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FTSE 100 t5,285.77 -29.57 DOW t10,452.00 -49.05 NASDAQ t2,201.05 -11.05 /$ 1.63 unc / 1.12+0.01 /$ t1.45 -0.02 Certified Distribution02/11/09 29/11/09 is 102,194

C Suisse to

pay 329mfine to US

CREDIT Suisse shocked the financialmarkets last night after it revealed itexpected to pay US authorities a hefty$536m (329m) following a probeinto its financial dealings with Iran.

The Swiss bank said the settlement would likely result in a SFr445mcharge this quarter, or a net impact ofSFr360m after tax.

Manhattan District Attorney RobertMorgenthau said this would be thebiggest settlement to have ever beenachieved in New York.

Credit Suisse said the negotiationsrelated to US dollar payments duringthe period 2002 to April 2007 involv-ing parties that are subject to US eco-nomic sanctions.

US-regulated financial institutionsby law cannot do business with coun-tries which are subject to economicsanctions.

The bank said it had terminated allbusiness it did with countries underUS sanction in 2006. It also closed itsoffice in Tehran.

Credit Suisse said it is committedto the highest standards of integrityand regulatory compliance in all its businesses, and takes this matterextremely seriously.

The US authorities are believed tobe investigating ten banks in relationto Iran.

Earlier this year, Lloyds Banking

Group agreed to pay $350m for hidingSudanese and Iranian transactionsfrom the US authorities between 1995and 2007.

BY KAREN ATTWOOD

BANKING

BA customers face a winter of discontent Picture: REX

BELEAGUERED airline British Airways(BA) is taking legal action against theUnite union in a desperate bid to prevent cabin crew from striking overthe peak Christmas period, it said yes-terday.

Thousands of cabin crew voted to walk out for 12 days from 22December earlier this week, in the lat-est blow to an airline which is drown-ing under a 3.7bn pension deficitand record financial losses. The staffare up in arms over BAs plans to cutcrew numbers on flights and freezepay.

The move to take legal action cameafter BA wrote to Unite, highlighting what it called irregularities in its

strike ballot. The airline claims Uniteballoted members for the vote whono longer work for, or are soon to beleaving, BA. The case will be heard inthe High Court today at 2pm.

Staff have been leaving the airlinein droves, taking offered voluntaryredundancy as part of a massive

restructuring which is aimed at sav-ing 100m.The letter, sent yesterday, was the

third to be put to the union; Unite

has not replied.We are absolutely determined to

do whatever we can to protect ourcustomers from this appalling, unjus-tified decision from Unite, chiefexecutive Willie Walsh said.

We do not want to see a millionChristmases ruined, he added.

Unite accused BAs macho man-agement of holding Christmas trav-ellers hostage, and said the airline bosses preferred confrontation tonegotiation. Unite claims to haveoffered to suspend the action lastFriday.

Rival carriers EasyJet and Virgin arelaying on extra flights and deals tohelp stranded BA passengers over theperiod.We have sold 3,000 seats inthe past 12 hours, Virgin said yester-day afternoon. It plans to put largeraircraft on routes to cities such asNew York and Delhi.

Airline analyst Andrew Fitchiefrom Collins Stewart predicted budg-et carrier EasyJet could see an extra40m to 50m in revenues because ofthe strikes. In a backup move, BA isalso seeking to establish which cabincrew would be willing to workthrough the strikes.

City experts have been scathingabout the decision to strike, insistingthe airline needs to change if it is tosurvive. The strike is tantamount toknocking another big nail into thecoffin, BGC Partners Howard

Wheeldon said. Have the unions noidea that the ultimate damage couldbe terminal for the airline and staff?he added.

BA SUES UNION OVERXMAS STRIKE CRISISBY LORA COVENTRYAVIATION

Chief executive WillieWalsh is trying to steerBA out of the red afterthe downturn hit theindustry hard

www.cityam.comIssue 1,038 Wednesday 16 December 2009 FREE

LEVELPEGGINGMAN UTD PUT

PRESSURE BACKON CHELSEA P22

PRIVATE EQUITY LEGENDRAISES 142M

JON MOULTONS RETURN P14

BUSINESS WITH PERSONALITY

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News2 CITYA.M. 16 DECEMBER 2009

RICHARD Pym, the chairman ofBradford and Bingley, is beingbrought in to head up the bad bankdivision of Northern Rock.

Following the restructuring of thestate-owned bank to take effect New Years day, Pym will become chair-man of Northern Rock (AssetManagement), which will hold thebulk of the existing mortgage book.

Current chairman Ron Sandler willbecome chairman of the new savingsand mortgage bank, which will keepthe name Northern Rock.

As expected, chief executive GaryHoffman will continue as chief execu-tive of both organisations to ensurecontinuity and orderly separation,the bank said.

Pym, a former chief executive of

Alliance & Leicester and seen as a safepair of hands in the city, will remainas chairman of B&B.

His dual role will fuel speculationthat the asset management divisionof Northern Rock could be mergedwith B&B.

Sandlers salary will drop from350,000 a year to 250,000 followingthe split. Pym will receive 250,000for chairing both companies, ofwhich 187,200 comes from B&B.

Northern Rock said Pym wouldbring his expertise and experiencefrom Bradford & Bingley.

BYKAREN ATTWOOD

BANKING

Nobody should ever be bailed out again

CAPITALISM only really works whensuccess is rewarded and failure pun-ished. So as the New Year approaches,here is a radical suggestion: let ususher in a new era of personal respon-sibility. Let 2010 be a year of no bailouts, no handouts, no bleatingand no more blaming everybody elsefor ones own mistakes. This shouldapply across the board, from thebiggest firms to all of us private indi-viduals. Here is my dream scenario.

First, the banks. The last institu-tions that remain dependent on gov-ernment funds should pay the money

back at a profit for the taxpayer. Thegovernment should then make it clearthat banks must continue rebuildingtheir capital and that once specialnew bankruptcy rules are in place,

they wont be bailed out again ifthings go wrong. There should bespeeches to that effect from theauthorities, lest anybody doubts thatthey are serious. The only interventionin future would be to prevent runs orstop the system from imploding; butall insolvent institutions would beallowed to go bankrupt, with bond-holders and equity holders wiped out.There will be no such thing as too bigto fail, handouts for affected counter-parties or socialised losses combiningwith privatised rewards.

Second, individuals. We should allbe forced to take much greater respon-sibility for our performance and ourpersonal finances. Failed CEOs shouldalways be sacked without huge pay-outs; shareholders should insist ondoing away with rewards for failure.Meanwhile, individuals should save

more and only borrow when we canafford it. People who have taken ontoo much debt should stop complain-ing and make a renewed effort to payit back. We must also see a return of

caveat emptor: the buyer mustbeware. It is just not good enough forsomebody to go out and borrow10,000 on a credit card and thencomplain that the credit card compa-ny is at fault. There has of course beenplenty of mis-selling of everythingfrom pensions to properties in recent years; but it is time to focus for achange on mis-buying, a much greaterproblem. It is not only the lenders andthe sellers who are greedy; the bor-rowers and buyers are usually equallyat fault.

Rather than burying capitalism, weshould reinvent it by rediscovering itscore values. Tough love is undoubtedlya harsh policy but making everybodyface up to their responsibilities mightavoid irrational exuberance from flar-ing up again in a couple of years time.It is our only hope.

WAR ON THE CITYLast week I reported on aPoliticsHome.com poll looking at thetax on bankers bonuses, which found67-27 in favour, a figure which I

thought actually showed surprisinglystrong public opposition to the taxgiven the overwhelming political andmedia consensus on the subject (andthe preponderance of simplisticanalyses of the causes of the creditcrunch).

Another poll from YouGov is farmore negative, though it frames thetax in a precise way: Given the cur-rent economic climate and the needfor the government to reduce borrow-ing in the years ahead, do you supportor oppose the following measures that Alistair Darling announced thisweek?

The option requiring banks to paya one-off extra tax on bonuses of morethan 25,000 per bank employeegained public support by a whopping79-11 per cent. Dangerous timesindeed. [email protected]

A US grand jury yesterday indictedGalleon hedge fund founder RajRajaratnam and co-defendantDanielle Chiesi for their allegedinvolvement in a $20m (12.2m)insider trading ring.

The indictment a formal accusa-tion that moves the case to trial charges them with conspiracy andsecurities fraud.

Both billionaire Rajaratnam, 52,

and Chiesi, who is a former consult-ant to New Castle Partners LLC, denythe charges.

The indictment marks the first setof criminal charges in relation to theSecurities and Exchange Commission(SEC) accusations, which have led to21 arrests and allege insider tradingin securities for top companies suchas Google, Intel, Hilton and AMD.

Rajaratnam was arrested on 16October. He is free on bail and willappear in Manhattan federal court incoming days to enter a plea.

BY JENNY FORSYTH

FRAUD

Galleon founder indictedRaj Rajaratnam denies charges in hedge fund fraud case Picture: REUTERS

NEWS | IN BRIEF

XTO Energy boss in $46m dealXTO Energy Inc Chairman Bob Simpsonand other officers have waived thechange in control provisions in theiremployment agreements as part of theirdeal to be bought by Exxon Mobil andhave instead signed consulting dealswith the oil major. Under the new agree-

ment, Simpson could receive up to$46m (28m) in cash and stock, ratherthan the $70m he could have pulled in.

WaMu investigates its collapseBankrupt holding company WashingtonMutual asked a federal court to compelthe US Federal Reserve, US Treasuryand more than a dozen others to turnover documents relating to its collapsein 2008. The company wants to investi-gate discussions between JPMorgan &Chase Co, regulators, competitors andrating agencies it said led to the seizureof Washington Mutual (WaMu), accord-ing to a filing in a bankruptcy court. Itsaid the alleged misconduct includesJPMorgan disclosing confidential infor-mation to government regulators, rat-ings agencies, media and investors in aneffort to harm WaMu by driving downits credit rating and stock.

Richard Pym is tobecome new chief ofNorthern Rocks badbank but will alsoremain B&B chairman

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 GriffithsActing Night Editor David CrowFeatures Editor Jeremy HazlehurstArt Director Darren SoulsbyPictures Alice Hepple

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EDITORS LETTER

ALLISTER HEATH

Rock choosesPym as its boss

MYNERS TO BOOST PROTECTION OFBANK CLIENTSPLANS to increase protection forclients and counterparties of failinginvestment banks will be unveiled bythe Treasury today in an effort to pre-vent a repeat of the legal wranglingaround the collapsed LehmanBrothers. The move is aimed at ensur-ing an orderly wind-down of invest-ment banks, particularly cross-borderinstitutions sometimes deemed toobig to fail.

MOD MAKES CUTS TO PLUG BUDGETHOLEThe Ministry of Defence laid bare thehuman and military cost of livingbeyond its means yesterday as minis-ters unveiled 10,000 job cuts, an airforce base closure and a big reductionin the fighter jet fleet. Bob

Ainsworth, defence secretary, said thehard decisions would fill part of the

hole in the defence budget ahead ofthe strategic defence review next year

and provide room for 900m of addi-tional spending on kit forAfghanistan.

SAMSUNG SHAKE-UP CEMENTS LEEFOOTHOLDLee Jae-yong, the son of SamsungGroups disgraced former chairman,on Tuesday finally emerged from theshadows to take a heavyweight job atAsias biggest technology company.In a big shake-up, Mr Lee, 41, becamechief operating officer at SamsungElectronics.

JAL BUOYED BY VOTE ON PENSION PAY-OUT Japan Airlines looked set to clear amajor hurdle in its efforts to restruc-ture after retirees indicated that theywould accept steep cuts to their pen-sions. Seventy-five per cent of respon-dents in a company survey said they

would vote in favour of reducing ben-efits by 30 per cent.

REVENUE MOVES TO STOP WEALTHYABUSING CHARITY RELIEF The taxman took another swipe atCity bankers yesterday, closing ascheme that allowed wealthy individ-uals to cut their tax bills by claimingtax relief on charitable donations. The move comes days after AlistairDarling caused uproar in the City byintroducing a one-off 50 per cent taxlevy on bankers bonuses. It will beseen by many as a shot across thebows for wealthy workers tempted toavoid paying the higher tax rate.

EMAP UNDER PRESSURE TO SORT OUTDEBTEmap, the troubled publisher ownedby Guardian Media Group (GMG) and Apax partners, the private equitycompany, has accepted that a failureto renegotiate its loan covenants

would throw its survival prospectsinto significant doubt.

SKY PULLS OUT OF YOUTUBE TALKSWITH GOOGLEBSkyB has pulled out of talks withGoogle about making the broadcast-ers hit shows available for free onYouTube, the US search giants video-sharing site. It comes as Skys biggestshareholder, Rupert Murdochs NewsCorp, has accused Google of stealingcontent and threatened to prevent theinternet company from linking to itscontent .

GULF PETRO-POWERS TO LAUNCH CUR-RENCY IN LATEST THREAT TO DOLLAR The Arab states of the Gulf regionhave agreed to launch a single curren-cy modelled on the euro, hoping toblaze a trail towards a pan-Arab mone-tary union swelling to the ancient bor-ders of the Ummayad Caliphate. TheGulf monetary union pact has come

into effect, said Kuwaits financeminister, Mustafa al-Shamali.

UK RULING SPELLS OUT LEHMANASSET PROTECTIONSA UK High Court judge issued a rul-ing yesterday spelling out how clientmoney held in the main Europeanarm of Lehman Brothers HoldingsInc. should be handled, benefitingsome hedge funds while also servinga blow to others.The ruling relates to one aspect of thecomplex task of returning cash andother assets to clients after the banktumbled into bankruptcy inSeptember 2008.

FIRST DREAMLINER FLIGHT SETS UPNEW HURDLES FOR BOEINGBoeing Co.s 787 Dreamliner made itsfirst flight yesterday, marking a suc-cess for the company after two yearsof delays but setting up an equally

challenging drive to churn out largenumbers of the cutting-edge aircraft.

WHAT THE OTHER PAPERS SAY THIS MORNING

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STEPHEN Hester, chief executive ofRoyal Bank of Scotland, warned yester-day that the politicisation of bankers

bonuses could wipe billions of poundsoff the taxpayers stake in RBS.

Treasury plans to levy a one-off 50per cent tax on bank bonuses haveadded to woes at the Scottish institu-tion, whose directors were already atloggerheads with the government.

Speaking after an investor meetingin Edinburgh, Hester said: Theprocess of politicisation of RBS isdamaging to our business and is dam-aging to the taxpayer.

His comments came as Treasurysources indicated to City A.M. thatthey intended to extend the scope ofits bonus tax to include banks thatpay their staff later in the year.

Some banks, such as NMRothschild, were set to avoid the tax

because they have traditionally paidtheir bonuses in June, after the one-off levy is due to end.

But the Chancellor Alistair Darlingis expected to extend the tax so all

banks are liable, regardless of when

they pay their bonuses for the year.Meanwhile, another City firm said

it was considering leaving London. West Hill, the boutique investmentbank specialising in insurance set up by former HSBC corporate financierAndrew Galloway, is thinking of relo-cating to Valais in Switzerland.

Galloway told City A.M.: They havesome attractive tax breaks there. Weare generating some reasonable rev-enues and we dont want to givethem all away to the Inland Revenue.

As the furore over the bank bonustax and the increase in the tax bandto 50p for higher earners continues,KPMGs John Griffith-Jones added his

voice to those who fear for the Citysfuture.

Griffith-Jones, who was a memberof Bob Wigleys committee thatlooked into the prospects for Londonas a financial centre in the future,described the banks bonus tax as acheap shot.

Portraying the tax as us and themmay damage the reputation and fab-ric of the City, he said, as KPMGannounced its annual results.

RBS INVESTOR MEETINGS: P5KPMG RESULTS: P7

City firms in

fresh attackson bonus tax

TRICORN Partners, the corporatefinance advisory firm, is set to betaken over by Japanese investment

bank Nomura.Guy Dawson and Justin Dowley,

who have been running Tricorn forseven years since leaving MerrillLynch, will join Nomura as vice-chair-men of Europe, Middle East and

Africa investment banking.This marks a reversal of the trendfor bankers to ditch large institutionsin favour of smaller independent bou-tiques.

It is understood that part of theundisclosed acquisition price willdepend on the earnings the bankersgenerate over the next two years.

The move follows Nomuras acqui-sition of Lehman Brothers Europeanand Asian M&A and equities business.

Nomura to acquireTricorn Partners

BY OLIVER SHAH AND RACHEL STEVENSON

BANKING

Greek PrimeMinister GeorgePapandreou heldrare crisis talkswith oppositionleaders yesterday, aday after heannounced a raft

of spending cuts.Trade unions havecalled for a 24-hournationwide strikefor tomorrow in amove that is set toundermine effortsto push throughreforms.

Picture:GETTY

BY KAREN ATTWOODBANKING

News 3CITYA.M. 16 DECEMBER 2009

NEWS | IN BRIEF

GM will pay back its debt fasterGeneral Motors (GM), the US car giant, isplanning to pay back roughly $8bn(5.8bn) in debt to the United States andCanada by June, after the governmentbailed out the company ealier this year.The move indicates a faster payback ofthe first portion of its bailout than GMhad previously committed to make, and isthe latest indication that the car marketis picking up after being seriously hit inthe recession. The announcement fromnew chief executive Ed Whitacre marksthe first time GM has committed torepaying its government loans within ayear, after it filed for bankruptcy in arestructuring steered by the Obamaadministration.

General Electric to shift strategyGeneral Electric Chief executive Jeffrey

Immelt said the giant conglomerate wasundergoing a renewal after what has

been one of the most difficult years inthe company's 117-year history.Immelt said GE is focusing on sectorssuch as energy and health care as it looksto its big industrial divisions to navigateout of the deep recession. Despite theshift in strategy, GE's forecast for 2010shows that the effects of the recent eco-nomic crisis will linger.

Hotel group Accor to splitFrench hotels and services companyAccor is to split into two separate, listedcompanies, one focusing on hotels, theother on vouchers.The move ends years of speculation andpressure from some shareholders.A wide majority of the 12-member boardvoted in favour of the plans, with onevote opposed.The French sovereign wealth fund, the

FSI, which holds over 8.5 per cent, votedagainst the plans.

GREEK DRAMA

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INVESTMENT bank Goldman Sachs isbeing sued for billions of dollars incompensation after an institutionalshareholder accused it of blindlylooting the firms coffers by payingout rich rewards to its employees.

The lawsuit, which has been filedwith the New York Supreme Court bythe Security Police and FireProfessionals of America RetirementFund, a minor shareholder in thebank, takes issue with the estimated$22bn (13.6bn) extravagant com-pensation bonanza Goldman is ontrack to pay out this year.

The court filing claims the recordrevenues generated by the bank sincethe depths of the financial crisis last year have not been the product ofthe skill and business acumen of thecompanys employees, but [are] attrib-utable directly to the multi-trilliondollar infusion of capital by the American taxpayers to bail out theentire financial services industry.

The suit personally names as defen-dants Goldmans chief executiveLloyd Blankfein, chief operating offi-cer Gary Cohn, chief financial officer

David Viniar and other directors ofthe bank, including steel magnateLakshmi Mittal.

Jay Eisenhofer, managing directorof New York law firm Grant &Eisenhofer, who will lead the litiga-tion, said: If it had not been forGoldman receiving Tarp money andfunds that were used to bail out AIG which together total over $20bn thebank wouldnt have made any moneythis year and possibly wouldnt evenhave got through the year, full stop.

The plaintiff has vowed to see themoney ploughed back into the corpo-ration if the case is successful.

Goldman Sachs spokesman EdCanaday confirmed the bank wouldcontest the lawsuit, which he saidwas entirely without merit.

The court case comes just daysafter Goldman revealed its top execu-tives will receive their bonuses entire-ly in shares rather than cash this yearto ward off criticism over its remuner-ation policy. The bank, which postedearnings of $3.2bn in the third quar-ter this year, has also given sharehold-ers the right to have their say on itspay structure with a non-binding voteat its annual meeting in May.

Goldman to

fight bonusfury in courtBYVICTORIA BATES

BANKING

US bank Wells Fargo sold $10.65bn instock yesterday to raise funds to helpit repay the $25bn (15bn) bailout itreceived from the US government lastyear.

The move, which follows a similarmeasure from Citigroup, makes Wells Fargo the last of the majorfinancial institutions to repay fund-ing from the Troubled Asset ReliefProgram (Tarp). It also marks a steptowards recovery for the US financialsystem.

By cutting ties with governmentsupport the banks are also freeing

themselves from constraints on howthey reward their key employees.

Wells Fargo said it intends to raiseup to $1.5bn of equity through assetsales. Analysts said the bulk of the$25bn in Tarp money will be repaidwith the banks $14.6bn in cash.

The announcement that the bankwould repay the funds came as a sur-prise after chief executive JohnStumpf repeatedly said the bankwould repay funds in a shareholder-friendly manner.

Keith Davis, an analyst at FarrMiller & Washington, said: I think a

lot of people expected them to earntheir way out of Tarp.

Wells Fargo sells $10.65bn instock to repay Tarp bailoutBANKING

Banking News4 CITYA.M. 16 DECEMBER 2009

LLOYD BLANKFEINGoldman Sachs chief executive

GARY COHNGoldmans chief operating officer

DAVID VINIARGoldmans chief financial officer

LAKSHMI MITTALGoldman independent director

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SWISS bank UBS will not sue its for-mer bosses after risky bets on sub-prime mortgages and a strategy ofhelping its US clients dodge taxes byhiding money in secret accounts

brought the seemingly invinciblegroup to its knees.

Zurich state prosecutors also saidthey would not open criminal pro-ceedings against UBS employees asthere was no evidence of a breach ofSwiss law.

UBS said bringing charges wouldonly draw negative attention as the

wealth management group seeks afresh start to win back trust after

massive withdrawals by rich clients.The board has decided that years

of uncertainty about these mattersdue to litigation ... and related nega-tive attention from such action is notin the interest of UBS, its employees,clients and shareholders, the groupsaid in a statement.

UBS said the board had decided notto take action after a thoroughreview, including consultation withexternal legal experts. It said its newmanagement led by banking veteranOswald Gruebel had taken compre-hensive and profound measures toensure that nothing like this shouldever happen again.

Earlier this year, the worlds no. 2wealth manager, with $1.7 trillion inassets and the leader in the super-

wealthy sector, appointed Gruebel aschief executive.

SMALL sharesholders in Royal Bank ofScotland (RBS) voted overwhelminglyin favour of the bank joining a govern-ment-backed insurance scheme for

bad debts yesterday.Some 99 per cent of minority

investors in RBS, now 84 per centstate-owned, supported the decisionto join the asset-protection scheme ata meeting at the companysEdinburgh headquarters.

The plan to insure 282bn of loanswill shield RBS against losses, but willcome with strings attached, includinga governments right to veto thequantum and shape of the banks

bonus pool.RBS Chairman Sir Philip Hampton

warned that there were no alternativecapital measures available to RBS,

which lost a record 24.1 billion lastyear.

Bluntly, without these measuresRBS would be at risk of full nationali-sation, and in that event independentshareholders could very well lose

most or all of the value in theirshares, he said.

During the meeting attended by 98investors, the bank sought to dampenspeculation of a revolt at the top overthe governments bonus veto.

Many minority investors have beenhit by massive losses to their savingsas a result of RBSs troubles. Whilesupportive of the banks turnaroundefforts few backed a resignation over

bonus payments.Retired civil servant Peter

Thompson said: If the board wants toresign, let them. There are plenty ofunemployed bankers out there.

They were paying the top moneywhen the system crashed into a wall,so I dont think this argumentstands.

RBS, one of the top overseas lendersto troubled Dubai, confirmed a sig-nificant exposure in the debt-ladenemirate but said potential losses

would not lead the bank off course.Sir Philip could not give any indica-

tion of when dividends would returnbut said restoring the dividend todaywould be absolutely impossible.

Investors back

RBS on baddebts scheme

EXECUTIVES from AIG have been per-sonally struggling financially after

the near collapse of the strickeninsurance giant last year, chief execu-tive Robert Benmosche said yesterday.

But he was confident his firm would be able to pay off taxpayerbailout money in about two years.

Many people think there was nopenalty for the executives at AIG

when it did poorly... but if you look atwhere theyve been this year, theyve been pretty much wiped out, saidBenmosche.

Were suffering,says AIG boss

UBS decides against pursuing its

former directors in the courts

BYKAREN ATTWOOD

BANKING

BANKING

INSURANCE


Robert Benmosche says 10 top executives made sizeable losses after AIGs near collapse Picture: REUTERS

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DIDO Harding, the former Tesco exec-utive who heads Sainsburys conven-ience stores, is to join TalkTalk as itschief executive when it demergesfrom Carphone Warehouse.

TalkTalk will be Britains biggestresidential broadband provider whenit splits from the retail arm ofCarphone Warehouse next year.

Harding, who previously held man-agement positions at Thomas Cook

and Woolworths, left Tesco in 2007 tohead up Sainsburys conveniencestore division. She has also served onthe board of property companyBritish Land. Harding will leaveSainsburys next Spring.

Carphones retail division Best BuyEurope is headed by another formerTesco star, Scott Wheway, who spent20 years at the supermarket.

Carphones chairman JohnGildersleeve, also formerly a Tescoexecutive, is likely to have played alarge role in the appointments.

Harding, a keen horsewoman, hasbeen named in several surveys as oneof the UKs top businesswomen. Herracehorse Cool Dawn won theCheltenham Gold Cup in 1998.

Last month, Carphone raised earn-ings guidance for 2009-10 on the backof strong first-half results.

Harding walks

to TalkTalk

SERVICES giant KPMG saw UK rev-enues slip 1.6 per cent for the year toSeptember as a decrease in corporateactivity took its toll.

The firm blamed fewer mergersand acquisitions for the marginal fallin turnover to 1.6bn. Operating prof-it was down 1.3 per cent to 382m ina tough year that began with the col-

lapse of Lehman Brothers.KPMGs tax division suffered mostheavily, with fee income falling 12per cent to 375m as the slump inM&A fed through. The firms auditpractice was relatively prosperous,however, growing 4.7 per cent to486m despite losing a lucrativeclient in the form of HBOS. Its restruc-turing practice also enjoyed stellargrowth of 44.5 per cent on the back ofhigh profile crisis jobs for the likes of

JJB Sports and the Dunfermline.Revenues from advisory workremained steady at 765m. JointEuropean chairman John Griffith-Jones said KPMG would build out itsrisk management and performancetechnology divisions, beefing up sec-tor expertise by recruiting up to 20new partners for each practice.

Griffith-Jones said: Overall we feelwe have worked awfully hard to standstill [this year], but thats OK.

KPMG turnover falls 1.6pc asM&A weakness cuts tax take

BYKAREN ATTWOOD

RETAIL

KPMGs John Griffith-Jones has had a tough year Picture: Micha Theiner/CITY A.M.

BYOLIVER SHAHFINANCIAL SERVICES

CITY VIEWS: HAVE THE REVELATIONS ABOUT TIGERWOODS PRIVATE LIFE DAMAGED HIS BRANDINGPOWER? Interviews by Chris Kay

His golfing pedigree wont be damaged, but commerciallyhe has been a victim of his own success. His clean cutimage has definitely gone and as such Nike maywant to reconsider their position, like Gillette

and Accenture.

FLEMMING BENGTSE | sTANDARD BANK

I wouldnt stop buying Gillette just because of whatTiger Woods has done. I cant believe that he can be thatbothered from being cut off from a financial pointof view. He has more than enough work and thegolfing world wont kick him out.

ROB MARCHETT | TIKIT

Tiger Woods will probably bounce back; heis a golfing legend. The past has shown thateven people like George Best come backfrom personal strife and still make fortunes.He doesnt need the money.

ROB COZENS | DRC CONSULTANTS

Dido Harding willrun TalkTalk whenit demerges fromCarphone Warehousesretail division

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Economic News 9CITYA.M. 16 DECEMBER 2009

ANALYSIS lRPI comparison of the 12-month percentage changes

15

10

5

-5

-10

-15

0

Source: ONS

Percentagechangeover12months

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travelcosts

Personalgoods

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Householdgoods

Householdservices

Fuel&light

Tobacco

A

lcoholicdrink

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isureservices

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Catering

Food

Housing

Motoring

expenditure

Clothing&

footwear

All items +0.3%

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ALMOST 14,000 Britons lost theirhomes in the third quarter of 2009as mortgage lenders increased therate of repossessions, the FinancialServices Authority (FSA) revealed

yesterday.Repossessions rose 2.8 per cent

on the same period of 2008, but theFSA pointed out that the 13,987properties taken back by lenders

was five per cent down on the firstquarter of the year.

But the number of new arrearscases continued to fall, down by 10per cent in the three months toSeptember to 46,000 and the num-

ber of accounts in arrears had fall-en by two per cent over the quarter.

New advances totalled 40bn, anincrease of 20 per cent on Q2, butremain lower than the 61bnadvanced in Q3 2008. In a sign that

buyers are returning to the hous-ing market, lending for house pur-chase made up over half of all newlending for the second quarter in arow.

Meanwhile, the governmentreported that house prices rose fora fifth month in a row in October,rising 0.5 per cent on the monthand trimming the annual declineto 2.2 per cent. Analysts

warned that Octobers rise was lessthan half the 1.2 per cent increase

seen in September. Howard Archerat IHS Global Insight said: The gov-ernments data fuel our scepticismthat the house price rally seensince early 2009 can be sustainedfor much longer.

Admittedly, very low mortgageinterest rates are likely to remainsupportive for the housing marketfor some considerable time tocome, but other fundamentals arelargely unfavourable.

Housing market activity is stillat a low level compared to long-term norms, unemployment ishigh and still rising, earningsgrowth is low and falling, andhouse price/earnings ratios are cur-rently moving back up, he added.

Rate of repossessions risesas housing recovery slowsBY JESSICAMEAD

PROPERTY

MANY governments that currentlyenjoy triple-A ratings on their sover-eign debt will be forced to imple-ment credible fiscal consolidationprogrammes before their recoveriesare fully secured, ratings agencyMoodys warned yesterday in itsoutlook for 2010.

It is very likely that most govern-ments will not have the luxury to

wait until 2012 to start cleaning uppublic finances. 2010 will probablysee the inflexion point in highlyaccommodative policies, Moodysstrategists said yesterday.

While the finger has been point-

ed at both the UK and the US inrecent months, the ratings agency

did not name specific countriesthat would have to deal with thistough environment.

The team of strategists arguedthat many triple-A governments,including the UK and the US, can-not afford another financial crisis

because their shock-absorptioncapacity has been reduced.

Eurozone countries such asGreece, Portugal, Spain andIreland, which have seen their

budget deficits balloon, may findsingle currency membership a hin-drance in 2010, Moodys said.

While the euro has been protec-tive during the liquidity crisis, it

will not help these countries

rebound. Indeed, it could even be ahindrance.

Triple-A nations need to

tighten before recoveryWORLD ECONOMY

INFLATION accelerated in Novemberto a six-month high of 1.9 per cent ashigher energy costs fuelled price risesand pushed the rate closer to the Bankof Englands two per cent target.

The retail prices index (RPI), on which many wage negotiations arebased, moved back into positive terri-tory for the first time since last

January, jumping to 0.3 per cent from-0.8 per cent the previous month.

Petrol prices rose 2.8 per cent lastmonth (even though fuel and lightcosts were down 7 per cent on a yearago as graph shows), adding 0.4 per-centage points to the consumer pricesindex (CPI). But City analysts said fur-ther fuel price effects and reversal of

the VAT cut are projected to lift head-line inflation to 2.6 to 2.7 per cent.

But petrol was not the only drivingfactor consumer prices excludingenergy, food, alcohol and tobacco rose

an annual 1.9 per cent in November,and had VAT not been cut lastDecember, core inflation would proba-

bly stand at 2.7 to 2.8 per cent,Hendersons Simon Ward said. He fore-casts RPI inflation to reach four percent or higher by next spring: The

VAT reversal, energy effects and recov-ering house prices will push the head-line rise well above three per cent.

The Bank said in November that it would look through the short-termboost to inflation from higher energyprices thanks to the output gap, butmost analysts expect the Banks gover-nor Mervyn King to have to write a let-ter of explanation to the chancellor.

But Citigroups Michael Saunderssays sterlings depreciation will have alarger effect than some includingthe MPC expect. Only a small part

not even one third of the inflation boost from the pounds decline hasyet fed through to UK core CPI. Most ofthe effects still lie ahead and will con-tinue to boost inflation.

Inflation continues to accelerate,fuelled by bumper energy pricesBY JESSICAMEAD

UK ECONOMY

GERMAN investor confidencedeclined for a third consecutivemonth, raising concerns about theoutlook for recovery in Europeslargest economy. The ZEW index ofinvestor and analyst economicexpectations fell to 50.4 inDecember from 51.1 the previousmonth.

For the Eurozone as a whole, theeconomic expectations fell inDecember by 3.8 points to 48 points.But the assessment of the currenteconomic situation improved inDecember to -60.6 points inGerman. And for the 16 countries in

the Eurozone, the current assess-ment rose to -67.8 points.

Germans

less upbeatEUROPEAN ECONOMY

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FIGHTING BACKIts long been a source of frustrationamong commentators that, despitethe governments bombardment ofthe banks over the past year, barelyany of the City top dogs have beenbrave enough to stick their heads overthe parapet and defend themselves.

Bob Diamond at BarCap probablycame closest to an impassioneddefence when he told a conferencelast week that the UK needs to make ita race to the top, not a race to the bot-tom; but even he was lacking thestern rhetoric that might make thegovernment sit up and think abouthow its actions are alienating the City.

So it came as a pleasant surprise toThe Capitalist to hear rumours of areport currently being prepared by atop accountancy firm on behalf ofsome of those banks includingBarclays itself and HSBC, neither ofwhich took a direct bailout in thecrisis examining the impactof the sector on the widereconomy.

In the muted world of bank politesse, thrustingconcrete evidence of sky-

high tax takes and co-dependent businessfortunes at the powersthat be is probably theclosest were likely tocome to a good old-fashioned two-fin-gered salute.

SANTAS SACKYesterday, a spend trendsurvey from brokerExecution revealed peopleare likely to reduce spend-ing on their Christmaspresents this year by 5 percent, down to a paltry373, and it appears highstreet woes arent going toend there.

The Wall Street Journalreports that part-time Santa

Clauses across the pond inAmerica are having a bleak

time of it this year as kiddies steerclear of asking for Playstations, iPods,

meerkat dolls (like golddust thisChristmas, say parents) and otherflash gadgets.

Apparently, more and more havebeen asking for basic items like socks,school shoes and even a magicpotion to turn parents into elves because they have lost jobs in therecession.

So much for festive spirit.

MEMORY LANEHow about this for a conundrum:$65bn Ponzi fraudster Bernie Madoffis still managing to con people out oftheir cash, even from behind jail-house bars.

OK, not really it isnt Madoff him-self, but merely a few reports ofcheeky auctioneers in the US beingcaught out flogging merchandise which ostensibly came from thehouse of Bernie and his wife Ruth, but may in actual fact have comefrom the junk yard. Scandalous.

However, those desperate to snapup a bit of history can still count oneBay, where The Capitalisthas discov-ered some new memorabilia treas-ures commemorating the biggestfinancial fraud of all time.

Recommendations include aBernie devil doll complete withcommemorative gold hammer tosmash in his smug face and, better,a porcelain wall urinal featuringMadoffs face for the eminently rea-sonable price of $2,500. Plus, ofcourse, the satisfaction of toiletary

retribution must be priceless

ORIENT EXPRESSIn zooms a missive from

Japanese restaurant chainPing Pong, which is peddlingits good deed for the year in

the form of a fundraisinginitiative in aid of the

Crisis homeless charity.Ping Pong

Spitalfields is prepar-ing luxurious

Christmas lunch pack-ages for next Monday,costing 150 includingfree delivery to City firms

by the firms board direc-tors on their bicycles (yes,really).

Perhaps the restaurantshould make its neighbourF&C Asset Management its

first stop-off, after the firmchose humble Ping Pong dimsum for its Christmas festivi-

ties this year in place of its usual

trip to the Dorchester ball-room?

BARROW-BOY BROKERS CONSIDERTHEIR CHANCES IN SLEEPY ZURICHEVER since inter-dealer broker TullettPrebon revealed on Monday it wouldallow its staff to relocate to morefavourable tax regimes if they wish toavoid the governments crackdown,the City has been a hotbed of gossipabout whether or not the move willindeed spark a much-feared exodus oftalent from our shores.

Inside the firm itself, however, Ihear its a completely different mat-

ter. Not only are Tulletts employeesbasking in the rosy glow of securitynow that theyve secured themselvesthe cushty option, theyre also havingsome pretty heated debate about theimpact a relocation might have onquieter corners of the globe.

Can you imagine if 500-oddmoney brokers suddenly upped sticksand descended on, say the sleepytown of Zurich? muses my man

behind the trading screens, mischie-vously. The local girls wouldnt knowwhat had hit them

Given the reputation of that partic-ular profession the heavy drinking;the East End barrow-boy banter; thepassion for frequenting Londonsseedier lapdancing joints TheCapitalist is rather inclined to agree with that sentiment. Perish thethought.

The ladies of quaint Zurich had better watch out Picture: ROBERT HARDING

The Capitalist10 CITYA.M. 16 DECEMBER 2009

EDITED BY

VICTORIA BATESGOT A STORY? [email protected]

City defender Bob Diamond

8/14/2019 CityAM 16/12/2009

11/24

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Instruction to your Bank or Building

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CREDIT rating agency Moodys yester-day put another four United ArabEmirates banks on credit watch as athe fallout from Dubais debt troublescontinues to affect the region.

Abu Dhabi Commercial Bank andits subsidiary ADCB Finance, theCommercial Bank of Dubai, DubaiBank and HSBC Middle East Limitedhave all been put under review for apossible ratings downgrade.

The move follows a $10bn (6bn) bailout from neighbouring AbuDhabi to help Dubai pay off its debts.

The emirate shocked global marketslast month when its flagship con-glomerate, Dubai World, said it wasstruggling with its repayments. Abu

Dhabi stepped in to help the companyrepay a bond that was due to matureon Monday. The Dubai World inci-dent will have further repercussionson the already weakened corporatescene. in Dubai, Moodys said.

Moodys downgrades four UAEbanks after Dubai debt crisis

DUBAI CRISIS


EUROPEAN insurer Swiss Life will cutits dividend payout ratio to between20 and 40 per cent until at least 2012in a bid to protect its balance sheet.

Switzerlands largest life insurersaid the move would strengthen itscapital base, an essential step, andrestore its A credit rating. CurrentlySwiss Life aims to pay out between 40and 60 per cent of profit in dividends.

The company also shifted up its tar-get for return on equity (ROE) tobetween 10 and 12 per cent for 2012, arange analysts said was ambitious.

Chief executive Bruno Pfister saidthe firm would not make bolt-onacquisitions but would try to groworganically by developing its distribu-tion channels, pushing its own prod-ucts through the likes of Germansubsidiary AWD.

Pfister said: We will ensure thatthe group grows profitably, despite

the increasingly tough competitiveclimate.Stefan Schuermann, analyst at

Vontobel, said: The new ROE targetof 10 to 12 per cent for 2012 appearschallenging but achievable assumingstable financial markets and includ-ing the full impact of [Swiss Lifes]cost and growth initiatives.

Earlier this year Swiss Life kickedoff a CHF400m (236.7m) cost savingprogramme, cutting 500 jobs to bal-ance losses from asset write-downs.

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INSURANCE

Many Arab emirate banks are being affected by the Dubai debt problem Pic: REUTERS

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EUROPES largest tourism group,German owned TUI reported a drop inits nine-month financial year earningsbut claimed the fall was just a blipbefore recovery.

Underlying profits ebbed down by1.2 per cent compared to 2008, withoperational turnover was hammered,reporting a -13.8 per cent decline to13.1bn (11.8bn) after customersdeserted overseas holidays.

However, the groups relatively stable performance was boosted by the1.1bn sale of its majority holding ofthe Hapag-Lloyd container shippingbusiness to a group of Hamburg-basedinvestors. This helped balance losses at

the groups main division, TUI Travel, which cut flights after waningdemand.

Analyst Martina Noss atNorddeutsche Landesbank in Hanoversaid: The only reason for the positive

result is the benefit from the Hapag-Lloyd disposal.

Yet TUI chief executive MichaelFrenzel was positive about the groupsnear future prospects. Even if 2010 will continue to be impacted by theglobal economic crisis, we expect oper-ating earnings in our core business topost a stable performance, he said.

TUIs sales and earnings in the nextfinancial year, Frenzel said, are expect-ed to climb provided the economypicks up again.

KRAFT Foods yesterday hit back atCadbury for rejecting its 10bn hostilebid, warning shareholders not to puttheir faith in the British companysambitious growth targets.

The US food giant said the targetsset out by Cadbury on Monday to rallyshareholders against the bid weresubject to significant risk and uncer-tainty and that a merger of the twofirms would deliver more value thanCadbury could achieve on its own.

On Monday, Cadbury launched astinging attack on Kraft, calling its727p cash-and-shares offer derisoryand accusing the US food giant of try-ing to steal the company on thecheap. The board promised share-holders it would deliver on a set of newlong-term targets, saying a tie-up withKraft would damage its future growthpotential.

Kraft poured scorn on Cadburys

defence document. A statement fromchief executive Irene Rosenfeld saidCadbury was concentrating on targetsto 2013, but had not given perform-ance details for next year.

It also questioned whether Cadburycould achieve its targets to grow prof-

itability up to 2013 without more cost-ly restructuring. Cadbury haspreviously exceeded its restructuringcost targets, it said.

We have heard nothing fromCadbury that surprises us, Rosenfeldsaid. Cadburys defence documentonly reinforces our belief that there isa compelling strategic and financialrationale to combining these two com-panies.

Kraft labelsCadbury goalstoo ambitiousBYRACHEL STEVENSON

FOOD PRODUCERS

BYCHRIS KAY

LEISURE

Staycations taketheir toll on TUI

THE UKs biggest carpet retailer,Carpetright, laid out better thanexpected first-half results yesterday,but closed down its loss making opera-tions in Poland.

With more people moving house,underlying profits rose by 58 per centto 13.9m, with revenues increasing bynine per cent to 258m.

While opening 590 new storesacross Britain and Ireland, it exitedPoland at a cost of 2.5m. Its overallstore base in Europe decreased by 126.

Lord Harris of Peckham,,Carpetrights chairman and chief exec-utive, said he was pleased with theresults and the reduction of net debtby 23.7m to 73.4m. He claimed thatbusiness in Holland and Belgium was

still strong despite European salesdecline.

We have a good position to capi-talise on any improvement in tradingconditions. The planned withdrawalfrom our loss making operation inPoland will improve group profitabili-ty, he said. With overall sales up by 3.9per cent from -13 per cent last year thegroup increased the shareholder divi-dend two-fold to 8p.

Carpetrightpiles on profitand closes downits Poland stores

RETAIL

Lord Harris of Peckham is pleased with results Picture: VISMEDIA

NEWS | IN BRIEF

Whitbread gets coffee upliftLeisure group Whitbread said its coffeeshop operator Costa Coffee is to expandin eastern Europe by buying centralEuropean chain Coffeeheaven for 36m.Whitbread said Costa has agreed to pay24p a share in cash for Coffeeheaven,which the UK firm plans to use as aspringboard for growth in the formerEastern bloc. London-listed Coffeeheavenruns a chain of 90 coffee shops acrossPoland, the Czech Republic, Bulgaria,

Hungary and Latvia. Costa has 1,000 UKstores and 400 in 25 other countries.

Car registrations up in EuropeCar registrations in Europe acceleratedagain last month, as scrappage schemesacross the continent drove consumers tobuy new cars.November saw a 26.6 per cent surge innew cars registered, year-on-year, com-pared to a 25.8 per cent drop in thesame month last year. November thisyear had one more working day than lastyear, the data from EuropeanAutomobile Manufacturers' Association

(ACEA) showed, which contributed tothe increase.

Irene Rosenfeld, chiefexecutive of Kraft, saysCadbury targets aresubject to significantrisk and uncertainty

PROFITBEFORE TAX

58%

REVENUES

9%

EUROPEANSTORES CLOSED

126

COST OFLEAVINGPOLAND

2.5m

RIGHTIGHT

ANALYSIS l26 weeks ending 31 October 2009

ANALYSIS lTUI Travel

230

220

240

250

260

270

280

21 Sep 9 Oct 29 Oct 18 Nov 8 Dec

p 258.1015 Dec

8/14/2019 CityAM 16/12/2009

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PARTNERS at City law firm Lovellsand Washington-based Hogan &Hartson voted through merger plansto create the worlds ninth-largestlegal practice by sales yesterday.

The new firm, to be known asHogan Lovells, will have sales of1.1bn and 2,500 lawyers in 40 officesaround the world. The enlarged firmcomes into being on 1 May.

The merger is the biggest tie-up of aUS and a UK firm to date. In the pastUK firms have preferred to groworganically in America because offailed deals by big players in the earlypart of the decade.

The deal also signals that despite adownturn in the legal market somefirms are still bullish about thegrowth prospects for legal services.

Many firms have been forced to layoff lawyers and cut back on hiringdue to slowdowns in demand for cor-porate and litigation work. In the UKMagic Circle firms Linklaters and Allen & Overy this year both cutaround 850 jobs between them. As aresult, most law firms have beenwary of launching a merger.

Both Lovells and Hogan & Hartson

have strong banking and corporatepractices, and will also have sizeableregulatory, antitrust, intellectualproperty, real estate and litigationdepartments.

Lovells managing partner DavidHarris and Hogan chairman WarrenGorrell will take on the roles of co-chief executives until 2014. Lovellssenior partner John Young is set to become co-chairman alongsideHogan corporate and project financepartner Claudette Christian.

Harris said: The new firm willhave distinctive strengths. It will alsoprovide clients with access to consid-erable industry knowledge andresource in key sectors, includingenergy, financial services, telecom-munications, media and technology.

Lovells had turnover of 531m lastyear, while Hogan & Hartson, head-quartered in Washington, made salesof $922m (568m), making it the22nd largest law firm in the US.

PRIVATE equity industry veteran JonMoulton has raised 142.4m to investin struggling businesses through hisnew investment vehicle.

Moulton, perhaps best known forhis involvement in an unsuccessful bid to buy collapsed Midlands carmaker MG Rover, will advise BetterCapital, which will list on the

Alternative Investment Market (AIM)on tomorrow.

The groups adviser and broker willbe Numis Securities.

Moulton said the fund would takefull advantage of turnaroundopportunities in the downturn.

The firm will target distressed com-panies in the UK and Ireland.

Moulton sounded out investors forthe vehicle after a troubled split withformer colleagues at AlchemyPartners in September.

Moulton said last month that he

would put a material amount ofmoney into the new venture, but he

declined to say how much.Moulton will keep 10.5 per cent of

Better Capital. Other investors willinclude Ruffer InvestmentManagement with 29.5 per cent,BlackRock Investment Management(UK) with 9.8 per cent, ScottishWidows Investment Partnership with9.8 per cent, Aviva Investors GlobalServices with seven per cent, ArtemisInvestment Management holds 4.2per cent, Baillie Gifford & Co with

four per cent and Merseyside PensionFund with 3.5 per cent.

Moulton raises 143m for investmentvehicle to target distressed companies

MOUCHEL, the government and high-ways services company, saw its sharesgain yet again yesterday, as largerrival VT Group put out a statementasking why the group had rejected itstwo takeover bids.

The shipbuilder-turned-defencegroup yesterday confirmed it had bidfor Mouchel twice, with the secondoffer at 260p a share on 2 December.The offer consisted of 0.475 new VTshares for each Mouchel share, with a

50 per cent cash alternative, butMouchel said the bid undervalued it.

Mouchel gained 3.4 per cent yester-day, after around a 20 per centincrease on Friday and a 25 per centincrease yesterday.

VT and analysts say the movewould make strategic sense. The com-pany, which recently sold off its his-toric shipbuilding arm, is seekinganother meeting with Mouchel tounderstand the basis of its rejection,and work towards a recommendedoffer.

VT seeks answers on whyMouchel rejected its bid

SUPPORT SERVICES

GAMING and bingo group Rankdemanded 25.9m in overdue VATpayments from Her MajestysRevenue & Customs (HMRC) yesterdayafter a tribunal ruled again in itsfavour.

The tribunal concluded that thegroup had been overcharged overtheir gaming machines between 2003

and 2005.Rank has now called for HMRC to

repay the money within the firstquarter of next year. The decision fol-lows an interim ruling from theTribunal in August 2008 that the UKs VAT treatment of amusementmachines contravened the EuropeanUnions principle of fiscal neutrality.

This latest ruling confirms,amongst other things, that the ruling

is valid for the full three years ofRank's claim period, the statementsaid. HMRC is set to take Rank to theCourt of Appeal in April 2010 in ahope to overturn the tribunals gam-ing machine decision and anotherjudgement over 59.1m of VAT paidon bingo that went in Ranks favour.

Rank submitted a new claim for16m of overpaid VAT on its mainstage bingo business from 2004.

Rank demands 26m in overdue VATpayments from the tax authorities

LEISURE

ELENA Ambrosiadou, one of the best-paid and most successful female

hedge fund managers in the world, will be going solo after husbandMartin Coward announced a shocksplit from his position at Ikos yester-day.

Coward, the chairman, chief finan-cial officer and a former GoldmanSachs employee, formed the otherhalf of the power couple who found-ed Ikos in 1992, one of the first hedgefunds set up in London.

Yesterday he declared his inten-

tions to Albourne Partners, an onlinecommunity of people in the hedgefund industry.

He said: I have decided to leaveIkos to recreate my vision of aresearch focused team with talented,experienced professionals. I plan toestablish a smaller investment man-agement company to manage family

and other assets.Greek-born Ambrosiadou clipped

her comments following the surpris-ing news and simply stated that:Martin is serving up to 12 months

notice with further agreement andgoodwill.Her husband, though never as

high profile a character within theCity as Ambrosiadou, neverthelesswas a vital part of the hedge fundsoperations.

The pioneering Ambrosiadou wasalso one of the first hedge fund man-agers to move pieces of her businessaway from London to countries suchas Cyprus and the Cayman Islands.

Ikos split unsettles investorsBY CHRIS KAY

HEDGE FUNDS

Lovells hits

legal top 10with US dealBYROGER BAIRD

LEGAL SERVICES

BY PHILIPWALLER

FINANCE

BEST OF THE BROKERS

ANALYSIS lF&C Asset Management

70

74

78

82


p67.9515 Dec

F&C ASSET MANAGEMENTSinger Capital Markets trimmed estimateson F&C yesterday following a pre-closebriefing with the company, to reflect slight-ly higher variable staff costs. But the bro-ker said the share price remains at adiscount within the sector after a year ofstrong fund performance. It kept its buyrating with a target price of 95p.

ANALYSIS lDeutsche Bank

46

50

54

58

28 Sep 19 Oct 9 Nov 30 Nov

49.5015 Dec

DEUTSCHE BANKAfter an investor day on Monday, Evolutionsaid Deutsches potential share value is notbeing realised due to legacy issues and itscapital deficit, estimated to reach 4.7bn(4.2bn) in 2011. The broker kept Deutscheas a buy after the bank set ambitious tar-gets for 2011, when it expects operatingdivisions to make 10bn in pre-tax profit.

ANALYSIS lSports Direct

94

98

102

106


p97.3515 Dec

SPORTS DIRECTInvestec yesterday upped forecasts on sportretailer Sports Direct in line with its hikedestimates and improved cashflow. However,despite raising its price target to 65p, thebroker kept its sell rating on the stock,claiming increased competition from JJBmeans Sports Direct will have to reinvest inits stores to keep leading brands on side.

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

Lovells managing part-ner David Harris willbecome joint chiefexecutive in theenlarged firm

Martin Cowardrevealed his plans toleave Ikos to an onlinecommunity of hedgefund people

Founder and chief executive ofNumis Corporation, Oliver Hemsley,is leading the brokers team advisingBetter Capital.

Hemsley set up Numis in the early1990s and has built it into one of thelarger independent UK stockbrokers.

Hemsley is married with threechildren and lives in London andDorset. Numis corporate brokersDavid Benda and Nathan Brown will join Hemsley in advising Better

Capital.

The firm, which has about 180staff, has offices in London andNew York. It has more than 120 cor-porate clients including 16 FTSE250 firms and a strong balancesheet with more than 70m of cash.

Its clients include online bettinggroup PartyGaming, pub groupPunch, retailer Mothercare, onlinefashion retailer Asos and SVGCapital.

It says it is ideally placed tohelp British companies through thecurrent difficult trading.

Numis, which has raised 353mof equity funds for corporateclients, posted full year losses of10.5m earlier this month due toinvestment losses and sharescheme charges, but said it hadmade an excellent start to the new

financial year.

OLIVER

HEMSLEY

NUMIS

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TRAIN and bus operator NationalExpress has secured 90.47 per centacceptances for its 360m rights issue with the backing of its biggestshareholder the Cosmen family.

The cash call was made in a bid totackle the companys 1.1bn debt.

Global co-ordinators Bank of America Merrill Lynch and MorganStanley will now try to offload theremaining 34m shares.

Deputy chairman Jorge Cosmen,who had been at war with the rest ofthe companys board and threatenedto boycott the issue, took part.

He had supported a takeover bid byrival Stagecoach but finally backedthe cash call - spending 74m on theissue. His family owns 18.5 per cent ofthe group.

National Express has been hit by aseries of setbacks which have forced itinto the issue.

It handed over control of the EastCoast Mainline route to the govern-ment on 13 November.

The company will also be strippedof its East Anglia franchise when itsdeal expires in March 2011.

The group has not had a chief exec-utive since Richard Bowker quit inthe summer.

Last month, executive chairman, John Devaney, said the fundraisingsignificantly reduces the groups netdebt to a more sustainable level andallows management to focus on valuecreation for shareholders rather thanshort term debt management.

We have substantial confidence inour future and believe that theactions we are taking to strengthenour balance sheet provide us with theflexibility to pursue the groupslonger term growth objectives andmaximise shareholder value.

He walked away from merger talkswith Stagecoach in October.

Meanwhile National Express facedhuge fines for failing to make repay-ments on loans by the end of the year.The cash call will ease the pressure onrepaying debt.

TRANSPORT group Go-Ahead said yes-terday that first-half profit at its railunit would be 50 per cent down onlast year due to reductions in govern-ment subsidies, but added that its busbusiness was performing well.

The company, which operates itscommuter rail franchises throughmajority-owned joint venture Govia,expects operating profit at its railunit to be broadly half the 34.9m itreported last year.

We continue to believe that theeconomic climate will remain diffi-cult and we will take managementaction accordingly, Go-Aheads chiefexecutive Keith Ludeman said.

We expect our bus operations toremain strong in the second half ... inrail, we expect revenue growth beforeinitiatives to be modest in the secondhalf given the low fare increases inJanuary 2010, he added.

The group also said passenger num-bers were growing steadily across therail business.

The firm, which operates bus com-panies and runs three London railfranchises, said first-half bus revenueswould be seven per cent higher thanlast year but that its fuel costs for theyear were hedged at 47 pence per litrecompared to 43 pence last year.

Go-Ahead said it would likely spendaround 70m on acquisitions andinvestments in the full-year.

Go-Aheadpessimistic

on rail armTRANSPORT

Shareholders

back NationalExpress issueBY JOHN DUNNE

TRANSPORT


Airline returns are coming down, with expected losses up 47 per cent Picture: PA

JefferiesThe bank has appointed Peter Timpsonas a senior vice president for emergingmarkets trading, focusing on centraland eastern Europe, the Middle East

and Africa.Timpson joins from Dresdner

Kleinwort, where he worked for tenyears as head of emerging marketsexternal debt trading.

He also previously spent time at

Morgan Grenfell / Deutsche Bank infixed income emerging markets trading.

Watson WyattPaul Herbert has joined the consultancyfirm from Hewitt Associates asEuropean head of investment consult-ing.

Herbert has 12 years of experienceand, in his new role, will be responsiblefor advising pension funds on the vari-ous aspects of their defined contribu-tion investment strategies.

Socit GnraleSocGens corporate and investmentbanking division has appointed DonatoGonzlez as chief country officer forSpain and Portugal, effective from 1

January.Gonzlez began his career with

Banesto Bolsas equity department andmoved over to SocGen in 1994.

In 1996, he became the chief execu-tive officer of Socit GnraleSecurities Spain, before taking respon-sibility for equity capital markets andmergers and acquisitions in 2002 andbeing appointed head of coverage andinvestment banking for Spain andPortugal in 2006.

DHLThe express and logistics firm has hiredRob Siegers as chief operating officerfor its global customer solutions (GCS)organisation.

Siegers, 57, a Dutch national, has

over 30 years of experience in the logis-tics and transportation industry. Hisprevious positions include a stint aschief operating officer of Deutsche PostEuro Express.

T. Rowe PriceThe investment management group hasappointed Mike Gitlin to succeed MaryMiller as director of its fixed incomedivision.

Gitlin, who joined the firm in 2007, iscurrently global head of trading.Miller has decided to step down afterbeing nominated by President BarackObama in October to become the nextassistant secretary for financial mar-kets at the US Department of Treasury,subject to final US Senate approval.

CITY MOVES | WHOS SWITCHING JOBS Edited by Victoria Bates

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

PricewaterhouseCoopersThe accountancy giant has hired three partnersto its financial services consulting practice.

Kevin Burrowes, pictured, rejoins the firmfrom Credit Suisse, where he was head offinance for the EMEA region.

Steve Davies returns to the UK after tenyears at PwC in the US, while Wolfgang Riederrejoins from Bank Vontobel, where he was headof transaction banking and external asset man-agement services.

Supermarkets score for both value and reputation

IN THE highly-competitive worldof supermarkets, there are twobasic types of brand: those whichare cheap and cheerful, which

focus on low cost while maintaining

reasonable quality; and those whichcost more but make a feature of thehigher quality products.

These show up very clearly in therespective average BrandIndex scores

from the start of November. Those in the first group, mostnotably Asda and Tesco, receive veryhigh scores for value, but very lowscores for corporate reputation. Onthe other end of the scale we seebrands like Waitrose and Sainsbury,whose reputation scores outweighconsumers opinion of their value.

However, one supermarket isleagues ahead of the others by thesemeasures, and proves that good

value is not the same thing ascheapness.

M&S A WINNING BRANDMarks and Spencer has long been a

BrandIndex star performer, but thisgraph makes clear how its branddominance breaks into its con-stituent parts.

Not only do people have a higherregard for Marks and Spencers repu-tation than any other supermarket bya considerable margin, it is consid-ered in the same bracket as Tesco andAsda in terms of value.

If this reputation sustains (andthere is no reason to expect it should

not), M & S should be able to look for-ward to an excellent trading periodover Christmas.

Things do not look quite so positivefor Waitrose. People have a high

regard for it as a company perhapsas a result of its employee-ownedstructure as part of the John Lewisgroup but its reputation for goodvalue is poor at +5.5.

WAITROSE VALUE NOT NOTEDThis is a cause for concern as we enterthe Christmas period still in themidst of a recession, and indicatesthat Waitroses essential range hasfailed to convince consumers that

Waitrose can deliver good value.Stephan Shakespeare is chief innovation

officer of YouGov and blogs at http://shake-speare.yougov.com

BRANDINDEX

STEPHAN SHAKESPEARE

AIRLINE losses caused by the reces-sion will be 47 per cent higher nextyear than the $3.8bn (2.3bn) previ-ously forecast by the industry,although passenger numbers are like-ly to be better than thought.

Carriers will rack up a total short-fall of $5.6bn in 2010, down from the$11bn loss expected in 2009, a revisedforecast by the International AirTransport Association (IATA) showed.

Passenger numbers are expected to

grow 4.5 per cent in 2010, above the3.2 per cent forecast in September.

Airlines have hit losses or seen prof-its slashed during the downturn asconsumers and businesses shun airtravel to save cash.

Geneva-based IATAs director gener-al, Giovanni Bisignani, said airlineswould stay firmly in the red next yearafter a 2009 he described as anannus horribilis for the industry.Bisignani voiced optimism, sayingsome key numbers in 2010 were mov-ing in the right direction.

Airlines set to incur farhigher losses next yearTRANSPORT

Jorge Cosmen hadopposed the cash callbut spent 74m on therights issue

Asda Tesco M&S Morrisons Sainsburys Waitrose

ANALYSIS lSupermarkets

10

0

20

30

40

50 ValueReputation

8/14/2019 CityAM 16/12/2009

16/24

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O

NE of the big stories of the past sixmonths has been the growth of thedollar carry trade. This tradingstrategy uses a low-yielding fund-

ing currency to purchase higher-yieldingassets. For most of this decade the yen has been the funding currency of choice asinvestors took advantage of Japanese inter-est rates that remained at or close to zero.Since the Federal Reserve Bank cut USinterest rates to 0.25 per cent, traders havebeen funding the carry trade with dollars.

But the latest data published by US reg-ulator CFTC shows that speculators havetrimmed their long positions in the yensince the end of November, suggestingthat investors are bearish. A weak yenboosts returns when you use it as a fund-ing currency for a carry trade.

So should investors be looking to pullout of their dollar carry trades and returnto the yen? Perhaps not or not yet, any-way. One of the reasons is volatility. The

carry trade thrives in a stable economicenvironment, because it is by definitionrisky. Not only do you have to take intoaccount interest rate differentials betweentwo countries, you also have exposure tocurrency fluctuations.

At the moment, volatility in yen crossesremains at historically high levels. Asgraphic one below shows, the volatility insterling-yen, although below its peak afterthe immediate aftermath of the collapseof Lehman Brothers, is still at the top of itslong-term range.

Furthermore, there is also a lot of polit-ical risk in Japan right now, especially sur-rounding the countrys fiscal position.

Japan has plunged back into deflation,its exports are stagnating and it needs todeal with a massive fiscal crisis caused bya ballooning public debt. Japan hasalready outlined an $81bn economic stim-ulus package, which helped put down-ward pressure on the yen after it reacheda 14-year high against the dollar. Anotherstimulus package is also in the pipeline.

All of this means that the yen remainsunattractive for carry traders and the dol-lar remains the wisest choice as volatilitylevels on dollar pairs have fallen at a fasterrate than on yen crosses.

There are three reasons for the dollar tobeat the yen as the funding currency ofchoice. Firstly, the dovish Fed. Obviously,low interest rates are a precondition of afunding currency, and the US looks

unlikely to raise rates any time soon.Bank of New York Mellon analyst Neil

Mellor says that the US is scared of enter-ing a 1990s-style Japanese lost decadewhere growth remained sluggish causingdeflation. The Fed will not raise rates (in2010), which means the yen wont returnto its position as the main funding curren-cy, he says.

Secondly, protectionist measures fromCongress could weaken the dollar in orderto boost demand for exports. Dollar weak-ness boosts returns when you sell it short.

Thirdly, the dollar could also benefitfrom the fact that the number of supportsthat boosted the yen carry trade in the

past are no longer present. The yens posi-tion as chief funding currency during theprevious carry trade binge was driven inpart by Japanese retail investors with ahigh savings rate. While interest rates inJapan remained extremely low, domesticinvestors looked elsewhere to try and findreturns. But this time domestic yen out-flows have not been as strong. The mainreason for this is a declining savings rate,which means the bulk of savings that pre-viously were available to pile into foreignassets is no longer available.

In fact, it is worth wondering whetherthe post-crisis world will lend itself tocarry trades at all. Most developedeconomies are being propped up by stimu-lus packages. These will not last forever. AsStephen Gallo of Schneider FX says: Thatis a huge risk (for the carry trade) as thestimulus wears off we will see a retrench-ment in asset prices.

Like all risky investments, the carrytrade hates an uncertain economic envi-ronment. But as we navigate our way outof the mess left by the financial crisis, it ispossible that calamitous events are stillpossible. Dubai World proved this. Thesesorts of events can only deter carrytraders.

Those who want to get in on the carrytrade might want to look at short-term versions. Schneider FX suggests goingshort the US dollar and long the South African rand, where investors can gainfrom the interest rate differential.

The return of the yen

carry trade is just hype

Investment | Foreign Exchange16 CITYA.M. 16 DECEMBER 2009

AS THE dollar maintains its fundamentals-driven rally for the second week in a rowand US economic data continues to sur-prise to the upside, the story in the Euro-

zone is becoming decidedly murky.Last week concerns about the fiscal integrity

of Greece weighed on the euro and on Monday,the Greek prime minister Andreas Papandreoutried to address some of the issues regarding thewidening Greek fiscal deficits that have put thecountrys sovereign rating at risk. However, evenif Greece manages to get its finances under con-trol, other members such as Spain, Italy andIreland face a tough year.

In addition to the worries on the fiscal front,

the euro could see further weakness if Europeaneconomic data starts to disappoint. The reboundin the 16-member union has been remarkablyresilient this year, despite the appreciation of itscurrency. However, as 2010 approaches, the dis-advantages of a high euro-dollar exchange ratemay finally be starting to weigh on growth. Thelatest report on industrial production for Octobersaw the first monthly contraction since April,suggesting that the sector will not contribute tofourth quarter GDP growth.

While the main event in the forex market willbe todays FOMC meeting, the more importantrelease could come on Friday when the Germansurvey of business sentiment is released. Themarket is expecting a slight improvement to 99from the previous months reading of 98.9. But ifit disappoints, it could signal that the Eurozoneeconomic recovery is running out of steam.

After failing three times at the $1.5000 levelover the past few months, euro-dollar nowappears unlikely to clear that figure before theyear-end. If US data continues to impress whileEurozone numbers disappoint, the nascent rally inthe dollar could accelerate, with the pair possiblytumbling to $1.4400 in thin holiday trade.Boris Schlossberg and Kathy Lien are directors ofcurrency research at GFT. Read commentary atwww.GFTUK.com/commentary or e-mail them [email protected].

BORIS SCHLOSSBERGDIRECTOR OF CURRENCY RESEARCH, GFT

ANALYSIS lVolatility in sterling-yen is historically high

28

24

20

16

12

8

36

32

40

44

2005 2006 2007 2008 2009 Wed 09/12/09

Implied volatility

Source: Bank of New York Mellon

EUROS LUSTREHAS STARTED

TO TARNISH

For the foreseeablefuture, the dollarremains the fundingcurrency of choice,says Kathleen Brooks

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17/24

EUROPEAN policymakers have beencomplaining about an overly strongeuro-dollar for weeks but it wouldappear that the price to pay for a weak

euro is sovereign debt fears and renewed jit-ters over the Eurozones banking sector.

While Greece is still struggling to bring itsdeficit under control, speculation thatAustrian bank Oesterreichische Volksbankenhas been put on a watch list by the centralbank Oesterreichische has denied prob-lems has revived fears of a Eurozone bank-ing crisis. And last weeks break higher onthe dollar index looks to have broken thedownward spiral in the US dollar over thelast nine months. All in all, the euro willremain under pressure as its strength startsto unravel and a break below $1.4480 wouldbe the first stage in a possible declinetowards $1.4110 in the near term.

A good time perhaps to start going longon the greenback? CMC Markets current

THE TIPSTER

JITTERS IN THE EUROZONES

BANKING SECTOR REVERSING

EURO-DOLLAR UPTREND

spread on euro-dollar is two basis points.The inexorable march higher in the

Australian dollar has ground to a halt overthe last few days as concerns about the out-look for growth in 2010 have crept into themarkets.

Whats more, the Reserve Bank ofAustralias (RBA) dovish minutes releasedyesterday did little to help the Aussie dollar-US dollar strengthen towards parity. As aresult, risky assets including the Aussiedollar could correct to the downside intothe new year. Capital Spreads is offering aprice of US$0.9066-US$0.9069 for the pair.

Euro-yen has remained rather direction-less since the early autumn and even thepositive news out of Abu Dhabi earlier thisweek was not enough to boost the euroagainst the Japanese currency.

Although demand for yen is likely toremain strong and problems in the Eurozonecontinue to suggest a longer-term movelower in the euro, the greater the problems,the larger the repatriation of euros is expect-ed to be.

Those traders searching for risk-rewardcould look to go long on euro-yen in thenear-term, entering the market at 130 witha close stop of 129 and a target of 138.

Spreadex has a spot euro-yen spread of130.47-130.53.

CITYA.M. 16 DECEMBER 2009 WHAT DOES 2010 HOLDIN STORE FOR TRADERS?SEE VOLATILE MARKETSIN TOMORROWS PAPER

17

FOREX FLASH

Dovish RBA bad news for AussieThe strong Australian dollar was hit yester-day by the latest minutes from the ReserveBank of Australia (RBA), which showed that

the decision to raise rates was a finely bal-anced one. Although there are further RBAhikes in the pipeline, the central bank isaware of the impact that the recent tighten-ing has had on the Australian dollar. TheAussie dollar has been trading at close toparity with the US dollar, but yesterdaysnews saw the greenback strengthen.

Brazilian real to underperform pesoBank of America-Merrill Lynch analystsforecast yesterday that Brazil will keep itsheadline interest rate on hold at a recordlow until 2011 because concerns of inflationin the Latin American country are exagger-ated. The benchmark Selic rate is currentlyat a historic low of 8.75 per cent. AnalystDaniel Tenengauzer said that the Mexicanpeso will outperform the Brazilian real andinvestors should go short on the real.

Greece and bank jitters hit euroThe euro slumped to a 10-week low yester-

day against the dollar on investors concernsabout the state of the regions banks andGreeces fiscal health. Investors were notconvinced by Greek prime minister GeorgePapandreous speech on Monday, where he

outlined spending cuts to bring his countrysspiralling deficit under control.

AAA countries under pressureTriple-A rated countries are likely to beforced to cut their budget deficits beforetheir economic recoveries are assured, rat-ings agency Moodys said yesterday in its

2010 outlook for sovereign debt. Rising bor-rowing costs will require countries such asthe US and the UK to contain their govern-ment debt and to engage in fiscal tightening,even if the recovery is not strong enough.

Greek PM George Papandreou Picture: REUTERS

For now, traders arenot returning to theJapanese yen.

Picture: ROBERTHARDING

17/11/09 24/11/09 01/12/09 08/12/09

ANALYSIS lTipping point for the yen as long futurespositions fall

13,198

48,750

65,224

73,793

48,754

13,51416,886

13,572

Short positions in non-commericialJapanese Yen futures contracts

Long positions in non-commercialJapanese Yen futures contracts

Source:CFTC

8/14/2019 CityAM 16/12/2009

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

3i . . . . . . . . . . . . . . . . . . . . . . . . 276 .40* 1.80 314 .80 108.663i Infrastructure . . . . . . . . . . . . .103.00 105.80 76.50A.B. Foods . . . . . . . . . . . . . . . . .817.50* +6.00 870.50 603.00Aberdeen Asset Man . . . . .. . . . .137.50* 1.00 155.60 93.00Admiral. . . . . . . . . . . . . . . . . . . 1110.00 1188 .00 793 .50Aegis . . . . . . . . . . . . . . . . . . . . . 116.10 0.30 122 .90 61.00Aggreko . . . . . . . . . . . . . . . . . . .825.00 +15.00 830.00 342.00Alliance Trust . . . . . . . . . . . . . . .312.00 1.30 325.20 233.00AMEC . . . . . . . . . . . . . . . . . . . . .755.00* 19.00 879.50 465.00Amlin . . . . . . . . . . . . . . . . . . . . . 365.40 +2 .30 400.00 291 .00Anglo American . . .. . . . .. . . .2639.00 +3.00 2766.00 906.00

Antofagasta . . . . . . . . . . . . . . . .929.50 15.50 959.00 367.75Aquarius Platinum .. . . . .. . . . .361.00 +8.50 392.20 128.85ARM Holdings. . . . . . . . . . . . . . .170.50 +0.70 179.00 77.50Arriva . . . . . . . . . . . . . . . . . . . . . 470.00 +2 .00 641.00 361 .00Ashmore. . . . . . . . . . . . . . . . . . .265.00 8.70 311.20 92.75Astrazeneca . . . . . . . . . . . . . . .2828.50 +17.50 2966.00 2126.00Atkins(Ws) . . . . . . . . . . . . . . . . .614.50 +2.00 747.50 415.00Autonomy Corp . . .. . . . .. . . .1512.00 16.00 1687.00 868.50Aveva . . . . . . . . . . . . . . . . . . . . .988.00 +37.00 1083.00 460.00Aviva . . . . . . . . . . . . . . . . . . . . . 379.10 1.40 474 .00 160 .10Babcock International . . . .. . . . .596.00 10.50 660.50 381.25BAE Systems . . . . . . . . . . . . . . .345.30 1.30 416.00 294.20Balfour Beatty. . . . . . . . . . . . . . .252.00 +0.20 346.18 243.40Barclays . . . . . . . . . . . . . . . . . . .284.55 7.10 390.00 47.30Barratt Development . . . . .. . . . .109.40 0.70 193.31 37.21BBA Aviation . . . . . . . . . . . . . . .155.60 +0.20 184.20 41.00Beazley. . . . . . . . . . . . . . . . . . . . 100 .30 +0.45 122.00 86.00Bellway. . . . . . . . . . . . . . . . . . . .729.50* 1.50 927.50 515.00Berkeley . . . . . . . . . . . . . . . . . . .820.00 +2.00 1071.00 716.50BG . . . . . . . . . . . . . . . . . . . . . .1091.50 +6.50 1180.00 836.50BHP Billiton . . . . . . . . . . . . . . .1901.50 4.50 1969.00 1025.00BlackRock Mining . .. . . . .. . . . .533.50 4.00 565.00 211.00BlueBay . . . . . . . . . . . . . . . . . . .310.90 +3.90 393.00 63.00BP . . . . . . . . . . . . . . . . . . . . . . . 579.00 2 .00 599 .30 400 .00Brit Insurance . . . . . . . . . . . . . . .185.70 +4.70 245.00 157.75British Airways . . . . . . . . . . . . . .196.60 4.40 243.30 111.30British Amer. Tob . .. . . . .. . . .1949.00 12.00 2012.00 1481.00British Empire Tst . .. . . . .. . . . .411.50* 0.10 451.80 304.00British Land . . . . . . . . . . . . . . . .442.70 2.20 535.26 295.00Britvic. . . . . . . . . . . . . . . . . . . . . 379.10* 8.90 402.00 204 .25Brown(N.) . . . . . . . . . . . . . . . . . .249.60* +4.60 275.80 183.75BSkyB . . . . . . . . . . . . . . . . . . . .570.50 1.50 593.00 398.25

BT . . . . . . . . . . . . . . . . . . . . . . . 141.30 1.70 151 .00 70.20Bunzl . . . . . . . . . . . . . . . . . . . . . 655.00* +1.50 679.50 473 .00Burberry . . . . . . . . . . . . . . . . . . .584.00 11.00 617.00 194.25Cable & Wireless. . . . . . . . . . . . .141.50* 0.20 170.00 125.10Cadbury . . . . . . . . . . . . . . . . . . .791.50 3.50 819.50 484.25Cairn Energy. . . . . . .

cityam 16/12/2009

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