CSC bid battle:
PROPERTY
FIRM SNUBS
£3BN OFFER p4
Issue 1,286 Thursday 16 December 2010
£53,000,000,000
Revealed: how much the City paid in tax last year
FINANCIAL SERVICES
▲
BY STEVE DINNEEN
THE City paid a staggering £53.4bn in
tax last year – more than a tenth of
total government tax receipts.
The report carried out by PwC for
the Corporation of London shows tax
paid by the UK’s financial services
industry is ahead of any other sector.
Business leaders and industry fig-
ures lauded the City for its contribu-
tion to the UK and called for
politicians to heed its importance to
the public purse.
Banks were the biggest tax payers in
the financial services sector, with their
contribution set to rise even further
next year when the £3.4bn raked in
through the bonus tax, which was
levied from 2009 but collected after
the year-end in March, is taken into
account.
In corporation tax alone financial
services brought in £5.6bn, down from
£7.6bn after a tough financial year. In
contrast oil and gas firms saw their
corporation tax receipts plummet
from £10.3bn in 2009 to just £5.5bn as
they struggled in the wake of the
recession. Overall the amount of tax
paid by the financial services industry
fell £8bn – down from £61.4bn in 2009,
which equated to 12.1 per cent of total
tax receipts.
The total tax paid as a percentage of
profit was 48.5 per cent, down from
57.4 per cent the year before.
More than 1m are employed by the
US sues BP for $21bn in
fresh Gulf spill lawsuit
▲
ENERGY
BY MATTHEW WEST
THE US government said yesterday it
would sue BP for $21bn (£13.5bn)
alongside four other companies tied to
the Gulf of Mexico oil spill in August,
for violating US environmental laws,
in the opening salvo in what will likely
be a lengthy legal battle.
If successful the damages from the
lawsuit would be on top of the $20bn
that BP has already agreed to pay into
a fund to compensate people on the
Gulf coast who have suffered finan-
cially because of the spill.
The final damages figure depends
on the US government’s ability to
prove gross negligence.
The lawsuit seeks damages from
BP, Transocean, Anadarko Petroleum
Corp, Mitsui & Co unit MOEX and
Transocean’s insurer Lloyds of
BUSINESS WITH PERSONALITY
WHAT £53BN
COULD BUY:
67
Millennium
Domes
at £789m 265,000
nurses
at £20,000
1,060
hospitals
at £50m
Corporation of London policy chairman Stuart Fraser hailed the City’s contribution to the UK
sector, equivalent to 3.5 per cent of the
workforce, with total employment tax
of £24.5bn. The average amount of tax
paid by each employee was more than
£40,000, on a salary of £71,236. The
number employed fell 7.9 per cent year-
London for their roles in the worst oil
spill in US history.
The US Justice Department asked a
federal judge in New Orleans oversee-
ing the litigation related to the oil
spill to hold the companies liable,
except for Lloyds, for unlimited dam-
ages, beyond the $75m cap under the
US Oil Pollution Act.
BP said the lawsuit was “solely a
statement of the government’s allega-
tions and does not in any manner
constitute any finding of liability or
any judicial finding that the allega-
tions have merit”.
Also yesterday, BP said it was exam-
ining a possible sale of its Canadian
natural-gas liquids business as it seeks
to raise up to $30bn to pay for its Gulf
of Mexico oil spill. The unit, which
includes pipelines and processing sta-
tions, could go for $2bn. P2: MORE
www.cityam.com
on-year.
National insurance contributions
accounted for 39.7 per cent of taxes,
with VAT at 23.9 per cent and corpora-
tion tax at 16.6 per cent.
Corporation of London policy chair-
FTSE 100 ▼ 5,882.18 -9.03
DOW ▼ 11,457.47 -19.07
NASDAQ ▼ 2,617.22 -10.50
£/$ ▲ 1.56 +0.01
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Picture: Micha Theiner/City A.M.
man Stuart Fraser told City A.M. the
findings prove the City is a vital con-
tributor to the UK.
He said: “This report shows the vital
contribution made by the financial
services industry to the Exchequer
£/¤ 1.18 unc
¤/$ ▲ 1.32 +0.01
"--
46*54
#6:

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City Power 100:
WIN A PAIR
OF CITYJET
FLIGHTS p12
FREE
even as the effects of the crisis
weighed on institutions across the
City. I was surprised the drop was only
£8bn, given the effects of the financial
crisis. Next year, I suspect that the
£8bn will be almost recovered. I’m
very concerned that new bonus rules
could drive talent away from the UK.”
Anthony Browne, the Mayor of
London’s adviser for economic devel-
opment, said: “These figures are a
good message for the rest of Britain. It
is in everyone’s interest that there is a
thriving financial services sector.”
Angela Knight, chief executive of
the British Bankers’ Association, said:
“This shows just how significant the
UK financial services industry is to the
UK economy in tax and employment.
“We have always maintained that
the industry is a big taxpayer – it pays
a lot of tax despite perceptions to the
contrary. If this is what the industry is
contributing, in a year like this, then
imagine what it would pay in better
years.” Luke Johnson, who founded
Pizza Express and is a former Channel
4 chairman, added: “This is a tangible
demonstration of the vital role that
financial services and the Square Mile
plays in the UK economy. It is the
engine of growth for the capital city
and, to put it bluntly, the UK as a
whole. If we demonise the City and
the key players emigrate, then the
nation as a whole will be losers.
Additional reporting by Alison Lock
ALLISTER HEATH: P2
FULL INTERVIEW: P18
Certified
Distribution
1/11/10 - 28/11/10
is 113,348
/
0
8

0
/
 2 News
Reform needed – but City vital to UK
EDITOR’S LETTER
ALLISTER HEATH
AT last, some facts to enlighten a
debate mired in hysteria, dema-
goguery and ignorance. The much-
maligned financial services industry
contributed an estimated £53.4bn to
UK government taxes in the 2009/10
financial year, 11.2 per cent of the
total UK tax take, according to a report
today from the City of London
Corporation. The banks are the
biggest taxpayers within the overall
finance industry. Without the City,
therefore, the UK would be sunk, the
budget deficit even larger than it
already is and the spending cuts
7th Floor, Centurion House,
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WHAT THE OTHER PAPERS SAY THIS MORNING
SIENNA MILLER CLAIMS REIGNITE
HACKING ROW
Lawyers representing the actress
Sienna Miller have alleged that a sen-
ior executive at the News of the
World ordered a private detective to
hack into her mobile phone voice-
mail account, reigniting a controver-
sy over journalistic practices at the
tabloid Sunday newspaper.
GOLDMAN’S SZE TO LEAVE FOR HEDGE
FUND
Morgan Sze, the global head of
Goldman Sachs’ biggest proprietary
trading desk and one of the bank’s
most highly paid employees, has
begun raising money for what is
expected to be the largest hedge fund
launch since the financial crisis
began. Sze’s new hedge fund – eagerly
anticipated by many in the industry –
is to be called Azentus Capital and
will based in Hong Kong.
required to tackle years of govern-
ment over-spending even greater.
These refreshing facts follow
Wednesday’s report from the National
Audit Office, which said that UK tax-
payers would likely suffer “no overall
loss” from the banking rescue, includ-
ing the equity stakes in RBS, Lloyds
and Northern Rock, various guaran-
tees and the Special Liquidity Scheme.
Interest on the gilts issued to fund the
help to the banks is being covered by
the fees charged.
This does not excuse stupid actions
during the bubble, and this newspa-
per has long expressed its outrage at
the way some institutions were bailed
out, even if taxpayers end up making a
profit on their stakes, as is now likely.
But it does mean that critics who
allege that finance firms are of no
benefit to the UK are talking danger-
ous nonsense – as are those who
believe that it is the bailouts that sent
the deficit and national debt soaring.
The industry’s total tax take fell
£8bn last year due to the downturn
FSA to reveal
full RBS view
REGULATION
▲
BY MARION DAKERS
THE Financial Services Authority
(FSA) pledged to publish its report
into the near-collapse of Royal Bank
of Scotland (RBS) yesterday, following
widespread political pressure.
FSA chairman Lord Turner said in a
letter yesterday he hoped to release “a
clear description of any key failings”
by the end of March
RBS was not warned in advance of
Turner’s volte-face, which was
released to the press before the bank
saw a copy, but said it had “no objec-
tion” and would “engage construc-
tively to facilitate publication of the
report”. The FSA previously claimed
RBS was blocking the release of its
investigation, and maintained it had
not written up its findings in a docu-
ment that could be released.
CHINA BANK TO LAUNCH FUND OF
FUNDS
China Development Bank, the state-
owned lender that owns part of the
UK’s Barclays Bank, is set to launch
the country’s first private equity fund
of funds in a sign of how rapidly the
Chinese private equity industry is
maturing. With direct approval from
the State Council, China’s cabinet,
the fund of funds is scheduled to
raise a total of Rmb60bn ($9bn), pro-
viding a huge boost to the burgeon-
ing domestic private equity sector.
HYUNDAI PREPARES TO RELAUNCH
BRAND
Hyundai Motor is preparing to
relaunch its brand as “modern premi-
um” in line with the South Korean
carmaker’s growing confidence and
global Hyundai and its sister brand
Kia will this year produce more than
6m vehicles, up about 20 per cent on
2009, and will be the industry’s fifth-
largest carmaking group.
but it overtook North Sea energy to
become the top payer of corporation
tax. Finance employed over 1m work-
ers, generating £24.5bn in employ-
ment taxes. This would have been
even higher had the sector not lost
91,000 employees (7.9 per cent of the
total). Average pay in the sector was
£71,236 and employment taxes per
employee £40,481 (including all
national insurance contributions).
Those cheering whenever bankers are
sacked should understand that one
job loss in finance entails close to two
job losses in the public sector.
It is in the UK’s interest to have a
thriving financial industry – just as it
is to grow as many other industries as
possible. But it is equally imperative
that the City doesn’t help promote
boom and bust or that all of its liabili-
ties end up being underwritten by tax-
payers. That is the key issue. There are
many who, following the crisis,
claimed that banking needs to be
reduced to a small share of GDP to
make sure the government would
Turner’s letter to the Treasury
select committee chairman Andrew
Tyrie came after he was called to a
meeting with business secretary
Vince Cable to discuss making the
report public yesterday afternoon.
Tyrie had been pressuring the watch-
dog to release the details of its find-
ings, within the confidentiality limits
of the Financial Services and Markets
Act.
Cable said in a TV interview that he
still did not know the details of the
report, but added that his meeting
with Turner had been productive.
Adair Turner said the
FSA would publish the
findings of its report
into Royal Bank of
Scotland by March
INFLATION IS THE BIGGEST ENEMY,
WELLCOME TRUST WARNS BANK
Britain’s richest charity and one of its
most successful investors gave warn-
ing yesterday that the country is fac-
ing its biggest inflationary threat for
20 years and disclosed that it had
abandoned bond investment as a con-
sequence. Wellcome Trust, which has
amassed a £14.5bn investment for-
tune, said that it had sold its last
bond in April as it positioned itself for
a rise in inflation.
COVENTRY TO BE THE HOME OF TATA’S
ELECTRIC CAR
Dreams of making Britain the world-
wide hub of the electric car revolu-
tion have been boosted by Tata, which
pledged its plug-in hatchback would
be produced in Coventry. The Indian
carmarker confirmed the Tata Vista
EV will be built in the spiritual home
of the British motor industry.
never go bust as a result of having to
take on the sector’s huge liabilities.
That was only true in one way: banks
were far too leveraged; their balance
sheets had to be cut, which by defini-
tion is reducing their size as a share of
GDP. But the remainder of that con-
clusion was based on the wrong prem-
ise, which was that bailouts are always
necessary in a recession.
Capitalism requires that all bad
firms be allowed to go bust, wiping
out shareholders, bondholders and
staff contracts. Lehman’s disorderly
collapse showed that banks are slight-
ly different to other companies
because of their inter-connectedness.
Special resolution procedures need to
be introduced to allow bank failures
to take place in a controlled manner,
protecting the overall economy. It is a
tragedy that such wind-down
schemes, now planned by the FSA,
were not in place three years ago. For
that, regulators, who write bankrupt-
cy law, are entirely to blame.
allister.heath@cityam.com
LEGAL CASES STEMMING FROM OIL SPILL
The US Department of Justice yesterday
joined the hundreds of lawsuits that have
been filed as a result of the Gulf of Mexico
oil spill, the largest in US history:
● TYPES OF LAWSUITS
- The vast majority are for economic losses
filed under the Oil Pollution Act, seeking to
recover lost wages or damage to a busi-
ness. Thousands have claimed they were
harmed by the spill, including shrimpers,
owners of commercial vessels, seafood
processors and even owners of nail salons.
- Personal injury and wrongful death cases
brought by workers hurt in the blast and
by families of the 11 killed.
- The states of Louisiana and Alabama have
filed lawsuits over claims for loss of
resources, loss of tax revenue and response
costs for the cleanup. The federal govern-
ment is pursuing civil penalties under the
Clean Water Act that could top $4,300 per
barrel of spilled oil, or $20BN, if gross negli-
gence is determined.
- Securities-related claims have been filed
on behalf of investors who bought BP’s
stock, which lost half its value in the
months after the rig explosion.
● LOCATION OF CASES
- Most have been filed along the Gulf Coast,
in Texas, Louisiana, Mississippi, Alabama
and Florida. But some cases have been filed
as far away as Ohio and California.
PIMCO RAISES US DEBT HOLDINGS
Bill Gross, who runs the world’s
biggest bond fund at Pimco, last
month raised holdings of US govern-
ment-related debt for the first time
since June. Gross increased the pro-
portion of the US government and
related securities in his Total Return
Fund to 30pc of assets in November
from 28pc in October.
CLAIMS RGI IS USED AS PERSONAL
BANK ARE MISLEADING, SAYS
PROPERTY COMPANY
The Aim-listed Russian property com-
pany accused of being used as a “per-
sonal bank” for management has
claimed the allegations against it are
“misleading and unfounded”. RGI
International was accused of bribery,
nepotism and financial malpractice
by Petr Shura, owner of 22.5 per cent
of the company, in a stock market
statement on Monday.
CITYA.M. 16 DECEMBER 2010
| PROMOTION
TELL US YOUR TOP 3 CHOICES
FOR THE POWER HUNDRED 2011
The Power
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2011
WIN
The Power Hundred 2011, published on
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dominated by those involved in rescuing the
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whether they be bankers, lawyers, chief
executives or hedge fund managers, in 2010.
complexion, with dealmakers and successful
business leaders in the ascendancy.
FOR YOUR CHANCE TO WIN, SIMPLY TELL US YOUR TOP 3 CHOICES FOR THE POWER HUNDRED. A NEW WINNER WILL BE CHOSEN EACH DAY.
WHO WILL TOP OUR EXCLUSIVE CLUB THIS YEAR?
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Don’t forget to pick up City A.M. on 22 December to check out who's up, who's down, which banker is
pulling the best deals, who has entered our exclusive club and who has dropped out of it.
*from London City Airport, excluding Milan Linate. Terms and conditions apply
To celebrate this year’s list, CityJet, City A.M.’s partner for the Power
Hundred 2011, is giving away one pair of flights each day for 7 days in the
run up to the list. CityJet is a subsidiary of one of the largest airlines in the
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TERMS & CONDITIONS: The prize is 7 pairs of tickets, valid for flights to any of the CityJet (London City network) destinations excluding Milan Linate. The promotion commences
13 December 2010 at 00h00. The promotion closes 21 December 2010 at 24h00. Entrants must be over 18 years of age. Entry is open to all residents. Employees of CityJet, VLM,
Air France, CITY A.M. and the immediate families are not eligible to enter. Flights cannot be exchanged for cash. Only one entry per person is permitted for each day of the promotion.
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used for advertising, promotion or other commercial purposes. Flights are not available on bank holidays in UK and Europe. Flights must be taken before 30 June 2011. It is the winner’s
responsibility to ensure the winner and their guest have passports that are valid for 12 months, and any necessary visas. The winner and their guest are responsible for their own travel
insurance. Travel expenses and accommodation are not included. The judge’s decision is final and no correspondence will be entered into. CityJet exclude liability for any loss, damage
or injury whatsoever suffered or sustained arising out of or in connection with this competition. Winners will be drawn randomly from all entries received. Winners will be notified by
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FLIGHTS TO
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TELL US THE
CITY’S TOP
THREE: P12
- About 379 cases, the vast majority of the
federal cases, have been consolidated with
a federal court in New Orleans. The court is
coordinating discovery and other procedur-
al matters. The court has scheduled "test
trials" for next year to determine which
parties are potentially at fault.
- The securities-related lawsuits are before
a federal court in Houston.
● DEFENDANTS
-- BP has been the focus of the lawsuits,
but other parties sued include:
-Anadarko Petroleum Corp, which owns a
25-per cent stake in the Macondo well that
spewed the oil.
- MOEX Offshore, which holds a 10 per
cent interest in the well.
- Transocean, a Swiss company that owned
the Deepwater Horizon rig, which it leased
to BP.
- Halliburton Energy Services, which
cemented the blown-out well.
-Cameron International Corp, which manu-
factured the blow-out preventer valve that
was meant to prevent a spill from the well.
-M-I LLC which provided drilling fluids for
the well.
-Weatherford International, a Swiss com-
pany that was involved in the casing
process for the well.
-Hyundai Heavy Industries, which manu-
factured the Deepwater Horizon rig.
BANK OF AMERICA IN SETTTLEMENT
TALKS OVER MORTGAGES
Bank of America, after vowing to
fight requests that it repurchase cer-
tain loans, has begun potential settle-
ment discussions with some of its
largest mortgage investors. The 17-
member group now in talks with the
nation’s largest bank includes the
Federal Reserve, Freddie Mac,
BlackRock and Allianz SE's Pacific
Investment Management.
DANNON SETTLES COMPLAINTS OVER
YOGURT ADS
Dannon, one of the biggest promot-
ers of probiotic foods such as Activia
and DanActive dairy drinks, agreed
Wednesday to pay $21m to settle state
and federal investigations into allega-
tions that the company's claims for
the health benefits of foods contain-
ing probiotics were exaggerated, or
not properly supported.
CITYA.M. 16 DECEMBER 2010
Britain’s best
drafted in to
run Whitehall
▲
POLITICS
BY MATTHEW WEST
THE Cabinet Office yesterday pub-
lished a list of top business leaders
who have been appointed as non-
executive directors to sit on Whitehall
boards.
The appointments are designed to
ensure the government operates in a
more business like manner and are
the brainchild of Cabinet office min-
ister Francis Maude and Lord Browne,
the recent author of the report on
higher eduction funding and former
chief executive of BP.
Among the list of appointments
are Sara Weller, chief executive of
Argos, Jim Leng former chairman of
Rio Tinto and deputy chairman of
Tata Steel, chief executive of
GlaxoSmithKline Andrew Witty and
Babara Stocking chief executive of
Oxfam.
Of the 31 board members
announced yesterday, 13, or 42 per
cent, are women. The remaining list
of board members will be published
in the New Year which is also when
the first board meetings are expected
to take place. The Cabinet Office said
the non-executive board members
will help steer responsibility for
strategic and operational leadership
for each government department and
for agreeing each department’s three-
year rolling business plan.
They will also provide advice and
support to ministers and civil ser-
vants, challenge discussions and dis-
cuss any performance issues with
Lord Browne and the Prime Minister,
the Cabinet Office added.
Maude, said: “Today’s names
include business heavyweights with
huge experience of financial manage-
ment and improving operational per-
formance and they will play a key
role in helping departments rise to
the challenge and deliver further sav-
ings. Previously, we have paid mil-
lions of pounds to consultants for this
kind of advice.”
He added new efficiency measures
put in place by the government had
already saved over £1bn.
Politics 3
Auditor refuses
to sign off on
MPs’ expenses
POLITICS
▲
THE auditor general refused to sign
Clockwise off MPs’ expenses accounts for last
from top year yesterday citing concerns over
right: Sara nearly £14m of payments.
Weller CEO of Amyas Morse carried out a “full
Argos, scope audit” of £98.1m expenses paid
Andrew in 2009-1 – the year of the expenses
Witty CEO of scandal.
GSK, David The audit found the House of
Verey senior Commons authorities had failed to
adviser at obtain receipts to justify £2.6m in
Lazard, Lord claims. Another £11.3m of expenses
Browne for- had been incurred on items which
mer CEO of MPs could not prove were necessary
BP for parliamentary purposes.
The news came as David Cameron
met with backbench MPs last night to
discuss problems with the new sys-
tem governing MPs’ expenses.
The Independent Parliamentary
Standards Authority (Ipsa) has faced
criticism from MPs that is not work-
ing properly and it’s too expensive.
Last night the Prime Minister
agreed the new system was “anti-fam-
ily” and would have to relax its grip
by 1 April, or face being reformed.
A spokesman for Cameron added:
“There needs to be a better system in
place by 1 April otherwise it will have
to change. That can be through Ipsa
From left to right: Jim recognising its shortcomings, or it
Leng, Baroness Hogg and can be it being changed. Either way, it
Babara Stocking will have to change.”
 4 Focus on CSC
CSC fends off
Simon’s £3bn
takeover bid
▲
PROPERTY
BY MARION DAKERS
US property giant Simon tried to push
Capital Shopping Centres (CSC) into
scrapping its £1.6bn purchase of the
Trafford Centre yesterday with a
£2.9bn indicative offer for the entire
company.
CSC rejected the 425p-per-share pro-
posal after an emergency board meet-
ing yesterday, claiming the move was
“yet another attempt by Simon to frus-
trate the Trafford Centre acquisition”.
However, CSC delayed its sharehold-
er meeting planned for 20 December,
which would have given investors a
chance to approve the Trafford deal
with current owner Peel Holdings. Peel
backed its stance.
Simon welcomed the delay, and
urged CSC “to listen to calls from your
shareholders – many of whom we have
spoken to – opposing the Trafford
Centre.”
Its indicative offer represents a
seven per cent premium to CSC’s share
price on Tuesday, and comes with con-
ditions including the end of the
Trafford purchase and access to CSC’s
books to undertake due diligence.
Credit Suisse analyst Steve Bramley-
Jackson told City A.M. that Simon’s
offer was unrealistic. “I don’t think
there’s enough financial headroom
for Simon to increase its offer to a level
acceptable for CSC shareholders.
“A lot of the big CSC investors are
involved to maintain exposure to UK
property, which they are unlikely to
exchange for cash at this stage.”
Capital Shopping Centres shares
gained 4.9 per cent to close at 415.6p.
ANALYSIS l CSC Group
420 p
415.60
15 Dec
400
380
360
340
320
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec
TIME LINE | THE FIGHT FOR CAPITAL SHOPPING CENTRES
● 24 November
CSC confirms it in advanced talks with
Peel Holdings to buy the Trafford Centre
in Manchester for £1.6bn. The deal looks
set to be the biggest-ever single property
transaction in the UK.
● 25 November
World’s biggest mall-owner and CSC
shareholder Simon Property publishes a
letter it wrote ahead of CSC’s announce-
ment, urging it to delay its purchase of
the Trafford Centre until it can make a
takeover offer. CSC shares gain 12.5 per
cent.
● 8 December
Simon demands to see CSC’s books so it
can perform due diligence ahead of a for-
mal takeover offer, threatening to sell its
6.25 per cent stake; CSC refuses.
The Trafford
Centre in
Manchester has
sparked a
takeover bid
Picture: REX
● 8 December
Simon sends a letter to the CSC board
offering to fund a 400p per share plac-
ing, providing Peel Holdings accepts cash
rather than a stake in CSC in the Trafford
deal. CSC rejects the offer, and Peel
writes a letter in support of its position.
● 15 December: 7am
Simon makes an indicative offer of 425p
a share for CSC.
● 15 December: 2.30pm
Following an emergency board meeting,
CSC rejects the offer as “yet another
attempt by Simon to frustrate the
Trafford Centre acquisition”, but says it
will delay its EGM.
● Late January 2011
New EGM to vote on Trafford deal.
CITYA.M. 16 DECEMBER 2010
How not to
deal with a
takeover bid
SIMON’S pursuit of CSC has been a
textbook example of how not to
handle a takeover bid. First it said it
would bid for CSC on the precondi-
tion it did not purchase the Trafford
Centre (providing all sorts of rea-
sons for why it was a bad pur-
chase); then it offered to finance
the acquisition of the mall instead
of Peel (destroying its own argu-
ments against the purchase); now it
is back with an indicative offer of
425p – again providing manage-
ment does not purchase the
Manchester shopping centre.
But CSC knows it has to at least
consider Simon’s offer, which repre-
sents a 21 per cent premium over
the stock’s closing price in the past
six months. That would allow share-
holders to exit their investment at a
13 per cent premium to the last
reported Net Asset Value of 377p.
Simon’s advances will provide
support for the share price in the
near term, but we think its flip-flop-
ping speaks volumes about the
probability of an eventual deal. This
is less holy matrimony and more
transatlantic teenage crush. Savvy
investors will get out while the
going is good.
BOTTOMLINE
Analysis by David Crow
CITYA.M. 16 DECEMBER 2010 Eurozone debt crisis 5

GREEK STRIKES
GREEK unions
Moody’s warns on
Spain’s debt rating
grounded flights,
kept ferries docked
at ports and shut
down public servic-
es yesterday to
protest wage cuts
as the Athens gov-
ernment continues €210bn’s (£178bn) worth of debt next

▲
EUROZONE CRISIS
to stick to the con- BY JULIET SAMUEL
ditions of its inter-
national bailout. MOODY’S yesterday warned that it had
put Spain on review for a downgrade
Picture: GETTY on its sovereign debt due to its refi-
nancing needs over the next year.
But the ratings agency added that it
does not expect the country will need
a bailout, saying it “does not believe
Spain’s solvency is under threat”.
Spain will need to refinance
year, according to Goldman Sachs, and
Spanish banks’ refinancing needs will
hit €35bn.
Stocks and the euro fell after
Moody’s warning: the Eurostoxx 50
closed down 0.69 per cent, while the
euro had dropped 0.7 per cent against
the greenback by yesterday evening.
However, bond investors appeared
reassured: the yield on 10-year Spanish
debt closed down at 5.5 per cent.

Fears for euro AS

TV
SE
EN

may force ECB

ON

to launch QE F P RICE
shown a willingness to take drastic
HAL or
▲

EUROZONE CRISIS
BY JULIET SAMUEL
GERMANY has signalled it would be
prepared to fund a possible doubling
in the European Central Bank’s (ECB)
capital reserves, which economists say
could be a precursor to the launch of a
European quantitative easing pro-
gramme.
If the ECB does decide to loosen its
monetary stance, say economists, it
would do so by ending the “sterilisa-
tion” of its bond purchases.
Last month, the bank was forced to
restart its intervention in secondary
bond markets to stem the rising tide of
gilt yields in peripheral Eurozone
economies, but in the past it has offset
the monetary loosening effect of its
purchases by selling bonds – so called
sterilisation.
Megan Greene, a senior economist
at the Economist Intelligence Unit,
says that with the Eurozone’s options
limited politically, the bank might be
forced to stop sterilising its purchases
– effectively ushering in a Eurozone
QE programme.
She claims that while the ECB talks
down its desire to intervene, it has
action. “That’s how the ECB has func-
tioned all along,” she says. “It says it’s
hoping to withdraw emergency meas-
ures but at the same time has gone BETT
and bought up a whole bunch of debt.”
Figures show the bank bought €2.67bn
of sovereign bonds last week.
ER
With German chancellor Angela
Merkel refusing to consider other
measures such as increasing the size
of the Eurozone’s bailout fund or issu-
ing region-wide bonds, Greene says
that radical action by the ECB could be
the only option left.
Capital Economics’ Ben May agrees
with Greene that the bank might have
to fall back on QE: “We certainly think
it could if it wanted to,” he says.
But others are sceptical, pointing to
the institution’s hawkish rhetoric.
Saxo Bank’s Nick Beecroft says: “It
would go against the grain of the ECB.”
He also points out that while Germany
has agreed to a capital increase for the
bank, German fears about inflation
could be a barrier to any QE.
But he added that the bank could
scale up its bonds programme: “I
think it will do whatever is necessary
to save the euro.”

UK to be free of bailout
commitment from 2013
gotiate the bailout if they win next
▲

EUROZONE CRISIS year’s elections.

CHANCELLOR George Osborne has
said that Britain will be free of its com-
mitment to fund Eurozone bailouts by
2013, even as the European Council
(EC) meets today to negotiate the legal
basis of a permanent bailout fund.
The EU summit comes as the Irish
parliament voted yesterday to accept
the terms of the €85bn (£72bn) EU/IMF
bailout. The vote underscored Prime
Minister Brian Cowen’s fragile grip:
the bailout passed 81-75, with the gov-
erning coalition relying on the sup-
port of three independent MPs.
Opposition parties have sworn to rene-
Osborne announced that Britain
stands to make £440m from interest
on its £3.25bn bilateral loan to Ireland.
But he also assured parliament that
he has struck a deal to free Britain
from its participation in Eurozone
bailouts once a permanent fund is
established in 2013. The UK is obliged     
to contribute up to €7bn for any
bailouts until then under the terms of
a deal negotiated by former-chancellor
Alistair Darling.
The European Council meets today
and tomorrow to alter EU treaties in
order to establish a permanent fund.
 6 Economics
Job cuts rise
as tightening
begins to bite
▲
UK ECONOMY
BY JULIAN HARRIS
UNEMPLOYMENT rose in the three
months to October as government job
cuts took their toll, official data
showed yesterday.
Unemployment crept up to 7.9 per
cent, the highest rate in six months,
representing an increase of 35,000
people to 2.5m in total.
The news came from the Office for
National Statistics (ONS), which also
announced that government sector
employment was down 33,000 in the
third quarter of the year.
Employment in the private sector
remained steady, totalling 23m, the
same as the previous quarter.
The figures are in line with fore-
casts made by the government’s fiscal
watchdog, which expects 7.9 per cent
unemployment for this year, with a
slight rise to eight per cent next year.
But unemployment is projected to
fall from 2012 onwards, as “private
sector job creation more than offsets
falling public sector employment,”
the Office for Budget Responsibility
(OBR) said last month.
Government employment could
drop by 330,000 as part of the austeri-
ty measures. Yet there are still 6m
government employees in the UK,
according to the ONS data, including
over half a million civil servants.
Unemployment benefit claimants
actually fell by 1,200 in November to
1.46m. And 56,700 fewer people
claimed Jobseekers’ Allowance com-
pared to the same time last year.
And in London unemployment fell
by 4,000 from August to October.
The coalition is trying to boost the
jobs market by cutting tax, simplify-
ing regulations, and sealing interna-
tional trade deals, employment
minister Chris Grayling said.
“We are increasing the support
available to people,” he added.
But opposition leader Ed Miliband
said the coalition’s confidence in the
economy would “seem very hollow”
to people affected by unemployment.
CITYA.M. 16 DECEMBER 2010
NEWS | IN BRIEF
Eurozone employment stagnates
Employment failed to grow across the
Eurozone in the three months to
Employment minis-
ter Chris Grayling
hopes to boost jobs
September, it was revealed yesterday.
The Eurostat office estimated no change
in job rates across the single currency
area, yet revised up rates for the second
quarter of the year. Employment grew
by 0.1 per cent in the three months to
in the UK
Picture:Micha June, it said. For the third quarter, falls
Theiner/ CITY A.M of 0.7 per cent were recorded in Greece
and Spain.
Christmas boost for retail sales
ANALYST VIEWS: WHAT CAN WE DO TO STOP Holiday season high street sales are up
UNEMPLOYMENT RISING? Interviews by Julian Harris
on last year, employer’s body the CBI
reported yesterday. Some 67 per cent of
retailers expected higher sales than last
year, with only 11 per cent preparing for
MATTHEW SINCLAIR | TAXPAYERS’ ALLIANCE a decline. The positive index score was
“
the highest year-on-year comparison
since April 2002. However, fewer retail-
People on benefits have little incentive to work due to high, complex ers expect the sales boom to continue
taxes. The minimum wage of £5.80 an hour can be worth as little as 26p. By
”
into next year, with the VAT rise – on 4
adopting a more realistic poverty line, the government could save enough money January – threatening to dampen sales
to lower the marginal tax rate, and tackle long-term unemployment. of big ticket items.
SIMON KIRBY | NIESR Production wages edge upwards
Signs of pay rises in the manufacturing
“
sector are starting to emerge, according
to business group EEF. The average pay
I would limit fiscal consolidation until we have robust economic settlement crept up to two per cent
growth. Under the current plans, unemployment will hit 8.6 per cent next year.
”
from 1.8 per cent for the three months
Long term unemployment leaves a big scar, and we must avoid ending up with to October, it said. Only 23 per cent of
NEET [not in employment, education or training] young people. the surveyed settlements ended in a pay
freeze, and none resulted in less pay.
DAVID KERN | BRITISH CHAMBERS OF COMMERCE Fears grow for Japan’s economy
“
The Bank of Japan’s latest survey of
business conditions delivered more bad
Given the expected fall in public sector employment, it is critical that news for its ailing economy. The headline
businesses are able to create new jobs. The labour market needs to remain as flex-
”
index of the quarterly Tankan survey fell
ible as possible. Onerous regulation must be scrapped or suspended so that the to +5 (from +8), stoking fears of a con-
private sector can absorb the temporary public sector job losses. traction in GDP.
CITYA.M. 16 DECEMBER 2010 Economics 7

ANALYSIS l Total tax ratio as percentage of GDP, 2008

Factory boost

Denmark

Italy

France
40

for America’s

Germany

UK

Spain
30

Canada

Ireland

Japan
slow recovery

Australia

US
20

10
“This is more evidence suggesting
▲

US ECONOMY
BY JULIAN HARRIS
BROAD based rises in consumer
prices and manufacturing were
warmly received in the US yesterday,
following the Federal Reserve’s final
that the economy is getting its groove
back,” commented Ashworth.
Meanwhile, core US consumer
prices (excluding food and energy)
grew steadily by 0.1 per cent in
November, in line with expectations.

OECD: Britain’s tax burden is greater

meeting of the year on Tuesday. Headline inflation measured 1.1
Positive industrial production fig- per cent on last year, slightly down
ures offer hope for the American from October’s rate of 1.2 per cent.
economy as it stutters towards recov- “The period of disinflation has

than peer average and up since 1995

ery.
Overall production rose 0.4 per
cent in November, despite a huge
drop in automobile output.
“Motor vehicle output can be
volatile from month to month,” said
Paul Ashworth of Capital Economics.
largely run its course,” said Peter
Newland of Barclays Capital Research.
The data showed “small rises across
most core components,” he said.
Fed chairman Ben Bernanke
recently told television programme
60 Minutes that the US was “close to a average in 2008, despite falling in government – fell on 30 May this year,
▲

“Otherwise, the gains in manufactur-
ing output were fairly broad based.”
Excluding motor vehicles, manu-
facturing output increased by 0.7 per
cent on October.
And an index of business morale in
the sector bounced back after a fall in
November. The Empire State manu-
facturing survey jumped 22 points to
record a positive reading of 10.6.
point where prices start falling.”
Deflation would be “a serious con-
cern” if the Fed did not pursue histor-
ically loose monetary policy, he said.
And the US housing market
remains stagnant, according to the
National Association of Home
Builders. Yesterday the group report-
ed unchanged sales rates for
December.
WORLD ECONOMY
BY JULIAN HARRIS
BRITAIN’S tax burden has increased
since 1995 and is higher than that of
many peer countries, the Organisation
for Economic Co-operation and
Development (OECD) revealed yester-
day.
Overall taxes, as a proportion of
GDP, exceeded the 34.8 per cent OECD
recent years.
Some countries have reduced their
tax burden since 1995, such as New
Zealand, Ireland, Canada and the US.
And even high tax countries, such
as Denmark and Sweden, have
reduced taxes. But in the UK the bur-
den increased by around 1.5 per cent.
Tax Freedom Day – the day until
which all revenue effectively funds the
according to the Adam Smith
Institute.
And allowing for government bor-
rowing, the state consumes 187 days’
worth of incomes every year, they said.
In recent years tax revenues have
fallen in most countries, due to the
economic slowdown, and tax reduc-
tions designed to cushion the effects
of recession, the report said.
CITYA.M. 16 DECEMBER 2010
CBI President Helen Alexander backs targets
McDonald’s
faces suit in
US over toys
▲
CONSUMER
BY THOMAS HAMED
A US consumer group yesterday sued
McDonald’s to stop the world’s largest
hamburger chain from using Happy
Meal toys to lure children into its
restaurants.
The Center for Science in the Public
Interest is representing a Sacramento
mother of two in the lawsuit, which
alleges unfair marketing and other
violations of California’s consumer
protection law. It does not seek mone-
tary damages.
“The lawsuit is about the change,
not the money,” CSPI litigation direc-
tor Stephen Gardner said.
“We are proud of our Happy Meals
and intend to vigorously defend our
brand, our reputation and our food,”
said McDonald’s spokeswoman
Bridget Coffing. “We listen to our cus-
tomers, and parents consistently tell
us they approve of our Happy Meals.”
Walter Olson, a senior fellow at the
Cato Institute and tort reform advo-
cate, said he thinks that McDonald's
will ultimately prevail but that it will
likely have to go through multiple
rounds of legal wrangling, which
would suit CSPI.
“In the meantime, they’ve got their
step towards a national debate, which
is what they want,” Olson said.
McDonald’s debuted the Happy
Meal in the United States in 1979.
Modern offerings have included
themed items from popular films like
“Shrek” or sought-after toys like Ty
Beanie Babies.
The Happy Meal has been a huge
hit for McDonald’s –- making the
company one of the world’s largest
toy distributors – and spawning me-
too offerings at most other fast-food
chains.
But lately it also has come under
fire from public health officials, par-
ents and lawmakers who are frustrat-
ed by rising childhood obesity.
BT cannot hike prices to pay for retirement Soros invests £7m in Flybe
▲
TELECOMS
BY STEVE DINNEEN
BT will not be allowed to increase the
amount it charges rivals to use its
infrastructure to help plug its pen-
sion deficit, communications watch-
dog Ofcom ruled yesterday.
The move is a blow to the telecoms
giant, which had hoped Ofcom would
follow the example set by regulators
of the postal, energy and water indus-
Picture:Micha Theiner/ CITY A.M
BHP Billiton
tries, which sometimes allow deficit
recovery payments to be included in
regulated charges. The decision was
welcomed by rivals BSkyB and
TalkTalk, which will avoid paying
higher prices for the same service. An
Ofcom spokesman said: “We believe
this is important for creating an envi-
ronment in which regulated firms,
such as BT, and their wholesale cus-
tomers are willing and able to invest.
“The guidelines meet our principal
Clash over female targets
▲
REGULATION
BY THOMAS HAMED
THE Institute of Directors (IoD) yester-
day slammed the CBI’s “quick-fix”
suggestions to introduce more
women onto the boards of compa-
nies, believing that forcible diversifi-
cation would constrain British
industry.
The CBI is proposing that all listed
| Rio Tinto
duty to further the interests of citi-
zens and consumers by promoting
competition.”
BT’S mammoth pension deficit fell
by £2.9bn last month thanks to a
change that links pension payments
to the Consumer Prices Index infla-
tion measure instead of the Retail
Prices Index. The fall in deficit, which
stood at £9bn in 2009, will immedi-
ately have an impact on its interest
payments.
companies should be required to
report on boardroom diversity. While
stopping short of requiring firms to
have a quota of women on boards, it
means companies would have to set
internal female quotas and would be
forced to explain if they fall short of
this figure.
The CBI is calling for its proposal to
be added to the UK Corporate
Governance Code.
| Xstrata
AVIATION
GEORE Soros, the billionaire hedge
fund manager, yesteday emerged as a
significant new investor in Flybe, the
British low-cost airline, following its
flotation.
The financier, famous for betting
against the pound in the 1992 fiscal
crisis, has acquired a 3.4 per cent
stake though his Quantum Partners
vehicle that will have cost more than
News 9
But the IoD’s director general Miles
Templeman said that the CBI’s pro-
posal would risk the UK corporate
governance code becoming “politi-
cised and removed from commercial
realities”. He warned that a reliance
on forced gender diversity would
impact on other dimensions of diver-
sity that are necessary in the board-
room, including experience, personal
background and actual ability.
Public sector
pensions
hole grows
▲
UK ECONOMY
BY ALISON LOCK
ENGLAND’S public sector pension
scheme may be underfunded by
£100bn, research claimed yesterday.
Unions reacted with fury to claims
that the Local Government Pension
Scheme’s deficit in England has more
than doubled from £42m in 2007, and
is now just 57 per cent funded com-
pared with 74 per cent three years
ago.
Councils’ £5.8bn annual taxpayer
contributions to the LGPS now barely
cover new pension pledges, the
research by independent pension con-
sultant John Ralfe found.
They would need to increase contri-
butions by £4bn a year to plug the gap
over the next 25 years – even after cut-
ting £20bn from the deficit to
account for pension rises being val-
ued by CPI and not RPI, it said.
Ralfe said the debate just repeated
that held in the private sector a
decade ago. “I feel we are in a time
warp,” he told City A.M. “The differ-
ence is that in the private sector com-
panies realised defined benefit
schemes were very costly and very
risky, so took steps to address that.”
Ralfe’s data showed that the
scheme’s asset value rose just eight per
cent from 2007, to £132bn, while liabil-
ities soared 41 per cent to £232bn.
The LGPS also has an average asset
allocation of 70 per cent equities,
which Ralfe said left taxpayers severe-
ly exposed to the risk of a shortfall.
“If equities perform spectacularly
over the next few years, OK, but what if
they don’t? It is absolutely clear that
local councils don’t have a risk man-
agement strategy or a Plan B if it goes
wrong,” he said.
But Bob Summers, chair of the
Chartered Institute of Public Finance
and Accountancy’s pension panel
said there was “potential for some
very highly misleading information.”
£7m, according to regulatory filings
yesterday.
Flybe yesterday said it had exer-
cised its over-allocation of shares, rais-
ing another £6m and bringing in
extra funds for float manager Bank of
America Merrill Lynch.
Flybe, the UK’s biggest domestic air-
line, raised £60m by offering 20.3m
shares at 295p last week. Its shares fell
2.75p to 337.25p yesterday in their
first day of unconditional trading.
 The Capitalist
10 CITYA.M. 16 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

EXPRESS “Change your

shoes once a
YOURSELF, day. With
WITH UBS’S ‘fresh’ shoes,
you will feel
STYLE GUIDE better and
improve your
THE Swiss are famous for their precision,
but only when The Capitalist got hold of
UBS’s 43-page dress code for its branch staff
performance IHG’s Richard Solomons keeps track of his clan

did it become clear just how highly the

bank values exactness.
The dress code has been doing the
rounds for a few days now, but you might
not have had a chance to leaf through the
most important lines of this serious docu-
ment.
If your shoes have a heel over 7cm in
height, for example, forget it – it’s just not
allowed. Nor are open toes, dull leather or
colours other than black. And don’t forget:
“Change your shoes once a day. With ‘fresh’
shoes, you will feel better and improve your
performance at work.”
As for adding “personality” to your outfit
with jewellery, here’s where you’re allowed
to experiment! Within the colour scheme
of the dress code, that is. As for wearing
more than seven pieces of bling, it is strict-
ly forbidden. (What is it with the number
seven?)
So what is the philosophy behind this
solemn instructional document (aside
from that of an 19th century finishing
school)? Well, it stems from a belief that
“individuals are judged primarily on their
The UBS dress code shows how to tie such fashionable French neck-wear as a “foulard” and “nicky”
appearance” and that the right outfit
imparts “the concepts of truth, clarity…
stewardship, responsibility and integrity,
conscientiousness, reliability and consis-
tency, and respect of the highest profes-
sional standards”.
The Capitalist is just waiting for the bank
to roll it out across the investment banking
division. Clarity and stewardship – surely
that’d be a few hundred million in fees
well spent?
ALL IN THE FAMILY
Many an executive has pondered the diffi-
cult question of how to stay in touch with
the family while maintaining such a trying
schedule.
at work.”
Luckily, it seems the Intercontinental
Hotels Group’s chief financial officer
Richard Solomons has found the solution:
install an app on your iPhone that tracks
the whereabouts of your wife and kids.
OK, a little... unconventional, but, hey,
how else are you going to defend your wife
from stalkers?
CHEWING COAL
With Portuguese government min-
isters pleading with the popula-
tion not to hoard sugar in
anticipation of a shortage, and
Pakistan and Egypt also running
low, Societe Generale’s Dylan Grice
used his regular “Popular Delusions”
research note to talk down the idea of
investing in commodities. Specifically, he
argues: “Commodities for the long run?
Not on your Nellie – I’d rather eat coal!!”
You see, it’s just easier to avoid the heart-
break if you steer clear of ’em: “Prior com-
modity bull markets have been much like
England football managers,” he writes.
“They promised much, burned brightly for
a while, but ultimately crashed, breaking
the hearts of those who believed in them
most.” Oh, Dylan. See, the rest of us just try
not to take Fabio Capello too seriously.
FRAYING CABLE
Whoops! A rather hasty cut-away dur-
ing last night’s Jeff Randall Live show
on Sky gave a little glimpse of how
business secretary Vince Cable gets
through his busy days. Cable was
shown gratefully accepting a paper
cup of Costa coffee before the produc-
ers cut quickly back to their anchor.
Sometimes you just need that extra caf-
feine injection before a live two-way, eh?
CITYA.M. 16 DECEMBER 2O10
RBS transfers Chinese
retail arm to Asian bank
▲
BANKING
BY ALISON LOCK
ROYAL Bank of Scotland (RBS) contin-
ued its divestment plan yesterday by
winding down its retail and commer-
cial operations in Chinese cities.
RBS will tranfer its 25,000-strong
customer base, business portfolios
and employees in Shanghai, Beijing
and Shenzhen, to Singapore-based
bank DBS China.
NEWS | IN BRIEF
eBay snaps up Critical Path
Web commerce company eBay said yes-
terday it acquired Critical Path Software,
a mobile software application developer,
as the company further embraces selling
via mobile. Terms of the deal were not
disclosed. US firm Critical Path Software
has worked with eBay for over two years,
most importantly developing its app for
Apple’s iPhone, which eBay says has been
downloaded more than 14m times.
NEW
Y EAR ’ S
EVE
2010
Escape the crowds in central
London and make New Year’s
Eve 2010 one to remember
with a private fireworks
display at midnight.
TICKETS ARE £125 (£115 FOR MEMBERS)
AND ARE AVAILABLE ONLINE.
The Roof Gardens
99 Kensington High Street, London W8 5SA
www.roofgardens.virgin.com/cluboffers
E: victoria.l@roofgardens.virgin.com
T: 0207 368 3960
News 11
The agreement will take six months ANALYSIS l RBS
and involves no cash deal, transfer of 50 p
outlets or business licences. 40.76
RBS will now focus on developing 15 Dec
46
its wholesale and investment bank-
ing businesses in the country. “RBS
remains strongly committed to the 42
long term development of its busi-
ness in China,” its statement said.
The deal is the latest non-core asset 38
divestment following its restructur-
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec
ing in the financial crisis. RBS, led by chief executive Stephen Hester, will focus on wholesale banking in China Picture: PA
Twitter financing values it at $3.7bn
Twitter has raised $200m in financing in
a deal that values the microblogging com-
pany at $3.7bn (£2.4bn), less than a year
after it began its first serious efforts to
make money. The investment came from
Silicon Valley venture capital firm Kleiner
Perkins Caufield & Byers and existing
investors. The money will help Twitter
grow the company, Twitter said in a post
yesterday on its corporate blog.
YOUR TICKET INCLUDES:
• Entry to The Club from 8pm
• A mini bottle of Moët
Champagne
• A selection of
complimentary cocktails,
drinks from the bar and
welcome canapés until 9pm
• Live music in the Marquee
• Complimentary snack from
the BBQ
• Three of London’s top DJs
in the Clubhouse
• Breakfast nibbles between
3am and 4am!
 12 News CITYA.M. 16 DECEMBER 2010

Virgin Atlantic confirms MAN OF THE MOMENT

a number of approaches
Airlines have been named as the 49 per cent stake in Virgin Atlantic, is
▲

AVIATION
BY MARION DAKERS
VIRGIN ATLANTIC confirmed yester-
day that it has received “a number of
lines of enquiry” from other airlines
about a possible tie-up or merger deal.
Sir Richard Branson’s airline said it
has appointed Deutsche Bank to help
handle the approaches, which it said
are likely to run on for a number of
months.
Rivals including US-based Delta
interested parties, though Delta told
City A.M yesterday: “As a matter of pol-
icy, we do not comment on industry
rumors or speculation about poten-
tial airline partnership.”
Deutsche Bank also declined to
comment.
Branson has previously talked
about merging Virgin Atlantic with
another carrier in order to compete
as the market consolidates.
Singapore Airlines, which owns a
thought to remain keen to offload its
holding.
Virgin’s path to a tie-up has recent-
ly been cleared by British Airways and
Iberia, which got their £5bn merger
past regulators on both sides of the
Atlantic last month. Virgin had earli-
er protested against the deal, claim-
ing it could stifle competition.
Virgin ended talks with Lufthansa
last year about a potential acquisition
of British airline bmi.

| PROMOTION

MARK ZUCKERBERG, 26, the billionaire co-founder of Facebook, was yesterday named
Time magazine’s 2010 person of the year. He beat WikiLeaks editor-in-chief Julian
Assange, the 33 rescued Chilean miners and the US Tea Party movement to the honour.
The award is given to the person judged to have most influenced the culture over the last
year. Federal Reserve chairman Ben Bernanke won the prize in 2009. Picture: REUTERS

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CITYA.M. 16 DECEMBER 2010 News 13

Three fired as Apprentices enter final straight

pleting a Ph.D in Papyrology) to inter-
rogate the final five. Her steely glare
and raised eyebrow were as effective as
ever, though other interviewers
favoured a less subtle approach. “I’m
going to give you an opportunity to do
it the hard way and I’ll rip you to
shreds,” snarled Claude Littner, play-
ing the role of a cut-price Bond villain.
APPRENTICE REVIEW Grilled in the glamorous surround-
GRAEME ALLISTER ings of Viglen’s St Albans headquar-
ters, each candidate had their own
way of dealing with the interview
wondered if they were the result of
Viglen’s first foray into artificial
intelligence.
Stuart seemed to be having the
toughest time, with questions
raised about his ethics, business
practices and just how truthful his
CV was. He was also asked
the question viewers have
been waiting 11 weeks for
an answer to: “I’m Stuart
Baggs, the brand’ – what on
earth are you talking
of telecoms licenses available in the
Isle of Man). Jamie may or may
not have a third nipple and
apparently Chris is one of the
foremost theology scholars in
Britain. When he was pressed on
it, he admitted he meant he
did well at A Level. One
wonders how he’s
reinterpreted his
Cycling Proficiency
test and grade two
piano exam.
out that there’s a difference between
Amsair and Amstrad and the correct
pronunciation of Viglen.
Back in the boardroom debate con-
tinued about the five hopefuls. Was
Stella passionate enough? Should
Joanna stick to running her small
business? There was at least one easy,
and long overdue, decision as Lord
Sugar finally told Stuart to pack his
Baggs. A true Christmas miracle.
With another two firings due, Lord
Sugar got rid of Joanna and Jamie,

T
HE penultimate episode and the
welcome return of a familiar
face. For the interview challenge,
Lord Sugar prised Margaret
Mountford from her scrolls (she’s com-
process. Joanna crumbled, Jamie about?” Speaking of learn- albeit with rather less relish. And so
blamed others for his failings while We never quite found out ing new things, per- to the final, with Stella vs Chris, in a
Stuart violated basic social conven- but it is fascinating what haps mid-interview battle of the monotones, with experi-
tions. Stella and Chris meanwhile reg- you learn from these inter- wasn’t the best time ence on one side and education on
istered so little emotion you views (aside from the range for Joanna to find the other.

Paul Idzik, chief

executive, joined
DTZ in 2008 after
standing down as
chief operating
officer of Barclays

DTZ narrows
losses to £6m
said chief executive Paul Idzik, who
▲

PROPERTY
BY MARION DAKERS joined the firm in 2008 after he left his
role as chief operating officer at
REAL estate consultant DTZ said yester- Barclays. “We have got through our
day its first half loss narrowed on a restructuring and now feel very confi-
strong performance in Asia, as it dent, with results across all but one of
retained a cautious outlook due to our markets growing.”
market uncertainty in the UK and The firm secured £10m of mezza-
Europe. nine debt from majority shareholder
The company yesterday posted a pre- Saint George Participations in October,
tax loss of £6m for the six months to 31 alongside an extended £15m revolving
October, compared to a loss of £20.6m credit facility from RBS.
in the same period last year.
DTZ, which competes with property ANALYSIS l DTZ
services firms such as Jones Lang 52 p
LaSalle and CB Richard Ellis, said it was
trading in line with market expecta- 38.00
tions for the full-year after it issued a 48 15 Dec
profit warning in October.
The company said its pipeline for
44
new business was healthy but econom-
ic uncertainty in Britain and Ireland,
its largest market, and across continen- 40
tal Europe, was hurting revenues.
“DTZ is a bit of a work in progress,” 20 Sep 8 Oct 28 Oct 17 Nov 7 Dec

JPMorgan buys Allen & Overy

office from Hammerson venture
£35m, the developer said.
▲

PROPERTY
JPMORGAN Asset Management has
agreed to buy law firm Allen & Overy’s
office on the Bishops Square site in a
deal worth nearly £557m, joint sellers
Hammerson and the Oman
Investment Fund said yesterday.
The 71,900 square foot office,
which was developed and completed
by Hammerson in 2005, was valued at
£510m in June with passing rents of
Hammerson said its net proceeds
from the sale of its stake in Bishops
Square stood at £79m.
“[T]his acquisition represents a fur-
ther expansion of our funds’ core
property portfolio in Europe,” said
Peter Reilly from JPMorgan.
Clifford Chance and Jones Lang
LaSalle advised the sellers, while
JPMorgan was advised by Berwin
Leighton Paisner and Deloitte.
14 News CITYA.M. 16 DECEMBER 2010

Tullow starts production

ANALYSIS l Ghana
Licence / Block
Ghana
Tullow operated
Tullow non-operated

Field/ Discovery

Oil at first Ghanaian oil well

Takoradi
African coast. in a note the start of production “is a

▲
ENERGY
Tweneboa BY MARION DAKERS Production at the Jubilee field, timely reminder of how far Tullow has
which is managed by Tullow, will start come in a very short space of time in
Jubliee UK oil explorer Tullow celebrated its at 120,000 barrels per day, and is Ghana with Jubilee on stream just
Owo Odum first oil production in Ghana yester- expected to double within three years. three and a half years after its discov-
day, which is set to propel the country Mills warned that the lucrative find ery”.
DEEPWATER WEST CAPE into the top ten producers in sub- “means that we are assuming a very Tullow remains locked in disputes
TANO THREE POINTS Saharan Africa. serious responsibility. And especially with the Democratic Republic of
Ghanaian president John Atta Mills for those who are in leadership posi- Congo and Uganda over its licenses for
50km opened the valves at a televised cere- tions, we must ensure that it becomes oil fields in the countries.
Gulf of Guinea mony to mark the nation’s first oil out- a blessing not a curse.” Its shares fell 1.7 per cent to close at
put, around 40 miles off the west However, Evolution Securities said 1,215p.

Xcite suffers after BG Group strikes

hit by more delays crude in first well
at Bentley field off Chinese coast
ENERGY ENERGY

AIM-listed oil explorer Xcite Energy
said work at its Bentley field in the
North Sea has been delayed again by
poor weather conditions and techni-
cal glitches yesterday.
The firm, which had hoped to start
oil flow testing in the first week of
December, said yesterday work will
not begin until weather and opera-
tional conditions improve.
Aberdeen-based Xcite said however
that plans for an alternative testing
procedure were underway. Shares in
Xcite, which almost doubled in price
when the firm confirmed the pres-
ence of oil at the well in October,
closed 11.4 per cent down at 226.85p.
▲
OIL company BG Group has struck oil-
bearing sands off the Chinese coast at
its first attempt, the firm said yester-
day.
The firm will now test the find in
the South China Sea to assess poten-
tial for oil production.
If viable hydrocarbons are found,
the Chinese state-run oil company
CNOOC has the right to buy up to 51
per cent of the proceeds but will con-
tribute to development costs.
BG Group is due to complete a sec-
ond well in the area near Hainan
Island in the new year.
Shares closed 1.3 per cent lower at
1,301p.

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CITYA.M. 16 DECEMBER 2010 News 15

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

Threadneedle
Asset manager Threadneedle has hired
Michael Langlois (pictured) as its head of
wholesale distribution, Asia. He will begin
work in January and will be working closely
with Raymundo Yu. Langlois will be in charge
of relationships with Asian financial institu-
tions and also of dealings with global private
banks. He joins the firm from Permal Group
and has also worked previously at Merill
Lynch.
PricewaterhouseCoopers practice with three appointments, all of
PwC has added to its nuclear energy whom will start immediately. Richard
Lobley moves over from an investment
firm in Abu Dhabi, having spent 10
years consulting after his career as a
Royal Navy nuclear submarine engineer.
He will now be based in London.
Rebecca Holyhead is also joining the
firm, building on her 10 years’ experi-
ence in the UK nuclear industry. She
moves to PwC’s London office from the
World Nuclear Association. Matt Burley
has also been hired and will be based in
Bristol.
White & Case
The global law firm has appointed two
new partners, Jacqueline Evans and Lee
Cullinane, who bring over 40 years’
experience in bank finance and acquisi-
tion law between them. They both join
the company from Mayer Brown.
Previously, Evans was a partner for a
decade at Allen & Overy in its leveraged
finance practice, while Lee has been a
partner for 15 years at Clifford Chance.
Samena Capital
Ekaterina Sharashidze has joined
Samena Capital as an executive director
of strategy and business development.
She will lead the firm’s business oppor-
tunities strategy, building on her 15
years’ business experience in manage-
ment consulting, investment banking
and venture capital. She has also
worked for the government of Georgia
for five years, including a stint as a min-
ister, during which time she led major
economic reforms.
Asia Property Fund
The APF has added Erle Spratt as a
fund manager and Yung Ho as an invest-
ment manager. Spratt joins the firm
from Lend Lease Management in
Singapore, while Ho joins from LaSalle.

To appear in CITYMOVES please email your career +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com

Former UBS
banker in US
tax fraud case
ance before a judge on Tuesday. Lawyers
▲

REGULATION
BY HARRY BANKS
FEDERAL prosecutors have charged a
former UBS banker with encouraging
his wealthy American clients not to dis-
close to US tax authorities they had
money in offshore accounts.
Renzo Gadola, an investment adviser
based in Switzerland, faces charges of
conspiracy to defraud the United States,
the US attorney’s office in Miami said
in a statement yesterday.
Gadola, a Swiss citizen who worked
at UBS from 1995 to 2008, was arrested
on 8 November, two days after meeting
a client at a Miami hotel and allegedly
attempting to persuade the person
from disclosing offshore account infor-
mation to US officials.
In filed court documents, US officials
charged Gadola worked with another
unidentified former UBS banker to
hide clients’ money from US tax scruti-
ny by shifting undeclared funds from
UBS accounts to Switzerland-based
Basler Kantonalbank.
Gadola told authorities there must
have been a case of mistaken identity
that led to his arrest, according to court
papers.
He pleaded not guilty in an appear-
for Gadola were not immediately avail-
able for comment.
The unnamed ex-UBS banker was
described by prosecutors as a former
executive director for UBS’s North
America International business, who
left the bank seven years ago, taking
150 clients with him to set up an inde-
pendent investment group in
Switzerland.
The case comes after US authorities
recently ended a probe into UBS, which
was charged by federal prosecutors
with helping roughly 17,000 clients
with $20bn of assets hide their
accounts from the Internal Revenue
Service. As part of a settlement, Zurich-
based UBS paid $780m and handed
over the names of more than 250 client
accounts and ended its US cross-border
banking business.
In the Gadola case, prosecutors said
the unidentified Swiss banker received
some $445,000 from a Mississippi client
before transferring it first to UBS and
then to a Basler Kantonalbank account.
The client later said he wanted to
declare the money under a voluntary
disclosure programme, but was advised
against it because his account was too
small.

French Radio London gets

funds from a City investor
and will take a position on the firm’s
▲

PRIVATE EQUITY
FRENCH Radio London, a new web-
based French-language station, has
attracted City investment from
Thierry Baudon, a founding partner
of private equity firm Mid Europa
Partners.
The station, which has been broad-
casting for just four weeks, is
designed to capture London’s 400,000
native French speakers as well as
other Francophile listeners.
Baudon will be a “substantial
investor” in the station, FRL’s finan-
cial director Thierry de Panafieu said,
board immediately.
Baudon said he was “delighted” to
support the station. “It fills an obvi-
ous gap in the market,” he said.
Before founding Mid Europa in
1999, Baudon headed the internation-
al finance division of the Suez Group
and worked for the EBRD and World
Bank Group. Mid Europa invests in
central and eastern Europe with
€3.2bn (£2.7bn) under managment.
FRL’s commercial partners include
accountant Mazars, Cityjet airline,
luxury hotel firm Relais & Châteaux
and travel operator Club Med.
 16 Consumer News CITYA.M. 16 DECEMBER 2010

NEWS | IN BRIEF
Conran narrows its losses
Luxury designer and restaurant firm
Terence Conran is facing better fortunes,
despite reporting losses this year. The
firm reduced losses to £806,000, far
lower than the £8m reported in 2009.
Conran Holding’s fortunes were revived
after it launched a value range in its
London shops. Chief executive Roger
Mavity said that the new line attracts
younger consumers to the stores. “So for
example you can get very nice dining
chairs for £80 or light fittings for £30,”
Mavity said. The firm also expanded its
London presence with a store on
Marylebone High Street. Its flagship
London store and restaurant are in
Chelsea, and it has other stores in New
York, Paris and Dublin.

Portmeirion in royal boost

Shares in Portmeirion hit a 13-year high
yesterday as the pottery manufacturer
said it would smash profit forecasts for
this year and expected to launch 250
Tesco, led by chief new products in 2011, including a range
executive Sir Terry of Royal Wedding items. Chairman Dick
Leahy, is up against Steele said export sales to the US,
Carrefour in the Korea, Canada and Italy had been
race to buy the strong. Portmeirion bought Spode and
Zabka retail chain. Royal Worcester from their administra-
tors for £3.2m just under two years ago
Picture: GETTY and has performed well in the US.

Tesco faces a battle

for Czech shop chain
RETAIL
▲

Investments which owns Zabka, be considered at the beginning of

BY JOHN DUNNE
TESCO is lining up against Europe’s
largest retailer Carrefour in the race
to buy the Zabka retail chain.
The pair are among four bidders
pursing Zabka, which has 2,300
stores in the Czech Republic and
Poland.
“There are four bidders left, two
strategic (investors) and two finan-
cial (investors),” a source close to the
transaction said.
“The two strategic investors are
Tesco and Carrefour,” a market
source added.
Josef Janov, managing partner for
Poland at Czech-based Penta
declined to comment but con- 2011.”
firmed the final decision on the sale French company Carrefour is a
would be made in January. hypermarket chain which mainly
Tesco already has a strong pres- operates in Europe but also has
ence in Poland and the Czech interests in South America.
Republic. Poland is already its sec-
ond largest European market in ANALYSIS l Tesco
terms of sales and profits, and in 445 p
the Czech Republic’s capital Prague
Tesco opened its first standalone 426.90
435 15 Dec
F&F clothing store this year.
Offers of around €300m (£256m)
425
are expected to be made for the
business.
Janov said last month: “The deci- 415
sion on the initial public offering
(IPO) of Zabka or another form of 405
our exit from the investment might 20 Sep 8 Oct 28 Oct 17 Nov 7 Dec
CITYA.M. 16 DECEMBER 2010 Consumer News 17

H&M SALES UP IN NOVEMBER

Inditex sees profit soar as
emerging markets prosper
September, said sales grew 14 per 45 per cent since the beginning of the

▲
RETAIL
BY HARRY BANKS
THE world’s biggest clothing retailer
Inditex announced a 42 per cent rise
in nine-month net profit yesterday,
buoyed by developing market growth
and new store openings.
Cash-rich Inditex, which launched
online sales of items such as black net
skirted cocktail dresses for around
£40 for its flagship brand Zara in
cent during the period.
Net profit for the nine-month peri-
od was €1.18bn (£1bn).
Europe’s retailers are seeing a tick-
up in business, especially in emerg-
ing economies. Inditex, which
operates nearly 5,000 stores in 77
countries, said sales in local curren-
cies grew ten per cent from 1 August
to 12 December.
Shares in Inditex have risen around
year, thanks to strong sales and
healthy margins, while Spain’s blue-
chip index has dropped about 15 per
cent. Inditex has reduced exposure to
the sluggish economy of home base
Spain, which accounted for 28 per
cent of sales in the first half, down
from 32 per cent in the first half of
2009.
The company was founded by
Spain’s richest man Amancio Ortega.

SWEDISH fashion giant Hennes & Mauritz (H&M) said yesterday that sales at its estab-
lished stores rose eight per cent in November from a year earlier. The retailer said total
sales, which include newly opened stores, were up 17 per cent in the month. November is
the final month of the company’s financial year and it said full-year total sales were up
15 per cent with like-for-like sales up five per cent. Picture: Micha Theiner/ CITY A.M.

SuperGroup
hit by costs
per cent yesterday, eventually closing
▲

RETAIL
BY JOHN DUNNE
SUPERGROUP shares dived yesterday
as a warning over the rising costs of
materials spooked investors despite a
healthy profit update.
The company – which owns the
popular Superdry brand – has seen its
shares soar since they were floated at
500p in March – raising £395m to
bankroll its expansion.
It made an underlying pre-tax prof-
it of £13.5m in the six months to 31
October. That compares with analysts’
consensus forecast of £13.2m.
SuperGroup said: “The
autumn/winter collection has been
well received by our customers in the
UK and overseas, and our owned and
franchised retail expansion is pro-
gressing as planned.”
But some analysts went cold on the
company after it warned that the cost
of raw materials was putting it under
pressure. Its shares dropped up to 17
10.9 per cent lower at 1.450p.
The lack of an interim dividend was
also seen by some as a disappointment.
The retailer has opened four new shops
and 13 concessions in the first half.
Keith Bowman of Hargreaves
Lansdown said: “Pre-tax profits appear
to be at the high end of analyst expecta-
tions. Nonetheless, accounting issues
and concerns over rising input costs –
cotton prices in particular – appear to
have taken the shine off the shares.”
ANALYSIS l Supergroup
1,700 p 1,450.00
15 Dec
1,500
1,300
1,100
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec

ANALYST VIEWS: IS THE SHINE COMING OFF

THE IPO FIRM’S SUCCESS STORY Interviews by John Dunne
PHILIP DORGAN | ALTIUM SECURITIES

“
Given the premium rating and no upgrades, coupled

”
with the gross margin comment, the shares may
struggle to make progress.

NICK BUBB | ARDEN

“
The statement reads very well, with Christmas

”
going well. SuperGroup looks to be ahead of expec-
tations in sales for womenswear for 2011 to 2012.

MATTHEW MCEACHRAN | SINGER CAPITAL MARKETS

“
If the business were trading on a low multiple raw

”
material rises etc would not matter. But it’s not, and
has had unimpeded progress.
 18 News WORDS BY STEVE DINNEEN CITYA.M. 16 DECEMBER 2010

City chairman says the politics of

envy is causing an exodus of talent
The UK faces an epic “Why would
struggle to keep its you stay, if
best bankers. Stuart you could
Fraser is leading the earn at least
charge for the City. the same
amount of

S
TUART Fraser’s office at the City of
London Corporation features an money for a
interesting contrast. Along one wall
is a series of large photographic lot less tax?
prints of the London skyline, including a
shot of the stunning white Guildhall Yard, These are
next to which we are sitting. The opposite
wall contains a small shrine to Asia: a scale young men,
model of a Chinese bell, a temple carved
out of wood and a scroll painted with often with
Chinese characters.
The division is telling; the power-struggle short careers.”
between Asia and the West is a recurring
theme for the City of London Corporation
policy chairman, with new EU legislation
on bankers’ bonuses threatening to acceler-
ate an exodus of talent he says has been qui-
etly underway for years.
The Committee of European Banking
Supervisors (CEBS) announced its
labyrinthine new rules earlier this week,
which, after cutting away the yards of red
tape, will boil down to bankers receiving a
fraction of their bonuses up front (around a
tenth for those earning upwards of £1m).
Add to this the spectre of a unilateral tax
on bonuses being thrust onto the agenda
by business secretary Vince Cable, and
things start to look very uncomfortable
indeed for City workers.
“What worries me,” says Fraser, “Is that
the rest of the world isn’t doing it. We live
in a global age with global opportunities
and Asia is very keen to take business off us.
This is Europe not taking into account the
rest of the world and it will drive away tal-
ent. It is a very serious concern.
More financial services will go to Asia
regardless, but if we want to accelerate the research commissioned by his department Stuart Fraser says the least the same amount of money for a lot directive, which he says was initially
trend by driving business away, this is how shows, contributes more to the Treasury EU needs to wake up less tax? These are young men, and a lot of “awful” but, after a great deal of tweaking,
to do it.” coffers than any other industry – a stagger- to the migration of them, particularly traders, have very short is no longer such a drain on the industry.
Fraser, 64, is a City stalwart, taking his ing £53.4bn. talent to Asia careers. They burn out after about 15 years, Part of the problem with the regulation,
first stockbroking job in 1963 and working Given its vastly disproportionate contri- much like footballers, so they want to go he says, is the sheer speed at which the
across fields including forex, equities and bution to the public purse, Fraser is angry Picture: and earn some money.” finance industry has changed in the wake
fund management. He was elected to his that the financial services sector is still Micha Theiner Ironically, the biggest loser will be the of the financial crisis.
current role in 2008 but maintains an inter- being demonised by populist politicians /City A.M. British taxpayer. The new research shows “It’s like technology – when the change
est in the private sector as director of who want to win over disenfranchised vot- the average tax paid by financial services is slow you can keep up. But nowadays I’m
Brewin Dolphin. He is also an adviser to the ers. workers is £40,000. Even a relatively small struggling with my BlackBerry Torch.
Shanghai government, presumably in the “We are not talking about systemic risk migration would cause overall tax receipts That’s not age – it’s the fast pace of change.
spirit of knowing your enemy, helping it to anymore,” he says. “We are not talking to plummet. Regulators are struggling. You need some-
develop as a global finance centre. But his about another financial crisis. We are being Fraser is cautious not to heap the blame one who can keep up.
loyalty lies with the City, which, as new anti-highly paid people in the financial entirely at the door of politicians (“not only “The problem is, if you are a bright
services industry. It’s as simple as that. do we have the comprehensive spending young man and someone is offering you
“I would call this targeting of the bonus review coming in, we have bonus season half the money to become a regulator, why
CV | STUART FRASER structure the ‘politics of envy’. No govern- around the corner too. People are very would you take it? What the regulators
ment outside of Europe is telling employers angry. No wonder politicians are keeping a need to do is pay more for talent. We need
what they can pay their employees. low profile...”). However, Cable’s antipathy the poachers to become the gamekeepers
1963: Entered the City as a trainee stock- “We’re in danger of castigating a whole towards the banking sector – and his for a while.”
broker before moving through a number of industry because of the inappropriate predilection for a unilateral bonus levy – He says the pace of change underway is
investment related disciplines, including actions of a few. Some of this legislation has would be “disastrous”. akin to the Big Bang in 1986, when
foreign exchange, money broking, interna- a vindictive nature and it will drive away “I have known Vince for a long time and Thatcher, almost literally overnight, dereg-
tional equities, investment research and the talent.” “I would call obviously he has very strong convictions on ulated the banking industry. Wall Street
fund management. And Fraser is in no doubt where the tal- this, but clearly I have to disagree with banks clamoured to expand their UK oper-
ent will go – Asia. His links to the east give this targeting him – it would be a big mistake.” ations and London regained its spot as the
1980: Became a member of the London him a better idea than most of the threat it But with chancellor George Osborne world’s foremost financial hub.
Stock Exchange. can pose to UK financial services. of the bonus loathe to resurrect Alistair Darling’s bonus Now Fraser says the movement is
But bears have been predicting migra- levy, Fraser is more concerned about the towards Asia: “When you think of the sheer
1993: Became a common councilman of tion of talent to new financial hubs like structure the often-pernicious grip over the City wielded size of the Asian economies – China and
Hong Kong and Shanghai for years – when by Brussels, which he says dominates UK India in particular – you have billions of
the City of London. will it happen? politics of financial policy. people at the early stages of finance. When
“It’s already here,” he says. “The danger is “That is why we have to be very active in they get to our standard they will be the
2008: Took up current role as policy
chairman of the Corporation of London.
that you don’t see it. It’s not a mass exodus envy. We are Europe, to make sure new rules do not leaders. It is inevitable, although I think it’s
of 100,000 people. It’s the rainmakers – the destroy London’s place as a global financial several decades away.
Personal life: He has been married to his
most talented fund managers and traders. being anti- centre. It would be a disaster for the UK if “What we have to make sure is that
In terms of numbers, you’re not going to we became just another European city.” when they grow, some of that comes back
wife Laura for 41 years They live in
Blackheath. In his spare time he enjoys
notice less people on the trains. But over highly paid He hopes that continued lobbying can to London. That’s the key.”
time they will bring other businesses over bring the European rules from their cur- Unless the importance of the City is
travel, walking, golf and the theatre. to service them. people.” rent state into something “workable-with”. recognised by politicians – at home and in
“Why would you stay, if you could earn at He points to the alternative investment Europe – this seems far from guaranteed.
CITYA.M. 16 DECEMBER 2010
Hochtief pursues
Spanish target ACS
with sweeter offer
CONSTRUCTION
▲
BY HARRY BANKS
SPAIN’S ACS turned up the heat on bid
target Hochtief yesterday by sweetening
an all-share offer to value its German
construction rival at around €4.9bn
(£4.18bn).
The Spanish group, which has been
stalking Hochtief since September,
said it had improved its bid to nine
ACS shares for every five Hochtief
shares from its previous eight-for-five
offer, adding it was confident the high-
er bid would succeed.
ACS’s amended offer was unexpect-
ed. It values Hochtief at €63.8 per
share, a two per cent discount to the
market price as Hochtief shares rose
1.2 per cent €65.13.
ACS shares closed 1.1 per cent down
at €35.4 as its shareholders digested
the move. ACS had been widely expect-
Novartis pays £8bn
for rest of US’ Alcon
PHARMACEUTICALS
▲
BY HARRY BANKS
NOVARTIS has wrapped up its long-
awaited buyout of the remainder
of US-listed Alcon for $12.9bn
(£8.25bn), after sweetening its orig-
inal offer with cash.
The Swiss drugmaker is hoping
the deal with its rival, worth some
$52bn in total, will help it diversify
and protect it against patent loss
on big selling medicines such as
blood pressure drug Diovan.
Novartis has been trying to
clinch 100 per cent ownership in
Alcon since the start of the year,
but its original all-paper offer of 2.8
Novartis shares for each Alcon
CITY VIEWS: DOES THE GOVERNMENT APPRECIATE THE CONTRIBUTION
THE CITY MAKES TO THE ECONOMY?
GETHIN JONES |
RSA
“I think the government doesn’t
appreciate the City, really, and
neither do most of the voting UK
public. I just don’t
think the public
realises how
much tax revenue
the City gener-
ates, or how much
of the pub-
lic those
revenues
help.”
ed to let its initial offer run its course.
And in another sign that ACS wants
to wrap up the takeover quickly,
sources said that the chief executive of
Qatar Holding, the Qatari investment
vehicle which last week snapped up a
9.1 per cent stake in Hochtief, would
meet ACS.
If ACS can get its holding above 30
per cent it can then gain control of
Hochtief by taking its stake up to 50
per cent, without having to buy out all
the German group’s shareholders.
Analysts said the move showed ACS
was serious about the offer and would
probably not raise its bid again,
although one of Hochtief’s top 12
investors dismissed the new bid as too
low.
“The current offer price is at a dis-
count to the market price of Hochtief,”
said Kathleen Dewandeleer, a fund
manager at Scottish Widows.
share met stiff resistance from
Alcon’s directors, who repeatedly
dismissed it as “grossly inade-
quate”.
Novartis’ move completes the
final stage of a lengthy process to
get full control of the eyecare
group, known for its contact lens
solutions, and the dominant player
in the multibillion-dollar market
of intraocular lenses, small lenses
implanted in the eye to correct
problems focusing.
Alcon is also number one in
cataracts – an area that is set to
benefit from ageing populations.
Novartis also said it was restart-
ing a SwFr10bn (£6.59bn) share
buyback programme, suspended in
Interviews by Thomas Hamed
GIANCOMO GHILLO |
BDB
“It may do because taxes in the
highest brackets have gone up.
The resentment across the UK
may have something
to do with the gov-
ernment’s response
against the City,
considering how
unpopular it is
outside of
London.”
News 19
60
BEST OF THE BROKERS
ANALYSIS l HMV
p
HMV
NEWS | IN BRIEF
Australia sells power assets
34.00 Deutsche Bank rates the retailer “hold” Hong Kong’s CLP Holdings and Origin
15 Dec with a target price of 45p. The broker has Energy agreed to buy energy businesses
50 cut its profit forecast by 20 per cent after for $5.3bn (£3.4bn) from Australia's
New South Wales state, which raised
a gloomy set of results last week, and sees less money than expected in a long-
an eight per cent drop in like-for-like sales
40 awaited sale. The win catapults Origin
in the second half of the year. It has con- Energy to the number one position
30 cerns about the focus on DVD and music. among Australia’s energy retailers, over-
20 sep 8 Oct 28 Oct 17 Nov 7 Dec taking AGL Energy, a surprise loser in
the bid.
ANALYSIS l Valiant Petroleum VALIANT PETROLEUM Deutsche Tel pays Vivendi £1bn
800 p RBS has downgraded the oil explorer to
Deutsche Telekom is to pay Vivendi
505.00 “hold” from “buy” with a target price of €1.25bn (£1.07bn) to settle an 11-year
15 Dec
700 565p, down from 900p. The broker dispute over ownership of Polish mobile
believes the firm’s profit potential will not phone operator PTC, in a boost to the
German company's expansion plans in
600 surface until the end of 2011 when drilling Eastern Europe. For Vivendi, the deal
activity increases, and that the firm’s provides a welcome cash infusion that
500 upstream portfolio will grow less quickly. could be used for acquisitions, such as
20 sep 8 Oct 28 Oct 17 Nov 7 Dec
buying out minority shareholders in its
French mobile operator, SFR.
ANALYSIS l Carpetright CARPETRIGHT
p
HSBC rates the retailer “underweight” with Otsuka gains 2pc following IPO
780 785.00 Shares of drugmaker Otsuka Holdings
15 Dec a target price of 600p. The broker notes
eked out a modest two per cent gain in
740 that the firm’s recent results were at the their debut yesterday after the drug-
lower end of expectations, and has cut its maker priced its record-setting $2.4bn
700 2012 and 2013 pre-tax profit estimates by (£1.5bn) IPO conservatively, underscor-
ing the sluggish market for new listings
10 per cent. It adds that uncertainty over in Japan. The lacklustre first-day was
660
20 sep 8 Oct 28 Oct 17 Nov 7 Dec
the UK housing market continues to be a widely expected due to investor worries
risk for the company. over Otsuka’s heavy reliance on Abilify, a
schizophrenia drug due to lose patent
To appear in Best of the Brokers email your research to notes@cityam.com protection in 2015.
| PROMOTION
April 2008, to minimise dilution to
Novartis shareholders.
Novartis’ decision to restart its
share buyback is part of a growing I’m dreaming of
trend among European drug firms
to return cash to investors. a light Christmas
ANALYSIS l Novartis ©iStockphoto.com/HannamariaH.
60 $
58
58.74
15 Dec WIN A PANASONIC DIGITAL CAMERA
Add a little festive sparkle to your neighbourhood this Christmas and be
56
in with a chance of winning Panasonic digital camera* in the Electrical
Safety Council’s Christmas lights competition. To enter, just send a photo
54
of your outdoor Christmas lights display to win@cityam.com
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec
Every year in the UK 1.2 million people suffer injuries and about 70
die from electrical accidents at home, so make sure you consider
your family’s safety this Christmas. One of the simplest ways to
protect yourself and your family is by making sure you have RCD
(residual current device) protection and by following the Electrical
Safety Council’s top tips for putting up outdoor lights.
JONATHAN BRUNNING |
MILLER INSURANCE TOP TIPS FOR PUTTING UP OUTDOOR LIGHTS. ALWAYS:
1. Make sure you have RCD protection - ensure all outdoor lights
are connected via a 30mA RCD protected socket. An RCD will pro-
“It depends on the government’s vide additional protection against electric shock
mood. When everything is good, 2. Ensure that outdoor Christmas lights are plugged-in
the government leaves the City indoors - even if the lighting is suitable for outdoor use
3. Switch Christmas lights off before you go to bed or
alone. When every- go out - even Christmas lights need a break!
thing is bad, it goes 4. Check before use that your Christmas lights are not
after the City. The damaged or broken before use and look out for loose wires.
government points AN RCD (RESIDUAL CURRENT DEVICE) IS A POTENTIALLY LIFE SAVING DEVICE WHICH IS DESIGNED
the finger whenev- TO PREVENT YOU GETTING A FATAL ELECTRIC SHOCK IF YOU TOUCH SOMETHING LIVE, SUCH AS A
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er it can. The
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easy tar- change the prize to one of equivalent or greater value without notice. Entry in to the promotion is free and no purchase is necessary, entrants must
be aged 18 and over.. The closing date is 19th December 2010 at 11:59pm. The winner will be drawn at random from all the correct entries and will
get.” be notified on 22nd November 2010. By entering the promotion you agree to receive further information and similar promotions from City A.M. and
ESC. If you wish not to receive any further information please add ‘No’ after your answer. The winners, by accepting the prize, agree to publicity if
required. The Editor’s decision is final and one entry per reader.
 20 Markets & Investment
The outlook
for private
equity in 2011
We will get a recovery but don’t expect
another boom frenzy, says Jessica Mead
T
HE private equity industry has
not experienced the bounce
back this year that many had
been either expecting or hoping
for after a very difficult 2009.
Yet despite a patchy and volatile
2010, there is a glimmer of hope that
the recovery in portfolio values and
confidence should become more
entrenched in 2011, as bank financing
slowly returns.
Buyout firms are still sitting on
almost half a trillion of uncommitted
capital that they raised prior to the
financial crisis but which needs to be
put to work before it has to be distrib-
uted back to investors.
Private equity managers are
nonetheless being extremely choosy
about which assets they snap up and
at what price.
“We are beginning to see an
increase in M&A activity as many pri-
vate equity sponsors still have fresh
powder to buy assets. What this
means is that existing LPs [limited
partners] should expect to see an
increase in capital calls in 2011. In
addition, investors should begin to see
Weak banks drag on FTSE Wall Street drops
as Moody's warns on Spain three days in a row
THELONDON
REPORT
B U
RITAIN’S leading share index
slipped back yesterday, snap-
ping a four-session winning
streak, with banks the worst
performers as investors' risk appetite
waned on fresh eurozone debt con-
cerns.
The FTSE 100 ended down 9.03
points, or 0.2 per cent at 5,882.18, hav-
ing finished at its highest close for 30
months on Tuesday after putting on
1.7 per cent since 9 December.
“It looks like it wants to go higher
into the year-end ... but it’s tricky with
the big fourth-quarter futures and
options expiries happening tomor-
row,” said David Morrison, market
strategist at GFT Global.
“There is also some fairly signifi-
cant resistance on the FTSE coming
up around 5,930 and that might pro-
vide a bit of a barrier, so we just need
to be a bit wary around that level.”
Banks were the main drag on blue
chips, with Barclays the top FTSE 100
faller, down 3.7 per cent as worries
resurfaced over Eurozone debt wor-
ries.
Other banks also suffered as HSBC
some distribution activity, which is
what LPs have been waiting for,” says
Gregory Getschow, managing director
and co-portfolio manager of JP
Morgan Private Equity Limited.
Larger deals are happening but
many managers report that it is still
difficult to obtain leverage.
According to the Centre for
Management Buyout Research, equity
contributions exceeded 60 per cent in
the third quarter of 2010, compared to
around 20 per cent for the large buy-
outs from 2005-2008.
Compared to those golden years,
there are still far fewer deals taking
place, which is having a knock-on
effect. “At the larger end of the mar-
ket, there are some very substantial
firms with substantial outstanding
commitments and capital available to
invest but only a relatively small num-
ber of deals to chase and real difficul-
ties around securing the right debt
packages,” says Henry Sallitt, co-head
and director of Fleming Family &
Partners, the multi-family office.
The small number of deals has
made it more expensive to make new
dropped 10.6p to 661.1p, part-nation-
alised Royal Bank of Scotland lost
0.6p to 40.8p and Lloyds Banking
Group declined 0.8p to 68.5p.
Moody’s put Spain's Aa1 rating
under review, citing concerns about
its mounting debt and 2011 funding
needs, though it said it did not expect
Madrid to need an EU bailout.
A cautious statement from the US
Federal Reserve on the economic out-
look Tuesday night also knocked
investor sentiment.
US blue chips, however, were up 0.3
per cent by London's close, helped by
in-line US inflation data and a
stronger than expected manufactur-
ing report from the New York Fed,
although the broader S&P 500 index
was lower.
On the domestic data front, the
number of Britons out of work rose
for the first time in six months in the
three months to October.
Among commodity plays, silver
miner Fresnillo fell 2.5 per cent, while
gold miner Randgold Resources lost 2
per cent as the prices of precious met-
als retreated under pressure from a
firmer dollar.
Integrated oils were weak as a sec-
tor, although the crude price man-
aged a slight rally with BG Group,
down 1.3 per cent, and Royal Dutch
Shell off 0.4 per cent.
BP, however, bucked the trend, as
investments and as a result the larger
funds are are now focusing on smaller
than usual transactions in the £50m-
£750m range, making that area very
competitive, explains Sallitt.
Low investment activity and higher
prices combined with a tight leverage
market leaves fewer options of gener-
ating value in a company. But there is
potential to create value from consoli-
dating weaker competitors, says
speculation of corporate action kept
the stock higher, up 0.7 per cent.
After vague talk of a possible bid from
Royal Dutch Shell on Tuesday, traders
noted rumours BP was seeking to
raise capital from investors in the
Middle East to help fend off any
takeover.
Capital Shopping Centres was the
top FTSE 100 riser, up 4.9 per cent as
Simon Property made a 425p per
share indicative offer valuing the
British mall owner at about £3bn.
Rexam gained 3.8 per cent, taking
its advance for the week up to nearly
5 per cent, as traders cited hopes for a
disposal of the consumer packaging
firm's Closures unit.
Scottish and Southern Energy was
also up on rumoured interest from
Cheung Kong Infrastructure, possibly
in tandem with EDF. Its shares have
added 11p to £11.47.
ANALYSIS l FTSE 5882.18
5,900 15 Dec
5,800
5,700
5,600
5,500
20 Sep 8 Oct 28 Oct 17Nov
Katharina Lichtner, head of research
at Capital Dynamics, an asset manage-
ment firm focusing on private assets.
“We expect those managers that
have experience with buy-and-build
strategies and strong abilities to oper-
ationally integrate companies will be
well positioned to generate attractive
returns,” she adds.
Henry Sallitt says that at the small-
er end of the market he believes it’s
THENEW YORK
REPORT
S stocks suffered a third
straight late-day sell-off yester-
day suggesting it may be diffi-
cult to chalk further gains as
the year comes to a close.
After hitting two-year highs this
week, a sustained rise in Treasury
yields has sparked worry that rising
borrowing costs could stifle the recov-
ery. Banks, heavily dependent on loan
demand, faded and ended lower for a
third straight day. The sense among
investors is that the market, after ris-
ing almost 11 per cent so far in 2010,
has run its course for the year.
Major averages and stocks that have
led the rally have exhibited a familiar
pattern in recent days, spiking early
and succumbing to selling late as
investors see stocks hitting resistance.
Apple ended the day flat at
$320.36, up just 0.02 per cent after ris-
ing as high as $323 earlier in the day.
Netflix closed nearly flat, up just 0.03
per cent at $178.50 - off its high of
$181.42.
The Dow Jones industrial average
slipped 19.07 points, or 0.17 per cent,
7 Dec
to 11,457.47. The Standard & Poor's
CITYA.M. 16 DECEMBER 2010
Buyout firms are
still sitting on a
lot of unused cash
Picture: GETTY
a good time to be investing, particu-
larly in development capital opportu-
nities. “The lack of cash from the
banks and the new issue market
mean we are able to invest in situa-
tions with strong downside protec-
tion and equity upside. These
circumstances don’t exist very often.
If you are able to put debt-risk money
into equity instruments then that is
good business,” he says.
500 Index shed 6.36 points, or 0.51 per
cent, to 1,235.23. The Nasdaq
Composite Index dropped 10.50
points, or 0.40 per cent, to close at
2,617.22.
Industrial production rose in
November at its fastest pace in four
months, implying that a self-sustain-
ing recovery is now entrenched
Sentiment on the volatile day start-
ed lower after Moody's warned Spain
its debt rating could be downgraded,
bringing concerns about the euro-
zone debt crisis back to the forefront
and lifting the dollar, which has had
a strong inverse relationship with
equities of late.
Honeywell International fell 1.9 per
cent to $51.54 after it gave a 2011 prof-
it growth outlook that analysts
described as conservative. Caterpillar
rose 1.1 per cent to $93.08 after RBC
raised its price target to $108 from $98.
A deal that President Barack
Obama struck with Republicans to
extend the Bush-era tax rates sailed
through the US Senate yesterday and
will soon head to the House of
Representatives, where it could face
steeper opposition, though it is still
expected to pass.
About 7.82bn shares traded on the
New York Stock Exchange, the
American Stock Exchange and the
Nasdaq, well below the year’s daily
average of 8.62bn.
CITYA.M. 16 DECEMBER 2010 Markets & Investment 21

LONDON’S TOP 250

Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Name Closing Price Price Change 52wk high 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)Company (p) (p) (p) (p)
3i Group 318.5 -2.75 326 250 Colt Telecom 130 -0.25 142.5 109 John Wood Group 539 1.5 539 288 RSA Insurance Grp 126 -1.5 136.5 114.75
3i Infrastructure 120.5 -0.25 121.5 97 Compass Group 576.5 7 588.5 425 Johnson Matthey 1992 28 1992 1446 SABMiller 2204 9 2204 1650
A.B. Foods 1125 17 1136 804.5 Cookson Group 639 -1 640 367.5 JPM Flem.Emerg Mkt. 616 1 621 450.5 Sage Group 279 -4.25 289 220
Aberdeen Asset.Man. 203.5 -1.25 205 112.75 Croda International 1548 33 1610 751 Jupiter Fund Man 303 -1 310 180.25 Sainsbury (J) 376.25 -1 395 313
Admiral Group 1551 16 1693 1113 Daily Mail & Gen 551 6.5 567.5 404 Kazakhmys 1577 -4 1630 965 Schroders 1782 -6 1791 1116
Aegis Group 138.5 -2.5 145.5 103.5 Davis Service 417 -1 435 360.25 Kesa Electricals 166 -2.75 174 99.25 Schroders NV 1410 -4 1418 929.5
Afren 140 -3.25 143.25 79 De La Rue 847 -6.5 1005 549.5 Kingfisher 253 -0.5 259 198.5 Scot.& Sth. Energy 1166 16 1198 1010
African Barrick Gold 601.5 -6 670 503 Debenhams 71.75 0 84 53 Ladbrokes 126.75 0 162.75 123.5 Scottish Mortgage 703.5 -1.5 705 475
Aggreko 1500 -15 1685 834.5 Derwent London 1543 -7 1605 1208 Lancashire 552.5 1.5 647 422.25 SEGRO 296.5 1 352 250.25
Alliance Trust 371.25 -2 373.25 293.5 Dexion Abs 139.25 0 148 131.25 Land Securities 665 -2.5 696.5 545 Serco Group 573.5 -4 651 494.25
Amec 1136 -5 1155 733.5 Diageo 1170 0 1193 1000 Legal & General 99.25 -0.5 106.25 69.75 Severn Trent 1430 -1 1468 1062
Amlin 400.5 -3.75 433 357.25 Dixons Retail 25.5 -0.5 38 23.75 Lloyds Banking Grp 68.5 -0.75 77.5 46.5 Shaftesbury 458.5 3.25 460 349.25
Anglo American 3109.5 29.5 3109.5 2254 Domino’s Pizza 544 4.5 552.5 287.5 Logica 125 0.5 148 101.75 Shire 1513 25 1567 1174
Antofagasta 1560 7 1560 761 Drax Group 377 -2 444 326.25 London Stock Ex. 806.5 -0.5 812.5 544 SIG 121 -1 137.75 90.75
Aquarius Platinum 347.25 -5.5 458 227 DS Smith 202 -5.5 210 104 Lonmin 1874 10 2157 1355 Smith & Nephew 654.5 3.5 696.5 537.5
ARM Holdings 390.5 -5 414.5 170.25 Dunelm 550 11 550 325.25 Man Group 292.25 4.75 327.5 202
Smiths Group 1242 -14 1285 954
Ashmore Group 351.75 -5.25 383.75 218 easyJet 429 -0.5 496.5 341.5 Marks & Spencer 375.25 -1 427.5 323.5
Ashtead Group 157.25 -0.75 160 71.75 Edin.Inv.Tst. 447.5 -2 464.25 351.5 Meggitt 366.75 1 367.5 245 Soco International 362.25 -7.5 484.25 292
AstraZeneca 3149 42 3385 2732 Electrocomponents 266.25 1 279.5 161.75 Melrose 297.5 5.5 304.25 162 Spectris 1278 -17 1295 691.5
Atkins (WS) 720.5 6 792.5 556.5 Enquest 137.75 1 146.5 89.25 Mercantile Inv Tst 1065 -8 1073 822.5 Spirax-Sarco 1950 24 1950 1109
Autonomy 1475 68 1975 1271 Essar Energy 586 9 586 383 Michael Page 535.5 35.5 535.5 346.5 Spirent 151.5 -2.75 160.25 96.5
Aveva Group 1591 4 1591 980.5 Eurasian Nat Res 997.5 9.5 1266 818 Micro Focus 412.5 9.25 546.5 276 Sports Direct 146 0.5 152.75 92.25
Aviva 389.5 -4.75 423.5 294.25 Euromoney Inst. 694.5 -10 727 424 Millennium & Cop. 547.5 1 570 358.75 St James’s Place 276 -2.75 292 204.25
Babcock International 541.5 -13.5 635 492.75 Experian Group 812.5 21 812.5 572 Misys 312 13.5 312 201.5 Stagecoach Group 207.75 1.5 224 160.75
BAE Systems 333.5 -4 388.75 294.75 Ferrexpo 385 13 396 184 Mitchells & Butlers 355 -5 360 247.5 Standard Chartered 1742.5 -8 1950 1351.75
Balfour Beatty 312 0 312.25 229.75 FirstGroup 386 -0.5 426 336 Mitie Group 227.75 -2.25 241 188.75 Standard Life 209.75 -2.75 236 173
Barclays 262 -10 383.25 255.25 For.&Col.Inv.Tst 305 0 305 251.5 Mondi 494.75 -2.75 557.5 323.75 Supergroup 1450 -178 1638 535
Barratt Development 84.5 -2.75 142 70 Fresnillo 1555 -40 1605 669.5 Monks Inv.tst. 362 -1 363 265.5 TalkTalk 165.5 0.5 167 108.5
BBA Aviation 215.5 -0.5 217.25 155.75 G4S 253.25 2.75 283.5 237.75 Morrison (Wm) 267 -3 306.25 257.5 Talvivaara Mining 554 6 581 342.5
Bellway 625.5 -15.5 826 511 Genesis E.m.f. 540.5 0.5 542.5 399 Murray Int.Tst 931 -2 937 720 Tate & Lyle 544 -0.5 544.5 388.75
Berkeley Grp Hldgs 892.5 -2.5 932.5 742 GKN 207.5 0 210.5 102 National Express 227.5 0.5 259.5 185 Taylor Wimpey 27.25 -1.25 44 22.25
BG Group 1301 -17 1333.5 984 GlaxoSmithKline 1269 11.5 1339.5 1095 National Grid 556 2 613.25 484.25 Telecity Group 495 -12.5 532.5 360
BHP Billiton 2524.5 4.5 2524.5 1684.5 Great Portland Est. 355.5 -3.5 364 274.25 Next 2007 -10 2344 1817 Templeton Emrg. 654 -2 685 471.5
BlackRock Mining 791 -8 799 492 Greene King 488.75 6.25 488.75 376.25 Northumbrian Water 327.5 -3.75 361.5 252.75 Tesco 427 -2.5 454.5 377.5
BlueBay 484 0 489.25 258 Halfords Group 447.25 -0.25 550 372.75 Ocado Group 156 -4 170 123.5 Thomas Cook Group 181 -2.25 272 171.75
BlueCrest AllBlue 173 0 174.5 152 Halma 366 -0.5 366.5 223 Old Mutual 120 -0.25 145.25 97.25 Travis Perkins 996 -1.5 997.5 664.5
Booker Group 59.5 -0.25 60.25 38.75 Hammerson 419.75 5.25 434.5 336.25 PartyGaming 231 2 334.5 206 TUI Travel 233.5 -3 308.5 190
BP 476.5 3.5 655.5 303 Hargreaves Lansdown 553 0.5 553 276.5 Pearson 1005 7 1051 855 Tullett Prebon 373.5 -0.5 417.25 262
Brit Insurance 1036 -1 1045 728 Hays 126 2.5 126 88.5 Pennon Group 634 0 639 483 Tullow Oil 1215 -21 1369 991.5
British Airways 272.5 -5.5 286 184.25 Henderson Group 132.75 -0.5 151.75 112.75 Persimmon 411.5 -15.75 507.5 336.5 UK Commercial Prop 81.25 1 85 72.75
British Amer.Tob 2407.5 0.5 2464.5 1926 Heritage Oil 423 -0.25 581 296.75 Petrofac 1479 2 1540 876.5 Ultra Electronics 1674 -5 1895 1265
British Empire Tst 492.5 -4 498.5 394 Hikma 811.5 -2 813.5 509 Petropavlovsk 1137 -14 1365 852 Unilever 1954 11 2015 1688
British Land 509.5 -2 520 418.25 Hiscox 371 -2.25 373.5 304.25 Phoenix Group Hldgs 640 -3 758 557.5 United Utilities 590 -8 628.5 488.25
Britvic 474 -6.25 518 381.25 Hochschild Mining 630 3.5 658 234 Premier Farnell 280 1 304.5 171.5 Utd Business Media 671.5 2 682.5 409.75
Brown (N.) Group 300.5 2.5 301.75 206.5 Home Retail Group 197.5 -5 296 197.5 Premier Oil 1935 -19 1954 1017 Vedanta 2388 25 2934 1839
BSkyB 732.5 0.5 736 524.5 Homeserve 449.75 -8 487.5 322.75 Provident Financial 842 -8 974 728.5 Victrex 1486 41 1486 788
BT Group 181.75 0 183.5 110 HSBC Holdings 661 -10.5 740.5 596.25 Prudential 664 3.5 664 487.5 Vodafone Group 169 -0.5 175 129.5
Bunzl 712.5 1 777 616.5 Hunting 720 -4 724 439.5 PZ Cussons 394 -0.5 409 234.75
Burberry Group 1125 -1 1156 566.5 ICAP 538 6 538 294 QinetiQ Group 134.25 1.5 167 96.75 Weir Group 1801 37 1861 689
C&W Comms 51.25 -0.25 63.75 44.25 IG Group 497.75 -11.25 553 362.5 Randgold Res 5655 -115 6655 4209 Wellstream Holdings 789 3.5 790 436
C&W Worlwide 69.25 -0.75 100 60.5 Imagination Tech 380 0 441.75 215 RDS ‘A’ 2082 -7.5 2100.5 1624 WH Smith 516.5 -6.5 529.5 398.25
Cairn Energy 410.25 -4.25 493.25 303.5 IMI 915 1 948 504.5 RDS ‘B’ 2072 -9.5 2081.5 1554 Whitbread 1774 34 1812 1266
Caledonia Inv. 1875 -25 1902 1511 Imperial Tobacco 1905 -8 2154 1753 Reckitt Benckiser 3608 9 3655 3037 William Hill 164.25 -1 216.5 155.5
Capita Group 677.5 -2.5 826 635.5 Inchcape 341.25 -4 368 237 Reed Elsevier 531 1.5 563 460.5 Witan Inv Trust 508.5 1 508.5 410
Capital & Counties 148.5 -0.25 157 100 Informa 400 -4.25 448 301 Regus 80.25 0.5 120 66 WOLSELEY 1915 10 1915 1166
Capital Shop Centre 415.5 19.25 415.5 301 Inmarsat 673.5 -3 821 606.5 Renishaw 1275 19 1275 534 WPP Group 772 5.5 776.5 572.5
Carillion 368.75 -0.25 370.75 273 InterContinental Htl 1226 -10 1236 867 Rentokil Initial 97 -1 138.5 87.75 Xstrata 1441 -7.5 1461.5 845.75
Carnival 2738 14 2920 2037 Intermediate Cap.Grp 329 7 351 240.5 Resolution 233.5 -1.5 349 211.25
Catlin Group 365.75 0.75 393 320 International Pers Fin 362.75 14.25 362.75 183.25 Rexam 322.5 11.75 346.75 272.5
Centamin Egypt 163.25 -2.5 197 106.75 International Power 423.5 -0.75 436.75 284.5 Rightmove 743 -27 810 477.5 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 330.25 1.5 346 264 Intertek Group 1884 0 2000 1150 Rio Tinto 4430 -10 4505 2812 POWERED BY
Charter 776 -5 848.5 567 Invensys 343.75 5.25 349 230.25 RIT Capital Partners 1193 -3 1210 969
Chemring Group 2927 -92 3663 2598 Investec 501 -1 562 417.75 Rolls-Royce Group 626.5 -2 654.5 473.5
Close Brothers 854.5 -5.5 861.5 664 ITV 71.5 -1.25 74.25 48.25 Rotork 1773 -7 1895 1145 www.digitallook.com
Cobham 206 0 276 192.25 Jardine Lloyd 606.5 2.5 609.5 459 Royal Bank of Scot 40.75 -0.5 58 28.5
 22 Investment | Listed Products
Look closer to
home to play
the emerging
markets’ story
Fears of asset bubbles mean investors should
think about reconsidering their allocation to
the developing world, writes Jessica Mead
E
MERGING markets have been one of
the most popular trades of 2010. If it
wasn’t concerns about the outlook
for developed markets and the
desire for higher returns further afield, it
was Fed-fuelled liquidity that was driving
flows towards the developing economies.
The case for investing in equities rather
than bonds is becoming stronger by the
day. Indeed, strategists reckon that we are
in a sweet spot for equities because of
improving growth, near-zero interest
rates, high profit margins, strong corpo-
rate balance sheets, historically high equi-
ty risk premiums, and a new flood of
central bank liquidity.
Yet the case for investing in emerging
market equities has become less clear-cut.
Investors and policymakers are becoming
more worried about the emergence of
asset bubbles fuelled by cheap liquidity.
To counter this and the looming spectre
of inflation, authorities are looking to
tighten monetary policy. While there is
the potential for some offset to this risk to
come in the form of emerging market cur-
rency appreciation, this process is not
expected to be smooth.
Consequently, strategists at Barclays
Investments to fit your social views
Ethical ETFs help
your money do good,
writes Daniel Knowles
T
HE idea that you can change the
world through what you buy has
been around for a while now. In
1977, the Swiss food producer
Nestle endured a boycott over claims its
baby-milk products were killing children
in third world countries. More recently,
the “fair trade” movement has explicitly
charged consumers a premium so as to
pay higher than market prices to produc-
ers in poor countries.
While ethical consumption has taken
off, however, the idea of ethical invest-
ment has been limited mostly to left wing
students protesting about their universi-
ties investments in arms dealers or banks.
But that may now be changing. This
week, db x-trackers announced the launch
of two new exchange-traded funds (ETF)
designed for the conscientious investor –
one to raise funding to fight disease in the
third world and one designed to appeal to
Christian investors.
CITYA.M. 16 DECEMBER 2010
Capital suggest that investors ought to
“pare back exposure to the developing
world in favour of developed world compa-
nies with significant exposure to emerging
economies” at least for the first half of
2011. This is especially because of the “con-
siderable capital flows into illiquid mar-
kets in the second half of 2010 and
expected increases in volatility,” they say.
Investors using exchange-traded funds Google is one US firm healthcare because of the combination of prospects based on underrated EM expo-
(ETF) as the building block of their portfo- with emerging market high dividend yield, reinvigorated man- sure and demographics. Lyxor offers
lios should take note and perhaps look to growth prospects agement and favorable long-term global sector ETFs with a total expense
cut back their emerging market ETF posi-
tions. It is difficult to select developed Picture: REX ANALYSIS l The performance of emerging markets relative to developed markets
world firms with exposure to the emerg- 0.5
ing markets via ETFs. But there are certain
sectors that will benefit from internation-
al growth, says Michael Hartnett, chief 0.4
global equity strategist at Bank of
America-Merrill Lynch. Technology, ener-
gy, industrials and materials are four glob-
0.3
al cyclical sectors that he suggests being
overweight: “The global cyclical sectors
benefit the most from EM-led global
growth, rising infrastructure spending 0.2
and recovering business spending.”
In Europe, the preferred sectors are Source: Bank of America Merrill Lynch
basic resources and energy while Bank of 0.1
‘00 ‘02 ‘04 ‘06 ‘08 ‘10
America-Merrill Lynch is overweight
The first, the db x-tracker Global Fund
support ETF, is linked to the recently
Pro Bono – raising
money to combat
launched Dow Jones Global Fund 50
index. That index tracks the share prices
disease
of the top 50 companies that support the
Global Fund to fight Aids, Tuberculosis
Picture: REUTERS
and Malaria – an international project
supported by Bill Gates, Kofi Annan and
Bono, among others.
And rather like Bono’s RED branded
consumer products, the Global Fund ETF
raises money for the project by donating
any surplus fees after management costs
to the fund. Dow Jones are also donating
the index licensing fees to the fund.
According to Manooj Mistry, the head of
db x-trackers in the UK, “the product is tar- ANALYSIS l The KLD social index has outperformed the S&P 500
geted at investors who want global equity
exposure – it is highly correlated to other
global benchmarks – but this way, you’re 600%
helping raise money too”.
Though the companies in the Global
400%
Fund index all support the charity,
investors may also want to be sure they meet “predetermined tolerance levels for
are investing in companies they consider certain areas of activity, such as for exam- 200%
ethical, however. ple pornography, strategic and non-strate- S&P 500
For Christians, db x-tracker’s new gic weapons, birth control and gambling.”
Christian ETF is linked to an index based If Christian investments don’t appeal, 0% KLD400
on companies selected for their compli- iShares also offers an ETF linked to the Source: Factset research systems
ance with Christian social doctrines. The MSCI KLD Social Index. The index picks Apr 91 Apr 93 Apr 95 Apr 97 Apr 99 Apr 01 Apr 03 Apr 05 Apr 07 Apr 09
index excludes companies which do not companies based on several criteria,
CITYA.M. 16 DECEMBER 2010
ratio of 0.45 per cent while BlackRock’s
iShares provides both US and Stoxx
Europe sector ETFs.
Hartnett would nonetheless recom-
mend staying long of emerging market
equities but advises choosing large caps
rather than small caps. For ETF holders,
this should not be too difficult as the
majority of emerging market bench-
marks consist mostly of liquid large cap
names. “We would need to see signifi-
cant downgrades to Chinese growth for
emerging market equities to fall in
absolute terms in 2011,” he concludes.
With emerging equities’ potential
capped by fears about asset bubbles, at
least in the early part of 2011, it may be
cheaper for ETF investors to select devel-
oped market sectors exposed to the
emerging market growth story.
including governance, employee safety
and labour relations, environmentalism
and human rights.
The list of “socially responsible” com-
panies might surprise some left wing
anti-corporate investors, however. The
index is made up of 90 per cent large
cap companies, including Microsoft,
IBM and Pepsico. The index has also out-
performed the S&P 500 over recent
years too, proving that (at least a little)
goodness is profitable.
Which is more than can be said for
evil. An American ETF called the
“SINdex”, which invested exclusively in
liquor, gambling and tobacco stocks,
closed down in 2008. Evil minded
investors now might have to just buy
individual stocks.
LISTED PRODUCT NEWS
BY DANIEL KNOWLES
Torrents of money are pouring into ETFs
Investment | Listed Products 23
Chinese inflation will
give the mining sector
a boost
THE
Picture: REUTERS
TIPSTER
MIGHT BE TIME TO BUY
RANDGOLD RESOURCES
N
OW that the Chinese inflation fig-
ures are out and the People’s Bank
of China has once again refused to
raise rates, fears that European
commodity stocks might suffer on the back
of slower Chinese growth have subsided
slightly. This might offer an opportunity for
the likes of gold miner Randgold Resources
to bounce off the lower end of its upward
trading range. WorldSpreads offers a
Inflation Multiplier Bond 5,680p–5,695p spread on Randgold.
Another miner, silver producer
Fresnillo, has been trending upwards all
Obtain enhanced returns year and has nearly doubled in price since
January, no doubt helped on by silver
if inflation rises prices. With record output for silver and
gold in the third quarter, and prices below
their one month high, further strength can
be expected. Capital Spreads quotes
1,558.2p–1,560.8p.
Barclays has fallen some 5.8 per cent in
a week to 262p and continues to grind
lower in a very well established down-
trend channel. At 262p it is sitting more
or less right in the middle of the current
trading range so investors are advised to
hold until 250p before buying or 276p
before selling for a higher probability of a
return. Spread Co offers a spread on
Barclays of 262.05p–262.50p.
With Eurozone tensions still ongoing,
it's not just Spanish government bonds
that are suffering from threatened debt
downgrades by the ratings agencies. Local
stocks are also coming under significant
pressure. The Spanish Ibex index has fall-
en below the 10,000 level as a result,
although we remain some way above the
lows for the year that were seen back in
June. Thinner volumes towards the year
end could well serve to exaggerate any
volatility, so watch out. IG Index is cur-
rently pricing the Ibex at 9,958-9,963.
Gold has dipped back below the $1,400
level which in the past has provided a buy-
ing opportunity. With all eyes on tomor-
row’s meeting of EU leaders, the focus will
Don’t let tough conditions stop your be on currency markets which will have a
portfolio growing, find out more knock on effect for gold. If investors are
at www.rbs.co.uk/markets or happy with the resolution proposed then
we could see a rise in the euro and at the
call 0800 121 6286 same time strength in the price of gold.
Capital Spreads quotes $1,391.0-$1,391.5
for gold.
It was a case of mission accomplished
with our crude oil tip on Tuesday. US
Crude had dropped to our target of
$87.30 by yesterday morning. The dip
though was followed by a rapid surge
back up to the top of its downtrend chan-
nel at around $88.70 following better
than expected industrial production num-
This document is an adver tisement and is not a prospectus for
o the pur poses of EU Directive 2003/71/EU (the “Directive”) and/or Par t VI of the Financial Ser vices and Markets Act 2000. A prospectus bers and a drop in crude inventories. This
has been prepared and made available to the public in accordance with the Directive. Investors should not subscribe for the securities refer red to in this document except on the basis of the
or mation contained in the prospectus. Investors may obtain copies of the prospectus from the offices of the issuer or paying agent. © The Royal Bank of Scotland plc (“RBS”). This adver tisement
inffo
gives us another opportunity to short it,
contains numerous trade marks belonging to The Royal Bank of Scotland Group plc and other companies in the RBS Group. These trade marks include, but are not limited to, Daisy device, The Royal
Bank of Scotland and RBS. If you are in doubt as to whether an item is a trade mark of The Royal Bank of Scotland Group plc or a member of the RBS Group, please contact us for clarification at
with the target now lowered to $86.80.
our registered office address. The Royal Bank of Scotland plc, registered in Scotland No 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. RBS is authorised and regulated in Spread Co offers a spread on January US
the UK by the Financial Ser vices Authority. RBS is an authorised agent of The Royal Bank of Scotland N.V V. in cer tain jurisdictions.
crude of $88.59-$88.63.
Daniel Knowles
CREDIT SUISSE ETFS EXPANDING NEW SOURCE FIXED INCOME ETFS INVESTORS WANT EMERGING MARKETS
Credit Suisse announced yesterday that its Pimco, a global investment manager, has Demand for exposure to emerging markets
exchange-traded funds (ETF) business has entered into an agreement with Source to was the driving investment trend of 2010,
increased its assets under management by provide fixed income ETFs to the European according to iShares, the world’s largest ETF
45 per cent since the beginning of 2010, to a market. Pimco and Source plan to offer provider. The company announced this week
total of approximately $14.5bn. The global UCITS-structured “smarter” ETFs targeted at that its JPMorgan emerging market bond
ETF industry currently manages approxi- investors wanting to use both short maturity fund has surpassed $1bn in assets thanks to
mately $1.2 trillion in assets, but according to strategies and more long term strategies. over $700m in inflows in the year to date.
Dan Draper, global head of ETFs at Credit According to Source’s CEO Ted Hood: “Pimco, The fund tracks a diverse range of US dollar
Suisse, “the ETF industry remains in an early as one of the world’s leading fixed income denominated emerging market debt, giving
growth phase”. Credit Suisse is expecting fur- managers, is well positioned to provide an exposure to over 30 countries. The iShares
ther growth in Europe and also in Asia, enhanced approach to both active and passive MSCI emerging markets fund has also raised
where it plans to expand its ETF platform exposure.” Investors can expect the first $1.7bn in the year to date, the most new net
Picture: GETTY next year. products to be launched in early 2011. assets of any iShares product.
 City Focus
24
How to make better use of your time
Some simple office techniques can help you
get more done faster, says Jeremy Hazlehurst
O
NE of the curses of the modern
workplace is having too much to do
in the time available for the work,
and so time-management is one of
the most important of skills. Contrary to
much supposed wisdom, says Roger Trapp
in his new book What You Need to Know
About Business, the key is not to learn
how to multitask. Doing two things at
once doesn’t work – eating your lunch at
your desk “might shave a few minutes off
the day,” writes Trapp “but it can actually
make life more stressed.” Here are five tips
for managing your time better.
1
. Make sure you have objectives.
Remember to make them SMART –
Specific, Measurable, Attainable, Relevant
and Time-Bound. This is especially good if
you are, for example, “starting a new job
or project and want to set goals so that
you can demonstrate progress.” Proving
that you are getting things done is as
important as getting them done.
2
. If you are struggling to get things
done and getting bogged down in minuti-
Don’t plan on making any
knee-jerk moves in January
RECENT survey by Morgan McKinley
A found that the number of City job
vacancies was up year-on-year for the
12th consecutive month, 9 per cent
in November. Traditionally, the first quar-
ter sees a flurry of hiring, following the
clear-outs that accompany the bonus sea-
son. So will we see this in 2011?
With all the kerfuffle about bonuses
speculation is rife that many disgruntled
City folk will jump ship when they receive
low bonuses – or the dreaded donut, as a
zero bonus is known. Some recruiters say
that if you suspect that you are heading for
a disappointing bonus then you should go
now rather than wait until the start of
February, when others will do the same.
“As we go into the Christmas period peo-
ple are thinking about their bonuses and
they might decide to vote with their feet,
which will increase liquidity in the mar-
ket,” says Neil Owen of City recruiter
Robert Half. And that liquidity, of course,
can snowball as positions open up.
But, he adds, this is not likely to be a
large trend. People will look not just at
money, but the whole package, and
work/life balance and stability also have to
be taken into account. A bad bonus is not
always a reason to leave. After all, if you
work in the City you have to take the lean
years with the fat ones, and although
money is an important part of the pack-
age, it is not the be-all and end-all for most
people; it’s important to enjoy your work
too. So, bad bonuses do not necessarily
mean a flurry of moving.
Andrew Evans, MD of Morgan McKinley
UK, says that predicting the market is
harder now than it was in 2005-2007.
“Anecdotally, though, the feeling is that
2011 will be similar to 2010, and if that is
true, then the first quarter of 2011 will see
| Careers
ae, then you have to prioritise. There are
two classic ways to do this. Either divide
things into three categories: “must do”,
“should do” and “nice to do”; or into two
groups: “discretionary” and “non-discre-
tionary” tasks. “These are more sophisti-
cated versions of simple to-do lists, which
even on their own can concentrate the
mind on the tasks in hand – as well as pro-
viding a psychological boost when items
are ticked off,” writes Trapp.
3
. Make use of the Pareto Principle. This
is named after the Italian economist who
came up with the famous 80/20 rule. He
noticed that 20 per cent of the Italian pop-
ulation had 80 per cent of the wealth.
Many businesses find that 80 per cent of
income comes from 20 per cent of cus-
tomers. Identify the 20 per cent of your
work that brings you 80 per cent of the
benefit, and concentrate on it. For exam-
ple, chase the 20 per cent of biggest bills
first – losing out on the interest of the
smaller ones is less bad.
4
. Adopt the “manana principle”.
A donut is not always a reason to move.
a similar upward trend at most City insti-
tutions.” Also, he says, there were low lev-
els in the fourth quarter of 2010 and a
quieter quarter tends to be followed by
more activity in the following one. So the
first quarter of 2011 should be good.
Some areas have remained strong in
2010 and will continue to be so, he says,
such as change management – things like
improving efficiency and offshoring – con-
tinue to be options for skilled and experi-
enced people. Compliance is still a big deal
for banks, which is a question of managing
relationships between institutions and the
FSA to monitor and manage compliance.
Risk-management is also still a growing
area at financial institutions. Sales roles,
too, will also arise.
Donut dissatisfaction is real, but it prob-
ably won’t lead to a recruitment frenzy.
For now at least, it’s still better the devil
you know.
Don’t let time pres- Rather than the traditional principle of
sures overwhelm you never putting off until tomorrow what
can be done today, this states that nothing
Picture: GETTY is so urgent that it can’t be put off until
tomorrow.
“This is a deliberate technique for avoid-
ing becoming distracted by or bogged
down in all the little things that happen
in the course of a business day,” says
Trapp. Bundle together all the tasks that
arise during the day to be actioned the
next day, rather than trying to do them all
straight away. Then you can organise
everything in the most efficient way.
Negotiating your way to
the bonus you deserve
STUART DIAMOND
E
VEN when times are bad, you can still
persuade your boss to give you a good
bonus if you go about it in the right
way. Here are 10 tips.
First, make it a one-time deal. Note that
a bonus doesn’t increase overhead fixed
costs since it’s just for performance during
the period, the month, quarter or year.
Second, make sure that the bonus you
are asking for is very specific. Tie it to a
piece of work you did that added value to
the company. Calculate the value of that
work if possible.
Third, find their criteria. What are the
company’s standards for giving bonuses?
Meet them. Ask if anyone else has had a
bonus and what they did to get it. What is
the typical size of a bonus based on value
given, what percentage, for example?
Fourth, come up with a good reason.
Even if it’s not a specific business purpose,
if you have a good reason (medical bills,
education, home office, something for the
spouse or kids), it will increase persuasive-
ness. Defraying the cost of rising prices
might be a reason.
Fifth, link it to other deals. Did they
promise you a raise, bonus or promotion
CITYA.M. 16 DECEMBER 2010
5
. Remember Parkinson’s Principle,
that work expands to fill the time
available to it. Deal with email and
phone calls in one batch, and set aside a
certain time to do so. Only touch emails
once – and either do, delegate, delay
or dump.
Meetings are horribly time-wasting, so
if possible delegate attendance, and
always have another commitment after-
wards, to encourage you to be efficient
and get out as soon as possible.
in the past but couldn’t deliver because of
the recession? Now is the time to ask for a
limited bonus to make up for it.
Six, fix their worries. You can trade a
bonus for things they want from you in
the future; the need for work at certain
times or tasks; contacts; information; a
cost reduction project from vendors.
Seven, make small talk. After you have
done all the research above, your boss still
has to be comfortable giving you more
money. So, before you start talking about a
raise, ask how his/her day was. Talk about
the weather, sports or events of the day.
People give you more when you connect
with them.
Eight, hear their perceptions. Especially
if they are negative, hear them out. Ask
them to tell you more; you’ll get more
information on how they think. What do
and don’t they value? It will help you per-
suade them, now or later. The negotiation
is over when you say it is.
Nine, find intangibles. Even if they can’t
give you a monetary bonus, a fallback posi-
tion is what they might give you that’s
intangible: more vacation, a high-profile
project to advance your career, a promo-
tion now and the bonus later, a better
office, something to show their gratitude
for the extra work you put in.
Ten, don’t be greedy. Let them suggest
something first; you can counter with your
calculations if needed. It’s okay to be incre-
mental; some bonus now, some later. Don’t
threaten to leave unless you have another
offer in hand and would take it. You will
create bad blood otherwise and even if you
stay, the relationship will suffer.
Stuart Diamond is the author of Getting More,
www.gettingmore.com
Dev
Developing
D evvelopi
l piing
ng a
Corrporate Credit
Corporate Creddit Rationale
Rationalee
Today’s
Today’s landscape requires the sharpest credit analysis skills. Whether you’re looking for a
o
concise overview of the processes or want to hone your approach, this three-day
h d cour
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16 - 18 February,
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February, 2011
Standard & Poor’
Poor’s,
s, 20 Canada Square, Canary Wharf, London, E14 5LH
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 Lifestyle | Books
26 CITYA.M. 16 DECEMBER 2010

Show your love with a good book

A well-chosen tome displays thought and
passion. Here are 2010’s best, by Zoe Strimpel

O
K, Christmas is closing in. Chances are you’ve done the bulk of your shopping, or
at least you know what you’re getting for your friends and family. But there may
still be some holes to be filled, and if there are, there’s no better way to fill them
than with a well-chosen book.
Books as gifts often get a bad name, often prompting a secret eye-roll. But they’re also
a great chance to show how well you know someone and to bring a very real source of
pleasure to them. Here we’ve chosen the best books of 2010 for the people you need to
show your love (or admiration) to most.

PARENTS
MUM: If she has a soft spot for historical
fiction, Philippa Gregory’s The Red
Queen should delight. The second book
in Gregory’s eminently enjoyable trilogy,
The Cousins War, it brings to life the story
of Margaret Beaufort, the child-bride of
Edmund Tudor. India Knight’s Comfort
and Joy is a guaranteed laugh and touch-
ing too: a family tragicomedy about
Christmas written in the columnist’s
trademark witty style.
DAD: Well-clothed fathers will love this
beautiful tome about London’s tailoring
heart: Bespoke: The Men’s Style of Savile
Row by James Sherwood. Decision Points
by George W. Bush is the non-fiction alter-
native to a Tom Clancy or John Grisham
that explains the moves of the ex
President – love him or hate him. And has
he read Freedom by Jonathan Franzen?
The Corrections author’s latest is an epic
concerned with family turmoil.

BEST MATE
HER: You can’t go wrong with a book that
explains the male brain: single (and cou-
pled) friends will lap up yours truly’s own
What the Hell Is He Thinking? All The
Questions You Ever Asked About Men
Answered. Another inspiring book for
women is Nomad, the outspoken Ayaan
Hirsi Ali’s new one. Then there’s the
year’s ultimate un-put-downable novel:
The Help by Kathryn Stockett, about
maids in the Deep South.
HIM: Stick to sport and you’re bound to
please. Our pick of the top three sport
books this year are Ryder Cup superstar
Sam Torrance’s An Enduring Passion
which captures the experience of the
iconic contest, Brian Moore’s Beware of
the Dog, a searingly honest autobiogra-
phy about the former English rugby
hooker and Open by Andre Agassi, in
which the flamboyant tennis star reveals
his battle with crystal meth.

THE GIRL/GUY YOU WANT TO IMPRESS

HER: If she hasn’t read Ian McEwan’s
scathing Solar, she’s in for a treat, while
Jodi Picoult’s House Rules displays the
best of taste: the best-selling queen of the
heavy-hitting social drama has struck gold
with this story of a boy with Asperger’s
and a obsession with forensics. Well-writ-
ten, serious but eminently readable. Peter
Carey’s Parrot and Olivier in America is a
picaresque tale of two unlikely fellow trav-
ellers. Popular and literary. Bam.
PARTNER
HER: Give her something she can lose her-
self in: David Mitchell’s The Thousand
Autums of Jacob de Zoet is a vividly imag-
ined historical masterpiece from the
author of Cloud Atlas. Another good
choice is Booker shortlisted Andrea Levy’s
HIM: Let’s face it: men have finally stolen
the cooking and food baton from women.
Any metropolitan man worth his salt will
be thrilled to receive either (or both) of
the two big foodie coffee table books of
the year: Feran Adria’s biography, The
Inside Story of El Bulli and the Man Who
Reinvented Food by Colman Andrews and
Noma: Time and Place in Nordic Cuisine
by Noma chef René Redzepi. Phillip
Roth’s latest, Nemesis, should work too.
first novel in six years, The Long Song, set
in Jamaica during the last years of slavery.
Winner of the women’s-only Orange Prize
was Barbara Kingsolver’s The Lacuna and
it’s a terrific yarn about corruption in
Mexico and The US in the 40s and 50s.
Make your loved ones HIM: The world’s most respected thriller-
happy with a well- writer John Le Carre’s latest, Our Kind of
chosen book. Traitor, is sure to please. If he doesn’t have
Picture: GETTY The Big Short by Liar’s Poker author
Michael Lewis already, this is a must: the
definitive insiders’ tale about the sub-
prime crisis. British Museum director Neil
KIDS
DAUGHTER: Ideal for the Potter obsessive is
The Unofficial Harry Potter Cookbook:
From Cauldron Cakes to Knickerbocker
Glory--More Than 150 Magical Recipes for
Muggles and Wizards (think of the fun!).
Barack Obama’s lyrical introduction to
great Americans: Of Thee I Sing: A Letter to
My Daughters, is educational and beauti-
fully presented. (You’ll have to get it on
Amazon, though, as it’s not out here yet).
MacGregor’s History of the World in 100
Objects is told through the things that
humans have made – either carefully
designed and preseved, or broken and
thrown away. Lovely. If you want peace and
quiet, Lee Child’s latest Jack Reacher book,
Worth Dying For should do the trick.
SON: If he’s not up to Swift yet, the book
of the new Gulliver’s Travels film starring
Jack Black – about the adventures of a
New York Tribune mail room employee
Lemuel Gullver who winds up in far-
flung trouble in Bermuda – is a fun alter-
native. Surprisingly talented children’s
book author David Walliams’ The Boy in
the Dress ventures into new territory by
exploring life outside of gender roles.

OUT OF OFFICE
TIMOTHY BARBER
BEAUTY AND THE BEAST
In a terrific season for family
shows, Katie Mitchell’s Beauty and the
Beast, in the National’s cosy Cottesloe
Theatre, is one of the standouts. Shadow
puppets, eerie costumes, mysterious sound
effects and Lucy Kirkwood’s lyrical writing
create a magical world of faries and won-
der – and look out for a a bizarre
“brain-milking” machine. Mark Arends and
Sian Clifford are the titular lovers. Until 5
Jan. Tickets from £10 from
Beauty and the Beast www.nationaltheatre.co.uk
DEREK JACOBI AS KING LEAR
You can map out the career of a great
actor as they run through the major
Shakespearian roles, with Lear the late-
career crowning glory. Derek Jacobi,
arguably our leading living interpreter of
the Bard, has finally made his way to the
blasted heath at the Donmar Theatre,
under Michael Grandage’s direction,
in a performance some critics are
describing as the finest Lear in a genera-
Derek Jacobi as Lear tion. Until 5 Feb. Tickets from £15 from
www.donmarwarehouse.com
NORMAN ROCKWELL RETROSPECTIVE
American painter Norman Rockwell was
best known for his depictions of everyday
life which appeared on the covers of the
Saturday Evening Post. He may be dis-
missed by many as a mawkish, sentimen-
tal illustrator rather than a serious artist,
but there’s no doubting Rockwell’s
extraordinary facility with paint, and the
Dulwich Picture Gallery’s retrospective is
a rare and intriguing look at a career
stretching from 1916 to 1963. Until 27 Mar,
www.dulwichpicturegallery.org.uk
CITYA.M. 16 DECEMBER 2010 Lifestyle | Food & Drink 27

COMPASS BOX FLAMING HEART

I love blended whisky, and Compass Box is an
innovative West London company that’s been

Festive
at the forefront of blending for 10 years. This
release marries Old Clynelish, Caolila and
Ledaigh whiskies, and it’s beautifully peaty, but
subtle too. £72, www.compassboxwhisky.com

drams GLENFARCLAS 40 YEAR OLD

Considering the amount of time this has
been in the cask, this is amazing value.
Glenfarclas is synonymous with rich, bold
cherry notes, chocolatey flavours and
winter spices – a great winter warmer
that needs to be sipped and savoured
and allowed to tell its considerable tale.
£295, www.thewhiskeyexchange.com

Timothy Barber raises his glass to the best

Scottish whisky vintages to buy this year

A
FINE bottle of Scotch whisky makes a terrific Christmas present for anyone
who appreciates a dram of the good stuff. But finding the best bottlings
isn’t easy, and there are thousands to choose from. So we asked Neil Ridley,
L AC E AT
V ESSON T
OUR P
PL
E
S EC U R E Y
YO
Y
whiskey expert and the brains behind the CaskStrength.net blog, to select

R
SE

U L I N A
A U N IQ U E C TRROOOPPSS, WHO HAVE GIIVVEENN
the whiskies that he’d like to find under the tree on Christmas morning.
O M UCH
YAMAZAKI 1984 DE
EDD
Neil says: Japanese whisky takes some of the best characteristics of Scotch FO
U N DS F O R O U R WO U N
SIIN
R A IIS FU
NG F
whisky and does them in HD – it’s big, bold, but beautifully made. The 1984
Yamazaki has huge, resonant fruit notes and lots of oak, TH U R S DAY 10TH F E B RUA RY 2011
vanilla and spice. £469, www.thewhiskyexchange.com
6.15PM ‚ G UILDH A LL
The splendour of Guildhall, an introduction to the
HIGHLAND PARK 1970 evening by Mayor of London Boris Johnson and
ORCADIAN VINTAGE a line up of internationally acclaimed chefs, each
The third bottling from the dis- personally presenting a gourmet course on the night.
tillery’s prestigious Orcadian All the ingredients for the year’s not-to-be-missed
Vintage series, this almost defies culinary experience.
logic in its excellence. You get lots of
very subtle peat notes and incredible AUS E
complexity, with no over-woodiness TH E C
which you can get with older releases. Raising funds to build and run Personnel Recovery
£2,250, www.highlandpark.co.uk Centres, for wounded troops in need of support on
their return from active duty.

BRORA 30 YEAR OLD

The Brora distillery closed in 1983, and its whiskies are very collecta-
ble since stocks are now very low. Released this year, the spicey, woody
30 year old is a really luxurious whisky that’s worth sticking away for a
few years. £277.95, www.royalmilewhiskies.com
V E NT Wo r k i ng to g e t h e r w i t h
TH E E

Have a swinging New Year

tury Paris. Can-can dancers, Burlesque per-
formers and songstresses will perform on
the spectacular courtyard stage, while the
restaurant offers six courses and the chic
Long Bar serves cocktails and champagne.
£90 for access or £240 for dinner.
TIM The Roof Gardens: The unique gardens
Tables of 10 people are priced
at £ 3 , 5 0 0 plus VAT
BADHAM offer the perfect way to welcome in 2011
with fireworks a plenty. £125 gets you entry
GOING OUT and a champagne, cocktails and canapés ERS
reception, with live music in the Marquee, SUP PORT
top DJs and breakfast nibbles.
PON S
AND S
THE RECE EPTION – Attended by Mayor of London, Boris Johnson
CANAPES AND SUSHI
Served by Martyn Nail, Claridges and Simon Young, Jumeirah Carlton Tower
THE BANQUET – Hosted ted byy Brian Turner OBE
S
STARTER
TARTER Albert Roux OBE & Glen Watson
FIRST COURSE Mark Flanagan, The Royal Chef, The Royal Household
& Christian Garcia, Chef to HSH Prince Albert II of Monaco
FISH COURSE Philip Corrick, Royal Automobile Club
& Matthew Marshall, Chamberlain’s
MEAT COURSE John Williams MBE, The Ritz & Jason Atherton
D ESSERT Benoit Blin MCA, Le Manoir Aux Quat Saisons
DESSERT
PETIT
P ETIT FOURS William Curley, Best British Chocolatier 2007-2009
Each course served with carefully selected wines.
Military pageantry will feature throughout the evening.
OR S
S po n so r s &
Sponsors

N
EW Year’s Eve can often be a disap- Baglioni Hotel: Celebrate in five-star supporters
s u p p o r te rs
pointment if you don’t get it right. Italian style at the hotel’s “Casino de E ve n t
Event
Here is a list of the hottest parties in Baglioni” party which will have you seeing in organiser
o rg a n is e r
London, so you have no excuse. the sunrise with its all-night schedule from & ssponsor
po n so r
Sanctum Hotel: This rock’n’roll boutique 10pm-6am. Tickets £45 if you book now.
hotel is throwing the ultimate house party. Boujis: It’s hard to beat this South Ken
Kick the evening off with a four-course din- classic for a hedonistic club night and they
ner before taking to the roof Terrace (with are offering a remarkably reasonable all
Jacuzzi) for drinks and dancing. The private inclusive ticket at £125 for entertainment
cinema will include Wii games and guitar and complimentary bar all night... till very T
TO
OSSECURE
ECU RE Y YOUR
OU R PLACE
PL ACE AT AT THIS
THIS EXCLUSIVE
E XCLUSIVE EVENT
E VENT contact
contact AAlessio
lessio
hero. £80 for dinner or £40 for entry. late. Score a table ticket for £180 and you onn 0
o 020
20 77648
648 8
8694,
694, eemail
mail &--#)ž"',&#(-)Ő)()(|)'
&--#)ž"',&#(-)Ő)()(|)' oorr visit
visit
The Sanderson: NYE takes on a classic get complimentary bottle service all night.
French cabaret twist at “Le Chat Noir”, an For full details on any of these NYE events 1 1 1|"',&#(-)Ő)()(|)'
evening of live entertainment à la 19th cen- contact info@innerplace.co.uk
 28 Lifestyle | TV& Games CITYA.M. 16 DECEMBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show:
7.30pm EastEnders: BBC News
8pm The Royal Variety
Performance 2010:
10pm BBC News
10.25pm Regional News
10.35pm The Apprentice –
Why I Fired Them:
11.35pm This Week: Skiing
Weatherview
12.30am Sign Zone: Baby P: In
His Mother’s Words –
Panorama
1am Sign Zone: Countryfile 1.55am
Sign Zone: Antiques Roadshow
2.55am Sign Zone: The Young Ones
3.55am-6am BBC News
6pm Celebrity Eggheads:
6.30pm Strictly Come Dancing
– It Takes Two:
7pm Best of the Culture Show
2010:
8pm Nigella Kitchen:
8.30pm Rick Stein’s Christmas
Odyssey:
9pm At Home with the
Georgians:
10pm Never Mind the
Buzzcocks:
10.30pm Newsnight: Weather
11.20pm CHOICE Best of the
Culture Show 2010:
12.20am The Apprentice:
You’re Fired!
1.05am BBC News 3.55am-6am
Close
6pm London Tonight 6pm The Simpsons: 6pm Home and Away:
6.30pm ITV News 6.30pm Hollyoaks: 6.25pm Live from Studio Five:
7pm Emmerdale: 7pm Channel 4 News 7pm Five News at 7
7.30pm Christmas or Bust?: 7.55pm 4thought.tv: 7.30pm Highland Emergency:
Tonight: 8pm The Million Pound Drop Five News Update
8pm Emmerdale: Live: 8pm Demolition: The Super
8.30pm Coronation Street: The 9pm CHOICE The House That Stadium: Five News at 9
first of the funerals takes place. Made Me: 9pm NCIS: A petty officer is
9pm CHOICE Celebrity 10pm Jamie’s Christmas Lock- killed.
Grimefighters: In: 10pm Law & Order: Criminal
10pm ITV News at Ten 11.05pm Alan Carr: Chatty Intent: BEST OF THE CULTURE SHOW 2010
10.30pm London News Man: 10.55pm Law & Order: BBC2, 11.20PM
10.35pm FILM 2 Fast 2 12.10am Reaper: 11.55pm Cops in Crisis: Andrew Graham-Dixon presents yearly
Furious: Thriller sequel, starring 1.00am Slow Joe 12.15am SuperCasino highlights, including artist Chris Ofili
Paul Walker. 2003. 1.10am Our Drugs War 2.05am 4.05am Divine Designs 4.30am discussing his career and Mark Kermode
12.30am The Zone Unreported World 2.35am FILM Rough Guide to Bang for Your Buck interviewing film director Tom Ford.
2.35am Surface 3.20am The Antwone Fisher: 2002. 4.30am- 4.45am House Doctor 5.10am
Jeremy Kyle Show 4.10am-5.30am 5.55am FILM The Spy in Black: Michaela’s Wild Challenge 5.35am-
ITV Nightscreen Drama, starring Conrad Veidt. 1939. 6am Michaela’s Wild Challenge

SKY SPORTS 1 10.15pm Biathlon 11.15pm 4.40am Boston Legal 5.30am- 2.05am This Is England ‘86 DISCOVERY HOME &
SATELLITE & CABLE

Boxing 12.15am-12.30am 6am Home Shopping 3am What About Brian

7pm Live Darts: Day one of the
2011 PDC World
Championship. 12am Ringside
2am Premier League World
2.30am-6am Live Test Cricket
SKY SPORTS 2
7pm Test Cricket 10pm Time
of Our Lives 11pm Test Cricket
12am The Rugby Club 1am-
4.30am Live NFL: San Diego
Chargers v San Francisco
49ers (Kick-off 1.20am).
SKY SPORTS 3
7pm Race World 8pm The
Rugby Club 9pm Ringside
11pm Race World 12am Test
Cricket 2am Time of Our Lives
3am-4am Race World
BRITISH EUROSPORT
5.45pm Bobsleigh 7.45pm
Eurogoals Flash 7.55pm
Equestrian 9pm Live
Equestrian: The Olympia
International Horse Show.
Eurogoals: One to One
ESPN
6pm Live UEFA Europa League
Football: Coverage of a
matchday six fixture. 8pm Live
UEFA Europa League Football:
Coverage of a matchday six
fixture. 10pm Goal! 10.30pm
MMA Live 11.15pm ESPN
Kicks Extra 11.30pm UEFA
Europa League Highlights
1.30am Live NHL Ice Hockey:
Dallas Stars v San Jose Sharks
(Face-off 1.30am). 4am Press
Pass 2010 4.30am-5.15am
MMA Live
LIVING
7pm CSI: Miami 8pm Teens
That Tie the Knot 9pm Nikita:
Drama, starring Maggie Q.
10pm Chuck 11pm Criminal
Minds 1am CSI: Miami
2am CSI: Crime Scene
Investigation 3am Charmed
BBC THREE
7pm Top Gear 8pm Young
Fishmonger of the Year 9pm
Jeff Brazier: Me and My
Brother: The TV presenter tries
to change his sibling’s life.
10pm EastEnders 10.30pm
Russell Howard Live:
Dingledodies 11.30pm Family
Guy 12.15am Jeff Brazier: Me
and My Brother 1.15am Russell
Howard Live: Dingledodies
2.10am My Boyfriend the War
Hero 3.10am Love Me, Love
My Face 4.10am-5.10am
Young Fishmonger of the Year
E4
7pm Hollyoaks: The Costellos
discover Jasmine’s secret.
7.30pm Friends 9pm The Big
Bang Theory 9.30pm Meet the
Parents 10pm Misfits 11.05pm
This Is England ‘86 12.10am
Scrubs 1.10am Misfits
3.45am Reno 911! 4.05am HEALTH
Being Erica 4.50am-6am 7pm A Baby Story 8pm 10
Switched Years Younger 9pm I Didn’t
Know I Was Pregnant 10pm
HISTORY Real Life Thumbelina – Four CELEBRITY GRIMEFIGHTERS
7pm The Universe 8pm Ice Years On 11pm Hospital ITV1 9PM
Road Truckers 10pm IRT Sydney 12am I Didn’t Know I Neil Morrissey, Tamara Beckwith, Gino
Deadliest Roads 11pm Ice Road Was Pregnant 1am Real Life D’Acampo, Andrew Castle and Liz
Truckers 1am IRT Deadliest Thumbelina – Four Years On Brewer join specialist teams fighting
Roads 2am Extreme Trains 2am Hospital Sydney 3am 10 the daily war on the nation’s grime.
3am-5am Decoding the Past Years Younger 4am Baby Tales
5am-6am A Baby Story
DISCOVERY
8pm How Do They Do It?: How SKY1
money is minted. 8.30pm How 8pm Modern Family 8.30pm
It’s Made 9pm Wheeler The Simpsons 9pm An Idiot
Dealers 10pm Swamp Loggers Abroad: Karl Pilkington visits
11pm Death Machines 12am Egypt. 10pm Raising Hope
Bear Grylls: Born Survivor 1am 10.30pm A League of Their
Deadliest Catch 2am Chris Own 11pm NCIS: Los Angeles
Barrie’s Massive Engines 3am 12am Road Wars 1.50am THE HOUSE THAT MADE ME
The First World War 3.50am Shadow of the Shark 2.40am CHANNEL4, 9PM
Nasa’s Greatest Missions Oops TV 3.30am The Dresden Michael Barrymore returns for the first
4.40am Days That Shook the Files 4.20am Sell Me the time in 35 years to the council estate
World 5.30am-6am How Does Answer 5.10am-6am Are You where he grew up in Bermondsey,
That Work? Smarter Than a 10 Year Old? south London.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
17 23 17 16 20 30 11 
19 18
9 
28 12
Place the numbers from 1 to 9 in each empty cell so that each 36  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 16 30
7 27
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 4 4 13
 
above or to the left of it. 12 25
You can only use the digits 1-9 39     
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5 38 6
45  
same digit twice in a block.
   The same digit may occur 22 
20 10 29
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column, but it must be in a
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15 6
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21 14

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3 Say out loud for the 1 Beetle considered
  
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purpose of recording (7)
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divine by ancient
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E R 7 Region of northern 3 Valleys (5)
Europe (7)
4 Endowed
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 8 Divert in a specified
direction (5)
with natural

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
D A 10 Diminish (6)
abilities (8)
5 Court game (6)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
S N 12 Lowest adult male
singing voice (4)
9 Person who
makes a will (8)
QUICK CROSSWORD 6 7 9 5 8 7 9 8 14 Fling (4)
11 Total (3)
6 6 & $ 9 ( 1 * ( 5
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13 Appalled (6)
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 Sport
29
“THIS ENGLAND SIDE IS BY FAR
THE BEST I’VE SEEN IN YEARS”
JUSTIN LANGER ADMIRES THE MENTAL
TOUGHNESS IN STRAUSS’S SQUAD: P28

Henson could face England

sion’s Strictly Come Dancing. few weeks ago, when he was still on

▲
RUGBY UNION
BY FRANK DALLERES
WALES and Saracens centre Gavin
Henson is being tipped to make a sen-
sational return to the Test arena in
the Six Nations opener against
England.
The talented back has not played a
competitive match since March, hav-
ing taken time away from the game
and then enjoyed a stint on televi-
But Henson is set to make his
Saracens debut this month, having
signed a short-term deal with the
Hertfordshire-based outfit, and has
made no secret of his ambition to win
back his Wales place.
And Welsh great Phil Bennett
believes an injury to first-choice fly-
half Stephen Jones could pave the
way for the former Ospreys man to be
handed a first international start
since the 2009 Six Nations. “I said a
Strictly Come Dancing, it wouldn’t
surprise me if Gavin makes his come-
back for Wales against England,” said
Bennett.
“And they all laughed at me! But
stranger things have happened and
let’s keep on with this story. I don’t
know, he could be playing No10 for
Wales against England.”
Jones faces four weeks on the side-
lines after damaging knee ligaments
playing for Scarlets last weekend.

Montgomerie left Casey (inset) out of his Ryder Cup side Picture: ACTION IMAGES

Monty: Casey
still snubs me
▲

GOLF career. And the eight-time European

BY FRANK DALLERES
RYDER CUP captain Colin
Montgomerie admits he has hit a
brick wall with his efforts to speak to
Paul Casey, 10 weeks after leaving
him out of his team at Celtic Manor.
Montgomerie overlooked Casey for
one of two wildcard picks to face the
United States in October, after the
Englishman failed to qualify auto-
matically.
And the Scot, whose side prevailed
in a thrilling contest, revealed he
appears to have been snubbed in his
efforts to make contact with Casey
ever since.
“I have still to speak to Paul,” he
said. “I have been trying hard but I’m
not getting very far. Email, text and
voicemail is about my limit and I
can’t do any more than that. But I’ve
tried and we’ll leave it like that.”
Montgomerie, 47, revelled in the
captaincy but has now turned his
thoughts to resuming his playing
Order of Merit winner is dreaming of
qualifying for the 2014 Ryder Cup,
which is to be held on his home soil
at Gleneagles.
“I would love to do that in 2012
and, more especially, to play in 2014,”
he added. “I would be 51, but in golf-
ing terms, I suppose, still quite
sprightly. I’ve got to get myself back in
the world top 50. Every competitor in
the Ryder Cup, all 24 of them, were in
the top 50 this particular time and I
have got to get myself back in.”
Having won the cup as player and
captain, Montgomerie is also aiming
to revamp the competition, and has
proposed a change in format that
would mean every member of each
team playing on all three days.
“You start off with 12 and you’ve
got to rest four immediately,” he said.
“They are not tired so I’d like to see
them all playing in every series. I
don’t know if you can squeeze that
into three days but I would prefer
everybody to play.”

SPORT | IN BRIEF
Hopley backs selection process
RUGBY UNION: The boss of the Rugby
Players Association has given a cautious
endorsement of England’s plans not to
select overseas-based players after next
year’s World Cup in New Zealand. Chief
executive Damian Hopley said the pro-
posals are “heavy-handed” but admitted:
“If this is what it takes to get the best
results from England at the 2015 World
Cup, then that’s the price players will
have to pay.”
Kean will have input in transfers
FOOTBALL: Blackburn caretaker manag-
er Steve Kean will have the final say on
any signings during the January transfer
window, according to the club’s owners.
Venky’s group chairwoman Anuradha
Desai denied that Rovers’ transfer policy
is being set by an external agency and
confirmed Kean will oversee any deci-
sions. She said: “He [Kean] knows the
players best and he’ll have the final deci-
sion on who we bring in.”
 30 Sport CITYA.M. 16 DECEMBER 2010

Results
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the subject of
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CRICKET
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JgXikXGiX^l\%%%%%%%(  ( :JB8DfjZfn%%%%%%%%%%%(  ( BY JAMES GOLDMAN “Not necessarily the individuals
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C`m\igffc%%%%%%%%%%%%%%%%%%%%%%%%%- ) + ' / * , (' about their business. and we respect it.”
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J\m`ccX%%%%%%%%%%%%%%%%%%%% )  ) 9;fikdle[%%%%%%%%%%%%%%%%(  ) ment leaked to the press last year. third Test in Perth this morning.
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MCC warned about wisdom of lie detector proposals

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▲

Alm\ekljmDXe:`kp-gd %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
CRICKET The MCC’s proposal is part of a The MCC said in a statement: “The said even the most reliable lie detec-
JXcqYli^mC\Z_GfqeXe-gd %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% BY MARTIN CAPARROTTA range of measures that they hope will committee is concerned at the scale tor tests were only “usually around 80
>iflg918i`jJXcfe`bXmIfj\eYfi^-gd #9Xp\iC\m\iblj\e ensure spot betting scandals, such as of the problem, and the detrimental per cent accurate”. Dr Sharon Leal
m8kc\k`ZfDX[i`[-gd %>iflg:1C\mjb`Jf]`XmJgfik`e^ THEY are more commonly associated the one that dogged Pakistan’s tour effect it has placed on the integrity of added: “They [the MCC] are probably
C`jYfe-gd #C`cc\m>_\ek-gd %>iflg>18<B8k_\ejm with daytime television and US court- of England earlier this year, become a the game. thinking of using them as a deter-
Q\e`kJkG\k\ijYli^/%', #8e[\ic\Z_km?Xa[lbJgc`k/%',% rooms than the genteel world of thing of the past. “We feel more resources – and rent. I’d imagine most players would-
>iflg?1>\kX]\mPfle^9fpj/%', #M]9Jklkk^XikmF[\ej\ cricket. But the game’s lawmakers are However, they have been urged to increased powers – are required to n’t want to take a polygraph test.”
/%', %>iflg@1;\Yi\Z\emJXdg[fi`X/%', #GJM
<`e[_fm\emD\kXc`jkB_Xib`m/%', % giving serious consideration to using exercise caution by experts who point attempt to eradicate this issue from There may be practical drawbacks,
lie detector tests in their latest bid to out the limitations of the technology, the game.” however. She added: “They are quite
wipe out the growing threat of cor- which is not deemed reliable enough But one expert at Portsmouth lengthy – each test takes about three
email sport@cityam.com ruption in the sport. for British courts. University’s psychology department hours.”
CITYA.M. 16 DECEMBER 2010
THE ALL-ROUNDER |
CONDITIONS, STATS AND BANTER
DAY ONE FORECAST
HIGH 310
LOW
170
Bright sunshine
PITCH
Curator Cameron Sutherland has
prepared a grassy one. Perth is tra-
ditionally a result wicket, but the
groundsman appears to have taken
the draw right out of the equation
with this strip.
STATS OF THE DAY
l Ricky Ponting claims he’s a fan of
batting on Perth’s traditionally
bouncy surface. But the numbers
wouldn’t appear to suggest as
much, while his recent shortcom-
ings against the short ball could
see his mixed record at this venue
extended. In 20 Test innings since
making 96 on his debut 15 years
ago, he has passed 50 only three
times.
l England’s record at the WACA
doesn’t give much cause for hope.
They’ve won once in 11 Tests, and
that was back in 1978 against an
Aussie side robbed of their best play-
ers by the Kery Packer revolution.
FIGHTING TALK
“Guns 'n' Roses are in the same
hotel as us. We've seen Axl Rose
hanging around and it’s not hard to
spot the other members of the
band. They’re all very heavily tat-
tooed and there was one chap sat
at the bar with a top hat on. I must
admit, I’ve never cared much for
their music. Sweet Child 'O Mine
was okay, I suppose.” – Sky Sports
commentator David ‘Bumble’ Lloyd
surprises nobody with his lack of
appreciation for America’s crinkly
metal rockers.
“The Hurley bird gets the Warne.” –
Former England international Derek
Pringle is the latest to join in on the
Shane Warne / Liz Hurley pun
based Twitter action.
“In the nets he is the best bowler in
the world, bar none. He is
unplayable. But trying to get that
form and aggression out in the mid-
dle was hard.” – Speaking of Warne,
the now very definitely ex-Aussie
spinner summed up his experience
of playing with former Hampshire
teammate Chris Tremlett.
Tevez will be told to stay
▲
FOOTBALL
BY JAMES GOLDMAN
MANCHESTER CIT Y manager
Roberto Mancini will implore want-
away striker Carlos Tevez to remain
at the club when the pair meet for
showdown talks tomorrow.
Mancini is yet to confront his lead-
ing goalscorer, but is confident the
26-year-old can be talked out of leav-
ing the club in January.
City have made it clear they
intend to make sure Tevez honours
the five-year contract he signed 18
months ago and his Italian manager
will reinforce that stance when the
duo meet face-to-face.
“I will say that he must stay here.”
Mancini said. “I don’t think he is
unhappy, really unhappy. I don’t
think that.
“I will tell him that we can change
the history of the club and, together,
we can do good work this year.”
Though Mancini is adamant his
star attraction will stay put, he did
admit he was disappointed with the
26-year-old’s actions, which come at
a time when the club are handily
placed both in Europe and the
Premier League.
City are just two points behind
leaders Manchester United on the
domestic front, and a win in Turin
against Juventus tonight would see
them progress to the next round of
the Europa League as Group A win-
ners.
He said: “I’m disappointed this has
happened because I think that we
are in a good moment and we have a
good position in the table.
Cameron refuses to block Spurs Olympic stadium bid
▲
FOOTBALL
BY FRANK DALLERES
TOTTENHAM’S bid to move into the
Olympic Stadium has received a dou-
ble boost after Prime Minister David
Cameron and the Premier League
refused to stand in the way of the con-
troversial plan.
Cameron (right) declined when
asked by David Lammy, the MP for
Tottenham, to sign a petition
demanding Spurs ditch proposals to
Tevez trained with his City teammates yesterday
“Our focus must be on this, but
before that, I said I want to speak
with him because I repeat, Carlos has
three years on his contract and, yes, I
want him to stay.
“He is our player and it’s my opin-
ion that Carlos will stay with us, but I
want to speak with him. He can con-
tinue to play for us.
“I hope he can continue to be
unhappy because he has scored 10
goals already as an unhappy player!”
move from their north London
home to the East End.
Responding to Lammy’s chal-
lenge in yesterday’s Prime
Minister’s Questions, he joked,
with reference to England’s
failed World Cup bid: “I
think my recent experience
has taught me to stay out
of international football
management. I think I’ll
let them [Spurs] make
the decision but it is
Picture: ACTION IMAGES
Mancini admits that he has yet to
decide on whether Tevez should
retain the captain’s armband, but
City midfielder Patrick Vieira insists
that the forward’s demeanour
around his teammates has not
altered since his transfer request was
made public at the weekend.
“We haven’t talked about it among
the players.” Vieira said. “But in the
last few days he has been the same
Carlos that started the season.”
true to say that at the Olympic
site has a fantastic stadium.”
Tottenham are vying with
West Ham to be the preferred
bidder by the Olympic Park
Legacy Company,
which is set to
make a decision
early next year.
The deadline
for contracts to
be signed is in
late March.
Sport 31
Euro glory
the target
for Kuyt
LIVERPOOL forward Dirk Kuyt
believes the Europa League will
offer the club a major opportunity
to end their five-year trophy
drought.
Liverpool finished top of Group
K after two wins and four draws
following last night’s goalless
draw against Utrecht at Anfield.
And Kuyt hopes this will be a
season when the Reds can bring
silverware to Merseyside.
He said: “We have a couple of
targets and we like to win tro-
phies. I think we have a very good
chance to win this trophy.”
Meanwhile, owners John W
Henry and Tom Werner will inter-
view candidates for the vacant
chief executive role on Friday with
a view to making an appointment
in the new year.
Former FA chief executive Brian
Barwick has been linked with the
role, as has former Arsenal man-
aging director Keith Edelman.
The Premier League, meanwhile,
has advised both clubs they have no
objections to the move. Tottenham
are also considering building a new
£450m stadium next to White Hart
Lane, but have been deterred by rising
costs and a lack of public money.
Cameron’s move came as a group
of athletes, including Dame Kelly
Holmes, signed an open letter urging
authorities to ensure the Olympic
Stadium’s running track is retained,
whoever moves in after the Games.
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