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Violent clashes in Egyptput pressure on oil price

VIOLENCE erupted in Egypt yesterday as supporters of outgoing presidentHosni Mubarak turned on tens of thousands of pro-reform protesters.

Three people were killed and morethan 610 injured during bloody clash-es on the streets of Cairo, according

to official health ministry figures, asarmed Mubarak supporters stormed Tahrir Square, the hub of Egypt’slargely peaceful pro-democracy

protests over the past week.Mubarak rejected calls last night

from governments around the worldto step down immediately.

The unrest pushed oil prices higher yesterday, with Brent futures forMarch ending at $102.34 (£63.22) a barrel – the highest since mid-2008.

Ratings agency Moody’s downgrad-ed five Egyptian banks yesterday,

while Standard & Poor’s lowered its view on two.Cairo’s banks and stock exchange

are set to remain shut today.

Pro and anti Hosni Mubarak protesters clashed across Egypt yesterday Picture: REUTERSLEADING City investment manage-ment and stockbroking groups were yesterday in open revolt about plansfor them to pay £233m to a controver-sial compensation fund after the col-lapse of the financial products sellerKeydata.

There was a growing feeling lastnight that prudent firms – from tiny blue-blooded Mayfair fund managersto giants such as BlackRock – were being unfairly hammered for the sinsof a few, entirely unrelated players in very different financial industries.

The Association of Private ClientInvestment Managers (Apcims), whose 180 members include JPMorgan Cazenove as well as Evolutionand Brewin Dolphin, called a meetingto discuss the possibility of refusingto pay into the Financial ServicesCompensation Fund (FSCS).

One source said: “Some members

are appalled at being called upon tofund this bailout. They feel they havenothing to do with the type of firmthat got into trouble.”

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Sources also said that theInvestment Management Association(IMA), whose members manage £3.4trillion, is considering challengingthe decision to levy its members inthe courts. Its members include firmssuch as Aberdeen Asset Management, Aviva and Odey Asset Management.

One source said that the IMA, which feels there are issues relatingto who else should contributetowards the cost of Keydata, will takea cold-hearted decision as to whetherto challenge the compensation levy through a judicial review. The IMA has engaged lawyers on the issue inrecent weeks and many of its member firms have done the same.

“In the end the decision will rest ona fairly cold assessment of thechances of winning a court battle,”said one IMA adviser. “There has beenno decision yet as to whether to goahead.” Those interested in disputingthe levy were last night told that theIMA was “looking at challenging the

payment on behalf of the investmentmanagement industry”.One source said that even if the

IMA didn’t decide to adopt a legal

challenge, there was no reason why some of its members might not godown that route.

Of the total levy of around £450mnow being raised by the FSCS, £93m will come from financial advisers and£233m will come from fund manage-ment firms. A previous interim levy of £80m was raised from intermedi-aries in early 2010. Under the rules of the scheme, there is a maximum£100m that can be called upon fromintermediaries after which moniescan be called upon from stockbrokersand investment managers.

A spokesman for the FSCS acknowl-edged that the current compensationsystem might need an overhaul. “We want to find a system that everybody supports.”

Liontrust Asset Management yes-terday revealed it was hit with a£415,000 bill, up from £20,000.Rathbones has paid £3.6m, BrewinDolphin £6.2m, Brooks Macdonald£545,000, Charles Stanley £2.6m, IG

£4m and Evolution £1.4m. The BritishInsurance Brokers’ Association (BIBA)has warned that its members face a50 per cent hike in levies.

BY MARION DAKERS

WORLD ECONOMY▲

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BUNDESBANK governor Axel Weberhas ramped up his campaign to

become the next governor of theEuropean Central Bank, with a propos-al for a Eurozone government-runclearing house forming a major plank of his platform, City A.M. can reveal.

Weber told a closed-door gatheringin Davos that he plans to advocate thecreation of a public clearing house fortrading over-the-counter (OTC) deriva-

tives, instruments such as collater-alised debt obligations (CDOs) andinterest rate swaps.

Weber is the front-running candi-date to replace current ECB president

Jean-Claude Trichet, who will retire inOctober. The decision rests withEurozone ministers and observers say the clearing house proposal could win

Weber a raft of support.“It will strike a chord with Eurozone

countries,” said Anthony Belchambers,chief executive of the Futures and

Options Association, an industry group. He added: “The ECB is notably trying to have a much more significantrole in the regulation of clearing hous-es. It is very keen to see itself as part of a European college of regulators.”

The creation of a public clearinghouse would go much further thanthe current proposals to overhaul OTCderivatives trading, which involve forc-ing more trades and disclosuresthrough central, regulated houses.

It is not known if Weber supportsrunning a public clearing house in

competition with private houses or asa replacement, but it would mean theEurozone’s regulators taking on a slew of counterparty risk in the trade of complex financial products worth tril-lions of euros.

“It would raise all sorts of ques-tions... Some feel that using regulatory mandates to change the shape of mar-kets is quite a dangerous game,” saysBelchambers. “And what happens toexisting clearing houses?” TheBundesbank refused to comment.

Weber plotsstate clearinghouse for ECB

NewsCITYA.M. 3 FEBRUARY 2011 3

BY JULIET SAMUEL

EXCLUSIVE▲

Citi may break up EMIBank “owes it to shareholders” to mull splitting firm, say sources

CITIGROUP executives are consider-ing plans to break up iconic recordlabel EMI, despite its chief execu-tive’s wish to keep it whole, sourcestold City A.M. yesterday.

The bank, which has taken EMIout of private equity hands afterdeclaring its £3.4bn debt unsustain-able, will not fight to keep the com-pany in one piece if buyers fordifferent parts come forward,sources said.

This runs counter to protesta-tions by EMI’s chief executiveRoger Faxon (below), whotold employees its recordedmusic and music publish-ing arms should stay unit-ed.

Sources close to Citi toldCity A.M. that while Faxon

was a valued stakeholderand his position

was clear, the bank “owed itto sharehold-ers to considerall theoptions.”

But Faxon defendedEMI’s unified model yes-terday. “Global rightsmanagement is thefuture, and it takes

both parts of the business workingtogether to achievethat future,” he saidin an email.

Private equity house KKR, owner of music rights manage-

ment company BMG, is cur-rent frontrunner to buy EMI,followed by EMI’s long-termsuitor Warner Music.

But there is no shortage of interest in its parts, and Citi iskeen to start to recoup some of

the £2.2bn loss it has incurredon EMI.

Industry giants

such as UniversalMusic, the world’s largestrecord labelowner and musicpublisher, wouldsnap up EMI’srecorded musicc a t a l o g u e , which includeartists such as The Beatles and

Kylie Minogue (top). Sourcesclose to Universal Musictold City A.M. that while

it was barred from bid-ding for EMI for com-petition reasons,“parts of it would beattractive” in a break-up. “Universal may

well be interested insome of the parts if they

were to become avail-able,” one source said.

BMG, which has expressedinterest in buying Warner’s musicpublishing arm Warner/Chappell,may prefer EMI’s music publishing

business instead. “That may be mar-ginally more attractive to it than

Warner/Chappell,” sources said. Jon Moulton, founder of Better

Capital, placed odds of two to oneon EMI being broken up. “I think

Citi would take cash for anything itcould,” he said.

But Impala, the European lobby group for independent recordlabels, yesterday threatened to cam-paign against any plan to merge EMI

with a competitor, saying it wouldlead to too much “concentration” inthe industry. The group managed totie up Sony Music and BMG’s even-tual merger in 2004 for three yearsin the courts.

EMI boss Roger Faxonsaid the firm must stay together, but new owners Citigroup arenot so sure

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JD SPORTS is in talks to buy troubledretailer JJB Sports, sending shares inthe Wigan-based firm soaring 17 percent.

The news comes as JJB confirmed it will raise £31.5m from shareholdersthrough the placement of 630m new shares, with sources close to the firm

warning it may need further help within weeks.

The placing of the new shares willprovide a cash injection of £30m afterfees, which the firm says will buy ittime to complete a revised businessplan, settle some of its outstandingdebt and allow it to remain trading –for the time being.

Harris Associates and Crystal Amber – JJB’s two largest sharehold-ers – have said they will both supportthe action, as will Invesco Perpetual,the Bill & Melinda Gates Foundationand GoldenPeaks Capital.

Harris Associates and Crystal Amber will be granted the right to

nominate a non-executive director tothe board.

The firm’s lender, Bank of Scotland, has already agreed to givethe firm leeway in regards to its exist-ing debt facilities.

With JJB having lost 79 per cent of its pre-speculation value in the last

year, the takeover talks will be seen by some investors as a light at the end of the tunnel.

Both firms said the talks are “high-ly preliminary” and both declined todiscuss valuations. One source closeto the talks told City A.M. “JD is drivingthis bus, JJB will just have to see if itarrives.”

Analysts pointed to the obvioussynergies a merged entity couldachieve, with head-office integrationand greater bargaining power withsuppliers among them.

JD, which has 500 stores, has refo-cused its attention on the “fashion”end of the sportswear market, with

JJB a more direct competitor withMike Ashley’s Sports Direct. Ashley owns an 11.9 per cent stake in JD.

JD in talks to

buy troubledretailer JJB

BP’s Russian ally snubs TNK

A SENIOR executive at BP’s newestRussian partner Rosneft said yester-

day that TNK-BP is not big enough to join its Arctic exploration efforts.“They have neither the technology,

nor the experience, nor the person-nel,” Rosneft chief financial officerPeter O’Brien said of TNK-BP, which isowned by BP and Russian billionairesunder the name AAR.

The comments risk inflaming a dis-pute between BP and AAR, which is

set to go to arbitration in Sweden thismonth.

“Anything is possible but in reality I do not see a resolution before thestart of the arbitration process,”

O’Brien said. AAR has already managed to winan injunction suspending BP’s land-mark share-swap with state-ownedRosneft, after it argued that TNK-BPhas been unfairly left out of the

Arctic-focused deal. AAR’s spokesperson was unavail-

able for comment yesterday, while BPdeclined to comment on O’Brien’s

remarks. Chief executive Bob Dudley said this week that he hopes for aspeedy resolution to the spat.

Meanwhile, BP admitted that USregulators are considering filing

charges linked to the firm’s allegedmanipulation of the gas market in2008.

BP said in a statement it has co-operated with two separate US com-mission probes started last year,adding that “it did not engage in any inappropriate or unlawful activity”.

BP shares dipped 0.6 per cent to488p yesterday.

BY STEVE DINNEEN

RETAIL▲

BYMARION DAKERS

ENERGY▲

News 5CITYA.M. 3 FEBRUARY 2011

JD chief executive Peter Cowgill is in talks over a possible acquisition of JJB

8 June 2007Former owner Dave Whelan sells hisresidual 29 per cent stake in the firmfor £190m to Icelandic financialgroup Exista and Chris Ronnie.

October 2008JJB’s shares fall to a tenth of theirvalue after Whelan’s share sale.

10 February 2009JJB, unable to find a buyer, putsboth Qubefootwear and OriginalShoe Company into administration.

9 December 2009JD Sports sells its 10 per cent stakein JJB for £16.3m, unwinding part of the complex web of cross-sharehold-ings in the sports retail industry.

26 January 2011JJB is fined £445,000 by the finan-cial regulator for misleading themarket by understating the cost of two acquisitions. JJB said in 2007 ithad bought Original Shoe Companyfor £5m but failed to disclose at thetime it also paid more than £10m forin-store stock. A year later, the groupsaid it bought Qubefootwear for £1but failed to mention it had also set-tled Qube’s £6.47m overdraft.

2 February 2011JJB confirms it will raise £31.5mthrough the placement of newshares. The scheme is backed by itsmajor shareholders.

JJB | THE FALTERING PATH OFTHE SPORTSWEAR RETAILER

MELANIE Gee is advising JJB forLazard. She joined the firm as a man-aging director in its UK investmentbanking business from UBS, where shewas a managing director and seniorrelationship banker.

She has advised on a number of major transactions, including the saleof BAA to a consortium led by GruppoFerrovial, the sale of Exel to DeutschePost, the Irish government on the pri-

MELANIE GEE

LAZARD

SMALLER financial firms are growingfaster than the bigger banks since therecession and now employ more than350,000 people in the UK, according toresearch seen by City A.M.

FSA-registered finance firms withfewer than 250 staff now employ around 45 per cent of the market upfrom 43 per cent in 2007, says aresearch paper released today by the

New City Initiative, a group of inde-pendent asset management firms.

The research, based on FSA figures,also shows that smaller financegroups hired more women after 2007,though the gender ratio of 87 to 14 percent still lags behind the larger banks.

Mark Hoban MP, financial secretary to the Treasury, said the report “is animportant reminder that the City of London is so much more than just the

big banks”.

Smaller finance firms arecreating more City jobsBANKING

▲

vatisation of Aer Lingus and the saleof Christian Salvesen to NorbertDentressangle.

She began her investment-bankingcareer in 1982 at SG Warburg inLondon, which ultimately became partof UBS. She was named managingdirector in 1999.

She has worked across a broadrange of industries and geographies,and was formerly joint global head of UBS’ transport sector.

In addition she was responsible forsetting up its mid market group, andestablishing a corporate finance capa-bility for UBS private bank.

Gee earned an MA in mathematicsfrom Somerville College, Oxford.

Also advising for Lazard is CharlieForeman.

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THE coalition must protect confidencein the UK by delivering a reduction inthe deficit, the respected Institute forFiscal Studies (IFS) said yesterday.

Loosening fiscal policy “risks under-mining investor confidence,” thethinktank warned in its green budget.

“Having set out his fiscal consolida-tion plan, it is important that chancel-lor Osborne resist the temptation toengage in any significant net giveaway in the budget,” the IFS said.

Forecasting that Osborne would

beat his deficit target for this financial year by £2.9bn, the IFS said he should“bank” any shortfall in borrowing toguard against shocks to the economy.

Slower growth in the economy would see the government still draw-ing an annual public deficit of 0.4 percent of GDP in 2015-16, it said. SimonHayes of Barclays Capital, who con-

tributed to the report, says the recovery will be more sluggish than the govern-ment expects.

The report expects a deficit of£145.6bn for 2010-11: “The large govern-ment deficit and high reliance on debtare sources of vulnerability,” it warns.

“Past calm is no guarantee of futurestability,” Hayes added, citing a suddenloss of confidence in Spain from May last year. Yet the consolidation plansoothed concerns for the UK.

“Financial markets seem to havereacted positively to the plan,” he said.“The interest rate differential betweenUK and German government bonds

has declined since the general election,in contrast to Spain.”Labour pounced on the report’s sug-

gestion that the chancellor may haveto adapt cuts to respond to unexpectedeconomic developments. “It’s time thechancellor got himself a plan B,” shad-ow treasury secretary Angela Eaglesaid.

IFS: Osbornemust stick to

austerity cutsBY JULIAN HARRIS

UK ECONOMY▲

BRITISH construction bounced back in January, after a snow-hit slump inDecember, according to data released

yesterday. The sector’s performance exceeded

the forecasts of economists, by jump-ing to 53.7 in the purchasing man-agers’ index (PMI) conducted by Markit and the Chartered Institute of Purchasing & Supply (CIPS).

In December the industry hadrecorded 49.1, indicating a contrac-tion. All figures above 50 signal eco-nomic growth.

“An improvement in weather con-ditions at the start of the year helpedto boost construction work, whilethere were also gains in new busi-ness,” the report said.

New orders increased to 52.5, itsfastest rate of growth since July last

year.“Today’s figures point to a solid, if

not spectacular, improvement in con-struction activity, perhaps not sur-prising following the weatherdisruption last month,” concludedFrancois Cabau of Barclays Capital.

However, employment was stilldown in construction, at 47.5,although the rate of decline was slow-er than in the previous four months.

Input costs faced by constructioncompanies rose at the fastest ratesince May 2010, driven up by inflationin raw material prices.

British building sector picksup after the December freezeBY JULIAN HARRIS

UK ECONOMY▲

Economics6 CITYA.M. 3 FEBRUARY 2011

CYCLONE YASI BATTERS AUSTRALIA

ANALYSIS l Spanish confidence crisis -- interest rate spreads over German government bonds

1

0

2

3

Mar - 10 Jan - 11Jan - 10 Nov - 10Sep - 10Jul - 10May - 10

percentagepoints

Source: Barclays Capital

UK Spain

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Economics 7CITYA.M. 3 FEBRUARY 2011

CYCLONE Yasi slammed into thenorth east coast of Australia lastnight, hitting the city of Cairns atabout midnight, causing mass devas-tation and the closure of coal minesand a huge copper refinery in thearea.

Copper prices jumped to a recordhigh of nearly $10,000 (£6,171) atonne yesterday, fuelled by tight sup-plies and optimism over growingdemand.

Any further disruptions to supply would add pressure to the price,although Harry Colvin of Longview

Economics warned against hysteria.“Australia only accounts for around

five per cent of the copper supply,” hesaid. “Sentiment is really high at themoment, so price fluctuations aremainly just the ebb and flow caused

by demand and risk appetite.”

However, the storm saw BHPBilliton close two of its coalmines inthe area with an annual capacity of more than six million tonnes.

Australia has already seen its coaland food industries hammered by severe floods this year, and its sugarcrop is likely to be the biggest casual-ty from the cyclone.

Queensland accounts for almost allraw sugar shipments from Australia,the world’s third-largest exporter.

“Certainly what happens in Australia will affect prices in the glob-al market,” a sugar dealer in Bangkok said. Queensland’s Canegrowers esti-mated yesterday that industry lossescould exceed A$500m (£311.5m),

including possible cyclone damage toinfrastructure. The category fivecyclone, which could be the mostpowerful tropical storms to hit thecoast since records began, has

brought 185 mile-per-hour winds anda tidal surge of up to seven metres.

Mines closed asCyclone Yasi tears

into NE Australia

STERLING jumped to a three-monthhigh against the dollar yesterday,after markets reacted to hawkishcomments from Bank of England ratesetters Andrew Sentance and CharlesBean.

In an exclusive interview in City A.M. yesterday, Sentance suggestedthat the Bank’s monetary policy com-mittee (MPC) was getting closer to arise in interest rates as inflationincreasingly threatens its credibility.

And the Bank’s deputy governorCharles Bean also hinted of a movetowards a tightening of policy.

The pound hit $1.623 following the

news, before ending the day on$1.617.

“The British pound received aslight boost this morning after

Andrew Sentence, the long standinghawk among the MPC,reiterated his stance thatinterest rates need to beraised now or risk hav-ing to make largeradjustments down theline,” said DuncanHiggins at Caxton Fx.

And if global com-modity prices stay high in the mediumrun, the Bank may

be forced to act,

Bean admitted.“We may well have to respond to

that by keeping domestically-generat-ed inflation lower,” he said.

Both Sentance and Bean cited thesevere winter weather for an appar-

ent contraction in the UK economy at the endof 2010, suggestingthe negative results

would not rule out ahike in rates.

In May Sentanceends his term on theMPC, with the

Treasury set to decide who will replace himon the committee.

Pound jumps as City A.M. reveals moremomentum behind rise in interest rates

BY JULIAN HARRIS

WORLD ECONOMY▲

UK ECONOMY▲

NEWS | IN BRIEF

Wealthy to increase spendingHigh earners are determined to spendtheir way out of recession, a report byHSBC suggests. Spending by peopleearning over £100,000 per annum isexpected to increase by 7.8 per cent thisyear. Overall spending for this group willincrease to £87,380. Spending on one-

off purchases will fall by 25 per cent forthe £100,000-£150,000 bracket. Yetthis group still spends on average over£10,000 a year on one-offs. Areas of increased spending include transportand travel, and home improvements.Affluent consumers are expected tospend an average of £13,946 improvingtheir homes.

Cost pressures up in EurozoneProducer prices across the Eurozonerose by 0.8 per cent in December, com-pared to November. The rise was aboveexpectations, and increased the year-on-year inflation rate to 5.3 per cent.

Jobs boost in AmericaPrivate sector employment increased by187,000 in the US last month, accordingto a survey released yesterday. The ADPmeasure, described as “the least worstof the monthly payrolls indicators” by

ING’s Rob Carnell, also showed a strongrise of 247,000 the previous month.

Most pensioner jobs are part timeTwo thirds of employed pensioners areonly working part time, the Office forNational Statistics revealed yesterday.

Queensland’s coast was battered bythe category fivecyclone yesterday

Vicky PryceWith no women currently on the committee, there is pressurefrom some circles to use Sentance’s departure to address thegender balance. Sentance wishes to be replaced by a memberwith business experience, and Pryce has it in abundance, havingheld senior positions at Exxon, KPMG, Williams & Glyn’s Bank,and now finance consultancy FTI.

MPC HOPEFULS | SOME LEADING CANDIDATES TO REPLACE SENTANCE

John MuellbauerrWith most of the Bank’s rate setters sitting on the fence by vot-

ing “ no change” month after month, opinionated professorMuellbauerr would certainly liven up proceedings. Muellbauerrrecently attacked Labour’s “host of bureaucratic interventions”

that resulted in a “failed” housing policy. An appliedmacroeconomist, he is currently a professor at Oxford university.

John LlewellynLlewellyn spent almost a decade on the other side of the“Oxbridge” rivalry at Cambridge university, as well as 17 years atthe Organisation for Economic Co-operation and Development.He also satisfies Sentance’s criterion for business experience,having worked at Lehman Brothers for 14 years, and now runshis own consultancy.

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THE “sheer scale and pace” of regula-tory change in Europe could damageBritain’s financial services industry, agroup of influential MPs will warntoday.

In a report on financial regulation,the Treasury select committee said it

was “concerned” about the “ambi-tious legislative programme takingplace at the European level”.

The MPs dismissed claims fromMichel Barnier, the EU internal mar-kets commissioner, who said he wassimply taking his lead from the G20.

Barnier supplied the committee with a list of 39 EU initiatives, but theMPs found that only 14 of the propos-als were directly related to the G20agenda.

The MPs also expressed alarm thatBritain was under-represented on theEU’s three new “super-regulators”,

which will regulate banking, theinsurance and pensions industry, andmarkets.

“It is important that the UK, with aparticularly large share of the finan-cial services activity of the EU, securesappropriate representation on the EUregulatory bodies,” the MPs said inthe report.

However, career policymakers fromPortugal, Italy and the Netherlandshave been appointed to run the bod-ies.

And the Treasury select commit-tee’s report warned that politicalpressure could lead to “inappropriateregulation that will not only damagethe UK, but the EU as a whole.”

Meanwhile, the report warned theBritish government not to rush itsplans to scrap the discredited tri-par-tite system of financial regulation.

The government has said it will dis- band the FSA and hand its macro-pru-dential regulation powers to a unit of the Bank of England by 2012.

“The committee is concernedabout the risks involved in such anambitious timetable and the reportunderlines the importance of gettingreform right,” the MPs said.

MPs: Europe

power grabcould hurt UKBYDAVID CROW

POLITICS▲

Politics 9CITYA.M. 3 FEBRUARY 2011

WHEN Martin Wheatley announced his departure from theHong Kong Securities and FuturesCommission (SFC) he received anominous send-off. Locals, angered

by his ultimate responsibility forregulating loss-making Lehmanmini-bonds, gathered outside the

watchdog’s offices to play tradi-tional Chinese funeral

music while they burned pictures

of Wheatley.It appears

their predictionof his demise waspremature; yes-terday, Wheatley

was named as theinaugural head of

the ConsumerProtection and

Mar ket s

Authority (CPMA).Once the CPMA is spun out of

existing the FSA – which is beingchopped – it will serve as the mainregulator for Britain’s securitiesmarkets, as well as overseeing how financial firms treat their cus-tomers. In the interim, he will

become managing director of theFSA’s Consumer and MarketsBusiness Unit.

Despite the protests that accom-panied his departure, Wheatley’sstint at the SFC was marked by sev-eral successes, including a raft of insider dealing cases that saw ex-Morgan Stanley boss Du Jun jailedfor seven years.

He joined the SFC in 2005 fromthe LSE, where he was deputy chief executive. He had been in the run-ning for the top job in 2001 but lostout to Dame Clara Furse (who wason the panel that recommended

Wheatley to the chancellor). The news will be galling for the

FSA’s director of enforcementMargaret Cole, who was seen as thefront running internal candidate. Itcomes on the same day that herteam at the FSA secured a record jailterm for insider dealing. FSA: P12

BYDAVID CROW

PROFILE▲

Martin Wheatleywins top job at new

City watchdog CPMA

MARTIN WHEATLEY

A POLITICAL row erupted yesterday following US drug giant Pfizer’sdecision to close its primary Britishresearch centre, in a embarrassingtwist for the coalition government.

Prime Minister David Cameronpromised last month to boostinvestment in pharmaceuticals

with a raft of policies including atax break on profits derived frompatents.

Yet yesterday he was forced toadmit the closure of the US pharma-ceutical firm’s Kent research anddevelopment base was “bad news”.

Shadow business secretary JohnDenham blamed the closure –

which will results in the loss of2,400 high value research jobs – onthe government’s failure to back high-tech industries.

Speaking in a Commons debateDenham said: “The truth is that thePrime Minister has been snubbed,the government and the businessdepartment just weren’t even play-ers in this huge decision.”

Yet business secretary Vince Cabledefended the government’s role andannounced plans for a task force tomitigate the impact of the loss of

jobs in the local area.

Row eruptsafter Pfizer

axes UK jobsPHARMACEUTICAL▲

FACT CHECKER |WITHDAVID CROW

THE CLAIM: THE COALITION GOVERNMENT ISCUTTING PUBLIC SPENDING THIS YEAR BY JUST£2BN LESS THAN LABOUR PLANNED TO

A

S the coalition gets ready toswing the axe on public

services, it is busy reminding votersthat Labour also plannedto make big cuts if it wonthe election.

George Osborne (right)claims that AlistairDarling (far right) plannedto cut public spending by just

£2bn less in 2011-12 than the coali-tion is doing.

It appears that the chan-cellor wants to have hiscake and eat it. He consis-tently says that Labour’scuts were too unambi-tious but now suggests

that the coalition’s aren’tmuch more severe.But a billion pounds here

or there makes little difference to the bond markets. So how can Osbornemake such a claim?

In one sense, Osborne is right. According to the March 2010 Budget,Darling planned around £14bn of cutsin 2011-12. Adjusting for an extra £2bnof capital spending, announced in the

coalition’s first spending review, thecurrent government will make cuts of £16bn in 2011-12 –meaning the differ-ence is £2bn.

However, Labour wouldn’t havemade any cuts in 2010-11, whereas thecoalition made cuts of £5.2bn.

So by the end of 2011-12, Labour would have cut spending by £14bn,

THE VERDICT |

while the coalition’s cuts will be £21bn, a differenceof £7bn. And over the par-liament, the coalition is

cutting spending by £83bn against Labourplans for £52bn of cuts –a difference of £31bn.

Osborne can technically claim thathe is cutting spending by just £2bnless than Labour in 2011-12, althoughhe is being slightly disingenuous.Overall, Labour’s spending cuts aremuch less severe than the coalition’s.

In truth, the whole debate is some- what flawed, because total managedexpenditure (TME) – which includes

debt repayments – will continue torise in cash terms over the entire par-liament.

In real-terms, the cuts to TME are very small: 1.54 per cent in 2011-12;0.39 per cent in 2012-13; and 0.44 percent in 2013-14. In the last year of theparliament (2014-15) TME will actual-ly rise slightly, by 0.14 per cent.

8/7/2019 Cityam 2011-02-03 book


News10 CITYA.M. 3 FEBRUARY 2011

Europe

one way from

49£including taxes

INTERDEALER broker Icap, run by for-mer Tory party treasurer MichaelSpencer, said yesterday that the paceof growth in its post-trade unit, anarea in which it has invested heavily in recent years, was not yet meetingits medium-term targets.

Despite confirmation that it stillexpects to hit its profit guidance of £333-357m for the year ending 31March, the news saw ICAP shares slip0.6 per cent to 545p.

Analyst at Panmure Gordon, Vivek Raja said: “My reading is that man-agement are uncomfortable withanalysts who have upgraded beyondtheir guidance.

“Icap’s statements are typically pos-itive. There’s more of an element of caution than investors are used to see-ing.”

The largest interdealer money bro-ker in the world also raised concernamong investors over its post-trade

business, one of the more highly

rated earnings streams within thegroup, after it said the unit was not

yet meeting its medium-term targets.Icap, which has invested heavily in

its post-trade business in recent years,said: “Post-trade risk and informationcontinues to grow revenues, but thepace of growth is below what weexpect in the medium term.”

Analysts at Shore Capital said:“(This) may be viewed as a disap-pointment given the importanceattached to post trade services in thegroup’s strategy”.

Icap’s cautionsees investorsbecome wary EMBATTLED asset manager Liontrust

showed a hint of revival yesterday,revealing that it pulled in £108m of new client money in the five monthsto 1 February.

Assets under management (AUM)at the company also grew 15.9 percent to £1.3bn during the period,reflecting £76m of net sales in thethree months to 1 December and afurther £32m of new business in thefirst month of 2011.

The gradual return to strength forLiontrust comes after two difficult

years, when two star managerresponsible for 90 per cent of the com-pany’s then £3.4bn AUM departed.

Jeremy Lang and William Pattison walked out in January 2009, whichled to continual net outflows at theasset manager until September last

year. Liontrust said it was confidentthe recovery would continue, boosted

by the long-term performancprospects for its funds following aperiod of restructuring.

Chief executive John Ions said:“Liontrust has made significantprogress over the last year. Therestructuring of the business, the rais-ing of the profile and the continuedstrong fund performance have beenthe foundations of this success.

“The outlook remains positive.”

Liontrust stemsoutflows withrevived inflow

Shares slipped at ex-Tory treasurer Michael Spencer’s firm. Picture: Micha Theiner/ CITY A.M BYRICHARD PARTINGTON

FINANCIAL SERVICES▲

ASSET MANAGEMENT▲

ANALYSIS l ICAP

480

520

560

26 Nov 16 Dec 10 Jan 28 Jan8 Nov

p

545.002 Feb

No magic rabbit for SpencerICAP’s interim update was solidenough – pre-tax profits for the year

will be within the £333-£357m range italready announced some eightmonths ago and revenue for the third

quarter was up nine per cent.But chairman Michael Spencer’s

statement was couched cautiously,highlighting the interdealer broker’simprovement from “volatility in finan-cial markets”.

A disappointment for investors, whohoped Spencer may pull a rabbit out of the hat, but a realistic acknowledge-ment that it’s largely not managementthat will determine how Icap will per-form, but wider macro events. Its pure

scale – it is the largest interdealer bro-ker by some distance – means that it

will perform the best when market cir-cumstances enable it to do so.

Investors, however, appear to have

forgotten this. Its shares have surged 30per cent in just six months – reflectingthe pick up in market activity. They now trade at 14.1 times March 2011earnings – a deserved premium to thesector. Chasing the shares higher, how-ever, would be an unwise gamble on

where the economy is going in 2011.

BOTTOMLINEAnalysis by Katie Hope

8/7/2019 Cityam 2011-02-03 book


WITH Apprentice Week kicking off on Monday, readers should be wiseto a special charity sale going onnext week as City A.M. gives some

bright young thing a two-week internship to kickstart their business

journalism career. The auction is taking place at the

Square Mile Salute, a charity ban-quet supported by City A.M. nextFriday in aid of three troops’ chari-ties: Help for Heroes, the RoyalBritish Legion and ABF (formerly the

Army Benevolent Fund) The Soldiers’

Charity. The food will be prepared by 12

world-class chefs over numerouscourses, with William Curley, win-ner of the best British chocolatieraward in 2007-2009, serving delec-table treats. Boris Johnson will kick off the evening and Jeremy Clarkson

will be assisting the auction, with arange of City firms already signed upto host tables.

And for those without a budding young journalist in the family, thecharity auction will also feature atwo-day stay at the Fairmont MonteCarlo during the Grand Prix and aholiday on Sir Richard Branson’sNecker Island. The good news is youcan still snap up one of the lasttables for a £3,500 donation to ourtroops. Visit www.chamberlain-soflondon.com to book one.

SLOPING OFF

A team of intrepid lawyersfrom City law firm NortonRose risked frostbite, alti-tude sickness and worst of

all, the loss of Blackberry signal last week, whenthey took on a 150kmski hike through theFrench Alps.

Twelve lawyers joined a group of skiers on thee x c u r s i o n ,

w h i c hspanned 15r e s o r t sclose toMorzinea n di n c l u d e dnight hikes tocomplete the distance

within the 48-hour dead-line.

The gruelling challenge was all in the name of charity of course, with

sponsorship raised goingto the London arm of

Snow-Camp – a youth charity thatprovides ski, snowboard and life-skills lessons to young people from12 London boroughs.

The skiers taking to the slopes atthe World Economic Forum in Davoslast week, on the other hand, can’tquite boast such a generous cause.

CHANGE OF ADDRESSEven as David Cameron made thesurprise appointment of Craig Oliverto handle his press operation, it

seems that special newspaper deliv-eries to the old Downing Street

comms director Andy Coulson arestill piling up on the threshold of Number 10.

Drowning under the weight of theavid media consumer and ex-News of the World editor’s many regulardeliveries, staff have sent out anexplicit letter: “Andy Coulson hasnow left Downing Street”, it says

bluntly. “I will inform you when toadd his successor to your distribu-tion list.”

That’ll be one freshly ironed copy of City A.M . coming your way daily,Mr Oliver.

AND THE WINNER IS With just over three weeks to gountil this year’s official Academy Awards, Nomura will be challeng-

ing its very own glitterati at anOscars Quiz night tonight, inaid of the Teenage Cancer Trust(TCT).

More than 240 Nomuraemployees will walk the red car-

pet before being quizzed by BBC sports presenter Gabby Logan (pictured left), ably

assisted by her very ownin-house assistant –

Nomura’s joint chief operator of whole-sale, PaulSpanswick.

The bank hopesto raise over£10,000 tonight

towards the cre-ation of a new day centre at University Hospital, London,

bringing the firm’stotal contribution to

the TCT to over£800,000.

Proof that even theembarrassment of notknowing any answers

to the quiz can be a worthwhile endeavor.

SUPPORT THE TROOPSAND GIVE YOUR BRIGHT

YOUNG THING A CITYJOURNALISM START

City A.M. will support both troopscharities and thestart of ApprenticeWeek next Friday.

SECURE YOUR PLACE A T

A UNIQUE CULIN A R Y E VEN T

RAISING FUNDS FOR OUR

WOUNDED TROOPS, WHO HA VE GI

VEN SO MUCH

TO SECURE YOUR PLACE AT THIS EXCLUSIVE EVENT call 020 7648 8694,email or visit

All the ingredients for the year’s not-to-be-missed culinary experience.

T H E C

A U S E

A N D S P O N

S O R S S U P P

O R T E R S

Eventorganiser& sponsor

Sponsors &supporters

T H E E V E N T

CANAPES AND SUSHI

STARTER FIRST COURSE FISH COURSE MEAT COURSE DESSERT PETIT FOURS Each course served with carefully selected wines.

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personally presenting a gourmet course on the night.a line up of internationally acclaimed chefs, each

The splendour of Guildhall, an introduction to the

culinary experience. All the ingredients for the year’s not-to-be-missed personally presenting a gourmet course on the night.

their return from active duty.Centres, for wounded troops in need of support on

Raising funds to build and run Personnel Recovery

E S A U C E H T

culinary experience. All the ingredients for the year’s not-to-be-missed personally presenting a gourmet course on the night.

their return from active duty.Centres, for wounded troops in need of support on

Raising funds to build and run Personnel Recovery

All the ingredients for the year’s not-to-be-missed personally presenting a gourmet course on the night.

Centres, for wounded troops in need of support on

Mark Flanagan,

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COURSEFIRST

Albert Roux OBE & Glen WatsonTARTERS

Hosted by –BANQUETETH

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Military pageantry will feature throughout the evening.Each course served with carefully selected wines.

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Benoit Blin MCA,ESSERTDJohn Williams MBE,COURSEMEAT

Chamberlain’s& Matthew Marshall,Philip Corrick,COURSEFISH

Chef to HSH Prince Albert II of Monaco& Christian Garcia,Mark Flanagan,COURSEFIRST

by

O N I T C E H T

Military pageantry will feature throughout the evening.Each course served with carefully selected wines.

Best British Chocolatier 2007-2009William Curley,

Le Manoir Aux Quat SaisonsBenoit Blin MCA,Jason AthertonThe Ritz &John Williams MBE,

Chamberlain’sRoyal Automobile ClubPhilip Corrick,

Chef to HSH Prince Albert II of MonacoThe Royal Chef, The Royal Household Mark Flanagan,

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The Capitalist EDITED BY

JULIET SAMUELGOT A STORY? [email protected]

11

Coulson’s special deliveries are still arriving

The Norton Rose lawyers celebrate

8/7/2019 Cityam 2011-02-03 book


FORMER Dresdner Kleinwort bankerChristian Littlewood has been jailedfor a record three years and fourmonths for his part in an insider deal-ing ring that lasted almost a decade.

Littlewood and his wife, Angie Lew,admitted being involved in a massiveoperation that illegally traded morethan £2m through an intermediary,Helmy Omar Sa’aid.

Lew, a Singapore national, escaped with a 12 month suspended sentencefor her role in the operation. Sa’aid,also from Singapore, was jailed fortwo years and was deported to hishome nation where he will serve therest of his term. He was the first per-son to be extradited, from FrenchMayotte, as part of a UK insider deal-ing case.

The sentences mark the end of amassive operation by the FinancialServices Authority (FSA), which hasinvested thousands of man hours andhundreds of thousands of pounds inthe investigation.

Margaret Cole, managing directorof enforcement and financial crimeat the FSA, said: “This was a case of

systematic abuse by an approved per-son of their privileged position in themarket – we are determined to stampout such abuse.

“The guilty pleas and sentencing of the Littlewoods and Sa’aid shows that

we can, and will, uncover insiderdealing, even across borders, and thatthe people who commit these marketoffences will not go unpunished.”

Simon Morris of law firm CMSCameron McKenna said: “These char-acters were real City players ratherthan misbehaving private investorsand have received real jail sentences.

“This outcome is a signal achieve-ment for the FSA and a proper warn-ing to all securities professionals. Itshows that the FSA will doggedly pur-sue suspicions of insider dealing rightthrough to securing criminal convic-tions before a court rather than tak-ing the easier route of fining formarket abuse.”

Insider deal

banker jailedfor 40 months“ WHAT COULD

”

BE SIMPLER THAN

SPREADS?

NOTHING.

BY STEVE DINNEEN

ENFORCEMENT▲

MANAGEMENT consultant RupinderSidhu appeared in court yesterday oncharges of insider trading.

The case, brought by the FinancialServices Authority (FSA), relates tospread bets placed between 2008 and2009.

Sidhu pleaded not guilty to allcharges. The case was adjourned until2 March and Sidhu was remanded on

conditional bail. The FSA is currently prosecuting 12other individuals for insider dealing.Seven people – Bijal Shah, TrupteshPatel, Paresh Shah, Mitesh Shah, NetenShah, Ali Mustafa and Pardip Saini –have been accused of 13 counts of dealing on inside information. Fiveothers – James Paul Sanders, MirandaSanders, Christopher Hossain, JamesSwallow and Adam Buck – have beencharged with 17 counts.

Consultant bailedin illegal trade caseENFORCEMENT

▲

Christian Littlewoodand his wife Angiearriving in court yesterday.

Picture: REUTERS


FSA enforcement bossMargaret Cole hailedthe case as proof theFSA will find and pros-ecute insider trading.

THE conviction of the trio of insiderdealers was a major victory for theFSA in its fight against financialcrime.

Littlewood’s three yearsand four months conviction

was a record. But it is thelatest in a string of successesfor the FSA.

Last June Anjam Ahmad, aformer hedge fund manager for

AKO Capital, received a suspended 10month sentence for dealing in atleast 19 companies he had informa-tion about.

In March last year, former

Cazenove partner Malcolm Calvert(pictured) was sentenced to 21months in prison. The court heard

how his operation involved pass-ing envelopes stuffed withmoney between him and anaccomplice. He was foundguilty of five counts of insid-er dealing. In November 2009

a dentist and son, an intern ata broking firm, were found

guilty of 12 counts of insider deal-ing. In March 2009 ChristopherMcQuoid and his father-in-law James

William Melbourne were foundguilty of trading on information

relating to a telecoms firm.

Convictions: How the FSA hasprosecuted financial crimeENFORCEMENT

▲

8/7/2019 Cityam 2011-02-03 book


IMPERIAL Tobacco surprised investors yesterday by announcing a return to volume growth in the last quarter of 2010 and pledged to pay half its prof-its in dividends.

Imperial, with cigarette brandsincluding Lambert & Butler, West andGauloises, said cigarette volumes rose0.5 per cent in its October toDecember 2010 first-quarter.

Fine-cut loose tobacco and pricerises boosted overall revenues to see afive per cent rise.

The recovery in trading was led by strong growth in eastern Europe andin its Africa and Middle East region

while its mature markets such as in western Europe and the United Statesprovided good revenue growth.

The shares soared 5.9 per cent toclose at 1,900p after the upbeat update.

The Bristol-based company added it will return to paying out 50 per centof its adjusted earnings as dividendsfor the current year to September2011, back to the levels before its big

Altadis acquisition in 2008.Chief executive Alison Cooper said:

“We made a good start to the year with underlying tobacco revenues up

five per cent and increased cigaretteand fine cut tobacco volumes.”

Last November, Cooper had predict-ed a return to cigarette volumegrowth this year after a fall of 4.2 percent in the year to September 2010due to tough markets in Spain,Russia, the United States andUkraine.

The company had seen its volumesfall as smokers switched to cheaper,cigarettes in the global downturn butit had offset this by price rises, on-going cost savings and growth in itsfine-cut loose tobacco.

Imperial became the number twocigarette maker in Europe after PhilipMorris International following itstakeover of Franco-Spanish Altadis. Itis the market leader in the UK.

FEARS have been raised over the short window of opportunity for Europeanrulemakers to assess industry con-cerns over the formation of new regu-lations proposing sweeping reformsto equity market structures such as“dark pools” and high-frequency trad-ing.

Hundreds of submissions voicing

fears over the impact of the new Markets in Financial Instruments

Directive (Mifid) were sent to theEuropean Commission yesterday,amid concerns over a rushed process.

Officials say the submissions willnow be processed in time to form leg-islative proposals due in the spring –a timeframe which insiders say couldhamper the ability of the commissionto digest the points being made.

Chief executive of the Futures andOptions Association Anthony Belchambers said: “There’s no point

in consulting and no point in indus-try spending time and resources on

this if it’s going to end up in the waste paper bin.”

However, senior adviser at theInternational Capital Market

Association John Serocold urged theEuropean Commission to work close-ly with industry to iron out potentialconcerns. He said: “We have to go on

working with Brussels to improvethese proposals” A spokesperson forthe European Commission said moreresponses than usual had been

received “because of the wide scopeof issues that Mifid touches”.

Financial firms hit out at short deadlineto assess impact of key Mifid regulations

AIR freight grew by over one fifth in2010, in a sign of global economic

recovery, but severe weather in Europeand North America dented passengerdemand at the end of the year, the air-line body IATA said yesterday.

Both passenger and freight demandhave now exceeded pre-recession levels

but freight volumes have dropped fiveper cent since the peak of the post-recession restocking boom in early 2010, the International Air Transport

Association said.IATA director-general Giovanni

Bisignani said the world was movingagain after an unprecedented declinein aviation demand in 2009. Airlinesended the year ahead of 2008 volumes

but with a profit margin of only 2.7

per cent.“The challenge is to turn thedemand for mobility into sustainableprofits,” he said.

Demand for air cargo -- an impor-tant indicator of world trade flows --

was 6.7 per cent higher in Decemberthan a year earlier after rising 5.4 percent in November, to show a 20.6 percent rise for the full year, IATA’smonthly traffic data showed.

The World Trade Organisation has

projected that global trade rebounded by a record 13.5 per cent in 2010. IATA estimates that some 30 per cent of

world trade by value -- more expensivegoods than bulk cargos -- are moved by

air. With freight demand growth oscil-lating between 35.2 per cent in May and 5.8 per cent in November, theindustry is heading towards a morenormal growth pattern in line withhistorical growth rates of five to six percent. Severe weather in North Americaand Europe dented passenger demandin December, with growth slowing to4.9 per cent from 8.2 per cent. inNovember.

Air freight recovers in 2010BYHARRY BANKS

AVIATION▲

Imperial sees

shares jumpafter growthBY JOHN DUNNE

CONSUMER▲

BYRICHARD PARTINGTON

EU REGULATION▲

NEWS | IN BRIEF

Aer Lingus mulls Asian tie-upIrish airline Aer Lingus is looking toclinch a marketing alliance involving thesharing of route codes in the Asia-Pacificregion to tap into faster growth outsideEurope, chief executive Christoph Muellersaid. “In the United States the shake-outis more or less complete in my view...Latin America and Asia are clearly moreexciting.” Aer Lingus already has a code-share agreement – which sees airlineslink up their flights to extend their net-works –with United, British Airwaysand KLM. Mueller said Aer Lingus waswell protected against oil price swingsthis year as it hedges its exposure twoyears in advance. He also said there wasmore potential to save costs, for instance

in oil purchasing and information technol-ogy processes.

Advertising body rebukes AsdaThe Advertising Standards Authority(ASA) has ruled Asda must makechanges to the way it presents its priceguarantee, a key plank of the grocerychain’s marketing, following complaintsfrom rivals. The watchdog said advertsrun by Asda following the introduction of its price guarantee in April must notappear again in their current form. “Wetold Asda to ensure their ads did not sug-gest their price guarantee applied to allitems, including non-grocery items anditems that were specifically excluded, orthat their savings claims referred toshopping generally rather than specificitems,” the ASA said. Asda’s originalguarantee offered to refund shoppers the

difference if they could find their gro-ceries cheaper elsewhere.


ANALYSIS l Monthly air traffic results December 2010 (year-on-year)

Passenger traffic:

4.9pc

Freight traffic:

6.7pc

Load Factor:

77.2pc

ANALYSIS l Imperial Tobacco

1,850

1,950

2,050

26 Nov 16 Dec 10 Jan 28 Jan8 Nov

p 1,900.002 Feb

ANALYST VIEWS: ARE IMPERIAL SHARES A GOOD BUY? Interviews by John Dunne

“

JULIAN HARDWICK | RBS

The update contains several positive features: strong volumes and revenue; a reduction in theeffective tax rate; and an increase in the dividend payout, which we see as a pointer to the potentialfor capital return, all of which should highlight the significant undervaluation of the shares.

”

“

SIMON WILLIS | DANIEL STEWART

We believe that the recent weakness in the stock, driven by suggestions that smoking willdecline to zero in 30 to 50 years, has been overdone and we regard the statement as the most posi-tive piece of news since Alison Cooper took over as chief executive last summer.

”

“

KEITH BOWMAN | HARGREAVES LANSDOWN

The group’s update surprised positively on a number of fronts. The emerging markets appearto have underwritten better-than-expected volume growth. Investors will be buoyed by comments inrelation to the group's earnings pay-out ratio. On balance, the market consensus is a ‘buy’.

”

Imperial chief executive AlisonCooper

Cigarettevolumes rose

0.5per cent

in the firstquarter Revenues

overall up

5per cent

4.2per cent – drop incigarette volume

in the year toSeptember 2010

Shares rise

5.9per cent after

yesterday's

trading update

8/7/2019 Cityam 2011-02-03 book



INVESTMENT bank Lazard’s fourth-quarter profit beat Wall Street expec-tations, helped by higher revenuesfrom its asset management division.

Lazard, which struggled whendealmaking dried up during thefinancial crisis, has been buildingout its asset management unit in aneffort to offset its more volatile advi-sory revenues.

The firm reported a profit of $104.5m (£64.6m), or 76 cents ashare. That beat analysts’ estimatesof a profit of 63 cents a share and

was up sharply from a year-earlierloss of $54.9m, or 46 cents a share.

Asset management revenue jumped 25 per cent from the year-earlier quarter.

The unit benefited from higher feeincome, finance chief MikeCastellano said, in part becauseLazard has emerging market and

other funds that attracted new investors in the quarter.

Lazard had a record $155.3bn inassets under management at the endof the year.

A bumper crop of deals boostedLazard’s dealmaking revenue by 53per cent from the year earlier quar-ter to $260m. Completed deals in thequarter included SSL International’ssale to Reckitt Beckiser and AbraxisBioScience’s sale to Celgene.

Lazard also has a full slate of dealson which it is still working, includ-ing Qwest CommunicationsInternational’s $22.4bn merger withCenturyLink. Offsetting the pickupin dealmaking activity, Lazard saidits restructuring business reportedless than half its year-earlier quarter-ly revenue.

Across the firm, revenue in thefourth quarter jumped 19 per centfrom a year earlier to $610.1m.

Shares in Lazard closed 3.5 percent higher yesterday at $44.25.

Lazard profit

beats Wall Stexpectations

Don’t miss breaking newswith our new 10:30 AM EMAILEach day we’ll cover the morning’s breaking news, give

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up-to-date financial headlines.

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BYHARRY BANKS

BANKING▲

DISNEY’S TANGLED TOPS UK BOX OFFICE

NEW Disney film Tangled has ended the three-week reign of The King’s Speech at the topof the UK box office. The animated adaptation of Rapunzel, voiced by Mandy Moore and Zachary Levi, took £5.1m in its opening weekend, pushing The King’s Speech into second place.

NEWS | IN BRIEF

Ferroalloys grow for ENRCMining group ENRC said ferroalloy pro-duction rose 5.6 per cent in the fourthquarter as the company’s operations inKazakhstan ran at full available capaci-

ty. The London-listed company said yes-terday that production of ferroalloysgrew to 473,000 tonnes from 448,000tonnes in the same period last year.Ferroalloys accounted for 47 per cent of first-half operating profit while iron oremade up 36 per cent. Ferrochrome is akey ingredient in stainless steel.

Max Petroleum plans rights issueBritish oil explorer Max Petroleum saidit planned to raise about $75m (£46m)through a share placing to fund itsongoing exploration projects at two of its blocks in Western Kazakhstan.Macquarie Capital and JP MorganSecurities are the joint bookrunners forthe placing. The Kazakhstan-focusedcompany said it was also looking toextend the maturity of its credit facilityand convertible bonds to enable it tofund its exploration activities in thecountry.

Johnson Matthey profits riseBritish industrial conglomerate JohnsonMatthey said full-year profit shouldbeat its previous expectations, helpedby higher precious metals prices andthe continued recovery of the globalauto industry. The world’s largest sup-plier of catalytic converters, which isalso a platinum refiner and makes spe-ciality chemicals, said yesterday thatunderlying third-quarter pre-tax profitrose 34 per cent and that it expectedgood trading in its final quarter.

Treasurymust lead growth with confidence

HEADS were noticeably weary atthe World Economic Forum inDavos last week. Not from alco-hol – the receptions were

restrained – but at the banker bashing.

“I am so bored of it. It’s time to talk about the future not the past” was atypical comment. Of course, you

would expect the masters of the uni- verse to say that, but even the servants

of society who hang around that Swissski resort were thinking we need tolook forwards not back. Indeed, as faras the economy goes, that is exactly

what we need to do. We have been through a major

financial and fiscal crisis, the like of which our generation has never seen.Now we have a barrage of regulatory changes, not all misguided, to stop arepeat of the banking crisis, and thegovernment has plotted its difficult

course to rebalance the budget.But, as the drop in GDP last quarter

shows, although we are taking themedicine, we are not fully recovered.

We have rising unemployment,

shaky business confidence, a fragilehousing market, too-high inflationand thousands of worried public sec-tor workers. The answer to this is notto dwell on past problems, but to chartthe course ahead. The specific cure forour ills is obvious, even if the means toachieve it aren’t: growth. We now needa war-like national effort to promoteeconomic dynamism. The chancellorknows this, and will use his budgetnext month to boost growth. It is the

Treasury that must take the lead. The chancellor must plot a course

for lower taxes – proven beyond doubtto promote growth. He is already com-mitted to lower corporation taxes and

personal taxation for those on low incomes, both of which will help.But he could go further –giving tax

breaks to start-ups and venture capital-ists. He could bring back enterprise dis-tricts to regenerate poorer areas, andgive tax breaks to companies settingup European headquarters in London,to stop them moving to Dublin.

But more than this, the governmentshould test all its policies against thecriterion: will they help growth? The

bribery laws will clearly hurt UK Plcand the government should reconsid-er them; pension ages should beextended; union powers curbed;skilled immigration enhanced; plan-

ning controls eased up; aviation capac-ity increased. The government mustalso speak out with confidence aboutthe many opportunities that Britainoffers to investors and workers alike.

If we don’t focus on the future, we will be trapped in the past. And withthe past few years being the most mis-erable on record, the future is clearly a

better place to be.•Anthony Browne is an adviser to the Mayor of London

VIEW FROM CITY HALL

ANTHONY BROWNE

8/7/2019 Cityam 2011-02-03 book


NOMURA plans to expand into Chinain the next 18 months, according tothe chief operating officer of its whole-sale business Jesse Bhattal, who spokeas the firm’s fourth quarter resultsmissed forecasts.

“It is one of the most importantgeographies. We would like to over thenext 12 to 18 months have a local mar-ket presence in China,” Bhattal said.

But the bank will need to convinceinvestors that expansion will providethe jumpstart needed after yesterday’sresults.

The bank reported a net profit forthe fourth quarter of 2010 of ¥13.39bn(£101.3m) – well short of consensusforecasts of ¥17.4bn. In line with USconvention, it regards the fourth cal-endar quarter as its third financialquarter, and will report “full-year”results in March.

The bank has struggled since buyingup the non-US assets of LehmanBrothers. During the past 18 months ithas added more than 1,000 staff in theUS in a bid to break into the top tier of investment banking. But it has yet toreap the rewards of its investment. Its wholesale business, which includes

investment banking, was particularly badly hit: the division recorded a ¥22bn loss over the nine months toDecember. Nine-month fees frominvestment banking fell 11.8 per centto ¥79.2bn.

The disappointing profits were inpart on the back of costs rising in rela-tion to revenues: nine-month non-interest expenses fell 2.6 per cent to ¥775.5bn, whereas nine-month rev-enues fell 4.8 per cent.

Overall, its nine-month pre-tax prof-it was down 27.2 per cent to ¥55.8bn. The bank’s asset management divi-sion, however, helped to prop up itsearnings, bringing in ¥17.1bn for thenine months to December, a rise of 25per cent on the previous ninemonths.

VODAFONE and Essar are no closer toresolving their long-running dispute, with both sides hiring separate invest-ment banks to examine the value of the Indian firm’s stake in the joint ven-ture.

Vodafone is furious that Essar isplanning to merge one third of its 33per cent stake in the joint venture intopublic listed company India Securities. Vodafone believes the move might be aploy to artificially inflate the stake’s

value as a precursor to selling it, withEssar saying it will reveal its true value.

When Vodafone acquired a 67 percent stake in Vodafone Essar for$11.1bn (£6.85bn) in 2007, it gave Essartwo options over its stake. The firstallows it to sell the entire stake to Vodafone for $5bn. The second allowsEssar to sell between $1bn and $5bn worth of Vodafone Essar shares at a“fair market value”.

Essar says it plans to press ahead with its plans for the stake despite Vodafone’s objections.

Vodafone and Essar riftno closer to a resolutionTELECOMS

▲

AMAZON is developing a filmstreaming service that would see itcompete directly with firms such asNetflix, according to industry sources.

It is understood Amazon is plan-ning to bundle access to the stream-ing service with Amazon Prime, ascheme that guarantees Amazon cus-tomers unlimited free next-day ship-ping of books and other items sold by the online retailer after paying aninitial fee of £50 a year.

A leaked promotion for the servicesuggested movies would be free for Amazon Prime customers.

The on-demand TV market is becoming increasingly competitive, with internet giant Google ready tolaunch a new service, Apple recently upgrading its Apple TV offering andfirms such as US-based Hulu becom-ing increasingly popular.

Internet-ready TVs are also comingto the forefront of the industry, withfirms including Sony, Samsung andPanasonic all unveiling new modelsearlier this year.

The move follows Amazon£200m acquisition of DVD rental andstreaming firm LoveFilm last month. Amazon already owned 42 per centof the firm but took direct control ina move that was welcomed by ana-lysts, who say Amazon is in an idealposition to grow the business.

Amazon tocompete

with Netflix

SWISS drugmaker Roche improved itsnet profit for 2010 but failed toimpress analysts who described theresults as weak yesterday.

Roche’s full-year sales were 47.47bnSwiss francs (£31.35bn), below theSwFr48.4bn analysts had forecast,after overall sales fell three per centand pharmaceutical sales fell five percent as European sales slowed.

Earnings per share grew four percent to SwFr12.8, missing expecta-

tions of SwFr12.9 but still up ten percent before a six per cent currency headwind, BNP Paribas analysts said.

Matrix analyst Navid Malik saidRoche’s full-year net income, whileup 11 per cent to SwFr8.67bn fromSwFR7.78bn in 2009, was “a clear miss versus consensus” as it feSwFr0.58bn below expectations. Roche downgraded itsforecast sales revenue from its breastcancer drug Avastin to SwFr7bn from

SwFr8bn and said it expected low sin-gle-digit sales growth in 2011.

Roche improves profitsbut misses expectationsPHARMACEUTICALS

▲PHARMA giant GlaxoSmithKline soldits stake in contract research firmQuest Diagnostics for $1.7bn(£1.05bn) yesterday.

The sale buoyed hopes the compa-ny would restart a share buyback pro-gramme to bolster its share price,following the lead of competitorssuch as AstraZeneca, which is repur-chasing $4bn of stock.

But the sale also freed up cash forGlaxo to pay a £2.2bn net charge

imposed on 17 January, resulting fromlegal disputes going back to 2004.

“Taking the Quest sale in context with GSK’s recently announced legalcharge to be taken in its fourth-quar-ter 2010 earnings, the cash generatedis certainly timely,” said Shore Capitalanalyst Brian White.

Glaxo sold 30.8m shares, equiva-lent to 18 per cent of Quest, through apublic share offering, of which Quest bought half.

After tax, Glaxo is expected toretain $1.1bn of the proceeds.

New York-listed Quest, which has amarket cap of about $9.71bn, was anon-core asset Glaxo acquired in

1999, but had been reducing its share-holding for some time.

“We have decided that now is agood time to take advantage of favourable market conditions,” saidGlaxo chief financial officer JulianHeslop. He added that the divestment“demonstrates our focus on generat-ing attractive returns for our share-holders and our ability to monetisesignificant gains when appropriate.”

Glaxo, which has a market capitali-sation of about £59.6bn, suspendedits share buyback in 2008 and hasfocused on increasing its dividendand making bolt-on deals, while also working to resolve its legal issues.

Glaxo’s shares closed down 1.52 percent at £11.29.

Glaxo sells Quest stake for £1bnBYALISON LOCK

PHARMACEUTICALS▲

Nomura hit as

US expansionlimits profitsBY JULIET SAMUEL

BANKING▲


Amazon chief executive Jeff Bezos is moving into film

ANALYSIS l Nomura

450

400

500

550

Dec JanNov

¥

516.002 Feb

CITY VIEWS: WOULD YOU USE AN ONLINESTREAMING SERVICE FOR FILMS? Interviews by Juliet Samuel

“Would I use it? Well it depends, because when you’reusing streaming, you might have an allocated downloadlimit; it depends what time of day it is or how fast your

connection is.”

ADAM REED | ALLIANZ

“Probably I wouldn’t use it. The format soundsquite good but it wouldn’t interest me. But if itmakes it easier to watch movies, it could catchon.”

ANDY RODEN | LLOYDS

“We download stuff for the PlayStation 3 all the timeand just use that. If the service was cheaper I woulduse it. Our TV is already connected so itdepends on the charges.”

TRACY CLIFFWORTH | DAVIS ARNOLD COOPER

PRIOR to his appointment as thenew Vodafone chairman, GerardKleisterlee was the epitome of the

single company man.He has spent his entire career atDutch electronics giant Philips, ashis father did before him. He rosethrough the ranks to take thehelm and is widely credited withtransforming the company from asprawling (and struggling) con-glomerate to a streamlined opera-tion.

His experience in stripping a

company down to its bare essen-tials will be extremely useful inhis new role, with Vodafone sell-ing off its non-core assets.

German-born Kleisterlee, whotook over as Philips chief execu-

tive in 2001, will bring emergingmarkets know-how, having servedin the Dutch firm’s Asian division.

He will take over from Sir JohnBond at Vodafone’s annual gener-al meeting later this year.

Like all mobile operators, Vodafone is also struggling in itsmore mature markets, wherecompetition and regulation havepushed prices lower.

BY STEVE DINNEEN

PROFILE▲

Single company man sets forth

GERARD KLEISTERLEE

BY STEVE DINNEEN

MEDIA▲

8/7/2019 Cityam 2011-02-03 book


TOP home appliances makers Whirlpool and Electrolux are rais-ing prices to pass soaring raw mate-rials costs onto customers and willrely on emerging markets to drivegrowth.

The move comes as both compa-nies missed quarterly profit esti-mates and continue to grapple with tepid demand in key devel-oped markets like the US andEurope. The news weighed onshares of both companies but hitElectrolux hardest, with its Bshares sinking 7.9 per cent to closeat 167.6 Swedish crowns.

Sweden’s Electrolux missedearnings forecasts and further dis-

appointed investors by not return-ing money to shareholders via ahoped-for special dividend. Thecash-rich company instead extend-ed its share buyback program.

Net earnings at Whirlpool, themaker of Maytag and KitchenAidappliances, rose to $171m(£105.6m), or $2.19 a share in thefourth quarter, from $95m, or$1.24 a share, a year earlier. Salesrose four per cent to $5bn, beatingthe average analyst estimate of $4.8bn.

Adding more pain, Electroluxsaid it had put plans to buy Egypt- based appliance maker OlympicGroup on hold due to unrest there.

The company is planning to raiseprices by eight to 10 per cent inNorth America from April and

gradually in Europe and other mar-kets.

“In the first quarter we are goingto have raw materials hitting usimmediately,” said Electrolux chief executive Keith McLoughlin, afterreporting core earnings of 1.71bncrowns, down from 2bn crowns inthe same period of 2009.

Price hike for whitegoods as profits lagBYHARRY BANKS

COMPANIES▲

NORDEA, the Nordic region’s biggest bank by value, beat fore-casts with an 81 per cent rise infourth-quarter operating profit assolid economic growth liftedincome, but gave no outlook for2011.

Analysts said Nordea’s strongincome and higher margins bode well for the region’s other banksthat are set to report earnings inthe next week, as higher interest

rates in Sweden and shrinkingloan losses help lift profits.

Nordea, one of Europe’s top per-formers during the financial cri-sis, reported its fourth-quarteroperating profit rose to €1.07bn(£912m), beating average analystforecasts of €943m.

Nordea’s wide geographicspread, an early move to raise cap-ital and limited exposure to hard-hit markets such as the Balticshelped it pull through the down-turn with ease, while analysts say it has been gaining market sharein the Nordics.

Analysts were upbeat onNordea’s comments about corpo-

rate lending, which has struggledto recover in line with a robustregional economy – Sweden’seconomy grew nearly six per centlast year – as cash-rich firms haverelied on their own resources.

Chief executive ChristianClausen said investments werepicking up and lending marginshad improved during the quarter.He added, however, that weakerinternational players hadreturned in search of new rev-enue.

Nordea’s shares finished 3.2 percent lower at 77.75 Swedish crowns.

BANKING▲


SCANIA’S PRE-TAX REVENUE DISAPPOINTS

TRUCK MAKER Scania posted a smaller-than-expected rise in fourth-quarter pre-taxearnings yesterday and said it expected demand to remain flat at the start of this year.Scania is majority-owned by Germany’s Volkswagen, and is currently in merger talkswith rival MAN. Picture: REUTERS

PANASONIC is planning further costcuts to compete with South Koreanrivals including Samsung, after stiff price competition in televi-sions and a stronger yenhurt its quarterly profit.

Panasonic reportedan operating profit of 95.36bn yen (£700m)for October toDecember, lagging anaverage forecast of 109.1bn yen. The makerof Viera TVs and Lumixcameras left its full-year

operating profit outlook at310bn yen. Operating profit forthe year to March 2010 was 190bn yen. Higher material costs also con-tributed to the 5.6 per cent fall in

third-quarter earnings, offsettinghelp from a Japanese governmentincentive scheme during the year-endperiod.

Panasonic, the world’s fourth-largest television maker after

Samsung, LG Electronics andSony, is struggling to gain

a foothold in smart-phones and tablets, amarket dominated by Apple. “The yen getsstronger and strongerand competition withKorean and Chinese

makers will get fiercerand fiercer,” managing

director Makoto

Uenoyama (pictured) said.Investors are eyeing

Panasonic’s ability to restructurequickly and show benefits after its buyout of subsidiary Sanyo Electric.

BYHARRY BANKS

TECHNOLOGY▲

ANALYSIS l Electrolux

180

170

190

29Nov 20Dec 10Jan 31Jan8Nov

SEK167.60

2 Feb

Panasonic will cutcosts as earnings

fall in third quarter

Nordea leads Nordic bank results asincome surges on economic rebound

NEWS | IN BRIEF

Sandvik suffers profits dipTool and machinery maker Sandvik post-ed a smaller-than-expected rise infourth-quarter profits as currency andmetal price swings took the shine off stronger market demand. Sandvik,which supplies equipment to the miningand construction industries, posted

operating earnings of 3.1bn crowns(£288m) crowns, lagging behind analystforecasts of 3.3bn crowns.

Outokumpu expects break-evenStainless steel maker Outokumpu said itexpected to break-even in the first quar-ter after posting a deeper-than-expect-ed fourth quarter loss. The companyexpects delivery volumes in the firstquarter to be around 10 to 20 per centhigher than in the fourth quarter of 2010. The Finnish firm reported an oper-ating loss of €85m (£72.4m) for thefourth quarter, versus a €31m loss ayear ago.

Fortum disappoints on RussiaFinnish utility Fortum reported a surprisefall in fourth-quarter profit yesterday,hurt by a weaker than expected per-formance by its main power generationunit and in Russia. October to December

comparable operating profit fell five percent to €541m (£461m), missing theaverage forecast of €613m. Fortum alsoproposed a 2010 dividend of €1.00 pershare, in line with expectations.

8/7/2019 Cityam 2011-02-03 book


Aviva InvestorsKevin Talbot and Manish Singhai have

joined the firm as chief investment offi-cers of fixed income and equitiesrespectively for Asia. They will both

report to Tahnoon Pasha.Talbot joins from ANZ Bank and hasalso worked at AMP Capital Investors.Singhai moves over from ArjavaCapital, a company he incorporated,and has previously worked for adecade at AllianceBernstein.

Navigant ConsultingNicholas Pollard has joined the consul-tancy as head of its Europe, MiddleEast and Africa construction consult-ing operations team.

He joins the company from BovisLend Lease, where he was chief execu-tive of Lend Lease UK. He has also pre-

viously worked at Skanska UK and wasa director at Railtrack/Network Rail.His main areas of expertise are civilengineering, utility networks and com-mercial building.

Barclays Wealth

Julia Church has been appointed ashead of Guernsey within BarclaysWealth’s advisory division. She will bein charge of managing the Guernseyplatform with a focus on deepeningclient relationships.

She will report to Walter Coxon,managing director of the division. She

joins the firm from Credit Suisse Trust,

where she was a board director.

Interim PartnersAngela Hickmore has joined the firm’smanagement team. Hickmore hasspent a decade at Albemarle InterimManagement where she was a manag-

ing director. Previously, she was adirector of Management Resources atRobert Half. She has worked withclients including the Bank of England,Northern Rock, RBS and Lloyds.

Ascent ResourcesGraham Cooper has joined the board of the resources firm.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel

BetfairThe bookies have appointed a new non-execu-tive director to its board: Baroness DeniseKingsmill. She will also sit on the company’saudit committee in this role. Kingsmill has expe-rience serving on the competition commission,of which she was deputy chairman 1996-2003,

and she has also chaired three reviews andtaskforces for various government depart-ments. She is currently a member of Microsoft’s European Policy Council.

+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


Wall Street startsto stall after rally

US stocks lagged yesterday astechnical measures suggested afive-month rally was growinglong in the tooth.

Investors were reluctant to make big bets even though a report showedUS private employers added more

jobs than expected in January. The S&P 500 started to look over- bought again after reaching two anda half year highs on Tuesday. A key measure of the rally’s strength sug-gests stocks are vulnerable to a correc-tion, analysts said.

The Dow Jones industrial averagerose 1.81 points, or 0.02 per cent, at12,041.97. The Standard & Poor’s 500Index was down 3.56 points, or 0.27per cent, at 1,304.03. The NasdaqComposite Index was down 1.63points, or 0.06 per cent, at 2,749.56.

Investors yesterday kept an eye onprotests in Egypt as violent streetclashes erupted. Concerns thatprotests could spread to other coun-tries in the region have pressuredequities in recent sessions.

The Market Vectors Egypt IndexETF, which consists of shares of com-panies in Egypt, fell 3.7 per cent after

rising for two consecutive days. Joseph Hargett, a strategist at

Schaeffer’s Investment Research, saidthe Dow needs to stay above 12,000firmly as a show of short-term sup-port. “The resistance now resides inthe 12,100 - 12,200 area.”

After a pullback late last week, theS&P 500 has started to look over- bought by some measures. The indexis more than one standard deviationabove its 50-day moving average andthe weekly relative strength index isabove 70.

Trading volumes were not seriously affected by a harsh winter storm that brought parts of the US Midwest to a

standstill. The story was different for futurestraders in Chicago, which took muchof the brunt of the storm.

“It’s definitely light downtownhere. Pit trading opened late too... We’re about half-staffed,” said Frank Lesh, a futures analyst and broker atFuturePath Trading in Chicago, where over 20 inches of snow had fall-en.

Volume on the NYSE, Amex andNasdaq reached 7.26bn shares com-pared to last year’s daily average of about 8.47bn.

Appliance maker Whirlpooldropped 2.1 per cent to $83.60 afterits profit missed estimates.

Time Warner and Mattel ralliedafter both companies reportedstronger-than-expected quarterly prof-its.

Media group Time Warner gained

8.6 per cent to $35.10 while toymakerMattel was up 0.9 per cent to $24.37.

B ANKS and miners pushedBritain’s top share index high-er yesterday, lifted by furtherproof that the economic recov-

ery in the United States is on track. The FTSE 100 index closed up 42.25points, or 0.7 per cent, at 6000.07,extending Tuesday’s 1.6 per cent rise.

The index has recovered from asharp dip at the beginning of the week as the focus has shifted fromthe political troubles in the MiddleEast to the health of the global eco-nomic recovery.

Yesterday’s strong reading on thelabour market in the United States backed up strong manufacturingdata on Tuesday from the world’s biggest economy, and gave a steerahead of Friday’s January US jobsreport.

The data shored up investorappetite for riskier assets such asmining stocks, which had been dent-ed due to fears over the impact of thepolitical unrest in Egypt.

ENRC added 3.8 per cent after theminer reported a rise in fourth-quar-ter ferroalloy production.

Miners Lonmin and Rio Tinto werealso among the top risers yesterday,

climbing 4.1 and 3.8 per cent respec-tively.

Banks saw good support on the back of improved investor senti-ment, with Standard Chartered up1.7 per cent.

There was promising news fromthe Europe, where Germany andFrance reached a consensus onsteps to boost economic coordina-tion within the Eurozone as part of a comprehensive anti-crisis packagethat will also see the scope of Europe’s bailout fund bolstered.

“Investors are looking for moreproper answers to all the issues thatare still there from the financial cri-

sis,” said Lothar Mentel, chief invest-ment officer at OctopusInvestments.

“Once they have been answered,then those doom-mongers will havea less of an argument to cause theseshort-term stampedes,” he said,referring to recent volatility on theFTSE 100.

Chipmaker CSR rose 2.9 per centafter its rival Broadcom speculatedthat Qualcomm, another chipmak-er, could buy the British company to bolster its Bluetooth and FM radiorange.

Imperial Tobacco added 5.9 percent after the cigarette maker sur-prised investors with a return to vol-ume growth in the last quarter of 2010.

“We think this should put a stopto the recent rot in the share priceand create a platform for a more

balanced ticket of top line delivery in FY11,” Investec Securities said in a

note.Peer British American Tobacco

added 1.4 per cent.On the second tier, Pace, the

world’s largest maker of set-top boxes, gained 10.6 per cent aftertraders highlighted a newspaperreport saying the British firm has won a key contract with an Indianpay-television provider.

On the downside, defensives suchas International Power, down 3.4per cent, were among the top fallers yesterday.

National Grid shed 2.1 per cent as

Investec kept its “sell” rating on theutility, saying Ofgem’s seminar on Tuesday only served to highlightthe regulatory uncertainty facingthe industry.

Drugmaker AstraZeneca and TUITravel fell 2.8 and 1.8 per centrespectively after going ex-dividend.

GKN dropped 4.9 per cent after broker Credit Suisse suggested thattheir profit margins were at risk from rising commodity prices.

FTSE closes above 6,000 astraders pick miners and banksTHELONDONREPORT

THENEW YORKREPORT

ANALYSIS l FTSE6,100

5,900

5,700

5,500 8 Nov 26 Nov 16 Dec 10 Jan 28 Jan

6,000.072 Feb

BEST OF THE BROKERS To appear in Best of the Brokers email your research to [email protected]

ANALYSIS l Northumbrian Water

320

300

340

360

17 Nov 19 Jan7 Dec 29 Dec

p307.50

2 Feb

NORTHUMBRIAN WATERJP Morgan Cazenove has upgraded the utility to “overweight” with a tar-get price of 340p. The broker points out that the shares are the worstperforming of the European utilities, but can find no fundamental reasonfor the underperformance. It adds that Northumbrian’s dividend coverremains strong at two times with a high earnings per share forecast com-pared to its peers.

ANALYSIS l ARM holdings

450

350

550


p571.50

2 Feb

ARM HOLDINGSNomura rates the technology group “neutral” with a target price of 500p.The broker has raised its top-line estimates by five per cent for 2011,though it also expects operating expenses to rise seven per cent thanks toincreased competition with Intel. Nomura sees ARM’s strengthening royal-ty rates as a chance for the firm to post attractive long-term revenuegrowth.

ANALYSIS l C&W Communications

48

44

52


p 46.562 Feb

C&W COMMUNICATIONSRBS rates the telecoms group “hold” with a target price of 55p. The bro-ker expects to see strong trading and continued demand in C&W’s Macauand Monaco markets, though the Caribbean mobile and fixed-line salesare set to dip slightly in the firm’s trading update next Wednesday, accord-ing to RBS. RBS also hopes to see signs of improvement in Panama in theupdate following a fresh set of government contracts.

8/7/2019 Cityam 2011-02-03 book


Despite the bears’ fears, investing in China can still payoff – but the risks are not small, writes Daniel Knowles

Shanghai’s skyline has shot up since 2000, as have its stock prices Picture: GETTY

Wealth Management | Funds

18 CITYA.M. 3 FEBRUARY 2011

Another big year for

China starts today

TODAY is the first day of theChinese year of the rabbit. Andrather like rabbits, the world’sstatesmen are caught in the glare

of China’s ascent. Economists arefalling over each other to predict whenChina’s nominal GDP will overtake

America’s, while foreign policy wonksare weighing the implications.Goldman Sachs reckons it could be asearly as 2027.

While China’s rise might be aheadache for international relations,however, it has been a boon for theglobal economy. Investors in Chinahave done particularly well. Thoughthe Chinese stock market has not yetreached its 2008 high, the MSCI Chinaindex is up 109 per cent on 2005.

Some managed funds have donemuch better, by exploiting the relativeinefficiency of China’s capital marketsto find often astonishingly cheapinvestments. The JPMorgan Chinesefund has outperformed the MSCIGolden Dragon benchmark by 28 percent since Howard Wang took over itsmanagement in 2006, for example.Others have done well too.

But recently, even as China begins toassert itself politically, some have

begun to question whether its econom-ic miracle can last. Jim Chanos, a hedgefund manager who got famous by shortselling Enron, has been betting on aneconomic crash in China for over a yearnow.

He argues that China is in the mid-

dle of an immense real estate bubble –pointing out that 70 per cent of theChinese GDP is now spent on fixedasset investment. And “any time youtry to take something that’s 70 per centof your economy and rein it in, transi-tion history tells us that usually therisks are to the downside.”

Most investors are more sanguine, but concerns about the high inflationrate have knocked confidence recently.China has raised its banking reserve

requirements seven times since thestart of last year, and it has increasedinterest rates twice since October.Investors – and not just those in China– are fearing a slowdown in growth. A

World Bank report recently estimatedthat a 1 per cent loss in Chinese GDPgrowth would lead to a 0.5 per cent lossglobally.

But fund managers in China still believe now is a good time to invest.Fidelity is seeking to raise £162m in asecond issue of shares for its ChineseSpecial Situations fund, which investsin mainland China and Hong Kong.

The fund manager, Anthony Bolton, isoptimistic: “China has moved beyondthe stage of an emerging market,” hesays, “And there’s no shortage of inter-esting companies”.

Bolton argues that the Chinese gov-ernment will be successful in con-straining inflation withoutundermining economic growth. Healso believes that by clever stock pick-ing, deep research and hard work,investors can avoid becoming a victimof China’s notoriously crude corporategovernance and unreliable manage-ment.

“The bad companies in China arereally bad,” says Bolton. But by pickingcompanies with managers who havespent time in the West (for example), or

which have large cash reserves, he believes he can avoid them. The fundhas large investments in consumerindustries such as healthcare and alco-hol, although Bolton stresses that he

picks stocks by value. The fund also hasa large proportion of its assets in smalland medium cap shares.

But as Bolton stresses, the importantpoint is to find good investments in astill under-explored market. China hasprobably passed the point where it iseasy to find highly profitable invest-ments without taking on a lot of risk,even given its booming economy.Investors will just have to hope that the

year of the rabbit is a fortuitous one.

ANALYSIS l The Chinese stock market has outperformed since 2005

450

350

250

150

50

Jan 2001 Jan 2003 Jan 2005 Jan 2007 Jan 2009 Jan 2011

Absoluterebasedperformance

Source: Reuters

MSCI China

FTSE World

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Don’t leave it allto the taxman:seven easy waysto lower IHT billsDeath may be inevitable, but inheritancetax need not prevent you from passing onbequests to loved ones, writes Jennifer Hill

WHO do you want to leave

your worldly wealth to when you pop your clogs? Your nearest and dearest? A

furry friend? Charity?Unsurprisingly, the nation’s

favourite beneficiaries are the onesclosest to our hearts, with 87 per cent wanting their assets to go to family,according to Unbiased.co.uk, thefinancial advice website. Still, nearly 4.5m people want charity to benefitfrom their estate and 1.5m people want their pets to inherit their wealth.

Bequests to charities are free of inheritance tax (IHT), but that’s not sofor other beneficiaries. Planning isneeded to make sure you don’t end upleaving the taxman a sizable sum.

IHT is charged at 40 per cent onanything over the “nil rate band” of £325,000. The survivor of a marriageor civil partnership can claim up to100 per cent of their partner’sallowance, giving them a threshold of up to £650,000 in the current tax year.

“This 2007 change made inheri-tance tax planning easier for many people, especially those looking topass on property up to this value,”says Max Coleman, a chartered finan-cial planner at financial adviser AWDChase de Vere.

It might seem like a lot, but giventhe property boom of recent years,many houses – particularly those inprime central London – are worth farmore. So, what can you do to mitigatethis penal death tax?

WRITE A WILL

Firstly, have a valid will to ensure yourassets are passed on as you wish.

Care needs to be taken in cases where a widow or widower remarries

having claimed 100 per cent of thedeceased’s IHT allowance. If he or she were to die before the new spouse,leaving everything to that person, onenil rate band would be lost, as the survivor can’t have three.

“Under these circumstances, thespouse who already has two nil rate bands should consider using willplanning to gift up to the first nil rate band to someone other than the new spouse,” says Bob Fraser, senior clientpartner at wealth manager Towry.

GIVE AWAY ASSETS

You can gift up to £3,000 a year free of IHT or £6,000 if you didn’t make a giftof this kind in the previous tax year. You can also give £250 to any numberof people every year, but you can’tcombine this with the annual £3,000exemption.

Parents can give £5,000 to each of

their children as a wedding or civilpartnership gift. Grandparents can

give £2,500 and anyone else £1,000.

Coleman says: “In reality, use of these exemptions will not have a sig-nificant impact on the IHT liability of an estate valued at more than£650,000.”

You can also give away 100 per centof income, provided it doesn’t affect your standard of living. Gifts to regis-tered charities and political partiesare also exempt.

KNOW THE SEVEN-YEAR RULE

You can make further tax-free giftsknown as “potentially exempt trans-fers”, but you must survive for seven years afterwards. If you die withinseven years and the gifts are worthmore than the nil rate band, taperrelief will apply (so, if you die withinsix years, the tax due will be less thanif you die after one year).

You can give away most assets,including cash and shares, but thesemust be outright gifts from which you no longer benefit. This means youcan’t give away your family home andcontinue to live there unless you pay amarket rent.

SET UP A TRUST

Assets put into a “bare” trust – a trust where the beneficiary is entitled tothe assets at age 18 – count as a poten-tially-exempt transfer.

Unless you are disabled, gifts intomost other types of trusts are limitedto the nil rate band, unless the settloris happy to pay a 20 per cent immedi-ate tax on the excess. A further 20 percent is due if the person making thegift dies within seven years.

GET BUSINESS PROPERTY RELIEF

Consider investing in assets thatattract business property relief, sug-

gests Francesca Lagerberg, head of taxat accountant Grant Thornton. These include most shares listed on

AIM, the junior stock exchange.Holdings are free of IHT after two years, but Coleman warns that theseshares can be “extremely volatile”.

BUY FARMLAND

Less straightforward, but it might bean option for someone with ruralambitions. Farmland qualifies foragricultural property relief of up to100 per cent after two years of owner-ship, but you must actively work theland for “agricultural purposes” as acommercial business.

TAKE OUT INSURANCE

If all else fails, take out a whole-of-lifeinsurance policy that can be used topay your IHT bill. The policy should beheld in trust to avoid the proceeds

falling into your estate and increasing your IHT liability further.

Wealth Management | Inheritance Tax 19CITYA.M. 3 FEBRUARY 2011

Issued by HSBC Bank International, a trading name of HSBC Bank International Limited, HSBC House, Esplanade, St Helier, Jersey JE1 1HS. HSBC BankInternational is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Investment and Fund ServicesBusinesses. Licensed by the Guernsey Financial Services Commission for Banking, Collective Investment Schemes and Investment Business. Licensed byFinancial Services and Markets Act 2000, including the Financial Services Compensation Scheme. However, HSBC Bank International Limited is a memberof the Depositors Compensation Scheme as set out in the Banking (Depositors Compensation) (Jersey) Regulations 2009. HSBC Bank International Limitedis a participant in the Guernsey Banking Deposit Compensation Scheme. The Scheme offers protection for ‘qualifying deposits’ up to £50,000, subject toIsle of Man are protected by the Isle of Man Compensation of Depositors Regulations 2008. For further information on these schemes, please visit theImportant Information section on our website www.offshore.hsbc.com/1/2/important-information. Copies of our Terms and Conditions and AuditedAccounts are available on request. Approved for issue in the UK by HSBC Bank plc. To help us to continually improve our service and, in the interest ofsecurity, we may monitor and/or record your communications with us. © HSBC Bank International Limited 2011. All Rights Reserved.

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8/7/2019 Cityam 2011-02-03 book


F ANCY a new car, luxury holiday or that longed-for loft conver-sion but don’t have the cash? This could be the moment for

you to bag a bargain. As businessesstruggle amid the economic down-turn, they are offering some very good deals, at least to certainclients. With care, you may be ableto net an attractive borrowing rate.

Andrew Hagger, at price compari-son website Moneynet.co.uk, says:“If you’re credit record is in goodshape, there are some excellent bor-rowing options at the moment.”

However, he warns that getting agood credit deal should only be partof the consideration when making amajor purchase, and that peopleneed to think carefully before tak-ing on more debt.

“If the repayments will take up a big chunk of your disposableincome, could you still afford to goout, buy clothes and go on holiday or would it mean being careful with your cash?

“With the government spendingcuts yet to bite, also consider how secure your job is and how you’d

cope if you lost it.”If you’ve taken everything into

account and feel able to borrow tofund that big purchase, here are theoptions for savvy borrowers:

CREDIT CARDSIf you can repay the loan amount in12 months, then consider the TescoClubcard credit card, which giveszero per cent on purchases for 13months.

If you need slightly longer, makethe purchase on your existing creditcard and switch the balance toBarclaycard Platinum, which gives17 months interest-free on transfers. You’ll need to pay a one-off fee of 2.9per cent of the amount transferred, but it’s a price worth paying forsuch a long zero per cent period.

PERSONAL LOANSIf you’re considering a purchasesuch as a new car or home improve-ment, that will take a few years, notmonths, to repay, personal loanrates are competitive.

With the current best-buy loanfrom Sainsbury’s Finance you can borrow between £7,500 and £15,000at a typical rate of 7.2 per cent. If you borrowed £10,000 over five years,

you’d repay £11,873.Note that this is a typical rate: the

rate you’re offered will depend onhow much you want to borrow and your credit score.

Louise Holmes atMoneyfacts.co.uk, the financial data website, says: “Take control of yourcredit. Check your status online viasites such as CreditExpert.com to seehow clean your record is and whether you’ll actually be accept-ed.”

EXTEND YOUR MORTGAGEIf you’re looking to spend seriousmoney – perhaps on a new kitchenor loft extension – consider anadvance on your mortgage.

“The rates will be far lower and, inmany cases, you can make overpay-ments so it doesn’t take 25 years torepay,” says Hagger.

RETAIL FINANCECar dealers and furniture show-rooms often push their ownfinance, and are increasingly offer-ing zero per cent deals to shift stock.

Do your homework. Ask for thetotal cost of finance, including fees,and find out if there are penaltiesfor repaying early.

For some, it’s a borrower’s marketBY JENNIFER HILL

PERSONAL LOANS▲

Wealth Management20

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PERSONAL FINANCE NEWSBY DONATA HUGGINS

SPACE INVADERS COST £66MSpace invaders, houseguests who stay

with friends and family for weeks at a timewithout paying rent, are causing havoc.More than 4.9m homeowners have beenleft counting the cost of houseguests whooverstayed their welcome last year. DirectLine research shows that the spaceinvaders caused £66m in damages to theirhosts’ homes, leaving a trail of devastationin their wake – breaking furniture, prizedheirlooms and antiques. Perhaps it is timefor the hosts to chuck them out or at leastupgrade their insurance.

CREDIT CARD RATE HITS 13-YEAR HIGHThe increased competition in the creditcard market at the end of the 1990smeant rates fell dramatically, indeed theykept falling until 2006. Now, however, theaverage rate for new customers hit a 13-year high at 18.9 per cent. Michelle Sladeof Moneyfacts.co.uk explains: “The UK con-tinues to suffer from a high level of unem-ployment and providers are worried about

the increased risk of customers not repay-ing their debts.”

MUM KNOWS BEST ON MONEYM&S Money research shows that a

shocking 36 per cent of Brits admit thattheir mum has the most influence on theway they handle their finances. This iscompared to 32 per cent who say theirfather advises them. Despite the factthat more people say that their mum hasbeen the biggest influence on theirmoney habits, more than half (55 percent) of people say their father took con-trol of their household finances whilethey were growing up.

SAINSBURY’S INCREASES RATESThe Bank of England might not be notch-ing up its interest rates any time soon, butSainsbury’s Finance has. Yesterday thesupermarket-cum-financier began offer-ing 2.7 per cent gross annual equivalentrate (AER) on its Online Saver accountand 2.5 per cent gross AER on its EasySaver account. The accounts allow you tomake deposits into your saving accountwhile you are doing your shopping at

Sainsbury’s – the accounts even give youNectar points.

BEST BUY PERSONAL LOANS | £10,000 OVER FIVE YEARS

Provider Typical APR Monthly Payment Total Repayment

Sainsbury’s Finance 7.2% £197.88 £11,872.80

Nationwide Building Society 7.3% £198.33 £11,899.80

Tesco Bank 7.4% £198.50 £11,910.00

M&S Money 7.5% £199.20 £11,952.00

Post Office 8.9% £205.39 £12,323.40

Source: Moneynet 01.02.2011

BEST BUY CREDIT CARDS | FOR BALANCE TRANSFERS

Provider Card Type 0% term length Total Repayment

Barclaycard Platinum 17 months 2.90% min £7.50

MBNA Platinum 16 months 2.88% min £3.00

NatWest Platinum 16 months 2.90% min £5.00

Virgin Money MasterCard 16 months 2.89% min £3.00

Source: Moneynet 01.02.2011

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THE new Alpine luxury is understat-ed, contemporary elegance in a tra-ditional-looking wood building,

with lots of hand-crafted featuresand discreet state-of-the-art facilities. It islocated in a small and original village – nota purpose-built concrete bunker.

These days, intelligent luxury meanscompletely no-hassle holidays – you own

your own property, but it is fully managed by professional hoteliers. When you arenot there, it is rented out, earning its keep.

When you’re there, it’s a fully-servicedhome and always in perfect condition

when you arrive, with no surprises likefrozen water pipes on Christmas Eve. It’s aprivate experience with impeccable serviceand concierge service throughout the year.

It’s somewhere where you can drive theRange Rover with a ski box into the garage,

and parking in a space wide enough sothat the children can swing open thedoors without chipping your paint-

work. Crucially, it’s also a placethat offers both winter skiing anda range of delicious mountain airsummer holidays, such as golf,mountain hiking, mountain bik-ing and lake swimming, freshmountain meadow walks, andlocal mushroom or wild berry picking.

And when you’re de-stressingmid-week or just have a weekend, itmeans being just one hour from amajor airport, with Les Domainesopen 10 months of the year.

Of course, great food is key to complet-ing the experience. Here, there are numer-ous options, from gourmet cuisine to anexcellent brasserie. And to unwind – theintelligent traveller can relax in state-of-the-art spa facilities including a top-linegym, yoga/pilates studio, hammam, andswimming pool with a health bar. There isa range of health and well-being treat-ments specifically tailored to your person-al needs, available in the SPA treatmentmenu.

Investment in intelligent luxury offersan enviable lifestyle that takes care of itself, knowing that your investment alsosupports the small local community.

And all this is in an intelligent building;completely up-to-date, eco-conscious, usingentirely natural construction and finishes,

with very low energy use, state-of-the-artsystems controls, while still retaining old-

fashioned wood burning fire-places. This is Les Domaines.

Then there’s the skiing. Smartskiers want nothing less than ski-in

ski-out, with access to a major skiarea that has a range of skiing, from

the utterly hopeless to the expert extremeskier. They also want a ski concierge toorganise their skiing needs: from passesand equipment to lunch reservations atexclusive mountain restaurants. And itgoes without saying, they want an après-ski sauna, steam room and massage; aheated swimming pool and their own hottub on their balcony or terrace for roman-tic lounging.

Well, intelligent luxury for smart skiersis here at Les Domaines de Ferme deMontagne.

For years Ferme de Montagne, in thesmall original French village of Les Getsand only one hour from Geneva, has beenone of the most sought after boutique skihotels in the French Alps. A luxurious,

below-the-radar bolt-hole renowned for itsfood and hospitality, it has been described

by the Daily Telegraph as “the kind of chalet you would instantly book – if only

you knew it existed” and as “one of ourfavourite hotels’ by Anneka Rice in theMail on Sunday. With just eight rooms,however, demand often outstrips supply.

And so now the Ferme’s owners are build-ing 20 apartments next door in the samedesirable style – the first serviced five-starapartments of their sort in France – calledLes Domaines de Ferme de Montagne.Such is the demand to own a little bit of the Ferme’s experience that almost half of the apartments have already been sold.

Those wanting to snap up their own sliceof Savoyard luxury need to move fast.

Just an hour’s drive from GenevaInternational Airport – compared withthree hours for Val d’Isere, Courchevel orMeribel - Les Domaines is perfect for week-end getaways, especially for UK-basedowners.

To be completed for winter 2011-12, theapartments at Les Domaines offer the sortof luxury that will satisfy even the most

jaded City worker. Ranging from studios,

The new Alpineluxury is understatedelegance, hassle-freeand a clever invest-ment opportunity thattakes care of itself,says John Grimshaw

Lifestyle | Travel

22 CITYA.M. 3 FEBRUARY 2011

Above: the exclusiveFerme de Montagne

Below: Les Domaines

Intelligentluxuryfor smart skiers at

Les Domaines

• Lift access serving only 4 apartments per floo• Magnificent hi-spec interior decor with designer furnishings, oak

floors throughout, and exquisite wood panelling and finishes• Living area with leather sofas around a wood burning fireplace• A luxury Italian yacht-inspired kitchen• Master bedroom with personal hot-tub on the balcony overlook-

ing the snow• En suite bathrooms with heated floors and mirrors• Rain showers and capacious baths• Children's bedroom with Orient Express style leather drop-downbanquettes, or yacht cabin berths to make 4 berths• Entry hall drying cupboard for coats• State-of-the-art technology for audio-visual systems and high

speed broadband• High level security systems• Private club screening room• Private individual 500 bottle wine-cellar in the main stone vault-ed wine cellar.• Personal storage room - we clean and store your clothing until

your next stay• Heated boot and ski storage• Spa with swimming pool, sauna, hammam, gym, pilates/yoga

studio and treatment rooms

EXCEPTIONAL FEATURES IN EACHAPARTMENT INCLUDE:

SPECIAL PROPERTY FEATURE

“ Wonder fu l e xper ience

- a l l bou t ique s k i ho te ls

s hou ld be t h is good! ”

Tr ipad v i sor

“A sump tuous s k i lodge...

s imp l y fan tas t ic food

Tom Par ker Bo w le s, L i ve

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two bedrooms to enviable four bedroompenthouses, all with a roaring open fire, aprivate hot-tub on the balcony, designerfurnishings, swish Italian kitchen equip-ment, and top-of-the-range audio-visualsystems. Each apartment also has a private500 bottle wine cellar within the mainstone-vaulted cellar, independent privatestore room (with all your belongings care-fully restored to your apartment when youare in residence), separate heated boot andski storage (serviced and prepared prior to your return), as well as a proper-sized park-ing space in the underground garage.

It’s an ideal investment opportunity, asthe tourism-encouraging French state pro- vides tax breaks to owners for rentingtheir apartments when they are not in res-idence themselves. Les Domaines will bemanaged by Ferme de Montagne, 5* hote-liers successfully established in the skimarket for 10 years with a unique andloyal client base. They organise the rentals,administer the payments to the ownersand take care of all aspects of Frenchadministration as well as maintenance of the property. Truly hassle free.

At the heart of the Ferme de Montagneexperience is conviviality and superb food(“the best food in Les Gets” said Time Out).

Executive chef Alan White will oversee theintimate fine-dining restaurant and casual brasserie, both with fireplaces. His cook-ing has been effusively praised in LiveMagazine by Tom Parker Bowles, who saidof his recent visit that he had one of the best dishes he had eaten all year, “superiorto Tetsuya Wakuda’s signature dish – Tetsuya being arguably Australia’s greatestchef”.

Who you rub shoulders with and who you meet in this exclusive, clubby but laid- back establishment is all part of yourmemorable holiday experience. As one well-known TV personality confided: “I solove coming to stay here, I always meetsuch yummy people”. Meet at the double-height bar with leather sofas around anopen fireplace, in the quiet panelledlibrary, at the rustic table in the stone vaulted wine cellar around tapas and winefrom your own private cellar, or at the barof the private cinema Or even at the juice bar of the seriously good spa with itshealthy menu, indoor pool, sauna, steamroom/hammam, several beauty therapy rooms, yoga and pilates studio, and gym.

Of course, all the luxuries would benothing without quality winter skiing for both experts and beginners, and the mas-

TREAT YOUR LOVEDONE TO A GREAT BOXOF CHOCOLATESSEE PAGE 24

23CITYA.M. 3 FEBRUARY 2011

SPECIAL PROPERTY FEATURE

Right: Al fresco diningon the terrace insummer.

Below: summer atFerme de Montagne.

• The first five-star Hotel Residence in France, with24-hour concierge, superb cuisine by the bestchef in the Alps, and the same relaxing,hospitable atmosphere as the famous

Ferme de Montagne, widely regardedas one of the most luxurious boutiqueski hotels in the Alps.• 20 Beautifully designed apart-ments, all-wood construction insympathy with the local Farmhousestyle - built with natural finishes and

materials; these are eco-consciousapartments with low-energy use.• Exceptional features (see box) withaccess to gourmet and brasserie restau-rants, bar, library, wine cellar, swimming pool,spa, and cinema.

• An ideal investment opportunity - Tourism-friendly

French law gives tax breaks to owners rent-ing their apartments out. Les Domaines

managers organise the rentals,store then restore the owners'

personal effects before andafter rental use, and adminis-ter the payments to the own-ers.• Fantastic skiing in the650km Les Portes du Soleilski domain, with more snow

than many higher resorts anda season that lasts from

December into April.• Wonderful summer activities

from June to October, including golf,mountain walking and hiking, mountain

biking and lake swimming.

WHAT MAKES LES DOMAINES SO SPECIAL?

sive Portes du Soleil region crossing intoSwitzerland has that in spades, with excel-lent snowfall, runs for every level of skier,plus ski-in ski-out of the property rightthrough the season.

The chance to own a five-star property just63km from Geneva doesn’t come along very often, to say the least, and those lucky souls who have been enchanted by La Fermeare sure to be queuing up to pick up one of these sumptuous properties. Great food, wonderful, friendly hospitality and a fantas-

tic investment too – it’s not a combinationthat you see too often. Discerning lovers of luxury and smart investment had bettermove fast. Apartments are expected to be completed by winter 2011-12. Prices range from £475,000 up to £2,100,000 ( € 570,000 up to € 2.4m). For moreinformation please contact Peter Bevan, Director of Sales at Sotheby’s, 26A Conduit Street, W1S 2XY; tel: 0207 495 9580; fax: 0207 495 9589 or email peter.bevan @sothebysrealty.com. To stay at Ferme de Montagne phone 00 33 4 50 75 36 79.

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Lifestyle | Food and Drink24 CITYA.M. 3 FEBRUARY 2011

Detox plus booze? Kind of . . .

I’LL be honest, I wasn’t terrifically enthused with the idea of cocktailscombining booze with, er, root veg-etables. Actually not just root vegeta-

bles, a variety of veg, though withparsnip and beetroot playing a coupleof starring roles. I was picturinggloopy veggie soup with gin stirred inas I climbed the stairs to Roast, the bar and restaurant overlookingBorough Market.

However, a few things werepiquing my curiosity. Firstly, if you’re going to put vegetables indrinks, Borough Market is probably the place to do it. Secondly, for a bit of time veggie ingredients have been pop-ping up in the more creative fringes of New York’s boho cocktail scene, andanything that’s a hit in NYC inevitably ends up a hit here sooner or later.

Well, the sooner the better, as far asI’m concerned. A perky pink aperitif (thePink & Perky, actually) with gin, bittersand rhubarb puree? Terrific. Hendricksgin mixed with parsnip puree, apple juice and poppy seeds? Sweet, caramel-

flavoured deliciousness. White tequila with beetroot puree, pink prosecco and

cumin? A sharp, earthy wonder of beauti-ful, criss-crossing flavours. A red cabbagedaiquiri is equally stunning, and so glow-ingly pink it practically looks synthetic.

VITALITY AND VITAMINS“If it’s a natural product that

has so much colour, it’s a symbolof health, vitality and vitamins,”says Esther Medina, theBrazilian mixological maestro

behind these concoctions. So notonly do they look and taste splen-

did, and splendidly different,they’re a good way to extend that

New Year detox even while you toppleoff the wagon.

Medina spends her time making infu-sions and purees from the ingredients shefinds in the market to use in her cocktails. Vodka is infused with linseeds and pump-kin seeds, while herbs and other veg,including spinach, sage, sweet potatos andpea shoots, get incorporated. The only thing she won’t use is cucumber.

“I just don’t like it,” she says. “And Ihaven’t found a way to use mushrooms

yet, but I’ll get there.”www.roast-restaurant.com

TASTING NOTESTIMOTHY BARBER is impressed by some tasty vegetable-based cocktails

THIS week’s hottest launch took placedown an unassuming alley off Soho'sBrewer Street (the old RaymondRevuebar site) where imposing oaken

doors hide London's newest spectacle, TheBox. This sister club to NYC's theatricalspeakeasy is not for the faint hearted. Luridmurals line the walls of the womb-like recep-tion room where would-be revellers awaittheir fate. Ascend to VIP, with its private barand dark leather settees or head for the cav-ernous main room, dominated by a velvet-cur-

tained stage where the most licentious of fantasies are brought to life. From theProhibition-flavour of the drinks menu anddécor to the retro swing of the music, The Boxis an ideal destination for beautiful peopleyearning to feel just a little bit damned.

The other major launch this week is equal-ly hip with a decadent feel but on a slightlygrander scale. The Four Seasons Park Lane isfinally here following a stunning £125m reno-vation and with it comes the seductiveAmaranto (www.fourseasons.com/London).Comprised of lounge, bar, restaurant and evena garden terrace, Amaranto impresses atevery turn. Designed by Pierre Yves Rochon,who recently reimagined The Savoy, there areeastern touches mixed with the contemporaryand the eclectic. Black marble, deep reds, wallsof wine and the most spectacular chandelier.

Back in Soho the ever popular Polpo onBeak Street will next week open the CichetiBar (www.polpo.co.uk) below the dining room,to provide much needed overflow space. You’llbe able to enjoy light cicheti snacks and“ombra” in the rustic Venetian/Soho settingwith exposed brickwork and wooden commu-nal tables, but it will be the buzzing atmos-phere which will no doubt be the main draw.

The Polpo Cicheti Bar will serve classiccocktails, including signature Venetian Spritz,along with a carefully selected NorthernItalian wine list. Owner Russell Norman keepshis finger on the pulse and this simple tavernbelies a savvy understanding of what works.

Finally, for Paddington commuters there’s aplush new place to go. Searcys, also behind StPancras Grand, has opened PaddingtonChampagne Bar (www.searcys.co.uk) in theheart of the station. Offering fifteen sparklingvintages by the glass including Dom P, it will helpyou float to your destination even if the rest of your journey is not quite first class.Tim Badham is the founder of Innerplace,London’s leading providers of VIP entertain- ment, including film premieres, fashion shows,

launch parties and members club access.www.innerplace.co.uk

Tim Badham

GoingOut

From sleazychic to grandhotel-glamWith Valentine’s Day

just round the corner,

we source the bestromantic choccies LMC’s “haute couture” choco-

late box is full of handmadechocolates with romanticflavours like champagne rose,dark chocolate and ganache andcaramel saulted butter.£13-£87 (depending on number of chocolates).www.lamaisonduchocolat.co.uk

La Maison duChocolat’s Coeur

de Ganache box

Another enticing offering from LMC – a sharingdessert available at its boutiques in Piccadilly, Harrods

and Selfridges, containing coconut dacquoise, darkchoclate mousse, chocolate sabayon and otherdelights. £13.50 www.lamaisonduchocolat.co.uk

La Maison du Chocolat’sCouer à Couer

Latticed 71.1 per cent chocolatefilled with hand-painted miniheart caramels, sitting in a

heart-shaped box surrounded byrose petals (sprinkle ‘em in thebath or on the bed later!). £30 www.demarquette.com

Demarquette’slatticedchocolate heart

A glam selection of romantic choccies includingchocolate oysters, pralines, truffles and hearts –and some naughty chocolate lips – in the “Sealedwith a Kiss” box. We also love HC’s Oysters &Truffles box. £40 www.hotelchocolat.co.uk

Hotel Chocolat’s Sealedwith a Kiss box

For the love of chocolate

Put your loving intentions in chocolate and writingform with Artisan Chocolat’s Declaration of RomanticFeelings box – fill in the blanks on the official notice onthe box, and dip into 54 assorted choccies.£37.50, www.artisanduchocolat.com

Artisan Chocolat’s romanticdeclaration box

City master chocolatier Paul A.Young is offering beautifullystyled roses with heads of white

or dark chocolate. Alternatively,there’s a mini heart made fromrose-scented chocolate.Heart £10.95, roses £10.95 a stem (but buy a bunch).www.paulayoung.co.uk

Paul A. Young’schocolate rosesand hearts

10 PAGE WATCH

SUPPLEMENT

Recommendations forthe best bonus buys

TOMORROWIN CITY A.M.

The newly-opened Paddington Champagne Bar

8/7/2019 Cityam 2011-02-03 book


C

OLIN FIRTH’S portrayal of George VI in The King’s Speech will havestruck a chord with many in busi-ness. True, they might not have

had to address the nation as it goes to war, but many will have faced the ordealof delivering speeches to a large live audi-ence. It’s one of the hardest things in any- body’s career. So how do you do it better?

A large part of delivering a speech wellis about structuring it, says Liz Banks,managing director and a senior trainer atSkill Studio, a company that trains peo-ple to give better presentations andcounts 50 FTSE 100 companies as clients.“The point of a speech is to communicateinformation to an audience. Make surethat it has a clear, simple structure, astrong opening and ending, and thateach section does too. This is the skeletonthat holds your speech together, andhelps to prevent you going off on a tan-

A few simple techniques willhelp make you a better publicspeaker, writes Jeremy Hazlehurst

Confidence puts anaudience at ease

Business Features | Careers

25

Be the king of presentations

IN THE film The Social Network, theoriginal co-founder of Facebook,Eduardo Saverin, freezes the company’s bank account after feeling unappreciat-

ed by Mark Zuckerberg. An audible sigh of sympathy spreads across the cinema, asEduardo rants and raves in his attempt to

get his contribution recognized. You don’thave to be behind a social phenomenon tosuffer from this problem. But what is thesolution? How do you get your perform-ance recognised?

First, agree with your manager what suc-cess would look like ahead of time. Writtengoals increase our performance and makeit easier to recognise great performance when it happens. They also make it a lotharder to re-write history.

Talk about your achievements in termsof the lessons you have learnt. No-one likesa show-off but showing how you’ve grown will present you in a humble light andensure your achievements are noted.

Share the glory by explaining specificthings that colleagues and bosses did tohelp with your achievement. The more thatother people feel that they gain from yoursuccess the more they will want to encour-age it and talk about it.

Use data to make favourable compar-isons. Perhaps this year’s conversion ratecompared with last year’s or how your teamhas done compared to the French or themonetary value of the increase in customerservice in your area. Numbers are the lan-guage of business.

Seek out opportunities to present yourproject. Maybe there’s an award you canenter your team for (or encourage yourmanager to do this). Failing that, seek outforums to share best practice and ask for aslot on the agenda.

Of course, the best way to get appreciatedis to do good work, and keep doing it. In theend it will become obvious. And if it does-n’t, either you’re in the wrong place, or your work isn’t as good as you think.

Octavius Black, CEO, The Mind Gym,www.themindgym.com

OCTAVIUS BLACK

HAPPINESS is not achieved by trying to behappy – it is a question of pursuing otherends. Achieving them makes you happy. Takehaving children. Break it down into the

nappy changing, sleepless nights and messymeal-times and you might wonder what

exactly makes it an enjoyable experience, butmost people say it is the best of their life. Orlook at mountain-climbing: it's a miserableslog, but for some reason makes peopleincredibly happy.Obvious? Perhaps, but for John Kay, a visit-ing professor at the London School of Economics and a fellow of St John’s Oxford,these examples contain a profound truthabout the world, which is explained by theconcept of “obliquity” – or obliqueness. Putsimply, the idea is that the world is compli-

cated and most goals that are worth achiev-ing are not achieved through direct routes.

Taking the oblique route is thefastest way to business success

The world is not like a Sudoku puzzle, withcomprehensible rules. The key conceptcomes from Benjamin Franklin, who sawthat human beings tend to rationaliseeverything with hindsight but that it doesnot follow that we can know beforehandwhat route we need to follow to achieve agoal. A mathematician can describe the arcof a David Beckham free kick with a formula,but it doesn’t follow that Beckham solvedthat equation when he struck the ball. In thedeathless words of the footballer, he “just hit

it”. Plans and goals are pretty useless.Muddling through is far more likely to get

results.

Obliquity might be a terrible name, but itis a brilliant concept and is especially use-ful in business. Often, people look at suc-cessful businesses and try to extract rulesthat were supposedly followed. But in fact,says Kay, all good decision-making is amessy process. Governments and business-es feel that they need to show the pretenceof following rules, but that is just becausethey think they should. In fact trial anderror, experiment and obliquity are the wayto get good results.We all know that reams and reams of bank-ing regulations are not the way to create asecure banking system. And the most suc-cessful businesses aim for excellence, notdividend maximisation – not somethingthose peddlers of books promising five, 10 or20 rules for success would want you tobelieve, but so be it. This is an elegant, simplebook and, rarely for a business book, is writ-ten by a man who actually understands theacademics and philosophers he quotes. The

best nine quid you’ll spend this year.Jeremy Hazlehurst

OBLIQUITYBY JOHN KAYProfile Books, £8.99

Jeremy Hazlehurst

gent,” Banks says. Speaking in shortersentences helps too, making it easier forthe audience to understand what you aresaying.

You should not use a script, but nei-ther should you just freewheel. Use bul-let-points that direct the speech. Thatsaid, if there are technical parts of thespeech, for example legal language where the exact formulation of words is very important, then it is right to readthose out. If the message is clear peopleare more likely to keep listening, which will build your confidence.

There are also tricks to encourage theaudience to react in a certain way. KatieBest, director of the MBA course at BPPUniversity in the City, on which studentslearn presentation skills, says that “A three-part list can work wonders forprompting applause. Or a longer list withthe final part as a contrast can do thesame. Our ears appear to be trained topick out these constructions and seethem as places where we should clap.”

Dramatic pauses are also important,says Best. “But make sure they are in theright place. Punctuate your speech withgaps in the wrong place and audiences will find themselves drawn to the wrong

points. It may lead the audience to think you said something that you really did-n’t, or at least that you didn’t mean tosay.”

Body language also matters. Liz Bankssays that you should “walk out with con-fidence, and stand with weight evenly on both feet. Take your position slowly andmake sure you are comfortable before you begin. Start clearly and slowly, with-out fidgeting or mumbling. Work on breathing slowly and deeply – concen-trate on a long out-breath and the in- breath will take care of itself.”

While speaking, make eye-contact withrandom members of the audience fromtime to time, and focus on them for threeor four seconds to create a connection with the audience. “It also gives you anice easy head-movement. People oftenhold their head to one side because of tension,” Banks adds.

Also remember to play to yourstrengths. People tend to concentrate on what they do badly, forgetting what they do well. Try to minimise the former, andmaximise use of the latter. Hard, but worth it. As Katie Best says, “A well-deliv-ered talk can change the average manag-er into being perceived as a leader.”

How to make surethat your manager

appreciates you

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T E R

R E S T R I A L

HUMAN PLANETBBC1,8PM

Theingenioussurvivaltechniques usedbypeoplewho live in rainforests,hometomore species ofplants andanimalsthan anyother habitat onEarth.

LOUIS THEROUX: THEULTRA

ZIONISTS BBC2,9PMThe broadcaster joins Jewish settlerson the Israeli-occupied West Bank,examining how they live amid constanttension and conflict.

JUSTIN LEE COLLINS:TURNING

JAPANESE CHANNEL5,9PMThe comedian heads to Osaka tomaster a traditional form of stand-up,before visiting the Edo Wonderlandtheme park.

BBC1

SKY SPORTS 17pmSky Sports News atSeven 7.30pm SPL Round-Up8pmThe Rugby Club: Rugbyunion magazine. 9pm Ringside:Boxing magazine. 10pmPremier League Review 11pmTime of Our Lives 12amRingside 1amSPL Round-Up1.30am Premier LeagueReview2.30am The RugbyClub 3.30am Ringside 4.30amPremier League World 5am-

6am Premier League Review

SKY SPORTS 26.30pm Premier LeagueReview7.30pm Live Netball10pm WWE: Late Night – Raw12am WWE: NXT 1am-3amInternational One-Day Cricket

SKY SPORTS 37pm European Tour Golf: TheQatar Masters. 9pm Live PGATour Golf: The Phoenix Open.12am European Tour Golf 2am-5am PGA Tour Golf

BRITISH EUROSPORT7pm Live Snooker: The GermanMasters. 10pm Boxing: VinnyMaddalone v Tomasz Adamek.12am-12.30am WATTS

ESPN7pm Goal! 7.30pm ESPN Kicks:Premier League 7.45pm LiveSerie A 9.45pm ESPN Kicks:Scottish Premier League 10pmUFC Unleashed 11pm PremierLeague Review 12am Goal!

12.30am ESPN Press Pass1am Live NBA Basketball3.30am Goal! 4am-6am LiveBasketball

SKY LIVING7pm Ghost Whisperer 8pmCriminal Minds 9pmFILM 40Days and 40 Nights 2002.10.50pm Celebs 24/7 11pmCriminal Minds 12am CSI:Crime Scene Investigation2.40am Charmed 4.20amFour Weddings 5.10am-6amMaury

BBC THREE7pm Top Gear 8pmTheWorld’s Strictest Parents 9pmCannabis: What’s the Harm?10pm EastEnders 10.30pmLunch Monkeys 11pm FamilyGuy 11.45pm Cannabis: What’sthe Harm? 12.45am LunchMonkeys 1.15am The World’sStrictest Parents 2.15am MostAnnoying People 20104.10am-5.15am Sun, Sex andSuspicious Parents

E47pm Hollyoaks 7.30pm Friends9pm The Big Bang Theory9.30pm How I Met YourMother 10pm Skins 11.05pmRude Tube: Animal Madness12.05am Scrubs 1.05am DirtySexy Money 1.50am Skins2.45am Beauty and the Geek3.30am Life Unexpected4.10amYoung,Sexyand Sporty:The private lives of athletes.4.50am-6am Switched

HISTORY7pmHeir Hunters 8pm IRTDeadliest Roads 10pm SwampPeople: A looming stormthreatens to drive the alligatorsinto hibernation. 11pm IRTDeadliest Roads 1amOilRiggers 2am Swamp People3amThe Nostradamus Effect4amUFO Files 5am-6amAncient Discoveries

DISCOVERY

8pmHow Do They Do It?8.30pm How It’s Made:Copperpipe fittings and pepper mills.9pm Weird or What? 10pmExtreme Engineering 11pmFrontline Battle Machines withMike Brewer 12am Bear Grylls:Born Survivor 1amDeadliestCatch 2amMystery of the LostCatacombs 3am Raging Planet3.50am Chris Barrie’s MassiveEngines 4.40am Mystery of the Lost Catacombs 5.30am-6am How Does That Work?

DISCOVERY HOME &

HEALTH7pm A Baby Story 8pmYouAre What You Eat 9pm Kids’Hospital 10pm The Real ER11pm Critical Condition 12amKids’ Hospital 1am The Real ER2amCritical Condition 3amYou Are What You Eat 4amBringing Home Baby 5am-6amA Baby Story

SKY18pmThe Middle: Access AllAreas:The making of theAmerican comedy. 8.30pm TheSimpsons 9pm Thorne:Scaredy Cat 10pm A League of Their Own 11pm Inside: PrisonTactical 12am Road Wars1.50am Border Invasion USA2.40am Justin Lee Collins:Ballroom Dancer 3.30am The4400 4.20am Don’t Forget theLyrics 5.10am-6am Are YouSmarter Than Your 10 YearOld?

BBC2 ITV1 CHANNEL4 CHANNEL5

S A T E L L I T E &

C A B L E

TVPICK6pm BBC News6.30pmBBC London News7pm The One Show7.30pm EastEnders: BBC News8pmCHOICE Human Planet9pm Outnumbered: Peteworries hemight beoutof a job.9.30pm Not Going Out10pm BBC News

10.25pm Regional News10.35pm Question Time11.35pmThis Week:Skiing Weatherview12.25am Sign Zone: The Battlefor Bomb Alley: Panorama12.55am Sign Zone: Countryfile1.55am Sign Zone: AntiquesRoadshow 2.55am Sign Zone: RipOff Britain 3.35am-6am BBC News

6pm Eggheads6.30pmGreat British RailwayJourneys7pmWho Does What?8pmMichel Roux’s Service: Thetrainees prepare for service atthe chef’s own restaurant, LeGavroche. Last in the series.9pmCHOICE Louis Theroux:

TheUltra Zionists: Thelives of Jewish settlers on the WestBank.10pm The Grumpy Guide toFood and Wine10.30pm Newsnight: Weather11.20pm Mad Men12.05am BBC News3.35am Close 4am-6am BBCLearning Zone

6pm London Tonight6.30pm ITV News7pm Emmerdale7.30pm The Value of a Degree:Tonight: Investigating the trueworth of a university degree.8pm Emmerdale8.30pm Coronation Street9pm Marchlands

10pm ITV News at Ten10.30pm London News10.35pm Odd One In11.20pm Send in the Dogs12.10am The Zone; ITV NewsHeadlines2.15am The Jeremy Kyle Show3.10am The Value of a Degree:Tonight 3.35am-5.30am ITVNightscreen

6pm The Simpsons6.30pmHollyoaks7pm Channel 4 News7.55pm 4thought.tv8pmRelocation, Relocation9pm Rome Wasn’t Built in aDay: The builders construct thegiant timber frame.10pm 10 O’Clock Live

11.05pm Big Fat GypsyWeddings12.10am Diverse Nation1.05am Coming Up: Dip: Drama,starring Robert Sheehan. 1.35amFILM Grave of the Fireflies:Animated drama, with the voice of Tsutomu Tatsumi. 1988. 3.10amBrothers & Sisters 3.55am HillStreet Blues 4.50am ER 5.35am-6.20am Countdown

6pm Home and Away6.25pm Live from Studio Five7pm Five News at 77.30pm Top Trumps: All TerrainVehicles: Five News Update8pmSecrets of the VanishingSphinx: Investigating how andwhy the Egyptians built thesculpture; Five News Update

9pmCHOICE Justin LeeCollins: Turning Japanese10pm FILM The Punisher:Comic-book thriller, starringThomas Jane and JohnTravolta. 2004.12.25am SuperCasino4.05am FBI Files 4.55am RoughGuide to Journeys 5.10am WildlifeSOS 5.35am-6am House Doctor

19 28

13 16

16 15

5 15 10

35

27 12

41

17 6 6

16 17

18 26

20 11

11

7

30

23

14

23

12

7

4

44

8

11

42

3

10

18

22

10

38

29

13

10

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

1 Tiny (5)

4 Young girl (4)6 Keen on (4)8 Not censored (5)

9 Bathroom pipesand fixtures (8)

12 Stew (4)

13 City in westernGermany (5)

15 Arboreal mammal (5)17 Native o Warsaw,

or example (4)

19 Cooking (meat)by dry heat inan oven (8)

21 Assistants (5) 22 Marine mammal (4)

23 Faucets (4) 24 Skin disease afecting

domestic animals (5)

DOWN

1 Hole in which water

has collected (4)2 Cancel (5)

3 State o beingdisregarded ororgotten (5)

4 Venture involvingrisk but promisinggreat rewards (4,4)

5 Lucier (5)7 Succession o notes

orming a distinctivesequence (4)

10 Be lazy or idle (4)

11 Kept woman (8) 14 Constant (4)

15 Begin (5)

16 Flexible pipe orconveying a liquid (4)

17 Religious song (5) 18 Animate (5)

20 Great merriment (4)

E

E

Y

G

NM

D

R

I

C H E A T M R O W

U N E L O P E I

D O G M A U S S

D I S A R D I N E

L A N T E R N D

E E G E D

E R O M A N C E

B U R R I T O T A

U I D T R I E D

L N I E C E A L

B A G R L O L L Y

4 5 1 2 6 5 1 8

9 7 2 8 1 4 2 6

5 8 1 7 2 5 9

2 9 8 8 9 6 7

6 8 9 5 2 4 7

2 3 4 1 8 1 3 9

9 8 7 5 6 4 3

7 9 3 5 4 3 9

1 5 9 8 3 4 8

4 9 8 6 2 4 5 6

2 6 7 4 1 3 2 5

WORDWHEELThe nine-letter word was

NERVOUSLY

Lifestyle | TV& Games CITYA.M. 3 FEBRUARY 201126

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RBS

Nations i n a s s o c i a t i o n w i t h

Can Englandlive up to top billing?

6PLUS In-depth profile of every

team AND Kyran Bracken’s view

MATCH CENTRE

All the fixtures,venues and times

YOUR 12-PAGE GUIDE PACKED

WITH VIEWS AND ANALYSIS

2011

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FOR RUGBY fans February meansone thing, and that’s the mouth-

watering prospect of anotherRBS 6 Nations Championship.

It’s shaping up to be a two-horse race, but don’t expect to see yet anothergrand slam.

England go into this year’s compe-tition as favourites, a status I don’tthink is fair or does them any favours.I think expectations are too high onthe back of glimpses in the summerand autumn, and it’s a bit harsh to beexpecting them to win the tourna-ment. We haven’t won it since 2003and suddenly everyone thinks we’regoing to win. It’s far too much.

The Rugby Football Union have setEngland boss Martin Johnson a targetof finishing in the top two – that’smeaningless; you set out to win itanyway.

Let’s see what happens but themost important thing is they show they’re improving and will be able toperform well at the World Cup.

England have got a really toughstart against Wales who are very strong in the back-line, with the likesof James Hook and Mike Phillips –great players. There’s a lot of firepow-er there but they have injuries in the

front row and probably don’t have

the pack to fear.Scotland are looking a lot better;

they have really improved under Andy Robinson. They are still very one-dimensional and don’t look likescoring many tries. Yes, they areextremely well drilled in their setpiece, but they don’t have that cut-ting edge. I think it’ll take time butthey’re definitely a team to watch.

If France turn up, there is no rea-son why they can’t repeat last year’sRBS 6 Nations success. They are anextremely dangerous team when

vaguely in form, with incredibly tal-ented individuals. They are certainly a team to fear but don’t seem to travel

well, which makes their trip to Twickenham crucial.

Ireland won the grand slam justtwo years ago but still lack consisten-cy to compete all the time. They are

very good at home but didn’t do so well in the autumn. They have lots of seasoned players but often seem to betrying to find their feet, and rely heavily on captain Brian O’Driscollplaying well.

It looks like another wooden spoonfor Italy. They are getting better andI’m a big fan of their coach, Nick Mallett, but they are still developingand at the moment are still just notgood enough.

In the end I think it will be between France and England, and if pushed I’d plump for Les Bleus justshading it on points difference. Kyran Bracken was speaking in associationwith GamePlan Solutions – Managing high profile and popular sport stars – Speakers, Leaders, Motivators, Ambassadors –www.gameplansolutions.co.uk

6 Nations Rugby 29CITYA.M. 3 FEBRUARY 2011

England thechief threatto France’stitle defenceBut don’t expect another grand slam,says former England scrum-half

EXPERT PREVIEW

KYRAN BRACKEN

France won the grand slam last year, but don’t expect another team to dominateto the same extent

Picture: ACTION IMAGES

RBS RUGBYFORCE

THROUGHOUT the championship City A.M. will feature incisive analysisfrom some of the biggest names ininternational rugby, in associationwith RBS RugbyForce.

RBS RugbyForce is a nationwidecommunity volunteer programmewhich helps local rugby clubs toimprove their facilities. It is an oppor-tunity for clubs to gather members,supporters, friends and family for aweekend of fun-filled DIY. Registeredclubs are provided with on-line guid-ance and tools to help them co-ordi-nate a community-wide effort to givethe club a makeover in advance of theseason ahead.

Former Wales international andRBS RugbyForce supporter Ieuan

Evans said: “This is a fantastic pro-gramme. It’s just what rugby clubs allover the nation need. By working withthe communities and giving them thesupport and guidance to improve thefacilities, RBS RugbyForce acts as acatalyst to help clubs help themselves.I’ve visited several RugbyForce eventsand they’re always inspiring and goodfun too.”

RBS RugbyForce Weekend happensthroughout Scotland, England, Irelandand Wales on June 11 & 12 2011. Tobe eligible for the enhanced supportpackage, clubs should submit 500words or less on why their club isdeserving of the reward. For more infoor to register your club, visitwww.rbs.co.uk/rugbyforce

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Star man:Nick Easter

The 32-year-old made his Testdebut in the 2007 RBS 6 Nationsagainst Italy and eyebrows wereraised when the rugged, slow-

paced Harlequins No8 became a RedRose regular. But the 6ft 4in backroweris now an elder statesman of the teamwith 38 caps to his name and hasgrown in importance.

The former Dulwich College school-boy’s influence will be more keenly feltas he leads the pack in the absence of Moody. And like the blond No7, proudEnglishman Easter can be relied uponto sacrifice pints of blood, sweat andtears for his country.

In the autumn Easter stepped in forthe Bath flanker as captain and did afine job in the 26-13 victory overSamoa. If Mike Tindall hadn’t been fitfor the opening game in Cardiff Johnson would have turned to Easter

to skipper the side. As it is, he will bedisappointed to have been overlooked.

Perhaps the England management’sthinking is that Easter needs to channelall his energies into being the cohesiveelement for a depleted forward eight,shorn of key line-out operators.

Though he does not have the pace of Pierre Spies – the 17st Springbok No8has clocked 10.7 seconds running the100 metres – Easter has an unerringknack of being in the right place at theright time as well as the ability to con-trol his side’s tempo from his position atthe back of the scrum, in the mould of his former Quins mentor Dean Richards.

He is blessed with impressive ballskills too – a technical proficiency andcoordination inherited from his fatherJohn, Britain’s No1 squash player in the1970s. The performances of Easter,who has helped Quins reach the AvivaPremiership’s upper echelons again thisseason, finally wiping clean Bloodgate’s

stain, will be central to England’s show-ing in the RBS 6 Nations – and beyond.

CHRIS ASHTON

The Northampton winger, 24

next month, made his interna-

tional bow against France in last

year’s RBS 6 Nations, in part due

to the clamour to promote the2009-10 Premiership top scorer.

The Wigan-born flyer, who

played four times for England’s

rugby league team, looked nervous in Paris, but has developed

his game and is now one of the most feared finishers in world

rugby. His try against Australia underlined his potency, but he

will want to banish the remaining question marks over his tack-

ling ability and positional sense when defending this spring.

MIKE TINDALL

The Gloucester centre has been

a regular on front pages since

becoming engaged to girlfriend

Zara Phillips, granddaughter of

the Queen. But he’ll have toshelve thoughts of marriage for

now, especially as he has been

asked to deputise as captain in

the absence of Lewis Moody. The 16st Tindall started next to

Will Greenwood when England beat Australia to win the 2003

World Cup – and it remains the Red Rose’s finest moment. The

game has moved on since then though, and critics say Tindall’s

game has remained antediluvian and one-dimensional.

BEN YOUNGS

One of the finds of last year, the

Leicester No9 was third choice

for his club when Johnson asked

him to tour Australia in the sum-

mer. The 21-year-old soon oustedthe incumbent Danny Care,

showing superior rugby intelli-

gence – and a keener eye for a

gap – than the Harlequins scrum-half. Youngs’s speed of thought

and electric acceleration have transformed England’s attacking

play. When he gets it right –and he usually does – this maverick

can be a match winner, as against Australia i n November, when

he outshone Will Genia, for many the best No9 on the planet.

Three more who need a good tournament

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6 Nations Rugby32 CITYA.M. 3 FEBRUARY 2011

WALES v ENGLANDMILLENNIUM STADIUM, 7.45PM

ITALY v IRELANDSTADIO FLAMINIO, 2.30PM

FRIDAY 4 FEBRUARY

ENGLAND v ITALYTWICKENHAM, 2.30PM

SCOTLAND v WALESMURRAYFIELD, 5PM

SATURDAY 12 FEBRUARY

FRANCE v SCOTLANDSTADE DE FRANCE, 5PM

SATURDAY 5 FEBRUARY

IRELAND v FRANCEAVIVA STADIUM, 3PM

SUNDAY 13 FEBRUARY

ROUND1

ROUND2

2011WALL CHART

TWICKENHAMENGLAND, LONDON Capacity: 82,000

MILLENNIUM STADIUMWALES, CARDIFF Capacity: 73,434

STADIO FLAMINIOITALY, ROME Capacity: 32,000

HOME NATIONS 1883-1909 FIVE NATIONS 1910-1931 HOME NATIONS 1932RESULTS TIMELINE

ENGLAND FRANCE

WALES

IRELAND SCOTLAND

l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l





6 NATIONS

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SATURDAY 26 FEBRUARY

SCOTLAND v IRELANDMURRAYFIELD, 3PM

SUNDAY 27 FEBRUARY

ITALY v FRANCESTADIO FLAMINIO, 2.30PM

WALES v IRELANDMILLENNIUM STADIUM, 5PM

SATURDAY 12 MARCH

ENGLAND v SCOTLANDTWICKENHAM, 3PM

SUNDAY 13 MARCH

ITALY v WALESSTADIO FLAMINIO, 2. 30PM

ENGLAND v FRANCETWICKENHAM, 5PM

ROUND4

SCOTLAND v ITALYMURRAYFIELD, 2.30PM

IRELAND v ENGLANDAVIVA STADIUM, 5PM

FRANCE v WALESSTADE DE FRANCE, 7.45PM

SATURDAY 19 MARCH

ROUND5

SUPER SATURDAY

ROUND3

MURRAYFIELDSCOTLAND, EDINBURGH Capacity: 67,130

AVIVA STADIUMIRELAND, DUBLIN Capacity: 51,700

STADE DE FRANCEFRANCE, PARIS Capacity: 81,338

FIVE NATIONS 1947-1999 SIX NATIONS 2000-2010

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THE DATES

8/7/2019 Cityam 2011-02-03 book


8/7/2019 Cityam 2011-02-03 book


R ATHER than those winning rucks,scoring tries and kicking goals,absent players could come to decide

where the RBS 6 Nations Champion-ship trophy resides in six weeks’ time.

A sizeable collective injury list has dom-inated the build-up to the 2011 tourna-ment. Whether or not this is due to theever-increasing physicality and profession-al pressures of the domestic game is adebate for another time, but the impact onthe plans of the national coaches is plainto see.

After their impressive destruction of Australia in the autumn internationals,many considered England nailed-on to winthe RBS 6 Nations for the first time in eight

years. Even a sobering defeat to worldchampions South Africa did little todeflate expectations. But that was beforecoach Martin Johnson’s plans were hit by injuries to his captain, Lewis Moody, andkey attacking forwards Courtney Lawesand Tom Croft.

Yet, England are blessed with strengthin depth – replacement blindside flanker

James Haskell is no slouch and second-row

Louis Deacon is keeping the experiencedSimon Shaw consigned to the bench. Thesame cannot be said for Wales, England’s

opponents in tomorrow night’s openingfixture, who have just added winger LeighHalfpenny to their treatment list, whileIreland will be without Stephen Ferris and

Jamie Heaslip among others. The Red Rose, still 15/8 favourites with

Hills, deserve to be backed but last year’sgrand slam winners France are the obviousthreat. An excellent back-row, lead by theiroutstanding No8 Imanol Harinordoquy, isthe key to Les Bleus’ success, however, twoenormous away fixtures at LansdowneRoad and Twickenham suggests they might even struggle to finish in the toptwo ahead of Ireland and England.

Although France look a good sell at 33 inSporting Index’s outright market, there is

better value still in buying England at 38. The RFU have set Johnson a realistic targetof a top two finish – second or higher

would pay a profit.Italy aside, the gap between the teams

appears closer than ever this year, witheven Scotland showing promise in theirtactical victory over the Springboks inNovember. This would suggest that a grandslam is unlikely and the fixtures back this

up. Wales could spring a surprise at theMillennium Stadium against England, theIrish could be undone at Murrayfield and

France will feel the heat at Twickenham. While I’m tempted by the 4/6 available onBetdaq for no grand slam, I am inclined toleave it, partly in hope of a grand slamdecider between Ireland and England atthe Aviva Stadium on 19 March.

Italy remain the poor relations of European rugby union, 11 years after they

joined the annual competition, anddespite the added experience afforded tosome of their squad with the inclusion of

Aironi and Treviso in the Magners League,the Azzurri are likely to earn another

wooden spoon. Buying opposition/Italytotal supremacy at 72 with Sporting Indexis risky but appealing nonetheless. In 11tournaments, they have conceded an aver-age of 91 points more than they havescored. They will miss injured fly-half Craig Gower, and it is difficult to see wheretheir points will come from.

POINTERS...

England to win the championship at 15/8with William Hill

Buy England’s outright index at 38 with Sporting IndexBuy opposition/Italy total supremacy at 72 withSporting Index

Punter | Rugby

36

PLAYERS TO WATCH

LENDING stability to England’s

backline, Leicester Tigers’ Toby Flood has cemented his position asEngland’s first choice fly-half,

despite the return to fitness of his for-mer Newcastle team-mate Jonny

Wilkinson.Flood has been outstanding at

times for his club this season and hekicked 17 points in his most recentPremiership game againstNorthampton Saints. He is favourite to

be top scorer in the tournament at 5/2 with Paddy Powerand although he will come underpressure from French scrum-half andplace kicker Morgan Parra (10/3), who fre-quently scores tries as well, Flood should

be backed.England and Northampton winger

Chris Ashton ensured that his image willlive long in the memories of rugby unionfans, and even longer in the archives, withthat try against Australia in November.

Revealing he was close to reverting back to rugby league a short time ago,he has since become one of the mostdangerous players in his chosen sport.

A recent Try of the Year awardshould boost his confidence going intothe RBS 6 Nations, but it is his speed,power and directness that make himimpossible to overlook for top try-scorerat 7/1 with Paddy Power, particularly if England’s plans for fluent, expansiverugby come to fruition.

Strong squad keeps injury-hit England in pole position

RUGBY TRADER DAVID WILD, CITY AM’S RUGBY TRADER, LOOKS AHEADTO THE RBS SIX NATIONS CHAMPIONSHIP

England have been hit by a spate of injuries but have strength in depth Picture: ACTION IMAGES

8/7/2019 Cityam 2011-02-03 book


Dragons will struggleagainst the Red Rosewith weak front row

THE FIXTURE list committee havegot it spot on this year. What better

way to start the 2011 RBS 6 Nationsthan by sending England to Cardiff on a Friday night? Seventy-odd-

thousand well-oiled Welshmen arecapable of producing quite anatmosphere under the closed roof of the magnificent MillenniumStadium; we can only hope thequality of the rugby is deserving of the occasion.

For Wales, it’s not too dramatic tosay that their whole tournamentrelies on the outcome of thismatch. After a disappointing 2010in which Warren Gatland’s menhave won just twice in 12 Tests –against Scotland and Italy – a victo-ry would prove to their hard-to-please supporters that they are stilla match for the top sides in an all-important World Cup year. A firstdefeat at the Millennium Stadiumto England since 2003, however,

would put Stephen Jones et al onthe back foot for potentially tricky trips to Murrayfield and Rome.

Injuries are a concern for both

coaches, but more so forGatland. WhereasEngland coachMartin Johnson isable to replace thequality of LewisMoody and TomCroft with theequally adept

James Haskell,right, and Tom

Wood in the back row, the Welsh backs

h a v erequired afull reshuf-fle, whilereplacementprops Paul

James and CraigMitchell are quite a

way short of the stan-dard of the sidelinedGethin Jenkins and

Adam Jones. The lack of a fear-

some front row,normally Wales’n o t - s o - s e c r e t

weapon, is the biggest negative forGatland, reasonperhaps for hispetulant barbdirected atEngland hookerDylan Hartley last

week. This may see England’s ownfront row trio of Andy Sheridan,Hartley and the impressive DanCole apply early pressure, possibly leading to a cheap penalty, to beduly converted by the increasingly

dependable Toby Flood. Thefirst scoring play to be

an England penalty is worth a bet at

7/4 onBetdaq.

Englandare given a

three-pointhandicap by

Paddy Powerand the Red Rose

certainly have reasonto believe, like I do,that they can over-come this narrow margin. A largely suc-cessful autumn seriesshowed the heights

that Martin Johnson’s brand of rugby canreach and a dilapidated

Wales team have littlechance of stopping it in

full flow.

NOT since 1998 has any side won back-to-back grand slams, and if France are to do so again, victo-ries at the Aviva Stadium and

Twickenham will be required.Before the French look too far

ahead, they must first beatScotland at the Stade de France.Since Les Bleus’ flawless 2010tournament, results have taken a

turn for the worse. Most recently,they were hammered by Australia

in the autumn internationals, asthe Wallabies put 59 points onthe board after MarcLievremont’s men had previously conceded 41 points against

Argentina and 42 points againstSouth Africa in the summer.

Andy Robinson is gradually making his mark on Scotland andthey are particularly strong defen-sively. Armed with a strong kick-ing game led by Dan Parks they can be a match for anyone, asSouth Africa found in their 21-17defeat.

France’s home record againstthe Scottish is formidable, as they have won the last five meetings

on home soil. Even with improve-ments and encouraging signs in

November, victory in Paris looks astep too far for Scotland. Back France to lead at both half-timeand full-time at 2/5 with Paddy Power.

Selling total tries at 3.7 withSporting Index looks the call forthis match. Other than for apenalty try, France have not man-aged to cross the try-line in eitherof their last two contests, whileScotland limited South Africa to

just a single, late touchdown inNovember.

Punter | Rugby 37CITYA.M. 3 FEBRUARY 2011

TOMORROW – 7.45PM BBC1

ENGLAND

WALES

SATURDAY – 5.00PM BBC1

FRANCE

SCOTLAND

POINTERS...

France to lead HT/FT at 2/5 with Paddy Power

Sell total match tries at 3.7 with SportingIndex

WITH only two wins in sevengames, Ireland’s form has beenpatchy of late. An opening trip toRome is not what Declan Kidney

would have wished for knowingthat the Azzurri’s worst result atthe Stadio Flaminio in the 2010RBS 6 Nations was a five-pointdefeat to England.

In Italy in November, Nick Mallett’s side managed to beat

Fiji and get within eight points of Argentina.

Even so, Ireland have lost justtwo RBS 6 Nations matches in two

years and while the trip is aninconvenience, victory shouldstill be the visitors’. Italy are 4/11to finish bottom of the table this

year, a position they have occu-pied in each of the last three

years.Italy’s only truly world class

player, Sergio Parisse, is back atNo8, which is a boon for the hostsafter his absence last year.However, coaches are wise to hisabilities by now, and Ireland’s

back-row will have little difficulty

neutralising his threat. Otherthan from Parisse, Italy’s attack-

ing prowess is negligible and theIrish should be free to concen-trate on their own attackinggame.

The 2011 Ireland is not quitethe team of 2009, but a numberof the side that beat Italy 38-9 inRome then remain and I expect asimilarly sizable victory. Back Ireland with a 12.5 point handi-cap at evens on Betdaq and buy their supremacy at 14 withSporting Index.

SATURDAY – 2.30PM BBC1

ITALY

IRELAND

POINTERS...

Ireland to win with 12.5pt handicap at EVSon Betdaq

Buy Ireland Supremacy at 14 with SportingIndex

A dilapidated Wales team won’t stop England if they find top gear Picture: ACTION IMAGES

POINTERS...

England to win with 3pt handicap at 10/11with Paddy Power

England penalty to be first scoring play at7/4 on Betdaq

8/7/2019 Cityam 2011-02-03 book


8/7/2019 Cityam 2011-02-03 book


FULHAM winger Damien Duff’s firstPremier League goal of the season lift-ed Mark Hughes’ side five points clearof the drop zone.

Duff, relegated as a Newcastle play-er two years ago, struck in the 67thminute to extend Fulham’s unbeatenhome run to five matches.

Defeat capped a turbulent few daysfor a Newcastle side who created littlein their first game since Andy Carrolldeparted. Manager Alan Pardew saw his striking options diminish furtherstill when Shola Ameobi suffered asuspected fractured cheekbone.

Duff strike easesrelegation fears

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NEWCASTLE W CA

S T L E U

N I T E

FOOTBALL▲

ENGLAND captain Andrew Strauss blamed his side’s ever increasinginjury list for their latest one-day defeat Down Under.

Strauss revealed he intends to gointo the upcoming World Cup with asix-man attack, but that will depend

on Graeme Swann, Tim Bresnan andStuart Broad returning to fitness.

England were effectively a bowlerlight as they unsuccessfully attempt-ed to defend 333-6, with MichaelClarke’s 82 guiding his side to a 5-1series lead in Sydney.

Strauss said:“There are going to betwo spinners involved [at the WorldCup] and that allows you to play withsix bowlers. It’s very frustrating with

the injuries because it was a top-notch batting performance.”

WALES back Gavin Henson is set tomake a shock move to Toulon follow-ing his release by Saracens last night– after just one start for the club.

Henson, 29, is expected to sign adeal until the end of the season withthe French outfit, where he will actas cover while Jonny Wilkinson is onEngland duty at the RBS 6 Nations.

The high-profile former Ospreysstar only joined Saracens late last year and made the first of his fourappearances in the Boxing Day clash with Wasps at Wembley.

Henson’s contract was up at theend of the season and Sarries chair-man Nigel Wray said: “We wish Gavin

all the best for the future as he con-tinues his return to the highest level.”

Strauss bemoans England’s injurylist as Clarke steers Aussies home

CRICKET▲

RUGBY UNION▲

WEST HAM’S headline January sign-ing Robbie Keane marked his debut with a goal in a victory which his new manager Avram Grant believes signi-fies the turning point in the

Hammers’ season. An error from Richard Kingson

allowed Victor Obinna to open thescoring and a typical poachers’ effortfrom Keane, his first in the PremierLeague since November 2009, aftersome more unorthodox goalkeepingdoubled the visitors’ lead.

Not to be outdone by his oppositenumber, Robert Green then allowedCharlie Adam’s corner to drift intohis net, but Obinna instantly dousedBlackpool’s hopes of a comeback witha thumping strike, his fifth in twogames, which confirmed the pointsand lifted his side off the bottom of the table.

With Birmingham dropping pointsand Wolves losing to a 90th minuteDaniel Sturridge strike at Bolton, thesignificance of victory was not lost onGrant.

“It was a very important win. Every game now is very important for us. We wanted to make one step today, we have finished the second third of the league and are starting the lastthird,” he said.

“We wanted to continue to play ourfootball and pick results up. I am very pleased with how we attacked in thefirst half. In the second half wedefended very well, which we didn’t

Keane the spark for Irons

BY JAMES GOLDMAN

FOOTBALL▲

Henson toquit Sarries

for Toulon

BIRMINGHAM midfielder CraigGardner struck a late penalty to deny Manchester City three precious pointsin the Premier League title race.

An opportunistic strike from Carlos Tevez put the visitors ahead in thefourth minute, but Nikola Zigicrestored parity 20 minutes later whenhe got the slightest of touches toDavid Bentley’s free-kick.

City’s own set-piece specialist, Aleksandar Kolarov, blasted his side back into the lead on the stroke of half-time, but Gardner kept his nervefrom the spot 13 minutes from theend after Patrick Vieira had fouledsubstitute Kevin Phillips.

City boss Roberto Mancini said:“I’m not happy, it wasn’t a penalty.”

Gardner dentsCity title hopes

Birmingham 23 4 12 7 23 33 24

West Ham 25 5 9 11 27 44 24

Wigan 25 4 11 10 22 41 23

Wolves 24 6 3 15 24 42 21

BOTTOM FOURTEAM PLD W D L F A PTS

2

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BIRMINGHAM

MANCHESTER CITY

FOOTBALL▲

SPORT | IN BRIEF

Thorpe’s sights firmly on 2012SWIMMING: Five-time Olympic championIan Thorpe claims his return to the sport,confirmed yesterday, was inspired by avisit to the London venue which will stagethe 2012 Olympic competition. The 28-

year-old, who is returning to the sportafter a five-year absence, said: “I saw theswimming venue for the London Olympicsand it’s extraordinary and I could taste it.I’ve not felt that for a very long time.”

Westwood ready for Kaymer duelGOLF: England’s Lee Westwood insistshe’s not concerned at being overtaken asworld No1 by Germany’s Martin Kaymerat the Qatar Masters which started today.If Kaymer wins he will head the rankings

unless Westwood finishes as runner-up.“There is no pressure as such of beingNo1,” said Westwood. “I’m happy that Ihave been able to do that. I have learntnot to expect anything.”

Results

email [email protected]

Goals from Keane (main) and Obinna (above right) lifted Grant’s side off the bottom Picture:

On-loan striker scores onhis Hammers debut as

Grant insists Januarysignings can fire his sideto Premier League safety

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WEST HAM

Sport 39CITYA.M. 3 FEBRUARY 2011

do in the most recent games.”Keane was lively throughout, while

fellow transfer window signings Gary O’Neil and Wayne Bridge alsoimpressed. And Grant believes thenew additions will play a key role indetermining West Ham’s fate.

He said: “Robbie is very good, a very intelligent player. We are play-ing football so it is good for him andgood for us. Gary O’Neil was good, Wayne Bridge –all our signings weregood and the other players continueto play well.”

8/7/2019 Cityam 2011-02-03 book


cityam 2011-02-03 book

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