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FTSE 100 t6,037.08 -23.01 DOW t12,226.64 -41.55 NASDAQ t2,804.35 -12.83 /$ 1.61+0.01 / 1.20+0.01 /$ 1.35 unc Certified Distribution03/01/11 till 30/01/11 is 97,465

HTC, the Taiwanese mobile phonegiant, yesterday unveiled twoFacebook-branded phones, as first

revealed in City A.M. last month.Dan Rose, head of business develop-ment at the social network, haddenied our story, telling a press con-ference the following day there

were no branded handsets in thepipeline.However, the two new devices

which made their debut at theMobile World Conference inBarcelona yesterday are bothclearly branded with Facebooksfamous F logo.

The ChaCha and Salsa (picturedright) also have a discreet Facebook

button and software that integratesthe phone with the social networksite.Both devices will use data fromFacebook, such as status updates,and apply it to the phones contactsand incoming calls. The phones willrun the latest version of Googles

Android operating system.Henri Moissinac, Facebooks head ofmobile business, yesterday revealedthe two companies had been work-ing on the handsets together forseveral years, even though the firm

initially scotched our report. Yesterday, a source close toFacebook defended the firmsdenial, insisting Roses comments

were taken out of context. The source said: I think this still

c o m e sdown to the definition of what wasmeant by Facebook branded Dan

was indicating that the phone wasnot part of the Facebook brand.

Yet the ChaCha and Salsa are the

first ever handsetsto display the famous Facebook Flogo on their casing.Facebook yesterday said customerscould expect to see dozens of sim-

ilar phones from a range ofmanufacturers this year, asthe social network targetsmobile users.Mobile is an increasinglyimportant driver of traffic

to Facebook, which says 250musers a month access the social net-

work on mobile devices.HTC also makes the Google Nexus S,the Google-branded phone that wasalso first revealed in City A.M. inOctober last year. MORE: P11

BY STEVE DINNEENTELECOMS

www.cityam.comIssue 1,323 Wednesday 16 February 2011 FREEBUSINESS WITH PERSONALITY

Agius: 50p tax makes it harder to keep talent in London

THE 50p top tax rate makes it harderto retain talent in London, Barclayschairman Marcus Agius told City

A.M.yesterday.He also said the banks regrettedlosses staff that it has lost despiteefforts to prevent them leaving

have risen, adding: Competition fortalent is fierce.

UK banks face a particularly diffi-cult struggle to keep the best staff asa high-tax environment in Britaincomes on top of the barrage of EU

bonus regulations introduced inJanuary.At the banks results presentation

yesterday, chief executive Bob

Diamond said that he welcomed thegovernments commitment to alevel playing field in regulatoryterms.

But he admitted that the field wasnot level on pay regulation. Its dif-

ficult to manage, but if you haveenough rules like that, it can putyou at a competitive disadvantage,he said, adding that the US has yet to

unveil its own pay rules.Barclays yesterday confirmed that

it is to pay a portion of bonuses incontingent convertible bonds (co-cos) that will turn into equity if the

banks capital ratio falls too low.

Overall pay was down seven percent, and 12 per cent at BarclaysCapital, the investment bank.

Barclays shares made a strong

showing yesterday gaining 3.9 percent to close at 325.6p, after the bankrevealed a 32 per cent rise in pre-taxprofit for 2010 to 6.1bn. A final divi-dend of 2.5p was proposed making5.5p for the year. Other banks were

also buoyed by its results: RBS rosetwo per cent to 45.2p and Lloyds rose1.9 per cent to 66.9p.FOCUS ON BARCLAYS RESULTS: P7

BY JULIET SAMUEL

BANKING

Left, how we broke the story

BUSINESSWITH

PERSONALITY

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News2 CITYA.M. 16 FEBRUARY 2011

Inflation hits27-month highINFLATION reached its highest ratesince November 2008 last month, asescalating price pressures and taxhikes continue to hammer house-holds suffering from sluggish wagegrowth and rising unemployment.

While inflation on the consumerprice index (CPI) climbed 0.3 per centto four per cent, the tax and priceindex (TPI) which includes the effectof income taxes surged to 5.5 percent, the Office for National Statistics(ONS) said yesterday.

The TPI surpassed five per cent inApril last year as tax hikes kicked in,and is now on the up again. Prior to2010, TPI had not hit five per centsince July 1991.

The impending rise in nationalinsurance will place more cost pres-

sure on TPI, researchers at the ONSsaid.

The retail price index (RPI) whichalso includes mortgage payments also rose by 0.3 per cent, to hit 5.1 percent.

The rise marked 14 consecutivemonths of CPI inflation being morethan one per cent over the Bank ofEnglands target rate of two per centCPI at all times.

And it was the first time in the his-tory of the records that month-on-month inflation rose from Decemberto January, the ONS said. Usuallyprices drop in January, due to highstreet sales.

Obliged to write another letter ofexplanation to chancellor GeorgeOsborne, Bank governor Mervyn Kingblamed Britains lingering inflationon VAT increases, global commodityprices and a weak pound.

Excluding these effects, inflationwould probably be below two percent, King said.

Core inflation which ignoresenergy, food, alcohol and tobaccocosts rose to three per cent inJanuary, closing in on the record highof 3.1 per cent seen last June.

Meanwhile, CPIY, which excludesdirect taxes like VAT, jumped to 2.4per cent. In two months CPIY hasincreased by 0.8 per cent. Some econ-omists argue the CPIY should be evenhigher, as it assumes a stronger pass

through ofVAT than may be happening.

There is a great deal of uncertain-ty about the medium-term outlookfor inflation, King admitted, reveal-ing real differences of view withinthe committee.

The Bank will be to continue toblame temporary factors, said NeilProthero of the EconomistIntelligence Unit, but with inflationhaving exceeded three per cent in 24of the past 34 months, the credibilityof this argument is wearing thin.

BY JULIAN HARRIS

UK ECONOMY

Spiralling prices are hurting the UK

TAKE your pick. Is inflation four percent a year, as the official, consumerprice index measure suggests, or 5.1per cent, as the older, broader retailprice index would have you believe?My own favourite measure of how thecost of living is going up is the tax andprice index, which has surged a crip-pling 5.5 per cent; it adds changes todirect taxes such as income tax andnational insurance to the mix.

Wealth is being eroded by stealth: ifyou were to keep 100 in cash under your pillow, it would be worth just69.31 in todays money in five years

time if prices continue to go up at cur-rent rates. After ten years, thanks tothe power of compounding, inflationwould have slashed the value of your100 to a pathetic 29.19: sterlings

purchasing power would have beencut by over 70 per cent.But all of these figures are just for a

hypothetical average person. Manyreaders of this newspaper will be fac-ing even bigger knocks to their take-home pay, especially if they commuteor are being hammered by tax hikes.

For some, cuts to real incomes of six,seven or even 10 per cent will not beout of the question, assumingunchanged pre-tax income and pat-terns of consumption. With compensa-tion creeping up by just 2.1 per cent onaverage, real, post-inflation and post-tax pay is being slashed by at least 2.4per cent.

Either pay deals will remain sub-dued, reflecting the current tough cli-mate or salaries will surge, triggeringan inflationary spiral as firms put upprices in a desperate bid to recoup

costs. The only good news is thatfalling wages will help unemployedworkers to start finding work again.

In his letter to the chancellor,Mervyn King warns that even on the

consumer price index inflation couldsoon hit five per cent; even moredepressingly, he argues that it could betwo to three years before inflationreturns to target. It is an astonishingloss of control. His argument thatattempting to bring inflation back tothe target quickly risks generatingundesirable volatility in output wontstop rates from going up a hike of0.75 percentage points this year nowlooks like the most likely outcome.

The Banks mandate is to keep con-sumer price inflation at two per cent,though a deviation of one per centeither side is permitted regardless ofwhether the surge in prices is causedby imported commodities, bad luck or(in theory) sunspots. The governmentmay of course be secretly happy thatthe Bank is failing to meet its target:higher inflation means faster real

term cuts to public sector spendingand wages, facilitating fiscal consolida-tion while allowing the Treasury tospend more in cash terms. Whilepainful at first, it could actually reduce

the perceived impact of the cuts.But one of the great lessons of eco-nomic history is that when it comes toinflation, trying to con the public,companies and the foreign investorswho finance the UKs massive budgetdeficit never works for very long.People are not that stupid. The govern-ment has two options: it could scrap orsuspend its inflation target and humil-iatingly admit that the UK unlikeevery other developed country exceptGreece has given up on price stability. A less disastrous idea would be forDavid Cameron or George Osborne togo on the record backing a more vigor-ous anti-inflation policy and make itclear that they support higher interestrates. The current timidity isnt help-ing anyone.

[email protected] me on Twitter: @allisterheath

EXECUTIVES of the ill-fated savingsclub Farepak could be banned fromserving as company directors afterthe governments Insolvency Serviceapplied to the courts to disqualifythem.

Nine directors including formerCBI president Sir Clive Thompson andoutgoing Blacks Leisure chief execu-tive Neil Gillis could face a ban of upto 15 years if the High Court deemsthem unfit to manage a company.

Thompson was chairman oFarepaks parent company EuropeanHome Retail when it collapsed inOctober 2006 after several profitwarnings, while Gillis was a non-exec-utive director.

Farepak customers saw around38m of their savings wiped out afterthe firm failed to ringfence the cash.

Farepak bossescould be barredfrom City jobs

ENFORCEMENT

EDITORS LETTER

ALLISTER HEATH

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

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

CommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

Head of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found atwww.pcc.org.uk

Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS

Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]

JERSEY AND ISLE OF MAN OFFER TAXSOP TO BRUSSELS Jersey and the Isle of Man haveannounced changes to their corpo-rate tax regimes in an effort to neu-tralise criticism from Brussels. Bothcrown dependencies said they were withdrawing laws that aim to stoplocal shareholders from avoiding per-sonal income tax by rolling upincome in companies subject to azero per cent corporate tax rate.

HIGH-FLYERS TO ESCAPE MIGRATIONCAPHigh-flyers earning more than150,000 a year will be exempt fromthe yearly cap on economic migra-tion, ministers will announce today.The move comes in response to fearsthat the limit would hinder the Citysability to hire global talent. The con-

cession will be welcomed by businessleaders, who have warned that the

limit on work permits threatens todamage trading partnerships.

CYPRUS COURT LIFTS INJUNCTION ONRUSSIAN TYCOONA Cyprus court has lifted an injunc-tion freezing a large part of SuleimanKerimovs business empire, includingthe Russian tycoons 25 per cent stakein Uralkali, which is part of a plannedmerger to create the worlds biggestpotash producer by output.

EDF PROFITS DIVE AFTER PROVISIONSEDF hopes to reassure investors on itsdevelopment plans this spring, afterthe French state-controlled utilitygroup saw net annual profits fall 74per cent on the back of 2.9bn(1.8bn) in provisions to cover risks inits international businesses. Seniorexecutives said management wouldmeet in the spring to consider thegroups future investment prioritiesas the group faces up to duller

prospects in the US and Italian mar-kets.

CAIRN CHIEF WARNS TIME ISRUNNING OUT ON INDIAN OILFIELDDEALCairn Energys chief executive hasflown to Delhi to try to salvage a $9.6 bn deal to sell its stake in Indiaslargest onshore oilfield. Sir BillGammells arrival coincided with afresh delay in securing governmentapproval for the deal. The Oil MinisterS. Jaipal Reddy said yesterday theCabinet would not make a decisionon the sale of up to 60 per cent ofCairn India for two to three weeks.

ORDERING A PIZZA FROM THE MIDDLEOF A MOTORWAYHungry motorists will soon be able tophone ahead to the next motorwayservice station to order a PepperoniPassion or a Hawaiian thin crust afterDominos Pizza signed a deal with

Moto Hospitality to open takeawayson up to 43 sites.

WIKILEAKS: BHP BILLITON CHIEFMARIUS KLOPPERS OFFEREDINTELLIGENCE ON CHINA TO USThe head of mining giant BHP Billitonoffered to share intelligence aboutChina with US authorities, accordingto Wikileaks cables seen by theSydney Morning Herald. The revela-tions came as BHP, the world's largestmining company, prepared to unveilrecord interim results. MariusKloppers, BHPs chief executive, saidhe would exchange information withUS diplomats in 2009, as he detailedthe high level of surveillance thatChinese authorities had on his compa-ny. China is BHPs largest customer.

APPLES CHILD LABOUR ISSUES GETWORSE Apple, the technology giant, hasadmitted child labour is a growing

problem at factories making its com-puters, iPods and mobile phones.

JUDGE SAYS BARCLAYSMANIPULATED DEL MONTE SALEA Delaware judge issued a scathingdecision that criticised BarclaysCapitals role as the lead adviser toDel Monte Foods in the food makersproposed $4bn sale to private-equityfirms. J. Travis Laster, a judge inDelaware Chancery Court, said theBarclays unit failed to disclosebehind-the-scenes efforts to put DelMonte in play or to tell the SanFrancisco company about the banksgoal to provide financing to DelMonte buyers Kohlberg Kravis Roberts& Co., Vestar Capital Partners andCenterview Capital.

J&J RECALLS 70,000 SYRINGES Johnson & Johnson has recalledabout 70,000 syringes of antipsychot-ic Invega, an injectable formulation,

after discovering cracks in thesyringes.

WHAT THE OTHER PAPERS SAY THIS MORNING

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News 3CITYA.M. 16 FEBRUARY 2011

DEUTSCHE BOERSE and the New YorkStock Exchange (NYSE) have agreedplans to create the worlds largestfinancial exchange group.

The combined company will have2010 net revenues of $5.4bn (3.3bn)and will hold joint headquarters inNew York and Frankfurt.

Despite being billed as a merger, thetransaction will see the Germanexchange emerge as the dominantpartner, holding 60 per cent of the

combined group.Shareholders in NYSE would hold 40

per cent. The newly combined firm, which

has yet to be named, will be led by cur-rent NYSE head Duncan Neiderauer aschief executive, whilst the majority ofthe board will be ran by German execu-tives.

The deal could cause concern for reg-ulators on both sides of the Atlantic,

yet the heads of the two bourses saythey believe the deal will be passed.

Deutsche Boerse chief executive RetoFrancioni, who will become chairmanof the combined group, said: We feelsupported by the politicians and alsothe regulatory body in going ahead.

Analysts broadly welcomed the deal,although also raised concerns over reg-ulator approval.

David Buik, analyst at BGC Partners,said: There are bound to be antitrustlaws But once the dust has settled

when people look at the value of thedeal and what it means for everybody,the deal makes an enormous amountof sense. LSE MERGER: P22-23

Frankfurt andNYSE agree tomerger deal NASDAQ, the worlds second largeststock exchange, has lost its chieffinancial officer amid talk it couldbecome the latest bourse to merge in

a flurry of activity worldwide. Adena Friedman, who will leave

the company effective 4 March, isdeparting to join private equity firmCarlyle Group in a similar role.

The departure comes as Nasdaqmight need her dealmaking skills asexchange rivals pair up in a mergerfrenzy.

The exchanges senior vice presi-dent Ronald Hassen will serve asinterim chief financial officer until areplacement is found.

Meanwhile, the Chicago MercantileExchange played down speculation it

was poised to launch a counter bid forthe New York Stock Exchange, in a

development that could have throwna cross-border deal with DeutscheBoerse into doubt.

The bourse said: We remain com-mitted to creating shareholder value.

Nasdaq losesCFO as boursesseek takeovers

BYRICHARD PARTINGTON

FINANCIAL MARKETS

FINANCIAL MARKETS

ANALYSIS l Deutsche Boerse

54

50

46

58

62

23 Dec3 Dec15 Nov 14 Jan 3 Feb

60.2315 Feb

Adena Friedman has lefther post as Nasdaq chieffinancial officer, as thebourse faces merger talk,to join Carlyle Group.

ANALYSIS l NYSE / Deutsche Boerse merger

2010revenue(millions)

Top 5 most active stocks on NYSE last year

40NYSE

60DeutscheBoerse

%

$17.8trdomestic marketcapitalisation of

listed issuers

NYSE/Deutsche Boerse

4,054$5,391

CMEGroup

2,258$3,004

DeutscheBoerse

2,166$2,880

NYSE

1,888$2,511

LSE / TMX

1,178$1,567

NASDAQ

1,144$1,522

Reto Francioni (left) and Duncan Neiderauer will become chairman and chief executiverespectively of the new combined group Picture: REUTERS

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DRUGMAKER Sanofi-Aventis is readyto announce its $19.2bn-plus(12.4bn) takeover bid for US biotechfirm Genzyme, sources with knowl-edge of the talks said yesterday, bring-ing nine months of wrangling to aclose.

The two companies have agreed inprinciple to the improved offer, whichcould be announced to the marketsas early as this morning.

The bid is said to include $74 per

share in cash plus a contingent valueright (CVR) that will vary dependingon the results of Genzymes experi-mental drug Lemtrada.

Sanofi has included the CVR ele-ment to help resolve a long-runningargument with Genzyme over thepotential value of its new multiplesclerosis drug, which the French firmsaid could be worth $3.5bn a year.

Sanofis previous offer of $69 a

share, first put forward in July,expired yesterday after several exten-sions.

The deal would be the second-biggest in biotech history and givesSanofi a foothold in the growing mar-ket to treat rare diseases.

It will also help Sanofi compensatefor declining revenue from drugs thathave lost, or are set to lose, patent pro-tection.

The EU gave the green light to atakeover in January, saying the hostiletakeover would not reduce competi-tion in Europe.

Officials at Sanofi were not imme-diately available for comment, whilea spokesman for Massachusetts-basedGenzyme said he could not confirmthat an agreement had been reachedlast night.

Sanofi sought advice during negoti-ations from JP Morgan, EvercorePartners and Morgan Stanley, withGenzyme turning to Credit Suisseand Goldman Sachs.

Sanofi getsready to bidfor GenzymeBYMARION DAKERS

PHARMACEUTICALS

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Profit soarsat Marsh &McLennan

SHARES in giant insurance brokerMarsh & McLennan jumped to theirhighest in a year yesterday after itsfourth-quarter and full-year results.

Strong new business growthpushed the worlds second-biggestinsurance broker to an $855m(533m) profit in 2010, up from$227m in 2009 when it bore restruc-turing and settlement charges.

The broker, which owns manage-ment consultancy Oliver Wyman,reinsurance broker Guy Carpenterand consultancy Mercer, saw fourth-quarter profit hit $203m or $0.37 pershare up from $23m or $0.04 in thesame period the previous year.

Full-year earnings per share rose to

$1.55 from $0.42 in 2009.It generated six per cent organic

revenue growth in the quarter high-er than its key rivals Aon on three percent and Willis on four per cent.

Analysts applauded the news andits shares rose more than five per centon the news to $30.83.

Revenues grew to $2.8bn in thefourth-quarter and $10.6bn over theyear.

BYALISON LOCK

INSURANCE

NEWS | IN BRIEF

Lloyds insurer Jubilee reviews growth optionsLloyds of London insurer Jubilee Group became the focus ofM&A speculation yesterday after admitting it had appoint-ed Jardine Lloyd Thompson Advisory to review its business.A Jubilee spokesman said JLT was looking at a number ofoptions to facilitate future growth. He would not commenton speculation that a number of firms, including independ-ent insurer Canopius, had approached JLT about acquiringprivately-owned Jubilee . We have a very strong Lloydsplatform and remain committed to strengthening anddeveloping the business, he said.

CIT Group struggles with soaring costsUS business lender CIT Group said yesterday a fall in inter-est income and higher expenses hits its fourth-quarter prof-it. CIT, which emerged from bankruptcy in December 2009after a $2.3bn government bailout, said margins had wors-ened and costs had risen nine per cent despite paying offsome of its costly debt pile. Net income stood at $74.8m,down 35 per cent on the previous quarter. CIT restated itsprofits for the start of 2010 after finding accounting errors.

This week:

Toronto Stock Exchange

with expert commentary

on the LSE's new partner

from Paul Inkster of

Barclays Stockbrokers.

FOR THE THIRD INSTALMENT

OF OUR GLOBAL

EXCHANGES SERIES.

SEE PAGES 22-23

COMPUTER-MAKER Dells quarterly

earnings and margins blew past WallStreets expectations last night as com-ponent costs fell and businessesreplaced their older IT systems, pro-pelling its shares six per cent higher.

Dells forecast for a five to nine percent rise in current f iscal-year revenuealso surpassed US forecasts.

However, some analysts questionedwhether its gross margin of 21.5 percent about 15 per cent above the

average forecast was sustainablegiven a big boost from the fallingprices of memory chips and other pro-

duction costs. The firm reported a net profit of

$927m (574.6m), or 48 cents a share,in the three months to the end ofJanuary, up from $334m a year ago.

Revenue climbed 5.3 per cent to$15.69bn.

Dell is currently pushing to diversifyits revenue base and move away fromlow-margin PCs in favour of data stor-age and mobile devices.

Dell boosted by upgrades Dell chief executive and chairman Michael Dell saw earnings rise Picture: Reuters

TECHNOLOGY

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MINING giant BHP Billiton revealedlast night that it almost doubled itshalf-year profit last year thanks tobooming iron ore and copper prices,and offered shareholders an olivebranch in the form of a $10bn (6.2bn)buyback during this year.

The Anglo-Australian minerannounced in Melbourne that attrib-utable profit jumped 71.5 per cent to arecord $10.5bn for the July toDecember period, beating forecasts of

$10.3bn.Revenue rose 39 per cent to

$34.17bn, while dividend paymentswere raised 9.5 per cent to 46 cents ashare - slightly below analyst forecasts.

BHP said it would consider both onand off-market execution of its $10bnshare buyback, which is on top of anearlier $13bn buyback scheme thatwas restarted last November.

Chief executive Marius Kloppers hadcome under pressure from some

investors to return more cash, afteroverseeing three failed attempts byBHP to expand through mergers andacquisitions in recent years.

A merger with Rio Tinto was shelvedin 2008, while a $116bn iron ore merg-er between the firms in Australia wascancelled in 2010.

BHP booked a $314m cost in itsresults for its $39bn failed bid forPotash, which was abandoned inSeptember after the Canadian govern-ment blocked the cross-bordertakeover.

The FTSE 100-listed firm said it was

cautiously optimistic about the eco-nomic outlook, with cost pressuresoutweighed by continued strongdemand for commodities.

BHP Billitonto hand $10bn

to investorsCB RICHARD ELLIS looks set tobecome the worlds largest real estateinvestment manager (REIM) after ityesterday announced its plan to buyINGs European and Asian propertybusinesses for $1.1bn (681m).

New York-listed CBRE said yester-day that the cash purchase willimprove its foothold in Europe andcreate a firm with $97.4bn of assetsunder management.

The enlarged CBRE will overtakeING as the worlds biggest propertyinvestor by assets, and is poised toreplace AXA as the largest in Europe.

With these transactions we con-tinue to deliver on our strategicobjectives of reducing exposure toreal estate, simplifying our companyand further strengthening our capi-tal base, said ING chief Jan

Hommen.The sell-off will also help ING pay

down 5bn (4.2bn) of state aid fol-lowing a government bailout in 2008.

The $1.1bn deal to buy the REIMand some of INGs equity interest inthe funds is expected to close in thesecond half of 2011, and will be fund-ed by CBREs cash pile as well asundrawn credit facilities.

Bank of America Merrill Lynchadvised CBRE, while Morgan Stanleyadvised ING.

CBRE snaps upING propertyarm for $1.1bn

BYMARION DAKERS

MINING

PROPERTY

BHP Billiton is the worlds biggest miningcompany, formed from a merger in 2001. Its record profits follow a trend for com-modities firms, which have benefitted from highdemand in growing economies like China.

FAST FACTS | BHP BILLITON

FOOD manufacturer United Biscuitsis set to name Benoit Testard (above)as its new chief executive as part of amanagement reshuffle, and couldmake an announcement as early astoday.

The company behind brands such asHula Hoops, Jaffa Cakes and Penguinwill promote Testard from his currentrole as managing director of UK opera-tions, Sky News reported last night.

Frenchman Testard joined the firm in1999 as managing director of theFrench business. David Fish, thefirms executive chairman, is expectedto move into a non-executive role.

United Biscuits, the leading manu-facturer of biscuits in the UK, wassubject to a takeover approach byChinese food group Bright Food, which fell through in November.United Biscuits is owned by privateequity firms PAI Partners andBlackstone.

United Biscuits picks bossBenoit Testard (inset) is set to be named as chief executive of United Biscuits Picture: Reuters

CONSUMER

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BARCLAYS chief executive BobDiamond promised rigorous action tobring up the banks returns at its full- year results presentation yesterday,saying that there are no sacred cowsin his cost-cutting.

Diamond was keen to address thebanks unacceptable return on equi-ty of 7.2 per cent in 2010, announcing atarget of 13 per cent by 2013.

With the banks cost of capital cur-rently running at 12.5 per cent, he saidthat 1bn of savings would be requiredover the next three years to bringreturns above costs.

The savings could come in part fromshutting down or selling off under-performing businesses, althoughDiamond did not detail which unitscould be for the chop.

Overall, the banks results beatexpectations, with pre-tax profit forthe group hitting 6.1bn, up 32 percent on last year and above a consen-sus view of 5.7bn. Most of the earn-

ings came from BarCap, which gener-ated pre-tax profits of 4.8bn.

The group was hit hard by the ongo-ing property crisis in Spain, however.Barclays Corporate recorded a 631mloss on the back of troubles in theSpanish construction and real estatesectors.

Were clearly not earning thereturns that are acceptable, saidDiamond of the banks Spanish divi-sion, promising action by its new CEO.

The groups gross new lending wasup by 35bn, plus 7.5bn through theacquisition of Standard Life Bank.

BARCLAYS results revealed yesterdaythat pay declined seven per cent in2010, falling by more at its investment banking division Barclays Capital, by12 per cent.

Overall, however, the banks com-pensation ratio of pay to revenues wasup to 43 per cent, with average pay ris-ing nearly 30,000 to 229,000.

Chief executive Bob Diamond

blamed the rise on the payment ofdeferred bonuses, which are listed as

costs during the year in which theyvest.He also confirmed plans to pay out a

significant proportion of bonuses incontingent convertible bonds (orcocos) that turn into shares if thebanks capital ratio falls too low.

Overall, the bank spent 2.6bn on bonuses at BarCap and 3.4bn onbonuses overall in 2010.

Diamond: low

returns will

be banishedBY JULIET SAMUEL

BANKING

Pay down at Barclaysdespite rise in earningsBANKING

Focus on Barclays 7CITYA.M. 16 FEBRUARY 2011

ANALYSIS l Barclays

280

260

300

320 p

23Dec3 Dec 12 Jan 1 Feb

325.5815 Feb

Pressure on Bob to deliver a miracle

CHIEF executive Bob Diamondsgrand promise of a six per centrise in returns in three yearswas greeted with incredulity in

some circles yesterday.Evolution Securities Arturo de

Frias decried the promise, saying:

We find all this way too bullish, and very difficult to believe... We dontbelieve in miracles.

The plans rely on a decreasing costof equity to 11.5 per cent, from 12.5per cent currently, which could raiseeyebrows in an increasingly harshregulatory environment.

Diamond certainly has his work

cut out. The banks exposure toSpanish property, for example, is wor-rying: it took Barclays Corporatedown to a full-year loss of 613m, with more turmoil in store forSpanish banks.

But Diamond is fighting to con-

vince investors with a promise to cutcosts by 1bn by 2013. Following themornings announcement that thebank plans to sell off its Russian oper-ations, he then unveiled a chart,revealing that 35 per cent of thegroups equity is returning less thanits cost of capital (see chart, bottomright).

Analysts curiosity was piqued:they wanted to know where alongthe line each unit lay and what fate whether a sell-off or cost-cutting awaits those in the red region.

Diamond wouldnt be drawn ondetails, but investors would be foolish

to underestimate him. Banks will bein mid-single digit returns unlessthey take action, he emphasised yes-terday. He is well aware of the magni-tude of the task.

BOTTOMLINEAnalysis by Juliet Samuel

ANALYSIS l Return on equity versus cost of capital for Barclays units

Business with greater than 11.5%Return on equity (Cost of Capital)

Business with less than 11.5%Return on equity (Cost of Capital)

11.5%

35% of Group Equity 65% of Group Equity

HOW DO YOU RATEBARCLAYS RESULTS?Interviews by Katie Hope

DAVID BUIK | BGC PARTNERS

The profits werequite a bit better than

expected. The pre-tax prof-it was 6.07bn againstexpectations of 5.7bn. Thenet for year was 3.56bnagainst 3.2bn. Tier onecapital came in at a pleas-ing 10.8 per cent upfrom 10 per cent.

RICHARD HUNTER | HARGREAVES LANSDOWN

Barclays hasopened the bank report-ing season in some style,exceeding analyst esti-mates despite a challeng-ing 2010. In all, theresults are representativeof something of a returnto normality.

ARTURO DE FRIAS | EVOLUTION

Bob Diamonds per-formance today wasextremely polished. ButBarclays 2011 net assetvalue, excluding the pensiondeficit, is 330p. The stock isat the top of the tradingrange and we wouldsell on strength.

Grouppre-tax profit:

6.1bn

BarCappre-tax profit:

4.8bn

BarclaysCorporate:

613mloss

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WORLD Bank chief Robert Zoellick yes-terday said global food prices havereached dangerous levels, and

warned that their impact could com-plicate fragile political and social con-ditions in the Middle East and Central

Asia.World Bank data released yesterday

showed higher food prices -- mainly forwheat, maize, sugars and edible oils have pushed 44m more people indeveloping countries into extremepoverty since June 2010.

There is no room for complacency,Zoellick warned. Global food pricesare now at dangerous levels and it isalso clear that recent food price risesare causing pain and suffering forpoor people around the globe.

Zoellick said although higher foodprices were not the main cause lead-ing to recent protests in Egypt and

Tunisia, it was an aggravating factorand could become worse.

He warned that a sharp rise in foodprices across Central Asia could alsohave social and political implicationsfor that region.

The World Bank report comes daysbefore a meeting of the Group of 20major economies in France wherehigher food prices and the reasons forthose upward spikes will be discussed.Zoellick also said he was concernedthat as countries such as Egypt,

Tunisia and Jordan address causes oftheir social upheaval, higher foodprices may add to the fragility that isalways there any time you have revolu-tions and transitions.

The World Bank chief said the inter-national community needed to beaware of such risks and should notexacerbate problems by imposing poli-

cies, such as export bans or price fix-ing, that would push global foodprices even higher.

World Bank infood warningBYKATIE HOPE

WORLD ECONOMY

BORROWING costs for Spain andGreece fell yesterday at treasury billsales, a sign of cautious optimismthat Europe will eventually deal withits debt crisis despite policymakersslow progress towards new measures.

The yield on Spains 12 and 18-month bills fell as much as 50 basis

points compared to auctions in January, a mark of broadly better

market sentiment. The Treasury sold6.2bn of 12- and 18-month T-bills, thehigh end of its targeted range.

The 13-week Greek bill yield fell to3.85 per cent but the premiumdemanded by investors on secondarymarkets to hold Greek over Germandebt widened to 860 basis points, 26

basis points on the day, as uncertain-ty continued to plague the southern

Eurozone economies struggling mostwith high debt.

Yields fall in Spanish and Greekauctions amid cautious optimism

ECONOMICS


World Bank chief Robert Zoellick says global food prices have hit dangerous levels Picture: Reuters

Co-operative supermarket campaign a winner

ON this page we often assess theimpact that crisis or eventshave on brands but BrandIndexis more generally used for meas-

uring the success or otherwise ofadvertising with the daily trackingallowing us to study the initial

impact and also the wear-out rate.One of the more interesting cam-paigns this year has been the Co-oper-ative supermarkets good food withineasy reach advertising.

SUPERMARKET BUZZ SCORE RISINGThe campaign launched on 3 January with the supermarkets buzz scorestanding at +2, placing it 14th of the25 supermarkets measured and fivepoints below the sector average. By

January 21st that score had risen to+22, well above the sector average in5th place.

Since then the momentum hasgenerally been maintained with theCo-operative still at +20 on 7 February.

Although it has started to declineover the last week it still remains 7thoverall and seven points above thesector average.

GENERAL INCREASE IN PERCEPTION The campaign has not only createdgood buzz for the Co-operative, it hasalso led to a general increase in per-ception across all measures. At thestart of the year the index score was -2 (9 points below the sector average).By 21 January it was up to +26 with amid-20s score maintained ever since.It now stands at +23, 15 points abovethe sector average in 7th place overalland only just trailing the countrys

biggest supermarket, Tesco.

The Co-operative wanted to asserttheir position in the food market as a

values-led, locally minded alternativeto the big four supermarkets.

Six weeks in, perceptions have

moved from being in line with Lidl

and Booths to being in the samerange as Tesco and Morrisons and allthe indications are of a successfulcampaign.

Stephan Shakespeare is chief executive of

YouGov

BRANDINDEX

STEPHAN SHAKESPEARE

ANALYSIS l Co-op vs Tesco vsSupermarkets Index

5.0

10.0

0.0

-5.0

15.0

25.0

30.0

30.0

35.0

19 Jan11 Jan3 Jan 27 Jan 4 Feb 12 Feb

Tesco

Supermarkets Sector

The Co-operative

ANALYSIS l Co-op vs Supermarkets Buzz

5.0

10.0

0.0

15.0

20.0

25.0

The Co-operative

19 Jan11 Jan3 Jan 27 Jan 4 Feb 12 Feb

Supermarkets Sector

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Well tell youwhere to stick

your bonus!

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The Capitalist10

BANKERSSWAP CITY

FOR DIY ANDCAMPFIRESNEVER let it be said that the City is averseto getting a little dirt under its fingernails.On 12-13 March members of the bankingcommunity will be doing just that atHavens Hospices annual Im a bankergetme outta here! event to raise money forthe organisations hospices in Essex.

Over the weekend, teams from Daiwa,Deutsche Bank, Lloyds, Nomura, ICAP, RBSand many more will be mucking in to helpout with painting, decorating and garden-ing at the hospice sites.

Most challenging of all perhaps, theteams will also be camping togetherovernight in a huge marquee, whichmeans theyll have to wake themselves up

for the second day of work withoutBlackberry alarms and Nespressomachines to help.

The scheme is the brainchild ofDeutsche Bank employee Roberto deCristofano, whose daughter has been usingthe Childrens Hospice for several years.

While there may not be witchety grubson the menu or Gillian McKeith as a camp-mate to contend with, for some City execu-tives a night in the wilds ofSouthend-on-Sea might be just about asmuch as they cantake.

A SALUTE TO THE CITYThe culmination of weeks of hard workand plenty of culinary expertise has def-initely paid off The Capitalistcan revealthat last weeks Square Mile Saluteraised a grand total of 240,000 a fan-tastic result for the three charities it sup-ports.

Their tongues and purse strings loos-ened by the five course banquet, dinerspledged huge amounts during theevenings auction, with all proceedsgoing to support Help for Heroes, The

Royal British Legion and ABF TheSoldiers Charity in their drive to buildand run centres for wounded troops ontheir return from active duty.

The Square Mile Salute has beenpioneered by City businessman RaySteadman of Chamberlains

Restaurant Leadenhall Market, along with Gordon Hogg of Finclass andPhilip Corrick of The Royal Automobile

Club. City A.M. was delighted to beinvolved, and is looking forward to next

years banquet already!

THE ROAD TO SUCCESSIt looks like it might be time to dig out that

Jaguar-branded dust sheet and hang up your driving gloves a new survey has

found that five per cent of company direc-tors now keep a second run-about car justfor visiting clients, to avoid perceptionsthat theyre doing a little too well duringthese austere times.

One director surveyed by car leasingfirm CentralContracts.com was dismayed

when he started losing business after arriv-ing at meetings in his brand new V8 RangeRover (circa 60,000).

But rather than updating his sales patteror negotiating prices, it was straight backto the forecourt for a Nissan Qasqai to

avoid alienating his contacts a dropin the ocean at just 16,000.

The survey conveniently landed in The Capitalists inbox around thesame time as a piece on the economy of

running a scooter to combat increasingtransport and insurance costs. Longthe preserve of suburbanites with aintense hatred of traffic jams and alove for mod fashion, perhaps thismeans it wont be long before themost image-conscious of executivesare turning up at their AGM on two

wheels. A second-hand Vespa will set

you back around 500 surely notenough to offend even the mostfrugal of customers.

Company bosses are ditching their luxury cars to avoid appearing flashy to clients

The reviews speak for themselves; the Portg R700 is an exceptional laptop.Its an outcome were glad they arrived at, but were always confident theywould thanks to its innovative design, the Portg R700 packs incredibleperformance into a thin, light and affordable package.

The Portg R700 is exceeding expectations

The critics have spoken

Full Terms and Conditions apply. Offer valid on Portg R700 models purchased between 15th November and 31st December 2010. Toshiba is a trademark of the Toshiba Corporation. Microsoft, Windows, Windows Live and the Windows logo are trademarks of the Microsoft group of companies.

The names of actual companies and products mentioned herein, if any, may be the trademarks of their respective owners. Review sources: ElectricPig 29.09.10, IT Pro 25.08.10, Trusted Reviews 11.08.10, TechRadar 29.07.10, ZDNet 07.07.10, ZDNet 27.08.10, IT Reviews 02.11.10.

Satisfaction guarantee

Were so confident youll be singing the praises of thePortg R700 too, were even offering your money backif youre not entirely satisfied within 30 days of purchase.

Discover more at www.toshiba.co.uk/r700

Perhaps itwont be longbefore themost image-consciousexecutivesturn up attheir AGM ontwo wheels

EDITED BY

ELIZABETH FOURNIERGOT A STORY? [email protected]

CITYA.M. 16 FEBRUARY 2011

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Mobile world congress 11CITYA.M. 16 FEBRUARY 2011

Google lost

to Microsoftin Nokia race

VODAFONE chief executive VittorioColao made a veiled attack on Apple

yesterday as he called for greater open-ness in the mobile industry.

He said he was concerned aboutfirms creating so-called walled gar-dens around content, stressing theimportance of avoiding dominance inany step in the value chain.

Sources close to Vodafone con-firmed the comments were intended

to censure Apple, which dominatesthe mobile phone app industry.

The side-swipe came as Appleannounced it will cream off 30 percent of any subscriptions soldthrough the app store.

That means the likes of RupertMurdochs News Corp which sellsiPad subscriptions to the Timesthrough the app store will have togive almost a third of the virtualcover price to Apple.

Until now, publishers and otherdevelopers could keep 100 per cent of

subscription revenue.Colao went on to praise Google for

creating another major player in themobile sphere with its Android oper-ating system, saying it is important tomaintain competition.

Addressing Vodafones ongoing taxwoes in India, Colao called the treat-ment of his firm erratic and nothealthy.

He claimed the authorities weremaking a misguided attempt to taxhis firm, which he said has investedheavily in the Indian economy.

Vodafone in swipe at Apple

Vittorio Colao said no firm should have dominance in any step of the value chain

BY STEVE DINNEEN

TELECOMS

THE TOP STORIES FROM THE WORLD'S BIGGEST MOBILE PHONE SHOW

HTC FLYERJust when it looked like SteveJobs had killed the stylus, HTChas boldly brought it back

with its new tablet. While day-to-day navigation on the seveninch Android device is stilldone with your fingers, youcan write and draw on to theFlyer with a stylus. It looksslick and smacks of quality, butexpect to pay high-end rates.

NEW PRODUCT LAUNCHES

HP TOUCHPADHP's first foray into the tabletmarket is a solid enough effort.Size-wise the TouchPad comesin almost exactly between theGalaxy Tab and the iPad - itstwo toughest competitors. It isthe first tablet to run WebOS,albeit a customised version ofthe software, and multi-taskingis brought to the forefront. It'san attractive enough device but

no iPad beater.

GOOGLE chief executive Eric Schmidthas revealed his firm was inadvanced talks to provide its

Android operating system for Nokiahandsets before the Finnish handsetmaker signed an agreement withMicrosoft.

Schmidt said Google would haveloved it if they had chosen us over theother guys. We certainly tried.

Nokia instead chose to work withMicrosoft, and will use its WindowsPhone 7 platform on its handsetsfrom later this year.

Android is the fastest growingmobile platform, overtaking Nokiassoon-to-be retired Symbian, with3,000 activations every day.

Schmidt used his Mobile WorldCongress Keynote to offer an olive

branch to network operators, who saycompanies like Google put pressureon their networks through servicessuch as YouTube without paying forthe burden.

He acknowledged that the invest-ment cost to operators is very high,

with demand for network space grow-ing faster than wireless capacity.

He said Google is looking at shar-ing search revenue on mobile devices

but added that governments shouldplay a part in better managingmobile spectrum.

Schmidt also did not rule out a sen-sational $10bn (6.23bn) bid formicroblogging site Twitter.

Google chief executiveEric Schmidt says thesurge in smartphoneswill mean exponentialgrowth in advertising

BY STEVE DINNEEN IN BARCELONA

MOBILEWORLDCONGRESS

2011

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THE CORPORATE advisory and broking team of financial servicesgroup Brewin Dolphin has bought its

way out of the company to set up anew firm.

The asset manager agreed to sellthe unit, which sees the departure of55 professionals, in a deal worth 5m.

The team has now established ajoint venture with the financiers that

backed the buyout, N+1 a Spanishfinancial adviser and asset manage-ment group.

The deal will also free BrewinDolphin from its regulatory capitalrequirements, as it moves to becomea pure investment manager.

Following the transaction, N+1 willhold a 51 per cent stake in the newcompany, whilst the team will hold35 per cent. Brewin Dolphin will

retain a 14 per cent interest in thecompany.

The deal is still subject to regulato-ry approval from the FinancialServices Authority.

The new business, to be called N+1Brewin, will be led by GraemeSummers as managing partner.

Summers, who joined BrewinDolphin in 1990, formerly headed upthe firms corporate advisory and

broking division.He said: Its exciting times for the

team. Brewin Dolphin has been a verygood home for us for the past 20

years. Theres been a natural partingof ways, moving of the businesses indifferent directions

Well be moving towards a part-nership with a highly successfulinternational partner that has verycomplimentary skill sets to whatfrom the outset we were trying toachieve in this process.

Broker teambuys its wayout of Brewin

GOVERNMENT-backed bank Lloydshas closed the equities division of itsinvestment-banking arm in a shift

back to its core banking services. The equity markets division, a

minor part of Lloyds Bank CorporateMarkets, which raises debt and equityfinance for mid-sized companies, had

worked on share issues such as initialpublic offerings for clients.

The bank said the units closure onFriday was a strategic decision torefocus on its debt service provision.

But the unit, with just 13 employ-

ees after five years in business, lackedmarket share and had little new workcoming in.

Our equity markets business ismodest with a small market represen-tation, said a spokesperson. As partof our ongoing plans to simplify our

business model, we have decided towithdraw from the equity market.

We are making every effort tooffer redeployment opportunities toaffected employees, he added.

Joe Dickerson, a banking analyst ofBanco Espirito Santo, said the equi-ties unit was very much a non-core

business.

Lloyds Bank Corporate Marketsemploys more than 5,000 staff acrossareas including acquisition financeand lending to private equity. It madea loss of 1.09bn in the six months tothe end of June 2010, up from a7.73bn loss in 2009.

Lloyds has faced political pressureto distance itself from riskier invest-ment banking work and return toextending lending and risk manage-ment services to UK corporates sincethe fallout from the financial crisis.

In November 2009, the heads ofthree private stockbrokers wrote tothen City minister Lord Myners to com-

plain that taxpayer-backed banks wereputting pressure on their debt serviceclients to use their broking services aspart of their loan agreements.

BOISDALE WINTER SALE

14 oz sirloin steak on the bone 29.50

Boisdale of Bishopsgate,Swedeland Court, 202 Bishopsgate, London, EC2M 4NR

020 7283 1763

www.boisdale.co.uk

The very best grass fed Aberdeenshire beef dry aged for flavour by Aubrey Allen served with barnaise sauce, chips, watercress and tomato

7 Great British cheeses &1963 Croft port 15

Whole 1lb lobster 22.50Served with chips, mayonnaise and watercress

Please mention City A.M. to take advantage of this offer

Lloyds closes 13-man equities business

BYRICHARD PARTINGTON

FINANCIAL SERVICES

REAL-ESTATE company British Landyesterday posted 25 per cent growth inthird-quarter net asset value (NAV),and said that it is investing in thesouth-east of England with the pur-chase of a shopping centre inBarnstaple, Devon, for 30m at a net

yield of eight per cent.British Land whose portfolio is

dominated by prime retail andoffices said third-quarter NAV pershare was 548p, up 25 per cent year-on-year. Its portfolio value was 9.3bnat 31 December 2010, up 13.1 per cent.

British Land netasset value upin third quarter

BANKING

PROPERTY


Graeme Summers will lead the new N+1 Brewin partnership.

NEWS | IN BRIEF

Spains Catalunya Caixa reformsSpanish savings bank Catalunya Caixasaid late yesterday it has decided torestructure its banking activities toshore up its solvency and comply withSpanish and international rules.Catalunya Caixa, the group created bythe merger of three savings banks from

the Spanish region of Catalonia, said in astatement its board has agreed to cre-ate a new retail bank which can obtainfunding from public and privateinvestors.

LSE close hit by trading glitchThe London Stock Exchange failed tostop trading yesterday as scheduled one day after completing a major sys-tem upgrade causing confusion amongtraders, who blamed a technical prob-lem. The LSE, which ends normal tradingat 16.30 GMT before starting i ts closingauction, conceded on its website thatnormal trading did not cease until 42seconds after the official close at 16.30.The LSE, which said all trades wouldremain valid, said it was investigatingthe problem.

Fiat to invest 500m in ItalyFiat SpA will invest around 500m

(418.2m) to relaunch its niche car pro-ducing plant known as ex-Bertone, asthe Italian carmaker moves to boostproductivity at its Italian operations.In a statement yesterday, Fiat said itwill produce a new Maserati model atthe site for sale on foreign markets.

BREWIN Dolphin was advised byEdward Williams of West HillCorporate Finance, a corporate

finance advisory business focused onclients in the financial services andfunds sectors.

Previously, Williams advised onthe 113m sale of Lloyds vehicleCathedral Capital, as well as a pri-vate capital raising for specialistmotor insurer Verex. He also workedon a 105m AIM capital raising forthe Macau Property Opportunity

Fund.Prior to joining West Hill, Williams

was a managing director in HSBCsFinancial Institutions team. He has15 years corporate finance experi-ence and is a graduate of KingsCollege, London, where he read Law.

West Hills Andrew Galloway alsoadvised on the deal.

Galloway, the former head offinancial institutions at HSBCsinvestment bank set up West Hill

with other bankers in 2003.He has over 25 years corporate

finance experience from mergersand aquisitions to equity and debtfinancing.

Galloway led the formation ofHSBC Investment Banks FinancialInstitutions team which was thebanks largest revenue contributorfor a number of years.

EDWARD WILLIAMS

WEST HILLCORPORATEFINANCE

ANALYSIS l Lloyds

62

58

66

70 p


67.0915 Feb

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INTERCONTINENTAL Hotels, theworlds biggest hotelier, showed con-fidence in economic recovery by lift-ing its final dividend for the firsttime in three years and set a targetfor opening more hotels.

The British group, home to theInterContinental, Crowne Plaza andHoliday Inn brands, met forecastswith a 22 per cent rise in 2010 profit,driven by demand from Asia, busi-ness travellers and a revamp of its

Holiday Inn chain.Across the business and across the

world we are seeing some solidgrowth, finance director RichardSolomons said, adding an economicrecovery that had started in Asia wasnow looking very broad based.

InterContinental, with over 4,500hotels in more than 100 countries,said it would grow its estate by 3-5per cent a year from 2012, revamp itsCrowne Plaza chain and also sell itsflagship InterContinental New York

Barclay hotel.Its upbeat tone chimed with recent

comment from rivals, including USgroups Marriott on Monday andStarwood earlier this month.

Meanwhile, InterContinental saidyesterday that it will launch a newupper mid-scale hotel brand inChina by the end of the year, as partof plans to more than double thesize of its operations in emergingmarkets.

The group estimates that Chinawill overtake the United States as theworld's biggest hotel market by 2025.

IHG raises its

dividend as

hotels boomDEMAND for luxury four-by-four carsis booming, according to sales f iguresfrom Jaguar Land Rover parent TataMotors published yesterday.

Global sales at Land Rover, wheretop-notch Range Rover models retailfor up to 86,000, jumped 30 per centin January compared with January2009, to 17,321 cars.

Jaguar sales climbed more slowly,rising three per cent in January to3,056 worldwide, resulting in an over-all 25 per cent hike in luxury brandcar sales year-on-year.

The growth far outstripped TataMotors overall global car sales, whichrose 16 per cent to 98,998 in January.

Sales of passenger vehicles rose 17per cent to 53,183 cars.

The figures follow Tata Motorsthird-quarter results last Friday that

showed 22 per cent revenue growthand a 58 per cent jump in operatingprofit in the three months toDecember 31, compared with thesame quarter in 2009.

Jaguar Land Rover continued toshow strong profitability, the compa-ny said in the results statement, mak-ing 275m profit after tax as themarket improved and customerssnapped up its new designs. TataMotors is Indias biggest carmaker with$20bn (12.5bn) revenues in 2009.

Land Rover

sales boost

Tata Motors

BYHARRY BANKS

HOTELS

AUTOMOTIVE


ANALYSIS l InterContinental Hotels

1,200

1,100

1,300

1,400 p


1,361.0015 Feb

THE RETURN of the business traveller asplayed by George Clooney (right) in Up in theAir helped InterContinental Hotels boostannual profits, chief executive Andy

Cosslett told City A.M. yesterday. Itsupscale brands, which are popular withcorporate clients, staged the biggestrecovery, with revenues atInterContinental and Crowne Plaza up10.5 per cent and 16.7 per cent respec-tively.

Cosslett says demand from finan-cial services firms has staged aremarkable recovery, which is goodnews for IHG because they oftenspend more on rooms and services.

Financial services went to groundfor obvious reasons during the reces-sion, but its all come back. Theseclients like top hotels, and they likeluxury suites, says Cosslett.

Revenues at IHGs Groups &Meetings arm which hosts confer-ences and events are around 17per cent higher than they were lastyear. And 27 per cent of bookingswere made through its global-ly negotiated account, whichdeals directly with big corpo-rates.

Everyone is obsessed withgovernment austerity,but the truth is thecorporate world

dealt with thismuch earlier.Everyone was tak-ing out costs in2008-2009. Nowfirms are doingwhat theyre sup-posed to meet-ing people andgrowing their topline, says Cosslett.By David Crow

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Economics14 CITYA.M. 16 FEBRUARY 2011

FSB pushesfor NI breakto boost jobs

JOB creation must be encouraged bya wider holiday from nationalinsurance contributions, theFederation of Small Businesses (FSB)said yesterday.

The coalition government haspledged a national insurance holi-day for start up businesses that takeon up to five staff.

But the tax break should beextended to existing firms with up tofour members of staff that take onup to three more, the FSB said.

Almost half 44 per cent of smallfirms would take on additional staffif the government cut national insur-ance, an FSB survey revealed.

Amid rising unemployment, the

government should consider thatsmall companies are more likelythan big firms to take on people thathave been unemployed in the past 12months, it said.

The government is looking to theprivate sector to lead the recovery,

but without the right measures inplace, small firms are left withoutthe tools they need for the job athand, said the FSBs John Walker.

BY JULIAN HARRIS

UK ECONOMY

No, changing interest rates wouldnt haveany impact. Its driven by commodity prices.

GRANT CLEMENCE| QBE INSURANCE

Yes, theyve set these targets but arentbeing seen to do anything about it.

They are doing their best to control it.Interest rates need to be low for now.

JOHN FILTNESS | RFIB

JAMES COOPER| LONDON METAL EXCHANGE

CITY VIEWS: ISINFLATION HITTINGTHE BANKOFENGLANDS CREDIBILITY?

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NEWS | IN BRIEF

Weather and inflation hits USA wave of data releases delivered badnews overall for the US economy yester-day. Homebuilder sentiment stagnated inFebruary, a survey revealed. The index,which requires a score of 50 to reflectmore builders viewing sales conditions asgood than poor, stayed stuck on 16 forthe fourth month in a row. Retail sales,meanwhile, increased less than expectedin January up 0.3 per cent officialdata showed. Snowstorms were partlyblamed for the slowdown. Global pricepressures were reflected in a 1.5 per centrise in import prices, nearly double therate expected by economists. Yet therewas good news for US manufacturing asthe Empire State index rose to 15.43 inFebruary from 11.92 in January.

British productivity on the riseProductivity in the UK rose by 40 percent between 1991 and 2007, the fastestof all G7 countries, the Office for NationalStatistics said yesterday. However, themeasure (GDP per worker) fell during therecent recession era (2007-2009). Interms of GDP per hour worked, the UKremains below Germany, France and theUS, but above Japan and similar toCanada and Italy. The US continues tolead the way in both measures of produc-tivity, while Germany has the secondhighest GDP per hour out of the G7.

Steady price inflation for SpainSpanish consumer price inflation waslevel in January, sticking at Decembersannualised rate of three per cent.

GROWTH in the Eurozone was moresluggish than expected in the finalthree months of last year, reaching just0.3 per cent, official data sho wed yes-terday.

The euro fell in early trading, drop-ping close to $1.346 (0.84), as Germanyreported fourth quarter growth of 0.4per cent, below expectations. However,the currency recovered against the dol-lar as the day progressed.

Germanys disappointing result was

blamed partly on adverse weather con-ditions, mirroring the situation in theUK from earlier in the month, wheresnow was blamed for an estimated halfpercentage point drop in GDP at theend of 2010.

There is really only one importantreason why growth slowed: the winter

weather, commented Andreas Rees,an economist at Unicredit. There is noreason for concern. This is not the

beginning of the end of the recovery,just a pause.

German confidence for the nearfuture remains strong, according tothe Zew index, released yesterday.

A positive balance of15.7 per cent ofsurveyed investors expect conditions toimprove over the coming six months.

And the Zews measure of currentconditions rose above expectations to85.2 from 82.8, hitting its highest levelsince July 2007.

The French economy expanded by0.3 per cent over the same period halftherate expected byeconomists.

Strong exporting economies led theway for the Eurozone,with growth of0.6 per cent in Austria and Holland.

However, Mediterranean and periph-eral economies continue to drag on the17 country area.

Spain (0.2 per cent) and Italy (0.06per cent) recorded weak growth, whilethe economy contracted in troubledPortugal (-0.3 per cent) and Greece (-1.4percent).

German snowdampens GDPfor EurozoneBY JULIAN HARRIS

EUROZONE ECONOMY

House prices rise on themonth yet slump expected

HOUSE prices rose by 0.5 per cent inDecember compared with November,the Department for Communities andLocal Government (DCLG) said yester-day.

However, over the whole of thefourth quarter of 2010, prices fell by0.4 per cent, compared to the previousthree months.

The DCLG provides lagging evi-dence on house prices as the office cal-

culates its index at the time whenmortgages are completed, saidHoward Archer of IHS Global Insight.

While the department showed a 3.8per cent annualised rise in prices, this

was down from Novembers rise offour per cent. House prices will grad-ually trend down in 2011 after losingground in the latter months of 2010,

Archer said.

BY JULIAN HARRIS

HOUSING

VAT hike and inflation seeconsumer morale tumble

CONSUMER confidence fell to just sixpoints above its all time low, accord-ing to a Nationwide index releasedtoday.

After rising to 54 in December, theindex dropped to 47 last month,

weighed down by a collapse in spend-ing confidence that was mainlycaused by the VAT rise and inflation,

Nationwide said.

The surveys spending index plum-meted by 20 points, to its lowest level(70) since November 2008.

Meanwhile the expectations index,which measures confidence over thenext six months, dropped by 10points.

Less than one in five consumersbelieve things will improve over thenext six months, said Nationwideschief economist Robert Gardner.

BY JULIAN HARRIS

UK ECONOMY

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WM MORRISON yesterday announcedthat it had finally taken the plungeinto online retail, splashing out 70mon baby goods firm Kiddicare.

The supermarket giant has so farresisted the move to the web whilerivals like Sainsburys, Tesco and Asdasee online sales as vital to their finan-cial health.

But the purchase of Kiddicare willgive Morrisons a foothold in the non-food retail market. The UKs fourthlargest supermarket chain has identi-fied that as an area ripe for growth.

The retailer had been tipped toapproach online delivery firm Ocadoover a possible tie-up, but thatprospect has been dismissed for thetime being.

Scott and Elaine Weavers-Wrightrun the family-owned Kiddicare busi-ness, which had a turnover in 2010 of37.5m and has grown by 75 per centin the past three years.

It owns a store in Peterborough, where it has 160,000 sq ft of ware-house, retail and office space.

Morrisons chief executive DaltonPhilips said: This acquisition bringsnot only a respected, successful and

fast-growing specialist retailer intothe Morrisons group but also arobust, scalable and highly advancedtechnology platform around which

we can begin to build our e-com-merce of fer.

Morrisons plans to launch newproducts from the companys onlineplatform from next year, whileKiddicare will continue operating asKiddicare.com.

RBS analyst Justin Scarboroughsaid: This transaction, while small insize, should highlight the pace ofchange within the group. The oppor-tunity to leverage the Kiddicare rangeacross Morrisons 12m weekly shop-pers is clear, in our view, as is thefuture opportunity for the group to

widen its online non-food offer.

DOMINOS Pizza has seen its profitsurge by 27 per cent but sales start-ed to slow in January.

The company, which operates theBritish and Irish franchises of theglobal delivery brand, said salesgrowth at shops open more than a

year slowed to 4.7 per cent in the firstseven weeks of 2011 compared with

an 11.9 per cent increase throughout2010.

Meanwhile finance director LeeGinsberg said its sponsorship ofBritains Got Talent was set to endafter it failed to agree terms with

broadcaster ITV over extending thedeal.

Its fair to say we wont be sponsor-ing that going forward. ITV was look-ing for an outrageous amount torenew that, he said. Dominos saidthe current sales performance cameagainst a backdrop of exceptional

comparatives from the same periodin 2010 and the current difficult eco-

nomic climate. Panmure analystSimon French said: It is the weakestnumber we can recall over the lastfive and a half years. Comparatives

will only get harder over the rest ofthe first half asthe football World Cup had a verypositive impact on the second quarterlast year.

The company delivered on averagea million pizzas a week to householdsin Britain and Ireland in 2010.

The company has seen rapid salesincreases through its iPhone app.

Dominos drops its Britains Got Talentsponsorship as it reports a profit rise

PAWNBROKER Albemarle & Bond said yesterday that heavy advertising by websites that buy gold from con-sumers by post has boosted business.

Revenues at its gold-buying armwere up 22 per cent in the six monthsto the end of December.

The firm said that that was beingboosted by online advertising in theindustry.

But A&Bs pre-tax profits slippedone per cent to 10.7m in the period

due to the cost of opening new shops.Chief executive Barry Stevenson

said: We are expanding the corebusiness and exploring new opportu-nities including adding at least 25full line stores per annum, openingflexible gold buying pop-up shops,developing new routes to market, tri-alling new unsecured lending prod-ucts, introducing new marketing and

branding strategies, and furtheincentivisation of our highly trained

staff to deliver outstanding levels ofservice.

A&B given a lift as goldpulls in more customersRETAIL

PREMIER Foods, Britains largest foodproducer, posted a 0.6 per cent rise infull-year trading profit and said itsdebt following two recent disposals

would fall to under 1bn.The maker of Branston Pickle, Bisto

gravy and Hovis bread, said yesterdaythat it made a trading profit of311m in the year to 31 December.

That compares with analysts con-sensus forecasts of 303m accordingto analysts, and 309m made in 2009.

The firm, which also makes MrKipling cakes, Loyd Grossman sauces

and Hartleys jam, said group salesfell 3.5 per cent to 2.57bn, reflectinglower non branded sales.

Premier Foods key priorities are togrow its branded business and reduceits debt. Net debt was down 103m to1.26bn at the year end and will beunder 900m after it offloaded itsmeat-free and canned grocery divi-sions. Shares in the company havegone up 20 per cent in the last threemonths.

Premier Foods cuts debtand aims to boost brandsCONSUMER

FRENCH food group Danone is plan-ning to raise some of its prices this

year as well as making productivitygains to help combat an expected riseof up to nine per cent rise in rawmaterial costs, it said yesterday.

The worlds largest yoghurt makerwith brands like Actimel and Activia,forecast the price of milk, its biggestraw material cost, will rise five toeight per cent but looked for a smallrise in 2011 operating margin, helped

by cost cutting in Russia. The Paris-based group said it

expects six to eight per cent growthin underlying sales this year, after a6.9 per cent rise in the fourth quarterof 2010 and in the full-year, despitehigher milk costs and tough econom-

ic conditions, especially in southernEurope, like Spain.Danones operating profit margin

was unchanged last year at 15.2 percent and it sees a small rise to 15.4 percent in 2011.

The shares closed 3.3 per cent high-er after the announcement at 45.42,reflecting the groups confidence incoping with cost increases and set-ting 2011 sales and margin targetshigher than analysts expected.

Chairman and chief executiveFranck Riboud anticipated no majorchange in consumer spending inindustrialised and emergingeconomies, but saw growth in Russia

after sealing a merger with Unimilklate last year to make it the countrysleading provider for milk products.

We will aim to outperform ourcompetitors in organic sales growth,margins and cash generation, hesaid in a statement.

Finance director Pierre-AndreTerisse told a conference call: We arelooking at raw material cost increasesof six to nine per cent including fiveto eight per cent in milk.

Danone warns of price riseBYHARRY BANKS

CONSUMER

Morrisons in

70m deal tojoin web warBY JOHN DUNNE

RETAIL

BY JOHN DUNNE

CONSUMER

Consumer News 15CITYA.M. 16 FEBRUARY 2011

ANALYSIS l Morrison

260

270

280p


280.0015 Feb

ROTHSCHILD was adviser to WmMorrison on the deal. The bank haskept under wraps the finer detailsof the negotiations which see thesupermarket giant join the move toonline trading, albeit after the othermajor chains took the plunge.The price of 70m has been seen asat the upper end by analysts butKiddicares rapid expansion gave itvaluable bargaining clout.Rothschild advised on the disposalof Pets at Home to Kohlberg KravisRoberts last year. It also advised ona 311m placing and rights issue forelectricals giant DSG International.

ROTHSCHILD

THE family behind Kiddicare willshare a 70m pot between themafter their fast expanding businesscaught the eye of supermarketgiant Wm Morrison.

Family-run Kiddicare was founded in 1974 by Neville andMarilyn Wright, andis now run by theirdaughter, Elaine

Weavers-Wright andher husband Scott.

Kiddicare origi-nally traded asRainbow, a supplierof baby products, pros-pered from its begin-nings, due to a policy ofkeeping prices low bypaying suppliers earlyand triggering dis-counts that itpassed on to cus-tomers.

Rebranded inthe Eighties,the businesshas grownfrom first-yearturnover of

just 10,000.However,

while thefirm is still

owned by the Wrights, a lot of thatgrowth has required the informa-tion technology expertise of IT con-sultant Scott Weavers-Wright, whois now a partner in Kiddicare.

He launched the company on theworld wide web in 1999, ahead ofmany other retailers.

The website now accounts for80 per cent of its business andhas 40,000 customers amonth.

He said yesterday: Elaineand I are extremely excitedabout partnering withMorrisons to accelerate thepace of future growth at kid-dicare.com and look forward

to working with the Morrisonsteam to develop their online

offer. There are fantastic

synergies betweenthe two busi-

nesses andour plat-form willallow both brands toe n j o y future suc-cess and toc o nt i nueto deliveran unri-

valled cus-t o m e rexperience.

BY JOHN DUNNE

PROFILE

Family makes fortunelook like childs play

Source: The supermarkets' annual figures

Web from 1998 -

500m sales last year

Web from 2000 -


Web from 1996 -sales growing at 20

per cent a year with

120,000 orders a

week on average

Web from 1999 -


Web from 2000 -

does not release

online sales figures

SCOTT WEAVERS-WRIGHT

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SHARES in Yellow Pages publisher Yelltumbled yesterday after the directory business said its full-year earningswill miss market forecasts.

The firm said its pre-tax profits fellto 38.6m in the nine months to theend of December, from 75.1m in thesame period a year ago, as it blamedsliding revenues from its core printeddirectories.

Group revenue was down 11.8 percent to 1.35bn, with the companyadding that the current financial year is now expected to be slightly below the current range of marketexpectations.

The stock closed 16 per cent downat 8.85p.

Yell, which also runs units in theUS, Latin America and Spain, hasbeen hit by the decline of its printeddirectory business as customersswitch to digital media. Sales from itsprinted directories, which accountfor almost 70 per cent of revenues,fell to 936.6m in the nine-monthperiod from 1.13bn last year.

The company also labours under a2.8bn debt pile, which it raised aftera number of overseas acquisitions

during the last decade.Standard & Poors recently down-

graded Yells credit rating to junkstatus below investment grade and revised its outlook from stable tonegative. The rating agency addedYell was unlikely to meet its guidanceon earnings, debt and bankingcovenant headroom in 2011-12.

The firms new chief executiveMike Pocock, who took over inJanuary, told investors last month he wants to boost its online sales asquickly as possible. He plans toupdate the market on the conclu-sions of his business review in June.In a bright spot for the firm, sales atits digital media division rose 10 percent on a constant currency basis to342.2m over the last nine months.

FRENCH power company EDF postedhigher annual profits yesterday butdisappointed investors with a profitforecast for this year that could proveover-optimistic due to de-regulationof the French market.

The former French monopoly isbeing forced to sell up to a quarter ofits domestic nuclear output to com-

petitors to help open up markets.Traders said EDFs 2011 profit target

was based on a maximum price of42(35) per megawatt hour (MWh) thatthe government could set for nuclearpower production, which EDF willhave to sell as part of a liberalisationlaw.

EDF posted a 4.4 per cent rise in2010 earnings before interest, tax,depreciation and amortisation andforecast a rise of between four and sixper cent this year.

The utility group said core earn-

ings came in at 16.62bn last year up from 15.93bn in 2009 and the

16.45bn average forecast.Sales rose 10.2 per cent to 65.17bn

in 2010, boosted by higher availabilityof EDFs nuclear and hydro powercapacity in France. This was despite anenvironment EDF described as diffi-cult, with electricity and gas demandstill not back to pre-crisis levels. Netprofit fell to 1bn, and EDFs debt fellto 34.4bn by 31 December, from42.5bn at the end of 2009. It is expect-ed to fall again to 27.1bn once the

sale of a 45 per cent stake in EnergieBaden-Wuerttemberg is effective.

Deregulation threatens EDF forecastsas profits rise on increased capacity

BRITISH water and waste companyPennon said the severe winter weath-er hurt operations at both of its units,though said trading since October hadbeen in line with its expectations.

Britain was hit by an unusuallyhard winter, with one of the coldestDecembers on record.

Pennon which supplies customersin Devon and Cornwall via South

West Water yesterday said while thecold weather led to a surge in burst

pipes, this would not materiallyimpact results.

The weather also hurt operations atits waste management unit, Viridor,but the company expects the unit toreport a higher pre-tax profit for 2010.

Analysts currently expect thecompany to report a full-year pre-tax profit of 175.9m, on revenue of1.11bn.

Pennons statement follows bullishannouncements by Britains largest

listed water utility, United Utilities,and Northumbrian Water Group.

Trading on course at UKsPennon despite weatherUTILITIES

ENTERTAINMENT One said yesterday it expected full-year results to beat marketestimates after its Britishanimated televisionseries, Peppa Pig (right),racked up strong retailsales in 2010.

The entertainment com-pany that specialises inthe acquisition,production and

distribution of filmand television con-

tent said Peppa Piglicensing activityhad a robust

Christmas with salesof more than 200m.

The firm said Peppa Pig was the highest sellingpre-school toy licence inthe UK last month, a posi-

tion previously held byThomas the TankEngine.

MEDIA

BRITISH IT firm Micro FocusInternational lost some large deals in

the US in its third quarter and said it would not be able to make up theshortfall, sending its shares plunging.

The group said US governmentdepartments and major corporationson the east coast had scrapped deals toupdate applications running on main-frame computers.

We found Federal to be very hardgoing, principally around the budgetdebates which are going on, chiefexecutive Nigel Clifford said in a call

with analysts yesterday.Some modernisation and upgrade

projects for major US financial institu-tions had also fallen victim to changedspending priorities, he added. The

warning sent shares in the company,which also has a software testing busi-ness, down as much as 38 per cent to atwo-year low of 246p in morning trad-ing, before recovering slightly to closeat 291p.

Micro Focus, which supports applica-tions for Tesco and Boeing, downgrad-ed its full-year forecasts after thethird-quarter miss, with revenue forthe year to the end of April now expect-ed in the range $432m-442m and core

earnings of between $159-$167, beforea $14m-18m restructuring charge. Thefirm also warned in December itexpected a flat second-half.

Micro Focus sees sales stallBYHARRY BANKS

TECHNOLOGY

Yell warns its

annual profitwill fall shortBYROGER BAIRD

MEDIA

BYHARRY BANKS

ENERGY


NEWS | IN BRIEF

Exxon Mobil boosts reservesExxon Mobil Corp said its oil and gasreserve additions last year were doubleits production, marking the biggest jumpin more than a decade, with gains

fuelled partly by the oil companys pur-chase of XTO Energy. Exxon, the worldslargest publicly traded company, said itincreased its proved reserves by 3.5bnoil equivalent barrels, or 209 per cent ofits production, bringing its reserve baseto 24.8bn oil equivalent barrels. Big oilcompanies have struggled to gain accessto new supplies as countries with vastreserves like Venezuela have handedthose over to state-run firms.

DTZ books record transactionsDTZ Investment Management complet-ed a total of 700m of transactions in2010 a record for the fund manager inits 40-year history. This was achievedfollowing a particularly strong finalquarter, with 130m of transactionscompleting in December. DTZ IM hasactively invested in the UK for a numberof pension fund clients looking toincrease their property weightings.Notable deals during the course of theyear included the purchase of the 95mCobalt portfolio from Wellcome Trust,an off-market 30m acquisition onJermyn Street, SW1, the closing of a30m industrial portfolio acquisitionshortly before Christmas.

Philogen pulls Milan floatSwiss-Italian biotech group Philogen haspulled its plans to list on the Milan stockexchange after Bayer ended a partner-ship it had with the group. The initialpublic offering would have been Europesfirst biotech listing this year and was anindication appetite for the sector waswarming up again. Philogen focuses ontreatments for disorders related to thegrowth of new blood vessels which canplay a role in illnesses such as cancer andrheumatoid arthritis.

ANALYSIS l Yell

11

13

9

15 p


8.8515 Feb

ANALYSIS lMicro Focus International Plc

360

400

320

440 p


291.0015 Feb

Yell chief executive Mike Pocock will update the market about his plans this summer

ANALYST VIEWS: WHAT ARE THE PROBLEMSYELL FACES THIS YEAR? Interviews by Roger Baird

LORNA TILBIAN | NUMIS

We are downgrading our full-year 2011 and 2012forecasts. We expect further investment in digital andbelieve the group would use any cyclical upswing in theshare price to launch a needed second rights issue.

PAUL GOODEN | RBS

The problem management has is that print stillaccounts for 69 per cent of group revenue and is in free fall.Digital products are under-invested and there is limited roomto invest given Yell is close to banking covenants.

SAM HART | CHARLES STANLEY

It is hard to see the profits the firm is making at itsonline business offsetting the large falls in sales that comefrom its printed unit that is in terminal decline. Investors areright to be worried about its balance sheet.

Entertainment One soarson Peppa Pig success

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AXAAmanda Blanc yesterday started as

chief executive of the insurers commer-cial lines business, including its distribu-tion arm Bluefin Insurance Services.

She will report to group chief executivePaul Evans and will become a memberof the AXA UK board the first womanto do so.

Blanc won the title of City Woman ofthe Year in 2008. She comes to AXAfrom Towergate Partnership, where she

was most recently deputy group chiefexecutive officer having joined in 2006.She has also held senior positions at

Commercial Union, AXA and Groupama.

Lloyds Bank Corporate MarketsFour new hires were announced yester-day, as part of the banking divisionspush for new and existing clients this

year.Alex Wilson has been appointed

managing director and head of banksfor northern Europe, after more thanten years in client-facing roles in thebusiness. Wilson will be responsible forSofia Larsen and Anders Jensen, who

have taken newly-created roles as rela-tionship managers in the global finan-cial institutions team, and PhilippeWenden who will work with Frenchbank clients.Larsen, originally from Sweden, has

spent ten years covering financial firmsat WestLB, HSBC and most recentlyNAB. Anders has been with Lloyds

since October, and has previously cov-ered German-speaking firms for BNPParibas Fortis and Saxo Bank. Wendenalso joins from BNP Paribas.

Lester AldridgeThe law firm has hired Allan Reason as

a partner in its London dispute resolu-tion team. Reason has experience ofdisputes in banking, commercial andproperty sectors, and has advised highnet worth individuals on contentiousmatters. He has worked on both litiga-tion and alternative dispute resolution,with experience of the London Court ofInternational Arbitration.

CITY MOVES | WHOS SWITCHING JOBS Edited by Marion Dakers

BarclaysSally Bott has joined the bank as group humanresources director and member of the execu-tive committee. Bott will start her role in April,replacing Cathy Turner. She joins from BP,where she was HR director, and has alsorecently served as a non-exec board member

at UBS. Before this, she was managing direc-tor and head of HR at Marsh & McLennan. Thiswill be Botts second stint at Barclays, havingworked there in HR from 1997 to 2000.

+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

US markets slipafter retail data

M ARKET breadth weakenedand a prominent investorretreated from bullish posi-tions as a vulnerable US stock

market slipped off 2-1/2-year highsyesterday.

Energy and basic materials stocksled the slide in the S&P 500s worst

day since 28 January, and billionaireinvestor Ken Fisher said he is moreneutral on stocks than Ive been inyears.

Volume remained light with 7.1bnshares changing hands on the combined New York Stock Exchange,NYSE Amex and Nasdaq, below last years estimated daily average of8.47bn.

US retail sales data cast doubts on arebound in consum

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