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Senior voices say new Parliamentary reportwould put a sword of Damocles over banks

NYSE sold

upstart ICEin $8bn deaTHE NEW York Stock Exchange isto end two centuries of independence after its parentcompany NYSE Euronext was

yesterday sold to upstartIntercontinentalExchange (ICE) for$8.2bn (5bn).

The deal hands control of one of the most renowned names in

global finance to little-known ICE,an Atlanta-based company bestknown for its electroniccommodities trading platforms. Aspart o f the deal, ICE has committedto maintaining the exchangesiconic Wall Street building and itstraditional trading floor.

Our transaction is responsive tothe evolution of marketinfrastructure today and offers arange of growth opportunities,said ICE chairman and CEO Jeff Sprecher, who will be chairmanand chief exec of the new group.

NYSE Euronexts shares rose by athird after the deal was announced

while ICE remained broadly flat.Subject to regulatory approval, thecompany will become the worldsthird-largest exchange group.

Despite acknowledging the stockexchanges history, ICE has limitedinterest in the equities market.

As a result it will seek to riditself of Euronext the pan-European stock exchangeoperating in Amsterdam, Brussels,Paris and Lisbon in an IPO at theearliest opportunity.

Yest erday analysts said ICEs realtarget is the London-headquartered Liffe, Europessecond-largest derivatives market.

Commission chairman Andrew Tyrie fears banks will try to get around the new ringfence rules

PROMINENT City groups reacted furi-ously to plans for full separation of

banks today, arguing the proposalsadd a fresh round of uncertainty to thesector, hurting lending and growth. And plans for a tougher leverage

ratio were also attacked, as it couldpush up the cost of mortgage borrow-ing and put the UKs banks at a com-petitive disadvantage to foreign rivals. The Parliamentary Commission on

Banking Standards (PCBS) wants new laws to threaten banks with full sepa-ration if they stray from the spirit of the incoming rules on ringfencing. This means a bank would have to dis-

pose of parts of its business, ratherthan merely fence them off internally. And the PCBS wants a review of the

new ringfence after a few years toensure it is working and if not, toconsider splitting banks completely.

For the ringfence to succeed, banks

need to be discouraged from gamingthe rules. All history tells us they willdo this unless incentivised not to, saidPCBS chairman Andrew Tyrie MP.

Thats why we recommend electrifi-

BY JAMES WATERSON

Ftse 100 M 5,958.34 -3.25 dow n 13,311.72 +59.75nasdaQ n 3,050.39 +6.03 /$ 1.62 u c / 1.23 u c /$ 1.32 u c

WH O S ON THE P CB S: pa 3nn MORE ON THE DE AL: pa 2nn

BUSINESS WITH PERSONALITY

www.cityam.com FREE

CITY A.M.S TOP TWENTY CHARITABLE DONORSs pa 21-27

ring in 2013 with style

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BANKSEPARATIONBACK ON AGENDA cation. The legislation needs to set outa reserve power for separation; the reg-ulator needs to know he can use it. And if this power is used several

times, the PCBS suggests that even well-behaved banks should be split up.

Significant use of this reserve power would indicate that full separationacross the banking sector would be very likely to be the appropriate step,the report noted. The industry hit back, arguing the

long-term, repetitive nature of thethreat to split up all banks can only damage the sector and the economy.

Having a sword of Damocles dan-gling over banks is not good for the UK if we dont know what the industry might look like in 10 years time, it isnot conducive to encouraging lend-ing, said a finance source whodeclined to be named. The City of London Corporation

praised ringfences as a whole, but notthe extra threat to break banks up, say-

ing it was neither necessary or appro-priate to tackle effectively the issuesthat have arisen. The CBI echoed these comments, say-

ing that while the threat of separation

might help to concentrate minds,such a move would be detrimental to

businesses, preventing them fromaccessing the full range of services

they need from a single provider.Last years Vickers report proposed afour per cent leverage ratio, but thegovernment favoured three per centin line with the global Basel III plans

a step opposed today by the PCBS, which wants a tougher approach.

The British Bankers Association hitout at the tougher limit, which could

come into effect before Basel III.Increasing the ratio would restrictthe number of mortgages banks couldagree to, it added.

BY TIM WALLACE

2 0 1 2

ISSUE 1,787 FRIDAY 21 DECEMBER 2012

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TAKING control of the London- based Liffe derivatives market is themain reason IntercontinentalExchange (ICE) paid $8bn (4.9bn)for exchange operator NYSEEuronext, analysts declared yesterday.

Although the NYSE Euronextgroup includes the venerable New York Stock Exchange and equity markets across Europe, it is thederivatives arm that offers growthopportunities as new regulationsforce more trades to be carried outon electronic platforms.

The vast majority of the valuecan be attributed to the derivatives business. They want to be inEurope, in size, because of all theregulations that are coming inPeter Lenardos, an analyst at RBCCapital Markets, toldCity A.M..

Even assuming theres no recov-ery in market conditions thenclearing volumes shouldincrease. If you layer that intoa market recovery then itcould be quit exciting.

However he warned thatthe price is quite generous. Yesterdays announcement is

a personal triumph for57-year-old ICE chair-man and CEO Jeffrey Sprecher, a

prolific dealmaker who only foundedthe business in 2000. His company will be the dominant party in the

new venture, with NYSE Euronextreceiving only four of the 15seats on the merged board.

Current NYSE CEO DuncanNiederauer will become presi-dent of ICE and report direct-

ly to Sprecher. Although the deal will

require regulatory approval this is more

IN BRIEFCable mulls insolvency shakeun Business secretary Vince Cableyesterday floated the idea of shakingup the UKs insolvency rules amidquestions around the controversialcollapse of electrical retailer Comet.Cable told the House of Commons:There may well be better ways ofhandling insolvency. We should havean open mind about otherapproaches. The American Chapter 11system may well be better and I wantto have a proper look at that.

Republicans push own fiscal pn Republicans in Congress pushedahead yesterday with a fiscal cliffplan that stands no chance ofbecoming law as time runs short toavert a Washington-induced economicrecession. House Speaker JohnBoehners Plan B to limit income-tax increases to the wealthy appeared

likely to pass the House last nightafter it cleared a procedural hurdle.President Barack Obama has vowed toveto the plan.

Madoff brother given 10 yearsn Peter Madoff will serve 10 years inprison for his role in his brothersmultibillion-dollar Ponzi scheme, a judge in the US said yesterday. PeterMadoff, 67, pleaded guilty in June tocriminal charges including conspiracyto commit securities fraud forfalsifying the books and records of theinvestment advisory companyfounded by his brother, BernardMadoff. He agreed at the time not tooppose a request by prosecutors for amaximum 10-year prison sentence.

Londons quality of Liffeat heart of NYSE purchase

Trafigura earns $1bn twice in a rowTrafigura, the commodities trader, earnedabout $1bn for the second year running in2012, indicating that the profitability ofthe worlds top houses that dominate rawmaterials has remained high in spite ofslower economic growth in China. Theprivately held company, based in Genevaand Singapore, has told its lenders andbondholders it made profits of $991.9m inthe year to September, down 11 per centfrom last years record $1.11bn. Thecompany does not release its accountspublicly.

Selfridges buys office for 130mSelfridges has bought an office blockneighbouring its flagship Oxford Streetshop for about 130m, in a move thatsuggests that suggests the departmentstore will expand its presence in thecentral London retail district.

Ex-banker charged in Olympus caseA former Taiwanese banker has beenarrested and charged in the US forallegedly helping Olympus conceal a$1.7bn accounting fraud. Chan Ming Fonwas arrested in Los Angeles yesterday.

Tesco loses appeal over collusionTesco won a partial victory against theOffice of Fair Trading yesterday, but anappeal court ruled it had indirectlycolluded with rivals over cheese prices.

Drug supplier sold after NHS caseThe founder of an antibiotics supplier thatsettled accusations of defrauding the NHSin 2010 is to walk away with nearly 50million after selling the business to anIrish competitor. Kent Pharmaceuticalshas agreed a buyout by DCC Healthcare.

BP and Rosneft plan TNK integrationBob Dudley, BPs chief executive, is to joina steering committee to mastermind theintegration of TNK-BP into Rosneft, thecompanies announced yesterday. BP is totake two seats on the Rosneft board ofdirectors.

Dover privatisation plan blockedA controversial scheme to privatise thePort of Dover has been blocked by theGovernment after a backlash from localresidents and a revolt by ferry operators.

Monti drafting reform agendaItalian Prime Minister Mario Monti willover the next few days unveil a policyroad map that aims to pressure Italy'sfractious political parties into continuinghis overhaul of the economy.

Rival sales weigh on NikeNikes fiscal second-quarter profit shrank18 per cent as results were weighed downby $137m in losses tied to the sale of theUmbro and Cole Haan brands, maskingstrong demand for the athletic-goodsgiant's products.

The historic New York Stock Exchange building will be preserved as part of the deal

2 NEWS

BY JAMES WATERSON

To contact the newsdesk email news@citya

THE COMMON complaint aboutCity A.M.in its infancy was thatit was hard to pick up outsidethe City, Canary Wharf andMayfair.

Readers generally loved the paper but wanted to read it on their way into work rather than when they

arrived at their destination.So, over the past couple of years wehave been re-jigging our distributionrange by substituting some areas withothers and many of you will havenoticed the paper has been availableat tube stations and overground sta-tions nearer to your homes.

Earlier this year, we went one stagefurther, increasing the overall circula-tion of the newspaper by 30 per cent, with the majority of the new copiesoutside our traditional centraldestinations. This has been a truly dramatic

Thank you for reading us in ever greater numbers in 201FRIDAY 21 DECEMBER 2012

strategic development. It enablesreaders to devote more time to thenewspaper if they wish and it givesmore people the chance to pick us up.So far the signs are encouraging,according to our recent readershipsurvey which hundreds of you filledin.

2012 has been a year of furthergrowth for City A.M. We organised ourfirst ever event, Active Trader, whichattracted hundreds of people to a con-ference aimed at giving traders fresh

perspectives on their investing strate-gies. There will be a second such eventin the year to come.

In October, we staged our thirdannual awards event, at which theguest speaker Boris Johnson spoke wittily and affectionately about thenewspaper and the important role

that financial services play in thisgreat City.Personality of the year went to

Sebastian Coe who else? the man who delivered the near flawlessOlympic Games to reaffirm whatLondon and Londoners can achieve.London, we did it right, said Coe inhis final address at the Olympic stadi-um and there are few who would dis-agree with him. The Olympics gave usand the capital at large a summer we will never forget.

On another front, we launched ourlifestyle magazine Bespoke earlier

that did get away towards the end of the year, Direct Line, has maybe breathed some life into an otherwisemoribund market. We can only hope.

Mergers and acquisitions have beendown too, but one gigantic deal, themerger of Glencore and Xstrata, didfinally get completed after many

hitches along the way.Elsewhere, weve got much to lookforward to, including the pronounce-ments of the new Canadian governorof the Bank of England, Mark Carney Theres nothing to suggest so far thatCarney will be short of candid views. Were back on 2 January and we

hope you will be here too.Until then, whatever you are up to,

have a very merry Christmas.

this year and there are plans toexpand our digital coverage, with anenhanced and redesigned web-site. There are also plans to expand ourcoverage of careers.

For many, the year that is just pass-ing has not been an easy one. Some of the Citys core employers have been

retrenching, especially the invest-ment banks who have been struck by lower business volumes together withstiffer regulation. There has also been consolidation at

some of the mid-sized banks, withInvestec buying out Alex SnowsEvolution and Canaccord Genuity merging with Collins Stewart. Again job losses have followed but the hopeis that the market is slowly returningto a more profitable, less oversup-plied, basis.

It has been a year of fewer IPOs inLondon than in recent years but one

likely to succeed than recent failedattempts to consolidate the exchangesector (see box), such as ICEs ownattempt to join forces with Nasdaqand buy NYSE Euronext in 2011.

If completed it will make ICE which lost its bid to buy the LondonMetal Exchange this summer amajor player in the London market. The deal also raises the prospect of Liffe traders enjoying easier access toICEs existing platforms.

NYSE Euronext were advised by Perella Weinberg and BNP Paribas, while Morgan Stanley advised ICE.

NYSE Euronext

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ICE for London Metal Exchangen When dropped? June 2012

n Bid value? 1.3bnn What went wrong? ICEs bid wasbeaten by Hong Kong Exchanges &Clearing, which paid 1.39bn for the LME.n What happened next? ICE continuedits worldwide expansion with yesterdayspurchase of NYSE Euronext.

Deutsche Borse for NYSE Euronextn When dropped? January 2012n Bid value? $9bn (5.5bn)n What went wrong? The EuropeanCommission feared a quasi-monopoly inthe derivatives market and rejected it.n What happened next? Deutsche Borsechallenged the commissions decision inthe EUs General Court in Luxembourg.

LSE for TMX Group, Toronton When dropped? June 2011n Bid value? 2.2bnn What went wrong? Deal was scrappeddue to lack of support among TMXsshareholders.n What happened next? Maple Group, aconsortium of Canadian banks andbrokerages, won control of TMX last year.

ICE and Nasdaq for NYSE Euronextn When dropped? May 2011n Bid value? $11.3bn (6.9bn)n What went wrong? Rejected by USregulators on fears the merged companywould dominate US stock listings.n What happened next? Earlier this yearNasdaq said other mergers will happenin the future.

FAILED EXCHANGE DEALS

The new jobs website for London profeCITYAMCAREERS.com

WHAT THE OTHER PAPERS SAY THIS MORNING

EDITORSLETTER

DAVID HELLIER

[email protected] follow me on twitter: @hellierd

n Allister Heath is away

By Jakob Villumsen Jeffrey Sprecher will be CEOand chairman of the group

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ACCOUNTANCY group GrantThornton yesterday posted a 10.4per cent rise in global revenues,fuelled by international expansionand growth at home.

The sixth-biggest accountancy firm said revenues in the year tothe end of September totalled$4.2bn. It said its UK practice grew13 per cent, while Asia Pacificrevenues ballooned 33 per cent to$579m via new tie-ups in China and

Australia.Its global workforce grew 14 per

cent to more than 35,000.

Revenues up Grant Thornto

BY MARION DAKERS

WILLIAM HILL and GVC Holdingshave agreed a 485m takeover of online bookie Sportingbet, after weeks of negotiations.

The deal, announced yesterday, will see William Hill pay 454m incash for Sportingbets lucrative Australian and Spanish operations.

GVC will mop up the rest of Sportingbets less desirableoperations, making a sharecontribution to the deal.

The deal marks William Hillsfirst move into Australia as part of an international expansion.

Will Hill snup Sporting

BY JAMES TITCOMB

ENGINEER Weir Group yesterday strengthened its position in the USshale gas sector as it acquiredMathena for up to $385m (236m).

Oklahoma-based Mathena, whichmanufactures pressure controlrental equipment includinghydraulic chokes used in fracking,marks a key move for Weir to broad-en its operations in the US shale gasdrilling market.

FTSE 100-listed Weir will pay an ini-tial payment of $240m, with adeferred consideration of $145mpayable over two years contingenton meeting profit targets.Based on its fourth quarter esti-mates, Mathena is forecast to deliverannualised earnings of $49m. Weir Group chief executive Keith

Cochrane yesterday said that theacquisition was a close strategic fit with Weirs existing pressure con-trol business Weir Seaboard.

The business has strong growthpotential and increases our expo-sure to shale oil and gas, markets with attractive long term structural

Weir centres onUS shale gas inMathena deal

BY CATHY ADAMS growth prospects, Cochrane said yes-terday.

Mathena is a well-regarded busi-ness in the US upstream oil and gasmarkets, with a strong managementteam and market share in the pres-sure control drilling markets. Analysts from Investec cheered the

deal. This acquisition fits in nicely with Weir Seaboard and diversifiesoil & gas revenues away from thepressure pumping market, they saidin a note. The markets reacted well to the

acquisition, with Weir Group one of the biggest blue chip risers yesterday,closing up 2.81 per cent at 1,863p.

A small investment in the futureof cheap and plentiful energy W ITH too much hot air frompeople who arent riskingtheir own money in theUK debate over shale oil

and gas, it is interesting to bereminded by Weirs acquisition of Mathena yesterday of just how impressive the shale energy story has been in the United States, where Mathena is headquartered.Earlier this month, Exxon Mobilforecast that North America would be a net energy exporter by 2025thanks to its domestic shaleindustry, and that more than half of the growth in unconventionalnatural gas supply over the nexttwo decades will be in North America.

That would leave Weir sittingpretty. As its new acquisitionmakes equipment for shale gasdrillers, it is an even safer play

than the drilling itself, with itsattendant uncertainties about yield, lifespan and the volatility of the energy market.

Britains shale gas opportunity isstill unproven, but as politicianstake the first steps towardsexploring the potential for a new cheap source of domestic energy,they could do worse than look atthe long term opportunitiescompanies are identifying andinvesting their resources to pursue.

BOTTOMLINE

MARC SIDWELL

Weir Group PLC


1,800

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1,775

1,875

1,900 p 1,863.0020 Dec

FRIDAY 21 DECEMBER 20124 NEWS cityam.com

Keith Cochrane, group chief executive of Weir, sees long term growth potential in shale

A D a

i m l e r

B r a n

d

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). CO 2 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, rst 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 Retailerfor 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 including19" alloy wheels, Mirror Package, aluminium running boards, chromeunderguards and LED daytime running lights. In the M-Class SpecialEdition, you can go anywhere, and go there in style.Visit mercedes-benz.co.uk/offers

36 Monthlypayments of*

469.00

Customerdeposit

7,374.77

On-the-roadprice

43,240.00

Retailer depositcontribution 1,500.00

Duration of agreement

36 months

Optionalpurchasepayment

20,975.00

Amount of credit

34,365.23

Total amountpayable

47,008.77

Acceptancefee

180.00

Purchaseactivation fee

95.00

Fixedinterest rate

4.16%

RepresentativeAPR

4.6%

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SEVEN firms are bidding in an auc-tion of the UKs 4G airwaves that willallow them to run significantly fastermobile internet services while boost-ing the governments coffers.

Ofcom yesterday announced theparticipants for Januarys auction. The UKs four mobile operators EE,O2, Vodafone and Three are expect-ed to grab the lionsshare of the spec-trum on offer. The other three

participants areBT, Hong KongsPCCW, and themanaged telecomsnetwork firm MLL. They will be bidding

at two spectrum fre-quencies: the more-desirable 800MHz band,appropriate for wi de sp re a dmobile networks, and

Seven bidderface off for 4mobile auctio

BY JAMES TITCOMB the 2.6GHz band for shorter-rangesignals. The well-resourced EE, Vodafone and

O2 are expected to snap up the three800MHz slots, which will let themoffer high-speed networks to most of the UKs population. A fourth operator likely to be

Three is guaranteed some of the2.6GHz spectrum. This would boostspeeds on Threes network in certainareas. The other bidders will look to boost their wireless broadband offer-ings with slots of 2.6GHz.

Ofcom says 4G networks will achievespeeds up to 10 times as fast as 3Gones, allowing instant loading of webpages. The auction which chancellor

George Osborne expects will raise3.5bn will go ahead in January. The800 MHz networks will go live in May

or June, with the 2.6GHz spec-trum freed up over the next

12 months.

Pace PLC


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192194 p 186.70

20 Dec


Pace misses out on Motorola TVbox unit after Google sells outBRITISH set-top box manufacturerPace has missed out on a deal to

buy Motorola Home, the TV boxmaker owned by Google.Google yesterday announced it

had sold Motorola Home whichcame as part of its $12.5bn (7.7bn)purchase of Motorola this year ina $2.35bn deal that will see theunit go to US firm Arris.

Pace was unwilling to match Arriss value for the company andthe merger now poses the threat of a much bigger competitor in the

BY JAMES TITCOMB US, where Pace generates most of its revenues.

The heavily-leveraged deal willsee Google take a 15.7 per cent

stake in Arris. Pace boss Mike Pullisaid: Although we had the supportof our major shareholders andcommitted facilities, we could notreach an appropriate conclusion tothe potential transaction.

Shares in the company had beensuspended last week on news of thepotential deal, due to the fact thatit would have constituted a reversetakeover since Motorola Homes value is much more than Paces.

The company relisted yesterday, with shares falling three per centon the news before recovering.

ERICSSON, the Swedish telecoms giant, yesterday took an 8bnSwedish krona (754m) writedownover its ST-Ericsson joint venture,in a bid to limit exposure to itafter partner STMicroelectronicsdecided to pull out.

ST-Ericsson, which makes chipsand other components for mobilephone manufacturers, hassuffered since it came into being

in 2009, partly down to the declineof Nokia, a key customer.

Ericsson takes huge writeon venture to cap woeful yea

BY JAMES TITCOMB The writedown possibly signifiesan end to the joint venture, whichhas lost around 1bn in the lastthree years. The future of thecompany was plunged into doubtearlier this month when French-Italian STMicroelectronicsannounced it would look to sell itsstake. Ericsson said yesterday it

would not be buying it.Ericsson, which has had a

woeful year as large telecomsprojects have been put on hold, is

now likely to report a third-quarter loss.

CD and DVD owners will be able to copy content onto computers and music playerslegally for the first time under new proposals. Business minister Vince Cable saidbringing the law into line with ordinary peoples reasonable expectations will boostrespect for copyright. The rules apply as long as copying is for personal use.

GOVERNMENT TO LEGALISE CD C

Ofcom boss Ed Richards isholding the 4G auction

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THE LAWYER to foodie career movemust be a relatively uncommon one,or so The Capitalist thought.

City A.M. reported earlier thismonth on SJ Berwin tax solicitorLucy Gregory jumping off the legalcareer ladder to pursue a vocation incheesemongery.

Now another legal bod has

achieved entrepreneurial success inthe food industry.Helen Tse, a former Clifford Chance

solicitor, has created a range of

gluten-free Chinese sauces. Tse joined forces with her spice-lov-

ing sisters Lisa and Janet to create theSweet Mandarin range, and securedfunding with a successful appearanceon BBCs Dragons Den programme. The Sweet Mandarin cooking sauces

are now stocked in Sainsburys andSelfridges.

Tse is still busy drafting, but insteadof legal contracts she has been pen-ning a book, The Sweet MandarinCookbook, to be published in 2014.

FRIDAY 21 DECEMBER 2012

Visitors at the Citys H eron Tower cannot miss the giant fish tank residing in the lobbyThe aquarium is the largest privately owned one of its kind in Britain, and home to 67different species of fish. It was also home to two festive guests on Wednesday, whendivers donning Santa suits entered to give the tank a Yuletide spruce up.

8 cityam.com

cityam.com/the-capitalistThe Capitalist often reports on thehappenings over at spread betting

firm Spreadex, and now hears that thecompany will be moving closer to homeafter opening a new sales office inLondon Wall. Veteran traders Darren

Barton and Dave Mackay (affectionatelynicknamed the Chopper), previouslyof the likes of NatWest Markets andAmbrian, are heading up the venture.Given the pairs past record of cliententertainment and long, liquid lunches,the bars and restaurants in the LondonWall area are sure to be popping thechampagne corks in early celebration ofthe anticipated additional businesscoming their way.

Another tale of Christmas party fun in theCity has reachedThe Capitalist . The

recipient of the office party jollities this time,Leadenhall Market restaurant Chamberlains.Loyal readers of this column will recall Citybills laden with a handful of magnums of

Dom Perignon or Grey Goose. However, theowners of this bill went for the quantityover quality approach ordering a roundof 191 jaegerbombs, certainly an explosiveway to end the party. And on that note ofsocial excess,The Capitalist is downingtools for the festive period, but will beback in the New Year and in themeantime would like to wish allreaders of this page a very Mer ry

Christmas, and Happy New Year.

EDITED BY CALLY SQUIRES

Got A Story? [email protected]

Saucy new jofor ex-ClifforChance lawy

FESTIVE INTRUDERS IN HERON TOW

THECAPITALIST

Left to right: Helen and Lisa Tse with their Sweet Mandarin sauces

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TRUETT Tate, Lloyds TSBs formerglobal head of wholesale andinternational banking, is going tohead up the Australia and New Zealand Banking Groups (ANZ) New York office as chief executive andhead of institutional relationship banking America, it was announced yesterday.

Tate will take up his new postfrom 1 February 2013. He resigned

from the Lloyds board inFebruary and has over 40 years of bankingexperience. Before he

joined Lloyds in 2003,he spent 27 years at

Citigroup.

Former Lloydswholesale boss

joins ANZ in USBY CITY A.M. REPORTER

YOUNG women drivers are set to seesubstantial rises in the amount they pay for car insurance from today, aftera new EU ruling came into force.

Last year the European Court of Justice ruled that it was discriminato-ry to charge people different amountsfor insurance products based on theirgender.

The new rules are an early Christmas present for men, saidMichael Ossei of price comparison website uSwitch. Women will be infor a rougher ride though, with pre-miums set to rise by up to 25 per cent.Hardest hit will be women aged between 17 and 25 who could see pre-miums almost double.

However the ruling is set to haveunpredictable effects across the indus-try, depending on the make-up of afirms existing customer base. Adrian Webb of the female-targetedSheilas Wheels car insurance brand

Female drivers feel the pincinsurance premiums rise to

BY JAMES WATERSON told City A.M. that there will be mini-

mal variation to the rates his company charges because 90 per cent of its exist-ing customers are female.

The women who are with usalready will protect the premiumsgoing forward. It would take the bestpart of 10 years for the benefit toerode, he said.

For other companies where themale and female spread is close, thechange could be much larger.

The reason there has been differ-ences is the risk is very, very different 31 per cent of dangerous driving con- victions are young men, he added.

However there is hope for women who can prove that they are safe driv-ers through other means, such as fit-ting a GPS-enabled black boxinsurance system. The ruling will also affect some

retirement products as insurers willnot be able to take a womans longerlife expectancy into account when set-ting annuity rates.

FRIDAY 21 DECEMBER 2012 cityam.com10 NEWS

Sheilas Wheels high number of women customers could minimise price swings

IN BRIEFProvidence in landmark yearn Irish-focused Providence Resourcesyesterday hailed a landmark year forits drilling programme. Earlier this year,Providence struck oil at the Barryroe oilfield, with flow rates of 3,514 barrels aday. The junior stock market-listed firmspent up to $500m (307m) on thisyears drilling programme, in six basinsoffshore Ireland. Providence plans todrill a further three wells next year, andtwo more the year after.

WPP continues shopping spreen WPP has purchased a majority stakein Australian digital communicationsfirm Bienalto for an undisclosed sum.The FTSE 100 ad giants acquisition isthe latest in a shopping spree, whichalso includes Chinese communicationsagency ArtM and entertainmentmarketing agency Filmworks China.WPP boss Sir Martin Sorrell has set atarget of 35-40 per cent of revenuecoming from digital platforms in thenext five years. Bienalto will become

part of WPP subsidiary Wunderman.

Deutsche Telekom chief quitsn Deutsche Telekom chief executiveRene Obermann has unexpectedlyannounced he will step down at the endof 2013 and be succeeded by financedirector Timotheus Hoettges. Hoettges,50, said yesterday he was not planningmajor changes to strategy and wouldcontinue Obermann's drive of investingin the United States and Germany as thefirm battles to return to revenue growthagainst a tough economic backdrop.

Centamin resumes at Sukari min Gold miner Centamin yesterdayconfirmed that operations had fullyresumed at its flagship asset, theSukari mine in Egypt. Last week, theoperations at the mine weresuspended following a dispute overdiesel supplies and a customs requestto halt gold exports. Capital Drilling,which also works on the gold mine,said in a statement yesterday that itwould ramp up production over thecoming weeks at Sukari. Centamin

shares closed up three per cent.

Energy firms urged

to lift lid on pricesTHE UKs Big Six energy companies should be forced toreveal how much energy they have

bought and sold from themselves,in a bid to increase transparency and customer trust, MPs said

yesterday.The Energy and Climate Change

Committee, headed by Conservative MP Tim Yeo, saidthere was not enough informationabout suppliers wholesalearrangement, hitting competitionand consumer confidence.

The committee also called onthe energy regulator Ofgem to domore to fight anti-competitive

behaviour.Even before the recent reports

of wholesale price-fixing, we wereextremely concerned about the

BY MICHAEL BOW lack of transparency around wholesale prices and supplierstrading arrangements, Yeo said.

Ofgem must get its act together.It should require greatertransparency around wholesaleprices, trading and the link

between wholesale prices andsupply prices.

The MPs also said the Big Six comprised of British Gas, EDFEnergy, E.ON, nPower, ScottishPower and SSE should be subjectto an annual report from Ofgem,outlining how they made theirprofits.

A recurring theme throughoutthis inquiry has been the lack of transparency about where themoney that people pay for theirenergy goes, Yeo said. Consumers

deserve greater transparency intheir bills.Truett Tate will bebased in New York

ARE THE NEW CARINSURANCE RULES FAIR?Interviews by Jakob Villumsen

These views are those of the individuals above andnot necessarily those of their company

No, not really. I think it is fair to let insurancecompanies assess their risk. I do not quite see it asdiscrimination. It will just make things more blunt,and that does not benet the consumers.

JEN HAWES-HEWITTACCENTURE

No, I do not really think it is fair. You havedifferent groups, and different risks for them. I amconcerned that insurance companies might raisethe prices, instead of average.

DANIEL BLYTONRPS

Yes. To a certain extend at least. When I gotmy drivers license and bought my rst car, I had topay about 40 per cent more than my female friends.I think that difference was too big and a bit unfair.

ALEX REEVESXL INSURANCE

CITYVIEWS

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FRIDAY 21 DECEMBER 201211NEWScityam.com

Lack of debt financehampers hotel dealsTHE number of hotel deals slowedin the second half of the year as

the lack of debt financingcontinues continued to take itstoll on the sector, data publishedyesterday by Deloitte showed.

UK hotel transactions totalledaround 300m in the second half of the year, a significantslowdown on the 1bn reportedin the first half and 2.5bn in thesame period last year.

Some recovery in the UK hoteltransaction market was apparentin 2011...and this continued intothe first months of 2012, saidNick van Marken, global head of hospitality at Deloitte.

However, activity slowed in thesecond half of 2012 whilst thereare a number of transactions inthe pipeline, we saw very few getacross the line.

Single asset deals continue to bedominated by London wherepricing remains strong, theaccountancy firm said. Deals

BY KASMIRA JEFFORD included the acquisition of theluxury Mayfair hotel theCavendish by Singapores AscottGroup for 159m.

Outside the capital, distressedsales dominated the market.These included the sale of the

Glasgow Radisson, which was bought out of administration by Azure Properties; Hyatt HotelsCorporations acquisition of theHyatt Regency in Birmingham andNew-York-based KSL Partnerspurchase of the hotel and golf resort the Belfry.

Van Marken said: There are anumber of portfolio and singleasset transactions that arecurrently being marketed. As aresult, activity is expected to pick-up.

That said, difficulties inaccessing debt funding and thecontinued disparity between buyerand seller in terms of priceexpectation mean disposalprocesses are likely to continue to

be longer and more difficult tocomplete.

JEWELLER THEO FENNELL HALVES ITS LOSSESTHEO FENNELLyesterday said itmore than halved itslosses in the firsthalf of the year. Theluxury jewellery,which is in ongoingtakeover talks withprivate equity firmEME Capital, posteda 610,083 loss inthe six months to 30September downfrom 1.4m lastyear, thanks to costcutting measures.But sales fell eightper cent to 4.9m asthe outlook for theretail sectorremained uncertain.

Luxury home developer confirms takeoveNORTHACRE Group, the ultra high-end residential developer, yesterday confirmed it has received twotakeovers offers, one of them led by its chief executive Ken MacRae.

The Aim-listed firm, whichhelped develop the Lancasters

apartments next to Hyde Park, saidit is in preliminary talks with Law 2492, MacRaes management buyout vehicle. It has also receivedan approach from Abu DhabiCapital Management.

The discussions are at an early stage and there can be no certainty as to whether an offer for the

company will or will not be made,the group said.

Its shares surged 23 per cent onthe news yesterday to 18p, valuingthe firm at around 21m.

Northacre cut its losses before taxto 6,000 in the six months to 31 August compared with the sametime last year 3m.

BY KASMIRA JEFFORD

CHINAS largest property developerby market value is set to make its firstforay outside of the country after put-ting in an offer to buy One Finsbury Circus in the City for 152m.

China Overseas Land & Investmentis close to signing a deal to acquirethe freehold of the Grade II listedblock, designed by Sir EdwardLutyens in the 1920s for BP, thenknown as the Anglo-Iranian OilCompany. The sale comes just 18 months after

Invesco bought the 210,000 squarefoot property from Hermes RealEstate and LaSalle InvestmentManagement for 141.5m. Tenants include law firmStephenson Harwood and Alvarez &

BY KASMIRA JEFFORD Marsal, the restructuring experts.Foreign first-time buyers have been

flocking to the London office marketseeking stable assets with long-termincomes amid the uncertainty in theglobal financial markets.

Last year overseas investors account-ed for 60 per cent of total turnover incentral London of 9.1bn.

Foreign first-time buyers accountedfor a third.

In October, the property arm of Japanese telecoms firm Nippon Telegraph & Telephone Corporation bought 20 Finsbury Circus for 42.5m.

China Overseas is a subsidiary of China State Construction EngineeringCorporation. The high-end developeris listed in Hong Kong and has a mar-ket value of HK$188bn (15bn).It is being advised by CBRE.

LEGAL & General Property said yesterday it has bought a West Towerin the Docklands for 40m, markingthe third data centre site the firmhas snapped up in three months.

The property, which makes up onehalf of the City Reach developmentnear Canary Wharf, is the principaldata-hosting facility of Telstra GlobalEMEA, the UK arm of the Australiantelecoms company, Telstra.

Derek Gilby, senior fund managerat LGP, said: There have been only alimited number of data centreinvestment transaction over the last year or two and, located in one of thepremier data centre locations in thecountry and let to a strong covenant,this offers a strong, secure, long-dated and inflation hedged source of income.

L&G acquire40m tower i

the DocklandBY KASMIRA JEFFORD

Chinese property giant to make

maiden investment in the City

One Finsbury Circus was previously the headquarters of oil giant BP

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THE GOVERNMENT is forcing

transport group Go-Ahead tocompensate London Midlandpassengers for cancelled trains anddelays to services last year in apackage of benefits worth 7m.

In compensation, LondonMidland season ticket holders will be given five days worth of freetravel passes. A further 500,000cheap advance tickets forpassengers on routes servingLondon, Birmingham,Northampton, Crewe andLiverpool will be made availableover the next two years.

Transport minister NormanBaker said yesterday: LondonMidland has cancelled or delayedhundreds of services in recentmonths.

On repeated occasions, they were not able to provide enoughdrivers and some services had to be cancelled, with severe delays toservices, and they have fallen short both of everyones expectationsand their franchise obligations.

Baker added that thecompensation represented a firm yellow card for the transportcompany.

The Department of Transportalso confirmed that LondonMidland will hold the franchiseuntil September 2015, to give ittime to resolve the issues.

Go-Ahead topay 7m fordelayed trains

BY CATHY ADAMS

VOLVO Car Corporations ownerZhejiang Geely has entered the raceto take over stricken UK black cabmaker Manganese Bronze, after itemerged the Chinese company wasin talks to buy the Coventry-basedmanufacturer.

Manganese, which has been mak-ing the iconic black cabs through itsLondon Taxi Company since 1948,fell into administration in Octoberafter it was forced to pull its f lagship TX4 model following a steering boxmalfunction. Administrator PwC closed second

round bids two weeks ago. It isunderstood Zhejiang Geely has sub-mitted an offer to buy the remaining80.03 per cent of the business it doesnot already own.

It is not known whether any other buyers

Hopes rise forblack cab firmafter new bidBY MICHAEL BOW remain in the running.

PwC joint administrator Matthew Hammond was unavailable for com-ment last night.

Zhejiang Geely, which headquar-tered in the Chinese province of Zhejiang, signed a joint venture withManganese in 2006 to produce its vehicles in China for the domesticmarket.

Geely, which currently owns 19.97per cent of Manganese through itslisted subsidiary Geely AutomobileHoldings, bought Swedish car maker Volvo from Ford in August 2010 for$1.5bn (921m). Manganese manage-ment entered into talks with Geely inOctober following the product recall,in a bid to drum up support for a bailout, a move that proved fruitless. Joint administrator Matthew

Hammond previously said adminis-trators were in advanced, positive

negotiations with bidders.We are hopeful that we willsell the business as a goingconcern, he said.

AIRLINE boss David Lenigas yesterday eschewed a traditionalexecutive salary by agreeing totake home just 1 a year.

Lenigas, chairman of low-cost African airline Fastjet, will takethe tiny annual salary pluslegitimately invoiced expenses.

I am passionate about thepossibility of Fastjet's ability tochange Africa's GDP growthprofile, the airline boss said

yesterday.I have been doing business in

Africa for a number of decadesnow and this is my personal way of

Fastjets Lenigas pays himself just 1 a year... plus expenses

BY CATHY ADAMS contributing to changing life forthe better in Africa.

Lenigas added that low costtravel can be one of the greatestmotivators of economicdevelopment.

We can have a fundamentalprofound effect on thecommunities the airline willserve, he said.

The Aim-listed airline launchedflights at the end of Novemberand carried almost 7,000passengers on its maiden flights inTanzania. Earlier this week, it wasalso eyeing a move into South

Africa through buying a carrierout of bankruptcy.


David Lenigas is also executive chairman of Africa-focused explorer Leni Gas and Oil

An iconic London blackcab made by Manganese

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TM and 2012 Apple Inc. All rights reserved. Subject to availability. Limited stock on a first come first served basis. Connection subject to status, credit check, Direct Debit and 24 month minimum term contract. Allowances are monthly. Calls/texts made in UK to standard UK landlines/ mobiles, specExcessive usage policy applies. 99.99 for iPhone5 16GB. Terms apply, see o2.co.uk. Pay Monthly tariffs are going up in price. From 28 February 2013 theyll increase by 3.2% in line with inflation as at December 2012 when we made the announcement. Find out more at o2.co.uk/prices

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IN BRIEFMothercare pay irks investorsn Mothercare endured a minorshareholder mutiny yesterday as 12.8per cent of investors voted against the

retailers plans to set up a long-termincentive scheme for its new chiefexecutive. On top of a basic salary of500,000 new boss Simon Calvercould earn up to 6.3m from long-termincentives. He must break even in theUK by 2015 to get his maximum bonus,and has to invest his own money inshares to qualify for the award.

Spain waves through 2013 budn Spains parliament formallyapproved yesterday the budget for2013, which aims at reducing thecountrys public deficit to 4.5 per centof gross domestic product from 6.3per cent this year. Ministry budgetswill be slashed by 8.9 per cent for nextyear and public sector wages frozenfor a third year as Prime MinisterMariano Rajoy battles to trim one ofthe biggest deficits out of all theEurozone states.

Carnival sees profits sink deepn Carnival yesterday reported asharply lower profit as revenuecontinued to be hit by last Januarysdeadly capsizing of the CostaConcordia cruise ship, and the leisureoperator said bookings for 2013 werestill lagging last year. Shares divedaround five per cent as the marketopened. The company reported netincome of $93m (56.7m) on revenueof $2.66bn for the fourth quarterended 30 November.

HOUSE prices across the UK crept upthrough 2012, according to data out yesterday from property websiteZoopla, with London leaping furtherahead.

Mortgage lending increased againin November, the Council of MortgageLenders (CML) revealed, with the firstsigns that the Funding for LendingScheme (FLS) may be having an effect.

Home purchase loans came in at12.9bn last month, up a touch on the12.78bn seen in October.

Recent signs of modestly improv-ing housing market activity and thelikely increasing beneficial impact of the Funding for Lending Scheme onmortgage lending leads us to believethat house prices will be broadly flatover the coming months, saidHoward Archer from IHS GlobalInsight.

Some support for house pricesshould come from recent decentemployment growth and likely extended low interest rates, added

London houseprices up 28kthrough 2012

BY TIM WALLACE the economist. The average price increased 2,298 to

228,226 in the UK as a whole a oneper cent rise through this year. And London saw a 6.8 per cent

boom, taking average prices up28,471 to 499,541. The capital also saw rents rise by 0.2

per cent in November and 6.9 per centon the year to a new record of 1,104per month, LSL Property Servicesrevealed today. That again contrasts with the nation-

al picture where rents fell 0.4 per centon the month to 741 per month.

Gloomy start to Christmas asshoppers look out for bargainsRETAIL sales are barely kept pace with inflation last month,according to official figures out yesterday, with squeezed consumers waiting for discounts rather thansplashing out for Christmas.

The quantity of goods bought inNovember rose 0.9 per cent on the year, while the amount spentincreased 1.5 per cent, showing asmall rise, the Office for NationalStatistics (ONS) reported.

Over the same period pricesincreased 0.5 per cent.

But sales were flat compared with October and the amount

BY TIM WALLACE spent fell 0.1 per cent on themonth.

Online sales rose 1.4 per cent onthe month and 0.5 per cent on the year, taking the estimated averageonline weekly spend in November to711m.

Todays data shows a modestincrease in retail sales value but thereality is that this is barely trackinginflation, footfall is down and volumes are flat, said KPMGsDavid McCorquodale.

We are seeing the results of shoppers quite simply having lessmoney to spend. Many of those buying for Christmas are stretchingthemselves to do so and are

therefore seeking out and waitingfor bargains. And, in response,discounts have been available asretailers have competed hard forthe festive pound throughNovember and December.

The longer term picture issimilarly gloomy. The ONSs studiesshow retail sales largely unchangedfrom 2007 through to 2011, withonly slow growth in the last year.

Households real incomes defined as average weekly earningshaving accounted for inflation - arestill decreasing, which has led to afall in consumer buying power,especially for the squeezed middle,its report noted.

Mood across the pond lifted byupwardly revised growth data THE US economy grew faster thanpreviously estimated in the third

quarter of the year, official datashowed yesterday. Americas GDP expanded at a 3.1

per cent annual rate in the threemonths to September, theCommerce Department said, a stepup from the 2.7 per cent pace itreported last month.

Exports and governmentspending provided a lift to the data.

But the boost is likely to be lostamid slowing global demand and amove towards tighter fiscal policy

BY CITY A.M. REPORTER in Washington DC.Separate data released yesterday

showed factory activity in the mid- Atlantic region picked up this

month, while home resales inNovember were the best in three years. However, a rise in first-timeapplications for unemployment aidlast week suggested job growthremained modest.

The Labor Department said initialclaims for jobless benefits increased17,000 to a seasonally adjusted361,000, in the low end of the rangethey held before superstorm Sandy struck in late October.

The data covered the survey

period for the governments reporton December nonfarm payrolls andsuggested modest job gains.

The pace of hiring is still

disappointing, said Tanweer Akram, a senior economist at INGInvestment Management in Atlanta,adding that the pace of GDP growthin the current quarter remainsquite soft.

Separately, the National Association of Realtors said existinghome sales surged 5.9 per cent inNovember to a seasonally adjustedannual rate of 5.04m units. Thenumber was the highest recordedsince November 2009.

500450400350300250200150100500

Southern house prices are still rising

thousands,

South West England

South East England

East England

West Midlands

North West England

North East England

Yorkshire & The Humber

London

Red-pricefallingGreen-pricerising

FEWER than seven in ten trains were on time this year, accordingto Network Rail data out yesterday.

New statistics show for the firsttime how many rail services makeit to their stops early or within oneminute of the operators schedule.

Just 69.2 per cent of trains werethis punctual in the year to 8December. This compares to 91.5per cent that were punctual withinfive minutes for regional servicesor ten minutes for long distanceroutes the traditional measure of

Network Rail reveals that justseven in ten trains are on time

BY MARION DAKERS railway time-keeping.Some operators barely scraped

50 per cent punctuality within oneminute of their planned arrivaltimes. Crosscountry, whichoperates a network stretching from

Aberdeen to Penzance, posted anannual average of 48.8 per cent,

while West Coast operator VirginTrains managed 54.1 per cent.

The Institute of Directorsslammed the figures as evidence of poor value, but the Office of RailRegulation said the newdisclosures would help improveservices.


Almost a third of passengers have to wait longer than expected for their train to arrive

THE BANK of Japan delivered itsthird shot of monetary stimulus infour months yesterday, in aprelude to more aggressive actionnext year as it faces intensifyingpressure from the country's nextleader for bolder action to beatdeflation.

It also signalled setting a higherinflation target at its next meetingin January, when a new

government will be in place.Shinzo Abe, whose opposition

Liberal Democratic Party (LDP) wonSundays election, has put thecentral banks independence onthe line by calling for a binding

two per cent inflation target,double its current price goal.

Japans new government gcash boost from central ban

BY CITY A.M. REPORTER Feeling the heat, the central bank expanded its asset-buyingand lending programme by 10trillion yen (73bn) to 101 trillion

yen, a widely expected move that barely moved markets.

I take it as that the BoJ iscarrying out what we soughtduring the election step-by-step,

Abe told a party meeting.The incoming PM caused a brief

stir when he said that BoJ governorMasaaki Shirakawa had telephonedto inform him of the decision inthe morning when the policy meeting was still taking place. TheLDP later said the remark was aslip of the tongue and Shirakawatold a news conference he made

the call in the afternoon, after themeeting was over.

CONSUMER confidence in theEurozone improved slightly in thefinal month of 2012, a prominentsurvey suggested yesterday, butremains considerably below its

long run average. And a think tank focusing onEuropean politics predicted atough year ahead.

Next year is not only likely tosee domestic politics across the EUclash with the economic realitiesof the eurozone crisis and EUintegration, but also countriesincreasingly being pitted againstone another, predicted OpenEuropes head of economicresearch, Raoul Ruparel.

Eurozone consumer confideends the year in the doldrum

BY JULIAN HARRIS Despite talk of a recovery, growth is set to stall andunemployment rise across thecontinent.

Yet with the immediate crisisfading, 2013 could see Europesleaders resorting back to a routine

of kicking the can down the road,Ruparel added.Data released by the European

Commission yesterday showedthat consumer morale edged up toan index reading of minus 26.6this month, from a 42 month lowof minus 26.9 in November.

Decembers reading kept theindex substantially below its long-term average of minus 13, notedHoward Archer, chief economist atIHS Global Insight.

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FRIDAY 21 DECEMBER 201217

Obama barnewith Boehnebumps stocksUS stocks rebounded fromearly losses yesterday afterRepublican House Speaker John Boehner said he wouldkeep working on a solution to thefiscal cliff while also slammingPresident Barack Obamas approachto budget talks.

NYSE Euronext was the S&P 500s biggest gainer, surging 34 per centto $32.25 after IntercontinentalExchange said it would buy theoperator of the New York Stock Exchange for $8.2bn.

ICE shares shot up 1.4 per cent to$130.10.

Republicans in the US House of Representatives pushed ahead withtheir own plan to avoid a series of steep tax hikes and spending cutsdue in early 2013, complicatingnegotiations with the White House.Obama has vowed to veto the plan.

Investors have hoped for anagreement soon betweenpolicymakers, but progress has been slow. Boehner said heexpected to continue to work withObama, but repeated his chargethat the president and SenateDemocrats were trying to slow walk the country over the fiscalcliff.

Speaker Boehner went on the airand basically told us he doesn't like what the Presidents doing or notdoing, and the markets rallied onthat, which was kind of weird, saidStephen Guilfoyle, a trader atMeridian Equity Partners. The Dow Jones industrial average

gained 59.75 points, or 0.45 percent, to 13,311.72 at the close. TheS&P 500 rose 7.88 points, or 0.55 percent, to 1,443.69. The NasdaqComposite climbed 6.02 points, or0.20 per cent, to 3,050.39.

BRITAINS top share index steadiedaround nine-month highs yesterday, pausing within reachof the 6,000 points mark.Investors were discouraged from

pushing the market too much higher by the lack of progress by USpoliticians on a deal to avoid a fiscalcliff of planned tax hikes andspending cuts that threatens thehealth of the worlds biggest economy in 2013.

But many market players expect acompromise will be found which,combined with traditional seasonalinflows from investors taking the finalchance to boost annual profits, couldgive the stock market a fresh leg-up incoming sessions. The FTSE 100, which is up 1.7 per cent

so far this month, has posted gains forthe past nine Decembers.

People are pretty much resigned tothe fact that even if this fiscal cliff agreement doesnt happen by the endof the year, it will certainly happen by the end of January, but that optimism

is waning slightly, said Zeg Choudhry,head of equities trading at NorthlandCapital Partners. The UK blue chip index closed down

0.05 per cent or 3.3 points at 5,958.34,in sight of the 5,977.82 nine-monthintraday high set the previous session. Todays expiry of December options

could well galvanise the market intotrying the 6,000 level last seen in July 2011 given the concentration of betsaround that level.

And if it doesnt happen [today] wemay well get there next weekChoudhry added.

BESTof theBROKERSSportech PLC

14 Dec 17 Dec 18 Dec 19 Dec 20 Dec

p71.0

70.5

70.0

69.0

69.5

70.0020 Dec

SPORTECHPeel Hunt yesterdayraised its guidance fromhold to buy due tothe betting companys7.6m acquisition of UShorce racing firm eBet. Itraised the target pricefrom 70p to 78p.

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FTSE


5,980

5,960

5,940

5,920

5,900

5,958.3420 Dec

Diageo PLC


p1,8801,8701,860

1,8301,840

1,820

1,850

1,849.5020 Dec

DIAGEOJP Morgan Cazenove hasuploaded the drinkscompany fromunderweight toneutral on animproved pricing

environment in the US.Target upped to 1,775p.

888 Holdings PLC


p123122121

118119

116117

120

117.2520 Dec

888 HOLDINGSNumis raised the pricetarget for the onlinebetting company from120p to 145p, followingthe companys newpoker and casino licencein a German state. Itkeeps abuy rating.

Squire SandersThe law firm has announcedtwo appointments to itsfinancial services practicegroup. Philippa Chadwick joinsas a partner from BerwinLeighton Paisner, where she ledits project finance team. PaulaLaird joins as a banking andfinance partner from Wragge &Co, where she was head ofbanking. Laird has also held roles at Chartered Trust.

BarclaysKeshav Khanna has been appointed as a private banker,

focusing on resident non domicile clients, at the bank.He joins from Merrill Lynch, where he worked as a privatebanker for its ultra-high net worth clients.

NutmegSarah Butcher has been appointed head of compliance atthe online discretionary investment management firm.She joins from PineBridge Investments, where she washead of compliance for Europe, Middle East and Africa.Butcher has also held roles at Deloitte and the FSA.

Taylor WessingThe law firm has appointed Keith Barnett as a businessgroup director, covering real estate, finance, insolvency,construction, environment and planning. He has been

head of real estate at Taylor Wessing since 2007, andpreviously worked at DJ Freeman and Garretts.

TLA WorldwideThe sports marketing business has appointed GarethJones as its chief financial officer. He was previously itsgroup financial controller. Jones joined TLA from CenkosSecurities, and has also held audit roles at Ernst &Young.

Valence GroupThe specialist mergers and acquisitions investment bankhas appointed Akiva Mozes to its senior executive panel.He was previously president and chief executive of thediversified chemical manufacturer Israel Chemicals.

WHOS SWITCHING JOBS Edited by Tom Welsh

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

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Doddering fiscal cliff talks preventFTSE from jumping towards 6,000

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A HECTIC round of after-work parties and shopping,interspersed with a few brief moments wondering wherethe year went. Then a frenzy

of unwrapping, a battle in thekitchen with a recalcitrant turkey, thefamily lunch, a silly game, asurreptitious snooze in the middle of Pirates of the Caribbean. Christmashas its routines, but every year neednot be the same. Here are threethings that shouldnt be missingfrom your list this festive season.

INSPIRATIONChristmas entertainment is morethan reruns of The Guns of Navarone. Two thousand years of Christian

celebration have inspired some of the

NO REVIEW of the globaleconomy in 2012 could fail tofocus on Europes long-running and ever-changingdebt crisis. The continent is

emerging from its most difficult yearsince the birth of the euro. Its in a better shape than many expected, butEuropean policymakers still faceformidable challenges in 2013. The year has been bad, of course,

and the crisis has taken a major toll.Back in September 2011, theInternational Monetary Fund (IMF)forecast that output in the Eurozone would expand by 1.1 per cent in 2012. The figure was revised down to a 0.4per cent contraction in October.Unsurprisingly, the damage has beengreatest in Greece. In October, the IMFpredicted that the countrys debt-to-GDP ratio would rise to 152.8 per cent by 2017, from 144.6 per cent in 2010 even after it pushed through thelargest restructuring of sovereign debtin history. And Greece wasnt alone. In south-

ern Europe, investors dumped sover-eign bonds, as they worried more

cityam.com/for

Ireland is a great

success story. Its currentaccount surplus is now3.4 per cent of GDP

THEFORUM

Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected] Agree? Disagree? Got a sharp comment?The Forum wants you to join the debate. Top responses will be reprinted in The F

18FRIDAY 21 DECEMBER 2012

DAVID POWELL

The euro heroically survivedbut new dangers await next y

about the return of capital than thereturn on capital. The spread betweenthe five-year yield on the bonds of Spain and Germany hit 7.28 percent-age points in late July. The respectivefigure for Italy was 6.03 points.

But a strong response was quickly set in motion. European Central Bank (ECB) president Mario Draghi tried tocalm investors in late July, promisingto do whatever it takes to save theeuro. And in the autumn, the Banksgoverning council finalised details of its programme to purchase govern-ment bonds. The promise to be a buyer of last

resort for Eurozone government debt as long as the countries in questionagreed to external supervision calmed investors. Draghi stemmed

bank runs in several peripheral coun-tries, and the risk of the euro beingtorn apart overnight by intense capi-tal flight faded. As 2012 comes to aclose, the Eurozone has managed toretain its 17 members, and the valueof the euro against the dollar is closeto unchanged.

But broader macroeconomic adjust-ments have taken place in the back-ground, and the needs of peripheralcountries for external financing havedrastically declined. Ireland has beenthe greatest success story. The country registered a current account surplusof 3.4 per cent of GDP in the secondquarter of this year. This compares with a deficit of 6.7 per cent of GDP inthe third quarter of 2008.

Spains current account deficit alsonarrowed to 2.2 per cent of GDP by theend of the third quarter of 2012, downfrom 10.6 per cent in the second quar-ter of 2008. And Portugals declined to2.4 per cent of GDP from 12.6 per centat the end of 2008. Similar trends were also reported in Greece and Italy.

But now weak growth stands as the biggest threat to the future of the

Eurozone. The staff economists of theEurosystem comprised of the ECBand the national central banks of Eurozone countries lowered themidpoints of their GDP forecasts for2012 and 2013 to contractions of 0.5per cent and 0.3 per cent respectively.

Even further forward, sluggishEuropean growth will continue into

2014, with growth forecast at a mid-point of 1.2 per cent. Inflation, too, isexpected to fall below the ECBsimplicit target. The estimate for 2013stands at 1.6 per cent for the year,compared to a previous forecast of 1.9per cent. The equivalent figure for2014 is 1.2 per cent.

Subdued economic growth will like-

ly leave high Eurozone unemploy-ment rates in an even worse shape.Unemployment now stands at a whopping 26.2 per cent in Spain; 26per cent in Greece; 16.3 per cent inPortugal; 14.7 per cent in Ireland; and11.1 per cent in Italy. Low growth andinflation will also leave high levels of government debt vulnerable toshocks, and open to questions of sus-tainability. This sorry economic situation is like-

ly to fuel protests across the affectedcountries, as the unemployed clam-our to return to work. Social unrestmay reinforce concerns about insolvency. Some electorates are increas-ingly opposed to the spending cutsrequired to put their governments budgets back into the black.

In 2013, these medium to long-termissues will return to the minds of investors. Even once a sustainablesolution is found for Greece, and evenafter next years elections in Germany,the Eurozones troubles will be farfrom over. David Powell is a senior economist at

Bloomberg.

worlds greatest art. If you prefer totake your Christmas story with a bitmore edge than Dickens offers, why not head over to the Queens Gallery to contemplate Bruegels brutal,piercing Massacre of the Innocents?Or pop into the National Gallery as a break from your last-minuteshopping and experience the eeriemajesty of Piero della Francescas

Nativity, with its choir of angels

singing over an infant Christ, nakedon the ground. Or theres always thatirresistible moment in A CharlieBrown Christmas where Linus recitesfrom the King James Bible.

If you take your Christmas withoutreligion, try Horaces wintry ninthode from 32BC there is no better written invitation to uncork the goodstuff when the snow starts falling, orto enjoy the pleasures of love while you are young.

CHARITY Your response to our Christmasappeal raised over 1m, so thisscarcely needs saying. Thanks to yourhelp, more entrepreneurs in Africa will be given the chance to create

wealth for their families next year.

Charity is not just given online butalso, as it were, hand-to-hand. Thatspirit of kindness to one another can be hard to maintain toward ourrelatives by the end of a longChristmas afternoon. At such times, Iturn to Marilynne Robinson, a greatmodern writer who dramatises theunfashionable challenge of virtue.Nassim Taleb of Black Swan fameprefers the Roman stoics. This year, when a cousin lets you down in acrucial Pictionary heat, just breathedeeply, reach for the brandy andremember that Christmas only comesonce a year.

PEACEIt Came Upon A Midnight Clear is my

favourite carol. Its lyrics warn that

the angels who visited the shepherdsat the first Christmas are still singing, but our wrangling drowns them out.It reminds me of the mediaevalhermit Richard Rolle. After years of solitary prayer, he claimed he wassinging in the celestial chorus whilestill alive. Christmas is not just aboutcelebration with family and friends.Its also an opportunity to turn off the daily hubbub for a moment. Wemay not hear the angels singing, but we all deserve to enjoy a littletranquillity.

However you choose to spend yourChristmas, may it be a merry one.Heres to a healthy and prosperousNew Year.

Marc Sidwell is managing editor of City

A.M.

THE LONGVIEW

MARC SIDWELL

Three messages to warm your spirits during the hectic Christm

MORNING UPD A .M.

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19FRIDAY 21 DECEMBER 2012

The Forum is open for you to take part. Got a sharp comment onone of todays columns? Do you have another subject you wantto share your opinion on? We want to hear your views.Email [email protected] or comment at cityam.com/forum

The Russian way[Re: Russian business stereotypes need to be consigned to the distant past , yesterday]For hundreds of years, Russia was part ofEurope and the wider internationalcommunity. Communism was a shortdiversion and, since 1991, the countrysintegration has become more and moreobvious. On the one hand, this means theWest must better understand Russias ownspecific cultural peculiarities. On the other,Russian businesses must more activelyintegrate themselves into internationalmarkets. Oleg Deripaskas article is a stepforward especially his willingness to dealwith some challenging perceptions. But, as anative Russian speaker in London, it is tooearly to claim victory over stereotypes. Dr David Herzog

Green industry[Re: Green energy subsidies are failing to deliver cheap low carbon power , Thursday]Its all very well having well-meaning greenenergy targets but, if they involve front-loading the cost onto consumers, we have aproblem. The general tenor of Europeanenergy policy has been to discouragecarbon emissions by making them moreexpensive. Theyre therefore offshored tocountries which are not covered by the samerestrictions thereby destroying themanufacturing base of Europeaneconomies. The US, on the other hand, hasmanaged to lower its carbon emissions bymaking energy cheaper, largely throughshale gas. The country is now undergoing amanufacturing renaissance. Martin Cooper

TOP TWEETSToo much choice in the energy market? Letsalso cut the number of books in bookstoresand beers in pubs to help bewildered people.@MarkJLittlewood

A budget with a 75 per cent levy on incomeover 1m (814m) has been ratified byFrance. What will happen to its businesses?@dylsharpe

London is the most visited city on earth 16.9m people this year. Its also the mostpopulous city in Europe.@MayorofLondon

2013 will be a make or break year forGreeces future as a member of theEurozone.@sunkyujacklee

Will 2012 be remembered by the public asa good year for the coalition government?

YESIts been a tough year for so many people the cost of livingcontinues to rise and the economy continues to flat-line at best.Given that background, it might seem odd to argue that 2012 hasbeen a good year for the coalition. But it has. Indeed, I would arguethat 2012 is the year we rediscovered our self-confidence as anation. And most of that is down to the enormous success of theOlympic and Paralympic Games almost universally regarded asthe greatest Games ever. Despite the difficult economic climate, theUK showed to the world that its still capable of delivering a massiveevent in a spectacular way. Theres also been some economic lightat the end of the tunnel. We are right to celebrate the growth inprivate sector jobs. The coalitions drive to encourage this seems tobe bearing fruit, and it will hopefully facilitate ongoing recovery in2013.David Skelton is deputy director of Policy Exchange.

David Skelton

NOGraeme Cooke

This year will be remembered for the double-dip recession almostunthinkable 12 months ago. The coalitions economic strategy took amajor hit with the omnishambles budget, which quickly unravelledas taxes on pasties, caravans and grannies dominated the news.More seriously, the UK economy remains worryingly weak, withgrowth and wages still stagnant. While Michael Goves star shoneeven brighter, the governments domestic agenda drifted, withdecisions on childcare and social care kicked into 2013. The dynamicsof coalition politics seem to be doing damage to both partners, withHouse of Lords reform and the boundary review both blocked aseach side cancelled the other out. Ukip moved from the fringes ofBritish politics towards the mainstream, overtaking the Lib Dems inthe polls and causing much concern on the Tory backbenches.Graeme Cooke is research director a t the Institute for Public Policy Research.

RAPIDresp onses

For centuries, Christmas was a mixof new beliefs about baby Jesus andold desires to get your rocks off oncea year.In the Middle Ages, some Europeancommunities dressed up as animalsat Christmas and performed lewdacts with one another. Thereemerged a Lord of Misrule, who would make people do hilariously humiliating things. And of coursethere was gluttony. One Christmas,Richard II held a party for 10,000 peo-ple, for which 2,000 oxen wereslaughtered and 200 tonnes of wine were served.

Then came the Puritans in the sev-enteenth century, and the excessesof Christmas were trimmed. OliverCromwell stamped his boot onChristmas debauchery. It was laterstill, in the moralistic Victorian era,that the idea of Christmas as a quietfamily affair emerged.

So todays eco-saddos are notdefending the true spirit of Christmas, but rather the PuritanicalChristmas of relatively recent times.But with one important difference.Cromwells attack on Christmas waspopular because it was seen as anattempt to rein in the behaviour of the f ilthy rich. Todays miserabilists, by contrast, attack ordinary folk rather than kings for living largeover the festive season, which makesit unlikely theyll ever be popular.

So let the lords of misrule, gluttony and booziness reign this Christmas,as they did for centuries. Brendan ONeill is editor of spiked online.

BRENDAN ONE

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E VERY December, eco-miserabilists andanti-consumeristcurmudgeons attack peoplefor indulging in Christmas-

time debauchery.Fancying themselves as experts on

Christian festivals, these killjoysinform the moronic masses that boozing, overeating and splashingout on pressies is not whatChristmas is supposed to be about.Christmas, they declare, is meant to be a time of reflection and goodwill. As the Scrooges of the No ShoppingDay outfit put it, thanks to con-sumerism we have all become soul-less shoppers and partiers, and inthe process have forgotten thedivine humility of the manger. Butthese party poopers dont know their history. Because the origins of Christmas lie precisely in debauch-ery and indulgence, not humility. Todays warriors for real

Christmas values would have us believe that, for the best part of 2,000 years, people celebratedChristmas by being nice andrestrained. Not so.

Christmas has its origins in the fes-tival of Saturnalia, a stunningly debauched Roman festival whichculminated in the Feast of theUnconquerable Sun on 25December. That day was a celebra-tion of the resurgence of the Sun fol-lowing the Winter Solstice, and it was mental, properly Bacchanalian. There was role reversal, with mas-ters waiting on their servants, whilemen dressed as women and every-one ate rich foods and took part infertility rites (they had sex). When Christianity became more

widespread, it co-opted this old festival. It turned 25 December from afestival celebrating the return of theSun to one commemorating the birth of the Son. But much of thesauciness of Saturnalia remained.

Dont be a miseFestive decadenhas a fine herita

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FRIDAY 21 DECEMBER 201221CITYA .M.GUIDETOGIVERScityam.com

CITYA .M.

Our guide to20 of the worldstop charitabledonors

GUIDETOGIVERS2 0 1 2

W ELCOME toCity A.M s second annual Guideto Givers, bringing to the limelight business individuals and organisationsthat have donated not just their resources, but also their time and effort towards improvementsfor those less fortunate than themselves.

As belts are being tightened, public charitablespending is understandably at a significant low point, putting emphasis on private sector giving.

This years guide reveals our top 20 list of privatesector foundations and trusts from around theglobe, taking into consideration spending and theimplementation of grants. Keen to highlight thealtruism of the City, we have also put together a listof 10 City of London donors.

The lists have been compiled after speaking toseveral charity industry bodies, in addition to anumber of the givers themselves. The donationfigures for 2011 have been taken from eachfoundations annual financial statement, and thenumbers have been verified by KPMG.

With any such list, our Guide to Givers is notexhaustive. Any thoughts or improvements from any industry experts or individual donors for futureeditions are, of course, welcomed.

One or two organisations have been excluded when it has been deemed that the money givenaway is in some way related to the groups main business.

While on the subject of charity, we would like tothank all those who have responded to the City A.M Christmas appeal so far and have made a donationto the microfinance charity Opportunity International, which helps build businesses andencourages secure saving in Africa. So far the appealhas raised over 1m, a figure that has surpassedexpectations.

We hope you enjoy the guide.

CITY A .M. has compiled the rankings of the charity sector's top givers. has verified the donatio

Researched and compiled by Tom Shep

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Novamedia/Postcode Lotteries started the DutchNational Postcode Lottery in 1989 to raise money forglobal charities. Headed by chief executive BoudewijnPoelmann (pictured), the organisation now runs fiveseparate charity lotteries across Europe, includingBritains Peoples Postcode Lottery.Since inception, the lotteries have given 4.9bn(4bn) to over 240 charities, including UNICEF, WarChild and Greenpeace, as well as providing publicity.In 2011, the organisation gave 508m. 20 per cent ofevery ticket sold by Peoples Postcode Lottery goes tocharity, with funds supporting causes in GreatBritain. Poelmann is chairman ofCity A.M.Recent projects: 7m to Oxfam to connect remoteareas of north Uganda to the internet.

RACHEL FINDLAY

FRIDAY 21 DECEMBER 201222 cityam.comCITYA .M.GUIDETOGIVERS

I T IS widely recognised that this isa tough time for the charity sector in the UK. Publicdonations to charities have fallen by 20 per cent in real terms in thepast year, with 1.7bn less beinggiven. 81bn in spending cuts willalso have far-reaching consequences, with a third of charities funding(13.9bn) currently coming from thegovernment. These changes arehitting charities hard, with one in10 facing closure in 2013.

In times when funding is scarce,the role private foundations play becomes increasingly important.Private foundations have a uniqueposition: decisions are made by trustees who arent accountable toshareholders or the public, meaningtheir funding is independent,

flexible and can be redirected toaddress the areas of greatest need.

One of the greatest advantages of private foundations is their ability totake risks. Accountable only to theirtrustees, they can fund risky andearly stage projects. Charities needto find new ways of tackling socialproblems they need to innovate but finding public sector funding todo this can be difficult.

Private foundations can fund apilot programme to identify whether the approach works. If itdoesnt, then lessons can be learnedand future programmes stopped; if it does, an evidence base has already been built and other funders canhelp to fund at scale. Impetus, forexample, invests in early stageorganisations that are ambitious togrow. In 2008, it invested inIntoUniversity, which engages youngpeople from disadvantaged backgrounds to attain a university place and other chosen aspirations, by offering long-term, out-of-schoolstudy support. Prior to Impetusinvestment, IntoUniversity operatedon one site and helpedapproximately 700 people. By March2012, it had expanded to three sites

and helped around 12,100 people.Over this time, the charitys incomehas grown from 0.16m to 1.84m .

Private funders also fundgrittier issues or those that aredeemed to be political, such asasylum seekers, domestic violence,offending and human rights. Thesecauses are harder to sell to donorsand often struggle for funding. Forexample, the Diana Memorial Fundsupported the Prison Reform Trustto dramatically reduce youthcustody over a period of five years.

Finally, with many charities facingthe withdrawal of statutory funding,private funders play an importantpart in deciding the future of theseorganisations. Each foundationneeds to make a decision based onthe strength of each charity and the

context in which it is working. If thecharity is strong, privatefoundations can offer a lifelineduring tough times.

With the various roles privatefoundations can play, intelligentfunding has never been moreimportant. Private foundations needto be well informed about theissues they are funding and thepolicy changes taking place. They need to undertake detailed duediligence before a funding decision.Most importantly, foundations must work together to recognise whatothers are doing and avoidduplication, and as a larger body,raise the profile of the issues andorganisations they are supporting.

Rachel Findlay is head of funder effectiveness at New Philanthropy Capital

Private philanthropy is more crucial than ever

20 of the worlds largest do3 NOVAMEDIA / POSTCODE LOTTERIESNetherlands

413m

The Bill and Melinda Gates Foundation was formedin 2000 through the merger of the William H.Gates Foundation and the Gates LearningFoundation, adopting their previous agendas ofimproving global health and education.With offices in the US, India, China and UK, thefoundation has a global reach of over 100 countriesand total assets of $34.6bn (21.4bn), making itthe largest philanthropic organisation in the world.Last year the foundation gave away grantpayments of $4.4bn.The foundation is led by chief executive Jeff Raikesand co-chair William H. Gates Snr, under thedirection of Bill and Melinda Gates and WarrenBuffet. In 2011, Bill Gates spoke at the G20 summit,the first philanthropist to do so. I got the strongimpression that the leaders are very sympatheticto the case that aid budgets should not be cut,even as governments reduce their spending, hewrote in his 2012 Annual Letter. However, this willbe possible only if their constituents understandthat aid, which is less than 1 per cent of the budgetin most countries, has a significant impact onpeoples lives.Current projects: Providing internet access inlibraries of emerging countries. Helping farms inAfrica and South Asia boost incomes.

BILL AND MELINDA GATES FOUNDATIONUS

2.7bn

Founded in the will of American businessmanand pharmaceutical philanthropist Sir HenryWellcome in 1936, the Wellcome Trust fundsscientific studies, biomedical research and hasinfluenced health policy across the world.Based in London, the Wellcome Trust has netassets of 12.4bn and donated 642m in 2011,with focus towards research concerned withhuman and animal health.Sir Henry could hardly have imagined howbiomedical science would progress and changein 75 years, wrote director Mark Walport(pictured) in his 2011 Annual Report. We willcontinue to fund excellent researchers who willuse all the tools at their disposal to make newdiscoveries, develop better treatments andimprove health for people across the world.The trust also dedicates itself to the publicunderstanding of medical science and history,and has hosted a series of exhibitions at itsaffiliated museum, The Wellcome Collection.Recent projects: MRI scanner small enough touse in neonatal intensive care units. Largestever clinical trial of patients hospitalised withsevere malaria - which led to revisedguidelines on the treatment of the disease.

2 THE WELLCOME TRUSTUK

642m

The Eli Lilly and Company Foundation was set up as aphilanthropic arm of American pharmaceutical giantthe Lilly Company in 1968. The foundation aims toimprove healthcare in low-income countries, aidscientific research and enhance US public education.Based in Indianapolis, the foundation has focused onimproving the understanding of chronic and non-communicable diseases such as diabetes, cancer andmental health. It has also provided hunger relief,disaster relief and has supported communitydevelopments in Indianapolis. In 2011, the foundationgave $597m (368.2m) towards these causes.Recent projects: Indiana Science Initiative aimsto improve scientific teaching in the state.Improving education for underserved children.

4 ELI LILLY AND COMPANY FOUNDATIONUS

368.2m

Established in 1936 by a gift of $25,000 (15,424) fromEdsel Ford, son of motoring pioneer Henry Ford, theFord Foundations founding charter stated that theresources should go towards scientific, educationaland charitable purposes, all for the public welfare.In 2012, the foundations remit has been stretched toinclude the promotion of human rights, economicfairness and supporting sustainable development, whilethe reach of the organisations philanthropic arm hasalso grown, with projects in North America, LatinAmerica, Africa and Asia. In 2011, the foundation gavegrants of $413m. Luis A. Ubinas (pictured) is thefoundations ninth president.Recent projects: Alleviating poverty caused bythe early marriage of girls.

5FORD FOUNDATION

US

254.7m

1

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