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BUSINESS WITH PERSONALITY

RBS: we didnot gain fromLibor fixingRBS did not make any money fromits traders attempts to fix key inter-bank interest rates, the investmentbanks incoming boss claimed yester-day, meaning the bank took a 390mfine for wrongdoing that was noteven beneficial at the time.

It came as outgoing head JohnHourican, the only senior executiveto leave over the scandal, apologisedfor failing to spot the problem soon-er, and his replacement Peter Nielsensaid nobody had thought Libor couldbe fixed.

Nielsen said that although tradersmanipulated Libor submissions tobenefit their own positions, theyoften harmed other trades in thebank and so left no net gain for RBS.

In many cases some of therequests would have had an effectthat we could not say benefited thebank, he told MPs and peers on theParliamentary Commission onBanking Standards. They may havebenefited one traders portfolio atthe expense of anothers.And he said Libor was never seen as

a possible weakness: Senior manage-ment thought it was a mathematicalimpossibility.

Meanwhile RBS chairman SirPhilip Hamptondefended chief execStephen Hesters paypackage, arguingHester is paid mod-estly relative toother peopledoing thesejobs.

EUROPEAN authorities have unveiledstrict plans to curb the pay ofLondons alternative fund managers,in a move which could see theircompensation treated in the sameway as that of bankers.

The proposals, laid down by theEuropean Securities and MarketsAuthority (Esma) yesterday, targetthe bonuses of senior executives athedge funds and private equity fundsto bring pay controls in-line with theincreasingly stringent remunerationpolicies of City banks.

Wall Streets colossal hedge fundindustry, worth some $1.6 trillion inassets, is also set to be hit by therules, as Brussels seeks to clampdown on overseas managers whomarket their funds to Europeaninvestors. The two policies will add toworries that control of City rules ismoving inexorably to the EU.

Esma chair Steven Maijooryesterday said the guidelines willhelp promote prudent risk-takingbut critics say the rules are a badfit for the industry.

The UKs Financial ServicesAuthority will now be tasked withmaking the proposals fit with UKlaw. It is set to launch a consultationon the proposals later this month.

The rules will restrict how andwhen managers can take their

bonuses to make them more likebankers bonuses.Esma says deferred bonuses should

be paid out over a three-to-five year

www.cityam.com FREE

period, with firms encouraged toconsider even longer delays formembers of management.

Its like trying to impose rugbyrules to a football game, hedge fundadviser Joe Seet, senior partner at

Sigma Partnership said.If the FSA takes on the entireguidance then a lot of these guys aregoing to move to Singapore.

The pay curbs are in response to ahotly contested directive laid in July2011 to regulate alternative funds.

The Alternative Investment FundManagers Directive is to beimplemented by 22 July, giving UK

regulators a tight timetable.The power grab from Brusselscomes as an influential group ofcentral bankers and regulators

yesterday launched a separateinitiative to make all fund managerpay dependent on performance. TheGroup of 30, which includes formerEuropean Central Bank presidentJean-Claude Trichet and Lord Adair

Turner, has called on state regulatorsto propose new guidelines to linkbonuses to a three-year performancetimeframe.

WHY THE LATEST MODEL IS THE BEST YET

BY TIM WALLACE

FTSE 100 6,277.06 +13.13 DOWM13,971.24 -21.73 NASDAQM3,192.00 -1.87 /$ M1.57 -0.01 / M1.17 -0.01 /$ 1.34 unc

BY MICHAEL BOW

BRUSSELS TAKES

AIM AT FUND PAY

THE MIGHTY MINIISSUE 1,817 TUESDAY 12 FEBRUARY 2013

HORSEMEATSCANDALSee Page 4 and the Debate, Page 21See Page 25

Certified Distribution

from 26/11/12 to 30/12/12 is 127,678

IM TOO FRAIL TO CARRY ON POPE RESIGNATION SHOCKS THE WORLDPOPE Benedict XVIannounced yesterdayhe will step down ashead of the CatholicChurch at the end ofthis month, becomingthe first pontiff toabdicate from therole since the 15thcentury.The 85-year-old Pope

told his cardinals thathe no longer had themental or physicalstrength to fulfil hispapal duties, and thathe would leave thepost on 28 Februaryafter almost eightyears in the Vatican.His replacement willbe elected by a groupof senior cardinals.

MORE: Page 5

FORUM: Page 21

MORE: Page 3

Stephen Hesterspay packet wasunder scrutiny

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[email protected]

Follow me on Twitter: @allisterheath

NASDAQ OMX Group recentlytalked with private equity firmCarlyle Group about taking thetrans-Atlantic exchange operatorprivate, but the talks broke down

because of price disagreements,according to people familiar withthe matter.

Carlyle initiated the discussionsaround three weeks ago and was inearly stages of due diligence whendifferences emerged, ending talks.

Management at Nasdaq feelsthat the company is undervaluedcompared with its peers, twoseparate sources said. Both firmsdeclined to comment yesterday.

Nasdaq itself has been active onthe acquisition front, most recentlyproposing to buy Thomson Reutersinvestor relations, public relationsand multimedia services units.Nasdaq chief executive Bob Greifeldalso recently said he would consider

bidding for Euronext, the operatorof the Paris, Amsterdam, Brusselsand Lisbon stock exchanges, if it

were put up for sale.Exchanges have been under

pressure due to several years ofdeclining trading volumes amidmacro-economic uncertainty andlong periods of low market

volatility. However Nasdaq hasplaced an emphasis on diversifyingaway from transaction-basedrevenues.

Nasdaq could

not agree salewith CarlyleBY CITY A.M. REPORTER

Money laundering checkto slow down Cyprus cashCYPRIOT banks will face independ-ent money-laundering investigationsbefore getting hold of any Eurozonebailout funds, the Eurogroup offinance ministers said yesterday.

We agreed that an independentassessment conducted by a privatesector firm is required, said JeroenDijsselbloem, at his first meetingheading up the Eurogroup, after tak-ing over from Jean-Claude Juncker.

Cypriot leaders agreed to thedemands, which will delay the17bn (14.5bn) package they saythey need until at least March, thenext time the 17 euro area financeministers meet.

Well try to reach a decision inMarch, Dijsselbloem promised. Butjust a few weeks ago in January theDutch career politician said: I dontthink that we will come to a decisionon Cyprus in a short time I alsodont think thats necessary.The Eurogroup president also

delayed a firm judgement on thequestion of a bail-in, where deposi-tors and investors in Cypruss bankswould foot some of the costs of keep-ing the institutions alive.This could go some way to assuag-

ing fears that bailout funds would goto Russian oligarchs, but Cypriotfinance minister Vassos Shiarly saidthe likelihood of the funds going to

EDF seeks state backing on siteEDF Energy has asked the Treasury toguarantee some of the costs of the newnuclear reactors it will build in the UK, ina move likely to spark controversy for agovernment that has pledged not toprovide public subsidies for the industry.The French companys plannedmultibillion-pound nuclear power stationat Hinkley Point, Somerset, was one ofthe UKs top five infrastructureprojects, and as such could be eligible fora state-backed guarantee, a personfamiliar with the matter said.

Companies hit by Venezuela moveColgate-Palmolive, the toothpaste andsoap maker, will suffer a one-off $120m(76.7m) loss as a result of Venezuelasdecision to devalue its currency, theBolivar, by 32 per cent, a move which isalso posing a threat to the earnings ofother US and European multinationals.

App allows sending funds abroadFacebook users will soon be able to sendremittances directly to friends almostanywhere in the world through a newonline app, Azimo, developed by a UKstart-up company.

Firms leave growth funds on tableThe number of companies walking awayfrom the Regional Growth Fund hasnearly doubled since the autumn, while100m of undistributed cash has beendiverted into a rescue fund.

Barrister faces jail for evading taxThe crackdown by HM Revenue & Customson middle-class tax dodgers received aboost yesterday with the conviction ofsenior barrister Rohan Pershad for failingto pay more than 600,000 in VAT.

Virgin Media delays bonus paymentsVirgin Media, the pay-television businessbeing bought by US giant Liberty Global, hasinvited staff to delay their bonuses so thatthey can avoid the top rate of tax. Thecompany has told senior executives due toreceive a bonus in March that they canpostpone payment until after 6 April, whenthe top rate of income tax will fall from 50per cent to 45 per cent. The move is expectedto save around 150 executives an average of7,000 each, but to cost the Treasury morethan 1m. Though the move is legal, MPscondemned Virgin for playing the game.

Novo Nordisk stung by FDA delayThe outlook for Novo Nordisks position inits most important market, the US, turnedgloomier after the US Food and DrugAdministration said it couldnt yet approvethe companys latest insulin products.

Judge clears Hostess to sell TwinkieHostess won permission to place aselection of its cake and bread assets,including the Twinkie brand, on theauction block as the baking firm sells offits business piece by piece.

EU BANKS may have to implementnew liquidity rules a year earlierthan expected as Europeanlawmakers try to push forward theproposals, it emerged yesterday.

Regulators last month decidedto delay the liquidity coverageratio (LCR), phasing it in graduallyfrom 2015 to 2019 on the basisthat a cut off date of 2015 would

be too sharp and could damagelending to households and

businesses.But the European Parliament

wants to it be accelerated andIreland EU presidents currently

wants to bring the date forward to2018, according to documents seen

by Bloomberg.The LCR is a buffer of liquid

assets which banks will hold tomake sure they can survive a 30-day squeeze on funds.

The idea is to make sure theycan rely on their own resources

before having to turn to centralbanks for aid.

But building up this buffer takesaway resources which could beused for lending, hurting theeconomy.

That means there is a balance tobe struck, with the MEPs nowfavouring tighter bank regulationin spite of the fears over lendingeconomic growth.

EU banks could

face faster risein cash buffer

Jeroen Dijsselbloem succeeded Jean-Claude Juncker to head the Eurogroup

2 NEWS

BY TIM WALLACE

BY BEN SOUTHWOOD

To contact the newsdesk email [email protected]

IF you agree to sell something, it is

your responsibility to ensure thatthe product or service you deliveris exactly the one you and your

customer agreed to. That applies tofinancial products just as much as tofood. That is why I disagree withthose who believe that the horse

meat contamination row is a stormin a tea cup, little more than a joke.The issue is one of tr ust and of thesanctity of contracts, both of whichare vital to capitalism.Those suppliers who decided to

secretly pass off horse meat for beefconned their customers. They need tobe sued and brought to book. Theydid wrong and should not be allowedto get away with it. They have dam-aged trust in the modern globalisedfood chain, which is a tragedy giventhat it has helped make varied andgood quality food available to mil-

EDITORSLETTER

ALLISTER HEATH

Horse row no laughing matter but NHS scandal even worse

TUESDAY 12 FEBRUARY 2013

lions of people, especially the poor.Large buyers of meat products suchas supermarkets also need to fur-ther up their game and routinelyemploy DNA tests to prevent this non-sense from happening again.

But while it is an important storythat needs to be tackled, and no jok-ing matter, the horse meat row has-nt killed anybody. It is certainlyridiculous that the story has a muchgreater public profile than the deadlyand still growing scandal engulfing

the NHS. What has happened insome of Britains hospitals, asdetailed in the shocking Francisreport last week, is a genuine catas-trophe, the sort of scandal that oughtto be epoch-defining and lead to dras-tic changes in policies and attitudes.Thousands of people have died in

vain, often in horrid, inhumane con-ditions; yet more hospitals are beingdragged into the fray, with 14 hospi-tals now being investigated.

In fact, this affair is a far greaterscandal than Libor, itself a very seri-ous matter which will hopefully endin criminal prosecutions and jail sen-tences for perpetrators. While a dis-gusting betrayal of wholesalecustomers of financial services and amajor blow to the City, the Libor rig-ging affair probably had very littleimpact on consumers, and didnteven actually bolster the bottom line

BETTER NEWS FOR ONCEBritains economy continues to stag-nate, dragged down by a frightening-ly long list of problems. But there area few signs of (relative) hope. Theeconomy is probably no longershrinking and appears to be on aslight improving trend. As Global

Insights Howard Archer points out,the OECDs leading indicator for theUK edged up to 100.7 in Decemberfrom 100.6 in November, 100.5 inOctober,100.2 in September, 100.0 inAugust, 99.7 in June and a low of 99.2in early-2012 and late-2011. It had pre-viously trended down from 101.5 inearly 2011. Other evidence is contra-dictory, of course, but most doesntsuggest another savage contractionin the first quarter. Fingers crossed.

of the likes of RBS (as opposed to thatof some individual traders).Tragically, the callous incompetenceof some staff within the MidStaffordshire NHS trust led to anatrociously large numbers of deaths.

So the real question remains: whyhas nobody been prosecuted for neg-

ligence at the NHS? Why has nobodyresigned? Astonishingly, the chiefexecutive retains his job. Why are theLibor and horse meat scandals stillgrabbing a disproportionate share ofthe national conversation, andattracting all the venom, while themass slaughter in some hospitals isbeing met with astonishing cool?Where is the outrage about rewardsfor failure, high pay and the rest ataffected hospitals? Where are the tel-evised grillings by MPs? There issomething wrong here. This is notime for double standards.

these depositors had been grosslyexaggerated.

The bail-in is unlikely to happen andwe will not accept it under any circum-stances, Shiarly added. This came inresponse to reports that alleged up to10bn of the total package might comefrom bank stakeholders rather thanexternal lenders.

Olli Rehn, European Commissionerfor economic and monetary affairsalso firmly repudiated the reports, say-ing: There are no proposals of theEuropean Commission along the linesdescribed in the article.

Still, worries about money-launder-ing and giving a boost to Russianmoney launderers are not the onlystumbling blocks holding back bailoutnegotiations.The Eurogroup is worried that with-

out structural reform the smallMediterranean state will not be able toafford to repay the loans almost asbig as the countrys yearly output.

But Cypruss Communist partyrulers have fought against demandsthey sell off state assets to put theirfinances in a more sustainable posi-tion for the longer term.MORE: Page 18

WHAT THE OTHER PAPERS SAY THIS MORNING

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GOLDMAN Sachs has promoted

Gregg Lemkau to jointly head itsglobal mergers and acquisitions(M&A) team and Gilberto Pozzi tolead its M&A coverage in Europe, theMiddle East and Africa (EMEA).

Lemkau, head of M&A for EMEAand Asia Pacific, will work with GeneSykes who has been sole head of thedivision since Yoel Zaouis departurelast year, a spokeswoman said.

Pozzi, who has been co-head ofGoldmans global consumer retailgroup since 2010, will retainresponsibility for many of his clientsin the sector and take on a broaderrole across countries and industriesin the EMEA region.

Lemkau, who became partner in2002, previously held positions asglobal co-head of the technology,media and telecom group and servedas chief operating officer for theinvestment banking division.

Pozzi, who made partner in 2008,will be replaced by FX de Mallmannwho will be co-head ofthe consumer retailgroup with KathyElsesser. He will alsocontinue as head ofinvestment bankingservices in EMEA.

Goldman Sachsnames LemkauM&A co-chief

BY CITY A.M. REPORTER

RBS bosses yesterday apologised forthe Libor fixing scandal, sayingsorry for failing to spot the crisisand for being too slow to rectify theproblem once it had been identified.

Chief Stephen Hester told MPsand peers he is pushing throughmajor changes at the bank,refocusing every business unitaround customer service whilerestructuring the business.

But the chairman of the bank stillhad to defended the chiefs paypackage against scepticalparliamentarians, arguing it ismodest by industry standards.

Hester receives 1.2m in basicsalary and 400,000 in pensioncontributions. He can also get twicehis salary in bonus and 3.5 times inlong term incentives, though he hasnot received a bonus since 2010 andhas said he will not take it this year.

I dont think it is hyperbole tosay this is one of the most diff icultjobs in world business, it was thebiggest banking failure in theworld, said Sir Philip Hampton.

These are large sums, but well

RBS bosses saysorry for the

Libor scandalBY TIM WALLACE below the market rate.Meanwhile outgoing investment

banking boss John Hourican saidthat many business leaders talkabout accountability without takingany action on it.

I am very sorry this happened onour watch. I accept responsibility forthe failings, Hourican said.

He hopes the departure of such asenior boss will shock any sceptics atthe bank into changing their ways.

I have told staff they should notwaste my death it is very importantthe company and everyone in itstands up and feels the anger aroundthis issue, around the industry,around out company.

The most serious failings were fixed in a matter ofweeks, but on different levels the improving of the

Libor process is still going on to this day. Stephen Hester

It just didnt occur to anyone this was a rate thatcould be fiddled. It turned out there was a cartel ofpeople across banks who thought they could fix it.

Johnny Cameron

The bank was in too many places doing too many

things with too little capital. I would accuse itspredecessor organisations of strategic tourism. John Hourican

Royal Bank of Scotland Group PLC11Feb5 Feb 6 Feb 7 Feb 8 Feb

332.5

335.0

327.5

330.0

337.5

340.0

342.5

345.0 p 340.3011 Feb

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RBS Stephen Hester, ex-investment head Johnny Cameron and outgoing boss John Hourican

WHAT THE BANKERS SAID

Gregg Lemkau willbe co-head ofglobal M&A

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THE ACCOUNTING watchdog hasopened a probe into former FTSE 100software firm Autonomys accountsfor the years leading up to its contro-versial takeover by Hewlett-Packard.

The Financial Reporting Councilsaid yesterday it will look atAutonomys reporting between1 January 2009 and 30 June 2011,shortly before the $11.1bn (7bn)offer from HP was revealed.

HP later blamed the firm for an$8.8bn writedown, claiming thatAutonomys management had inflat-ed the value of the company.The US tech giant said in

December that the USDepartment of Justice andthe Serious Fraud Officewere examining its claimsof accounting impropriety.

Mike Lynch, founderand former chief exec-utive of Autonomy,has strenuouslydenied HPs claims.A spokesperson for

Autonomys formermanagement yester-

Watchdog willprobe accounts

for AutonomyBY MARION DAKERS day welcomed the FRC investigation,saying it would be the first independ-ent third-party scrutiny of HPsallegations.

As a member of the FTSE 100 theaccounts of Autonomy have previous-ly been reviewed by the FRC... and noactions or changes were recommend-ed or required.

We are fully confident in the finan-cial reporting of the company andlook forward to the opportunity todemonstrate this to the FRC.The FRC did not say whether it was

examining Autonomy, or its auditorDeloitte, or both. It has opened theprobe after consulting with profes-sional body the ICAEW, and has the

power to impose fines or ban individu-als from acting as directors.

Deloitte said yesterday it would co-operate fully with the investigation,

repeating that it had noknowledge of any account-ing improprieties or misrep-resentations in Autonomysfinancial statements.

TESCO was last night forced toadmit that some of its Everyday

Value spaghetti bolognese

contained 60 per cent horse, as thescandal over the mislabelling ofmeat continued to spread.

Environment secretary OwenPaterson told the House ofCommons that he had ordered allmeat producers and retailers tocommence regular testing of all

beef products, with resultspublished every three months.

An initial audit of productscurrently on the shelves will befinished this week, with the

Horsemeat scandal spreads toTesco Value spaghetti bolognese

BY JAMES WATERSON findings made available on Friday.Meanwhile the Romanian Prime

Minister angrily rejected claims thehorsemeat came from abattoirs inhis country, as the pan-European

investigation into the apparentfraud continued. Tescos technicaldirector Tim Smith said theaffected bolognese, which shouldonly contain Irish beef, was

withdrawn from sale last weekfollowing concerns about productssupplied by French manufacturerComigel. Downing Street yesterdayinsisted there was no health risk tothe public and the concern wasover retailer practice and labelling.

DEBATE: Page 21

TUESDAY 12 FEBRUARY 20134 NEWS cityam.com

Owen Paterson told MPs he believed the scandal was a result of criminal activity

ARE YOU WORRIED ABOUTEATING HORSEMEAT?Interviews by Amy-Jo Crowley

From a health

perspective, notin the slightest Ivevoluntarily eaten horse in France. But from aninformation perspective, people should beexpected to eat what it says on the packet.

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

JON MUNDAYREES POLLOCK

Its a prettydreadful

breach of trust in terms ofpeople not being aware of where their meat issourced. And the concern from a health per-spective is that horsemeat isnt regulated inthe same way as beef and may contain car-cinogenic bute.

DAVID THOMSONRPS GROUP

It doesnt affectme From what

Ive read there arent anyhealth implications as a result. So even if I wasto find out that I had inadvertently eaten horsemeat, it wouldnt be of any concern to me.

NELINA KIMEDWF

CITYVIEWS

Autonomy founder MikeLynch has defended the firm

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THE POPES closest advisers were leftreeling yesterday after the 85-year-oldpontiff revealed he would step downfrom the position in just over twoweeks, blaming age and declininghealth for his decision.

In an unexpected speech to seniorcardinals Pope Benedict XVI said: Ihave come to the certainty that mystrengths, due to an advanced age, areno longer suited to an adequate exer-cise of the Petrine ministry.

Pope Benedicts abdication is thefirst since 1415, when Gregory XIIstepped down following a disputewith a rival claimant to the papacy.

His successor will be chosen by agroup of senior cardinals, who willmeet as soon as the current Pope offi-cially leaves his post at 8pm on28 February.

In todays world, subject to so manyrapid changes and shaken by ques-tions of deep relevance for the life offaith ... both strength of mind andbody are necessary, he said yesterday.

Catholic shock

as Pope plansto step downBY ELIZABETH FOURNIER Strength which in the last few

months, has deteriorated in me to theextent that I have had to recognise myincapacity to adequately fulfil theministry entrusted to me.

Chief Vatican spokesman FatherFederico Lombardi said no specific ill-ness had led to the announcement,and that Pope Benedict did not intendto influence the decision of the cardi-nals who will choose his successor.

Several candidates have alreadyemerged as frontrunners to becomethe 266th leader of the RomanCatholic Church, including GhanasCardinal Peter Turkson, CardinalFrancis Arinze from Nigeria, CanadasCardinal Marc Ouellet, and ItalianAngelo Scola.

Prime Minister David Cameron paidtribute to the pontiff in the House ofCommons yesterday, saying He willbe missed as a spiritual leader tomillions.

Pope Benedict has worked tirelesslyto strengthen Britains relations withthe Holy See, he added.

Pope Benedict XVI will step down before his 86th birthday in April

THE FORUM: Page 21

5NEWScityam.com

THE VATICAN ON BANKING AND THE ECONOMY

Financiers must rediscover the genuinelyethical foundation of their activity, so as not to

abuse the sophisticated instruments which canserve to betray the interests of savers.

The conviction that the economy must beautonomous, that it must be shielded frominfluences of a moral character, has led man toabuse the economic process in a thoroughlydestructive way.

The world is sadly marked by hotbeds oftension and conflict caused by growing instancesof inequality between rich and poor, the Popesaid, by the prevalence of a selfish and individu-alistic mindset which also finds expression in anunregulated financial capitalism.

The creation of ethical structures forcurrency, financial and commercial markets isalso fundamental and indispensable. Thesemust be stabilised and better coordinated and

controlled so as not to prove harmful to thevery poor.

Wherever politics tries to be redemptive,it is promising too much. Where it wishes to do

the work of God, it becomes not divine, butdemonic.

To function correctly the economyneeds ethics; and not just of any kind but onethat is people-centred.

We are moving toward a dictatorship ofrelativism which does not recognise anythingas definitive and has as its highest value onesown ego and ones own desires.

Corruption and illegality are unfortu-nately evident in the conduct of the economicand political class in rich countries, both oldand new, as well as in poor ones.

The economic and financial crisis whichthe world is going through calls everyone, indi-viduals and peoples, to examine in depth the

principles and the cultural and moral values atthe basis of social coexistence.

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MAYOR of London Boris Johnson hasput together a team of economists,architects and advisers to thrash outthe details of a new hub airport inthe south east of England.Johnson told the transport select

committee yesterday that the coun-try needs a solution that gives us afour runway hub, preferably a 24hour hub, which is what our com-petitors are going for and in manycases already have.

He has appointed advisers includ-ing WS Atkins, the engineering firmthat worked on the Olympics and theWest Coast Main Line franchise;

architects Zaha Hadid and Pascall &Watson; professional services giantErnst & Young; economic groupssuch as Oxford Economics; and lawfirm Ashurst.The team will evaluate around 15

airport proposals and conduct feasi-bility studies on a handful, whichwill be handed to the DaviesCommission to inform itswork on UK air capacity, theMayor said yesterday.While he has not dismissed

Heathrow entirely,Johnson said yesterdaythat expandingBritains biggest air-port would cause animmense amountof political grief

Boriss expertsto look at new

airport optionsBY MARION DAKERS over noise and environmentalconcerns.

He argued that Heathrow wouldcease to exist as a major airport if anew hub in the Thames Estuary goesahead, but that the site could be rede-veloped to readily replace the jobsthat would be lost in west London asa result.

Im confident that the case forboldness is increasingly being heard.One of the game changers has beenthe government interest in infra-structure and the Olympics, he toldthe committee.

But he skirted the issue of publicfunding for a purpose-built hub,which he has estimated at around

25bn of the overall 70bn to 80bncost. He is said to be scouting forinvestors in the Middle East.Transport minister Patrick

McLoughlin later told the committeethat he is not looking to spend moremoney on things already provided bythe private sector, though alloptions remain on the table until theDavies Commission reports in 2015.

McLoughlin sidestepped questionsabout whether air passenger duty

will be altered in next monthsbudget, saying the tax is a

matter for the chancellor,George Osborne.


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ITYAMCAREE

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Crest Nicholson set to provide aboost to Londons IPO marketADVISERS to the flotation of house-builder Crest Nicholson, the most

high profile new issue in the Londonmarket so far this year, last night nar-rowed the price range to a healthy210p-220p, roughly at the midpointof the pricing range. The originalrange was between 195p-230p.The group, which plans to raise

between 24m-29m of new shareswhile allowing existing shareholdersto offload 90m shares, has beendoing extensive marketing over thepast few weeks in London, New York

BY DAVID HELLIER and also in Frankfurt.At the current price range the com-

pany will be valued at around 550m.The entire process is being watched

closely by many in the City who arekeen for a successful IPO in the hopeit might stimulate activity in a quietmarket.

Last year there was a dearth of IPOsin London, with the forced sale ofshares by RBS in the insurance com-pany Direct Line being the only majorlisting of a UK-based company.The books close on the offer today,

with pricing expected tomorrow.Stockbroker Peel Hunt is advising

its clients subscribe to the offer, say-ing the company is likely to come tomarket at a discount to the sector,despite offering a differentiated

business model, attractive operatingprofile and genuine expansivegrowth. It offers the longest landbankin the sector.There will be relief amongst the

institutions that the company hasnot tried to price at the top of therange, given that many in the pasthave complained of too many issuersforgetting to price in a new issuersdiscount. Some institutions haveeffectively boycotted IPOs.

Boris Johnson hasassembled a high-flyingteam of aviation experts

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STANDARD & Poors joined Fitchyesterday by lifting Irelandssovereign debt rating outlook tostable, after Dublin struck a bankdebt deal that improved its chances

of exiting its bailout programme bythe end of 2013.S&Ps move on Irelands BBB-plus

debt, leaves Moodys as the onlymajor rating agency with a negativeoutlook on Irish state bonds.

Dublin struck a deal with theEuropean Central Bank last weekallowing it to convert promissorynotes into long-term bonds, giving itlonger to repay debts it ran uprescuing the Irish banking system.

S&P ups ratingfor Irish bonds

HEALTH secretary Jeremy Hunt yester-day called on the City to help solve thefunding crisis in long term care by pro-viding new savings products, as he con-firmed care fees would be capped at75,000 for the elderly from 2017.

People will need to prepare and planfor social care costs as much as peopleprepare for their pension, Hunt toldthe House of Commons. They will besupported by a wider range of financialproducts becoming available in themarket.

Hunt said the decision to cap the costof long-term care will enable members

of the public to plan long-term finan-cial decisions so they are capable ofmeeting the initial 75,000 costs. Hehopes insurers will now fill the gap inthe market and popularise products tocover the difference.

Rather than feeling they have tohoard every penny in case the worstshould happen, or feeling they are pow-erless and there is no point saving atall, people will be able to plan and pre-pare for the future, Hunt explained.

We will work with the care agencies,with local authorities, charities, careproviders, and with the financial servic-es industry to develop these plans andintroduce them practically.

Hunt confirmed that the assetsthreshold for mean testing, abovewhich individuals receive no state sup-

Hunt asks City toprovide cover

for old age careBY JAMES WATERSON port for their care costs, will rise from

23,250 to 123,000. He claimed thismeasure, together with the fees cap,will mean 100,000 extra people receivestate assistance by 2025.

Hunt also confirmed that feesincurred while caring for individuals athome will count towards the cap, withthe hope that this will reduce the bur-den on residential sites.There will also be free care given to

those who turn 18 with certain needs, alower cap for people of working age whodevelop care needs before retirementage, and a pledge that from 2015 no onewill have to sell their home in their life-time to pay for residential care.

The 1bn a year cost of the reformswill be partly funded by freezing inheri-tance tax allowances for three yearsfrom 2015-16, as well as using some ofthe national insurance contributionsassociated with the end of contractingout some pensions.

Labour shadow health secretary AndyBurnham said the changes wouldmake the system fairer than it is todaybut said it did not go far enough.

Last month Gary Shaughnessy, chiefexecutive of Zurich's UK life insurancebusiness, told City A.M. that his companywas keen to be involved in providingcover for long-term care. He suggestedindividuals should be allowed to make atax-free withdrawal of 10,000 fromtheir pension in order to buy insuranceto cover cost up to the 75,000 cap.

LAURALEAN/CITYA.M.

Jeremy Hunt said yesterdays reforms represent a watershed moment for our country


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n Total care costs will be capped at75,000, with the government payinganything above this amount. Around 16 percent of elderly people are currentlyexpected to spend more than this amounton their care.

n The means testing threshold will risefrom 23,250 to 123,000. Anyone withassets of less than this amount can expectto receive some assistance from thegovernment.

n There will be a lower cap on the cost ofcare for people of working age who developcare needs before retirement age.

n Free care will be given to those who turn18 and have eligible care needs.

n From April 2015 no one will have to selltheir home in their lifetime to pay forresidential care, with those unable to affordthe fees given the right to defer payingduring their lifetime.

n The cost to the Treasury is estimated at1bn a year by 2020. To fund this there willbe a freeze on the inheritance tax thresholdat 325,000 for individuals until 2018-19.

n The rest of funds will come from extraheadroom created by private and publicsector employer national insurancecontributions associated with the end ofcontracting out pensions.

n 100,000 people by 2025 are expected todirectly benefit from these reforms.

HOW WILL CARE COSTS BE AFFECTED?


7/29/2019 Cityam 2013-02-12

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GLEE & 2012-2013 Fox and its related entities. All rights r eserved. The Foll owing 2013 Warner Bros Entertainment Inc

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SOFTWARE group Fidessa, the

biggest supplier of trading softwareto the City, yesterday gave an upbeatforecast for equity markets amidhopes the decline in the market hasfinally bottomed out.

The group, listed on the FTSE 250,reported flat revenues and a smalldip in pre-tax profits for the yearending December 2012 yesterdayafter facing some of the lowesttrading volumes in almost a decadelast year.

But boss Chris Aspinwallyesterday said the flood of moneyinto equities in January pointed to areversal of fortunes for equitymarkets.

We've seen some good inflowscoming back into the equitymarkets, he said. We have got abetter market sentiment cominginto this year than weve had forprobably the last five years.

The global value of equity tradingfell about 20 per cent last year,according to Fidessa, compoundingthe depressed levels seen in 2011.

The business, which had revenuesof 278.6m last year, predictedsimilar levels of sales and profits forthe rest of 2013 but an increase inbusiness numbers afterwards.

Fidessa added about 1m to itscash balances for the year and paida special dividend, taking totaldividend payouts up to 30.2m.

Fidessa bosspredicts futureequity revival

BY MICHAEL BOW

UK DEBT markets have got off totheir worst start to the year since2008, hinting at a slowdown inappetite for debt deals frominvestors, figures showed yesterday.

Debt market volumes fell to$27.2bn (17.4bn) for the period1 January up until yesterday, downfrom $67.4bn in the same period lastyear, according to the figures fromDealogic.The figures are the lowest deal vol-

umes since 2008s sluggish Januarystatistics of $9.3bn, when investorswere still licking their wounds fromthe 2007 financial meltdown.

Overall there have been 65 debtcapital market deals since the startof the year, compared to 187 last yearand the high water mark of 249 dealsin 2011.

Corporate debt volumes alsoplunged 42 per cent versus a yearago. Despite this fall, they stillaccounted for a record high majorityof debt deals.The debt market downturn comes

despite Virgin Medias pricing of a$2.7bn corporate bond to tie in with

Bond marketsoff to sluggish

start to the yearBY MICHAEL BOW

its acquisition by Liberty Global,announced last week.The Virgin deal was the biggest cor-

porate telecoms bond since Intelsatsold a $5bn in June 2008 and thebiggest corporate acquisition relatedbond since January 2012.

Debt investments have been climb-ing upwards since the financial crisiswith year on year increases since2009.Analysts have pointed to a great

rotation out of debt markets intoequity since the start of year as evi-dence of a debt slowdown. It followsrecord high inflows into stocks andshares, hitting investor appetite forfixed income.

Fidessa chief executive Chris Aspinwall said equities may be turning a corner

UK DCM Volume

2008 2009 2010 2011 2012 2013

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0 0

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TUESDAY 12 FEBRUARY 2013 cityam.com10 NEWS

Fidessa remains a world class company suffering from cyclicallydepressed end markets where early signs of improvement are just starting toappear. Whilst waiting to see if this continues, investors still benefit froma yield underpinned by a robust business model.

ANALYST VIEWS

We continue with our long term buy thesis, as we believe the third

quarter of 2012 will prove the low watermark for forecasts. The stock is ultimate-ly more in line with historic norms, whether this turns out to be awardedthe market in full year 2014 or realised by M&A interest.

The outlook is more optimistic than we had expected and also we note

that the staff headcount and average cost employee is lower than expected soFidessa is doing a better job in managing its cost base. We [..] still grum-ble Fidessa shares are too expensive and the halcyon days are long gone.

WHAT NEXT FOR FIDESSA?By Michael Bow

DAVID TOMS NUMIS

ROGER PHILLIPS MERCHANT SECURITIES

GEORGE OCONNOR PANMURE GORDON

7/29/2019 Cityam 2013-02-12

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IN BRIEFHICL in demand as Nav risesn HICL Infrastructure Companyyesterday a nnounced strong figuresfor the last six months after its netasset value increased close to threeper cent. Shares in the fund now tradeat 6.7 per cent premium to the Nav, asign of increasing demand for thefund. HICL, which invests in roads andhospitals, said it planned to raiseadditional equity by March. The grouphas made seven new investmentssince September 2012, including a75m spend on Scottish schools.

RWS Holdings upbeat at AGMn RWS Holdings, which providesintellectual property services to FTSEfirms, yesterday predicted anotheryears of group sales growth for 2013.Speaking at the businesss annualmeeting, executive chairman AndrewBrode hailed an encouraging threemonths for the business as it looks tosecure its tenth successive year ofgrowth. The firm bought online patentfiling outfit Inovia in October 2011 andyesterday said it expected the buy tohelp boost results.

GHG looks at debt restructuringn Lenders to General Healthcare

Group are in talks on a restructuring ofits around 2bn debt pile, bankingsources said yesterday, in a processwhich threatens to leave them nursingheavy losses. The company, one ofBritains largest independenthealthcare services providers, wasbought in 2006 by a consortiumcomprising Apax Partners, BrocktonCapital, London & Regional Propertiesand Netcare, backed by borrowing thatmatures later in 2013, bankers say.

BETTER Capital, the private equityhouse run by seasoned investor

Jon Moulton, yesterday announced

plans to change its investmentpolicy so it can invest incompanies outside of the UK.

The firms second fund, Becap12, currently has twoinvestments fashion house Jaegerand double glazing firm Everest

but it wants to change the rules soit can make more investmentsabroad.

The rules were undulyrestrictive, Moulton told CityA.M.yesterday.

Better Capital tees up policyshift to widen investment net

BY MICHAEL BOW Its designed to give usincreased ability to invest inmultinational deals.

The change, which is set to beout to investors at a meeting on 28

February, comes as the firm eyespotential opportunities in Ireland,following the states decision tolengthen paying back its Anglo-Irish banking bail out.

Better announced a tie-up withthe National Pensions ReserveFund of Ireland to invest indistressed businesses last month.

Moulton said Ireland was goingto be a relatively goodopportunity following moves tolengthen the repayment period.


Better Capital chairman Jon Moulton said the fund rules were unduly restrictive

EXCHANGE group NYSE Euronextyesterday revealed the growing impor-tance of its derivatives business as itannounced a 27 per cent year-on-yearrise to 9.5m contracts traded per dayduring January.

In contrast its traditional equitiesbusiness suffered, with US volumesfalling 14 per cent to 1.6bn shares aday over the same period.The improvement in the derivatives

business which suggests a potentialturnaround in trading volumes aftera sluggish end to 2012 was largelydriven by a 64 per cent rise in the pop-ularity of fixed income products.

This increase explains why upstartderivatives trading businessIntercontinentalExchange (ICE)agreed to pay $8.2bn (5bn) at the endof December to buy NYSE Euronextand take control of its subsidiary Liffe,the second-largest futures exchangein Europe.Yesterdays figures reveal that the

average daily volume of Europeanderivatives traded through the full-service Liffe platform rose a hefty 43.5per cent on last year, with ICE con-

NYSE Euronextin derivatives

trading boomBY JAMES WATERSON vinced that further growth is on theway.

Meanwhile NYSE Euronext yesterdayconfirmed it is preparing to spin-offthe Paris-based Matif wheat futuresmarket as part of the forthcomingtakeover deal, which is due to com-plete in the second half of this year.

ICE has made no secret that it haslimited interest in equities marketsand it is also expected to dispose ofNYSE Euronexts stock exchanges inFrance, Portugal, Belgium and theNetherlands.

Last week NYSE Euronexts resultsshowed revenue fell 11 per cent to$562m during the final three monthsfollowing a slump in trading volumes.

NYSE Euronext

11 Feb5 Feb 6 Feb 7 Feb 8 Feb

35.50

34.75

35.75

36.00

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Home Depot has chosen theiPhone for its management team

IN BRIEFSmartphone popularity on risen The popularity of smartphones isset to soar even further in the nextcouple of years, according to the latestNew Media Forecasts released byZenith Optimedia. While more thanone in three people (35.5 per cent) in19 observed advanced markets had asmartphone last year, it expects thisnumber to soar to 71.7 per cent by2015. In the UK around three in fourpeople will own a smartphone by theyear after next, the forecasts added,up from just over one in two.

Dell insists it kept options openn Dell had considered many strategicoptions before opting to go private, itsaid in a regulatory filing revealedyesterday. The struggling PC makerstruck a deal last week to go private ina $24.4bn deal. It said it retained amanagement consultant to helpassess its strategic position andconcluded that the all-cash deal wasin shareholders best interests. Dellsaid the statement was in response tocertain inquiries but did notelaborate on the nature of the queries.

LOreal to buy back 500m sharesn L'Oreal unveiled plans yesterday tospend about a third of its net cash, or500m (428m), on buying backshares as it reported a small reboundin fourth-quarter sales. The worldsbiggest cosmetics group said turnoverin the three months to 31 Decemberreached 5.7bn, up 5.3 per cent on alike-for-like basis, helped by strongdemand in North America and solidgrowth in the Asia-Pacific region.Like-for-like sales rose 4.6 per cent inthe previous quarter.

SHARES in Blackberry plummeted byas much as six per cent during earlytrading yesterday, after one of the USsbiggest retailers said it was replacingits employee handsets with Applesrival iPhone.A spokesman for DIY-chain Home

Depot said as many as 10,000 of itsmanagement and corporate employ-ees would switch their Blackberrymodels for iPhones in the comingmonths, though the rest of its 60,000store employees would keep theirexisting handsets.

We are replacing the cur-rent base of BlackBerry

technology with iPhone,but these are not themobile devices used in ourstores, Stephen Holmessaid.

Home Depots snub is thelatest blow to the Canadianfirm, which just last monthlaunched a new range ofsmartphones and pinnedits hopes on the success onBB10 a new operating sys-tem it hopes will win backcustomers from Apples iOSand Googles Androidsystems.

Blackberry fallsas Home Depot

chooses iPhoneBY ELIZABETH FOURNIER It also rebranded itself under theBlackberry, dropping the Research inMotion moniker and renamed itsToronto-listed shares under the BBticker.

BlackBerry declined to commentdirectly on Home Depots move yester-day, but in an email said it is seeingstrong demand for its new Z10.

We have over 2,700 unique business-es in North America already registeredfor our BlackBerry 10 Ready Program,Amy McDowell, a spokeswoman forthe company, said.

We are confident that BlackBerry is,and will continue to be, the best solu-

tion for corporations managinglarge smartphone deploy-

ments.BlackBerry unveiled two

new devices a full touch-screen smartphone dubbedthe Z10 and a more tradition-al physical keyboard versionnamed Q10 at a launchevent in New York on30 January.

Shares, which have gained39 per cent over the past year,recovered slightly yesterday toclose at C$15.76.

Insurers confident of growing revenueTHE GLOBAL insurance indus-try is overwhelmingly confi-dent of boosting revenues thisyear despite seeing littleprospect of a return to econom-ic growth, according to a PwCreport out today.The research suggests 90 per

cent of insurance chief execu-tives expect to see revenuesincrease over the next twelvemonths, despite just 15 per

cent of the same executivesexpecting the economy toimprove over the same period.The insurance industry is

enjoying a boom period thanksto fast-growing markets in Asiaand South America. Londonhas benefited from thisgrowth, with demand for officespace in the Citys insurancedistrict helping to drive con-struction of new skyscraperssuch as the Cheesegrater.The survey also reveals insur-

ance chief executives believethe availability of talent as thebiggest threat to their growth,especially as the focus switchesaway from Western Europe.

PwCs Jonathan Howe said:Trajectories of growth in dif-ferent parts of the world arediverging; customers aredemanding more transparentand accessible products; tech-nology is revolutionising riskanalysis and customer profil-ing; and, the speed of change is

putting existing business mod-els at risk.

The insurers that come outon top will focus keenly on thecustomer and have a superiorcapacity for innovation andreinvention. Theyll be able toanticipate change and how itaffects them, as well as be nim-ble enough to quickly capitaliseon emerging opportunities.

PwC interviewed 92 insurancechief executives from 39 coun-tries as part of the research.

US pharmacy giant Walgreens andAlliance Boots are to meet withinvestors and analysts in the Citytomorrow to update on theprogress of its merger that will seethe creation the worlds largestpharmacy group.

The meeting, which will befollowed by a site visit to Bootsheadquarters in Nottingham, ledto speculation this weekend that

Walgreens would seek a Londonstock market float.

But the US firm, which is listedon NASDAQ, New York StockExchange and Chicago Stock

Walgreens to raise curtain onpartnership with Alliance Boots

BY KASMIRA JEFFORD Exchange yesterday ruled out anyimminent plans to float on the

London Stock Exchange.Walgreens bought a 45 per cent

stake in Alliance Boots last yearfor 4.2bn, with an option to buythe 55 per cent remaining stake inthe next two and a half years.

The pharmacy chain was takenprivate by Italian billionaireStefano Pessina and private equityfirm KKR, for 12.2bn in 2007.

At the meeting this week thepair, which are currently runninga joint venture, are expected toprovide details on how they areachieving $100m-$150m ofsynergies from the merger.


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THERE are many ways to showyour love to the object of youraffection this Valentines Day.

However, expressing it bydownloading a message for themon a Barclays personalised debitcard is perhaps not one of them.

There are some things money

Who said money cant buy lovecant buy but a thoughtful,romantic gift isnt one of them.

Unless of course you are one of

the seven VERY lucky personaliseddebit card gift givers who wins theprize-draw for a stay at The Ritz orchampagne-fuelled hot air balloonride, that is.

Nothing says I love you quite like a brand new debit card

THE ANNUAL Property Race Day isalways a highly enjoyable fixture inthe real estate industry calendar, as700 thoroughbreds from the prop-erty world descend on Ascot for aday of racing and networking.

However this year the best willbe saved until last, as 12 bravereal estate runners will be don-ning skullcaps and grasping

whips, as they hurtle downthe straight mile in a newcharity race.

Unfortunately the amateur race willtake place at the end of the days pro-ceedings, so our charity riders will

have to abstain from the lunchtimehospitality on 12 July. But all fora good cause or several. The

beneficiary charities for 2013 areLandaid, Well Child, Whereverthe Need and Project Hope.

The Capitalist hears that wannabe

riders from Jones Lang LaSalle,Knight Frank and Savills havealready jumped in the saddle.

For more information visitwww.thepropertyraceday.co.ukProfessional rider Frankie Dettori

THE City of Londonloves its ancient

traditions, and ShroveTuesday is no exception.Anybody strolling pastthe Guildhall today canexpect to be greeted withthe sight of the Cityselders dressed in chefswhites and wieldingfrying pans for the annualPancake Race. Runninglanes have been createdin the historicGuildhall Yard and

members from City liverycompanies will becompeting to be thefastest off the startingblock. The Capitalisthearsit is an all-weather eventso heres hoping thepancakes, and the runningtrack, dont get too soggy.A timely reminder to thisyears entrants to watchtheir footing and not totoss too hard.

FOR those who prefer awarmer venue for theirShrove Tuesday fill,Mayfair favouriteLangans Brasserie iswhipping up a simplebreakfast of caramelisedcrepe gateau with bloodorange and mint, thismorning. The restaurant isalso looking to findLondons best pancaketosser who will behandsomely rewardedwith a complimentary

dinner for two with wine.

INVESTMENT bank CantorFitzgerald is not wasting anytime after finalising the deal, lateon Friday night, to buy SeymourPierce the old City stockbrokerthat was part-owned by well-known football financier KeithHarris.

Even though the ink had barelydried on the deal, SeymourPierce employees werealready sending outemails this morningfrom their formeremail addresses,opening with the titleof CantorFitzgeraldResearch

Flash...

Quick changeat SeymourPierce office

Calling all realestate amateurAscot jockeys

14 cityam.comTUESDAY 12 FEBRUARY 2013

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

[email protected]

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Heathrow traffic edges higheras Gatwick slides in the snow


AIRPORT TRAFFIC IN JANUARY

HEATHROW AIRPORT

Passengers in January

0.3% to 5,180,000

DOMESTIC TRAFFIC 5.8%

EUROPEAN TRAFFIC 1.8%

CHINA TRAFFIC 14.1%

BRAZIL TRAFFIC 14.1%

SOUTHAMPTON AIRPORT


10.6% to 88,200

GATWICK AIRPORT


0.8% to 2,096,400

UK & CHANNEL ISLANDS TRAFFIC

2.7% to 257,800

EUROPEAN SCHEDULED FLIGHTS

3.4% to 1,059,200

NORTH ATLANTIC FLIGHTS

3.8% to 96,300

GLASGOW AIRPORT


1.2% to 411,500

PASSENGER traffic at Heathrowinched up in January, in spite ofcancellations caused by snowflurries, the airports owner saidyesterday.

Heathrow Limited, owned bySpanish firm Ferrovial andformerly known as BAA, said 5.18mpeople used the UKs busiestairport last month, up 0.3 per centon a year ago.

Domestic travel fell 5.8 per centbut European and North Americantraffic have soared since the sameperiod a year ago.

Heathrows load factor, whichmeasures how full each flight is,rose 2.1 percentage points to 70 percent. Cargo, however, fell 5.3 percent on last year to 106,425 metrictonnes.

The positive figures follow arecord year for Heathrow in 2012.

The airport will outline itsspending plans for the five years to2019 today, and is expected toearmark 3bn for upgrade work.

Meanwhile Gatwick, owned byprivate equity group GlobalInfrastructure Partners, saw a 0.8per cent decline in passengernumbers to almost 2.1mpassengers in January.

The airport said tough economicconditions and wintry weatherboth contributed to the slide.

Domestic traffic rose 2.7 per centto 257,800 passengers, while non-US long haul flights gained 6.6 percent to 413,300, helped by newroutes to Korea, China and Russia.

European scheduled and charterflights both declined.

BY MARION DAKERS

BRITISH LAND has snapped up a port-folio of London properties fromDutch investment firm Wereldhavefor 183.8m, the property giant con-firmed yesterday.The biggest asset in the portfolio is

Ealing Broadway shopping centre inwest London, which is anchored byretailers including Marks & Spencerand Primark and attracts 15m visitorseach year. British Land paid 142.5mfor the 300,000 square feet mall,which it expects to benefit from thecompletion of Crossrail in 2018. Thecentre will then be just 13 minutesfrom Heathrow and 19 minutes fromLiverpool Street.

We believe there are significantopportunities to grow and developthe shopping centre as a retail desti-nation, both as we further improve

BY KASMIRA JEFFORD the retail mix and increase the leisureoffer and as the area benefits from res-idential development and the comple-tion of Crossrail, Charles Maudsley,head of retail, said.The portfolio also includes five retail

and office properties in Baker Street,Chiswick High Road, Putney HighStreet, Fulham Road and GreatPortland Street, bought for 41.3m.

British Land Company PLC

11Feb5 Feb 6 Feb 7 Feb 8 Feb

564

562

568

570

572

574 p 570.5011 Feb

THE CANADIAN government isset to put one of its Londonproperties in Mayfair up for saleas part of a plan to consolidate itspresence in one spot in thecapital.

Macdonald House in GrosvenorSquare has been the High

Commissions headquarters sincethe early 1960s, when it wasbought from the US government.Property experts said the 130,000square feet site could fetcharound 150m.

In a parliamentary meeting onFriday the government said it willrefurbish Canada House, thecommissions cultural centre inTrafalgar Square, and expand it

by buying an adjacent building.

BY KASMIRA JEFFORD

Macdonald House in Grosvenor Square is home to Canadas High Commission

Canada puts Grosvenor Square embassy up for sale

Ferrovial SA

11Feb5 Feb 6 Feb 7 Feb 8 Feb

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British Land in143m bet on

Ealing shoppers

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KOFAX, which provides smartprocess applications to businesses,yesterday reported a drop in revenueand lowered its earnings forecast forthe year.

Total revenue for the quarterending 31 December fell to $63.7m(40.7m) from $70m in the samequarter a year earlier.

The companys software licencerevenue for the quarter decreased by24.8 per cent to $25m. Meanwhileincome from operations for thequarter fell 38.3 per cent to $3.8m.

Chief executive Reynolds Bishlowered guidance for the fiscal yearto no to low single digit growth.

Kofax issues aprofit warning

BY JENNY FORSYTH

APPLE has been ordered to appear

before Australias parliament withfellow technology giants Microsoftand Adobe Systems to explain whylocal consumers pay so much fortheir products, despite the strongAussie dollar.

Broadening a row between theworlds most valuable company andAustralian politicians overcorporate taxes paid on Applesoperations, Apple executives wereformally asked yesterday to appearin front of a parliamentarycommittee on 22 March.

Australia callsup tech giants


MOBILE payments service Monitiseyesterday reported half-year revenueup 63 per cent on the same period ayear earlier as the number of transac-tions it processed quadrupled.The fast-growing company, which

provides mobile payments for Visaand many UK high street banks, saidits revenue was 27.8m for the sixmonths to 31 December. It processed2bn transactions in that time andreached a total of 20m registered cus-tomers, compared with 6m at thesame time a year earlier.Yesterday Monitise announced

plans to expand still further with thelaunch of a mobile payments servicefor BlackBerry Messenger (BBM),which will be introduced via a pilotscheme in Indonesia.

It has also formed a partnershipwith e-commerce provider Venda,aimed at speeding up the introduc-tion of Monitises Instant MobileCheckout service to stores such as FatFace, TK Maxx and Wickes.

Despite the increased customerbase , Monitises recent investments including the acquisition of US com-

BY JENNY FORSYTHpany Clairmail meant the compa-nys loss grew from 4.2m to 14.7m.

Monitise reported a total cash bal-ance of 106.4m at the end of the peri-od, up from 41.4m the year before,and said it was on track for full-yearrevenue of at least 70m.Alastair Lukies, Monitise chief execu-

tive officer, said: Monitises overallperformance during the periodreflected the ongoing investment inscaling the business to meet theincreasing global demand for MobileMoney and strategic moves taken toconsolidate the groups leadershipposition globally.

Shares lifted 1.5 per cent to 34.50p

on the news.

S

ILICON Valley may still holdsway, but it is good to see twotech companies with Britishlinks, Blinkx and Monitise,

continuing to perform impressivelyon a global stage. Blinkx is a pioneerin video search, based on technologyconceived at Cambridge University.Now headquartered in San Franciscoand London, it measures 148munique users in the US each month.Monitise is a British mobile bankingfirm with global reach, with 20mregistered customers worldwide.

Such firms can grow at arocketing pace as they scale their

offering to a global market from asmall base. Monitise reported sixmonth figures yesterday for thesecond half of 2012, which showedrevenue up 63 per cent from thefirst half of the year. Customershave more than tripled from 6m

the year before. Transactionsquadrupled year-on-year.

Still, high expectations followsuch growth trajectories. Thesestorming numbers from Monitiseslightly disappointed expectationson revenue. That, and a group pre-tax loss of 24.4m, was howeverbalanced by a boost to grossmargins and a new Indonesian tie-up with BlackBerry for paymentsvia its messaging service, helpingdrive the price slightly higher.

There is a danger in such successfor London. Monitise has in the pastweighed a Nasdaq listing as its next

step from Aim. Although inNovember it said it would apply tomove to Londons main market in2013, homegrown Facebook gamespecialist King.com is consideringfloating on the Nasdaq, while theother tech firm in the news, cableinnovator Virgin Media, had aprimary Nasdaq listing, and its newowner Liberty Global is Nasdaq-listed. Now we produce fast-growingsilicon superstars of our own, weneed to avoid a tech listing drain, orwe may get stuck in the old Britishtrap of building somethingamazing that we dont fully exploit.

BLINKING IMPRESSIVEBlinkx meanwhile already has adual Aim-Nasdaq listing. AsMonitise inched upwards, Blinkxshares roared up by more than aquarter yesterday as it announceda strong third quarter. The firmdid well from the US election butalso has clever proprietarytechnology in a fast-growingmarket and recently made somesmart acquisitions. Aiming at115m-118m revenue for the year,it had a healthy pre-tax profit lastfinancial year: Blinkx is one tokeep an eye on.

BOTTOMLINE

MARC SIDWELL

Monitise PLC


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SHARES in video search enginecompany Blinkx soared 25.74 per

cent yesterday after the companyraised its profit forecasts.

The firm gave an upbeat tradingreport for the third quarter andsaid it now expects full-yearrevenue to be between $180m(114.7m) and $185m.

This is largely due to increasedonline advertising on the back ofthe US election coverage and theOlympic Games.

As a result of the guidance,shares leaped 17.50p to 85.50p.

Blinkx is a spin-off from

BY JENNY FORSYTH Autonomy, the former FTSE 100software company, and waschampioned by Mike Lynch, who isstill a non-executive director of

the smaller company.The search engine, which trawls

content from video sites includingYouTube, also said acquisitions ofUS advertising firms Burst Mediaand Prime Visibility Media Group(PVMG) had been integrated aheadof schedule.

It is the second profit upgraderecently for the Aim-listed firm. InOctober Blinkxs shares spiked

when it forecast profit of around$2.4m (1.5m) over six months,rather than the expected loss.


Boisdale of Canary Wharf,cabot place,canary wharf,london E14 4QT

EMAIL [email protected]

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Blinkx charged more for ads during the US presidential election, won by Barack Obama

Blinkx shares boosted by onlinead spending during US election

More mobilepayments lift

Monitise sales

We should be holding on to fast-growing tech firms

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IN BRIEFBalfour Beatty wins uni dealn Infrastructure group Balfour Beatty saidyesterday it is the preferred bidder for a

45m housing project with AberystwythUniversity. The 32-year concessioncontract will involve the design, build andmaintenance of facilities for the university.The project will provide housing for 1,000students, as well as communal facilities.Balfour will invest 10 per cent of theequity into the project, expected to reachfinancial close in the middle of the year.

Sanofi boosts stake in RegeneronnFrench drugmaker Sanofi is buyingmore shares in US biotech companyRegeneron Pharmaceuticals, its partnerin the development of potentialtreatments for cholesterol andrheumatoid arthritis. Sanofi controls 16.7per cent of Regeneron, or 15.82m shares.Sanofi said in an email that it has theright to raise the stake to as much as 30per cent under its decade-longpartnership with Regeneron.

Novo hit by insulin rejectionn Shares in Novo Nordisk tanked 13per cent yesterday after US regulatorsrejected its new long-acting insulinTresiba until it conducts extra tests forpotential heart risks, dealing a majorblow to a key product for the Danishdrugmaker. The firm said the Food andDrug Administrations decision wouldmake it harder to meet long-termfinancial targets as it cannot providethe data until at least next year.

Pothole insurance claims doublen The number of insurance claims forpothole-related damage to cars onBritains roads more than doubled inJanuary compared with the samemonth last year, according to brokerAA Insurance. The company estimates1,000 UK cars were seriouslydamaged by potholes during themonth and blames deteriorating roadsfollowing a period of heavy rain,flooding, snow and ice.

BELEAGUERED coal miner Bumi haswon the support of shareholder advi-sory service Glass Lewis in the run-upto its boardroom showdown nextweek with company co-founder NatRothschild.The US proxy shareholder advisory

firm has backed the Bumi boardproposal, recommending that share-holders vote against all but three ofco-founder Nat Rothschilds propos-als at the general meeting on21 February.

But the inf luential body has backedRothschild on the removal of threeboard members Nalin Rathod, LordRenwick and Sony Harsono.

Last month, Rothschild demandeda meeting to overhaul the board byremoving 12 out of 14 current mem-bers, and replace it with executives ofhis choice, including himself. He hasproposed Australian Wal King as newBumi chairman and Brock Gill aschief executive.

His proposal has garnered supportfrom several large shareholders,including Schroders and TaubeHodson Stonex.The Bumi board instead has vowed

to move towards a divorce fromshareholder the Bakries and

BY CATHY ADAMSIndonesian Bumi Resources.

Separately, Liberum Capital yester-day backed the board in a note,adding that the company needs tomake a clean separation from BumiResources and to reduce its financialleverage, both of which can beachieved under the boards proposal.

Liberum conceded that Rothschildhas assembled a high calibre chair-man and chief executive, but his pro-posal would be compromised by therelationship agreement dispute andlack of a defined strategy in relationto the disposal of Bumis BumiResources stake.The broker added that the current

share price of the miner it closed upyesterday at 385p is baking in ahigh probability of success of theboards proposal next week.

Refining margins jump at EssarEnergy on increased capacityINDIA-focused Essar Energyyesterday reported a jump in

refining margins over the threemonths to December, thanks to amajor expansion in refiningcapacity at its Vadinar plant.

Refining margins at the Vadinarrefinery jumped 246 per cent overthe quarter to $9.75 (6.21) a barrel,up from $2.82 over the samequarter last year, thanks to a majorexpansion at the plant to 405,000barrels a day from 300,000previously.

Throughput at the refinery, inthe western state of Gujurat, soared

BY CATHY ADAMS77 per cent to 36.32m barrels.

At Essars UK-based Stanlowrefinery, margins were up 128 percent at $5.59 a barrel, from $2.45 a

barrel a year earlier.The companys oil refining unit,Essar Oil, said last month thatearnings before interest, tax,depreciation and amortisation(Ebitda) grew more than eight timesto 12.42bn Indian rupees (147m)for the quarter.

Additionally, power generationalmost doubled over the quarter to2.86bn units, from 1.48bn units ayear earlier, primarily due to threenew projects coming up stream overthe 12 months.

Investors were cheered by FTSE250-listed Essar Energys update,and shares rallied 2.34 per cent toclose at 144.3p.

Bumi PLC


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PERRIGO, a US manufacturer ofgeneric and over-the-counterdrugs, said yesterday it has boughtUK-based RosemontPharmaceuticals for about $283m(181m) in cash to gain access toRosemonts oral liquidformulations business.

The deal is expected to add eight

cents to Perrigos adjustedearnings per share for theremainder of fiscal 2013, Perrigosaid in a statement.

Perrigo had earlier forecastadjusted earnings of $5.45 to $5.65per share.

US drug firm Perrigo buys UKsRosemont Pharma for $283m

BY CITY A.M. REPORTERLeeds-based Rosemont

manufactures and supplies over150 liquid medicines for jointdisease, infections and

gastrointestinal disorders, aimedspecifically at patients that havetrouble swallowing tablets.

In 2006 Close Brothers PrivateEquity financed a 93mmanagement buyout of the firmfrom US owner Savient

Pharmaceuticals, but last year itappointed Rothschild to look for abuyer for Rosemont.

Perrigo said Rosemont, whichhad net sales of more than $60min 2012, will become a part of itsprescription drugs business.


Perrigos Joseph Papa said the acquisition was an opportunistic step into the UK

Dan & Emma16.10.12 at 6.45pm

Lovestruckhere

Now its your turn tomeet someone amazing

Investor body

gives backingto Bumi aheadof board battle

BLUE CHIP engineer Rolls-Roycehas won an engine supportcontract with the US Air Force,

worth $97.3m (61.9m).The contract, which runs until

January 2014, involves the firmproviding logistics, engineeringservices, programme managementsupport, spare parts and technicaldata support to the US Air ForcesC-130J fleet.

We are proud that the US AirForce has again chosen Rolls-Royceto deliver our innovative and costeffective MissionCare support,Paul Craig, president of Rolls-Royce defence customer services,said yesterday.

Rolls-Royce, which services the

Roll-Royce nets 62m fleetsupport deal with US Air Force

BY AMY-JO CROWLEYaircraft at its defence operationscentre in Indianapolis, said it hadsustained more than 90 per cent ofthe C-130J fleet over the past six

years.The contract win comes ahead

of Rolls-Royces full-year results

this Thursday. Morgan Stanleyexpects earnings of 1.9bn, onrevenues of 15.3bn over the year,as Rolls acquisition of Tognum

gives a boost to the results.Rolls-Royce, which secured

major deals last year including acontract with Singapore Airlinesto power 25 Airbus aircraft, last

week netted an order for its TrentXWB engines worth $1.1bn at listprices.

Shares in the company fell 0.87per cent yesterday to 967.5p.

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TOUGHER rules are needed to makesure mortgage insurers are up to thejob of protecting banks, the BaselCommittee on Banking Supervisionsaid yesterday, calling for closersupervision of the insurers.

The group called for insurers tobuild up bigger capital buffersagainst potential losses as well asextra reserves to keep them safe ineconomic downturns.

Mortgage insurance is meant toprotect lenders by transferring riskto insurers, who can cover themagainst tail risks.

But in severe downturns, the BaselCommittee fears insurers cannotcope as they are set up currently.

In the worst cases, failure of amortgage insurer may occur leadingto resolution of the insurer, wherebysome of the most extreme tail riskmay revert to the lender at the verytime that the insurance would bemost needed, potentially creatingsystemic risk, warned theconsultation document.

This problem is exacerbated by thehighest loan to value mortgagesbeing those most frequently insured,the committee argued.

As well as tougher capital rules,the consultation wants to monitorsales incentives at the insurers.

Regulators fearloan insurancemay be at risk

BY TIM WALLACE

THE HOUSING market switched up agear as 2013 began, several sets of datahave revealed.

Credit costs for a range of mortgagetypes plunged yet again, according toBank of England data, suggesting thatthe government and Bank s Fundingfor Lending Scheme (FLS) has drivenfunds back into the housing market.The average two-year fixed rate

mortgage with a 75 per cent loan tovalue (LTV) ratio dived to 3.1 per centin the first month of the year, from3.35 per cent in December, and 3.69when FLS began in August.

And the average rate on a similar 90per cent LTV offering plummetedeven further, from 5.33 per cent inDecember to 4.73 per cent inJanuary having been as high as 5.93per cent at the schemes inceptionback in August.

Separate data out this morning putmortgage approvals at a four-yearhigh during the same month.Mortgage approvals rocketed up 17

Credit scheme

eats away rateson mortgagesBY BEN SOUTHWOOD per cent between the last month of

2012 and the first month of this year,according to Esurvs mortgage moni-tor. This put them at 65,184 duringJanuary the strongest month sinceFebruary 2008, when the effects of thecrunch were yet to kick in.And these funds were finding their

way to the subprime end of the mar-ket, Esurv said, with LTVs of 85 percent or above shooting up 30 per centin just a month.Another set of numbers, this time

from the Royal Institution ofChartered Surveyors (RICS) also point-ed to a strengthening housing market.

Respondents to a RICS survey wereexactly evenly split on the direction ofprices during the three months toDecember a boost from the nine percent margin in favour of falls seen lastmonth.

Prime London property did particu-larly well, according to a fourthrelease, this time from London CentralPortfolio, with a 14.1 per cent jump inaverage prime central London prices,bringing them to 1.359,739.

Fallon demands banks publish

local personal loan data weeklyBANKS are being urged to publishmortgage lending and consumercredit decisions by region,according to a letter from businessminister Michael Fallon, madepublic yesterday.

He is following the lead frombusiness secretary Vince Cablewho last week called on banks topublish small business lendinglevels by constituency on a weeklybasis.

The hope is the extratransparency will either embarrassbanks into lending more or toallow politicians to apply moreleverage in negotiations.

We are sure that as part of yourresults you will be eager to show

BY TIM WALLACE not just the return your institutionoffers its shareholders andemployees but also t he utility thebanking sector can provide tosociety and the economy morebroadly, Fallon wrote.

A commitment to publish yourinstitutions lending by local areawill no doubt support this case.

The major banks are thought tobe considering their response tothe request.

The banking industry iscommitted to transparency and isactively working on thepublication of data on businessborrowing for 120 postcode areas,said the British BankersAssociation.

The industry is constructivelydiscussing with government what

further information would assistpolicy formation.

Banks have come under firefrom politicians for reducinglending since the financial crisis.

They are in a tough position asthey try to cut down on the type ofrisky lending which led to thecredit crunch, at the same time asnew regulations force them to setaside more resources instead oflending.

Political schemes includingProject Merlin tried to push banksto lend more, but missed industrytargets.

The latest is the Funding forLending Scheme which gives cheapfunds to banks to lend on, thought

so far business lending is still onthe decline.

LAURALEAN/CITYA.M.

INSURANCE contracts couldbecome transferable betweenproviders in the event of a majorinsurer going bust, top regulator

Andrew Bailey argued yesterday,calling for the watchdog to be givenmore powers over resolution.

Insurers do not face the samerisk of a run that banks do, becausecustomers cannot simply move toanother firm.

Instead, customers take outspecific products.

That means insurers are moreprotected in normal times theircustomers cannot leave at a

Insurance deals may becomemobile in case of firms failure

BY TIM WALLACEmoments notice but posesproblems when a provider fails.

Work is under way to determinewhether insurance would benefitfrom a special resolution regimethat overrides normal insolvencyrules in order to enhance theability to ensure continuity ofcritical contacts through, say, thetransfer to business to anotherfirm, said the head of the newPrudential Regulation Authority.

The policyholder protectionobjective

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