LOVE CRICKET? WWW. TITANSOF CRICKET. COM BUSINESS WITH PERSONALITY DON’T MISS IT! THE 50P ENGLAND TAKE GIANT STEP TAX DEBATE TOWARDS WORLD NO1 SPOT SHOULD THE COALITION SCRAP BRESNAN CRUSHES INDIA P22 & 23 THE TOP RATE? P8 Issue 1,437 Tuesday 2 August 2011 www.cityam.com FREE HSBC plans US PULLS BACK a jobs cull in Europe ▲ BANKING BY JULIET SAMUEL EUROPE is set to lose thousands of jobs FROM THE BRINK to higher-growth markets in Asia as HSBC slashes its headcount by 30,000 ▲ POLITICS in the next two years. BY ELIZABETH FOURNIER That includes 700 jobs cut in the UK alone in the first half of this year, with US POLITICIANS moved one step closer more to come as the bank refocuses its last night to approving an eleventh- business eastwards. It has also cut 700 hour deal to raise the country’s debt jobs in France, 1,400 in the US and 300 ceiling, and hope to avoid the prospect in the Middle East. of a default that would throw global By contrast, it has hired 1,500 in Asia- markets into chaos. Pacific and 800 in Brazil, although Members of the Republican-con- Latin America overall has seen 1,700 trolled House of Representatives voted jobs cut. 269-161 in favour of the proposed plan, The bank says that the numbers are which will lift the debt ceiling by $2.4 merely gross job cuts, with many likely trillion (£1.48 trillion) before the end of to go through “natural attrition”. But it the year through a programme of has no estimate for the net job losses spending cuts that politicians have expected in the UK or overall. spent recent weeks furiously debating. It does, however, have concrete plans Though the House vote was seen as to hire 3,000-4,000 people per year in the biggest hurdle to the bill’s emerging markets, despite rising wage progress, the Democrat-led Senate Gabrielle Giffords (above) inflation. must grant final approval before returned to the House for the key Chief executive Stuart Gulliver put tonight’s midnight deadline. After vote last night, which approved the UK job losses down to an increasing that the US coffers would officially the deal negotiated by President burden of regulation driving up costs. run dry, risking the first full-scale Obama and the US Congress Brian Robertson, head of HSBC’s default in the country’s history. Picture: GETTY/REUTERS European businesses, told City A.M. he Representatives from both parties expects headcount in the region to be had spent the final hours before the lion of spending cuts out over the next the House for the first time since she lion programme of cuts would be “broadly flat” as it grows elsewhere. vote rallying support for the bill, decade, with almost $1 trillion avail- was shot in the head in January this needed to sidestep the downgrade. But that could change, the bank despite each side admitting that the able immediately and a further $1.5 year. Democrat Giffords only left rehab US markets, which had dipped from warned, due to regulatory changes rec- compromise proposal was far from trillion in cuts to be agreed later in the in mid-June, but returned to Capitol early gains yesterday after weak manu- ommended by Independent perfect. Democrat minority leader year by a congressional committee. Hill to vote in favour of the deal, earn- facturing data was released, pared Commission on Banking (ICB). Nancy Pelosi was forced to make up for No immediate tax increases will be ing a standing ovation from her col- back losses during the afternoon as Gulliver said: “We’ll really have to a number of defections among introduced to contribute to the pot, leagues. optimism grew that the deal would be wait to see what the ICB will say before Republicans – led by the Tea Party after the Republicans, led by House Commentators spilled doubt yester- passed. But Japan’s Nikkei index fell we know what our headcount will be.” faithfuls – by pledging her support for speaker John Boehner, won a key con- day on hopes that a last-minute deal 1.2 per cent in early trading this morn- Chairman Douglas Flint added that the deal, and encouraging other mem- cession during negotiations. would prevent the US from losing its ing, as fears around the US debt crisis the ICB will also “inform” its decision bers of her party to do the same. The vote saw the return of AAA credit rating, after rating agency continued to rattle world markets. on whether to stay headquartered in The approved plan spreads $2.4 tril- Congresswoman Gabrielle Giffords to Standard & Poor’s said that a $4 tril- DAVID HELLIER: P2 MORE: P4-5 the UK or move elsewhere. MORE: P7

t t t t t Certified Distribution FTSE 100 5,774.43 -40.76 DOW 12,132.49 -10.75 NASDAQ 2,744.61 -11.77 £/$ 1.63 -0.01 £/¤ 1.14 unc ¤/$ 1.43 -0.01 30/05/11 till 03/07/11 is 102,636

WE HAVEN'T GOT ALL THE LEGENDS UNDER ONE ROOF AT TITANS OF CRICKET SEHWAG COLLINGWOOD TRESCOTHICK W.G.GRACE AKRAM BOON FLINTOFF GOT! GOT! NOT! GOT! GOT! GOT! GOT! But we nearly have! New tickets released due to demand go to www.titansofcricket.com THE O2 8th of OCTOBER 2 News CITYA.M. 2 AUGUST 2011 Relief over debt deal is short-lived NEWS | IN BRIEF Cable to reveal copyright change Business secretary Vince Cable is expected to unveil reforms to UK copy- Throw into the mix much renewed WORTH A SECOND CHANCE week the blue-chip Deutsche Bank right laws tomorrow, freeing up those nervousness around the Eurozone and Giving people a second chance is not became the group’s nominated advis- who make copies of their own music there can be no surprise that the just the prerogative of David Cameron, er. Deutsche, who declined to com- and film collections for personal use euphoria of global markets yesterday it seems. Occasionally even the nor- ment, was impressed by recent from potential lawsuits. In the UK, it is morning was short-lived. mally harsh City can be a forgiving additions to the group’s board. still illegal to make personal copies of In the UK, the latest disappoint- place too, which is a good thing as far Yesterday shares in the group spiked bought content. Cable is expected to say ment in manufacturing stats will sure- as African Minerals is concerned, a by around seven per cent to hit an all- he will abolish such restrictions, in line ly put more pressure on chancellor company that specialises in extracting time high of 663p after it announced a with the Hargreaves report on intellec- EDITOR’S LETTER George Osborne to try to revive eco- iron ore from Sierra Leone. deal in which the Chinese Shandong tual property published in May. nomic growth. While some are look- African Minerals is chaired by the Iron & Steel Group will invest $1.5bn DAVID HELLIER ing towards the revival of quantitative entrepreneur Frank Timis, who was in an iron ore project. AIM-listed Xchanging profits plummet easing, others look to supply-side chairman of Regal Petroleum when it African Minerals is now worth around Pre-tax profits at back office services t didn’t take long for the relief measures including tax cuts to get the was fined £600,000 by London’s junior £2.2bn, not far short of the market group Xchanging plummeted 95 per caused by Sunday evening’s US economy moving forwards again. stock market AIM for failing on 11 sep- capitalisation of a FTSE-100 company. cent in the first half of 2011. The spon- debt plan to dissipate. First, there’s Although perhaps not the most sig- arate occasions to “take reasonable Analysts from the likes of Deutsche sor of the Oxford-Cambridge boat race Ithe dawning realisation that the nificant lever, the 50p tax rate contin- care to ensure its announcements and Bank of America Merrill Lynch said that in the six months to the end of plan itself, passed by the House late ues to cause much debate and in were not misleading, false or deceptive weighed in with buy notes yesterday. June, profits before taxation fell to last night, is unlikely to help the US recent days the call for its scrapping and didn’t omit material informa- Timis has a record for making huge £812,000. The company parted ways avoid some sort of debt downgrade. from London Mayor Boris Johnson has tion”. sums of money for shareholders in with its chief executive David Andrews Nor is it likely to repair the wounds provoked a lively debate. As well as being the executive chair- some deals, while other ventures such and cancelled its 2010 dividend in caused by weeks of wrangling between On page 8 we present two views on man of African Minerals, Timis is the as Regal Petroleum have ended less February after surprising markets with US lawmakers. the issue; one from a conservative MP second largest shareholder with a 12 successfully for him and those who a profit warning. The firm is now keen to Then there were disappointing eco- who feels its scrapping is vital if we are per cent stake, but that hasn’t stopped have backed him. cut costs by substantially paring the nomic figures on both sides of the to energise the entrepreneurial spirit the likes of BlackRock, M&G and But there is always an exciting ride number of senior managers in the UK, Atlantic that indicate tough times are that will help move the UK forwards; Capital from backing the group. along the way. cutting US overheads and closing its ahead, regardless of whose economic and another from a former aide to Indeed his presence is what pulls most [email protected] London West End head office and relo- policies are most in vogue. Gordon Brown who defends it. of those investors there. Also, only last MORE ON AFRICAN MINERALS: P11 cating to Leadenhall.

4th Floor, 33 Queen Street, London, EC4R 1BR Tel: 020 3201 8900 Fax: 020 7283 5334 UK factories Email: [email protected] www.cityam.com

Editorial Editor Allister Heath Deputy Editor David Hellier slump in July News Editor David Crow Acting Night Editor Marion Dakers Business Features Editor Marc Sidwell Lifestyle Editor Zoe Strimpel ▲ ECONOMICS third-quarter, especially as there were Sports Editor Frank Dalleres BY DAVID CROW no obvious one off factors like the NI boss Rupert Murdoch and former chief executive Rebekah Brooks Picture: REUTERS Art Director Craig Gaymer Royal Wedding to blame. Pictures Alice Hepple GEORGE Osborne’s hopes of a manu- Labour was quick to seize on the sur- Commercial facturing-led recovery were dealt a vey as proof that the coalition does not Sales Director Jeremy Slattery blow yesterday, after a survey suggest- have a plan for growth, arguing that it NI ordered email deletion Commercial Director Harry Owen ed factory output had contracted in is cutting too far, too fast. Head of Distribution Nick Owen July for the first time in two years. Osborne’s plans for growth were The manufacturing purchasing also dealt a blow yesterday from the manager’s index (PMI) fell to 49.1 in International Monetary Fund (IMF). ▲ MEDIA The requests, which were made Distribution helpline July from a revised 51.4 in June – the The IMF maintained its forecast for UK between April 2010 and July 2011, If you have any comments about the distribution BY HARRY BANKS of City A.M. Please ring 0207 015 1230, or email first time it has been below the 50 economic growth of 1.5 per cent this included wiping more than 200,000 [email protected] mark that separates contraction from year and 2.3 per cent in 2012, but NEWS International asked a technol- delivery failure messages and prun- expansion since July 2009, when the warned the “mandate is met with a ogy firm to delete a large number of ing archived messages, HCL told the Editorial Statement UK was still in the depths of recession. very slim target”. emails from its system nine times in parliamentary committee. This newspaper adheres to the system of Although the manufacturing sector 15 months, a technology firm told HCL, responding to a request from self-regulation overseen by the Press Complaints accounts for just 13 per cent of eco- George Osborne, the MPs probing the hacking scandal. the committee chairman Keith Vaz, Commission. The PCC takes complaints about the nomic output, it recovered strongly In a letter to the Home Affairs said it did not store News editorial content of publications under the Editor’s chancellor, is relying on Code of Practice, a copy of which can be found at after the slump as companies Committee from India-based HCL International data but managed the www.pcc.org.uk restocked and a weak pound boosted manufacturing growth Technologies, the firm said that it firm’s computer systems. Printed by Newsfax International, exports. to offset depressed noticed nothing “abnormal or unto- News International said it “keeps Beam Reach 5 Business Park, Economists said the survey did not domestic consumption ward” about the requests by News backups of its core systems” and was Marsh Way, Rainham, Essex, RM13 8RS bode well for economic growth in the International. working with police to restore them. WHAT THE OTHER PAPERS SAY THIS MORNING

name Topiary, is among the leaders of LulzSec, an online group that has claimed responsibility for dozens of FOXCONN LOOKS TO AN AUTOMATED cyberattacks in the past two months. KRAFT TAKES ON THE CHALLENGE OF ULTRA ELECTRONICS DEFY CUTS WITH COURT THROWS OUT CONVICTIONS IN FUTURE WITH 1M ROBOTS BY 2013 FUNDING CADBURY PENSION DEFICIT PROFIT RISE GENRE-AIG CASE Foxconn, the world’s largest contract CONSUMERS FIND FUNDS TO SAVE Kraft Foods has agreed to a nine-year Ultra Electronics, the engineering A federal appeals court yesterday electronics manufacturer by revenue, MORE funding plan to top up Cadbury’s company which specialises in sensors threw out the 2008 criminal convic- plans to have as many robots as work- Households are putting more money deficit-stricken pension scheme. The and defence equipment, turned in a tions of four former General Re Corp. ers in its China factories within three aside in tax-free savings accounts American group confirmed last night 23 per cent rise in first-half profit and executives and an American years, according to Terry Gou, chair- than ever before, despite rising that it had agreed to underwrite the said it plans to expand through acqui- International Group Inc. ex-executive man and chief executive. Foxconn, domestic bills and stagnant wage scheme’s deficit and had already sitions this year, despite delays and stemming from a high-profile trial China’s biggest employer, produced growth. The number of active made the first payment of £30m, cuts to defence orders in the US and over a reinsurance transaction that Apple’s iPad and other electronic Individual Savings Accounts (Isas), with payments to be made until 2019. UK. Pre-tax profit rose to £43.9m in prosecutors said masked a drop in gadgets. The group currently employs rose to 15.3m in 2010-11, the highest the six months to 1 July, up from reserves at AIG. The US Second Circuit 1m workers but has just 10,000 robots figure since Isas were first launched STORES’ SALE SAVES ONE IN TEN JOBS £35.7m the previous year. Court of Appeals ordered a new trial on its production lines. in 1999, according to FT analysis of AT TJ HUGHES for former Gen Re chief executive data from HM Revenue & Customs. Nearly 450 jobs at TJ Hughes have UK STORES BOOSTED BY CHINESE Ronald Ferguson and the four others. TEENAGER CHARGED WITH LULZSEC been saved after a buyer was found SHOPPERS HACKING ATTACKS IS RELEASED ON POUNDLAND TO TACKLE EUROZONE for four of the shops owned by the Chinese tourists have been on a spend- CNN’S MORGAN TRIES TO FEND OFF BAIL DISCOUNT SECTOR WITH IRISH discount department store chain. The ing spree in British shops, helping to SCRUTINY A British teenager charged with a STORES administrator Ernst & Young said yes- boost the profits of department stores CNN said it is standing by television range of hacking offences as part of Poundland, the discount retailer that terday that Lewis’s Home Retail, a and luxury goods retailers, fresh fig- host Piers Morgan amid growing the Metropolitan Police’s investiga- has grown rapidly on the high street homewares company that is part of ures have shown. Analysts said the media scrutiny over his past as a tion into Anonymous and Lulz in recent years, is poised to become the online retail company Benross weak pound, the strength of the UK tabloid editor in the UK, where a Security was released on bail yester- the first of the UK’s growing ranks of Group, had bought TJ Hughes’ flag- luxury goods retail scene and the rise widening scandal over reporting tac- day. Scotland Yard officials allege that pound stores to expand abroad. It will ship store in Liverpool and sites in of the Asian middle class combined to tics has led to a re-examination of the Jake Davis, using the online nick- open six stores in Republic of Ireland. Eastbourne, Glasgow and Sheffield. see a surge in tourist spending. tabloid newspaper industry. CITYA.M. 2 AUGUST 2011 News 3

ANALYSIS: TOP TEN MOST SHORTED FTSE STOCKS SOURCE: DATAEXPLORERS Rank Company Shares on loan (%) Thomas Cook in top shorted 1 Yell Group 19.80 2 Dixons Retail 19.21 3 Home Retail Group 17.25 stocks after profit warning 4 Provident Financial 15.42

5HMV14.21▲ CAPITAL MARKETS miss its full-year profit forecasts. Will Duff Gordon. It joined others struggling to main- Directory publisher Yell Group BY ALISON LOCK 6 Carpetright 12.61 tain sales as cash-strapped consumers topped the list for another month THOMAS Cook made a surprise entry cut back on discretionary spending. with almost a fifth of its shares on 7 Lonrho 11.68 into the UK’s top ten most shorted “Average short interest across the loan as bearish investors saw it facing stocks by the end of July after it FTSE All Share is only 1.74 per cent a long-term decline. 8 Thomas Cook 10.80 issued its third profit warning in a but consumer-facing groups such as Short sellers also targeted smaller year, according to DataExplorers. second-tier retailers, travel and bet- retailers such as electrical goods spe- 9 Betfair Group 10.48 The embattled holiday operator ting companies see far greater cialist Dixons and Argos owner Home had more than ten per cent of its demand from short sellers and domi- Retail Group that have had their sales 10 Next Plc 10.18 shares out on loan by 28 July after it nate the list of most shorted stocks,” battered by falling consumer confi- warned on 12 July that it was likely to said DataExplorers research director dence and spending.

Prime property prices are up 10 per cent since last year Picture: Micha Theiner/CityAM Europe’s rich flood London’s house market

▲ PROPERTY months. Overseas interest in London prop- BY ELIZABETH FOURNIER erty has traditionally been driven by THE price of luxury homes in central buyers from the Middle East and London has jumped by almost 10 per eastern Europe, but more recently cent in the past year, driven by buyers from Spain, Italy and Greece demand from wealthy Europeans have been flooding the market in looking to invest outside of the trou- search of secure investments away bled Eurozone economies. from turbulent domestic markets. Prime London property prices Research late last year showed that have risen 9.6 per cent since July three-quarters of cash-rich 2010, and are more than 28 per cent Europeans buying property in higher than two years ago, just after London do so as a means of diversify- the post-financial crisis trough in ing their wealth, and moving assets March 2009, according to the latest overseas, with just a quarter buying Prime Central London Index from with the intention to make London estate agent Knight Frank. their primary residence. “Once again the main reasons for The upward trend in London is in the level of demand in the prime stark contrast to the rest of the coun- central London market can be attrib- try, where average property prices uted to the increased presence of have fallen by more than one per overseas purchasers and low stock cent over the same period. levels,” said Noel Flint, who is head Eurozone worries also seem to of London residential at Knight have hit British buyers desire to Frank. move abroad. “In the last month our offices Data from online property search have seen more interest from buyers Primelocation.com revealed last from continental Europe.” week that interest in homes in Property prices in Chelsea and Portugal, Italy, Greece and Spain fell Mayfair have risen most steeply, with by almost a quarter (24 per cent) values up 7.7 per cent and 7.2 per between the first and second quar- cent respectively over the past six ters of this year. 4 News CITYA.M. 2 AUGUST 2011

KEY ELEMENTS OF THE US DEBT DEAL WINNERS AND LOSERS DEFICIT CUTS OVER 10 YEARS WHAT’S BEEN AGREED? Less than one per cent of the cuts will be keen to get them Q A John Boehner Q. be made through 2012. back on the table of & Bragged that the GOP got Spending cuts totalling $2.4 tril- the bipartisan commit- 98pc of its wishes, but has A. lion (£1.48 trillion) over 10 years AND THE OTHER $1.5 TRILLION? tee. With Democrat-friendly defence been bruised by the fight to will be approved in two stages, with Q. cuts written into the back-up meas- get there, with his tactic of 4 $917bn available straight away and a A so-called bipartisan committee ure, there will be little incentive to brinkmanship unlikely to win further $1.5 trillion subject to a fur- A. of 12 will be tasked with allocat- vote for the second round of savings him popular favour. Will be 10 To be ther vote later in the year. President ing the extra savings, with the tax unless they include tax hikes. But the pleased the balanced budget Obama will be allowed to raise the code and benefit programmes likely remaining discretionary cuts will amendment survived. debt ceiling in three steps. to be high on its list of targets. If an include Medicare, meaning neither approved agreement can’t be reached on at party’s sacred cow is safe. Harry Reid HOW WILL THE SPENDING CUTS least $1.2 trillion of savings, or Though his plan to boost the Q. WORK? Congress rejects the plan, automatic WHAT ABOUT THE BALANCED debt ceiling by $2.7 trillion by end Almost $1 trillion (£614bn) of cuts cuts of that amount will be imple- Q. BUDGET AMENDMENT? straight off was rejected, 5 A. will kick in immediately, spread mented from 2013. This clause essentially bans the Reid has always been pre- of 2011 over 10 years and balanced between A. US from any form of deficit for pared to compromise. Will be defence and non-defence spending. A HOW LIKELY IS IT THAT THE TRIG- the fiscal year, with government only pleased to have helped push 10 cap on the cuts will be set for each Q. GER CUTS WILL BE USED? allowed to spend what it collects in the deal through, despite year, with harsher upper limits saved Quite likely. Democrats have been tax revenue unless three-fifths of the angering some liberals. for later in the programme once the A. pushing for tax increases House votes in favour of allowing a economy has (hopefully) stabilised. throughout the negotiations, and will spending excess. Mitch McConnell Has raised his profile by staying at the centre of negotations and making 6 sure pain was shared among parties at the table. 10 With a default avoided his case to be majority leader in 2013 is strong. Barack Obama London Southend Can take solace from the fact that the debt ceiling will be raised through the end of his first term, and that any 4 automatic cuts will hit in the areas Airport Democrats would favour. But his approval rating has dropped signifi- cantly, and his reputation within his 10 own party has been damaged by worries that concessions to the Republicans have set a precedent for future fiscal negotiations. Triple A rating still in doubt ▲ US ECONOMY force some funds to offload their US BY JULIET SAMUEL treasuries immediately if they have legal mandates that requires them to THE US could still be downgraded by hold only triple-A rated debt. ratings agencies despite passing its ING’s James Knightly says that deficit reduction plan yesterday, say despite the deal: “The AAA rating is economists, leaving debt markets not assured with a downgrade still Eight great destinations under a cloud of uncertainty. potentially having severe negative The deal to cut US spending by consequences for the economy.” $2.4 trillion over the next decade The plan voted through yesterday falls far short of S&P’s stated require- also leaves the lion’s share of the cuts from April & May 2012 ment that Washington would have to to be decided by a congressional com- produce some $4 trillion in cuts over mittee, which will report in the medium-term to avoid a down- November, with a vote scheduled for grade. just before Christmas. Alicante Faro “The deal does not put the US fis- Pimco’s Mohammed El-Erian sug- cal position on a sustainable path gested that S&P must be “under a lot Amsterdam Ibiza and will not prevent the US from los- of pressure” from the US government ing its AAA credit rating,” says not to downgrade the sovereign, Capital Economics’ Paul Dales. which could buy the US some time Barcelona Majorca Just $6bn in cuts are planned for until the committee reports. this year – in the context of a deficit However, few expect a dramatic worth $1.049 trillion. effect on treasury yields, even if the Belfast Malaga A downgrade would put the US on US is downgraded. Newedge’s Bill the same ratings level as China, Blain says simply: “The $7.5 trillion Fast access from London Liverpool Street, Japan and New Zealand, and could US Treasury market is irreplaceable.” then just 100 paces to the terminal US manufacturing at two-year low

▲ US ECONOMY US stocks swung from a one per cent gain at th e open to a one per cent Available to book now at EARLY gains in th e US markets were slide mid-afternoon, but losses pared reversed yesterday after poor manufac- later on renewed hopes th at th e debt turing data put th e spotlight firmly ceiling deal was nearing approv al. back on th e faltering US economy. The headline index fell to 50.9, and The Inst itute for Supply th e forward-looking new orders index Flights to Amsterdam, Barcelona and Belfast International commence on 2 April 2012, to Alicante and Faro on Management (ISM) reported th e slow- dropped to below 50, th ough th e ISM est gr owth in US manufacturing in said th is could be down to companies 5 April 2012 and to Ibiza, Malaga and Majorca (Palma) on 1 May 2012. Average train journey time between two years, with new orders falling to putting off decisions until th e debt London Liverpool Street and Southend is 54 minutes based on timings on nationalrailenquiries.co.uk th eir lowe st level since June 2009. ceiling deal had been reached. CITYA.M. 2 AUGUST 2011 News 5 Eurozone crisis $1.049 Trillion Spain gets its Other discretionary Deficit Size European stocks slump spending minimum price Approved Debt and Italy’s banks suffer in telco sale yesterday $14.3

Trillion as Greek relief wanes ▲ EUROZONE

▲ EUROZONE above the six per cent line, reaching SPAIN’S auction of mobile telecoms $917bn 6.2 per cent. radio frequencies raised €1.65bn BY JULIET SAMUEL & DAVID CROW 2011-2012 Traders were even less impressed (£1.44bn), scraping above the mini- Deficit Target EUROPE yesterday showed signs that with the euro than with the US dol- mum €1.62bn price tag set by the $350 billion confidence was unravelling after a lar: the single currency fell by more government. tepid response to Greece’s latest than one per cent against the green- The sale formed part of Spain’s defense cuts bailout, as the tiny Eurozone island back throughout yesterday. It also attempt to get its government $1.043 of Cyprus swung closer to a bailout. set a new record low of less than deficit down to six per cent this The Dax plummeted more than SFr1.1 against the Swiss franc. year from over nine per cent. Trillion 2.8 per cent, dragging the Eurostoxx European jobs figures gave little The country was put on a nega- 50 down 2.9 per cent, although the cause for joy: the overall unemploy- tive credit watch by Moody’s on FTSE fell just 0.7 per cent. ment rate stayed at 9.9 per cent but Friday, and yields on its ten-year Trading in shares of Intesa the numbers of unemployed work- debt hit 6.2 per cent yesterday. $1.5 trillion Sanpaolo – Italy’s largest lender – ers rose by 18,000. The auction saw Spain’s largest and Banca Monte dei Paschi were Cyprus also stirred up unease in three mobile operators Telefonica, suspended due to falling too quickly. the bloc after its biggest bank, the Vodafone and France Telecom’s Committee to report on Both banks had plunged more than Bank of Cyprus, said there was an Orange split valuable extra radio cuts by November 2011 7.8 per cent by the day’s close, while “imminent threat” of the country frequencies, crucial to allow them Unicredit fell 4.3 per cent. “joining the European Union sup- to meet growing demand for data Italian ten-year yields also shot port mechanism”. use on smartphones and tablets. above six per cent – seen as a danger- The country’s banking sector Eleven telecoms operators ous threshold for European debt – holds around €5bn (£4.4bn) worth of applied and were granted the right and the spread between yields on Greek sovereign debt and is heavily to enter the auction, crucial in dis- Italian debt and equivalent German reliant on the stricken country for tributing enough mobile frequen- bunds rose to 350 basis points. trade. The yield on its 10-year bonds cies to allow operators to meet The cost of Spain’s ten-year debt was at 10.54 per cent yesterday, up future customer demand for data continued to move northwards high from 9.71 per cent on Friday. use on smartphones and tablets. IT’S TIME FOR THE

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*First 50 people to purchase a Samsung Galaxy Tab 10.1. Android Market, YouTube, Google Maps, Google Talk are trademarks of Google, Inc. Adobe and Flash are either registered trademarks or trademarks of Adobe Systems. CITYA.M. 2 AUGUST 2011 News 7 30,000 jobs? It’s a start, says Gulliver

HEN HSBC chief St uart through th e banking sector. Gulliver gr ow th markets for reve nues. Gulliver told investors in revealed th at under Basel III rules, But it st ill pays to be cautious. May that the bank had a th e bank’s RoE would have been a Costs in Asia have been hit by wage W“cost problem”, few expect- less inspiring 10.5 per cent. inflation, which is expected to con- ed him to wield th e axe quite so dra- “We would have needed to make tinue even as China slows, due to the matically. an extra $2bn th is half-year to hit our concentration of worker-hungry But he insists th at cast ing out mid- target under Basel III,” he said. Few banks in new fi nancial centres. dle managers to th e tune of 30,000 in other banks have been quite so frank. And Gulliver’s “reasonably strong gr oss job cuts is st ill not enough: “It St ill, analysts are optimistic, confidence” that the Chinese govern - will be a very long journey,” he upgrading their price targets left and ment can engineer a soft landing warned yesterday. Given that the right yesterday. They were pleased by could prove misplaced. bank’s return on equity came inside th e bank’s suggest ion th at net inter- He st ill has a lot to prove . its 12-15 per cent target range, th at est margins are on th e way up despite might seem a tad pedantic. being eroded th is year by its US busi- But not once you factor in the wave ness and encouraged by its shift of regulatory reform sweeping towards drawing more on higher- BOTTOMLINE Analysis by Juliet Samuel

HSBC chief Stuart Gulliver is slashing jobs despite a rise in earnings. HSBC unveils surprise rise in earnings

▲ BANKING customers mis-sold payment protec- BY JULIET SAMUEL tion insurance (PPI), with earnings in the region falling 29 per cent to HSBC defied the equities gloom to $2.2bn. jump 2.19 per cent yesterday after But the bank said that its global unveiling a rise in profits versus expec- banking and markets division (GBM) – tations of a decline. HSBC’s investment bank – fared better The bank saw its half-year pre-tax than rivals due to providing relatively profit rise to $11.5bn (£7.1bn), three per unusual services such as trading cent higher than the same period last access to a wider range of emerging year, allowing it to boost its dividend markets than others. Nonetheless, its for the period by 13 per cent to 18 revenues slumped nine per cent. cents. Its underlying profits were up 13 per ANALYSIS l HSBC Holdings cent to $11.4bn on the back of a 32 per p 607.50 cent fall in impairments, which the 1 Aug bank said was driven by running off 620 the unwanted parts of its US business. 615 The bank announced the sale of its 610 New York branch network late on Sunday for $1bn and said it is still in 605 talks with “a couple of potential buy- 600 ers” for its US credit cards business. 595 European profits were knocked by a $611m provision for compensating UK 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug Aldermore bank Nedbank first Bespoke seasonal hospitality packages tailormade to suit your requirements. has broken even half profits rise Limited availability from only £85+VAT per game For more details email [email protected] ▲ BANKING ▲ BANKING or call 0871 223 9940 NEW British bank Aldermore has NEDBANK Group, South Africa’s broken even, two years after its fourth-largest bank, reported a 26 per launch, and has accumulated total cent rise in first-half profit yesterday, assets of more than £1bn, the compa- helped by a drop in bad debts and its ny said yesterday. push to boost revenue from fees. Aldermore said it now had loans Nedbank, majority owned by insur- of more than £800m for 9,500 cus- er Old Mutual, was hit hard by bad tomers, and had 42,000 deposit debts after 2009’s recession took over accounts. 1m jobs out of the economy, www.chelseafc.com/hospitality Aldermore and other new squeezed corporate earnings and left *If booked by 20th August 2011. entrants such as Metro Bank, borrowers with ballooning house- Haymarket Financial (HayFin) and hold debts. NBNK are aiming to challenge the It has turned its focus to increasing dominance of Britain’s “Big Four” the money it makes on transactions, banks. to offset the slack demand for credit. 8 Debate CITYA.M. 2 AUGUST 2011 Should the 50p rate be scrapped?

lition would be unlikely to or even leaving the UK, the a pragmatic response to need- the biggest firms. The 50p YES harm revenues. There are result is always the same: a NO ing a plan to reduce the does mean they pay more – three obvious reasons it drop in total tax revenue. deficit and making sure the and unsurprisingly they needs to go. Third, scrapping the top pain was equally spread would love it to go. First, all empirical evi- tax rate will provide an around different income But surely it might be dence on the relationship immediate boost to econom- groups. And it was realistic on argued, don’t experts say that between tax rates and tax ic growth. Other supply side what a 50p rate would and the 50p rate won’t raise much revenues shows that, after a measures the government would not do. money? That is certainly what certain point, tax cuts lead has already taken, such as Take a hard look at the the Institute for Fiscal Studies to higher revenues. As one cutting red tape and invest- policy. The 50p tax rate does said a while back. This was who supports a progressive ing in skills are also impor- not come in at median mainly though because it tax system, I want the rich to tant, but they all take far wages or even at average thought that those who earn SAJID JAVID, MP pay more in taxes. The way longer than tax measures to DAN CORRY wages. It comes in at £150k. these sorts of sums are pretty to achieve this is through kick in. That is six times the typical smart at avoiding ever paying HE last Conservative scrapping the 50p rate. The people who create HE emotion and politics full timer’s wage and three such a rate – they turn earn- manifesto was When Margaret Thatcher wealth in our society do so surrounding the 50p times what someone as high ings into capital gains, or hide unequivocally right to slashed the top income tax most often by risking every- debate far outweighs its as the 90th percentile gets. them away in aided by Tinclude the pledge that rate from 83p to 60p, and thing they have in the hope Teconomic significance Only around one per cent of accountants. “we do not regard the 50p eventually to 40p, taxes paid of greater returns. It is a step and the heat is growing as Lib the population earns this The Treasury reckons that tax rate as a permanent fea- by the rich rocketed. During that many people are unwill- Dems and Tories argue out much. It is a marginal tax the 50p tax would raise some ture of the tax system” as, the Thatcher years, the ing to take. This profit-seek- the issue publicly. rate that applies solely to serious money – up to £2.4bn. indeed, was Alan Johnson income tax take from the top ing motive should always be The 50p top rate is seen by earnings over £150k not to If it is right then scrapping it when he called for it to be 10 per cent of earners went welcomed, and never treated some as a major factor hold- those below it as popular dis- will leave a hole in the ditched last November, when up from 32 per cent to 45 per with contempt or ridicule, as ing back a nascent economic cussion sometimes suggests. Budget that needs to be filled he was Labour’s shadow cent. Similarly, the Reagan it generates additional recovery. Cut it back to 40p, Not only that but if the in another way – and there chancellor. era tax cuts in the US led to wealth not only for those goes the theory, and enter- much desired rebalancing of are no easy options. In truth Introduced by the previous higher tax revenues from the who start up the business prise will gush out of every the UK economy is to hap- we do not yet know how Labour government in its rich. but also for all those who are pore. Firms who are queuing pen we will have to see the much it will raise and there- dying days, the 50p rate is Second, the 50p rate employed by it, supply it and up to leave the UK will change rise of middle sized manu- fore how much scrapping it something the coalition gov- makes the UK extremely trade with it. their minds. Entrepreneurs facturing firms. The key peo- would cost – although some ernment should abolish as uncompetitive for high earn- It will take courage to will emerge from every uni- ple to boost this sector rarely economists pointed to unex- soon as possible. ers. After Sweden and scrap the 50p tax rate. But versity and back street. earn the sort of money that pectedly high revenue from That’s why I was delighted Denmark, we have the high- given the tough, but neces- So were we mad in the 50p tax rate would income tax recently that may when the chancellor est top tax rate in the world. sary, economic decisions the announcing the introduction impact upon. point to even higher revenues announced a review of tax Such a punitive rate only coalition government has of the 50p back in Budget The trouble is that perspec- from the 50p than the on top earners in the last puts pressure on those affect- already made, I am personal- 2009? Was this Labour getting tives on these issues are highly Treasury thought. Case very budget. I’m confident that it ed by it to mitigate their tax ly convinced that the right its own back on the wealthy coloured by the experiences of much not proven. will show that the 50p rate exposure however possible. decision will be made. and taking revenge on the those who most strongly advo- Dan Corry is an FTI Consulting raises so little, if indeed it Whether this takes the form Sajid Javid is the Conservative bankers? Conspiracy theorists cate them – the very well paid director and a former adviser to raises anything, that its abo- of tax avoidance, tax evasion MP for Bromsgrove. may think so but in fact it was in the City and the CEOs of Gordon Brown

CITY VIEWS: DO YOU THINK THE GOVERNMENT SHOULD WAIT TO REDUCE THE 50P TAX? Interviews by Helen Thompson * These views are those of the individuals below and not necessarily those of their company.

ANNALISA STORSILLO | WILLIS JACK HARVEY | LOREGA LTD JASON WARD | MARKETRESEARCH.COM

“Yes, they should keep it “No, the 50p tax was “No, personally I think that it for the moment. It may introduced a few years is unfair only penalising the not be fair to everyone but ago as a temporary meas- high earners, because they it’s needed to pay off UK ure. I think it will be justi- are the ones who work hard debt. The revenue has to fied to reduce it in the to earn their money. The be generated somewhere next budget as it is quicker they get rid of it, the and this is the best way.” disproportionately high.” better.” CITYA.M. 2 AUGUST 2011 EDITED BY 9 HARRIET DENNYS Got A Story? Email [email protected] Follow The Capitalist The Capitalist on Twitter: @citycapitalist

Taylor LEGAL FIRM Wessing BROADENS wants to widen the net RECRUITING to younger people who HORIZONS Out of bounds: Battersea’s landmark Hotel Verta don’t have part of the hotel again sooner rather than CITY INTERNSHIPS are notoriously hard later. Precisely when that will be, however, to come by. But not for regular readers of the contacts is anyone’s guess. “I wish I knew,” said The Capitalist such as Ratidzo Chinyuku, Thomason. “Hopefully in the next three who wrote to Taylor Wessing partner to get into law months, so I can get on and run my hotel Martin Winter asking for a work place- again.” ment after reading about his charity work in her homeland of Zimbabwe in this col- umn on 12 April. SLEEPING ON THE JOB Following her successful appeal, the 15- Ratidzo Chinyuku (fourth from left) with TW’s private equity lawyers. Pic: Micha Theiner/City A.M. IT STARTED as a trial to let jetlagged year-old schoolgirl is now half way through bankers take a rest in the middle of the a two-week placement in the law firm, tacts to get their foot in the door. There or one hundredth of the debt Davis’s busi- day, but Jon Gray’s “sleep pods” have where she is helping the private equity are plenty of schools in outer and inner ness owes creditors Barclays and Lloyds. proved such a hit that the former Merrill team by doing background research on the London who would welcome the opportu- However, while Davis is free to flog the Lynch banker is no longer renting his “cash generative businesses” they have nity.” Form an orderly queue… penthouse, located at the top of his Hotel sleeping contraptions but selling them off been asked to pitch for and the personali- Verta in Battersea, the events space on the as fast as his Battersea production plant ties of the people they are meeting. floor below has fallen into the hands of can put them together. Chinyuku, who previously had “mixed PENTHOUSE PLOT the administrators as it is part Five investment banks have placed perceptions” of the law, based on the TV ANYONE in the market for a new pent- of Von Essen Hotels Group – orders for the £1,650 sleeping tubes (pic- show The Good Wife, has been “inspired” house? Why not trot along to Strutt & much to the dismay of the tured left), as well as ten law firms and by her legal experience. And Winter, a sen- Parker’s Knightsbridge branch to take a hotel’s general manager even one hospital – for the staff working ior partner and head of private equity at look at the Battersea penthouse that fall- Andrew Thomason, who has “demanding shift patterns”, not the Taylor Wessing, is now keen to start a pro- en hotels tycoon Andrew Davis has put up been told he can not rent out patients, The Capitalist should point out. gramme to make law as “representative as for sale. He is keen to make some cash fol- the space until the adminis- Obviously, the City firms aren’t turn- possible of the wider community”. lowing the collapse of his country house tration process has been com- ing their quiet back rooms into bed- “There is a feeling the legal profession hotels empire Von Essen Hotels Group. pleted. rooms to get out of doing their work; it has become too narrow in how it Three bedrooms (all en suite, naturally), Since the function area usu- is all about short rests that “signifi- recruits,” said Wessing. “So we want to plus a generous reception area leading ally rents for £5,000 to £7,000 cantly increase an individual’s work start a programme that widens the net to out to a 300 square foot terrace with views for 24 hours, that is some loss of capacity”. “Like having a cup of coffee, younger people who don’t have the con- of Canary Wharf – and all for just £2.5m, income, so let’s hope Floor 13 becomes but healthier,” supplied Gray helpfully. 10 News CITYA.M. 2 AUGUST 2011 Melrose bid for Charter gains pace as roadshow moves on

▲ INDUSTRY Schroders’ head of UK equities, told this week, sources told City A.M., due to Charter’s chairman Lars Emilson he the level of interest it has received BY ALISON LOCK was “underwhelmed” with the cost- from its larger shareholders there. PRESSURE on Charter International cutting strategy it had presented. Sources close to Charter, however, mounted yesterday as its investor Analysts said investors were likely said the board was “very much listen- roadshow to win support for its new to take Buxton seriously. “People pay a ing to all of its shareholders”. chief executive and strategy moved to lot of attention to what he has to say,” “Schroders holds eight per cent of the US after days of UK meetings. said Collins Stewart analyst Mark Charter, so 92 per cent of investors Charter has rejected two offers Wilson. “Our view is that the most still have to be considered,” one said. from turnaround investor Melrose, likely option is that Melrose is success- But Melrose sources said Charter’s but several of its major investors have ful at £8.40 or close.” investors, 30 per cent of whom hold called for it to allow Melrose to view Charter has been forced to cancel a shares in both firms, “don’t feel they its books, while Richard Buxton, meeting with minority US investors have had their questions answered”.

Melrose executive chairman Christopher Miller has tabled a £1.4bn offer for Charter Cooper drops takeover bid for rival Laird ▲ ELECTRONICS terms under which it had initially BY KASMIRA JEFFORD agreed to meet with Cooper. In a statement to the stock LAIRD shares plunged 15 per cent exchange yesterday the firm said: yesterday after Cooper Industries “Cooper continues to believe that announced it was withdrawing its there would be strategic merit in bid for the electronics components acquiring Laird but is unwilling to firm, saying it is unwilling to pro- proceed at the price at which the ceed at Laird’s asking price. Board of Laird will engage with Cooper Industries’ two-month bat- Cooper or without being able to tle to take over the smaller British undertake due diligence.” rival came to a deadlock this week- Laird dropped 27.9p to close at end after the two companies were 159.8p, its lowest price since Cooper’s unable to agree on a price. initial approach on 16 June. The Houston-based electronics firm sweetened its offer from 185 to ANALYSIS l Laird 200p per share last Wednesday only 159.80 p to be rebuffed two days later. 190 1 Aug Laird’s chairman Nigel Keen wrote to Cooper’s chief executive Kirk 180 Hachigian to say that its board was not prepared to meet with Cooper 170 unless it increased its indicative offer 160 to 220p a share. Sources close to City A.M said 150 Laird’s response came as a surprise to Cooper, as it marked a U-turn in the 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug MEET THE ADVISERS

MARK WARHAM hired by BHP to advise on its deal with Chesapeake. BARCLAYS Born in Leeds, Warham joined BarCap in May 2009 from Morgan Stanley, CAPITAL where he was head of UK M&A. He is currently a member of the Takeover Panel, and served as its director gen- Barclays Capital acted as adviser to eral between 2005 and 2007. Cooper Industries in its bid for Laird. Mark Todd, managing director of Mark Warham, co-head of European BarCap, joined the investment bank M&A, led the advisory alongside man- from Citigroup’s mergers and acquisi- aging director Mark Todd. tions team in July 2009. Over the past Warham’s team recently worked on year, Todd acted as adviser to Irish the London Stock Exchange’s failed food company Greencore during its £4bn merger with Canadian peer unsuccessful attempt to merge with TMX Group and was also recently Northern Foods. CITYA.M. 2 AUGUST 2011 News 11 The risk taker who puts his African Minerals signs money where his mouth is with China’s Shandong ▲ PROFILE the reasons why shareholders, Y ESHE NELSON from JP Morgan to Goldman Sachs, B ▲ repeatedly trust and support him MINING ment, and has the option of buying approval before it can go ahead with AS a self-made billionaire, Frank regardless of a previous brush with up to 25 per cent of annual iron ore the funding. BY KASMIRA JEFFORD Timis’ entrepreneurial skills in the the authorities. production from each of Tonkolili’s Deutsche Bank analyst Grant global natural resources industry In 2009, Regal Petroleum, for- AFRICAN Minerals has finalised a three production phases. Sporre said in a note that, if approved, are hard to match. Nicknamed merly part of Timis Corporation’s £1.5bn deal with China’s Shandong The funding will help AIM-listed the deal significantly de-risks the “The Gusher” in the City, he is well portfolio, was fined a record sum Iron & Steel, handing over a 25 per African Minerals to press on with the projects as it “is a significant vote of known for being a fast-talking risk- of £600,000 for consistently mis- cent stake in its flagship Tonkolili second phase of its expansion project confidence in Sierra Leone by China”. taker. leading shareholders. A blemish iron ore project in Sierra Leone. and repay a $417m (£255.8m) loan. African Minerals, run by the con- His personal website was recent- that appears to have been forgot- Shandong, one of the world’s Shandong, which first signed a troversial Romanian businessman ly re-launched, drawing a less-than- ten for now. largest iron and steel groups, will memorandum of understanding Frank Timis, was previously known subtle focus on his social Despite owning two also purchase iron ore at a discount- with African Minerals last year, still as the Sierra Leone Diamond responsibility and charitable Bombardier ed price under an off-take arrange- needs to secure Chinese government Company. deeds. It is clear that Timis is try- Challenger 604 air- ing to draw a firm line under his planes, he would controversial past. never describe At the tender age of 15 he fled himself as the Romania and eventually sought flashy type, as he refugee in Australia. He was lives in London in charged twice in Australia in the a rented apart- early 1990s for possessing heroin, ment without a something he has never denied but car. is not proud of. However, this blip in his past has done very little to negatively affect his future success. He cut his teeth in the industry as a labourer on a rig in Western Australia, but had embarked on his first mining venture by the age of 27. One of the many things that set him apart from other entrepreneurs is his willingness to finan- cially back his own projects, such as the $52m (£31.9m) he invested of his own money in African Minerals. This is likely to be one of FRANK TIMIS 12 News CITYA.M. 2 AUGUST 2011 CHARLES ALLEN TO LEAD LABOUR REVIEW GMG sees its Zappia gets revenues slide Sky Italia job in tough market ▲ MEDIA GUARDIAN Media Group (GMG) has ▲ MEDIA Fila and Procter & Gamble. endured another “challenging” year, BY STEVE DINNEEN His predecessor Mockridge was seeing revenues fall nine per cent to parachuted into News Corp’s UK £255m, while flagship newspaper edi- NEWS Corp has appointed newspaper business News tor Alan Rusbridger took home Andrea Zappia as chief executive International last month after £455,000. of Sky Italia, replacing Tom the resignation of former News GMG chief executive Andrew Miller Mockridge, who left the broad- of the World editor Rebekah earned £572,000, while axed manag- caster to fill the vacant top job at Brooks. ing director Tim Brooks received a News International. The former newspaper worker £510,000 final settlement. Zappia will leave his job as a from Murdoch’s Australian busi- The firm reported an operating loss director at former News Corp ness, now tasked with rescuing of £54.5m, up slightly on last year takeover target BSkyB with the tycoon’s British media opera- despite swingeing cost cuts. Its pre-tax immediate effect. tions in the wake of the phone profit crept into the black at £9m, He will take on the running hacking scandal, is seen as an compared to last year’s £171m loss. battle with Italian Prime antidote to Brooks’ gregarious Its Guardian News & Media (GNM) Minister and media mogul Silvio management style. newspaper business also saw its rev- Berlusconi in the bid to be the enues drop, from £221m to £198m, top pay-TV operator in the coun- Andrea Zappia will hit by a steep decline in recruitment try. ads. Its operating loss also grew slight- Zappia, a key lieutenant to return to Sky Italia ly to £38.3m. The company said digi- Former ITV chief executive and EMI chairman Charles Allen was yesterday appointed to lead a James Murdoch, has a history to take the top job, tal revenues were “robust” but were management and commercial review of the Labour Party. He was hired by incoming general secre- with Sky Italia, having worked replacing Tom not enough to offset the decline. tary Iain McNicol to get the party’s house in order in time for the next general election. Leader Ed there for seven years following Mockridge Its Trader Media Group business Miliband said the appointment is another step in the right direction for Labour. Picture: REX senior marketing roles at Ferrari, saw an operating profit of £120.1m. Twitter confirms significant investment from Russian firm

▲ TECHNOLOGY of around $400m (£246m), with another $400m being split TWITTER yesterday confirmed it between other investors, giving has completed a “significant Twitter a valuation of up to $8bn. round of funding” led by Russian T Rowe Price is thought to be technology investor Digital Sky one of the minority investors, tak- Technologies (DST). ing a stake worth around $90m. The microblogging site said the Analysts say the fundraising new funds, in which several other makes it unlikely Twitter will seek investors were involved, would be to IPO in the short term. used to “aggressively innovate, DST already has a stake of more hire more great people and invest than $1bn in Facebook. In in international expansion”. February it invested $100m in It is understood DST took a stake Spotify, valuing it at $1bn. Twitter boss Dick Costolo wants to expand

‘BRILLIANT! BRILLIANT! BRILLIANT!’ Chris Tarrant, BBC Radio 2

Arena raced ahead of attendance expectations in its first half Picture: ACTION IMAGES Arena Leisure sees 11 per cent spike in attendance ▲ GAMING The surge came despite a drop in pre-tax profits, to £1.4m from £2m, ARENA Leisure saw its shares spike and revenues, from £30.1m to £28.2m. almost eight per cent yesterday before This was largely due to an expected settling three per cent up, after its shortfall in the horseracing levy customer adds raced ahead of expec- imposed on UK-based bookmakers. tations. Arena said it is in talks with the NOËL COWARD THEATRE The racecourse owner said its atten- government on a remedy for the 0844 482 5141 dance figures rose by more than 11 shortfall, without which its revenues per cent year-on-year in the first half. rose by £3m. CITYA.M. 2 AUGUST 2011 News 13 EADS buys Arcelor and satellite firm Peabody go for £587m

▲ AEROSPACE hostile on bid BY HARRY BANKS EUROPEAN aerospace group EADS kept up a hot pace of acquisitions with a $960m (£587.14) cash deal to ▲ MINING while also revealing that it had buy satellite communications firm BY KASMIRA JEFFORD rebuffed an even higher proposal from Vizada yesterday, chasing steadier the two parties, at A$16 a share, that sales from high-value services. ArcelorMittal and US energy group was conditional to “no-shop and no- The purchase, from private equity Peabody were forced to go hostile with talk” obligations with other interested owner Apax France, adds to a string their A$4.7bn (£3.2bn) bid for parties. of deals designed to help the Airbus Macarthur Coal after the Australian Instead, the Australian firm parent firm dispose of surplus cash. mining group said the offer underval- demanded for a conditional price Although Vizida is based in Paris, a ued the company and was working on increase to A$18 per share if it was contract with the US Army will give attracting a rival offer. backed by 90 per cent of shareholders. Franco-German EADS an extra toe- Peabody the largest US coal compa- This was rejected by the Arcelor and Hammerson won planning approval for its London Wall Place last month hold in the United States, where ny, and ArcelorMittal , the world’s top Peabody. efforts to expand have met mixed steelmaker, have been courting Macarthur added that the represen- success. Macarthur to secure its resources of tative from its largest shareholder Citic Vizida provides communications pulverised coal, a key steelmaking Resources has taken a temporary leave services to 200,000 users in the mar- ingredient, but talks collapsed this of absence, to avoid any “future actual Hammerson dodges UK itime, aviation and defence sectors weekend after the board refused to or potential” conflict of interest, reviv- and will become part of EADS’s close the door to rival suitors in ing speculation that Citic too may be Astrium space business. exchange for a higher offer price. interested. EADS said the deal would boost its In a statement to the Australian ArcelorMittal owns 16 per cent of gloom to post sales rise earnings per share and provide “sig- Securities Exchange, ArcelorMittal and Macarthur’s shares, second only to nificant” synergies. It did not give a Peabody said the all-cash offer was Citic, which controls 24 per cent of the timeframe or amount.

worth A$15.50 a share and also company. ▲ EADS wants to double the share of offered Macarthur shareholders a divi- PROPERTY challenging backdrop. services in its revenues to 25 per cent dend of up to 16 cents a share. ANALYSIS l Macarther Coal Ltd BY KASMIRA JEFFORD Pre-tax profit fell by 42.6 per cent to and reduce its dependence on Airbus “Macarthur was not willing to 15.83 £192.8m, while its property portfolio commercial sales to 50 per cent of 15.90 AU$ engage on customary terms even with 1 Aug HAMMERSON, one of Britain’s largest grew in value by 2.2 per cent, with a revenues by 2020 from 66 per cent Peabody and ArcelorMittal’s willing- 15.80 retail landlords, has brushed off chal- 2.6 per cent rise in footfall across its now. ness to improve the price,” said lenges in the retail market, reporting a UK shopping centres. Apax Partners said the deal Gregory H Boyce, Peabody’s chairman 15.70 1.9 per cent rise in like-for-like sales The landlord said it is pressing marked its third exit in the telecom and chief executive. “We have decided across its shopping centres in their ahead with £1.1bn worth of near-term sector in two months following sales to take this attractive offer directly to 15.60 half-year results yesterday. developments after a “period of of Prosodie and Outremer Telecom. It Macarthur shareholders to provide David Atkins, Hammerson’s chief restrained activity”, including two and Vizada were both advised by them with significant value.” 15.50 executive, said the group had seen “lit- landmark office buildings at London UBS. Macarthur told shareholders earlier tle impact” from the rise in retailers Wall Place, which the firm is due to EADS was advised by Messier in the day to take no action on the bid, 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug going into administration despite the start building next year. Partners. Hiscox backs Bermuda tax base as catastrophes push it to £86m loss

▲ INSURANCE noting that Hiscox was “very happy more headroom for next year” as BY ALISON LOCK being based in Bermuda”. rates improved. “We are building business in the Analysts on average expect LLOYD’S insurer Hiscox said record US and being based in Bermuda Hiscox to turn an £11m profit for levels of catastrophes over the past makes us less London-centric,” he the full year. six months pushed it to an £85.6m added. pre-tax loss yesterday. Hiscox, the second-biggest Lloyd’s ANALYSIS l Hiscox Ltd Hiscox’s chief executive Bronek insurer, cut its gross written premi- 394.00 420 p Masojada told City A.M. the period ums by 6.7 per cent compared with 1 Aug had been “very active” and 2011 the first half of 2010, to £847.5m, in 415 would be “a record-breaking year” line with its aim of steering clear of 410 for disasters, but played down the unprofitable underwriting. 405 impact on the insurer. Masojada said he expected full- “This is not the end of the world, year revenues to be flat or slightly 400 it is what we are here for,” he said. lower than 2010, while Hiscox had 395 WE UNDERSTANDUNDERSTTTAAND Masojada also denied that Hiscox raised the capacity of its main syn- would be following rival Lancashire dicate 33 by £100m for 2012, “effec- in returning its tax base to the UK, tively providing ourselves with a bit 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug PRINT NEWS | IN BRIEF Design and Print is full of jargon so wewe don’t blame yyouou fforor being confused.confused. The Color Company aims Rusal lines up $4.75bn loan Plane production aids Senior Seymour Pierce still top for AIM ttoo taktakee the jargon out, so printing with us is simsimple.ple. UC Rusal, the world's largest alumini- Aero engineer Senior yesterday report- Stockbroker FinnCap made the biggest um producer, said yesterday it had ed a 17 per cent rise in first-half profit, small-cap client gains over the last mandated 12 banks to arrange a loan helped by a ramp up in production by three months, taking its tally to 69, With Print Centres locatedlocated throughoutthroughout central of up to $4.75bn (£2.9bn). The banks, its largest plane-making customers according to the latest Hemscott AIM London it means yyouou are neneverver ffarar aawayway frfromom the including BNP Paribas, WestLB and who are seeing continued growth in advisers data. FinnCap is now just one help yyouou need, 2244 hourhourss a dayday 7 daysdays a week.week. WeWe ING, will provide Rusal’s loan to allow demand for commercial aircraft. client short of clinching the joint lead print anythinganything fromfrom business carcardsds ttoo high qqualityuality the firm to pay off debts. The interest Senior, which makes components and spot alongside Seymour Pierce, which marmarketingketing and eexhibitionxhibition collatcollateral.eral. rate on the facility will be the three- systems for the aerospace, defence, has also retained its crown as the top month LIBOR plus margin, with the land vehicle and energy markets, post- nominated adviser despite losing four current margin being 2.35 per cent per ed an adjusted pre-tax profit of £38m clients in the quarter. Law firm CALL US TO DISCUSS 0800 93 9494 93 annum. Rusal said the high level of on revenues 10 per cent higher at Memery Crystal has taken first place oror FIND YOUR NEAREST STORE onon www.color.co.ukwwwwww..colorr..co.uk interest in the deal demonstrated mar- £315.6m for the six months to the end in the AIM lawyer ratings, stealing the ket confidence in the company. of June. top spot from Pinsent Masons. 14 News CITYA.M. 2 AUGUST 2011

NEWS | IN BRIEF HORNBY REMAINS ON TRACK THANKS TO CHINA

Real Good Food shares dented tions, and the firm expects full year Toy maker Hornby said Shares in The Real Good Food Co tum- results to be in line with expectations. yesterday it was trading bled 8.7 per cent yesterday after the Adjusted operating profit rose to £21.1m well, with weakness in company announced a first-half net debt for the six months ended 30 June from Europe being offset by increase on the back of rising commodi- £19.5m a year before. Revenue increased an improved supply ty costs. The bakery ingredients and to £137m from £128.5m a year earlier. chain in China. sugar group said overall it had been Pre-tax profit climbed to £20.9m, from The company, which is trading strongly. In the six months to 24 £19.5m a year before. renowned for its model June, volumes have increased, with over- railways, said in a trad- all sales rising by 21 per cent to £110m Ultra Electronics profits up ing update: “The effect and earnings before interest, tax, depre- British defence company Ultra of pent-up demand in ciation and amortisation improving from Electronics reported a nine per cent rise Europe, now being satis- £600,000 at the same point last year to in first-half adjusted pre-tax profit yes- fied by improved sup- £2.7m. The firm’s shares, which have tre- terday, offsetting the impact of spending plies from China, and bled in value over the last 12 months, constraints in its key UK and US mar- the positive impact of closed at 66p. kets. However, the group expects an incremental sales of impact on contracts going forward. London 2012 merchan- Fidessa trading in line for year Adjusted pre-tax profit between January dise gives us confidence Trading systems developer Fidessa and June was £52.1m, compared with in the out-turn for the reported a resilient interim performance £47.6m last year, boosted by acquisi- year.” yesterday, despite tough market condi- tions made in the period. Picture: Getty Spirit starts The Square Mile’s event of the year. trading after Punch split

▲ LEISURE key risk and think that the new group will need to support these vehi- BY JOHN DUNNE cles with £40m-£45m pa of PLC cash DEBT laden pub company Punch to prevent this occurrence.” Taverns completed its demerger yes- Former Punch chief executive Ian terday as its Spirit business started Dyson is now boss at Spirit, while trading on the market. Punch Taverns is headed by Roger Shares in the slimmed-down Punch Whiteside. plummeted 80 per cent to 13p, as Under the demerger Spirit will Spirit Pub Company ended the day operate 800 pubs while Punch will broadly flat at 52p. look to offload 2,200 premises as it Spirit consists of the better per- addresses its £2.3bn debt pile. forming managed pub business while ANALYSIS l Punch Taverns the leasehold section continues to 13.00 trade under the Punch Taverns name. 80 p 1 Aug The move has been made to give Spirit the chance to thrive by not being saddled with the debt and oper- 60 ational difficulties afflicting Punch. However, some analysts have pre- 40 dicted that the Punch Taverns busi- ness will be at risk of breaching covenants. 20 Citigroup said in a note: “We con- tinue to see covenant breaches as a 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug

Book your place for the City A.M. Awards ANALYST VIEWS: IS SPIRIT A GOOD BUY on Wednesday 21 September at the AFTER THE PUNCH DEMERGER? By John Dunne Grange St Paul’s Hotel, London. JAMIE ROLLO | MORGAN STANLEY

Visit www.CityAMAwards.com We initiate on the newly demerged Spirit Pub Company at “under- weight” as we see structural reasons for its low margins. Free cash flow genera- tion is very weak relative to EPS (we do not think it should pay a dividend). Its “exposure to leased pubs makes it less attractive to other parties.

For more information, contact Jo Pead I 020 8267 4043 I [email protected] SIMON FRENCH | PANMURE ”

Following the de-rating of some of its peers over the last few weeks, headline sponsor champagne reception sponsor sponsors we have reduced our fair value estimate for Spirit to 48-62p per share. Our 83p target price for Punch Taverns was previously predicated on 19p of fair value for “Punch and 64p for Spirit. We recommend a hold.

official venue partner DANIEL HARRIS | H20 MARKETS ”

Newly demerged Spirit is likely to attract interest as a potential invest- ment case, although with nearly half the exposure of group EBITDA to leased pubs, the upside is likely to be limited, at least until the incoming CFO develops the “group strategy. Meantime we view Spirit shares as a hold. ” CITYA.M. 2 AUGUST 2011 News 15 Porsche boosts Miners help earnings thanks Intertek post to China boom ▲ AUTOMOTIVE GERMAN sports car maker Porsche said its quarterly profits have surged higher profits thanks to demand for luxury cars in China and North America. First-half operating profit jumped 37 per cent to €1.07bn (£940m), the company jointly owned by Porsche SE ▲ INDUSTRY mining industries, grew 12.2 per and Volkswagen said yesterday. BY HARRY BANKS cent at constant exchange rates to Revenues were up almost 19 per £251.2m. Keller said Australian floods had contributed to a large decline in profit Picture: REUTERS cent at €5.22bn, implying a first-half BRITISH testing firm Intertek posted Shares in the group, which raised operating margin of just over 20 per a 14 per cent rise in first-half profit its interim dividend by 15 per cent, cent, well ahead of rivals BMW and yesterday, as a booming mining closed up 3.9 per cent yesterday as Mercedes. industry in Asia and the Pacific rim the highest riser in the FTSE 100. Keller blames Australian Porsche AG sold 47 per cent more drove strong growth in its commodi- “A solid set of results, meeting cars in China in the six-month period ties division. expectations with structural growth than a year earlier, and the Asian Intertek, which tests products drivers intact and some of the head- country – the world’s biggest car mar- from toys and clothes to oil and winds in the first half likely to floods for poor first half ket – accounted for about a fifth of its renewable technology, said its reduce into the second half to offset overall sales. adjusted pre-tax profit grew to tougher comparatives,” Goldman Premium and mass-market carmak- £110.6m on revenues up 17 per cent Sachs analyst John Woodman said. ers have looked to fast-growing mar- at £763.1m in the six months to the ▲ CONSTRUCTION results for the full year are expected kets such as China to make up for ANALYSIS l Intertek end of June. BY HARRY BANKS to be within the current range of mar- sluggish sales growth in Europe,. 2,050 The group said it recorded rev- p ket expectations. First-half sales in North America enue growth across all of its mar- 1,990 BRITISH construction group Keller Keller, which built foundations for were up 25 per cent, Porsche AG said kets, with sales at its commodities, 1 Aug posted a 70 per cent drop in its pre- London’s 2012 Olympic Stadium, said as it repeated its target for record commercial and electrical divisions 2,000 tax profit for the first half yesterday, its order book was up 14 per cent. worldwide vehicle sales of more than helping offset a slowdown at its key hurt by the floods in Australia and First-half pre-tax profit fell to £3.4m 100,000 this year. consumer unit, which it said would 1,950 political unrest in the Middle East from £11.3m last year. Revenue rose Volkswagen last week forecast a sig- improve in the second half. and North Africa. 10 per cent to £545.5m. nificant rise in operating profits this Sales at its commodities unit, However, the company, whose Analysts, on average, are expecting year, due to surging demand for its which provides laboratory testing 1,900 largest market is in the United States, the company to post a full-year pre- VW and upmarket Audi marques. and technical services to the world’s said several large jobs will lead to a tax profit of £36.6m on revenue of Porsche SE is due to report first-half energy, petroleum, chemical and 26 Jul 27 Jul 28 Jul 29 Jul 1 Aug much stronger second half, and £1.1bn. results today. 16 News CITYA.M. 2 AUGUST 2011

CITY MOVES | WHO’S SWITCHING JOBS Edited by Harriet Dennys in association with

net worth sector, and were most fiduciary services team in Dubai. Sigrist acquisition strategy, principally in Oracle Coalfields recently directors of Barclays Wealth. joins from UBS, where he was head of Nigeria. Johnson joins from The mining company, which is developing a wealth planning international in Renaissance Capital, where he was 1.4bn tonne coalfield in Pakistan’s Sindh F&C REIT Asset Management Switzerland, with a focus on the Middle head of the new markets oil team for Province, has appointed Adrian Loader, the The direct property fund management East, North East and Africa. investment banking and financing, former president of Shell Canada, as chairman business of the F&C Group has covering all emerging markets outside of the board of directors. Loader’s former appointed Chris O’Connell as an asset Carmignac Gestion Russia and Ukraine. board appointments include Alliance-Unichem, manager in the London office. Laurent Ducoin will join the asset man- Alliance-Boots and Candax Energy. He is cur- O’Connell joins from Invista Real ager as head of the European manage- Wiggin rently a director of Holcim, a member of the Estate Investment Management, ment team on 1 October. Ducoin was The media law firm has strengthened Garda World International Advisory Board where he managed property assets of most recently pan‐European equities its film and TV team by hiring Neil and a member of the advisory board of Lane, £1bn as an associate director in the manager in the European specialist Gillard from Reed Smith as a partner to Clark and Peacock. Industrial Property team. team at BlackRock in London. co-lead the media finance group with David Quli. In addition, Vickie Cameron, Fleming Family & Partners directors in the firm’s asset manage- RBC Wealth Management Sirius Petroleum formerly of Walt Disney Pictures, has The wealth management group has ment business in London. Oliphant and Royal Bank of Canada’s wealth man- The independent oil developer has joined the film production team as a appointed Scott Oliphant and David Zelouf, who will join the firm in agement business has appointed Pierre appointed Ed Johnson as commercial consultant to specialise in motion pic- Zelouf as senior client relationship November, specialise in the ultra high Sigrist as a director in the private client director to advise the company on its ture development and production. To appear in CITYMOVES please email your career +44 (0)20 7092 0053 updates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com

BEST OF THE BROKERS To appear in Best of the Brokers email your research to [email protected]

ANALYSIS l Barratt Developments ANALYSIS l Vodafone 169.60 ANALYSIS l International Consolidated Airlines 93.00 120 p 174 p 1 Aug 260 p 229.70 1 Aug 1 Aug 170 250 110 166 240 100 162 230 158 90 220 19 May 8 Jun 28 Jun 18 Jul 19 May 8 Jun 28 Jun 18 Jul 18 May 8 Jun 28 Jun 18 Jul BARRATT DEVELOPMENTS VODAFONE IAG Goldman Sachs has upgraded the house builder from “neutral” to “buy” with UBS has upgraded the mobile phone group from “neutral” to “buy” with a Citigroup rates the British Airways parent “buy” with a target price of 300p. a target price of 159p. The broker has also upgraded rival Persimmon to “buy” new target price of 190p, following the firm’s agreement with partner Verizon The broker thinks IAG’s recent results were the best of all the European flag after reviewing the property sector, and now expects broadly flat new-build to pay a dividend next January. UBS says the payout is larger and earlier than carriers so far this quarter, thanks to passenger revenues rising 9.4 per cent. house prices over the next two years, thanks to low build volumes and stable it had expected, and predicts that the payments could rise from £2.8bn to While higher costs have dented earnings forecasts, Citi still expects to see unemployment. Goldman thinks Barratt’s margins will rise by two per cent a £4bn over time, pushing Vodafone’s free cash flow up to 30 per cent. The bro- fresh synergies between BA and Iberia and possibly acquisitions, with BMI year, thanks to its land bank, though returns on properties will be tougher. ker also predicts five per cent jump in earnings per share. and TAP Air Portgual seen as likely takeover candidates. FTSE has a rollercoaster day Wall Street slides as US data undoes debt rally on manufacturing

US-focused plumbing supplies reached at the weekend to cut about Europe. group Wolseley was a big blue chip $2.4 trillion from the deficit and The defence and health care sec- THELONDON faller, down 3.9 per cent as the data avoid a humiliating credit default. THENEW YORK tors, which would be subject to US raised fresh worries about the “I think the initial US debt accord budget cuts if a deal is not reached, strength of the US econonomy. news removed part of the uncertainty were among the hardest hit. The REPORT “The focus now is very much on in the market, but we still need to get REPORT iShares Dow Jones US aerospace and macroeconomic data and corporate the votes to pass it,” said Paul defence exchange traded fund fell 1.1 RITAIN’S top share index shed earnings, both of which we have plen- Mumford, senior fund manager at per cent while S&P’s healthcare 0.7 per cent yesterday after a ty of,” Campbell added, spotlighting Cavendish. HE S&P 500 fell for a sixth day index lost 1.7 per cent. rollercoaster session, with early Friday’s August US jobs report and Defence contractors were big fall- yesterday as time runs out for Healthcare stocks also fell after Bstrong gains on relief over a the UK bank’ reporting season. ers, with Mumford noting worries the government to pass a deal the Centers for Medicare & Medicaid debt deal in Washington wiped out Part-nationalised lenders Lloyds about the impact of any potential Tto avoid default and the econo- Services said on Friday that it will cut later by weak ISM data which threw Banking Group and Royal Bank of cuts in the US military budget from my showed further signs of stalling. payments to skilled nursing facilities the spotlight back on a faltering US Scotland were the top two blue chip the deficit reduction plan. Smiths The market pared losses late in the by 11 per cent. economy. fallers, down 5.0 per cent and 4.3 per Group shed 3.2 per cent, with BAE day before Congress was expected to Kindred Healthcare fell 30 per cent At the close, the FTSE 100 index cent respectively, with the duo set to Systems down three per cent, and vote on a debt deal backed by the and Skilled Healthcare lost more was down 40.76 points, or 0.7 per cent report numbers later this week. Rolls-Royce off one per cent. White House, which includes spend- than 43 per cent. at 5,774.43, having reversed from Overall, however, the UK banking Traders also pointed out that BAE ing cuts of $2.4 trillion over 10 years. The Dow Jones industrial average triple-digit session highs back above sector managed modest gains thanks and Rolls both benefited strongly last The deadline for a deal, which dropped 10.75 points, or 0.09 per the 5,900 level. to strength in global heavyweight week following well-received results, includes raising the US borrowing cent, to 12,132.49. The Standard & The UK index tracked a similar HSBC, up 2.2 per cent after it posted while a downgrade in its rating by limit, is midnight tonight. Poor’s 500 Index fell 5.34 points, or reversal on Wall Street, with the US better-than-expected first-half num- Oriel Securities also hit BAE. “It’s an on-again, off-again mar- 0.41 per cent, to 1,286.94. The Nasdaq blue chip index down one per cent by bers yesterday. Testing firm Intertek, the top FTSE ket, and it reflects the on-again, off- Composite Index lost 11.77 points, or London’s close, having opened strong- Europe’s biggest bank rose 4.8 per 100 riser, was up 3.9 per cent, and real again nature of these debt ceiling 0.43 per cent, to 2,744.61. ly higher only to be knocked by weak cent after unveiling first-half pre-tax estate group Hammerson rose 1.4 per- deliberations,” said Hugh Johnson, “Today’s trading has exposed the manufacturing data. profit of $11.5bn, and as it announced cent. chief investment officer of Hugh market. It apparently was hiding The Institute for Supply it will shed 30,000 jobs -- roughly 10 Johnson Advisors LLC in Albany, New behind the ‘debt ceiling’ curtain, but Management (ISM) said growth in the per cent of its workforce. ANALYSIS l FTSE York. now that that has been pulled back, US manufacturing sector slowed “These results look better than 5,774.43 “Investors now believe that the we find that there are other prob- 6,100 more than expected in July while new expected, underlining the attractions p 1 Aug debt limit will be raised, that the lems – namely, the economy,” said orders hit their lowest level since of HSBC’s conservative balance sheet,” 6,000 vote will be positive in the Senate Larry McMillan, president of June 2009. said Seymour Pierce analyst Bruce and positive in the House, but there’s McMillan Analysis Corp. “What would not normally be con- Packard, who reiterated his “buy” rat- 5,900 still a bit of scepticism or caution.” The S&P 500 rallied back above its sidered as a particularly major piece ing and 800 pence price target on the Stocks fell after the Institute for 200-day after dipping sharply below of data .. [caused] sentiment to turn stock. 5,800 Supply Management said the US that. The level has acted as strong on a sixpence and ruin all the hard Investors were nervously looking manufacturing sector grew at the support over the last two months work achieved by the bulls earlier in ahead to a crucial vote in the US 5,700 slowest pace in two years in July. The and the fact that S&P 500 was able to the day,” said Angus Campbell, head Congress yesterday after a White ISM report followed similarly weak rally back above it was a comfort to of sales, at Capital Spreads. House-backed agreement was 9 May 27 May 17 Jul 7 Jul 27 Jul reports from much of Asia and investors. CITYA.M. 2 AUGUST 2011 17 Wealth Management | Contracts for Difference AMERICA MAY SAIL ON THE Gold hasn’t hit the top QE3 THIS FALL DAVID MORRISON as debt remains a risk CFD MARKET STRATEGIST, GFT

E HAD a first look at UK and US second quarter Its bounce shows the GDP numbers last week. The US was a shocker, coming in at 1.3 per cent on expectations of 1.7 yellow metal is still Wper cent. Worse than that, the first quarter of 2011 and the fourth quarter of last year were both revised hot, says Philip Salter down sharply. This means the US economy was slowing even before the Japanese earthquake and tsunami. For the RESIDENT Obama’s deal on debt UK, quarter-on-quarter growth was virtually non-existent, pushed gold off its record high, but it and the depressing sub-text was that we’ve only managed bounced back sharply. Now is not the to clock up a 0.2 per cent increase in GDP over the last nine Ptime to sell, as over the foreseeable months. With base rates still at their all-time low at 0.5 per future the ongoing US and Eurozone debt cent and with the vast bulk of public spending cuts still to crises will see it break new highs. be implemented, the outlook for UK growth doesn’t look good. BOUNCING BACK The markets and ratings agencies believe that the UK On Friday, gold hit a record high of government remains committed to controlling public spend- $1,632.30/oz, but on Monday morning the ing. This should keep a lid on the budget deficit and help to yellow metal fell to $1,607.69 in response to keep borrowing costs down. The yield on 10-year gilts the belated, if largely anticipated, agree- dropped below 3 per cent last week, paying investors less ment to raise the debt ceiling and begin to than comparable US Treasuries, despite elevated headline tackle the country’s mammoth structural UK inflation levels. But while the government can take some budget deficit. However, traders were not credit, falling gilt yields also suggest that investors expect convinced, as they bought in and pushed tepid growth for some time to come. Gilts also outper- gold back up. David Jones of IG Markets formed US Treasuries as investors became increasingly rat- says despite the drop, most traders avoided tled by the inability of the White House and Congress to getting their fingers burnt, saying: “There reach a deal on the US debt ceiling. will have been a lot more pain over recent There is renewed speculation that the Monetary Policy years in trying to call the top, only to see Committee (MPC) may launch another round of quantita- the metal carry on higher.” Angus tive easing. Many believe that this would help mitigate the Campbell of London Capital Group current economic slowdown and offset the chancellor’s fis- explains that many traders have been long cal measures. The last set of MPC minutes suggested that on gold for months and years, so apart the MPC’s interest in further asset purchases has cooled from a few selling to take profits, most recently, so events this week will be watched closely. The remain long. MPC announces its rate decision on Thursday and will pro- Gold is still showing strength Picture: GETTY vide a fuller insight to its thinking when the quarterly infla- THE WESTERN FRONT tion report is released on 10 August. It’s pretty jittery on the Western front right clearest and most present dangers are only currency whose value is not being sys- The speculation over if, or more likely, when, the Federal now. Simon Smith, chief economist at found in the developed world. Elena tematically destroyed by politicians Reserve launches a third round of quantitative easing in the FXPro, thinks the agreement is not the best Kolchina, head of fixed income at remains gold. US has died down recently. The US and European debt deal for the US, adding that the issue of a Renaissance Asset Managers, says: “Today Gold’s rebound showed that traders crises have helped to drive it off the agenda for now. But US downgrade won’t go off the agenda. He the global economy is being threatened by remain unconvinced that politicians have given last week’s GDP numbers, the chance of additional points out that the $2.5 trillion of cuts is political instability in Washington.” And saved the day. Many still suggest gold is a monetary stimulus from both the Fed and the Bank of less than expected by the ratings agencies, the Eurozone’s outlook looks equally dire. bubble. However, for every gold bug crawl- England is likely to be a hot topic in the third quarter. with the remaining cuts coming before a ing around the darker recesses of the inter- committee, which only reports later in the RATIONAL EXUBERANCE net chanting apocalyptically “the end is year. Smith notes: “The past year has shown Tom Winnifrith, senior fund manager at nigh”, there is a highly respected trader bet- that Washington has always backed away t1ps, predicts gold will hit $2,100 before ting the same way. Those calling a bubble from the tough choices on government bor- Obama faces re-election in November 2012. on gold have their heads buried deep in the rowing and shunned higher taxes, so He bluntly says: “The addict has been given sand, ignoring the US and Eurozone debt unless there is a change in approach on another big fix. It is still an addict and a crises which have been decades – if not Capitol Hill, a debt downgrade is still on hopeless one at that. It’s clear that the longer – in the making. The West might the cards.” deficit is not under control.” Winnifrith turn it around – but not for a while. Until It is a sign of the times that some of the thinks in the absence of an alternative, the then gold will be the best bet in town. 18 Wealth Management CITYA.M. 2 AUGUST 2011

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$@713 65 756 =E $@713 65 756 =E & %)      !         ".       #(( '           '(#!       Don’t miss breaking  #        ")')'"*        (&&#)$         & #&!((        !.#"#!      ,       !&",$&''      news with our !""       "#'"("&       ''        $$         -&       (2(       10:30 AM EMAIL " #!&    *      !+      & '&(+     "$$&'     #"#        &&#)&         &'(# !-&''%)       &(&#         Each day we’ll cover the morning’s breaking news, (&$ &     &$        *&#"       ! &        give you current market analysis and '#'-'(!'       "#"        (&#)$        )('"       the most up-to-date financial headlines. ##         )('(  #!       # ($ !# *     #"       #"##$ $'       )$#"(56"!&      "       !#&$      "       Sign up now to ensure you ,,#"!#          &"( #!       "&  (&       ').          receive our free email. # !"''&$         "& ''         ##        &&#         + (($ &      "&#$*      #!$#(       "(''"$# #       Visit: www.CityAM.com/newsletter !        #"$ $' (&       "( #&$          (#&           $!#&"'      *!        +#& "' #"'#"2#"'#"       !)"&        &(##'      $@713 65 4165 $@713 65 4165 $@713 65 4165 $@713 65 4165 "#       !#" ('#&$        ('      '2$            #*'$'#$# #       &$'# -$      !& "#"+         ('  ",          "'%#!$#'(       '"'",        '%#*& ",       &+      !&#'#(        (')  '&       (')&#&'(        "'"    '(      '"(#"      #$(&# )!       ('! '        "  *&    '2$ ', ",      !         '"#      #& #&$      #+#"'")'         , $&#&!"     ', #&"&'     '+''!& (",     '$         $$'#           '"& (&         #!!#(' &(2&(' $.&        '!"'      $ $!#&&'"(          '#("&        #"#",!      ("'     =&#D3@<756B    C@=/A3&/B3    $&#(&"!          ( #!(          ' *& ",!   ."'     =&2/GA    73/<@3>=@/B3    )" &#!#'       #"$ )!!   )"(("# #         ##    #&C@==D3@<756B    C@=C@70=@      )"&(          )!")!'      *&.#"#!!'      #   #&C@= ;=golf for a bonding session with your client, brand at Soho and Shoreditch House mem- summer’s “Hot to Trot” pedicure and Jackson Pollock-style splashes. But or you’re bored of intervals on the treadmill, bers’ clubs as well as the spa at the group’s involves a deep pressure point foot mas- your basic luxe pedi includes massage, paintballing will get your heart racing if ultra-exclusive Babington House. But the sage given while you sip on a passion- exfoliation and polish, for £51. Crazy nail nothing else. UKPaintball have a fabulous brand is not all image: its pedicures are fruit, lychee and minty gin cocktail, art costs from £30 – see how daring you venue at London Bridge housing zones with among the best in town according to nail followed by a mint soak, paraffin wax feel when you get there. 420 Kingsland Road, names like Vietnam Village, Apocalypse buffs (pun intended). The Ultimate booties and a tip-top polish. 90 mins, £85, E8 4AA, and Selfridges. 020 7812 9889, wah- London and the Super Airfield (made up of Cowshed Pedicure ticks all the boxes, and Brown’s Hotel, 33, Albermale Street, W1S 4BP. nails.com inflatable barricades). well too. Nailwork is completed – filing, 020 7518 4009, www.rocco fortehotels.com. www.ukpaintball.co.uk cuticle-tidying, scrubbing. Then the good BASTIEN GONZALES part: a deep leg and foot massage fol- NAIL GIRLS: “SIGNATURE PEDICURE” He’s the Karl Lagerfeld of footcare: a GET GALLOPING lowed by a hydration mask foot wrap Sister-run Nail Girls have a great little (French)man so hardcore he believes pedi- Remember Bucking Bronco? If you fancy during which your neck and shoulders shop in Islington and brilliant, eye-pop- cures should be treated like trips to the toning your tum rodeo-style, the iGallop may are massaged. The more hardcore among ping colours they made themselves. dentist. His goal is “optimum mobility” – be for you. This popular abs exerciser you may want to try the Skinceuticals Better yet, the colours free from harmful involving muscular flexibility, joint mobil- swivels around underneath you while you try Fruit Acid Peel, which requires a skin chemicals (toluene, formaldehyde, DBP ity and blood circulation, and skin elastici- to stay on. Give it a go while you’re watching test the day before to make sure you and camphor), are not animal tested and ty. As for your nails, they’ll be left as ‘Stenders. Find it on Amazon or eBay. won’t react badly. The result is divinely use recyclable packaging. In the “drying “sparkling as with a lacquer” – only with- soft feet – perfect for those St Tropez lounge” you can watch a movie or just out one. Using a technique passed down VISIT THE VIRTUAL SPA nights in delicate Marc Jacobs sandals. 75 hang out while sipping a glass of fizz or from his grandmother, expect deep mas- Fancy having your dreams decoded and get- mins, £55. Look at www.cowshedonline.com to green tea. The spa is a cool hangout as sage, the use of dentist drills (or similar) for ting a daily stretch all without budging from find a location near you. much as a nail salon – just as it should dry skin removal and nails that look even your desk chair? Yes, there is such a place: be. £40 mins for 40 mins. 50 Cross Street, better without varnish than with. £110, 60 www.lhj.com/app/getcentered (it’ll keep you THE SPA AT BROWNS: “HOT TO TROT” Islington N1 2BA. 020 7359 2772, minutes. Cadogan Hotel, 75 Sloane Street, SW1X away from Facebook for half an hour, if Browns’ spa is famous for its seasonal nailgirls.co.uk/in-spa 9SG, 0776 666 3271, bastiengonzalez.com nothing else). Episode 21: Talking new business over several bottles of ‘03 Bordeaux

SIR Roderick leans across and whispers, “Are “Now, gentlemen…” And Sir Roderick, think of Emma, my fragile twins and of Noel. you trying to tell me something David?” suddenly suavity and emollience personified, I contemplate principled objections to the “Excuse me Roderick?” commences his pitch to our potential for- transaction. The company’s credit rating is “Only that desiccated scalper Carmichael eign clients over lunch in the private dining at risk. Their auditors have raised issues uses this damned place.” room of the Bensley Hotel. about off balance sheet items. The chairman “Oh,” I reply. “Actually, Sandy brought me I barely listen, although I know that the and chief executive are one and the same here,” I lie. Sir Roderick harrumphs theatri- prospective transaction could pay all of our individual. The company is too close to one cally. salaries from now until the cows come or two unsavoury regimes and in the cur- The sommelier approaches. Sir Roderick home. rent climate... has delegated the task of ordering wine to Roderick shifts from generalities to “David, perhaps you could take our me. It’s a test. I fail before I open my specifics and talks of schedules and mile- friends through some of our thoughts on mouth. “The ’03 sir? Or will it be the ’59 this stone dates. September, October and strategy.” I look up. Everyone is looking at time?” November. All I can think of are school term me. “Told you. Bloody Carmichael,” grunts Sir dates and due dates. Even my 40th birth- “Thank you Roderick. We’re delighted to Roderick. “The Lafite ’03. Two, no, four bot- day. I realise that if we undertake this have this opportunity…” I begin. CITY DAD tles Michel,” commands Sir Roderick. transaction there’s a good chance that I will City Dad will be continued next Tuesday. “Indeed sir,” replies Michel, obsequiously. not be present at the birth of my twins. I For previous episodes, see www.cityam.com WORDS BY 20 CITYA.M. 2 AUGUST 2011 Lifestyle | Restaurants TIMOTHY BARBER From hotels to hearty, classy bistros The Hotel du Vin chain has launched restaurants in Soho and Clerkenwell, and early signs are good Bistro du Vin 40 St John Street, EC1M 4DL www.bistroduvinandbar.com FOOD hhhii SERVICE hhhii ATMOSPHERE hhhii Cost per person without wine: £35

T’S hard to get excited about the name. If I didn’t know better, I’d bracket “Bistro du Vin” along with Igeneric, naff, budget chains like Bella Pasta and Café Rouge, particularly upon learning that it’s also a chain. However, I do know better. Bistro du Vin is the restaurant incarnation of Hotel du Vin, the chain of lush boutique hotels in pretty towns around the country. If you’ve ever stayed in one, you’ll know the experi- ence generally defies the common-or-gar- den dowdiness of the name. There are no Hotels du Vin in London, but the company is instead making its presence felt by opening up standalone restaurants. The first two are up and run- ning in Clerkenwell and in Soho. The the meat was – it was about 50 per cent ethos is all about local sourcing, whole- chewy fat. I’m all for local sourcing, but in FOOD & BOOZE some ingredients, down-home simplicity, honesty I’d rather you flew it in from classic French dishes and an extensive, Brazil or Timbuktu if you can’t find a bet- NEWS interesting wine list. All of which could go ter piece of beef than that in TIMOTHY BARBER either way, and some of which goes both. Aberdeenshire. First to open back in the winter months Everything else was pretty good though, was the Clerkenwell branch, on St John’s even if you do feel rather shoved away in Road. It’s not an easy location: right by the dark in much of the restaurant (and WINE DINNERS AT PALM Smithfield market, you’re surrounded by it’s a big place). The décor is fine, with Palm Restaurant, the smart American steak- plenty of topflight restaurants like St John, some lovely leather banquettes, walls house in Belgravia that’s built up quite a fol- Vinoteca and Hix Oyster & Chop House – crammed with pictures and darkwood lowing since it opened on Pont Street two among such company, it can be hard to tables and chairs, but I’ve a feeling it will years ago, is holding a series of wine tasting stand out. The previous inhabitant of the work better as a cosy escape in winter. dinners over the next year. Things kick off next site, Michelin-starred chef Bjorn Van der Downstairs in the basement there’s a pri- month with a dinner celebrating Taittinger Horst, found this out with his restaurant vate dining room called the Whisky Snug champagne on 16 September, with four spe- Eastside Inn, a fine place which neverthe- – I have a feeling this will come into its cially-matched courses plus insight and facts less closed after a year and a half. own in the colder months. Bistro du Vin: rustic Though my steak missed the mark, from the experts. The £100 price also includes The Bistro du Vin interior is based I had a satisfactory lobster bisque to chic meets there are eight different steaks to choose a welcome drinks reception. There are only 30 around the same layout that Van der Horst start off with, served with croutons and dependability. from, ranging from onglet (£12.95) to 600g places available for each monthly dinner, so installed: at the centre of the large main cheese in a rustic clay bowl, while my porterhouse (£43). You can also have your get booking. www.thepalm.com dining area is an open kitchen surrounded friend’s platter of Iberico Belotta ham – shellfish – lobster, crayfish, clams, crab – by a long counter. Here, if you so choose, served, as is the way, on a wooden chop- whacked on the Josper. WINE BY IPAD you can sit and eat while watching the ping board – made him swoon. While my The Soho Bistro du Vin, on Dean Street, With the food industry beginning to cotton on chefs battle the heat coming off the Josper bone-in rump steak didn’t impress – I is a brighter, funkier place with a similarly to the power of apps and social media technol- grill, a fashionable contraption that not almost went for steamed steak and onion hearty, fulsome menu. Crucially, though, ogy, the latest craze seems to be menus by only grills but, by some trickery or other, pudding, and wished I had – his Herdwick it’s not the same menu – if Bistro du Vin is iPad. Gordon Ramsay’s restaurants Maze and does so more efficiently, tastily and suc- lamb rump was cooked to sweet, pink per- a chain, it’s the right sort of chain: one Maze Grill have joined his Claridges dining cessfully than mere normal grills. fection and doused in a rather lovely lentil- that treats each outlet as a separate, stand- room in offering wine menus by the iPad, the The grilling quality wasn’t in doubt and-vinaigrette concoction. You can order alone restaurant. If more pop up, I’ll wel- advantage being an interface that includes with the steak I ate, though the quality of bone marrow on the side, so we did. come them, and pop along. photography, product information and other features to help you make an informed wine THREE RESTAURANTS WITH SPIN-OFF VERSIONS choice. But can you check your email on it too? BIODYNAMIC BOSI TIMOTHY BARBER Also on the wine front, French chef Claude Bosi, who has two Micheline stars at his restaurant Hibiscus, is now offering a wine list made up of 85 per cent biodynamic wines. That means wines from small, nat- ural growers, producing wine under ethical ecological condi- tions. That makes Hibiscus one of the leading restaurant for biodynamic wine in the coun- try. POLPO PIZZA EAST PORTOBELLO BOISDALE VERY BRITISH BRUNCH Soho’s popular “Venetian tapas” destination Polpo has so A West London version of the snazzy-but-casual Scottish whisky, Scottish beef, Cuban cigars and inter- Bastion of tradition Green’s far produced three offspring in remarkably short time: Shoreditch restaurant opened recently – instead of call- national jazz are a pretty good combination, particularly Restaurant and Oyster bar in Polpetto and Spuntino, both also in Soho, and Da Polpo ing it Pizza West, its owners (the Soho House Group) when they’re in such plentiful supply as they are at the St James is launching a week- in Covent Garden. They reproduce Polpo’s winning for- have called it Pizza East Portobello. Whatever, the three Boisdales. The original Boisdale of Belgravia was end brunch of kedgeree, cum- mula of delicious small plate food, perfect cocktails and relaxed, groovy atmosphere and first-rate pizza will be joined a few years ago by the City version, while the berland sausages, mash and cosy, shabby-chic interiors, while each maintains its indi- bringing in the Notting Hill masses. grand temple of good living that is Boisdale Canary bullshot cocktails (a bloody vidual appeal too. www.polpo.co.uk www.pizzaportobello.com Wharf opened earlier this year. www.boisdale.co.uk mary with beef bouillon). CITY A.M. from 1 to 9 to solve Sudoku thispuzzle. tricky numbers the all contains block 3x3 each and column row, each Place thefrom 1 numbers to 9 in each empty cell so that each SATELLITE & CABLE TERRESTRIAL    QUICK CROSSWORD M LAST ISSUE’S N DANTE NEAR ANTONYM ANKLE ACRE PETTY A 2 AUGUST 2011 SOLUTIONS S FY I OSS R BBC1 Bowls ata Arts Martial Championship Championship Greatest Cricket Greatest Football’s 3am 2am Poker Championship Two Formula Years Sports Cricket 7pm 3 SPORTS SKY 7pm 2 SPORTS SKY 7.30pm 7pm 1 SPORTS SKY otalAsia Football Arts Greatest Asia Football V. Pool of Cup World The 3.40am-6am Scroungers and Parish 1.10am 12.10am Weatherview Pianist: Concert 11.05pm 10.35pm Update Lottery National 10.25pm 10pm 9pm 8pm 7.30pm 7pm 6.30pm 6pm     N E A C 12am otalAsia Football ocrA:TeBs Bits Best The AM: Soccer prsUnlimited Sports Post Winning Live Seven at News Sports Sky h n Show One The I O:TeBgBuild Big The SOS: DIY News BBC ob City Holby 12am O NITTED I KN 2.55am LOWERS B News BBC 10pm aeBritain Fake   otalAsia Football A 2am-4am 10pm atnes B News BBC EastEnders: B odnNews London BBC inZn:Coast Zone: Sign mgn:Biga Being Imagine: nAueo Trust of Abuse An einlNews; Regional prsUnlimited Sports M UVULA EPOCH YEMEN SUDOKU rts Motocross British 12am 1.30am 9.30pm B News BBC REED AFRO T Darts 2am-4am 1am niusRa Trip Road Antiques    ie Martial Mixed 2.25am Q E I 3.30am 4am-6am A oml Two Formula etCricket Test International 1.55am 11pm O G R 8pm Football’s     Football’s COFFEE BREAK 8pm 9pm nIsland An 9pm Mixed h Sky The Test Pool. 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Zhirkov leaves as Chelsea prepare a third bid for Modric Picture: ACTION IMAGES sorry India Chelsea to to the sword bank £13m ▲ With India’s star-studded batting CRICKET line-up, Rahul Dravid aside, woefully BY JAMES GOLDMAN short of runs and a bowling attack stretched to breaking point, the for Zhirkov ENGLAND captain Andrew Strauss prospect of an England whitewash claims the nature of yesterday’s crush- looks a realistic outcome. ing 319-run win over India that put his But the ever pragmatic Strauss

▲ side within touching distance of being knows India, who now have a eight FOOTBALL ranked the best Test side on the planet, days to regroup ahead of the Edgbaston BY FRANK DALLERES showed why their stay at the summit is Test, will come back fighting, desperate destined to be a lengthy one. to show their pre-series billing was jus- CHELSEA are poised to rake in £13m Set 478 to win after England’s tail tified. by offloading versatile Russia interna- wagged for the second time in the Asked whether his team would now tional Yuri Zhirkov to ambitious match, India succumbed to an be targeting a clean sweep against Anzhi Makhachkala. onslaught of high quality pace bowling India, who have been ranked No1 since The move would help balance the led by Tim Bresnan, who had earlier December 2009, Strauss said: “We don’t books and free up squad space as the fallen 10 short of a maiden Test century look at it like that. All we’re looking to west Londoners prepare a third bid in England’s total of 544 all out. do is turn up at Edgbaston to try to win thought to be around £30m for Such a convincing win, one that puts that Test match. Tottenham’s Luka Modric. England 2-0 ahead in a four Test series “We’ve had to work very hard to win Spurs have resisted Chelsea’s £22m which they must win by two clear these two and we don’t expect any dif- and £27m offers for the Croatia play- matches to leapfrog India in the ICC ferent from that.” maker, but their resolve to keep him rankings, looked unlikely at best when Hard work on the pitch is likely to be appears to be waning. they were 124-8 on day one. mirrored by equally strenuous tasks off Assistant manager Kevin Bond yes- But the battling qualities exhibited it, with Strauss now facing a series of terday conceded Modric might leave, by every member of his side gives selection dilemmas following despite chairman Daniel Levy previ- Strauss confidence that England are Bresnan’s masterclass with the ball. ously insisting his transfer was not up here to stay as the world’s premier Test The Yorkshireman finished with Test for discussion. force. best figures of 5 for 48, while man of “You don’t want to lose your best He said: “One of the real measures of the match Stuart Broad picked up the players and he certainly is one of our a good side is whether they are able to key wicket of Dravid early on and best players and we desperately don’t come back from difficult circum- James Anderson chipped in with a want to lose him, but I think every- stances. Most sides are pretty good magic delivery to disturb VVS Laxman’s body has got a price,” said Bond. when they’ve got everything their own furniture, before Sachin Tendulkar’s “Although the chairman’s adamant way. rearguard action was ended on 56 he doesn’t want to sell him, if some- “But in the last two Test matches when he padded up to the Lancastrian. body came along and the money we’ve had to dig pretty deep, and it With Chris Tremlett, previously turns your head and he did go then gives me a lot of pride to see guys put- England’s most impressive bowler this Bresnan (centre) we’d have to get on with it.” ting their hands up and delivering summer, likely to be fit once more by took Test best fig- Zhirkov has failed to establish him- when it matters. the time the two teams meet again in ures of 5 for 48 self as a first choice since his £17m “It also fills me with a lot of confi- Birmingham, Strauss now has the envi- move from CSKA Moscow in 2009 and dence for the future that we can go on able conundrum of selecting from an Picture: GETTY is in the final year of his contract. and become a better side.” embarrassment of riches. Analysis: Are Red Bull really in crisis? Ashton laughs off kit row as Johnson JENSON BUTTON and McLaren’s win in been overplayed? McLaren may have Hungary on Sunday means Red Bull, outscored them at the weekend, but it previously so dominant with six victories was only the second time all year, with axes Worsley and Strettle from squad in the first eight races of the year, have Red Bull’s Sebastian Vettel and Mark since failed to win in three (below left). Webber still consistently amassing But has the notion of their deterioration points (below right). ▲ RUGBY UNION pyjamas it wouldn’t bother me.” ENGLAND | REVISED TRAINING SQUAD The kit may be World Cup-bound, Race by race l 2011 Red Bull v McLaren LAST 10 WINNERS BY FRANK DALLERES but five players look to have missed ENGLAND wing Chris Ashton has out after Johnson trimmed his squad Forwards D Cole, A Corbisiero, P Doran- Jenson Button McLaren 40 pts Red Bull 35 defended the team’s New to 40. Wasps forward Joe Jones, T Payne, A Sheridan, M Stevens, D Lewis Hamilton McLaren 30 Zealand-baiting black away Worsley, a 2003 World Cup Wilson, D Hartley, L Mears, S Thompson, Fernando Alonso Ferrari 25 kit, insisting players don’t winner, and Saracens wing M Botha, L Deacon, C Lawes, T Palmer, S 20 McLaren care what colour they wear. David Strettle were the Sebastian Vettel Red Bull 15 Martin Johnson’s men biggest casualties. Shaw, T Croft, N Easter, H Fourie, J Jenson Button McLaren Aus Mal Chi Tur Spa Mon Can Eur Bri Ger Hun will debut the contro- Gloucester back Haskell, L Moody, C Robshaw, T Wood versial change strip, James Simpson-Daniel Backs D Armitage, B Foden, C Ashton, M Sebastian Vettel Red Bull which has riled the and Leicester pair Cueto, U Monye, C Sharples, M Banahan, Sebastian Vettel Red Bull likes of All Black great George Chuter and Jonah Lomu, against Thomas Waldrom R Flutey, S Hape, M Tindall, M Tuilagi, T Sebastian Vettel Red Bull Wales on Saturday. were also axed. Flood, C Hodgson, J Wilkinson, D Care, J Lewis Hamilton McLaren Ashton (far right) But Leicester centre Simpson, R Wigglesworth, B Youngs said: “You are more Manu Tuilagi and Sebastian Vettel Red Bull worried about playing Gloucester wing Pre-World Cup fixtures Wales (H), 6 Sebastian Vettel Red Bull for your country than Charlie Sharples are August; Wales (A), 13 August; Ireland what colour kit you’re still in contention for (A), 27 August wearing. If we played in the final 30-man party. 23

Options are Broad Li reaps £45m from historic slam title ▲ TENNIS toric defeat of Francesca Schiavone in the Paris final made her Asia’s first CHINA DALEYS | FAR EAST SPORT STARS FRENCH OPEN champion Li Na has grand slam champion and was and plentiful after illustrated the huge commercial watched by an estimated audience of Liu Xiang Hurdler is first Chinese athlete value of Chinese athletes by becom- 116m in China alone. to achieve triple crown of world champi- ing the world’s second highest earn- She has since agreed seven endorse- on, Olympic champion and world record ing sportswoman off the back of her ments lasting three years each that first grand slam title. are worth a minimum total of £8.5m Yi Jianlian Basketball star has played in Trent Bridge romp Li has signed sponsorship contracts annually and up to £15m, depending NBA for Milwaukee Bucks, New Jersey worth up to £45m since her break- on performance. Nets and Washington Wizards through triumph at Roland Garros in If Li maximises those contracts she Liang Wen-Chong Only Chinese golfer in attack without harming the depth of June and is now second only to fellow is likely to overtake Sharapova, who is their batting, too much. tennis player Maria Sharapova in the thought to earn around £15m a year world’s top 100 and the first to make cut For me, Tremlett has to play if fit and earning stakes. The 29-year-old’s his- in prize money and sponsorship. at a Major, The Open in 2008 it’s impossible to drop the likeable Bresnan after he scored 90 runs and took five wickets. Losing someone of Trott’s ability could never be considered anything but a blow, but on this occasion his unavail- CRICKET COMMENT ability could be viewed as a blessing in RALLY FINLAND 2011. YOU CAN’T CONTROL ANDY LLOYD disguise. BIG-HITTERS THE ELEMENTS, BUT YOU CAN WIN THE RACE. HE RANKINGS may not reflect it As wonderful as England have been, it’s yet, but there’s no doubting this slightly disappointing that a series England side are the best Test which promised so much has thus far Tteam on the planet right now. been an extremely one-sided affair. That India were steamrollered at Coach Duncan Fletcher, who must be Trent Bridge yesterday afternoon came casting his mind back to 2006 when his as no surprise. The tourists had their undercooked England side were bat- opportunity when they won what tered in Australia, and captain looked like a vital toss and had England Mahendra Singh Dhoni have a lot of eight down early on. soul searching to do but I wouldn’t But Stuart Broad’s heroics with the write them out of this series just yet. bat and then with ball turned the By the time the sides reconvene at momentum in England’s favour and Edgbaston, another ground at which when Andrew Strauss’s side get the the ball is likely to swing, India could scent of blood these days, they’re as well have three of their big-hitters back. ruthless as any of the great Australian The return of Virender Sehwag, the or West Indies sides of old. world’s most destructive opening bats- man, would give the tourists a major CAREER-DEFINING lift as would the solidity Gautam In many ways this could prove a defin- Gambhir usually provides, while ing match in Broad’s career, with his Zaheer Khan doubles India’s chances of status as a genuine Test all-rounder now taking 20 wickets. solidified. A slight adjustment to his length has transformed the threat he SCHOOLBOY carries as a bowler, and the confidence It would be remiss, of course, not to he’s garnered from the wickets he’s comment on the Ian Bell run out inci- taken has allowed him to bat with dent which dominated the third day’s greater freedom. play. With Broad back to his best it will be It was an unforgivable, schoolboy interesting to see how brave England error from Bell and had it been the are with their selection ahead of the last day of an Ashes deciding Test third Test. Andy Flower has been very there’s no way on earth he would reluctant to err from a four-man bowl- have been given another life. ing attack up to now. Thankfully, it didn’t have a major But Jonathan Trott’s injury, Tim impact on the game – the stuffing Bresnan’s all-round display up at had already been knocked out of Nottingham and Chris Tremlett’s likely India – and Dhoni’s decision meant return to fitness presents England with the potential for some unsavoury the opportunity to field a five-man scenes was immediately eradicated.

SPORT | IN BRIEF

Newcastle release Barton Wales sweat over skipper Rees FOOTBALL: Newcastle United announced RUGBY UNION: Wales are hopeful their yesterday that Joey Barton will leave the captain Matthew Rees will be fit to lead club on a free transfer, despite having a his country at next month’s World Cup year remaining on his contract. The club despite being ruled out of Saturday’s were expected sell the 28-year-old this game warm-up against England with a summer but no offers were tabled. neck injury. Results Congratulations to team Citroën, winners of Rally Finland 2011. :I@:BDfi^Xe.'#BG (#MXc\i\e^X*C`m\igffc*#N\Xc[jkfe\):i\n\*#`cc`e^_Xd'#K_liifZb(;X^I\[,% the weather or terrain. ;iXm`[((.#PlmiXaJ`e^_-)#MMJCXodXe,+2J:A9ifX[ K`d\ef$KiXm\i JgX Yk;fd`e`ZK_`\d 8lk -$+-$)#GXYcf Experience the performance at www.michelin.co.uk/experience-the-performance NXin`Zbj_`i\*'$( ((%'fm\ij %;`m`j`feKnf Cfi[Ëj 1 8e[laXi JgX YkClbXjIfjfc :q\ *$--$*-$*#G_`c`gg ;\iYpj_`i\),) -.%)fm\ij2NA;lijkfe-(#>DJd`k_,.# Bf_cjZ_i\`Y\i >\i YkK_fdXjDljk\i 8lk -$*-$'#8cY\ik I8N_`k\c\p,-2KADlikX^_+$+, Xe[)+* /0%,fm\ij % DfekXe\j JgX YkAXm`\iDXik` JgX -$*-$)#8e[i\Xj D`[[c\j\o+', ()-%'fm\ij2;ADXcXe(+*#J;IfYjfe0+# J\gg` @kX Yk;\e`j@jkfd`e LqY -$)-$)% J8E\ndXe,02AC:cXi\+$-0 Xe[0($* )(%*fm\ij % NK8DYi YkD\cXe`\Fl[`e LJ8 -$'-$(% email [email protected] Your Global MT4 Forex Broker

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