cityam 2011-02-18book

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CITY: NO JUSTICEIN FSA REFORMS

Certified Distribution

03/01/11 till 30/01/11 is 97,465

BATS close

to tie-upwith Chi-X

A THIRD stock market merge between BATS Global Markets, thethird-largest US exchange, and Chi-XEurope, a major European platform, isdue to complete today.

Sources told City A.M. the deal was“very close” to completion and anannouncement should be made today,ending weeks of talks.

The deal is likely to have beenspurred on by a week-long frenzy of stock market mergers in which theLondon Stock Exchange and TorontoMetals Exchange agreed to combineand Deutsche Boerse and NYSEEuronext confirmed their tie-up.

Chi-X is Europe’s biggest multilater-al trading platform with about 18 percent market share, while BATS inEurope has about seven per cent, giv-ing their combined group a biggerpresence than the LSE on 24 per cent.

But a merged NYSE Euronext andDeutsche Boerse group would controlabout 28 per cent of the market.

BATS and Chi-X Europe compete with national stock exchanges onequity trades and need scale and mar-ket share to remain profitable.

Launched in 2007, Chi-X Europe isowned by a Nomura subsidiary and 13

banks including Citigroup, MorganStanley and Credit Suisse. Kansas-

based BATS was founded in 2005 andis also privately owned.

Chi-X Europe has been up for salesince mid-2010 and has hired LexiconPartners to advise it. Chi-X Europe andBATS both declined to comment.

BY ALISON LOCK

FINANCIAL MARKETS▲

TOUGH new powers planned forBritain’s new financial watchdog pro-

voked angry exchanges yesterday inthe City, with some lawyers callingthe measures an affront to natural

justice.Lawyers and firms have warned

that the City’s new regulatory regimeis being given powers that couldreverse the ‘innocent until provenguilty’ rule of law.

Under proposals unveiled by the Treasury yesterday, the FinancialConduct Authority (FCA) – the new

body being set up to protect con-sumers – will be able to informinvestors of a pending enforcement

before a firm has been able to mounta response.

Headed by Hong Kong regulatorMartin Wheatley, the FCA will alsohold the power to ban retail products

before the conclusion of a probe.Shocked City firms yesterday raised

fears that the powers could havesevere repercussions for businessesouted under the measure, even if they are absolved of any wrongdoing.

Founder of brokerage Hargreaves

Lansdown Peter Hargreaves said: “If they said it about me, it would ruinmy business. Shareholders would losemoney and investors would leave.

BY RICHARD PARTINGTON & JULIET SAMUEL

REGULATION▲

www.cityam.comIssue 1,325 Friday 18 February 2011 FREE

SIR JAMESDYSON

ON HOW TO MAKE

BRITS MORE

ENTERPRISING P21

ANDREW SENTANCE FUELSROW OVER INFLATION

BRITAIN’S RATE RISE BATTLE P3

BUSINESS WITH PERSONALITY

“If they’re going to name andshame they need to be pretty sure they’re doing the rightthing.”

City law firm ReynoldsPorter Chamberlain attackedthe plans as “contrary to princi-ples of natural justice.”

Regulatory partner StevenFrancis said: “By pre-emptively informing a firm’sclients of its investiga-tion the new regula-tor could do seriousdamage to thefirm’s reputationand business. Themere fact of aninvestigation sim-ply should not bepublicised untilthere has been anevidence-baseddetermination.”

Changes tothe way Britain’s finan-cial services arecontrolled will

begin as early as April, asstaff from the

Bank of England moveto the FSA togradually take

FTSE 100 ▲ 6,087.38 +2.11 DOW ▲ 12,318.14 +29.97 NASDAQ ▲ 2,831.58 +6.02 £/$ ▲ 1.62 +0.01 £/¤ 1.19 unc ¤/$ 1.36 unc

l Angry founder of City broker Hargreaves Lansdown, Peter Hargreaves.

on regulatory responsibility. The move comes ahead of the cre-

ation of the Prudential Regulation Authority, an independent subsidiary of the Bank that will be headed up by Sants with Bank of England executive

Andrew Bailey as his right-hand man. The length and complexity of the

process could also put Britain at a dis-advantage internationally.

Lord Mayor of London MichaelBear said: “What’s unfortunate is the

timing of the restructuring in reg-ulation. The battle is going on [inEurope] – the last thing we wantto do is to have to go back to ask how to fight the battle. It’sunfortunate we don’t have astrong regulator in place now,fighting tooth and nail for us.It’s the wrong time to berestructuring. There’s adegree of uncertainty where what we want is certainty.”

Partner at DLA PiperMichael McKee also warnedit could hit the economy.

He said: “financial institu-tions often get pilloried andthis will just increase thatsense of ‘why would you giveany money to finance’,

which isn’t, in the long term,in the interest of the country or the economy.”

MORE ON REFORM: P4

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News2 CITYA.M. 18 FEBRUARY 2011

Lawyers winbig on Madoff LAWYERS are reaping millions in feesfrom the financial devastationcaused in the collapse of BernardMadoff’s $50bn (£31bn) Ponzi scheme

which paid investors purportedreturns from funds deposited by new investors.

The Securities Investor ProtectionCorp (SIPC), an industry-sponsoredorganisation that provides financialprotection to investors, said yesterday it has paid more than $290m to law firms and consultants since Madoff’sscheme fell apart in 2008. This is inaddition to the $790m the SIPC is pay-ing to victims of Madoff’s fraud.

The lawyers and consultants aretasked with tracking down Madoff’sstolen assets so they can be distrib-uted back to the victims of his scam.

This includes fees of nearly $128mfor Baker & Hostetler, the law firmthat is spearheading the recovery of stolen property. The firm’s IrvingPicard, appointed as trustee by thefederal bankruptcy court overseeingthe case, is being paid an additional$3.2m. SIPC said it has paid another$10m to additional law firms“around the world.” In addition, theorganisation has paid nearly $150mto consultants, including $84m to FTIConsulting, $48m to AlixPartners,$2.5m to Renaissance Associates andabout $10m to others.

BYKATIE HOPE

FRAUD▲

States no longer monopolise citizens

In a modern, global and open world,states have to compete for people.

Weirdly, that is something that a largenumber of commentators have failedto recognise; they continue to argue asif Britain remained stuck in a pre-glob-alised world. They assume implicitly that governments remain quasi-monopolies, as was the case through-out most of human history, withcitizens mere subjects forced to put up

with poor public services, high taxes,crime, misgovernment and a poorquality of life. Yet the reality is thatthere is now more competition than

ever between governments for humancapital, with people – especially thehighly skilled and the successful –more footloose and mobile than ever

before. This is true both within the EU,

where freedom of movement reins,and globally. Even the coalition, whichis tightening restrictions on non-EUmigrants, has made it easier for com-panies to move foreign nationals to theUK if they earn £150,000 a year.

As long at it remains within a liber-al, free-trade framework, competition

between governments is as good forindividuals as competition betweenfirms is for consumers. It keeps downtax rates, especially on labour and cap-ital, which is good for growth and jobcreation; states need to produce betterservices at the cheapest possible cost.

And if governments become too irritat-ing or incompetent, it allows an exitstrategy. It is strange how pundits whoclaim to want greater competition inthe domestic economy – for example,in banking – are so afraid of competi-tion for people between states, decry-

ing it as a race to the bottom. Yetmonopolies are always bad, in every sphere of human endeavour, breedingcomplacency, curtailing innovationand throttling progress.

Contrary to what has repeatedly been claimed by the monopolists, theCity is losing out to other jurisdictionsin the race for people. Even thoughthere is very little office space, housingor vacancies in schools in Switzerland– the Swiss are reluctant to expand –there has been a relatively large influxof London financiers to that country,especially from hedge funds and ener-gy and commodity trading firms. It isthe wealthiest, most senior individuals

who are leaving. Figures from theSwiss Federal Migration Office trackeddown by Channel Four reveal 383 UK citizens working in banking and finan-cial services moved to Switzerland in2010, up 28 per cent on the previous

year. Taking the overall banking, insur-ance and consulting sectors, includingIT, 1,379 Britons were given permissionto work long-term in Switzerland in

2010, up 29 per cent. This compares toa rise of 14 per cent for non-UK citi-zens, though a chunk of the latter willalso have moved from London.

The Swiss Funds Association esti-

mates that 20-25 UK hedge funds haveset up offices in Switzerland over thepast year alone. Switzerland has also

witnessed an inflow of Russian oiltraders, including Rosneft andBashneft; several other teams haverecently left London for Geneva orZurich. TNK-BP is opening a tradingarm in Geneva; it will be based a short

walk away from the third, fourth andfifth largest trading firms in the world.

This is a blow for London, which forthe first time since the late 1980s is los-ing its lead in the trading of physicalcrude and oil products.

Globalisation is not just about buy-ing cheap Chinese goods: it also limitsthe state’s powers to over-tax or over-control its citizens. Britain needs to

wake up to this new reality, and [email protected] Follow me on Twitter: @allisterheath

GREENCORE has leapt back into theNorthern Foods fight, after meeting

with the Northern board to warnthem of a further bid backed by pri-

vate equity, people familiar with thesituation said yesterday.

Greencore has kept the identity of its potential private equity partnerclose to its chest, refusing to tell eventhe Northern board its name, sourcestold City A.M.

Industry insiders had written off afurther bid from Greencore, followingtycoon Ranjit Boparan’s £342m all-cash offer for Northern last month.

Greencore appointed formerCadbury executive Andy Williams asits finance director this week, fuellingspeculation that it was ready to walk away as its earlier merger plans hadplaced Northern’s Simon Herrick inthe chief financial officer job.

“[Greencore]is trying to find a cre-ative way to consummate a deal,”another source said yesterday.

BYMARION DAKERS

M&A▲

Greencore seeks bid partnerGreencore CEO Patrick Coveney is not giving up the fight for Northern Foods

NEWS | IN BRIEF

BP spill could have been avoidedBP had workers on the doomedDeepwater Horizon rig who could haveprevented the missteps that led to themassive Gulf of Mexico oil spill, but theywere not consulted, the White House oilspill commission said yesterday. In anexpanded report on the causes of the BP

drilling disaster that killed 11 workersand ravaged the US Gulf coast last sum-mer, the commission released newdetails about the events that precededthe BP accident. The commission’s inves-tigators said BP workers failed to ask aknowledgeable company engineer whowas visiting the rig about unexpectedresults from a critical negative pressuretest on the rig.

Landis+Gyr hires CS and LazardSwiss smart meter company Landis+Gyrhas hired Credit Suisse and Lazard Ltd toadvise on a sale of the company, peoplefamiliar with the matter said yesterday.Landis+Gyr, which could be worth wellover $1bn, is expected to draw interestfrom multi-industry conglomerates suchas General Electric, Danaher, JohnsonControls and Honeywell International, aswell as industrial groups based in Europe.

EDITOR’S LETTER

ALLISTER HEATH

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

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

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 Editor’sCode of Practice, a copy of which can be found at www.pcc.org.uk

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

Lawyers tasked withtracking downMadoff’s stolen assetsare receiving millionsin fees

BALLS WARNS KING ON BANKCREDIBILITYEd Balls, shadow chancellor, has crit-icised Mervyn King, Bank of Englandgovernor, saying he should step outof the political arena and stop tyinghis credibility to the coalition’s“extreme” deficit-reduction plans. Inan interview with the Financial

Times, Balls drew comparisons between King’s stance and the back-ing lent by the Bank of England tothe Treasury’s fiscal hawks duringthe Great Depression.

BRUSSELS ATTACKS RULES ON TAXAVOIDANCERevenue & Customs’ main weaponfor stopping offshore tax avoidanceis under attack from Brussels, whichsays rules that stop investors movingtheir wealth abroad impinge on fun-

damental principles of the singlemarket. The challenge is the latest

high-profile dispute over the ability of taxpayers to take advantage of low

tax rates in other parts of theEuropean Union.

US DOUBTS OVER INDIA JET FIGHTERPARTNER

The US government has expresseddoubt about the suitability of corpo-rate partnership with an Indian stateaerospace company as Boeing andLockheed Martin bid to supply New Delhi with 126 strike fighters. TheUS is pitching for what is one of the

world’s largest military contracts, worth $11bn

SCIENTISTS PROJECT HUMANS INTOAVATARSSwiss scientists have projected volun-teers into the body of an avatar or

virtual human, taking virtual reality to a new level.Scientists at the Ecole PolytechniqueFédérale de Lausanne (EPFL) even

made men feel like women and women like men.

CABLE IS FAILING UK BUSINESS, SAYMPS

Vince Cable’s Business Departmenthas been accused of indulging inempty rhetoric and failing to producea coherent strategy for growth in a

withering assessment of the pastnine months. MPs on the CommonsBusiness, Enterprise and Skills com-mittee will say in a report publishedtoday that the Department is lettingdown British companies, particularly in failing to break the bank-lendingimpasse.

HEINEKEN HOLDS LINE ON PRICES ASSALES SLIDEBritain’s biggest brewer suffered a sharpfall in sales volumes last year as it soughtto hold the line on pricing with two of the country’s most powerful supermar-ket chains. Heineken, has been the mar-

ket leader since its takeover of Scottish &Newcastle in 2008.

PRESIDENT BARACK OBAMA TO MAKESTATE VISIT TO BRITAINUS President Barack Obama is tomake a state visit to the UK in May after accepting an invitation from theQueen, Buckingham Palace hasannounced. Mr Obama will be joined

by his wife Michelle for the three-day trip, which comes ahead of the G8summit of world leaders in France

which the American politician isexpected to attend.

WAR ON THOUSANDS OF LOCALBOROUGH COUNCIL ‘NON-JOBS’

Almost three million people areemployed by local borough councilsafter an “explosion” in “crazy non-

jobs”, the coalition has claimed. Localauthorities have taken on an extra180,000 workers since 1997, with thetotal number not employed in tradi-

tional front-line roles now standing atalmost 750,000.

BANKS FIND LOOPHOLE ON CAPITALRULESome foreign banks are moving torestructure their US operations toavoid one of the most-burdensomerequirements of the new Dodd-Frank law. In November, Barclays quietly changed the legal classification of theUK bank’s main subsidiary in the USso that the unit would no longer besubject to federal bank-capitalrequirements. Several other banks

based outside the US are consideringsimilar moves.

LIBYA PROTEST FATALITIES PRESSUREGADHAFILocal media and human-rightsgroups monitoring Libya reported atleast four protesters killed in recentclashes with security forces andregime supporters, as Colonel

Moammar Gadhafi mobilized largepro-government demonstrations.

WHAT THE OTHER PAPERS SAY THIS MORNING

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PRIOR warnings over spiralling infla-tion are “being borne out by events,”according to Bank of England rate set-ter Andrew Sentance, who yesterday accused his Bank colleagues of serious-ly understating the threat of risingprices.

Sentance’s fiercely hawkish wordspreceded a rise in sterling, also aided

by a positive business survey for theUK’s thriving manufacturing sector.

During the day sterling traded with

gains of around 0.5 per cent versus thedollar at $1.617.

In an outspoken attack, Sentancesaid: “I argued that delaying policy action in the second half of last year

would mean bigger and sharper inter-est rate rises might eventually be need-ed to control inflation. I am afraid thatthis warning is being borne out by events.”

“He is really stepping up the pres-sure for the Bank of England to actnow by coming out with all his anti-

inflation guns blazing,” commentedHoward Archer of IHS Global Insight.

Sentance’s comments came the day after a surprisingly and defiantly dovish launch of the Bank’s latestinflation report by Mervyn King, whohad insisted that a rate rise “may bemany quarters” away.

But the Bank’s latest inflationreport, published this week, “is toooptimistic,” Sentance responded, yes-terday. “The forecast published a yearago suggested that inflation would bearound one per cent in the first half of this year, whereas it has already hit

four per cent and is set to move high-er,” he said.

And a devalued pound is stoking theimpact of global inflationary pres-sures on the UK, Sentance said.Nudging up rates might bring about a“modest appreciation of sterling,” pro-tecting Britain from price pressuresfrom abroad.

“The value of the pound needs to beone of the key areas of focus for theMPC,” Sentance said.

ECONOMICS: P15

Sentance hitsout at Bank

over inflation BRITISH bankers migrating toSwitzerland surged by almost a thirdlast year, as its low personal and busi-ness taxes lured workers to the alpineterritory.

A total of 383 British citizens work-ing in banking and financial servicesmoved to Switzerland in 2010 –mark-ing a 28 per cent increase on 2009,according to official figures from theSwiss Federal Migration Office.Including insurance and consultingindustries in the financial sector,1,379 Britons gained permission to

work in Switzerland in 2010 – a 29 percent increase over the 2009 figure.

The increase in the rate of immigra-tion of British bankers exceeds that of other nationalities, according to theFederal Migration Office, suggesting

that the 50p top rate of tax on earn-ings above £150,000, and bonusrestrictions are driving workers out of the UK.

Matthaeus Den Otter, of the SwissFunds Association, said: “These fig-ures sound very plausible. There has

been a steady influx of skilled work-ers. We estimate that some 20 to 25firms of UK hedge funds have set upoffices in Switzerland over the past

year, and the banks will have sentover some specialised staff as well.”

UK bankers fleeto Switzerlandto avoid taxes

BY JULIAN HARRIS

UK ECONOMY▲

News 3CITYA.M. 18 FEBRUARY 2011

FOUR people have been killed in

Bahrain and 230 injured as the mili-tary took control of the kingdom’scapital, Manama, in a violent crack-down on widespread unrest.

The chaos sent the price of Brentcrude oil to a 28-month high of $104 a

barrel yesterday, while gold also ral-lied.

Following Egyptian protesters’ suc-cessful removal of President HosniMubarak, protesters in Bahrain aredemanding that President Ali

Abdullah Saleh, a US-supported Sunni,

give up power in the Shia-majority state. They are venting fury over Sunnidominance of government positions

and grinding poverty among theisland’s Shia population.

While some Western observers saidthat the protests are a blow to those

who argue that Islam and democracy are incompatible, others are con-cerned that the spread of disordercould help a power-grab by radicalIslamists.

The sectarian nature of Bahrain’sunrest could strike a chord in Saudi

Arabia, the world’s biggest oilexporter.

Bahrain chaos sends oil up Protesters in Bahrain are demanding the president give up power Picture: GETTY

BYKATIE HOPEBANKING▲

BY JULIET SAMUEL

MIDDLE EAST▲

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THE government yesterday appointedfour external members to the board of a new regulator that is meant toreplace the FSA and prevent futurefinancial crashes –the Financial Policy Committee (FPC).

It also released a new consultationpaper on the committee that somesaid showed it had scaled down itsambitions for the regulator and given

it a more limited mandate. The four new members, who joinseven already appointed from theBank of England and FSA, are sup-posed to add an “external” perspectiveto the interim body, which will be incharge of monitoring systemic risk and working out what tools its perma-nent replacement will need.

But there is only one businessmanamong the “external” members:Michael Cohrs. The other three haveall spent much of their careers in

financial regulation and commentary:ex-CBI boss Richard Lambert andDonald Kohn are both former members of central bank boards, while Alastair Clark has advised the Bank of England for over a decade.

Economist Richard Barwell at RBSalso says that the latest document onthe FPC “envisages a more modestobjective for macroprudential policy”than previous proposals. He says thenew mandate could make it difficultfor the FPC to halt future bubbles.

New regulator draws on oldhands for external membersBY JULIET SAMUEL

REGULATION▲


NEW COMMITTEE: THE BASICS

Q.WHAT IS THE FINANCIAL POLICYCOMMITTEE (FPC)?

A. The Financial Policy Committee isone of three bodies the coalition

government is creating to replace theFinancial Services Authority (FSA) andthe tripartite regulatory system. Thenew system will be introduced in2013, when the FPC will sit inside theBank of England, opposite theMonetary Policy Committee. It will bein charge of crafting macro-economicpolicy to prevent another financial

crisis by monitoring systemic risk,including problems to do with mar-ket transparency, illiquidity, conta-gion, information problems andmisaligned incentives.

Q.WHAT OTHER COMMITTEES WILLREPLACE THE FSA?

A. The FSA’s other responsibilities will be divvied up between the

Prudential Regulatory Authority (PRA), to be led by FSA chief executiveHector Sants, and the FinancialConduct Authority. The first will look at the soundness of individual finan-cial institutions, while the latter willplay a policing role in prosecutingmisdeeds and will supervise capitalmarkets and the UK Listing Authority.

Q.WHAT WILL THE INTERIMFINANCIAL POLICY COMMITTEE’S

ROLE BE?

A. The members announced yester-day will join an interim FPC,

which will pave the way for the establish-ment of a permanent version of itself in 2013, whose board will be recruited in the same way as the MPC’s members. As wellas monitoring systemic risk, theinterim FPC will determine whatkind of tools the task requires and will review and approve a new publi-cation required of the Bank of England: a biannual FinancialStability Report.

Q.WHAT ARE THE NEW INTERIM FPCMEMBERS GOING TO DO?

A. They are meant to add an out-sider perspective to an interim

FPC otherwise staffed wholly by reg-ulators. However, only one (MichaelCohrs) has business experience. Theother three are all economists or for-mer regulators.

Q.HOW WILL THE NEW FPC HELP TOPREVENT A NEW CRASH?

A.Many observers are scepticalthat it can actually prevent

another crash. The new model givesa raft of new powers to the Bank of England, whose MPC has a dubiousrecord when it comes to spottingand defusing credit bubbles. In addi-tion, the FPC will be required to takeinto account the impact of its meas-ures on economic growth, which

could effectively prevent it fromhalting excessive credit growth.

Q A&

THE FOUR NEW EXTERNAL MEMBERS OF THE FPC

AS the only new member of thecommittee with extensive businessexperience, Cohrs will add a vitaloutsider perspective to the forma-tion of the new regulatory system.He spent a decade working atGoldman Sachs 1981-1991, after

which he worked at SG Warburgfor four years. He was then co-headof corporate and investment bank-ing at Deutsche Bank until 2010. Healso holds an adjunct professorshipat Beijing University and was amember of the president task foron market mecha-nisms (the“BradyCommission”)that recom-mendedreforms afterthe 1987 stockmarket crash.

MICHAEL COHRS

RICHARD Lambert recentlyretired from five years as directorgeneral of the CBI, representingbusiness interests. Before leadingthe CBI, he was on the Bank of England’s Monetary PolicyCommittee from 2003-2006. In

2003, he wrote a review of busi-ness and university collaborationat then-chancellor GordonBrown’s request. Previously, hehad an extensive career in finan-cial journalism, editing the FT’sLex column, its New York Bureauand, finally, thewhole paper. Heis also atrustee of theBritishMuseum andChancellor of the University of Warwick.

RICHARD LAMBERT

ALASTAIR Clark has been in

financial regulation for over adecade. He was the Bank of England’s executive director forfinancial stability 1997-2003 andthen became an adviser to thegovernment on the City 2003-2007. He left his role at the Bankof England in 2007 but returnedlater that year after being askedby governor Mervyn King to helpdeal with the building crisis. In

2009 he took a roleadvising the

Treasury onfinancial stabil-ity. He is alsoan honorary

visiting profes-sor at the Cass

BusinessSchool inLondon.

A FORMER member of the board

of governors at the FederalReserve, Donald Kohn spent 40years in various roles at the Fed,including helping to craft itsresponse to the financial crisis in2008. During his time at the Fed,where he began his career as aneconomist in 1970, he worked assecretary of the Federal OpenMarket Committee from 1987 to2002, director of its Division of Monetary Affairs 1987-2001 and,before that, asdeputy staff director forMonetary andFinancialPolicy for fouryears. He isalso a senioreconomics fellowat the BrookingsInstitution.

DONALD KOHNALASTAIR CLARK

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INTERNET crime costs the Britisheconomy more than £27bn a yearand appears to be “endemic”, accord-ing to the first government-spon-sored study of online fraud, released yesterday.

Businesses are worst affected, tak-ing an estimated £21bn hit last year,though the government also lost£2.2bn and individuals were rippedoff to the tune of £3.1bn in 2010.

The report said £9.2bn was lostfrom intellectual property theft,£7.6bn from industrial espionage and£2.2bn from extortion, with largecompanies being targeted in particu-lar.

UK citizens lost an estimated£1.8bn through identity theft and£1.4bn in online scams, according toresearch by consultancy Detica, asubsidiary of BAE Systems, on behalf of the Cabinet Office.

“Our estimates are largely illustra-tive because we believe this type of

cyber crime goes largely unreported,”the report said, adding that the realtotal could be higher.

Such crime is highly lucrative, easy to get involved in, plus the relativeanonymity provided by technology lowers the risk of being caught, thestudy said.

The hardest hit sectors are thoughtto be pharmaceuticals and biotech,electronics, IT and chemicals.

Security minister Baroness Neville- Jones said the research “highlightsthe opportunity we have to turn thisto our advantage and get ahead of the curve to drive our economicgrowth and prosperity”.

The government estimated inOctober as part of the strategicdefence review that cyber crime isone of the gravest threats to UK secu-rity, costing the world $1 trillion(£618bn) per year.

Around £650m was devoted totackling online crime in the defencereview, some of which has gonetowards a new Office of CyberSecurity and Information Assurance.

FIGURES released yesterday show that use of the European CentralBank’s overnight lending facility spiked to a twenty-month high at €15.8bn versus a usual amount of below €1bn. The spike prompted fearsthat a Eurozone bank could beencountering trouble as the ECBattempts to withdraw emergency liq-uidity, although some analysts blamed it on a “fat finger” error.

Meanwhile, the yield onPortuguese five-year bonds jumped toan all-time high of 7.13 per cent yes-terday after Cabinet Minister PedroSilva Pereira urged the Eurozone to

reach a solution quickly to avoid fur-ther market turbulence.

EUROZONE CRISIS▲

Cyber crimecosts £27bnBYMARION DAKERS

UK ECONOMY▲

News 5

PRIME Minister David Cameron yester-day promised his new welfare reforms would “make work pay” and simplify the benefits system.

The changes would replace all exist-ing working age benefits with a single“universal credit,” and ensure thatclaimants are always better off whenthey find work, Cameron claimed.

“The benefit system has created a benefit culture,” Cameron said.

“It doesn’t just allow people to actirresponsibly, but often actively encourages them to do so.”

There were 5.7m working age bene-

fit claimants at May 2010, accordingto the Department of Work and

Pensions. New figures were scheduledfor release this week, but have beendelayed by the department.

“Cameron’s plan is well inten-tioned, but I am not confident it willactually work,” commented Patrick Nolan, economist at the think tank Reform.

Merging benefits together may notsimplify the system, Nolan said, par-ticularly when benefit conditionsremain complex. “We are also not con-fident that ‘smart automation’ will work, given experience of existing benefit systems,” he said.

New universal credit willmake work pay: Cameron

UK ECONOMY▲

CITY VIEWS: DOES CYBER CRIME WORRY YOU?Interviews by Marion Dakers

“I have been a victim of online fraud and mybank was quite helpful and refunded it, so it’sclearly widespread. The £27bn figure doesn’tsurprise me, given the scale of online shoppingthese days. It’s only going to increase as moreis done on the internet.”

ADIL KHAN | ERNST & YOUNG

“I’m concerned but I’m not doing anythingdrastic about it; I’ll still do a lot of shoppingonline. Some of my friends have been rippedoff online but I still use it for banking. There isa surprising amount of crime online, but a lotis not due to individuals.”

“I’ve had my credit card cloned before, butit wasn’t over the internet –this sort of thing can happen anywhere. Generallyspeaking, I’m not that concerned, and a lotis being invested in trying to stay ahead of the curve when it comes to fraud.”

NEAL HARTLEY | PERSONAL FX

VINAY SHRIVASTAVA | ARUP

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everyone; if you are unsure you

should seek independent advice.

Shares can fall in value and you

may get back less than you

invested. Overseas

investments may be

affected by currency

fluctuations which

might reduce their

value in sterling.

CREDIT Suisse yesterday sold $2bn(£1.24bn) of contingent convertible bonds (cocos) at a public auction thatsaw strong demand, following itsissuance of €6bn’s worth of the convertible bonds to longstandininvestors.

They were sold with a coupon rateof 7.88 per cent, lower than expectedgiven that the three-year cocos the bank sold earlier in the week had 9-9.5per cent rates.

The rate is particularly surprisinggiven that the cocos issued yesterday are longer-dated, being redeemableafter five and a half years with a finalmaturity date of 2041.

The sale shows that Credit Suisse ismaking an ambitious bid to reachSwiss regulators’ high capital ratiorequirements mostly through the useof cocos, which have not previously been a popular asset class.

More financial institutions have been considering their use since adirective clarifying that they can counttowards Basel III capital requirements.

Credit Suissesells $2bn atcoco auction

ECB overnightlending up to

20-month high

UK FINANCIAL Investments, the gov-ernment body in charge of managingpublic stakes in bailed-out institu-tions, is soon to appoint MorganStanley to advise on the sale of theNorthern Rock “good bank” later this year.

The sale will follow the auction of 318 RBS branches sold to SantanderUK last summer for £1.65bn and islikely to attract a similar set of bid-ders. Those interested are thought toinclude Virgin Money, Tesco Bank,National Bank of Australia and private equity group JC Flowers.

If Morgan Stanley does sign the

deal, according to Sky, it stands toearn £2m in fees.

BANKING▲

Morgan Stanleyto get Northern

Rock UKFI deal

BY JULIET SAMUEL

BANKING▲

8/7/2019 Cityam 2011-02-18book


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When most people consider travelling to Canada, their first question is,“Where to begin?” A likely inquiry, given Canada’s great outdoors and vibrant

urban cities. Below are some truly unique experiences intended to give you

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1 Northern Canada

2 Mountains West

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Banff: A nature-lover’s playground.

Banff & Lake Louise, Alberta

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As we rolled up to the picturesque town of Banff, we realized that a rental car wouldn’t be necessary.

Perched smack bang in the middle of Canada’s 1st National Park and UNESCO World Heritage Site was

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Rich in wildlife, adventure and gold.Tombstone Territorial Park, Yukon


In the Yukon, there is pretty much something for everyone. In the spring and summer there is also pretty

much 24 hours of daylight… every day. It felt absolutely crazy to head to our tent at 11pm with the sun still

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While Montréal is renowned for superb fine dining, it’s also no

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Go under, over or behind the largest fallsNorth America.Niagara Falls, Ontario

If you visit Niagara Falls, the first call of duty is obviously: the fal

So we jumped on the Maid of the Mist – it’s a renowned historic

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cture a vibrant city, in the heart of a rainforest.couver, British Columbia


hen we arrived in Vancouver, we were completely blown away by the mountain vistas and the waterfront

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ay a game of “I Spy” with the whales.tic Canada

0:00 / 1:12

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e started our drive through Atlantic Canada in Newfoundland and Labrador. We planned to hit Nova Scotia,

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8/7/2019 Cityam 2011-02-18book


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FRENCH insurer Axa saw its 2010profits cut by almost a quarter afterlosing €1.64bn (£1.38bn) from the saleof part of its UK life business last year,it said yesterday.

Profit fell 24 per cent to €2.75bnfrom €3.6bn after it sold the majority of its life business to closed-end lifemanager Resolution for £2.75bn last June to better focus its UK work.

But Europe’s second-biggest insur-er said it would raise its dividend 25per cent to €0.69 this year due to a better business environment in 2011.

“2010 was also characterised by sig-nificant strategic moves and organisa-tional changes,” said Axa chief executive Henri de Castries.

Axa’s group revenues were flat at €90.97bn, as were its underlying earn-ings, which rose to €3.88bn from €3.85bn in 2009.

Axa profit downon life sale losses

INSURANCE▲

BNP Paribas chief executive Baudouin Prot said the bankis not on the lookout for acquisitions

Picture: PA


THE world’s second-largest reinsurerSwiss Re reported a lower-than-expect-ed $863m (£536m) net profit yester-day after announcing it had repaid$1.1bn in loans extended by WarrenBuffett in the financial crisis.

Analysts had expected $1.2bn prof-its but the final f igure was still 74 percent higher than in 2009. Chief exec-utive Stefan Lippe said the company had “turned a corner” from its per-formance in the recession, and thatrates for property and casualty insur-ance should rise in 2011. It also raised

its dividend to SwFr 2.75 (£1.80) fromone Swiss franc last year.

BNP PARIBAS fourth-quarter profitsmissed analysts’ expectations yes-terday despite a rise in revenue,after it had to write down the valueof its stake in insurance firm Axa.

The €534m (£348m) Axa charge was put down to stock market volatility, which saw Axa sharesdrop well below their book value.BNP holds a 5.2 per cent stake in theinsurer, which also posted a fall inprofits yesterday (see above).

BNP’s net income was €1.55bn, up13.6 per cent but below a consensusanalyst forecast of €1.73bn. Grouprevenues rose 2.6 per cent in thequarter to €10.3bn, just missingforecasts of €10.5bn.

The bank was upbeat on the con-tinued integration of its businessesfollowing its acquisition of Belgium’s Fortis Bank in 2009.

Synergy targets for the businesses were revised up from €900m to €1.2bn by 2012, as the integrationprovided a boost to BNP’s revenue.

Corporate and investment bank-ing revenues were worst hit, falling6.4 per cent quarter-on-quarter, but

the losses were offset by strong per-formances in equity derivative andcorporate financing.

BNP raised its dividend to €2.1 pershare, from €1.5 in 2009. It alsohiked its cost-savings target forBelgian acquisition Fortis to €1.2bn,from €900m.

Chief executive Baudouin Protsaid the company would not be onthe lookout for any more acquisi-tions in the near future.

“I’ll be very blunt. At themoment, we are not very acquisi-tive. This year we will concentrateon organic growth,” he said.

Shares in BNP Paribas closeddown 0.34 per cent at €58.77, havingfallen to €57.82 in earlier trading.

Profits at BNP

hit by one-off writedown

FORMER JP Morgan banker Bill Winters is teaming up with Lord Jacob Rothschild.

Winters is setting up the venture,to be called Renshaw Bay, withRothschild’s London-listed RIT Capital and Reinet Investments,chaired by entrepreneur JohannRupert.

The banker, who also sits on thegovernment’s independent commis-sion on banking panel, will initially own 50 per cent of the Renshaw Bay business, with the balance owned by

RIT and Reinet, the Luxembourg-list-ed investment vehicle.

Winters sets upwith RothschildSwiss Re repaysBuffett’s $1.1bn

BY ELIZABETH FOURNIER

BANKING▲

INSURANCE▲

ASSET MANAGEMENT▲

ANALYSIS l BNP Paribas

50

46

54

58 €

27 Dec7 Dec 14 Jan 3 Feb

58.7717 Feb

8/7/2019 Cityam 2011-02-18book


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VN\QHZVFRP

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%HOLHYHLQEHWWHU

HIGH-flying banker Naguib Kheraj yesterday walked away from his chief executive role at Lazard after just six weeks in the post.

Kheraj, a former JPMorganCazenove chief executive and Barclaysfinance director, resigned as chief executive of Lazard International tofocus on philanthropic work.

His departure surprised many inthe City as much as his appointmentlast October into a post effectively cre-ated for him in the global deals wingof the investment bank.

His appointment was seen as a sig-nificant coup for Lazard.

Both Kheraj and Lazard said thedecision was amicable. Kheraj said: “Iam very sad to be leaving Lazard, and

have not taken this decision lightly.”“I underestimated the difficulty of managing my external activities in a

way that would enable me to be prop-erly engaged in an executive role andhave realised that it is not possible tofulfil my responsibilities to Lazard tothe best of my ability whilst main-taining my personal commitments.”

A Lazard spokesman said: “He wasa friend of the firm before he joinedand will continue to be a friend. We wish him well.”

But former colleagues told City A.M.his appointment may have beenunwelcome within Lazard and hemay have expected a warmer wel-come due to his close links withBarclays, a major client of Lazard’s.

“Naguib is a protégé of BobDiamond at Barclays, and his appoint-ment may have been a favour to the bank,” one said. “That may have putnoses out of joint.”

Kheraj, who stepped down from

Cazenove last March, is now likely to be among candidates for top City posts that arise in the future.

Naguib Kherajleaves LazardBYALISON LOCK

BANKING▲

WEALTH manager Rathbone Brothersnetted £1.24bn in inflows last year totake funds under management over£15bn for the first time, it said yester-day.

Total funds jumped by almost afifth to £2.53bn while underlyingprofit before tax rose 18.8 per cent to

£38.5m in 2009.But a £3.6m Financial Services

Compensation Scheme levy to coverclaims against failed investmentschemes overshadowed the results,cutting final pre-tax profit to £30.1m, just two per cent up on 2009.

Chief executive Andy Pomfret toldCity A.M. he would pay the fee but reg-ulators should do more to prevent fail-ures. He said: “It doesn’t seem very fairthat another business goes horribly

wrong and we have to pick up the bill.It has been handled badly, frankly.”

Rathbone Brothers’ bumperresults hurt by £3.6m FSCS levy

ASSET MANAGEMENT▲

DANISH outsourcer ISS, one of Britain’slargest providers of public sector servic-es, said yesterday it expected to raise$2.4bn (£1.5bn) with an initial publicoffering (IPO).

The firm, which counts hospitalcatering staff and cleaners amongstthe 41,000 people it employs in Britain,is considering a Copenhagen listing in

one of the biggest stock market offer-ings in Europe so far this year.ISS will use the proceeds to pay

down debt and to develop a growthstrategy. Part owned by Goldman SachsCapital Partners and EQT, the privateequity vehicle operated by Sweden’s Wallenberg family, the firm had beenslated for an $8.5bn sale to Apax part-ners, the London-based private equity house.

However, its owners have instead

pursued an IPO on Copenhagen’sNasdaq OMX exchange, with the firm’sshare price range to be revealed nextmonth. ISS yesterday revealed anincrease in revenue to £8.4bn over last year, with operating profits o£462.4m.

Chief executive Jeff Gravenhorstsaid: “We look forward to offeringpotential new shareholders in ISS theopportunity to be part of our growthand development going forward.”

Danish provider of UK publicservices plots £1.5bn listingBYRICHARD PARTINGTON

PUBLIC SECTOR▲

News 9CITYA.M. 18 FEBRUARY 2011

Naguib Kheraj has left the top spot at Lazard after just six weeks

8/7/2019 Cityam 2011-02-18book


The Capitalist10

IT’S A NEWCHANNEL,

BUT NOT ASWE KNOW IT WITH viewers of Virgin Media unable to watch Sky’s new flagship channel Sky Atlantic because of a failure of the twogroups to agree on price, chief executiveNeil Berkett and his team were keen todownplay its attractions yesterday.

Berkett described the channel as “com-pletely unproven” while a colleaguesomewhat contemptuously chipped in tosay its schedule contained a good few Star Trek shows as well as the newer block- busters.

The Capitalist was curious. All the Sky ads highlight new shows such asBoardwalk Empire or the new series of Mad Men featuring Donald Draper (pic-

tured bottom right), with not a sniff of Star Trek Voyager in sight. Even Sky’spress office tried to put us off the case,initially denying a Star Trek presence.

But a look at the schedules, helpfully provided by a rather apologetic Sky pressoffice, shows Star Trek showing threetimes a day, seven days a week – at sevenin the morning, 12 o’clock and five in theafternoon.

And with the Voyager’s journey homefrom 1 Delta Quadrant set to take around75 years, Sky may well be able to furnish

A CITY EXODUS? The administrators of London websiteescapethecity.org made an interestingdiscovery last week. Analytics for the site – which helps City executives find excit-ing opportunities outside the SquareMile – have revealed which company intranet was registering the most hits onits site. And apparently accountants working in the City are the least fulfilled by their jobs, with the Big Four firms,PricewaterhouseCoopers, KMPG, Deloitteand Ernst & Young taking the one to four

spots in the top 10.Of the remaining six places, five were

taken by banks, with just one law firmfilling in the blank – the Magic Circle’s Allen & Overy.

But firms needn’t worry that theirhigh-fliers are deserting them forcompetitors. Testimonials from sat-isfied customers show they’veended up in Nepal, the Gobi desert,and even the wilds of Hammersmith – working forInnocent Smoothies.

its daytime schedule with furtherepisodes for years to come.

AUTOGRAPH HUNTING With all the interest in the new finan-cial watchdog team revealed yesterday,one rather important move has beenrather overlooked.

After six years in the role, the Bank of England’s chief cashier, Andrew Bailey,is moving to the Financial Services Authority to become deputy head of itsprudential business unit.

If you’re thinking so what, then open your wallet, dig out a bank note andlook very carefully at the signatureprinted on it – Bailey has been the man

faithfully promising to “pay the beareron demand the sum of...” since 2004.

Stepping into the role as of 1 April will be Chris Salmon, who has beenhead of the sterling markets division

since 2009. Though The Capitalist was desperate

to bring you a preview of the brandnew seal, the Bank of England pressoffice had to decline – though goodnessknows what it thought we mightattempt to do with it.

But those concerned about thechange needn’t worry – TheCapitalist has been assured thatMr Salmon is busy practising anartistic scrawl in preparation forhis crucial new role.

Sky Atlantic: hoping to live long and prosper by showing Star Trek Voyager every day

Mr Salmon isbusy practis-ing an artisticscrawl inpreparationfor his crucialnew role sign-ing banknotesfor the BoE

EDITED BY

ELIZABETH FOURNIERGOT A STORY? [email protected]

CITYA.M. 18 FEBRUARY 2011

8/7/2019 Cityam 2011-02-18book


TELECOMS group Cable & Wireless Worldwide (CWW) said contract winsfrom UK businesses and the govern-ment were keeping it on track for the

year. The company, which focuses on

large enterprise customers, said yes-terday it was continuing to makeprogress in the second half of itsfinancial year. CWW was one of anumber of IT and communicationssuppliers asked to make savings incontracts with the UK governmentlast year. It signed a £10m deal with

the Department for InternationalDevelopment in November.

MOBILE World Congress (MWC), the world’s biggest mobile phone show,ended yesterday. Here City A.M., looksat the biggest trends to emerge fromthe show and looks at how they couldaffect your life over the next year.

THE SHADOW OF NOKIA/MICROSOFT THE bombshell dropped by Nokia the weekend before MWC kicked off, when the Finnish firm said it wouldeffectively kill its in-house operatingsystem and adopt Windows Phone 7overshadowed everything else. It wasa piece of PR brilliance stealing theshow before the congress had evenstarted. Other industry bosses spentthe show batting away questionsabout the deal, much to their

bemusement. Whether the tie-up will work is another issue altogether.Shareholders think not.

MOVE FROM MANUFACTURER WAR TOHANDSET WAR

The goalposts have shifted from acompetition to see who can make the

best handsets to the platform they run on. Google’s Android is streakingahead, overtaking Nokia as the

biggest smartphone operating systemin 2010. Microsoft boss Steve Ballmerused his keynote to evangelise aboutthe new platform war, while the ubiq-uitous Stephen Elop said Nokia wantsto push through a “third ecosystem”to compete with the big two players.“Ecosystem” was the buzzword –shorthand for allowing third-party developers to create software to grow

your platform, while charging themfor the privilege.

PAYMENT PLATFORMS While publishers have been providingcontent on the internet for well over adecade, most are only just waking up

to the prospect of asking people topay for it. This was the year the

world’s biggest technology firms began to properly facilitate this. Firstcame an announcement from Applethat it will provide an ongoing sub-scription service through its iTunesplatform. The catch: Steve Jobs wantsa 30 per cent cut. Then Google camealong with its One Pass service, which

will only take 10 per cent of subscrip-tion revenue.

NEAR FIELD COMMUNICATIONNear Field Communication is the lat-est bandwagon. The technology allows nearby devices to securely exchange information, using analmost unbreakable 80-digit encryp-tion code. This means it could soonreplace credit cards as your primary payment method. Orange announcedit will be partnering with Samsung toroll out contactless systems through-out Europe, while Visa has been tri-alling a similar system.

MOBILE HEALTH With an ageing and increasingly tech-nology savvy population, mobiledevices are being used as a way of keeping people’s health in check. Thisis also providing new revenue streamsfor a host of UK firms, taking advan-tage of the government’s desire to easethe burden on the public purse. Onefirm in the US has developed a smart-phone ultrasound system that can beused on maternity wards and cardiactreatment facilities. Others are devel-oping ways to quickly transfer patientsmedical files and symptom details.

The five tech

trends set tochange yourworld in 2011

CAPGEMINI, Europe’s largest comput-er consultancy, yesterday beat earn-ings forecasts and reportedaccelerating growth in the fourthquarter.

The French company said its operat-ing margin rose to 7.5 per cent in thesecond half of 2010, from 5.8 per centin the first half of the year. For 2011,Capgemini predicted revenues wouldgrow 9-10 per cent and that it wouldadd 0.5 to 1.0 percentage points to itsoperating margin. Capgemini posted anet 2010 profit of €280m up 57 per

cent, and said it would recommend a25 per cent dividend hike to €1 a share.

Capgemini seesprofits surgeCWW contractwins reassureTELECOMS

▲TECHNOLOGY

▲

Mobile World Congress 11CITYA.M. 18 FEBRUARY 2011

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

BY STEVE DINNEEN IN BARCELONA

MOBILEWORLDCONGRESS

2 0 1 1

Google’s Eric Schmidt’s One Pass (topleft) and Nokia’s Stephen Elop’s dealwith Microsoft (bottom left) were thetalk of the MWC conference (main picture)

8/7/2019 Cityam 2011-02-18book


LADBROKES y esterday reported a 20per cent jump in annual profit asonline gaming helped it overcome aseven per cent fall in bets staked at itsshop counters.

In its digital operation the UK’slargest betting firm saw profit rise by 36 per cent to £62.7m.

Revenues from online sports bet-

ting grew 16.9 per cent to £65.1m.Horseracing margins worseneddue to the introduction of an oddsguarantee promotion in August andrelatively poor results in some of thesignificant racing festivals of the year,including the Grand National andRoyal Ascot.

Chief executive Richard Glynn, who has overseen a strategic review of

the business since taking the reinslast year, said the group was in goodshape.

Having extended its in-play offer-ing and launched new mobile phoneapps, Glynn said the company expect-ed to invest an additional £50m dur-ing 2011 and 2012 in order to furtherimprove its technology.

He added: “We have laid solid foun-dations in 2010 upon which to build. We have set out our strategic goals

and we have a clear set of prioritieson w hich to focus.” The company said it was planning

to expand its highly successful in-game betting operation.

Ladbrokes opened 40 stores in the year and carried out refurbishmentson 130. Mobile phone transactionsnow account for 15 per cent of all dig-ital sales.

Ladbrokes in

lift as onlinegames boom

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Now with a films and games package worth over £50, Mobile Choice’s BestMedia Phone of the Year just got even better. samsung.com/uk/galaxys

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Screen images are simulated. Terms and conditions apply.See samsung.com/uk/galaxys for details © 2011 Samsung Electronics Co.Ltd. Google and Android are trademarks of Google,Inc. Inception © 2011 Warner Bros.

Entertainment Inc.and Legendary Pictures.All Rights Reserved Inc.The Town © 2011 Warner Bros.Entertainment.All Rights Reserved.© 2011 Gameloft.All rights reserved. Gameloft,the Gameloft logo and N.O.V.A.Near Orbit Vanguard Alliance are trademarks of Gameloft in the U.S. and/or other countries.*Winner of the Mobile Choice Award for Best Media Phone.

Our brightest screen. Our most colourful images.

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T h e T o w n a v a i l a b l e n o w

f r o m

s a m s u n g m

o v i e s . c o m

I n c e p t i o n a v

a i l a b l e n o w f r o m s a

m s u n g m o v

i e s. c o m

BYHARRY BANKS

LEISURE▲

FRENCH luxury and retail group PPR posted a forecast-beating currentoperating profit for 2010, boosted by arecovery in the luxury market andsolid growth at its Puma sportswear

brand. The owner of fashion brands

Balenciaga and Gucci and retailerFnac posted a full-year current operat-ing profit of €1.53bn (£1.28bn) –

above expectations of €1.487bn basedon an analysts’ poll.It proposed a dividend of €3.5 a

share, marking a 6.1 per cent increaseagainst the previous year.

PPR did not give a precise target for2011 aside from improving sales andprofits against the previous year.

In the fourth quarter alone, thegroup’s luxury division Gucci Groupenjoyed the strongest growth with a14.4 per cent rise in comparable sales,driven mainly by smaller brands than

Gucci such as Bottega Veneta, YvesSaint Laurent and Balenciaga.Gucci Group’s fourth-quarter per-

formance compared with growth of 16.7 per cent in the third quarter.

“The slowdown in the fourth quar-ter is smaller than expected in theluxury division,” said Natixis analystBoris Bourdet. “Overall, [PPR’s resultsare] are better than expected.” PPR’sPuma also saw sales rises 10.6 percent in 2010, with a net profit jumpof 154 per cent.

PPR beats forecasts as Gucciand Yves Saint Lauren shine

BYHARRY BANKSRETAIL▲

Consumer News12 CITYA.M. 18 FEBRUARY 2011

ANALYSIS l Ladbrokes

125

135

145p

4 Jan10 Dec22 Nov 24 Jan 11 Feb

139.5017 Feb

0.3%sales decline at B&Qin the 13 weeks to

29 January

20%Kingfisher

estimated rise inannual profit

£672mestimated annual

pre-tax profit

840total number of

Kingfisher storesacross the globe

Source: Kingfisher

8/7/2019 Cityam 2011-02-18book


B&Q owner Kingfisher yesterday fore-cast a 20 per cent rise in annual profitsafter strong overseas growth offset

weak trading in the UK. The group said it expects adjusted

pre-tax profits for the year ending lastmonth to be at the top end of City expectations at £672m.

Strong sales in countries such asPoland and Russia helped the compa-ny which owns the Bric Depot andCastorama chains. The UK and Irelanddivision remained under pressure,despite like-for-like sales at B&Q show-ing a decline of 0.3 per cent in the 13

weeks to 29 January. That was betterthan the 5.1 per cent drop seen in the

previous quarter. Total sales in UK stores were up 0.1 per cent to £835m.

Its building supplies arm Screwfixalso put in a stronger performance,

with sales up 5.4 per cent to £119mafter it introduced new ranges.

Chief executive Ian Cheshire wascautious about B&Q’s outlook for thecurrent financial year following theincrease in VAT to 20 per cent from17.5 per cent in January.

He said: “We are not assuming any help from a buoyant market in the UK.It’s more about trying to gain marketshare than expecting the market to bein recovery.” But the boss was upbeatabout the possibility of a sales boostinspired by the royal wedding bank holiday. People could actually do a real-ly decent project over that period.

We’re certainly going to gear up on thegardening and outdoor leisure fronts.”

He said the group had just launcheda set of two royal wedding gnomesdecked in Union Jack hats and wed-ding outfits for £20. Kingfisher, withover 840 stores in eight countries, has

been cutting costs to cope with toughtrading conditions.

Kingfisher inprofit boostBY JOHN DUNNE

RETAIL▲

SPORTS Direct said yesterday it wouldmeet its target for full-year profit, withtrading still strong after a positivethird quarter.

The firm, controlled by NewcastleUnited owner Mike Ashley, said totalsales for the 13 weeks to 23 January increased 12.1 per cent to £416m.

“Since the end of January, thegroup’s underlying performance hascontinued to be strong, especially with-in the UK retail division,” chief execu-tive Dave Forsey said.

“Therefore we shall reach our full- year targeted underlying earnings before tax, interest, depreciation and

amortisation [EBITDA] of £205m beforethe charge for the bonus share

scheme.”Hitting profit targets will trigger an

estimated £10.8m pay-out for staff through its bonus scheme,

Under the scheme some 2,000 of itsstaff will receive up to 75 per cent of their salary paid in shares, if the groupmeets its target for the year to April.

Shares were up almost five per centafter the announcement in which thecompany, also revealed that gross prof-its rose eight per cent to £167m in thequarter.

Matthew McEachran, an analyst atSinger Capital Markets, said: “The thirdquarter statement has come in wellahead of forecast, driven mainly by UK retail sales growth.

He added: “This is despite the very

tough prevailing conditions.” The stock closed 4.3 per cent up at 166p.

BY JOHN DUNNE

RETAIL▲

Sports Direct sees

sales forge ahead

FRENCH spirits manufacturer PernodRicard yesterday announced a strongrise in half-year profits for 2010 driv-en by growth in the expandingChinese market.

The firm reported half-year netprofits of €666m (£560m) up from €604m the year before.

Asian growth overall was particu-larly strong with sales up 29 per cent.

Pernod said a gradual recovery inNorth American and westernEuropean markets had also helped

boost sales. The group reported sales of

€4.282bn, compared to €3.789bn inthe first half of 2009.

Pernod-Ricard’s brands include Absolut, Martell, Jameson, ChivasRegal and Perrier-Jouet.

The firm said it had increased itsmarketing spend over the period.

Pernod fuelled by rise in demandfrom Chinese spirit drinkersCONSUMER

▲

Consumer News 13CITYA.M. 18 FEBRUARY 2011

ANALYST VIEWS: IS KINGFISHER’S RECOVERYSUSTAINABLE ? Interviews by John Dunne

“

PHILIP DORGAN | ALTIUM SECURITIES

Kingfisher could, over the long term, double its business in Poland andSpain, treble in Turkey and quadruple in Russia, with China moving towards prof-itability. It also has potential to improve profits further in the UK. All of this shoulddrive decent earnings growth, cash generation and higher returns.

”“

KEITH BOWMAN | HARGREAVES LANDSDOWN

Management self help initiatives and the group’s geographical diversifi-cation continue to shield Kingfisher from the worst of the current economic diffi-culties. Buoyant sales in countries such as Russia and Poland have helped offsetmore challenging conditions in the UK. In all management continues tochurn out a progressive performance.

”

“

NICK BUBB | ARDEN

The flat sales at B&Q are slightly disappointing, given the weak com-parisons from the snow last January, which isn’t mentioned in the statement, fun-nily enough, but Poland did well. With the final results on 24 March to set out newlong-term growth targets for the group, there is still much to like aboutKingfisher.

”NEWS | IN BRIEF

Middle East shoppers boost UKYoung tourists from the Middle East areflocking to the UK to buy designer goods,a retail survey said today. Sales to MiddleEastern customers were up 19 per centin 2010 compared with the previousyear, spending an average of £1,000 onshopping on each trip. The shoppers tendto come for a mini break.

London is world’s shopping capitalLondon beat Tokyo, New York and Paristo be the highest grossing city for retailsales in 2010, according to a study of 22major worldwide shopping destinationsby Britain’s Centre for Retail Research.The study, commissioned by comparisonwebsite Kelkoo, found London generated£64.2bn of non-food retail sales last year.

ANALYSIS l Kingfisher

245

235

255

265

275 p


256.5017 Feb

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CABLE-to-entertainment group VirginMedia yesterday reported quarterly revenue figures of £1bn, up from£941.3m a year ago, predicting stronggrowth from its business services divi-sion in the year ahead.

Virgin chief executive Neil Berkettsaid the order book for business dataservices was up 40 per cent from a

year ago and he said that growth inthis area would be faster than theconsumer area.

In the consumer space the groupsaid it attracted 17,100 net new cablecustomers in the fourth quarter end-ing December 31 and that cable aver-age revenue per user rose 4.9 per centto £47.51 in the fourth quarter from£45.28 a year earlier. Its total numberof cable homes stands at 4.8m, still

well down on that of its main com-petitor BSkyB.

Sanford Bernstein said in aresearch note it sees “significantopportunity in coming years” for thegroup. The broker has an ‘outper-form’ rating and target price of 2,500p on the stock. The stock hasrisen 79 per cent over the past 12months.

Although Berkett described Virgin’srelationship with BSkyB as “as good asit ever has been” there are still ten-sions, not least over the launch of Sky’s prized new US import channelSky Atlantic.

Virgin is not showing the channel,tempting some of its customers toswitch to Sky. Berkett said that he hadnot been able to agree a price with hisrival for “a single channel which iscompletely unproven.”

Berkett said his offering had its ownadvantages, such as video on demandand faster broadband speeds. He alsosaid that Virgin had reduced its pricesfor Sky Sports following a regulatory ruling last summer but it had notpassed all the savings on to its cus-tomers, choosing to boost its margins.

DEFENCE company BAE Systems said yesterday government spending cutsin the UK and the US are forcing it todo more deals with other countriesincluding Saudi Arabia to stop its rev-enues tumbling.

BAE warned in its full-year results yesterday that 2011 sales will be lowerthan last year, with US contracts

worth £1.6bn coming to an end.“The group seeks to… develop new

business in support of all Saudi mili-tary and paramilitary forces” as wellas throughout India and Australia,BAE said in a statement.

The FTSE 100 company said cost sav-ings following the UK’s strategicdefence review will cost BAE 1p pershare per year.

BAE’s pre-tax profit for 2010 was£1.49bn, compared to a £61m loss in2009, on revenues up 1.8 per cent to£22.4bn.

The 2009 losses mostly stemmedfrom £1bn-worth of impairment

charges after the US Army cancelled atrucks contract, and a £278m chargeto settle a long-running fraud investi-gation in the UK and the US.

BAE said discussions were stillongoing with US authorities on “con-cerns regarding matters arising fromthe settlement,” but refused to givefurther details.

Chief executive Ian King said thefirm welcomed the UK Bribery Act,“which in many ways reflects the new

procedures we already have in place”.BAE’s shares fell 4.2 per cent.

BAE Systems hopes global sales willreplace UK government defence cuts

EASYJET shareholders, led by founderSir Stelios Haji-Ioannou, gave the

budget airline a bloody nose yester-day after withholding approval forlast year’s board pay.

Sir Stelios had called for investorsto vote down the 2010 pay package,

which gave former chief executive Andy Harrison a £1m lump sum ontop of his salary even though he leftthe firm in July.

Shareholder body PIRC advisedinvestors to oppose the pay report

because of Harrison’s award and “the

excessiveness of the maximumpotential awards,” and the voteagainst the measures passed by morethan 10m votes at the firm’s AGM

yesterday.

“This morning’s result proves beyond doubt that I am not the only shareholder who feels that Andrew Harrison’s compensation package

was undeserved and completely unjustified,” said Sir Stelios, who hasa 26 per cent stake in the company

but left the board for a second timelast May in a dispute over strategy.

It is thought that the firm cannotrecall the payments, which were paidout to directors over a year ago.

EasyJet said earlier in February that the remuneration vote was anadvisory, non-binding resolutionand therefore could not be defeatedeven if a majority of shareholders

vote against it.Chairman Sir Michael Rake toldshareholders at the meeting that thepay deals “were a one off and agreedin unusual and difficult circum-stances”, referring to the departureof chairman and chief financial offer

within weeks of each other in early 2009.

EasyJet’s shares closed down 1.6per cent at 377p, against an overallrise in the FTSE 250 index.

EasyJet victory for Sir SteliosBYMARION DAKERS

TRANSPORT▲

Virgin looks

to businessesfor growthBYDAVID HELLIER

MEDIA▲

BYMARION DAKERS

DEFENCE▲


Now is the time to buy shares cheaplyif you share the glass half-full viewSHAREHOLDERS took the glass half-empty view when interpretingBAE’s results, sending its sharesdown 4.2 per cent to 340.9p makingit the FTSE’s largest faller yesterday.

BAE’s caution – warning sales would be lower this year as defencecuts in the UK and US hit home –gave jittery investors an excuse to sell.

But there are at least three rea-sons to see BAE’s glass as half-full.Firstly, while sales are down, mar-gins are up on cost reductions andimproving efficiency boding wellgoing forward. Secondly, BAE’s pre-

tax profit for 2010 was £1.49bn,

compared to a £61m loss in 2009 –actually better than consensusexpectations. Thirdly, its net debt isa mere £242m compared to the£1bn BAE originally guided to giv-ing it ample scope to do buybacksor earnings accretive acquisitions.

With the shares trading on underten times its earnings and yieldingfive per cent, now could be a goodtime to pick up the shares evencheaper.

BOTTOMLINEAnalysis by Katie Hope

ANALYSIS l Virgin Media Inc.

1,500

1,600

1,700

1,800 p


1,745.0017 Feb

GOOGLE is set to move intoDublin’s tallest commercial build-ing after buying the tower fromthe Irish “bad bank”, the National

Asset Management Agency (NAMA), for €99.9m (£84.1m).

The 15-storey Montevetro devel-opment was completed in

January, and is down the roadfrom Google’s existing Irish officeon Barrow Street.

Real Estate Opportunities, which built the tower, arranged aloan from NAMA to help completethe project after running out of cash.

NAMA also took on loans backed by the property during the

credit crisis, but said yesterday it is

set to claw back more than theamount it paid for the assets.

“The successful completion of the Montevetro development andits sale again reflect the positivepotential of Nama to support thecommercial property market inIreland without compromising itsobjective of recovering moniesowed to the taxpayer,” said Namachairman Frank Daly.

Google said it will use the build-ing to rehouse some of its Irishemployees, who have outgrownthe existing Barrow Street office.“Acquiring Montevetro also means

we have the space and flexibility to support our future operations,”said Google’s head of Ireland, JohnHerlihy.

BYMARION DAKERS

PROPERTY▲

310m

60m

Dublin rent:£29 / sq ft

Dublin’s tallest building (nearright) is less than one fifth theheight of London’s Shard sky-scraper (far right) and com-mands a rental value of less thanhalf its London peer. The Shard,already the tallest building in theUK, will be the equivalent of 87storeys tall once construction isfinished in May 2012.

to rent:

£70 / sq ft

NEWS | IN BRIEF

Redrow beats crash concernsHousebuilder Redrow defied worries of ahouse price crash yesterday by returningto profit, boasting to the market that itsshift towards traditional family homeshas paid off. The FTSE 250 firm posteda £8.5m pre-tax profit for the last sixmonths of 2010, compared to a £8.7m

loss last year, with a 15 per cent rise inrevenue to £216.1m. However, econo-mists are predicting another tough yearfor the housebuilders with mutedgrowth at best.

Barrick rises on soaring pricesBarrick Gold reported a stronger-than-expected quarterly profit yester-day as increased sales volumes andrecord-high gold and copper pricesoffset higher production costs.

Excluding one-time items, earningsrose to $947m, or 95 cents a share,from $604m, or 61 cents. Quarterlyrevenue for the Canadian miner alsocame in much higher than expected,rising 25 per cent to $2.95bn, largelydriven by a 22 per cent increase inthe average realised gold price.

Advertisers slam Lords’ proposalUK advertisers and broadcastersincluding BSkyB, Discovery and MTV

yesterday railed against proposals bya Lords committee to cut back on TVadvertising, arguing that programmeinvestment will come under threat asa result of a drop in ad revenue levels.The Lords communications committeealso tabled a proposal yesterday thatITV should be freed from currentrestrictions on what it can charge foradvertising airtime, in return for apromise to spend up to £55m moreon UK-originated output.

Google buys Dublin tower

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OVERSEAS demand for British factory goods shot up this month at its high-est rate since July 1995, theConfederation of British Industry (CBI) said yesterday.

However, the CBI’s monthly trendsenquiry also became the latest busi-ness survey to expose spiralling pricepressures in the UK.

The balance of manufacturersexpecting price hikes for their domes-tic customers reached its “third high-est monthly reading of the last 20

years,” according to Michael Saundersof Citigroup.

“And this is the highest February reading for price expectations since1989,” Saunders said.

The survey, which asks manufac-turers how their prices will change inthe coming three months, has been astrong guide to future inflationtrends, Saunders argued.

“The message from this survey, andother lead guides, is that the UK facesan extended inflation overshoot,” he

warned. The expected upturn in factory

prices is “due to manufacturers look-ing to protect their margins as their

input costs rise strongly,” said Howard Archer of IHS Global Insight.

However, the survey provides reas-surance that manufacturing, the UK’s“star performer,” remains “in goodshape,” Archer added.

Factories’ total order books bounced back from a disappointingscore last month. While eight percent more respondents say order

books are below normal than abovenormal, this is a significant improve-ment on January’s score of -16 percent, and above the long term averageof -18 per cent.

The recovery prompted optimismamong manufacturers, with a bal-ance of 23 per cent predicting anincrease in output over the next threemonths – the strongest anticipatedgrowth since June 2007.

“With expectations for outputgrowth at their strongest since beforethe recession, the recovery in themanufacturing sector remains wellon track,” said Ian McCafferty, chief economist at the CBI. “The sectorshould continue to make an impor-tant contribution to broader econom-ic growth,” McCafferty said.

“Exports are benefiting from thelow pound and strengthening globalgrowth,” Saunders added.

THE NUMBER of completed new homes in England has plummeted toits lowest level during peacetimesince 1923, the Department of Communities and Local Governmentsaid yesterday.

New housing completions totalled just 102,570 last year, down 13 percent on 2009.

“Today’s figures reveal the extentof the housing crisis and we need

real action now to prevent the crisisdeepening,” said Stewart Baseley,executive chairman of the HomeBuilders Federation.

“The problem is that we have aplanning system in the midst of rad-ical change, expensive and unneces-sary red tape and a shortage of mortgage availability.”

New starts of house constructionin England also fell in the threemonths to December, compared to

the third quarter of the year.Seasonally adjusted house build-

ing starts stood at just 23,000 in thefinal quarter of 2010 – 11 per centlower than the previous quarter.

London and the south east wereamong the only four regions in

which housing starts were lower inthe December quarter 2010 than atthe same time in 2009.

Last week the Institute of Directors called for a relaxation of restrictions on building on the green

belt, while OECD economists have

argued that the UK should “reassessits land use policies.”

Number of new homes in England fallsto lowest peacetime level since 1923

AMERICA’S recovery was boosted yes-terday, with several data releases

boding well for the world’s largesteconomy.

However, the Federal Reserve facesmore criticism after core inflationrose at its highest rate for over a year.

Consumer price inflation for January came in higher than expect-ed, at 0.4 per cent month-on-month.Core prices – excluding food andenergy costs -- increased by 0.2 percent – the largest gain since October2009.

The index rose 0.1 per cent inDecember.

Meanwhile, the US leading indica-tors – which gauge the economicoutlook – rose for the seventhstraight month in January, increas-ing by 0.1 per cent on the previousmonth.

“The three month annualised rateremained high at 8.2 per cent, anencouraging sign that overallgrowth is indeed set to be stronger in2011,” said Nicholas Tenev of BarclaysCapital.

Signs of economic strengthening were also reflected in thPhiladelphia Fed manufacturingindex which jumped to 35.9 inFebruary from 19.3 in January, wellabove expectations.

The employment part of the indexrose to a 37 year high of 23.6, from aprevious level of 17.6.

Core pricepressures

grow for USUS ECONOMY

▲

CONSUMER confidence across theEurozone rose this month, an offi-cial “flash” estimate revealed yester-day.

After falling to a five month low in January of -11.2, morale on the singlecurrency area’s high streetsrebounded to -9.9.

Confidence has closed in onNovember’s 35 month high of -9.4,and is above the long term average of -12.5.

Sentiment was weaker across theEuropean Union as a whole, yet rose

to -12.4 from an upwardly revised -12.6 in January.“While details are not yet avail-

able, the likelihood is that sentiment was supported by some recent betternews on the jobs front,” speculatedHoward Archer of IHS Global Insight.

Meanwhile, the Eurozone’s tradedeficit soared to €13.3bn inDecember, from €10.5bn the previ-ous month – the widest currentaccount gap since November 2008.

Europe sees rebound inhigh street confidence

EUROZONE ECONOMY▲MEMBERS of the Organisation for

Economic Co-operation and

Development (OECD) experienced aslowdown in growth in the final threemonths of 2010, it said yesterday.

Economies in the OECD grew onaverage by 0.4 per cent in the fourthquarter, down from 0.6 per cent in thethree months to September.

The unwinding of Japan’s stimuluspackage was partly blamed for its GDPcontraction, while severe winter condi-tions in Europe were cited for disap-pointing figures in several countries.

Across the European Union, growthfell to 0.2 per cent, down from 0.5 percent the previous quarter, the OECDsaid.

Despite a slowdown in German

growth at the end of the year – at 0.4per cent – the Eurozone powerhousestill had the highest annualisedincrease in GDP from the “majorseven” OECD economies.

Annualised German growth in thefourth quarter was four per cent, theOECD said. Italy had the lowest growthof the “major seven,” at 1.3 per cent.

The figures show continued growthin the world economy despite some

weather-related effects, according to

Neil Prothero of the EconomistIntelligence Unit. Yet this does notmask stubborn problems across theOECD, he warned.

“The fiscal outlook in the US

remains dire and employmentprospects across the OECD are weak,”Prothero said.

OECD economies stagger onBY JULIAN HARRIS

WORLD ECONOMY▲

Inflation risk

dents 15-yearfactory highBY JULIAN HARRIS

UK ECONOMY▲

BY JULIAN HARRIS

PROPERTY▲

● Japan’s economy shrank by 0.3 per cent inthe fourth quarter of 2010.● In the US growth accelerated to 0.8 per cent.● In the Eurozone the economy experiencedsluggish growth of 0.3 per cent.

FAST FACTS | GDP ACROSS THE OECD

Economics 15CITYA.M. 18 FEBRUARY 2011

REVERSE QE2, SAYS FED’S RICHARD FISHER

AS THE American economy improves, the Federal Reserve should consider reversing itscontroversial asset purchasing scheme (QE2), senior Fed official Richard Fisher said yesterday. When the time comes to tighten policy, “one could make an argument that the most logical thing to do is to undo what you did last,” he told Bloomberg News. Yesterday Feddissident Thomas Hoenig also renewed his complaints over QE2. Picture: REUTERS

NEWS | IN BRIEF

Jobless claims in US rise againUnemployment claims in the US rosemore than expected last week, officialfigures revealed yesterday. Initial claimsfor state unemployment benefitsincreased 25,000 to a seasonally adjust-ed 410,000, the Labor Department said,partially reversing the prior weeks heftydecline. “We see this move as a contin-ued unwind of the weather-related dis-tortions to the previous weeks of claimsdata,” said Michael Gapen of BarclaysCapital. “The large drop-off in claimslast week was due in part to theunwinding of the weather effects thatcaused a surge in claims at the end of January,” he explained. The number of people receiving benefits under regular

state programmes after an initial weekof aid edged up 1,000 to 3.91m.

Norwegian growth disappointsNorway’s mainland GDP grew by 0.3 percent in the final three months of 2010, itwas revealed yesterday. The resultswere considerably below the forecastsof economists, yet driven down partly byrevisions to data for previous periods.Growth for the third quarter waschanged from 0.9 per cent to 1.1 percent. The mainland economy expandedby 2.2 per cent for 2010 as a whole, asit recovers from recession.

Property firms pay to retain youthProperty companies are vying to attractand keep hold of young talent, the RoyalInstitution of Chartered Surveyors(RICS) said yesterday. Young people inthe property sector are receiving signifi-cant salary hikes, according to a RICSsurvey of the sector. Employees aged18-22 in receipt of a pay rise reported

an average increase of 21.2 per cent intheir pay.

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NESTLE, the world’s biggest foodmaker, said strong demand inemerging markets would help it off-set a steep rise in input costs in 2011after it beat sales forecasts for 2010.

The maker of Nescafe coffee andGerber baby food said it was wellplaced to cope with rising commod-ity prices by making cost savingsand pushing up its own prices.

“We saw a significant uptick inraw material prices in the secondhalf,” finance chief Jim Singh said yesterday. “We expect SwFr2.5-3bn(£1.6-2bn) additional input costs in2011”.

The increase would be about 8-10per cent on a cost base of aboutSwFR30bn, a Nestle spokesman said.

Nestle can rely on its strong pres-ence in emerging markets, whereunderlying sales growth was 11.5per cent in 2010, and the appeal of brands such as KitKat chocolate bars to offset rising costs for milk,cocoa, coffee, sugar and grain.

“I cannot tell you what the pric-ing will be, that depends on the dif-ferent markets,” Singh said.

Underlying sales growth in 2010

rose six per cent to beat a forecast of 5.5 per cent, and accelerated to 6.4per cent in the fourth quarter, mak-ing the group confident of meetingits long-standing target of f ive to sixper cent growth in 2011.

Full-year net profit at Nestle roseto SwFr34.2bn, including the pro-ceeds from the sale of its remainingstake in eyecare group Alcon topharma group Novartis.

Singh said the group could usepart of its cash for smaller acquisi-tions, particularly in its nutrition business, as it intends to boost itsmedical food activities. Nestle aimsto conclude its current SwFr10bn buyback in the first half of the yearand will subsequently decide on anew one, Singh said.

AKZONOBEL has said it is optimisticit can raise prices and cut costs tooffset higher oil-based raw materialsprices in 2011, while dismissing talk the Dutch chemical group could be atakeover target.

Speculation about a potentialleveraged buyout of the world’slargest paint maker surfaced last

week, helping to lift AkzoNobel’sstock to a 32-month high.

Finance chief Keith Nichols triedto pour cold water on the rumourduring AkzoNobel’s results yester-day.

“We are a leader in our businessand we have a scale, to be honest,and I should not be commenting,that is quite a bite in this market tocontemplate. So we are sticking to what we do, what we think is theright valuation strategy,” he said.

Rising metal and oil prices cut

into AkzoNobel’s margins in thefourth quarter. AkzoNobel, which

makes coatings for laptops, houses,planes and ships, said its marginsfell to 10.4 from 11.9 per cent andcore profit was below the consensusestimate.

AkzoNobel posted a three per centrise in quarterly earnings beforeinterest, tax, depreciation and amor-tisation but missed a consensus fore-cast.

Shares in the company, which ana-lysts say have been held back by pen-

sion and restructuring costs, closedup 2.1 per cent at €49.57 (£41.7).

AkzoNobel dismisses takeover talk asit offsets rising costs with price hikes

ANGLO-DUTCH publisher ReedElsevier expects a gradual recovery insales and profit margins, after flatsales and a small dip in operating prof-it last year.

The company, which publishes sci-entific and academic information andruns the world’s biggest exhibitions business, said increased spending onproduct development and sales and

marketing had been largely offset by cost-efficiency gains.

It added the bulk of its restructur-ing was now complete.

“Most of our markets are stable orimproving, and we are building on theactions taken in 2010 to strengthenthe business further. Overall, weexpect a gradual recovery and a con-tinued improvement in performance,”the company said in a statement.

Reed Elsevier’s total 2010 revenue was flat at £6.06bn, though up two percent on an underlying basis, while

operating profit slipped one per centto £1.56bn.

Reed Elsevier revenue flatbut expects sales upturnMEDIA

▲

AUSTRALIA’S Qantas Airways sig-nalled a return to growth after the worst downturn in aviation history,as recovering corporate travel andhigher ticket prices offset soaringfuel prices and the cost of groundingits fleet of A380 aircraft.

Qantas shares posted their biggestone-day gain in almost two years, ris-ing 5.4 per cent as investorsshrugged off their disappointmentthat the airline did not reinstate div-

idend payments to focus on upbeatcomments on cost savings and

yields. The airline, Australia’s largestposted a four-fold increase in first-half net profit to A$241m (£150.2m)compared with A$58m a year earlier.

Qantas said it expected “material-ly higher” profits in 2011 despite an A$80m impact from the decision toground its A380 fleet last year fol-lowing a mid-air Rolls-Royce engineexplosion. However, it did not givespecific guidance.

Qantas predicts growthin profits as travel revivesAVIATION

▲SWISS engineering company ABB hasunveiled a further $1bn (£610m) of

cost savings as it continues to cope with price pressures from increasing-ly competitive emerging market play-ers and falling Asian orders.

ABB’s new planned savings of more than $1bn build on deep costcuts made during the recession.

The firm said yesterday that pricepressures were set to continue, withemerging market producers of powerequipment expected to expand fur-ther beyond their home markets.

ABB posted fourth-quarter netincome of $700m, versus the $695mexpected in an analyst poll.

The company reported five percent sales growth in Asia as lower

power orders from China and Indiacame in.“The cost savings are higher than

I’d have expected,” ZKB analystRichard Frei said, adding that this was not necessarily a sign of badtimes ahead. “My conclusion is morethat there’s quite a bit of potentialthat can be exploited.”

Shares in ABB, which have risenstrongly this year, closed down 3.3per cent at SwFr22.41, underperform-

ing a flat sector index.“Within expectations simply isn’t

enough, especially when you see thatthe stock has climbed over 10 percent in 2011,” a trader in Zurich said.

ABB’s business is heavily exposedto customers’ capital spending plansand suffered falling orders duringthe downturn.

ABB promises $1bn cost cutsBYHARRY BANKS

ENGINEERING▲

Nestle helped

by emergingmarket boomBYHARRY BANKS

FOOD▲

BYHARRY BANKS

INDUSTRIALS▲


HONDA RECALLS 700,000 VEHICLES

HONDA is recalling nearly 700,000 Fit, Freed and City compact cars around the worldbecause of a defective spring part that may cause the engine to stall. No accidents havebeen reported related to the problem. The company also said it may buy back moreshares by the end of the business year next month to meet its goal of reaching a payout ratio of 30 per cent Picture: GETTY

NEWS | IN BRIEF

Lenovo tops analyst forecastsLenovo Group beat estimates with a 25per cent jump in third-quarter net prof-it, its strongest result in more than twoyears, but a slowdown in its key home

China market could affect its 2011 out-look. Economic uncertainty in maturemarkets such as the US and Europemight also offset the positive impact itgets from a strengthening Chinese cur-rency and lower component costs.Lenovo, one of China’s best-knownbrands, reported October to Decembernet profit of $99.6m, up from $79.5m ayear ago, and beating expectations fora $86.2m net profit from analysts.

Astellas buys cancer drug rightsJapan’s Astellas Pharma has said it hasagreed to pay $125m (£77.3m) in cash toAveo Pharmaceuticals for worldwiderights outside of Asia to the drugtivozanib, which is in late stage clinicaldevelopment for advanced kidney cancer.Aveo would also be eligible to receive upto an additional $1.3bn in future pay-ments based on regulatory and salesmilestones, the companies said. Some$90m of that would be due for filing forand receiving marketing approval fortivozanib in kidney cancer, meaning thatcould be realised in the fairly near term.

Nobel Biocare sees profits slumpSwiss dental implant maker NobelBiocare lost more ground to rivalStraumann in the fourth quarter andadded a slump in profit to the woes thatended finance chief Domenico Scala’stenure 24 hours ago. The group, whichhas announced former Nestle executiveRichard Laube as its new boss, postedan 80 per cent tumble in fourth-quarternet profit to €5.2m (£4.4m), withpatients reluctant to spend on pricierproducts and non-urgent treatments.Sales dipped 1.6 per cent to €153.2mdespite a boost from the euro’s weak-ness, missing analysts’ expectations.

ABB chief executiveJoe Hogan said thecompany was at aturning in its powerbusinesses

ANALYSIS l Nestle

57

55

53

51

CHF

27 Dec7 Dec 14 Jan 3 Feb

52.9017 Feb

8/7/2019 Cityam 2011-02-18book


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8/7/2019 Cityam 2011-02-18book


Evolution SecuritiesThe investment bank has hired Adele

Thackray to work on investor relationswithin the corporate broking team.Thackray has extensive experience in

pan-European equity research andsales, both in financial boutiques andinvestment banks including UBS.

PZ CussonsThe consumer goods group has formeda new beauty division, to be headed by

current St Tropez chief executiveMichelle Feeney. Ann Murray and SelmaTerzic will also join the branch from PZCussons subsidiaries Sanctuary and StTropez. The division will be based inCovent Garden from June.Feeney has been with St Tropez since2006 and before this spent 11 years atEstee Lauder as part of a 25-year

career in the beauty industry.PZ Cussons will operate as two divi-sions, UK and Beauty from 1 June, seal-ing the integration of the St Tropezbrand.

Close Asset Management

The investment manager has appointedIan Christie as business developmentdirector. He joins from MountbattenFinancial Management, where heworked as client services director fortwo years. Before this, he spent time atMetLife UK and Premier AssetManagement.Christie will be responsible for support-

ing independent financial advisers innorthern England, as part of Close’sexpansion in the IFA sector.

Lombard RiskThe management consultancy has hiredPaul Tuson as chief financial officer.

Tuson joined the firm in September andhas previously worked for KPMG andAspire Technology. He is a qualifiedchartered accountant, and has acted asCFO for three Aim-listed companies.Also joining Lombard are PhilipStanning, who becomes group salesdirector, and new group marketingdirector Rebecca Bond.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Marion Dakers

KPMGRobert Mirsky is joining the financial servicesfirm as head of hedge funds in the UK. He waspreviously managing director of investmentconsultancy Laven Partners, and has workedfor Ernst & Young’s hedge fund practice in theUS.

Mirsky, who trained as a lawyer in the US, isalso the chairman and founder of Hedge FundsCare UK, an industry-supported charity thatworks to prevent child abuse.

+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 St rises despiteMiddle East unrest

US investors piled on a dizzyingtwo-year advance in stocks yes-terday, using a brief slip onnegative economic news as an

opportunity to buy into market lead-ers.

The technology sector showedstrength, with Nvidia up 9.8 per cent

to $25.68 a day after posting a bullishrevenue forecast on accelerating salesof its processors.

An index of semiconductors’ sharesgained 1.4 per cent and is now up21.3 per cent since early December,around the time when the mostrecent leg of the run-up started.

The S&P energy sector gained 0.8per cent. US crude futures jumped 1.7per cent as unrest in the Middle Eastkept focus on supply, boosting sharesof energy companies.

Futures had dipped early in the ses-sion after data showed both a rise inconsumer prices and new claims forunemployment benefits, but the dipdidn’t last long after the open.

“People have been focusing on thepositives like the outlook for corpora-tions and a good earnings season,”said Brian Lazorishak, a money man-ager at Chase Investment Counsel in

Charlottesville, Virginia.Stocks continued to ignore Iran’s

intention to send two navy vesselsthrough the Suez Canal to theMediterranean in a move Israel hascalled a “provocation”.

“Geopolitical issues have beenpushed aside, maybe prematurely,”Lazorishak said.

The S&P 500 has doubled its valuein less than two years, the quickest100 percent gain since the GreatDepression.

However, volume has been light inthe most recent leg of the rally, with just 6.7 billion shares changing hands Thursday on the New York Stock

Exchange, NYSE Amex and Nasdaqcombined – the second-lowest so farin 2011.

The Dow Jones industrial averagegained 29.97 points, or 0.24 per cent,to 12,318.14.

The Standard & Poor’s 500 Indexrose 4.11 points, or 0.31 per cent, to1,340.43. The Nasdaq CompositeIndex added 6.02 points, or 0.21 percent, to 2,831.58.

Advancing stocks outnumbereddeclining ones on the NYSE by a ratioof about five to three, while on theNasdaq, about three stocks rose forevery two that fell.

The S&P 500 faces little technicalresistance before the 1,361 area thatmarks the 76.4 per cent retracementof its slide from the 2007 highs to thelow hit on March 6, 2009.

A Fibonacci projection of the latestleg of the rally also draws a target

near 1,361, suggesting the S&P couldface strong resistance at that level.

BRITAIN’S FTSE 100 share indexclosed slightly higher yester-day, as strong gains from banksoffset weaker miners and opti-

mism on corporate earnings out- weighed Middle East politicalconcerns.

Banks advanced by upbeat broker

comment and hopes for further goodearnings reports from the sector, andoverall sentiment on equitiesremained fairly positive.

The FTSE 100 closed 2.11 pointshigher at 6,087.38 after it added 0.8per cent on Wednesday, and is closeto its highest since June 2008. It hasgained 3.8 per cent this month.

Activity was fairly strong with vol-umes at over 125 percent of the aver-age for the last 90 trading days.

Police in the Gulf island kingdomof Bahrain attacked demonstratorscamped out in the capital yesterday,killing three, in a move to stifle pro-democracy protests inspired by simi-lar movements across the region.

“The market is proving resilient tonews in the Middle East which usual-ly would have caused things to wob- ble more,” Keith Wade, chief economist and strategist at Schroders

said.Banks which continued their

ascent from Tuesday when Barclaysposted forecast-beating results.

Royal Bank of Scotland and LloydsBanking Group, set to unveil full-yearresults next week, rose 3.8 per centand three per cent respectively.

“The environment is very good, with low interest rates and big mar-gins,” Wade said.

Evolution Securities added RBS toits “core buy portfolio”, saying it wasa “clear beneficiary of potentially bet-ter trading conditions in retail andinvestment banking in the UK”, whileLloyds remained the broker’s “Top

Conviction Buy” in the European banking sector.Miners weakened as copper stum-

bled to three-week lows withinflation worries and the demand-sti-fling effect of prices near recordhighs keeping sentiment in check.

BAE Systems was the biggest fallerdown 4.2 per cent, after the defencecontractor said it expected sales tofall in 2011 as the impact of defencecuts in the UK and the United States begin to hit home.

Investec Securities placed its “buy”rating for the stock under review.

Reed Elsevier was also pressuredafter its results, off 2.4 per cent, withInvestec describing the publishingand information provider’s full-yearnumbers as “solid”, but saying there was “little in the statement to getexcited about either way”.

Reed, which publishes scientific

and academic information and runsthe world’s biggest exhibitions busi-

ness, said increased spending onproduct development and sales andmarketing had been largely offset by cost-efficiency gains. The publisheradded the bulk of its restructuring was now complete. The firm also saidit expects a gradual recovery in salesand profit margins.

US core consumer prices rose attheir quickest pace in more than a year in January while new claims forunemployment benefits rose last week, partially reversing the prior week’s hefty decline, dampening arally in US stocks.

British factory orders improvedmore than expected in February andfirms expected to put up prices attheir fastest pace in two-and-a-half years, the CBI’s monthly industrialtrends survey showed.

Technical indicators on the FTSE100 point to some fairly strong sup-port around the 6,000 level andslightly below, Nicole Elliott, techni-cal analyst at Mizuho Corporate Bank said.

London flat as weak minersare offset by strong financialsTHELONDONREPORT

THENEW YORKREPORT

ANALYSIS l FTSE

6,100

5,900

5,700

5,500

22 Nov 10 Dec 4 Jan 24 Jan 11 Feb

6,087.3817 Feb

p

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

ANALYSIS l Betfair

900

1,100

1,300

1,500

22 Nov 10 Dec 11 Feb4 Jan 24 Jan

p

918.00

17 Feb

BETFAIRLiberum Capital rates the gambling group “sell” with a target price of 850p. The broker believes that the market is attributing too much value tothe LMAX, the firm’s contracts for difference exchange, given that vol-umes since December have been poor. Liberum expects the firm’s updateon 8 March to show sales were hit by event cancellations due to the win-ter weather and headwinds in the poker business.

ANALYSIS l BHP Billiton

2,350

2,250

2,450

2,550

2,650


p

2,444.5017 Feb

BHP BILLITONStandard & Poor’s rates the miner “hold” with an increased target price of £27, up from £25, following Wednesday’s record results, driven by highercommodity prices. The broker believes BHP has sealed its reputation asthe best in the mining sector, though the results gave little scope for anear-term catalyst for the share price, which are already at an all-timehigh. S&P says post-Potash acquisition activity is unlikely.

ANALYSIS l InterContinental Hotels Group

1,100

1,200

1,300

1,400


p

1,416.0017 Feb

INTERCONTINENTAL HOTELSJP Morgan Cazenove rates the hotel group “overweight” with a targetprice of £16.72. The broker has raised its 2011 earnings estimate by fiveper cent based on recent results, which suggest a tight control of costinflation and the lucrative sale of some assets. JPM adds that the disposalof its flagship New York hotel could return up to $260m to investors,pushing earnings per share up nine per cent.


8/7/2019 Cityam 2011-02-18book


The grouping of African nations has seenpolitical turmoil but investors shouldkeep their nerve, writes Craig Drake

Scenes from Cairo ascivil unrest spreadacross the continent

Picture: ReutersInvestors in

SANE states:keep calmand carry on

A T the start of the year, invest-ment opportunities seemedaplenty for those seeking expo-sure to Africa. The London

Stock Exchange announced that theHSBC MSCI South Africa ETF, launched

yesterday, brought the total number of London-listed exchange-traded funds(ETFs) based on emerging marketindices to 75.

South Africa, Algeria, Nigeria andEgypt find themselves following thePiigs and the Brics in the current trendfor multinational groupings.Collectively they are home to 70 percent of Africa’s largest companies, allof the top 50 banks, the target of morethan half of all foreign investment andholders of more foreign currency reserves than the rest of Africa com-

bined,However, all has not gone to plan for

the continent. With civil unrest sweep-ing across the north coast, and regimesseemingly tumbling like dominoes,predictions of the emergence of

African economies took a large dent. The political wildfire sparked first in Tunisia and spread around the regionand into the Arab states. The largestpolitical bonfire was in Egypt, but theflames of protest were fanned deeperinto the continent to Sudan, sub-Saharan Africa’s largest country, whichis set to split in two in July, with anti-government protests continuing torage across the country.

In contrast, of the SANE grouping,South Africa looks the most attractiveproposition. 2010 saw it ride the waveof rising commodity prices and their

export sector has flourished thanks tocomparative freedom from the hightariffs and big government interven-tion that hold back other Africannations. Despite this, there could betrouble on the horizon for South

African unity. Nelson Mandela is now 92 and in frail health, and the ANC

party do not have the dominance thatit once had.

With such instability in the conti-nent, why should emerging marketETFs be a target for investors in thelong term?

Farley Thomas, head of ETFs at HSBCsaid in support of emerging markets:“With investors eager for growth andincome it seems very likely they will beattracted to these sometimes over-looked but quite dynamic economiesthat are perhaps worth investing in forthe long term.”

“South Africa is one of the biggereconomies within the emerging mar-kets universe. It has an abundant sup-ply of natural resources alongside

well-developed financial, communica-tions, energy, and transport sectors.

The HSBC MSCI South Africa ETF aimsto provide investors with high quality and good value access to this potential-ly high growth story.”

Though it is easy to make the casefor a South Africa fund, there are alsothose that believe that the events inEgypt and beyond will be a good thingfor long term investors seeking expo-sure to Africa. Citadel Capital, based inEgypt, takes the view that the difficultperiod experienced in January and

beyond will result in a more stable andfaster-growing Egypt and region, withcompelling opportunities for long-term private equity investors in Egyptand beyond.

With Market Vectors’s Africa IndexETF tracking above its South Africanfund for the first time in 6 months, wemay well see more SANE-targeted ETFs

hit the market, allowing smartinvestors to expose themselves todiverse commodity rises across thecontinent. If they are prepared to

weather the storm and take a long-term view on African investment,there could be rich pickings for thoseprepared to take the risk.

ANALYSIS l Market Vectors Africa Index ETF vs its SA Index ETF

20

15

10

5

0

2010 Sep Oct Nov Dec 2011 Feb

%

S Africa ETF

Africa ETFAfrica ETF

19

Wealth Management | Listed Products

This month, the London Stock Exchange is celebrating

the first anniversary of the launch of its Order book for

Retail Bonds (ORB). On ORB, private investors can invest

and trade in bonds as simply as they trade shares. The bonds

are tradable in low denominations, typically £1,000, and have

continuous buy and sell prices displayed throughout the trading

day. The market hosts a range of corporate, government and

supranational debt.

For further information on ORB,

go to www.londonstockexchange.com/bondsmadeeasy

or email us at [email protected]

8/7/2019 Cityam 2011-02-18book


8/7/2019 Cityam 2011-02-18book


his vacuum cleaner and rigged it up with acardboard cyclone and cleaned his room

with it. He was impressed that it picked upmore dust than his old bag machine. This

begun a long battle for funding and licens-ing the design. Dyson was supported by his

wife’s salary as an art teacher until hesecured a funder.

Dyson hopes to use the work of his foun-dation to get young people to follow in hisfootsteps. He says: “As a nation we’ve

become too scared to take risks, but it’sthrough experimentation and failure thatnew ideas are born. Britain needs this now more than ever before. Over the last fifty

years we’ve forgotten how good we are atmaking and developing technology to sellto the world.”

Business Features | Entrepreneurs

21

PEOPLE should stop trying to makemoney out of money and makemoney out of inventing things,”

James Dyson tells me, “it’s the best way to revive our economy.”

Clearly a man of his word, he hadliterally just placed the last ceremonial

brick on his latest philanthropic venture:the Royal College of Art’s (RCA) new build-ing. “I’m very excited about the people andideas that are going to come out of this

building,” he says. The building itself is pretty special too. It

has been designed to provide 40 incubatorunits for Design London students to house

their designs while they work on commer-cialising them. The programme, Dysonproudly explains, is a partnership betweenthe Royal College of Art and ImperialCollege’s engineering faculty and businessschool, where a whopping 80 per cent of student projects secure further funding or

become businesses in their own right.Dyson is understandably enthusiastic

about the college. He went there himself,initially studying furniture design beforemaking the leap into industrial projects.

After graduation he worked for a few engi-neering companies, designing Edison-style:observing the world around him and mak-ing prototype after prototype of his ideas.

He discovered his most famousinvention after a chance visit to a sawmill.He noticed how the saw dust was removedfrom the air by large industrial cyclones. He

wondered whether that principle could work on a smaller scale within a vacuumcleaner. When he got home he took apart

Donata Huggins asks Sir JamesDyson about creating the nextgeneration of entrepreneurs

Sir James Dyson onthe site of the new

Dyson building at theRoyal College of Art

How to turn yourstaff into businesscommandos

Picture: GETTY

How to make Britain’s future

JUST as businesses have changed inthe last 25 years, so have people’s

attitudes to employment. It is notunusual to hear older businessmanagers moan about the lack of loyalty staff show their employers these days.But many employers fail to realise thatthe changes in British business and theseattitudes are actually a symptom of eachother. The more creative and service-dri-

ven nature of the UK economy meansthat staff are a company’s most impor-tant asset.

To help out business owners, wetracked down someone who really knowsabout leadership: Lieutenant General SirRobert Fry executive chairman of thearmy officers-turned-entrepreneurs

behind the consultancy firm McKinney Rogers for five tips on building loyalty.

1 REWARD

Fry says: “There are, of course, the basichygiene things to consider. You have to

pay your staff properly and offer rewardsfor good performance. But these are so

basic that they are hardly worth men-tioning. The more difficult part of build-ing a team’s loyalty is not so easy todefine.” Business owners, Fry says, oftenmistakenly think that staff only careabout money. While the “bread and but-ter” elements of pay and conditions areimportant for keeping staff, building loy-alty is more complex.

2 PERSONAL AND COLLECTIVE VISION

This tricky bit of leadership requires busi-ness owners to align personal and collec-tive ambition.

“In the armed forces,” Fry explains“lots of people are driven out, not

because of their lack of personal ambi-tion, but the lack of national ambitionfor the army. The relationship between acompany’s staff and managers is

similar.” The leadership should try to bring into line varying desires.

3 TRUE LEADERSHIP

“The best leaders give power away,” saysFry. “Tyrannical organisations can only ever be successful for short periods of time.” This he explains is because staff willkeep leaving and they will forever be train-ing new people.

4 GIVING RESPONSIBILITY

If leaders trust their judgement and

employ talented people, they should trustthem with as much responsibility as they

are capable of handling, says Fry. “Givingstaff lots of responsibility makes them feel

valued, empowered and really part of what you do.”

5 BEWARE OF A BAD REPUTATION

Fry warns that businesses that experiencehigh turnover can reach almost legendary status within their sector. “You don’t wantto have people saying they have noticedthat your staff don’t stay with you long.Presuming the staff are paid properly,

businesses that have lots of people leavehave internal management problems and

good potential employees might bedeterred from joining you.”

Donata Huggins speaks to Lieutenant GeneralSir Robert Fry about building staff loyalty

A real team needs adetermined leader

Born: Norfolk, EnglandLives: WiltshireAge: 63Family: Married with three childrenStudied: Royal College of ArtFacts:l It took 15 years and over 5,000 prototypes tolaunch the first Dyson DCO1 vacuum cleaner.lDyson vacuums are sold in over 50 countrieslOne in every three households now owns aDyson vacuum cleaner

CV |JAMES DYSON

NEWS | IN BRIEF

NEW DIGITAL FUNDING SCHEMEDigital entrepreneurs are invited to join a£200,000 scheme aimed at helping to bring

new UK innovations to market. ICTomorrow, a technology strategy board pro-gramme, will invest in up to 20 consumertrials across creative market sectors includ-ing music, television, film, and publishing.The scheme will be high profile and providethe entrepreneurs with the ability to workclosely with leading players in the digitalindustry. The first stage of the process willclose on 11 March 2011 with the submissionof a video and simple business plan. 40applications will be chosen to go through tothe face to face panel phase at the end of March.

SMES WASTE MILLIONS ON FXSmall and medium-sized (SME) businessescould be wasting millions of pounds everyyear when making international payments,according to Travelex Global BusinessPayments, the cross-border payments spe-cialist. It estimates that smaller businessesthat trade internationally are wasting up to

£280m per year on transaction fees byusing their bank instead of a payment spe-cialist, or £2,280 per business. 80 per centof the businesses surveyed currently usetheir bank to make international payments,potentially costing them between £25 and£40 each time they make a payment.

ONLINE SME MARKETING SEMINARBritish Library Business & IP Centre is hold-ing a seminar on online selling and market-ing to help small businesses communicateclearly online. Cate Trotter, the founder of Insider Trends, whose marketing and con-sultancy work has included brands such asMarks and Spencer, Clarks and Nokia. Shewill pinpoint key trends in online businessesand outline easy-to-use and affordable toolsfor small businesses to use. The session willbe held at the British Library & IP Centre on22 February between 6-8pm. For moreinformation see www.bl.uk

8/7/2019 Cityam 2011-02-18book


MANGROVE ROADPrice: £525,000A roomy four-bedroomEdwardian family home, ideallypositioned for Hertford’s towncentre and just a stone’s throwfrom the Simon Balle School –a top comprehensive. The land-scaped garden has an exoticflavour, with a beach-style hut,a summerhouse, and an orna-mental pond with an accompa-nying bridge. Contact: Steven Oates: www.stevenoates.com- lucks.co.uk

DOLPHIN YARDPrice: £285,000This slick two-bedroom apart-ment is part of an intimate new

development of 16 homes,located close to the centre of Hertford on the banks of theRiver Lea. Balconies and raisedwalkways make the most of the river views, while commu-nal courtyards give the projecta community feel which manynew developments lack.Contact: Mullucks Wells: www.mullucks.co.uk

DENE HOUSE, BAYFORDPrice: £285,000This stately four-bedroomfamily home is crammedwith quirky features andcharming period details, fromlarge bay windows and openfireplaces to a roll-topVictorian style bath. There isplenty of space too, with tworeception rooms, a generous-ly sized garden and a brickoutbuilding for storage.Contact: Savills: www.savills.co.uk

Q.I have recently moved into anew build apartment, and it isvery stark and bland, how can I

make it feel more personal?

A.The personal touch – especially innew builds – is all about colour andflooring. Wood can be quite hard

and loud and by adding a rug and using com-parable colours on the walls you can createrooms that are more welcoming: just whatyou want after a hard day’s work.

In your living areas, select a wall to have abold colour or a print on it –myfotowall.comwill take any image and produce wallpaper.You might want to consider your favouritelandscape, beach view or even a nebula taken

from the Hubble Telescope. Paint the otherwalls in a softer colour to compliment withthe feature wall. Use a large rug with sofasand easy chairs around it and a feature cof-fee table to make a compartmentalised seat-ing area. Don’t forget the television, they tendto be big and ugly; you don’t want it makinga feature on your wall so look at storageunits that it can hide in when not in use.

In the kitchen think of changing the doorsor worktop to compliment the new décor of the apartment – this is a cost effective wayto make the kitchen unique. In the bedroomsyou need to again feel relaxed and calm, sur-round yourself with photos in silver frames of your loved ones and happy memories, place athick pile carpet on the floor so that you candig your toes into it. Paint the bedroom in adark colour and use lighter bed linen tobrighten it up, chocolate brown or a rich

jewel colour is a good choice here for thewalls. Place an easy chair in one corner, per-fect for throwing your clothes on, or just sit-ting and reading a book one evening.

In the bathrooms ask your builder to builda light box floor to ceiling and front it with awafer thin piece of marble, granite or otherinteresting stone. The light shining through itmakes a wonderful effect, especially useful if it’s an internal bathroom with no naturallight. All of these will take a “standard”apartment and make it yours with lots of wow factors built in.

Andrew DunningHEAD DESIGNER OFAPD INTERIORSWWW.APDINTERIORS.COM

Q A&

BLOCK MANAGEMENT REVOLUTIONA computer programme called “Blockcare”, designed tomanage the administration of small apartment blocks, hasbeen launched by managing agent Ringley Group. Thesoftware could significantly lower the fees that leasehold-ers are charged by traditional managing agents –up to 90per cent over the course of a year. There is a range of pro-grams, none requiring prior experience of managing prop-erty.For more info, see www.leaseholdersupport.co.uk

FUTURE BRIGHT FOR COMMERCIAL PROPERTYThe UK commercial property market is in good shape,according to the latest survey by the Royal Institute of Chartered Surveyors. 18 per cent more surveyors expect-ed new sales and lettings to increase in the next threemonths than predicted a decrease, the highest propor-tion since the credit crunch. But while the demand for

prime London office space is buoyant, other sectors of the market still face “significant challenges”.

BROADBAND COULD BOOST YOUR HOUSE PRICEA fast and reliable broadband service could add value tothe price of your home, says a survey by internet advicewebsite ISPreview. A poll of 733 respondents revealedthat almost two thirds of Brits would be discouragedfrom buying “a beautiful property” if it lacked a highspeed broadband connection. This is a glimmer of good

news for homeowners hoping to sell this year, in what areturbulent times for the UK property market.

CRAFTSMAN-BUILT HOMES IN WHITSTABLEThose interested in a property in the atmospheric seasideresort town of Whitstable should have a look at InvictaFields, a collection of just ten craftsman-built detachedhouses. There are seven four-bedroom houses and threethree-bedroom houses, designed by a Canterbury archi-tect. A sailor’s paradise with the club, beach and prome-

nade all a short disance away. For more info, see www.cluttons.com.

PROPERTY NEWSBY AMY HIGGINS

Commuting: There are trains runningevery half an hour from Hertford Eaststation to Liverpool Street, with a jour-ney time of just over 50 minutes.Crime: Towns don’t get much saferthan Hertford, whose crime rates aresignificantly below national averages.Education:. In the state sector, sec-ondaries Simon Balle and Richard HaleSchools achieve exam results wellabove the UK average. Distinguishedboarding school Haileybury offers theInternational Baccalaureate, a vastrange of extra-curricular activities and

spectacular grounds.Restaurants and bars: HertfordHouse Hotel’s is for summertimealfresco dining. Head to Bluecoat in thecolder months for comforting Englishdishes made with locally sourcedingredients.Leisure: Hertford boasts several cul-tural gems including an ancient castle,the Corn Exchange – which hosts livemusic and comedy – and the small butperfectly formed Hertford Museum.Surrounding countryside makes thetown a walker’s paradise.

NEED TO KNOW | AREA INSIGHT

Living | Focus On

22 CITYA.M. 18 FEBRUARY 2011

CURRENT MORTGAGE DEALS BY AMY HIGGINS Source: MoneySupermarket.com

Lender Fixed/Flexible Rate Until Standard Rate APR Maximum Loan(per cent) (per cent) (per cent) to Value (per cent)

First Direct Flexible 1.99 2 years 3.69 3.5 65

Santander Flexible 2.19 2 years 4.24 4 60

HSBC Flexible 2.29 Term 3.94 2.3 60

Yorkshire BS Flexible 2.29 Feb 2013 4.99 4.7 60

NatWest Flexible 2.39 April 2013 4 3.9 60

Santander Fixed 2.65 April 2013 4.24 4.2 60

Mansfied BS Fixed 3.09 2 years 5.59 5.3 75

Loughborough BS Fixed 3.55 2 years 4.99 5 80

Leeds BS Fixed 3.69 2 years 5.69 5.5 75

Nationwide BS Fixed 3.69 March 2014 3.99 4.2 70

INTERIORSHERTFORD, HERTFORDSHIRE BY AMY HIGGINS

8/7/2019 Cityam 2011-02-18book


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8/7/2019 Cityam 2011-02-18book


THE idea of owning a luxurious homein central London is the sort of thinglots of upwardly-mobile urbanitesaspired to. But given the chance,

where and what do you go for? One of cen-tral London’s primary characteristics is thesheer range of localities, architectures andatmospheres all crammed into it. Grandapartment in Knightsbridge? Chelsea town-house? Mayfair mews house?

Marylebone is perhaps a little less herald-ed than the above areas – it doesn’t quiteshare the jet-set glamour of those locales, but for many people that will be an attrac-tion in itself. An area of grand Georgian

avenues, winding side streets, the oddmajestic square and a high street that’s allgroovy boutiques, food shops and cafes, itmixes quietness and “urban village” charm with direct proximity to the West End.

Before the Conran shops, art galleries,smart restaurants and fashionably expen-sive independent food shops (plus Waitrose) which now give it its identity,Marylebone had a reputation for arch tradi-tionalism. “It used to be late middle agedpeople retiring into the mansion blocks, it was all very proper,” says Clare Moll of West

End property specialist LDG. She says thattoday younger people are attracted to thesame properties, updating the interiorsand kitting out the homes to the highestmodern specifications.

What’s unusual in an area likeMarylebone, however, is an entirely new townhouse. However, two are launchedonto the market today, built on the quietcul de sac Duke’s Mews, which runs adja-cent to Wigmore Street. Designed to thetrendiest white-walled, wooden-floored,mood-lit standards, and wired for every kind of interior gadget system a deep-pock-eted person could need, they’re a pretty

good representation of Marylebone’s leapfrom fusty to cool without sacrificing itscharacter.

THE BEST OF MARYLEBONEOrrery: Elegant dining in a converted stable block www.orrery-restaurant.co.ukThe King’s Head: a tiny, traditional placeloved by locals. 13 Westmoreland ST, W1G 8PJ Conran Shop: An emporium of interiordesign cool. www.conranshop.co.ukLa Fromagerie: One of the country’s finestcheese shops. www.lafromagerie.co.uk

Once it was fusty, now it’s one of the mostdesirable areas in Zone 1, says Timothy Barber

Style, charm andquiet in Marylebone

DEVONSHIRE CLOSEPrice: £3.95mA two bedroom house with bold, funky interiors overthree floors on a cobbled mews street.Contact: call Foxtons on 020 7973 2000 or visit www.foxtons.co.uk

MONTAGU SQUAREPrice: £2.5mAn elegant three bedroom flat with the benefit of direct access to Montagu Square’s Georgian gardens.Contact: call Knight Frank on 020 7483 8349 or visit www.knightfrank.com

ALSO AVAILABLE IN MARYLEBONE

Living | London Property24 CITYA.M. 18 FEBRUARY 2011

kayandco.com

HYDE PARK GARDENS, HYDE PARK, W2

A selection of stunning apartments in this sought after white stucco fronted

terrace. Hyde Park Gardens is surrounded by private award-winning grounds

and faces Hyde Park.

Ranging from £2,750,000 to £12,500,000 – Leasehold

Hyde Park & Bayswater 020 7262 2030

ALBION CLOSE

HYDE PARK, W2

A beautifully refurbished three/fourbedroom lateral mews house with

private parking just a short walk fromHyde Park and Connaught Village.

• Three/Four Bedrooms• Two Reception Rooms• Three Bathrooms (Two En Suite)• Private Parking

£3,800,000 – Freehold

Hyde Park & Bayswater020 7262 2030

MONTAGU SQUARE

MARYLEBONE, W1

A striking apartment on the groundand lower ground floor of this periodbuilding interior designed to an exactingstandard and with high ceilings.

• Three Bedrooms• Two Bathrooms• Private Patio• Use of Communal Gardens

£2,500,000 – Leasehold

Marylebone & Regent’s Park020 7486 6338

London Estate Agents | Investment & Development Consultants | Block Managers| Established 1982

No 3 & No 5 DUKES MEWSPrice: £3.5m and £4.6mTwo newly-built, five floor townhouses, one withthree bedrooms and the other with four. State-of-the-art and then some.Contact: call LDG on 020 7580 1010 or visit www.dukesmews.co.uk

8/7/2019 Cityam 2011-02-18book


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*Price of £118,995 is based on a purchase price of £139,995 when you pay 85% with easystart. Offers available on selected plots anddevelopments, subject to status and for a limited time only. For full details of the offers contact the Sales Information Centre, visit ourwebsite taylorwimpey.co.uk/easystart or request full details from your local Taylor Wimpey office. **depositmatch is an interest free loanof up to 10% of the purchase price of the property offered for a period of up to 10 years subject to a second charge on the property. Fulldetails of all the offers available on request, on selected properties only. Offers can be withdrawn at any time and only one promotionoffered on each purchase. All offers subject to using a Mortgage Broker and Solicitor from Taylor Wimpey’s panel who will act solely forthe applic ant. YOUR HOME MAY BE REPOSSESS ED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHERDEBT SECURED ON IT. Prices correct at time of going to press. Images depict typical Taylor Wimpey properties. †Journey times asquoted by National Rail Enquiries. February 2011.

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8/7/2019 Cityam 2011-02-18book


Lifestyle | Reviews

26 CITYA.M. 18 FEBRUARY 2011

Film

INSIDE JOBCert: 12A

hIIII

THIS much-hyped look at the financial cri-sis has already won the best documentary award from the Directors Guild of America and is seen as a strong contenderto take an Oscar. So it’s a shame that a would-be fearless exposé of a supposedly rogue industry is a rehash of old accusa-tions, selective in its use of the facts andtoo fixed on ideological enemies to noticethe blindness induced by its own political biases.

The director, Charles Ferguson, makessweeping claims: he sees the entire finan-

cial services industry as “increasingly

criminal”; the premise of the documen-tary is not only that the crisis could have been avoided but that either the entireindustry, or at least those at the top at thetime, should be sent to jail. But Fergusonnever makes the sort of forensic, detailedcase that could sustain that belief. Instead we get a run-through of the already well-trodden main events of the crisis,enlivened by sometimes painful, alwayspartial interviews.

In the process, as much is elided as isrevealed. Ferguson hymns the world of US banking before Reagan-era reforms as both wholesome and low-paid (for him, itappears, the two come to much the samething). But he paints out of his NormanRockwell imagery the Carter era of malaise and stagflation that droveReagan’s successful efforts at economicresuscitation. He repeats the commonmisconception that the 1999 Gramm-Leach-Bliley Act repealed the regulatory framework on commercial and invest-ment banks. He derides those whothought that derivatives were serving auseful function in stabilising markets, butfails to discuss the all-too-real phenome-non of the great moderation and how itchanged economic perceptions of risk.

The film sticks to the usual script thatgreedy bankers driven by perverse com-pensation structures chased their salaries

up to the detriment of their firms. Dick

Fuld of Lehman lost $1bn in stock thanksto the crisis, but we don’t hear about that.Instead, Ferguson flings all the mud hecan, from ad hominem arguments aboutprostitution and drug use to a conspirato-rial tangent about academic economists.But he consistently fails to shine the samelight on his own sources: Eliot Spitzer’sdisgrace is notably glossed over.

Inside Job touches some importantissues, such as the failure of the ratingsagencies and over-cosy government links with the financial industry. But Fergusonis so committed to attacking deregulationthat he fails to consider the role of over-regulation, notably the 1970s SEC regula-tion that turned the ratings agencies intoan oligopoly or the 2001 recourse rulethat encouraged US commercial banks tohold less capital on mortgage-backed secu-rities. Inside Job may win the Oscar for itspassion, but it comes up short on content.

PAULCert: 15

hhhII

ET meets Easy Rider in this sci-fi adven-ture comedy, although English nerds

Graeme Willy and Clive Gollings (played

A hotly-tipped creditcrunch exposé is justa rehash of the sametired old arguments,says Marc Sidwell

Shame... greed... never mind the facts

BIG MOMMA’S: LIKE FATHER, LIKE SON MartinLawrence wheels out his fat suit once more.

CONFESSION Japanese psychological drama abouta vengeful bereaved mother.

JUSTIN BIEBER: NEVER SAY NEVER (3D) Never.Never never never never never. In a million years.

FILM

THE SOCIAL NETWORK The founding of Facebook,one of last year’s best.

REDAction comedy about Saga-aged assassins, withHelen Mirren, John Malkovich and Bruce Willis.

BURIED Ryan Reynolds is six feet under the desert,with only a mobile phone with a dying battery.

DVD

PJ HARVEY The iconic singer’s latest album is titledLet England Shake.

MOGWAI The Scottish rockers release album seven,Hardcore Will Never Die, But You Will.

GRUFF RHYS The Super Furry Animals frontmanputs out his third solo album, Hotel Shampoo.

MUSIC

MARVEL VS CAPCOM 3: FATE OF TWO WORLDS(PS3, X360) Superheroes, lots of ‘em.

HARD CORPS: UPRISING (PS3, X360) Anime-stylefuturistic action game.

MAGICKA (PC ONLINE) Action adventure gamebased on Norse mythology.

GAMES

ALSO OUT THIS WEEKENDFILMS, MUSIC, GAMES

If the Inside Job isto be believed, allbankers are like DickFuld

Nick Frost andSimon Pegg have aclose encounter Paul

the alien, picturedbelow

by Simon Pegg and Nick Frost) bear littleresemblance to the edgy, drug-fuelled bik-ers of the latter film. The drug taking thatoccurs in Paul is in fact initiated by the titu-lar wise-cracking alien, who gatecrashesGraeme and Clive’s road trip across America’s UFO heartland – and who hap-pens to be partial to the occasional joint.

Paul (voiced by Seth Rogan) is on the runfrom a military base where he has beenimprisoned and enlists the help of thegeeky Brits in his quest to return to themother ship. The trio are called upon tooutfox a series of government baddies (led by Jason Bateman) along the way, including

the bible-bashing father of good Christiangirl-turned-swearing nymphomaniac

Ruth Buggs (Kristen Wigg). This last bit involves some startlingly close-

to-the-bone gags which are sure torile inhabitants of the Bible Belt.

Directed by Greg Mottola of Superbad fame, this is a good-natured affair, and Rogan is on top

vocal form – the contrast betweenthe weedy, needy Englishmen and

their smooth-operating, quick-wittedalien counterpart is enjoyable. Crucially

however, Paul is a long way off matchingSuperbad, or Pegg and Frost’s previous part-nerships like Shaun of the Dead, in thefunny stakes. It’s packed with tongue-in-cheek sci-fi references – so atheist geeks, at

least, will love it. Amy Higgins

8/7/2019 Cityam 2011-02-18book


T E R

R E S T R I A L

ONE MANAND HIS CAMPERVANBBC2,6.30PM

Martin Dorey’s 2,500-mile journeyconcludes in Pembrokeshire, where hemakes a cordial from foraged flowersand prepares burgers with his family.

COMEDYROCKS WITHJASON

MANFORD ITV1,9PM

Dame Edna Everage, Jason Byrne andChris Ramsey join Jason Manford for afeast of comedy, with music providedby Australian trio Axis of Awesome.

MADEIN ENGLANDCHANNEL4, 7.30PM

A First Cut documentaryproviding aninsight into Cooper and Stollbrand, oneof the last remaining clothing factoriesin Salford.

BBC1

SKY SPORTS 17pmSky Sports News at Seven7.30pmLive Super League10pm Take It Like a Fan10.30pmFootball LeagueWeekend 11.30pmCricketWorld Cup 12.30amSuperLeague 2amFootball LeagueWeekend 3amTake It Like a Fan3.30am Super League 5am-6amFootball League Weekend

SKY SPORTS 2

6.30pmCricket World Cup7.30pmLive Football League10pm Tight Lines 11pm NFL:Total Access 12am Elite LeagueIce Hockey 1amNFL: TotalAccess2amCricket World Cup3amRugby Union 5am-6amRacemax

SKY SPORTS 36pmEuropean Tour Golf 8pmLive PGA Tour Golf 11pmEuropean Tour Golf 1amPGATour Golf 4amFootball’sGreatest4.30amAerobics Oz Style

5amAirsports World 5.30am-6amKings of the Snow

BRITISH EUROSPORT6.55pmLive Snooker: TheWelsh Open 10pmStrongestMan 11pm Bobsleigh 11.45pmCycling 12.15am-12.50amExtreme Sports: Freeride Spirit

ESPN7pmLive Premiership RugbyUnion: Gloucester v London Irish(Kick-off 7.45pm). 10pm French

Top 14 Rugby Union 11.45pmESPN Kicks: Extra 12am LiveNBA Basketball 2amLive NBABasketball 4amESPN MMALive4.45am ESPN Kicks: Extra5amTotal Italia n Football5.30am-6amFA Cup Preview

SKY LIVING7pmGhost Whisperer 8pmBones 9pmCriminal Minds10pm CSI: Crime SceneInvestigation 11pm CriminalMinds 12amCSI: Crime SceneInvestigation2.40am Charmed

4.20am Four Weddings US5.10am-6am Maury

BBC THREE7pmDoctor Who 7.45pmDoctor Who Confidential 8pmThe Real Hustle on Holiday8.30pm The Lock Up 9pmLittleBritain 9.30pm Lunch Monkeys10pm EastEnders 10.30pmSun,Sex and Suspicious Parents11.30pmHim and Her 12amFamily Guy 12.45amThe LockUp 1.15amLunch Monkeys

1.45am Coming of Age 2.15amSnog, Marry, Avoid? 2.45amHotter Than My Daughter3.15am Sun, Sex and SuspiciousParents4.15am Doctor WhoConfidential 4.30amSnog,Marry, Avoid? 5am-5.30amHotter Than My Daughter

E47pmHollyoaks7.30pm Friends9pmGok’s Clothes Roadshow10pmWife Swap 11.05pmToolAcademy 12.15amScrubs1.10amGok’s Clothes Roadshow

2.05am Wife Swap 3amYoung,Sexy and Cookin’ 3.40am DirtySexy Money 4.25amHow toLook Good Naked 4.50am-6amSwitched

HISTORY7pmHeir Hunters 8pmSwampPeople9pm IRT DeadliestRoads 11pmSwamp People12am IRT Deadliest Roads 2amDisappearingBritain 3amTheRoman Invasion of Britain 4amDecoding the Past 5am-6am

Ancient Discoveries

DISCOVERY8pmHow Do They Do It?8.30pmHow It’s Made 9pmAircrash Confidential 10pmWeird or What? 11pm Survivingthe Cut 12amBear Grylls: BornSurvivor 1amDeadliest Catch2amFuture Weapons 3amTheRussian Revolution in Colour3.50am The First World War4.40am Treasure Quest5.30am-6amHow Does ThatWork?

DISCOVERY HOME &

HEALTH7pmA Baby Story 8pmHowClean Is Your House? 9pmRadical Parenting 10pm Raising10 Kids: The Hayes Way 11pmEmergency: Life in the ER 12amRadical Parenting 1amRaising10 Kids: The Hayes Way 2amEmergency: Life in the ER 3amHow Clean Is Your House? 4amBringing Home Baby5am-6amA Baby Story

SKY17.30pmThe Middle: AccessAll Areas: The making of theAmerican comedy.8pmFuturama 9pmThe Simpsons10pm Louie Spence’sShowbusiness 11pm Got toDance 12.30amRoad Wars 1amInvasion of the Bodyscratchers1.50am Inside: Gangs BehindBars2.40am So You ThinkYou’reSafe?3.30amThreshold 4.20amDon’t Forget the Lyrics 5.10am-6amSell Me the Answer

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 A Question of Sport:BBC News8pm EastEnders8.30pm QI9pm Hustle10pm BBC News

10.25pm Regional News10.35pm The Graham Norton Show11.20pm The National LotteryFriday Night Draws 11.30pmFILMThe Ruins. 2008; Weatherview 1amSign Zone: Horizon: Science UnderAttack 2am Posh and Posher: WhyPublic School Boys Run Britain3am Climbing Great Buildings3.30am Save My Holiday4.15am-6am BBC News

6pm Eggheads6.30pmCHOICEOne Man and His Campervan7pmChurches:How to Read Them7.30pm An Island Parish8pmMastermind8.30pm Britainfrom Above9pm Can’t Take It with You

10pm Fast and Loose10.30pm Newsnight11pm The ReviewShow: Weather11.50pmFILM Sugar:Premiere. Sporting drama, withAlgenis Perez Soto. 2008.1.35amFILM The Damned. 1963.3.10am BBC News 4.15am-6amClose

6pm London Tonight6.30pm ITV News7pm Emmerdale7.30pm Coronation Street8pmChildren’s Hospital8.30pm Coronation Street9pmCHOICE Comedy Rockswith Jason Manford: WithDame Edna Everage, Jason

Byrne, Chris Ramsey and Axisof Awesome. Last in the series.10pm ITV News at Ten10.30pm London News10.35pm The Cube11.35pm Take Me Out12.45am The Zone;ITV News Headlines2.45am October Road 3.30am-5.30am ITV Nightscreen

6pm The Simpsons6.30pmHollyoaks7pm Channel4 News7.25pm 4thought.tv7.30pm CHOICEMade in England8pmRelocation:Phil Down Under9pm Embarrassing Bodies

10pm The Million Pound Drop Live11.20pm 10 O’Clock Live 12.20amMusic on 4: Mercury Prize Sessions12.40am Countdown to the NMEAwards 2011 12.55am CTRL MX1.20am My Name Is Earl 2.05amModern Toss 2.30am Love Tube2.35am Fuel 2.40am What’s Fufu?2.45amFILM Seance on a WetAfternoon. 1964.4.40amBrothers&Sisters 5.25am-6.10am Countdown

6pm Home and Away6.25pm OK! TV7pm Five News at 77.30pm Vets in Action:Five News Update8pm Ice Road Truckers: JackJessee traverses mountainpasses during an urgent fueldelivery; Five News at 9

9pm The Mentalist10pm Law & Order10.55pm NCIS: An assassinthreatens Vance’s family.11.55pm Cops in Crisis12.15am SuperCasino3.55am Motorsport Mundial4.20am Royal Navy CaribbeanPatrol 5.10am Wildlife SOS5.35am-6am House Doctor

23 35

45

3 8 7

6 11

6 10 14

27 14

8 15 13

11 7

5 6 12

45

34 24

12

4

7

41

21

10

9

13

22

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19

9

9

16

17

15

18

40

9

11

13

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 Bulgarian capital (5)

4 Country, capitalCairo (5)

7 Having a striking orrevealing efect (9)

10 Plant similar to therhododendron (6)

11 Finely powderedtobacco (5)

12 Fabric interwoven withthreads o metal (4)

14 Speech deect (4)

16 Chock (5)

18 Enclose in (6)

20 Make merry (9)

21 Mechanical bar (5)

22 Coating (5)

DOWN

1 Lie with one’s limbs

spread out (6)

2 Type o Greek cheese (4)

3 Dave ___, Irishcomedian whodied in 2005 (5)

5 Bend the knees andbow in church (9)

6 Structure supportingthe lower limbs (6)

8 In another location (9)

9 Wash clothes (7)

13 Unit o electriccurrent (6)

15 Like better (6)

17 Twist into a stateo deormity (5)

19 Light and

insubstantial (4)

A

T

I

E

GD

A

L

C

B A R B S F U M E S

N A V A U

A V O N I S L U G

I D E S P O T G

S L O W U V A S E

O A M A Z E S

L O N G L R O O T

O I O D I N E R

M A N N S I R A N

O T E G T

N E H R U A N G E L

2 4 9 3 1 2 4

3 1 7 1 2 3 9

5 8 6 3 9 5

1 2 4 4 8 7 9

5 7 9 6 4 8

2 6 3 4 8 9 7 1 5

5 9 8 6 5 4

1 3 2 6 5 2 4

5 1 8 2 1 3

2 8 9 7 8 3 7

1 7 7 1 4 8 9

WORDWHEELThe nine-letter word was

EASTBOUND

Lifestyle | TV& Games 27CITYA.M. 18 FEBRUARY 2011

8/7/2019 Cityam 2011-02-18book


Punter | Racing


COUNTDOWN TO CHELTENHAM

The David Nicholson Mares’Hurdle on the opening day of the meeting is all about onehorse – Quevega.

Willie Mullins’ hat-trick seek-ing mare is already odds-on withone firm and trading aroundthe 2.1 (11/10) mark on Betdaq.

However, the most intriguingthing about this particular con-test is the lack of opposition tothe favourite.

Only SPARKY MAY seems sure

to line up in less than a month’stime and she will start a lotshorter than the 7.0 currently available. This will allow us totrade in and out before the raceand have a free bet against thefavourite. There was also a severelack of market confidence inQuevega in the 24 hours leadingup to last year’s race and a simi-lar trading pattern will see ourselection shorten even more.

I was really taken by BOSTONS

ANGEL’s win in Ireland last weekend and I just don’t seehow Jessica Harrington’s duelGrade One winner can possibly trade bigger than the 17.0 cur-rently available.

I’d be seriously surprised if hedoesn’t trade in single figurescome the day. Finally, the same

yard’s OSCARS WELL is pressingfor favouritism in the ‘Neptune’and today’s 7.0 will be nearer 4.0on the day.

Join now for a risk free £20 bet and 2.5%commission until March 31st (Betdaq T&CsApply, see site for details.) www.betdaq.com

0870 178 1221

in association with:

RACING TRADER BILL ESDAILE, OUR RACING EXPERT, TAKES A LOOK AT THE BEST BETS OVER THE WEEKEND

NEWBURY gets the chance to stagethe totesport Trophy today follow-ing last weekend’s tragic abandon-ment. Sadly, both the field and the

prize money for the feature race have beendramatically reduced, but my originalfancy SOLDATINO is set to take his chanceand should take plenty of stopping.

Nicky Henderson’s five-year-old was hav-ing his first run since winning last season’s

Triumph Hurdle at Ascot last time andtravelled up sweetly turning into thestraight before eventually blowing upapproaching the final flight. A fast run twomiles on rain softened ground is ideal andthe 11/2 available with Victor Chandlermakes plenty of each-way appeal.

I have plenty of respect for the AlanKing trained pair Walkon and SaldenLicht, but reckon there may be more valuein a small each-way bet on BOTHY. BrianEllison has his string in rude health andconditions look ideal for his charge whoshould be thereabouts if reproducing theform that saw him narrowly beaten in theGreatwood Hurdle on his penultimatestart. He can be backed each-way at 10

with Victor Chandler and fair play to thefirm for paying four places even thoughthere are only 15 runners.

Elsewhere on a cracking card, What A Friend looks to have been given a relative-ly straightforward opportunity in the AONChase, but is sure to be sent off well odds-on. Instead, I’m prepared to wait for I’M-

SINGINGTHEBLUES in the Game SpiritChase. David Pipe’s runner didn’t appearto get home over two miles and five fur-longs on New Years Day having travelledlike the winner to two out. I’m willing toforgive him his last run at Sandown whichcame only a week after that gruelling

Soldatino andCarruthers are

the best betsof the weekend

POINTERS...I’MSINGINGTHEBLUESe/w 1.15pm Newbury (today)

SOLDATINO e/w 1.50pm Newbury (today)

BOTHY e/w 1.50pm Newbury (today)

TARABLAZE 3.00pm Newbury (today)

ERICHT 3.35pm Newbury (today)

CARRUTHERSe/w 3.20pm Haydock (tomorrow)

Cheltenham race.Only four runners have been declared

for the Novices’ Chase and Paul Nicholls’ Aiteen Thirtythree will be a warm order tomake it three from three over fences. He is

without doubt the one they all have to beat, but I’d rather take a chance at theprices on Philip Hobbs’ TARABLAZE. Theeight-year-old may well have only won atwo runner affair on his previous start,

but is held in high regard at home and has been well backed for the RSA Chase inrecent weeks.

Nicky Henderson could round off agreat day with a win in the Bumper cour-tesy of ERICHT. He won this race two yearsago with Mad Max and this son of

Alderbrook was impressive at Huntingdonlast time.

There is some cracking action tomor-row and I’m going up to Haydock for the

bet of the day in the Grand National Trial.CARRUTHERS hasn’t won since December2009, but since then he has finishedfourth in the Gold Cup, second in the tote-sport Bowl and sixth in the Hennessy.Crucially he hasn’t had the soft ground heloves in any of those races, so tomorrow’slikely bottomless conditions at Haydock

will suit him perfectly. He is three fromthree in heavy ground in his career, win-ning by a combined 97 lengths.

8/7/2019 Cityam 2011-02-18book


Punter | Football

29

BEHIND THE LINES

The ICC Cricket World Cup starts tomor-row morning and if England win the tro-phy we’ll refund all losing stakes on theoutright winner as a free bet. Strauss’smen peaked during the Ashes and theirsubsequent 6-1 defeat by Australia in theODI’s means we want to take them on.

It’s an open looking tournament and

although India were beaten in South Africa recently, we definitely want tokeep them on our side. This is the tour-nament they desperately want to winand it could be the perfect ending toSachin Tendulkar’s wonderful career.

With Fernando Torres cup-tied, and

Chelsea not having scored in their last

two league games, we can see Everton being on the receiving end of a backlashat Stamford Bridge in the FA Cup replay tomorrow.

The Toffees have conceded two ormore goals in five of their last six gamesand we expect plenty of interest in the

4/7 about a Chelsea win.


SPORT TRADER OLLIE DREW AND BEN CLEMINSON BRING YOU THIS

WEEK’S BEST CRICKET WORLD CUP AND FOOTBALL BETS

only the second side to triumph on homesoil, after Sri Lanka in 1996.

They too will score runs in favourableconditions, as they proved when notching360/5 in Wednesday’s warm-up againstNew Zealand. India have rotated theirsquad while playing a lot of 50-over cricketin the past year, but with the big gunsreturning they look the pick in whatshould be Sachin Tendulkar’s final WorldCup. No man can match his 1,796 competi-tion runs and a winner’s medal for theLittle Master would be a fitting accompa-niment to his plethora of records.

I also expect Bangladesh to go well. With West Indies looking vulnerable inGroup B, they can spring a surprise and at11/8 stand a good chance of reaching thesecond round.

The Tigers boast the ICC’s number one-ranked all-rounder in Shakib Al Hasan,and Tamim Iqbal, the young batsman whocan cause trouble for anyone. Biggerteams will rest players during the six-

match group stage, but Iqbal can expectplenty of action. He’s prime candidate at5/2 to be top Bangladeshi batsman.

Sporting Index quote Bangladesh’s out-right index at 7-9, a price that shouldtempt buyers who would see a return onany advancement beyond the opening sec-tion.

Sri Lanka have a live chance and thereare worse choices than the 9/2 second-favourites on Betdaq. They will undoubt-edly have their backers, as will the side atthe top of the ICC ODI rankings, Australia,at 5/1 with Victor Chandler. Shane Watson

will take the game to opponents, whileBrett Lee and their pace attack strike fear,

but they could be hamstrung without thequality spin to match.

JUST OVER a month ago and England

were joint-favourites with some lay-ers for the World Cup. They are now out to 17/2 with Victor Chandler and

bookies will happily take your money.Lifting the World Twenty20, their maideninternational trophy, last year and theirrousing Ashes victory in the winter arefading memories after the one day wallop-ing Down Under.

While there are some legitimate excus-es for the series defeat – fatigue and anti-

climax chief among them – a 6-1 scorelineis damning no matter the circumstances.

A rash of injuries have hardly helpedEngland’s cause and, even at long prices, Ican’t get excited about their prospects.

They should progress to the knockoutstages, with India, South Africa, WestIndies, Bangladesh, Ireland andNetherlands for company in the poolphase, but I won’t be buying their Group Bindex at 35 with Sporting Index whichrequires a top-two finish to profit.

It’s unlikely to be England, but this potshould contain the eventual champions.

There’s no denying South Africa’sstrength, especially with the bat, and they are decent value at Victor Chandler’s 5/1.Runs will flow from skipper GraemeSmith and fellow opener Hashim Amla,the highest ODI scorer in 2010, just as they

will from the blades of Jacques Kallis and AB de Villiers. However, The Proteas standaccused of bottling previous World Cupchances and they must rip off their ‘chok-ers’ label.

India are as short as 11/4 with VictorChandler, but they deserve their place atthe head of the market. They co-hostalongside Sri Lanka and Bangladesh, withthe final in Mumbai, and a partisan fol-lowing can help the 1983 winners become

POINTERS...

India to win the World Cup at 3/1 generalBuy Bangladesh’s outright index at 9 withSporting Index

Home comforts point toIndian World Cup glory

P i c t u r e : A C T I O N

THE signings of Fernando Torres andDavid Luiz have hardly had the immediateeffect that Carlo Ancelotti would have

been looking for. A disappointing 1-0 defeat at home by Liverpool was followed by an equally dis-appointing goalless draw at CravenCottage on Monday night. There is a lack of shape to the side and they just aren’tposing a threat going forward.

Everton are in the midst of their own

run of poor form which resulted in DavidMoyes describing the performance atBolton on Sunday as the worst under hisstewardship. The Toffees have won justone of their last six games across all com-petitions and are only three points abovethe relegation zone.

There isn’t much for Everton to play fornow this season and a decent FA Cup runcan at least bring some solace. They actu-ally have a decent record against Chelseaof late, drawing four and winning one of

the last five league meetings. They havealso drawn the last five league contests atStamford Bridge and their only defeatthere in the past five seasons came in thefirst leg of the Carling Cup semi final in2007/08.

I can’t see this one being a thriller as both sides are likely to be nervous. Chelsea

are 4/7 with Victor Chandler, but that’stoo short for me for a side struggling withtheir confidence. I’d much rather back thestalemate at 3/1 with the same firm and it

would be no surprise to see this game goto penalties.

The first match between the sides atGoodison Park finished 1-1 and I fancy arepeat of that scoreline at 7/1 on Betdaq. It

becomes a lottery when you get to extra-time and penalties, although I’d probably fancy the home side to come out on top in

the end. Spread punters are advised to sellgoals at 2.65 with Sporting Index.

TOMORROW – 12.30PM ESPN

EVERTON

CHELSEA

POINTERS...

Draw at 3/1 with Victor Chandler1-1 at 7/1 on BetdaqSell total goals at 2.65 with Sporting Index

8/7/2019 Cityam 2011-02-18book


Carry on swallow diving,Johnson tells star Ashton

Fears grow for Bahrain seasonopener after protester deaths

F1 CHIEF Bernie Ecclestone admitscivil unrest in Bahrain may force himto scrap the first grand prix of the sea-son, which is due to take place therenext month.

Safety fears are growing after ahandful of protesters died in clashes

with police early yesterday, andEcclestone is set to make a decision

within days.“It’s not good, is it?” he said. “We’ll

have to keep our eye on things andmake a decision quickly. I spoke to

the Crown Prince this morning. Hedoesn’t know any more than you or I,

but they’re monitoring exactly whatis going on. Next week we will make adecision on what we are going to do.”

Teams are due to ship their cars toBahrain next week for the final pre-season test on 3-6 March. The raceitself is on 13 March and teams areexpected to discuss their concerns

when they meet in Barcelona today. This weekend’s GP2 event in

Bahrain has been cancelled and Virgin Racing team boss John Booth

said: “It’s obviously very disturbingand there is concern.”

BY FRANK DALLERES

FORMULA ONE▲

Sport30 CITYA.M. 18 FEBRUARY 2011

ENGLAND managerMartin Johnson hasgiven star winger Chris

Ashton the green light tocontinue hiscontrover-sial ‘swal-low dive’celebration.

A s h t o n(right) was warnedabout showboating

before last weekend’sRBS 6 Nations clash withItaly, but defied ordersand dived over the line fortwo of his four tries.

“We are not here to stamp onpeoples’ personalities,” said Johnson.“He is a good guy to have in the

group and he is playing fantastically well. We want him to keep it up. It is

not a big issue for us.” The danger of

celebrating prematurely was spelledout by backs coach Brian Smith, whoshowed the squad a video of ex-London Irish forward JuanLeguizamon dropping the ball mid-dive. Johnson added: “All that wassaid in the team review was: ‘Get the

ball down safely and if you can get itnear the posts, get it near the posts’.Chris did that four times. I preferhim to get the ball down safely andhe has done that.”

Centre Shontayne Hape, meanwhile, has backed his England col-league, saying Ashton has “been toldoff enough times”. He added: “We all

know that if he is going toscore four tries he can do

whatever he wants.”

BY FRANK DALLERES

RUGBY UNION▲

ARSENAL captain Cesc Fabregas has

urged his team to use their watershed victory over Barcelona as the spring- board for success in a four-prongedchallenge for silverware.

The Gunners sent shockwavesthroughout Europe by coming from

behind on Wednesday night to toppleBarca, a team widely regarded as the

best in the world.Manager Arsene Wenger after-

wards said the triumph would have agalvanising effect on his side’s confi-dence as they look to end a six-year

wait for a trophy. And Fabregas believes beating the

Catalans can act as a catalyst for fur-ther improvement as they prepare fora run of games that could make or

break their season.“It was the right result and defi-

nitely uplifting,” said Fabregas. “Weare in the final of the Carling Cup, wehave an FA Cup match coming onSunday and two Premier Leaguegames coming up before the secondleg against Barcelona.

“I’m hoping this win will be goodfor the team because since the new

year we’ve only lost onegame and we’ve wonmost of our games.

Apart from the disap-pointment againstNewcastle we’ve woneverything. At themoment we’re on agood run and we wantto keep it going.”

Arsenal go intoSunday’s FA Cup fifthround fixture atLeyton Orient in scin-tillating form, hav-ing won eight of their last ninegames, the excep-tion being a 4-4draw on Tyneside.

The CarlingCup final againstBirmingham laterthis month iss a n d w i c h e d

between homeleague gamesagainst Stoke andSunderland, before

Wenger’s men trav-el to Spain for the

Fabregas tells Arsenal team-mates to take heartfrom European breakthrough as they get setto resume hunt for domestic glory

second leg of theirlast 16 tie with Barcelona. The Gunners suffered a

drubbing on their last trip toCamp Nou, but midfielder

Samir Nasri, who set up Andrey

Arshavin’s midweek winner, believesthey are now tougher opponents.

“We improved well,” he said. “Weshowed more maturity than last sea-son. We knew if we could put themunder pressure we could get back.”

Fabregas believes Arsenal’slandmark win over Barca was fully deserved

Picture: ACTION IMAGES

Ecclestone is in closecontact with theCrown Prince Picture: PA

Liverpool forced todig deep for draw

LIVERPOOL’S 0-0 draw against SpartaPrague still gives them plenty to do innext week’s second leg of theirEuropa League round of 32 clash at

Anfield.Kenny Dalglish, managing the club

for the first time in Europe, saw Sparta create most of the chances in adisjointed affair. Pepe Reina pulledoff several good saves, but the failureto score a crucial away goal couldprove costly come the second leg.

TOTTENHAM coach Joe Jordan brand-

ed AC Milan captain Gennaro Gattuso“pathetic” for claiming racism playeda part in their fracas in the San Siroon Tuesday.

Gattuso, who claims Jordan calledhim a “f***** Italian b*****”, was yester-day charged with gross misconduct

by Uefa. Jordan said: “To come up with something like that is pathetic.It is completely untrue. It’s so inaccu-rate it doesn’t do him much credit.”

CRAWLEY TOWN boss Steve Evansadmits he will be wracked withnerves when they take onManchester United in the FA Cupfifth round tomorrow.

He said: “I’ll be meeting Sir AlexFerguson at Old Trafford in front of 75,000 Manchester United fans. Of course I’m nervous.”

Jordan blasts Gattuso

over racism claim

Crawley boss jitteryover meeting Fergie

FOOTBALL ROUND-UP

BY FRANK DALLERES

FOOTBALL▲

Boss Hanks leavesoff-form Wasps

FORMER Gloucester and Bristol bossDean Ryan has been touted as a pos-sible replacement for Tony Hanksafter Wasps parted company withthe New Zealander yesterday.

Hanks departs after a run of justone win in six games and a groupstage exit from the Heineken Cup.Head coach Shaun Edwards has beenplaced in temporary charge fortomorrow’s trip to Leicester, but willbe absent the following weekend onWales duty.

Meanwhile, Leeds director of rugbyAndy Key has left the bottom-of-the-table club, with head coach Neil Back

placed in charge.

BARCA WIN IS

OUR CATALYST

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SPORT | IN BRIEF

Watson stumbles in MemphisTENNIS: British number three HeatherWatson’s Cellular South Cup run inMemphis ended at the quarter-finalstage with a 6-3 6-4 defeat by EvgeniyaRodina. The 18-year-old qualifier hadwon four matches to reach the last eightbut was ousted by the Russian.

Nadal targets Davis Cup return

TENNIS: World No1 Rafael Nadal willreturn to Spain’s Davis Cup team next

month for the first time since their 2009triumph to face Belgium. It will beNadal’s first appearance since tearing aleg muscle while losing in the AustralianOpen quarter-finals to David Ferrer.

Hendry rolls back the years with a 147SNOOKER: Stephen Hendry opened hisWelsh Open second round match againstStephen Maguire with a 147 break but

lost 4-2. World champion Neil Robertsonlost 4-1 to Graeme Dott.

Results

email [email protected]

31CITYA.M. 18 FEBRUARY 2011

THE 50-OVER World Cup mighthave lost some of its prestigeand allure as a result of the boom in Twenty20 cricket,

but reports of its demise are greatly exaggerated.

Four years ago in the Caribbeanthe authorities got things badly wrong. Poor crowds, the lack of agenuine threat to Australia and aconvoluted format all contributedto a largely forgettable six weeks.

Thankfully, cricket has moved ona lot in the intervening period and Iexpect this tournament to reigniteinterest in a format of the game which offers a more than happy medium between the glitz of T20and the subtle nuances of Testcricket.

Power-plays and increased field-ing restrictions have added an extratactical element to the game andI’m sure we’re going to see anaction packed tournament, full of attacking cricket. Having said that,pitches in the subcontinent don’ttend to sit hand in hand with fast

scoring rates and sixes galore and with that in mind home advantageis going to prove vital.

Sri Lanka and India, despite theenormous pressures they’ll beunder to perform, will take some beating and what better way couldtheir be for true champions likeMuttiah Muralitharan or Sachin Tendulkar to enhance their legaciesthan by walking off into the sunset with a World Cup winners’ medal.

As great as it is to see the oldstagers having one last hurrah,cricket is in need of a new crop of superstars and the World Cup couldpropel the likes of Virat Kohli, a typ-

ically gifted, wristy Indian strokeplayer, or Sri Lanka’s artful spinner Ajantha Mendis to that next level.

Having praised the authoritiesfor tinkering with the format, I would, however, have to questiontheir desire to include so many associate nations. I don’t see thepoint of their presence. What arethe likes of Canada and Irelandgoing to bring to the party?

True, there were some hugeupsets last time around, but I don’tsee any chance of a repeat this timeand taking a series of hefty beatingsisn’t going to aid the developmentof these smaller nations.

Ignore doom merchants,World Cup still matters

CRICKET COMMENT

ANDY LLOYD

Electrocution caused Newburyhorse tragedy, probe confirms

THE DEATHS of two horses atNewbury last Saturday were caused by “accidental electrocution”, a

British Horseracing Authority (BHA)investigation confirmed yesterday.Fenix Two and Marching Song died

in the paddock area before the firstrace, which was run before theremainder of the meeting was aban-doned, and post-mortems revealed both suffered heart attacks. An elec-

tricity cable which ran beneath theparade ring has since been discon-nected and removed.

Professor Tim Morris, director of equine science and welfare for theBHA, said: “The authority has been

officially informed that there wasleakage of electricity from a cableunder the parade ring. The post-mortem examinations showed sud-den cardiac arrest as the cause of death. These findings are all consis-tent with the cause of death beingaccidental electrocution.”

BY JAMES GOLDMAN

HORSE RACING▲

NEED TO KNOW | 2011 CRICKET WORLD CUP

Where is it?The tournament is being staged in 13cities across three countries: India,Bangladesh and Sri Lanka.

When is it happening?From 19 February to 2 April. In otherwords, the opening group matchbetween India and Bangladesh startstomorrow morning, and the finaltakes place exactly six weeks later.

Is it on TV?Sky Sports has live coverage, whilethe BBC is showing highlights whichwill also be available on its website.

Competition formatThe 14 teams are divided into twogroups, in which everyone playseveryone. The top four from eachgroup enter the quarter-finals, whereit becomes a knockout tournament.

The groupsGROUP A: Australia, Pakistan, NewZealand, Sri Lanka, Zimbabwe,Canada, KenyaGROUP B: India, South Africa,England, West Indies, Bangladesh,Ireland, Netherlands

England’s group matchesv Netherlands, Tuesday 22 February,play starts 9am GMT, Nagpur

v India, Sunday 27 February, playstarts 9am, Bangalore

v Ireland, Wednesday 2 March, play

starts 9am, Bangalore

v South Africa, Sunday 6 March, playstarts 4am, Chennai

v Bangladesh, Friday 11 March,play starts 8.30am, Chittagong

v West Indies, Thursday 17 March,play starts 9am, Chennai

Knockout stageQuarter-finals1. A1 v B4, Friday 23 March, playstarts 8.30am, Mirpur2. A2 v B3, Saturday 24 March, playstarts 9am, Motera3. A3 v B2, Sunday 25 March, playstarts 8.30am, Mirpur4. A4 v B1, Monday 26 March, playstarts 9am, Colombo

Semi-finalsWinner QF1 v Winner QF3, Thursday

29 March, play starts 9am, ColomboWinner QF2 v Winner QF4, Friday 30March, play starts 9am, Mohali

Final, Saturday 2 April, play starts9am, Mumbai

Strauss at theWorld Cup opening ceremony

Pic: PA

Cheapest public seat

for final to cost £163EUROPEAN chiefs last nightdefended ticket prices for theChampions League final afterrevealing that the general public will have to pay £163, at the very least, to attend the Wembley showdown in May.

Governing body Uefa has setaside 11,000 tickets for generalrelease, with prices ranging from£150 to £300. Fans are limited to buying a maximum of two ticketsand all purchases will be subjectto a hefty £26 administration fee.

Someone, therefore, wishing topurchase two Category Three tick-ets would incur a cost of £326 at£163 per ticket. The prices for thecheapest tickets on offer repre-sent a significant 13 percent hikefor a comparable seat at last year’s final in Madrid. Clubs that

reach the final will receive anallocation of 25,000 tickets each,priced at £80, to sell on to theirsupporters.

But Uefa’s director of competi-tions, Giorgio Marchetti, said theprices were in line with otherhigh-profile events such as the World Cup final.

He said: “We don’t think thatthe Champions League final isoverpriced. We do not want tosqueeze every single penny out of the market.

“We have to benchmark thisevent against other comparableevents, like for example the finalof the European Championshipand the World Cup.

“Last year there was already asignificant increase compared tothe previous editions but it’snothing to do with being inLondon and it is still priced below comparable events.”

BY JAMES GOLDMAN

FOOTBALL▲

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