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Follow me on Twitter: @allisterheath

DAVID Cameron is today facing theprospect of a substantial backbenchrebellion against his stance on EUbudget negotiations.

Around 40 Tory MPs have alreadysigned an amendment to todaysmotion, calling for the PrimeMinister to demand a real-termreduction in EU spending.

If around 50 Conservatives decideto vote against the government andare joined by all opposition MPs thenthe government would be defeated.

Last night a major whippingoperation was underway to avoidthis embarrassment, with waveringbackbenchers invited to DowningStreet to discuss the issue with thePrime Minister.

Cameron has repeatedly insistedhe will oppose a planned five percent rise in the organisationsspending at next months meetingof the 27 EU leaders. Instead he willpress for the 2014-2020 budget to risein line with inflation currentlyaround two per cent.

A large majority of Greeksocialist politicians have agreed tovote in favour of contested austerityreforms, sources said last night.Prime Minister Antonis Samaras isconfident the measures can now bepassed, even though the DemocraticLeft party opposes many of the cuts.Greeces next tranche of bailoutpayments depend on an agreement.

Cameron faces

large rebellionon EU budgetBY JAMES WATERSON

Heseltine calls for powerto be devolved to regionsMICHAEL Heseltine will today callfor a swathe of economic powers tobe devolved to regional institutions,as he demands every sinew of ourbody politic is stretched in the UKsfight to remain globally competitive.

In March the Conservative peerwas commissioned by the govern-ment to look at ways of boosting eco-nomic growth. His proposals,published today, include abolishingtwo-tier local councils, boosting therole of chambers of commerce andintroducing an obligation acrosspublic bodies to boost business.

Government must now reversethe trend of the past century andunleash the dynamic potential ofour local economies, the formercabinet minister writes.

Heseltine criticises the govern-ments piecemeal approach tomoving economic controls out ofWhitehall, which he says has pro-duced 13 distinct policies. Instead hedesires for a single government poli-cy on the economy.

More controversially, his reportalso calls for substantial restrictionson the ability of overseas firms tobuy British firms: In todays world itis difficult to see who else, otherthan the national government, iscapable of looking out for the longerterm interests of UK plc.

Google and Starbucks face grillingGoogle and Starbucks will be subjected toparliamentary scrutiny over their taxaffairs on Monday with the publicaccounts committee demanding the twoUS corporate giants give evidence. Thecommittee has agreed to call in the twocompanies to give evidence at a sessioninto Revenue & Customs where inspectorswill be asked about their contributions tothe exchequer. We want to ask them foran opportunity to explain why they dontpay proper levels of tax in the UK,committee chair Margaret Hodge said.

China hit by unpaid billsChinese listed companies have reported asharp rise in unpaid bills during the thirdquarter, in one of the clearest signs yet ofthe toll that Chinas economic slowdownis taking on corporate balance sheets,according to an FT report.

TomTom steers solid courseDutch navigation company TomTom,which earlier this year signed a deal toprovide its maps data to Apple, saidearnings margins held steady in the thirdquarter despite rapidly falling revenues.Sales fell 19 per cent to 274m (220.8m).

ARM Holdings fends off IntelARM Holdings is to keep ahead of its rival,Intel, by launching processors to power anew generation of superphones. Theprocessors will be built into phones andtablets that will hit the ma rket from 2014.

High Court rejects Berezovsky caseA High Court judge has dismissed a 15mcase brought by Aeroflot against exiledRussian oligarch Boris Berezovsky relatingto an alleged fraud against the part state-controlled airline in the 1990s.

Death knell for wind farmsWind farms have been peppered acrossBritain without consideration for thecountryside and peoples homes, seniorenergy minister John Hayes admitted lastnight as he warned enough is enough.

Child benefit cuts could hit overtimeControversial cuts to child benefit may hitthe economy as thousands of middle-classworkers could opt out of doing overtimeto avoid crossing the level at which the cutkicks in, experts have warned.

Finalists rise for Bank jobThe government is closer to picking thenext Bank of England governor, havingwhittled applicants down to a shortlistand begun the interviewing process,according to people in the Treasury.

Apple exec Forstall left over mapsApple executive Scott Forstall was askedto leave after he refused to sign his nameto a letter apologising for shortcomings inApple's new mapping service, a ccordingto people familiar with the matter.

Lord Heseltine says the economic recovery will be powered by individuals, not the state

4 NEWS

BY JAMES WATERSON

To contact the newsdesk email [email protected]

IT is impossible not to like MichaelHeseltine. He is an astonishinglysuccessful individual, a greatentrepreneur, a passionate speaker

who genuinely cares about the poor,and a man who almost became PrimeMinister. The tragedy is that while hisgoals are laudable the means he

wishes to use to achieve them aregenerally deeply misguided. Hisobsession with European politicalcentralisation is badly dated and heis a corporatist a supporter of closeties between the state and business rather than a free-marketeer.

Lord Heseltines plan for growth,commissioned by the government,contains some good ideas but unfor-tunately plenty of bad ones too. Letsstart with the good: it is right thatschools should engage more closelywith business, and that the bureau-cracy around work experience be sim-

EDITORSLETTER

ALLISTER HEATH

A corporatist economic growth plan that wont rescue UK Plc

WEDNESDAY 31 OCTOBER 2012

plified. The UK should indeed be runin a more devolved manner, with larg-er, unitary authorities. We need moreairport capacity in the south east, andthe government needs to indicate itspreference on the way forward assoon as possible. Immigration bureau-cracy needs to be torn up and we needa new energy policy. There is an excel-lent passage in the report on the needto develop the Thames Gateway and areflection on the success of CanaryWharf and the Docklands, thanks to

the 1980s London DocklandsDevelopment Corporation.

But Heseltine is too fond ofgrandiose strategies, wrong to seelocal government spending grants asthe solution to growth and is exces-sively enamoured with the idea ofgovernment supporting (rather than

merely enabling) companies. He is tooconcerned with political structuresand committees; he fails to focus onthe roles of bad tax and spend andmonetary policies in damaging theUKs performance. That is the biggestand most central flaw in his report.

He wrongly wants to give businessassociations a statutory role. He evenwants to consider forcing firms tojoin chambers of commerce, enshrin-ing old-fashioned, almost medieval-style, corporatism, creating aquasi-licensing system for business.

It would also be a terrible mistake

from the UK, according to research hecites. I disagree: it is good for Londonto attract the best and brightest, and Idoubt that foreign fund managerswould seek to discriminate againstthe UK. Astonishingly, Heseltinerefers uncritically to the fact thatFrance assesses mergers against a gen-

eral interest test, despite the rabidlynationalistic and economically irra-tional decisions that have resulted.The UK needs pro-growth policies.

My list would include educationreform, much lower and simplertaxes, reduced public spending, a sup-ply-side revolution, less regulation, areform to planning law and muchelse besides. Heseltine makes somegood points but his own recipe wouldnever deliver the goods.

were the government to listen to hisadvice and routinely run public inter-est tests for foreign companies seek-ing to buy UK firms. He wantsministers to use existing powers morereadily. Yet one of the UKs greateststrengths is its openness: foreignersshould be allowed to continue to buy

whatever they want here, withextremely limited exceptions relatingto genuine national security interests.Powers of intervention wouldinevitably be abused by politiciansseeking to protect jobs, capitalwould be misallocated and inferiorbusiness models allowed to continueunchecked, reducing productivity,growth, wages and job creation.Investors as well as workers wouldlose out over time.

Heseltine is concerned that only 25per cent of the top 100 investmentfunds in the City are headed by a CEO

The government should take agreater interest in foreign acquisi-tions, he concludes.

Business groups gave a mixed wel-come to the publication, although itgained the approval of the TUC.

Simon Walker, director general atthe Institute of Directors, said therestrictions on overseas investmentwere worrying and the idea that weshould be suspicious of people fromaround the world putting the moneyinto our country is misguided.John Longworth of the British

Chambers of Commerce said the plan

focuses too much on institutions,rather than on the fundamental barri-ers to business growth.

However both men welcomed plansto devolve more economic power tolocal bodies and backed a renewedfocus on growth outside London.

Business secretary Vince Cable saidthe report showed where governmentcan improve its performance in deliv-ering better interventions and GeorgeOsborne said it challenges receivedwisdom and provides ideas on howto bring government and industrytogether.

The new jobs website for London professionalsCITYAMCAREERS.com

WHAT THE OTHER PAPERS SAY THIS MORNING

n Establish a Prime Minister-led NationalGrowth Council, ensuring all parts ofgovernment support growth.

n Launch an independent body to ensurethe Councils conclusions are fully andswiftly implemented.

n Introduce a substantial devolution offunding from central government to LocalEconomic Partnerships (LEPs), based onmajor regional centres such asManchester and Birmingham.

n Ensure government backing foreconomic development is tailored to theneeds of local businesses.

n Produce an economic policy for eachsector of the economy, written with helpfrom industry and academia.

n Parachute civil servants into localgrowth teams to remove blockagesholding up business development.

n Hand a legal role to chambers ofcommerce to boost local support forbusinesses.

n The government should take a moreactive role in approving foreigntakeovers.

n Build business engagement into thenational curriculum and ensure earlyintervention into failing schools.

n Every government department shouldhire a chief procurement officer to leadthe delivery of major projects.

n Clarify policy on airport expansion inthe south east at the earliest opportunity.

n Turn all local government areasoutside London into unitary authoritiesand enable conurbations to elect a mayorfor the entire region.

THE REPORTS PATH TOECONOMIC GROWTH

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WHEN Andrea Orcel left Bank of AmericaMerrill Lynch earlier this year to join UBS asits co-head of investment banking, manyin the City believed it was only a matter oftime before he claimed the top job, writesDavid Hellier.Yesterday the Swiss bank announced thatOrcel will be leading the advisory functionsof the investment bank going

forward while co-headCarsten Kengeter willtake over winding downthe parts of the bank thathave no future.Orcel, who has long beenfriends with UBS chiefexecutive Sergio Ermotti, isthe consummate corporateadviser and he has got off toa flying start at his newplace of work. In

July he encouraged a former client of his,Russian bank VTB, to give UBS a lead roleon its $1bn perpetual bond sale. He thenhelped the bank gain a key role inSantander Mexico's $4bn share listing inNew York.Hes certainly turned a few heads here,with the way in which he's been rushingaround, said one colleague.

During a period when UBS will be goingback to focus on advisory work, eschewinga strategy of taking large balance sheetrisks, Orcel may blossom.However, one of his most talked aboutdeals at Bank of America Merrill Lynchwas UniCredit's rights issue, where thewillingness of his bank to commit its

balance sheet and take a large riskin the process played a

crucial part in thetransactions success.

IMPROVED investor sentiment and

rising market activity pushedDeutsche Banks debt incomes up inthe third quarter, the institutionreported yesterday, contributing to aboom in profits.

And the bank plans to continue togrow strongly by seizing marketshare from Swiss bank UBS, which iscutting back its investment businessto focus on areas like wealthmanagement.

Pre-tax profits came in at 1.1bn(887m) in the three-month period,up 20 per cent on the 942m in thesame quarter of last year.

The debt sales and trading armexcelled, with net revenues of2.5bn, up 67 per cent on the year.

The equity arm performedsimilarly strongly, with revenues of642m, while origination andadvisory revenues came in at 677m-up 81 per cent.

Retail banking also expanded,adding492m to the groups profits.

But expenses increased to 7bn,including276m of restructuringcosts partly due to redundancycosts from 1,900 job losses and289m in litigation-related expenses.

The changes are part of a 4.5bnsavings plan announced inSeptember, which should becomplete by 2015.

Deutsche Banks shares jumped3.48 per cent yesterday.

Debt businesslifts DeutscheBanks profits

BY TIM WALLACE

SWISS bank UBS swung to a loss inthe third quarter on costs related tothe cuts in its investment arm and ahit from a revaluation of the banksdebt, according to results publishedyesterday.

The bank lost SFr2.2bn (1.5bn) inthe three-month period, comparedwith a profit of SFr 435m in the previ-ous quarter.The firms own-credit charge of

SFr863m compared with a SFr239gain in the second quarter.

But even that hit was swamped bythe SFr3.1bn impairment loss relatedto goodwill and other non-financial

assets associated with its investmentbank.

Excluding those costs, the bankmade a pre-tax profit of SFr1.4bn,with interest and trading revenuesimproving and net fee and commis-sion income up.Wealth management profits hit

SFr600m, up almost 20 per cent onthe quarter, and asset managementprofit edged up to SFr124m.

Retail and corporate profits rose afraction to SFr409m, with strong

UBS swings toloss on a huge

goodwill blowBY TIM WALLACE deposit growth offset by tight marginsin the low interest rate environment.

UBS also increased its fully appliedBasel III core tier one common equityratio from 8.8 per cent to 9.3 per cent,well ahead of its peers.

From this position of strength weare now able to take further decisiveaction to transform the firm and posi-tion it for future success, said chiefexecutive Sergio Ermotti as heannounced plans to trim investmentbanking operations.

The bank added that the move willcut its risk-weighted assets by morethan SFr20bn.

UBSs shares jumped 5.87 per cent onthe day.

UBS AG

30 Oct24 Oct 25 Oct 26 Oct 29 Oct

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Sergio Ermotti is cutting costs by shrinking the UBS workforce

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DISNEY yesterday shocked the filmindustry by announcing it was buyingLucasfilm, the owner of the Star Warsand Indiana Jones franchises, for$4.05bn (2.52bn).The American media giants pur-

chase follows on from multi-billiondollar acquisitions of superhero fran-chise Marvel and animation studioPixar in recent years.

Disney, famous for animated filmsfeaturing the likes of Mickey Mouse,also said it would make new Star Warsfilms over the next few years, in whatis bound to be a lucrative move.The next film the seventh in the

series will hit cinemas in 2015, withepisodes eight and nine due afterthat. Our long term plan is to releasea new Star Wars feature film everytwo to three years, Disney said.The deal will be made half in cash

and half in Disney shares. Lucasfilm isentirely owned by George Lucas, whofounded the studio in 1971 beforedirecting its first film, American

Disney feels the

force with $4bnStar Wars dealBY JAMES TITCOMB

Graffiti, in 1973 and the f irst Star Warsin 1977. The series was rebooted in1999 with three new films, and whilenot critically acclaimed, they were anenormous commercial success. Webelieve there is substantial pent updemand, Disney said. The franchisealso includes video games, televisionseries and theme parks.

Lucasfilm reflects the extraordi-nary passion, vision, and storytellingof its founder, George Lucas, saidRobert Iger, Disneys chief executive

This transaction combines a world-class portfolio of content includingStar Wars, one of the greatest familyentertainment franchises of all time,with Disneys unique and unparal-leled creativity across multiple plat-forms, businesses, and markets togenerate sustained growth and drivesignificant long-term value.

Lucas, who has maintained an irongrip on the Star Wars franchise sincethe first film, said: Its now time forme to pass Star Wars on to a new gen-eration of filmmakers. He will stay onas a creative consultant.

Disney, known for characters such as Mickey Mouse, will release new Star Wars films

WEDNESDAY 31 OCTOBER 20126 NEWS cityam.com

Standard Chartered gets closeto settling Iran sanction claimsSTANDARD Chartered saw profitsrise in the third quarter, according

to its update published yesterday,although its progress was slowed bythe cost of settling claims made byUS regulators that it broke sanctionsagainst Iran.The emerging market specialist

recorded high single-digit profitgrowth, knocking its hopes ofupping profits by 10 per cent thisyear.

The bank would have seen strongergrowth were it not for a $340m

BY TIM WALLACE (211.4m) bill to settle the New Yorkstate Department of FinancialServices claims it broke sanctionswith Iran in $250bn of transactions.

It is still facing claims from fourother US regulators, which it hopescan be settled by the end of the year.Lawyers believe these could cost thebank tens of billions of dollars.

Elsewhere, the bank reportedfalling loan impairment levels on thefirst half of 2012, and risingmortgage lending.

But although the tone of theupdate was broadly positive, analystswarned the bank is facing some

headwinds.The strength of the US dollar

compared to Asian currencies hasdampened earnings growth. There

was also weakness in India and inSingapores wholesale banking andSouth Koreas consumer bankingbusinesses, said Charles StanleysNic Clarke.

Nonetheless, the group has avery strong capital base, it has con-tinued to see growth in bothdeposits and lending and theadvances to deposit ratio wasbelow 80 per cent at the end of thethird quarter.

A FORMER whistleblower and riskhead at failed bank HBOS yesterday

warned lessons had not beenlearned from the crisis.

Paul Moore told peers and MPsthat there was a threateningculture at the bank, where seniorexecutives ignored his warningsover risk and stability.

If your job was to check peopleout, there was behaviour that wasthreatening and unpleasant topeople doing these activities inrisk and compliance, Moore toldmembers of the ParliamentaryCommission into BankingStandards.

And he argued there was aconflict of interest in the reporting

lines when passing on concerns tohis superiors, as executives are

HBOS risk boss says lessons of

failure have not been learnedBY TIM WALLACE responsible for growth and so maynot act properly on risk concernswhich get in the way of that.

Instead, he called for risk andcompliance officers to report up tonon-executive directors.

However, he also added that thenon-executives at HBOS were notalways qualified for such a role.

My experience of non-executiveson risk committees is that they

were generally inadequate. As arule, they did not have technicalexpertise in risk management,audit, assurance, oversight.

More broadly, Moore said thewhole structure of business in theUK is set up in the wrong way.

The current way company law isset up drives executives to focus onshort-term profits, he said.

That is what investment analystswant, and in itself contains risks.

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INSURERS yesterday began countingthe cost of this weeks USsuperstorm, amid predictions that itwill be even costlier than last yearsHurricane Irene.

Disaster exposure specialist RMSsaid the insurance bill will be largerthan the $4.5bn (2.8bn) that theindustry paid out after Irene. Thisfollows early estimates from rivalfirm Eqecat that the bill to insurerswill be $5-10bn, with economiclosses of around $10-20bn.

Fitch Ratings said it expected thebrunt of losses to be borne byprimary writers, mainly US firmssuch as State Farm, Allstate, LibertyMutual Group, and Travelers. Thisview is shared by Societe Generale,which estimates Europeanreinsurers such as Swiss Re andMunich Re would only be affected if

losses reach or exceed $10bn.Marcus Barnard, an analyst at

Oriel Securities, said he expects theindustry will easily absorb theselosses. He also believes thatMondays insurance share sell-off,which caused many Lloyds ofLondon firms to drop by two percent, looked slightly overdone.

London firms such as Amlin andCatlin closed up yesterday asinvestors realised that the stormhad not been as bad as feared.

WEDNESDAY 31 OCTOBER 2012 cityam.com8 NEWS

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To find out more visit www.porsche.co.uk/redlines

Hurricane Sandy leavesinsurers with $10bn bill

BY JAMES WATERSON

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EUROPE BACKS OBAMA: Page 23nn


THE NEW York Stock Exchange willre-open today, little more than 24hours after the passing of themonster storm and severe floodingcaused by Hurricane Sandy.

NYSE Euronext will open fornormal trading operations incoordination with all US equities,

bonds, options and derivativesmarkets, the exchange said.

Trading will commence on theNew York Stock Exchange at9:30am (Eastern Time) undernormal opening procedures, andthe NYSE Euronext building andtrading floor are fully operational.

The exchange had said that it

New York Stock Exchange setto resume full trading today

BY JULIAN HARRIS could switch to fully electronictrading if necessary, but such acontingency plan is not believed to

be necessary.The devastation [caused by the

storm] is a huge concern for stocksand sectors exposed heavily to

transport, logistics, industrial andinsurance and we are set to see asignificant hit to share prices on

Wall Street when trade resumes,said Ishaq Siddiqi of ETX Capital.

With that in mind, the gainsmade in Europe on Tuesday arelikely to be under increasedpressure in todays session.

The latest Chicago purchasingmanagers index is expected today.

DOZENS of US companies wereforced to delay the release ofearnings reports yesterday as themarket was frozen for a second day.

The likes of pharmaceutical giant

Pfizer, financial news providerThomson Reuters and power firmNRG, were all set to report eithertoday or yesterday, but delayed untillater in the week. Others includedGNC Holdings, TimeWarner Cable,Spirit Airlines and TripAdvisor.

One company that did releaseresults was car giant Ford, whichtrounced forecasts to reportrevenue of $32bn (19.9bn) and apre-tax profit of $2.2bn.

Freeze delaysfirms results

BY JAMES TITCOMB

PRESIDENT Barack Obamacancelled campaign appearances inOhio due today and scheduled atrip to New Jersey instead tosurvey damage caused by powerfulstorm Sandy, a move designed toportray him as a strong leader a

week before the election nextweek.

Obama, who is in a close racewith Republican rival Mitt Romney,has dropped three days ofcampaigning in battlegroundstates to oversee the governmentresponse to the storm, which

crippled New York City and muchof the eastern US.

Obama consoles heartbrokencities ahead of looming voteBY HARRY BANKS The White House has taken

pains to show Obama at work,releasing readouts on briefings hehas attended and calls he has madeto governors and mayors of statesand cities affected by the storm.

Our thoughts and prayers goout to all the families who havelost loved ones ... Obviously, this issomething that is heartbreakingfor the entire nation," he said froma podium with Red Cross workersin the background.

Romney also cancelled somepolitical events, but his campaignannounced he would hold rallies inFlorida another battleground

state today.

Clockwise from left: Residents survey the damage left by fires after the storm hit;downtown New York; fallen trees in a near-deserted Manhattan

MARKET REPORT: Page 25nn

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Bayer swallowsSchiff Nutrition

OIL giant BP yesterday announced aquarterly dividend hike of 12.5 percent, as it reported a jump in thirdquarter profit.The dividend increase to nine cents

a share, which will be paid in thefourth quarter, was announced justdays after BP confirmed it is to sell its50 per cent stake in TNK-BP to Russianstate-owned producer Rosneft in adeal worth $27bn (16.8bn).

Profit was up 40 per cent in thethree months to September to $5.2bn,from $3.2bn in the previous quarter.But it fell from $5.5bn a year ago.A strong downstream performance

helped lift the numbers.The oil major has enjoyed a cash

boost recently, as it has so far raised$35bn out of its planned $38bn assetsale. It will also net $12bn in cashfrom the sale of its stake in TNK-BP.

Chief executive Bob Dudley yester-day said that BPs strong progress intransforming the company give usthe confidence to increase distribu-tions to our shareholders.

Dudley also touched upon the Gulf

Russian sale

helps BP hikeits dividendBY CATHY ADAMS

of Mexico oil spill, saying that BP wasready for a court battle with USauthorities if necessary.

It is currently in talks with theauthorities regarding a final settle-ment for the 2010 oil spill.

Meanwhile, the British oil majorreported that production was broadlysimilar to last quarter, with produc-tion excluding TNK-BP at 2.26m bar-rels of oil equivalent a day.

In a separate announcement, TNK-BP announced a 53 per cent profitsurge over the quarter.

Net income rose to $2.7bn (1.7bn)from 1.8bn last year thanks to lowertaxes and costs.

BP PLC


435

425

445p

442.8530 Oct

The recently announced agreement with Rosneft leaves BP withexposure to the important Russian region without some of the previousdistractions, and the hike in the dividend is proof of managementsoptimism for prospects.

ANALYST VIEWS

The results are strong, and they provide reassurance that the groupremains focused on its core operations. Although the potential liability for theGulf of Mexico oil spill remains an uncertainty, we are positive on theshares, which continue to trade on a discount to asset value.

The results were much stronger than we, and the market, anticipated.

Overall, we have seen a much better result than the poor second quarter and the

company has moved early on a dividend increase to nine cents a share.We retain our buy rating on the stock.

WERE BPS RESULTS WHATYOU WERE EXPECTING?

Interviews by Cathy Adams

RICHARD HUNTER HARGREAVES LANSDOWN

JONATHAN JACKSON KILLIK & CO

STUART JOYNER INVESTEC SECURITIES


Kweku Adoboli, a former seniortrader on the banks ETF desk

GERMAN pharma group Bayer is to buy USvitamins maker Schiff NutritionInternational for an agreed $1.2bn (747m)as it seeks stable sources of growth to

complement its more volatile prescriptiondrugs business.Bayer said it was offering $34 per share

in cash to Schiff shareholders, a 47 percent premium over Friday's closing price.

The German group expects to benefitfrom Schiffs strength in productdevelopment and brand recognition, andthat the deal will close by the end of 2012.Bayer said it had support from investorsrepresenting more than half of Schiff'svoting rights.

FORMER UBS trader Kweku Adobolitold a London court yesterday he

lost control in the summer of2011 but insisted he neveracted dishonestly in thefrantic weeks that resulted inlosses of $2.3bn (1.43bn).

Ending an emotionalthree-day defence againstcharges of fraud and falseaccounting, a tearfulAdoboli said he wasdevastated and sorrybeyond words about the

losses. But he attacked the culture ofinvestment banks, arguing thatcompliance rules were aspirational and

that traders had to bend rules to

achieve the goals set by seniormanagement.The 32-year-old British-

educated Ghanaian denies twocounts of fraud and four of falseaccounting. The trial continuestoday, when Adoboli will becross-examined by theprosecuting counsel.

UBS trader Adoboli tellscourt that he lost control

BY CITY A.M. REPORTER

BY CITY A.M. REPORTER

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PLATINUM miner Lonmin yesterdaysaid it was planning an $800m(497m) rights issue to shore up itsbalance sheet in the wake of a violentfive-week strike over the summer.The worlds third-largest platinum

miner had previously warned of thepossibility of an equity raising, afterthe strike at its Marikana mine inSouth Africa hit output.The proposed rights issue will

reduce indebtedness and increase theminers financial strength, Lonminsaid yesterday.

It will be underpinned by a standbyunderwriting agreement.

Lonmin also said it had tweaked adeal with its lenders to remove earn-ings-related covenants.The companys debt covenants are

due to be formally tested in earlyNovember, although Lonmin said yes-terday that it was unlikely that theywould be breached.

Employees at Marikana have nowreturned to work, following Lonminsincreased pay offer last month, andthe firm said the ramp up to full plat-inum production was going better

than expected.

Strike-hit minerLonmin plans$800m cash call

BY CATHY ADAMS Platinum output for the fourth quar-ter was down 45.7 per cent year-on-year due to the industrial actionwhich crippled production through-out August. Around 110,000 ounces ofmined platinum were lost due to thestrike, Lonmin said.

Chairman Roger Phillimore saidthat following the events at Marikana,the miner needed solid financialfoundations for the future.

With the standby underwriting andamended debt facilities signed wehave taken two decisive steps on ourway to delivering that.

We are confident about our finan-cial security, he said.

Lonmin shares closed up 6.98 percent yesterday at 507.04p.

INVESTMENT bank JP Morgan Cazenove islikely to have won a role advising Lonmin onits $800m rights issue. It has worked withthe miner previously, on a share subscriptionwith Shanduka last year. The team is likely tobe headed up by Michael Wentworth-Stanley, a senior rainmaker at the bank. Hehas been a managing director at JP MorganCazenove since 2005 but began his career asa chartered accountant in 1974. Wentworth-

Stanley joined Cazenove in 1975 and was a

partner at the firm between 1982 and 2001before becoming the managing director ofCazenove & Co from 2001 until 2005. Mostrecently, he has been involved with SericaEnergy and its project in the North Sea.Other companies he has worked withinclude GCM Resources and technologyinvestment group Imperial Innovations. In2010 he led the team working for banknoteprinter De La Rue when it rejected a takeoverbid.Citigroup is also thought to be working withLonmin on this transaction. Managing direc-tors Tom Reid and Alex Carter have beeninvolved with Lonmin previously, and it islikely they would be heading up the team.Other banks that are speculated to have arole include HSBC Holdings and South

Africa-based Standard Bank.

ADVISERS JP MORGAN CAZENOVE

JP MORGANCAZENOVE

The administrators of London black cab maker Manganese Bronze yesterday called forpotential lenders to contact them as a matter of urgency, after the company confirmed ithad appointed PwCs Matthew Hammond, Tony Barrell, Ian Green and Mike Jervis. The makerof the iconic vehicles went into administration after failing to secure new funding last week.

PWC SEEKS FUNDING FOR MANGANESE BRONZE

SHARES in Egyptian gold minerCentamin lost a third of their

value yesterday, as an Egyptiancourt said the companys right to

operate its flagship Sukari GoldMine was invalid.However, the miner yesterday

said that the concessionagreement, which allowsCentamin to explore, develop andextract gold from the Sukarimine, is part of law and the courtdoes not have jurisdiction tocancel it.

It said that the court had onlymade comments about the case,

no details of a final decision areavailable, and no written

judgement has been given.FTSE 250-listed Centamin

added yesterday that operationscontinue as normal at Sukari.

Emerging markets drillingcompany Capital Drilling, whichprovides rigs to miningcompanies, also said yesterdaythat operations at Sukari werecontinuing as normal.

Shares dropped almost 60 percent during trading, beforerecovering some ground to hoveraround 35 per cent down whenthe shares were suspended ataround 10am yesterday.

Sukari is the only operatingmine that Centamin has in Egypt,although it also has fourexploration licences in northernEthiopia.

BY CATHY ADAMS


Centamin plummets as Egyptian courtssay right to operate gold mine is invalid

Centamin PLC


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LOW and middle income earners in

the UK are in the midst of a longstagnation in living standards,according to a key report publishedthis morning.

The independent Commission onLiving Standards set up by theResolution Foundation says thatlarge swathes of households willbe no better off in 2020 than theywere in 2000.

Technological developments andglobalisation are prompting ahollowing out of middle-incomejobs, the report says. Two millionsenior and professional jobs areexpected to be created along with400,000 basic service and elementaryjobs. Meanwhile 800,000 mid-leveladmin and manufacturing jobs lookset to be lost, it adds.

The report proposes that taxes becut for low earners. Under currentgovernment plans, a low paid second

earner will face an effective tax rateof 65 per cent from the f irst poundthey earn, it says, suggesting thatUniversal Credit be unaffectedduring the first 2,000 earned.

Middle Britainhit by stagnantliving standard

BY JULIAN HARRIS

THE NUMBER of banks and buildingsocieties looking to take cheap fund-ing from the government more thandoubled in the last month, accordingto official figures published yesterday.The Bank of England revealed

another 17 have signed up to theFunding for Lending Scheme (FLS),which offers lenders cheap funds inthe hope that they will increase creditto businesses and households, takingthe total to 30 institutions.

Initially, each is eligible to take fund-ing equivalent to five per cent of theirstock of lending as of 30 June 2012.

If they increase lending, they will be

offered more funding. But if they cutlending, the cost of the funding rises.The largest to sign up in the last

month is the Clydesdale Bank, withoutstanding loans of 33.2bn.

30 lenders nowready to take

state fundingBY TIM WALLACE The smallest is Metro Bank, whichhas 78m stock of loans as of 30 June.Together the 17 banks stock of loans

stands at 113.9bn, or 6.9 per cent ofall lending, and if they tool up all oftheir initial FLS allowance it wouldcome in at 5.7bn.

HSBC remains the biggest bank thatis not taking part.

We now expect participants toaccess 85-90bn, previously 80bn-85bn, of funding over the 18-monthwindow, including 20-25bn in newnet lending, said Barclays analystChris Crowe. However, we do notexpect the scheme to transform theUK credit environment, as mostlenders still face balance sheet pres-

sures, demand for credit among high-quality borrowers remains subdued,and lenders will be unwilling to lowercredit standards to encourage addi-tional borrowing.

Digital economy jobs leap as

clamour for engineers growsDEMAND for IT jobs leapt bymore than a fifth in the last fewmonths, as firms increasinglyinvested in app and websitedevelopment, and internet retailand advertising picked up.

Figures from online jobwebsite Freelancer.co.uk showedthat adverts for the worlds 50most popular digital jobs grewfrom 230,614 in the third quarterof the year from 189,917 in theprevious quarter.

Some of the fastest growingjob postings were for HTML 5developers for buildingwebsites using the latest

programming tools, for eBaysellers as the site unveiled a

BY JAMES TITCOMB radical redesign and ahead ofChristmas, and for Facebookadvertisers as the social networkrecovered from the gloomsurrounding its initial publicoffering in May.

The figures also came as aboost to Googles Androidsmartphone software and a blowto Apple.

Job postings associated withAndroid, such as app developers,rose 16 per cent in the quarterafter the success of Androidshottest smartphone, theSamsung Galaxy SIII, whiledemand for iPhone jobs rose at amuch slower eight per centahead of the launch of the

iPhone 5 and the iOS6 software.The survey revealed that the

biggest increase in jobs wasassociated with the paperlessoffice transcribing paperdocuments into files and movingthem online. Jobs for copy typingand the translation of paperdocuments to electronic onesrose 145 per cent in the quarter,driven by the increased use ofcloud computing storingdocuments online.

Recent tweaks to how Googlearranges its websites and advertsin search results also drove jobs.

Internet marketing and searchengine optimisation positionswere both up 12 per cent, whilelink building increasing thenumber of external websites that

link to a clients rose by eightper cent.

Bank of England governor Sir Mervyn King hopes the scheme will boost the economy


THE FASTEST GROWING ONLINE JOBS

230,614JOBS POSTED in Q2

vs

up from

189,917

iPhone JOBS

5,5098%

Android JOBS

4,79516%

ANDROID JOBS FOUGHT BACK AS

APPLE iOS JOBS LEVELLED OFF

COPY TYPING AND THETRANSLATION OF PAPERDOCUMENTS TO ELECTRONICJobs up

8% to

3,038

Returned to 11% job g rowthafter decline of 14% last quarter

44%

Demand

for jobs

145%Job Category

Copy Typing

eBay

Wordpress

HTML5

jQuery / Prototype

1

Rank

2

3

4

5

MORE OFFICESWENT PAPERLESS

Growth

145%

44%

41%

32%

27%

Q3 2012

6,932

3,038

1,470

2,972

7,703

Q2 2012

2,826

2,108

1,039

2,245

6,084

SOURCE: Freelancer.co.uk* all data for 3 months to 30 September 2012

12%15,475JOBS

INTERNETMARKETING

12%10,509JOBS

SEARCH ENGINEOPTIMISATION

8%7,068JOBS

LINKBUILDING UP

Institution Stock of lending as of 30 June

17 MORE LENDERS HAVE JOINED THE FUNDING SCHEME

Arbuthnot Latham 507m

Cambridge Building Society 851m

Clydesdale 33.2bn

Co-operative Bank 31.8bn

Coventry Building Society 21bn

Cumberland Building Society 1.2bn

Julian Hodge Bank 374mManchester Building Society 569m

Mansfield Building Society 213m

Market Harborough BS 322m

Metro Bank 78m

Newbury Building Society 554m

Newcastle Building Society 2.7bn

Nottingham Building Society 2.1bn

Skipton Building Society 9.5bn

Tesco 4.8bn

West Bromwich BS 4.1bn

Total: 113.9bn

Total of all 30 banks: 1.33 trillion

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Lib Dem minister Jo Swinson said employee-owned firms are flexible and resilient

THE GOVERNMENT yesterdayunveiled a package of measuresaimed at promoting theemployee-ownership model, withthe aim of allowing more workers

to have a stake in their business.This will see the development of

a simple off the shelf templatefor setting up an employee-ownedcompany, as well as work to raiseawareness of the model.

Government plans boost foremployee ownership model

BY JAMES WATERSON However the well-establishedEmployee OwnershipOrganisation yesterday publishedan open letter to businessminister Jo Swinson, raisingconcerns about parallel plans tolet workers trade employment

rights for shares.Our members are very aware

that there is no need to dilute therights of workers in order to growemployee ownership, it says.


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Metropolitan Police proposesale of New Scotland Yard HQLONDONS police force could leaveits iconic New Scotland Yard base

in order to meet tough cost-cuttingmeasures imposed by City Hall, itwas revealed yesterday.

The Westminster building hasbeen the forces headquarters for45 years but the Met says dramaticmeasures are needed if it is cut500m from its existing 3.6bnannual budget by 2015.

Deputy commissioner CraigMackey unveiled the proposalyesterday morning and said the

BY JAMES WATERSON building which houses the Metstop brass, as well as severalspecialist units costs 11m a yearin maintenance and needs a 50m

upgrade to meet modernstandards.Its an expensive building to

run and its anexpensive building tomaintain and as we gothrough this changeprogramme its goingto have space in it thatwe dont need. Incentral London thatsan expensive luxury, Mackey said.

The force could move to theCurtis Green building next to theMinistry of Defence on theEmbankment, a smaller space that

is already owned by theMetropolitan PoliceAuthority.

Although New ScotlandYard was purpose built forthe police, it only boughtthe freehold from LandSecurities in 2008 for124m.

Its famous rotating signwill be moved to the new

location.

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THE NUMBER of offices being

converted into homes is set to jumpsignificantly over the next two yearsas developers chase higher returnsfor their property, according toproperty services firm DTZ.

Strong growth in Londonresidential values and weakdemand for secondary officeproperty is prompting developersand landlords to turn tired officeblocks into prime living space.

The report by DTZ publishedyesterday shows that planningpermissions for conversion toresidential units in central Londonreached 2,197 in the first ninemonths of the year, up from 1,178units for 2011 in total.

As a result, DTZ predicts thenumber of scheme completions tojump by 12 per cent next year to1,350 units compared with theprevious year and by 18 per cent to

around 1,600 units in 2014.The West End has traditionally

seen the highest rate of conversions,where residential values range up to3,250 per square foot compared toprime office values of around2,100 per sq ft.

But the City and its outskirts isseeing a rapid pick-up in residentialschemes, including CIT GroupsKings Reach Tower scheme, and isset to account for 40 per cent oftotal units delivered in 2013-2014.

Record level ofoffices turnedinto residences

BY KASMIRA JEFFORD

PRIME London property valuessoared in the third quarter, twoseparate data releases showed yes-terday, boosting the number ofhomes worth more than a millionpounds to over two fifths.

Forty-three per cent of homes inprime London areas are now worthat least 1m, data from estateagent Marsh & Parsons showed,compared to 35 per cent last year.This headline figure only high-

lights an upward trend, with primeproperty prices growing 3.5 percent in the third quarter, puttingthem some 11.1 per cent higher

than in the third quarter of 2011.This means the average prime

London property is worth some1.29m, while the average propertyin prime areas of central London isvalued at 1.89m. A four bedroomhome would set a buyer back2.73m on average, if they wishedto live in a top central Londonlocation.

Harcourt House in CavendishSquare, London, which yesterdayinvited offers of 60m and above

Prime propertyin capital still

rocketing upBY BEN SOUTHWOOD for freehold from December 2015, isonly one example of the boomingmarket, which has consistentlydefied downturn elsewhere acrossthe country.

The number of property million-aires in the capital has shot up,said Marsh & Parsons boss PeterRollings. Properties no longer haveto be palatial to be worth 1m.

Rollings said that internationalinterest, once clustered in only themost desirable areas, has startedspreading out through the capital,leading to price rising ripples acrossthe city.

Wealth has been overflowinginto areas like Balham, Clapham

and Brook Green, pushing up pricesand boosting the number of 1mproperties, Rollings added.

But Rollings suggested that theboom could start to slow down assupply to the market though stillvery low was outpacing new buyerregistrations.This data was backed up by a simi-

lar data release from Cluttons,which said prime central Londonproperty values were 7.1 per cent upon the year.


Harcourt House in Cavendish Square is expected to be sold for more than 60m

CAN YOU SEE THE APPEAL OF ACONVERTED OFFICE BUILDING?Interviews by William Campbell and Oliver Hill-Smith

Converted office units offer an alternativeinvestment opportunity for City workers. The

process of converting offices uses space in prime locationsacross the city that otherwise would be left derelict.

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

PAUL COOPEROSBORNE CLARK

Office spaces that have be en converted into resi-dential units give buyers the perfect opportunity

to acquire beautiful, old, period buildings. For these spacesto be successful though, you have to remove the office feel.

ROBERT MCCREATHARCHON SOLICITORS

Many people I know would hate to live in aspace that was an office. You work in an office,

you live in a home. However, I can see the draw thatconverted office units would have for young people.

ANDREW DAVISBANCO POPULARE

CITYVIEWS

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For further information regarding the fund management research reports and / or the methodology applied for these awards please contact [email protected] or call +44 (0) 20 7176 8500

Copyright 2012 by Standard & Poors Financial Services LLC (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved

Who Won One?

S&P Capital IQ fund research is delighted to recognise and honour those

individuals and teams that have demonstrated superior quality in their

investment capabilities, as recognised by our 14-strong team of fund analysts

who review and consider the gradings of over 1,100 funds a year.

For more information on these winners and the qualitative fund research

from S&P Capital IQ please visit www.spcapitaliq-funds.com

Diversified Group of the Year

Portfolio Manager of the YearSpecialist Group of the Year Sustained Excellence Award

Investment Team of the Year New Fund Launch of the YearRising Star of the Year

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Congratulations to the winners of the 2012 S&P Capital IQ UK Fund Awards

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IN BRIEFM&S to launch four overseas sitesnMarks & Spencer is to step up itsinternational growth plans with thelaunch of four new foreign languagewebsites next month. The retailerrevealed that it will expand online in

Germany, Spain, Austria and Belgiumon 19 November after opening its firsttwo overseas sites in France andIreland in the past year. This is usmoving forward with our plan totransform M&S from traditional Britishretailer to a leading international,multi-channel retailer, said chiefexecutive Marc Bolland. M&S deliversto over 80 countries through its UKwebsite and said those four marketswere among the most populardelivery destinations.

Hugo Boss posts China sales risen German fashion house Hugo Bosssaid yesterday it was seeing somesigns of improvement in China, withsales picking up there in the thirdquarter. We do see stabilisation butno recovery in consumer confidence in

China yet, chief executive Claus-Dietrich Lahrs said, as the firm postedthird-quarter earnings showing flatsales of 646m (521m) and a drop incore profits. Warnings on slowingdemand in China from luxurycompanies such as Burberry havespooked the luxury sector in the lastcouple of months. Shares in HugoBoss have dropped 13 per cent overthe last three months. Neverthelessthe group said sales in China rose fiveper cent, up from just one per cent inthe second quarter. Earnings droppedseven per cent to 165m.

PREMIER Foods yesterday said it hasagreed to sell its Branston range ofpickles and sauces to Japanese foodmanufacturer Mizkan for 92.5m, inits latest efforts to pay down debts.The deal, which is expected to be

completed early next year, includesPremiers Bury St Edmunds factorywhere the sauces including Branstonrelish, salad cream and mayonnaiseare made.

Premier said all 350 employees atthe site will transfer to Mizkan, whichalso bought its Sarsons and Haywardspickled onion brands for 41m earlierthis year.The FTSE 250 firm ran up large

debts after a decade-long acquisitionspree and has been selling off assets tomeet the refinancing terms agreedwith its banks in March.

The sale of the Branston brands willtake Premiers total disposals to370m, exceeding the 330m it has toraise by 2014 as part of the refinanc-ing deal. The funds will cut its 1.3bndebt pile by 30 per cent.

Premier sells

Branston armin 92.5m dealBY KASMIRA JEFFORD

Michael Clarke, chief executive, said:Im delighted to have exceeded ourdisposal target 20 months early whileat the same time delivering three suc-cessive quarters of sales growth.

Kazuhide Matazaemon Nakano VIII,chief executive of Mizkan, saidBranston was an excellent strategicfit with its portfolio and adds to oursolid foundation for growth in the UK.The pickle sauce was first produced

in 1829 in the village of Branstonbefore being turned into a brand in1922 by Crosse & Blackwell. Premierbought the foodmaker from Nestle in2002 before selling it again in 2011.

ADRIAN Maguire, corporate partner atFreshfields Bruckhaus Deringer, acted forPremier on the sale of its sweet pickles andtable sauces business with the support ofintellectual property partner Andrew Craig.Law firm Ashurst advised Mizkan.Maguire joined Freshfields in 1996 as atrainee, after graduating from Durham, andwas made partner in 2008. He has focusedsolely on private equity deals since 2005 butfirst struck a relationship with Premier after

advising buyout firm Warburg Pincus on its64m investment in Premier Foods in 2009.Maguire said yesterdays deal was not an

easy feat and required the carving out ofall the assets up for sale from the existingbusiness and moving them to Mizkans oper-ations.Earlier this year he advised European privateequity firm Cinven on its acquisition of legaloutsourcing company CPA Global. He alsoacted for Cinven when it acquired a majoritystake in Turkish alarm systems providerPronet Gvenlik in June its first move intothe Turkish market.Other deals including advising Warburg thissummer on the sale of Mach, a Luxembourg-based business that provides roaming andbilling services to mobile phone companies,to Syniverse Holdings for 550m (444m).

ADVISERS

ADRIAN MAGUIREFRESHFIELDS

Quarto attacks rebel investorsover attempt to oust founderBOOK publisher Quarto yesterdaylashed out at a group of investorsaiming at ousting co-founder andchief executive Laurence Orbach,urging other shareholders to voteagainst his being replaced at ameeting next month.

The group also warned that thespat was a distraction at a timewhen it should be focusing itsattention on opportunities thatmight arise from Penguins mergerwith Random House.

Activist investor ChristopherMills Harwood Capital and the

Wellcome Trust who betweenthem own 20 per cent are urging

BY KASMIRA JEFFORD fellow shareholders to removeOrbach, who is also chairman buthas already agreed to relinquish theCEO post, and replace him withindustry veteran Tim Chadwick, in avote on 7 November.

But in a circular sent toshareholders yesterday, Quartosboard warned the move would becompletely detrimental to the bestinterests of the company andsnubbed Chadwicks poor record ofrunning publishing businesses.

The board said the formerBookseller chief executive has not

been involved in the industry forapproximately 15years.

It also addedthat MarcusLeaver, chiefexecutivedesignatewho joined inMarch, wasadmirablyequipped forthe task ofsucceedingOrbach.

Premier Foods PLC


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Laurence Orbach has come under pressure tostep down soon from the top job at Quarto


WITH the US markets firmlyshut for a second day,investors had no choiceyesterday but to focus on

corporate events closer to home.Luckily the FTSEs resources stocksmore than made up for the lack ofAmerican action, with market

watchers gripped yesterday by theunfolding tale of two miners.First up, Lonmin finally

announced its long-awaited rightsissue. Far from being priced in, thepreliminary plans despite a heavilyrevised production update sent thestrike-hit miners shares up byalmost seven per cent. LonminsSouth African strike saga has beenthe longest and sorriest of them all,starting way back in April and

culminating in mid-August with theshooting of 34 workers at thecompanys Marikana mine by police.A deal has now been struck with thedissenting mine staff, but at a pricethat will add 11 per cent to its overallwage costs for next year.

Add that to a 46 per cent drop inplatinum concentrate due to theunrest and looming debt covenants,and youll understand why investors

are breathing a sigh of relief at the$880m cash call.

But they might do well to holdtheir breath. Details of the rightsissue yesterday were scant, butanalysts were speculating about therole that Xstrata which owns a 25per cent stake in Lonmin after afailed takeover attempt would play

in approving the deal.The mining giant, currentlynegotiating the stages of its own dealapproval in its tie-up with Glencore,has so far kept schtum throughoutthe Lonmin crisis but last night saidit was considering its position onwhether to subscribe.

Xstratas statement said it wouldexamine the companys strategy,business plan and managementcapability to ensure an attractive and

sustainable future, and where thebig money goes, smallerstakeholders may follow.

Meanwhile at the opposite end ofthe movers board, Centamin wasstuck so firmly on the sell pile that itwas forced to suspend trading in itsshares after they plummeted asmuch as 59 per cent.

The gold miners problems are alsoAfrica-focused, but around 4,000miles due north in Egypts Easterndesert, where yesterday a local courtannulled the licence of the FTSE 250firms key asset the Sukari mine.

Yesterday all Centamin could dowas tell investors it wasnt a party tothe case, and that it had seen nowritten judgement or details of thefinal decision. Sukari has alreadybeen shut down twice this year due

to strike action, and until moreclarity can be given the shares areunlikely to recover.

Back in August it reported recordoutput of 67,422 ounces for thesecond quarter up 40 per cent onthe previous year. Analysts arehopeful that the firm will be able toappeal and overturn the decision,

but any delay will inevitably impactproduction and could leaveworkers disgruntled.

Africas mining disruption mayhave quietened down since theheated days of this summer, butyesterday was a stark reminder ofthe threats that still exist and theinvestor headaches that they canspark.Elizabeth Fournier is news editor of CityA.M. @ej_fournier

BOTTOMLINE

ELIZABETH FOURNIER

Miners on shaky ground despite stabilising backdrop

Premier relishes the sale of its B ranston unit after debt pile left the firm in a pickle

MOTORISTS will bear the cost of anew Thames crossing in eastLondon, Transport for London said

yesterday.TfL has not set aside any money

in its budget for the plannedtunnel at Silvertown or a new

vehicle ferry service, and said themost appropriate way to fund theprojects would be to charge a toll.

Drivers using Blackwall Tunnel,which is currently free, will facecharges of around 2 for cars, 2.50for vans and 5 for large trucks,under preliminary plans put outfor consultation by TfL.

The levies could be hiked duringrush hour or lowered in quiet

times to manage traffic.Silvertown Tunnel is expected to

Drivers face Blackwall Tunnel

toll to fund new river crossingBY MARION DAKERS cost around 600m to build, andwill not be open until at least 2021.Users of this new tunnel will also

be charged a toll.TfL said both tunnels would have

to impose levies to preventmotorists flocking to the oldercrossing to avoid the charge andcausing long delays.

But the Rotherhithe tunnelwould be spared because it serves adifferent set of destinations, TfLsaid.

As well as the extra tunnel, thetransport authorities envisage anew vehicle ferry crossing betweenThamesmead and Beckton, which

would open by around 2017. TheGallions Reach Ferry is expected toreplace the Woolwich Ferry.

Londoners have until Februaryto submit their views on the plans.

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IN BRIEFWatchdog to examine ferry dealn The Competition Commission willprobe Eurotunnels takeover of someof collapsed ferry operatorSeaFrances assets, after the Office of

Fair Trading yesterday referred thecross-channel deal to the watchdog.Eurotunnel hopes to take on threeboats and other assets fromSeaFrance, which fell into liquidationat the start of the year. The OFT isworried that only Eurotunnel and P&Oare left as large competitors on theDover to Calais crossing after theacquisition.

Banks extend Rusal covenantn Russian aluminium producer Rusal,controlled by billionaire OlegDeripaska, has extended a waiverfrom its banks to the end of 2013 tomeet its financial covenants on a$4.75bn (2.95bn) syndicated loan, asit battles falling prices and higherdebt. In March, it agreed a 12-monthholiday on the financial conditions,

and has now extended the holidayuntil the end of next year.

Wolfson back in the blackn British chipmaker WolfsonMicroelectronics delivered its firstprofitable quarter since the end of2010 as its technology was used inSamsungs popular Galaxy SIIIsmartphone and Microsoft's Surfacetablet. The company yesterdayreported an underlying operatingprofit of $3.4m (2.1m) against a$0.7m loss a year ago and a $1.3m lossin the last quarter. Revenue was up 31per cent on last year to $53m.

IMPERIAL Tobacco, the worldsfourth largest cigarette group, report-ed an eight per cent rise in annualearnings yesterday, helped by strongrevenue growth from its key brands.The British firm, which sells over

340bn cigarettes annually of brandssuch as Davidoff, Gauloises, JPS andWest, said adjusted earnings rose to201p a share for the year to end-September, ahead of a company-com-piled consensus of 199.6p.

It raised the annual dividend by 11per cent to 105.6p a share, boostingits payout ratio from earnings to 52.5per cent.

Revenue rose four per cent to 7bn,however, reflecting the groups aimto counter Europes downturn byoffering economy-brand cigarettes,such as JPS, Lambert & Butler androll-your-own products, while alsoraising prices for more affluent con-sumers in western Europe and theUS.

We see significant growth oppor-tunities in our rest of the worldregion across Eastern Europe, Africa

Big brands help

Imperial profitsbeat estimates

BY CITY A.M. REPORTERand the Middle East and Asia-Pacificand we'll continue to invest to sup-port sustainable growth, the firmsaid.

Overall stick equivalent volumesdeclined 2.7 per cent in the perioddue to tough markets in Poland,Ukraine and compliance with inter-national trade sanctions againstSyria.

Its four key brands -- upmarketDavidoff, mid-priced GauloisesBlondes and value brands West andJPS -- saw annual volumes increaseseven per cent. Its Gold Leaf andGolden Virginia fine cut business vol-umes were stable, it added.

EE rolls out UKs first 4G mobilenetwork amid contract criticismTHE UK finally saw its first high-speed 4G service switched on

yesterday after years of delays andlegal threats between the countrysmobile networks.

EE, the parent of Orange and T-Mobile formerly known asEverything Everywhere, launchedits 4G service in 11 UK cities andmoved the first customers onto itsnew, third, network, also called EE.

EE claims the 4G service will offerspeeds on average five times fasterthan current mobile data speeds,allowing faster downloads and

BY JAMES TITCOMB trouble-free streaming of high-definition video.

The company now has anestimated seven-month headstart on

rivals, which will not be able tolaunch 4G services until pre-approved spectrum is cleared for use.

Broadcasting regulator Ofcomgranted EE early 4G clearance for itscurrent mobile airwaves for 4G inAugust, a decision that sparkedoutrage from its rivals.

Ofcom will auction off three lotsof new spectrum at the start of nextyear. The lots are expected to go toVodafone, O2 and EE which needsthe extra spectrum to bolster the

network it switched on today.The countrys fourth operator,

Three, will be able to run a 4Gnetwork using a slice of the airwaves

EE was forced to sell off as acondition of gaining early access,although EE does not have to do sountil next August.

EEs service will cost on average 5per month higher than 3G contractswith similar allowances, and willonly be available on certain high-endhandsets. The tariffs were criticisedwhen announced last week, since at4G speeds, the monthly dataallowances of the cheaper tariffscould be used up within minutes.

Telefonica Germany rises in firstday of years biggest Europe IPOSHARES in Spanish telecoms giantTelefonicas O2-branded Germanunit rose in its first day in tradingyesterday following Europesbiggest initial public of fering(IPO) in more than a year, addingto a fledgling recovery in theregions new issues market.

The offering will raise as muchas 1.45bn (1.17bn) for SpainsTelefonica to trim its huge debtpile, and is a positive step for anIPO market which has struggledfor months amid Europes debt

crisis and sluggish economicgrowth.

BY HARRY BANKS Telefonica said on Monday itwas selling a 23 per cent stake inGermanys smallest mobileoperator, including anoverallotment option, for 5.60 ashare. The price was in the lowerhalf of Telefonicas original 5.25-6.50 range, which it narrowedtwice during bookbuilding.

Telefonica Deutschland sharesbegan trading at 5.70 yesterdayand rose to 5.80 by the end oftrading, valuing the unit ataround 6.4bn.

We have seen a re-emergence ofsome sort of IPO market. The

recent transactions, the fact theyhave gone well, is clearly

presenting a positive backdrop,said one banker not involved inthe deal, referring to other recentlistings such as Talanx and DirectLine.

Imperial Tobacco Group PLC


2,325

2,300

2,350

2,375

2,400 p 2,368.1530 Oct

The iPhone 5 has led Appleto recover market share

THE ARRIVAL of Crossrail and theregeneration of Tottenham CourtRoad is set to double spending

growth in the area by 448m overthe next 12 years, according to areport commissioned by the New

West End Company.The east end of Oxford Street has

struggled over the years to shakeoff its image as the poorer relationto the more fashionable West End

but has fought to lure high profileretailers to set up shop.

The report, conducted byproperty advisory firm GVA and

East Oxford Street prepares formajor high street regeneration

BY KASMIRA JEFFORD presented to property executivesyesterday, estimates that the launchof Crossrail in 2018 will boost thenumber of visitors to the area by 36per cent, with Tottenham CourtRoad set to overtake Oxford Streetas the West Ends highest footfalltube station.

Chris Goddard, senior director atGVA, told City A.Mthe launch of a

giant 82,400 square foot Primarkstore last month marked the

beginning of a retail renaissancein the area and sets in motion aseries of developments that will seethe area rival the west end ofOxford Street.


Crossrail is set to bring an extra 200,000 visitors per day to Tottenham Court Road

APPLES iPhone clawed back shareof the smartphone market in theUK and Europe in the six weeks tothe end of September, as sales of

the iPhone 5 reversed a declineseen in recent months.The latest data from

research firm KantarWorldpanel showed thatApple had 28 per cent of allUK smartphone sales in theperiod, up from 21 per cent inthe preceding six weeks. Theperiod counted just nine days

Sales of iPhone 5 reinvigorateApples standing in UK market

BY JAMES TITCOMB of sales of the new iPhone 5.However, despite being the

worlds most profitable phonecompany, Apples market sharestill pales in comparison to

Android, which had 58.2 per cent

of sales. Android has longbeen the most-sold operatingsystem, due to the largenumber of handsets at manydifferent price points thatrun it.

The figures also illustratedthe decline of Research inMotions BlackBerry. Sales ofthe ailing platform were just8.8 per cent of the market.

A year ago they were 20.8per cent.

BANKS have only themselves toblame for the f lood of spuriousclaims around paymentprotection insurance (PPI)misselling, the financialombudsman said yesterday.

Banks have argued claimsmanagement companies (CMCs)have launched a deluge of

baseless claims on behalf ofcustomers who have never even

been sold PPI.But ombudsman chief

executive Natalie Ceeney toldMPs that this is the banks ownfault for spending so long

pretending there was no PPIproblem, then mishandling many

Ombudsman says blame forPPI lies squarely with banks

BY CITY A.M. REPORTER of the claims that weresubmitted.

CMCs thrive because theproblem built over many years

when banks said there was notan issue, she told the TreasurySelect Committee. And in aquarter of cases [which banksrejected claiming consumers hadnever bought PPI] we see bankshave just not done a proper jobchecking.

But she also turned her fire onthe CMCs for falsely tellingconsumers they need helpclaiming.

They get a quarter of thecompensation just for putting a

stamp on an envelope, Ceeneysaid.

Telefonica Deutschland Holding AG

10:00 12:00 14:00 16:00

5.78

5.74

5.76

5.72

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5.82

5.84 5.8030 Oct

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EMPLOYMENT continued to increasein Germany during September,figures out yesterday showed, butthe federal statistics office Destatiswarned that momentum wasslipping out of labour marketimprovements.

Employment climbed 324,000 inthe year to last month, hitting41.8m, Destatis said, whileunemployment fell 48,000 to 2.2m.

However the statistics office saidthat yearly employment growth hadslowed down from 1.4 per cent inJanuary to just 0.6 per cent lastmonth, calling the drop a loss ofmomentum.

The seasonally adjusted figures which showed a completely flatpicture backed up this lessoptimistic approach to the stats.

And credit constraints data fromthink tank Ifo also suggestedGermany resilience to the Eurozonedebt crisis was ebbing away. Theproportion of German firms callingcredit conditions restrictiveincreased 0.9 percentage points tohit 23.1 per cent, Ifo data showed.

But this slight increase stillsuggested conditions were mucheasier than during much ofaftermath of the financial crisis,when the proportion stayed abovehalf for nearly a year.

German labourmarket rising

but pace slowsBY BEN SOUTHWOOD

UK RETAILERS reported a rapidlyimproving sales climate in October,according to data out yesterday, driv-ing hopes for continued expansion.Thirty percentage points more

retailers saw improving than worsen-ing sales in October, according to theConfederation of British Industry(CBI), up from a net balance of six percent in September and well abovefirm expectations which summed to15 per cent. A net balance of 27 percent of firms expect increasing salesvolumes in November.

It is great news that last monthssales growth has continued intoOctober, said Anna Leach at the CBI.

But other data in the release sug-gested this rise might be mainly downto seasonal movements. Seven per-centage points more respondentfirms said sales volumes were downfor the time of year, than said theywere up. Still, these sales were muchbetter even seasonally thanOctober, when the net balance was

CBI says retail

sales bouncedback in October

BY BEN SOUTHWOODminus 22 per cent.

Consumer confidence data from Gfksupported the more pessimisticapproach to the data. Gfks index slidtwo points to hit minus 30 in October,putting the index only just above theplace it was in October last year.Trend data from Conlumino, also

out yesterday, highlighted the damagethe recession did to the retail market.The total UK home retail marketslumped by 9bn between 2008 and2011, Conlumino said, blaming doublefigure declines in furniture and elec-tricals on a stagnant home market.

Bank of Japan fights deflationbattle with novel easing policyTHE BANK of Japan yesterday hitmarkets with another bout ofquantitative easing (QE), easingpolicy for two consecutive monthsfor the first time in eight years.

The Bank added 11 trillion yen(86bn) to its main asset purchaseprogramme, which also includeslending provisions, but they didnot stop at traditional QE, andalso announced new andunprecedented deflation-bustingschemes.

Bank bosses, including

governor Masaaki Shirakawa,released a joint statement with

BY BEN SOUTHWOOD the government, promising toreverse price declines and bringinflation up to the one per centtarget, potentially firming upmarkets confidence thatpolicymakers will to do what isnecessary.

And the Bank, followingsimilar plans worldwide,launched a schemeoffering banks 15 trillionyen of cheap, long-termcredit, as it tries to fendoff world economicpressures and put theJapanese economy back on

the path to growth.But analysts said that lending

demand would be constrictedby deflation growingpurchasing power regardlessof funds made available to thebanking sector.

The problem is notbanks ability to lend,

said MasayukiKichikawa, topeconomist at Bank ofAmerica Merrill Lynchin Tokyo. The

problem is lack ofdemand for loans due to

deflation and a highexchange rate.Masaaki Shirakawa boosted QE


Debt-ravaged Eurozone sufferspoor month on the high streetRETAILING in the Eurozonessecond and third biggest economies

slipped to even sharper decline inOctober, business survey datashowed yesterday, though resilientGermany dragged the bloc's averageup significantly.

The retail purchasing managers'index (PMI) for the Eurozone as awhole collapsed from 47.1 inSeptember to 45.3 this month,Markit said yesterday, where valuesbelow 50 indicate decline in thesector. This overall fall was driven byplummeting figures for France andItaly, the two biggest economies in

BY BEN SOUTHWOOD the Eurozone after Germany.Frances retail PMI fell from 47.9 to46, the data revealed, while Italysplummeted from 42.9 to 37.3.

The Eurozone retail sectorentered the fourth quarter in adeepening slump, said TrevorBalchin at Markit. Sales have nowfallen for 12 consecutive months,and there is little sign of animminent return to growth.

This came as Eurostat datarevealed the Eurozone savings ratefell in the second quarter, hitting12.9 per cent from 13.1 per cent inthe first three months of the year.

Business investment data fromthe same period, also from Eurostat,

gave a less gloomy impression, as itincreased from 20.2 per cent to hit20.3 per cent. However, this was stillbelow the level seen throughout

2011.

SPAIN slipped yet deeper intodepression, data revealed

yesterday, while inf lation pickedup, raising the spectre of so-called stagflation.

Spanish GDP shrunk 0.3 percent in the third quarter,according to data from officialstatistics office Ine, the fifthsuccessive quarter withoutexpansion, adding to pressure onPrime Minister Mariano Rajoy torequest a full bailout packagefrom Brussels.

This latest fall meant theeconomy was some 1.6 per centsmaller than a year ago andaround five per cent smallerthan the pre-recession peak in

Spain squeezed by deepeningrecession and surging inflation

BY BEN SOUTHWOOD the third quarter of 2008.Jennifer McKeown at Capital

Economics said this new lowmight not be the worst of Spainsdeep recession.

The third quarter's GDPfigures were probably flattered

by consumers bringing for wardspending ahead of September'sVAT hike and we still think thatrenewed falls in sentiment and adeeper economic downturn areto come, McKeown said.

The economic contractioncame in tandem with an uptickin inflation, which saw yearly

growth in the consumer priceindex hit 3.5 per cent in October,up from 3.4 per cent inSeptember and 1.9 per cent asrecently as June.

US HOME prices continued torebound in August, datasuggested yesterday, adding tothe zig-zag recovery from thedepths of the credit crunch.

Average prices edged up 0.9per cent in the month, accordingto both the 10- and 20-citycomposite Case-Shiller homeprice indices. This monthlyincrease capped off a 1.3 percent rise across the year for the10 biggest cities, and a two percent climb for all 20 cities.

Seventeen of the 20 cities inthe wider index saw prices upcompared to a year earlier, led

by Phoenix, where homes were18.8 per cent more expensive

Case-Shiller index says house

prices growing across the USBY BEN SOUTHWOOD prices only fell in Atlanta,

Chicago and New York.Home prices continued

climbing across the country inAugust, said David Blitzer,chairman of the indexcommittee overseeing the data.Nineteen of the 20 cities and

both composites showedmonthly gains in August.

The sustained good news inhome prices over the past fivemonths makes us optimistic forcontinued recovery in thehousing market, Blitzer added.

The Conference Board hadbeen scheduled to releaseconsumer confidence data

yesterday, but delayed the

release until tomorrow due toHurricane Sandy.

TAXPAYERS are forking out tosubsidise trade unions as the statepays public sector workers toperform union duties, a think-tankclaimed this morning.

The total hours public employeesspent on union duties amounted tothe equivalent of 3,041 full time

workers two and a half timesmore workers than HM Treasury the Taxpayers Alliance (TPA) said,costing taxpayers some 92m in the2011-12 financial year. Combined

with some 21m in directpayments, taxpayers are showering

Think-tank says taxpayers arehanding over 113m to unions

BY BEN SOUTHWOOD public sector unions with at least113m, the think-tank showed.

The group says its figures arealmost certainly underestimates,as 480 of the 1,296 public bodies itsurveyed did not even recordfacility time when employeesperform union duties in paid time.This judgement chimes with the

government's estimate in July thatfacility time cost 240m or 0.14per cent of the public sector pay

bill. The TPA claims public bodieshand out facility time too liberally,compared with the private sector,

where just 0.04 per cent of the paybill is taken up by facility time.

Public sector employees are spending millions of paid hours tending to union duties

Eurozone retail dives further into decline

2008 2009 2010 2011 2012

56

54

52

50

48

46

44

42

40

Eurozone Retail PMI, 50 = no change

Yet consumer confidence stays down in the dumps

Oct 12Oct 11Oct 10Oct 09Oct 08Oct 07

0

-45-40-35-30-25-20-15-10-5

Consumer confidence index, 0 is neutral

Monthly Value

Annual movingaverage

SOURCE:GFK

7/31/2019 Cityam 2012-10-31

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SPREAD betting firm City Index hasengaged the services of former foot-ballers Bob Wilson and GarethSouthgate this month.

Messrs Wilson and Southgate arebattling it out to win the firmsCelebrity Trader Challenge, a newmonthly initiative toraise money for char-ity.

Each month CityIndex will be givinga celeb trader2,500 in aspread bet-tingaccount totrade themarketswith.

Whateverthey makeplus their

Spread betters

host celebritycharity traders

starting cash then goes to a charity oftheir choice, which this month is theWillow Foundation.

Previously the firm has hostedCaprice, Adam Boulton and HestonBlumenthal as guest traders.Although the superstar so far has

been actor Warwick Davis, whoturned his starting balancefrom 2,500 into 2,991. With

only a day to go before theirtrading balances are revealed,

the pair have both tentativelyshared their thoughts on

their progress onTwitter. Dont countyour chickens boys.

Football playersand celebritytraders: Bob Wilson(left) and GarethSouthgate (right)

THE Capitalist, and presumably mostof London, simply cannot escapeMayor Boris Johnson these days.

Fresh from his appearance at theNFL game at Wembley Stadium onSunday evening, Boris was cruisingdown the River Thames on a RoyalNavy RIB yesterday morning.

Pointing his trigger finger atonlookers, Bozza arrived at CanaryWharf in timely 007 style to launchthe London Poppy Day Appeal.

Boris goes Bond for Poppy Dayas he speeds down The Thames

For the first time ever, the PoppyAppeal has gone electronic thisyear. Barclaycard has donated 400mobile card payment terminals sothat Londoners with empty pocketscan donate using their debit cards.After his boat was winched aboard

HMS Severn, the Mayor swiped hiscard and bought the first poppyusing the contactless payment sys-tem. Money raised from the appealsupports The Royal British Legion.

Left to right: Able seaman Carl Butterworth, Mayor Boris Johnson and Charles Byrne

22 cityam.com

cityam.com/the-capitalistTHECAPITALISTOne of The Capitalistsfavouriteproviders of amusing surveys,

Travelodge, released a scary snoozestudy yesterday of bedtime Bogeymenwho are causing us to lose out on beautysleep. In the poll, George Osborne,

Gordon Brown and Ed Balls make the listof culprits rudely making unwantedappearances in the nightmares of Britishadults. All very plausible entries withthe exception of number seven, popsinger Justin Bieber, who is surely a lessterrifying dream catcher than theshadow chancellor? Perhaps the Lodgeshould have surveyed a few more ofBalls neighbours. Having recentlyadmitted to taking up the piano, that isone poll where the politician isguaranteed to count on winning votes.

WEDNESDAY 31 OCTOBER 2012

EDITED BY CALLY SQUIRES

Got A Story? [email protected]

As Goldman Sachs wassandbagging down the hatches of

its West Street building on Monday,most New York City workers wereopting to weather out theFrankenstorm with books andcandlelight after the power went down.

However gym chain Equinox, which has25 clubs in the New York region, tookan optimistic approach to the storm,informing members by email that:Last August, Hurricane Irene didn'tstop us from delivering an unparalleledexperience; Hurricane Sandy won

cityam 2012-10-31

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