Citym 2010-12-14

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BUSINESS WITH PERSONALITY

TRADERS PLAY FTSE 100

IN VOLATILE 2010WHERE WILL IT CLOSE ON 31ST DECEMBER 2010?

Spread betting and CFD trading carry a high level of risk to your capital and you can lose morethan your initial deposit. These trading products may not be suitable for all investors so seekindependent advice if necessary. Nothing in this advert should be construed as investment advice.

The FTSE 100 has been through an

unusually volatile year.Hovering around 5500 for most ofJanuary, nearly dropping below 5000in February, climbing above 5800 inApril, dropping to the lows in Mayand July, and then seeing a slow climbthrough the low-to-mid 5000s toour current levels of 5800-5900..... Its been a very interesting year forthe FTSE and we have seen somesignificant moves even if volatil-ity has been a little on the low side.However, we saw a spike in May as thefirst round of the European debt crisisproperly surfaced and Greece asked fora bailout from the EU and IMF. Themarkets tumbled but after a couple of

months investors had licked theirwounds and we headed backhigher again.

Capital Spreads has seen its tradingnumbers in the UK 100 index mir-ror the market itself. The FTSE 100 isthe most popular market amongst ourclient base taking more trades everymonth than any other of the thousandsof markets we offer. In May, whenthe FTSE took a turn for the worse,the number of trades for the month jumped 70% on Aprils total. Tradingwas fast and furious as clients triedto get a piece of the action bytrying to pick the bottom inexpectations of a bounce. In many

cases they felt the sharp edge oftrying to catch a falling knife. Theshort sellers, on the other hand,made hay.

The last few trading sessions haveseen the index well and truly windup for the Christmas period it wouldseem. The impressive bounce followingNovembers falls have come torather an abrupt end and it looks like

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aFTSE 100 5,860.75 +47.80 DOW 11,428.56 +18.24 NASDAQ 2,624.91 -12.63 /$ 1.59-0.01 / 1.18+0.01 /$ 1.34 -0.01 Certified Distribution30/08/10 03/10/10 is 110,015

Flurry of M&A providesXmas cheer for traders

BRITISH companies led a whirlwind of

buyout deals yesterday, in a sign ofemerging confidence in the M&Amarket ahead of the Christmas break.

London-listed household goodsgroup Reckitt Benckiser bagged privately-held personal care companyParas Pharmaceuticals for around$726m (460m) yesterday, while oilservices firm Wellstream finallyagreed to be taken over by GeneralElectric for 800m, pending share-holder approval.

Also in the oil services sector, WoodGroup shares rose 6.7 per cent after itshelled out $955m to buy out unlistedScottish rival PSN in a deal which willmake Scottish entrepreneur TomHunter around 30m.

UK chemicals maker Yule Catto said yesterday it plans to spend 443m(376m) on latex producerPolymerLatex, which it hopes to

finance with a 225 rights issue.Elsewhere, pharmaceutical giant

GlaxoSmithKline spent 162m onMaxinutrition, a privately owned pro-

tein drinks firm.News of the deals helped lift themarkets, with the FTSE 100 gaining0.8 per cent to close at 5860.75.

There are a lot more pre-emptiveapproaches this year, for particularassets or unlisted companies, that aredefinitely a sign of confidence in themarket, said Neil Sutton, head of cor-porate finance atPricewaterhouseCoopers.

However, Allen & Overy head of cor-porate Andrew Ballheimer said:Nobody will be getting carried awayon the back of a few deals beingannounced simultaneously.

He added: M&A activity is likely toremain patchy, as it has been through-out the fourth quarter, as long asdoubts about the euro and sovereigndebt linger.

MORE: P3, 4, 8, 14 & 15

BY MARION DAKERS

M&A

THE EUS markets chief accusedLondon banks of blackmailing theunion with threats to move abroad inthe face of bonus curbs yesterday.

Michel Barnier, who made his firstappearance in front of the Treasuryselect committee yesterday, said theEUs new guidelines calling for

bankers to get just 20 per cent of bonus payments in cash would notspark an exodus from the City.

I very much doubt there will be aflight of talent towards Asia or else-where, said Barnier. I would not beoverly impressed by the blackmailexerted in which this kind of risk ismentioned.

Barnier spoke at the committeeafter pressure from its chairman, Andrew Tyrie, who wanted moreinformation on the powers of ESMA,the EUs new banking super-regulator.

BY MARION DAKERS

BANKING

A host of deals helped put life into the markets

INVESTMENT banks have beenslammed by the Citys top institution-al investors for charging unfairlyhigh fees to companies raising capitalthrough rights issues.

An inquiry commissioned by theInstitutional Investor Council, backedby the Association of British Insurersand the National Association ofPension Funds, lashes out at invest-ment banks today for charging under-writing fees far in excess of the levelof risk they face, and taking advan-tage of companies inexperience incapital markets.

The Rights Issue Fees Inquiry fol-lows criticism of credit crunch rightsissues launched by companies such ashousebuilder Taylor Wimpey. The feescharged were a poor use of sharehold-er capital and should come under a

similar level of scrutiny as outgoingssuch as executive pay, it said.

Inquiry chairman Douglas Ferranssaid companies were paying toomuch to ensure the deal is a success.

These costs have increased dispro-portionately to the risks, he said.What we have seen over the period isthe risks of underwriting contractquite substantially and we wouldhave expected costs to come down.

Rights issue fees almost doubledfrom two per cent in 1999 to 3-4 percent in 2009 as distressed companieswere forced to raise fresh capital inrisky market conditions.

Shortly after the credit crisis prop-erty firm Barratt paid 27m in fees tobanks advising its 720m rights issue, while builders merchant TravisPerkins paid HSBC and Citigroup12m to underwrite its 300m issue.Business Secretary Vince Cable wel-comed the inquirys work.Their

report calls for more transparencyand competition in the capital-raisingprocess to ensure highly inf lated feesbecome a thing of the past, he said.

But investment banking sourcestold City A.M. last night underwritingwas still highly competitive. The dan-ger with these reports is that it mightbe inferred that there is somethingsinister going on but these servicesare being provided by a competitiveindustry, one source said.

RBC Capital Markets and BarclaysCapital structured a 2bn rights issuefor life funds group Resolution inJune in which they charged full feesfor only the risk they underwrote andreduced fees for the risk that was sub-underwritten.

Joshua Critchley of RBC CapitalMarkets said: It better aligned riskand reward for the underwriting banks. I believe that you'll see thisstructure used again."

CITY WARNSOVER RIGHTSISSUE RIP OFFBY ALISON LOCK

FINANCIAL MARKETS

Michel Barniers visit tothe House of Commonscame after an initialreluctance to be quizzedby UK politicians

www.cityam.comIssue 1,284 Tuesday 14 December 2010 FREE

EU chief Barnier: Londonsbankers are blackmailing us

NEW MAN ATDE LA RUEBUT HE NEEDS HELP

TO FEND OFF

FRENCH BID P11

ARSENAL SHOT DOWN ASMAN UTD TAKE TOP SPOT

GUNNERS FIRE BLANKS P24

BUSINESS WITH PERSONALITY

GENERAL ELECTRIC

buying WELLSTREAM for

800m

RECKITT BENCKISER

buying PARA for

460m

WOOD GROUPbuying PSN for

600m

YULE CATTObuying POLYMERLATEX for

375m

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SIMON Propertys efforts to influenceCapital Shopping Centres 1.6bn pur-chase of the Trafford Centre crum-bled further yesterday after seller PeelHoldings threw its weight behindCSC.

Peel said yesterday it has no inten-tion of selling the Trafford Centre forcash and this has never been an aimof the group in spite of the fact that a cash sale would achieve a higherprice. Its support comes after a flur-ry of strongly-worded statementsbetween the firms over the weekend.

Simon, the worlds biggest shop-ping centre owner, offered to under-write a 400p-per-share placing for CSCto help fund the transaction, provid-ing Peel gave up its claim to a 20 per

cent stake in the enlarged companyand took cash instead.CSC rejected the offer on Sunday.

Simon, which currently holds a 5.6per cent stake in CSC and hopes todelay the Trafford Centre sale inorder to make a takeover offer, willface the firm at an emergency gener-al meeting set for 20 December.

The Simon Group takeover movesfrom unlikely to seemingly impossi-ble, said Evolution Securities analystJohn Cahill in a note.

However, others believed Simoncould strike again before CSC share-holders can approve the TraffordCentre deal next week. We do not believe Simon has exhausted all itsoptions, analysts at JPMorganCazenove said in a note. An indica-tive offer for CSC still has a highchance, but so has an offer including Trafford Centre or the arrival of athird party.

Simon claims it already has the

support of some CSC shareholders.Shares in CSC closed up 0.9 percent at 393.5p yesterday.

Peel helps CSCin Simon fightBYMARION DAKERS

PROPERTY

BRITISH pharmaceuticals giantGlaxoSmithKline yesterday agreed to buy protein shake makerMaxinutrition for 162m.

Glaxo said it would buy all ofMaxinutritions shares from currentowner Darwin Private Equity. Thedeal price includes the repayment of

outstanding debts.Glaxo is hoping to use its global dis-

tribution network to marketMaxinutritions brands, which arecurrently sold in gyms and specialitystores.

This deal will give Glaxo a strongpresence in the fast developing pro-tein-based sports nutrition market,appealing across a broad spectrum ofconsumers from elite athletes tosports participants, said John

Clarke, president of Glaxos con-sumer healthcare business.

GlaxoSmithKline flexes musclesin 162m protein shake buyoutHEALTHCARE

SANOFI-Aventis has extended itssnubbed $18.5bn (12bn) cash bid forUS biotech company Genzyme by sixweeks, buying the French drugmakertime to persuade its reluctant targetto talk.

Only 0.9 per cent of shares weretendered by a Friday deadline, Sanofisaid yesterday. Genzyme has rejectedthe $69 a share bid, arguing it should

be higher as the company rectifies amanufacturing crisis and awaitsresults on its experimental Campathdrug for multiple sclerosis.

Sanofi chief executive ChrisViehbacher has said he would consid-er a higher offer if Genzyme provideda closer look at its business to justifymore money.

Genzyme chief executive HenriTermeer said the meagre response toSanofis offer shows shareholdersstrongly support the view of the

board that the bid substantiallyundervalues Genzyme. Genzymestop shareholders include activistinvestors Carl Icahn and RalphWhitworth.

Investors and analysts say an offerprice of $75 per share to $80 per sharewould be more likely to attract share-holders, and the stock has tradedabove the offer, which Sanofi tookhostile in October. Yesterday,Genzyme shares closed up 0.5 percent to $70.30.

Sanofi extends 12bn offerfor Genzyme by six weeksBYHARRY BANKSPHARMACEUTICALS

News4 CITYA.M. 14 DECEMBER 2010

ROCHE BEEFS UP BOARD

ROCHE, the Swiss pharma giant, has beefed up its board by appointing a trio of heavy-weight non-executive directors. It said Nestle chief executive Paul Bulcke (top) would joinits board, alongside Shell chief executive Peter Voser (bottom left) and Christoph Franz(bottom right), the chief executive-designate of Germanys national airline Lufthansa.

Pictures: GETTY, REUTERS

To celebrate this years list, CityJet, City A.M.s partner for the PowerHundred 2011, is giving away one pair of flights each day for 7 days in the runup to the list. CityJet is a subsidiary of one of the largest airlines in the worldand offers a choice of over 480 flights a week to 14 major European and UKbusiness centres from London City Airport. With just a 15 minute check-intime - the shortest of any UK airport - CityJet are the smartest choice for

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FOR YOUR CHANCE TO WIN, SIMPLY TELL US YOUR TOP 3 CHOICES FOR THE POWER HUNDRED. A NEW WINNER WILL BE CHOSEN EACH DAY.

WHO WILL TOP OUR EXCLUSIVE CLUB THIS YEAR?Go to www.CityJet.com/cityam

to submit your entries and for fullterms and conditions.

Dont forget to pick up City A.M. on 22 December to check out who's up, who's down, which banker ispulling the best deals, who has entered our exclusive club and who has dropped out of it.

*from London City Airport, excluding Milan Linate. Terms and conditions apply

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TELL US YOUR TOP 3 CHOICESFOR THE POWER HUNDRED 2011

The Power Hundred 2011, published on22 December in City A.M., will highlight allthose who will be calling the shots in the City in2011, whether they be bankers, lawyers, chiefexecutives or hedge fund managers.

Two years ago, the Power Hundred wasdominated by those involved in rescuing thebanks. This year's list will have a differentcomplexion, with dealmakers and successfulbusiness leaders in the ascendancy.

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after the costs of the evening, which will be available for grants in the

coming year.Not a bad haul for an industry sup-

posedly populated by heartless oppor-tunists, eh?

TIGER PRANKSSo where do ex-City boys end up sever-al years down the line? Some of them,at least, go on to found businesses,

with www.yourgolftravel.com, found-ed by Ross Marshall and AndrewHarding, celebrating its fifth birthdayover the weekend. The top of theGherkin is certainly a more impres-sive venue than hosted my fifth birth-day party, and the 300 or so traders inattendance were treated to some addi-tional entertainment courtesy of amischievous friend.

With the likes of ColinMontgomerie and Nick Faldo gracingthe soiree, who else should show up

but a very WAG-like girl, who bust-ed her way into the VIP area withshouts and screams. Shedemanded to speak to Tiger

Woods, claiming to be one of

Woods many maligned girl-friends. Just as the situation

moved towards theinevitable call for securi-ty, with the partys hoststurning various shadesof red, she suddenly

burst in to song, joined by two other seemingguests and proceededto serenade the atten-dees with West Endmusical numbers.

But what on earth hadhappened? Pin the blameon Geoff Sewell, who runsIncognito Artists, a firmthat sends top actors andactresses from West Endshows along to parties tocause mayhem.

Ive never seen such red

faces, says our source ofhis hosts.

EURO PUNTINGBad news for the euro, good news fortraders. WorldSpreads is just about toopen up the first spread betting oppor-tunity on the future of the single cur-rency itself. Traders have long beenable to bet on the euro as they wouldon any other major currency, but

being able to punt on its existencemust surely mark a new low in theeuros difficult year.

The bet will be available fromJanuary (so lets hope it lasts the year!),with a spread of 710-720 days for howlong the currency will continue.Optimists bet over 720, with the poten-tial win or loss being 420 times thestake.

WorldSpreads CEO Conor Foley says:Trapped between ideology and reali-ty, the euro will be 2011s hottest finan-cial debate. (I think we know whatdirection youd bet on, Conor). Everyday we trade futures and currencies,

but never before have I seen a trade onthe future of a currency.

Better hope those overly keenEurozone regulators dont get on thecase any time soon!

FOR ENGLANDSo the Royal Wedding is meant to costBritain billions in lost revenues next

year, but what about the ever-recur-ring annual cost of sick days pulledafter office Christmas parties? A surveyof 6,000 people by Travelodge revealsthat such stunts will cost the UK econ-omy 620m this year alone. And this isdespite the generosity of the business-es throwing them: 38 per cent will payfor the office party this year, thoughtthis is down from 45 per cent in 2009.

As for the extent of the boozing, bet-ter not tell your health insurer:

employees are meant to drink an aver-age of 7.3 units of alcohol at the party,with men gulping down 9.6 and

women 5.6. Thats well over therecommended daily limit of 3-4for men and 2-3 for women.So just bear in mind yourpatriotic duty, readers, whenyou wake up with that shat-tering headache, sufferingthe consequences of yourexcesses. The economy

needs you!

ALL YE TUNEFULWith the Canary Wharf meno-rah fully lit last week forChanukah, its time for theChristmas carol singers to mus-cle in on some seasonal actiontoday. Two carol services, at5.30pm and 7.30pm in East

Wintergarden, will host 900people in total.

HEDGIES FORK OUT FOR CHARITY ASLORD ARCHER HOSTS THE AUCTIONHEDGE fund philanthropists had oneof their biggest galas of the year thispast weekend, thanks to a fundraiser

by Hedge Fund Care, a fund chaired byRobert Mirsky that makes grants tocharities fighting child abuse and neg-lect. 400 or so of the industrys finestdonned their finest blacktie andarrived for a three-course banquet atSt Pauls Grange Hotel.

Tables were hosted by the likes of

Goldman Sachs, Deutsche Bank,Citigroup, Morgan Stanley, CreditSuisse and HSBC, and at 750 a seat,the guests had already thrown a fewthousand into the collection pot

before they even sat down.With a charity auction led by Lord

Jeffrey Archer who has reportedlyraised 39m at charity auctions in hislifetime the hedges bid for prizesthat included a signed Status Quo gui-

tar and a luxury holiday in Barbados.Pity the man who decides to stand upand tries to leave while hes doing anauction, Mirsky told The Capitalist.

With speeches by Esther Rantzen,Mirsky and a 12-year-old girl who had

been bullied, the hedgies were hardly wanting for information about thegood causes on which they weresplashing their cash which might

be why they raised a total of 250,000

Esther Rantzen (centre) poses with TT International CFO Fiona Carpenter in the red dressand Hedge Fund Care chairman Rob Mirsky on the far right.

The Capitalist10 CITYA.M. 14 DECEMBER 2010

EDITED BY

JULIET SAMUELGOT A STORY? [email protected]

Still the butt of the joke: Tiger Woods

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NEWYEARS

EVE 2010

DE La Rue, the UK money printer andtakeover target, has appointed a newchief executive known for the success-ful sale of his last firm, Chloride.

Tim Cobbold will take over the helmof the embattled manufacturer inJanuary at a time when many are sug-gesting that it could soon become theobject of a bidding war.

The firm revealed last week that theprivate French money printerOberthur Technologies had made abid for it at 905p per share.

As chief executive of ChlorideGroup, Cobbold presided over a bid-ding war that saw eventual buyerEmerson Network Power up its bid to944m from an initial offering of723m, in order to triumph over Swiss

engineering firm ABB.The winning bid by Emerson camein at 375p per share, a 79 per cent pre-

mium over the stock price at the time.De La Rue denied that Cobbold was

being brought in to bid up the firmsprice for a possible sale.

[Cobbold] is excited by De La Rue asan independent company, said aspokesman.

De La Rue has been seen as vulnerable for takeover since revealing thatproduction problems have cost it35m and put at risk a major contractwith the Royal Bank of India this year.

De La Rue hire

is bid veteranBY JULIET SAMUEL

MANUFACTURING

News 11CITYA.M. 14 DECEMBER 2010

India is yet to declare its trust in De La Rue Picture: GETTY

Printer needs Indians to fight FrenchDE LA Rue is used to being a target.During the 1940s blitz, it was bombed by the Luftwaffe; HaroldWilson rode to its rescue in 1968 byblocking a takeover from Rank; nowit is the French who have the firm in

their sights.Of course, populist politicians willside with the companys manage-ment, which has dismissedOberthurs offer as derisory. LosingCadbury to Kraft was bad enough,they mutter, but the French print-ing British banknotes? Quelle hor-reur!

However, a significant number ofinvestors already irked by manage-

ments decision to keep theapproach under their hat for fourwhole weeks completely disagree.Oberthurs 905p-a-share offer probably doesnt reflect the companystrue value, nor its technical expert-

ise, but some analysts say it isnt amillion miles away.To be fair, it is awfully difficult to

put a price tag on De La Rue. How doyou value a firm has lost its biggestcustomer, the Indian government,at least for now? Last month itannounced a halving in six-monthlyprofits to 23.8m and a 20 per centreduction in revenues to 209m.

Unless the Indian government

moves quickly to show it still trustsDe La Rue and speed is not itsstrong point some investors mightprefer not to wait and see. Try as itmay, the firms management is notin a position to play hard to get.

Analysts at UBS say De La Rue is wrong to sniff at the 905p-a-shareoffer. If management can bid emup, says the broker, then we couldhave a deal. Until then, the ban-knote printer needs to enlist theIndians to help it fight the French.

BOTTOMLINEAnalysis by David Crow

650

850

750

13 Sep 1 Oct 21 Oct 10 Nov 30 Nov

ANALYSIS l De La Rue

p

838.5013 Dec

TIM Cobbold is no stranger to biddingwars after his successful sale of ChlorideGroup to Emerson Network Power inSeptember. Chloride shareholders bene-fited from a 221m increase in the saleprice after ABB stepped in to counter-offer.

Since the sale he has occupied a sen-ior role at Emerson, which he is leaving

to take up his position as chief executive

of De La Rue.He joined Chloride originally as chief

operations officer in 2007, before mov-ing up to the top job the year after.

Before his job at Chloride, however,he had worked solely at Smiths Group(formerly TI Group) since qualifying as amechanical engineer and a charteredaccountant.

After joining Smiths in 1989, he soonworked his way into several seniorfinancial management positions over his18-year stint at the company. He alsoholds a non-executive directorship ofDrax Group, the coal power generator.

He will begin at De La Rue in Januaryat an important time: analysts see histask as either to resolve its production

problems or to sell it on at a premium.

TIM COBBOLD,APPOINTED CEO OFDE LA RUE

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LONDONS businesses are recoveringstrongly from the recession, a surveyrevealed yesterday.

More than two in three (68 per cent) businesses in the capital plan toexpand in the coming six months,

while hiring intentions are rocketing.Last year only 11 per cent of employ-

er planned on hiring at normal rates.Yet now 45 per cent will be recruiting,according to the survey conducted bythe CBI with consultants KPMG.

And the proportion of companies

planning to make redundancies overthe next six months fell to 29 per cent,from 53 per cent a year ago.

This is despite lingering concernsover the state of the economy.

Twice as many managers were pes-simistic about the economy as opti-mistic.

There was positive news for thecoalition, though, with an extraordi-nary 97 per cent of respondents sup-porting the spending cuts.

Earlier this year the Centre forEconomics and Business Researchshowed that London has the lowestreliance on government spending out

of all regions. Londons proportion ofGDP reliant on the state is 15 per centlower than the UK average, they said.

Yet businesses are unhappy at levelsof burdensome regulation, with 63per cent saying this has become worseover the last year.

The government must find theright balance between maintainingessential legislation and cuttingunnecessary red tape, said SaraParker of the CBI.

And 69 per cent of respondents saidthe Conservatives proposed cap onimmigration would negatively affecttheir recruitment from overseas.

LOOKING TO BOOST YOUR CAREER IN 2011?

COME TO OUR OPEN EVENINGWEDNESDAY 15 DECEMBER, 18.00-21.00

SIGN UP / / /

BY JULIAN HARRISUK ECONOMY

London bounces back despiteworries over economic future


INFLATION expectations could lead toeven higher prices and wages, thedeputy governor of the Bank ofEngland said yesterday.

Given the unexpected strength ofinflation in recent months, this riskhas probably increased, said CharlesBean. The Bank will watch inflationlike proverbial hawks, he added.

Bean was speaking after official datashowed a nine per cent rise in the priceof materials and fuels used by Britainsmanufacturing industry.

The figures, comparing Novembersprices with the same time the previous

year, were the highest since July,according to the Office for National

Statistics (ONS).Input prices for manufacturing rose

0.9 per cent between October andNovember, nine times faster than theprevious year.

The overall consumer price index

(CPI) edged up to 3.2 per cent inOctober, considerably above the Bankstarget rate of two per cent.

And the increase in VAT to 20 percent, scheduled for 4 January, willstoke further inflation, the consultan-cy KPMG said today.

Some 60 per cent of retailers andconsumer goods producers willincrease prices over and above the 2.5per cent VAT rise, they reported.

The economic downturn placedpressure on UK businesses to blanketdiscount, and the intention to raiseprices is an understandable reaction,said KPMGs Martin Scott.

Yesterday the changes in VAT rise were attacked by the accountantsgroup ICAEW.

At a time when companies are fac-

ing a tough 2011, having to change theVAT rate is not a good way to start thenew year, said ICAEWs Ian Strange.

He added: Many will be worriedabout the effect it will have on sales inthe first quarter.

Inflation fearas VAT loomsBY JULIAN HARRIS

UK ECONOMY

Charles Bean said the Bank of England will watch inflation like hawks Picture: GETTY

Loans boostwanted forChina GDP

CHINAS government wants at leastseven trillion yuan (662bn) of new

bank loans made next year, in a bid tokeep its economic boom on track, it

was revealed yesterday. The surprising news came after a

signal on the weekend towards moreprudent monetary policy, to tacklethe countrys price inflation.

Consumer prices rose by 5.1 percent in November compared to last

year, the sharpest rise since July 2008. The government was expected to

increase the cost of lending byincreasing rates by the year end. Andlast week increased the reserverequirement ratio (RRR) for banks forthe sixth time this year, and the third

time in the last five weeks.Yet the central bank is content to

raise the inflation target to four percent, and wants loans to maintaineconomic growth of at least eight percent, an insider told Bloomberg.

BY JULIAN HARRISASIA

IoD: regulation impedinginvestment in UK training

SKILLS shortages in the workforce areholding back 58 per cent of UK busi-nesses, a survey revealed today.

And high taxes, burdensome regu-lations and misguided governmentprojects are deterring companiesfrom investing in skills, the Instituteof Directors (IoD) said.

Businesses want to invest in train-ing, and they would invest even moreif the government improved the busi-ness environment by removing exces-sive employment regulations, saidthe IoDs Miles Templeman.

Programmes such as Time to Trainactually make it harder for companies

to offer training opportunities to theirstaff, the IoD said.

Some 63 per cent of directors saythe programme has imposed morered tape, while over one in ten willremove training discussions fromappraisals due to problems created bythe scheme.

Yet almost a third (31 per cent) ofemployers are struggling to fill vacan-cies due to a lack of skills amongapplicants, the survey reported.

And even worse is the skills gap a lack of skills among current employ-ees. Almost half (47 per cent) of direc-tors said some of their staff lacked thenecessary skills needed to do their

jobs properly.

BUSINESS

DO YOU THINK THERE IS A SKILLS SHORTAGE IN THEUK? Interviews by Chris Barker

I dont think that there are necessarily less skilled people inthe UK. But in my experience graduates need more skillsthan the ones that they normally enter the company with.

ADAM MITCHELL | LLOYDS TSB SYNDICATE

I think it depends on the skills you are looking for. Thereis no shortage of MAs and degrees here, but when itcomes to trade and practical skills we are less good.

EDWARD TREDGER | BEAZLEY

Yes there is. It is getting difficult for us to recruit the peo-ple with the skills we need in IT. Maybe there should be

more emphasis on practical skills.

GEORGINA PORTER | NICOLL CURTIN

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THE coalition started to embark onthe biggest spending cuts in a genera-tion yesterday, as a line of governmentministers detailed where the axe willfall.

Local councils will see the amountof cash they get from central govern-ment slashed by 17 per cent, oraround 6.5bn, next year.

Communities secretary Eric Picklessaid that no council would suffer areduction in its total spending powerof more than 8.9 per cent, once coun-cil tax receipts and NHS funding forsocial care is taken into account. Theaverage reduction will be 4.4 per cent.

Meanwhile, Pickles unveiled his

localism bill, which gives councilsmore control over local planning deci-sions. It also paves the way for com-munities to take over libraries andother services that are threatenedwith closure.

Local authorities have a statutoryduty to protect some services, such aschild protection and support for thedisabled, meaning more widely-usedservices like libraries and swimmingpools will bear the brunt of cuts.

Meanwhile, policing minister NickHerbert said police forces in Englandand Wales would face cuts in centralfunding of four per cent next year,and five per cent in the year after.

Herbert acknowledged that the sav-ings would be challenging, but saidfront-line services could be shielded

by efficiencies and back-office savings.Meanwhile, the Department for

Education admitted that schools inEngland and Wales would not seetheir budgets rise in real terms overthe next four years, due to risingprices.

A Department for Educationspokesman said: Spending totalswere based on its best forecast of infla-tion at the time, produced by inde-pendent Office for BudgetResponsibility.

We always knew these were fore-casts of inflation and subject tochange undoubtedly these willchange again.

We have not cut the schools budg-et totals cash limits remain asannounced in the Spending Review.

Coalition swings the axe

ED Miliband yesterday tried to woo dis-affected Liberal Democrats by callingon them to work with Labour onissues of common interest.

Capitalising on last weeks bloodyvote on tuition fees which sparkedthe worst rebellion in the partys histo-ry Miliband said some Lib Dem MPsfear their deal with the Tories is shift-ing the gravity of British politics to theright.

He said he was issuing his plea tothose that are reluctant to abandonship but are concerned at the direc-tion of their party.

I invite them to work with us onissues of common interest, he added.

But Milibands overtures receivedshort shrift from Tim Farron, the LibDem president-elect who voted againstthe coalition on tuition fees and whois seen as a left-wing standard-bearerfor disgruntled colleagues.

He said: Why would any sane pro-gressive give Labour a second glance?As part of the coalition, Lib Dems havestarted fixing Labours economicmess, taking millions out of incometax and reforming British politics.Things Labour had 13 years to do butfailed to deliver.

In the words of one senior Lib Demstrategist, the party has been leftbruised not broken by last weeksvote on university fees, which saw over

half the party rebel against plans totriple the upper fees limit to 9,000.

Miliband tries towoo Lib Dems into

anti-right alliance

BYDAVID CROW

POLITICS

BYDAVID CROW

POLITICS

Eric Pickles is reducing the amount of cash Whitehall gives to councils Picture: GETTY

THE chief executive of the FinancialServices Authority (FSA) said yester-day one of the biggest jobs its succes-sor would face would be to convincethe public that banks should beallowed to fail.

Hector Sants said the PrudentialRegulatory Authority (PRA), which hewill take control of in 2012, would bemore willing to allow fims to failthan its predecessor.

He said: Where it will feel differ-ent is the fact that it has a far narrow-er focus and the recognition that weare not seeking to operate a zero fail-ure regime is now directly built intothe statutory objective.

The FSA boss said not all firms reg-ulated by the PRA would pose a riskto its statutory objective of maintain-ing stable financial markets by theirfailure.

He also suggested the PRA wouldspend a far higher proportion of its budget managing the decline of

firms in an efficient manner.But he admitted persuading socie-ty that this in an acceptable goal willbe a challenge.

Sants added the UK was unlikely tointroduce additional capital require-ments on big banks if internationalagreement could not be reached.

We do understand the importanceof large global institutions operatingin London having a level playing f ieldglobally so we would not likely besuperequivalent or gold plate, hesaid.

New City regulator will allowbanks to fail FSA, says SantsBYMATTHEWWESTREGULATION

TRUST in the BBC has fallen below 50

per cent for the first time in the cor-porations history, according to datareleased yesterday.

The British Social Attitudes surveyfound that in 2009 just 49 per cent ofrespondents said they trusted thestate-funded broadcaster.

That is almost a quarter less than in1983, when 72 per cent had faith inthe organisation.

Trust in the police has also deterio-rated, the survey found, falling from77 per cent in 1983 to 62 per cent in2009.

HUGE rises in business tax are due in April thanks to the governments

random way of setting rates, a lead-ing retail group said yesterday.Commercial property taxes are

based on the previous Septembersretail price index (RPI), the BritishRetail Consortium (BRC) said.

The method is prone to volatilejumps in RPI, unfairly affecting busi-nesses, according to the BRC.

In September RPI inflation wasrecorded at 4.6 per cent.

"An increase on this scale willundermine job creation, saidStephen Robertson of the BRC.

Property taxesto rise in April

Trust in theBBC plummetsMEDIA

BUSINESS

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Spain risks firestorm over pensions

in an effort to impress the markets

OIL and gas services company WoodGroup has agreed to buy its smallerrival PSN in a deal worth $955m(602m) that will create one of theworlds largest providers of services tothe oil and gas industry.

The deal will see Aberdeen-basedPSN become part of Wood Groupsbrownfield division, which devotes itstime to servicing ageing oil and gasfields. The enlarged company isexpected to generate around $3bn in

annual revenues.PSN chief executive Bob Keiller, will

head up the newly merged businessKeiller will also join the Wood Groupboard.

Wood Group said the acquisitionwould enhance its strategy of main-taining a balance between oil & gasdevelopment and later cycle produc-tion support

Wood Group will take on $328m ofPSNs debt. Its owners, several of whom took part in a managementbuyout of the firm from Haliburtonin 2006, will receive about $80m inWood Group shares as well as cash.

The owners include the Scottish

entrepreneur Tom Hunter whosestake will be worth around 30m.

Bob Keiller, the chief executive whohas a near 10 per cent stake, is set tomake around 60m from the deal.

Wood Group buys rival PSNBYMATTHEWWEST

COMMODITIES


440

400

520

480


ANALYSIS l Wood Group

p521.00

13 Dec

James Leigh-Pemberton, 54, is man-aging director and chief executiveof Credit Suisse UK, a role he tookover in July 2008.

He is responsible for developingthe banks client relationships inprivate banking, investment bank-ing and asset management in theUK. He also serves as a member ofthe firms Europe Middle East andAfrica operating committee.

Prior to assuming his current

role, Leigh-Pemberton held senior

positions within the Credit SuisseEMEA investment banking depart-ment, including serving as head ofEuropean investment banking,head of European equity capitalmarkets and chairman of UK invest-ment banking. He joined CreditSuisse First Boston in 1994, follow-ing a 15-year career at SG WarburgSecurities.

In the past year Credit Suisse hasadvised on RBCs acquisition ofBlueBay, Axas sale of its UK unit toResolution, Santanders acquisitionof 318 Royal Bank of Scotland andNatWest branches, Telefonicasacquisition of Brasilcel and theHeinekens acquisition of Femsa.

Alongside Leigh-Pemberton Wood Group was advised by Tristran Lovegrove, director, UK

investment banking.

JAMES LEIGH-

PEMBERTON

CREDIT SUISSE

Italys PM toface crisis vote

EURO IN CRISIS

Mass strikescause chaosacross Greece

EUROZONE CRISIS

ITALIAN Prime Minister SilvioBerlusconi is set for a crucial show-down in parliament today afterparty rebels forced a vote of no-confidence linked to his handlingof several crises including theeurozone unrest and the countrysbudget deficit.

Berlusconi is expected to winthe vote, though rebels includinglower house speaker GianfrancoFini and his loyalists have throwntheir weight behind the no-confi-dence motion tabled by the oppo-sition party. If he loses, the74-year-old will be forced to resign.

THE Spanish governments despera-tion to calm financial marketsmeans it will risk a politicalfirestorm to impose new pensionrules that may not even help itsbudget for at least a decade.

Urged by Brussels and econo-mists, the cabinet is bringing for-ward the reform, which raises theretirement age -- aiming to show itmaking the hard choices needed tosecure public finances and dealwith an ageing population in the

long-term. The cabinet has alreadypassed a record austere budget andtaken tough steps to rationalise itssmall banks. Over the past week ithas also rushed out other measuresincluding state selloffs to ease itscashflow issues.

The pensions reform, however, isabout convincing investors of itscommitment to structural change;savings built up over the lastdecade mean it will have no impactbefore 2015 and bring only gradual benefits in the years that follow.That deals with none of the issues

of banking, local governmentspending and growth which havedriven a bond market sell-off thatshows little sign of abating afterengulfing Ireland and Greece.

Yet Prime Minister Jose LuisRodriguez Zapatero last weekpulled forward his target for pass-ing the legislation to January froman initial end-March deadline.

Madrids cost of borrowing con-tinued to rise yesterday reaching5.47 per cent on its 10-year bonds close to levels which drove Greeceand Ireland to the IMF.

BY HARRY BANKS

EUROZONE CRISIS

GREEK public transport and mediaworkers launched a week of anti-aus-terity strikes yesterday expected toground flights, disrupt services andpile rubbish on the streets in the run-up to Christmas holidays.

Parliament began discussing a billto cap wages at state-run firms andintroduce company-level wage bar-gaining in the private sector, bothkey elements in a 110bn (93bn)bailout agreement with the EU andthe IMF.

Public buses across the countryand the Athens subway stopped oper-ating for six hours yesterday, whileworkers at the state broadcaster ERTjoined the walkout and staff at thestate-owned ATEbank went onrolling 24-hour strikes.

Protests will peak tomorrow, whenthe main labour unions from thepublic and private sector have calleda 24-hour general strike. Flights will be grounded and all state servicesdisrupted.

EUROZONE CRISIS

THE European Central Bank (ECB) bought far fewer government bonds than expected last week,casting doubt in markets over itscommitment to the programme.

The bank purchased 2.67bn(2.26bn) worth of bonds, up from1.97bn the week before, but farshort of the 5bn analysts hadbeen expecting.

However, the ECB warned thetrue figure could be higher astransactions take two to threedays to close.

The ECB does not break downits purchases by region but it isunderstood to be concentratingexclusively on embattled

Eurozone countries Ireland,Greece and Portugal.

While the purchases havehelped to bring down bond yieldsin these countries, the ECB isunderstood to be worried aboutthe amount it is investing.

The level of investment remainsfar below the 16.5bn spent in thefirst week of the bond-buying pro-gramme in the spring, although itis the biggest weekly amountsince late June, when the ECBbought more than7bn a week on

average.ING analyst Martin van Vliet

said: We now have a more com-plete picture of the scale of theECBs intervention in peripheral bond markets in recent weeksand, frankly, it is less impressivethan we had expected.

He added: Looking ahead, wesuspect that the amount of bond buying will be scaled back sub-stantially in the remainder of this year, amid thinning trading vol-umes. But early next year, whenthe market returns to normaltrading conditions, the ECB willlikely again have to step up its roleas peripheral bond investor of thelast resort.

Roger Bootle at CapitalEconomics raised concerns the

ECB might withdraw its uncon- ventional policy measures tooquickly. He said it should try toreassure markets by providing aclear exit strategy from the exist-ing emergency measures that arecurrently in place.

Meanwhile, Angela Merkelappears to have forced the issue ofeurobonds off the agenda at acrunch EU summit to discuss thefinancial crisis on Thursday.

The German chancellor hascome under intense pressure

BY STEVE DINNEEN

EUROZONE CRISIS

from businesses in her homecountry to resist the possibility of joint Eurozone government bonds, with many fearingGermany will be left to shoulderthe cost of its weaker rivals.

EU leaders will instead use themeeting in Brussels to try to setout changes to the blocs treatyand agree on a permanent mecha-

nism for defending the euroagainst financial upheavals.

There is pressure for theEuropean Financial StabilityFacility, used to bailout troublednations, to be extended from itscurrent 750m but this has also been resisted by Germany andallies including Holland, who sayit is sufficient.

Angela Merkelhas moved theissue of rescueeurobonds off theagendaPicture: REUTERS

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SCIENTIFIC instruments maker Thermo Fisher Scientific is set toacquire Dionex for $2.1bn (1.3bn) tobroaden its lab-equipment offeringsand boost its presence in Asia.

Dionex shareholders will receive$118.50 per share, representing a 21per cent premium over Fridays clos-ing price, according to the dealannounced on Monday. Its sharesclimbed to $118.20, just below thedeal value, in morning Nasdaq trad-ing.

Thermo shares also rose, by 3.1 per-cent, as the deal is expected to imme-diately boost profits after closing.

Dionex is the worlds third-biggestplayer in chromatography systems,which are used in analysis for every-thing from drug compounds to waterquality to food contaminants.

The systems allow components of amixture to be separated before theyare put into a mass spectrometerdevice for analysis.

Thermo is a major player in massspectrometry, and called Dionexhighly complementary to its prod-ucts.

It takes that technology that

Dionex has and now exposes it to thefull scale of Thermo Fishers reach,said Quintin Lai, an analyst withRobert W. Baird.

The deal also continues the trendof consolidation in the life-sciencestools space, Lai said.

Thermo, being the largest playerout there, continues to look for differ-ent properties to add that would com-plement its portfolio, Lai said.

He added This is one of the areaswhere it does not have much expo-sure. Thats why they went after it.

Dionex, which is based inSunnyvale, California, and has morethan 1,600 employees, introduced thefirst ion chromatography system forwater analysis shortly after its found-ing in 1975, the companies said inannouncing the deal.

In addition to increasing its lab-equipment offerings, the acquisitionwill also allow Thermo to expand itspresence in the Asia-Pacific region.Dionex generates more than 35 per-cent of its revenue in Asia-Pacific andother emerging markets. It reportednearly $420m in sales for its mostrecent fiscal year.

Thermo reported revenue of$10.1bn last year.

CHEMICALS maker Yule Catto yester-day said it had agreed to buyGermany-based latex makerPolymerLatex for 157m (131m) toboost its market share, product offer-ing and pipeline.

Yule Catto, which will also assume286m in PolymerLatex debt, plans tofund the acquisition from a combina-

tion of a four-for-three rights issuethat would raise about 225m and

new credit facilities.The new credit facilities comprise a

euro denominated three-year termloan facility of 150m and a multi-cur-rency revolving credit facility of 60m.

The deal is expected to add to YuleCattos earnings from the first year ofownership.

PolymerLatexs underlying saleswere 386.7m and underlying earn-ings 54.6m for the year endingDecember 2009.

Yule Cattos shares closed 30p upat 290p yesterday.

Yule Catto launches 225m rightsissue to buy Germanys PolymerLatex

Royal Bank of Canada (RBC) said yes-terday it had acquired boutiquefinancial advisers Loudoun CapitalPartners for an undisclosed sum aspart of its continuing expansionefforts in Europe.

The bank which replaced Citigroupas advisers to Resolution, the lifefunds group run by Clive Cowdery

last month, said the acquisition ofLoudoun, which will become part ofRBC Capital Markets, forms an impor-tant step in the expansion of itsinvestment banking business.

RBC added Mike Carter and RobinMackie, the co-founders of LoudounCapital Partners, would now head theup the European financial institu-tions group within its global invest-ment banking platform.

Patrick Meier, head of investment banking Europe at RBC CapitaMarkets, said the deal was indicativeof the focus we have placed on broad-ening our scope of coverage in finan-cial services, a sector in which RBCcan play a major role.

He added the acquisition ofLoudoun would add a new layer ofexpertise to our strong European plat-form.

RBC Capital acquires Loudoun as itcontinues expansion effort into Europe

M&A

JPMORGAN Cazenove has proved itsworth as a broker, banker and adviser

over the past five years, new analysisshowed yesterday.The bank has stayed in pole posi-

tion from its 2005 ranking to lead theNovember 2010 table of stockbrokersand advisers, as well as stockbrokingrankings for FTSE100, FTSE250 andsmall cap clients produced by dataprovider Hemscott.

It also retained client numbers,holding a total of 251 companies inNovember 2010 considerably above

its nearest competitor, NumisSecurities, which now has 124.

The tables, in the five-year anniver-sary edition of the Hemscott

Corporate Adviser Rankings Guide,show several new houses in the topfive leading positions.

Numis, Cenkos and InvestecSecurities all added more than 20clients between November 2005 andNovember 2010, to jump at least tenplaces apiece in the rankings.

Cenkos registered the biggest leap,growing from 11 clients in 2005 to102 this year, to go from an unrankedposition to number three.

In contrast, Seymour Pierce andUBS saw large client outflows andtied at fifth place with RBS HoareGovett, with 82 clients each.

In the adviser rankings, four of thetop five firms saw client numbers risesubstantially. Cenkos moved most froman unranked position to tied thirdplace by growing its client base fromseven to 71 in the period, while Arbuthnot Securities also added 40clients. Morgan Stanley showed sig-nificant gains in advising FTSE100clients, rising from 12th place in 2005to tie in second place with Bank ofAmerica Merrill Lynch this year.

JPMorgan tops brokers pollBYALISON LOCK

FINANCIAL SERVICES

Thermo Fisher

buys US rivalfor $2.1bnBYHARRY BANKS

INDUSTRY

BYHARRY BANKS

CHEMICALS

METRO BANK SECURES 50M FOR EXPANSION

METRO BANK,launched in July as

Britain's first newhigh street retailbank in more than

100 years, hasraised 50m of newcapital frominvestors to furtherdevelop its busi-ness. The latestround of capitalraising builds onan initial 75msecured earlier this

year, and the com-pany said the newcash will help itincrease the num-ber of new branchopenings over the

first two years to atleast 18 from 12.

Picture: REUTERS

240

280

260


ANALYSIS lYule Catto

p290.00

13 Dec

BEST OF THE CITY STOCKBROKERS

Rank Nov 2010 Rank Nov 2005 Clients ClientsNov 2010 Nov 2005

1 JP Morgan Cazenove 1 251 246

2 Numis Securities 12 124 83

3 Cenkos Securities - 102 11

4 Investec Securities 13 85 62

5 RBS Hoare Govett 4 82 114

5 Seymour Pierce 3 82 138

5 UBS Investment Bank 2 82 142

COMMUNICATIONS firm Creston hassnapped up US healthcare PR opera-tion Cooney/Waters in a 19.5m deal.

The transaction will come in threestages, including a 5.9m upfront pay-ment to be financed from existing bank facilities and two subsequentpayments in 2014 and 2017.

Creston says it expects the acquisi-tion to be earnings enhancing in the

first full financial year. The US firmwill form a synergy with Crestons UK-

based healthcare PR agency, Red DoorCommunications. The acquisition isstill awaiting shareholder approval ata general meeting tomorrow.

Singer analyst Jonathan Barrettsaid: The proposed acquisitionsexpand Crestons PR healthcare foot-print in the key US market and willgive the company greater access tomany of the large global healthcarecompanies. At five times Ebit, the priceis attractive.

Creston has seen its revenues jumpnine per cent in the first half to 32m.

Creston to snap up USPR firm Cooney/Waters

COMMUNICATIONS

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THERE has been a mixed reaction to thenews that Congressional Republicans andPresident Obama have reached a deal toextend the Bush tax cuts. While a number

of Democrats have expressed outrage that thecuts will continue for everyone, the packageshould be accepted. This helped lift US equitiesand by extension most other global stock indices.

Bond investors were less enthusiastic andyields rose sharply last week. While many ana-lysts saw this as a reaction to improved growthexpectations, others were less sanguine. Afterall, with the unemployment rate heading backtowards 10 per cent and the housing marketclose to a double-dip, it could be argued that theAmerican economy is a long way from making ameaningful recovery.

Some argue that higher Treasury yields are a

response to the inevitable fiscal deterioration.The deal struck last week is seen as a cowardlypolitical fudge. Without any reduction in govern-ment spending, the tax cut extension will onlyadd to debt. And if the economic outlook hasimproved so much, the Fed should be consideringwinding down quantitative easing, not starting adebate about renewing it.

There is a very real danger that US state andmunicipal debt issues will be the next problem torequire a bailout. California, Illinois and NewYork are among the most indebted and vulnera-ble states. There is evidence that investors arenot only balking at the idea of buying freshmunicipal bonds; they are actively selling.

Despite these concerns, the S&P 500 has bro-ken back above significant resistance at 1,230.This marks the 61.8 per cent Fibonacci retrace-ment of the move from the October 2007 highto the March 2009 low. It now seems to be con-solidating above this level, which means there isa good chance that the index can build on thismove and push higher into the year-end. Soalthough last weeks surge in US bond yields hasunnerved some, the bulls are confident that itwont undo another positive year for equities.

DESPITE ALLUS EQUITIESSTILL CLIMB

DAVID MORRISONCFD MARKET STRATEGIST, GFT

1 The Chinese economy has been driving theworlds growth for the last couple of years, butsome economists are beginning to worry thatit is overheating. Inflation hit 5.1 per cent inNovember according to the latest figures, withprice increases especially intense in coastalcities. The Chinese government has been tryingto damp down property speculation, while onFriday, it increased banks reserve requirementsin an attempt to suck liquidity out of the sys-tem. So far, however, it has avoided raisinginterest rates. With Chinese savers seeking outever more speculative investments to beatinflation, more monetary tightening may be onthe way. CFD traders should watch out forknock-on effects mining equities, energiesand metals in particular are vulnerable.

2 Thanks to the uncertainty surrounding sov-ereign solvency in the European periphery,European equities have been sold heavily overthe last few months. With fears assuaged butnot yet eliminated, it is probably too early to golong on peripheral equities, while German one

are possibly a little too popular. Nicely in themiddle though are French and Italian stocks.Analysts at UBS describe those countries asforgotten, but not rotten, with historicallylow price-earnings ratios as a good reason togo long. AlphaValue, a research firm, reckonsthat all of the French shares it tracks areundervalued, while 22 out of 25 Italian onesare, offering plenty of potential for CFD tradersto profit.

3Copper has had a remarkable year. Thanks

to gargantuan Chinese demand, the price hasrisen by 35 per cent since last spring to $9,215a tonne yesterday. As stockpiles dwindle, manyanalysts expect that to continue. Chinesedemand snapped up in November, increasingby 29 per cent month on month according toanalysts at RBS. RBS also points to new physi-cal copper funds as a potential driver ofdemand. Goldman Sachs analysts expect pricesto increase to $11,000 a tonne next year.Chinese tightening might lead to disappoint-ment, however, so CFD traders ought to becareful.

What to watch next year, by Daniel Knowles

Anticipating the

kinks in the road

Markets& Investment20 CITYA.M. 14 DECEMBER 2010

WTI crude oil rallied some 150points yesterday morning tohighs around $89.40 on theback of relief over China not

raising rates and positive demand fore-casts. The technical picture is showingsigns of crude topping out around thislevel and it may well be worth taking theshort side of the market for this week onrallies back around $89.20 to $89.40.Crude fell for the first week in three lastweek to test the $87.30 area and thatshould be the first target again this week.Spread Co offers a spread on January USCrude of $88.55$88.59.

British retail sales figures forNovember are due out on Thursday.Theres no real expectation of any sur-prise though and with the worst of the

weather not hitting the country untilDecember, any impact from the snowshould be minimal. However, retailersseem generally confident that thisChristmas will be no worse than last, soany early indications of weakness couldsee investors eager to sell. IG marketsoffers a spread on the UK retail sectorindex of 1,718-1,722.

Sports Direct releases interim resultson Thursday and investors will hope thattheir numbers can confirm the goodshare price strength theyve seen so farin 2010. The stock is up 50 per cent sofar this year as the outlook for the retail-er has been improving. With the combi-nation of a successful Ashes series downunder so far and the Christmas shoppingseason well under way, the outlookremains strong for the share price.Capital CFDs quotes a price of 144.0p-145.2p.

The US dollar got hammered hard onMonday with euro-dollar rallying some200 pips to test the $1.3400 region andsterling-dollar breaking through lastweeks highs at $1.5861. Normally euro-dollar would be an interesting sellaround this level but with markets thin-ning out on the run up to Christmas, theeuro could well keep rallying to $1.35 oreven $1.36 so a short sell, althoughtempting, might turn out to be painful.Spread Co offers a 0.8pt spread oneuro-dollar of $1.33801$1.33809.

Daniel Knowles

THETIPSTER

THE OIL PRICE RALLY

IS NEAR TO ITS END

Next year will be unpredictable Picture: GETTY

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BLACKBURN captain Ryan Nelsen lastnight expressed his dismay at theshock sacking of manager Sam

Allardyce, saying he was devastated by the actions of the clubs newIndian owners.

Allardyce was shown the doordespite Rovers being five points abovethe Premier League relegation zonein 13th place, amid rumours of con-flict with the Ewood Park hierarchyover transfer policy.

And in a fresh twist to the unex-pected move, Allardyce is now beingtipped to replace Avram Grant at

West Ham after a flurry of unusualbetting activity.

I am devastated for Sam. He hadan absolutely fantastic relationship

with all of the players, said Nelsen.Everyone respected him. He took

the club out of the doldrums really.We were in massive trouble with nomoney. He solidified us and put usinto a top 10 position, and again hedid it on a shoestring.

Im just getting over the shock ofit. Weve got to get over it, but at the

moment I want to say, and I canspeak for nearly all the playersIm sure, that they will be devas-tated. He was a very likeablecharacter.

The former Newcastle

and Bolton boss (right)released a statement viathe League Managers

Association declaringhis astonishment atthe dismissal.

I am very shockedand disappointed to beleaving BlackburnRovers, said Allardyce. Iam extremely proud tohave managed this cluband I enjoyed a fantas-tic relationship withthe players, my staffand the supporters.

Blackburns owners,Asian poultry giant Venkys,acted in the wake ofSundays 2-1 defeat toBolton but said the deci-sion had not been knee-

jerk. We have taken this

decision as part of our wider plans and ambi-

tions for the club, read a statementfrom Rovers. We would like to puton record our thanks to MrAllardyce for his contribution to

Blackburn Rovers. Allardyces sacking came

just hours after some book-makers reported a numberof large wagers on him andGrant to be the next topflight managers to leavetheir posts. Grant is underhuge pressure at UptonPark, with the Hammersthree points adrift at thefoot of the table and with

just one win from their last11 league games.

Former Ajax andTottenham manager Martin Jol was the favourite toreplace Allardyce last night,

while some speculationlinked Rovers with former

Argentina coach DiegoMaradona.

Venkys, run by the Rao fam-ily, publicly backed Allardycelast month following the com-

pletion of their 43m takeoverof the club in October.

Sport 23CITYA.M. 14 DECEMBER 2010

West Ham linked to Allardyce sackingSPORT | IN BRIEFLampard expects to win leagueFOOTBALL: Frank Lampard is convincedfloundering Chelsea will retain theirPremier League title if they replicatetheir performance in Sundays 1-1 drawat Tottenham. He said: If we play withthe spirit we showed there, I have nodoubt well win the league, becauseweve got the quality in our team.

Win sends Higgins back to No1SNOOKER: John Higgins victory at theUK Championship has taken him back tothe top of the world rankings. It is theScots first major tournament triumphsince serving a six-month ban for bring-ing the game into disrepute.

Butt insists career isnt overCRICKET: Former Pakistan captainSalman Butt still expects to play for hiscountry again despite spot-fixing allega-tions that are threatening to end hiscareer. Butt said: I still remain positiveand I know what Im made of.

Boks duos B samples positiveRUGBY UNION: South Africas ChiliboyRalepelle and Bjorn Basson are facingbans after B samples confirmed theirpositive drugs tests. The duo tested posi-tive for the banned substance methyl-

hexaneamine after last months 23-21win over Ireland.

Flower admits to Anderson gambleEngland coach concedesglobe-trotting bowler maynot be fit for third Test,writes James Goldman

Results

ENGLAND coach Andy Flower admitshe will be taking a gamble on the fit-ness of James Anderson as the fast

bowler prepares to spearhead hissides attack in the third Ashes Test,having undertaken two long-haulflights in the space of four days.

Anderson, who has taken eightwickets in the series so far, flew homeon Wednesday to be at the birth of hissecond daughter and was only reunit-ed with the rest of Englands touringparty on Monday.

Flower conceded he could not becertain that the 28-year-old wouldhave recovered fully from two 24-hour flights when England and

Australia renew hostilities in Perth

on Thursday, but hopes his decisionto allow his premier strike bowlertime off wont backfire.

It is not the ideal preparation butwe will try to get the right amount ofrest into him over the next few days,Flower said.

In competition, you cant alwaysget perfect preparation. You getthings that can go wrong with illness,family or injuries. There are all sortsof distractions, but this is just one ofthose things you have to deal with.

James will have the same amountof practice as the rest of the guys.

As well as concerns over his open-ing bowler, Flower has also had toremind his stellar batsman, KevinPietersen, who returned to form in

Adelaide with a double ton, of hisresponsibilities following the fine hereceived for speeding in a yellowLamborghini arranged for him by for-mer Australia spinner Shane Warne.

Pietersen was also reprimanded forhis outburst on Twitter aimed at the

Adelaide groundstaff, whom he branded pathetic, before the sec-ond Test.

The tweet has been dealt with,

and Kevin has been reminded of hisresponsibilities, said Flower. Thespeeding fine is a personal issue that

bears little relation to anything thathappens in the team.

Flower (inset) also confirmed he

has a clear idea of the seamer he willselect to replace the injured StuartBroad Surreys Chris Tremlett isthought to be the favourite but nodecision will be formally announceduntil the morning of the Test.

THE ALL-ROUNDER |THE GOSSIP FROM DOWN UNDER

HAURITZS GARAGE SALE

Sportsmen these days often resortto a very 21st century method ofventing their frustration in the formof Twitter rants. The world of socialmedia is clearly not for shunnedAussie spinner Nathan Hauritz,however, who chose to throw histoys out of the pram, or more accu-rately, his jumpers out of thegarage, in the form of a bizarre kitsale. Hauritz has been strangelyoverlooked for this Ashes seriesand spent part of his weekend auc-tioning off some of his Test kit in animpromptu giveaway in Sydney. Hetold stunned onlookers that he didnot play for his country any more.

BROAD ON THE AIRWAVESStuart Broad, ruled out of the restof the Ashes series with a sidestrain last week, is to remain inAustralia as part of the BBCs Test

Match Special team in Perth. Broadtweeted yesterday, self-mockingly,that hed been employed specifical-ly to make the tea for his former

skipper Michael Vaughan, also aTMS expert summariser.

HUGHES PUNCH-DRUNK BY BEERFormer Aussie Testselector MervHughes concededhe was blownaway by MichaelBeers selection.Hughes said Beers

name had not beendiscussed before his

departure from thepanel in October.

NICE TO MEET YOU, TOOBeer, himself, meanwhile, admittedhe will meet many of the Aussiesquad for the first time this week.The 26-year-old, who has only fivefirst class matches under his belt,met Ryan Harris and Shane Watsonin the Qantas Lounge in Brisbane.

Anderson rejoined the England squad on Monday Picture: ACTION IMAGES

BY FRANK DALLERES

FOOTBALL

COMMENTFRANK DALLERES

EVEN before Venkys had complet-ed their takeover of Blackburn last

month, their relationship withSam Allardyce looked destined tobe a fragile one.

From one of the Indians firstpublic utterances Allardyce learnedhe would only be granted a 5mtransfer kitty and that his target

was merely to finish in the top 12. While it may have pointed to

greater job security for Allardyce, itwas hardly what an ambitious manyearning to bolster his squad wouldhave wanted to hear.

His sturdy record Rovers are13th is no reason for his depar-ture, so suspicion rests on a fallingout behind the scenes. With sportsagency Kentaro said to be advisingthe new owners on transfers, there

was potential for tension. And with the looming January

window demanding boardroomstrategy be drawn up now, it was an

even more combustible brew.

email [email protected]

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ARSENAL manager Arsene Wengerbelieves his team are still capable ofsustaining a challenge for thePremier League title despite seeingManchester United ominouslyclimb back to the summit, with agame in hand, following lastnights defeat at Old Trafford.

Ji-Sung Parks splendidly impro- vised header four minutesbefore half-time proved thedifference and extended

Arsenals miserablerecord against theirprincipal title rivals.

The Gunners havenow lost 10 and drawnone of their last 11games against United,

who could even afford tomiss a late Wayne Rooneypenalty, and Chelsea in allcompetitions, but Wenger (inset)

believes it would be wrong to writehis side out of the title race on the

basis of those statistics.Calm down, he said when

asked why his side consistently

Parks goal moved Unitedtwo points above Arsenal

Picture: PA

struggle against theelite. You have to berealistic and objec-tive and not reachbig conclusions.

It is a big frus-tration and a big

disappointment butwhat is important is

that we bounce back inour next game. Overall

on what I have seen tonightthere is no reason not to believe.

Wenger will hope to regain theground lost last night when Unitedtravel to Chelsea on Sunday, whilethe champions in turn visit the

Emirates in a fortnight, where Arsenal should be able to call onCesc Fabregas and Robin van Persie,

who were only fit enough forcameo roles from the bench here.

Despite an abundance of posses-sion, Edwin van der Sar was onlyseriously tested on one occasion,from a Samir Nasri daisy cutter,

which he pushed out in the direc-tion of Marouane Chamakh, butthe Morocco striker could not forcethe ball beyond Nemanja Vidic.

At the other end, WojciechSzczesny, 20, making an assuredPremier League debut, saved wellfrom Anderson and Rooney in the

second-half, but had no chance with Parks deft flick in the 41stminute after Nanis deflected crosssquirted across the penalty area.

Rooney blew the opportunity tomake the closing stages comfort-able when he went for power ratherthan placement following theharsh award of a penalty againstGael Clichy for handball.

United manager Sir AlexFerguson added: We have a diffi-cult game against Chelsea onSunday but it is also a very impor-tant game. If our back four main-tain their level of consistency we

will have a chance.

Park strife asArsenal falter

Ji-Sung Parks winner last nightwas no one-off occurrence; hehas terrorised Arsenal time andtime again since joining United.

NEMESIS: PARK

STRIKES AGAIN

Sport24 CITYA.M. 14 DECEMBER 2010

BLACKBURN SACK

SAM ALLARDYCEBUT BOSS LINKEDTO HAMMERS: P23

The Korean applied the coup de grace asUnited completed a Premier League dou-ble over Arsenal last season, Park scoringthe third in a 3-1 win at Emirates Stadium

North London has proved a happy huntingground for Park, who struck the openinggoal as United dumped Arsenal out of theChampions League 3-1 in May 2009

As early as April 2006 Park was ripplingthe Gunners net, this time scoring the sec-ond goal in a 2-0 win at Old Trafford asUnited finished runners-up to Chelsea

BY JAMES GOLDMAN

FOOTBALL

10

MANCHESTER UTD

ARSENAL

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