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FTSE 100 5,751.90 -30.66 DOW 12,675.75 -33.07 NASDAQ 2,786.64 -+2.47 /$ 1.56 unc / 1.20 unc /$ 1.30 unc

SHARES in Apple soared last nightafter strong demand for iPhones andiPads helped it to post record sales,smashing Wall Street profit forecasts.

The worlds most valuable technolo-gy firm reported a 73 per cent rise inquarterly revenue to $46.33bn, beatingthe average Wall Street analyst esti-mate of $38.91bn. It sent Apple stockup nine per cent in after-hours tradingon the Nasdaq.

Net profit rose 118 per cent to$13.06bn, or $13.87 a share. Analystshad expected Apple to earn $10.16 pershare for the period, the first quartersince the death of legendary co-

founder Steve Jobs. Apple sold 37m iPhones in theDecember quarter, double the salesseen this time last year, and more than

15m iPads. These monster figuresmean Apple shifted 92.94m phonesand 40.43m tablets in 2011.

Chief executive Tim Cook said:Apples momentum is incrediblystrong, and we have some amazingnew products in the pipeline.

The blockbuster results contrasted with another grim day for Yahoowhich reported a drop in net revenueand profit for the fourth quarter.

Seven days after co-founder Jerry Yang resigned from the companyYahoo reported a five per cent fall innet income to $296m for the threemonths to 31 December.

Chief executive Scott Thompson saidthe firm needs to do better and getinnovative products that matter into

the market.Final quarter net revenue, excludingfees that Yahoo shares with web part-ners, fell 2.9 per cent to $1.17bn.

BY PETER EDWARDS

TECHNOLOGYSIR MERVYN King last night paved the

way for yet another dose of quantita-tive easing, as the Bank of Englandflexes its muscles in a bid to stoke therecovery.

Speaking on the day that the gov-ernments debt was revealed to havepassed the 1 trillion mark, Kingwarned of dark clouds hanging overthe world economy.

Data due today will indicate if theUK economy shrank at the end of 2011.

Yet King has confidently predictedthat inflation will tumble this year,leaving scope for a boost to the latestquantitative easing programme.

There is scope for interest rates toremain low, he said in Brighton lastnight. And, if necessary, for furtherasset purchases, to prevent inflation

falling below the two per cent target.Since deciding to start a new phaseof easing in October, the Bank has been buying up a further 75bn in

BY JULIAN HARRISUK ECONOMY

www.cityam.com FREE

TREATS FORTOUGH TIMES

MCDONALDSGROWS SALES

AND PROFITS P4

BUSINESS WITH PERSONALITY

assets, taking the total splash to275bn.

The Monetary Policy Committees(MPC) arch-dove Adam Posen used aspeech on Monday night to encouragehis colleagues to consider even moreQE at this months meeting. Lastnights comments suggest King issinging from the same hymn sheet.

High debt levels in the UK andabroad make the road to recoveryarduous and long, King said. Thecontinuing need for banks,households and nationsto reduce their indebted-ness is part of the broad-er story of theunwinding of the imbal-ances in the world econo-my, he said.

The target of policy mustbe to ease the transition ofthe economy to the new

equilibrium, smoothing

its passage through troubled waters.King also used his speech to empha-

sise the need for a healthy and compet-itive banking system, while hitting outat a small elite of disproportionate-ly remunerated bankers.

Those taking decisions on remu-neration, in the financial sector andelsewhere, need to understand that amarket economy rests not just onincentives, but on the acceptance thatthe distribution of rewards is fair,King said, adding that support must be earned for market systems and

open international trade.Last night the International

Monetary Fund slashed its forecastfor global growth this year to 3.3

per cent, down from its previousprediction of four per cent

expansion. The UKs fore-cast was cut to 0.6

per cent, from an

earlier expecta-tion of 1.6 percent growth.

UK DEBT: P16

Certified Distribution

28/11/11 till 01/01/12 is 92,879

^~=`bl^=j=a~p=m~=U

Issue 1,556 Wednesday 25 January 2012

KING HINTSAT BILLIONSOF EXTRA QE

Sir Mervyn King warned ofdark clouds

Apple surges as rush

for iPhones hits record

ANALYSIS l Apple Inc

$

10.00Time 11.00 12.00 13.00 14.00 15.00 16.00

425

424

422

420Market close

457.1224 Jan

BRITISH PARENTS BOUGHT3BN OF TOYS IN 2011LEGO LEADS THE WAY P21

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News2 CITYA.M. 25 JANUARY 2012

Nadir boostedshares trialASIL Nadir used stolen money to boostthe share price of Polly PeckInternational, buy a string of luxuryproperties across Britain and indulgehis interest in horse racing, a courtheard yesterday.

The tycoon secretly bought shares inPPI, which pushed up the value of hisown wealth, the Old Bailey was told.Prosecutor Philip Shears, QC, said themain purpose of the dealings was tosupport the share price of PPI by creat-ing a false or misleading impression asto... the demand for such shares.

It was important to support thePPI share price because each rise of apenny added to the value of Nadirsstock by, for example, 950,000 inDecember 1989, Shears said.

Nadir, who is accused of plundering

150m between 1987 and 1990, usedstolen money towards the cost of buying properties including aRutland estate and a house in Mayfair.

He also put 20,000 of the moneyinto an account to fund his horserac-ing interests and 14,871 was laterpaid to Jenny Pitman Racing, set up bythe renowned trainer, it is alleged.

The jury was earlier told that PPI fellinto administration in October 1990with debts of 550m.

Nadir, 70, denies 13 specimencharges of theft, relating to 33.1mand $2.5m. The case continues.

BY PETER EDWARDS

COURTS

WATCHDOG TO PROTECT IRRATIONALINVESTORSInvestors cannot be counted on tomake rational choices so regulatorsneed to step into their footprintsand limit or ban the sale of potential-ly harmful products, the head of theUKs new consumer protection watch-dog said yesterday. In his first biginterview since starting work lastautumn, Martin Wheatley told theFinancial Times that the 2008 finan-cial crisis had fundamentallyreshaped regulators assumptionsabout the people they protected.

CAMERON INSISTS ON LIMIT TO RBSCHIEF HESTER BONUSDavid Cameron has insisted that thechief executive of Royal Bank ofScotland should receive a bonus of nomore than 1m this year half of last

years award as the UK prime minis-ter attempts to tighten his clamp

down on executive pay. StephenHesters pay, an annual lightning rod

for public and political criticism afterthe bank received a 45bn state bail-out during the crisis, has become acrucial litmus test for the govern-ments appetite for a public show-down over pay in recent weeks.

ALEXANDER CRACKS DOWN ON PUBLICSECTOR PAYDanny Alexander, the LiberalDemocrat Treasury chief secretary,has highlighted a crackdown on highpay in the public sector as he revealedhe had authorised top salaries to becut or frozen in 68 cases since thegeneral election. Mr Alexander hasthe power to sign off any new paydeal of more than 142,000 equiva-lent to the salary of the prime minis-ter. This was a vital deterrent to everhigher pay at the top of the publicsector, he told the Commons. Hesaid he had rejected many applica-

tions for pay packages over thethreshold.

OBAMA TAKES AIM AT RICHREPUBLICANS WITH BUFFETT RULEPresident Obama reclaimed the spot-light from the feuding RepublicanParty last night, launching his 2012re-election campaign with a plan fora new Buffett rule. The so-calledBuffett rule is based on an idea float-ed by the billionaire investor WarrenBuffett, who has repeatedly claimedthat he and his mega rich friendsshould be paying more in taxes.

HUAWEI HEADS FOR EAST ANGLIAThe Chinese group that beat Marconito win a key BT fibre-optics contracthas strengthened its foothold inBritain by buying a research laborato-ry in East Anglia. Huawei, one of the worlds largest makers of telecomsequipment, has paid $10m to take overthe Centre for Integrated Photonics,

which specialises in the transmissionof data over fibre-optic cables.

THE NUMBER OF HOUSE SALES FALL 11PER CENT IN 2011Sales of homes in the UK fell by 11pclast year, according to new figurespublished by HMRC. House sales fell by 11pc during 2011, with only890,000 completions one of the low-est total since records began in 1978.This was the lowest number of proper-ty sales since 2009, when theyslumped to a record low of 848,000.

UK COULD SAVE 4BN A YEAR ON EUREGIONAL AIDBritain could save over 4bn a year bytaking back control from theEuropean Union funding policy forthe countrys poorest regions. Over aseven-year period ending next year,Britain will have paid almost 30bninto the EUs structural and cohesionfunds targeted at Europes poorest

areas but will get back just under9bn.

BRITISH AIRWAYS HOLDS KEYS TOAMERICAN AIRLINESSome potential suitors for American Airlines are looking for support, orperhaps an investment, from British Airways, people familiar with thematter said. Private-equity firm TPGCapital, which is considering invest-ing in American Airlines parent AMR,has reached out to InternationalConsolidated Airlines Group SA, theholding company of British Airwaysand Iberia Lneas Areas de Espaa,some of the people said.

SOLAR STORM RE-ROUTES US FLIGHTSDelta Air Lines said yesterday that it was rerouting some transpolaflights between Asia and the US toavoid the impact of the largest solarstorm in almost a decade. Airlinesoccasionally reroute transpolar

flights as a precautionary measureduring big solar storms.

WHAT THE OTHER PAPERS SAY THIS MORNING

Why capital gains tax isnt too low

RARELY have I seen such a nauseatingUS presidential election. All the candi-dates are poor, especially on theRepublican side; but it is what passesfor debate that is truly pathetic.Particularly depressing has been thevitriol directed at Mitt Romney, one ofthe two top Republican candidates, forderiving much of his income throughcapital gains (which are taxed at a lowrate). There are lots of reasons whyRomney deserves to be criticised many of his policies are half-baked but the tax story isnt one of them.

At first sight, it sounds crazy and a

scandal that Romney faces a lower taxrate than his cleaner. In reality, howev-er, he probably doesnt, and this iswhy. Income comes either from capi-tal (in the form of dividends, interest,

rents or share buy-backs) or fromlabour (in the form of wages and bonuses). Companies as such dontreally exist; they are a legal fiction, amechanism by which capital andlabour income is created and distrib-uted. Only people exist; they eventual-ly receive all the income and pay allthe tax. All the nonsense about howmuch or how little companies pay intax is just that nonsense. Only theiremployees or owners can genuinely besaid to pay tax.

At the moment, people who owncapital (such as shares in a company)see their income taxed up to threetimes: first, corporation tax on profits;then tax on paid-out dividends; andthen tax on their capital gains if theydecide to sell the shares. People whosell their labour get taxed once viaincome tax and national insurance

(including employers NIs, which arein fact a hidden tax on workers).Everybody then gets taxed again whenthey spend the money on goods andservices (Vat, petrol duty) or some

assets (stamp duty).It is easy to see why capital gains taxis a form of triple taxation on capitalincome. Share prices are determinedby the discounted value of expectedfuture dividends; (taxed) capital gainsare thus driven by changes to (taxed)profits and (taxed) dividends. All ofthis often leads to a very high effectivetax rate on every pound of profit.

In Romneys case, it may look as ifhe is paying just 15 per cent tax oncapital gains and nothing else but inreality his shareholdings would beworth much more in the absence ofcorporation tax and dividend tax.Both these are ultimately hiddentaxes on him as a part owner of corpo-rations, even though they dont showup in his tax form. The US tax systemis hitting him and reducing his wealthin ways that are not obvious; econo-

mists call this the difference betweenthe actual incidence of a tax whobears its true burden and how it iscollected who hands over cash.

Take a theoretical UK company. In

extremis, its 100 of profit will betaxed at up to 26 per cent per cent; itsremaining 74 could be taxed at up to42.5 per cent if distributed as a divi-dend, leaving just 42; and then gainson the sale of the shares in the compa-ny (which capitalise future profits)will be taxed at 28 per cent. This is anextreme example; average corporationtax rates are lower. But it shows why somany countries tax capital gains lessthan employment income: it is to pre- vent the total tax rate on capitalincome being absurdly high.

It is a shame that those involved,including most unforgivably WarrenBuffett, ordinarily a genius in mattersfinancial but oddly an advocate ofhigher capital gains tax, either dontunderstand this, or pretend not to.

allister.heath@cityam.comFollow me on Twitter: @allisterheath

ITALIAN bank UniCredit is lookingto sell up to 25bn in coveredbonds, hot on the heels of its 7.5bnrights issue to shore up its capital base, according to regulatory fil-ings.

UniCredit said in a prospectusfiled with the Luxembourg StockExchange that the proceeds would be used for general funding pur-poses of the group (including fund-

ing of the mortgage loans businessof the group).

The bonds will be guaranteed byUniCredit OBG Srl, an Italian vehi-cle for covered bonds.

The bank is arranging the bondsthrough its London branch, the doc-uments show.

UniCredits deeply-discountedrights issue, conducted to bolster itscapital ratio, is due to close onFriday. It is regarded as a crucial testof investors confidence in theEuropean banking sector.

BYMARION DAKERS

BANKING

UniCredit plans bond saleUniCredit, led by Federico Ghizzoni, has put out a prospectus for25bn in covered bonds

NEWS | IN BRIEF

Quake prompts Japanese deficitJapan logged an annual trade deficit in2011 for the first time in 31 years,Ministry of Finance data showed yester-day, as last years earthquake and tsuna-mi, weak global demand and a strongyen battered exports. The trade deficitstood at 2.49 trillion yen (20.5bn) in

2011, the first annual deficit since 1980.In December, Japan's exports fell eightper cent from a year earlier, down for athird straight month. Imports rose 8.1per cent in December from a year earlier.

FSA removed Sir Fred criticismThe Financial Services Authorityremoved criticism of Sir Fred Goodwinsbanking experience from its final reportinto the failure of RBS, said Bill Knight,one of two experts reviewing the FSAsinquiry, in an appearance before theTreasury Select Committee yesterday.It is true that the references to Sir Fredwere changed following Maxwellisationbut in my judgement actually, it was afair change, he said, referring to a peri-od when individuals named in a reporthave a chance to respond. The FSAsreport was released in December afterhuge political pressure.

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

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 emaildistribution@cityam.com

Asil Nadir has denied13 specimen chargesof theft and is standingtrial at the Old Bailey

4th Floor, 33 Queen Street, London, EC4R 1BRTel: 020 3201 8900 Fax: 020 7248 2711Email: news@cityam.com 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

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News 3CITYA.M. 25 JANUARY 2012

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Euromoney FX Survey 2011

THE EUROZONE crisis has entered aperilous new phase and is devastat-ing confidence across the world, theInternational Monetary Fund (IMF)said yesterday as it slashed its growthforecasts.

Global economic growth is expect-ed to come in at 3.3 per cent this year,lower than the four per cent the IMFpredicted just a few months ago.

Its forecast for the Eurozone hasbeen slashed, falling from the 1.1 per

cent growth prediction it pencilledin back in September to a 0.6 per centcontraction.

The UK is now expected to grow by0.6 per cent faster than Germanys0.3 per cent, Frances 0.2 per cent andItalys 2.2 per cent recession but farslower than the 1.6 per cent the IMFforecast four months ago. Of all themajor economies only the US growthoutlook was unchanged, holdingfirm at 1.8 per cent.

The sharp cuts were prompted by

the escalating Eurozone crisis and itsimpact on the financial sector.

Bank funding all but dried up inthe Eurozone, in the last quarter of2011, the report said. Lending condi-tions moved sideways or deterioratedacross a number of advancedeconomies.

Low confidence over the economicsituation may lead to self-perpetuat-ing pessimism, the report warned.

It argued that fiscal adjustmentsin most advanced economies are cur-rently sufficient, and overdoingausterity will further undercut

activity, diminish popular supportfor adjustment and undermine mar-ket confidence.

Households will have to keepdeleveraging, the report said, whichmay dampen consumer demand foryears to come.

Nonetheless, the IMF believes thatcoordinated global action can formthe foundations of robust economicgrowth, with structural reforms tolabour and product markets boostingpotential output, it said.

IMF slashesits forecastsfor growth EUROPEAN stock markets lost groundyesterday as the shine came off a pos-sible deal with Greeces lenders.Leaders also threatened to remove

Hungarys EU funding over budgetaryworries, while France kept campaign-ing to tax financial transactions.

The FTSE 100 closed down 0.5 percent, having hit a six-month high onMonday, while in Paris the Cac 40 lost0.5 per cent and Germanys Dax fell0.3 per cent.

It is preferable to achieve an agree-ment [on Greek debt] in Januaryrather than February, said EUCommissioner Ollie Rehn, insistingyesterday that an agreement betweencreditors and the Greek governmentis very close.

Leaders also stepped up actionagainst Hungary, claiming the coun-

trys budget plans are not sufficientlyrestrained. Forecasts suggest its deficitwill be above three per cent of GDPnext year, and the EU is threatening tocut spending on the country if it doesnot address the issue.

Meanwhile French finance ministerFrancois Baroin asked the Danishpresidency of the EU to look moreclosely into appropriate levels at which a financial transaction taxcould be set.

EUROZONE NEWS FROM DAVOS: P6

Markets loweron Greece andHungary fears

BY TIMWALLACE

WORLD ECONOMY

EU ECONOMY

French banks ratings cutas state backing weakens

THREE major French banks saw theircredit ratings downgraded by ratings

agency Standard and Poors yester-day, less than two weeks after thecountry itself lost its coveted triple-Astatus.

The long-term counterparty creditratings of BPCE, Crdit AgricoleAgricole and Socit Gnrale wereall chopped from A plus to A.

This is a direct consequence ofthe methodology used by Standardand Poors, which builds into our rat-ing an element of systemic supportby the French state, whose own sov-

ereign rating has been recently cut,Socit Gnrale announced.

The agency is also likely to down-

grade Greeces ratings to selectivedefault when the country con-cludes its debt restructuring, though John Chambers, chairman ofStandard and Poors sovereign ratingcommittee claimed that will not nec-essarily destroy the credibility of theEuropean Union.

It is not a given that Greecesdefault would have a domino effectin the Eurozone, he said.

EUROZONE OUTPUT RECOVERS;SPAIN TOLD TO CUT DEFICIT: P14

EUROZONE

SocGen, run by Frdric Ouda, lost out from Frances downgrade Picture: REUTERS

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News4 CITYA.M. 25 JANUARY 2012

FAST food king McDonalds is to create2,500 jobs in Britain during 2012 afterbenefitting from a recession that haspushed customers towards its cheapmeals.

The American firm announced an11 per cent rise in net income for thelast three months of 2011 to $1.38bn(886m) on the back of a 10per cent increase in rev-enue to $6.82bn(4.37bn).

However sharesclosed down 2.18 percent to $98.75(63.29) in New Yorkas investors feared astrengthening USDollar would hit futureprofits from its keyEuropean market.

Deputy Prime MinisterNick Clegg visited aMcDonalds British

training centre in north London andsaid the jobs announcement was fan-tastic news from a company with anexcellent reputation.

The burger firm says it expects halfthe jobs to go to workers aged under25 and will take the companys totalUK workforce to around 90,000.

McDonalds has undergone arebrand that saw the introduction ofsome healthy options and caloriecounts on menus. But most of thesales growth has come from theSaver menu which offers smallermeals at reduced cost.

Jill McDonald (pictured left), chiefexecutive of McDonalds UK, said:Our continued emphasis on goodquality food at affordable prices,

and improving the experiencefor our customers and

our people, hasmeant that we are

able to continueto invest in the business ancreate jobs.

McDonalds todish up 2,500British jobsBY JAMESWATERSON

UK ECONOMY

Nick Clegg yesterday visited a McDonalds Hamburger University in East Finchley

A winning formula: treats for tough times YESTERDAY, the Liberal Democratdeputy Prime Minister Nick Cleggwas out posing for the cameras at aMcDonalds training facility in EastFinchley. Two or three years ago, sucha photo shoot would have beenunimaginable. The fast-food giant, a

bte noire of the chattering classes, was seen as politically toxic and blamed for everything from child-hood obesity to global warming. Howtimes have changed. As one of theonly companies creating large num-bers of jobs, politicians can no longerafford to snub this purveyor of burg-ers and fries.

McDonalds is one of those rarethings: a truly counter-cyclical stock.During the boom years, its star

waned as customers sought out moreexpensive alternatives; its stocktouched an eight-year-low in 2003.But as the recession has bitten, theMcDonalds offering of cheap treatshas struck a chord; since the start of2008, its stock price has jumped by 42

per cent. Unlike other firms toughingout the slump, it is growing its salesmore quickly in mature marketssuch as Europe and the US, wherelike-for-like sales jumped by 7.3 percent and 7.1 per cent respectively.

December sales were even moreimpressive, with like-for-like revenuesgrowing by 9.8 per cent in the US and10.1 per cent in Europe (whoever saidthe Continentals hated Big Macs?).Revenues in its sprawling Asia-Pacific

Middle East and Africa region grew ata slower rate of 6.5 per cent.

There is much rubbish writtenabout McDonalds transformationfrom fast food joint to salad-bar-cum-coffee-shop.

The real change is its so-called

fourth-tier menu, corporate speakfor smaller portions of high-calorietreats like a handful of chickennuggets or a mini beef burger. Suchproducts allow customers to indulgewhile spending less, and feeling lessguilty. Who can blame them?

david.crow@cityam.com

BOTTOMLINEAnalysis by David Crow

Not really. Regardless of the marketing, the calorie count on their salads andlighter foods are still high. I would avoid eating there on a regular basis.

McDonalds has been attempting to give itself a face-lift, certainly, but it is what itis. The produce cant be of the highest quality.

CRAIG PIERCE | OFFSHORE LIFTBOATS LLC

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CITY VIEWS: DO YOU THINK THE MCDONALDSIMAGE HAS IMPROVED?

STEVE BISHOP | ACCENTURE

Interviews by Raymond Doherty

I think that their outlets and marketing have improved dramatically over thelast two years. Health-wise it probably hasnt changed but their image has.

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PROTESTERS who took over a disusedUBS building in the City are set toleave after dropping their appealagainst a possession order.

The Occupy group, which set up thecamp in mid-November, is expected todepart within a matter of days. SunStreet Properties, a subsidiary of UBS,recently won a possession order on the

building. The activists left the dooropen to establishing another venue,however, when they said the Bank ofIdeas is temporarily closing its doors.

On Sunday the movement aban-

doned a takeover of Roman House inthe Barbican after just 24 hours.

OIL explorer Cairn Energy yesterdayshelved a plan to pay founder andchairman Sir Bill Gammell 2.5m inorder to quell a shareholder revolt.

The decision was announced amidthe wider furore over executive pay,

which has led business secretary VinceCable to draw up plans to tackle per-ceived boardroom excess.

Gammells planned payment wasshot down in flames after sharehold-ers of the FTSE 100 company com-plained that they not been consultedfully over the sum, according to insid-ers. The move heads off a showdownat next weeks planned shareholdersmeeting.

The 2.5m would have been a sharebonus, with a further 1m being paidto a charity of Gammells choice out ofcompany coffers. The Association ofBritish Insurers had issued a Red Topnotices flagging up its concernsabout Gammells bonus.

Legal & General, one of Cairnsbiggest shareholders with a 4.87 percent stake, said after the meeting: Wehave been speaking to the companyabout their proposed share award and

we are pleased that they, havingreflected on their shareholders con-cerns, have decided to think again.

Gammell, the former Scotlandrugby international steered throughthe 3.5bn sale of the groups Indian

business Vedanta last year a deal which was being used to justify his2.5m windfall.

Cairn ditches

boss windfallafter revolt

EUROPEAN commissioner MichelBarnier offered some hope thatDeutsche Boerses merger with NYSEEuronext will be given the go-ahead

by competition regulators.Barnier placed a waiting reserve

on the issue at a Commission meet-ing yesterday, meaning he could alterany recommendation by the EUantitrust authorities on the $17bn tie-in.

However, sources familiar with thematter said Barnier would not objectif the EU does block the deal.

The college of commissioners willvote on the merger on 1 February.

Barnier lifelinefor NYSE dealUBS protestersdrop court bid

BY JOHN DUNNE

ENERGY

POLITICS

M&A

THE OWNER of the Coryton oil refin-ery, Petroplus, yesterday filed for

bankruptcy, putting 1,000 jobs atrisk as well as petrol supplies in t hesouth east.

The refinery in Essex, which sup-plies 20 per cent of fuel for southeast England, halted sales and toldstaff it was not sure when supplies

would restart. The Swiss based firm

has defaulted on 1.12bn of debt.East of England MEP RichardHowitt said: Supplies acrossLondon and the South East could beaffected by this. The union Unitesaid the Swiss owners and govern-ment needed to take joint action.

A site worker and union officialsaid yesterday a decision on whetherto close Coryton is expected at the

weekend.The union official, who declined

to be named, said crude stocked atthe site would not last much longerthan three to four days.

In another blow to the UKs fuelsupply, more than 80 fuel tankerdrivers at the ConocoPhillips oilrefinery at South Killingholme inNorth Lincolnshire began a week-long strike yesterday. They claimtheir employer, haulage firm

Wincanton, is trying to reduce theirpay by as much as a fifth.

Petrol supply under threat asPetroplus files for insolvencyENERGY

News6 CITYA.M. 25 JANUARY 2012

ANALYSIS l Cairn Energy PLC

p

18 Jan 19 Jan 20 Jan 23Jan 24 Jan

305

300

295

290

285

282.4024 Jan

Sir Bill Gammellwill not receive a2.5m payout

Picture: REUTERS

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Focus on Davos8 CITYA.M. 25 JANUARY 2012

WE CAN ONLY SOLVETHE CHALLENGE OFPENSIONS TOGETHER

ANDREW MOSSGROUP CHIEF EXECUTIVE, AVIVA

O

NE of the great achievements of the post-war years hasbeen the big rise in life expectancy. People are healthier and

can enjoy longer lives, seeing their grandchildren and evengreat grandchildren growing up. This is to be celebrated.

But this achievement also poses a big challenge: paying for thegrowing cost of retirement care and pensions with fewer peo-ple in the workforce paying taxes, and with more and more peo-ple living much longer.

Part of the appeal of Davos is the way in which governmentofficials and business leaders are brought together. And that ishow our pensions challenge is going to have to be met too.Neither side can fix this on its own. Governments are strappedfor cash, and cannot make uncosted commitments. Business hasa range of stakeholders to serve. As a major insurer, whose pur-pose is to provide prosperity and peace of mind for our 44mcustomers, we have a role to play in tackling the problem. Butwe cannot do this on our own either.

In the UK the retirement landscape has changed. The currentframework dates back to when many people had final salarycompany pension schemes. This is no longer the case. More peo-ple have a number of smaller pension pots built up with differentemployers over the years. We have been arguing for some timethat our pensions market needs to be made simpler and moretransparent, encouraging savers to shop around for better deals,and allowing them to combine these pension pots efficiently. Themarket needs to evolve to meet the needs of people who canexpect to live longer but who have not been able to save asmuch as they would like.

And that is going to be a hard trick to pull off today, wheneveryones finances have been affected by the economic down-turn. Simply telling people to save more is not enough. We cando more to kick-start the savings habit in people from a youngage, and get people to keep the habit over a lifetime. Weve beencalling for annual pension statements for all citizens in the EU bringing together forecasted retirement income from state,occupational and private to help people see what they stand toget in retirement and plan better for the future. But the key tomaking this a reality is partnership we really are all in ittogether.

GREECE is still not prepared to acceptwhat its private creditors called theirfinal offer to write down the valueof its debt, the Institute forInternational Finance (IIF) toldreporters in Switzerland yesterday.

Setting the scene for a week of behind-the-scenes wrangling withEuropean government officials asthey gather in Davos, IIF chief CharlesDallara flew to Zurich to give anupdate on the troubled negotiations

between Athens and its privatedebtholders.

The latter, said Dallara, will notallow the value of their bonds to be

written down potentially by up to70 per cent unless the new lower-

value certificates they get in returnpay an interest rate of at least fourper cent.

Greece is refusing to move up from3.5 per cent. It's important that allparties realise how much we have atstake,said Dallara, who is represent-ing 32 different creditors including

various banks and hedge funds although it is not clear what propor-tion of Greeces debt they hold.

Simon Evenett, a former WorldBank official, said that European

politicians are likely to be lobbied allweek about the issue in Davos.

Expect banks to collectively warnGermany and France against inflict-ing too many losses on holders ofGreek government debt, saidEvenett. But German minister

Wolfgang Schaeuble has dismissedthe IIFs comments as bazaar hag-gling.

With ratings agencies suggestingthat even a voluntary deal would be

viewed as a default due to the lossesincurred and doubts over whetherany deal can be enough, many ana-lysts think the possibility of a hardGreek default is rising.

Greece stubborn over lendersBY JULIET SAMUEL

EUROZONE

FROM a 1967 drugs conviction to a2003 knighthood bestowed by theQueen, Mick Jaggers transformationfrom rocknroll rebel to darling ofthe British establishment alwaysseemed unlikely.

And Sir Mick stayed true to hisupstart reputation yesterday by scrap-ping an appearance at DavidCamerons tea party to promoteBritain at Davos.

The Rolling Stones frontman, whowas recommended for a knighthood

by Tony Blair, said his plannedappearance was being used as apolitical football.

Sir Mick had been scheduled toappear at an eventorganised byCameron to pro-mote Britain dur-ing the gatheringof the worldsrichest and mostpowerful people inDavos this week.

Mayor of

L o n d o nB o r i s

Johnson is expected toattend the event.

Sir Micks refusal totake part is a blow for

Cameron, who had earlierin the day welcomed his

involvement.Jagger said in a statement:

I now find myself being usedas a political football andthere has been a lot of com-

ment about my political alle-giances which are inaccurate. Ithink its best I decline the invi-

tation to the key event and cur-tail my visit.

BYHARRY BANKS

WORLD ECONOMY

CONFIDENCE among chief executiveshas taken a battering in the past year,

with just forty per cent of company bosses in Europe strongly believingthat they will bring in any revenuegrowth this year, according toPricewaterhouseCoopers annual CEOsurvey published in Davos yesterday.

The results are worst for WesternEurope, where a mere quarter of the1,258 CEOs asked described them-selves as very confident about

boosting sales at all. And chief executives views are

even gloomier about the global econ-omy than their own companies. Just15 per cent of those asked said theeconomy will improve over the next

year, whereas 45 per cent think it willcontinue to spiral downwards.

The optimism that had been building cautiously since 2008 has begun to recede, said PwCs globalchairman Dennis Nally. Even thefast-growing economies of Asia andLatin America are not immune.

Stoking worries that the global

economys new growth engine couldalso stall, there was a sharp drop inChinese and Indian optimism. Thenumber of Chinese CEOs very confi-dent of revenue growth decreased to51 per cent from 72 per cent last year the worst decline in Asia Pacific.

Sentiment among Indian CEOs hasdeclined even more dramatically toits lowest level for six years. While the

vast majority (88 per cent) were veryconfident they would see growth intheir top line in 2010, only 55 per centsaid the same in 2011.

Shaky growth prospects topped thelist of worries with 80 per cent cit-

ing it as a major concern followed by the fear of how governmentsmight respond to fiscal crisis, whichtwo thirds said was keeping themawake.

The possibility of ongoing govern-ment assaults on business is also asource of concern. Regulation (56 percent) and tax rises (55 per cent) werelisted by more than half as threats tothe health of their company.

The data from the annual survey was unveiled in at the WorldEconomic Forum at PwCs annualthought cafe cocktail party.

Gloomy startat Davos forchief execs

@ArrianaHuff 5.41pmHelicopter from Munich to @Davos landed 100kmaway because of snow. In a car on the way to Davosnow. #FirstWorldProblems

@SarahBrownUK10.10pmMy Davos plan is *pester power* for #education-forall, and slip sliding down the frozen Promenadefor my version of pentathlon training

@DavidJones_IG 6.12pmThat snow in Davos is holding up quite well consider-ing all the hot air it must get subjected to at this time ofyear. #wef

@DavosSpouse 9.11amApparently everyone's convinced everyone else hasbeen allocated a better #wef #davos hotel. Perhaps#occupywef has got the right idea.

DAVOS TWEETS

BY JULIET SAMUEL

DAVOS 2012

Better pensions through partnership Picture: REX

No sympathy for the Conservatives:Mick Jagger pulls out of PMs event

8/3/2019 Cityam 2012-01-25

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Focus on Davos 9CITYA.M. 25 JANUARY 2012

ABOVE: A mem-ber of Swiss spe-cial police forcesobserves from theroof of a hotelcovered in snow.

MAIN PICTURE:WEF Founderand executivechairman KlausSchwab attends abriefing session

on the eve of theopening of theannual meetingof the WorldEconomic Forum

Pictures:REUTERS

WHATS ON IN DAVOS TODAY

lThe World Economic Forum AnnualMeeting 2011 opened yesterday and runsuntil Sunday 30 January.

lMayor of London BorisJohnson is due to deliver akeynote speech today onthe economic benefits ofthe 2012 OlympicGames.

lAnd Boris will joinchancellor GeorgeOsborne at a lunch withUK chief executives andpublic figures

lEarly birds can look forward tocroissants with Peter Mandelson, atWPPs chief Martin Sorrells breakfast atthe Seehof Hotel

lTIME magazine is hosting a debate onthe future of capitalism, with participantsincluding Bank of Americas BrianMoynihan and Sharan Burrow, general

secretary of the International Trade UnionConfederation

lAt noon, Clifford Chance hosts a heavilysubscribed discussion on "What next forEurope?" Speakers include senior execu-tives and advisers to Standard Chartered,BNP Paribas and Deutsche Bank as well

as Clifford Chance partner MichaelBray.

lAll eyes will be onGerman ChancellorAngela Merkel at 5pm,when she is due to deliv-er the formal openingaddress to the forum,likely to cover the crisis

of sovereign debt, bail-outs and Greek bondholder

losses.

lThe chiefs of Airbus, Alcoa, Cisco,NYSE Euronext and BCG are among thespeakers in a discussion about the globalbusiness context.

lEvents can be watched live online:http://www.livestream.com/worldeco-nomicforum

lThe official Twitter feed is @Davos#WEF.

EVENTS

In

association

with

Its all thought cafes, fusion cocktails and slippery slopes on the opening day of the World EconomicForum despite a spot of helicopter trouble for one or two unfortunate delegates

THERES little news a skiier likesbetter than to hear that a bumpercrop of snow awaits their arrival.Unfortunately, for those morefocused on making a grandimpression as they swoop intotown aboard the classic Davoschariot a personal helicopter the weather has its inconvenienc-es.

The snow was simply too muchfor some of the helicopters ferry-ing their precious cargo into town yesterday. Perturbed executivesand their entourages suffered theindignity of landing 100km awayfrom their usual helipad and being hassled into an ill-suited

BMW to sit in traffic on Davosidyllic promenade.Naturally, Switzerlands trains

still run on time, but their fittedski racks lie empty, the slopedrooves they pass groan undertheir heavy load and Davos skilifts dangle senselessly, passenger-less, as the elite hordes crowdinside to listen to this or that eco-nomic prognostication.

Theres snow accounting fortastes.

OTHERWISE ENGAGED You might think it would take afleet of tanks to keep a bank chiefaway from a series of all-nightdrinks parties offering rarechances to schmooze regulatorsand politicians. Not so in Davos.The great and good of the troubledlending world have been highly

selective in their appearances at

this years events. While some, like Citigroups

Vikram Pandit, are taking centre-stage, others are notable by theirabsence.

Perhaps little wonder that theUKs state-owned banks are notrepresented. RBSs Stephen Hester no fan of the high-profile cham-pagne-studded media encounter and recently recovered AntonioHorta-Osorio of Lloyds are stayingat home to spend more time withtheir balance sheets. RichardBranson, figurehead of the newly beefed up Virgin Money, has alsotaken the unusual decision to keepaway although were not sure it

was in aid of an austerity drive.And you can forgive UniCreditsFederico Ghizzoni for not showinghis face, being otherwise engaged with a difficult capital-raising(although Davos Diary does hearthat some of his underwriters havebeen hitting the ski slopes Dontworry, it's all downhill from here,folks!).

The contrast could hardly besharper with Europes emergingmarkets-focused behemoths: notfor StanChart and HSBC theshrinking violet act. Not only arethey out in force, their nightcapdrinks parties will go head to headon Friday, forcing guests to decide between Asian fusion cocktailsand a fireside chat withDouglas Flint at the top of amountain.

Lifes full of difficult choic-

es.

WHATEVER WILL BE, PWCOne of Davos Diarys favourite bizarre haunts, thePricewaterhouseCoopers ThoughtCafe, had its big day yesterday,hosting the launch of PwCs CEOsurvey.

The cafe, a regular BelvedereHotel installation, was in usualswanky form: think white bars, white chairs, white nylon, whiteorchids and orange jellybeans.

Suave electronic tracks werepiped through the sound system asguests were told that there is ahigh level of uncertainty amongcompany bosses. But later on it wastime for a change of mood: the

track of choice? Que sera sera.Well, its not quite a business planyou can charge for, but perhaps itsthe advice some over-stressed exec-utives need.

DAVOS DIARY by Juliet Samuel in Davos

8/3/2019 Cityam 2012-01-25

10/36

CREDIT Suisse, Switzerlands second-largest bank, is to pay a portion of 2011

bonuses for its top executives in riskyassets in an extension of a programmethe company first used three yearsago, according to an internal memo.

Credit Suisse said its new bonus pro-gramme would help meet bonusexpectations for its staff while allow-ing the bank to reduce its holdings ofrisky assets.

We believe it is a good instrumentthat will support both the firmsstrategic transition by helping reducerisk and pay a good return for employ-ees in most scenarios, the CreditSuisse memo said.

This is the second time the bank hastransferred risky assets from its bal-

ance sheet to its bankers via thedeferred portion of their bonus, allow-ing the bank to free up capital.

The new instrument is known asPAF2, a throwback to the banks origi-nal Partner Asset Facility launchedthree years ago, which linked most topexecutive bonuses to some $5bn(3.2bn) in illiquid assets that had tum-

bled in value in the credit crisis.The PAF2, which vests in March and

matures in nine years will pay a fiveper cent coupon for Swiss franc hold-ers and 6.5 per cent in US dollars forholders elsewhere.

Credit Suissebonuses paidin risk assetsBYHARRY BANKS

REMUNERATION

HSBC has sold its banking opera-tions in Costa Rica, El Salvador andHonduras to Colombias BancoDavivienda for $801m (513m), con-tinuing its retreat from countries

where it lacks scale.HSBC said the sale marks its 18th

deal in the past year, with the com-

bined deals releasing more than$48bn of risk-weighted assets.

The business being sold had 136 branches, with assets of about$4.3bn and loans of $2.5bn.

Stuart Gulliver, HSBC chief execu-tive, is reshaping the bank to cutannual costs by $3.5bn, lift prof-itability and sharpen its focus on

Asia.Davivienda, Colombias third-

largest bank, will pay cash for the

deal, which is expected to completein the fourth quarter of this year.

HSBC sells Latin American unitsto Colombian bank for $800m

BANKING

EU RULES on the central clearing ofderivatives will no longer seek to cutBritain out of the industry, Treasuryofficials confirmed yesterday.

Finance ministers met to discussdraft legislation which seeks to pushderivatives trading through centralcounterparties (CCPs) on the basis thatit reduces the risk of one market par-ticipants collapse sparking the down-

fall of others, and thus hitting thewhole financial system.For many categories of derivatives,

these CCPs are set to replace the cur-rent over the counter (OTC) trading.

Earlier it had been proposed thatclearing houses processing euro-denominated derivatives would haveto be located within the Eurozone.

This measure has been fought byBritain as it would hit the City, and isnow understood to be off the table.

Ministers also discussed the voting

process when a country disputes theestablishment of a CCP in anothermember state. The authorisation of aCCP can be challenged and rejected, bya unanimous vote, excluding thehome nation which in which theCCP is being established.

Alternatively a two-thirds vote willmean a case is decided at the EuropeanSecurities and Markets Authority.

The agreement ensures the singlemarket is properly protected, a

Treasury spokesman told City A.M.

City no longer threatened byEU plan to snatch derivativesBY TIMWALLACE

FINANCIAL REGULATION

News10 CITYA.M. 25 JANUARY 2012

Credit Suisse, led by Brady Dougan, will pay some bonuses in risky assets Picture: REUTERS

ANALYSIS l Credit Suisse Group AG

CHF

18 Jan 19 Jan 20 Jan 23Jan 24 Jan

25.00

24.00

23.00

22.00

24.4824 Jan

8/3/2019 Cityam 2012-01-25

11/36

8/3/2019 Cityam 2012-01-25

12/36

News12 CITYA.M. 25 JANUARY 2012

FRANCIS Salway, the long-standingchief executive of Land Securities, isstepping down after eight years at thehelm of Britains largest commercialproperty company,

The industry veteran will leave on31 March at the end of the financialyear and will hand the reins to RobNoel, managing director of the firmsLondon portfolio.

Salway said he was leaving after awonderful eight years at the helmto fulfil my plan to take on a newchallenge for the balance of mycareer.

When I took on the role of chiefexecutive in 2004 and first stood upin front of our staff there were threethings I wanted to achieve. To leadthe sector on customer service, todeliver great buildings and to deliverconsistently good property returns,Salway told City A.M.

On those three things LandSecurities is seen as having been atthe forefront, he said.

The news came alongside a third-quarter trading statement, marking

steady progress in lettings at its shop-ping centres and office blocks andincreased occupancy rates across itsits portfolio.

Land Securities conceded, however,that letting transactions were takinglonger to execute, as expected in anuncertain economic environment.

The group also secured a new1.05bn credit facility, which thecompany said would help it buy prop-erty being offloaded by banks.

Overall, I think good executionoperationally within the businessand further strengthening over thebalance sheet puts us in a strong posi-tion, Salway said.

Shares slipped 1.4 per cent to 682p.

Salway steps

down as bossof Land Secs

THIS OFFER APPLIES TO ELIGIBLE JAGUAR APPROVED USED CARS SOLD BETWEEN 28 JANUARY 5 FEBRUARY 2012. ALL VEHICLES

MUST BE REGISTERED BY THE CUSTOMER AT THE DEALERSHIP FROM WHICH THE VEHICLE WAS PURCHASED. THE FREE SERVICING

HANDOVER CERTIFICATE IS ONLY VALID AT THE DEALERSHIP FROM WHICH THE VEHICLE WAS PURCHASED. THE CERTIFICATE SHOULD BE

PRESENTED TO THE DEALERSHIP AT TIME OF BOOKING THE VEHICLE IN FOR A SERVICE IN ORDER TO QUALIFY FOR THE TWO YEARS FREE

SERVICE. THE OFFER IS ONLY AVAILABLE AT THE POINT OF REGISTRATION OF THE VEHICLE IN THE CUSTOMERS NAME. THE OFFER IS FREE

TO ALL CUSTOMERS. THE FREE SERVICING COVERS SCHEDULED SERVICING AND ASSOCIATED PARTS (OILS, HYDRAULIC FLUIDS, SEALS,

FILTERS, ELEMENTS AND ANTIFREEZE) AND LABOUR FOR TWO YEARS FROM THE DATE OF INVOICE UP TO A MAXIMUM OF TWO SERVICES.

SCHEDULED SERVICING INTERVALS ARE DETAILED IN THE VEHICLE HANDBOOK. EXCLUDES WEAR AND TEAR ITEMS SUCH AS SHOCK

ABSORBERS, EXHAUST SYSTEMS, TYRES, WINDSCREENS, WINDOWS, ENGINES, TRANSMISSIONS, ELECTRONICS, COST OF FITTING OR

REPAIRING ACCESSORIES AND ANY FORM OF ACCIDENT DAMAGE AND NON-ROUTINE SERVICING WORK, PARTS OR LABOUR. THE SERVICE

PACKAGE IS NOT A WARRANTY PACKAGE. THE FREE SERVICE OFFER IS ONLY VALID TO THE CUSTOMER INDICATED ON THE INVOICE, FOR

THE VEHICLE PURCHASED. THIS OFFER IS NOT TRANSFERABLE.

Flexible finance options are also available.

VISIT USED.JAGUAR.CO.UK TO SEARCH OURAPPROVED USED STOCK

WAITING FOR THE

PERFECT TIME TO BUY?

ITS ARRIVED.APPROVED USED JAGUAR DEALER EVENT28 JANUARY 5 FEBRUARY 2012

BYKASMIRA JEFFORD

PROPERTY

Land SecuritiesOne New Changeretail centreopened in 2010

SALWAYS eight-year tenure at thehelm of the UKs largest propertycompany may have been a long onebut his journey to the top was swift.

In 2000, Salway quit his job asinvestment director at Standard Lifeto join Land Securities, as head ofasset management. Four years laterand several roles in between, he

took over from Ian Henderson as

chief executive.Salway, 54, said he never want tostay until normal retirement age. Iwanted something else, he said.

It is understandable for the chief who has led the group through arollercoaster ride of boom and bust.Salway came under fire in 2008when the firm posted a 4.8bn loss,but the City agrees he is leav-ing the firm in good shape.

Property sector veteranbows out on high note

BYKASMIRA JEFFORD

PROPERTY

FRANCIS SALWAY

ANALYSIS l Land Securities Group

p

18 Jan 19 Jan 20 Jan 23 Jan 24 Jan

710

690

670

650

682.0024 Jan

ANALYST VIEWS: WERE LAND SECS RESULTSIN LINE WITH EXPECTATIONS? Interviews by Kasmira Jefford

ALISON WATSON | LIBERUM CAPITAL

The statement reads much as expected with the only major news herethat Robert Noel is to succeed Francis Salway as chief executive. We believe thatthe news will be well received by shareholders.

KEITH CRAWFORD | PEEL HUNT

Robust trading across the portfolio: low vacancy rates, units in administrationunder control, leases signed in line with estimated rental values and progress on devel-opments (but no major pre-lets on London developments yet).

HARM MEIJER | JP MORGAN CAZENOVE

We believe Francis Salway leaves the company in good shape. Whilstwe knew this change was coming, it is sooner than we expected as we thoughtthat Robert Noel would have to deliver on the development pipeline first.

8/3/2019 Cityam 2012-01-25

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LONDONS construction sector willcontinue to face tough conditionsthis year but is expected to return tosteady growth from 2013 as buildingprojects such as the Crossrail andLand Securities Walkie Talkie gathermomentum.

Greater London will see an expan-sion rate of 2.5 per cent per year overthe five years to 2016 significantlyhigher than the UK average of 1.4 per

cent, according to CITB-Constructionskills, the training body.

The commercial sector is expectedto be one of the top performers, withoutput rising by around 5.7 per centper year, driven by ongoing schemesincluding Crossrail, Thameslink andthe upgrade of London Bridge sta-tion.

The strongest short term growth isforecast for the private housing sec-tor, with average growth of 8.7 percent, helped by overseas buyers flock-

ing in at the higher end of the mar-ket. Output is expected to be 65 percent higher in 2016 than its previouspeak in 2007.

Constructionskills annual reportsaid that while forecasts for 2016offer a glimmer of hope, the numberof jobs in the sector is expected todrop by 1.4 per cent this year.

There is a real danger that theindustry will not have the skills itneeds to complete major projects inthe longer term, said Sara Pearce,the firms sector strategy manager.

The report said growth in UKconstruction sector would remainslow and uneven, yet output isdue to bounce back by four per centin 2013.

City buildersset to bounceback in 2013 PROPERTY services group ColliersInternational has received atakeover offer for its UK arm fromits main shareholder, Canadian

property giant FirstService.Colliers, the worlds third largest

commercial real estate organisa-tion, said the price indicated was ata slight discount to Mondays clos-ing price of 1.47p, valuing the groupat just over 2m. Its shares tanked24 per cent to hit 1.1p yesterday.

Its UK business, which is listed onthe Alternative Investment Market,has been losing money heavily overthe past eighteen months, thoughthe group has said it expected tobreak even in the second half of 2011.

The firms City office works as joint leasing agent for LondonBridge Place, a smaller sister project

to the Shard skyscraper.The group lost 3.99m in the half-

year to June 2011, on turnover of31m, and has seen its share pricetumble from highs over 8p inAugust.

FirstService, which already owns a29.9 per cent stake in the UK busi-ness, has until 21 February to makea firm offer. The Canadian firmgenerates over US$2.2bn in annualsales and has over 20,000 staffworldwide.

Colliers getstakeover bidfrom investor

BYKASMIRA JEFFORD

PROPERTY

PROPERTY

Commercial sector output expected to rise by5.7 per cent per year until 2016. Private housing sector output set to grow 8.7per cent per year by 2016.

FAST FACTS: LONDON PROPERTY

NewsCITYA.M. 25 JANUARY 2012 13

CHEESEGRATER

WALKIE TALKIE

LONDONBRIDGESTATION

CROSSRAIL

RAIL UPGRADE

8/3/2019 Cityam 2012-01-25

14/36

ECONOMIC activity stabilised in theEurozone this month, Markits pur-chasing managers index (PMI)showed yesterday, though employ-ment was hit across the area.

Services PMI rose to a five-monthhigh of 50.5, up from 48.8 inDecember, while the manufacturingoutput index rose from 47.1 inDecember to a six-month high of 50.

Any figure above 50 representsexpansion.

Taken together, Markits compositePMI hit 50.4 the first expansion inoutput for five months.

Germany experienced its strongestgrowth for seven months, with a PMIof 54 while French growth was moremodest, at 50.9. However, the rest of

the Eurozone contracted.The data suggest the rate of con-

traction may have peaked back inOctober, and the slide back intorecession may be avoided, saidMarkit.

Meanwhile industrial output fellby 1.3 per cent in November lowerthan the2.2 per cent fall forecast.

Euro outputshows signsof stabilising

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EUROZONE

SPAIN will not be allowed any moretime to cut its budget deficit, theEuropean Commission said yesterday.

Budget minister Cristbal Montorocalled for the EU to give the countryextra leeway on deficit targets this

year on the basis that the economy issuffering another recession.

However commissioners yesterdayinsisted Spain will not be cut any slack.

This is a crisis of confidence. To getthrough, it is vital to restore finances

without delay, said Ollie Rehn.Meanwhile, mortgage lending has

plummeted as the economy contracts.Demonstrating just how deep Spainscrisis is, data out yesterday showedmortgage lending fell 38.7 per cent by

value in November, compared with thesame month of 2010.

But the government did successfullysell short-term debt at reduced yields

yesterday. Investors flocked to a sale ofshort-term debt, buying 2.51bn(2.09bn) of debt at 1.285 per cent onthree-month bills the lowest interestrate since last February and 1.847 percent on six-month debt.

Spain told it

cant delaydeficit cutsSPANISH ECONOMY

News14 CITYA.M. 25 JANUARY 2012

What historic brands can learn from Kodak

USUALLY in this column I focuson how brands perform in theUK. But with the news last

week that Kodak had filed forChapter 11 bankruptcy protection,this week I will look at what has

happened to the famous companyon the US version of BrandIndex.

Kodak is 133 years old and we onlyhave data going back four years, buteven that reveals an interesting and

striking pattern.In August 2008 Kodak had anIndex score (a composite of sixattributes) of +47.

Since then it has seen a slow butsteady decline and now sits at +36.

A SUBTLE DECLINEIt is surely possible to hypothesisethat the slow fall in public percep-tion has been going on for a muchlonger period of time and that they

would have been at or near the topof a hypothetical BrandIndex in

years gone by.

However +35 remains a very rea-sonable score and the attributeschart points towards a subtlety ofKodaks decline.

The brand dropped quite steadily

on product-related values such asquality. Until late last year though,it pretty much maintained its posi-tion on corporate reputation (asked

by a proxy of whether people wouldbe proud to work for the company).

This suggests to me that peoplestill like Kodak, they just dont seethat it has a role to play in their livesanymore.

A WELL-LOVED BRANDKodak remains a well-loved brand

with high levels of public empathybut it has lost relevance in the dig-

ital world.

SHOW ME THE MONEYMany perceptions have fallen andhowever much people would like to

see Kodak survive, they are notgoing to buy things they dont want.

The Kodak story is a pertinent onefor brands the world changes andunless you change as well, you willstruggle no matter how much youare liked.

Stephan Shakespeare is the chief executiveof YouGov.

BRANDINDEX

STEPHAN SHAKESPEARE

ANALYSIS l Kodak attributes

Quality

Reputation

22/12/201122/12/201022/11/200922/09/2008

60.0

55.0

50.0

45.0

40.0

30.0

35.0

ANALYSIS l Kodak index

22/12/201122/12/201022/11/200922/09/2008

48.0

46.0

44.0

42.0

40.0

36.0

34.0

32.0

38.0

ANALYSIS l PMI expanded for the firsttime in 5 months

PMI GDP,% q/qPMI

GDP

1999 2001 2003 2005 2007 2009 2011

652.0

-2.0

-3.0

1.0

-1.0

0.0

60

55

50

45

35

30

40

POLITICIANS reacted with fury lastnight after the official who presidedover one of the worst corruption scan-dal in EU history was appointed to akey role in the Eurozone bailout fund.

Jacques Santer, 74, will run a specialpurpose investment vehicle (Spiv)designed to raise funds to defend theEurozone. He was president of the

European Commission in 1999 whenit was forced to resign en masseover adevastating report alleging corrup-tion. Martin Callanan, leader of theConservative MEPs, said Santersreturn was like putting Dracula incharge of the blood bank and UKIPleader Nigel Farage dismissed it isalmost laughable.

Santer was not accused of wrongdo-ing in the EU scandal . Yesterday sup-porters said he was a man of integrity.

Anger as Santer brought

back for bailout fund role

Jacques Santer resigned as EC president in 1999 Picture: REUTERS:

BYPETER EDWARDS

EUROZONE

8/3/2019 Cityam 2012-01-25

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BANK bailouts and quantitative eas-ing have both provided the govern-ment with a financial boost worthtens of billions of pounds, accordingto analysis from economist Simon

Ward from Henderson GlobalInvestors, published yesterday.

Ward argues the governmentsfavoured measure public sector net

borrowing (PSNB) excluding financialinterventions gives too gloomy a

view of the public finances. This measure put borrowing at

124.8bn in the calendar year 2011, or8.3 per cent of GDP.

However, Ward points to the33.5bn surplus generated by thestate owned banks, and from theinterest income on the Bank ofEnglands asset purchase facility, to

suggest this paints too grim a picture.There is a strong case for the treas-

ury booking the Banks net incomefrom quantitative easing through adividend, rather than allowing it toaccumulate off-balance-sheet in the

Asset Purchase Facility, said Ward.However, this could run into trou-

ble if it was felt to look too much likedebt monetisation.

Simon Ward: PayTreasury with cash

from QEs incomeBY TIMWALLACE

UK ECONOMY

News16 CITYA.M. 25 JANUARY 2012

GOVERNMENT borrowing slowed inDecember, figures from the Office forNational Statistics (ONS) showed yester-day, with new borrowing falling on anannual and monthly basis.

The government borrowed 13.7bnlast month, down from 17.9bn inNovember and 15.9bn in December2010.

That takes borrowing for the finan-cial year so far to 103.3bn, down11.3bn on the 114.6bn borrowed inthe same period of last financial year.

The national debt now stands at1.003 trillion, or 64.2 per cent of GDPin December, up from 59.4 per cent inDecember 2010.

Once the bank bailouts are includ-ed, net debt stands at 2.33 trillion, or149.1 per cent of GDP, and the

Treasury estimates public sector pen-sion liabilities add an additional 1.13

trillion on top of that.Tax receipts rose 2.87bn compared

with December 2010 to 42.2bn, withlast Januarys VAT rise adding 11.5bnto tax receipts for the year so far.

Other temporary factors also distortthe reading slightly local govern-ment grants, for example, are beingpaid out later in the financial yearthan last, flattering the current fig-ures by comparison.

Current expenditure fell 451m to51.46bn compared with the samemonth of 2010, while investmentspending rose from 2.6bn to 2.88bnover the period.

However, central government invest-ment spending for the financial yearso far stands at 18.2bn, down from23.6bn in the previous year.

The government has made goodprogress in consolidating the publicfinances so far and, despite someupward revisions to borrowing in pre-

vious months, theres still a good

chance that borrowing will under-shoot the OBRs full-year forecast of127bn, said economist Nida Ali fromErnst and Youngs Item Club.

However, with the Eurozone crisisshowing no signs of abating it is possi-

ble that the OBRs growth forecasts will prove to be too optimistic. Thiswill have implications for the publicfinances and the Chancellor couldhave more difficult decisions to take inhis Budget in two months time.

Record UK borrowingas debts hit 1 trillionBY TIMWALLACE

UK ECONOMY

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NEWS | IN BRIEF

Nordea dividend cut as profit fallsNordea, the Nordic regions biggest bankby value, posted fourth-quarter operat-ing profit that topped forecasts thanksto strong trading results, but troubleareas in Denmark and shipping led tobigger-than-expected credit losses.Operating profit for the period fell fourper cent to 1.03bn. Nordeas net loanlosses in the fourth quarter were 263mcompared with an expected 152m, afactor that could weigh on other Nordicbanks which are set to report in theweeks ahead. Nordea, one of Europestop 10 lenders, also slashed its dividendby 10 per cent from the previous year to26 cents and said it saw tough timesahead.

KPN lowers its 2012 forecastsDutch telecom firm KPN has cut itscore profit expectations for 2012 andscrapped a share buyback programmeto pour money into its strugglingdomestic business. KPN, the largesttelecommunications provider in theNetherlands, which has been trying toreverse falling revenues, profits andmarket share in its domestic fixed-lineand mobile businesses, warned yester-day 2012 would be a transition year.KPN, known for its generous annual1bn share buyback programmes andhealthy dividends, said it would investstrategically in its domestic infra-structure during current macro eco-nomic uncertainty and won't updatethe market on 2013 expectations untillater in 2012. KPN reported fourth-quarter sales down 1.8 per cent to3.375bn and core profit, or earningsbefore interest, tax, depreciation and

amortisation, down 6.2 per cent to1.316bn.

www.cityam.com

What do you think of the UKsGDP figures for the end of 2011?

In associationwith

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

THIS morning, the government willrelease GDP figures for the finalquarter of 2011, giving forecastersthe chance to predict how the econ-omy is going to fare in 2012.

So this week for our Voice of theCity poll with PoliticsHome.com,were asking for your reaction to

these latest figures.Panel members will receive an

email once the figures are con-firmed asking for feedback on theUKs economic performance, and ifwe should be more upbeat about2012. To join the panel and have

your say, visit cityam.com/panel.

PoliticsHome.comPoliticsHome.com

ANALYSIS l The debt ratio has more thandoubled since 2002

%

1999 2001 2003 2005 2007 2009 2011

65

60

55

50

45

35

30

25

40

ANALYSIS l The bank bailouts aregenerating cash

4Q deficit, % of GDP

Total

Ex financialinterventions

2007 2008 2009 2010 2011

12

11

10

9

8

56

4

3

7

8/3/2019 Cityam 2012-01-25

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SNOW POLOAND PIGLET

RACING FORSUPER-RICHTHERES MORE than one top-level summitfor bankers in Switzerland this week. Atthe ski resort of Klosters, The Capitalisthears several members of the businesselite have been taxing their champagne-addled brains by betting on racing piglets.

At least they would have done if fog had-nt scuppered the trotters Derby. Instead,guests at the winter festival, which ranuntil Sunday, amused themselves by play-ing polo and partying in clubs made ofshipping containers and snow.

Welcome to the annual winter festivalorganised by you couldnt make it up a lavatory salesman called Daniel Waechter, last spotted making his for-

tune by selling the Golden Throne rangenamed after European monarchs.

Swedens billionaire Rausing familyflew in for the four-day festival, as did thesinger Annie Lennox, heads of banks andcaptains of industry from gold, construc-tion, engineering, property, shipping andsteel companies who all prefer not to be named. Part of the reason [theguests] like being there is because theycan be themselves, said a source.

Presumably, then, no irony was intend-ed when one VIP guest started an auctionbidding war at the closing night party byasking Duran Duran to rattle out anacoustic version of their hit OrdinaryWorld for ever-larger sums of cash.

BACK TO SCHOOLITS BACK to school for Bill Gates thismorning. At 10am, the software billion-aire, on a stopover from Seattle, will tell

Merchant Securities recommends theevents owner Music Festivals, the operatorowned by the former Mean Fiddler impre-sario Vince Power, as a buy at 57.5p.

The pedigree of top artists, coupledwith the established Benicassim brand,will underpin sales ahead of the event,notes the broker. Although it would say

that, as it was the nominated adviser when the 8.5m company

floated on Aim last June.

DOWN RIVERHAVE SOME City firms left ittoo late to organise their cor-porate entertainments aroundthe Queens Diamond Jubilee?

The restaurant High Timber,which has a waterfront terrace,has been booked up since lastNovember on the afternoon ofthe Diamond Jubilee Pageantdown the Thames on 3 June.

That fact didnt bother onewell-known international insur-ance company, however, whichoffered the venue free insurancefor a year if it would cancel itsexisting bookings to accommo-date its party. High Timber, forthe record, said no.

pupils at a London secondary stateschool about his priorities for globaldevelopment, as released in todays

Annual Letter 2012.Gates is making the trip as part of the

Speakers for Schools initiative, wherehis group of students will be joined bypupils from West Africa, Asia, the USand the Middle East via a live weblink.

Precisely which school will benefit isstrictly off-limits, says a security-con-scious aide. If we told you, it wouldhave to be cancelled. The location of his2.30pm appointment is for publicknowledge, however Gates will put onhis Global Poverty hat to speak at theLondon School of Economics.

BOND, GREEK BONDYOURS FOR only 9.95, plus 2.95 han-dling: an original and genuine 100Greek bond with one careful owner the Bank of England.

We are perhaps the only coin firm inthe UK that does not sell anything as an

investment, advises collector Coincraft,which bought the 1898 bond (picturedbelow right) at a bond auction 20 years

ago, when the BofE was cleaning outsome of its old papers.

Before you ask, the bond wasnever paid off, leaving one ofMervyn Kings many predecessors toraid the Treasury to underwrite thedebt. Greece defaults, the Bank ofEngland steps in the rest, as theysay, is history.

SPAIN DRAINGLASTONBURYS off, The BigChills on ice. Which leavesSpanish festival Benicassim asthe frontrunner to rake in themost cash this summer, follow-ing the announcement that NoelGallaghers High Flying Birds,Florence + the Machine and theStone Roses are confirmed toappear at the event.

On the back of the news,

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17EDITED BY

HARRIET DENNYSGot A Story? Emailthecapitalist@cityam.comFollow The Capitaliston Twitter: @dennysharriet

The CapitalistCITYA.M. 25 JANUARY 2012

Festival act Florence + The Machine Picture: Rex

Organiser Daniel Waechter, Annie Lennox and Hackett founder Jeremy Hackett at the Klosters snow polo festival Picture: Rex

8/3/2019 Cityam 2012-01-25

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THE BATTLE to buy Lloyds ofLondon insurer HardyUnderwriting is hotting up, after apair of new bidders entered the fray.

Montpelier Re and MitsuiSumitomo are said to haveexpressed an interest in buying thefirm and join a list of potential suit-ors that includes Lloyds rivalCanopius, Bahrain based Arig andthe American company TowerGroup. Fellow Lloyds underwriterBeazley remains the only publiclydeclared bidder.

Hardy is undergoing a strategicreview and is touting itself to poten-tial buyers after a series of catastro-phes hammered its bottom line.

It faces 10m-25m in lossesfrom last years floods in Thailandin addition to a 32m bill following

earthquakes in Japan and NewZealand.Eamonn Flanagan, an analyst at

Shore Capital, said he would beastonished if there isnt a decent

level of interest and that the dealis good enough to go.

But potential buyers may hold back on making an offer untilHardys year end results are pub-lished on 1 March in order to assessthe total cost of the Thai disaster.

The underlying business thatHardy has is very good, saidFlanagan. The non-catastrophelines are working very well but thecatastrophe lines have beenthumped.

Flanagan issued a buy recommen-dation on the basis that Hardyscomplete ownership of its ownLloyds business with no need torely on names made it incrediblyattractive to global reinsurers whowant to minimise compliance pro-cedures when entering new mar-kets. If you go through the Lloyds vehicles you can turn up in OuterMongolia and you can write busi-

ness quickly, he said.Mitsui said suggestions it was eye-ing Hardy were pure speculation.Montpelier declined to comment.

Montpeliers former chairman

Tony Taylor is now a non-executivedirector at Hardy, which may affectpotential takeover talks.

Shares in the firm yesterdayclosed up 0.9 per cent at 193.25p.Only thirteen months ago Hardysboard turned down an takeover bidfrom Beazley after demanding aprice substantially in excess of the350p per share offer.

Lloyds of London insurers areconsidered vulnerable to takeoversafter a string of disasters hit shareprices and they struggle to raisefunds to meet stricter capitalrequirements.

More suitors wooLloyds firm HardyBY JAMESWATERSON

INSURANCE

GENERAL Motors said yesterday it hadpicked Carat, part of British advertis-ing group Aegis, to handle its globalmedia planning and buying, in a blowto incumbent Publicis.

The GM account, which spends$3bn a year on advertising accordingto analysts, puts Carat at the helm ofall GM duties for consumer-facingmedia, which includes broadcast, digi-tal and social media.

Aegis was only handling Europeanduties until now. Publicis is the mainloser, as it managed $2bn before,Exane BNP analysts said in a note, esti-mating the contract loss would cutone per cent from Publiciss 2012 earn-ings per share.

Publicis played down the loss of thecontract, which was held by its unitStarcom, saying it represented lessthan 0.5 per cent of Publicis Grouperevenue.

General Motorschooses AegissCarat for $3bnadvertising plan

MEDIA

News18 CITYA.M. 25 JANUARY 2012

NUFFIELD HEALTH EXPANDS GYM PORTFOLIO

HEALTH charity Nuffield Health yesterday added to its existing portfolio of fitness cen-tres by snapping up Greens Health & Fitness, a chain of 15 gyms previously owned by theDe Vere Group. Nuffield now runs 66 consumer and 200 corporate fitness sites across theUK, including the centre on Cousin Lane behind Cannon Street station (pictured).

SOAP maker PZ Cussons warned yes-terday it was likely to report disap-pointing full-year profits, pointing topolitical upheaval in Nigeria, challeng-ing trading conditions in Australiaand high raw materials costs.

Shares in the maker of ImperialLeather soap fell as much as 4.8 percent after it reported an 11.7 per centdrop in first-half pre-tax profit andsaid full-year results would be towardsthe bottom end of current marketexpectations.

It had already issued a profit warn-ing in December as pressure on con-

sumers compounded the pain of highraw materials costs and adverse movesin exchange rates.

PZ Cussons said it was monitoringsocial and economic tensions in

Nigeria closely after gun and bombattacks by Islamist insurgents lastweek killed at least 186 people.

Nigeria, PZ Cussons biggest singlemarket, accounts for around 30 to 40per cent of the groups total revenue.

The company, which also makesCarex hand soap and recently boughtthe Fudge haircare brand, said profit before tax in the six months toNovember fell to 39.3m from 44.5ma year earlier as higher costs helpedundermine a 10.5 per cent rise in rev-enue to 414m.

PZ Cussons chairman RichardHarvey said the company anticipateddifficult trading in some markets forthe rest of the year.

In particular, we are closely moni-toring the current economic andsocial tensions in Nigeria which mayfurther impact the year-end outturn,Harvey said.

PZ Cussons warnstension in Nigeria

could dent profitsBYHARRY BANKS

CONSUMER

ANALYSIS l Hardy Underwriting Group PLC

p

18 Jan 19 Jan 20 Jan 23 Jan 24 Jan

194

193

192

191

190

189

188

193.2524 Jan

Crispin Wright is leading theRothschild team advising Hardy, withassistance from Peel Hunts JamesBritton.

Wright joined the bank in 1998from Deutsche Morgan Grenfell,

where he helped with the flotation of

the Halifax building society. Sincethen he has advisedWolverhampton & DudleyBreweries on avoiding a takeoverfrom Pubmaster and in 2010helped currency printer De La Rueface down a 900m bid fromObethur.

In addition to Hardy he advisesairport operator BAA, ferry com-pany P&O and Jardine Matheson,the biggest investor in Lloydsinsurance broker JLT.

He studied history at Oxford

University and sits on the FSAsListing Authority AdvisoryCommittee.

James Britton, director of cor-porate finance at Peel Hunt, leadsits Hardy team with help fromGuy Wiehahn and Emma Riza.Britton joined the firm in 2003 tobuild its M&A and financial serv-ice financial services practice.

He has spent 25 years in corpo-rate finance and was previously asa managing director at Deutsche

Morgan Grenfell.

MEET THE ADVISERS

CRISPIN

WRIGHT

ROTHSCHILD

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PRIVATE equity firm Bridgepoint yesterday signed its deal to buyQuilter, the wealth management business owned by Morgan StanleySmith Barney, for an undisclosedsum expected to be more than170m.

This comes just weeks afterBridgepoint bought online cyclingshop Wiggle for 210m (175.2m) inlate 2011 a year which saw the pri- vate equity firm grow its invest-

ments across a range Europeancountries and industries.

Quilter, which can trace its ances-try back to 1777, ended last yearwith approximately 7.6bn of fundsunder management. It operates in adiscretionary wealth managementmarket worth around 400bn anarea thought to be currently under-penetrated and expected to grow aspension schemes change and per-sonal investments increase.

This marks the second time thatMorgan Stanley has sold Quilter. After originally offloading the wealth management company toCitigroup in 2006, it then took amajority stake in the business in2009.

Morgan Stanley has been lookingto sell Quilter, whose clients tend toinvest around 250,000, to concen-trate on multi-million pound privateinvestments.

Bridgepoint has invested inwealth management before, buyingasset management firm Tilney inMarch 2005. The company was thensold to Deutsche Bank in October2006.

However, Bridgepoints acquisi-tions in 2011 were more varied,including a Swiss sports company, aFrench property management com-pany, an Italian perfumery and aFrench clinical services group.

Bridgepoint partner Michael Blacksaid: Quilter is a long-establishedand highly regarded UK private

client wealth management businessoperating in a large but fragmentedmarket favoured by underlyingstructural growth drivers.

As such, we believe that there isevery opportunity for Quilter toaccelerate its growth organically aswell as make complementary acqui-sitions for the business.

Martin Baines, chief executive ofQuilter, added: Under Bridgepointownership, Quilter will not only con-tinue to do what it has always donebest, provide highly personal invest-ment management services to advis-ers and individuals, but also growand extend what it can offer itsclients.

Oliver Wyman and PwC advisedon the financial side of this deal,flanked by legal firm Linklaters.

The transaction is expected tocomplete in the first quarter of thisyear.

Bridgepointconfirms dealto buy Quilter

BRITISH military equipment makerChemring said it expects defencemarkets to be challenging in 2012after it posted a six per cent rise infull-year profit yesterday.

The company, which makes ejectorseats and other devices for militaryaircraft, reported an underlying pre-tax profit of 125.6m for the year tothe end of October, on revenues 25per cent up at 745.3m.

The continuing problems of theEurozone indicate that our tradition-al markets will not be any easier thisyear, Chemring said.

The firms shares tumbled 13.9 percent to 386.5p yesterday.

Chemring says2012 defencemarket tough

BY LAUREN DAVIDSON

WEALTH MANAGEMENT

DEFENCE

ENQUEST has raised its stake in theKraken oil discovery in the UK NorthSea by acquiring a 25 per cent interestfrom Nautical Petroleum for up to154m.

EnQuest, which bought a 20 per-cent interest in the Kraken discoveryfrom oil and gas explorer Canamensearlier this month, will become theoperator of the field.

The 25 per cent interest in Krakenprovides 40m barrels of oil of contin-gent resources to EnQuest.

Nautical shares jumped five percent on the news.

EnQuest buys

bigger sliceof Kraken fieldENERGY

News 19CITYA.M. 25 JANUARY 2012

BRIDGEPOINT: ALL ABOUT THE ACQUISITIONS

Date Amount paid

Wiggle (online cycling retailer) 2011 210m

Infront (Swiss sports company) 2011 600m

La Gardenia (Italian perfumery) 2011 price not disclosed

Foncia (French property management) 2011 200m (speculated)

HobbyCraft (UK art and craft retailer) 2010 120m+ (speculated)

Pret A Manger (UK caf chain) 2008 500m

Fat Face (UK clothing retailer) 2007 540m

Leeds Bradford International Airport 2007 214m

PRIVATE equity group Bridgepointturned to Linklaters for legal advice onits acquisition of Quilter from MorganStanley Smith Barney, having used thefirm for UK acquisitions in the past aswell as for work in Sweden and France.

Linklaters won its first mandate forBridgepoint back in 2007, when ithelped the buyout house acquireGambro Healthcare.

Back then the team was led by pri-vate equity head Charlie Jacobs, but thistime Linklaters fielded a team led by co-head of the practice Ian Bagshaw, andincluding financial regulatory partner

Carl Fernandes.Bagshaw has previously worked for

The Carlyle Group on its acquisition of amajority stake in Associated DentalPractices from Palamon. He also workedfor Carlyle on its subsequent buyout ofIntegrated Dental Holdings last year,ahead of a merger between the twodental healthcare providers.

He helped Alliance Medical Groupwith its debt and equity restructuring atthe end of 2010, and Almatis, a portfoliocompany owned by Dubai InternationalCapital, on its debt financing andrestructuring options

Meanwhile Roger Moore at fellowMagic Circle firm Clifford Chance actedfor Morgan Stanley, while Mark Soundyat Wiel Gotshal & Manges advised themanagement.

Bridgepoints financial advice on thedeal came from Evercore Partners, withPwC carrying out the financial due dili-gence.

Elizabeth Fournier

MEET THE LAWYERS

IANBAGSHAW

LINKLATERS

8/3/2019 Cityam 2012-01-25

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SHARES in Carphone Warehouseleaped nearly eight per cent to 338pyesterday as the mobile phone retailerrevealed it was on target to meet year-end expectations, despite the laggingpay-as-you-go trade, and laid out plansto penetrate the tablet market.

The company behind advertisingploy Mobly, the animated mobilephone, estimated the UK-wide pre-paymarket dropped as much as 40 percent in the third quarter, due to the

weak consumer environment and alack of smartphones a