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29/11/10 till 02/01/11 is 98,444

Goldman’s

UK tax billtops £2bn

THE UK treasury made more than£2.29bn from Goldman Sachs last year,City A.M. can reveal.

Goldman does not publish a break-down of tax costs by region, but it isunderstood that the amount repre-sents a 14.5 per cent rise in its tax costscompared to 2009, despite a 35 percent fall in global pre-tax profits.

The sum equates to 4.3 per cent of the £53bn paid in total UK taxes by theentire financial services industry.

The figure includes corporation tax,national insurance, VAT, income taxpaid by employers on behalf of employ-ees and the effect of the one-off bonustax last year, which accounted for$465m (£290m) of the cost.

The tax bill suggests pay of £382,000per head for its 6,000 London-basedstaff – far more than its 2010 averagepay per global employee of £286,000.However, Goldman partners reducedtheir donations to charity in 2010, giv-ing $320m (£200m) globally versus$500m (£312m) in 2009.

The revelation of the bank’s risingtax costs will raise further worries thatthe UK risks pricing itself out of thefinancial services market with increas-ingly punitive charges for banks that want to do business here.

Conservative MEP for London SyedKamall said: “While it is tempting forpoliticians to ask banks to pay higher

taxes after some were bailed out withtaxpayers money, we need to think through the consequences of tinker-ing with taxation too much.”

BBA chief executive Angela Knight, deputy PM Nick Clegg and ICB chair Sir Jon Vickers. Pictures: Micha Theiner/ CITY A.M , PA

SPLITS emerged over the direction of UK banking reform yesterday, asdeputy leader of the coalition Nick Clegg expressed support for a break-upof British banks even as his own gov-ernment’s Independent Commissionon Banking (ICB) came out against aradical break-up plan.

The divisions throw into doubt theimplementation of the ICB’s recom-mendations, which will be subject togovernment approval when they arepublished in September.

While Chancellor George Osborne welcomed a speech by ICB chair Sir John Vickers on Saturday, Cleggignored Vickers’ warning to avoidinflammatory rhetoric.

He said that banks had been “anoversized liability for the British econo-my” and that regulation must “hiveoff or insulate very high-risk, over-leveraged banking activities from low-risk, high street retail banking”.

His comments pre-empt the ICB’sreport, with Vickers having ruled outthe most radical break-up plans only aday earlier as inflicting “considerableeconomic cost”.

“The popular ‘utility/casino’ distinc-tion between types of banking activity

seems more catchy than helpful,” Vickers said.But Clegg shrugged off the warning,

saying that previous UK governments

SPLITS WIDEN ONBANKING REFORMBY JULIET SAMUEL

BANKING▲

www.cityam.comIssue 1,306 Monday 24 January 2011 FREE

GEEK SPEAKSTEVE DINNEEN

TALKS GADGETS

IN A NEW WEEKLY

COLUMN P24

GREEN PARTY PULLS OUTOF IRISH GOVERNMENTEND OF LINE FOR COWEN P3

BUSINESS WITH PERSONALITY

had “allowed the housing market tolet rip, to become a casino”.

Clegg’s language was slammed by Angela Knight, chief executive of theBritish Bankers’ Association, who toldCityA.M : “We don’t have a casino bank-ing system in the UK. All politiciansand others need to be very careful

about how they’re portraying our banks.”She also said that Clegg risked

“using easy words that may get a

round of applause on day one but will be to the detriment of everyone there-after.”

Another senior banking source said:“It is populist to cry for the break-upfor the banks but we all need to realisethere are substantial costs for cus-tomers and shareholders.”

Vickers took a moderate stance inhis speech, but signalled that the ICBis looking at ways to reduce retail cus-tomers’ exposure to wholesale banks,

potentially through different capitalrequirements. However, he rejectedseparating the ownership of invest-ment and high street banks.

The ICB’s report will not be binding,meaning that Osborne will have tonegotiate with his Lib Dem allies overits implementation. Clegg’s attack

comes as industry-wide talks toimprove banks’ image stalled.MORE: VICKERS’ SPEECH P4-5;

MERLIN TALKS STALL: P12

BY JULIET SAMUEL

EXCLUSIVE▲

8/7/2019 Cityam 2011-01-24


News2 CITYA.M. 24 JANUARY 2011

Police look atBrown claims THE News of the World phone-hack-ing scandal continued to gather pace yesterday, with Gordon Brown askingpolice to investigate whether he wastargeted. The former Prime Ministerexpressed concerns his messages may have been intercepted between 2005and 2007, when he was chancellor.

Energy and climate change secre-tary Chris Huhne ramped up pressureon News Corp – owner of the News of the World – casting doubt on thenewspaper’s defence that a single“rogue reporter” was responsible forthe hacking. He told the BBC: “Itseemed to me clear that the numberof people that were being hackedclearly was not consistent with it being one rogue reporter who hap-pened to be the royal correspondent.”

The allegations finally toppledDavid Cameron’s key aide Andy Coulson over the weekend. TheNumber 10 spin doctor quit, saying he was no longer able to give “110 percent” to the job. Yesterday City sources were questioning whether the scandalcould even affect News Corp’s bid forSky. One suggestion is that News Corpcould fall foul of “fit and proper” own-ership rules if it is found it bought off potential witnesses in a in a futurecriminal prosecution. However, sourcesclose to media watchdog Ofcom toldCity A.M. this scenario is “far fetched”.

BY STEVE DINNEEN

MEDIA▲

Coalition rejecting its own medicine

THIS week will be critical for the coali-tion’s economic policies, in terms of perceptions even if not in reality.Despite their tentative nature, Tuesday’s fourth-quarter GDP figures will take centre-stage in Westminster:if they come in as expected, the coali-tion will celebrate; if they are weak,Labour’s Ed Balls will have a field day trashing the government anddemanding a new round of Keynesianpump-priming. Neither argument would be fair –but that is politics.

The consensus view is for growth of 0.4 per cent but snow-related disrup-

tion in December – an embarrassingly severe problem for a supposedly advanced economy – means that thisfigure could easier be lower.Frustratingly, this one-off chaos

means that this week’s figures will betoo distorted for anybody to be able todraw sensible conclusions from them.

Detailed predictions of Tuesday’sfigures are useless: nobody knows what the ONS will put them at – espe-cially given that these statistics are fre-quently revised later. But while asrecently as two weeks ago, virtually allthe data for the UK economy had beenpositive, denoting decent growth, thisis no longer the case. Manufacturingis still booming but services slumpedin December. Construction is slowing. The employment figures also suggestthat after a strong rebound betweenFebruary and October, the UK econo-my has slowed.

One reason why it is so hard tounderstand what is happening is thesloppy reporting of easily verifiablefacts. I’m getting sick at the number of

times people are claiming that “retail-ers suffered their worst December onrecord.” Had that been the case, sales would have collapsed by 99 per cent,dropping back to the level seen in the

1930s when supermarkets didn’t existand people spent a few shillings a week. What actually happened is thatthe growth rate for parts of the indus-try was the worst in years – and there was no overall change in the volumeof retail sales compared withDecember 2009. Volumes fell 0.8 percent compared with November. Volumes in the three months toDecember was 0.4 per cent higherthan a year ago.

There is also an exaggerated view of the public spending cuts to date.Central government current expendi-ture hit a record £53.8bn inNovember, up 10.7 per cent year on year, a huge increase. Public sector netdebt rose from £846bn in October to£863.1bn in November. Every week, billions more are still being added tothe national credit card.

The slowdown cannot have beencaused by massive spending cuts when spending is still surging.Bizarrely, the coalition is failing to fol-low its own, OECD-inspired advice:

that the best way to reduce a deficit isto ensure that three-quarters of thereduction comes from cuts and only aquarter from tax hikes. So far, all thetightening is coming from tax hikes,including Vat and April’s rise innational insurance.

The good news is that the averageforecast is now for UK growth of 2 percent in 2011; some snow affectedspending might be transferred to January. The global boom is accelerat-ing. The bad news is that the coalitionis continuing to hammer privatefirms with more red tape and tax –and failing to follow its own policieson spending. The markets won’t panicabout growth – but if they start to worry again about the deficit, we will be in real trouble.

[email protected] Follow me on Twitter: @allisterheath

THE COMPANY formed following themerger of British Airways with Spanishcarrier Iberia will today become thefirst wholly foreign incorporated firmever to trade on the London Stock Exchange as a FTSE100 firm.

International Consolidated AirlinesGroup (IAG) will fly into the FTSE100 asone of the UK’s top companies, despiteits official status as a Spanish firm.

Overseas companies traditionally

achieve a top flight London listing by incorporating in accordance with UK company law and by officially register-ing as a business with CompaniesHouse.

IAG however is incorporated underSpanish law and pays taxes in Spain, yet is headquartered in London and will primarily list on the London Stock Exchange.

BA and Iberia will retain their brands as part of the $8bn (£4.9bn)merger deal, and will have a combined419 aircraft flying to 205 destinations.

BYRICHARD PARTINGTON

M&A▲

BA and Iberia fly into FTSE IAG becomes the first wholly owned foreign incorporated firm to trade as a FTSE100 firm

NEWS | IN BRIEF

Balls begins his attackLabour’s new shadow chancellor EdBalls wasted no time yesterday in get-ting stuck in to his new portfolio, accus-ing his opposite number George Osborneof "cutting too far too fast". But thecombative economist faced plenty of criticism, with deputy prime minister

Nick Clegg leading the offensive, brand-ing him as the man in charge when Citybankers “were gorging themselves onbonuses and lending irresponsibly.”Balls called for a fresh £3.5bn tax onbankers’ bonuses.

Fair fuel stabiliser consideredTransport secretary Philip Hammond saidthe government is still considering a “fairfuel stabiliser” – which reduces duty onfuel at times of high prices to even outprices at the pumps. His comments comeafter the Federation of Small Businesseswarned a quarter of its members could beforced to lay off staff because of fuelcosts. London mayor Boris Johnson yes-terday wrote: “If I were the government,I would think seriously about that fuelduty stabiliser, because when it costsmore to fill your tank than to fly to Rome,something is seriously wrong.”

EDITOR’S LETTER

ALLISTER HEATH

7th Floor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowNight Editor Katie HopeBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alex Ridley

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Former Prime MinisterGordon Brown hasemerged as a potentialtarget of News of theWorld phone hacking

Picture: PA

AUDITORS SEEK TO EASE FEARS The four biggest auditors have deniedthat their dominance of the marketfor large companies had created a sys-temic risk akin to that posed by theleading banks. Deloitte, Ernst & Young, KPMG and PwC have told theEuropean Commission that they are willing to help draw up contingency plans addressing the possible scenarioof a collapse of parts of their business.

HALF OF VAT PENALTIES OVERTURNEDMore than half of value added taxpenalties are being overturned onappeal, according to statistics thatdraw attention to a new internalreview procedure that makes it easierto query Revenue & Customs (HMRC)decisions. The figures may fuel con-cern that HMRC is issuing penaltiestoo readily, although they will also

boost confidence in the fairness of thereview procedure introduced in 2009.

OFFICE SPACE DEMAND SOARSDemand for office space in London

from financial services groups last year outpaced levels in the boom peri-od before the credit crunch, a sign of returning confidence among banksgearing up for expansion. Financialsector take-up of office space in cen-tral London totalled 6.4m square feetin 2010, compared with 5.3m in 2006and 4.5m in 2007, according to KnightFrank.

PAMPLONA DEAL EDGES CLOSERPamplona Capital Management, theRussian-backed private equity firm,has inched towards control of KCA Deutag, after securing the backing of junior lenders for its proposedrestructuring of the Aberdeen-basedoil services group. The firm hasoffered the company and its lendersabout $550m (£344m) of new funds,one of the biggest cheques written fora takeover of a European company

through a debt restructuring, accord-ing to people familiar with the terms.

STORM OVER CENTRICA PROFITS A surge in profits of as much as 25per cent at the British Gas groupCentrica looks set to prompt aCompetition Commission investiga-tion into Britain’s leading energy sup-pliers. Only two years after its lastinquiry into the industry, Ofgem is inthe middle of a new investigationinto whether consumers facing highenergy bills are being ripped off by electricity and gas providers.

TYCOON BUYS INTO ISRAELI MISSILEALERT SYSTEM The property entrepreneur Vincent Tchenguiz has taken a stake in anIsraeli defence technology company as part of a much larger plan to createa homeland security business. Mr Tchenguiz’s Consensus BusinessGroup has invested more than

£500,000 in the high-technology com-pany eVigilo.

HARRODS HITS £1BN IN SALESHarrods has hit £1bn of annual salesfor the first time after a blowoutChristmas. The department storecracked the milestone figure for the year to the end of January aftertourists flocked to the West End in therun up to Christmas. Michael Ward,Harrod’s managing director, said:“Reaching £1bn sales makes today oneof the most significant in the store’shistory.”

FUEL LUNACY COULD CAUSE STANDSTILL The Government must address theplight of Britain’s poor motorists, writes Boris Johnson. He said: “If I were the government, I would think seriously about that fuel duty stabilis-er, because when it costs more to fill your tank than to fly to Rome, some-thing is seriously wrong... The electric

revolution is happening, but it willnot be overnight.”

VODAFONE-ESSAR SPAT INTENSIFIES Vodafone Group said it continues to believe that material information hasnot been provided by Essar Groupregarding the merger of its listedcompany with a privately held Essarholding unit, which in turn holds anindirect 11 per cent stake in theBritish telecommunication firm’sIndian unit.

LONE STAR RIDES TO AID OF JAPANBANKUS distressed-debt specialist Lone StarFunds is in talks with other lenders totake control of Japan's Tokyo StarBank for the second time. The Dallas- based fund and other lenders are indiscussions with Japanese private-equity fund Advantage Partnersregarding about 170 billion yen(£1.29bn) worth of loans that it took

out to buy Tokyo Star, according topeople familiar with the matter.

WHAT THE OTHER PAPERS SAY THIS MORNING

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IRELAND’S economy was once againthrown into turmoil yesterday after-noon, as the country’s minority GreenParty pulled out of its coalition withFianna Fáil, destroying the rulingparty’s majority and making an early election likely.

But the Green Party made it clearthat passing the Finance Bill remainedits priority, and urged Prime MinisterBrian Cowen to accelerate the legisla-tion so that it can be passed this week.

Speaking in Dublin, leader of theGreen Party John Gormley said thathis party’s “patience had reached anend” with Fianna Fáil’s control of theIrish Government, citing “continuingdoubts, the lack of communicationand the breakdown in trust,” as thefinal straws that led to its withdrawalfrom the coalition.

Without the Green’s support,Fianna Fáil is left without a majority,forcing Cowen to dissolve his govern-ment and call a general election.

With Fianna Fáil opinion polls at anall-time low, the opposition Fine Gaeland Labour parties are widely expect-ed to form the country’s next coalition

government after an election. Bothparties have campaigned on possibleamendments to the Finance Bill,

which contains unpopular spendingcuts and tax increases to fulfill theterms of Ireland’s EU/IMF bailout.

However, the Bill’s key terms areunlikely to change, with the Labourparty vowing to withdraw its plannedmotion of no confidence tomorrow if the government can push the legisla-tion through before Friday.

Despite the ultimatum, Cowenadmitted that meeting that deadline

was unlikely, saying it was “not possible to get it done in a week”.

And despite assurances that theFinance Bill will be passed before theelection, analysts say Ireland is lucky that EU support means it won’t haveto access Eurozone markets in the

weeks ahead, with sentiment likely tohave plummeted over the weekend.

“The markets may actually be mar-ginally reassured that there is thelending programme in place from theEU and IMF – in the absence of that it

would be a very tall order for theNTMA (Ireland’s debt agency) to go tothe bond markets,” said AustinHughes, chief economist at KBC Bank.

Finance Bill

safe as Irishcoalition fails

FORMER BP chief executive Tony Hayward is in early talks about join-ing the board of commodities traderGlencore as part of its planned initialpublic offering, it emerged yesterday.

Hayward, who is a non-executivedirector for Russian oil venture TNK-BP, recently met with Glencore chief executive Ivan Glassenberg to discuss

taking a non-executive role, accord-ing to reports yesterday.Glencore is meeting with a number

of candidates to oversee the firm if itfloats either in London or Hong Kongduring the next year, one source toldCity A.M.

The company declined to commenton the report.

Glencore would have to reshuffleits board if it floats to comply withcorporate governance rules.

Hayward in talks to join Glencore board

BY ELIZABETH FOURNIER

EUROZONE▲

Tony Hayward isin preliminarytalks about joining the new Glencoreboard of directorsafter its possiblelisting, just threemonths after hestood down fromthe top job at BP

Picture: REUTERS

BYMARION DAKERSCOMMODITIES▲

News 3CITYA.M. 24 JANUARY 2011

HIGH inflation is not a cure forBritain’s deficit woes, according toRobert Chote, the chairman of theoffice for Budget Responsibility (OBR).

In an interview with the Financial Times, he also gave his opinion thatcutting petrol duties to counteractsoaring fuel prices would make pub-lic finances “less stable rather thanmore stable”.

Many believe higher inflation

boosts the public finances by increas-ing tax revenues. However Chote

poured cold water on the idea of fast-rising inflation automatically cuttingthe deficit.

“There are numerous ways infla-tion can affect the public finances,some positive and some negative, so

we cannot say for sure whether high-er inflation lowers or raises the pro-

jected deficit,” he said.Chote, who recently moved to the

new role from his former job as direc-tor of the Institute for Fiscal Studies,said the OBR plans to start givingmonthly updates on public finances.

The body is now preparing the eco-nomic forecast for the Budget.

Inflation is no way to fixthe deficit: OBR chairman

BY JENNY FORSYTH

ECONOMICS▲

8/7/2019 Cityam 2011-01-24



● 16 June 2010Chancellor George Osborne announcedthe commission’s creation under thechairmanship of Sir John Vickers. Itsother members are: Clare Spottiswoode,Martin Taylor, Bill Winters and MartinWoolf.

● 9 July 2010

The commission holds the first of itsmeetings, with its minutes publishedregularly.

● 24 September 2010The ICB publishes a consultation paperand asks for submissions of evidence. Ithighlights the commission’s priority asproducing regulations to promote finan-cial stability and competition while notoverly discouraging lending and econom-

ic growth.

● November-December 2010The commission goes on a “roadshow” of public events to gauge popular opinion,holding five meetings: two in London andone each in Edinburgh, Cardiff andLeeds. The panellists and participantsinclude representatives from the UK’s

major banks and small businesses. It alsoholds meetings with banks and stays inregular communication with themthrough the period.

● 22 January 2011In his first public speech as chair of thecommission, delivered at the LondonBusiness School, Vickers outlines thepros and cons of separating retail bank-ing activities from wholesale and rules

out mandating “narrow banks” that areheavily restricted in their activities. Healso emphasises the other regulatorychanges taking place globally, such asthrough Basel III and the EuropeanCommission.

● April 2011The commission is due to publish a pre-

liminary report outlining its thoughts sofar. It plans another roadshow of eventsand will solicit further feedback frombanks after the paper’s publication.

● April 2011The commission will publish its recom-mendations. The final decision as to theirimplementation lies with ChancellorGeorge Osborne and business secretaryVince Cable.

TIME LINE | INDEPENDENT COMMISSION ON BANKING

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SIR John Vickers, chair of theIndependent Commission onBanking (ICB), ruled out breaking upthe financial industry into “narrow

banks” on Saturday in his first officialspeech since the commission wasconvened.

But Vickers’ speech, which gave aglimpse of the ICB’s thinking threemonths before its preliminary reportis due out, did discuss how to “ring-fence the retail banking activities of systemically-important institutions”from their wholesale activities.

Despite dismissing the idea of “nar-row banks”, whereby banks withretail deposits are largely bannedfrom lending, Vickers emphasisedthat “the policy challenges for retailand investment banking are some-

what different”. He analysed differ-

ent ways of insulating retailconsumers from a possible bank fail-

ure on the basis that “retail cus-tomers have no effective alternativesto their banks for vital financial serv-ices”.

The speech signalled that the ICB isconsidering “forms of separation”

between retail and wholesale bank-ing operations, including subsidiari-sation, in which retail andinvestment banks operate separately

but remain legally under the sameownership.

Vickers also commented on theproblem of implied government guar-antees for banks that are “too big tofail”. “This distortion... should be neu-tralised or contained,” he said,adding: “Credible resolution wouldseem to require at least some form of separability (between retail and

wholesale).”But he also sounded a warning on

“the unintended consequence” of some current regulations, including

tax incentives that make debt a moreattractive funding option than equity.

Vickers rulesout break-upBY JULIET SAMUEL

BANKING▲


In association with

DAVOS 201126-30 JANUARY

DAILY COVERAGE OF THE WORLD ECONOMIC FORUMBROUGHT TO YOU BY CITY A.M. AND AVIVA

FIND OUTWHAT THE WORLD’S BUSINESSLEADERS AND POLITICIANSARE TALKING ABOUTSee tomorrow’s paper for an exclusive previewSINCE leaving a two-year post at

Shell as a financial analyst, Sir JohnVickers had spent most of his careerin academia before moving into eco-nomic policy-making.He is a fellow of All Souls College,Oxford and was an economics profes-sor at the university for 12 years untilhe went on leave to become the Bank

of England’s chief economist in 1998.

After two years at the BoE, he movedto become director general of theOffice of Fair Trading and from 2007to last year, he was president of theRoyal Economic Society.While head of the OFT, he oversaw aninvestigation of charges by store cardproviders and called for an inquiryinto LSE’s proposed merger withEuronext.He has spent much of his careerstudying the economics of competi-tion and regulation, writing extensive-ly on patent law, price signalling andvertical markets.He is now charged with designing thebasis of a new regulatory frameworkfor the entire UK banking industry.

Juliet Samuel

SIR JOHN VICKERS

CHAIR, ICB

● Scope of the inquiryVickers made clear that financial stabilitywill be just as important to the commissionas competitiveness, focusing particularlyon “structural reform”: whether or how toseparate retail and wholesale banking.However, he was careful to place the ICB’swork in the context of international regula-tions on capital (particularly Basel III) and

the takeover of failing institutions (to beaddressed by the EU). And he ruled outbroader recommendations on perverseincentives created by the tax system,despite their effect on financial stability.

● “Narrow” banksHe ruled out the creation of “narrowbanks” with nothing but vanilla retail func-

tions as a solution to the “too big to fail”problem, saying: “It is very doubtful thatthe implicit government guarantee wouldbe confined to narrow banking.” He saidthat lending would just move elsewhere.

● Retail versus wholesale customersHe said that retail and wholesale bankingrequire different policy approaches

because retail customers are a largelydomestic market and rely more on theirbanks for vital services. Whereas whole-sale customers operate internationally and“generally have greater choice and capacityto look after themselves”.

● Differing capital requirementsHe suggested that one way of separating

retail and wholesale risks could be “to ring-fence the retail banking activities of sys-temically-important institutions” andimpose a specific capital requirement onthem. But he was sceptical about bluntregulations to separate the two functions.

● Senior bondholder debtVickers was keen to pinpoint possible ways

of making sure that senior bondholders, aswell as equity-holders and junior bondhold-ers, absorb losses when a bank fails. He dis-cussed both convertible contingent bonds(“co-cos”), which turn into equity if a bank’scapital ratio falls too low, and bail-in bonds,which can be turned into equity by regula-tors if a bank has to be wound up, as possi-ble solutions.

KEYPOINTS | SIR JOHN VICKERS’ SPEECH

Members of the Independent Commission on Banking

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THE PRICES of cocoa and coffee couldrise sharply this morning after thepresident-elect of the world’s biggestproducer of the beans declared it hadsuspended exports.

The president-elect of the Ivory Coast, Alassane Outtara, yesterday ordered exporters to suspend opera-tions for a month from today in anattempt to cut off funding from rivalLaurent Gbagbo, who the UN said losta presidential election in November.

The Ivory Coast produces nearly 40per cent of the world’s cocoa accord-ing to UN figures, and Outtara hopesthe economic fallout from an export

ban will pressure Gbabo to step down. The price of cocoa has risen 13 per

cent since the Ivory Coast’s disputedelection, and stood at $3263 (£2,025)per tonne last week, according to theInternational Cocoa Organisation.

The price of cocoa hit a 33-yearhigh of £2,732 a tonne mid-way through last year.

The world’s largest traders werereportedly planning an emergency conference call with industry body

the Federation of Cocoa Commerce yesterday to help clarify the tradingrestrictions.

The FCC and European Cocoa Association said in a joint statementlast night that the situation in theIvory Coast has “created a very testingenvironment for the cocoa trade” andthat it is working with those in theindustry to resolve issues arising fromthe suspension.

“Time, patience and a commonsense approach to the difficulties anddelays that may arise are required,

but most importantly, all those whose interests are impacted shouldremain calm in order that we sustainno long term damage to Ivorian farm-ing communities and the cocoaindustry,” the trade bodies said.

The European Union has tightenedits economic sanctions against theIvory Coast to try and unseat Gbabo,

while other West African states have warned that they are prepared to useforce to oust Gbabo’s government.

African leaders have also askedOuttara to name a new head of theregion’s central bank, in a furtherattempt to remove Gbabo frompower.

Cocoa to rise

as Ivory Coasthalts exportsBYMARION DAKERS

COMMODITIES▲


Ireland must erase uncertainty over its banks

The next couple of weeks, aheadof the upcoming Irish generalelection, are going to be crucialfor Fianna Fail, the ruling Irish

party. Prime Minister Brian Cowen

may have received a vote of confidencefrom his fellow party members last

week, but over the weekend heresigned from his leadership post.

What happens next, and who steps in

to lead Ireland through its recovery phase will be crucial.Cowen has been under increasing

pressure since seeking an EU/IMF bailout of €85bn (£72.4bn) last year. It was recently revealed that he playedgolf with the former chairman of

Anglo Irish Bank just two months before the bailout was announced.

With an expected taxpayer bill of €34bn, Anglo Irish is the Irish bank perceived to be the most toxic. While

Cowen denied banking matters werediscussed during this meeting, it stillleft a bad taste in the mouths of thegeneral public.

But after this weekend’s news, it is

no longer about Cowen’s unpopulari-ty, nor is it about the dramatic drop inFianna Fail opinion polls. Instead, it isabout damage limitation.

Nobody expects the ruling party todo well in the general election.

Brenda Kelly, an analyst from CMCMarkets, says that had there been a

vote of no confidence ahead of the bailout, things may have been differ-ent. But the terms of the bailout are inmotion now, although the opposition

still wants to make senior bondholdersaccept a larger portion of the debt.However, this has been a no-go area, asIreland is so dependent on foreigninvestment.

According to Kelly, the next roundof EU stress tests will be crucial, as weget more clues about liquidity and

whether Ireland will need to use morethan the €10bn already earmarked forthe banks from the EU/IMF bailout.

The crucial issue is that uncertainty regarding the Irish banks is eliminat-ed. We have seen an exodus of investors over the last year; Bank of Ireland may have to sell off parts of thegroup, and debt restructuring could

be necessary. Allied Irish Bank passedthe last tests with flying colours – butit still needed an injection of €3bn,effectively nationalising the bank.

While Kelly thinks the current Irish

government’s four-year plan appearsto be working, she underlines thegrowing problem of negative equity that exists in the housing market – anissue that also affects the banks. TheIrish housing market is now down 41per cent from peak 2002 levels.

One thing is sure: whoever becomesthe next Irish prime minister has ahumongous job ahead. Louisa Bojesen is a co-anchor of CNBC’s European Closing Bell.

CITY COMMENT

LOUISA BOJESAN

PERMIRA and Axa Private Equity areplanning to make a joint €500m(£425.5m) bid for Opodo tomorrow, asthey seek to compete against US inter-net travel giants Expedia and Orbitz.

However the two private equity groups are likely to face bidding com-petition from their US rival Carlyle,according to the Financial Times.

The newspaper added that peoplefamiliar with the auction believe

Permira an Axa are favourites.Before joining forces to bid for

Opodo, Permira and Axa had beencompeting head-to-head to acquiremid-sized European internet travelagencies.

Last year Axa outbid Permira to buy Go Voyages. Conversely Permira beat

Axa in the fight to buy the Barcelona- based online travel group eDreams.

But after teaming up, the twogroups reportedly plan to buy Opodo,

which is being sold by Amadeus IT Holding, and combine it witheDreams and Go Voyages to create aEuropean travel behemoth.

Opodo accounts for just four percent of Amadeus’ total revenue.

Permira and Axa plan a joint bid to buy Opodo

BY JENNY FORSYTH

M&A▲

8/7/2019 Cityam 2011-01-24


PORTUGUESE President AnibalCavaco Silva won a second term inan election yesterday, television exitpolls showed, a result that shouldensure short-term political stability as the cash-strapped governmentfights to avoid an internationalfinancial bailout.

The country’s leading televisionstations put Cavaco Silva’s share of the vote at around 55 per cent com-pared with about 19 per cent forManuel Alegre of the rulingSocialists, his closest competitor ina field of six.

Alegre conceded defeat minuteslater.

Cavaco Silva, of the centre-rightSocial Democrats, is expected to bol-

ster Socialist Prime Minister JoseSocrates’ drive to cut the budgetdeficit through tough austerity

measures and pull the the country out of a debt crisis.

The President’s post is largely cer-emonial but he does have the powerto dismiss the Prime Minister anddissolve parliament.

Should Portugal have to follow eurozone weaklings Greece andIreland and go the EU andInternational Monetary Fund for arescue package, Cavaco could beunder pressure from his own party,

which is in opposition to theSocialists, to do so.

But after casting his vote in achilly Lisbon, Cavaco Silva, a formereconomics professor who was primeminister from 1985 to 1995, said hedid not want to speculate aboutthat possibility.

“I am a president in favour of stability. I consider that it is very

important for Portugal to havepolitical stability to solve its prob-lems,” he said.

Portugal putsfaith in SilvaBYHARRY BANKS

EUROZONE▲

GREECE’S central banker said yester-day that talk of debt restructuring ishurting the country as it struggles toexit the fiscal crisis that has shakenthe eurozone.

“I believe that even mere talk of debt restructuring hurts the country,”Bank of Greece governor George

Provopoulos told local Greek press.He said the negative impact of a

debt restructuring would far exceedthe short-term pain caused by the aus-terity measures Greece is implement-ing.

“The political and economic impactof debt restructuring would far exceedthe short-term pain of fiscal adjust-ment. Debt restructuring would spark an uncontrollable chain reaction

which would start a new, long-term

cycle of a lack of credibility for thefuture of Greece’s economy,” he said.

Greece says recovery is being setback by debt restructuring talkEUROZONE

▲

BONUSES received by tax officials will be curbed in line with the rest of thepublic sector, following revelationsthat top HMRC staff received a

bumper £13m bonus payment between them last year.

The Revenue paid out almost£800,000 more on staff bonuses last

year than it did in 2009, despite a blunder in the run up to Christmas

that saw more than a million peoplereceive new tax demands. As many as 450,000 pensioners

were told to pay more tax at the endof last year after HMRC made mis-takes on their tax codes.

The payments to staff were madeunder contracts agreed under theprevious government administrationand will now be curbed, as Whitehalldepartments prepare to clip expendi-ture.

Freedom of Information requests

found several government depart-ments paid large bonuses to staff. A spokesperson for HMRC said: “We

have said we will restrict perform-ance related payments from 2011-12and are conducting a review into pay structures. A two-year public sectorpay freeze starts in 2011.

“The number of Senior CivilServants who will receive a bonus willalso be dramatically reduced infuture in line with commitmentsmade by the Prime Minister.”

Tax officials’ bonuses to becurbed after bumper 2010BYRICHARD PARTINGTONTAXATION▲


BELGIUM PROTESTS LACK OF GOVERNMENT

Tens of thousands of Belgians took to the streets yesterday to shame political leaders whohave failed to form a government more than seven months after an election and left thecountry at the mercy of financial markets. Organisers of the “Shame: no government, great country” protest said up to 50,000 people had joined the march through Brussels. Police put the figure at 34,000. Picture: G

8/7/2019 Cityam 2011-01-24


THE DEVELOPERS of One Hyde Park have tried to lead by example by snapping up two of the luxury flatsin the complex in Knightsbridge, itemerged yesterday.

Christian Candy, one half of prop-erty firm Candy & Candy, has

bought a single-storey penthouse for£31m, according to press reports

based on Land Registry documents yesterday.

This would be over £100m lessthan the asking price for the mostexpensive apartments in the com-plex.

Sheik Hamad Bin Jassim Bin Jaberal-Thani, the Qatari Prime Minister

who helped fund the development

through his Guernsey-based ProjectGrande company, bought a three-storey penthouse flat in August.

But there has also been intensespeculation as to the identity of t hepurchaser of the most expensiveunit, a £140m penthouse apartment.

The Capitalist in City A.M. was thefirst to highlight the mystery of the£140m penthouse owner last week and queried whether the developersmay have purchased other apart-ments.

Candy & Candy has not disclosedthe identity of the buyer.

The company maintained itsrefusal to name the buyer yesterday,citing a confidentiality agreement.

Candy & Candy said last week thatthe penthouse was bought by ananonymous party who camethrough the One Hyde Park website.

While the developers haveannounced that contracts have beenexchanged on 60 per cent of the 86flats available, it is thought that justtwo finalised sales have made it ontothe Land Registry to date – both of

them bought by the developers. A director at Savills, one of the

agents tasked with marketing theflats, told The Capitalist last week thenew owner of the most expensivepenthouse is not one of the develop-ers.

Simon Cowell, Arcadia boss PhilipGreen and Formula One tycoonBernie Ecclestone were among 350guests invited to the sumptouslaunch party of the Knightsbridgedevelopment last week.

The retail outlets on the groundfloor of the complex have been let tocarmaker McLaren, Rolex and AbuDhabi Islamic Bank.

The One Hyde Park scheme wasstarted in 2006 and cost close to£1bn to develop.

A spokesper-son for Candy &Candy said theidentity andamount paid foreach flat wasprivate as partof a confiden-

tiality agree-ment anddeclined tocomment onthe LandRegistry publicrecords. The Candy brothers celebrate the launch Picture: REUTERS


Candy brother buysOne Hyde Park flat

THE head of Etihad Airways has writ-ten to Virgin Atlantic to express “toplevel interest” in taking over the air-line, according to reports at the week-end.

Sir Richard Branson’s airline hiredDeutsche Bank last year to look atoptions for the company, which couldinclude a merger or takeover.

Etihad, which is based in Abu Dhabiand is chaired by Sheikh Hamed binZayed Al Nahyan, refused to confirmreports in the Sunday Times.

“We have no comment other than

that we talk regularly and frequently to many airlines and a range of other

businesses from all over the worldabout business issues and opportuni-ties,” said a spokesperson for Etihad.

Virgin said it continued to work with Deutsche Bank to assess growthopportunities. “This study is at a very early stage so there is no further com-ment to make at this time,” aspokesperson said in an e-mail.

Branson said recently that he mightsell his 51 per cent in the carrier. Theremaining 49 per cent is owned by Singapore Airlines.

Firms struggling to stayafloat up by 20 per cent

THE number of UK companies strug-gling to stay solvent jumped 20 percent in the last quarter of 2010, datashows today.

Nearly 148,000 companies hadinsolvent accounts, a court actionagainst them or a wind-up petitionfiled by the end of 2010, up from123,361 in the third quarter, the RedFlag Alert analysis by turnaround spe-cialist Begbies Traynor found.

Companies in the “critical” stage of distress, which had been issued eithercounty court judgments – lodged by creditors against insolvent companies– or wind-up petitions, owed creditors

more than £52.7bn.Companies reliant on government

contracts were hit hardest, with morethan 61,000 becoming seriously indebted in the quarter, 24 per centmore than in the third quarter.

The number of distressed compa-nies was four per cent higher than inthe last three months of 2009, when141,527 firms faced financial difficul-ties at the height of the recession.

Begbies Traynor chairman Ric Traynor said the data showed compa-nies “demonstrating real signs of dis-tress.” “Trade creditors are losingpatience with their debtors and inneed of collecting cash,” he said.

Etihad mulls a bidfor Virgin Atlantic

BYMARION DAKERS

PROPERTY▲

RENAULT chief executive CarlosGhosn has revealed that allegedindustrial espionage in the compa-ny’s electric cars programme centredon its business model rather thantechnology.

Ghosn told a French newspaper thelegal investigation would take severalmonths to complete and that he was“surprised and shocked” by the affair.

Three of the company’s executiveshave been fired over the allegations,

which surfaced in August after thefirm received an anonymous letter.

Renault chief:spy case is notover technology

TRANSPORT▲

AUTOMOTIVE▲

ECONOMY▲

8/7/2019 Cityam 2011-01-24


FACEBOOK:A LITTLE

TOO SOCIALNETWORK?

YOU might think former Facebook presi-dent Sean Parker, who described Justin

Timberlake’s portrayal of him in themovie The Social Network as “a completefiction,” may have reason to be slightly annoyed.

Trousersnake plays Parker as aMachiavellian, cocaine snorting wise guy

who impresses a young Mark Zuckerberg by dating a Victoria’s Secret model.

So is he bitter? Certainly not: “I kind of wish my life were that cool,” he said.

The Social Network won three GoldenGlobe awards last week – for best drama,

best director David Fincher and bestscreenplay, by Aaron Sorkin – and is

tipped to sweep the board at the Oscars.Parker is no stranger to controversy. He

is the co-founder of peer-to-peer music-sharing service Napster, which was even-tually shut down by US authorities after

being involved in a long-running battle with the record industry over its apparentadvocacy of piracy.

So which aspects of the The SocialNetwork were fictionalised, wonders T heCapitalist . “Well,” he explains, “there areno Victoria’s Secret models in Silicon

Valley.”

MONEY FOR OLD PAPERThe Capitalist has always wondered why somany paper destruction lorries are seenloitering in the Square Mile, and recentfigures explain why. Shred-It, the receipt

and paper destroyer, has seen its revenuessoar 18 per cent to £35m. It seems coveringup the trail left by City boys is a booming

business. Apparently the surge in paper annihila-

tion is due to new powers set in place last year that allow the InformationCommissioners Office (ICO) to fine datacriminals up to £500,000 fine for a “seri-ous breach”. Hiring one of Shred-It’s 120specially designed trucks to scrap yourpaper rather than your balance sheetseems an investment worth under-taking.

A Victoria’s Secret model (left), possiblythe one who never dated former Facebook president Sean Parker (right).

Pictures: REUTERS/ PA

SIX thirsty city workers indulged in acocktail swilling session atOdette’s Restaurant in Primrose Hill lastThursday to celebrate bonus day. Andtheir big bonus splash-out also involved abottle of Puligny Montrachet at £90 apop.Ironically, the wine is known as “ScabbyHill” (Mont Rachaz) but we’re not surethis was reflected in their other indul-

gences, which included three classy bot-tles of Dom Perignon at £540 in totaland a bargain-value bottle of plonk,Gevrey Chambertin, at £88.For the service charge of £113, venisonpie and battered fish was servedas blotting paper, alongside some plat-ters of smoked salmon and chickenwings.It must have been hard to haul theiroverloaded bodies from the comfy sofasat 3.09pm, when the bill was paid,amounting in total to £1,020.38.

BILL OF THE WEEK

The Capitalist10 CITYA.M. 24 JANUARY 2011

EDITED BY

STEVE DINNEENGOT A STORY? [email protected]

8/7/2019 Cityam 2011-01-24



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GREENCORE is expected to sweetenits merger deal with Northern Foodsthis week in an attempt to bestBoparan’s £342m cash takeover offer.

Dublin-based Greencore is consid-ering adding a cash sweetener on topof its all-share merger with Northern,according to people familiar with thecompanies.

Northern’s board has dropped itssupport for the Greencore deal andinstead recommends that sharehold-ers support Boparan’s £342m cashtakeover offer, made late on Friday after the Takeover Panel extended its5pm deadline.

Greencore will say in a statementto the market this morning that its

board continues to support theNorthern merger as a “compellingopportunity” and will make a fur-ther announcement in due course.

While Northern and Greencoreinvestors are still due to vote on themerger on 31 January, it is likely thatthe shareholder meetings will becancelled following Boparan’s inter-

vention.

Meanwhile, Northern will send let-ters to its shareholders this week tostress the benefits of Boparan’s bid,

which at 73p per share represents a61.3 per cent premium on Northern’sclosing price before the bid interest

was revealed. The bid also has a premium of 52

per cent to the value of Greencore’sall-share bid, which offered NorthernFoods shareholders 0.4479 of aGreencore share for each NorthernFoods share they owned and was

worth 48.2p per share on Friday. Analysts had said Boparan would

need to offer a significant premiumto improve on the cost synergiespromised by Greencore.

Boparan struck a deal withNorthern pension trustees to pay more than £15m a year to help

shrink its £142m pensions deficit. The pensions shortfall had been

seen as a stumbling block for rival bidders after Greencore pledged topay down the deficit.

Greencore’s team of bankers –Barclays Capital, Investec, IBI andGoodbody Stockbrokers – are exam-ining funding options for a bettermerger plan.

Greencore tofight rival bidBYMARION DAKERS

M&A▲

The Irish food group hired an army of advisers to work on its merger withNorthern, first announced inNovember, including Barclays Capital,Investec, Slaughter & May and publicrelations group Powerscourt.

Barclays Capital is acting as finan-cial adviser, joint broker and jointsponsor, with Mark Todd and JonBathard-Smith heading the team.

Joint broker Investec has workedwith Greencore for a number of years,with head of investment banking

David Currie still heavily involved.Leading the Northern offer team ismanaging director Chris Baird, who

joined from Dresdner Kleinwort in2009.

IBI Corporate Finance andGoodbody Stockbrokers, both based inIreland, are acting as joint sponsorand joint broker respectively.

Magic circle firm Slaughter & Mayis advising on the legal side, with part-ners John Panichola and JonathanMarks leading a six-strong team.

Powerscourt has worked withGreencore since 2006, and counts BP,Aer Lingus and Independent News &Media among its clients.

The firm was set up by formerSunday Times business editor RoryGodson in 2004.

Rothschild, Goldman Sachs and PRagency Hudson Sandler are advisingBoparan on its surprising rival bid forNorthern Foods.

GREENCORE

ADVISERS

8/7/2019 Cityam 2011-01-24



BARCLAYS could completely overhaulthe way it remunerates its top staff next month.

Bob Diamond is considering payinga portion of bonus payments for histop 1,000 staff in contingent convert-ible bonds –known as Cocos.

Cocos are a more politically accept-able form of remuneration as they convert from debt to equity if a bank runs into trouble, therefore becomingrelatively worthless, unlike debt whichis likely to be repaid.

The bank told City A.M. no decisionshave been made on bonuses yet. The bank will report its results on 15February and bonuses will beannounced after that.

Diamond will also announce astrategic review that will targetunderperforming parts of the busi-ness and could lead to significant joblosses.

Meanwhile, an accord between thegovernment and UK banks on lend-ing and pay stalled again yesterday, with an agreement now not expecteduntil next month.

The talks – dubbed project Merlin –aim to secure assurances that banks will lend almost £200bn to small busi-

nesses and pledge to be more trans-parent over pay. In exchange the gov-ernment will offer to end “banker bashing” by ministers and guaranteethere will be no further crackdownon bonuses.

However, banks are understood to be hesitant, with lending commit-ments likely to be agreed at far below the number being discussed.

Santander has already pulled outof the talks, instead opting to dealdirectly with the Treasury, and City A.M. understands Barclays is unhap-py with tough new rules being pro-posed about disclosure of staff remuneration.

Banks are also understood to haveclashed with the government aboutcommitments to the so-called “BigSociety Bank,” which would providelending facilities to charities and vol-untary organisations.

Cameron had hoped to secure lend-ing of more than £1bn but is unlikely to achieve anywhere near this sum.

BY STEVE DINNEEN

BANKING▲

Davos readyfor a delugeof bankers

FINANCIAL services firms are set to

make a strong reappearance at the World Economic Forum in Davos this week. Guests at the forum willinclude Barclays’ Bob Diamond, JPMorgan’s Jamie Dimon, DeutscheBank’s Josef Ackermann, HSBC’sStuart Gulliver and outgoing Lloydschief executive Eric Daniels amongothers.

The strong presence of bankingexecutives comes during a year thatthe organisers say should move the world “from risk to opportunity”. Butthe theme of this year’s event,“shared norms for a new reality” hasleft some observers scratching theirheads. The programme says: “The‘new reality’ is a world with manifoldpower centres, characterized by ahigh degree of volatility and theentrance [and exit] of players in theglobal race for competitiveness.”

It promises that attendees willgain “real insight” into the issue.

Despite the optimism, however,the forum’s chair Klaus Schwab saidlast week that the world is sufferingfrom “global burnout syndrome”that makes it too weak to tackle themyriad threats of economic uncer-tainty and political risk.

“We have to be careful that this cri-sis does not become a social crisis -- which it has in some countries,” theGerman business studies professortold a media conference.

BY JULIET SAMUEL

BANKING▲

Bob Diamond is considering radical new payment plans Picture: GETTY

Barclays mayoverhaul itsremuneration

Chancellor GeorgeOsborne is unlikely toachieve the initialtarget of £200bn innew lending

8/7/2019 Cityam 2011-01-24


INFLATION expectations have soaredto a record high this month, as risingprices add to the squeeze on house-hold spending, a survey said today.

With 89 per cent of respondentsexpecting the cost of their purchasesto rise this year, the Markit householdfinance index dropped to its lowestlevel since April 2009.

“The recent VAT increase, higherinflation and squeezed incomesmean that households are once againrunning just to stand still,” said TimMoore, senior economist at Markit.

Over one third of householdsreported a recent deterioration in

their finances, while almost half of mortgage holders reported a negativeoutlook for their finances.

Mortgage holders may be wary of impending interest rate hikes, thereport said, as inflation stubbornly climbs upwards.

And with interest rates at a histori-cal low, savings continued to fall, ashouseholds “sought to offset a fall inemployment income,” Markit said.

Consumer price index (CPI) infla-tion hit 3.7 per cent in December, offi-cial data revealed last week.

There was more worrying news forthe high street, as over half those sur-

veyed indicated a fall in their willing-ness to make major purchases.

THE coldest winter in 100 years may have contributed to a slowdown ineconomic growth in the threemonths to December, economistssaid ahead of official GDP figuresreleased tomorrow.

Experts have forecast an average 0.4per cent GDP growth for the quarter,down from 0.7 per cent in the previ-ous quarter.

Heavy winter snow caused shop-pers to stay at home, hurting retailersin the run up to the busy Christmasperiod.

December’s retail sales figures,published on Friday, showed sales vol-umes frozen at December 2009’s levelas people bought less food and fuel.

The weather also affected supply chains, and kept staff away from the workplace.

Some forecasters expect growth toslump to as low as 0.2 per cent, afterdisappointing results for the servicesector – the largest sector in the UK, which contributes more than 70 percent to GDP.

A purchasing managers’ survey of the service sector contracted in

December, reinforcing expectationsthat it will drag overall economic per-formance lower.

Others expect more: the BritishChambers of Commerce has forecast0.6 per cent growth, while think tank the National Institute of Economicand Social Research said output grew 0.5 per cent in the quarter.

A resurgence in UK manufacturing,led by a weaker pound and strength-ening export orders from emergingmarkets, is not expected to stave off the slowdown.

Keith Bowman of HargreavesLansdowne said industry growth would be “counterbalanced by con-sumer hesitancy ahead of expectedgovernment spending cuts, whichcommence in earnest during 2011.”

The UK grew 0.7 per cent in thethird quarter of last year and 1.1 percent in the second quarter, but thecontribution of a boost in construc-tion is not expected to continue intothe fourth quarter, partly due to a fallin government sector spending.

“Construction activity had clearly slowed appreciably even before beinghit markedly by December’s severe weather,” said Howard Archer, chief economist at IHS Global Insight.

Growth to slip

after recordwinter freeze

Inflation expectations surge tohighest ever level, poll reveals

BY JULIAN HARRIS AND ALISON LOCK

UK ECONOMY▲

UK ECONOMY▲

You worked hardfor your moneyYou shouldn’t have towork even harder to getthe best exchange rates

020 7801 9080worldfirst.com


ECONOMISTS’ VIEWS: WHAT DO YOU EXPECT FROM FOURTH-QUARTER GDP?Interviews by Julian Harris

GEORGE BUCKLEY |DEUTSCHE BANK

“We expect the head-

line rate to be 0.6 per cent quar-ter on quarter, but there aredownside risks. PMI surveysweakened in December, but onaverage the whole economyPMI is around the same in quar-ter four as it was in quarterthree. Overall for the year itlooks like growth was around 1.7per cent. The recovery is lessthan half way through.

”

IAN STEWART |DELOITTE

“Slower growth in con-

struction and service output,

exacerbated by bad weather, islikely to see growth slow to 0.5per cent after pretty stronggrowth in the previous quarters.That said, manufacturing looks ingreat shape. GDP data are chop-py and prone to revision. Therewill be bumps along the way, butwe think this will be a sustainedrecovery.

”

PETER SPENCER |ERNST AND YOUNG ITEM

CLUB

“Growth should come

in around 0.4 per cent, but for

2011 we are above forecast,expecting a 2.3 per cent expan-sion. On the optimistic side,business is buoyant and surveysare confident. I expect trade tostart making a positive contri-bution to GDP. Exports toemerging “BRIC” economiesare still low but are growinglike the clappers.

”

8/7/2019 Cityam 2011-01-24


OBERTHUR Technologies, theFrench group eyeing British ban-knote printer De La Rue, has joinedforces with private equity firmBain Capital to lift its bid.

However, Bain will only supportthe deal if it gains approval fromDe La Rue’s board, sources said.

De La Rue last month rejected atakeover approach from Oberthur

worth £895m, or 905 pence pershare, calling it “highly oppor-tunistic”.

Bain is now willing to provide

some of the financing to allow Oberthur to raise the offer if

backed by De La Rue. A weekend report said Oberthur

would make a new bid of around950 pence.

The two firms have clashed sinceOberthur made its offer, in particu-lar over the nature of De La Rue’srelationship with its key customer,

The Reserve Bank of India. A source familiar with the situa-

tion said earlier this month thatDe La Rue would not be awardednew contracts to supply theReserve Bank of India in the imme-diate future, following production

problems at one of its paper facto-ries.

A spokeswoman for De La Ruesaid the company would not com-ment on relationships with cus-tomers because of confidentiality agreements that are in place.

However, De La Rue stated thatorders taken since July 2010 werecomparable with those won in thesame period the previous year.

The UK’s Takeover Panel saidOberthur must announce a firmintention to bid for De La Rue by 7February or walk away.

Last night an Oberthurspokesman refused to comment.

Oberthur and Bainmull De La Rue bidBY JULIET SAMUEL

M&A▲


GOOGLE’S GOLDEN GOODBYE

Google will give a$100m (£62.5m)equity award to Eric Schmidt (right) ashe hands over thechief executive officer job to co-founder Larry Page (left),and takes on therole of executivechairman. Theaward will includestock units andoptions and will vest over four years. Thenews follows the disclosure that Googlereported earningsand revenue aboveexpectations.

Picture: REUTERS

NEWS | IN BRIEF

Worldwide consumer squeezeConsumers in most countries globallylook set to keep a tight grip on spend-ing in coming months as they worryabout job security and rising inflation,according to a Nielsen Company sur-vey released yesterday. Almost half (45 per cent) of Americans foresee a

weak economic environment this year,compared with 38 per cent of Europeans and 19 per cent of con-sumers in the Asia Pacific, the surveyrevealed. Consumer confidence waspositive at the end of last year in only14 out of 52 countries surveyed world-wide. The Nielsen Global Consumer

Confidence Index's average score,however, was unchanged from thethird quarter at 90, helped by sharp

jumps in confidence in Norway, Turkeyand Switzerland as well as thePhilippines. A reading below 100 sig-nals pessimism about the economicoutlook.

MORE NEWSONLINE AT

www.cityam.com

8/7/2019 Cityam 2011-01-24


TALKS of a $2bn (£1.2bn) bid by out-sourcing giant Serco for US spy firmSRA International were last nightdownplayed by the company.

The contracting firm, which runsmany of Britain’s public services, hadreportedly considered a takeover bidfor SRA in a deal that would have pro-pelled it to become one of the biggestforeign companies providing servicesto the United States government.

However, it said last night it was

“not in any discussions regarding any major transaction at this time”.

The acquisition of SRA would have been Serco’s most ambitioustakeover attempt to date. In 2008, itfirst entered the American market

with a $524m takeover of US govern-ment IT services provider SI

International. The Fairfax, Virginia-based defence-

consulting firm provides IT services tothe US military, intelligence agenciesand other clients, holding around1,200 different contracts with the USFederal Government.

The company’s founder, Dr Ernst Volgenau, who set up the firm as theSystems Research and ApplicationsCorporation in 1976, still retainsclose to a 24 per cent stake of the

business. Any sale of SRA will require Dr

Volegnau to agree a price, with

reports suggesting that the company is looking for a valuation upwards of 12 times its earnings before interest,taxes, depreciation and amortisation(Ebitda) this year.

For the year ending September2010, the company had $1.67bn of revenue and $150m of Ebitda. Thefirm paid off outstanding loans inthe last quarter of last year leaving it

with no debt on its balance sheet. Amongst its expertise is cyber secu-

rity, a threat which world govern-ment’s have become increasingly concerned of.

A US government security reportpredicted at the end of last year thatFederal investment in informationsecurity would rise to $13.3bn by 2015, indicating the potential size of the market.

Serco walksfrom bid forUS spy firmBYRICHARD PARTINGTON

M&A▲

ANALYSIS l Serco Group

520

560

600

640

12 Nov25 Oct 2 Dec 22 Dec 14 Jan

p

558.0021 Jan

Investorsbeat tax byusing CFDs

HALF of all equities traded in the UK last year were traded as contracts fordifference (CFD), as investors lookedto evade stamp duty and capitalgains tax.

A total of €1.3 trillion (£1.1 trillion) worth of shares were traded throughCFDs, according to data compiled by US research house Tabb Group.

CFD, a form of equity derivativethat allows investors to speculate onshare price movements without theneed for ownership of the underlyingshares, do not incur stamp duty orcapital gains tax act as an attractivealternative to cash equity.

The new research found that 35per cent of the €3.9 trillion

exchanged in equities in the UK last year across all products could be writ-ten off, due to reprints of already-conducted trades artificially boostingthe figure, putting the true value of executable shares at €2.5bn.

The Tabb research also found trad-ing in dark pools was higher in theUK than it was across Europe as a

whole last year.It found trading in broker crossing

systems (BCS), electronic off-exchange trading platforms, account-ed for eight per cent of executibleliquity last year.

Europe-wide data provided by Thomson Reuters showed that trad-ing in dark pools, including BCSactivity, ran at around four per centof overall market activity inDecember last year.

BYRICHARD PARTINGTON

CAPITAL MARKETS▲

REISS ON THE RISE

High street fashion retailer Reiss predicts earnings from its UK stores will have risen by 40 per cent in its current financial year ending this week. The brand, a favourite of Kate Middleton, forecast earnings before interest, taxation, depreciation and amortisation(EBITDA) from the UK outlets to be around £12.7m, up from £9.1m last year.

NEWS | IN BRIEF

British steel production boostSteel production in the UK shot up by24.7 per cent last year, manufacturers’group EEF said today. Like on like pro-duction soared to 9.4m tonnes in 2010from 7.5m tonnes the previous year,they announced. “The strong improve-ment reflects the pick up in manufac-turing activity experienced both in theUK and in our principal European

export markets,” said UK Steel direc-tor Ian Roger. “Nevertheless produc-tion remained well below pre-recessionlevels,” he added.

Apollo bids for Sara LeeA private equity group led by ApolloGlobal Management has submitted atakeover offer for Sara Lee, but anexpected rival offer has not yet been

made by Brazilian beef processor JBS,a source said over the weekend.Details of the bid submitted by Apollo,Bain Capital and TPG Capital were notimmediately available. Preliminarybids, or indications of interest, hadbeen due on Friday, sources said. SaraLee and the private equity firms werenot immediately available to commenton the deal.


BEST OF THE BROKERS

ANALYSIS l Associated British Foods

1,120

1,080

1,040

1,160

1,200

25 Oct 12 Nov 14 Jan2 Dec 22 Dec

p1,086.00

21 Jan

ASSOCIATED BRITISH FOODSDeutsche Bank rates the consumergroup “sell” with a target price of 950p.The broker has downgraded its earningsper share forecast by two per centthanks to falling sugar yields after thesnow and margin pressure in some divi-sions. It also warns that Primark’s salesgrowth is continuing its slow-down.

ANALYSIS l Man Group

260

280

300

320


p282.00

21 Jan

MAN GROUPRBS reiterates its “sell” rating on thefund manager with a raised target priceof 244p. The broker was disappointedby Man Group’s quarterly fund flow fig-ures, although funds under managementcame in just ahead of expectations. RBShas raised its earnings per share esti-mate by four per cent for the full year.

ANALYSIS l Domino's Pizza UK & IRL

480

520

560

600


p 523.0021 Jan

DOMINO’S PIZZANumis rates the pizza chain “buy” with atarget price of 675p. The broker expectsan orderly handover when chief execu-tive Chris Moore steps down in 2012,and predicts a very strong sales updateon 15 February with pre-tax profitgrowth of around 27 per cent and under£10m of debts.

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

8/7/2019 Cityam 2011-01-24


UK companies should prepare for theBribery Act now by establishing a “no-list” of hospitality gifts that have beenturned down, say City advisers.

Much has been made of what can beaccepted as corporate hospitality under the Act’s new rules, but compa-nies should pay more attention to

what its employees reject based oninternal standards – those that raisesuspicion regardless of size.

“If you’re flying someone to Sydney

for the Ashes and not going as well it’salways going to look strange –the new

Act doesn’t change that,” said DanielBarton, a senior director at profession-al services firm Alvarez & Marsal.“Instead companies should focus onestablishing a list of gifts that have

been declined, to prove that adequateprocedures are in place internally tocatch bribery.”

It’s also crucial that there is a clearchain of command in place for inter-nal communications, with a central

ethics and compliance officer thatstaff can go to for advice.

This is particularly important asthere is no minimum price for a

bribe – anything with improper intentis included regardless of value.

Though extra guidance on the Act isexpected from the Ministry of Justice

before the end of January, companiesshould not expect this to be dogmatic.

“Companies waiting for guidancerather than acting now are wastingtheir time,” said Barton. “It’s likely to

be pointers rather than a template.” This is particularly important in

relation to facilitation payments. Already illegal within the UK, the new Act will have an extraterritorial scopethat will apply to subsidiaries based inforeign jurisdictions.

Though the Ministry of Justicecould prove lenient during the first

weeks of the Act, it’s best to start now to ensure continued supply.

“Companies should look at fadingout facilitation payments now so they have a chance to explain to suppliers

before the Act comes in,” said Barton.

Keep a file of rejected gifts,say advisers

Don’t miss breaking newswith our new 10:30 AM EMAIL

Each day we’ll cover the morning’s breaking news, give

you current market analysis and the most

up-to-date financial headlines.

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Visit: www.CityAM.com/newsletter

BY ELIZABETH FOURNIER

LEGAL SERVICES▲


Companies must start keeping a list of hospitality gifts they turn down Picture: REX

NEWS | IN BRIEF

M&A dealers beat themarketDeal-makers who brave the uncertainmarket conditions to make multipleacquisitions are being rewarded, accord-ing to research by Cass Business Schooland Towers Watson. Groups that madetwo or more acquisitions with a valueabove $100m in the last quarter of

2010 outperformed the MSCI Worldindex by 4.9 per cent, and have beatenthe market by 3.3 per cent on averageduring the last three years. M&A activi-ty more than doubled in 2010, said theresearchers, with 688 deals comparedto 322 in 2009 - though Europe is lag-ging behind the US and Asia.

Riversdale Mining talks stallTalks between Riversdale Mining andChina’s Wuhan Iron & Steel Corp overacquiring a state in the Zambeze coalproject in Mozambique have been sus-pended while a takeover bid by Rio Tintoremains on the table, Riversdale said.Riversdale is recommending its share-holders accept Rio Tinto's offer, saying itwas unaware of any higher offers in theworks.

Swiss banker placed in custodyFormer Swiss banker Rudolf Elmer, who

was found guilty of breaching banksecrecy laws over his transfer of clientdata to the online website Wikileaks,has been remanded in custody, reportssaid yesterday. The former chief operat-ing officer at private bank Julius Baer'ssubsidiary in the Cayman Islands wasdetained on Saturday because he risksdestroying evidence, his lawyer GandenTethong Blattner told ATS news agency.Elmer plans to appeal againstWednesday’s court decision that foundhim guilty of handing over secret files.

BarclaysBarclays has announced the appoint-ment of John Worth to the role of group financial controller.

He has been with Barclays since2009 as managing director, groupfinancial control. He joined Barclaysfrom Ernst & Young, where he was apartner in banking and capital markets.John previously worked for Barclaysand Barclays Capital between 1997 and2002.

RockspringRockspring Property InvestmentManagers has announced the appoint-ment of Mischa Davis as fund manag-er of the Rockspring Hanover PropertyUnit Trust and Charles Baigler asassistant fund manager of theRockspring PanEuropean PropertyLimited Partnership. Prior to joiningRockspring, Davis spent nine years atMatrix Property Fund Managementwhere he became a fund manager and

partner. He was responsible forinvestment strategies, analysing andsecuring bank finance for transactionsacross Europe, and individual assetbusiness plans for properties. Baigler

joins from Catalyst Capital, where hespent four years as a director respon-sible for acquisitions and the manage-ment of assets in Central and EasternEurope. Prior to this, he was aManager in the property financegroup at Royal Bank of Scotland.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Steve Dinneen

NavigantNavigant has announced the appointment of Romek Matyszczyk as a director in its London-based disputes and investigations team. Withover 20 years of specialist valuation experience,Romek has advised on all aspects of valuingbusinesses, companies, listed and unlisted secu-rities, intellectual property and intangibleassets. Prior to joining Navigant, he was a part-ner in the valuations group at Grant Thornton.

+44 (0)20 7557 7245morganmckinley.com

To appear in CITYMOVESplease email your careerupdates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT

in association with

● The new UK Bribery Act was initallyplanned for implementation at the beginningof the year, but was delayed to allow for fur-

ther consultation. It will now be introducedfrom 1 April 2011, with further guidanceexpected from the Ministry of Justice beforethe end of January.● The Act contains a new liability clause fordirectors that will mean subsidiaries and serv-ice providers will have to be closely moni-tored – regardless of how far down the chainbribery occurs, the buck will stop at the top.But Scotland has indicated it would scrap rulesthat ban companies convicted of bribery from

winning public contracts if the new liabilitycharges go ahead● Minority stakeholders in joint ventures

could be hit by the new rules –a 49 per centcontrol defence will no longer be acceptable,with investigations focusing on the practicaland commercial running of a business ratherthan the percentage held.● The Serious Fraud Office is likely to encour-age companies to be proactive in self-report-ing and remediating – US companies used toworking under the Foreign Corrupt PracticesAct are likely to be a step ahead of their UKcouterparts in coming forward.

FAST FACTS | UK BRIBERY ACT 2010

8/7/2019 Cityam 2011-01-24



GLOBALISATION must be promot-ed by business and governments as“a positive force for economic andsocial good,” an influential reportsaid today.

Despite a slight slowdown dur-ing the recession, the world’slargest economies will continue toglobalise steadily between now and2014, according to the Ernst and Young globalisation index.

And authorities must “avoid any descent into protectionism,” saidErnst and Young’s John Ferraro.

The index ranked the world’slargest 60 economies according totheir level of globalisation relativeto GDP.

The UK remained at number 15,overtaking Canada but being over-taken by Slovakia, which jumped12 places. Poland and Slovakia bothperformed well, largely due to bigincreases in internet subscriptionsand tourism.

Despite its economic troubles,Ireland received a rare piece of good news, moving from thirdplace to second place in the list.

“Exports have remained the bright light in Ireland’s story,underpinned by the country’schemicals, pharmaceutical andtech sectors,” Ferraro said.

“The government has alsoremained absolutely adamant thatIreland retain its 12.5 per cent cor-porate tax rate to ensure thatmultinational companies that have

headquarters in Ireland willremain,” he added.

“The survey supports the view that governments will find protec-tionist arguments less compellingand more expensive to imple-ment,” commented Dan Ikenson,trade economist at the CatoInstitute in Washington DC.

“Openness to trade, finance, andlabour in all directions will becomeeven more imperative in the yearsahead,” he added.

Despite the global economicslowdown, there has not been areturn to “ruinous tit-for-tat protec-tionism,” he said.

According to the World Bank,400m people in China haveescaped poverty due to trade liber-alisation, Ikenson said.

Stick up for globaltrade, report saysBY JULIAN HARRIS

WORLD ECONOMY▲

PORTMAN DOMINATES US BOX OFFICE

Natalie Portman pulled in US moviegoers over the weekend, with new release No Strings Attached joining Black Swan in the top ten films at the North American box office between 21-23 January. No Strings Attached, which co-stars Ashton Kutcher, entered at number one,taking $20.3m (£12.7m) in its opening weekend.

JOHN Lovering is set to step down aschairman of the pubs groupMitchells & Butlers this week, a yearafter taking over following aninvestor-led board battle.

Lovering, the former chairman of retailer Debenhams, has told the board he wants to leave as soon as asuccessor is found, because he feelshe has done as much as he can toimprove the group.

His departure is expected to beannounced at the company’s annualmeeting this week.

A source familiar with the compa-

ny told City A.M .: “It has always beenhis intention to leave once he’d done what he set out to do.

“He came in last year and set out anew strategy in March, which was to

have foods-led, rather than drinks ledpubs, and that is now the focus of thecompany.”

Lovering joined the M&B board in January last year following a high-pro-file row instigated by the Bahamas- based Joe Lewis. Lewis had beeninvolved in a public spat with M&B, who accused him of trying to takecontrol of the board.

The group, which has over 1,600pubs and restaurants and whosechains include Harvester, All Bar Oneand Toby Carvery, sold over 300 pubsin the last year, helping it to reducedebt. Its financial results have alsoimproved, and the share price is upalmost 30 per cent in the year since

Lovering took the helm.In September it reported a 4.4 per

cent increase in sales at outlets openfor more than a year, driven by asurge in demand for food.

Mitchells & Butlerschairman John

Lovering to resignBY JENNY FORSYTH

FOOD AND DRINK▲

ANALYSIS l Level of Globalisation in the World's Largest 60 Economies

Hong Kong

Taiwan

Singapore

Israel

1-20Most

GlobalisedCountries

21-40 rankings

41-60 rankings

Chinese giant tobuy into Bankof East Asia

BANKING▲

INDUSTRIAL and Commercial Bank of China, the world’s top lender by market value, will pay about $140m(£87.5m) for 80 per cent of Bank of East Asia’s US unit, the two compa-nies said yesterday.

The deal, first mentioned in areport on Friday, will requireapproval from regulators in Chinaand the United States before it is ableto proceed, ICBC and BEA said in sep-arate statements posted on the HongKong stock exchange.

“Acquiring a controlling interest inthe target bank is an important com-ponent in the bank’s globalisationstrategy, and the transaction wouldcomplement the bank's overseas insti-tutions,” ICBC said in the statement.

Bank of East Asia added that its USunit would now focus on its whole-sale banking business through its branches in New York and Los

Angeles.ICBC’s buy would make it the first

Chinese lender to buy into a US retail bank and is likely to be scrutinised by US regulators.

8/7/2019 Cityam 2011-01-24



The pensions chief who says thatinvestors are no longer a soft touchNAPF head LindsayTomlinson saysshareholders areexerting control overthe firms they own

It is easy to see why the chairman of the National Association of PensionFunds (NAPF) looks more relaxedthese days – this coalition govern-

ment is less keen on beating shareholdersover the head.

Lindsay Tomlinson is lounging on a sofain a bright modern office in the NAPF’s

headquarters on Cheapside, opposite therecently-opened shopping centre One New Change. It is a far cry from just a few months ago when Labour City ministerPaul Myners and business secretary LordMandelson took turns at giving sharehold-ers a kicking.

The pair argued investors had beenasleep at the wheel during the financialcrisis. They said shareholders had exertedlittle scrutiny over companies they ownedand in some cases let management pursuereckless growth as long as the returns were good. But when the crisis hit it wasleft to the taxpayer to underwrite largeparts of the UK banking system, and by extension, the country’s economy.

Tomlinson, whose members ownaround £800bn of UK shares and bondsissued by the country’s top firms, leansforward in his seat and says that some of that was deserved – but only some of it.

The youthful pensions chairman, wholooks a decade younger than his 59 years,says: “A lot of what the last governmenttalked about didn’t reflect that the influ-ence of UK based pension funds haddiminished. Pensions have changed somuch in the last 30 to 40 years. And partic-ularly since the end of the 1980s. In 1979exchange controls went in the UK. Andalso in the last 15 years a large amount of private equity, sovereign wealth andhedge fund money has moved into themarkets.”

Tomlinson’s members own around 12per cent of the UK stockmarket, with therival Association of British Insurers (ABI)owning the same percentage. Retailinvestors own a share, as do other kinds of UK-based institutions. Another 15 to 20per cent of the UK market is managed by UK institutions for overseas investors. The

rest is owned by overseas investors.But Tomlinson, who is also a managing

director at BlackRock, is right to point outthat the power of the UK pension fundsand insurance groups is waning. A decadeago the ABI’s members owned around 24per cent of UK public companies with theNAPF holding 18 per cent. And in the mid-1980s around 80 per cent of the UK stock-market was held by institutionalmanagers based in the UK.

He says UK pension funds “no longerhave the critical mass” they once hadamong the country’s biggest companies.He adds that institutions have also beenmoving into bonds over the last decade ormore in order to diversify their holdings.

Sovereign wealth funds and hedgefunds now have a great say in UK firms. And Tomlinson says the trick is to getthem to subscribe to the 1992 UK Combined Code on corporate governance, based on the comply or explain principle.

Tomlinson says: “It’s definitely in theirinterests for these funds to abide by theCombined Code. But they have a lot of other things to worry about. Other codes

in other countries, for one thing. But alsoUK companies are regarded as well run. Whereas there are firms in other regionsthat are based around family structures orhave unfair voting rights that need moreattention. So these funds reason: why spend so much time on the UK system? Also, foreign funds don’t want to getcaught up in the politics of a situation. If an issue looks like being highly politicalthey want to avoid it.”

However, in recent months sharehold-ers have showed a firmer hand at the tillerof the companies they own. Investorsrejected Prudential’s proposed $35bn(£23bn) takeover of AIG’s Asian business astoo expensive and told the insurer tothink again.

“Before the crisis the collapse of the Prudeal would not have happened,” says Tomlinson.

He adds that shareholders were quick tomeet with BP’s management in the wake

of its Gulf of Mexico oil spill –a f iasco that will cost the firm at least $11bn in com-

pensation and clean up costs. Tomlinson says: “This was a surprise for

a lot of shareholders. They asked the board a lot of questions about how risk management worked right the way through the company. We wanted tounderstand what went wrong.”

Did shareholders push for the removalof former chief executive Tony Hayward?“I’m a big fan of BP,” says a tight-lipped Tomlinson. “Good boards take action before shareholders ask for it.”

Yet Tomlinson admits “the real test” of this newfound shareholder activism ishow long it lasts when the deal marketpicks up again.

Rather than sniping at shareholders, Tomlinson says, the coalition is more con-cerned with tackling the budget deficitand making sure the UK’s corporate tax iscompetitive with other parts of the world.

But this government, like the last, isalso fighting its corner in the EuropeanUnion to ensure that the comply orexplain principle runs through the heartof much of the new financial services leg-islation that is being drafted in Europe.

Others in the 27-nation bloc argue thislighter touch regulation has failed andmore prescriptive rules are needed.

Tomlinson backs the government. “We want to make the existing system work better,” he says. “And I believe it can bemade to work. But this is currently a liveargument in Brussels.”

However, Tomlinson, who is also chair-man of the Takeover Panel’s CodeCommittee (which makes amendments tothe Takeover Code), is currently in themiddle of major rule changing himself. The body plans to overhaul the way merg-ers and acquisitions are governed in theUK.

Critics argue firms spend months onend fighting a takeover bid, and are alsoconcerned at the number of UK firms thatend up under foreign ownership.

Last October the Panel responded tothese growing concerns and proposedthat the offer period be cut from three

months to 28 days, and that the predatorfirm provide more details about its financ-

ing and its plans for the new business. Tomlinson says: “Companies are under

siege for long periods of time. Takeovertactics have evolved over the last 10 to 15 years and have tilted in favour of the firmmaking the offer.”

However, these proposals fall far shortof those advanced by City veteran SirRoger Carr, who was the chairman of British confectionary maker Cadbury, which was sold to US rival Kraft Foods for£11.9bn in January.

Carr – now at the CBI – complained hecould not properly defend the iconic UK firm because once a bid had been madehedge funds bought into the business and were only interested in driving up theprice of the company in the short term before selling to the highest bidder. Many in the last government and the unionsagreed with him.

Carr argued, among other things, thatinvestors who bought shares during a bidshould have their voting rights removedso that “short-term money does not deter-mine long-term futures”. He also said theacceptance level for takeovers should be

raised above 50 per cent plus one of share-holders to make it harder for short-termshareholders to ride roughshod over the wishes of long-term investors.

Tomlinson disagrees with this. He says:“We have spent the last 100 years in thiscountry evolving shareholder democracy.I am a firm believer in one share, one vote.” He also adds that observers were wrong to look to revisions in the TakeoverCode as a backdoor way of making nation-al champions out of firms.

He says: “That is for the government notfor us to decide. But UK governments overa long period of time have favoured openmarkets.”

Tomlinson says he expects the TakeoverPanel to publish a detailed draft of its pro-posals by then end of the first half of this year. Until then, Tomlinson has plenty onhis plate. His members, who have recently found their voice, might not have the all-pervasive influence they once had, but

they still have an important say on how corporate Britain thinks and acts.

Age: 59

Work: Joins Commercial Union as anassistant actuary in 1973; joinsMetropolitan Pensions Association (nowMercers) as a pensions actuary in 1977; joins Provident Mutual as an investmentmanager; from 1987 holds a variety of senior roles at Barclays Global Investors,(now part of BlackRock, where he is amanaging director). Became chairman of the National Association of Pension Fundsin 2009 and is also chairman of theTakeover Panel’s Code Committee.

Education: St John’s College, Cambridge,read mathematics

Family: Married, with “five children and

four Labradors.” Lives in Sussex.

CV | LINDSAY TOMLINSON

The NationalAssociation of Pension Fundschairman LindsayTomlinson at its group

offices on Cheapsidein the City

Picture: MichaTheiner/City A.M.

“Companiesare undersiege.Takeovertactics haveevolved tofavour thefirm making

the offer. ”

WORDS BY ROGER BAIRD

8/7/2019 Cityam 2011-01-24



BUSINESS travellers take items worth nearly £1,500 in their air-plane carry-on bags, according to asurvey.

The research found that businesspeople typically take 12 items,including essentials like tooth- brushes and a shirt.

But now smartphones and iPads– costing around £700 – are mak-ing their way onto the list as tech-nology becomes a must-have toolfor modern business.

Alison Couper, global communi-cations director at Hotels.com – which carried out the research –

said: “Today’s business traveller is working harder than ever before

and wants to be as ready, able andinformed to do their job whenthey are on the move as in theoffice.

“However, our survey shows theprice of staying refreshed and intouch is a high one for the modern jet-setting employee.”

The half-yearly index will chartthe contents of bags to see whattravellers are deeming as key to asuccessful business trip.

Couper added: “It’s as importantas ever for businesses to controltheir costs. The Carry-On Bag Indexgives a glimpse of the expense of flying from country to country even before travel and accommoda-tion are put into the equation.”

According to the survey, the listof typical items in a business per-

son’s carry-on bag includes an Apple iPad worth £699, aBlackBerry Torch 9800 (bought atCarphone Warehouse SIM-free) which is worth £464.95, aMoleskine ruled notebook worth£15 and a travel pillow worth£5.99.

Other favourite items include aMont Blanc Rollerball pen, valuedat £230, an adaptor plug, worth£3.99, the Economist, worth £2,some Colgate Total toothpaste, worth £1.45, Sure roll-on deodor-ant, worth £1.69 and a Marks &Spencer pure cotton non-iron shirt worth £25 plus Marks & Spencerlambswool socks worth £10.

Additionally, those with discern-

ing taste could also carry a copy of this newspaper – totally free.

Business bags full

of hi-tech cargoBY JOHN DUNNE

BUSINESS TRAVEL▲

The value of business travellers’ luggage has shot up with the introduction of high-tech portable items such as iPads

NEWS | IN BRIEF

Telefonica furthers Unicom allianceSpain's Telefonica and Chinese mobile oper-ator China Unicom will deepen their strate-gic alliance by buying an additional $500m(£312.5m) stake in each other. The two

companies, which together have more than550m clients in Europe, Asia and LatinAmerica, are exploring joint investments inparts of Asia and Africa where they are notalready present. After the new purchase,

Telefonica's stake in China Unicom will riseto 9.7 per cent, while China Unicom's owner-ship of Telefonica will reach a total of 1.37per cent. China Unicom, which will purchase21.8m shares of Telefonica in the coming

days at an agreed on price of €17.16 pershare, will get a seat on Telefonica's board.Telefonica will buy $500m worth of ChinaUnicom shares from third parties over anine-month period.

Look outside London to drive City’s growth

The government has made clearthat its top priority for 2011 is todrive forward growth in the UK economy and to ensure this

growth is spread across the country

and across a variety of sectors.It could be inferred that such a com-

mitment – shifting the focus away from London and the financial servic-es industry – is bad news for the City.

However, anyone with any doubts asto how important a role financial serv-ices will play if we are to achieve thisambition should take a closer look atthe areas outside of London and whatis driving their economies.

This is a point that was made clear when I visited Leeds last week.

Of the one million people the finan-cial and professional services industry employs throughout the UK, less thana third are based in London and the

South East.Leeds is one of the foremost centres

for financial services in the UK and was recently ranked among the top 25cities for business in Europe, ahead of

larger, higher profile financial centressuch as Rome, Moscow and Athens. With banking and insurance servic-

es increasing by 107 per cent between1997 and 2007, it is clear that theindustry will be a key driver of eco-nomic growth in this area in the yearsto come.

Only a sophisticated and globally connected financial services industry is capable of delivering the combina-tion of financing British businesses

will need if we are to succeed in creat-ing growth based around greater eco-nomic diversity.

This is the message I took to Leeds when I visited last week to meet with

various regional business leaders so Ican better represent the industry bothat home and abroad.

This week, for my first overseas visitof 2011, I am leading a business delega-tion to Turkey – a country that DavidCameron last year stated is “vital forour economy, vital for our security and vital for our politics and diplomacy”.

As a vital link between East and West, Turkey is clearly an important business partner for the UK – hence

our long-standing support for theiraccession to the EU.

The scale of future opportunities for both countries is enormous. Not only does Turkey boast a tradition of eco-

nomic stability, but the 10 per centgrowth it exhibited during the secondquarter of 2010 made it the fastestgrowing economy in the G20.

Working in partnership with finan-cial centres in the UK as well as withour most important overseas partners will help to generate greater economicgrowth for all, whether they are basedin London, in Leeds or in Istanbul. Michael Bear is Lord Mayor of the City of London

CITY COMMENT

MICHAEL BEAR

8/7/2019 Cityam 2011-01-24


Playing the new uranium boom

20

Wealth ManagementCITYA.M. 24 JANUARY 2011

uranium. However, there are two new funds that are designed to reflect theperformance of companiesengaged in various aspects of theuranium industry.

The annual managementfee for both funds is 0.69 percent and both hold Cameco,Paladin and Uranium One,

which together producearound 20 per cent of the

world’s uranium. Over thepast six months the sharesof Cameco and Paladin areup over 50 per cent whileUranium One is up nearly 90 per cent.

Where these funds differ istheir asset allocation: thethree miners make up over 40

per cent of the Global X ETF; howev-

er, they are less than 9 per cent of the ETFSecurities fund. The fund counts Arevaand Toshiba among its top holdings, giv-

ing it greater exposure to the construc-tion of nuclear reactors. Over the

past six months however,their shares have only appreciated by 7 per cent

and 15 per cent respec-tively.

Although the ETFSecurities fund pro-

vides greater diversifi-cation, it is unlikely toprovide the exposureto a rising uraniumprice that comesfrom holding the

Global X ETF, whichalso includes Denison

Mines, Kalahari Minerals

and Extract Resources among its top 10holdings.

The fund also provides investors withmore potential upside due to the inclu-sion of exploration companies such asLaramide Resources, which has signifi-cant land packages in Australia and theUS. The fund is up 17 per cent since itslaunch in November last year. By contrastthe ETF Securities fund is up 7 per cent.

These ETFs provide investors with aneasy way to gain exposure to the uraniumsector without having to pick individualstocks. The Global X ETF however, would

be my choice since it’s more heavily weighted towards the miners and corre-lates more closely to moves in the urani-um price.

Ben Mountifield is the author of the monthlynewsletter ‘The Mountain Investor Report‘ See:

www.mountaininvestor.com

O VER the past six months, the priceof uranium has risen more than 60per cent to $68 an ounce andthanks to increasing demand and

tight supply, prices could be headed evenhigher.

There are 442 operating nuclear reac-tors worldwide but with 60 new ones

under construction (a further 156 are inthe planning stages) and fuel suppliesfrom stockpiles dwindling, it’s hardly sur-prising that uranium prices have beenpushing higher. The supply of this vitalmetal looks set to get tighter still asRussia closes the doors on its “megatonsto megawatts” programme in 2013. Underthe scheme, which has been runningsince 1995, more than 15,000 ex-Soviet

warheads have been down-blended toreactor grade fuel.

By 2014, global demand is projected to be 95.7m kilograms, up from 76.6m kgtoday. This will leave an estimated annualshortfall of around 36m kg, which is like-ly to result in higher prices both for themetal and for those companies capable of

bringing uranium to market. There is currently no ETF (Exchange

Traded Fund) that tracks the spot price of

Take care how you getyour uranium exposure

WALL ST WEEK AHEAD

MARTINONTHE MARKETS

T The much anticipated pullback is finally under way, someinvestors say, after a mid-week

wobble. But the market is show-ing it still has some juice left –if earn-ings can meet towering expectations.

This earnings season, if you’regood, you’re just OK. If you’re just OK,

you’re bad. And if you’re bad, you’requickly taken outside and put out of

your misery. Only the truly great are

lauded – and even then not very much.

In an environment like that, and with a heavily extended market, dis-appointments are taken hard. TheS&P 500 just ended its first down

week in eight with underwhelmingresults from the likes of GoldmanSachs and Freeport McMoRan Copper& Gold weighing on indexes.

Some big energy companies such asChevron and ConocoPhillips arereporting results this week.

Expectations have been running upin the sector, the third- largest in the

S&P 500, providing plenty of room fordisappointment.

“We have been climbing up amountain, and we are on a ledgehere, so there is definitely a bit of apause as people are going to needsome evidence of accelerated recov-ery – not just baseline recovery,” saidRick Meckler, president of investmentfirm LibertyView CapitalManagement, in New York.

Analysts have beefed up expecta-tions as stocks rocketed late last year

on signs of an improving economy.S&P 500 earnings estimates for thecurrent quarter were revised up 1 percent over the last 60 days, accordingto data from StarMine.

Positive revisions were heavily con-centrated in the technology, energy and materials sectors. Estimates inthe materials sector were raised 5.7per cent; in energy, they rose 4.8 percent, and in technology, 2.3 per cent,

StarMine said.Unsurprisingly, those three sectors,

along with financials, took the bruntof selling last week. Materials sharesfell the most, losing 3.3 per cent overthe week.

Wall Street will tune in to PresidentBarack Obama’s State of the Unionaddress tomorrow night, when he isexpected to make job creation the No.1 issue.

The Federal Reserve’s policy-mak-ing panel also will meet for the first

time this year, convening tomorrow and concluding on Wednesday.

MARTIN SLANEY

ANALYSIS l FTSE

6,100

5,900

5,700

25 Oct 12 Nov 2 Dec 22 Dec 14 Jan

5,896.2521 Jan

Global X Fundswww.globalxfunds.com

FUND PROVIDED BY FUND NAME DESCRIPTION (FROM THEIR WEBSITE) EXCHANGE / TICKER

“The Solactive Global Uranium Index is designed to reflect the per-formance of the uranium mining industry. It is comprised of selectedcompanies globally that are primarily engaged in some aspect of theuranium mining industry such as mining, refining, exploration, andmanufacturing of equipment for the uranium industry.”

NYSE Arca / URAGlobal X Uranium ETF

ETF Securitieswww.etfsecurities.com

“ETFX WNA Global Nuclear Fund is designed to track the perform-ance of the WNA Nuclear Energy Index. The WNA Nuclear EnergyIndex is designed to track the performance of approximately 65companies engaged in the nuclear energy industry with representa-tion across reactors, utilities, construction, technology, equipment,service providers and fuels.”

London Stock Exchange / NUKEETFX WNA Global NuclearEnergy Fund

BEN MOUNTIFIELDINVESTMENT COMMENT

Stocks to start the week lower on China fears

Despite closing on Friday on amild high, over the course of the week the FTSE still droppednearly 1.8 per cent, managing

along the way to close at its lowestlevel for five weeks, and it looks likethe bears could resume control onceagain this morning.

GFT is quoting the FTSE 100 indexto open down 10 points from Friday’sclose, at a level of 5,886. Elsewhere inEurope the German Dax is called toopen unchanged at 7,062, and theFrench CAC is quoted down 3 pointsto open at 4,014.

CHINA ECONOMY CAUSING CONCERN

The latest prime culprit for therenewed selling pressure on equities

is the lingering fear that the Chineseeconomy is overheating.Figures for China’s Gross Domestic

Product showed the country stillcharging along at an annual increaseof 9.8 per cent, which also stokedfears that further monetary tighten-

ing measures from Beijing are in the

offing. Tomorrow sees the release of UK’sown GDP data for the fourth quarter,and traders may well err on the sideof caution ahead of the announce-ment which follows a shockingly low retail sales figure last Friday, indicat-

ing that British retailers had the

worst December ever – the cause being a chilly combination of thesnow and soaring food prices.

IAG IN FIRST DAY OF TRADING

Also today watch out for potentialhigh volumes and some interesting

swings on the first day of trading forthe newly formed International

Airlines Group, created by a merger of Spain’s Iberia and British Airways.

The new group forms Europe’s sec-ond-largest airline, and has already targeted further acquisitions, butinvestors may be put off by the threatof a fresh wave of strikes. Martin Slaney is director of GFT’s globaldealing operations

8/7/2019 Cityam 2011-01-24


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Wealth Management 21CITYA.M. 24 JANUARY 2011

3i Group 319.75 3 340 2503i Infrastructure 116 0.25 125.25 101A.B. Foods 1086 7 1182 873.50Aberdeen Asset.Man. 211.75 -2.50 225 112.75Admiral Group 1656 34 1693 1114Aegis Group 141.25 -0.50 145.50 103.50Afren 151.75 -0.50 161.75 79African Barrick Gold 529 11 670 503Aggreko 1419 -1 1685 882Alliance Trust 367.75 0.75 378 293.50Amec 1170 9 1226 733.50Amlin 389.75 3.25 433 366.75

Anglo American 3091 24 3410 2254Antofagasta 1411 -8 1634 761Aquarius Platinum 352.50 -3.50 458 227ARM Holdings 518 8.50 536.50 189.25Ashmore Group 353 4.75 383.75 218Ashtead Group 163.50 2 177 77AstraZeneca 2963.50 41 3385 2732Autonomy 1480 56 1975 1271Aveva Group 1612 0 1673 1007Aviva 436.50 8.50 436.50 294.25AZ Electroni c Mater ia ls SA (WI) 298 -2 317.50 249Babcock International 560 6 635 492.75BAE Systems 349.50 6.50 388.75 294.75Balfour Beatty 325.50 5.25 327 229.75Barclays 301 -2.25 383.25 255.25Barratt Development 98 0 137.75 70BBA Aviation 220 0 228 158Bellway 664.50 -2 809 511Berkeley Grp Hldgs 919 3 960 742Betfair Group 1000 -15 1550 882BG Group 1313 14.50 1366 984BHP Billiton 2393 11 2616 1684.50BlackRock Mining 780 -4 815 492BlueC rest All Bl ue 170.25 0.25 1 74.50 156 .25Booker Group 58 -0.50 60.50 38.75BP 497.25 3.25 655.50 303Brit Insurance 1050 -1 1055 728British Amer.Tob 2282.50 -14.50 2521 1959British Empire Tst 500.50 1 512 396.50British Land 516.50 -7 537 418.25Britvic 445.25 3.75 518 404.50Brown (N.) Group 298.75 -4.75 311.25 206.50BSkyB 751 5 751 524.50

BT Group 174.50 -2 190.75 110Bunzl 740 0 777 616.50Burberry Group 1031 -14 1156 590.50C&W Comms 48.25 -0.25 63.75 44.25C&W Worlwide 70 2.75 100 60.50Cairn Energy 445 8 493.25 318.25Caledonia Inv. 1872 12 1928 1512Capita Group 697.50 -5.50 826 635.50Capital & Counties 146.25 0.75 157 100Capital Shop Centre 374 -3.50 424.75 301Carillion 380 0.50 387.50 273Carnival 2980 13 3153 2037Catlin Group 374.25 3.25 393 320Centamin Egypt 147 0.75 197 106.75Centrica 326.50 -3 346 264Charter 791.50 -8.50 853.50 567Chemring Group 3245 79 3663 2598Close Brothers 852 0 888.50 664COBHAM 219.50 1.75 276 192.25

Colt Telecom 148 4 148 109Compass Group 564 6 594 425Cookson Group 638 13.50 687.50 367.50Croda International 1510 1 1625 751Daily Mail & Gen 566 0 590 432.50DAVIS SERVICE 437 0 450 360.25De La Rue 819.50 5.50 984 549.50Debenhams 68 1 79 53Derwent London 1545 -10 1605 1208Diageo 1204 7 1250 1000Dixons Retail 22 0 36.50 21.25Domino’s Pizza 523 11 586 309.25

Drax Group 388.75 -1.50 421.50 326.25DS Smith 213.50 0.50 226 104Dunelm 470.50 1.50 550 325.25easyJet 382 0 496.50 348.50Edin.Inv.Tst. 434.75 2.75 467.25 364Electrocomponents 251 2.50 279.50 174.75Enquest 145.50 8.25 150.50 89.25Essar Energy 534.50 0 589.50 383Eurasian Nat Res 1029 3 1266 818Euromoney Inst. 707 3 732 461Experian Group 761.50 4 819 572Ferrexpo 419.75 0 448 197FirstGroup 379 -3 412.50 336For.&Col.Inv.Tst 310 1.25 316.25 251.50Fresnillo 1349 3 1682 669.50G4S 262 1 283.50 237.75Genesis E.m.f. 539 0 568 399GKN 212 -2 237 102GlaxoSmithKline 1156 4.50 1318.50 1095Great Portland Est. 355 -0.50 369.25 279Greene King 447 -4.50 491.50 376.25Halfords Group 406.25 0.50 550 372.75Halma 320 -7 366.50 223Hammerson 436 -1.25 437.50 336.25Hargreaves Lansdown 517 1 599 276.50Hays 121.50 0 133.50 88.50Henderson Group 152.25 2.50 155.50 112.75Heritage Oil 439.50 5.25 581 296.75Hikma 889.50 -5.50 900 525Hiscox 382 2.50 399 326.25Hochschild Mining 489 -11.50 658 234Home Retail Group 214 -1 295 188.50Homeserve 441 0 487.50 326.25

Howden Joinery 118 4.50 118 56.75HSBC Holdings 695.75 -1.50 719.50 596.25Hunting 752.50 -4.50 806 439.50ICAP 553.50 8 570.50 294IG Group 469.50 0.50 553 362.50Imagination Tech 384.25 1.50 441.75 215IMI 890 -1.50 953 530.50Imperial Tobacco 1799 -12 2154 1753Inchcape 379 -3 394.75 237Informa 435 1 448 304.50Inmarsat 626.50 5.50 821 606.50InterContinental Htl 1295 8 1332 887Inter medi ate C ap.Grp 338 .25 -2.50 360.25 240.50Inte rnati onal Pe rs Fin 3 42 5.50 386.5 0 183.25International Power 412 -4.75 448.50 284.50Intertek Group 1715 -5 2000 1150Invensys 335 5.50 364.25 230.25Investec 500 0 562 417.75ITV 75.25 -0.75 78.50 48.25

Jardine Lloyd 639 2 639 459John Wood Group 543.50 14.50 581.50 293Johnson Matthey 1885 -17 2100 1446Jupiter Fund Man 307.50 2.50 314 180.25Kazakhmys 1544 6 1671 965Kenmare Res. 33 0.75 35 9.25Kingfisher 267.50 3.25 271.25 198.50Ladbrokes 132 -0.75 162.75 122.75Lancashire 571.50 2.50 647 442Land Securities 678 -1.50 707 545Legal & General 110 0.25 111 69.75Lloyds Banking Grp 67.25 0.50 77.50 46.50

Logica 136.75 0.75 148 101.75London Stock Ex. 847 7.50 906 544Lonmin 1753 9 2113 1355Man Group 282 -12 310.50 202Marks & Spencer 368 1 427.50 323.50Meggitt 358 3.50 381 251.50Melrose 303.75 -3.25 329 162Mercantile Inv Tst 1119 3 1133 828Michael Page 526 15.50 565.50 346.50Micro Focus 398.50 -3 546.50 276Millennium & Cop. 561 -4 594.50 368.50Misys 339.75 8 343 201.50Mitchells & Butlers 349 -2 361 265.50Mitie Group 231.25 0.75 241 188.75Mondi 489.75 -4.25 557.50 338.25Monks Inv.tst. 355.50 0.50 363 271Morgan Crucible 265 0.75 274.25 159.75Morrison (Wm) 264 1.50 306.25 257.50Murray Int.Tst 921.50 -3.50 966 736.50National Express 242 -3.75 259.50 195.50National Grid 542 3 596.25 484.25Next 2144 8 2344 1817Nort humb rian Water 3 03.75 -9.2 5 361 .5 0 252.75Ocado Group 227 13.50 227 123.50Old Mutual 125.25 -0.75 145.25 97.25PartyGaming 199.25 -6.75 334.50 199.25Pearson 1043 4 1051 855Pennon Group 614 -10.50 650 483Persimmon 422 -3 507.50 336.50Petrofac 1582 -6 1685 876.50Petropavlovsk 1042 -13 1365 852Phoenix Group Hldgs 591 -3 758 557.50Premier Farnell 283 1 304.50 174

Premier Oil 2011 23 2025 1017Provident Financial 966 0 999.50 728.50Prudential 665 -2 697.50 487.50PZ Cussons 370 -6 409 243QinetiQ Group 136 1.50 142 96.75Randgold Res 5025 61 6655 4209RDS ‘A’ 2142.50 27.50 2162 1624RDS ‘B’ 2138 31 2159.50 1554Reckitt Benckiser 3390 44 3655 3037Reed Elsevier 561 5 563 460.50Regus 99.25 0.25 120 66Renishaw 1325 -13 1342 565.50Rentokil Initial 102.50 1 138.50 87.75Resolution 246.75 -2.75 328.50 211.25Rexam 339.50 3.25 356 276.50Rightmove 785 -10.50 812 500.50Rio Tinto 4243 6 4584 2812RIT Capital Partners 1322 11 1322 971.50Rolls-Royce Group 627 -3 665 473.50

Rotork 1635 -3 1895 1215Royal Bank of Scot 45 2.75 58 31.25R SA In surance Grp 132.5 0 -0. 50 1 36.5 0 114 .75SABMiller 2102.50 22.50 2306 1650Sage Group 280.25 4 289 222Sainsbury (J) 370.50 0.25 395 313Schroders 1811 -5 1922 1116Schroders NV 1414 7 1508 929.50Scot.& Sth. Energy 1217 6 1258 1010Scottish Mortgage 704 -1.50 717.50 475SEGRO 288 -4.50 341.25 250.25Serco Group 558 0.50 651 494.25

Severn Trent 1401 -10 1499 1086Shaftesbury 441 -0.25 460 349.25Shire 1639 -17 1674 1220SIG 143 -0.50 153.25 90.75Smith & Nephew 699.50 4.50 714 537.50Smiths Group 1340 -15 1388 995.50Soco International 370 3.25 484.25 292Spectris 1307 -18 1418 735Spirax-Sarco 1850 46 2025 1240Spirent 137.25 -4.75 160.25 102.75Sports Direct 168 5 174.75 92.25St James’s Place 293 12 293 204.25Stagecoach Group 200.50 -1 224 160.75Standard Chartered 1673 -34 1950 1351.75Standard Life 223.75 1.75 236 173Supergroup 1550 -3 1638 535SVG Capital 247 -1 250 125.25TalkTalk 151 -2 168.25 108.50Talvivaara Mining 586.50 16 620 342.50Tate & Lyle 555 3 564.50 388.75Taylor Wimpey 36.50 1.25 44 22.25Telecity Group 444.50 -8.25 532.50 360Templeton Emrg. 636 -5 689.50 471.50Tesco 400 1 454.50 377.50Thomas Cook Group 199.25 2.50 272 171.75Travis Perkins 1033 -5 1127 664.50TUI Travel 267 5 308.50 190Tullett Prebon 395.75 4.75 420.50 262Tullow Oil 1330 23 1388 991.50UK Commercial Prop 80 -0.25 85 72.75Ultra Electronics 1753 22 1895 1265Unilever 1912 22 1997 1688United Utilities 550 -7 628.50 507

Utd Business Media 702 1 712 409.75Vedanta 2371 -1 2934 1839Victrex 1402 10 1522 806Vodafone Group 175.75 3 178.75 129.50Weir Group 1653 36 1861 735.50Wellstream Holdings 784 0 793.50 436Whitbread 1720 -14 1887 1266William Hill 185.75 2.75 216.50 155.50Witan Inv Trust 510 0.50 522 410WOLSELEY 2170 -3 2195 1223WPP Group 794.50 7 802 572.50Xstrata 1402 13.50 1535 845.75YULE CATTO 220 0 221.25 106

8/7/2019 Cityam 2011-01-24


Wealth Management | Spread Betting22 CITYA.M. 24 JANUARY 2011

ECONOMICS NEWS

S&P 500 ison the edgeof a painfulcorrection

THE SCOTTISH journalist BertieCharles Forbes once said:

“Optimism is the stuff of which American business success is fash-

ioned”. He would have seen much to behappy about in the USA now. Thoughunemployment remains stubbornly high,

American investors at least are seeing the bright side.

The S&P 500 index of stocks has rallied by 8 per cent in the last three months and2.66 per cent in the last month alone. Atthe end of last week, however, the indexseemed to be struggling a little. Christmasis now long forgotten. Is it time for spread

betters to prepare for a correction?Kully Samra, a director at Charles

Schwab, an American brokerage, arguesthat it’s possible. “Sentiment is a littlefrothy right now,” he says, “and earningsexpectations are quite elevated”. Samrareckons that if a few American companiesreport disappointing results, it could trig-ger some profit taking.

He points to several indicators suggest-ing that market sentiment might be a lit-tle too optimistic at the moment. TheSentimenTrader index measuring the gap

between “smart money” and “dumbmoney” optimism shows a large gapemerging from around December, as“dumb money” got more confident and“smart money” less.

Similarly, individual investors (ratherthan institutional investors) are now more

bullish than at any point in the last three

But there are good reasons to beoptimistic, says Daniel Knowles

Ready to fly? Or justabout to leap off acliff?

Picture:GETTY

THE WEEK AHEAD

years, while bearishness is very low.Interestingly, the last time the gap

between bulls and bears was so large wasin spring 2009, though then the gap wasthe other way around. That point was ret-rospectively described as the “mother of all market bottoms”.

So is this the mother of all market tops? Well, probably not, but spread betters would still seem wise to go short on the

S&P 500, at least in the short term. BenBarty-King, an options trader at ETXCapital, suggests that traders should

watch the performance of the index quiteclosely. “The key pivot point is 1,268.5” hesays. “If it stays above that level, then itcould well keep going”. If not, Barty-Kingsuggests the index could drop down toaround 1,235 points.

WATCH OUT FOR THOSE RESULTSIt would also seem wise to watch individ-ual stocks. The S&P 500 was sharply up onFriday after General Electric (GE) reportedits results, but many more are coming.Halliburton and McDonalds release theirreport on Monday, while on Tuesday,

Johnson and Johnson does, among others. Though more market shaking revelationson the scale of Steve Jobs’s announcementlast week are unlikely, traders willing tofollow individual companies closely might well profit from the swings in par-ticular stock prices.

THE TIPSTER

SAGE DATA COULD

BE A CATALYST

that its European head, AndreaMoneta, has been replaced by itsNorth American head, IgalMayer. The company’s mostrecent trading update waspromising since it announcedplans to cut debt by at least

£700m over the next threeyears. But the good news wasovershadowed by investors’ con-cerns about the reasons for thisaction. Capital Spreads quotes437.3p-438.2p.

The euphoria investors felt forthe FTSE 100 at the start of theyear has given way to worry andsome have begun to beat a pathto the exit door. While Europeansovereign debt concerns havealleviated in recent days, tradersare becoming increasingly con-cerned about rising inflation inChina. With the FTSE 100 soheavily overweight in commodi-ty related stocks, any negativeshift in sentiment is likely tosend it sharply lower. ETXCapital is quoting 5,912-5,913for the UK 100 rolling daily con-tract.

Donata Huggins

AN INTERIMmanagementstatement is due fromSage, the software serv-ice provider, on

Wednesday. Renewed confidencein the economy should bode wellfor the company, which has seenshares creep back to the levels itachieved before the creditcrunch. Admittedly, the stockremains a long way below the alltime highs of the dot-com bub-ble, but with analyst supportedging up too, the numbers laterthis week could prove to besomething of a catalyst. The cur-rent IG Index price is 279.5p-280.4p.

The world’s sixth largestinsurer Aviva has been trendingupwards since 1 December. The

latest news on the company is

in association with

20

30

40

50

60

70

2009 2010

ANALYSIS l Sentiment Traders confidence index shows the smart money is less confident

Smart Money Confidence (Left)

Dumb Money Confidence (Left)

S & P 500 (Right)

Source:www.sentimentTrader.comasof December2010

80

90

100

200

0

400

600

800

1,000

1,200

1,400

COMPANY NEWS

l Electronics company

Philips publishes its 2010full year results on Monday.

l Sodexo, the food servic-es provider, releases itsfirst quarter 2011 resultson Monday.

l Tuesday sees Ericssonreport its fourth quarter2010 results and Siemensits first quarter 2011results.

lWH Smiths will hold itsannual general meetingand issue a trading updateon Wednesday.

l On Thursday, Nokia willissue its fourth quarter2010 results and Tullow Oilwill publish a trading

update.

lMonday sees France,

Germany and the EuropeanMonetary Union (EMU)publish the results of theirrespective purchasing man-agers index (PMI).

lThe Bank of Japanmakes a rates announce-ment on Tuesday.

lThe UK releases itsfourth quarter GDP figureson Tuesday.

lThe US January con-sumer confidence index ispublished on Tuesday.

lOn Wednesday, the Bankof England releases the min-utes of its last meeting andthe US Federal OpenMarket Committee makes a

rates announcement.

l Germany’s consumer

price index (CPI) is pub-lished on Thursday.

l The EMU posts theresults of its January con-sumer confidence index onThursday.

l On Thursday, the USDecember pending homesales data is released.

l The Japanese unemploy-ment rate and overallhousehold spending figuresare posted on Thursday.

l The all important USfourth quarter GDP figureis announced on Friday.

l The EMU’s broad meas-ure of money supply (M3)

is released on Friday.

POLITICAL NEWS

l French President Nicolas

Sarkozy briefs the mediaand diplomats on France’spriorities and agenda for itspresidency of the G8 andG20 on Monday.

lThe annual meeting of the World Economic Forumin Davos-Klosters begins onWednesday this week.

lPresident Barack Obamagives his State of the Unionaddress on Tuesday.

lOn Tuesday, the IndianPresident gives a nationaladdress for Republic Day.

lUN Secretary Generalmeets with the GreekCypriot and Turkish Cypriotleader to discuss the reunifi-

cation of Cyprus onWednesday.

However, while it might make sense to be short at the moment, if the marketdoes drop sharply, it might also presentan excellent opportunity to buy. As Samrapoints out, this is a pre-election year, andhistorically, the American stock markethas not dropped in a pre-election yearsince 1945. In fact, on average it hasgained 17 per cent.

With large numbers of individualinvestors flocking back to the Americanstock market from bonds and fromemerging market funds, it is not unrea-sonable to expect the US stock market tohave another good year. Many Americanfirms are sitting on large piles of cash,

which may make for a boom in mergersand acquisitions, while consumer spend-ing, manufacturing and earnings growthdata are all solid. There are lots of very good reasons to be optimistic about themedium run performance of the market.But traders should perhaps wait a while –lest they be disappointed.

8/7/2019 Cityam 2011-01-24


“WOW,” says my (non-Jewish)friend. “Whenever you’ve

banged on about how gor-geous Israeli men are, I

always thought you were just being biased.But you weren’t. They are. This ismadness.”

Olivia and I are one-and-a-half hours off our brilliantly Israeli El Al flight – think

warm bread rolls, smoked salmon, mid-aisle prayer, non-stop gossiping betweenflight attendants and passengers becauseIsrael is small and “everyone knows every-one”. Having dropped our things in a sea-facing room at one of Israel’s oldest hotels,the Dan (pictured below), we’re now in a

bar. The bar is called HaMaoz (King George

32) and, like everywhere else cool in deli-cious but derelict Tel Aviv, looks like noth-ing much on the outside. Inside, though,and on the covered, somewhat sleepily-guarded terrace (no bombings for a while),it is rammed to the rafters with hipsters.

The bar is done up to be like a living room, with fridge magnets, homey sofas, cup- boards, home-style toilets and other recy-cled domestic bits and pieces. This is atypical example of Tel Avivian bar style: des-perately creative, as though its customers’lives depend on having somewhere super-cool to see and be seen and to drink, atnight. In some ways, they do – known asthe Bubble, Tel Aviv stands apart as a hedo-

nistic, forget-the-politics-and-your-woesenclave in Israel. You can dance with dragqueens, gyrate in a club done up as achurch complete with stained glass win-dows and an altar, pick up a threesome ona rooftop dancefloor or eat the finest food

you will ever find in a posh, mosaic-tiledrestaurant.

Back to HaMaoz. We find some spacenext to an almost comically attractive

young man, who is chatty and friendly,informing us that he is a domestic pilotand beach lover – his regular spot is onGordon Beach (the long Tel Aviv beach isdivided into several parts; Gordon isn’t farfrom our hotel) and we are welcome to joinhim there the next day, Wednesday (mid-

week beach lounging is the norm in TA). When he leaves, we meet someone else,

an intense, bald-headed advertising cre-ative, who invites us to his apartment forsome supper, despite the hour being after1AM. We contemplate his offer (friendly rather than creepy in the context of acountry in which European social normsare all but meaningless and midnight din-ners, or 3AM street snacks of bourekas andfalafel are de rigueur), but decide to headhome, via another bar on the street. It’spacked despite being 2AM on a Tuesday night, with more cool and beautiful peoplelounging in luxurious chairs and talkingintensely at the bar.

The next day we hit the beach, the puls-ing heart of Tel Aviv. Here, hippies (andthere are many in Israel – as anyone whohas travelled to India will know), models,pervy old men, ball-players and poserscome together. It stretches from the Hilton

at one end all the way to the minarets andpale stone of Jaffa at the other. It’sNovember but the sun is scorching at 30degrees and the Mediterranean is balmy.Heaven – but we soon get twitchy feet and

begin to stroll. We wander into Neve Tsedek, the oldest

quarter of the city and its most charming –in a sad departure from its humble origins,this also makes it the most expensive.High-end boutiques selling interestingclothes – many made by the new wave of avant-garde Israeli designers – sit cheek by

jowl with patisseries, luxury ice cream par-lours and wine bars. A new development atthe southern end of Neve Tzedek’s mainstreet, Shabazi, is a favourite with thenumerous French tourists and contains

beautiful bistros, stalls and boutiques. We dip into a split-level bookshop,

which feels like somebody’s house, andspend a while among the wonderful rangeof Jewish and Israeli history and politics

Tel Aviv, with its high-rises and long beach,seen from a rockyenclave in Jaffa.Below: the Dan TelAviv – with its iconicrainbow front – enjoysa prime position onthe beach.

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CONTINUE ON PAGE 24

THE SAVOY GRILL’STRIUMPHANT RETURNREVIEWED IN TOMORROW’SLIFESTYLE SECTION

23

Israel’s land of plenty

Zoe Strimpel finds too much to do,feel and see in this land of contrasts.From the buzzing restaurants, beach,bars and art scene of Tel Aviv to theancient history of Jerusalem, Israel’scup truly runneth over

8/7/2019 Cityam 2011-01-24


books. Olivia selects an amusingly incon-gruous accompaniment to our decadent

beach-lounging and bar-hopping: the con-troversial Invention of the Jewish People

by raging left-winger Shlomo Sand. Butthen, this is a city of contrasts, with both ahighly evolved culture of hedonism and apopulace that is cynical, and often indenial, thanks to seemingly insoluble exis-

tential angst and threat. Parties on onehand, grave danger on the other.Night-time brings what I look forward

to most in Israel: eating (although break-fast is also a source of wonder. Try Benedict, on Rothschild 29 and 171 Ben

Yehuda, and the Breakfast Club onRothschild 6, for perfect pancakes, bulgar

wheat with pomegranates, or full Israeli breakfast of eggs, tahina, fresh bread andsalad.). Tel Aviv’s main market, Carmel,heaves with fruit and vegetables thecolour of cartoons, as well as spices andherbs that can lift any salad to a paradisal

realm. One restaurant, Carmela B’Nachala(Hatavor 46), sits on Carmel’s fringes to

better absorb its fresh produce, and themeal I once had there is still in my all-timetop five dinners. The herb salad will forev-er stay with me.

The ultimate culinary find this trip was Abraxis North (40 Lilenblum St), where wecrooned and swooned over a single perfectroast sweet potato, head of roast cauli-flower and mountain of tomatoes (the

chef is famous for his love of tomatoes).Next day, we went to Jaffa and exploreda beautiful Palestinian art show in a ware-house by the harbour – just one of hun-dreds of shows in this hyper-creative city atany one time. We wished we had time forthe Tel Aviv Museum of Art, a tour of theBauhaus architecture for which the city isknown, and a dance show at the world-famous Susan Delal Centre.

My advice is this: try not to sleep. It’llhelp you make more headway into the

bank of pleasure and culture the city is built on.

Europeansocial normsare all butmeaninglessin Israel.

Impromptumidnightdinners or3AM snacksof perfectbourekasare the norm

Lifestyle | Gadgets and Travel24 CITYA.M. 24 JANUARY 2011

CONTINUED FROMPAGE 23

WHO can begin to describe

Jerusalem? The religious centreof the Western world and muchof the East, it is Tel Aviv’s polar

opposite. Tel Aviv has a beach, Jerusalemhas mountains. Tel Aviv has a party atmos-phere; Jerusalem has a studious one(though you can still stay out to 4AM any night of the week quite happily). Yeshivastudents and the ultra orthodox dominatethe streets; the Via Dolorosa, Western Walland Church of the Holy Sepulchre is theirstomping ground and that of the Arabs

who share the city.But we’re not here to worship or study.

We’re here to stay at Israel’s second designhotel (the first is the beautiful, always-

booked Montefiore in Tel Aviv) and Jerusalem’s first – the Mamilla.

It is a remarkable hotel and well worththe flight alone. Built from pale Jerusalemstone, it encroaches on the Mamilla Mall,a long stone passageway with shops andcafes that leads to the walls of the Old City. From many of the rooms – and thehotel’s rooftop bar –

you have a perfect view of the OldCity. I can reportthat a martinigoes extraordi-nary well with anight-time view of the Dome of the Rock.

Like almostevery hotel, restau-rant and café in

Jerusalem, the Mamillais completely, 100 per centkosher and Orthodox Jewish-approved. We arrived on a Friday night,the beginning of the Sabbath, to be con-fronted with a programme of religious

services, songs and special lifts that stop atevery floor to prevent having to press any buttons (this counts as anti-Sabbathexertion).

Meat and dairy cannot be combined ina kosher kitchen, so separate meat anddairy restaurants are the norm in super-religious Jerusalem. The elegant MamillaCafé is dairy and we had some delicioussalads and cakes there – overlooking theMall from a flower-strewn terrace and

white-tiled tables. There are a few otherrestaurants in the hotel too – you cansnack at the rooftop and Mirror bars, dinein the Dining Room, and sneak a coffee atthe Espresso Bar. In short, you won’t gohungry at the Mamilla (or in Israel).

The intriguing thing about the Mamillais the way orthodoxy meets world-class

boutique elegance. It is a wonderful meet-ing of old and new. Designed by superstarIsraeli architect Moshe Safdie, light andspace and stone dominate all the central

areas, which are given life and colour withplush, expensive furniture. There’s a

swimming pool in the basement, too, which – though dark – is sensually attrac-tive with leaf designs on the dark blue

walls and dark wood decks.Our room was spacious and minimalist,

with half-moon shaped windows lookingout on the Mamilla Café and, beyond

that, the Old City. Israeli sparklingand red wine met us in the

room – and the earth-toned bathroom was delicious.

Not that we spent muchtime there – we had theOld City to see, sheeshasto smoke, the stunningly refurbished JewishMuseum to visit (newcom-ers to the city should see

the definitive HolocaustMuseum, Yad Vashem) and

bars to hit (there are numer-ous and busy hangouts on the

Mamilla’s doorstep).One of these bars was the hotel’s

own Mirror Bar, with a disco feeling, dark lights, plush seats, lots of glitter, a DJ

blasting chart hits and an enter-taining mix of orthodox Jews

on the pull; businessmen let-ting their hair down and – well, us.

The spa, Akasha,looked beautiful buthad yet to open on our

visit. Now open, all theMamilla needs is for thesnooty service at thefront desk – we were notmet with the efficiency nor the helpfulness suit-ing a hotel of this calibre –to be sorted out.

Jerusalem can already lay claim to having one of the world’smost stylish and interesting hotels. I hopethe rest of Israel follows suit.

From US$390 for a double room, incl breakfast (www.mamillahotel.com). In Tel Aviv, Zoe stayedat the Dan, which has double rooms starting at US$180, incl breakfast (www.danhotels.com). She flew with El Al, which operates twice daily f lights

from London-Tel Aviv (apart from Fridays) from £265 return. www.elal.co.il

GEEKSPEAK

Steve Dinneen

Boutique chic comes to Jerusalem

Nintendo leapsahead with 3DS

AFTER being surrounded by the latest in 3D technology for aweek at the Consumer Electronics Show in Las Vegas, thesight of two-dimensional images – a video of a puppy playing,for example, or a photograph of a friend’s newborn baby –

now makes me uncontrollably and violently sick. Watching standard2D TV is like peering through the analogue haze at the Queen’s coro-nation footage from 1952, while wearing a blindfold. I have even builta pyre in my garden, upon which I plan to throw my old Xbox 360 andPlayStation 3 games, casting the outdated technology to the flames

where it belongs.Thank the lord, then, that Nintendo is almost ready to launch its

much-hyped 3DS. The portable console will hit the UK on 25 March,after an embarrassing delay that resulted in the firm missing thelucrative Christmas market, and while they haven’t let me get myhands on one yet, what I have seen so far looks impressive.

I got a chance to play with some of the first portable glasses-free 3D gadgets at CES and the depth that even a small screen canachieve is astonishing. Judging by the demos Nintendo showed off last week, this translates nicely to its trademark cartoony games.

The dual-screen device is also packing motion and gyro sensors(although these clash with the 3D technology, which demands thedevice is held still, meaning you have to go into 2D mode to take advan-tage of them), and Nintendo has introduced its own version of the AppStore, allowing it to cash in on the trend for casual and retro games.

The Japanese firm has already unveiled a host of launchtitles, including new versions of Street Fighter and ProEvolution Soccer. So far so good. The catch is the £229price tag. Will gamers be willing to shell out such a hand-some sum for a portable device (more than a standardXbox360 console)? I doubt it. Expect prices to fall afterhardcore fans have finished flashing the cash.

One thing for sure is the new PlayStation Portable 2(PSP2), which is set to be unveiled sometime this week,has a lot to live up to. Sony has already confirmed it willnot feature a 3D screen, meaning it will either have to bevery powerful or very cheap to compete (the PSP hasalready struggled against the DS, selling just 18m units inthe US compared to Nintendo’s 47m).

With games on mobile phones advancing at a remarkablepace, this could well be the last great battle of the stand-alone portable consoles. Apple’s iPhone and iPod Touch are evolving into fully-fledgedgaming machines in their own right and Sony is set to launch its own PlayStationphone. But for now, clever money is on Nintendo to come out victorious.

WHITE BLACKBERRY TORCH/iPHONEAs Apple boss Steve Jobs – the man who drove a stake through theheart of the beige PC – knows too well, colour is important. And in themobile phone world, white is very much in this season. First up is a newversion of BlackBerry’s flagship Torch handset. The white 9800 will bemuch the same as its monochrome sibling, only brighter, presumably forpeople wanting to be noticed typing their incredible important emails onthe underground. Not to be outdone, Apple is set to respond with its veryown white version of its iPhone 4.

HYDRA (RAZER)High definition 3D screens are grabbing the headlines. But for gamers,three dimensions are becoming de rigueur off screen too. We got ourhands on Razer’s latest motion sensing controller, the Hydra. The unit fea-tures two separate hand-held devices which are tracked by an electro-magnetic field, doing away with the need for a motion sensing camera.This allows gamers to interact with the screen with incredible precisionand pull off seemingly complex moves with relative ease. For now, theHydra will only work with Valve’s upcoming title Portal 2 (which is outsoon on Xbox 360, PlayStation 3, and PC), but something this good willsurely be rolled out across other titles soon.

iPAD 2More than 80 tablets were unveiled at the Consumer Electronics showearlier this month but none managed to knock the iPad from its perch.Now the competition may just have got even tougher, with rumours thatthe latest version of the all-conquering device could hit stores as soon asnext month. The iPad 2 is expected to feature front and rear facing cam-eras and our money is on a more sophisticated multi-tasking system akinto that on the impressive BlackBerry Playbook. At the risk of going out

on a limb, we think this will be the gadget to own this year.

Above: the Mamilla’srooftop bar overlookingthe Old City. Left: partof the hotel’s highceilinged foyer. Below: abedroom.

8/7/2019 Cityam 2011-01-24


T E R

R E S T R I A L

SILENT WITNESSBBC1,9PM

Harry travels to Budapest to help hislover Anna Sandor investigate a death,but when she is killed, he finds himself implicated in her murder.

BAKING MADEEASYBBC2,8.30PM

Lorraine Pascale turns her attention tomodern classics, preparingmacaroniand cheese,Swiss roll and focaccia, aswellas sharing tipson food presentation.

HOME AND AWAYCHANNEL5, 6PM

Marilyn tries to say goodbye to thepeople of Summer Bay, and April’s planto get Liam and Bianca back togetheris thwarted by her mother’s arrival.

BBC1

SKY SPORTS 17pm Live Monday NightFootball 10.30pm The SkySports Years 11.30pmNetbusters 12am SPL Round-Up 12.30am Monday NightFootball 2.30amSportsUnlimited 3.30am WatersportsWorld4.30amMax Power5.30am-6am Netbusters

SKY SPORTS 27pmBass Fishing 8pmNFL

10pm Extreme Carp 10.30pmSoccer AM: The Best Bits11.30pm Bass Fishing12.30am European Tour Golf 1.30am PGA Tour Golf 2.30amWonderful World of Golf 4am-5amPGA Tour Classic

SKY SPORTS 37pmShow Jumping 8pmExtra Time 8.30pm WildSpirits 9pm Squash 10pmWWE: NXT 11pm WWE: LateNight – Bottom Line 12amWWE: Late Night – Afterburn

1amWWE: NXT 2am LiveWWE: Late Night – Raw4.15am-5.15am Squash

BRITISH EUROSPORT5.30pm Caribbean Twenty20Cricket 8.30pm AustralianOpen Tennis 11.30pmGame,Set and Mats 12am-6am LiveAustralian Open Tennis

ESPN6.30pmTalk of the Terrace8pmNHL 10pm Between TheLines 10.30pm Pardon theInterruption 11pm ESPN Gameof the Week 11.30pm FA CupPreview Show 12am LiveBasketball 2am Live Basketball4am ESPN Press Pass 4.30amBetween The Lines 5am-6amEuropean Rallycross

LIVING7pm Ghost Whisperer 8pmNikita 9pm America’s Next TopModel 10pm Four WeddingsUS 11pm CriminalMinds

12am CSI: Crime SceneInvestigation 2.50amCharmed 4.30am FourWeddings 5.20am-6am Maury

BBC THREE7pm Michel Roux’s Service8pm Hotter Than My Daughter8.30pm Snog, Marry, Avoid?9pm Laura Hall: My Battlewith Booze 10pm EastEnders10.30pm Being Human11.30pmFamily Guy 12.20amLaura Hall: My Battle withBooze 1.20am Hotter ThanMy Daughter 1.50am Snog,Marry, Avoid? 2.20am BeingHuman 3.20am Ready SteadyDrink 4.20am-5.20am MichelRoux’s Service

E47pm Hollyoaks 7.30pm Friends9pm Glee 10pm Tool Academy11.05pm Rude Tube 12.05amScrubs 1amRuPaul’s DragRace 1.50am Rude Tube2.45am Beauty and the Geek

3.25am The Loop 3.50am LifeUnexpected 4.30am-6amSwitched

HISTORY7pmHeir Hunters 8pmAmerica: The Story of the US9pm Pawn Stars 10pmAmerican Pickers 11pm TheTrue Story 12am Pawn Stars1amAmerican Pickers 2amAmerica’s Toughest Jobs 3amLife After People 5am-6amDeep Sea Detectives

DISCOVERY8pmHow Do They Do It?8.30pm How It’s Made 9pmAircrash Confidential 10pmOut of the Wreckage: PlaneCrash Survivors 11pmSurvivingthe Cut 12am BearGrylls: Born Survivor 1amDeadliest Catch 2amMystery Investigator: OllySteeds 3am How theUniverse Works 3.50amMore Industrial Revelations

4.40am Rory McGrath’s Bestof British Engineering 5.30am-6am How Does That Work?

DISCOVERY HOME &

HEALTH7pm A Baby Story 8pm 10Years Younger 9pm Real ER:The Bronx 10pm UntoldStories of the ER 11pmChicago Medical 12am RealER: The Bronx 1am UntoldStories of the ER 2am Chicago

Medical 3am 10 Years Younger4am BringingHome Baby5am-6am A Baby Story

SKY18pmRoad Wars 9pm DreamLives for Sale 10pm Mental11pm Inside: The Prison Code12am Road Wars 1.50amMiami SWAT 2.40am 99 MostBizarre: Weird and outlandishcrimes. 3.30am The 44004.20am Don’t Forget the Lyrics5.10am-6am Are You SmarterThan Your 10 Year Old?

BBC2 ITV1 CHANNEL4 CHANNEL5

S A T E L L I T E &

C A B L E

TVPICK6pm BBC News6.15pm BBC London News7pm The One Show7.30pm Inside Out: BBC News8pm EastEnders8.30pm Stop Stalking Me:Panorama9pmCHOICESilent Witness10pm BBC News

10.25pm Regional News10.35pm A Question of Sport11.05pm Late Kick Off 11.35pmThe Graham NortonShow: Weatherview12.25am Sign Zone: Giles andSue Live The Good Life1.25am Sign Zone: Ancient Worlds2.25am Sign Zone: Filthy RottenScoundrels 3.10am-6am BBC New

6pm Eggheads6.30pmGreat British RailwayJourneys7pmEscape to the Country: Twohoteliers look for a retirementhome in Leicestershire.8pmUniversity Challenge8.30pm CHOICE Baking MadeEasy

9pm Horizon: Science UnderAttack: Why public trust in keyscientifictheories seems tohave been eroded.10pm Episodes10.30pm Newsnight: Weather11.20pm An Island Parish11.50pm The Planets12.40am BBC News3.10am-6am Close

6pm London Tonight6.30pm ITV News7pm Emmerdale7.30pm Coronation Street8pmThe Lakes8.30pm Coronation Street9pm The Biggest Loser: Theremaining contestants have towork together as a team.

10pm ITV News at Ten10.30pm London News10.35pm The Zoo11.35pm That Sunday NightShow12.05am Grimefighters12.30am The Zone; ITV NewsHeadlines2.35am The Jeremy Kyle Show3.30am-5.30am ITV Nightscreen

6pm The Simpsons6.30pmHollyoaks7pm Channel4 News7.55pm 4thought.tv8pmBirth of Britain:How iceages have shaped modernBritain.9pm One Born Every Minute:A mother-to-be who was born

with a major heart defect goesinto labour.10pm Alan Carr: Chatty Man11.05pm The Joy of Teen Sex12.10am Premier League Poker1.10am Mosley 2.15am The Geniusof British Art 3.10am Titanic:The Mission 4.05am The UntoldBattle of Britain 5am ER5.45am-6.10am Yo Gabba Gabba!

6pmCHOICE Home and Away6.25pm Live from Studio Five7pm Five News at 77.30pm How Do They Do It?;Five News Update8pm Emergency Bikers: FiveNews Update9pmFILM Layer Cake: Thriller,starring Daniel Craig. 2004.

11.10pmFILM Death Wish 2:Thriller sequel, starring CharlesBronson. 1981.12.55am SuperCasino4.05am Rory and Paddy’s EvenGreater British Adventure4.55am Rough Guide to Beaches:Breaks in Thailand,Morocco andKenya 5.10am Wildlife SOS5.35am-6am House Doctor

13 5 6

35 23

45

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10 7

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16 12 13

21

11

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27

17

11

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15

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16

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14

6

20

12

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24

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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 digits 1-9

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 BREAKCopyright Puzzle Press Ltd, www.puzzlepress.co.uk

KAKURO

QUICK CROSSWORD

LAST ISSUE’SSOLUTIONS

KAKURO

WORDWHEELUsing only the letters in the Wordwheel, you have

ten minutes to find 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.

SUDOKU

Place the numbers from 1 to 9 in each empty cell so that each

row, each column and each 3x3 block c ontains all the numbers

from 1 to 9 to solve this tricky Sudoku puzzle.

SUDOKU

QUICK CROSSWORD

ACROSS

2 Entrance used by

perormers and othertheatre personnel (5,4)

6 Spokes (5)

7 Animal similar tothe girafe (5)

9 Diving bird o northern seas (3)

10 John ___, pioneeringUS astronaut (5)

12 Small heron (5)

14 Declares or armsas true (5)

17 Sun-dried brick (5)

19 The type o wind thatblows no good (3)

20 Despised (5)

21 Board used as aplanchette (5)

22 Employee who mixes and

serves alcoholic drinks (9)

DOWN

1 Section o

writing (9)2 Grasslike marsh

plant (5)

3 Relating tobirds (5)

4 Call orth (5)

5 Transmittinglive (2-3)

8 Lackinginormation (2,3,4)

11 Immediately (3)

13 Wander aimlesslyin search o pleasure (3)

15 Further romthe centre (5)

16 Move urtively (5)

17 Not silently (5)

18 Flexible twig o a

willow tree (5)

S

S

A

E

VI

P

I

M

B A N T A M M C

I U A R M A D A

L A T R I N E D P

L B I N C O M E

S I R O C C O N R

E T A W I N

T S P A N C A K E

W A P I T I E V

I I O R G A N Z A

R E T I R E G N

L E R H E S U S

5 2 1 6 8 9 5 7

8 5 6 7 3 9 4 1 2

9 8 2 1 4 3 1

7 1 9 4

3 8 2 3 6 2

1 4 2 7 6 3 2 1

8 6 9 6 9 5

7 4 9 3

2 8 3 9 8 4 2

4 9 3 2 8 5 6 7 1

3 5 2 1 4 9 8 7

WORDWHEELThe nine-letter word was

TURNSTILE

Lifestyle | TV& Games 25CITYA.M. 24 JANUARY 2011

8/7/2019 Cityam 2011-01-24


ENGLAND captain Andrew Straussinsists Matt Prior will remain at thetop of the order despite successiveducks as Australia moved 3-0 ahead inthe best of seven ODI series yesterday.

Test gloveman Prior was recalled tothe 50 over set-up last week, at theexpense of Steven Davies, following anear three-year absence, just in time

for World Cup selection.Prior has, however, failed to trouble

the scorers in each of his innings sincehis return to the side as England con-tinue to struggle to find the rightopening combination.

But after the comprehensive four- wicket defeat in Sydney, Straussremained adamant that Prior is theright man for the job.

He said: “I don’t think [it willchange] I think I will be opening withhim,” Strauss said. “We’ve got to givehim an opportunity to get used to the

role again. We’re still happy with hiscapabilities at the top of the order.”

BY JAMES GOLDMAN

CRICKET▲

Prior has been dismissed for two ducks in two innings Picture: ACTION IMAGES

Struggling Prior needs more timeto adapt to opening, says Strauss

Sport26

TOTTENHAM chairman Daniel Levy hasurged London 2012 legacy chiefs to ignore“emotive” rhetoric and focus on facts asthey prepare to decide between bids from

Spurs and West Ham for the OlympicStadium.

Levy spoke out yesterday as West Ham vice-chairman Karren Brady compared Tottenham’s proposals to bulldozing 100primary schools, and Lord Coe warned thatBritain’s international reputation would be“trashed” if Spurs were allowed to moveinto the venue after next year’s Games.

“Strip out the emotion, take a step back and ask what’s best for athletics,” saidLevy. “It’s surely to have a dedicat-ed facility that’s available all

year round rather than 20days a year.

“There are all these emo-tive words being used. Let’sdeal with fact rather thanemotion. This word‘promise’ that has been usedis such an emotive word.”

West Ham intend to retain therunning track if they move into the£537m stadium, thereby fulfilling thepromise of an athletics legacy for eastLondon made by Coe when he and his team

bid for the capital to host the Games.

Tottenham, who plan to demolishand rebuild the Olympic Stadium

without a track, propose todeliver the legacy by redevel-oping the run-down facilitiesat Crystal Palace instead.

Brady (below) criticised

her Premier League rivals’ambitions, saying: “It’s sucha crying shame that it [thestadium] has been built on the

back of a promise made in theQueen’s name, and is then goingto be pulled down.

“And Spurs’ bid frankly is equivalent to building 100 new primary schools and then bulldozing each and every one of them just

four weeks after they’ve been built. I just fundamentally don’t believe

in that.”Coe (above), who led the

delegation in Singapore six years ago that successfully argued for London to stagethe Games, said Britain had“a moral obligation” to

adhere to their bid mani-festo.“I just find it inconceivable

that grandparents are going totake children back to possibly a Premier

League football ground, amongst the tier of sponsorship boxes, and say, ‘Actually some-

where in all this lies dormant the memo-

ries of Usain Bolt or Jessica Ennis’.“It is the legacy we took toSingapore and I really think we

have to be very, very carefulabout how we are preparedto potentially trash ourinternational reputation

here.” The Olympic Park Legacy

Company is expected todecide between the two bid-

ders when its board meets onFriday and Levy responded: “I

don’t buy the argument of havingsomewhere to take your grandchild to rem-inisce on London 2012, what I buy is a dedi-cated facility which will always be thehome of athletics.”

United rebuff talk of £2bntakeover by Qatar Holding

Levy: Stadiumdecision must behead over heart

Ancelotti still trustsChelsea’s old guard

CHELSEA manager Carlo Ancelottiinsists the club’s older players are notpast their sell by date.

The champions’ recent poor formhas in part been attributed to a reluc-tance by Ancelotti to provide competi-tion his established stars.

Ahead of tonight’s testing trip toBolton, he said: “I think the playersremain motivated because when you win, the next desire after the victory is to win again. This was in my mindand in their mind.”

BLACKBURN moved up to seventh in

the Premier League after a 2-0 home win over relegation-haunted WestBrom at Ewood Park.

An own goal from Gabriel Tamasand a cracker from David Hoiletteither side of half-time sealed thepoints, but former England goalkeep-er Paul Robinson was the star of theshow with a string of fine saves.

Rovers manager Steve Kean said:“He was absolutely outstanding. He’sreally at the top of his game now.”

QPR boss Neil Warnock claimed Adel Taarabt is good enough for RealMadrid after a 2-1 win over Coventry.

“My son bought his mate just tosee Taarabt. He thinks he should beplaying for Real Madrid. He could,

but first of all he’s got to help me,”said Warnock, whose side are top of the Championshp by five points.

Blackburn boss Keanto praise Robinson

Warnock marvels atTaarabt masterclass

MANCHESTER UNITED insist the clubis not for sale and have denied sugges-tions that the Glazer family, whichowns the club, has held talks with aQatari consortium over a potential£2bn takeover.

Qatar Holding, the £40bn invest-ment company owned by the Gulf kingdom’s royal family, is thoughtto have had a £1.5bn offer for thePremier League leaders rebuffed

by the Glazers. The American family, led by

Malcolm Glazer (right), who bought United in 2005 for£790m but have grownunpopular with the club’sfans, are said to wantnearer £2bn.

A United spokesmansaid: “There has been noapproach of any kind to

buy the club and one wouldn’t be welcome

anyway because it is not for sale.” A spokesman for Qatar Holding,

which bought Harrods for £1.5bn last year and owns stakes in Barclays andthe London Stock Exchange, declinedto comment on a bid for United whencontacted yesterday by City A.M.

Rumours of Qatari interest inUnited, one of the most valu-

able brands in sport,emerged 12 months ago when the club visitedthe emirate for a mid-season sunshine break.

Speculation resur-faced in December as

Qatar announced its arrivalon the global football stage,

first by controversially win-ning the vote to stage the

2022 World Cup and then by agreeing a £125m shirtsponsorship deal withSpanish championsBarcelona, through its

non-profitable arm,the Qatar Foundation.

BY FRANK DALLERES

FOOTBALL▲

BY FRANKDALLERES

OLYMPIC STADIUM▲

FOOTBALL ROUND-UP

Crystal Palace plan to return to their original home which may impact onSpurs and West Ham Pictures: PA, REX

CITYA.M. 24 JANUARY 2011

Jan 2010 United visit Qatar for a sunshinetraining break, sparking speculation of interest

in the club from the mega-rich emirate

Nov 2010 Having previously derided Qatar as

“some unknown country”, United boss Sir

Alex Ferguson visits Qatar to speak, for free,

at a sport conference, where he endorses

their bid to host the 2022 World Cup

Nov 2010 Glazers pay off costly PIK loans,

fuelling rumours they’re preparing to sell

Nov 2010 The following day it emerges the

Glazers’ long-standing spokesman, Tehsin

Nayani, is to leave his post, with no plans to

recruit a replacement

Jan 2011 United chief exec David Gill, on a trip

to the Gulf, says Premier League clubs want a

winter break. Ferguson says he is in favour of

switching the season to the summer. It comes

amid talk of European leagues rearranging

calendars to aid a winter World Cup in Qatar

TIMELINE | QATAR AND MAN UTD

8/7/2019 Cityam 2011-01-24


TOP SEEDS Northampton will hostIrish province Ulster in the quarter-finals of the Heineken Cup.

The Saints, who won all six of theirgroup matches, will have homeadvantage if they reach the semis,

but may have to switch the venue of their last-eight tie away fromFranklin’s Gardens to a venue with a

capacity in excess of 15,000. Leicestertravel to face 2009 championsLeinster, Perpignan play Toulon andBiarritz host Toulouse in two all-French ties – the latter a repeat of last

year’s final.

Heineken Cup quarter-finals:N’hampton v Ulster

Leinster v LeicesterPerpignan v ToulonBiarritz v Toulouse* Ties to be played 8/9/10 April

Heineken Cup semi-finals:Leinster/Leicester v Biarritz/ToulouseN’hampton/Ulster v Perpignan/Toulon* Ties to be played 30 April/1 May

27CITYA.M. 24 JANUARY 2011

WASPS director of rugby Tony Hanksadmits his side have been left with asense of ‘what could’ve been’ afterthey crashed out of the Heineken Cupdespite a last-gasp win over reigningchampions Toulouse at Adams Park.

In front of a record home crowd

(10,014) at the Wycombe venue DavidLemi’s last-minute try secured adeserved victory, but hopes of pro-gression to the quarter-finals hadalready been dashed prior to kick-off

when news of pool leaders Leicester’s win over Perpignan filtered through.

Victory at least ensured Waspsqualified as top seeds for the quarter-finals of the Amlin Challenge Cup,

where they will travel to Harlequins, but it could not mask their sense of regret following last weeks surpriseand damaging defeat againstGlasgow.

“There will be plenty of times overthe next two months, particularly

when we see Toulouse play in thequarter-finals, when we will think ‘what could have been’ but we have tomove on,” Hanks said.

“At least we fronted up and theguys can look in the mirror and beproud of the performance.

“Everyone really hurt this week. The first few days [after the Glasgow defeat] were horrible but rather thanturn up today sulking about it, weattempted to repay our supporters.”

Lemi’s winner proves a mere consolation

as Wasps are left to regret Glasgow defeat

Results

email [email protected]

SIXTH seed Francesca Schiavonehailed “one of the most emotionalmoments of my life” after beatingSvetlana Kuznetsova to win thelongest women’s match in grandslam history at the Australia Open.

Schiavone beat Kuznetosova 6-4, 1-6, 16-14 in a contest that lasted fourhours and 44 minutes – 25 minutesmore than the previous longest inthe open era. It put the Italian intothe quarter-finals, where she

will face the top seed,Caroline Wozniacki.

“It is a fantasticmoment for me,” saidSchiavone, the FrenchOpen champion. “It isone of the most emo-tional moments of my life. I just toldmyself to keep going,

do it with the heart andgo for it.”

Elsewhere in Melbourne 2008champion Maria Saharapova suffered

a fourth-round defeat in straight setsto 30th seed Andrea Petkovic.Eighth seed Andy Roddick was the

major casualty in the men’s draw yes-terday, losing 6-3, 6-4, 6-4 to 19th seed

Stanislas Wawrinka. The comprehensive win

means Wawrinka will facecompatriot and defendingchampion Roger Federer inthe last eight – the first all-Swiss men’s grand slam

quarter-final in history.Second seed

Federer recoveredfrom a fright to beatSpain’s Tommy

Robredo 6-3, 3-6, 6-3,6-2. Novak Djokovic, thethird seed,

p r o g r e s s e d with a crushing 6-3,

6-4, 6-0 defeat of Nicolas Almagro.

Schiavone earnshistoric triumph

RFU warn Johnson:Top two Six Nationsfinish is a minimum

RFU chief executive John Steele has warned England manager Martin Johnson that anything other than atop two finish in the upcoming SixNations tournament would rank as a

major disappointment. Johnson’s side have progressed

well over the last year, postingimpressive back-to-back home andaway wins over Australia, and Steeleis keen for the side to lay down fur-ther markers ahead of September’s

World Cup.“Given we have three home games

and some momentum from theautumn we believe finishing in thetop two is realistic,” said Steele.“Third or below would be disappoint-ing given our current position.”

SPORT | IN BRIEF

Kaymer cruises to Abu Dhabi titleGOLF: Germany’s Martin Kaymer is upto No2 in the world after he won histhird Abu Dhabi title in four years byeight shots from Northen Ireland’s RoryMcIlroy. The 26-year-old leapfroggedTiger Woods in the rankings after finish-ing the tournament on 24-under par,having made just one bogey all week.Lee Westwood and Kaymer now occupy

the top two spots, meaning Europe canboast the best golfers on the planet forthe first time since 1993 when NickFaldo and Bernhard Langer ruled theroost. “Hopefully I can stay there for awhile,” said Kaymer. “It is definitely niceto take over from the player who, forme, is the best in the world.”

Hurricane Fly too good for SolwhitHORSE RACING: Hurricane Fly, the 4-9favourite, won the Irish ChampionHurdle at Leopardstown from Solwhit.The Paul Townend-ridden winnersecured his fourth victory over his oldrival. The 2010 winner Binocularremains 3-1 favourite for the ChampionHurdle, with Hurricane Fly about 7-2.

South Africa secure series winCRICKET: Hashim Amla struck an unde-feated century as South Africa secureda 3-2 series win over India thanks to a

33-run win on the Duckworth/Lewismethod in the fifth ODI in Centurion.

BY FRANK DALLERES

TENNIS▲

BY JAMES GOLDMAN

RUGBY UNION▲

Northampton land Ulster draw and it’s Leinster for Leicester

BY JAMES GOLDMAN

RUGBY UNION▲

21

16

WASPS

TOULOUSE

Lemi’s try sunkToulouse in front of a record homecrowd

Picture: GETTY

8/7/2019 Cityam 2011-01-24


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