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THE US Federal Reserve sailed furtherinto uncharted waters last night,announcing an extra $45bn (27.9bn) amonth of monetary stimulus and anunprecedented plan to keep its ultra-loose policies running until it hits anew employment target.

Chairman Ben Bernanke has driventhe Fed through an exceptional peri-od of cash creation and quantitativeeasing (QE), regularly speaking of thedangers to American society fromstubbornly high joblessness.And with President Barack Obama

a supporter of Bernanke back in theWhite House for a second term, theFed chief is continuing to steer thecentral bank in a dovish direction.

Historically low interest rates ofbetween zero and 0.25 per cent willbe anchored down at least as long asthe unemployment rate remainsabove 6.5 per cent, the Feds OpenMarket Committee (FOMC) said.

Unemployment in the US currentlystands at 7.7 per cent.The holding down of interest rates is

also conditional on the Fed expect-ing inflation to be no higherthan 2.5 per cent, one to twoyears into the future.

Only one of the dozen voters onthe FOMC Jeffrey Lacker dis-sented against theaction. Lacker was

also alone in oppos-

ing the Feds bolstered assetpurchasing programme. Inrecent months the Fed has been

purchasing $45bn in long-term Treasury securities,

funded by selling short-er-term securities aprogramme dubbedOperation Twist.

And yesterday it announced that itwill continue with these purchases,despite running out of short-termpaper to sell. The purchases willtherefore see the Fed significantly

expand its balance sheet.The move will effectively double thepace of QE, as the $45bn will come ontop of the $40bn in mortgage backed

securities the Fed is already buyingeach month.

This is a very aggressive approachand helps to explain why very long-term Treasury yields and the dollar

immediately declined on the news,said Paul Ashworth of CapitalEconomics.Ben Bernanke wants

unemployment down

BUSINESS WITH PERSONALITY

JPs Dimon:Dont dictateour salaries

CAPPING bank bonuses is thewrong way to promote equality, JPMorgan chief Jamie Dimon saidyesterday, arguing politiciansshould put more effort intohelping the most deprived if theywant to make a positive difference.

I dont like the fact that we haveincreased inequality in the US. Butyoud better be careful if you say weare having that because I pay [anemployee] properly, he told theDealbook conference, citing poorinner city education as the biggestfactor behind inequality.

We all want an equitablesociety. You can do it the way Cubatried ok, it will be equitable, buteveryone wont have much.

We want to lift society up soeveryone is better off. That does notmean people dont have to paypeople what they are competitivelyworth. If you dont want a freesociety then start dictating whatcompensation can be, said Dimon,who earned $23m (14.2m) in 2011.

His view on pay stands in starkcontrast to the approach frommany British bankers. For exampleRBS boss Stephen Hester gave uphis bonus last year in the face ofpublic pressure. And the Bank of

Englands Bob Jenkinsyesterday called forbankers to give upmore pay to winfavour with investors.

Meanwhile MEPsmay cap bonuses at the

same level as bankersbasic salaries.

www.cityam.com FREE

BY TIM WALLACE

FTSE 100 5,945.85 +20.88 DOW 13,245.45 -2.99 NASDAQ3,013.81 -8.49 /$ 1.61 unc / 1.24 unc /$ 1.30 unc

BY JULIAN HARRIS

FED TARGETS JOBS

AS IT DOUBLES QE

MARK KLEINMAN OUR LUXURYGIFT GUIDESee Pages 20-23

MORE ECONOMICS:Page 16

Certified Distribution

29/10/12 till 25/11/12 is 129,356

ICONIC carmaker Porsche has already broken its previousrecord for annual sales, selling over 10,000 cars more thanthe whole of last year. A total of 128, 978 vehicles were soldin the 11 months to November, beating the 118, 868 sold in

2011. November sales alone were up 39 per cent on 2011

sales. Demand in China and the US has increasedby 70 per cent since last year, helping to make up for fallingcar sales across Europe. The third-generation Boxster,released at the beginning of this year, has been the mostpopular international model.

PORSCHE RACES AHEAD WITH RECORD SALES

ISSUE 1,781 THURSDAY 13 DECEMBER 2012

OUR COLUMNIST HAS THE INSIDE TRACK ON THE CITYSee

Page 10

Dimon backshigh pay forlong termsuccess

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Allister Heath is away

[email protected]

EUROPEAN leaders were last nightclose to a deal to give the EuropeanCentral Bank the right to supervisebanks across the bloc after Britainsecured a crucial agreement whichwould limit the new bodys powers.

Germany, the Netherlands andAustria all agreed to back Britainsdemands for double majorityvoting, which means any decisionsby the European Banking Authority(EBA) would also need to beapproved by EU countries outsidethe union.

This agreement means the EBAcould not automatically force newrules on all 27 EU countries withoutthem being put to the wider vote.

The compromise came ahead oftodays meeting of financeministers in Brussels aimed atsecuring a deal on the make-up ofthe banking union.

Agreement on a common banksupervisor is a crucial first steptowards a broader banking union,or common Eurozone approach todealing with failing banks that inrecent years have dragged downcountries like Ireland and Spain.

German finance ministerWolfgang Schaeuble said last nightthat there was a good chance toreach a deal today. My intention isthat we find a solution to thebanking union on time beforeChristmas, he added.

Britain secures

compromise onEU bank bodyBY KATIE HOPE

Former regulator Santstakes up job at BarclaysFORMER financial watchdog HectorSants is joining Barclays as its headof compliance.

Sants, who left the FinancialServices Authority in June, hadbeen scoping out new roles at bothBarclays and Deloitte.

He will take up his new positionon 21 January, having alreadysecured FSA approval for hisappointment.The 56-year-old will also be respon-

sible for the banks relationshipswith governments and regulators,reporting directly to chief executiveAntony Jenkins. His newly-createdrole does not come with a seat onthe board, though Sants will jointhe executive committee.

Sants joins Barclays as the banktries to rebuild its reputation fol-lowing the Libor-rigging scandal,which led to the resignation of chiefexecutive Bob Diamond and chair-man Marcus Agius over the sum-mer.

One of his first tasks will be tohelp steer the firm through anongoing Serious Fraud Office probeinto Barclays payments to QatarHoldings in 2008.

He is also likely to be involved indealing with the continued reputa-tional fallout from the Libor-fixinginvestigation, which saw Barclays

Steel chief Mittal upbeat on US growthUS manufacturing is poised to reap thebenefits of cheaper energy, propelling theworlds largest economy into a newgrowth phase, says Lakshmi Mittal,chairman and chief executive ofArcelorMittal.

Brussels backs Hutchison Orange dealEuropes top competition authorityapproved the acquisition of FranceTelecoms Orange Austria operation byHong Kongs Hutchison, but set a series of

tough conditions that could still derail thedeal. The decision by Brussels togreenlight the 1.3bn deal which wasseen by the telecom industry as a testcase for whether consolidation would beallowed within national telecoms markets will be welcomed by mobile operators.

Lone Star in German property dealThe German government has completedits largest privatisation since the start ofthe financial crisis, selling a 1.1bn(890m) portfolio of offices, shops andwarehouses to Lone Star, the US privateequity fund.

Shale gas cloud hangs over SussexThe shale gas driller that triggered twomini-earthquakes near Blackpool lastyear is ready to start fracking near thevillage in 2014. Cuadrilla Resourcespresence is expected to bring protestsfrom residents.

Berlin warns UK is wrong about EUBritain is leaving itself with no voice inEurope by drifting to the margins of theEU, according Wolfgang Schuble, theGerman Finance Minister.

BHP Billiton sells stake in LNG projectChina continues its grab for global energyassets, as it agrees to buy a stake in anproposed Australian gas project from BHPBilliton, the worlds biggest miningcompany, for $1.63bn (1bn).

Unilever boss warns of Europe slumpEurope faces a decade-long slump unlessFrance and Germany resolve theirdifferences and leaders stop "wateringdown" decisions over the future of theeurozone, Paul Polman, the chief

Facebook simplifies privacy settings

Facebook took steps yesterday to simplifyits privacy settings, in its latest bid to giveconsumers more control and clarity overwhat personal information is shared.

Puma chief executive to leavePuma said yesterday its chief executiveFranz Koch will step down next spring,part of a broad management overhaul bythe German sportswear brand's ownerPPR aimed at improving the fortunes ofthe struggling label.

GOVERNMENT aides were yesterdayaccused of warning journalists notto publish a critical story aboutMaria Miller, the culture secretary,

because of her position in talksregarding regulation of the press.

Downing Street spokesman CraigOliver and Millers adviser JoannaHindley were accused by the DailyTelegraph of warning it aboutpublishing allegations it made aboutMillers expenses. The paper accusedthe aides of using Millersinvolvement in talks about pressregulation, stemming from theLeveson inquiry, to warn journalistsabout publishing the information.

Downing Street yesterday deniedany improper conduct. We dontaccept threats have been made, a

spokesperson said.In todays

Telegraph, bothHacked Off, thecampaign backing

state regulation ofthe press, andRoy Greensladecall for Miller to

step awayfromimplementing

the Levensonreport.

Miller and PM

aides accusedof press threats

Hector Sants visited the Occupy protesters last year

2 NEWS

BY JAMES TITCOMB

BY MARION DAKERS

To contact the newsdesk email [email protected]

WEATHER permitting, Veysel

Aral and his team will be atthe offices of the LondonStock Exchange on Monday

morning to celebrate a coup.For Aral has become the latest of an

elite batch of chief executives whohave managed to float their compa-

nies on the London Exchanges mainmarket this yearAral runs Kcell, a Kazakh mobile

telecoms group that announced yes-terday it was going ahead with an ini-tial public offering (IPO) of shares thatwill see its Swedish strategic investorTeliaSonera selling $525m of stock inthe group.The IPO comes at the end of a dismal

year in which volumes of flotationsin Europe, the Middle East and Africa(EMEA) fell to a third of what theywere in 2011, according to data com-piled by Bloomberg.

EDITORSLETTER

DAVID HELLIER

London finishes the year with a last minute flotation flurry

THURSDAY 13 DECEMBER 2012

Companies in the EMEA regionraised $12.4bn in IPOs in 2012, com-pared with $37.3bn in the previousyear as investors naturally fretted overthe uncertainties of the regionsfinancial markets.The uncertainties and disagree-

ments over price have caused a num-ber of IPOs during the year to bepulled, including two Russian ones,Promsvyazbank and QI Properties, aswell as a couple of potential bumperissues such as Graff Diamonds in

Hong Kong and Evonik in Germany.London has been smarting badly,

hosting only one domestic flotationof any size, and that a forced sale of astake in Direct Line insurance by RBSbank.

Altogether 2013 has spawned justfive main market floats of trading

groups in London, with four of themcoming from eastern Europe orRussia.

Indeed, until Direct Line successful-ly floated in October this year, theLondon market was effectively closedfor business, with UK fund managerslargely on strike as far as new issueswere concerned.

So it is encouraging that sinceDirect Line there have been two tele-coms flotations in London - the firstbeing Alisher Usmanovs Megafon -and also yesterday saw the flotationof a property-based investment group,

getting to grips with the culture.The hire probably would not have

appealed to the banks former chiefexecutive Bob Diamond who, accord-ing to letters disclosed during theTreasury Select Committee hearingsover the Libor affair, didnt enjoy thebest of relationships with those at the

top of the FSA. But then that too mustbe one of the attractions.

NEW BROOM AT BUMINick von Schirnding, who took overas CEO at troubled Bumi yesterday,needs nerves of steel as he tries to nav-igate his way between Nat Rothschildand the Bakrie family. I want to putan end to all the in-fighting, he toldme yesterday. Famous last words or aman on a mission? Good luck Nick.

Starwood European Trust. Those whothink the UK is being too lenient interms of its admission rules forRussian or eastern European compa-nies might care to look at the statis-tics excluding our eastern Europeanfriends.

SANTS MAKES SENSE FOR BARCLAYSSo what is the appeal of Hector Sants,the former chief executive of theFinancial Services Authority, who isjoining Barclays Bank as its compli-ance officer in January?After paying out a fine of 290m for

its involvement in the Libor interestrate manipulation scandal, Barclays ishiring the man who was the topindustry regulator for its battered sec-tor.As far as new chief executive

Anthony Jenkins is concerned, theappointment makes clear that he is

fined 290m in July.Relationships with our regulators

and governments around the worldare obviously also of critical impor-tance to us, said Jenkins yesterday.We must apply a renewed leadershipfocus on these to make them as con-structive and productive as possible.

Sants resigned from the FSA afterfive years in the top job, spurning anew role as head of the new financialwatchdog, the Prudential RegulationAuthority.

He started his career at London-based broker Phillips & Drew, and

headed up divisions at UBS and CreditSuisse First Boston before turning hishand to regulation.

Industry insiders said his bankingpedigree meant a move to Barclayswas a more natural choice than tak-ing a position with Deloitte, thoughtto be his only other firm job offer onthe table.

I left the FSA with the intention offinding a role which would allow meto put into practice the experience Ihave gained in both the public andprivate sector, said Sants in a state-ment.

The new jobs website for London professionalsCITYAMCAREERS.com

WHAT THE OTHER PAPERS SAY THIS MORNING

Maria Miller saw claimsabout her expenses

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NEWS INTERNATIONAL, the Britishnewspaper arm of Rupert MurdochsNews Corporation, swung to an oper-ating loss in its last financial year,after it took a massive writedownfrom closing the News of the World.

Company filings revealed thatNews Internationals former chiefexecutive Rebekah Brooks received a10.9m compensation package whenshe stepped down last year over thephone hacking scandal.This was much higher than the

7m previously estimated. NewsInternational, which publishes theTimes, the Sunday Times and theSun, reported a 153m operating lossin the year to July, compared to a113m profit the year before.Revenues at the group whichincludes book publisherHarperCollins were down 13 percent to 1.2bn.The profits hit was partly due to a

host of charges related to closing theNews of the World in June 2011. Thecompany took 46.6m in one-offcosts over the closure, made up

Phone hacking

rings up 206mbill at Wapping

BY JAMES TITCOMB mainly of legal costs, and wrote down160m from publishing rights.The tabloid newspaper was shut

after a public outcry stemming froma string of allegations made againstNews of the World staff related tophone hacking.

Losses also widened at TimesNewspapers Limited, the subsidiarythat owns the Times and SundayTimes. Turnover fell from 402m to361m and losses more than doubledto 28.7m.The editor of the Times, James

Harding, resigned yesterday after fiveyears in the role. Harding, who wasthe youngest-ever editor of the news-paper, told staff that NewsCorporation had made it clear itwanted him to leave.

It has been made clear to me thatNews Corporation would like toappoint a new editor of the Times. Ihave, therefore, agreed to standdown. I called Rupert [Murdoch] thismorning to offer my resignation andhe accepted it, Harding said.The editor of the Sunday Times,

John Witherow, is strongly tipped totake Hardings role.

Rebekah Brooks received 10.9m in compensation for stepping down over phone hacking

MARKETS and the Treasuryyesterday talked down incomingBank of England governor MarkCarneys suggestion that a central

bank may need to tear up themonetary rulebook to deal with asustained slump.

In a speech in Toronto, Carneysaid that there was a case, in aprolonged slump, forabandoning inflation targets,and moving to a nominal GDP(NGDP) target a policy thatcould lead to much moreaggressive stimulus than the

current approach.Carney stressed he

Markets come out against endto inflation targeting regimeBY BEN SOUTHWOOD was speaking only in a Canadian

context. But a spokesman forGeorge Osborne yesterday said thechancellor was aware of Carneys

views on inflation targeting whenhe was appointed.

However, the Treasury said it hadno plans to ditch the BoEs two percent inflation target.

And Chris Beauchamp at IG toldCity A.M. that the ideas weremore of an evolution than arevolution, as the Bankalready considers output inits policy decisions.

THURSDAY 13 DECEMBER 20123NEWScityam.com

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My Story, My Design

Bumi moves towards Bakriesplit as new CEO appointedLONDON-listed miner Bumi moved

towards a divorce from powerfulIndonesian family the Bakriesyesterday, as the companys boardsaid it was working towards a splitas soon as practical.

Nick Von Schirnding, head ofinvestor relations at Bumi, hasbeen appointed as chief executiveto replace outgoing head NalinRathod.

The Bumi board was yesterdaypresented with findings from the

BY CATHY ADAMS Macfarlanes legalinvestigation,commissioned in

September, intoalleged financialirregularities atIndonesian armBumiResources.

Bumi said ithad nointention ofdisposing ofBerau Coal, inwhich it has an

85 per cent holding.Von Schirnding, whose

appointment and strategy has

already received the backing oftwo leading shareholders, isdescribed as a thoughtful, steady

individual by adviser RupertHume-Kendall, chairman of

global corp andinvestment banking atBank of AmericaMerrill Lynch.

Incoming Bank of Englandgovernor Mark Carney

Von Schirnding: Ready forthe top job at Bumi

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PROSECUTORS yesterday raided

Deutsche Banks Frankfurt headquar-ters as part of an ongoing investiga-tion into possible tax evasion aroundcarbon permits trading.

Co-chief executive Juergen Fitschenand chief finance officer StefanKrause are among 25 individualsinvolved in the investigation.

Seven staff are believed to havebeen suspended last month, thoughother staff are still at the bank andfive were arrested yesterday.The investigation began in Spring

2010 and initially focused aroundseven staff, though it recentlywidened out to 25.

Two of Deutsche Banks manage-ment board members JuergenFitschen and Stefan Krause areinvolved in the investigations as theysigned the value-added tax statementfor 2009, Deutsche Bank said. Wecontinue to cooperate fully with the

authorities in this matter.It is the individuals, rather than the

bank itself, who are being investigat-ed by the authorities.

In a previous case around the car-bon permits trading market six menwere jailed. Deutsche Bank was notprosecuted in that case, but thejudge did warn the bank had createdthe conditions in which evasioncould take place.

Deutsche chiefprobed in taxinvestigation

BY TIM WALLACE

PRIVATE SECTOR employment pro-vided the fuel for the jobs boom tocontinue into the third quarter,data showed yesterday.

Private sector employmentclimbed 65,000 in the third quar-ter, according to data from theOffice for National Statistics, out-weighing the 20,000 fall in overallpublic sector employment.This fall means the private sector

now employs 823,000 more peoplethan a year ago, and 336,000 morethan at its pre-recession peak.The public sector employs

324,000 fewer people than a yearbefore and across all branchesemploys fewer people than at anypoint since the fourth quarter of2000. However, part of this changeis due to a re-classification of196,000 employees of English fur-ther education colleges.This data came in tandem with

statistics showing that the employ-ment boom continued into

Private sectordrives ongoing

jobs recoveryBY BEN SOUTHWOOD October. Total employment was

40,000 higher in the three monthsto October than between May andJuly, hitting another record high, of29.6m. This put employment some499,000 higher than a year before,and up to 71.2 per cent of the popu-lation aged 16 to 64.The cheery picture continued

with unemployment, which slid82,000 in the three month period,to hit 2.5m or 7.8 per cent of theeconomically active population. Butless encouragingly, the big fall inunemployment came largelybecause more people registered aseconomically inactive 60,000

more, bringing the total to 9.1mand 22.6 per cent of the workingage population.

But the claimant count continuedto edge down steadily in November,suggesting that the labour marketrecovery could go on. And onceagain wage growth, at 1.3 per centin the year to October, was belowinflation, meaning employing UKworkers got cheaper in real terms.

Kcell succeeds with London IPOLONDON saw another successfullisting from central Asia asKazakhstan telecoms firm Kcellsinitial public offering (IPO) pricedyesterday.

The deal came in at the bottomend of the price range, with theglobal depository receipts (GDRs) inLondon coming in at $10.50, pricingthe 25 per cent stake in the firm at$525m (324.7m) and the businessas a whole at $2.1bn. The range waspreviously set at $10.50 to $13.00.

But sources close to the dealinsisted demand was high, and theseller, owner TeliaSonera, is happy

BY TIM WALLACEwith the price.

The deal went extremely well, itis an amazing success we haveclose to 200 investors participating,more than two-thirds of them fromoutside Kazakhstan, the source toldCity A.M. There was a temptation toraise the price, but we want toallocate to high quality buyers and toallow for market performance.

That market performance willbegin to be tested today when theshares are traded on the Kazakhmarket, before trading begins inLondon on 17 December. But someconditional trading began yesterday,with shares edging up.

Russian, UK and US investors

made up the largest groups ofinvestors outside Kazakhstan,alongside a small number ofcontinental Europeans.

Hedge funds and others with along only outlook are believed tohave invested, which those close tothe deal see as a vote of confidencein the firm, particularly given suchinvestors usual preference for larger,more liquid IPOs.

The listing follows London IPOsfrom Russian Sberbank and telecomsfirm MegaFon. The flood of IPOsfrom the region has come as sellersseek bigger markets, as well as thereassurance investors want fromtough governance rules in the UK.


PRIVATE SECTOR MAKES UP FOR FALLING PUBLIC EMPLOYMENT

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1

6000

5800

5600

5400

5200

5000

4600

4800

24000

23500

23000

22500

22000

21500

Public Sector (thousands) Private Sector (thousands)

EMPLOYMENTPUBLIC SECTOR

TOTAL EMPLOYMENT ROSE 40,000

FELL TO 5.745mIN THE THIRD

TO HIT A NEW RECORD OF

IN THE THREE MONTHS TOOCTOBER 201229.6m

QUARTER OF 2012

EMPLOYMENTPRIVATE SECTOR

ROSE TO 23.856mIN THE THIRDQUARTER OF 2012

Private sector enjoys bafing post-crisis boom

*Allcomparedtothepreviousquarter

Swiss banks UBS and Credit Suisse lead theinternational drive on Kcells initial publicoffering (IPO), which includes roadshows inLondon, Europe and New York. They arebelieved to have held eight or nine meetingsand conference calls on each of those days,gaining the interest of almost 200 investors,leaving the deal firmly oversubscribed.The pair were joined by Kazakhstans VisorCapital, partly because Kcell is a nationalchampion, and partly because the listing is

joint London and Kazakhstan, so Visor ledthe domestic offer.

Those joint global co-ordinators were joinedby Renaissance Capital, which steps in as

joint bookrunner, and Halyk Finance, whichwas a co-manager on the global offer.UBSs technology, media and telecomsteam was involved in the offer, using t heirexperience of the sector rather than ofKazakhstan to sell the stock.Meanwhile Credit Suisse has recent experi-ence with joint London listings from thesame region it was a joint global coordi-nator and joint global bookrunner on theSberbank IPO earlier this Autumn.

UBSGLOBAL COORDINATOR

CREDIT SUISSEGLOBAL COORDINATOR

VISOR CAPITALDOMESTIC BOOKRUNNER

ADVISERS KCELLS INITIAL PUBLIC OFFERING

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SUPERGROUP said the colder weatherhelped to boost sales of its trademarkcoats and hoodies in the run-up toChristmas, despite reporting a nearone-third drop in half-year profit thatsent its shares tumbling yesterday.The Superdry owner posted a pre-tax

profit of 13.9m in the six months to28 October, down 31 per cent on lastyear due to a write-down on itsEuropean business, acquired in 2010.

Excluding the write-down pre-taxprofits rose 13.1 per cent to 14.7m ahead of consensus forecasts onsales up 16.2 per cent to 158.2m.

Chief executive Julian Dunkertonsaid ongoing investment in designand the growing presence of thebrand have helped boost sales bothin the UK and overseas.

Superdry opened 45 stores, franchis-es and concessions in the periodincluding its first store in India, bring-ing its estate to 375.The group is recovering from a

litany of mistakes and IT glitches that

led to three profit warnings last year.This is the fourth hiccup-free state-

BY KASMIRA JEFFORDment in a row from SupergroupPhilip Dorgan, retail analyst aPanmure Gordon said.

The Beast from the East [the colweather front] has been good foSupergroup. December payday gavsales a major boost in common witother retailers.

UK like-for-like sales were up 3.9 pecent, while wholesale sales rose 7.9 pecent on a constant currency basis.The group launched websites i

Canada, Switzerland, Spain and ItalyThe internet now accounts for 10.2 pecent of sales, up from to 8.2 per cent

Supergroups recent management reshuffle is paying-off as trading improves.

SuperGroup PLC

12 Dec6 Dec 7 Dec 10 Dec 11 Dec

580

560

600

620

640 p 557.0012 Dec

6 NEWS cityam.com

INDITEX, the Spanish owner ofclothing store Zara, seems to bedefying the European economicdownturn, yesterday revealing a 27per cent rise in profits since the

beginning of 2012.Net profit in the nine months to

31 October was 1.65 bn (1.34bn),while sales have gone up by 17 percent to 11.4 bn, giving Inditex its

highest quarterly margin in thecompanys history.

BY ALEX WYNICK

Zaras newstores pay off

WALMART, the American retailgiant which owns Asda in the UK, isis understood to be eyeing atakeover bid for Turkishsupermarket group, Migros Ticaret.

The retailer has been in talkswith private equity group BCPartners about acquiring its 80 percent stake in the Turkish chain.

A source close to Walmart told

City A.M. last night it was in talkswith several companies in Turkey.

BY KASMIRA JEFFORD

Walmart eyesTurkish group

Supergroupssales warm upfrom the cold

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CUSTOMERS are increasinglydeserting the high street to dotheir Christmas shopping online,according to two data releases outthis morning.

Last week, retailers saw 1.7 percent fewer customers enteringtheir shops than last year,according to the British RetailConsortium (BRC)-SpringboardFootfall Monitor, out this morning.Shopping centres were hitespecially hard with a 4.9 per centdrop in footfall.

But customers have not lost theirappetite for Christmas spending.Figures from Visa out yesterdayshowed December spending was up2.5 per cent compared to last year

with online sales soaring 4.4 percent. Clothing and shoes are theitems customers increasingly buyonline. Last Monday, dubbed MegaMonday or Cyber Monday, was the

busiest online sales day ever in theUK with 7m transactions.

High street hitas customersshop online

BY JAKOB HOHLMAN

THE NEW York attorney generalhas complained that Stagecoachstourist bus services are anti-com-petitive.Twin America, a joint venture

half-owned by Stagecoach, hasbeen hit with an antitrust lawsuitbrought by attorney generalEric Schneidermanand the USDepartment ofJustice.

The lawsuitalleges thatthe hop-onhop-off bustour company

Stagecoach JVhit by lawsuitover US buses

BY MARION DAKERShas raised prices 10 per cent sincetwo firms were merged into theTwin America company.

Schneiderman said: The iconicdouble-decker Gray Line and CitySights buses are seen all over NewYork City but few people know theyare a monopoly that has led to

higher prices and lessc o m p e t i t i o n .Visitors to New Yorkdeserve better.

Stagecoach said itfundamentally dis-agrees with theallegations.

BOTTOMLINE

MARC SIDWELL

Stagecoach operatesUS bus tours

THURSDAY 13 DECEMBER 2012 7NEWS

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CITYAMCAREERS.com

Watch out for shrinking marginsOPTIMISTIC words fromSuperGroups chief executiveand co-founder JulianDunkerton couldnt stop

yesterdays interim results fromsending the owner of theSuperdry clothing brand down

by almost seven per cent.

The markets reaction mayseem harsh. A profit warningthis April, blamed on badarithmetic, knocked the shareprice down by nearly 40 percent, but shares had been onthe up since the summer, andthere is a sense of the retailerreturning to an even keel, withno great surprises in theheadline numbers yesterday.

Still, there are reasons forconcern. Profit before tax wasdown 31.5 per cent, due to a

writedown on the acquisition ofSuperGroup Europe.

That, at least, is a one-off.More concerning is that retail,

which accounted for 58 per cent

of revenues in the first half of2012, produced a flatunderlying profit of 7.1mdespite 26.4 per cent revenue

growth, bringing a 200 basispoint dilution in the divisionsoperating margin. That waspartly down to the cost ofdiscounting but it was also

because warehousing costsincreased by more than the

growth in sales.SuperGroup is growing

aggressively, opening another 45stores in the first half of the

year and planning to add themajority of its annual target of

70-90,000 square feet of newretail space in the last quarterof the f inancial year. But

boosting sales by building anempire is no help if the costs eatinto your profits and olderstores dont keep growing.Excluding new stores, sales

growth is only 3.9 per cent and that includes web sales.SuperGroups internet sales

really are growing at arespectable clip 24 per cent

year on year. But such sales area long way from being the heartof the business, having only

grown from 8.2 per cent ofgroup revenues in 2011 to 10.2per cent in 2012, on a rolling 12-month basis.

Shareholders dont get muchsay in how SuperGroup is run,

with more than 62 per cent ofshares in directors hands. Aftera failed pay revolt in September,a few are realising that the only

way to vote is with their feet.

7/30/2019 Cityam 2012-12-13

8/27

EUROZONE industrial production

collapsed in October, as the realeconomy tanked across the debt-stricken currency bloc.

Seasonally-adjusted industrialoutput was 1.4 per cent down in justa month, the European statisticsagency Eurostat said, meaning it wasa full 3.6 per cent lower than a yearbefore. Analysts said the data onlyadded to the case that recession inthe euro area would get even deeperin the fourth quarter.

Perhaps the gloomiest element ofthe statistics was the evidence thatEurozone powerhouse Germany wasbeing pulled down with the rest ofthe beleaguered group. Industrialproduction in the blocs biggesteconomy sunk 2.4 per cent in just amonth, the latest fall in a year thathas seen industry produce 3.8 percent less. And Germany was by nomeans one of the worst off Irish

industrial output was down 16.2 percent on the year, Italy saw a 6.2 percent drop, and Portuguese outputslid 3.9 per cent.

This came in tandem with newsthat Germany and France hadslipped into deflation. Germanysconsumer price index edged down0.1 per cent in November, Destatissaid, while official statistical bodyInsee said French consumer pricescrept down 0.2 per cent in the samemonth.

Factory outputplunges acrossthe Eurozone

BY BEN SOUTHWOOD

GOVERNMENT debt across theEuropean Union has bloated to theequivalent of around 21,000(16,972) per person, according tocalculations released this morningby PwC.

Total EU government debt hassmashed past the 10 trillion mark,the big four audit group says, withthe UK still in an unhealthy position.

At a time of slow growth andsteadily ageing populations, this[level of state debt across the EU] is amajor concern, the report warns.

Ranking European countries

with a traffic light system,the UK is given a red lightfor the size of its annualpublic deficit as a percent-age of GDP as well as forthe level of private house-hold debt, also as a percent-age of GDP.

The UK does not havethe worst public debt

EU states debtequals 21,000

for each citizenBY JULIAN HARRIS position but it is particularly exposed

to possible household deleveraging more so than any other EU countrythan Greece according to our analy-sis, PwC said.

Chancellor George Osborne hadplanned to eliminate the annualdeficit by the end of the current par-liament, yet is still piling over 100bneach year onto the national debt,which stand in excess of 1 trillion.

The UK has... a budget deficit thathas fallen since 2010, but still has along way further to go before it reach-es sustainable levels, the report said.And Britains position is vulnerable

given the ongoing debt crisis in the

nearby euro area. The UK may notbe in the Eurozone but it is far fromimmune from its problems giventhat around 40 per cent of UKexports go the Eurozone, eventhough this ratio is in gradual longterm decline.

France also fared poorly inthe analysis, attracting

red lights for the sizeof its governmentdebt, and its highunit labour costs.

Chancellor Osborneis piling on debt

FRENCH carmaker Renaultyesterday said it was selling itsremaining 6.5 per cent stake in

truckmaker Volvo as it seeks tocut debt and boost its financialstability.

The sale of the block of 138.6mSeries A shares is being made viaan accelerated book building,Renault said.

Goldman Sachs is the solebookrunner for the deal.

After this transaction iscompleted, the Renault group willno longer hold any shares in AB

Volvo, Renault said in a statement

Renault sells off its remainingstake in Volvo in 1.2bn deal

BY CITY A.M. REPORTER yesterday.It said it would use the proceeds

from the share placement toreduce debt and invest in France,Russia and China.

The shares are being offered atbetween 91.25 and 93.25 Swedishcrowns, according to a sourcefamiliar with the matter,indicating a transaction value ofup to about $1.94bn (1.2bn).

Renault sold a 14.9 per centstake in Volvo in 2010 for 3bn(2.4bn).

Renault acquired its stake inVolvo as part of the sale of itstruck business to the Swedishcompany in 2001.

THURSDAY 13 DECEMBER 20128 NEWS cityam.com

ADaimlerBrand

Official government fuel consumption in MPG (litres per 100km) for the new M-Class Special Edition: Urban: 34.4 - 38.7 (8.2 - 7.3), Extra Urban: 42.2 - 50.4 (6.7 - 5.6), Combined: 39.2 - 44.8(7.2 - 6.3). CO2 Emissions 194-158 g/km. Model featured is a ML 250 BlueTEC Special Edition at 44,870 on-the-road including optional Intelligent Light System at 1,630.00. (OTR price Inc. VAT, delivery, 12 months Road Fund Licence, number plates, first registration fee and fuel).*Finance offer based on an ML 250 BlueTEC Special Edition on a Mercedes-Benz Agility Agreement, on 10,000 miles per annum. Excess mileage charges may apply. Payable if you exercise the option to purchase the car. Includes optional purchase payment, purchase activation fee and Retailer deposit contribution.

Orders/credit approvals on selected M-Class models between 1 October and 31 December 2012, registered by 31 March 2013. Guarantees and indemnities may be required. Offers cannot be used in conjunction with any other offer. Some combinations of features/options may not be available. Please contact Retailer

for availability. Terms and conditions apply. Credit provided subject to status by Mercedes-Benz Financial Services UK Limited, MK15 8BA. Prices correct at time of going to print 10/12.

Representative Example: ML 250 BlueTEC Special Edition

The new M-Class.Introducing the Special Edition.From just 469* a month, you can enjoy standard features including

19" alloy wheels, Mirror Package, aluminium running boards, chrome

underguards and LED daytime running lights. In the M-Class Special

Edition, you can go anywhere, and go there in style.

Visit mercedes-benz.co.uk/offers

36 Monthly

payments of*

469.00

Customer

deposit

7,374.77

On-the-road

price

43,240.00

Retailer deposit

contribution

1,500.00

Duration of

agreement

36 months

Optional

purchase

payment

20,975.00

Amount of

credit

34,365.23

Total amount

payable

47,008.77

Acceptance

fee

180.00

Purchase

activation fee

95.00

Fixed

interest rate

4.16%

Representative

APR

4.6%

Renault chief executive Carlos Ghosn is aiming to boost the firms financial stability

7/30/2019 Cityam 2012-12-13

9/27

BUS passengers will from todaybe able to use contactless debitor credit cards to pay for

journeys, as Transport forLondon begins its long-awaitedrollout of the new paymentmethod.

Anyone with a contactless Visa,American Express or MasterCardshould be able to tap the yellowOyster pay point on the capitals8,500 buses, without having toregister with TfL.

Users will be charged the samefare as an Oyster Card holder,meaning a single bus fare would

cost 1.35 rather than 2.30 for aticket bought with cash.

London busesgo contactless

BY MARION DAKERS

THE RISE of cheap smartphones inemerging economies has led to a leapin royalty payments to chip designerImagination Technologies.The company, which is locked in a

bidding war to acquire US-based chipdesigner MIPS, has seen a 66 per centyear-on-year rise in royalty revenuesin the last six months, it said yester-day. This was down to a 90 per centincrease in the sales of chips that useImaginations technology, such asthose in Apples iPhone.

However, shares in the company fellslightly, as analysts f lagged a drop inaverage royalty rates. Rising sales of

cheap smartphones in China andother emerging economies meansImagination is licensing more chipsusing cheaper technology.The companys losses in its Pure dig-

Lower royaltyrates chip away

at ImaginationBY JAMES TITCOMB ital radio division also widened in thesix months to the end of October.

Imagination reported a 27 per centincrease in group revenues to 71.4m,although profits were flat at 10.5m.

Chief executive Hossein Yassaie wasunfazed by the average royaltydecline. [All parts of the chip busi-ness] are all growing together so thetransition is not an issue, he said.

Chief executive Hossein Yassaie shrugged off the fall in average royalty rates

Imagination Technologies Group PLC


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We are initially encouraged by today, with a very strong royalty unitperformance. However, we calculate a 15 per cent decline in average rates whichsuggests full year royalty revenue unlikely to move up materially. Hold.

ANALYST VIEWS

HOW HAS IMAGINATIONSINVESTMENT CASECHANGED AFTER TODAY?Interviews by James Titcomb

JAMES GOODMAN INVESTEC

The investment and losses at Pure are likely to drive downgrades toearnings estimates. However on balance the investment case is more centredaround the longer term earnings opportunity from demand. Buy.

NICK JAMES NUMIS SECURITIES

Royalty rates should hold up for the second half of the year and chipshipments are expected to reach 500m by the end of the year. These are all posi-tive signs, and we continue to like the long-term prospects. Buy.

PIA TAPLEY N+1 SINGER

Thats capitalism, says Googlechair Schmidt in tax responseGOOGLES chairman EricSchmidt has defended hiscompany against criticism of itstax affairs, saying: Its calledcapitalism.

I am very proud of thestructure we have set up. Wepay lots of taxes; we pay themin the legally prescribed ways,he told Bloomberg.

Google has been chastised byMPs for funneling $9.8bn (6bn)of revenue into a Bermudacompany, allegedly saving $2bnin taxes last year. Although thecompany makes more than 10per cent of its sales in the UK, itpaid just 6m in corporationtax last year.

The government has probedthe Silicon Valley firm,alongside Starbucks and

BY ALEX WYNICK Amazon, over the issue.Starbucks has offered to pay20m a year over the next two

years, but Schmidts commentssuggest a similar move fromGoogle is unlikely.

Vince Cable, the businesssecretary, responded tothe former chiefexecutive yesterday.

It may well be[capitalism] but itscertainly not the job of

government toaccommodateit. On behalf oftaxpayers wehave got tochange thesituation,Cable said ata pressconferencefor the

Association of British Insurers.Schmidt also compared the

popularity of Googles Androidsmartphone software toMicrosofts dominance ofcomputer software in the 1990s.

This is a huge platformchange; this is of the scale of 20years ago Microsoft versusApple, he said. Werewinning that war pretty clearlynow. Android accounted for

72 per cent of worldwidesmartphone sales in the third

quarter, against Apples14 per cent, according toresearch firm Gartner.Over 1.3m Androiddevices are nowactivated every day.

Shazam hires lastminute.comfounder amid float rumours

MOBILE music-recognitionservice Shazam has hired thefounder of the travel websitelastminute.com, in a move thatcould pave the way for an initialpublic offering.

Brent Hoberman, who hasjoined Shazam as anindependent board member,started lastminute.com in 1998,together with Martha Lane Fox,who is now the governmentsdigital champion.

Hoberman helped take thecompany public in March 2000,at the height of the dotcom

boom, and left it in 2006, the

year after it was acquired.Shazam, a smartphone app

that recognises songs, has madea big push into TV, allowingusers to access additionalcontent while watching shows.The technology makes money byselling the songs it recognises,but also sees an opportunity inTV, offering supplementarycontent to adverts. Hobermanhas been hired to speed up themonetisation strategy.

David Jones, Shazams vicepresident for marketing, toldCity A.M. that a flotation is anoption thats absolutely on thetable but that there are no

plans at the moment.

BY JAMES TITCOMB

Schmidt said he is proudof Googles tax affairs

FTSES QUARTERLY RESHUFFLECOMPANY MOVE NEW INDEX

Tui Travel FTSE 100

Pennon FTSE 250

Enterprise Inns FTSE 250

Direct Line FTSE 250Ruspetro Small-cap

Talvivaara Small-cap

Shanks Small-cap

TUI TRAVEL has rejoined theFTSE 100 stock index after morethan a year as a mid-cap firm,

while newly-floated Direct Lineclinched a FTSE 250 ranking.

FTSE Group said in its quarterlyreshuffle that water companyPennon, which has lost around 15per cent of its market value in theperiod, will be demoted to theFTSE 250 when the new rankingstake effect on 24 December.

At the bottom end of thecorporate league table, Ruspetro,Talvivaara and Shanks Group haveall sunk below the marketcapitalisation required to remainin the FTSE 250 and will berelegated to the small-caps.

Tui Travel joinsthe blue-chips

BY MARION DAKERS

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BRITAIN has become a nation ofonline shoppers and internet televi-sion addicts, dedicating more timeand money to those activities thanany other nation.

Research released today fromOfcom, the communications regula-tor, will reveal that UK citizensspend more than 1,000 a yearonline hundreds more than othercountries and that a greater pro-portion of us use online TV servicessuch as the BBCs iPlayer, than thosein other nations.The research also shows that, on

average, Brits are amongst the keen-est adopters of technology such asbig-screen high-definition TVs,smartphones, and social network-ing such as Facebook.The research demonstrates the

rapid shifts in how people are con-suming content. One in four Britsuse online TV including film

UK leads globalinternet TV use

BY JAMES TITCOMB streaming services such as Netflix every week, while one in six owns aninternet-connected smart TV andfour in ten own a set-top box forrecording video.

Brits are also particularly enthusi-astic users of smartphones andtablets 16 per cent of web trafficcomes via the devices. The averagesmartphone user in the UK also usesmore mobile data per month thanin other countries, despite the roll-out of high-speed 4G mobile internetservices lagging behind the likes ofthe US and France.James Thickett, Ofcoms director of

research, put the UKs appetite forTV catchup services down to theearly launch of technology such asiPlayer, as well as improved broad-band coverage.

However, he did add that Britain islagging behind others in the rolloutof internet protocol television, inwhich channels are beamed into aTV via an internet connection.


THE UK IS THE WORLDS MOST-CONNECTED COUNTRY

OWN ASMARTPHONE

44%

58%

50%

45%

30%

WATCH TVONLINE

17%

23%

9%

13%

3%

ANNUAL ONLINE SPENDING(PER HEAD)

DAILY TV VIEWING(PER HEAD)

4 hrs 53 min

4 hrs 2 min

3 hrs 45 min

3 hrs 47 min AVG MONTHLY COST OF FAMILYTV/INTERNET/PHONE PACKAGE

314

146 262

178

620

1,083 377

N/A

N/A

497

527

JAPAN

GERMANY

FRANCE

UK

USA

SOURCE: OFCOM

Mark Kleinman is the City editor of SkyNews. Twitter: @MarkKleinmanSky

SUPERMARKET own-label ranges,package holidays and ... Citylobbying groups? Punters desirefor value-for-money appears to be

stretching further than ever in gloomyeconomic times.Thats the conundrum confronting

my fellowCity A.M. columnist AnthonyBrowne, recently installed as chief

executive of the British BankersAssociation (BBA).Relinquishing its role in supervising

the Libor-setting process will cost theorganisation millions of pounds, gnaw-ing deeply into its revenue base andleaving it with a stark choice: to hikefees for members or risk denuding theBBA of the services they demand.

Browne has plumped for the formeroption. I understand that the BBA hasasked its biggest members, the leading

INSIDETRACK

MARK KLEINMAN

British Bankers Association mulls merger in hunt for cash

high street banks, to stump up asmuch as 25 per cent more for theirmembership, according to peopleclose to the talks.

For some banks, that might mean anadditional bill of 1.5m-a-year.

So determined was Browne to avoidthe issue dominating last weeks BBAboard meeting that he held bilateraltalks with major lenders before it tookplace. That didnt prevent his proposalearning a frosty reception.

The quid pro quo for agreeing to theplea for more cash was that the BBAshould examine a merger with anoth-er trade body, such as the Council ofMortgage Lenders. That work is nowunderway, according to BBA execu-tives.Amid a protracted run of conduct-

related fines which have left their rep-

utation in ruins, Britains banks need arobust and respected trade associationmore than ever.The odds on it continuing to exist in

its current form have, however, sud-denly lengthened.

PRUS BOARDROOM VACANCYIf Tidjane Thiam had sold an insur-ance policy for every time his abortedbid for the Asian insurer AIA had beenmentioned, Prudential would have

warily viewed.That, though, overlooks the quality

of the job that Thiam has done sincethe AIA bid collapsed. Expect the Prusboardroom vacancy to be filled beforelong.

PERMIRA THIN END OF THE WEDGEWhats going on at Permira? The titan

of European private equity and ownerof companies such as Birds Eye Iglo ismaking stuttering progress towards a2bn target for the first closing of itslatest fund.

Few doubt that it will get therebefore an informal deadline it has setfor investors early next year. Insiderssay, though, that the lukewarm recep-tion may mean the firm scaling backits eventual target for the fundraising.

Permira is hardly alone, as limitedpartners reassess asset allocations andtake a tougher stance on managementfees. A string of redundancies atPermiras network of internationaloffices feels like the thin end of the pri-vate equity wedge.

been guilty ofmonopolising the mar-ket for life cover.

Over twoyears since its abandon-ment, the Pru chief is sailing in moreserene waters: profits have soared andtheshare price has outspiked most ofits rivals.Yet there continues to be a hole in

the Pruboardroomas it struggles to

identify a senior independent directorto replace Paul Manduca, who steppedup to the chairmanship earlier thisyear. The process to hand Manducathat rolewas hardly derived straightfrom the textbook, which was mildlyembarrassing given the Prus owner-ship of M&G, one of the Citys biggestfund managers. Still, in the context ofcorporate governance disasters past, itmerited a footnoteat most.Among those approached about the

senior independents role, I under-stand was Guy Dawson, a formerinvestment banker at Nomura. Thetalks broke down and the Prus head-hunters are back at the drawing board.

Given the Prus often-fraught rela-tions with investors during the lastdecade, its hardly surprising that afrontline role dealing with them is

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GOVERNMENT delays in gettingfinancial education on the nationalcurriculum is a massive drain on tax-payer resources, according to freshresearch published today.

Poor financial education costs theUK government 3.4bn a year, accord-ing to the report published today bythe Centre for Economics andBusiness Research (CEBR) forMoneySavingExpert.com.The study finds there are four key

areas where poor household knowl-edge of financial matters is costingthe government, including personaldebt, mis-selling, retirement and

unemployment.Of these, the CEBR con-

cludes that people notsaving for retirement iscosting the govern-ment the most at6.2bn in subsidies.

It estimates thatfinancial edu-c a t i o ncould alsohelp slashthe cost

Poor lessons infinance costing

taxpayer 3bnBY KASMIRA JEFFORD

of retirement to the taxpayer by1.8bn.The report comes a year after a peti-

tion calling for a curriculum changesigned by 118,000 people and backedby Martin Lewis, the founder ofMoneySavingExpert.com prompted adebate on the matter in theCommons.

During the debate, schools ministerNick Gibb agreed to consider financialeducation during the still unpub-lished curriculum review, which isexpected to be implemented inSeptember 2014.

The support for compulsory finan-cial education in schools is a huge 97per cent. The population, teachers

unions and many heads agree...some-times, I feel the only people who arentlined up are those sitting round theCabinet table, Lewis said.

The cost of not equipping youngpeople to become responsible con-sumers is huge compared to the trivialprice of adding financial numeracy tothe maths curriculum and money

awareness to PHSE, he added.

Martin Lewis, the founder ofMoneySavingExpert.com

BANKS will face tougher penaltiesif they put incorrect information inthe prospectuses of firms planningto list, under new proposals fromthe Hong Kong authorities unveiled

yesterday.Under new rules sponsor firms

have civil and criminal liability fordefective prospectuses, theSecurities and Futures Commissionsaid, concluding its consultation.

But the sponsoring bank will alsobe given more powers to find outthe information it needs: A listingapplicant commits that it and all

professional advisers involved inthe IPO will fully co-operate with

Hong Kong to crack down onpoor share issue prospectusesBY TIM WALLACE the sponsor.

That could make banks wary oftaking on some firms, and soreduce the options for listing firms,possibly driving them to London.

The proposals could haveunintended consequences likedriving some banks away from thesponsor role to a pureunderwriting role. That couldreduce the overall size and qualityof the pool of available sponsorfirms, said Linklaters RobertCleaver. But he expects the impactto be marginal at most, as factorslike the valuation and liquidity aremore important for listing firms

than the regulation of theirsponsoring banks.


Zombie firms taking a bite outof earnings at Begbies TraynorAN ARMY of zombie companiesbeing kept afloat by record low

interest rates have hit businessrecovery group Begbies Traynorsearnings in the last six months.

The firms revenues fell 11 percent to 26.1m in the half-year tothe end of October, while pre-taxprofits dropped from 3.4m a yearago to 2m.

A subdued summer insolvencymarket was to blame for some ofthe decline, Begbies saidyesterday, as firms that would

BY MARION DAKERSotherwise have struggled got areprieve in the form of the Bank ofEnglands loose monetary policy.

There are currently no signs of

an increase in insolvency volumes,in spite of the many indicators offinancial stress, it said in astatement.

However, it said business is inline to pick up once interest ratesrise again, forcing zombie firms toconfront their debts.

Begbies noted that it hadsuccessfully trimmed its cost baseafter selling off some non-coredivisions last year.

It has cut its number ofinsolvency practitioners from 466to 449 since the start of the year.

High-profile corporate collapses

on the firms books during theperiod included Port Vale FootballClub, Twickenham Film Studiosand United Carpets (Northern)Limited.

Shore Capital said the resultsshow the effects of a subdued UKinsolvency market but continuedtight cost controls have led to arobust outcome, in our view.

Shares in the firm closed 3.3 percent lower at 32.75p.

BERKSHIRE Hathaway, the company controlled by billionaire financier Warren Buffettyesterday said it paid $1.2bn (743m) to repurchase 9,200 Class A shares from the estate of alongtime shareholder. The move comes after Berkshire hit historically low valuations last year.

BERKSHIRE HATHAWAY IN $1.2BN SHARE BUYBACK

7/30/2019 Cityam 2012-12-13

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Help give someone Opportunity

12

CHRISTMASAPPEALCITYA.M.THURSDAY 13 DECEMBER 2012 cityam.com

SANDRA and her family are amongthe many that were helped by themoney raised from the appeal last

year.

Full Name: Sandra Clara TomasGender: FemaleCity, Country: Tete, MozambiqueChildren: four aged five to 21

Sandra Clara lives in Tete, thenorth-western province ofMozambique, with her fourchildren aged five to 21. She usedto run a small business at homemaking sweet rocks of ice andselling them for children but shestruggled to make a profit. Sheknew she needed to expand orchange her business but didntknow how.

Sandra first heard aboutOpportunity International on a

visit to the mercado novo (newmarket) where loan officers wereexplaining the financial productsand services that they offered.

Knowing that selling secondhand clothes can be veryprofitable, Sandra applied for anOpportunity loan and with it

started a new business sellingsecond hand clothes and bags atthe market.

Sandra used the loan to buystock for her business. Her stall

was a great success as it was fullwith customers trying on clothesand she often made 100 per cent

profit on her purchases. She wouldthen put this money back into

buying even more stock for thebusiness.

She now buys stock three or fourtimes a week and often sells all ofit, particularly at the end of themonth when customers have moremoney.

The business is now boomingand Sandra has had to employ twopeople to help her sort and displayher clothes.

A little loan can go a long wayand many others in her family andcommunity are benefiting as aresult. Her quality of life has alsoimproved: I installed running

water, bought a fridge, and boughtsome land to build a house.

Looking forward, Sandra hopesto open another market stall andone day be able to buy a car to helpher purchase her goods.

Opportunity International beganworking in Mozambique in 2004.The majority of its clients arefarmers or run small businesses inmarkets.

Before Opportunity, they wereignored by commercial banks

because they were just too poor.The majority of these working

people live in rural areas far fromthe city. Through satellite branches

and mobile banks, banking isbrought closer to those who needit. The results are worthcelebrating: Businesses areprofitable, families are better fed,children better educated and thesick are better cared for. Lives, likeSandras, are transformed.

Every pound donated by City A.M.readers will be matched by the UKGovernment. So far the City A.M.appeal has raised 520,208.

Text donations may notwork from companymobile phones as theseoften block premiummessages.

If donations exceed ourprogramme needs inAfrica, they will bedeployed elsewhere.

online at:www.cityam.com/appeal

70070

TWEET

by text

Opportunity International

(01865 725 304)

credit or debitcard by phone to

#cityamappeal

CITY13 and amount(5 or 10 only) to

with details of why youvedonated. These commentsmay be printed in City A.M.

HOW TO

GIVE

Proudly sponsored byWith Matching yourdonations with

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When I joined Opportunity it changed my life!says Sandra Tomas from Mozambique

SandraClaraTomasfrom TeteinMozambique

7/30/2019 Cityam 2012-12-13

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14 NEWS cityam.comTHURSDAY 13 DECEMBER 2012

IN BRIEFCallebaut swallows cocoa firmn Barry Callebaut, the Switzerland-based group that supplies chocolateand cocoa products to large suppliers,said yesterday it has agreed to buyPetra Foods cocoa ingredients businessfor $950m (590m). The company saidthe acquisition would help boost itspresence in developing countries.Barry Callebaut expects the cocoamarket in the Asia-Pacific region togrow by five to nine per cent, and inLatin American by three to eight per

cent annually.

Ophir reveals Tanzania findn Africa focused oil company OphirEnergy yesterday said it hadsuccessfully completed appraisal drillingon three wells in a block offshoreTanzania, and found a consistent, high-quality reservoir at the Jodari field. Asa result, it has reconfirmed the 3.4trillion cubic feet recoverable resourceestimate. Ophir Energy will now focusits efforts on appraising the Mziadiscovery. Shares in the FTSE 250energy firm closed down 4.17 per cent

yesterday at 495p.

EastCoal eyes AIM listingn EastCoal yesterday announced itsapplication for admission on the juniorstock market, expected before the endof December. The mineral developmentcompany has already raised 9.5mthrough a private placing and whenadmitted to AIM, it is expected to have amarket cap of around 42m. For thepast three years, EastCoal has beenfocused on the development of coalmining assets in the Ukraine, and wantsto increase current production levels to

around 3m saleable tonnes a year.

A DOWNWARD trend in like-for-like sales at British buildersmerchant Travis Perkinscontinued in November, as weakconstruction and consumermarkets weighed on business.

Like-for-like sales for the year-to-date slipped 1.8 per cent. Totalsales, which includes theacquisition of Toolstation last

BY HARRY BANKS January, fared better, rising 1.6per cent for the 11 months tothe end of November.

It also said its specialistmerchanting division felt asmall positive impact from theclosure of a competitor.

Both the construction and

retail sectors in Britain havesuffered in the economicdownturn, but Travis Perkinssaid trading was in line with

expectations and that it was ontrack to meet consensusearnings per share for the year.

Despite the evidentweakness in UK constructionand poor consumer confidence,Travis Perkins is performingreasonably well, said Seymour

Pierce analysts.Travis Perkins also trades asCity Plumbing, Keyline, TileGiant, Wickes and BSS.

Carillion confident on full yearas it snaps up Canadian firm

Travis Perkins hit by weak market conditions

SUPPORT services firm Carillionsaid yesterday it was on track todeliver a robust full-yearperformance, adding that thevalue of its pipeline is expected tobe larger than previously thoughtby the year-end.

Carillion, which maintainsroads, railways and militarybases, said in a trading updatethat revenue will be lower thisyear than last largely due to acutting back of its UKconstruction business, although

BY CATHY ADAMS the groups total operatingmargin is expected to increase.

The FTSE 250 support servicesfirm added that its investmentin Public Private Partnershipprojects continued to performwell.

Separately, it announcedyesterday the acquisition of a 49per cent interest in Canadiansupport services businessBouchier Group for 24m.

Meanwhile, CarillionsCanadian arm has snapped uphighway maintenance contractsworth around 525m, while in

Carillion PLC


287.5

290.0

292.5

297.5

295.0

300.0

302.5

305.0 p300.32

12 Dec

SSP, the airport and railway stationcaterer, yesterday reported a 3.2 percent rise in annual sales, boosted byits expansion in Asia and the US.

The group, which runs more than2,100 travel outlets for brands suchas Marks & Spencer and Starbucks,said operating profit jumped 23.7per cent to 61.5m on sales of1.74bn in the year to 30 September.

Like-for-like sales rose 2.7 per cent.SSP was spun off from catering

giant Compass in 2006 in a 1.3bnmanagement buyout backed by EQT,the Swedish private equity firm. Italso owns brands including UpperCrust, Camden Food and opened apub called The Merchant at LiverpoolStreet station in March.

The group has been targeting theUS and China with recent contract

wins at Phoenix and JFK airports andat Hangzhou and Xian airports.

BY KASMIRA JEFFORD

Lancashire Carillion been selected aspreferred bidder for a contract worthup to 150m.

Travel caterer cooksup strong sales rise

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BROWSING the pages of the Januaryissue of Wired magazine, TheCapitalist stumbled across apenchewing piece of research bystockmarket trader turned neurosci-entist, John Coates.

In the article, Cambridge-educatedCoates asserts that testosteroneskews financial markets, and posesthe question should more decisions

be left to women?The former Goldman Sachs

trader began working onWall Street in 1989: Iwould see people get on awinning streak on thetrading floor and golunatic.

He left in 2002 to testhis hypothesis that finan-cial instabilities aredriven by hor-mones, claim-

Scientist saysbank bossesare acting ape

ing that: Women knew there was abubble and were acting sane; menwere out of control.

His first test subjects were 17 tradersfrom a midsize firm in the SquareMile, who were required twice dailyto register their profit and loss state-ments, and give saliva samples. Heconcluded that, in financial markets,men are more hormonal than

women.Coates makes an unusualanalogy about his time as atrader: During a crisis, man-agers behaved like a stressed-out troop of primates.

The Capitalist hopes thisdoes not mean biting the

junior monkeys, or else wereally are in trouble.

Former trader turnedneuroscientist John Coates

DESPITE Jack Frost nipping attheir heels, 200 leaping lords anddancing ladies donned costumesfor a sponsored dash aroundCanary Wharf yesterdaylunchtime.

The fancy dress charity race wasin aid of childrens charityStarlight. Competitors complied

with the festive dress code bydonning team costumes, inspired

by the 12 Days of Christmas

Ten leaping lords, nine ladiesdancing, eight maids and a cow

rhyme. The result? An array ofmorphsuits, tutus, wings andmaid outfits being paradedaround Docklands.

Theres a first time foreverything, and running throughCanary Wharf in a tutu during mylunch hour is certainly a first forme said Neil Darke, chiefexecutive of Collins Stewart

Wealth Management and one ofseven swans a-swimming.


Photograph posed by model Getty Images. Emmas story draws on real life examples from NSPCC services, but does not describe a specific case. Texts will be charged at 4 plus your standard rate.

A minimum of 3.97 will be received by the NSPCC. By using this service you agree to being contacted by the NSPCC by telephone or SMS. Registered charity numbers 216401 and SC037717.

Text HAT to 70744 and give 4Be a S NTA for the NSPCC

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Brokers from Peel Hunt as the eight maids a-milking (left) and Neil Darke, chiefexecutive of Collins Stewart Wealth Management (right)

15cityam.com

Iceland Foods chairman MalcolmWalker (pictured) headed off on a

trek to the South Pole in November tomark the firms 42nd anniversary. The140 mile unsupported trek across theAntarctic ice cap to the geographic

South Pole aimed to raise funds forAlzheimers Research UK and WalkingWith The Wounded.Walker, who abseiled down the Shardearlier this year and has already checkedthe North Pole off his exploration list, isclearly no stranger to danger: Now Imaiming to complete the Polar doublethrough 19 days of what I know will beutter misery, given that my naturalhabitat is a centrally heated five starhotel, rather than a shared tent at minus40C. Famous last words, as they say.Walker flew home before completingthe trek due to illness: What the hellhave I done to my stomach? I blame theexpedition food, he said. However hisfellow adventurers, including Olympian

Matthew Pinsent,reached the pole

and areexpectedsafely backon UK terrafirmatomorrow.

cityam.com/the-capitalistTHECAPITALIST EDITED BY CALLY SQUIRESGot A Story? Email

[email protected]

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CONGRESS and President Obama

will be able to reach agreement onthe bulk of the fiscal cliff the$600bn (371.7bn) in automatic taxrises and spending cuts due inJanuary making the consolidationinto more of a molehill, Legal &General analysts suggested yesterday.

The Republican-held House ofRepresentatives and the executivebranch will reach a deal preventingmost Bush-era income tax rates fromjumping and will be able to agree tohalt spending cuts, the analystsforecast.

It calculates this will reduce themagnitude of the fiscalconsolidation from 4.9 per cent ofGDP to 2.1 per cent of GDP or$340bn, instead of $780bn.

The US federal government debtstands at $16.4 trillion, and thegovernment plans to add around$1.3 trillion to it this year through its

deficit. The fiscal clif f would drivethat deficit down to hundreds ofbillions of dollars but Legal &General said so much fiscaltightening at the same time wouldundoubtedly pushthe US back intorecession.

But Obama andthe House havebeen at loggerheadsover tax measures,with manyrepresentativesrefusing to acceptany deals thatinclude tax hikes.

L&G says fiscalcliff dilemmacan be solved

BY BEN SOUTHWOOD

MORTGAGE lending bounced backstrongly in October, according toindustry figures released yesterday,yet analysts remain unconvinced thatthe governments Funding forLending Scheme (FLS) is delivering asea change in the housing market.The total number of loans for house

purchase climbed 13.8 per cent to49,500, data from the Council ofMortgage Lenders (CML) revealed.After a disappointingly flat

September, the figures provided somecause for optimism, with the numberof loans made to first time buyersjumping by 14.3 per cent to 20,000.

Yet the CML was careful not to getcarried away. An uptick in remort-gage lending may be an early sign of asmall positive impact of the Fundingfor Lending scheme, but its still toosoon to evaluate the effects of thescheme, said its head, Paul Smee.

Loans for remortgaging were up 11.6per cent on the month; the numberof remortgage loans can be a betterbarometer of the FLSs effect thanloans for purchase, due to the lagfrom the length of time it takes to buya house.The government and the Bank of

England launched the FLS, which pro-vides funding to participating bankswith the intention of boosting loansto individuals and companies.Yet David Newnes, director of estate

agent owner LSL Property Services,

Mortgage loansjump back after

September dipBY JULIAN HARRIS remains unconvinced.The impact of FLS is being felt on

mortgage rates, but in reality, theextent to which it can provide a sus-tained boost to first-time buyer num-bers in the coming year is likely to becounterbalanced by the capital buffersbanks must set in place for higher risklending to new buyers, Newnes said.Yet Octobers pick up in the availabil-

ity of mortgages to young people look-ing to get onto the property ladderwill be welcomed, he added. Any signof improvement will be welcomedwith open arms by the legion of frus-trated first-time buyers swelling theranks of renters at present.The number of loans to first time

buyers was up 19 per cent compared tothe same time last year. The 2.5bn inmortgages included an average loan-to-value ratio of 80 per cent, with thedata revealing that first time buyersspend an average of 13.5 per cent oftheir income on mortgage interestpayments, the data showed.

Number of mortgage loans

Oct12Jul12Apr12Jan12Oct11Jul11Apr11Jan11

30

35

40

45

50

25

55 Thousands

THE BANK of Englands chiefeconomist, Spencer Dale, warned

yesterday that inflation couldcontinue to stick above target,tightening the squeeze on UKhouseholds budgets.

Stubbornly high inflation hasbeen prompted by unavoidable yetpainful adjustments in theeconomy such as sterlingsdepreciation and higher VAT, whiletumbling productivity has also hitthe economy, Dale said.

Real wages and productivity aredown by around 15 per centcompared with the pre-crisis trend,Dale told a gathering at StationersHall in London.

The harsh but inescapable

Top Bank of England economistwarns over UKs sticky inflation

BY JULIAN HARRIS reality of these developments andthe real adjustments theynecessitate is that householdsand families in our economy are

worse off. Much worse off, he said.And Dale warned that inflation

levels higher than wage rises couldcontinue to plague the UK.Looking ahead, it seems likely thatthat this adjustment process is not

yet complete and so the stickinessin inflation may persist for a while

yet, Dale said.The consumer price index

measure of inflation has stayedabove its two per cent target for 35straight months.

Despite slipping to 2.2 per cent inSeptember, it worried economists

by springing back up to 2.7 per centin October.


Spencer Dale warned living standards will continue to be hit by economic adjustments

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Analysts fear watchdog istoo optimistic on UK growthOFFICIAL growth and inflationforecasts are too optimistic,because the independent bodyresponsible is afraid of spookingmarkets with a gloomy outlook,a top economist warnedyesterday.

The Office for BudgetResponsibility (OBR) was set up tomonitor the economy to judge

how likely the chancellor is to hithis debt and deficit targets.It is supposed to be

independent, to avoid thepolitical manipulation that hadplagued government forecasts in

BY TIM WALLACE the past.But economists fear the OBR

is still too optimistic notbecause it is being pushed bypoliticians, but because it fearsthe impact on confidence of apessimistic forecast.

The OBR is inclined to be toooptimistic if I was the OBR, Iwould worry that a forecast thatdebt will rise to above 100 percent of GDP would prompt

downgrades from someagencies, said BNP Paribas PaulMortimer Lee to the TreasurySelect Committee of MPs.

Being wrong in toopessimistic a direction might

have adverse consequences here andnow, so they instead prefer to betoo optimistic, he said, predictinganother downward forecast willcome in the near future.

TRANSPARENCY in pension fees isthe best way to help firms andstaff make the best choices on howthey save, business groups toldMPs yesterday.

And they rejected a cap oncharges in the Work and PensionsSelect Committee hearing onpensions auto-enrolment.

There may come a time when acap on auto-enrolment charges

Firms demand more pensions transparencyBY ALEX WYNICK will become necessary, but the

average charge is now down tojust over 0.5 per cent, saidNeil Carberry from theConfederation of BritishIndustry.

Large companies have had toautomatically enrol staff inpension schemes since October,and smaller firms must follow

within the next five years.

We are often dealing withpeople with a limited degree of

sophistication regardingpensions, said Tim Thomasfrom manufacturers tradeassociation EEF.

The solution istransparency of charging.

The pair told the committeethat informing employers ofthe effects of charges andallowing them to makeinformed decisions is crucial

for businesses to benefit fromthe schemes.

Obama wantshigher tax ratesfor big earnersS

OURCE:CML

The OBRs GDP forecasts may be too optimistic

20162014201220102008200620042002

-4

-2

0

2

4

-6

6 Percentage change on a year earlier

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Wall St flat asfiscal cliff fearsremain high

US stocks ended nearly flatyesterday, giving up most ofthe days gains after FedChairman Ben Bernanke

reiterated that monetary policy wontbe enough to offset damage from thefiscal cliff.

His comments followed the FederalReserves announcement of a new stim-ulus plan, which briefly pushed the

S&P 500 to a seven-week high.The plan, the latest attempt to boost

the countrys struggling economy, willreplace a more modest program set toexpire with a fresh round of Treasurypurchases that will increase its balancesheet. The program is known as quan-titative easing or QE.

In comments after the announce-ment, Bernanke said he hopes thatmarkets wont have to tank to get a fis-cal cliff deal.

Bernanke reiterated the fact thatmonetary policy has its hands tied asfar as addressing the seriousness ofgoing over the fiscal cliff, Hellwigadded. The S&P financial sector index,which had been up more than one percent after the Feds announcement,ended up just 0.5 per cent.Wal-Mart Storess stock was the

biggest drag on the Dow, falling 2.8 percent to $68.94 following the Indian gov-ernments announcement of aninquiry into the companys lobbyingpractices.The Dow Jones industrial average

slipped 2.99 points, or 0.02 per cent, to13,245.45 at the close. The Standard &Poors 500 Index inched up just 0.64 ofa point, or 0.04 per cent, to 1,428.48.But the Nasdaq Composite Index shed8.49 points, or 0.28 per cent, to end at3,013.81. Though the S&P 500 ended upjust slightly, it was the sixth day ofgains for the index its longest win-ning streak since August.

BRITAINS top share index closed ata new nine-month high yesterday,led by an energy sector buoyed byhopes that the US Federal Reserve

would continue to provide stimulus forthe worlds biggest economy.

Oil & Gas and basic materials, which riseand fall with optimism over the economicoutlook, combined to added over 13 pointsto the FTSE, which rose on expectationsthe Fed will launch a fresh round of $45bnin bond buying a month, bringing themonthly pace of asset purchases to $85bn,The FTSE 100 index closed up 20.88

points, or 0.4 per cent at 5,945.85, its high-est close since March, and marking a nine-month high for the index.The energy sector added nine points to

the index as oil rose to around $110 a bar-rel, with investor anticipation of renewedmonetary stimulus outweighing plentifulsupply.The materials sector also prospered, with

minerAnglo American among the FTSE100 leaders, ahead by 2.7 percent as it waslifted by a Barclays upgrade to equal

weight from underweight.The rise took gains for December to 1.3

per cent less than halfway through themonth, despite recent downgrades togrowth outlooks across the UK and theeuro zone.A rise in December would be the 10th

straight year of gains in the last month ofthe year, and the index rose for the sixthstraight day for the first time this year.

However, the recent gains have beenmade in thin volumes, and while the indexclosed above 5,932, the intraday high inSeptember, other key levels need to bepassed before it can hit 6,000.

BESTof the BROKERSTullow Oil PLC

6 Dec 7 Dec 10 Dec 11 Dec 12 Dec

p1,2751,250

1,150

1,175

1,200

1,225

1,125

1,100

1,182.0012 Dec

TULLOW OILCredit Suisse has cut the oilfirm from outperform toneutral and has a newtarget price of 14.80. Thebroker sees a subdued endto the year for Tullow, withfew opportunities on thehorizon until the spring.

DASHBOARDCITY YOUR ONE-STOP SHOP FOR JOB MOVES,BROKER VIEWS AND MARKET REPORTScityam.com

FTSE


5,950

5,940

5,930

5,920

5,900

5,890

5,910

5,945.8512 Dec

Oxford Catalysts Group PLC


p160155

145

150

135

130

140

139.0012 Dec

OXFORD CATALYSTSPeel Hunt has lowered itsrating from hold tobuy and has a target of125p. While a recentfundraising gives the firmmore credibility, the broker

thinks Oxfords value is inits potential in shale gasrather than its cash flows.

ITV PLC


p105

104

102

103

101

102.3012 Dec

ITVLiberum repeats its buyrating and 145p fair value.The broker thinks there isstill a reason to buydespite the recent shareprice rise, and thinks asignificant return ofcash is likely at the fullyear results.

Westhouse SecuritiesFinlay Thompson has been

appointed specialist oil and gassalesman on the stockbrokersinstitutional sales desk. He has 18years experience in the industry,and has previously held roles atABN Amro, Credit Lyonnais,Natixis and others.

QuadranglePhil Rance has been appointed corporate developmentdirector at the consultancy firm. He was previously UKmanaging director at YouGov and European managing

director at Research Now. Rance has also held senior roles atthe AA and Bradford and Bingley.

Speechly BirchamClaire Fallows has been appointed partner in the law firmsreal estate and consultancy grojup. She joins from HoganLovells, where she has worked for the past 10 years. Fallowsis a specialist in urban regeneration projects and strategicland development.

Futures and Options AssociationNatasha Stromberg has been appointed regulation managerat the derivatives industry association. She joins from theFSA, where she was lead supervisor at the London Metal

Exchange. Stromberg has also held positions in theinvestment banking industry.

Pioneer InvestmentsThe investment group has announced two new hires to itsEuropean fixed income team. Vianney Hocquet joins fromBNP Paribas as a corporate portfolio manager. Elizabeth VanSante joins from Credit Agricole as a credit analyst.

Crimson & CoMatt York has been appointed head of the supply chainconsultancys organisational design practice. He has 12years experience as a management consultant, and hasheld positions at United Biscuits and Coca Cola.

WHOS SWITCHING JOBS Edited by Daniel Zuidijik

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

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FTSE surges to nine-month high onhopes of further stimulus from Fed

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IHOPE, dear CityA.M. reader,that you occasionallymanage to unchain yourselffrom your desk, rip yourselfaway from the trading floor,

and escape from the shadows ofthe towers of Canary Wharf andthe Square Mile. Because and Ihope this wont come as a totalshock to you there is a bankingindustry outside the centre ofLondon.

These giants of exporting havecreated thousands of jobs acrossthe UK Citi works out ofBelfast, Morgan Stanley hasdivisions in Glasgow and JPMorgan in Bournemouth. Butnumerically more significant are

the people who keep the

WOLFGANG Schuble, theGerman finance minister,recently said that we canonly achieve politicalunion if we have a crisis.

His idea is to exploit the Eurozonessovereign debt problems to conferadditional powers on the EU. And hismost recent project is the singlesupervisory mechanism otherwiseknown as banking union. EU financeministers are meeting this week tothrash out the details.

The argument goes that, if Europedirectly finances the recapitalisation ofGreek and Spanish banks, these insti-tutions should fall under the supervi-sion of a single authority. Schubleasserts that national regulators lackthe incentive to be strict, and that aEuropean supervisor is needed to pr

cityam 2012-12-13

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