NICK Clegg yesterday dealt a serious

blow to government unity by

announcing that the Lib Dems will
not vote in favour of reforms to
parliamentary constituencies after
Conservative backbenchers killed
plans to reform the House of Lords.
Visibly unhappy, Clegg said his
coalition partners had broken part
of our contract and were playing
pick and choose politics. As a
result he could not support plans to
create even-sized electorates.
Redrawing seat boundaries would
make it substantially easier for the
Conservatives to win a majority at
the next election and the party will
attempt to push ahead with the
reforms. But the row poses the most
serious threat yet to coalition unity.
Last night Conservative MP
Douglas Carswell told City A.M. the
government urgently needed a new
sense of direction: Weve got until
the beginning of September to
come up with a coalition
agreement Mk.II or itll be like the
last years of John Major all over
again.
BY JAMES WATERSON
US REGULATORS have accused
Standard Chartered of scheming with
the Iranian government to hide
$250bn (160bn) worth of transactions
and reaping hundreds of millions of
dollars in fees over nearly a decade.
Shares in the London-listed banking
giant dropped more than six per cent
last night after the New York state
financial services department alleged
that from 2001 to 2010 the bank rout-
ed 60,000 transactions for Iranian
financial institutions despite US sanc-
tions and then covered up these pay-
ments. The department, led by
Benjamin Lawsky, branded the bank
a rogue institution and has threat-
ened to revoke its US banking licence.
The order, released just before the
close of the London markets yesterday,
said: SCBs actions left the US finan-
cial system vulnerable to terrorists,
weapons dealers, drug kingpins and
corrupt regimes, and deprived law
enforcement investigators of crucial
information used to track all manner
of criminal activity.
It also quotes a senior Standard
Chartered official in London who,
upon being advised by a North
American colleague that its Iran deal-
ings could cause catastrophic reputa-
tional damage, reportedly replied:
You f***g Americans. Who are you to
tell us, the rest of the world, that were
not going to deal with Iranians.
The New York regulator has called on
Standard Chartered to explain the
apparent violations and demonstrate
why its licence to operate in the state
of New York should not be revoked.
A spokesperson for Standard
Chartered responded early this morn-
ing saying the firm strongly rejects
the position or the portrayal of facts
and ceased all new business with
Iranian customers over five years ago.
Standard Chartered is now the sec-
ond bank in two months to face US
criticism for lax money laundering
controls. HSBC was recently accused
by the US Senate of failing to prevent
money laundering from countries
including Mexico and Iran.
Joshua Raymond, chief market
strategist at City Index, said: This is a
very bad situation from a reputational
perspective in that not just they were
doing financial transactions with Iran,
which was subject to US sanctions, but
that they were trying to cover it up.
But at the moment we are only talk-
ing about New York, which is a fairly
small percentage of where their rev-
enues are from.
FTSE 100 5,808.77 +21.49 DOW 13,117.51 +21.34 NASDAQ 2,989.91 +22.01 /$ 1.56 unc / 1.26 unc /$ 1.24 unc
See Page XX
HYHYHY-
HYHYHY-
HYHYHYH
See Page 11
SHORTLISTS REVEALED
Certified Distribution
28/05/2012 till 01/07/2012 is 132,857
BY KASMIRA JEFFORD
ALLISTER HEATH: Page 2

THE MEDALS JUST KEEP COMING
www.cityam.com FREE
BUSINESS WITH PERSONALITY
ISSUE 1,690TUESDAY 7 AUGUST 2012
Standard Chartered PLC
10am 2pm 4pm 12pm 8am
1,540
1,560
1,580
1,600
1,480
1,500
1,520
p
1,470.00
6Aug
STAN CHART HIT
BYIRAN PROBE
Coalition in
crisis as Clegg
rejects reforms
EQUESTRIAN HEROES SEAL GOLD AS
KENNY PEDALS TO ANOTHER VICTORY
All the action from
yesterdays Olympics:
Pages 8, 13, 18, 19
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
TREASURY secretary Danny
Alexander yesterday played down the
importance of the UKs top-notch
credit rating, which could be
pressured as the government
struggles to achieve its deficit
cutting aims with the country stuck
in recession.
Chancellor George Osborne and
his Lib Dem deputy Alexander
stressed the need to support
economic growth alongside
reducing a hefty fiscal deficit, but
gave no suggestion that the
government would relax its
programme of cuts.
The credit rating is not the be-all
and end-all, Alexander told BBC
radio in comments broadcast
yesterday morning.
Asked about Alexanders
statement, Osborne said in televised
comments: Danny Alexander and I
completely agree. The credit rating is
important but its also important to
have the right economic policies.
Thats what really matters and the
credit rating reflects that.
Labours Rachel Reeves said: Just
10 days ago George Osborne
desperately tried to claim that a
statement from one credit rating
agency meant the world had
confidence in his policies, even
though Britain is one of just two G20
countries in a double-dip recession.
Osborne backs
Alexander on
UK credit rating
BY CITY A.M. REPORTER
Marginal seat up for grabs
after Mensch quits politics
DAVID Cameron yesterday endured
one of his worst days as Prime
Minister after one of his partys best
known backbenchers announced
she is to quit politics on the same day
that Nick Clegg torpedoed plans to
reform parliamentary constituen-
cies.
The surprise resignation of rising
star Louise Mensch will result in a
high-profile by-election that Labour
is likely to win, something the Prime
Minister would have been happy to
avoid.
In her resignation letter Mensch
said she had been struggling for
some time to combine her role as
MP for Corby with her family life
since marrying Peter Mensch, man-
ager of the band Metallica, who lives
in New York.
I am very sorry that despite my
best efforts, I have been unable to
make the balancing act work for our
family, she told the Prime Minister.
Cameron accepted her resignation
with regret, hinting that she may
have been in line for a ministerial
post: You have been a truly inspir-
ing Member of Parliament. It goes
without saying that I had wished to
see you serve for longer and at a
more senior level.
Labour is now favourite to win back
the bellwether seat, which has
KNIGHT Capital said yesterday that
a group of investors has rescued
the firm in a $400m (256.2m) deal
that keeps the embattled leader in
US equities market-making in
business, but comes at a huge cost
to existing shareholders.
Chief executive Tom TJ Joyce
said the new investors supported
him and his management team, but
it was too early to tell whether the
firm keep the same strategy it had
before last weeks losses. But there
were immediate signs the rescue
helped market confidence, as two
large brokerages resumed routing
orders through the company and
data showed volumes picking up.
Blackstone Group, rival market
maker Getco plus TD Ameritrade
Holding, Stifel Nicolaus, Jefferies
Group and Stephens purchased
preferred shares for what works
out to be a 73 per cent stake in the
company, Knight said.
The New York Stock Exchange
said it would transfer Knights
market-making responsibilities on
more than 500 stocks and related
Knight employees to Getco, until
the recapitalisation is complete.
Knights problems started last
week, when a software glitch
flooded the NYSE with unintended
orders for stocks, sending some
shares up more than 100 per cent
and leaving Knight with the loss.
Knight Capital
shares tank as it
secures lifeline
Louise Mensch said Cameron had been unfailingly generous and supportive to her
2
NEWS
BY CITY A.M. REPORTER
BY JAMES WATERSON
To contact the newsdesk email news@cityam.com
J
UST when it felt as if it couldnt
get any worse for the City, it is
now Standard Chartereds turn
to be engulfed in a major scandal.
The bank which didnt need a
bailout and is hugely successful
thanks to its emerging market focus
stands accused by US regulators of
having deliberately ignored
American sanctions against Iran and
other rogue states. It could face
massive fines, prosecutions and even
the loss of its critical US licence were
it to be found guilty as charged.
Regardless of what happens next,
and whether the US allegations actu-
ally stack up, this is a bitter blow for
what is left of Londons reputation as
a trustworthy centre for corporate fair
play and integrity. It is also a tragedy
for Standard Chartered, which until
last night was the last major UK bank
able to hold its head high. It is now
EDITORS
LETTER
ALLISTER HEATH
Another banking scandal was the last thing the City needed
TUESDAY 7 AUGUST 2012
going to have to fight, if not for its
very survival, then at least for its rep-
utation and that of its top executives.
Any company that breaks the law
should be punished severely.
In the past few weeks, many of
Londons most important financial
firms have faced crippling fines or
other major problems; the wholesale
markets as a whole are under investi-
gation; and the City is under attack
from all quarters, including Brussels.
This was the last thing London and
the hundreds of thousands of people
employed in the financial and busi-
ness services industries needed.
The New York State Department of
Financial Services 27-page attack on
the UK bank is written in typically
inflammatory language and contains
a number of devastating allegations,
suggesting that the bank was deliber-
ately falsifying the codes that would
normally identify Iranian clients
when money is wired internationally.
It also claims that those in charge of
the US part of Standard Chartered
had warned their London HQ to stop
dealing with Iranians. Standard
Chartered said in a late-night state-
ment that it strongly rejects the State
Departments portrayal. Deloitte was
also criticised by the US authorities
and will undoubtedly seek to put its
side of the story. It is worth remem-
bering that Standard Chartered is the
that has US operations. This is not
intended as a defence of any wrong-
doing in this case but is an important
caveat at this stage of the scandal. I
am often told by UK fund managers
and private bankers that they dont
want to have anything to do with the
US market and dont even want US
citizens as clients; this latest story
could reinforce this pernicious trend.
It will also fuel fears expressed
most recently to me by a top City
lawyer that the US has it in for the
UK and that it is now trying to put the
City back in its place. There is clearly
something to this, and I will return to
this theme but in some cases at least
UK banks have not been helping
themselves. All in all, another terrible
day for the City of London.
sixth foreign bank since 2008 to be
implicated by the US in dealings with
countries such as Iran. Barclays,
Lloyds, Credit Suisse and ING have set-
tled for a total of $1.8bn, while HSBC
remains under investigation.
I have nothing but contempt for
rogue regimes, especially Irans bar-
baric government. The EU now has
stricter sanctions against Iran, some-
thing that the US has operated for
years. It would be utterly wrong for
any UK bank operating on Wall Street
to have broken US law. But it is impor-
tant that the US authorities only pre-
vent foreign banks from dealing with
countries that they dont approve of
via their US subsidiaries.
There is a risk otherwise of extreme
extra-territoriality and of the US
imposing its foreign policy on every
single foreign company that has deal-
ings with any US citizen, let alone
always been held by the party of gov-
ernment. Mensch has a majority of
just 1,951 and it is the first time that
the Conservative party has had to
defend a seat in a by-election since
entering government.
The vote is expected to take place on
15 November.
Labour candidate Andy Sawford said:
During the by-election we will focus
on the two wasted years of Tory poli-
cies that have taken the country back
into recession and left Corby suffering
job losses in both the public and pri-
vate sector.
Elected as Louise Bagshawe in 2010,
the novelist was parachuted into the
marginal seat as one of the A-list
up-and-coming Conservative candi-
dates who bought into Camerons
modernising plan for the party.
After winning the seat from Labours
Phil Hope she actively courted press
attention, building up a dedicated
online following before rising to
prominence as part of the culture,
media and sport select committee that
cross-examined Rupert Murdoch over
phone hacking allegations.
DEBATE: Page 13

Facebook gambles on real cash with
bingo app
Facebook is venturing into the world of
online gambling with the launch of its first
application where punters can take a
stake on real money. Starting today,
Facebook will offer users in the UK aged
18 and over the opportunity to play online
bingo for cash prizes.
Nissan hails its rival to black cab
Nissan has unveiled what it says will be a
cleaner, more efficient version of
Londons iconic black taxicab, due to go
on sale from next year. The Japanese
carmaker yesterday showed a modified
version of the NV200, its boxy van which
was chosen last year as New Yorks next
yellow taxi.
Virtual Tesco in two-week UK trial
Tesci yesterday launched a two-week
virtual trial of the UKs first interactive
virtual grocery store at Londons Gatwick
airport which the supermarket group
believes could become the future of
shopping. Holidaymakers in the north
terminal departure lounge will be able to
browse 80 core products.
Pipeline in spotlight as Syrias civil
war intensifies
The boss of Genel Energy Tony Hayward
has stepped up security of a key pipeline
that runs north of the Syrian border after
admitting that he was very concerned
and worried about the escalating crisis.
More protection had been placed around
the Kirkuk-Ceyhan oil pipeline.
Compass will not duck this issue
Britains biggest catering company
Compass has added its name to the list of
food suppliers refusing to serve foie gras.
Spyker sues GM for $3bn over Saab
collapse
Dutch company Spyker alleges that
General Motors thwarted its efforts to
rescue Swedish carmaker Saab and is
seeking $3bn (1.9bn) in compensation.
Wall Street bankers face severe pay
cuts
Wall Street bankers look set to be hit by
severe pay cuts this year as the industrys
heavyweights come under pressure to axe
costs, recruiters have warned.
Apple to pull YouTube app
Apple plans to remove its YouTube app
from the iPhone and iPad, the latest sign
of a growing gulf between Apple and
Google. The firm said yesterday its licence
for YouTube has expired, meaning the app
will no longer be included.
Kodak patent opening bids low
Opening bids for Eastman Kodaks digital
patents were below the $2.6bn the
company said they could be worth, an
early sign the bankruptcy-court auction
may not leave much cash for the company.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
AMERICAN electronics retailer Best
Buy may be taken private after
founder and former chairman
Richard Schulze made an offer to
the companys board valuing it at up
to $9bn (5.8bn) yesterday.
Schulzes offer to buy the 80 per
cent of Best Buy he does not already
own sent shares in the retailer up 17
per cent, the companys biggest gain
in a decade, but they did not reach
the $24 to $26 he is offering.
Schulze laid out proposals for the
deal, which is being advised on by
Credit Suisse, in an open letter to
Best Buys board of directors. He
intends to contribute $1bn from his
current stake to the deal, with the
rest provided by private equity firms.
Best Buy said yesterday that the
board will review and consider the
letter in due course and that it will
evaluate this proposal carefully.
Schulze said: There is no question
that now is the moment of truth for
Best Buy and that immediate and
substantial changes are needed for
the company to return to its market-
leading ways. The retailer has strug-
gled in the face of competition from
cheaper online rivals, and reported a
Best Buy mulls
founders offer
to take it over
BY JAMES TITCOMB
$1.1bn loss last year, but Schulze
promised he had a plan to revive the
companys fortunes, saying the best
chance for renewed success is to
implement with urgency the neces-
sary changes as a private company.
Best Buy launched a joint venture
with Carphone Warehouse in the UK
last year, opening 11 stores, but they
were all closed after they failed to
turn a profit.
The two companies continue to
have a relationship, with Carphone
Warehouse due to sell in special
zones of Best Buys Chinese stores.
The British firms founder and chair-
man Sir Charles Dunstone told City
A.M. yesterday he didnt believe a
deal would affect the companies
working relationship.
After six years as a sales representative for
an electronics manufacturer, Richard
Schulze founded Best Buy in 1966. The 25-
year-old opened his rst store, then known
as The Sound Of Music, in his home town of
Saint Paul, Minnesota.
The store sold hi- equipment and was an
instant success, leading to Schulze opening
several other outlets in the area. In 1983 the
board changed the companys name
to Best Buy and two years later it
oated on the New York Stock
Exchange. By 1993 it had become
Americas second-biggest consumer
electronics retailer.
After 30 years as chief executive
of the company, Schulze
stepped down in 2002,
becoming the rms chair-
man. However, he was
forced to resign from his
position in May this year after an internal
investigation was launched into Schulzes
appointment of Best Buys then chief execu-
tive Brian Dunn. The probe found that
Schulze has failed to alert Best Buys audit
committee to the fact that Dunn was in a
relationship with a female colleague. Dunn
had resigned as chief executive a month
earlier.
Schulze continues to hold a 20 per cent
stake in Best Buy and remains on the com-
panys board. His tenure at the company
led to him amassing an estimated $2bn
fortune, and he was ranked as the 157th
richest man in America by
Forbes magazine last year.
The father of 10, now 71,
even has a day in his honour
in Minnesota, with 9
November designated as
Richard M Schulze day.
New chapter for publishing as
Amazon Kindle overtakes print
EBOOKS are outselling their printed
counterparts at Britains largest
bookseller Amazon for the first
time, the web giant has revealed.
Across Amazons UK operations,
114 Kindle ebooks have been sold
for every 100 hardback or
paperback editions this year. The
figures also showed that ereaders
are sparking a boom in total book
sales, with Kindle owners buying
four times as many titles whether
in print or ebook format as they
BY JAMES TITCOMB did before they owned the device.
Ebooks overtook print in 2010 in
the US, but Amazon said the market
had grown a lot quicker in Britain,
with the milestone coming just two
years after the Kindles UK launch.
To reach this landmark after just
two years in the UK is remarkable
and shows how quickly UK readers
are embracing Kindle, Jorritt Van
der Meulen, the vice president of
Amazons European Kindle division
said. He pointed out that the results
were not due to a decline in
physical sales, saying Amazons
print business continues to grow.
Amazon has dominated the
ebook market since the
introduction of the Kindle, with its
success attributed to the low prices
Amazon charges for titles, as well as
the flexibility of the system, which
allows readers to access Kindle
books on tablets and phones.
Amazon also runs a successful
ebook publishing operation, with
independent authors able to sell
their work. Three of the top 10
ebooks were sold via Amazons own
Kindle Direct Publishing operation.
HMV HIRES NEW FINANCE DIRECTOR
Best Buy Co Inc
1 Aug 3Aug 6Aug 2Aug 31 Jul
18
19
20
21
$
19.99
6Aug
PROFILE: RICHARD SCHULZE
TUESDAY 7 AUGUST 2012
3
NEWS
cityam.com
HMV is poised to
announce it has
poached Carphone
Warehouse
executive Ian
Kenyon to become
its new finance
director after David
Wolffe stepped
down from the
embattled music
entertainment
chain. Kenyon was
previously chief
financial officer of
Best Buy Europe
before it was closed
down in January.
He has also held
roles at Carpetright
and Kingfisher.
EUROZONE leaders continued their
public bickering yesterday after a
survey showed investor sentiment
across the single currency sinking
for a fifth straight month.
Concerns over the euro areas debt
crisis saw the latest Sentix index fall
to a score of minus 30.3 in August,
down from minus 29.6 in July, the
German group revealed.
The news came as reports in Italy
said that French President Francois
Hollande was pushing the country
to accept a bailout from its
European neighbours.
The previous day Italian techno-
crat Prime Minister Mario Monti
had insisted that Italy did not need
financial support from Germany,
telling a German newspaper that
his country only required Berlins
moral support.
Monti warned that tensions
between Eurozone states must be
eased in order to avoid a psycholog-
ical break-up of Europe.
Yet his concern was later brushed
off by a spokesperson for Angela
Merkels German government, who
called for a greater calm from fel-
low Eurozone politicians.
Euro politicians
fret as investor
morale slumps
BY JULIAN HARRIS The German government has not
the slightest doubt that all that the
European Central Bank (ECB) is
doing or will do, will fall within its
brief, Georg Streiter said, suggest-
ing that Merkel at least tacitly sup-
ports another round of bond-buying
by the ECB.
ECB interventions can buy the
time required for the ongoing and
impressive fiscal repair and pro-
growth structural reforms to work,
commented Holger Schmieding of
Berenberg Bank yesterday.
Meanwhile Merkels foreign minis-
ter, Guido Westerwelle, warned over
very dangerous tones being adopt-
ed by some Eurozone chiefs. We
must take care not to talk Europe
down, he urged.
Manchester Utd fans
target banks on float
THE BANKS advising Manchester
United on this weeks planned
initial public offering (IPO) in New
York have been sent over half a
million letters from activist fans
opposed to the listing.
Commercial associates of the club
are being targeted by supporters
angry with the policies of Uniteds
Glazer family owners.
The Manchester United
Supporters Trust (MUST) has called
for millions of fans around the
world to boycott the clubs sponsors,
BY JULIAN HARRIS
a move that could affect firms such
as Thomas Cook, Smirnoff and Nike.
As well as protesting to sponsors,
MUST have prompted over 500,000
fans to send e-mails of complaint to
banks involved in the IPO.
Lead underwriters Jeffries, Credit
Suisse, JP Morgan, Bank of America
Merrill Lynch, and Deutsche Bank
have seen their inboxes flooded with
missives from irate United fans.
Additional underwriters are also
on the receiving end of the e-mails,
which could total 750,000 before the
IPO is launched on Friday. These
include Aon Benfield, BNP Paribas, Many supporters have opposed the Glazers running of Manchester United Football Club
Economic condence is sinking in the Eurozone
Jul 12 Jan 12 Jul 11 Jan 11 Jul 10 Jan 10
20
15
10
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0
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S
e
n
tix
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TUESDAY 7 AUGUST 2012
4
NEWS
cityam.com
OVERSEAS investors have sent UK
office transaction volumes
soaring to their highest levels in
five years, figures published
yesterday show.
The second quarter of 2012 saw
the highest volume of office
transactions since the third
quarter of 2007 led by a surge of
foreign investors investing in
London offices, Aberdeen Asset
Management figures reveal.
Between 80 and 90 per cent of
UK office transactions now have
an overseas buyer compared to
UK office transaction volumes
reach highest level since 2007
BY MICHAEL BOW only 50 per cent five years ago,
with deals in London representing
over 80 per cent of all UK
transactions compared to two-
thirds in 2007.
Aberdeens Graham Porter said:
Overseas investors are propping
up the buy side for central
London offices, which they see as
a safe haven.
IPDs Greg Mansell added: City
offices present a conundrum in
the current climate, with
international buyers flocking to
them as safe haven assets, while
their own historic volatility shows
them to be anything but.
THE BLUEWATER shopping centre
in Kent is in line for an
expansion, after Lend Lease said
yesterday it has begun a
consultation on the move, which
the firm claims would create up
to 1,500 new jobs.
The Australian property firm
hopes to extend the 1.6m square
foot mall by around a fifth.
The application for such a
redevelopment will not be filed
until late in the year, however.
Bluewater is already among
Britains biggest shopping
centres, rivalling the Westfield
duo in central London.
Bluewater set
to get bigger
BY CITY A.M. REPORTER
HERITAGE Oil, the British oil
exploration firm led by former
security adviser Tony
Buckingham, yesterday
announced a $370m (237m)
rights issue to fund its expansion
into Nigeria.
The company, which yesterday
posted a $6.7m loss in its interim
results, will use
the capital
raised from
the rights
issue to
bolster the
$850m
purchase of
a 45 per cent
stake in
Nigerian Oil
Mining
Licence
Heritage Oil to
seek cash for
Nigerian fields
BY MICHAEL BOW (OML) 30 a licence for eight
Nigerian oil fields.
The firm is leveraging the deal
with a $550m bridging loan from
Standard Bank on top of the rights
issue.
The firm said the acquisition,
which was announced at the end
of June, would help transform it
from an exploration business into
a production outfit.
Buckingham said: The sheer
size and valuation of the oil fields,
based on the recently issued
independent reserves report, and
the use of debt to fund a
considerable portion of the
purchase consideration make this
transaction transformational.
Heritage will buy the stake
through a special purpose vehicle
alongside Nigerian firm Shoreline
Natural Resources. The idea needs
approval from shareholders.
BROTHERS Michael and Yoel Zaoui, two of Londons top investment bankers, may work
together via a company they have set up called Zaoui Capital, according to Companies House
filings. Goldman Sachs veteran Yoel Zaoui (pictured) retired from the bank, where he was
global co-head of M&A, in April, four years after Michael ended his long career at Morgan
Stanley. It is not clear, however, whether they will formally launch Zaoui Capital soon.
ZAOUI BROTHERS TEAM UP FOR NEW FIRM
Heritage Oil chief executive Tony
Buckingham is a former security adviser
ENERGY groups yesterday pressed
the coalition to stick to its plans to
reform the power market and
encourage green energy, or risk
billions of pounds of investments
in Britains ageing network.
National Grid boss Steve Holliday
said in a speech at the British
Business Embassy: Clean energy...
is going to be one of the defining
risks of the 21st century. We cant
afford any delays or confusion
about how committed the
government and regulators are to
this issue.
EDF, meanwhile, said it will make
a decision on whether to go ahead
Energy firms urge coalition to
press on with historic reforms
BY MARION DAKERS
with its new nuclear projects by
the end of the year, when a
planning decision is expected.
The energy bill must have made
progress by then, said the firms
managing director of nuclear new
build, Humphrey Cadoux-Hudson.
At a conference intended to
persuade investors and companies
of the strength of UK energy, Lib
Dem leader Nick Clegg joked that
the coalition partners offer
political stability some of the
time, anyway.
BP will today unveil a $100m
investment in a UK energy research
facility, while the coalition will
detail the next round of contracts
for the Cygnus gas field.
SHARES in Aim-listed explorer
Falkland Oil & Gas jumped as
much as 16.5 per cent yesterday
after the firm said it had entered
a farm-out agreement with an
affiliate of Noble Energy.
The company said Noble
Energy will take an investment
in 35 per cent of both Falklands
northern and southern area
licences, with a total investment
over the next three years set to
range between $180m (115m)
and $230m.
Meanwhile, it was reported
that Argentina will use YPF to
search for oil in the Falklands.
Falkland in
Noble deal
BY CITY A.M. REPORTER
TUESDAY 7 AUGUST 2012
5
NEWS
cityam.com
Q
Why is Heritage Oil interested in buying
the OML 30 oil fields??
A
It will increase its role as an oil
producer. The Oil Mining Licence
(OML) 30 area consists of eight oil
rich locations in Delta State, Nigeria.
It will send the firms production
capabilities soaring boosting its
current output of 567 barrels a day
to about 11,320 barrels a day.
Q
How has the $370m rights offering been
structured?
A
JP Morgan Cazenove will be
underwriting the share offering
as part of the $850m purchase. JP
Morgan Chase Bank has provided a
$215m bridge loan facility and the
proceeds of the rights issue will be
used to pay off this amount. Top JP
deal maker Barry
Weir has led the
process, backed by
Canaccord Genuity.
Q
Who is selling their stake in
OML 30?
A
Heritage will buy the 45 per cent
stake from Shell, Total and ENI.
The other 55 per cent is owned by
the Nigerian Petroleum
Development Company, a subsidiary
of the Nigerian National Petroleum
Corporation.
Q
Where and how could the deal get
derailed ?
A
Shareholders will vote on the
proposal at a meeting on 30
August. The Nigerian government
will also have to consent to the plan.
Q
A
and
Heritage Oils $370m new rights issue
IN BRIEF
Richemont predicts profit jump
nLuxury goods maker Richemont said
yesterday strong sales growth would
boost its half-year profit by up to 40 per
cent, helped by demand from emerging
markets and sales to Asian shoppers
visiting Europe. The Swiss-listed maker
of IWC watches and Cartier jewellery
said operating and net profit were likely
to increase by between 20 and 40 per
cent in the six months to the end of
September 2012.
BAE wins South Korea jet deal
nBAE Systems said yesterday its US
unit had won a contract to upgrade
South Koreas fleet of more than 130 F16
fighter jets. BAE said the exact value of
the project was still being negotiated
but that it is expected to be worth in
excess of $1bn, the lions share of which
will go to Europe's largest defence
contractor. BAE will install new
computers and operating systems in the
jets along with other work.
SAMSUNG has become the dominant
player in Europes mobile phone
market, grabbing almost half of sales
in the last three months, according
to data from market research firm
Kantar Worldpanel ComTech.
The Korean firms sales have been
buoyed by the release of its flagship
Galaxy S3 handset and the
increasing popularity of Googles
Android software, which runs on its
phones. Samsungs share in Europes
five biggest markets Britain,
Germany, Spain, Italy and France
was 45 per cent, up from 21 per cent
just a year ago. The rise has been
mirrored by Android, with phones
running the software accounting for
two-thirds of sales.
Samsungs success was bad news
for rival manufacturers using
Android, all of which have seen their
sales hit, as well as BlackBerry maker
Research in Motion and Nokia.
Apples share of the market also fell
ahead of the hotly anticipated
launch of the new iPhone this year.
Kantars global consumer insight
director Dominic Sunnebo said that
much of Samsungs sales were in
low-end handsets, with crisis-hit
countries Spain and Italy seeing the
most Android growth.
Samsung is on
top for mobile
sales in Europe
BY JAMES TITCOMB
INSURER Catlin announced strong
profits for the first half of 2012 yes-
terday, mainly thanks to the
absence of any natural catastrophe
claims during the period.
Pre-tax profits at the group hit
$231m (148m) for the six months
to 30 June, against a loss of $201m
for the same period last year.
This beat analystss expectations,
pushing the firms share price up
2.6 per cent to close at 443.3p.
Our business continues to grow,
with the London underwriting hub
producing meaningful growth for
the first time in five years along
with a good performance from the
rest of the business, said chief exec-
utive Stephen Catlin.
He also confirmed that his busi-
ness is seeking to expand its opera-
tions in growing markets, such as
Latin America and China.
The FTSE 250 company said it took
advantage of reduced competition
Catlin survives
catastrophes to
boost its profit
BY JAMES WATERSON
to push through an average price
rise of five per cent as its financially
weaker rivals wrote less business.
Aside from growth at its Lloyds of
London business, other highlights
include the firms US division,
which grew like-for-like gross premi-
ums by 10 per cent over the period
and a 14 per cent increase in busi-
ness written in the Energy and
Marine sector.
Catlin said it will increase the
firms interim dividend by five per
cent to 9.5p.
EasyJet boosts traffic
and passenger load
BUDGET airline easyJet said
yesterday that it carried 5.86m
passengers in July, an increase of
eight per cent on the same month
last year.
The firm also saw a lift in load
factor the proportion of
passengers to available seats to
92.5 per cent, an increase of 0.8
percentage points on the previous
year. EasyJets rolling totals show
57.8m passengers have flown with it
in the last 12 months, a jump of 7.5
per cent on the corresponding
period last year.
The firm saw strong demand on
beach routes due to an extended
period of poor weather in northern
Europe throughout June. But the
BY ALEX WOODALL
boost in passenger numbers was not
as high as last months 9.7 per cent
increase. A spokesperson attributed
the drop to people taking holidays
earlier in order to be back in the UK
for the Olympics, and said the airline
expected fewer people to be flying
out of Britain during the Games.
Chief executive Stephen Catlin founded his eponymous company in 1984
The budget airline that is taking
off in poor economic conditions
A
NOTHER month, another
sterling set of passenger figures
from easyJet. Far from wilting
in the heat of the Eurozones
latest financial turmoil, the carrier
has shone, with an almost unbroken
spell of traffic growth this year.
Whats more, a tight rein on costs
has prevented the sort of runaway
expenses seen at some of its rivals.
Airlines like to blame soaring fuel
costs like the weather for myriad
woes, but easyJet has managed to
more or less sidestep both problems
this year, after a bruising 2011.
Looking further out, its fledgling
campaign to target corporate
travellers has already made a mark on
the public imagination, with almost
three in ten believing easyJet offers
the best value for money for hard-up
business customers, according to a
recent survey by Liberum analysts.
This and other steps taken by chief
BOTTOM
LINE
MARION DAKERS
Catlin Group Ltd
1 Aug 3Aug 6Aug 2Aug 31 Jul
430
440
450
460
470 p 443.30
6Aug
EasyJet PLC
1 Aug 3Aug 6Aug 2Aug 31 Jul
560
565
570
575
580 p 570.00
6Aug
An impressive set of results. Catlin offers exposure to the sector at a low
valuation, strong top-line growth and improving credibility with
investors, all of which point to further stock outperformance.
ANALYST VIEWS

CAN CATLIN CONTINUE TO

GROW AT THE EXPENSE OF
ITS SMALLER RIVALS? by James Waterson
MARCUS BARNARD ORIEL SECURITIES
DATA services firm Telecity beat
expectations yesterday and
announced an investment in
Finland, a stepping stone to the
growing Russian internet market.
The company, which provides
carrier-neutral internet
connections, said revenues in the
first half of the year jumped 22.4
per cent due to a rise in data-
intensive cloud computing
systems. Shares leapt by seven per
cent on the news to their highest
point since the firms 2007 listing.
Telecity completed its 3.7m
acquisition of Helsinki-based firm
Telecity bets on Russian growth
as shares jump to record value
BY JAMES TITCOMB Tenue yesterday, a move designed
to take advantage of the increasing
internet activity between
European servers and Russia.
Eighty per cent of traffic between
Moscow and Western Europe goes
through Helsinki, [The deal]
expands our European growth
platform and allows us to serve
the growing demand generated
from the Helsinki internet hub,
chief executive Michael Tobin said.
The firms revenue was up to
137.3m while its operating profit
rose 30 per cent to 43.4m.
Telecity announced its first
dividend in February.
TUESDAY 7 AUGUST 2012
6
NEWS
cityam.com
Every little helps as Tesco tie-up
pushes up earnings at Ageas UK
AGEAS UK, the British arm of the
Belgian insurer, yesterday
announced a strong set of results
boosted by earnings growth at its
joint venture with Tesco.
Pre-tax profits for the first half of
2012 hit 64.1m, an increase of 81
per cent on the same period last
year while the total combined
ratio a measure of underwriting
profit dipped below the break-
even level and hit 98.8 per cent.
Tesco underwriting was
BY JAMES WATERSON
responsible for 17.2m of the
headline profit, although half of
this will go to the supermarket
giant.
The feedback we get from
brokers and quality brands is that
we continue to deliver, chief
executive Barry Smith told City A.M..
On private car insurance we have
close to 10 per cent of the market
share and we just continue to do
what weve done well in the past.
Smith has been involved in
discussions with the government
regarding a new agreement on
guaranteed household flood
insurance and he remains hopeful
that a deal will be struck in the near
future.
Its important that more work is
undertaken during the
[parliamentary] recess and we get
back around the table in September.
There is a willingness to conclude
the discussions, he said.
At a group level Ageas reported
net profits of 305m (242m) for the
first six months of the year
compared to a net loss of 59m for
the same period last year.
A good underlying underwriting result. Unlike Beazley and Hiscox we
do not see room for a capital return in the second half of 2012, expecting
Catlin to focus on growing volume in its international network.

MARTYN KING EDISON INVESTMENT RESEARCH

Catlins commentary on the rating environment appears slightly more
bullish than peers. If they can convince on this and drive attritional loss
ratio improvement, then we believe the stock could see some upgrades.

JOY FERNEYHOUGH ESPRITO SANTO

Carolyn McCall in the last two years
have lined up the carrier well for the
long haul.
Last week, the firm won the
blessing of advisory services Glass
Lewis and ISS for its chairman Sir
Mike Rake, who is feeling the heat
for his role at Barclays.
Activist founder Sir Stelios Haji-
Ioannou rightly continues to keep
close watch, but at least for now, his
list of grievances has been put in the
shade by a reliable operational
performance.
The Olympic Games have been a great
success in uniting the country. Theres
a real resurgence in British pride. The atmosphere
has been overwhelmingly positive given all the
initial pessimism and London has been a very
welcoming environment to the rest of the world.
These views are those of the individuals above andnot necessarily those of their company
ELLIOTT TIERNAN
QBE

The games are really bringing the

nation together despite all the
cynicism beforehand. Britain is being shown in
a fantastic light and everyone is right behind
the team, London is running smoothly and
everyone is in good spirits!
TIM POWELL
COUTTS BANK

I've been enjoying the Olympics a lot

with the excellent coverage and
theres great enthusiasm for Team GB and our
athletes. Its good to see everyone backing
Britain, but perhaps the British pride wont last
long after the Games.
ANDY HORRICKS
BW INTERIORS

DO YOU THINK THE OLYMPICS HAVE BROUGHT THE UK TOGETHER?

Interviews by Alex Woodall
CITYVIEWS
arit bellus
i comiter
P
ERHAPS hes been taking tips
from GBs medal-winning
gymnasts, because London
2012 chairman Lord Coe
pulled off a delicate balancing act
yesterday when asked about the
bottle thrown onto the track before
the mens 100m final on Sunday.
The alleged perpetrator
received instant and painful
retribution when the delight-
fully onomatopoeic Edith
Bosch, Hollands leading
female 70kg judoka, who hap-
pened to be sitting in the row
behind, responded by cuff-
ing him on the back.
The 6ft powerhouse
whose nicknames
include Bambi and
Forest took a break
from crime-fighting
to Tweet: A drunk-
en spectator threw a
bottle onto the
track! I HAVE BEAT-
EN HIM .... unbelievable. Coe, while
mindful to avoid advocating tit-for-tat
reprisals, neatly channelled the
inherent humour of the incident
when quizzed about the morning
after Usain Bolts dazzling title
defence.
Im not suggesting vigilantism,
he said. But it was actually poetic
justice that they happened to be
sitting next to a judo player.
Bolt, too, despite insisting he
didnt condone violence, couldnt
help breaking into a hearty chuckle
when asked about the kerfuffle
during his post-race media
conference.
A 34-year old man was
arrested and has plead-
ed not guilty to the
charge of a public
order offence.
Got A Story? Email
thecapitalist@cityam.com
8
cityam.com
cityam.com/the-capitalist
THECAPITALIST
TUESDAY 7 AUGUST 2012
AT LONDON2012
LONDON 2012 IMAGE OF THE DAY
GREAT Britains discus thrower Lawrence
Okoye will compete for a medal tonight after
reaching a distance of 65.28m yesterday,
qualifying for the final.
Throughout the Olympics, City A.M. will be
publishing its Olympic Image of the Day. If
you have a shot you think our readers will
like, please email pictures@cityam.com
Coe hails poetic
justice dealt by
Dutch judo star
Dutch judo star
Edith Bosch meted
out a swift rebuke
IF you thought Australia was having a terrible Olympics, you were right. But
things are only marginally better at ITV, where the networks main channel
ITV1 suffered its lowest ever daily audience share on Sunday.
BBCs blanket coverage of the Games has boosted its ratings to the extent that
digital-only BBC3 better known for reality shows but more recently home to
endless hours of Olympic-mania beat ITV1 in all-day viewing share for the very
first time, also on Sunday.
NEW car registrations spiked
upwards in July as a year of growth
for the automotive industry
continued to strengthen, with
luxury brands performing well.
Registrations jumped 9.3 per cent
last month to 143,884 vehicles,
according to the latest figures from
the Society of Motor Manufacturers
and Traders (SMMT) the sharpest
increase of any month in 2012 so far.
For the year as a whole, new car
registrations are up 3.5 per cent to
more than 1.2m, despite business
purchases falling 15.7 per cent.
This is a surprising result,
particularly given that it is the UK
consumer who is powering this
recovery, said John Leech, a partner
in KPMGs automotive practice.
Although consumer confidence
in the UK remains at a low level,
carmakers are offering a higher than
normal release of new models and
large discounts to consumers.
Registrations of Porsches rose
more than 41 per cent in July
compared to the same month a year
earlier, and are up by over 34 per
cent annualised for 2012 so far.
Total car registrations remain
down on pre-crisis peaks, however.
Consumer dip
defied by car
registrations
BY JULIAN HARRIS
HOUSE prices across the UK dived by
0.6 per cent last month, according
to a widely-regarded survey released
yesterday, with analysts warning
that the rest of 2012 will remain
gloomy for the sector.
Prices in three months to July
were flat compared to the previous
three months. Halifax, which com-
piles the data, said that prices
remain at a very similar level to the
summer of 2009.
With inflation sticking above the
Bank of England two per cent target
for much of the last few years,
house prices have dipped in real
terms although in some regions,
such as London, prices have held.
The Halifax survey shows house
prices in the three months to July
are 0.6 per cent lower than at the
same time last year. A year ago,
prices were falling at an annual rate
Slump expected
as house prices
tumble in July
BY JULIAN HARRIS of 2.6 per cent, the report added.
Matthew Pointon, property analyst
at Capital Economics, said: With for-
ward-looking indicators also weak
and if anything softening, house
prices are likely to show further mod-
est falls over the rest of the year.
The top line figure from the
Halifax echoes data released last
week by Nationwide, which showed
a 0.7 per cent drop in July. We
expect house prices to end up losing
at least thee per cent from current
levels, added Howard Archer of IHS
Global Insight yesterday.
Yet Duncan Stott from the Priced
Out campaign group said that costs
need to fall further to help prospec-
tive buyers: House prices may be
falling ever so modestly, but [real]
wages are also dropping. This means
first time buyers are no better off
and will be stuck renting until
house prices become substantially
more affordable.
RETAIL sales failed to significantly
recover last month despite
improved weather and the start of
the London 2012 Olympic Games,
figures from the industry have
revealed this morning.
Like-for-like sales in UK shops
were virtually flat in July, edging
up just 0.1 per cent compared to a
year earlier, according to the
British Retail Consortium (BRC).
On the BRCs annualised three
monthly measure, intended to
iron out volatility in the data, like-
for-like sales growth remains
sub-inflation, at 0.9 per cent.
Total sales, which include new
shop floor developments, were up
three per cent in the last three
months, compared to the same
period in 2011.
Yet Helen Dickinson, head of
retail at KPMG, remains downbeat.
Summer sun and Olympic fever
fail to reignite UKs retail sales
BY JULIAN HARRIS
Sadly July was a lacklustre month
and its doubtful this trend will
change as early expectations that
the Olympics will raise retailers
fortunes look to be wide of the
mark, Dickinson said.
Central Londons retailers are
already being hit hard by shoppers
actively avoiding the capital. Its
likely that any blip of benefit the
games bring will be short lived.
However, Stephen Robertson
from the BRC added that some
retailers have gained sales from
extended Sunday opening hours.
Easing food inflation has
resulted in the value of like-for-
like food sales rising at a slower
rate than non-food sales for the
first time since May 2010. The data
showed like-for-likes in food rising
by 0.9 per cent in the three
months to July compared to 12
months earlier, while non-food
sales were up one per cent.
US FEDERAL Reserve chairman Ben
Bernanke said yesterday that
although broad measurements of
the economy point to recovery, many
people and businesses are facing
tough times.
Even though some key aggregate
metrics -- including consumer
spending, disposable income,
household net worth, and debt
service payments -- have moved in
the direction of recovery, it is clear
that many individuals and
households continue to struggle
with difficult economic and
financial conditions, Bernanke said.
Bernanke was speaking on the
topic of measuring wellbeing. He did
not discuss the outlook for monetary
policy or refer to Fridays report that
the economy added a more-than-
expected 163,000 jobs in July even as
the jobless rate rose to 8.3 per cent.
Bernanke: US
still suffering
BY CITY A.M. REPORTER
3.5%
143,884
41%
New Car Registrations up in the year to date
cars registered in July
Top three cars sold so far this year:
Prestige car sales this year:
INDUSTRY HITS TOP GEAR IN JULY
Porsche: up
in July compared to a year ago
62%
Land Rover: up
in July compared to a year ago
84%
Lexus: up
in July compared to a year ago
67,103
52,956
48,595
Fiesta
Corsa
Focus
C17Y AM
9.3%
up on last year
TUESDAY 7 AUGUST 2012
9
NEWS
cityam.com
The new
jobs website
for London
professionals C
I
T
Y
A
M
C
A
R
E
E
R
S
.
c
o
m
Judge rejects claim that work
schemes are modern slavery
GOVERNMENT schemes designed to
help the unemployed gain work
experience are lawful, a judge ruled
yesterday, in a major victory for the
Department of Work and Pensions.
Graduate Cait Reilly won a
judicial review of one back-to-work
scheme after being told by a
Jobcentre that she must work
unpaid shifts at a branch of
Poundland or risk losing her
benefits.
Reilly argued that the scheme
breached article four of the
BY JAMES WATERSON
European Convention on Human
Rights, which prevents forced
labour and slavery.
However High Court judge Mr
Justice Foskett concluded that the
schemes are a very long way
removed from the kind of colonial
exploitation of labour that led to
the formulation of article four.
Characterising such a scheme as
involving or being analogous to
slavery or forced labour seems to
me to be a long way from
contemporary thinking, he added.
But the judge did conclude that
there had been failures in providing
clear information about the
schemes to participants.
Unemployed truck driver
Jamieson Wilson also participated
in the action, which was funded by
legal aid.
Work and pensions secretary Iain
Duncan Smith said: We are
delighted, although not surprised,
that the Judge agrees our schemes
are not forced labour. Those who
oppose this process are actually
opposed to hard work and they are
harming the life chances of
unemployed young people who are
trying to get on.
HOTELS in the capital suffered
lower occupancy rates in the first
six months of the year, PwC said
yesterday, revealing that the sector
was suffering even before the so-
called ghost town effect attributed
to the Olympic Games.
PwCs data showed an
occupancy slip of 1.2 per cent in
the six months to June,
culminating in a particularly bad
month for the industry.
[June] saw occupancy levels fall
by 8.4 per cent to 82 per cent,
against an average of 90 per cent
in June 2011, the report said.
Last week some hotel groups
Londons hotels knocked by a
drop in occupancy rates in 2012
BY JULIAN HARRIS
reported that business was
particularly slow for the time of
year, amid fears that the Games
have deterred regular tourists
from coming to London.
Yet the data held some good
news for hotels coffers, revealing
that average daily rates for visitors
were up by 1.8 per cent in the six
months to June, compared to the
same period in 2011.
Nonetheless, the sector must
hope that the Games prove better
than currently appears to be the
case. Will we see a post Games dip
or will the media spotlight
stimulate new visitors to the
capital? questioned PwCs head of
hospitality research, Liz Hall.
10
Morgan Sindall profits jump but
tough market conditions persist
BUILDING group Morgan Sindall
reported a 13 per cent leap in profits
yesterday despite weaker revenues
for the first half of the year.
The group, which has a host of
infrastructure and social housing
subsidiaries, said pre-tax profits had
shot up from 16.7m last year to
18.8m for the first six months of
this year despite an eight per cent
fall in revenues, down 87m to 1bn.
The firm maintained its 12p divi-
dend.
Executive chairman John Morgan
said: Despite the challenging eco-
nomic environment, we are encour-
aged by the continuing
opportunities in growth infrastruc-
ture sectors and we remain commit-
BY MICHAEL BOW
ted to investing in our regeneration
business to drive growth over the
medium to long term.
The firm reported a sound for-
ward order book with 3.2bn of work
in the pipeline, though this is down
from 3.5bn last year. The sector as
whole has seen activity fall in the first
half of this year.
Numis analyst Howard Seymour
said: Morgan Sindalls half year
results are slightly ahead of our fore-
casts for the half year, but this
reflects timing differences and we
are leaving full year estimates
unchanged.
In our view the company is trading
well against a backdrop of tough mar-
ket conditions.
Liberum Capital analyst Joe Brent
added the firms fortunes could be
tied to government private financing
initiatives.
He said: The order book has fallen
from 3.5bn to 3.2bn. Government
rhetoric is supportive but actions are
yet to show a benefit. We are still
waiting for son of PFI.
Shares closed down half a per cent.
IN BRIEF
Titanium manager fees on track
nAim-listed fund manager Titanium
Asset Management yesterday posted an
increase in assets under management
and uptick in fund manager fees.
Average assets under management
were $8.58bn (5.67bn) for the second
quarter of this year, up 1.8 per cent from
the same period last year. Titanium
chief executive Robert Brooks said:
The improvement largely reflects
higher investment management fees
and the ongoing benefits of the
significant reductions to our cost
structure that were implemented over
the last two years.
Chinese Origo funds dip in value
nChinese private equity investors Origo
Partners, which is listed in London,
reported a 4.8 per cent dip in its portfolio
values yesterday, falling to $227.7m
(149.5m) over the quarter as waning
commodity prices dented its mining
investments. The firm, based in Beijing
but listed on the Alternative Investment
Market, saw a drop in net asset values
per share from 67 cents to 64 cents. Chief
executive Chris Rynning said: Origo
remains confident in China's growth
prospects and we have both a strong
portfolio and a promising pipeline of
investment opportunities in China and its
neighboring territories.
Cognizant defies Indian tech gloom
nTech consultancy firm Cognizant
stood by its full-year revenue forecast
yesterday at a time when its Indian
peers have been painting a gloomy pic-
ture due to slowing global outsourcing
spending. Cognizant, which is based in
New Jersey but conducts most of its
operations in India, said it had become
the second biggest tech consultancy in
the country as it reported higher rev-
enue than rival Infosys for the first time.
Shares in the company rose 13 per cent
in trading yesterday as revenue for the
second quarter rose 20.9 per cent to
$1.8bn (1.15bn).
TUESDAY 7 AUGUST 2012
cityam.com
Riverview Law
Paul Bird has been appointed
finance director at the law firm.
He joins from Pearson Education,
where he was finance director
and company secretary at its
subsidiary, Education
Development International.
UBS Global Asset
Management
Stephen Hutton has been appointed head of UK wholesale at
the asset management firm. He joins from Zurich
Intermediary, where he was northern head of distribution and
platform proposition. Hutton has 25 years experience in UK
wholesale and has also worked at Fidelity International and
Scottish Widows.
KPMG
Robert Browne has been appointed as a partner in KPMGs
operations strategy practice. He joins after 12 years at Monitor
Group, where he led its European marketing practice. Browne
has also held economics roles at AT Kearney and BT.
JP Morgan Asset Management
Peter Pergovacz has been appointed to the asset
management firms global liquidity sales team, covering
Europe, Middle East and Africa sales. He joins from JP Morgan
Worldwide Security Services, where he was a relationship
manager.
Xenfin Capital
The FX trading firm has appointed Jamie Rose to the role of
head of e-FX. He was most recently head of e-FX at Marex
Spectron. Rose has also held senior client relationship roles at
FXall and Dresdner Kleinwort.
LV=
The insurance, investment and retirement group has
appointed James Dean as its audit committee chairman. He
has extensive experience in financial services, and was most
recently senior partner at Ernst & Young.
LONDONREPORT
US stocks end
at highest for
three months
U
S stocks closed at three-month
highs for the second day in a
row yesterday, extending last
weeks rally on the hope for
more assistance for the troubled
Eurozone.
The S&P 500 rose to its highest
point since early May, but pared its
gains going into the close. The
benchmark index also failed to
breach 1,400, a level that could spur
further buying if convincingly
broken. The S&P 500 hasnt closed
above the 1,400 level since 2 May.
Sentiment in Spanish and Italian
bond markets the forefront of the
three-year debt crisis improved,
with two-year Spanish yields falling
to 3.42 per cent on Monday, less than
half of a late July high of over seven
per cent.
European Central Bank president
Mario Draghi has said the ECB may
buy short-dated bonds to lower
borrowing costs to help Europe,
which has been mired in a debt
disaster. European shares closed at
four-month highs.
Nothing has been fixed in Europe,
but things seem to be getting better,
and it seems unlikely that there will
be any kind of real blow-up, said
John Manley, of Wells Fargo Funds
Management in New York. Im
worried I may be too bearish.
The Dow Jones industrial average
rose 21.34 points, or 0.16 per cent, to
13,117.51 at the close. The Standard &
Poors 500 Index gained 3.24 points,
or 0.23 per cent, to 1,394.23. The
Nasdaq Composite Index advanced
22.01 points, or 0.74 per cent, to end
at 2,989.91.
Material shares were the strongest
for the day, with US Steel surging 5.6
per cent to $22.94 and Newmont
Mining added 3.3 per cent to $46.12.
C
YCLICALS lifted Britains top shares
above 5,800 points for the first time
since May yesterday as investors bet
on eventual European Central Bank
action to curb high peripheral bond yields,
although low volumes showed not
everyone was convinced.
The FTSE 100 extended gains from last
week, helped by strong performances in
mining and energy, although uncertainty
over the detail and timing of any ECB
action kept some on the sidelines, adding
to the thin seasonal trade.
We have come up so far and so fast on
no real progress. I am very cautious about
going all in in this revival in the market.
Everything depends on the European
authorities and in particular Mario Draghi
following through with promises, said
Charles Stanley analyst Jeremy Batstone-
Carr.
The FTSE 100 ended up 21.49 points, or
0.4 per cent, at 5,808.77 after hitting its
highest point since early April in intraday
trade before coming off slightly into the
close. Volume remained weak at 71 per-
cent of its 90-day daily average.
Heavyweight mining and energy stocks
were among the sessions best performers
adding 13.5 points to the index.
Rio Tinto, up 2.6 per cent, added most
points to the index, closely followed by BG
Group, up 1.8 per cent.
While gains for heavyweight mining
firms helped the pan-European STOXX
Europe 600 Basic Resources index add 1.3
per cent by the close, it still remains the
worst performing sectoral index in the
year to date, down 2.4 per cent.
Marks and Spencer was among the top
gainers, based on speculation it could
become a bid target.
FTSE climbs to 5,800 as investors
bet on eventual ECB intervention
BESTof theBROKERS
HMV Group PLC
31 Jul 1 Aug 2Aug 3Aug 6Aug
3.65
3.60
3.50
3.40
3.45
3.55
3.30
3.35
p 3.50
6Aug
HMV
Seymour Pierce maintains
its sell recommendation
with a target price of 1p
for the music and
entertainment business,
based on fierce market
competition and the swift
loss of both its chief exec
and finance director.
DASHBOARD CITY
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
FTSE
31Jul 1Aug 2Aug 3Aug 6Aug
5,850
5,800
5,750
5,700
5,650
5,808.77
6 Aug
AstraZeneca PLC
31 Jul 1 Aug 2Aug 3Aug 6Aug
3,100
3,050
3,000
2,950
2,900
p
3,089.50
6Aug
ASTRAZENECA
UBS lists the pharma giant
as one of its top picks,
along with Novartis, and
predicts the generics
sector will see sales
growth of five to six per
cent in 2014-15. It sets a
target price of 3,600p,
with a buy rating.
Mediterranean Oil & Gas PLC
31 Jul 1 Aug 2Aug 3Aug 6Aug
13.50
13.25
12.75
12.25
12.50
13.00
11.75
12.00
p
13.00
6Aug
MED OIL AND GAS
Liberum has increased
its target price by 9p to
22p, with a buy rating,
based on Italian Prime
Minister Mario Montis
growth decree which
means an offshore ban
will no longer apply to
its licences.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
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TUESDAY 7 AUGUST 2012
11
CITYA.M. AWARDS2012 SHORTLIST
cityam.com
T
ODAYs shortlists for the third annual City
A.M. awards kick off with our nominations
for professional services firm of the year.
The UK and EU may be planning significant
shake-ups to the industry, but the firms on our
shortlist arent letting that worry them,
continuing to win bluechip clients, pursue
global expansion and pioneer employment
schemes while they wait.
Their broad offering of services means that pro-
fessional services firms have weathered the finan-
cial crisis better than some, as evidenced by the
roster of insolvency and restructuring mandates
that our nominees have won in the past year.
When not auditing the FTSE 100 and advising
on some of the years biggest M&A deals, the
firms on our shortlist are fielding teams to deal
with the fallout from some of the UKs (and the
worlds) biggest collapses MF Global, Farepak,
Dewey & LeBoeuf, the Coryton refinery and, of
course, Lehman Brothers. And its not just the Big
Four. McKinsey wins its spot on the list for its ster-
ling research and consultancy work.
They may be facing a slew of changes, but pro-
fessional services firms arent sitting around wait-
ing instead theyre hiring partners, growing
revenues and looking to overseas markets when
UK opportunities dry up.
HEADLINE SPONSOR
The big four firms may still be dominant, but that doesnt mean
theres not fierce competition among them for clients. This year,
Deloitte fared particularly well in the race for new mandates,
winning key clients International Power, Alliance Trust and Mitchell
& Butlers from its rivals. But for Deloitte this year will be defined by
one event the London 2012 Games. Signed up as a lead partner in
2003, the firm has estimated it has contributed more than 750,000
hours of work to help plan the 29 days of events that are
dominating the summer.
PwC
Regularly ranked as one of the best workplaces and the UKs largest
graduate recruiter, PwC upped its employee-friendly credentials
even more earlier this year when it launched its pioneering
apprenticeship as part of the governments 25m initiative
offering applicants the opportunity to work while studying for a
qualification equivalent to degree level. The firm has also grown
global revenues by 10 per cent last year, topping the table with a
turnover of $29.2bn.
Ernst & Young
The traditional pursuits of assurance and advisory were the big hitters
for EY this year, as the firm boosted revenues by eight per cent after
strong performances in each of the practice areas. The firm helped
find a buyer for Battersea Power Station in June, and over the past
year has acted as administrator for night club operator Luminar,
retailer TJ Hughes and real estate business DTZ. The ITEM Club, which
is sponsored by EY, remains at the forefront of independent economic
analysis.
KPMG
Just being European administrator to MF Global the commodities
brokerage that went bust last November leaving approximately $1.6bn of
losses would have been enough to keep KPMG busy this year. But when
WorldSpreads collapsed in March the firm was also brought in to clear up
the mess left by the spread betting group. It also saw a dramatic increase
in growth in its emerging markets practices particularly Brazil and India
and saw returns on its investment in China starting to seep through,
helping overall revenues rise by more than 10 per cent.
McKinsey & Co
The management consulting firms global insight has seen it produce some of
the most informative and relevant research available in the past year through
its McKinsey Global Institute from the impact of EU regulation on retail
banking profits to the amount that social media could add to the global
economy. Regularly named as a top place to work for both graduates and
female employees, its easy to see why the firm attracts candidates. Consider
the roll call of company chief executives it counts among its alumni including
Vodafones Vittorio Colao and Marius Kloppers, boss of BHP Billiton.
A
SUCCESSFUL campaign has the power to
become one with the company it
advertises, to end up as iconic as the
brand it represents.
The final shortlist for City A.M.s marketing
campaign of the year award attempts to portray
a snapshot of advertising in the last year, show-
casing a range of themes, designs, products and
platforms.
The nominees range from national household
favourite John Lewis to Danish online invest-
ment house Saxo Bank, covering global con-
glomerate General Electric, New York-based
Citigroup and classic watch designer Omega in
between.
From the commemorative to the forward-look-
ing, the informative to the emotive, the cam-
paigns focus on an array of achievements and
implement a variety of advertising media to take
their messages to the masses.
Despite having seen these adverts hundreds of
times, our hearts still leap when Saxo Banks
base jumper takes off, our minds still marvel at
Citis long history and GEs global stretch, our
eyes still mist at John Lewis family portrait and
our feet still tap to Omegas Olympic countdown.
John Lewis
Christmas campaign: The Long Wait
John Lewis reduced the nation to tears when it brought a little boy, impatient
for Christmas, to our telly screens. The 6m campaign, created by Adam &
Eve, saw seven year old Lewis McGowan drum his fingers and stare at the
clock as he waited for Christmas Day not so he could rip the wrapping off
his pile of gifts but so he could proudly hand his own present to his parents.
Set to a soothing cover of The Smiths Please Please Please, it has over 4m
hits on YouTube. It gets us every time.
Citi
Anniversary campaign: 200 years
Successful banking in any form is no mean feat in this day and age, let alone
200 years of it. So when Citi hit its bicentenary this year, the bank plastered
Tube stations and newspapers in a splash of self back-patting. Mapping its
route from its New York origin in 1812, Citi celebrated two centuries of
involvement in era-changing innovations such as the transatlantic cable, the
Panama Canal and the ATM. Hand in hand with ad agency CBS Outdoor, Citi
used its history as a launch pad for its new brand image.
General Electric
First UK advertising campaign
General Electric, one of the worlds largest companies, rolled out its first
ever British advertising campaign earlier this year to mark its sponsorship
of the London Olympic Games. Extolling its contribution to the UK over the
years through its businesses in the healthcare, transportation and
manufacturing industries, GE uploaded videos to YouTube and ran print
adverts in a range of newspapers. The campaign, created by AMV BBDO,
made the US conglomerate accessible for the UK consumer.
Saxo Bank
Mobile campaign: base jumping forex trading
Saxo Bank went to great lengths around 1,400m actually to show off its
new iPhone and Android foreign exchange trading app, in an advert thought
up by Hello Group. Executing what is believed, understandably, to be the first
ever FX trade at terminal velocity, Swedish stuntman Martin Rose n showcased
the app while base jumping. After leaping from a high peak in South Africa,
but before releasing his parachute, Rose n put through a 1m euro-dollar buy
order at a price of $1.26969. Forex trading has never been so thrilling.
Omega
Olympic Games campaign: Start Me Up
Helping the nation count down to the London Olympics, watch maker Omega
celebrated 80 years of timing the Games and Londons third time as host with
a head-banging commercial, created and produced in-house. Timed to exactly
one minute and set to classic Eighties track Start Me Up by the Rolling Stones,
Omega showed the preparation routines of a host of Olympic giants, mere
moments before the starting gun. The watch maker is understood to have paid
hundreds of thousands of dollars for the song. Quite rightly, too. Its spot on.
Deloitte
N
ASAS latest Mars explorer
has landed on the Red Planet
and so have I (or at least
my name has). The Mars
Science Laboratory, known
as Curiosity, carried a microchip
with the names of its mission
supporters, of which I am one. This
was my fourth landing on Mars, as I
also landed with two rovers in 2004
and the Phoenix lander in 2008. Im
also now en route to Pluto, but wont
arrive for three years.
Since weve sent rovers to Mars
before, why do it again? Its because
this vehicle is eight years more
advanced, and weve learnt a lot
from previous missions. We also
want to search in different locations.
Mars has as much land area as Earth,
T
ESCO has had a challenging
2012 to date. We saw the
rebasing of group earnings in
January; an unwelcome
slowdown in trading at loss-
making Fresh & Easy in the US;
decelerating trading conditions in
Central Europe; and impacts from
restrictions on large store opening
hours in South Korea its most
significant market outside the UK.
Among these challenges many of
which are outside Tescos control it is
pleasing to be able to record progress
at Tesco Bank, following the formal
announcement of its entrance into the
UK mortgage market.
Tesco Bank has delivered some frus-
trations for shareholders over the last
year or so, particularly in the slower
than anticipated migration from the
Royal Bank of Scotland platform.
However, Philip Clarke (group chief
executive) and Benny Higgins (Tesco
Banks chief executive) have been cor-
rect to make sure that its standalone
platform works. And the launch of
mortgages suggests this migration has
been effective. The competitiveness of
Spread betting
Trade today at www.cityindex.co.uk/dailyfact
The Germany 30 Index is on its longest
streak of consecutive weekly gains
(sixth week) since April/May 2009.
FACT OF
THE DAY
cityam.com/forum
Mortgages are a
marathon, not a sprint
banking heads arent in
a dash for market share
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

12
TUESDAY 7 AUGUST 2012
DARREN SHIRLEY
You can bank on Tesco to become
competitive in financial services
Tesco Banks mortgage proposition
will be measured in time, but its
approach to mortgages will likely fol-
low the broader context that has
served the business very well in many
markets over recent decades.
Shore Capital anticipates a patient
approach to mortgages that seeks to
be accessible by telephone and online
banking. Tesco Bank doesnt seem to
be any further on in deciding whether
or not to develop a branch network
within Tescos extensive UK estate; we
sense that it is more unlikely than like-
ly especially without a current
account capability.
Tesco Bank will likely offer simple,
relatively easy to understand products.
As such, Tescos mortgages are unlike-
ly to be at the racy end of the value
league tables in terms of rates charged
and collateral required. However, the
Banks offerings should be reasonably
priced. Underwhelming comments
from some personal finance commen-
tators on its initial product offering
shouldnt concern the Bank.
Mortgages are a marathon, not a
sprint product, and experienced Tesco
banking heads are not in a dash for
market share.
Tesco Bank has been conservatively
funded and will remain so in the
future. At present, the Bank is fully
funded by deposits and while we
expect modest access to wholesale
markets, conservatism will remain the
order of the day. Such a stance is likely
to limit the pace and magnitude of
growth of the lending book (including
mortgages). Risk management is also
expected to be tightly managed, draw-
ing upon all of its customer experience
and information, including the
Dunnhumby managed Clubcard data-
base.
Tesco believes, sensibly to our minds,
that it shouldnt assume any signifi-
cant shifts in its market share in bank-
ing due to the public mood. But it is
well placed to benefit from the antipa-
thy, nay hostility, to mainstream banks
in the UK. Tesco Bank, Metro Bank and
Virgin Money should see the financial
scandals as a favourable context for
entering the market.
From marketing and customer
attraction perspectives, Clubcard is a
central feature that should help the
Banks effectiveness on a relatively
low-cost basis. Rewarding loyalty are
watchwords used by Tesco Bank and
Clubcard features in the mortgage
proposition, with one point being
offered for each 4 of mortgage repay-
ments. The gentle expression of appre-
ciation, positioning Clubcard as a
thank you, rather than a come on,
has merit from a marketing perspec-
tive. Indeed, Clubcard is at the heart of
much of what Tesco is doing in the UK
at present.
Simplicity, accessibility, convenience
and attractive pricing with a little
thank you attached are mantras that
should lead to the building of a high
quality book in time; just as Tesco has
achieved a credit card market in the
UK, where its plastic is used in around
12 per cent of UK transactions.
However, it will take time. Current
accounts remain some way off, as
Tesco Bank awaits clarity on the gov-
ernments plans on account transfers,
which are far from straightforward
and easy at present.
Tesco Bank is a business that has the
scope to deliver incremental but
important growth; earnings that
become all the more important with a
mature core chain and leading posi-
tions already established in many
other international markets. Every lit-
tle helps.
Darren Shirley is food retailing and FMCG
analyst at Shore Capital.
so half a dozen spots are not going to
tell us everything about the planet.
The new site is Gale Crater. Its
154km in diameter, covering more
than six times the area within the
M25. The landing site is at the foot of
a mountain that rises 5.5km high.
The choice of site was based on the
aim to follow the water. Over the
years we have eliminated various
requirements for possible locations
for life, but the one that makes life
possible more than anything is
water. At Gale, it may have run down
into the craters bottom. Curiosity
could also explore its way up the
mountain-side, reaching elevations
much greater than earlier rovers.
However, getting there isnt easy.
Curiosity is about twice as big as
previous rovers about the size of a
Mini Cooper. It is also more than five
times heavier, with 80kg of
instruments, compared to 6.8kg on
previous landers. This has led to two
major differences. Firstly, the
instruments need more power than
solar panels can provide, so the rover
is provided by a radioisotope
thermal generator (RTG). Its power
wont be reduced by dusty solar
panels, but there is also a limit to
how long power can be provided.
The primary mission is due to last
for one Martian year 687 Earth
days. Although previous landers,
which were only guaranteed for 90
days, have worked for much longer,
once the RTGs output falls too low,
thats the end of the mission.
The other difference is the mass of
the craft. Its too heavy to land using
airbags and, if it landed with
rockets, they would have to be
carried around afterwards. Instead,
Curiosity used a method that had
never been tried on any previous
space mission, a Sky-Crane. After the
heat shield and parachute slowed
the craft down from 5.8 km/s to 350
kph, the rover was jettisoned, the
Sky-Cranes engine fired and it
lowered the rover on four tethers.
Once the rover touched the surface,
the tethers were severed and the Sky-
Crane flew off to crash. The signals
confirming the landing didnt reach
Earth until 14 minutes later, so
Mission Control was helpless if
things went wrong. Its no wonder
that entry and landing was known
as the seven minutes of terror.
Jerry Stone is a freelance presenter on
space exploration.
To learn more about Mars exploration,
the Mars Society UK 2012 Conference is on
25 August at the National Space Centre in
Leicester. It is 10 for the day. For further
details, email jstone@spaceflight-uk.com or
visit www.spaceflight-uk.com
JERRY STONE
Seven minutes of terror: Why Mars is the next frontier in the search for life
In association with
and CFD trading can result in losses greater than your initial deposit.
*1 point spreads available during market hours on daily funded trades and daily future spread bets and CFDs (excluding futures).
TRADE GERMANY 30
13
Time-saving tech
[Re: The technology paradox: It will kill jobs
but rescue Britains economy, yesterday]
I was rather suprised by Matthew Rocks
assertion that new technology kills jobs. If
that were the case, the invention of the
shovel would have led to economic decline,
by allowing one digger to get more work
done than many could with their hands. In
fact, new machines and devices provide
savings both in time and resources
which can then be passed across the
economy. Everyday essentials are cheaper,
customers spend their money elsewhere,
creating jobs, or put it in the bank to be
lent back to businesses and people. Those
who lose their jobs due to technological
advances ought to learn new skills.
MatthewFreedman
Digital limitations
This is a really interesting opinion. Rock is
probably right that retail shopping is declin-
ing because of the efficiency of internet
shopping. And, whereas technology always
promised to give us more leisure time, it has-
nt necessarily delivered that if anything,
we work just as hard, but in different ways.
Technological advances increase the expec-
tations we have of our standard of living. The
balance of everything has changed. But we
should consider the areas of our economy
that wont be easily improved by technology.
Its all very well dreaming of a future, where
businesses are lean and strong, but industries
like social care and food production likely
wont suddenly become more efficient
because of the internet.
AnnaWood
W
ITH London 2012 in full
swing, British sport is
entering a golden age.
Hosting an Olympic
Games offers huge
possibilities increasing the profile
of athletics in this country and
building a gateway for all the
aspiring young athletes coming
through the system.
Many young people watching these
extraordinary athletes will be think-
ing next time around its going to
be me. And you only have to look at
the stadium, pool and velodrome to
realise that one of the greatest bene-
fits of hosting the Games is that we
now have some of the best sporting
facilities in the world.
Many sports have suffered from
decreasing participation over the last
four years and hosting the Games
will help turn the tide. Cycling is a
clear example of how medals can
boost the profile of a sport. With
such great success in the Beijing
Games, the Tour de France and gold
medals so far for Bradley Wiggins,
Victoria Pendleton, the mens team
sprint, and the mens and womens
team pursuit, Im certain these out-
standing achievements from
Britains cyclists will prove to be a fur-
ther catalyst, encouraging participa-
tion and unearthing future Olympic
champions.
And its not just cycling. Jess Ennis,
Greg Rutherford and Mo Farah won
big over the weekend. Farah winning
the 10,000m is a massive achieve-
ment for this country. Prior to the
Games we had never won the
Olympic 5,000m or 10,000m, and
now weve got a man who has won
latter and has every chance in the
5,000m this weekend. While we have
depth in the sport now, the achieve-
ments of Britains medallists will
make us faster, higher and stronger.
We have already got some real stars
TOP TWEETS
The Olympics build peace between nations
and within them. London 2012 is likely one of
the reasons the riots havent been repeated.
@RowennaDavis
The Olympics are impressive, but Nasa has
just lowered a car-sized rover onto Mars, using
nylon strings attached to a rocket.
@CatherineQ
I wonder how Louise Mensch was struggling
to find family time, but could still send 22,000
Tweets and set up a new social media site.
@MrPaulStott
Nick Clegg has waved the white flag and sur-
rendered Lords Reform. Where does that now
leave the Lib Dems in coalition?
@KarlTurnerMP
As Louise Mensch steps down from politics,
should we regret the loss of maverick MPs?
YES
In a recent poll of the least trusted professions, politicians pipped
bankers and journalists to an unwelcome top spot. It reflected the
sad truth that many constituents have stopped listening to their
MPs, expecting to hear platitudes and meaningless promises. That
accusation is often unfair, but when few politicians are willing to
tell it straight for fear of reprisal its hard to see things changing.
Yet some have tried and succeeded. Boris Johnson, currently the
most popular politician in the land, is being touted for Number 10.
Kate Hoey and Frank Field command respect across the
Commons. And Louise Menschs rock n roll background and
social media savvy had bumped her up the reshuffle pecking
order. The stereotypical staid MP has played a large part in
disconnecting people from politics. We should celebrate those in
public office brave enough to stand out.
Dylan Sharpe is a consultant at Pagefield.
Dylan Sharpe
NO
Brendan ONeill
Louise Menschs decision to resign from Parliament, after just
two years, confirms that being a politician is just another job
these days. There was a time when politics was considered more
of a calling than a career, treated as a vocation that allowed you
to pursue your goals and ideals. Not anymore. Now its like
being a bank manager or cab driver: its something you try out
and then, on a whim, give up. In our post-ideological era, when
theres very little substance in politics, and therefore little sense
of commitment, MPs can come and go. Menschs weird two-year
stint in the Commons, during which time she managed to hit the
headlines without ever saying anything of note, points to a new
era of revolving-door politics, in which part-time politicians
seem more interested in improving their CVs than improving
society.
Brendan ONeil is editor of spiked online.
RAPIDresponses
Our gold medals
herald a golden
age for UK sport
in the making as we look ahead to
Rio 2016. Katarina Johnson-
Thompson (heptathlon), Adam
Gemili (sprinter) and Holly Bleasdale
(pole vault) have all shown at London
2012 that they could be serious
medal contenders in four years time.
The vital sponsorship money has
been there for the run up to the
London 2012, with the commercial
trend over the last five years seeing
national governing body righthold-
ers signing deals with one major lead
partner, who sponsors the sport
from grassroots through to major
events. With us at UK Athletics its
Aviva, tennis has Aegon, cycling has
Sky and swimming has British Gas.
A lot of these deals will come up for
renewal over the next 18 months, so
it will be interesting to see if the
rightholders and sponsors continue
this trend, or whether the commer-
cial landscape changes. For athletics,
there has never been a better time to
get involved.
After the Olympics, we have the
Commonwealth Games in Glasgow
in 2014 and the World
Championships in London in 2017.
Birmingham, Manchester and
Glasgow are investing heavily, build-
ing world-class facilities. London
2012 is just the beginning.
Ian Stewart is UK Athletics head of
endurance and 1972 Olympic Games
bronze medallist (5000m). Back the team
and watch the worlds best athletes in
action at the Aviva Birmingham Grand
Prix at Birminghams Alexander Stadium
on 26 August.
TUESDAY 7 AUGUST 2012
IAN STEWART
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one of todays columns? Do you have another subject you want
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Email theforum@cityam.com or comment at cityam.com/forum
TUESDAY 7 AUGUST 2012
14
cityam.com
Y
OU can almost see
tumbleweed rolling down
Threadneedle Street, as
trading volumes drop over
the summer months every year.
But this year is different. We are
not just seeing a drop in the short-
term, but also in longer-term
volumes. And these falls pose a
risk for traders who dont properly
manage their risk exposures.
Traders should be wary of low
volumes. They often lead to spikes
in volatility and sharp moves that
could leave them in a nasty posi-
tion, says Angus Campbell, head
of market analysis at Capital
Spreads. The rule of thumb is
that, if theres a big move against a
trend, complimented with high
volumes, its a good indication that
a change in that trend is about to
occur especially if prior sessions
had seen volumes gradually
falling.
In the short term, low trading vol-
ume is being driven (or not) by the
usual seasonal drop-offs in August
trading, as well as by patterns dic-
tated by markets dependent on
policy announcements (for exam-
ple, traders sitting on their hands
in advance of European Central
Bank and Fed announcements).
But the drop off in volume is part
of a broader, more long-term drop
in trading. Despite a three year
equities bull market, this year saw
the lowest volume of cash equity
trading since December 2007. This
is partly due to a change in trends
though cash equities have seen a
big drop, options markets have
seen increased volumes every year
for nine years, with investors lured
by increased volumes and the pro-
tection offered by derivatives. But
the drop off in equity volumes has
another explanation having been
hammered by two market crashes
in the last decade, investors, partic-
ularly retail investors, are wary of
getting their fingers burned again.
And the seasonal drop isnt just
hitting those traders caught out by
bigger price movements. When
NYSE Euronext reported its second
quarter earnings yesterday, with
earnings of $0.51 per share slimly
beating the $0.50 consensus expec-
tation, it reported a big drop in
trading volumes. Average US daily
Market drought offers
little respite to traders
Be wary of low volatility, says Craig Drake
TRADING MANAGEMENT WEALTH
THE TIPSTER
Insuring against losses
T
HE reorganisation of Aviva,
the insurance giant,
continues apace, as its new
chief executive keeps to his
plan of trimming the business
down to a more manageable size.
The disposal of divisions in eastern
Europe reflects the determination of
the new management to keep the
company under firm control, and its
recovery from June lows around
260p reflects growing investor
confidence. IG Index quotes a price of
309p-310p for Aviva.
An increase in risk appetite has
brought mining stocks back into
favour with investors. One in
particular, Rio Tinto, releases an
interim statement tomorrow.Capital
Spreads quotes a price of 3,082.5p-
3,087.0p for Rio Tinto.
Another mining and exploration
company, Randgold Resources,
officially opened its new Mali gold
mine this week. It has put in a strong
start to the year, very much in line
with guidance, but with first quarter
results revealing profits 126 per cent
higher than the first quarter of 2011.
This quarters results, due on
Thursday, should also be on the top
side of expectations.CMC Markets
quotes a price of 5,860.31p-
5,884.70p for Randgold Resources.
Investors may be prompted to take
a closer look at US Airways,
following Willie Walshs revelation
that International Airlines Group
could be considering a strategic stake
in the company. Walsh clearly sees
value in the company, and its hardly
surprising given US Airways
enormous turnover. The share price
has gained 46 per cent this year and
renewed interest may provide a
further boost. Spread Co quotes
$10.86-$10.90 for US Airways Group.
TOM WELSH
volumes were down 12 per cent,
year-on-year, for the second quar-
ter. This follows first quarter
results, showing a 23 per cent
drop, year-on-year, for 2012.
Though falls in European transac-
tions have been lower, they have
fallen nonetheless the NYXs aver-
age daily volume in cash trading
fell in the first half of 2012.
Though the NYSE has other arms
to its operations, transaction and
clearing fees make up the bulk of
its revenues. And its not just the
NYSE that has been squeezed by
lower trading volumes the
Nasdaq reported a first quarter fall
fx360.com
SUCCESSFUL TRADERS DONT
PANIC WHEN THEY LOSE OUT
T
ODAY Ill wrap up a series of three
articles, addressed to anyone
considering trading for themselves.
Last week, I wrote about money and
risk management and the
importance of creating a trading plan. Prior
to that, I wrote about trading styles is your
lifestyle and temperament suited to day
trading, or are you more comfortable
trading over a longer timeframe? This week,
Ill attempt to tie all this together and finish
by discussing the importance of having the
right attitude when risking your own money.
For me, the difference between day
trading and longer-term trading is vast. Day
traders pay little, if any, attention to market
fundamentals. They concentrate on technical
analysis studying how prices have moved
in the past to help them predict how they
will behave in the future. Identifying support
and resistance levels, using moving
averages, Fibonacci, Bollinger bands or
other indicators to establish significant
levels, and looking for short-term trends, are
all part of what a day trader does. Day
traders tend to see fundamental factors as a
distraction. Many argue that fundamental
drivers often take a long time to be fully
recognised and incorporated into price
movements, making them meaningless in
the context of short-term trading.
Of course, technical analysis is important
to longer-term traders as well. They use it to
help them choose entry and exit levels, and
place stop-losses. But over the longer term,
fundamental analysis is paramount what
are the current underlying drivers for the
market; are these likely to change in the
near-future, and if so, how? Longer-term
traders are looking for trends. These develop
over time, and of course counter-trends also
develop as price action ebbs and flows. For
this reason, longer-term traders work with a
wider risk-reward ratio than day traders.
Typically, they will place a greater
proportion of their risk capital on a single
trade than a day-trader would, but they are
looking for a much larger percentage return.
So much of the actual business of trading
concerns psychology and attitude. It is
human nature to blame trading losses on the
markets, your provider, the bloke who gave
you a tip or your internet connection. But
ultimately, the biggest battle a trader must
face is dealing with his or her own emotions.
And this usually comes down to how you
deal with taking profits and losses.
All traders make losses. It is a fundamental
aspect of trading and impossible to escape.
The best way to consider a trade is as a test
of a theory youve studied the market,
youve done the analysis and, putting it all
together, you believe that a particular
financial instrument will behave in a certain
way. If youre correct, then youre on the
way to making a profitable trade (as long as
your trading plan doesnt let you down). If
youre wrong, then dont look for
scapegoats just consider it as an
experiment that went wrong. And dont
beat yourself up over it either. Although it is
painful, look back at the trade to see if your
plan was at fault and, if so, try modifying it
accordingly. Leave it a day or two, and avoid
the temptation to rush back into the market
to make back your losses. The chances are
that you wont be in the right frame of mind
and you will be getting back in on the wrong
terms. Remember, there will always be new
trading opportunities. But you wont be able
to take advantage of them if youre not
thinking clearly. Its vital to preserve your
capital both monetary and health-wise.
Careful money and risk management will
help you minimise the effects of a losing
trade. Meanwhile, creating (and sticking to) a
sensible trading plan will help to take the
emotion out of trading. Remember the
market will do what the market will do. Dont
take it personally. By the same token, dont
get carried away by a string of successful
trades. Dont be tempted to enter fresh
trades that dont meet the criteria of your
trading plan. Dont add to a losing position
or increase your risk by moving your stops
further away. Best of luck and I wish you a
long and profitable trading career.
twitter.com/fx360 facebook.com/fx360
The contents of this column are provided for general information purposes only. One should consider the appropriateness
of the information in light of their own objectives, financial situation or needs before trading. CD11UK.074.010612
DAVID MORRISON
SENIOR MARKET STRATEGIST, GFT
F TSE daily tradin gvolu mes
Aug12 Feb12 Aug11 Feb11 Aug10 Feb10 Aug09 Feb09
0.5
0
1.0
1.5
2.0
2.5
3.0
T
ra
n
s
a
c
tio
n
s
(b
illio
n
s
)
in year-on-year cash trading equity
revenues of almost 15 per cent,
with another drop of 11.9 per cent
in the second quarter. The story
was the same at the CME group
which reported a second quarter
fall in trading, with 12.4m con-
tracts exchange on the CME in the
second quarter, down from 13.5m
in the second quarter of 2011.
Though exchanges feeling the
pinch, due to a fall off in fees from
trade clearing, isnt really your
problem, dropping volumes can be
if youre not careful. Low volumes
are one of the bugbears for those
trading during the summer
months, says Christopher
Beauchamp, market analyst at IG
Markets. The same cautionary
principles as with other times of
high volatility apply, namely keep-
ing stops wide and ensuring that
you dont become over-committed.
With sufficient margin, traders
will be better placed to ride out the
swings that are commonplace dur-
ing August. Wider stops prevent
positions from being eliminated
unnecessarily.
Theyre a controversial but useful market indicator, says Craig Drake
Fibonacci could be the seed of successful market analysis
the price action of financial instru-
ments.
That markets follow patterns that fit
with Fibonacci numbers is difficult to
refute. But why they do so is up for
debate. It could simply be that there is a
critical mass of traders on desks around
the world, all trading on Fibonacci levels
making the theory a self-fulfilling
prophesy. Though some may see the fun-
damentals as dubious, Fibonacci levels
are a mainstream technical indicator,
used on the desks of big banks and with
the power to move markets. After all,
markets encounter resistance at certain
numbers all the time, with no basis in
any fundamentals. There is no reason
why the market should react any differ-
ently to a 13,000 Dow over a 12,999 Dow,
or Facebook dropping below $20 a share
rather than to $20.01 a share. But it does.
A Fibonacci retracement is the poten-
tial retracement of a stocks original
move in price. This is plotted with hori-
zontal lines to mark areas of resistance
My pick: Short Aussie-dollar, Aussie-Kiwi, long dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days
A new short Aussie dollar-dollar position was established at
$1.0565, after European Central Bank disappointment. The
results of last weeks Fed meeting and the July non-farm
payrolls report leave the US dollar fundamentally constructive in
the near term. The commodity currencies (Aussie dollar,
Canadian dollar and New Zealand dollar) appear to be carving
out tops. We suspect the perceived progress from Friday could
lead to a rally by the European currencies.
ANALYST PICKS
Dont discount Fibonacci numbers
T
HE use of Fibonacci numbers
in technical analysis is
something of a Marmite issue.
The idea that stock markets
encounter resistance at ratios based
on some magic numbers is a load of
nonsense to some. But many use
Fibonacci numbers, and the
retracement levels of support and
resistance they determine, as the
bedrock of their technical trading
strategies.
Fibonacci numbers were devel-
oped by Leonardo Fibonacci when
he examined how fast rabbits could
breed in optimal circumstances
producing a series of numbers based
on adding the two previous num-
bers together to get the next (1, 1, 2,
3, 5, 8, 13, 21).
They occur in nature in the num-
ber of petals on a flower, the num-
ber of seeds in a pod and in the
hierarchy of a beehive. But, in one
way or another, they also occur in
QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ
My pick: Long euro-dollar above $1.2250
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks
Ive remained bullish on euro-dollar for the last two weeks.
We saw a substantial shift in our retail FX trader-based
speculative sentiment index, strongly hinting at a bottom. I
like buying euro-dollar above $1.2250, a key congestion
support, against multi-week lows of $1.2130. Targets start at
$1.26, and I think multi-month highs of $1.2730 are within the
realm of possibilities, as retail crowds sell aggressively into
euro strength.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short Aussie dollar-Kiwi dollar, long euro-Swiss franc
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
Expectations of more Fed and European Central Bank stimulus
prevented a strong follow through for euro-dollar last week. A
clear trend remains elusive for that pair. Therefore,
fundamentally disconnected pairs or stable ranges look better.
Im holding my Aussie dollar-Kiwi dollar short, from NZ$1.2980,
and sterling-dollar has a strong range as long as risk doesnt
explode or implode. I continue to await the Swiss National
Banks move on euro-Swiss franc.
at Fibonacci levels. These horizontal
lines are calculated by taking the
trend-line between two extreme
points and dividing the vertical differ-
ence between the two by the
Fibonacci ratios of 23.6 per cent, 38.2
per cent, 50 per cent, 61.8 per cent and
100 per cent. For an example of this,
look at Fridays price action on the
FTSE. Based on the July range of
5718.60 to 5478.00, a 50 to 61.8 retrace-
ment zone was formed at 5598.30 to
5626.6, with the 61.8 per cent resist-
ance level triggering the end of a
counter-trend rally.
Fibonacci levels should not be used
in isolation. To confirm the retrace-
ment, you should look for a candle-
stick to form. If there is no reversal at
the 38.2 level, you should look for a
retracement to the 50 per cent level.
But, by keeping an eye on this contro-
versial indicator, you can help to glean
advance warning that the market is
about to change direction.
TUESDAY 7 AUGUST 2012
15
cityam.com
CURRENCY STRATEGIST
CHRIS VECCHIO
17
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
4.30pmLive ECB 40 League
Cricket: Warwickshire Bears v
Yorkshire Carnegie. 10pmUSPGA
Championship Golf: The official film
of the 2010 Major. 11pmMasters of
European Football 11.30pm
Footballs Greatest 12amFootball
Asia 12.30amSporting Greats 1am
Soccer AM: The Best Bits 2am
USPGA Championship Golf 3am
Ladies European Tour Golf 4am
Footballs Greatest 4.30amFootball
Asia 5am-6amUSPGA
Championship Golf
SKY SPORTS 2
4pmLive Masters Tennis 11pmUp
Close With 11.30pmSuper League
Backchat 12amPowerboating
12.30amSports Unlimited
1.30am-3.30amPremier League
Poker
SKY SPORTS 3
7pmMasters of European Football
7.30pmLive Greyhound Racing
10pmSuper League Backchat
10.30pmPremier League Poker
12.30amLadies European Tour Golf
1.30am-2.30amSailing
BRITISH EUROSPORT
7pmLive Olympic Athletics 9.30pm
Live Olympics 10.30pmOlympic
Games: Together to London 11pm
Olympic Weightlifting 12am
Olympic Diving 1amOlympic
Athletics 2amOlympic Cycling 3am
Olympic Artistic Gymnastics 4am
Olympic Weightlifting 5amOlympic
Games: Together to London
5.30am-6amOlympics: English
Breakfast
ESPN
7pmPress Pass 2012 7.30pm
Australian Football International
2012 8.30pmESPN Kicks: Scottish
Premier League 9pmPremier
League Review10pmRussian
Premier League Review10.30pm
Legends of the Premier League
11.30pmPress Pass 2012 12amPTI
London Interrupted 12.30amFriday
Night Fights 2.30amPlanet Speed
3amGRAND-AM Road Racing
4amFIA Blancpain Endurance
Series Review5am-6amFIM
Endurance World Championship
SKY LIVING
7pmCriminal Minds 8pmFour
Weddings US 9pmKatie 10pm
Criminal Minds 11pmBones 12am
Katie 1amSupernatural 1.50am
Maury 2.40amMedium3.30am
Bones 4.20amAmericas Next Top
Model 5.10am-6amPassport Patrol
BBC THREE
11pmEastEnders 11.30pm
Pramface 12.30amFamily Guy
1.15amAmerican Dad! 2amWilfred
4.10amGreat Movie Mistakes 2:
The Sequel 4.30amBritish Olympic
Dreams 5.30am-6amTotal Wipeout
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8.30pmThe Big Bang
Theory 9pmNew Girl 9.30pm
Suburgatory 10pmThe Midnight
Beast 10.30pmThe Cleveland Show
11pmThe Ricky Gervais Show
11.30pmFacejacker 12amThe Big
Bang Theory 1amScrubs 1.30am
How I Met Your Mother 1.55am
Rules of Engagement 2.15am
Desperate Housewives 3am90210
3.40amGreek 4.20am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmAmerican Pickers 9pm
Storage Wars 10pmAmerican
Restoration 11pmStorage Wars
11.30pmPawn Stars 12am
American Pickers 1amCash
Cowboys 2amAmerican
Restoration 3amSwamp People
4amThe Last Days of World War
Two 5amPawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmBear Grylls: Born Survivor
8pmHow Do They Do It? 9pmGold
Rush 10pmDeadliest Catch 11pm
American Chopper: Senior Versus
Junior 12amGold Rush 1am
Deadliest Catch 2amAuction Kings
3amAmerican Chopper: Senior
Versus Junior 3.50amWheeler
Dealers: On the Road 4.40amBear
Grylls: Born Survivor 5.30am-6am
Destroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmBirth Days 8pmHow Clean Is
Your House? 9pmEmbarrassing
Bodies 10pmUntold Stories of the
ER 11pmA&E 12amEmbarrassing
Bodies 1amUntold Stories of the ER
2amA&E 3amDr G: Medical
Examiner 4amBirth Stories
5am-6amPortland Babies
SKY1
7pmThe Bourne Legacy Special
7.30pmThe Simpsons 8pmThe
Angel 9pmTrollied 9.30pmA
League of Their Own 10pmFILM
The Naked Gun: From the Files of
Police Squad! 1988. 11.40pmMy
Holiday Hostage Hell 12.40amRoad
Wars 1.40amThe Top Ten Show
1.50amDont Stop Me Now2.45am
Its Me or the Dog 4.40amAirline
5.10am-6amSell Me the Answer
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmCHOICE Olympics 2012:
Including the finals of the
womens 100m hurdles and
mens 1500m.
10pmBBC News
10.30pmRegional News;
National Lottery Update
10.40pmOlympics Tonight:
Gabby Logan and guests look
back on day 11 at the London
Games.
12amBBC News
12.10amOlympic Sportsday
12.55amWeatherview
1am-6amBBC News
6pmOlympics 2012
7pmHelicopter Rescue
7.30pmEastEnders
8pmHolby City
9pmThe Midwives
10pmOlympics 2012: Mens
boxing, and mens and womens
beach volleyball.
10.40pmNewsnight: Weather
11.30pmThe Super League
Show
12.15amSign Zone: Indian
Ocean with Simon Reeve
1.15amSign Zone: Alex Polizzi: The
Fixer 2.15amSign Zone: Britains
Heritage Heroes 2.45amSign Zone:
Real Rescues 3.30am-6amClose
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale: Marlon steps
down from his role as Paddys
best man.
7.30pmTrash to Treasure
8pmCHOICE Lewis: A
businesswoman is murdered.
Last in the series.
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMThe Island:
Sci-fi thriller, starring Ewan
McGregor. 2005.
1amJackpot247; ITV News
Headlines 3amGolden Balls
3.50am-5.30amITV Nightscreen
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Children 11.05pmRandom Acts
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2.10amBoxing 2.35amSailing
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Sport UK Challenge 4.20amGrid
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6.30pm5 News at 6.30
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insights and gossip. 12amBanged
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3.55amGreat Artists 4.20am
House Doctor 4.45amMichaelas
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Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6
7
8 9
10 11
12 13 14
15
16 17 18
19
20
21
3 14 17
45
12 16
12 16
21 16
8 7 10
34 8
12 28
15 7
45
4 15 11
5
17
6
3
29
17
10
32
27
15
9
12
10
18
30
35
11
19
23
13
17
13
5
ACROSS
1 Actors lines (6)
6 Interruption in
the intensity
or amount of
something (6)
7 Three-dimensional
shape (4)
8 Grade of
excellence (7)
10 Former name of
Tokyo, Japan (3)
12 Instrument for
measuring the
distance of an
object (11)
15 Anger (3)
16 Localised sore (7)
19 Act presump-
tuously (4)
20 Contribute (6)
21 Spite (6)
DOWN
1 Shoot arising from
a plants roots (6)
2 Decorative strip (6)
3 Archaic form of the
word you (4)
4 Release after
a security has
been paid (4)
5 To a greater extent (7)
8 Line of people or
vehicles (5)
9 Farewell remark (5)
11 Accounts journal in
which transactions
are entered for later
transfer to a ledger (7)
13 Hindu Festival
of Lights (6)
14 Be in awe of (6)
17 Partially burn (4)
18 Part of a ower (4)
R
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4

4
4

S T O O L W A F E R
H F L O E
A U N T I E R I S E
B A M A T D
B A S E O K A P I
Y A R N A I A
C L A U S B O S S
B L E O U S
O N T O L A S S I E
A N E P S
T O W E R B A R E S
7 9 3 8 1 2
2 6 4 1 3 9 7 8
1 8 1 3 6 2
6 9 9 7 5 3 9
5 9 8 2 6 1 4 7
1 5 7 4
4 2 7 6 8 1 3 5
9 8 7 9 4 3 1
1 2 3 4 2 3
8 4 3 7 6 9 4 8
6 3 1 2 4 1
4
4
4
4
4
4
4
4
4
The nine-letter words were
ALGORITHM and LOGARITHM
T
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
TUESDAY 7 AUGUST 2012
OLYMPICS 2012
BBC1, 7PM
Including the finals of the womens
100m hurdles and mens 1500m. With
commentary by Steve Cram and
Jonathan Edwards.
LEWIS
ITV1, 8PM
A businesswoman is murdered. Last in
the series. Drama, guest starring Anna
Chancellor and Cherie Lunghi, with
Kevin Whately and Laurence Fox.
THE GIRL WHO BECAME THREE
BOYS CHANNEL 4, 9PM
The story of Gemma Barker, currently
serving 30 months in jail after invent-
ing three online male alter egos that
she used to seduce two teenage girls.
TVPICK
TRACK cyclist Jason Kenny hailed Sir
Chris Hoy as the inspiration behind
his second triumph of the London
2012 Olympics, after he and the four-
man equestrian jumping team both
plundered gold for Great
Britain yesterday.
Kenny followed last weeks team
sprint glory with success in the indi-
vidual event, while Britains
showjumpers won gold for the first
time since 1952 following a jump-off
with Holland, and gymnast Beth
Tweddle claimed bronze on the
uneven bars.
It took Team GBs tally to 18 gold
medals just one shy of their bril-
liant Beijing 2008 haul and only two
away from their all-time record for a
Games with realistic hopes of sever-
al more today, notably in the mens
triathlon and track cycling.
The Velodrome once again show-
cased Britains utter dominance on
the track as Kenny, controversially
preferred to record-breaking Hoy for
the sole individual sprint spot, justi-
fied the gamble by defeating French
world champion Gregory Bauge.
And the Bolton 24-year-old admit-
ted the pressure of living up to the
flying Scotsmans standards helped
elicit a 2-0 win over Bauge.
Its not something Id thought
about until I went out for the last
ride, said Kenny. Then it dawned on
me that if Chris was here theres no
way he would lose this one. He has
that real killer instinct which is why
he has so many medals. It was just a
case of getting up there and justify-
ing my place.
Kennys victory merely added to an
aura of invincibility among the
British riders, who have won five of
the seven gold
medals at the
Velodrome so far.
Today could see
three more, with
V i c t o r i a
Pendleton in the
womens sprint
finals, Laura Trott
in the womens
omnium and Hoy
vying for a sixth
Olympic gold in the
mens keirin.
At Greenwich Park,
Nick Skelton, Ben
Maher, Scott Brash
and Peter Charles
took Holland to a
jump-off, which the
hosts duly won to end
IN BRIEF
Laudrup to hold Allen talks
n FOOTBALL: Swansea manager
Michael Laudrup will hold talks with
midfielder Joe Allen amid interest from
Liverpool. We will have some talks so it
[the speculation] does not go on,
Laudrup said.
West Ham end Carroll chase
n FOOTBALL: West Ham have given up
their pursuit of Liverpool striker Andy
Carroll after he rejected their interest.
Medals for Britain in
cycling, gymnastics
and equestrian
BRITISH 400m hurdler Dai Greene
admitted his bitter
disappointment last night after his
anticipated gold medal challenge
failed to materialise on an
underwhelming evening for home
track and field stars.
World champion Greene failed to
even make the podium as
Dominican Felix Sanchez won from
American Michael Tinsley and
Puerto Ricos Javier Culson.
It came as pole vaulter Holly
Bleasdale, another British medal
hope, made just one successful
attempt and finished joint sixth,
while womens 400m hurdles
hopeful Perri Shakes-Drayton
crashed out in the semi-finals.
Greene said: It was bitterly
disappointing, but I couldnt have
given anything more.
East Londoner Shakes-Drayton
finished third in her semi-final and
was fleetingly placed in the final,
but Czech Denisa Rosolovas
successful appeal against
disqualification scuppered her bid.
TUESDAY 7 AUGUST 2012
18
SPORT
cityam.com/sport @cityam_sport
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Results
Bitter disappointment for
Greene and Bleasdale
Gymnast Beth Tweddle (left) won a bronze medal
BY FRANK DALLERES
AT THE OLYMPIC STADIUM
BY FRANK DALLERES
AT THE VELODROME
Kenny claims
GB jump for
19
Team GB boxers Anthony Joshua, Anthony Ogogo and
Nicola Adams yesterday reached the tournaments
semi-finals to guarantee Olympic medals
cityam.com
TUESDAY 7 AUGUST 2012
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TODAY AT THE GAMES
China
United States
TEAM GB
31
29
19
15
14
19
18 11 11
TOP 3 MEDAL TABLE
Athletics
n Robbie Grabarz aims to be the first
Briton to win Olympic high jump gold in
the mens final at 19:00; Lawrence
Okoye competes in the mens discus
final at 19:45. Tiffany Porter is in the
womens 110m hurdles semi at 19:15.
Triathlon
n Strong medal favourites and brothers
Alistair and Jonny Brownlee compete in
the mens triathlon at Hyde Park at 11:30.
Equestrian
n Following on from yesterdays gold in
the team show jumping, Team GB will be
hoping for more of the same in the team
dressage final, starting at 10:00.
Cycling
n Sir Chris Hoy, Victoria Pendleton and
Laura Trott are all serious medal
contenders, with heats beginning
from 10:00.
a 60-year wait for any kind of Olympic
showjumping gold medal. While two
of the three Dutch riders incurred
penalties,
the GB trio
of Skelton,
a veteran of
six Olympic
G a m e s ,
Maher and
Charles all
cleared the short-
ened course, sending
the 23,000-strong
crowd delirious.
It has taken me 54
years, said Skelton,
who rode Big Star. It
is unbelievable and
what a place to do it. I
have got a wonderful
horse and its a dream come true. It is
great for our country and great for
our sport.
Brash lauded the partisan crowd,
saying: I dont think Ill ever experi-
ence anything like this again. It really
has been the best day of my life.
Tweddle ended her quest for an
Olympic medal by finishing third at
the North Greenwich Arena and,
despite being tipped as a possible
gold medallist, insisted she was per-
fectly content with bronze.
I could say what if but Im not
disappointed in the slightest, said
the 27-year-old, who finished fourth
in Beijing and has ruled out compet-
ing at the next games in Rio.
Any medal, any colour is what I
always said I wanted, so Im
extremely happy.
Pietersen: Next Test may
be my last for England
ENGLAND batsman Kevin Pietersen
has revealed that the next Test
against South Africa at Lords may
be his last.
Pietersen yesterday secured 149
of Englands first innings 425
before they closed 123 short of
victory at 130-4 after South Africas
419 and the 258-9 with which they
declared. The former captain has
already retired from limited-overs
internationals and his future
within Tests may also be at an end.
I cant give any assurances [that
the next Test will not be my last],
said Pietersen, who won yesterdays
man of the match award at
Headingley. I love playing Test
cricket, but there are obstacles and
Ill decide what happens at the end
of the next Test.
After the next Test match well
know a lot more. Its absolutely 100
per cent not about money. There
are clear things that Im discussing
[with the English Cricket Board],
but there are other issues.
Should England fail to beat South
Africa, the visitors will become to
worlds highest ranked Test team.
BY DECLAN WARRINGTON
on the same day that Great Britain defeated Holland to win their first equestrian gold in 60 years
Jason Kenny
celebrates
yet another
cycling gold
for Team GB
gold as Team
historic glory