cityam 2011-07-19

8/6/2019 Cityam 2011-07-19

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ITALY suspended trading in govern-ment and corporate bonds yesterday asthe release of the EU’s stress testsplunged the region deeper into a crisisthat some analysts are comparing tothe fall of Lehman Brothers.

The panic saw billions wiped off the value of Europe’s banks and interestrates on Italian ten-year debt climbabove six per cent before trading wasshut down. The euro hit a new recordlow against the Swiss franc; goldreached a new high of $1,600 (£1,000)

an ounce; and the FTSE and Dax bothdropped 1.55 per cent.

The market cap of Britain’s biggest banks shrank by £6.3bn, with Lloydsplunging 7.5 per cent, Barclays 3.7 percent and RBS six per cent.

Overall, Europe’s financial stockssank to their lowest levels in two years.Italian Unicredit and Intesa Sanpaulo both dropped by over six per cent andUBI by more than five.

BUSINESS WITH PERSONALITYwww.cityam.comIssue 1,427 Tuesday 19 July 2011 FREE

FTSE 100 t5,752.81 -90.85 DOW t12,385.16 -94.57 NASDAQ t2,765.11 -24.69 £/$ 1.61 unc £/¤ 1.14 unc ¤/$ t1.41 -0.01

Murdoch’sSky role inthe balance

JAMES Murdoch’s role as chairman of BSkyB could hinge on his performanceat the crunch media select committeehearing this afternoon.

The heir apparent to the Murdochempire has come under increasing

pressure to relinquish the Sky chair-manship following News Corp’s han-dling of the phone hacking scandal.

Sources close to the Sky board havetold City A.M. they will closely monitorhow Murdoch fares in the bear-pit thisafternoon before deciding his fate.

He will face tough questions fromMPs over why he authorised out of court settlements to high profile vic-tims of News of the World phonehackers.

These included payments totallingaround £700,000 to former FA bossGordon Taylor. If Murdoch fails to con- vince Sky board members his positionis still tenable, it is likely he will beasked to step down, perhaps temporar-ily, while he concentrates on the fire-fighting operation at News Corp.

However, the main event will be theappearance of octogenarian RupertMurdoch. The committee will be keento discover how much the tycoon wasaware of the practices of the newspa-pers in his empire.

Rebekah Brooks, who resigned asNews International boss on Friday, willalso face a grilling. She was editor of the News of the World when mur-dered teenager Milly Dowler’s phone was hacked. She had resisted earlypressure to step down.

SEE MORE: P5

BY STEVE DINNEEN

MEDIA▲

ANALYSIS l Barclaysp

14 Jul 15 Jul 18 Jul13 Jul12 Jul

235

225

215

207.6518 Jul

Credit markets showed the conta-gion spreading to core EU nations, with Markit’s index of WesternEuropean sovereign credit defaultswaps (CDS) rising to an all-time highof 306 basis points, meaning it costs €306,000 to insure €10m of debt.

French CDS widened to a new

record of 123bps, Italy CDS climbed by 20bps to 326 and Greek CDS shot up92bps to 2,507.

Greek bailout negotiations are stillat an impasse with ECB president Jean-Claude Trichet refusing to consider any form of private-sector burden-sharing.

Figures out yesterday put to bed

speculation that the ECB had inter- vened to bring down Italian yields last week, with the data showing that theBank made no purchases.

Sovereign debt problems across thepond added to the gloom: the Dow closed 0.76 per cent down, and theNasdaq down 0.89 per cent. MORE: P2-3

BY JULIET SAMUEL AND JULIAN HARRIS

BANKING▲

ECB president Jean-Claude Trichet believesa sovereign defaultwould be Europe’sLehman Brothers

Certified Distribution

30/05/11 till 03/07/11 is 102,636

DEBT CRISISESCALATES

ANALYSIS l Italian ten year bond yields

%

May Jun Jul

6

5.5

5

4.5

3.5

4

5.75718 Jul

ANALYSIS l RBS

p


36.5

35.5

34.5

33.5

32.9718 Jul

ANALYSIS l Lloydsp


46.5

45.5

44.5

43.5

42.5

41.5

41.3518 Jul

8/6/2019 Cityam 2011-07-19


News2 CITYA.M. 19 JULY 2011

European idiocyat heart of crisis

Once again, regulators have failedspectacularly. Gold hit £1,000 anounce today for the first time, as equi-ties fell, Club Med government bond

yields jumped, spreads increased andthe fear and loathing in the creditmarkets intensified – and all of that inresponse to the EU’s banking stresstests on Friday night, which were sup-posed to reassure investors that all

was well. What a farce. The tests’ pre-posterous lack of credibility – they did-

n’t even envisage the possibility that agovernment could go bust – have beengreeted with the contempt they deserved.

The key problem is that if marketsdon’t know what will happen to small-er, less well-managed financial institu-tions in the event of a sovereigndefault, then they will be less likely tolend to them or engage in other sortsof relationships. Perceived counterpar-ty risk, as it is called, will intensify –and these less transparent firms willsoon start running out of cash, poten-tially triggering a liquidity crisis. Theamount of credit available to troubledeconomies will dry up, assuming that

bigger, more obviously well-capi-talised banks are unable to step in andfill the liquidity void.

From a UK perspective, one risk would be a collapse in trade credit inthe Eurozone, triggering a sharpdecline in global trade. During theprevious crisis, manufacturing outputcollapsed by more even than financialservices output. The reason was thisdrying up of trade credit, which led toa collapse in the supply chain andthus in factory output, in a remark-

EDITOR’S LETTER

ALLISTER HEATH

EUROZONE negotiations showed nosign of a breakthrough yesterday inthe run-up to Thursday’s crunch talkson a new Greek bailout, with marketsincreasingly convinced that only a fullfiscal union with region-wide euro- bonds will stop the crisis spreading.

Politicians, led by Germany, have been in deadlock with the EuropeanCentral Bank (ECB) f or weeks o ver theissue of private-sector burden-sharing.

Berlin insists that banks take a symbol-ic part in any deal but ECB president Jean-Claude Trichet says that such aproposal would be disastrous.

But investors’ views are hardening, with a growing belief that only a dealto see the region’s sound nationsunderwrite the debt of its bankruptgovernments will be enough.

UBS analysts wrote yesterda y that

convincing markets “is easy to do if the political will is there: making any one countr y’s obligations the responsi- bility of all would do it.”

They added: “T his would necessarily involve a permanent reduction in thesovereignty of each nation involved but this would likely prove an attrac-tive outcome compared with the alter-natives.”

But it is not clear that politicians will align themselves with financialmarkets. Barclays Capital analysts saidin a note yesterday that the stress test

data released on Friday “graphically illustrate the level of interconnected-ness among the major banks inEurope... [which] lies behind much of the current sovereign crisis.”

The note adds that the European banking sy stem “is now constructedon the assumption of permanentmonetary union through massivecross border-exposures”.

Markets seefiscal union as

the solutionable case of contagion. A collapse inkey export markets would also hit theUK, but the biggest danger is financialcontagion crippling global City banks,insurers and institutional investors.

The spiraling yields on Italian andSpanish bonds are not as weird assome have argued. One reason is thatthe probability of a euro break-up isincreasing – and even if you think there is just a 10 per cent chance of the euro ending at some point overthe next decade, and Italy and Spainreverting to weak, inflationary cur-rencies and devaluing themselves outof debt, logic dictates that you shoulddemand a much steeper premium tolend to them. Before the single curren-cy was launched, yields on the bondsof Club Med countries were rightly much higher than those on German

bunds; we are gradually seeing areturn to sensible, differential pricing

of risk by investors who had previous-ly completely misunderstood thenature of the Eurozone and confusedit for a fiscal union.

That said, the most likely outcomeis that the EU will eventually find a

way (by bending or rewriting rules) tofederalise the debt of failed, bankruptstates: they will issue vast amounts of EU-backed bonds (say €1 trillion, as anorder of magnitude) and tell all finan-cial institutions, including insurersand pension funds, that they wish to

buy every single government bondfrom bankrupt countries that they are

willing to sell, probably at the dis-count to face value being priced in atthat particular time by the markets.

The authorities would give holders anultimatum: sell now, or bear all futurelosses. It may be that such an arrange-ment will not be ready on time forGreece, which could yet be left to go

bust and be thrown out of the euro.But regardless of the details, a giant

euro-bond would transfer the defaultrisk from private institutions stupidenough to trust Club Med govern-ments (or who were forced, for regula-tory reasons, to hold their bonds) to allEuropean taxpayers. This could dam-age the credit rating of more solventcountries – but even if it doesn’t, it

would be tantamount to a massive bailout. In return, the EU would wantits pound of flesh: the weakerEurozone countries would be turnedinto quasi-protectorates.

Such a plan would further discreditcapitalism (even though the people

who caused the crisis were over-spend-ing politicians) and it would rob theEU of its legitimacy in the eyes of bothSouthern Europeans (who would losetheir independence) and Northern

Europeans (who would pay for thesouth’s greed, stupidity, mismanage-ment and economic illiteracy). Theonly thing that will restore faith in

banks, insurance companies, pensionfunds and the like is if they are willingand able to take a big hit to protecttaxpayers. There is nothing that willmake a total EU takeover acceptable toGreeks and others, which is why they

will soon want to quit the EU – andthe German public will be deeply angry as it finally realises that every-thing it was ever told about the eurohas turned out to be a lie. It will soon

want out too. The EU has always worked on the basis that every crisis isgood because it invariably provides anexcuse to centralise powers. But thepresent nightmare could prove to be a

bridge too far and herald the begin-ning of the end for the entire project.Fun and games are about to start.

[email protected] Follow me on Twitter: @allisterheath

4th Floor, 33 Queen Street, London, EC4R 1BRTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowActing Night Editor Marion Dakers

Business Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alice Hepple

CommercialSales Director Jeremy SlatteryCommercial Director Harry OwenHead 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]

BY JULIET SAMUEL

EUROZONE▲

BANKIA, the Spanish caja group, wasforced to cut its float price drastically

yesterday as Eurozone turmoil threat-ened to derail a deal seen as vital tokeeping Spain’s banks out of fullnationalisation.

A source close to the situationreported that those on the deal wereconsidering shrinking its size by €100m last night, after cutting theprice to €3.75, well below its initialrange of €4.41- €5.05.

Bankia could now raise €3bn – atthe lower end of its target range fornew funds – in what bankers havecalled a “bellwether” float for

European financials. The cut-price float offers shares to

investors at 0.4 times book value after jittery international investors leftmuch of the book to be filled by domestic demand. But it is under-stood that the book was consideredcovered last night at the new price.

The syndicate, which includesDeutsche Bank, Bank of

America/Merrill Lynch, UBS and JPMorgan, has been fighting some of the worst conditions for EU bankssince the financial crisis, with many falling over six per cent yesterday.

Banca Civica, a smaller Spanish sav-ings bank group, is also hoping toraise €700m in a f loat this week andaims to close its book tomorrow afterdelaying its deal by a day.

Bankia forced to offerinvestors cut-price float

DEUTSCHE Bank’s Neil Kell and EdSankey have the unenviable task of pulling off DB’s part in the Bankiafloat, which is taking place in someof the most difficult conditionsimaginable for European financials.

Kell moved to Deutsche fromBank of America Merrill Lynch lastyear to become head of the finan-cial institutions group in equity cap-ital markets (ECM).

Deutsche has had a bumper yearfor financial equity capital raisingsso far, topping league tables in thesector year-to-date.

It has been on deals forCommerzbank, Danske Bank, VTBand Nomos.

MEET THE ADVISERS

DEUTSCHEBANK

NEIL KELL ANDED SANKEY

BY JULIET SAMUEL

CAPITAL MARKETS▲

VIRGIN GROUP NAMES NEW CO-CEOSRichard Branson’s Virgin Grouphas announced a managementreshuffle. Stephen Murphy, chief executive since 2004, will stepdown at the end of the year to takean advisory position in the group.He will be replaced by co-chief exec-utives: David Baxby, head of Virgin

Asia-Pacific and the aviation arm,and Josh Bayliss, general counsel.

NYLON AND BARCLAYS SETTLE£250M DISPUTEBarclays and Nylon Capital, a hedgefund, have settled legal action

brought by the UK bank which isconnected to its decision to invest£250m of “seed capital” into

Nylon’s funds.

CO-COS NOT ACCEPTABLE ASBANKS’ CAPITALHopes that innovative securitiesdevised in the wake of the bankingcrisis could count as top-quality capital were dashed yesterday.Central bankers on the FinancialStability Board ruled that “co-cos” —or contingent capital — would notqualify for the capital surcharges to

be imposed on 80 of the biggest banks.

BBC TRUSTEES CLAIM £40,00EXPENSES IN SIX MONTHS

The BBC trustees claimed expensesof £41,528 in the six months to theend of March this year, the Trustsaid yesterday. The outgoing chair-man, Sir Michael Lyons, who retired

at the end of April, claimed £11,566.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE Royal Bank of Scotland’srestructuring chief, Nathan Bostock is quitting the firm to join its rival,Lloyds Banking Group, as the new head of wholesale banking.

Bostock, will replace Truett Tate,the current head of wholesale bank-ing, in early 2012.

Truett is set to move to anotherrole as a vice-chairman at Lloydsand will retain a seat the bank’s

board. The appointment comes as part

of Lloyds’ chief executive AntónioHorta-Osório’s strategy to reshuffle

the board he inherited in February from his predecessor Eric Daniels.

Lloyds shake-upas Bostock joins

BANKING▲

8/6/2019 Cityam 2011-07-19


News 3CITYA.M. 19 JULY 2011

CREDIT rating agency Moody’s said yesterday that the US should scrap itsdebt ceiling entirely. The legislativecap creates “periodic uncertainty”,Moody’s argued, suggesting that America could adopt a “fiscal rule” torestrain deficit build-ups instead.

The statement preceded anotherday of political sparring in the US.

The possibility of America default-ing on its debts is “off the table”, UStreasury secretary Timothy Geithnerclaimed yesterday in an optimisticstatement.

Yet the White House later rebuffeda Republican plan to force future fed-

eral governments to balance their books, showing that progress in the

crunch talks remains slow.President Obama will veto the plan

on the off-chance that it gets through both House and Senate.

The Moody’s recommendation toabolish the debt ceiling was criti-cised by Tory MP Sajid Javid, who haslaunched a bill to introduce similarlimits on government debt in theUK.

“A self-imposed limit forces govern-ments to act before the market closesin itself,” Javid told City A.M.

“However difficult the situation inthe US, it would be a lot worse if it was allowed to get close to a marketimposed limit,” said Javid, who spent20 years working in London’s finan-cial markets.

“Compare it with what’s happen-ing in Italy and Greece,” Javid added.

Moody’s loses patience as

US debt talks ramble on

THE EU’s second round of stress testsprecipitated a sharp fall in European bank shares yesterday after beingslammed as “frustrating” and full of “widespread anomalies”.

Analysts were scathing about theEuropean Banking Authority’s (EBA)first ever tests, keeping price recom-mendations unchanged and sayingthat the exercise was effectively use-less as a tool for distinguishing

between risky and sound banks.Credit Suisse analysts called the

tests a “missed opportunity”, adding“the market remains correct to be worried about funding and liquidity”.

In its analysis, Barclays Capital said:“The variation by bank is enormous… This kind of variation hurts the credibility of this exercise, in our view.”

There was also a concern that thetests unduly penalised investment banking operations versus retail andassumed that a future stress scenario would mimic 2008.

Investec wrote that in the tests’earning assumptions “RBS was partic-

ularly disadvantaged”.UBS adds: “The tests provedfavourable for retail banks” and failedto adequately take into account thedifferent nature of the current crisis.

Credit Suisse agreed:“Securitisation holdings are dealt with in a very penal fashion… [which]does not take account of the fact thatthe major stress period (2007-2009) isin the past, and is based on the USexperience.”

Stress tests denounced by analystsas backward-looking and inconsistent

Obama opposes a plan to force the government to balance its books

BY JULIET SAMUEL

BANKING▲

ntertwined fates: Clockwiseom bottom left: Spanishrime minister José Luisodríguez Zapatero,ortuguese prime minister Joseocrates, Greek prime minister eorge Papandreou and ECBresident Jean-Claude Trichet.

BY JULIAN HARRIS

US ECONOMY▲

8/6/2019 Cityam 2011-07-19


8/6/2019 Cityam 2011-07-19


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ASSISTANT police commissioner John Yates yesterday followed the exampleset by his former boss and quit overthe hacking scandal yesterday.

His resignation had been widely expected after his judgement wascalled into question over his decisionnot to reopen the phone hackinginvestigation in 2009 and his relation-ship with former News of the Worlddeputy editor Neil Wallis, who waslater employed by the Metropolitanpolice.

Fresh allegations emerged lastnight that Yates helped Wallis’ daugh-ter get a job in the Met, with theIndependent Police ComplaintsCommission (IPCC) saying it willinvestigate. Yates branded the specu-lation “downright malicious gossip”and denied any wrongdoing. He saidhe expects an inquiry to show heacted correctly when he did notreopen the case.

His resignation follows that of for-mer police commissioner Sir PaulStephenson, who quit on Sunday night after coming under intensepolitical pressure.

Yates is the latest in a string of highprofile figures dragged under by the

phone hacking tidal wave. Now alleyes will be on James and RupertMurdoch as they face the media

select committee later today. The reverberations from the hack-

ing scandal also reached ratingsagency Standard & Poor’s, which yes-terday put News Corp on negativecredit watch.

In a bid to limit further damage,News Corp yesterday announced theformation of an independentManagement and StandardsCommittee (MSC), which will bechaired by Lord Grabiner QC. TheMSC will work with ongoing investi-gations and conduct its own inquiriesinto the events that led to the closureof the News of the World.

Meanwhile, former News of the World showbiz reporter Sean Hoare, who alleged his then-boss Andy Coulson encouraged staff to hack intopeople’s voicemails, was found dead

yesterday. Police said the death was“unexplained” but is not being treat-ed as suspicious.

Yates of Yard

falls on swordover hackingBY STEVE DINNEEN

MEDIA▲

LORD Anthony Grabiner QC will headup News Corp’s new damage-limita-tion vehicle, named the Managementand Standards Committee (MSC).

He will be responsible for provingNews Corp is willing to investigate

wrongdoing and work with policeover the hacking scandal.

The 66-year-old, famed for his no-nonsense approach, became a house-

hold name in 2010 when he won twocases against the for-mer owners of LiverpoolFootballC l u binvolv-ing thesale of

t h eclub.

Lord Grabiner to oversee newdamage limitation vehicleMEDIA

▲


lANOTHER DAY OF TURMOIL FOR MURDOCH EMPIRE

8:30amMayor of London BorisJohnson says Met assis-tant commissioner JohnYates should face difficultquestions following theresignation of his boss SirPaul Stephenson. He sin-

gles out Yates’ relation-ship with former News of the World deputy editorNeil Wallis, who wasemployed by the Met.Ministers were notinformed of the hire.

2:00pmAssistant commissionerJohn Yates steps downamid intense politicalscrutiny, including pres-sure from Boris Johnson.Yates says he is unableto continue in his work

while the scandal is stillraging. He denies anywrongdoing. Earlierreports suggest he wasabout to be suspendedwhile the police look atallegations against him.

6:00pmPolice reveal that formerNews of the Worldreporter Sean Hoare,who was questionedunder caution aboutphone hacking, is founddead in his flat. Police say

the circumstances are“unexplained” but notsuspicious. He was thefirst reporter to go on therecord with allegationsthat Andy Coulson knewabout phone hacking.

10:15amDavid Cameron revealsparliament will sit for anextra day on Wednesday,in a rare delay to thesummer recess. Heextended the calendarso that MPs can discuss

the issues raised bytoday’s media selectcommittee hearing intothe phone hacking scan-dal. Ed Miliband had ear-lier called for parliamentto sit the extra day.

ANALYSIS l News Corp.

$


17.0

16.6

16.2

15.8

15.4

15.3818 Jul

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COMMODITIES giant Glencore con-firmed its agreement to acquire$475m (£295m) of copper assets inPeru yesterday.

The deal was struck between itssubsidiary Glencore Internationaland Hong Kong-based CST Miningand will see Glencore take a 70 percent stake in Marcobre, the owner of the Mina Justa copper project insouthern Peru.

The takeover gives Glencore access

to a resource pile of more than 3mtonnes of contained copper and

strengthens its position as a produc-er as well as a trader in the sought-after industrial metal.

The takeover is subject to due dili-gence but is expected to complete inOctober and follows Glencore’srecent purchase of Sable, a Zambiancopper producer, for £28m lastmonth.

“Mina Justa would ideally comple-ment Glencore’s existing polymetal-lic mining operations in Peru, andadd significant value to our world- wide group of copper mining assets,”said Daniel Mate, co-director of

Glencore’s zinc, copper and leaddivision.

Glencore seals agreement to buy£295m Peruvian copper assets

ANDY Hornby, the former chief exec-utive of Alliance Boots and HBOS, has been appointed chief executive of Coral, the bookmaker, ending a yearlong search to find a replacement forNick Rust, who left to join Ladbrokeslast year.

Hornby stood down from AllianceBoots, owner of the high streetchemist, in March, after saying heneeded “a few months’ break” follow-ing “an intense five years.”

Hornby had previously been chief executive of HBOS during the finan-cial crisis, when saw losses of £11bn before it was bought by rival Lloyds

Banking Group. A spokesperson for Coral con-firmed that the firm had announcedthe appointment internally on Friday and Hornby started in his new role yesterday, following weeks of specula-tion surrounding his appointment.

“We are delighted to confirm that Andy Hornby has been appointedchief executive and will be responsible for Coral’s retail and online opera-tions,” he said.

Andy Hornby starts aschief executive at CoralBYKASMIRA JEFFORD

RETAIL▲


ANALYST VIEWS: IS PHILIPS OVER THEWORST? Interviews by Steve Dinneen

“

MANOJ LADWA | ETX CAPITAL

These numbers highlight the difficulties even multi-nationals are havingunder tough conditions. While the company seems to be pulling out all stops torevive its fortunes, given the tough economic backdrop, investors are likely to ask:is this is enough to halt the decline?

”

“

JONATHAN JACKSON | KILLIK & CO

Profit at the EBITDA level was €370m, ahead of analysts' expectationsof €304m. The EBITA margin declined to 7.1 per cent of sales, from 9.5 per cent ayear ago, with the increase in margin in healthcare being offset by lower marginsin consumer lifestyle and lighting.

”

“

TOM MULLER | THEODOOR GILISSEN BANKIERS

The buyback programme and the clear mid-term goals are positive, asearnings are going to be under pressure for a while.

”

THE tale – probably apocryphal – of Alexander’s appointment atOrange is that, over dinner, he wasasked by a senior director what he would do if he was in charge. Thedirector was so blown away by the vision, he asked Alexander to runthe company.

Four years later, after the merger with T-Mobile, the City has inter-preted Alexander’s shock departureas a sign that EverythingEverywhere owners France Telecomand Deutsche Telekom have lostfaith in that vision.

Industry sources say top brass areunhappy with the progressEverything Everywhere has madetowards hitting tough profit mar-gin targets and this, coupled withgenuine “personal reasons” for Alexander, led to the departure.

Now the job of hitting these tar-gets will fall to Orange’s Europeanhead Olaf Swantee.

The charismatic Alexander,known for his love of racingsports cars, will remain in

the position until 31 August, whenSwantee will take control.

His departure will mark the sec-ond time Alexander has left a top job in the telecoms industry – thefirst being after the sale of VirginMobile, which he was instrumentalin setting up, to NTL in 2006.

Alexander, already a rich man before joining Orange, will remainon the payroll as ac o n s u l t a n tuntil at leastthe end of the year and City A.M. under-stands he may also be kept onas an adviser tothe firm afterthis.

Tom Alexander quitsEverything Everywhere

BYSTEVE DINNEEN

TELECOMS▲

TOM ALEXANDER

BYALISON LOCK

COMMODITIES▲

PHILIPS flagged a grim outlook aftera surprise quarterly loss that was driv-

en by writedowns on recent acquisi-tions to reflect weak consumerdemand in Europe and the US.

The Dutch group yesterday announced an unexpected €1.4bn(£1.2bn) writedown on healthcareand lighting acquisitions thatdragged it to a €1.3bn second-quarternet loss, just weeks after profit warn-ings at two key divisions.

It also gave a bleak outlook for thenext two quarters.

Philips posts aloss of £1.2bn

BYHARRY BANKS

PHILIPS▲

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SHARES in embattled Bank of America slumped up to four per cent yesterday, leading the Dow Jonesindustrial average lower for a spell,after reports that the bank needs toraise up to $50bn of fresh capital tomeet regulatory standards.

The US bank, which reports second-quarter results today, was said by ana-lysts to require a massive cashinjection to offset expenses and losseslinked to bad mortgages.

Forecasters expect the firm toannounce earnings per share of

around $0.95 when the firm posts itsfigures before the US opening bell.

TECH giant IBM’s quarterly profitrose eight per cent from a year earli-er, beating Wall Street forecasts, buoyed by strong growth in sales of its computers and software.

The world’s biggest maker of main-frame computers reported second-quarter net income of $3.66bn(£2.88bn), or $3.00 per share, com-pared with $3.39bn, or $2.61 pershare, a year earlier.

Revenue climbed 12 per cent to$26.7bn, helping prompt a rise infull-year forecasts at the firm.

IBM said signings of new businessat its services division surged 16 percent in the second quarter, trouncingexpectations and signaling strongspending on technology by corpora-tions.

IBM said that signings rose to$14.3bn during the second quarter, beating Wall Street projections andeasing investor concerns after theclosely watched number dropped inthe first quarter.

Deutsche Bank said in a researchnote that analysts on average had

expected signings of $12bn to $13bn.Investors believe signings is a key

indicator of future profits. But IBMsays the focus should be more ontotal backlog of business, which grew by $15bn during the quarter to$144bn.

“Good service signings reflect thatthey are capturing their share of thesolid IT spending that we’re seeing inthe market now,” said Edward Jonesanalyst Josh Olson.

Analysts said IBM marked a strongstart to the tech earnings season, with other bellwethers such as Apple, Intel and Microsoft set toreport quarterly results in comingdays.

IBM trounces

forecasts with8pc profit rise

HALLIBURTON, the world’s second-largest oilfield services company, beatforecasts with a 54 per cent jump inquarterly profit yesterday thanks to aUS drilling boom.

Halliburton is the leader in theNorth American market in pressurepumping technology that enables oiland gas producers to tap shale fields,

and its second quarter results show it benefited from that market posi-tion.

Second-quarter net profit climbedto $739m (£460m), or 80 cents pershare, from $480m, or 53 cents pershare, a year earlier. Excluding one-time items, the company earned 81cents per share, topping the 74 centsper share that analysts had on aver-age forecast. Revenue rose 35 percent to $5.9bn.

Halliburton posts54pc profits jump

CVC Capital is thought to be plottingto buy ConvergEx, a US trading-software company, which is part-owned by Bank of New York Mellon.

A deal valued at $1.9bn (£1.2bn)may be announced as soon as this week, it emerged yesterday.

ConvergEx, formed through amerger in 2006, sells software prod-ucts and technology-enabled servicesfor asset managers and other finan-cial firms. The firm had also beenconsidering an initial public offer-ing.

A spokesperson for ConvergExdeclined to comment last night.

CVC sizes upConvergEx bidCapital worrieshammer BofA

BYHARRY BANKS

TECHNOLOGY▲

BANKING▲

PRIVATE EQUITY▲

BYHARRY BANKSENERGY▲


TRANSFORMATIONAL TOYS BOOST HASBRO

HASBRO, the toy company said strong demand for itsTransformers action figures helped boost itssecond quarter profitsby 33 per cent. For thethree months ending

June 26, the maker of the Monopoly boardsaid net income rose to$58.1m (£36m) compared with $43.6m inthe same quarter a year earlier. Its boys’ line saw sales almost double to $460.4m, off- setting sluggish salesacross other divisions. Picture: REX

ANALYSIS l IBM

$


176.5

175.5

174.5

174.2918 Jul

8/6/2019 Cityam 2011-07-19


healthy Italian food – billed as analternative to “the same old loop of

Prêt à Manger, Eat, Itsu and Wasabi” –is venture capitalist Arjun Waney, theserial entrepreneur behind the Rokaand Zuma empire.

Land wouldn’t reveal how much Waney has invested – “it’s not really appropriate for us to say how muchhis stake is” – and the man himself couldn’t shed any more light as he iscurrently on a boat somewhere nearCannes. No doubt Waney will contin-ue his “great guidance” – andannounce launch dates for his forth-coming Mayfair ventures Aurelia andBanca – on his return from theleisurely two-month family vacation.

THE SOUND OF MUSICSING when you are winning – or when you are an investment manager whose company sends you on a train-ing evening to learn “control” from amaster aria singer.

Such was the fate of Investec’s TomMilnes, Michael Turner, AngusOakshott, Jules Porter and LukeKauntze, who last week found them-selves being instructed by George Von Bergen, the star of Opera

Holland Park’s production of LeNozze Di Figaro. Von Bergen taughtthe senior executives how to “takecontrol of the audience”.

The investment guinea pigs alsolearned the importance of “powerfulpresentation”, “emotional projec-tion” and using eye contact and body language to convey “key messagesand into-nations”– all of

which are, apparently, “valuable skillsin the investment business”. Client

meetings at Investec will never be thesame again.

SPANISH JACKPOTUBS pulled out all the stops to beappointed as an adviser on the part-privatisation of the Spanish nationallottery – the biggest IPO in Spain onrecord – by presenting to the Loteriasexecutives on iPads, as reported in TheCapitalist on 23 June.

Pleasingly, the Swiss bank’s effortshave paid off, after The Capitalist hearsUBS has made the final advisory cuton the €7bn float, alongside CreditSuisse, JP Morgan Chase andGoldman Sachs with Spanish firmsBBVA and Santander.

That’s an estimated €11m (£9.7m)advisory payday for an outlay of inthe region of £5,000 for, say, a dozeniPads, currently retailing at £399 onthe Apple store. As the UBS bosses willno doubt agree, that’s not a badreturn on investment.

WIZARDS OF EC4BERWIN Leighton Paisner has runtwo private Harry Potter screenings before so, to complete the trilogy, itput on a third film night at theOdeon in Leicester Square for parttwo of Harry Potter and the Deathly Hallows… in 3D.

BLP partners Michael Wistow,Matthew Kellett, Jonathan Kropman, Anthony Lennox and Chris De Pury came along with their children, asdid 450 clients – also with their fami-lies – from BNY Mellon, Tesco, RBSand Land Securities.

BLP is proud of its strong clientretention rate, pointing out that 80

per cent of its top 20 clients in 2001are still with the law firm today – astatistic it believes is testament to“the fact we value and include ourclients closely in the f irm’s events”.

Not that closely, though – in a blow for readers hoping for a picture of BLP’s corporate contacts dressed as boy wizards,The Capitalist can confirmonly the kidsdressed up.

POACHERS TURNED GAMEKEEPERSSNARE GOLDMAN WITH BEST BREWSHARP-suited, discerning of taste and with a generous disposable incomethey can easily take elsewhere.

Yes, the Goldman crew are a toughcrowd – but even the investment bank’s most hard-nosed deal-makersare being won over by the new Italianopposite the Goldman Sachs fortresson Fleet Street, which is gaining a rep-utation for the best coffee in the City.

The roaring trade in top-end iced

lattes and freshly ground coffeefrom Broadway Market is even lur-ing over Merrill Lynch bankers fromtheir HQ off Paternoster Square –mainly because the restaurant wasset up by their former colleagueDaniel Land, 28, who left his highly paid job in corporate broking to setup the “reckless venture”.

A case of it takes one to know one,then. Land, whose business partner

in the Coco Di Mama café is ex-Bain &Company consultant Jeremy Saunders, also 28, agreed the secretof the pair’s success is that “we wereour customers”. “We understand thefact that our City clients are generally having a bad day,” said Land. “Gettingout to buy your lunch is the highpoint in the day for people who are working unbelievably hard.”

Also backing the concept of

Meet the owners of Goldman Sachs’ new canteen: Jeremy Saunders and Daniel Land

Von Bergen (centre) and his Investec singers

The Capitalist10 CITYA.M. 19 JULY 2011

EDITED BY

HARRIET DENNYSGot A Story? [email protected] The Capitaliston Twitter: @citycapitalist

8/6/2019 Cityam 2011-07-19


8/6/2019 Cityam 2011-07-19


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HEDGE fund giant Man Group yester-day paid $355m (£220m) to take overall residual exposure to LehmanBrothers from funds acquired when it

bought GLG last year.Man will take over unresolved legal

claims on the estate of the failed USinvestment bank dating from whenLehman was prime broker to a num-

ber of GLG funds including the $2.8bnGLG Euro Long Short fund.

Chief executive Peter Clarke saidthe decision would enable Man toattract more investment to the affect-ed funds.

“These transactions will remove theremaining uncertainty from funds

with residual claims against theLehman estates, to the benefit of bothexisting and new investors,” he said.

Man paid the cash to transfer overthe exposure to the Lehman estates atits current net asset value. As a result,its net cash position fell to $545m

from $900m and its regulatory capitalsurplus was cut by $50m to $850m.

While it could lose value if it isawarded nothing from Lehmans’

bankruptcy proceedings, it willreceive any proceeds from successfulclaims and the deal is expected to beneutral over three years.

Analysts said the move shouldimprove Man’s fund inflows.

“This will make it easier to sell theEuropean long short fund going for-

ward,” said Singer Capital analystSarah Ing.

Man Groupbuys Lehmanestate claims AUDITORS of major UK companies are

still failing to challenge the informa-tion given to them with sufficientscepticism, a new report today shows.

Less than half the audits reviewed by the Financial Reporting Council inthe past year were rated good, while13.5 per cent required significantimprovement.

The FRC’s Audit Inspection Unit(AIU) also admitted that “a rump” of auditors had not improved, whilesmaller accountancy firms struggledto audit large finance groups andcompanies with big internationaloperations.

“I am confident that firms are defi-nitely trying to improve their auditquality,” FRC audit director PaulGeorge told City A.M. “But there is arump of auditors that don’t seem to

be improving and we may need moretools to reduce that further.”

The report added that some auditsfailed to question statements fromcompany management. “The AIU hascome across cases where manage-ment representations were the mainsource of audit evidence,” it said.•The Financial Services Authority isinvestigating whether paying for trad-ing order flow is an inducement andconflict of interest that may preventinvestors from getting the best deal.

Audits still failto challengefirms, FRC says

BYALISON LOCK

FINANCIAL SERVICES▲

FINANCIAL SERVICES▲


Man Group Chief executive Peter Clarke said the deal would “remove uncertainty”

ANALYSIS l Man Group

p


250

246

242

238

234

231.0018 Jul

A cash outlay now that opens up itsfunds to new flows for the long termMAN Group is determined to up thepace of its fund inflows and this is acalculated move to make that hap-

pen. By quantifying the risk associat-ed with to date unresolved claimson the Lehman estate, the dealmakes good sense, but the conse-quences will be still better.

While there is a chance the settle-ment could involve a writedown onthe value of the assets, their valuecould well increase and Man would

benefit from any improvement.Over and beyond that, this allows

Man to move on from the past. It

lifts uncertainty from all affectedfunds, from European to north

American, which allows Man to

market them more aggressively. Analysts expect Man to recoup

the $355m cash and $50m regulato-ry capital hit within three yearsthanks to dramatic improvementsin its fund flows. By pricing that risk and paying upfront, Man gains repu-tationally as well as financially.

BOTTOMLINEAnalysis by Alison Lock

8/6/2019 Cityam 2011-07-19


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THE owner of a third of SouthernCross’ care homes is to take controlof their operations and run themthrough a newly-formed manage-ment company, it said yesterday.

NHP, a property investor, had beenexpected to hire a care provider tocontinue running its 249 homes fol-lowing the decision to break upSouthern Cross’ estate. Instead NHP

will partner with Court Cavendish,the healthcare turnaround firm

founded by former Priory ownerChai Patel (pictured), to launch theirown operating company.

Court Cavendish has advised NHPsince January and will co-invest inthe new management firm, which

will retain all existing SouthernCross staff. The company shouldlaunch in four months’ time whenSouthern Cross winds down.

“The needs of those who currently live in these homes, and their fami-lies and carers, are a matter of the

greatest importance to all of usadvising those involved in this chal-lenging situation,” Patel said.

“We hope that this announcementis the start of bringing to an end theuncertainty that residents, theirfamilies and staff in all the homeshave had to endure over the last few months.”

NHP said it would use £28m of interest payments kept back from itslenders, with their consent, toensure the operating company wasfinancially robust.

Southern Cross,

which cares for31,000 elderly anddisabled peoplein the UK, ceasedtrading last week after announcingthat its landlordshad approved the

break up of itshomes.

Care landlordNHP to run its

homes itself

ROCKHOPPER Exploration, the oiland gas explorer, pressed ahead withits hunt for oil in the NorthFalklands, after drilling its thirdappraisal well on the Sea LionDiscovery feature last week.

The group told investors yesterday that it had spudded the well on 15

July and expected to complete thedrilling within five weeks.

Located 4.1km west of the origi-nal discovery well, the group willInvestigate reservoir and hydrocar-

bon in what will be the f irst test out-side of the 155m barrel minimumcase area.

Rockhopper, which was foundedin 2004 to hunt for oil and gas in theFalkland Islands, made its first dis-

covery last year followed by a “signif-icant” oil and gas discovery at theSea Lion field earlier this year.

Shares in the company closed at219p falling 3.68 per cent, however,surprising analysts. CanacordGenuity expect the share price tomove closer to their pricetarget of 593p as Rockhopper continues tomake progress in its drilling cam-paign.

Rockhopper Exploration spuds thirdSea Lion appraisal well in Falklands

BYALISON LOCK

SUPPORT SERVICES▲

BYKASMIRA JEFFORD

OIL & GAS▲


SHELL SEES SALE OF CANADIAN STAKE

Royal Dutch Shell(led by Peter Voser, pictured) is preparing to sell off itsC$16.2bn (£10.5bn)stake in a gas pipeline project innorthern Canada,

as well as other assets in the region.The Mackenzie pipeline project,has been under regulatory review for years and its fatehas long been indoubt, despite winning formalapproval last year.

Picture: REUTERS

8/6/2019 Cityam 2011-07-19


TRAVEL operator Thomas Cook yester-day announced that it had sealed animproved deal for its credit facility.

The lending arrangement, compris-ing a £200m loan and an £850m cred-it facility that can be called upon if required, now runs until May 2014.

Shares in Thomas Cook rose aroundfour per cent when the London Stock Exchange opened after the statement.

Last week, the firm said profits would be hit by unrest in the Middle

East and North Africa, and by weak UK spending.

The group also warned that theinterest margins on the facilities had been reduced with immediate effect. The rate is now 2.25 per cent on theloan, and between two and 2.5 percent on the credit facility, dependingon how much is used. The margin hadpreviously been 2.75 per cent for bothfacilities.

The group is currently looking tosell some hotels and other assets, worth an estimated £200m, as it seeksto reduce its debt. Finance directorPaul Hollingworth said Thomas Cook had around £900m of available cashand committed facilities.

He said: “We are focussed on reduc-ing our debt and strengthening our balance sheet and we have a number

of initiatives underway to deliverprogress on this, including the dispos-al of certain hotel and surplus assets.”

The company has been hit by disrup-tion to a string of its holiday destina-tions, including Tunisia and Egypt.

Its French business had been paticu-larly badly hit, it admitted. The compa-ny is now estimating profit for the yearto 30 September of around £320m while the City had pencilled in a figureof £380m.

However, Thomas Cook said averageUK selling prices for summer holidays were up four per cent as more cus-

tomers bought packages that includedfood. Despite the “difficult tradingconditions”, bookings by UK cus-tomers are up by one per cent for thekey summer season. The company saidit was resisting raising holiday prices because customers were so cashstrapped.

Thomas Cookseals a newcredit dealBY JOHN DUNNE

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ENGINEERING giant GKN hassecured a £174m deal to take overGermany’s Stromag, a leading man-ufacturer of clutches and brakes.

The business is being boughtfrom a private equity firm, a groupof investors and management for atotal of €164m (£146m) in cash andthe transfer of €31m of Stromag’s

debt, GKN announced yesterday. The business will go into GKN’sLand Systems division which buildsmajor parts for vehicles mainly used in farming, mining and con-struction.

Stromag’s core products includehydraulic clutches, electro-magnet-ic brakes and flexible couplings.

Its headquarters are in Unna,Germany and it has operations inGermany, France, USA, Brazil, Indiaand China.

Last year Stromag reported salesof €111m (£97.4m), profit before taxof €10m and gross assets of €103m.

GKN said it expected sales for this year to be around the same level

and that the acquisition price wassomewhere between 7.5 and eighttimes earnings.

Executive director Andy ReynoldsSmith said: “In combination withour existing business this [acquisi-

tion] will provide a strong platformto accelerate growth in existingmarkets, together with access to anumber of attractive new industrialsegments including renewableenergy.”

GKN snaps up Germany’s Stromagin £174m deal to boost land unit

BY JOHN DUNNE

ENGINEERING▲

ANALYSIS l Thomas Cook

p


95

85

75

67.0018 Jul

Debenhamsin debt pilerefinancing

DEBENHAMS has refinanced its cred-it facility at reduced interest rates.

Lenders for the department storechain’s £650m facility, made up of a£250m long term loan and £400m inrevolving credit, have reduced thegroup’s cash interest rate by 0.50 percent to four per cent.

The lenders Barclays CapitalLloyds Banking Group and RoyalBank of Scotland have extended theterms to October 2015 with a furtheroption to extend to October 2016.

The refinancing costs will be£3.3m.

The ability to raise cheaper money appears to reflect Debenhams’ recentperformance, which has seen like for

like sales up three per cent comparedto the first half of 2010.

Finance director Chris Woodhousesaid he was “delighted” at securingDebenhams’ medium term funding.

However, the company saw itsshare price edge down in early trad-ing. Debenhams said last month it would meet forecasts for yearly profitas it defied the general doom andgloom in the retail sector with a jump in second-half sales.

The company said that consumers were still buying “treat” items likecosmetics while childrenswear wasalso performing well.

Debenhams said sales at storesopen more than a year, excluding VAT sales tax, were up 1.5 per cent inthe 17 weeks to 25 June. It forecast year-end net debt of about £400m.

BY JOHN DUNNE

RETAIL▲

NEWS | IN BRIEF

United Carpets in profit boostUnited Carpets yesterday reported anincrease in profit for fiscal 2011, butsaid it remains cautious about theremainder of the year. In preliminaryresults for the year to 31 March, thecompany said its profit before taxincreased 13.2 per cent to £1.24mfrom £1.1m last year. Excluding excep-tional items, pre-tax profit was£1.48m, up from £1.46m a year ago.On a per share basis, earnings

increased 16.7 per cent to 0.97p from0.84p in the previous year.

Fenner revenues on the riseEngineering group Fenner said todaythat third-quarter revenue will be upon last year after seeing strongdemand from the coal sector. Thegroup, based in Hessle near Hull, said arecovery in industrial markets hadhelped it to grow its conveyor beltingand advanced engineered productsdivisions. Earlier this month itannounced that its subsidiary EnerkaApex Belting Pty had bought the gross

assets of privately owned Statewide,based in Burnie, Tasmania, for £2.63m.

SThree to pay special dividendRecruiter SThree reported a 21 percent rise in first-half profit yesterdayand said it would pay a special divi-dend after seeing a recovery across itsmarkets. SThree, which finds jobs forIT professionals in the finance, energyand healthcare sectors in Britain,Europe and Asia, posted a gross profitof £90m for the six months to 29 May,up from £74.3m in the same period ayear ago. The group said it would pay

a special dividend of 11p per share inDecember.


ANALYSIS l GKN

p


240

236

232

228

224

227.9018 Jul

DIXONS chief executive John Browett was paid more than £1m in the last year despite the company being hit by tough trading in the electronicsretailing market.

His finance director NicholasCadbury, who is stepping down, waspaid £564,000 including a cash bonusof £62,000.

A chart in the report called TotalShareholder Return provided by thecompany shows that a hundredpounds invested in Dixons five years

ago would now be worth around £15.Defending the pay packages,

Dixons said that neither executivehad received a reward based on thegroup’s performance.

Instead the bonuses were for meet-ing “personal objectives”. The compa-ny has not explained what thoseobjectives were.

Last month the retailer reported a£224m annual loss.

The electricals retailer said its turn-around plan, which includes £50msavings a year, was on track. It is pin-ning its hopes on 3D TV sales andhigh levels of service.

Dixons hands Browett

£1m despite big losses

John Browett has pledged to turn around the ailing company Picture: REX

BY JOHN DUNNE

RETAIL▲

8/6/2019 Cityam 2011-07-19



A DROUGHT of available residentialproperty in London is propping upprices and rents, a survey in the cap-ital revealed yesterday.

June’s stock for sale was down 20per cent on the previous year, whilethere was a 30 per cent fall in avail-able rental properties, according toestate agents Douglas & Gordon.

“The shortage of available proper-ties and increasing rental prices inLondon is encouraging tenants tostay put,” commented director gen-eral Virginia Skilbeck.

The number of tenants choosingto terminate their current tenancies was down almost 30 per cent in Junecompared to the same time last year,she said.

“Our figures show long term ten-ancies are becoming more common-place and we expect to see the

number of tenancies ending eachmonth to decline further.”

June and July are typical peak times for families to move, comingahead of the new school year inSeptember.

“With many families choosing toremain in properties in their chosencatchment area, there is currently asevere shortage of suitable family homes in London,” Skilbeck said.

The average price of a one bed-room flat in the capital has reach£368,333 in the first three months of the year, according to Douglas &Gordon – up 1.8 per cent from£361,667 at the end of last year.

“Buyer demand continues to out-strip the supply of good properties inLondon, ensuring prices remainsteady,” added Ed Mead, director of Douglas & Gordon.

“Most of the properties sell because they have been priced realis-tically.”

Fall in London

house supplyBY JULIAN HARRIS

HOUSING▲

MID-SIZED and large businesses haveseen their fortunes turn around inthe last year, with the number of

insolvencies dropping notably. The failure rate of firms thatemploy 100 to 500 people more thanhalved last month, compared to a year earlier.

The number of insolvencies forfirms between 51 and 100 employees

was also less severe than last June,falling by 13 per cent.

“Our analysis also shows that busi-nesses in the north seem to be faringslightly worse than their southern

counterparts,” commented Max Firthof Experian, which compiled thedata.

The highest rates of business fail-ure were seen in the north east, north west and Yorkshire. The lowest rate was in the south west and London.

Mid-sized and large firms see adrop in insolvencies in last year

UK ECONOMY▲

When it makes sense for the Top Dog to pitch

FEW need reminding how treach-erous current conditions inEurope’s equity markets are.Russia’s Valinor recently became

the 25th pulled listing in Europe,Middle East and Africa so far this yearand a 15 per cent downwards repric-ing of the Spanish bank Bankia yester-day underlined the fragility of

investor appetite for new issues.So it is perhaps no surprise that banks will fight increasingly aggres-sively to get on the mandates of the juiciest and more certain flotations.

The recent scramble to get aboardthe flotation of the Spanish lottery company Loterias prompted UBS bankers to attend the pitch meeting with iPads in tow rather than the con- ventional powerpoint presentation.

But there’s nothing quite like bringing out the Top Dog to bat forthe cause at pitch meetings. SoGoldman Sachs’ chief executive LloydBlankfein attended a pitch meeting

for the imminent flotation of theGerman pharmaceuticals groupEvonik in Essen, Germany.

Evonik is owned by CVC and RAGFoundation and if a float goes aheadto raise more than $7bn that willmake it Germany’s second largestever equity money-raising exerciseafter Deutsche Telekom. Not a badone to work on, as Goldman now is.

Blankfein is by no means the only

bank chief executive to play an activerole in pitching. JP Morgan’s JamieDimon met with the travel reserva-tions group Amadeus in Londonahead of last year’s f lotation. The

meeting was evidently successful ashis bank ended up as one of the advis-ers on the deal.

Deutsche Bank’s Josef Ackermannis understood to have joined the pitchfor the huge Agricultural Bank of China flotation and Bob Diamond,the chief executive of Barclays Bank,attended a meeting ahead of Peter Wood’s esure insurance group aheadof a possible float.

Diamond’s presence is down to hisrelationship with the founder Wood, who he knows from his days when heset up Direct Line (and they are bothChelsea fans). But the Barclays boss is

also said to attend pitch meetings with the government’s UKFI.It is clear that seeing a bank chief

executive at an IPO pitch is no longerthe surprise it once was. “The dealsare sometimes so massive and therelationships so key to winning themandate that sometimes you have topull out all the stops,” said one banker.

[email protected]

INSIDE TRACK

DAVID HELLIER

NEWS | IN BRIEF

FSB calls for VAT breaksA temporary break from VAT should begranted to the tourism and constructionindustries to boost the economy, theFederation of Small Businesses (FSB)argued yesterday. VAT should be cut tofive per cent for a year in the two sec-tors, the FSB said. “Consumer demand isa large barrier to economic growth so aVAT cut would encourage people to

spend in these areas,” a spokespersonsaid. Morale among small businesses

was down in the second quarter, com-pared to the beginning of the year, theFSB’s latest confidence survey hasfound.

US home builder sentiment upUS home builder sentiment rose morethan expected in July but remained nearhistoric lows, the National Association of Home Builders said yesterday. The

NAHB/Wells Fargo Housing Marketindex rose by two to 15 in July.

8/6/2019 Cityam 2011-07-19



FINE wine remains a good choice forinvestors, who enjoyed steady gains of over 13 per cent during the first sixmonths of 2011, according toBordeaux Index.

Gary Boom, founder and MD of thefine wine merchant, said that 15 percent growth in wine sales in the firstquarter of the year reinforced the“health of the wine market in gener-al”, in contrast to the volatility seenin global financial markets.

“Asia remains a key market,accounting for 45 per cent of totalsales,” said Boom.

“Although the region’s share of theglobal market fell slightly, the overallnumbers are solid.”

While Lafite remained the wine of choice for the Asian market, globally its sales fell by 17 per cent. BordeauxIndex attributed this to the fact thathighly influential critic Robert Parkerdowngraded the 2008 Bordeaux,

which also led to reduced sales of Mouton, by 15 per cent, and Latour,

by 16 per cent.It was the first time in many years

that Lafite, described by Boom as a“power-house”, occupied most of the

loss positions.Boom explained: “Taken in isola-

tion, Lafite’s fall is not particularly dramatic – but declines of aroundfive per cent for both 2003 and 1986provided a worthwhile reminder thatprices can go down as well as up.”

The Bordeaux 2010 en primeurcampaign, which was hotly anticipat-ed by many as one of the vintages of the century, has shown erraticresults.

A weakened pound, price rises of between 10 and 15 per cent and plen-ty of competitively priced 2009options available, contributed to afall in sales volumes of approximate-ly one third.

However, actual sales values fell by less than 10 per cent, reflecting thehigher prices and a market biastowards more expensive wines.

“Where there was a combination of critical praise and fair-ish pricing,there’s abundant demand for theupper echelons of Bordeaux,” saidBoom.

“This is a marked contrast to thelikes of Cos d’Estournel, Leoville LasCases and Palmer. Here sales volumesdipped markedly as potential buyers

were left without a compelling rea-son to part with their cash.”

FINANCIAL services group WHIreland yesterday swung to a half-yearprofit on a 30 per cent rise in groupturnover on last year.

The AIM-listed firm credited its£0.71m pre-tax profit for the sixmonths to the end of May on costreductions under a new managementteam, and flagged up new products

that will propel further gains this year.

Its private clients business drovethe firm’s improving fortunes, post-ing profits of £1.7m.

WH Ireland also sold its Australian WHI stock broking business in theperiod, with the firm noting thatprofit including this disposal was£1.5m.

The company warned that thestock broking market remained “very difficult”, with reduced trading vol-umes and flat markets making for a

nervous six months.But chairman Rupert Lowe was

upbeat about the rest of the year.“The Group’s strategic focus is

clear, and with new revenue streamsincluding market making in corpo-rate stocks, we look forward to fur-ther expanding the team and ourpresence in our market,” he said in astatement.

The group said the changes toenterprise investment scheme (EIS)tax relief planned for 2012 and thelaunch of a new structured products

range are set to generate fresh rev-enues.

WH Ireland swings into profit as costcuts and private client branch pay off

UK tech firm Seeing Machines saw itsshares rocket 25 per cent yesterday

after Toshiba said it would use itsfacial recognition technology in itsnew 3D laptop.

Japanese tech giant Toshiba is lead-ing the way in glasses-free 3D laptops,

which track users’ eyes to calibrate itsdisplay.

Seeing Machines will receive a roy-alty for every laptop sold with itsFaceAPI technology as part of the deal.

The market hopes this major con-tract win could be the first in a string

of lucrative deals in the pipeline forSeeing Machines.

The company, which has a marketcap of £10.2m, also uses its eye andfacial feature tracking systems for the

consumer electronics, scientific anddriver safety markets.Seeing Machines chief executive

Ken Kroeger said: “We believe thislaunch is the first of many and willprovide strong impetus for growthof the FaceAPI business particularly in the consumer electronics mar-ket.

“FaceAPI is uniquely able to provideface tracking with the required accu-racy and reliability, using a standard

camera, and without being overly demanding of the computer’s proces-sor. This is only the beginning of anew era in Glasses-free 3D.”

Seeing Machines jumps 25pcBY STEVE DINNEEN

TECHNOLOGY▲

Investors in

fine winestoast gainsBY CAITLINMORRISON

INVESTMENT▲

BYMARION DAKERS

BANKING▲

NEWS | IN BRIEF

Rank Group shares soarShares in Rank Group jumped 6.2 percent after it became clear the bingoand casino operator will retain itsLondon listing, ending lingering ques-tions in the wake of a 150p a shareoffer from Hong Kong-based GuocoGroup. The Rank board initially said thedeal significantly undervalued the com-pany. Guoco could have delisted thebusiness if it had achieved a 75 percent stake in the company, but it fellnarrowly short as the offer closed. Theannouncement marks the end of a tur-bulent time for Rank, whose board flip-flopped a staggering four times in itsrecommendation to shareholders overthe offer. It also parted company with

its chief executive Ian Burke before re-hiring him within a week.

Lavendon gains on strong outlookRental-equipment firm Lavendon Groupsaw its shares close up almost five percent yesterday after it said its perform-ance improved in the first-half and thatit sees year results above prior expec-tations. The firm also announced that itwould exit its Spanish operations,which have been hurt by a weak long-term outlook in the country. Lavendon,which rebuffed several takeover offersearlier in the year, expects to incur acharge of £5m during the second half of 2011. For the January-June period,the company's overall revenue greweight per cent, excluding ex-fleet equip-ment sales, compared with £106m lastyear. Year-on-year revenue growth in

the UK, which makes up half of its busi-ness, gained 11 per cent in the quarter.

CITY VIEWS: WOULD YOU INVEST IN WINE? Interviews by Caitlin Morrison

“I would consider it but I don’tknow anything about it. It’s adecent long-term investment. Iknow quite a few people whoinvest in and do well out of it.”

“Yes. It’s quite an interestingthing to invest in. I got some formy wedding, not as an invest-ment, but it will be interestingto see how its value changes.”

“Probably not as I don’t know enough about the subject, but I have nodoubt it does well. I drink the stuff but I wouldn’t buy it as an investment.”

TERRY ADAMS | COOPER GAY

ANALYSIS l Seeing Machines Ltdp

12 Jul 13 Jul 14 Jul 15 Jul 18 Jul

5.00

4.50

4.00

3.50

3.00

2.50

2.00

4.2518 Jul

HOW DOES FACEAPI WORK?

Q.WHAT DOES SEEING MACHINES’TECHNOLOGY DO?

A.Seeing Machine’s FaceAPI allowsa computer to track the face of

the person using it. It then providesa stream of information that can beincorporated into other systems,such as 3D laptops.

Q.WHY DO 3D LAPTOPS NEED TOTRACK YOUR FACE?

A. In order to give the illusion of animage being 3D, the computer

must fool the brain into “seeing”something that isn’t really there. Inorder to do this, it transmits two sim-ilar but distinct images to each of

your eyes, which correlate to what you would see if you were viewing areal object. The images must reachthe eyes in exactly the right way, oth-

erwise you will seethe blurred picture

you would see if you watched a 3D movie without theglasses. This has put manufacturersoff making 3D laptops because it isdifficult, and tiring for the user, tokeep the laptop in the right positionto maintain the illusion of 3D. This is

where FaceAPI comes in – by track-ing your eyes, in relation to the restof your facial features, it allows thecomputer to constantly update

where it directs each video stream,meaning you always experience 3D.

Q.DOES IT ACTUALLY DO WHAT ITIS SUPPOSED TO?

A. Yes. City A.M. got a sneak preview at the Consumer Electronics Show

earlier this year and it is impressive.

Q A&

ALEX GRUNDY | HBA PERCY HALLAM | WILLIS

ANALYSIS | Fine Wine vs other asset classes in first

half of 2011

*West Texas Crude used for oil figure

8/6/2019 Cityam 2011-07-19



RSM TenonThe professional services firm hasappointed Davin McDermott as direc-tor in its media division to focus on

business development in the music sec-tor. McDermott, who has spent 15years working in the music sector, is aformer financial controller of EMI

Europe and European finance directorat Warner Music.

Rowan DartingtonThe private client stockbroker hashired Oliver Cowell as an investmentexecutive. Cowell joins from stock-

broking firm Redmayne Bentley, wherehe was a senior stockbroker advisinghigh net worth clients.

Nationwide Building SocietyMitchel Lenson and Lynne Peacockhave joined the board of NationwideBuilding Society as non-executivedirectors. Lenson is a former groupchief information officer at DeutscheBank, and Peacock recently retired

from the role of chief executive UK of National Australia Bank.

Greene KingMike Coupe, group commercial direc-tor of Sainsbury’s, will join the board of Greene King as a non-executive direc-

tor on 26 July. Coupe will also becomea member of the audit committee.

State Street CorporationState Street Global Advisors hasstrengthened its cash managementteam by appointing Kevin Thomsonand Adam Sadiq as regional salesdirectors for EMEA, based in SSgA’sLondon office. Thompson joins fromportal provider ICD, and Sadiq joins

from Western Asset ManagementCompany.

Retail TrustThe retail industry charity has appoint-ed John Lovering as its new chairman,to replace current chair Dudley Cloake

in September. Lovering is the formerchairman of Homebase, Debenhams,Peacocks and Somerfield.

Stephenson HarwoodThe international law firm hasappointed Andrew McLean as a part-ner in the corporate practice.McLean joins from Weil Gotshal &Manges, where he has been a part-ner since 2000.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Harriet Dennys

+44 (0)20 7092 0053morganmckinley.com

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

in association with

Debt deal impassesinks US market

US stocks dropped yesterday as

bank shares bore the brunt of investor frustration over gov-ernments’ inability to solve

debt crises in the United States andEurope.

With five days to go beforePresident Barack Obama’s deadlinefor a debt ceiling deal and no agree-ment in sight, Republicans andDemocrats were crafting a fallback plan to avert a US default.

The longer the debt ceiling debateremains unresolved, the bigger therisk for further declines in stocks anda spike in volatility. The CBOE Volatility index rose 7.8 per cent yes-terday after a gain of more than 20per cent last week.

Adding to pressure on financials,the Eurozone’s regulatory stress testsfor banks were viewed as unrealisti-cally soft, given the scope of the crisis.

“It’s not a good environment forfinancials,” said Terry Morris, seniorequity manager for National PennInvestors Trust Company in Reading,Pennsylvania.

“The market is really scared right

now and it’s a fragile economy that we have, so when you throw some-

thing like this in the cake, then youhave investors sitting on the sidelinesor selling.”

Bank of America hit a new 52-week low and ended down 2.8 per cent to$9.72 while Citigroup lost 1.7 per centto $37.74. Financials were the weakestS&P sector yesterday, losing 1.4 percent.

The Dow Jones industrial averagedropped 94.57 points, or 0.76 percent, to 12,385.16. The Standard &Poor’s 500 Index declined 10.69points, or 0.81 per cent, to 1,305.45.

The Nasdaq Composite Index fell24.69 points, or 0.89 per cent, to2,765.11.

Expectations of strong earningscould fuel optimism, but it may not be enough to lift the market from itsrecent decline. Last week’s encourag-ing results from Google andJPMorgan Chase & Co were overshad-owed by global economic worries thatsparked the S&P 500’s worst perform-ance in five weeks.

In the latest earnings news,Halliburton reported a 54 per cent jump in quarterly profit as a USonshore drilling boom showed nosign of cooling off. The stock edged up4 cents to $53.12.

Second-quarter earnings for S&P500 companies are seen rising 6.5 percent, and of the 44 companies in theS&P reporting so far, 75 per cent post-ed higher-than-expected profits,

according to Thomson ReutersProprietary Research.

BRITAIN’S top shares fell sharply

yesterday after the results of stress tests on European banks were met with disappointment

over their credibility while investors were also fearful over the threat of aUS default on the nation’s debt.

The banking sector index sunk to atwo-year low as money managers andtraders cast doubts over whether thestress test results, released on Friday, were stringent enough.

Lloyds Banking Group, Barclays,and Royal Bank of Scotland were atthe top of the blue-chip fallers’ list,off 7.5 per cent, 7 per cent, and 6 percent respectively.

Eight European banks – five inSpain, two in Greece and one in Austria – failed the test of their ability to withstand a long recession and willhave to raise just €2.5bn (£2.2bn) of capital, much less than expected.

Expectations were for five to 15 banks to fall short with a need toraise €10 billion or more in capital.

“These tests showed a relatively healthy banking sector, somethingthat no reasonable person believes,”said Lex van Dam, hedge fund manag-

er at Hampstead Capital.“Thus the sector is being sold again

because the authorities are clearly still in denial about the seriousness of the current situation.”

Martin Dobson, head of trading at Westhouse Securities, concurred:“The banking stress tests didn't takeinto account sovereign credit defaultand I think the real test would comeon the banks if there was a default onsovereign debt, so it hasn't really proved anything.”

Further discouragement in theform of an apparent political impasseover raising the US debt ceiling by a 2

August deadline led investors to seek refuge in safe-haven assets, with goldprices hitting record highs above$1,600 an ounce in Europe yesterday.

This risk aversion favoured pre-cious metals miners, with FresnilloandRandgold Resources the standoutFTSE 100 gainers, up 2.1 per cent and1.7 per cent.

But sector peers missed out on therally, enduring hefty falls as thedemand outlook was clouded by theproblems in Europe and the UnitedStates.

Man Group shed 4.2 per cent, track-ing the steep declines by other finan-cial sector shares, as the hedge fundgroup said it would take on exposureto the estates of defunct US invest-ment bank Lehman Brothers fromfunds managed by its subsidiary GLGPartners.

The UK benchmark index ended

the session down 90.85 points, or 1.6per cent, at 5,752.81, its lowest close

since June 27 and its third successiveday of falls.

The FTSE 100’s 50-day moving aver-age has broken below the 200-day moving average, a bearish technicalsignal known as “dead cross”.

Sandy Jadeya, chief technical ana-lyst at City Index, said that if the5,740 support level fails to hold, wecould see the June low (5,644.38) also being tested.

Elsewhere among the short list of blue-chip gainers Centrica managed a0.4-per cent gain as Barclays Capital

raised its rating for the energy firm to“overweight” from “underweight”.Bullish broker sentiment also gave

Shire a fillip, up 0.5 per cent, withRBS lifting its rating for the drugmak-er to “hold” and hiking its targetprice.

“We now believe Shire couldachieve its aspirational targetsthrough organic growth, commer-cialisation of its high-risk pipelineand acquisitions,” RBS said in a note.

FTSE drops sharply as bankssuffer in wake of stress testsTHELONDONREPORT

THEWORLDREPORT

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

ANALYSIS l Land Securities Group

900

860

820

780

740

18 Apr 12 May 2 Jun 22 Jun 12 Jul

p866.00

18 Jul

LAND SECURITIESPanmure Gordon rates the commercial property group hold with an 825p tar-get price as it believes today’s trading update will confirm a trend of strongrent growth and tenant demand, particularly in central London. Panmurebelieves Land Sec has a portfolio of prime retail space that will maintain itsgrowth despite a tough retail sector. The shares trade close to the broker’s2011 net asset value forecast, but it sees plenty of upside potential.

ANALYSIS l Halfords

410

400

390

380

370

360

6 May 26 May 15 Jun 5 Jul

p

356.3018 Jul

HALFORDSShore Capital rates Halfords a sell with a 360.8p target price ahead of Thursday’s trading update as its last such update in June was mixed. The bro-ker believes trading conditions have worsened since then, while expectationsof performance at its cycling division and newly overhauled autocentres arehigh. Shore Cap expects 0.3 per cent like for like sales growth in its retail armand 1.3 per cent in autocentres, but says downside risks remain high.

ANALYSIS l BHP Billiton

2,600

2,500

2,400

2,300

6 May 26 May 15 Jun 5 Jul

p2,294.00

18 Jul

BHP BILLITONRBS rates the mining giant a buy with a 2,770p target price following its planto buy shale gas firm Petrohawk Energy last week. RBS sees BHP Billiton asinexpensive in absolute terms but sees a mixed reaction to the acquisition, asunless US gas prices rise substantially a share buyback programme would bebetter value for shareholders. As many oil majors are growing their shale gasassets, there is also a risk of oversupply to the US market, RBS said.

p

18 Apr 12 May 2 Jun 22 Jun 12 Jul

6,100

5,700

5,800

5,900

6,000

ANALYSIS l FTSE5,752.81

18 Jul

HSBCHSBC has promoted Krishna Patel, chief execu-tive of HSBC Africa, to chief executive of itsGlobal Private Banking division, reporting togroup chief executive Stuart Gulliver. Patel willstart his new role on 1 September, initially

based in Geneva, and will focus on strengthen-ing the bank’s presence in the fastest-growingwealth markets. Patel, who has worked atHSBC for 27 years, will continue to chairHSBC’s Values Committee and will also take upthe new role of chairman of HSBC Africa.

8/6/2019 Cityam 2011-07-19


G

OLD is stealing all the headlines,having broken $1,600. This is on the back of justifiable fears of a grimeconomic outlook, particularly in

the highly indebted Eurozone countriesand US. But silver is on the up too and with the gold/silver ratio (graph right) sug-gesting that the latter is lagging behindthe former, silver could prove to be a tasty commodity on which traders can make amint.

THE RESISTANCE As with gold, silver is defying resistance.Kathleen Brooks of Forex.com notes thatsilver is “currently above the $38.83 pivotpoint and has broken above its 6-week range.” She thinks even though gold hasrecently outpaced silver, the latter may beabout to catch up. Similarly, AngusCampbell of London Capital Group notessilver has mostly traded sideways since thecorrection after CME ramped up marginrequirements on the metal; however, hesays it has recently had a bit of a breakouton the upside, noting: “This is a positivemove for the bulls and if momentum iskept up then we could possibly see a retestof $50.” Although he thinks this could besome time away.

THE DEFAULT OPTIONCampbell thinks: “So long as the US dollarremains under pressure, the likes of goldand silver could benefit, marking new highs in the coming months.” IanO’Sullivan of Spread Co explains:“Cautious investors fear a global crisisshould the US default on its debt along with the Eurozone sovereign issues, which just seem to get worse by the day.” David

Debt weighs heavilyon the outlook for theeconomy – expectprecious metals torise, says Philip Salter

And the winner is... Picture: REUTERS

Wealth Management | CFDs

18 CITYA.M. 19 JULY 2011

Gold is through the roof

and silver set to followL

AST week was a difficult one for equity investors,thanks to a lack of clarity from policymakers andcentral bankers. On Tuesday, the minutes of thelast Federal Open Market Committee meeting

stated that it may “be appropriate to provide addition-al monetary policy accommodation” if economicgrowth remained too slow to reduce unemployment. This led to speculation that a third round of quantita-tive easing (QE3) loomed and investors piled back intorisk assets.

But in front of the Senate Banking Committee, FedChairman Ben Bernanke downplayed the idea. Henoted that there was too much uncertainty about thecurrent state of the economy to risk another round of quantitative easing at this time. He also pointed out

that inflation was higher than a year ago.Europe’s banking stress tests haven’t calmed

investors’ nerves. The European Banking Authority ignored the sovereign debt crisis, failing just eight banks out of 90 included in the test. The aggregate cap-ital shortfall for these eight is calculated at just €2.5bn,a figure which most analysts believe grossly underesti-mates the fragility of Europe’s banking system.

Meanwhile, US policymakers squabble over meas-ures to deal with the debt ceiling. The major ratingsagencies have warned of dire consequences shouldRepublicans and Democrats fail to agree. But S&Pupped the ante by saying that the US faces a downgradeeven if agreement is reached, as concrete measuresmust also be taken to reduce the budget deficit substan-tially.

Not surprisingly, investors are reducing their risk exposure. It has been instructive to see how strong goldand silver have been, particularly as prices typically weaken over the summer months. Their previousinverse correlation with the US dollar appears to have broken down completely. With the US and Europe hob- bled by concerns over their debt, it makes sense forinvestors to diversify into the safe haven of preciousmetals. Following their recent rally, both are vulnerableto profit-taking. But if gold and silver can break andconsolidate above $1,600 and $40 respectively, there is agood chance of further gains for the rest of the year.

THE PRECIOUSMETALS SHINE

IN POLICY FOGDAVID MORRISONCFD MARKET STRATEGIST, GFT

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Jones of IG Index says silver broke out totwo-month highs yesterday, “with theglobal worries of European sovereign debtand the inability of the two political par-ties in the US being able to agree terms forraising the debt ceiling.” However, Jonescautions: “Silver may be more volatilethan gold, as there are plenty of tradersout there with unhappy memories of themassive moves seen in Easter.” As such, he warns: “Any weakness in silver could onceagain flush out any weak holders andcause a sell-off back into the range.”Nevertheless, he thinks the “risk is for fur-ther gains, as it doesn’t look like thesedebt problems are going to disappear any time soon.”

STORING VALUEPrior to 1816 – when it went onto a goldstandard – the British used both gold andsilver as a store of value and medium of exchange. The gold standard went the way of bimetallism, but the era of fiat money hasn’t dimmed the allure of precious met-als. Fed chairman Ben Bernanke may ormay not be right in denying Ron Paul’sassertion that gold is money, but he isunable to dispute the fact that people andcentral banks still use it to protect their wealth – particularly in troubling times. The factors pushing up the price of goldand silver will not go away, as much as theauthorities in the US and Eurozone wishthey would.

S o u r c e : F o r e x . c

o m

Jan Mar May Jul Sep Nov 2011 Mar May Jul

70

60

50

40

30

ANALYSIS l Gold/silver ratio

8/6/2019 Cityam 2011-07-19


8/6/2019 Cityam 2011-07-19


SHEEKEY’S TURNS SPEAKEASYJ Sheekey Oyster Bar, the baby brother of thefamous J Sheekey seafood restaurant that sitsnext door, is running a season of monthlySunday performances. Lively music, theatre,comedy and improv performances are the orderof the day, inspired by speakeasy cabarets of theprohibition era. Tickets are £30 and include dinner and the show, and the season runs until February 2012. For more information visit www.jsheekeyoysterbar.co.uk

FLORIDITA NOW OFFERS CABARETSoho’s trusty fun-house, Floridita, has also

jumped on the live performance bandwagon,launching a cabaret act on Wednesdayevenings. The Globe Girls, a glitzy cross-dressingsinging and dancing troupe, will be the stars,alongside other special guests. The cabaretmenu is rather tempting: a three course dinnerfor £35 that includes the likes of salmon andtiger prawn ceviche, spit roasted suckling pigwith garlic, lime and oregano and charcoal-gilled chicken churrasco. Performances start every Wednesday night from 7.30pm until mid- night, after which DJ Ady Jay takes to the

decks till 2am. For more info, see www.floridita.co.uk/london/cabaret

The Surprise6 Christchurch Terrace, W3 4AJTel: 020 7351 6954www.geronimo-inns.co.uk/thesurprise

FOOD hhhhiSERVICE hhhhh

ATMOSPHERE hhhhi

Cost per person without wine: £23

THE Surprise (named after a warship)is a pub in Chelsea and the latestproject from Geronimo Inns, thecompany with a slew of beautiful

gastropubs across London. So good isGeronimo at turning around old boozersthat, in an environment where hard-up breweries and landlords – and in the caseof Chiswick’s Devonshire Arms, super-chefs– are closing pubs by the score, Young’s saw fit to buy the company last year for £60m.Geronimo remains a separate entity withinthe Young’s operation, and the Surprisedemonstrates how valuable it is.

A small, local place on a back street inthe poshville enclave between the King’sRoad and the river, it was closed for four years after falling on hard times.

Now it’s a lovely place in which to kick back. This being Chelsea, there’s some dec-orative razzmatazz in the form of eccentricmodern artworks – a huge oil portrait of Frankenstein’s monster (Karloff era), forinstance – plus the odd bit of funky wallpa-per. On a weekend visit, the stools roundthe large, bare wooden bar were populated by well-lived locals sinking choice ales(served in handled mugs) into their beerguts. The sun gleamed through windowstinted with the original leaded glasswork.

There’s a cosy dining room upstairsthat’s open on weekday evenings, but forSaturday lunch we were happy to be satdownstairs amid the hum of the bar.

For food, the pleasing Surprise formula isto re-imagine familiar, hearty gastropubfare in tapas form. Small-plate dining is thefashionable thing, but doing it with disheslike shepherds pie or pork belly is a nicespin, provided it’s done well.

It is. The menu, with around 30 dishesranging in price from £2 to £6, is mouth-

Keeping the flag flying f or boozers

watering. Cockles and whelks, shepherd’spie made with hogget shoulder, beans withtarragon butter, ham hock hash, devilled white bait – if ever a menu demandedreturn visits to work through everything,this is it.

Smoked eel on a salad of roasted beets,horseradish, bacon and croutons is nostal-gic and smoky and densely flavoursome; aramekin’s worth of Stinking Bishopmacroni cheese can probably besmelled on the King’s Road, and isa gloopy, decadent wonder; aScotch egg is utter perfection,sliced in half with the runny yolk spilling into a sweet,carefully made piccalilli; while a jar filled with acreamy avocado panna cotta,devon crab and tomato is aninspired, delicate blend of textures and tastes.

For pudding, “Eton tidy” is acharming idea charmingly exe-cuted: Eton mess elements –strawberries, raspberries, vanillacream and meringue – come in sepa-rate portions that you can mess together yourself. A chocolate plate of ice cream, brownie and a shot of mousse is rich andspecial, and a custardy crème brulee withraspberries lurking inside is merry andmemorable.

Another west London salvage job, theaforementioned Devonshire Arms , on a quiet

street just off the Chiswick roundabout, ismore of a work in progress. Once part of

the Gordon Ramsay empire, it underper-formed and was let go earlier this year. Itsnew proprietor is Nick Gibson, a congenialformer banker who has managed a much-admired turnaround at the Draper’s Armsin Islington.

The Devonshire, which re-opened a cou-ple of weeks ago, is now a stripped back place with bare floors, bare tables andkhaki-green wooden wall panels.

The menu is well-considered, withnothing too complicated but little

that’s run-of-the-mill – as it should be. I nipped along this weekend,

and had unctuous, herby duck ril-lettes that spread beautifully ontoast, and some nicely-cookedscallops that didn’t really go with a rather tart piccalilli.

Nice to see onglet steak on themenu – a cheap cut, but flavour-some (you can share a

chateaubriand if you want poshsteak), though chef needs to think

again about the oily, gravy-like pep-percorn sauce accompanying it. A

huge skate wing, with parmesan, capersand preserved lemon was fresh andenlivening. The less said about a dried-outchocolate fondant the better.

Things are still getting in order at theDevonshire, and there’s plenty on themenu to suggest a keen culinary mind at work here. Good ale selection too.

The fine little beer garden was apparent-

ly unused by the previous regime, but it’snow open again. I raise my pint to that.

FOOD & BOOZE

NEWSTIMOTHY BARBER

Simple charm, goodbeers and a keensense for food: aneasy formula forquality local pubs

Lifestyle | Restaurant

20 CITYA.M. 19 JULY 2011

WORDS BYTIMOTHY BARBER

The Surprise inChelsea: a lovely placeto kick back in.

Episode 19: A visit from the parents sees Dad in a less than supportive moodMY mother hobbles into our living room, awalking stick in each hand. Breathless, sheasks, “How is she darling?”Before I can answer my father bursts into theroom, laden with bags. “I hope you’re pleasedwith yourself David. She should be at home,resting. Not…”“Lawrence, please. We’re here to see Emma.”“No, it’s important that he knows Cathy, damnit.” He slams the bags down and glares at mymother. “I’d love a cup of tea,” my mother saysand turning away from my father, she contin-ues in a stage whisper, “Your father might pre-fer something stronger. Arsenic perhaps.”“Sit down mum. I’ll make tea.”

“Where’s Emma?”“Upstairs. Resting.”

“May I go up?”“Yes. She’s not sleeping. She’d like to see you.”My mother hobbles from the room.“Well?” my father demands.“Dad, I didn’t ask you to come. Mum want-ed…”“Of course she wanted. She’s always runaround behind you. But she doesn’t knowwhat’s good for her.”Upstairs, Noel bursts from his bedroom.“Granny!” Our bedroom door opens and closes.It is quiet.“I’m sorry dad. I’ve been worried aboutEmma. And about… the twins too.”It’s hard to say “the twins”. Makes them too

real. And their fragile, precious lives are sud-denly at risk. One, it seems, is perilously small.CITY DAD

And if one is at risk, they both are. Emma hasbeen told to rest.“You ever think…” my father begins. But he ischoked.“What dad?”“Two little souls. Competing to survive. Youand your damned competition,” he spits. “Justdestructive… And ironic, no?” My father’s lifehad been eviscerated by competition, alongwith most of British engineering. He is scepti-cal about my occupation.“These are my children. Your grandchildren.”Tears prick my eyes. We look at one another,across a vast gulf.City Dad will be continued next Tuesday. For

previous City Dad episodes, seewww.cityam.com

8/6/2019 Cityam 2011-07-19


T E R R E S T R I A L

RICHARDHAMMOND’SJOURNEY ...

BBC1,9PMThe Top Gear presenter uses hi-techimagery to explore beneath Earth’ssurface, peeling back the layers toreveal the origins of volcanos.

THE HOURBBC2,9PMNew series. Drama set in a 1950s TVnewsroom. Reporters Bel and Freddie

are asked to join a weekly news showbut only one can be the producer.

THE SEX EDUCATIONSHOWCHANNEL4, 8PMAnna Richardson gives schoolchildrenthe chance to examine living STIs, andhelps parents discuss the trickysubject of pornography with their kids.

BBC1

SKY SPORTS 17pm Live Darts 11pm Time of Our Lives 12am Soccer AM: The

Best Bits 1amDarts 5amFootball Asia 5.30am-6am

Football’s Greatest

SKY SPORTS 24.30pm Live ECB 40 LeagueCricket 10pm Ashes Memories10.30pm Poker 12.30am

Football Asia 1am Football’sGreatest 1.30am-3.30amInternational Bowls

SKY SPORTS 36.30pm Cycling 7.30pm Live

Greyhound Racing 10pm GolfingWorld 11pm Pool 12am Sports

Unlimited 1am FIA GT1 WorldChampionship 2amCycle Sports

World2.30am-3.30am Cycling

BRITISH EUROSPORT6.30pm Diving 7.15pm Cycling:Tour de France 8.50pm British

Superbikes 10pm Inside WTCC

10.35pm Cycling: Tour de France

12.10am-12.40am Triathlon

ESPN7pmESPN Kicks: Extra 7.15pm

Live Pre-Season Football 9.15pm

FA WSL Review Show 9.45pm

German Football 11pm AFL

Review Show 12am FIM World

Enduro Championship 12.30am

ESPN Press Pass 1am FA WSLReview Show 1.30am Live Copa

America Football 3.45amESPN

Kicks: Extra 4amAsian X-Games5amESPN Game of the Week5.30am-6am ESPN Press Pass

SKY LIVING7pmCSI8pmBritain & Ireland’s

Next Top Model 9pmChick Fix

10pm Psychic Sally: On the

Road 11pm Criminal Minds

12am CSI: Crime Scene

Investigation 1.50am Ghost

Whisperer 2.40am Charmed

4.20am Nothing to Declare

5.10am-6am Maury

BBC THREE7pmTotal Wipeout 8pmSmall

Teen, Bigger World 9pmKellie:

The Girl Who Played with Fire10pm EastEnders 10.30pm

Angry Boys 11pm Family Guy11.45pm Kellie: The Girl Who

Played with Fire 12.45am

Mongrels 1.15am Angry Boys1.45am Underage and Pregnant2.15am Small Teen, Bigger

World3.10am Mongrels 3.40am

Total Wipeout 4.40am-5.10am

Underage and Pregnant

E47pmHollyoaks 7.30pm How I

Met Your Mother 8pmFriends

9pmSmallville 10pm The

Cleveland Show 11pm The Ricky

Gervais Show 11.30pm The Big

Bang Theory 12.30am How I

Met Your Mother 1.25am My

Name Is Earl 2.10am How I Met

Your Mother 2.30am Glee

3.15am Heartland 4amThe

Class 4.25am-6am Switched

HISTORY7pmAmerica: The Story of the

US 8pm It’s Good to Be the

President 10pm Only in America11pm Tony Robinson Down

Under 12am It’s Good to Be the

President 2amMega Movers3amAmerica: The Story of the

US4amMega Disasters5am-6am Ice Road Truckers

DISCOVERY7pmMythbusters 9pmGold

Rush 10pm Gold Rush: Full

Disclosure 11pm River Monsters

12am Bear Grylls: Born Survivor

1amGold Rush 2amRiver

Monsters 3amDeadliest Catch

3.50am Wildest Africa 4.40am

Weird or What? 5.30am-6am

Destroyed in Seconds

DISCOVERY HOME &

HEALTH7pmBringing Home Baby 8pm

Little People, Big World 9pm

Paralysed and Pregnant 10pm

I’m Addicted to Plastic Surgery

11pm Hospital Sydney 12am

Paralysed and Pregnant 1am I’m

Addicted to Plastic Surgery 2am

Hospital Sydney 3am Little

People, Big World 4amA BabyStory 5am-6am Bringing Home

Baby

SKY18pmNext Door Nightmares 9pm

FILM 2 Fast 2 Furious 2003.

11.05pm Brit Cops 12.05am

Road Wars 1amDanny Dyer’s

Deadliest Men 2: Living

Dangerously 1.50am Stargate

Atlantis 3.20am Top Ten Show

3.30am Dream Lives for Sale

4.20am Airline 5.10am-6am

Sell Me the Answer

BBC2 ITV1 CHANNEL4 CHANNEL5

S A T E L L I T E &

C A B L E

TVPICK6pmBBC News

6.30pm BBC London News7pm The One Show: Best of

Britain

7.30pm EastEnders; BBC News

8pmHolby City9pmCHOICE Richard

Hammond’s Journey to the

Centre of the Planet10pm BBC News10.25pm Regional News; National

Lottery Update 10.35pm Imagine11.50pmTravellers; Weatherview

12.55amSign Zone: Coast 1.55am

Sign Zone: Country House Revealed2.55am Sign Zone: Fake Britain

3.40am Sign Zone: An Island

Parish 4.10am-6amBBC News

6pmEggheads

6.30pm Great British Railway

Journeys: Michael Portillo visits

Durham and Darlington.

7pmCoast: British connections

to the Swedish coast. Last inthe series.

8pmRestoration Home: A

project to renovate Stoke Hall

in Calver, Derbyshire.

9pmCHOICE The Hour

10pm Twenty Twelve

10.30pm Newsnight; Weather

11.20pm Made In Britain

12.20am The Tudors1.15am BBC News 4.10am-6am

Close

6pm London Tonight

6.30pm ITV News

7pm Emmerdale

7.30pm Wildlife Patrol

8pmCops with Cameras

9pmHomes from Hell10pm ITV News at Ten

10.30pm London News

10.35pm Celebrity Juice: JLS

Special

11.20pm iTunes Festival

Highlights 2011

12.15amThe Zone; ITV News

Headlines2.20am Crossing Jordan

3.05am-5.30amITV Nightscreen:

Text-based information service.

6pmThe Simpsons

6.30pm Hollyoaks7pmChannel 4 News7.55pm4thought.tv8pm CHOICE

The Sex Education Show 9pm

Undercover Boss 10pm Ramsay’s

Kitchen Nightmares USA 11pm

Channel 4 Presents – David Clarke

2012 11.05pm Alan Carr: Chatty

Man 12.10am European Poker Tour1.05am Beach Volleyball 1.55am

KOTV Boxing Weekly 2.25amThe

Grid 2.55amBritish GTChampionship 3.25am Canary

Wharf Triathlon 3.50am IPC

Swimming EuropeanChampionships4.45am That

Paralympic Show 5.15am-6amOne

Tree Hill

6pmHome and Away

6.25pm OK! TV

7pm5 News at 7

7.30pm Mexican Food Made

Simple; 5 News Update

8pmMonster Moves; 5 News9pmCSI: Crime Scene

Investigation10pm CSI: Crime Scene

Investigation10.55pmCSI: Crime

Scene Investigation 11.50pm

Crimes That Shook the World

12.50am Inside Hollywood 1.05am

SuperCasino4am Meals in

Moments4.10am Michaela’s Wild

Challenge4.55amRough Guide to

Islands5.10am Wildlife SOS

5.35am-6amHouse Doctor

8 16 16

25 6

7 34

30 11

13 6

45

17 8

24 11

15 23

14 31

4 24 9

12

3

10

27

37

40

5

12

29

21

22

15

10

9

8

41

23

28

20

12

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 Discrimination against

a person in the latterpart of life (6)

6 Place of religiousretreat for Hindus (6)

7 Harvested (6)

9 Childhood disease (7)

13 Defence plea of beingelsewhere (5)

14 Ms Campbell, model (5)

15 Alcoholic spirit (3)

16 Organic compound (5)

19 Airport in Chicago (5)

20 Painted structuresof a stage set (7)

22 Have a lofty goal (6)

23 Illustrious (6)

24 Part of a flowercomposed of the stigma,style and ovary (6)

DOWN

1 Medium for radio

and televisionbroadcasting (8)

2 Cause to grow thinor weak (8)

3 Manufactured (4)

4 Capital of Tibet (5)

5 Capital of the USstate of Oregon (5)

8 Person who leavesone country to settlein another (6)

10 Vexes (6)

11 Fervent supporter of aperson or institution (8)

12 Relating to the starsor constellations (8)

17 Scarper (5)

18 Register formally asa participant (5)

21Coarse file (4)

A

G

T

T

ER

M

S

A

T O P I C N E P A L

E N A P E L E

D E T E R I O R A T E

D P N T D

Y O U T H S F E E S

N T A

T I F F R E F U G E

R R I R X

A G O R A P H O B I A

I C D E A N L

N A K E D S T O A T

2 3 8 1 6 9 7

4 8 9 7 6 1 8 2

5 9 2 1 3 4 7 5

3 6 1 2 3 4 1

1 5 2 9 5 7

7 4 2 6 1 5 3

9 7 8 9 6 8

6 2 3 1 2 1 5

7 8 6 3 5 9 4 9

8 6 5 1 3 4 2 6

9 7 8 8 9 5 7

WORDWHEELThe nine-letter words were

PORTERAGE andREPORTAGE

21

8/6/2019 Cityam 2011-07-19


ARSENAL’S latest recruit Gervinhohas revealed he was lured to theclub by the chance to work withmanager Arsene Wenger.

The Ivory Coast forward (right)finally completed his long-antici-pated £11m move from FrenchDouble winners Lille yesterday. And he admitted linking up with Wenger, who helped launch thecareers of his compatriots Kolo Toure and

E m m a n u e lEboue, was a big factor.

“I’m very happy to havethe chance to work with A r s e n e Wenger. I came

here because I believe that he canimprove my game and help mereach another level,” he said.

“I’ve always dreamed to play forthis club. It’s one of the most beau-tiful days of my life.”

Wenger, who faces a battle tohold onto stars Cesc Fabregas and

Samir Nasri, hailed the ver-satility of Gervinho, whoscored 18 and led theassists charts last term.

“He can play on theright, left and through

the middle,” said

Wenger. “He hasqualities that Ifind important.”

Brazil mid-f i e l d e rDenilson, mean-

while, is moving back to former clubSao Paulo on loan.

BY FRANK DALLERES

FOOTBALL▲

FORMER Manchester City star Patrick Vieira insists the club’s march towardsthe summit of Europe will not be halted by the impending sale of strikerCarlos Tevez.

Argentinian Tevez, whohas become a talisman forCity during their rise frommid-table to ChampionsLeague, is close to endinghis two-year stay atEastlands.

Brazilian sideCorinthians are thefavourites to sign him for

£40m, although the deal hit a snag yesterday, while he also has admirers inItaly and Spain.

But Vieira, who retired last week to become City’s football development

executive, believes the club will contin-ue to improve without him.

“It is never easy to lose players likeCarlos Tevez, but it’s not the first time a big club has lost a big player,” said Vieira.

“I believe we can still achieve our tar-gets and we will still have a really com-

petitive team. The players will takemore responsibilities on their

shoulders and that will makethem better players.

“If Carlos does leave we just have to wish him goodluck and say thank you foreverything he has done for

the football club.”Corinthians refuted sugges-

tions a deal was in place for Tevez

yesterday, adding that City hadchanged their demands.

If Tevez does move City are expected tosign Sergio Aguero from Atletico Madridas his replacement.

Selling Tevez won’t

halt City, says VieiraBY FRANK DALLERES

FOOTBALL▲

SPORT | IN BRIEF

Spurs sign Ivory Coast starletFOOTBALL: Tottenham have signedIvory Coast youth internationalSouleymane Coulibaly. The 16-year-oldstriker moves to White Hart Lane fromItalian club Siena’s youth team.Coulibaly scored nine goals in fourgames at the Under-17 World Cup.

Given makes Villa moveFOOTBALL: Aston Villa have confirmed

the signing of goalkeeper Shay Givenfrom Manchester City on a five-yeardeal. Given, 35, becomes the first sign-ing of Alex McLeish’s tenure.

Davis Cup will return to GlasgowTENNIS: Braehead Arena in Glasgowhas been chosen as the venue for GreatBritain’s Davis Cup tie against Hungary

in September. Captain Leon Smith saysthe decision was inspired by the back-

ing GB received during the win overLuxembourg earlier this month.

Khan ready for toughest testBOXING: Amir Khan believes he willface the sternest test of his careerwhen he meets Zab Judah in Las Vegason Saturday night. “I think he could bethe toughest one yet,” said Khan. “He’s

a five-time world champion and a two-weight world champion.”

1928

IN 139 previous editions of TheOpen there can never have beena more popular winner thanDarren Clarke and it’s hard for

me to express just how happy I amfor him.

He’s been through more thanmost in his career but he’s remainedgenerous and easygoing throughoutand now he’s got the prize his talent

as a sportsman deserves.Darren might have gone 10 years

without challenging for a Major butI never had any doubt he’d see the job through. His round of 69 on theSaturday, which included just 34putts, told me all I needed to know.

He’s got such a beautifully uncomplicated swing perfect for thedemands of Royal St George’s and with his putting stroke workingequally well it never looked like he was liable to do something silly.

The conditions were pretty treacherous but having grown upplaying links golf in NorthernIreland he would have been com-fortable with the challenge and he

coped admirably – even the sight of Phil Mickelson bearing down onhim didn’t fluster him – and I’msure the feeling of having won atournament recently helped to takesome of the pressure off.

Darren’s victory means NorthernIreland has produced three Major winners in little over a year and itrepresents a truly staggeringachievement. I’m not sure whatthey’re putting in the Guinness overthere but I wouldn’t mind a swig of it.

I’m sure the success of GraemeMcDowell and Rory McIlroy helpedrub off on Darren. Those guys arereally tight and I wouldn’t be sur-prised if they spurred each other onto further success in the Majors.

It was a disappointing week forthe other big home hopes but I

don’t think the likes of Luke Donald,Lee Westwood and Ian Poulter will be panicking too much.

Darren’s victory showed themgood things do indeed come tothose who wait and he’s such a pop-ular guy on tour that I’m surethey’re celebrating his win as hardas they would’ve done had they bro-ken their Major duck.

Elsewhere, Thomas Bjorn’s per-formance deserves a mention while young amateur Tom Lewis looks cer-tain to be a star of the future. I wasimpressed by the way he handledhimself and if Tom Watson thoughthe had something special then whoam I to argue? Ultimately, however,

it was Darren’s week and his winprovides yet another fairytale story from a tournament which neverfails to live up to its billing as thegreatest of them all.

CLARKE: OPEN’S BES

Sport22

CHELSEA boss Andre Villa-Boas isadamant that owner Roman Abramovich will get the ChampionsLeague triumph he yearns for in thenext few years.

Abramovich has seen the Blues winevery other major honour since his2003 takeover, but remains desperateto add the biggest one of all to his tro-phy cabinet.

And Villas-Boas said: “In the next years, for sure, the trophy will arrivein this club. Chelsea have been in acouple of semi-finals and also onefinal in recent times. I don’t see why we can’t go on to win it.”

Chelsea fly out to Asia this week fora two-week, four-match tour.

FOOTBALL▲

Villas-Boas sureof ChampionsLeague success

GOLF COMMENT

SAM TORRANCE

Gervinho cites Wengerfactor in Arsenal move

8/6/2019 Cityam 2011-07-19


| PROMOTION

Terms & Conditions: The promoter is Titans of Cricket and the promoter reserves the right to change the prize to one of equivalent or greater value without notice. Travel expenses and accommodation arenot included, prize is not transferable entry in to the promotion is free; entrants must be aged 18 and over. The closing date is 24th July 2011 at 11:59am; the winner will be drawn at random from all the

correct entries and will be notified on 25th July 2011. The winners, by accepting the prize, agree to publicity if required. The Editor’s decision is final and one entry per reader.

www.cityam.com/competition

City A.M. has teamed up with the new cricket

concept, Titans of Cricket with Freddie Flintoff returning to the world of sport. Titans of Crickettakes the best of Twenty20, the IPL and WorldCricket in a two hour spectacular of batting,fielding and bowling. Top cricketing stars from fourcountries will battle it out in the Titans’ Arena,with five extreme challenges combining to providethe ultimate test of cricketing skills.

Freddie Flintoff leads an all-star English teamagainst Australian cult hero David Boon and 2011World Cup Winner Virender Sehwag fronts theIndian effort against 1992 World Cup Winner, TheKing of Swing,Wasim Akram. Titans of Cricket willfeature a toxic mix of skills, music, fun andentertainment.

City A.M. has two pairs of VIP tickets for the O2 onthe 8th October which includes meeting Freddie

Flintoff with two other Titans of their choice, a

signed mini bat with signatures of all the Titans,event programme and a professional picture withthree Titans.

For your chance to win a pair of VIP tickets, simplyanswer the following question:

Where did Freddie play his lasttest match?

A. Oval

B. Lords

C. Old Trafford

Log onto

to enter

Titans of Cricket will present the first arena based cricket event of its kind,bringing together the world’s greatest cricketers, both past and present.

Starting on 2nd October at the MEN Arena in Manchester,and then moving to the NIA in Birmingham on 5th October, before the series

finale at the O2 on Saturday 8th October.

If you are not lucky enough to win your tickets or for more information go to

www.titansofcricket.com

Two pairs of VIPtickets to the Titansof Cricket at the O2

ENGLAND seamer Chris Tremlettadmits he’d be nowhere near Lord’son Thursday preparing to take onIndia’s batsmen were it not for acareer saving move from Hampshireto Surrey two years ago.

Tremlett’s rapid emergence as Jimmy Anderson’s new ball partnerhas added an extra dimension toEngland’s pace attack and theirperformances will go a long way to determining the outcome of an eagerly anticipated series

against the world’s No1ranked side.

The 6ft 7in speed-ster made hisEngland debutfour years ago,against India, buthad to wait untilthe third Test of last winter’s

Ashes series inPerth to gain a sec-ond bite of the

international cherry. Tremlett, who was England’s most

impressive performer in the recent Test series against Sri Lanka, insists he

always knew he had what ittook to succeed at the high-est level but admits he’d still

be languishing in the dol-drums at Hampshire were it

not for his switch to the cap-ital.

He said: “I’m one hun-dred per cent sure if Ihad stayed atHampshire I’d neverhave played for

England again.“It got to the stage

where for the first time inmy life I wasn’t enjoying my

cricket. Being part of a young vibrant Surrey side hasrevitalised me.

“Now I’ve got the chance totake on the best side in the world with some of the best batsmen. It’s a huge challenge but one we believe we aregood enough to overcome.”

LOVED CHAMP

BY JAMES GOLDMAN

CRICKET▲

23

Results

email [email protected]

Veteran targetsmore Major wins

HE MAY not have been to bed yetsince his Open victory on Sundayafternoon, but Darren Clarke is alreadydreaming – of more Major titles.

The Ulsterman waited 42 years forhis first, but has relished the taste andis eager to make up for lost time in thetwilight of his career.

“I want more. I don’t want to justrest on one,” said Clarke yesterday,after spending the night toasting histriumph at Sandwich.

“I had quite a few pints and quite afew glasses of red wine. I probably

won’t get any sleep until tomorrow atsome stage. You have to enjoy it whenyou can. It’s been a very good night.”

Clarke, who famously helped Europewin the 2006 Ryder Cup just weeksafter his wife’s death, hopes his winwill boost his captaincy chances.

“It’s definitely still an ambition,” hesaid. “And if I get the opportunity, I mayhave a little bit more respect from play-ers having been a Major champion.”

Surrey switch

saved Tremlett

Clarke won a Major at the 54thtime of asking

Picture: REUTERS

8/6/2019 Cityam 2011-07-19


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