ESCAPE
THE CITY
Issue 1,305 Friday 21 January 2011
BALLS BACK
IS
POLITICS
▲
BY JULIET SAMUEL
ED Balls was last night installed as
Labour shadow chancellor in a dra-
matic move following Alan
Johnson’s resignation from the
post after less than four months.
Johnson said he was leaving “for
personal reasons” as Balls, the
architect of Gordon Brown’s eco-
nomic policy and a former treasury
minister, returned to a role shaping
the party’s economic stance.
Ed Miliband’s decision to shift
Balls back into an economic brief
signals a hardening of Labour’s
stance on the deficit, with Balls
insisting that there is “an alterna-
tive to the coalition’s austerity and
cuts”.
The move is likely to lead to a
more confrontational opposition to
George Osborne’s cuts. Balls said in
August: “It is time for Labour to
take on and win the argument [on
the deficit].”
While in office under Brown, he
pushed for higher public spending
as a solution to economic uncer-
tainty and has advocated making
the 50p top-rate tax permanent.
He is also known for a controver-
sial and aggressive style that
marked Brown’s years as Prime
Minister and has been accused of
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regularly briefing against his politi-
cal enemies.
His appointment is a reversal
from a time when he was Ed
Miliband’s senior at the treasury.
Dan Corrie, former head of
Gordon Brown’s policy unit and
now at FTI Consulting, said: “Ed
[Balls] will have to respect the fact
that his old side-kick is the boss,
but he has shown that he can buck-
le down for the cause.”
Michael Fallon, deputy chairman
of the Conservative party said: “The
man who is responsible for
Britain’s economic mess has
returned. The Labour party has
learnt nothing and is now led
entirely by Gordon Brown’s old
team.”
Johnson’s resignation sparked
a full-scale reshuffle on the opposi-
tion front benches. Balls’ wife,
Yvette Cooper moved to shadow
home secretary, while former
Treasury secretary Liam Byrne,
who famously wrote “there’s no
money left” at the end of Labour’s
term in office, takes over a shadow
brief in work and pensions.
In a conciliatory move, Ed
Miliband moved Douglas
Alexander, who supported David
Miliband in Labour’s leadership
race, to replace Cooper as shadow
foreign secretary.
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EVERTHING YOU NEED TO
KNOW ABOUT ED BALLS
● Education: Balls was educated at
Oxford and Harvard universities.
● Economic theory: Closely allied to
Brown, he was the author of a speech
in 1994 in which Brown referred to
“post neoclassical edogenous growth
theory”. The convoluted phrase was
mocked by senior Conservative Michael
Heseltine who told his party confer-
ence: "It’s not Brown’s, it’s Balls!"
● Regulatory policy: He was behind
the creation of a tripartite regulatory
system that split roles between the
Bank of England, the FSA and the
Treasury. He also signed off on Brown’s
line that his policies would lead to “no
more boom and bust”.
● Euro opposition: Balls
was instrumental in devising
the “five economic tests” that
kept Britain out of the euro
despite Tony Blair’s push to join
the single currency.
● Bullying accusation: A Labour MP
branded him a “bully” in 2009 over the
appointment of a Children’s
Commissioner, a claim Balls denies.
● Bloomberg lecture: In August he
gave a speech opposing urgent cuts to
the public deficit.
Richard Partington
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 2 News
Why Ed Balls is a flawed economist
EDITOR’S LETTER
ALLISTER HEATH
LIKE the cat who got hold of the
cream, Ed Balls, the new shadow chan-
cellor, could hardly conceal his delight
yesterday. But in addition to being the
culmination of a colourful tale of per-
sonal intrigue, Alan Johnson’s shock
resignation will have an electric effect
on Westminster. Out goes an amiable,
reasonable but incompetent and innu-
merate shadow chancellor; in comes a
combative, ultra-aggressive political
heavyweight, a master at twisting sta-
tistics and devising economic policies
to wage political war. The last residues
of New Labour – that centrist, relative-
7th Floor, Centurion House,
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Craig Gaymer
Pictures Alex Ridley
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Commercial Director Harry Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
GE EXPECTS DOUBLE-DIGIT GROWTH
IN CHINA
General Electric expects “solid dou-
ble-digit” sales growth in China this
year and “for a long period of time”,
although revenues there have fallen
short of expectations, chief executive
Jeff Immelt has said. Mr Immelt said
he was “quite happy” with the
progress of GE’s business in China.
BRIGHT FOOD WALKS AWAY FROM GNC
TALKS
China’s Bright Food has walked away
from talks to buy GNC, a US retailer
of nutritional products, according to
people familiar with the matter,
underlining the difficulties of sealing
deals with emerging market buyers.
The news on Bright Food comes short-
ly after the Chinese dairy group
ended discussions with the private
equity owners of UK-based United
Biscuits.
ly pro-business, pro-wealth creation,
version of social democracy – have
been swept away. The Brownites now
control a Labour party well ahead in
the polls; the coalition is about to face
a fresh onslaught.
Ed Balls was the architect of Gordon
Brown’s economic policies, his emi-
nence grise, wielding massive power at
the Treasury and imposing his brand
of political economy onto virtually all
domestic policy. Balls was as much to
blame as his boss for the intellectual
errors that crippled Britain’s economy.
In the mid-1990s, Balls, who studied
economics at Harvard, invented an
entirely new framework to manage
the economy and welfare state. He daz-
zled political journalists with his
knowledge and grasp of numbers. He
emphasised the need to maintain
macroeconomic credibility and to
pacify bond markets; it’s a shame he
has forgotten these lessons today.
Among Ball’s disastrous errors was
his belief – straight out of the 1990s
Harvard textbook – that central banks
Topaz mulls
LSE flotation
OIL SERVICES
▲
BY KATIE HOPE
OILFIELD services company Topaz
Energy and Marine is mulling a float
on the London Stock Exchange.
The Dubai-based company, one of
the biggest oil services firms in the
Middle East, has already appointed JP
Morgan Cazenove to advise on the
possible float – which could come as
soon as March.
Topaz, the biggest revenue genera-
tor among a portfolio of companies
owned by Omani company
Renaissance Services, saw a pre-tax
profit of $70.3m (£44.2m) from rev-
enues of $448.5m, with $160.4m in
earnings before interest, tax, depreci-
ation and amortisation in 2009.
The potential float, first reported
by Sky News, would likely see the
firm propelled directly into the FTSE
VERIZON CHALLENGES BROADBAND
RULES
Verizon, the US telecommunications
group, mounted a legal challenge
against the Obama administration’s
new regulations on broadband, say-
ing it was “deeply concerned” that
the Federal Communications
Commission was asserting too much
control of the internet.
HU DEFENDS BEIJING’S CURRENCY
POLICY
Hu Jintao, China’s president, defend-
ed Beijing’s currency policy , telling a
business audience in Washington
that the Chinese economy had helped
create 14m jobs around the world
through its growing imports.
Speaking on Thursday after US con-
gressional leaders pressed complaints
about the Chinese currency being
undervalued, Mr Hu also said that the
export of “quality and inexpensive”
products had saved US consumers
$600bn, although he did not specify
over what time period.
should be turned into agencies exclu-
sively focused on targeting consumer
prices, ignoring the money supply,
credit and asset prices, and stripped of
their traditional job of supervising
banks and financial markets. The bub-
ble delivered vast windfalls to the
exchequer and house prices boosted
consumer spending – but Balls, who
thought stability would be maintained
and boom and bust abolished thanks
to his policies, had completely misun-
derstood how economies work.
A corollary to this was Ball’s
doomed tripartite system of financial
regulation. He also created a set of fis-
cal policy rules that were meant to pre-
vent excessive deficits and state debt –
they were paper tigers, with defini-
tions changed whenever the rules
were about to be breached. Public
spending surged from 1999, as did the
regulatory burden. Balls also promot-
ed off-balance sheet public sector
accounting of a kind that would have
made Lehman Brothers blush, with bil-
lions of debt hidden from view.
250, trading alongside peers such as
Wood Group and AMEC.
The money raised is expected to be
used to expand Topaz’s businesses in
the Gulf and the Caspian Sea as well
as its smaller operations in west
Africa and Brazil. Topaz parent
Renaissance is expected to retain its
current Oman stock exchange listing.
Oil services companies are expect-
ed to see a boom in business over the
coming year as projects that were put
on hold following last year’s Gulf of
Mexico disaster spill, get off the
ground.
Dubai-based firm
Topaz is considering an
IPO in London, which
would see it enter the
FTSE 250
BANKS TOLD TO PUBLISH DONATIONS
TO ENCOURAGE HIGH-FLYERS TO GIVE
GENEROUSLY
Banks would have to publish the
amount their staff contribute to char-
ity under controversial plans to boost
philanthropy, The Times has learnt.
Ministers want to produce a league
table of banks so that the public can
see how little many financial institu-
tions give to voluntary organisations
and “embarrass” them into donating
larger amounts.
‘BESPOKE’ SAVILE ROW TAILOR FALLS
INTO ADMINISTRATION
The company that once sparked a row
over whether it could call its suits
“bespoke” has gone into administra-
tion after its owner was declared
bankrupt. Sartoriani, which has an
office on Savile Row as well as in New
York and Los Angeles, has collapsed
leaving customers out of pocket.
An army of micro-economists was
hired, placed in every government
department and tasked with devising
elaborate systems of incentives, tax
credits, redistribution and ways of
micromanaging behaviour. More peo-
ple were added to the state’s payroll. In
some cases, this was by hiking public
sector employment; in others, by snar-
ing millions into complex benefits; for
many, work no longer paid. The out-
come of all of this was to permanently
cut Tory support while boosting
Labour’s client state. Economics was
politics; politics was economics. The
way all policies were judged was rede-
fined in Brown’s favour.
Balls learnt all he knows about the
relationship between chancellor and
Prime Minister from the dysfunctional
Blair-Brown duumvirate. That is why
Ed Miliband looked so worried last
night. Internecine Labour party war-
fare looms – and British politics is
about to become much more fun.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
BT chief executive Ian Livingston is under fire from Ofcom to cut rural web access charges
BT told to lower prices
TELECOMS
▲
BY ALISON LOCK
BT came under fire yesterday as tele-
coms regulator Ofcom said it should
make “significant reductions” to the
wholesale price of its broadband to
boost internet uptake in rural areas.
Ofcom has proposed BT cut the
price it charges other internet service
providers to lease its broadband infra-
structure by more than ten per cent
in areas where it is the only provider,
it said.
ROSNEFT COULD RAISE 5PC BP STAKE
Kremlin-backed oil company Rosneft
has admitted it could raise its 5pc
stake in Britain's BP if the new rela-
tionship between the parties is suc-
cessful. BP and Rosneft are finalising a
deal that will see them swap £5bn in
shares and pledge to explore the
Arctic together for difficult oil.
SOCGEN CRAFTS STRATEGY FOR CHINA
HARD-LANDING
Société Générale fears China has lost
control over its red-hot economy and
risks lurching from boom to bust over
the next year, with major ramifica-
tions for the rest of the world. The
French bank has told clients to hedge
against the danger of a blow-off spike
in Chinese growth over coming
months that will push commodity
prices much higher, followed by a sud-
den reversal as China slams on the
brakes.
CITYA.M. 21 JANUARY 2011
NEWS | IN BRIEF
HP reveals board reshuffle
Hewlett-Packard is shaking up its
board, bringing in five new directors
including former eBay chief Meg
Whitman, as new chief executive Leo
Apotheker redesigns the company. In
addition to Whitman, HP named as
directors Shumeet Banerji, chief execu-
tive of Booz & Co; Gary Reiner, former
chief information officer of General
Electric; Patricia Russo, former chief
executive of Alcatel-Lucent; and
Dominique Senequier, chief executive of
AXA Private Equity. The technology
giant said directors Joel Hyatt, John
Joyce, Robert Ryan and Lucille Salhany
will not stand for reelection by share-
holders.
CPMA needs tougher powers
The chief executive of the Office of Fair
Trading, John Fingleton, told the influential
Commons Treasury Select Committee the
new Consumer Protection and Markets
Authority should “nudge the market faster
and harder” than his organisation has
done. He told MPs the CPMA needed
“tougher powers” over banks to enforce
more transparent overdraft and foregone
interest charges.
BT may have to cut its wholesale
charges by between 10.7 per cent and
14.7 per cent below inflation, so ISPs
could pass on the cost saving to con-
sumers, or give people more band-
width to increase internet speeds.
Ofcom estimates that 22 per cent
of UK households do not have a com-
petitive broadband market, and these
are mainly in rural areas.
A BT spokesman said any changes
should “strike the right balance
between control and incentives to
invest in rural areas.”
T-MOBILE USA WEIGHS SALE OF SOME
ASSETS
T-Mobile USA is considering selling its
nonstrategic assets, particularly some
of its cellular towers, to raise cash for
further investments, according to
Rene Obermann, chief executive of
parent company Deutsche Telekom
AG. Mr. Obermann said the company
isn't in a rush to pursue a deal, and
that it would consider a sale only if
needed to make a large investment.
AMD POSTS FLAT SALES, MUM ON CEO
SEARCH
Advanced Micro Devices Inc. Thursday
declined to provide an update on its
search for a new chief executive as it
reported flat revenue for the fourth
quarter. Thomas Seifert, AMD’s inter-
im chief executive, said the CEO
search is a priority but it doesn't plan
to communicate further about the
recruitment process.
CITYA.M. 21 JANUARY 2011 News 3

Google promotes Page to chief

AT A GLANCE | GOOGLE’S RESULTS
● Advert click-throughs
Up 18 per cent year-on-year, and up 11 per
cent on the third quarter.
● Cost charged per click
Up five per cent year-on-year and four per

Google co-founder Larry Page will become
chief executive in April. Picture: REUTERS
▲
TECHNOLOGY
BY ALISON LOCK
GOOGLE chief executive Eric Schmidt
is to step down in April, handing over
to co-founder Larry Page, the compa-
ny said as it smashed earnings fore-
casts in “phenomenal” fourth quarter
results yesterday.
Schmidt will take the role of execu-
tive chairman, while Google’s other
co-founder Sergey Brin will focus on
strategic projects and new products.
The switch is designed to “simplify”
the company’s management struc-
ture and “streamline” decisionmak-
ing, the company said.
Page described Schmidt as “a
tremendous leader”. “There is no
other CEO in the world that could
have kept such headstrong founders
so deeply involved and still run the
business so brilliantly,” he said.
Schmidt said it had been “a great
privilege” to be Google’s chief execu-
tive for more than a decade. “Larry is
ready to lead and I’m excited about
working with both him and Sergey
for a long time to come,” he said.
Chief financial officer Patrick
Pichette told a conference call the
results were “a phenomenal ending
to a very good year at Google.”
The search giant made $2.85bn
(£1.78bn) profit, or $8.75 earnings per
share, in the quarter excluding excep-
tional items, trouncing analysts’ fore-
casts of $8.09. Earnings per share
were 16 per cent higher than the
$6.79 made a year earlier, while rev-
enues rose to $8.44bn, 26 per cent up
on the $6.67bn made a year earlier.
Pichette said Google was particu-
larly proud of its cash accumulation,
generating operating cash flow of
$3.53bn in the quarter.
Revenue from the UK market rose
14 per cent to $878m, from $772m
the previous year.
cent, higher than the third quarter.
● Operating income
$3.38bn, up from $2.76bn a year earlier.
● Net income
$2.85bn, up from $2.19bn a year earlier.
● Android
300,000 new Android phones added per
day, and searches on Android were up ten
times year on year.
● Traffic Acquisition costs
Rose to $2.06bn from $1.72bn the previ-
ous year on an absolute basis – but fell as
a percentage of revenue to 25.3 per cent,
from 26.6 per cent the previous year.

Morgan Stan
sees pay and
profits jump
them move through the pipeline.”
▲

BANKING
BY JULIET SAMUEL
MORGAN Stanley defied the gloom
hanging over the investment banking
industry, reporting a rise in full-year
profits in all of its three businesses.
Overall, pre-tax profit was up 535
per cent to $6.2bn, with earnings per
share up to $2.44 – an increase of 398
per cent on 2009. Quarterly profit was
up 88 per cent.
But although the bank grabbed
market share from its rivals in equity
capital markets deals, advisory fees
recorded a drop-off towards the end of
2010, decreasing nine per cent in the
fourth quarter compared to the same
period in 2009. The bank was also
behind its rivals in fixed income trad-
ing, prompting chief executive James
Gorman to replace Jack DiMaio with
Ken DeRegt as head of the division.
Chief financial officer Ruth Porat
said the “risk-on, risk-off attitude” dur-
ing 2010 had dampened trading activi-
ty and implied it had delayed some
capital markets deals: “It was a bit frus-
trating throughout the year to see our
[investment banking] pipeline is build-
ing,” she said. “It’s a question of seeing
In contrast to Goldman, where
spending on pay decreased four per
cent, Morgan Stanley spent 11 per cent
more on compensation in 2010 for a
total cost of $16bn, with pay per head
rising by 7.5 per cent to an average of
$256,595 (£161,598).
The bank said that $247m of this
cost was due to the one-off bonus tax
imposed in the UK last year. Despite
pay rising, however, the ratio of com-
pensation to revenues fell to 51 per
cent from 62 per cent.
The bank also said that it had added
three per cent to its payroll last year
for a total headcount of 62,542. The
new hires were concentrated in trad-
ing and building up its fixed income
business. Although the bank would
not say where the new jobs are locat-
ed, Porat repeatedly referred to strong
growth in Asia during a conference
call on the results. Chief executive
James Gorman said: “We’re not aggres-
sively hiring right now but if a specific
opportunity comes up, we fill it.”
The bank also said that it was still
engaged in the process of de-leverag-
ing and “reducing the drag from
legacy positions… in a Basel III world”.

City Index fined Carbon trading

£490k by FSA to re-open slowly
▲

SPREAD BETTING FINANCIAL MARKETS

THE Financial Services Authority (FSA)
yesterday fined spread-betting compa-
ny City Index £490,000 for failing to
provide accurate transaction reports.
Between November 2007 and
September 2009, unlisted City Index
failed to submit accurate transaction
reports in respect of approximately two
million transactions, representing
nearly 60 per cent of its reportable
transactions, the FSA said.
City Index failed to report approxi-
mately 55,000 transactions and report-
ed approximately 1,970,000
transactions with one or more data
fields completed improperly, it said.
THE European Union will reopen its
emissions trading scheme step by step as
security improves, after a possibly con-
certed theft by hackers of carbon per-
mits worth up to €30m, EU officials said.
The EU yesterday imposed a week-
long freeze on spot trade in its carbon
market, the bloc’s chief weapon for
fighting climate change, after emis-
sions permits called EU allowances
were stolen from accounts in the
Czech Republic and Austria.
But a wholesale reopening by 26
January appeared in doubt after the
Czech carbon registry said yesterday
it would be closed indefinitely.
 4 News
China’s economy
continues to boom,
growing 9.8 per
cent in the three
months to
December
Picture: REX
China records
NOW WITH AN double-digit
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▲
ASIA ECONOMY
BY JULIAN HARRIS
CHINA’S economic boom shows few
signs of abating, with growth for the
fourth quarter of 2010 soaring past
forecasts, it was revealed yesterday.
And while inflation slowed in
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December it remains high enough for
officials to tighten monetary policy,
some economists have said.
The Chinese economy expanded by
9.8 per cent year-on-year in the three
months to December.
Despite expectations of a modest
slowdown, GDP growth accelerated
from 9.6 per cent in the third quarter,
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keeping the country’s growth rate for
the year in double digits of 10.3 per
cent.
Consumer prices index (CPI) infla-
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UK ECONOMY
TAXES on motorists hugely outweigh
the cost they impose on the UK,
according to research published yes-
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Fuel duty is having a severe effects
on UK companies, the Federation of
Small Businesses said recently.
CITYA.M. 21 JANUARY 2011
“We expect CPI to bounce back and
spike at around six per cent in
January, before falling back gradually
over the remainder of the year,” said
Vlad Sobell of Daiwa Capital Markets.
“Inflation pressure is intensifying
into January and the tightening pres-
sure will intensify, especially consid-
ering the stronger than expected
fourth quarter GDP growth,” said
Isaac Meng, economist with BNP
Paribas in Beijing.
Responding to intense concerns
over price inflation, particularly in
food, Chinese authorities have contin-
ued to lift the reserve ratio require-
ment (RRR).
Since the beginning of 2010,
Chinese authorities increased RRR
seven times. RRR stipulates the
amount of funds that lenders must
keep in reserve with the central bank.
However, interest rates have been
increased only twice during that time
and some analysts warn that more
forceful moves are needed.
The data, released yesterday by the
National Bureau of Statistics, caused
China’s main stock index to shed 2.9
per cent as investors viewed the
strong set of data as bolstering the
case for tightening monetary policy.
US ECONOMY
UNEMPLOYMENT benefit claims in
the US dropped in the week ending
15 January, it was announced yester-
day.
And there was more positive news
for the American recovery, as sales of
existing homes rose 12.3 per cent in
December. Construction of new
homes has remained sluggish, it was
confirmed yesterday, but the boost in
sales provided some uplift for the
troubled housing market.
Year-on-year sales increased by
5.28m compared to November, the
National Association of Realtors said.
MORE ON ECONOMICS: P14
CITYA.M. 21 JANUARY 2011
EU risk body will prove itself
EUROZONE
▲
BY HARRY BANKS
EUROPEAN Central Bank president
Jean-Claude Trichet rebuffed ques-
tions about the relevance of Europe’s
new financial ‘super watchdog’ yes-
terday, saying it would gain authority.
Chairing the first meeting of the
European Systemic Risk Board (ESRB),
Europe’s proposed solution to avoid a
repeat of the recent financial crisis,
Trichet faced a barrage of questions
about the new body’s purpose and
authority.
Early election
for Ireland as
reshuffle fails
EUROZONE
▲
BY ELIZABETH FOURNIER
IRISH Prime Minister Brian Cowen
was pushed yesterday into calling an
early election after his misjudged
reshuffle plans fell apart, and a third
of his cabinet resigned.
Cowen had hinted before yesterday
that the election was planned for late
March or early April, but confirmed
that it will now take place on 11
March, after confidence in his Fianna
Fáil party took another blow.
He also said that the country’s new
finance bill, which implements
December’s budget, will be released
today – allowing legislative debate on
the application to begin sooner than
planned.
The upheaval follows Cowen suc-
cessful vote of confidence earlier in
the week, which saw him assume the
role of foreign minister after Michael
Martin challenged his leadership.
Despite winning the secret ballot of
71 Fianna Fáil members, an exodus of
Cowen’s minister began on
The watchdog has no formal
enforcement powers. It is designed to
take an overview of Europe’s finan-
cial system and highlight emerging
problems for relevant authorities to
act on.
If the ESRB is not satisfied, it has
the option of going public with its
fears and leaving the rest to the per-
suasive powers of financial markets.
“Authority is not to be taken for
granted, you have to gain it of course
and I think it is the strong determina-
tion of all those who participate in
the board to demonstrate and gain
Wednesday, when independent min-
ister for health and children Mary
Harney stepped down.
She was followed by four others
over the next 24 hours – Noel
Dempsey, transport minister, Dermot
Ahern at justice, defence minister
Tony Killeen and enterprise minister
Batt O’Keeffe.
Though each said they were not
planning to stand in the next elec-
tion, the resignations were seen as a
cynical attempt by Cowen to force a
reshuffle, and he was pushed to make
a statement to parliament instead.
The latest Irish turbulence comes
as figures were released showing that
up to 1,000 people were leaving
Ireland each week, surpassing even
the level of emigration seen in 1989,
when 44,000 left the country.
The Economic and Social Research
Institute (ESRI) estimated net migra-
tion to be 100,000 over the two-year
period from April 2010 to April 2012,
despite growth in the country’s
exports, which had been touted as a
driver for economic development.
authority,” Trichet told a news confer-
ence after the meeting.
The watchdog brings together the
continent’s top central bankers, seat-
ing them on a 37-member board
alongside the heads of banking, trad-
ing and insurance authorities and EU
economic and monetary affairs com-
missioner Olli Rehn.
ESRB vice-chair, Bank of England
governor Mervyn King, said the first
meeting was about getting the new
body going.
“The purpose of today was to put in
place the building blocks,” he said.
PORTUGAL OPTIMISTIC ON DEFICIT
PORTUGAL’S finance minister Fernando Teixeira dos Santos said yesterday that the coun-
try’s 2010 budget deficit was likely to have been below the government’s target of 7.3 per
cent of gross domestic product. Teixeira dos Santos said that state sector budget data
gave the government a “solid base” to conclude that last year’s budget deficit goal had
been beaten.
Spain hopes its regional
banks will fund bailout
▲
EUROZONE
SPAIN is finalising plans to find fresh
funds for its troubled savings banks,
officials said, prompting speculation
the government may have to spend
more while fighting to slash a massive
deficit.
Madrid hopes the regional banks
can raise the capital -- which it has
been denied would reach the €30bn
(£25.4bn) cited in a newspaper report
Picture: GETTY
News 5
from private investors. No private cap-
ital deals have yet been struck.
Spain will have to raise more capital
in the money markets to shore up a
banking system heavily exposed to a
collapsed property market, econo-
mists say. The regional banks are at the
heart of concerns Spain may seek an
Ireland-style bail-out.
Spain’s risk premium over bench-
mark German debt narrowed, falling
to its lowest level since mid-November.
NEWS | IN BRIEF
Robust eurobond sale for France
France drew strong demand for its sale
of €9bn (£7.6bn) worth of conventional
bonds yesterday, particularly for the
shorter-dated debt where investors
recently elevated yields. It also sold
€3bn of inflation-linked bonds, the top
end of the target range, which were
well-received, reflecting investors’
appetite for inflation protection, which
has risen after Eurozone inflation
jumped to 2.2 per cent last month. The
10-year French/German bond yield
spread held steady around 36 basis
points after the auction and was
unchanged from levels seen at the previ-
ous settlement close.
Barroso urges bailout fund boost
European Commission President Jose
Manuel Barroso yesterday called for
quick, clear signals to markets that
European leaders would bolster the EU
bailout fund. “We’ve got to make it clear
now to the markets that we’re not only
making declarations but instead making
decisions,” Barroso told Germany's
Stuttgarter Zeitung newspaper. “And
that is not only the opinion of
Commission president Jose Manuel
Barroso,” Barroso added. “It’s also the
position of the president of the
European Central Bank. That’s why I
don't understand the delay.”
Swiss National Bank still bullish
Switzerland's economy is still in robust
shape despite an unprecedentedly
strong Swiss franc that is a big burden
for some sectors, Swiss National Bank
chairman Philipp Hildebrand said yester-
day. “The indicators point to an overall
still lively economic activity in our coun-
try,” Hildebrand said.
 6 News CITYA.M. 21 JANUARY 2011

NEWS | IN BRIEF
Aberdeen sees increased inflow
Aberdeen Asset Management’s first quar-
ter performance fell below analysts
expectations with a 2.6 per cent increase
for assets under management (AUM) to
£183.3bn. The fund manager saw out-
flows of £800m after clients withdrew
from some property and fixed income
funds as investors looked to boost expo-
sure to equities. However, AUM increased
to £183.3bn. Analysts at Numis down-
graded forecasts for the company, after it
failed to meet forecasts by two per cent.
Aberdeen chief executive Martin Gilbert
said: “It has been a solid quarter for
Aberdeen and we are pleased with the
progress made. “The group is well posi-
tioned to build on this momentum, despite
volatile market conditions, as we continue
to prioritise organic growth.”
Chief executive
Peter Clarke’s Man
Group saw one
client withdraw
Business soars at St James’s Place $1.1bn from the
Wealth manager St James’s place has hedge fund firm.
seen new business leap 32 per cent,
pushing assets above market forecasts to Picture: REUTERS
a record high. The British-based business
saw funds under management increase
to £27bn, up by £5.6bn, beating analysts
expectations of around £26.3bn.
St James’s Place, 60 per cent owned by
Lloyds Banking Group, saw new invest-
ments of £4.75bn, up 37 per cent. Chief
executive David Bellamy said: “I am
extremely pleased to report another year
of record new business for St James’s
Place, including a strong final quarter.
“We remain committed to recruiting only
the highest quality advisers into the part-
nership, while ensuring that we are able
to offer a best in class investment propo-
sition for clients.”

Vladimir Cvetcovic
Top model & DHI client
DIRECT HAIR IMPLANTATION
Man suffers
after £700m
withdrawal
▲
HEDGE FUNDS
BY RICHARD PARTINGTON
SHARES in hedge fund manager Man
Group fell yesterday after it revealed
a single client had pulled $1.1bn
(£694.4m) from its long only funds in
the third quarter, despite analysts
remaining upbeat about the compa-
ny.
Investors pulled money from its
funds as well as from GLG Partners,
the rival hedge fund group it bought
in October last year.
Yet Man still managed to grow its
funds under management (FUM) to
$68.6bn, boosted in part by the
acquisition of GLG.
The company added $2.7bn on to
the $25.4bn taken on from GLG and
the $40.5bn it already held at the
end of its second quarter.
Analysts say the loss of the $1.1bn
investment would not impact on the
future performance of the group,
due to its relatively low basis point
fee, and a suite of new products yet
are signs elsewhere of things improv-
ing. Without that [outflow] I think
there would’ve been a different
story.
“I don’t think anything changes in
terms of the long-term story for Man
Group.”
The company, which started as a
sugar broker in 1783, said it held a
regulatory capital surplus of around
$300m and over $1.8bn in cash at the
end of last year.
Chief executive Peter Clarke said:
“With strong performance and a
clear marketing focus for new and
existing investment ideas, there is
significant momentum for the busi-
ness in the year ahead.”
ANALYSIS l Man Group
310 p
294.10
20 Jan
290
270

Can you afford to be launched by the firm.

Shore Capital analyst Paul Dobbin
said: “It gives the impression of
another quarterly outflow, yet there
250
9 Nov 29 Nov 17 Dec 6 Jan

not to do it? Inflows look healthy enough despite

a $1bn redemption from a key client
FREE DVD featuring world-famous personalities ISO 9001:2008 DESPITE strong cashflows and a
who have chosen DHI growth in funds under manage-
ment, a single client’s $1bn redemp-
tion has temporarily hit Man
Group’s rapid uptick in fortunes fol-
lowing its purchase of GLG last year.
info@dhiglobal.com Though Man insisted the client
Not all clinics was merely switching assets out of
www.dhiglobal.com are CQC, ISO
ACHS Certified
European equities, it wasn’t enough
to soften the blow to the group’s
shares, which fell nearly three per
London - 43 New Cavendish Street cent to underperform the FTSE at
close yesterday.
Glasgow - 13 Royal Crescent But most analysts remain positive
about the deal, with Numis calling
Tel 020 7486 9789 the Man/GLG tie-up “one of the
most powerful forces…in the alter-
natives space”. The Group’s AHL
Diversity fund still seems to be its
biggest draw, with 18 per cent of its
funds above their high-water
marks. The GLG deal was touted as
a beefing up of the fund’s capabili-
ties to make it the biggest in the
world. But concerns over culture
clashes marred the merger, with
Man’s hi-tech research model at
odds with GLG’s reliance on trader
instinct.
At the moment sentiment still
seems to remain positive, and in
any case a five per cent dividend
yield provides a good enough floor
for the shares for the time being.
BOTTOMLINE
Analysis by Elizabeth Fournier
CITYA.M. 21 JANUARY 2011
RSA picks up £142m
bill after bad weather “
INSURANCE
▲
BY ALISON LOCK
GENERAL insurer Royal Sun Alliance
(RSA) warned yesterday that exception-
al losses from bad weather had left it
with a bill £142m more than it had
expected.
Prolonged freezing conditions and
snowy weather across Europe in
November and December, combined
with exposure to hurricane Tomas in
the Caribbean, caused it to reduce its
forecast for 2010 operating profit to
between £600m and £630m.
Analysts had previously forecast a
consensus £734m operating profit for
the year.
Insured losses from weather over the
whole year have cost the group £255m
more than normal, it said in a trading
update ahead of its full-year results
presentation on 24 February.
UK claims made up the bulk of the
losses, reaching £110m after it experi-
enced “the coldest December in the UK
Aviva to slash debt
as Europe chief quits
INSURANCE
▲
BY ALISON LOCK
SPECULATION over the exit of Aviva’s
European head Andrea Moneta over-
shadowed a promising update on the
insurer’s strategy and finances yester-
day.
The world’s sixth-largest insurer told
investors it planned to cut the hybrid
debt on its balance sheet by at least
£700m over the next three years, using
internal cash to fund repayments of
about £250m per year.
UBS analyst James Pearce said the
presentation held “few major surprises
but the decision was helpful ahead of
the introduction of new capital
requirements for insurance companies
in European Solvency II regulation.
“Debt reduction is clearly welcome
given Aviva’s above average gearing,
High-flying Mayer sent to London
▲
PROFILE
BY ALISON LOCK
IGAL Mayer’s move to become chief
executive of Aviva’s
a l l - i mp o r t a n t
European busi-
ness is the
Canadian’s third
stint in London
during his 22-
year career with
the company.
In Canada
he
IGAL MAYER
for 100 years,” RSA chief executive
Andy Haste said.
About 8,000 households claimed an
average £6,700 for burst pipes from
RSA since November. It also handled
19,000 home emergency claims,
around 5,500 snow claims and almost
5,700 other weather related claims in
the two months, it said.
However, RSA played down the
extent of the impact on the group,
emphasising that additional losses
would not affect its full-year dividend,
and that it had grown premiums
income by 11 per cent over the year.
“Given the extreme weather in 2010,
this is a strong result and reflects the
diversity of the portfolio and the
resilience of the group’s underlying
profitability,” said the UK’s second
largest general insurer.
Analysts took the news in their
stride, viewing the profit warning as a
hiccup in RSA’s overall performance.
Numis analyst Nick Johnson revised
RSA’s 2010 earnings per share down by
and tidies up the balance sheet ahead
of Solvency II, which has a bias in
favour of Tier 1 capital over Tier 2,”
he said.
But the surprise decision to replace
Aviva’s European chief executive
Moneta, after just 18 months, with its
North American head Igal Mayer left
the market scrambling for an explana-
tion yesterday.
Moneta, a board director at Aviva,
will leave in February by “mutual con-
sent to pursue new challenges in the
industry,” the firm said. Analysts sug-
gested the exit could be linked to prob-
lems with the pace of change Moneta
was implementing in Europe. Other
reports said the move would clear the
way for current UK chief executive
Mark Hodges to eventually replace
group head Andrew Moss.
rose to executive vice-president-level
before moving to London in 1999 to
become managing director at CGU,
which merged with Norwich Union
to become Avvia.
He became finance director of
Aviva’s UK general insurance busi-
ness in 2000, but returned to lead
Aviva Canada in 2001.
Mayer, 51, returned to the UK
again in 2007 to head the general
business, before moving to Iowa as
US chief executive in January 2010.
Aviva said Mayer had more than
doubled profits there in that year.
Sources said Mayer was a “deliver-
er” who had “a very strong track
record”. Mayer also oversaw the
rebranding of Norwich
Union as Aviva in 2009.
News 7
ANALYST VIEWS: IS RSA’S PROFIT WARNING
A PROBLEM ? Interviews by Alison Lock
EAMONN FLANAGAN | SHORE CAPITAL
We were encouraged by the positive statement as
to the group’s expectations for 2011, assuming more nor-
malised weather patterns. The reference to a combined ratio
”
which may be “better than 95 per cent” is more positive
20 per cent to 9.5p from 11.9p and its than we have had from the group in the past.
full-year profit before tax down to
£464m from £575m. However, he
raised 2011 earnings forecasts on
expectations of higher investment FRANK BRADEN | S&P EQUITY RESEARCH
“
income.
Citi analyst James Quin said it was
“not a surprise” that weather losses It is its job to take a certain amount of risk so when
were higher than expected, but the loss extreme conditions come up it is not unreasonable for it to
was “perhaps at the top end of what
might have been ‘pencilled in’.” experience a certain amount of loss. RSA has a well-diversi-
”
“The market’s reaction, marking the fied portfolio and we view it as a very stable company in a
shares down 2.6 per cent, is rational in somewhat unstable market.
that this is the net cost of the higher
weather losses,” Quin said.
Analysts were also heartened by RSA’s
careful wording change around its com- NICK JOHNSON | NUMIS SECURITIES
“
bined ratio, a measure of its profitabili-
ty. RSA said it was no longer targeting a
combined ratio of “around” 95 per cent, It is an abnormal loss given very abnormal weather
instead saying it expected to deliver “a patterns. The costs it has incurred have been relatively well
combined operating ratio of better than
95 per cent.” Quin said the more positive contained and it is on track to make a profit. However, RSA's
”
language was “an important and shares are currently trading close to the top of the recent
encouraging message” about the com- range and we have downgraded it to ‘hold’.
pany’s future performance.
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CITYA.M. 21 JANUARY 2011
8%
DJF Esprit
£16m
10%
Balderton
£20m
Who owned LoveFilm? Value: £200m
Shareholders
at LoveFilm
cash in on bid
▲
TECHNOLOGY
BY STEVE DINNEEN
LOVEFILM shareholders are set to cash
in on Amazon’s buyout of the movie
rental business, valuing it at £200m.
Amazon yesterday announced it
will snap up the 58 per cent of
LoveFilm it does not already own. City
A.M. understands Balderton and
Index Ventures both own approxi-
mately 10 per cent of the firm, with
Arts Alliance and DJF Esprit holding
roughly eight per cent each. The
remaining 22 per cent is held by
angel investors and management.
It is understood Balderton and
Index invested “mid single digit mil-
lions” in the company, meaning the
Amazon buyout represents a sizable
return on their investment.
The LoveFilm corporate structure,
including chief executive Simon
Calver, will remain in place.
Amazon declined to confirm
whether its acquisition will be fol-
lowed by an investment in the firm.
LoveFilm is keen to expand its digi-
tal streaming operations, which are
understood to represent roughly 20
per cent of its movie consumption.
Movie rental firms including
Independent trust could run Sky
News to ease News Corp takeover
▲
MEDIA
BY STEVE DINNEEN
NEWS Corp could set up an independ-
ent body to run Sky News in a bid to
smooth the way for its £7.8bn Sky bid.
Critics of the bid say media plurali-
ty would be harmed if Rupert
Murdoch’s firm snaps up the 61 per
cent of Sky it does not already own.
Culture and media secretary Jeremy
Hunt will decide in the coming weeks
whether a full Competition
Commission probe should be
launched.
One way of paving the way for a deal
could be for News Corp to set up an
independent body to run Sky News.
News 9
You worked hard
for your money
NEWS | IN BRIEF You shouldn’t have to
work even harder to get
42%
Nokia US deal falls through the best exchange rates
Nokia’s woes continued yesterday with
the announcement that a deal to launch
its X7 smartphone on US carrier AT&T
has fallen through. The news is a blow
Amazon for the Finnish firm, which is desperate
22%
Angel Investors,
£84m
to push its new range of high-end smart-
phones. It is understood Nokia lost con-
fidence in the US firm, believing the
phone would not receive enough mar-
keting and subsidisation from the carri-
management
and others 8% er. Nokia’s failures in the smartphone
market have largely been blamed on its
Symbian operating system, which critics 020 7801 9080
£44m 10%
Index Ventures
Arts Alliance
£16m argue falls short of Google’s Android and
Apple’s iOS4. The Finnish firm hopes to
worldfirst.com
combat this with the imminent release
£20m of its new MeeGo operating system it
hopes will compliment acclaimed new
hardware such as its Nokia N8.
LoveFilm and US-based Netflix are
understood to have faced difficulties
in securing rights to movies, with
LoveFilm raising £10m in debt to fund
its rights drive. Amazon’s extensive
studio relations will be a boon for
LoveFilm as digital streaming acceler-
ates with the growing popularity of
internet TV.
Charles Gurassa, chairman of
LoveFilm said: “The board of LoveFilm
are enthusiastic and fully supportive
of this transaction which represents a
very good outcome for the company,
its shareholders and employees.”
LoveFilm narrowed its pre-tax loses
to £900,000 in 2009 with its revenue
jumping by a third.
Amazon combined its European
rental operations with LoveFilm
before taking up a 42 per cent stake
in 2008. The company has more than
1.4m members and a catalogue of
over 67,000 films and games.
LoveFilm chief executive
Simon Calver will
remain at the helm
despite Amazon taking
full control of the firm.
City A.M. understands no official con-
tact has been made with Hunt but that
senior figures at News Corp are private-
ly considering such a concession in
order to secure the acquisition.
It is also understood News Corp has
objected to several findings in the
Ofcom report into the bid, namely that
it could pose a threat to media plurali-
ty. News Corp declined to comment.
Media analyst Claire Enders said it
is doubtful News Corp would offer
concessions at this stage. She said:
“Unless it is absolutely demanded, it
makes no sense for News Corp to offer
up Sky News. It would also be
unprecedented for a minister to make
a deal at this stage.”
 10 News CITYA.M. 21 JANUARY 2011

City Airport wins

New International
Consolidated
Airlines Group
(ICAG) chief execu-
tive Willie Walsh

battle for flights

(left) and chairman
Antonio Vázquez
Romero (right)
shaking hands on
the deal when it
was announced
last year
at the airport will now increase from
▲

AVIATION
LONDON CITY Airport has won a
High Court decision that will allow
it to increase the number of flights it
operates by up to 50 per cent.
Local residents were fighting to
overturn a 2008 decision by Newham
Council to allow the expansion, cit-
ing noise and pollution levels in
their bid to halt the new flights.
The maximum flights permitted
91,000 to 120,000 per year. Picture: REUTERS
Richard Gooding, chief executive
of London City Airport said the
increase in flights “will allow us,
and our partner airlines, to continue
our key role in supporting the local,
regional and national economies
and providing new local employ-
ment and training opportunities.”
It’s estimated that flights could
rise to 120,000 a year.

BA leaves the
LSE ahead of
Iberia merger
▲
TRANSPORT
BY MARION DAKERS
BRITISH AIRWAYS will complete its
merger with Spanish carrier Iberia
today, with the enlarged company
listing in London and Madrid on
Monday morning.
The British Airways ticker retired
from the London stock market yes-
terday after 24 years, with the stock
price giving BA a final market cap of
£3.46bn.
Investors will receive one
International Consolidated Airlines
Group (ICAG) share for each BA or
Iberia share they own.
The listing of ICAG could be
marred by fresh talk of further strike
action, with the Unite union due to
open a ballot for BA cabin crew staff
today.
The new group will be Europe’s
second largest airline after
Lufthansa, with 419 aircraft flying to
more than 200 destinations.
ICAG is set to have annual rev-
enues of €15bn, though each carrier
will retain its separate branding.
The merger, which was first moot-
ed in 1998 when BA took a stake in
then-state owned Iberia, is expected
to save the firms €400m (£337m) a
year by its fifth year.
The newly formed group plans to
aggressively expand through acquisi-
tions and has already drawn up a list
of 12 companies it is interested in
buying, with Asian carriers seen as
the main target.
The companies spent five months
renegotiating the merger leading up
to the agreement in April 2010, after
BA revealed its £3.7bn pensions
deficit.
While BA has drawn up a plan to
reduce its massive shortfall, it con-
tinues to face protests from disgrun-
tled BA workers about moving some
pensions to link them to the cheaper
consumer prices index.
ANALYSIS l BA
310 p
282.50
290
20 Jan
270
250
3 Nov 23 Nov 13 Dec 5 Jan

Departures
BA-Iberia merger explained
WHERE ICAG will have hubs at London Heathrow and Madrid
Barajas, and will be based in Spain for income tax
purposes. The majority of shareholder and board
meetings will take place in Madrid.
WHO The board will be a mix of BA and Iberia executives.
Willie Walsh, chief executive at BA, will run ICAG.
Iberia’s chairman Antonio Vázquez Romero will chair,
with BA chairman Martin Broughton as deputy.
HOW MUCH BA shares closed at 282.5p yesterday, putting a final
value on the firm of £3.46bn. Iberia closed with a
market cap of €3.33bn (£2.82bn), making the joint
market cap £6.28bn when ICAG relists in London on
Monday.
WHEN BA and Iberia first teamed up in 1998, when BA took
a stake in the Spanish carrier. The duo agreed a
preliminary merger plan in November 2009, but
competition issues delayed a deal until April 2010.
CITYA.M. 21 JANUARY 2011
Kenmare axes Property experts say stamp
JP Morgan duty hike will not hinder sales
▲
MINING
BY MARION DAKERS
MOZAMBIQUE-FOCUSED miner
Kenmare Resources ditched JP
Morgan Cazenove in favour of Royal
Bank of Canada (RBC) as one of its
joint brokers yesterday, as it attempts
to ramp up the expansion of its tita-
nium mines.
Kenmare, which posted a 71 per
cent year-on-year rise in titanium,
ilmenite and zircon production yes-
terday, revealed the switch in a sepa-
rate statement but declined to
comment further.
JP Morgan had acted as broker for
the FTSE 250-listed miner for around
four years, helping to place shares
and underwrite warrants alongside
long-term brokers Canaccord
Genuity, Davy Stockbrokers and
Mirabaud Securities, which continue
to work for the firm.
Kenmare Resources is one of a
lucrative clutch of recent client wins
for RBC Capital Markets, which has
been hired to act as broker for several
While the loss of a FTSE 250 firm is a
blow for JP Morgan Cazenove,
Kenmare’s decision to axe the bank will
barely dent JP Morgan’s reputation as
the most prolific broker in the City.
JP Morgan Cazenove acts as broker
for 35 of the FTSE 100, according to
the latest Hemscott guide, and advises
244 clients.
Laurence Hollingworth, once the
lead adviser for Kenmare at JPM, has
enough to keep him busy in his new
role as head of UK investment banking.
PLANTATION SALE SET TO GO AHEAD
A GROUP of investors that bought bonds secured against Plantation Place on Fenchurch
Street said today it wanted to press on with an open-market sale of the property, in spite
of opposition to the plan from other investors which have pushed for an enforced sale fol-
lowing a loan default.
News 11
cent duty hike in April will make no cent were less optimistic.
▲
PROPERTY
high-profile companies including difference to demand at the top end. In addition, just one respondent
BY MARION DAKERS
Resolution, Dana Petroleum and The rise in stamp duty from four to though the decision to raise capital
Petra Diamonds in the last 12 HIGH-END property buyers will not five per cent on properties worth gains tax last year had dented sales.
months. be put off by the looming rise in £1m or more is due to come into Demand for luxury properties such
Kenmare said it hopes to increase stamp duty, according to research force on 6 April, following plans first as the Candy Brothers’ One Hyde Park
production by 50 per cent before seen by City A.M. revealed by Labour last March. development has cheered the market
2012 to cash in on rising commodity Though the OECD warned yester- A third of the 35 estate agents, bro- in recent months.
prices after enjoying runaway day that the tax places unfair barriers kers and developers surveyed said Jack Jones of Investec Specialist
demand from China. on the housing market for some, 52 they were more optimistic about the Private Bank said: “The high-end
The Dublin-based firm said its per cent of property professionals sur- housing market than they were property market appears to be quite
Moma mine produced 496,000 veyed by Investec thought the 25 per before the credit crunch, while 41 per robust to adverse changes in tax.”
tonnes in the second half of 2010.
JP Morgan and RBC Capital
Markets both declined to comment
when contacted by City A.M.
ANALYSIS l Kenmare Resources
40
p
32.25
35 20 Jan
30
25
20
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
4
RBC Capital Markets is making a repu-
tation for itself as a collector of big
broking contracts, having scooped
Resolution, Dana Petroleum and Petra
Diamonds in the last 12 months.
The bank has close to 100 financiers
working for its global mining business,
with a client list that includes Barrick
Gold, the world’s biggest gold miner,
Shore Gold and First Quantum.
Directors Matthew Coakes and
Richard Horrocks-Taylor will lead the
team working with Kenmare.
 The Capitalist
12 CITYA.M. 21 JANUARY 2011
EDITED BY
STEVE DINNEEN
GOT A STORY? EMAIL
thecapitalist@cityam.com

BP MAKES Health and

HEALTH AND
SAFETY TOP
PRIORITY
GIVEN BP’s recent misadventures in the
Gulf of Mexico – and the subsequent
$20bn (£12.6bn) it has sunk into a com-
pensation fund – The Capitalist is relieved
to note that safety is top of the agenda for
visitors to BP’s offices.
Indeed, some may argue that BP has
gone rather overboard with its ‘elf ‘n’ safe-
ty rules. Woe betide anyone attempting to
use the stairs without taking a firm grasp
of the bannister – an offence of this mag-
nitude warrants a report to the duty man-
ager.
Want to take a cup of coffee with you?
Not unless it has a lid on it (although, pre-
sumably if the coffee was spilled, BP
would be able to absorb the mess by
throwing golf balls and human hair at it).
And don’t even think about carrying
something that requires more than one
hand upstairs with you – how on earth
would you be able to hold onto the ban-
nister? That was the first rule!
A po-faced BP press officer refused to
give The Capitalist a copy of the safety book-
let. “In my experience, diary columns are
meant to be funny and safety is very seri-
ous,” he said, in a PR flourish worthy of
former boss Tony Hayward himself.
TRUE HIGH FLYER
The Capitalist naturally assumes that all its
readers are high-flyers. But City girl Gisele
Edwards (top right) stretches the point to
extremes. The Asian stockmarket equity
analyst leads a dramatic double-life as an
aerial artist. She has wowed crowds above
Trafalgar Square with death-defying
stunts and even worked with sculptor
Anthony Gormley.
If that wasn’t enough, Gisele is also a
Mandarin-speaker, a composer and vocal-
ist with her own funk fusion band and a
ballet dancer who has performed with the
National Chinese Ballet.
She read Chinese at Cambridge
University and Islamic and Asian Art
safety begins
at head
office – not at
the beach, if
BP’s safety at
work booklet
is anything to
go by
Picture: REUTERS
History at the School of Oriental and
African Studies.
FIRED, AGAIN
Hamster-like defeated Apprentice candi-
date Alex Epstein (right) managed to
raise his profile earlier this week by
inadvertently trending on Twitter.
The hapless fired candidate sent
a grovelling email to more than
700 media bosses asking for work
as a pundit. Only problem was, he
forgot to hide the email addresses.
Cue a free-for-all of insults sent
between the editors, including the
choice: “I had the pleasure of receiving
it twice. So that’s a double ‘no’ from me.”
ROMANCE IS DEAD
And on to one man who has no need for
extra publicity. City stalwart David Buik
amused his readers this week with his
musings on modern relationships.
Prompted by the 100-day countdown to
the Royal wedding, Buik despairs of mod-
ern courtships that involve “See you at the
pub at 8pm; the next round’s yours. Your
share of dinner is £60 please and unless
there is a bit of ‘nookie’ or ‘slap & tickle’
on offer, find your way home in a cab, gal!”
Not like Buik’s day… “I can’t get my
head round this culture,” he grumbles.
A NOD TO HARD WORK
And finally, a nod to the intrepid graduate
featured in City A.M. earlier this week. James
Elgeti was pictured wearing a sandwich
board promoting himself as a future City
boy.
James told The Capitalist he now has sev-
eral meetings set up and the chair of
HSBC London Alumni has asked us to put
him in touch with James. Well done, son.
CITYA.M. 21 JANUARY 2011
easyJet plunges after fuel hike Boparan races to ready
TRANSPORT
▲
BY MARION DAKERS
BUDGET airline easyJet saw its shares
plummet yesterday after it posted a
disappointing quarterly update due to
soaring fuel prices and lower revenue
per seat.
easyJet shares fell 16.2 per cent to
382p, after chief executive Carolyn
McCall (pictured) warned that the
higher market price of fuel will put
pressure on margins again this year.
The company also expects revenue
per seat to continue dropping in the
Flat profit for
Invensys sees
shares suffer
INDUSTRIAL
▲
BY HARRY BANKS
BRITISH engineer Invensys said yester-
day its operating profit in the last
three months was unchanged from a
year ago because its industrial
automation margins were squeezed
and the domestic appliance market
weakened.
In the full financial year ended
March 2010 the company made an
operating profit of £248m, a rise of
two per cent on the previous year.
Invensys, which makes industrial
process automation systems, sig-
nalling and control systems for rail-
ways and various control products for
domestic appliances and other appli-
cations, said its automation systems
division saw strong order growth in
the three months to the end of
December, as global industrial invest-
ment recovered but lower margins on
some large greenfield projects kept
operating profits flat.
Its rail division delivered a good
performance in both revenue growth
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News 13
next six months, due to fewer forward weather cost £6m and £18m respec-
offer for Northern Foods
bookings during the icy weather tively.
and fewer than expected pas- McCall announced a new
sengers paying to check in range of flexible fares for already agreed a deficit-reduction
▲
M&A
their luggage. business travellers in plan between Northern and potential
The company expects a November, and the firm ADVISERS for Boparan have been merger partner Greencore.
loss of £140m to £160m said yesterday that initial working through the night to put Greencore agreed to help pay £15m
in the next six months, take-up has been encour- together a bid for Northern Foods, into Northern’s £142m deficit as part
compared to a pre-tax aging. although it was still uncertain yester- of a merger agreed in November.
loss of £78.7m in the Wyn Ellis, Numis day whether the firm would make a Boparan has not disclosed the price
same period last year. Securities analyst, yester- formal bid before the Takeover Panel of its planned takeover bid, although
Total revenue in the day cut his forecasts for the deadline of 5pm today. people close to the deal said Northern
three months to 31 December year and warned that fuel Boparan’s team has been trying to investors have told the company they
rose 7.5 per cent to £654m, though rises would cost the firm £30m to thrash out a deal with Northern are unlikely to accept an offer below
strikes and disruption caused by the £35m in the next half. Foods’ pension trustees, who have 80p. Both firms declined to comment.
ROLLS-ROYCE BOOSTED BY CATHAY PACIFIC NEWS | IN BRIEF
NCC acquisitions boost profits
British computer-security firm NCC
Group yesterday posted a rise in first-
half profit, aided by acquisitions, and
said it was looking for more purchases
to expand its presence in the US. The
company, which tests IT security and
holds copies of software source code in
escrow, would be looking at a “nice little
cash deal,” chief executive Rob Cotton
said. NCC Group, on a buying spree since
2006, said the acquisition of smaller US
peer iSEC Partners in October con-
tributed five per cent of revenue growth
in the first half.
and operating profits, it said. Orders, High demand helps IQE’s revenues
however, were lower as it awaits the Chip semiconductor company IQE has
outcome of bids on several large con- reported that its second-half 2010 rev-
tracts. enues and profits continued to show
Analysts have long viewed Invensys strong growth, as a result of higher
as a candidate for break-up, a view demand for the companies speciality
that chief executive Ulf Henriksson advanced semiconductor wafer prod-
appeared to endorse in November ucts. The company, a leading manufac-
when he said China Southern Rail turer of advanced semiconductor wafers
could acquire or take a stake in the and related services to the semiconduc-
business. tor industry, indicated that revenues for
Shares in Invensys, which said it companies second half should be more
still expected “to deliver improved than 17 per cent higher than the first
performance” for the full-year, closed half – with full-year revenue growth of
7.8 per cent lower at 329.6p. over 36 per cent on full-year sales of at
least £71.7m, the company believes.
ANALYSIS l Invensys
380 p 329.60 Fifth Third Bancorp repays TARP
20 Jan Fifth Third Bancorp joined the ranks of
360 regional banks repaying US government
bailout money yesterday, through a
340
$1.7bn (£1.1bn) share offering. The bank
320
sold 121.4m shares for $14 each and
ROLLS-ROYCE yesterday won a long-term maintenance contract to service the engines of said it would use the proceeds, along
300 several Cathay Pacific aircraft. The $250m (£157.6m) contract will see Rolls-Royce provide with those from a senior debt offering
support services for the Trent 700 engines that power the airlines A330 fleet. Cathay and other funds, to repurchase preferred
Pacific is currently Rolls-Royce’s largest Trent 700 customer, operating 47 Airbus A330s shares it sold to the US Treasury under
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan with an additional seven deliveries scheduled up to 2013. the Troubled Asset Relief Programme.
ro m
Prices
£722
star t f **
pcm
DISCLAIMER: Industrial and Provident Society 30441R exempt charity. Details correct
at time of going to print 01/11. Your home is at risk if you fail to keep up repayments on
a mortgage, rent or other loan secured on it. Please make sure you can afford the
repayments before you take out a mortgage.* Register today to be entered into
the prize draw for an iPhone 4. **The figure quoted is a percentage share and is a
guideline and may vary according to individual incomes and circumstances. TERMS &
CONDITIONS apply: please see www.lqgroup.org.uk/heart for details. Imagery depicts
a typical L&Q show home.
 14 Economics CITYA.M. 21 JANUARY 2011

Scrap stamp duty, says OECD UK born people take more

the tax system would encourage volatility, the report also blamed
benefits than immigrants
▲

UK ECONOMY
growth and stability, it argued. “policies favouring homeownership
BY JULIAN HARRIS And the UK could free up the sup- over rental markets” which reduced

STAMP duty should be scrapped to
encourage labour mobility, the
Organisation for Economic Co-opera-
tion and Development (OECD) said
yesterday.
And massive house price hikes in
recent decades were partly driven by
restrictions on the supply of new
housing, its report said.
The Paris-based group suggested
replacing stamp duty with an ongo-
ing land tax based on market values,
which could also offset cuts in taxes
on income. A revenue neutral shift in
ply of housing “by reassessing land-
use policies, to make better use of
vacant land with little environmental
value,” including in the green belt,
OECD economists said.
House prices increased by more
than 90 per cent between 1980 and
2008, the report said. Financial liber-
alisation increased the availability of
home ownership to young profession-
als and people on low incomes, and
added around 30 per cent to house
prices, the OECD estimated.
While deregulation amplified price
labour mobility. Policies in the US
exacerbated the number of houses
falling into negative equity, the OECD
economists said.
The report criticised the level of
regulation over the social housing
sector, and proposed housing
allowances as an alternative to the
construction of more social housing.
Social housing “can concentrate
low-income households into neigh-
bourhoods with negative conse-
quences for access to education and
labour market outcomes,” it said.
▲
IMMIGRATION
FOREIGN born people are less likely
to claim state benefits than their UK
born counterparts in nearly all
British regions and countries, official
data showed yesterday.
And in some regions almost half
the UK born population are claiming
benefits or tax credits, the Office for
National Statistics (ONS) revealed.
Where foreign born people receive
more, the difference is “negligible”
the ONS said.
Over 45 per cent of UK born people
in Wales, the north east and the
north west are in receipt of the wel-
fare payments.
The largest employment group for
the foreign born population in many
regions and countries is in elemen-
tary occupations such as labourers
and couriers.
London has the largest percentage
of foreign-born people, comprising
34 per cent of its population. The west
midlands and the south east have 11
per cent foreign born people.

Inflation peril NEWS | IN BRIEF

Construction continues to suffer
The small to medium-sized enterprise
construction sector is to set to begin a

after factory fourth year of falling workloads and a

third of companies are expecting to cut
their staffing levels this year, according
to the latest state of trade survey from
trade body the Federation of Master
Builders released today.

prices rocket ARE YOU CONFIDENT ABOUT ECONOMIC RECOVERY?

Interviews by Richard Partington
Bank of Italy warns on deficit
Italy’s central bank – the Bank of Italy –
yesterday forecast a below-target budg-
et deficit for 2010. Bank of Italy expects
real GDP to have expanded one per cent
last year and then looks for it to grow
0.9 per cent in 2011 and 1.1 per cent in
▲

UK ECONOMY reported. “The manufacturing sec-

BY JULIAN HARRIS
BRITAIN’S manufacturing boom
looks set to continue – although ris-
ing factory gate prices are threaten-
ing to stoke inflation even higher, a
survey revealed yesterday.
Manufacturing output prices rose
at the fastest pace since October
2008 in the final months of last
year, according to a survey by the
Confederation of British Industry.
And in the first months of this
year prices are expected to continue
their sharp rise. The balance of man-
ufacturers expecting a rise in the
price of exported goods is the high-
est since January 1995, the CBI said.
“Manufacturers seem to be having
considerable success in passing on
chunky price rises to customers,”
said Samuel Tombs of Capital
Economics.
“Thankfully for the rest of us, out-
put price inflation tends to take
over a year to feed through to con-
sumer price inflation -- but the sur-
vey will no doubt add to fears that
inflation will be slow to fall from its
high rate later this year,” he warned.
Factory output increased further
in the final quarter of 2010, the CBI
tor has continued to recover at a
brisk pace,” said Tombs.
The number of manufacturers
recording a rise in output was 16 per
cent higher than the number
reporting a fall – up from October’s
positive balance of nine per cent.
“This was driven primarily by
growth in export orders (+13 per
cent),” the report said.
The news chimes with recent pos-
itive data for the sector.
Last week the government’s Office
for National Statistics (ONS) con-
firmed that manufacturing had
grown for 13 straight months, and
was up by 5.6 per cent in November,
compared with the previous year.
Manufacturers expect output to
keep growing in the coming
months, with a positive balance of
18 per cent of firms expecting more
export orders, the CBI survey said.
While total orders remain below
“normal” levels, “the figure remains
slightly above its long-run average,”
said Simon Hayes of Barclays
Capital.
“And it is worth bearing in mind
that this survey has been consistent-
ly less buoyant during the recovery
than other data,” he said.
ROWAN BAMFORD | SNR DENTON
2012. The Bank of Italy’s bulletin shows
that general government debt grew
€106.4bn in the first 11 months of 2010,
“I’m more optimistic now than say six months mainly due to the central government
ago. I work as an M&A lawyer and there have borrowing requirement.
been more transactions going through. Confidence Signs of improvement for Japan
seems to be returning. I think people had grown The Reuters Tankan index yesterday indi-
tired of not doing any trades.” cated improving economic conditions in
Japan with an increase in its manufac-
turing index to +11 in January from +7 in
HUGH COLLINS| BLP December, and improved for a second
consecutive month in its non-manufac-
turing index, to -2 from -12, suggesting
“I’m broadly optimistic about recovery but sentiment is no longer weighed down by
we’ve not seen the impact of the cuts yet. I’m the concentration of reactionary effects
linked to the expiration of Eco Car subsi-
not sure the private sector is going to be able to dies, the hike in the cigarette tax and the
pick up the slack. I don’t think we’re going to end of record-breaking heat.
have a double dip recession though.” Turkey surprises with rate cut
Turkey’s central bank unexpectedly cut
LUCY DEVLIN | SAPPHIRE SYSTEMS its one week repo policy rate by 25 basis
points to 6.25 per cent yesterday, taking
another step in potentially risky mone-
“I’m more optimistic now. There seems to be tary policy designed to stem speculative
more stability now in the market. It feels like inflows into the country's financial sys-
tem and cap the appreciation of the lira
the private sector is recovering. 2010 was a - and thus moderate the bourgeoning
much better year than 2009, it will be inter- current account deficit. Overnight bor-
rowing and lending rates were kept at
esting to see what happens this year.” 1.5 per cent and 9 per cent respectively.

MORE NEWS
ONLINE
www.cityam.com
Consumer confidence downturn carries
into 2011, as fear over inflation spreads
@
▲

EUROZONE ECONOMY increasing through 2010 and reached late can sow the seeds of future
BY JULIAN HARRIS a 35 month high in November. imbalances.
But then the index tumbled by 1.6 The German producer price index
CONSUMER confidence has slipped points in December, and has declined (PPI) increased by 0.7 per cent in

@
further in the Eurozone, it was
revealed yesterday, as inflation con-
tinues to squeeze spending and con-
cern policymakers.
The European Commission’s initial
“flash” estimate of consumer morale
for this month dropped to an index
rating of -11.4, from -11 in December.
Confidence on the high streets of
the single currency area had been
further in the new year.
The news came after European cen-
tral bankers repeated the need to
keep a close eye on price pressures
after more inflationary figures
emerged from the Eurozone’s largest
economy, Germany.
ECB policymaker Lorenzo Bini
Smaghi warned that exiting an
accommodative monetary policy too
December compared to the previous
month, and 5.3 per cent on the previ-
ous year.
And month-on-month price infla-
tion hit half a per cent even with
energy prices excluded, according to
Hetal Mehta of Daiwa Capital
Markets. “This signals an acceleration
in the pace at which underlying
prices are rising,” she said.
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 16 Consumer News
Enterprise sales hit by snow
▲
LEISURE
BY HARRY BANKS
ENTERPRISE Inns said snow kept
drinkers at home in December wip-
ing up to £2m off its first-quarter
profit.
The group, which has around 6,800
pubs across Britain, said a cold snap
of snow and ice leading up to
Christmas caused a loss of earnings
for many of its pub landlords.
Net income at pubs where tenants
are on long-term contracts with
Enterprise Inns, which represent
around 90 per cent of the estate, fell
two per cent on average, in the 16
AB Foods set
to hike prices
as costs surge
▲
CONSUMER
BY JOHN DUNNE
AB Foods warned yesterday that the
spiralling price of wheat, cotton, and
other commodities means that shop-
pers could face price hikes on basic
shopping basket goods.
The firm, which has brands includ-
ing twinings Tea, Kingsmill bread and
Silver Spoon sugar, said customers had
already seen some rises and more were
looming. Cost increases have also hit
corn, spices and oil, while rice is one of
the few commodities to remain stable.
AB Foods, which also owns high
street retailer Primark, has said that
despite steep cotton price increases it
will ensure that the budget retailer
remains cheaper than rivals.
But it said of its grocery division in a
statement yesterday: “Delays in secur-
ing these increases will adversely
affect margins and the impact of con-
tinued rises in commodity costs will
need to be carefully managed.”
AB Foods also said the effect of
severe British weather on sugar beet
still to be processed will cut into its
sugar profits this year, with analysts
putting the likely hit as high as £20m.
However, its 214-strong Primark dis-
count fashion chain shrugged off the
Strong Christmas drives second profit Portmeirion to lift sales
upgrade in two months at Laura Ashley to new record of £50m
▲
RETAIL
BY JOHN DUNNE
FASHION and homewares retailer
Laura Ashley issued its second profit
upgrade in two months yesterday.
The company said it was confident
that full-year profits would be better
than City forecasts.
It said a strong performance over
Christmas and early January means
that the results will be “significantly
higher than earlier expectations”.
Analysts on average were expecting
weeks to 15 January.
Chief executive Ted Tuppen said
customers had cancelled parties over
the festive period and drinkers left
earlier to tackle treacherous journeys
home, hitting trade.
That was partially offset by an
upturn in trade in some rural areas
where snowed-in customers who
could not get to work were able to
make the shorter trip to their local
instead.
“It very much depended on the
type of pub, where it was, and how
bad the weather was.
“If people were trapped in their vil-
lages they would walk to the pub for a
snow and cold weather to show overall
like-for-like sales up 12 per cent over
Christmas for the 16-week period to 8
January. Regardless, AB Foods admit-
ted that profits will come under pres-
sure from the rise in VAT.
Meanwhile, the Kingsmill bread
division grew its market share, help-
ing overall sales rise seven per cent in
the period. Grocery sales rose by nine
per cent with beverages performing
particularly well.
Shore Capital analyst Darren Shirley
said: “The stock may pause for breath
for a period, however in the medium
to long term we believe the strong
cash flows, robust growth, interna-
tional breadth and balanced portfolio
remain an attractive investment
proposition.”
ANALYSIS l AB Foods
1,200 p
1,079.00
20 Jan
1,160
1,120
1,080
1,040
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
a pre-tax profit of £15.8m.
The brand is still associated with its
distinctive floral prints.
Lately it has expanded overseas,
opening its first store in Bahrain and
is eyeing opportunities across the
globe. The group, which has 221
stores in the UK and Ireland, posted
like-for-like sales growth of 2.7 per
cent in the 19 weeks to 11 December.
The company will announce its
full-year results for the year to 29
January at the end of March.
Meanwhile, shares jumped by
pint rather than doing nothing at all.
But there were a lot of cancellations,”
he said.
Tuppen added that trading had
picked up since the thaw and he
remained confident average net
income per pub would improve dur-
ing the rest of the year.
It has sold off another 105 unwant-
ed pubs and in the full-year it expects
to sell between 400 and 500 sites, to
generate proceeds of around £125m.
Nigel Parson, an analyst at
Evolution Securities, said: “Trading
was reasonably good given the poor
weather and Enterprise is continuing
to sell assets at sensible prices.”
Primark is one of AB Foods’ star performers
SOME OF THE EVERYDAY GOODS FACING A PRICE HIKE AS COSTS RISE
around 20 per cent following the
upbeat trading statement.
The retailer opened its first gift and
accessories store at London’s
Liverpool Street station last July.
The chain has 233 franchise stores
overseas and also aims to expand into
China, Indonesia and Russia.
Laura Ashley, which was set up in a
London flat in 1953, floated on the
London Stock Exchange in 1985.
It had struggled in previous years
but has stormed back into the public
eye recently.
Ahold sees rise in Dutch
customers as US suffers
▲
CONSUMER
STRONG growth in the Netherlands
and central Europe helped Dutch gro-
cer Ahold overcome tough trading
conditions in its main US market and
post a fourth-quarter sales rise in line
with expectations.
Ahold, which runs Dutch market
leader Albert Heijn but makes about
60 per cent of its sales in the United
States, said yesterday shoppers
remained under pressure and
focused on promotions in all of its
Picture: Micha Theiner/ CITY A.M
▲
RETAIL
BRITISH pottery manufacturer
Portmeirion yesterday said annual
sales will top £50m for the first time
after a particularly strong Christmas.
More than £13m of the sales come
from Spode and Royal Worcester
which were bought from the liquida-
tor two years ago.
Chairman Dick Steele said much of
the growth came from new designs
on old patterns. The best seller was
the Christmas Tree Candy Stripe mug
CITYA.M. 21 JANUARY 2011
markets, especially the US.
Retailers across Europe and the
United States are worried about their
ability to pass on higher costs of
goods like groceries and fuel at a time
when consumers are being hit by aus-
terity measures aimed at cutting gov-
ernment debts.
Ahold, with around 2,900 stores in
11 countries, said it made net sales of
€7bn ($9.4bn) in the last three
months of 2010, broadly in line with
analysts’ forecasts. The company’s
share price remained stable.
NEWS | IN BRIEF
China helps drive Remy sales
Remy Cointreau, the second biggest dis-
tiller in France, yesterday forecast
strong full-year revenue and earnings
growth, driven by strong Asian demand
for cognac. The Chinese New Year is on
3 February this year and orders have
been strong the company said. Sales in
the nine months to December rose 11
per cent overall. The Cognac unit saw a
rise of 19 per cent. Remy has been look-
ing to emerging markets to stimulate
more sales.
Rose in new role at Woolworths
Sir Stuart Rose has been given a new
role with South African retailer
Woolworths. The former Marks &
Spencer boss will becomes a non-execu-
tive director of the food and clothing
chain. He stepped down as M&S chair-
man earlier this month, and was
replaced by Robert Swannell, having
handed over the reins as chief executive
to Marc Bolland last year. Private equity
group Bridgepoint Capital has already
secured Rose’s services in an advisory
capacity. “Sir Stuart brings strong inter-
national retail experience to the board,”
said Woolworths yesterday.
Walmart gets Obama approval
Michelle Obama is to back plans by the
world’s biggest retailer, Walmart, to
provide its customers with healthier and
more affordable food options as part of
a drive to cut US obesity levels. The
United States’ First Lady has made pro-
moting healthy eating her key initiative
in the White House. She will join
Walmart representatives at a press con-
ference to launch the initiative later
today. Walmart is planning to cut prices
on thousands of its packaged foods,
reduce fat and salt content, and cut the
prices of fresh fruit and vegetables. By
2015, the company hopes to have low-
ered salt content by a quarter as well as
slash sugar levels in foods.
of which Portmeirion sold 25,000 at
$10 (£6.25) each in the US.
The company also performed well
in Italy and South Korea.
Portmeirion will be hoping for
another record year in 2011, with
more than 250 products launched,
including a collection of Royal
Worcester items to commemorate
the royal wedding, “for which we
have already seen significant
demand.” Steele said profits would
be in line with recently upgraded
City forecasts.
CITYA.M. 21 JANUARY 2011 News 17

Inter RAO hunts for investors Iberdrola expects instant

buy the assets worth $9bn-$15bn ing a strategic investor, for which we
profit boost from Elektro
▲

ENERGY
(£5.6bn-£9.4bn). have set aside 25 per cent of shares. It
BY HARRY BANKS Earlier this week it said it would could be a Russian energy or fuel
INTER RAO could seek a strategic buy the British holding company company, it may be a foreign compa- several municipalities in the south-

investor for a 25 per cent stake and
may also consider share swaps as it
continues to grow, the Russian state-
controlled group’s head Boris
Kovalchuk said yesterday.
The electricity generator and power
trader is being used by Russia as a
home for billions of dollars of assets
as the government seeks to create a
consolidated power generation giant
with ambitious plans abroad.
Inter RAO, which boasts influential
deputy Prime Minister Igor Sechin as
head of its board, said last month it
would raise cash via a rights issue to
REDI, which owns a 49 per cent stake
in gas producer Northgas, for $1.5bn.
Kovalchuk said in an update on the
company’s strategy the group would
consider selling a 25 per cent stake by
2015.
“Inter RAO is interested in attract-
Russian deputy Prime
Minister Igor Sechin is
head of the board at
Inter RAO, which wants
to sell a 25pc stake
ny that could provide synergies,” he
said. Grid company FSK and state-con-
trolled RusHydro have already been
lined up to buy stakes of 17-20 per
cent and six per cent respectively.
The move could be seen as part of a
multi-billion dollar privatisation pro-
gramme of state assets set to kick off
in earnest this year.
Kovalchuk also said he would con-
sider a share swap with foreign com-
panies – a deal structure that would
mirror the agreement signed by
Russia’s biggest oil producer Rosneft
and BP last week.
▲
ENERGY
IBERDROLA, Spain’s biggest power
utility, said yesterday that its €1.78bn
(£1.51bn) acquisition of Brazilian ener-
gy distributor Elektro should boost
profit from day one.
Iberdrola has long been looking to
expand its operations in Latin America
where economic growth contrasts
with stagnation in its home market.
Iberdrola already ranks as one of the
largest power producers in Mexico and
has a 39 per cent stake in Neoenergia,
the largest power distibutor in north-
eastern Brazil, whereas Elektro serves
eastern state of Sao Paolo, the coun-
try’s most populous and wealthiest
region.
The Spanish company is buying
99.68 per cent of Elektro’s capital from
AEI, the investment vehicle controlled
by British investment manager
Ashmore Group, which took over a
number of Enron’s former power and
gas businesses in Latin America.
Iberdrola said the Elektro purchase
would be paid for with cash raised
from debt or asset sales, “underlining
Iberdrola’s financial strength and liq-
uidity”.

Old handsets BEST OF THE BROKERS

ANALYSIS l Pearson
1,060 p
1,039.00
20 Jan
ANALYSIS l PZ Cussons
410 p 376.00
20 Jan
ANALYSIS l Gulf Keystone
200 p
167.50
20 Jan

hit profits at 1,020

980

940
390
180

160

Sony Ericsson
370

900 140
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan 25 Oct 12 Nov 2 Dec 22 Dec 14 Jan 25 Oct 12 Nov 2 Dec 22 Dec 14 Jan

PEARSON PZ CUSSONS GULF KEYSTONE

UBS rates the publishing group “buy” with Panmure Gordon rates the consumer goods Goldman Sachs has upgraded the petrole-
“It’s clear Sony Ericsson had to an increased target price of £14. The bro- maker “hold” with a target price of 400p. um group from “sell” to “neutral” due to
▲

TELECOMS
BY HARRY BANKS
WORLD NUMBER five mobile phone
maker Sony Ericsson posted lower
than expected fourth-quarter pre-tax
profit yesterday, and said it saw only
modest growth in the handset mar-
ket this year.
Sony Ericsson posted pre-tax profit
of €35m (£29.7m) on sales of €1.53bn.
Analysts had forecast a pre-tax profit
of €79.7m and sales of €1.82bn.
Sony Ericsson is looking to a new
line of smartphones to boost growth
after a disappointing end to last year.
The company last month launched
the Xperia Arc and further launches
are due next month based on
Google’s Android software.
But the new models are not due to
hit stores in time to boost first-quar-
ter earnings, leaving the group with
an awkward gap. It has already had to
slash prices to attract Christmas shop-
pers to its aging handsets.
Its poor fourth-quarter perform-
ance contrasted sharply with iPhone
maker Apple, whose results beat fore-
casts this week.
work hard to maintain profitability,”
said Geoff Blaber, analyst at CCS
Insight. “Prices came under substan-
tial pressure due to both competition
and a product mix lacking high-tier,
higher margin offerings.”
Sony Ericsson chief executive Bert
Nordberg admitted the company had
underestimated the speed needed to
launch new products, but said it
would be quicker to the market this
year.
“We expect a better year than last,”
Nordberg said when asked about out-
look for the venture’s sales and prof-
its in 2011.
Gartner analyst Carolina Milanesi
said: “The competition is so tough
you cannot afford not to refresh your
portfolio ... “They need to step up
their pace of product introduction.”
Shipments in the quarter totalled
11.2m, up on the previous quarter but
down 23 per cent on the same period
in 2009.
Sony Ericsson said that it expects
modest growth in the handset mar-
ket, which has recovered from a
slump in 2009, as a whole this year.
ker believes the firm is poised to deliver
earnings growth despite its conservative
revenue forecasts, and has raised its earn-
ings per share estimate for the year four
per cent to 76.4p. UBS predicts revenues
above £5.8bn for the full-year.
NEWS | IN BRIEF
Mitsubishi plans cost cuts
Mitsubishi Motors said it would count on
rapid expansion in emerging markets and
big cost cuts to double its operating prof-
it in three years, anticipating a resump-
tion of dividends in the year to March
2014. Announcing a new three-year busi-
ness plan yesterday, Mitsubishi Motors,
one of Japan's smallest automakers, said
it would target a 37 per cent jump in
sales of Mitsubishi-brand vehicles to
1.37m vehicles by 2013/14. The figure is
lower than the 1.5m vehicles flagged by
president Osamu Masuko last June.
The broker expects evidence of muted
growth at the firm’s interim results next
Tuesday, with uncertainty ahead of the
Nigerian elections dampening sales in the
country. It has raised its full-year pre-tax
profit forecast by 15 per cent to £117m.
To appear in Best of the Brokers email your research to notes@cityam.com
Qantas warns on airfare hike
Australia’s largest airline Qantas Airways
flagged an industry-wide rise in airfares
to help offset soaring oil prices that
threaten to stall the global aviation sec-
tor’s recovery. Qantas may raise prices
and fuel surcharges if global competitors
did the same thing, Joyce said. Qantas
chief executive Alan Joyce also reiterated
he was still seeking an out-of-court set-
tlement with Rolls-Royce after a mid-air
engine explosion in an A380 last year
grounded Qantas’ fleet of the superjum-
bos and shook confidence in the airline.
the stock’s recent underperformance, with
a target price of 172p. The broker sees
potential for M&A and reserve growth
thanks to the firm’s lucrative oil field in
Iraq, but notes the continued political risk
of exploring in the Kurdistan region.
Intel to win approval for McAfee
Intel is set to win EU approval next week
for its $7.68bn (£4.8bn) buy of security
specialist McAfee after offering more con-
cessions to ease competition concerns,
two sources said yesterday. The world’s
largest chipmaker Intel has already
secured clearance from the US Federal
Trade Commission to acquire McAfee, the
world’s second largest maker of security
software. Intel had offered some conces-
sions to the European Commission and in
recent days proposed more remedies after
complaints by McAfee's rivals.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Steve Dinneen in association with

Lloyds Banking Group
Lloyds Bank Corporate Markets has promoted
Chris Birt to director in its acquisition finance
team in London, reporting to Ian Sale. Birt, 33,
has eight years of experience at Lloyds Banking
Group after joining the corporate banking grad-
uate scheme and has held his current position
since 2006. Chris has led and co-led 20 private
equity-backed mid market transactions, includ-
ing providing leveraged debt to support
Sovereign Capital’s recent acquisitions.
Barclay Meade Matchtech Group, has bolstered its
Professional staffing recruitment con- team in London with six new appoint-
sultancy Barclay Meade, part of the ments. The procurement and supply
chain team has been expanded with the
appointments of Toby Beech as lead
consultant, and James Woolley as sen-
ior consultant. The commerce and
industry team has announced the
appointment of Rebecca Cooper as con-
sultant – temporary finance accounting.
Emma Womersley and Laura Deegan
both join the marketing team as senior
consultants, while the HR team benefits
from appointing Israil Bryan, again as
senior consultant.
All appointments will be operating
out of Barclay Meade’s London office.
JO Hambro
Charles Martyn-Hemphill and Will
Kenney, of Spencer House Capital
Management (SHCM), are to join JO
Hambro Investment Management
(JOHIM), the specialist investment
management firm. They are expected
to join JOHIM in February 2011. Prior
to joining SHCM as a founding partner
in 2006, Martyn-Hemphill spent 26
years at Morgan Grenfell and Deutsche
Asset Management where his most
recent position was managing director
and head of the global select equity
team. At Deutsche he managed global
and US equity mandates, including the
highly rated DWS American Growth
Trust which he ran from inception in
1990. Kenney also joined SHCM in
2006 as a founding partner to manage
global equity assets alongside Martyn-
Hemphill who he had worked with at
Deutsche for six years. At Deutsche he
managed global equities and prior to
that was a sector specialist researching
healthcare stocks.
Hammerson
Simon Melliss, chief financial officer, will
retire on 30 June 2011. Melliss will be
59 in July this year, and has been with
Hammerson since 1991. He was
appointed chief financial officer in 1995.
Timon Drakesmith, currently finance
director of Great Portland Estates, has
been appointed as his replacement.

To appear in CITYMOVES please email your career

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com morganmckinley.com
 Wealth Management
18
Saving up your coppers in the vault
Physically backed ETFs let investors
buy actual stocks of metal but few
should want to, writes Daniel Knowles
I
N JOSEPH HELLER’S modern clas-
sic, Catch 22, the entrepreneur-
ial mess officer Milo
Minderbinder seizes the oppor-
tunity to buy up the entire Egyptian
cotton crop. The result is a disaster –
Milo finds himself unable to sell the
cotton to anyone. After trying to turn
it into food, eventually he unloads it
onto the government.
Today it is relatively rare for com-
modity speculators to get stuck with
the same problem as Milo – few ever
take physical delivery because mar-
kets are liquid enough that it is possi-
ble to speculate entirely using futures
contracts, rolling them over into new
contracts as they expire.
Of late, however, the possibilities
for investing in actual warehouses
full of goods have widened. Seeking
to expand on the success of physically
backed precious metal funds, ETF
Securities recently launched three
physically backed base metals
exchange traded funds (ETFs). They
track the prices of nickel, copper and
tin.
But the fees on an ETF Securities
copper ETF add up to 0.81 per cent,
plus 36 dollar cents a day per tonne of
metal owned – or about another 1.3
per cent per year at current copper
prices. On a futures contract, the fee
is just 0.49 per cent. So why would
anyone want a share of a warehouse
FTSE mining and auto stocks Lacklustre earnings
hit by China tightening fears send Wall St lower
THELONDON
REPORT
B
RITAIN’S top share index sank
to its lowest closing level in
more than five weeks yester-
day, weighed down by mining
stocks on concerns over potential
further monetary tightening by
China and its impact on demand.
The FTSE 100 closed down 108.79
points, or 1.8 per cent, at 5,867.91, its
lowest close since December 13.
Miners were the standout fallers,
tracking metal prices lower after
soaring growth data from China,
the world’s biggest consumer of raw
materials, heightened fears of inter-
est rate rises there.
“I think maybe we’re reading too
much into this. The fall looks a bit
overdone in the context of what’s
happening in other markets,” Peter
Dixon, economist at Commerzbank,
said. “I’m inclined at this moment
to say that this is noise (a market
reaction to something which does-
n’t appear to be fundamentally jus-
tified), and maybe we've got a bit of
profit taking going on.”
full of industrial metals?
According to Gayle Berry, a com-
modities researcher at Barclays
Capital, a good reason not to is the
difference between spot prices (the
price for delivery now) and futures
prices (the price now for delivery in
the future).
For much of the last 18 months,
futures prices of many metals have
been more expensive than spot prices
– known as a “contango” – thanks to
the combination of low current
demand due to the recession and
high-expected future demand. In a
contango, the cost of rolling over
futures contracts cuts profits, while
physically backed products – which
trade at the spot price – benefit.
But for the last three months, cop-
per and tin at least have moved into
“backwardation”, where futures
prices are lower than spot prices. That
means that futures based products
will do better than spot based prod-
ucts by benefiting from a “positive
roll yield”.
Berry reckons that copper and tin
will carry on in backwardation for
some time, as London Metal
Exchange (LME) inventory supply is
extremely tight. At least partly as a
result, physical base metal ETFs are
unlikely to catch on – already,
demand for the new products has
been much lower than expected –
BHP Billiton fell 3.6 per cent,
slightly outperforming a four per
cent decline in the British mining
index, after issuing output figures.
Traders said Burberry, off 4.1 per
cent, was being hurt by the luxury
goods group’s exposure to China.
Engineering group Invensys
topped the blue chip fallers’ list, off
7.8 per cent, as weakness in orders
at its rail division soured its trading
update.
Food producer to clothing retailer
AB Foods also fell after a trading
update, down 3.2 per cent. The com-
pany said the effect of severe British
weather on sugar beet still to be
processed will cut into its sugar
profits this year, with analysts put-
ting the likely hit as high as £20m.
“Carmakers have slid back in
Europe on China tightening con-
cerns, and this has dragged auto
parts make GKN lower as well,” said
Michael Hewson, analyst at CMC
Markets. “British Airways shares are
also lower on their last trading day
before its merger with Iberia.”
The banking sector ended the day
fairly flat, despite US peer Morgan
Stanley posting stronger than
expected quarterly revenue. US
stocks fell as upbeat economic data
while futures based products are like-
ly to carry on growing.
The idea of owning part of a ware-
house full of metal at a time of ever
tightening demand and high infla-
tion is somehow emotionally appeal-
ing. But given the high fees and the
availability of futures contracts in a
tight market, there are few good eco-
nomic reasons for wanting to right
now. Investors need to avoid making
the mistake Milo made. New opportu-
nities are not always good ones and
hoarding goods you can’t use yourself
isn’t often very clever.
on jobs and housing failed to offset
a selloff in the technology and
materials sectors.
On the upside, National Grid
added 1.5 per cent, as JPMorgan
raised its rating on the stock to
“overweight” from “neutral” on
valuation grounds.
“The China concerns are starting
to weigh on the other indices now
and everything is so interconnect-
ed,” David Morrison, market strate-
gist at GFT Global, said.
“We’ve got austerity measures in
Europe, high unemployment in
the US, housing markets looking
grim; in the UK we’ve got our own
issues: tax hikes and concern now
about not only retailers but also
inflation.”
ANALYSIS l FTSE 5,867.91
6,100
5,900
5,700
5,500
25 Oct 12 Nov 2 Dec 22 Dec
ECONOMICS FOCUS | FUTURES AND SPOT PRICES
The spot price of a commodity (or of any
financial product) is the price at which it
can be currently bought, while the
futures price is the price it can be bought
at now for delivery at a future date.
Producers sell forward contracts so as to
ensure a particular price for future pro-
duction and so hedge against uncertainty.
Consumers purchase them for the same
reason. The seller goes short while the
THE NEW YORK
REPORT
U
S stocks fell yesteray as lacklus-
tre tech and materials earnings
failed to live up to heightened
expectations, threatening to
short-circuit a seven-week run.
Declines were milder than on
Wednesday, when a sharp drop
pulled the market off two-year highs.
Morgan Stanley posted stronger-than-
expected revenue to help the banking
sector rise modestly, and rose 4.6 per
cent to $29.02 (£18.14).
But F5 Networks plunged 21.4 per
cent to $109.15 and pulled the Nasdaq
lower after the leader in the network
Jan optimisation market forecast weak
second-quarter revenue.
“The tug of war continued during
the course of the day with techs and
financials -- the two big behemoths in
terms of bellwethers for the market –
slugging it out all day,” said Joseph
Benanti, managing director of
Rosenblatt Securities in New York.
“We had a lot of movement on hot
14 Jan news that will subside. Cloud stocks
CITYA.M. 21 JANUARY 2011
Not a particular clever
investment
Picture: REX
buyer goes long.
Economic theory says that futures prices
and spot prices should be approximately
equal except for financing and (if applica-
ble) storage costs. If they weren’t, traders
could make a guaranteed profit by arbi-
traging – buying now and hoarding, or
else selling inventories and buying them
back later. It is not clear how well that
rule holds in practice.
are important, but they are not going
to drive all technology. And the finan-
cials are a bigger sector to follow and
are starting to hold their own.”
Google rose 2.2 per cent to $640.79
in extended trade after the company
reported better-than-expected net rev-
enue for its fourth quarter. The search
engine also said co-founder Larry
Page will replace Eric Schmidt in
April as chief executive.
Freeport-McMoRan Copper & Gold
lost 3.7 per cent to $110.90 after the
copper producer trimmed its sales
forecast and said costs would rise.
Resources stocks also came under
pressure after data showing high
growth in China stoked fears the
country may tighten credit to check
inflation. Alcoa shed 0.5 per cent to
$15.98, while Exxon Mobil slipped 0.6
per cent to $77.75.
Fresh data showed US home sales
jumped more than expected in
December while jobless claims posted
their biggest weekly decline in nearly
a year.
The Dow Jones industrial average
dipped 2.49 points, or 0.02 per cent, to
11,822.80. The Standard & Poor’s 500
Index fell 1.66 points, or 0.13 per cent,
to 1,280.26. The Nasdaq Composite
Index lost 21.07 points, or 0.77 per
cent, to 2,704.29.
CITYA.M. 21 JANUARY 2011 Wealth Management | Markets 19

LONDON’S TOP 250

Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)

3i Group 316.50 -11.75 340 250 COBHAM 217.75 -2.25 276 192.25 Jardine Lloyd 637 5 637 459 Rotork 1638 -24 1895 1215
3i Infrastructure 115.75 -0.50 125.25 101 Colt Telecom 144 -0.50 145 109 John Wood Group 529 -2 581.50 293 Royal Bank of Scot 42.25 -0.25 58 31.25
A.B. Foods 1079 -36 1182 873.50 Compass Group 558 -4 594 425 Johnson Matthey 1902 -50 2100 1446 RSA Insurance Grp 133.25 -1.50 136.50 114.75
Aberdeen Asset.Man. 214.25 -10.75 225 112.75 Cookson Group 624.50 -9 687.50 367.50 Jupiter Fund Man 305 0 314 180.25 SABMiller 2080 -46 2306 1650
Admiral Group 1622 3 1693 1114 Croda International 1509 -69 1625 751 Kazakhmys 1538 -84 1671 965 Sage Group 276 -7.25 289 222
Aegis Group 141.75 -1.75 145.50 103.50 Daily Mail & Gen 566 -10 590 432.50 Kenmare Res. 32.25 0.25 35 9.25 Sainsbury (J) 370.50 -10.50 395 313
Afren 152 -3.75 161.75 79 DAVIS SERVICE 437 -2.50 450 360.25 Kingfisher 264.25 -5.50 271.25 198.50 Schroders 1816 -17 1922 1116
African Barrick Gold 518 -29.50 670 503 De La Rue 814 -12 984 549.50 Ladbrokes 132.75 -2.50 162.75 122.75 Schroders NV 1407 -11 1508 929.50
Aggreko 1420 -63 1685 882 Debenhams 67 -1 79 53 Lancashire 569 -10 647 442 Scot.& Sth. Energy 1211 5 1258 1010
Alliance Trust 367 -3.25 378 293.50 Derwent London 1555 -12 1605 1208 Land Securities 679.50 -15 707 545 Scottish Mortgage 705.50 -8 717.50 475
Amec 1161 -34 1226 733.50 Diageo 1197 -28 1250 1000 Legal & General 109.50 -0.50 111 69.75 SEGRO 292.50 -6.50 341.25 250.25
Amlin 386.50 1 433 366.75 Dixons Retail 22 -0.25 36.50 21.25 Lloyds Banking Grp 66.75 0.50 77.50 46.50 Serco Group 557.50 -2.50 651 494.25
Anglo American 3067 -152 3410 2254 Domino’s Pizza 512 -33.50 586 309.25 Logica 136 -1.25 148 101.75 Severn Trent 1411 -18 1499 1086
Antofagasta 1419 -57 1634 761 Drax Group 390.25 -4.50 421.50 326.25 London Stock Ex. 839.50 -15.50 906 544 Shaftesbury 441.25 -6.75 460 349.25
Aquarius Platinum 356 -10 458 227 DS Smith 213 -9.50 226 104 Lonmin 1744 -91 2113 1355 Shire 1656 -10 1674 1220
ARM Holdings 509.50 -24 536.50 188.75 Dunelm 469 -13.25 550 325.25 Man Group 294 -7.25 310.50 202 SIG 143.50 -3.50 153.25 90.75
Ashmore Group 348.25 -8.50 383.75 218 easyJet 382 -73.75 496.50 348.50 Marks & Spencer 367 -6.50 427.50 323.50 Smith & Nephew 695 -17 714 537.50
Ashtead Group 161.25 -6 177 77 Edin.Inv.Tst. 432 -5.50 467.25 364 Meggitt 354.50 -2.50 381 251.50 Smiths Group 1355 -28 1388 995.50
AstraZeneca 2922.50 -56.50 3385 2732 Electrocomponents 248.50 -9.50 279.50 174.75 Melrose 307 -10 329 162 Soco International 366.75 -3.50 484.25 292
Autonomy 1424 16 1975 1271 Enquest 137.25 -6 150.50 89.25 Mercantile Inv Tst 1116 -10 1133 828 Spectris 1325 -57 1418 735
Aveva Group 1612 2 1673 1007 Essar Energy 534.50 -3.50 589.50 383 Michael Page 510.50 -20.50 565.50 346.50 Spirax-Sarco 1804 -64 2025 1240
Aviva 428 -0.25 435 294.25 Eurasian Nat Res 1026 -43 1266 818 Micro Focus 401.75 -2.25 546.50 276 Spirent 142 2.50 160.25 102.75
AZ Electronic Materials SA (WI)300 -11.50 317.50 249 Euromoney Inst. 704 -28 732 461 Millennium & Cop. 565 -7.50 594.50 368.50 Sports Direct 163 -3 174.75 92.25
Babcock International 554 -11.50 635 492.75 Experian Group 757.50 -16 819 572 Misys 331.75 2.75 343 201.50 St James’s Place 281 2 292 204.25
BAE Systems 343.25 -6.75 388.75 294.75 Ferrexpo 419.75 -18.25 448 197 Mitchells & Butlers 351 -4.25 361 265.50 Stagecoach Group 201.50 -4.25 224 160.75
Balfour Beatty 320 -5 327 229.75 FirstGroup 382 -9.25 412.50 336 Mitie Group 230.50 -1.50 241 188.75 Standard Chartered 1707 3 1950 1351.75
Barclays 303.25 7 383.25 255.25 For.&Col.Inv.Tst 308.75 -3.50 316.25 251.50 Mondi 494 -14 557.50 338.25 Standard Life 222 -2.50 236 173
Barratt Development 98 -1.25 137.75 70 Fresnillo 1346 -84 1682 669.50 Monks Inv.tst. 355 -3 363 271 Supergroup 1553 -52 1638 535
BBA Aviation 220 -6 228 158 G4S 261 -6.75 283.50 237.75 Morgan Crucible 264.25 -7.50 274.25 159.75 SVG Capital 248 -2 250 125.25
Bellway 666.50 -0.50 809 511 Genesis E.m.f. 539 -11 568 399 Morrison (Wm) 262.75 -4.50 306.25 257.50 TalkTalk 153 -6 168.25 108.50
Berkeley Grp Hldgs 916 -27.50 960 742 GKN 214 -6.25 237 102 Murray Int.Tst 925 -8 966 736.50 Talvivaara Mining 570.50 -17 620 342.50
Betfair Group 1015 -39 1550 882 GlaxoSmithKline 1151.50 -39.50 1318.50 1095 National Express 246 -4.50 259.50 195.50 Tate & Lyle 552 -12.50 564.50 388.75
BG Group 1298.50 -31 1366 984 Great Portland Est. 355.50 -7.75 369.25 279 National Grid 539 8 596.25 484.25 Taylor Wimpey 35.25 -1.25 44 22.25
BHP Billiton 2382 -88 2616 1684.50 Greene King 451.50 -10 491.50 376.25 Next 2136 2 2344 1817 Telecity Group 453 -7 532.50 360
BlackRock Mining 784 -19.50 815 492 Halfords Group 405.75 -2 550 372.75 Northumbrian Water 313 -7.25 361.50 252.75 Templeton Emrg. 641 -9.50 689.50 471.50
BlueCrest AllBlue 170 -1 174.50 156.25 Halma 327 -8 366.50 223 Ocado Group 213.50 6 213.50 123.50 Tesco 399 -4.75 454.50 377.50
Booker Group 58.50 -0.25 60.50 38.75 Hammerson 437.25 0.25 437.50 336.25 Old Mutual 126 -1.25 145.25 97.25 Thomas Cook Group 196.50 -5.25 272 171.75
BP 494 -12 655.50 303 Hargreaves Lansdown 516 -25.50 599 276.50 PartyGaming 206 -4.50 334.50 205 Travis Perkins 1038 -33 1127 664.50
Brit Insurance 1051 -2 1055 728 Hays 121.50 -3.75 133.50 88.50 Pearson 1039 -12 1051 855 TUI Travel 262 -7.50 308.50 190
British Airways 282.50 -5 305 184.25 Henderson Group 149.75 -5.75 155.50 112.75 Pennon Group 624.50 -5.50 650 483 Tullett Prebon 391 -4.50 420.50 262
British Amer.Tob 2297 -40.50 2521 1959 Heritage Oil 434.25 -24.75 581 296.75 Persimmon 425 -18 507.50 336.50 Tullow Oil 1307 -53 1388 991.50
British Empire Tst 499.50 -1.50 512 396.50 Hikma 895 -5 900 525 Petrofac 1588 -28 1685 876.50 UK Commercial Prop 80.25 -0.75 85 72.75
British Land 523.50 -8.50 537 418.25 Hiscox 379.50 -2 399 326.25 Petropavlovsk 1055 -40 1365 852 Ultra Electronics 1731 -29 1895 1265
Britvic 441.50 -3.50 518 404.50 Hochschild Mining 500.50 -22.50 658 234 Phoenix Group Hldgs 594 -22 758 557.50 Unilever 1890 -5 1997 1688
Brown (N.) Group 303.50 -4 311.25 206.50 Home Retail Group 215 -6 295 188.50 Premier Farnell 282 -5.50 304.50 174 United Utilities 557 -5 628.50 507
BSkyB 746 0 746.50 524.50 Homeserve 441 -3 487.50 326.25 Premier Oil 1988 -19 2025 1017 Utd Business Media 701 -9.50 712 409.75
BT Group 176.50 -2.75 190.75 110 HSBC Holdings 697.25 -6.75 719.50 596.25 Provident Financial 966 4 999.50 728.50 Vedanta 2372 -102 2934 1839
Bunzl 740 -15 777 616.50 Hunting 757 4 806 439.50 Prudential 667 -3 697.50 487.50 Victrex 1392 -16 1522 806
Burberry Group 1045 -45 1156 590.50 ICAP 545.50 -14 570.50 294 PZ Cussons 376 -15.50 409 241.50 Vodafone Group 172.75 -3.75 178.75 129.50
C&W Comms 48.25 -2 63.75 44.25 IG Group 469 1.50 553 362.50 QinetiQ Group 134.50 0.25 142 96.75 Weir Group 1617 -28 1861 735.50
C&W Worlwide 67 -2.50 100 60.50 Imagination Tech 382.75 -16.50 441.75 215 Randgold Res 4964 -191 6655 4209 Wellstream Holdings 784 0 793.50 436
Cairn Energy 437 -9.50 493.25 318.25 IMI 891.50 -35 953 530.50 RDS ‘A’ 2115 -23.50 2162 1624 Whitbread 1734 -50 1887 1266
Caledonia Inv. 1860 -8 1928 1512 Imperial Tobacco 1811 -18 2154 1753 RDS ‘B’ 2107 -33 2159.50 1554 William Hill 183 -6 216.50 155.50
Capita Group 703 -18.50 826 635.50 Inchcape 382 -6 394.75 237 Reckitt Benckiser 3346 -81 3655 3037 Witan Inv Trust 509.50 -4.50 522 410
Capital & Counties 145.50 -0.25 157 100 Informa 434 -14 448 304.50 Reed Elsevier 556 -0.50 563 460.50 WOLSELEY 2173 -13 2195 1223
Capital Shop Centre 377.50 4.50 424.75 301 Inmarsat 621 -7 821 606.50 Regus 99 -1 120 66 WPP Group 787.50 -6 802 572.50
Carillion 379.50 0.50 387.50 273 InterContinental Htl 1287 -35 1332 887 Renishaw 1338 17 1342 565.50 Xstrata 1388.50 -74 1535 845.75
Carnival 2967 -51 3153 2037 Intermediate Cap.Grp 340.75 -7.25 360.25 240.50 Rentokil Initial 101.50 -0.75 138.50 87.75 YULE CATTO 220 -1.25 221.25 106
Catlin Group 371 4 393 320 International Pers Fin 336.50 -18 386.50 183.25 Resolution 249.50 -2 328.50 211.25
Centamin Egypt 146.50 -11 197 106.75 International Power 416.75 -6 448.50 284.50 Rexam 336.25 -3.75 356 276.50 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 329.50 -0.50 346 264 Intertek Group 1720 -65 2000 1150 Rightmove 795.50 -1 812 500.50
Charter 800 -35 853.50 567 Invensys 329.50 -27.75 364.25 230.25 Rio Tinto 4237 -138 4584 2812 POWERED BY
Chemring Group 3166 -18 3663 2598 Investec 500 -13 562 417.75 RIT Capital Partners 1311 0 1311 971.50
Close Brothers 852 -34 888.50 664 ITV 76 -1.50 78.50 48.25 Rolls-Royce Group 630 -19.50 665 473.50 www.digitallook.com
 Living
20 CITYA.M. 21 JANUARY 2011

| Schools

Moving in on Britain’s top private schools

Want your child to go
to a top private school
but live at home?
Donata Huggins tells
you how to go about it

S
ETTING your child up as a day boy
or girl can be the perfect compro-
mise for parents who want to give
their child a private education, but
can’t bear the idea of letting them live
away from home. While independent
schools tend not to require you to live
within a certain distance, parents deter-
mined not to be trekking across the coun-
try on the school run, will find themselves
looking to move closer to a good school.

THINGS TO CONSIDER
There is a lot to consider if you have chil-
dren approaching secondary school age.
Firstly, the competition to get into the
best schools is extremely tough and
requires a lot of planning prior to enroll-
ment. Particularly if you are keen to get
your hands on financial help from a schol-
arship or bursary. Not to mention that you
have to decide if it is feasible for you to
live and commute into work from an area
close to a good school.
So to get you thinking, we’ve featured
the UK’s top five independent school
below s within a reasonable commuting
distance to London, considering the selec- If only they knew how much hard
tion criteria, cost, commuting time and work goes into getting them there?
the area as a whole. Picture: ALAMY

WYCOMBE ABBEY SCHOOL (GIRLS) NORTH LONDON COLLEGIATE SCHOOL (GIRLS)

School: Wycombe Abbey School has
been ranked the best independent
school in the country by the
Sunday Times Schools Guide
this year. It scored 99.3 per
cent A*-Bs for A-level and
99.3 per cent A*/A
grades for GCSE.
Selection: Gaining
admission to this
school requires a lot of
planning: applications
for entry at age 11
must begin eighteen
months prior to admis-
sion. The process requires
the parents to send off an
application. The child is then
invited for interview and then,
should an offer be made, to take
the entrance exam. The final selection
is made on the basis of the child’s results.
Fees: £7,310 per term
MAGDALEN COLLEGE SCHOOL (BOYS, CO-ED IN THE SIXTH FORM)
School: Magdalen College School has been
ranked the third best independent school in the
country by the Sunday Times Schools Guide this
year. It scored 99.7 per cent A*-Bs for A-level
and 97.3 per cent A*/A grades for GCSE.
Selection: While candidates do sit examination
papers and undergo an interview for selection,
the school prides itself on choosing candidates
on the basis of potential, taking the child’s wider
interests into consideration.
Fees: £4,209 per term.
Scholarships and bursaries: Awards
are means-tested and only made to
children of sufficent merit.
Scholarships, however, require
the parent to fill in an appli-
cation form six months
before the admission date.
Adequate candidates are
then invited to take the
scholarship exam.
Transport: The school
is close to High
Wycombe railway sta-
tion. Trains reach London
Marylebone in 37 mins.
Area: The town still has a
town cryer and weighs its
Mayor each year to check if he
or she is profiting at the townspeo-
ple’s expense. With the average prices
for a three bedroom house at £285,414, the
area is tempting, but remember that there are some
unsavoury parts outside the historical centre.
Scholarships and bursaries: Awards are given
for academic and extra curriculur excellance. All
applicants hoping to enter the school at age 11
are considered for the awards.
Transport: Oxford station runs into London
Paddington in 57 mins. The school is also close to
the M40 offering the option to drive into central
London in just under an hour and a half
Area: The area’s academic credentials make it a
fantastic place to live if you are interested in vis-
iting art galleries, churches, libraries or the the-
atre.
School: The North London Collegiate School has
been ranked the best independent school in the
country for the teaching of the International
Baccalaureate and fifth best for A-levels and GCSEs
by the Sunday Times Schools Guide this year. It
scored 98.3 per cent A*-Bs for A-level and 96.6 per
cent A*/A grades for GCSE.
Selection: Entry at 11 requires girls to sit two exam-
inations in the January of the year of entry – one in
English and one in Maths. On the basis of these
results, girls are invited for interview.
Fees: £4,524 per term.
ST PAUL’S SCHOOL (BOYS) & ST PAUL’S GIRLS’ SCHOOL
School: St Paul's School has been ranked the second
best independent school in the country by the
Sunday Times Schools Guide this year. It scored
99.3 per cent A*-Bs for A-level and 98 per
cent A*/A grades for GCSE.
Selection: Parents register inter-
est in the school in September a
year before the admission date.
The entrance exam is sat in
February.
Fees: £5,976 per term.
Scholarships and
bursaries: Awards are allocated
by means-testing, which requires
the details of the child’s parents’
financial situation.
Transport: Both schools are in central London
close to Hammersmith tube station. But Paul’s Boys’
is slightly closer to Barons Court and Turnham Green
and St. Paul’s Girls’ is slightly closer to Kensington
Olympia.
Scholarships and bursaries: Music and aca-
demic scholarships are available. Parents do not
have to apply for the academic scholarship, they
are chosen purely on the basis of entrance exam
results. For a music scholarship, however, par-
ents must fill in an application form and the
child must perform two prepared pieces of
music.
Transport: Stanmore, Edgware, Canons Park
tube stations.
Area: Close to the centre of London, this area is
affulent, leafy and surrounded by golf courses.
School: St Paul's Girls' School has been ranked the
fourth best independent school in the country by the
Sunday Times Schools Guide this year. It scored
98.2 per cent A*-Bs for A-level and 99.1 per
cent A*/A grades for GCSE.
Selection: The school states that it
looks for strong potential rather
than girls who have been well-
coached. For entry at 11, candi-
dates are required to take an
online cognitive test, submit a
reference from their current
school, undergo an interview
and sit three entrance exams.
Fees: £5,434-£5,842 per term.
Scholarships and bursaries: There are
means-tested awards for academic and
musical ability.
Area: Running along the Thames, the area offers a
number of good riverside pubs and beautiful views
from Putney and Chiswick Bridge.
 Interiors by partner yoo Furnish

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Investment in this scheme is restricted to certified high net worth or sophisticated investors. Evidence of this certification will be required before detailed information can be provided to you.
22 Living | Focus On Romford CITYA.M. 21 JANUARY 2011

LETTING
THE GATEHOUSE
Price: £189,000
Ever fancied living in a
Q&A
brewery? This light and airy
two bedroom apartment is
worlds away from its former Andrew Dunning
incarnation as part of the HEAD DESIGNER AT APD
Romford Brewery Company. INTERIORS, AN INTERIOR
A central location (the railway DESIGN CONSULTANCY
station is just a short walk
away) makes this property a
Q.
We are planning to redecorate. What
good bet for commuters too. do I need to consider when planning
Contact: Haart of Romford on a colour scheme?
01708 730599 or go to

www.haart.co.uk
PRINCES ROAD
Price: £510,000
Boasting five bedrooms, two
inter-connecting living rooms, a
spacious kitchen and a drive-
through garage, this property
has bags of room for a growing
family. It oozes charm as well,
inside and out: high ceilings and
deep cornices reveal its turn of
the century origins, while
French doors open out onto
landscaped gardens that
include a pergola. Contact
Beresfords on 01708 730255
or go to www.beresfords-
group.co.uk.
A.
WHETHER you are looking to create a
soothing calming interior or looking for
your home to be colourful and edgy, the
colours picked will dictate what you actually
achieve.
l If you are planning a scheme for the whole
house remember that the relationship between
the rooms needs to be considered. This is espe-
cially true if you have a small home. A calm
interior will only be achieved if everything flows
together from room to room.
l Buying yourself a colour wheel will help you
plan a scheme. For an interior that is restful
and calming, choose colours that are near each
other on the wheel.
l When planning your colour scheme it can be
one of three sorts: tonal, harmonious or
OLD KEEPERS COTTAGE complementary.
Price: £795,000 l To make sure you like your choices, buy a
The only thing that’s cottage-y about this grade II listed property is sample pot and paint a large sample on some
its name. Set over two acres of lush grassland, this former lining paper. You can then move it around your
blacksmith’s forge has been transformed into a luxurious, open-plan room at different times of the day – paint fin-
five bedroom country house by its present owner. Deer can be ishes look different in different lights so make
spotted meandering through the grounds. Idyllic. Contact: Fine on sure you are a happy before you get out your
0845 899 0008 or go to www.fine.co.uk. paint and brushes.
Q.
I am interested in adding a conserva-
tory to my home and would like to
NEED TO KNOW | AREA INSIGHT know more about glass box
extensions.
Commuting: There are frequent Restaurants and pubs:

trains from Romford Railway
Station to Liverpool Street with
journey times as short as 20
minutes.
Education: The Cooper’s
Company and Coborn School – a
comprehensive in nearby
Upminster – is “an exceptional
school of real excellence”
beautiful timber windows according to OFSTED and worth
travelling to. Romford’s borough of
Havering performs impressively in
national primary league tables.
Crime: Havering is one of the
safest London boroughs and crime
rates are below national averages.
Numerous fast food joints and not
much else, although the town is
home to Britain’s official best
sandwich bar – Taste – where you
can find all manner of healthy,
homemade goodies. The Golden
Lion claims the title of Romford’s
oldest pub: it has wooden beams,
an open fire, a jukebox and
allegedly, a resident ghost.
Leisure: Romford has something
for everyone. It hosts the largest
market in East London, has many
parks and green spaces, a huge
array of shops, an ice-rink, its own
football team (Romford FC) and
even a greyhound stadium.
Amy Higgins
A.
THE direction of the property will
have a large bearing on deciding if a
glass box extension is suitable. In a
north-facing position this type of extension is
great, especially if you have a lack of light.
However, on a south facing wall the room
will become unbearably hot and having to
use shades will only detract from the beauty
of the structure. Also, given the lack of solid
walls, curtain will not be an easy solution so
you should consider any privacy issues during
planning. It is now possible to include blinds
within the glazing if specified before building
starts, or you can even specify glass that will
become opaque when you flick a switch. A
solid floor is a good choice for flooring in a
glass box extension: either wood or tiles
would be very suitable. If you choose a suit-
able tiled finish (i.e. limestone) you can
extend it into the garden to create a seam-
less connection between the new extension
and the garden. www.apdinteriors.com

PROPERTY NEWS
BY AMY HIGGINS

HYDE PARK PROPERTY FLOURISHING
Over 55 per cent of the mega-luxe,
much-hyped Hyde Park development the
Lancasters (competing with the even-
more hyped One Hyde Park), has been
b e s p o k e s a s h & c a s e m e n t w i n d o w s sold in advance of its opening in June,
Come and visit us at the showroom: making developers Northacre the second
406 Merton Road, London SW18 5AD best performing retail stock in Europe.
Telephone 0208 877 8920 Klas Nilsson, Northacre’s chairman, puts
www.ayrtonbespoke.com this down to “a chronic lack of supply” in
London’s high-end property market.
NEW HOMES PRICES STEADY
The average price of new homes fell by just
0.2 per cent last year despite gloomier
forecasts. Prices have been buoyed up by
reduced activity in the new homes industry
and a consequent lack of supply. The prime
London property market also looks set to
hold firm. Top London property group
Sanfords saw a surge of activity in the first
week of January, which it attributes to City
bonuses and interest from foreign buyers.
SOUTH WEST TRUMPS CENTRAL
Property values in South West London
increased by 150 per cent between 1997
and the end of 2009 while Central London
properties were only able to manage a
jump of 130 per cent, says estate agent
Douglas & Gordon. CEO Michael Hodgeson
said that areas such as Clapham and
Putney had overtaken glitzy Kensington
and Chelsea and were now “the pinnacle of
the UK housing market”.
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*Figure represents 80% of the purchase price to be financed now. 5% deposit to be paid by purchaser. Full prices start from £176,500. EasyBuy is only available on selected properties and is not available in conjunction with any other offer. The remaining 20%
of the price is left outstanding as a loan for up to 10 years secured by a second mortgage. You pay 0% interest pa fixed on the outstanding 15% for the first 5 years and only 3% interest pa (typical 3.00% APR) thereafter. EasyBuy is subject to status and Crest
Nicholson’s terms and conditions, including exchange of contracts within 28 days, legal completion by the specified date and 5% deposit required on exchange of contracts. Written details available on request. Crest Nicholson does not sell mortgages or give
financial advice. EasyBuy offer is based on a mortgage using Crest Nicholson’s recommended IFA. Offer ends 28th February 2011. Prices correct at time of going to press. Typical Crest Nicholson interiors. Travel times approximate. Crest Nicholson Eastern,
a division of Crest Nicholson Operations Limited, One Myrtle Road, Brentwood, Essex, CM14 5EG
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT
 24 Living | Holiday Homes
Limassol Marina is a
slice of nautical heaven
A new development in Cyprus’s
second largest city provides for
superyachters and sun-seekers
alike, says Zoe Strimpel
E
VER wanted to take your superyacht
through Cyprus en route to Africa or the
Middle East but been discouraged because
there was nowhere to berth it? Soon that
will no longer be a problem, thanks to the com-
pletion of the new £350m Limassol Marina, a
luxury collection of waterside villas, residences
and moorings that can accommodate yachts of
up to 100 metres.
Above: the elegant interior of one of the
apartments. Right, the berths shouldering the
residences’ gardens. Below: an aerial view.
“We have a unique location between
Africa, Asia and the Middle East,” says
Nick Pampakis, Marketing Manager at
Limassol Marina. “It was a bit strange
not to have a marina for superyachts.
This is an attempt to put Cyprus on the
world superyachts map.”
Indeed: should they choose to buy a
villa too (the Marina expects a fair
amount of buyers to go for a berth and
a residence), sailors can moor their ves-
sels, hop out into their gardens, out
their back doors and straight into a car.
Whether they take up a residence or
not, Limassol Marina will be a lovely
place to step ashore. The waterfront is
developing into a hive of restaurants,
cafes, bars and high-end shops. The
Marina has been built in a style that
blends with the city’s maritime histo-
ry, historic centre and Medieval castle
– all of which are worth exploring. The
Four Seasons, Le Meridien and other
world-class hotels are a mere ten-
minute drive away if you want a spa
treatment or gourmet dinner. For
those in search of more cultural excur-
MARITIME GLAMOUR | WORLD’S MOST EXCLUSIVE MARINAS
PORTO CERVO, COSTA SMERALDA
Sardinia’s tiny but blisteringly expensive
enclave for superyachts puts St Tropez in the
shade. Known for its cocktails requiring a
second mortgage to pay for, this is the mari-
na in which to show you’ve arrived. There are
60 superyacht berths.
CAPRI, AMALFI COAST
Even more expensive than Porto Cervo, this
glittering spot on the Amalfi coast will set
you back €2,900 per night. There are only
CITYA.M. 21 JANUARY 2011
sions, Limassol is near a host of impor-
tant ancient monuments and land-
marks, including the spectacular
amphitheatre of Kourion, the temple
of Apollo and the ancient city of
Amathus.
Although the Marina and its resi-
dences have been designed luxurious-
ly, it’s not elitist. Of the 650 berths,
only 70 will be used for superyachts,
reckons Pampakas. The majority of
boats – sailing and motor – will be
between eight and 30 metres. Ground
floor apartments open out to their
own gardens and residences have
access to a swimming pool and many
have sea views. Prices start at £400,000
(far less than the cost of a superyacht).
Cyprus is considered a stable place
to invest in property, with its increas-
ingly sunny climate (340 says of sun-
shine each year) and its slow and
careful development as a second home
and tourist destination. A relatively sta-
ble economy is also a plus. For more
information and photos, go to limassol-
marina.com/about-limassol-marina.
ten berths for superyachts.
IBIZA MAGNA, IBIZA
Average daily mooring fee is €2,300 at this
playground of the young, well-connected and
super-rich. A favourite for the clubs’
September closing parties.
YAS MARINA, ABU DHABI
Not quite as expensive as its European coun-
terparts, Yas is located alonside Abu Dhabi’s
Formula 1 Race Track as the Emirati answer
to Monaco.
 Stylish 2 bedroom/2 bathroom apartments
with secured basement parking less than
AT PAPERMILL PLACE 20 minutes from Liverpool Street & West End†
WALTHAMSTOW, E17

Ready for move-in now from £225,000*

• Rapid connections to the West End, The City & Stratford: Black Horse Road tube station on
the Victoria line less than 10 minutes walk away
• Kitchen appliances & all floor coverings included
• Exemplary Customer Service with 24/7 support for the first two years
• Studios and 1 bedroom apartments also available

Sales Centre & Show Homes open now - Call or see website for daily times

0800 883 8983 or (out- of- hours) 0800 032 0077 www.vellumapartments.co.uk
*Price correct at time of going to press. Photographs depict Vellum exterior and showhome interiors. †Times are approximate and are courtesy of www.tfl.gov.uk.

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 Business Features | Entrepreneurs
26
NEW PARENTAL
LEAVE RULES
HARM SMES
LARA MORGAN
ENTREPRENEUR
I the couple that are
AM not anti-parental leave, but as the
owner of a successful international busi-
ness and the mother of three, I feel more
entitled than most to say that Nick
Clegg’s proposals for shared parental leave
are unworkable for small and medium-sized
businesses (SME).
My view may seem drastic but my business
started off small and at that stage every
single member of staff made a huge impact
on the running of the business.
When there were just a few of us, each
employee – not least myself as the owner –
was vital to the business’s success. For this
reason, I was back at work four days after I
had my first child. One week after my second
and three weeks for my third. It would have
risked the business’s success had I stayed at
home longer.
Granted I was fortunate that I could take
my baby into work and breastfeed there. And
I admit, this might not work for everyone, but
I would have been happy to have any of my
employees do the same.
CRIPPLING FOR SMALL BUSINESS
The truth is, maternity leave – and now pater-
nity leave – can be crippling for small busi-
nesses. The potential for disruption is huge
and it is absurd that the same rules apply to
small businesses as large ones.
Take the case of a friend of mine who runs
a company of six people. She fell pregnant at
the same time as two of her employees and
that meant 50 per cent of the workforce were
out of action. The workload then had to be
shared amongst the other employees.
The problems start with holding the job
vacancy open for the new mother while she
decides whether or not to return to work. This
makes life very difficult because it’s close to
impossible to find adequate maternity cover.
Short-term replacements are never able to do
the job to the same standard. Not to mention
the added expense of temporary staff that are
costly for a small business to source and
maintain.
MORE COMPLICATED
And now it is about to get more complicated:
the plans outlined this week give parents the
right to share the leave, potentially dividing
the full 10-month entitlement into chunks
between them.
While it’s not unreasonable for new dads to
get some time off, the truth is there’s only so
much that a man can do in the early stages,
and for small businesses, having any employee
taking chunks of time off is both impractical
and impossible to plan cover around.
ADDING ANOTHER HURDLE
The proposal merely adds another hurdle for
those thinking of setting up their own
business and discourages those already run-
ning one from taking on more staff.
It’s an illogical step to take at a time when
the government should be making small busi-
nesses lives easier. After all, small businesses
are supposed to be the job creators that are
going to stimulate growth and deliver the eco-
nomic recovery.
Lara Morgan is the founder of Company
Shortcut and Pacific Direct.
Agree with Lara Morgan? We welcome
debate. Do you have a strong view on small
business and entrepreneurship in the UK?
Email donata.huggins@cityam.com
CITYA.M. 21 JANUARY 2011
The disastrous date that
made Mr & Mrs Smith
Donata Huggins meets
doing family and
business by the book
P
ICTURE this: you’ve just started dating
a gorgeous girl and she agrees to go
away for the weekend with you. You’re
excited, you want to spoil her, so you
book a spa. Things are going well. You man-
aged to clean out all the junk food boxes on
the back seat of your car and you didn’t even
miss the turning on the motorway. She was
probably even impressed by your choice of
radio station. Quite frankly, the scene is set.
All you need now is to be sat in a jacuzzi bath
with a glass of champagne and the romance
is sure to begin.
But then imagine this: the brochure wasn’t
clear and as you check in to the hotel the staff
ask you to “get weighed in” to record your
body measurements, alcohol is banned and
the menu only offers a selection of low-calorie
macrobiotic meals. This actually happened to
James Lohan fourteen years ago when he
tried to take a girl he had just started dating
away for the weekend.
Undeterred, however, James not only man-
aged to win the girl’s (Tamara Heber-Percy)
heart and then hand in marriage, but
actually convinced her to pour all their life
savings into starting up a guidebook business:
the now well-known Mr & Mrs Smith guides.
“I had it in my mind that they’d be sort of a
dirty weekend away guide, but Mr & Mrs Labour of love: the founders of a luxury guidebook company
Smith is a brand that is more fitting for the
sophisticated boutique hotels our guides slave labour before long,” jokes James. ment. It means we always understand what
include,” James explains. The company is based in Chiswick close kind of day each other have had.”
The pair really struggled to get set up. to the couple’s family home: “It means we But are there downsides? “We don’t get
Having produced their first book at great can work hard on both the business and our to go on holiday much anymore. We travel
expense, they could not find a publisher or a family life.”“Living close by means that I mainly to our other offices for work. Our
distributor. James explains: “We found that can switch quickly between feeding the staff check out most of the hotels,” Tamara
the publishing industry was all sewn up. kids breakfast and checking that the Asia says. “Well, we do go to some,” James
Unless you had a publisher that had a rela- team haven’t had any problems overnight.” admits, “whenever there’s a hotel the staff
tionship with a distributor you were not “It works really well,” Tamara says, “James aren’t sure is good enough to include in our
going to sell your book. And every publisher and I don’t see too much of each other guidebooks, we usually get dispatched to
we approached said the guidebook market because we work on opposite ends of the make the final call. Funny really, because it
was full.” office on different parts of the business. It’s means that I’ve never stopped taking
After self-publishing, tracking down an great to see my husband in a work environ- Tamara to bad hotels!”
independent distributor and launching an
aggressive marketing campaign, the couple CV | MR & MRS SMITH
sold 25,000 copies in the first three months.
The business now has 75 staff, bureaus across James Lohan Tamara Heber-Percy
the world and a policy of never employing Job title: Co-founder and CEO Job title: Co-founder and CTO
anyone from the publishing industry. It is fair
to say they proved the market was not full. Age: 40 Age: 38
Born: London Born: Ibiza, Spain
WORK/LIFE BALANCE Studied: “I went straight to work at 18.” Studied: Languages, Oxford
James says: “The guides are designed to offer Motto: “If it were easy everyone would be Motto: “Don't be afraid to do it yourself.”
couples a way of guaranteeing an atmospher- doing it.” First ambition: “To travel the world.”
ic weekend away: no doilies or squealing fam- First ambition: “To buy a classic convertible Talents: “I speak fluent Techie.”
ilies.” “Although now we have a squealing sports car. Achieved at 19 – and subsequently Favourite business book: Don’t Make Me
family of our own,” Tamara laughs. “The kids spent all my salary fixing it.” Think by Seth Godin
are really little now, they’ll be drafted in as
ENTREPRENEURS NEWS | IN BRIEF
START UP DISCOUNT WEBSITE LAUNCHED UK PRIVATE EQUITY SEES WINTER DIP STRAIGHT TALKING BUSINESS
The National Business Awards Entrepreneur of The UK private equity market dipped in the Jo Fairley, the entrepreneur behind the Green
the Year winner Nick Ogden launched a non-for- final quarter of 2010, despite widespread & Black’s chocolate brand, will be speaking
profit website (www.business.co.uk) that is optimism, according to a report by Corbett about the importance of straight talking in
designed to encourage entrepreneurs to start Keeling. While the third quarter of 2010 saw business. After the talk, drinks will be served
their own businesses. The website hopes to pro- a surge in activity and a number of large and there will be an opportunity to network.
vide access to the discounts, offers and incen- deals, activity was more subdued as the win- The audience will be made up of entrepre-
tives that are available through partnership. The ter set in. Larger buyouts saw a fall in volume neurs, with legal, financial and human rela-
companies participating so far included BT and value, with just three deals valued at over tions advisers to speak to for guidance. The
Group, School for Startups, NatWest, EasyJet, €150m in the UK during the final three event takes place on Tuesday 1 February at
AXA Insurance, Fasthosts Internet and RJJ months of the year. Overall, 2010 saw a con- The Duke of York, 130-134 Victoria Street,
Freight – all of which have developed pro- siderable upturn in activity in this segment SW1E. Doors open at 5.30pm and the event
grammes to support starts ups in the UK. compared with 2009. will close around 8pm.
Lifestyle
Slasher flick with added pliés
Ballet meets horror in
this uncomfortable
psychological thriller
Film
BLACK SWAN
Cert: 15
hhhii
NATATLIE Portman plays ballet dancer
Nina in this psychological thriller from
director Darren Aronofsky (the Wrestler).
She’s just landed the lead role in Swan
Lake: it’s The Biggie. Notorious for being
mentally and physically exacting, the chal-
lenge is made even tougher when the tal-
ented Lily (Mila Kunis) joins the company.
She’s everything that the awkward, chaste
and nervous Nina is not. And she’s a threat.
Nina must portray both the innocent
White Swan and the menacingly seductive
Black Swan. Naturally more suited to the
former, she’s compelled to embrace the
darkness of the latter to bring the part
alive. Slowly, a metamorphosis takes place.
But it comes at a price. Her already tenta-
tive grip on reality deteriorates: consumed
by jealousy of Lily and by the brain-fraz-
zling intensity of the role itself, reality and
fantasy begin to blur. Is she being followed?
Is Lily out to get her and her lead role?
Black Swan is an entertaining watch,
especially when, in tandem with Nina’s
transformation, the movie recasts itself as a
horror picture – an unsettling face-stabbing
slasher with added pliés. Portman’s manic
Suiting that’s
fit for a king
Timothy Barber looks at the enduring
influence of royalty on men’s dressing
T
HERE’S a moment in the
movie du jour, The King’s
Speech, when Colin Firth’s
Bertie, Duke of York (and
future George VI) goes to Balmoral
where his brother Edward, the Prince
of Wales (Guy Pearce, above right) is
hosting a rather racy party.
Firth shows up wearing a
kilt, and looks rather a
ninny compared to the
suavely suited bright
young things of his broth-
er’s crowd. And, of course,
not the least debonair
among them is his broth-
er himself, resplendent in
a green tweed number
with a blue check.
This is one of the few
moments in the film to hint at
the famous stylishness of the
Prince of Wales as was, and Duke
of Windsor as he became post-
abdication crisis. As it happens,
Firth and co-star Geoffrey Rush
sport some very fine suits them-
| Film & Fashion
performance is impressive, the costumes,
make-up and cinematography are stun-
ning, and the haunting whispers of sound
design engrossing.
But the Portman-centric script leaves the
supporting cast under-developed, and the
tonal shift jars uncomfortably. Aronofsky’s
Requiem For A Dream was infused with
innovation. The Wrestler boasted nuance
and genuine poignancy. But Black Swan –
with its predictable and unconvincingly
melodramatic script – has none of these. It
seems a step backwards as a result.
Tom Latter
MORNING GLORY
Cert: 15
hhhii
IN this formulaic but likeable romantic
selves in the film – note: heavy wools,
wide, peaked lapels and bold stripes are
the 1930s order of the day, while Firth
even manages to make a bowler hat
look just the thing.
But it was Edward (far right), the
rebellious playboy who refused
the throne to marry a
divorcee, who was the style
icon of his day. Arguably
the most photographed
celebrity of the age, he
popularised the grey
glen plaid suit pattern
that subsequently
became known as the
Prince of Wales check
(and which is creeping
back into fashion at
the moment). His
wearing of suede
brogues with a lounge
suit was an act of arch
sartorial rule break-
ing, while his wide tie-
knots – inevitably in a
regimental tie – gave us
ISRAEL’S NEW 27
DESIGN HOTEL
IN MONDAY’S
TRAVEL SECTION
ALSO OUT
THIS WEEKEND
TIMOTHY BARBER
FILM
THE DILEMMA Vince Vaughan and Kevin
James (no, us neither) star in this predictably
lame bloke comedy. Avoid it – et voila, dilem-
ma solved!
comedy, Rachel McAdams is a sassy young Above, Natalie
TV executive charged with reviving an ail- Portman in Black NEDS Actor/director Peter Mullan’s terrific
ing breakfast show called DayBreak (sound Swan. portrait of delinquent life in Glasgow’s tough
familiar?). She recruits high-brow journo estates in the 1970s.
Mike Pomeroy (Harrison Ford) to co-present
with former beauty queen Colleen Peck
(Diane Keaton). For a minute it even looks
as though Morning Glory might be about
to make an insightful contribution to the
serious news vs populist entertainment
debate. But no: Becky discovers that tacky
gimmicks boost ratings, Ernie the weather-
man gets his bottom tattooed and the only DVD
conclusion Morning Glory draws is that
winners dumb down. THE SWITCH Jason Bateman and Jennifer
There’s plenty that’s questionable about Aniston star in a romantic comedy about mis-
Morning Glory, including the crass double taken-identity sperm donation, as Hollywood’s
entendre of the title (not that anything else rom-com cup runneth ever more dry.
in the film is remotely risqué). But the film
does make you smile: the joie-de-vivre of DINNER FOR SCHMUCKS Steve Carrell is a
McAdams’s performance and the bitchy weirdo who gets invited to dinner by Paul Rudd
interplay between Ford and Keaton make it to impress his bosses in a game to find the
worth a watch. Amy Higgins biggest schmuck. Which is you, if you watch it.
the Windsor and half-Windsor knots,
named in his honour.
More than these details, though, it was
the effortless, easy elegance with which he
carried off his suits that made Edward such
a charismatic clothes horse. And while we
might write the modern royals off as duf- SALE
fers, the fact is they continue to be good
dressers. Patrick Grant, director of Savile E nd s S unday 3 0 January
Row’s Norton & Sons, cited Prince Charles
as a contemporary fashion icon when he Up to 5 0 % Of f
won Menswear Designer of the Year at the Autumn/Winter 10/11 Collection
British Fashion Awards before Christmas.
And even Prince William, hitherto a 6DYLOH5RZ/RQGRQ:637
rather awkward Sloaney figure, was cut- 7
ting more sartorial dash than expected
when he announced his engagement in a 6WRUH2SHQLQJ+RXUV
sharp, single-breasted blue suit accessorised 0RQ6DWDPSP
with a natty, on-trend pocket square (left).
7KXUVGD\DPSP
They may not be much good at dressing
6XQGD\DPSP
down, staying married or making declara-
tions on architecture, but wearing suits is
one thing the royals continue to get right.
 28 Lifestyle | TV& Games CITYA.M. 21 JANUARY 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News 6.30pm Great British 6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five:
7pm The One Show Railway Journeys 7pm Emmerdale 7pm Channel 4 News Topical reports.
7.30pm A Question of Sport: 7pm Julia Bradbury’s 7.30pm Coronation Street 7.25pm 4thought.tv 7pm Five News at 7
BBC News German Wanderlust 8pm Children’s Hospital 7.30pm Planning Outlaws 7.30pm Michaela’s Zoo Babies:
8pm EastEnders 7.30pm An Island Parish 8.30pm Coronation Street 8pm Relocation: Five News Update
8.30pm QI 8pm Mastermind 9pm CHOICE Comedy Rocks Phil Down Under 8pm CHOICE Ice Road
9pm Hustle 8.30pm Life in a Cottage with Jason Manford 9pm The 50 Funniest Truckers; Five News Update
10pm BBC News Garden with Carol Klein 10pm ITV News at Ten Moments 2010 9pm The Mentalist:
10.25pm Regional News 9pm CHOICE 10.30pm London News 11.10pm British Comedy An adulterous woman is
10.35pm The Graham Norton Show Can’t Take It with You 10.35pm Take Me Out Awards: The Nominations killed at a luxury resort. CAN’T TAKE IT WITH YOU
11.20pm The National Lottery 10pm Fast and Loose 11.50pm 30 Years of An 12.10am 10 O’Clock Live 10pm CSI: Crime Scene BBC2, 9.00PM
Friday Night Draws 11.30pm FILM 10.30pm Newsnight 1.10am Music on 4: Mercury Prize Gerry Robinson learns how a mother-
Point Break 1991; Weatherview Audience With Sessions 1.25am My Name Is Earl Investigation
1.30am Sign Zone: James May’s 11pm The Review Show: 12.40am The Zone; 1.50am My Name Is Earl 2.15am 10.55pm NCIS of-five wants to leave her youngest
Man Lab 2.30am Sign Zone: Weather ITV News Headlines King of the Hill 2.35am Comedy 11.55pm Cops in Crisis daughter more than her siblings will
Horizon: Asteroids – The Good, the 11.50pm The Planets 2.40am FILM Pieces of April: Lab: Jack Whitehall Secret Census 12.15am SuperCasino 3.55am receive.
Bad and the Ugly 3.30am Sign 12.40am Bowls Comedy drama, starring Katie 3.05am FILM Monkey Business Motorsport Mundial 4.20am The
Zone: Filthy Rotten Scoundrels 1.40am BBC News Holmes. 2003. 4am-5.30am 1952. 4.40am Brothers & Sisters Business Inspector 5.10am Wildlife
4.15am-6am BBC News 4.15am-6am Close ITV Nightscreen 5.25am-6.10am Countdown SOS 5.35am-6am House Doctor

SKY SPORTS 1 5am International Judo 10pm CSI: Crime Scene 10pm Wife Swap 11.05pm Tool DISCOVERY HOME &
SATELLITE & CABLE

World Circuit 5.30am-6am Investigation 11pm Criminal Academy 12.10am Scrubs

7pm Sky Sports News at Seven
7.30pm Live European Cup
Rugby Union 10pm Take It Like
a Fan 10.30pm Premier League
Preview 11pm Football League
Weekend 12am Take It Like a
Fan 12.25am Premier League
Preview 12.55am-6am Live
International One-Day Cricket
SKY SPORTS 2
12.25pm Live International
One-Day Cricket 8.30pm
International One-Day Cricket
10.30pm Cricket World Cup
11.30pm Tight Lines 12.30am
NFL: Total Access 1.30am
European Cup Rugby Union 4am
Premier League Preview 4.30am
Football League 5.30am-6am
Premier League Preview
SKY SPORTS 3
6pm European Tour Golf 8pm
Live PGA Tour Golf 11pm
European Tour Golf 1am PGA
Tour Golf 4am Tight Lines
Football’s Greatest
BRITISH EUROSPORT
5.45pm Live Rallying 7.45pm
Australian Open Tennis 10pm
Rallying 12am-6am Live
Australian Open Tennis
ESPN
7pm Goal! 7.30pm Live
Bundesliga 9.30pm Goal! Special
10pm Premier League Preview
10.30pm Snowboarding World
Cup 11pm Freestyle World Cup
Magazine 11.30pm European
Rallycross 12.45am Total Italian
Football 1.15am ESPN Kicks
1.30am FIS Alpine Ski World
Cup Report 2am Snowboarding
World Cup 2.30am Freestyle
World Cup Magazine 3am NBA
Action 3.30am-6am Live NBA
Basketball
LIVING
7pm Ghost Whisperer 8pm
Bones 9pm Criminal Minds
Minds 12am CSI: Crime Scene
Investigation 2.50am Charmed
4.30am Four Weddings
5.20am-6am Maury
BBC THREE
7pm Most Annoying People
2010 8pm Doctor Who 8.45pm
Doctor Who Confidential 9pm
Come Fly with Me 9.30pm Him
and Her 10pm EastEnders
10.30pm Sun, Sex and
Suspicious Parents 11.30pm
Family Guy 12.15am Coming of
Age 12.45am Snog, Marry,
Avoid? 1.15am Hotter Than My
Daughter 1.45am Most
Annoying People 2010 2.45am
Sun, Sex and Suspicious Parents
3.45am Coming of Age 4.15am
Snog, Marry, Avoid? 4.45am-
5.15am Hotter Than My
Daughter
E4
7pm Hollyoaks 7.30pm
Friends 9pm Supernanny USA
1.10am RuPaul’s Drag Race HEALTH
7pm A Baby Story 8pm 10
1.55am Supernanny USA
2.35am Wife Swap 3.30am The Years Younger 9pm Quints By
Loop 3.50am Life Unexpected Surprise 10pm Raising 10 Kids:
The Hayes Way 11pm Chopper
4.30am-6am Switched COMEDY ROCKS WITH JASON ....
Rescue 11.30pm A&E: Outback ITV1, 9.00PM
HISTORY 12am Quints By Surprise 1am
Jenny Eclair, Alistair McGowan and
7pm Heir Hunters 8pm Swamp Raising 10 Kids: The Hayes Way
People 9pm IRT Deadliest 2am Chopper Rescue 2.30am Russell Kane join Jason for a feast of
Roads 11pm The True Story A&E: Outback 3am 10 Years stand-up comedy, with music by Eliza
12am IRT Deadliest Roads 2am Younger 4am Bringing Home Doolittle and Olly Murs.
America’s Toughest Jobs 3am Baby 5am-6am A Baby Story
The Battle Against Rome 5am-
6am Deep Sea Detectives SKY1
8pm Futurama 9pm A League
DISCOVERY of Their Own: Unseen. Out-takes
8pm How Do They Do It? from the sports-based comedy
8.30pm How It’s Made 9pm quiz. 10pm Louie Spence’s
Aircrash Confidential 10pm Showbusiness. The
Wheeler Dealers 11pm Surviving choreographer returns to
the Cut 12am Bear Grylls: Born Pineapple Dance Studios. 11pm
Survivor 1am Deadliest Catch Got to Dance 1am Road Wars ICE ROAD TRUCKERS
2am Days That Shook the World 2.40am Ross Kemp in Search of CHANNEL 5, 8.00PM
3am Treasure Quest 3.50am Pirates 3.05am Oops TV 3.30am New series. Lisa Kelly hauls a tricky
Industrial Revelations 4.40am The 4400 4.20am Don’t Forget car-carrier for the first time, and
Building the Biggest 5.30am- the Lyrics 5.10am-6am Are You novice driver Ray Veileux faces a
6am How Does That Work? Smarter Than Your 10 Year Old? treacherous mountain pass.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
29 29 7 16 21 13 9 10  
8 35
18 
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 17 7 4
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 8 13
  
above or to the left of it. 10 9 41 3
You can only use the digits 1-9 11 5 8   
    and you must not use the
9 16 12
14 12    
same digit twice in a block. 34
  The same digit may occur 14 15 14 
17 13
 
  more than once in a row or
column, but it must be in a 9 22 6
11 12

10 20 6
   separate block.
5 15 
45
    15 24


   ACROSS DOWN
1 Any of various small 1 Beaks (5)
   
  WORDWHEEL T U
breeds of fowl (6)
6 Fleet of warships (6)
2 Large brownish
European flatfish (6)
Using only the letters in the Wordwheel, you have 8 Public toilet in a 3 Frenzied (5)
    ten minutes to find as many words as possible,
N L military area (7)
4 Singer married to
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters T 9 Earnings (6)
10 Windstorm that lifts
Sean Penn from
1985-89 (7)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
E S up clouds of dust (7) 5 Frolic, cavort (5)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
R I 13 Seventh letter of the
Greek alphabet (3)
7 Fame, acclaim (6)
11 Abatement (7)
QUICK CROSSWORD 9 32 6 1
8 14 Be victorious (3)
P U M I C E S A I D
9 8 6 7
1 9 7 SUDOKU          17 Item commonly eaten
12 Jailor (6)
R E A E O
7 3 2 1
3 5 2 1
         15 Glacial period (3,3)
8 2 1 8 9 2 on Shrove Tuesday (7)
I L U N C H T I M E
5 4
2 6 1 7 3
         16 Spin (5)
O D D C T I
         20 Large North
R U S S E T L I L T 1 8 3
         American deer (6) 18 Clothes drier (5)
G T R I
Y O G A S
C E
I S
I
T E R
6 4 8 9 2 7 5
9 8 3 9 6 8
WORDWHEEL         
21 Fabric made of silk (7) 19 Chris ___, former
U T P H U E         
7 9 5 8 2 4 1 3 The nine-letter word was husband of Billie
S T R E T C H E R C
3 1 5 4 8 2 5          22 Give up work (6)
O L E O U
REMAINDER Piper (5)
W A R Y D R A W E R 7 2 9 1 6 3         
23 Breed of monkey (6)
 Punter
CITYA.M. 21 JANUARY 2011 29

| Sports
...the home of form

SPORT TRADER BEN CLEMINSON AND BILL ESDAILE TEAM UP TO BRING YOU THIS
WEEKEND’S BEST FOOTBALL AND RACING BETS

Wolves have the fight

to tame Kenny’s Reds

Picture: GETTY
WOLVES

LIVERPOOL

TOMORROW – 12.45PM SKY SPORTS 2

KENNY Dalglish hasn’t made the dream
return to management that many
Liverpool fans would have hoped for, tak-
ing just one point from his opening three
games. It could have been even worse had
Dirk Kuyt not converted a second half
penalty against Everton on Sunday.
Liverpool travel to Wolves for tomorrow’s
lunchtime fixture and it will be a major
concern for Dalglish that his side have
taken just five points from a possible 33 on
the road this season.
Wolves are the only team to have a
worse away record than Liverpool in the
league this term with just one win and one
draw from their 11 contests. However, that
one victory came at Anfield just a few
weeks ago and Mick McCarthy will be keen
to replicate Blackpool’s recent achieve-
ment in doing the double over the Reds.
The Black Country side are in a
desperate relegation fight, but it is very
tight at the bottom and a win tomorrow
would lift them to within just two points
of Liverpool. They are a best priced 12/5 on
Betdaq and there are a few reasons why
that isn’t a bad price at all. Wolves have
scored in 10 of their 11 home matches so
far this campaign and have won three of
their last four, including a 1-0 victory
against Chelsea.
Mick McCarthy’s men almost nicked a with such a terrible away record. I’d much also advise spread bettors to sell goals at
point at Eastlands against Manchester City rather be a layer on Betdaq at that price, 2.5 with Sporting Index. There have been
last weekend, but they have won four of but I’ll be backing Wolves to claim a sixth two or fewer goals in all five meetings
their last nine home games against mid- win of the season at Molineux. between these sides since Wolves first
dle-third opposition, losing just the once. Wolves’ last three games across all com- entered the Premier League in 2003/04.
As we know, Liverpool have only won one petitions have produced a total of 16 goals,
on the road this season, but they have lost
their last five and have also won just one of
but their league fixtures are usually rela-
tively tight. They have won three of their
POINTERS...
their last nine trips to bottom-six sides. last six league contests, all 1-0, and a Wolves at 12/5 on Betdaq
Liverpool are as short as 5/4 with Paddy repeat of that scoreline looks decent value Wolves 1-0 at 8/1 with Paddy Power
Power and that is far too short for a team at 8/1 with Paddy Power. On that basis, I’d Sell total goals at 2.5 with Sporting Index

Mourad worth Big Buck’s in World Hurdle

W
ITH just under two months to go
until the start of the Cheltenham
Festival, the time is right to start
building our ante-post portfolio.
The purpose of any bet placed such a long
way in advance of the event itself is to take
a price about a horse that will supposedly
be a lot shorter on the day. All 27 races have
now been priced up by the bookies and the
one horse that screams out to me above all
others is MOURAD in the Ladbrokes World
Hurdle at the freely available 14/1.
Willie Mullins’ young staying hurdler
will certainly have his work cut out to pre-
vent the odds-on Big Buck’s landing the
hat-trick, but there are grounds to believe
he can go close.
Even though he was an impressive win-
ner on soft ground over three miles last
month, his trainer has reiterated that he is
far better suited to decent ground – a sur-
face he is likely to encounter on the penul-
timate day of the Festival. He has also
shown he handles the track (placed in a
Triumph Hurdle), stays the trip and pos-
sesses enough speed to unsettle the hot
favourite. He looks a rock solid each-way
bet at 14/1 and is also worth supporting at
6/1 with William Hill in their market with-
out Big Buck’s.
Looking ahead to tomorrow’s action and
all eyes will be on Master Minded as he
attempts to justify odds-on favouritism in
the Victor Chandler Chase at Ascot. He
should win comfortably, but he is not
totally invincible and I’ll be watching
rather than getting involved.
The same can also be said for Champion
Hurdle bound Peddlers Cross who seems to
have been found an even easier opportuni-
ty in Haydock’s Champion Hurdle Trial.
Donald McCain’s talented six-year old
should land the spoils without breaking
sweet.
The best bet on Haydock’s card looks to
be the Pat Murphy trained MAKTU in the
Peter Marsh Chase who we backed in the
Welsh National a fortnight ago. He ran a
really decent race that day, but was a little
too keen in the early stages. The nine-year-
old will appreciate the drop back to three
miles, loves bottomless ground and has a
massive 11lb pull in the weights with King
Fontaine for a head defeat over course and
distance back in November. Snap up the
6/1 available with Paddy Power.
Willie Mullins’ string always starts to
come to the boil at this time of year and
FLAT OUT holds solid claims in Sunday’s
Arkle Chase at Leopardstown. He was a
smart hurdler last season and looks to have
taken to fences really well. I’ll also be hav-
ing a few quid on the John Joseph Hanlon
trained HIDDEN CYCLONE as he steps up to
2 1/2 miles for the first time in the Grade
Two Hurdle on the same card. This is the
trip he has been crying out for and he is the
apple of his trainer’s eye.
It’s great news that City AM have become
the official newspaper of the Investec
Derby Festival. We’ll be looking at all the
key trials, giving ante-post selections, run-
ning a big preview on the Friday and of
course the Derby Special Edition, City
A.M.’s first ever Saturday newspaper.
 Sport
30 CITYA.M. 21 JANUARY 2011

Loan row threatens

West Ham Olympic bid
OPLC. However our proposal offers a strong the Olympic Stadium, as West Ham have
▲

OLYMPIC STADIUM
BY FRANK DALLERES
WEST HAM’S bid to move into the Olympic
Stadium was plunged into controversy last
night after questions were raised over a
£40m loan being arranged by Newham
Council.
The loan would be at a preferential rate
and would provide the cash-strapped club
with vital funds for redeveloping the
venue, if it is chosen ahead of rival bidders
Tottenham Hotspur next week.
Newham councillors last night voted in
favour of arranging the loan – but only
after criticism emerged over the trans-
parency of the terms and Mayor of
Newham Sir Robin Wales was
accused of being too close to
West Ham.
The episode threatens
to dent West Ham’s case
as both clubs prepare to
hand in final bid submis-
sions to the Olympic Park
Legacy Company (OPLC)
today. A decision is expect-
ed next Friday.
Newham Council was criti-
cised for not disclosing whether it
would be liable for the loan if West Ham,
who are already around £100m in debt and
stand to suffer hugely if relegated, default.
Confirming the vote result, council
chief executive Kim Bromley-Derry said:
“We are unable to comment on financial
aspects of the Newham Council and West
Ham bid for the Olympic Stadium because
of a confidentiality agreement with the
financial package with no further call on
the public purse.”
The mayor (inset left), who holds a sea-
son ticket at West Ham, declared 35 gifts
from the club over the last three years,
mainly of hospitality.
A spokesman for Newham Council said
the mayor had been transparent in his dec-
laration, paid for his season ticket himself
and did not vote last night because of a
potential conflict of interest.
Mike Law, a former Labour councillor in
Newham who defected to the
Conservatives, said: “Elected members tak-
ing gifts from local companies then lend-
ing them money is just wrong.”
The controversy came on a day of
fresh twists in the fierce battle to
move onto the Olympic site,
with Crystal Palace emerging
as a third-party threat to
Spurs’ proposals by revealing
stadium plans of their own.
Spurs’ proposals include
revamping the dilapidated
National Sports Centre at
Crystal Palace park, as a means of
delivering the required athletics
legacy that they will forego in Stratford
by demolishing and rebuilding the
Olympic Stadium without a running track.
But Championship outfit Palace also
want to redevelop the south London site
and build a new £50m, 40,000-seater
ground (pictured in box to right). The plans
include only a regional standard athletics
venue, meaning they rely on a world-class
track and field facility being retained at
pledged to do.
If Tottenham win, Palace are willing to
join forces with Spurs and build a dual-pur-
pose stadium at Crystal Palace. But Spurs
are understood to have little appetite for
exploring that avenue as their Olympic
ambitions enter a crucial seven days.
The head of world athletics, Lamine
Diack, last night waded into the row with a
strongly-worded statement saying Britain
would be guilty of “a big lie” if it went back
on its key promise to deliver a legacy at the
Olympic site.
West Ham’s plans have the backing of
the athletics world, while the club’s East
End roots allow it to argue it has a local
claim to the venue. Tottenham has a strong
economic case for winning the bid battle,
with greater demand for tickets and partic-
ipation in the lucrative Champions League,
as well as the backing of AEG, the enter-
tainment giant which runs the O2.
Crystal Palace have plans to return to
their original home which may impact
Spurs and West Ham Pictures: PA, Rex

Garcia-Lopez test SPORT | IN BRIEF

Davis Love named USA captain

next for Murray

GOLF: Davis Love III has been con-
firmed as the United States’ new Ryder
Cup captain. The 46-year-old will spear-
head the challenge to retain the trophy,
surrendered at Celtic Mannor last
September, next year in Chicago. He
said: “I am a players’ captain and I’m
now,” Murray said of the Spaniard. going to get them what they need to be
▲

TENNIS
BY TOM CLARKE
BRITISH No1 Andy Murray is preparing
Prior’s last game in England ODI colours came in 2008 Picture: GETTY for his first big test at this year’s
Australian Open, when he faces rising
“He’s getting seeded in the slams now.
He does everything well and he’s
improved his game on the hard court.
So it’s going to be a tough match.”
Should Murray defeat Garcia-Lopez
successful.”
Westwood to skip fifth major
GOLF: World No1 Lee Westwood has
confirmed he will not play in the Players

Returning Prior ready to answer star Guillermo Garcia-Lopez tomor-

row.
Murray set up the clash with a
he will face either 11th seed Jurgen
Melzer or Marcos Baghdatis, the
Cypriot who reached the final in
Championship in May – the
tournament known as ‘the fifth major’.
The Englishman said that the PGA Tour

England’s opening conundrum second comfortable win of the

tournament, against Ukrainian
Illya Marchenko. The Scot hard-
2006, and who yesterday beat 2009 US
Open champion Juan Martin Del
Potro 6-1, 6-3, 4-6, 6-3 to make it
event, which has a £1m winners’ prize,
did not fit in with his schedule for
2011.“I’ve said I will support the
ly broke sweat as he brushed into round three. European Tour, so I am going to Asia,”
for his country since 2008 but the 28- Marchenko aside 6-1, 6-3, 6- Elsewhere in the men’s said Westwood, who will play in the
▲

CRICKET
BY JAMES GOLDMAN
ENGLAND Ashes hero Matt Prior
believes with a weight of extra experi-
ence behind him he is now ready to
accept the challenge of opening the
batting at the upcoming World Cup.
The Sussex gloveman was chosen in
place of Steven Davies in Andy
Flower’s 15-man squad for the tourna-
ment which starts next month.
Prior, the regular Test wicketkeeper,
has not played limited overs cricket
year-old, who retained his position at
the top of the order in today’s third
ODI against Australia in Hobart,
believes he is now better equipped to
handle the demands of opening and
keeping wicket.
“I think my batting has come along
a huge amount,” he said. “I think I’m a
very different player to the guy that
opened in one-day cricket however
many years ago.
“Maybe I lacked experience then to
go on and make the big scores.”
3 in less than two hours. draw, there were straight set
Garcia-Lopez, seeded 32, wins for top seed Nadal, fifth
looks set to provide seed Robin Soderling and sev-
Murray with a tougher enth seed David Ferrer.
challenge having recently There was a shock in the
risen to prominence. women’s draw when seventh
The Spaniard claimed his seed Jelena Jankovic was
first two tour titles in the knocked out by China’s
past 18 months, and recorded Shuai Peng but Kim
an eye-catching victory over Clijsters and
world No1 Rafael Nadal in Vera Zvonareva
October’s Thailand Open. both won in
“He’s playing very well just straight sets.
inaugural Indonesian Masters in April.
Robinson denies Bath rumours
RUGBY UNION: Scotland head coach
Andy Robinson has played down sugges-
tions of him returning to Bath. Robinson,
a former Bath player and coach, is under
contract with the Scotish Rugby Union
until 2012. He said: “If there's an
announcement to be made it will be
made. Currently there's nothing to say.
I'm contracted to Scotland and that’s
what my focus is on.”
CITYA.M. 21 JANUARY 2011 31

Armitage given eight-week CIPRIANI: I HAD DEPRESSION

ban and will miss Six Nations

self and his club and failed to uphold the doping control officer and his rel-
▲

RUGBY UNION
BY JAMES GOLDMAN one of the core values of the game – atively good record.”
respect. Armitage, who lost his place in the
ENGLAND full-back Delon Armitage “Doping control officers should England side to Ben Foden last sea-
has been handed an eight-week ban expect to carry out their important son, will be available for the final
by the Rugby Football Union and is work without fear of abuse. match of the tournament
set to miss the entire Six Nations cam- “We took into account that it was against Ireland on 19
paign as a result. not a violent push but more of a March, but his lack of
The London Irish star was found to brush past and that was accepted by match practice is likely to
have pushed and used threatening the doping control officer. mean he is likely to miss
and / or abusive and obscene lan- “We took the offences as a whole out altogether as England
guage towards a doping control offi- and, in line with the sanctions for step up their preparations
cer by an RFU disciplinary hearing abuse of match officials, we ahead of the World Cup.
held in London yesterday evening. decided that a low end It is a fresh blow to
The 27-year-old (right) pleaded not entry point of 12 Johnson, who is
guilty to the offence, which took place weeks was appropri- already missing
following the last-minute defeat ate. Lewis Moody, Tom
against Bath on New Year’s Day, but “This was Croft, Courtney
was suspended until March 17. reduced to eight Lawes and Dave FORMER Wasps fly-half Danny Cipriani has revealed he underwent counselling in order
RFU disciplinary officer Judge Jeff weeks on Attwood for at to cure depression. The 23-year-old, who is embarking on a new challenge in Australia
Blackett, who chaired the panel, said: account of his least the first with Melbourne Rebels, said: “I suffered from depression but that was months ago and
“His behaviour was completely unac- remorse, his let- month of the Six everything is a lot more positive in my life now. Talking to a counsellor is nothing to be
ceptable. It brought discredit on him- ter of apology to Nations. ashamed of because it’s their job and they understand.” Picture: GETTY

Wasps will win but it might

not be enough to qualify
WEEKEND PREDICTIONS Lawrence Dallaglio, England great and Amlin rugby ambassador, casts his eye over
LAWRENCE this weekend’s European fixtures involving London clubs using the Amlin Opta Index.
To view the full Amlin Opta Index results ahead of this week’s action, head to the
DALLAGLIO news section on ercrugby.com

SARACENS V MUNSTER V HARLEQUINS V WASPS V TOULOUSE

CLERMONT AUVERGNE LONDON IRISH BAYONNE (SUNDAY, HEINEKEN CUP)
(TONIGHT, HEINEKEN CUP) (TOMO, HEINEKEN CUP) (TOMORROW, AMLIN Joe Worsley is the leading
Schalk Brits is Saracens’ Denis Leamy is Munster’s CHALLENGE CUP) defensive player in the
top rated player in the top rated player with Nick Easter was Quins’ competition. He’s accrued
Index and has carried for 1180 Amlin Opta Index leading ball carrier when 779 points in defence
192 metres, 72 more than points, having made 51 they lost 16-12 at having made a remarkable
any other front row for- carries and 42 tackles, Bayonne, with 11 carries 77 tackles, 20 more than
ward in the competition. both club highs. for 30 metres. any other player.

DALLAGLIO’S VERDICT: DALLAGLIO’S VERDICT: DALLAGLIO’S VERDICT: DALLAGLIO’S VERDICT:

Leinster are already This is the first time Harlequins are really on Last week’s disastrous
through from this pool Munster have failed to a roll at the moment, defeat in Glasgow has
but Clermont are after reach the knockout with seven wins in suc- left Wasps an uphill bat-
one of the best runners- stages in 13 years so cession, and are particu- tle to qualify. Toulouse
up slots and will give it they’ll be wounded and larly strong at home, will top the pool regard-
everything. Saracens seeing this as the start where they have taken less and Wasps must
are out and so can only of next year’s competi- some notable scalps. win and hope other
hope to keep up some tion. Irish did incredibly Another victory would results go their way.
form to carry into the to end their losing run ensure they go through Stranger things have
Premiership, but I against Ospreys last as winners of Pool 1, happened and I think
expect Clermont to pre- week, but I don’t see and I expect them to they will win, but it may
vail in this one. them winning here. get that win. not be enough.

Results
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email sport@cityam.com