Professional Documents
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MORE US RESULTS: Page 15
WEDNESDAY 17 OCTOBER 2012
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DIRECT Line Group yesterday
completed its first day as a full listed
company, marking the official
completion of the largest London
float in 2012.
All 1.5bn shares in the firm were
added to the official list of the UK
Listing Authority, while it began
unconditional trading under the
DLG ticker.
The share price has been relatively
stable, floating at 175p last Thursday
and closing yesterday at 188.2p.
Panmure Gordon analyst Barrie
Cornes told City A.M.: The shares
were priced to get away and thats
exactly what theyve done.
Float of Direct
Line is official
BY JAMES WATERSON
THE FINANCIAL Conduct Authority
(FCA) yesterday unveiled its plan to
regulate behaviour in the City, pledg-
ing to force companies to put con-
sumers at the heart of their business.
Martin Wheatley, who will be chief
executive of the FCA when it is
spawned from the disbanding
Financial Services Authority (FSA)
next year, outlined its approach.
New powers will allow the FCA to
take pre-emptive action when it
believes a firms policies are set to be
detrimental to consumers.
The Financial Services Bill 2012, cur-
rently progressing through parlia-
ment, contains many of the powers
outlined by the FCA yesterday.
These include the ability to ban
financial products, publish details of
misleading financial promotions,
and let people know when we are
proposing to take disciplinary
action against a firm, the
report said.
Financial services groups
warned that the FCA, along
with the incoming Prudential
Regulation Authority, will need
to ensure that firms know
where they stand.
The FCA
w i l l
h a v e
a n
Wheatleys new
City watchdog
shows its teeth
BY JULIAN HARRIS armoury of new consumer powers at
its disposal, some of which like prod-
uct intervention are untried and
untested, said Paul Smee, director
general of the Council of Mortgage
Lenders (CML).
Firms will be looking for as much
information and help as possible from
the FCA, to ensure that they do not
inadvertently fall foul of the
regulators expectations, Smee added.
The scandal over the mis-selling of
payment protection insurance (PPI)
has convinced the FCA of the need to
intervene early; to pre-empt and pre-
vent widespread harm to consumers
from happening in the first place,
rather than clear up after the event.
Wheatley said the tough approach
would not prevent innovation or act as
a barrier to entry for new
firms. We will allow
firms to try new ideas
and develop their
business, he said.
We will set high
expectations for
those firms that
want to enter finan-
cial services, while
still allowing innova-
tion and good ideas to
flourish.
Building society
boss attacks BofE
THE BANK of England should face
more direct democratic oversight
and take action to become more
accountable and transparent, the
Building Societies Association (BSA)
said yesterday, voicing concern over
powers the Bank is being given.
Its Financial Policy Committee
(FPC) is set to gain wide ranging
macroprudential tools, allowing it
to determine the levels of capital
banks must hold overall, and to
vary capital requirements by sector.
Adrian Coles from the BSA
BY TIM WALLACE
warned that this gives the Bank
great power over credit, without
extra accountability. Because of
the wide ranging impact this has,
the Bank of England will be one of
most powerful unelected entities in
the democratic world, he told the
Treasury Select Committee.
Coles also said it may be better if
the FPC had more direct controls
for example the power to limit
mortgage loan-to-value ratios when
a bubble is growing rather than
change capital requirements, to
make sure consumers can see how
credit is being restricted.
CLEGG INSISTS BOUNDARY REFORM IS DEAD
Chief regulator Wheatley said
the City is one of our most
successful
industries
n The new regulator will be able to step
in and ban the sale of products that pose
unacceptable risks to consumers for up to
12 months, without consulting first.
n Wheatleys FCA will also have the
power to ban misleading advertising.
n New entrants to financial industries will
face more stringent tests. When we
consider authorising a firm, we will look
at its business model to ensure it meets
the needs of consumers.
n Wheatley wants to continue the FSAs
clamp down on financial malpractice. We
will keep up our policy of credible
deterrence, pursuing enforcement cases
to punish wrongdoing.
n We will carry on the fight against
insider dealing, which has secured 20
criminal convictions since 2009, it adds.
n The FCA says it also wants to boost
competition in financial services.
Promoting competition will play an
important part in this. We are not here to
stand in the way of progress that will be
of benefit to consumers, Wheatley said.
n A closer eye will be kept on specific
sectors in a bid to control how markets
develop. A new department will act as
the radar of our new organisation
combining better research into what is
happening in the market, and analysis of
the risks to our objectives.
THE FINANCIAL CONDUCT AUTHORITYS PLANS
WEDNESDAY 17 OCTOBER 2012
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cityam.com
LIB Dem leader Nick
Clegg yesterday
insisted that his party
will vote against
changes to MPs
constituencies a
decision that will
make it harder for the
Conservatives to win
an outright majority
at the next election.
Proposed changes to
boundaries were
published yesterday
and a vote is
scheduled for October
2013, but any change
is likely to need Lib
Dem support. The
reforms could give
the Conservatives up
to 20 extra seats at
the next election.
THE EUROZONE swung into a
trade surplus over the first eight
months of the year, data revealed
yesterday, driven by boosted
exports from southern regions.
The Eurozones trade balance
was 46.9bn (38bn) in surplus
between January and August 2012,
Eurostat said, up from a 26.8bn
deficit over the same period last
year. Spain, Italy and Greece all
saw exports rise and imports fall
in the first seven months of the
year, the data showed, even
pushing Italy into a 4.4bn
surplus in the period.
This positive data chimed with
business survey results from
Germany. Economic sentiment
jumped from minus 18.2 in
September to minus 11.5 in
October, ZEW said. Though this
was still negative, it was well
above expectations analysts
polled by Reuters had forecast an
improvement to minus 15.
But monthly car sales slumped
at the fastest rate of decline for 12
months in September, data from
the European Automobile
Manufacturers Association
showed.
New car registrations dived 10.8
per cent in just a month, hitting
1.1m during September, and
clobbering big European car
companies.
South pushes
Eurozone into
trade surplus
BY BEN SOUTHWOOD
MOODYS last night maintained its
Baa3 rating on Spanish sovereign
debt, one notch above junk, though it
moved to a negative outlook.
Moodys said Spain should have
access to the capital markets at rea-
sonable rates while it turns around its
economy, thanks to the combina-
tion of euro area and ECB support
and the Spanish governments
efforts.
The good news helped nudge the
euro 0.3 per cent higher against the
dollar.
It came after Spain sold more short-
term debt than planned at slightly
lower rates than a month ago, attract-
ing investors who traded on expecta-
tions that a sovereign aid request
could be near.
The countrys treasury yesterday
sold 4.9bn of 12- and 18-month debt,
beating the targeted upper range of
4.5bn and with the yield on the
longer paper dipping from
Septembers auction to just above
three per cent.
Rising expectations that Spain will
Moodys stops
short of Spain
downgrade
BY HARRY BANKS
soon ask for a Eurozone credit line to
help cut its borrowing costs look set to
dominate a EU summit beginning
tomorrow, potentially crowding out
talks on a disputed banking union.
The EUs two-day summit, the fourth
among the 27 leaders this year, was
meant to focus on efforts to establish a
single supervisor for the Eurozones
banks, as well as longer-term plans for
closer integration of the bloc.
There is even a narrow chance of a
separate summit of the 17 Eurozone
leaders after the main meeting to dis-
cuss the most pressing issues affecting
the currency bloc, including Greece,
Cyprus, Italy and Spain, officials said.
German finance minister Wolfgang
Schaeuble also threw his weight into
the mix ahead of the summit, saying
it was time for a leap forward in
European integration and that ideas
such as a super-empowered commis-
sioner for budgets needed serious con-
sideration.
Schaeuble said he had run his ideas
past Chancellor Angela Merkel and
while she was somewhat more cau-
tious, there was a need to take bold
action to quell the debt crisis.
GREECE plans to launch tenders to
sell or lease a string of state assets,
including its biggest refiner and
two largest ports, as it battles to
pay down debt and meet the terms
of an international bailout.
The deals will be a second wave
of privatisations after six projects
which are expected to complete in
early 2013.
We have some very significant
assets and tenders to launch in the
next few months, Yannis Emiris,
head of Greeces HRADF
privatisation agency said
yesterday.
Greece prepares second wave
of privatisations to raise cash
BY CITY A.M. REPORTER
Athens plans to launch tenders
to sell stakes in refiner Hellenic
Petroleum, the countrys two
biggest ports in Piraeus and
Thessaloniki, its second-biggest
water company Thessaloniki
Water, and Larco, one of the
worlds biggest nickel producers.
The country also plans to seek
investors for the countrys biggest
airport in Athens, the Egnatia
motorway as well as small regional
airports and marinas.
The first big sales, natural gas
firm DEPA and a 33 per cent stake
in gambling firm OPAP, are
expected to be completed early
next year.
WEDNESDAY 17 OCTOBER 2012
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NEWS
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Greek Prime Minister Antonis Samaras has pledged to revive privatisations
IN BRIEF
Gold Fields delivers strike ultimatum
n South African bullion producer Gold Fields
has given striking workers at its South Africa
mines until tomorrow to return to work or
face immediate dismissal, chief executive
Nick Holland said yesterday. Gold Fields said
23,500 workers in South Africa were still on a
strike that has cost the company 65,000
ounces of lost gold production, or 1.2bn rand
(84.4m) in revenue.
TNK-BP fails to stop documents
n A former employee of TNK-BP yesterday
won a High Court case in London to end a
gagging order to stop him from leaking
company documents, which he says show
corruption between company executives and
government officials. TNK-BP blocked the
disclosure of the documents, which former
head of logistics Igor Lazurenko claims are
damaging to TNK-BPs reputation, in July.
WEDNESDAY 17 OCTOBER 2012
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ELIZABETH FOURNIER
Blankfeins caution proves risk-off banking is here to stay
F
OR a brief hour or so yesterday,
the banking world was gripped
by a success story.
Goldman Sachs, which this time
last year posted close to half a billion
dollars in losses, threw its hat into a
largely upbeat round of US results by
almost doubling overall revenues and
sending shares up in early trading.
But no sooner had Goldmans
Blankfein dropped a $1.46bn profit on
the market not to mention a four
cents per share dividend rise than
Citigroup chief executive Vikram
Pandit had stolen his thunder with a
carefully penned letter of resignation.
In doing so, he left Blankfein with
the dubious honour of being just one
of two remaining Wall St bank bosses
hired during or shortly before the cri-
sis whove survived this far (Jamie
Dimon at JP Morgan being the other).
Blankfeins memorable quotes (who
can forget Im doing Gods work and
I know I could slit my wrists and peo-
ple would cheer) and bullish invest-
ment attitude ensure that when he
does step down from Goldman, his
legacy will at least be colourful.
Pandit, on the other hand, will be
remembered for the sweeping job cuts
and government pandering that came
after Citi accepted a $45bn bailout, not
to mention a 90 per cent depreciation
in the banks share price over his five
years at the top.
Its unfair to put all that on the
departing chief executive, of course
poor Pandit was drafted into his very
own omnishambles back in 2007, and
though paying back loans and making
cuts might not be glamorous, hes
ensured Citi has hung on as Americas
number three ever since.
His method foreshadows the new
breed of risk averse, technocratic bank
bosses popping up all over the sector
most recently, some would argue, in
the form of Antony Jenkins at Barclays.
Even Pandits successor, Mike Corbat,
is seen as a safe pair of hands.
And as the focus banking sector
seems to shift more firmly towards fos-
tering a responsible business culture,
perhaps even Blankfein has tempered
his enthusiasm for a risk-on ride.
Despite investment banking rev-
enues that jumped 49 per cent to
$1.16bn and an investment and lend-
ing desk that generated $1.8bn in the
third quarter, Blankfeins outlook on
the next few months was about as cau-
tious as he has ever sounded. Far from
blowing his own trumpet, Blankfein
called the results generally solid in
the context of a still challenging eco-
nomic environment and warned that
the bank would continue to be disci-
plined in managing our operations
and capital.
Goldman has already been making
cuts headcount is down five per cent
on a year ago and the banks peripher-
al spend on areas including comms
and business development has been
stemmed. There could be more to
come. In the meantime the banks
average daily value at risk the
amount of money the investment
bank could lose in a day fell to $81m,
the lowest level in roughly six years.
In the wake of yesterdays big news,
the BBA today holds its annual confer-
ence, at which the Citys banking big-
wigs will again line up to tout just how
risk averse, cost conscious and keen on
regulation they all are. If there was
ever a sign that a new normal world
order is here to stay, then Blankfein
jumping on board would be it.
Elizabeth Fournier is City A.M.s news editor
@ej_fournier
TAKEOVER duo William Hill and
GVC yesterday finally won the back-
ing of the Sportingbet board for
plans to buy the online gambler after
sweetening its offer for the firm to
61.1p a share.
The companies will now start due
diligence on the businesses with
hopes of making a firm offer before a
Takeover Panel deadline of 13
November, which was extended from
5pm yesterday.
The offer is structured as 50p in
cash from by William Hill with the
rest of the offer coming in GVC
shares.
Analysts had long predicted
William Hill and GVC would have to
break the 60p barrier to secure
Sportingbet after an initial offer of
52.5p and a raised intention of
between 55p and 60p failed to crack
the board.
Sportingbets major shareholders,
which include Majedie Asset
Management, Bonaire Investment
and UBS Global Asset Management,
will now have to decide if they back
the inclusion of GVC shares in the
deal, which would see every one
Sportingbet share swapped for
0.0475 GVC shares.
It is understood Sportingbet sound-
ed out investors on the plan when it
William Hill and
GVC edge closer
to Sportingbet
BY MICHAEL BOW
announced its results last week.
Yesterdays compromise involves a
so-called mix and match facility,
which will allow Sportingbet share-
holders to take on more GVC shares
and less cash if they choose.
An increase in GVC share alloca-
tions would let investors keener on
cash take a higher proportion than
the 48.9p on offer, if there is a bal-
ance of payments.
A deal would allow William Hill to
skim off the regulated portions of
Sportingbets business in Australia
and Spain, with GVC able to hoover
up the rest of the unregulated busi-
ness. It is understood rival bids were
put off moving for Sportingbet due to
its unregulated businesses.
William Hill and Sportingbet shares
both closed up yesterday. GVC asked
for temporary suspension of its
shares yesterday morning.
Facebook checks in to London for
first non-US development office
FACEBOOK yesterday unveiled its
London engineering office, the
companys first outside the US.
The social networks Covent
Garden hub, opened by chancellor
George Osborne, has around 20
staff working on a number of
special projects, in particular
Facebooks smartphone apps.
However, the firms vice
president of engineering Mike
Schroepfer said there was potential
to expand to the size of the three
BY JAMES TITCOMB
US engineering centres, each of
which employ more than 100
developers. Schroepfer admitted
that the company could have
chosen other locations for the
office, but said it had been attracted
by the level of talent and the eco-
system of companies in the capital.
Facebooks choice of London will
be a boost to Osbornes campaign
for the capital to become Europes
technology hub. The chancellor said
he had urged Facebooks chief Mark
Zuckerberg to set up in Britain,
although he added: Im not
claiming that made any difference.
The office is being run by a
veteran of Facebooks Seattle hub,
Philip Su, who worked on the
companys iPad app and the
websites integration with video-
calling service Skype.
Despite the fanfare surrounding
yesterdays launch, Schroepfer
admitted it had been a difficult
time for Facebook, and that
negative publicity around the
company was disappointing for
staff, but said the company was
coming out of the tunnel. Facebook engineers in London will work on a number of special projects including apps
Sportingbet PLC
16Oct 10Oct 11 Oct 12Oct 15Oct
49
51
53
55
p
53.50
15Oct
WEDNESDAY 17 OCTOBER 2012
9
NEWS
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William Hill, GVC and Sportingbet have a
host of big name rainmakers on board.
Acting as lead adviser to William Hill is Citis
Jan Skarbek, managing director of the UK
banking and broking team.
Skarbek has a long track record of M&A and
equity transactions across a range of sectors
at Citi. He worked on the stock market oats
of Safestore, Debenhams and the initial
offering of William Hill.
In recent years, Skarbek has completed
transactions for a host of names, including
Balfour Beatty, BMG, Britvic, Debenhams,
Hammerson, Holidaybreak, Lonmin and
Travis Perkin.
Skarbek, who holds a double rst in
Chemistry from University College, Oxford,
has more than 18 years of investment bank-
ing experience, having joined Schroders
Investment Banking in 1993 which was
acquired by Citi in 2000.
Working alongside Skarbek on the deal is
Andrew Seaton, who is the head of corpo-
rate broking at Citi. Investec are also acting
as nancial advisers to William Hill along-
side Citi. GVC has appointed Daniel
Stewart, the investment bank catering for
smaller clients. Acting as nancial adviser to
Sportingbet is Lazards Cyrus Kapadia and
Aamir Khan.
ADVISERS CITI
JAN SKARBEK
CITI
SHARES in N Brown Group jumped
almost 14 per cent yesterday as the
home shopping clothes and
homeware retailer said a trial of its
brands in the US had proved it could
grab a share of the $35bn plus-size
ladieswear market.
Were very encouraged by our
performance there... everything
suggests there is a place for us in
that market, chief executive Allan
Brown said, warning that the US is
unlikely to show a profit for another
two years as it continues to build its
customer base.
Browns comments came as the
Manchester-based group, which
targets older and larger shoppers
with brands such as Simply Be,
Jacamo and Marisota, reported a 4.5
per cent drop in first-half underlying
profit to 42m around 1.5m
ahead of consensus forecasts.
The group saw a strong pick-up in
trading in recent weeks, with like-
for-like sales up 9.4 per cent in the
first six weeks of the second half.
Total sales rose 53 per cent to 3.4m
in the six months to 1 September.
N Brown aims
for extra large
US ambitions
BY KASMIRA JEFFORD
FORMER Asda boss and Royal Mail
chairman Allan Leighton is to join the
board of Matalan as chairman, the
discount fashion and homeware
retailer said yesterday as it posted
robust second quarter sales.
The highly-regarded Leighton will
replace John Mills, who has been in
the role for six years and will now
become deputy chairman.
Once described as the best-connect-
ed man in the business
world, Leighton said he
wanted to go plural after
leaving Asda in 2000 and
is currently chairman of
retailer Office and
Danish jewellery company
Pandora. Last month he
also joined the board of
Matalan names
Allan Leighton
as its chairman
BY KASMIRA JEFFORD
ready meal-maker Bighams as a non-
executive director.
Commenting on his appointment
yesterday he said: I am very excited
about this opportunity; Matalan is a
great company with a strong brand
and management team.
The news came as the retailer posted
a 4.1 per cent rise in sales 269.2m in
the 13 weeks to 25 August on earnings
of 17.3m compared with 13.6m last
year. It has guided towards a full-year
profit range of 95m to 105m.
Matalan recently started trialling its
click and collect scheme in stores
across Scotland ahead of a national
rollout next year as part of the groups
plans to step up its multi-channel
operations.
Bellway profits jump
as it hikes dividend
BY KASMIRA JEFFORD
HOUSEBUILDER Bellway said
yesterday that a strong performance
in the south of England and an
uptick in sales of private homes
helped boost full-year profits.
Shares in the FTSE 250 firm closed
up 3.2 per cent after it posted a 57
per cent jump in pre-tax profit to
105.3m for the year to 31 July,
prompting it to hike its final
dividend by 59 per cent to 14p per
share.
Like its peers, Bellway has
benefitted from buying cheap land
after the countrys property market
collapsed around 2007.
Chief executive John Watson said
it aims to continue with this
strategy of buying up land at lower
prices but he warned that lack of
availability meant less homes were
being built.
Weve got to keep an eye on
whats going on in Europe, and
weve got to keep an eye, more
importantly, on unemployment
levels, said Watson.
Bellways order book rose by three
per cent to 441.2m and reservations
since the end of July have remained
in line with expectations.
The average home selling price
jumped 6.3 per cent to 186,648, the
highest Bellway has ever achieved.
HOUSES near the Crossrail route
through London could enjoy a
boost in value of up to 25 per cent
once the rail link is up and
running, research claimed
yesterday.
While residents living in the
shadow of Crossrail stations must
endure years of construction work
until the route opens in 2018, they
can expect a handsome bump in
property values of a quarter
compared to current asking
prices, a study by GVA
commissioned by Crossrail has
found.
Houses close
to Crossrail set
for price boost
Informa maintains forecasts as revenue falls
BY MARION DAKERS
SPECIALIST business publisher
Informa announced a drop in
revenue for the first nine months
of 2012 yesterday, but said it was
still trading in line with its
expectations for the whole year.
Organic revenue fell two per
cent compared to last year in the
nine months to 30 September,
blaming a tough trading
environment for the decline.
The groups academic division
performed well, turning in like-
for-like growth of 2.2 per cent
year-on-year. But revenue was
dragged down by Informas
professional and commercial
information division, where
organic growth fell by 4.7 per
cent, and its events and training
arm, where it declined by 2.6 per
cent.
The quality of our content and
brands puts us in a strong
position even in what remains a
lacklustre macro environment,
said Informas chief executive
Peter Rigby.
BY CITY A.M. REPORTER
West End offices enjoys surge in investment
INVESTMENT in Londons sought-
after West End office market surged
by 30 per cent in the third quarter as
an influx of properties became
available on the market and demand
overseas investors continued to rise.
Research by BNP Paribas Real
Estate, the French banks property
arm, said West End investment rose
to 950m in the third quarter
compared to 730m in the previous
three months.
Elsewhere, investment fell, with a
42 per cent drop in the City and a 15
per cent drop in Midtown.
Investment in the Docklands dried
out completed in the period.
Paul Henwood of BNP Paribas Real
Estates investment team said:
Midtown investment transactions
were very limited, as the market is
seen as growth stock. In addition,
the City saw limited new stock
offerings due to the summer
slowdown and of course, the
Olympics.
Total take-up of space within
London rose 6.3 per cent in the third
quarter while supply remained
stable, rising by only 2.2 per cent
from the same period last year.
Whilst take-up was not
spectacular, there are some major
deals under offer which should
deliver a strong last quarter across
central London, said Dan Bayley,
head of central London.
BY KASMIRA JEFFORD
Local retailers see footfall slide
ONE in six independent retailers
fear they will collapse into
administration in 2013 unless sales
show signs of improving, according
to a new study published yesterday.
As the battle to retain footfall on
the high street continues and
family budgets remain squeezed, 16
per cent of small retail businesses
feared they were unlikely to
survive, the British Independent
Retailers Association said.
Out of 500 firms surveyed, 65 per
cent said footfall has fallen in the
past year or remained static, with
convincing customers to shop
locally highlighted as one of the
main challenges for the industry.
BY KASMIRA JEFFORD
FLOORING retailer Carpetright
yesterday reported its third quarter
of positive but slowing like-for-like
UK sales as self-help measures
such as the revamp of its stores
helped to bolster turnover.
Like-for-like sales increased 0.6
per cent in the three months to 13
October, a slowdown from the 1.7
per cent growth seen in the
previous three months but still
Carpetright UK sales edge up
as trading in Europe weakens
BY KASMIRA JEFFORD hailed as robust by analysts in the
face of gloomy high street.
With UK self-help initiatives
gaining traction, we look forward
to a positive outcome for peak
trading, Peel Hunt analysts said.
Its performance in the UK helped
offset deteriorating trading
conditions in Europe. Carpetright
said the collapse of the
Netherlandscoalition government
helped drag European same-store
sales down by 12.7 per cent.
Lord Harris of Peckham, chairman of Carpetright, founded the business 24 years ago
WEDNESDAY 17 OCTOBER 2012
10
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The new
jobs website
for London
professionals
T
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Retailer Allan Leighton
joins Matalan as chairman
PADRAIC Fallon, the chairman of
Euromoney Institutional Investor,
passed away at the weekend after a
year-long battle with cancer.
Fallon was made editor of
Euromoney in 1974, and
rose through the ranks
to build the group
into a business
publishing
powerhouse. He is
succeeded by Richard
Ensor.
EUROPEAN regulators hit out at
Google yesterday, criticising the web
giant for changes to the way it
hoards users personal data and
demanding greater transparency
over its privacy policy.
A joint letter from the information
commissioners of 27 countries, fol-
lowing an investigation by French
data regulators CNIL, said that
Google had ignored its key data pro-
tection principles in changing its
privacy policy. Earlier in the year,
Google started to combine informa-
tion about individuals between the
dozens of services it runs, including
YouTube, Gmail and search, in order
to target adverts more effectively.
Google claimed the new system
made its policies easier to under-
stand, but the regulators said it had
not made the changes clear.
The investigation showed that
Google provides insufficient infor-
mation to its users, especially on the
purposes and the categories of data
being processed, the letter read. The
regulators including UK informa-
EU watchdogs
slam Google on
privacy policies
BY JAMES TITCOMB
tion commissioner Christopher
Graham are now calling for Google
to allow users to opt out of having
their data collected, as well as to
make it explicitly clear how it collects
and uses their data.
The company could face heavy fines
from each of the national regulators
if it is not seen to change its policies
to comply with recommendations.
The move will come as a big blow to
Google, which relies on targeting
adverts effectively.
Googles global privacy counsel
Peter Fleischer rejected the claims,,
saying: We are confident that our pri-
vacy notices respect European law.
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MANTEL DOES THE BOOKER DOUBLE
Hilary Mantel last night became the first woman to win the Man Booker prize twice. The
author of Bring Up The Bodies and Wolf Hall, which won the 50,000 prize in 2009, was
described by the judges as the "greatest modern English prose writer".
Google Inc
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735
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Fallon edited
Euromoney
THE RUSH of Russian firms looking
to list in London took a blow
yesterday as Promsvyazbank failed
to attract sufficient investors.
The dual London-Moscow listing
was set to follow Sberbank and
MegaFon in coming to the City.
But the bank 88.3 per cent
owned by brothers Dmitry and
Alexey Ananyev said it had
cancelled the listing because it
disagreed with investors over what
BY TIM WALLACE see as a fair price. They hoped to
raise $345m to $414m in London.
But some institutional investors
are still believed to be interested in
taking a stake in the bank.
Russian firms are keen to list in
the City because of its large pool of
buyers and the extra confidence in
governance the listing brings.
But a banker familiar with the
deal believes Russian firms may not
fully understand London investors.
They can underestimate the
conservative nature of investors in
INSURANCE firm Resolution
yesterday announced that it is
discussing whether to dispose of its
30 per cent stake in a Malaysian
joint venture.
The companys Friends Life unit
is looking at selling its shares in
AmLife Insurance Berhad and
AmFamily Takaful Berhad back to
AmBank Group, its local partner.
Resolution say the 30 per cent
stake had a Market Consistent
Embedded Value (MCEV) of 38m in
June.
Resolution eyes
sale of AmLife
BY JAMES WATERSON
Padraic Fallon
passes away
BY ELIZABETH FOURNIER
WEDNESDAY 17 OCTOBER 2012
11
NEWS
cityam.com
To register go to
Our knowledge on MT4 isnt.
For the first time ever, were opening our doors to host
our first live trading workshop. And youre invited.
Sign up today and join Chief Market Analyst James Hughes
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Live Forex and CFD trading involves significant risks.
Losses can exceed your initial deposit.
Russian banks London listing
failure could hit future City IPOs
production beat expectations by grow-
ing 0.4 per cent in September, accord-
ing to Federal Reserve data, after the
1.4 per cent slide into August. Mining
output grew 0.9 per cent, utilities
output was up 1.5 per cent,
and manufacturers pro-
duced 0.2 per cent
more, compared to
the previous month.
One worry was a
surge in prices
the consumer price
index grew 0.6 per
cent in September
driven up by a seven per cent
jump in petrol prices, Labor
Department data showed.
This put prices two per cent
higher than they were a year
earlier.
INEFFICIENT government
departments are
overspending heavily on
office space, a report from
the Taxpayers Alliance (TPA)
claimed today, wasting
hundreds of millions of
pounds.
The Treasury spent 5,324
on property per full-time
equivalent worker (FTE),
compared to just 1,046 per
FTE at Her Majestys
Revenue and Customs
(HMRC), the TPA said,
calculating that if all
departments improved to
HMRCs standard, the
government could save
111.8m.
Though they admitted
some of this cost was from
high market rents, they said
a large part was down to
wide variations in office
space some departmental
staff enjoyed five times as
much space as others.
Whitehall
in property
overspend
BY BEN SOUTHWOOD
HOUSE PRICES continued to edge
up into August, official statistics
showed yesterday, confirming
earlier private sector data.
House prices were up 0.1 per
cent in the month, driven by a 0.5
per cent rise in London prices, the
Office for National Statistics said.
By contrast the east Midlands,
Yorkshire and the Humber, and the
south west saw small declines.
House prices
rose in August
BY BEN SOUTHWOOD
THE BANK of Englands quantitative
easing (QE) scheme damages pension
funds, research showed yesterday.
Seventy-six per cent of those
surveyed by Squire Sanders said QE
harmed their plans funding
position. This came as the National
Association of Pension Funds asked
the government and the pensions
regulator to give funds leeway to
cope with balance sheet holes down
to depressed gilt yields.
Pension funds
say QE a blow
BY BEN SOUTHWOOD
WEDNESDAY 17 OCTOBER 2012
12
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cityam.com
Budget watchdog admits errors in earlier forecasts
OBR recovery forecasts revealed as overly optimistic
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
93
94
95
92
96
97
98
99
100 100=GDP
Latestofficial figures
Original OBRforecast
12
1
res
OBR excessively optimistic about
2011-12 tax revenues
Current government receipts were
569.3bn
in the 2011-12 tax year
19.3bn lower than the OBR 2011
estimate of 588.6bn
Corporation tax receipts were
12%
lower than OBR forecasts
VAT receipts were
2.3% lower
than OBR forecasts
Income tax receipts were
3% lower than OBR forecasts
Business rates receipts were
1.7% lower
than OBR forecasts
Growth hit more by
inflation than cuts
FISCAL watchdog the Office for
Budget Responsibility (OBR) said
yesterday that high inflation and
weak exports were behind the UK
economy performing far worse that
it had predicted.
The governments deficit
reduction plans may have affected
growth, the OBR said, yet its
economists calculated that other
factors were considerably more
likely to have dragged on the
recovery.
Soon after it was formed in 2010,
the OBR predicted the UK economy
would expand 5.7 per cent between
the first quarter of 2010 and the
second quarter of 2012. Yet figures
now estimate that it grew just 0.9
per cent in that period.
However, cuts in government
spending on goods and services
have directly reduced GDP by less
than half the amount we expected
in June 2010, the report said.
While the OBR cannot rule out
the possibility that cuts to other
strands of state spending such as
on investment had a stronger
BY JULIAN HARRIS AND
BEN SOUTHWOOD
negative effect on confidence and
growth, it concludes: unexpectedly
stubborn inflation looks a better
proximate explanation for weak real
consumption in 2011 and
deteriorating export markets seem
to offer a better explanation for the
more recent weakness of net trade.
Constrained credit conditions
are likely to have hampered
investment by smaller firms, the
authors also said, suggesting bigger
firms cut down due to the global
economic slowdown.
Despite the larger-than-expected
fall in GDP over the past two years,
the OBR was fairly accurate in
predicting reductions in borrowing.
Public sector net borrowing
shrank from its post-war peak of 11.2
per cent of GDP in the 2009-10 tax
year to 7.8 per cent of GDP in the
2011-12 tax year close to the
original OBR prediction in spite of
the surprisingly poor output growth.
But there were still errors in both
spending and taxation forecasts. The
OBR over-predicted spending by
11.3bn as departments spent
under their budgets and counted
on 14.9bn more in tax revenue
than eventually turned up.
CONFIDENCE among US builders con-
tinued to rise into October, figures
revealed yesterday, just as new data
put September industrial output
growth above expectations.
Confidence hit an index score of 41
in October, the National Association
of Home Builders said, up from 40
in September to a six-year
high. But the index, released
jointly with Wells Fargo,
remained below the 50
level that indicates neutral
expectations, a level it has
not been above since April
2006.
This came as industrial
THE UKS official stats body
insisted yesterday that its
estimates of weak productivity
across the economy are correct,
pointing at tight lending
markets, underemployment,
and falling real wages as
possible causes.
The Office for National
Statistics (ONS) has been
questioned by some analysts
this year, as it has reported
shrinking GDP at the same time
as improving employment rates.
Yesterdays report says
statistical errors cannot be
ruled out, but touts ONS
methodological rigour as
making such errors unlikely.
Tight credit conditions are
forcing firms that want to
expand production to hire
employees instead of investing
in physical capital, it suggests.
Another possible explanation
for the divergence between
output and employment, the
ONS says, is the 980,000 rise in
underemployment since 2008
workers are being given fewer
hours instead of being sacked.
The ONS rejected the idea
that firms are hoarding
labour as inconsistent with the
data.
Official data body backs its own stats in
productivity puzzle but points to lending
Builders in US
most confident
since mid-2006
BY BEN SOUTHWOOD
More positive data will
buoy President Obama
BY CITY A.M. REPORTER
TO the gilded rooms of Dartmouth
House yesterday, where the wealth
management industry flocked for
the second annual Macmillan Pies
and Prosecco luncheon Mayfairs
equivalent to the traditional
Gulls Eggs luncheon held
every year in the City.
A highly indulgent menu
choice for midday on a
Tuesday, but all for a very
worthwhile cause, as Dan
Jarman who benefited from
Macmillans cancer support
explained.
During his treatment for
Hodgkins Lymphoma,
Macmillan nurses
Who ate all the
pies in Mayfair
at hedgie lunch
made a discovery which today
means that Jarman is still able to
have children.
Although they havent yet found
me anybody to have children with
he joked. Apparently that isnt
part of the
service.
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Left to right: Peter Fox Linton and
Charlotte Wilmot-Smith of
Odgers Berndtson and Ed Hicks of
PAM Insight; James Anderson of
PAM Insight (above)
Above: James Pargeter of
Future Capital Partners; Jo
Somers of Somers Partnership
(right) with Surinda Kaur and
DK Matai of mi2g (far right)
Left to right: Rupert
Phelps of BNY Mellon and
Dan Jarman of Adam
Smith International
13
cityam.com
Despite advertising the position
for the very first time, it doesn't
appear that budding candidates are
queuing up at the Bank of England's
door to jostle for the position of
governor. Manchester-born Jim O'Neill,
chairman of Goldman Sachs Asset
Management and football fanatic,
explained yesterday why he took his
name firmly off the table: My wife said
to me after the Southampton game
would you be able to stand in the United
away end if you had such a position and
I said that I didn't know that I would.
WEDNESDAY 17 OCTOBER 2012
cityam.com/the-capitalist
THECAPITALIST
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
Adrian Morgan (above) head of Xuber
Xchanging relaunched its software
business, Xuber, yesterday by
hiring butlers to hand out free coffee
outside Lloyds. The essential morning
lubricant was intended to symbolise
Xuber as the engine that keeps the
London insurance market humming.
IN BRIEF
Spirit sales offset rising costs
nSpirit Pub Company reported full-
year results in line with expectations
yesterday and said it was working to
strengthen its managed-pub estate in
the face of rising costs and muted
consumer demand. Spirit, which
manages more than 800 pubs in
Britain, saw sales at pubs open more
than a year rise 4.8 per cent in the
year to 18 August and pre-tax profit
up 16 per cent to 51.1m. It proposed a
full-year dividend of 1.95p per share.
Smiths News signals shift in focus
nSmiths News, the UKs largest
newspaper and magazine distributor,
yesterday signalled a further shift
from its core business, saying it
expected half of its profit to come
from books and educational supplies
by 2016, sending its shares up six per
cent. For the year to August,
underlying pre-tax profit rose to
47.5m from 38.6m a year earlier.
Revenue rose four per cent to 1.8bn.
Bertrams UK wholesale sales rose 2.5
per cent.
Chime snaps up pH Associates
nPR firm Chime Communication
yesterday announced it had bought
pH Associates, a pharmaceutical data
provider, for 6.92m. The deal is
comprised of nearly 90 per cent cash
with 10 per cent surplus working
capital of PHA after it joins Chime.
PHA, which reported revenue of 1.7m
and operating profit of 584,000 last
year, is owned by its two directors
Kate Peperell and Lesley Howell, who
will stay on under the Chime umbrella.
RIO TINTO and BHP Billiton, the
worlds biggest miners, have posted
iron ore production growth in spite
of lingering concerns about long-
term Chinese demand.
Rio produced 52.6m tonnes over
the third quarter, up five per cent
compared to the same period last
year.
The Australia and Canada-focused
miner said year to date global iron
ore production touched 147m
tonnes, up four per cent year on
year.
The FTSE 100-listed firm reported
record quarterly output at its
Pilbara mine in Western Australia,
producing 50.3m tonnes over the
three months to the end of
September, up five per cent from
the same period last year.
Rio, which said yesterday that pro-
duction continued to exceed sales at
Pilbara, is ramping up output at its
flagship mine to target 353m
tonnes of iron ore a year by the first
half of 2015.
Rio, which derives around 80 per
BHP Billiton and
Rio Tinto report
rising output
BY CATHY ADAMS
cent of its earnings from iron ore,
maintained its 2012 production tar-
get of 250m tonnes, adding that its
business has not overly suffered
from the fall in demand from
Chinese industry, in part due to
strengthening prices.
BHP Billiton reported steady
September quarter iron ore produc-
tion and maintained its guidance for
a five per cent increase in output of
the steel-making ingredient this
year.
Output was 39.8m tonnes against
39.6m in the corresponding period a
year ago, it said in its quarterly activ-
ities report this morning.
UK currency hedger Record up
30pc on billion dollar inflows
WINDSOR based currency hedging
manager Record yesterday beat
analyst forecasts to report $1.2bn
(744m) of net inflows in the second
quarter after increasing its managed
assets 8.7 per cent to $32.5bn.
The listed company, which trades
on the FTSE Fledgling exchange,
took its equivalent assets up from
$29.9bn at the end of June to
$32.5bn at the end of September
after winning three new clients.
Markets sent Records share price
up nearly 30 per cent in trading
yesterday on the back of the news.
Shares closed up at 24.50p from
BY MICHAEL BOW
19.70p at the start of the day, after
the firm revealed $1.1bn of inflows
into its passive strategies and
$200m into its absolute return
strategy.
Chief executive James Wood-
Collins said non-UK business, in
Switzerland and the US, was a boon
for the firm. Whilst the UK
continues to be a competitive
market with lower levels of activity,
we continue to see encouraging
engagement with prospective
clients and investment consultants
in North America, he said.
The firm took its client number
to 43, up from 40 at the end of June.
The positive flows allowed Record to
beat marked to market estimates
from analysts at JP Morgan
Cazenove, which was forecasting
equivalent assets under
management of $31.8bn.
Record PLC
16Oct 10Oct 11 Oct 12Oct 15Oct
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24.50
16Oct
Rio Tinto PLC
16Oct 10Oct 11 Oct 12Oct 15Oct
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3,061
16Oct
RUSSIAN precious metal miner
Petropavlovsk yesterday posted
gold production of 219,400
ounces over the third quarter, up
39 per cent year on year.
Over the nine months to 16
October, gold production was up
11 per cent to 498,500 ounces.
The FTSE 250 miner said
yesterday it was on track to
achieve its full-year production
target of at least 700,000 ounces
of gold.
Last year, the miner produced
630,100 ounces of the yellow
metal.
Petropavlovsk goes for gold as
production increases by a third
BY CATHY ADAMS
It added that over the period, it
identified new resources at the
Malomir and Pokrovskiy
operations and its flagship
Pioneer mine in Russia.
Pioneer, located in the Russian
Far East, produced 80,800 ounces
over the three months to 16
October, which was lower than
last year due to the scheduled
processing of lower grades.
Peter Hambro, chairman of
Petropavlovsk, said that the
group had identified further
promising targets for gold
exploration, which will be looked
at in 2013.
Shares closed up 3.1 per cent.
WEDNESDAY 17 OCTOBER 2012
14
NEWS
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Peter Hambro, a member of the Hambro banking dynasty, founded Petropavlovsk in 1994
B
RANDS pump considerable
sums of money into
sponsorship, as demonstrated
vividly during the build-up to
the Olympic Games, and earlier this
week during Felix Baumgartners
dramatic skydive.
Companies buying the naming
rights for venues is a newer
phenomenon in the UK, though
firms in the US have long done this.
The Chicago Cubs ground was
renamed in 1926 and has been
Wrigley Field ever since.
Venues such as The O2, The
Emirates Stadium and The Etihad
Stadium have taken the name of a
sponsor but how much benefit do
brands derive from their associations
with venues? To find the answer Ive
taken a look at perceptions of Etihad
Airways on YouGovs BrandIndex.
Manchester Citys stadium was
renamed in July 2011 and
immediately attracted attention
the big spike in the chart (right)
shows people hearing recent news
about Etihad going from three per
cent to eight per cent. Since then it
has dropped back somewhat, but the
trend remains higher than it had
been prior to the naming rights deal.
We see from SoMA, YouGovs
social media analysis tool, that
mentions of Etihad on social media
are driven by the stadium
(increasing up to five times on home
game days) and the most recent
spike on the attention graph
coincides with City winning the
title.
So the stadium has undoubtedly
sparked additional attention for
Etihad, but how has that translated
into perceptions of the brand? The
Index score (a composite of six key
image measures) shows a steady
climb from +4 in July 2011 to +8 in
July 2012 (slipping back slightly
since).
The naming of the stadium has
not been the only marketing activity
that Etihad have conducted in the
last two years, and to get a more
comprehensive picture of the impact
of each element we would need to do
a much more detailed analysis of the
available data.
The top line results indicate,
however, that there is real value in
having your brand associated with a
venue where people go to have fun.
Stephan Shakespeare is the chief
executive of YouGov
BRAND
INDEX
STEPHAN SHAKESPEARE
Index Chart
2011 2012
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8.0
Index
Attention Chart
2011 2012
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Attention
Sponsoring a venue can help companies build growth
RARE coin dealer Noble
Investments UK yesterday said it
expected to hit trading forecasts
for the year despite not being paid
2.2m owed to it by a Qatari
collector.
The company, which auctions
international rare coins and
stamps, is hoping the collector,
who snapped up a number of rare
coins earlier this year, will pay up
2.2m they owe the firms auction
arm, Baldwins.
The group said yesterday it was
taking legal advice and would take
necessary steps to get the
payment, which amounts to about
one fifth of its revenue.
Managing director Ian Goldbart
Coin dealer Noble awaits 2m
payment from Qatari investor
BY MICHAEL BOW
said: We are naturally
disappointed with the continued
delay in receiving payment from
the Qatari collector; however, the
new financial year has started well
with a strong auction book for
2013 and we therefore hope to
make further progress during the
current year.
The auction house set a new
world record for an English coin
auction in September when an
Australian investor paid 780,000
for a rare George V 1920 Sovereign
coin, one of only a handful in the
world.
Goldbart said yesterday another
rare coin, the 1819 George III
Sovereign, would go under the
hammer in May 2013, which could
fetch a similar price.
ENGINEERING firm GKN yesterday
warned that challenging European
markets would weigh on its order
books, sending its shares down.
The FTSE 100-listed engineer
reported broadly flat pre-tax profit
in the three months to September,
as it said a continued market slump
would impact the group for the full
year.
It added that macroeconomic con-
ditions have deteriorated in recent
weeks, and as a result its order
book has weakened, particularly in
the European car and industrial
markets.
GKN, which makes parts for cars
and planes, reported pre-tax profit
for the third quarter of 99m, down
from 100m in the third quarter of
last year.
Revenue increased to 1.6bn over
the quarter, up from 1.48bn last
year.
The automobile division accounts
for around half of group sales. It was
boosted by the performance of
Getrag Driveline Products, which it
bought last year.
Profit warning
at GKN on poor
Euro markets
BY CATHY ADAMS
The company said its aerospace
unit posted a 7.6 per cent increase in
profit during the period, helped by
the strong growth in civil aviation
programmes, which has offset
falling military sales.
Chief executive Nigel Stein said yes-
terday: Looking forward, European
markets seem to be softening fur-
ther. We continue to focus on driv-
ing performance, keeping close
control of our cost base.
Stein added: Other automotive
markets and the civil aerospace mar-
ket are expected to remain solid.
GKN shares closed down 3.35 per
cent yesterday at 204.8p as news of
the profit warning broke.
GKN PLC
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WEDNESDAY 17 OCTOBER 2012
15
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cityam.com
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US corporate results round-up
COCA-COLA reported quarterly
revenue that came in short of Wall
Street expectations yesterday, hurt by
declines in Europe and Asia where it
sold more lower-priced drinks. Third-
quarter net income for Coca-Cola
was $2.31bn (1.43bn), up from
$2.22bn a year earlier. Revenue rose
one per cent to $12.34bn, while
analysts were expecting $12.41bn.
Coca-Colas revenue misses Wall Street forecasts
JOHNSON & Johnson reported better-
than-expected quarterly results
yesterday, as prescription drug sales
rebounded with the help of newer
products and jitters about medical
device sales proved unfounded. The
firm earned $3bn (1.86bn) in the
third quarter, compared with $3.2bn
the previous year. Revenue rose 6.5 per
cent to $17.1bn.
Prescription rebound helps Johnson & Johnson lift sales
BARBIE maker Mattel reported a higher-
than-expected quarterly profit yesterday
as the worlds largest toy company
benefited from raising prices and keeping
a tight rein on costs. Net income rose to
$365.9m (227m), up from $300.8m a
year earlier. Sales rose four per cent to
about $2.08bn, including six per cent for
Fisher-Price and 16 per cent for American
Girl.
Mattel tops estimates on price increases and cost cuts
DOMINOS Pizza yesterday reported
higher quarterly profit, topping Wall
Street forecasts, as the Olympics boosted
takings. Sales at established restaurants
increased more than expected in the
United States and abroad, sending
shares up 7.1 per cent. Net income grew
to $26m (16.1m) in the quarter ended 9
September from $22.1m a year earlier.
Revenue rose 0.5 per cent to $378.1m.
Olympic pizza demand helps Dominos succeed in the States
GKN offers a fairly unique investment opportunity, being exposed to a
number of the secular themes that we believe will be drivers of global demand
over the medium term. Following these results, we would expect to see
earnings downgrades of around ve per cent.
ANALYST VIEWS
18
WEDNESDAY 17 OCTOBER 2012
MICHAEL OWENS
A bold pro-growth strategy could
set the UKs housing market free
to outbid the last for its urban eco-
chic; the result has been a new order
of urban monotony. Worse, the UK has
the smallest room sizes, on average, in
Europe.
The criticisms have been innumer-
able: they meet the needs of a narrow
demographic; they give rise to a social
rented sector propped up by housing
benefit; some Thames riverfront devel-
opments are seemingly inhabitant
free. All these challenges miss the
point. The purpose of these develop-
ments was to provide a low-risk place
for spare capital investment to lie low
for a few years. Supplying homes for
real people to live in has been a side-
line for the construction industry.
Planning has been increasingly bur-
dened with wider civic tasks: creating
sustainable communities, healthy res-
idents, and crime free areas. While
planning should obviously engage
with, listen and respond to citizens,
good societies dont come out of the
imaginations of civil servants and
local government officers.
Society works best when its citizens
operate with greater autonomy and
control. We need clever designers to
produce smart streetscapes and
enriching parks, but good works of
engineering are being sold to us as
behaviour change programmes. This is
a political failing; planning regulation
is not the route to a good society.
Moreover, this use of planning obliga-
tions cripples an industry on its knees.
Backbench Tory advocates of free
markets are not alone in recognising
that deregulation of the land would
allow landowners and investors free-
doms to promote new development,
thereby increasing the housing supply.
But Eric Pickles, secretary of state for
Communities and Local Government,
has said no to building on the Green
Belt, which offers a plentiful supply of
redundant agricultural land.
Deregulation is unacceptable to gov-
ernments that are concerned with
land and property prices.
The more significant task is to chal-
lenge the political priorities of the
planning system. We need to decide if
we really want to encourage growth,
and if so, the direction for policy
becomes clearer. The use of pattern
books (architectual guides once used
by our Georgian forebears) to obviate
the need for planning consent for
every single development, the release
of agricultural land, the easing of plan-
ning gain obligations where develop-
ers pay for the infrastructure
expansion needed for their projects
could all simplify the planning
process, but would only be appropriate
if we embrace growth.
A more strident commitment to
planning by central government, set-
ting big priorities for extending infra-
structure and releasing development
land, could create greater certainty for
developers. Ironically, it could also cre-
ate opportunities for local, informal
planning. If central government
focused on creating the conditions for
growth, there could be more freedom
for local and site-specific experimenta-
tion for landowners, developers, and
individuals to get on with it, unimped-
ed by busy-body imperatives.
We will continue to need the politi-
cal process through which politi-
cians who unlike planners are at
least elected can set priorities and act
as arbiters when development priori-
ties are contested. The localism agenda
and the National Planning Policy
Framework promised such a root and
branch review, but their product
amounts to tinkering. Its time to be
bold.
Michael Owens is a contributor to the book
The Lure of the City. He is speaking at the
Battle of Ideas at the Barbican on 20-21
October, partnered by City A.M.
enthusiastically, its economists are
altering tack. The latest IMF World
Economic Outlook claims that the
impact of changes to fiscal policy
has been substantially
underestimated. In short, keeping a
tight grip on the public sector
deficit does not work. More, not less,
spending is needed to boost the
economy.
The IMF has serious form on this
matter. In August 2008, its chief
economist Oliver Blanchard
published a working paper on the
state of academic macroeconomics.
This is what he had to say: For a
long while after the explosion of
macroeconomics in the 1970s, the
field looked like a battlefield. Over
time, however, largely because facts
do not go away, a shared vision both
of fluctuations and of methodology
has emerged. The state of macro is
good.
The shared vision Blanchard
referred to is the superbly named,
but wholly useless, dynamic
stochastic general equilibrium
model. During the 1990s and 2000s,
mainstream economics in academia
and central banks reverted to the
old idea that economies have an in-
built tendency to move towards
equilibrium. On this basis, in August
2008 the Funds chief economist
believed that the state of macro is
good. Just a few weeks later, the
collapse of Lehman Brothers
shattered the illusion.
To be fair to Blanchard, the
terrifying events of the autumn of
2008 made him change his mind. By
January 2009, he was writing that
the crisis was caused by institutions
financing their portfolios with less
and less capital, thus increasing the
rate of return on that capital. What
were the reasons behind it? Surely,
optimism and the underestimation
of risk was part of it.
So instead of a theoretical world
in which rational decision makers
moved effortlessly towards
equilibrium, we had the reality in
2007 and 2008 of grossly optimistic
expectations about the future and
completely mispriced risks.
This sounds a pretty plausible
story. But only a few months before
the IMF believed that
macroeconomics was going
through a period of great progress.
Until recently the IMF thought fiscal
tightening did not have much
impact. Now it thinks austerity is
wrong. IMFF rules OK.
Paul Ormerod is an economist at
Volterra Partners LLP, a director of the
think-tank Synthesis and author of
Positive Linking: How Networks Can
Revolutionise the World.
AGAINST
THE GRAIN
PAUL ORMEROD
Forgetful IMF economists should remember their financial crisis failures
MORNING UPDATE
A.M.
19
WEDNESDAY 17 OCTOBER 2012
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Trade to prosperity
[Re: Trade and tech are the solution to the
worlds food crisis, yesterday]
Nick Schulz is correct. Its vital that we dont
let international development policy get
captured by groups with no interest in the
development of poor, rural economies. This
is why its so worrying that the government
emphasises its commitment to spend more
money on aid projects over its supposedly
equal commitment to freedom of trade.
Without free trade, gains from aid will prove
unsustainable.
StevenMurphy
Greenpeace is able to exert such control
over government policy because it is well-
funded by taxpayer subsidies.
HarryBarrett
Schools for profit
[Re: Incentives must be the foundation of a
revolution in British education, Monday]
This article makes an interesting, and fairly
convincing, case for the injection of profit
motives into school. Im not totally
convinced, however. I did a degree in
economics, and I appreciate the role that
market forces play in ensuring
competitiveness. But I dont think that
trying to keep costs as low as possible,
while maximising revenue, is a particularly
sensible way to run a school. Schools should
be like greenhouses, not battery farms. Its
not about churning out chickens for profit,
but ensuring that children are given the
right skills to thrive in work and life. Of
course, Im being idealistic.
MichelleGreening
Y
OU might remember Daniel
Hannan as the Conservative
MEP who tore Gordon Brown
to pieces on the floor of the
European Parliament for his
spending spree with our money.
Until then, Hannan had been a rare
voice in the wilderness, attacking
the EU since he became an MEP in
1999.
Although he has now been vindi-
cated by the fallout of the euros
deep troubles, still the old European
establishment goes on praising the
crumbling edifice; not least the
Nobel Peace Prize committee. In his
new book, A Doomed Marriage,
Hannan outlines why the European
project was doomed from the begin-
ning. As he puts it, the EU is a symp-
tom of European peace since the
Second World War, not its cause.
Yet that is the great argument of
EU defenders that a supranational
state saved its constituent nations
from disaster and economic break-
down. In fact, as Hannan explains,
Europes rise to global hegemony
over the last millennium was due to
the independence of its nation states.
Countries fought to outdo each
other; new ideas could be tested in
one nation and, if successful, tried
elsewhere. It goes without saying
that the reason Greece, Spain, Italy
and Ireland have all been brought to
their knees is because of a suprana-
tional lock-in; if they could have
manoeuvred their economies inde-
pendently of European central poli-
cy, they would not be in this state.
It isnt just the principle of suprana-
tionalism that Hannan expertly
demolishes. The way that suprana-
tionalism was constructed was
extremely undemocratic. The EU is
run by a body that combines execu-
tive and legislative power. The
European Commission, as well as
being the EUs government, is also
TOP TWEETS
Im just back from Beijing, and the euro is no
longer the sole topic of conversation. QE and
the fiscal cliff are now major issues.
@KingEconomist
Francois Hollande is ruining the French
economy through taxation. Dont forget
Labour want to do the same thing in Britain.
@FaulconbridgeUK
Its vital that the government doesnt raise
business rates next year, despite yesterdays
inflation figures.
@anncoffey_mp
Well done Theresa May on the right Gary
McKinnon decision. And also to @JanisSharp
for her heroic efforts to protect her son.
@ZacGoldsmith
Has Goldman Sachs recovered from claims
that its managers called clients muppets?
YES
Goldman Sachss brand has been through considerable tumult in
recent times, but over the past six months it has seen a significant
increase in the scores it receives from our UK BrandIndex. Back in
March, the banks brand hit a major low when a former Goldman
worker claimed management thought of their clients as muppets.
The subsequent media fire severely scorched its reputation in the
eyes of consumers. But, while the financial sector as a whole is still
riding low due to the events of the past few years, Goldman Sachs is
no longer lagging behind all other financial institutions. Recent
events like the Barclays Libor scandal, technical glitches at RBS and
a money laundering scandal at HSBC have put the relative quiet at
Goldman Sachs in perspective, thus enabling its brand to recover
somewhat relative to its embattled competitors.
Sarah Murphy is associate director of YouGov and director of
BrandIndex.
Sarah Murphy
NO
Trevor Morris
The leaking of chapters in recent days from the new book by Greg
Smith who originally made the muppet allegations will likely
have another negative impact on Goldman Sachss reputation.
This could prove damaging in two areas. Firstly, new recruits may be
put off and skilled potential employees may look to join other firms.
Secondly, Goldman Sachs may have difficulty attracting new
business. This is especially true of work relating to sensitive sectors,
with a high level of public interest. It could include anything related
to government or high profile individuals. However, people have
remarkably short memories. Greg Smiths original claims are a
distant memory and will only be brought back to media attention
for a short period. We should expect a short-term fallout from
recent allegations. But will it have a lasting effect? Probably not.
Trevor Morris is visiting professor in public relations at the
University of Westminster.
RAPIDresponses
the only body that can propose legis-
lation in practically all areas. On top
of that, the 27 commissioners are
unelected. As a result, it moves ahead
at its own whim, irrespective of the
wishes of its constituents.
Its true that the first generation of
post-war euro-leaders were idealists
who believed in the glorious dream
of bringing stability and recovery to a
war-scarred continent. Now they
have been succeeded by those who
have discovered a marvellous, unac-
countable way to make a living.
Because the EU is run on such a
tyrannical infrastructure, its
extremely easy to bat away objec-
tions. If a European employee criticis-
es the euro as the British official
Bernard Connolly did well, just
sack him. And, if a country votes
against any lurching increase in EU
power, the answer is simple enough:
get them to vote again, until they
realise the foolish error of their ways.
Hannan is no mere critic of the sys-
tem. He also provides alternatives
notably Switzerland and Norway.
Switzerland still shares in the free-
doms of the single market and can
sign trade accords with third party
countries. Norway got no further
towards EU membership than the
European Economic Area. Both coun-
tries are prospering. Why cant we
just go ahead and join them?
Harry Mount is the author of How
England made the English. Daniel
Hannans book A Doomed Marriage
Britain and Europe (Notting Hill Editions)
is out now.
HARRY MOUNT
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Why the future of
Europe doesnt lie
with the failed EU
L
EGACY was one of the reasons
London won the rights to host
the unquestionably successful
Olympic and Paralympic games.
We all get a warm glow when one of
our medallists pops up on Question
of Sport or we read statistics showing
that thousands are trying new
sports. But are we getting the same
buzz from the UK businesses that
were promised their own legacy a
dividend from the games?
With 2012 looking like another lost
year for the domestic economy, and
with the balance of trade deficit
reaching 4.2bn in August, the task
of helping UK businesses to export
has become critical. That challenge
falls to the advisory community
(including accountants), to banks
and to government. And these
groups the equivalents of the
Olympic coaches, sports psycholo-
gists and sponsors must ensure
that businesses are fully prepared
before they compete. Too often, that
preparation is lacking.
PREPARING TO EXPORT
If businesses are to be successful in
the export market, they and their
advisers must be honest about
where they are now, and which
facets of the mechanics of export
might need addressing. With that in
mind, ACCA invited large and small
export businesses, professional advis-
ers, banks and other experts to give
their insights at three roundtable dis-
cussions in London, Cardiff and
Glasgow. Participants had an oppor-
tunity to vote on and debate key
issues.
The UKs standing as an interna-
tional brand was still seen to be a sig-
nificant asset, particularly in the
wake of the Olympics and the
Diamond Jubilee celebrations.
However, while a good international
standing undoubtedly helps open
doors, it is no substitute for prepara-
tion.
Larger businesses and their repre-
sentative bodies put considerable
resources into building their brand
in target export markets. This
includes the preparation of an export
strategy that maximises returns.
However, anecdotal evidence sug-
gested that small businesses, new to
export, do not always conduct them-
selves well abroad and risk damaging
the national brand. Examples
include failure to present themselves
and their businesses effectively,
using colloquial English, or failing to
find out whether interpreters would
be required at meetings.
REGIONAL GROWTH
We also asked exporters which coun-
tries and regions they currently
export to, and which they see as sig-
Accountants can boost UK exports
nificant in the next five years. For
London businesses, the Middle East is
currently most important region,
with Europe second. South America
and Asia were highlighted as the real
growth areas in the next five years.
While the Middle East was seen as a
potentially lucrative destination,
exporters felt that businesses should
concentrate on establishing them-
selves and expanding there before
looking further afield. Although
emerging economies still post growth
figures and attract headlines, these
markets can be challenging and
require a great deal of research on
cultural issues prior to entry.
Established markets like North
America and Europe, particularly
Germany, should not be ignored in
favour of emerging economies.
However, the complexities of these
markets should also not be over-
looked. North America has as many
regional variations as other large
markets, and business people in the
US have high expectations. Exporters
said this is something would-be
exporters should bear in mind.
WEIGHING UP RISKS
We also asked roundtable partici-
pants about the risks and obstacles
faced by exporters. In London, cultur-
al and language difficulties were
rated as the most significant barrier
to export success, with 29 per cent of
the vote. Legal and regulatory issues,
tax and customs, finding contracts,
intellectual property (IP) issues and
costs were all given equal weight,
with 14 per cent of the vote each.
Other issues highlighted included:
incorrect pricing, cultural misunder-
standings, foreign exchange, bad
debt, insurance, lost goods, delivering
on time, failure to clear customs,
labelling and classifying goods cor-
rectly, IP protection and the need to
be sceptical about research based on
statements made on the internet.
The issue of IP protection was seen
as critical for potential exporters to
consider at an early stage or risk
new products being copied in mar-
kets where IP is not respected.
THE ROLE OF GOVERNMENT
The overwhelming view from all
roundtables, particularly London,
was that government needs to do
more to support export activity, with
the emphasis on taking a long-term
view.
With no UK growth anticipated for
as long as five years, tax incentives
and help with the practicalities of
exporting are now imperative.
Potential exporters believe that gov-
ernment should ask what each new
measure it proposes will actually do
for growth.
Large businesses are very effective
exporters. But they make long-term
investment in overseas trade and can
gain government support at a high
level. Roundtable participants said
that, for government help to be mean-
ingful, it must be consistent.
Businesses were frustrated by how
little UK Trade and Industry (UKTI) is
empowered to help smaller business-
es a factor, ACCA believes, that fur-
ther underlines the need for a more
co-ordinated approach from govern-
ment policymakers.
While the majority of businesses
finance export activities through
their usual business facilities, in
London businesses said that working
capital could be a big barrier to
export. There is a need for greater
education about financing schemes
and practices.
All these challenges, alongside the
imperative for businesses to try to
export more, create a pressing need
for the best possible advice. With
accountants seen as trusted advisers,
our profession has a responsibility to
ensure business gets that advice. And,
along with lawyers and bankers, we
also have a duty to balance messages
about the need for preparation with
the fact that small enterprises are
often time poor. They will need exter-
nal affordable help to prepare them
for the export challenge.
The bottom line is that businesses of
all sizes need accessible, practical
help if we are to embed export into
the psyche of British business. ACCA
is committed to working in partner-
ship with other bodies to provide
information for potential exporters in
the coming months.
Andrew Leck is head of ACCA UK.
ACCA
COMMENT
ANDREW LECK
Bigger businesses are more effective at making the long-term investments necessary for foreign trade
Smaller firms need
advice before they
can expand abroad
The UKs brand is
still seen as a significant
asset, particularly in the
wake of the Olympics
4
4
4
S I X T H B A K E S
E H P B T
R E C A L L B I L E
A V O W U O P
P E R S E C U T O R
H G K N P
D I S M I S S I V E
P I E T O I L
R O P E S P I N A L
O G T L E
P I P E R A L E R T
4 1 2 1 2 4 3
8 6 9 7 6 8 9 5
6 4 8 9 1 6 2
7 3 1 2 6 8 8 1
9 2 4 1 8 5 7 3
7 9 1 3
5 2 3 1 6 9 7 4
1 7 4 5 7 8 9 1
7 9 8 2 3 6 3
2 4 1 5 9 7 8 5
3 8 6 9 1 5 2
4
4
4
4
4
4
4
4
4
The nine-letter word was
UNIVERSAL
T
E
R
R
E
S
T
R
I
A
L
S
A
T
E
L
L
I
T
E
&
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A
B
L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WEDNESDAY 17 OCTOBER 2012
WHO DO YOU THINK YOU ARE?
BBC1, 9PM
Former footballer John Barnes
explores the role his grandfather
played in Jamaicas fight for
independence from Britain.
EMMERDALE
ITV1, 7PM
Two wedding celebrations are under
way, but while Declan and Katies is
full of love and happiness, Chas and
Dans is riddled with secrets and lies.
DALLAS
CHANNEL5, 9PM
John Ross struggles to stay on top of
the drilling operation, while Rebecca
reveals news that has serious
consequences for Christopher.
TVPICK
prepared well for this start, as no
doubt the Poles have too, but now
weve got to do it all over again
and hopefully well be as prepared as
we were.
I have chosen the team to start
the game and I have no intention of
changing it unless someone falls ill.
For the travelling England fans
2,000 of which were scheduled to fly
home last night the officials deci-
sion not to close the roof despite the
forecasting of rain is sure to be the
subject of intense dismay. The
Warsaw-based stadiums retractable
roof cannot be moved while rain is
falling so even then substantial
action could not be taken and those
with tickets remained exposed to the
elements for an additional 45 min-
utes as a decision was delayed regard-
ing the evenings outcome.
In addition to the Polish FA, the
postponement of a first England fix-
ture since 1979 could also result in
scrutiny on the role of the Italian
referee Gianluca Rocchi.
ENGLANDS vital World Cup qualifier
away to Poland was last night post-
poned until 4pm today because of a
torrential downpour that left the
surface of the 400m national
stadium unquestionably unplayable.
Upon his first inspection, England
manager Roy Hodgson was visibly
unhappy with the pitchs condition
after significant storms around
Warsaw, and the officials damaging
failure to close the stadiums
retractable roof, ensured that water
engulfed the pitch to leave postpone-
ment until today as the only apparent
option and one that the manager was
concerned may not get fulfilled.
Im rather hoping they will get it
[the roof] closed as quickly as possible
and start to do some work on the
pitch because the pitch is in very poor
condition, Hodgson said. Its going
to need a lot of attention if its going
to be playable.
There are no other possibilities.
You cant find dates at international
level. The dates that are available are
all taken up, so you cant just sudden-
ly decide well play it another time.
It is the rules of world footballs
governing body Fifa that dictate that
both teams must attempt to replay a
fixture within 24 hours if there is no
option but to postpone it under such
circumstances, and if that is not pos-
sible then a date must be agreed by
the two relevant associations.
Polands players were believed to be
reluctant to reconvene again today
due to their club commitments of
domestic fixtures on Friday but
Hodgson, in contrast, was adamant
that that should still be the case.
What you have to do is to try to
organise to get the game played as
quickly as possible, Hodgson (right)
explained. Were disappointed. We
Roofs and rain cause
Poland vs England
called off after bad
Warsaw weather
Ireland ease
Traps pain
Stubborn Northern Ireland resist
powerful Portugal for vital point
could bring them to within two
points of both Israel and Portugal
who are tied in second with seven.
The Portuguese featuring some
of Europes most decorated players
in Ronaldo, Pepe and Nani
dominated the vast majority of the
game but the visitors, and in
particular Manchester Uniteds
Jonny Evans, defended stubbornly
and resolutely to ensure that they
remained in the game.
It was Evans and Kyle Lafferty
who combined for McGinns
opener but though Craig Cathcart
almost scored an own goal, and
Ronaldo, Postiga and Ruben Micael
all went close against a side with
just one win in their last 18, it
wasnt until Postigas well-placed
equaliser that the game changed.
WEDNESDAY 17 OCTOBER 2012
26
SPORT
cityam.com/sport
Scotland keep
bad Kompany
HILLSBOROUGH campaigners have
welcomed the attorney generals
decision to apply for the original
inquest verdicts relating to the 1989
stadium disaster to be overturned.
Dominic Grieve QC said yesterday
he would apply to the High Court to
have the 96 verdicts of accidental
death quashed, paving the way for a
second inquest likely to be held next
year. Grieves move comes after last
months Hillsborough Independent
Panel (HIP) report, which published
evidence that victims had been
failed by emergency services and
unfairly smeared by police.
He said: My consideration of the
evidence is far from complete but,
given the anxiety further delay may
Second Hillsborough inquest
set to follow verdict quashing
cause the families affected by the
Hillsborough disaster, I have decided
to take an exceptional course and
state at this stage that, on the basis
of what I have already seen, I have
determined that I must make an
application to the court.
It is the latest victory for
campaigners, who last week saw the
Independent Police Complaints
Commission launch the biggest ever
review of conduct, following
revelations in the HIP report.
Were very pleased with the pace
things are going at, said
Hillsborough Family Support Group
chairman Trevor Hicks.
We have waited 23 years. Due
process will have to take place. We
are pleased he has pointed out it will
be 96 fresh inquests.
BY FRANK DALLERES
BY DECLAN WARRINGTON
@cityam_sport
Wales return
to losing ways
FAROE ISLANDS ..........................1
REPUBLIC OF IRELAND..............4
WORLD CUP 2014 QUALIFIER
CROATIA.....................................2
WALES .......................................0
WORLD CUP 2014 QUALIFIER
REPUBLIC of Ireland last night got
their 2014 World Cup qualification
campaign back on track with
a victory that eased the pressure on
manager Giovanni Trapattoni.
Marc Wilson gave the away side
the lead with a header immediately
after half-time and Jonathan Walters
added another headed goal less than
10 minutes later.
Arnbjorn Hansens shot from
inside the area into the bottom left
corner in the 68th minute created
brief uncertainty before an own goal
from Pol Johannes Justinussen five
minutes, and Darren ODeas close-
range strike two minutes from time,
later sealed Irelands win.
WALESS World Cup qualification
hopes took a significant blow with
defeat away to second-placed Croatia.
It had been hoped that Fridays
dramatic 2-1 victory over Scotland
would inspire some momentum but
a goal for each of Mario Mandzukic
and Eduardo gave the home side a
lead that would not be threatened.
Wales have three points from four
games in Group A but with both
Croatia and Belgium on 10 their
hopes already appear slim.
Croatia took the lead after 27
minutes when Mandzukic charged
down goalkeeper Lewis Prices
clearance, and half an hour from the
end Eduardo scored with a tap in
from a rebound.
PORTUGAL..................................1
NORTHERN IRELAND..................1
WORLD CUP 2014 QUALIFIER
NORTHERN Ireland produced a
defiant defensive display to secure
an equally surprising and
impressive point in their World
Cup qualifier away to Portugal.
Niall McGinn chipped Michael
ONeills team ahead after 30
minutes before Helder Postigas
equaliser 10 minutes from time
rescued the home side from an
embarrassing defeat. Northern
Ireland now have two points from
three games but with a game in
hand on those above them, victory
BELGIUM....................................2
SCOTLAND .................................0
WORLD CUP 2014 QUALIFIER
SCOTLAND last night lost again
to effectively end their hopes
of qualification for the 2014
World Cup.
Under-pressure manager Craig
Levein has now led his side to only
two points from four matches to
leave them bottom of Group A
after goals from Christian Benteke
and Vincent Kompany for an
under-strength Belgium brought
further dismay.
Levein had admitted beforehand
that a win was necessary so when
Benteke headed Belgium in front on
69 minutes, Scotland were in
trouble, and it took only a further
two for Kompany to fire the winner.
27
FERRARI have become the last top-
five team to finalise their driver
line-up for next season after
Felipe Massa signed a one-year
contract extension.
The 31-year-olds deal is a reward
for his recent upturn in form, which
has seen him recover from a slow
start to earn points in seven of the
last eight races.
Massas much-anticipated
signature will only heighten
speculation that he is keeping a seat
warm until Sebastian Vettel moves
from Red Bull at the end of 2013.
Fernando Alonsos contract with
Ferrari runs until 2016.
McLaren, Red Bull and Mercedes
have already confirmed their 2013
line-ups, with Lotus seemingly
certain to retain Kimi Raikkonen
and Romain Grosjean.
Ferrari retain
Massa as Vettel
talk persists
big pain
J
ETTING in from the other side of
the world for talks with the
England hierarchy yesterday
shows that Kevin Pietersen is
making an effort to build bridges after
the text message row that threatened
his international career.
Having been the cause of the
controversy, Pietersen appears to
appreciate that the onus is on him to
repair the damage done to his
reputation and regain the trust of
selectors, coach Andy Flower and his
dressing room colleagues.
Judging by what some of those
players have been saying lately, there
seems to be a willingness to welcome
the batsman back into the fold, and
if thats the case then I think it
would be crazy not to play him in
next months tour of India.
Delaying his playing comeback
until Februarys trip to New Zealand
would needlessly deprive England of
experience in the top order when,
with Andrew Strauss retired and Ian
Bell likely to miss the second Test for
the birth of his child, they need it.
Simply put, he is a better player
than the alternatives, Eoin Morgan,
Jonny Bairstow, Ravi Bopara, knows
subcontinent conditions better than
most from his Indian Premier
League stints and would, youd like
to think, feel he had a point to prove.
But his diplomacy doesnt have to
end there. Pietersen could really do
himself a favour by spending some
time giving guidance to Englands
younger players, many of whom
havent played in India before.
His coach at Delhi Daredevils has
praised him for taking teenager
Unmukt Chand under his wing to
great effect the likes of Joe Root
and Nick Compton could benefit
from the same treatment.
It wouldnt cost Pietersen much
but might help England greatly and,
by showing everyone that he has
turned over a new leaf, would heal
the damage done to his image.
Andy Lloyd is a former England Test
cricketer and chairman of Warwickshire.
IN BRIEF
Hughes continues winning form
n RACING: Jockey Richard Hughes
followed Mondays seven victories from
eight races with three yesterday at
Leicester, and there was also a treble for
Ryan Moore. Hughes said: It keeps
getting better. The bookies are running
for cover.
Brook in career best shape
n BOXING: Britains Kell Brook has
warned Hector Saldivia not to judge
him on his last fight against Carson
Jones, in which he faded after the sixth
of the 12 rounds in an unconvincing
points victory, when they meet in an
IBF welterweight title eliminator on
Saturday. He said: If Hector has gone
off my last performance, well that
wasnt me. Things have been addressed
and Im a different animal. I am in the
best shape I have been in.
Fickou earns first France call
n RUGBY UNION: Precocious centre
Gael Fickou has been given his first
international call up after being
included in Frances 33-man squad for
the autumn internationals. The 18-year-
old is one of seven to earn a first call.
Englands Lumb sinks Yorkshire
n CRICKET: Yorkshire made a
disastrous start to their Champions
League T20 campaign proper yesterday,
losing by eight wickets to Sydney Sixers
in Cape Town. Englands Michael Lumb
hit an unbeaten 43 as he surpassed
Yorkshires 96-9 in just 8.5 overs.
Torres reveals lack of care
n FOOTBALL: Chelsea striker Fernando
Torres has admitted he once did not
care if the team won or lost.
SEBASTIAN Coe is to be elected as the chairman of the British Olympic Association after
his only rival for the role withdrew from the race. Richard Leman, the boss of British
hockey, was the other potential candidate but was a huge underdog given the success
Coe had throughout the London 2012 Olympic Games. Coe will succeed Colin Moynihan
in the role when the elections take place on 7 November.
I definitely believe in myself. I wouldnt be in the game if I
didnt. I have the mental toughness and the capability to do it
British No1 Heather Watson believes she can become the world No1
cityam.com
WEDNESDAY 17 OCTOBER 2012
BY FRANK DALLERES
SERBIA U21........................0
ENGLAND U21 .....................1
BY SPORTS DESK STAFF
EURO 2013 QUALIFIER
ENGLAND WIN 2-0 ON AGGREGATE
Pearce proud
despite new
race row
ENGLAND U21 manager Stuart
Pearce said that Serbia had
been reported to European
footballs governing body Uefa
because of the alleged racial
abuse directed towards his
players as they secured
qualification for Euro 2013.
Full-back Danny Rose
gestured that monkey noises
were being made at him just
before he was sent off on the
stroke of the final whistle as
aggressive confrontations
followed Connor Wickhams
stoppage-time goal with the
victory already assured.
Pearce said: I think there
were one or two racist
incidents that came on from
the crowd and they have been
reported to Uefa, I believe,
by ourselves.
I am very proud of my
players and my staff and very
proud of the achievement in
getting to a fourth
tournament in a row.
In an unconvincing display,
England spent the majority of
the game fending off pressure
before Wickham slotted in to
an open goal on the break
after Serbias goalkeeper
Branimir Aleksic had gone up
for a late, final attack.
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CRICKET
COMMENT
ANDY LLOYD
Mentoring England
starlets would show
Pietersens changed
COE TO CHAIR BRITISH OLYMPIC ASSOCIATION
Referee Gianluca
Rocchi inspected the
pitch to see if it was
playable despite the
appalling conditions
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