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FTSE 100 5,892.75 +5.26 DOW 12,959.71 +37.69 NASDAQ 2,983.66 -4.68 /$ 1.56 -0.01 / 1.19 unc /$ 1.32+0.01

OLD HANDS: FTSE 100 CEOs Angela Ahrendts (Burberry), Cynthia Carroll (Anglo American); Marjorie Scardino (Pearson) & Alison Cooper (Imp Tobacco)

NEW EXEC HIRES: Marks & Spencers Laura Wade-Gery; Liz Doherty at Reckitt Benckiser; British Lands Lucinda Bell and IHGs Tracy Robbins

A QUARTER of new FTSE 100 boardhires made in 2011 were female,research will reveal this morning, in anew record that highlights a dramaticchange at the top of Britains largestcompanies.

Of the 190 appointments made toFTSE 100 boards during 2011, 47 werewomen, boosting the total number offemale-held directorships in blue chipcompanies to 15.6 per cent a markedimprovement on the sluggish rise thathad seen figures hit a plateau ofaround 12 per cent for the past threeyears. In 2010, just 13.3 per cent of newboard positions went to women.

The number of FTSE 100 companieswith entirely male boards has droppedto 11 a fall of almost half in just 12months while the number withmore than one woman on the boardhas increased to 50.

But though overall numbers ofwomen on FTSE boards are increasing,the Cranfield School of Managementsannual female FTSE report does high-light how female directors are over- whelmingly taking up non-executivepositions, with most executive rolesstill going to male candidates.

Of the 47 board female FTSE 100

appointments last year, just four wereexecutive roles. Internal promotions atproperty group British Land andleisure firm Intercontinental Hotels

BY ELIZABETH FOURNIERCORPORATE GOVERNANCE

www.cityam.comIssue 1,590 Tuesday 13 March 2012 FREE

GAME OVER?STOCK TUMBLESAS RETAILER SAYS

ITS SHARES MAY

BE WORTHLESS P7

KAUTO STAR TO VIE FORCHELTENHAM GOLD CUPFESTIVAL STARTS TODAY P31-34

BUSINESS WITH PERSONALITY

saw Lucinda Bell and Tracy Robbinstake executive positions, while con-sumer goods group Reckitt Benckiserand retailer Marks & Spencer lookedfurther afield in appointing LizDoherty and Laura Wade-Gery to theirrespective executive boards.

The number of FTSE 100 companies

with female chief executives hasremained static at four. Of these,three Angela Ahrendts at Burberry,Anglo Americans Cynthia Carroll and

Pearson boss Dame Marjorie Scardino were born in the US, thoughScardino has taken UK citizenship.

This reliance on overseas talent isreflected in the wider findings, whichshow just 55 per cent of female direc-tors hold UK citizenship, while 29 percent are American or Canadian.

The report is being launched thismorning by Barclays chair Marcus Agius and home secretary TheresaMay, who said she was delighted by

the unprecedented progress.But though the UKs biggest compa-

nies are making headway, improve-ment among smaller listed firms isless advanced. Just 9.4 per cent of FTSE250 directorships are held by women an increase on the 7.8 per cent record-ed in 2010 but still well behind their

bigger rivals. The number of FTSE 250 boardswith no female members has also fall-en but still only just tips the balance,

Certified Distribution

30/01/2012 till 26/02/2012 is 98,573

NEW FEMALE APPTS IN FTSE 100

2011 2010 2009 200847 18 23 16

WOMEN IN THE FTSE 100 IN 2012

Non-executive directors 781

Executive directors 305

Total FTSE 100 directorships 1086

with 54 per cent now counting awomen among their directors.

The progress update comes just a week after EU justice commissionerViviane Reding chastised firms for fail-ing to work towards her targets of 30per cent female directors by 2015, andthreatened mandatory EU quotas ifself-regulation did not improve.

In a government-commissionedreport on FTSE 100 board diversityreleased just over a year ago, LordDavies recommended a minimum tar-get of 25 per cent female representa-tion on FTSE 100 boards by 2015.

I believe were on a steady journeytowards our 25 per cent target, LordDavies said today. But the reality isthat a lot more still needs to be done.

As fresh hires in 2011 met the target,Cranfields most optimistic projec-tions see the current trajectory smashthrough the target to hit 26.7 per cent by 2015. But more conservative esti-mates show how the FTSE 100 may justmiss the goal rising to 22 per cent.

YOURE HIREDWomen now make up a quarter of new FTSE board members

Source: Cranfield School of Management

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News2 CITYA.M. 13 MARCH 2012

Housing planunder attackTHE GOVERNMENT will back up highloan to value mortgages worth up to500,000, it announced yesterday, asthe scheme was attacked as ineffec-tive and economically dangerous.

The governments NewBuy guar-antee scheme, like many suchschemes over the years, smacks ofdesperation, said Jonathan Samuels,CEO of Dragonfly Property Finance.

The concern is that NewBuy isintrinsically leveraged, and we knowwhere leveraging got us in the past,Samuels added referring to housingmarket crises such as the sub-primemarket in the US, which led to theglobal credit crunch.

The programme will help around100,000 prospective buyers, the gov-ernment said, calculating that the

typical necessary deposit could bereduced from 40,000 to 10,000.

Yet NewBuy puts taxpayers on thehook if the housing market turnssour in the future, warned DrRichard Wellings from the Instituteof Economic Affairs. It doesnt solvethe problem in the housing marketat the moment, he added.Liberating planning permissionwould be much more helpful.

The Council of Mortgage Lenders,however, said that NewBuy wouldcontribute not just to housing sup-ply, but also to economic growth.

BY JULIAN HARRIS AND CAOLAN COSGROVE

PROPERTY

EARNINGS FORECASTS TAKE A BULLISHTURN Analysts last week upgraded morecompanies earnings forecasts globallythan they downgraded for the firsttime since May last year. After 41weeks of consecutive downgrades, netearnings per share revisions for next year turned positive powered by asurge in upgrades of Japanese compa-nies and industrial groups, accordingto data compiled by Citigroup.

HSBC TO SCALE BACK ON ASIAN RETAILARMSHSBC is set to scale back its Asian oper-ations with the potential sale or clo-sure of seven retail businesses incountries from Pakistan to New

Zealand. The bank has already sold orclosed its retail banking operations in

Japan and Thailand as part of a broad-er strategic overhaul.

WHISTLEBLOWERS DRAWN BY PAYOUTSWhistleblowers are rushing to US reg-ulators with audio recordings andinternal documents to take advantageof a new program that can makereporting wrongdoing lucrative.Lawyers say many of the whistleblow-ers allege accounting fraud and for-eign bribery at financial andindustrial companies.

CARBON PLEA REJECTEDBrussels has rejected the aerospaceindustrys call for airlines to be sus-pended from the EUs carbon emmis-sions trading scheme because of fearsover a trade global war.

OLYMPICS FAIL TO RAISE BAR FORSTRATFORD The forthcoming Olympic Gameshave failed to make any positiveimpact on house prices in Stratford,where values have instead underper-formed the rest of London during thepast four years as purchasers contin-ue to plump for prime residentialareas, according to Hometrack.

NEW YORK TOP COMPETITIVE CITYThe Big Apples ability to bounce backfrom economic hardship has helpedit to fight off London to claim top slotas the worlds most competitive city.New York, London and Singaporetopped the charts in a study by theEconomist Intelligence Unit.

BRANSON HIKES COST OF CREDIT FORVIRGIN MONEY CARD CUSTOMERSSir Richard Bransons Virgin Money, which recently bought NorthernRock, has increased interest rates onits credit cards by almost 50 per centin the latest blow to consumersalready hit by rising mortgage rates.

VIJAY MALLYAS KINGFISHER AIRLINECANCELS MORE FLIGHTSKingfisher, the low-cost Indian airlinecontrolled by the brewing billionaireVijay Mallya, has been forced to canceldozens of flights after staff beganunofficial industrial action claimingthey had not been paid. The carrierissued a statement blaming employ-ee agitation on delayed salaries.

LARRY KING TO HOST SHOW ON NEWINTERNET TV NETWORKFormer CNN talk-show host Larry Kingis reprising his old role in a new for-mat with the launch of an internet tel-evision network backed by Mexicantelecom billionaire Carlos Slim.Ora.TV will stream shows to comput-ers, tablets, phones and other devices.

LIQUOR GIANTS SAVOUR RISING SCOTCHDEMANDEuropes liquor giants are jostling totap into a growing thirst around the world for Scotch whisky. Producerssuch as Diageo and Pernod Ricard areramping up capacity across Scotlandto meet rising demand from countrieslike Asia, Africa and Latin America.

WHAT THE OTHER PAPERS SAY THIS MORNING

UK and Europe on a collision course

IT is the elephant in the room, theissue nobody wants to talk about. Butthe growing, irreconcilable gulfbetween what UK voters and their con-tinental counterparts want fromEuropean integration will eventuallybecome as important a question as thefallout from the economic crisis. Thescale of the challenge is laid bare byYouGov-Cambridge in the most sophis-ticated polling on European attitudes yet to be conducted and based on across-country, nationally representa-tive survey of 11,000 people. The find-ings are dramatic.

No fewer than 60 per cent of Brits want a referendum to decide onBritains relationship with the EU; 60per cent want a looser relationship orto leave altogether; only 14 per cent

want more integration with Europeand a further 13 per cent want to keepthings as they are. Voters opposeEuropean control in almost all policy-areas including immigration (79 percent), agriculture (74 per cent), tradelinks with other countries (60 percent), financial regulation (68 percent), rights for workers (66 per cent),laws on trade unions/strikes (80 percent) and crime and justice (85 percent). The UK political establishmentas a whole is entirely disconnectedfrom what the public actually wants.

But while Brits want less integra-tion, 63 per cent of Italians, nearly 40per cent of French and over a third ofGermans support turning the EU intoa United States of Europe. Majorities ofFrench, Germans and Italians wantcontinued EU membership or moreintegration in many areas. The differ-

ence between what continentalEuropeans want and what UK voterswould like is astonishing. Their politi-cal cultures are poles apart anddiverging, rather than getting closer.

The status quo is untenable; the next big push for greater integration willtrigger a referendum in the UK andhence the beginning of the end for thecurrent set-up. At some point by theend of this decade, the EU will be tornapart either because of an implosionof the euro, or because the UK willdemand if not a divorce, at least a loos-er, more open relationship withBrussels. Nothing is inevitable in life but this gets pretty close.

SUB-PRIME II THIS government can be absurdlyinconsistent. First, it backs bankingrules and an activist FSA that discour-age or ban high loan to value mort-gages then it produces its NewBuyscheme to subsidise these very same 95per cent mortgages. The governmentintervenes to change banks behaviour

and then intervenes again to cancelout the effect of this change, withoutactually getting rid of the originalrules. It would be comical if not so seri-ous taxpayers will guarantee a por-

tion of the loans and will shoulder therisk. Do government departments notactually talk to each other? Or is thecoalition so ideologically committed toadopting each and every internationalrule such as the Basel III bank regula-tions that it doesnt dare openly crit-icise them and prefers instead to buyits way out of those parts it doesntwant? If so, that would be cowardly, aswell as wasteful.

Lenders need a cushion of 10-15 percent at least as there is a very real pos-sibility house prices could fall by thatamount over the next few years, espe-cially if the cost of borrowing contin-ues to increase. The fact that thegovernment has learnt nothing fromthe sub-prime crisis is depressingbeyond belief.

[email protected] me on Twitter: @allisterheath

YAHOO is suing Facebook over 10patents that include methods and sys-tems for advertising on the web, open-ing the first major legal battle amongsocial medias technology giants.

The lawsuit, filed in a San Jose,California federal court yesterday,marks a major escalation of patentlitigation that has already sweptthrough the smartphone and tabletsectors.

Yahoos patent lawsuit followsFacebooks announcement of plansfor an initial public offering thatcould value the company at about$100bn.

Facebook spokesman JonathanThaw said: Were disappointed thatYahoo, a long-time business partner ofFacebook... has decided to resort to liti-gation.

Yahoo stated: Unfortunately, thematter with Facebook remains unre-solved and we are compelled to seekredress in federal court.

BY HARRY BANKS

TECHNOLOGY

Yahoo is suing FacebookMark Zuckerbergs Facebook is being sued by Yahoo over patents

NEWS | IN BRIEF

CME loses its chief executiveCraig Donohue is to step down as chiefexecutive of US futures exchange opera-tor CME Group at the end of the year,handing over the reins to CMEs presi-dent Phupinder Gill, the company saidyesterday. Chairman Terrence Duffy,who has been the face of the company

as it navigates the fallout from the fail-ure last October of giant broker MFGlobal, will take on the additional role ofpresident. CME audited MF Global'sbooks under the industry's self-regulato-ry system and came under fire over itshandling of brokers collapse.

WTO rules on Boeing subsidiesThe World Trade Organisation said yes-terday it had upheld the bulk of a rulingthat Boeing received billions of dollars ofsubsidies to compete with Europe'sAirbus as both sides once again claimedvictory in a long-running trade row. Theunfair subsidies included at least $2.6bn(1.7bn) in assistance from spaceagency NASA, which the WTOs appel-late body agreed had allowed the UScompany to launch its modern 787Dreamliner and caused serious preju-dice to Airbus.

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

Prime Minister DavidCameron said that thegovernment had tostep in, and helpunblock the market

4th Floor, 33 Queen Street, London, EC4R 1BRTel: 020 3201 8900 Fax: 020 7248 2711Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Gavin BillennessPictures Alice Hepple

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KPMGs new UK chairman electSimon Collins yesterday vowed toput his firm at the centre of thedebate on how to win back trust inthe financial services sector, as hecelebrated his election victoryagainst two better known rivalsOliver Tant and Alan Buckle.

Collins, who is currently globalhead of KPMGs transactions andrestructuring group, said: Society isasking questions of business and Iwant us to have a clear answer.

He said the firm, which is also being probed by the competitionauthorities in the UK and Europeover its share of the auditing market,faced a major challenge in gettinghold of and retaining top talent.Thats pretty high up the top of mylist.

Collins trained to be an account-ant at PwC before moving over to SG Warburg and then Nat WestMarkets, where he was global headof debt structuring.

Like his fellow UK heads at theother Big Four players, Collins comes

from the increasingly importantnon-audit side of the business.

Current UK chair John Griffith-Jones, who announced the result ofthe election by email to KPMGemployees yesterday morning, said:Simon has received a clear mandatefrom the partnership and I am surethat under his leadership the firmhas a bright future.

Simon has already proven him-self to be a fine partner and leader,greatly respected by his peers, clientsand industry alike.

BYDAVID HELLIER

ACCOUNTING

THE OWNERS of United Biscuits, which makes brands including KPNuts and McVities, have revived talkswith banks over options for its savoury

snacks arm, including a potential sale

of the business.Private equity groups Blackstone

and PAI Partners have appointedCredit Suisse to look at separating itsbiscuits arm from its crisps and nutsdivision, after shelving plans to sell the

entire business for 2bn in 2010.

United Biscuits owners revivetalks to break up the business

PRIVATE EQUITY

News 3CITYA.M. 13 MARCH 2012

Collins has been elected to lead KPMGs UK operations

Simon Collinswins vote forKPMG chair

Elected UK & Ireland managing partnerin July 2011 by the EMEA leadership boardafter discussions with UK partners Joined E&Y from Accenture in 2006,having started in 1991 and qualified there Studied engineering at Loughborough

Elected chairman and senior partnerwith effect from 1 July 2008 Joined the UK firm as a trainee in 1977and became a partner in 1991Worked in assurance in his early careerbefore specialising in troubled businesses

Elected as senior partner & CEO ofDeloitte in the UK from 1 June 2011 Led tax and advisory teams at the firmManaging partner for operations atAndersen in the UK until 2002, when itwas bought out by Deloitte

IAN POWELL,

PwC

DAVID SPROUL,

DELOITTE

STEVE VARLEY,

ERNST & YOUNG

SIMON COLLINS,

KPMG

How City A.M. tipped Collins forthe top spot last month

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SPAIN will be allowed to break theterms of the new fiscal compact, it was announced last night, asEurozone peer Italy officially sankinto recession.

Spanish Prime Minister MarianoRajoy (pictured) successfully persuad-ed the other Eurozone leaders atthe Eurogroup that it is onlymissing its deficit targetsbecause the country is miredin an unexpectedly deep

recession, not because thegovernment lacks conviction.

This years deficit is cur-rently expected tocome in at 5.8 percent of GDP, wellabove theE u r o p e a nC o m m i s s i o n -agreed 4.4 percent.

Last night, theEurogroup wel-

comed Spains commitment... tomeet the 2013 deadline for the correc-tion of the excessive deficit andurged Rajoy to press on with the 2012austerity budget and reforms.

Meanwhile, figures showed thatItalys economy shrank 0.7 per cent inthe fourth quarter of 2011, followinga 0.2 per cent decline in gross domes-tic product in the third quarter.

Leader Mario Monti, whorushed through a 33bn(27.8bn) austerity plan inDecember and is now workingon reforms to boost growth, is

due to meet GermanChancellor Angela Merkel

today.Germanys econo-

my contracted by 0.2per cent in thefourth quarter, butanalysts are expect-ing Europeslargest economyto pick up steamagain this year,while Italy lags.

Spain to missgoals as Italyhits recessionBY TIMWALLACE

EUROZONE


Debt holders lining up forlawsuit over risk warning

INVESTORS who claim banks failed to warn them of the risks involved inbuying Greek debt are to try and suethe government and banks involved, itwas announced yesterday.

Lawyers in Germany representing110 investors have formed a classaction group. Most of the investorsinvolved spent between 100,000(84,116) and500,000 on Greek paper,

but one spent3m.Meanwhile, lawyers are expected to

argue that the debt swap infringedthe terms of a German-Greek treatydesigned to protect German investorsagainst political risk. The debt swapcut over 100bn off Greeces overalldebt burden, forcing investors to takewrite-downs of 53.5 per cent on theirholdings.

Greek finance minister EvangelosVenizelos pushed hard for high volun-tary participation.

Greek finance minister Evangelos Venizelos said there would be a special debt account

Cut interest on loansfrom Eurozone states to

BY TIMWALLACE

EUROZONE

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EUROZONE leaders approved the130bn (109.3bn) Greek bailoutpackage yesterday, after private sec-tor investors were forced to takemajor losses on their holdings of thegovernments debt.

Last week investors accounting for85.8 per cent of the private sectors

holdings agreed to take a 53.5 percent write-down, and an additional9.9 per cent were forced to take theloss thanks to the government invok-ing collective action clauses.

That cut the countrys debt bur-den by over100bn, which other gov-ernments claim puts Greece on thepath to a sustainable level of debt 120.5 per cent of GDP by 2020, com-pared with over 160 per cent now.

Greece will not get the cash imme-diately, as some other countries needto approve the transfer of funds.

However, economists believe slowgrowth the country is in its fifthyear of recession may prevent thedebt burden from being lowered.

Greek public debt dynamicsremain extremely challenging, saidBarclays Capitals Fabio Fois.

We think that further debt reliefwill be needed before Greece is able

to return to the markets for medi-

um- and long-term debt. The IMFs contribution to the

bailout has yet to be finalised, as itneeds to agree that the debt levelswill gradually come down, but it hasannounced it is considering con-tributing 28bn.

No agreement has yet beenreached on the size of the firewallaround Italy and Spain the size ofthe European Stability Mechanism,

the bailout fund which will be intro-duced in June, is set to be decided atthe 30 March summit.

Meanwhile nine European lead-ers, including Italian prime ministerMario Monti, Germanys financeminister Wolfgang Schauble and hisFrench counterpart Francois Baroin,have called for a financial transac-tions tax to be introduced in a letterto Denmarks Margrethe Vestager.

The nine have called on Denmarkto use its rotating presidency of theEU to accelerate negotiations aroundthe tax.

German opposition party the SDPis also calling for such a tax to beimplemented and is threatening to vote against the fiscal compact,potentially de-railing the latestattempt to rein in budget deficitsacross Europe and boost market con-fidence in the Eurozone currency

area.

Leaders give

green light tobailout plan

MARKETS are pricing in anotherGreek default as trading in its brandnew long-term bonds opened at a dis-count of over 75 per cent yesterday.

Athens announced that it has com-pleted the largest debt restructuringin history yesterday as it swapped177bn (149bn) worth of bonds for amix of new instruments including

long-dated Greek-law debt and bondsissued by the Eurozones bailout fund.The deal saw the value of bondhold-

ers investments written down bysome 75 per cent, but the new long-term instruments they were given inreturn are faring little better.

Trading kicked off in the bondswith maturities ranging from 11 to 30years. But investors are steering clear:secondary market yields are at 14 to 19per cent, the highest in the Eurozone.

Cheviot Asset Managements DavidMiller said: Early indications showthat the unofficial price of the newGreek bonds will reflect the possibilityof a second default. Markets largelydiscounted last weeks swap.

As further evidence that more trou-ble is expected before long, the yieldcurve on Greeces debt is still inverted:investors are demanding a higher yield on shorter-dated than longer-dated debt.

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$PTUBXBTWPUFE#SJUBJOnTGBWPVSJUFDPGGFFTIPQCSBOE'PSNPSFJOGPSNBUJPOQMFBTFWJTJUXXXDPTUBDPVL

Voted Britains avourite cofee shop

Tats because at Costa were too busymaking sure that every customer is served the

very best cofee, every time.

Greeces brand new long-termbonds fail to attract investors

BY TIMWALLACE

EUROZONE

BY JULIET SAMUELEUROZONE


2010 2012 2014 2016 2018 2020

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PLANS FOR GREEK SUSTAINABILITYRELY ON A QUICK RETURN TO GROWTH

mentbytheEurogroupPresiden

t,

Jean-ClaudeJuncker

methesignificantprogress

edinthepreparationofthesecond

adjustmentprogramme.

urogroupwasencouragedbyt

he

rivatesectorparticipationin

ce'sdebtexchangeoffer,whichwill

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iredforthefinalapprovaloftheeu

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'scontributiontothefinancingoft

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ondGreekadjustmentprogramme

. Jean Claude Juncker(below left) and Lucas

Papademos (below) areboth hoping thebailout works

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GAME shares plunged as much as 78per cent yesterday to just three quar-ters of a penny after it was unable toassure investors that the value of itsshares could be redeemed or grown.

Just weeks after renegotiating itsbanking covenants, Game said it wasuncertain whether any of the solu-tions being discussed with suppliersand lenders will be successful andwarned that equity in the firm couldbe left worthless.

The troubled video games retaileralso said it was exploring a range ofpossibilities including seekingaccess to alternative sources of fund-ing and reviewing the position ofall its assets in the UK and interna-tional territories.

Several major games makersincluding Electronic Arts, Capcomand Nintendo have refused to supplyGame with its new releases, and thegroup could spiral into administra-tion if it is unable to pay its quarterly

rent bill, estimated to be around85m, which is due in a fortnight.

Analysts believe an administrationvia a pre-pack deal is the most likelyoutcome for the business, withGamestop, the US video gaminggiant, swooping into buy parts or allof the business.

Game, which runs 1,270 storesacross UK, Europe and Australia, isthought to have hired Deloitte to han-dle any insolvency process.

Shares, which have lost 95 per centof their value in the last year, closeddown 66 per cent at 1.2p last night.

Game teeterson the brinkof insolvencyBY LAUREN DAVIDSON

TECHNOLOGY

YET another British entrepreneurhas been forced to look beyond theUKs coastline for cash, as reportssuggest Pete Cashmore is about tosell his technology blog websiteMashable to American broadcasterCNN.

The deal, which would see the Time Warner-owned news websitebuy Mashable for more than $200m(128m), could be announced asearly as this week.

Despite Mashable chief executivePete Cashmore emailing employees

to deny rumours that Mashable

will be acquired this week thusleaving the doors open for a futureannouncement a deal would notbe a huge surprise.

The American news site alreadysyndicates some of Mashables sto-ries and Cashmore writes a regularCNN column.

Cashmore, 26, grew up in theScottish town of Banchory andfounded Mashable, which gets morethan 20m unique visitors a month,in 2005 at the age of 19.

In 2009 he was named in ForbesTop 25 Web Celebs and crowned byINQ as the most influential Britonand most influential Twitter user in

the world.

Mashables Scottish chief standsto gain if CNN buys his tech siteMEDIA

A GROUP representing investors inRoyal Bank of Scotland plans legalaction to recover at least 2.4bn lostwhen they bought shares in the bankshortly before it fell victim to thefinancial crisis.

Mike Neill, who is coordinating thelegal action on behalf of the RBoSShareholders Action Group, said yes-terday the claim was backed by 7,400

investors, including charities and

churches, with more likely to join.A legal source with knowledge ofthe process said London law firm Bird& Bird would send a letter of claim,but yesterday an RBS source said thebank had not received the letter orbeen served with proceedings.

RBS stated: The group considersthat it has substantial and crediblelegal and factual defences to theremaining and prospective claims,and will defend itself vigorously,

RBS investors set tosue bank over crisisBYHARRY BANKS

BANKING


Pete Cashmore could sel l Mashable for more than $200m Picture : GETTY

ANALYSIS l GAME Group PLC

p

6 Mar 7 Mar 8 Mar 9 Mar 12 Mar

5

4

3

2

1

1.2812 Mar

ORIEL Securities yesterday trimmedits workforce by around 10 per cent inresponse to the uncertain marketconditions that have hit so many ofthe Citys financial services firms.

[I]t is important that the firmscost base is efficiently managed andthis has, regrettably, resulted in anumber of redundancies, said thefirm. Unlike some of other invest-ment firms, Oriel continued to hireinto the downturn.

BYDAVID HELLIER

BROKERS

Oriel makesstaffing cuts

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TEMENOS has walked away from itsall-share merger with banking soft-ware company Misys after two otherbidders entered the picture wavingthe possibility of wads of cash.

The Swiss company said on 3February it was in talks with Misys,and four days later announced plansfor Misys to own 53.9 per cent of thecombined equity while Temenosschief executive and chairman tookthe helm of the merged group.

But Misys biggest shareholderValueAct, which formerly backed theTemenos merger, joined forces withprivate equity firm CVC to put for-ward a rival bid on 5 March justtwo weeks after Vista Equity Partners weighed in with a potential offerthought to be around 1.2bn.

Vista has until 19 March to confirmits bid, while ValueAct and CVC haveuntil 2 April.

After extending its original dead-line, Temenos yesterday confirmed

that discussions between the twoparties have now been terminated asno agreement had been made on thefinal terms of a transaction.

But the merger, which would cre-ate the largest vendor of banking soft-ware, could still happen according tothe Takeover Code. Temenos canannounce an offer if the board ofMisys agrees, if a third party declaresa firm intention to bid or if there is amaterial change in circumstances.

Temenos shares dipped six percent to SFr15.30. Misys dropped fourper cent to 3.28, valuing the compa-ny at 1.07bn.

BY LAUREN DAVIDSON

TECHNOLOGY


Ziggo brings a ray of sunshine to IPO market

ALONG with the sunshine camea hint of optimism about thefuture of the faltering IPO mar-ket yesterday as the Dutch

cable group Ziggo revealed there wassufficient demand for its upcoming

550m share issue.Private equity owners Cinven and

Warburg Pincus, advised by STJAdvisors, are selling 35m secondaryshares with guidance of 16.50 to18.50 per share. That will give a free-

float of 17.5 per cent, extending to20.125 per cent if a 15 per cent option-al allotment is exercised.

Under normal circumstances there would be nothing unusual aboutsuch an offering, nor would there benervousness about whether it mightgo ahead. Yet these are not ordinarytimes. The markets have been so dor-mant of late that something like thishas bankers dreaming of more tocome.

Ziggo is f loating in Amsterdam butthat doesnt stop hopes rising ofaction eventually in London, wherethe door has been bolted on newissues (with the odd exception) eversince the Glencore flotation last year.

This is another clear message thatthe IPO market is open, provided duecare and attention are taken, saysRupert Hume-Kendall, chairman ofglobal capital markets at BofA MerrillLynch, who worked on the successfulfast-tracked Ruspetro float in Londonearlier this year. The fast trackapproach also seems quite popularalongside realistic pricing, he adds.

According to IFR, the deal is beingsensibly priced. IFR says that at the

mid-point of the range, Ziggo is beingsold at an earnings multiple of about7.5 times, with peers Telenet and KDGat about eight times and nine timesrespectively.

In other words, the stock is being

issued at a relative discount to thecompanys peers in the sector. Whichis a good thing, given that so much ofthe breakdown in the UK market hasbeen blamed on unrealistic pricingon the part of the private equity sell-ers.

JP Morgan and Morgan Stanley are joint global co-ordinators and joint bookrunners with Deutsche Bankand UBS.

With Switzerlands Asian-focused

outsourcing group DKSH also head-ing towards an imminent flotation,there are hopes that some of theother deals that have been waiting onthe runway for some time might getoff the ground.

One is the flotation of the Germanchemicals maker Evonik, a deal soattractive that Goldman Sachs supre-mo Lloyd Blankfein turned out forthe original pitch last year. Yesterdaybuyout group CVC, a big investor inEvonik, hinted that there could be alisting by the end of June.

There are signs that confidence isreturning to the IPO market, but thatdoesnt mean its revival will be easy.

[email protected]

INSIDE TRACK

DAVID HELLIER

ANALYST VIEWS: WHAT WILL HAPPEN TOMISYS NOW? Interviews by Lauren Davidson

JULIAN YATES | INVESTEC

The worst case scenario is off the table we see Temenos withdrawalas a positive, as we foresaw material integration risk. It now becomes a guessinggame. The downside risk is less with Misys as a standalone play (even without achief executive) than with the Temenos merger.

GEORGE OCONNOR | PANMURE GORDON

We are not surprised that Temenos has walked away from Misys. Thebid was less attractive to shareholders given, in our view, that the combo couldnot afford a cash sweetener. This gives Vista a clearer run but private equity hasa habit of walking away from deals.

ROGER PHILLIPS | MERCHANT SECURITIES

We remain sceptical over Vista as Misys would be divergent in terms ofsize and profile compared to the funds previous deals. We think it is more likelythat Vista is taking a look under the hood of a competitor. Competitive tension islessening and so the potential for a price of circa 400p is receding.

ANALYSIS l Misys PLC

p


350

345

340

335

330

328.0012 Mar

Temenos pulls

out of mergerbid for Misys

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SAINSBURYS has claimed to havebecome the second-biggest onlinegrocer after its orders topped165,000 a week.

The supermarket said a 20 percent rise in orders per week, withan annualised turnover of 750m,makes its website the fastest grow-ing online grocery business.

Overall, Sainsburys still ranksthird behind Tesco and Asda, butthe retailers statement yesterdaysuggests it has made gains on itsrivals and leapfrogged Asda to takesecond place in online sales.

The latest Kantar Worldpanelfigures for the 12 weeks to 19February showed Tesco had a 29.7

per cent share of the UKs grocerymarket, followed by Asda with 17.5per cent and Sainsburys with 16.6per cent. In fourth place,Morrisons had 12.2 per cent.

Sainsburys also came out ontop in an online survey by IpsosMori, measuring customer servicelevels at its online store in compar-ison to Tesco, Asda, and online-only firm Ocado.

The survey ranked the retailerfirst for quality of products, avail-ability of delivery slots, speed ofdelivery and customer service.

Jon Rudoe, director ofSainsburys online, said:Thousands of new customers arechoosing Sainsburys.co.uk each week because its simple to useand like our stores, people are

assured of the service theyllreceive.

Were proud of our successes sofar, but it doesnt stop here, wevegot ambitious growth targetswhich we'll reach by continuing todeliver the best possible experi-ence for loyal and new customers.

Sainsburys closesgap in online salesBYKASMIRA JEFFORD

RETAIL

SVG Capital chairman NicholasFerguson is leaving the private equitygroup at the end of the year, after 28years with the firm.

Ferguson became a director at thecompanys previous incarnation,Schroder Ventures, in 1984 and waschairman when it was spun out intoSVG in 1996.

A prominent figure in the privateequity industry, Ferguson is also sen-ior non-executive director at BSkyB.

He spoke out in favour of highercapital gains tax for dealmakers in2007, claiming buyout firms wereoften paying less tax than their clean-ers.

Stephen Duckett, managing direc-tor at Hellman & Friedman, willreplace Ferguson on the board.

SVG non-execs Denis Raeburn andFrancis Finlay are also retiring at the

firms shareholder meeting on 23March.

FTSE 250-listed SVG mainly investsin funds managed by Permira, thoughit has diversified in recent months.

SVG chairmanFerguson leavesafter 28 years

CAMPARIS shares fell six per cent asthe Italian drinks company disclosedit had missed profit forecasts for theyear despite positive growth in mostareas.

Sales were up 9.6 per cent to1.27bn (1.07bn) leading to a net prof-it growth of 1.9 per cent to 159.2m but both fell short of analysts respec-tive forecasts of1.28bn and174m.

Gruppo Campari said the Americas its largest region,accounting for 33.5 per cent of groupsales grew 5.4 per cent, largelythanks to high demand for its WildTurkey bourbon in the US and strong

growth in Argentina and Canada.But the Italian market, which

accounts for 31.6 per cent of groupsales, remained mainly flat with anincrease of just 1.3 per cent while sales

of soft drinks fell 5.9 per cent.Campari pointed to Aperol as its

largest brand by sales value after theaperitif was boosted to a 38.9 per centgrowth last year due to strongdemand across Europe, particularly inGermany and Austria.

The Milan-based company spent31.5m on acquisitions last year,including Russian distributor Vascoand Brazilian brand Sagatiba twonew markets which Campari expectsto boost revenues over the comingyear.

Campari chief executive Bob Kunze-Concewitz said the drinks companycould spend up to 700m on acquisi-tions this year, but he said: Althoughwe are looking at opportunities, we

believe no deal is better than a baddeal.

Despite a historically soft start tothe year, Campari remains cautiouslyoptimistic about the year ahead.

Campari drops asit misses annual

earnings targetsBY LAURENDAVIDSON

LEISURE

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ANALYSIS l J Sainsbury PLC

p


302.5

300.0

297.5

295.0

292.5

290.0

299.9012 Mar

BYMARIONDAKERSPRIVATE EQUITY

I dont really shop online. I pre-fer the physical, tangible aspectof shopping; to actually see andhold what it is I ambuying. I supposeit is a good ideafor people whohave no time orare just a bitlazy!

I shop online at Tesco and I getit delivered, as they are the clos-est supermarket tome, and so that ishelpful. It is a verygood service, espe-cially considering itis difficult to deliverto where I live.

I dont shop online, although Ikeep thinking I should do itbecause it does seemlike a great idea.However, I haventgot round to ityet. I definitelywill though, asit seemsconven-ient.

LEIGHTON GOULDEURO MONEY

LIZZIE FORBESHYDROGEN

CITY VIEWS: DO YOU SHOP ONLINE? Interviews by Caolan Cosgrove

GLAXOS WITTY DOUBLES HIS PAY

GlaxoSmithKline boss Andrew Witty almost doubled his pay last year to net a total of6.78m in pay, bonuses and share awards. Witty netted 3.7m in long-term awards, upfrom 1.4m the previous year in a bid to close a competitiveness gap in the chief execu-tives pay packet, the pharmaceutical giants annual report showed yesterday.

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THE LABOUR Party has demanded araid on tax relief that top earners arecurrently granted on their pensioncontributions provoking an angryreaction from business chiefs.

Shadow chancellor Ed Balls said yesterday that the relief should beslashed from 50 per cent to 26 percent.

Ed Balls seems to think that thiscountrys wealth-creators can besqueezed indefinitely with increas-ingly punitive taxes, the Institute forDirectors said. We cannot allowBritain to become a place which per-secutes success.

Balls had argued that Labours poli-cy would ensure that the broadestshoulders played their part in reduc-

ing the deficit. The de Vere group of financialadvisers said that rumours of a multi-

billion-pound raid on pensions innext weeks Budget has resulted in asignificant spike in people askingabout the possibility of transferringtheir pensions out of the UK.

Stephen Herring, a senior tax part-ner at BDO, told City A.M. that a reduc-tion in the relief is possible, butadded: What makes it less likely isthat its at a level that GeorgeOsborne introduced himself twoyears ago. Politicians tend not to likereversing their own policies.

Responding to Labours pre-Budgetrecommendations, which also includ-ed support for the idea of a so-calledmansion tax and a cut in VAT, thepro free-market Institute forEconomic Affairs said: [Labour]should focus on setting out a compre-hensive plan for cutting spendingmuch further. Letting business create

more jobs, not proposing more taxes,is the key to closing the deficit andfunding public services.

BY JULIAN HARRIS

BUDGET

LLOYDS Banking Groups wholesaledivision has poached a DeutscheBank executive to be its new head ofe-commerce and over-the-counter(OTC) derivatives.

Joe Cassidy is leaving his job ashead of rates prime brokerage andOTC clearing at Deutsche to go to the

state-owned UK lender.It comes less than a week after it

emerged that Deutsches incomingco-chief executives are planning amajor shake-up of the banks manage-ment.

One industry source called thelenders investment banking teampretty bloated.

Lloyds, by contrast, is keen toexpand its cross-selling of productsbetween its retail and wholesale divi-

sions under the leadership of formerCitigroup banker Andrew Gczy.

Deutsche loses prime brokeragechief to Lloyds wholesale divisionBANKING


Osborne may be set to cut relief on pensions contributions Picture: GETTY

Directors hitback at Ballspensions plan

STAMP DUTY

The chancellor appears likely to close aloophole by which people can avoid pay-ing stamp duty on properties by putting

expensive properties in off-shore firms.Stephen Herring, a senior tax partner atBDO, said the change is as close to adead cert as you can get. MANSION TAX

The Conservative Osborne is unlikely tointroduce a new mansion tax, an ideafloated by his Lib Dem colleagues. Yetcouncil tax bands are due to be updated,and extra bands for multi-million poundproperties could be added. This would

enable higher taxes to be charged onvery high value homes. TYCOON TAX

Deputy prime minister Nick Clegg floated

the idea of a minimum tax on highincome earners over the weekend. Theplan was widely criticised by leadingaccountants as unnecessary and isunlikely to ever see the light of day. YetHerring expects the Budget to includeanti avoidance measures, which Cleggcould claim as a political victory. CORPORATION TAX

Osborne is believed to favour cutting cor-poration tax to 20 per cent, although

this may only be voiced as an aspiration.The rate is due to come down to 24 percent on 1 April 2013. Herring suspectsthat the chancellor may reduce this to 23

per cent as a boon for businesses. PENSIONS

Relief on pensions contributions for toprate earners could be cut, although notby as much as Labour is demanding. 50P TOP RATE

No chancellor will want to stand up andnot have a couple of goodies in his bags,Herring told us yesterday. Yet any nicesurprises are unlikely to involve a reduc-tion in the top rate of income tax.

Budget 2012: what will be in Osbornes red box?

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BRITISH Airways owner IAG hasoffered concessions to EU antitrustregulators in a bid to get regulatoryapproval for its takeover of BMI, thelow-cost British unit of German car-rier Lufthansa, the EuropeanCommission said yesterday.

The Commission, tasked withensuring a level playing field in theEU, did not provide details of theconcessions, in line with its usualpolicy.

It extended the deadline for a deci-sion on the deal to 30 March from 16March, the EU executives websiteshowed.

The BMI takeover would boostIAGs share of runway slots atLondon Heathrow airport to about52 per cent from 43.1 per cent, al low-ing it to launch lucrative long-haul

routes.IAG also declined to give details ofthe concessions.

Rival and failed BMI bidder VirginAtlantic has urged antitrust regula-tors to veto the deal, saying it wouldharm competition and push upprices, given the concentration ofownership at close-to-capacityHeathrow.

The European Commission typi-cally requires airlines to cede slotsand offer rivals access to their fre-quent flyer programmes in returnfor clearing mergers and acquisi-tions in the sector.

Lufthansa promised to offer slotsto allow new entrants to operateflights on four routes singled out bythe regulator, during its 2009takeover of SN Brussels Airlines.

Other concessions related to itscode-share agreements and frequentflyer programmes.

Last week, UK consumer regulatorthe Office of Fair Trading said itwould not open its own probe into

the purchase, leading opponents topin their hopes on the EUs investiga-tion.

BYHARRY BANKS

TRANSPORT

TRAFFIC at airports operated by BAArose by 2.5 per cent in February, com-pared with the same period the previ-ous year, with Londons Heathrowbenefiting from a surge in demand forflights to Brazil.

BAA, which is Britains main airportoperator and majority owned by

Spanish infrastructure groupFerrovial, said yesterday that its air-

ports carried 7.3m passengers lastmonth. The figure was inflated by anextra day because February was a leapyear.

Nearly 4.8m passengers passedthrough Heathrow, a rise of 3.8 percent on the year before.

BAAs airports have continued todemonstrate their resilience in theweak economic environment we cur-

rently face, said BAAs chief executiveColin Matthews.

Surge in Brazil flights propelsBAA traffic figures skywardTRANSPORT


IAG gives wayin an effort toseal BMI deal

IAG boss Willie Walsh is trying to buy BMI and its lucrative Heathrow landing slots

NEWS | IN BRIEF

Cobham withdraws Danish bidBritish aero electronics group Cobhamsaid it was withdrawing its 273m bidfor Thrane & Thrane after the Danishcommunication equipment firm rejectedits offer. Cobham said it had been in talkswith Thrane & Thrane regarding a poten-tial deal over the last year, and submitted

an offer of 420 Krone per share on 8February. Cobham said it reserved theright to reconsider its position.

Stagecoach bid for Devon busesStagecoach is planning to buyFirstGroups North Devon bus operations,the FTSE 250 transport group said yes-terday. Stagecoach will buy around 30vehicles that operate on 10 routes inNorth Devon in a deal worth 2.8m,which must still be cleared by the Office

of Fair Trading.

CPP to cut one in ten workersTroubled card insurer CPP is seeking tocut ten per cent of its UK workforce asthe firm attempts to restructure its busi-ness in the aftermath of a damagingprobe by regulators. The firm currently

employs over 1,300 people and if notenough take voluntary redundancy by theend of March, the firm will consider com-pulsory redundancies. CPP has beenunder investigation from the FinancialServices Authority since last March overallegations of mis-selling its card protec-tion products.

Premier Foods secures lifelinePremier Foods, the company behind brandsincluding Hovis and Mr Kipling, was thrown

a lifeline by its banks yesterday after it wasgiven more time to repay its 1.2bn ofloans. The refinancing deal with its banksincluding Lloyds and Royal Bank ofScotland will see Premiers repaymentdeadline extended from December 2013 toJune 2016.

Arena canters to a profit riseRacecourse owner Arena Leisure yesterdayposted pre-tax profits of 4.2m, up 15 percent, after the average attendance of its352 events last year grew by 7.8 per centto 1,941. The number of hospitality guestsincreased by 14 per cent to 51,500. But acutback in the amount collected frombookmakers and distributed by theHorserace Betting Levy dragged Arenasrevenue down four per cent to 61.5m as ittook a 7.3m hit.

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TULLETT Prebon is set to launch anelectronic platform for interbank cur-rency trading in the run up to expect-ed changes in the system of globalregulation.

The interdealer broker, led by City veteran Terry Smith (pictured), wants to use technology italready owns to build a for-eign exchange trading plat-form, focused on currencyderivatives at first.

The move was hinted at in Tulletts results lastweek, when the firm

outlined the successof tpSwapdeal, itshybrid interestrate swap tradingplatform.

We intend to launch similar plat-forms for a number of other prod-ucts, which are designed to beeffective within both the currenttrading landscape and under all cur-rently anticipated regional regulatoryenvironments, it said.

At the time Smith, the chief execu-tive, warned the firm faced highercosts from developing new electronic

platforms and dealing with extraregulation. Tullett has not dis-closed a date for the launch but isworking on the basis of regulato-ry changes in the European Union

and the US over the next year.Last week the broker,

which matches buyers

and sellers of curren-cies, bonds and swaps,said pre-tax profits for2011 were 119.2m, adrop of 15 per cent

Tullett plots a newFX platform ahead

of fresh regulationBY PETER EDWARDS

CAPITAL MARKETS


THE chief executive of Volkswagenreceived a 17.46m (14.68m) paypackage for last year after recordresults for Europes largest carmaker.

Martin Winterkorn (right) receivedthe award, including a 1.89m basesalary and a 11.04m bonus, after VWposted a 11.3bn operating profit,which it aims to match this year.

It also said 2012 sales will beat lastyears 159.3bn but the firm needs torecoup substantial developmentand start-up costs, Winterkorn added.

VW has not revealed the cost oflaunching its compact car technology but last September it said62.4bnwill be spent on factories, vehiclesand development as part of itsrolling five-year budget.

It has been boosted by thesteady growth of car markets inAsia, the US and Latin America,which may help it to increasedeliveries this year beyondthe record 8.3m carsachieved in 2011.

It plans to roll out morethan 40 new models orupdated vehicles in 2012.

BYPETER EDWARDS

AUTOMOTIVE

TAKEOVER DRAMA FOR STAGECOACH

PERFORMING arts group Stagecoach has agreed to be bought by Lifeskills Education for6.5m. Aim-listed Stagecoach will be taken private under the deal, with managementexchanging their shares for stock in Lifeskills. Shirin Gandhi, owner of Lifeskills, said thefirm has prospects for expansion without the confines of the public markets. Lifeskills isbeing advised by CV Capital, while Smith & Williamson is advising Stagecoach.

NEWS | IN BRIEF

Tiffany ramps up Swatch spatUS jeweller Tiffany has filed a $590m(377m) counter-claim against SwatchGroup, the Swiss watchmaker said yes-terday, in the latest volley in the compa-nies feud over a failed deal to sellwatches together. Tiffany's claim in aDutch arbitration court comes three

months after Swatch, the world'slargest watchmaker, sued it for lostprofits it estimated at $4.2bn. The com-panies ended their deal in September.Swatch said Tiffany's claim has no fac-tual or legal basis and it will contest itvigorously.

Laird sells Chinese arm for 20mEngineering firm Laird has sold off itsloss-making handset antennae businessin China for 20m. The firm, which saidit would exit the business last year aftera strategic review, has offloaded theassets to Shenzhen SunwayCommunications. It expects the deal tocomplete in the second half of the year.

Begbies says insolvencies fallingProfessional services group BegbiesTraynor cut 30 of its insolvency practi-tioners last year as fewer UK companieswent bust, it said in a trading update

yesterday. The firm said low interestrates had helped to keep the insolvencymarket subdued, though it has beentrading in line with expectations thanksto improved cost control and margins.

MORE NEWSONLINE

www.cityam.com

Road to riches for17.5m VW chief

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time between Mumbai and NewDelhi, with meetings scheduled with top politicians and business-men.

Goldman Sachs has held direc-tors meetings in emergingeconomies before, making the trip

to China and Brazil in recent years.Sonjoy Chatterjee, chairman & co-CEO of Goldman Sachs India, toldThe Times of India: With inflationeasing and the reversal in monetarytightening, our country is now at

the beginning of a newgrowth stimulus. In thatcontext, the timing ofthe boards visit bearssignificance.

Indias economy hascontinued to boom asits Western rivals havesuffered, with GDP

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Goldman Sachs directors will

be trading downtownManhattan for upstartMumbai as they hold their

annual meeting in India for thefirst time ever.

The 12 members ofthe board, includingIndian steel billion-aire Lakshmi Mittal(pictured), havedecided to make the

highly symbolic tripto the subcontinentin order to empha-sise their commit-ment to Asiasthird largest econ-omy and considerinvestment oppor-tunities in thefast-developingcountry.

The WallStreet bankschairman LloydBlankfein, chiefoperating officerGary Cohn andthe other directorsare set to spend threedays in the country, arriving on29 March. They will split their

17

The CapitalistCITYA.M. 13 MARCH 2012

Got A Story? [email protected]

TIME TO PUT ON THE RUNNING SHOESNow in its eighth year, the 2012

Standard Chartered CityRace, to be run on 12 Julyat 19.15, is open for admis-sion. Last year the 5kmrace through closedstreets across the SquareMile attracted a record6,500 runners from nearly400 companies.

Those who have racedbefore get priority places,while others can registertheir interest on the web-site www.cityrace.co.uk

Five pounds from everyentry fee will be donatedto the race beneficiary,Seeing is Believing, a glob-al initiative to help tackleavoidable blindness.

Standard Chartered haspledged to match allmoney raised in conjunc-

tion with the race poundfor pound, doubling theimpact of everybody elsestremendous efforts. Joint race director David Bedford says the event is a key date in the City diary Picture: GETTY

GOLDMANGOES TO

INDIA FORA BOARDMEETING

Member of theboard Lakshmi

MittalPicture: GETTY

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THE UK should start seeing growthin the next six months, accordingto the Organisation for EconomicCooperation and Development(OECD).

After 10 months of decline, theOECDs index stabilised inDecember and grew 0.1 per cent inJanuary.

The worlds leading economiesare showing signs of expansion this year, with the Eurozone, US, and

India all showing growth forJanuary, according to their respec-

tive OECD indicators.The US in particular had a posi-

tive start to the year by improving by 0.7 per cent, equalling itsgrowth in December, suggestingthe American economy hasregained momentum.

The outlook was less positive forBrazil and China, which bothdeclined. Despite this, the OECDsoverall leading indicator showed a0.4 per cent growth for January.

IHS Global Insight said it expectsthe UK to eke out modest growth inthe first quarter, likely to be below

0.3 per cent.Chief UK and European econo-

mist Howard Archer said: Dataand surveys for January andFebruary combined have been mod-estly improved overall compared tothe fourth quarter of 2011,although an unexpected drop inindustrial production in Januaryand a slowdown in services expan-sion in February provided starkreminders that the UK economy isnot yet out of the woods.

Due to these headwinds, and theupcoming public holiday for theQueens Diamond Jubilee, IHS doesnot expect the UKs modest growth

to develop until the second half of2012.

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UNEMPLOYMENT has stopped ris-ing at last, as employers gain confi-dence and take on staff, accordingto a study out today.

After flatlining in the currentquarter of 2011, Manpowersemployment outlook rose for thesecond quarter of 2012, with a net balance of two per cent of firmsincreasing their headcount.

The Federation of SmallBusinesses (FSB) also reportedgrowth in hiring, with a net bal-ance of 1.3 per cent looking to takeon staff in the next three months.

However, the upturn is very limit-ed only nine per cent toldManpower they anticipate increas-

ing staffing levels in the secondquarter, while seven per cent willlower headcount and 82 per centexpect no change.

The outlook is strong in London,with a net balance of five per centintending to hire, partly due to theOlympics, Manpower believes, aswell as the East Midlands, with a balance of 12 per cent and thenorth west, at nine per cent.

However, a net balance of two percent in the north east and six percent in the east are planning onreducing headcount, the studyfound.

Although its too early to saythat a full-blown recovery is uponus, it does feel like were turning acorner when it comes to the jobsmarket, said Manpowers Mark

Cahill.Businesses that were battening

down the hatches in the last quar-ter appear to be considering takingon staff. Weve noticed much moreflexibility among employers, partic-ularly in the market for permanenthiring.

Firms hiring as theeconomy improvesBY TIMWALLACE

UK ECONOMY

OECD sees fresh signs of growth inUK and Eurozone as the States boomWORLD ECONOMY

NEWS | IN BRIEF

TUC: Spend more on the youngScrapping austerity plans and support-ing investment and young people are thebest way to boost economic growth, theTrades Union Congress (TUC) said yes-terday. In its Budget submission, theTUC called for the credit easing schemeto be accelerated and doubled to 40bn,

a state investment bank to be estab-lished, and apprenticeships to be extend-ed to at least three years in length.

SMEs want higher trainee payMost small firms would support a rise inthe minimum wage for apprentices,according to a study from theFederation of Small Businesses (FSB).Eight in ten said they would be happy tosee the weekly wage rise to 123.Cutting employers national insurancecontributions would help boost employ-ment, the group argued, suggesting thecuts be targeted at young people.

Europe immigrants take low jobsThe vast majority of European immi-grants to the UK come to work in low-skilled jobs rather than sponge off thestate, according to the influential thinktank Open Europe. But Brits are losingout on those low-paid jobs due to poor

domestic policies that leave the nativepopulation ill-equipped to work. OpenEurope said that an increasing numberof the 3m jobs created in the last 14years have gone to immigrants.

FISHER PLAYS DOWN FPC HOPES

THE BANK of Englands new financial policy committee (FPC) should not be expected tomaintain stability continuously, FPC member Paul Fisher said last night. Just as mone-tary policy makers will never be able to abolish the business cycle, financial policy mak-ers will never be able to abolish the credit cycle, he said.

REAL estate professionals have deliv-ered the most upbeat forecast onhouse prices since May 2010, with pre-dictions of a stable market in the nextthree months. The Royal Institute of Chartered

Surveyors (RICS) found those ques-tioned were evenly split betweenexpecting prices to go up and down,leaving a net balance of zero.

The neutral outlook is a strongimprovement from January, when a balance of 14 per cent of surveyorsexpected prices to fall and Decemberwhen the figure stood at 23 per cent.

In the last three months a net bal-ance of 13 per cent reported fallingprices, though 68 per cent reportedprices were unchanged and the vastmajority of price falls were smaller

than two per cent.London was the only region to expe-

rience general prices rising, with a netbalance of 53 per cent of surveyors wit-nessing rising prices, while a balanceof 12 per cent reported falling prices inthe south east.

The market performed worst in theWest Midlands and Northern Ireland,where 47 per cent saw prices falling.

House prices beginto stabilise after

22 months of fallsBY TIMWALLACE

HOUSING

ANALYSIS l RICS regional house prices

%

WM EA YH Scot EM Wales SW SE NW NorthEng+W Lon

40

20

0

-20

-40

-60

BY CAOLAN COSGROVE

ANALYSIS l Manpower employment

1993 1995 1998 2001 2004 2007 2010

30

25

20

15

10

5

0

-5

-10

-15

-20

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THE government yesterday approved a150 megawatt (MW) biomass powerplant to be developed by utility E.ON,

but the company said it was reviewingthe project in light of a proposed cutin state subsidies four years from now.

E.ONs climate and renewables armcan now build a plant in the westernEngland port city of Bristol to powerup to 160,000 homes, the departmentof energy and climate change said.

But E.ON announced it would firstre-examine its strategy on renewableenergy.

Developers say that governmentplans to reduce subsidies for dedicated

biomass plants which burn wood pel-lets and farm waste to producepower by seven per cent from April2016 have made investment decisionsharder.

We will now take some time toreview the prospects for the project inlight of the UK governments current

banding review and how it fits with

our portfolio of renewable energyinvestments in the UK, an E.ONspokeswoman said.

Last month, UK coal-fired powerplant operator Drax scrapped plans to

build a 290-MW biomass plant on itssite in North Yorkshire, saying statesupport levels for the renewablesource were still too low.

E.ONs potential new power stationwill burn imported wood pellets, ener-gy crops and waste wood to produceelectricity. The company declined togive a start date for the plant given thereview proceedings.

E.ON reviews

plans to buildbiomass plant

Gulf Keystone shares plunge

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GULF Keystone Petroleum sharesplunged nearly 17 per cent yesterday

as investors remained unconvinced by the companys update on oildrilling in the Kurdistan region ofnorthern Iraq.

Stocks in the Aim-listed companyfell 47p to 240p despite its statementthat its Shaikan-4 appraisal well, inparticular, was giving excellentresults.

Analyst Dougie Youngson, of

Seymour Pierce, said: Overall theseare a mixed set of operationalresults for the company. The com-pany is clearly making progressat Shaikan, but we had been

expecting more of an update atBer Bahr-1 which may result inthe market being slightly disap-pointed.

We also note that CEO ToddKozel [pictured] was inter-

viewed... where he dis-cussed the independenceof the company. He statedthat in the short to medi-

um term GKP wouldremain independent, but also stated that inthe longer term thatthis may not continue

to be the case.Gulf Keystoneshares have seen

volatile trading inthe last year,

with a lowof 100.75pand ahigh of425.25p.

BYHARRY BANKS

ENERGY

BY JENNY FORSYTH

ENERGY

SHARES in gold miner Centamin

rallied yesterday after it said nor-mal operations had resumed at itsSukari gold mine in Egypt.

The Egypt-focused miner said on6 March it had temporarily haltedoperations at its flagship gold minedue to illegal labour unrest, send-ing its shares down over 12 per cent.

The miner said the unsanctionedstrike was due to a breakdown in

talks with workers over pay andbenefits.

Yesterday it reassured investors,

saying that while first-quarter pro-duction and cash costs will beaffected by the stoppage, its full-

year outlook remains unchanged. The Sukari gold mine, the first

large-scale modern gold mine inEgypt, is Centamins main produc-ing asset.

Shares closed up 4.36 per cent yes-terday at 85p.

Centamin picks up afterSukari dispute resolutionMINING


CARILLION WINS THAMESLINK CONTRACT

SUPPORT services firm Carillion announced yesterday it has been chosen to deliverfurther construction work for the Network Rail Thameslink programme, securing acontract worth up to 120m. Carillion will be responsible for improvements to depotsand sites to allow the introduction of the new 12-car fleet across the cross-London raillink. Picture: REUTERS

NEWS | IN BRIEF

Viterra rises on Glencore interestShares in Viterra, the Canadian grainfirm being circled by Glencore, jumpedmore than four per cent yesterday asmore possible bidders emerged. TheSaskatchewan firm briefly hit a three-and-a-half year high on the Toronto

Stock Exchange. It has not spoken pub-licly since admitting third-party intereston Friday, now known to be fromGlencore. Canadian companies worthover C$330m (212m) are subject to agovernment review to decide if atakeover is of net benefit to the coun-try.

Sirius confident on test resultsSirius Minerals, the company behindplans for a new potash mine in NorthYorkshire, yesterday reported strongresults from its testing. Chief executiveChris Fraser said: "These importantresults have confirmed the... world-classnature of the York Potash Project.

Aminex pares back its lossesOil and gas group Aminex reported netlosses of $900,000 (576,000) for theyear to the end of December downfrom $4.5m in the previous year. It saidgross revenues had risen to $9.3m, upfrom $7.1m in 2010, and total produc-tion in the US had increased by 62 percent to 130,250 barrels per day. Aminexnow plans to build its portfolio in Africaand divest non-core US assets.

Ferrex declares iron resourceAim-listed miner Ferrex yesterdaydeclared a maiden Joint Ore ReservesCommittee (Jorc) compliant resource of139m tonnes at its Malelane iron oreproject, in the Mpumalanga province ofSouth Africa.

ANALYSIS l E.ON AG


17.50

17.25

17.00

16.75

16.8212 Mar

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Morrison FoersterJustin Stock has joined the law firmsLondon office as partner in the corporategroup. Stocks experience is in cross bor-

der acquisitions and disposals for tradebuyers and he will be a core element inthe development of the firms Londoncorporate and capital markets practices.

Superglass HoldingsSuperglass, the UKs only independentmanufacturer of mineral wool insula-tion, has appointed John Colley as non-executive director with immediateeffect. He will succeed Tim Ross as

chairman of the company on 31 March.Colley was previously group managingdirector of BPB and managing directorof St Gobain.

MetLife AssuranceMetLife Assurance, a provider of risktransfer solutions in the UK and Ireland,has named Wayne Daniel as chief execu-tive with immediate effect. Daniel joinedMetLife Assurance as vice president in

2011, and succeeds Dan DeKeizer, who isnow vice president, global employee ben-efits, of MetLife.

Aon HewittThe human resources business of AonCorporation has announced the appoint-

ment of Colin Haines to its global retire-ment and investment practice. Haineswas partner and consulting actuary atLCP for five years, before which heworked as an in-house pensions strate-gist at BAE Systems.

LamprellLamprell, a provider of diversified engi-neering and contracting products andservices to the oil and gas renewables

industry, has appointed Deena Mattar asnon-executive director. Following theretirement of Richard Raynaut from theboard, Mattar is expected to assumechairmanship of the companys auditcommittee. Mattar served as groupfinance director of Kier Group from 2001

to 2010.

Miller BuckfireThe advisory bank has announced RonKubick as a managing director, effectiveimmediately. Prior to this, Kubick was amanaging director at Morgan Stanley,and was previously employed withBarclays Capital. He has also spent timeat GE Capital and has a wealth of experi-ence in restructuring capital markets.

CITY MOVES | WHOS SWITCHING JOBS Edited by Tom Welsh

+44 (0)20 7092 0053morganmckinley.com

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

in association with

US stocks up aheadof Feds statement

DEFENSIVE names rallied in anotherwise flat day for WallStreet yesterday as investorspaused after recent gains and

looked ahead to the Federal Reservesmonetary policy statement.

Investors will eye todays statementfrom the US central banks FederalOpen Market Committee to see whether the Fed will cool downexpectations of more easing of mone-tary policy, which might make it diffi-cult to extend the rally.

Markets were recently rattled afterFed Chairman Ben Bernanke stoppedshort of giving a strong signal of morestimulus during congressional testi-mony.

Investors got a shock when Chinareported its largest trade deficit in atleast a decade.

It isnt surprising that we wouldconsolidate, given the question marksabout China and how far stocks havecome, said Jonathan Lewis, chiefinvestment officer of Samson CapitalAdvisors in New York. Risk assets arethe focal point in a see-saw, with signsof domestic growth on one side and

overseas events on the other.Utilities, consumer staples and tele-

com were the days top three sectors,with the S&P utilities index gaining1.1 per cent. Late Friday, ConstellationEnergy Group agreed to pay $235m tosettle a probe of its wholesale powertrading, clearing the way for its$7.9bn sale to rival utilityExelon.Constellationrose three per cent to$37.23 while Exelon gained 2.3 percent to $39.81.

The Dow Jones industrial averageadded 37.69 points, or 0.29 per cent,to 12,959.71 at the close. The Standard& Poors 500 Index inched up just 0.22

of a point, or 0.02 per cent, to1,371.09. But the Nasdaq CompositeIndex dipped 4.68 points, or 0.16 percent, to close at 2,983.66.

With the days tiny gain, the S&P500 has closed in positive territory forthe past four sessions. The bench-mark index is close to nearly a four-year high set two weeks ago and facesstrong technical resistance. The CBOE Volatility Index, or VIX, closed at15.64, its lowest level since May 2011.

Equities had traded modestly lowerearly in the session as weak data fromChina cast some doubts over the paceof global economic expansion. Still,gains in groups less tied to growth off-set weakness in cyclical sectors.

Chinas trade balance plunged$31.5bn into the red in February asimports swamped exports. The datacast some doubt on global economicgrowth prospects after Fridays US

payrolls pointed to an improvingdomestic economy.

BRITAINS blue-chip index ended

with a small gain yesterday, asprofit-taking on mining compa-nies and banks was offset by

gains among defensive shares.The FTSE 100 index ended up 5.26

points, or 0.1 per cent, at 5,892.75,

having traded 90 per cent of its 90-dayvolume average.The index only moved into positive

territory late in the session, in whattraders interpreted as a signalinvestors were willing to buy anyindex dip and remained bullish onthe market.

We have seen bargain hunterscoming with the dips we have seen sofar. That is positive, said JoshuaRaymond, a market strategist at CityIndex.

The FTSE is up 317.8 points thisyear, or around 5.7 per cent. A rallythat started in late November beganto lose momentum in March, withthe index dropping around 24 pointsin each of the first two weeks of themonth, while weekly charts showeddeclining highs and lows.

We are going through a transi-tion. If we go below [last weeks low

of] 5,750 this week, then that is goingto indicate that there is a correction

lingering, but as long as we stay abovethat level, we are looking for bargainhunters to come in and pick up theloose.

Raymond said a catalyst for equi-ties this week would be the FederalReserves Open Market Committee(FOMC) meeting today, wheninvestors would be looking for hintsof more quantitative easing to boostthe economy.

But a spate of strong economicdata from the United States hasraised expectations that the FOMC

might be reluctant to provide addi-tional stimulus.Fading prospects for more Fed

intervention and weak economic datafrom China, the worlds largest con-sumer of metals, weighed on miningstocks, which closed 0.6 per centlower yesterday.

Banks were also targeted by profittakers watching technical indicatorsas the sector failed to close above a23.6 per cent retracement of its 21February to 6 March move at the endof a three day-run on Friday.

A report suggesting that all of theUKs major banks could face aninquiry for allegedly mis-selling com-plex interest rate derivatives alsoweighed on the sector.Barclays, Lloyds Banking Groupand Royal Bank of Scotland fellbetween two and 3.2 per cent, whileHSBCwas down 0.1 per cent.

Traders said some investors wererotating out of banks into real estate

groups, encouraged by improvingsentiment on the commercial proper-ty market after a major acquisitioninvolving French property developerKlepierre on Thursday.

The Klepierre deal has just high-lighted some of the most attractive valuations in the sector, said JonStewart, an analyst at Espirito SantoInvestment Bank.

Hammerson was trading at 0.75times its book value: those valuationsover-discounted any likely weaknessthat you might see even in retail

property.British Land, Hammerson andLand Securities rose between 1.5 percent and 2 per cent in high volumeyesterday, extending recent gains.

All three stocks had traded at 0.8times their 12-month forward bookvalue at the close on Friday, ThomsonReuters Starmine data showed.

Stewart said the sector rally hadlikely now run its course after adecent outperformance.

FTSE lifts as defensive gainsoffset miner and bank lossesTHELONDONREPORT

THENEW YORKREPORT

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

ANALYSIS lCarnival PLC

2,000

1,975

1,950

1,925

1,900

1,875

1,850


p1,947.00

12 Mar

CARNIVALInvestec held Carnival as a buy after it posted first quarter figures in linewith estimates last week. The broker said underlying bookings are buoy-ant despite marketing being pulled for two weeks following the capsizingof the Costa Concordia, which killed at least 25 people. Fuel costs and for-eign exchange rates have moved against Carnival, wrote James Hollins andPaul Leyland. The target price was kept at 2,500p.

ANALYSIS lMan Group PLC

150.0

147.5

145.0

142.5

140.0

137.5


p

137.5012 Mar

MAN GROUPHSBC downgraded Man Group from overweight to neutral (volatile)after the worlds largest listed hedge fund posted results for the ninemonths to the end of December and announced plans to boost future divi-dends. The broker cut its target price from 150p to 140p and wrote: [The]decline of guaranteed product is our main concern although the Japaneseonshore market offers a distant ray of hope.

ANALYSIS lHunting PLC950

925

900

875

850

825

800


p917.00

12 Mar

HUNTINGJP Morgan Cazenove upgraded oil services firm Hunting from under-weight to neutral and said its shrewd acquisitions are paying off afterit posted a forecast-beating 70 per cent jump in 2011 profits. The targetprice is 998p, up from its previous target of 732p. The oil and shale indus-try expects to see the drilling of more horizontal wells and the broker saidHunting is now able to access more revenue per well drilled.

p

7 Mar6 Mar 8 Mar 9 Mar 12 Mar

5,900

5,800

5,775

5,825

5,850

5,875

ANALYSIS l FTSE 5,892.7512 Mar

GraingerLaure Duhot will be joining the UKs largest list-ed residential property landlord in the new roleof director of strategic capital markets. She willoversee Graingers evolving business strategy,with specific focus on the creation and manage-

ment of new joint ventures, funds and strategicalliances. Duhot

cityam 2012-03-13

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