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News2 CITYA.M. 7 JANUARY 2011
Cost of snowhitting homeBRITAINS economy took a hammer-ing from the winter freeze, with theservice sector contracting inDecember and retailers being hit, itwas revealed yesterday.
The countrys largest sector experi-enced its first decline for 20 months,stalling the recovery. The businessactivity index, compiled by Markitand the Chartered Institute ofPurchasing and Supply (CIPS),dropped to 49.7, down from 53 inNovember below the 50 signallingcontraction.
The news piled pressure on UKauthorities to be better prepared forsnow and severe weather.
We are disappointed that the UKstill hasnt learnt the lessons fromprevious bad weather and that the
country yet again ground to a halt,said Federation of Small Businesses(FSB) chairman John Walker.
While the government ordered areview into the impact of the severeweather, this was the third in threeyears, the FSB said.
Companies usually prepare for andadapt to inclement conditions, butauthorities are too often caught out,Walker argued.
Small businesses even come to theaid of local councils, Walker said,while an FSB survey showed that 17per cent of companies bought theirown supply of grit and salt.
Yet many retailers were severely hitby the conditions, blaming reducedsales on the coldest December since1910, when records began.
High street giants Next, HMV andMothercare saw year on year salesdrop. Next suffered a 6.1 per cent
BY JULIAN HARRIS
UK ECONOMY
Gimmicks and spin wont rescue UK
THERE is much that this governmentis doing that is good for growth. Itsdetermination to cut public spendingis the only reason we havent gone the way of Greece. Reducing corporationtax to 24 per cent is an excellent idea.The coalitions Entrepreneurs Visa is agood thing but its effect is partly can-celled out by other restrictions onmigration. Some useful infrastructureprojects are going ahead.
But with a few other exceptions, thecoalitions growth policies remainlightweight, a host of incentive-destroying taxes are still going up, reg-
ulations are being added and its atti-tude towards business is still worrying-ly schizophrenic. Yesterdays speech ongrowth by the Prime Minister wasmeant to show that there was more to
the coalitions economic plans than afocus on balancing the books. It mere-ly exposed gaping holes at the heart ofits vision and its continued determina-tion to downplay the Citys role in cre-ating wealth.
Camerons primary strategy is toactively get behind business. Thatmeans being clear about which arethe growth industries and workingstrategically to strengthen them. Onlyfive industries are identified phar-ma, green energy, tourism, advancedmanufacturing and aerospace anddescribed as the industries of thefuture. It would be fantastic to see allthose areas grow, though it will betough to remain competitive in manu-facturing. Yet Britains real powerhous-es the City, including financial,professional and business services marketing, media, the creative indus-
tries, education and so on are not evenmentioned. Technology only gets asmall mention, with the gimmickyplan to set up a new Tech City near theOlympics.
Out of an 11-page speech, banks(which pay more tax than any otherindustry) are given one short para-graph to inform them that the coali-tion doesnt believe the industryshould be shrunk. They should bethankful for small mercies, but thegovernment is clearly more interestedin spin and talking about trendy orpolitically-useful industries than dis-passionately working out wheregrowth is going to come from.
The idea that we are going to seereal changes in the way localeconomies work because of electedmayors, a network of technology andinnovation centres, and local enter-prise partnerships coalitions of busi-ness, council and communities islaughable. These will, at most, have atiny impact. What is really needed is amassive shift in incentives to set up
new firms, hire people and sell prod-ucts as well as a drastic shift in incen-tives in the labour market.
One option would be to turn wholeregions into enterprise zones with zero
corporation tax and a right to opt outof red tape. Instead, the latest hike innational insurance and the bankingtax will destroy jobs. Yet the coalitionunderstands the fundamental truth ofsupply-side economics and acceptsthat lower tax rates creates jobs: itsPatent Box, which Cameron boastedabout, offers a 10 per cent tax rate onpatent income to encourage compa-nies to experiment, innovate andinvest in the UK. So if tax cuts workwith patents, why not do the same inother areas to boost enterprise?
And surely he cannot believe that hewill make the next decade the mostdynamic and entrepreneurial in ourhistory? More so even than during thegreat industrial years of the 19th cen-tury? All in all, not a great speech.
[email protected] me on Twitter: @allisterheath
drop in underlying sales in the 21weeks to Christmas eve.
Mothercares results saw sharesdrop 6.6 per cent yesterday.
It looks to have been the snowthat caused the large decline, saidGeorge Buckley of Deutsche Bank. Inthe fifteen years that this survey has
been published, in only six previousmonths have we witnessed such alarge decline as this.
The weather could have a biggerimpact than in previous years, saidNeil Blake of the Ernst & Young ItemClub.
ECONOMICS: P14
NEWS | IN BRIEF
Morgan Stanley shifts execsInvestment bank Morgan Stanley hasmoved Colm Kelleher, co-president ofinstitutional securities, to London in apromotion giving him responsibility forEurope, the Middle East and Asia exclud-ing Japan. He joins Walid Chammah,now chairman of Morgan Stanley
International. The move supports thebanks international growth push andstrengthens its emerging markets pres-ence.
Brazil moves to curb the realBrazil took another bold move yesterdayto curb its hard-charging currency bymaking it more costly for banks to betthe real will keep strengthening. Thecentral bank introduced a reserverequirement on banks short positions inUS dollars a bet the real will strength-en versus the greenback in hopes ofreducing speculative trading in the for-eign exchange market that has pushedthe Brazilian currency to a two-yearhigh. The real weakened 0.66 per centafter the measures were unveiled to$1.686. It has gained about 13 per centsince last May, and has been dubbed theworlds most overvalued major currency.
EDITORS LETTER
ALLISTER HEATH
7th Floor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.com
EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowNight Editor Katie HopeBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alex Ridley
CommercialSales Director Jeremy SlatteryCommercial Director Harry Owen
Head of Distribution Nick Owen
Editorial StatementThis newspaper adheres to the system of
self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found atwww.pcc.org.uk
Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS
Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]
TRANSPORT SHOPS
British Airways lost 50m Shop sales were down 4 per cent
CONSTRUCTION SERVICES
suffered its first decline since February contracted for the first time since Apr 09
GOLDMAN TEES UP SALE OF JAPANGOLF COURSEGoldman Sachs is ending its long loveaffair with golf in Japan. The USinvestment bank is seeking buyers forits remaining stake in Accordia Golf,the countrys largest golf course oper-ator. The proposed sale comes as Japans enthusiasm for golf is alsocooling the victim of economicwoes, a shrinking population and thegradual relaxation of corporationsgrip over their employees leisuretime.
BLACKSTONE SET TO BUY OFFICE PARKFOR 480MBlackstone is in exclusive negotia-tions to buy one of Britains largestoffice parks for almost 500m($773m) in its biggest UK real estateinvestment for more than 18 months.
Chiswick Park, the 1.1m sq ft officecampus in west London, has come
under offer from the US private equi-ty group for 480m following a com-
petitive sales process beforeChristmas. The price includes theassumption of the debt that backs theproperty.
OBAMA ASKS CONGRESS TO LIFT DEBTLIMIT The Obama administration hasrequested approval from Congress foran increase in the national debt limitof the US, setting up a showdown with newly empowered Republicanlawmakers and warning of cata-strophic economic consequences fordecades if a deal is not reached. In aletter to congressional leaders from both parties, Tim Geithner, US Treasury secretary, urged them tomove quickly to raise the debt ceilingfrom its current level of $14,290bnwell before the threat of default becomes imminent. The Treasuryestimates that the national debt will
hit its upper limit between March 31and May 16.
ASSET STRIP CLAIM OVER BUILDINGSOCIETY DEALKent Reliance Building Society is indanger of having its assets stripped byan American buyout company, it wasclaimed yesterday. Michael Laws, a 30- year member of the society who isfighting an attempt by JC Flowers totake a stake, told a hearing at theFinancial Services Authority that thetwo parties were incompatible bed-fellows.
BRUSSELS PLAN TO STREAMLINE EUTRADE IS UNWORKABLE, SAY CITYLAWYERSPlans to introduce a single Europeancontract law to replace domestic reg-ulations would be expensive and dis-ruptive to businesses, lawyers havewarned. The European Commissionis considering introducing measures
to improve cross-border tradebetween consumers and businesses.
GAZPROM HELD BACK BY ITS COR-RUPT NATURERussias state energy giant, Gazprom,is being held back from global expan-sion by its inefficient, politically-driv-en and corrupt nature, according toleaked US diplomatic messages. JohnBeyrle, the US ambassador to Moscow,gave his opinion of the gas monopolyin 2009, describing the company withinternational ambitions as confused.
EBAY SALES ON MOBILE PHONESTRIPLE TO $2BNEBay's global sales made on mobiledevices have tripled to $2bn (1.3bn), with the UK leading internationalmarkets. The online auction site saidthe popularity of its apps for gadgetssuch as the iPhone has demonstratedthat consumers increasingly want to be able to shop anytime, anyplace,
anywhere. The websites apps weredownloaded more than 30m times.
SARA LEE LIKELY TO SPLIT INTO TWOBUSINESSESSara Lee Corp. is moving ahead withplans to split up its meats and coffee businesses into two separate compa-nies after it rejected Brazilian beefprocessor JBS SAs takeover offer lastmonth, people familiar with the mat-ter said. JBS hasn't ruled out its interestin buying the company, which has amarket capitalisation of about $11bn.
BORDERS IN TALKS WITHRESTRUCTURING ADVISERSAs Borders Group Inc. asks publishersfor leniency on paying bills, the book-store chain has been in discussions with restructuring advisers aboutways to rework its debt-heavy balancesheet, said people familiar with thematter. Borders has been in talks with Wall Street firms that have
worked on many high-profile bank-ruptcies, they said.
WHAT THE OTHER PAPERS SAY THIS MORNING
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THE EU released a set of proposals yes-terday that would give regulators thepower to take over failing banks andimpose haircuts on senior bondhold-ers.
The European Commission, headedby Michel Barnier, published the 100-page document, which is to form the
basis for consultation submissionsuntil 3 March.
The document outlines plans to cre-ate a resolution authority for nation-al regulators, giving them the powerto assume control of systemicallyimportant financial institutions thatare insolvent or failing to comply withthe Basel III capital requirements.
Such a rule would enable regulatorssuch as the Financial Services
Authority (FSA) to appoint a regulator which would take over the boardsresponsibilities with a mandate to pro-tect the stability of the financial sys-tem.
In order to achieve stability, the reg-
ulator could be able to write down bya discretionary amount or convert toan equity claim, all senior debtdeemed necessary.
The proposal is intended to ensurethat taxpayers do not have to assumethe cost of expensive bailouts for col-lapsing banks that are too big to fail.
It would mean that senior bond-holders, as well as shareholders, couldsee their investment wiped out in theevent of a bankrupty.
In order to pay for the cost of wind-ing up a failing bank, the documentalso proposes the creation of nationaldeposit guarantee schemes. These
would be funded by the bankingindustry to ensure that for both reso-lution and deposit guarantee there arerobust arrangements that impose thecosts of any intervention on the bank-ing sector and not on taxpayers.
In addition to unwinding the bank,the document also suggests that theresolution authority has the ability totransfer assets from a failing institu-tion to others willing and able to takeon the risk.
EU proposes
overhaul tostop bailouts
S&P toughens rating rules
*Exclusions
apply,seei
nstore
for
details.
HALF the worlds biggest banks couldface a credit rating downgrade from
Standard & Poors, the US ratingsagency said yesterday as it announcedproposals to review the way it ratesthe industry.
In a sign of the pressure on agen-cies to respond to criticism that theyfailed to flag up weaknesses in bank
balance sheets prior to the financialcrisis, S&Ps stringent new criteria
would consider not only a banks
stand-alone credit profile but alsothat of its parent group or govern-ment.
The criteria, a significant changefrom current rating methodology,
would also see greater scrutiny ofretained earnings and their capacityto cover anticipated losses, andgreater emphasis on risks related tocomplex off-balance-sheet derivatives.
We are now emphasising structur-al changes in the economy, a banks
business position, and its financialstrength as key drivers of changes increditworthiness, it said.
In a trial assessment of 138 banks,more than 40 per cent saw theirstand-alone credit rating lose onenotch or more. For roughly half ofthe largest banks, the results show
that the proposed criteria wouldresult in downgrades, it said.Fewer than a fifth of banks cur-
rently rated A-1 or higher would see adowngrade while only about 15 percent of long-term issuer credit ratings
were significantly affected. The new rules would apply to
retail, commercial and corporate andinvestment banks.
BY JULIET SAMUEL
EU REGULATION
BYALISON LOCK
BANKING
MARTIN Wheatley is considered fron-trunner in the list of candidates tolead the new UK consumer protectionagency to be established next year.
Wheatley, the current head of HongKongs financial regulator, is consid-ered a leading candidate to head thenew Consumer Protection andMarkets Authority, which will be spunout from the Financial Services
Authority when it is broken up in2012. A final decision on the chosen
head is expected within weeks, whileWheatley plans to leave his post in June.
Wheatley leads shortlistfor consumer watchdog
REGULATION
News 3CITYA.M. 7 JANUARY 2011
EUROPEAN PROPOSALS: THE BASICS
Purpose of the regulationsThe European Commission (EC) hasreleased a consultation document layingout a framework for regulations intendedto prevent taxpayers having to bear thehuge cost of bailouts when systemicallyimportant credit institutions go bust. Therules would apply to all financial firms,
however, and not just those currentlydeemed too big to fail.
TimelineThose concerned have until 3 March tosubmit responses to the consultation. Thenew regulations will come into effect in2013 and the document attempts to reas-sure current bondholders by stating thatany debt issued before then will not beaffected. However, if an institution cannotpay back its debts and they are restruc-tured, the new rules could apply.
Resolution authorityThe centre-piece of the new regulationswould be a resolution authority fornational regulators. This would give bodieslike the UKs Financial Services Authority(FSA) the power to take over insolventinstitutions that threaten the financial sys-
tem and to either restore them to stabilityor wind them down in an orderly manner.The aim is to avoid the panic that followedthe sudden default of Lehman Brothers inOctober 2008.
Funding the wind-downSince winding down a huge institution canincur considerable costs, the proposals alsosuggest the creation of national depositguarantee schemes: a fund to meet thesecosts. The EC suggests that the scheme isfunded by a toll on banks so that taxpayers
do not have to pay for it.
Imposing losses on bondholdersThe resolution authority would also giveregulators the power to impose losses onbondholders when a bank collapses.Currently, although shareholders can loseeverything, bondholders very rarely suffer
a wipe-out. Under these proposals, a regu-lator in charge of an insolvent bank coulddecide that even senior bondholders mustbe forced to take losses or that their bondsbe converted into equity.
Transferring assetsA regulator winding down a bank couldalso be able to transfer its assets to otherwilling institutions that she deems able totake on the risk.
Prevention of certain activitiesIn a more contraversial suggestion, theproposals also state that regulators shouldbe able to force a financial institution tostop engaging in certain activities that theythink are too risky.
ConcernsThe ECs struggle will be to craft rules that
enable regulators to effectively preventbailouts, but to avoid making regulatorsoverly powerful for fear of irresponsible useof the new powers.
European Banking AuthorityIt is not yet clear how the rules will relateto the newly established European BankingAuthority, the successor to the currentCommittee of European BankingSupervisors (CEBS). The EBA could beresponsible for overseeing implementationof the rules in European nations.
THE Tchenguiz family trust is finalis-ing a debt-for-equity swap with Bank
of America Merrill Lynch that will seethe bank take a major stake in UKproperty management firm Peverel.
The US lender, which owns an esti-mated 100m of Peverel debt, mayacquire a controlling stake. The stakesize and deal structure have beenunder discussion for more than amonth, sources told City A.M.The moveis designed to reduce Peverels interestpayments, which are barely covered byits annual 11m pre-tax profit.
Tchenguiz trust tocede Peverel stake
PROPERTY
RETAIL giant Tesco yesterday namedthe eight-man team to lead its UKoperation from March, reporting tonew UK chief executive, RichardBrasher.
Noel Robbins becomes chief operat-ing officer, alongside new commer-cial directors Per Bank, and Laura
Wade-Gery. Kevin Grace becomesproperty director; David North will
become corporate affairs director andJudith Nelson personnel director.
UK finance director Mike Iddon andmarketing director Carolyn Bradley
will stay in their current posts.
Tesco namesincoming UK team
RETAIL
Martin Wheatley iscurrently the head ofthe Hong KongSecurities and FuturesCommission
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Technology News 5CITYA.M. 7 JANUARY 2011
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LINKEDIN, the social networking sitefor professionals, plans to go public in2011 and has selected its financialunderwriters, according to sourcesfamiliar with the situation.
Morgan Stanley, Bank of Americaand JPMorgan are among the bookrunners. Bankers made their pitchesto the privately-held company inNovember.
An IPO is just one of many tacticsthat we could consider, a spokesman
for LinkedIn said yesterday. Hedeclined further comment.
Internet companies such asLinkedIn and Zynga, a popular makerof online social games, are consider-ing offerings well ahead of a potentialIPO of Facebook.
Some of these companies want togo public because they want to beatFacebook and others [to get to an IPOfirst], said one of the sources.
If Facebook went public beforeLinkedIn, do you think anyone wouldpay that much attention toLinkedIn?
Facebook is not expected to file fora public offering until late 2012,Facebook board member Peter Thielsaid in September.
But that could change. Regulatorsare scrutinising a $500m (323.6m)investment and a commitment to
raise at least $1bn more in Facebookthis week by Goldman Sachs andDigital Sky Technologies, one of thesources said. LinkedIn is hoping toattract investors on its reputation asone of the webs fastest growingsocial network sites.
LinkedIn eyespublic listingplan for 2011
GOLDMAN Sachs stopped takingorders for shares in Facebook yesterday,with analysts saying the firm was inun-dated with offers from investors want-ing a piece of the action.
Some said that would-be investors were prepared to subscribe for $3bn(1.9m) of equity in the social network-ing site, twice as much as is likely to berequired.
Facebook is only committed to tak-ing $500m of investment, but is expect-ed to take up to $1.5bn.
Because of the high level of support,Goldman will have to choose howmuch of the stock investors will eachreceive, with many allocations expect-ed to be significantly downsized from
the amounts requested.The massive interest in the invest-
ment, reminiscent of the days of thetechnology bubble of the late 1990s,comes despite little information beingmade available about how Facebookgenerates its revenue.
Investors were given an offer docu-ment providing some of the mostdetailed financial information to cometo light so far about Facebook, showingit earned $355m in net income in thefirst nine months of 2010 on revenueof $1.2bn.
Goldman Sachs declined to com-ment last night, citing US regulations.
Investors are being asked to sub-scribe a minimum of $2m and committo not selling shares until 2013.However, hundreds of Goldman part-ners are able to buy shares without
being subject to the $2m minimum.Goldman has been criticised by
some for being riddled with conflictsof interest on the deal. It is both receiv-ing commission from Facebook forraising these initial funds while put-ting itself in prime position to act as anadviser on any potential money-spin-ning flotation, slated for next year.
There are also some suggestions thatGoldmans valuation of the company,at $50bn, is too high.
Dharmash Mistry, a partner atEuropean venture capital firmBalderton Capital and an investor inseveral early-stage technology firms,said: Are expectations ahead of reali-ty? Its a question-mark as to whetherits real and all the theory is going toplay out or if its a bit of a bubble.
He added that an appropriate com-
parator for Facebooks value would beChinese social networking siteTencent, which has a market capitalisa-tion of HK$326bn (27bn) on the HongKong stock exchange.
Would-be investors in Facebookthrough Goldmans special scheme, which include hedge funds, privateequity groups as well as Goldman asso-ciates, received an invitation to bid forstock at the banks $50bn valuation.
It was phrased as follows: For confi-dentiality reasons, I am unable to tellyou the name of the company unlessyou agree not to use such informationother than in connection with yourevaluation of the investment opportu-nity. All I can tell you is that it is a pri-vate company, but that its stock tradesin a limited manner on certain privatemarkets.
Investors rush to buy Facebook shares
BY NADIA DAMOUNITECHNOLOGY
CITY VIEWS: HAVE YOU USED LINKEDIN?Interviews by Lottie Mungavin
No, I havent. I dont see any real need to networkonline Id rather meet clients in person.
THOMAS LANE | AON
Yes, I have. I use LinkedIn to keep in touchwith past clients and colleagues.
"I signed up a while ago but havent logged onrecently. If youre not looking to move jobs,LinkedIn isnt that useful.
NICK HOCKING | PRICE FORBES
GRANT MORROW | JUBILEE INSURANCE
Yes. I think LinkedIn is a brillianttool, especially from a recruitmentpoint of view.
DIPO AJENIFUJA | MANAGEMENT
1secEvery second a newmember joins LinkedIn
LINKEDIN IN NUMBERS
7.3minsAverage amount of timespent by global users onthe LinkedIn website
38%Percentage of UKLinkedIn members loggingon at work
67%Percentage of globalLinkedIn traffic generatedby passers-by, who visitthe site once a month
50K+ Salary of the average UKLinkedIn member
500,000
Average number of dailyvisitors to the LinkedInwebsite in the UK
4mNumber of LinkedIn
members in the UK
85mNumber of LinkedInmembers in the world
Facebook founder Mark Zuckerberg will bepleased by the demand for shares
BY JULIET SAMUEL AND DAVID HELLIERTECHNOLOGY
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ARM Holdings was the stand out win-ner at the Consumer ElectronicsShow yesterday, after Microsoftannounced its processors would beused in a new, low-powered version ofthe Windows operating system.
Microsoft signalled it will workwith UK-based ARM on the next ver-sion of its platform in a bid to gaintraction in the next generation ofmobile devices.
ARM has already raced ahead ofestablished rival Intel to corner themarket in low power-usage chips fordevices such as tablet computers andsmartphones, but has been unable to break into the laptop and desktopmarkets so far.
The tie-in will enable Microsoft tooffer a full range of devices includingtablet PCs, boosting the appeal of itsmobile operating system, which chiefexecutive Steve Ballmer stressed is keyto the firms growth plans.
ARMs shares gained 2.25 per centto close at 482p, having added 7.7 percent on Wednesday in anticipation ofthe announcment. The shares were
also propped up by talk that Intel wasconsidering mounting a takeoverattempt, although analysts thoughtthis unlikely.Separately, Microsoft announced ithas smashed forecasts for sales of itsinteractive Xbox accessory Kinect.Ballmers firm had expected to shift5m units over the Christmas periodbut instead sold 8m.
Much of his speech in Las Vegas yes-terday was dedicated to announcingnew ways users would be able tointeract with the Xbox and other Windows software using the plat-form.
He demonstrated an advancedavatar, a computer generated char-acter that is able to recognise facialexpressions.
Arm surges
on Microsoftpartnership
WHILE most of the electronicsworlds eyes were turned towards theConsumer Electronics Show in Las Vegas, Apple which refuses toexhibit at the event quietly openedthe doors to the laptop version of itsapp Store.
Around 1,000 apps were immedi-ately available for download on itsMac range, with millions more set to
be added over the coming months.Angry Birds was instantly catapult-ed to the top of the chart as usersclamoured to destroy green pigs onyet another device.
Apple boss Steve Jobs said: Users aregoing to love this innovative new way todiscover and buy their favourite apps.
At present analysts estimateApples app store contributes just oneper cent of its gross profit roughly$198m (128.1m).
Apple opens doorsto laptop app shop
TECHNOLOGY
Microsoft bossSteve Ballmerannouced a tie-upwith ARM, headedby Warren East(inset)
Picture:REUTERS
Consumer Electronics Show6 CITYA.M. 7 JANUARY 2011
BY STEVE DINNEEN, LAS VEGAS
INTERNATIONALCONSUMERELECTRONICS SHOW
2011
ANALYST VIEWS: HOW IMPORTANT FOR ARMIS THE TIE-IN WITH MICROSOFT? Interviews by Marion Dakers
VIJAY ANAND | ESPIRITO SANTO INVESTMENT BANK
It will give it a foothold in the PC and laptop mar-ket that until now has been dominated by the Intel andMicrosoft partnership, although this won't make a differenceto earnings until the next version of Windows. Sell.
RICHARD HOLWAY | TECHMARKETVIEWS
The news shows that ARM is one of those compa-nies that has managed in the last couple of years to bring allits stars into alignment. It is the leader in chips for most new
devices. Intel should be shaking in its boots.
ANALYSIS lARM
420
380
340
460
500
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p 482.006 Jan
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SONY DISMISSES DOUBTS OVERTHE FUTURE OF 3D TELEVISION
CITYA.M. 7 JANUARY 2011 7
BY STEVE DINNEEN, LAS VEGAS
INTERNATIONAL
CONSUMERELECTRONICS SHOW
2
011
TABLET WARS
Samsung and Panasonic hope to take a bite out of Applewith their iPad and iPod rivals, finds Steve Dinneen
SAMSUNG and Panasonic upped theante in their battle with Appleyesterday, both releasing productsthat will directly compete with
Steve Jobs' core stable of products.Samsung, the firm that has comeclosest to offering a viablechallenge in the tablet wars with itsGalaxy Tab, unveiled a slick newdevice designed to compete withApple's sleeper success, the iPodTouch.
The Galaxy Player (left) is the firstnon-smartphone to run Googles
Android operating system. Thewi-fi device will
allow usersto access adatabaseof apps inthe sameway iPodTouch userscan down-load from theApple Store.
Samsung
alsoannounced anew phone ithopes will helpknock theiPhone 4 from itsperch. The firmsays the phone is
the thinnest in itsstable and will sit alongside theGoogle Nexus S which it alsomanufactures at the top of its
range.In a bid to attract users to buy mul-
tiple Samsung devices, the Koreanfirm has also launched a Media Hubthat will allow easy syncingbetween units.
City A.M. got a sneak preview ofthe new products ahead of theirofficial launch at the ConsumerElectronics show in Las Vegas today.
Samsung has already chipped awayat Apples dominance of the tabletmarket with its Galaxy Tab, which hasshifted an impressive 1.5m units since
its release. The firm announced it willbegin shipping wi-fi onlyversions of the device in the firstquarter of 2011 but did not givepricing information.
Panasonic also announced itsarrival in the tablet market yesterdaywith its Viera Tablet (above right).The device is designed to interactwith its new range of smart TVs, aswell as access the internet. The devicewill be available later this year.
SONY was among a raft of top elec-tronics firms to place 3D technologyat the forefront of its growth plansat the Consumer Electronics Show inLas Vegas yesterday, writes Steve
Dinneen. The Japanese firm showcased its
new flagship range of 3D T Vs, prom-ising the format will change the waypeople watch video content.
Chairman and president Sir
Howard Stringer said his firm willaggressively pursue 3D, dismissingdoubts about the long-term future ofthe format.
He said: People greeted colourand HD with scepticism. We will pre-
vail with this technology.Sony Electronics president Phil
Molyneux added: Sony is and willcontinue to be the leader in 3D TV.
We will bring an even greateramount of content to our range ofconnected TVs. In all, 27 new Bravia
TVs will launch in 2011. The firm also unveiled 3D cam-
corders and digital cameras it says will help bring the format to themainstream.
Panasonic also placed 3D at theheart of its new product range. Thefirm predicts a staggering 32 percent of TV sales will be in 3D by 2014,and launched five new TVs offeringthe platform.
Panasonic consumer electronicspresident Shiro Kitajima told theConsumer Electronics show audi-ence 3D will change the way we
watch TV. He said: At one time yousat in front of your TV but it is
becoming a much more interactiveexperience.
Both Panasonic and Samsung havealso developed a new range of light-
weight 3D glasses they hope willhelp remove the stigma of wearing
bulky eyewear to enjoy TV.
GOOGLE won a major vote of confi-dence in its mobile phone platform
Android yesterday, after Americassecond largest network said it wouldlaunch 12 new handsets which runthe software.
AT&T announced four times asmany smartphones as it did this timea year ago, backed heavily by Googlesoftware, highlighting the urgency ofits quest to lessen its dependence on
Apples iPhone. The mobile operator, which has
been the exclusive US provider for theiPhone since 2007, is expected to facetough competition early this year
when bigger rival Verizon Wirelessstarts selling the smash-hit Apple
handset. AT&T executives said yesterday at
the Consumer Electronics Show thatit would introduce 20 high-speedsmartphone models in 2011, includ-ing a dozen Google Android devices.
The first of these phones will comefrom from Motorola, HTC andSamsung Electronics.
The Number Two US mobileprovider also said it would sell atablet computer from Motorola, butdeclined to give further details.
AT&T launches12 new Googlesmartphones
Consumer Electronics Show
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CLINTON Cards issued a profit warn-ing yesterday after a sales drop.
In the five weeks to 1 January thecompany suffered a two per cent fallin its like-for-like sales. The greetingcard retailers overall like-for-like salesin the second half of 2010 dropped by2.9 per cent compared to a year ago.
Chairman Don Lewin said the com-pany is trying to turn things around
with a rebranding and redesign ofits stores, as well as a new website
which will be launched soon.The retailer also blamed the snow
and ice for the fall in sales.
MAJESTIC Wine has bucked the trendof retailers turning in poor results fig-ures over the snow-hit Christmas peri-od with a 6.4 per cent sales rise.
Chief executive Steve Lewis said the weather had initially put customersoff venturing out but then there had
been a rush.The figures for the nine weeks to 3
January followed a year of expansionfor the company.
Majestic is delaying the VAT riseuntil the end of this month in anoth-er attempt to help reel in customersin a month where alcohol sales aretraditionally low after the festive
binge.Lewis said: We are pleased with
the figures. After a slow start thingscame good. We are opening newshops this year and are ambitious
about the business.We will be debt neutral by the end
of the f inancial year.
The retailer, which has 160 shops,is planning to open 12 new shops in2011.
Comparable sales during the half-year rose 7.6 per cent, while interimpre-tax profits increased by 20 percent to 7.3m.
In a bid to boost sales, the companyreduced the number of bottlesrequired for a discount from 12 to sixin September 2009 to reflect the UKsmood of austerity.
Majestic seeswine sales upin festive lift
you
gives
If
lemons
life
OWN brand producer of shampooMcBride saw its shares dive yesterday
after the company warned its full-year performance may be at the lowerend of expectations due to a toughretail outlook, especially in the UK.
In a trading update for the sixmonths to 31 December, McBride saidrevenues had risen two per cent,largely driven by growth in centraland eastern Europe.
The board believes that the full- year outlook may be towards thelower end of its expectations, thecompany said.
McBride warnsof tough year
Clinton Cardsin profit alert
BY JOHN DUNNE
RETAIL
RETAIL
RETAIL
Chief executive Steve Lewis saw a late rush on his stores Picture: WWW.FOVEA.TV
Consumer News8
ANALYSIS lMajestic Wine
360
340
320
380
400
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p399.00
5 Jan
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ASDA has guaranteed to sell 15,000grocery products at least 10 per centcheaper than all of its big rivals.
The UKs second largest chain behind Tesco is promising voucherrefunds if customers are chargedmore.
Asda chief executive Andy Clarkesaid: The Asda Price Guarantee cutsthrough all the phoney claims andheadline numbers, and shows whenit comes to saving people money, wemean business this year.
Asda is owned by the US retail
giant Walmart.
MOTHERCARE has issued a profit warning after the winter weatherdented its performance over theChristmas period.
Like-for-like sales in the last threemonths of 2010 fell 5.8 per cent at themother and baby retailer as the snowand ice took its toll, it said in a trad-ing statement yesterday.
Toy sales were hardest hit after thefirm cut off Christmas online ordersearly to ensure delivery.
The retailer said the poor weatherhad badly hit its out-of-town shop-ping centres.
It warned that annual gross profitsfrom the UK would be lower than the41m previously stated, adding thatthe consumer environmentremained difficult.
However, the firm has continued tosee strong growth in its international
business where sales grew by 17.6 percent between September and Januarycompared with the same period a
year earlier.Ben Gordon, Mothercares chief
executive, said: In the UK, after a
strong start to the quarter, sales wereimpacted significantly by the adverse
winter weather conditions.Keith Bowman, equity analyst at
Hargreaves Lansdown said: Despitegrowing international sales, analready challenged UK business nowforms another weather victim.
The groups shift towards out-of-town premises appears to have
worked against it, while like rivalNext, the fragilities of time criticaldirect online Christmas sales have
been exposed. Other retailers,including Next and HMV, blamedpoor weather on their disappointingsales figures when they updated themarket earlier in the week.
Mothercare
sales hit bybad weather
CINEMA chain Cineworld said 2010sales rose 4.7 per cent as a series of
blockbusters packed its venues. The Twilight Saga: Eclipse,
Inception and Harry Potter and theDeathly Hallows (part one) wereamong the big hits which drove sales.
The company said it expected full-year profit to be within the range of
market expectations as the negativeimpact on sales due to harsh winter was offset by a strong performancefrom the rest of the year.
The year saw Avatar and Toy Story3 in 3D become the highest and sec-ond highest grossing films respective-ly in UK box office terms, thecompany said in a statement.
The company, which operates 801screens from 78 sites, said the poor
weather last month hurt box office
sales as potential cinema-goers strug-gled to get out but overall the trendwas positive.
For the 52 weeks to 30 Decemberthe companys box office sales rose4.2 per cent, while retail revenue fell1.5 per cent.
Cineworld also said it was confi-dent of its performance in the yearahead, supported by an attractivefilm release programme for 2011,
with more 3D films in the pipeline.
Cineworld boosted by stringof blockbuster film smashes
AFFLUENT overseas shoppers were cutoff from London by travel chaos, jew-eller Theo Fennell said as it warnedon profits yesterday.
Fennell saw like-for-like sales dropseven per cent in December. Sales onexpensive pieces suffered as interna-tional customers stayed away, thefirm said. The adverse weather con-ditions significantly reduced footfallto the stores from high-end UK clientsand international clients.
Theo Fennell had enjoyed a 22 percent surge in like-for-like retail sales
in the first week of December.
Theo Fennell hitby travel chaosAsda vows tocost 10pc less
BY JOHN DUNNE
RETAIL
RETAIL
RETAIL
Harry Potter and the Deathly Hallows has proved a money-spinner for Cineworld
BY JOHN DUNNELEISURE
Consumer News 9CITYA.M. 7 JANUARY 2011
ANALYSIS lMothercare
560
520
480
600
640
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p 565.006 Jan
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THE NERDSREVENGE:
ONLY ELITESNEED APPLYAN investment bankers quandary: howdo you get your favourite clients to investa large chunk of cash in a private firm onthe basis of little financial informationand a huge valuation?
If anyone knows, its those ex-IvyLeaguers at Goldman. Surely practised inthe art of sending out intriguing invita-tions to events for secret societies,Goldman bankers sent out a 400-wordinvitation to tempt investors toward a$2m minimum investment in Facebook.
When you have the chance, I wantedto find a time to discuss a highly confiden-tial and time sensitive investment oppor-tunity in a private company, says the
mysterious missive.For confidentiality reasons, I am
unable to tell you the name of the compa-ny, it teases. It only needed a wax seal.
Of course, the presentation is particu-larly fitting if you believe the story of therecent movie The Social Network, a semi-fictionalised account of Facebook founderMark Zuckerbergs brief spell at Harvardbefore he dropped out.
The film supposes that he created thewebsite in order to curry favour with theprivileged kids who populate Harvards
As for stock-picking global-ly, Boyle insists that not even
the psychic Paul the Octopus,who so mysteriously predictedthe outcome of many a World
Cup match before he died,would have had trouble in 2010,given the backwards progress in
fashionable markets like China andBrazil. An unfortunate way to loosea few million squid.
ANT ON DECKShoppers at Land Securities One
New Change the Citys only seven-day mall might have been bemused to
come across annoyingly chirpy enter-tainment duo Ant and Dec on the roofterrace yesterday. It seems the cheerfulpair were busy filming for Britains GotTalent. The Capitalist has never been ableto remember which of the two boyish pre-senters is which, but the important mat-ter was that they both seemed to fitcomfortably under one Union Jackumbrella.
exclusive Final Clubs, party clubshoused in mansions.
Now, it seems, Facebook equity is itselfthe grand prize open only to a select few.The geek gets the last laugh.
RUN OUT OF TOWNEngland cricket fans might have had amerry time yesterday, as the nationalteam streaked ahead and is likely toclinch an Ashes victory today but bookieSporting Index wasnt quite so jubilant.
With the original market in favour of Australia at 90-130 runs, those BarmyArmy punters who bought in at 10 a runcame away with a cool 9,420 by the endof the days exertions, as England soared
to 852 runs ahead of the Aussies. As a spokesman for the bookie sum-
marised it: A severe case of the runs atSporting Index.
FINE WINESIn a review of last years investmentopportunities, Robin Boyle, managingdirector of investment company AthelneyTrust, has highlighted a particularly goodbet: The value of investment-grade Claretrose 32 per cent on the back of demandfrom Asia, he wrote in his summary, butwine has a great advantage over all othertypes of investment in that winners andlosers may buy the stuff the former tocelebrate, the latter to commiserate.
Justin Timberlake (r) and Jesse Eisenberg play lead roles in The Social Network
The Capitalist10 CITYA.M. 7 JANUARY 2011
EDITED BY
JULIET SAMUELGOT A STORY? [email protected]
Forconfidentialityreasons,
reads theGoldman note,I am unableto tell you thename of thecompany.
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CONSTRUCTION firm Costain madean increased all-share offer for strug-gling business services groupMouchel yesterday, which valued thefirm at around 150m, excluding itsnear-100m debts.
Mouchel, which acts as a consult-ant on infrastructure projects, reject-ed the offer yesterday afternoon,claiming that the bid significantlyundervalued the business.
Costain said it would offer 0.5947new shares for each Mouchel share.
The offer values each Mouchel shareat about 135p per share, based on
Wednesdays closing price.Costain said Mouchels refusal
denies its shareholders the opportu-nity to have a major stake in a wellcapitalised, financially efficient,enlarged business, with a clear strat-egy for future profitable growth.
In December, Mouchel rejected an
approach from Costain that valuedthe firm at 119m, two weeks after
Mouchels lenders hired Deloitte toreview the business after peersConnaught and Rok fell into admin-
istration.Execution Noble analyst DavidBrockton was not convinced by thenew offer, saying in a note that theall-share bid represents a retrogradestep for Mouchel shareholders.Assuming Mouchel can successfullyrefinance its debt we would favourits prospects as a stand-alone entity
versus the current revised offer fromCostain, he added.
Mouchel was courted by supportservices rival VT Group, which
walked away last March after offer-ing 330m.
Meanwhile, Costain said in a pre-close trading update that it has anorder book of 2.4bn, compared with2.6bn at the end of 2009. It saidannual results in March are set to bein line with the boards expectations.
Shares in Mouchel closed up 18.6per cent at 127.75p yesterday. Costain
shares lost 1.76 per cent yesterday toclose at 223p.
Mouchel pansCostains newtakeover bid ROLLS-ROYCE enjoyed a boost to itsshares yesterday after signing a 3.2bncontract with British Airways for its
Trent 900 and Trent 1000 engines.Confirmation of the deal, which was
first mooted in 2007, will allow Rolls-Royce to book the orders on its balancesheet.
Rolls-Royce chief executive Sir John
Rose said: We are pleased that BritishAirways continues to put its trust inour world-class Trent engine technolo-gy and service provision.
Rolls-Royce shares gained more thantwo per cent following the announce-ment, and closed up 0.76 per cent at659p, outperforming a sluggish FTSE100.
The stock took a battering inNovember when a Qantas flight wasforced into an emergency landing aftera Rolls-Royce Trent 900 engine failed.
Today it takes on perhaps dispropor-tionate significance because havingBritish Airways sign up for Rolls-Royce
Trent 900 engines for its A380s afterwhat happened with Qantas is reallyrather reassuring, said Sandy Morris,an analyst at RBS.
Airlines are staying away from fur-ther hedges on jet fuel purchases, bet-ting that a recent surge in oil prices to
two-year highs will slow, according tofigures from Reuters.
Rolls-Royce isboosted by BAengine order
Costain, under chairman David Allvey, has made a second bid for rival MouchelBYMARION DAKERS
M&A
AVIATION
News 11CITYA.M. 7 JANUARY 2011
COSTAIN hired Investec to fight itscorner during the protracted battle totake over Mouchel, with head ofinvestment banking David Currie lead-ing the team.
Currie, a qualified engineer, hasbeen with Investec since 1993. He hasexperience in private equity, flotationsand M&A, and is also currently advis-ing Irish convenience food makerGreencore as it works towards merg-ing with Northern Foods.
He was part of the team advising
PartyGaming, before Investec quit thejob in 2005 amid reports about thequestionable legality of online gam-bling in the US a controversy thatcontinues to rumble on.
He is not to be confused with DavidCurrie, chief executive of private equi-ty at Standard Life Investments.
Also working on the Investec teamare Charles Batten and James Rudd.Batten joined the firm in 2009 fromDresdner Kleinwort, and recentlyworked as joint adviser to privateequity firm Cinven during its takeoverof water meter company Spice.
Rudd worked with KiFin during its84.5m cash takeover bid for proper-ty company Minerva in 2009.
RBS Hoare Govett is advisingMouchel, led by Neil Collingridge, SaraHale, Stephen Bowler and John
MacGowan.
DAVID CURRIE
INVESTEC
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HERMES family shareholders wonclearance yesterday to pool theirstakes without having to buy outother investors, boosting theFrench luxury groups defenceagainst rival LVMH.
A majority of Hermes familyshareholders decided last month tocreate a holding company to groupmore than 50 per cent of the com-panys equity as a defence againstLMVH, which recently lifted itsstake to 20 per cent.
The holding, approved by Frenchmarket watchdog AMF, is meant todiscourage LVMH from attemptingto acquire control of the maker ofBirkin and Kelly handbags.
But the holdings creation need-ed the AMFs exemption from hav-ing to make a tender offer for otherminority shareholdings, which
would have been costly.It was already a fortress, this
decision means that the walls havebeen heightened, said a source.
Hermes shares closed down 1.9per cent at 155.05 (96.7), valuingthe group at 16.33bn.
But not all the around 70 familyshareholders, descendents of thePuech, Dumas and Guerrand fami-lies who in total control around 73per cent of Hermess share capital,are part of the holding.
The AMF said it would publishan explanation of its decision soon.
Hermes family shareholders saidin a statement: This decision
clears the way for our project toreclassify (our shares) which under-scores the familys unanimous willto preserve Hermess culture.
The minority shareholders asso-ciation ADAM said it would verylikely appeal against the decision.
LVMH declined to comment.
Hermes makes gainin LVMH bid defenceBYHARRY BANKS
RETAIL
REDUCED FEARS of a double diprecession could lead to the FTSE100 hitting 6,900 by the end of this
year, according to Standard Life.Low-valued stocks, including
those of BP and Barclays, couldhelp to push the index up 15 percent despite an anticipated bumpyride, according to the Edinburgh-
based firm. The insurer correctly predicted
the FTSE 100 would rise 13 per cent
in the final quarter of 2010 to breach the 6,000 mark, at a time
when it stood at 5,325 points. The FTSE 100 yesterday contin-
ued strongly closing at 6,043.86.Homebuilder Galliford Try, as well asmining firm Vedanta Resources andelectronics retailer Dixons, are alsostocks picked by Standard Life thatcould benefit from sustained globaleconomic reovery.
Chief executive of Standard LifeInvestments Keith Skeoch said:Continued global economic recov-ery and UK equities high exposureto overseas earnings will deliver
another year of strong cash flow andearnings growth for UK corporates.
Standard Life predicts the FTSE 100will surge to 6,900 by the years endMARKETS
IRISH prosecutors will take some timeto determine any charges arising froma long-running fraud investigationinto nationalised lender Anglo IrishBank, Irelands director of corporateenforcement said yesterday.
The Office of the Director ofCorporate Enforcement (ODCE) isprobing events leading up to thenationalisation of Irelands third-
biggest bank in early 2009.However with one file and almost
4,000 pages of documents any deci-sion on charges is some time away.
The ODCE said its reports relate tothe provision of a loan by Anglo to oneof its directors, the non-disclosure ofcertain directors loans, the provision
to a number of persons in 2008 offinancial assistance for the purchaseof its shares and the communicationof possible false or misleading infor-mation in public statements.
Details of probeinto Anglo Irishbank revealedby Eire officials
EUROZONE CRISIS
News12 CITYA.M. 7 JANUARY 2011
CHINA TO BUY 6BN SPANISH DEBT
CHINESE vice premier Li Keqiang has said his country is willing to buy about 6bn(5.1bn) of Spains public debt. Li said at a meeting that China was willing to buy asmuch Spanish public debt as its Greek and Portuguese debt holdings combined. Theysaid that added up to about6bn in Spanish government bonds. Picture: REUTERS
THE European Central Banks inter-vention in Eurozone sovereign bondmarkets means that the central bankamounts to 20 per cent of mar-ketable stock, according to analysis
by Goldman Sachs. The note, released yesterday, says:
The ECB remains the main buyer ofPortuguese government securities. Itadds: The ECB has effectivelyremoved from the private marketsroughly the equivalent of the entiregross supply of Portuguese medium-to-long-term government bonds for2010.
The ECB is notoriously secretiveabout whose debt it is buying for fearof panicking bond markets if it isseen to intervene drastically.
However, it publishes weekly totals
for its purchases, which show that itbought 165m (138.7m) last week,the lowest level for several weeks dueto the Christmas holiday. In the three
weeks previously, it bought1.12bn,603m and 2.67bn.
Meanwhile, France held a long-dated debt auction yesterday, selling
just shy of up to 9bn euros of 10, 15,and 20-year government bonds.
The sale saw decent demand butwith yields rising since the previoussale.
These auctions are doing welland its relatively important for themarket psychologically because there
was some concern at the end of last year, even for triple A paper, said
BNP Paribas rate strategist PatrickJacq.
Figures showing the ECBs pur-chases in the last week will bereleased on Monday.
Goldman: ECB hasbought up a fifth
of Eurozone bondsBY JULIET SAMUEL
EUROZONE CRISIS
STANDARD LIFES 2011 STOCK PICKS
1 Galliford Try
2 Vedanta Resources
3 Barclays
4 BP
5 Dixons
ANALYSIS lHermes International
190
210
29 Oct 18 Nov 30 Dec8 Dec11 Oct
170
150
130
155.055 Jan
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SHARES IN BP rose yesterday morningfollowing the early release of a USpanels findings into the DeepwaterHorizon disaster, which pinnedblame on both the oil giant and itspartners.
An excerpt from the report criti-cised the oil industry for systemicrisks and cost-cutting, but also point-ed to failures by contractorsTransocean and Halliburton.
Analysts predicted that the report
from the US National Commission setup by Barack Obama following thespill would make it harder for victimsto succeed in lawsuits against BP forgross negligence.
Richard Griffith from EvolutionSecurities said: The report may pro-
vide grounds for BP to claw backmonies from licence partners andpossibly Transocean and Halliburton. While todays report is damning itdoes in our view underpin out targetprice of 510p.
Analysts at BNP Paribas agreed,adding in a note: This is the criticaldecision as, if not proved, BP canreclaim 35 per cent of total costs fromits partners (having taken 100 percent to date): it is also positive forfuture Gulf of Mexico activity.
Junior partners at the Macondowell, Anadarko and Mitsui, both saw
their shares dip yesterday. Transocean and BP both rose in
early trading, though BP later shedgains to close down 0.5 per cent at496.9p.
The US commissions full report isdue out on Tuesday.
BP sees stockrise after USspill report
CARPHONE WAREHOUSE co-founderDavid Ross started to dismantle hisproperty empire yesterday with the240m sale of the Drake Circus shop-ping centre in Plymouth.
Ross firm Kandahar sold the mallto British Land at a net initial yield ofsix per cent, the buyer said in a state-ment yesterday.
Kandahar hired property consult-ants Jones Lang LaSalle and BriantChampion Long last September toadvise on options for the company, which breached its banking
covenants in December 2009.There were several parties interest-
ed in purchasing the entire companyat one stage, but Ross has resorted toselling off properties in an effort topare losses.
Kandahar and JLLS declined tocomment yesterday, while Briantcould not be reached.
British Land, the UKs secondlargest real estate trust, already ownsseveral shopping centres around theUK including Surrey Quays mall inRotherhithe and the 1.5m square footMeadowhall centre in Sheffield.
Snow to blame as top USretail results miss targets
A FLURRY of US retail results releasedyesterday failed to meet market pro-jections, despite gains in same-storesales for several companies.
After heavy snowfall hit theEastern seaboard just afterChristmas, some companies blamedthe blizzard for their shortfall, withretailers ranging from departmentstore operator Macys and discounter Target to teen clothing store American Eagle Outfitters amongthose whose results fell far short ofWall Streets forecasts.
December sales at stores open atleast a year for the 28 major retailers
tracked by Thomson Reuters rose 3.1per cent, below forecasts of a 3.4 percent increase.
Though Macys same-store salesrose 3.9 per cent, this was still belowestimates of 4.5 per cent. Macys chiefexecutive Terry Lundgren said that bad weather was to blame for thedeficit. We did a lot better before thesnow hit, no question about it, hesaid.
Shopper numbers were well down,with research firm ShopperTrak say-ing that 26 December, which was thethird-biggest shopping day of 2009, would struggle to make the top 10this year.
British Land snapsup Plymouth mall
BY MARION DAKERSENERGY
PRESIDENT Barack Obama yesterdaysaid he had chosen JP Morgan Chaseexecutive William Daley to be his newWhite House chief of staff, retoolinghis team with a politically savvy busi-nessman at the helm.
He possesses a deep understand-ing of how jobs are created and howto grow our economy, Obama said.
Daley is head of corporate andsocial responsibility at JP Morgan,where he sits on the executive board.He will replace Rahm Emanuel, wholeft the administration last year.
Obamas chiefof staff is JPMorgans Daley
PROPERTY
POLITICS
US RETAIL
The US panels findings are good news for BP chief executive Bob Dudley Picture: REX
News 13CITYA.M. 7 JANUARY 2010
ANALYSIS lBP
700
600
500
400
300
Jan 10 Mar May Jul Sep Nov Jan 11
p
496.906 Jan
At last: Somegood news forBob Dudley
THIS isnt the end, but it is certain-
ly the beginning of the end.Counterintuitively, the spill com-missions report is good news forBP, the best its had in some time.
It censures BP, that is to beexpected. But it also singles out Transocean and Halliburton forblame. The authorities only tookeen to wag a finger from the side-lines also come in for someuncomfortable criticism.
The commissions conclusionsonly reinforce our view that it willbe almost impossible to prove thatBP acted with gross negligence.
For that reason, analysts atEvolution think the total impact ofthe spill will be around $25-$30bnrather than the $40-$50bn beingpriced in by the market. And thats before makes claims againstTransocean and Halliburton.
Its earlier than we expected,
but it could well be time to buy BPagain. If not now, then when?
BOTTOMLINEAnalysis by David Crow
BPs share price tumbled bymore than half following
the Deepwater Horizonexplosion on 20 April, buthas since recovered toaround 75 per cent of itsprevious value
Dont miss breaking news
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SNOW and adverse weather duringDecember were blamed for a con-traction in Britains services sector,yesterday.
The countrys largest sector expe-rienced its first decline for 20months, stalling the recovery.
Yet economists hope businessactivity will pick up this month assuming there is no return to arc-tic conditions.
It is worth noting that inJanuary last year, when the weath-er was similarly disruptive, theindex fell, only to then bounce back the following month, saidSimon Hayes of Barclays Capital.
The business activity index, com-
piled by Markit and the CharteredInstitute of Purchasing and Supply(CIPS), dropped to 49.7, down from53 in November.
All figures below 50 signal a con-traction in the industry. Figuresabove 50 indicate growth.
And levels of new business alsofell, with companies widely blam-ing the poor weather for marketdisruptions, the report said.
Yet respondents still expect theirbusinesses to grow this year.
Its encouraging to see thatbusiness confidence for next yearcontinued to improve slowly withthe promise of stronger economicrecovery, said David Noble of CIPS.
Service sector business expecta-tions increased to 66.5 in the index.
Restaurants, hotels and the
catering industry were particularlyaffected by the weather, as well asrising prices.
Prices increased even on the pre- vious month, according to morethan one in five survey respon-dents.
Input prices increased at thesharpest rate in over two years, thereport said.
Yet competitive pressures pre-vented service providers from pass-ing the price rises onto theirclients. Absorbing the price pres-sures, companies reported adecline in their profitability.
And companies with govern-ment clients reported a weaknessin demand from the public sector,as this years fiscal consolidationprepares to kick in.
Winter freeze hitsUK services sectorBY JULIAN HARRIS
UK ECONOMY
BANKS are increasing their lendingto small businesses and expect toraise the availability of credit inthe coming months, a Bank ofEngland report revealed yesterday.
Yet demand for mortgages is lowand expected to keep falling,according to the credit conditionssurvey.
And fears over falling houseprices are preventing some lendersfrom increasing mortgage loans.
Significantly, the report indi-cates a continuing preference
among lenders to steer away fromhigher risk loans, said SimonRubinsohn of the Royal Institutefor Chartered Surveyors.
While the availability offinance for low loan to valuemortgages [75 per cent and less]has actually increased, it has con-tracted where smaller deposits areput down by borrowers, he added.
However, sales of propertiesworth over 500,000 are attractinghigher loan to value mortgages,according to a separate survey by
chartered surveyors e.surv.Overall, secured lending to
households remained stable in thefinal quarter of 2010, the Banksreport said. Unsecured credit fellslightly.
Yet lending to small businessescrept up for the third consecutivequarter and banks say it will con-tinue to rise.
Last month the Bank expressedconcern about low availability ofcredit. Lending to small businessand individuals has remained sub-dued even as economic activity hasbegun to recover. Weak lending is
more likely to dampen the recoverythan weak demand, it said.
More credit for small UK businessesbut housing market slump continuesUK ECONOMY
Economic News14 CITYA.M. 7 JANUARY 2011
NEWS | IN BRIEF
US jobless claims edge upwardsNew US jobless claims rose to 409,000last week, up 18,000 on an upwardlyadjusted figure of 391,000. However,the underlying trend in unemploymentremains downward, as the four weekmoving average fell 410,750, the lowestlevel recorded since late July 2008. The
decline comes on the back of a surge inprivate sector jobs announced inWednesdays ADP employment figures.Official nonfarm payrolls data forDecember is released lunchtime today.
UK wage settlements hit 2.2pcWage settlements in Britain hit theirhighest level in nearly two years at theend of 2010 but remained below infla-tion, a survey revealed yesterday. Themedian wage rise climbed to 2.2 percent in the three months to November,compared to two per cent for most oflast year, and the highest since the firstquarter of 2009, according to IncomeData Services. UK consumer price infla-tion hit 3.3 per cent in November.
Dutch inflation hits 21-month highDutch consumer price inflation rose to1.9 per cent last month from 1.6 per centrecorded in November, the Central
Bureau of Statistics said yesterday. Thatwas the highest rate since March 2009.According to the statistical office theincrease in inflation was mainly due tohigher prices of motor fuels. German chancellor Angela Merkel saw factory orders grow 5.2 per cent last month Picture: REX
CONFIDENCE in the Eurozone econo-my shot up to a 38-month high inDecember, official figures revealed yes-terday.
The European Commissions eco-nomic sentiment index rose fromNovembers 105.1 to record 106.2 lastmonth its highest level since October2007.
The results were driven by strongincreases in industrial and retail confi-dence, a relief for European shopsafter November data revealed a 0.8 percent fall in retail sales.
We expect brighter news for the all
important Christmas trading period,said Chris Williamson of Markit. Theretail purchasing managers indexindicates that sales rose at the fastestrate for two and a half years in
December, with particularly buoyanttrading in Germany and France.
The Eurozones core economies con-tinue to drive forward, offsettingslumps in troubled peripheral andMediterranean countries.
While business confidence remainsstrong in Germany (and grew by 1.5per cent), both Greece and Spain sawa decline in economic sentiment, andalso in Portugal the economic moodremains depressed, according to INGsMartin van Vliet.
Meanwhile, Germanys industrialboom looks set to continue, after newfactory orders rose by 5.2 per cent inNovember compared to the previousmonth, massively above expectations.
Orders from non Eurozone coun-tries jumped by 14.8 per cent onOctober. It is clear that the industryled recovery will continue, said INGsCarsten Brzeski.
Business sentimentboost for Eurozone
driven by GermanyBY JULIAN HARRIS
EUROZONE ECONOMY
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GERMANYS financial watchdog isinvestigating the role of a key ACSand Hochtief shareholder in the lat-est twist to the Spanish buildersunconventional takeover bid.
Southeastern, the US fund manag-er, holds stakes in both the Germanand Spanish construction groups. Itsdecision to tender half its five percent Hochtief stake to ACSs all-stockoffer was critical in getting the groupover a key 30 per cent threshold.
We are looking into clues relatingto Southeastern Asset Management,
said a spokeswoman for financialmarkets regulator Bafin.
Southeastern revealed it had beenapproached by the financial regula-tor but said there was no allegation of wrongdoing. The US investor hasdenied any suggestion it worked withACS during the bid, and a spokesper-son for ACS said it had not collaborat-ed with shareholders during its bid,and had complied with German law.
Bafin said it did not see ACSs bidfor Hochtief being declared void inits entirety in the foreseeable future,but said it was uncertain when theinvestigation would be concluded.
Bafin probes role of ACSand Hochtief shareholder
M&A
CHINAs Xinmao Group dropped its1bn (645m) bid for Dutch cable-
maker Draka yesterday, leaving ItalysPrysmian free to seal a lower-priceddeal and form an industry leader.
Xinmaos attempt to enter the fibreoptic cable market by buying an over-seas company had been seen as a testof the ability of Chinese companies tocomplete such acquisitions.
But Xinmao, which gatecrashedPrysmians agreed 830m cash andshare takeover of Draka in November,said it would be unable to launch itsbid before Prysmians offer closed.
Xinmao has after careful consider-
ation regretfully concluded that itsintended offer for Draka is no longerfeasible, the Chinese group said.
The group had faced an uphill bat-tle to launch its offer in time as it
waited for Chinese governmentapproval for the move.Prysmians offer, launched yester-
day, is due to close on 3 February 10days before Xinmao had said it couldput its bid to Draka shareholders.
Draka shares, which had been trad-ing between the value of the Xinmaoand Prysmian offers, closed down 8.4per cent at 17.71, just below theimplied value of Prysmians offer of
17.94. Prysmian bounced 9.7 percent to 14.16 on relief it would nothave to raise its bid to win over Drakainvestors.
Draka spokesman Michael Bosmansaid the company had notedXinmaos statement and will moveforward with Prysmian.
Prysmian is being advised byGoldman Sachs, Mediobanca andBanca Leonardo. Drakas financialadviser is JP Morgan and its legalcounsel is Allen & Overy. Xinmao wasadvised by Catalyst Advisers.
Xinmao abandons Draka bidBY HARRY BANKSTECHNOLOGY
News16 CITYA.M. 7 JANUARY 2011
MAYBANK, Malaysias largest lenderby assets, is snapping up Singaporebroker Kim Eng Holdings for $1.4bn(893m), in a move to strengthen itsgrip on the regional stockbrokingindustry and diversify the lenderssource of overseas revenue.
Maybank will pay 3.10 Singaporeandollars per share for a 44.6 per centstake in the broker, before launchinga mandatory offer for its entire opera-tions on completion. The bankinggroup has said it plans to privatiseKim Eng, which the acquisition haspriced at 1.91 times its book value atthe end of September 2010.
Maybank chairman Tan Sri MegatZaharuddin Megat Mohd Nor saidthat the transaction was a great leapforward for the group, with Kim Engoffering an immediate platform toaggressively build up our global wholesale banking capabilities inAsean and beyond.
Maybank, which was previouslylinked with another regional broker-age OSK Holdings, said it has no plans
for further acquisitions in this busi-ness.
Maybanks shares gained 2.74 percent during trading yesterday, closingat 6.00 Malaysian ringits (MYR) onBursa Malaysia, while Kim Eng closed2.66 per cent up at 2.77 ringits.
Shares in Thailands Kim EngSecurities surged as much as 11.9 percent on news of the planned acquisi-tion of its Singapore parent.
The acquisition comes as Southeast Asian markets are on a roll, with Thailand and Indonesia ranking asthe best performing major markets inAsia last year.
Maybank in$1.4bn movefor Kim EngBY HARRY BANKS
M&A
ENRC, the mining group partly-owned by the Kazakh governmentand listed on the FTSE, has beenadvised that by relocating toSwitzerland it could save itself 20ma year in tax.
According to SkyNews, the groupwas given the advice by its auditorsPricewaterhouseCoopers severalmonths ago but the matter has not
been considered at board level.Last night ENRC issued a statement
saying that it had no plans to changeits current arrangements.
ENRC routinely reviews its tax andtreasury arrangements to ensure theyremain efficient and appropriate forits business. ENRC has no currentplans to change its existing arrange-ments, it said.
In the recent past a host of busi-nesses such as Shire, WPP and
Wolseley have relocated out of the UKfor tax reasons and further depar-tures would be embarrassing for thegovernment.
ENRC has been the subject of muchcontroversy because of a dispute ithas had with a rival group over min-ing assets in the Democratic Republicof Congo.
Sources said the PWC plan has notbeen actively discussed and was notacted upon.
ENRC advised by PwC on UK tax moveMINING
BEST OF THE BROKERS
ANALYSIS lTravis Perkins
900
800
1,000
1,100
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p 1,056.006 Jan
TRAVIS PERKINSRBS rates the building materials firm buywith a raised target price of 12.95. Thebroker sees the firms purchase of BSSGroup last month as an attractive earningsdriver over the next two years until theunderlying market recovery takes over in2013. It adds that the acquisition gives thecompany significant buying power.
ANALYSIS lNext
24.5
23.5
25.5
26.5
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p
26.206 Jan
NEXTSeymour Pierce rates the retailer buywith a target price of 25. The brokerbelieves Next had a passable Christmas,demonstrating the strength of its multi-channel sales model. Expectations werelow, according to the broker, and the f irmwould have performed at the top end of itsguidance if it had not snowed.
ANALYSIS lTesco
425
415
435
445
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p26.20
6 Jan
TESCOJP Morgan Cazenove has chosen Tesco asits food retail top pick for 2011, with anoverweight rating and a target price of577p. The broker sees a sharply improvingreturns profile as the firm diversifies. Italso notes that debt is falling. It expectslike-for-like sales excluding fuel to be up 2.5per cent when it reports on 13 January.
To appear in Best of the Brokers email your research to [email protected]
DeloitteThe financial services firm has appoint-ed Andrew Hodge as the new manag-
ing partner of its tax practice. Hodgewill take over from David Sproul, who ismoving to take over as chief executive
in June.
Phoenix EquityThe mid-market private equity firm hasappointed Jim Graham as operatingpartner and Edward Lunken as origina-tion analyst.
Graham joins the company fromCandover, where he has been in a simi-lar role for the past three years. He hasalso worked as a marketing managerfor Orange and in a consultant role atAccenture, before which he was in theNavy for ten years.
Lunken comes to Phoenix from LEKConsulting, where he worked for threeyears. Before that, he worked as a
researcher for the EuropeanCommission.
Collins StewartErik Anderson has been appointed co-head of corporate broking at CollinsStewart. He will work alongside theother co-head, Mark Dickenson, andRoger Lambert, who chairs the division.
Anderson has 23 years experience inthe area and has worked for the lasteight at Investec. Previously, he hasworked at WestLB Panmure and JamesCapel.
WM MorrisonThe grocers corporate division has
appointed four new senior managers,three of them in newly created roles.Richard Lancaster has been promotedto marketing director, replacing AngusMaciver.
The new appointments includeBelinda Youngs to own brand director,Nick Collard to commercial director,and Gordon Mowat as strategy direc-tor.
MarshThe insurance broker has appointedAlan Morton to senior claims advocate.He joins the company from Aon GlobalRisk Consulting. Previously, he has alsoworked at JLT.
CITY MOVES | WHOS SWITCHING JOBS Edited by Juliet Samuel
Syndicate Asset ManagementThe fund management group has promotedJeremy Rance to the role of chief operatingofficer for the group. He will now be in chargeof organising operational performance acrossall of the groups subsidiaries. He joined thecompany in June last year at its subsidiaryAshcourt Rowan, having previously worked atBarclays, KPMG and AMP. At Ashcourt Rowan,he played a key role in buying and intergratingthe Cooperative Banks IFA business.
+44 (0)20 7557 7245morganmckinley.comTo appear in CITYMOVES please email your careerupdates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
ANALYSIS lMaybank
5.0
4.5
4.0
5.5
6.0
22 Oct 5 Nov
MYR
6.006 Jan
Chairman Du KerongsXinmao Group hasabandoned its 645mbid for Dutch-basedcablemaker Draka
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News 17CITYA.M. 7 JANUARY 2011
BRITAINS energy regulator Ofgem yesterday imposed an 8m fine onNational Grid for misreporting infor-mation during a gas mains replace-ment programme between 2005 and2008.
Ofgem will hold a 21-day consulta-tion period on the fine to considercomments from the public.
If the consultation concludes infavour of the penalty, National Grid
will be expected to pay the fine thisfinancial year, Ofgem said.
The gas network operator did not benefit financially from the misre-porting and all detriment to con-
sumers had already been corrected,the regulator said.
National Grid has accepted the fineand does not intend to appeal againstit, a spokesman said.
The energy network company isaccused of various cases of filing inac-curate information, such as claimingto have completed work in one year
when it was only finished the nextyear, a spokesman for Ofgem said.
Another example of misreporting was that National Grid charged forcompleted work twice, he said.
We are disappointed that a mattersuch as this should ever have arisen,National Grid executive director MarkFairbairn said.
Significant enhancements have
been made, including to processesand systems in the mains replace-ment programme within NationalGrid, to ensure the accuracy and com-pleteness of the data provided toOfgem.
National Grid agrees8m Ofgem penaltyBYHARRY BANKS
ENERGY
BRITISH recruitment group Haysreported a 21 per cent rise in second-quarter net fees yesterday, as its over-seas expansion strategy was
vindicated by a recovery to pre-reces-sion levels in many internationalmarkets.
We have now got several countriesboth in Asia and Europe approachingabove pre-downturn levels, saidfinance director Paul Venables, not-
ing an improved performance incountries such as Australia, Germany,
Japan and Spain.Hays, which specialises in placing
office workers, describes itself as the worlds biggest specialist recruiter,although its revenue is about a sixthof Adecco, the worlds biggest staffagency.
Hays said net fees grew more than20 per cent in 19 countries in thequarter. Asia was up 36 per cent andGermany, its largest European mar-ket, jumped 47 per cent.
But the British and Irish market, which has shrunk to 35 per cent of
Hayss overall net fees, was flattenedby a slump in the public sector, where
a 38 per cent drop in fees offsetgrowth of 28 per cent in the privatesector.
Venables said the trough is in sightin the public sector.
We expect our UK public sector business to hit the bottom in theApril, May time. We expect to returnto absolute levels of growth ... from
July onwards.Hays, which has more than 340
offices in 29 countries, is looking tocountries such as China for growth,pledging to increase the number of
consultants there more than four-fold.
BYHARRY BANKS
RECRUITMENT
Notice of Application forgrant of a Premises Licence
NOTICE IS HEREBY GIVEN THAT Land
Securities, 5 Strand, London, WC2N 5AFhas applied to the City of London Corpo-ration on 23rd December 2010 for thegrant of a premises licence to use the
premises One New Change, London, EC4M9AF for the provision of films, live music,recorded music, performances of dance,making of music and supply of alcohol(for sampling purposes) between the
hours of 08:00 and 22:00.
The record of this application is held by theLicensing Authority and can be viewed on the
website www.cityoflondon.gov.uk orinspected at the offices of the City of
London Corporation, Trading Standards(Licensing), Walbrook Wharf, 78-83 Upper
Thames Street, London, EC4R 3TDduring normal office hours (Ring in advance
for appointment)Any person wishing to submit
representations to the application must give
notice in writing to the Licensing Authorityat the address shown above, giving in
detail the grounds for objection by20th January 2011.
Representations must be received by theLicensing Authority by the date given above.
The Licensing Authority will have regard toany representations made when considering
this application.It is an offence under section 158 of the
Licensing Act 2003 for anyone to recklesslyor knowingly make a false statement inconnection with a licensing application.
The maximum fine on conviction is 5,000.
LICENSINGACT 2003
EMBATTLED F&C Asset Managementhas set a date for its showdown withSherborne Investors over its bid toreplace chairman Nick MacAndrewand take control of the board.
F&C shareholders will meet on 3February at Sherbornes request to
vote on whether to oust MacAndrewand director Brian Larcombe andappoint Sherbornes founder EdwardBramson, chairman Ian Brindle andan independent director, DerhamONeill, in their place.
F&Cs board opposes the bid, argu-ing it is destabilising the firm as it
implements a turnaround strategy toreturn it to full value after prolongeduncertainty over its future.
Sherborne has requisitioned thisgeneral meeting without putting for-
ward an alternative strategy and at atime when stability has finally beenachieved, said MacAndrew. Thisunwelcome and opportunistic move
by Sherborne is damaging to the busi-ness and is not in the best interests ofour shareholders.
Key shareholder Aviva, which ownsa ten per cent stake in F&C and 19.5per cent of Sherborne, is known tosupport Sherborne, saying last monthit believes Bramson can deliver a turn-around at F&C as he has in previousinvestments Elementis and Spirent.
Guernsey-based Sherborne, anactivist investor with a track record oftaking control of firms it believes areunderperforming, has built a 17.6 per
cent stake in F&C since August and isnow its largest single shareholder.
It believes F&Cs share price under- values the company and that it hasunderperformed over the long term.
F&C board fightsback as Sherborne
showdown loomsBYALISON LOCK
ASSET MANAGEMENT
Expansion pays off for Haysas foreign fees drive revenue
NEWS | IN BRIEF
HKs richest 40 worth $163bnThe combined wealth of Hong Kongstop 40 billionaires now totals $163bn,adding $28bn to last years figure. Thelatest Forbes rich list sees Chung Kongand Hutchison Whampoa controller LiKa-shing stay on top, with a personalfortune valued at $24bn ($105.3bn). A
third of the top 40 make their money inreal estate development, including thefamily of Thomas and Raymond Kwok,vice chairmen of Sun Hung Kai Properties.
Boom in media sector M&AFifty per cent of M&A transactions byvalue in the media sector took place inthe fourth quarter of 2010, with ana-lysts predicting that the upswing willlast throughout 2011. According to newfigures from PricewaterhouseCoopers,110 European Media deals were closedin 2010, totalling 12bn (10.1bn) indeal value. This was more than a 90 percent rise on the 2009 data.
Skoda sees jump in Czech salesVolkswagen's Czech unit Skoda Autosold a record number of cars worldwidein 2010 and said it aimed to doublesales by 2018. Skoda boosted its globalsales by 11.5 per cent year-on-year to
762,600 vehicles in 2010. The automo-tive industry is a key driver for theCzech economy, which is expected togrow around two per cent this year,according to finance ministry forecasts.
TO GET OURNEWSLETTER:
w
ww.C
ityAM/newsletter.com
ANALYSIS lNational Grid
570
550
590
29 Oct 18 Nov 30 Dec8 Dec11 Oct
p
579.505 Jan
The future of F&C chief executive AlainGrisay has been in doubt after Sherborneraised its stake to 17.6 per cent
Sherborne wants to oust F&Cindependent director BrianLarcombe (left) and chairmanNick MacAndrew (right)
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Planning ahead willhelp you stay on topof your finances,writes Jessica Mead
Daniel Knowles
offers three tips tocope with austerity
JANUARY is traditionally a month ofself-imposed austerity and resolu-tions to do better. Despite a recover-ing economy, in an environment of
high unemployment, rapidly rising pricesand a less generous state, keeping onesfinances under better control ought to betopping many 2011 resolution lists.
While the VAT rise will be foremost in allof our minds, there are plenty of other taxchanges and planning measures scheduledfor 2011. Staying on top of your money
requires forward thinking. Not only do youneed to think about what you want toachieve, but you also need to be aware ofchanges to legislation.
That doesnt just mean governmentmeasures; decisions taken at a Europeanor even an international level could have aknock-on effect on individuals. The key tomanaging your finances is not to be taken
by surprise: here are some of the issues youneed to be watching this year.
MORTGAGESDespite high inflation, the Bank ofEngland is expected to keep monetary pol-icy highly accommodative this year.However, that does not rule out the(strong) likelihood that we will start to seeinterest rates rise at some point this year many economists have pencilled in a smallincrease in the second half. A rise in rateshas the potential to affect mortgage dealsand whether you choose to fix or float. TheCouncil for Mortgage Lenders (CML)
believes that remortgaging rates will below this year because standard variablerates (SVR) will remain attractively priced.
SAVINGSAs of 6 April, the personal limit for ISA con-tributions will increase to 10,680, whichmeans couples can shelter 20,400 fromincome and capital gains tax. Half of yourannual allowance can be placed in a cashISA. The allowance will increase annuallyin line with inflation.
Parents should also be ready for the
Be ready for all of
2011s notable dates
Picture: GETTY
PERSONALFINANCE NEWSBY DANIEL KNOWLES
RATE WAR ON 7,500 LOANSThe average interest rate charged on unse-cured personal loans of 7,500 has droppedto 7.89 per cent, the lowest level sinceNovember 2008, according to a survey bymoney