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FTSE 100 5,534.24 +7.52 DOW10,618.19 +11.33 NASDAQ 2,317.17 +17.12 /$ 1.60+0.01 / 1.11 unc /$ 1.44+0.01 Certified Distribution02/11/09 29/11/09 is 102,194

Boris: exodus from Cityto knock public finances

MAYOR Boris Johnson yesterday called

on the Treasury Select Committee tolaunch an urgent investigation intothe governments new tax on bankbonuses, which he said would serious-ly endanger the Citys position as acompetitive global financial centre.

The Mayors advisers predict up to9,000 bankers could leave the UK formore favourable jurisdictions due tothe so-called supertax, the new 50per cent income tax band, rules onnon-doms and a raft of damaging EUfinancial services regulation.

These salami-slicing, shortsightedproposals could potentially and per-manently damage the competitive-ness of London as a financial centre bydriving away the citys unique clusterof highly skilled people, ideas andexpertise, Johnson said.

City Hall said the exodus couldpotentially cost the economy over

1.2bn in lost tax revenues annually. Johnsons call to arms came as it

emerged that the Financial ServicesAuthority plans to force all bankers

earning over 1m to defer their bonus-es under its new remuneration code.Under the FSAs original plans, onlythose exerting a significant influ-ence over a bank would be affected,with those earning over 500,000 hav-ing to defer 60 per cent of their bonusover three years.

But the regulator has now widenedits net to ensure all bankers earningover 1m will be subject to the 60 percent bonus deferral.

JP Morgan will on Friday kick offthe annual results round at theworlds biggest banks, which are this year expected to pay out around40bn in compensation. The bank isexpected to hand out a record $29bn(18.1bn) in salary and bonuses,thanks to a resurgence in activity atits investment banking division.

JP MORGAN: PAGE 7

BY VICTORIA BATES

BANKING

MANCHESTER United said last nightit was seeking to raise 500mthrough a bond issue to alleviate its699m debt burden.

The Premiership club had beenexpected to raise 600m via a bondissue. Its finance arm will issue seniorsecured notes due 2017 to refinanceexisting debt secured against the club.

Last year Uniteds annual profit of72m was almost wiped out by inter-est payments of 69m.

Old Traffords owners, theAmerican Glazer family, bought theclub for 828m in May 2005, fundingone third of the deal with equity, onethird bank debt and one third with apayment-in-kind note.

Manager Sir Alex Ferguson hasdenied that the clubs debt pile hasaffected his spending on players. Since

the Glazers takeover of the club,Ferguson has spent a net 32m onnew players. He has claimed that hisreluctance to spend the record 80mUnited made from selling CristianoRonaldo to Real Madrid last summerwas purely because he couldnt seeany value in the market.

Last week the owner of ManchesterCity, Sheikh Mansour bin Zayed alNahyan, wrote off 304.9m of personalloans to the club to make it debt free.

BY JULIA KOLLEWE

SPORT

The Mayor says 9,000 bankers will quit London Picture: Micha Theiner/ CITY A.M.

CADBURY shares are set to jump thismorning after mounting talk lastnight that Ferrero could make a jointbid with Hershey for the British con-fectionery group.

Ferrero is thought to be working ona syndicated loan of about 3bn(2.8bn). According to an Italian news-paper, Mediobanca, which advises theItalian chocolate maker, has contactedother Italian banks Intesa Sanpaoloand UniCredit - in the hope of gettingup to five banks to lend between$750m and $1bn each.

Ferrero has until 2 February tomake a counterbid to an offer fromKraft, which Cadbury has rejected.Both Ferrero and US confectioner

Hershey are smaller than Cadbury andneed significant funding to launch anoffer. Ferrero declined to comment,reiterating a November statement thatit was assessing its options.

Cadbury sets out its final defenceagainst the Kraft bid tomorrow, fol-lowed by a trading update on Friday. Itis expected to attack Krafts stock priceperformance over the past few years.Kraft sold its North American pizza business to Swiss food group Nestlelast week, enabling it to improve the

cash component of its offer. Nestle hasruled itself out of the bidding.

Cadburys chairman launched yetanother fierce attack on Kraft yester-day. Roger Carr accused the US firm ofbeing run by its biggest shareholder,Warren Buffett, He said Buffetts oppo-sition to the bid and pressure from rat-ings agencies severely limited Kraftsability to improve its offer.

It has until 19 January to decide whether to raise its cash and sharesbid, which currently values Cadburyat 769p a share, or 10.5bn. Ferreroand Hershey are likely to wait untilthen before entering the fray.

Cadburys chief executive ToddStitzer has made it clear that the com-pany would prefer being taken over byHershey rather than Kraft because ofthe companies cultural similarities.

D-DAY LOOMSFOR CADBURYPHONEY WAR

BY JULIA KOLLEWECONSUMER GOODS

Cadbury chairman RogerCarr says Kraft is run byits biggest shareholder,Warren Buffett, whoopposes the firms bid.

www.cityam.comIssue 1,048 Monday 11 January 2010 FREE

Man United launches bondissue to help cut debt pile

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News2 CITYA.M. 11 JANUARY 2010

M&B talks to

rebel Lewis

PUBS group Mitchells & Butlers, which owns the All Bar One andHarvester chains, is thought to havebegun peace talks with rebel investorJoe Lewis.

The M&B board is this week expect-ed to offer to back some of the fourmen proposed as non-executive direc-tors by Lewis at a shareholder meetingat the end of the month, according toThe Guardian. In return, M&Bs largestshareholder is thought to havepledged to support existing non-execu-tive Tony Bates, who also faces a share-holder vote at the annual meeting on28 January. Last month there was a bit-ter falling out when M&B ousted fourdirectors two of them Lewisappointees accusing them of miscon-duct and plotting. The group has

brought an off icial complaint againstthe Bahamas-based billionaire curren-cy investor. A ruling by the TakeoverPanel is expected before the compa-nys annual shareholder meeting.

If a compromise between the twosides is reached, Lewis could even backM&B chairman Simon Laffin, who hasled hostilities against Lewis and othermajor shareholders and also faces ashareholder vote. However, until nowthe investor has made clear that hewants to see Laffin replaced by outgo-ing Debenhams chairman JohnLovering.

BY JULIA KOLLEWE

LEISURE

Britain needs to rediscover how to save

BELIEVE it or not but many forecastersare becoming more upbeat aboutBritains prospects for the coming year. HSBC, whose predictions arealways cautious, is expecting growthof 2.2 per cent, much higher than theconsensus; others are also becomingmore optimistic.

I remain more downbeat. But it isworth taking a look at some of thearguments for bullishness, if only toshow why they are not convincing. Itis true that in the first year after thelast three major downturns 1976,1982 and 1993 the economy grew by

2.6 per cent, 2.1 per cent and 2.2 percent respectively. Unfortunately, thepresent recession wasnt normal: itwas accompanied by unprecedentedmonetary reflation and an equally

extreme budget deficit. Both of thesepolicies need to be reversed, startingthis year; this will hit the recovery.

Budget deficits have often beentightened without too many problemsin the past and when deficits are sohigh, cutting them actually boostsgrowth but it is best that the processtakes place via spending cuts, not taxhikes. Unfortunately, we will be get-ting plenty of the latter. Meanwhile,ending quantitative easing, whileurgently necessary, will push up thecost of borrowing and could evenforce a sterling crisis if foreigninvestors refuse to buy our gilts.

The bulls are right on one point:much stronger credit growth is not aprerequisite for better GDP growth the economy accelerated for severalyears in the early 1990s before banklending started to recover, as Capital

Economics notes. And even if creditavailability remains constrained com-pared to 2007, access to loans remainseasier than it was in the 1970s or1980s, when credit markets were

under-developed and tied up in milesof red tape. Yet one of the biggest drags to

growth in the years ahead is that con-sumers will have to pay back moredebt. Sure, savings as a share ofincome shot up from an absurd -0.7per cent in the first quarter of 2008 toa more respectable 8.6 per cent in thethird quarter of 2009, leaving it aboveits long-run average of just under 8 percent. This is progress. But the rise has been driven by strong disposableincome growth, powered by ultra-lowinterest rates, rather than savage cutsin spending; as soon as mortgage ratesjump back, many will save less. Thesavings ratio also remains lower thanafter the previous recession.

Debt has fallen from 174 per cent ofUK households income to 155 percent but was just 105 per cent a

decade ago. Nobody knows what theright level of debt is but it is almostcertainly much lower than the pres-ent situation. Debt as a percentage ofhouseholds assets remain above the

early 1990s peak even though houseprices remain artificially high andcould tumble again in 2010.

All of this suggests the economy isset for years of paltry growth, with asecond, devastating crisis a possibilityif the public finances arent tackledsoon. It is far too soon for optimism.

CALMING DOWN AT LASTHere is an interesting though unscien-tific anecdote. I was a guest on JamesMaxs LBC radio show yesterday after-noon, where we spent an hour dis-cussing City bonuses but the callsand texts were less hostile to bankersthan on similar shows I took part inbefore Christmas. It may be that thetide of extreme, rabid hostility againstanybody who works in finance may beslowly turning. I certainly hope so.

[email protected]

THE government said great effortswere being made to keep roads andschools open, amid signs that thesevere wintry weather conditions areeasing. Nearly all motorways andtrunk roads will be open today, thegovernment said.

While it is not issuing any severeweather warnings at present, the Metoffice says snow, ice and low tempera-tures will persist in the next few days.

Councils need about 60,000 tonnesof salt a day and supplies are runningshort as the cold spell continues.They have had to focus on keepingmain routes clear of ice. Salt orderedfrom abroad will not arrive until 21January.

Secondary schools in England, Wales and Northern Ireland haveGCSE and A-level exams startingtoday, even though many were closedin recent days. School closures havebeen the main reason for a surge insnow-related workplace absenteeism.

BY JULIA KOLLEWE

TRANSPORT

Transport stalled by snow

THE main lenders to Japan Airlinesplan are ready to accept a restructur-ing package that would require thecarrier to file for bankruptcy increas-ing the likelihood of a state bailoutthis month.

A state-backed turnaround fund isundersood to be planning to establisha credit line of more than 600bn yen(4bn) along with a state-owned bankto ensure JAL can keep flying once abankruptcy is announced.

Reflecting growing concerns overthe potential fallout from a bankrupt-cy, reports said the government plansto tap diplomatic channels to reassurethe 35 or so countries to which JALflies that it would support the carrier.JAL, weighed down by $16bn (10bn) indebt and mired in losses, applied forstate funding for ailing companies.

Japan Airlinesapproachesbankrupt status

Ice and low temperatures are set to persist for the next few days Picture: PA

TRANSPORT

Joe Lewis has beenpressing for majorchanges at M&B,which has complainedabout his behaviour

EDITORS LETTER

ALLISTER HEATH

2ndFloor14-16 Dowgate HillLondon EC4R 2SUTel: 020 7015 1200 Fax: 020 7248 1729Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor Ben GriffithsNight Editor Katie HopePolitical Editor David CrowFeatures Editor Jeremy HazlehurstArt Director Darren SoulsbyPictures Alice Hepple

CommercialSales Director Jeremy SlatteryDeputy Sales Director Harry OwenHead of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found atwww.pcc.org.uk

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Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]

EU INVENTORIES LOW AMID RECOV-ERY DOUBTBusinesses are holding very low stocklevels and are reluctant to boostinventories, according to some ofEuropes leading chief executives providing evidence of lingeringdoubts about the durability of eco-nomic recovery. Business leadersfrom consumer goods, chemicals andmanufacturing companies have toldthe Financial Times that they have lit-tle idea of when demand will return.

EUROPEAN COMMISSION NOMINEESFACE GRILLING The European Union launches thefinal phase of building its new-lookleadership team today when legisla-tors start to grill 26 nominees to the

next European Commission to assesstheir suitability for office.

SHAREHOLDER DREAM OF THATCHERCOMES TRUE, SAYS ONSROne in six British families now ownsshares, according to the first ever offi-cial figures. The new estimates fromthe Office for National Statisticsappear to show that MargaretThatchers dream of creating a share-holder democracy has taken root. The ONS found that 15pc of Britishhouseholds 3.75m own someshares directly on the London stockmarket.

UK ECONOMY LIKELY TO BE DOWN-GRADED, WARNS INVESCOS NEILWOODFORTExpert investor Neil Woodford haswarned that the UK economy is notout of the woods and advised againstbuying banking stocks. Neil Woodfordof Invesco advised against buying

banking shares, saying the industrywas overvalued.

WHAT THE OTHER PAPERS SAY THIS MORNING

GOOGLE BOSS WARNS UK OVER DEBTMOUNTAIN The chief executive of Google, EricSchmidt, has given warning to the UKand other western governments thatreducing their massive deficits will be far harder than in Americabecause of the dollars status as theworlds reserve currency.

PET CHAIN SUITORS GIVEN FINALDEADLINE BY OWNERPotential buyers of Pets at Home havebeen given a final bid deadline of 25 January by the pet retailers privateequity owner Bridgepoint Capital.Sources close to the situation said thefirm would consider offers frominterested parties for the UKs fifthlargest pet retail chain. So far, buyoutfirms Bain Capital, KKR, Apax

Partners and TPG are thought to havemade bids in the region of 800m.

GUARDIAN READY TO THROW CASHAT EMAPThe Guardian Media Group and private-equity investor Apax havepledged to pump more money intoEmap, their jointly-owned businesspublisher, whose assets include theNursing Times and the Cannes LionsInternational Advertising festival. Thepair are gearing up to support anacquisition drive with fresh fundsafter rejecting proposals to relaxcovenants on Emaps 700m of debtbecause it would be too expensive.

BP TO SHUT GAS NETWORK DESPITERECORD DEMANDThe oil giant BP will pile the pressureon Britains stretched gas suppliestomorrow when it shuts down a largegas network in the North Sea. The

Southern North Sea pipeline systemwill be closed for a week.

TUC GETS MILLIONS FROM GOVERN-MENT FOREIGN AID POTThe Government is giving the TradesUnion Congress millions of poundsfrom its foreign aid budget to pay forthe education of British trade union-ists and to support advocacy work inBritain. The payments by theDepartment for InternationalDevelopment (DfID), which include a2.4m grant, are evidence of a deep-ening relationship between the DfIDand the TUC.

POUNDLAND SHRUGS OFF WOOLIESEFFECTPoundland, the discount retailer,enjoyed a bumper Christmas as shop-pers opted for value in stockingfillers, decorations and cards. Thegroup said that like-for-like sales dur-ing the five weeks to 3 January had

been up 4.4 per cent on the same peri-od last year.

TODAYTHE SUNDAYS

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GROWTH in Chinas exports andimports last month blew pastexpectations, figures yesterdayrevealed, providing fresh evidenceof the vigour of the economy andstrengthening the case for Beijingto let the yuan start climbing again.

Exports leapt 17.7 per cent froma year earlier, dwarfing the 4.0 percent rise forecast by economistsand breaking a 13-month streak of year-on-year declines; importssurged 55.9 per cent, much morethan the 31.0 per cent increasemarkets had expected.

The strong acceleration inimports may heighten the chancesof overheating and put more pres-sure for the government to tightenpolicy, said Wang Hu, an econo-

mist at Guotai Junan Securities inBeijing. Based on the trade data, heestimated industrial output inDecember grew by more than 25per cent from a year earlier andthat GDP growth in the fourthquarter exceeded 11 per cent.

Despite the leap in exports, theeven bigger jump in imports meantChinas trade surplus slipped to$18.4bn in December from $19.1bnin November and $39.0bn inDecember 2008. Economists hadexpected it to tick up to $19.6bn.

China was not the only Asianexporter to enjoy a dazzlingDecember. South Korea andTaiwan reported export growth of46.9 per cent and 33.7 per cent,respectively.

But China is far bigger, overtak-ing Germany as the worlds biggestexporter of goods in 2009. Its

booming investment and con-sumption are helping to rebalancethe world economy even thoughBeijing has refused to let the yuanrise against the dollar since theglobal financial crisis began inmid-2008, said Rob Subbaraman,chief Asia economist at Nomura inHong Kong.

Its imports of crude oil also hit amonthly record, while iron oreshipments were the second highestever and copper imports beatexpectations.

Booming Chinese demand willbe a boon for commodity exporterslike Australia, said Liu Nenghua, aneconomist with Bank ofCommunications in Shanghai.

It shows that China will contin-ue to play an important role indriving world economic growth,he said.

China tops forecastwith strong growthBYHARRY BANKS

WORLD ECONOMY

NEWS | IN BRIEF

Eurostar disruption continuesEurostar services between London andParis are still being affected by what itdescribed as severe weather condi-tions. Eurostar will run a restricted serv-ice today and urged passengers to cancelor postpone their trips if possible. Somelate evening services will be cancelled.

Disney services are running normally.Early morning and late night serviceswere also cancelled this weekend.

Banks lift salaries, cut bonusesMost banks have increased basicsalaries and cut bonuses for executivesin response to calls for leaner compensa-tion packages after the financial crisis,according to a survey by consultancyMercer. Four fifths of respondents in asurvey of 61 banks and other financialservices firms said they had made orplan to make changes to annual bonusesand short-term incentives.

House of Fraser celebrates salesOwn-brand labels helped departmentstore group House of Fraser to surgingChristmas sales. Like-for-like sales rose7.1 per cent in the eight weeks to 2January, following a 1.5 per cent fallduring the same period a year ago. Chief

executive John King said the figuresmeant House of Fraser was a festivewinner, putting it ahead of rival Nextand Marks & Spencers non-food unit.

RETAIL NEWS: PAGE 12Parts of the RBS branch network will be put up for sale Picture: GETTY

ROYAL Bank of Scotland (RBS) hasappointed UBS to advise on the sale ofmore than 300 branches, which isexpected to attract a flurry of interest.

A teaser document, detailing thebranches included in the sale, was cir-culated at the end of 2009. Potential bidders include National AustraliaBank, which owns Clydesdale and Yorkshire Banks in the UK, andSantander, the Spanish banking groupthat has acquired Abbey, Alliance &Leicester and Bradford & Bingley.

The sale process is at an early stageand an information memorandum is

still being finalised. The European Commission has

ordered RBS to sell more than 300branches in return for receiving bil-lions of pounds of aid from the UK gov-

ernment. The 84 per cent state-downed bank also has to sell its com-modities trading joint venture RBSSempra and its insurance operations,including Churchill and Direct Line.

Forced asset sales in the wake of thegovernment bailout of several majorUK banks are opening up retail bank-ing to new competition, as VirginMoney and Tesco are entering thebanking market.

Meanwhile RBS chief executiveStephen Hester is likely to face ques-tions over bonus figures today whenhe appears in front of the Treasuryselect committee.

Philip Dunne MP, a member of thePublic Accounts Committee, said RBSs

proposed bonus scheme meant thatRBS bankers would receive more gen-erous bonuses than bankers at ABN Amro, the Dutch bank which RBSbought for 10bn in 2007.

RBS hires advisersto prepare 300 of

its outlets for saleBY JULIA KOLLEWE

BANKING

ANALYSIS lHow Chinas economy is booming

Dec+55.9

Nov+26.7

Oct-6.4

Sep-3.5

Aug-17.0

Jul-14.9

Jun-13.2

May-25.2

Dec112.3

Nov94.6

Oct103.0

Sep88.0

Aug94.8

Jul87.2

Jun75.4

May78.8

Export and import growth (yr/yr % change)

Trade, in billions of dollars

Dec+17.7

Nov-1.2

Oct-13.8

Sep-15.2

Aug-23.4

Jul-23.0

Jun-21.4

May-26.4

Dec130.7

Nov113.7

Oct115.9

Sep103.7

Aug105.4

Jul95.4

Jun88.8

May91.9

Export and import growth (yr/yr % change)

Trade, in billions of dollars

Dec18.4

Nov19.1

Oct12.9

Sep15.7

Aug10.6

Jul8.2

Jun13.4

May13.1

Trade balance

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DAVID Cameron yesterday announceda raft of measures to help small busi-nesses, as he attempted to portray theTories as a party of entrepreneurship.

He said a Tory government wouldend the anti-aspiration culture thathad been fostered under Labour, byincreasing the insolvency thresholdand reducing the number of days ittakes to get a new business off theground.

Currently, the government can pur-

sue and make bankrupt companieswhich have unpaid taxes of over 750, but the Tories said they wouldincrease the threshold to 5,000immediately if they win the generalelection.

The insolvency threshold is cur-rently 750. We would lift that to5,000 because, when you look at thefigures, more small businesses havegone bankrupt in this recession thanin previous recessions and a numberhave been pushed there by the gov-

ernment itself, Cameron told BBC1sAndrew Marr show.

Conservative party sources said themeasure would be cost neutral,because the government would saveon welfare payments by protectingjobs that would otherwise be lost.

And the Tory leader said he wouldmake it easier for entrepreneurs tostart a new venture by cutting redtape and allowing them to registeronline.

It takes 13 to 14 days to start a newbusiness in this country, in Americaits half as long. We have the ambi-

tion of making us one of the fastestcountries in the world to start up anew business, Cameron said.

Cameron also said he would scraprules preventing people living insocial housing from starting a firmfrom home.

The message that seems to becoming out of Labour at the momentis dont start a business, dont buy your home, dont try and leavemoney to your children, dont try andget on. POLITICAL BETTING: P16

Tories unveilplans to helpsmall firms

David Cameron said he would cut red tape for small firms Pic: Micha Theiner/CITY A.M.

BYDAVID CROW

POLITICS

Politics4 CITYA.M. 11 JANUARY 2010

Tories to cut immigrationImmigration would fall by as much as75 per cent if the Conservatives winthe next general election, DavidCameron said yesterday. He said hewould use an annual cap to push netimmigration from around 200,000 inrecent years to the tens-of-thousands

last seen under the Thatcher andMajor governments. Im in favour ofimmigration, weve benefited fromimmigration, but I think the pres-sures particularly on our public serv-ices have been very great.

Cameron in deficit pledgeDavid Cameron yesterday made a firmcommitment to cut public debt fasterthan Labour. Gordon Browns plans tohalve the 178bn budget deficit with-in the next four years do not go farenough, Cameron said. We haventput a figure on it, but unlike the PrimeMinister I'm happy to sit in this chairand say Yes, there will be cuts, headded. But chief secretary to theTreasury Liam Byrne said: He said hewants deeper, faster cuts than Labourbut then deepened the mystery aboutwhere the cash would come from,Byrne said.

Ex-Labour supremo hits outGordon Browns premiership cameunder fire yet again yesterday, after aformer Labour Party treasurer saidNumber 10 had been reduced to ashambles in 2007 when Browndithered over an early election. PeterWatt, who stood down after the partyfunding scandal in 2007, also saidBrown lacked the emotional intelli-gence to win the next election.

ELECTION2010

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MARC Bolland will jet back early fromholiday to have crunch talks with WmMorrison about his departure date.

Soon-to-be new employer Marks &Spencer wants him to start as chiefexecutive as soon as possible butunder the terms of his contract theDutchman still has nine monthsnotice to work.

Morrisons is believed to have pre-ferred to concentrate on Christmastrading before entering what could bedifficult negotiations with Bolland.

Until Bolland begins his new term,

M&S cannot look for a replacementfor Sir Stuart Rose.

BANKS and securities traders expectprofits to flatten in the coming quar-ter, indicating weak short-term expec-tations among City players.

Sentiment across the Square Mile isdownbeat as the New Year gets under-way, according to a survey by the CBIand PricewaterhouseCoopers. Thereport found the majority of financialservices firms were concerned the booming business volumes seen inthe fourth quarter of 2009 would beunsustainable and that further cost-cutting would be necessary.

A balance of 13 per cent of finan-cial services firms said they expectedfalling business volumes this quarter the most negative response sinceDecember 2008. A balance of nine percent expected the slight uptick inbusiness with private clients to peterout, while an overwhelming balanceof 54 per cent said commission andtrading income would fall.

Income values in the banking sec-tor are forecast to drop, flatteningprofitability. Finance houses expectfurther shrinkage in business vol-

umes, although insurance brokersand life insurers were more positive.

Ian McCafferty, chief economicadviser at the CBI, said: The bouncein UK financial services activity overthe past six months is not expected tolast as we enter 2010. Firms see theirbusiness volumes falling back again,with no further improvement in prof-itability over the next three months.

John Hitchins, UK banking leaderat PwC, said the long-term outlookfor the banking sector remainedstrong but the immediate-term viewwas less encouraging.

He said: Activity in revenues areexpected to decline over the comingquarter, predictions for demandremain weak and an uncertain regu-latory future continues to temper thebanks growing confidence with cau-tion. On a positive note, the sectorreports growing headcount.

City gets New

Year jitters asoutlook dims

RUSSIAN tycoon Oleg Deripaska haspulled out of a deal struck in 2007 toacquire oil firm Russneft from itsfounder, Mikhail Gutseriyev.

The deal was reversed becauseDeripaska failed to win permissionfrom the Russian governments com-mission on foreign investment instrategic industries.

Approval from the commission,chaired by Russian prime ministerVladimir Putin, was necessary becauseDeripaska used offshore vehicles forthe deal. Last month, Deripaska,Russias most heavily indebted tycoon, wrapped up talks to restructure$16.8bn of debt for his firm UC Rusal,the worlds biggest aluminium pro-ducer. He wants to sell a 10 per centstake in Rusal this month.

Deripaska took a $2.7bn loan from

Sberbank to acquire Russneft fromGutseriyev for $3bn in 2007 when the businessman fled Russia chased bypolice over unpaid taxes.

The head of Russias anti-monopoly watchdog Igor Artemyev said thedeal's structure involved hundreds ofoffshore firms and the governmentscommission needed time to look intoit. The deals structure is thought tohave involved hundreds of offshorefirms.

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Oleg Deripaska cancels 2007deal to acquire Russneft firm

THE ousted boss of industrial investorLupus Capital has launched a secondattempt to be reinstated to the board.

Greg Hutchings was ejected as exec-utive chairman last July after thecompany breached part of a lendingagreement. He then made a failedeffort to rejoin in October. He hasrequested another extraordinarymeeting with an eye on the chiefexecutive post, it was reported yester-day. To succeed, Hutchings wouldneed 50 per cent of votes at the EGM.

Hutchings holds around an 11 per

cent stake in Lupus, having spentabout 9m buying its shares.

Ex-Lupus manin bid to rejoinBolland to startcrunch talks

BYOLIVER SHAH

BANKING

RETAIL

INVESTMENT

Deripaska is believed to be heavily in debt Picture:

BY JULIA KOLLEWEENERGY


PwCs John Hitchinssaid one positive wasgrowing headcount inbanking for the firsttime in two years

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INSOLVENCY services specialist Winterhill will today announce itsintention to raise 6m through an ini-tial public offering (IPO) on Londons

Aim market, as it seeks to capitaliseon the spate of corporate bankrupt-cies coming out of the recession.

Directors Andrew and NeilDuckworth, who founded asset valua-

tion and disposal firm WinterhillAsset in 1998, intend to use 3.5m ofthe monies raised to acquire corpo-rate debt recovery business Largo,renaming the combined entity

Winterhill Group.Neil Duckworth, who becomes

chief executive of the group, said:We are very busy at the moment the firm does well in a counter-cyclical

environment, when we tend to see aboom in corporate restructurings and

insolvencies coming out of recession.He added that the acquisition of

Largo will provide a platform for thebusiness to expand into non-insolven-cy based services such as assetappraisal and recovery.

Winterhill has also hiredCountrywide chairman Harry Hill asits new non-executive chairman andPaul Hancock a veteran of JP Morgan

and Bank of America as a non-execu-tive director.

Winterhill set to raise 6m in Aim float

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ALMOST all profits made by blue chip

FTSE 100 companies are generated out-side the UK, according to a report fromfinancial website, The Motley Fool,

which says the sluggish recovery of theUK economy will not affect the per-formance of blue chip shares.

The research shows 83 per cent ofFTSE profits are from overseas, with120bn of the 144bn of profits made

by blue chip companies last year from

outside of the UK. Motley Fool directorDavid Kuo says this means the FTSEshould not be seen as a barometer ofthe UK economy. He points to the dif-ference between UK GDP and the per-formance of the index. Between the

last quarter of 2008 and the third quar-ter of 2009, the UK economy contract-ed by five per cent, while the FTSE 100rose 18 per cent.

Investors betting on a global recov-ery can do so by exploiting the geo-graphic diversity of the FTSE 100index. The UK economy may struggleto recover from recession but itsunlikely to hold back the FTSE.

FTSE profits overseasBYRACHEL STEVENSON

FINANCIAL MARKETS

PRIVATE equity giant 3i has spotted araft of investment opportunities ininternational growth companies asthe world economy improves.

The firm is planning to raise 1bnfor a growth capital fund that wouldtake minority stakes in small caps.

The venture, first mentioned during3is half-year results in November,marks a move by chief executiveMichael Queen to bring the listed

buyout group back to its roots. A fundraising would be the first

time 3i has brought in significantexternal cash for growth capitalinvestment rather than using its own

balance sheet. It has 1.6bn of assetsin its growth capital portfolio but just28m of that is external money.

A source said the nascent economicrecovery meant growth companies

were now ripe for investment.As companies come out of reces-

sion theres going to be a big demandfor equity, the source said. Theyveall cut down on working capital andcapital expenditure and when wecome out of a period like that theresa big financing need.

Growth capital is 3is oldest busi-ness, but its investment in the areafell from 990m in 2008 to 343m last

year. The news comes a year afterPhilip Yea was ejected from the top

job as debts soared and shares fell.

3i to raise1bn forsmall caps

THE UK faces a currency and bondcrisis by 2016 if government expen-diture is not drastically cut, accord-ing to new findings by the Centrefor Economics and BusinessResearch (CEBR).

The current level of public spend-ing will fuel a slight acceleration ineconomic growth of around 0.25 percent for the next five years but willsqueeze out private investment inthe medium term.

Douglas McWilliams, chief execu-tive officer of CEBR, told City A.M.:The government hasnt got any seri-ous plans for decreasing publicspending.

If expenditure isnt cut, in thecoming years there will be a currencycrisis and possibly a bond crisis too.Private investment will be squeezedout and this is going to severely ham-per the economy by around 2016.

In the short term there will be anincrease in jobs and a slight increasein economic growth but this will beoutweighed by the eventual fall ininvestment.

When the government increasedspending they threw too much moneyin too quickly. Now they need to imme-diately start phasing a cut in publicexpenditure. Over the next 4-5 yearsthere needs to be a sharp reduction.

We estimate there needs to be aninitial cut of around 20bn a year,mounting to within the region of180bn being cut by 2016.

They could start by cutting payand cutting pensions. They canachieve plenty of reductions withouttouching services. But there are also alot of services that do not warrant the

current level of expenditure.Britains record budget deficitstands at more than 12 per cent ofGDP, the worst in the Group of 20nations.

UK spendingcould sparkbond crisis

London-listed blue chips derive most profit overseas Picture: Micha Theiner/CITY A.M.

BY STEVE DINNEEN

UK ECONOMY

BYVICTORIA BATES

FINANCIAL SERVICES

BYOLIVERSHAH

PRIVATE EQUITY


BROKER Daniel Stewart is acting asnominated adviser and broker toWinterhill on its upcoming placing.

Leading the team on the float isSimon Leathers, a director in corpo-rate finance at the firm for several

years. He will be backed up by relative

newcomer Emma Earl, who joined thebroker recently as a manager in cor-porate finance.

Landing the deal will come as awelcome piece of good news forDaniel Stewart, which has struggledover the course of the recession dueto the near-dearth of corporatefinance activity in the small cap sec-tor. In September, the firm reported a27 per cent drop in full year revenuesto 1.9m, though chief executive PeterShea said the group had noticed anuplift in underlying activity in all busi-ness areas in the second half as mar-

ket conditions begin to improve.

DANIEL STEWART

NOMINATED

ADVISER AND

BROKER TO

WINTERHILL

ANALYSIS l3i

250

260

270

280

290

300

31 Dec9 Dec19 Nov30 Oct12 Oct

p289.60

8 Jan

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Book in advance at virgintrains.com

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get things done at up to 125mph. And with flexible pricing to suit

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JP MORGAN Chase is set to defy callsfor restraint and pay out record bonus-es this week thanks to bumper invest-ment banking profits.

The US investment firm is expectedto pay compensation of $29bn (18bn)to its executives when it kicks off theannual banking results season onFriday. The pay-out is expected to be up28 per cent from last year, according toanalysts, partly due to a 50,000increase in staff after the firmacquired Bear Stearns and WashingtonMutual. JP Morgans 220,861 employ-ees are on track to earn an average$131,300 for the year, against $100,000in 2008, although its top investmentbankers will pocket far more.

Analysts reckon the worlds biggest banks will pay more than $65bn totheir staff over the next fortnight, indefiance of efforts by the US and UKgovernments to rein in bonuses. Jamie

Dimon, JP Morgans chairman andchief executive, has personally com-plained to chancellor Alistair Darling

over the new one-off 50 per cent tax on bonuses. The tax is also thought tohave prompted the bank to reconsiderplans to build a European headquar-ters in London.

Most banks in the City have saidthey would absorb all or part of thecost of Britains supertax, rather thancut back on remuneration.

JP Morgan received $25bn of govern-ment money under the TroubledAssets Relief Program last year, whichit has paid back. The bank is forecast toreport earnings per share growth of 62per cent in the fourth quarter of 2009,equivalent to profits of $2.7bn.

JPMorgan setfor bonus haulBYHARRY BANKS

TRANSPORT

REPORTED fraud in the UK broke the2bn barrier for the first time andcould treble over the next two years.

New research from business advis-ers BDO suggests that business andpublic sector fraud rocketed a stagger-ing 76 per cent last year with both thenumber and size of frauds increasing

dramatically.And it warns annual reported cor-

porate fraud could reach as high as5bn by 2012 as more deception isuncovered.

BDO says fraud will become harderto hide as companies battle againsttighter cashflow and focus on reduc-ing costs.

Last year saw the sharpest increasesince reports began seven years ago,with the average value of each fraud

now over 5m compared to 1.8m in2003.

Annual fraud breaks the 2bnbarrier and could treble soon

UK ECONOMY

THE taxpayer will be fully rewardedfor rescuing Northern Rock from thebrink of collapse, according to chair-man Ron Sandler.

But he claimed it was highlyunlikely the bank would be soldprior to the general election.

The government injected morethan 1.4bn restructuring the bank

earlier this month but now looks setto reap as much as 2bn when it issold.

The restructuring involved separat-ing Northern Rock plc, a 20bn, 76 branch operation, from NorthernRock (Asset Management), the badbank that contains around 80bn ofquestionable assets. The governmenthopes to attract bids for the goodbank in the lead-up to the election. Ittransferred Northern Rocks 350m

pension scheme into the bad bankpart of its business.Blackstone, the US private equity

firm, has been approached by SirRichard Bransons Virgin Moneyabout backing a renewed bid for thebank.

Whether the Asset Managementbusiness eventually realises its valuewill only become clear further downthe line when it is seen if mortgagesare converted into cash.

Taxpayer will be rewardedfor Northern Rock supportBY STEVE DINNEEN

BANKING


JPMorgan boss Jamie Dimon has protested against the bonus tax Picture: REUTERS

ANALYSIS lJPMorgan Chase

41

43

45

47

21Dec30Nov9Nov19Oct

$ 44.689 Jan

8/14/2019 CityAM 11/01/2010

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ceases to amaze. Religious readers outthere may wish to pop along at12.30pm today to St Lawrence Jewrychurch, next to the Guildhall, for anannual Plow Monday service with adifference. This service provides anopportunity to bless tools of the trade,

which traditionally involved a villageplough being brought to the churchdoor and blessed. But, as the churchsnewly-appointed vicar Canon DavidParrott explains, times have changed.

Were nowhere near a field in theCity so I thought it would be a goodidea to bless our basic working toolinstead technology, he tells me. Its

all part of wanting to ensure our serv-ices are fresh and lively for the City.

At the very least, this one will be anovelty Parrott will be asking thecongregation to raise theirBlackberrys, mobile phones and iPodsinto the air during the service inorder to be blessed.

WEIGHT WATCHERBeing a soft soul at heart, TheCapitalistis always touched by tales ofendeavour in aid of a good cause

and this one is right up with the bestof them.

Peter Thanni of accountancy firmKPMG is determined to give a helpinghand to the family of his erstwhilechum Ian Spiers who, having

worked in recruitment in the City for

nigh on 20 years, developed early-onset dementia last year in his earlyfifties and is now in a care home.

Thanni, weighing in at a hefty 18 st12.6 lb, will be putting himselfthrough a gruelling diet regime forthe next 40 days in the hope of raisingmoney for every pound lost.

For someone who loves their foodas much as I do, this will not be aneasy task, he jokes, but raisingmoney for Ians family will be just theinspiration I need to make the weightfall off.

Hes already joined a gym and Weightwatchers in preparation forhis ordeal, so for details on how tosponsor our slimming champion,email [email protected].

A BABY RAY OF LIGHT PENETRATESTHROUGH SNOWY SKIES OF GLOOMGLOOM, gloom and more gloom set-tles over us because of that drattedsnow dwindling grit supplies, anacute gas shortage, train cancella-tions, firms left in the lurch bysnowed-in staff, the spiralling eco-nomic cost for small businesses thelist goes on and on.

But there is hope on the horizon,according to a frisky little note thatarrives courtesy of usually sedate IHS

Global Insight economist and CityA.M. shadow Monetary PolicyCommittee member Howard Archer.

Yes, apparently theres anotherbenefit to the big freeze, apart fromthe seemingly endless snow dayscurrently being enjoyed by many anout-of-town-based City worker.

Of course, some sectors will benefitsuch as providers of thermal under-

wear, scarves, hats and other winter

clothes, writes Archer, the hint of amischievous twinkle in his eye. Andthere may also be a baby boom innine months time!

Definitely a reason to put out thebunting.

RELIGIOUS FERVOURThe ability of the Church of Englandto adapt to the modern world never

The snow isnt all doom and gloom, if it causes a baby boom as predicted Picture: GETTY

The Capitalist8 CITYA.M. 11 JANUARY 2010

EDITED BY

VICTORIA BATESGOT A STORY? [email protected]

St Lawrence Jewry hosts a tech service today

BILL OF THE WEEK

A NEW gastronomic haunt to gracethe column this week, as this group ofdiners headed off to restaurant, barand entertainment venue Circus inthe West End.

After a magnum of Laurent Perrierto kick off the evening, they enjoyedstarters of langoustines and pulledpork, mains of Cajun tuna, filletsteak and schnitzel, and rich cheese-cake and panna cotta for dessert.

Four bottles of wine and numer-ous gin, rum, sambuca and amaret-to cocktails later, Im told our tipsy

diners were all too keen to join inthe dancing on the tables

8/14/2019 CityAM 11/01/2010

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8/14/2019 CityAM 11/01/2010

12/28


The Postgraduate Study & MBA Fairfrom The Careers Group

FREETO

ATTEND

DIRECTORS at Britains largest bankshave been warned against tarnishingtheir reputations by developingschemes to exempt top earners fromhigher income tax.

The Association of British Insurers,whose members own nearly a fifth ofthe stockmarket, said it would not

be able to approve salary structures

that focused on avoiding the forth-coming 50 per cent tax band insteadof encouraging long-term strategy.

The ABI has written to the remu-neration committees of FTSE350 com-panies urging them to review the waythey reward staff. Shareholders donot want to see bonuses paid out

when performance has been excep-tionally poor, the ABI said, or to seeexecutives handed windfall gains ifshare option multiples are main-

tained after a companys shares tank.The warning follows growing con-cerns that a culture of risk-taking andexcessive remuneration is alreadyreturning to the City. Firms arethought to be restructuring salariesover 150,000 as capital gains aheadof the new tax rate in April.

Peter Montagnon, director forinvestment at the ABI said: We donot expect shareholders to pay toreduce employees tax burdens.

ABI calls for restraint onexecutive pay packages

The ABIs Peter Montagnon says shareholders should not fund employees tax burdens

BYOLIVERSHAHCORPORATE GOVERNANCE

Former AIG boss blamesGoldman for its collapse

THE former head of AmericanInternational Group is urging a closerlook at the actions of Goldman Sachs,claiming the investment bank con-tributed to the insurers near-collapse,the Wall Street Journal reported this

weekend.Maurice Hank Greenberg, former

chief executive of AIG, said in an inter-view he believed not enough attentionwas being paid to the role GoldmanSachs played in the subprime melt-down. Well, it certainly wouldnt bedifficult to come to that conclusion,Greenberg said.

Goldman Sachs shot back atGreenberg, who based some of his

accusations on articles in the NewYork Times, the Washington Post andother news outlets.

Anyone, including Mr Greenberg, who relies on news reports ratherthan facts to form an opinion, particu-larly of a complicated subject, has a

very high probability of reaching thewrong conclusion, a spokesman said.

AIG had to be propped up withsome $180bn in taxpayer support afterit nearly collapsed in September 2008.

The US government now owns nearly80 per cent of the company, once the

worlds largest insurer by marketvalue.

The government stepped in to res-cue AIG after it ran short of funds tomeet collateral demands from banksthat had paid for credit protection.

BYHARRY BANKS

INSURANCE

NEWS | IN BRIEF

Collins Stewart eyes IngramTim Ingram, chief executive of Caledoniainvestment trust, has been tipped as anew non-executive director at CollinsStewart. The company is looking torecruit two new board members afterTerry Smith, its current chairman,announced his intention to step downfrom the role. Ingram, former managingdirector of Abbey National, has runCaledonia since 2002 and is also a non-

executive at Sage and Savills.

Goodyear turns down UsmanovCharles Chip Goodyear, the formerchief executive of FTSE 100 mininggroup BHP Billiton, has turned down areturn to the sector with Metalloinvest the steel group founded by Russian bil-lionaire Alisher Usmanov. Goodyear isunderstood to have been approachedbefore Christmas but rejected an offer.

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IN A BOUT of not-particularly-investigative

journalism, I set Tesco a mystery shopperchallenge last week, ordering a hefty shopbe delivered to my home just as the heaviest

snow was due to fall. Right on time two cheerfulchaps showed up without even a word of com-plaint about the weather. Impressive.

Well have to wait until tomorrow for Tescos

numbers (and my snow-shop experiment wontregister for several more months) but in themeantime we have heard from several otherretailers who proved that forecasts of the non-weather variety are key.

Earnings have looked pretty strong for thelikes of Next, J Sainsbury and Marks & Spencer,but the shares of Next and Marks suffered horri-bly at the hands of the dreaded cautious outlook.

When CNBC spoke to M&S CFO Ian Dyson, hevoiced concerns about UK unemployment thisyear and the end of the VAT holiday, adding thatthe company remains focussed on cutting costs.But that was the theme of the past two earningsseasons and the question now is how muchmore can costs possibly be cut.

Meanwhile, Next explicitly cautioned againstreading too much into strong sales in the lastweeks of 2009, pointing out we shouldnt bankon that trend continuing this year.

Sainsburys, though, reported sales for thequarter up a better-than-expected 4.2 per cent,plus signs of a return towards high-end foods,and John Lewis reported its best ever Christmastrading. In an upbeat statement, low-cost fash-

ion chain New Look told us its like-for-like saleshave gained 5.9 per cent and said it is optimisticenough that it plans to double the size of itsstores in the long term.

Despite a few signs of optimism, it looks likeUK growth is set to remain sluggish and the bigretailers will have to carry on battling it out formarket share. It will get interesting when salesstart to pick up. Who will be in the strongestposition to move back into growth mode afterthis downturn?

Finally, Id just like to point out, in case myboss is reading, that I didnt put my Tesco shop-ping on expenses, nor am I limiting the experi-ment to one retailer. Come the next flood,

earthquake or plague of locusts I shall put theother retailers to the test. Beware.Rebecca Meehan co-anchors Capital Connection and isa presenter on Squawk Box Europe each weekday onCNBC. SPREAD BETTING: P16-17


ENTREPRENEUR Hugh Osmond will this week announce plans tofloat a 500m turnaround vehicleon the London Stock Exchange.

The Horizon fund, expected tolist before the end of January, willtarget one large investment in a

consumer-facing business. Advisersfrom Osmonds private equity firmSun Capital have drawn up a longlist of prospective companies whichwere bought out at the peak of theM&A boom but now need refinanc-ing.

The aim will be to find a good

quality business whose cashflowsare being diverted to service hugedebts, restricting its ability toinvest. It is understood that book-maker and bingo hall group GalaCoral, where equity has been wipedout and control has passed to thecompanys creditors, is the type ofinvestment being considered.

A source said the Sun Capital

team was running the rule over anumber of privately held compa-nies. The final candidate will havean enterprise value of between1bn and 5bn and could be a con-sumer-facing business with a small-er financial services arm.

An insider said: The problem is

that companies were bought out inthe run-up to 2007 with high lever-age on the expectation that 2007sEBITDA [earnings] would be repeat-ed, and clearly that didnt happen...Horizon is going to solve the prob-lems of one such business.

Fundraising is understood to beat an advanced stage after a seriesof meetings with institutional

investors in December.Osmond will take a key role inthe venture. Mike Fairey, formerdeputy chief executive of LloydsTSB, will serve as chairman whileTerry Eccles and Baroness Kingsmillhave been hired as non-executivedirectors.

Osmond launches500m buyout fundBYOLIVERSHAH

PRIVATE EQUITY

COMPANIES will have to carry outfurther write-downs of poorly per-forming assets this year as the glob-al economy struggles to recover,according to investors, analysts and

lenders surveyed by Ernst & Young. The survey of 170 global firms

showed that nearly half of thosequestioned believe the level ofimpairment charges reported sincethe financial crisis began is lowerthan they expected.

E&Y said its respondents aresceptical about the size of impair-

ments being published so far andare bracing themselves for further

write-downs in 2010. The realestate, banking and capital mar-kets, and automotive sectors arethought likely to experience fur-ther impairment charges this year.

The firm says valuing businessesand their underlying assets is

more challenging today than atany other time in recent history.

Flurry of impairment charges loomsACCOUNTING

Osmond is serialentrepreneurwith a host ofsuccessful busi-ness ventures tohis name

Picture:REUTERS

NEWS | IN BRIEF

Ex-Betonsports boss to serve timeThe former chief executive of Betonsports,

the defunct online gambling site, has beensentenced to nearly three years in prison.David Carruthers was arrested in Texas inJuly 2006, and pleaded guilty to racketeer-ing charges linked to the company's opera-

tions in the US, where online gambling isillegal. Carruthers was ordered to spend 33

months in prison by a court in Missouri.Last year, Betonsports founder GaryKaplan was sentenced to more than fouryears in prison after agreeing to forfeitmore than $43m.

Outlook continues to present challenges for retail

CNBC COMMENT

REBECCA MEEHAN

HUGH OSMOND'SPREVIOUS DEALS:

Pizza Express reversetakeover (1993)

Bass turned intoPunch Taverns (1997)

Allied Domecqbuyout (1999)

Pearl Groupmajority stake (2005)

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TESCO is being tipped for a like-for-likesales hike of up to four per cent whenit issues its trading update tomorrow.

The figures are expected to reflect ahealthy seasonal boost as customerssplashed out over the holiday.

Analysts predict that the supermar-ket chains doubling of Clubcardpoints over the period would help tosecure a positive result.

The Tesco trading statement comesafter an upbeat data from rival

J Sainsbury last week which revealed a3.8 per cent sales rise.

However, the messages remainedmixed on the high street with Marks &Spencer only recording a marginal 0.8per cent increase while Waitrose saw anine per cent boost in to sales.

Nick Raynor, investment adviser atretail stockbroker The Share Centre,said: The recent cold snap may also

boost sales as consumers look to stockup on winter essentials.

As the first food retailer to releasefigures in 2010, Tesco will be setting

the pace for others to follow.Tesco, which has nearly 2,300 shops

in the UK and 4,308 worldwide, isBritains largest retailer.

Debenhams will also give a tradingupdate this week in another indicatorof how the high street is performing.

And Home Retail, owner of Argos andHomebase, will also update on trad-ing. Figures for quarter three of the

year showed growth and the market isexpecting a further boost.

Jeremy Batstone-Carr of CharlesStanley said: The picture on the highstreet has been one of mixed messagesall round.

Tesco in line

for sales hikeBY JOHN DUNNE

RETAIL

BUDGET fashion chain Peacocksadded to signs of a robust Christmasfor Britains retailers, helped by its tie-up with singer-turned-designer PearlLowe, and yesterday said it planned tostep up its expansion.

The firm, taken private in 2005 by aconsortium including US hedge fundsPerry Capital and Och-Ziff, said salesat stores open at least a year rose eight

per cent in the eight weeks to 2January, including 17 per cent growthfrom December. Peacocks said itplanned to open around 40 stores in2010-11, up from around 30 in 2009-10.

Peacocks, which currently tradesfrom 546 stores in Britain and also has84 franchises abroad, reported strongdemand online and for a range ofdresses produced in collaboration

with Lowe. The group said it plannedfurther ranges with Lowe for the

Spring/ Summer season.Peacocks adds to a growing list ofBritish retailers, including fashionchain Next, grocer J Sainsbury anddepartment store group John Lewis,to report strong Christmas sales.

However, shopkeepers have alsosounded a cautious tone about thecoming year, warning that steps to cutgovernment debt likely to includehigher taxes and lower public spend-ing could dent a consumer recovery.

Peacocks fashion expansionafter strong Christmas tradeRETAIL

A tie-up with Pearl Lowe has lured shoppers to Peacocks tills Picture: NEWSCAST

Retail News12 CITYA.M. 11 JANUARY 2010

ANALYST VIEWS: HOW DO YOU EXPECT TESCOTO HAVE PERFORMED THIS TIME? Interviews by John Dunne

JONATHAN PRITCHARD | ORIEL SECURITIES

I see the figures being as much as four per cent up on last

year. The Clubcard doubling of points has made a big difference and Icannot see any reason why the figures should not follow the trend ofSainsburys and be significantly up.

KEITH BOWMAN | HARGREAVES LANSDOWN

These figures will be all about the UK core business. The com-pany will be analysing the impact of its clubcard after it doubled its dis-counts. We have to remember though that all of the retail sector is underpressure and some believe Christmas could have been a last binge forcustomers facing a tough time next year.

JEREMY BATSTONE-CARR | CHARLES STANLEY

We must remember that the retail sector is still struggling andits too early to predict whether its going to be a good year.The picture on the high street has been mixed with Waitrose last weekeclipsing Marks & Spencer with a nine per cent rise compared with just0.8 per cent.

ANALYSIS lTesco

370

380

390

400

410

420

430


p415.95

8 Jan

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BEST OF THE BROKERS

ANALYSIS lTed Baker

400

420

440

460

480

500

520

31 Dec9 Dec19 Nov30 Oct

p 516.00

8 Jan

TED BAKERSinger Capital maintains a buy rating forTed Baker after strong trading from 1November to 24 December. Retail salesgrowth for this period was 19.1 per centand trading was up 14.3 per cent year-on-year. It says Ted Bakers collections aredoing well and has revised its target pricefrom 505p to around 530p.

ANALYSIS lMitchells & Butler

230

240

250

260

270

31 Dec9 Dec19 Nov30 Oct

p

273.708 Jan

MITCHELLS & BUTLERSAstaire rates pub group Mitchells & Butlersa buy, despite the likelihood of an event-ful annual general meeting on 28 Januarybecause of its dispute with Elpida andPiedmont. Christmas trading was strong,and was up 4.9 per cent over the 10 daysof Christmas. It adds that London and resi-dential pubs performed strongly.

ANALYSIS lAberdeen

125

130

135

140

145


p134.00

8 Jan

ABERDEEN ASSET MANAGEMENTEvolution retains a neutral recommenda-tion for Aberdeen Asset Management,which is acquiring 13.5bn of funds undermanagement from Royal Bank of Scotlandfor 84.7m. Although the assets are beingbought for less than one per cent of fundsunder management, 84m shares are set tobe placed to fund the acquisition.

To appear in Best of the Brokers email your research to [email protected]

CITY office rents rose for the firsttime in three years at the end of 2009,boosting confidence that office rentshave bottomed out.

A report from Cushman &Wakefield reveals 41 per cent of the years total take-up of office spacetook place in the last quarter of 2009.

The take-up of 2.6m sq ft across thecapital is the highest quarterly figuresince the collapse of Lehman Brothersin 2007. The Square Mile saw its firstrental growth in three years, withprime rents rising 3.5 per cent to 44per sq ft, up from 42.50 per sq f t.

London office rents hit their lowestpoint in the last quarter of the year,with prices on prime space standingat 75 per sq ft in the West End.

Speculative development activity,however, has fallen markedly and atthe end of December there was just5m sq ft under construction in thecapital. This is down by 42 per centcompared with 12 months ago.

BlackRock announced it will snapup one of the few new buildings in theCity. It will occupy occupy Canary Wharf Group and ExemplarProperties 270,000 square foot officetower at Drapers Gardens. It will payabout 50 a sq ft on a 25-year lease.

Other key deals that happenedtowards the end of the year includedlaw firms Clyde & Co taking 145,000 sqft at St Botolphs, and Pinsent Masonstaking 189,000 sq ft at Crown Place.

Central London has an overallvacancy rate of 8.5 per cent. In the lastrecession, the peak vacancy rate wasnearly 17 per cent.

C&W City office manager JamesYoung said: We turned the corner inthe third quarter and in the fourthquarter we have seen a number ofmajor transactions that have boostedthe annual take-up.

Companies who have been bidingtheir time on buying new space willsee Blackrocks new deal and realisethere is a narrowing window. Thegreat deals we are seeing wont behere forever.

City rents upfor first timesince 2007BYRACHEL STEVENSON ANDSTEVE DINNEENPROPERTY

Balanced debate is needed on future of banking

AS PEOPLE from across the City

brave the wintry conditions letus hope that policy makers canhelp provide a brighter forecast

for the financial services industryover the coming year.

The past 12 months have seen the business environment in a state ofalmost constant flux. A series of

measures most notably the bonussupertax and 50p income tax topband caused widespread discontentacross the City.

Despite this London is still home to

unrivalled pools of talent and capital,with around 250 overseas banks bas-ing operations in the Square Mile.However, the ongoing uncertaintysurrounding the UK is only benefit-ing our rivals as firms weigh up theiroptions.

We are fast approaching a tippingpoint where further changes to regu-lation and taxation could begin toseriously undermine our competitive-ness and ability to attract top talent.

Driving away the internationallymobile parts of the financial servicesindustry would have a disastrouseffect on the country as a whole. The

sectors importance to the widereconomy is highlighted by how it gen-erated 12.1 per cent of total tax rev-enues in 2008/09. Goldman Sachsalone paid 1.1bn in corporation tax

last year, while its 5,000 London staffcontributed hundreds of millions ofpounds in income and indirect taxes.

This is money that can ill afford tobe lost given the precarious state ofthe public finances.

We all acknowledge the real angerthat exists as a result of the financialcrisis, particularly when it comes tobankers remuneration. However, inmost cases high levels of pay reflectthe high levels of wealth generated bypeople working in the industry.

This is precisely why we must notdamage the UKs competitiveness bysignalling that we do not welcome

talented individuals and institutionsfrom across the world. Only by retain-ing, and indeed building upon, theCitys reputation for being home toan unrivalled cluster of professional

skills will we be able to face up to thechallenge from emerging and estab-lished centres.

In order to achieve this, however,we need a level playing field when itcomes to regulation and taxation. Ifthe UK instead continues to ignorethe G20 principles by adopting apiecemeal, isolated approach the sub-sequent exodus of talent will slow anyeconomic recovery.

The government could make agood start to restoring consistency,clarity and confidence to the businessenvironment by making it clear thatthe bonus supertax will not be repeat-

ed again in future. This exceptionalmeasure was described as a one-offand it must remain that way.

We cannot allow huge pay differen-tials to arise between staff working in

London and other global financialcentres. This makes transparency onpay all the more important as keyindustry players decide whether tocommit their future to London andthe UK.

As we move into 2010, let us hopethat we can leave behind the pre-elec-tion political point scoring in favourof a more productive, balanceddebate on the future of the industry.It is now time for policy makers tooblige.

Stuart Fraser is Chairman of the Policyand Resources Committee at the City ofLondon Corporation.

CITY COMMENT

STUART FRASER

UniCreditEmmanuel Pezier is to join UniCreditscorporate and investment banking as amanaging director for the financialinstitutions group (FIG) and financial

sponsors in equity capital markets.Prior to his appointment at

UniCredit, Pezier was a principal andpartner at alternative asset managerACP, where he was responsible for rais-ing capital for its various funds and

managed vehicles.He also previously worked as head of

equity capital markets at Bear Stearnsfrom 2004 to 2007.

WSP Environment & EnergyThe risk solutions provider has hired DrIsabel Boira-Segarra as a director incharge of its renewable energy team,based in London.

Boira-Segarra has joined as a renew-able services director from MottMacDonald, where she was mostrecently head of its renewable energyteam.

She has 13 years of experience inthe renewables industry, having advisedon numerous complex infrastructureprojects worldwide.

Pinsent MasonsThe law firm has poached MatthewMorgan from rival DLA Piper to lead itsbanking team in Manchester.

Morgan has been a partner at DLAPiper for the past five years and hasbeen a key adviser to the likes of RBS,Barclays and HSBC.

He has also worked on some of thelargest corporate projects in the regionin recent years, including discountretailer Matalans 817m public-to-pri-vate transaction and the renegotiationof banking facilities for car dealershipLookers.

Santander Corporate BankingThe bank has hired Mark Lonsdale as adirector for trade finance in the North

of England region.Lonsdale has 22 years of experience

in commercial and corporate banking,having previously worked at Barclaysas director of trade finance in theNorth.

Coutts & CoThe private bank has appointed IanCopley as a senior private banker,based in its Leeds office.

Copley joins from Bank of ScotlandInvestment Service and brings withhim over 20 years of experience withinthe financial sector, latterly advisingprivate banking clients on their person-al wealth management. Prior to that, heheld the role of head of training, recruit-ment and professional development.

CITY MOVES | WHOS SWITCHING JOBSEdited by Victoria Bates

To appear in CITYMOVESplease email your career updates and pictures to [email protected]

Office of Fair TradingThe consumer watchdog has appointedSheldon Mills, a senior associate at law firm SJBerwin, as its new director of mergers, effec-tive from 15 February. Mills joined SJ Berwin in2006 from rival Jones Day.

Simon Holmes, head of EU and competitionat SJ Berwin, said: While we will miss him,Mills appointment is a credit to the excellentmerger experience he has had over the last fewyears.

THE chief whistleblower in the UBStax secrecy probe has entered prison toserve a sentence he considered unfair,hours after a Swiss court ruled thebank should not have been forced toturn over client files to investigators.

Bradley Birkenfeld, a former UBS banker, entered a federal prison in

Pennsylvania to serve a 40-monthprison term, after attacking the gov-ernment for the punishment in lightof what he called his cooperation inhelping expose thousands of US taxcheats. The American taxpayershould be outraged, the 44-year-oldtold reporters in a snowstorm as heprepared to surrender to prisonauthorities. He said he was proud to

have come forward and expose thelargest tax fraud in the world.

Last February, UBS accepted a$780m (486.7m) penalty and admit-ted to criminal wrongdoing for help-ing US taxpayers hide accounts fromthe Internal Revenue Service. TheSwiss bank later agreed to give thenames of 4,450 American clients togovernment investigators.

UBS whistleblower begins jail sentenceBANKING

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Analysis14 CITYA.M. 11 JANUARY 2010WORDS BY DAVID CROW

E-book readers, 3D TVs and tabletPCs compete to be top dog of 2010The consumerelectronics show inLas Vegas last weekset the agenda fortechnology in 2010

HYPE and prototypes dominated theConsumer Electronics Show (CES) inLas Vegas last week. From the Fordcar that lets you send Twitter mes-

sages while driving, to the scuba divingmask that can shoot high definition videoat depths of 130 feet, the vast majority ofproducts on display will not hit the main-stream.

The shows thunder was also stolen byGoogle, which decided to launch its NexusOne phone five hundred miles away in SanFrancisco just one day before the tradefair got going. And even when CES was infull swing, the delegates were more inter-ested in the imminent launch of Applestablet PC, slated for 27 January. AnalystRichard Holway from TechMarketViewcompared the product announcements atCES to the tiny sorbets they give you in

between courses in posh restaurants,mere pallet cleansers that serve as asideshow to the main dishes.

Like Google and Apple, many of the dele-gates from recent years stayed away; atten-dance was down 20 per cent to 110,000compared to the glory days of 2008. Thatsaid, CES remains a seminal date on thetech sectors calendar. It marks that time of

year when firms start touting their wares,in the full knowledge that they have justnine months to turn their products intoChristmas bestsellers.

High-end consumer electronics haveheld up remarkably well in the recession.

Although global mobile phone sales in2009 numbered some 8m less than the pre-

vious year the first ever annual drop luxury smartphones like Blackberrys arestill in vogue. Gartner says smartphonesales were up around 24 per cent on 2008,and now account for some 14 per cent oftotal sales, a figure that will rise to 38 percent by 2013.

Similarly, Apple boosted sales of itshigh-end MacBooks and iMacs by 17 percent in its third quarter, even as global PCrevenues for the year fell by around 11 percent. Analysts also expect the firm to haveshipped around 10m iPhones in the threemonths to the end of December, beatingall previous records. The Kindle,

Amazons e-book reader, was another

Christmas hit, with sales said to be run-ning at 2.5m by the end of 2009. Its chiefexecutive Jeff Bezos says digital books out-sold physical copies on Amazon.com inthe festive period.

The trend is clear: demand for consumerelectronics is shrinking overall, but theappetite for the next big thing is as vora-cious as ever. For that reason, CES is stillimportant: it is the place where journal-ists, analysts and manufacturers gettogether and decide exactly what the next

big thing will be. This year, everyone seemsto be in agreement: the ones to watch aretablet PCs, the next generation of e-bookreaders and 3D TVs.

TABLET PCS

Its amazing how much hype Apple cangenerate without lifting a finger. Simply by

booking a large hall in a San Francisco con-

ference centre at the end of January, it hassent the industry into a tailspin. Thefamously secretive firm has made noannouncements and given no briefings toanalysts or the press; apart from a handfulof Apple execs. Noone knows what toexpect. Still, most think the firm willunveil a new tablet PC, dubbed theiSlate.

Tablets are expected to bridge the gapbetween high-end smartphones and small-er laptops. Constantly connected to theinternet, and probably sold with a mobiledata subscription, the touch screen devicesare designed to surf the web, watch moviesand read e-books.

In an attempt to steal some of Applesthunder, Microsoft boss Steve Ballmerunveiled a new HP tablet that will runMicrosoft Windows 7. His keynote speech

was an unmitigated disaster: thePowerPoint point presentation didnt

work; Ballmer gave a lacklustre perform-ance; and details were sketchy, with norelease date or pricing information.

Although a good strategist, Ballmer is likeGordon Brown you get the feeling theorganisation he leads would do so much

better if he didnt appear in public.

E-BOOK READERS

While Amazons Kindle has been a successin the digital book space, the next genera-tion of devices are attracting interest

because of their potential to rejuvenatenewspapers and magazines.Unsurprisingly, print journalists havedevoted acres of column inches to thetopic, desperate for the slightest sign thatthe industry they work for is not in itsdeath throes.

One glimmer of hope is the Skiff readerdeveloped by Hearst, the publishing giant

whose titles include Cosmopolitan, Good

Housekeeping and Esquire. The device isimpressive, but its the business modelthat is really interesting. Hearst is plan-ning to subsidise the e-reader if buyers takeout a digital subscription to one of itstitles, probably for a minimum of two

years. If they subscribe to two or more pub-lications, the subsidy will be greater.

Its competitors will be watching withinterest: analysts say magazine advertisingrevenue fell 20 per cent in the US last year,

with circulation falling by a similaramount.

3D TELEVISIONSTheres always one device where the hypegets the better of CES delegates, and this

year it was the 3D T V. Although the likes ofPanasonic and Samsung were waxing lyri-cal about the possibilities, analysts remain

wary of the category and theyre right tobe. Most families have updated their TVs inrecent years, as Western governmentsswitch off analogue signals.

That has led to perfect conditions forHDTV, but if manufacturers think theycan repeat the trick with 3D, theyre

wrong. As Forrester analyst JameMcQuivey puts it, Lets get real: not even amillion US homes will buy one in 2010,equivalent to less than one per cent of themarket. This is still one for the earlyadopter that wants to spruce up his bache-lor pad. [email protected]

Google Nexus OneThe most serious iPhonecompetitor yet, Googles NexusOne comes loaded with itsimpressive Android mobilephone software. In a massivedeparture from conventionalthinking in the telecomsindustry, Google will sell thephone as an unlocked deviceon its own website for $529(330), allowing customers touse their existing sim card. Itwill also be available withT-Mobile in the US whileVodafone has won the rights

to launch the phone in the UK.

THE ONES TO WATCH

Microsoft boss SteveBallmer got a poorreception when heunveiled a HP tabletPC that will runWindows 7

Picture: REX

Samsung LED 9000 3D HDTVSamsungs stunning range of 3D TVs aim to give an immersive 3Dperformance, from 3D movies to video games. But youll still have to

wear those pesky glasses. Pricing TBA.

Hearst SkiffUnlike Amazons hugelypopular Kindle, theSkiffs screen is made ofmetal board that iscoated with speciale-ink not glass. As wellas making it less likely tobreak, it also keeps thedevice extremely thin:even though it has an11.5 inch widescreendisplay, it is just 0.25inches thick andweighs just over apound. Pricing TBA.

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15

Markets&Investment

New Year has positive start with surge on stocks

STOCKS have begun 2010 with a bullish surge, and even afterFridays employment data fromthe US revealed a surprising drop

for December, we should see a broadappetite for risk get us off to a positivestart to this week.

GFT is calling the UKs FTSE 100index to open up 11 points at 5,545

within a whisker of the 52-week highof 5,552 set just last week. The GermanDAX is quoted around 6,051, up 14points from Friday and the FrenchCAC is seen opening up 12 points atthe 4,057 level.

That stocks appear for now at leastto have shrugged off that disappoint-ing nonfarm payrolls number is sig-

nificant, with market mood clearlyfocussed more on the positive, whichin this case was the news thatNovembers data were actuallyrevised higher to show a net gain in

jobs. Already one can sense a feelingof anticipation ahead of next monthspayrolls data, with hopes buildingthat we will see a similar revision for

December.Looking further into the week

ahead, we have the start of the US cor-porate earnings season to keep us onour toes, with Alcoa, Intel and JPMorgan the blue chips in the spotlight.

This week the news on the corpo-rate and economic fronts is overallexpected to be positive. Intel and JPMorgan are forecast to show a mas-sive leap in profits from this quarter a

year ago. On Thursday, US retail salesdata should benefit from theChristmas rush, and consumer senti-

MARTINONTHE MARKETS

MARTIN SLANEY

LONDONS TOP 250 Trade these shares from 1.50 with Interactive Investor - www.iii.co.uk

3i . . . . . . . . . . . . . . . . . . . . . . . . 289 .60* + 1. 20 314 .80 108 .663i Infrastructure . . . . . . . . . . . . .103.40 105.80 76.50A.B. Foods . . . . . . . . . . . . . . . . .850.00* +11.50 870.50 603.00

Aberdeen Asset Man. .. . . . . .. .134.00* 4.60 155.60 113.00

Admiral. . . . . . . . . . . . . . . . . . .1149.00 5.00 1190.00 793.50Aegis . . . . . . . . . . . . . . . . . . . . . 118. 70 + 1. 40 122 .90 66. 75Aggreko . . . . . . . . . . . . . . . . . . .932.00 8.50 946.50 342.00Alliance Trust . . . . . . . . . . . . . . .333.30* 0.50 336.50 233.00AMEC. . . . . . . . . . . . . . . . . . . . . 806. 00 13 .00 879 .50 484 .25Amlin . . . . . . . . . . . . . . . . . . . . . 363. 50 + 1. 00 400 .00 291 .00Anglo American . . . . .. . . . . ..2897.00 +53.00 2897.00 906.00Antofagasta . . . . . . . . . . . . . . .1024.00 +1.00 1045.00 371.00Aquarius Platinum . . .. . . . . .. .444.10 +10.40 448.40 128.85ARM Holdings. . . . . . . . . . . . . . .194.70 1.00 197.20 77.50Arriva . . . . . . . . . . . . . . . . . . . . . 503. 00 2. 00 609 .50 361 .00Ashmore. . . . . . . . . . . . . . . . . . .268.30 1.70 311.20 92.75Astrazeneca . . . . . . . . . . . . . . .2908.50 2.00 2966.00 2126.00Atkins(Ws) . . . . . . . . . . . . . . . . .637.50* +1.00 685.00 415.00Autonomy Corp . . . . .. . . . . ..1560.00 32.00 1687.00 924.00Aveva . . . . . . . . . . . . . . . . . . . .1095.00* 5.00 1109.00 460.00Aviva . . . . . . . . . . . . . . . . . . . . . 410. 60 + 7. 60 474 .00 160 .10Babcock International .. . . . . .. .602.50* +3.50 660.50 381.25BAE Systems . . . . . . . . . . . . . . .368.50 3.00 416.00 294.20Balfour Beatty. . . . . . . . . . . . . . .276.90 3.10 346.18 243.40Barclays . . . . . . . . . . . . . . . . . . . 320. 55 +5 .05 390 .00 47. 30Barratt Development . .. . . . . .. .141.90 +3.50 193.31 40.82BBA Aviation . . . . . . . . . . . . . . .177.90 +3.00 184.20 58.25Bellway. . . . . . . . . . . . . . . . . . . .826.00* +12.00 927.50 515.00Berkeley . . . . . . . . . . . . . . . . . . .876.00 +15.50 1071.00 716.50BG . . . . . . . . . . . . . . . . . . . . . . 1194.00 +2.50 1198.50 836.50BHP Billiton . . . . . . . . . . . . . . .2115.50 +24.50 2116.50 1025.00BlackRock Mining. . . .. . . . . .. .581.50 +1.50 587.00 233.00BlueBay . . . . . . . . . . . . . . . . . . . 332. 50 +4 .90 393 .00 63. 00Booker. . . . . . . . . . . . . . . . . . . . . 46 .27 + 0. 26 49. 50 20. 50Bovis Homes . . . . . . . . . . . . . . .446.00 +11.20 571.00 341.75

BP . . . . . . . . . . . . . . . . . . . . . . . 621. 70 1 .60 626 .20 400. 00Brit Insurance . . . . . . . . . . . . . . .201.00 +4.80 207.90 185.20British Airways . . . . . . . . . . . . . .199.20 +0.50 243.30 111.30British Amer. Tob . . . .. . . . . ..2035.00 9.50 2055.50 1481.00British Empire Tst . . . .. . . . . .. .432.40* +5.40 451.80 304.00British Land . . . . . . . . . . . . . . . .461.40 +2.70 532.00 295.00Britvic. . . . . . . . . . . . . . . . . . . . .406.00* +3.00 411.30 204.25Brown(N.). . . . . . . . . . . . . . . . . .255.40* 4.10 275.80 183.75BSkyB . . . . . . . . . . . . . . . . . . . .562.00 6.50 593.00 398.25BT . . . . . . . . . . . . . . . . . . . . . . . 143. 00 * + 0. 20 151. 00 70. 20Bunzl . . . . . . . . . . . . . . . . . . . . . 663. 50 + 0. 50 679 .50 473 .00Burberry. . . . . . . . . . . . . . . . . . .598.50* 1.50 617.00 194.25Cable & Wireless. . . . . . . . . . . . .147.50* +0.40 170.00 125.10Cadbury . . . . . . . . . . . . . . . . . . .778.00 +1.50 819.50 484.25Cairn Energy. . . . . . . . . . . . . . . .361.90 +6.70 362.50 319.50Caledonia Invs .. . . . .. . . . . ..1663.00* +19.00 1759.00 1081.00Capita. . . . . . . . . . . . . . . . . . . . . 726. 50 3. 50 791 .00 608 .00Carillion . . . . . . . . . . . . . . . . . . .309.00 +2.50 319.60 192.00Carnival . . . . . . . . . . . . . . . . . .2206.00 +56.00 2219.00 1224.00Carpetright . . . . . . . . . . . . . . . . .921.00 26.00 999.00 346.00Carphone Warehouse .. . . . . .. .197.90* +2.20 216.10 88.25Catlin . . . . . . . . . . . . . . . . . . . . . 329. 40 6. 60 387 .38 270 .00Centrica . . . . . . . . . . . . . . . . . . .279.50 +4.70 288.75 212.50Charter Intl . . . . . . . . . . . . . . . . .786.50 +8.00 797.00 305.75Chemring . . . . . . . . . . . . . . . . .2990.00 +10.00 3006.00 1794.00Close Bros . . . . . . . . . . . . . . . . .729.50 +18.50 806.50 384.25Cobham . . . . . . . . . . . . . . . . . . .248.90 3.10 254.10 163.90COLT Telecom . . . . . . . . . . . . . .142.30 0.30 144.20 72.25Compass . . . . . . . . . . . . . . . . . .460.20 +3.70 470.10 275.00Cookson. . . . . . . . . . . . . . . . . . .475.90 +12.90 481.40 202.75

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

Croda Intl . . . . . . . . . . . . . . . . . .834.50 0.50 852.50 451.50CSR . . . . . . . . . . . . . . . . . . . . . . 442 .50 + 0. 80 524 .00 152 .00Daily Mail A. . . . . . . . . . . . . . . .431.30* +7.80 467.30 205.75

Dana Petroleum. .. . . . . .. . . .1281.00 +2.00 1549.00 807.00

Davis Service . . . . . . . . . . . . . . .406.20 +0.20 438.00 213.75De La Rue . . . . . . . . . . . . . . . . . .996.50* +1.00 1080.00 808.50Debenhams . . . . . . . . . . . . . . . . .75.30 2.70 99.50 24.25Derwent London . .. . . . . .. . . .1307.00 8.00 1418.00 445.50Dexion Absolute . . . . . . . . . . . . .142.50 +1.50 142.90 82.00Diageo . . . . . . . . . . . . . . . . . . . 1067 .00 1098. 00 727. 00Dimension Data . . . . . . . . . . . . . .79.85 +1.85 82.80 32.75Drax . . . . . . . . . . . . . . . . . . . . . . 441 .60 + 6. 50 617 .00 393 .75DSG Intl . . . . . . . . . . . . . . . . . . . . 36. 80 + 0. 08 39. 75 13. 10Dunelm. . . . . . . . . . . . . . . . . . . .395.00 5.00 438.40 137.50Easyjet . . . . . . . . . . . . . . . . . . . .354.30 0.30 416.80 246.50Edinburgh Inv Tst .. . . . . .. . . . .381.90 +2.20 383.30 283.75Electrocomponents.. . . . .. . . . .168.10* +1.30 176.00 113.00Eurasian Nat Res .. . . . . .. . . .1034.00 +51.00 1046.00 295.00Experian . . . . . . . . . . . . . . . . . . .599.00* 2.00 639.00 371.75F&C Comm Prop . . . . . . . . . . . . . .94.00 2.80 96.80 73.50Ferrexpo. . . . . . . . . . . . . . . . . . .237.30 +7.20 237.90 32.75Fidelity European .. . . . . .. . . .1147.00 9.00 1182.00 753.00FirstGroup . . . . . . . . . . . . . . . . .410.60* +1.30 448.80 192.90Foreign & Col Inv Tst. . . . .. . . . .280.10 281.90 179.25Fresnillo . . . . . . . . . . . . . . . . . . .866.00 +13.00 935.00 217.75G4S . . . . . . . . . . . . . . . . . . . . . . 264 .90 2 .00 269. 40 171. 90Genesis Emerging Mkts Fd . . . . .450.50 +0.50 452.50 370.00GKN . . . . . . . . . . . . . . . . . . . . . . 123 .50 0. 80 131 .30 36. 45GlaxoSmithKline. .. . . . . .. . . .1281.00* 12.50 1347.00 982.00Go-Ahead . . . . . . . . . . . . . . . . .1348.00 +23.00 1577.00 845.00Grainger. . . . . . . . . . . . . . . . . . .137.00* 0.90 194.62 39.93Great Portland Estates . . .. . . . .285.00 6.60 301.00 127.11Greene King . . . . . . . . . . . . . . . .434.80* +7.10 547.45 279.35Halfords . . . . . . . . . . . . . . . . . . .418.00* +6.50 442.10 216.75Halma. . . . . . . . . . . . . . . . . . . . . 246. 10 * 0. 90 256. 00 140 .75

Hammerson . . . . . . . . . . . . . . . .399.00 1.00 616.00 212.25Hargreaves Lansdown . . .. . . . .308.00 314.30 158.50Hays . . . . . . . . . . . . . . . . . . . . . . 107 .90 0. 70 114. 00 67. 25Henderson . . . . . . . . . . . . . . . . .133.00 +1.90 142.10 50.00Heritage Oil. . . . . . . . . . . . . . . . .501.50 +6.20 63

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