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8/3/2019 Cityam 2011-11-03


FTSE 100 ▲5,484.10 +62.53 DOW ▲11,836.04 +178.08 NASDAQ ▲2,639.98 +33.02 £/$ 1.59 unc £/¤ 1.16 unc ¤/$ 1.37 unc

Merkozy:

put up orget out

GREECE was given an ultimatum lastnight: vote for austerity or leave theeuro.

The country will now go to the pollsin a referendum on 4 December, but itis not yet clear whether it will vote onits latest €100bn bailout package andthe attached conditions, or on membership of the euro itself.

Last night, it was clear thatGermany and France would prefer a vote on the latter.

In a decisive shift in tone, GermanChancellor Angela Merkel said thatGreece must make its own decision onmembership, but that her priority isnow to defend the single currency “with or without Greece”.

Her remarks, at a press conference with France’s Nicolas Sarkozy, werethe first admission that any country could leave the euro, which will send achill down investors’ spines. There isno mechanism for a state to exit.

Greek Prime Minister GeorgePapandreou secured cabinet supportfor his referendum and defended it,saying: “It’s [Greece’s] democratic rightand the Greek people I believe aremature and wise to make the decision.”

European Commission boss JoséManuel Barroso threatened to cut off the next €8bn (£6.9bn) tranche of previously agreed bailouts until the coun-try agrees to support the new package.

Greece claims that it can surviveuntil December without the funds,after which it will go bankrupt.

ALLISTER HEATH: P2, MORE: P3

BY JULIET SAMUEL AND TIM WALLACE

EUROZONE▲

Lloyds chief António Horta-Osório tried to do too much too quickly without sharing the burden Picture: GETTY

TAXPAYERS suffered a major blow yes-terday as the departure of Lloyds’ starchief executive left the turnaround of the semi-nationalised lender in chaos.

António Horta-Osório was forced totake a leave of absence on medicaladvice after months spent acceleratinga complete overhaul of the bank lefthim too exhausted to continue, the bank said.

Lloyds claimed he would be back atthe helm by the end of the year, butmany in the City were sceptical. Chief financial officer Tim Tookey, who isleaving in February to join Friends Life,took over as interim CEO.

Horta-Osório’s exit casts a shadow over what was already a darkeningmood for Lloyds, which is under pres-sure to absorb a strategic overhaul, atroubled £1.5bn branch sale process,an accelerated shrinkage of its balancesheet, thousands of redundancies andcalls to cut pay and lend more.

The target was to get the bank back on track in the next three-to-five years.But with no CEO and a deepening eco-nomic crisis, insiders now think it willtake closer to five – or longer.

The delay will do little to helpLloyds’ nose-diving share price, which

has seen the government’s emergency investment in the bank in 2008 sink further and further underwater

Horta-Osório’s departure leaves the

LLOYDS CHAOS ASBOSS STEPS BACKBY JULIET SAMUEL AND DAVID HELLIER

BANKING▲

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BUSINESS WITH PERSONALITY

bank’s top management divided between a leadership circle of his closelieutenants and a handful of Lloydsinsiders who have only recently beenpromoted to senior executive roles.

The timing is especially damagingas the bank steps up its lobbying overthe Vickers Commission reforms and

new capital and liquidity rules. The political pressures of the job areunderstood to have taken a harsh tollon Horta-Osório, with his repeated

summons before parliamentary com-mittees a particular point of stress.

Colleagues also suggested that hishands-on style had led to him takingtoo much responsibility for every aspect of the bank’s rehabilitation.

City analysts were already yesterday putting forward possible replace-

ments for the charismatic Portuguese banker. Ian Gordon of EvolutionSecurities suggested that Lloydsshould look internally for a replace-

ment chief executive, suggesting Mark Fisher, director of group operations.

Others in the City are lookingtowards an outsider to take the helm.One banker suggested Andy Haste, theformer chairman of the RSA insurancegroup, who quit recently to consideralternative roles in the financial servic-

es sector. A spokesperson for Haste saidlast night: “Andy has spoken to lots of people about lots of jobs.”

MORE: P8-9; P33

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News2 CITYA.M. 3 NOVEMBER 2011

Offer fails toavert strikes THE TREASURY laid out an improveddeal on public sector pension reform yesterday, but unions said it was notenough to avert a national strikeplanned for 30 November.

Unions representing more than2m workers have been locked in adispute with the coalition over itsplans to raise pension contributionsas part of deficit-cutting measures.

Treasury minister Danny Alexander met union leaders beforeannouncing an offer to let workers build up their pensions eight percent more quickly, while workers within 10 years of retirement wouldsee no change to their pension.

The government’s offer included apledge not to revisit any agreedreforms within the next 25 years.

Mark Serwotka, leader of the PCSunion, gave the offer a cautious wel-come. “After six months of there not being a single move on anything, it isof course welcome that they’ve mod-ified their proposals slightly,” he toldBBC Radio. “But ... if someone robbed you of £10 and then decided it was very harsh and only robbed you of £9 you are still being robbed.”

Brendan Barber, general secretary of the Trades Union Congress, saidthe unions were “firmly committed”to preparing for a day of strikes at theend of the month.

BYHARRY BANKS

POLITICS▲

Europe is finally giving up on Greece

WHO will blink first? The Greeks – orthe Eurozone? Both have lots to losefrom a Greek collapse and withdrawalfrom the euro; and GeorgiosPapandreou’s decision to bet every-thing on a referendum on the bailoutpackage has massively upped thestakes. Until yesterday, it seemed as if Nicolas Sarkozy and Angela Merkel would huff and puff but never actual-ly deliver on their threats to cut off the cash, preferring instead the cow-ardly way out. After all, quietly agree-ing to ever more handouts – even when Greece failed time and again to

deliver on its promises and austerity package – has been the Eurozone’sstrategy all along.

Since last night’s press conference,however, I am no longer so sure. They

may still be bluffing, but the Frenchand Germans appear for the first timeto be contemplating the possibility that the point of no return has beenreached, that Greece may be finishedand that the only way to save theentire EU political project will be tocut Greece loose. The establishmentstill hopes Greece could be persuadedto vote yes, thus keeping the birth-place of Western civilisation withinthe euro-empire, but the psychology has changed drastically. The Greekscould vote No in December – especial-ly given that Papandreou wants thereferendum to address austerity, noteuro membership, which remainspopular in Greece. If that happens,the only way for the bailout planannounced with such fanfare last week to retain any credibility would be for Greece no longer to be included.

Many in Brussels are livid atPapandreou’s decision to ask the peo-ple what they think, always a no-no toundemocratic elites. But Europeantaxpayers are also rightly angry; as far

as they are concerned, beggars cannot be choosers and Greece should eitherdo what it is told or be thrown out. The arrogance of those who believethat they are entitled to live beyondtheir means forever, courtesy of tax-payers in harder-working, less corrupteconomies, is indeed extraordinarily galling. The Germans and many oth-ers would undoubtedly vote to throw Greece out of the EU if they weregiven the choice in a referendum.

The Eurozone’s main aim now will be to contain the fallout from any Greek default and withdrawal fromthe euro. The value of Greek assets(land, equity and debt) redenominatedin a new drachma would slump 70-80per cent. Combined with inevitablecapital controls, social collapse andmass nationalisation, the chaos wouldinflict huge losses on all companies

with operations in the country. TheEuropean Central Bank itself may become insolvent as its Greek govern-ment bonds would become near- worthless. It too may require

recapitalisation. Yet it would undoubt-edly provide liquidity to those hit by the write-offs; the printing presses would go into over-drive.

To backstop other countries, espe-cially Spain and Italy, Merkel andSarkozy now want to accelerate theleveraging up of their bailout fund – but with the Chinese getting cold feetand the news yesterday that thefund’s latest bond auction had beenpostponed, prospects are poor. So what next? The EU is terrifiedinvestors will now start to questionItalian, Irish and Portuguese bonds. If one country defaults and quits theeuro, why not more? Should Ireland’sand Portugal’s debt be restructuredtoo? Will the Eurozone unravel next year? Anything is now possible.

[email protected] Follow me on Twitter: @allisterheath

THE FEDERAL Reserve will hold downinterest rates and continue with itsproject dubbed “Operation Twist”, itannounced last night.

Growth “strengthened somewhat inthe third quarter,” it said, yet warnedof “significant downside risks to theeconomic outlook, including strainsin global financial markets.”

Three hawks who had previously dissented against Operation Twist – an

easing policy which sees the Fed sell-ing short term assets and buying longterm ones instead – dropped theiropposition to the Fed’s decision.

Yet there is now dissent from thedovish side of the committee, withCharles Evans calling for “additionalpolicy accommodation”, perhaps indi-cating support for an extended dose of quantitative easing (QE3).

Yet private firms in the US added110,000 jobs in October, according to aseparate data release from ADP,exceeding economists’ expectations.

BY JULIAN HARRIS

US ECONOMY▲

Fed sticks to the Twist Ben Bernanke’s Fed voted 9-1 to hold monetary policy this month Picture: REUTERS

NEWS | IN BRIEF

Russia set to join the WTORussia removed the last major hurdle toits 18-year-old bid to join the WorldTrade Organisation yesterday by agree-ing to a compromise deal with Georgia,and it could now join the global tradingclub within months. WTO entry wouldmake Russia’s $1.9 trillion economy, the

biggest outside the 153-member club,more attractive to investors and cementRussia’s integration into the world econ-omy two decades after the fall of theSoviet Union.

ANZ disappoints with resultsAustralia and New Zealand BankingGroup turned out the least impressivesecond-half profit among Australia'smajor lenders this morning, stung byhigher costs, and sent a clear signalthat their growth is now on the wane.The bank posted four per cent growthin second-half underlying profit, muchless than two of its main rivals havereported, though for the full year ANZstill made A$5.65bn (£3.6bn). However,taking into account its trading activi-ties, second-half profit actually fell byaround two per cent to A$2.77bn, thefirm’s results showed.

EDITOR’S LETTER

ALLISTER HEATH

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

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

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

Treasury ministerDanny Alexander triedand failed to make animproved pensionsdeal with the unions

4th Floor, 33 Queen Street, London, EC4R 1BRTel: 020 3201 8900 Fax: 020 7283 5334Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowActing Night Editor Marion DakersBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Jo SimpsonPictures Alice Hepple

CommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

Head of Distribution Nick Owen

LENOVO FOUNDER LIU STEPS DOWN ASCHAIRMAN The man who founded Lenovo and built it into the world’s second- biggest PC maker by sales has retiredas chairman, handing over to hischief executive, in a sign of confi-dence that its recent turnround is ontrack. The retirement of LiuChuanzhi came as Lenovo’s net profitof $144m in the three months toSeptember beat expectations by soar-ing 88 per cent compared with last year, on strong PC shipments.

SEC EXPECTS TO FILE FURTHER CDOCHARGES The Securities and ExchangeCommission expects to file chargesagainst more Wall Street firms relat-ed to the sale of mortgage-linkedsecurities, with hopes of wrapping up

probes from the financial crisis in thenear term, according to a senior

enforcement off icial.

OSBORNE LOOKS TO SLASH BENEFITSBILLGeorge Osborne is looking at optionsto cut billions of pounds from next year’s benefits bill by scrapping infla-tion-linked rises, in a move that couldtrigger a fierce cabinet clash. The chancellor is alarmed at the polit-ical and economic difficulties pre-sented by the fact that benefits andpensions next year would rise by 5.2per cent, in line with the bumperinflation figure for September, the base month for the calculation.

KRAFT PRESSES AHEAD WITH PLANSTO SPLITKraft, the largest US food company by revenues, said on Wednesday it waspressing forward with its plans tosplit the company and that it wouldannounce leadership teams for theindependent businesses by the end of

the year. The name of the snacks com-pany will be voted on by shareholders.

BROMPTON SALE COULD RAISE £500M The Royal Brompton Hospital is con-sidering a sale of its prized Chelseahome in a move to secure its long-term future. The Times understandsthat the Royal Brompton & HarefieldNHS Foundation Trust has instructedSavills, a property adviser, to review its future options for the seven-acresite. One option it is considering is asale of the freehold, which couldraise hundreds of millions.

NETWORK RAIL FACES PUNCTUALITYFINENetwork Rail faces a potential fine of £500 million because of worseningpunctuality of passenger trains andfreight services. The rail regulator isdeciding whether the expected fail-ure of Network Rail to meet its per-formance targets this year is in

breach of the publicly funded compa-ny’s licence.

EVERYTHING EVERYWHERE SET TO AXE600 STAFFEverything Everywhere is to axe 600staff, in the third round of redundan-cies under its new chief executive Olaf Swantee. The company, formed 18months ago from the merger of Orange and T-Mobile, said the cuts would affect employees at its sites inLondon, Bristol, Hatfield andDarlington, who were briefed on Wednesday about the changes.

CUADRILLA ADMITS DRILLING CAUSEDBLACKPOOL EARTHQUAKESPrivate company Cuadrilla Resourceshas admitted that its activities probably caused two “seismic events” thatoccured in Blackpool earlier this year.In April, a tremor measuring 2.3 onthe Richter scale was felt in theLancashire seaside resort, followed by

an event in May that measured 1.5 onthe scale.

TURKEY’S MOVES EXPECTED TO HURTBANK PROFITS Turkey’s tightly regulated banks, which have been raking in recordprofits, are expected to show a changeof fortunes as a monetary policy focused on curbing bank lending, cou-pled with falling consumer demand,erodes margins. Turkey’s central bank last week effectively doubled theinterest rate it charges banks.

TOYOTA READY TO CONCEDE LEXUS’SSALES CROWN The head of Toyota Motor’s Lexus brand said global sales of the upscale vehicles will likely fall short of last year's total, with the brand set to loseits long-held status as the top-sellingluxury car in the US. He blamed thelikely fall on a combination of natu-ral disasters in Japan and Thailand, a

stronger yen against the dollar andtougher competition.

WHAT THE OTHER PAPERS SAY THIS MORNING

8/3/2019 Cityam 2011-11-03


WORRIES over European financial woes pushed the Bank of Japan intolending dollars to banks yesterday.

Responding to increasingly tightlending the Bank supplied $2m(£1.25m) to a one-week operation and$100m in a three-month operation.

Bankers in Japan believe a foreign bank with operations in the country needed the facility.

“This is probably a bank securingfunds for the year end,” said ShinseiBank’s Tomohiko Katsu.

“Europe’s problems are behind a

widening in market rates. Some banks will have to rely on central banks.”

THE FIRST bond issue by Europe’s bailout fund since it was given new powers was postponed yesterday onfears that there is not enough investorappetite for its debt.

Initially the fund, the EuropeanFinancial Stability Facility (EFSF), hadplanned to raise €5bn (£4.3bn), beforecutting the size of the issue to €3bnearlier this week and then postponingit entirely yesterday.

A banker close to the deal told City A.M. that the EFSF feared there was toolittle interest from investors, despite aspokesman blaming “market condi-tions”.

“Pension funds, insurers and othermajor investors are all very conserva-tive. They may not want to invest in what is essentially a new product at atime like this,” the banker said.

“The EFSF is waiting until after theG20 summit and Greece’s confidence vote on Friday, hoping that markets will have calmed down enough next week. Otherwise there is a clear risk tothe reputation of all parties involved if something goes wrong.”

A lack of demand would be a worry-

ing sign, throwing into doubt the abil-ity of the Eurozone to leverage thefund up to the slated €1 trillion it haspromised. If there is little demand forits debt, leveraging the fund couldprove extremely expensive.

Triple-A-rated sovereigns likeGermany have seen yields fall this week, but the EFSF felt that confidence would not extend to its debt.

“Investors don’t buy debt when they cannot properly assess its value,” saidthe banker.

Recently, Eurozone governments voted to change the fund’s powers,enabling it to offer better guaranteesto investors; to buy sovereign debt onthe secondary market; and to buy bank debt.

Worries over

slow demandfor EFSF debt

MARKETS rallied yesterday after a dra-matic fall on Tuesday as the possibleimplications of a Greek referendum were digested by the markets.

In stocks, the DAX rose 2.25 percent to 5,965.63, the CAC 40 movedup 1.38 per cent to 3,110.59 and theFTSE followed suit, up 1.15 per cent to5,484.10. In the US, the Dow Jones

rose 1.53 per cent to 11,836.04. The VIX went down 5.8 per cent to 32.74.Investors had rushed to buy in “safe

havens” like Germany and the UK, whose bonds rose.

Markit published its Eurozonemanufacturing purchasing managersindex (PMI) yesterday. The sector isdeclining at an accelerating rate,falling from 48.5 to 47.1 in October.

Globally, manufacturing PMI regis-tered at 50, the no-change mark.

Eurozone PMI fallsbut stocks bounce

CREDIT default swaps (CDS) on Greek debt shot up yesterday as Greece con-firmed it was looking to hold a refer-endum on the EU bailout package.

Five-year CDS soared 45.36 per cent, because investors saw an increasedchance of an official “credit event”.

If a haircut on private holdings of debt is “voluntary”, CDS are not trig-gered. However, if the referendumrejects the bailout, a non-voluntary default may occur.

It all comes down to a decisionfrom the 17-strong determinations

committee of the international swapsand derivatives association.

Greek CDS soaron referendumBoJ eases bankfunding trouble

BY TIMWALLACE

EUROZONE▲

BANKING▲

EUROZONE▲

German chancellor Angela Merkel and French president Nicolas Sarkozyhave persuadedGreece to hold areferendum as soonas possible

Picture: REUTERS

BY TIMWALLACE

EUROZONE▲

News 3CITYA.M. 3 NOVEMBER 2011

ANALYSIS l Greek 10-year bond yieldsspike on repeated crises

%

04 Oct 10 Oct 14 Oct 20 Oct 26 Oct 01 Nov

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24

23

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SHAREHOLDERS in G4S believe chair-man Alf Duch-Pedersen may stepdown within the next two days with-out further prompting in the wake of the botched attempt to buy Danishcleaning group ISS.

City A.M. understands that whilesome shareholders have said they willnot call for Duch-Pedersen’s head as aconsequence of the failed £5.2bntakeover bid, others are waiting to seeif he resigns voluntarily.

Still others have raised their con-cerns about Duch-Pedersen with G4S’s

broker, Deutsche Bank, despite the bank’s role in setting up the ISS dealand advising G4S to push on with it.

“Rather than launch into a full scalemeeting with the senior independent

director and non-executive directorsstraight away, it’s worth holding firefor a day or two as he may go of his

own volition,” one shareholder toldCity A.M.

Deutsche Bank has also come underfire from investors angered at the way the transaction was handled, as they feel they were given too little time toconsider the deal. “The advisers haveto take a lot of the blame for this,” oneindustry source said.

A G4S spokesman said it was in talks with shareholders to reassure them it would revert to its original strategy.

G4S investorswait for chairto step downBYALISON LOCK

SERVICES▲

YAHOO is contemplating the sale of aminority stake to a private equity firm followed by a large share repur-chase, in a bid to buy time to turn thefirm around, people familiar withthe matter have said.

The once-dominant internet pio-neer has seen its share of the US inter-

net search market fall while Google

maintains its lead and Microsoft con-tinues to expand there. Yahoo’s USdisplay ad impressions have also beenon the decline.

Under such a plan, a private equity firm would take a stake in Yahoo of around 20 per cent, and ally itself

with Yahoo co-founders Jerry Yangand David Filo, who together ownanother 9.5 per cent of the company,

these people said.

Yahoo considers selling minoritystake to private equity companyTECHNOLOGY

▲

THE CITY of London Corporation hasput its legal bid to evict the Occupy London protesters on ice while itdigests the church’s astonishing U-turn.

There are now fears the campsitesurrounding St Paul’s could remainuntil the 2012 Olympics.

Meanwhile, City A.M. has learned

the City of London Corporation hasheld meetings to discuss ways to prevent the protesters making it a target.

Sources close to the Corporationare expecting disruption to the LordMayor’s show on 12 November inretaliation to its bid to evict themfrom their makeshift campsite.

The development comes after the The Corporation appeared to lightenthe tone of its rhetoric. Earlier this

week a spokesman told City A.M. that

“camping in one of the most densely used spaces in the world is not anoption”. But yesterday a statementsaid it was only interested in clearingthe public highway, adding: “Let’shope talks can produce some early acceptable results.”

The campers yesterday held a 500-strong meeting in which they attempted to draft a mission state-ment linking the various protestmovements across the world.

City of London Corporationputs its legal challenge on iceBY STEVE DINNEENPROTESTS▲


Alf Duch-Pedersen, chairman of G4S, is under pressure to resign over his handling of itsbotched £5.2bn merger with Danish clearing group ISS

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GEORGE Osborne, the chancellor, was accused of hypocrisy over hisposition on a Tobin tax yesterday,after City A.M. revealed he had doubtsover such a levy despite publicly say-ing he would support one if adoptedglobally.

Chris Leslie, the Labour shadow Treasury minister,said: “For all his warm words inpublic about back-ing an internation-al financialtransactions tax, we now know thechancellor is giv-ing the banksnods and winks

Labour accuses Osborneof hypocrisy on Tobin tax

Chancellor Osborne Picture: REUTERS

BY JULIET SAMUELPOLITICS▲


in private that he wouldn’t supportone – even if it is agreed internation-ally.”

Yesterday, City A.M. published partsof a private letter from Osborne to bank chiefs, in which he assuredthem that “there would need to befurther discussions about whetherany financial transactions tax modeloffers an efficient mechanism toraise revenue”.

Leslie said: “This revelation

explains why George Osborne hasfailed to put this issue on the interna-tional agenda in the last 18 monthsand why he won’t be pushing for it atthis week’s G20 summit.”

Meanwhile, David Cameron, thePrime Minister, yesterday main-tained that the government support-ed a Tobin tax “in principle” – despiteOsborne’s private doubts about whether a levy could raise any rev-enue.

BANK CAPITAL increases proposed by regulators could force European banks to reduce their assets by €1.8trillion if they cannot raise it by othermeans, PwC claimed yesterday.

“If the European banks arerequired to increase their capital ratio by one per cent and are unable toraise the capital to do this, they would be forced to reduce risk weight-ed assets (RWA) by €1.8 trillion toachieve the ratio,” said PwC directorRichard Barfield.

The ongoing uncertainty over theEurozone rescue deal makes it very difficult for banks to raise capital inthe market to shore up their ratios,he warned, meaning a capitalamnesty could be deployed to give banks time to bolster their capitalratios without rushing to deleverage.

A one per cent rise in tier 1 capitalis equivalent to €112bn under Basel II,a €1.3 trillion reduction in risk weighted assets or €1.8 trillion underBasel III, the firm said.

Capital rules tohammer banks’assets – PwC

BANKING▲

Right: How webroke the storythat Osborne haddoubts over a global Tobin tax

8/3/2019 Cityam 2011-11-03


QUESTIONS were raised yesterday overthe man brought in as the miracle-

worker who would execute a speedy turnaround of bailed-out bankinggiant Lloyds.

Expectations could hardly have been higher when the appointment of António Horta-Osório, former CEO of Santander UK, was announced, almostprecisely a year ago.

He rode a wave of admiration in theCity and concerted political supportfrom UK Financial Investments (UKFI)and the treasury to land the job. Hispolitical supporters championed himas the man to fix up the loss-making,

bailed-out high street giant for aspeedy privatisation.

But a year later, his reputation asone of the City’s fastest rising stars liesin tatters, with some in hindsight now dubious over his appointment.

The decision to hire the youngestCEO of the UK’s major banks mighthave raised eyebrows if the City hadnot been so entranced by his charisma

and his seemingly effortless integra-tion of stricken assets at Santander UK.Having inherited a messy, failing

behemoth, he wowed investors by tack-ling issues that had languished on the

bank’s balance to-do list for years: theforced sale of 600 branches, the repay-ment of the Bank of England’s specialliquidity scheme, adapting to new cap-ital rules and the hasty shrinkage of anunwieldy balance sheet.

But the to-do list only grew longeras the economy worsened. He

brought in lieutenants from his old bank, clearing out some experiencedLloyds insiders.

Some were surprised when opportu-nities for several high-profile meetings

with figures such as outgoing ECBpresident Jean-Claude Trichet and for-mer US president Jimmy Carter pre-sented themselves but Horta-Osórioshowed little interest. Others suggesthe simply did not have time amid aseven-day diary of meetings.

It was on Monday that he reached breaking point, withdrawing from ascheduled appearance at a parliamen-tary committee. By 6pm the next day,

his board was left with no CEO and aCFO already on his way out. So muchfor a return to “boring banking”.

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Eight months of

pressure that leftOsório exhausted

Focus | Lloyds in turmoil8 CITYA.M. 3 NOVEMBER 2011

1 MARCH2011

9 MARCH

PLENTY OF ACTION BUT THE SHARE PRICE

Retail director Helen Weir and insurance headArchie Kane announce their intention to leavethe bank. Kane is not replaced, with the insur-

ance arm now reporting directly to Horta-Osório.

Riding a wave of political support, Horta-Osório vowed to return to boring banking.Reality was less kind, writes Juliet Samuel

TIM Tookey, who is taking over atLloyds Banking Group as its inter-im chief executive, has reassuredhis future employers that he willdefinitely be joining them in theNew Year.

Tookey, currently the bank’schief financial officer, is currently

working out his notice before join-ing Friends Life next March.

On Monday evening, after learn-ing that he had been appointed tothe top job at Lloyds, albeit on aninterim basis, Tookey spoke with

Andy Briggs at Friends Life to givehim reassurances that he wouldstill be on his way, “whatever hap-

pened” at Lloyds.

Tookey, who was at LloydsBanking Group during its disas-trous acquisition of HBOS, is notconsidered likely to beoffered the top jobat Lloyds full-timein any case,given that thepart govern-m e n t - o w n e d

bank has beenkeen to distanceitself from itsrecent past,in particu-lar theH B O S

acquisition.

NEW BOY | TIM TOOKEY

The interim report from theIndependent Commission onBanking says it is re-examin-

ing the scope of Lloyds’divestments, including sellingoff more branches than EU

recommendations.

20 APRILAntónio Horta-Osório(below) succeeds EricDaniels as chief execu-

tive having joinedLloyds’ board in January.

He orders a strategicreviewto speed up

asset disposals.

UK banks lose theirchallenge to the

Payment ProtectionInsurance (PPI) ruling,meaning they will haveto re-examine all PPI

sales even if consumershave not complained.

Announces plans to cutcosts by £1.5bn a yearby 2014, reduce Lloyds’international presence

to fewer than 15 coun-tries (from 30 now)and concentrate ondomestic banking.

30 JUN

11 APRIL

62p

8/3/2019 Cityam 2011-11-03


CHIEF executives stepping down forhealth reasons are a rare breed,despite their gruelling schedules andthe intense pressure mounted onthem.

Andy Hornby’s departure from Alliance Boots less than a year afteraccepting the job shocked the busi-ness world. Executive chairmanStefano Pessina later revealed Hornby

was suffering from stress and hadprobably returned to the cut andthrust of leading a multi-nationalcompany too soon after the collapseof HBOS.

Mike O’Neill lasted just a single day as chief executive of Barclays before

being forced to step down in 1999. Hechecked in for a routine medical afterarriving at the company only to dis-cover a heart murmur.

Chris Moyes quit as boss of thetransport company he had founded,Go Ahead Group, in July 2006 after

becoming too ill to carry on. After bat-tling what was described as a “shortillness,” he died three months lateraged 57.

The recently-deceased Steve Jobsfamously stepped down as chief exec-utive of Apple over the summer aftera long fight with cancer. Before thishe had taken two leaves of absence –once in 2004 and again in 2009.

Quitting at thetop is a veryrare occurrence

BANKING▲

Focus | Lloyds in turmoil 9CITYA.M. 3 NOVEMBER 2011

Former Alliance Bootsboss Andy Hornby(left) and Go Ahead

founder Chris Moyes

Apple founder Steve Jobs (left) and former Barclays boss MikeO’Neill

KEPT FALLING

In its final report, the ICBdrops its demands forbranch sales to be sub-

stantially enhanced. Focusis switched to making sure

the new entrant to themarket will be competitive.

Finance chief Tim

Tookey hands in hisresignation, andsays he’ll move tothe same role atFriends Life as of February 2012.

Yesterday he wasannounced as Horta-

Osorio’s interimreplacement.

Lloyds, along with theother big four UK banks,passes the EuropeanBanking Authority’s

stress tests. Lloyds coretier 1 capital ratio under

the modelled adverse sce-nario was 7.7 per cent.

Shares hit a two-year low as Lloyds

announces a first-half loss of £3.3bn, whichit blames on the PPI provision. Horta-Osório says the branch sales are on track to

be completed by the end of 2012.

5 MAYAt Horta-Osório’s first results, Lloyds is the first

bank to tell the market how much of a hit itcould take from the PPI scandal. It sets aside

£3.2bn for claims, resulting in a pre-tax loss of £3.47bn in the first three months of 2011.

15 JULY

4 AUGUST

13 SEPTEMBER

9 SEPTEMBER

19 SEPTEMBER

2 NOVEMBER

Horta-Osório

takes leave of absence on

medical orders.

29.21p

City A.M. reveals that Lloyds’branch sale has hit trouble,with the sale price likely tobe well below the £2bn the

bank was hoping for.

8/3/2019 Cityam 2011-11-03


STANDARD Chartered has forecastincome growth of at least 10 per centthis year, it said yesterday, helped by astrong showing in Asian markets, put-ting it on track for a ninth straight year of record earnings.

The bank did however see growthslow in the third quarter, led by a fur-ther slowdown in India where condi-tions are likely to stay difficult for themedium-term.

StanChart said its income growthslowed to a “high single digit” per centin the first nine months of the year,marking a slowdown from over 10 percent in the first half, but expects full year growth to return to a “doubledigit” level.

Income growth exceeded its costexpansion, with expenses in the thirdquarter largely similar to the levelrecorded in the first half.

The London-headquartered bank, which makes more than 80 per cent of

its earnings in Asia and other emerg-ing markets, did not give specific fig-ures as it is only required to reportthose on a bi-annual basis.

Still, its shares dropped 1.22 per centto close at 1,421p, due to a slowdownin India. Income in India, which over-took Hong Kong as StandardChartered’s biggest profit contributorlast year, fell by about 14 per cent inthe first nine months, compared witha 12 per cent decline in the first half of the year. Indian earnings fell almost 40per cent in the first half.

StanChart setto post recordprofits again

NEDBANK Group, South Africa’sfourth-largest bank, said yesterday it managed to boost its earnings

from fees and commissions in alean nine months that saw its loan book expand just three per cent.

Nedbank, which is majority owned by insurer Old Mutual, saidnon-interest revenue totalled 10.9bnrand (£854m), compared with 9.4bnin the same period a year earlier.

Net interest income totalled13.3bn rand, versus 12.2bn a yearearlier.

Nedbank’s loangrowth is muted

BYHARRY BANKS

BANKING▲

BANKING▲


Sands gets costs under controlHOW many bank bosses wish they could include the following sen-tence in a statement to the stock exchange? “The group is in excellentshape and well positioned in growthmarkets.”

Yet that was the message from

Standard Chartered boss PeterSands yesterday, when he updatedmarkets on the bank’s third quarter.Income growth slowed a little, dueto local difficulties in India, butshould return to double digit per-centage levels for the full year.

The bank is still reaping therewards from avoiding risky betsprior to the crisis and from its expo-sure to Asia.

But its strength in emerging mar-

kets has proved to be the source of its biggest problem: rising costs.Highly educated bankers who are well-versed Mandarin – or the myri-ad of other languages the bank’sstaff speak – are hard to come by. And they’re certainly not cheap.

But there was even good progresson this front. While costs have con-tinued to rise, with headcount up by around 750 this year, income hasrisen even faster. That means theclosely-watched cost-to-incomeration, which stood at 56 per cent inthe first half, is starting to fall.

BOTTOMLINEAnalysis by David Crow

StanChart boss Peter Sands said the bank was in excellent shape Picture: REUTERS

ANALYSIS l Standard Chartered

p


1,550

1,475

1,500

1,525

1,450

1,425

1,400

1,421.002 Nov

FRENCH Prime Minister Francois

Fillon yesterday urged the nation’s banks to show restraint in payingout dividends to shareholders andcalled for any bonuses based on 2011results to be “significantly lower”.

Fillon, speaking after a meeting with leading banks, also said thelenders confirmed they would notneed state capital injections to bol-ster core Tier 1 capital ratio to thenine per cent target called for by theEU to confront the sovereign debtcrisis.

French PM: bankbonuses must fall

BANKING▲

8/3/2019 Cityam 2011-11-03


MORE THAN seven in ten companiesin the S&P 500 have beaten forecasts

with their results so far this earn-ings season, figures from ThomsonReuters show.

Of the 370 or so firms to haverevealed their third-quarter results,19 per cent have missed forecastsand 11 per cent have matched expec-tations – but seventy-one per centhave surpassed forecasts.

The best performer so far has been

Morgan Stanley, whose earnings pershare of $1.14 was 280 per centabove forecasts, the statistics show.

Morgan Stanley also beat revenuepredictions by 33 per cent.Goodyear, Allstate Insurance,Motorola and Regions Financialhave also beaten consensus fore-casts.

At the bottom of the earningsleader board are Amazon, which

was 42 per cent below forecasts withearnings per share of $0.14, and

Nicor, who missed expectations by 60 per cent.

The best performing sectors so farinclude technology, where 43 firmshave beaten earnings expectationscompared with seven that missed,and industrials, where 40 have per-formed better than expected and sixhave performed worse, according toseparate Bloomberg figures.

Financial firms have been themost difficult to predict in this earn-ings season, with 43 firms deliver-ing positive surprises and 20 firmsdisappointing on forecasts.

Companies still to report includeKKR, which brings out its results onFriday, and McDonalds andCocaCola Bottling, due on Tuesday.

S&P firms ontrack to beatexpectations

MASTERCARD reported sharply high-er third-quarter profit yesterday, easily

beating Wall Street estimates on double-digit increases in volumes.

The company’s chief executive alsosaid on a conference call with analyststhat consumers were still spendingdespite economic uncertainty, though

growth comparisons will start to getharder from this month.

The New York-based card processingcompany reported net income of $716m (£448.9m), up from $519m a

year before. Net income attributableto the company was $717m, versus$518m a year earlier. It was the compa-ny’s biggest earnings beat in the lasttwo years, according to Reuters data.

Revenue rose more than 27 per cent

to $1.8bn.MasterCard said gross dollar vol-

ume rose 18.1 percent, while transac-tions processed rose 20.5 per cent.

The firm’s shares hit an all-timehigh in morning trading before givingup some gains, though they closed up6.99 per cent at $23.36.

MasterCard said it is also havingsome success internationally, partic-ularly in Brazil and the Netherlands.

MasterCard says consumers are stillspending as its net income jumps 38pc

BYHARRY BANKS

US ECONOMY▲

BYHARRY BANKS

CONSUMER▲

● The Standard & Poor’s 500 index coversthree-quarters of US equities by value● Seventy one per cent of the results out so farhave beaten expectations● Tech and industry have fared particularly well

FAST FACTS | S&P 500 EARNINGS


NEWS CORP PROFITS SLIP BUT EXCEED FORECASTS

RUPERT Murdoch's News Corp last night posted better- than-expectedadjusted quarterly profit, even as thecompany struggleswith speculation

about future leadership at the family-controlled mediaconglomerate. Fiscal first quarter profit came in at $738m (£463m),down from $775mlast year.

Picture: REUTERS

8/3/2019 Cityam 2011-11-03


GERMAN truck and bus makerMAN said Europe’s commercial

vehicle market had put the brakeson in the third quarter, and

warned that demand would likely remain muted in the region for therest of the year.

MAN’s operating profit fell by oneper cent to €321m (£277m) in thethree months through Septemberand return on sales narrowed toeight per cent from 8.6 per cent.

But the group still confirmed itsoverall outlook for 2011, banking on

robust demand in Latin America.

RUSSIA’S fourth biggest gold minerPolymetal was yesterday officially admitted to the FTSE 100 after switch-ing from a Moscow listing.

The move, which saw pol follows a£491m share placing that values thecompany at £3.55bn. The placing waspriced at £9.20 – the bottom of therange that was set between £9.10 and£10. Sources said the float was 50 percent oversubscribed.

Polymetal’s stock closed six percent higher, at 930p, yesterday.

Alexander Nesis will see his family retain a 19 per cent stake of the com-pany he founded.

Polymetal, which is also Russia’slargest raw silver miner, has securedthe listing without any need forexemptions to be given on corporategovernance rules.

Numerous other Russian floatshave stalled in recent months, includ-ing Polyus Gold, a rival Russian goldminer.

On Monday Russian potash minerUralkali said it is also considering afull stock market listing in Londonnext year as one of several options for

improving shareholder value, butfirst needs to improve its corporategovernance standards.

Nesis is also a 12.16 per cent ownerof Uralkali, according to Uralkali’s

website, making him the second- biggest shareholder behSuleiman Kerimov.

He said: “London is the financialcapital of the world alongside New

York. If the FTSE 100 was just British,it would mean losing business.”

Russian tycoon Alexander Mamutand Czech investor PPF also ownstakes in Polymetal.

A total of 47 Russian companieshave their shares traded on London’smain market, the vast majority of

which are in the form of globaldepositary receipts, effectively a cer-tificate of foreign ownership of aRussian domestic share.

Moving to a premium listingrequires a significant free float andmore exacting standards of corporategovernance, but brings with it accessto additional tracker funds which fol-low the index.

HSBC and Morgan Stanley wereacting as joint global co-ordinators onthe deal with VB Capital and CollinsStewart also advising.

Polymetal in

debut day onthe FTSE 100

INTERCONTINENTALEXCHANGE’Squarterly profit jumped a better-than-expected 38 per cent as high volatility in the quarter drove robust US andEuropean futures trading.

ICE’s futures trading and clearingrevenues were up 24 per cent fromlast year on the back of a 23 per cent

jump in trading volumes. The popu-lar Brent crude and Gasoil contractsgrew.

The US-based exchange and clear-inghouse operator earned $132.6m(£83.1m) in the quarter, up from$96.3m a year ago. Revenue jumped

19 per cent to $340.8m.

ICE profits riseon volatilityMAN hit by lowEuropean sales

BY JOHN DUNNE

MINING▲

FINANCIAL SERVICES▲

LARGE foreign-controlled companiesthat list in London could be blockedout of a new FTSE index as investorsare so concerned about poor gover-nance, FTSE Group said yesterday.

The index provider has asked mar-ket users if they want a new index thatstrips out firms with low free floats, ormakes them meet tough governancecriteria, to reassure investors as a surge

of Russian groups plan to list.FTSE requires non-UK firms to floatat least half their shares to be includ-ed in its indices, but firms instead lista UK-incorporated holding company and float about 20 per cent of shares,leaving investors with little controlover decision-making.

“Investors are unsure about thenumber of Russian resources compa-nies seeking to be included into theFTSE through UK incorporation,” said

FTSE’s managing director of indexgovernance, Chris Woods. “We recog-nise that some of our users may haveconcerns that a simple 25 per centthreshold would not be enough, so we

will ask them if they want a higherfloat or a governance threshold.”

The move could see a new indexthat strips out such Russian or emerg-ing market-controlled groups. Russianminer Polyus Gold plans to floatabout 20 per cent of its shares shortly.

Russian IPO concerns couldsee oligarch-free FTSE index

CAPITAL MARKETS▲

Russian businessman Alexander Mamut has a stake in Polymetal Picture: PA


BY CATYHIRST

TRANSPORT▲

8/3/2019 Cityam 2011-11-03


8/3/2019 Cityam 2011-11-03


ONLINE vouchers firm Grouponcould price shares in its initial publicoffering $1 or $2 above the currentrange of $16 to $18 per share, accord-ing to two investors who said they spoke with the lead underwriters yes-terday.

Groupon is on file with theSecurities and Exchange Commissionto sell 30m shares in the IPO, equiva-lent to a 4.7 per cent stake. The books were due to close last night, with trad-ing on the Nasdaq to begin on Friday.

If the IPO prices at $19 per share,

that would value Groupon at$12.02bn (£7.5bn).

PENSIONS specialist Standard Lifemanaged to protect its assets fromthe slump in financial markets since July but said yesterday that inflows of capital and sales had missed expecta-tions in the past nine months.

New business sales increased by tenper cent to £15.5bn, below expecta-tions for a 13-15 per cent gain, asStandard Life struggled to convincecautious company pension schemesto move to its management in rapid-ly-changing markets.

It said inflows of savings funds were hurt by the tough backdrop,though, as flows into its life and pen-sion division fell six per cent to£3.3bn, far below expectations.

Chief financial officer Jackie Huntsaid the slowdown in fund flows“does not go to the heart of our busi-ness model”.

“When market conditions are very volatile, pension trustees tend not tomove their schemes as they don’t want to take the risk,” she told City A.M. “We saw slowing flows but wethink we are still outperforming themarket.”

Net flows into Standard Life’s UK business across all personal and cor-porate savings products also fell by almost a fifth compared to the firstnine months of 2010, to £1.8bn, withthe institutional pensions division bearing the biggest falls.

But its assets under administrationlost less than three per cent of their value to reach £191.1bn and its fundmanagement business Standard LifeInvestments was also only about 3.5per cent down in value since June.

Analysts said the fall-off in corpo-rate pension activity was understand-able but could pose problems asStandard Life has made the area thecornerstone of its strategy for futuregrowth.

Standard Life

sales leap butmiss forecast

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FINANCIAL services group PwC is fac-ing accusations from sub-primelender Cattles, it emerged yesterday.

Cattles, which was sold to its credi-tors this year, has claimed in a courthearing that PwC’s audits of the firm between 2005 and 2007 led to a“gross misstatement” of the firm’sfinancial position.

Cattles made some £850m of unan-ticipated write-downs in 2009, push-ing it through banking covenants.

PwC did not return a call for com-ment yesterday, but it has been

reported that it will vigorously defend its work.

Cattles accusesPwC over auditGroupon couldraise float price

BYALISON LOCK

INSURANCE▲

TECHNOLOGY▲

FINANCIAL SERVICES▲


Standard Life chief executive David Nish said the business is on track

IS THE SALES MISS A PROBLEM FOR STANDARD LIFE? By Alison Lock

“

BARRIE CORNES | PANMURE GDN

The figures are solid if not spectacular.Long term savings net inflows were slightly disap-pointing with life and pension net inflows at£3,280m, some 16 per cent below consensus. Inthe UK it is well placed ahead of the introduction

of the RDR and pension reform, but is trading onone of the lowest valuations in the sector.

”

“

KEVIN RYAN | INVESTEC

Given the market environment webelieve the numbers are reasonable. The featurewas the 13 per cent rise in UK present value of new business premium for the nine months, to£11.3bn. Our £11.4bn forecast was not met but, in

retrospect, this was an ambitious targetgiven the market turmoil.

”

“

TREVOR MOSS | BERENBERG BANK

We would not read too much into this at this stage. Winning new scheme mandates is by nature lumpy and theoverall trends have been reasonable. But while Standard Life is doing well in group pensions, SIPPS and retail funds, it isby no means doing much better than anyone else, despite massive investment in these areas in recent years.

”

ANALYSIS l Standard Life

p


230

220

225

215

210

205

205.902 Nov

8/3/2019 Cityam 2011-11-03


MF Global is trying to account for hun-dreds of millions of dollars in clientaccounts, a US official said.

CME Group, one of its regulators,said it looked as if a transfer of cus-tomer-segregated funds took placeafter a CME audit last week.

“It appears that any transfer of suchfunds occurred following the comple-tion of CME audit procedures respect-

ing such funds,” CME said.MF Global’s meltdown came after it built up $6.3bn (£3.95bn) in high-risk bets on European bonds.

The FBI has an interest in regulatory probes, a person briefed on the mattersaid, while it was reported that theCommodity Futures TradingCommission is set to issue subpoenasto the firm. MF Global and Jon Corzineare not accused of wrongdoing.

Meanwhile, a source familiar withthe matter said that US regulators

started raising concerns about broker-dealer MF Global’s Eurozone sovereigndebt exposure as early as June.

The Financial Industry Regulatory Authority (FINRA) became concernedthat MF Global had a large position inEuropean sovereign debt and was notholding enough capital against it.

FINRA spoke with MF Global abouthaving the exposure off balance sheetand after lengthy conversations with itand the SEC, MF Global agreed to addin additional capital.

Terms apply. Subject to credit check.

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MF Global regulators tryto locate funds shortfallBYHARRY BANKS

CAPITAL MARKETS▲


MORE NEWSONLINE

www.cityam.com

Jon Corzine’s firm filed for Chapter 11 bankruptcy protection on Monday Pic: REUTERS

8/3/2019 Cityam 2011-11-03


THE Society of Pension Consultants’party at the Dorchester was no doubta wild affair. But last night belongedto the Investment Management Association, which drew 1,200 fundmanagers to its annual dinner at the

Grosvenor House hotel.“No matter how glittering thealternative occasion, everyone ishappy to give it up to come here,”said the IMA’s chief executiveRichard Saunders on the money managers’ social fixture that has been running for 20 years.

“This party is the first thing peopleput in their calendar when they areplanning their events budgets, nomatter how tough times are,” addedQuentin Smith of Royal London AssetManagement. “If you are not here, you are conspicuous by your absence;people begin to question whether youare a viable proposition.”

By that yardstick of success, Artemis, Cazenove Capital, Ignis Asset Management and InvescoPerpetual – to name but a handfulof the fund managers that boughtthe 128 tables at the dinner – are a

going concern. “The falls in themarket have hit the industry, but

unlike banking it is not a leveragedindustry,” Saunders told TheCapitalist . “The majority of fundmanagers have stayed pretty healthy and profitable.”

In fact, said Saunders, the IMA

members who voted for theevening’s awards for financial jour-nalism manage £2.7 trillion – biggerthan the global hedge fund indus-try and 20 times the size of the UK hedge fund industry.

The dinner was also “a large partof the plans” of Scottish WidowsInvestment Partnership’s FrancisGhiloni, down on business from thefirm’s HQ in Edinburgh, who hadspent the previous evening watch-ing new Scottish Widows chief exec-utive Toby Strauss presenting the Women in Pensions report at theHouse of Lords. “Women retire withfar less in t heir pension than men,” warned Ghiloni. “We need to raiseawareness of the importance of planning for the long term.”

Meanwhile, another fund manag-er mole offered The Capitalist his ownentertaining analogy on the Greek

referendum. “Like turkeys votingfor Christmas,” he fumed.

17EDITED BY

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

The CapitalistCITYA.M. 3 NOVEMBER 2011

Ben Waterhouse of Fidelity and Paul Stevens of First Port Asset Management

Quentin Smith of Royal London Asset Management and Polina Khoroshilova of TheWealthNet

Peter Ruddy of Wilfred T Fry and Rob Baileyof AXA Investment Managers

Tom Golland of Gravity Global and Gavin Ingram and Tracy Fennell of F&C Investments

FUND MANAGERS KEEPPARTY ASSETS SOUND

Karl Midl of Capita and Dave Francis, Trevor Bradley and Myles Marion of Ruffer

Malcolm MacKenzie of Aviva Ivestors, Natalie North of Novia, andCatie Bennett and Simon Young of Aviva Investors

8/3/2019 Cityam 2011-11-03


VOLATILE markets took their toll onfund manager Henderson over thepast quarter, it said yesterday, as nervy investors withdrew funds and fallingmarkets reduced the value of itsinvestments.

Henderson, which bought its rivalGartmore in January, said investorstook a net £1.9bn out of its funds inthe three months to the end of September, split about evenly betweenthe two brands, as European retailclients cut back on their risk expo-sure.

The market turmoil then slashed afurther £5.9bn from the value of itsfunds as equities lost value and bond

yields fell, leaving Henderson’s assetsunder management at £65.4bn, down

by £9bn or 12 per cent from June.Chief executive Andrew Formica

said markets were “extremely chal-lenging” but the investor rush to cashshould reverse if they improve.

“We…anticipate uncertain and volatile market conditions for at leastthe remainder of this year. However,as we saw post 2008/2009, once volatil-ity subsides, investor demand for equi-ties should return,” he said.

Analysts said the loss to assetsunder management was less thanexpected, while Henderson said it hada net £700m in commitments frominstitutional investors to its funds.

“Flows are unsurprisingly negative but small in a group context,” saidSinger Capital analyst Sarah Ing.

Hendersonfeels pain of market slumpBYALISON LOCK

FUND MANAGEMENT▲

SECURE Trust Bank, the retail bank-ing arm of Arbuthnot Banking Group,started life as an independent entity

yesterday after floating successfully on the alternative investment marketof the London Stock Exchange.

The float, which at 720p per share valued Secure Trust at £102m, raised

£25m, with Secure Trust gaining£12m to plough into growing the

bank’s loan book and give it the fire-power to make acquisitions as itshapes up to compete in the UK retail

banking market.Broker Collins Stewart also placed

another £13m of existing Arbuthnotshares to return capital to the group.

Secure Trust’s chief executive PaulLynam said it was “an important mile-stone” for the bank. “We believe we

can build substantially on our currentposition,” he added.

Arbuthnot’s £102m Secure TrustBank starts life on junior market

CAPITAL MARKETS▲

ASSET manager St James’s Place booked a 13 per cent rise in new business to £153.9m in its fiscalthird quarter to the end of September, beating analyst expecta-tions despite turbulent markets.

Net inflows rose by £100m to£800m year on year while fundsunder management dropped eightper cent over the quarter to £26.7bn,

in line with consensus estimates, thecompany said in a trading update yesterday.

Total manufactured business, which represents 90 per cent of busi-ness at St James’s Place, was also up13 per cent to £138.5m, the firm saidin its quarterly update.

“Market uncertainty has affectedtiming of clients’ investment deci-sions; we are not immune fromthat,” said chief executive DavidBellamy.

“Nevertheless, the breadth of ourinvestment proposition, together with the strength of our distribu-tion, continues to give us competi-tive advantage.”

While noting some nervousnessamong its investors in the face of escalating economic concern andthe unresolved Eurozone debt crisis,St James’s said it continued to retain95 per cent of its client’s cash. It saidits capital levels had not alteredmuch in the quarter.

St James’s Place wins newbusiness despite turbulenceBYHARRY BANKS

FUND MANAGEMENT▲


Henderson, led by Andrew Formica, has seen its funds fall Pic: Micha Theiner/CITY A.M.

ANALYSIS l Henderson

p


130.00

127.50

125.00

120.00

122.50

117.50

115.00

112.50

113.202 Nov

8/3/2019 Cityam 2011-11-03


8/3/2019 Cityam 2011-11-03


To celebrate ING’s continuing association with arts charity The Discerning Eye,

ING Commercial Banking has teamed up with CityAM to offer you the chanceto win up to £1,000 of art. The ING Discerning Eye, with its slogan “new artists,new audiences”, showcases the work of unknown artists alongside their more

established contemporaries.

This year a total of 611 pieces of art, representing the work of 300 artists, has

selector will use their own dedicated gallery space to display their choices, providing a unique range of themes which has earned the exhibition an enviablereputation among ar t lovers and collectors alike. All the art on show is for sale.

For a chance to win up to £1,000 to spend on an artwork of your choice from theING Discerning Eye exhibition, simply answer the question below:

How many artists are being represented in the exhibition?

Please visit www.cityam.com/competition to enter t he competition.

Terms and conditionsThe winner will be entitled to choose a painting from the ING Discerning Eye exhibition up to the value of £1,000. The prizeis non transferable, non negotiable and no cash alternative is offered. Entry to the prize draw is free and is open to anyoneaged 18 years and over and resident in the UK, except employees of ING Bank N.V. (“ING”), their families, agents or anyoneelse professionally associated with the draw. Only one entry per person is permitted. The closing date is midnight on Sun-day 6 November 2011. The winning answer will be drawn at random from all eligible entries received and the winner will leries in London to choose their painting. ING assumes no responsibility and is not liable for any costs, charges or expenses which the winner may be required to pay at any time in connection with the prize. By entering the competition youagree to receive further information and similar promotions from CityAM and Discerning Eye. The winner, by accept-ing the prize, agrees to participate in non paid publicity accompanying or resulting from this draw if required. The Editor’s and conditions at any time without giving prior notice and by continuing to take part in the promotion subsequent to anyrevision of these terms and conditions, entrants shall be deemed to have agreed to any such new or amended terms.

ING Discerning Eye, Mall Galleries,London SW1Y 5BD – 10-20 November,10am to 5pm, entrance free.Follow us on Twitter : INGDiscEyeand join our Facebook group : ING Discerning Eye

© Charles Williams Nicholas

Self Portrait (detail)

Win £1,000 of art with ING

STANDARD & Poor’s downgradedMatalan’s credit rating yesterday, ina further blow to the budget retailerafter it reported a slump in second-quarter profits last month.

The credit agency, which also cutthe rating on its £225m debt to“junk”, said the group had been hit

by “low consumer confidence, rela-tively high unemployment, andinflation, reducing its customers’discretionary spending”.

The budget clothing and home- wares retailer reported a profitslump of 63 per cent last month to£13.6m for its second quarter, blam-ing tough economic conditions.

The Skelmersdale-based group, which has 212 stores in Britain,

insisted that while pressure on dis-posable incomes and low consumerconfidence was “unlikely to changein the near future”, it continued to be a cash generative business.

“Matalan has £75.1m of cash on its balance sheet and continues to be aprofitable, cash generative androbust business with growth oppor-tunities,” a spokesman for the retail-er said.

Matalan rating downgradedby agency Standard & Poor’s


BYKASMIRA JEFFORD

RETAIL▲

Hugo Boss results defy

8/3/2019 Cityam 2011-11-03


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Next CEO Lord Wolfson said the group’s full year forecasts were on track Picture: REX


DO YOU FIND YOU ARE SHOPPING MORE ONLINE?Interviews by Caty Hirst

“Yes, because it is convenient and easy. Youcan browse for better deals and find the exactproducts you are looking for.”

MARK JAY | MARSH

“I didn’t two years ago – I still don’t now. But

my wife does now more than she used to. Shesays you get better deals and discounts withthings like delivery.”

ALAN WALSH | LLOYD’S OF LONDON

“Yes. It is just easier and generally cheaper.You can scope the deals out, like on eBay, tofind better prices.”

TOM DE’ATH | TALBOT UNDERWRITING

NEXT chief executive Lord Wolfsonsaid he expects to see retailing pick-up from the second quarter of next

year, after the fashion chain reportedit remained on track to achieve full-

year forecast profits.Shares rose to an all-time high yes-

terday after the FTSE 100 firm saidtotal sales, excluding VAT, were up3.3 per cent in the third quarter, driv-en by a surge in sales across its homeshopping business, Next Directory.

The directory business saw salesrise by 16.9 per cent, offsetting a 3.3per cent decline in revenues from itsstores as more consumers shift toonline shopping.

Next boss Wolfson, who raisedprices by seven per cent this yearafter a “perfect storm” of rising cot-ton prices and higher VAT, said it wasunlikely that prices would increasenext year.

“Things will get a little bit easierfor the consumer from the second

quarter next year -- because I think what is holding consumer spending back most at the moment is infla-tion,” he told City A.M..

“Inflation should fall out of thesystem from February onwards next

year.” The group narrowed its profits

guidance slightly for the year to January 2012, predicting pre-tax prof-its of between £550m and £585m.

Share closed up 6.49 per cent to2,723p as analysts said the forecast“was better than feared” amid thesurrounding retail gloom.

Next CEO saysretail to pickup next yearBYKASMIRA JEFFORD

RETAIL▲

ANALYSIS l Next PLC

p


2,700

2,600

2,650

2,550

2,500

2,723.002 Nov

HUGO BOSS, the German fashionhouse, posted a better-than-expect-ed rise in third quarter profits yes-terday, as the luxury sectorcontinued to defy the effects of theglobal economic slowdown.

The business, which is majority owned by the private equity firmPermira, reported a 30 per cent risein bottom-line profit to €119.7m(£103.1m) in the period from July toSeptember on a 14 per cent increasein revenue.

Chief executive Claus-DietrichLahrs said: “We are very confidentthat we will reach our sales andearnings forecast for the year as a

whole.”Hugo Boss’s outlook for 2012 was

less upbeat, warning that the eurodebt crisis could jeopardise growth.

Group sales were up 20 per centin the first nine months after

adjustment for currency effects,driven by strong growth in Asia andthe US. The retailer has forecastsales to rise by 15–17 per cent for2011.

In Europe, demand for luxury goods in Russia and eastern Europehelped offset a “deterioration” of consumer confidence in the UK,

which it blamed on public austerity plans and high inflation.

BYKASMIRA JEFFORD

RETAIL▲

the gloom

* These views are those of the individuals above and not necessarily those of their company.

8/3/2019 Cityam 2011-11-03


O2 OWNER Telefonica this week saidits new digital division already hasthree deals in the pipeline.

The new arm of the company,formed in September, plans to investheavily in up-and-coming tech firms, which can be integrated into the Telefonica brand or licensed to othercompanies.

Matthew Key, chief executive of thenew division, said O2 Digital choseLondon as its base because it is “oneof the most innovative parts of our business”.

He said the business is consideringestablishing a base in Tech City butsaid it also has strong ties to creativeindustries based in the West End.

Key said Telefonica can give start-

ups access to its 300m global cus-tomers, making it an attractivealternative to more traditional ven-

ture capital or angel investor routesto capital.

He added O2’s investment war-chest was “significant” but declinedto give an exact figure.

José María Álvarez-Pallete López, who will take over as European bossfrom Key, said the “whole future of the company is going to be based inthe digital space”.

He also said Telefonica must be“part of the solution, not part of theproblem”, in terms of the Europeancrisis. He said: “Things are bad butthere is light at the end of the tunnel. We need to use this to our advantageto change and invest.”

Telefonica Spain, currently one of the company’s three main hubs, will be subsumed into its European divi-sion, creating a €34bn (£30bn) rev-enue business with 105m customers.

The new digital arm will take equal billing with the European and Latin American businesses.

O2 ready fordigital deals

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BY STEVE DINNEEN

TELECOMS▲

AOL’s third-quarter revenue droppedsix per cent because of its dwindlingdial-up internet access business butstill beat analyst expectations, send-ing its stock soaring.

The company posted revenue of $531.7m (£333m), with advertisingsales up eight per cent to $317.7m.

However, its share of display adver-tising – the eye-catching ads found on

websites – has slipped as it faces stiff competition from Yahoo, Google andFacebook. Its third-quarter loss was$2.6m, compared with a profit of $171.6m a year ago.

The struggling company, which Time Warner spun off after a disas-trous decade-long merger, has seenits stock fall more than 40 per centthis year. It is trying to regain its sta-

tus as a popular online destination ina rapidly shifting online market.

AOL stock jumps despite a sixper cent decline in its revenuesTECHNOLOGY

▲

THE EX-CHIEF of Japan’s Olympus said yesterday he wanted to meet investiga-tors appointed to probe the scandalengulfing the firm, but said it would be unsafe for him to travel to Japan.

Michael Woodford, whose sackingand revelations about irregular dealsand payments exposed the scandal,said he would meet the company-appointed panel of investigators in

London, New York or Singapore.He did not explain his concerns butthe scandal has raised fears – denied by Olympus – that the deals could belinked to Japanese organised crimegroup the Yakuza.

Olympus has been under intensepressure to explain deals that have rat-tled confidence in the 92-year-oldcompany and wiped out half its mar-ket value.

The company has repeatedly deniedany wrongdoing.

Sacked Olympus chief: It isunsafe for me to go to JapanBY STEVE DINNEENTECHNOLOGY▲


HARRY POTTER HELPS TIME WARNER PROFITS

TIME Warner’s film division has had its best quarter ever, with revenues growing by 19 per cent and profits improving by a whopping 153 per cent, largely due to the success of Harry Potter and the Deathly Hallows Part 2. Overall, Time Warner reported $822m(£515m) in profits, up from $522m last year, and $7.1bn in revenues. Its publishing division declined in both revenues and earnings.

ANALYSIS l Olympus Corp

JPY


1,400

1,300

1,350

1,250

1,200

1,150

1,2002 Nov

8/3/2019 Cityam 2011-11-03


SATELLITE communications firmInmarsat bounced back from a tricky summer as its spectrum sharing deal with US partner LightSquared beganto pay off.

A $56m (£35.05m) boost to its topline from LightSquared offset a con-tinued decline in its maritime satel-lite revenue as the trend towards lessexpensive data rather than premium voice calls continued.

Its total revenues jumped 18 percent to $364m, with total active cus-tomer terminals rising 12.5 per cent year-on-year.

Chairman and chief executive Andrew Sukawaty said: “While third-quarter maritime services results were in line with our expectations, aspreviously stated, we are unlikely tosee consistent evidence of a return toMSS revenue growth until next year.

“While our core has its challengesthere’s no change in our view for the

rest of the year.“The seeds for our future growth

has been developing well.”Inmarsat is expected to realise a

long-expected restructuring of its topteam at the start of next year, withthe chief executive and chairmanroles being split.

Rupert Pearce, Inmarsat’s senior vice president of its InmarsatEnterprises business, will become itsnew group chief executive from January, while Sukawaty will becomeexecutive chairman.

Inmarsat inboost fromits US partner

SONY yesterday said it would fall to itsfourth consecutive annual loss, withits TV unit alone expected to haemor-rhage $2.2bn (£1.38bn).

The struggling electronics giant wasforced to cut its sales forecast for TVs,cameras and DVD players and said it isnow on track to post losses of $1.1bnfor the full year.

The sombre outlook, which follows

a quarterly operating loss of $1.6bn,heaped pressure on Welsh-born chief executive Howard Stringer. Analysts were shocked by the loss, with averageforecasts predicting a $500m profit.

Sony shares have now fallen by almost half in the last year, with the Japanese earthquake, soaring yen, fal-tering global economy and security breaches in its PlayStation business alltaking their toll. It is the latest in alengthening list of Japanese firms thathave posted poor quarterly results.

Sony says it will fall to itsfourth consecutive loss

Pressure is mounting on Sony boss Howard Stringer Picture : REUTERSBY STEVE DINNEEN

TELECOMS▲

NewsCITYA.M. 3 NOVEMBER 2011

BY STEVE DINNEENTECHNOLOGY▲

23

William Hill abandons ProbabilityShares in mobile gambling specialistProbability dropped 16 per cent afterWilliam Hill's takeover bid collapsed. It isunderstood Playtech, which has a 21 percent stake in Hill’s online arm, felt a dealwith Probability could have hurt its inter-ests. The company, Britain's biggest

bookmaker, was required to decidewhether it wanted to make an offer forProbability by no later than 17 Octoberbut last month Probability said that fol-lowing a joint submission with Hill, thetwo companies had been granted anextension until 14 November.

Logica cuts full-year growthIT services provider Logica yesterday cutits full-year growth forecasts as it postedthird-quarter results still hampered byweakness in the Benelux region. TheAnglo-Dutch company, which competeswith Capgemini and Atos Origin, said thegroup had improved in Britain and itsoutsourcing division continued to per-form strongly. But the weakness in theBenelux region showed little signs of improvement, with revenue down threeper cent in the first nine months of theyear, sending shares in the group downseven per cent.

Cable boosts ComcastComcast’s profits rose five per cent afterhealthy results from its cable business,calming recent worries that the industrywas succumbing to pressures from a fal-tering economy and poor housing mar-ket. The US firm relied on its cablebusiness to offset a weak quarter fromtwo of its newer media properties, theNBC television network and UniversalPictures. Revenue rose about five percent to $14.3bn.

NEWS | IN BRIEF

ANALYSIS l Inmarsat

p


490

480

470

460

450

440

464.402 Nov

8/3/2019 Cityam 2011-11-03


CONSTRUCTION in the UK hit a five-month high in October, figuresreleased yesterday from Markitrevealed, though output fell over the

year and the industry fears worse isto come.

The purchasing managers index(PMI) for the sector rose sharply to53.9, strongly up from the nine-month low of 50.1 recorded inSeptember. Any figure over 50 indi-cates expansion.

However, estimates released by theOffice for National Statistics (ONS)on Tuesday showed a 0.6 per centdecline in output over the thirdquarter of 2011, and a four per centfall compared with the same periodof 2010.

Markit’s index relating to futureproduction fell to its lowest levelsince December 2008, leading ana-lysts to warn that the growth may beshortlived.

“While the pick up in construc-

tion activity in October is to be wel-comed, it does not hugely dilutefears that the economy could con-tract in the fourth quarter,” saidHoward Archer from IHS GlobalInsight.

“The government’s public spend-ing cuts are limiting overall expendi-ture on public buildings, schools,hospitals and infrastructure. On topof this, house building activity islikely to be constrained by persistent-ly weak housing market activity, softprices and a worrisome outlook.”

Meanwhile, figures from the

department for communities andlocal government, also out yesterday,showed growth in housing supply falling.

A net of 121,200 additional homes were created in 2010-11, representinga six per cent decrease on the previ-ous year’s growth.

London saw the largest fall ingrowth rate, down 27 per cent f rom24,340 in 2009-10 to 17,830 in 2010-11. Almost 5,000 homes were demol-ished nationwide in the last year.

Constructiongrowth set tofall into 2012

BASING bankers’ rewards on return onequity (RoE) encourages short-termthinking and is in part to blame forthe financial crisis, Robert Jenkinsfrom the Bank of England’s financialpolicy committee (FPC) told a confer-ence in Paris yesterday.

“RoE is a convenient target,” hesaid, but it has made “many bankersrich and loyal shareholders poor”.

It can be hit by increasing return, ordecreasing equity, he explained.

This meant bankers collected short-term rewards, but failed to build long-term shareholder value.

“The risks that are run over timemay produce short periods of appar-ently high “returns” for which the loss-making risks come later,” he said.

The solution, he said, is to make bankers either wait for a decade to seethe value they have added, or adjustrewards on a risk-weighted basis.

FPC’s Jenkins in call forlonger-term bankers’ pay

Former RBS boss Fred Goodwin’s large pension pot received criticism Picture: REUTERS

BY TIMWALLACE

UK ECONOMY▲


BY TIMWALLACE

BANKING▲

NEWS | IN BRIEF

Real estate slows in EU and USAThe commercial property industrystruggled across much of the richworld in the third quarter, accordingto a report from the Royal Institutionfor Chartered Surveyors out yesterday.A weak global economic outlook islargely responsible, with most real

estate industries in a majority of coun-tries reporting declining investmentenquiries and new development starts.European developers reported particu-larly weak figures – a net balance of 48 per cent in France reported fewerdevelopment starts, compared with 24per cent in Italy and 13 per cent in theUK.

Scrap unfair dismissal say SMEsTwo thirds of small firms want unfairdismissal rules to be scrapped, accord-ing to a survey out today from theLondon Entrepreneurial Exchange(LEE). Seven out of 10 firms will behiring over the next six months, thestudy claims. More than half of thosesurveyed said they were concernedabout their business outlook after theproposed euro bailout plan, although61 per cent did not want a referendumon UK membership of the EU.

NIESR: UK recession risk 50-50Even if the Eurozone crisis is resolved,the UK economy faces an almost 50 percent chance of suffering two consecu-tive quarters of contraction, accordingto the National Institute of Economicand Social Research’s (NIESR) forecastout today. If leaders only “muddlethrough”, the risk rises to 70 per cent,the report said. The think-tank is callingfor a further loosening of monetary poli-cy in an effort to boost demand.

8/3/2019 Cityam 2011-11-03


FTSE 100, the cheaper the turbo, andthe higher the potential payout. Thisis because there is a greater risk of the knock out level being breached,and the turbo expiring worthless.

Let’s take T368 as an example. Ithas a strike level of 4,600 and costs£1.07 based on the FTSE 100 level of 5,640.55 at 12.13pm on 31 October2011. If the FTSE 100 closes at 6,000 on16 December, a rise of 6.40 per cent,

T368 will generate a payout of £1.40, apotential profit of 30.84 per cent. As aLong Turbo, we calculate it as follows:

The Underlying Asset Price (6,000)- Strike Price (4,600)Parity (1,000)

= Turbo Price (£1.40)

There is a new term here: parity. When the turbo is linked to a high value underlying asset such as theFTSE 100, it isn’t practical to provideexposure to its full value as the turbo

would be too expensive. Instead, theturbo scales down its exposure by afigure known as parity. Here, parity is1,000, which means that you wouldneed to buy 1,000 units of the turbofor exposure to one unit of the index.

Practically, it means we mustdivide any difference between thestrike price and underlying assetprice by 1,000 to find the turbo’s prof-it or loss. We can compare this lastexample to T382 which has a strikeprice of 5,200. This is a much riskierproduct because the FTSE 100 only has to fall 7.80 per cent before it hitsthe knock out level and the productexpires worthless. However, investorsare compensated for this additionalrisk by a much lower price.

With the FTSE 100 trading at5,640.55, each unit of T382 is £0.50,

substantially lower than T368. Assuch, the potential payout on T382 based on our example where theFTSE 100 closes at 6,000 on 16December is £0.80 (6,000 – 5,200 /1,000 = 0.800), a potential profit of 60.00 per cent.

IT’S YOUR CHOICE

You may not believe that the FTSE 100 will rise at all. If so, you would bemore interested in the range of eightShort Turbos.

The important point is, your finalchoice would be driven by your risk /reward profile.

The more risk you take, the higherthe potential reward, but you alsohave a much higher chance of losing

your money too. Just remember to ask yourself five

important questions when choosing

your turbo:

1. Which market are you interestedin? – you can select from a number

of turbos with a different underlyingasset.

2. Will the market rise or fall? – Forrising markets you would be look-

ing at Long Turbos, whereas for afalling trend you would look at Short

Turbos.

3. When do you think this marketmove will happen? – You can then

choose a turbo with an expiry datethat suits your view as to how long

you think it will take for your market view to play out.

4.How confident are you? – Thecloser the strike level is to the

underlying asset price, the cheaperthe turbo, but the higher the chanceof the turbo knocking out.

5. What’s the worst that could hap-pen? – make sure that the knock

out level provides enough scope forthe underlying asset to move with-out hitting this level, otherwise yourcapital will be lost.

TRADING A TURBOLike all our listed products, turbosare listed on the London Stock Exchange and trade like a sharethrough your UK stockbroker. Youcan research our full range of turboson our website www.sglistedprod-ucts.co.uk. When you find a productthat you wish to invest in, simply quote the EPIC code to your stockbro-ker, and they will carry out the trans-action.

You can buy or sell turbos at any point during trading hours.

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Turbos are leveraged products and suitable for sophisticated retail investors. The underlying assets may be volatile and your capital is at risk. You should not deal in this product unless you understand its nature and the extent of your exposure to risk. The value of the product can go down as well as up and can be subject to fluctuation due to factors such as price changes in the underlying instrument and interest rates. Turbos are issued by Societe Generale Acceptance N.V., a member of the SOCIETE GENER ALE group of companies. Any failure by Societe Generale Acceptance N.V. as Issuer, or by Societe Generale as Guarantor, to make payments dueunder the Turbo may result in the loss of al l or part of your investment. These products are not eligible for compensation from the Financial Services Compensation Scheme or any other compensation schem. This is a marketing document issued in the UK by the London Branch of Societe Generale. Societe Generale is a French credit institution (bank) authorized by the Autorité de Contrôle Prudentiel (the French Prudential Control Authority). Societe Generale is subject to limited regulation by the Financial Services Authority in the UK. Details of the extent of our regulation by the

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way. If you fall into this camp, youmight be interested to know that youcan take advantage of leveraged trad-

ing without risking more than youinvested, and you can do it simply

with turbos. Turbos are short termleveraged investment products thatare listed on the London Stock Exchange and trade through a regu-lar stock broking account. They havea limited life (usually less than sixmonths) and can be linked to the ris-ing or falling value of a global index,single stock or currency pair. Turbos

will generate a leveraged payout based on how far above (Long Turbos),or below (Short Turbos) the value of the underlying asset is in relation to apre-determined price level called thestrike price. The strike price alsodetermines the knock out level,

which is the safety mechanism thatlimits your potential loss by causingthe turbo to expire immediately if that level is ever touched.

GEARED EXPOSURE Turbos benefit from “gearing” whichessentially means that you can buy exposure to an underlying asset for afraction of the cost of buying the assetitself. For example, a turbo may belinked to ABC Company which is cur-rently trading at a price of £1.00. Theprice of the turbo may be just 20p,

but it will benefit from virtually thefull movement of ABC Company’sshare price. So if ABC Company increases in value by 10p, so too willthe turbo. Here a 10 per cent increasein the value of ABC Company hastranslated into a 50 per cent rise inthe value of the turbo. This is general-ly referred to as a gearing level of five.

There are two important downsides;first, you don’t own the underlyingasset. Second, gearing works against

you too. Should the underlying asset

fall, the turbo would amplify the loss. Thanks to the knock out level, youcan never lose more than you invest-ed. However, if the knock out level istouched the turbo will expire imme-diately with no value. If the value of the underlying asset improves afterthis, you will not benefit because

your product will not exist anymore.

PUTTING IT INTO PRACTICELet’s assume you think the FTSE 100

will recover to 6,000 by December. There are five Long FTSE Turbos thatcould suit this view. As you can seefrom the table above, the closer theknock out level is to the level of the

HEAD OF LISTED PRODUCTS SALES ANDMARKETING, UK AND NORTHERN EUROPE

ALEXANDRE HOUPERT

Use SocGen’s turbos for

a chance to drive asupercar

EPIC Code Underlying Asset Product Type Strike Price Knock Out Level Expiry date Parity Current Price*

T367 FTSE 100 Long 4,500 4,500 16-Dec-11 1,000 £1.17

T368 FTSE 100 Long 4,600 4,600 16-Dec-11 1,000 £1.07

T369 FTSE 100 Long 4,800 4,800 16-Dec-11 1,000 £0.88T381 FTSE 100 Long 5,000 5,000 16-Dec-11 1,000 £0.69

T382 FTSE 100 Long 5,200 5,200 16-Dec-11 1,000 £0.50

For illustrative purposes only. This is not a recommendation. Source www.sglistedproducts.co.uk as of 12.13pm on 31 October 2011. *Prices are based on a FTSE 100 Index level of 5,640.55

SAMPLE PRODUCT RANGE OF LONG FTSE TURBOS

80

60

40

20

0

-20

-40

-60

-80

Illustrative product returns

-100

Performance of the FTSE 100 Index

T367

T368

T369

T381

T382

4,5004,6004,7004,8004,9005,0005,1005,200 5,3005,4005,5005,6005,7005,800 5,9006,000

P r o f i t / L o s s ( % )

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GOLD miner Randgold Resources said yesterday it was confident of deliver-ing record gold production in thefourth quarter.

Profits surged to $122.9m (£76.7m)in the third quarter compared with$28.2m in the same period last year.

Chief executive Mark Bristow saidthe company is in “good shape” tomeet the bottom end of its 740,000-760,000 ounce target for the year,although it is unlikely to reach the

upper limit of the range.Randgold produced 506,476 ounces

of gold in the first nine months andtipped a record quarter four.

“We are going to produce a recordquarter whatever we do,” said Bristow.“We could get up there with 240,000ounces, but even if we do 220,000 it’sgoing to be a significant step and a

very strong end to the year.” The FTSE 100 miner produced

about 440,000 ounces in 2010. The company had originally hoped

to keep its cash costs per ounce below $600 for the year, but so far they arearound $705 an ounce.

“I would really like to break that$700 mark and if we get it right thisquarter we should get down there,”added Bristow.

Analysts at Collins Stewart said in anote: “As we enter what is traditional-ly the gold buying season andstrongest two quarters for gold we arelikely to see the shares performstrongly,” it said.

Shares in Randgold rose 7.4 percent yesterday to £72.35.

Randgold tipsnew record inquarter fourBY JOHN DUNNE

MINING▲


BEST OF THE BROKERS

To appear in Best of the Brokers email your research to [email protected]

ANALYSIS l Centamin Egypt

110

115

105

100

95

90

Aug Sep Oct

p 107.0002 Nov

CENTAMIN EGYPTGoldman Sachs has updated its estimateson the miner following third quarter pro-duction and financial results. It ratesCentamin Egypt as a “buy” but reduces itstarget price from 290p to 280p, calling theresults solid but unspectacular. Costs were

slightly higher than expected and arereflected in next year’s estimates, withearning per share forecasts for 2012reduced to 22 cents from 25 cents.

ANALYSIS l Associated British Foods

1,150

1,100

1,050

1,000

950

Aug Sep Oct

p 1,087.0002 Nov

ASSOCIATED BRITISH FOODSAhead of full year results due on 8November, Citi rates the food manufacturerand Primark owner as “neutral” with a tar-get price of £11.25. The broker expectssales to have risen six per cent to £10.7bn,but operating profits to have slipped oneper cent to £902m. It says in 2012 thesoftening of cotton price should ease pres-sure on Primark’s margin, and the highsugar price should drive strong earnings.

ANALYSIS l Misys

300

280

260

240

220

Aug Sep Oct

p

282.2002 Nov

MISYSUBS rates the supplier of IT solutions to the

banking industry as “neutral” with a targetprice of 285p, up from 240p due to recentpeer group movements. First-half resultsare not due until January, and the brokersees the prospect of Misys being taken overin the near-term as unlikely, after talks withFidelity National fell apart in August. A buy-back may provide some downside protec-tion, but has been modest to date.

NEWS | IN BRIEF

Nissan impresses with profitsNissan Motors posted better-than-expected quarterly profits and lifted itsannual earnings and sales forecastsyesterday, shaking off worries aboutthe Thai floods and the global economy.For the July-September quarter, Nissansaid operating profit fell 4.6 per cent to

¥159.3bn. Second-quarter net profitwas ¥98.4bn, down 3.3 per cent, whilerevenue rose 0.7 per cent to ¥2.29 tril-lion as the carmaker boosted its sharein most big markets.

Gem upbeat despite price dropAfrica-focused miner Gem Diamondshas reported a strong operational per-formance since July despite a soften-ing in rough diamond prices. Thecompany said its Letseng and Ellendalemines both achieved good prices inrecent sales, and that the grade percarat increased 39 per cent to 1.63carats per hundred tons. The mineralso said it had recovered 82,584carats, 20 per cent more than the yearbefore. Gem Diamonds also noted thatit completed the sale of its 80 per centinterest in its alluvial diamond miningcompany, PT Galuh Cempaka inIndonesia.

Volatility boost for ExchangeUS-based exchange and clearinghouseoperator Intercontinental Exchangeyesterday reported a 38 per cent rise inprofit for the third quarter, as highvolatility in the quarter drove robust USand European futures trading. Bothadjusted earnings and revenue beatanalysts' expectations. The company'snet income for the third quarter was£83.2m up from £60.4m last year, thefirm announced.

ANALYSIS l Randgold Resources

p


7,300

7,000

7,100

7,200

6,900

6,800

6,700

7,235.002 Nov

8/3/2019 Cityam 2011-11-03


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Barclays CorporateBarclays has expanded its trade andworking capital team by hiring Ray

Zabarte as head of trade and workingcapital product management and AdrianOw as head of risk weighted asset opti-

misation, trade and working capital.Both join from Standard Chartered.

BradyThe trading, risk management andsettlement solutions supplier hasappointed Stephen Butcher as chief

executive of metals. Butcher’s previ-ous roles include managing director of the solutions division of Dealogic.

Hydrodec GroupThe cleantech industrial oil re-refininggroup has appointed Ian Smale as chief executive designate, ahead of his start atthe company in January 2012. Smale,

who was most recently group head of strategy and policy at BP, will succeedMark McNamara, who will remain at thecompany as senior executive director.

Foresight GroupThe corporate finance house has

appointed Ciara O’Neill as a managingdirector. O’Neill joins from Mizuho Bank,where she was head of the leveragedcapital markets Europe team.

DC Advisory PartnersThe alternative asset manager hasstrengthened its fund managementteams with two new hires. David Conlon,

formerly of Aleltho Energy, has beenappointed as director of Foresight’s envi-ronmental team and Arnoud Klaren, whoarrives from solar technology providerSolFocus, will oversee the company’sSpanish solar photovoltaics investments.

LivingstoneThe M&A boutique has promotedAlex John to director in its Londonoffice. John joined Livingstone inJanuary 2007 from the M&A taxdepartment of KPMG and has leddeals including the sales of EIC,Hamworthy Heating and HallmarkIndustries.

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

Brookfield Asset ManagementThe property, renewable power and infrastruc-ture asset manager has appointed Julian Schilleras senior vice president in the global privatefunds group in London. He will look afterEuropean and Middle Eastern investors andassist in broader business development for the

real estate group, working alongside BarryBlattman and Martin Jepson. Schiiler joins fromJones Lang LaSalle Corporate Finance in London,where he led the private funds advisory team.

US stocks rebounded from twodays of sharp losses yesterday after the Federal Reserve said itis prepared to do more for the

economy if conditions warrant, help-ing to stanch the panicky reaction toEurope’s debt crisis.

Trading volume was light, however,possibly signaling that worries aboutGreece hold greater sway than the Fedat this time.

Federal Reserve chairman BenBernanke said the US central bank was

closely monitoring developments inEurope and left open the possibility

that the Fed could expand its holdingsof mortgage debt if U.S. economic con-ditions worsened.

The energy and financial sectors were among the strongest performersafter having led the market lower theprevious two sessions. The S&P energy index rose 2.9 per cent while the finan-cial index rose 2.8 per cent.

Some 7.5bn shares were traded onthe NYSE, the Amex and Nasdaq,

which was nearly 10 per cent below the 20-day moving average and well

below Tuesday’s high volume selloff. The Dow Jones industrial average

rose 178.08 points, or 1.53 per cent, at11,836.04. The S&P 500 Index gained19.62 points, or 1.61 per cent, at1,237.90. The Nasdaq Composite Indexadded 33.02 points, or 1.27 per cent, at

2,639.98. The VIX volatility gauge fell5.8 per cent to 32.74.

Wall Street makes gains in

spite of low trading volumesTHENEW YORKREPORT

BRITAIN’S top share index rose

yesterday, regaining half theprevious day’s fall and buckinga three-day slide, buoyed by

earnings news and US data in a volatile session that was overshad-owed by the hazy Eurozone debt-cri-sis outlook.

Mining and oil firms were amongthe best performers, helped by risingcrude and metals prices, as well asearnings from the likes of RandgoldResources, while those from retailerNext and satellite firm Inmarsat alsohelped.

The FTSE 100 swung in a 110-pointrange before settling up 1.2 per cent,or 62.53 points, at 5,484.10. It had fall-en 2.2 per cent on Tuesday and 5.2per cent over the course of the previ-ous three days.

While buyers had emerged to buy on dips, given the scale of the recentselloff, the underlying tone was still

bearish, traders said. Bond marketsmirrored the sentiment as peripheralEurozone bond yields continued toremain high.

Earnings news also provided somesupport, with Randgold Resources upmore than seven per cent after it

posted a strong gain in third-quarteroutput and profit, and said it was stilllooking at a record fourth quarter.

Among the other gainers, Nextended up 6.5 per cent after onlinesales helped it to a third-quarter beat,

while Inmarsat ended up nearly fourper cent as it also beat forecasts.

Worst hit throughout most of thesession was Lloyds Banking Group,down 4.4 per cent in volume morethan three times its 90-day daily aver-age after its chief executive, AntonioHorta-Osorio, decided to take a sur-prise temporary break citing illhealth.

The chunky volume, ahead of itstrading update on 8 November,helped push volume on the broaderindex to nearly 150 per cent of its 90-day average, which made it muchmore active than the German andFrench bourses.

FTSE 100 swings up onrosy corporate earnings

THELONDONREPORT

8 Aug 26 Aug 16 Sep 26 Oct6 Oct

5,200

5,000

5,400

5,600

5,800

ANALYSIS l FTSE

4,800

5,484.1002 Nov

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SIR RICHARD Branson opened the world’sfirst commercial spaceport last month. As

his new venture Virgin Galactic recognis-es, space is an industry where the sky’s not

the limit. For too long the domain of superpowerrivalry between America’s Nasa and Russia’sFederal Space Agency, space is now giving way tothe private sector, funded by billionaires witheven greater ambitions. The surprise for many isthat Britain has a great future here too. But firstit will need to create an enabling regulatory envi-ronment, license a spaceport and develop benefi-cial relationships beyond Europe withCommonwealth and American space agencies.

Elon Musk, a founder of PayPal and now SpaceX, recently expounded on why mankindshould become a multi-planet species, helped by his company’s reusable space transportation sys-tem. All very exciting. And in the deep futuresuch ambitions may well come to pass.

But before we get to that point, Britain, withits relatively more humdrum expertise in satel-lite manufacture, ground support and satellitelaunch insurance has a serious role to play. This£7bn sector seems poised for Bric-style growth of nearly 10 per cent per annum for many years tocome. And unlike in America, Britain’s space sec-tor came about despite rather than because of government support.

This was largely thanks to the benign andunforeseen consequence of the UK’s early adop-tion of satellite broadcasting. This pushed thetechnological envelope for satellites and whatthey could deliver to the consumer. As the worldwide, always-on demand for informa-tion continued to grow, the UK was alsoable to draw on the skills of overlapping world-class aerospace and defence indus-tries that brought new possibilities andskills into the nascent space sector.

Much as the progress has beenimpressive, there are some hurdles thatneed to be cleared if the British spacesector’s momentum is to be main-tained and taken to the next stage.

Chief among these is regulation. It isan irony that the 1875 Explosives Act

prevented any British research with rockets inthe pre-war period, unlike Nazi Germany whose

expertise in hitting London with rockets waslater used by the Americans to take a man to themoon. Today’s regulatory concern is how toattract space entrepreneurs to the UK to bringabout suborbital flight services – not just from

Virgin. Britain has a host of internationally recognised aviation regulations but has no safe-ty, environmental or flight regulations in placefor what will be a riskier journey out of theatmosphere. With nothing in place, it’s hard forspace pioneers to insure and calculate the cost of setting up a cluster of companies that both buildspace hardware and offer space-related servicesin Britain.

Secondly, while many agree that RichardBranson’s private sector spaceport in New

Mexico will probably be the first of many, notenough is being done to make the case for thenext one in Britain. For suborbital space tourism,a spaceport would be best sited for quick accessto scenery from space or for polar orbit satellitelaunch. These requirements point to existingRAF bases in Scotland at Lossiemouth andKinloss. Another possibility is in southwestEngland. Space tourists are willing to pay $200,000 a ticket for a mere three hours in space.Crucially though, they will spend much longer

within the vicinity of the spaceport and will nodoubt have a lot of disposable income that

would help the local economy along with every-one who would be employed working there.

Thirdly, cooperation at the state-to-state level isstill important. Most of Britain’s existing publicspace funds are channelled via the UK Space

Agency to the European Space Agency. This hasnot been a bad relationship. But it would almost

certainly be in our interest to expand and rebal-ance the range of contacts and programmes

beyond Europe to Nasa and somCommonwealth space agencies. There is greatpotential for driving down costs for the spaceprogramme by working with India, Canada and

Australia and not just the USA.In the new space economy, you can be small

and succeed. You don’t need astronauts to be inthe space business. The Isle of Man’s ManSat,

which provides space services like access to geo-stationary orbits and associated radio frequen-cies is a case in point. And Virgin Galactic, aharmonious combination of British manage-ment and marketing, American technology andEmirates financing speaks volumes about thefuture international dimension to space use andexploitation.

Don’t rule out major innovations turningspace economics on their head either. Perhaps if Oxfordshire’s Reaction Engines is able to mas-sively lower the delivery cost of cargo to orbit

with its Skylon spacecraft from £15,000 per kg to£650 then hotels in space and colonies in Mars

will start to look not so far off. But as and untilthen, David Willetts, Britain’s minister of statefor universities and science – and our effectivespace minister – has a lot on his plate and prob-ably the most interesting brief in Whitehall.

Dan Lewis is chief executive of the Economic PolicyCentre. www.economicpolicycentre.com

28 The ForumCITYA.M. 3 NOVEMBER 2011

RAF bases in Scotland atLossiemouth and Kinloss

are possible spaceport sites.

Time to reach for the stars:Britain’s new space industryhas the potential to blast off

cityam.com/forum

DAN LEWIS

Agree? Disagree? Got a sharp comment?The Forum wants you to join the debate.

COMMENT NOW ON

Twitter: @cityamforum;

on the web : cityam.com/forum;

or by email: [email protected].

Top responses will be reprinted in The Forum.

8/3/2019 Cityam 2011-11-03


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A

S ANY elite athlete will tell you,timing is everything. It is justas true for investing. When you

get in and out of a market isoften vital for returns. As WarrenBuffett – before his foray into advisingthe US government on taxation policy – said in a sage piece of advice: “Begreedy when others are fearful andfearful when others are greedy.”However, most lack the contrarianspirit of the Oracle of Omaha, jump-ing in and out of markets at the very worst time. Many would be better off divesting responsibility to someoneelse, ignoring the ebb and f low of themarkets and holding on for the longrun.

EMOTIONAL COSTS There is plenty of evidence that payingsomeone else to manage your money doesn’t often and consistently beatthe relevant assets’ indices. However,this doesn’t mean you will do any bet-ter. In fact, there is evidence to suggest you will probably do worse. As MelKenny of Radcliffe & Newlands notes:“Research by Dalbar (July 2008) foundthe average annual stock marketreturn between 1988 and 2007 was11.6 per cent, while the average stock market investor return was just 4.5per cent, because on average, money tends to rush into the market when itdoes well and leaves when doing badly.” Emotions drive people to get inand out of assets at the wrong time – buying high and selling low.

“Investors often base decisions onpast performance, buying somethingthat has done very well, and not neces-sarily something that will do very well,” says Danny Cox of HargreavesLansdowne. “If you look at the inflowsof money into property funds, this was at its most recent high during2006, and the market crashed in early

2007.” Cox adds: “Investors can getswept along by momentum: it is whenpeople start talking about an invest-

ment at dinner parties you probably know it is a bubble about to burst.”

In Preventing Emotional Investing,

a recent paper for The Journal of Wealth Management, Philip Z.Mayman and Gregg S. Fisher test fivepredictions based on solid data fromGerstein Fisher, a boutique invest-ment management firm with $1bnunder management, which wasfounded by one of the co-authors. Thehypotheses were:

1. Client touches [moving money]should be higher in the first monthsof the relationship with the invest-ment adviser.

2. The touches should then declineto a relatively steady but significantly non-zero level.

3. Higher market volatility shouldlead to a higher volume of touches.

4. The incidence of substantialchanges in investor allocation should be quite low, i.e., aggressive tradingshould be rare.

5. When aggressive individual trad-ing does happen, it will coincide witha higher volume of touches.

Sadly, clients failed on all five points– demonstrating that many invest-ment decisions are driven by emotion-al reactions to volatile conditions.Mayman and Fisher conclude that “animportant way that an adviser adds value is by restraining clients fromtheir own tendencies to aggressively trade.” They describe the investmentmanager as a lock on a refrigerator toprevent the individual investor fromoverindulging in unhealthy choices asit relates to their portfolios.

TAKING THE LONG VIEWGiven that micromanaging is oftencounterproductive, investors, by andlarge, would be better off taking a

long view. The graph (right), supplied by Andrew Humphries, executivedirector of asset management at St

James’s Place, shows that the FTSE100’s fluctuations become increasing-ly unimportant over time. But holdingon for the long run is easier said thandone. Yannick Naud who is portfoliomanager at Glendevon King AssetManagement says buying Appleshares at $12 in May 2002 was probably a great decision that could havemade investors many times richer, but by July the position was showing a 40per cent loss. Now Apple shares areover $400.

Most investors shouldn’t be focusedon timing the market perfectly, butasset allocation over the long term.Stephen Barber, who advises Selftradeon economics and markets, says “call-ing the bottom of a market is nearimpossible and over the longer term will make less of an impact on per-formance than getting the broadtrend right.”

When injecting funds into a new investment, a drip-feed can be useful.Barber says “for those averse to timing

and volatility altogether, regularinvestment can be the answer,” allow-ing investors to also take advantage of

pound cost averaging. Naud isadamant: “Never invest the fullamount at once, as it will give youenough flexibility to manage a posi-tion if your original entry point was

wrong.”Of course, you need to ensure thatthe person you are paying to manage

your money doesn’t suffer from thesame frailties that afflict many investors. And once empowered withthe statistics confirming your badhabits, many investors should be able

to overcome their cravings to meddle,mending their bad habits. The firststep is admitting you have a problem.

Wealth Management | Personal Finance30

Junior Isas no panacea

Keep a cool

head – put alock on greedLearn from your mistakes or pay an IFAwho won’t make them, says Philip Salter

ANALYSIS l Best and worst FTSE 100 returns

%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

-40

-30

-20

-10

0

10

20

30

40

50

60

Maximum

Minimum

Holding period (years)

S o u r c e : S t J a m e s ' s P l a c e

ON TUESDAY, a new product was

born. For months, providershave been working overtime,trying to enthuse parents with a

desire for Junior Isas. The table showsthe offerings on the cash side, withthe big banks yet to step into the ring.

Junior cash Isas don’t match up tocurrent inflation at 5.2 per cent, butthere are plenty of equity funds on themarket to shelter under. For these,

research or sound advice is a must. Junior Isas are the offspring of the

now redundant child trust fund (CTF).In trying to induce people to save fortheir children the previous govern-ment gave a sum of £250. Althoughspending other people’s money thatcould be ill-afforded, this did stimu-late more parents to save. But now CTFparents have been cut adrift in adiminishingly competitive market. Itis vital that these are now incorporat-ed into the new regime.

As much as the government wantseveryone to save, in reality Junior Isas

are a product for the relatively wealthy – another place to protect wealth from increasingly punitive tax-ation. As the child gets full control of the money on their eighteenth birth-day, parents shouldn’t put all theirnest eggs in one shelter – their childmight not choose to spend it sensibly on university fees or a first deposit.Peter Chadborn of Plan Money advisesclients to utilise their own Isa

allowances first, to retain control,regardless of the purpose.

Watch thebehaviour gap

Picture: GETTY

JUNIOR CASH ISAS AVAILABLE ON LAUNCH

Provider Deposit AER

Nationwide BS £1 3.00%

Buckinghamshire BS £10 3.00%

Skipton BS £1 3.00%

Bank of Cyrpus £25 2.75%

Furness BS £1 2.50%

Ipswich BS £10 2.40%

Harpenden BS £1 2.25%

Mansfield BS £1 2.00%

National Counties BS £1+, £1,000+, £3,000+ 1.81%, 2.26%, 3.01%

Bank of Cyprus (fixed rate) £25 2.90%Source: MoneySupermarket

8/3/2019 Cityam 2011-11-03


RECENT scandals, such as theMadoff disaster, have burntinvestors over recent years, andthe recession, which has led to a

strong distrust of the banking sector,are among the main drivers behindthe trend of investors opting for man-aged accounts instead of traditionalhedge funds.

The traditional investment vehicleof choice for institutions, family offices or high net worth clients togain exposure to solid performingtraders has usually been via hedgefunds. Many of the top tier managers want all their investors to be fundinvestors with the same and generally rich terms.

Five years ago – given the flood of institutional assets going into hedgefunds – it would have been consideredludicrous that greater transparency would be required.

However, the scene has changed dra-matically since. The past few years of extreme intraday volatility acrossmost asset classes, including foreignexchange, as well as the broadincreased uncertainty, will be remem- bered throughout financial history.Investors have found their assetsreduced in size, being frozen or com-pletely disappearing in certain cases.

As a result, a new breed of savvy client, across the investor spectrum

has evolved, which will start to bringchange to a number of fund man-agers’ business models. Those that donot move with the times will lose mar-ket share.

This new breed of investor wantstransparency, liquidity and control in

their investments. Quarterly andannual reports do not cut it anymore. An investor wants to be able to view

their underlying investments in realtime. Clients, quite rightly want toknow their investments provide daily liquidity so they have quick and easy access to capital, as well as risk control.Ultimately, investors want to know their investments are secure and they have realised now that the best way forthis is via managed accounts.

The key feature of managedaccounts is that underlying invest-ment assets are held personally by theinvestor. The investment account isthen looked after by a hired profes-sional manager. Unlike mutual funds,managed accounts are personalisedinvestment portfolios that offer fulltransparency, liquidity and opera-tional control.

The increase of interest in managedaccount structures as a route to expo-sure for top traders is a product of therecent financial crisis and harks back to a more simple, transparent invest-ment structure. Billions of dollars –plenty of which is in institutionalforex – is already being managed this way, and the amount will increaseover the coming weeks and months.

We have seen several large institu-tional investors make public state-ments that they would be investing inmanaged accounts through large plat-forms, rather than directly into funds. And we have seen a growing numberof investment platforms that continueto evaluate and promote managedaccounts. Lyxor Asset Management,for example, has over ten years contin-ued to grow and win awards as a lead-ing platform provider for managedaccounts. It now has about €95bnunder management.

Managed accounts help take invest-ment strategies further into the main-

stream, where their benefits can givesubstantial upside, while protectingagainst risk in a domestic regulatedenvironment. Clients are no longer inthe dark.

Amit Mehta is a founding partner of Anello Asset Management.

Why managedaccounts arean investor’sbest friend

Amit Mehta says institutions should optfor hands-on professional management

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Institutional Foreign Exchange 31CITYA.M. 3 NOVEMBER 2011

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8/3/2019 Cityam 2011-11-03


FOR those put on the spot atshort notice and those too lazy to prepare, decide, and thenstick to, what you are trying to

achieve with the speech. Do you want to inform or persuade? Whatdefines the speech’s success?Remind yourself that you are notthere to fill time with noise – youneed to achieve a result.

PERSUASIONIf persuasion is your goal, compare

the unwanted current situation with the desired future situation.Discuss the topic with “we” and“will” to create an impression of col-laboration. Paint a picture of thefuture for the audience. If transferof information is your goal, use theold “tell them what you are going totell them, tell them, then tell them

what you told them” format. Italways works a charm.

FRESH LANGUAGEUse fresh language and examples. Avoid tired metaphors. If you haveheard the metaphor before – don’tuse it. Use the language you wouldin a one-to-one situation. The basicrule is to use language your audi-ence can readily understand. That isa maximum of 15 words per sen-tence and two syllables per word.Narrow your message to three coreideas. The audience won’t remember any more than that anyway.Outline those ideas and thenexplain them individually, identify-ing and repeatedly using the wordsthat summarise your message.

Never speak for more than 20minutes – ten is better. And three tofive is even better than that. Try to“de-fluff” your speech by cuttinguseless words. If a word isn’t actively

adding to your message – bin it.Don’t fall in love with the sound of sentences or words. It’s far moreimportant to get your messageacross.

DELIVERING THE SPEECH When delivering the speech, stand with your feet apart and stand

Business Features | Careers

33

Improve your speechwith five minutes prep

PETER BOTTINGCAREERS COACH

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LLOYDS Banking Group boss

Antonio Horta-Osorio shockedus all when he announced thathe would be taking time off

due to fatigue. The pressure seems tohave finally got to the high-flyingchief executive known for his fast-paced style. So severe is Horta-Osorio’s condition that doctors havegiven him orders to rest until theend of the year. He’s not on his own

though: the Health and Safety Executive estimate that 9.8m work-ing days were lost last year due tostress-related conditions. How can

we prevent this happening to us?Here’s what the experts say.

1. SPOT THE EARLY WARNING SIGNS“Insomnia, irritability and physicalsymptoms like backache are theearly warning signs of a breakdown,”says Corinne Mills, a career coach atPersonal Career Management, whoregularly coaches clients sufferingfrom severe stress. It is sometimes

difficult for people who are experi-encing high-levels of stress to spotthese signs. “Listen carefully to yourfriends and family’s perceptions.”

2. GO TO YOUR GPGetting help with stress is still some-times treated as taboo. Mills says it’shigh time perceptions changed becausethere is so much help available from your GP. “Doctors can provide access totalking therapies and medication. It isfar more sensible to seek these sorts of solutions sooner rather than later.”

3. TAKE A BREAK

City workers often don’t have the luxu-ry of much work-life balance, but every-one needs time to think and reflect onlife, says Rachel Brushfield, a career

coach at Energise. “You have to makethe time for this to stay sane. Havelunch outside of the office and makesure there are times when you turn off your mobile phone –even if it’s only fora few hours.”

4. TAKE A HOLIDAYIt might feel impossible to take time off, but everyone in the UK is given holiday and you are suppose to take it. “Even if

it’s just a week and you don’t go anywhere, take the time to calm down andget some perspective,” says Mills. “It’simportant to have the time to work out

why you’re stressed, so you can deal with it more effectively.”

5. TALK TO YOUR MANAGERSIt is in both you and your manager’sinterest to discuss your workload andperformance. “After a holiday, summonup the courage to speak to your manag-er about your workload and workingenvironment. Even if it doesn’t achieveanything other than simply opening a

dialogue about stress, at least you’vetaken some control of the situationand that will make you feel much bet-ter – trust me,” says Mills.

Sick with stress: It

can happen to us all

Lloyds BankingGroup’s AntonioHorta-Osorio istaking medicalleave

Picture: MichaTheiner/CITYA.M.

1. Words That Work: It’s Not WhatYou Say, it’s What People Hear byFrank I. Luntz. Direct, no nonsense –utterly brilliant stuff.2. Hypnotic Writing: How to Seduceand Persuade Customers with OnlyYour Words by Joe Vitale. Worthreading and then re-reading every sixmonths.3. Resonate: Present Visual Stories

That Transform Audiences by Nancy

Duarte. Read if you ever have to do aPowerPoint presentation and you don’twant to send people into a coma.4. The Impact Code: Live the Life youDeserve by Nigel Risner This book ismore about you and what you are pas-sionate about. Why would you want totalk about things you aren't passionateabout?5. MessageCraft by Peter Botting.

Coming out in the New Year.

NEED TO READ | PETER’S TOP FIVE BOOKS

strong. Breathe slowly from your belly and speak slowly. Trust me, itis almost impossible to speak tooslowly. Smile at the audience or thecamera’s lens. Get your blood mov-ing before the speech, perhaps by going for a 20 minute walk. Drink some water – still, not the fizzy stuff.

And finally, if there are going to be questions at the end, write downthe top five most likely questionsand then note down answers that build on what you’ve communicat-ed in the speech.

www.peterbotting.com There are ways to improve your speech at short notice Picture: GETTY

Lloyds’s boss is taking leave after suffering from fatigue.Donata Huggins finds out how to stop it happening to you

8/3/2019 Cityam 2011-11-03


DO you dare store all yourfiles remotely? Does theidea of shifting yourentire My Documents

folder online fill you with dread? Without us realising it, the

more the world operates online,

the more the world movestowards “cloud computing”. City A.M. asks Paddy Smith, onlineeditor at the tech-specialty maga-zine Stuff (www.stuff.tv), what

we need to know about the cloudas our digital storage hub.

Helena Lee looks into everythingyou need to know about the cloudA different stratosphere

SKYLON COCKTAIL CLASSES Jazz up your Monday and join in Skylon’s cocktailclasses. Learn how to makethe perfect Manhattan cock-tail with mixologist ZoranPeric and evoke old schoolNew York glamour againstthe London skyline. Thesedrop-in classes are informal,so brush up your classic cock-tail skills before taking dinnerin the restaurant, or stayingfor drinks afterwards.7 November, 6.30-9pm, Skylon,

Royal Festival Hall, SE1 8XX,www.skylon-restaurant.co.uk

MACAROONS IN THECITYLadurée, the Parisian boutique of treats andluxury pastries, opens

on Cornhill today.Enjoy their laudeddouble-decker maca-roons, chocolates,pastries, tea and pre-serves in an opulenttea-house setting. Also available will be toiletries, fra-grances and candles.

14 Cornhill, EC3V 3ND,020 7283 2161

CHARITY CONFERENCE TO HELP FAMILIESWITH AUTISMLondon-based charity MEfA Montessori isholding a one day conference for parentsand professionals. Results of the charity’sPlay Therapy Early Intervention project

will be presented at the conference – aninitiative that includes a postgraduateCPD course in Special Education. Thecharity aims to educate on the condition,

which has increased 25 times over thelast 30 years, and is dedicated to improv-ing the lives of children and families

with autism. 5 November, Mycenae House, Blackheath, con-

tact Wendy Fidler on 07710 433 994 for details,www.montessorieducationforautism.com

OUT OF OFFICEHELENA LEE

Lifestyle | Technology34 CITYA.M. 3 NOVEMBER 2011

Q.WHAT IS THE CLOUD?

A. Instead of accessing files from your hard drive, you are accessing files remotely. Cloud email is

simply the way you’ve always accessed your webmailor Hotmail or Gmail. Cloud computing is takingthat idea and extending it to everything you tradi-tionally keep on your hard drive such as documentsand pictures. A lot of people will look for pictures by finding them in an album on Facebook. That’s anexample of keeping things in the cloud.

Q.ARE WE ALREADY USING IT?

A.Most people are unwittingly using it at some

level – when they’re using Google docs, forexample. If you’re using webmail to access youremails, or keeping photos on social networks likeFacebook, you’re taking advantage of cloud comput-ing. In the future most people will be using it atevery level and all of the time, although there will bea few people who are old fashioned who will insiston keeping copies on their hard drive.

Q.ARE OUR FILES SAFE IN THE CLOUD?

A.Keeping things in the cloud is not an infalliblesystem, but it’s much safer than hard-drive stor-

age or keeping things on your actual computer. Thehard-drive could be stolen, or lost in a house fire orsuffer a failure – still a very common problem.

You’re much more likely to lose files in this way than if it were backed up remotely with a profession-al company. They would have your files on a server,

which would also be backed up in three other placesat different server locations all round the world.

Q.WHAT CLOUD PLATFORMS ARE THERE?

A. If you’re a staunch Apple user and you’ve got aniPhone, then iCloud is a good solution. iCloud

gives you 5GB free storage,although this may not be enoughspace for a lot of people. Dropbox isa great app. You can access files that

you’ve uploaded anywhere, whetherfrom your phone, on your laptop. Forinstance if you’re flying abroad and need to access

your boarding card, pop it in Dropbox and pick it upon your phone at the airport. Google Chrome OS is a

whole operating system in the cloud. It runsthrough a browser and that ties in with Google docsand calendar online.

Q.WHAT ARE THE DISADVANTAGES OF RELYING ONTHE CLOUD?

A. You need to be connected to the internet so lack of good data coverage is a barrier to operating

completely in the cloud. If you’re relying on itthrough a phone, you should have good data cover-age and at least 3G. If you’re using a laptop andthere’s no WiFi you won’t be able to do very much as

you wouldn’t have anything stored locally. It’s also worth considering the expense. If you’re trying toaccess something from Morocco from your phoneand you have a UK data plan it can be very expen-sive, and if you want to store 70GB of music, you’llneed to pay for extra space. You can get away withlight cloud computing for free at the moment. Thecost will come down quickly in the future, and willeventually be cheaper than physical hard-drive stor-age. There could be a future where data for a certainservice is free all over the world or comes at a fixedprice.

Q.CAN WE HAVE OUR OWN CLOUD?

A. Yes absolutely. Pogoplug pro is designed forexactly this: a hard drive that plugs into your

router. As long as you’re online, you can just log inand have access to your files wherever you are. Of course, if it breaks down you’ll lose that access.

Q A&

“Is cloud computing safe? Just askScarlett Johansson – who had candidphotos that she intended just for her ex-husband Ryan Reynolds to see, but ahacker managed to break into her cloud-based email system and access them.Whenever you put information into thecloud (or “internet” as us old fogeys callit) then you are making two decisions:

1That you trust the cloud service itself to have proper security in place to

prevent hackers from breaching theirsystems, and exploiting a vulnerabilitythat could expose your data. We haveseen countless examples this year of online systems that have been breachedwith embarrassing results for the .comsites, and potential risks for the exposedusers.

2That you are acting securely your-self. For instance, if you use the

same password on your cloud-based

service as you do on another websiteand then you get your passwordphished, your entire online identitycould be unlocked. That's not the faultof the cloud service, that’s your ownsloppy security.This isn't to say that cloud-based servic-es are inherently insecure, but using theinternet does not mean that you aresomehow hacker-proof.”www.sophos.com

SECURITY | GRAHAM CLULEY, CYBER SECURITY EXPERT AT SOPHOS

Top: Apple iCloud;top left: Pogoplugfor personalcloud; above:dropbox app; left:Google Chrome

8/3/2019 Cityam 2011-11-03


8/3/2019 Cityam 2011-11-03


book’s other central character, MichelHouellebecq himself, that is of greatestinterest to Jed and to us. The two men meet

when Jed flies to Ireland (where the authorused to live in real life) to discuss the cata-logue he has agreed to write for Jed’s nextexhibition. They fall in love, after a fashion,

both peering deep at worldly phenomenain ways that nobody else would: their firstpassionate conversation revolves aroundradiator manufacturing.

A hideous crime defines part two of the book. It’s a great plot twist, but a challengetoo far for the reader, asking us to assimi-late meaningfully yet another piece of analready strange puzzle. In the end, the feel-ing is of a great randomness that is certain-ly profound, but that we don’t have thetools to understand. We are shown unchar-tered territory, but given no map.

THE AFFAIRBY LEE CHILDBantam, £18.99

hhhii

THE Affair is the latest in the the Jack Reacher series that started with 1997’s TheKilling Floor. All feature semi-retired mili-tary policeman Jack Reacher who spends

time taking down the US army’s own cor-rupt, dishonest and dangerous. The 15th of the award-winning Reacher novels, The

Affair is set pre-Killing Floor and followsReacher’s adventure to the obscure mid-

west town of Kelham to investigate both agrowing number of gruesome murdersand their mysteriously vague investigation

by an equally tough, female, stunningly good-looking cop.

This is thriller writing at its best.Reacher is a fantastic no nonsense hero,

who kicks ass (about 14 asses in total, orone every 30 pages, a good balance

between Bond’s 1 every 60 and Andy McNab’s 3 per page) and doesnt need gadg-ets, helicopters or even an integral reasonin the plot to do so.

The one downside to this conspiracy thriller is that the reader isn’t told muchabout any of the bad guy’s motivations. A troubled childhood, an inferiority com-plex; sometimes it might have been inter-esting to hear the bad guy’s point of view

before Reacher snaps their neck, breakstheir arms or executes a flawless nipple-cripple.

Overall, though, the book is pacy –there’s plenty of tension to feast on andthe plot is just believable enough to carry

you right through. Alasdair Byers

Houellebecq’s bizarre newnovel is (almost) brilliant

Michel Houellebecq isa cult figure, withplenty of haters. Hislatest book, The Mapand the Territory, wonFrance’s PrixGoncourt.

Picture: GETTY

Worlds collide in anambitious but flawedbook sure to makeyou think – andshiver, Zoe Strimpel

THE MAP AND THE TERRITORYBY MICHEL HOUELLEBECQHeinemann , £17.99

hhhhi

THE arcane title of this book should serve

as a fair warning to the reader familiar with Atomised, Platform and other cultHouellebecq novels. While those books aredriven by sexual desperation and erotictragedy (alongside the usual heaping help-ings of profound dystopia), The Map andthe Territory is not so easy to categorise.

That fiddly, chewy title is derived from aquote by the Polish-American philosopherand linguist, Alfred Korzybski: “the map isnot the territory” and is not one that mostpeople will recognise or grasp easily.

Well, most people will not entirely grasp what Houellebecq is doing in this book either, but they’ll try jolly hard and, moreimportantly, will enjoy doing so.

In a big break from the past, there isalmost no sex here. By contrast, sexualdenial and the power of platonic male rela-tionships are among the book’s most strik-ing attributes. But it’s the ruthlessspecificity of the topics covered that is mostentrancing. It’s insect trafficking oneminute, the pleasures of the French hyper-market the next, then gruesome murderthe next – all in shocking detail.

Broadly, the book follows the rise of JedMartin, a Paris-based artist with austeretastes and an unflinchingly rigorousapproach to his work. Though he becomesthe would-be darling of the French culturescene as well as the art world’s richestdenizen, Martin has zero interest in celebri-ty, wealth or – so it seems – human rela-tionships.

Martin makes his name through a seriesof photos of Michelin maps, ending upmeeting Michelin’s fastest rising communi-cations executive, a stunningly beautifulRussian woman called Olga. The apple of

virtually every man’s eye, she loves only him, but when she is sent to work in theRussian office he lets her go without fan-fare.

However, it is his relationship with the

My Kind of CookingMark SargeantPublished by Quercus£20

Odd bits: How to Cook the Rest of theAnimalJennifer McLaganPublished by Jacqui Small£20

M ARK Sargeant was a GordonRamsay protégé and HeadChef at Claridges formerly unnoticed in the shadow of

his boss. Now, he’s done it on his

own – opening his restaurantRocksalt in Folkestone and penning

his first book. His solo effort is unpre-tentious and unrevolutionary. It’scolloquial, personal and useful – asthough a mate is passing on stellarcooking advice and shortcuts collect-ed over the years. A recipe calls for British snails with

pearl barley, but surely snails are notthe easiest thing to find? Sargeantaffably tells us where to pick up the

best in the ingredients list: fromHelen Howard in Kent, of course.

King prawn and chorizo in tomatogarlic sauce is an easy and fulfillingsupper to whip up, and I can vouchfor the satisfaction it yields after a

gruelling day at work. Sargeant isnot rewriting the book on classic

recipes, as you might expect from ahigh-end chef. He’s sharing dishes heprobably eats on his nights off athome. There’s nothing overly compli-cated here, except the brains and

brawn, which requires the determi-nation to dismantle a pigs head.

Sargeant opens his “cheap cuts”chapter with the following procla-mation: “one day I hope to devote a

whole book to cheap cuts,” which isexactly what Jennifer McLagan’s

book, Odd Bits does. McLagan’s last book, Fat, was a superb celebrationof the often (incorrectly) vilified sub-stance.

And with Odd Bits, she extends thecourtesy to forlorn forgotten cuts:

the tongue we never think of, thesweetbreads we only choose inrestaurants. There are gizzards, cox-combs and hocks; the ingredientsthat look more at home inShakespeare’s pentameter than a21st century cookbook. But there arealso recipes with the more familiarpork belly and oxtail.

Odd Bits is studded with enrichingliterature, and written with care andknowledge. It’s an important andmuch-needed book that helps usunderstand why and how we shouldeat the whole animal. This is not a

book to dip into just for recipes but

one that should be devoured whole,literature and all. Helena Lee

Two cookbooks to add flavour to your winter kitchen

Lifestyle | Books36 CITYA.M. 3 NOVEMBER 2011

London barstake styleup a notch

THE Hawksmoor empire has opened theirthird and beefiest establishment inGuildhall and its separate 50-seater barhelps reinforce the group’s penchant for

cocktails as well as steak.Pall Mall just got a bit posher with the

addition of The Balcon and its new StJames’s Bar. Drawing inspiration from CocoChanel’s 1920s Paris apartment it features a

gold studded ceiling, shagreen topped tables,mahogany leather, blue mohair banquettesand an amethyst-topped bar. It’s eponymouschampagne balcony overlooks the brasserie,framed by two spiral staircases and is com-plemented by a “Champagne Angel”, to offeryou sparkling advice on its extensive range of fizz.

Just down the road Rockwell at theTrafalgar Hotel has celebrated its tenth birth-day with a makeover and a sleek, understat-ed new design featuring dark woods, softlighting and black velvet chairs. Its menu hasalso undergone a nip and tuck and featureshealth conscious cocktails that are cate-gorised by calorie-content, ranging from themost abstemious (low-calorie, non-alcoholic)“Saintly” to the most indulgent (but stillnutritious) “Wickedly Good”.

A discreet new bar is set to subtly takeSoho by storm in a growingly trendy area nearBocca di Lupo and Spuntino. The ArcherStreet Bar is set over two floors of shabbychic, distressed elegance and offers a cocktailbar and lounge environment with unique liveentertainment. Talented bar staff break intosong and dance throughout the evening butwhat could be gimmicky instead adds to theexuberant atmosphere of this high-end butlaid-back establishment which also brings thefirst Billecart-Salmon Champagne bar toLondon. They mix serious cocktails too and thedownstairs booths and alcoves make this anideal new place for groups to party till late.

Finally, a shiny new lounge bar, Palm BeachBar & Kitchen has recently launched onBerkeley Street and as well as offering asmoking terrace and DJs Thursdays andFridays, and most importantly, it’s open 24/7,and licensed until 5am.Tim Badham is the founder of Innerplace,London’s leading entertainment concierge,experts in access to exclusive members clubs,bars, restaurants and VIP events. www.inner-

place.co.uk. @InnerplaceLDN

GOINGOUTTIM BADHAM

8/3/2019 Cityam 2011-11-03


T E R

R E S T R I A L

CRIMEWATCH

BBC1,9.00PMKirsty Young, Matthew Amroliwalaand Rav Wilding appeal forinformation in the case of a teenagerwho was shot on his doorstep.

LIFE IN A DAY

BBC2,9.00PMPremiere. Documentary compiled fromonline videos, in which people all overthe world were given the assignmentto document a part of their day.

LIVEUEFAEUROPA LEAGUE ...

CHANNEL5, 7.30PMFulham v Wisla Krakow (Kick-off 8.05pm). Coverage of the matchdayfour encounter, where the Group Krivals meet for the second time.

BBC1

SKY SPORTS 17pm Sky Sports News at Seven

7.30pm Live Premier League

Snooker 11pm The Rugby Club

12am Ringside 1am Premier

League World 1.30am Time of

Our Lives 2.30am America’s Cup

Uncovered 3am-6am Live World

Golf Championship

SKY SPORTS 21pm Live ATP Tennis. The

Davidoff Swiss Indoors.9pmRingside 10pm European

Challenge Tour Golf 11pm Time of

Our Lives 12am ATP Tour

Uncovered 12.30am Premier

League Snooker 4am-5am

Ringside

SKY SPORTS 37pm America’s Cup Uncovered

7.30pm Premier League World

8pm The Rugby Club 9pm Volvo

Ocean Race 10pm WWE: Late

Night – Raw 12am WWE: NXT

1am World Golf Championship

3am-4am Volvo Ocean Race

BRITISH EUROSPORT6.30pm Strongest Man 8.30pm

Fight Club 11pm Strongest Man

11.30pm-12.35amPoker

ESPN5.30pm Live UEFA Europa

League Football. Maccabi Tel-

Aviv v Stoke City (Kick-off

6.00pm). 8pm Live UEFA Europa

League Football 10.30pmESPNPress Pass 11pm World Series of

Poker 12am Goal! 12.30am Live

Major League Soccer 3am Live

Major League Soccer 5am-6am

World Series of Poker

SKY LIVING7pm Criminal Minds 8pm Ringer

9pm Four Weddings US 10pm

Signed By Katie Price11pm

Bones 12am Criminal Minds 1am

CSI: Crime Scene Investigation

2.40am Maury 3.30amBones

4.20amNothing to Declare

5.10am-6am Jerry Springer

BBC THREE7pm Top Gear 8pm Don’t Tell the

Bride9pm The World’s Strictest

Parents 10pm EastEnders

10.30pmRussell Howard’s Good

News 11pm Family Guy 11.50pm

American Dad! 12.30am The

World’s Strictest Parents 1.30am

Russell Howard’s Good News

2am Hot Like Us 3am Lee

Nelson’s Well Good Show4am-5am Don’t Tell the Bride

E47pm Hollyoaks 7.35pmHow I

Met Your Mother 8pm The Big

Bang Theory 8.30pm Perfect

Couples9pmHow I Met Your

Mother9.30pm Happy Endings

10pm The Inbetweeners Top 10

Moments – Part Two 10.35pm

Show and Tell 11.25pmChris

Moyles’ Quiz Night 12.15am The

Big Bang Theory 1.10am Scrubs

1.55am How I Met Your Mother

2.20am Show and Tell 3.05am

Chris Moyles’ Quiz Night 3.50am

Rules of Engagement 4.10am

Desperate Housewives

4.50am-6amSwitched

HISTORY7pm Heir Hunters 8pm Pawn

Stars8.30pm American

Restoration 9pm Ice Road

Truckers 10pm Storage Wars

11pm Pawn Stars 11.30pm

American Restoration 12am IceRoad Truckers 2am Oil Riggers

3am Heir Hunters 4am Pawn

Stars5am-6amAncient

Discoveries

DISCOVERY7pm Mythbusters 8pm Wheeler

Dealers 9pm Ice Pilots 10pm

Factory Line 11pm Weird or

What? 12am Bear Grylls: Born

Survivor 1am Ice Pilots 2am

Deadliest Catch 3.50am Clash of

the Dinosaurs 4.40am Top 10

Mega Engineering 5.30am-6am

Destroyed in Seconds

DISCOVERY HOME &

HEALTH7pm Birth Days 8pm I Didn’t

Know I Was Pregnant9pmMy

Naked Secret 10pm My Strange

Addiction11pm Mystery

Diagnosis12am My Naked

Secret 1am My Strange

Addiction2am Mystery

Diagnosis3am I Didn’t Know IWas Pregnant 4am A Baby Story

5am-6amBringing Home Baby

SKY17.30pm Futurama 8.30pm

The Simpsons 9pm Glee 10pm

House 11pm Ross Kemp: Extreme

World 12am Law & Order 1am

Road Wars 1.50amUK Border

Force 2.40am Mental 4.20am

Paul McKenna: I Can Change

Your Life 5.10am-6am Liza and

Huey’s Pet Nation

BBC2 ITV1 CHANNEL4 CHANNEL5

S A T E L L I T E &

C A B L E

TVPICK6pm BBC News

6.30pm BBC London News

7pm The One Show

7.30pm EastEnders; BBC News

8pm Britain on the Fiddle9pm CHOICE Crimewatch10pm BBC News

10.25pmRegional News

10.35pmCrimewatch Update10.45pmQuestion Time

11.45pmThis Week12.30amHoliday Weatherview12.35am Sign Zone: Cops Behaving

Badly – Panorama 1.05am SignZone: Countryfile 2.05am SignZone: Antiques Roadshow 3.05am

Sign Zone: Reel History of Britain

3.35am-6amBBC News

6pm Eggheads

6.30pm Strictly Come Dancing

– It Takes Two

7pm Celebrity Antiques Road

Trip: With Honor Blackman

and Britt Ekland.

8pm Great British Food Revival

9pm CHOICE FILM Life in a

Day: Premiere. Documentarycompiling online videos from

around the world. 2011.

10.30pmNewsnight: Weather

11.20pmBurnistoun

11.50pmWomen!

12.25amDamages1.05am BBC News 3.35am Close

4am-6amBBC Learning Zone

6pm London Tonight

6.30pm ITV News

7pm Emmerdale

7.30pm A Failing System:

Tonight8pm Emmerdale8.30pm Coronation Street

9pm Joanna Lumley’s Greek

Odyssey10pm ITV News at Ten

10.30pm London News10.35pm Piers Morgan’s LifeStories: James Corden 11.35pm71

Degrees North 12.30amThe Zone;ITV News Headlines 2.35amAFailing System: Tonight 3am ITVNightscreen 4.35am-5.30amThe

Jeremy Kyle Show

6pm The Simpsons

6.30pm Hollyoaks

7pm Channel 4 News

7.55pm 4thought.tv

8pm Beeny’s Restoration

Nightmare9pm Educating Essex

10pm Top Boy

11.05pmRandom Acts11.10pmThe Secret Millionaire

12.15amThe Film Show12.50amMusic on 4 1.55am

Embarrassing Bodies 2.50am

Accidentally on Purpose3.15amSouthland4.05am UnreportedWorld 4.30amWillie’s ChocolateRevolution 5.25am-6.10am

Countdown

6pm Home and Away

6.25pm OK! TV

7pm 5 News at 7

7.30pm CHOICE Live UEFA

Europa League Football:

Fulham v Wisla Krakow

(Kick-off 8.05pm).

10.10pmBig Brother

11.10pmBig Brother’s Bit onthe Side: Emma Willis reports

on developments in the house.

12.10amSuperCasino4.05am Chinese Food in Minutes

4.10am Michaela’s Wild Challenge

4.35amHouseBusters 5am County

Secrets 5.10am House Doctor

5.35am-6amHouse Doctor

16 4 7

45

12 35

8 8

21 8 11

45

11 16 9

10 15

15 5

45

24 16 17

10

10

22

41

19

15

13

13

7

34

19

23

10

16

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28

12

6

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32

13

29

9

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 Self-defence discipline (4)

3 Edging of small loops,as on lace (5)

6 Give a cat-like soundof pleasure (4)

7 Part of a church whichcontains the altar (4)

9 Force of workers available (3) 10 Remove the fastenings

from (7) 12 Hollow, flexible structure

resembling a bag (3) 13 Frequently, poetically (3) 14 Evergreen conifer (7) 15 Named prior to marriage (3) 16 Mr Geller, spoon-bender (3) 18 Child’s two-wheeled vehicle

operated by foot (7) 20 Owns (3) 21 Introduce to solid food (4) 22 White-tailed sea eagle (4) 23 Globe, planet (5)

24 Back end (4)

DOWN

1 Close-fitting

trousers of heavy denim (5)

2 Exposed (4)3 Lustful,

salacious (8)4 Steadiness of

mind understress (9)

5 Article of faith (5)

8 Descendant (9)11 Hypothesised (8) 15 Not in any

way (5)17 Nearer to the

centre (5)19 Large

container (4)

A

T

I

N

GS

L

O

C

S P R A N G B R

Y E R O A D I E

N U L L I I V

O A S P A T T E R

P I X I E N A R E

S I R I G M I

I N N G S P A W N

S U G G E S T R D

R A U A I D E

A S Y L U M N E

E A S E N D E R

9 6 7 8 2 6 1 3

7 3 6 5 3 8 5 7

4 2 5 1 3 9 2 8

8 4 9 8 6 7 9

6 1 5 2 1 6 3 4

8 9 4 2 7

5 9 6 8 7 4 1 6

1 6 7 1 3 4 9

2 3 1 6 3 1 2 5

6 7 3 1 8 2 3 7

9 8 6 3 9 4 7 8

WORDWHEELThe nine-letter word was

BREAKDOWN

Lifestyle | TV& Games 37CITYA.M. 3 NOVEMBER 2011

8/3/2019 Cityam 2011-11-03


TOTTENHAM manager Harry Redknapp is recovering after minorheart surgery but he won’t be forced toconsider early retirement, according tohis assistant Kevin Bond.

Redknapp was admitted to hospitalon Tuesday with a cardiac problemand had two stents inserted to unblock coronary arteries on yesterday.

Spurs have already announced thatthe 64-year-old will be discharged fromhospital in the next 48 hours and theformer Southampton and Portsmouth

boss himself has said that he wants to

return to the dugout for Spurs’London derby at Fulham in the

Premier League on Sunday.However, doubts have been raised on

the long-term managerial prospects of Redknapp, who joins colleagues Sir

Alex Ferguson, Gerard Houllier andSam Allardyce to undergo heart sur-gery, but his assistant Bond is not tooconcerned.

“This will not knock Harry’s desireto manage, no chance,” he explained.

“It won’t happen. You give him twodays off and he will come back rejuve-nated.

“It’s nothing really for us to worry about. It’s happened. The procedurehas come and gone. I have spoken toHarry and he is fine.

“While no one wants to see anyonehave any type of operation, it is a sim-

ple procedure and hopefully he will be back within a couple of days so every-thing will be fine.”

Redknapp will miss tonight’s EuropaLeague tie in Russia against RubinKazan but former Arsenal defender

William Gallas and South Africa inter-national Stephen Pienaar are likely tomake their first appearances of the sea-son having recovered from long-terminjury.

Tottenham will qualify for the last32 if they win in Kazan and Bondhopes three points will also put a smileon Redknapp’s face.

“It would certainly lift his spirits if we were able to bring him home some

points from the game tomorrow,”Bond added.

MANCHESTER UNITED manager Sir Alex Ferguson insists he’d have noissue playing Wayne Rooney in cen-tral midfield against heavyweightopposition after the strikerimpressed in an unfamiliar role last

night.Last season’s runners-up leapt to

the top of Group C following a lessthan straightforward victory againstmodest but determined opposition.

United were dealt a blow in the 8thminute when Michael Owen wasforced off with a thigh injury, butthey broke the deadlock soon after

when Luis Antonio Valencia convert-ed a Phil Jones cross at the far post.

Though they offered little inattack, the Romanian championsmade their illustrious hosts waituntil three minutes from time to

wrap up the points when Rooney’sdeflected effort left Branko Grahovacstranded.

United have struggled to find theright balance in central midfield thisseason following the retirement lastsummer of Paul Scholes, andFerguson believes Rooney may fea-ture in a deeper role in more high-profile games as the seasonprogresses.

“I thought he was fantastic in cen-tral midfield,” he said. “His aware-ness of people around him andchoice of passing was really good. Hedid very well for us tonight.

“I think it’s a short-term thing atthe moment. It’s diff icult to say. Theopposition played really well againstus tonight but I’d be confident of playing him there (against biggerteams).”

Rooney added: “I played there a lot when I was younger and it’s some-thing which means you get a lot of the ball and we had to defend attimes as well tonight.

The manager asked me to do it andI’m happy to do it. I’ve said before Ifeel I’m a good enough footballer toplay anywhere on the pitch.

“I’m not being big-headed, I feel Iam capable of doing that and if themanager wants me to play there, I’veno problem doing that.”

In their first home appearance

since they were beaten 6-1 by Manchester City last month – a resultdescribed as a “debacle” and “embar-rassing” by Ferguson in his pro-gramme notes – United stillappeared to be carrying some of themental scarring that scorelineinflicted.

The mood was lightened insideOld Trafford when Valencia pokedhome his second goal of the seasonafter Rooney’s searching ball hadlocated Dimitar Berbatov who, on arare start, provided Jones with theinvitation to cross invitingly for theEcuador international.

It should have been the start of agoal avalanche but United had to

wait until the 87th minute forRooney to notch his 27th ChampionsLeague goal, albeit with the aid of a

big deflection.“We’ve won the game and it has

put us in the position where if we win against Benfica we’ve won thegroup so that is the incentive for us,”added the United manager.

Rooney happyto be United’snew Scholes

Heart surgery won’t force Harry

into retirement, insists Bond

Sport38 CITYA.M. 3 NOVEMBER 2011

BY JAMES GOLDMAN

FOOTBALL▲

SPORT | IN BRIEF

CorrectionIn Wednesday’s edition we wronglyreported that Chelsea had condonedchants directed at Anton Ferdinand dur-ing the 1-1 draw against Genk. The clubhad, of course, condemned them. Weapologise for the error.

Beckham wants England recallFOOTBALL: Former captain DavidBeckham wants an England return,despite having not won a cap in twoyears. The Los Angeles Galaxy midfield-er has not played for his country sinceearning his 115th cap in the 3-0 victoryover Belarus at Wembley in October2009. “I’m playing well, I’m still fit and Ihaven’t retired from international foot-ball,” said the 36-year-old.

London 2017 bid on courseATHLETICS: UK Athletics chairman EdWarner says London’s bid to host the2017 World Championships is “in reallygood shape”. Warner believes theremoval of uncertainty over the futureof the Olympic Stadium has put the cap-ital in with a real chance of winning nextweek’s vote.

Results

email [email protected]

FOOTBALL▲

2

0

MAN UNITED

OTELUL GALATI

Man United 4 2 2 0 8 4 8

Benfica 4 2 2 0 5 2 8

Basel 4 1 2 1 6 7 5

Galati 4 0 0 4 1 7 0

GROUP CTEAM PLD W D L F A PTS

BRITISH No1 Andy Murray faces arace to be fit in time for the ATP

World Tour finals at London’s O2 Arena later this month afterhe was forced to pull out of the Swiss Indoors because of a right gluteal musclestrain.

Murray (right), who has won fifteen consecutivematches since his US Opensemi-final defeat at the handsof Rafael Nadal, withdrew shortly before his first-round match againstD u t c h m a nRobin Haase

was due tostart.

Murray, who won three titles in Asia last month, had requested a wildcard to play in an event featuring

Wimbledon champion Novak Djokovic and Roger Federer.

World No3 Murray had cho-sen to play in Basle over Valencia, where he was cham-pion two years ago, and wasalso set to play in the doubles

with his brother Jamie. The 24-year-old, who has been

replaced in the draw by MarcoChiudinelli, will hope to have

recovered by the timethe season-ending

tournament inLondon begins

on 20November.

TENNIS▲

Murray in race to be fit for

season’s finale in London

United kept their third clean sheet ina row since the 6-1defeat by City

Picture: PA

8/3/2019 Cityam 2011-11-03


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CRUSHING as it may have beento miss out on last month’s

World Cup through injury,Harlequins scrum-half Danny

Care could be forgiven for feelinghis international aspirations have

been enhanced as a result of thedamaged toe which meant he wasunable to travel to New Zealand.

In Care’s absence England limpedinto the knockout stages, wherethey were overwhelmed by Francein the quarter-finals, and were heav-ily criticised for their conduct off the pitch.

With Ben Youngs, who failed toreproduce the form he had shownin the victorious Six Nations cam-paign earlier in the year, hampered

by an ongoing knee injury andRichard Wigglesworth out of actionfor the next six months, the oppor-tunity for Care, 24, to regain theEngland No9 shirt has suddenly pre-sented itself.

Care, who is poised to make hisQuins comeback after threemonths on the sidelines onSaturday, accepts he now has a realopportunity to cement his status asEngland’s first-choice scrum-half,

but dismissed the idea that not being associated with the failure of Martin Johnson’s side represented a

blessing in disguise.“A lot of people have said to me

maybe it wasn’t a bad World Cup tomiss but I don’t see it that way atall,” he told City A.M.

“I was dying to play. I’d been inthe squad for the last three yearsand then I missed out which washeartbreaking.

“In the warm-up games I washappy with my form and I felt I wasfirst-choice at that point and then

got injured at the worst possibletime.

“Now Wiggy picked up a really unfortunate injury which is goingto keep him out for a while and

Youngsy is struggling a bit with hisknee so there is a real chance forme. The target has to be getting

back in the team ahead of the SixNations.”

CRITICISED

That side could end up bearing lit-tle resemblance to the one whichtook to the field against Les Bleuslast month with a number of seniorplayers likely to head for the door

marked ‘international retirement’. Already skipper Lewis Moody has

called time on his England career, while manager Johnson is currently considering his own future.

Meanwhile, it remains to be seen whether the conduct of the likes of Chris Ashton and Manu Tuilagi willhave further repercussions in termsof future selection.

Care, however, believes the reac-tion to England’s behaviour off thefield was wildly over-hyped.Moreover, he admitted that had he

been on tour, he would have had noqualms about joining his team-mates on a boozy night out.

He said: “A lot of what was being written about stuff happening off the pitch was something and noth-ing really. If the guys had been play-ing well noting would have beensaid about their exploits off thepitch.

“Lads are lads at the end of theday and they’re going to want to goout and have a beer. I think I’d defi-nitely have been with the team. If the boys are all going out togetherI’d have been there and probably

would have been criticised.“Johnno doesn’t tell anyone not

to go out. He’s been around interna-tional squads before and played insuccessful teams and I’m sure they had a beer together. I don’t think that was a major problem.”

PLATFORM While England have struggled inCare’s absence, the same can hardly

be said of his club side, who willlook to stretch their winning runsince the start of the Premiershipseason to eight games when they entertain Bath at the weekend.

Harlequins director of rugby Conor O’Shea has sculpted a young,

vibrant side who have built on lastseason’s landmark Amlin ChallengeCup final win over Stade Francais.

Care, who acknowledged he won’t simply waltz back into theQuins starting line-up, believes that

victory over the French giants back in May has provided the squad withthe platform to go onto greaterthings.

He said: “The success we had lastseason with winning the AmlinCup has acted as a springboard andgiven us the determination anddrive to go and win something big-ger and better. We’re back in theHeineken Cup this year and that’ssomething we’re really targeting.

“The boys have played so well this year and that’s great for the compe-tition in the squad. Everyone has tofight for their place.

“In my position Karl Dickson hasplayed really well. It’s fantastic forthe squad and I know it’s not goingto be a case of walking straight back into the team.”

Sport 39CITYA.M. 3 NOVEMBER 2011

Missing out on the World Cupwas not a blessing in disguise

Care missed the World Cup with a damaged toe Picture: ACTION IMAGES

WASPS believe they have been letdown by veteran lock Simon Shaw who has reneged on a contract hesigned before departing for lastmonth’s ill-fated World Cup in New Zealand.

The 38-year-old has been heavily linked with a move to Toulon inrecent days, with the French sidethought to have gone as far as offer-ing the 68 Test cap forward a short-term contract.

In a statement, Wasps said: “SimonShaw signed a contract extension

with London Wasps in August, beforeleaving for the Rugby World Cup.

“Simon requestedthat the club didnot announcethis at thetime for per-sonal rea-sons, whichthe club washappy tocomply with.

“Upon hisreturn, heinformed the clublast week that he would like to finishhis career overseas. The club are very disappointed with this news andawait an official approach for theplayer.”

Shaw’s sudden change of heart rep-resented a double blow to the Londonclub who also confirmed the depar-ture of long-serving head coachShaun Edwards.

The 45-year-old had been part of the coaching set-up at Wasps for adecade but departs after discussions with the club after the conclusion of the World Cup, where he served as Wales’ defence coach.

Edwards’ future at the club had been in doubt after he recentlyrevealed that he expected to returnfrom the World Cup, where hehelped Wales to a fourth-place finish,as a “free agent”.

Wasps furyas Shawdecides to

jump shipRUGBY UNION▲

Quins Scrum-half Care tells James

Goldmanhe mayhave been one of England’s bad boys

8/3/2019 Cityam 2011-11-03


MANCHESTER CITY manager RobertoMancini believes his side will face theacid test of their Champions Leagueaspirations in a winner-takes-all clashagainst Napoli in three week’s time.

The Premier League leaders took just one point from their openingtwo fixtures in the competition, but back-to-back wins over Spanish strug-glers Villarreal has catapulted them back into contention for qualificationto the knockout stages.

Victory last night, achieved thanksto a Yaya Toure brace and a MarioBalotelli penalty, was as routine asthe assignment in Naples is likely to be demanding.

Mancini said: “I think this win isimportant because now we have agood chance.

“We know that everything will bein Naples.

“I think it will be an incredibleatmosphere. There will be 70,000 peo-ple at the stadium.

“I think it is very difficult to play but it is important to go there withthis result.

“I don’t think it was easy to winhere but we played very well and after

the first goal it was easier. That was

really important.” Villarreal, seasoned Champions

League campaigners but decimated by injury, offered little resistancefrom the moment Toure acceptedDavid Silva’s pass in the 30th minute,stepped inside and buried a low curl-ing shot past Diego Lopez.

And the points were wrapped up infirst-half stoppage time whenBalotelli nonchalantly stroked homea penalty after he had been bargedover by Mateo Musacchio.

A largely uneventful second half was illuminated only by Toure’s sec-ond of the night. Samir Nasri releasedBalotelli down the left, he shippedthe ball onto the Ivorian powerhouse, who tricked his way past a defenderand finished with ease.

The only moment of concern forMancini came 25 minutes from time when he was forced to withdraw play-maker David Silva. The Spaniard leftthe field clutching his back and wasseen to be grimacing in pain in thedugout, but his manager feels theinjury is not too serious.

He said: “I don’t think this is seri-ous. He took a knock on his back. Also we play again in 60 hours againstQueens Park Rangers. I think he canrecover well.”

Balotelli andToure set Cityup for Napoli

crunch clash

Sport40

BY JAMES GOLDMAN

FOOTBALL▲

0

3

VILLARREAL

MAN CITY

Bayern 4 3 1 0 8 3 10

Man City 4 2 2 0 5 2 7

Napoli 4 1 2 1 6 5 5

Villarreal 4 0 0 4 1 9 0

GROUP ATEAM PLD W D L F A PTS Balotelli has scored

seven goals in seven games

Picture: ACTION

IMAGES

EMBATTLED England manager Martin Johnsonreceived a welcome boost last night with thenews that a review to be led by Fran Cotton, oneof his harshest critics, is to be scrapped follow-ing Rugby Football Union acting chief executiveMartyn Thomas’ decision to step down.

The 67-year-old’s position has come underincreasing scrutiny in recent months in the

wake of the firing of former chief executive John Steele in June following a failed attempt to

recruit a performance director.Stephen Brown, the union’s chief financial

officer, will take over from Thomas as actingchief executive next month until a full-timeappointment is made.

England players had refused to co-operate with Cotton’s independent inquiry into the ill-fated World Cup campaign, which Thomas hadcalled for. Ex-Lions manager Cotton hadclaimed that England under Johnson had made

little or no progress and was damning of England’s conduct off the field in New Zealand.

RUGBY UNION▲

Johnson boost as Thomas leavesRFU and Cotton review scrapped

DISGRACED Pakistan cricketers Salman Butt,Mohammad Asif and Mohammand Amir, as well as agent Mazhar Majeed will learn today whether they will spend time behind bars forthe part they played in the spot-fixing scan-dal.

Butt and Asif were both found guilty of con-spiracy to cheat and conspiracy to accept cor-

rupt payments charge by a jury at Southwark Crown Court on Tuesday. Amir had already

pleaded guilty to both charges in September, while it was revealed yesterday that Majeedhad also done the same.

During another day of revelations Mr Justice Cooke dismissed Amir’s claim that hehad only been involved in fixing one match. The court also heard Asif was paid £65,000 tostop him switching to a rival match-fixingring.

Majeed, meanwhile, claimed former cap-

tain Butt was the ring leader in the conspira-cy, introducing him to an Indian match fixer.

CRICKET▲

Disgraced agent Majeed andPakistan players to learn fate

CITYA.M. 3 NOVEMBER 2011

REDKNAPP WON’TCALL IT QUITSSPURS MANAGERUNDERGOES HEARTSURGERY: PAGE 38

8/3/2019 Cityam 2011-11-03


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