondiale are all thought
to have tabled preliminary offers of
Germany’s Allianz, Italian insurer
Generali and Swiss Life, according to
France’s La Tribune newspaper.
Any tie-up is likely to run along
similar lines to Barclays’ life insur-
ance joint venture in Iberia, where it
sealed a deal to sell half of Barclays
Vida y Pensiones Compañía de
Seguros (BVP) to CNP Assurances just
last year. As part of that deal, CNP
paid €140m in cash for the stake, in
addition to an additional considera-
over a 12-year period depending on
the future performance of the ven-
ture. Barclays also entered into a
25-year agreement with CNP to mar-
ket and distribute its life and pen-
sions products through its retail
network in Spain, Portugal and Italy.
Barclays held a preliminary round
table meeting last week to kick off
bidding for the Barclays Vie stake.
CNP and Axa are expected to emerge
as the preferred partners.

Kenichi Watanabe and his executives enjoyed a bumper payout of £10m Picture: REUTERS

Nomura team
triple pay pot
most valuable asset…We have devel-
▲

BANKING
BY VICTORIA BATES
JAPANESE bank Nomura tripled the
amount it handed out in compensa-
tion to its executive team last year
after the bank returned to profit,
arguing that it needed to maintain a
“competitive” pay structure to keep
top talent on board.
Chief executive Kenichi Watanabe,
chief operating officer Takumi
Shibata and eight other executives
shared a total pay pool of 1.45bn yen
(£10.86m) in the 12 months to March.
That compared with a pot of just
829m yen in the previous year,
although that figure was split
between 20 executives, most of whom
have now left the bank.
Nomura’s 10 directors (excluding
Watanabe and Shibata, whose pay
was included in the executive pool)
received 516m yen, of which 160m
went to the six outside directors.
“Nomura is establishing its status
firmly as a globally competitive finan-
cial services group,” the bank said in
an investor report. “To support this,
we recognise that our people are our
oped our compensation policy for
both executives and employees of
Nomura Group to ensure we attract,
retain, motivate and develop talent.”
The pay hikes came despite a show
of restraint among the world’s largest
banks. Goldman Sachs chief Lloyd
Blankfein surprised investors earlier
this year by announcing he would
take a bonus of just $9m (£6.1m), in
contrast to reports he could have
been in line to collect much more.
Nomura charged back into the
black last year, racking up a net profit
of 67.8bn yen compared with a loss of
708.2bn yen in the previous year.
ANALYSIS l Nomura
700
¥ 569.00
1 Jun
650
600
550
1 Mar 19 Mar 12 Apr 30 Apr 21 May

Deloitte rewards staff in the UK

following expansion of business
man John Connolly said: “Even in
▲

FINANCIAL SERVICES
GLOBAL accountancy giant Deloitte
has promoted 32 staff to its partner-
ship in the UK, across audit, tax, con-
sulting and corporate finance.
The move comes in addition to the
creation of 30 new partners since the
start of the year following develop-
ments to the business, including the
acquisition of commercial property
agent Drivers Jonas. Deloitte chair-
tough market conditions it is impor-
tant that we recognise and reward
the people who have committed their
careers to Deloitte.”
Deloitte saw revenues plunge 4.7
per cent to $26.1bn (£17.8bn) last year
during a tough time for the account-
ing world. But the firm continued to
invest in recruitment, adding 4,000
staff worldwide to take its total head-
count to 169,000 at the end of 2009.
CITYA.M. 2 JUNE 2010 News 13

Barnier ready to outline

Picture: REUTERS
tough bank regulations
top officials will outline plans to rein- insurance sector alongside banks. “We
▲

FINANCIAL SERVICES
BY HARRY BANKS
THE European Commission is today
expected to announce its intention to
extend pay curbs in the financial sec-
tor and tighten control of credit rating
agencies.
Against a backdrop of growing frus-
tration with sluggish progress in regu-
lating a financial industry blamed for
the crisis, the European Commission’s
vigorate momentum for reform.
Michel Barnier, the European com-
missioner in charge of an overhaul of
banking regulation, will level harsh
criticism at shareholders and man-
agers for not acting to avert crisis.
At a news conference with
European Commission President Jose
Manuel Barroso, he is expected to
announce the EU executive’s plans for
further laws controlling pay in the
have put out the fire with Greece,” one
European Commission official said.
“In the run up to the G20 meeting,
Barroso wants to make clear that
Europe is taking the action needed in
regulating the financial markets.”
Barnier will also put credit rating
agencies under the watch of a new
pan-European supervisor and give it
the power to demand information or
impose penalties. EU commissioner Michel Barnier will criticise banks, shareholders and managers

NEWS | IN BRIEF
Japan mulls new loan programme Reinsurers transfer $2.4bn in risk
The Bank of Japan may lend at least one
trillion yen (£7.5bn) to commercial banks
under a new loan programme to support
industries with growth potential that
was outlined last month. The central
bank will begin lending to banks from
September and keep the facility in place
for about five years. The bank’s board will
decide on these details at its next meet-
ing on June 14-15.
Reinsurers transferred $2.35bn (£1.6bn)
in catastrophe risk to capital markets
before the US hurricane season that
began yesterday, higher than the $1.4bn
last year, as the catastrophe bond sector
starts to resume normal issuance after
the global financial crisis. The cat bond
sector, in which insurers transfer risks
linked to natural disasters to investors, is
expected to end the year at $4-$5bn.
 14 News
Dubai Holding’s assets include the iconic Burj Al Arab hotel in Dubai
Asset sales on
Dubai’s agenda
▲
FINANCIAL SERVICES
BY HARRY BANKS
DUBAI Holding’s main unit yesterday
said it may resort to asset sales to deal
with its debt after posting a $6.2bn
(£4.2bn) loss for 2009, sending shares in
Dubai tumbling as the market reacted
to the latest setback for the emirate.
Dubai Holding Commercial Opera-
tions Group (DHCOG), a unit of the con-
glomerate owned by the Gulf Arab
emirate’s ruler, took a big hit on its
exposure to Dubai’s property crash.
The unit said it was in talks with
banks to roll over debt and had access
to emergency funding if needed as it
renegotiated obligations to trade credi-
tors. Among its high-profile assets is
the Jumeirah Group of hotels.
DHCOG said debt restructuring was
not needed but it was considering
the sale of certain assets to manage its
cash flow.
The loss increases the challenges for
Dubai Holding – one of the emirate’s
three state-owned firms along with
Dubai World and Investment Corpo-
ration of Dubai – to meet its debt obli-
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gations, estimated at $14.8bn out of a
total $109bn owed by the government
of Dubai and its related entities.
“Dubai Holding has always been
lurking in the background as a serious
problem to address once the situation
with Dubai World had been clarified,”
said David Butter, head of Middle East
and North Africa at Economist Intelli-
gence Unit in London.
“We now have a clearer view of the
dimensions of the problem.”
Dubai’s main index closed down 3.1
per cent with property stocks weaken-
ing on anticipation that DHCOG will
sell more property units into an
already saturated market. Bank shares
fell on renewed balance sheet worries.
“It is sure to have knock-on impacts
on the entire economy. The banks will
be seriously challenged to lend, so it’s
all again part of a vicious cycle,” UBS
analyst Saud Masud said.
Dubai Holding is part of a matrix of
firms commonly known as Dubai Inc,
which was badly battered by the finan-
cial crisis. Its Dubai International
Capital unit last week sought a three-
month delay on debt repayment.
TO STO
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CITYA.M. 2 JUNE 2010 Economic News 15

Canada is first G7
Leading surveys
continued to fore-
cast an expansion
in factory activity
in May in the US,

state to hike rates

the UK and the
Eurozone.

Picture:
REUTERS

The Bank of Canada’s statement

▲
WORLD ECONOMY
BY JESSICA MEAD
THE Bank of Canada has become the
first G7 central bank to hike interest
rates at its monthly meeting.
It hiked the cost of borrowing by 25
basis points to 0.5 per cent at its
monthly meeting yesterday.
But analysts said that the tone of
the accompanying statement suggest-
ed this could be a one-off hike.
concluded: “Given the considerable
uncertainty surrounding the out-
look, any further reduction of mone-
tary stimulus would have to be
weighed carefully against domestic
and global economic developments.”
Paul Ashworth at Capital
Economics said, “The strength of
Canada’s domestic economy meant
that the Bank of Canada simply
couldn’t hold off any longer.”

World factory
output shows
clear growth
of the survey – rose from 58.5 to 59.8,
▲

WORLD ECONOMY
BY JESSICA MEAD
THERE was little sign yesterday of a
slowdown in the strong global manu-
facturing recovery, as leading surveys
continued to forecast an expansion in
factory activity in May in the US, the
UK and the Eurozone.
In Britain, the Markit/CIPS manufac-
turing purchasing managers’ index
(PMI) remained at April’s record high of
60.7, which was the strongest growth
since June 1994 and well above the 50
level that separates growth from con-
traction.
Companies cited solid growth in
incoming new orders as the principal
factor and Societe Generale UK econo-
mist Brian Hilliard said the strong
report reaffirmed his view that further
strong gains in manufacturing output
have been made during the current
quarter.
Across the Atlantic, the US ISM man-
ufacturing survey was also impressive.
Although it was lower than April’s six-
year high of 60.4, at 59.7 it was stronger
than expected and marked its tenth
consecutive month of expansion.
Encouragingly, the employment bal-
ance – which tends to lag other parts
its strongest reading for six years. Ian
Harwood, chief economist at
Evolution Securities, said this augured
well for this Friday’s non-farm payrolls
report. New orders also remained at
April’s 65.7, which is a historically high
level.
The Markit purchasing managers’
index for the Eurozone also signalled
an expansion in factory activity in May
despite at 55.8 being slightly down on
the flash estimate of 55.9.
However, the sharp fall in the PMI
from April’s near four-year high of 57.6
highlighted the growing fragility of the
recovery, said Markit. Chris
Williamson, its chief economist, said:
“The May PMIs highlight the speed
with which uncertainty surrounding
the sovereign debt crisis appears to
have hit business activity.”
May saw the second-steepest slow-
down in the rate of expansion of out-
put since the survey started in 1997
and a markedly slower rate of growth
of new orders. In spite of a sharp slow-
down in Germany, growth was still the
strongest of the four biggest Eurozone
economies. Greece, meanwhile, was
the only Eurozone country to see an
ongoing manufacturing recession.

Australia’s rate Oil falls below

stays on hold $73 per barrel
▲

WORLD ECONOMY ENERGY

AUSTRALIA’S central bank yesterday
chose to keep interest rates on hold at
4.5 per cent and indicated that rates
could remain steady over the next few
months.
The Reserve Bank of Australia (RBA)
pointed to concerns about sovereign
creditworthiness in several European
countries. Its governor, Glenn
Stevens, said that monetary policy
was appropriate for the near term.
The pause was widely expected by
the markets and it marks the end of a
series of rate hikes, which has seen
the cost of borrowing in Australia rise
1.5 per cent since October.
OIL fell nearly two per cent to below
$73 per barrel in choppy trade yester-
day as the euro slid and Chinese and
European data raised concerns about
the global economy.
The euro fell to a four-year low
against the dollar on signs the
Eurozone’s debt crisis is spreading to
its banking system. A stronger dollar
weighed on crude, making it more
expensive to those using other cur-
rencies.
The front month July NYMEX crude
contract fell $1.39 to settle at $72.58 a
barrel. ICE Brent crude for July fell
$1.94 to settle at $72.71 a barrel.
 16 News
Lloyds gives
Crystal Palace
crucial lifeline
▲
LEISURE
BY DAVID HELLIER
THE survival of championship foot-
ball club Crystal Palace appeared
more likely yesterday after a last-
minute deal saved it from the threat
of liquidation.
A life-saving agreement to sell the
club’s stadium to a consortium bid-
ding to own both that and the club
itself was clinched mid-afternoon.
The deal, which seemed like it
might be coming apart late on
Monday evening, came as hundreds
of Palace fans protested at Lloyds
Banking Group’s Gresham Street
headquarters.
The fans were angry that the
bank’s Bank of Scotland arm
appeared to be blocking the sale of
the stadium by refusing to take a hit
on its loan to the stadium-owning
company Selhurst Park.
According to sources, Bank of
Scotland had originally hoped the
stadium would attract a bid of
around £6m but in the end the deal is
believed to be worth something like
£2-3m.
Crucially the consortium has
agreed to an anti-embarrassement
clause which will repay the vendors if
the stadium is later redeveloped and
sold on for a much higher price.
This was seen as a sticking point
late on Monday.
Barry Gilbertson, partner at
PricewaterhouseCoopers, the stad-
ium company’s administrator, said:
“Throughout what has been a very
complex administration, we had
remained hopeful that we could con-
clude a deal with a purchaser whose
vision for the ground matched that of
the community, the football club and
its supporters.
The consortium still needs to reach
agreement with the administrator of
the club itself, Brendan Guilfoyle
from P&A Partnership.
Realistically, it is likely to be some
weeks before the process, which
includes the successful passing of a
creditors’ voluntary agreement, is
concluded.
CITYA.M. 2 JUNE 2010
BRENDAN
GUILFOYLE
P&A
CRYSTAL Palace Football Club
administrator Brendan Guilfoyle said
he was a concerned man yesterday
as he appeared to run out of options
for saving the club.
“It’s like playing with a rubik’s
cube in a game where you cannot
lock all the pieces together,” he told
City A.M. in the morning ahead of a
crucial deal between the bidding
consortium and the administrator
for the company that owns the
stadium.
Guilfoyle has specialised in busi-
ness rescue and insolvency for 30
years and is a partner of the P&A
Partnership, a firm that has its main
offices in Sheffield and Leeds.
He’s not unused to football
insolvencies, having been one of
three administrators appointed by
Luton Town to help sort out its
financial difficulties in 2007.
He has not escaped criticism
regarding his role at Crystal Palace
with former owner Simon Jordan
C.P.F.C 100 Stadium Agilo accusing him of not trying hard
backed by enough to find a rescuer.
At Crystal Palace he is trying to
balance the interests of employees
£2-3million – 27 of whom he had to let go last
week – with those of the club’s sup-
porters and hedge fund owner Agilo
Administrator Administrator that bought him in to run the club.
By the end of yesterday, Guilfoyle
must have been in better heart, but
TALKS UNDER WAY he still knows there’s a way to go.
CITYA.M. 2 JUNE 2010 Technology News 17

ISPs slam Ofcom’s piracy rules O2 bites into Apple with

er ISPs argued the costs of matching regulator. BT has also expressed con-
package for Dell’s tablet
▲

TELECOMS
illegal downloads to customers would cerns about the bill.
BY STEVE DINNEEN make their businesses prohibitively The DEB attracted criticism from
OFCOM yesterday confirmed it will expensive. However, analysts fear the both sides, with some arguing it is computer, which can double as a

apply tough new anti-piracy laws only
to internet service providers (ISP) with
over 400,000 subscribers.
The controversial Digital Economy
Bill (DEB), passed after Gordon Brown
had dissolved his government, will
force ISPs to write to users suspected
of piracy and could eventually force
them to cut the users off.
The decision was made after small-
decision could cause a mass migra-
tion of pirates to ISPs outside the
reaches of Ofcom.
The new piracy rules will now affect
BT, Talk Talk, Virgin Media, Sky,
Orange, O2 and the Post Office, as well
as some bigger regional providers.
TalkTalk has been particularly out-
spoken against the ruling, issuing a
“see you in court” challenge to the
too tough and risks criminalising
innocent people and others saying it
does not do enough to protect the
rights of copyright holders.
It was tabled by Liberal Democrat
Lord Clement-Jones and passed by 165
votes to 140 in the House of Lords but
was slammed when only a handful of
MPs turned up to the Commons to
debate the issue.
▲
TELECOMS
TELECOMS giant O2 hopes to muscle
in on the roaring success of Apple’s
iPad by offering a package for Dell’s
new tablet device.
It will give free mobile connectivity
to users already signed up to its
mobile broadband package costing
from £25 a month.
Dell hopes its new Streak tablet
mobile phone, will help it compete
with the iPad.
The five-inch tablet will hit shelves
in the UK this Friday. Dell has yet to
announce pricing for the Streak,
which it said will appear in the US
this summer.
Dell will be the first firm to take on
the iPad with a device that runs on
Google’s Android operating system.

Google bans
Vodafone in Windows over
$2bn Indian security fears

tax setback
TECHNOLOGY

▲
GOOGLE is phasing out internal use of
rival Microsoft’s Windows operating
system because of security concerns
following a Chinese hacking incident.
The decision to move to other oper-
ating systems including Apple’s Mac
government’s behalf. Vodafone is OS and open-source Linux began in
▲

TELECOMS
BY STEVE DINNEEN
VODAFONE’s long-running battle
over an acquisition it made three
years ago continued yesterday when
India’s tax department served a new
notice on it, which could see the pair
battle it out in court afresh.
The case relates to Vodafone’s
$11bn (£7.5bn) acquisition of
Hutchison Essar in 2007. Indian
authorities believe Vodafone should
have paid a mammoth capital gains
tax bill on the acquisition as the
transfer involved an Indian asset,
even though the business was regis-
tered in the Cayman Islands and is
not usually liable to pay tax in India.
The Indian authorities argue
Vodafone should have withheld $2bn
in capital gains tax on the deal on the
expected to appeal against the notice.
The move is the latest in a long
tussle over the UK firm’s Indian
business.
This year Vodafone was forced to
take a £2.3bn impairment charge on
the division thanks to fierce com-
petition and rapidly escalating spec-
trum costs.
And last month it paid £1.74bn for
a section of the Indian mobile phone
spectrum to provide 3G services. The
telecoms giant was involved in a
fierce bidding war that pushed the
price far higher than it hoped to pay
– three times the predictions of some
analysts.
Vodafone last month revealed
overall profits of £8.7bn, up from
£4.2bn a year earlier. Revenue for the
group rose 8.4 per cent to £44.5bn.
January after Google’s Chinese opera-
tions were hacked.
Internet security firm McAfee said
the cyber attacks on Google and other
businesses had exploited a previously
unknown flaw in Microsoft’s Internet
Explorer browser, which was vulnera-
ble on all recent versions of Windows.
Google said in a statement: “We’re
always working to improve the effi-
ciency of our business, but we do not
comment on specific operational
matters.”
Google, which already competes
with a number of Microsoft products,
is developing its own operating sys-
tem based on its Chrome browser. It
will initially target netbooks, or inex-
pensive, pared-down notebook PCs.
Microsoft Windows runs about
Chief executive Vittorio Colao faces a fresh battle over an acquisition Picture: REUTERS nine out of 10 of the world’s PCs.

CITY VIEWS: WHAT DO YOU THINK OF THE iPAD – IS IT THE FUTURE FOR BUSINESS? Interviews by Marion Dakers

DANIEL MORGAN | VTB CAPITAL KRISTIAN BARCLAY | LAW DEBENTURE LILY BARKER | WEBB CAPITAL

“It really is the biggest waste of “I haven't seen one yet, but I will “It should have launched with a camera
money ever. I can’t see what the probably not get one. I’m happy just attached. I would want to wait until
difference is between the iPad and using a smartphone. Once everyone the next generation is released
other computers. If it was a gets used to the idea of a touch- before buying one. Touch-screen
standalone device I could see screen this kind of thing will become devices seem to break quite easi-
the attraction, but it needs the norm, but people are a bit ly – it’s useful to have on my
to link with a Mac computer scared of change. It might be phone but I find it quite frag-
to get the most out of it.” a bit of a grower.” ile and fiddly.”
 18 Consumer News
Regulators to
look again at
Unilever deal
CONSUMER
▲
BY HARRY BANKS
EUROPEAN Union regulators yesterday
extended their probe of Unilever’s bid
for Sara Lee Corp’s bodycare business
after the Anglo-Dutch company
refused to offer concessions to address
competition concerns.
European Union watchdogs have
said they will need to carefully scruti-
nise the deal to buy Sara Lee’s personal
care business as they fear it could give
the enlarged company too much
power in some markets.
The European Commission, the EU
competition watchdog, yesterday
extended its regulatory approval dead-
line to 5 October when it will decide
whether or not to approve the $1.3bn
(£889m) deal. Its previous deadline
was 31 May.
Unilever said last week it expected
regulators to take a closer look at the
deal, delaying the asset purchase to
the fourth quarter of 2010 from a pre-
vious third-quarter target.
Sara Lee, whose bodycare range
includes Brylcreem and Radox, said an
extended investigation would delay
some of its planned share buybacks.
The Commission said its initial
investigation showed potential compe-
tition concerns on several product
markets such as deodorants, skin
cleansing and fabric care products.
Visit London this Summer
“This merger creates significant
overlaps in a number of products used
by consumers on an everyday basis,”
Competition commissioner Joaquin
Almunia said in a statement.
An in-depth investigation does not
necessarily mean bad news for
Unilever, said antitrust lawyer Bertold
Bar-Bouyssiere at DLA Piper.
“There have been several cases
where investigations have been termi-
nated, sometimes even without a state-
ment of objections. When there are
overlaps, competition concerns could
be fixed with divestments, which can
be done in phase two,” he said.
The deal would be the largest pur-
chase by Unilever since its $2.6bn
acquisition of Ben & Jerry’s in 2000,
and the first acquisition under new
chief executive Paul Polman.
Sara Lee is selling the businesses to
concentrate on food and beverages.
ANALYSIS l Unilever
2,000 p 1,861.00
1,950
1,900
1,850
1,800
1,750
1 Mar 19 Mar 12 Apr 30 Apr
CITYA.M. 2 JUNE 2010
Shopping
Unilever chief executive Paul Polman
and Sara Lee’s Vincent Janssen (right)
guru slams
food chains
▲
CONSUMER
BY JOHN DUNNE
TV shopping guru Mary Portas has
blamed supermarkets for “killing”
Britain’s smaller shops.
The star of BBC’s Mary Queen Of
Shops, raised the alarm over what
she describes as the “seemingly
unstoppable march” of the super-
stores.
Writing in the Radio Times, Portas
said she believed communities were
suffering for the sake of convenience.
She said she was brought up “know-
ing every shopkeeper in our town”
and described them as “the corner-
stones of family life”.
Portas said: “The rise of the super-
market giants – and our love affair
with them – is killing Britain’s small
£889m £1.77bn
shops. We’re sacrificing not just our
greengrocers, our butchers and our
bakers, but also our communities for
convenience.
“In 1954, St Albans was the unlike-
the proposed offer for Sara Lee’s the price Unilever paid for ly starting point for this revolution
bodycare division Ben & Jerry’s in 2000 when it was chosen as the pilot loca-
tion for Tesco’s first ever convenience
store ... greengrocers, butchers and
Sara Lee’s bodycare range includes corner shops have gradually disap-
1 Jun 5 OCTOBER BADEDAS, RADOX peared.” She added that the move
into other product ranges had also
D-Day on deal for regulators AND BRYLCREEM been a step too far.
Mary Portas is sad
163,000
at the way small
businesses have
Unilever staff around the world been squeezed out
by the big chains
21 May
Whitbread quashes City rumours
  
    




of plans to issue equity in business
LEISURE
▲
BY JOHN DUNNE
PREMIER Inn and Costa Coffee con-
glomerate Whitbread yesterday
insisted that it has no plans for a
rights issue to boost its finances.
Whitbread, which was respond-
ing to City speculation, said it was
looking at “diversifying the sources
and tenure of its debt” and could
issue new debt in the next 12
months.
Whitbread, which also owns the
Beefeater chain, had net debt of
around £513.4m at the end of its
financial year in March.
It added: “Whitbread confirms
Summer in London from £99 incl VAT
Stay at the stylish Apex City of London Hotel from just £99 per room
per night incl VAT or the luxurious Apex London Wall Hotel from just £129
Northern Foods relies on Goodfella’s
per room per night incl VAT. We’ll even include continental breakfast!
LEISURE
▲
apexhotels.co.uk T 0844 875 5113 BY JOHN DUNNE
" & " #$(# $'    
 NORTHERN Foods has said it hopes
"  $ $ " $# #  "

 "% the relaunch of Goodfella’s pizzas “We have high hopes for this,” he Marks & Spencer and discounter
 #$ " $ % "#"&$ &% # "!%" $ $ $  will help it to cope with tough trad-

# " # #%$ $ "$ " &$(
ing conditions as it yesterday repor-
ted flat annual profits.
Apex Hotels )  )
that it has no current intention of
raising funds through the issue
of equity.”
Bank credit facilities of £1.15bn
are due to run out by March 2013,
with the first reduction of around
£225m expected in December 2010.
Whitbread’s new chief executive
Andy Harrison, formerly of easyJet,
starts in September, when he takes
Alan Parker will
hand over the reins
to Andy Harrison
after 18 years with
the firm
relaunch of its Fox’s biscuits, which
lifted it to number two in Britain’s
biscuit market behind privately
owned United Biscuits.
said of the pizza revamp, which
includes new recipes and an adver-
tising campaign featuring the
over from Alan Parker. Parker has
started collecting his pension,
including a one-off payment of
£5.4m.
He has been at Whitbread for 18
years, and will be entitled to an
annual payment of just over
£135,000 on top of the lump sum
he has already received.
The company has a market value
of around £2.4bn at its current price
and has risen in value under his
stewardship.
Parker, 63, slimmed down the
group, and sold off assets such as its
fitness club chain at the top of the
market. Harrison will receive a basic
salary of £700,000.
Cup, which starts this month.
Northern Foods, which also makes
own-label products for retailers as
diverse as premium food seller
Aldi, posted profit before tax and
one-off items of £39.2m for the 53
weeks ended 3 April.
%" ) % Chief executive Stefan Barden “pizza fairy”. However, taking into account
said the firm aimed to replicate the Barden added that pizza sales changes in pension fund contibu-
success it achieved with the could also get a lift from the World tions profit dropped by 28 per cent.
CITYA.M. 2 JUNE 2010 News 19

Exploring Britain’s attitudes towards alcohol

almost half (44 per cent) of those asked agreed
that alcohol is bad for your health; not bad
enough, however, to prevent 43 per cent saying
they drink as much today as they always have.
Yet strongly-held opinions on the effects of alco-
drink at the weekend”. There were also “special ANALYSIS l Different types of drinkers
occasion drinkers” (26 per cent), “after work
drinkers” (14 per cent), “daily drinkers” (12 per
cent), and “pub goers” (6 per cent). The most
concerning group of respondents classed them-

hol on people’s health do seem to have influenced
drinking behavior overall – 33 per cent of those sur-
veyed have cut down on their alcohol consumption
BRANDINDEX in the past year, with a further 10 per cent saying
they have given up alcohol completely. And 60 per
STEPHAN SHAKESPEARE cent of respondents think that alcohol packaging
should contain health warnings to warn people
%
selves as “anytime, anywhere drinkers”, who
“enjoy a drink at every opportunity” (3 per cent).
The lack of “pub goers” reflects a broader
socioeconomic trend, as 47 per cent of alcohol
drinkers reported that most of their drinks
budget is spent on drinking at home, compared
with 27 per cent who said they spent it going

A
S THE new government proposes to tack- about the negative impacts of alcohol abuse, much out. The “take home” market share of the alco-
le Britain’s binge-drinking culture, like the protocols in place on cigarette packets. hol industry has increased by over 3 per cent,
YouGov has looked in detail at the atti- The SixthSense report also identifies differ- whereas the “on-trade” (bars, restaurants etc.)
tudes of those who drink alcohol, as a ent types of drinkers, based on when and where market share has dropped by the same amount 38 Weekend drinker 12 Daily drinker

part of a YouGov SixthSense sector report. the respondents normally consume alcohol. It over the past ten years. 26 Special occasion drinker 6 Pub goer
Although 95 per cent of respondents believe found 38 per cent of respondents defined them- Stephan Shakespeare is founder and chief executive 14 After work drinker 3 Anytime, anywhere drinker
that a drink from “time to time” does not hurt, selves as “weekend drinkers”, who “only really of YouGov

International
NAB gets time GERMAN AID FOR OPEL IN DOUBT

accounts rules
to finalise its to be delayed

▲
ACCOUNTING

Axa Asia deal THE head of the Financial Accounting

Standards Board (FASB), which sets US
accounting rules, said yesterday he
does not expect FASB to meet a 30
June, 2011 deadline for convergence
with international accounting rules,
requested by the G20 group of indus-
FINANCIAL SERVICES The watchdog has expressed con- trial and emerging countries.
▲

BY MARION DAKERS
INSURER AXA has given National
Australia Bank (NAB) six more weeks
to win regulatory approval for its
takeover bid for insurer and wealth
manager AXA Asia Pacific Holdings
(APH).
All three firms are locked in an
exclusivity agreement until 15 July
while NAB continues talks with the
Australian Competition
Consumer Commission (ACCC), which
blocked its A$13.3bn (£8bn) bid in
April.
After five months of negotiations
NAB is said to be considering selling
assets to satisfy the regulators and
stave off rival bids. The bank would
not discuss its plans, but said in a state-
ment: “NAB continues to pursue its
options in relation to the ACCC objec-
tions to the proposal.”
cern that NAB, Australia’s fourth
biggest bank and owner of Clydesdale,
would choke competition by control-
ling too many retail investment plat-
forms. The ACCC is reluctant to allow
NAB to merge its own Navigator plat-
form with APH’s internet-based North
system.
AMP, an Australian wealth manage-
ment company which said last month
it remained in “high level” negotia-
and tions with APH, was unavailable to
comment on the extension. APH was
also unavailable for comment.
NAB’s proposed takeover would split
APH’s operations between AXA Group
and the bank. The complex deal would
see NAB acquire 100 per cent of APH,
which is currently 51 per cent owned
by AXA Group. NAB would then sell
the Asia-Pacific operations back to
AXA Group, and retain the New
Zealand and Australian branch.
The Norwalk, Connecticut-based
FASB and the London-based
International Accounting Standards
Board expect to announce changes to
their convergence work plan in the
next week or so that would delay the
completion date by about six months
and allow for greater public com-
ment on the boards’ proposals, FASB
chairman Robert Herz said.
“We’ve been working on a revised
work plan with the IASB,” Herz said.
Herz said that to issue final stan-
dards by June 2011, the boards would
have to release about 10 proposals in
the next two months and rush
through the public comment process.
The G20 set a mid-2011 deadline for
GENERAL Motors received a setback yesterday in its effort to secure €1.1bn (£0.92bn) in creating a single set of high-quality
German aid for its money-losing Opel unit after a government panel declined to endorse accounting rules, but the US
the request. Germany said that its technical experts were “very critical” of the US car- Securities and Exchange Commission
maker’s request for loan guarantees. GM and Opel want Germany and four other said that the deadline should not be
European governments – including the UK – to guarantee €1.9bn in loans in total. met at the cost of lower standards.

A New Government A New Banking Era?

Angela Knight, Chief Executive of the British Bankers Association will
offer her insight on what she believes will be the key considerations for
the new government.

EAB is proud to sponsor this event which is hosted by the Arab Bankers
Association.

To watch the debate live go to www.eabplc.com at 12.45pm on 2nd June 2010

&(-( *&* (
/ +(&' ( %" '# !)*( !  &&(*
&%&%   !)*( !% %#% % #) %+$( 


+* &(!) % (+#* . *  !%%!# (,!) +* &(!*. ---'#&$
 20 News CITYA.M. 2 JUNE 2010

Sweden’s top BEST OF THE BROKERS

ANALYSIS l Informa
430 p
420
374.70
1 Jun
INFORMA
JP Morgan Cazenove reiterates its “over-
weight” rating on Informa after assessing
Alan Ruddock,
writer, editor,
lenders are
410
400
390
380
its margin upside potential. JP Morgan said
the company has proved itself good at
removing costs to offset revenue shortfall,
dies suddenly
370 the stock offers a higher equity free cash
OBITUARY

▲
flow yield than the business-to-business

in good shape
360
350 and professional publishing sub-sectors and ALAN Ruddock, one of City A.M’s
340 columnists at the time of the
1 Mar 19 Mar 12 Apr 30 Apr 21 May
the stock may see technical buyer support. paper’s launch, died suddenly at
the weekend.
His death came shortly after
ANALYSIS l Travis Perkins TRAVIS PERKINS he played cricket in his native
950 p UBS maintains a “buy” recommendation on Ireland.
▲

BANKING
BY HARRY BANKS
SWEDEN’S central bank slashed its
forecast yesterday for loan losses for
its four major financial groups and
said the country’s lenders were in a
strong position to weather uncertain
market conditions.
The Riksbank central bank said it
expected loan losses at the four major
banks – Nordea, SEB, Handelsbanken
and Swedbank – to reach SEK61bn
(£5.31bn) over the next three years.
It cut its forecast for loan losses this
year to SEK28bn from a previous
SEK65bn.
The bank said in its twice-yearly
stability report that while risks
remained, mainly due to the effect of
Greece’s debt woes on markets and
the possibility that a recovery in the
Baltic region would stall, banks’
finances were robust.
“The banks are well equipped to
meet unexpected and negative events
in the period ahead,” the Riksbank
said in a statement.
“But there are still large risks and
uncertainty has recently increased.”
In the event of a more negative out-
come, the Riksbank said the banks
would still have enough capital to
manage potentially higher loan losses
but that they could face trouble
obtaining funding.
Sweden’s top four lenders focused
on reducing risk and boosting capital
levels during the financial crisis
which led to big losses for the banks,
many of which had built up big expo-
sures to the crisis-hit Baltic region.
Most indicators show Sweden is in
good shape. Its economy grew a much
better-than-expected 1.4 per cent in
the first quarter from the previous
three months.
FAST FACTS | SWEDEN
● Sweden’s economy grew by a better-than-
expected 1.4 per cent in the first quarter.
● Losses at its top four lenders are expected to
reach SEK61bn (£5.3bn) over the next three
years, according to Sweden’s central bank.
To appear in Best of the Brokers email your research to notes@cityam.com
798.50 Ruddock, 49, held a number of
900 1 Jun
Travis Perkins and said the BSS acquisition executive roles in the UK press,
850
is strategically important and well timed. including editor of the Scotsman
UBS said that the indicative offer to at the time of devolution.
800 He was also executive editor of
acquire BSS brings a strong fit between
BSS’ plumbing business and Travis Perkin’s the Sunday Express and a former
750
city editor of Eddie Shah’s news-
700
City Plumbing, while the good margin (7.6 paper Today.
per cent) in the industrial division in BSS is Most importantly he was an
650
1 Mar 19 Mar 12 Apr 30 Apr 21 May a new growth platform for Travis Perkins. inspiration to a legion of young
and not-so-young reporters, never
afraid to take on vested interests.
He wrote a well received book
ANALYSIS l Zurich ZURICH FINANCIAL SERVICES about Michael O’Leary, the
270 CHF
Bank of America Merrill Lynch (BoAML) Ryanair founder.
237.60 said it rates Zurich Financial Services Although the controversial air-
1 Jun line magnate refused to co-oper-
260 comfortably as a “buy”. BoAML said in a
ate with the creation of the book,
sell-off driven by heightened macro uncer- Ryanair yesterday took out a
250
tainty, Zurich is a stock that BoAML is small notice in the Irish Times
240 happy to put forward – it particularly val- which described the author as
ues the defensiveness of the balance sheet “one of the good guys”, a testa-
230 ment to both his independence
and the roughly one-third of earnings that and likeability.
1 Mar 1 Apr 1 May it says are annuity-like. Ruddock, a charming man to
work and to socialise with, leaves
a wife and three sons.
CITYA.M. 2 JUNE 2010 News 21

SSE rules itself out of EDF bid Eurotunnel snaps up rail

Alexander said in a statement. at least £4bn for the French firm,
freight firm in £31m deal
▲

ENERGY
The British utility said, however, it which expects firm offers by 21 June.
BY HARRY BANKS would still work with partner
SCOTTISH & Southern Energy (SSE) Borealis Infrastructure on a deal that ANALYSIS l Scottish & Southern Energy FirstGroup earlier confirmed it was

yesterday backed down from seeking
a major stake in the UK networks
being sold by France’s EDF after rul-
ing out raising equity to finance any
bid.
“We have always maintained a
highly disciplined approach to acqui-
sitions, investment and to financial
management generally, and that will
continue,” finance director Gregor
could potentially give it a small inter- 1,140
est in the networks. 1,120
The statement from SSE could 1,100
hand the advantage to two rival bid-
1,080
ders – Hong Kong’s Cheung Kong
Infrastructure Holding and an inter- 1,060
national consortium of Australia’s 1,040
Macquarie, Canada Pension Plan and 1,020
the Abu Dhabi Investment Authority.
Analysts expect a sale would raise
▲
p TRANSPORT
1,079 selling its rail freight business to
1 June CHANNEL Tunnel operator Europorte, for a total consideration of
Eurotunnel is buying Britain’s third- £31m including pension liabilities.
largest rail freight operator, GB FirstGroup said the proceeds of the
Railfreight, from UK transport com- disposal would be used to further
pany FirstGroup for €26.3m (£21.9m) reduce its net debt.
in cash, it said yesterday. GB Railfreight, which specialises in
The acquisition will be combined hauling freight for customers, had
with Eurotunnel’s Europorte unit, annual sales of about £55m and a net
10 Mar 30 Mar 21 Apr 12 May which it bought from Veolia last year. profit of around £5m.

HP axes 9,000 LAPPING OF LUXURY NEWS | IN BRIEF

M&G loans £100m to Stobart
M&G Investments yesterday said it had
arranged for its UK companies financing

jobs in a $1bn fund to extend a 10-year £100m loan to

logistics firm Stobart Group. The loan will
be used to pay down Stobart’s existing
bank debt and to fund further invest-
ment, including developing Southend
Airport, which was granted consent for a

restructuring runway extension in March. M&G

received financial advice on the loan from
Panmure Gordon’s debt advisory team.

EADS loses out on euro weakness

Aerospace group EADS’s hedging pro-
grammes will prevent the company from
improving profitability,” said Tom taking advantage of the weaker euro over
▲

TECHNOLOGY
BY HARRY BANKS
HEWLETT-PACKARD (HP) said it aims
to boost margins by cutting jobs and
reallocating spending to more prof-
itable technology services, shrinking
its workforce by a net 3,000 jobs, or
one per cent, over three years.
The move, which will result in a
$1bn charge, comes as rivals like IBM
and Cisco Systems vie for supremacy
in the lucrative business of fitting out
corporate data centres that handle
communications and store huge
amounts of information.
HP bought technology services
company EDS in 2008 for nearly
$14bn to expand in the services busi-
ness, and it said yesterday’s
announcement was a further attempt
to bolster its enterprise business.
“Over the past 20 months, we
focused on integrating EDS and
Iannotti, senior vice president and
general manager of HP’s Enterprise
Services. “Now that the integration is
largely complete, we have identified
significant opportunities to grow and
scale the business.”
HP plans to cut 9,000 jobs over
three years as it shuts down older
data centres. But it will also add 6,000
new positions over the same period as
it invests in more advanced data cen-
tres and expands its global opera-
tions. HP said severance and asset
impairment charges will result in a
$1bn restructuring charge over three
years, with half of that to be recorded
in the third quarter. On a net basis,
the company sees savings of $500m to
$700m annually by the end of its 2013
fiscal year. HP currently has about
304,000 employees worldwide and is
the world’s largest technology compa-
ny by sales.
the next two years, chief executive Louis
Gallois told shareholders yesterday.
Gallois noted a hedging programme
would mute currency impacts for 2010,
2011 and at least part of 2012 but said
the stronger dollar “will certainly improve
profitability over time.” EADS’ revenue
guidance for 2010, targeting stable
results compared to 2009, assumes a
ratio of $1.40 to the euro. The euro hit a
four-year low of $1.2112 yesterday.
Capita buys Premier Medical
Capita Group has acquired medical
reporting and screening specialist,
Premier Medical, for £60m on a cash-
free, debt-free basis. According to the
outsourcing giant, the move adds “depth
SUNSEEKER, the company whose yachts have been used to epitomise the ultimate luxury and breadth of expertise” to its existing
lifestyle in the James Bond films, yesterday secured a new investor in the form of bou- services for the health market, which
tique firm FL Partners. FL, which owns the Racing Post newspaper, said it had provided include running the NHS Choices pro-
£25m of new capital to Sunseeker and refinanced its current debt facilities with a long- gramme and the health informatics firm,
term package provided by Macquarie Bank and Haymarket Financial. CHKS.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates

Axa Investment Managers LoveFilm Alliance Trust Asset Management

Hermes
The asset manager has appointed Chris Goudie
as an executive director for global business
development and chief executive of Hermes
Fund Managers in North America. Goudie joins
from Pyramis Global Advisers, the fund man-
agement firm he helped to establish for Fidelity.
Hermes has also hired Heiko Dahse, pictured,
and Marcus Money-Chappelle from Fischer
Francis Trees & Watts, to lead its sales teams in
Europe and the MENA region respectively.
The investment manager has hired Nick
Hayes from Henderson as a portfolio
manager in its fixed income team.
Hayes will be based in London, taking
over responsibility for the Axa Sterling
Strategic Bond Fund.
Since 2003, he has been a senior
fund manager in the fixed interest team
at New Star, which was taken over by
Henderson last year. Prior to that, he
worked at WPP Group.
Dawn Airey, the chairman and chief
executive of Five, is to join the film
rental subscription provider as a non-
executive director.
Airey was previously chief executive
of Channel 5 before leaving to pursue
roles at Channel 4, BSkyB and ITV, lat-
terly as managing director for global
content. She returned to Five in 2008
and now sits on the management board
of the broadcaster’s parent group RTL.
The asset management business has
appointed Ella Riesco as head of retail
marketing, responsible for promoting
its equity and bond fund range.
Riesco joins from Jupiter Asset
Management, where she was senior
marketing executive for three years,
responsible for marketing to financial
advisers, institutional consultants,
direct investors and Jupiter’s strategic
alliances.

To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
 Investment
22
NET INCOME –
AND GROSS
DEBT HABITS
DICK TURPIN
MANAGING DIRECTOR, ARTEMIS
D
EBT is the issue. The sub-prime parcel went
round and round. But governments simply
nationalised that $2 trillion when the music of
Lehman Brothers and others stopped in
September 2008. At $9 trillion, the combined public
and private debt of the troubled European countries is
another matter altogether, demeaning markets and
injuring investors. The problem with sovereign debt is
that there is no backstop; no lender of last resort.
It’s a complex nexus of inter-indebtedness. Italy,
for example, owes France $511bn, or nearly 20 per
cent of France’s GDP. Of Portugal’s $286bn of sover-
eign debt, nearly a third is held by, ah, Spain. What an
unholy alliance. Greece, for example, isn’t so much
indebted as insolvent. Small surprise. Google Earth
has identified 17,000 pools in the suburbs of Athens.
Yet only a princely 300 Demostheneses pay the
swimming pool tax. Once again we are as a species
surprised and disquieted – when, inevitably, the music
stops. Well, the best hope for investors is that the
“austerity packages” will be ones not just of form, but
also of substance. With the FTSE 100 Index down
almost 7 per cent in May, the packages will have to
be good. Spain passing its tough budget, even if it
was by only one vote, augurs well. After all, observes
the optimist in me, South Korea and Indonesia flour-
ished only after the Asian currency crisis of the late
1990s brought about budgetary restraints and finan-
cial reforms.
The pessimist in me, or perhaps that’s the realist,
notes the European Central Bank’s warning yesterday
that Eurozone banks face up to €195bn (£163bn) in a
“second wave” of loan losses over the next 18
months. Meanwhile, against this overall background
of indebtedness, specific tragedies like that affecting
BP and the Gulf of Mexico have an exaggerated
impact on markets overall.
So on balance? As a result of austerity budgets,
growth will fall. But the growth we end up with will
be better quality. In time this will be good for mar-
kets. Until then, I suspect, investors’ patience will con-
tinue to be tried by demanding debt.
CITYA.M. 2 JUNE 2010
| Fund Management
Diversify your exposure
After losing credibility
in 2008, investors are
once again choosing
to spread their risk,
says Jessica Mead
N
AVIGATING market volatility is
always tough for any fund manager
seeking to generate alpha and the
ongoing sovereign debt and bank-
ing crisis in Europe has been a definite test
of managers’ mettle.
Recent data shows that worried
investors have been redeeming assets held
in funds. Outflows from European equity
funds in the week ending 19 May have
been the worst since April 2008 and
investors redeemed a net $3bn from high-
yield bond funds in the second and third
weeks of May, according to EPFR Global,
which tracks fund flows.
So where have these investors been real-
locating their cash? The EPFR Global data
indicated that the primary beneficiaries of
the Greek debt crisis were US bond and
commodity funds, both of which are per-
ceived to be a refuge from the storm cur- Having a little bit of everything can be a good thing Picture: REX
rently engulfing Europe. For example, in
the week ending 19 May, commodity funds managers more cautious, says Peter Fuller, earlier gains.
received inflows of more than $1bn as lead analyst on European equities funds at Peter Toogood, director of investment
investors fled to the safe-haven of gold. S&P Fund Services. services at OBSR, a Morningstar company,
Castlestone Management’s chief executive But he points out that fund perform- advises: “Investors will need to be oppor-
Angus Murray reckons that the precious ance has polarised between broadly defen- tunistic and should favour a barbell of
metal will reach $2,400 in the next decade, sive funds with significant large-cap good value, defensive growth stocks, high
spurred on by sovereign debt crisis. exposure – as would be expected – and yielders and industrials all with exposure
Castlestone says: “Precious metals invest- dedicated small-cap portfolios which, as of to growth markets.”
ments have historically shown to be an mid-May, seem to be hanging on to their Diversification is back in vogue.
insurance when added to a diversified
portfolio, acting as a safe-haven asset in ANALYSIS l Performance of the All-Share over the past three months
times of turmoil.” 3,000
This reallocation suggests that institu- 2,950
2,676.51
tional investors are increasingly keen to 2,900
make their portfolios market-neutral, 2,850
spread the risk and hedge against volatili- 2,800
ty. Joshua Spitz, head of European index
2,750
derivatives trading at Barclays Capital, says
he has seen significant investor appetite 2,700
for the new iPath VSTOXX short-term 2,650
futures exchange-traded note, which 2,600
allows investors to hedge against European 2,550
equity volatility.
The volatility has also made equity fund 2010 12 Apr 19 Apr 26 Apr 4 May 10 May 17 May 24 May
CITYA.M. 2 JUNE 2010 23

THE LEGAL LANDSCAPE

IS SHIFTING PAGE 27

Bond markets
Germany’s bond yields
have been artificially
depressed

Picture: REUTERS

could be about
to change gear
Yields look over-extended and future risks
should be considered, says Kathleen Brooks
payment burdens, UBS has found that ernment debt. It has continued to perform
countries with the most at-risk bond mar- well, and outperformed its benchmark,

S
OVEREIGN risk has risen as the debt
problems facing Greece have come
out into the open. And volatility in
the bond markets is likely to contin-
ue after Fitch, the ratings agency, down-
graded Spain late last week, reigniting
concerns about credit risks.
All of this has caused a massive diver-
gence in bond yields and countries per-
debt, especially in Germany and the US,
have been artificially depressed during the
credit crisis, and at this level the risk of a
reversal is growing. “Bond markets in the
US, Germany and Japan are overvalued rel-
ative to the cyclical drivers of growth and
inflation outcomes, but potentially also
relative to longer-term questions about fis-
cal sustainability,” UBS analysts wrote last
kets include Italy, Belgium and Japan,
although France, the UK, Germany,
Canada and the US also score fairly highly.
It would have been a very gutsy fund
manager who would have been happy to
short US, Japanese and German bonds in
recent weeks, but this is exactly what UBS
research suggests. So how can investors
prepare for the future?
the BarCap Euro Aggregate 500m+ Index,
to return 4.32 per cent in the year to 31
March.
It’s not just equity markets that can
move both up and down: bond markets
can too, and the pressure is rising.
ANALYSIS l Interest payments to GDP ratio 2009-2011 Source: OECD

ceived as having low sovereign credit risk,
such as Germany and the US, have seen
theie borrowing costs fall.
But there is a strong argument that
yields for “safe haven” bonds are now too
low and don’t reflect the actual economic
reality. This argument is supported by
investment bank UBS, which recommends
an underweight position in both nominal
and inflation-linked government bonds.
It argues that yields on government
week. Choosing a dynamic fund manager is 6% % of
Investors who plan to hold bonds for the one way to do this. Morningstar, the fund GDP 2009 2010 2011
long term need to be aware of the sover- ratings service, recently upgraded 4.5%
eign risks of the future, most notably the BlackRock’s Euro Bond Fund to superior. It
age-related liabilities facing the G7. UBS says that one of its strengths is fund man-
notes: “the costs of the financial crisis pale ager Michael Krautzberger, who uses quant 3%
in importance when compared to the costs models combined with his own judgment
governments are likely to face from to generate ideas. This worked to good 1.5%
unfunded pension liabilities.” effect in the run up to the financial crisis
Using its sovereign risk index, which back in 2007 when the fund went against 0
SWD NL GER JP FR US UK CAN BELG IT
measures future liabilities and interest the trend and boosted its holding of gov-

FUND MANAGEMENT NEWS

JESSICA MEAD
The Guinness family office has launched a new fund
GUINNESS FAMILY OFFICE’S NEW FUND
Iveagh Private Investment House – home of
the Guinness family’s office – along with 47
Degrees North Capital Management have
launched the new Iveagh Newcits Fund at the
start of June. This is a fund of Ucits hedge
funds that is within a Ucits structure, which
offers investors – both institutional investors
and private clients – access to a diversified
portfolio of Ucits regulated absolute return
strategies. The fund corresponds with all
Newcits regulations, and sells itself on the
transparency and liquidity it can offer
Picture: REUTERS investors.
UCITS PORTFOLIO MONITORING LAUNCHED
Financial services company Northern Trust
yesterday announced the latest enhancement
to its Hedge Fund Monitor. Ian Headon, senior
product manager for alternative asset servic-
ing at Northern Trust, said: “The new offering
will help fund managers running Ucits funds-
of-hedge-funds to monitor their compliance
with restrictions on liquidity, concentration risk
and exposure to underlying non-Ucits funds.”
Northern Trust said the enhanced monitor
comes at a time when a growing number of
investors require greater transparency from
their managers.
60TH BIRTHDAY FOR NB’S GUARDIAN FUND
One of the oldest continually-operated mutual
funds marked its 60th annniversary yesterday
and has consistently outperformed the S&P
500 on an annualised basis since 2002.
Neuberger Berman’s Guardian Fund was
launched on 1 June 1950 by Roy Neuberger,
who managed it for the next 28 years. The
fund now has $1bn of assets under manage-
ment and has been managed since December
2002 by managing director Arthur Moretti
and his team. Under Moretti, the fund has pro-
duced an annualised 8.51 per cent net return
compared to 6.26 per cent for the benchmark.

Each determined, tenacious and above all independent.

Yet united in a common cause.

Talk to your Financial Adviser, call 0800 092 2051 or visit www.artemisonline.co.uk
Issued by Artemis Fund Managers Limited which is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk), 25 The North Colonnade, Canary Wharf, London E14 5HS.
For your protection calls are usually recorded. CAM/AE
 24 Investment | Foreign Exchange
THE YEN IS NO
LONGER SUCH
A SAFE HAVEN
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
I
F POLITICIANS in the West want to cheer
themselves up all they have to do is look at the
approval ratings of Yukio Hatayama. Less than
20 per cent of the electorate feels that Japan’s
prime minister is doing a good job. Even Richard
Nixon still had the trust and approval of 25 per cent
of the American public at the height of the
Watergate scandal. Hatayama’s troubles reached
their apex on Sunday night when the Social
Democratic Party – a small member of his coali-
tion – resigned in protest over his failure to move an
American military base off Okinawa.
Normally, such political manoeuvering is viewed
with casual detachment by the market, but
traders are becoming increasingly concerned
about the vacuum of leadership in Japan.
Hatayama faces parliamentary elections on 11
July and given the current discontent among the
voters, the chances are high that he may lose his
position of leadership.
When Hatayama first swept into power, up-
ending more than 40 years of Liberal Party rule,
investors held high hopes that he would be able to
reform Japan’s sclerotic economy. However with
deflationary pressures still as strong as when he
first took office, he now faces the wrath of the
voters as traders watch the political drama with
unease.
Currency markets abhor political instability and
the yen’s vaunted status as an instrument of safe-
ty could come under question if Japanese elec-
tions result in further confusion. The yen, which
typically strengthens during times of risk aversion,
actually weakened significantly on Monday
despite the fact that equity markets were lower.
Until now, markets have blithely ignored Japan’s
fiscal debt burden of 200 per cent of GDP. Since
Japan generates massive capital surpluses and
has always been able to finance its debts internal-
ly, credit markets have given it the benefit of
doubt and bought the yen in times of stress. But
with the global recovery losing momentum and
Japan’s pool of savings dwindling in the face of
ageing demographics, the yen may no longer be
the safe harbour currency it once was, especially if
political turmoil delays critical fiscal reform.
Boris Schlossberg and Kathy Lien are directors of
currency research at GFT. Read commentary at
www.GFTUK.com/commentary or e-mail
borisandkathy@gftuk.com.
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CD03UK.099.052010
The chances of
a strong pound
are still bleak
Even after the election,
there is a lot weighing
on the currency, writes
Kathleen Brooks
S
O WHAT now for the pound? Not
even a Conservative-led coalition
and a credible plan to cut public
spending has been enough to lift the
UK currency out of its malaise – it has fall-
en 5 per cent against the dollar in the past
month and has been unable to break above
the €1.18 mark against the euro. This has
defied some market commentators who
thought the pound was due a correction
once the election was out of the way and
the Labour Party was unseated from
power.
But now analysts at Bank of Tokyo-
Mitsubishi UFJ expect sterling to fall to
$1.38 against the US dollar in the coming
months as the new Lib-Con coalition gov-
ernment’s honeymoon period comes to an
end. So why has the pound stalled? There
are three factors weighing on sterling:
fears about growth, the UK’s exposure to
Europe and investors’ reactions to changes
to the tax regime.
Firstly, although the market broadly wel-
comed plans to cut public spending,
Duncan Higgins from Caxton FX says that
the focus has now turned to the impact
this could have on economic growth:
“There are risks that these cuts could
undermine the strength of the recovery.
Monetary policy will likely be kept loose
longer than was initially expected to
accommodate these cutbacks, which pro-
vides another drag on the currency.”
Added to this is the enormity of the task at
hand: the UK’s net debt burden as a per-
centage of GDP has surged in recent years
(see chart) and this round of spending cuts
is only the tip of the iceberg.
Secondly, the UK’s largest trading part-
ner is Europe, and with growth there
expected to slow as austerity measures and
CITYA.M. 2 JUNE 2010
budget constraints kick in, the UK could
find that its exports fall even though the
pound is weak. This is already being seen
in the economic data – the UK’s trade
deficit actually widened in March to
£3.7bn from £2.2bn in February, according
to figures from the Office for National
Statistics, and this was before the extent of
the debt crisis in Southern Europe came to
the public’s attention.
Lastly, some argue that the UK’s new tax
regime could hurt sterling. Laffer
Associates, an independent economic
research company founded by Art Laffer,
the supply-side economist who became
popular during the administration of
President Ronald Reagan in the US, has
noted that a paradigm shift in the UK’s
attitude to taxation will weigh on the
pound. “If the United Kingdom continues
travelling down its current policy path, the
result will be economic stagnation à la the
1970s”. an even more difficult financial position”.
Planned increases to capital gains tax Laffer Associates argues that overly com-
and value added tax, along with the hike plex progressive tax regimes will be too
in the top rate of income tax to 50 per cent high to bear and will stunt economic
from 40 per cent, could actually reduce the growth for the foreseeable future. Instead
amount of revenue the government col- it suggests “fundamental tax reform that
lects, it argues. “Britain’s government replaces the UK’s progressive tax system
believes that these increases in tax rates with a flatter, more broad-based tax struc-
are necessary to prevent financial catastro- ture,” as the best remedy to the UK’s prob-
phe. However, it fails to remember that lems.
raising tax rates does not necessarily raise The extent of Britain’s economic and fis-
revenue. The Laffer curve states that after a cal problems is truly epic, and it is only at
certain tax rate, revenues begin falling, the start of its journey to recovery. All of
and this is exactly what the UK could expe- which means that right now there are few
rience over the coming years – putting it in reasons to support a stronger pound.
ANALYSIS l UK net debt as a percentage of GDP
Source: Laffer Associates
65%
55%
45%
35%
25%
1977 1983 1989 1995 2001 2007
CITYA.M. 2 JUNE 2010
The dollar is a tough act to follow
With the greenback overbought,
the hunt is on for an alternative
safe haven, writes Juliet Samuel
W
ITH speculation growing that
the dollar could be forming a
short-term top, Deutsche Bank
has released research suggesting
“an increasing likelihood of dollar correc-
tion”. The bank suggests that the dollar’s
rally to over two standard deviations above
its 200-day moving average is a strong indi-
cator that a dip could be imminent.
As the bank reports, only on seven occa-
sions in the last 20 years has the dollar
been overbought so far from its average
(see chart) and “each time the dollar rally
has over-run to this extent, a significant
pull-back has materialised.” But if the dol-
lar dips, which currencies can investors
expect to see rise?
One factor driving the dollar rise is the
flight towards a safe haven currency in
volatile times. Over the past eight years,
investors have diversified by buying the
euro, which is now involved in over half of
all dollar index trading. So the possibility
of a dollar correction might prompt a
switch back to the single currency. Bank of
New York Mellon’s Simon Derrick says:
“Over the course of the last two weeks
there has been quite a bit of buying back
of euros precisely because people have
been looking for some kind of correction
to take place.”
But with ongoing uncertainty, includ-
ing Friday’s downgrade of Spanish debt,
this might be unwise. Derrick sees the
euro buy-backs as no more than a rebal-
ancing of the extreme shorts seen two
weeks ago. The overall trend for the euro
is downwards: “So much of this is not
about the dollar; it’s about a loss of faith
in the euro.”
Likewise, Deutsche Bank advises that
investors looking to short the dollar “are
better off positioning themselves in the
more equity-sensitive “high-beta’
European currencies” such as the Swiss
Investment | Foreign Exchange
There aren’t many pil-
lars to support ster-
ling this year
Picture: Micha
Theiner/ CITY A.M
The dollar is nearly as franc, Norwegian or Swedish kronor and
as impenetrable as sterling. While all of these currencies look
Fort Knox overbought, it is by significantly less than
the dollar. Still, Derrick recommends stay-
Picture: REX ing clear of Europe entirely: “The only cur-
rency I’d really consider as a credible
alternative is the Canadian dollar.”
Investors might look at the yen, which
is trading close to its 200-day moving aver-
age. But a dollar-yen downslide is limited
by potential market intervention. As
Michael Hewson of CMC Markets says:
“The bank of Japan will not tolerate a
strong yen because it will harm its
exporters, who are important for econom-
ic growth.”
So investors must look further afield. If
equity rises make increased risk palatable,
traders could consider the Australian or
New Zealand dollar, which both show
high intra-day correlations with the green-
back. Or, with the Pru-AIG deal in doubt,
Hewson says: “sterling could be buoyed up
in the short-term” – perhaps for just long
enough to catch a dollar downslide.
25
THE TIPSTER
WITHOUT A
PRU DEAL,
STERLING
RALLIES
A
S PREDICTED in this column yesterday,
a collapse in the Prudential-AIG deal
was always going to see cable pop
upwards as a result of the massive
hedge that was in place needing to be
unwound. Cue a 260 pip rally yesterday fol-
lowing news that the deal is almost certainly
off by the end of the day. It rallied all the way
to first resistance at $1.4725 and a close
above $1.46 should bring the next resistance With no deal, cable jumps Picture: REUTERS
around $1.48 in to play this week. Spread Co
offers a spread on sterling-dollar of $1.4697- euro-dollar at $1.2120-$1.2121.
$1.4700. The Swiss franc has had a mixed week,
The yen has continued to show weakness dropping to a low against sterling but still
after the weekend news of splits in the riding high against the faltering euro. Swiss
Japanese government sent the dollar-yen to central bank intervention has kept the franc
its highest levels for over a week at ¥91.60. relatively low but with the dollar looking
Expect the yen to weaken further on the back overbought, investors are looking for an alter-
of stronger US fundamentals and buy on dips native safe haven. As Eurozone fundamentals
towards ¥90.30. CMC Markets’ spread on deteriorate, the franc is in a good position to
dollar-yen is ¥91.20-¥91.22. catch the extra demand. Spreadex offers
The euro continues to get hammered and euro-Swiss franc at SFr1.4165-SFr1.4171.
hit a fresh four-year low today against the The Mexican peso could weaken on the
dollar after warnings from China that the back of a sluggish global recovery, particular-
Eurozone sovereign debt crisis could derail ly if there is a slowdown in China and the US.
the global economic recovery. Despite China’s The peso is sensitive to global growth due to
reassurance that it still plans to hold onto its Mexico’s dependence on oil as its biggest
reserves, the bears will have their next tar- export, which has fallen in recent days. IG
gets in sight at $1.1300, another 6.5 per cent Index offers ₱12.89875-₱12.90875.
below current levels. Capital Spreads quotes Juliet Samuel
But a dollar correction could be fleet- euro, has suddenly come into question
ing. The continued European debt tur- and investors are placed in the position of
moil means that the greenback is still the trying to find credible alternatives.”
only safe haven. As Derrick says: “The Unless investors find one, a big dollar cor-
largest alternative reserve currency, the rection could prove elusive.
ANALYSIS l The dollar is trading well above average - standard deviations away from the mean
2
1
0
-1
-2
-3
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
 26 Markets & Investments CITYA.M. 2 JUNE 2010

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Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .291.10 +6.20 314.80 216.75 Compass . . . . . . . . . . . . . . . . . .537.00 +1.50 567.50 307.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .55.05 –0.85 71.75 31.75 Schroders . . . . . . . . . . . . . . . . .1335.00 +6.00 1450.00 764.00
3i Infrastructure . . . . . . . . . . . . .108.50* –0.10 114.40 85.25 Cookson . . . . . . . . . . . . . . . . . . .452.30 –22.50 616.00 220.00 Jardine Lloyd Thompson. . . . . . .561.50 +7.00 604.50 393.00 Schroders N/V. . . . . . . . . . . . . .1057.00 +6.00 1185.00 643.50
A.B. Foods . . . . . . . . . . . . . . . . .963.00 +6.00 1045.00 718.50 Croda Intl . . . . . . . . . . . . . . . . . .963.50* +11.00 1047.00 498.50 Johnson Matthey . . . . . . . . . . .1559.00 +26.00 1814.00 1077.00 Scot. & Sthrn Energy. . . . . . . . .1079.00 +27.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .140.00* –1.00 155.60 111.00 CSR . . . . . . . . . . . . . . . . . . . . . .390.20 –5.80 524.00 320.75 Kazakhmys . . . . . . . . . . . . . . . . 1166.00 –19.00 1634.00 567.50 Scottish Mortgage. . . . . . . . . . . .571.00 –1.00 623.50 376.00
Admiral. . . . . . . . . . . . . . . . . . .1315.00 +25.00 1403.00 833.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .484.50 –2.70 539.00 264.25 Kesa Electricals . . . . . . . . . . . . .107.50 –0.10 162.00 99.75 SEGRO . . . . . . . . . . . . . . . . . . . .287.50 +1.40 403.10 250.00
Aegis . . . . . . . . . . . . . . . . . . . . . 115.80 –2.20 137.30 79.75 Dana Petroleum . . . . . . . . . . . .1048.00 –3.00 1549.00 968.50 .LQJÀVKHU . . . . . . . . . . . . . . . . . .224.60* +0.90 255.00 171.40
Afren . . . . . . . . . . . . . . . . . . . . . .94.70 +0.85 111.00 38.50 Davis Service . . . . . . . . . . . . . . .387.70 –1.30 442.30 307.00 Ladbrokes . . . . . . . . . . . . . . . . .139.20 –2.20 177.31 114.60 Serco . . . . . . . . . . . . . . . . . . . . .612.00 +1.00 656.50 394.30
Aggreko . . . . . . . . . . . . . . . . . .1278.00 +14.00 1300.00 476.25 De La Rue . . . . . . . . . . . . . . . . . .903.00 +12.00 1021.00 808.50 Lancashire Hldgs . . . . . . . . . . . .477.10 +0.70 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1221.00 +23.00 1242.00 921.00
Alliance Trust . . . . . . . . . . . . . . .317.80 –2.10 352.70 260.25 Debenhams . . . . . . . . . . . . . . . . .59.45 +0.30 96.25 55.90 Land Securities . . . . . . . . . . . . . .609.50 +8.50 743.50 415.25 Shaftesbury . . . . . . . . . . . . . . . .380.00 +6.10 426.50 284.00
AMEC . . . . . . . . . . . . . . . . . . . . .790.00* –5.00 891.00 603.50 Derwent London . . . . . . . . . . . .1340.00* +4.00 1490.00 844.00 Legal & General . . . . . . . . . . . . . .81.85* +2.80 94.40 49.37 Shire. . . . . . . . . . . . . . . . . . . . .1407.00 –14.00 1526.00 798.50
Amlin . . . . . . . . . . . . . . . . . . . . .376.60 +1.80 428.50 291.00 Dexion Absolute . . . . . . . . . . . . .138.90 –1.50 148.00 107.75 Lloyds Banking Gp . . . . . . . . . . . .57.41 +0.79 75.58 39.62 SIG . . . . . . . . . . . . . . . . . . . . . . . 118.60 — 146.60 82.25
Anglo American . . . . . . . . . . . .2647.50 –13.50 3015.50 1540.00 Diageo . . . . . . . . . . . . . . . . . . .1058.00 +3.00 1176.00 829.00 Logica . . . . . . . . . . . . . . . . . . . .128.30 +1.60 149.10 70.00 Smith & Nephew . . . . . . . . . . . . .626.50 — 700.50 435.25
Antofagasta . . . . . . . . . . . . . . . .883.50* –2.50 1100.00 546.50 Dimension Data . . . . . . . . . . . . . .99.85 –1.85 105.00 53.75 London Stock Exchange . . . . . . .638.50 –3.50 949.50 606.00 Smiths . . . . . . . . . . . . . . . . . . .1036.00 +2.00 1177.00 649.00
Aquarius Platinum . . . . . . . . . . .376.10 –0.30 490.00 172.75 Domino’s Pizza . . . . . . . . . . . . . .354.10 +0.50 371.20 192.75 Lonmin . . . . . . . . . . . . . . . . . . .1677.00 –7.00 2198.00 950.00 SOCO Intl . . . . . . . . . . . . . . . . .1606.00 +6.00 1796.00 1068.00
ARM Holdings . . . . . . . . . . . . . . .252.50 +6.30 263.70 103.00 Drax . . . . . . . . . . . . . . . . . . . . . .340.50 +4.90 497.50 321.50 Man . . . . . . . . . . . . . . . . . . . . . .236.60 +3.80 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .800.00 –22.00 928.00 493.50
Arriva . . . . . . . . . . . . . . . . . . . . .764.00 +0.50 782.50 378.50 DSG Intl . . . . . . . . . . . . . . . . . . . .26.20 –0.32 39.75 19.25 Marks & Spencer. . . . . . . . . . . . .356.70 +3.00 412.70 277.75 Spirax-Sarco Eng . . . . . . . . . . .1415.00 –14.00 1591.00 749.50
Ashmore . . . . . . . . . . . . . . . . . . .248.00 –3.40 311.20 183.25 Dunelm . . . . . . . . . . . . . . . . . . . .368.70 –3.50 438.40 202.00 Meggitt . . . . . . . . . . . . . . . . . . . .300.00 +0.80 328.70 151.75 Spirent Comms . . . . . . . . . . . . . .108.30 –0.10 127.80 54.50
Astrazeneca . . . . . . . . . . . . . . .2904.50 +3.00 3136.00 2472.00 Easyjet . . . . . . . . . . . . . . . . . . . .412.70 +11.70 499.90 260.00 Melrose . . . . . . . . . . . . . . . . . . .218.90 –2.40 251.50 87.75
Atkins(Ws) . . . . . . . . . . . . . . . . .683.50 +16.50 730.00 511.50 Edinburgh Inv Tst . . . . . . . . . . . .381.70 +1.60 412.40 297.50 Mercantile IT . . . . . . . . . . . . . . . .890.00 +3.50 1002.00 716.50 Sports Direct Intl . . . . . . . . . . . . . .99.15 –2.65 134.00 72.50
Autonomy Corp . . . . . . . . . . . .1754.00 +2.00 1897.00 1121.00 Electrocomponents . . . . . . . . . . .216.00 +2.30 245.00 134.25 Michael Page Intl. . . . . . . . . . . . .366.60* –4.30 461.50 218.50 SSL Intl . . . . . . . . . . . . . . . . . . . .802.50 –5.50 893.50 481.25
Aveva . . . . . . . . . . . . . . . . . . . . 1168.00 –5.00 1237.00 661.00 EnQuest . . . . . . . . . . . . . . . . . . .100.20 +2.55 112.70 87.35 Micro Focus . . . . . . . . . . . . . . . .477.60 +1.80 550.00 300.90 St James’s Place . . . . . . . . . . . . .249.70 +1.50 296.90 167.00
Aviva . . . . . . . . . . . . . . . . . . . . .328.60 +8.70 474.00 274.75 Eurasian Nat Res . . . . . . . . . . . .998.00* –6.00 1276.00 582.00 Millen & Copthorne . . . . . . . . . . .408.20 –5.40 496.30 217.25 Stagecoach. . . . . . . . . . . . . . . . .183.40 –0.70 204.90 114.75
Babcock International . . . . . . . . .572.50 –1.00 660.50 448.50 Euromoney Inst Inv . . . . . . . . . . .592.50* +4.00 599.50 191.25 Misys . . . . . . . . . . . . . . . . . . . . .227.30 +2.20 264.50 157.25 Standard Chartered . . . . . . . . . .1662.00 +25.00 1847.00 1115.00
BAE Systems . . . . . . . . . . . . . . .324.00* +1.30 389.90 294.20 Experian . . . . . . . . . . . . . . . . . . .631.50 +13.00 664.50 434.00 Mitchells & Butlers . . . . . . . . . . .323.00 +6.00 343.90 221.75 Standard Life . . . . . . . . . . . . . . .183.30 +1.90 237.00 172.60
Balfour Beatty . . . . . . . . . . . . . . .255.90* +2.60 328.85 238.50 F&C Comm Prop . . . . . . . . . . . . . .95.00 –0.05 96.80 73.50 MITIE . . . . . . . . . . . . . . . . . . . . .228.20 –0.50 281.70 204.25 TalkTalk . . . . . . . . . . . . . . . . . . .122.80 +1.30 147.10 106.60
Barclays . . . . . . . . . . . . . . . . . . .303.30* –1.80 394.25 255.00 Ferrexpo . . . . . . . . . . . . . . . . . . .258.10* –8.90 396.20 112.00 Mondi . . . . . . . . . . . . . . . . . . . . .409.90 –8.60 488.00 182.00 Talvivaara Mining . . . . . . . . . . . .365.00 –5.00 501.50 315.00
Barratt Development . . . . . . . . . .106.30 –1.70 193.31 91.80 FirstGroup . . . . . . . . . . . . . . . . .382.10 +5.30 448.80 322.75 Monks Inv Tst . . . . . . . . . . . . . . .290.70 +1.70 321.20 222.00 Tate & Lyle . . . . . . . . . . . . . . . . .427.20 +7.00 481.40 284.75
BBA Aviation . . . . . . . . . . . . . . .189.40 +2.30 220.00 105.00 Foreign & Col Inv Tst. . . . . . . . . .272.80 –4.40 297.20 210.25 Morrison Wm . . . . . . . . . . . . . . .266.10* +1.90 306.30 234.25 Taylor Wimpey . . . . . . . . . . . . . . .33.56 –0.67 54.90 30.75
Beazley. . . . . . . . . . . . . . . . . . . . 112.10 –1.10 122.00 86.00 Fresnillo . . . . . . . . . . . . . . . . . . .905.50* +1.50 935.00 438.00 Murray Intl Tst . . . . . . . . . . . . . . .816.00 –8.00 893.50 575.00 Telecity . . . . . . . . . . . . . . . . . . . .386.00 +3.00 455.00 272.00
Bellway. . . . . . . . . . . . . . . . . . . .689.00* –3.50 927.50 591.50 G4S . . . . . . . . . . . . . . . . . . . . . .262.50* –0.30 285.70 197.90 National Express. . . . . . . . . . . . .229.90 –1.10 256.80 135.08 Templeton Emrg Mkts . . . . . . . . .526.50 –4.50 598.00 346.50
Berkeley . . . . . . . . . . . . . . . . . . .798.50 –2.50 989.50 716.50 Genesis Emerging Mkts Fd . . . . .453.00 –0.60 484.00 370.00 National Grid . . . . . . . . . . . . . . .503.00 +3.70 607.65 466.71
BG . . . . . . . . . . . . . . . . . . . . . .1088.50 +27.50 1248.00 966.90 GKN . . . . . . . . . . . . . . . . . . . . . .122.00 –2.20 155.00 67.49 Next . . . . . . . . . . . . . . . . . . . . .2087.00* +8.00 2360.00 1402.00 Tesco . . . . . . . . . . . . . . . . . . . . .412.70* +1.10 454.90 347.40
BHP Billiton . . . . . . . . . . . . . . .1874.50 –38.50 2346.00 1274.50 GlaxoSmithKline . . . . . . . . . . . . 1158.50* +1.50 1347.00 1015.50 Northumbrian Water . . . . . . . . . .278.40 +0.90 296.30 219.90 Thomas Cook . . . . . . . . . . . . . . .206.20 –1.50 277.20 191.90
BlackRock Mining . . . . . . . . . . . .579.50 –3.00 654.50 346.00 Great Portland Estates . . . . . . . .313.10 +5.40 332.10 203.75 Old Mutual . . . . . . . . . . . . . . . . . 113.00* –1.00 127.20 70.70 Tomkins . . . . . . . . . . . . . . . . . . .242.20* –1.60 258.50 135.00
BlueBay . . . . . . . . . . . . . . . . . . .323.70 +2.00 393.00 178.25 Greene King . . . . . . . . . . . . . . . .398.50 +2.00 504.00 359.50 Partygaming . . . . . . . . . . . . . . . .268.30 +7.20 339.70 213.30 Travis Perkins . . . . . . . . . . . . . . .798.50 +8.00 915.00 461.00
Booker . . . . . . . . . . . . . . . . . . . . .40.76 +0.76 49.50 31.00 Halfords . . . . . . . . . . . . . . . . . . .499.30 +8.50 524.00 299.00 Pearson . . . . . . . . . . . . . . . . . . .943.50 –7.00 1069.00 574.00 TUI Travel . . . . . . . . . . . . . . . . . .232.90 –4.80 313.90 215.50
BP . . . . . . . . . . . . . . . . . . . . . . .430.00* –64.80 658.20 411.50 Halma . . . . . . . . . . . . . . . . . . . . .244.70 –3.90 278.50 164.75 Pennon . . . . . . . . . . . . . . . . . . . .532.00 +7.00 558.00 434.40 Tullett Prebon . . . . . . . . . . . . . . .321.40 –0.90 436.20 261.20
Brit Insurance . . . . . . . . . . . . . . .756.00 +1.50 831.60 709.00 Hammerson . . . . . . . . . . . . . . . .365.20 +5.00 460.30 272.25 Persimmon . . . . . . . . . . . . . . . . .406.90 –1.10 534.50 340.25 Tullow Oil . . . . . . . . . . . . . . . . . 1131.00 +14.00 1375.00 834.50
British Airways . . . . . . . . . . . . . .203.00 +1.80 255.80 117.30 Hansen Trans . . . . . . . . . . . . . . . .85.80 –3.30 172.50 78.00 Petrofac . . . . . . . . . . . . . . . . . . 1153.00 +27.00 1294.00 580.00 UK Commercial Prop. . . . . . . . . . .80.15 +0.70 84.90 59.50
British Amer. Tob . . . . . . . . . . .2115.00 +72.50 2335.50 1637.00 Hargreaves Lansdown . . . . . . . .344.40 +0.20 387.00 197.25 Petropavlovsk . . . . . . . . . . . . . .1246.00 +44.00 1370.00 515.00 Ultra Electronics . . . . . . . . . . . .1585.00 +14.00 1650.00 1058.00
British Empire Tst . . . . . . . . . . . .425.40* –3.10 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . .100.00 –1.10 119.00 80.00 Premier Farnell . . . . . . . . . . . . . .216.30* –2.50 249.70 121.25 Unilever . . . . . . . . . . . . . . . . . .1861.00* –7.00 2024.00 1419.00
British Land . . . . . . . . . . . . . . . .456.90 +6.70 532.00 353.00 Henderson . . . . . . . . . . . . . . . . .132.30 –3.10 157.80 81.50 Premier Oil . . . . . . . . . . . . . . . . 1152.00 –14.00 1431.00 984.00 United Utilities . . . . . . . . . . . . . .552.00 +12.50 575.00 429.00
Britvic. . . . . . . . . . . . . . . . . . . . .464.00* +3.80 497.70 253.25 Heritage Oil. . . . . . . . . . . . . . . . .431.90 –3.80 630.00 409.80 Provident Financial . . . . . . . . . . .806.00* –5.00 986.00 763.00 Utd Business Media . . . . . . . . . .508.00 –3.00 579.50 364.75
Brown(N.) . . . . . . . . . . . . . . . . . .250.00 –2.00 284.30 204.25 Hikma Pharma . . . . . . . . . . . . . .698.00 +25.00 730.00 412.00 Prudential . . . . . . . . . . . . . . . . . .575.50 +34.00 665.00 350.25
BSkyB . . . . . . . . . . . . . . . . . . . .570.50 –5.50 637.50 423.75 Hiscox . . . . . . . . . . . . . . . . . . . .338.20 +0.10 369.30 279.50 PZ Cussons . . . . . . . . . . . . . . . .293.80 +4.60 300.20 168.00 Vedanta Resources . . . . . . . . . .2305.00 –7.00 2967.00 1262.00
BT . . . . . . . . . . . . . . . . . . . . . . .129.50 +2.50 151.00 88.80 Hochschild Mining . . . . . . . . . . .292.70 +2.00 370.60 220.00 Qinetiq . . . . . . . . . . . . . . . . . . . .128.70 –0.80 179.10 113.90 Victrex . . . . . . . . . . . . . . . . . . .1049.00 –5.00 1078.00 498.50
Bunzl . . . . . . . . . . . . . . . . . . . . .726.00* +9.50 784.50 478.50 Home Retail . . . . . . . . . . . . . . . .249.60* –2.40 336.50 235.00 Randgold Resources. . . . . . . . .6195.00 +205.00 6285.00 3351.00 Vodafone . . . . . . . . . . . . . . . . . .138.50 +0.35 153.80 111.20
Burberry . . . . . . . . . . . . . . . . . . .704.00 +13.50 745.50 359.00 Homeserve . . . . . . . . . . . . . . . .2146.00 +35.00 2161.00 1336.00 Reckitt Benckiser . . . . . . . . . . .3256.00 +11.00 3667.00 2635.00 VT . . . . . . . . . . . . . . . . . . . . . . .743.00 +1.00 773.00 416.00
Cable & Wire Comms . . . . . . . . . .59.25 +0.90 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .635.50* +7.70 766.80 487.00 Reed Elsevier . . . . . . . . . . . . . . .478.90 –2.70 548.00 403.75 Weir . . . . . . . . . . . . . . . . . . . . . .915.50* –13.50 1076.00 437.50
Cable & Wire Wwide . . . . . . . . . . .81.50 +1.70 94.80 68.60 Hunting . . . . . . . . . . . . . . . . . . .486.10 –15.90 659.50 377.00 Regus . . . . . . . . . . . . . . . . . . . . . .88.05 –0.50 125.50 58.75 Wetherspoon(J.D.) . . . . . . . . . . .426.00 –4.70 556.00 348.00
Cairn Energy. . . . . . . . . . . . . . . .405.00 +2.10 441.50 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .387.00 –0.80 478.30 291.70 Rentokil Initial . . . . . . . . . . . . . . .120.60 –0.70 140.20 80.50 WH Smith . . . . . . . . . . . . . . . . . .438.30* –9.10 551.00 405.25
Caledonia Invs . . . . . . . . . . . . .1609.00 –6.00 1759.00 1459.00 IG . . . . . . . . . . . . . . . . . . . . . . . .379.60 –0.50 436.30 216.50 Resolution . . . . . . . . . . . . . . . . . .61.85 –0.35 100.00 59.30 Whitbread . . . . . . . . . . . . . . . . .1407.00* +22.00 1645.00 778.50
Capita . . . . . . . . . . . . . . . . . . . . .780.00 –0.50 829.50 643.50 Imagination Tech Gp . . . . . . . . . .235.80 +5.80 289.30 80.00 Rexam . . . . . . . . . . . . . . . . . . . .316.40* +2.00 330.50 222.50 William Hill . . . . . . . . . . . . . . . . .175.40 –0.90 219.50 160.50
Capital & Counties . . . . . . . . . . .104.40 +0.40 125.40 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .646.00 –9.00 742.00 275.25 Rightmove . . . . . . . . . . . . . . . . .715.50* +18.00 725.50 334.00 Witan Inv Tst . . . . . . . . . . . . . . . .434.50 –7.50 487.00 329.50
Capital Shopping Centres . . . . . .329.70* +1.70 580.00 300.20 Imperial Tobacco. . . . . . . . . . . .1840.00 +40.00 2159.00 1547.00 Rio Tinto . . . . . . . . . . . . . . . . . .3152.00 –37.00 4104.00 1822.00 Wolseley . . . . . . . . . . . . . . . . . .1662.00 +12.00 1742.00 986.00
Carillion . . . . . . . . . . . . . . . . . . .319.00* +2.50 361.90 236.75 Inchcape. . . . . . . . . . . . . . . . . . .283.70 –5.40 347.00 270.20 RIT Capital Partners . . . . . . . . .1088.00 –3.00 1159.00 861.50
Carnival . . . . . . . . . . . . . . . . . .2614.00* –14.00 2937.00 1431.00 Informa . . . . . . . . . . . . . . . . . . . .374.70 –3.30 439.40 216.00 Rolls Royce . . . . . . . . . . . . . . . .588.00* –1.50 631.50 321.25 Wood Group (John). . . . . . . . . . .318.90 –15.00 411.70 231.25
Catlin . . . . . . . . . . . . . . . . . . . . .334.80 +8.30 380.50 284.75 Inmarsat . . . . . . . . . . . . . . . . . . .760.50 +5.00 819.00 491.00 Rotork . . . . . . . . . . . . . . . . . . .1340.00 –29.00 1482.00 779.50 WPP . . . . . . . . . . . . . . . . . . . . . .648.00 –8.00 744.00 380.50
Centrica . . . . . . . . . . . . . . . . . . .274.50* –0.30 320.00 212.50 Intercontl Hotels . . . . . . . . . . . .1094.00* — 1175.00 584.50 Royal Bank Of Scot . . . . . . . . . . . .46.80 +0.07 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1006.50 –9.00 1344.50 555.10
Charter Intl . . . . . . . . . . . . . . . . .678.50 –16.50 855.50 395.25 Intermediate Capital . . . . . . . . . .270.50 +10.40 332.00 170.25 Royal Dutch Shell A . . . . . . . . .1812.00* –11.00 2068.50 1431.00 Yell Group. . . . . . . . . . . . . . . . . . .32.14 –1.56 86.00 20.25
Chemring . . . . . . . . . . . . . . . . .3146.00 –24.00 3711.00 1910.00 Intertek . . . . . . . . . . . . . . . . . . .1410.00 –12.00 1576.00 987.50 Royal Dutch Shell B . . . . . . . . .1741.00* –10.50 1997.50 1437.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chloride Group . . . . . . . . . . . . . .280.00 +1.50 308.40 129.00 Intl Personal Fin . . . . . . . . . . . . .218.50 –1.50 283.00 65.75 RSA Insurance . . . . . . . . . . . . . . 118.70* +1.50 142.00 113.10
Close Bros . . . . . . . . . . . . . . . . .713.50 –2.50 806.50 623.00 Intl Power . . . . . . . . . . . . . . . . . .291.30* +1.00 354.00 228.00 SABMiller . . . . . . . . . . . . . . . . .1947.00 –4.00 2090.00 1210.00 * Ex-Dividend † Suspended
Cobham . . . . . . . . . . . . . . . . . . .231.20* +0.20 278.60 164.90 Invensys . . . . . . . . . . . . . . . . . . .275.30 –1.60 350.30 212.25 Sage . . . . . . . . . . . . . . . . . . . . . .240.10* +2.40 260.50 167.20
COLT Group . . . . . . . . . . . . . . . .127.80 +1.60 144.20 98.25 Investec . . . . . . . . . . . . . . . . . . .487.80 –2.30 565.00 309.75 Sainsbury(J) . . . . . . . . . . . . . . . .326.80* +2.80 373.00 306.50 www.interactivedata.com

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Fears over BP’s survival drags FTSE 100 Slide in energy shares hits
lower as its latest bid to plug leak fails US as jittery investors sell
THELONDON
when you do that, the backdrop is
still reasonably promising,” said
Mike Lenhoff, chief strategist at
BHP Billiton, Kazakhmys and Rio
Tinto were the worst-off dropping
1.2 to two per cent.
THENEW YORK the well, tumbled 15 per cent.
Halliburton, which performed some
work on the well, lost 14.8 per cent

REPORT Brewin Dolphin.

BP was the standout blue chip fall-
er, off 13.1 per cent after abandon-
Prudential topped the blue chip
leader board, up 6.3 per cent, with
its bid for rival AIG’s Asian unit
REPORT after Goldman Sachs removed the
company from its “conviction buy
list.” Transocean, which owns the rig,
ing its “top kill” attempt to plug the close to collapse after the British slid 11.9 per cent to $50.04, while the

T U
OP shares fell yesterday led by well on Saturday after several insurer failed to secure a price cut, S stocks fell yesterday as energy S&P energy index shed 4.3 per cent.
a plunge in BP shares after the attempts to pump thousands of bar- triggering talk it might itself shares slid after the latest The Dow Jones industrial average
company’s failure to stem an rels of mud down the well, seen as become a takeover target. failed attempt to halt the oil dropped 112.61 points, or 1.11 per
oil spill in the Gulf of Mexico, the best method, failed to stop the spill in the Gulf of Mexico and cent, to 10,024.02. The Standard &
but they finished off lows thanks to flow of oil. ANALYSIS l FTSE the US government announced a Poor’s 500 Index fell 18.70 points, or
upbeat US construction data. Peer Royal Dutch Shell fell 0.6 per criminal probe into the disaster. 1.72 per cent, to 1,070.71. The Nasdaq
The FTSE 100 closed down 25.13 cent. BG Group, however, put on 2.6 6,000 5,163.30 Investors punished shares of com- Composite Index gave up 34.71
points or 0.5 per cent at 5,163.30, its per cent, bolstered by an upgrade to 5,800
1 Jun panies directly involved with the spill points, or 1.54 per cent, at 2,222.33.
lowest close since 26 May, in a chop- “buy” from “hold” by Societe and losses accelerated into the close On the upside, Apple rose 1.5 per
5,600
py session in which the index Generale. following the news of the investiga- cent to $260.83 as a successful inter-
dropped as low as 5,063.20. Miners were hit by weaker metals 5,400 tion. national launch of its iPad prompted
“We are in the midst of an prices after China’s factories scaled 5,200
“It’s the fact that no one can really analysts to raise earnings estimates.
extraordinarily volatile period ... but back production last month and quantify the cost of the BP disaster In merger news, ev3 jumped 17.4 per
I think you’ve got to look at the mar- eased back hiring in response to a 5,000 out there,” said Gary Bradshaw, port- cent to $22.22 after Covidien agreed
kets in the context of the broader critical drop in new orders, sparking 4,800 folio manager at Hodges Capital. to buy the maker of stents and other
fundamental picture, and I think investor worries over demand. 1 Mar 19 Mar 12 Apr 30 Apr 21 May US-listed shares of BP, which owns vascular devices for $2.6bn.
 City Focus
Shopping around is the future of law
A new report looks at what consumers really
want from high street firms, writes Jon Robins
C
OMMENTATORS talk excitedly
about “Tesco Law” and the ongoing
liberalisation of legal services as
though it were a latter day gold
rush led by big name supermarkets and
banks. But what is it that consumers
want? New research suggests that there is
little enthusiasm on the part of the public
to associate legal services with high street
big name brands.
In a survey of more than 2,000 people
commissioned by the legal research com-
pany Jures, consumers were asked if they
could purchase legal advice from house-
hold names from the retail, banking and
insurance sectors, which one would they
go for. While the most popular of the big
name brands was Marks & Spencer (14 per
cent), the big news was that more than
half remained unmoved by the prospect of
big names (54 per cent). Despite the hype,
only one in 20 consumers linked the retail-
er (Tesco) that has become synonymous
with the new market with legal services.
The results are in a new report
Shopping Around: What Consumers Want
from the New Legal Services Market, out
last week. From October 2011, the first
alternative business structures will open
their doors for business under the Legal
Services Act. This move has been likened
to the law’s equivalent of the City’s Big
Bang in the 1980s which came about as a
result of the deregulation of financial
services and banking. ABSs will enable
non-law businesses such as supermarkets,
banks and insurers to have to compete in
the legal services for the first time.
Professor Richard Moorhead, deputy
head of Cardiff Law School, is unsurprised
that consumers don’t automatically gravi-
tate towards the comfort of familiar
brands. “The findings suggest there is
everything to play for,” reflects Prof
Moorhead; adding that his own research
found that consumers, in his words,
“don’t do much shopping around”. The
overall winner in the Jures survey was
M&S. “It is seen to be good quality and
value for money which is, of course, the
magic combination here,” notes Prof
Moorhead. People were asked which fac-
tors were likely to influence their decision
to buy legal services, “reassurance of a
well know brand” (26 per cent) came some
way behind “quality of service” (60 per
cent); “fixed prices” (35 per cent); “ease of
location” (32 per cent); and “speed of serv-
ice” (27 per cent).
BRAND AND QUALITY
But, as Prof Moorhead notes, “brand” and
“quality” are hard to separate. “Most con-
sumers have absolutely no idea of how to
measure ‘quality of service’,” he argues.
“The finding might reinforce the impor-
tance of the “reassurance of well-known
brand”. It might well be that they use the
brand as a proxy for quality.”
The practical challenge for firms is
achieving brand visibility in a newly-liber-
alised, increasingly crowded marketplace.
Client recognition of law firms is poor.
The Law Society’s Gazette recently report-
ed that more six out of 10 consumers
couldn’t name a single firm, despite the
fact that almost eight out of 10 had used a
solicitor before.
Law firms have been doing their best to
change this by harnessing collective mar-
keting might through networks such as
Injury Lawyers 4U, Quality Solicitors and
Loyalty Law. So far few legal brands have
impinged on the public consciousness in
any meaningful way with the possible
exception of the claims management
HOW TO LEARN 27
FROM MOURINHO
| Law SEE OUR CAREERS
PAGES, TOMORROW
company Claims Direct. The law firm
Russell Jones & Walker bought the Claims
Direct name relaunching the service in
2007 with a £5m annual advertising cam-
paign.
143x127
RJW chief exec Neil Kinsella is sceptical
about the collective approach. “If solici-
tors are banding together to take over a
market that they have already effectively
got, all they’re effectively doing is scrab-
bling for market share and then paying
somebody in the middle to do the market-
ing,” he says.
A couple of weeks ago QualitySolicitors
launched its national “high street” branch
network with the first 15 of 300 planned
“branches” across the UK. A number of
well-established regional firms had a com-
plete make-over, reappearing as
QualitySolicitors Burroughs Day,
QualitySolicitors Lockings, etc.
Craig Holt, chief executive of
QualitySolicitors, is taking inspiration
from a well-known brand from the retail
world. Specsavers became a fixture on the
high street following deregulation of the
opticians market in the 1980s. The Legal
Services Board, drawing a parallel
between the reconfiguration of the opti-
cians’ market and legal services, last year
noted that a small number of chains cover
70 per cent of the market though “a sub-
stantial number of independent opti-
cians” remain.
Under the Specsavers joint venture
model, each practice is an independent
business owned by chain and practition-
ers jointly, meaning it can deliver
economies of scale on, for example, mar-
keting, while practitioners remain respon-
sible for delivering the service and A model for the there is a future for small community ticularly commercially or consumer
running the business. law industry? solicitors’ firms in a world where shoppers astute”. “So the likes of the Co-op see that
Will walking into a branch of have increasingly chosen to go local. He as being fairly fertile grounds to make
QualitySolicitors feel like walking into Picture: Micha cites “farm shops and home delivery of inroads,” he says. “Our approach is to take
Specsavers? “All aspects of each firm will Theiner CITY A.M organic vegetables” as evidence that with the ground away from them. We want to
be branded in the same way from signage “some clever marketing and a targeted adopt the retail approach, take up posi-
through to stationery and website, right local approach the consumer has gladly tions in high streets and shopping centres
down to business cards, compliment slips returned to smaller providers”. and head them off at the pass.”
and the front of house staff uniforms,” There’s “strength in numbers and firms Are lawyers going to be giving con-
Craig Holt replies. He wants the can harness marketing clout by forming sumers what they want in this post LSA
QualitySolicitors brand to be “as familiar networks”, argues Jervis. “The big advan- market? “As far as I am concerned Tesco
as going to Barclays for banking or tage that small firms have in terms of sells peas and we do law,” says IL4U’s
Thomas Cook for a holiday”. building brand is that they can use per- Martin Cockx. “You’d never go to a chi-
Claimant firms were slow to react to the sonality. The Richard Branson school of ropodist to sort out your eyesight. It is cru-
threat of newcomers such as Claims marketing which has worked very well for cial for an organisation like ours to push
Direct, which entered the market on the Virgin can be just as effective for a small the message that this is all we do.’
back of the Access to Justice Act 1999. The law firms.” Jon Robins is director of the legal research
non-lawyers took a huge amount of mar- QualitySolicitors’ Craig Holt argues that company Jures (www.jures.co.uk) and a freelance
ket share away from law firms through consumers presently “see a fragmented journalist. You can find out more about
saturation TV campaigns. The solicitor-led market” with law firms that “aren’t par- Shopping Around at www.jures.co.uk
marketing consortium Injury Lawyers 4U,
now one of the biggest-spending advertis- ANALYSIS l Legal brands ANALYSIS l Choosing a firm
ers on TV, was a successful attempt to
wrest back some of the territory lost. Are Marks & Spencer 10 20 30 40 50 60
they worried about the proliferation of Tesco
Asda 14%
5%
solicitor networks effectively diluting Don't know 2% Quality of service: 60%
their message? “No, competition from the 20%
profession is a healthy thing,” responds
partner Martin Cockx, a partner at the Fixed prices: 35%
Manchester firm Amelans who set IL4U
up. “Solicitor consortiums are, as we have If you could Convenience
proved, the way forward.” purchase (ease of location): 32%
Loyalty Law is a new scheme aimed legal advice
specifically at high street solicitors. The from the Speed of service: 27%
concept is “to build a nationally recog- following brands
nised legal brand providing a quality legal which one would Reassurance of a
well-known brand: 27%
service from smaller firms”. The “loyalty” be the most
element encompasses a number of ideas… appealing? Cheapest price: 25% Which of the following
clients rate the service, plus every time
someone uses a lawyer they receive a factors would be
“credit” against future legal purchases or Other: 4%
likely to influence
Halifax your decision
a voucher towards a non-legal reward 6%
scheme. Virgin when purchasing
Does the LSA mark the beginning of the 7% Barclays bank Don’t know: 12% legal services?
None of the above
end of the high street solicitor? Nick 34% 11%
Jervis, director of Loyalty Law, believes
 Lifestyle
28
| Motoring
The Allroad is far trendier than this distinguishes the Allroad from its
rivals.
We were testing the 3.0 TDI quattro ver-
your average estate car, with sion. The most striking first impression is
that it is just incredibly well built and so
great design to match practicality cleverly conceived. It seems to do every-
thing either very well or well enough,
without uncomfortable compromises. On
T
HE AUDI A4 Allroad has been the road the car is a surprisingly good
launched into another new seg- drive. This is in part due to a wider track of
ment that Audi seems to have creat- 20mm more than a regular Audi A4 Avant
ed. You can probably count the and an elevated ride height (up 37mm).
number of four-wheel drive estates you These are elements that make the car very
know of on one hand. The others are useful on back-country roads yet don’t
Audi’s own A6 Allroad, the Subaru seem to result in too much rolling in the
Forester and the Skoda Octavia Scout corners on the tarmac.
which at its heart is an Audi with In terms of speed the 240bhp
a Polish winged arrow on the 3.0 litre V6 engine delivers
bonnet. an acceleration time of
The A6 Allroad was 6.4 seconds which,
essentially one of the when combined with
world’s first “crossover” its safe-as-houses feel
vehicles when it was (this is thanks to the
launched in 2000, quattro four-wheel-
being a combination drive system), gives
of off-road SUV and you a surprising
practical estate car. kick in the pants
Now Audi has intro- when joining the M11.
duced its smaller A4 It’ll go on to a top speed
Allroad sibling. It’s one of of 148mph if you are crazy
the few estate cars that is cooler enough to taunt the Essex
and better-looking than the saloon constabulary.
car that spawned it, and in a market of The Allroad is either a comfortable
estate cars – hardly a trendy segment – and quiet ride with very little road noise
for cruising, or an impressive and spirited
driver for when you’re in a hurry. It feels
surefooted and you feel both confident
and safe. What’s more, it does all of this
while still delivering surprisingly good
fuel economy, so filling the car is less
painful than expected.
PREVIEW | MOTOREXPO 2010 AT CANARY WHARF
The facts: TIMOTHY BARBER
you can afford a Mercedes Docklands is going to become petrolhead
heaven next week as the area plays host to
The figures: the annual Canary Wharf London Motorexpo.
The free event see Canary Wharf’s spaces
filled with displays of many of the zippiest,
mercedes-benz.co.uk/offers funkiest and downright grooviest new cars
from some of the biggest names in the auto
For more information on our tailor-made industry. It’s a chance to ogle at the most
advanced machines around as well as gain an
packages or to book a test drive, visit us online. idea of the directions in which car design is
heading. Here are a few of the highlights:
BENTLEY CONTINENTAL SUPERSPORTS
CONVERTIBLE (pictured right)
The classic British carmaker’s four-seater
mixes those beefy Bentley proportions with
sleekness and sexiness, and the kind of power
that’ll take you from zero to 60mph in less
than four seconds.
WORDS BY
RYAN BORROFF
to all people
On our test model, Audi had toned
down the contrasting wide arches and
instead the colour of the wheel arches
matched the body. This meant there was
very little to suggest that it was actually
an Allroad other than its understated
badge at the rear. Seing as it’s actually a
bit of a rocket, this seemed deliciously
covert.
AUTOMOTIVE ALCHEMY
Inside, the car is clean and calm and possi-
bly a little dull. But what the interior lacks
in character – thanks to its minimal, func-
tional design – is more than made up for
in quality. The interior is well made and
the real wood trim is a treat: it does just
enough to break up what is quite a big
swathe of black plastic across the dash.
The car is comfortable, particularly the
leather seats, and there are enough cub-
bies to stow a few bits and pieces. But it is
the switches (some of which are in cool
chrome), the controls and the multimedia
system (Audi’s MMI system) that are a tri-
umph. It’s all so intuitive and functions so
well that you can use it straight away
without having to consult the manual.
Phone docking and dialling was a breeze
and the design and function of the inter-
face a genuine pleasure to use. For some
reason this model had virtually all of my
top 20 albums from the 80s and 90s pre-
loaded into it, which was a pleasant sur-
prise. Accessing them was easy and
similar to scrolling through the music on
an original scroll wheel iPod.
The only minor grumble was that,
when switched off, the MMI screen
defaults to a silver off screen which was
comprised of the MMI logo and Audi’s
ALFA ROMEO
The Alfa 8C Spider is the Italian marque’s
stupendously cool new soft-top, and it’ll be
on show alongside the Mito MultiAir
Cloverleaf – about the most stylish
runaround you can get.
NORTON
Motorcycles that are the very
essence of dashing English cool
are Norton’s stock in trade,
and its 2010
Norton
Commando 961
Café Racer –
and breathe –
is a thing of
real, two-
wheeled beauty.
CITYA.M. 2 JUNE 2010
familiar four rings. An all-black screen
would have been so much more stylish
and would have left the dash entirely
uninterrupted.
Perhaps the only downside of the car
was the boot, which was less generous
than I expected – I would question how
practical the car would be on a long road
trip with a couple of kids. A clever load-
carrying restraint system was no doubt
useful but just appeared to reduce the
boot size further (although I could have
removed it). A reversible rubberised load
mat which can be rolled out as a rubber
carpet to welcome a dirty baby buggy,
compost pile or the like, while protecting
the rear of the car, seemed an unneces-
sary addition.
Overall, the A4 Allroad Quattro may be
one of the few truly desirable estate cars.
It’s not a particularly emotional driving
experience as it lacks some soul. But ulti-
mately, the car is a triumph of automotive
alchemy and is a superb all-rounder.
THE FACTS:
AUDI A4 ALLROAD
PRICE: £36,145
0-62MPH: 6.4 secs
TOP SPEED: 148 mph
CO2 G/KM: 189
MPG COMBINED: 39.8 mpg
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhhi
PRACTICALITY hhhii
VALUE FOR MONEY hhhii
LE MANS
The event includes an exhibition of classic
vehicles to have taken part in the Le Mans
24 hour race, with vehicles from the likes of
Aston Martin, Audi, Ferrari and Porsche
amongst others. The showcase is organised
by BEN, the charity for those working in the
automotive industries. www.ben.org.uk.
The 2010 Canary Wharf London
Motorexpo runs from 7-13
June and is free to
attend. For more
information go to
www.motorexpo.com
CITYA.M. 2 JUNE 2010 Lifestyle | TV& Games 29

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Jimmy’s Food Factory
BBC News
8pm Waterloo Road
9pm CHOICE Junior
Apprentice
10pm BBC News
10.25pm Regional News
10.35pm National Lottery
10.45pm FILM The Matador:
2005; National Lottery Update
12.20am Sign Zone: Wonders
of the Solar System
1.20am Can You Train Your Brain?
A Bang Goes the Theory Special
2.20am Watchdog 3.20am Great
British Menu 3.50am-6am News
6pm Great British Menu
7pm Timewatch – The People’s
Coronation: Stories behind the
Queen’s coronation in 1953.
7.50pm Coast: Neil Oliver
meets the man who designed
the first hydrogen car.
8pm CHOICE Springwatch
2010: A guide to Britain’s birds
of prey.
9pm Atlantis: The Evidence –
A Timewatch Special
10pm QI
10.30pm Newsnight; Weather
11.20pm Dunkirk
12.20am An African Journey
with Jonathan Dimbleby
1.20am BBC News 3.50am Close
4am-6am BBC Learning Zone
6pm London Tonight
6.30pm ITV News
6pm The Simpsons
6.30pm Hollyoaks
6pm Home and Away
6.25pm Live from Studio Five:
TV PICK
7pm Emmerdale 7pm Channel 4 News Topical reports.
7.30pm Britain’s Got Talent 8pm Three in a Bed 7.30pm Daring Raids of World
9pm CHOICE Coronation 9pm Genius of Britain War Two; Five News Update
Street: Tony makes clear his 10pm Desperate Housewives 8pm Tutankhamun: The
intention to kill Carla and Hayley. 11pm The Big Bang Theory Mystery Revealed:
9.30pm Britain’s Got Talent – 11.30pm My Name Is Earl Investigating the fate of the
The Results 11.55pm My Name Is Earl King’s wife; Five News at 9
10pm ITV News at Ten 12.25am Music on 4: JD Set 9pm NCIS: Gibbs is forced to
10.30pm London News Presents work with Trent Kort. JUNIOR APPRENTICE
10.35pm FILM Walking Tall 12.40am 4Play: Yeasayer 12.55am 10pm CSI: NY BBC1, 9.00PM
2004. Premiere. Action The Album Chart Show Spotlight Alan Sugar’s task for the five
1.10am Mercury Prize Sessions 10.55pm CSI: NY
adventure remake, starring 11.55pm Poker remaining contestants is to spot talent
1.25am A WI Lady’s Guide to
Dwayne Johnson. Brothels 2.30am I Hate That Smile 12.55am SuperCasino as the teams must choose artists and
12.05am The Zone; ITV News 2.35am Super Botox Me 3.30am 4.05am House Doctor 4.30am represent them at a private art fair.
Headlines What About Brian 4.15am Life Class: House Doctor 4.55am Animal
2.05am The Jeremy Kyle Show Today’s Nudes 4.40am Win My Rescue Squad 5.10am Neighbours
3.05am-5.30am ITV Nightscreen Wage 5.25am-6.10am Countdown 5.35am-6am Home and Away

SKY SPORTS 1 12.30am Inside the PGA Tour LIVING 9pm FILM Bulletproof Monk 2.30am How It’s Made 3am
SATELLITE & CABLE

7pm Live Twenty20 Cup
Cricket 10.30pm Boots ‘n’ All
11.30pm FIFA Futbol Mundial
12am Total Rugby 12.30am
Twenty20 Cup Cricket 2.30am
European Tour Weekly 3am
Boots ‘n’ All 4am-6am
Twenty20 Cup Cricket
SKY SPORTS 2
7pm Live Winning Post 9pm
FIFA Futbol Mundial 9.30pm
Total Rugby 10pm Transworld
Sport 11pm Golfing World
12am Watersports World 1am
Poker 2.30am Total Rugby 3am
Inside the PGA Tour 3.30am-
4.30am DTM Motor Racing
SKY SPORTS 3
7pm European Tour Weekly
7.30pm Inside the PGA Tour
8pm Boots ‘n’ All 9pm DTM
Motor Racing 10pm
Watersports World 11pm
Modern Pentathlon 12am
European Tour Weekly
1am-2am DTM Motor Racing
BRITISH EUROSPORT
7pm Game, Set and Mats
7.30pm Olympic Magazine 8pm
Wednesday Selection 8.05pm
Show Jumping 9.05pm Riders
Club 9.10pm Wednesday
Selection 9.20pm US Tour Golf
10.15pm European Tour Golf
10.45pm Golf Club 10.50pm
Yacht Club 11pm Sport
Traveller 11.15pm French Open
Tennis 12.45am Game, Set and
Mats 1.15am-1.30am Football:
World Cup Rhythm
ESPN
6pm World Cup Football 8pm
Manchester United v Everton:
2009/10 10pm NBA Fastbreak
10.30pm AFL Review Show
11.30pm The Ultimate Fighter
12.30am UFC All Access 1am
Live NHL Ice Hockey 4am
FIBA Basketball 4.30am-5am
ICC Cricket World
7pm Ghost Whisperer 8pm
Nothing to Declare 9pm
Supernatural 10pm Most
Haunted 11pm Criminal Minds
12am CSI: Crime Scene
Investigation 2am Exposed:
Angelina Jolie 3am Chubby
Children 3.50am Maury
4.40am 60 Minute Makeover
5.30am-6am Home Shopping
BBC THREE
7pm Top Gear: The team tests
the reliability of used Alfa
Romeos. 8pm FILM Shanghai
Knights. 2003 9.50pm World
Cup’s Most Shocking Moments
11.50pm Family Guy 12.35am
American Dad! 1.20am
Waterloo Road 2.15am World
Cup’s Most Shocking Moments
4.15am Bizarre ER 4.45am-
5.15am Snog, Marry, Avoid?
E4
7pm Hollyoaks 7.30pm My
Name Is Earl 8pm Friends
2003. 11.10pm The Cleveland Extreme Engineering 3.50am
Show 11.40pm King of the Hill Treasure Quest 4.40am World
12.10am My Name Is Earl War Two The Complete History
12.40am Scrubs 1.35am Joan 5.30am-6am How Does That
of Arcadia 3.05am Dark Angel Work?
4.25am Everwood 5.10am- SPRINGWATCH 2010
6am Switched DISCOVERY HOME & BBC2, 8.00PM
HEALTH Simon King focuses his attention on
HISTORY 7pm Baby Days 8pm A&E: the nightjar, a nocturnal bird with an
7pm Drama of Dresden 9pm Outback 9pm A&E 10pm appetite for moths, and Kate Humble
Royal Inquest 10pm World Hospital Sydney: A man’s burnt provides a guide to Britain’s birds of prey.
War Two Lost Films 11pm hand shows signs of recovery.
Nuremberg’s Secret Notebooks 11pm The Real A&E 12am A&E
12am Royal Inquest 1am 1am Hospital Sydney 2am The
Drama of Dresden 3am Mega Real A&E 3am A&E: Outback
Movers 4am-5am Weird 4am Bringing Home Baby 5am-
Weapons: The Allies 6am From Here to Maternity
DISCOVERY SKY1
8pm How Do They Do It? 8pm UK Border Force 9pm
8.30pm How It’s Made 9pm FILM Gladiator. 2000.
Iceland Volcano: The Next 11.55pm Oops TV 12.55am CORONATION STREET
Eruption 10pm Bear Grylls: Road Wars 2.40am Cold Case ITV1, 9.00PM
Urban Survivor 11pm Death 3.30am Tru Calling 4.20am David (Jack P Shepherd) fights to
Machines 12am Deadliest Catch Celebrity Parents’ SOS 4.45am convince the jury that Gail is innocent
1am Bear Grylls: Born Survivor Hello Goodbye 5.10am-6am by confessing he sent Tina the text
2am How Do They Do It? Sell Me the Answer and flowers.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
12 7 35 17 29 16 42 6 
8 33
   
20 18
Place the numbers from 1 to 9 in each empty cell so that each 14 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 22 11
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above or to the left of it. 9 28 7 23
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same digit twice in a block. 17 15
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column, but it must be in a 24
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specific purpose (2,3)
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none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters I lady’s fingers (4) 5 Opaque gem (4)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
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 30 Sport CITYA.M. 2 JUNE 2010

Results
CRICKET
LV COUNTY CHAMPIONSHIP - DIVISION ONE: (Trent
Bridge): Essex 329 (M L Pettini 96, J S Foster 59, S J
Mullaney 4-31) and 152-2 (R S Bopara 57no) v
Now’s the time to unleash Shahzad
Nottinghamshire 217 (S J Mullaney 53, C M W Read 52, D D
Masters 4-48). Nottinghamshire (7pts) drew with Essex to Tim Bresnan has given the Shahzad will alter the result and pre- months or so, and I feel the balance of
(9pts). (Edgbaston): Durham 379 (P Mustard 100, M D Nottinghamshire seamer what could vent England wrapping up a 2-0 series the side was right for the occasion.
Stoneman 77, G J Muchall 60, Imran Tahir 8-114) v
Warwickshire 100 and 229-4 (I J Westwood 86no, R be a final chance to show he still has win, but I just feel it’s the perfect time Old Trafford is a result wicket and I
Clarke 66). Warwickshire (6pts) drew with Durham (10pts). the pace and guile to succeed in the to give Shahzad a run-out to see what believe they will stick with the same
(Headingley Carnegie): Lancashire 416-9 dec. (T C Smith Test arena. If he doesn’t, then that he can do on the Test stage with a formula with the only dilemma being
108no, A G Prince 78, A U Rashid 4-121) v Yorkshire 199-8
(A U Rashid 65, T C Smith 4-46).Yorkshire (5pts) drew with may be the last we see of Sidey in the tougher schedule ahead of us. whether to give Sidebottom the nod
Lancashire (8pts). five-day format. over Shahzad.
LV COUNTY CHAMPIONSHIP - DIVISION TWO: (The But while I applaud the selectors’ POWER OF GOOD Reaching the magic 500 will have
SWALEC Stadium): Glamorgan 372 (G P Rees 86, M J decision to give Sidebottom another The selectors took their fair share of also boosted the confidence of
Cosgrove 82, M A Wallace 58, J W Dernbach 4-78) and 7-0 AT THE CREASE WITH
chance in a Test after an impressive stick after the first Test victory at England’s top order – in particular
v Surrey 303-9 dec. (S M Davies 83, M R Ramprakash 73, J
A R Harris 4-82). Glamorgan (10pts) drew with Surrey
(9pts). (Grace Road): Leicestershire 464-3 dec. (J W A
ANDY LLOYD World Twenty20 tournament, I per-
sonally would like to see young
Lord’s with some critics suggesting
the four-man bowling attack wasn’t
Jonathan Trott. I’ve had Trotty here at
Warwickshire for a long time and I
Taylor 206no, A B McDonald 176no) v Middlesex 356-5 (O

R
A Shah 156, N J Dexter 118). Leicestershire (9pts) drew YAN SIDEBOTTOM will be play- Yorkshire pace man Ajmal Shahzad enough. know that was a massive double cen-
with Middlesex (8pts). (New Road): Gloucestershire 245 (C ing for his future in the second given his chance. For me, it’s difficult to criticise the tury for him. It’s all but cemented his
G Taylor 71) and 243-7 dec. (H J H Marshall 50, A Test with Bangladesh at Old I don’t believe that the decision selectors for what they’ve contributed place for the summer and that will
Richardson 4-68) v Worcestershire 388 (M M Ali 106, B J
M Scott 67, A N Kervezee 57, J Lewis 4-55). Worcestershire Trafford on Friday. A foot injury whether to include Sidebottom or to the English game over the past 12 have done him the power of good.
(10pts) drew with Gloucestershire (7pts).
FRIENDS PROVIDENT T20 - SOUTH DIVISION: (Hove):

Tim’s setback
Sussex 155-7 v Somerset 103. Sussex (2pts) beat Somerset
by 52 runs.
TRIANGULAR TOURNAMENT: (Bulawayo): Zimbabwe 118
(H Masakadza 62) v Sri Lanka 119-1 (T M Dilshan 60no). Sri
Lanka (2pts) beat Zimbabwe by 9 wickets.
FOOTBALL
INTERNATIONAL MATCHES

hands Sidey
Australia.......................(0) 1 Denmark.............................(0) 0
Holland............................(1) 4 Ghana ...................................(0) 1
Portugal.........................(1) 3 Cameroon..........................(0) 1
Switzerland................(0) 0 Costa Rica .........................(0) 1
ICE HOCKEY
NHL—Stanley Cup: Chicago Blackhawks 2 Philadelphia

Test chance
Flyers 1 (Chicago Blackhawks lead best of seven series 2-0).
TENNIS
FRENCH OPEN (Roland Garros)—Men’s Singles Quarter-
finals: (5) Robin Soderling (Swe) bt (1) Roger Federer (Swi) 3-
6 6-3 7-5 6-4, (15) Tomas Berdych (Cze) bt (11) Mikhail
Youzhny (Rus) 6-3 6-1 6-2. Women’s Singles Quarter-finals:
(5) Elena Dementieva (Rus) bt (19) Nadia Petrova (Rus) 2-6 6-
2 6-0, (17) Francesca Schiavone (Ita) bt (3) Caroline
Wozniacki (Den) 6-2 6-3. Men’s Doubles Quarter-finals: (2)
and then four against New Zealand a
▲

Daniel Nestor (Can) & Nenad Zimonjic (Ser) bt (6) Lukasz CRICKET
Kubot (Pol) & Oliver Marach (Aut) 7-5 6-3, (10) Julian Knowle
BY JON COUCH year later. National Selector Geoff
(Aut) & Andy Ram (Isr) bt Marcelo Melo (Bra) & Bruno Miller said: “It’s very unfortunate that
Soares (Bra) 6-7 (3-7) 6-2 6-0, (4) Wesley Moodie (Rsa) &
Dick Norman (Bel) bt Marc Lopez (Spa) & Pere Riba (Spa) 6-1 SEAMER Ryan Sidebottom has been Tim Bresnan will miss the second Test
6-4, (3) Lukas Dlouhy (Cze) & Leander Paes (Ind) bt (8) handed the chance to resurrect his through injury as his bowling benefit-
Mariusz Fyrstenberg (Pol) & Marcin Matkowski (Pol) 6-1 6-3. Test career after being called up for ted from five days of Test cricket dur-
Women’s Doubles Quarter-finals: (2) Nuria Llagostera Vives Friday’s second contest with ing the Lord’s Test and he would have
(Spa) & Maria Jose Martinez Sanchez (Spa) bt Monica Bangladesh at Old Trafford.
Niculescu (Rom) & Shahar Peer (Isr) 6-2 6-4, (12) Kveta
been looking forward to getting more
Peschke (Cze) & Katarina Srebotnik (Slo) bt Alona The 32-year-old left-armer has overs under his belt at Old Trafford.
Bondarenko (Ukr) & Kateryna Bondarenko (Ukr) 4-6 6-2 6-3. been drafted in as a replacement for “It does, however, provide Ryan
Mixed Doubles Quarter-finals: Vania King (USA) & all-rounder Tim Bresnan, who picked Sidebottom with an opportunity to
Christopher Kas (Ger) bt Tathiana Garbin (Ita) & Marcin up a stress fracture in his left foot in push for Test selection following his
Matkowski (Pol) 6-4 3-6 10-7, Yaroslava Shvedova (Kaz) &
Julian Knowle (Aut) bt (2) Cara Black (Zim) & Leander Paes the eight-wicket win at Lord’s on outstanding performances in the
(Ind) 6-3 6-7 (2-7) 10-7. Boy’s Singles 2nd rd: (5) Tiago Monday. World Twenty20.
Fernandes (Bra) bt Oliver Golding (Gbr) 6-2 7-6 (7-0). Boy’s Sidebottom, who played the last of “The entire bowling unit will be
Doubles 2nd rd: Oliver Golding (Gbr) & Alexander his 22 Tests for England against South better for the overs bowled during the
Rumyantsev (Rus) bt Andrea Collarini (USA) & Denis Kudla
(USA) 6-1 6-7 (4-7) 10-2. Africa in January, gets his chance first Test and looking to further build
after impressing in England’s recent on this in Manchester.”
TODAY’S DIARY World Twenty20 triumph, where he Sidebottom’s inclusion stokes the
finished joint leading wicket-taker debate over the balance of the
CRICKET with Graeme Swann, with 10. England pace attack on Friday with
Friends Provident T20 - North Division: Leicestershire v Bangladesh have never played a selectors questioned for picking only
Derbyshire (Grace Road). South Division: Essex v Kent Test match at Old Trafford, but four bowlers in the first Test.
(Chelmsford). Nottinghamshire seamer Sidebottom SQUAD: A Strauss (capt), J Anderson, I
has a good record in his two matches Bell, A Cook, S Finn, E Morgan, K Pietersen,
SPORTS EDITOR JON COUCH at the Lancashire home, taking three M Prior, A Shahzad, R Sidebottom, G Swann,
email sport@cityam.com wickets against West Indies in 2007 J Trott. Sidebottom claimed 10 wickets in the World Twenty20. Picture: ACTION IMAGES

SPORT | IN BRIEF
Punters lose £3m on Saint Nick Williams out for Wales Tests
Schiavone turns on style to
reach Roland Garros last four
RACING: Bookmakers estimate that pun- RUGBY UNION: Shane Williams has been
ters may have lost up to £3m in early ruled out of Wales’ Tests against South
wagers after long-time favourite St Africa and New Zealand with a shoulder
Nicholas Abbey pulled out of the Epsom injury.
Derby with a “slight muscle injury”. The absence of the Ospreys winger,
The Aidan O’Brien-trained colt failed who is Wales’ record try-scorer with 51
to impress jockey Johnny Murtagh in a to his name, gives Leigh Halfpenny his
workout on Friday where it was found he chance in Saturday’s clash with the well. I’m enjoying it so much. played today, world No1 Serena
was suffering from a tear in his hind Springboks at the Millennium Stadium. FRENCH “I have been doing this job all of my Williams takes on Australian Sam
quarter.
Saint Nick was market leader for
James Hook has been granted permis-
sion to play despite awaiting a shoulder
OPEN 2010 life. It’s a very special emotion to
reach the semi-finals especially when
Stosur, while fourth seed Jelena
Jankovic faces Kazakhstan’s giant-
seven months for Saturday’s race, only to operation. BY JON COUCH you work hard every morning, every killer Yaroslava Shvedova.
be ousted as favourite on Friday by sta- FRANCESCA SCHIAVONE produced afternoon.” Meanwhile, in the other men’s
blemate Jan Vermeer. Red Bull pair look to move on the performance of her life to stun Schiavone will now play Russian quarter-final, Andy Murray’s con-
FORMULA ONE: Mark Webber is set to world No3 Caroline Wozniacki and Elena Dementieva in the last four after queror Tomas Berdych marched on
Widdop gets shock England call hold clear-the-air talks with Red Bull become the first Italian woman to the fifth seed came from a set down to after he destroyed Mikhail Youzhny
RUGBY LEAGUE: Melbourne Storm full- team-mate Sebastian Vettel following reach a Grand Slam semi-final in 56 beat Nadia Petrova 2-6, 6-2, 6-0 and for the loss of just six games.
back Gareth Widdop is the surprise inclu- their collision at the Turkish Grand Prix years. reach her first French Open semi-final The in-form Czech clinched his
sion in England’s 19-man squad for the on Sunday. The 29-year-old dominated from since 2004. place in a first Grand Slam semi-final
international against France on 12 June. A feud between the pair erupted after start to finish, outgunning the Danish Both players struggled with with a comfortable 6-3, 6-1, 6-2 victory
Widdop, 21, was born in Halifax but Vettel spun out attempting to pass race teenager with a powerful all-round injuries in an error-strewn match but over the Russian.
emigrated to Australia when he was 16. leader Webber in Istanbul, allowing rivals game before coming though 6-2, 6-2 at Dementieva, seeking a first Grand It signals a remarkable change in
He is one of three uncapped players in McLaren to claim a one-two. a rain-sodden Roland Garros. Slam success at the 46th time of ask- fortune for the 15th seed, who had
Steve McNamara’s squad and is pre- “We’re both adults and we need to Schiavone broke her opponent’s ing, won through after comfortably been eliminated in the second round
ferred to Hull KR’s Shaun Briscoe, one of find a way of racing together that does- serve six times, and said: “It’s an hon- taking the final two sets. in five of his six previous appearances
three players dropped. n’t compromise the team,” Webber said. our for me to play here. I played really In the remaining quarter-finals, at Roland Garros.
CITYA.M. 2 JUNE 2010 Sport | Football 31

Barry inclusion is Has Fabio missed a

key, insists Green
WORLD CUP guys to go on and play the game,”
he said.
2010 “A lot’s been said about Stevie G
BY JON COUCH [Gerrard] and Frank [Lampard] not
being able to do things, being held
ROBERT GREEN believes the inclu- back, and he allows them to do that.
sion of Gareth Barry is a massive “He’s kind of an unsung hero in
boost to England’s World Cup that respect to go out and do the
hopes. job that he does and I think he’s
Barry was named in Fabio proved his importance in that the
with that,” Green added. “It’s a
tough choice to make but I’m sure
it’s a pleasing choice for the man-
ager because he’s got such difficult
choices to make.”
Meanwhile, Green’s goalkeeping
rival David James says every mem-
ber of Capello’s squad is ready for
duty.
The Portsmouth veteran, who
trick with Johnson?
Leaving Theo Walcott out is a brave
shout by Capello – now we will see what
the Arsenal winger is made of.
After his single-handed demolition of
Croatia in Zagreb, Capello was looking
for Walcott to grow in stature, but
whether it be through injury or indiffer-
ent form, he hasn’t found himself and
THE MAN IN THE KNOW matured in the way he would have liked.
Now, it will be interesting to see how
TREVOR STEVEN the young man reacts. It could crush his
confidence completely or it could make a

Capello’s squad for South Africa yes-
terday after he was cleared to play
following an ankle injury.
And West Ham goalkeeper Green
insists the Manchester City mid-
fielder has a big role to play for
England in South Africa.
“He’s a tremendous holding play-
er in midfield which allows the
ENGLAND'S 23-MAN SQUAD FOR THE WORLD CUP FINALS
THE GOALKEEPERS
Robert Green
Age: 30
Club: West Ham
Caps/Goals: 10/0
O
manager has waited until news of won his 50th cap against Japan on N PAPER, Fabio Capello’s squad man of him. Thankfully for Walcott he’s
whether he’d be fit to announce his Sunday, said: “The way Fabio looks well-rounded, but I just can’t got someone like Arsene Wenger to put
squad. I’m looking forward to see- Capello sorts things out I’m certain help thinking he’s missed a trick an arm around his shoulder.
ing him on the plane tomorrow.” we’ll be in the best shape we can. with young Adam Johnson. At the same time, the luckiest man in
Green has also shown support to “I’m hoping it’s going to be me If you’re picking players on form, Capello’s 23-man squad this morning is
Sunderland striker Darren Bent, chosen [as No1 goalkeeper], of there’s no-one quite in the mould of the Shaun Wright-Phillips. I can’t remember
who missed out on a place in the course, but it’s about the squad Manchester City winger right now and I the last time I saw Wright-Phillips ter-
23-man party. and everyone will be prepared if just think that blend of confidence, raw rorise defences like he used to and I
“Darren will be disappointed called upon for the first game.” pace and a ‘no fear’ element that he pos- think he’ll be breathing a mighty sigh of
sesses would have been a nice weapon in relief at getting the nod over Walcott.
the armoury. Some may say that Leighton Baines is
Johnson’s omission leaves Capello also unfortunate to miss out to Stephen
with no naturally left-footed attacking Warnock, but any fears of homesickness,
player, although you can only assume it as Baines has hinted at over the last cou-
was the versatility of James Milner and
Joe Cole which swayed the Italian.
ple of weeks, have to be eradicated. It’s a
World Cup, there’s nowhere to hide.
Joe Hart David James
Age: 23 Age: 39
Club: Man City Club: Portsmouth
Caps/Gls: 3/0 Caps/Gls: 50/0

THE DEFENDERS
Jamie Carragher Ashley Cole Rio Ferdinand Glen Johnson
Age: 32 Age: 29 Age: 31 Age: 25
Club: Liverpool
Caps/Gls: 36/0

Ledley King
Age: 29
Club: Tottenham
Club: Chelsea
Caps/Gls: 78/0

John Terry
Age: 29
Club: Chelsea
Club: Man Utd
Caps/Gls: 78/3

Matthew Upson
Age: 31
Club: West Ham
Club: Liverpool
Caps: 22/1

Stephen Warnock
Age: 28
Club: Aston Villa
32/2,17+(3$5.
32/2 ,117+(3$
3$5.
$5.
SATURDAY 5TH & SUNDAY 6TH JUNE
Caps/Gls: 20/1 Caps/Gls: 60/6 Caps/Gls: 19/1 Caps/Gls: 1/0 HURLINGHAM PARK, FULHAM, LONDON

THE MIDFIELDERS
O
Gareth Barry Michael Carrick Joe Cole Steven Gerrard DAY NLY
Age: 29 Age: 28 Age: 28 Age: 30 - DO S TO G
O
Club: Man City Club: Man Utd Club: Chelsea Club: Liverpool TICK N’T DEL
ETS AY -
Caps/Gls: 36/2 Caps/Gls: 22/0 Caps/Gls: 54/10 Caps/Gls: 80/16
OUT SELLING
FAST
Frank Lampard Aaron Lennon James Milner S.Wright-Phillips !
Age: 31 Age: 23 Age: 24 Age: 28
Club: Chelsea Club: Tottenham Club: Aston Villa Club: Man City
Caps/Gls: 78/20 Caps/Gls: 17/0 Caps/Gls: 8/0 Caps/Gls: 31/6

THE FORWARDS
Peter Crouch Jermain Defoe Emile Heskey Wayne Rooney
Age: 29 Age: 27 Age: 32 Age: 24
Club: Tottenham Club: Tottenham Club: Aston Villa Club: Man Utd
Caps/Gls: 38/21 Caps/Gls: 40/11 Caps/Gls: 58/7 Caps/Gls: 60/25

WORLD CUP NEWS | IN BRIEF

Angry Dos Santos in quit threat out of the Bafana Bafana squad for the Chelsea duo Didier Drogba and
World
World C
Class
lass H
High-Octane
igh-Octane Polo
Polo • Revolutionary
Revolutionary NewNew Rules
Rules • Suicide
Suicide Dash
Dash • Cheerleaders
Cheerleaders
TOTTENHAM midfielder Giovani dos World Cup finals on home soil. Salomon Kalou are joined by Aruna
Santos has threatened to quit Mexico’s The West Ham striker has been Dindane and Seydou Doumbia in the V
Veuve
euve CClicquot
licquot Champagne
Champagne G arden • SStunt
Garden tunt RRiders
iders • Farmer’s
Farmer’s Market
Market • Big
Big Screens
Screens
World Cup campaign after his brother struggling for fitness for most of the Elephants’ line-up, although Bakary A
Argentine
rgentine BBQ’s
BBQ’s • Pimms Tent • Food
Pimms Tent Food Stalls
Stalls • Pitch-side
Pitch-side Bars
Bars • 2 Giant
Giant Grandstands
Grandstands
Jonathan was surprisingly omitted season and is one of five players to miss Kone and Kanga Akale have been left
from the squad. out from the 28-man training squad. out. West Brom defender Abdoulaye C hic LLuxury
Chic uxury SShopping
hopping V illage • A W
Village hole D
Whole ay ooff FFamily
Day amily EEntertainment
ntertainment
His father Zizinho admitted: “Gio is Also omitted were goalkeeper Meite also misses the cut.
very hurt and he wants to be at home
with us. He is there now and he’s not
Rowen Fernandez, defenders Bryce
Moon and Innocent Mdledle and mid- Slovaks gamble on Skrtel B
BOOK
OOK Y
YOUR
OUR TICKETS
TICKETS N
NOW!
OW!
well. We don’t know if he will play [at fielder Franklin Cale. SLOVAKIA coach has gambled on the EEntry
ntry ttoo tthe
he V
Veuve
euve CClicquot
licquot CChampagne
hampagne G Garden
arden w
with
ith G
General
eneral AAdmission
dmission aand
nd G
Grandstand
randstand
the World Cup] or not. We still don’t fitness of four players – including Tickets
Tickets from
from £12.
£12. Book
Book online
online at
at www.ticketmaster.co.uk
www.ticketmaster.co.uk oror telephone
telephone 00844
844 8847
47 22282.
282.
know anything.” Drogba leads Elephants quartet Liverpool defender Martin Skrtel – in FFor
or sspecial
pecial C CITY
ITY A
AMM PPartners
artners O
Offer
ffer use
use promotional
promotional discount
discount code
code ‘MINTPOLODIS’.
‘MINTPOLODIS’.
IVORY COAST boss Sven-Goran his World Cup 23. Skrtel has been out
McCarthy is shock omission Eriksson will go to South Africa with since February with a broken mete-
SOUTH AFRICA’S all-time leading four strikers – much like he did as tarsal but came through the 1-1 draw www.polointheparklondon.com
www.polointheparklondon.com
scorer Benni McCarthy has been left England coach four years ago. with Cameroon on Saturday.
 Sport
32
WORLD CUP
2010
BY FRANK DALLERES
ARSENAL winger Theo Walcott’s
international career lies in tatters
this morning after Fabio Capello
ruthlessly axed him from England’s
World Cup squad.
Walcott, 21, was the shock name
among seven victims as manager
Capello whittled down his party to
the final 23 yesterday.
Everton defender Leighton Baines
Soderling claims top scalp
again and ends Federer run
FRENCH
OPEN 2010
BY FRANK DALLERES
ROGER FEDERER’S astonishing run of
23 consecutive Grand Slam semi-
finals was brought to an abrupt end
last night when the world No1
crashed out of the French Open to
giant-killer Robin Soderling.
Defending champion Federer
looked on course to progress from the
quarter-finals when he breezed
through the opening set, but came
Ouch! Walcott
shock victim
of Capello’s
England cull
was also culled, as were Sunderland
striker Darren Bent, Manchester City
winger Adam Johnson and West Ham
midfielder Scott Parker.
Tottenham pair Tom Huddlestone
and Michael Dawson were the others
to receive the dreaded phone call.
Midfielder Gareth Barry was
passed fit after an 11th hour test,
while Walcott’s omission means his
Manchester City team-mate Shaun
Wright-Phillips is also in. Aston Villa’s
Stephen Warnock, not Baines, will be
Ashley Cole’s understudy at left-back.
Walcott, then 17, was the shock
unstuck amid rain interruptions and
heavy conditions, collapsing to a
shock 3-6, 6-3, 7-5, 6-4 defeat.
“At some stage you hope they [loss-
es] don’t happen, but they do,” said
Federer. “It’s been an amazing streak.
If I could have signed for all those
semis back then, I would have.
“I’m very proud of that streak and
it’s one of the greatest ones I have in
my history book.”
It is the second year in succession
that big-hitting Swede Soderling has
summoned a heroic performance to
oust the reigning champion, having
beaten Rafael Nadal last year. He had
BACK IN THE
SIDE(BOTTOM)
SEAMER HANDED
TEST CHANCE: P30
name in England’s 2006 World Cup
squad, earning a call-up from Sven-
Goran Eriksson despite not having
played a Premier League match.
This time the surprise is that he will
not be among the party flying out to
South Africa this evening. An injury-
blighted 18 months has seen his
standing subside, but he had still
expected to be included and was last
night said to be stunned by the snub.
“I am very disappointed not to be
included in the squad going out to
South Africa, but completely respect
Mr Capello’s decision,” said Walcott,
not won in 12 previous matches
against Federer, however, and said: “I
came close a couple of times before
and I feel one or two times that I’ve
actually been a little bit unlucky. It is
nice to beat the world No1 two years
in a row on centre court.”
The loss also threatens to derail
Federer’s tilt at racking up the most-
weeks at the top of the ATP rankings.
He is one shy of matching Pete
Sampras’ record of 286, but will have
to wait to equal it if Nadal wins his
fifth title at Roland Garros, thereby
replacing Federer as No1.
ROUND-UP: PAGE 30
Walcott (left) was one of seven omitted, along with (clockwise from
top left) Bent, Johnson, Dawson, Baines, Parker and Huddlestone.
who was playing golf when the
Italian called him to break the news.
“I would like to wish the team the
best of luck and hope they have a real-
ly successful tournament.”
Walcott looked to have a bright
future under Capello when he hit a
hat-trick in a 5-1 victory over Croatia
in September 2008. But weeks later
he suffered a shoulder injury that
sidelined him for six months, and
was plagued by niggles during the
last campaign, making just 15 starts.
Barry’s recovery from an ankle
injury is a major relief to Capello,
Italy and Denmark wade
into World Cup ball row
▲
FOOTBALL
ITALY goalkeeper Gianluigi Buffon
has become the latest star to launch a
scathing attack on the new World
Cup ball.
The Adidas Jabulani has so far
proved particularly unpopular among
keepers, with Julio Cesar of Brazil and
the USA’s Marcus Hahnemann voic-
ing their disapproval.
“I noticed the first day that this ball
wasn’t right,” said Buffon, a veteran
of 100 caps.
“The World Cup brings together
the best players in the world and to
those players you must provide some-
thing decent. The new ball is not
CITYA.M. 2 JUNE 2010
Pictures: ACTION IMAGES
with the 29-year-old the only special-
ist holding midfielder in the squad,
although he is still likely to miss the
opener agaonst USA on 12 June.
Bent, who hit 24 league goals last
season, did not hide his fustration at
being the striker to miss out. “I feel
really disappointed,” he said. “I have
always said to myself, if you play well
and do your best for Sunderland then
there is a chance you can go to the
biggest tournament in the world. But
obviously on this occasion it has not
worked out.”
TREVOR STEVEN: PAGE 31
decent.”
Denmark coach Morten Olsen also
waded into the debate after his side
lost 1-0 to Australia in a friendly yes-
terday, saying: “We played with an
impossible ball and we need to get
used to it.”
Spain midfielder Xabi Alonso
admitted it was “different”, but said
he was adjusting to the ball, which
Adidas has billed as its roundest and
most accurate ever.
“The ball is different but little by lit-
tle, we are getting accustomed to it,”
said the former Liverpool player. “I
think as days go by and once we play
more games with it, I am certain we
will feel more comfortable with it.”
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