Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Cityam 2011-05-31

Cityam 2011-05-31

Ratings: (0)|Views: 193 |Likes:
Published by City A.M.

More info:

Published by: City A.M. on May 31, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

05/31/2011

pdf

text

original

 
 THE CRISIS at world football’s gov-erning body Fifa deepened last nightas lucrative sponsors of the embat-tled organisation became embroiledin the unfolding scandal.Coca-Cola branded the latestround of bribery allegations againstits highest ranking officials as “dis-tressing and bad for the sport.” Adidas added that the storm is “nei-ther good for football nor for Fifaand its partners.” Neither was said to be considering removing their spon-sorship at this stage but Fifa will bealarmed at the increasingly negativetone being taken against it.Fifa’s president Sepp Blatter andsecretary-general Jerome Valcke were forced to defend an email in which Valcke said Qatar had“bought” the World Cup. He claimedhe was referring to the gulf nation’sfinancial strength. The email was leaked by suspendedmember Jack Warner. The only chal-lenger in tomorrow’s presidentialelection was also suspended over sep-arate bribery allegations and has withdrawn from the race. SponsorsEmirates, Sony and Visa were unavail-able for comment last night.FIFA SCANDAL LATEST: P35
FTSE 100
5,938.87 +57.88
DOW
12,441.58 +38.82
NASDAQ
2,796.86 +13.94
£/$
1.65
+0.01
£/¤
1.15
t
-0.01
¤/$
1.43
+0.02
Top sponsors Coca-Cola and Adidas fuel growing Fifa row
B
Y
S
TEVE
D
INNEEN
BUSINESS OF SPORT
 Many young people have entirely given up hope of raising a deposit to buy their own home. Picture: PA
 A GENERATION of Britons fear beingsqueezed out of the property marketand doomed to a lifetime of renting,a survey reveals today.Nearly two thirds of 20 to 45 yearolds who do not already have a mort-gage say “they have no prospect whatsoever of buying a home,”according to a report by the NationalCentre for Social Research and theHalifax.Large, mandatory deposits and theperception that banks are not lend-ing have deterred the group dubbed“Generation Rent” by the report’sauthors. Just five per cent of this group aremaking sacrifices to save for adeposit, with 95 per cent eitherunable or unwilling to put money aside each month.Britain is set to become more likesome neighbouring European coun-tries where renting is seen as thenorm, according to nearly half thesurveyed 20 to 45 year olds.“This could open up a widening of the wealth gap that already exists between home-owners and nonhomeowners,” commented reportauthor Alison Blackwell.“And people in Generation Rentrisk insufficient finances at retire-ment,” she added.Over nine in 10 (92 per cent) of those surveyed said it was hard forfirst time buyers to get a mortgage, while almost two thirds (61 per cent)say that many wish to avoid the“stress and anxiety of applying for amortgage.”“Of course, not everyone wants toget on the housing ladder,” saidStephen Noakes of the Halifax,“However, 77 per cent of people inour research expressed a real desireto own their own home, but for two-thirds it’s an impossible aim.”“We therefore want ‘GenerationRent’ to be aware of the opportuni-ties available to them, and dispel any myths about the mortgage process,”Noakes added.Prospective first time buyers whomanage to jump on the property lad-der by the end of the year are set to be rewarded with a resurgence inhouse prices, according to separateresearch also revealed today.
B
Y
J
ULIAN
H
ARRIS
PROPERTY
www.cityam.comIssue 1,392 Tuesday 31 May 2011
FREE
IPO BLUES
RUSSIAN GROUPPULLS ANOTHERLONDONFLOTATION
P6
WE TRY OUT BRANSON’SAFRICAN SAFARI RETREAT
HOLIDAYS IN THE SUN
P30-31
BUSINESS WITH PERSONALITY
Prices will fall by 1.4 per cent this year, but then surge back by 16 percent by 2015, the Centre forEconomic and Business Research haspredicted.“We think the market is currently close to the bottom for the UK as a whole,” said CEBR chief DouglasMcWilliams. Prices in London willrise two per cent faster than in therest of the country, the CEBR alsoexpects. But other economists stillexpect further house price declines. ALLISTER HEATH: P2;ECONOMICS: P4; £1M HOMES : P12
Certified Distribution04/04/11 - 01/05/11 is 103,899
GENERATION RENTGENERATION RENT
 
News
2
CITYA.M.
31 MAY 2011
BCC backsdeficit cuts
 THE government’s deficit reductionplans received a boost from theBritish Chamber of Commerce (BCC) yesterday despite the organisationdowngrading its growth forecasts forthe UK economy. The BCC slashed its growth predic-tion on Sunday from 1.4 per cent to1.3 per cent, with growth for 2012also being cut from 2.3 per cent to 2.2per cent. The government’s Office forBudget Responsibility has forecastgrowth of 1.7 per cent for this yearand 2.5 per cent for 2012. The BCC said the government’stough austerity measures, combined with higher than expected inflation, will squeeze disposable incomes,meaning economic recovery would be slower than previously thought.But David Frost, director general of the BCC, told the BBC: “We have hugelevels of debt in this country. Eventhis year we’ll be spending about£124bn more than we’ll be getting intaxes. We have to deal with this.” The defence came after Treasury committee chairman Andrew Tyrie branded plans to rebalance the UK economy as an “incoherent mish-mash”. He said: “There are half adozen ways to define what rebalanc-ing means and I don’t think minis-ters have used the term withsufficient precision.
B
Y
S
TEVE
D
INNEEN
UK ECONOMY
Time to celebrate Tax Freedom Day
 WELCOME back to the office: today isthe first working day you actually getto keep the money you earn, ratherthan hand it all over to the state to pay for public spending. It’s Tax FreedomDay – a date which keeps moving laterinto the year as taxes keep going up. You may feel that the governmentspends too much, as I do – or you may actually want it to do even more. Butit is essential to remember that gov-ernment has a cost and that some- body has to generate wealth to pay forall the spending – and to think thatevery single penny earned by every single person working in the UK so farthis year has all been spent on payingfor the public sector does put mattersinto perspective. Tax Freedom Day, compiled in theUK by the Adam Smith Institute,measures all tax revenues – direct andindirect taxes, local taxes and nationalinsurance contributions – as a per-centage of net national income atmarket prices. This year taxes come to40.8 per cent of the economy on thatmetric; this is then converted intodays of the year, starting from 1 January. After working for the state for149 days, the first day of the year thatBritons work for themselves ratherthan the taxman is Tax Freedom Day –this year this fell on 30 May. In 2010, Tax Freedom Day fell three days earli-er – the delay is due to the govern-ment’s decision to push throughsevere tax increases to start pluggingthe budget deficit. There are other interesting find-ings. If we had to fully fund our 2011expenditure through taxes, and not borrow from global investors via thegilts markets, we would be unable tocelebrate Tax Freedom Day until 1 July. The tax burden also varies by region, depending largely on incomesand employment in the differentparts of the UK. Taking just incometax, it takes Londoners 51 days to pay their income tax bills, against just 35days for the Welsh. Taxes are needed to pay for spend-ing. But constantly hiking taxes, espe-cially those that damage incentives to work or invest, grinds the economy down and reduces growth. One key reason why the economy has beensluggish in recent months is that sofar the bulk of George Osborne’s fiscaltightening has come from tax hikes. Total public spending hit a recordhigh in April – yet Vat and nationalinsurance has gone up, the top rate of income tax is now 52 per cent (includ-ing NICs) and everybody is being clob- bered. We can’t borrow ourselves outof debt – but taxing ourselves to obliv-ion isn’t the answer either.
BUILD MORE HOMES
GENERATION rent – that is the latest buzzword to describe the plight of  younger Britons. Last week I wroteabout the retirement crisis befallingmillions of asset-less Brits; today’sfront page describes an entire genera-tion squeezed out of the housing mar-ket by high prices and vast deposits. At the height of the bubble, toomany people were led to believe thatthey were entitled to own a home,regardless of income, savings or abili-ty to repay. Down that road lay sub-prime lending, 110 per cent mortgagesand total disaster.But the dream of a sustainableproperty-owning democracy can still be rescued. The answer is to allow  vastly more homes of the kind thatpeople actually need to be built. That will push prices down and eventually allow young people back into the mar-ket. Anybody for a New Town, some- where close to London?
allister.heath@cityam.com Follow me on Twitter: @allisterheath
LORD Myners has taken the role of UK chairman at Swedish investmentfirm Cevian.He will join the Cavendish Squareoffices of the Stockholm-based firm, where he will work closely with the boards of companies Cevian investsin. Cevian has had a UK presencesince 2009 and has taken stakes infirms including Wolseley and OldMutual. The firm fits well withMyners’ vocal championing of activistinvestors, as he is known for engaging with its target firms. The former City minister has beenmuch sought after since leaving thegovernment, becoming chairman of  Justice Holdings and joining JacobRothschild’s listed investment trustRIT Capital Partners. He gained plau-dits during his time as chairman of Gartmore between 1987 and 2001.
City A.M.
contacted Myners for acomment last night but was unableto reach him.
B
Y
S
TEVE
D
INNEEN
FINANCIAL SERVICES
Myners to chair Cevian UK
 Former City minister Lord Myners will take another financial role
NEWS | IN BRIEF
Italy’s Berlusconi defeated
Prime Minister Silvio Berlusconi’s coali-tion suffered a humiliating defeat inmayoral elections in Milan and Naplesyesterday, casting doubt over the con-troversial Italian leader's future. Thedefeat in Milan Italy's economic capi-tal was seen as the most symbolicallysignificant and a bellwether for anti-Berlusconi sentiment. Berlusconi, 74, iscurrently facing charges ranging fromhaving sex with an underage prostituteto corruption and perverting the courseof justice.
Brent crude nears monthly drop
Brent crude oil fell below $115 a barrelyesterday, heading for its first monthlydecline this year, as investors weighedthe prospect that Europe’s debt crisisand a sputtering US economy may slowdemand. Public holidays in the US andUK yesterday kept trading volume atless than five per cent the daily norm.The US Memorial Day holiday weekendmarks the official beginning of summerdriving season, when gasoline demandusually rises. Prices are down nine percent for the month of May, the biggestdecline since May of last year.
EDITOR’S LETTER
ALLISTER HEATH
7
th
Floor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: news@cityam.com www.cityam.com
Editorial
Editor
Allister Heath
Deputy Editor
David Hellier
News Editor
David Crow
Night Editor
Katie Hope
Business Features Editor
Marc Sidwell
Lifestyle Editor
Zoe Strimpel
Sports Editor
Frank Dalleres
Art Director
Craig Gaymer
Pictures
Alice Hepple
Commercial
Sales Director
Jeremy Slattery
Commercial Director
Harry Owen
Head of Distribution
Nick Owen
Editorial Statement
This newspaper adheres to the system of  self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the Editor’sCode of Practice, a copy of which can be found at www.pcc.org.uk 
Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS
Distribution helpline
If you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or emaildistribution@cityam.com
British Chamber of Commerce directorgeneral David Frostdefended the need toslash the deficit
WALL STREET “MISPRICED”LINKEDIN’S IPO
 A prominent Facebook investor anddirector accused Wall Street of under- valuing the LinkedIn initial publicoffering earlier this month, con-tributing to the doubling of its shareson opening day. Peter Thiel, an early Facebook investor and co-founder of PayPal, said banks did not under-stand the full potential of the latestinternet companies and warned thatthe next Silicon Valley darlings wouldnegotiate hard when their turncomes to go public.
TAKEOVER PANEL URGED OVER M&A’SPENSION TOLL
UK’s largest corporate pensionschemes are pressing the Take overPanel to ensure that acquiring com-panies take account of a target com-pany’s retirement plan when makinga bid. They want the panel to force bidders to set out in formal docu-ments how an offer will affect a pen-sion scheme and its members.
TESCO PLANNING TO BOOST SALESWITH NEW BRANDS
 Tesco, Brtain’s biggest retailer, ispreparing to launch the first of arange of new brands over the new few  weeks as it seeks to bolster its per-formance. Philip Clarke, the new chief executive, is expected to launchthe new brands in both the food andnon-food businesses.
SMALLER HOTELS OFFER TRAVELODGEROOMS FOR GROWTH
Hotels in the UK’s big budget chainsare getting smaller, with the opening by Travelodge of sites with as few as20 rooms –half the company’s usualminimum size. The so-called Metroconcept will allow the country’s sec-ond-biggest budget hotel chain totake over unusual locations such aspubs, defunct cinemas or office build-ings.
ENERGY WATCHDOG “MISLED PUBLICOVER PRICE RISES”
Britain’s energy regulator has beenaccused of misleading consumers when it claims that suppliers are tooquick to raise prices and too slow tocut them. Ofgem has come underpressure on the issue after an inde-pendent report commissioned by thetrade body Energy UK said that theregulator’s analysis “cannot be reliedupon”, calling into question itsmethodology. The report was con-ducted by the consulting firm Nera.
SOUTHERN CROSS TRIMS RENT AS ITSTRUGGLES TO STAY AFLOAT
Southern Cross is cutting its rent by 30 per cent and remains locked innegotiations with its landlords tofind a longer-term solution as it strug-gles to stay afloat. The group, whichsaid that it would pay nearly a thirdless rent for the next four months.
EU PLANS TO STRIP UK OF BANK REGU-LATION POWERS
Sovereign control of financial regula-tion is under threat from Europeanmoves to harmonise rule books acrossmember states, the three men at theheart of the future Bank of Englandhave warned. Paul Tucker, the Bank’sdeputy governor for financial stabili-ty, Hector Sants, who will becomedeputy governor for prudential regu-lation, and Andrew Bailey, the Bank’schief cashier, said the UK’s proposedregulatory system risks becoming lit-tle more than a local police force forEuropean rules.
CASH-STRAPPED FAMILIES SWITCH£60BN-WORTH OF MORTGAGES TOINTEREST-ONLY
Up to 300,000 households haveswitched more than £60bn of mort-gage debt from repayment into inter-est-only deals in the last three years.
FAMILY DETERMINED TO KEEP HERMES
Family shareholders of French luxury company Hermès said they are deter-mined to keep their grip on the com-pany, while larger rival andshareholder LVMH Moet Hennessy Louis Vuitton SA sought to portray itself as a legitimate shareholder. Thetwo sides have been locked in a fightover a family-holding company and aregulatory investigation into how LVMH bought its shares.
EXTRA AIRLINE FEES SOAR
 Airline revenue from add-ons to tick-et sales jumped to almost $22bn last year and continues to soar as morecarriers chase extra sources of income. Faced with rising fuel pricesand intense competitive pressure tohold down airfares, a growing num- ber of carriers world-wide are charg-ing passengers for services onceincluded in ticket prices.
WHAT THE OTHER PAPERS SAY THIS MORNING
 
CUSTOMERS in the UK and Irelandare increasingly dissatisfied withtheir bank, new research shows. A survey of 2,500 current accountholders by Accenture found 73 percent were satisfied with their bank,compared to 84 per cent in 2007.Only 46 per cent planned to buy their next financial product fromtheir bank, compared to 66 per centfour years ago. The percentage who had com-plained rose from 14 per cent to 17per cent and one bank received com-plaints from nearly one-in-three cus-tomers over a 12-month period.CROWDS of at least 30,000 have beengathering in Athens’ Syntagma Squareover the weekend in the country’s biggest protests so far, as reports circu-lated that the crippled nation wouldhave to give up sovereignty over its pri- vatisation scheme to receive any more bailout money.Meanwhile, it emerged that the EUis currently putting together a new  bailout package worth around
 €
65bn(£56bn), which would bring Athens’total rescue funds to
 €
175bn.Markets are also on tenterhooks tosee the results of the IMF’s fiscal review of Greek finances in the next few days, with investors focused on whether it will admit to a funding gap for 2012.If so, it would mean that Athens had violated the terms of its original
 €
110bn bailout, under which it was toreturn to private markets for fundingnext year, and would mean that theIMF is unable to pay out the nexttranche of aid, worth
 €
12bn.Economists at ING said; “The choirof voices claiming that the emperorhas no clothes is growing… The debt-to-GDP ratio is heading to 160 per centover the next three years.” To tackle its enormous debt pile, theGreek government has outlined plansto sell
 €
50bn worth of assets, includingports, railways, gas companies, waterutilites and defence firms. Yesterday, a spokesman for theEuropean Commission denied thatthe EU or IMF have demanded that aninternational authority administerthe sale or the collection of taxes, assome had suggested, saying: “ I don’tthink you can do that in a sovereigncountry.”Kathleen Brooks, research directorat Forex.com. said: “This type of ‘help’is exactly what Greece needs at thisstage of its financial rehabilitation;however it would be a big step thatcould jeopardise the economic sover-eignty of Greece.”But ING’s Peter Vanden Hout castdoubt on the importance of the assetsell-off: “A privatisation programme would clearly buy time but is no guar-antee for success... In that regard, theidea of a (voluntary) debt restructuringis unlikely to disappear,” he said. A recent opinion poll showed thatPapandreou’s Socialist Party had lostits lead for the first time since its elec-tion in 2009.
Greek angeras EU plots apower grab
INSURER Novae is putting together a bid for Omega Insurance Holdingstoday, having been in discussionsabout a deal with its weakened rival.
City A.M.
understands that Novaeintends to formally announce itsinterest in buying Omega today, but will not indicate a potential pur-chase price.Omega has already announcedthat it has received bids fromCanopius, the privately held insurerand reinsurer, and the US employ-ment insurer Delphi. Analysts value Omega at around£200m, or 82p per share, reflectingthe downward trend in its pricesince early 2009, when its stock was worth 131p. Its current price bringsit within range of takeover offers by rivals like Novae.
Novae set to makemove for Omega
FRENCH finance minister ChristineLagarde pledged to push reforms togive Brazil and other emergingeconomies more influence at theInternational Monetary Fund (IMF) asshe kicked off a worldwide tour yes-terday to win support for her candida-cy to lead the global lender. The backing of Brazil could helpease discontent among developingcountries over the long-standing prac-tice of choosing a European to headthe Washington-based IMF.Brazilian finance minister GuidoMantega said Brazil had yet to decide whether to support Lagarde.
Lagarde eyesBrazil backingBank customercomplaints up
B
Y
J
ULIET
S
AMUEL
EUROZONE
BANKING
WORLD ECONOMY
GREEK Socialist  prime minister George Papandreouis negotiating thecountry’s secondrescue since hecame to power. Picture: REUTERS
B
Y
J
ULIET
S
AMUEL
INSURANCE
News
3
CITYA.M.
31 MAY 2011

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->