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FTSE 100 5,696.70 +84.44 DOW 12,462.47 +69.78 NASDAQ 2,702.50 +25.94 /$ 1.55 unc / 1.21 unc /$ 1.28 unc

Danes join Cameron in fight against financial transaction tax

LOBBY groups said yesterday that legalchallenges to a high speed rail link

between London and Birmingham arealready in the pipeline, after the con-troversial new route was given thegreen light by the government.

Campaigners against the plannedrail link, dubbed High Speed 2 (HS2),

will attempt to place the Departmentfor Transports approval procedureunder judicial review on grounds of alack of environmental analysis andgaps in the expected planning costs.

Pressure group 51m, made up of 18local authorities that oppose the gov-ernments plans, has set its team oflegal experts on the case and now hassix weeks to file a legal challenge.

First proposed by the Labour govern-ment in 2010, the 32.7bn construc-tion project will see the Birminghamto London commute cut down to 45minutes by the completion of its firstphase in 2026. The second phase willextend the line, carrying trains travel-ling at 225mph, to Manchester andLeeds by 2033.

The government estimates that HS2

will generate benefits of 47bn andfare revenues of 34bn over 60 years. Transport secretary Justine

Greening yesterday revealed an arrayof alterations to the original consulta-

www.cityam.comIssue 1,546 Wednesday 11 January 2012 FREE

BOURSE DEALHITS A BLOCK

REGULATORS TO

AXE DEUTSCHE

NYSE TIE-UP P4

BUSINESS WITH PERSONALITY

tion package designed to appease MPsand residents along the route, saying:The changes mean that more thanhalf the route will now be mitigated bytunnel or cutting and there will also

be a reduction in the impacts on peo-ple and communities, ancient wood-lands and important heritage sites.

However, for many this was notenough to justify the project. Douglas

McWilliams, chief executive of theCentre for Economics and BusinessResearch, called the claim that alterna-tive plans would not provide enoughcapacity complete nonsense. Joe

Certified Distribution31/10/11 till 27/11/11 is 100,007

BY LAUREN DAVIDSONTRANSPORT Rukin, Stop HS2 campaign coordina-

tor, said: It is not a question ofwhether there will be a legal challenge via judicial review its how manythere will be.

The government responded to criti-cism that HS2 would deface theChiltern Hills by proposing to buildover 56 per cent of the railway in tun-nels or cuttings.

This includes a continuous tunnelfrom Little Missenden to the M25 thatit yesterday admitted would cost1.86bn to build despite previous esti-mates speculating that the figure

would be in the realm of 500m.The tunnels have been seen as a con-

cession to MPs in the Tory heartlandssurrounding the Chilterns who voicedstrong concerns regarding the localimpact of the new line.

Cheryl Gillan, the Tory MP forChesham and Amersham who wasprepared to quit over the originalplans, said yesterday she welcomed thechanges.

While some business leaders havebeen notably averse to HS2, includingNext chief executive Lord Simon

Wolfson and former director ofBarclays Bank Lord Nigel Vinson, oth-ers accepted yesterdays governmental

approval on the grounds that it wouldimprove business, increase travelcapacity and advance the UKs globalposition.

ALLISTER HEATH: P2, MORE: 12-13

33BN RAIL SCHEMEFACES LEGAL THREAT

A FINANCIAL transactions tax will costhundreds of thousands of jobs, Danisheconomy minister Margrethe Vestagersaid yesterday, while Denmarks for-mer foreign minister Lene Espersendescribed the tax as bullshit.

The Danes who hold the EUs

rotating presidency now matchDavid Camerons rejection of theEuropean Commissions proposals.

Vestager pointed to the ECs own stud-ies that showed the tax could cost theEU around 1.7 per cent of GDP.

However, the French government isso desperate to implement the tax thatfinance minister Francois Baroinclaimed that the country will go

ahead with the plan with or withoutother EU states involvement.

And the deputy of the leadingGerman Christian Democratic partyhas insisted Angela Merkel will pressahead with the tax despite oppositionfrom her coalition partners.

It will happen I doubt the FreeDemocrats opposition will last forev-er, said Michael Meister.

Meanwhile, European Central Bankgoverning member Ewald Nowotnysaid he expects the EU to experience amild recession in 2012.

Growth will be zero if we arelucky, he said.

Nowotny also said he believesHungarys bailout negotiations withthe International Monetary Fund (IMF)

will end with a positive solution.

At the same time Greece was near-ing a deal with private bondholders tohalf their debt holdings a precondi-tion of the IMFs agreement to give thecountry a second bailout.

But hedge funds, which have hugeholdings of Greek paper, are believedto be standing in the way of the IMFsplanned bond haircuts.

MORE ON THE EUROZONE: P8

BY TIM WALLACEEUROZONE

Transport secretaryJustine Greening isproposing a 1.86bntunnel through theChilterns

Picture: PA

M&S LEADS A MIXED DAYFOR THE UKS RETAILERS

HIGH STREET EXPECTS TOUGH 2012 P6-7

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News2 CITYA.M. 11 JANUARY 2012

Rivals roundon RomneyMITT Romney faces growing questionsabout his candidacy for theRepublican US presidential nomina-tion despite going into last nights pri-mary contest as the clear favourite.

The former head of private equityhouse Bain held onto a significantlead in the final opinion polls for theNew Hampshire primary, while thebattle for second place appeared to bebetween libertarian congressman RonPaul and Jon Huntsman, a moderateformer US ambassador to China.

Commentators said Romney, aMormon who edged to victory in thefirst primary in Iowa last week, needsto finish 10 percentage points ahead ofhis nearest rival in order to be seen asa strong victor. A nationwideReuters/Ipsos poll yesterday showed

Romney preferred by 30 per cent ofRepublican voters, way ahead of hisrivals. He also has narrowed the gapagainst President Obama but stilltrails by five percentage points.

Several of Romneys Republicanopponents have increasingly trainedtheir fire on his time at Bain, giving anindication of how the rest of the pri-mary race will run. Newt Gingrichs backers have labelled Romney apredatory corporate raider.

Romney has won praise, however,for his role helping to run the WinterOlympics in Salt Lake City in 2002.

BY PETER EDWARDS

POLITICS

MICROSOFT ALLEGES PIRACY INCHINA LAWSUITSMicrosoft has stepped up its fightagainst software piracy in China withunprecedented lawsuits againstChinese electronics retailers. Thecompany is suing Shanghai Gome, abranch of one of the countrys largestelectronics and appliances chains,and Beijing Chaoyang Buynow, one ofChinas largest computer malls. TheGome and Buynow cases mark thefirst time Microsoft is suing retailersin China, lawyers said.

SEAN QUINN BANKRUPTCY ANNULLEDBY BELFAST COURT The High Court in Belfast hasannulled the UK bankruptcy of SeanQuinn in a move that will see theIrish businessman face bankruptcyproceedings in the Republic of

Ireland. The decision by Mr JusticeDonal Deeny on Tuesday is a victory

for Anglo Irish Bank, the state-ownedIrish lender that claims it is owed

more than

2bn by Mr Quinn.CITI CHIEF URGES RISK DISCLOSURESHAKE-UPThe chief executive of Citigroup hassaid banks should be forced to publi-cise how they measure risk so thatinvestors can punish institutionsthat are too optimistic about thequality of their assets. Vikram Panditwrites in todays Financial Times thateach bank should be required toexplain how it would measure risk ina standard portfolio, allowinginvestors to compare apples withapples.

GOOGLE SEARCHES SET TO BECOMEPERSONALISEDGoogle has wielded its dominance ofweb search as a key weapon in its bat-tle with Facebook, with a newapproach that draws information

from its Google+ social networkdirectly into users search results.

KINGFISHER SWOOPS CLOSER TOBANKRUPTCYKingfisher Airlines was edging closerto bankruptcy yesterday after the air-line made a last-ditch appeal for gov-ernment help to keep some of itsaircraft from being seized by leasingcompanies. The Indian carrier haswarned that without access to morefunds from state-owned banks, it maynot be able to continue operating because it is unable to make leasepayments for its fleet.

INTEL GAMBLES ON RISE INULTRABOOKS FOR 2012Intel, the largest maker ofmicrochips, is gambling that 2012 will see the rise of the ultrabook,which it claims is a whole new cate-gory of computer. This is a super-slim,lightweight notebook computer mod-

elled on the bestselling AppleMacBook Air.

EUROPE CASTS SHADOW OVERDETROIT SHOWFiat and Chrysler chief executiveSergio Marchionne has warnedEuropean leaders that they are play-ing with fire over a crisis that's leftthe car industry depressed about theprospect for sales in the region.Marchionne said that sales in Europeover the next three years will be flat at best, as a wave of austerity sweepsacross the continent.

LION CAPITAL BUYS IN FINDUS DEBT TOSTAVE OFF RESTRUCTURINGPrivate equity firm Lion Capital is fac-ing another blow to one of its compa-nies, as it buys junior debt in Findusto stave off a forced restructuring bylenders. Lion, which owns Findus, hasa Friday deadline to get agreementfrom lenders to waive covenant

requirements, just four days after see-ing La Senza fall into administration.

TIFFANY LOSES MOMENTUMTiffany & Co. cut its full-year earningsforecast following a holiday seasondamped by cautious spending in theUS and Europe, adding to worriesthat economic uncertainties in theregions have tempered demand fromluxury shoppers. The warning by Tiffany may reverberate to otherhigh-end retailers, but is also specificto the companys overseas growth.

QUAKE JOLTS WESTERN INDONESIAA powerful earthquake has hit watersoff western Indonesia, promptingofficials to briefly issue a tsunamiwarning. Panicked residents pouredinto the streets, but there were noimmediate reports of injuries or seri-ous damage. The US GeologicalSurvey said the 7.3-magnitude quakestruck 260 miles (420 kilometers) off

the coast of Aceh province just aftermidnight.

WHAT THE OTHER PAPERS SAY THIS MORNING

Six reasons this rail plan is a mistake

IF money grew on trees, the govern-ments London-Birmingham HS2 high-speed rail scheme would be a goodthing. Unfortunately, the nation facesfiscal Armageddon; so here are six rea-sons (there are many more) why thecoalition is wrong to back HS2.

1) Like virtually all government infra-structure projects, the costs of thisgrandiose white elephant will end upfar higher than the (already massive)32.7bn the government is pencilingin. The scheme itself will be loss-mak-ing and require huge subsidies. These will benefit a small minority of elite

travellers who can afford the fees. Inyears to come, we will wonder why weagreed to saddle our children witheven more debt.

2) The benefits of this vanity project

will be lower than predicted. Far fewerpeople will use it than hoped for(remember the Channel Tunnel RailLink: passenger numbers after comple-tion were merely a third of those esti-mated at the planning stage). Underthe plans, some cities will end up withless frequent train services (and if theydont, billions extra will have to bespent). To come up with a benefit esti-mate, the project assumes that all ofthe time business executives spendtravelling is totally wasted (ever heardof wi-fi and laptops?)

3) Perhaps a couple of per cent of thepopulation will use the link; yet 100 percent will have to pay for it. The massive-ly under-estimated cost of building HS2is equivalent to 1,000 per UK incometaxpayer. Even if fanciful ticket salesand cost predictions materialise, only42 per cent of the capital costs will be

covered over the projects 60-year life. Ifthere were a referendum tomorrowasking people whether they want tospend that money on HS2, or on some-thing else, or get a tax cut, the scheme

would be overwhelmingly rejected.Poor people will be subsiding rich peo-ples travel as long-distance rail isincreasingly only used by the better off.

4) HS2s first phase will supposedlyenjoy a benefit to cost ratio of 1.6. Eventaken at face value, that is poor fortransport projects; it is below the cut-off point used for new roads. The starktruth is that there are lots of smallerinfrastructure projects around the UKthat are genuinely worth building andfor which private sector funds could betapped. Existing rail infrastructureneeds modernising and expanding.London desperately needs more airportcapacity. Our energy infrastructure isin a terrible state. More roads need tobe built or widened.

5) The scheme is meant to bridge theUKs north-south divide, yet it willprobably merely boost Londons power,

with more people travelling south.There are better, cheaper ways of regen-erating the north, such as tax cuts andderegulation. The estimated regenera-tion gains are wildly speculative; they

need to be set against the certain eco-nomic losses from the taxes and debt topay for the project.

6) The economic case depends onestimates of demand growth (209 percent over 45 years) that are too high.Rail travel did not increase between1952 and 1995; it has grown since then but it is wrong to assume that thissurge will continue forever.

There are many more reasons why Idont like this ludicrous, unaffordablescheme. But I would love to knowwhether readers think Im right on thisor completely wrong email me, orcomment at the bottom of the online version of my column atwww.cityam.com and we will publishthe best reactions in our Forum pages.

[email protected] me on Twitter: @allisterheath

MORE: P12-13

US orange juice futures surged bymore than 10 per cent to an all-timehigh yesterday over fears an unap-proved fungicide in Brazil could hitjuice imports.

The benchmark March frozen con-centrated orange juice contract on theICE Futures US exchange one of thesmallest futures markets featured inthe 1980s film Trading Places jumped the 20-cents daily limit to

$2.0775 in morning trading, takingtwo-day gains to nearly 17 per cent.

It came after reports that the discov-ery of small doses of an unapprovedfungicide in Brazil could crimp juiceimports from the emerging economyand followed a rally sparked by a brieffreeze last week in Florida.

The latest surge appeared related toreports that the Food and DrugAdministration had told juice makersthat it would step up testing for thefungicide carbendazim, which is usedin Brazil but is not allowed in the US.

BYHARRY BANKS

COMMODITIES

Orange juice futures soarFailed crops have squeezed the price of orange juice upward

NEWS | IN BRIEF

Fannie Mae chief steps downThe head of US mortgage funder FannieMae quit yesterday, less than threemonths after the chief of Americas othermortgage backer Freddie Mac left hispost. Michael J Williams said the time isright to turn over the reins to a newleader, after almost three years in the

top job saw him take on the aftermath ofthe US debt crisis. He spent almost 21years working at the group, and willleave once a successor is found. FreddieMac head Charles Haldeman Jr steppeddown in October after two years.

Cargill has worst quarter in yearsUS agribusiness giant Cargill yesterdayreported its worst quarter since 2001,posting a worse than expected 88 percent slump in quarterly earnings fromcontinuing operations to $100m. Thecompany, which has announced plans tolay off 1.5 per cent of its staff and hasparted ways with its top sugar trader, issuffering alongside other commodityheavyweights that have struggled toprofit amid a year of exceptional volatili-ty. Cargill, one of the first US firms toreport this earnings season, said rev-enues rose 17 per cent to $33.3bn.

EDITORS 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 EditorsCode of Practice, a copy of which can be found atwww.pcc.org.uk

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

Republican candidateMitt Romney was wellahead in early pollsfrom the NewHampshire primary

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 Gavin BillennessPictures Alice Hepple

CommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

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NOMURA signalled a full-scale retreatfrom its ambitions to become a top-tier international investment bank yesterday as its head of wholesale,Jasjit (Jesse) Bhattal, announced he isquitting the industry.

While the banks plans to downsizeits global operations were well-known, the departure of Bhattal, whomoved to the bank when it boughtLehman Brothers European andAsian operations, is highly symbolic.

Bhattal had been charged withpushing the bank up the leaguetables, but it has struggled to gaintraction in a shrinking market andlost $950m (614m) in the third quar-ter of last year, pushing the group to aloss.

Bhattals move means that Nomurahas lost the most senior executive itbrought on board when it purchased

the Lehman assets: since then, thebanks share price has fallen some 75per cent and is now close to its lowestlevel since 1974.

But analysts say that the downsiz-ing of Nomuras investment bank isunlikely to see a new challengerexpand to fill the space. Its rivals are

also shrinking: RBS is set to announcethat it will shrink its staff by up to4,000 in its global banking & markets(GBM) division its investmentbank which comes on top of 2,000already announced last year.

And Morgan Stanley has begunimplementing the 1,600 of cuts itannounced last month. Sources toldCity A.M. that among the losses in itsLondon office are several seniorbankers with records in generatingprofits, suggesting that the cuts arefuelled by strategic changes as muchas performance.

Among them are Anthony Stewart,head of index trading; Richard Evans,head of the delta one equities desk;and Patrick Lynch, the banks head ofEuropean credit sales and trading.

Investmentbanking bossquits NomuraBY JULIET SAMUEL

BANKING

News 3CITYA.M. 11 JANUARY 2012

Lost Bhattal in a bruising industry war

JESSE Bhattals departure fromNomura is a moment that shows just how badly wrong thingshave gone for investment banks

even since the financial crisis.Few banks have escaped the

decline, but Nomuras slide has been

exacerbated by the huge cost base itbought by taking on thousands ofLehman staff, as well as giving themsweeteners to stay at the bank.

The bank reported that costs in itsglobal markets division, whichabsorbed the Lehman acquisitions,ballooned by 30 per cent to 417.4bn(3.5bn) in the year it bought theassets, a rise it has been fighting toreverse ever since.

The case illustrates the perils offailing to recognise that Lehmanscollapse was not a one-off disaster tobe followed by a bounce-back, but afundamental change in the wholeindustry.

For too long, credit had been too

cheap. Regulators have exaggeratedthe price reversal by applying aswathe of new rules to what had been some of the most profitableactivities carried out by LehmanBrothers and its rivals.

Returns on Nomura stock shrankfrom a dismal 3.6 per cent in 2009 to1.1 per cent in 2010 and, in the firstsix months of last year, a loss of 2.7per cent. The wholesale division

recorded a loss of 88bn.Like countless rivals, the bank is

reacting by retrenching into more ofa focus on domestic retail business.

McKinsey concluded last year thatinvestment banks will have enoughdifficulty hitting a seven per cent

returns target (below their cost ofcapital), let alone the 13 per cent tar-gets many have floated.

In such an environment, its little wonder that Bhattal is cutting hislosses and quitting not just the bank,but the industry too.

BOTTOMLINEAnalysis by Juliet Samuel

ANALYSIS l Nomura Holdings Inc

JPY

30 Dec 4 Jan 5 Jan 6 Jan 10 Jan

255

250

245

240

235

25110 Jan

Jesse Bhattal has thrown in the towel on banking Picture: REUTERS

ANALYSIS lBANKS SLASH COSTS

LLOYDS% of globalheadcount

Global job cutsannounced

15,000 14.4%

10.4%

10.0%

6.9%

4.0%

2.4%

2.8%

2.8%

1.3%

1.1%

BoA/ML

30,000

HSBC

Credit Suisse

3,500

Unicredit

6,150

Barclays

3,500Nomura

1,000

Goldman Sachs

1,000RBS

2,000

Citi (expected)

3,000

% of globalheadcount

Global job cutsannounced

30,000

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THE HEADS of NYSE Euronext andDeutsche Boerse are set to hold urgenttalks today to try to stop regulators rip-ping up their $9bn (5.81bn) merger.

Duncan Niederauer and RetoFrancioni, the respective chief execu-tives, are expected to meet in New Yorkafter it appeared the European compe-tition commissioner would veto thedeal to create the worlds largestexchange group

Regulator Joaqun Almunia has

reportedly told NYSE and Deutsche hewill only allow the merger if they per-form a U-turn and agree to sell one oftheir main derivatives businesses.

The two firms have been engaged infrantic lobbying since the deal wasagreed in February because of fearsthe merged entity would have amonopoly in European futures andoptions.

The EU antitrust case team andAlmunia work together but it remainsunclear whether Almunia shares the

views of the team. An EU source said itis likely that a draft proposal on thedecision is out now but the commis-sion could not be contacted last night.

Deutsche and NYSE said they havenot received a decision from theEuropean Commission and expect thefinal ruling by 9 February.

They added: We have also proposedsubstantial and tangible concessionsthat address the ECs competition con-cerns and further contribute to thecreation of a stable, regulated pan-European exchange infrastructurethat would ensure Europes competi-

tiveness in an increasingly competitiveglobal market, and deliver significant benefits to participants in the realeconomy.

EU set to axeDeutsche andNYSE merger SWITZERLANDS central bank wasseeking a new leader to contain thestrength of the countrys franc yester-day after apparently forcing out chair-

man Philipp Hildebrand when emailsfailed to clear him of involvement in acurrency trade by his wife.

The supervisory council of the SwissNational Bank made no statementafter a six-hour meeting yesterday,keeping up suspense on who will nowsteer the franc through an unprece-dented period of strength.

The issue is likely to dominate theSwiss governments weekly meetingtoday, which will be followed by a pressconference.

Hildebrands wife Kashya boughtSwFr400,000 worth of dollars on 15 August, three weeks before her hus- band oversaw steps to stem demand

for the franc. She later sold the dollarsat a higher rate.

Emails between Kashya, Hildebrandand their Sarasin bank adviser FelixScheuber, released by the SNB, showedthe central banker had been involvedin discussions on a dollar trade but leftit unclear whether he had approved it.

After examining the emaexchange, the SNBs advisory councilindicated to Hildebrand that his posi-tion was no longer tenable, two Swissnewspapers reported.

Email trail thatled to the SNBchief quitting

BY PETER EDWARDS

CAPITAL MARKETS

BANKING

The exchanges claim the merger will booststability and transparency in European markets Possible concessions include spinning offparts of NYSEs futures trading arm and improv-ing rivals access to Deutsches clearing unit

FACTS | DEUTSCHE BOERSE & NYSE


NEW ideas based on fairness will win the 2015 election for Labour,party leader Ed Miliband claimed ina speech yesterday.

Tough times will continue, hesaid, acknowledging that spendingcuts are necessary.

However, he also stressed thathigh government spending can bebeneficial, pointing to schools builtunder the last Labour governments,

and that such spending requires eco-

nomic growth.Miliband also said he will seek to

reduce the income inequalities thatgrew over that period in power, inpart by finding ways to pay low-earn-ing workers more.

Bankers should be taxed to pay for jobs for young people, according tothe leader of the opposition, and thegovernment should support appren-ticeship schemes by only awardingcontracts to firms with suchschemes in place.

Miliband: Fairnessis crucial to LabourBY TIMWALLACE

POLITICS

Labour leader Ed Miliband says Britain is not fair enough Picture: REUTERS

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SHARES in Marks & Spencer andDebenhams rallied yesterday after thetwo British retailers revealed strongDecember trading, despite economicand consumer headwinds.

Debenhams rose more than 10 percent after the department store groupposted flat like-for-like sales in the 18

weeks to 7 January, or 6.5 per centgrowth including VAT, slightly aboveanalyst forecasts.

Chief executive Michael Sharp saidthe group had performed well acrossall sectors but sales of cosmetics and

beauty were particularly strong, rising21 per cent in the week beforeChristmas compared with the sametime last year.

He insisted that the level of promo-tional activity was the same as last

year but the product mix hadchanged, with early promotions onknitwear helping to boost sales.

Meanwhile Marks & Spencer sawlike-for-like food sales in the 13 weeksto 31 December soar by three per centas party food and bestsellers like pork

crackling helped drive record foodsales in the week before Christmas.

Overall the group saw a modest risein UK sales of 0.5 per cent as generalmerchandise which includes cloth-ing and homewares dragged downthe total by falling 1.8 per cent.

Clothing sales rose by 1.1 per cent,thanks to festive discounting, but thegroups homewares arm suffered a13.3 per cent fall, partly due to its deci-sion to stop selling electrical gadgetsin its stores and shoppers cutting backon big ticket items.

M&S shares rose three per cent, while Debenhams soared nine percent yesterday.

BYKASMIRA JEFFORD

RETAIL

SUPERMARKET chain the Co-opera-tive Group reported strong tradingfigures for the four weeks to 31December yesterday, as it announcedit had bought 28 convenience storesin Scotland from the David Sandsgroup.

Co-op, run by chief executive PeterMarks, has previously said it wants toincrease the number of stores it runsacross Britain by 300 in three years.

Sales in like-for-like food stores

increased by 3.1 per cent in the fourweeks and, in the week leading up to

Christmas, were up by 16.1 per cent. The latest figures from market

researcher Kantar yesterday placedCo-op in seventh place, as it said topsupermarket Tesco had lost marketshare in the run-up to Christmas.

The British Retail Consortium (BRC)also said this morning that overallshop price inflation fell to 1.7 percent in December from two per centin November, but food inflation roseto 4.2 per cent last month from fourper cent in November.

Co-op buys David Sandsshops after strong trading

Retail news6 CITYA.M. 11 JANUARY 2012

BY ELIZABETH FOURNIER

RETAIL

Sales Down

12.9%in eight weeks to 7 January

Sales Up

3.8%in the second half to

31 December

Co-op boss PeterMarks has bought28 stores in Scotland

Picture: PADebenhams andM&S sales enjoy

Christmas boostSales

flatacross the 18 weeks to

7 January

Sales down

8.2%in five weeks to 31 December

ANALYSIS l Marks And Spencer

p

4 Jan 5 Jan 6 Jan 9 Jan 10 Jan

320.00

317.50

315.00

312.50

310.00

307.50

305.00

317.7010 Jan

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Sales Up

4%ine weeks

2 January

Sales Up

0.7%in six weeks to 1 January

Sales Up

0.5%in the 13 weeks to

31 December

DIRE sales of video games over theChristmas period have forced GameGroup to warn that it may breach anupcoming financial covenant test,knocking more than 43 per cent off itsshare price yesterday.

Chief executive Ian Shepherdblamed the lack of new games con-soles dovetailed with the weak con-

sumer environment for like-for-likesales falling 12.9 per cent in the eightweeks to 7 January.

The company said a cash positionsimilar to last years 120m levelmeant it should meet the debt servicerequirements on its loans, stressingthat it was in regular and construc-tive dialogue with lenders.

The group is betting on the releaseof new consoles, including Nintendos

Wii U, which is out later this year.

Loans breach islooming at Game

Game CEO Ian Shepherd

BYKASMIRA JEFFORDRETAIL

Retail news 7CITYA.M. 11 JANUARY 2012

NEWS | IN BRIEF

Majestic toasts sparkling profitsMajestic Wine raised its glass to a 20per cent rise in half-year profits yester-day, helped by its shift to a six-bottleminimum in-store purchase and thereturn to fashion of sparkling wine. The

company, which runs 160 UK stores,said it enjoyed a strong performanceover the Christmas period, with like-for-like sales in the nine weeks to 2 Januaryrising four per cent.

MORE NEWSONLINE

www.cityam.com

Dunelm predicts higher earningsHomewares retailer Dunelm said it was ontrack to post an increase in first-half pre-tax profit following a return to salesgrowth. The firm said sales at stores openover a year grew by 1.1 per cent comparedwith a fall of 1.2 per cent a year earlier.

Sports Direct hits out at BlacksSports Direct has hit out at suppliers toBlacks Leisure for its failure to acquire theretailer, which was bought by its rival JD

Sports this week. The firm said the dealwas disappointing given its own bid forBlacks Leisure in 2010 being marked aswholly inadequate.

Topps Tiles sees takings declineTopps Tiles saw its sales continue to slidein the first 13 weeks of its financial year,as squeezed consumers continue to put offredecorating their homes. The firm saidlike-for-like sales had fallen by 4.2 per centin the first quarter, but said this was animprovement from the 6.9 per cent fall inthe first seven weeks of the year.

Past Times in rescue talksPast Times, on the brink of collapse, was intalks with a potential rescuer yesterday, asource close to the company said. The nos-talgia-themed gift shop chain was due toappoint administrators today, after a 10-day gap required by the courts elapsed.

Urban Outfitters chief leavesUS clothing retailer Urban Outfitters saidlast night that its chief executive GlenSenk had resigned. Shares of the companyfell 12 per cent after-hours.

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BRITAIN saw such strong demand forits index-linked debt yesterday thatthe governments Debt ManagementOffice decided to expand the amountavailable for sale to raise a total of740m.

An additional 40m was sold afterthe auction was covered 1.9 timesdespite the bonds delivering a mar-ginally negative yield of minus 0.116per cent.

The yield on the 35-year bonds is setto protect against inflation, withmany investors so fearful that they arefocused merely on the preservation oftheir wealth, rather than growth.

The sale shows the ongoing appealof safe haven assets despite a mood

of greater optimism since the NewYear.

The Dutch treasury also benefitedfrom the same effect: it sold 3.11bnof bonds at a 0.85 per cent yield. Thatis down significantly from a sale ofdebt with a similar maturity inOctober, for which it paid a 1.4 percent yield.

Austria saw its debt costs move inthe opposite direction, however, show-ing that there are still jitters over thesolvency of its close neighbourHungary, despite Budapest makingsome concessions to its creditors yes-terday.

Austria sold 660m of five-yearbonds at an average yield of 2.21 percent, which is up from the 1.96 percent yield at an equivalent sale inNovember.

UK increasesdebt sale onhigh demandBY JULIET SAMUEL

DEBT

FITCH is likely to slash Italys creditrating at the end of January, theagencys head of sovereign ratings

warned yesterday, which could makeit even harder for the countrys gov-ernment to resolve its debt crisis.

Several of the five other Eurozonecountries currently being reviewedare likely to come down one or twonotches as well, group managing

director David Riley said.Even if Italy does get a handle on itsfinances this year, it will be muchharder to implement the reformsrequired to convince investors ofItalys growth potential, he told anaudience at Fitchs European creditoutlook event.

That means there is a significantchance of Italy losing its A+ rating.

If it fails to regain investors trust,Italys debt to GDP ratio could followan explosive path over the next

decade as bond yields stay high.Spain, Belgium, Ireland, Sloveniaand Cyprus are also being reviewed,and Riley said that at least one canalso expect a downgrade.

Irish education minister RuairiQuinn said the government will beready to re-enter bond markets asplanned at the end of next year and

will not need another bailout.However Portugals central bank

yesterday predicted stagnation in2013 after a deep recession this year.

Italy faces credit rating cut aslabour reform worries mountBY TIMWALLACEEUROZONE


REHN SAYS EUROZONE CRISIS FAR FROM OVER

GREECE is nearing an agreement with private sector bond holders on a debt swap crucial toa second bailout package, EU economic and monetary affairs commissioner Olli Rehn said

yesterday. He also warned that the Eurozones crisis was not over, and urged markets to bepatient to avoid pushing the bloc into a liquidity crisis . Picture: REUTERS

NEWS | IN BRIEF

UniCredit stock in volatile bounceUniCredit shares and rights to buy intothe Italian banks 7.5bn (6.2bn) capi-tal increase rallied after three days offalls yesterday, with traders sayingvolatility remains high. The bank's rightsissue, which runs to 27 January, isregarded as a litmus test of investorappetite for European banks, whichmust find 115bn by June to shore upcapital buffers to better withstand aEurozone debt crisis.

Bank of France reveals stagnationFrench economic growth stalled to zeroin the fourth quarter of 2011, confirminga slowdown in the Eurozone's second-

biggest economy, according to a Bank ofFrance survey published yesterday.

Record overnight deposits at ECBWith no end to the Eurozone's debt crisisin sight, banks have been choosing safetyover profit, pushing overnight deposits atthe ECB to record highs of 482bn yester-day. The ECB pays 0.25 per cent interestfor overnight deposits, well below the0.372 per cent at which banks could lendout their spare cash on interbank markets.

BBVA takes a hit on US goodwillBBVA, Spain's second-biggest bank, saidit would take a 1bn (825m) hit on2011 net profit due to an adjustment inits goodwill, boosting capital by 400m.The goodwill adjustment in its US unitwas due to the slow economic recovery

and an expectation of low interest ratesin that country, BBVA said yesterday.

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EUR/USD Headline Typical Margin

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IG Markets 0.8pts 1.46pts 0.50%

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Spreads may widen dependent on liquidity and market volatility

CMC Markets spreads are as of week ending 6th January 2012

IG Markets spreads are as of week ending 6th January 2012,

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TOUGH economic conditions have hitthe confidence of employers and job-seekers alike in recent months,recruitment company Hays said yes-terday, as it reported a drop in busi-ness in its home market and aslowdown in growth overseas.

Hays said net fees or gross profit rose eight per cent in its second quar-ter to the end of December, downfrom 15 per cent in the previous quar-ter.

Over the last two to three monthsthe economy and markets have gotmore uncertain, the discussions wehave with our clients on a daily basisare more cautious than they were twoor three months ago, finance direc-tor Paul Venables said. Then, bothour client base and as an industry wewere full steam ahead and now we arein a cautious position.

The firm, which makes 70 per centof its net fees overseas, said its UK banking and public sector marketscontinued to struggle, with net feesdropping by seven per cent overall.

Growth in mainland Europe andAsia Pacific helped offset this, albeit at

slower rates than in the first quarter.Fees in Europe, led by Germany and

France, grew by 20 per cent comparedto 34 per cent in its first quarter. AsiaPacific grew by 11 per cent comparedto 21 per cent last quarter.

Hays permanent recruitment mar-ket has been hit particularly hard byglobal conditions as potential jobseek-ers are unwilling to move positions insuch uncertain times.

Meanwhile a separate report byMarkit, KPMG and the Recruitmentand Employment Confederationshowed that permanent job place-ments fell for the third consecutivemonth in December, whilst tempo-rary work placements fell for the firsttime in two and a half years.

Hays hurt by

slowdown inglobal marketBYHARRY BANKS

RECRUITMENT


Westminster prompts rowover Scottish referendum

THE WESTMINSTER government hasraised the tension in the row withScottish nationalists by tellingEdinburgh it has no power to call areferendum on independence.

Coalition sources said a vote couldbe organised within 18 months withScotland Secretary Michael Mooresaying it would put an end to uncer-tainty.

Alex Salmond, the First Minister,

wants to hold a poll in late 2014 tomeet a SNP manifesto commitment

for a vote in the second half of theScottish parliamentary term.

He also wants to tap into the surgeof Scottish nationalism expected fromthe Commonwealth Games inGlasgow and the 700th anniversary ofthe Battle of Bannockburn.

Salmond said: This is the biggestdecision in Scotland for 300 years.This has to be a referendum which isbuilt in Scotland ... and then is deter-mined by the good sense of theScottish people.

Westminster wants to exclude from

the ballot paper a second question ongiving more powers to Holyrood.

RESTAURANT GROUP GETS OUT-OF-TOWN LIFT

FRANKIE & Bennysand Garfunkel owner

Restaurant Groupexpects to reportstrong sales for 2011 as

people shun high streetchains and opt for itsrestaurants located in

the suburbs, chief exec-utive Andrew Page(inset) said yesterday.

Restaurant Groupbucked the downbeatleisure environment byselling more than 39mmeals in 2011, up five

per cent from a yearago.

Picture: JasonAlden/CITY A.M.

Do you support the HS2 rail plans?

In associationwith

Apply to join today atwww.cityam.com/panel

This week we are asking members ofthe City A.M. Voice of the City panel,run with PoliticsHome.com, what theythink of the HS2 rail link now it hasbeen given the green light.

Will the high speed train linebetween London and the north of thecountry help or hinder the UKs econo-

my? Will it create jobs, or simply dam-age the countryside?

And should high speed rail be a pri-ority for the government at all, orshould they focus on other issues?

To answer these questions andmore, you can apply to join the panelat cityam.com/panel.

PoliticsHome.comPoliticsHome.com

ANALYSIS l Hays PLC

p


67

66

65

64

63

62.7011 Jan

BY PETER EDWARDS

POLITICS

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TAXPAYERS are set to foot a mam-moth bill for the new HS2 rail line,with the combined cost of construc-tion and operation estimated to be inexcess of 60bn.

Yet the government says the 33bnconstruction costs will be affordable,spread out over around 15 years.

Actual infrastructure costs would

only start once we have finishedbuilding Crossrail, said a spokesmanat the Department for Transport (DfT).

Taxpayers will bear the brunt ofthe costs, the DfT admitted, yet toldCity A.M. they were looking at spread-ing the burden. Its going to have amega impact in different cities, so were certainly looking to securefunding from those kind of places.

It may well be the case that otherorganisations may contribute to the

costs of HS2, including local authori-ties and private sector organisationswho may benefit from the opportu-nities opened up by the scheme, theHS2 group stated in its appraisal,released yesterday.

Passing the proposal remains alengthy procedure, with a hybrid bill taken to Parliament next year.The DfT promised to engage exten-sively with the communities andindividuals affected by the railway.

Bill for HS2 likely to fallmainly on UK taxpayersBY JULIAN HARRISTRANSPORT

Focus on high speed rail12 CITYA.M. 11 JANUARY 2012

MORE NEWSONLINE

www.cityam.com

ANALYSIS lThe high-speed rail link has been given the go-ahead

LichfieldTamworth

ColeshillSutton Coldfield

Birmingham

Kenilworth

Amersham

LON

Milton Keynes

Aylesbury

Northolt

Bicester

Banbury

Greatworth

Turweston

Tunnel fromChipping Wardento Aston Le Walls

Tunnel fromLittle Missendento the M25

Coventry

Warwick

Solihull

Milton Keynes NorthMark Lancaster

Conservative

AylesburyDavid Lidington

Conservative

Kenilworth & SouthamJeremy Wright

Conservative

North Warwickshire& Bedworth

Jeremy Wright

Conservative

Chesham & AmersCheryl Gillian

Conservative

Birmingham

Existing line to theChannel Tunnel

Euston

Paddington

St Pancras

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Xtryxrtrtxtrxyrty

JOHN CRIDLANDDirector general, CBIWithout new capaci-ty, by the 2020s themain west coast linewould be gummed up,and rail freight wouldbe likely to besqueezed out. We are

right to plan for theinfrastructure whichthe next generationwill need, and the biggest prize willcome from phase two. This will help tospread the benefits of future economicgrowth across the country.

FOR HS2 AGAINST HS2

NIGEL LAWSONFormer chancellorHS2 is a huge mis-take. The fact is, it is acrazy grandiose vanityproject which doesntstack up economicallyat all. We know fromexperience these proj-

ects always turn outto cost much more.There is a strong casefor improving the transport infrastruc-ture, particularly the railroad, but wecan do a far better job for far lessmoney on the existing rail structure.

ANDY STREETManaging director, JohnLewisHS2 will result inconsiderable benefitsand will complimentour strategy for jobsand growth, andstrengthen our posi-tion nationally andinternationally. Wewant HS2 not to beseen in isolation, and to be part of anintegrated transport system, locally,

nationally and internationally.

MATTHEW SINCLAIRDirector, Taxpayers AllianceThe economic casefor the new line justisnt credible and min-isters still arent beinghonest about the hid-den costs, or the con-sequences for townsgetting a worse serv-ice and passengerspaying higher faresunder their current plans. There hasnever been a proper consideration of

strategic alternatives.

COLIN STANBRIDGEChief executive, LCCIWe are pleased thatproposals we sup-ported regarding thedirect links to HS1and Heathrow havebeen taken on board.HS2 will increasecapacity on the railnetwork and oncephase two is completewill open up Europe to the north of theUK benefiting businesses both inLondon and across the country.

GRAEME LEACH,Director of policy, IoDBusinesses still needconvincing of themerits of the project.In all regions, IoDmembers think thatimprovements toexisting intercity serv-ices are more impor-tant to theirbusinesses. Its truethat you cant add capacity to currentlines indefinitely, but there are still a lotof uncertainties about the businesscase for HS2.

BORIS JOHNSONMayor of London

A spokesperson said:The Mayor hasalways believed therewas a case for invest-ing in a high speed railnetwork and he ispleased that the gov-ernment has listenedto the points he hasmade regarding itsimpact on the quality of life for thou-sands of residents in the capital. He willcontinue to press for the least possibledisruption along the route.

DOUGLAS MCWILLIAMSChief executive, CEBR

The main economiccase is dependent onbusiness time savings.By the mid 2030swhen HS2 comes in,high tech teleconfer-encing will makemuch business travelunnecessary. Thisseems a major wasteof money when spending is being cutand taxes raised. If the project goesahead it will be a triumph for spin overeconomic good sense.

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money a bank has to lodge with thestock exchange at the end of each

day to cover its overnight exposure,lectured ONeil to heckles from theaudience. But not once was it men-tioned in the script.

Banking at its best is an enormoushelp to society, soothed the newlycapitalist Irons, before running forthe door. I couldnt have bought myfirst house without a banker.

HAPPINESS INDEX YESTERDAYS story on stockbroker Wills & Cos residence at 33 QueenStreet (The Capitalist, 09 January)reminded one nostalgic fund manag-

er of the happy days he spent work-ing in the same building for ThorntonInvestment Management.

The funds happiness index between 1994 and 1997, recalls themole, was lifted by the dispropor-tionate amount of time he and hiscolleagues spent in The Vintry, thepub on the corner that has sincemoved further east to Cannon Street.

Sometimes we went five days aweek, rather worryingly, he tells The

Capitalist although no such concernsat the pubs owner Fullers, as theexcess of time was matched by gen-erous spends at the bar, mak-ing The Vintry the then mostprofitable pub, on a revenueper square foot basis, in the

brewers entire stable.Happy days indeed.

PARKLIFE THE CITY ofLondon is still wait-ing to receive aplanning applica-tion for theLondon River Parkd e v e l o p m e n t ,

which is currentlybeing redesigned after being sent back to thedrawing board by the

Port of London Authority. When developer Mace

does come up with the goods howev-er, The Capitalist hears the City of

London has some further demands ofits own before it will give the 60mscheme planning approval, as decidedat yesterdays meeting of the plan-ning and transportation committeeled by chairman Martin Farr.

Things for Mace and the schemesbackers Venus Group to bear in mindas they rethink the controversialplans include installing bridgeimpact protection for all relevantpiers, and carrying out six-monthlysurveys of the riverbed. Scour holes,if the erosion occurs at any of the

bridge structures, must be filled inin agreement with the City.

OFFICE POLITICS AS FORMER KPMG policy head NeilSherlock starts as Nick Cleggs adviserin London, across the Atlantic presi-dent Barack Obama has turned to an-ex-Citi banker for the latestappointment as his right-hand man.

Jack Lew, who ran CitigroupAlternative Investments in 2008, hasbeen named as Obamas new chief ofstaff, replacing ex-JP Morgan Chase

banker William Daley, who returnsto his hometown of Chicago after

just 361 days in the job.Lew, who has a reputation as a

quiet and bookish man, has been pro-moted from managing the WhiteHouse balance sheets in the office ofmanagement and budget a positionhe also held from 1998 to 2001 underthe Clinton administration.

RUGBY TACKLETHE PLAYERS schedule on the British& Irish Lions anniversary tour next

year is a busy one, says Lions chief exec-

utive John Feehan. They will need tobe well-turned out at all times.That box, at least, has been ticked

by shirtmaker Thomas Pink, part ofthe luxury Louis Vuitton

Moet Hennessy conglom-erate, which was yester-day unveiled as theofficial outfitter for the

Lions as they pre-pare to do their best Australia andHong Kong in2013. Itemsfrom the offi-cial Lionsrange (as pre-sented, left,

by formLion Richard

Hill) will be in Thomas P

stores fromOctober this year.

JEREMY IRONS SHORTED BY TRADERAT MARGIN CALLS RISKY PREMIERE

TO LEICESTER Square for the pre-miere of Margin Call, the film set inthe last days of an over-leveragedinvestment bank that has no rela-tion to any actual financial institu-tion that went to the wall in 2008.

Just as well because Jeremy Irons,who plays the banks pragmatic CEOJohn Tuld, would have had no time toshadow Lehmans former boss DickFuld for the role anyway, as the US

Embassy only approved his visa theday before filming started.

I wasnt able to meet anybodywho my character was loosely basedon, Irons told the premiere audi-ence in a Q&A with co-star PaulBettany after the screening. But Idid read The Big Short by MichaelLewis well, two-thirds, anyway.

If only he had finished it. As Ironsluck would have it, sitting in the

front row was Neil ONeil, a formerLondon Stock Exchange trader whodecided to test the Hollywood actorsgrasp of financial terms. Do youunderstand what a margin call is?demanded the City veteran, whostarted trading on Black Monday on19 October 1987. Margin call is a verytechnical term; as I saw it, this wasmore of a junk bond issue.

A margin call is the amount of

Jeremy Irons with his wife Sinad Cusack at the Margin Call premiere Picture: GETTY

Happy hours: The Vintry as it is today

The Capitalist14 CITYA.M. 11 JANUARY 2012

EDITED BY

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

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W E L LBrrr. Theres nothing quite like a brisk midmorning dip to get your heart rate going.Other health insurers might say, well done. But well give you more than a pat on the

back. From things that make staying healthy cheaper and easier like National Trust

passes and half-price gym memberships* to motivating rewards like 50% off our

Vodafone plans and discounts on luxury cruises. And well always ensure you have access

to the best possible medical care. So isnt it time you were rewarded for living life well?

If youre already covered elsewhere, see if you could save with our Well Rewarded

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Health Insurance Limited provide and manufacture benefits under the PruHealth product. Prudential Health Services Limited distributes and services the PruHealth product and issues the documentation. Companies registered in England and Wales. Registered offices atLaurence Pountney Hill, London EC4R 0HH. All authorised and regulated by the Financial Services Authority.

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FLYBES shares tumbled 20 per centyesterday after it warned its revenueswould fall short of targets.

The regional airline, which makes70 per cent of its revenues on UKdomestic flights, said conditions inBritain had deteriorated, leading to aneight per cent sales drop in its thirdquarter.

Flybes board spent the day reassur-ing investors about the firms strategy,after it admitted that sales over the

normally bumper Christmas periodhad been particularly disappointing.

Passenger numbers were in line with a year ago, but this still repre-sents a significant shortfall on rev-enue forecasts for the third quarter,Flybe said.

The warning, Flybes third suchalert in less than a year, sank its sharesto 55p. It now has a market cap of51.7m down 84 per cent from itsfloat value in December 2010.

Chief executive and chairman Jim

French said Flybes European ventureswould help the firm weather stormyconditions at home.

He said his groups move to cut win-ter flights and aggressively managecapacity and costs would also protectits position in the market.

I believe that maintaining volumesand growing market share at theexpense of planned yield increases wasthe correct decision to protect the longterm potential of Flybe, he said.

Analysts at Investec slashed theirforecasts, predicting a pre-tax loss of8.5m for the year.

Flybe sharesin a tailspinafter warning

MADE.COM, an online furnituregroup chaired by theLastminute.com co-founder BrentHoberman, yesterday announced ithad raised 6m in a second round offunding.

The New York-based investmentgroup Level Equity led the fund-rais-ing, supported by PROfoundersCapital, a London venture capital

group in which Hoberman is a part-ner.

Ning Li, the firms 29 year oldfounder, said he hoped the group

would democratise the designerfurniture market by offering prod-ucts at competitive prices.

Li declined to give any revenue orearnings figures but claimed thatthe business was running profitably.

He added that the furniture sec-tor wasnt dead, although con-sumers are buying more online.

Hobermans internet-onlyfurniture firm raises 6m

BYMARION DAKERS

TRANSPORT


BYDAVID HELLIERTECHNOLOGY

NEWS | IN BRIEF

Ross clinches Cosalt controlCarphone Warehouse founder DavidRoss has won his bid to take control of oilservices group Cosalt after a months-long rescue attempt. Cosalt said yester-day Ross, whose family have held a stakein Cosalt for three generations, passedthe 50 per cent threshold needed to

make his takeover offer unconditional.However, he fell short of the 90 per centcontrol he hoped for when he put his firstbid forward in November.

Mears has a robust order bookShares in social housing and careprovider Mears rose 3.2 per cent yester-day on news that contract successeshave pushed it almost all the way tomeeting the markets revenue expecta-tions for 2012. The company said itsorder book has risen to 2.8bn. Thestrong pipeline means that the companyhas booked 93 per cent of 2012s fore-cast revenues and 78 per cent of 2013s,and there could be more to come. Thegroup said there is immediate biddingopportunity for further contracts due tostart over the course of 2012 worth1.1bn. In total, the bid pipeline has avalue of more than 3bn.

Contracts stable at Balfour BeattyContractor Balfour Beatty, which earli-er this week won a 50m contract tomanage some of the Olympic legacyvenues, said yesterday its order bookhad remained stable in 2011 at over15m, as increases in its US construc-tion orders were offset by reductions inUK orders. In an update for the year to31 December the group said tradingwas in line with expectations, and thataverage net cash for the year wasaround 200m.

Brent Hoberman

chairs Made.com

Picture: Rex

ANALYSIS l Flybe Group PLC

p


70

65

60

55

50

55.0011 Jan

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PHILIPS Electronics warned of softfourth quarter profits yesterday, blaming weak European consumermarkets that are leading to chargesfor inventory it cannot shift.

Europes biggest consumer elec-tronics maker said it will report a fallin underlying fourth quarter earn-ings to about 500m (413m) from910m a year earlier.

The earnings report, due at theend of January, would also showslowing sales growth across its biggest divisions and unspecifiedcharges for products that are still sit-ting in its warehouses.

Our expected fourth-quarterfinancial results have been affected by the weakness in Europe, whichhas impacted our healthcare busi-ness, as well as pricing in our con-sumer lighting business, chiefexecutive Frans van Houten said.

Government austerity pro-grammes in Europe are squeezing

hospital budgets and some have putorders for the latest equipment onhold.

The latest warning follows a pre-diction in June of lower profits at thelighting division, its biggest along-side healthcare equipment, due to weak consumer demand in Europeand crisis-hit construction markets.That was just a few months after VanHouten took the helm.

Philips said yesterday that overallsales growth in the fourth quarter will probably come in at less thanfive per cent.

Philips profit

alert due toweak Europe

Olympus recovers some losses

JAPANS disgraced Olympus saw itsshares shoot up 20 per cent yesterday

on the news it is suing its presidentand 18 other executives, past and pres-ent, for up to $47m (30.4m) in com-pensation, as it struggles to recoverfrom one of the nation's worstaccounting scandals.

The maker of cameras and medicalequipment said yesterday all boardmembers subject to the lawsuit wouldquit in March or April, leaving it in the

extraordinary position for now of con-tinuing with its most senior executive,Shuichi Takayama, and five otherdirectors it is suing for mismanage-ment.

Olympus shares surged as much as28 per cent on the news, withinvestors betting the company's clean-up efforts would help it avoid a humil-iating delisting from the Tokyo StockExchange, in turn helping to ensure itstayed on bidders radars.

Investors also looked forward to theeventual renewal of the board and toOlympus finally drawing a line under

a $1.7bn accounting fraud which hasthrown a spotlight on Japan's reputa-tion for weak corporate governance.

BYHARRY BANKS

ELECTRONICS

BYHARRY BANKS

TECHNOLOGY

MAGAZINE, book and newspaperdistributor Smiths News said yester-day it was on track for strong profitgrowth in 2012, despite sales ofprint books disappointing overChristmas.

Revenue at the group haveincreased 1.9 per cent year-on-yearsince September, with sales boostedby the recent acquisition of Dawson

Books, Dawson Media Direct andDawson Marketing Services.

Smiths News said a good start tothe trading period was softened bymore difficult Christmas trading, with chief executive MaCashmore saying the consumershift to reading newspapers andmagazines on tablet devices.

Shares in the group rose on thenews, closing up 1.95 per cent at78.5p yesterday.

Smiths News on track forstrong growth in 2012MEDIA


ANALYSIS l Koninklijke Philips Electronics


16.50

16.25

16.00

15.75

15.50

15.25

15.00

14.75

14.9110 Jan

ANALYSIS l Olympus Corp

JPY

30 Dec 4 Jan 5 Jan 6 Jan 10 Jan

1,350

1,300

1,250

1,200

1,150

1,100

1,050

1,000

1,26310 Jan

ORANGE has released its first own-branded tablet, which is, of course,named after the largest island in theWindward group of the FrenchPolynesian Society Islands.

The Tahiti is manufactured byChinese telecoms giant Huawei astrategy that has already worked outquite nicely for Orange with its SanFransisco smartphone (which wasmade by ZTE).

If you look at the Tahiti straight on,you could be forgiven for mistaking itfor the Kindle Fire. Its seven inchscreen makes it small enough to fit inyour jacket pocket but its heftyweight ensures you wont want to.

Its a handsome enough device,with a brushed aluminium back thatlooks suspiciously familiar.

Under the hood it begins to showits limitations. It runs AndroidHoneycomb, a now superceded oper-ating system, and at times it strugglesto cope with even this, with verynoticeable frame-rate glitches if youhave a heavy-duty app running in thebackground.

The screen is a little dull comparedthe deep blacks and vibrant colours ofmore expensive devices and the cam-era is, frankly, horrible.

But you can forgive a lot for a rea-sonable price tag (although bear inmind a two year contract plus a 70outlay will set you back 670).

The Tahiti isnt aimed at heavytablet users who need powerfulprocessor speeds and enough storagefor their entire music collection. If you

just want something to pick up a fewtimes a year to take on holiday, youcould do worse than this.

ORANGE LAUNCHES NEW TABLET

BY STEVE DINNEEN

TELECOMS

KODAK announced a new businessstructure yesterday that divides itsfilm group into its two other businessunits as the once-iconic photographycompany tries to refocus as a digitalcompany to help fend off financial dif-ficulties.

Its US-listed shares jumped after thenews and closed up 50 per cent.

Separately, the company filed a law-suit against Apple, accusing it ofinfringing four patents related to dig-ital camera images. It also filed a relat-ed complaint with the USInternational Trade Commissionagainst Taiwans HTC.

Kodak said it will create two busi-ness segments from the currentthree. Phillip Faraci will head thecommercial segment, while LauraQuatela will head the consumer seg-ment. Both executives will have thetitle of co-president and chief operat-ing officer and will report to chair-man and chief executive AntonioPerez.

Kodak said it will make changes toits financial reporting starting in thefirst quarter to reflect the new struc-ture. It expects the design to reducecosts and increase productivity.

The company has been trying toraise cash either through new financ-ing or an asset sale.

Kodak unveilsnew structureand Apple spat

TECHNOLOGY

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THE VALUE of distressed debt and bankruptcy restructuring inEurope, the Middle East andAfrica (EMEA) fell by more than 40per cent last year, according tonew research.

The total value of completeddeals in the EMEA region hit$101.4bn (65.5m), down 40.4 percent on 2010, Thomson Reutersdata shows.

Rothschild topped the rankingsfor completed restructuring,

climbing one place in the tableafter working on deals with avalue of $33.02bn.

Investment bank HoulihanLokey came in second place with a value of $27.399bn, followed byGoldman Sachs, PwC and Moelis.The rest of the top ten was madeup by European investment bankLeonardo, as well as Blackstone,Lazard, Morgan Stanley andEvercore Partners.

The sector with the mostrestructuring by value was realestate, which made up 29 per centof deals in the EMEA region.

Houlihan Lokey moved up oneplace to the top of the global rank-ings for completed restructuring,with a value of $55.985bn.

Leon Saunders Calvert, head ofglobal deals at Thomson Reuters,said: Following the credit crisisand subsequent fallout of 2007,debt restructuring became a moreprominent source of mandates forthe advisory community.

Despite a significant drop inactivity in the last year, it is likelythat we will see increased vol-umes of deals in this space overthe next twelve months.

A P e a r l o f W i s d o m :C a l l T i g e r R e c r u i t m e n t

f o r a l l y o u r PA n e e d s

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BRITISH wealth managerRathbone Brothers defied thefinancial turmoil emanating fromthe Eurozone debt crisis during2011, managing a modest increasein the amount of money it runs asits sales countered falling markets.

Total funds under managementat the end of 2011 stood at15.8bn, up 1.4 per cent over theyear.

For comparison, the FTSE 100dropped 5.6 per cent over 2011, thefirm said yesterday.

The most closely watched bench-mark for the UKs private wealth

management sector, the APCIMSBalanced Index, dropped 2.8 percent over the same period.

But while investors will cheerthe firms resilience to the finan-cial crisis, the growth rate con-trasts sharply with the near 20 percent growth in funds under man-agement booked in 2010.

The firm warned 2012 will con-tinue to see tough economic head-winds but said it could see signs ofimprovement in the outlook.

Rathbones is cautiously opti-mistic about prospects for 2012...There is no doubt that the uncer-tainties over Europe persist but

this is balanced by indications thatthe economic environment is

showing small signs of improve-ment, it said.

Rathbones shares closed up 3.1per cent per cent yesterday at10.70. The company will publishannual results for 2011 on 21February.

Rathbones assets

grew through 2011BYHARRY BANKS

WEALTH MANAGEMENT

BY PETER EDWARDS

RESTRUCTURING

Rothschild leads the way inweak restructuring market

THE EUROPEAN market for flotationsslumped further in the final threemonths of last year, driven by turmoilin the single currency area, new datashows.

PwC said 78 initial public offerings(IPOs) raised 866m (715m), down 81per cent on the third quarter and 83per cent down year on year.

London remained at the centre ofthe European IPO market, however,raising 800m or 92 per cent of thevalue. The Polymetal listing led theway, raising 491m (421m).

Mark Hughes, capital markets part-ner at PwC, said: In 2011, the marketsfailed to ignite after the summer aspeople had hoped, due to the continu-ing economic uncertainty in Europeand especially in the Eurozone.

Cash raised in Hong Kong fell by 43

per cent, despite luxury brand firmssuch as Prada heading listing there.

PwC believes European exchanges will recover this year but said anupturn is more likely to come in thesecond half.

London on topbut IPO marketsinks in Europe

CAPITAL MARKETS

FORMER Goldman Sachs Grouptrader Morgan Szes (pictured)hedge fund Azentus Capital lost6.79 per cent in 2011, two sourceswith direct knowledge of the mat-ter said yesterday.

The Hong Kong-basedmulti-strategy hedge fund, which could invest globallybut mainly focuses on com-panies related to Asia, had ablockbuster start with about$1bn (646m) on 1 April last year, and now manages$1.9bn.

By comparison, theEurekahedge AsiaM u l t i - S t r a t e g y index was down4.9 per cent between April

and December last year, whileregional hedge funds lost aboutnine per cent during the period.

Started by Sze, former head ofGoldmans principal strategiesgroup, Azentus Capital was one ofthe biggest hedge funds to launchsince the onset of the credit crisis

and one of the most high-profile in Asia.

The hedge fund faced atough third quarter when

Asian shares as measured by the MSCI AC Asiaindex lost about 15 per

cent. Last year was in gen-eral a difficult year forhedge funds, as they were

rattled by theEuropean debt

crisis andongoing fearsof an econom-ic slowdown.

Former Goldmantrader Sze's Asia

hedge fund falls


NEWS | IN BRIEF

Sales soar for spread betterSpread betting firm London Capital Groupyesterday said it had benefitted from mar-ket volatility last year. Revenue rose 13 to39m, driven by a surge in client wins inthe second half. British spread betting hitrecord daily trade volumes with the aver-age number of trades per day increasing10.8 per cent to 33,042. In a trading state-ment, the firm said the institutional foreignexchange business and institutionalbroking businesses had shown strong rev-enue growth and the institutional foreignexchange arm increasing divisional profitby 10 per cent.

WebMD loses chief and scraps salePopular health information website WebMDHealth took itself off the auction block yes-terday as it warned investors of lower 2012profits as its advertisers in the drug industrypull back on spending. US-listed shares ofWebMD, in which activist investor CarlIcahn owns a nearly 10 per cent stake, tum-

bled 27.4 per cent on the news. WebMD,which had a market value of just over $2bnas of Monday, also said its chief executive,Wayne Gattinella, had resigned. AnthonyVuolo, currently chief financial officer andchief operating officer, will serve as interimchief exec.

Tesco shuts 12 stores in the StatesTesco, the worlds third-biggest retailer, ismothballing 12 stores at its loss-makingFresh & Easy business in the United Statesdue to weak local economies, it said yes-terday. The British group said it remainedcommitted to the chain, which it is aimingto lift to break even by the end of its 2012-13 financial year. Tesco said there was notenough growth in sales and customers atthe 12 stores in California, Arizona andNevada to justify keeping them open.Shore Capital analyst Clive Black said themove could push up his forecast full-yearloss of about 125m for the Fresh & Easybusiness.

BYHARRY BANKS

HEDGE FUNDS

Regulation fears kill offArbuthnot plans for JV

BANKING group Arbuthnot hasshelved plans for a consumer financejoint venture because of concerns overthe impact of red tape.

Arbuthnot announced plans in Julyfor a JV through Secure Trust Bank(STB), its listed subsidiary in which itretains a 75 per cent stake, as well asan unnamed partner.

It said yesterday: Despite exhaus-

tive efforts we have been unable toagree a structure which meets the reg-ulatory requirements and falls withinour risk appetite.

In the pre-close statement Arbuthnot said 2011 pre-tax profit

from continuing operations would bearound 5m after raising 16.5mthrough the sale of shares in STB.

STB said in a separate announce-ment that new lending volumes hadrisen by a third.

FINANCIAL SERVICES

ANALYSIS l Rathbone Brothers PLC

p


1,100

1,080

1,060

1,040

1,020

1,000

1,070.0010 Jan

STB boss PaulLynam has steeredthe bank toincreasedlending figures

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OIL explorer Cairn Energy yester-day said it would return 1.60 pershare in cash to investors as itactivated its plan to distribute$3.5bn (2.26bn) from the pro-ceeds of the part sale of its Indianoil business.

Cairn announced that share-holders could opt to receive thecash as income, capital or a com-bination of both.

Shareholders have been waitingfor the distribution since August2010, when Cairn first announcedplans to divest a 40 per cent stakein Cairn India to London-listedminer Vedanta Resources.

The firm said at that time it

would return substantial funds toshareholders upon completion ofthe sale.

The deal, which saw Vedantapay Cairn $5.5bn for the stake,was delayed for over a year due toa disagreement over royalty pay-ments, and finally completed inDecember.

The remainder of the proceedswill be used to pursue other mate-rial growth opportunities withthe aim of creating and realisingfurther value for shareholders inthe future, Cairn chief executiveSimon Thomson said in a state-ment.

Cairn said it had $4.7bn in cashat the end of December, leaving itwith $1.2bn to spend after the dis-tribution. The firm has substan-

tial acreage in Greenland and hasrecently said it is lining up explo-ration opportunities in Lebanon.

The cash return is conditionalupon shareholder approval at ameeting scheduled for 30 January.After the announcement its shareprice rose 3.3 per cent.

Cairn launches its$3.5bn payout planBY JOHN DUNNE

ENERGY

GOLD miner Centamin posted a10 per cent rise in fourth-quarteroutput yesterday, boosted by high-er production rates at its flagshipSukari project in Egypt, lifting itsshares 8.5 per cent.

Egypt-focused Centamin washit in the second quarter by localrestrictions on blasting, which,along with supply disruptions inthe first quarter, forced the com-pany to reduce its 2011 produc-

tion guidance to 200,000-210,000ounces.

The miner said it produced58,965 ounces in the fourth quar-ter of 2011, taking full-year goldproduction to 202,698 ounces.

The lift comes despite unrest inEgypt which is in the throes ofpolitical change.

Analysts said the update was apositive catalyst for a stock downover 40 per cent in value fromearly August, when the minerdetailed its weak second quarterand the political situation wasmore unstable.

Centamin will announce itsfull-year results on 30 January.

Centamin posts a 10pcrise in gold productionMINING

NEWS | IN BRIEF

Petroplus runs at half capacityThe two refineries owned by troubledSwiss group Petroplus that do not faceimmediate closure, out of the compa-ny's total of five, are currently runningat half capacity, trade sources claimedyesterday, The 240,000 barrel per dayCoryton plant in the UK - the compa-

ny's most complex site is running atroughly 45 per cent of capacity, whilethe 110,000 barrel per day Ingolstadtfacility in Germany is running ataround 55 per cent, the sources said.Petroplus was forced to shut its low-performing Petit Couronne refinery inFrance and Antwerp in Belgium afterall its credit lines were frozen in earlyJanuary.

Airbus outsources to KoreaAirbus is outsourcing to KoreanAerospace Industries some work fromits wing-assembly plant in Broughton,north Wales, drawing fire from unionswho said the move gave an unnecessarycompetitive advantage to foreign rivals.Airbus, the aircraft-making arm ofEurope's EADS, said yesterday KAI hadbeen awarded work producing wingpanels for the single-aisle A320. Finalassembly will remain at Broughton,

which is responsible for assembling thewings for all Airbus civil aircraft, andthe company said the 200 staff impact-ed by the decision would be redeployedwithin the plant.

SHARES in oil explorer Gulf KeystonePetroleum climbed 21 per cent yester-day after city analysts suggested thatthe Kurdistan-focused company is like-ly be the subject of a takeoverapproach.

The Aim-listed companys shareshave soared 26 per cent since thebeginning of 2012, as an exploration well it is drilling in Kurdistan hasthrown up positive results.

The Bermuda-based company lastmonth denied that it was in takeovertalks with Exxon Mobil, scotchingmarket rumours.

Shares had soared as much as 36 percent after suggestions that the USheavyweight oil firm was interested, before Gulf Keystone clarified that itwas not in discussions about a sale.

Gulf Keystone is a company thatattracts a lot of speculative attention,Peel Hunt analyst Werner Riding saidyesterday.

The potential in Kurdistan is vastand Gulf Keystone has first moveradvantage over a number of produc-tion sharing contracts there, so theyare very well placed. In time, I doexpect to see Gulf Keystone receive abid approach but clearly timing is themain uncertainty, Werner said.

In an announcement yesterday thefirm announced that it has reached anagreement with the KurdistanRegional Government (KRG).

The group has agreed that the KRGhas the right to take options take

options in both the Shaikan and Akri-Bijeel blocks.

The firms shares yesterday hit thehighest level since the company listedin 2004.

Takeover talk fuelsshare price boost

for Gulf KeystoneBYHARRY BANKS

ENERGY

Jubilant to spend $70mon Burmese gas project

LONDON-LISTED explorer JubilantEnergy said yesterday it expects toinitially invest between $70m (45m)and $80m on an onshore oil and gas

block it was recently awarded inBurma.

The India-focused energy compa-ny, whose chairman Shyam SunderBhartia is in talks with the Southeast

Asian country to buy a stake inanother block, hopes to finalise adecision in a few weeks.

Last week, Burma awarded 10onshore oil and gas blocks in itsbiggest energy tender in years, withAsian firms snapping up the lions

share. Jubilant won the PSC-1 pro-duction sharing block.

The country has proven gasreserves 11.8 trillion cubic feet at theend of 2010, according to BP.

BY JOHN DUNNE

ENERGY

Shyam Sunder

Bhartia hopes tocash in on gasblocks in Burma

ANALYSIS l Cairn Energy

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274

272

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262

270.4010 Jan

Anglo suedby Codelco

COPPER giant Codelco set out its law-suit against Anglo American yester-day, asking Chilean courts to enforceits disputed option to buy a 49 percent stake in the miners southChilean properties.

The move is the latest salvo in anincreasingly bitter legal row, afterAnglo last year announced it had solda 24.5 per cent stake in the Anglo American Sur assets to JapansMitsubishi.

Anglo said the sale halved Codelcosoption but denies any wrongdoing.

MINING

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CHINESE trade grew at its slowestpace for two years last month, offi-cial f igures revealed yesterday.

However, markets rose in the hopethat such weak figures wouldprompt the authorities to cut inter-est rates in an effort to stimulatedemand.

Chinas exports expanded by 13.4per cent in the year to December, theslowest growth since November 2009.

Once inflation is taken intoaccount, exports declined by 1.6 percent in the fourth quarter, comparedwith average growth of 3.5 per centfor the last eight quarters.

Import growth fell to a 16-monthlow of 11.8 per cent on the year, wellbelow economists expectations.

In real terms, quarterly growthstood at 10.4 per cent.

This is likely to be the result of re-stocking rather than an indication ofstrong domestic demand growth,said Diana Choyleva from LombardStreet Research.

With monetary conditionsextremely tight in the second half of2011, company profit margins andprofits decimated by fast rising input

costs and more generally the surge inwasteful investment after the globalfinancial crisis, it will be a total sur-prise if real GDP growth is not wellbelow trend.

Although growth may be down,Shanghais main stock index fin-ished the day up 1.65 per cent.

The coming policy easing is mostlikely to be focused on administrativemeasures, including cuts in banksrequired reserve ratio, continuedChoyleva.

Despite the slowing growth, thetotal value of imports and exportscombined stood at a record high of$3.6 trillion (2.32 trillion) in 2010.

However, the overall trade surplusshrank to a three-year low of $155bnfrom 2010s $183.1bn.

CONFIDENCE in American small busi-nesses has hit its highest level sincelast February as increasing numbersof firms looked to expand inDecember, according to data out yes-terday from the National Federationof Independent Business (NFIB).

The small business optimism indexrose by 1.8 points to 93.8.

The index has now gained 5.7points over the last four months, sug-

gesting an improving trend. A net balance of eight per cent

expect the economy to worsen animprovement on the previousmonths 12 per cent whilst a net bal-ance of 10 per cent believe now is agood time to expand, up from eightper cent a month earlier.

Given the small business sectoraccounts for half of the US economy,in terms of both output and workers,this is good news and suggests that

activity is gaining momentum, saidJames Knightly, economist at ING.

Nonetheless, the Eurozone situa-tion could yet drag the US down withit so caution is warranted.

However, NFIB warned the totalreading is still in recession territory.

Meanwhile wholesale inventoriesgrew by just 0.1 per cent inNovember, according to data out yes-terday from the CommerceDepartment.

Octobers figure was also reviseddown from 1.2 per cent to 1.6, which

could lead economists to cut backtheir fourth quarter GDP forecasts.

Small businesses grow more confidentas hopes increase for an upturn in US

SLUMPING industrial output pushedthe Mexican economy into its steep-est monthly decline in nearly two years in October, official statisticsagency INEGI revealed yesterday.

Latin Americas second largesteconomy contracted 0.6 per cent inOctober from September, the biggestdecline since January 2010 and morethan analysts expected.

Growth over the twelve monthsfrom October 2010 was lower than

forecast at 3.68 per cent.The data trails more recent indica-

tions of solid factory out put andretail sales that suggested the econo-my expanded nearly four per cent in2011. Still, slowing global growth isexpected to weigh on Mexico thisyear.

Activity in the industrial sectorslowed 0.54 per cent compared withthe prior month while agriculturalactivity fell 5.9 per cent and services

sector output remained unchanged,INEGI said.

Mexican GDP shrinks asindustrial output declines

MEXICAN ECONOMY

Weak exports

boost looserpolicy hopesBY TIMWALLACE

CHINESE ECONOMY

BY TIMWALLACE

US ECONOMY


GEITHNER WANTS CHINAS HELP ON IRAN

US Treasury secretary Tim Geithner was in China yesterday to meet Vice-Premier WangQishan and senior party members Xi Jinping and Li Keqiang. Geithner is there to pushChina to join the international sanctions imposed on Iran, in an effort to make the theo-cratic state drop its nuclear plans, and to discuss the strength of the yuan with the risingeconomic superpower. Picture: REX

NEWS | IN BRIEF

San Fran Fed wants fiscal boostTax and spending policies must bechanged to boost the US economy, JohnWilliams, president of the San FranciscoFed, said yesterday. Moves to control the

budget deficit are essential in the longrun but are damping the economy, notboosting it currently, he said. Williamspraised the steps the Fed has taken toloosen policy to stimulate demand, butwants to see higher state spending tocomplement the monetary loosening.Williams also pointed to the Eurozonecrisis as the main risk to the economythrough 2012 gridlock in the EU andWashington add to a sense of forebod-ing and said he expects unemploy-ment to stay above eight per cent into2013 and fall to around seven per centby the end of 2014. He was appointedlast spring and becomes a voting mem-ber of the rate-setting Federal OpenMarkets Committee this year.

Low cost of migrants to servicesImmigrants impose a disproportionatelylow cost on the UKs education, health,social and care services, according toresearch published yesterday by theNational Institute for Economic andSocial Research (NIESR). Their per capi-ta consumption of public services is lessthan the population as a whole, particu-larly for those on student visas and eco-nomic migrants from outside the EU.Although the research did not covertheir earnings, NIESR believes the rela-tive balance between what they costand what they contribute is firmlyweighted towards a significant positivenet contribution, both to the economy,and to public finances. In part,migrants use health and care servicesonly lightly because of their typicallyyoung age profile, NIESR said, andalthough they may have children in, orbring children to, the UK, migrants tendto come from English-speaking coun-tries, limiting the costs created.

HMV is finding it hard to match online value

ON Monday, media store HMV report-ed a fall in sales over the Christmasperiod, and said it remains concernedabout its ability to continue trading inits current form.

A look at YouGovs BrandIndex tellsan interesting story about the prob-lems the retailer faces. What we oftensee with companies that have finan-cial difficulties is that they have long

had problems with consumer percep-tion, and bump along with very low ornegative BrandIndex scores.

But HMV does not fit into thatmould. It is by no means a high scorer but it is in a perfectly respectableplace. Its Index score (a composite ofsix key measures) had been in the low+20s until it announced difficultiesthis time last year, which caused adrop into the mid-teens (generallyaround +17 but falling to +14 as its woe

this Christmas became known).The issue for HMV becomes clearer

when we compare it with retail giantAmazon. The online retailer is one ofBrandIndexs best performers, with an

Index score consistently in the high+50s, some 40 points ahead of HMV.If we turn our attention to Value,

such a key measure in a sector wherequality is largely a given, we see aneven bigger disparity with Amazon on+56 and HMV on +5.

So the BrandIndex data shows thatcustomers have a reasonable view ofHMV, but have a considerably better view of Amazon. A clear lesson forhigh street retailers that compete with

Amazon (or other online retailers) isthat being the best on the high streetis no longer enough. In order to sur-vive they need to find a way of compet-

ing (particularly on value) with theironline rivals as well.Stephan Shakespeare is the chief executive ofYouGov

BRANDINDEX

STEPHAN SHAKESPEARE

ANALYSIS l Index Chart

01/05/201101/08/201001/12/2009 01/01/2012

70.0

60.0

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ANALYSIS l Value Chart

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ANALYSIS l Chinese trade growth%

2008 2008 2009 2009 2010 2010 2011 2011Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4

20

15

10

5

-15

-10

-5

0

ImportsExports

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MKP Capital ManagementThe asset manager has hired AnthonySimpson as a managing director tofocus on European marketing.

Simpson was most recently co-headof business development at FinancialRisk Management, a London-basedfund of hedge funds.

RathboneNick Roe-Ely has been appoin

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