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n PM reshuffles cabinet

but no shift in key policies

BUSINESS WITH PERSONALITY

DAVID Cameron last night put the fin-ishing touches to his first ministerialreshuffle, with sweeping changes tothe lower ranks but with most top cab-inet members remaining in place.

Despite changing dozens of positionsthe Prime Ministers spokesmanadmitted the reshuffle did not pointto significant changes in coalition pol-icy, but was about ensuring we havethe right ministers in place to deliverthe governments programme.

George Osborne, Vince Cable,Michael Gove, William Hague, IainDuncan Smith and Theresa May allkept their jobs.

Before the reshuffle was completeMayor of London Boris Johnson hadalready launched a direct attack onthe decision to replace transport secre-tary Justine Greening, who opposes athird runway at Heathrow, with for-mer chief whip Patrick McLoughlin.

There can be only one reason tomove her and that is to expandHeathrow Airport, Johnson said. It istime for the government to level withLondoners. Are they in favour of athird runway at Heathrow or not?

Meanwhile Jeremy Hunt was a sur-prise move from culture secretary tothe Department of Health, somethinghe called the biggest privilege of mylife. Hunt replaces Andrew Lansley,who paid the price for failing to con-vince a sceptical public of the need forfurther NHS reform.

Former disabilities minister MariaMiller takes over at the Department ofCulture, Media and Sport.

Ken Clarke was replaced as justice

secretary by Chris Grayling, who ismuch tougher on sentencing and lawand order but who also believes indoing more to rehabilitate prisoners.

www.cityam.com FREE

Clarke will stay in the cabinet with anadvisory role. Downing Street alsoditched convention to enable BaronessWarsi, who lost her job as party chair-man, to continue to attend cabinet

with the newly created designation ofsenior minister of state.Grant Shapps is the new Tory party

chairman and Andrew Mitchell is

chief whip. Welsh secretary CherylGillan, environment secretaryCaroline Spelman and Leader of theHouse Sir George Young all departedfor the backbenches.

With limited changes at the top ofthe cabinet, attention instead focusedon the arrival of junior ministers whowere first elected in 2005 and 2010 and

are set to shape government policy inthe future.There were new faces at the Treasury

where former Deutsche Bank manag-ing director Sajid Javid, a political pro-

tege of chancellor George Osborne, hasbecome economic secretary and willwork alongside newly appointed jun-ior minister Greg Clark, who will have

FTSE 100 M5,672.01 -86.40 DOW M13,035.94 -54.90 NASDAQn 3,075.06 +8.10 /$ 1.59 unc / 1.26 unc /$ 1.26 unc

BY JAMES WATERSON

ISSUE 1,710 WEDNESDAY 5 SEPTEMBER 2012

Certified Distribution

02/07/12 til 29/07/12 is 131,194

responsibility for the City and supply-side reforms.

In January they will be joined by for-mer Goldman Sachs banker PaulDeighton, who delivered a successfulOlympic Games as chief executive ofLocog and will become minister foreconomic delivery after accepting apeerage. Deighton will replace LordSassoon and have responsibility forimplementing infrastructure pro-grammes, reporting to the chancellorGeorge Osborne.

He will be tasked with bangingheads together hes shown hes beenable to do [this] at the Olympics, aTreasury spokesman told City A.M.

Elsewhere, Conservative MPs MichaelFallon and Matthew Hancock havebeen sent to join the Department ofBusiness, Innovation and Skills inorder to act as a counterweight toLiberal Democrat Vince Cable.

Nick Clegg decided against changingany Lib Dem cabinet ministers but didreturn former Treasury secretaryDavid Laws to the government by offer-ing him a role in the cabinet office anda junior ministerial position at theDepartment for Education.Joining him as an education minister

is rising Conservative star Liz Truss,whose calls for more rigorous examstandards found favour with secretaryof state Michael Gove.

COALITION 2.0n Change at Transport,

NHS, Culture and Justice

nBoris attacks Cameron

over Heathrow expansion

PICK UPIN SERVICES

BOOSTS HOPEOF RECOVERY

SEE PAGE 5

Jeremy Hunt, secretary of statefor health (moves from culture)

Liz Truss, under secretary at theDepartment for Education

Matt Hancock, under secretaryfor business and education

Greg Clark, City minister

at the Treasury

Paul Deighton, minister foreconomic delivery

Maria Miller, secretaryof state for culture

Michael Fallon, ministerof state for business

Patrick McLoughlin, secretaryof state for transport

Sajid Javid, economicsecretary to the Treasury

MORE INSIDE:Allister Heath: Page 4Cut-out-and-keep guideto the cabinet: Pages 16-17Analysis and comment inThe Forum: Pages 20-21

Some of the new appointments to the cabinet

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[email protected] me on Twitter: @allisterheath

THE FBI last night denied claimsfrom hacking group Anonymousthat hackers had infiltrated an FBIagent's laptop and lifted a file withidentification numbers for morethan 12m Apple products.

An Anonymous affiliate calledAntiSec posted a file on the web onMonday that it said contained morethan 1m Apple ID numbers takenfrom an FBI laptop in March. TheFBI said last night there was noevidence to support claims.

Apple ID numbers are assigned toproducts such as iPhones or iPads toidentify users.

FBI deny Apple

ID hack claimsBY CITY A.M. REPORTERWheatley: Review payrules to stop missellingTOP BANK bosses will today be toldto review pay practices to makesure customers are not beingripped off by unscrupulous salestactics, as Martin Wheatley unveilshis report into mis-selling.The managing director at the

Financial Services Authority (FSA)is not expected to ban commission-based remuneration, but is expect-ed to warn that such arrangementsmust be structured in a way thatbenefits the consumer, and notjust the sales teams pay packets.

Wheatley is understood to be con-cerned that misselling such asthe payment protection insurancedebacle, and the interest rateswaps scandal could in somecases be caused or exacerbated bystaff being given the wrong incen-tives.As a result, he wants pay struc-

tures to be reviewed to make surestaff will not be rewarded for inap-propriately pushing products ontothe wrong customers.

Banks are already taking actionto clean up after the scandals Lloyds boss Antonio Horta Osorio,for example, quickly took steps tocompensate burned customers torepair the banks damaged reputa-tion, setting aside more than 4bnto cover the costs.

Insurer plans scalpel-shapedskyscraper in the City.The US insurer planning to buildLondon's newest skyscraper has said the35-storey tower is a symbol of itsambitious plans for European expansion.WR Berkeley, which has commissionedarchitects Kohn Pedersen Fox, plans tofinance the 500m project entirely fromits own balance sheet. A quarter of thebuilding, which resembles an uprightscalpel, will be used as offices for thecompanys 240 UK staff.

Deutsche Bank cuts equities salesstaff in AsiaDeutsche Bank cut 10 per cent of itsAsian equities sales and trading stafftoday, according to people familiar withthe situation. The cash equities industryin Hong Kong and much of the rest of theworld has been hit hard this year.

Money market funds pass on lossesInvestors in the 1.1tn European moneymarket fund industry are facing losses asbig managers prepare to pass on theimpact of negative short-term interestrates.

RM Education launch e-booksystem RM Education is launching anonline rental service allowing pupils todownload schoolbooks and novels ontheir smartphone or computer.

Nine to sell off AustralianmagazinesAn Australian media group has sold itsmagazines division to Bauer for aboutA$500 million in a last-ditch attempt toavoid breaching its banking covenants.

Hello! magazine to move up-marketThe long-running magazine hasannounced plans to turn its back on thescurrilous world of celebrity and re-establish itself as a womens lifestyleand fashion magazine, as it attempts togo up-market.

Twitter warned on chasing moneyOne of Twitters former board membershas cautioned the social network not tobe short-sighted about chasing moneyat the expense of users.

News Corp nominates new directorsNews Corp nominated former LaborSecretary Elaine Chao and formerColombian president lvaro Uribe to joinas directors amid other board changes.

Thirst for energy shapes Japan'stiesRussia and Japan are poised to seal anagreement this weekend that could leadto a liquefied-natural-gas shippingterminal.

EUROPEAN Central Bankpolicymaker Joerg Asmussen

yesterday called for Europe tocreate a financial market unionand beef up external regulation toaddress risks to market stability.

In a sign of support for singleEuropean bank regulator,

Asmussens call was echoed byDeutsche Bank co-chief executive

Juergen Fitschen, who yesterdaysaid Germany should support theidea of a common banking union.

Asmussen said it wasunacceptable markets weredoubting the euros future. Therisk premia of sovereign bondsnow reflect not just the insolvencyrisk of some countries but even anexchange rate risk, which thereshould not theoretically be in acurrency union. The markets arepricing in a break-up of the eurozone. For a currency union, suchsystemic doubts are notacceptable.

Asmussen added a market unionwould address the instability.Deutsches Fitschen said Germanyshould back a union. Theelements make sense if you thinkabout Europe as a commonmarket. I feel that if we out ofGermany argue that we aredifferent, we invite othercountries to also argue forexemptions, he said.

Financial union

backed by ECBand Deutsche

Martin Wheatley will today publish his report into banks culture and how bosses can change it

4 NEWS

BY CITY A.M. REPORTER

BY TIM WALLACE

To contact the newsdesk email [email protected]

COALITION 2.0: that is our frontpage headline today, and it sumsup what this reshuffle is allabout. This was an incremental,

almost minor reshuffle, not therevolutionary shift that thisgovernment really needed, with mostof the most important, cabinet-level

jobs still controlled by the samepeople and economic policychanging not one iota as a result. Thiswas certainly not a reshuffle forgrowth, which is why it was entirelyignored by the stock market andsterling traders.

On balance, the composition of thegovernments senior ranks is slightlyimproved. There will be positivechanges to environment with theappointment of the talented OwenPaterson and to justice, where ChrisGraylings promotion to replaceKenneth Clarke is an unambiguously

EDITORSLETTER

ALLISTER HEATH

An underwhelming reshuffle which did not go far enough

WEDNESDAY 5 SEPTEMBER 2012

good move. But I dont buy the viewthat the change at Transport willmean more airports any time soon.Yet there were also many strange

decisions. The prime minister wassurprisingly weak. He failed to sackseveral people properly, includingLady Warsi, who will take up a newlycreated role and retain cabinet atten-dance rights, and Clarke, whobecomes minister without portfolio,also with cabinet status. This wasntexactly leadership.

And why did Cameron try (and fail)to move Iain Duncan Smith? Thereare issues as to whether some of thetechnical aspects of his welfarereforms would work they mayrequire an unfeasibly sophisticatedcomputer system but it would havebeen silly to force him out at this

stage. It also was a mistake to appointDavid Laws, generally a good egg, toeducation: by dividing power, it willmerely make Michael Goves alreadyextremely tough job even harder.Another blow was the departure of

Nick Herbert from the government. Atalented free-marketeer, he was theman responsible for trying to reformprisons and introduce elected policecommissioners, a sure way of makingsure that the police begins to followthe publics priorities.There are, however, some good news

lines buried within this overall story

needs. I hope Im wrong and I cer-tainly hope that some of these MPsend up running their party one day.But in the meantime, it is the seniors,not the juniors, who run governmentdepartments, and the old orderremains firmly entrenched.

It is undoubtedly a coup for the gov-

ernment that Paul Deighton, the ex-Goldman Sachs banker who iscurrently the CEO of the London 2012Olympic Organising Committee, isbeing brought in as a Treasury minis-ter in January. As ever, however, I amsceptical that he will be given thepower and authority to make morethan a marginal difference. All in all,an underwhelming reshuffle from agovernment that refuses to changedirection.

of broad continuity marred bymishaps. Lots of good people havebeen brought in at the lower end ofgovernment, though it is doubtfulthat they will be empowered to makea real difference. The ultra-soundMichael Fallon is a minister at theDepartment for Business. A number

of good, radical MPs from the 2010intake have been promoted to minis-terial jobs, including the excellent exDeutsche Bank executive Sajid Javidat the Treasury, the brilliant Liz Trussat education and a few others.

My great worry is that with theexception of Truss, who has found herberth at the reformist Department forEducation, many of the talents ofthese younger ministers will be wast-ed. They will report to bosses such asGeorge Osborne or Vince Cable whohave no intention of adopting the rad-ical free-market reforms this country

Banks including HSBC, RBS andBarclays have also each pledged over1bn in compensation payouts aspart of the whole industrys attemptto resolve the crisis.Todays report will also look at the

wider culture at banks, and offersome guidance to bank bosses as tohow they can improve the behaviourat their institutions.Wheatley is also conducting an

investigation into the key inter-banklending rate Libor in the wake of themanipulation scandal.That reform will consider how the

rate is compiled, the governancearound its compilation and how mis-behaving banks should be punishedin future.

In June Barclays was fined 290mfor Libor manipulation, and otherbanks may also face punishmentover the affair.Wheatleys powers to govern

bankers behaviour are set to growfurther in the near future he is setto move from the FSA over to headup the new Financial ConductAuthority when that is establishedearly next year.

The new jobs website for London professionalsCITYAMCAREERS.com

WHAT THE OTHER PAPERS SAY THIS MORNING

FACEBOOK has ruled out sellingmore shares to help cover its near-$2bn tax bill, and has pledged toallow employees to cash in stockahead of schedule, in a bid tosoothe nervous investors as itsshare price spirals.

Chief executive Mark Zuckerbergwill not sell any shares for 12months, the social network addedin a regulatory filing last night.

Shares of Facebook gained 1.8per cent in after hours tradingyesterday to $18.05, around half itsprice back when the firm floatedin May.

Facebook chiefto keep shares


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TWO MORE Russian firms yesterdayannounced plans to list in London,defying the poor funding environ-ment.

Mobile phone operator MegaFon isplanning a 20 per cent float, in an IPOthat could be worth up to 2.5bn.The firm, which was taken over by

Alisher Usmanov in April, has askedregulators for permission to list.

It is thought that the float couldtake place within the next month, ifmarket conditions appear favourable.And Promsvyazbank

filed for a London list-ing yesterday, havingasked the Russian regu-lator for permission tolist up to 25 per cent ofits shares here.

Earlier this year thebank indicatedthat wouldr a i s e

London gains

Russian listingsin IPO droughtBY TIM WALLACE

roughly 630m.London has long held an appeal to

foreign firms looking to expand inter-nationally, with more liquid markets,more quoted comparable companiesand a large number of index-trackingfunds, which boost demand.Tough standards of corporate gover-

nance also help investors in Russiaare often suspicious of cronyism, andrequirements for a majority of inde-pendent directors, for example, boostconfidence. At a time when invest-ment can be hard to come by, industryinsiders believe a solid reputation canimprove an IPOs chance of success.

The many benefits of a London list-ing may be even more important dur-ing a period of volatile equitymarkets, said UBSs Jonathan Rowley.

A premium London listing givesinvestors greater confidence in gover-nance and reporting standards.

UK services industry enjoys itsfastest growth for five monthsSERVICES boomed in August,according to a prominent business

survey, with the biggest sector inthe economy expanding at itsfastest rate in five months.

Jumping to 53.7 comfortablyabove the 50 barrier indicating nochange from 51, Markitsservices purchasing managersindex (PMI) appeared to showmeaningful expansion in the all-important sector.

Service sector companiesreported a welcome rebound in

BY BEN SOUTHWOODactivity in August followingdisruptions due to the additionalJubilee bank holiday andunusually poor summer weather

in previous months, said ChrisWilliamson, chief economist atMarkit.

With the service sector upturnaccompanied by a marked easingin the manufacturing sectordownturn, the survey data add tohopes that the economy will pullout of the recession, he added.

But the construction industrysaw a drop in activity from 50.9 to49 in August, meaning that the

sector was almost certain todecline over 2012, according toMarkits construction PMI.

Hope for new floats a welcomeray of sunlight amid the clouds

THE Russian bear gave theLondon IPO market a littlebullish news yesterday, withmobile phone heavyweight

MegaFon and lender Promsvyazbankseeking regulatory permission topursue listings here.

Both firms have been mentionedin connection with possible Londonlistings before, but given thecurrent economic headwinds it isreassuring to see signs that bothfirms are still actively seeking tofollow through.

Promsvyazbank delayed itsoriginal plans because of the globalbanking crisis in 2008-09. Pursuinga London listing now suggests asunnier outlook, and indeed vicepresident Alexandra Volchenko saidback in March that an IPO in thesecond half of this year would bedependent on market conditions

staying positive.Russian IPOs in London arent

without their critics. The sort ofconcerns heard last year about largeRussian energy and resources firmswith concentrated majorityshareholdings listing in Londonmay rear up again. Russias richestman, Alisher Usmanov, holds acontrolling stake in MegaFon andthe Ananyev brothers own 88.3 percent of Promsvyazbank. Neitherfirm will look to list more than aquarter of its shares here. Yet theCity can ill-afford to turn its nose

up at such deals with so little elsearound to choose from.

BOTTOMLINE

MARC SIDWELL

MPs wil get achance to questionVirgin founder SirRichard Bransonand FirstGroupboss Tim OTooleover the West Coastfranchise auction.The TransportSelect Committeehas asked the pair

to give evidence onMonday, followingthe governmentscontroversialdecision to awardthe 13-year contractto First. The dealhas not yet beensigned, after Virginlaunched a legalchallenge.

BRANSON TO APPEAR BEFORE POLITICIANS

August sees service activity jump

Jan2006

Jan2008

Jan2010

Jan2012

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45

38

50

54

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62

64

-3

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Usmanov also ownsshares in Arsenal FC

WEDNESDAY 5 SEPTEMBER 20125NEWScityam.com

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SANTANDER yesterday announced

plans to float its Mexican bankingarm Santander Mexico on the NewYork Stock Exchange later thismonth.The initial public offering is expect-

ed to raise between 3bn (2.37bn)and3.4bn of capital for the company,boosting Santanders core capitalratio by about half a percentage pointunder Basel II rules.

Shares are expected to start tradingon 26 September on the NYSE and theMexican Stock Exchange, where thebank will also be listed.

The f loat is the largest placing ofshares ever in a Mexican company.The offer price of between 29 and 33.5pesos per share values the bank at13.7bn.

It is the third float of Santandersbanking operation in South America,following on from the IPO ofSantander Brasil and Santander Chile.

Santander chairman Emilio Botinsaid: This transaction is another stepin our strategy of having quoted sub-sidiaries. Our three largest sub-sidiaries in Latin America will beamong the top 100 banks in the worldby stock market value.

Approximately 80 per cent of shareswill transact outside Mexico with theremaining 20 per cent in Mexico.

Santander setto float Mexicoarm on NYSE

BY MICHAEL BOW

BUDGET hotel chain Travelodge hasbeen saved from the brink of adminis-tration after landlords yesterdayagreed to a controversial rescue dealthat sees their rent takings slashed.The company voluntary arrange-

ment (CVA) voted through by 97 percent of creditors and 96 per cent oflandlords allows Traveldoge tooffload 49 of its 500 hotels and pay 55per cent less rent until they are sold.

Landlords at a further 109 hotelshave agreed to cut rents by 25 per centfor three years before they revert to amarket-based rent.

KPMG, which arranged the CVA, said

creditors will receive a return of 23.4pin the 1, versus the 0.2p in the 1 ifthe business had been forced intoadministration.The groups main lenders US

hedge funds GoldenTree AssetManagement and Avenue CapitalGroup plus Goldman Sachs haveagreed to write off 709m in debt as aresult of the deal.

Travelodge cansleep tight as it

wins CVA dealBY KASMIRA JEFFORD

They have also pledged to invest75m, of which 55m will be spent onrefurbishing some 175 hotels.The chain, which posted a 20 per

cent profit rise last year, has had noproblem attracting customers but its1bn debts brought it to its knees.

Its trio of lenders recently seized con-trol of the hotelier via a debt-for-equityswap with its previous owners DubaiInternational Capital, who paid675m for Travelodge in 2006 in ahighly leveraged deal.The company is the latest in a string

of household names to seek a CVAincluding Fitness First and JJB Sports.

Liz Peace, chief executive of theBritish Property Federation said yester-

days deal will save around 6,000 jobsbut warned of the wider impacts onthe property sector: If landlords nowhave to accept that a contract enteredinto in good faith by both parties cansimply be renegotiated when one sideno longer likes the terms, it throwsinto doubt the whole basis on which acommercial property investment isappraised and financed.

BANCO Popular and smaller savingsbank Banco Mare Nostrum saidyesterday that they could merge toform Spains fifth-biggest financialinstitution, in what could be thefirst of an expected wave of mergers.

Spains economic woes, linked toits banking and housing crises,reflects growing unemployment,with figures yesterday showing afive per cent rise in benefit paymentfrom January to July.

Meanwhile Italian PM MarioMonti said yesterday that Brusselsmust actively hold down Spanishand Italian bond yields.

SHARES in Netflix plunged asmuch as 11 per cent yesterday on

back of news that rival Amazon

had struck a three year deal withvideo streaming channel Epix toadd about 3,000 movies to

Amazon's video streaming library.The deal will boost Amazons

Prime Instant Video service, astreaming service for subscribers,from its current title count of22,000 to more than 25,000.

The deal gives Amazon video

Netflix shares plunge after rivalAmazon signs streaming deal

BY CITY A.M. REPORTER subscribers access to movies suchas Iron Man 2 and The HungerGames from Epix's Hollywoodstudio owners. Netflix has beenpaying $200m (158m) a year since

2010 for exclusive rights to Epixmovies but the deal expires thismonth.

"It gives Amazon Primemembers a lot less reason to alsohave a Netflix subscription, aMorningstar analyst said.

Netflix shares fell 6.3 per cent toclose at $55.93, with the stockdropping as low as $53.13.

BRITISH businesswomen and Cityfigures yesterday lined up to opposeEuropean Commission vice-president Viviane Redings plan toimpose EU gender quotas on UKbusinesses.

Helena Morrissey, who foundedthe 30 Per Cent Club, which aims toput more women in boardrooms andwas a nominee for City A.M.spersonality of the year award,rubbished the idea.

Quotas are not only unnecessarybut actually undermine the veryequality the pro-quota lobby seeks,Morrissey said.

City women slam EU plans toslap gender quotas on boards

BY BEN SOUTHWOODThere is already a radical shift in

the mindset of business leadersabout what makes a good corporateboard and that includes, but is notlimited to, having a better genderbalance, she added, pointing to thefact that 55 per cent of new FTSE 100non-executive appointments sinceMarch have been women.

Marianne Fallon of KPMG told CityA.M.that better measures exist.

To address the culture andmindset of an organisation, targetsare much more appropriate, andhave pushed the proportion ofwomen on FTSE 100 boards up from12.5 per cent in 2010 to 16.7 per centnow, she said.


The Hunger Games is just one of the titles that subscribers will now be able to access

THE BODY overseeing Greece'sbailout will require the countr yto remove the restriction on

working a six-day week, a leakedemail sent to two Greekministries revealed yesterday.

The troika, made up of IMF, EUand European Central Bankrepresentatives, are overseeingthe Greek aid package. Itsmembers want Greece to cutlabour market restrictions.

The cuts would include theregulation stopping employees

working six days a week,according to the Greek

Troika ask Greek ministers toallow six day working week

BY BEN SOUTHWOODnewspaper Imerisia.

The rules are particular toGreece and not common in otherEuropean states.

The troika is also demandingGreece drop severance pay by 50per cent, cut overtimeprovisions, and slash the periodof notice employers are requiredto give their employees.

This came as French PresidentFrancois Hollande said that anEU debt summit in mid-Octobershould wrap up the Greeksituation but also theproblems, especially to do withthe high cost of maintainingdebt, in Italy and Spain.

Spanish banksponder merger


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WHITBREAD, the owner of CostaCoffee and Premier Inn, yesterdayannounced it has poached NicholasCadbury to be its new financedirector from electronics

components group Premier Farnell.Cadbury will succeed ChristopherRogers, who has become managingdirector of Costa. Rogers move,which was announced in April,sparked speculation that Whitbreadplanned to spin off its coffee chain.

Whitbread tohire Cadbury

BY KASMIRA JEFFORD

TESCO yesterday stepped up its digitalexpansion as it spent 4.5m onMobcast, the digital book platformprovider co-founded by SAS veteranand best-selling war novelist AndyMcNab.The deal comes hot on the heels of

Tesco taking a 91 per cent stake in theinternet radio service We7 in Juneand its acquisition of movie and TVstreaming service blinkbox in 2011.

Mobcast, which was set up byMcNab and its chief executive TonyLynch in 2007, has a catalogue ofmore than 130,000 books available todownload onto smartphones, tablets

and e-readers. As well as its ownonline shop, Mobcast also providesretailers and mobile operators with aplatform to sell their own ebooks.

McNab and Lynch own 40 per cent

Tesco snaps upAndy McNabs

ebook platformBY KASMIRA JEFFORD of the company, meaning the two willshare around 2m of the proceeds.

McNab said: As an author I alwaysthought the ability to carry yourlibrary around and read on all yourpersonal devices would be a huge ben-efit to all... being acquired by Tescoensures that this original vision willbe available to as many people as possi-ble.

Tesco PLC

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4 Sep MARKS & SPENCER yesterday saidit has hired Stephanie Chen, asenior director at House of Fraser,to be its new director of kidswearand home, as it revealed a shake-upof its general merchandising team.

The retailer said John Dixon hadmade changes to the team as heprepares to take up his new role ashead of the division next month.

As a result Karl Doyle, currently

Marks & Spencer shakes up itsgeneral merchandising team

BY KASMIRA JEFFORD director of kidswear, will leave thecompany in March while DamianGuha, director of home, will moveto a different role within M&S atthe same time.

Scott Fyfe, currently director ofwomenswear and planning, willbecome director of menswear.

The changes come as Marks &Spencer attempts to revive sales atits clothing business, which hassuffered its worst trading in several

years.

Stephanie Chen is stepping in as the new chief of childrenswear and home departments


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PACKAGE delivery giant FedEx lastnight cut its profit outlook for thecurrent quarter, saying weakness inthe global economy was hurtingdemand for overnight internationalshipments more than anticipated.

The warning, which followed asimilar move from rival UPS in July,sent the firms US-listed sharesdown 3.5 per cent in after-hourstrading.

FedEx slashesprofit forecast


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Canaccordhires former

Lazard man tohead Europe

RYANAIR chief executive MichaelOLeary believes he can make a deal

with competition authorities toclear the way for his takeover ofrival airline Aer Lingus.

OLeary told reporters yesterday:We are confident that theremedies package will be enough tosatisfy competition issues.

There are 46 cross over routesand we will remedy all of them by

getting airlines to come to Dublinand take them over, O'Learyadded.

A route sale would be a steptowards appeasing the EuropeanCommission, which last week

launched an in-depth antitrustreview into the takeover bid.

Ryanair bullish

on Aer Lingus

PwC to probe

RBS IT failuresBY MARION DAKERS BY TIM WALLACE

10 cityam.comWEDNESDAY 5 SEPTEMBER 2012

NEWS

ALEXIS de Rosnay, theinvestment banker namedyesterday as the newEuropean head of Canaccord

Genuity, has charged himself withraising the firms morale as itstruggles to come to terms indifficult markets with the 253mmerger of Collins Stewart Hawkpointat the end of last year.

De Rosnay, who has had a careerbased on working at some of the larg-er investment banks, including JPMorgan, Lehman and latterly atLazard, said he hoped to cultivate awinning culture at Canaccord.

We need to have a winning cultureand an intensity and we need to putthe client first, he said. Sometimeswhen an integration happens youcan become a bit inward focused.

De Rosnay was speaking hours afterbeing appointed to head the firmsEuropean operations from London inplace of Mark Brown, the formerCollins Stewart chief executive, whowill remain with the group as a con-sultant.

Canaccords global chief executiveoffice Paul Reynolds said he had firstmet de Rosnay around two years agoat a dinner and the two had begunchatting about how Canaccordwished to expand its UK business.

His eventual path to Canaccord,however, might be described as a littleunorthodox. He moved to Bank ofAmerica Merrill Lynch in May afterbecoming unhappy at Lazard butthen got caught up in a contract dis-pute with his former employers.There was an issue about when Icould join, he said.

De Rosnay says he hopes to grow thefirms three main business units wealth management, corporatefinance and securities with a grow-ing emphasis on synergies betweenthe divisions. The business is cryingout for a very strong cross-sellingeffort, he said.

It looks as if the blood-letting thathappened immediately after themerger, when around 100 of the com-bined London staff of 750 were laidoff, is enough for the moment.

Our view is that we are around thebottom of the market. Were not outof the storm completely. Theres prob-ably a couple of difficult years to go,de Rosnay said.

Reynolds said de Rosnay is a teamplayer and he wants to instill a team-building attitude similar to the onehe was part of at Lehman ahead of itscollapse. His father is a French scienceexpert and his sister, Tatiana, is a best-selling novelist.

Alexis de Rosnay is keen to show heis a team builder, David Hellier writes

AN INDEPENDENT team from PwChas been appointed to head theFinancial Services Authoritysinvestigation into the systemsmeltdown that hit tens ofthousands of RBS, NatWest andUlster Bank customers earlier thisyear.

The regulator wants a thoroughinvestigation to find out exactlyhow well the bank has done attaking steps to make sure such afailure cannot happen again.

It is part of a wider move by theFSA in which the largest ninebanks have been told to review thesecurity of their IT networks.

RBS has put aside 125m to coverpotential compensation claims.

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BRITISH pubs and brewery groupGreene King said sales at its own pubsgrew 5.1 per cent despite an unusual-ly wet summer, sending its shares upmore than four per cent yesterday.The 213-year-old Suffolk-based firm,

which owns brands such as HungryHorse and Old English Inns, said like-for-like food sales rose 5.2 per cent forthe 18 weeks to 2 September, whiledrink sales were up five per cent.

Nevertheless, it expects consumerconfidence to remain subdued for therest of the year. It also added that theOlympics had net minimal impacton its performance.

In London, the City and west endwere generally quiet while in the sub-

urbs, trading was noticeablystronger, the group said.

Greene Kingand Spirit pubs

post sales riseBY CITY A.M. REPORTER Rival pub group Spirit, whichdemerged from Punch Taverns lastyear, also posted a rise in sales at itsmanaged estate, up 4.1 per cent in thefinal quarter.

But its leased estate continued tostruggle, with net income down 5.4per cent, which Spirit said was due torent rebasing.

INSURANCE giant Axa has agreed to forward fund the development of BNP Paribass newheadquarters at Kings Cross for around 300m. Axa, in partnership with an unnamed partner,will take ownership of the 400,000 square feet office building, which is 55 per cent pre-let toBNP Paribas on a 15 year lease. Construction is due to begin next year, for completion in 2014.

AXA HELPS FUND NEW KINGS CROSS OFFICES

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THE LONG-SIMMERING feudbetween two of Frances top luxuryhouses boiled over yesterday afterHermes asked French prosecutorsto open a probe into alleged insidertrading and share manipulation bylarger rival LVMH.

LVMH has been graduallyincreasing its holding in Hermessince it surprised the market in

2010 by saying it had built up a 17per cent stake.

The prosecutors office saidyesterday that following a Julycomplaint by Hermes, it hadrequested the opinion of stockmarket watchdog AMF beforedeciding if there was a case to opena possible criminal investigation.

LVMH, which owns 22.3 per centin Hermes and now has 16 per centof the voting rights said it plannedto file a complaint for blackmail,slander and illegal competition

and claimed its initial stake-building was perfectly regular.

Hermes seeks an insider tradingprobe into LVMH stake building


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JEFFRIES & Co, the lead underwriterin Manchester Uniteds initial publicoffering (IPO) last month, started cov-erage of the English football clubwith a buy rating yesterday, sayingthe company was poised to gain fromincreasing media appetite for livecontent.

We view Manchester United as akey beneficiary of the changingmedia world where advertisers arewilling to pay up for [live] contentand want to associate with powerfulbrands that are recognised globally,Jefferies analyst Randal Konik said ina note to clients.

Deutsche Bank also kicked off itscoverage with a buy rating and a$17 target price, $3 less thanJefferies, saying it forecast strong rev-enue growth due to contractedincreases, a renegotiation with kitmaker Nike and improved team per-formance.The club had a f lat market debut

on 10 August and its shares closed

Underwriters

give verdict onMan Utd floatBY CITY A.M. REPORTER below its IPO price of $14 after the

first week of trading. It closed at$13.19 yesterday on the Nasdaq.

Nomura Equity Research, also oneof the book runners for the offering,took a more watchful approach as itremained cautious about greater-than-expected player cost inflationand valuation, starting the stock witha neutral rating.

Nomura said it was concerned thata large portion of the clubs revenuegrowth would be consumed by playersalaries and transfer payments, andstarted the stock with a $13 target.

Manchester United PLC


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MONITISE yesterday announced adeal with a unit of Bank of China toprovide the Hong Kong-basedlender with mobile paymentstechnology, as it narrowed its full-

year losses to 17m and doubledrevenues to 36.1m.

The British mobile bankingtechnology company said it wouldhelp launch mobile services forBank of China (Hong Kong), whichis looking to tap Hong Kongs highlevels of mobile phone ownership.

Monitise also reiterated itsrevenue forecast of 70m for thefiscal year 2013. The companyexpects to achieve its Ebitda break-even target by September 2013, one

quarter earlier than its previousforecast.

Monitise pares

full-year lossesBY CITY A.M. REPORTER


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African Barrick Gold preparesfor sale to Chinese gold firmAFRICAN Barrick Gold (ABG) hasappointed a transaction committee

ahead of a potential offer fromChina Gold.The committee, composed of

Michael Kenyon, Derek Pannelland David Hodgson, will prepareABG for a sale to the Chinesegovernment-owned gold firm.

Barrick Gold, the Canadian par-ent company of ABG, announcedlast month it was in talks withChina Gold to sell its 74 per centstake in the London-listed miner.

BY CATHY ADAMS JP Morgan Cazenove and RBCCapital Markets have beenappointed financial advisers,having already acted as brokers to

FTSE 250-listed ABG.Barry Weir, who is also involvedin the Glenstrata merger, isworking alongside Ben Davies fromJP Morgan Cazenove.

Jonathan Stephens and MartinEales join from RBC CapitalMarkets. Stephens, director in themining team, has recently workedon major transactions forResolution and Petra Diamonds,while Eales, director in the broking

team, most recently advised AlliedGold on its acquisition by St Barbara,which was completed last week.

African Barrick Gold PLC


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OBITUARY: SIR ANDREW CROCKETTSir Andrew Crockett, the distinguished centralbanker and former general manager of theBank for International Settlements, died yes-terday at his home in California. He was 69.Crockett led the BIS between 1994 and 2003,at a time when closer monetary unionbetween European states and the creation ofthe European Monetary Institute, theEuropean Central Banks predecessor, helpedchange the role of the BIS.He is credited with helping guide the organi-sation through the transition and giving it

renewed purpose. Crockett, who was knightedin 2003, had a distinguished central bankingcareer prior to the BIS, having served as exec-utive director responsible for internationalaffairs and financial statistics at the Bank ofEngland between 1989 and 1993.He had originally joined the Bank in 1966,working in the economics department andcashiers department before being sec-onded to the International MonetaryFund in 1972.He eventually joined the IMF staff per-

manently in 1974 and was subsequently madedeputy director of the IMF research depart-ment in 1982. Born in Glasgow in 1943,Crockett was educated at Cambridge and Yale.Bank of England governor Sir Mervyn Kingyesterday said: I am deeply saddened tolearn of Andrews death. He was a deeplyloved and widely admired international publicservant. Andrew showed great courage dur-ing his illness and will be missed by all whoknew him, especiallythose who, like me,

had the honour andpleasure of workingclosely with him.Crockett is survivedby his wife Marjorieand their threechildren.

RECYCLED packaging maker DSSmith encountered a shareholderrebellion yesterday after nearly athird of investors voted against itsremuneration report at a generalmeeting in London.

The company, which had putforward bonuses of 570,000 forchief executive Miles Roberts and357,000 for group finance directorSteve Dryden, equivalent to onehundred per cent of salary, saw68.5 per cent of votes back thereport versus 31.5 per cent of votesagainst, passing the resolution.

Remuneration committee chairChris Bunker said in the report:We want our employees to be

fairly compensated andincentivised.

DS Smith hit by

AGM rebellionBY MICHAEL BOW

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THE Paralympic Games may come toa close this weekend and end a sea-son of sport that has gripped thenation, but for those looking to makethe most of the Indian summer andcarry on the party, theres still achance to celebrate at Londonslargest free knees-up: The MayorsThames Festival.

In its 16th year, the annual fes-

tival will coincide with theclosing of theParalympicswith a

programme of eventsalong the Thames riverbank

from the London Eye to St KatherineDocks.

Performances will include a choralrecital on the HMS Belfast,Colombian acrobatics and a nightcarnival. The festival will also mark

Thames Festivalhelps London tokeep partying

the passing of the Olympic Games toBrazil with a Rio-style carnival float.A fireworks display over the Thameswill close the celebrations.

The Mayor of London Boris Johnsonsaid: It will have a significant role to

play in our celebra-tions marking the

2012 Games,adding to the

colour andexcitement ofan amazing

year fort h e

capital.The Thames Festival Trust counts

City of London Corporations JohnBarker among its board members.

by Mark Harper

LAURALEAN/CITYA.M.

IF youve always wanted a noseyaround Boris Johnsons office, thenthe eighth annual Maggies NightHike might just be the opportunity

youve been waiting for.The 20-mile route takes in some

of Londons most iconicarchitecture including City Hall and offers walkers exclusive accessto some of the Square Miles most

Night hike through the City will

be a peek through closed doorsprestigious buildings. Among thefirms that have entered teams areHSBC, Virgin, Addleshaw Goddardand Betfair, as well as RBS, whichhas a three-year partnership withthe charity. Maggies runs centresthat give free support to anyoneaffected by cancer, and is raisingfunds to take the total number to15 by 2014. by Will Calder

WEDNESDAY 5 SEPTEMBER 201214 cityam.com

Walkers will get a chance to go inside City Hall during the overnight hike

Got A Story? [email protected]

cityam.com/the-capitalistTHECAPITALISTTHEY may be more used to beingsnapped trackside or on a yacht in

Monaco, but a host of names from theworld of Formula One have movedbehind the camera for a unique projectto raise money for Great Ormond StreetHospital. Drivers including LewisHamilton and Jenson Button, as well aslegendary commentator Murray Walker,were all asked to take a single photo ofwhatever they wanted. The results from Hamiltons cockpit view to a shotof Bruno Sennas beach paradise willbe auctioned off this Friday night atLondons Wyndham Grand LondonChelsea Harbour. To be in with a chanceof snapping up a piece of sportingmemorabilia, visit www.zoom-auction.com for more details.

IT prides itself on its 100 per centbeef burgers and seasoned white

chicken breast, but yesterday fast-foodmega chain McDonalds took a rather largestep away from its meatcentric reputation.Two completely vegetarian McDonaldsrestaurants are slated to open in Indian

pilgrimage areas to appeal to theirpredominantly Muslim and Hindu clientele,as both religions place restrictions oncertain kinds of meat.Given the British love of a takeawaythough, The Capitalistwould like topropose a counterdeal the chain alreadyoffers fried rice as an alternative to friesacross its Chinese outlets, and its delicioussounding Aloo McTikki burgers spicyIndian potato cakes are one of thebiggest sellers on its Indian menu.Circolombia will be performing

this weekend

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ANGLO-DUTCH oil giant Shell iseyeing up oil explorationopportunities in the Black Sea withTurkish state-owned oil firm TPAO.

Last November, TPAO, which hasinterests in projects around theMiddle East and northern Africa,signed a farm-in agreement withShell to look for oil in the south-eastregion of Turkey, and offshoreAntalya.

That agreement included plans forshale gas exploration near thesoutheastern city of Diyarbakir, andthe Turkish energy minister saidShell had started exploration at theSaribugday 1 field there last week.

Last month Shell, as part of aconsortium with ExxonMobil, waschosen by Ukraine to explore theSkifsa oil and gas field on the BlackSea shelf.

Meanwhile, Singapore authoritieshave charged Shell with safety lapsesthat led to a large f ire last year at itsBukom refinery the firms biggestplant worldwide.

Shell will face a fine of up toS$500,000 (252,400) if convicted inthe case. It is due to be heard incourt later this month.

Shell looks atBlack Sea oil

with TurkeyBY CATHY ADAMS

BRITISH oil giant BP is facing legalproceedings from a raft of institu-tional investors, who claim that BPmisled them over its safety policiesaround the time of the DeepwaterHorizon disaster in April 2010.Around 20 investors, including six

from the UK, are suing the oil majorunder Texan law for statutory fraudand negligent misrepresentation. USlaw firm Pomerantz is dealing witharound 13 UK and EU investors including the South YorkshirePension Authority, GAM FundManagement and Skandia as wellas several US state pension fundsover complaints relating to the ener-gy behemoth.The funds allege that they lost sub-

stantial sums as a result of BPs mis-leading statements regarding itssafety first campaign, designed to

BP sued by 20

investors overMacondo spill

BY CATHY ADAMS show that the oil major cared aboutmore than just profits.

Pomerantz added that the claimswere likely to total tens of millions ofdollars.The period relates to the time

around the Deepwater Horizon disas-ter where BPs share price halved,wiping billions of pounds off thevalue of UK pension funds.

BP declined to comment.

Ashtead bucks down trend withstrong profits from US marketPLANT hire group Ashteadyesterday posted a big jump in pre-

tax profits for its first quarter,buoyed by strong growth in its USbusiness.

Profits for the three months tothe end of July were up 82 per centfrom the last quarter to a record61.4m.

The FTSE 250 companys USsubsidiary Sunbelt, a rentalcompany from which Ashteadmakes more than 80 per cent of itsrevenue, grew its sales by 24 percent to 275m.

BY CATHY ADAMS Capital expenditure came in at ahigher 223m, but Ashtead addedthat the rental fleet was 14 per centlarger than the year previously.

Chief executive Geoff Drabbleyesterday said the gentlyimproving conditions in the UShad flattered profits, although headded that the outlook in the UKwas more challenging.

The firm, which rents outconstruction equipment, said itexpected full-year results to bematerially ahead of previousexpectations.

Meanwhile, at Ashteads AGMyesterday, all resolutions were

passed.Its shares closed up 11.82 per cent

at 315.90p. The share price hasmore than doubled in a year.

IN BRIEFGazprom faces anti-competition proben The European Commission is investigatingRussian energy giant Gazprom over claims it mightbe hindering competition in EU gas markets. TheCommission believes Gazprom might be abusing

its dominant market position in central and easternEurope by hindering the free flow of gas andpreventing the diversification of supply of gas. Itadded Gazprom may have imposed unfair prices onits customers.

Roxi Petroleum produces oil at the Galaz fieldn Kazakhstan-focused Roxi Petroleum yesterdaysaid oil had flowed from one of its wells on theGalaz block in the Middle Eastern country. The firmsaid oil flowed at the rate of 199 barrels of oil a day,

and that it could be ramped up to 392 barrels a day,it said during the tests. Roxi said it will put the wellinto production in early September. Shares in Aim-listed Roxi closed up 4.2 per cent at 3.12p in tradingyesterday.

Genus reveals strong volume growthn Genus, which develops advances to animal breed-ing using biotechnology, yesterday posted a 19 percent rise in pre-tax profit to 46.5m for the year to 30June. Revenue over the year was up 10 per cent to

341.8m, as expansion in China helped volumegrowth. Porcine sales across the group were up sevenper cent, and bovine sales up eight per cent.Particularly, Genus also said growth in the Americashelped to buoy revenues.

Enegi Oil soars on encouraging explorationn Shares in Enegi Oil closed up by 4.55 per cent intrading yesterday, as it reported there was more shalegas at its Clare Basin site in southern Ireland than itfirst thought. As a result, it has asked consultancy

Fugro Robertson to undertake further testing on thesite. Meanwhile, the oil firm, whose main operationsare in Canada and Ireland, appointed Derek Cochrane,current non-executive director, to the role of chiefoperating officer with immediate effect.

CAMPBELL Soup posted better-than-expected quarterly profit yesterday, as it announced itwas increasing the price of the iconic red and white cans. Campbell is trying to turn aroundperformance with a new product range, including Thai curry sauce. Net income was $127m(80m) in Campbell's fiscal fourth quarter to 31 July, up from $100m a year earlier.

RETAILERS TO STOCK UP ON CAMPBELLS

BP PLC

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First quarter results from Ashtead are way ahead of both our andmarket expectations, with the benefit of additional fleet and increasedefficiency being further enhanced by a gentle improvement in US yields.

ANALYST VIEWS

WERE ASHTEADS RESULTSWHAT YOU EXPECTED?

Interviews by Cathy Adams

PAUL JONES PANMURE GORDON


Strict entry | Clever matching| Exclusive events | Profile verification

Nothing else matters when youre

NikkeiNikki

First quarter pre-tax profit came in at 61.4m, up 82 per cent, which wasaround 28 per cent ahead of our forecast of 48m. The better than expected top-line performance has dropped through to the bottom line.

JULIAN CATER CANACCORD GENUITY

Ashtead delivered another excellent quarterly update. Top-line growthwas solid with rental revenues up 15 per cent, but a much better than anticipat-ed margin performance at Sunbelt.

CAROLINE DE LA SOUJEOLE

SEYMOUR PIERCEAshtead Group PLC


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Cameronscabinet reshuffle

YESTERDAYS reshuffle leftthe great offices of stateuntouched but the changesDavid Cameron made to his

cabinet provide an insight intothe Prime Ministers plans for thesecond half of this government.

He has turned to trusted allies,with aides saying the focus is onensuring government policiespass into legislation within thetimeframe of this parliamentrather than launching new ideas.

Few big names suffered theignominy of dropping out of thegovernment altogether, withJeremy Hunt avoiding demotiondespite being dragged into theLeveson inquiry and Ken Clarke

managing to stay on in the role of

wise sage.Meanwhile Nick Clegg focusse

his efforts on bringing formerTreasury secretary David Lawsback to assist in the CabinetOffice while surrendering all LibDem influence in departmentssuch as the Ministry of Defence.

Our graphic shows that thenumber of women attendingcabinet remains painfully low,despite the innovative use of jobtitles that will enable BaronessWarsi to remain at the table.

A vision of the governmentsfuture direction can be found inthe list of junior ministers to theright remember those names,as some will be in the cabinet

sooner than you think.

WEDNESDAY 5 SEPTEMBER 201216 NEWS cityam.com

WHO ATTENDS CABINET?

YOUNGEST MEMBERDanny Alexander, 40

OLDEST MEMBERKen Clarke, 72

MEN26

WOMEN5

UNIVERSITYPOLITICAL PARTYOxford 11

8

2

10

Cambridge

Non-Oxbridge

None

LiberalDemocrats

Conservative26

5

Justine GreeningInternational development secretaryDemotion The former transportsecretary paid the price for backinggovernment policy on Heathrowexpansion. Her long-standingopposition to a third runway is aproblem now a U-turn is a possibility.

Effect on policy Little, since DavidCameron has pledged to increaseforeign aid by agreed incrementsdespite opposition from someConservative activists. Greening willlook to carry on the work of herpredecessor Andrew Mitchell.

David JonesWelsh secretaryPromotion The well-regardedmember for Clwyd West has spent thelast two years as a junior minister inthe department.

Effect on policy The position has littlereal power because many of its formerfunctions have been devolved to theWelsh Assembly in Cardiff. But Jonesappointment means that Welshinterests are represented by an MPwhose constituency is in the country unlike his predecessor, Cheryl Gillan,MP for Chesham and Amersham.

Andrew MitchellChief whipSideways move Mitchell was a staunchdefender of the governments overseasaid spending despite the economicdownturn. He attempted to instil apolicy of targeted financial supportrather than hand-outs to developingcountries.

Effect on policy? NicknamedThrasher at public school, the formerUN peacekeeper has been brought into deal with an unusually rebelliousparliamentary party. His appointmentwas announced first in an attempt toshow that party discipline is back.

Baroness WarsiDeputy foreign office ministerDemotion Despite publicly asking tostay as party chairman Warsi has takena joint role that allows her to attendcabinet meetings as a representativeof the foreign office and minister forfaith and communities. DowningStreet has designated her a seniorminister of state, a new title.

Effect on policy Warsi had manyopponents within the party but it mayhave been too much for Cameron toremove one of the few women in hisgovernment and the only non-whitecabinet member.

Chris GraylingJustice secretaryPromotion One of the Conservativesleading lights in opposition, he had tosettle for a junior ministerial role afterthe arrival of the Lib Dems. Loved bythe Tory right, he replaces the moreliberal Ken Clarke. He is the first non-lawyer to become Lord Chancellorsince the 16th century.

Effect on policy? Expect to see ashift to the right in prison policy.Grayling backs toughersentencing and in oppositionfavoured strengthening the rights ofhomeowners to defend their property.

Patrick McLoughlinTransport secretaryPromotion Twenty years ofcontrolling rebellious MPs inthe whips office means that

the former miner is almostunknown outside Westminster

but has plenty of experience

of pushing throughcontroversial legislation.

Effect on policy Transportpolicy requires long termplanning but McLoughlinbecomes the eighthsecretary of state in thelast 10 years. However hedoes have past experienceas aviation ministerbetween 1989 and 1992.Decisions on Heathrowexpansion will be takenfurther up the food chainso the HS2 railway willbe his main concern.One problem hesafraid of flying.

Ken ClarkeMinister without portfolio

Demotion The Europhile andliberal Clarke put up a fightbut was eventually removedfrom his position as justicesecretary. Despite this hesaid it is rather aprivilege to stay in thecabinet, having served inevery Conservativegovernment since 1972.

Effect on policy Ministerwithout portfolio hasoften been disparaged as

Minister for the Todayprogramme but the formerchancellor is set to draw onhis experience and offer

advice on a wide range ofmatters, including the economy.

Yesterday Clarke was making themost of his new role by watchingSurrey play Nottinghamshire at TheOval.

Which politicians are on the up? James Waterson profiles the ministers who change

Which cabinet ministers are staying put?nDavid CameronPrime Minister

nNick CleggDeputy Prime Minister

nWilliam HagueForeign secretary

nGeorge OsborneChancellor of the exchequer

n Theresa MayHome secretary

nPhilip HammondDefence secretary

nVince Cable

Business secretary

George Osborne

n Iain Duncan SmithWork and pensions secretary

n Ed DaveyEnergy and climate change secretary

nMichael GoveEducation secretary

n Eric PicklesCommunities and local government

nMichael MooreScotland secretary

nDanny AlexanderChief secretary to the Treasury

n Lord StrathclydeLeader of the House of Lords

Iain Duncan Smith

Michael Gove

nOliver LetwinMinister of state

n Francis MaudeMinister for the cabinet office

nDominic GrieveAttorney general

nDavid WillettsUniversities and science minister

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s taking shapeWEDNESDAY 5 SEPTEMBER 2012

17NEWS

Jeremy HuntHealth secretarySideways move The former culturesecretary spent most of the last yearembroiled in the phone hackingscandal and it is astonishing that hehas survived at all, especially in suchas a high profile position. Unlike hispredecessor Andrew Lansley, Hunthas little experience of healthissues.

Effect on policyPotentiallysubstantial. He will be tasked withrescuing whats left of the NHSreforms, which will be crucial fordeciding the future capacity of thehealth system. In the past he hassupported the provision ofhomeopathic medicine on the NHSand in 2008 voted for the time limitfor abortions to be reduced from 24

to 12 weeks.

Junior ministers

nOliver HealdSolicitor general

n Sajid JavidEconomic secretary to the Treasury

n Simon BurnsWork and pensions minister

n Stephen Hammond

Transport minister

nMark PriskHousing minister

nNorman BakerTransport minister

nMark HarperImmigration minister

nMark HobanEmployment minister

nAndrew RobathanArmed forces minister

nDon FosterCommunities minister

nAnna SoubryHealth minister

nMichael FallonBusiness minister

n Tom BrakeDeputy leader of the house

n Liz TrussEducation minister

nDavid LawsCabinet office and education minister

n Jeremy WrightJustice minister

nDavid HeathEnvironment minister

nHugo SwireForeign office minister

nDaniel Poulter

Health minister

nNorman LambHealth minister

nMatthew HancockBusiness minister

n Esther McVeyWork and pensions minister

nGreg ClarkCity minister

nPaul DeightonMinister for economic delivery

n Chloe SmithCabinet office secretary

n Jo SwinsonBusiness minister

nMike PenningNorthern Ireland minister

nPhilip DunneDefence minister

nHelen GrantJustice minister

n Jeremy BrowneHome office minister

nDamian GreenPolice minister

n Lynne FeatherstoneInternational development minister

nNick BolesPlanning minister

n John Hayes

Energy and climate change minister

Maria MillerCulture secretaryPromotion Previously minister fordisabled people at the Department forWork and Pensions, this is a fast riseto cabinet level. She will also becomeminister for women and equalities.

Effect on policy Miller will inherit adepartment that has been mired incontroversy as a result of itsinvolvement in News Corps takeoverof BSkyB and the Leveson inquiry.Some will see her appointment as asign that Cameron will veto any callsby Leveson for the statutoryregulation of the press.

Grant ShappsParty chairmanPromotion As housing minister he was aconstant presence in the media, oftendefending party lines rather than sellinghis own policies. State educated, he setup a printing firm in his twenties butthis week was embarrassed by claims heused to sell software that enabled pur-chasers to spam Google search results.

Effect on policy Shapps is viewed as amore presentable form of theConservatives who can appeal to swingvoters in middle-income areas. His job isto sell government policy to sceptical

voters and engage with party members.

Andrew LansleyLeader of the houseDemotion Lansley paid the price forthe catastrophic political failure of hisattempts to reform the NHS byintroducing more competition intothe system. Camerons former boss atthe Conservative researchdepartment has held the health briefsince 2004 but he will not get thechance to see his reforms through tothe end.

Effect on policy Very little in his newjob it mainly consists of co-ordinating the progress of legislation

through the House of Commons.

Owen PatersonEnvironment secretaryPromotion A climate change scepticwho campaigned for fox-hunting,Paterson will bring a new approach tothe Department for the Environment,Food and Rural Affairs. He is from theright of the party and has a history ofcampaigning on traditional socialconservative values and rural issues.

Effect on policy Paterson favours asubstantial reduction in governmentsubsidies for green energy, which hasworried environmentalists. He backsefforts to extract shale gas from

Britains reserves.

bs and considers what this means for the government

Theresa VilliersNorthern Ireland secretaryPromotion The MP for the outer Londonset of Chipping Barnet has spent thelast two years as a junior minister at theDepartment for Transport and wasrecently sent out to defendgovernments position on rail fares.

Effect on policy Northern Irelandrequires a more hands-on approachcompared to the Wales and Scotlandoffices. The province has recently beenhit by several days of rioting and Villierswill have to get to know the region fastto play her part in reforming the

existing powersharing agreement.

Chloe Smith

Jeremy Browne

John Hayes

Mark Hoban

Sajid Javid

Mark Prisk

Michael Fallon

David Laws

Matthew Hancock

7/31/2019 Cityam 2012-09-05

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IN BRIEFFewer SMEs turning to creditn Fewer small British companies(SMEs) are turning to externalfinancing, according to a surveyreleased this morning, while four in 10respondents report personally funding

their SMEs. In the second quarter of thisyear only 43 per cent of SMEs toldBDRC Continental that they werecurrently using external finance downeight percentage points compared tothe first quarter of last year.

Global factory dip worsensn The global manufacturing downturngathered pace in August, with outputand new orders falling at their fastestin over three years, a business surveyshowed yesterday. The JP Morganglobal manufacturing PMI fell to 48.1in August from 48.4 in July, its lowestreading since June 2009 and dippingfurther below the 50 threshold thatsignifies growth.

US home prices bounce backn

US home prices, across the country,recovered rapidly in the year to July,data from CoreLogic revealedyesterday. Prices climbed 3.8 per centover the year, their fastest yearlygrowth since August 2006. Theincrease which appears to bode wellfor an American housing market thathas been stuck in the doldrums forseveral years is the fifth straightupturn into CoreLogics monthlyindex. It also expects further pricehikes to emerge in Augusts data.

US MANUFACTURINGS perform-ance worsened in August, accordingto two prominent surveys of the sec-tor released yesterday.

ISMs purchasing managers index(PMI) was down 0.2 at 49.6 50 indi-cates no change suggesting thatdecline was speeding up slightly.The drop in the index was driven

by a large fall in production, whichcontracted for the first time sinceMarch 2009.

On the upside, employmentexpanded for the 35th consecutivemonth, and exports declined moreslowly than they did in July. Andaccording to ISM, a score of above42.6 on their manufacturing indexis generally consistent with growthin the overall economy.

Markits PMI was more positive though it shrank by 0.4, it remainedat 51.5, implying slow growth ratherthan decline in the industry.

The overall expansion of the US

Manufacturing

slump weighson US recoveryBY BEN SOUTHWOOD manufacturing sector remained only

modest in August, said Markit econ-omist Mark Wingham. The finalPMI reading [was] barely any higherthan the near-three year low report-ed in July.

If the PMI does not pick up sub-stantially in September, the thirdquarter manufacturing growth willlikely be one of the weakest since therecovery began, Wingham added.This manufacturing data came as

Department of Commerce estimatesappeared to show a slowdown in con-struction recovery. Though spendingwas up 9.3 per cent on the estimatefor last year, it was down 0.9 per centon Junes $842.2bn, at $834.4bn.

On the other hand, the US carindustry appears to have reboundedstrongly from its crisis and bailout,according to August sales figuresreleased by the big three yesterday.General Motors boosted sales 10 percent, while Ford saw a 13 per centbump, and Chrysler enjoyed a 14 percent sales increase.

M&A activity slides further asinterest in British firms dropsBRITISH and foreign firms bothput even less cash into UK

companies in the second quarterof this year, extending themarkets long dry spell that beganwith the financial crisis.

The volume of deals fell 39 percent compared with the sameperiod of 2011, according toofficial data.

Foreign firms carried out 42mergers or acquisitions of UKfirms, worth 2.6bn in total, downfrom 68 deals worth 5.1bn in the

BY TIM WALLACE second quarter last year.And domestic firms carried out

71 deals worth 0.9bn, down from94 mergers or acquisitions worth

3.3bn in the same period of 2011.UK firms also cut back on theirpurchases of foreign firms,recording 36 deals worth 3.9bn up from 0.8bn in the first quarter,but well down on the 75 deals with11bn in the second quarter of2011.

The data comes a day after CityA.M. revealed merger andacquisitions analysts in majorinvestment banks have seen

bonuses fall 25 per cent in the lastyear, in large part due to continuedlow transaction volumes.

UK firms are not buying into each other

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SHOP PRICE inflation edged up inAugust, as non-food prices declinedless than in July, according to anindex released by the British RetailConsortium (BRC) yesterday.

The overall index crept up to 1.1per cent last month, up slightlyfrom Julys one per cent but well

below the trend in the officialconsumer and retail price indices.

However, this index was made upof divergent movement in food and

Shoppers face more costly foodbut cheaper non-food products

BY BEN SOUTHWOOD non-food prices. The index for foodprices was up 3.1 per cent on the

year, but non-food inched down 0.1per cent.

For all the talk of food priceserupting, Augusts food inf lation

was no higher than the previousmonths two-year low of 3.1 percent, said BRC boss StephenRobertson.

But, with price pressures fromglobal commodities in the pipeline,this is likely to be food inflation

bottoming out, he warned.

WEDNESDAY 5 SEPTEMBER 201218 NEWS cityam.com

Food prices are increasing well ahead of the average shop price index, the BRC says

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INFLATION across the OECD blocof rich countries fell slightly in the

year to July, according to datareleased by the Paris-basedorganisation today.

Prices increases were 1.9 per centhigher in July than they were a yearpreviously, but the pace of growth

was slightly down on the two percent recorded in June.

This came from food priceinflation declining to its lowestrate since September 2009, andenergy prices going up only 0.7 percent through the year. Yet foodprices are rising again, which couldaffect Augusts data.

Inflation across OECD countriesedges down to below 2pc mark

BY BEN SOUTHWOODJapan appeared to be slipping

into serious deflation, with pricesfalling 0.4 per cent in the year to

July, compared to the 0.2 per centdecline seen up to June.

The UK was one of the fewcountries to put upward pressure

on the rate between June and July,as the consumer price index rose2.6 per cent to July, compared to 2.4per cent in the year to the previousmonth. The biggest rise was forRussia, whose inflation rate

jumped 1.3 points to 5.6 per cent.Consumer price inflation rates

for the US, Canada, Italy, SouthAfrica, China, India fell in July,while rates stayed constant inFrance and Germany.

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19WEDNESDAY 5 SEPTEMBER 2012cityam.com

LONDON REPORT

DAC BeachcroftAnthony Menzies has been

appointed as a partner in the lawfirms London-based globalinsurance team. He joins fromTaylor Wessing, where he was apartner in its insurance andreinsurance group. Menzies is aspecialist in marine, energy andengineering law, and has alsopreviously held roles at Clyde &Co and Appleby in the Cayman Islands.

PwCPaula Smith has been appointed UK asset managementleader at the professional services firm. She is transferringfrom PwCs Boston office, where she served as its USalternative investments assurance leader. Smith has 23years experience in auditing and accounting.

RBSPippa Crawford has been appointed head of the banks

western European loan markets origination team, withinits London-based markets and international bankingdivision. She has been a member of RBSs loans marketmanagement team since 2011, and was previously anexecutive director. Crawford started her career with theGreenwich NatWest loan syndications team in 1998.

JO Hambro Capital ManagementThe investment management firm has appointed RachelReutter to its UK opportunities team. She previouslyworked for Goldman Sachs in its global investmentresearch division, latterly as lead analyst on the UKgeneral retail sector. Reutter has also held analyst roles atOriel Securities and RBS.

Mizuho InternationalThe London-based securities and investment banking arm

of the Mizuho Financial Group has announced theappointment of Raffaele De Vitis as an executive directorin its European primary debt markets team. He joins fromCredit Agricole corporate and investment bank, where hewas responsible for sovereigns, agencies andsupranational debt origination. De Vitis has over 13 yearsexperience in investment banking and has also held rolesat UBS Investment Bank and the European Bank forReconstruction and Development.

Barclays Corporate & Employer SolutionsBarclays has announced two appointments to itscorporate wealth advisory team. James Wood and LiamFearon join as corporate wealth advisers, and will focus onadvising entrepreneurs and smaller clients on corporatecontinuity and succession planning needs. Wood joinsfrom HSBC, where he has worked as a commercialplanning adviser since 2008. Fearon joins from RBS,where he has worked since 2007 in its corporate financialplanning division.

WHOS SWITCHING JOBS Edited by Tom Welsh

+44 (0)20 7092 0053morganmckinley.comSPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT

US marketsawait actionin Eurozone

THE S&P 500 and the Dow Jonesindustrial average closedslightly lower yesterday asinvestors continued to await

clarity on European Central Bankplans to shore up heavily indebtedcountries, but the market ended offits lows on a rally in Apple shares.The Dow Jones was down 54.90

points, or 0.42 per cent, at 13,035.94.

The Standard & Poors 500 Index wasdown 1.64 points, or 0.12 per cent, at1,404.94.The Nasdaq Composite Index was

up 8.09 points, or 0.26 per cent, at3,075.06.

Equities were lower for much of thesession, with industrial and materialnames weak after a report showingmanufacturing contracted by itsfastest pace in more than three years.Telecom and consumer staples, twogroups that tend to outperformduring periods of uncertainty, led onthe day.

Markets remain skittish ahead ofthe ECBs meeting tomorrow, whereECB president Mario Draghi isexpected to unveil plans to lowerborrowing costs for countries such asSpain and Italy, whose bond markettroubles are the latest front in theregions debt crisis.

Were not going to get anydefinitive direction so long aseveryone is waiting around on theFed and ECB, said MichaelVogelzang, who helps oversee $2.2bnas president at Boston Advisors.Things seem very soft right now,and until that changes the marketmay have a hard time getting out ofthe range weve been in.Apple,which as the largest US

company has an outsized impact onindexes, rose 1.5 per cent to $674.97and helped erode broader lossesyesterday. Earlier, the tech giantdistributed invitations to an event inSan Francisco on 12 September,setting the stage for what is widelyexpected to be the release of theiPhone 5.

US manufacturing contracted for athird straight month in August while

firms in the sector hired the fewestworkers since late 2009, according toan Institute for Supply Managementsurvey. The data followed similardisappointing readings onmanufacturing elsewhere in theworld. The Morgan Stanley cyclicalindex fell 0.9 per cent.The S&P materials sector index lost

1.5 per cent while industrial stocksfell 0.9 per cent. Separate data alsoshowed US construction spending inJuly fell by the most in a year as boththe private and public sectors cutback on investment, according to areport that could dampen hopes of apick-up in economic activity in thethird quarter.

In company news,ValeantPharmaceuticals Internationalagreed to buyMedicisPharmaceutical for $2.6bn in cash.Valeant shares climbed 15 per cent to

$58.78 while Medicis surged 38 percent to $43.65.

BRITAINS top share index fell

yesterday reflecting investoruncertainty over whether thisweeks key European Central Bank

(ECB) meeting will deliver the goods ona hoped for bond-buying schemedesigned to ease the euro debt crisis.The FTSE 100 closed down 86.40 points,

or 1.5 per cent, at 5,672.01, ending backbelow the 5,700 level for the first timesince 2 August.After rallying on Monday on hopes for

stimulus measures from tomorrows ECBmeeting, yesterday some commentatorsquestioned whether the bank wouldhave anything specific to announce.

It...seems more and more likely thatthe highly anticipated ECB conferencewill once again turn into a description ofthe Eurozone debt crisis rather thanidentifying ways to solve the crisis, saidShavaz Dhalla, financial trader atSpreadex.The gloomy American figures also

knocked stocks in Europe. TheFTSEurofirst 300 ended down 1.1 percent at 1,079.12, albeit in thin tradingvolume of just 62 per cent of the 90-day

daily average.If the ECB disappoints, the reactionwould be on the negative side. But Idont expect a dramatic sell-off as focuswill shift to other events, said ChristianStocker, equity strategist at UniCredit.

Such uncertainties hurt heavyweight,risk sensitive sectors such as energy, min-ers and banks, which were the top sectorfallers having led the low volume FTSE100 rally on Monday.Telecoms titan Vodafone was the

biggest individual drag on blue chip sen-timent, accounting for over 10 per centof the indexs decline with a 2.6 per centfall, after Bernstein Research downgrad-ed its rating for the mobile telecomscompany.

Chipmaker ARM Holdings was thebiggest percentage faller, dropping 5.6per cent after a rating downgrade fromDeutsche Bank.

However, some saw a chance of bullish

news from the ECB.We see support at 5,635 in the short

term and 5,700 and 5,680 held intra day,but now we look for a retest of thesehighs and could see these tested on posi-tive news from Europe, said Atif Latif, adirector of Guardian Stockbrokers.

Many of the technical indicators stillsuggest that we will bounce from theselows in the short term given the beliefthat Central Bank action will suffice inpreventing the selling we have seen,Latif added.Weakness in US stocks following some

downbeat economic data also took itstoll on London shares yesterday.The market returned from Mondays

Labor Day holiday to weak ISM manufac-turing and construction spending datathat raised fresh concerns over the stateof the US economy.As the losses mounted up in London in

the afternoon, there were just three bluechip risers left by the close.Wm Morrison Supermarketswas the

best off, up 0.3 per cent, rallying follow-ing falls on Monday in reaction to aNomura downgrade, with the food retail-er due to post first-half results tomorrow.

Petrofac was also up, by 0.1 per cent,

after Credit Suisse upgraded its ratingfor the oil services group to outper-form from neutral with an increasedtarget price of 1,800p.

Diageowas the third riser, gaining just0.17 per cent.

MeanwhileXstrata and Glencore con-tinued their drift downwards ahead ofFridays shareholder vote on their merg-er plans, losing 3.1 per cent and 0.8 percent respectively.

FTSE loses 1.5pc with investors notholding breath over ECBs summit

BESTof the BROKERSPetrofac Ltd

p1,560

1,520

1,540

1,500

1,460

1,480

29 Aug 30 Aug 31 Aug 4 Sep3 Sep

1,518.004 Sep

PETROFAC

Credit Suisse upgraded oilfield services group Petrofacs share rating tooutperform from neutral with an increased target price of 1,800p,up from 1,750p. It believes Petrofac has performed poorly on a lack ofproject awards over the summer period but said the next few monthswill be better, and expects awards step up, thanks to less instability inthe Middle East and extensive marketing efforts in south east Asia.

FTSE

29 Aug 30 Aug 31 Aug 3 Sep 4 Sep

5,780

5,760

5,740

5,720

5,700

5,680

5,660

5,672.014 Sep

DASHBOARDCITYCITY MOVES

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YOUR ONE-STOP SHOP FOR JOB MOVES,BROKER VIEWS AND MARKET REPORTS

in association with

Vodafone Group PLC

p186

182

184

180

178


178.454 Sep

VODAFONEBernstein has downgraded Vodafone from outperform to marketperform and cut its target price from 215p to 170p. Bernstein said the

telecoms giants share price has long been strongly correlated withservice revenue momentum but expects service revenues to turnnegative for the first time since March 2010 in the second quarter of theyear. As a result it expects the share price to follow.

Hammerson PLC

p464

460

462

458

456

454

452

450


454.004 Sep

HAMMERSONUBS upgraded Hammerson from neutral to buy alongside its peer,Capital Shopping Centres, yesterday and raised the target price to 490pfrom 480p. The bank said some safer names such as Hammerson havebeen forgotten and ranked the firm as its top pick in the UK real estate

sector. It believes the shares are pricing in lower returns, but missing thelower risk profile.

7/31/2019 Cityam 2012-09-05

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THE debate rages on aboutwhether the chancellorshould implement a Plan B, orC or D, or even Z. Theres aplethora of alternatives for

George Osborne to choose from, butmany of them share a key commontheme: that an increase in publicspending will boost overall output inthe economy.

This was one of the revolutionarynew ideas developed by theeconomist John Maynard Keynes,which he called the multiplier. Anincrease in public spending meansthat more people are employed,whether in the public sector itself orin building infrastructure. Thesepeople spend more money in turn,

and the effect ripples across the

JEREMY Hunt has just acceptedone of the toughest jobs inBritish politics. Coming fromthe Department for Culture,Media and Sport to the

Department of Health, he movesfrom a department with a totalbudget of 2bn to one that spends100bn each year. His new briefinvolves running one of the largestorganisations on the planet andbeing held personally responsiblewhen anything goes wrong

anywhere. It will make the Olympicsfeel like a walk in the park. Thequestion is: what kind of healthsecretary does Hunt want to be?

If Andrew Lansley was an architect,Jeremy Hunt needs to be a radicalvisionary.

Lansley got a set of health reformsonto the statute book in the face ofbitter opposition from the healthunions. Many will say that the job forHunt is one of implementation sim-ply to make those reforms happenand manage the more reactionaryunions like the British MedicalAssociation. He has an unenviable

cityam.com/forum

The success of the

privately-operated NHSHinchingbrooke hospitalshows whats possible

THEFORUM

Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected]? Disagree? Got a sharp comment?

The Forum wants you to join the debate. Top responses will be reprinted in The Forum.

20WEDNESDAY 5 SEPTEMBER 2012

THOMAS CAWSTON

Hunt needs a radical NHS vision tosurvive in the worst job in politics

task in getting to know the new sys-tem and completing the reforms.

Lansley had ten years in the healthbrief, both inside and outside govern-

ment. Hunt doesnt have that luxury,as he tries to grips with the healthservice. Over the next few months, allsorts of new organisations will opentheir doors for business. There arenew commissioners, purchasinghealth services on behalf of theirpatients. And there is a complex tan-gle of hospitals, general practices, reg-ulators, unions and much more thatHunt needs to master and masterfast. But the real deal lies not in struc-tural changes, but in service transfor-mation.

Since 1948, every government hasbeen able to pump money into the

health service to keep the doors open.Now that is

cityam 2012-09-05

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