BUSINESS WITH PERSONALITY Issue 1,483 Thursday 6 October 2011 www.cityam.com FREE CAMERON’S U-TURN STEVE JOBS CRITICISM PROMPTS 1955-2011 A HASTY REWRITE P5

Steve Jobs has died aged 56 following a long illness

Picture: REX ▲ TECHNOLOGY perfecting the best design and technology In his emotional letter of resignation, BY ALISON LOCK in its class. Jobs said he saw Apple’s “brightest and From founding Apple in 1976, he saw most innovative” days ahead. STEVE Jobs, Apple’s celebrated founder, the company go virtually bankrupt after US President Barack Obama expressed has died aged 56. he was forced out in a boardroom struggle his condolences, thanking Jobs “for the Jobs passed away late last night, just six in 1984. His return in 1996 was wildly work you make possible every day – weeks after he stepped down as the firm’s transformative, leading to him launching including ours.” chief executive. an unprecedented string of market-chang- Bill Gates, founder of Microsoft, said he Apple marked his passing with a tribute ing products including the iPod, iPhone would “miss Steve immensely”. on its website to a “visionary and creative and iPad. “The world rarely sees someone who has genius” and “an amazing human being”. The unparalleled success guided Apple had the profound impact Steve has had, “Steve’s brilliance, passion and energy to the summit of the S&P 500 and saw the effects of which will be felt for many were the source of countless innovations Apple briefly pass Exxon Mobil to join an generations to come. For those of us lucky that enrich and improve all of our lives,” exclusive club of just ten firms to reach enough to get to work with him, it’s been Apple’s board said in a separate statement. the top of the index, alongside the likes of an insanely great honour,” Gates said. “The world is immeasurably better Ford, General Electric and Microsoft. Jobs’ family said last night: “In his pub- because of Steve. His greatest love was for Apple was not Jobs’ only contribution to lic life, Steve was known as a visionary; in his wife, Laurene, and his family. Our the creative industries – he also founded his private life, he cherished his family. hearts go out to them and to all who were digital animation studio Pixar, which had “We are grateful for the support and touched by his extraordinary gifts.” huge success with films such as Toy Story kindness of those who share our feelings Jobs will be remembered as one of the and Finding Nemo. After Disney bought for Steve. We know many of you will most transformational business leaders in Pixar in 2006, Jobs took a seat on its board. mourn with us, and we ask that you recent times. He fought a long-running battle with respect our privacy during our time of Renowned for his forensic approach to pancreatic cancer, which forced him to grief.” designing and building each product and take two leaves of absence from Apple’s his hard-ball approach to suppliers and day-to-day running before he stepped back Certified Distribution developers, he was lauded for his genius in to the chairman’s seat in August. 01/08/11 till 28/08/11 is 92,745

FTSE 100 ▲ 5,102.17 +157.73 DOW ▲ 10,939.95 +131.24 NASDAQ ▲ 2,460.51 +55.69 £/$ 1.54 unc £/¤ 1.16 unc ¤/$ 1.33 unc 2 News CITYA.M. 6 OCTOBER 2011 New stress test Obsessing over the to cover banks’ UK’s GDP numbers bond holdings is a waste of time ▲ MARKETS EUROPE’S banking regulator began to look again at its tests of the strength of believed that GDP was up by a strong the region’s banks yesterday in two- 2.9 per cent year on year. The new data day crisis talks over the collapse of show GDP in that quarter rocketing a Franco-Belgian lender Dexia. bubble-like 4.1 per cent. Consumer Eurozone finance ministers asked spending has been revised up during the European Banking Authority to the boom years and cut since. reassess how well the banks would sur- So what are we to make of yester- vive a write-down in the value of their day’s cut to GDP growth in recent holdings of Eurozone sovereign debt EDITOR’S LETTER quarters, leaving Britain with a con- based on current market value. traction of 0.5 per cent in the fourth The EBA drew stinging criticism for ALLISTER HEATH quarter, growth of 0.4 per cent in the its stress tests in July, which showed 90 first quarter and 0.1 per cent in the per cent of Eurozone banks strongly IT is astonishing that anybody in the second? It is clear from today’s revolu- capitalised in a number of crisis sce- markets, think-tanks or politics still tionary changes that these figures narios, but did not test them for a col- takes the Office for National Statistics’ could easily be massively revised in lapse in the value of government debt. growth figures seriously. Yesterday’s the years to come. The huge attention It is now scrambling to rectify that, sweeping rewriting of history by our given to them by politicians and the and will model a writedown in the official number-crunchers shows yet media yesterday was misguided. They value of the debt from all peripheral again the stupidity of those who can’t be used to determine policy. As it Eurozone states to show how far banks obsess about whether growth is com- happens, I tend to believe that the sec- are really short of capital. It will pro- ing in at 0.1 or 0.2 per cent. ond quarter figures are roughly cor- duce a country-by-country breakdown The ONS has suddenly discovered rect – other, more accurate indicators of the level of new capital banks would that it missed tens of billions of suggest growth has ground to a halt. need if Greek bonds were written pounds worth of output during the And that is precisely the point: those down to current market values, the bubble. The cumulative gain in GDP of us trying to determine what is actu- Financial Times reported. from the first quarter of 2001 to the ally happening to the economy should The EBA’s move came as Allianz set fourth quarter of 2007 has been follow indicators that are much more out economic forecasts for 2012 based revised up from 17.9 per cent to 21.1 reliable than the useless GDP stats. My on the Eurozone shrinking as indebt- per cent. The ONS now believes GDP favourite include private sector ed nations left the union. It said the fell 7.1 per cent (not 6.4 per cent) dur- employment, the money supply, cor- shock could wipe three per cent off ing the recession (which ended in the porate bank deposits and purchasing German GDP and cost it a million jobs. Angela Merkel with Jose Manuel Barroso in Brussels yesterday Picture: REUTERS third quarter of 2009, three months managers indices. But whatever you earlier). Last but not least, the econo- do, stop obsessing with tiny, utterly my has bounced back 2.7 per cent unreliable and entirely meaningless since the recession, not 2.2 per cent. changes in quarterly GDP. The upshot is that economy is now More cash left thought to be 4.4 per cent smaller CABLE RIGHT FOR ONCE than it was at its peak, a larger black EVERY little helps. Vince Cable’s busi- Merkel backs hole which implies a larger structural ness department plans to make 36,000 deficit and a bigger problem for small companies exempt from having at the ECB amid George Osborne. to audit their accounts – a process These are massive changes. While that currently costs almost £10,000 the big picture may not have varied per year. It will also allow 83,000 sub- downgrades entirely (we still suffered from a mas- sidiaries to opt out. plan to prop up sive bubble that went pop), virtually While it doesn’t go that far, this is

all of the detailed analysis that has nevertheless one of the few genuine ▲ been written about the economy over deregulatory measures taken by a gov- BANKING the past few years is now worthless. ernment that has otherwise contin- Far worse is that the authorities were ued to add extra red tape (contrary to AS GREEK protestors and strikers using wrong numbers that under- what it claims). For once, therefore, Eurozone banks returned to the streets of Athens in played the scale of the bubble when Vince Cable deserves to be congratu- fresh clashes with police yesterday taking crucial decisions. Take the fig- lated. I can hardly believe I have just Eurozone lenders fled to safety, using ures for the fourth quarter of 2007, written this – but I mean it. the European Central Bank as a safe highlighted by Citigroup: when the [email protected] house for increasing amounts of cash ONS first published the data, it Follow me on Twitter: @allisterheath ▲ BANKING she added. on Tuesday night, figures yesterday Her comments came as France’s showed. GERMAN chancellor Angela Merkel finance minister François Baroin Overnight deposits at the ECB rose WHAT THE OTHER PAPERS said she would support moves to admitted for the first time that private to €213bn from €209bn on Monday, plough fresh capital into the sector lenders to Greece may have to the highest volume since July 2010, as SAY THIS MORNING Eurozone’s banks if they had to write take bigger haircuts on their bond fear over another banking crisis grew. 7th Floor, Centurion House, off large chunks of their holdings of holdings than previously agreed. The ECB pays 0.75 per cent interest 24 Monument Street, London, EC3R 8AJ government debt yesterday. European banks are bearing the on overnight deposits compared with Merkel backed the move to inject brunt of market fears over the evapo- 0.997 per cent available in the money Tel: 020 7015 1200 Fax: 020 7283 5334 BRISTOL DEAL GOES WITH THE FLOW Email: [email protected] www.c ityam.com more state funding into the region’s rating value of their bond holdings, markets. Borrowing from the ECB’s so- Bristol Water yesterday became the banks to restore confidence in them as with some such as Franco-Belgian called “emergency window” edged up Editorial latest British utility company to they struggle to contain losses on bank Dexia pushed to collapse to €1.36bn compared to €1.32bn the Editor Allister Heath change hands. The West Country the value of their vast sovereign by investor concerns over its day before. Deputy Editor David Hellier water company, which supplies 1.1m debt holdings. sovereign debt exposure. Meanwhile, rating agency Moody’s News Editor David Crow homes in and around Bristol, has had “The German government But German bank execu- ramped up its wholesale downgrade of Acting Night Editor Marion Dakers 70 per cent of its shares sold to stands ready to implement tives expressed concern at debts related to Italy, following its rat- Business Features Editor Marc Sidwell Capstone Infrastructure, an asset such a capitalisation of the the surprise announce- ings cut for the country earlier in the Lifestyle Editor Zoe St rimpel investment fund that used to operate banks if it is needed,” Merkel ment from finance minis- week. The debt downgrades will make Sports Editor Frank Dalleres as the Canadian energy and utilities said at a press conference ter Wolfgang Schaeuble it more expensive for the firms to bor- Art Director Jo Simpson arm of Macquarie. in Brussels following (pictured) that Berlin could row in the market. Pictures Alice Hepple fresh talks, adding reactivate measures used at Among the slew of downgrades yes- that European the height of the banking terday were UniCredit, whose long- Commercial leaders would crisis in 2008, such as term debt was cut from Aa3 to A2, oil Sales Director Jeremy Slattery HEDGE FUND BEARS WIN BETS IN EURO address the the SoFFin rescue firm Eni was cut from Aa3 to A1, Poste Commercial Director Harry Owen CRISIS issue when fund, to prevent Italiane from Aa2 to A2 and Intesa Head of Distribution Nick Owen Bearish hedge fund managers have they meet another crisis. Sanpaolo from Aa3 to A2. reaped some of their biggest gains later this Germany’s bank- Moody’s said on Tuesday that Italy’s Distribution helpline since the collapse of Lehman Brothers month. ing sector issued a high level of debt coupled with the If you have any comments about the distribution amid the market turmoil triggered by “We need statement saying erosion of confidence in the wholesale of City A.M. Please ring 0207 015 1230, or email [email protected] the eurozone debt crisis. August and criteria. We are there was no need financial markets had led to the down- September have seen funds run by under pressure to revive such meas- grade of the sovereign’s debt from Aa2 industry giants reap strong gains as of time. I think ures, because “This to A2. It also warned yesterday that Printed by Newsfa x Internat ional, Beam Reach 5 Business Park, stock markets around the world have we need to take a is not the current struggling bank Dexia was in line for Marsh Way, Rainham, Essex, RM13 8RS plunged and peers languished. decision quickly,” scenario.” downgrades. CITYA.M. 6 OCTOBER 2011 News 3 Plan for Dexia IMF baffled by calls to rescue fund is enter bond market as taking shape ▲ BANKING CUSTOMERS pulled millions of euros from troubled Dexia yesterday but the fears of a slump grow Franco-Belgian bank avoided a full- scale run on deposits as a bailout appeared imminent. Belgian customers withdrew € ▲ around 300m (£258.88bn) from Dexia EUROZONE CRISIS he suggested it could intervene to buy countries, and cannot use these accounts, excluding online transac- sovereign bonds from Italy and Spain resources to intervene in bond mar- tions. The Belgian arm of the bank Greece saw more bloody clashes Picture: GETTY THE INTERNATIONAL Monetary Fund to ease the debt crisis – only to retract kets directly,” he said, adding that the holds €80bn in deposits. has urged Europe to shore up its banks the suggestion several hours later. IMF had no additional requests cur- An emergency package is set to be with up an injection of up to €200bn He said the IMF could invest along- rently for financial support. announced today after political lead- (£172.6bn) amid fears a freeze in lend- side the EFSF and was “ready to play It came as concerns rose over the ers in both France and Belgium repeat- ing will trigger another recession. that role”, which would reassure to exposure of French bans to the strick- ed pledged Dexia would be saved. Yesterday Antonio Borges (pic- investors in troubled sovereign states. en Greek economy and the A rescue could see the Belgian arm tured), the IMF’s Europe director, said “Any investment we would make in IMF warned of the nationalised and the French munici- the move would help to restore confi- Spain or Italy would be based on prospects of another pal funding arm broken off and com- dence across the continent. full confidence that these coun- recession in Europe. bined with French state bank Caisse “We are talking about figures of tries are on the right track -- that The Washington- des Depots and Banque Postale, the between €100bn and €200bn, which they are solvent and they are tak- based lender said banking arm of France’s post office. in our view is very, very small com- ing all the measures they growth across Europe Yves Leterme, Belgium’s caretaker pared to the size of the European cap- should.” would fall to 2.3 per prime minister, said nationalisation of ital markets and compared to the Hours later, however, Borges cent this year and 1.8 the banking activities, including a resources of the new, enhanced issued a terse statement saying he per cent in 2012. large retail operation, was under con- European Financial Stability Fund.” wanted to “be clear about some Meanwhile the gov- sideration. He also said the planned The €440bn EFSF, which was set up earlier comments” and ernment of Spain predict- guarantees did not pose a risk for his in May last year and used to bail out talked down the ed its economy would grow country and that impact of nationali- Ireland and Portugal, will be allowed prospects of the in the third and fourth sation would be “quite limited”. to lend governments money to recap- IMF taking a quarters of this year, Dexia needs a bailout, three years italise banks, after its new powers greater role in despite the coun- after it received €6.4bn from the gov- have been ratified by the govern- the crisis. try having the ernments of Belgium, France and ments of Eurozone members. “The fund highest unem- Luxembourg, because of its exposure Borges threw the IMF into confu- can only lend ployment rate to Greek debt and trouble accessing Plans for Dexia’s bailout took shape sion later in the day, however, when its resources to in Europe. wholesale funds.

CITYA.M. 6 OCTOBER 2011 News 5

VIEWS ON CONSUMER CREDIT: THE UK’S NOT SO JOINED-UP GOVERNMENT CITY VIEWS: SHOULD PEOPLE BE ENCOURAGED TO REDUCE PERSONAL DEBT? Interviews by Phoebe Torrance

PETER GOAD | LLOYDS DAVE PHILLIPS | JRP UNDERWRITING

“I am not sure that it would help “It is not up to the government if we anyway to be honest, as banks make don’t pay our own personal debt. It a lot of their money through people would have been wrong for Cameron to not paying credit card debts. It is say what was planned, because if very impractical.” people could pay their debt, they would!”

David Cameron praised households for reduc- "I have set the Treasury to work on ways to RICHARD COLEMAN | H CLARKSON & CO LTD ing debts, saying that was how to fight a debt inject money directly into small businesses," crisis. Earlier drafts of the speech urged con- said George Osborne. Despite his best efforts, sumers to pay credit cards off to give the lending to companies fell this year, a situation “Debt accumulates, whether it is the country’s debt or individuals’ debt, and it has to economy a lower-debt foundation for growth. the chancellor wants to reverse. be paid at some point. If the debt becomes too much and you cannot pay, then the rate would increase and would be onerous.” * These views are those of the individuals above and not necessarily those of their company.

The monetary policy committee, chaired by Rising consumer debt forms a key plank in the Mervyn King, is worried that consumer spend- office for budget responsibility’s forecasts. ing is low. Interest rates are low to encourage Led by Robert Chote, the OBR believes borrowing and spending, in an effort to stimu- growth will be supported by £566bn extra late the economy through debt. consumer borrowing between 2011 and 2015. PM hit by row over debts on credit cards

CONSERVATIVE speech. The British Retail Consortium’s CONFERENCE Richard Dodd said: BY DAVID CROW & TIM WALLACE “Consumers have reined in their spending already, DAVID CAMERON was with 32 per cent telling forced to hastily redraft “The only way our surveys that they parts of his conference out of a debt have no spare cash. speech yesterday, after he “Low spending is an was widely criticised for crisis is to deal indicator of how tough pre-released extracts that conditions are, and a called on Britons to repay with your debts. contributor to the econ- their credit card debts. omy’s weakness,” he “The only way out of this That means added crisis is to deal with your households – all The row overshad- debts. That means house- owed the rest of holds – all of us – paying off of us – paying Cameron’s big speech, the credit card and store which was supposed card bills,” the Prime off the credit to instil a sense of Minister had planned to say, “can-do” confidence according to extracts given to card and store while still being real- journalists ahead of the card bills.” istic about the scale speech. of the economic The extracts prompted an “The only way challenge facing outcry from retailers, who said the UK. the remarks could depress con- out of a debt Cameron said sumer spending, already in the crisis is to deal that the 2008-9 doldrums, in the run-up to the slump was “no nor- all-important Christmas shop- with your mal recession” and ping period. that growth had not Cameron’s speechwriters debts. That’s returned as quickly responded by altering the as people had hoped. final speech so the Prime why households But he called on the Minister merely observed are paying electorate to “reject that households were pessimism” in favour already repaying credit, down their of an “effort and rather than telling them to appetite” that could do so. An aide said that credit card and “turn this ship Cameron had never intend- around”. ed to “lecture” people in his store card bills.” THE FORUM: P25 Why trade FX anywhere else?

In a market with many accolades, we get the ones that matter - this year CitiFX Pro have received a major industry award from FX Week.

CitiFX Pro is available to professional individual traders and small to mid-sized institutions. Trading with CitiFX Pro means you have a direct relationship with a leading FX brand, institutional-grade research and commentary, special events with CitiFX strategists, tight spreads and more.

It’s no wonder traders have asked us ‘Why trade FX anywhere else?’

Trading foreign exchange involves a high degree of risk and losses can exceed your entire investment. CitiFX Pro is only available to persons in the UK who qualify as Professional Clients. CitiFX® Pro GET YOUR FREE TRIAL AT >> WWW.CITIFXPRO.COM Contact us on: 0800 279 4772

© Citigroup, Inc., 2011. All rights reserved. Citi, Citi and Arc Design and CitiFX Pro are trademarks and service marks of Citigroup Inc. and used and/or registered throughout the world. CitiFX Pro offers trading on margin. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should ensure that you understand the risks and can withstand the losses and that you seek advice from your advisors as appropriate, please see www. citifxpro.com for further details. This information is directed only at persons in the UK who qualify as Professional Clients (as defi ned in the rules of the Financial Services Authority) and CitiFX Pro is only available to Professional Clients in the UK. Classifi cation as a Professional Client may require an assessment of the person’s experience and knowledge (in roll- ing spot or similar instruments or markets). CitiFX Pro is a service offered to you by Citibank International plc which is authorized and regulated by the Financial Services Authority. Registered Offi ce: Canada Square, Canary Wharf, London E14 5LB. VAT registration number GB 429 625 629. The main business of Citibank International plc is banking and securities business. It is entered on the FSA register under number 122342. CITYA.M. 6 OCTOBER 2011 News 7

ANALYSIS l Cumulative change in real GDP 25 % ONS: We got GDP figures 20 Old Data New Data 15

10 wrong by tens of billions 5 Sources: ONS and Citi Investment Research and Analysis 0 2001 2003 2005 2007 2009 2011

▲ A deeper recession has also been Since then, the economy has grown UK ECONOMY ANALYSIS l Cumulative change in real consumer spending revealed, with the fall in real GDP now by 2.7 per cent, rather than the 2.2 per BY TIM WALLACE 20 standing at 7.1 per cent rather than cent previously calculated, it said. % THE BOOM was bigger and the bust earlier estimates of 6.4 per cent. Growth for the second quarter of was sharper than previously thought, Growth in 2007 was revised up the 2011 has been revised down from 0.2 15 according to major revisions to the last most, shifting from 2.7 per cent to 3.5; per cent to 0.1 per cent. decade’s GDP figures, the Office for 2008’s contraction now stands at -1.1 Changing from the retail price 10 Old Data National Statistics (ONS) said yesterday. per cent, rather than -0.1 -- the largest index measure of inflation to the con- New Data Previously, figures showed cumula- annual downward shift in the data. sumer price index, which is usually 5 tive economic growth of 17.9 per cent The ONS said the recession was lower, was a major cause of the revi- Sources: ONS and Citi Investment Research and Analysis from 2001 to the end of 2007. That has shorter, however, with the decline end- sions. In 2003, this change cut the GDP 0 been revised up to 21.1 per cent. ing in 2009’s third, not fourth, quarter. deflator used by 0.8 percentage points. 2001 2003 2005 2007 2009 2011 NEWS | IN BRIEF

Marriott spurred on by profits EU sends bourse deal objections Marriott International’s third-quarter Deutsche Boerse AG and NYSE Euronext profit beat market expectations as received a document of more than 130 uncertainty in the global economy failed pages yesterday outlining the European to put a dent in corporate travel. The Union's specific concerns over the company also gave investors their first German exchange's $9bn deal to buy its read of demand into 2012, saying earn- US-based counterpart. The "statement of ings could total $1.48 to $1.68 a share objections" from EU antitrust regulators assuming worldwide systemwide rev- sends the companies to the negotiating enue per available room (RevPAR) table where they may discuss conces- growth of thre to seven per cent. sions to seal their deal.

+      (,$ $#$# !('#+ $&,$& QDEVRAS "A`ID 8TTXXTS + HAW BEES EQECXED AW XHE XH (TVD )AcTV TF XHE !IXc TF (TSDTS FTQQTaISG AS EQECXITS AX XHE %YIQDHAQQ TS )TSDAc( &E XAPEW TFFICE TS $$ 0T`ERBEV ASD aIQQ aTVP aIXH 2TQICc !HAIVRAS 5XYAVX $VAWEV XT UVTRTXE XHE !IXc ASD XHE 7'dW FISASCIAQ WEV`ICEW( +#+) #+ ( ( ) !!! +"$)!'# $$!-'$"# !#)#"$& %YIQDHAQQ 5CHTTQ TF )YWIC aAVDaISSISG ST`EQIWXW ASD "VARAdW QAXEWX UVTDYCXITS AX UTEXW DAR $TYQDW ASD XHE 5IQP 5XVEEX 6HEAXVE QTTPW AX &EQES "YSRTVE VEAD EbXVACXW XHE VTQQEVCTAWXEV RAVVIAGEW TF FVTR XHEIV aTVP DYVISG A 3  HIGH WTCIEXc 0Ea 9TVPEVW IS XHE AX AVBICAS (IBVAVc TS $ $*W( TTP XICPEXW FTV  1CXTBEV AX (*UR( TTP  3$  $ 1CXTBEV5 AX XICPEXW AX    TV CAQQ     TV CAQQ     !! #!!$$$! '/ 0AXITSAQ !HTCTQAXE 8EEP IW CEQEBVAXED AX XHE !IXc TF (TSDTSdW (EADESHAQQ )AVPEX #! FVTR $$AR  UR FVTR $* XT $ 1CXTBEV( $4##  RTVE DEXAIQW FVTR    

( (,#+' #$#$&'( +++  (,$!$#$# $* ) ''$(

($& '')%%! ,( (,$ $#$#

CITYA.M. 6 OCTOBER 2011 News 9 Merrill broking Cable could star Fraser set to step down

cut audit red ▲ CAPITAL MARKETS SIMON Fraser, one of the broking stars at Bank of America Merrill Lynch, is retiring from the City at the end of the tape for firms year. The bank has not yet made an offi- cial announcement but Fraser’s clients, which include Man, Meggitt and Capital Shopping Centres, have all ▲ POLITICS £600m a year in accounting charges. been informed. BY ALISON LOCK Vince Cable’s Department for Peter Wood has hired banks and could float esure next year Picture:REUTERS The strong broking business at the Business, Innovation and Skills is firm will be headed by Mark Astaire, ALMOST 120,000 UK businesses will no spearheading the changes in the face the former Hoare Govett broker who is longer have to fund expensive and of growing demands to support busi- currently co-head of the team. time-consuming audits from next ness and kick-start growth. Banks hired as first stage year, the government will say today, as Edward Davey, business minister for it unveils new plans to cut red tape in corporate governance, said: “The pro- a bid to boost growth. posals we’ve published today are UBS purges top The government plans to make aimed at removing EU gold plating in esure’s London listing 36,000 small companies exempt from and freeing up enterprise, which ulti- having to audit their accounts – a mately benefits the whole UK econo- staff after loss

process that currently costs the aver- my and will help put us on the path to ▲ age firm almost £10,000 – by easing long-term, sustainable growth.” INSURANCE The choice of bank advisers will the criteria by which they are defined Business groups are expected to wel- BY DAVID HELLIER come as a blow to Barclays Capital, ▲ BANKING as small. come the lifting of the rules after which threw plenty of effort into win- A further 83,000 UK businesses heaping pressure on the government THE INSURANCE tycoon Peter Wood ning the mandate. Bob Diamond, the THE “rogue” trading scandal at UBS owned by a European Union-based par- to do more to free up business to grow has lined up bankers to prepare a chief executive of Barclays Bank, claimed two senior executives last ent company would also be able to opt as economic output flatlines. Revised bumper listing of esure, reports last attended a meeting with Wood at the night as acting chief Sergio Ermotti out of audits, which the government GDP figures yesterday showed the UK night said. time of the pitching process. admitted the bank had failed to prop- estimates could save each up to teetering with growth of just 0.1 per Wood, who also founded the car Diamond’s presence is down to his erly investigate suspect trades. £83,000 per year. cent in the second quarter. insurer Direct Line, is said to have relationship with the founder Wood, Francois Gouws and Yassine The overhaul would also bring the But accountancy groups warned hired Deutsche Bank and JP Morgan who he knows from his days when he Bouhara, the co-heads of global equi- UK back into line with Europe on against cutting important financial to help ready the company for a stock set up Direct Line – and they are ties, resigned over the £2.3bn (£1.5bn) audits, cutting out red tape that is over oversight on business. The proposals market flotation that is being ear- both Chelsea fans. loss. and above the EU financial reporting are now out to consultation for 12 marked for next year, according to The company could be valued at Investment banking chief Carsten rules that cost UK firms more than weeks until 29 December. Sky News. north of £1bn. Kengeter has kept his job.

CITYA.M. 6 OCTOBER 2011 News 11 Rothschild shell Premier Oil to in talks on debt restructuring

buy North Sea ▲ MINING BUMI, the mining group founded last year by billionaire financier Nathaniel Rothschild (pictured), said rival EnCore it was in talks over a possible restruc- turing of a debt facility. “Bumi has been informed that the facility will be due for repayment in ▲ ENERGY equivalent per day. the near future and that the borrow- BY KASMIRA JEFFORD “This is a perfect fit for Premier ers are currently in discussions with given our existing North Sea assets,” a view to restructuring and/or repay- PREMIER OIL, the FTSE 250-listed oil said Simon Lockett, Premier Oil chief ing the facility,” it said yesterday. company, is expanding its North Sea executive. “Operatorship of and the CEO Simon Lockett said EnCore was “a perfect fit” for Premier’s North Sea assets Shares in its PT Bumi Resources presence with a £221m cash deal to increased equity position in Catcher arm rose sharply in Indonesia on buy rival EnCore Oil. will help us to progress this develop- hopes a debt refinancing The potential takeover will increase ment in line with our time frame and MEET THE ADVISERS plan could be reached, Premier’s stake in the Catcher field – maintain momentum across our but its UK shares fell one of the largest discoveries in the portfolio.” Coakes, who joined RBC Capital four per cent. UK North Sea in recent years – from Numis Securities said the deal, MATTHEW Markets in September 2009 from Bumi had planned 35 to 50 per cent. Premier’s fourth acquisition in the COAKES Goldman Sachs, has worked on a to repay a $600m Premier said yesterday it was offer- UK this year alone, could lead to number of deals including Dana (£388m) tranche loan ing 70p per share, representing a 55 other takeovers in the UK sector fol- RBC CAPITAL Petroleum’s £272m acquisition of in October to sovereign per cent premium to Tuesday’s clos- lowing the recent fall in oil prices. Petro Canada Netherlands as well as wealth fund ing price, and that Encore investors Resolution’s £2.8bn acquisition of China Investment could take the bid in cash or Premier ANALYSIS l Premier Oil PLC Axa’s UK arm last year. Corporation shares. p RBC Capital Markets, the corporate Jeremy Low kicked off his career (CIC). EnCore’s directors have backed the 360 335.90 and investment banking arm of Royal at Royal Dutch Shell working in It had 5 Oct deal with their 7.4 per cent stake, as 355 Bank of Canada, acted as exclusive Aberdeen, before moving into invest- obtained a has investment group Blackrock, the financial adviser to Premier Oil on its ment banking. He worked as an $1.9bn loan firm’s largest shareholder, which 350 £221m acquisition of Encore Oil. investment banker at Deutsche Bank from CIC, one of owns 5.8 per cent. 345 The team is being led by Matthew before joining RBC in 2008. its biggest credi- Premier, which operates in the 340 Coakes, director in European equity Rothschild’s oil and gas team tors, in 2009 Middle East and South East Asia as capital markets and Jeremy Low, acted as sole financial adviser to with a 12 per well as the North Sea, said it was on 335 managing director of the RBC’s oil EnCore Oil, with a team led by Neeve cent annual track to deliver its medium-term tar- and gas investment banking team. Billis and David Hemmings. interest rate. get of pumping 100,000 barrels of oil 29 Sept 30 Sept 3 Oct 4 Oct 5 Oct 12 News

Steve Ballmer, chief executive of Microsoft Yahoo’s acting chief Tim Morse Microsoft may bid for Yahoo

▲ MEDIA searches, but it returns 88 per cent of advertising revenue back to Yahoo. BY ALISON LOCK But there are still huge internal divi- SOFTWARE giant Microsoft is consider- sions within Microsoft over whether it ing making a fresh bid for Yahoo in its should go after Yahoo again so soon second attempt to buy the troubled after the end of its last bitter and unsuc- internet company in three years, cessful fight for the search and webmail sources close to the situation told company in 2008. Reuters yesterday. One side is still set on the deal as a Microsoft joins a number of other means to obliterate AOL as a competitor potential buyers looking at Yahoo, and create a strong web portal that can which has a market value of about offer better products to audiences, $18bn (£11.7bn). advertisers and end users, a high-rank- Among the interested names are pri- ing Microsoft executive told Reuters. vate equity houses Providence, Hellman Others oppose the deal on the & Friedman and Silver Lake, as well as grounds that Yahoo is not likely to pro- Chinese e-commerce giant Alibaba and duce growth worthy of the billions Russian technology investment firm Microsoft would spend buying it. DST Global, the sources said. “Yahoo’s value hasn’t grown in years, Yahoo’s long-time advisers Goldman and some executives feel we should buy Sachs and Allen & Co are already something that is more forward-look- preparing financial information to ing,” said the executive who spoke on send out as it put itself on the block. condition of anonymity. Yahoo shares jumped 10.1 per cent on Yahoo is expected to take months to the news, while Microsoft shares ended decide its future, particularly since the 2.2 per cent higher after rising about board unceremoniously fired chief three per cent during trading. executive Carol Bartz. Microsoft and Under a ten-year deal struck in 2009, Yahoo could not be reached for com- Microsoft’s Bing already powers Yahoo ment last night. CITYA.M. 6 OCTOBER 2011 EDITED BY 13 HARRIET DENNYS Got A Story? Email [email protected] Follow The Capitalist The Capitalist on Twitter: @dennysharriet

Racing tycoon CITY STAR John Magnier FORCES UP faced bidding competition at MAGNIER’S Newmarket NEXT BID from the City’s star trader Farewell Paternoster Square: Evercore moves on HE MAY yet succeed in snapping up Mitchells & Butlers on the cheap, but Lawrie Inman creator of a work called Bad Government? there were no bargains for racing tycoon No shortage of options for the event John Magnier at the Tattersalls bloodstock organisers, but in the event the arts-lov- auction in Newmarket yesterday. ing Tory peer Lord Palumbo and former Forcing Magnier’s hand on Lot 35 was cabinet minister Michael Portillo (left) Lawrie Inman, the 30-year-old superstar turned up to The Mall Galleries to watch futures trader, whose bid of 500,000 Henrietta Simpson win the £25,000 guineas pushed the Irish billionaire into John Magnier (left) at a Tattersalls bloodstock auction in May Picture: www.tattersalls.com Threadneedle Prize. paying 520,000 guineas for a yearling The Visitors’ Choice award of £10,000, sired by his own stallion Montjeu. “Around here, people think a hedge fund Brown was a guest at a dinner hosted by presented by culture minister Ed Vaizey, Aside from Inman and Eddie Stobart is something hunting people collect to financial PR firm Tulchan, where founder perhaps applied to everyone currently CEO Andrew Tinkler however, City names help maintain the hedges for jumping.” Andrew Grant introduced his new manag- working in the City though – the suc- were thin on the ground at the opening ing partner Neil Duffy, formerly of cinctly titled Drained. day of the yearling sales, where Hong Interbrand, to City names including Kong-based professional punter Paul HOUSE HUNTING Numis corporate broking MD Tim Makin placed the top bid of 800,000 HOW are Evercore and Lexicon Partners’ Rowntree and Slaughter and May senior BRAAI, JAMES BRAAI guineas for a relation of Magnier’s Pour staff getting on since the merger that saw partner Martin Hattrell. MOVE OVER Alessio Rastani, the City’s lat- Moi, this year’s Investec Derby winner. Evercore’s employees move into Lexicon’s Not to mention one rather jaded M&A est internet sensation is Daniel Stewart “The bloodstock industry has failed to home in Paternoster Square? banker from Credit Suisse, toughing it out stockbroker Sean Lunn, whose spoof attract City money,” said investment bank- It’s “business as usual”, says former with four children and a mortgage. “There James Bond viral video has been viewed ing consultant Nicky Samengo-Turner, Lexicon investment banker Marie Brown – are five more years of pain ahead,” he told more than 20,000 times on YouTube. thinking long and hard before producing but not for long, as Evercore will soon be The Capitalist gloomily. “Why can’t they just Lunn’s Live and Let Braai clip, a trib- the tenuous link that the late Amschel on the move again, with executives let Greece default?” ute to South African barbecuing star- Rothschild’s ex-wife Anita is married to already viewing new office space around ring his friend Andre Vos, the the bloodstock agent James Wigan. the City to accommodate their expansion ex-Springbok captain, hit the zeitgeist “The racing fraternity is bad for people plans. “Paternoster Square is only a tempo- PRIZE GUESTS following rumours the next James Bond with fragile but large egos,” he continued rary measure,” said Brown. “My money’s WHO DO you invite as guests of honour film will be shot in Cape Town. Search from his windswept field in the Fens. on Mayfair.” to an art prize ceremony to reward the YouTube for “Live and Let Braai”. 14 News CITYA.M. 6 OCTOBER 2011 Trouble at home could hit global growth

THE British tend to hate a success bandwagon – those that bought Even at home the warehouse story, so the news yesterday of during Dunkerton’s bullish glitch could hit expansion plans, Supergroup’s supply problems and months of unstoppable sales rises with between eight and twelve expected profit hit was inevitably and talk of international growth. new stores scheduled to be opened met with we-told-you-so themed But for those in it from the start in the second half, including a musings on the danger of rapid the news is less drastic. Despite flagship on Regent Street. growth. yesterday’s dramatic drop, the Dunkerton has said he expects Chief executive Julian price is still well above the 500p the creases to be ironed out by Dunkerton’s attempts to reassure per share it listed at in March 2010. November, and says he has investors seem to have fallen on The success story isn’t over just yet. “absolute confidence in the com- deaf ears – shares closed at just But much of the shares’ future pany and the brand”. 707p yesterday, losing almost 30 upside will be dependent on the Fighting talk, but it might just per cent in just one session. Supergroup international growth take investors a little longer to get With Supergroup shares hitting plan, and supply chain problems back to business as usual. a £18 high in February this year at home are hardly a vote of confi- the drop is a disaster for those who dence for a company looking at have only recently jumped on the global deals. BOTTOMLINE Analysis by Elizabeth Fournier

SuperGroup chief executive Julian Dunkerton shocked markets with the update Pic: REX SuperGroup in £9m profit warning hit

▲ RETAIL system was running smoothly now. In May the firm reported that BY JOHN DUNNE growth slowed in its fourth quarter SUPERGROUP yesterday shocked the as it failed to get summer stock Receive £200 trading credit* City by revealing that its full-year quickly enough into shops for the profits will be hit by up to £9m after warm weather. a supply problem at a key ware- But in July Supergroup, which is when you deposit £1000 into your house. to open a new flagship store on The company, best known for its Regent Street, said that profits for NEW spread betting account Superdry brand, saw its shares dive the year to May had jumped by 110 almost 30 per cent after the per cent to £47.3m. announcement. It floated on the London Stock It said there had not been enough Exchange in March 2010 at a price *Deposit £1000 and place three trades at £3 per point or more stock in its UK stores as a result of of £5 per share. before 31st October to claim your £200 trading credit. the supply blow at its warehouse in Terms and Conditions apply. Gloucester, which was being ANALYSIS l Supergroup PLC revamped. p The retailer estimated that its 707.00 5 Oct profits would be dented by between £6m and £9m. 1,100 You’re better off It said in a statement: “The total 1,000 cost of this isolated event, including 900 the additional temporary warehous- 800 starting with City Index ing capability and resulting lost sales will impact the current year’s 700 profitability by between £6m and £9m.” However, it added that the 29 Sept 30 Sept 3 Oct 4 Oct 5 Oct Mothercare raises alarm as its sales continue spiral downwards

▲ RETAIL Mothercare said UK like-for-like sales were down 9.6 per cent in the 12 MOTHERCARE has sent further weeks to 1 October and that the out- Trade today at shockwaves through the retail sector look for the all-important winter www.cityindex.co.uk/credit/ by revealing its UK sales have been trading period had “materially wors- “well below” expectations. ened”. The retailer said a downturn in Chief executive Ben Gordon said: Spread betting and CFD trading can result in losses that exceed your initial deposit. consumer confidence seen following “In the UK, trading conditions have the UK riots continued to knock become progressively more challeng- trading over the last month. ing and competitive, and our per- In an update that triggered a 42 formance has been well below our per cent slump in its shares, expectations.” CITYA.M. 6 OCTOBER 2011 News 15

Tesco chief exec Philip Clarke said sales were slower Sainsbury’s Tesco sees UK than planned buoyed by fuel sales hit by and clothing ▲ RETAIL SAINSBURY’S yesterday reported a like-for-like sales lift, with clothing shopper woes one of its top performers. The retailer’s sales were up 1.9 per ANALYST VIEWS: HOW SERIOUS IS TESCO’S cent excluding fuel in the quarter to 1 October. Its convenience stores business con- ▲ RECENT SALES SLIP? By John Dunne RETAIL £1.88bn as gains in Asia and a narrow- tinued to grow at a rate of 20 per cent, BY JOHN DUNNE er loss in the US helped offset the com- with sales growth stronger than in its pany’s relatively poor UK performance. DAVID MCCARTHY | EVOLUTION SECURITIES supermarkets. TESCO yesterday reported its weakest Tesco said it would put off plans to It said its “Back to School” products six-monthly UK sales growth figures expand Tesco Bank until next year. had flown off the shelves with for 20 years as higher food and fuel The firm also booked a £57m charge Our overriding impression is that the UK business remains disappoint- 100,000 pairs of school trousers pur- costs took their toll on household related to payment protection insur- ing and we are unconvinced that enough has been done to put it back on track. chased. budgets. ance, casting a further shadow over its We are concerned strategically on Tesco. We had hoped that the Big Price Drop Meanwhile chief executive Justin UK like-for-like sales, excluding nascent banking operations. “would be a significant event, but it looks increasingly disappointing. King said its Live Well for Less cam- petrol and VAT, fell by 0.5 per cent in Last week Tesco launched a £500m paign had helped trigger the sales the six months to 27 August. price cuts campaign – the “big price rise, although he acknowledged that The retailer said that underlying drop” -- in a bid to extend sales and ANNA SMEE | HUNDRED CONSULTING ” the market remained tough. sales of food were up but larger stores market share. Tesco shares gained 3.5 He said: “We expect the market had been hit as shoppers spent on per cent, slightly ahead of the market. environment to remain very competi- essentials but reined in spending on When even an established supermarket such as Tesco is suffering at tive for the foreseeable future but we gadgets and other consumer items. ANALYSIS l Tesco PLC home, you know the economy is in trouble. Tesco's international exposure and are confident in our ability to grow by Tesco chief executive Philip Clarke p 393.25 innovation mean it is fairly well positioned to ride out the downturn as it continues doing a great job for our customers.” said the sales were “slower than “to innovate despite the difficult backdrop. The chain’s total sales were 7.6 per 5 Oct planned”, blaming the performance 390 cent up, thanks partly to the strong on the most “challenging retail mar- 385 performance of its petrol stations. ket we have seen for a generation”. That was helped by a 10p per litre 380 RICHARD HUNTER | HARGREAVES LANSDOWN ” Tesco said that higher petrol prices petrol discount for any shopper were also taking their toll as cus- 375 spending more than £60 in a store. tomers travelled less frequently to out- The company added 39,000 sq ft of 370 The multi-pronged approach is helping to deliver a robust growth of-town larger stores. model. The UK performance was muted in the period, whilst the US continues to space in the quarter and said its However pre-tax profit from contin- expansion plans were on track 29 Sept 30 Sept 3 Oct 4 Oct 5 Oct run at a loss, even though the turnaround plan seems to be clearly on track. uing operations climbed 12 per cent to “It remains strongly placed as compared to its home market peers. despite the tough consumer climate. ” 16 News CITYA.M. 6 OCTOBER 2011 Marston’s sales lifted by healthy pub food figures

▲ LEISURE aged business saw like-for-like sales in line with expectations, with ana- growth of 2.9 per cent over the full lysts looking for pre-tax profits of BY JOHN DUNNE year. around £80m. Brewing volumes rose PUB chain Marston’s reported a sales The tenanted and leased chain saw two per cent on the year with premi- rise yesterday, fuelled by the perform- a slim improvement in profits, run- um cask ales up five per cent and bot- ance of its meal deals. ning about 0.6 per cent ahead of last tled beers up six per cent. The company said its “lunch for a year. Meanwhile fellow brewer and pub fiver” offer and a free drink with a Chief executive Ralph Findlay said owner Shepherd Neame said Ralph Findlay said sandwich order helped the group that level of momentum was encour- turnover for the year to June was up the firm’s momentum improve its managed pubs food sales aging given the difficult trading con- five per cent to £121m, while profits was encouraging by five per cent in the year to the end ditions in the pubs industry. were up nearly 10 per cent to £8m. Picture: Micha of September. Marston’s, which brews Pedigree The firm, which makes Spitfire and Theiner/CITY A.M. Including drinks sales, the man- and Hobgoblin, said results would be Bishops Finger, also saw volumes rise.

NEWS | IN BRIEF

look and a better range of goods launch- Thorntons sales melt away es this month. He was also positive about Chocolate maker and retailer Thorntons orders for Christmas, which he called yesterday said sales had fallen 7.6 per "strong and in line with expectations". cent in the past three weeks. Sales from However, the online business Thorntons its own shops were down 10.1 per cent. Direct saw sales drop 8.1 per cent over Chief executive Jonathan Hart said cost- the past 13 weeks, after the loss of a conscious consumers were choosing pro- major, unnamed, client. Around 180 motions over full-price chocolates, and shops are expected to close over the next the high street remained weak. He said three years as the firm focuses more on that Thorntons' rollout of its new store internet and franchise sales.

Subject to terms, conditions and availability. Valid for travel 8 Nov ‘11 - 28 Mar ‘12. Book by 24 Oct. Limited availability over peak travel periods, holiday periods and sporting events. Handling fee per passenger per one-way fl ight: £6 per credit/debit card transaction may apply. Supplement applies for travel Fri - Sun. CITYA.M. 6 OCTOBER 2011 News 17 Costco results PwC sees IPO miss forecasts

▲ RETAIL freeze for the COSTCO Wholesale missed forecasts for its fourth quarter profit yesterday and said it will increase its annual membership fee for a little more than 22m members. For the fourth quarter, net income rest of 2011 was $478m, or $1.08 a share, com- pared with $432m, or 97 cents a share a year ago. Sales rose 17 per cent to $27.59bn. September same-store sales, including fuel, rose 12 per cent.

▲ ner Mark Hughes told City A.M. “Based Analysts had expected earnings of CAPITAL MARKETS on our experience there are not a lot $1.10 a share on revenue of $27.84bn. BY ALISON LOCK of projects being floated for the rest of The Ritz hotel in Piccadilly has received several unsolicited approaches. Picture: Rex this year.” A WORRYINGLY low number of com- PwC’s head of capital markets, panies are planning to list on Europe’s Richard Weaver, called the current Monsanto in stock markets in the remaining stock markets “the most challenging Barclay brothers reveal months of this year as they abandon IPO conditions in recent memory”. fundraising in the current bearish “The next month or so is typically a operating loss markets, PwC will warn today. peak period for IPOs as companies tap High volatility and low investor con- the markets for funds after the sum-

flow of bids for Ritz hotel ▲ fidence have taken their toll on list- mer,” he said. “The prospects for 2011 INDUSTRY ings over the past quarter, with less look grim unless there is a sea-change than €1bn (£860m) raised in London in market sentiment.” GLOBAL agribusiness company and only four big privatisations in Slumps in stock prices make it hard ▲ PROPERTY “achieved the highest sales revenue Monsanto posted a smaller-than- Spain and Poland holding up for companies issuing shares to offer BY KASMIRA JEFFORD in its history” against a difficult eco- expected fourth-quarter loss and said European markets. them at the right value, while the nomic backdrop. it would restate financial results for With just six weeks to go until the cheap prices of established companies SIR DAVID and Sir Frederick Barclay Turnover at the Ritz last year rose 2009, 2010 and prior 2011 quarters start of the November window for mean investors are loath to take a risk have recieved several unsolicited bids from £28.4m to £31.3m, resulting in a due to issues with its glyphosate her- flotations – one of two prime times of on an untried investment. for their Ritz Hotel in Piccadilly and profit of £6.7m before tax against bicide business. year that companies come to market – The IPO pipeline is now bulging have valued the legendary site to be £5.4m the year before. The company yesterday posted a very few businesses have indicated with listings that have been post- worth more than £625m. The billionaire twins recently fourth-quarter net loss of $112m, or they intend to go public. poned until the first half of 2012, PwC The Barclay brothers, who also own added to their fast-growing property 21 cents a share. “It takes the best part of four to six said in its IPO Watch report. This the Telegraph newspapers, revealed empire by buying a trio of London’s The loss from continuing opera- months for a company to properly pre- could cause a huge bounceback in list- the approaches in the hotel’s annual top hotels including Claridge’s and tions was 22 cents a share. On that pare for an IPO, to get a prospectus ings if markets improve next year – or results published on companies the Connaught, in a £700m Irish basis, analysts had expected a loss of out there,” PwC’s capital markets part- hold back growth if they do not. house, which also states that the Ritz property debt fire sale. 27 cents a share. 18 News

Tim Cook’s first product launch as Apple boss was met with a mixed reaction Picture: REUTERS New iPhone gives rivals a shred of hope

▲ TELECOMS report record profit from handset sales and overtake Apple as the BY STEVE DINNEEN world’s biggest smartphone vendor THE TELECOMS world was yesterday after selling just 1m fewer smart- digesting the implications of Apple’s phones in the second quarter. latest product launch, with manufac- The firm was bracing itself for a hit turers hoping to capitalise on the ini- following Apple’s launch but hopes tial lack of enthusiasm. the iPhone 4S’s muted reception will Nokia was trading almost five per absorb some of the impact. cent up yesterday, with its new line of The legal battle between the two phones running Windows Mango shows no sign of abating, with expected to put it in direct competi- Samsung saying it will file patent- tion with other high end handset infringement claims against Apple’s makers. Taiwanese rival HTC was up latest phone in France and Italy, just a slightly. day after its release. Samsung, however, slipped nine It will also consider legal action in per cent, with its third quarter prof- other countries, following similar its, to be announced tomorrow, cases lodged by Apple, which accused expected to drop 30 per cent to 3.4 Samsung of “slavishly” following its trillion won (£1.85bn). Its mobile designs. phone business has grown exponen- Apple slipped five per cent in the tially, boosted by its flagship Galaxy wake of Tim Cook’s inaugural prod- SII handset but gains have been pared uct launch as full-time chief execu- by a muted performance at its chip- tive but has since recouped most of making and flatscreen TV businesses. its losses. Samsung is widely expected to iPHONE COMMENT: P32 BT ramps up Telecom Plus its broadband earnings rise ▲ TELECOMS ▲ UTILITIES BT yesterday said it will ramp up its UTILITY services group Telecom Plus superfast fibre broadband service to yesterday forecast a record first-half offer speeds of up to 300Mbps for profit on an improved customer base, some customers. and a significant increase in the inter- It also said it will double the speed im dividend. of its fibre to the cabinet (FTTC) serv- The company, which supplies gas, ice. Openreach chief executive Liv electricity, telephony and broadband Garfield said: “These developments under the Utility Warehouse name, will transform broadband speeds also said it was comfortable with the across the country.” full-year market expectations for both Communications minister Ed earnings and dividend. Vaizey said: “Improving the UK’s A spokesman said: “Our growth broadband infrastructure will help rate has accelerated with customer our digital industries grow and numbers and service numbers both ensure the UK is an attractive place to increasing.” It now has almost start-up and base businesses.” 400,000 customers. News 19 Sportingbet soars as its profits jump

Sportingbet boss Andrew McIver said talks are progressing over its possible takeover

▲ GAMING possible alternative suitors. He said: “If Ladbrokes decide not to BY STEVE DINNEEN buy us, the future for Sportingbet is ONLINE bookies Sportingbet saw its very much the future we’ve had for shares soar almost six per cent yester- the last couple of years, in that we’ve day after its pre-tax profit soared been putting our house in order. from £6.9m last year to £23.8m. We’re moving to a much more regu- Revenues dropped slightly from lated base.” £207.5 to £206.3m. The results were Sportingbet reported strong announced in the long shadow of growth in its emerging markets divi- Sportingbet’s long-mooted takeover sion, Australia and some European by Ladbrokes, which the firm said is territories, offsetting economic weak- ongoing. ness in Greece and Spain. Discussions over the possible sale of its Turkish language website to ANALYSIS l Sportingbet PLC GVC Holdings, a move seen as critical p to clear the way for the Ladbrokes 44.00 deal, are also ongoing. 48 5 Oct Chief executive Andy McIver said he was satisfied with progress in both 46 sets of talks but declined to comment 44 on the likelihood of either deal com- ing to fruition. McIver emphasised 42 the strength of the business were it to remain independent, although ana- lysts say Bwin.party and Betfair are 29 Sept 30 Sept 3 Oct 4 Oct 5 Oct EMI attracts takeover bids ahead of Citigroup deadline

▲ TECHNOLOGY stood the firm could even delay the sale of the asset until the new year if THE SECOND round of bids for embat- its valuation is not met. tled music giant EMI closed yesterday, Major rivals Warner Music, Vivendi- with five suitors expected to have owned Universal Music, BMG and made offers for some or all of the firm. Sony/ATV are all interested in EMI, The company will now consider the while buyout specialist Ronald offers over a period of around two Perelman has emerging as another weeks before informing bidders about leading contender. the next stage of the process. The company may be split in two as EMI, home to iconic bands includ- part of the sale, with the more valu- ing the Beatles and Coldplay, is expect- able publishing arm being sold sepa- ed to fetch between £3bn and £4bn. rately to the recorded music business. Industry sources say depressed mar- A string of private equity firms had ket conditions could lead to bids com- been linked with EMI over recent ing in at less than EMI’s owner months but it is understood their Citigroup had hoped for. It is under- interest waned as markets slumped. 20 News CITYA.M. 6 OCTOBER 2011 Qantas chief is Flybe plunges target of threat after it warns in union dispute ▲ TRANSPORT AUSTRALIA’S Qantas Airways’ indus- trial fight with unions has turned on its profits violent, with racist threatening let- ters sent to the airline’s chief and other management staff, and cars and homes of Qantas staff damaged ▲ TRANSPORT cent higher than last year when taking after they refused to strike. BY KASMIRA JEFFORD into account the impact of the 2010 One letter sent to the Qantas chief, volcanic ash disruption, which cost Irishman Alan Joyce (pictured), used REGIONAL airline group Flybe yester- the company about £12m. Petrol sales were 1.7bn litres down on three years ago Pic: Jason Alden/CITY A.M. racist language and said “The unions day saw its shares plummet by 36 per House broker Investec, which cut its will fight you...Qantas is our airline, cent after it slashed guidance for its full-year estimates from £20m to started and staffed by Australians, 2012 profits, due to a slowdown in £6.5m, said it still saw long term value not foreign filth like you...” demand on domestic flights. in the Flybe shares. Cash squeeze on drivers Joyce said that police were investi- In its second profit warning this Industry experts said the news was gating the threats and that he had year, Flybe said revenues in the six part of a wider trend. British Airways’ issued a memo to 35,000 Qantas staff months to October were one per cent owner International Airlines Group alerting them to the threats. behind management’s expectations published figures yesterday forecast- sends petrol sales sliding Qantas has been hit by a series of while costs were in line with expecta- ing a softening of trade and consumer strikes triggered by a dispute over tions. demand in October, while Ryanair’s pay and conditions Shares have fallen 70 per cent since load factor fell last month. and plans to cut Flybe’s flotation on the London Stock ▲ TRANSPORT The cost of petrol peaked in May at domestic job cuts as ANALYSIS l Flybe Group PLC Exchange at the end of last year when BY KASMIRA JEFFORD 137.43p a litre and diesel touched the airline it raised £60m for European expan- p 143.04p as the political crises in the expands in sion. Flybe’s first profit warning in 65.00 DRIVERS hit by high fuel prices have Middle East and Africa threatened oil Asia. 5 Oct May sent shares down by a quarter. 110 cut their petrol consumption by more supplies. The Exeter-based group led by chair- 100 than 15 per cent since the credit Edmund King, the AA’s president, man Jim French said it was too early to 90 crunch, the Automobile Association said: “[T]oo many car owners cannot determine whether the slowdown in said yesterday. afford these record prices and are September trading was “a short term 80 The AA said petrol sales dropped by losing mobility as a consequence.” reaction to the turbulent macro-eco- 70 five per cent – or 517m litres – in the The AA said supermarkets coped nomic environment” or a longer term 60 first half of the year compared with a better with record pump prices, with market adjustment. year earlier, depriving the Treasury of petrol sales up 0.4 per cent and diesel Revenues at Flybe were three per 29 Sept 30 Sept 3 Oct 4 Oct 5 Oct nearly £1bn of duty. up 11.8 per cent from April to June.

PackPack & GGOO SuperSuper DDealseals Non-stopNon-stop fromfrom LoLondonndon HeHeathrowathrow

fromfrom a Asi BoBostonston £362 rreturn,eturn, incl.incl. taxestaxes New YYorkork fromfrom £378

rreturn,eturn, iincl.ncl. taxtaxeses frica A MiamiMiami fromfrom £392 rreturn,eturn, incl.incl. taxestaxes

rica

e

m

A Book now at KLM.com

urope E

FaresFares qquoteduoted aarere fforor nnon-stopon-stop rreturneturn flflightsights iinn eeconomyconomy cclasslass fromfrom LondonLondon Heathrow,Heathrow, operatedoperated byby DeltaDelta AirAir LLines,ines, iincludingncluding ttaxeaxes aandnd ccharges,harges, aandnd aarere ssubjectubject ttoo cchange.hange. FFaresares aarere ssubjectubject ttoo aavailabilityvailability aandnd eexchangexchange rrateate vvariation.ariation. PPleaselease ccheckheck fforor eexactxact farefare aatt kklm.comlm.com aatt ttimeime ooff bbooking.ooking. BBookook bbyy 224/10/11.4/100//11. TTravelravel pperiodseriods mmayay vvary.ary. CCreditredit ccardard ssurchargeurcharge wwillill aapply.pply. SSpecificpecific bbookinooking cconditionsonditions aandnd tthehe GGeneraleneral CConditionsonditions ooff TTransportationransportation ooff KKLMLM aandnd AAIRIR FFRANCERANCE aapply.pply. PPricesrices ccorrectorrect aatt 223/09/11.3/099//11. CITYA.M. 6 OCTOBER 2011 News 21

NEWS | IN BRIEF

Grainger rises on refinancing London gains Shares in residential property firm Grainger gained more than 11 per cent to close at 86p yesterday, after it said it has agreed two new debt facilities. Five major banks will provide £840m, with another £50m raised with Partnership in university Assurance. The refinancing means Grainger's average cost of debt will be 5.8 per cent with an average maturity of 5.9 years. Grainger's finance director Mark Greenwood said the deals would give Grainger far greater certainty over league tables its medium and long term financing. Hot Tuna gets boost from Amazon ▲ EDUCATION universities and science, said: “Only Struggling surfwear manufacturer Hot BY MARION DAKERS the US boasts more institutions than Tuna said yesterday that Amazon had us in the top 200. Indeed, relative to upped its bulk order for the year by 30 TWO of London’s universities are our size and smaller per capita per cent, sending its shares up 10 per among the 20 best higher education resources, we have – according to cent. In a trading statement Hot Tuna bodies in the world, the latest rank- some measures – the world’s best-per- said sales in the US over recent months ings from Times Higher Education forming higher education sector.” had been “minimal” and that it was pur- show. UK institutions lay claim to 32 suing sales in south east Asia. In March Imperial College London has been places in the top 200, with the company lost its new chairwoman, named the eighth best university Edinburgh, the London School of Melissa Sturgess, after less than two globally, up from ninth place last Economics and Manchester all in the weeks in the job. year, while University College London top 50. rose five places to clinch 17th posi- Outside the US and UK, the Saab still waiting for China funds tion in the annual rankings. Netherlands and Germany have the Car maker Saab has not yet received the Oxford University has edged ahead most top 200 universities with 12, fol- €70m worth of bridge financing it needs of Cambridge, and is fourth in the lowed by Canada with nine and to survive while it restructures under world to Cambridge’s sixth. Australia with seven. court protection, a spokesman said yes- Worldwide, the California Institute Thomson Reuters, which compiled terday. Saab, which has hardly produced of Technology has taken the top spot the data, said this year’s rankings a car for six months, said in mid- from Harvard for the first time in take into account academic reputa- September the money was part of a eight years. tion, research, teaching, the mix of license agreement with Chinese car firm David Willetts, the UK minister for subjects and international activity. Imperial College London is now the eighth-best university in the world Picture: REX Zhejiang Youngman Lotus Automobile. BTG boasts of Noble considers an New Hope exploring sale higher sales on that could be worth $5bn drugs success agriculture listing ▲ MINING said New Hope might be too expen- ▲ PHARMA ▲ COMMODITIES AUSTRALIAN coal miner New Hope sive for an Indian company to acquire. pany or the size of the deal. Corp put itself up for auction yester- A takeover of New Hope, which has SPECIALIST healthcare firm BTG said SINGAPORE-LISTED commodities firm Shares of Hong Kong-based Noble day after receiving several bid its own port, would be the latest in a yesterday that its overall financial per- Noble Group is seeking to list its agri- jumped as much as 5.8 per cent yester- approaches, sending its market value string of deals in Australia’s coal sec- formance in the first half has been culture business, which accounts for a day, their biggest intra-day jump since surging 15 per cent to almost A$5.1bn tor, reflecting demand to feed Asia’s “well ahead of expectations”. third of its earnings and may have a 31 August. (£3.18bn). strong growth. Its licensing and biotechnology value of more than $5bn (£3.2bn). Noble, which counts sovereign The group said the approaches The firm’s shares rose 81 cents to business reported a strong perform- The company, which wants to list wealth funds China Investment Corp were informal and it would invite A$6.10, valuing the company at ance, driven by the regulatory the business on the Singapore and Korean Investment Corp among selected parties to bid, starting a A$5.1bn, after touching a record high approvals for its ZYTIGA drug and a Exchange, said the process will be sub- its shareholders, has a market value of process that could test Australia’s of A$6.50 early in the trading session. good showing by BeneFIX. ject to market conditions. about $6bn. openness to foreign mine owners. New Hope chairman Robert As a result, BTG now expects sales in JP Morgan is advising Noble on the “We believe a spinoff makes sense to New Hope would not name the Millner hinted that New Hope could the six months to 30 September to planned listing, two sources with further avoid the structural de-rating interested parties. Analysts said firms be a reluctant target, but the compa- total between £160m and £165m, sig- knowledge of the deal said yesterday. that has defined the commodities in rapidly growing China and India ny was obligated to explore any deal nificantly higher than the current JP Morgan and Noble declined to trading sector this year,” UBS analyst were most likely among them that would give shareholders best consensus forecast of £139.6m. comment on who is advising the com- Andreas Bokkenheuser said. although industry officials in India value.

DON’T MISS THE BEST HORSES. JOCKEYS. RACING ASCOT RACECOURSE SATURDAY 15TH OCTOBER 2011

QIPCO BRITISH CHAMPIONS DAY TICKETS FROM £26 FINE DINING PACKAGES FROM £265PP

GROUP AND ADVANCE BOOKING DISCOUNTS AVAILABLE. BOOK NOW AT WWW.BRITISHCHAMPIONSSERIES.COM OR CALL 0870 727 1234 22 News CITYA.M. 6 OCTOBER 2011 IMF: Osborne should cut tax EU has a unique chance to

▲ reform farmers’ subsidies UK ECONOMY ment debt – above around 80 per cent mote competition in both services and of GDP – reduce GDP growth and goods. BY TIM WALLACE urged governments to tackle their In terms of tax regimes, the report ▲ GROWTH prospects in the UK will be deficit problems. recommends countries consider a “fis- EUROZONE ECONOMY income emanating from the CAP has helped over the long-term if George “Government debt across the G7 cal devaluation.” been falling, From 1986-88, around 39 Osborne cuts income taxes, Carlo nations is at levels not seen since the By reducing income and social secu- THE EUROPEAN Union has a “unique per cent of farmers’ total annual Cottarelli, director of the International aftermath of the second world war,” rity taxes and raising consumption opportunity” to cut back billions of receipts came from government sup- Monetary Fund’s (IMF) fiscal affairs he warned. “But this time the situa- taxes, goods exported become cheaper euros worth of subsidies paid out to port, yet this figure fell to 22 per cent department said yesterday. tion is worse – populations are older to foreign buyers whilst imports farmers every year, the Organisation in 2008-10, the OECD found. “Tax is too high in Europe as a with more pensioners to support, and become more expensive to domestic for Economic Co-operation and “Expected growth in demand and whole, and is damaging economic in terms of issuing bonds investors consumers – and, the IMF hopes, the Development (OECD) said yesterday. higher real commodity prices offer growth. Taxes should be reduced as have far more options when choosing move does not change overall tax rev- The EU’s Common Agricultural tremendous opportunities,” said the long as spending is cut in line with where to put their money.” enues. Policy (CAP) takes up nearly 45 per OECD’s Ken Ash. “A window has that,” he added. Cottarelli specifically argued that Fiscal devaluation will not solve all cent of its entire budget, totalling opened for re-orientation of policy Cottarelli was unveiling the IMF’s southern European nations had to free the problems of an uncompetitive around €53bn; additional support for away from broad income support and latest fiscal monitor. up labour markets, reduce the overall economy, the report said, but may cre- farmers takes the total to €77bn. towards investments in a strong and It warned that high levels of govern- size of their public sectors and pro- ate a temporary improvement. Yet the proportion of farmers’ competitive agri-food sector,” he said.

CITY A.M. | SHADOW MPC VOTES 5-4 FOR QE2 ALLISTER HEATH | CITY A.M. UK’s services “Rates should be held and there should be no additional QE. Further easing should only be considered if the Eurozone crisis spirals out of control and triggers another meltdown. Otherwise, policy should remain unchanged until the context becomes clearer. Inflation remains far too high.” SIMON WARD | HENDERSON “Hold rates, raise when financial conditions normalise. Broad liquidity is growing at a four to five per cent rate in unexpected – economic weakness is not due to a shortage of money. More quantitative easing could tank sterling and delay much-needed inflation relief.” GEORGE BUCKLEY | DEUTSCHE BANK “Conditions have deteriorated over recent months, possibly requiring more monetary support going for- lift to growth ward. But with inflation rising and third quarter growth likely to have been positive, we argue for policy on hold right now.”

▲ UK ECONOMY Analysts are hopeful that the UK may be perform more strongly than VICKY PRYCE | FTI CONSULTING BY TIM WALLACE expected in coming months. “Hold rates, but time has come for the QE button to be pressed. The Chancellor's 'credit easing' line in the SERVICES expanded unexpectedly “Although this does not fully Conservative party conference gives the game away. Despite slightly better manufacturing data there is quickly in the UK in September, unwind the awful August drop, it is increasing consensus that the economy needs urgent kick-starting.” according to the purchasing man- an unexpected step in the right direc- agers index (PMI) from Markit, out yes- tion,” said Nomura’s Philip Rush. “The JONATHAN LOYNES | CAPITAL ECONOMICS terday. current level is consistent historically “With the news on the global and UK economies worsening by the day and the Eurozone crisis presenting a Any figure above 50 represents with the underlying level of new busi- major threat, it is clear that the economy needs more policy support. I would vote for an immediate £50bn expansion, and services in the UK rose ness and expectations, whereas extension of the asset purchase programme but I suspect that more will ultimately be needed.” from 51.1 in August to 52.9 in August appeared depressed. So we see September on the index. The higher this as a return to underlying funda- number shows the sector increased its mentals. TREVOR WILLIAMS | LLOYDS TSB pace of growth. “Combined with the surprisingly “Keep rates on hold, and delay QE unless the Eurozone crisis deepens and puts the UK at risk of recession. With Composite PMI figures in the strong bounce back in the manufac- UK inflation still high and yet to peak, policy should not be loosened. Economic recovery will be slow due to high Eurozone, however, fell into decline. turing sector, the picture of the UK debt levels and however low interest rates get they will not kick-start a strong rebound in activity.” September’s figure came in at 49.1, appears less gloomy now.” down from 50.7 in August, led by serv- The picture is less rosy for the HOWARD ARCHER | IHS GLOBAL INSIGHT ices which plummeted to 46.5 from Eurozone, however. “Increase quantitative easing by £50bn. The danger of a renewed recession is mounting and with the coali- 49.7. “The fall in September’s composite tion government set to stick to its fiscal austerity guns, monetary policy needs to lead the way. Inflation is France and Germany barely saw any new orders index adds significant risk likely to fall sharply before long.” growth – their indices slowed to 50.2 in terms of the potential for further and 50.5 respectively. downside news,” said Barclays JAMIE DANNHAUSER | LOMBARD STREET RESEARCH That was matched by Italy, whose Capital’s Francois Cabau. “It is also not composite index fell from 48 to 47.7 in reassuring is that we are seeing this “Hold rates and kick off QE2. The Eurozone may now be in recession. Significant downside risks still overshad- the month. That small fall disguised weakness in almost all economies ow growth in the UK’s main trading partner. With ongoing tensions in bank funding markets, the time has larger sector changes – services fell 2.6 reported. come for more quantitative easing.” points to 45.8 whilst manufacturing “Furthermore, Eurostat confirmed declined more slowly, coming in at in its final estimate that second quar- GRAEME LEACH | IOD 48.3 compared with 46.9 in August. ter euro area GDP rose by just +0.16 “The latest GDP figures strengthen our view that the time is right to launch more quantitative easing (QE2) Spanish composite PMI fell 1.1 per cent quarter on quarter - the weak- – near zero GDP and money supply growth make a compelling argument. I am voting to hold interest rates points to 43.9 whilst Ireland’s, though est increase since the second quarter and expand the asset purchase program.” still positive, fell from 51.5 to 50.8. in 2009.” High street sales decline American service sector still growing by 0.3pc across Eurozone yet employment figures remain mixed ▲ ▲ EUROZONE ECONOMY cant hit. The retail sales index -- com- US ECONOMY was, however, at odds with a separate tors that have signaled recent piled by the EU’s Eurostat office -- report from payrolls processor ADP improvement in the labour market.” BY HARRY BANKS HIGH STREETS in the Eurozone face was down one per cent in August, showing overall private payrolls rose The government will release its a tight squeeze as the debt crisis and compared to the same time the pre- GROWTH in America’s service sector by 91,000, above economists’ expecta- closely watched national employ- economic worries escalate. vious year. held up in September, yet mixed tions for an increase of 75,000. ment report for September on Friday. Retail sales across the single cur- In the non-food sector, sales tum- news on jobs dampened sentiment ADP said most of the gains, which A separate study showed yesterday rency area dipped by 0.3 per cent in bled by 0.6 per cent from July to across the pond yesterday. exceeded August’s count of 89,000, that employers announced 115,730 August, compared to the previous August. While the Institute for Supply came from the service sector. planned job cuts in September. month. Worryingly for the Eurozone, its Management (ISM) non-manufactur- “The ADP report is generally not an “Yet it is important to keep in mind In July sales defied the euro area’s central powerhouse economy -- ing survey came in at 53 -- indicating accurate predictor of the Labor that 80,000 cuts came from just two economic woes by growing 0.2 per Germany -- recorded one of the growth -- employment activity con- Department payroll data,” said Daniel organisations: Bank of America and cent. sharpest falls in retail sales in tracted for the first time since August Silver, an economist at JP Morgan in the US Army,” said John Challenger of Yet in the medium term, the retail August. Compared to July, German last year. New York. “However, the report is Challenger, Gray & Christmas, which sector appears to be taking a signifi- retail sales were down 2.9 per cent. The drop in services employment consistent with other recent indica- compiled the data. CITYA.M. 6 OCTOBER 2011 News 23

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

Victoria Private Investment Office Sanlam UK Baker Tilly DLA Piper The financial adviser and wealth management The South African financial services Ken Almand, a specialist in transfer Mark McGiddy has been appointed as a business, previously Victoria Capital, has group has appointed Johan van der pricing, has joined Baker Tilly as a tax partner to the finance and projects relaunched as it aims to reach a wider market. Merwe as its new chairman. Van der partner. Almand joins from Mazars, group in the law firm’s structured Leading the firm’s expansion is Heather Merwe joined Sanlam Investment where he led the London transfer finance team. McGiddy joins from Maizels, the former head of Barclays Private Management as chief executive in pricing team; prior to that, he was an Deutsche Bank, where he was a director Bank, who has been appointed as managing 2002, based in South Africa. international tax specialist at HM in the global markets structuring team. director. As an advisory board member of Revenue & Customs. Barclays Wealth, which she helped build from Berwin Leighton Paisner OMAM scratch, Maizels championed family philanthro- The law firm has appointed Marc Partners Capital Old Mutual Asset Managers has py, the wider investment needs of women, and Hanson, a partner at Ashurst, as a part- The private investment office has appointed Julian Ide, previously head Art Wealth services for collectors. ner and head of its engineering, con- appointed Janie Chen and Charlotte of institutional business at BBVA struction and procurement group. The Plowman as the heads of its newly Asset Management, as chief executive Generator Hostels chairman. Michel was formerly CEO of law firm has also hired senior associate opened Hong Kong office. Chen relo- and head of global distribution. Ide The European hostel operator backed Deutsche BA GmbH, Energis-Ision AG Akhil Markanday, previously at Allen & cates to Hong Kong from Partners succeeds Peter Baxter, who is leaving by private equity group Patron Capital and Holidaybreak, and commercial Overy, who will join the London real Capital’s London office, and Plowman the asset management business to has appointed Carl Michel as executive director of British Airways. estate disputes team later this month. joins from Sail Advisors. pursue other opportunities. 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 Michael Page International ANALYSIS l Circle Oil PLC ANALYSIS l May Gurney Integrated Services 280.00 p p 20.75 p 5 Oct 550 35.00 5 Oct 290 352.60 5 Oct 30.00 450 270 25.00 250 350 20.00

Aug Sept Oct Aug Sept Oct Aug Sept Oct MICHAEL PAGE CIRCLE OIL MAY GURNEY Broker Numis expects Page to deliver another strong trading performance Evolution Securities says Circle’s interims highlight its excellent progress in Northland says May Gurney is living up to its promise as one of the more during the third quarter, with good performances from the mature European production, revenues and profits. The Broker says Circle can look forward to dependable businesses in the support services sector, with trading again economies and high growth once again for the emerging markets. However, it further progress in 2012, with the boost to cash flow providing resources to proving strong and the outlook once again coming in ahead of market expec- says macro sentiment is likely to dominate share price sentiment in the fund exploration. Higher risk/high reward exploration offshore Oman is likely tations. Despite the turmoil apparent in world markets and the threat of short-term and lowers its 2012 forecasts. It maintains its “buy” rating and to be funded through a farm-out. The broker rates Circle as “buy” and attach- another recession, May Gurney continues to stick to its tried and tested busi- attaches a target price of 450p. es a target price of 100p. ness model which is delivering results. It says “buy” with a target of 320p. Greek progress lends a hand Wall Street gains to FTSE despite retail worries again on tech talk

sions. tor provided a stark reminder of the energy sectors. “Optimism has returned to the challenges on the high street. US crude futures snapped a three- THELONDON equity markets when it looked like Tesco, the world’s third biggest THENEW YORK day losing streak with a gain of more the end is nigh. Buyers were attracted retailer, posted one of its biggest-ever than five per cent, while copper back to stocks as investors are becom- falls in underlying sales, while rival J prices added 1.7 per cent. REPORT ing more convinced that European Sainsbury saw only modest growth. REPORT The Dow Jones industrial average leaders are now serious about recapi- On the second-line, Mothercare gained 131.24 points, or 1.21 per cent, ALLIES by hard-pressed banks, talising their ailing banks,” said plunged more than 40 per cent after to 10,939.95 at the close. The S&P 500 insurers and commodity stocks Angus Campbell, head of sales at warning its full-year results would be S stocks rallied for a second day added 20.09 points, or 1.79 per cent, led a bounce back by Britain's Capital Spreads. hit by deteriorating UK sales as yesterday, as investors bid up to 1,144.04. The Nasdaq Composite Rtop shares yesterday as support “There was a hint of short covering British consumers reined in spend- materials and energy shares on rose 55.69 points, or 2.32 per cent, to for debt-laden Greece revived investor too in today’s move higher as it was ing. Urising commodity prices and 2,460.51. appetite for riskier assets. only yesterday that everyone was run- Supergroup fell almost 30 per cent poured into beaten-down tech names Yesterday’s gains kept the bench- Financial issues were boosted after ning for cover and couldn’t sell equi- after admitting supply problems after days of selling. mark S&P 500 near the lower end of a the International Monetary Fund said ties quick enough,” Campbell added. would hit profits. Stocks continued to recover from a trading range that goes back two it “definitely participate” in a second Integrated oil & gas was the best Next and Marks & Spencer were big decline that briefly took the S&P 500 months as the deepening debt crisis bailout package for Greece if the performing blue chip sector, led by BP blue chip fallers, off 2.3 per cent and into bear-market territory. That in Europe remains unresolved. Greece Washington-based lender was happy up 4.9 per cent, as the crude price 1.3 per cent respectively. turned abruptly on Tuesday, with the is expected by many to be forced to about the country’s determination to recovered after recent fall “Things might look better for the S&P 500 gaining four per cent in the restructure its debt. solve its debt problems. Specialty miners also found sup- stock market today, but the high last hour of trading that hit short-sell- Among the biggest gainers in tech- That news followed Tuesday’s port, helped by a rally in the copper street is far from a happy place. ers hard. nology were shares of Yahoo, up 10.1 announcement that European price, with India-focused Vedanta British consumers could do with a The Nasdaq 100 technology sector per cent at $15.92 after a report that finance ministers had agreed to safe- Resources the top FTSE 100 gainer, up boost, but it is unlikely the Bank of index jumped 3.7 per cent; it has Microsoft may be preparing a bid for guard their lenders and a pledge to 8.5 per cent ahead of second-quarter England can do much to help at its gained 7.3 per cent in the past two ses- the search engine company. protect Franco-Belgian lender Dexia results due on Friday. monetary policy meeting tomorrow, sions. Research in Motion was up 12.4 per following concerns over its exposure Building supplies firm Wolseley, “said Mic Mills, head of electronic Traders cited the relative strength cent at $23.60 on speculation the to the Greek debt crisis. which is heavily exposed to the US trading at ETX Capital. in the S&P 500 after breaking the BlackBerry maker could be acquired. Barclays saw the biggest gains in recovery via the housing market, was closely watched 1,100 level Tuesday as The US economy’s services sector the UK banks sector, up 7.7 per cent, also a top FTSE 100 gainer, up 8.2 per ANALYSIS l FTSE a catalyst for short sellers to pocket expanded in September, slightly while life insurers Aviva and Legal & cent, having fallen on Tuesday after a 6,200 gains and as a damper on overall sell- faster than forecast by a Reuters poll, General also stood out out, ahead 7.4 weak outlook statement. 5,102.17 ing pressure. while the private sector added 91,000 and 6.8 per cent respectively reflect- There were mixed messages on the 5,800 5 Oct Economic data showed growth in jobs in September, increasing opti- ing an easing in bond market expo- UK economy as the PMI services num- the US service sector was steady in mism about tomorrow’s non-farm sure worries as well as a rise in their ber surprised on the upside, but the September and private hiring picked payrolls report from the Labor equity assets. final reading for British second-quar- 5,400 up, suggesting the economy was not Department. At the close, the FTSE 100 index ter growth was less than expected. yet slipping into recession. About 9.7bn shares traded on the was up 157.73 points, or 3.2 per cent British retailers, however, missed 5,000 A jump in the price of commodi- New York Stock Exchange, NYSE at 5,102.17. The index had shed a sim- out on the rally yesterday as down- ties, including crude oil and copper, Amex and Nasdaq, above this year’s ilar amount over the previous two ses- beat updates from several in the sec- 11 Jul 29 Jul 18 Aug 8 Sep 28 Sep lifted shares in the materials and daily average of 8bn shares. 24 CITYA.M. 6 OCTOBER 2011 The Forum cityam.com/forum Estonia’s lesson for Britain: Cut now and cut hard if you don’t want worse pain later

OULD you like to live in a country You can also default on your debt. Not very and the debt will mount up and up. with a budget surplus, a 21 per British and ruinous to the future economy. High debt levels are also historically linked cent flat tax rate, that grew at an The country and its banks would be out of to lower growth. Furthermore, even that Wannual rate of 8.4 per cent in the the world financing scene for quite a while. contraction in the deficit assumes the short- last quarter led by manufacturing, has Or you can inflate the debt away. Very term attractions of relaxing spending will be almost no government debt and is planning tempting as a clever way to screw the people avoided by this government for its whole to spend 20 per cent of its budget on capital you owe money to, but at some stage they term – which seems unlikely. spending? Where unemployment is falling will see this happening and won’t lend you At some point, the markets will start to nicely and the government seems able to see any more money or demand very high rates wonder why they should carry on investing well beyond the next opinion poll? to lend you any more. High inflation is in UK gilts at 2 per cent with inflation at 5 Welcome to Estonia. almost impossible to control and economies per cent and the country looking less and Estonia did not face the issues of 2009 by with high inflation suffer from the uncer- less able to pay the interest. We already have kicking the can down the road with £600bn tain background it generates, with a collapse greater debts and a bigger annual deficit of quantitative easing and fiscal stimulus in longer-term investment. At the same time, than we had when we went to the IMF in the and cutting capital spending – rather, it cut high inflation impoverishes those in retire- 1970s. Sometime in the foreseeable future, public spending hard by around 10 per cent ment through no fault of their own. the spotlight will move from Spanish and of GDP, enduring pain in the short term for So running a deficit is a pretty immoral Italian debt onto ours. the vision of a better future for the nation. thing. We live better today and pass the prob- When that moment comes, interest rates GDP fell in 2009 by some 14 per cent lem to the kids. will zoom away and then we will have to bal- and unemployment rocketed to 17 Britain runs a deficit because its govern- ance the books by chopping the size of the per cent. ment spends too much. The state is around state in a brutal manner. We could take less It returned to growth in 2010 50 per cent of the economy in the UK, and pain now by actually doing some real cuts and unemployment is down to a history shows that most economies slow and get back to prosperity quicker or we can still-painful 12 per cent. Assets and down past 40 per cent, as lots of the econo- kick the can down the road again and guar- people were pushed into the pri- my is in the non-real-growth public sector. antee a worse pain a bit later. vate sector with predictable eco- Intuitively, then, the bloated state is a big Estonia has nice clear government poli- nomic benefits. part of the reason we are currently near zero cies. “The medium-term budgetary objective The UK endured rather little growth. And absent growth, the only way to of the government is to keep the general gov- pain by living well beyond its 40 per cent is to cut spending by 20 per cent ernment budget in surplus. A conservative means, driving interest rates (10 points from 50 per cent of GDP) – like fiscal policy will ensure a low level of govern- down and borrowing bucket- Estonia did. ment debt which is a prerequisite for ensur- fuls. The government spends The state does not have to be such a big ing the long-term sustainability of public £5 for every £4 of income. component of the economy – ten years back, finances.” The difference is more debt we were in sensible territory, but we have Perhaps we should pay for George Osborne – and there are only three increased spending and inefficiency. The to spend a week there. things to be done with NHS is a good example: from 1996 to 2009, Jon Moulton is a venture capitalist and the chair- debt. spending – in 2010 pounds – went from man of Better Capital. You can service it – £51bn to £120bn, for not so different a level the cash required to pay of service. interest and principal Despite the need for deep cuts, the coali- will be a drain on future tion, despite much propaganda from both Sometime in the near future, economic growth and sides to the contrary, is planning to cut only stability. It is, of course, marginally over its five-year term. The idea of the spotlight will move away the next generation who getting income equal to expenditure within will suffer from the debt five years requires growth at near 3 per cent we are forcibly leaving to per year. At current levels of growth, the from Italian debt onto ours. JON MOULTON them. deficit will stay at around 10 per cent of GDP CITYA.M. 6 OCTOBER 2011 25 In association with Email: [email protected] Twitter: @cityamforum The Forum

RAPID RESPONSES ever watchful, especially since A Prime Minister Exemplary ETFs Osborne on form the French and Italians made it clear they reserved the right to BlackRock calls for high stan- It is a welcome sight to see a reopen the text in the process of dards on disclosure for British chancellor of the excheq- negotiations between the Exchange-traded fund (ETF) uer stand up against Brussels to Parliament, Council and providers. We agree. That will ensure open markets and to Commission. on auto-cue blind only codify exactly what is fight off attempts to reduce the Syed Kamall, MEP for London already being delivered by the financial services sector in and member ECON committee ETF community. ETFs have built London. Using the language of an exemplary track record of diplomacy, George Osborne delivering on straightforward made it clear this week that he Speak your mind performance objectives in a could not agree the text of new to the big picture highly transparent and liquid EU financial services regulations Readers are invited to comment environment. without a number of compro- on the web: cityam.com/forum; Michael John Lytle, mises. However, as with many by email: [email protected]; managing director, Source battles in the EU, we need to be and on Twitter: @cityamforum. Cameron cut up his ill-informed UK bank rules need to speech on credit be taken Europe-wide card debt too late HE joke doing th e rounds in th e Manchester conference hall yesterday BY ANTHONY BROWNE was th is: is David Cameron following TPlan C or Plan D? The wags weren’t AYING “I would- an open, single market in financial services – and referring to the govern ment’s deficit reduc- n’t start from putting it on the table. tion strategy, but rather the fact that the here” is not a We have an immediate opportunity with the Prime Minister was forced to rewrite his Svery helpful proposals from the Vickers commission to ring- speech after early extracts, released to the response to a traveller fence investment banking from retail banking. The press on Tuesday night, caused a furore. In asking directions, but government is committed to introducing that here one passage, th e Prime Minister appeared to sometimes it is the best – but we should consider pushing for it to be call on all Britons to pay off their credit card DAVID CROW one. It is good news for adopted across the EU. There is a strong political debts as soon as possible. “The only way out London that the chan- case – the Vickers commission, made up of some of th is crisis is to deal with your debts. That IN MANCHESTER cellor managed to force of Europe’s top banking experts, believes it will means households – all of us – paying off th e concessions on EU derivatives legislation. He create a more stable financial system, which other credit card and store card bills,” read the on even higher consumer debt in the years entered the negotiations in Luxembourg outnum- European governments keep insisting they want. offending extract. ahead. Its March forecast showed household bered 26 to 1, but achieved most of what was need- With Dexia and other European banks seriously By th e time th e Prime Minister took to th e debt rising from £1.6 trillion in 2011 to £2.1 ed to ensure that we aren’t disadvantaged vulnerable in the euro crisis, the European banking st age, th at line – along with several others – trillion in 2015 – an increase of £566bn. That compared to Paris or Frankfurt. But in truth we system certainly needs some strengthening. had been altered, so that it became a mere would take it from 160 per cent of disposable shouldn’t be in this position to start with. Europe’s largest banks are generally universal observation: “households are paying down income to 175 per cent. Cameron is often We are the overwhelming derivatives capital of ones, combining investment and retail banks, their credit card and store card bills.” criticised for ignoring the details, but he – Europe, with a market share of over 70 per cent, which the Vickers proposals are squarely aimed at. Cameron’s aides put the clanger down to and his aides – should really know th is st uff. and yet we find ourselves reacting to legislation European banks might complain, but it would be “sloppy drafting” but the damage was The credit card row overshadowed the voted on by countries that have no derivatives difficult for French and German governments to already done. Here was an incredibly well-off entire speech. The Prime Minister used an market of their own. It is the same across the field make the case against following our prudent lead. Prime Minister, whose govern ment bor- auto-cue rather than reciting it from memo- of financial services legislation – we are the undis- By pushing this, we would start being on the front rowed almost £16bn in August – th e highest ry – his best mode of delivery – apparently puted financial services capital of Europe, and yet foot, setting the agenda, and forcing the Brussels on record – lecturing th e electo ra te on debt. because th e text had to be changed so many we have to respond to a tidal wave of financial bureaucracy to spend more time on things we There is nothing wrong with prudence. times it wasn’t ready in time for him to learn services legislation that has originated elsewhere want, and by default (there are only so many hours The UK has been getting drunk on cheap it. The passage on consumer debt was so in Europe. We don’t set the agenda, and are left in the day) less time on things we don’t want. money for far too long and a great de-lever- badly writte n, it ve rged on th e incoherent. valiantly trying to limit the damage to our key Introducing it EU-wide would make a more level aging must take place. The idea of calling on The whole debacle underlines th e prob- strategic industry. playing field across the continent. But there is everyone to do it at once – in the run-up to lem th at th e Cameroons have had all along. We are in this position because the previous another advantage, in the realpolitik, horsetrading Christ mas – is crazy, however, and plays into Too concern ed with happy-clappy issues government took its eye off the ball – former world of Brussels negotiations. It would massively the hands of those critics who claim such as th e big society and foreign aid, th ey chancellors Alistair Darling and Gordon Brown strengthen our hand with other countries on other Cameron just doesn’t get it. Meanwhile, the ignore th e bigger picture: falling living stan- were notorious for not engaging in Brussels. We pieces of legislation; if they wanted us to make Bank of England’s whole strategy – keeping dards and feeble economic growth. The should continue to lobby strongly to ensure the concessions on some aspects of the Vickers interest rates artificially low and ignoring Prime Minister only really found his groove legislation already in the pipeline doesn’t harm our reform, they would have to make concessions on inflation – is designed to help th ose who when he was criticising th e opposition. In national interests, but we should also aim to get to something else. It is worth thinking about – it just want to borrow to spend, while penalising fact, the whole conference can be summed a different starting point – to where we set the might be a good place to start, helping ensure the prudent savers. up with one message: “we’re not as bad as legislative agenda for the industry which we lead EU goes in the direction we want. Worse st ill, th e govern ment’s own fiscal the last lot”. Unless the Tories get a grip, the in Europe. That means having a clear idea of what Anthony Browne is a former director of the watc hdog, the Office for Budget electo ra te could soon disagree. legislation we want – generally that which creates think tank Policy Exchange. Responsibility, bases its gr owth assumptions David Crow is City A.M.’s managing editor. 26 WORDS BY CITYA.M. 6 OCTOBER 2011 Business Features MARC SIDWELL Giving ninety per cent of its tickets away is P&G’s winning 2012 strategy

COUNTDOWN TO THE LONDON 2012 OLYMPIC GAMES 295 DAYS TO GO Irwin Lee explains why being the Proud Sponsor of Mums makes business sense for Procter & Gamble

WHAT WAS YOUR BRAND’S PRIMARY REASON FOR BEING INVOLVED WITH Q. THE GAMES? Our first involvement with the Olympics came in Vancouver with A. the 2010 Winter Games. We were given the opportunity to sponsor Team USA and that’s where it all started for us. We wanted to unite the common purpose and ideals of our organisation with those of the International Olympics Committee (IOC). At P&G, we are committed to improving lives through our products and what we do as a company, and the IOC stands for improving lives through sport. This partnership gives us an unparalleled opportunity to connect with billions of people around the world. HOW DID YOU STRUCTURE THE CASE TO THE BOARD Q. FOR INVOLVEMENT? The results from Vancouver sold the A. idea to establish a glob- al partnership with the IOC. We saw increased sales, higher Q A brand recall amongst con- Associations to sup- a lot more to come on the road to London reinventing marketing and brand-build- sumers and higher message & port their fantastic P&G will be 2012. It’s all about getting people excited ing and we think the Olympics too. This recall from our brands’ advertising. “nearest & dearest” about the Games and doing what we can will be the first social media games and We knew, with our global brands and (friends and family support- giving every to give back while growing our business at we’re focused on how we can make the operations, that we could scale this work ing athletes) programme. We’ve the same time. And just this week we’ve most of it for P&G and all those who want and take it worldwide and we’re very excit- already seen our Olympic association bear GB athlete’s announced our gift to Team GB and to join us in being part of the Olympic con- ed as we make the first step on this jour- fruit for our business in the US in 2010 and ParalympicsGB. P&G will be giving every versation. ney with the IOC, starting with London in the UK in 2011 (one year to go pilot com- mum a ticket Team GB and ParalympicsGB athlete’s 2012. mercial activities). We’re confident that mums and families tickets to see their son WHAT HAS SURPRISED YOU MOST the next ten years of this agreement will to see their or daughter compete in their first event. ABOUT YOUR INVOLVEMENT TO DATE? THE GAMES PRESENT NUMEROUS reap similar rewards. This is our small gift to them to say thank Q. COMMERCIAL OPPORTUNITIES. first event. you for everything they’ve done. Q. WHICH ARE THE MOST CRUCIAL FOR IN THE LIGHT OF THE NEW BRIBERY We always expected this partner- YOU AND HOW WILL YOU BE USING ACT LEGISLATION, HOW WILL YOU HOW HAVE YOU STRUCTURED YOUR ship to excite and engage our THESE FOR MAXIMUM RETURN? Q. HANDLE HOSPITALITY AND TICKETS? BUSINESS TO MAXIMISE A. employees but the reaction has Q. OPPORTUNITIES? been simply staggering. We held this year’s While there will be opportunities We’ve committed to giving 90 per UK company review and celebration at an for Games-time supply of products, cent of our ticket allocation away to We’ve added very little new struc- Olympic venue and had a number of A. our focus will be on our base busi- A. mums and families as part of our ture. We have a global coordination Olympic heroes as guest speakers, and the ness. We will use the Games and our asso- Proud Sponsor of Mums campaign and the A. team; and I have a small UK organisation loved it. Our employees are ciation with Olympic teams, athletes and remainder will be used for media to help Olympics project team. The key is to focus more inspired and enthused by the part- their families to deliver an unprecedented tell the stories of our athletes and their on a few big ideas that we believe will have nership than we could ever have imagined consumer reach for our total portfolio. We families during this historic time for maximum impact. Communication-wise, and the work that’s coming out on all our have brilliant ticket giveaways to reward them. We’ve been running commercial we are dialling up digital on top of tradi- brand plans and the P&G campaign across our existing consumers and attract new initiatives in stores supported by broad tional media. The digital revolution pres- the next year are some of the best I’ve ever ones too. We are working closely with media campaigns, where consumers get ents limitless opportunities to connect seen in my 25 years with the company. LOCOG and are partnering with the the chance to win tickets for their families with people all over the world and have Irwin Lee is the vice president and managing British Olympic and Paralympic when they buy P&G products, and there’s two-way interactive conversations. This is director for Procter & Gamble UK and Ireland. CITYA.M. 6 OCTOBER 2011 27 Business Features | Careers

THE CRITERIA WORKING FOR MI5 Not Spooks, but still exciting COMPUTER AND NETWORK FORENSIC SPECIALIST l An in-depth knowledge of current technology. l Demonstrable experience in any two of the MI5 wants City workers to join its Digital following areas: computer forensics, computer and network security, internet and network Intelligence unit, writes Donata Huggins protocols and network penetration testing. l Software or database development or data- mining skills would also be advantageous. HE BBC’s Spooks is not a realistic according to its human resources depart- depiction of working life at MI5, ment, it’s “not cut throat.” You won’t be IT SECURITY EXPLOITATION OFFICER but that doesn’t detract from the bored though, the work is fast-paced and l Sound knowledge of information security. Tfact that working for the UK’s partners include the Secret Intelligence l Good understanding of present technical national security intelligence agency Service (MI6) and the Government threats. would be cool. If you’ve ever longed to Communications Headquarters (GCHQ). l Insight into current mainstream software know state secrets or work on The Grid, I’m assured that many things people platforms. now could be your chance. The Security believe about MI5’s recruitment processes l An ability to identify weaknesses and Service is recruiting – and recruiting City are myths. It is not true that it doesn’t countermeasures. workers to boot. recruit tall people, for instance. There is a l Keen interest in new computer and network It is after folks for its Digital height restriction for those who want to technologies. Intelligence unit. That’s using technology work in its mobile surveillance teams, but l Working knowledge of at least two of the fol- to fend off terrorist attacks, espionage that is quite different to the digital stuff. Fancy joining the real tion being the director general. If you’re lowing areas: incident response, penetration and other threats to national security. It It doesn’t kill anyone either. “The Security thing? Visit: interested, you do have to ask yourself testing, network auditing, Unix/Windows sys- needs people with a strong background Service is subject to the rule of law in the mi5.gov.uk/careers seriously if you’re discreet enough. You tems administration or Software Reverse in computer science, engineering or infor- same way as any other public body.” must be the sort of person who does not Engineering. mation security (more detailed criteria That said, you do have to be very secre- need to discuss work with friends and are listed in the panel on the right). tive. I am told: “You must not discuss your Picture: REX family. Why not try the Digital Intelligence challenge Pressured bankers might be tempted by application, other than with your partner Put bluntly: “If publicly celebrating to see if you have the kind of technical skills the nine-to-five working day on offer or or close family.” MI5 does not disclose the your career successes is important to you, that MI5 is looking for? the collaborative teamwork approach: names of any of its staff – the sole excep- you should reconsider your suitability.” www.mi5.gov.uk/careers/itjobs A day on M15’s digital forensic EVERYONE INCLUDING I.T. specialist team TERRORISTS USES

counter-terrorism (ICT) investigation, as well as juggling casework for sever- al other smaller investigations in the background. I pop down to the restaurant to pick up some breakfast and then head to a meeting to catch up with the intelligence officer working on COMPUTER AND NETWORK the high-priority ICT investigation to HELP US UNLOCK FORENSIC SPECIALIST discuss the implications of the results of last night’s searches. We agree to THEIR SECRETS RYAN slightly adapt the analytical approach and I then spend the rest of my morn- ing conducting forensic analysis. FTER graduating from univer- One of my smaller cases is a Computer Network Forensics and IT Security Exploitation sity with a degree in IT, I spent counter-espionage investigation. I roles eighteen months working in have to think laterally on this one as ÊÊÊUÊËÓÇ]ÓxäʇÊËÎÈ]Σ£ ÊÊ Athe finance sector. I enjoyed the subject of investigation I am At MI5, our Digital Intelligence team is playing an increasingly central role the work, which had good prospects, interested in uses computers very but I realised that I wanted to do differently to our ICT subjects. in countering threats from terrorism to espionage. Our Digital Intelligence something that offered me the After a quick lunch I have a liaison specialists work closely with our investigative teams leveraging their chance to put my IT skills to use meeting with some of our UK part- while making a real, tangible differ- ners to discuss ongoing casework and knowledge of computer security systems and networks, and gathering, ence. When I saw that MI5 was collaborative working, followed by an analysing and interpreting digital data to piece together complex intelligence recruiting for forensic specialists, I internal team meeting to talk about decided to apply. our capability development projects. pictures, to help progress high-profile operations. You’ll need sound I am currently working in the Keeping up with the latest technolo- knowledge of current technologies and a good understanding of present Digital Intelligence unit, carrying out gy is a must. technical threats, as well as the kind of inquiring, analytical mind that will help forensic analysis of digital media The rest of my afternoon is spent acquired legally from a range of trying to solve a tricky technical prob- us develop our capabilities to remain at the forefront of innovation and stay sources. I assess the information lem on one of my cases. I come up one step ahead of those posing a threat to national security. gleaned from my forensic examina- with a small script to automate the tions, writing the relevant material extraction of data from a new log file To find out more and apply, visit in intelligence reports. format so that it can be analysed fur- On a typical day, after making my ther. ÜÜÜ°“ˆx°}œÛ°ÕŽÉV>ÀiiÀÃɈ̍œLà way to work on the tube and having a Just before I leave I hear that some cup of coffee, I check the results of particularly challenging analysis I searches I’ve run overnight against did last week has led to preventing a Discretion is vital. You should not discuss your application, other than with a partner computer media for one of our inves- group of suspected terrorists enter- or a close family member. tigations. I’m currently leading on ing the UK. I set off to face the tube analysing the media from a fast-mov- again, after what has turned out to ing, high priority international be a satisfying day at the office. 28 Wealth Management CITYA.M. 6 OCTOBER 2011 Dangers of trying to catch a falling knife

Craig Drake asks two seasoned investment experts for their views on asset allocation in a serious market downturn Free Timing a market entry is a tricky task Picture: GETTY

ONG term investors are under- disciplined way to that strategy.” standably nervous about the Lough views this as being crucial to weeks and months ahead in the avoiding what he describes as one of Lfinancial markets and for the the key traditional weaknesses of pri- safety of their hard earned savings. At vate clients – that of getting out of trade some point, the music is going to stop markets at the bottom and then re- – Greece is facing an imminent entering at the top: “In our case, that default, and many will have seen will involve a muli-asset approach, as Dexia’s trials earlier this week as the we believe that asset class diversifica- first of many. tion gives the best long-term risk- Risk asset classes are falling into adjusted returns.” close correlation and government engineered inflation is picking THE CASE FOR CASH ne savers’ pockets – so how should Yogesh Dewan is the chief executive investors react to a black swan event and founding partner of Hassium z that finally tips the markets over the Asset Management and has fifteen edge? years of professional investment We turn to two investment man- management experience. Though he Enjoy three months’ commission-free trading agement veterans for their advice. takes a similar stance to Lough, he or SIPP Dealing accounts. en select the investments in control. differs on the issue of maintaining a Choose from Dealing, Shares ISA e the one who’s , THE CASE FOR DIVERSIFICATION multi-asset approach in a market elftrader, you’r Simon Lough is chief executive of down-turn: “In a black swan environ- that you think will yield the best returns – Shares and Bonds, Unit Trusts and ETFs, Heartwood – after 12 years in invest- ment, cash is the only reliable diversi- UK and international exchanges.t three As a months s are commission free (up to 100 trades ment banking, he joined Cripps fier. The correlations of all other able. After that, you’ll pay our standard Harries Hall in 1996 to open the major asset classes – bonds, equities Whatever you trade, your firs London office, becoming a director of and commodities – would all be at terms apply), although stamp duty is pay Cripps Portfolio (now Heartwood) on unprecedented levels and the diversi- competitive fees. its establishment in 2001. fication benefits of holding them e some or all of the Having successfully steered clients’ would be limited.” Despite the cur- Of course, commission-free doesn’t mean risk-free. Any investments you choose are funds through previous downturns, rent negative real interest rates, subject to market and exchangean fall as rate well movements. as rise and eyou valuecould oflos investments, and he warns of the difficulty of trying to Dewan feels that the pay-off (or lack any income from them, c catch the proverbial falling knife: of it) is worth it in order to avoid sig- est. capital you inv o take advantage of our trading tools and “We are very cautious about trying to nificant draw-downs in portfolios. it’s your first account or you’re market time as the academic and Should investors try to eke out risk When you trade with us, you can als ree trading. empirical evidence shows that this is premia and chase yield in a down- investment information available online. So whether very hard to do for professionals, let turn? “Our view is no,” says Dewan. alone private individuals, even in rel- “Investors who try and get some extra looking to try us out, enjoy a world of commission-f atively stable markets.” Market tim- yield for their cash investments by ing is particularly difficult in the taking additional risks, such as credit Be a selftrader. Open an account today current market climate – just take a risk, liquidity risk or interest-rate look at Tuesday’s market reaction to risks, would in our view be doing the Federal Reserve chairman Ben worst thing possible.” www.selftrade.co.uk/tradezone Bernanke’s speech or the mass mar- Such is the scale of the potential ket sell-off that ensued during the US crisis on the horizon, that Dewan or call 0845 0700 720 debt ceiling wranglings. When stocks advises that investors invest their are being dumped indiscriminately – cash with more than one counterpar- driven by sentiment and political ty and to only choose banks of the considerations rather than by the highest credit quality – the list of fundamentals of company perform- which is slowly contracting. The gov- ance – timing becomes particularly ernment-backed Financial Services difficult. As a result, Lough believes Compensation Scheme (FSCS) only that it is important to to average fund guarantees savings up to £85,000. performance from new investors over Above all, Dewan advocates that Lines are open Monday to Friday 7.45am – 7pm. Calls may be recorded. Selftrade® is a trading name of Talos Securities Limited and registered trade mark of Boursorama. Talos Securities Limited is incorporated in England and Wales (Registration No. 4196325, Registered Address: Boatman’s House, a couple of months. investors do not get caught up in the 2 Selsdon Way, London E14 9LA), is authorised and regulated by the Financial Services Authority (FSA Register No. 208271) and is a member of the “We believe the key role is to sys- short-term noise: “Do not trade. Do London Stock Exchange and PLUS Markets plc. tematically calibrate the amount of not speculate. Wait for the dust to set- risk you can and are prepared to take, tle and only then look to allocate develop a strategy and then stick in a riskier assets.” CITYA.M. 6 OCTOBER 2011 29

Bad planning could force you to send money back to Blighty

Mistakes to Picture: GETTY avoid if you move abroad Before packing the suitcases get your finances in order, writes Philip Salter Investment trusts, managed by Henderson

ANY people choose to leave l Over-reliance on believing what a the UK to escape, temporari- new employer tells you – particularly ly or permanently, the if the company is local to the country Mgloomy weather and the – for example, if earnings are pre- even gloomier tax regime. Sadly, dominantly through commission or there is a mountain of bureaucracy bonus payments. to wade through before setting sail l If renting a property, a lack of for warmer climes. research of the rental market into “It is important to differentiate the country moving to, so commit- between moving overseas for a short ting to paying unnecessarily high period of time and expatriating rents. indefinitely,” says Jason Witcombe, l Inadvertently being treated as a UK chartered financial planner at Evolve. resident for tax purposes by not For example, an Isa portfolio, while being aware of how many days you retaining its UK tax advantages, can spend in the UK without being could be taxed in a new country of treated as a UK resident for tax pur- residence. As such, he says if you are poses. moving overseas for good, you may On this latter point, Ashley Clark be better off cashing it in and rein- of Need An Adviser says “there are vesting it into something that will be many examples of workers moving to ‘‘I’m investing for growth from more tax-efficient in your new coun- Dubai, where no income tax is try of residence. deducted, only to return early to the It is important to understand that UK and find that income taxes are rules can vary widely between coun- due on all the money earned over- ’’ tries, so it is vital to research the spe- seas.” This, he says, “can be extremely around the globe... cific rules. For example, Witcombe painful.” notes that when emigrating to cer- Clark believes many people make tain countries – including Australia, the mistake of thinking that just The Bankers Investment Trust is run by managers who Canada and South Africa – Britain because they have left the country, look further afield to provide attractive investment returns so The Bankers Investment Trust freezes the state pension entitlement they are instantly free from UK taxes. you can aim to provide for those closest to you. so you could see your retirement He says “income tax, capital gains tax income fall in real terms. and inheritance tax liabilities in the It offers you an internationally diversified equity investment The facts you’ll want to know UK can catch many people out.” He which investors may consider a good first time investment or KEY CONSIDERATIONS points out that you do not lose liabil- as a core holding in a broader portfolio. The Trust aims to • The Trust typically invests in more than Robert Blower of Charles Russell ities to UK tax until you: deliver capital growth in excess of the FTSE All-Share Index - 200 companies internationally, for a notes that if buying a house abroad, l Become a tax resident in your new and can also be used to provide an income stream. broad spread of risk and wide exposure it is important to make a will in your country. to opportunities. new country of residence. Blower l Lose your UK ordinarily-resident ...my priorities also warns that you will need to status, which takes 5 years for capital ‘‘ • It currently yields 3.49%, one of the may be close to home highest in Global Growth Sector adhere to a country’s probate rules – gains tax disposals. ‘‘ he says France, for example, has a l Acquire a Domicile of Choice, i.e. but my investments (31 August 2011). strict system. As such, l’hexagone is lose your UK Domicile status for • Five specialist managers provide global not the place for anyone planning to inheritance tax in the UK, which needn’t be. expertise for a low Total Expense Ratio leave all their worldly goods to their takes a minimum of three years (plus of 0.42% (31 October 2010). pet moggy. many other qualifications). By investing in The Bankers Investment Trust, you'll gain Sarah Lord, managing director of access to a specialist management team whose expertise Killik Chartered Financial Planners, GET ADVICE covers the globe. By avoiding excessive exposure to the markets of any particular region, the team spreads risk and The Total Expense Ratio is the total annual pre-tax operating expenses says there are a number of key things Moving abroad is so potentially costly (management fee and other costs) expressed as a percentage of people need to do prior to moving that getting expert financial advice is aims to bring you attractive capital growth and inflation- average shareholders’ funds at the beginning and end of the year. abroad: essential. For those that want to get beating dividend growth. It's this approach which has helped the Trust to increase dividends for 44 successive years. l Make sure your passport is well an overview of the facts, Witcombe Annual Growth to 31 August 2011 within expiry date. If less than a year, recommends the expatriate guides Please remember that past performance is not a guide to 2010/11 2009/10 2008/09 2007/08 2006/07 consider renewing it. produced by the Association of future performance. The value of an investment and the Share Price (Total Return) 8.4% 7.2% -9.0% -2.1% 15.7% l Notify HMRC of your leaving date International Life Offices (AILO). income from it can rise as well as fall as a result of market Net Asset Value (Total Return) 7.9% 10.1% -8.8% -4.3% 14.5% through the completion of a P85. Paying less tax isn’t the only factor and currency fluctuations and you may not get back the l If renting out UK property, notify in deciding where to live – the 3 per amount originally invested. Source: All data sourced from Morningstar as at 31 August 2011, HMRC that you are moving abroad cent tax on expatriate salaries in unless otherwise stated. The latest data is available on our website. and register as a non-resident land- Bahrain doesn’t look tempting right Not all the investments in this portfolio are made in Sterling, lord. now – but Hong Kong’s 15 per cent so exchange rates could affect the value of and income from l Notify your mortgage lender. tax on gross income, or Singapore’s your investment. Emerging markets tend to be less stable l Get all the appropriate paperwork top income tax rate of 20 per cent, than more established markets and can be affected by local political and economic conditions, reliability of trading required for the new country (paid- are a temptation for high earners systems, buying and selling practices and financial reporting for visas where necessary). wanting to avoid the UK’s prohibitive standards. Some of the investments in this portfolio are in l Open an offshore bank account if 40 and 50 per cent rates. smaller companies shares. They may be more difficult to buy www.bankersinvestmenttrust.com likely to be required. Samuel Johnson might have been and sell and their share price may fluctuate more than that of l Notify financial providers such as right when he quipped to his biogra- larger companies. 0800 138 3523 banks, pension providers etc. of your pher James Boswell: “When a man is change of correspondence address tired of London, he is tired of life; for Ref: BNKRCA-01 Lord also points out the most cost- there is in London all that life can Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management Limited (reg. no. 2607112), ly mistakes made by those moving afford.” However, the qualifier Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), Henderson Alternative Investment Advisor Limited abroad: “afford” is key here – it is hard living (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, l Over-committing financially in a in this great city being taxed until London EC2M 3AE), Gartmore Investment Limited (reg. no. 1508030), Gartmore Fund Managers Limited (reg. no. 1137353), (each incorporated and registered in England and new country having just arrived. the pips squeak. Wales with registered office 201 Bishopsgate, London, EC2M 3AE) are authorised and regulated by the Financial Services Authority to provide investment products and services. 30 Wealth Management | Institutional FX CITYA.M. 6 OCTOBER 2011 Things can only get beta for currency

nificantly correlated with the premium of corporate debt over government debt in countries all over the world, as well as global stock markets. During times of stress, the return profiles behave similar- ly. There is also a strong relationship between credit default swap spreads and international risk premium returns since PRESIDENT & CIO, ADRIAN LEE & PARTNERS 2005. This suggests that a large portion of carry returns are explained by changes in ADRIAN LEE the market price of global government credit risk. NVESTORS have for many years test- Given that IRP is a compensation for ed their investment mettle in the tra- risk – in other words, an asset class – it is ditional asset classes of bonds, ANALYSIS l Cumulative net returns to international risk premia natural to ask how one can integrate it Iequities and commodities. While 220 Currency beta into a typical institutional portfolio of this troika might seem broad enough in US corp bonds vs treasuries stocks and bonds. IRP wins capital pre- which to try to earn superior returns, it 180 MSCI EM (scaled) dominantly at the expense of the corpo- may surprise some that a simple currency Oil (scaled) rate bond allocation, and can merit a strategy can outperform these asset class- 140 S&P 500 (scaled) similar weighting to corporate bonds due es. to their positive correlation and similar Many investors are familiar with carry 100 risk profiles. The expected performance of trades – trading strategies that exploit for- the overall portfolio improves due to both ward-rate bias (FRB) in currency markets. Dec 93 Dec 95 Dec 97 Dec 99 Dec 01 Dec 03 Dec 05 Dec 07 Dec 09 the diversification benefits of adding a These trades entail going long higher new asset class, and the excellent return interest rate currencies and funding these characteristics of IRP strategies. positions through lower interest rate cur- If one prefers to avoid asset substitu- rencies. A global currency strategy has Singing the praises of onymously. We believe the existence of There is a strong case for recognising tion, one should remember that any cur- produced consistent excess returns over currency as an asset such a premium is necessary for capital to this phenomenon as a risk premium, and rency strategy is a zero-investment the past twenty years, with many outper- class flow across borders, out of economies not merely an occasional market anom- strategy – in order to buy one currency, forming global stocks and bonds on a risk- where it is needed less, and into faster aly. The thesis that this reflects compensa- you must sell an equal amount of anoth- adjusted basis. The chart (above right) Picture: ALAMY growing economies where it is needed tion for risk is bolstered by a comparison er. Thus, the IRP is available without any shows how simple buy-and-hold strategies more. IRP can be viewed similarly to the of historical returns for IRP and those of additional capital, through leverage. Such for oil, the S&P 500, and emerging market premium of corporate debt over govern- other risk premia. If the returns are due an approach would allow investors to ben- equity compare to a currency beta strate- ment debt, or the premium of equities to inefficiency in the currency forward efit from the consistent return stream of gy. Bear in mind that these are equally over bonds. As long as differences exist markets, or some currency-specific anom- an overlaid currency program, and reap risk-weighted, so the cumulative return between the risk-reward relationships of aly, then they should not be correlated the benefits of diversification, without comparison is legitimate. assets in different countries – particularly with assets that are rewarded in times of having to alter significantly the composi- We use the terms “international risk real-rate differences – this premium will strong global economic growth. In fact, it tion of their existing stock and bond port- premium” (IRP) and “currency beta” syn- continue to be available. turns out that carry trade returns are sig- folios.

SAXOBANK.CO.UK Jeremy Guscott VALUE Sports Commentator PERFORMANCE TRUST

Use a QR scanner on your mobile EXPERIENCE to get the demo

Winner of 6 Euromoney THE MULTI ASSET PLATFORM, FOR THE ACTIVE TRADER. FX Awards 2011 The pursuit of success; it’s relentless. You strive; continuously. You learn; constantly. You measure your performance; daily. Perform better. Perform with Saxo Bank; a market leader for online trading. To fi nd out more please visit saxobank.co.uk

Our service includes products that are traded on margin and carry a high degree of risk to your capital. You risk incurring losses that exceed your initial investment. Margined products are not suitable for all investors so please ensure you fully understand the risks involved and seek independent advice if necessary.

Saxo Bank A/S is authorised by Finanstilsynet, the Danish Financial Supervisory Authority.

FX · CFDs · STOCKS · ETFs · FX OPTIONS · FUTURES · BONDS CITYA.M. 6 OCTOBER 2011 Wealth Management 31

(' ('  (' L'& #+ "'% '3$  K    K H               H     K I              J    K J   

$@71365 756 =E $@713 65 756 =E $@713 65 756 =E $@713 65 756 =E $@713 65 756 =E $@713 65 756 =E $@713 65 756 =E $@713 65 756 =E  (' -C:3/BB=3=     7BG=4 =<2=<@       &$@=C>       3/H:3G     $7::7B=<       3@E3        /B:7<@=C> B2       3B B       @3/B$=@B:/<2A       +3B63@A>==<      (AG         :=A3@=B63@A@   7A1=F B2      C@/A7/<"/BC@/:      /;;3@A=<       /20@=93A      (AG        /:4=C@3/BBG      =::7        D=:CB7=<@=C>      @=E<6"7@=C>       /<1/A67@3=:27<   3;7/;=<2A B2        /<2'31C@7B73A       !7::3<<7C;3=>B      (AG       @/F@=C>      3AA3B!/3B@756B      &'@3AA       (AG           3:>67@3@=C>      75<7BG   "')&" /H/96;GA        &/<9@=C>       (&(- '#(+&3#!$)(&'&* (AG         3<23@A=<@=C>    7F=       (AG         =;7<=$@77B/:      C<3:;@=C>       35/:33<3@/:    =<;7<     CB=<=;G=@>=@/B        'B/531=/16@=C>       (AG         (&#"3 (& % $       /:4=@2A@=C>       #:2!CBC/:      "3E+=@:2&3A=C@1        D3D/@=C>        (6=;/A==9@=C>     (AG          @=C>=:27<5A     =;3&3B/7:@=C>      $6=3<7F@=C>=:       $3B@=>/D:=DA9      =;>CB/137       <161/>3       $@C23       +67B0@3/2        (AG             /7@2      =@BA/A67=<       &3A=:CB7=< B2       &7=(7     !/@9A3'>3<13@      ! !7AGA      01/;       (AG             '>31B@7A       C>7B3@C<2!/        :03;/@:33=<2        (AG         %)(-"*'(!"("'(&)! 7=@7      <;/@A/B    '       ;3@7AC@&3A=C@13      (AG         !'/>7B/:     '>=@BA7@31B      *=2/4=<3@=C>       (3:317BG@=C>      <2=@(316<=:=5G       (AG        03@4=@B6';/::3@        =<2=<73:/5=&3A=C     (AG        "#"%)(-"*'(!#!! ')$$#&('&*' ::7/<13(@CAB        =<2=<'B=19F16      (&%)$!"(3' @7B7A6'9G@=/2       '#'       (AG          /<93@A      ';7B63"3>63E       67;3=;;C<71/B7     A6B3/2@=C>      D/#4       'G<3@5G3/:B6       @3AB=<      # 3'$&#)&' B97     3@3<2A3<       =@23@A3'=CB63@     (AG         !/1@= B2)'     &31=@2       /@@/BB3D3:=>;3    CBC@3      $       C      3::E/G     /G<3A$C0:7A67<5       /7@<<3@5G       />3     @==9A!/12=7B/@=C>   =D3<3@5G      (AG           @7B7A6AA3BA(@       '16@=23@A6"=<*=       AA/@<3@5G      /@7::7=<       /7AG@=C>       (AG           @7B7A6;>7@3'3       (C::3BB$@30=<        !""')  F7::=<<3@5G      3 /&C3     !'@=C>      (AG        /:32=<7/A@=C      3@7B/53#7:       :31B@=1=;>=<367@<3@5G      F>3@7/<     /@=3$3B@=:3C;       , "( #!' 55 (AG         3F7=<0A=:CB3         &7A3@A /::3@A $@3;73@#7:      7:B@=       3@@3F>=    !=B63@1/@3      &=G/:CB16'63::       '      +$6/@;/13CB71/:     (AG         27<0C@563@5@=C>     &=G/:CB16'63::       /GA     3(@=C>    :31B@/$@7D/B3       /0:33+7@3:3AA       @/7<53@  3AA3B!/'      :3;3   '=1=     #!@=C>      /@@/BB3D3:=>;3<  <;/@A/B  (C::=E#7:        3/<      (/:9(/:9(3:31=;              ;;C<=27/5<=AB71       (&"(*"&- 3@/:23::/;@=C>      +=:A3:3G     =;3&3B/7:@=C>    'GAB3;A       <4@/AB@C1BC     ##3&)&( &' ;31      !7B73@=C>        /;3A/:AB3/2    ;>/F@3::   /:4=@2A@=C>     C      /@1:/GA   /0:33+7@3:3AA   3=@/B7=<     &35CA      =<2=<!7<7<5      63;@7<5@=C>      $!=@5/<A7/<<         @355A        D7D/    /@>3B@756B   $&'#" ##' &3CA/>7B/:       =06/;      $!=@5/<;3@57<5     !=@@7A=<6+;7'C>        &$'@=C>     !$D/       !3557BB       $!=@5/<C@=>3/<      #1/2=@=C>    $@713 65 756 =E $@713 65 756 =E /;>@3::     '3@1=@=C>      !/83AB71+7<3        %7<3B7%@=C>      $!=@5/<<27/<       '/7        !/GC@<3G     $!=@5/<&CAA7/<       (3A1=      3@93:3G@=C>=       C6=6<7        '     !=<7B7A3     /E303       '3<7=@       ##$&#)&' =D7A=;3A@=C>      <4=@;/      $&!)( '3#( ):B@/:31B@=<71A        !3@1/     (@/D7A$3@97     /      +=:A3:3G         "/CB71/:$3B@=:3C      !=<9A      (/G:=@+7;>3G    !31=;@=C>      'C>3@5@=C>         "C;7A=@>=@/B7=<       "      !C@@/G3@;/@93B     &!=:27<5A       $/<4@71/<&3A=C      $3@>3BC/:<1=;3      $@3;73@==2A    ")'(& ""&" & '(("*'(3'&* '&       $/B/5=<7/=:2      " ' $3/@A=<        $=:/@/>(316<=:     (/B33 G:3      =2G1=B3     $3@4=@;@=C>       AB@/.3<31/     ;/577B/:$/@B<     )<7:3D3@       6/@B3@7@3>3@F>:=@        '=:27<5A      #&'(&-3$$& 3<<3@        &756B;=D3       :=G2A/<97<5@     '1=BB7A6!=@B5/53      !      '(*@=C>       :/F=';7B6 :7<3     (## &+'=:27<5A    &=G/:/<9=4'1=      '*/>7B/:      !=<27      !3:@=A3       (/@ACA@=C>      79;/$6/@;/13CB7       '=<507@2AB/B3A       (3;>:3/@:3B=<;3@57<      ;>3@7/:(=0/11=        -=C<53=(A@3E       *&' &=B=@9        )!        & '(("*'((&)'(' (&$@=>3@BG7@/F'/@1=<57      )(*!327/        (&* 3 ')& /@@         (&$@=>3@BG       +7:;7<5B=<@=C>      />7B/:3=C=     +$$     /38/<=:27<5A        3B4/7@@=C>      "=@B6C;0@7/<+/B3     3=;;3@17/:$@     E7<>/@BG757B/      7/53=       "" '&*' (/:D7D//@/!7<7<5       -3::@=C>      '!7::3@      $3<<=<@=C>     @/7<53@     /@<7D/:         ")'(& (&"'$#&((#" !"" ! ' 7@=C>        '3D3@<(@3/AA@=C>        7<4@/AB@C1BC@3     )<7B32)B7:7B73A      D7/B7=<         4@71/</@@719       '/D7::A      =;7<=(A$7HH/)      03@233<AA3B!/        ) =;;3@17/:$@=       3/AG3B      .:31B@=<71!/B      "& ")'(& ' 'B=0/@B@=C> B2     ::732=:2!7<7<        @=2/       <5:=;3@71/<       )<7B3@=C>        7@AB@=C>             "#" "')&" :3;367<=      ==9A=<@=C>     <5:=$/17471@=        75-3::=E@=C>       =63/2@=C>       =6     7B/:'6=>>7<5       

)L'&' )'L'&' $@713 65 756 =E $@713 65 756 =E & %)     !          ".      #(( '        ")')'"*        #        & #&!((       (&&#)$         ,     !.#"#!      "#'"("&       !&",$&''      ''       !""      -&      $$       *      (3(      !+    " #!&      "$$&'     & '&(+     &&#)&        #"#    &$       &'(# !-&''%)       ! &        (&$ &      "#"       *&#"       )#&'#&     '#'-'(!'      )('"      (&#)$        )('(  #!     ##        #"     # ($ !# *       "     #"##$ $'     "      *' &!&       &"( #!     )$#"(67"!&     ').        ,,#"!#        "& ''       "&  (&      &&#        ##       "(,       + (($ &      "&#$*    #!$#(      "(''"$# #        !     #"$ $' (&       "( #&$       (#&      $!#&"'      *!      #"'#"3#"'#"      !)"&     +#& "' &(##'      "#       !#" ('#&$          $@713 65 5165 $@713 65 5165 $@713 65 5165 $@713 65 5165 &$'# -$      !& "#"+       ('        '3$              #*'$'#$# #       &+      !&#'#(     ('  ",       "'%#!$#'(       '"'",       '%#*& ",         '"(#"       #$(&# )!    (')  '&      (')&#&'(      "'"       '(         '"#     #& #&$     ('! '      "  *&      '3$ ', ",      !      '$       $$'#           #+#"'")'        , $&#&!"     ', #&"&'      '+''!& (",     '"& (&        $.&        '!"'       #!!#(' &(3&(' $ $!#&&'"(        '#("&       $&#(&"!         ( #!(       #"#",!     ("'    =&#D3@<756B    C@=/A3&/B3    %) #!!"        ( #"      ' *& ",!     ."'     =&2/GA    73/<@3>=@/B3      )"&(       #"$ )!!     )"( (&#)$      ##     #&C@==D3@<756B     C@=C@70=@      )" *&*        )!")!'      *&.#"#!!'         #    #&C@= ;=

THE iPHONE 4S Apple: our pick STEVE DINNEEN Context is everything. Ad-man Martin Lindstrom published research this week claiming the sound of children laughing is the most “powerful”, “affecting” and “reas- suring” sound in the world. But if you’re of the new crop alone in an abandoned Victorian mental asy- lum, at night, with no torch, dizzy from an unexplained head wound... Different story, Despite the dominance of the iPhone, Helena Lee believe me. Such is the case with Apple’s new iPhone discovers a whole other world of touchscreens (the sound of an iPhone vibrating, incidental- ly, came third in the poll, trailing rather tragi- cally behind the Intel “chime”). The iPhone 4 OORAY, the not-quite-iPhone 5 has megapixel camera. But whether this latest was an incredible feat of smartphone engi- arrived. Yes, it has this fancy voice- model is enough of a change to warrant neering; the bar against which every other recognition software, which might ditching your current phone or not, there handset is measured. The 4S is better; faster, Hwell solve the perennial iPhone typ- are actually other touchscreen phones out longer battery life, more powerful camera. ing problem and has finally caught up there. Here’s our roundup of the closest But it’s not enough. People want more; with the majority of the market with its 8 competitors to the new iPhone 4S. they want to be amazed. The new iPhone should have should have been mounted inside the belly of a live snake and pro- grammed to sing happy birthday to you at NEXUS S HTC TITAN random intervals throughout the day. It should have been the size and shape of a hhhii hhhii thimble, so you could wear one on each fin- ger (and use the new multi-onanist feature This Google phone looks good. It True to its name, this is a titanic to conference call yourself). It should have may not feel as premium as the phone (think 4.7 inch touchscreen); ditched its battery altogether and been pow- iPhone 4S, but the slightly curved a rock solid satisfying weight in ered only by its owner’s belief in the magic of screen is bright, and it sits well in your hands. But it’s far from sexy. Apple, much like the fairies in Peter Pan. the hand as well as your back Yes, it may curve round into the Instead Apple pinned its hopes on its new pocket. It features contactless back, like the first iPhones, but Siri voice recognition software. Where is the payment technology, which lets unlike the original, is no sleek nearest Greek restaurant? How do I get you pay in store by swiping your thing. It runs Mango, the latest home? Siri knows. She will even organise phone (I’m sure this will actually version of Microsoft’s operating your calendar, send your messages and type take off one day) and has great system (running Windows Phone 7 your emails for you. The possibilities for battery life as well. The Google apps), and is relatively easy to use, hilarious mistakes are endless: “Siri, send apps are great, but the keyboard but at 9.9mm thick (the iPhone 4 is [insert explicit message] to my girlfriend.” isn’t as good as the iPhone. 9.3mm), the HTC is a beast. “Message sent to your wife.” “No Siri, not my wife. Damn you Siri.” “Message ‘damn you’ Sent to your wife.” Despite the initial reaction, it’s a tedious inevitability the 4S will break more sales SAMSUNG records. People will buy it NOKIA 700 because, as Lindstrom GALAXY SII found, people love the This good looking phone iPhone in the same way BLACKBERRY BOLD 9900 hhhhh may resemble an HTC, but they love their children. hopes to be a game-chang- Probably more. During hhhii This is a very viable alternative er for Nokia, who is losing Tim Cook’s speech he to the iPhone. A phone that’s out in the touchscreen said 6m people have This thinnest ever BlackBerry combines touch- thin (8.49mm) and lightweight smartphone tussle. Having downloaded the new screen with the sacred BlackBerry keyboard. It may not be to everybody’s caught up (just) with Mac operating system. I keeps the premium Bold feel, the optical track taste, but it’s undeniably slick Blackberry with its misheard him and wrote pad and is clearly still the winner for email. and has a screen that’s bigger N71/E61 series in the past, down 6bn. It took me a The 5 megapixel camera (catch up BlackBerry, than the iPhone 4, and access can it do the same with few seconds to realise even Apple’s upped their game) also video to over 50,000 Android apps. the iPhone? Like the HTC the mistake. “iOS Lion records 720 HD. There aren’t as many apps Definite pros include the 8 Titan, it will run Mango, has 6bn downloads you and games, of course. Though the screen is megapixel camera at the rear, which means their apps say? Everyone on the vivid, with its display at 2.8 inches, you can which shoots in full HD (1080p) will be a whole lot better planet is using it now? migrate up from a Curve or a Bold, but I’d and the vibrant colours that are as they’re no longer serv- That sounds plausible, doubt an iPhone or HTC user could downsize just another great feature of iced by Nokia’s Ovi Store. I suppose.” their touchscreen to such a tiny playground. the touchscreen picture quality. Expected late October. OUT OF OFFICE HELENA LEE

Left: the restaurant at FARMISON FOOD DELIVERIES PEYTON & BYRNE DEGAS DINNER AT TWE WHISKY SHOW AT VINOPOLIS the Royal Academy If you’re too busy to pop to the shops for ROYAL ACADEMY Enjoy the luxury of tasting whiskies supper, Farmison.com, which is supported The Degas and the Ballet exhibi- familiar and new this weekend by chef Brian Turner, has a great service tion is one of the most antic- at Vinopolis, London Bridge. that saves you hunting from shop to shop ipated this year. If you’re Build on your knowledge for the best ingredients. Celebrating the planning on going, per- of whisky and food pair- best of British, Farmison sources seasonal haps make a whole ing, and sign up for mas- ingredients from butchers, grocers and evening of it this Saturday terclasses which will artisan producers and will deliver straight with a Degas-inspired open up best-in-class to your door. The Foodie Green Grocer box French dinner beforehand whiskies to willing par- (£28.95) contains enough vegetables, fruit, with restaurateur Oliver ticipants. Hurry though, butter and cheese to feed a family of four Peyton. An enlightening there’s only one left for for the week, and has a selection of talk given by art historian the Shackleton Whisky (or produce that varies from the unexpected to Francoise Durrance will MacKinlay’s rare old high- the classics. A dream for any farmer’s mar- accompany the dinner. land malt). ket junkie who is short of time. Ticket: £79 Tickets from £95, 7-8 October, www.farmison.com www.peytonandbyrne.co.uk www.whisky-show.com

34 Lifestyle | Books CITYA.M. 6 OCTOBER 2011

ALSO OUT An empire PICK OF THE BOOKS ZOE STRIMPEL

BAKINGS AND PUDDINGS By Henry of darkness Dimbleby and Claire Ptak The third cook- book from Leon, with a naughty but healthy twist. and crime Three quarters of the recipes are sugar, gluten, wheat or dairy Mafia expert Misha Glenny has free. Score. turned his sights on cyber THE MAP AND THE TERRITORY henchmen, says Alasdair Byers By Michel Houellebecq The fifth book ISHA Glenny is no stranger to Misha Gleny followed from the infa- investigating violent individuals. the careers of the mous but brilliant As a correspondent for the shadowy group who French author is MGuardian and BBC he covered built up Dark Market, mercurial and corrupt politicians and megalomaniac a trading platform for surreal; ironic and generals in Yugoslavia. Following this, hacker thieves. meditative as it Glenny turned his sights on international explores art and crime syndicates, producing his findings its relation to the in his celebrated 2008 work McMafia. world it portrays. In his latest, however, Glenny has swapped machine guns, cocaine and vio- THE FEAR INDEX lence for USB sticks, internet cafes and By Robert Harris nerds. Dark Market documents the rise of encompasses everything from the sheer that originated from the US and had mili- Slick and up-to- cyber-crime – hacking by individuals, size of the credit card scamming industry tary intelligence behind it. date finance criminal gangs and even governments (which gangs now largely outsource to Readers embarking on the book quickly thriller starring a into websites and businesses. The book lesser criminals by selling scamming learn that the threat of cyber crime genius mathe- centres on the growth of the website Dark “licenses”), to the increasingly militarised extends beyond Nigerians asking for your matician hired by Market that eventually became the lead- use of hacking by governments against sort code and more toward the potential a hedge fund in ing online marketplace for the trading of other nations. Admittedly, stories of hors- of mercenary armies of superbly intelli- Geneva to cook credit card details, computer virus- es’ heads found in beds and dismembered gent, utterly egotistical and totally unreli- up algorithms. es, espionage services and merce- limbs in bags are disappointingly short able geeks hired short-term by Risk – personal nary hacking work. Tattooed men here, but the accounts of several differ- governments to make American traffic and financial – with anecdotes about assault and ent international agencies continually lights freeze nationwide and European soon takes on a bludgeoning have been exchanged arresting each other’s undercover agents stock markets plummet through false new meaning. for individuals with names like as well as frequently creating scapegoats information (though with the latter we “Cha0” and “Matrix001” who (creating a few incredible renegades in may just put it down to business as usual). SONG OF exchange war stories about mighty the process) more than makes up for While undercover-journo lovers will ACHILLES hacks into government servers and the lack of abducted students. fail to be awed by criminals that wage war By Madeline the co-ordination of Zombie-Bot Similarly, those that love conspiracy in their underwear and send death Miller attacks (the latter isn’t nearly as will be amazed to hear stories of Russia threats that are punctuated with “bro” Glowingly impressive as it sounds – think less courting hackers and offering online and “dude” every other line, Glenny has received debut Star Wars, more PacMan). legal immunity in order to build up a created a seriously thought-provoking novel by a beauti- Glenny has achieved a blinder here. mercenary army that then went on to work here. The suggestion that future ful American Following the careers of a small group bring Estonian banks, media business- warfare will be waged more on financial classicist, this is a of individuals that built up Dark es and infrastructure to their knees markets and transportation freezes rather dramatic, thrilling Market, the book opens up a fascinat- following political protests. Or the than battlefields, and Julian Assange-like retelling of the ing world of crime all around us. strong suggestion that the overload- introverts will replace religious extremists Trojan War with Moving from the Ukraine to the US, UK, ing of the nuclear reactors that seems a worryingly logical prediction. plenty of love, France, Turkey, Russia, Estonia and caused explosions at Iran’s nuclear Dark Market: Cybercrime, Cybercops and You. guts and tears. Thailand, Glenny creates a story that facility came from a computer virus Bodley Head, £20. Poland and Italy lovingly recollected in recipes

culture she was once part fish ink is simple splen- Two memoirs stand out among the of, and the story is told dour. Blood orange jelly through recipes. Beata’s is un-cheffy and easy to cookbook throngs, says Helena Lee achievement is that this make. His unusual chap- book avoids temptation ter on couscous and soup to stray into cloying nos- (“make couscous not war” -Made in Sicily: Food and Stories me this year. talgia, and is a humble is the opening quote) is a By Giorgio Locatelli, £30 The first is Rose Petal Jam: Recipes and celebration of a country fascinating nod to the Stories from a Summer in too often associated island’s history of journey- -Rose Petal Jam: Recipes and Stories from a Poland written by family doctor, with borsht and barren- ing Arabs, and though it Summer in Poland Beata Zatorska, who leaves ness. would have been good to see By Beata Zatorska and Simon Target, £25 Sydney to return to Poland in Giorgio Locatelli’s more meat in the chapter of search of family history and Made in Sicily is less the same name, what’s there recipes. of a nostalgic mood- (kid goat with anchovies, OOD writing has evolved into the Beata had me from recipe board dedicated to rosemary and lemon) is porn of the book world – a look at number one: her grandmoth- his love of the island, mouthwatering enough. The how printed cookbooks are drastical- er’s rose petal jam. Its simplic- and more of an rustic heat of Sicily erupts Fly bucking the trend of declining ity (the jam is made with just homage to the joys through the pictures of every- book sales shows as much. That and the sugar and rose petals), is part of the ingredients it day life and descriptions that glossy, take-me pictures that form the bulk of the book’s attractiveness. provides. A nice example is his will make you want to book a of any successful cookbook these days. The recipes themselves are a treatment of the relationship between the ticket to the island and relive As well as straightforward cookbooks peek into her childhood island and the olive tree, which provides summer. from star chefs, the market is saturated spent in Poland, and the “liquid gold” – the olive oil that provides The joy of both books is their artlessness with culinary memoirs. There are great pages are peppered with the base for so many of his dishes. He and lack of gloss. Their discovery becomes ones – Tessa Kiros’s Falling Cloudberries faded daguerreotypes of rel- writes as only an Italian can write about our discovery and we journey with them comes to mind – and there are ones that atives and her grandmoth- his country, but as a non-native, with the through their food. The Polish and Sicilian have simply capitalised on this trend. er Józefa. Essentially, we’re eyes of a discoverer. His writing is lucid, tourist board couldn’t have done a better However, there are two that stand out for following a reclaiming of a and recipes, simple. Spaghetti with cuttle- job, even if they tried. CITYA.M. 6 OCTOBER 2011 Lifestyle 35 How Boisdale owner LUXURY AND SANCTUARY: WHERE TO STAY fell hard for Jamaica

GEEJAM glorious tropical vegetation. An additional facility is Geejam has only six bedrooms, each one a self-con- a state of the art recording studio, this being the tained world-class luxury apartment set in the mid- brain child of legendary record producer Jon Baker. dle of the rain forest with a panoramic veranda. Recent guests before we arrived included Tom The “chalets” feel completely isolated, but are in Cruise and Grace Jones. If you want complete tran- fact connected to the hotel facilities, which include quillity and slightly edgy sophistication I cannot an excellent restaurant and a very cool bar, a pool over-recommend this wonderful, eccentric and very and private beach by wooden paths cut through the boutique hotel.

RIO CHICO every facility imaginable and great staff. It has eight After Geejam, we drove back along the coast, which bedrooms and can sleep up to 18 and must be one must rank as one of the world’s most beautiful car of the most amazing private residences available for journeys, to stay at Rio Chico, the jewel in the crown hire in the Caribbean (starting at low season for of the Caribbean empire belonging to the iconic around $45,000 per week). Rio Chico is exactly the hotelier Butch Stewart. Rio Chico is a stunning colo- sort of place that the bad guy in a James Bond film nial villa (built in 1898) set on a peninsula in 14 bides his time in enviable luxury before failing to acres of exotic gardens with its own private beach, take over the world.

The Cinnamon Hill London restaurant legend Ranald MacDonald golf course near Ochos Rios and, inset, found himself in paradise. Here’s why Ranald McDonald enjoying Jamaica’s rich pickings. HAD never been particularly desper- This has a lot to do with the fact that it is ate to visit Jamaica despite its proxim- moderately difficult to get to and like most ity to Cuba – to which I am a frequent great destinations, you can’t fly there Iand enthusiastic visitor. In truth I direct. We flew in a tiny plane with four imagined it to be overrun with tourists seats from Montego Bay. The conversation and relatively hostile. What I encountered, over the engine noise was enthusiastic but THE ROYAL PLANTATION, SANDALS was really delicious, the range of wines and spirits though, was completely different to what I difficult, and the view was entrancing as Located near Ochos Rios, this is Butch Stewart’s available excellent, and the bars which were far too had imagined. I certainly cannot claim to we wound our way along the coast to Port principal focus of activity, part of the massive numerous were also superb. One could, as we did, go be any sort of expert after a week, but I do Antonio in about 45 minutes (alternatively Sandals Hotel & Resort group. I was convinced it out and explore Ochos Rios and visit other restau- not exaggerate when I say that literally it is a lovely four hour drive) with a virtual- would not be my cup of tea, because it is only open rants and bars, tour the numerous world class golf every human contact I had with locals in ly unbroken tree line from shore to the to couples and is principally an all-inclusive resort. courses (I would particularly recommend Cinnamon Jamaica, whether I was wandering around hazy distant mountainous horizon. However our colonial style, richly-panelled rooms Hill – an immaculate golf course set in heart of a various towns and ports off the beaten We were there to take part in the annu- were magnificent and enormous with a huge bal- rain forest) and explore the country side, but I can tourist track, or in hotels or resorts, was al Port Antonio International Marlin cony and Jacuzzi. We even each had our own per- completely empathise with those who decide to uplifting. The Jamaican people, from my Fishing Competition. For those who love sonal butler who attended to our every need 24 simply hang loose, make no decisions and not leave experience, are incredibly friendly and big game fishing, this is the place to be, hours a day. The food in the numerous restaurants the resort. totally captivating with a lovely sense of but I won’t regale you with our fishing sto- humour and fun. From the first minute we ries, exciting as they are. Suffice it to say arrived at the airport, after a (not-too- we caught, tagged and released three mag- boozy) club class flight on British Airways, nificent specimens while drinking good I felt at home. local rum and smoking Royal Jamaica TRAVEL AND ACCOMMODATION We were ultimately destined for what cigars in the company of some extraordi- had been described to us as the most beau- nary characters, who each at least deserve Return Club World flights with British Airways from London Gatwick to Montego Bay in October costs tiful part of Jamaica: Port Antonio. Well, a chapter of a novel. from £1599.80 per person, including taxes. Return economy flights with British Airways from Port Antonio turns out to be one of the However, had we not been fishing we London Gatwick to Montego Bay in October costs from £629 per person, including taxes. most beautiful places on the planet, let would have had no shortage of activities, To book, visit www.ba.com/montegobay or call 0844 493 0787. alone Jamaica. Discovered by Errol Flynn from exploring the mountains, rain forest, in the 1940s, it soon became the paradise rivers, and beaches to simply relaxing in Stay at Geejam from £300 per room, per night including full breakfast and complimentary return hideaway for the fabulously rich, impossi- paradise. The town itself is also intoxicat- ground transfers from Norman Manley Airport in Kingston airport (complimentary transfers for stays bly amusing and notably gorgeous jet set. ing, pulsating and full of life and has a lot of four nights or more). All rates are per room, based on double occupancy. Port Antonio reminded me a little of my to offer the intrepid traveller as do other To book, call 01895 422 476 or visit www.islandoutpost.com. other favourite part of the world: the west local town and coastal villages, where coast of Scotland, around Arisaig, with there are refreshingly few tourists to be Seven nights at Sandals Royal Plantation, Ocho Rios, Jamaica on a Luxury Included® basis costs similar small perfect white beach coves seen. and verdant green hills rising up from the Our journey continued through from £1,589 per person, for October departures. Return flights, resort transfers and butler service are sea. Having said that, Port Antonio is obvi- Jamaica, and we stayed at some wonderful included in the price. Prices subject to availability. To book, call 0800 742 742 or visit www.sandals.co.uk. ously climatically very different and is resorts and hotels – some of which were so completely surrounded by lush tropical all-encompassing in their luxury and Seven nights at Rio Chico Private Estate, Ocho Rios, Jamaica costs from £3,581 per person, rain forest and the craggy Blue Mountain charm that it would be easy to stay put. for October departures. Return flights, resort transfers and butler service are included in the price. range that towers over the landscape in Relax and enjoy, but do take as much time Prices subject to availability and based on 12 people. To book call 08000 223 773 or visit the far distance at over 9,000 ft is on anoth- as possible to check out the real Jamaica as www.uniquevillasofjamaica.co.uk. For further details on Jamaica, visit ww.VisitJamaica.com. er scale. well. See right for my pick of the country’s Contacts: BA www.visitjamaica.com www.geejam.com ww.riochico.com www.sandals.co.uk Port Antonio is extraordinarily unspoilt. places to stay. 36

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 G LAST ISSUE’S HOOHA CHATEAU SAYS RLINE I PRAL F T IRAQI SOLUTIONS Lifestyle |TV&Games O C N BBC1 Golf orGolf Tour Golf Tour PGA Club 7pm 3 SPORTS SKY Uncovered 5am-5.30am Show Year the of Horse –Raw Snooker 7.30pm 7pm 2 SPORTS SKY 7pm 1 SPORTS SKY 6pm EUROSPORT BRITISH 5am-6am Snooker League Premier World League Premier Club ri ol Championships World Trail 12.20am 11.35pm 10.35pm 10.25pm 10pm 4.25am-6am Trip Road Antiques Zone: Sign Fighters Food Zone: Sign Roadshow Antiques Zone: Countryfile Zone: Panorama – Pay Low 12.25am 9pm 8pm 7.30pm 7pm 6.30pm 6pm     POLAND L J A PETARD I 9pm 12am Racemax rme egeWorld League Premier Darts Live T Tennis WTA h n Show One The CHOICE B News BBC Watchdog SCRATCH NG I SETT 1am B News BBC     iePeirLeague Premier Live F 11pm atnes B News BBC EastEnders; inZn:AlWr and Work All Zone: Sign B odnNews London BBC 3am-6am hsWeek This Ringside oia Weatherview Holiday usinTime Question einlNews Regional Ringside OIST S I MO SAUCE Ringside SUDOKU W:NXT WWE: B News BBC O N FORM mrc’ Cup America’s   1am 8pm W:Lt Night Late WWE: Hidden O S 11pm 1.55am 7.30pm A E T 10pm European h Rugby The 12.55am G Tour PGA 1am O R H    COFFEE BREAK h Rugby The 1.30am 3.40am 2am Sign 2.55am Live IAU   Sign Copyright Puzzle Press Ltd, www.puzzlepress.co.uk 471 8 8 8 9 9 7 5 5   1 1 4 9 2 2 5 3 12.55am Clarke. Noel starring sequel, Drama Premiere. FILM 11.20pm 10.30pm 10pm 4am-6am 9pm tutorials. baking two of first the give judges The Masterclass: Off 8pm Home the of History 7pm –ItTakesTwo6.30pm 6pm B2ITV1 BBC2 Investigation Springer Declare to 3.30am Minds Football Poker 11pm Mum Botox Proud: & Pushy 9pm 7pm LIVING SKY Pass Press 11pm 10pm 9.45pm Football International Under-21s Pass Press ESPN 7pm ESPN 11.30pm-12.35am 10.30pm Cricket League Champions 8pm KAKURO 1 4 4 6 25 714 5 3    1 6 8 9 9 2 36 5 rmnlMinds Criminal Extra Kicks: ESPN orWdig US Weddings Four fWlsCudTl:The Talk: Could Walls If Cycling CHOICE Eggheads h ra rts Bake British Great The Bones Show Goal 1am F:TeUtmt Fighter Ultimate The UFC: 1am okteWeek the Mock 1 2 7 5 3 Bones 5am-6am SNKcs Extra Kicks: ESPN tityCm Dancing Come Strictly 6 6 8 8 9 2 7 38 5 5 rts Superbikes British B erigZone Learning BBC B News BBC esih;Weather Newsnight;   5.10am-6am 12am UFC S:CieScene Crime CSI: 14 4 8 8 9 9 7 71 3 12am 9pm 2.40am ie Britannia Mixed 4.20am 63 63 9 25 2 2 2am Adulthood: 7.45pm ol eisof Series World 11.30pm 1 1 6 9 2 3 Twenty20 Criminal UFC MotoGP 8pm ieCollege Live 2008. Maury 7.15pm Nothing 10pm Jerry Live Ringer ESPN separate block. a in be must it but column, more than once in a row or digit may same The occur ablock. in twice digit same the use not must you and 1-9 digits the use only You can it. of left the to or above box the in total the to up adds block each that so grid the Fill is at least one nine-letter word in the wheel. the in word nine-letter one least at is There word. every in once used be only can letters or more, all the contain must central and letter proper nouns. Each word be must of three letters or words foreign plurals, be may which of none ten minutes to find as many words as possible, have you Wordwheel, the in letters the only Using KAKURO The nine-letter word was word nine-letter The WORDWHEEL WORDWHEEL PERMANENT ot 66 Route 3.50am-5.30am Highlights Championship 2.35am Headlines News ITV Zone; North Degrees 71 Show Ross Jonathan News London 10pm 9pm 8.30pm 8pm Tonight Needham: Ben for Search 7.30pm 7pm 6.30pm 6pm rt bu hl Brides Child About Truth Pregnant Mum Off Living and Dumb Young, Show 1.45am Moons New The EastEnders: Soldiers Young Show 10.30pm 7pm E4 Soldiers 7pm THREE BBC h e Moons New The e orMother Your Met agTheory Bang hwadTell and Show university. a visits gang 10pm Mother Couples i agTheory Bang Big Night Quiz Moyles’ Hollyoaks Gear Top Emmerdale CHOICE odnTonight London Emmerdale 3.35am ITVNewsatTen 2.15am 11pm h newees The Inbetweeners: The rts orn Car Touring British 9.30pm e esnsWl Good Well Nelson’s Lee 9pm 10pm iteByLs The – Lost Boy Little T News ITV ooainStreet Coronation SUDOKU 4.05am-5.05am e esnsWl Good Well Nelson’s Lee aiyGuy Family 10.35pm 8.35pm o e Your Met I How neaeand Underage 11.25pm Wilfred 8pm EastEnders il Connolly’s Billy 7.35pm 12.45am T Nightscreen ITV 12.30am 9pm ap Endings Happy 1.10am 8pm 12.15am 11.35pm EastEnders: 10.30pm Perfect Young The 2.35am 08 30 45 45 14 66 16 13 21 15 11 810 h Big The o I How 10.35pm Chris 11.50pm Scrubs The 12 12 9          The 28 The     19 41 316 23     22 35     okr School Cookery Countdown 3.35am Dispatches Doctor?: Your Trust You 1.50am 12.55am Musicon4:4Play:DukeSpirit12.10am 11.10pm 11.05pm USA Nightmares 10pm 9pm 8pm 7.55pm 7pm 6.30pm 6pm CHANNEL4 Discoveries Wars Stars Pawn 3am Wild What? Catch Deadliest Dealers 7pm DISCOVERY 8pm 7pm HISTORY mrcnRestoration American Wars Truckers Road Restoration American odTruckers Road Survivor 2.25am 2am Switched Reaper Engagement of Rules 24          14 13 7 epWekMysteries Wreck Deep Mythbusters Mysteries Wreck Deep o e orMother Your Met I How hne News 4 Channel 2am    anStars Pawn dctn Essex Educating Simpsons The onr os Rescue House Country 11pm 5am-6am 21 O asysKitchen Ramsay’s L 12am ilSre Blues Street Hill Southland 4.15am 9pm ihigo h Frontline the on Fighting 4thought.tv     TheFilmShow hwadTell and Show Hollyoaks 34 1am 33 admActs Random marsigBodies Embarrassing edis Catch Deadliest 5.10am-6.05am 30          anStars Pawn 4.30am c Pilots Ice erGyl:Born Grylls: Bear ln nthe in Alone 14 10 10 U S    10pm 2am Glee 11pm 14 Ancient 8.30pm 2.40am 8pm T 23 16 i Riggers Oil Storage 5am-6am Storage 17 3.30am 3 er or Weird 12am 9pm 12.40am 3.10am 4.25am 10pm Wheeler A 11.30pm T 29 21 Can Ice 4am Ice 29 11 4 P E CHANNEL5 Side 11pm 10pm Boy 8-Limbed The 9pm 8pm Update News 5 7.30pm 7pm 6.25pm 6pm 12am Doctor HouseBusters Breaks Weekend Challenge Challenge Secrets aoradDelivery and Labour 4am Pregnant Was I Know Didn’t 1am Pregnant Was I Know Didn’t I ER the in Life Emergency: What? Ate Kid Your Pregnant Was I Know mrec:Lf nteER the in Life Emergency: 5.10am-6am 4.20am 2.40am Wars Simpsons 7.30pm SKY1 7pm HEALTH & HOME DISCOVERY 12am 11pm etoe nSeconds in Destroyed Quest Treasure 3.50am orKdAeWhat? Ate Kid Your it Days Birth 5Newsat7 ABabyStory xrodnr People: Extraordinary Away and Home o oBidaVolcano a Build to How SuperCasino 1.50am osKm nGangs on Kemp Ross i rte’ i nthe on Bit Brother’s Big a Order & Law 24 24 23 22 20 17 15 14 9 7 6 5 3 1 ACROSS 25 i Brother Big 4.10am Futurama ie Monsters River HowDoTheyDoIt?: h rse Files Dresden The tsM rteDog the or Me It’s K TV OK! 4.55am 4.35am          9pm ___ energy (3) Liveliness and (4) me to Belonging of(6)direction the Indicates (10) luck Bad (3)Broadcast Irritate (3) (coll) (4,6) or security comfort financial of State (6) inprotest often Loud utterance; downfall of (4) or ruin the Cause Goon (3) Dissimilar (6) (4) light of Shaft famous fairy-tale (6) Printed characters (4)Printed characters 5.35am-6am o Design Top QUICK CROSSWORD ih Cops Night     iheasWild Michaela’s Glee 5.30am-6am 5.10am 8pm and the Beast iheasWild Michaela’s og ud to Guide Rough 4am 8.30pm 5am-6am 1am 10pm 11pm IDidn’t 10pm County 4.40am Road 2am 12am 3am House  House The I , VPICK TV nighsrd nCalifornia. in ride his before ending pets exotic for sanctuary a and Canyon Grand the visiting of journey, leg his final the on goes comedian The 9PM ITV1, 66 ROUTE CONNOLLY’S BILLY century. 20th the of turn the from events chart to helping material archive with communities, mixed-race Britain’s of history the Exploring 9PM BBC2, BRITANNIA MIXED robbery. failed a in driver getaway as a past criminal his into back dragged solicitor a as Glenister Philip starring thriller, Conspiracy series. New 9PM BBC1, HIDDEN    18 12 11 10 8 4 3 2 1 DOWN 21 19 16 13 CITY As well (3) (3) Travel piste the on (7) attached be can a sleeve toOpening which Golfing device (3) (7) hooves and hair, nails feathers, Protein found in (3) (inits) world Vehicle from another Morose (5) (6) inBorneo Sultanate espionage (3) Engage in (5)Entice Boy (3) promise (6) Go back on one’s (3)perfume cologne, de ___   A.M.   6 OCTOBER 2011 CITYA.M. 6 OCTOBER 2011 Sport 37 Results Button commits his future to McLaren =FFK98CC AF?EJKFE<ËJG8@EKKIFG?PEFIK?

▲ fellow Brit Lewis (right) “I’ve won four of the JENSON BUTTON | F1 CAREER FACTFLIE :i\n\%%%%%%%%%%%%%%%%%%%% '  ( DXZZc\j]c[%%%%%%%%%%%%%%%% '  ' FORMULA ONE Hamilton this time greatest races of my life here, :cXpkfe.- 8kk1)#).( BY JAMES GOLDMAN around. I’m currently lying second in 2000: Williams 12 points 8th place JFLK?L<K)'Ç>iflg91Jfd\ij\k(+-$+ )' fm\ij2:B`\jn\kk\i,- 2NXii`fij(*,$/ )' % Jfd\ij\kn`eYp()ilej% Jflk_8ljkiXc`X)(+$) )'2;A?Xii`j('/#:A=\i^ljfe .' 2IfpXc:_Xcc\e^\ij9Xe^Xcfi\)(,$/ )'2KD;`cj_Xe .+#MBf_c`.'#JNKX`k,$*) %IfpXc:_Xcc\e^\ij9Xe^Xcfi\ nfeYp)n`Zb\kj% Heroes of 1981 mourn Dilley ;8IKJ G8IKPGFBI8E;GI@O E\n:`kpn\jk :fem\ek`fe:\eki\#;lYc`e Ç)e[i[1Af_e?\e[\ijfe JZf  YkN\jE\nkfe one of the most distinctive fast bowlers in BXYi`XcËj9flekp J?`kZ_Zfkk ,$( -%+'(;\Z\gk`m\ JA;ifne\ ()$()9`ewickets at an average of 29.76 *LccX K<;liZXe /$( lined up to pay tribute to fast and another former England team- .%+'(D`j[\d\Xefli I?l^_\j *$()Gfj`k`fe JJXe[\ij  bowler Graham Dilley, who died mate Chris Old remembers him as ()$(*DiBe`^_kc\p BKFËe\`cc ()$( M /%('(;`Z_f_ ::Xkc`e )'$()Afee`\Jblcc B=Xccfe (($(* yesterday aged 52 following a short ill- one of the fastest bowlers this country E`eXIfj\ AG=X_p /$( ness. has ever produced. /%+'(>ljkf I?l^_\j -$+=Xm)Hl`k\8K_`e^ J Dilley represented his country in 41 “He had a long run-up, but it was a JXe[\ij (,$)*J_\i\B_Xe BKFËe\`cc .$( Tests and 36 one-day internationals nice flowing run and he put every- 0%('(=\[fiX :Xk_\i`e\>Xeefe /$()J`cm\\ BKFËe\`cc  /$(*JX`iXXd AG=X_p 0$) between 1979 and 1989, but will be thing in when he got to the crease. CL;CFN best remembered for the part he But it looked good and he worked )%('(9XZZXcXli\Xk\ JKn`jkfe$;Xm`\j -$,=Xm)=ffcËj played in England’s remarkable victo- very hard on it,” said Old. N`c[ZXk 8GDZZfp (($+*8^\ek\IfdXef GXlcDfcfe\p  ry over Australia in the third Test of “Before the Australia series we were ,$( )%+'(8d\i`ZXeCX[`\ IpXeDX_fe /$(,=Xm)=cpKfne the series affectionately remembered in the West Indies which was his first GXlcDfcfe\p (($(*8kGi\j\ek IAf_ejfe (+$( as ‘Botham’s Ashes’. trip abroad. At that stage he was as *%('(9fc[G\ib :NXcc`j (+$():Xcpgjf9Xp 8GDZZfp  His contribution of 56 to a 117-run quick as most of their bowlers and he .$)Ak=Xm*Gcleb\kk 8[XdN\[^\ ,$( *%+'(DXli`k`ef 8GDZZfp )$(=Xm)DXc`YlJle C partnership with Ian Botham, who really rattled their cages. 8jg\cc **$(*>i\XkDXk\j KJZl[Xdfi\ 0$( went on to make a brutal 149, helped “I played quite a bit against him +%('(AfccpIf^\i GXlcDfcfe\p (($+)N\jk\iIfjj JN England to an improbable 18-run vic- when he was with Kent and he was =cXeX^Xe +$(*;\]`e`k\8ccJkXi 8GDZZfp ,$-=Xm tory after the home side had been seriously quick. But as he got older he +%+'(KiX`kfi GXlcDfcfe\p +$()J`eX[`efl IAf_ejfe  ,$(*:fi[`cc\iX :XccldN_`ccXej 0$) staring down the barrel of a seeming- learnt to swing the ball, cut his pace ,%('(FjZXiJlej\k GXlcDfcfe\p +$((=Xm)C`\lk\eXek ly inevitable innings defeat. and became more accurate. But he ;Xe D`jjCDXjk\ikfe /$( Botham recalled the conversation was always aggressive.” EFKK@E>?8D the pair had when they came to the After retiring, Dilley )%''(>lXmX JDC\m\p ('$()DflekDZc\f[ ; Jn\\e\p ('$(*l\jk DXkk_\n;Xm`\j  many times. and England women’s 0$( *%''(ClZbp?\eip AG=X_p .$+=Xm)@[c\i J;\JfljX  “But I have many, many fond mem- bowling coach, before *$(*CX[pDXe[p G?XeX^Xe (.$) ories of him. I remember he ran into becoming head cricket *%*'(=\ee\cc9Xp C;\kkfi` ,$()K\`[\G\Xb J;\JfljX  bowl his first ball in the Caribbean coach at Loughborough (*$)*Fe\Ypk_\befnj JDC\m\p (+$( +%''(:_Xe^`e^K_\>lXi[ G?XeX^Xe ()$()N`^^p and the heel fell off his boot – and typ- University. Jd`k_ ;Xe\FËe\`cc /$(*8dgc\]fik_ J;\JfljX +$(=Xm ical Graham – he’d only brought one ECB managing director +%*'(8i\X=`]kpFe\ DXik`e;np\i -$()?lek\i=finXi[ pair with him, so there was panic. Hugh Morris added: “As well B=Xccfe )$(=Xm*J\XF]>Xc`c\\ ;Xe\FËe\`cc ()$( “He was a fantastic cricketer and as being a bowler of the Dilley, a fast bowler ,%''(=`^Xif G?XeX^Xe -$,=Xm)Dfefgfc`q\ KG Hl\Xccp *$(*Jle[Xp9\jj B=Xccfe )$( had a lot of talent. He was plagued highest class, Graham made by trade, will be best ,%*'(GXiX[`j\Jg\Zki\ DXik`e?Xic\p (,$))9iXm\ with injuries in his neck and knees, an immense contribution to remembered for his ;i\Xd Alc`\9lib\ ()$(*K`jcXXd IpXeKXk\ .$( which probably stopped him playing our game as a coach – and his half century in the KFN:`XekFDliZ_l ?XiipJb\ckfe /$()9XZbKfGXi`j D`jj:9foXcc (($+Ak=Xm*CfdYfb Afj_lXDffi\ (($+ Ak=Xm *%,'(Ile8cfe^9fp ;::fjk\ccf ,$+)Hl`\kN_`jg\i :_Xic\j>i\\e\ ('$((=Xm*JdXcc=cp 8>cXjjfeYlip ('$( +%)'(?`^_cXe[I`m\i C\\<[nXi[j ('$()9\]fi\9ilZ\ A 8DZZXik_p ('$**GfYjKifg_p IfY\ikDZZXik_ 0$) Farah ends momentous Cape Town to play host +%,'(DXib\[DXe AXb\>i\\eXcc 0$))Fm\ikfeCX[ AXZb;fpc\ ('$*=Xm*Mfe>Xc\e JGAfe\j 0$) ,%)'(;`ikp9\ik`\ KAG_\cXe .$))K_\=\i`Zb A\i\d`X_ DZ^iXk_ (*$/=Xm*Eld\ifcf^p Kfd:Xeefe -$( year with Euro award to Saracens cup clash JG<<;N8P :_Xcc\e^\1B`e^jCpee+, C\n`jB\ii(( K\XdLJ8*- <[[`\:Xjkif(* XYXe[fe\[X]k\i(*_\Xkj$i\jlckjkXe[j% KYi YkD9X^_[Xk`j :pg  and finished ahead of a high-class Saracens chairman Nigel Wray .$- .$+ )$--$+% BRITISH long-distance runner Mo field that assembled for the New York SARACENS have confirmed they said: “The world is becoming Farah has capped a sensational season Half-Marthon back in March. will play their Heineken Cup pool increasingly smaller and well con- by being named male European As well as those landmark victories, stage clash with Biarritz in Cape nected, and, as a club, we are com- KF;8PËJ;@8IP Athlete of the Year. Londoner Farah also ran a European Town in January, the first time the mitted to thinking big and creating =ffkYXcc.%+,gdlec\jjjkXk\[ iflgFe\1 The 28-year-old starred at the World 10,000m record of 26 minutes 46.57 tournament will see a fixture played major events that people want to >\idXepm9fje`X$?\iq\^fm`eX .gd #>i\\Z\mJXeDXi`ef Championships in Daegu last month, seconds to win at the Diamond outside Europe. watch.” +gd %>iflgKnf1Jn\[\emJcfm\e`X -%)' %>iflg=`m\1 claiming gold in the 5,000m just days League meeting in Oregon in June, The International Rugby Board Saracens, who have 13 South :ifXk`XmJgX`e .%*' %>iflgJ`o1Gfikl^XcmGfcXe[ 0gd % after he was narrowly beaten by and in July he set a new British record and European Rugby Cup have African-born players in their squad, >iflgJ\m\e1C`\Z_k\ejk\`em@kXcp +gd %>iflg<`^_k1 Ethiopian Ibrahim Jeilan in the of 12:53.11 over 5,000m in Monaco. approved an application from the are not the first English club to 8q\iYX`aXemEfinXp )gd #@Z\cXe[miflgK\e1 8ljki`Xm?fccXe[ -gd #Clo\dYfli^mJZfkcXe[ -%*' % 10,000m. Fellow Brit Jodie Williams was Premiership champions, which will stage a fixture abroad. Wasps and 9cl\JhlXi\9\kGi\d`\i1:XdYi`[^\Lk[mJkfZbgfik% He was equally successful at the revealed as the winner of the female see South Africa become the 10th Harlequins played out their LV= Cup European Indoor Championships in European Athletics Rising Star Award. country to stage a match in Europe’s meeting last season in Abu Dhabi. email [email protected] 38 Sport Usmanov overtakes Tevez side of QPR’s Mittal story lost in in rich list

▲ translation – BUSINESS OF SPORT BY FRANK DALLERES

ARSENAL shareholder Alisher Usmanov has overtaken QPR steel Joorabchian magnate Lakshmi Mittal as the sec- ond richest man in English football, behind Manchester City owner Sheikh Mansour. Usmanov’s fortune has swelled from £8bn to £12.4bn in the last 12 ▲ FOOTBALL demned before the case has really months, moving him above Mittal, been looked into.” whose wealth has shrunk by a third BY FRANK DALLERES The day after the now-notorious to £11.8bn, according to research by incident, Tevez released a statement FourFourTwo magazine. MANCHESTER CITY outcast Carlos insisting his apparent refusal to take Abu Dhabi-based Sheikh Mansour, Tevez has been presumed guilty of the pitch had been a “misunderstand- whose lavish spending since taking refusing to play on the basis of flawed ing”, something Joorabchian said tel- over in 2008 has elevated City to the evidence, his advisor Kia Joorabchian evision pictures did not convey. Premier League’s top table, still boasts insisted yesterday. “The main issue is that what hap- the deepest pockets by some distance, Joorabchian, who is not an agent pened on the bench in Munich is a lot with £20bn. but has a long association with Tevez, of confusion,” he added. “We didn’t Chelsea owner Roman said television footage of his alleged see what really happened on the Abramovich’s bank balance increased refusal to come off the bench during bench. The TV footage showed a total- by some £3bn to £10.4bn, but he last week’s defeat at Bayern Munich ly different light.” remains fourth, while Tottenham was confusing and misleading. He continued: “My opinion is that owner Joe Lewis is sixth with a stable He added that a post-match Carlos has fought throughout £2.8bn. interview with Tevez, in his career to play. I’ve never Arsenal majority shareholder Stan which he appeared to known him to be the con- Kroenke, who has thus far outma- admit his refusal to play, trary.” noeuvred Usmanov in the Emirates was completely mis- Tevez was inter- Stadium power struggle, is eighth translated and said viewed via a translator with a £1.8bn fortune. that – other Premier after the Bayern Former England captain David League clubs and man- match, with a City Beckham remains by far the richest agers would have treat- employee quoting him player, with £135m, while England ed the player differently. as saying: “I did not feel boss Fabio Capello tops the managers’ Tevez is currently serv- right to play so I did not.” list with £38m. ing a two-week suspension That version of events was while City conduct an inter- disputed by Joorabchian. nal review of the incident, after “Carlos does speak English but TOP TEN | ENGLISH FOOTBALL RICH LIST which City manager Roberto Mancini it’s not good enough to host a full- declared the striker’s career at the blown interview. If you don’t have a 1. Sheikh Mansour Man City £20bn club to be “finished”. very professional interpreter then you 2. Alisher Usmanov Arsenal £12.4bn While the 27-year-old looks certain have a problem. Both questions were to leave the club in January, interpreted incorrectly, and both 3. Lakshmi Mittal QPR £11.8bn Joorabchian (inset) declined to fore- answers were then misinterpreted.” 4. Roman Abramovich Chelsea £10.3bn cast Tevez’s intentions but conceded Joorabchian cited Cesc Fabregas 5. Liebherr Family Southampton £3bn the former West Ham star felt unfair- and Luka Modric as examples of play- 6 Joe Lewis Tottenham £2.8bn ly treated. ers who also wanted to leave their “There is an investigation going on. clubs – Arsenal and Tottenham – but Tevez is currently 17 Denis O’Brien Doncaster £2.5bn I don’t want to predict what Carlos who were treated more favourably. serving a two- 8. Stan Kroenke Arsenal £1.8bn wants and doesn’t want to do,” he “Roberto [Mancini] has his style of week suspension. 9. Malcolm Glazer Man Utd £1.6bn told the Leaders in Football confer- management and his style is very Mike Ashley Newcastle £1.4bn ence yesterday. “I think what he feels direct; it’s totally different to that of, Picture: ACTION 10. is he has been clearly judged and con- say, Sir Alex Ferguson.” IMAGES Parker: England will go for European international fixture list the jugular in Montenegro set to get major overhaul from 2014

▲ eral secretary Gianni Infantino said framework of the international ▲ FOOTBALL FOOTBALL play for England we want three points. all 53 European national associations match calendar. Without harming BY FRANK DALLERES I don’t think Friday is any different. We had agreed in principle to the anyone there will be a great benefit to ENGLAND midfielder Scott Parker are going there to win and qualify.” ENGLAND games on Mondays and changes, which will be part of a re- everyone,” Infantino said at the insists there will be no holding back Parker is being tipped to reprise the Thursdays will become a regular branding programme called the Leaders in Football conference in against Montenegro tomorrow night holding midfield role in which he occurrence from 2014 under a major Week of Football designed to promote London yesterday. despite only needing a draw to clinch excelled in last month’s win in shake-up of the way qualifying match- the flagging international game. “We have discussed this with all 53 their place at Euro 2012. Bulgaria, having missed the last game es for major championships are struc- Broadcast and marketing rights for associations and support was unani- A point in Podgorica against their against Wales. tured. the fixtures will be sold centrally by mous. Of course it has to be passed closest rivals for top spot in Group G Manager Fabio Capello, meanwhile, Fixtures will be grouped into dou- Uefa and Infantino said the govern- formally in Uefa commissions but if would ensure qualification for next is sure to depart after Euro 2012 ble-headers three days apart and kick- ing body would be ready to take the all are in favour the chances are quite summer’s tournament – but Parker regardless of England’s performance. off times harmonised, meaning revamped format to market in the high that this will be the format of wants a win. Football Association chairman David teams will play on a Thursday and first quarter of 2012. the future for national team football.” “The fact we only need a point does- Bernstein said: “He is our manager Sunday, Friday and Monday or “This is an important step to pro- Infantino added that the current n’t change our approach one bit,” said until the end of the European Saturday and Tuesday, starting with mote national team football and foot- format, which leaves Saturdays free, the Tottenham star. “Whenever we Championships. That is it.” the qualifiers for Euro 2016. Uefa gen- ball in general. It is within the had “a very negative impact”. 39 “ON HIS DAY HE WAS AS GOOD AS MOST” BOTHAM MOURNS LOSS OF ASHES HERO DILLEY: P37

THE BREAKDOWN | NO WAY BACK? PLAYERS WHO WORLD CUP BRIEFS CAME BACK FROM THE BRINK Fragile French are there BOTHA BLOW FOR BOKS HE MAY look certain to leave Manchester City SOUTH AFRICA’S vastly experi- at present, but Carlos Tevez would not be the enced lock Bakkies Botha has been first footballer to smooth out seemingly irrec- ruled out of Sunday’s World Cup oncilable differences. Here are three: quarter-final against Australia after for the taking, says Flood suffering a recurrence of an Achilles injury. There is also no place in the Springboks 22 for talismanic prop Tendai Mtawarira in a side that will Fly-half believes a be captained by hooker John Smit. Wings Bryan Habana and J P strong start will Pietersen have both allayed any fears about their fitness by both render quarter-final being named in the starting line-up. a walk in the park SONNY PLANS TO ATTACK NEW ZEALAND star Sonny Bill

▲ Williams insists the All Blacks won’t RUGBY UNION be abandoning their attacking prin- BY JAMES GOLDMAN ciples in pursuit of World Cup glory. New Zealand’s last eight opponents Wayne Rooney stunned Manchester United ENGLAND fly-half Toby Flood believes Argentina will look to stifle the host with his public request for a transfer. A mere World Cup last eight opponents nation on Sunday, as 12 months on and back in the form of his life, France are in such a state of disarray they did so suc- the episode has long since been forgotten. that a strong opening 20 minute salvo cessfully will as good as seal a semi-final spot against for the Red Rose. England. After narrow victories over But even Argentina and Scotland, coupled with without the various high-profile off-field indis- the influen- cretions committed by members of tial pres- the squad, England’s passage to this ence of stage of the competition could hardly fly-half Dan be described as smooth. Carter, Williams But manager Martin Johnson’s tra- is confident the All Blacks can stick vails pale into insignificance when to their principles. “Hopefully we can compared to those of his French coun- still express ourselves out there and terpart Marc Lievremont, who has play with the freedom that we have had to reject claims of a mutiny and been playing with,” he said. “We contend with the humiliation and have to acknowledge that this is subsequent media backlash following knockout football, that there’s no Luka Modric’s Tottenham days looked num- last weekend’s defeat against Tonga. tomorrow. You’ve just got to find the bered when he asked to miss the Man City And Flood, who is set to play under- right balance.” game this season because he was interested study to Jonny Wilkinson again unless in leaving. Now back in the team and flying. Mike Tindall fails to recover from a JONES TRUSTS WELSH KIDS dead leg, has instructed his team- STEPHEN JONES is backing Wales’ mates to go for the jugular from the youngsters to launch the side into off in order to counteract the antici- the World Cup semi-finals for the pated French backlash. first time since 1987. Wales coach He said: “What we must do against Warren Gatland’s matchday squad France is say ‘for 20 minutes, this is to face Ireland on Saturday is set to massive.’ Our starts have been poor Flood starred in the Six Nations win over France earlier this year Picture: ACTION IMAGES contain a clutch of players aged 23 but if we get it right here then hope- and under. And fly-half Jones, the fully we’ll remove any resistance we’re Nicolas Anelka was sent home. And as well. In my experience, especially most capped player in Welsh rugby going to have. We have to understand back row forward Tom Palmer, who is my first season in France at Stade, we history with 102 Test match appear- as a side that we blitz them from also likely to start on the bench on weren’t particularly mentally strong ances, believes their impact cannot minute one. Saturday, believes England must prey as a group and if things started to go be understated. “Team morale is fan- “We know they are in a situation on Les Bleus’ mental fragility. wrong then we folded fairly easily. tastic,” Jones said. “The younger now when it looks like they are in dis- “From my knowledge of French “You can just feel when your team, players have a high rugby ability, array – but I have been in teams that guys and what their mentality are people aren’t supporting you, people and they've gone out there and looked in disarray and it’s a very dan- like, it tends to be that if things don’t aren’t talking, people just go missing enjoyed throwing the ball around. Steven Gerrard performed a huge U-turn in gerous thing. It can be a very powerful go their way or things aren’t going a little bit. But France will be hugely They have been top-drawer. They 2005 when he pulled out of a proposed move tool.” too well they do make quite a lot out committed to this match. They’ll see are fearless. They back themselves, to Chelsea at the 11th hour and reaffirmed his Comparisons have been drawn of it,” said Palmer, who plays his club this as another chance. and the fact so many good young- commitment to boyhood club Liverpool. between Lievremont’s squad and the rugby for Stade Francais. “Things haven’t gone too well, they sters have come through, put their French football team, who went on “It happens to the French. Look at lost two games in the pool, but they hand up and raised the bar has real- strike at the 2010 World Cup after their football team in the World Cup are still in a quarter-final.” ly had a good knock-on effect.”

SPORT | IN BRIEF Murray survives scare France claim to be stronger for their Tonga trauma TENNIS: Andy Murray came back from

a break down in the deciding set to ▲ together this week,” Yachvili said. “We the best, maybe in the world, at the beat Marcos Baghdatis in the opening RUGBY UNION didn’t train for three months to stop basics. round of the Japan Open. The Cypriot BY JAMES GOLDMAN at the quarter-final. “That’s why we trained a lot on the Les Bleus look to led 3-1 in the third set but the Briton “It’s the quarter-final of the World basics this week. We have to put a lot battled back to complete a 7-6 (7-4), 2- FRENCH fly-half Dimitri Yachvili Cup and maybe we will never play of pressure on them and, as usual, be 6, 6-4 victory in Tokyo. “He played well insists last week’s humbling at the again in the quarter-final of the World better in the forwards than them.” copy England lead under the conditions,” Murray said. “The hands of Tonga has been wiped from Cup. That’s the motivation. We know Yachvili highlighted England fly- hardest thing for me always is changing the memory banks as preparations for that if we play the same way we half Jonny Wilkinson and centre FRANCE defence coach Dave Ellis from playing outdoors to indoors.” Saturday’s World Cup quarter-final played last week we cannot win Manu Tuilagi – particularly his ability believes that by following England’s against England intensify. against England. It’s going to be very to cross the gain line as key dangers – 2007 example Les Bleus can advance Somerset through to last four Defeat against the Pool A minnows hard, but on Saturday it will be anoth- while recognising the challenge pre- to the World Cup semi-finals. CRICKET: Somerset secured a place in sparked claims of a mutiny against er team than last Saturday.” sented to break through their defence. England stuttered during the group the semi-finals in the Champions coach Marc Lievremont, but the France have concentrated on iron- “We respect a lot this team because stages four years ago before the sen- Twenty20 League with a 12-run win Biarritz No9 is adamant those ing out their flaws since the they’ve conceded just one try since ior players took on extra responsibly, over Warriors. Craig Kieswetter rumours could not be further from Wellington defeat which saw them the beginning of the World Cup,” he as France have done this time around. anchored Somerset’s innings with 56 the truth, as France look to reverse advance to the last eight in uncon- said. Ellis said: “The players haven’t taken not out as they posted 146-4. And recent World Cup history against vincing fashion. “This is one of the best teams in the anything out of the hands of the Steve Kirby, Alfonso Thomas and Murali opponents who have knocked them “During the quarter-final, semi- world. We train this week to be as coaches, they've just taken more Kartik all finished with two wickets as out of the last two tournaments. final and final, the most important good as them. If we are efficient then responsibility for their actions.” the South Africans lost their way. “We changed a lot; we talked a lot thing is the basics and the English are we can win against England.” YYoour gglobal MT4 Forex broker

Which currency will deliver the knock-out blow?

LLongong or short? YYoYouou decidedecide. Forex and CFDs may not be suitable for you as they carry a high degree of risk and you can lose more than your initial investment. alpari.co.uk/mt4alpari.co.uk/mt4

Best Active Best Execution Falcon Awards for Best Forex Forex Broker Europe Best UK Best Retail FX Best Active +44 (0)20 7426 2890 Trading Tools House Client Services Broker Excellence Award Forex Broker Platform Trading Platform