BUSINESS WITH PERSONALITY

VIVA NADAL
NIALL FERGUSON ON THE SPANISH STAR
MAN WHO MADE THE CITY FOR THE SECOND
WINS WIMBLEDON

EXCLUSIVE INTERVIEW P18 TIME P27

Issue 1,169 Monday 5 July 2010 www.cityam.com FREE

LAW GIANTS HIT Results fall

short as
BY M&A DROUGHT
■ Linklaters’ revenues down ■ Allen & Overy’s revenues ■ Clifford Chance is set to
executive
pay surges

▲
CORPORATE GOVERNANCE
by 8.8 per cent contract by 4 per cent reveal a 5 per cent sales drop BY VICTORIA BATES
REMUNERATION committees at the
UK’s largest companies are demon-
strating a marked failure to adequate-
ly link executive pay with
performance, according to a damning
new survey to be published today.
While the median remuneration
for chief executives at FTSE 100 com-
panies has risen five per cent to £3.1m
in the past two years, earnings per
share have actually fallen one per
cent over the period, according to the
survey by reward consultancy MM&K
and proxy voting agency Manifest.
The report identified a shift from
longer-term incentives to annual
bonuses as the key driver of the
detachment between pay and per-
formance, which it said “mirrors the
approach that caused so many prob-
lems in the banking sector”.
Cliff Wright, director of MM&K,
criticised company pay schemes for
offering “little incentive for anything
above just ‘adequate’ performance”.
“The key determinants of a success-
ful incentive remuneration strategy
revolve around choosing the right
blend of short and long-term per-
formance criteria together with
rigour and toughness in the target
setting,” he added.
The managing partners: (l to r) Linklaters’ Simon Davies, Allen & Overy’s Wim Dejonghe and Clifford Chance’s David Childs The report comes ahead of what is
expected to be a stormy annual meet-
LEGAL Chance is expected to report a fall in down mainly because of the M&A ments from his peers that 2010 will ing for retailer Marks and Spencer
▲

BY EMMA SADOWSKI
THE UK’s largest law firms have suf-
fered a blow from a two-year M&A
drought that has forced them to look
beyond Britain’s shores for business.
Magic circle law firms Linklaters,
Allen & Overy and Clifford Chance
(have seen revenue streams hurt by
the fall off in takeover activity after
cross border deals declined by up to
76 per cent between 2007 and 2009.
Revenue at Linklaters fell by 8.8 per
cent to £1.18bn for the year ending 30
April, according to figures out today,
while rival A&O posted a four per cent
drop in revenue to £1.05bn.
City A.M. has learnt that Clifford
revenue of roughly five per cent later
this week when it reports yearly
financial results.
Clifford Chance will present this as
a highly respectable result, especially
since its profitability will be seen to
have increased after a tight clamp-
down on costs last year.
Linklaters managing partner
Simon Davies told City A.M. that the
fall in corporate and M&A work,
which accounts for 40 per cent of the
firm’s business, had impacted
turnover.
“These are a resilient set of results
in what has been a challenging envi-
ronment. The results were in line
with expectations. Revenues are
market,” said Davies.
Like his peers at Allen & Overy,
Davies is looking to the emerging
markets for a return in activity.
Up to 57 per cent of Linklaters’
business came from outside the UK
last year, while Allen & Overy said last
week that 60 per cent of its revenue is
derived from offices beyond its City
base.
“There are likely to be more deals
between the emerging markets, in
particular Brazil, India, China and
Russia. As a general matter, we expect
buoyant activity in [those] markets,”
said Davies.
But he remains sceptical about the
next 12 months and echoes senti-
continue to be an uphill struggle.
“I certainly think this is going to be
a challenging year for the legal sec-
tor,” said Davies.
Allen & Overy managing partner
Wim Dejonghe also said that 2010 is
unlikely to be an easy year for law
firms.
Meanwhile, profits at Linklaters
fell by 1.2 per cent to £507m.
Clifford Chance, which would not
comment on results, is expected to
post a 20 per cent rise in profits per
equity partner, while Allen & Overy
saw this number rise by 10 per cent
for the year.
Freshfield Bruckhaus Deringer is
also expected to report this week.
next week, at which new chief execu-
tive Marc Bolland’s pay is set to come
under fire from shareholders.
Bolland, the ex-Morrisons chief execu-
tive, could earn up to £15m in his first
year, of which £4.9m will be granted
regardless of company performance.
Today’s report singles out larger
companies for especial scrutiny, since
annual bonuses at bigger organisa-
tions can come in at up to 300 per
cent of directors’ salaries. By compari-
son, the chief executives of smaller
firms, with market capitalisations of
between £100m and £1bn, usually
have their bonuses capped at 100 per
cent of salary.
MARKS AND SPENCER: P5

aFTSE 100 ▲4,838.09 +32.34 DOW ▼9,868.48 -46.05 NASDAQ ▼2,091.79 -9.57 £/$ 1.52 unc £/¤ 1.21 unc ¤/$ ▲1.26 +0.01 Certified Distribution
3/05/10 - 30/05/10 is 106,097
 2 News
Austerity won’t cause a double-dip
EDITOR’S LETTER
ALLISTER HEATH
WHENEVER the stock market tanks
for an extended period of time – three
weeks and 10 per cent seem to be a
good rule of thumb – a strange mix of
panic and excitement invariably
breaks out in some quarters of the
City, aided and abbetted by the media.
Inboxes fill up with excited notes pre-
dicting a double-dip recession, with
anybody who dares to disagree dis-
missed as a perma-bull or worse.
I remember when all the talk in
2002-2003 was of a double-dip, which
never materialised; Morgan Stanley
even started handing out special “dou-
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WHAT THE OTHER PAPERS SAY THIS MORNING
UK GOVERNMENT BOND MARKET
STRONG, SAYS DMO
The UK government bond market has
been one of the best performing of
the year because the country is safely
outside the troubled eurozone and
has its own currency, according to
Robert Stheeman, chief executive of
the Debt Management Office. He
points out that gilts have been helped
by a weaker pound.
GERMAN INDUSTRIAL INPUT BOUNCES
BACK
German industrial companies are
frantically rehiring workers and
ramping up capacity as they
approach output levels last seen
before the 2008 collapse of Lehman
Brothers sent the global economy
into a tailspin. Orders for export-driv-
en Germany’s key sectors such as
machinery, cars and chemicals are
pouring in, say businesses.
ble-dip” candy at its briefings. The
good news is that the Cassandras are
almost certainly wrong this time also;
there will be no double dip – and no
new recession made in Downing
Street, contrary to what all those who
hate the coalition and its planned
spending cuts are claiming. We are in
for a lengthy period of sluggish
growth and a painful readjustment
after years of borrowing uncontrol-
lably – but then we knew that already.
Sentiment indicators have peaked
globally; the price of oil has slumped;
China’s growth may be slowing; the
US seems unable to create jobs and
the Eurozone remains a weak spot,
especially when it comes to its
deficits, its crippled banking system
and problems with the European
Central Bank’s provision of liquidity.
But there are also plenty of good
signs: world trade remains strong (for-
get about the Baltic Dry Index; all
other indicators are good); the UK
money supply is growing at a much
more solid rate; all parts of the private
E&Y to get its
first non-exec
FINANCIAL SERVICES
▲
BY MARION DAKERS
ERNST & YOUNG is to appoint non-
executive directors to its global advi-
sory board, becoming the first of the
big four auditors to announce its
plans to fall in with the new audit
code.
The firm will announce the names
of the four directors after the sum-
mer, and will go beyond the require-
ments of this year’s new code for
accounting companies.
It will be the first time an account-
ing firm has a similar board structure
to that governing the global compa-
nies it audits.
Jim Turley, Ernst & Young (E&Y)
chairman and chief executive, told
the Financial Times that the decision
was not related to the ongoing regu-
latory scrutiny over E&Y’s part in the
RUSSIA’S MTS IN TALKS TO BOOST
WEB CONTENT
Mobile TeleSystems, Russia’s largest
mobile operator, is in talks with
media companies including News
Corp’s Fox and Sony to acquire more
films and television programmes for
its online entertainment service,
executives familiar with the matter
say. MTS has already secured deals
with Walt Disney and NBC Universal.
BANK OF NEW YORK MELLON EYES
FRESH ACQUISITIONS
BNY Mellon, the US asset manage-
ment and custody group, is to contin-
ue with its acquisition drive, focusing
future dealmaking on Europe and
Asia. Bob Kelly, the bank’s chief execu-
tive, said it was gearing up for expan-
sion in South Korea and China, most
likely through organic growth or
joint ventures. He was speaking as
BNY Mellon completed a $2.3bn deal
to acquire the securities processing
business of Pittsburgh-based PNC,
bringing its assets to $21,000bn.
sector are expanding again; the finan-
cial markets trust the government;
and bond yields have collapsed.
Those who worry about a recession
usually point to the fact that we are
facing a coordinated, pan-European
fiscal tightening – and worry that this
will cut demand and hence activity
and jobs, triggering a vicious circle of
recession and deflation. Yet even
Keynes himself would have had no
truck with this argument. There is no
way that a budget deficit of £150bn a
year and a state sector worth half the
economy was something Keynes
would have ever encouraged. The
economy is growing again, which to a
real Keynesian ought to suggest that
the structural deficit should be cut
(and it is equally absurd to describe
the current situation as a liquidity
trap, whereby monetary policy
becomes useless and aggressive fiscal
policy supposedly becomes the only
answer, because the latest data shows
that quantitative easing and low rates
have had a large impact).
collapse of Lehman Brothers. He said
he did not know whether the move
would improve the firm’s standing
with regulators.
E&Y backed a report by the
Financial Services Authority last week
that criticised auditors for a lack of
scepticism leading up to the banking
crisis in 2008, and said it welcomed
further discussions about regulation
and supervision.
The firm’s existing global advisory
council functions in a similar way to
the board of a public company. E&Y
did not return calls for comment.
Ernst & Young boss
Jim Turley said the
firm welcomed more
talk about regulation
and supervision
IMF WANTS BANK LEVY TRIPLE THE
SIZE OF OSBORNE’S BAILOUT TAX
The International Monetary Fund is
pressing for Britain's banks to pay an
annual levy of up to £6bn, to protect
against the impact of future crises
and curb the more reckless behaviour
of the industry, far higher than
George Osborne's plan for a £2bn
bailout tax on the sector. The IMF said
the crisis had shown that the world's
banking sector was under-taxed.
PRIVATISE ROADS, SAYS RAC THINK-
TANK
England’s major roads should be pri-
vatised or placed in a trust, followed
by the introduction of a national pay-
as-you-drive scheme that would
reduce the £47bn tax bill for drivers,
according to the RAC Foundation, a
motoring think-tank. It urges the
government to consider selling off
the road network in a report today.
In any case – especially at present
levels of public spending – high
deficits discourage private spending
and therefore are not expansionary
but indeed contractionary. Already,
the promise of a sharp decline in the
deficit has had a positive impact: gilt
yields have collapsed, cutting the pub-
lic and private cost of borrowing. As
fewer gilts are issued, there will be
more funds available for private firms,
hence fuelling private growth.
As the US employment figures last
Friday revealed, the opposite approach
– continue spending and borrowing as
if there were no tomorrow – is hardly
the answer. Opponents of the coali-
tion’s plans never highlight the fail-
ure of Barack Obama’s stimulus plans
to kick-start the US economy. So I have
no doubt that – barring a total col-
lapse in the Eurozone – there will be
growth in the UK economy in the year
ahead. There won’t be much of it, and
it won’t feel like a recovery, but
growth it will be.
allister.heath@cityam.com
A ban on short-selling is an option, said EU markets commissioner
Barnier mulls tough rules
EUROPEAN ECONOMY
▲
BY MARION DAKERS
THE EU’S internal markets commis-
sioner strengthened his pledge to
crack down on financial derivates yes-
terday.
Michel Barnier said an outright
ban on naked short-selling is “an
option that we are studying with seri-
ousness”.
He told a conference in France he is
confident that EU governments can
find a compromise on the bloc’s new
ENGLAND FOOTBALL TEAM LOSES
NATIONWIDE SPONSORSHIP DEAL
The England football team is set to
suffer another painful loss as
Nationwide terminates its £20m spon-
sorship contract after 11 years. A
spokesman for the building society
said that the group was “pleased”
with the relationship that had
“helped raise its profile with cus-
tomers” but confirmed that the con-
tract was “unlikely to be renewed” at
the end of the month.
BIG FALL IN SHORT SELLING OF POUNDS
STERLING SINCE BUDGET DAY
Financial betting against the pound
has fallen significantly since the
emergency budget – with hedge funds
and speculators closing their posi-
tions that anticipated further falls in
the value of sterling. The number of
long positions increased slightly in
the week following the budget.
CITYA.M. 5 JULY 2010
NEWS | IN BRIEF
UK private equity still spending
UK private equity firms plan to invest
billions of pounds in the UK, but are not
prepared to pay above industry average,
according to the latest Grant Thornton
Private Equity Barometer. The findings,
from a poll of more than 100 private
equity executives, show more than 42
per cent expect to invest more than
£50m in the UK in the next 12 months,
with 20 per cent wanting to invest over
£100m. Almost half expect to invest
between £11m and £50m. The tally
shows plans to invest over £5m from
those firms alone.
Aim loses 15 members in June
The junior market lost 15 members last
month, with only Macau Property
Opportunities Fund promoted to the
official list. That is up from the eight
that left in May, according to law firm
June, Trowers & Hamlins and account-
ancy group UHY Hacker Young. A fur-
ther five Aim listings were cancelled in
the first two days of July, including
Invocas, Teleset, Inspired Gaming,
Platinum Australia and Timestrip. The
survey says 36 delisted in the second
quarter, down from 44 in the first.
Picture: REUTERS
regulatory framework, and that he
hopes EU supervisors for banks, insur-
ers and other securities markets will
be in place early next year.
“It will be very difficult to reach a
deal but not impossible. The talks will
go on over the summer,” he said.
Meanwhile, French economy min-
ister Christine Lagarde told the con-
ference the results of the first wave of
banking stress tests will be out on 23
July, predicting the tests would show
European banks to be “solid and
healthy”. MORE: P6
RELIANCE NATURAL MERGES WITH
RELIANCE POWER
Reliance Natural Resources said
Sunday it will merge with Reliance
Power in a share-swap deal the Indian
companies valued at $11bn, a move
that will make it easier for Reliance
Power to procure natural gas for its
power projects. Both Reliance Power
and Reliance Natural are part of the
Anil Dhirubhai Ambani group. One
equity share of Reliance Power will be
exchanged for every four equity
shares of Reliance Natural.
FRANCE TELECOM AIMS TO BOOST
MORALE
Four months into his job as chief
executive of telecoms giant France
Télécom, Stéphane Richard is set to
reveal the company's strategic vision
today, including its latest plans to
boost worker morale after a wave of
suicides in recent years.
CITYA.M. 5 JULY 2010 News 3

Minister discusses
George Osborne has
asked the cabinet
to prepare for cuts
of up to 40 per cent

strikes clampdown
Picture:
Micha Theiner
/City A.M.

declare a strike illegal unless it is sup-

▲
INDUSTRIAL RELATIONS
BY DAVID HELLIER
TRANSPORT Secretary Philip
Hammond was reported last night to
have held discussions with Mayor of
London Boris Johnson about ways the
coalition government may be able to
avert a winter of discontent.
The two men are said to have exam-
ined proposals drawn up by the
employers’ organisation the CBI to
ported by 40 per cent of the total
workforce.
The mayor has had experience of
dealing with striking unions, having
faced an RMT strike last year.
Unions such as the RMT and the
Public and Commercial Services
Union have threatened strike action
as a means of opposing the proposed
public spending cuts.
JOHNSON CABLE CAR PLAN: P9

Coalition says
40 per cent
cuts unlikely
He added: “I don’t expect that any
▲

POLITICS
BY DAVID CROW
THE government yesterday tried to
soothe fears over the biggest spend-
ing cuts in a generation, after the
chancellor asked departments to
draw up plans to slash their budgets
by a staggering 40 per cent.
George Osborne has asked the cabi-
net to prepare a package of cuts that
would be implemented if their
departmental budget were reduced
by 40 per cent, alongside a second
package designed for a 25 per cent
reduction.
Yesterday, Treasury officials insist-
ed the 40 per cent figure was a “top
end assumption” and that most
departments would have to imple-
ment less brutal cuts.
“This is not a significant shift from
what we said at the time of the
Budget. Our plans imply cuts of 25
per cent in unprotected departments.
Some will have to cut by more, others
by less,” an aide to Osborne said.
And Transport secretary Philip
Hammond said it was unlikely that
any Whitehall department would
actually see its budget reduced by 40
per cent.
departments will see cuts as high as
40 per cent but some departments
may see cuts higher than 25 per cent
and some departments may see cuts a
bit lower than 25 per cent.
The Labour party and the unions
seized on the 40 per cent figure as
proof the Tory-Liberal coalition was
about to wage an ideologically-driven
war on the public sector.
Ed Balls, the Labour leadership con-
tender, said: “These reports will send
a chill down the spines of millions of
public sector workers and millions of
people who rely on our vital public
services.”
And RMT general secretary Bob
Crow said: “With cuts of up to 40 per
cent in the transport budget we are
looking at thousands of job losses
amongst the staff who operate and
maintain services with dire conse-
quences for passenger safety.”
Spending on health will continue
to rise in real terms; the international
aid budget has been ring-fenced; and
education and defence will have to
reduce their budgets by between 10
and 20 per cent. That implies unpro-
tected departments will have to save
33 per cent on average.

Government targets civil service

redundancies to slash spending
▲

POLITICS so that severance payouts drop from

CIVIL service “golden goodbyes”
would be cut drastically in the gov-
ernment’s latest plan to axe spending.
In a move to reduce the cost of lay-
ing off hundreds of thousands of
state employees, new caps on redun-
dancy are set to be introduced within
weeks.
But last night the plan drew furi-
ous opposition from unions, who said
the government’s “disgraceful” tactic
would be fiercely resisted.
Francis Maude, the Cabinet Office
minister, wants to change Civil
Service Compensation Scheme rules
up to six years’s salary, to a figure
equivalent to a few month’s pay.
Ministers intend to act so any redun-
dancy after 15 September will be
under amended rules.
Only workers earning under
£21,000 would receive a guaranteed
minimum payment.
Last night Public and Commercial
Services (PCS) union spokesman
Richard Simcox told City A.M: “If the
government were to change the law
to do this that would be a disgraceful
move, simply because they didn’t get
the result they wanted when we have
twice been to court.”
CITYA.M. 5 JULY 2010 News 5

First quarter results will be mixed bag

FITTINGLY for a general retailer,
Marks and Spencer’s first quarter
results on Wednesday will be some-
thing of a mixed bag. Analysts are
expecting food sales to be up by
around 1.5 per cent, with sales of
clothes and general merchandise up
by 3.7 per cent. But it’s worth
remembering that the comparatives
are pretty forgiving: M&S had a disas-
trous start to 2009, with sales off 1.7
per cent.
Some of the improved perform-
ance is down to strategy: according
to Kantar, the market research
group, the turnaround in food is in
full swing. In the 12 week period to
14 June, food and drink sales were up
3.6 per cent on the previous three
months – the highest increase in two
years. And in clothing, the buyers
have started to get their act together,
instead of bringing in lots of stock
just as the season is starting to end.
That said, the bellwether has
invested heavily in marketing while
remaining competitive on price. It’s
inconceivable that this hasn’t taken
its toll; shareholders will want to
know that M&S can continue to gain
market share in food while bringing
marketing costs down.
Nor is the outlook particularly
rosy: the winds of austerity that are
set to sweep through the public sec-
tor will feel even chillier thanks to
the hike in VAT. And despite a succes-
sion plan that was meant to avert a
power vacuum when Sir Stuart Rose
stepped down, that is exactly what
has ended up happening: new chief
executive Marc Bolland is in train-
ing; Rose is eyeing the departure
lounge; and finance director Ian
Dyson is off, having failed to win the
top job. Shareholders hate uncertain-
ty: M&S offers bags of it.
BOTTOMLINE
Analysis by David Crow

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for investor
anger on pay
an amber-top alert, warning share-
▲

RETAIL
BY VICTORIA BATES
A STRONG set of first-quarter figures
from retail bellwether Marks and
Spencer this week looks set to be over-
shadowed by animosity at the firm’s
annual shareholder meeting, with
investors set to clash with executives
over the eternally thorny issue of pay.
Sir Stuart Rose will officially hand
over the chief executive’s reins to ex-
Morrisons man Marc Bolland at the
meeting on 14 July, though both men
will be challenged by shareholders on
their remuneration packages.
Rose, who will remain as chairman
until he leaves the firm next year, will
take a 25 per cent pay cut to £875,000
when he steps back into the non-exec-
utive role, though this figure is still
higher than any of his FTSE 100 peers.
M&S has also irked some sharehold-
ers with the remuneration package
handed to Bolland, who could earn
£15.1m in his first year on the job.
That figure includes compensation
for bonuses he would have received
had he stayed at Morrisons – a deci-
sion which provoked the ABI to issue
holders to exercise caution in voting.
Proxy voting group Manifest has
also signalled discontent with the pay
proposals, commenting in a report
on M&S that this year marks the fifth
successive year that the remunera-
tion committee had granted “excep-
tional awards” to directors. This
represented a “flagrant abuse” of
their discretion, Manifest added.
However, investor tempers are likely
to be soothed on Wednesday as M&S
reports solid like-for-like sales increas-
es. Analysts expect first-quarter food
sales growth of 1.5 per cent, and three
per cent in general merchandise.
ANALYSIS l Marks & Spencer
390 p
332.60
380 02 Jul
360
340
320
21 Apr 12 May 2 Jun 22 Jun

TIME LINE | RECENT SHAREHOLDER PAY REVOLTS

● 5 May
32 per cent of Xstrata’s investor base
gave a thumbs down to the mining giant’s
pay report, after chief executive Mick
Davis saw his total pay leap 41 per cent
to $7.75m despite a £4.2bn rights issue.
● 28 May
HSBC faced a small-scale mutiny at its
AGM when almost one in four sharehold-
ers failed to back the remuneration
report. Chief Michael Geoghegan’s
£800,000 London-Hong Kong relocation
package was a major sticking point.
● 2 July
Supermarket Tesco suffered the biggest
shareholder pay revolt of the year so far
when almost 40 per cent of investors
voted against its remuneration report.
● 14 July YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Retailer M&S is set for a stormy ride over Terms and conditions apply. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office: The Mound,
Edinburgh EH1 1YZ. Available to homemovers, first time buyers, remortgage customers and buy to let customers. Offer available by phone,
pay at its own annual meeting. online or in branch. We may monitor and record calls. Lines are open Monday-Friday 8am-8pm, Saturday 9am-4pm. Compliance number 10/04102
 6 News
RBS plans to take first steps
towards privatisation in 2011
▲
BANKING
BY HARRY BANKS
ROYAL Bank of Scotland aims to put
the conditions in place for the gov-
ernment to start selling its 83 per
cent stake in the bank next year, chief
executive Stephen Hester revealed at
the weekend.
Hester told German newspaper
Welt am Sonntag that the sale “will
not be conducted in one go”. But he
added: “I would be disappointed if
there would not be the first steps
towards privatisation next year.”
RBS is still nursing its wounds after
it was caught in the maelstrom of the
financial crisis, but it beat expecta-
tions with a return to profit in the
first three months of the year.
It is reversing a decade-long inter-
national expansion drive and has
raised over £1.6bn from exiting or
selling over 20 businesses in the last
14 months. The bank will leave all sec-
tors, such as global retail banking, in
which it cannot establish itself
among the market leaders.
It is also selling some of the parts of
Dutch bank ABN Amro it bought in
2007, as the takeover was “clearly a
big mistake,” Hester said.
Hester added that introducing
stricter rules for loans as a conse-
quence of the financial crisis is the
right thing to do despite the fact that
fewer firms get loans and that prices
for borrowers are rising. “That’s the
price for a stable economy,” he said.
France finance minister Christine Lagarde makes a date for stress tests
Stress tests
due 23 July
▲
EUROZONE ECONOMY
BY HARRY BANKS
FRENCH finance minister Christine
Lagarde confirmed yesterday that the
results of stress tests on European
banks will be published on 23 July, in
an attempt to boost confidence in the
sector’s ability to weather further eco-
nomic and regulatory shocks.
The scope of the tests has recently
been widened to cover around 100 of
Europe’s banks, four times the num-
ber which were originally marked out
for regulatory scrutiny.
“You will soon be seeing the num-
ber of banks that will be submitted to
the stress test, you will have better
understanding of the exact criteria
we apply and of how heavily we stress
the system, and then later, on July
23rd, the result of the stress test will
be issued,” Lagarde said on the side-
lines of a conference in Provence.
She also moved to calm fears that
Trichet insists austerity drives
will not dampen Euro growth
▲
EUROZONE ECONOMY
EUROPEAN Central Bank president
Jean-Claude Trichet yesterday moved
to quell concerns that Europe is fac-
ing another period of recession and
renewed his support for reforms and
deficit cuts to boost confidence.
“(For) growth, you must strengthen
confidence, and that means having
budgetary policies that are balanced
and sustainable,” Trichet said.
CITYA.M. 5 JULY 2010
Picture: GETTY
the sector would struggle to cope in
the face of tighter capital require-
ments, extra taxes and additional reg-
ulation, adding that “banks in
Europe are solid and healthy”.
Simulated tests carried out by ana-
lysts have shown that KBC, National
Bank of Greece, Commerzbank,
Credit Agricole and Dexia would fare
worse than their major rivals, but
without falling to danger levels.
However, while some analysts say
the tests should restore confidence in
the sector and lead to a recapitalisa-
tion of weaker banks, officials have
come under fire from others sceptical
about the initiative. Some argue that
the exact criteria of the sovereign
stress needs to be disclosed if the tests
are to convince the market.
One of the keenest concerns for the
market is the extent to which bank
balance sheets have been knocked by
stricken Greek, Spanish and
Portuguese sovereign bonds.
State austerity drives and deficit
cuts would not choke growth but
rather restore confidence, he added,
reiterating his opposition to Europe-
wide debt issuance to spur growth.
Trichet said he does not believe
Europe is facing another period of
recession, adding: “At the global level
it is clear we are experiencing a recov-
ery which is confirmed particularly
in the emerging world but also in the
industrialised world.”
CITYA.M. 5 JULY 2010 Markets News 7

O’NEILL ISSUES FISCAL SQUEEZE WARNING

Market strategists warn of
further FTSE pain to come
during the week and over 17 per cent of the moving averages used by mar-

▲
FINANCIAL MARKETS
BY VICTORIA BATES
MARKET experts at the weekend
issued dire warnings of a further
downward trend in the FTSE, which
was hammered last week on the back
of a slew of weak economic data and
continuing worries over fiscal tight-
ening and the eurozone debt crisis.
The FTSE 100 index closed on
Friday at 4,838 – a fall of 4.1 per cent
below its April high of 5,833.
Despite the sharp dive, many ana-
lysts believe the market will continue
to fall over the coming weeks, with
some predicting a loss of 500 points
or more before it bottoms out.
Sandy Jadeja, chief technical ana-
lyst at spread betting firm City Index,
said that technical indicators as well
as economic concerns were pointing
towards a further retrenchment. Two
ket participants – the 20-week and 50-
week averages used by intermediate
and long-term traders respectively –
are close to a crossover, signalling
weakness in the market.
“The last time this occurred in
January 2008, the index lost 38 per
cent of its value and we are in a simi-
lar position right now,” Jadeja said,
warning that investors need to be
“vigilant”.

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GOLDMAN Sachs chief economist Jim O’Neill has waded into the debate over the depth and
breadth of austerity measures being implemented across the globe, warning large nations
cutting back simultaneously could derail the recovery. “All G20 members tightening fiscal
policy at the same time as the UK’s tough stance would make it hard to deliver on improv- Celebrating the
ing growth for all, or possibly any,” O’Neill told a Sunday newspaper. Picture: GETTY

World Cup 2010

Fears grow of
dip: Deloitte
prospects for a double dip as compa-
▲

ECONOMY
BY VICTORIA BATES
CONFIDENCE among City finance
chiefs began to wane again over the
second quarter of the year as market
volatility, global fiscal tightening
measures and the sovereign debt cri-
sis weighed heavily on sentiment.
Chief financial officers now predict
around a 38 per cent chance of a
“double dip” recession on average, a
significant jump on the 33 per cent
average chance predicted in the first
quarter of the year, according to a
Deloitte survey published today.
Optimism among the CFOs sur-
veyed plunged to a 12-month low,
with the balance of respondents
reporting a more optimistic outlook
on their company’s finances this
quarter than last quarter falling from
40 per cent to just 24 per cent.
The findings come after the FTSE
100 experienced its worst week in two
months, plunging over 4 per cent in
the past five days.
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bleak picture of the economy, with
few appearing so bearish on the
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Ian Stewart, chief economist at
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around 20 per cent that the UK will
enter a double dip recession,” Stewart
said. “Monetary policy is very loose
and a big sterling devaluation is start-
ing to kick in, while outside of
Europe, the global economy is start-
ing to show signs of quite a strong
recovery. Policymakers are very aware
of the downside risks and if there
looks to be a serious renewal of the
recession on the cards, they are pre-
pared to lean very heavily against it.”
Peter Westaway, chief European
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CITYA.M. 5 JULY 2010 News 9

Boris plans cable car Thames BP in rush to

crossing before the Olympics sell off assets
753 DAYS TO GO
LONDON OLYMPICS

been named as possible buyers.

BY EMMA SADOWSKI
LONDONERS may be able to enjoy
panoramic views of the capital while
traversing the Thames at over 50
metres above ground level, if Boris
Johnson’s latest travel plans come to
fruition.
The Mayor of London yesterday
unveiled plans to build a privately-
funded cable car crossing between
Greenwich Peninsula and the Royal
Docks, carrying up to 2,500 passen-
gers per hour in each direction and
taking just five minutes to travel
between the O2 and ExCeL centres.
City Hall said that the cable car was
just one of a number of initiatives
being considered to increase the
number of river crossings east of
Tower Bridge. Subject to funding and
planning permission, the cable car
could be ready before the 2012
Olympics.
“A cable car spanning the majestic
Thames would not only provide a
BP IN CRISIS
BY EMMA SADOWSKI
A RAFT of Chinese and Middle
Eastern bidders are looking at taking
up a stake in BP as the oil major
attempts to find investors ahead of a
possible hostile takeover by a rival oil
company.
It is understood that a number of
sovereign wealth funds, including the
Kuwait Investment Office and oil
companies have expressed interest in
acquiring a small stake in BP, believed
to be between five and 10 per cent, at
a cost of up to £6bn.
The cable car between North Greenwich and the Royal Docks will take just five minutes Sources close to the matter said
that acquiring BP’s assets is on the
unique and pioneering addition to shaving valuable minutes from their agenda of a number of Chinese enti-
London’s skyline, but also offer a travelling time.” The Mayor said he ties as they meet with BP advisers this
serene and joyful journey across the aimed to finance the construction of week, while the move is thought to be
river,” Johnson said. “Passengers the scheme privately, adding that “a a security measure taken by the oil
would be able to drink in the truly number of organisations” had giant against a potential takeover
spectacular views of the Olympic Park already expressed an interest in the attempt.
and iconic London landmarks whilst project. Rivals such as Exxon Mobile have
Worries that the oil group could be
left vulnerable to a takeover comes as
BP has already seen its market cap fall
by more than 50 per cent to £60bn,
while analysts predict that the oil
spill costs are likely to rise to $60bn.
A spokesperson from BP would not
comment on the possibility of the
sale.
But the board is under pressure to
do a deal soon as it is thought that
once BP drills the relief well and stops
the leak a buyout attempt could be
made.
BP is weeks away from drilling the
well, putting the group’s efforts
ahead of schedule.
Shareholders also expect an over-
haul of top management once the
Macondo well is plugged, with both
chief executive Tony Hayward and
chairman Carl-Henric Svanberg likely
to exit from their respective posts.
Spill boss Bob Dudley has been
touted as a top candidate.

Chinese firm in exclusive

talks to acquire Tower 42
PROPERTY the majority shareholder in Canary
▲

BY MARION DAKERS Wharf.

THE SALE of London’s first skyscraper
came a step closer to completion yester-
day after it emerged that Chinese
Estates Group had entered exclusive
discussions to buy Tower 42.
The group, chaired by Hong Kong-
based billionaire Joseph Lau, is said to
have won a three-month auction with
a bid near the asking price of £300m.
Moorfield Group and Gerald
Ronson’s Heron were also in the run-
ning for the 600ft building, previously
known as the Nat West Tower.
The sale is likely to also include five
low-rise buildings surrounding the sky-
scraper, among them the Grade I listed
Gibson banking hall.
The deal is the latest in a string of
London property investments by for-
eign buyers. Last year the Chinese sov-
ereign wealth fund joined Qatar to
lead a large equity raising for Songbird,
Lau owns numerous properties in
Hong Kong and entered the Sunday
Times Rich List this year, with an esti-
mated wealth of £3.8bn.
Tower 42 would be the first large
property acquisition for Chinese
Estates, though Lau himself spent an
estimated £33m on a six-floor mansion
in Belgravia in December.
Owners BlackStone and Hermes Real
Estate put the skyscraper up for sale in
April.
The building has several tenants
whose leases are up for renewal in the
next two years, giving a new owner the
chance to raise rents in line with what
many predict will be rising market
prices.
Representatives from BlackRock,
Hermes and sale adviser Jones Lang
LaSalle refused to comment on the
news yesterday. Chinese Estates Group


was unavailable for comment.

NEWS | IN BRIEF
Blair’s £250k protection costs
Protection teams for former Prime
Minister Tony Blair cost the taxpayer
£250,000 in expenses. But Foreign
Secretary William Hague said he was
doing a good job as representative of the
middle east quartet and that politicians
should rise above past differences to
work together.
Virgin interested in Allied Irish
Richard Branson’s Virgin Money is said to
have made an informal approach for the
British branches of the beleaguered
Allied Irish Bank. Virgin Money could
acquire the bank’s 32 outlets as part of
its efforts to build a large branch net-
work within five years. AIB refused to
comment on any of its ongoing asset
sales, which are part of an attempt to
plug a €7.4bn (£4.9bn) shortfall in its
reserves. Virgin is reportedly not inter-
ested in the Northern Irish branches.
      
Airbus set to sell military planes
Airbus has held talks with 36 countries         
that are interested in buying the A400M   
military transport plane. Any sale would
give the firm the chance to pare its losses        
on the aircraft, which has been delayed
by three years and is so far €11bn
(£9.1bn) over budget. The UK signed up
to buy 25 planes for the RAF, but has
since reduced its order to 22. South
Africa halted its order for eight aircraft.
Vadera joining Temasek fund
Baroness Vadera is set to join
Singaporean sovereign wealth fund '/5$EULJKWHUFRPPXWH
'/5$EULJKWHUFRPP
PXXWH ZZZGOUFRXN
ZZZGOUFRXN
Temasek. Vadera, Gordon Brown’s closest
economic policy adviser, is reportedly
wanted for her financial and geopolitical
expertise. Temasek is restructuring parts
of its S$127bn (£60bn) investment port-
folio. Vadera has recently been advising
Dubai World and is an adviser to the
rotating G20 presidency.
 The Capitalist
10
CITY GOES
RURAL IN A
PASSION
FOR SPEED
CITY petrol-heads were out in force over
the weekend, among 175,000 visitors to
the Goodwood Festival of Speed at
Goodwood House outside Chichester.
Among the business visitors to the F1 rac-
ing event were Arnauld Bamberger of
Cartier, Audi’s Peter Duffy, BlackRock’s
James Charrington, and Alfa Romeo/Fiat
Group’s Richard Gadeselli. They turned
out to watch top drivers from Jenson
Button to Lewis Hamilton spin their
wheels around the 2.4-mile track right
under the noses of lucky guests in hospi-
tality areas sponsored by BlackRock,
Diageo, Cartier, Jaguar, BMW and Ferrari.
Rubbing shoulders with the City car fans
was a glamorous crowd present celebrat-
ing this year’s theme of “vivo veloce” (a
passion for speed), including director
George Lucas, model Yasmin Le Bon and
actor Orlando Bloom.
When their eyes weren’t glued to the
hours of tarmac action, guests had the
chance to wander through a display of six
decades of F1 cars to celebrate the
organisation’s 60th anniversary
and enjoyed the entertainments
of motorbike stunt-riders and
guitarists Jimmie Vaughan and
Jeff Beck. The weekend was
capped off by a stunning acro-
batics show by a set of Red
Arrow fighters.
CHEAPSIDE
For City workers who find
themselves wandering the
Square Mile on the weekend,
the area can be an eerie place,
bereft of its commuting
crowds and working day buzz.
The City is hoping to change
this and in anticipation of the
December opening of the One
New Change office and retail
development in Cheapside, 13
local employers includ-
ing real estate agents and
Transport for London
have signed an
Employment Charter for
CITYA.M. 5 JULY 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
Leading City
names
flocked south
to take in the
tarmac
alongside
actors and
models on
the weekend
the City of London. The agreement cen- A F1 sculpture at the price” and in at the top of the league of
tralises job listings and connects local busi- Festival of Speed over hateables comes Goldman Sachs, with the
nesses to Job Centres in an attempt to the weekend broadcaster citing its $3.3bn profits in the
recruit local people into the estimated face of impending fraud charges as a sore
1,500 new jobs that will come with the point. Meanwhile, Facebook swiped sixth
development. Deputy Mayor Richard position due to its attitude towards users’
Barnes said the combination of the charter information – “privacy, shmivacy”.
and the development will lead to a “reposi- • Victoria Bates is away
tioning of Cheapside as a seven-day desti-
nation (that) will create much-needed job
opportunities for local people in the BILL OF THE WEEK
City and the surrounding boroughs”. If
successful, the project could make
Cheapside’s echoing Sunday streets a
thing of the past.
MOST HATED
CNN Money has released its definitive
list of “Most hateable companies (not
named BP)”. Having assigned BP the
implicit honour of first place, the
American broadcaster otherwise
focuses mostly on the ongoing hang-
over of the financial crisis. In at eight
are the evil twins Fannie Mae and
Freddie Mac: “Money is pouring out
of these bottomless reservoirs of tax-
payer dollars at a rate few of us can
comprehend. Fannie Mae and THAT 4 July feeling clearly caught on in London last week as a gaggle of hun-
Freddie Mac have received $145bn of gry City boys went to town this week at the diner-style Blues Kitchen in
government capital in less than two Camden.
years (for their) reckless bets in hous- To start, they ploughed their way through piles of crispy onion rings and ribs
ing,” says CNN in explanation. The washed down with creamy passion fruit and peanut-butter chocolate milk-
insurance giant AIG takes fifth place shakes.
for similarly relying on the govern- For the main course, they gobbled up sizzling platters of 8oz steaks, burgers
ment’s tendency to favour “short- and jambalaya, with banana splits for pud – all in all, racking up an impressive
term financial stability at any £1,300.
CITYA.M. 5 JULY 2010
Ocado issues IPO prospectus
▲
RETAIL
BY STEVE DINNEEN
OCADO will this morning unveil the
prospectus for its ambitious initial
public offering, which it hopes will
value the firm at more than £1bn.
The online grocery delivery firm
will begin a two week roadshow
tomorrow as it seeks to convince
investors it is worth the monster sum
despite never turning a profit.
Ocado, which recently signed a 10-
year contract to deliver Waitrose food,
said it is hoping to raise £200m.
It expects existing shareholders to
cash in on shares worth roughly the
same, with the John Lewis Pension
Fund (JLPF) expected to sell almost all
of its 30 per cent stake.
Ocado’s managers are also hoping
to cash in on the flotation, with big
players, including chief executive Tim
Steiner, director and founder Jason
Gissing and chief financial officer
Andrew Bracey, set to share £30m if
they can double the firm’s share-price
after its flotation.
This will add to a paper windfall of
£180m to be split between the
founders – Steiner, Gissing and
Jonathan Faiman – on completion of
the float.
In the six months to May, Ocado
cut its operating loss by 63 per cent to
record a loss of £2.7m. Ebitda doubled
to £8m and gross sales rose 30 per
cent to £246m.
Sources close to Ocado denied
Chief executive Tim Steiner, director Neil Abrahams, co-founder Jason Gissing, and chief financial officer Andrew Bracey
reports that an HSBC analyst predict-
ed it would remain in the red until
2014, attributing it to a “misinterpre-
tation”. Other analysts expect the
firm to turn a modest profit next
year.
The money raised in the float will
be invested in a new state of the art
delivery depot to enable the firm to
keep up with customer demand. The
firm says no decisions have been
made on the location but hinted it
could be located in the north.
Ocado will be hoping the roadshow
drums up enough support from
investors to avoid a similar humilia-
tion to New Look, which was forced to
pull its £1.2bn IPO earlier this year
after failing to meet its minimum
price range.
Ocado declined to comment.
News 11
ISC rights issue
inquiry to focus
on demand side
FINANCIAL SERVICES
▲
THE INSTITUTIONAL Shareholders
Committee (ISC) has launched a con-
sultation for its formal inquiry into
rights issue fees, which it said would
be complementary to a similar inves-
tigation announced by the Office of
Fair Trading (OFT) last month.
The ISC’s inquiry, spearheaded by
Doug Ferrans, said its own inquiry
would focus on the demand for
investment banking services by listed
companies in which its members
invest. A demand-based approach
would avoid doubling up with the
OFT’s study, which will concentrate
on the supply of such services by the
investment banks, which have been
accused by some of operating a cartel-
like structure in order to set a higher
bar for rights issue fees.
The average fee demanded by
banks for running a rights issue has
risen to around 3.5 per cent from just
two per cent a decade ago, according
to research from the Association of
British Insurers.
Ferrans said the ISC will look close-
ly at the governance environment in
which companies decide to use the
services of the investment banks.
It aims to present initial conclu-
sions in the autumn and produce a
final report by the end of the year.
 12 News CITYA.M. 5 JULY 2010

Ukraine is set to receive a BUFFETT GIVES AWAY HIS BILLIONS

$15bn IMF stability grant

of natural gas. Final approval would accused of focusing instead on consol-
▲

ECONOMICS
BY HARRY BANKS
THE International Monetary Fund
(IMF) is set to grant Ukraine $14.9bn
(£12.3bn) to stabilise its ailing econo-
my.
The “preliminary co-operation
agreement” is good news for presi-
dent Viktor Yanukovich, but is only
offered on the basis his coalition gov-
ernment delivers upopular economic
reforms, such as increasing the price
not be given unless some of the crite-
ria are met before the IMF board
meets this month.
“The goal of the authorities’ eco-
nomic programme is to entrench fis-
cal and financial stability, advance
structural reforms, and put Ukraine
on a path of sustainable and balanced
growth,” said the IMF.
Yanukovich promised to reform
Ukraine’s economy, which shrank 15
per cent in 2009, but he has been
idating his political power, making
closer links with Russia and restrict-
ing democratic freedom.
The IMF has already put $11bn
towards keeping the stricken country
afloat last year, but aid was stopped
before the presidential election due
to lack of economic reform.
Resuming economic aid points to
newfound trust, especially as the
Ukraine’s debt is 40 per cent of its
gross domestic product.

US billionaire Warren Buffett has pledged to give away 99 per cent of his wealth –
around $1.93bn (£1.27bn) in shares of his company Berkshire Hathaway – to five charita-
ble groups, financial filings showed. In notifications to the US Securities and Exchange
Commission, Buffett showed the donations included $1.6bn to the Bill and Melinda Gates
Foundation and over 2m shares to the Susan Thompson Buffett Foundation.

BBC: keep top

wages secret
commercial rivals.
▲

MEDIA
BY DAVID CROW
MARK Thompson, the director gener-
al of the BBC, fired a warning shot to
the government and the BBC Trust
yesterday, insisting it would be “dam-
aging and destructive” to publish the
salaries of the corporation’s top stars.
He said he accepted the decision by
the BBC Trust to force the corpora-
tion to publish the names of its high-
est earners in salary bands, and said
that narrower bands would be pub-
lished in the future.
But in a bid to pre-empt further
attempts to make the BBC transpar-
ent, Thompson said he would refuse
to reveal the exact salaries of individ-
ual stars.
The director-general even claimed
that publishing the wages of its high-
est earners would push up the cost of
recruiting stars, because the BBC
actually pays its top talent less than
He said: “I continue to believe it
would be wrong and it would be dam-
aging and destructive to the BBC and
its ability to get the top stars to actual-
ly publish individual salaries.”
The BBC is set to come under
increasing pressure to publish the
salaries of stars like Newsnight host
Jeremy Paxman and Radio 1 DJ Chris
Moyles, after the coalition govern-
ment started publishing the names of
big earners on the public payroll
But the corporation believes it
should be excluded from the trans-
parency drive, because it competes
with commercial broadcasters.
Mark Thompson is
under pressure to
publish the salaries of
top stars amid calls for
transparency

Luxury motor company Aston

Martin considers a £1bn IPO
up between the Warwickshire-based
▲

AUTOMOTIVE
LUXURY carmaker Aston Martin is
considering a joint venture with
another manufacturer or an initial
public offering (IPO) to boost its
brand’s range and and technology.
Chairman David Richards said over
the weekend he thought the firm
would be valued at over £1bn for the
purposes of an IPO.
A second alternative would be a tie-
company and another carmaker, he
said.
The company is majority owned by
the Kuwaiti sovereign wealth fund
Investment Dar, which bought it for
£503m from Ford in 2007.
Richards said new investment was
not imperative, but was aimed at
long-term growth, increasing its
number of models from the current
tally of six, and new technology.
CITYA.M. 5 JULY 2010
E&Y demands
more support
for midcaps
▲
ECONOMY
BY ALAIN TOLHURST
MEDIUM-SIZED companies could be
major drivers of the UK economy but
some are being hampered by the
political and regulatory environ-
ment, according to a report pub-
lished today by Ernst & Young.
The report says many midcaps are
caught between focus on big business
and support for small businesses.
Research conducted by YouGov for
the report says UK-based midcaps are
still set to invest an estimated £109bn
in innovation by 2012.
YouGov spoke to 500 businesses last
month, and reported 81 per cent
expect to see profits and the business-
es believe this will in turn help to
boost the broader economy by driving
growth in their sector and create jobs.
Bob Forsyth, head of strategic
growth markets in the UK and
Ireland for Ernst and Young, said: “It
is clear that UK mid-sized businesses
are a hotbed of innovation and enter-
prise, and a driving force for econom-
ic growth.”
The company is backing midcaps’
demand for greater clarity and consis-
tency from government on regula-
tion and taxation to enable this
growth.
The report shows around a third of
the businesses polled for Growing
Britain into Recovery: Putting Midcaps on
the Map, believed the tax and regulato-
ry environment would not be sup-
portive in the coming years, and
there was a lack of understanding of
middle-sized companies.
Martin Jones, owner of a heating
maintenance firm and a regional
winner of the Ernst & Young entre-
preneur of the year award, says:
“We’re expected to compete with
large caps on the same level but with-
out the resources they have, and yet
we’re precluded from some of the
advantages given to small businesses.
We’re caught between two stools.”
Chiltern Railways’ marketing director Thomas Ableman
Case Study: Chiltern Railways
THOMAS Ableman, Chiltern Railways’
marketing director, is on the brink of a
historic project but feels his company
is being hindered by unnecessary regu-
lation. “We are embarking on the
largest railway project since before the
war that doesn’t require a penny of
taxpayers’ money. The new London to
Oxford line will mean it takes less than
an hour to get from Banbury to
London for the first time.”
But he said the regulation of rail fran-
chises, geared towards bigger compa-
nies, has hindered his group. He said:
“Our sector is a prime example of over-
regulation, and we have seen a move
to more prescriptive measures which
we would like to see reversed. We feel
we are close enough to our customers
to make decisions and make them
quickly but we are not able to do so.”
The company has still been able to be
innovative, being the first rail operator
to offer mobile tickets.
News 13
Birds Eye and
Findus in battle
for Unilever arm
PRIVATE EQUITY
▲
FISH finger maker Birds Eye Iglo is set
to go head to head with crispy pan-
cake makers Findus Group in the
final round of bidding for Unilever’s
Italian frozen food arm.
The Italian division was put on sale
earlier this year, and final bids are
due tomorrow.
The final competition is thought to
be between the two firms, owned
respectively by Permira and Lion
Capital, but bids are also expected
from BC Partners, Charterhouse
Capital Partners and PAI Partners.
Findus Italy is the last of Unilever’s
frozen food assets as it sold its Birds
Eye and Iglo divisions to Permira for
£1.5bn in 2006.
At the time, former chief executive
Patrick Cescau held back from shed-
ding the Italian business because he
wanted to integrate it into Unilever’s
Italian ice cream business, which
includes Cornetto, Viennetta and
Solero.
But since taking the helm in 2008,
current chief Paul Polman has moved
to sell off the business. He has been
keen to build Unilever’s portfolio and
focus on driving volume growth
rather than cost-cutting.
Goldman Sachs is conducting the
sales process.
 14 News CITYA.M. 5 JULY 2010

HOW MUCH TENSION IS THERE AMONGST BANK OF ENGLAND MPC

Rates to stay MEMBERS?
MICHAEL SAUNDERS | CITIGROUP
Interviews by Jessica Mead

on hold but “ Recent MPC comments hint at a vigorous debate, and some members appear to believe that a

”
broader range of factors is behind the pick-up in inflation. If inflation expectations continue to rise
then the MPC could feel obliged to hike rates to show they take the inflation target seriously.

tensions rise PHILIP SHAW | INVESTEC

“ Andrew Sentance's sentiment has not been echoed by at least some of his colleagues. After a
period of pre- and post-election silence, comments earlier this week from Paul Fisher, Adam
Posen and David Miles all expressed a degree of opposition towards a near-term tightening.

”
▲

UK ECONOMY the inflation outlook and the appro-

BY JESSICA MEAD priate setting for monetary policy.
Hayes added: “The more material
TENSIONS are growing within the disagreement is over the ability of SIMON HAYES | BARCLAYS CAPITAL

“
Bank of England’s Monetary Policy the economy to withstand monetary
Committee (MPC) but they are not tightening. From a credibility per-
yet sufficient to cause a hike in inter- spective, we believe that if inflation We see voting skewed towards unchanged policy, with only Spencer Dale likely to join Andrew

”
est rates from the current level of 0.5 stays close to three per cent for the
per cent, economists say. best part of two years, it becomes
Sentance in the outright hawkish camp in the near term. But by February, sufficient evidence will
The minutes of the June meeting very hard for the MPC to justify inac- have accumulated to convince a majority that tightening is not only appropriate but feasible.
showed that Andrew Sentance voted tion.”
for a 0.25 per cent rise while the The question is whether the ANALYSIS l CPI inflation Source: Barclays Capital
other seven opted to keep policy potential loss of credibility from 6 %
unchanged. keeping policy on hold is a risk worth CPI
Stubbornly high inflation has cre- taking given the recovery’s fragility.
5 Letter writing bounds
ated a real headache for monetary Most economists believe that rates
policymakers who are trying to keep should be kept on hold for now Target Forecast
price expectations anchored without despite the persistent overshoot. 4
derailing a fragile recovery. The MPC Citi’s Michael Saunders said: “With
meets again this week. intensive fiscal drag, external tremors 3
“The turnaround from harmony to and worries over credit availability,
discord on the MPC has been rapid,” the economy probably needs contin- 2
said Barclays Capital’s Simon ued stimulus.”
Hughes. He pointed out that the min- Capital Economics’ Vicky
utes of the May meeting contained Redwood agrees: “In fact, given the 1
no material hint of dissent but that fiscal squeeze now underway, the
there is now a substantial amount of MPC may yet have to give the econo-
disagreement across the MPC about my more support.” 05 06 07 08 09 10 11

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CITYA.M. 5 JULY 2010
Bank of England rates paralysis to continue
CITY COMMENT
STEVE SEDGWICK
A
S WE enter the first full trad-
ing week of the second half of
the year, the markets remain
in a foul mood. Bad news sug-
gesting that the economic recovery
has stalled invariably leads to daily
Cafe Rouge
owner to buy
Paramount
▲
LEISURE
BY STEVE DINNEEN
BLACKSTONE-BACKED restaurant
owner Tragus is eyeing a takeover bid
for industry rival Paramount
Restaurants.
The Cafe Rouge, Bella Italia and
Strada owner is in discussions over a
bid for Paramount that could value
the firm at £50m.
Paramount, which owns restaurant
chains including Cafe Uno and
Bertorelli, was taken over by its
lenders last year in a debt for equity
swap valued at £55m. It hired Christie
& Co to sell 37 of its outlets and take
soundings for a takeover of the entire
company.
Tragus is understood to have indi-
cated its interest last week.
Yuan could rank with dollar and euro
▲
FOREX
CHINA’S yuan could rank with the dol-
lar and euro as a pillar of the global
monetary system, Hong Kong’s former
monetary authority chief Joseph Yam
said.
Yam, now vice-president of the
China Society for Finance and
Banking, a think-tank under the
People’s Bank of China, said that the
sell offs while good news is ignored.
In fact, when we get yet another
Bank of England rate decision on
Thursday, leaving rates unchanged at
an accommodative record low, don’t
expect a cheer in the Square mile. It
will almost certainly be read as yet
another signal that growth has bro-
ken down.
But when will UK interest rates
become less predictable? The
Monetary Policy Committee won’t
raise the base rate from its current 0.5
per cent level until the second quar-
ter of 2011, according to a poll of
economists by Reuters last week. But
is the MPC any clearer about the UK
economic outlook than the rest of us?
A spokesman declined to comment
yesterday but a source close to the
company told City A.M.: “There is no
done deal but Tragus is in discussions
with Paramount over the assets.”
Blackstone, which owns a num-
ber of entertainment and leisure
interests including Centre Parcs,
acquired Tragus for £267m in 2006
after backing a management buy-
out.
Previous owner Legal & General
Ventures had bought the group for
just £90m the year before.
The firm has continued to grow,
and now boasts more than 280 sites
across the UK.
However, it is expected to face stiff
competition for Paramount, with Ivy
owner Richard Caring also under-
stoon to be in the running.
international monetary system need-
ed a “third leg,” and the yuan, also
known as the renminbi, was the only
candidate among national currencies.
The two existing legs, the dollar and
euro, did not command the level of
international confidence needed to
sustain their status, leaving the system
structurally unstable, he said.
“If the third leg falls in the form of a
sovereign currency, it must be the ren-
The answer, of course, depends on
which member you ask. Andrew
Sentance believes rates need to go up
now to combat the worrying infla-
tionary trends developing in the
economy, this despite May’s fall in
the consumer price inflation meas-
ure to 3.4 per cent from it’s April 17-
month high.
Others are more willing to point to
one -off factors in the stubbornly high
inflation rate. And, as Monument’s
Stephen Lewis points out, another
MPC member, Dr Adam Posen, con-
cluded that there were special factors
at work in pushing UK prices higher.
Lewis added that Posen gave the
impression that: “He still saw down-
HOW THE MERGED GROUPS WOULD LOOK
85
117 Units
11
32
Paramount
Restaurants 4
11 9 egy led by the JGG management team,
minbi,” he said.
Yam said recent moves by the PBOC,
China’s central bank, to make the cur-
rency more flexible showed it was
pushing forward with gradual inter-
nationalisation of the currency.
But there were five criteria to meet
before it could serve as a third leg: size,
economic strength, convertibility, a
yuan-denominated market and a mod-
ern settlement system.
side inflation risk in the fiscal auster-
ity in the UK…but, if that risk were
not to crystallise, he would be ‘only to
happy’ to raise interest rates.”
Analysts at Jefferies point to the
rises in VAT (not the one pencilled in
by George Osborne but the one where
Alistair Darling took it back up to 17.5
per cent from 15 per cent as of
December 2009) as a major factor in
the upside pressure on inflation.
“In the ONS’s core measure UK
inflation has been running at three
per cent. Exclude VAT and energy and
the figure is close to one per cent, a
significant difference.”
In fact, if you add in the Osborne
VAT rise to 20 per cent in January
4
Tragus
4
7
Others
65
7
Others
Standard reports loss of £28.3m
▲
MEDIA
BY STEVE DINNEEN
THE firm created by billionaire busi-
nessman Alexander Lebedev to
acquire the Evening Standard racked
up losses of £28.3m in its first 10
months.
The losses include £9.9m in one-off
fees relating to the restructuring of
the business from a paid-for to a free
newspaper. The paper also needs to
News 15
next year, another 1.5 per cent will be
added to CPI, says Jefferies, which
means Mervyn King will be writing
more letters to the Chancellor
explaining why this is no cause to
panic.
Going into this week’s MPC meet-
ing, its members appear as uncertain
as the rest of us as to whether infla-
tion or deflation is the greater risk.
Isn’t it time the great and the good of
the BoE made up their minds? Until
they show us some conviction, what
hope for investors and a resumption
of market confidence?
Steve Sedgwick is a presenter on Squawk
Box Europe each weekday morning on
CNBC. http://europe.cnbc.com
NEWS | IN BRIEF
Nokia aims to regain top spot
Nokia is committed to get back the top-
position in smartphones and plans to use
no other software than Symbian and
Linux MeeGo, head of its mobile solu-
tions unit has said. "It's my aim to
ensure Nokia stays as the market and
intellectual leader in creating the digital
world," Anssi Vanjoki wrote in a blog on
Nokia's website. The world's top cell-
phone maker warned in mid-June sec-
ond-quarter sales and profits that its
key phones unit would be weaker than
expected as it struggles to compete
against Apple's iPhone. Nokia also said
2010 profit margin at the phone busi-
ness would be weaker.
James Grant acquires Addis
Gresham Private Equity yesterday
announced OJK, part of Gresham
backed James Grant Group (JGG), has
acquired Addis, a Stockport based
accountancy practice. Terms of the deal
have not been disclosed. OJK provides
accountancy, tax and consultancy serv-
ices to clients within the music, enter-
tainment and sports sectors. Clients
include Bryan Adams, Davina McCall
and Sir Bob Geldof. Addis clients include
Muse, Manic Street Preachers, The
Script, New Order and Elbow. This
acquisition is the third in a growth strat-
in partnership with Gresham, since the
creation of JGG in August last year.
JGM has also acquired the business and
assets of First Artist Management.
pay back £8.3m of debts this year,
according to results filed at
Companies House. The 182-year-old
title dropped its 50p cover charge and
increased daily circulation to 600,000
last October.
Lebedev bought the title from the
Daily Mail and General Trust. The
Evening Standard was unavailable for
comment. Last week the group said
the paper broke even in a week for
the first time since the acquisition.
 16 News CITYA.M. 5 JULY 2010

Advent in £800m bid

HEALTH restructured its debt nine months holder unrest – he was involved with

▲
BY STEVE DINNEEN
ADVENT International has launched
an £800m bid for struggling care-
home operator Four Seasons
Healthcare.
The move comes after weeks of
speculation surrounding the firm,
which was forced to beg bondholders
to extend the maturity of a £600m
loan for an extra two years to avoid
defaulting on its debt.
The firm, which provides respite
Hugh Osmond is understood to have had a £550m bid rejected Picture: PA care for the elderly and infirm, only
ago in a deal that reduced the
amount it owed from £1.5bn to
£780bn in a debt for equity swap.
It was due to repay bondholders in
two months time but is now seeking
to extend the loan until September
2012.
Also eyeing the firm is pizza tycoon
Hugh Osmond, who is understood to
have had a £550m bid knocked back.
Sources close to the firm say it was
holding out for a bid closer to the
magnitude of the Advent offer.
Osmond is no stranger to bond-
the newly renamed Phoenix
Holdings, which saw bondholders
revolt over an unpaid coupon.
Advent, Four Seasons and Hugh
Osmond were all unavailable for com-
ment.
Meanwhile, industry rival
Healthcare at Home is understood to
be planning a £500m float next year.
If the float goes ahead, chairman
and founder Charles Walsh and chief
executive Mike Gordon, who own a
majority stake, stand to make a paper
fortune.

BEST OF THE BROKERS

ANALYSIS l Amlin ANALYSIS l Aegon ANALYSIS l Nestle 50.35
Equitable Life appoints
410 p

400
392.40
02 Jul
6 €

5.5
4.28
02 Jul 54
53.50
CHF 02 Jul
BlackRock to manage risk
390 52.50
4.5

INSURANCE Equitable Life closed its doors to

280
3.5
370
360 2.5
12 Mar 30 Apr 2 Jun 1 Jul 12 Mar 30 Apr 2 Jun 1 Jul
AMLIN AEGON
Shares in blue-chip London market insurer JP Morgan Cazenove upgrades Aegon to
Amlin have been treading water of late, “neutral” and said the main positive is that
according to Citigroup, which said while CEO Alex Wynaendts continues to take the
this represents a strong performance rela- decisions needed to more attractively repo-
tive to the broader market, it fails to cap- sition Aegon in the long run. While Aegon
ture the group’s strategic progress and had more to do than most in this respect,
continued value creation. Citi upgrades its JP Morgan said that it likes the aggressive
rating of Amlin to “buy” from “hold”. portfolio management of the company.
To appear in Best of the Brokers email your research to notes@cityam.com
▲
51.50
BY STEVE DINNEEN
50.5
LIFE insurer Equitable Life said yester-
0
day it has appointed US investment
12 Mar 30 Apr 2 Jun 1 Jul house BlackRock to provide invest-
ment and risk management services
NESTLE for its 400,000 policyholders.
Morgan Stanley downgrades Nestle to Customer-owned Equitable Life
said BlackRock’s objective would be
“equal weight” and said it thinks further to maximise returns on £5.7bn of
earnings upgrades are unlikely and consen- assets while satisfying Equitable
sus now reflects many of the positive Life’s regulatory solvency ratios.
attributes investors have come to rely on. Chris Wiscarson, Equitable Life’s
Nestle remains the ‘gold standard’ in terms chief executive said: “Maximising
returns on policyholder investments
of operating performance and Morgan is one of the Society’s three key
Stanley recommends holding the shares. strategic priorities.
“Today, we have taken another
important step forward by appoint-
ing BlackRock.”
new customers nine years ago after
the cost of paying guaranteed bonus-
es left it short of cash.
The Labour government was
slammed over its role in the crisis,
which culminated in it losing a High
Court basttle for compensation with
the Equitable Members Action
Group. The 21,000-strong army of
investors blamed the government
after they lost savings during the cri-
sis.
Equitable Life chief
executive Chris
Wiscarson says the
appointment will max-
imise investor returns

NEWS | IN BRIEF
Apple admits software error
Apple has come clean about an embar-
rassing software glitch that overstates
network signal strength in its hot-sell-
Managed Print Services ing iPhone, as complaints mounted
about the phone's wraparound anten-
na. It admitted its signal strength mis-
calculation dates back to its original
2007 iPhone. It promised to fix the
glitch in a few weeks, but did not
directly address concerns that its
antenna design causes reception prob-
lems for iPhone 4, its newest phone.
Apple’s apology – a rarity from the
company known for its marketing
savvy – marked the third time in less
than three weeks it had to apologise.
Roma faces UniCredit ownership Stroeer plans July IPO
Roma football club could find itself
under the ownership of UniCredit as
its majority stakeholder faces the
prospect of bankruptcy. Rosella
Sensi, whose family bought the stake
in Roma in 1993, could lose her
Italpetroli oil firm after running up
debts of €400m (£330m). If the
firm, which is 49 per cent owned by
UniCredit, falls into the hands of the
bank, her share in Roma is likely to
follow. The club is now valued at
around €110m – roughly half of its
value prior to the financial crisis. The
club finished second in the Italian
league last season.
German advertising group Stroeer is
aiming to list on the stock market on
July 15 in what would be the coun-
try's first IPO since Greece's debt cri-
sis spooked financial markets.
Stroeer on Friday said it planned to
sell around €275m (£227m) worth of
shares from a capital increase and
would use the proceeds to finance
strategic acquisitions and new prod-
ucts. The total amount sold could be
as much as €412m, including a
greenshoe option and shares from
co-owner Cerberus, making it
Germany's third-biggest initial public
offering this year.

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

Jones Lang LaSalle

Grant Thornton
The business advisory firm has appointed
Craig Kemsley as tax partner and head of its
London private client department.
Kemsley has over 20 years of experience
advising private and entrepreneur clients for
Deloitte in the UK and Australia.
While working at the firm, he particularly
focused on developing tax-efficient struc-
tures to maximise current cash flows and
take advantage of wealth realisation events.
The real estate financial services
group has hired three new members
to its pan-European corporate
finance team. Alistair McGill joins
the private equity team as an invest-
ment manager from Prescient Real
Estate. Girish Grover has joined as a
senior M&A analyst from Cushman
and Wakefield, while Nick Porter
joins as an analyst in the M&A and
equity raising teams.

Amundi Placement du Québec, as a member DC Advisory Partners

Create. Print. Deliver. The asset manager has appointed
Philippe Ithurbide as head of global
research, strategy and analysis.
Visit www.color.co.uk Since 2006, Ithurbide has
worked at the Caisse de Dépôt et
0800 93 94 93 To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
of the board and asset allocation
committee. Prior to that, he worked
for Societe Generale as head of
research in currency and fixed
income.
The corporate finance adviser has
hired Kiwon Han as an MD in its
Japan Asia focus group.
Han joins from Daiwa Capital
Markets Europe in London.
CITYA.M. 5 JULY 2010 News 17

Like football, financial services is truly global

However we cannot ignore the fact
that our rapidly developing counter-
parts are becoming more important
on the global stage and challenging
Europe’s competitiveness.
That is why I welcomed the recent
comments from Foreign Secretary
William Hague calling for the UK to
CITY COMMENT build stronger, more proactive links
in the European Union when it comes
NICK ANSTEE to the policy-making agenda.
In this light, I am travelling to
on the UK financial services industry,
which is particularly important at
present given the EU’s recent
announcement on banking pay.
These new rules – combined with
the Alternative Investment Funds
Managers directive – could potential-
ly have a great impact on hedge funds
and asset managers despite their lim-
ited role in the global financial crisis.
After all, London is home to 80 per
cent of the EU’s hedge fund industry.
G20 markets that the City is directly
competing with.
Outside the EU it is important – as
the Foreign Secretary noted – that we
build closer ties with increasingly
important economic powers such as
China, India, Brazil and Russia. We
must also not ignore lesser-men-
tioned, but important, markets for
future growth such as Mexico.
In October this year I will visiting
key industry figures in Mexico City,
Mexico is already the UK’s second
biggest trading nation in Latin
America after Brazil, with our bilater-
al relationship worth over £2bn a
year. And the Mexican economy – like
the country's football team – is on an
upward curve, with some analysts
suggesting that it will rise from its
current standing as the 11th largest
in the world to 5th largest by 2040.
This World Cup has shown that
some of the most talented players are

T
HE ENGLISH team may be out of
the 2010 World Cup in South
Africa, but there is no question
that, when it comes to finance,
we are in the premier league.
Brussels this week to meet Michel
Barnier, the EU’s Internal Markets
Commissioner.
We will discuss changes to the reg-
ulatory landscape and their impact
That is why it is imperative that leg-
islators remember we operate in a
global marketplace, and that any
changes to our regulatory structure
need to be coordinated with other
while this week Mansion House is
hosting a conference designed to
build ties with senior representatives
from the Mexican government and
business community.
from far flung corners of the globe,
and a similar story holds true in
today’s financial services industry.
Nick Anstee is Lord Mayor of the City of
London

NEWS | IN BRIEF
Twilight eclipses movie rivals
The latest "Twilight" movie sailed past the
$100m ( £65.8m) mark during its third day
at the North American box office, and was
forecast to approach a record-breaking
$200m by the end of the US Independence
Day holiday weekend, according to weekend
estimates say. “The Twilight Saga: The
Eclipse,” knocked “Toy Story 3” from the top
spot as fans lapped up the vampire romance.
Obama gives $2bn for solar energy
US president Barack Obama, under pressure
to spur job growth, said two solar energy
companies will get nearly $2bn (£1.3bn) in
US loan guarantees to create as many as
5,000 green jobs. The US Energy
Department offering includes $1.45bn in loan
guarantees to Abengoa Solar to help it build
Solona, one of the largest solar generation
plants in the world near Gila Bend, Arizona.

Ontex’s chief executive Michael Teacher could see the company sold to private equity for £990m

Goldman and TPG

close in on Ontex
PRIVATE EQUITY Candover purchased Ontex, now of the company backed out of a
▲

BY ALAIN TOLHURST
GOLDMAN Sach’s private equity
wing is close to completing the
purchase of nappy-manufacturer
Ontex in partnership with
American buy-out house TPG for
more than €1.2bn (£990m), reports
the Sunday Telegraph.
The deal to purchase Ontex from
Candover nearly collapsed when
Goldman Sach’s original equity
partner pulled out, but the late
addition of TPG has kept the deal
alive, and the belief is the deal
could be completed as soon as this
week.
Europe’s largest manufacturer of
unbranded nappies, for €1bn seven
years ago, and the company, which
supplies some of Europe’s biggest
retailers including Tesco’s, is set to
make earnings of €150m on €1.2bn
sales.
The company, which also make
sanitary towels and wet wipes, has
predicted 10 per cent growth this
year, mainly due to an increase of
purchasers moving down to
unbranded nappies in the econom-
ic downturn.
But its private equity owners have
been reviewing the sale of its 14
portfolio assets since the listed arm
pledge to put €1bn into a €3bn
fundraising last year.
Candover sold energy consultancy
firm Wood Mackenzie for £553m
last year but has lost its investment
in yacht company Ferretti and
food-testing business Alcontrol,
and most recently was forced out
of Gala Coral when mezzanine
debt holders took over the bingo
and bookmaking firm.
Candover is looking for a windfall
from the Ontex sale to help stave
off the advances of Alberta
Investment Management
Corporation which has launched a
takeover bid.

MAREK became group managing director a
GUMIENNY year later, a position he held until
last year when he moved into the
CHAIRMAN AT chairman’s seat.
He joined the private equity firm
CANDOVER after qualifying to be a chartered
accountant with Pricewaterhouse
Coopers, but left, telling the
Independent back in 2003 he got
Marek Gumienny, the Candover chair- bored of just giving advice to peo-
man, was born in England to Polish ple and not being able to back his
parents, and studied Maths at own judgement.
Warwick University. He has had plenty of chances to use
He joined Candover in 1987 and his judgement as the chief deal-
maker at the firm and he has been
involved in the takeovers of
Swissport, Vetco International and
Ferretti, but he told the group’s
AGM last year its strategy going
into the downturn was “inappropri-
ate”.
He describes his judgement in bro-
kering deals as being based on his
Maths background but influenced
also by his penchant for gambling, a
trait that clearly underlines his will-
ingness to back his own decisions
at the negotiating table.
 18 News
Warburg, maker of the modern City
TV historian Niall
Ferguson’s new book
is a biography of a
banker who didn’t
care about money
W
ITH a tan topped up over the
weekend by a stay on a Greek
island and his TV don’s hair –
which looks like a tame version
of Melvyn Bragg’s – a crisp white shirt,
relaxed manner and a gentle Scottish
accent, Niall Ferguson is without doubt a
smoothy-chops. He’s also one of the best-
known historians in Britain and his inter-
est in economic matters means that he is
deeply engaged with the current financial
crisis. Somehow, between lecturing on the
Greek crisis, writing informed newspaper
articles and teaching on the Harvard MBA
course, he has found time to write a new
book, High Financier, a superb biography
of Siegmund Warburg, the founder of
investment bank SG Warburg, and the
man who made the modern City.
So why Warburg? And why now? “What
attracted me to him was that he was a
banker motivated by something other
than the pure bottom line,” Ferguson says,
sipping a ginger beer. The idea for the
book began 12 years ago, just after
Ferguson’s book about the Rothschilds was
published. “Warburg’s people came to me
and asked me if I’d thought of doing a life
of Siegmund. I took a look at the 1933/34
diary and it was electrifying.” He wanted to
work on it but the timing wasn’t quite
right. “Then the financial crisis happened
and I thought: ‘This is about the lost world
of bankers with morals. Now’s the time.’”
Indeed, when asked what were the char-
acteristics of a good banker, Warburg put
“moral standing” top of the list. Banking
was “a calling” for him, says Ferguson,
who describes him as a “monk”, a “puri-
tan” and an “artist banker”. This is a man
who would turn down potential clients if
he didn’t approve of their behaviour, how-
ever wealthy, and he was worth just £2m
when he died. “He didn’t really care about
money,” says Ferguson, “which is unusual
for a banker.”
Born in 1902, Warburg was the highly
educated scion of a Jewish banking
dynasty who entered the family business,
despite interests that might have led him
into the arts or academia. His experiences
in Weimar Germany – where he was
already involved in politics – formed his
outlook, and he left in 1934 as the rise of
the Nazis made life untenable. In many
ways, Warburg created the City as we know
it. In an era when banks were more like
CV | NIALL FERGUSON
Born: 1964, in Glasgow
Life: Married to Susan Douglas, a journal-
ist, although they have now separated.
They have three children together.
Positions: Laurence A Tisch Professor of
History at Harvard University and William
Ziegler Professor at Harvard Business
School. He is also senior research fellow at
Jesus College, Oxford, where he taught for
10 years.
Books: The Ascent of Money (also made
into a television programme); The World’s
Banker: The History of the House of
Rothschild; Empire: The Rise and Demise
of the British World Order and the
Lessons for Global Power. He is working
on a biography of Henry Kissinger.
gentlemen’s clubs and bankers wandered
into the office at 10 before taking long
lunches, Warburg employees were in at
eight, laboured for long hours and could
expected to be called any time – even
Christmas Day. And instead of being locked
in oak-panelled offices, the Warburg build-
ing at 30 Gresham Street had open-plan
offices, creating a more dynamic and dem-
ocratic environment.
Warburg was also influential on the way
the City does business. In the late 50s he
advised on the hostile takeover of British
Aluminium – the first in Britain – an
episode which became known as the
Aluminium War. His activities were
described by Treasury officials and com-
petitors as “monkey business”, “jungle
warfare” and “piratical ventures”.
Warburg thought nothing of poaching
clients from other banks, something con-
sidered beyond the pale at the time. There
was no time for sentiment. When his own
son’s bank began to wobble Warburg was
quick to pull his financial support. He was,
to use a cricketing analogy, a player in a
world of gentlemen.
Warburg is also largely responsible for
turning London from a financial backwa-
ter into Europe’s financial centre. An
ardent advocate of European union, he
believed that money could unite people
better than nation states, which he saw as
outdated 18th century constructs. It was
this idealism that led him to almost single-
handedly create the Eurobond market in
the early 60s and he spent far more time
and effort on the market than on more
profitable business. Eurobonds were com-
pany bonds denominated in dollars or ster-
ling, and which could be transferred with
minimal tax and without having to
declare your purchases, something which
helped money flow across borders without
government interference. He was, says
Ferguson, “a prophet of globalisation”.
Banking, for Warburg, was a way to live
a cultured life and he loved to surround
himself with people who had a hinterland.
WORDS BY JEREMY HAZLEHURST
Niall Ferguson, He would ask interviewees for the SG
above; and Siegmund Warburg bank what they were reading
Warbug, inset. and if the answer came back “Thomas
Mann”, or “Kafka”, then they were
Picture: employed. One senior SG Warburg
Micha Theiner described the attitude to hiring as: “You
/City A.M. don’t buy a tie because you need it, but
because you like it.”
Ferguson also says that he was intrigued
by Warburg’s view of himself as a “banker-
physician”, a trusted confidant and advi-
sor making use of his skill and knowledge
to diagnose and treat. He considered M&As
and takeovers to be the really important
things – it was all about “relationship”,
rather than “transactional” banking and
he was scathing of “gamblers” who played
the stock markets. He called mathemati-
cal economics “a cult”, deriding “those
dogmatic economist-statisticians who
prove with a terrific array of figures that
certain definite things will happen at a cer-
tain definite date”. He refused to have
charts in a bond issue prospectus.
PRINCIPLED ACTION
Behind it all was a deeper ethic, and
Warburg would talk eloquently about the
culture of personal freedom running from
Ancient Greece to Renaissance Italy – mod-
ern banking was continuing the tradi-
tions, he thought. His beliefs and
experiences informed his actions. “He was
typical of a generation of German Jews
whose world was ended, in some senses lit-
erally, by the events of the 1920s and 30s,”
says Ferguson. “His experience taught him
that life could be pretty bloody nasty and
that informed the way he behaved, his
career was the result of a traumatic youth.
He was very wary, especially in the 1970s
when it looked like things were going in a
Weimar direction.”
This contrasts to the current crop of
bank CEOs, Ferguson says, few of whom
began their careers before the 1980s.
“Nothing has ever happened to the current
bankers. Volker tamed inflation, then
there was Thatcher and Reagan, it has
CITYA.M. 5 JULY 2010
Warburg saw
himself as a
physician-
banker who
would advise
and heal. He
wasn’t in
business for
the money
been one long party. In 1987 Greenspan
just cut interest rates and things carried
on as before. It’s no surprise that they kept
dancing until the music stopped.”
What would Warburg have made of
today? “He would be disgusted by what has
happened. The downturn was the result of
the triumph of transaction banking, and
he’d say that this is exactly what he
warned about. For him transaction bank-
ing was what caused the crash of 1929 and
he saw relationship banking as the solu-
tion to that.”
Ultimately, Warburg failed to see that
relationship banking couldn’t work in the
world of large-scale American markets,
and that only universal banks could flour-
ish there. His firm was eventually bought
by Swiss Bank Corporation and eventually
swallowed up into UBS. But still Ferguson
thinks that the example of Warburg’s atti-
tude can help guide the next generation of
bankers. “I’m wary that ethics teaching
becomes like Thought for the Day,” he says.
“I don’t think that we should just inter-
rupt the [MBA] programme every so often
to bring you news from the New
Testament”. Instead, they should under-
stand the duties that bankers have, and
the deep importance of banking to society.
Ferguson thinks that there should be a
Hippocratic Oath for bankers, although it
has to be far deeper than a few high-sound-
ing rules. That ethics was reduced to rule-
following was one of the triggers for the
crisis. Again, Warburg’s physician-finan-
cier model is illuminating here. “Imagine
if doctors behaved that way, doing the
minimum to make sure what they did
complied with the standards, just think
what a scary an experience going to the
doctor would be,” Ferguson says. “As we are
re-thinking the role of the CEO, I think we
can learn a lot from Warburg”.
Niall Ferguson will be giving a talk called
Men, Money and Morality: How Can Trust in
Banking Be Restored at St Paul’s Cathedral
tomorrow at 9pm. Entry is free.
High Financier is out now, priced £30
 Markets&Investment 19

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
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 . . . . . . . . . . . . . . . . . . . . . . . .260.00* –2.70 314.80 216.75 COLT Group . . . . . . . . . . . . . . . .127.40 +1.40 144.20 106.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .49.80 +0.70 71.75 31.75 Schroders . . . . . . . . . . . . . . . . . 1154.00 — 1450.00 764.00
3i Infrastructure . . . . . . . . . . . . . 110.50* +1.10 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .505.50* +3.50 574.50 307.75 Jardine Lloyd Thompson. . . . . . .527.50 +6.00 604.50 399.00 Schroders N/V. . . . . . . . . . . . . . .955.00 +4.50 1185.00 643.50
A.B. Foods . . . . . . . . . . . . . . . . .949.00* –1.50 1045.00 752.00 Cookson . . . . . . . . . . . . . . . . . . .379.00 +11.60 616.00 220.00 Johnson Matthey . . . . . . . . . . .1480.00* +20.00 1814.00 1108.00 Scot. & Sthrn Energy. . . . . . . . . 1128.00 +10.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .123.40 –0.60 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . .1004.00 +33.00 1047.00 529.00 Kazakhmys . . . . . . . . . . . . . . . . .984.50 +19.50 1634.00 574.50 Scottish Mortgage. . . . . . . . . . . .542.50* +9.50 623.50 376.00
Admiral. . . . . . . . . . . . . . . . . . .1400.00 +10.00 1441.00 861.00 CSR . . . . . . . . . . . . . . . . . . . . . .363.90 –4.60 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .125.10 +3.50 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .254.90 +4.70 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . .105.30* +1.70 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .441.70* +8.70 539.00 279.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .207.80 +1.20 255.00 178.00
Afren . . . . . . . . . . . . . . . . . . . . . .82.75 +3.60 111.00 48.50 Dana Petroleum . . . . . . . . . . . .1440.00 +263.00 1549.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .125.60 +0.60 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .567.50 –4.50 656.50 394.30
African Barr Gold . . . . . . . . . . . .614.50 –3.50 685.00 520.50 Davis Service . . . . . . . . . . . . . . .360.20 –0.70 442.30 311.25 Lancashire Hldgs . . . . . . . . . . . .500.00 +5.50 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1226.00* +10.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1389.00 –1.00 1496.00 492.50 De La Rue . . . . . . . . . . . . . . . . . .948.50 +3.50 1021.00 808.50 Land Securities . . . . . . . . . . . . . .551.50* +0.50 743.50 415.25 Shaftesbury . . . . . . . . . . . . . . . .351.00* +1.70 426.50 285.25
Alliance Trust . . . . . . . . . . . . . . .294.60* +1.10 352.70 260.25 Debenhams . . . . . . . . . . . . . . . . .56.30 +1.20 91.95 51.95 Legal & General . . . . . . . . . . . . . .75.85 +0.05 94.40 49.37 Shire. . . . . . . . . . . . . . . . . . . . .1365.00 +24.00 1526.00 816.00
AMEC . . . . . . . . . . . . . . . . . . . . .817.00* +11.50 891.00 603.50 Derwent London . . . . . . . . . . . .1229.00 +21.00 1490.00 844.00 Lloyds Banking Gp . . . . . . . . . . . .54.70 +2.49 75.58 40.42 SIG . . . . . . . . . . . . . . . . . . . . . . .100.30 +1.50 146.60 86.75
Amlin . . . . . . . . . . . . . . . . . . . . .392.90 +11.40 428.50 291.00 Dexion Absolute . . . . . . . . . . . . .137.00 +2.00 148.00 117.00 Logica . . . . . . . . . . . . . . . . . . . .103.90 –0.60 149.10 74.50 Smith & Nephew . . . . . . . . . . . . .581.50 –34.00 700.50 435.25
Anglo American . . . . . . . . . . . .2303.50 +32.00 3015.50 1557.50 Diageo . . . . . . . . . . . . . . . . . . .1037.00 –5.00 1176.00 857.00 London Stk Exchange . . . . . . . . .550.50 +6.50 949.50 540.50 Smiths . . . . . . . . . . . . . . . . . . .1054.00 +11.00 1186.00 677.50
Antofagasta . . . . . . . . . . . . . . . .777.50 +14.00 1100.00 561.00 Dimension Data . . . . . . . . . . . . . .90.90 +0.90 105.00 54.75 Lonmin . . . . . . . . . . . . . . . . . . .1378.00 +23.00 2198.00 950.00 SOCO Intl . . . . . . . . . . . . . . . . . .391.10 +7.10 444.60 380.60
Aquarius Platinum . . . . . . . . . . .309.50 +9.50 490.00 172.75 Domino’s Pizza . . . . . . . . . . . . . .390.60 +12.20 390.70 202.00 Man . . . . . . . . . . . . . . . . . . . . . .214.50* –1.50 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .750.50 +10.00 928.00 512.50
ARM Holdings . . . . . . . . . . . . . . .270.50 –1.80 362.40 116.00 Drax . . . . . . . . . . . . . . . . . . . . . .376.00 +1.60 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .333.10* +5.90 412.70 303.75 Spirax-Sarco Eng . . . . . . . . . . .1356.00 +10.00 1591.00 809.00
Arriva . . . . . . . . . . . . . . . . . . . . .763.50 –0.50 782.50 378.50 DSG Intl . . . . . . . . . . . . . . . . . . . .25.25 +0.97 39.75 19.25 Meggitt . . . . . . . . . . . . . . . . . . . .300.80 –5.00 331.00 151.75 Spirent Comms . . . . . . . . . . . . . . 110.10 +1.60 127.80 54.50
Ashmore . . . . . . . . . . . . . . . . . . .236.80 +0.30 311.20 183.25 Dunelm . . . . . . . . . . . . . . . . . . . .325.30 –8.30 438.40 202.50 Melrose . . . . . . . . . . . . . . . . . . .209.40 +6.00 251.50 90.00
Astrazeneca . . . . . . . . . . . . . . .3088.50 –4.50 3262.00 2631.50 Easyjet . . . . . . . . . . . . . . . . . . . .396.90 +5.50 499.90 260.00 Mercantile IT . . . . . . . . . . . . . . . .859.50* +19.50 1002.00 726.00 Sports Direct Intl . . . . . . . . . . . . .105.90 +4.00 134.00 72.50
Atkins(Ws) . . . . . . . . . . . . . . . . .681.50 –2.00 747.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .377.90* +5.70 412.40 298.50 Michael Page Intl. . . . . . . . . . . . .349.40 –1.60 461.50 218.50 SSL Intl . . . . . . . . . . . . . . . . . . . .796.50 +7.50 893.50 506.00
Autonomy Corp . . . . . . . . . . . .1801.00 +3.00 2012.00 1121.00 Electrocomponents . . . . . . . . . . .209.30* –0.40 245.00 134.25 Micro Focus . . . . . . . . . . . . . . . .437.00 +26.50 550.00 300.90 St James’s Place . . . . . . . . . . . . .208.00 +3.80 296.90 172.25
Aveva . . . . . . . . . . . . . . . . . . . . 1141.00* –4.00 1237.00 666.50 EnQuest . . . . . . . . . . . . . . . . . . . .98.20 +2.20 112.70 87.35 Millen & Copthorne . . . . . . . . . . .395.00 +3.00 496.30 227.75 Stagecoach. . . . . . . . . . . . . . . . .174.60 +3.20 204.90 123.50
Aviva . . . . . . . . . . . . . . . . . . . . .315.10 +9.30 474.00 274.75 Essar Energy . . . . . . . . . . . . . . .463.70 +1.50 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .231.90 +2.70 281.70 165.25 Standard Chartered . . . . . . . . . . 1611.00 +10.50 1847.00 1119.00
Babcock International . . . . . . . . .618.50* +20.00 660.50 448.50 Eurasian Nat Res . . . . . . . . . . . .841.50 +23.50 1276.00 632.00 Mitchells & Butlers . . . . . . . . . . .277.40 +1.80 343.90 228.30 Standard Life . . . . . . . . . . . . . . .176.00 +3.00 237.00 170.00
BAE Systems . . . . . . . . . . . . . . .308.50 +1.30 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .576.50* –0.50 630.00 200.25 MITIE . . . . . . . . . . . . . . . . . . . . .208.50* +0.70 281.70 198.70 SuperGrp . . . . . . . . . . . . . . . . . .745.00 +25.00 764.00 499.00
Balfour Beatty . . . . . . . . . . . . . . .234.00* +4.20 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .578.00* –6.00 664.50 437.50 Mondi . . . . . . . . . . . . . . . . . . . . .371.00 +0.90 488.00 187.50 TalkTalk . . . . . . . . . . . . . . . . . . .120.50 +0.10 147.10 106.60
Barclays . . . . . . . . . . . . . . . . . . .266.95 +11.60 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .91.45 +0.05 96.80 73.50 Monks Inv Tst . . . . . . . . . . . . . . .277.90 +2.40 321.20 222.00 Talvivaara Mining . . . . . . . . . . . .362.20 +2.60 501.50 319.00
Barratt Development . . . . . . . . . . .92.35 –0.10 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .240.20 +5.20 396.20 112.00 Morrison Wm . . . . . . . . . . . . . . .264.10 +1.40 306.30 234.75 Tate & Lyle . . . . . . . . . . . . . . . . .472.70* +18.30 509.00 284.75
BBA Aviation . . . . . . . . . . . . . . .179.90 +1.50 220.00 105.00 FirstGroup . . . . . . . . . . . . . . . . .362.00 +4.00 448.80 322.75 Murray Intl Tst . . . . . . . . . . . . . . .817.00 +11.50 893.50 593.50 Taylor Wimpey . . . . . . . . . . . . . . .25.72 +0.07 54.90 24.29
Beazley. . . . . . . . . . . . . . . . . . . . 113.00 +3.90 124.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .256.70 +5.30 297.20 210.25 National Express. . . . . . . . . . . . .213.40 –1.70 256.80 135.86 Telecity . . . . . . . . . . . . . . . . . . . .393.00 — 455.00 298.00
Bellway. . . . . . . . . . . . . . . . . . . .585.00* –4.00 927.50 583.00 Fresnillo . . . . . . . . . . . . . . . . . . .964.00 –5.00 1115.00 438.00 National Grid . . . . . . . . . . . . . . .487.80* +2.80 607.65 469.37
Berkeley . . . . . . . . . . . . . . . . . . .773.00 +3.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .262.60 –0.40 285.70 203.75 Next . . . . . . . . . . . . . . . . . . . . .1989.00* +12.00 2360.00 1497.00 Templeton Emrg Mkts . . . . . . . . .520.00* +5.00 598.00 349.50
BG . . . . . . . . . . . . . . . . . . . . . .1025.50 +23.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .445.00 +5.90 484.00 370.00 Northumbrian Water . . . . . . . . . .303.70 +3.30 312.00 219.90 Tesco . . . . . . . . . . . . . . . . . . . . .382.90* +5.40 454.90 347.40
BHP Billiton . . . . . . . . . . . . . . .1723.00 +28.50 2346.00 1274.50 GKN . . . . . . . . . . . . . . . . . . . . . . 112.50 +3.20 155.00 71.75 Old Mutual . . . . . . . . . . . . . . . . .103.50 +1.50 127.20 74.60 Thomas Cook . . . . . . . . . . . . . . .178.80 +1.10 277.20 172.30
BlackRock Mining . . . . . . . . . . . .542.00 +6.50 654.50 346.00 GlaxoSmithKline . . . . . . . . . . . . 1108.50* –1.00 1347.00 1058.00 Partygaming . . . . . . . . . . . . . . . .218.40 +12.40 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .222.90 +4.20 261.10 141.75
Booker . . . . . . . . . . . . . . . . . . . . .39.50* — 49.50 33.00 Great Portland Estates . . . . . . . .283.00 +0.30 332.10 203.75 Pearson . . . . . . . . . . . . . . . . . . .867.00 +3.00 1069.00 574.00 Travis Perkins . . . . . . . . . . . . . . .754.50 +45.50 915.00 536.00
BP . . . . . . . . . . . . . . . . . . . . . . .322.00 –5.95 658.20 296.00 Greene King . . . . . . . . . . . . . . . .415.20 +20.20 504.00 372.50 Pennon . . . . . . . . . . . . . . . . . . . .557.00 +11.00 567.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .209.10 +3.00 313.90 202.30
Brit Insurance . . . . . . . . . . . . . . .900.00* +12.50 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .496.20* +10.20 562.50 306.25 Persimmon . . . . . . . . . . . . . . . . .343.20 +1.10 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .318.20 +10.70 436.20 261.20
British Airways . . . . . . . . . . . . . .188.40 +1.90 255.80 117.30 Halma . . . . . . . . . . . . . . . . . . . . .269.00 +3.60 284.90 184.00 Petrofac . . . . . . . . . . . . . . . . . . 1172.00 +31.00 1294.00 633.50 Tullow Oil . . . . . . . . . . . . . . . . .1046.00 +54.50 1375.00 834.50
British Amer. Tob . . . . . . . . . . . 2119.00 +28.00 2335.50 1671.00 Hammerson . . . . . . . . . . . . . . . .336.70 –0.30 460.30 277.00 Petropavlovsk . . . . . . . . . . . . . . 1159.00 +15.00 1370.00 516.50 UK Commercial Prop. . . . . . . . . . .79.50 +1.10 84.90 62.25
British Empire Tst . . . . . . . . . . . .405.00 –1.90 467.90 338.50 Hargreaves Lansdown . . . . . . . .324.10 –2.30 387.00 197.25 Premier Farnell . . . . . . . . . . . . . .210.20 –2.60 252.60 122.25 Ultra Electronics . . . . . . . . . . . .1530.00 +8.00 1678.00 1079.00
British Land . . . . . . . . . . . . . . . .436.30 +7.30 532.00 353.00 Hays . . . . . . . . . . . . . . . . . . . . . . .88.40 –1.50 119.00 80.00 Premier Oil . . . . . . . . . . . . . . . .1323.00 +97.00 1431.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1742.00 –15.00 2024.00 1419.00
Britvic. . . . . . . . . . . . . . . . . . . . .485.20* +7.60 498.50 284.00 Henderson . . . . . . . . . . . . . . . . . 118.80 +0.70 157.80 87.75 Provident Financial . . . . . . . . . . .825.50 –3.00 986.00 763.00 United Utilities . . . . . . . . . . . . . .528.50* +6.50 575.00 429.00
Brown(N.) . . . . . . . . . . . . . . . . . .253.00* +6.00 284.30 204.25 Heritage Oil. . . . . . . . . . . . . . . . .380.90 +11.30 587.00 369.60 Prudential . . . . . . . . . . . . . . . . . .494.10 +4.90 665.00 350.25
BSkyB . . . . . . . . . . . . . . . . . . . .696.00 +0.50 732.00 453.75 Hikma Pharma . . . . . . . . . . . . . .689.00 –3.00 730.00 430.00 PZ Cussons . . . . . . . . . . . . . . . .341.00 +1.50 344.50 197.00 Utd Business Media . . . . . . . . . .494.50 +10.70 579.50 364.75
BT . . . . . . . . . . . . . . . . . . . . . . .126.60 –1.40 151.00 99.50 Hiscox . . . . . . . . . . . . . . . . . . . .344.10 +8.00 369.30 279.50 Qinetiq . . . . . . . . . . . . . . . . . . . . 119.50 +3.20 179.10 113.90 Vedanta Resources . . . . . . . . . .2131.00 +58.00 2967.00 1264.00
Bunzl . . . . . . . . . . . . . . . . . . . . .664.00* +2.50 784.50 498.25 Hochschild Mining . . . . . . . . . . .305.00 +5.00 370.60 220.00 Randgold Resources. . . . . . . . .6180.00 +100.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . .1055.00* +6.00 1193.00 537.00
Burberry . . . . . . . . . . . . . . . . . . .739.50 –6.00 815.50 403.25 Home Retail . . . . . . . . . . . . . . . .214.30* +4.20 336.50 208.50 Reckitt Benckiser . . . . . . . . . . .3045.00 –40.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .136.50* –1.85 153.80 111.90
Cable & Wire Comms . . . . . . . . . .57.80* +0.10 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .1996.00* –14.00 2190.00 1336.00 Reed Elsevier . . . . . . . . . . . . . . .494.80 +4.60 548.00 403.75 VT . . . . . . . . . . . . . . . . . . . . . . .789.00 +15.50 798.00 416.00
Cable & Wire Wwide . . . . . . . . . . .85.00* –0.50 94.80 68.60 HSBC Hldgs . . . . . . . . . . . . . . . .600.10* +1.00 766.80 487.00 Regus . . . . . . . . . . . . . . . . . . . . . .69.00 –0.60 125.50 61.00 Weir . . . . . . . . . . . . . . . . . . . . .1052.00 +28.00 1183.00 437.50
Cairn Energy. . . . . . . . . . . . . . . .422.10 +20.80 448.60 306.80 Hunting . . . . . . . . . . . . . . . . . . .441.00 +1.60 659.50 377.00 Rentokil Initial . . . . . . . . . . . . . . .103.70 +0.40 140.20 82.25 WH Smith . . . . . . . . . . . . . . . . . . 411.00 +10.00 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1557.00 +18.00 1759.00 1495.00 ICAP . . . . . . . . . . . . . . . . . . . . . .394.70 +7.50 478.30 291.70 Resolution . . . . . . . . . . . . . . . . . .66.95 +0.70 99.15 58.45 Whitbread . . . . . . . . . . . . . . . . .1367.00* +6.00 1645.00 778.50
Capita . . . . . . . . . . . . . . . . . . . . .734.00 +2.00 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .426.50 +5.50 458.20 261.25 Rexam . . . . . . . . . . . . . . . . . . . .293.10 –0.70 331.20 222.50 William Hill . . . . . . . . . . . . . . . . .169.40 +0.80 217.80 160.50
Capital & Counties . . . . . . . . . . .108.90 +0.90 125.40 99.60 Imagination Tech Gp . . . . . . . . . .275.50 +2.40 311.60 130.00 Rightmove . . . . . . . . . . . . . . . . .618.00 –1.50 729.00 334.00 Witan Inv Tst . . . . . . . . . . . . . . . .412.00 +2.10 487.00 329.50
Capital Shopping Centres . . . . . .304.80 +3.50 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .666.00 –4.00 756.50 275.25 Rio Tinto . . . . . . . . . . . . . . . . . .2934.50 +30.00 4104.00 1822.00 Wolseley . . . . . . . . . . . . . . . . . .1322.00 +25.00 1742.00 1026.00
Carillion . . . . . . . . . . . . . . . . . . .301.30 +3.40 361.90 244.00 Imperial Tobacco. . . . . . . . . . . .1850.00 +1.00 2159.00 1554.00 RIT Capital Partners . . . . . . . . . 1157.00 +40.00 1200.00 877.00
Carnival . . . . . . . . . . . . . . . . . .2143.00 +33.00 2937.00 1574.00 Inchcape. . . . . . . . . . . . . . . . . . .243.70 +6.60 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . .547.00* +12.00 631.50 346.50 Wood Group (John). . . . . . . . . . .321.10 +10.20 411.70 231.25
Catlin . . . . . . . . . . . . . . . . . . . . .348.00 +1.50 380.50 284.75 Informa . . . . . . . . . . . . . . . . . . . .349.40 +7.30 439.40 216.00 Rotork . . . . . . . . . . . . . . . . . . .1273.00* +19.00 1482.00 779.50 WPP . . . . . . . . . . . . . . . . . . . . . .624.00 +9.50 744.00 380.50
Centamin Egypt . . . . . . . . . . . . .158.00 +0.50 174.75 77.86 Inmarsat . . . . . . . . . . . . . . . . . . .704.00 –11.50 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .40.06 +0.59 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . . .871.10 +25.30 1344.50 555.10
Centrica . . . . . . . . . . . . . . . . . . .292.80 –0.70 320.00 212.50 Intercontl Hotels . . . . . . . . . . . .1051.00 +5.00 1244.00 584.50 Royal Dutch Shell A . . . . . . . . .1648.50 +24.50 2068.50 1431.00 Yell Group. . . . . . . . . . . . . . . . . . .25.50 +1.50 86.00 21.00
Charter Intl . . . . . . . . . . . . . . . . .602.50 +8.00 855.50 406.50 Intermediate Capital . . . . . . . . . .243.50 +3.10 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1576.50 +22.50 1997.50 1437.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2950.00 +51.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1450.00 +13.00 1576.00 1024.00 RSA Insurance . . . . . . . . . . . . . . 119.00 +1.10 142.00 113.10
Chloride Group . . . . . . . . . . . . . .373.00 +2.90 390.50 129.00 Intl Power . . . . . . . . . . . . . . . . . .295.90 –0.40 354.00 231.00 SABMiller . . . . . . . . . . . . . . . . .1831.50 +4.50 2090.00 1210.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .670.00 — 806.50 623.00 Invensys . . . . . . . . . . . . . . . . . . .243.10* +4.20 350.30 212.25 Sage . . . . . . . . . . . . . . . . . . . . . .224.20 –1.50 260.50 167.20
Cobham . . . . . . . . . . . . . . . . . . . 211.60* +1.00 278.60 173.20 Investec . . . . . . . . . . . . . . . . . . .430.60 +1.40 565.00 324.25 Sainsbury(J) . . . . . . . . . . . . . . . .319.20* +2.00 373.00 307.60 www.interactivedata.com

Markets nervy over US results and MPC meeting

markets today is leaving the door Looking ahead further into the ANALYSIS l FTSE
MARTIN ON open for renewed selling on UK and
European markets this morning.
week we have the Bank of England’s
rates meeting on Thursday, which
6,000
5,800 4,838.09
02 Jul
THEMARKETS GFT is calling the FTSE 100 to open
down 12 points at 4,826. The German
DAX 40 is quoted down 20 points at
could offer more spice than usual
after last month’s unexpected vote for
a hike by one of the MPC members.
5,600
5,400

5,814 and the French CAC 40 is There are voiced concerns over the 5,200
expected to open with a loss of creeping inflation level, and should 5,000
around 23 points, at 3,325. we see Andrew Sentance joined by
4,800
any other members of the panel this
DIFFICULT WEEK FOR MARKETS week, the prospect of a tightening in 12 Apr 30 Apr 21 May 11 Jun 1 Jul
The worse-than-expected payrolls monetary policy will come just that
data released on Friday, combined little bit closer. ANALYSIS l S&P 500
with a generally nervy mood about Martin Slaney is director of global deal- 1,250
Europe’e economies and banking sys- ing operations for GFT. 1,022.58
tem, has set the scene for another dif- 1,200 02 Jul
MARTIN SLANEY ficult week ahead for stock markets
globally.
1,150

A report in the weekend press of a 1,100

A
disappointing close on US mar- Goldman Sachs chief economist
kets on Friday and low volume warning of troubling and challenging 1,050
from the Independence Day times ahead will add to the negative
holiday which closes many US sentiment. 1,000
14 Apr 1 May 24 May 14 Jun 2 Jul

US MARKETS

U
S MARKETS closed before the erating a “death cross”. and falling by 17 per cent since April, row as the pressure is set to continue cent, the lowest it has been for over a
Independence Day holiday on A “death cross” occurs when a but the Dow Jones fared better with a following a weak June jobs report year, but it was announced there are
the brink of a bear market after shorter-term average falls below a drop of 4.5 per cent last week and a that contributed to a continued slide. 125,000 fewer jobs after temporary
their seventh straight losing longer term one, and last occurred drop of 13.5 per cent since April. The figures continued market con- census workers who offset previous
session, and the worst week for two between the 50 and 200 day moving But the fear is if one of the indices cern brought on by worries about a figures have now left their positions.
months. averages in December 2007, which reaches the 20 per cent drop thresh- European sovereign debt crisis and a The figures for private hiring did rise
The S&P 500 lost 4.8 points to was at the early point of a slide which old turning it into a bear market, it sluggish US labour market, which has by 83,000 from the previous month
1,022.6 on Friday to finish down 5 per took the S&P 500 to a 12-year low. could trigger the others into a broad- seen investors flee since the market the department said.
cent for the week, leaving it 16 per The NASDAQ also finished poorly, er collapse. rally back in March. Non-farm payrolls fell in June for
cent below April highs and at its low- dropping 9.6 points to 2,091, ending Brokers will need to be well rested The jobless rate in America slipped the first time this year, adding to a
est point since September 2009, gen- the week down by almost 6 per cent when the markets open again tomor- to 9.5 per cent for June from 9.7 per slew of poor economic reports.
 20 Investment | Spread Betting CITYA.M. 5 JULY 2010

Uncertainty to %
ANALYSIS l Yields on countries’ 10-year government debt
Yield
11.2

10
Source: ALPARI

Greece

keep US and UK 8.8

7.6

6.4
Portugal

bond yields at 5.2

2.8
Spain

UK
US
Germany

their low levels

1.6 Japan
Apr 09 Jun Aug Oct Dec Feb 10 Apr Jun Aug

Spread betters should hold on to any long

fixed income punts, writes Jessica Mead

S
INCE the start of April, yields on US,
UK and German government bonds
have only been going one way and
that’s down. Surprising as it might
seem, they are all perceived to be relative
safe havens as fears of a double-dip reces-
sion escalate and the Eurozone debt tur-
moil appears to rumble on.
On Friday, a disappointing US non-farm
payrolls report pushed down yields on 10-
year Treasuries to 2.92 per cent, the lowest
level since April 2009.
Yields on two-year US Treasuries have
dropped below credit crunch lows and
those on 10-year Treasuries are back to
where they were in April 2009. “The
Treasury market’s behaviour reflects a
new found wariness that is shared by equi-
ty markets,” says Brewin Dolphin’s chief
market strategist Mike Lenhoff.
UK 10-year gilts yields held near their 14-
month low of 3.33 per cent following both
the jobs report and praise from ratings
agency Moody’s about Britain’s ability to
repay its debt.
The yield represents the return that you
get on the bond and it is reflective of how
much investors are demanding to compen-
sate for default and inflation risks.
Spread betters who had taken a punt on
rising gilt and Treasury prices back in
April – yields and bond prices always move
inversely to each other – would have done
extremely well. But how much further can
prices of gilts, Treasuries and bunds rise?
It’s pretty tricky to call because we are in
very exceptional circumstances at the
moment, says Elisabeth Afseth, a fixed
income analyst at Evolution Securities, an
investment bank. “Yields on UK gilts are
more likely to stay at their lower levels
than trade back to where they were earlier
in the year because of risk aversion,” she
says, adding that there is nothing to war-
rant yields going much higher from their
current levels.
Although we saw fairly robust first quar-
ter corporate profits, the fiscal stimulus
had been supporting some key areas of the
economy. For example, the end of the
homebuyer tax credit in the US in April
has resulted in dreadful housing figures
over the past month or so.
If we were to see a sharp slowdown in with a long punt on UK gilt prices should tions so higher rates would not be good
the economy, then the Bank of England be aware of is inflation. If UK inflation con- news for spread betters already long.
might be tempted to expand its quantita- tinues to remain high, then the Monetary But with little downside risk to the
tive easing (QE) programme. By creating Policy Committee may feel compelled to prices of UK gilts, US Treasuries and US
extra demand for gilts, the Bank would start hiking interest rates. Rates and bond bonds over the coming months, a long
effectively be pushing up the price of UK prices also typically move in opposite direc- trade could well pay off.
government debt and pushing down the
yield.
Consequently, if you already have long IN FOCUS | UK GILT YIELDS
positions on these “safe haven” bonds,
then it is probably worth holding on to
them. Brewin Dolphin’s Mike Lenhoff says: The cost of UK government borrowing ble plan to deal with the deficit, as well thing of a “honeymoon period” – the
“A short while ago we suggested hanging has dropped to 14-month lows as the as a lack of a detailed debate about great test of market confidence will
on to any position in gilts. They are a tiny
bit dearer since and probably not worth
markets give the coalition the benefit of spending cuts. 10-year yields reached a come upon the release of detailed
buying but if you’ve got them, keep them – the doubt. 10-year gilt yields are now at peak of 4.2 per cent in February (just spending reviews in October and the
for now.” 3.4 per cent while two-year yields have under the current rate of 30-year government’s likely battle with public
If you aren’t currently betting on bond also drifted down to 0.73 per cent. yields) and stayed around the 4 per sector unions. Nonetheless, demand for
prices, then you may want to hold off until
the direction of the world economy Having been moving around the 3.6 per cent level up until the establishment of UK gilts remains solid, particularly
becomes clearer. If data continues to disap- cent mark since last August, 10-year a new government after the election, given the uncertain outlook for the US
point over the next month or so, then it yields began to rise from December when the descent began. economy and the ongoing Eurozone
might be worth reconsidering taking out a
long position. onwards on the back of anxiety about However, as CMC Markets’ Michael debt problems.
However, one risk that spread betters the Labour government’s lack of a credi- Hewson remarks, we are still in some- Juliet Samuel

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CITYA.M. 5 JULY 2010
THE WORLD CUP TIPSTER
THE TOURNAMENT ENTERS
ITS FINAL EXCITING WEEK
JUST four teams are now left in the 2010
World Cup and, shockingly, one of them is
not Brazil. After England’s disastrous exit, at
least we can look on all of these latest devel-
opments with almost dispassionate interest.
It is certainly perfect for spread betters. As
readers will know, Holland beat Brazil on
Friday 2-1 to set up a semi-final clash with
Uruguay tomorrow evening at 7.30pm. This
is the first time that Holland and Uruguay
have ever played each other so football pun-
ters unfortunately can't look to past games
for guidance. Holland are the only team to
have won every game so far this tournament
SPREAD BET
GURU
JOSHUA
RAYMOND
MARKET
STRATEGIST
josh@cityindex.com
Q.
Dear Josh, how serious is the
threat of a double dip recession in
the UK?
A.
The moves in the markets last week
show you just how concerned
investors are that a dip back into
recession could be a real possibility for the
economy. If you take a look at the behaviour
of bond markets of late, they clearly point to
the fear of troubling times ahead. The yield
on two-year US Treasury bonds, for exam-
ple, reached levels not seen since the Great
Depression back in the 1930s. But when
markets start to plunge it’s not uncommon
Investors are seeking
safe havens right now THE TIPSTER
Picture: GETTY
GOLD’S LATEST TUMBLE PROVIDES A
BUYING OPPORTUNITY FOR TRADERS
G
OLD took a spectacular tumble at the
end of last week, falling to as low as
$1,196 at one point on Thursday.
There were rumours that the fall was
caused by some funds liquidating long gold
positions to fund margin calls in other prod-
ucts such as equities; and the dollar took a
hammering. The $1,196 to $1,200 area
should prove to be a good support level and
with the Indian wedding season not far
away, these could be good levels to be buy-
ing. Spread Co offers a spread on spot gold
of $1,211.4-$1,211.9.
Holland defeated
Brazil on Friday
Picture: PA
and they have done so with quiet efficiency
rather than flashy style. With a place in the
final at stake, this is unlikely to change.
Uruguay will also be missing their star
striker Luis Suarez, who has been suspended
by Fifa following his Hand of God incident
against Ghana. So the Uruguayans may well
try to keep the play tight and catch the
Dutch on the break. Consequently, it's unlike-
ly to be a smooth game for the Oranje and it
could be a lot tighter than most people are
expecting. You may want therefore to look
at selling total match goals at 2.2 with
Sporting Index. An alternative market on
that some people start making assumptions
about a possible market apocalypse. If you
do a Google search I’m sure you will find the
same predictions of doom back in 2001-
2002, when the dot.com bubble burst, and
after the 1987 stock market crash, so per-
haps take these predictions with a generous
pinch of salt. That said, UK GDP predictions
were revised lower in the emergency budget
to 1.2 per cent for 2010 and 2.3 per cent for
2011, with net exports and business invest-
ment making a greater contribution to
growth than in the past. One troubling ele-
ment is the fact that UK exports have not,
as of yet, picked up as much as many may
have hoped, despite the weak pound. Last
week’s PMI data showed that export orders
slumped to 50.7 for June, a steeper fall than
expected. This raises concerns that the sov-
ereign debt crisis in Europe (a major trading The unemployment
partner of the UK) and the subsequent weak rate is falling in the
single currency, which now only buys 82p US but private sector
for every euro (down from 92p in March), is employment is still
having a significant effect on demand for underperforming
UK-made goods. Fears about a double dip,
combined with continuing fears about the Picture: GETTY
European debt crisis has led to a flee away
from risky asset classes such a stocks.
Q.
Dear Josh, the US unemployment
rate fell last week. Does this not
indicate that the US recovery is
Investment | Spread Betting
British Airways may be making some
headway in its dispute with cabin crew but
this hasn’t stopped the share price from
testing territory below the 190p mark.
Traffic figures due for release today will
again be marred by the recent strike
action, but positive sounds regarding cargo
traffic and the market outlook will prove
instrumental. The ongoing threat of a dou-
ble-dip recession is clearly going to fright-
en investors in this sector so regardless of
how bullish an outlook the airline paints,
the global situation is arguably key. The
the first semi-final would be to buy Dutch
Supremacy (margin of goal) at 1 with
Spreadex.
Germany and Spain meet on Wednesday
evening for the remaining place in the 2010
final and the knock-out stages are traditional-
ly tense, low-scoring affairs. In the past four
semis in the 2006 and 2002 tournaments,
there were only three goals scored in total
across all four matches. If you think this
trend is likely to continue and that Germany
won't be as free-flowing against the Germans
- when the two teams met in the 2008
European Championship final, Spain only won
gaining strength?
A.
The labour market data in the US is
crucial for the financial markets,
and asset prices are very sensitive
to changes in this figure. But, although the
headline non-farm payrolls figure is impor-
tant, you need to take a deeper look into the
breakdown of Friday’s data, which indicates
a rather mixed picture. On the positive side,
the US unemployment rate surprisingly fell
to 9.5 per cent when it was expected to
increase to 9.8 per cent. But on the negative
21
current IG Index price for the London-list-
ed airline is 189.4p-190p.
Another company due to update the
market this week is Marks & Spencer.
Although the store’s barbecue range of
food has probably benefited from the
World Cup and the recent hot weather, it is
unlikely to be enough of a boost to sales.
And with uncertainty lingering over the
economic recovery, the second quarter out-
look could be less than stellar as well. The
current IG Index price is 331.8p-332.7p.
Oil and gas producer Dana Petroleum
has seen its share price rocket since it was
announced that South Korea’s national oil
firm Korea National Oil Corp (KNOC) made
a preliminary bid for the British firm. There
might well be further upward momentum
for the stock if the bid progresses. Capital
Spreads quotes 1,396.4p-1,400.6p on the
stock.
Jessica Mead
1-0 - then look to sell goals at 2.2 with
Sporting Index.
On the other hand, Germany have been
finding the back of the net with abandon,
humiliating Argentina 4-0 and England 4-1.
Total goal minutes (whereby you add up the
time each goal was scored during the match)
made up 233 in the Argentina match and 226
against England. Spreadex quotes total goal
minutes for the Germany-Spain match at 117-
127 so a buy at this price would be very prof-
itable if Germany continue to be as
free-scoring as they have been so far.
Jessica Mead
side, private payrolls did not grow by as
much as expected, only rising to 83,000
when a steeper growth of 112,000 was
expected by the markets. Overall, the non-
farm payrolls figure fell for the first time
this year and the US economy lost 125,000
jobs, but this had been expected by the mar-
ket. Unfortunately, all of the good news
from the fall in the unemployment rate has
been watered down by the weaker growth
in private sector jobs, which has led some in
the market to worry about the sustainabili-
ty of the US economic recovery.
 Lifestyle
22
Tequila’s birthplace
gives the drink a
whole new spin...
Chris Beanland went to Mexico to discover the fine art of
making – and enjoying – tequila. He’s a convert now
I
’M drinking Tequila for the first time
in years, as fingers of blazing
Mexican sun poke down between the
swaying branches of a shady tree. I
can’t quite believe that I’m sipping fire-
water on the lawn outside a picture post-
card 150 year-old hacienda – a Mexican
manor house – as I eat a splendid lunch of
tortilla soup, taquitos, quesadillas, barbe-
cued chicken and guacamole. Because
this isn’t how it’s supposed to be with
tequila, is it?
Rewind over a decade to the last time I
drank this much tequila in one go, and
things were slightly different. The stu-
dent me could barely cultivate a beard,
barely manage a feeble chat-up line, and
barely afford to buy a beer. The only way
round that was Leeds University’s highly
disreputable (and totally unofficial) week-
ly Tequila Night, where shots of the hard
stuff were £1 and a snog was a racing cer-
tainty. That said, a 2AM vomiting fit up
against a handsome Victorian civic build-
ing was equally likely.
THE TRIP
Yes, most of us associate tequila with
debauched nights on the tiles and
mediocre margaritas. But it doesn’t have
to be that way. I took a trip to Jalisco
state, Western Mexico’s rising capital of
gastro-tourism, where you can eat deli-
cious food, discover rich history and have
your preconceptions about tequila
turned on their head.
Jalisco state is where the conquistadors
who pillaged their way through New
Spain stumbled upon fields and fields of
agave plants – they look like
cacti, but in fact they’re dis-
tantly related to the lily.
A giant pine cone
under the prickly
leaves was the basis
for an alcoholic
concoction that
the native peoples
drank at religious
festivities. The
Spaniards worked
out how to culti-
vate the agave
plants and how to
distill a strong spirit
from it.
That drink began to
be mass-produced in the
1800s and eventually exported
to the US and Europe. Some called
it Mexican brandy or Mexican whisky, but
the name of the tiny town where all the
distilleries were centred was the name
that stuck – Tequila.
TEQUILA TOWN
My time on the tequila trail takes me to
this gorgeous and affluent little town
where crumbling old buildings are inter-
estingly juxtaposed with young Mexicans
sitting outside cafes using netbooks to lis-
ten to the latest dance music. So near to
the US and yet steeped in the past, Mexico
has a rich mix of cultures.
| Travel
I take a tour round the homes of the
two big boys of the tequila world – Sauza
and Jose Cuervo. These are the brands that
people recognise the most overseas and
the trips round both distilleries turn me
into an instant tequila expert. Each tour is
rather touristy, detailing the manufactur-
ing process of the drink and the history of
the company. It’s a worthwhile way to
spend an hour, but the real pleasure
comes, of course, in tasting – and with
each sip I begin to tell my blanco (young
tequila) from my anejo (aged).
CASA HERRDURA
But it’s the Casa Herradura (Spanish for
horseshoe) hacienda that
impresses – and not just the
lunch I enjoy in guilt-
inducing neo-colonial
splendour. This his-
toric hacienda is in
Amititan, just out-
side Tequila town
and in a quieter
spot. The old
buildings have
been preserved –
including a hidden
chapel where peo-
ple would shelter
and pray during the
turmoil of the 1910
Mexican Revolution.
The old ways of making
tequila persist here too – they
are more prissy about their product
and so from what I can tell, Herradura’s
offerings are exemplary. Reuben Aceves
Vidrio, the Casa’s English-speaking mar-
keting man, evangelises about this power-
ful tipple. He’s on a one-man mission to
tell the world that tequila doesn’t have to
be horrible, and he urges me to go forth
and spread the word to Britons brought
up on the nastiest exports.
As I sit in the sun on Herradura’s patio,
sipping the smoothest tequila I’ve ever
tasted (mixed into a delicious margarita
flavoured with tamarind) I begin to see
Aceves Vidrio’s point.
Left, an agave
plant, used to
make tequila.
Right:
Guadalajara, capi-
tal of Jalisco.
Pictures: GETTY
MEXICO’S TEQUILA STATE
THE TEQUILA TRAIL
“The government want this road to be like Route 27 in
Napa,” Casa Herredura’s Reuben Aceves Vidrio tells me as
we speed along the bumpy highway from Guadalajara to
Tequila and Amititan. Plans are afoot to build resorts galore
along here, so get to Jalisco before the tourists do. Driving
this road is an easy introduction to the Mexican countryside,
bronze rolling hills and roadside outdoor cafes serving super-
size margaritas to sweating drivers in ceramic mugs that
you can take away with you as a souvenir. Once you get to
the town of Tequila, stroll the old streets and be dazzled by
the brightly painted houses and quaint colonial square that
the Conquistadors built to remind them of their home vil-
lages on Spain.
GUADALAJARA
My base for this trip was Guadalajara. Mexico’s second city,
and it’s a far cry from the crime-filled streets of Culiacan,
Tijuana and Ciudad Juarez. There aren’t mines filled with the
bodies of dead drug dealers here. It’s a flourishing financial
and tech centre that sometimes looks like somewhere in
California – if you squint for long enough. Yet it has the
charm of a historic centre with churches and houses from
the Spanish period.
Guadalajara has the best hotels and restaurants in the
region – so it’s worth staying here. UNESCO has listed the
whole Tequila area as a World Heritage Site, and tourism is
set to shoot up round here in the years to come as resort
hotels, visitor centres, inns, restaurants and shops are all on
the drawing board.
Guadalajara is also the home of mariachi, and in many of
the bars in town you can watch elaborately dressed mariachi
bands and dancers putting on a show for the swaying
throngs.
WHERE TO STAY
NH Hotel
The modern and minimalist NH Guadalajara represents rich
new-money Mexico – it’s in the swishest district of
CITYA.M. 5 JULY 2010
Guadalajara where people drive souped-up Jeeps into
Scarface-style mansions surrounded by razor wire. It’s a safe
neighbourhood – there’s an al fresco bar and the hotel is one
block from Wall Street, a run of local bars. The high tower
rooms give great views across all of Jalisco. Rooms from
$103. Nh-hotels.com
WHERE TO STUFF YOURSELF
Santo Coyote
Santo Coyote in Guadalajara is touristy, but who cares? It’s
upmarket, fun, and the food is very good. Yes, they have
mariachi bands and traditional dance to entertain you as you
eat, but the lovely open courtyard, Mexican Malbec wines,
and fusion food win the day. Try guacamole made fresh at
your table, frijoles, steak or perch with pesto and peppers.
Santocoyote.com.mx
WHERE TO STAGGER
La Tequila
I ate deep-fried worms (not very tasty) and pork taquitos
(very tasty indeed) and drank cold beers at the swishest
hang-out in Guadalajara, La Tequila. It has a delectable roof
terrace, mixes a fine mimosa and serves excellent Mexcian
brews like Pacifico and Modelo too. Look out for the wine
cellar beneath a see-through floor by the front door.
Latequila.com
HOW TO GET THERE
Getting to Guadalajara offers interesting choices for a
stopover, depending on the time you have.
BA offers flights via New York. From there it’s on to part-
ner Mexicana’s plane to Monterrey and a quick change to
Guadalajara. This is the route I took, with prices starting
around £600.
Mexicana fles direct from Gatwick to Mexico City, fol-
lowed by an internal flight to Guadalajara.
You could also go via American Airlines’ Latin American
hub at Miami and then Mexico City to Guadalajara.
Mexicana.com.mx, BA.com, AA.com
CITYA.M. 5 JULY 2010 Lifestyle | Travel 23

Experience Paris TRAVEL NOTES

ZOE STRIMPEL

Macau Mandarin opens

and all that jazz For a different spin on Hong Kong, head to the
island of Macau, just 45 minutes by ferry from
central HK, where a brand new, super-luxe
Mandarin Oriental has just opened. For those
who fancy an idyll away from the intense gam-
ing of the former Portuguese colony, there is no
casino in the hotel. Instead, enjoy panoramic
views of Taipa Island, Nam Van Lake, Macau
Tower and the hills of the South China coastline.
The hotel has a holistic spa and its Vida Rica
restaurant and bar is the place to see and be
seen. From £187 per night. www.mandarinori-
ental.com/macau.

Ramsay goes detox in Tuscany

This summer sees the launch of a new Italian Diet Menu at the beautiful detox centre, Castel
Monastero. Not the most appealing name, but Gordon Ramsay and Angela Hartnett have
weighed in to formulate a menu that will satisfy as much as it helps you detox. Think dishes
such as herb-roasted chicken breast salad with toasted pistachio nuts and wild fennel dressing
and sea bass al cartoccio with zucchini, leeks and a touch of brandy. Wellness Program is
£1,163 (€1,300) per person for three days based on two sharing a double room. Tel: +39 0577
570001, www.castelmonastero.com.

Thailand’ s Koh Samui’s latest edition

Say hello to the island of Koh Samui’s newest luxury addition, the Banyan Tree, with 78 spa-
cious pool villas, iconic dining venues and Koh Samui’s first hydrotherapy spa, The Rainforest.
It’s a hydrothermal circuit, comprising alternating hot and cold thermal cabins, for couples to
embark on a trail of wellness treats. There’s a rain walk, aroma steam, Finnish sauna, bucket
drench shower, ice fountain, Swiss shower and vitality pool. Gorgeous restaurants complete
the experience. Introductory offer is £430 for a Deluxe Pool Villa per night with breakfast. To
book, call 00800 300 20000 or email reservations-samui@banyantree.com.

The Paris Jazz

Festival is the perfect
excuse for a summer
weekend break, says
Jennie Milsom
THE SUNDAY AL FRESCO VIBE
On Sunday morning, take the Métro to
Château de Vincennes, then devise a pic-
nic from the backstreets surrounding
Parc Floral (this is France, so arrive
before everything shuts up at midday).
For bread and pastries, there’s Papa
Gateau at the end of Rue de Montreuil
and a fabulous street market on Rue de
Fontenay. For summery tipples to take-
away, try Nicolas on Avenue du Château.
Top: Hotel Tremoille, a
favourite of Duke
Ellington, and above: a
jazz suite at the hotel.
@ @ @
MORE NEWS ONLINE
www.cityam.com

Follow the locals into the park, troop-

I
DON’T think you ever need an
excuse to spend a weekend in Paris
but how about a weekend of live
Discover Dundee
ing over the grass to the stadium with
their hampers, mats and provisions.
Find a sunny slope to recline on – we   

 
jazz in the city’s beautiful Parc arranged baguette, saucisson, strawber-   
  



 
Floral? Every weekend until 1 August ries and croissants on the grass over-
the park is hosting the Paris Jazz looking lily ponds – then let the music
   


Festival, a series of free outdoor concerts
at its stage beneath the trees. Promising
emerging new talent from Scandinavia,
Germany and Africa, there are only two
acts on each day but somehow that adds
to its easy charm.
Here’s what I’d suggest: pack light
and catch the Eurostar sometime on
Saturday morning. No need to rush
straight to the jazz – Sundays lend
themselves better to the chilled-out vibe
– so check into your hotel and head out-
doors (a ride in a bateau-mouche along
the Seine, perhaps, and check Paris Jazz
Club, www.parisjazzclub.net, for an
evening gig at one of the many venues
around the city).
 
do the rest.
Take a seat in the stadium, if you pre-
fer, and stretch your legs by venturing
off for an ice cream or wander through
patches of flowers and pine trees.
Then, as evening falls, head back
towards Gare du Nord and the colourful
bars along the canal (the number 46 bus
takes you straight there) to continue the
al fresco vibe. And if you can’t face
returning home in the Sunday night
frenzy, stay another night and catch the
first train back to work – you’ll be in from only for 2 people 2 nights in August
London by 8 o’clock.
All you have to do is remember to
brush the grass stains from your shirt
sleeves first.
£168 *
B&B
a saving of up to
20% on normal rates

 & "' #'

"
 %" #&# ' "! 
#%$  !" !  #"'  ! $ ! "  " ! 
MAKE A JAZZY WEEKEND OF IT '# ! "  
THE FESTIVAL Champs-Elysées and the banks of the Seine. Until 31 July  $   #! % "! " # ""!  !" ! !"'
 "     #!  #  "!  &#!$ "" " !#"!
The Paris Jazz Festival in Parc Floral de Paris runs until the hotel is offering an All That Jazz Package which
Sunday 1 August. The park is open 9.30am-8pm, entry is includes accommodation in a standard double room for two ( (($ /","- apexhotels.co.uk (+ %% 0844 875 5113

+" *.(- ", -! -(-% )+" (+   '" !- ,-2 (+  .%-, (' ' /'
€5. Concerts on Saturday and Sunday afternoons are free. with breakfast, a jazz cocktail and CD for €375. The restau- ).+!, ,", -, "'%.  ' + ,.#- -( )+(&(-"('% +((&
Métro Château de Vincennes (Line 1). See www.parisjaz- rant’s closed at weekends, so for steak frites with second /"%"%"-2  '(' +.'% )(,"- (+ -! .%% +,+/-"(' /%. ", +*."+ -
-! -"& ( (($"'  !' , '  & -( 2(.+ (($"'  .- + ,.#- -(
zfestival.fr for further details. For evening jazz gigs around helpings, head to nearby Le Relais de l’Entrecote (15 rue -+&, )1 +,+/, -! +" !- -( 0"-!+0 -!", (+ 0"-!(.- '(-" 4+
the city, see www.parisjazzclub.net Marbeuf) or visit one of the smart eateries nearby. /"%% -0'  '  (($ -!", (+ 2 -! .%2


", -2 ' - +  ", ,-2 ' - + - )1 (-%, ",   
2+, (+ .'+ - ' +"'$ (+ + 0!' "'"' ( (.+ $", &'. 0"-! '
WHERE TO STAY GETTING TO PARIS (&)'2"' )2"' .,- ,-2"' ' "'"' - -! !(-% !"%+'    -(

,-2 + .- )2 (+ %% &%, (',.& - -! !(-% (+ !"%+'   
A hotel with history. Hotel de la Tremoille Eurostar from London St Pancras International takes 2 ' (/ -! ('%"' (($"' ,.&&+2 0"%% ",)%2 ' "-"('% 3 )+ !"%
(www.tremoille.com) was buzzing with jazz in the 1960s – it hours 15 minutes and operates up to 18 daily services to )+ '" !- (+ +$,-
was a regular rendez-vous spot for Duke Ellington and Louis Paris. Return fares from £69. For tickets call 08432 186186 Apex Hotels (  ( #  ( #
Armstrong. Set in the 8th district, it’s moments from the or go to www.eurostar.com
 24 Lifestyle | TV& Games CITYA.M. 5 JULY 2010

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
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9pm Identity: New series. highlights from the house. News at 9
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10.35pm FILM Mad Max misconceptions about the body. BBC1, 9PM
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Beyond Thunderdome: Sci-fi 10pm Underage and Having 12.30am Cops in Crisis An update on serial killer Peter Tobin,
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SKY SPORTS 1 Bottom Line 12am WWE: Late 8pm My Fake Baby 9pm Britain’s 4.20am The Real Hustle on 2am Chris Barrie’s Massive
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7pm Celebrity Four Weddings
Next Top Model: New series.
Twenty-five finalists are taken to
the Fashion Academy. 10.30pm
Four Weddings US 11.30pm
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Can Dance 2.30am Nothing to
Declare 3am The Fresh Prince of
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Home Shopping
BBC THREE
7pm All New Total Wipeout
8pm Snog, Marry, Avoid?
8.30pm Hotter Than My
Daughter 9pm Gavin & Stacey
9.30pm Lee Nelson’s Well Good
Show 10pm EastEnders
10.30pm Bizarre ER 11.05pm
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Well Good Show 12.50am Snog,
Marry, Avoid? 1.20am Hotter
Than My Daughter 1.50am
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Holiday 5.20am-5.30am World Engines 3am World War Two in
Cup’s Most Shocking Moments HD Colour 3.50am Raging
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Jon and Kate Plus 8 9pm Make
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8pm Nostradamus: 500 Years embarrassing sexual questions.
Me 11pm Diagnosis X 12am
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Marked 11pm Nuremberg’s Deliver Me 2am Diagnosis X
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Investigator: Olly Steeds 11pm 4.20am Tru Calling 5.10am- and Krishna, born with their skulls
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COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
37 9 24 21 7 13
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 Sport
Pietersen and
Swann miss
Tigers ODIs
▲
CRICKET
BY FRANK DALLERES
ENGLAND selectors insist they
planned to rest out-of-sorts batsman
Kevin Pietersen for the forthcoming
one-day series against Bangladesh
even before he was struck by injury.
Three meetings with one of the
game’s lesser lights – the first of
which takes place on Thursday at
Trent Bridge – would have provided
Pietersen with the perfect chance to
plunder some confidence-boosting
runs.
But national chiefs remain uncon-
cerned by the former captain’s wait
for an ODI 50, which stretches back to
2008, and his average of barely 18 in
11 contests since returning from
Achilles surgery last year.
“We would have rested him,” said
selector Geoff Miller.
“We know what his qualities are.
Everybody is concerned when a batter
is not getting runs, similarly when a
bowler is not getting wickets or not
bowling well.
“But we know very well he is very
capable of getting big runs, and they
will be just round the corner.”
Pietersen suffered a thigh injury
fielding in Saturday’s ODI defeat to
Australia – the final match of a 3-2
series win – but had to bat with a run-
ner and was out for a duck.
He has been replaced in the squad
to face the Tigers by Warwickshire’s
Jonathan Trott, while Graeme Swann
is being rested, allowing Kent off-spin-
ner James Tredwell a chance to
impress.
England squad: A Strauss (c), C Kieswetter
(wkt), P Collingwood, E Morgan, I Bell, J
Trott, L Wright, T Bresnan, M Yardy, S
Broad, A Shahzad, J Anderson, J Tredwell
DEFOE THINKS CAPELLO IS FAB
STRIKER HAPPY ITALIAN HAS KEPT
ENGLAND MANAGER’S JOB: PAGE 26
PETACCHI PREVAILS
ITALIAN veteran Alessandro Petacchi survived a chaotic final 3,000m to claim the first
stage of the Tour de France – but British hope Mark Cavendish crashed out. Cavendish fell
in the first of three collisions – the last a huge pile-up – before Petacchi won a sprint fin-
ish into Brussels. Swiss Fabian Cancellara retained the yellow jersey.
25
Results
CRICKET
FRIENDS PROVIDENT T20 - NORTH DIVISION: Lancashire
v Derbyshire (Chesterfield); Lancashire 132-7 (G D Cross
65no) v Derbyshire 135-5 (G T Park 50). Derbyshire (2pts)
beat Lancashire by 5 wickets. Leicestershire v
Nottinghamshire (Grace Road); Leicestershire 182-3 (B J
Hodge 103, J W A Taylor 56no) v Nottinghamshire 185-3 (M
J Wood 61, A D Brown 55). Nottinghamshire (2pts) beat
Leicestershire by 7 wickets. Warwickshire v Yorkshire
(Headingley Carnegie); Warwickshire 155-8 v Yorkshire 121-
9 .Warwickshire (2pts) beat Yorkshire by 34 runs.
SOUTH DIVISION: Hampshire v Essex (Chelmsford);
Hampshire 161-6 (N Pothas 59) v Essex 163-7 (G W Flower
54). Essex (2pts) beat Hampshire by 3 wickets. Kent v
Gloucestershire (Canterbury); Kent 165-9 (M van Jaarsveld
59) v Gloucestershire 153. Kent (2pts) beat Gloucestershire
by 12 runs. Somerset v Middlesex (Taunton); Somerset 204-
5 (M E Trescothick 83) v Middlesex 125. Somerset (2pts)
beat Middlesex by 79 runs. Surrey v Glamorgan (Brit
Insurance Oval); Surrey 168-4 (M R Ramprakash 63no) v
Glamorgan 172-5 (T L Maynard 78no). Glamorgan (2pts)
beat Surrey by 5 wickets.
TOUR MATCH: England Lions v West Indies A (New Road);
England Lions 345 (R S Bopara 168, P D Trego 73, G C Tonge
4-69) v West Indies A 221 (K A Stoute 64, D M Bravo 62, P
D Trego 5-40, R S Bopara 4-43). England Lions beat West
Indies A by 124 runs.
RUGBY LEAGUE
ENGAGE SUPER LEAGUE
Bradford ......................................22 Hull ..............................................28
Castleford ...................................44 Huddersfield ............................18
Catalans Dragons.....................16 Wigan ........................................34
Crusaders RL .............................10 Warrington ..............................30
Wakefield.....................................14 Hull K R......................................46
TENNIS
ALL ENGLAND CH’SHIPS (Wimbledon)— —Men’s Singles Final:
(2) R Nadal (Spa) bt (12) T Berdych (Cze) 6-3 7-5 6-4. Mixed
Doubles Final: (2) L Paes (Ind) & C Black (Zim) bt (11) W
Moodie (Rsa) & L Raymond (USA) 6-4 7-6 (7-5). Boys Singles
Final: (13) M Fucsovics (Hun) bt B Mitchell (Aus) 6-4 6-4.
Boys Doubles Final: L Broady (Gbr) & T Farquharson (Gbr) bt
L Burton (Gbr) & G Morgan (Gbr) 7-6 (7-4) 6-4. Girls Doubles
Final: (4) T Babos (Hun) & S Stephens (USA) bt (1) I
Khromacheva (Rus) & E Svitolina (Ukr) 6-7 (7-9) 6-2 6-2.
SPORTS EDITOR JON COUCH
Picture: GETTY email sport@cityam.com
 26 Sport CITYA.M. 5 JULY 2010

Germany are ruthless once in front

OUR MAN IN SOUTH AFRICA
TREVOR STEVEN

D
IEGO MARADONA’S handball
against England in 1986 was an
extraordinary moment of pure
drama on which that match Vital moments (clockwise from top left):
hinged. Similarly, all four World Cup Julio Cesar’s blunder; Gyan’s extra-time
quarter-finals in South Africa had penalty miss; Casillas saves Spain’s
huge turning points. hopes; and Muller puts Germany ahead.
In Holland’s comeback win over Pictures: GETTY
Brazil it was the goalkeeping blunder
by Julio Cesar that tipped the balance
in the favour of the Dutch.
Uruguay’s thrilling penalty shoot-
out triumph over Ghana came after
Asamoah Gyan missed the chance to
score from the spot and send the
Africans through in the last minute
of extra-time.
A missed penalty was also pivotal
in Spain’s narrow victory over
Paraguay, Iker Casillas’s save from
Oscar Cardozo paving the way for the
European Champions to see off the
terrific South Americans.
And in Germany’s monumental
thrashing of Argentina, it was the Joachim Low’s men to pick them off Joking aside, I really don’t know Uruguay tomorrow and I fancy the financially-motivated or he has told
third-minute goal from Thomas on the counter-attack. what the matter is with him but at Dutch to succeed in that one. them he has a vision to rebuild the
Muller that rocked Diego Maradona’s It will be interesting to see what the moment they are only winning Diego Forlan has been magnificent team’s fortunes.
men before they had even got started. happens if they go behind against games when he is taken off. for the South Americans, a real leader Tactically it needs rethinking total-
The Germans keep getting their Spain in the semi-final, because I Despite this I still expect coach of men, but I think they will miss his ly, and we have to look to the Spanish
noses in front – they also scored early think if they take the lead again they Vicente del Bosque to stick with the suspended strike partner Luis Suarez, or more likely the Germans.
against England – and that is where will win. Liverpool forward against Germany even if only for the confidence his Capello can stick with a few of the
they are so strong. Spain have still got a major issue on Wednesday. David Villa has been presence in the team brings. older players for the Euro 2012 quali-
Going ahead forces the opposition with Fernando Torres, and it seems outstanding but might have an off- Back home and England chiefs fiers but he has to filter in some fresh
to come out and take more risks, that until he gets his hair dyed blond day at some stage. have made a mistake in deciding to quality – and if it isn’t there he has to
which sets up the game perfectly for again he will never be the same. First, however, Holland meet stick with Fabio Capello. Either it is say so.

Capello has been unlucky and we’d

be mad to get rid of him, says Defoe
WORLD CUP
2010
BY FRANK DALLERES
ENGLAND striker Jermain Defoe
insists the whole squad is unani-
mously behind manager Fabio
Capello after national chiefs decid-
ed to spare him the axe.
The Italian has taken much of
the blame for a disastrous World
Cup campaign and was made to
wait while his Club England pay-
masters weighed up whether to
keep him. But Capello has been
allowed the chance to make
amends at the 2012 European
Championships, a decision Defoe
firmly supports and is adamant his
colleagues will too.
“If you speak to the rest of the
players they will all say the same
thing, he’s a great manager and his
CV speaks for itself,” said Defoe.
“He’s got great ideas and he was
just a little bit unlucky I think, but
he’s a great manager. On record he
is one of the best managers in the
world and has been for a number of
years so I can’t see why we would
want to get rid of someone like that
– it doesn’t make sense.”
Capello has hinted he is ready to
make radical changes to England’s
ageing squad in the run-up to the
next major tournament.
But Defoe, 27, hopes he will not
be one of the players to make way
for new blood.
He added: “This season will be
big for a lot of players coming
through and hopefully they can get
in the squad and get as many caps
as possible before the next World
Cup. I’ll keep going, keep looking
after myself like I do, keep scoring
my goals and you never know.”

SPORT | IN BRIEF
Brazil axe boss Dunga
FOOTBALL: Brazil manager Dunga has
been sacked after failing to lead his
team beyond the quarter-finals of the
World Cup.
Dunga had said he planned to leave
the post after the tournament, but
Brazilian football chiefs made sure by
dismissing him and his staff.
A successor is expected to be
appointed by the end of the month,
with ex-AC Milan coach Leonardo
among the favourites.
Jimenez wins French play-off
GOLF: Spain’s Miguel Angel Jimenez
won a three-way play-off to claim the
Alstom French Open and boost his
Ryder Cup hopes.
Jimenez blew a two-shot lead by
finding the water at the 18th but beat
compatriot Alejandro Canizares and
Italian Francesco Molinari in a play-off.
Victory lifted the 46-year-old from
17th to sixth in the Ryder Cup race and
was his 10th since turning 40 – a
record for the European Tour.
Ronaldo fathers a son
FOOTBALL: Portugal star Cristiano
Ronaldo has become a father, he con-
firmed yesterday in a statement that
gave few details.
The 25-year-old said the baby boy’s
mother, who is not attached to
Ronaldo and thought to be American,
wished to remain anonymous and had
relinquished custody.
He said: “It is with great joy and
emotion that I inform I have recently
become a father to a baby boy.”
Bopara blows Windies away
CRICKET: Ravi Bopara made up for his
England snub by hitting 168 as the
Lions beat West Indies A by 124 runs
to reach the tri-series final.
Bopara – left out of the senior squad
for the forthcoming one-day series
with Bangladesh – struck 23 fours and
two sixes off 140 balls.
CITYA.M. 5 JULY 2010 Sport | Tennis 27

Supreme Nadal thrashes Berdych

to scoop second Wimbledon crown

Nadal (left) earned his eighth Grand Slam title with a straight-sets
win over Tomas Berdych (top), who could not claim another prize
scalp. The Spaniard celebrated with a forward roll (above).
Pictures: REUTERS, GETTY

WIMBLEDON
2010
BY FRANK DALLERES
WORLD No1 Rafael Nadal joked after
claiming his second Wimbledon sin-
gles title that he might fly to South
Africa to watch his native Spain play
in Sunday’s World Cup final.
They are not there yet – they face a
daunting semi-final with Germany
on Wednesday – but if they can
muster a performance of the authori-
ty, ruthlessness and sheer athleticism
that their countryman conjured
against Tomas Berdych yesterday
then they surely will be.
Nadal picked up against Berdych
where he left off against Andy
Murray on Friday, defying the Czech’s
reputation as a giant-killer to over-
whelm the 12th seed 6-3, 7-5, 6-4 and
take his tally of Grand Slam victories
to eight.
“I would love to be there [the World
Cup], it’s my favourite sport,” said the
24-year-old, who celebrated his win by
performing a forward roll across the
court. “I have to think. I don’t know,
it’s very far. I am a crazy fan of foot-
ball, and for sure a big supporter of
our team.”
Nadal’s success follows victory at
Roland Garros earlier this year and
means he has now completed the
French Open-Wimbledon double, for
so long considered the ultimate
achievement, twice in three years.
“How crazy is life?” he added. “It is
difficult but if you have experience
and a lot of matches on grass that
helps you.”
The Mallorcan’s first Wimbledon
title came in 2008 when he defeated
Roger Federer in an astonishing five-
set contest, and he admitted that
would always take some beating.
“It is difficult to say this one is
more special. The other one was more
dramatic in the way I won. So the first
title is always very, very special,” said
Nadal, who was injured last year.
“But for sure after a difficult year
for me to be back at my favourite
tournament and to finish with the
trophy is amazing for me.
“It was very difficult for me to be
back at my best after injury. But I did
it, so it is a very important and emo-
tional moment for me.”
Berdych upset top seed Roger
Federer and third seed Novak
Djokovic on his way to the final but
rarely troubled Nadal, who broke him
in the seventh game of the first set.
The Spaniard had to fend off break
points early in the second, but took
that too when Berdych’s nerve failed
him with a tie-break approaching.
Nadal wrapped up the win by again
striking at the decisive moment, forc-
ing championship point at 5-4 and
taking it with a vicious forehand
before collapsing to the turf.
The difference was that he took his
chances and I didn’t, admits Berdych
BEATEN finalist Tomas Berdych was
left to rue missed chances after failing
to pull off one last upset against Rafael
Nadal.
Berdych, who caused a stir by elimi-
nating Roger Federer and Novak
Djokovic on his path to the final, never
looked like beating the Spaniard.
The Czech 12th seed had chances to
break Nadal early in the second and
third sets but could not see them
through, and paid the ultimate price.
“The biggest difference between us
was when he got the chance he took
it,” said the 24-year-old, the first male
Czech finalist at Wimbledon since Ivan
Lendl lost to Pat Cash in 1987.
“He gave me chances in the second
and third sets and I couldn’t make the
break. It just shows how strong he is.”
Berdych has enjoyed an encouraging
spring, having reached the French
Open semi-finals, where he lost to
Robin Soderling, and is now close to
equalling his career-high world ranking
of nine.
“I’m climbing higher and higher but
I can still go a little bit more,” Berdych
added. “I just need more tournaments
and more matches. I need to grow up
a little, get a bit more experienced and
be more patient on court.”

Beaten Murray goes back to the drawing board

WIMBLEDON
2010
BY FRANK DALLERES
CRESTFALLEN Andy Murray is set to
take a few weeks off as he tries to fig-
ure out how to avoid becoming a
perennial Grand Slam nearly-man.
Murray’s latest bid to end his wait
for a major title died at Wimbledon
on Friday when eventual winner
Rafael Nadal overpowered him in
straight sets.
It was the fourth time the Briton
(right) had reached the last four of a
Grand Slam without going on to lift
the trophy, and the second year in
succession in front of a home crowd.
Now, with more than a month
until his next scheduled competitive
match, he plans to take a holiday in
North America to mull over how to
hone his game further.
One measure said to be under con-
sideration is ditching his “I’ll need to beat one or two of and it was nice to be back playing
coach, Miles Maclagan,
although Murray believes
the greatest players of all time if I
want to do it probably and I need
good tennis.”
The 23-year-old is not expected to
there are other steps he to get better if I want to do compete again until the Rogers Cup
needs to take. that. I’m hoping I’ve still in Toronto on 9 August, which will
“I need to believe, got quite a few years signal the beginning of his prepara-
that’s the most left at the top of the tion for the US Open, which begins
important thing,” game, playing great three weeks later.
he said yesterday. tennis. I need to go Murray has worked with Maclagan
“That’s what I’m work- away and work since 2007 but is said to be consider-
ing towards, but it hasn’t hap- harder and get bet- ing swapping him for Australian
pened yet and it’s not going to be ter. That’s all I can do. Darren Cahill, who has coached
given to me. It was a good tournament Andre Agassi and Lleyton Hewitt.
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