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FTSE 100 5,714.94 +16.13 DOW 12,004.36 +42.84 NASDAQ 2,616.48 -7.22 /$ 1.62 unc / 1.13 -0.01 /$ 1.43+0.01

Minister:mass strikeis mistake

A MASS walkout by public sector workers would be a colossal mis-take, according to Treasury ministerDanny Alexander.

Unions are threatening to stagethe biggest strikes in nearly a centuryover public cuts and pension reforms.

Alexander sparked the strikthreats last week with his announce-ment that public workers will have to

work later in life and pay more fortheir pensions, despite talks on theproposed changes still taking place.

The Lib Dem MP says the coalitionmust push ahead with the pensionreform but said exact changes arestill up for discussion.

Shadow chancellor Ed Balls alsowarned trade unions against takingstrike action.

He said the walkouts, which couldbe the most severe industrial actionsince 1926 when millions joined anine-day general strike in support ofcoal miners, would play into thehands of chancellor George Osborne.

He accused the chancellor of lay-ing a trap for the unions, whichcould be used as a scapegoat shouldthe economy falter.

About 750,000 workers, includingteachers and job centre staff, havealready said they will stage coordi-nated action this month. Tube work-ers also began a planned wave of

walkouts last night, although theeffect on passengers was said to beminimal.

UNDERGROUND STRIKES: P2

BYSTEVE DINNEEN ANDRICHARD PARTINGTON

UK ECONOMY

www.cityam.comIssue 1,406 Monday 20 June 2011 FREE

RORYS USOPEN GLORYMCILROY WINS IN

WASHINGTON BY

A LANDSLIDE P30

AT LAST: WE REVEAL WHOHAS MADE OUR SHORTLISTTODAY: FIRST FIVE STARS AWARDS: P18

BUSINESS WITH PERSONALITY

Certified Distribution

02/05/11 till 29/05/11 is 103,467

ALL eyes are on Luxembourg thismorning as the Eurogroup meetsfor a second day of crucial talks tothrash out another bailout forGreece, which needs an estimated90-120bn (80-97bn) to avoid abankruptcy that would bring downthe euro.

As Eurozone ministers threat-ened to withhold half of the next12bn tranche of Athens aid,which the sovereign needs to see itthrough July, protestors continueto occupy the streets in oppositionto the austerity measures that par-liament must pass to qualify forthe money.

There was some optimism afterGerman Chancellor Angela Merkeland French president NicolasSarkozy staged a show of unity onFriday, confirming that theEurozones paymaster states areready to inject the necessary aid toavoid a Greek default.

Merkel also gave way on a keyissue, saying that a mild voluntaryrollover of private-sector debt

would be enough to satisfy Berlinsdemand for burden-sharing.

But the terms of any new bailout

are still proving difficult to agree,with the ECB against any form of

burden-sharing.Ministers have not even agreed

what form the new bailout shouldtake. Initial suggestions thatEurozone states and the IMF

would simply extend the 110bn ofbilateral loans they made for the

first bailout have given way todiscussions about using the

European Financial StabilityMechanism (EFSM), which theUK guarantees to the tune of 13.5per cent.

The aid is also dependentupon Greece voting throughanother batch of austerity

measures, including a

50bn pri- vatisation scheme. A recent poll

shows that Greeks are sharplydivided over the austerity meas-ures, with 47 per cent against and35 per cent in favour.

Yesterday Mayor of London Boris Johnson said Greece should beallowed to go bankrupt and should

withdraw from the euro.MORE ON GREECE: P2, P3

CRUNCH TIME FORSTRICKEN GREECEBY JULIET SAMUEL

EUROZONE

Greek finance minister Evangelos Venizelos in talks with French finance minister and IMF chief hopeful Christine Largarde yesterday

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News2 CITYA.M. 20 JUNE 2011

C&WW eyedfor its assetsCABLE & Wireless Worldwide(C&WW) could sell its internationaloperations as it seeks to focus on itscore UK business.

The telecoms operator is under-stood to have received an informaloffer of $500m (309m) from HongKongand Singapore-based Pacnet.

The C&WW board is expected toconsider the offer this week as itundertakes a wider review of thegroups operations.

C&WW and Pacnet both declinedto comment. Tata Communications,part of Indian Tata Group, may also be interested in the internationalbusinesses, according to a report inthe Financial Times.

C&WW, which generates around aquarter of its revenues from abroad,

has been rocked by two profit warn-ings since it demerged from the for-mer Cable & Wireless Group in2009.

However, it announced lastmonth it has turned cashflow posi-tive for the first time, reporting freecash flow generation of 61m.

It is understood to be in prelimi-nary talks to buy London-based-cloud services firm 2e2 in a dealthat could be worth 400m. C&WWis keen to bolster its cloud servicesto offer a more complete package toits clients.

BY STEVE DINNEEN

TELECOMS

States now the top systemic threat

SO no solution was found to theGreek crisis last night we will haveto wait a little longer before findingout what sort of fudge our leadershave in mind for the Eurozone, andhow much taxpayer cash they arepreparing to throw at the bottomlesspit that is Greece. The markets, need-less to say, will recover a tad if andwhen a deal is f inally announced, buteverybody knows that handouts willonly buy time. The real problem isthat the Greek public doesnt reallywant to change and simply doesntaccept economic reality and that

the EU has been too slow to learn thelessons of the crisis of 2008.

One poll found that 47 per cent ofGreeks reject the austerity plan andwant new elections and just 35 per

cent back the measures. The Greekpublic is in denial: it doesnt want tostart living within its means and yetordinary hard-pressed taxpayers inother countries are being called uponto stave off Greeces total collapse.There is no justice in that. There was,of course, no justice in bailing outWestern f inancial institutions either,but at least it was domestic taxpayershelping domestic institutions.Governments got stakes in return,which lessened or eliminated the costof the handout. Shareholders werewiped out, though bondholders anddepositors survived. The main justifi-cation for those bailouts was thatthere was no Plan B: regulators hadfailed to come up with an up-to-datebankruptcy code to tackle institutionswith massive balance sheets, allowingthem to fail in an orderly manner and

hence protecting taxpayers. Everybodyis now working on such schemes, which will re-inject capitalist disci-pline and ensure that losses as well asprofits are privatised but unfortu-

nately none are ready for the loomingsovereign debt crisis. This is a tragedy.Had populist European politicians notspent the past three years crackingdown on the wrong things (hedgefunds, private equity, bonuses, univer-sal banks), they might have had a bitmore time to actually improve theresilience of their financial systems.

Greeces bailout has three func-tions: to save the euro; to preventGreeces collapse; and to bail out indi-rectly the banks, insurance compa-nies, pension funds and others whoown at-risk Eurozone sovereign debt. Yet the euro is unsustainable andGreece cant be saved against its ownwill. But the biggest error is the estab-lishments inability to accept thatincreasingly, the biggest systemic risk will come from states, not privatefinancial institutions. It is not just

Greece, Portugal and Ireland Belgium is in real trouble, while Spainand Italy are also in the frame. Atsome point, something will have tochange in Japan, a country with an

exploding national debt and a weakeconomy. America is also in terribletrouble, and not just because of short-term issues over debt ceilings.

Far from being the answer to every-thing, governments are the worldsbiggest problem. Just like banks, statesneed to be allowed to go bust in anorderly manner. So heres an idea: weneed a new bankruptcy code for coun-tries. There is no time to lose.

FINDING THE CITYS STARSLights, camera, action: after deliberat-ing for weeks, we are delighted to beable to reveal the shortlists for CityA.M.s 2011 awards. Turn to p18 for thefirst five names; and from tomorrowwe will be releasing the shortlists fortwo additional categories every day.

[email protected] me on Twitter: @allisterheath

RMT union tube drivers walked outlast night in the first part of a freshwave of planned strike action.

The strike, which started at 9pm,lasted six hours, with drivers back intheir cabins by this morning.

A Transport for London spokesmansaid very few passengers were affect-ed by the walkout, with some delaystaking place but all customers able tocomplete their journeys.

The action did not affect plannedengineering works.

An RMT spokesman told City A.M.the walkout was well supported by itsmembers and he expected it to havean impact on the underground net-work.

Three more strikes covering 27 June, 30 June and 1 July have alsobeen announced by the RMT union,which could cause far more disrup-tion to the system.

The dispute centres around thesacking of a union activist.

BY STEVE DINNEEN

TRANSPORT

Tube strike action beginsRMT boss Bob Crow says the union will take further strike action

NEWS | IN BRIEF

PNC to buy RBC retail bankingPNC Financial Services Group is expect-ed to buy Royal Bank of Canada's USretail banking operations in a deal wortharound $3bn ( bn), according to aBloomberg report. RBC, the largestCanadian bank by assets, put its strug-gling US consumer banking business on

the market after failing for years towring profits from the operationsacquired nearly a decade ago. PNC andRBC both declined to comment.

Womens pension age rowMinisters are expected to delay anincrease in the retirement age forwomen after a campaign from LiberalDemocrats, Labour and trade unions.The government was told to revise thetimetable, with 176 MPs signing an earlyday motion.

Sharp drop in household financeHouseholds are facing the biggest dropin their finances in two years, accordingto the Markit Household Finance Index.The poll slumped to its lowest level sinceMarch 2009. Six times as many house-holds saw finances drop from May andJune as saw them rise.

EDITORS LETTER

ALLISTER HEATH

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

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowNight Editor Katie HopeBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alice HeppleCommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

Head of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

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

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

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

Cable & WirelessWorldwide chief execu-tive Jim Marsh has seenthe company becomecash flow positive

SMALL AND MID-CAP BROKERS SHINEIN ANNUAL RANKINGSSmall and mid-cap brokers have out-shone their larger competitors instockpicking, according to the latestFT/StarMine rankings. Of the top 10stock-pickers in the UK and Ireland led by Richard Slape, energy analystat Canaccord Genuity with his call onRockhopper Exploration seven arefrom small and mid-cap brokers. Thiscould indicate that rating stocks playsto the strengths of the smaller outfits.

BBC GOES TO HOLLYWOOD The BBCs commercial division isstepping up its efforts to become abig player in Hollywood after sellingmore than 20 scripted drama proj-ects to US broadcasters and cablenetworks. BBC WorldwideProductions, a division of BBC

Worldwide, declined to comment onthe value of the deals.

SUPERGROUP SEEKS TO RALLY SUP-

PORT FOR SHARESSuperGroup will on Monday attemptto revive support for its shares at ananalyst and investor event staged atthe fashion chains Cheltenham head-quarters. Since the owner of theSuperDry and Cult brands floated at5 a share in March 2010, raising120m, its shares have gone in andout of fashion.

SOUTHERN CROSS LANDLORDS IN CONTROLBefore Southern Crosss restructuringagreement with its landlords lastWednesday, the public spent weekswaiting for news of its fight againstinsolvency. Public statements byBritains biggest care home operatorwere light on detail and did little toallay concern about its 31,000 resi-dents. However, a report written on27 May by Southern Crosss adviserKPMG, called Project Baseball, set out

a detailed plan for a potential six-month insolvency process.

BRITAIN NOT OPEN FOR BUSINESS, SAYVOTERSBritain has a worse tax regime thanFrance, India and China, according toa Populus poll for The Times thatreveals the scale of the challenge fac-ing the government on growth. TheUK has been ranked bottom of six keycompetitors on personal and businesstaxation in a poll of voters that sug-gests they do not yet regard Britain asbeing open for business.

A TESTAMENT TO MANS WILLING-NESS TO CON HIS FELLOW MANIts a service many wrongly assume to be highly regulated and carefullypoliced. But the will-writing industryhas been entirely unregulated andanyone can set themselves up as a will-writer until now. The LegalServices Board, which regulates

lawyers in England and Wales, is step-ping up a probe into the sector.

GEORGE OSBORNE PLOTS 7BN PEN-SIONS RAID ON BETTER OFFDiscussions have begun at theTreasury over the move which wouldsee the axing of tax relief currentlypaid out on pension contributions bypeople who pay income tax at thehigher rates of 40 per cent and 50 percent. The money saved could gotowards cutting the budget deficitor in what would be a more political-ly popular decision be used to pro-vide a significant increase to the valueof the basic state pension.

NATO ADMITS CIVILIAN DEATHS The fragile alliance targeting ColMuammar Gaddafi is under strainafter Nato yesterday admitted that itsbombers had missed a military targetto kill a number of civilians in Tripoli.The Gaddafi regime has seized on the

casualties, said to be nine people,including at least two young children.

HELICOPTERS NEED FOR SPEEDRivals Eurocopter, US-based Sikorskyand other companies are testing fasthelicopter prototypes. Eurocopters X3is set to make its public debut today atthe Paris Air Show. The companieshope that increasing range and boost-ing maximum speed to as fast as 280miles per hour from about 175 mphwill spark increased use as emergencyvehicles and as transportation for exec-utives and workers in remote loca-tions.

BERLUSCONI ALLY ISSUES DEMANDSFOR CONTINUED SUPPORTPrime Minister Silvio Berlusconis keypolitical ally demanded that Italys beleaguered leader make key policychanges, including cutting taxes andpulling Italian forces from the warLibya, but indicated he would keep the

countrys conservative governmentafloat for now.

WHAT THE OTHER PAPERS SAY THIS MORNING

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GREEK Prime Minister GeorgePapandreou was last night battlingto hold the country together aspolitical fighting and civilunrest threaten to tear it apart.

He pleaded with the Greekparliament to back his govern-ments plans to tackle the gap-ing hole in the countrysfinances.

Opposition toPapandreous Socialistparty, as well as rebel-lious internal factions,have signalled they areunwilling to supportdeeply unpopular taxhikes, spending cuts andprivatisation plans.

Papandreou said theentire country is at riskof going bankrupt if itis not allowed to drawdown a 12bn(10.6bn) tranche of its bailout, which isdependent on Greecefollowing through withtough austerity meas-

ures.He said: The consequences of a vio-

lent bankruptcy or exit from the euro would be immediately catastrophicfor households, the banks and the

countrys credibility.The country finds itself at a

critical crossroads. I am seekinga national consensus to addressthe problems of the debt andthe budget deficit. Our problems

wont be solved by sending awaythe IMF or our European partners.

Meanwhile civil unrest contin-ued to boil over into violence inthe streets of Athens, with Greeksunwilling to accept the bitterfinancial medicine.

Opposition leader AntonisSamaras has demanded

Papandreou steps down to pavethe way for early elections

and a renegotiation of theterms of Greeces current

bailout.However, analysts

are confidentPapandreou, whoseparty has just a six

seat majority, will survive a voteof confidence scheduled fortomorrow.

Papandreou

pleads forGreek unity

THE Eurozone is likely to be bro-ken up within the next five years as southern Europeancountries struggle to grow aspart of the single currency, anew forecast from an econom-ics consultancy will claim today.

Analysis from CEBR willshow that without a euro

break-up, growth in southernEurope including Spain,Portugal and Greece will bebelow 1.5 per cent in every yearto 2015.

The latest forecasts came asEuropean finance ministersdebated the structure of apotential 120bn (106bn) res-cue paskage for Greece, whichis widely expected to be thefirst country to exit the euro as

it struggles to remain compet-itive amid stringent austerityreforms.

Sooner or later both theGreek population and interna-tional creditors will tire offighting a losing battle, leadingto a break-up of the currency asGreece pulls out, probably fol-lowed by other countries, saidDouglas McWilliams, chiefexecutive of CEBR.

Euro will break up in nextfive years, economists say

BY STEVE DINNEEN

EUROZONE

BY ELIZABETH FOURNIEREUROZONE

News 3CITYA.M. 20 JUNE 2011

GREECE ON THE BRINK

Q.WHAT IS HAPPENING TODAY?

A.There are two major EUannouncements that markets areawaiting: agreement by the Eurozoneand IMF to pay the next installment ofGreeces original rescue, whichamounts to12bn; and an agreementamong EU member states and institu-tions as to what form a new bailoutwill take. Eurogroup and EU financeministers are meeting today to try andwork out a second bailout deal, whichwill be rubber-stamped by EU leaderson Thursday and Friday if all goes toplan.

Q.SO GREECE AND THE EURO ARESAFE IF THEY STRIKE A DEAL?A.Far from it. Even if the EU canagree to the terms of a new res-cue, it will be conditional uponAthens accepting another round of

austerity cuts. WithGreek Prime MinisterGeorge Papandreouscrambling to find the support need-ed, that is by no means a given. Thecurrent package, which does not havethe support of most Greeks accordingto recent polling, already requires thestate to sell off50bn worth of assets.

Q.HOW MUCH IS THE UK ON THEHOOK FOR IN A NEW RESCUE?A.It is still not clear. The UK Treasuryinsists that we will not pay for anew Greek bailout except through theIMF, whose loans we guarantee to thetune of five per cent. But if the EUvotes to use the European FinancialStability Mechanism to pay for the res-cue, we will be underwriting 13.5 percent of the rescue. The problem is that

Eurozone member states outnumbernon-euro states in the voting.

Q A&

Riot police face off against protestors in Athens yesterday Pictures: GETTY

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US PRIVATE equity giant Blackstone isin line to receive an information mem-orandum on Northern Rock, makingthe firm one on a short list of potential buyers for the nationalised lenderwhen it is auctioned later this year.

A source familiar with the mattertold City A.M. that Blackstone willrequest the memorandum, due to be

sent out in the next few weeks, whichwill detail what assets are to be sold inthe first step towards tabling a possi-ble bid for the bussiness, expected tofetch around 1bn.

However, the source cautioned thatBlackstone looks at many deals every year and that the process is in veryearly stages.

Blackstone has been named beforeas a possible buyer of the Rock beforethe financial crisis, when it was said to

be considering a tie-up with VirginMoney. But it is understood that thistime around, Virgin sees itself as ableto swallow Northern Rock withouthelp and would only seek a partner tobuy the 632 Lloyds branches on sale.

Should an appropriate suitor forNorthern Rock fail to materialise, thegovernment has not ruled out a float,but is at present only actively pursuinga sale. UKFI and Blackstone declined tocomment.

SANTANDER UK has pencilled in itsfloat for early November of this year,City A.M. understands, despite marketturbulence and low industry valua-tions.

The bank has scheduled a series ofinvestor meetings for 27-28 September,in which analysts will meet and askquestions of the banks new seniormanagement team for the first time.

After the meeting, analysts will pro-duce research to inform the pricerange given on an Intention to Float

document (ITF), after which the bankwill have around four weeks for book-

TENS of thousands of Spaniards tookto the streets yesterday to protestagainst austerity measures. soaringunemployment and the handling ofthe economic crisis.

Protestors calling themselves theindignados the indignants havebeen demonstrating since before theregional elections on 22 May, claim-ing they have been let down by politi-cians. Yesterday numbers swelled toup to 100,000 across the country, asthe message spread by social network-ing channels, with many now threat-ening general strikes.

A massive crowd converged nearSpains parliament in Madrid, but was blocked by police barricades.Despite the numbers, protestors werekeen to avoid violence, after a demon-stration in Barcelona last week endedin angry clashes.

The protests largely concentratedon the Euro Pact, agreed by Eurozone politicians to stimulate competi-tiveness across the bloc. In Spain thishas prompted reforms to give compa-nies greater power to hire and fire.

The political leaders of the Eurozones fourth largest economy have worked hard to convince investorsthe country will not follow Greece,Portugal and Ireland in needing abailout.

But Spaniards say while this has been happening, their own worriesare being ignored.

Unemployment has soared to 14-year highs and almost half of under-25s are out of work. Banks have cutoff credit lines, consumer prices arerising faster than the regional aver-age, investment has been slashed andhouse prices have plummeted.

Meanwhile, the government hasspent the last two years passing billsto keep wage rises to a minimum,lengthen working lives, abolish wel-fare payments and increase taxes.

Im here because this is a con,said Juanjo Montiel, 26, one of four blind protestors in Madrid, whoworks in Information Technology foraround1,000 a month.

Im lucky enough to have a job,but many dont and have no chance. And on top of that, the politicianswant to make more cuts. This is notour fault, its the system.

Spanish take

to streets inmass protest

building. The timing will give investors and

analysts two weeks to digest theimpact of the final recommendations by the Independent Commission onBanking (ICB), due to report on 12September.

No final decision is likely to be madeon the float until the end of the sum-mer but investment banks are gearingup to pitch for the float, with Bank of America/Merrill Lynch said to be inpole position.

BoA/ML is currently advising along-side JP Morgan and Santander Spainon the float of Santander Rio on the

New York Stock Exchange, which isexpected to raise about $100m (61m).

Santander UK still planning Cityfloat this year despite uncertainty

BY JENNY FORSYTH

WORLD ECONOMY

BY JULIET SAMUELBANKING

BY JULIET SAMUEL

BANKING


Blackstone to investigateNorthern Rock acquisition

Northern Rock chairman Ron Sandler will see the bank auctioned off. Picture:REUTERS

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5 forexpairs

from 1 pip

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FERROVIAL, the Spanish infrastruc-ture firm, is in talks with an

American investor to sell 10 per centof its shareholding in BAA.

The Madrid-based firm, whichholds a 56 per cent stake in the ownerof Heathrow and Stansted,announced in October last year that it

was putting a minority stake up forsale so that it can pay down its corpo-rate debt pile.

According to City A.M. sources,

Alinda Capital Partners, the infra-structure investor, as well as otherpension and sovereign wealth funds,have expressed an interest in thestake.

Alinda was founded in 2005 byCitigroup banker Christopher Beale.

The firm, which also owns SouthStaffordshire Water, already has asmall interest in the business after co-investing alongside CDPQ, aCanadian pension fund, which holds26 per cent in BAA. The remaining 18

per cent is owned by Singaporesinvestment arm GIC.

The sale will help Ferrovial to paydown its 10bn debt mound, built upas part of its initial acquisition of BAAin 2006.

The firm was also forced by regula-tors to sell off Gatwick airport for1.5bn to increase competition in themarket.

Chief Executive igo Meirs saidrecently: We would like to underlinethat our commitment as a long terminvestor in BAA remains in place.

Yesterday Ferrovial did not comment.

US group intalks to buyBAA stake COMPANY bosses, including thoseworking at the highest level in chiefexecutive or managing directorsoffices, are increasingly committing

more fraud, according to a report outtoday.

The survey by accountants KPMGfound that board members at divi-sional, subsidiary and corporate levelacross the world commit nearly onefifth of all fraud cases.

The level has increased from 11 percent of all white collar crimes in 2007,to 18 per cent this year.

The report analyses the pattern offraud from 348 sample cases across 69countries in which KPMG has investi-gated for its clients.

About 40 per cent of cases in thesurvey involved males between theage of 36 and 45 years old, with the

typical fraudster often working in afinance-related role.More than 50 per cent of cases sur-

veyed involved a senior manager orboard member.

Richard Powell, UK forensic partnerat KPMG, said: It is pretty surprisingthat companies have significantlyfailed to respond to warning signs,particularly in light of the recession.

The need to ensure that areas sus-ceptible to fraud risks are properlyidentified is paramount.

A RECORD 200-plane order fromAsias biggest budget airline looks setto dominate a windfall of deals at this

weeks Paris Air Show.Air Asia, run by Malaysian business-

man Tony Fernandes, is understoodto be finalising a $17bn (10.5bn)order for 200 A320 planes from

Airbus, according to a Sunday paper.The order, expected to be unveiled

on Thursday at the end of the Paris Air Show, will break the record forthe largest number of aircraft sold inone contract.

Former Warner music executiveFernandes bought the airline in 2001for a mere 25p from the MalaysianGovernment. AirAsia now flies 30mpeople a year to more than 20 coun-tries. In May it reported a 46 per cent

year-on-year rise in operating profit of241.72m Malaysian ringgit (49.2m).

EADs Airbus declined to comment.

Fraud involvingcompany headson the increase

AirAsia expected to buy200 Airbus A320 jets

Tony Fernandes, chief executive of AirAsia Picture: REUTERS

BYKASMIRA JEFFORD

AVIATION

ENFORCEMENT

BYKASMIRA JEFFORDAVIATION

ANALYSIS l Ferrovial

6 Apr 26 May 16 May 3 Jun

9.6

9.2

8.8

8.4

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THE MAJORITY of the City isagainst the coalition govern-ments plans to increase interna-tional aid contributions by athird, according to the results ofour latest Voice of City poll, runin association withPoliticsHome.com.

Despite 67.1 per cent of respon-dents saying they were very

favourable or somewhatfavourable towards the princi-ple of international aid, morethan 55 per cent felt either veryunfavourable or somewhatunfavourable towards proposalsto increase the UKs internation-al aid contributions to 0.7 percent of GDP in line with aUnited Nations aid agreementmade in 2005.

Despite the negative sentiment

towards increasing the UKs aidspending, more than two-thirdsof those polled said they were

broadly in favour of the principleof international aid.

Twenty-seven per cent ofrespondents are veryfavourable towards the princi-ple, with a further 40 per centciting themselves as somewhatfavourable.

The UKs commitment toincrease contributions to fund-

ing for vaccine programmes gota more positive response, afterPrime Minister David Cameron(pictured, right) promised anextra 814m by 2015 at last

weeks Gavi pledging conference. Thirty-four per cent of our

panel strongly approved of theincreased in vaccination fund-ing, with a further 29.6 per centsomewhat agreeing with the pol-icy.

MORE TRANSPARENCYSeveral members of the panelcalled for greater transparencyon how the UKs aid contribu-tions are used, with one say-ing: A concise independentreport detailing the objectivesof the programmes, how themoney is being spent, howmuch ends up in the wronghands, what is achieved and howthe UK benefits as a result wouldhelp people make more

informed decisions. The government

is hoping that anew independentc o m m i s s i o nunveiled last year

will answer thedemand forgreater scrutinyof how interna-tional aid is distrib-uted.

The Independent Commissionfor Aid Impact was formed in

October last year, and willreport regularly using ause a traffic light systemto rate the effectivenessof aid programmesaround the world.l City A.M. and

PoliticsHome inter-viewed 443 mem-

bers of the Voice of the

City panel byemail lastweek.

Membershave beens p e c i a l l y recruited torepresent a

cross section ofLondons finan-cial and businesscommunity.

PoliticsHome.comPoliticsHome.com

The Prime Minister announced last Monday that the UK is contributing 814m of new fundingfor vaccines for over 80m children in developing countries in a bid to save 1.4m lives by 2015.Do you approve or disapprove of this decision?

Strongly approve

Somewhat approve

Neither approvenor disapprove

Strongly disapprove

Somewhat disapprove

Dont know

0.2%

29.6%

%

14.2%

34.3%

13.8%

7.9%

Neither favourablenor unfavourable

Very favourable

Somewhat favourable

Very Unfavourable

Dont know

SomewhatUnfavourable

0.2%

Generally speaking, how favourable or unfavourable are you towards theprinciple of international aid?

%

27.1%

40%

7%

14.2%

11.5%

Somewhat favourable

Very favourable

Somewhatunfavourable

Neither favourablenor unfavourable

Very unfavourable

Dont know

The government has promised to increase its international aid budget by one third to 0.7% ofGross National Income (GNI), in line with international agreements signed many years ago.How favourable are you towards this policy?

%36.6%

18.5%

20.8%

16.9%

7.0%

0.2%

Apply to join today at www.cityam.com/panel

In association with PoliticsHome.com

City panel says UK should not lift aid fundsBY ELIZABETH FOURNIER

POLITICS

Sponsoredby

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A JAPANESE trading conglomerateis the latest firm to consider leav-ing its oilfield in the North Sea fol-lowing George Osbornes 12 percent tax hike on the industry.

Marubeni Corporation has putup for sale all but one of its NorthSea oilfields, according to a week-end report. It is said to have hiredStandard Chartered to find a buyerfor a group of fields worth $100m(62m).

North Sea oil firms wereshocked in March when the

Chancellor George Osborneannounced a surprise tax hike onoffshore fuel explorations. Theadditional $2bn tax on the sector,raised from 20 to 32 per cent, hasspurred many top firms to re-evalu-ate whether it is worth investing indeveloping new fields.

Some oil fields, which pay petro-leum revenue tax as well as corpo-ration tax, face a marginal tax rateof 81 per cent.

Centrica said in March it wasconsidering shutting down opera-tions in Morecambe Bay, Britainsbiggest gas field, which closed in April for maintenance work.

Statoil also cancelled two of it proj-ects worth $10bn.

City A.M. was unable to reachMarubeni for comment.

Marubeni considersNorth Sea retreatBYKASMIRA JEFFORD

OIL & GAS


NEWS | IN BRIEF

Premier in bid for BP fieldBritish oil firm Premier Oil has madean offer to buy BPs stake in theWytch Farm oil field in south westEngland, according to weekendreports. BP said in May it had agreedto sell its interests in Wytch Farm andsurrounding oil fields in Dorset to pri-vately-held Perenco in a $610m(376m) deal, a sale which is subjectto partner pre-emption rights. Premieris the second largest partner in WytchFarm behind BP.

More tech firms vie for NortelApple, Intel and Ericsson are vying,along with Google, to buy patentsfrom bankrupt telecom maker NortelNetworks in a sale slated for later thismonth. Nortel announced it wasdelaying the sale of about 6,000patents and patent applications untilJune 27 after the Canadian companysaid previously it would hold the saletoday. Patents include intelligence onwireless internet technology and socialnetworking.

Airbus pulls plane from displayPlane maker Airbus said yesterday itwas pulling one of its flagship double-decker A380s out of a flying display atthe Paris Air Show, compounding aseries of embarrassing hiccups for theEADS (EAD.PA) unit at this year's big-ticket industry event. The right-handwing-tip of the A380, the world'slargest jetliner with a wingspan ofalmost 80 metres (yards), touched astructure at the Le Bourget airportduring ground manoeuvres.

MORE NEWSONLINE AT

www.cityam.com

ANALYSIS l Marubeni

Apr May Jun

600

575

550

525

500

52117 Jun

TIME LINE | THE NORTH SEA TAX EXODUS

23 March 2011In his budget, Osborne announces asupplementary tax on North Sea oilfirms, meaning rate will rise from 20per cent to 32 per cent.

29 March 2011Norwegian oil company Statoil sus-pends development work on its $10bn(6.2bn) Mariner and Bressay fields,south-east of Shetland, to reviewwhether investment after the tax hikeis still worthwhile.

30 March 2011Gas giant Centrica, oil explorerValiant and French group Total

announced that they are reviewingcurrent and future investments inthe North Sea.

17 April 2011John Watson, the chairman and chiefexecutive of US energy companyChevron, criticises North Sea oil taxrise saying it made Britain oneof the more unstable investment cli-mates for our business.

19 April 2011Oil & Gas UK meet with Osborne to dis-cuss tax hike. The trade bodys chiefexecutive, Malcolm Webb, said the taxhad damaged investor confidence.

1 June 2011Centrica says that it will scale back oreven halt production at oneof its Morecambe gas fields , which itclosed for maintenance in April,thanks to the governments tax hike.

10 June 2011

Scottish First Minister Alex Salmondannounces proposals to limit NorthSea oil and gas tax hikes, which hesaid would hit industry investment.

19 June 2011Marubeni Corporation said to haveput up for sale all but one of its NorthSea oilfields.

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RUDDS 50THBRINGS BIG

BUSINESS TOSOMERSET

THE SOMERSET economy received a much-needed boost over the weekend, whenlocal taxis, security firms and caterers

were booked out solidly for the 50th birth-day celebrations of Finsbury boss RolandRudd at his Grade 1-listed country pile.

Around 400 City leaders and friends pri-oritised the PR-chiefs party over GeorgeOsbornes 40th at the chancellors grace-and-favour country home on the samenight, including News Corp heir JamesMurdoch, CBI president Sir Roger Carr andDaily Mail tycoon Viscount Rothermere.

The dress code said elegant but, asever, there was room for interpretation,

with Standard Chartereds CEO Peter

Sands opting for a bohemian patternedshirt and no tie and M&S chairman RogerSwannell choosing not to wear the high-street retailers clothes, in a departurefrom his usual habit, prompting a livelyexchange with his predecessor Stuart Rose.

Also enjoying Rudds hospitality, which included a 1970s tribute bandplaying disco hits, were Sebastian Griggfrom Credit Suisse; RBS chief executiveStephen Hester; Richard Gnodde ofGoldman Sachs; Sir Martin Sorrell, whoowns Finsbury as part of his WPP

CHAMBERLAINS in LeadenhallMarket was the venue of choicefor four insurance employeeswho know their stuff food-wise. By the size of the bill, itwas clear the group were fromthe broking fraternity ratherthan the more conservativeunderwriting clan, commented aChamberlains mole, who sup-plied the gourmand group with a

complimentary amuse bouche ofLobster Bisque. A little moreliquid consumption to add towhat was already a fairly liquidlunch, as the restaurant sourceput it. With two gin and tonics,a Bloody Mary and a Kir Royalefollowed by deep breath lashings of rose, white wine, redwine, pudding wine and thencognac, the Chamberlainssource was possibly understat-ing the point.

BILL OF THE WEEK

empire; and, last but not least, Ruddsloyal friend Peter Mandelson.

Mandelson is also godfather to one ofRudds two sons, and the PR chiefs fam-ily later took centre stage at the celebra-tions thanks to tributes from his threesisters, led by Amber Rudd, theConservative MP for Hastings and Rye.

Meanwhile, Rudds father Tony

revealed how his son had shown entre-preneurial flair at an early age, sellingon Mars Bars to his fellow Millfieldschoolboys at twice the going rate asthey travelled back to the boardingschool by train. Roland used to leavePaddington skint and arrive at the schoolflush, Rudd senior told the gathering..

WHAT NOT TO WEARNO SIGN of Virgin boss Richard Branson,the billed name at the pre-Wimbledon

party in association with the WomensTennis Association and Land Rover.

Instead, his children Sam and Hollystood in as hosts alongside Harold

Tillman, the chairman of the BritishFashion Council, which collaborated withthe WTA to dress the tennis stars at theparty: Serena Williams in Burberry, MariaSharapova in Alexander McQueen and

Heather Watson in Mulberry.Interesting, then, that none of the ten-

nis players chose to wear Jaeger, which Tillman rescued from decline when hebought the luxury British brand in 2003,or even Aquascutum, which returned toBritish ownership when Tillman added itto his retail stable in 2009.

Clearly, the lure of the bright yellowdress covered in tennis balls, as designed

by one of Lady Gagas designers AlexNoble, was too strong for American sportsstar Bethanie Mattek-Sands to resist.

Party people: Sir Roger Carr, Viscount Rothermere and James Murdoch Pictures: REUTERS, REX

CITYA.M. 20 JUNE 2011

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SIR Martin Sorrell, the boss of adver-tising titan WPP, is poised to join theadvisory board of British wealth man-agement firm Stanhope Capital.

He will take up a role on the adviso-ry board of the firm, which managesfunds totalling $7.5bn (4.6bn), along-

side former BP chief Lord Browne.Lord Browne was appointed to

chair the advisory board last year.Sir Martin also joins Stanhope

chairman and managing partnerDaniel Pinto, who he has known forabout 15 years.

The advisory board has been set upby Stanhope in order to develop itsinvestment strategy, which will belent weight by the expertise and expe-rience of Sir Martin.

More additions to the firms adviso-ry board are expected over the com-

ing months.Stanhope recently acquired rival

wealth management firm JewsonAssociates, with Jewson being foldedin to create a new division specialis-ing in the charity sector.

Stanhope was set up in 2004 byinvestment banker Pinto and JulianSevaux, another financier, formedaround a group of prominent British

and European families seeking tomanage their wealth.

Sir Martin Sorrell joins wealth manager

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THE founders of online advertisinganalysis firm Telemetry are set for a

35m windfall as they prepare to selljust over a fifth of the firm.Russell Irwin, Anthony Rushton

and Beau Chesluk will each rake inaround 11.6m from the sale, withGoldman Sachs and Credit Suisse

understood to be in talks with thetrio. The founders two of whom worked for the gaming company behind hit titles including PerfectDark and GoldenEye are thought to

be holding out for a deal that willvalue Telemetry at 175m.If UK investment banks or the

string of venture capitalist outfitsthought to be interested in the stakefail to meet the valuation, Deloitte,

which is handling the sale, could lookto Silicon Valley investment firms.

Telemetry, which provides data onthe effectiveness of online adverts tocustomers including Cillit Bang,

made 5m profits last year on rev-enue of 24m.The potential sale of the Citys Old

Broad Street-based firm comes at atime when technology stocks areachieving sky-high valuations.

Telemetry to sell stakeBY STEVE DINNEEN

TECHNOLOGY

BETFAIR has become the first majorbookmaker to hand over a voluntarypayment to the Horserace BettingLevy Board after moving its baseabroad.

UK-based operators are legallyobliged to make a substantial pay-ment in order to help preserve thesport but Betfair was exempt afterrelocating to Gibraltar earlier thisyear.

It handed over 6m equal to theamount it would have been requiredto pay under the terms of the levyscheme.

A Betfair spokesman said: We havea strong track record in supportingBritish racing and this substantial fig-ure is testament to the commitmentwe have in seeing the sport thrive.

Racing in this country is facing achallenging time but this donation will help to further support prizemoney and investment in the sport.

The betting firm estimates its moveto sunnier climes will save 10m in thenext year and 20m the year after, tak-ing advantage of Gibraltars one percent tax on gross profit from betting.

Betfair says part of the reason forthe move is the double taxation it issometimes subject to in the UK underits current set up. It follows Ladbrokesand William Hill in setting up theirgambling licences offshore.

Betfair payshorse racingboard 6m

SEGA, the maker of the Sonic theHedgehog video game yesterdayadmitted hackers have stolen infor-mation on 1.3m of its customers.

The cyber attack allowed onlinethieves to make off with names, birthdates, email addresses and encryptedpasswords of users of its Sega Passonline network.

Sega now joins an unenviable rollcall of companies who have been hit by a recent spate of cyber attacks,including Sony and Citigroup.

The video-games maker, a divisionof Sega Sammy Holdings, has nowclosed the affected network and saidit is unclear when it will re-open.

A Sega spokeswoman said: We aredeeply sorry for causing trouble toour customers. We want to work onstrengthening security.

In a bizarre twist, hacker groupLulz Security, which was behind cyberattacks against other video gamecompanies including Nintendo, hasoffered to track down and punish thehackers who broke into Segas data-base.

Sega will at least be grateful theattack was not as severe as the raidson Sonys PlayStation Network andentertainment division, in whichinformation on more than 100m cus-tomers was compromised.

Cyber attacks are becomingincreasingly commonplace, withother high profile targets falling vic-tim recently including theInternational Monetary Find (IMF),the US Senate, the defence firmLockheed Martin and even internetgiant Google.

President Barack Obama made it

clear online security is a matter ofnational importance, saying that anystate-backed cyber attacks will betreated as acts of war and could leadto a military response.

Sega fallsvictim tohack attack

THE sale of Maplin Electronics isunderstood to have been put on holdafter a trio of private equity suitorsfailed to meet its owners valuation.

Maplin, owned by Montagu PrivateEquity, has been hit by the high streetdownturn, which has been particular-ly tough for electronics retailers.

It is thought Montagu will keephold of the asset, which it bought

from Graphite Capital for 244m in2004, for at least a year in the hopethe market recovers.

Montagu is understood to be hold-ing out for an offer in excess of400m, with Blackstone, CVC CapitalPartners and Advent Internationallinked to the firm.

Last year Maplin made a pre-taxloss of 32.7m on sales of 213m.

A Montagu spokesman waunavailable for comment last night.

Maplin is off the marketRETAIL

Founders Russell Irwin and Anthony Rushton could be set for a windfall

BY STEVE DINNEEN

TECHNOLOGY

BYRICHARD PARTINGTON

WEALTH MANAGEMENT

BY STEVE DINNEEN

GAMING

ANALYSIS l Betfair Group

p

21 Mar 8 Apr 4 May 24 May 14 Jun

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850

750

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FORMER Financial Services Authority(FSA) chairman Sir Callum McCarthyhas thrown his weight behind a newmortgage business.

Sir Callum is to become the chair-man of Castle Trust, a new mortgagefirm.

He will be joined on the board by astar-studded list of City names,including Lord Deben, the chairmanof the Association of IndependentFinancial Advisers, and DameDeirdre Hutton, a director of HM

Treasury and former deputy chair ofthe FSA.

Castle Trust is being backed by JCFlowers, the US private equity house.Its European head Dr David Morgan,a well-known City name, will also beon seven-member-strong board ofnon-executive directors.

Patrick Gale, a non-executive direc-tor of pensions group Aegon, will alsosit on the board, as will RichardRamsay, a director at network servic-es firm Redstone, and Timothy

Hanford, a former director ofSchroders.

The company, led by Sean Oldfield,claims it will offer mortgages thatimprove affordability and share thecosts and risks of home ownership. It

will also provide investment opportu-nities in the UK housing market toretail and institutional investors.

Oldfield has spent the past two years preparing for the launch ofCastle Trust by working alongside JCFlowers to conduct market research.

Sir Callum stepped down as thechairman of the FSA in late 2008 atthe height of the financial crisis.

He joined JC Flowers as itsEuropean chairman in 2009. He isalso a director of HM Treasury.

He said: The housing market isthe largest asset class in the UK,

worth in excess of 4,000bn, most of which has previously been unavail-able to investors. Castle Trust has

been designed to help customers with the two most important finan-cial decisions in their lives investing their savings and buyingtheir home.

Chair role for

ex-FSA chief

Former FSA chair Sir Callum McCarthy is to head up a new mortgage firm Picture: REX

BYRICHARD PARTINGTON

FINANCIAL SERVICES

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THE BANNED former finance chief ofNorthern Rock, David Jones, is in theearly stages of setting up a new con-sultancy firm.

Jones, who was banned from bank-ing for life by the Financial Services

Authority (FSA) last year, has filed toset up an advisory firm, HeriotConsulting, with Companies House.

Filed in April, the com-pany is registered to anaddress in the affluentNew Town area ofEdinburgh.

It is not yet known what type of advisory work HeriotConsulting is pro-posing to under-take, yet the

return of Jones to the business worldcould prove controversial. The former Northern Rock direc-

tor, who was fined 320,000 by theCity regulator for his part in the col-lapse of the bank, is allowed to under-take advisory work.

He is only prevented from taking arole that requires FSA authorisation

and has previously stated hisinterest in pursuing opportu-nities in consultancy work.

Banned Northern RocksJones sets up new firmBYRICHARD PARTINGTONENFORCEMENT


SIR TERRY LEAHY BUYS BRITISH AGAIN

FORMER Tesco boss Sir Terry Leahy has backed a small British technology start up. SirTerry, who ploughed 2m of his personal wealth into software start up MetaPack lastweek, has now led a 1.5m cash raising for mobile coupon firm Eagle Eye Solutions. Heand two top-ranked City retail analysts, Bill Currie and Iain McDonald, raised themoney in a Series A round of funding. Picture: REX

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WARREN Buffett-backed Chinesecarmaker BYD will raise a less-than-expected 1.42bn yuan(135m) in its initial public offer-ing (IPO) in Shenzhen,weighed down by weakinvestor sentiment and worries over its poorperformance.

BYD had priced theIPO at 18 yuan ashare, it said in astatement to theShenzhen Stock

Exchange yesterday. The company

had initially aimed to raise 2.19bnyuan from the share sale.

At 18 yuan a share, the IPO valuedBYD at 15.9 times consensus 2011

earnings forecasts and markedonly a marginal 0.8 per cent pre-mium to the companys Hong

Kong-listed shares.BYDs Hong Kong-listed

shares were last traded atHK$21.50 a share.

BYD was selling up to79m shares with proceedsused to fund its lithiumion project, add toresearch and develop-

ment and expand itsproduct range.

OUTSOURCING firm BabcockInternational is gearing up to buyLearnDirect, the online teaching com-pany.

Babcock, which maintains RoyalNavy submarines and aircraft carri-ers, is said to be one of the bidders inthe running to buy the trainingprovider.

It is one of about 10 groups lookingto buy LearnDirect, after Ufi, a chari-table trust set up by the governmentin 1998, put it on the block in April.Several private equity firms are alsosaid to be interested in buying thecompany.

The auction process is being han-dled by investment bank Rothschild,in a sale that could net Ufi up to50m.

The trust is planning to use thefunds raised from the sale ofLearnDirect to plough back into itscharitable work.

As well as engineering services,Babcock is also the largest provider ofoutsourced training in the UK.

It already provides vocational and

safety training services to companiessuch as EDF Energy and pubs opera-tor Mitchells & Butlers.

Babcock expanded its training unitwith the acquisition of rival VT Grouplast year and could use LearnDirect todevelop further in the sector.

Sheffield-based Ufi was establishedin 1998 by the then Labour govern-ment as part of its vision for a univer-sity for industry.

LearnDirect was launched in 2000by Ufi to provide online courses foradults to improve basic skills such asMaths and English.

Since it was created, 3m peoplehave used the site. Last year, it gener-ated a turnover of about 140m.

Babcock lines

up a bid forLearnDirect

Buffett-backed carmaker raisesless than forecast in Chinese IPO

BY RICHARD PARTINGTON

SUPPORT SERVICES

CAPITAL MARKETS


Business weighs risks of Russian investment

AS the St PetersburgInternational Economic Forum

wrapped up over the weekend,the business leaders and

investors who flew into Russia to seePresident Dmitry Medvedev outlinehis vision for attracting foreign invest-ment into the resource rich formersuper power were hopeful thatreform is finally on the way, but scep-tical that the Russian leadership willfinally deliver on their promises to

create a more business friendly envi-ronment.

Two of the UKs biggest companies,BP and Shell, learnt the hard way thatinvesting in Russia, while offering the

chance of big returns, posed big risks when contracts turned out to be aprocess of negotiation, not a legallybinding agreement as hoped.

Medvedev used his keynote speechto call for businesses from across the world to come to Russia, therebyreducing the countrys dependenceon oil and gas revenues.

The chief of Swiss drug giantNovartis was in town to break groundon a new purpose built facility which

has been made possible byMedvedevs new inward investmentprogramme. Joe Jimenez told CNBCthe deal made sense, given the sup-port he had received from the govern-

ment and the relatively highstandard of education in Russia.The countrys economy is heavily

dependent on oil and gas revenueswhich have created an elite for whichmoney is no object. But the impact ofhigh import taxes and a lack of local-ly produced goods has created someof the most expensive prices in theworld. Whereas the rich can afford a10,000 bottle of cognac, the averageperson is more likely to be drinking

cheap locally produced vodka intothe early hours.

Stephen Schwarzmann, the chiefexecutive of the Blackstone Group,argued that there is a big Russian con-

sumer society that could offer invest-ment opportunities for the privateequity giant, but believes the countrywill only become an attractive desti-nation for foreign capital if the top 20politicians in Russia decide to serious-ly battle corruption.

Medvedev sounded serious butthere is still a long way to go beforepeople will feel confident in the ruleof law. Due to a general lack of trust,many of the recent accomplishments

of government, business and civilsociety are vulnerable. Institutionsare not yet strong or independentenough, for example, to provide whis-tle-blowers with protection and pro-

vide companies subject to extortion with due process, said MatthewMurray from the Centre for BusinessEthics and Corporate Governance.

But while Russia is no westerndemocracy, it has expected growth offive per cent this year and a presidenttrying hard to attract talent. For thosereasons, expect more firms andinvestors to take a risk on Russia. Patrick Allen is a senior news editor forCNBC

CNBC COMMENT

PATRICK ALLEN

ANALYSIS l Babcock

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The past year has not been aneasy one for the City of London,overshadowed as it has been bythe austerity programme in the

UK and the Eurozone crisis.But there will be much to be opti-

mistic about and to celebrate at CityA.M.s second annual awards ceremo-ny on 21 September.

Our personality of the year short-list includes the chief executive of thecommodities group Glencore, which

recently pulled off the London StockExchanges largest ever flotation.

The other candidates includeGerald Ronson, whose iconic Heron Tower building is the latest of themagnificent skyscrapers to adorn the

London skyline, and Burberry chiefexecutive Angela Ahrendts.

There will be only one winner, judged by our prestigious panel ofCity and business experts.

So that you dont miss the City

event of the year, get online now and book your table for the City A.M. Awards on 21 September at theGrange St Pauls Hotel, London EC4.

To get in touch, call 020 8267 4043or see www.CityAMAwards.com

Glencore chief executive Ivan Glasenberg headedup the largest ever flotation on the London mar-kets earlier this year and managed to wow poten-

tial shareholders by promising not to sell his near6bn worth of shares for five years.

Glasenbergs stake dropped from 18.1 per cent to15.8 per cent after the shares listed because of othershareholders coming on board, but he still remainsthe groups largest shareholder.

He joined Glencore in April 1984 and has been chief executive officer sinceJanuary 2002.

The hitherto secretive busi-nessman has even come out tojoin Londons business elite atthe opening of the ChelseaFlower Show and then fol-lowed that the next day witha stock exchange celebra-tion. But his achievementat getting the float offthe ground will havebeen diminished, withshares off 10 percent in the first fiveweeks of trading.

IVAN GLASENBERG

GLENCORE

Angela Ahrendts has hardly put a footwrong since she joined Burberry in 2006. In itsrecent set of results, profits rose from 211.4m

to 295.7m, boosted by ever-increasing sales inemerging markets such as China, Brazil andIndia.

The company, famous for its camel plaid,opened 26 new shops in the year, mainlyin high potential markets like Indiaand Mexico. Burberry also opened aflagship store in Beijing and new shopsin Chinas provincial capitals, on top ofthe 50 stores it already had there.

When she arrived at Burberry, thegroups famous check was being linkedwith chav culture.

She soon made sure that the checkwas reduced in importance and nowBurberry is synonymous with luxury,not the rougher elements of youthculture.

US-born Ahrendts says she wantsto sell the British attitude across theworld.

She seems to be getting therefast.

ANGELA AHRENDTS

BURBERRY

GERALD RONSON

HERON CORPORATION

The son of Jacob, Lord Rothschild, Nat has made themost of a year when commodities andcommodity investment flourished.He has floated Vallar, a group thatis involved in resources projectsin Indonesia and other emergingmarkets, and together with BPsformer chief executive TonyHayward and ex Goldmanite Julian Metherell he is launchinganother commodities based groupcalled Vallares.

Some say his

investment inGlencore became worth almost25m when thegroup floatedearlier this year.

Nat is a man whose fond-ness for thehigh life wasmuch report-ed on in hisearly adultlife. Now he iskeen for onlookersto focus on his busi-ness interests, whichare becoming ever

more public.Shares in Vallar have

climbed 21 per centsince their debut lastsummer and Vallares

raised 35 per cent morethan it expected.

NAT ROTHSCHILD

VALLAR AND VALLARES

Peter Clarke, chief executive of Man Group, pulled off theacquisition of the renowned hedgefund GLG in October last year, inresponse to investors wanting toplace their money with largerand more diversified managers.

One of the lesser-known conse-quences of the deal is that Manemployees are now free to wearjeans at work.

Man returned to positiveinflows during the yearand launched a savings

product in Japan whichraised $2bn.Earlier this year, the

group sold its stakein Bluecrest Group,making a 250mprofit.

After a near-halving of itsfunds undermanagement inthe financial cri-sis, Man has been building back upits assets aided bythe GLG purchase.

Clarke is leadingthe worlds largesthedge fund managerout of its Sugar Quayoffices in the City(where it has been forover 30 years) into a

new home inRiverbank House.

PETER CLARKE

MAN GROUP

Gerald Ronson is one of the most respected developersin the UK and t his year saw through the completionof the Heron Tower in the heart of theCity. The tower offers office spaceand luxury living in Bishopsgate.

Gerald started working withhis father in the furniture busi-ness prior to joining HeronHomes, which became one ofthe biggest house builders inthe South of England. In 1956he founded HeronGroup now

called HeronInternational of which he ischief execu-tive.

He is a biggiver tocharity andhe is alsoknown forhis annu-al lunch-es wheresome ofthebiggestnames inbusinessget togeth-er to dis-cuss newdevelop-ments in both

business andpolitics.

The shortlist

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ELECTRICALS giants Dixons andKesa report their full year resultsthis week against a grim backdropof dwindling consumer confi-dence.

The companies have seen house-holds cut back on so-called bigticket items like washingmachines and TVs, leaving themstruggling to generate sales.

Dixons, to report on Thursday, isin the throes of a 50m cost-cut-ting campaign in an effort to turnthe business around. Sales of8.39bn a drop of 1.68 per cent

year on year are forecast at theretailer which is pinning its hopeson booming sales of Apples iPad

2. A pre-tax profit of 86.5m is

expected down by 4.42 per cent at the business which has beenstruggling in the UK.

Keith Bowman, head of equitiesat Hargreaves Lansdown said: Anemphasis on the groups recentlylaunched service brandKnowhow is likely.

Meanwhile Kesa, which ownsDarty in France as well as Cometin the UK, will announce itsresults on Wednesday.

Sales of 5.49bn are forecast up 2.4 per cent year-on-year withpre-tax profit of 82.34m pencilledin. That represents a rise of 0.5 percent. Struggling Comet is beingshaken up by investor Knight

Vinke.The chain plans to cut annual

costs by 10m by consolidating 14

regional service centres to twosites, reducing its warehouse net-

work from three to two and cuthead office staff.

In Dixons most recent update,sales for the UK were down fiveper cent in the year to 30 April,including an eight per cent slumpin the second half of t he period.

The company, which has 1,200stores in 28 countries, has issuedtwo profits warnings this year.

Consumer confidencewill hit Dixons and KesaBY JOHN DUNNE

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Apple fails toimpress Indianbrand survey

APPLE may be greatly admired andwidely feted as an uber brand in theUK and US, but a new survey out

yesterday concludes that in India itis rated as only 40th in the brandcharts.

The survey, conducted by market-ing consultants TLG, also revealsthat Indian brands make up sevenof the top ten in the country, whilethe UK index has just four indige-nous British brands.

Apple tops both the equivalentUK and US indices, with Google,

Amazon and Facebook also all mak-ing the top five.

Experts have put Apples inabilityto crack India down to its failure toadapt its business model to localtastes and budgets.

In India, consumers can buy anew Tata Nano car for the sameprice as three Apple iPhones.

Jaguar Land Rover and Tetley teaowner Tata came second in theIndia survey, while the top rankedforeign firm is Google, whichentered the index at number three.

BY PHOEBE TORRANCE

MARKETING

NEWS | IN BRIEF

Old Vic Productions in money dramaOld Vic Productions, which co-produces andinvests in shows from the West End toBroadway, has revealed a full-year pre-taxloss of 630,423 for 2010. The company has

decided to close a US tour of Billy Elliot theMusical after the shows Toronto run. Thecompany, chaired by Barclays chief execu-tive, Bob Diamond, said losses were down tothe write-off incurred on a Billy Elliot tour.

Green Lantern disappoints in USThe costly superhero movie Green Lanternflickered at the weekend box office inNorth America, while Mr PoppersPenguins exceeded low-ball forecasts.

According to studio estimates issued yes-terday, Green Lantern earned about$52.7m at the lower end of expecta-tions during its first three days of releaseacross the US and Canada.

Beware retail banks taking ever greater risks

WHEN it was announced thatGeorge Osborne was goingto endorse the VickersCommissions suggestion

that the retail arms of UK banks be

subject to some kind of ring-fencingin his speech at Mansion House last

week, 3.5bn was wiped off the collec-tive market value of the UKs four

biggest banks almost immediately.

Judging from the industry quotesthat accompanied these news stories,it appeared as if this move was a boltfrom the blue. And yet what was thereason for such a reaction? What didthe chancellor actually say that wasso surprising?

By voicing his support for a broadrecommendation contained in theinterim report the final report is ofcourse not due until September ofan independent body established by

the government to resolve the prob-lem of what to do with financial insti-tutions deemed too big to fail, thechancellor told us nothing that wasnot already known.

Given that three months ago, UK-based banks were concerned that the Vickers Commission was seriouslyconsidering the legal separation oftheir retail and investment arms, any-thing less than this should be seen asa step in the right direction!

Of course the term ring-fencing isvery broad, and encompasses a rangeof scenarios, some perhaps morepalatable than others.

As ever the devil will be in the

detail and we must reserve judgmentuntil the government releases specif-ic details of what it has in mind.

Whatever action it chooses to take,there are a number of consequences

that possibly cannot be avoided.Firstly, there are likely to be signifi-cant costs involved for the banks costs that will, ultimately, be passedon to the consumer.

And secondly, by requiring banksto hold more capital and possiblyrestricting their scope for deployingit, there is likely to be less liquidity inthe marketplace, making it more dif-ficult for small and medium-sized

businesses to source bank funding.

This in turn will make the accessibili-ty and efficiency of other fundingsources like business angels, quotedmarkets and venture capital moreimportant than ever.

In fact, given their implicit stateguarantee and the targets they haveto hit with regards to lending to SMEsunder Project Merlin, it is not impos-sible that the retail arms of banksmight be the ones taking greater risksin the future.

This is exactly the kind of unin-tended and undesirable consequencethat we must work hard to avoid.

Stuart Fraser is the Policy Chairman atthe City of London Corporation

CITY COMMENT

STUART FRASER

ANALYSIS l Dixons

p


20

16

12

16.2017Jun

JANE NORMAN IN RESCUE TALKS

BELEAGUERED high-street fashion retailer Jane Norman is in rescue talks withtwo private equity companies over a possible takeover, according to reports yes-terday. Better Capital, run by Jon Moulton, and Sun Capital Partners arebelieved to be in talks with the chains lenders, including Royal Bank of Scotland.

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Osborne ClarkeTim Simmonds has been hired byOsborne Clarke to develop the com-

panys investment funds practice.Simmons joins from Berwin LeightonPaisner, where he was the head of

the law firms funds and financialservices regulatory group.

Atlantic CoalThe AIM-listed coal production firmhas appointed Barney Corrigan to itsmanagement team as project devel-

opment officer. Most recently,Corrigan was head of BHP Developat law firm Blackett Hart & Pratt.

Uranium ResourcesThe AIM-listed uranium explorationfirm has appointed Dimitri Pashov asa non-executive director and a repre-sentative of its stakeholder Estes.

Pashov joins from Eastlink Lanker,where he is general counsel.

Saffron Tax PartnersThe boutique tax partnership hasappointed Jim Pamphlett as directorof personal tax. Pamphlett joins from

BDO, where he worked in the firmsprivate client operation.

AvivaPhilippe Maso y Guell Rivet, formerchief executive of AXA InsuranceUK, has been appointed as chiefexecutive of Aviva France, subject toregulatory approval, and also to the

position of underwriting, pricing andproduct director for Aviva Europe.

Barnett WaddinghamThe SIPPs provider has appointedTony Moore to lead the marketingand development of the Barnett

Waddingham SIPP. Moore will joinfrom AXA Wealth on 1 July.

Paul, Hastings, Janofsky & WalkerThe international law firm hasappointed Garrett Hayes to strength-en its M&A and private equity prac-tice in the London office. Garrett

joins from Macfarlanes.

CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys

Co-operative BankThe Co-operative Bank has appointed RichardFrance (left) and Chris Wilson to lead theCorporate and Business Relationship Bankingteam and the Corporate Banking SpecialistSectors operations respectively. France was

previously head of the Banks nationwide cor-porate banking centres and Wilson led thefirms Commercial Real Estate, Public Sectorand Treasury Sales activities.

+44 (0)20 7092 0053morganmckinley.com

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

in association with

WALL STREET WEEK AHEAD

Greece is the word as countrys debt woes persist

NEWS from Luxembourg yesterdayevening that Eurozone finance min-isters may release a fifth tranche of

bailout funding for Greece will bethe major focus for traders this morning,

but European stock markets are neverthe-

less expected to open to the downside thismorning. The general reaction is likely to

be that this is merely another finger-in-the dyke response which will not preventa seemingly inevitable default.

GFT quotes two-way prices on stockindices around the clock, even when theunderlying markets are closed, and theinitial direction is down for the open thismorning. The FTSE 100 index is called toopen down 15 points at 5,700, thereby giv-ing up virtually all of the previous weeksmodest gains. The German DAX is forecastto open down 14 points at 7,150, and the

French CAC 40 is quoted to open down 10points at 3,813.The mounting concern now seems to

be that releasing additional funding forGreece is just throwing good money after

bad. Potentially of greater importance formarkets this week will be the looming no-confidence vote in the Greek governmentitself, and its austerity plans. The result ofthe vote is expected tomorrow evening,and following the Prime Ministers cabi-

net reshuffle, consensus would suggestthat confidence is secured. There is how-ever still a significant risk that it will fail,as events are moving rapidly, and in that

instance we will be facing havoc in themarkets. Some are touting this as thebiggest week in Greeces history; ultimate-ly it may prove to be so for the Eurozonetoo.

Across the pond, we have the latestdecision from the Federal Reserve's FOMCmeeting, but although we will enjoy thenovelty of chairman Ben Bernankes new-style press conference following theannouncement on Wednesday, few fire-

works are expected by way of signal in thetiming and likelihood of a future policyshift. Friday, though, could herald a chop-py end to the week, with important US

data by way of the durable goods reportsand final reading of first quarter GDP.Martin Slaney is director of GFTs global deal-

ing operations

MARTINON THEMARKETS

THE S&P 500s 200-day mov-ing average is the line inthe sand as the bulls andthe bears fight over the

US stock markets direction. Itwill face one of its stiffest tests

this week with Greeces debtcrisis reaching a climax.

After setting its closing highfor the year on April 29, the S&P500 has lost 7 per cent. WallStreet typically defines a dropof 10 per cent or more from arecent peak as a correction.

The benchmark S&P 500 hitits lowest point right on its 200-

day moving average in volatiletrading on Thursday. The indexthen rallied 1 per cent fromthat session low to close onFriday at 1,271.50. It also scoredits first weekly gain in the lastseven weeks.

At Friday's close, the S&P500s 200-day moving average

was around 1,259. If the levelholds, it could be a springboardfor stocks to rally.

We seemed to have bouncedoff that level of concern thatpeople were watching, saidDavid Joy, chief market strate-

gist at Ameriprise Financial. Atleast for now, that is a little bit

of evidence that these problemsare solvable and markets couldmove higher.

Bond markets remain anx-ious about a Greek default.Most economists are over-

whelmingly skeptical tha

Greece can ever repay its moun-tain of debt of340bn.

MARTIN SLANEY

6,100

5,900

5,700

4 May 24 May 14 Jun8 Apr21 Mar

ANALYSIS l FTSE 100

5,714.9417 June 7,600

7,400

7,200

7,000

6,800

4 May 24 May 14 Jun8 Apr21 Mar

ANALYSIS l DAX

7,164.0517 June

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

ANALYSIS lDunelm

500

460

420

3802011 4 Apr 18 Apr 3 May 16 May 31 May 17 Jun

p 398.8017 Jun

DUNELM GROUPCiti initiates on the homeware retailer with a hold/medium risk rating and435p target price. The broker says Dunelm is a high-quality and cash-gen-erative business part-way through a low-risk, high-return organic expan-sion programme. But while its fundamentals are attractive, Citi says thereis little hidden value on offer, and thinks industry headwinds drive down-side risk to the forecast agenda.

ANALYSIS lAggreko

1,950

1,850

1,750

1,650

1,550


p

1,911.0017 Jun

AGGREKOGoldman Sachs reiterates its conviction buy on the temporary power supplier.In the brokers view the recent acquisition by Horizon Acquisition Company ofAPR Energy Aggrekos largest competitor - highlights the unfulfilleddemand and growth opportunities in the emergency power market. Thestrength of structural demand for temporary power is such that there isscope for both players to enjoy significant growth in the medium term.

ANALYSIS lJulius Baer

40

38

36

34


CHF34.05

17 Jun

JULIUS BAERUBS cuts its earning per share for the Swiss private bank for 2011, 2012and 2013 by 6 per cent, 10 per cent and 6 per cent but upgrades it fromsell to neutral. The broker thinks the market is now pricing in a realisticnegative impact from the profit and loss currency mismatch. Replacingthe old, highly profitable back-book with less profitable new businesscould dampen earnings growth over the short to medium term.

BRILLIANT!BRILLIANT!

BRILLIANT!Chris Tarrant, BBC Radio 2

NOL COWARD THEATRE

0844 482 5141

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Donata Huggins asksLuke Johnson how hebecame a mogul of themiddle-class high street

Business Features | Entrepreneurs23

BUSINESSES run by women in Britaingenerate 130bn for our economy.Between 1997 and 2007, the numberof female-owned companies in the US

grew 44 per cent, twice as fast as the num-ber of male-owned firms. And in China,women own more than 40 per cent ofprivate businesses.

This trend is a global phenomenon and atthe same time its clear that many of ourempowered businesswomen are choosing toopt out of the male-dominated boardroom.

MALE-DOMINATED BOARDS

Half the FTSE 250 companies still hold anentirely male board. Despite a new genera-tion of bright, ambitious young female grad-uates, it remains a fact that the attritionrate of women in senior professional posi-tions is much higher than with their malecounterparts and its not only becausethey marry and devote time to raising chil-dren.

The current model simply doesnt workfor the new generation of women. As aresult, they are choosing instead to findtheir own entrepreneurial niche.

This led me to consider the role of suc-cessful female leaders in business and poli-tics to help instil a sense of ambition andopportunity in young women, so thatinstead of having to break through the glassceiling, they can see a way to disrupt thestatus quo and avoid it entirely.

REALISING POTENTIALThere is a clear need for the existing profes-sional businesswomen who serve as todaysfemale role models to inspire more womento realise their potential as business leaders.

We could start with French finance minis-ter Christine Lagarde winning her bid totake over from Dominique Strauss-Kahn ashead of the International Monetary Fund.For me, shes an outstanding choice and theworld would be lucky to have her. Shes bat-tled her way through the male-dominatedlegal profession to reach an eminent posi-tion at the pinnacle of finance. Now she is amainstay on the Forbes list of PowerWomen.

If appointed to the role, she has promisedto bring her expertise as a lawyer, a minis-ter, a manager and a woman to the job.Her influence would grow dramatically andshe would be an inspiration for youngwomen everywhere.

ONE YOUNG WORLD

It is these sorts of examples that motivatedme to start One Young World a globalforum for young leaders with David Jones,CEO of Havas, last year. This September, wewill be holding One Young Worlds secondsummit to discuss these ideas and, impor-tantly, give a platform to young women tovoice their concerns about world issues.

I encourage you to look into the move-ment and see if you, your company or com-munity can get involved. Visitwww.oneyoungworld.com for more informa-tion.

Kate Robertson, UK group chairman ofEuro RSCG and co-founder of One YoungWorld.

Agree with Kate Robertson? City A.M.welcomes debate. Do you have a strongview on entrepreneurship in the UK? [email protected] or tweet at@donatahuggins

YOUNG WOMEN:BATTLE SEXISM

WITH BUSINESSKATE ROBERTSONUK GROUP CHAIRMAN OF EURO RSCG

LUKE Johnson is a man who takes a

while to introduce. He seems tohave run, or had his hand in run-ning, half of the middle-class high

street. Pizza Express, Giraffe, PatisserieValerie, Belgo, Strada, Feng Sushi, Baker

and Spice, the Signature Restaurants thatowned The Ivy and Le Caprice to name afew.

On top of that, Johnson is chairman ofRisk Capital Partners, a private equityhouse, the part owner and chairman ofSuperbrand, a brand research companyand the director of a car park equipmentcompany, APT Controls.

Beyond the world of business, Johnsonalso writes newspaper columns and is aco-founder of the think tank the Instituteof Entrepreneurs. From 2007-2010, he

was chairman of Channel 4. Little sur-prise that Penfolds asked him to sharehis entrepreneurial story at their Vintage

Years speaker series.

PARTY PROFITHe didnt set out to be a business ownerthough. Johnson studied medicine at uni-

versity. Only his wild partying led him offthis course: I got a taste for enterprise

when my friends and I set up a nightclubat university. The parties we hosted inour rooms had gotten a bit out ofcontrol, so we were banned from holdingany more. Their business model was sogood that they franchised it to studentsin Bristol and Cambridge.

After university, however, he gave upon medicine and headed for the City,

working as a media analyst at the stock- broker Grieveson Grant (subsequentlyKleinwort Benson Securities). It wasntuntil he was 27 and very restless thathe started his entrepreneurial adventure.

PIZZA DELIVERSHis big break, however, came from a con-tact he found through a newspaperadvert that he stumbled upon by chance.David Page was looking for a buyer forhis popular but underperforming pizza

business. Johnson and his Oxford chum

Hugh Osmond, who later went on tostart Punch Taverns, entered into negoti-ations with Page.

The pair bought the chain for 15m,working with David Page, who went onto be the companys chief executive andlater its chairman. The team grew the

business from Pages 12 restaurants toover 250 Pizza Expresses, and the shareprice from 40p to over 900p. Johnson leftthe business in 1999 when the marketcapitalisation reached over 500m.

Despite being worth an estimated120m, money clearly doesnt motivate

Johnson. He credits his father, the histori-an and a

cityam 2011-06-20

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