iBall interviews Ian King - business editor, The Sun.

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Interviewer: Currently the best business journalist in Britain and that's
official. Ian King of The Sun is among the most influential men
working in business media today. IBall was lucky enough to catch up
with him in his lair. It may not come as a surprise that he's not
very shy in expressing some of his views on, namely the Tory
leadership, the Financial Services Authority and on City bonuses,
to name just a few.
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Interviewer: Private investors. Important to big business or just a nuisance?

Ian King: I think they're -- they're vital to big business in a lot of cases.
Certainly if you're a big consumer facing brand like the High
Street Bank, a big insurance company or retailer, then these people
are not only your shareholders, they're also your customers and
they will pick up very, very quickly; probably before anyone else;
whether they -- how well the business is doing. And, in my
experience, small investors are not backward incoming forward in
terms of relaying concerns, problems, complaints, brickbats and
bouquets to management where they -- where they feel necessary. So,
I think they're very good in that sense. They're probably quite
inconvenient for a lot of companies; I mean for example, you saw
the way that O2 for example, tried to get rid of a lot of its small
shareholders simply to reduce costs, I mean they had -- they had
1.6 million small investors and I think they brought that down to
about 800, 000. That was -- that was purely to sort of cut down on
bureaucracy and so forth.

Interviewer: Do you think small investors do well out of big businesses?

Ian King: Well, it depends. Some -- some do, some don't, so I mean to go back
to O2, I mean that was when O2 were trying to rationalize their
shareholder base. I ran a big piece in The Sun urging all readers
to keep their O2 shares because this was a business that was --
that was going places and would -- and the share price will carry
on rising and subsequently when it was taken over by Telefonica or
the premium to that price, I had scores of readers getting in touch
saying, "Thank you very much. You've made me a lot of money". So,
that -- that's a case where they did well, I mean obviously, you
think of others when Marconi went down the tubes in 2001, there
were -- there were tens of thousands of small investors on that one
and they -- they lost their shares. Likewise, we've seen what's
happened with the Northern Rock, I mean the shares are down 85
percent over the last 12 months. They've got 176, 000 small
investors, so that's a case where -- again they have done badly.

Interviewer: What makes you tip a share?

Ian King: Well because our readership is so, so wide, it would have to be --
I mean we have a -- we have a real broad church of readers, you
know, we have all the, sort of traders in the city and, you know
people who are very, very well up on the investment matters, down
to complete novices. So, you can't put them into anything too
risky, so the kind of things that we look for really are businesses
with a solid cash flow that are profitable, that have good
prospects and where they're on reasonable ratings, really I guess.

Interviewer: What's the best share you've tipped?

Ian King: The best share I've tipped, goodness. Well a real pot of gold
economy I tipped, this is when I was back in the Guardian in 1996
it was, I tipped Ash Debt, the Rotherhithe Group, and that went up
70 percent in -- in just under a year that was quite a good one. On
the -- on the sort of really risk exotic side of things, I tipped
an expiration stock called Landore Resources, which is one of the
Sun's share tips of the year. I tipped that at nine and a half P
back in January and today that's trading at 16 and a quarter so,
that's a reasonable return. And, the -- you know the year's not out
so that might make a bit more as well.

Interviewer: And what's the worst?

Ian King: The worst. Well, I mean the word "Screen" brings me out in a cold
sweat. I mean that was a real sort of Dot Com classic. And, I
tipped this one actually, first of all when I was at The Mail on
Sunday back in -- back in the tail end of 1999. And, I mean that
was when the Dot Com boom was at its craziest. I wrote about -- I
had a column there called "Share Week", which I've set up. And, it
was quite a sort of market moving column and I tipped that one at
four and a half P on the Sunday. And the following day, December
1999 it was, the mid -- the mid price on the quote was about 21 and
a quarter. That was ridiculous, I thought this one -- and I
actually quite believed in the company, I've met the managements
and I thought the prospects were pretty good. It seemed financially
fairly stable. I made it one of The Sun's share tips of the year in
2000 when I, I can moved over here and, the wretched thing
practically collapsed on me; which is a bit of a disaster but I was
-- my share tips that year were actually the best on Fleet Street
because all of the other ones I went for -- sort of solid blue-
chips like Capri and Land Securities and, all of the other papers
were still tipping Dot Com dreadfuls but that was my worst one. I
still get emails from readers even now moaning about it.

Interviewer: Executive bonuses, important or obscene?

Ian King: It depends on the case. I think there's a lot of ballyhoo and
hoopla about executive pay, which is absolutely quite frankly
ridiculous. If you look at how much a PLC boss makes compared with
private equity hedge fund managers and even the old fashioned
corporate financiers in the market, all of those guys earn far more
than a PLC boss and I would argue probably without the personal
stress and hassle that goes with it. I'm going to give you an
example; Sam Laidlaw, chief executive of Centrica, who -- he
probably only makes about a million a year. And that might sound
like a lot of money to the man on the streets but, you know this is
a guy who runs a company where people die on the job if safety
standards fall down. It's a part -- quite apart from all the
financial performances, performance that he has to achieve. So, I
think he's worth every penny, he's out every single night dining,
contacts in the oil and gas sector and in the market. I mean that's
a hell of a job, you know, it's an enormous company and that's some
sort of 25 billion plus company. I'd say he's worth every penny
when you think how much you could go off in private equity. I mean,
you've seen Lowel brand BP. You know, who -- people used to go on
about how it was outrageous that he got 30 million one year. Well,
I mean, he'd probably make that in one year in the new private
equity job he's got. So, people like that deserved the pay. If you
look at some -- I mean, obviously what -- what is wrong is the
rewards of failure where people would paid off for bringing a
company to its knees, I mean that's obviously deplorable but
unfortunately half the time it's written into their contract so you
can't stop it but I think people get awfully carried away with a
bad executive bonuses and wrongly so.

Interviewer: Is PR important to big business or just a kind of smoking mirrors
to keep the truth from the shareholders?

Ian King: Sometimes it's of great value and others -- others less so, I mean,
yes they -- there are occasions where there's a bit of smoking
mirrors going on. On the other hands, PR's can be awfully helpful.
I'll give you an example yesterday I was -- well, I shouldn't name
names or name the company.

Interviewer: No, go on.

Ian King: But, I was -- I was chasing a breaking news story and I takeover
situation and, you know there were lots of names in the frame and I
was able to whittle it down fairly quickly to who it was just by PR
saying well on the record we can't -- can't tell you anything off
the record, it's [inaudible 0:08:28.7]. And things like that they
are immensely helpful in terms of whether they do a good job for
their clients. Sometimes they do, sometimes they don't.

Interviewer: Now onto somebody who, I don't think it's one of your favorite
people, Mr. David Cameron. As you said about two years ago where
you described the tour leader as a slippery, poisonous individual
who, while PR for the world's worst TV Company Carleton was a
smarmy buddy who regularly threatened journalists who dared to
write anything negative about Carleton, which was nearly all of us.
Are you going to be sending him a Christmas card this year?

Ian King: I think he's a much better leader of the conservative party than he
ever was a corporate PR man. I think he's done actually a very good
job for them and I've been very impressed by what he's done.

Interviewer: Do you have any advice for investors?

Ian King: Oh, goodness.

Interviewer: It's a big question.

Ian King: Well, on the stage of the markets at the moment, I don't know, I
mean I find it very difficult to call this market at the moment.
You know, you look at the U.S., you look at the state of the U.S.
Housing Market you wonder whether, you know, the U.S. is
potentially going to tip into recession. The dollar is being
absolutely crushed, which of course would be good for their balance
of payments deficits. But that's a major concern controlling the
carry-on at the breakneck pace, which it's expanding, I'm not so
sure it can -- there are massive structural problems in China that
they need to deal with infrastructural problems obviously. But also
they've got millions and millions of impoverished peasants, many of
whom are flocking to the city to find work and if you can't -- if
those guys can't be found jobs because the economy is slowing down
then I think you could have social havoc in China. So, that's a
concern. Commodities prices are obviously very inflationary, I mean
and that's pushing the companies input costs. So, you know, in a --
in a kind of deflationary environment that we've seen over the last
few years, companies often have to withstand that hit and obviously
that impacts on their margins. So, you know, there are fears over
corporate profits as well and, you know, we're what, well what,
three and a half years into -- into a boom market, you know since
the market bottomed out in March '03. So, all good things have to
come to an end. So, you know, I do wonder about global economic
prospects, yes.

Interviewer: If money was no object what job would you least liked to have?

Ian King: Least liked to have?

Interviewer: Yes.

Ian King: Well, I'd hate to be a school teacher because I think, you know,
standards of behavior in Britain schools are just so awful. That
just sounds like a bucket load of stress. Likewise, I would hate to
be a policeman for the similar reasons.

Interviewer: Or work in the hospitals.

Ian King: Yeah, I think all the -- all those jobs are just awful and I'd hate
to do any of them hence, you know, I have immense respect for
people that go and do them, I couldn't do it.

Interviewer: So, buy or sell Transport for London?

Ian King: Sell.

Interviewer: 2012?

Ian King: Buy.

Interviewer: Hell, just London?

Ian King: Buy.

Interviewer: iPhone?

Ian King: iPhone, sell.

Interviewer: The Financial Services Authority and MiFID?

Ian King: Sell.

Interviewer: Why?

Ian King: It depends on who you talk to, actually. I know the Financial
Services Authority has done a great deal of damage. And I think
there -- there are meddling bureaucracy, I'm not convinced that
they have done a particularly good deal for investors in the U.K.,
while adding to businesses' costs and what I dislike about them the
most is that they'd love to regulate the financial press.

Interviewer: The U.S.A.?

Ian King: Hold, loose hold.

Interviewer: France?

Ian King: Buy actually.

Interviewer: X-Factor?

Ian King: Oh, sell.

Interviewer: NewsReaders?

Ian King: They'll hold.

Interviewer: Sir Terry Leahy?

Ian King: Strong buy.

Interviewer: Web 2.0?

Ian King: Hold.

Interviewer: Web 3.0?

Ian King: Good girl, yeah.

Interviewer: The FTSE at 6800?

Ian King: Take profit.

Interviewer: B.B.C.?

Ian King: Buy.

Interviewer: And iBall?

Ian King: iBall. Oh, oh, strong buy. Sorry.