You are on page 1of 35

FTSE 100 5,884.90 +45.84 DOW 13,245.68 +133.24 NASDAQ3,011.93 +12.27 /$ 1.60 unc / 1.25 unc /$ 1.

28 unc
Certified Distribution
27/08/12 til 30/09/12 is 128,785
n Obama edges ahead
as race goes down to wire
nSwing states are divided
by the smallest of margins
Barack Obama praised a spirited campaign Romney said he has only written a victory speech
US VOTERS went to the polls yesterday
in one of the tightest presidential elec-
tions in memory, with the race to the
White House set to be decided by the
slimmest of margins in a number of
key battleground states.
As early results from crucial swing
states trickled through in the early
hours of the morning, the race
teetered on a knife-edge, although
Democrat President Barack Obama
appeared to have the upper hand.
Polling in Florida and Virginia was
neck-and-neck as City A.M. went to
press, while initial vote counting in
Ohio seen as the most important ter-
ritory gave Obama a slim lead over
Republican opponent Mitt Romney.
Obama appeared to be closing in on
another swing state, New Hampshire,
with few surprises elsewhere.
The first states on the east coast
closed voting at midnight GMT, and
the election officially ended at 6am
this morning as Alaska shut its
polling stations. Yesterday brought an
end to months of campaigning and
billions of dollars spent between the
two candidates.
Early reports suggested a much high-
er than expected turnout with long
queues across the country, especially
in closely fought Virginia and Florida.
A higher turnout is believed to favour
the President.
Obama and former Massachusetts
governor Romney have repeatedly
clashed over taxes, healthcare and
government spending. The incumbent
has pledged to remove tax cuts for the
highest earners, while Romney has
vowed to repeal Obamas healthcare
reforms on his first day in office.
Romney continued to campaign
throughout election day, a rare occur-
rence in the US, as he embarked on a
whirlwind tour of Ohio and
Pennsylvania after voting in his home
town of Belmont, Massachusetts.
Obama, who cast his vote two weeks ago,
spent the day in his native Chicago hav-
ing wrapped up his campaign at a rally
in Iowa on Monday night.
With polls showing the two candidates
neck-and-neck, the race was set to be
decided by whose supporters turned up
on the day. We feel confident that
weve got the votes to win but its going
to depend ultimately on whether those
votes turn out, Obama told reporters
yesterday. He also praised his counter-
part for a spirited campaign.
Although New Jersey and New York
continued to feel the effects of
Hurricane Sandy, with many residents
displaced and makeshift polling booths
open, the storm is unlikely to have
affected the outcome in the two
Democratic strongholds. However,
Sandy is expected to have given Obama a
late boost nationwide. Exit polls claimed
nearly two-thirds of people said his
response to the storm was a factor.
Polls conducted earlier yesterday gave
the President a three-point advantage in
the popular vote, but narrowing mar-
gins than in the crucial swing states.
Although 428 of the 538 electoral col-
lege votes appeared practically decided,
due to most states strongly favouring
the Republican or Democrat candidate,
the eventual winner needs a strong
showing in the nine swing states to
achieve victory.
Florida, historically one of the coun-
trys most decisive battlegrounds,
appeared to be the closest of the states,
with yesterdays polls disagreeing on
who was more likely to win the states
29 electoral votes.
The first result to be counted, in the
tiny New Hampshire village of Dixville
Notch, illustrated just how close the con-
test was. Votes were tied for the first
time in the villages history at five for
each candidate when they were
announced yesterday morning.
The voting process was not so smooth
in the rest of the country however, with
reports of polling machine malfunc-
tions and voter fraud in several states.

3:00 AM
Can the dollar really survive yet
another round of QE? Or will
the greenback come out ghting?
Find out why the Feds latest
assault on the US currency
doesnt mean the dollar is dead.
Saxo Capital Markets UK Limited is authorised and regulated by the Financial Services Authority.
Our products are traded on margin and it is possible to incur losses that exceed your initial deposit.
F X S P O T , C F D s , F O R W A R D S , F U T U R E S & O P T I O N S
C F D S T O C K S , I N D I C E S & C O M M O D I T I E S S T O C K S B O N D S E T F s E T O s
*only 1000 free eBooks are available. The Saxo eBook has been produced for educational purposes
only and has not taken into account any particular recipients investment objectives or nancial
circumstances and does not contain investment advice or an investment recommendation.
Be the rst to download the FREE
Saxo eBook* and join the #FXdebates
to gain expert insights into the dollar:
John J. Hardy
Head of FX Strategy
A woman
holds a roll
of I Voted
stickers in
Johnstown, Wisconsin
Lines of voters wait to cast their ballots in St. Petersburg, Florida
BHP begins hunt for new chief
BHP Billiton has quietly started looking
for a successor to Marius Kloppers, chief
executive, in what could herald a further
shake-up in the leadership of the global
mining industry following a five-year
period of stability.
JPMorgan in talks over SEC claims
JPMorgan Chase is in advanced
settlement talks with the Securities and
Exchange Commission over allegations of
misconduct in the handling of mortgage-
backed securities, according to people
familiar with the matter. The settlement
if finalised as expected would remove
one significant item from the banks toxic
pile of litigation and regulatory action
related to both the financial crisis and its
trading losses this year.
Property rebound fuels Freddie Mac
Freddie Mac has posted its fourth straight
quarterly net profit, underlining how the
US property market has rebounded and
the state-owned mortgage guarantor is
weaning itself off its taxpayer support.
The US mortgage financier recorded a
$2.9bn third-quarter profit.
Tata Steel penalty for over-mining
Allegations of illegal mining in the
eastern Indian state of Orissa have landed
Tata Steel with a near-700m fine.
The states government imposed the
penalty of more than 60 billion rupees as
part of a wider crackdown on improper
mining activity.
Swedes set right example, says MP
Conservative MP Ben Gummer will argue
on Friday that Britain needs to take
Swedish lessons in reducing debt.
Government may end EDF talks
Britain is prepared to walk away from talks
with French giant EDF Energy over its
planned UK nuclear plant if the burden for
the consumer is too high, said John Hayes,
the energy minister.
Deutsche Bank boss courts Acromas
Plans to offload the company behind the
AA and Saga have stepped up a gear after
the chief executive of Deutsche Bank,
Anshu Jain, met with management to
discuss options.
Libor inquiry in Singapore
Citigroup disclosed in its quarterly
financial filing yesterday that the
Monetary Authority of Singapore has
launched an inquiry into its practices
involving the setting of global interest
Apollo in talks on McGraw-Hill unit
McGraw-Hill Cos. has entered into
exclusive discussions to sell its education
unit to Apollo Global Management, with
an agreement within a few weeks.
The new jobs website for London professionals
To contact the newsdesk email
S ever, the actual voting was the
easy bit. The truly epic task
comes next: trying to mend the
US economy. Contemporary
America is a strange place: in some
ways, it remains astonishingly
successful; in others, remarkably
weak. More than ever, the giant has
feet of clay, a tragedy for those of us
who love America and its wonderful
attachment to individual liberty and
personal progress.
America remains the worlds eco-
nomic powerhouse in several crucial
respects: it still has some of the best
companies in cutting-edge fields, not
least the likes of Apple and Google. Its
overall GDP remains immense and is
larger than ever, having more than
caught up after the crisis. It retains
many of the best universities and
hosts top scientific and entrepreneur-
ial ventures. Its military strength
remains unrivalled. It retains the
worlds dominant reserve currency,
the greenback, which allows it to live
beyond its means. Perhaps most
important of all, the US still has more
appeal than any other on earth to
potential immigrants, from poor
countries as well as wealthy ones.
But the US also suffers from many
major weaknesses. Spending commit-
ments keep on growing, especially on
entitlement programmes; on current
trends, bankruptcy is inevitable at
some point this century. This may
sound melodramatic but it isnt.
The US has yet to decide whether it
wants to retain its small-state, low tax
model or whether it wants to turn
itself into a social-democratic
European-style state. The current
compromise bigger and bigger gov-
ernment together with still-low taxes
as a share of GDP doesnt add up. It is
not clear whether the US really made
that choice yesterday.
Another issue is that productivity
growth has slowed too much, which
means that long-term GDP prospects
are uninspiring. Lombard Street
Research puts potential growth at 2-
2.25 per cent, driven by output per
worker growth rising at little over 1
per cent a year, with the labour force
growing by the same amount.
This brings us to other problems:
the labour market remains in a terri-
ble state, with many workers having
quit the jobs market and employ-
ment still 3.1 per cent lower than it
was in late 2007. At the same time,
median incomes are under huge pres-
sure and back to levels last seen in
the 1980s on some measures.
So much for the election. Now
America must regain its mojo
Follow me on Twitter: @allisterheath
Another issue is that monetary poli-
cy, like in many other developed
nations, remains unsustainably
expansionary and hyper-active.
Last but not least, the US faces a dra-
matic crunch in just a few weeks that
this mornings election results may
not actually resolve. On current laws,
fiscal policy is set to tighten by
around 5 per cent of GDP in early
2013, a very large amount to happen
all at once. The political classes will
have just a few weeks in which to
hammer out a better way forward.
Lombard Street, for one, expects
around half of the fiscal cliff to occur
regardless of who wins the election, a
tightening of 2-2.5 per cent of GDP.
In some respects at least, the US
economy still retains some if its
famous flexibility. Bad decisions are
reversed faster than they are in other
countries. Take home ownership: the
rate has fallen to just 65.3 per cent,
the lowest level since 1995. While this
shows the extent of the pain that
America has gone through, it also
confirms that the liquidation process
from the malinvestment caused by
the bubble has been proceeding
apace. But for everybodys sake, what
we now need is growth and ambition,
not retrenchment, and for America to
regain its mojo. It cannot come a
moment too soon.
Surfer Mike Wigart picks up his ballot at a polling station in the garage of the
Los Angeles County lifeguard headquarters in in Los Angeles, California
Zackary Lea, 3, returns
his mother's voting card
in Las Vegas, Nevada
THE President of the United
States of America is not directly
elected by the people, but by a
group of 538
known as the
electoral college.
Each state has
between three
and 55 members
of the college,
broadly by
population. The
members, who are
typically local
politicians chosen to
recognise public service,
normally vote in line with the
popular vote in their state.
How the US electoral system
works and how states are won
The system was set up when the
United States was founded, as a
compromise between slave states
and free states. But no voting
system is perfect, and the
electoral college has a
number of flaws. In a
tight race, the winning
candidate can clinch
power despite
garnering less than
50 per cent of the
popular vote,
providing they pass
the magic 270
number in the
electoral college.
And as in the UK, the
system creates safe states and
swing states, meaning the bulk of
a candidates efforts will be
focused on a handful of hotspots.
UNCERTAINTY over the outcome of
the presidential election weighed
on Asian markets as they opened
this morning, after the Dow Jones
index had posted its biggest gain in
a month as the US voted.
Wall Street had bet on a Barack
Obama victory yesterday, pushing
the Dow up more than one per cent
Japans Nikkei index followed it
early this morning, opening up 0.6
per cent. However, as early voting
results created more uncertainty
than clarity, the index slumped to
below yesterdays closing price.
While Romneys policies are gen-
erally perceived as being pro-busi-
ness, an Obama victory would be
seen as more friendly to bonds, due
to his preference for lower interest
The price of gold rose for a second
Asian markets
struck by initial
US uncertainty
BY JAMES TITCOMB successive day, as investors suggest-
ed further stimulus measures from
the Federal Reserve would be more
likely under Obama than under his
Republican opponent Mitt Romney.
The President has promised to
keep Reserve chairman Ben
Bernanke, while Romney prefers a
tighter fiscal policy, and may
replace Bernanke.
The dollar also reached an eight-
week high against the euro.
The clear message from the mar-
ket however, was that it wanted a
clear winner emerging by this
morning. With pollsters predicting
that the slight gap between Obama
and his challenger Mitt Romney
had widened, US equity markets
rose in relief that uncertainty was
unlikely to drag on.
Analysts suggested that an Obama
victory was priced into the market,
with volatility expected in the
event of a Romney victory.
THE Republicans were projected this
morning to keep control of one of the
other centre of power up for grabs in the
election: the House of Representatives.
The US President actually has little
legislative power to support his agenda
without the support of Congress made
up of the House of Representaives and
the 100-seat Senate.
According to the
US constitution,
any legislation
must be passed
in identical
form by both
the House of
and the Senate
before the
president can
sign it into law.
Thirty three Senate seats are up for grabs
(23 Democrat and 10 Repub-lican) as
well as 435 in the House of
Representatives and 11 state
Going into last night the Democrats held
a 53-47 majority in the Senate, and the
battle for control was another close race
after a series of events during the
Republican campaign looked to have
narrowed their chances of winning the
three seats necessary to take charge.
These include gaffes on abortion from
Missouri candidate Todd Akin who
claimed women had biological defences
that stopped them falling pregnant if
raped and the choice of candidates who
lean heavily to the right of the party,
including Tea Party-backed Richard
Mourdock (pictured right) in Indiana.
These more outspoken candidates are
unlikely to win
ballots from
swing voters that
take a more
moderate party
The Democrats
would have
needed to win
an extra 25 seats
overnight to secure a majority in the
House of Representatives.
Among the Houses most high-profile
candidates is Massachusetts fourth
district Democratic hopeful Joe Kennedy
III (pictured left).
The grandson of former New York senator
Robert Bobby Kennedy is the latest
member of the most famous political
dynasty in US history to step into the
high against the
New Hampshire set
to swing to Obama
* Virignia too close to call
* Ohio too close to call
Dow Jones
closed up
its biggest gain in
two months
MARKS & SPENCER chief executive
Marc Bolland yesterday asked for a
little patience before seeing a turn-
around in its troubled womenswear
division and defended his strategy as
the group revealed a 10 per cent fall in
half year profits to 289.5m.
The Dutchman, who is 18 months
into a five-year plan to revive the
groups fortunes, made sweeping
changes to his senior management
team in July after reporting its worst
quarterly sales in three years.
The high street bellwether yesterday
unveiled like-for-like general mer-
chandise sales were down 1.8 per cent
in the second quarter, an improve-
ment on the seven per cent slump in
the previous period. Like-for-like sales
at its food division rose 1.6 per cent.
Bolland said the company was
addressing setbacks it experienced
earlier the year, when stock manage-
ment issues left it short of best-selling
items such as coats and knitwear.
He also admitted that M&S had not
BY KASMIRA JEFFORD been fashionable enough in the past
and said it was taking bolder moves to
back key trends, selling 44,000 mili-
tary-style coats in the first half. He
added that the influence of the new
management team led by John Dixon
would not be seen until next years
autumn/winter season.
Bolland insisted M&S was firmly on
track to achieving its goal of becoming
a multi-channel retailer and said it
was leading the pack in mobile.
Online sales rose by 18 per cent in the
half year, outperforming the sector by
eight per cent.
Primarks Union Jack sales boost
profits at Associated British Food
ASSOCIATED British Foods chief
executive has said customers snap-
ping up Primarks Union Jack
themed merchandise during the
Olympics and the Diamond Jubilee
helped spur a 17 per cent rise in
group full-year profit.
George Weston said the discount
fashion chain sold more than 7.5m
items stamped with the flag as Brits
and overseas visitors bought into the
Primarks profits jumped 15 per
cent to 356m in the year to 15
September on revenues up by the
same amount to 3.5bn.
All categories in all countries are
performing well. Menswear is partic-
ularly well as outerwear
within womenswear, which is proba-
bly the weather effect, Weston said.
He added that sales showed no sign
of abating in October despite figures
from the British Retail Consortium
yesterday showing a slowdown in
We had a strong beginning to the
new financial year but that was up
against very hot weather last year
when retailers found it more difficult
to shift its autumn ranges, he said.
Primark has been one of the best
performers on the high street and has
been aggressively expanding, adding
three stores in UK and 16 in Europe in
the period bringing its estate to 242.
Primarks performance, together
with a 25 per cent jump in revenues
at ABFs sugar division helped the
group deliver pre-tax profits of 974m
on revenues up 11 per cent to 12.3bn.
The company said it did not expect
its sugar division to perform as
strongly in the year ahead, due to
lower EU production, but it would be
more than offset by further growth at
Primark and some recovery in its gro-
cery business, which includes its
Twinings and Ryvita brands.
M&S, led by Marc Bolland said UK like-for-like sales fell by 1.4 per cent in the first half
Marks and Spencer Group PLC
6Nov 31 Oct 1 Nov 2Nov 5Nov
M&S boss fights
back after half
year improves
NEWS CORP revealed a trebling
in profits last night thanks to
growth in its lucrative cable
networks division.
Rupert Murdochs media giant
said its US channels, such as Fox
News, Fox Sports and the FX
Network, saw a 33 per cent year-
on-year increase in operating
income in the third quarter.
This was driven by higher
advertising revenues and extra
income from pay-TV providers
which screen the channels.
The boost offset declines in
News Corps publishing
business which includes the
Murdochs News Corp profits up
threefold thanks to TV channels
Times, the Sun and the Wall
Street Journal as well as book
publisher HarperCollins and in
its Sky Italia broadcasting
News Corps Twentieth-
Century Fox film studio also
improved on last year.
Overall, News Corp posted a
two per cent rise in revenue to
$8.1bn (5bn) and a leap in pre-
tax profit from $786m to $2.3bn.
However, the company booked
a $67m charge for costs relating
to last years closure of the News
of the World.
Results beat expectations,
sending shares up more than two
per cent in after-hours trading.
OUTPUT IN the production industries
dived in September, data showed yester-
day, driven by a collapse in mining and
quarrying, which analysts suggested
might lead to downward GDP revisions.
Manufacturing output rose 0.1 per
cent into October, according to the
Office for National Statistics, but overall
production was dragged down 1.7 per
cent by a 15.3 per cent plunge in
resource extraction output.
This meant production was a full 2.6
per cent lower than a year earlier, while
the small September improvement
could not erase an overall one per cent
decline in the sector over the year.
Analysts said this fall could bring a 0.1
percentage point revision in third quar-
ter GDP growth. There is a distinct pos-
sibility that the third quarter GDP
figures, which initially showed one per
Industry output
dive means GDP
could go down
cent growth, would be revised down
slightly to show a rise of only 0.9 per
cent, said David Kern at the British
Chambers of Commerce.
But forecasts from the National
Institute of Economic and Social
Research out yesterday held that overall,
the economy may continue recovering
in October, with GDP rising 0.5 per cent
over the month.
Pay gap remains as women earn
400,000 less over working life
THE average female executive in
the UK earns 400,000 less than
her male counterpart over a life-
time of work, according to new
data released this morning.
Women in executive roles are
also likely to win bonuses worth
less than half those given to their
male colleagues the average
male bonus came in at 7,496
while women took home an extra
The figures, from the Chartered
Management Institute (CMI) are
based on a woman and man start-
ing executive roles at age 25 and
working an identical route up the
career ladder until retiring aged
Over a 45-year career the discrep-
ancy adds up to a total of 423,390,
with the average gap between
management level salaries coming
in at 10,060.
But despite figures that show
fewer women are currently in
management roles, the CMIs
research implies this could change
in the future, with the percentage
of women in the executive work-
force now standing at 57 per cent
the highest level since records
Level 17, Dashwood House
69 Old Broad Street, London
T l 0207 786 6700
Level 18 Canary Wharf
40 Bank Street, London
T l 0203 059 7945
140 locations worldwide
W l
Your dedicated receptionist
Your prestigious address
Worldwide access to boardrooms,
meeting rooms and business lounges
Hi, Im the
new boy in
began in 1995.
A lot of businesses have been
focused on getting more women
on boards but weve still got a lot
to do on equal pay and equal repre-
sentation in top executive roles,
said Ann Francke, chief executive
of the CMI. Women make up
almost three out of four at the bot-
tom of the ladder but only one out
of four at the top.
The European Commission last
month delayed a decision on
requiring EU company boards to
be made up of at least 40 per cent
women, after facing tough opposi-
tion across the continent.
Production jerks back down after summer improvement
Sep12 May12 Jan12 Sep11 May11 Jan11 Sep10
IndexLevel 2009=100
THE GROWTH of challenger banks
is not a solution to the current
shortage of lending to small firms,
City grandee John Griffith-Jones
said yesterday, arguing that only
unblocking lending from big banks
can help in the short run.
The former KPMG boss and
incoming chairman of the
Financial Conduct Authority also
told MPs that banks must take
more care of customers without
any financial knowledge, that he
wants more change on pay struc-
tures in the financial sector, and
that it is not desirable for cus-
tomers to change their current
accounts too often.
Part of the FCAs role is to boost
competition, which Griffith-Jones
welcomed, but he also noted that
such a goal is a long term one and
cannot address short term prob-
lems in the credit market.
Experience has shown that chal-
lenger banks will have to pedal
extraordinarily fast to make a dif-
ference to credit in two years, as
opposed to releasing more from the
biggest players, Griffith-Jones told
the Treasury Select Committee.
We should do our bit to free up
the authorisations process to what-
ever extent we can, but the real key
to releasing money quickly is with
the banks with 80 per cent of the
market, not the incremental chal-
The incoming FCA chairman also
called for more action to help poor-
ly informed consumers.
A sizeable part of the population
are quite innumerate, and that
asymmetry of information between
the firm and the consumer is quite
worrying, he said.
If the banks treat everyone as
though they cannot add up and put
cotton wool around them, con-
sumer protection will invade.
But if we do nothing, the less
numerate will be disadvantaged. So
banks should try to segment the
marketplace to ensure there are
simple products that are available
to everyone.
Auditors see big problems with
EU budget for 18th year in a row
OFFICIAL auditors yesterday report-
ed major errors in EU spending last
year, amounting to billions of euros
and strengthening the hands of
politicians in the UK who hope to
freeze spending in the budget.
The European Court of Auditors
said it had found irregularities
affecting four per cent of total
spending during 2011, equivalent
to around 5.2bn (4.17bn).
The biggest problems were in
outlays on rural development,
fisheries and health, the court said
in its annual report, which ran to
more than 240 pages.
Most errors came from the
misapplication or
misunderstanding of the EUs
complex rules, the auditor said,
while a handful of cases of
suspected fraud were reported.
With Europes public finances
under severe pressure, there
remains scope to spend EU money
more efficiently and in a better-
targeted manner, court president
Vitor Caldeira said. Member states
must agree on better rules for how
EU money is spent, and member
states and the Commission must
enforce them properly.
The budget for the next seven
years is currently being negotiated,
with governments including the UK
calling for a freeze in spending.
It is risible that the EC wants a
five per cent increase in the budget
yet nearly four percent of spending
is affected by error, said Tory MEP
Martin Callanan.
Before asking for more
taxpayers money, perhaps the
commission should prioritise better
spending of the money it already
to former directors yesterday to
ask for some of their pensions
back, after mounting public
anger at the scale of payouts at
the bailed-out bank.
The institution collapsed in the
financial crisis, leading to a
bailout in 2009 and
nationalisation in 2010 part of
a wave of bailouts that led to the
government running out of cash
and the state needing a bailout
from the Eurozone and
International Monetary Fund.
Since then the government has
implemented tough fiscal
programmes and gradually
brought its devastated finances
back on track.
Allied Irish asks bosses who led
to ruin to give back pensions
BY TIM WALLACE Last week the bank revealed it
had transferred 1.1bn (882m)
of loans to its pension fund,
reviving concerns over its
ongoing payments to former
senior staff.
Current chief executive David
Duffy is arguing it would be fair
if the 15 former directors gave
the money back.
On a moral basis we believe
that there is a judgment that
some individuals can make a
contribution, he told the
Financial Times.
Former chief executive Eugene
Sheehy reportedly receives a
pension of 500,000 per year,
while ex-managing director Colm
Doherty is set to receive 300,000
when he reaches the retirement
Former KPMG boss John Griffith-Jones also called for improved financial education
MPs told new
banks are not
short-term fix
J SAINSBURY, Britains third-biggest
supermarket group, has lifted its
market share, helped by investment
in its cheaper own-brand products,
industry data showed yesterday.
Market researcher Kantar
Worldpanel said Sainsburys sales
rose 6.4 per cent in the 12 weeks to
28 October, increasing its share of
the UK grocery market to 16.8 per
cent from 16.4 per cent a year ago, as
the group also continued to benefit
from its sponsorship of the sum-
mers Paralympic Games.
Britains fourth biggest grocer Wm
Morrison Supermarkets saw sales
slip 0.4 per cent in the period, push-
ing its market share down to 11.5 per
cent from 12 per cent a year ago.
In September, Morrison said it
would ease back on its investment
drive, reducing its new space target
for the 2012-13 year due to expecta-
tions that high fuel prices and gov-
ernment austerity measures were
likely to weigh on consumer spend-
ing well into next year.
Morrisons performance this
month will cause concern. Recent
announcements about the develop-
ment of online and convenience ...
will no doubt be given added urgency
as these channels continue to deliver
growth for competitors, said Edward
Garner, at Kantar Worldpanel.
Kantar said market leader Tesco
achieved sales growth of 2.1 per cent
over the 12 weeks, with its share
falling 0.5 percentage points to 30.5
per cent. Britains second-largest
supermarket group Asda, part of Wal-
Mart Stores, saw its market share
edge down 0.1 percentage point to
17.5 per cent. German discount retail-
er, Aldi, saw sales rise 29 per cent in
the period, pushing its market share
up to three per cent.
For purchase until midnight 15 November 2012. Fares include all taxes and charges. Fares correct as of 5 November 2012 and for travel between 17 December 2012 - 24 March 2013 with the exception of Brive, Deauville, Pau, Nantes and Florence, travel between
7 January 2013 - 24 March 2013. Available on selected ights only, limited availability, terms and conditions apply. For full terms and conditions, visit
London City Airport to:
Germany 99
Holland 109
Belgium 109
France 109
Luxembourg 109
Italy 119
Scotland 129
Book at
CONSERVATIVE MP Nadine Dorries, who represents Mid-Bedfordshire, was yesterday
suspended by her party after it emerged she had agreed to take part in ITV1's reality
show I'm a Celebrity... Get Me Out of Here. Dorries has flown to Australia and could be
absent from the House of Commons and her constituents for a month.
Sainsburys ups
market share as
Morrisons lags
LONDON & STAMFORD, the property
firm run by industry veterans
Patrick Vaughan and Raymond
Mould, is to merge with retail
landlord Metric Property
The pair yesterday said talks were
in advanced discussions which, if
successful, will lead to London &
Stamfords shareholders owning a 75
per cent share of the enlarged
company and Metric taking the
remaining 25 per cent.
Vaughan, London & Stamfords
chief executive, would become
executive chairman while Metrics
boss Andrew Jones is set to become
chief executive of the new group.
Mould is to retire as chairman.
Analysts said the merger would
solve succession queries over Moulds
retirement and bring together
London & Stamfords office-based
portfolio with Metrics retail assets.
London &
Stamford in
merger talks
THE OWNER of the New York Stock
Exchange yesterday announced
that net income fell by 42 per cent
to $108m (67.6m) in the third
quarter, despite continued efforts
to cut costs.
NYSE Euronext has been hit by
substantial declines in derivatives
activity in its key New York, London
and Paris markets.
Equity trading volume in New
York dropped by 39 per cent to
1.6bn shares a day in the three
months between July and
September. European business
slipped by a third to a daily average
of 1.3m transactions.
Chief executive Duncan L
Niederauer said the firm contin-
ued to deliver on our multi-year
growth commitments and was on-
track to drive a step-up in the
underlying earnings power of the
company in the coming years, even
if trading volumes remain lacklus-
In common with the rival London
Stock Exchange, NYSE Euronext is
investing heavily in ancillary post-
NYSE Euronext
profits fall amid
trading slump
trade services.
Clearing houses are particularly
attractive for exchanges as rule
changes are forcing more deriva-
tives to be traded on electronic plat-
forms and make greater use of the
In the meantime NYSE Euronext
was able to announce that it has
taken $82m out of its expense base
so far in 2012, beating its target of
$62.5m. Overall the company hopes
to cut costs of $250m by 2014.
Net revenue fell by a fifth to
$559m for the third quarter, while
net debt increased to $2.1bn.
Shares in the firm closed down 4.6
per cent at 18.80 in Paris.
NYSE Euronext
6Nov 31 Oct 1 Nov 2Nov 5Nov
$ 24.27
Metric Property Investments PLC
6Nov 31 Oct 1 Nov 2Nov 5Nov
MUKHTAR Ablyazov, a fugitive
oligarch accused of embezzling
more than $5bn (3.1bn), was
labelled devious and cynical by
judges yesterday as his former
Kazakh bank BTA prepared to
pounce on his assets.
On the eve of his fraud trial, the
Court of Appeal threw out
Ablyazovs attempts in absentia to
overturn a 22-month jail sentence
and a ruling barring him from
defending himself unless he turns
himself in and discloses his assets.
The trial of Ablyazov, a former
Kazakh minister who has vanished
BTA poised to seize oligarchs
assets after appeal thrown out
BY CITY A.M. REPORTER since the jail sentence was
announced in February, is due to
kick off today. It is scheduled to
last around 14 weeks.
Ablyazov has told his legal team
he will neither attend the trial and
risk arrest nor defend his case. His
former bank BTA, meanwhile, will
prepare to seize his assets.
In a series of lawsuits BTA
declared insolvent and
nationalised in 2009 has brought
nine separate fraud cases against
its former chairman and his allies.
BTA accuses Ablyazov of
bleeding dry what was once one of
the countrys largest banks with a
series of fraudulent loans.
Secret State
New thriller starts tonight 10pm
Sponsored by
The trial of Mukhtar Ablyazov is due to start this morning
ADECCO, the worlds biggest
staffing group, said yesterday it
expects no improvement in Europes
job markets until late next year
because businesses are reluctant to
hire due to uncertainty about the
Eurozone debt crisis.
It is going to be very slow in
Europe into the beginning of next
year and if something improves it is
going to be in the second half but
not before that, chief executive
Patrick De Maeseneire said.
Adecco, which reported solid
third quarter results yesterday, said
revenue declines in the hardest-hit
regions of Italy and Spain seemed to
be stabilising, suggesting employers
had already cut to the bone.
The fact that revenues are not
dropping off like they were in 2009
means that there are a lot of
companies that are really stretched
to the minimum, De Maeseneire
Adeccos third-quarter revenues
fell five per cent organically to
5.28bn (3.3bn), compared to a four
per cent fall in the second quarter.
The company said it saw a further
slowdown in sales at the start of the
fourth quarter.
In Europe, Adeccos revenues fell
an average of eight per cent in the
quarter, the same decline as in the
second quarter. The companys
quarterly net profit fell 18 per cent
to 118m.
Adecco predicts
little relief for
EU jobseekers
SECURITY group G4S yesterday said
trading was upbeat as its core UK
market showed an improved per-
formance, in spite of the bungled
Olympics contract that cost the firm
Revenue grew 6.3 per cent over the
nine months to September, while
growth in developing markets hit
nine per cent over the first nine
months of 2012, and four per cent in
developed markets.
Its secure solutions division, which
provides security to public and pri-
vate companies, grew six per cent
over the period, flattered by strong
performance in developing markets,
UK government and US commercial
businesses. G4S said it sustained an
11 per cent drop in US government
work over the period.
The worlds largest security group
said that it expected the US govern-
ment and European markets to
remain challenging, although the
developing markets business which
accounts for more than a third of
profits would continue to perform
Upbeat trading
at G4S despite
Olympic fiasco
G4S, which was heavily criticised for
failing to deliver on its Olympic con-
tract earlier this year, has been
rocked by the fiasco that caused sev-
eral heads to roll.
Fears have also been raised that
future contracts with the govern-
ment its biggest client, contributing
half of G4Ss British revenue may
also be jeopardised.
The government is due to award a
string of contracts to run UK prisons
in the coming weeks. A successful
G4S bid would highlight that the gov-
ernment is willing to work with the
security firm going forward.
Shares closed up 3.53 per cent yes-
terday at 270p.
6Nov 31 Oct 1 Nov 2Nov 5Nov
p 270.00
As management guided at the interims, third quarter organic sales
growth has accelerated. Notwithstanding the challenging economic backdrop,
which is having a negative impact on developed markets, we forecast
organic sales growth of six per cent between 2012 and 2014.

An in-line trading statement that highlights the pricing pressures in the

more mature European business, offset by growth in the developing markets,
and a good performance in US commercial. The imminent UK prisons
decision could provide a key catalyst for the shares.

Overall this is a decent set of numbers. However, we remain concerned

that UK government contract awards may slow in the wake of the Olympics
debacle although we acknowledge the government is unlikely to exclude
G4S altogether given its size.


TRADING STATEMENT? Interviews by Cathy Adams



Chief executive Nick Buckles kept his job in the wake of the failed Olympic contract
PROFIT at defence services equip-
ment maker Babcock jumped 13 per
cent in the six months to September,
as it benefited from governments
outsourcing work to private firms.
Pre-tax profit for the entire group
came in at 142.7m over the six
months, up from 126.3m over the
same period last year.
The FTSE 100 companys revenue
edged up six per cent to 1.55bn,
pushed up by the support services
division, which delivered organic
growth of 18 per cent as contracts
awarded last year became opera-
The division, which maintains
British navy submarines and
Metropolitan Police vehicles, has
been flattered by the ongoing con-
straints on government budgets.
The order book for Babcock jumped
four per cent to 12.5bn, up 500m
from the same period last year, while
the bid pipeline soared to more than
13bn during the six months, up
from 9bn a year ago.
Group chief executive Peter Rogers
said yesterday: The changing mar-
Babcock boost
from austerity
as profit jumps
ket environment in which we operate
and the trend to outsource activities
to achieve both financial and opera-
tional efficiency is reflected in the
strength of our bid pipeline as well as
the further significant opportunities
we are tracking.
Robin Speakman, support services
analyst at Shore Capital, yesterday
hailed the results as an all-round
good performance.
Conditions for the second half to
March 2013 appear promising to us
and, with a number of projects due to
commence in coming months, we
still hold out the prospect of forecast
upgrades in due course, he said.
Costain on track for targets
n Engineering solutions firm Costain
yesterday said it was on track to meet its
full-year targets, despite challenging
economic conditions. Around 28 per
cent of 2012 revenues are from support
services, and this is expected to grow.
The forward order book currently stands
at 2.4bn for the group, with around
1.6bn in revenues secured for 2014 and
beyond. Since 1 July, Costain has won
several contracts, including a high-
profile project worth 288m by Magnox
to decommission the UKs nuclear sites.
Terry Price to retire from Tesco
n Tesco is set to lose yet another to
another of its senior executives, as it
confirmed yesterday that its head of
non-food Terry Price, is leaving after 18
months in the role.The supermarket
group said Price, who returned to the
UKfrom Tescos China division to take
up the role, is due to retire but said the
date of his departure was yet to be
confirmed. Neela Mukherjee, a Tesco
Direct executive, will now take control of
online and offline general merchandise
across the division as the group.
Hodge calls for better use of data
n Labour MP Margaret Hodge, chair of
the Public Accounts Committee, said
yesterday that the state remains too
secretive when it comes to official data.
Speaking at a roundtable organised by
IT firm IMC, she told City A.M. that while
she was extremely cynical about
large government IT projects, she was
certain that proper use of good data
can help us get more for less. She also
said that the reason an appraisal of
major projects was delayed is because
Universal Credit has got a big red on it.
Babcock International Group PLC
6Nov 31 Oct 1 Nov 2Nov 5Nov
Forget past performances its
new contracts that matter now
ESTERDAY, shares in support
services firms G4S and Babcock
went on two rather different
journeys. G4S rose almost four
per cent after shaking off Olympic
embarrassments and growing
revenues excluding acquisitions by
5.5 per cent, while Babcock slumped
by the same amount despite a 13 per
cent rise in profits.
But look a little closer and the fig-
ures tell a different story. Since this
time last year G4Ss share price is up
just 7.8 per cent, marginally outper-
forming the FTSE 100 over the same
period. Babcock is up 37 per cent.
The firms may have distinct operat-
ing areas Babcock focuses on engi-
neering support while G4S is a
security specialist but ultimately
each relies on its bid pipeline to give
investors visibility on future perform-
G4S, hardly the governments dar-
ling at the moment despite the state
accounting for 13 per cent of revenues,
is hanging out for imminent news of
prison privatisation tenders. The firm
is bidding on contracts that could be
worth up to 2bn, but after the
Olympic disappointment a win is
unlikely to be priced in.
Babcock, in the meantime, is benefit-
ting from an outsourcing boom as
state budgets are cut, and expects
orders to keep flowing in from key
defence markets including Canada,
Australia, Brazil and the Middle East.
Yesterdays promise that it is secur-
ing preferred bidder statuses will help,
but investors have come to expect so
much that theyll be waiting for con-
tracts to be signed before buying into
the firms 13bn pipeline.
While G4Ss outlook is more uncer-
tain, theres no reason to suspect
Babcock will stop impressing.
LONDON could gain a new stock
exchange after BATS Chi-X Europe
applied to become a fully-fledged
stock exchange, a source close to the
firm said yesterday.
The Financial Services Authority
could take between six months and
a year to process the companys
application to become a Registered
Investment Exchange.
Once completed it would allow
the company currently classed as
a Multilateral Trading Facility to
conduct IPOs on its own platform,
although this is not thought to be
the firms primary objective.
Instead it hopes to target business
from clients who will only trade on
regulated exchanges.
At the moment BATS Chi-X
Europe controls around a quarter of
pan-European trading, offering a
low-cost alternative to the
continents major exchanges.
BATS Chi-X Europe appears to be
competing with its own business
but this seems like a natural
progression for the company to
further legitimise its business, said
Peter Lenardos, an analyst at RBC
Capital Markets.
We expect this announcement
to have little impact on London
Stock Exchanges market share.
applies to be
stock exchange
GERMAN reinsurer Hannover Re said
yesterday that it expects to post a sub-
stantial rise in profits this year,
despite the possibility of payouts fol-
lowing Hurricane Sandy.
The company, which offers second-
ary cover for some of the worlds
biggest insurers, predicted that net
profit for 2012 will pass 800m
(641m). This represents increase of a
third on last year and is well above
analysts expectations.
Hannover Res optimism is borne
out by yesterdays announcement
that income jumped 63 per cent to
265.5m in the third quarter.
The group net income reported for
the first nine months puts in place a
good platform for achieving a very
pleasing result for the full 2012 finan-
cial year, said chief executive Ulrich
A large part of the improvement can
be attributed to an increase in gross
premiums, which were up 13.6 per
cent in the first nine months of 2012.
Hannover Re
unconcerned by
Sandy payouts
Although it is too early to give an
estimate for damage claims from
Hurricane Sandy, Hannover Re said it
expected to be able to absorb any loss-
es, including those from business
interruption claims, within its project-
ed budget for the year. The firm has
used up only 193m in the first nine
months of the 560m it had pencilled
in for big damage claims in 2012.
Tom Carstairs, an analyst at
Berenberg bank, reiterated his buy
rating with a target price of 56.50.
Yesterday the shares closed up 4.5 per
cent in Frankfurt at 55.90.
Hedge funds forced to reveal
most shorted stocks by FSA
HEDGE funds have had their short
selling activities made public for the
first time, as regulations enacted
this week expose some of the
massive bets made by firms involved
in the secretive industry.
The Financial Services Authority
will now force all funds to declare
any short position that represents
more than 0.5 per cent of a target
companys total share capital. The
data is collected every 24 hours and
published on a daily basis.
In a short sale, traders borrow
shares in the hope that share prices
will fall, enabling them to buy them
back at a lower price and profit from
the difference.
Yesterdays release showed
BlackRock, the worlds biggest hedge
fund, dominating the top 10 biggest
short positions with bets against
firms such as Ocado and Mears.
But Maverick Capital tops the
table after taking a substantial
position on Home Retail Group, the
parent company of Argos and
Homebase stores.
The data also reveals that
Greenlight Capital, run by legendary
fund manager David Einhorn, has
borrowed against almost 1-in-20 of
the shares in publisher Daily Mail &
General Trust.
Hannover Rueckversicherung AG
6Nov 31 Oct 1 Nov 2Nov 5Nov

SWISS RE yesterday announced
that it has completed a pioneering
$200m (125m) bond that provides
cover for both North American
hurricanes and extreme mortality
events in the UK.
This is the first time that storm
and mortality cover have been
combined into the same issue.
Dual-risk bonds provide greater
diversification for investors, with
cover provided separately for both
The extreme mortality element
Swiss Re issues bond to guard
against US hurricane damages
covers the threat of mass deaths in
Britain following a natural disaster
or pandemic, such as a deadly flu
The notes will run until the end
of 2016, giving Swiss Re five years
of protection for the life risk and
four years for the non-life risk.
Martin Bisping, of Swiss Re said:
The combination of hurricane and
mortality risk is a significant
innovation. This has provided Swiss
Re with an efficient way of bringing
risks to the capital markets, in a
new combination that we believe is
attractive to investors.
Swiss Res bond will cover against losses from US major storms, such as Hurricane Sandy
Rank 2012 Fund Company shorted Net short position
1 Maverick Capital Home Retail Group 4.45%
2 Greenlight Capital Daily Mail & General Trust 4.43%
BlackRock Mears 2.91%
BlackRock XP Power 2.75%
BlackRock Ocado 2.59%
BlackRock Carpetright 2.57%
Henderson Global Investors Marstons 2.20%
BlackRock Costain 2.18%
BlackRock T Clarke 1.92%
BlackRock Volex 1.90%
THE EUROZONE came in for even
more pain in October, according to
a prominent business survey out
But it was Germany that dragged
the bloc down this month out-
weighing slight improvements in
Italian, French and Spanish
indices. The composite Eurozone
purchasing managers index (PMI)
sagged to 45.7 in October, Markit
said yesterday, from 46.1 in
September, and slightly under the
early estimate of 45.8.
Though all were still contracting
faster than Germany, the pace of
decline slowed in Italy, France and
Spain. Italy hit a seven-month high
of 45.6 on the index, France edged
its index up from 43.2 to 43.5, and
Spains index inched up to 41.5
but all are well below the crucial
no-change value of 50.
But it was the big drop in the
German index, from 49.2 in
September to 47.7 in October, that
Output in the
Eurozone drops
even further
dragged the overall index down.
Signs that the contraction in
Germany gathered pace are particu-
larly disappointing, said Markits
Rob Dobson, given the important
role a strong performing Germany
could play in stimulating growth
elsewhere in the currency zone.
Sentiment is still being hit hard
as companies worry about the
impact of weak domestic demand
and a slowing global economy, he
added. The only positive nugget was
Ireland, which hit a 20-month high
of 55.5 on the index.
Output in the Eurozone slides even further in October
1999 2003 2007 2012
65 50=nochange
PMI OutputIndex
Oh Dorothy, hold me as
tight as a Capital Spread.
Take a better position Spread Betting | CFDs
Capital Spreads is a trading name of London Capital Group Ltd (LCG), which is authorised and regulated by the
Financial Services Authority and a member of the London Stock Exchange.
Spread betting carries a high level of risk to your capital and can result
in losses that exceed your initial deposit.
The tightness of our spreads is legendary.
Hollande slashes payroll taxes
to give competitiveness boost
FRENCH President Francois
Hollande yesterday announced a
raft of tax cuts as part of a battle
plan attempting to improve French
competitiveness, but analysts said
the moves didnt go far enough to
reform labour markets.
The effective U-turn comes after
a report from former EADS boss
Louis Gallois, and a separate report
from the International Monetary
Fund, urged Hollande and his
socialist government to work to
boost competitiveness.
Gallois called for a 30bn (24bn)
cut to payroll taxes so-called taxes
on jobs benefiting both employers
and employees. Hollande
took 20bn of these cuts
on board, all going to
employers, and spread out
across 2013-2015,
balanced by a hike in VAT
and 10bn of extra
But Christian
Schulz and
Schmieding at
Berenberg said
the measures do not come
anywhere close to what France
would need to arrest its trend
decline. They hail the cuts to
payroll taxes as a proven recipe to
improve competitiveness but say
its only a very modest start.
Germany did not turn around
its economy my reducing labour
costs, but by injecting a new
degree of flexibility in the
labour market.
President Hollande has
changed tack on policy
SPAIN will not ask for a bailout
until it knows how much it would
bring down the governments
borrowing costs, Prime Minister
Mariano Rajoy said yesterday.
He told a Madrid radio station
that the conditions of the bailout
will be important, but so will the
impact on bond yields.
Currently the governments 10-
year borrowing costs stand at 5.66
per cent, well above that of
Eurozone safe haven Germany
whose yields are just 1.439 per
If Rajoy does request a bailout,
he will meet the conditions for
the European Central Bank to
start buying the governments
bonds under its new outright
Rajoy delays bailout request
until interest impact is clearer
BY TIM WALLACE monetary transactions (OMT)
Meanwhile Spanish newspaper
El Pais revealed the European
Commission will today slash
Spains economic growth
forecast, predicting a 1.5 per cent
recession, barely better than this
years 1.6 per cent contraction.
That represents a much sharper
drop than the 0.5 per cent
officially forecast by the Spanish
government, and will dent the
Prime Ministers hopes of
returning to growth in 2014.
The newspaper also said the
forecasts show Spains budget
deficit remaining high, coming in
at 5.8 per cent in 2014, again
above the governments target of
2.8 per cent and exceeding the
Eurozone target of three per cent.
HUNDREDS of thousands of Greeks went on strike yesterday in protest at new spending
cuts due to go to parliament today. The package will cut 25 per cent from pensions,
and must be passed if the government is to get more bailout cash to avoid going bust.
said it is seeking new bids for its
$300m (187m) Barclay Hotel in
Manhattan after exclusive talks with
a prospective buyer, believed to be
Qatari hotel owner Ghanim Bin Saad
Al Saad, came to a halt.
We are still talking to the original
interested party but we have decided
not to do that on an exclusive basis,
as talks were taking longer than
expected, chief financial officer
Tom Singer said.
His comments came as the owner of
the Crowne Plaza, Holiday Inn and
InterContinental brands posted an
operating profit of $167m in the
quarter to 30 September, $3m ahead
of consensus forecasts and up from
$153m a year ago.
Revenue per available room (RevPar)
rose 3.9 per cent in the quarter and
4.8 per cent in October, led by a
bounce-back in the Americas of 6.1
per cent.
The Olympics helped drive growth
of two per cent in the UK in the quar-
IHG seeks new
bidders for its
New York hotel
Singer said it was too early to say
what impact hurricane Sandy has had
on business along the East Coast of
the US but added that typically hotels
tend to be full as people seek refuge.
RevPar in Greater China slowed
from six per cent in August to 0.9 per
cent in September and 0.3 per cent in
October due to a territorial dispute
over Japans ownership of the
Senkaku islands, known as Diaoyu in
China, prompting a reduction in the
number of Japanese visitors, particu-
larly to Hong Kong.
Singer added that growth would
also be impacted for some months by
the leadership changes within
Chinas ruling Communist Party.
SHOP price inflation climbed in October, the British
Retail Consortium (BRC) revealed yesterday, as food
prices boomed.
Shop prices rose 1.5 per cent in the year to October,
the data showed, up from the one per cent growth in
the year to September. This increase was driven by a
four per cent climb in food prices compared to the
3.1 per cent yearly food price inflation seen in
September. But the overall increase was also driven by
a let-up in non-food deflation. Many clothing stores
had been competing with offers and discounts, but
this appears to be filtering out non-food prices were
completely flat over the year, whereas they had gone
down 0.2 per cent in the year to September.
BRC sees retail sales dip
ahead of Christmas as
food price inflation rises
THE DOWNWARD correction to
house prices gathered pace in
October, according to data out
yesterday, while one estate agent
today predicted prices would not
reach their pre-recession peak until
The UKs average house price slid
0.7 per cent into October, according
to the Halifax house price index,
meaning prices are some 1.7 per
cent lower than a year earlier.
This makes October the fourth
consecutive month of monthly
decline, a slide which Halifax puts
down to a weak overall economy.
And the market may not fully
recover until 2019, Knight Frank
said this morning, with average
Knight Frank says house prices
may not return to peak till 2019
prices falling two per cent across
2012 and still sliding through 2013.
Even prime central London so
far performing strongly despite
recession will register no growth
during 2013, Knight Frank predicts,
due to tax changes.
The demand for luxury London
homes from overseas buyers...has
helped drive price increases, said
Liam Bailey at Knight Frank, this
growth might have continued into
next year...but government policy is
set to...impact on the market next
year. In March, George Osborne
raised the stamp duty charge for
purchases of homes worth more
than 2m to seven per cent, up
from five per cent, Liam Bailey
said, noting that sales up to 2m
have already fallen a quarter.
InterContinental is still looking for a buyer for the New York Barclay
InterContinental Hotels Group PLC
6Nov 31 Oct 1 Nov 2Nov 5Nov
NEW CAR registrations defied
European gloom to soar upwards in
October, data showed yesterday,
adding to the picture of strength in
the 2012 UK market.
Consumers registered some
151,252 cars in October, an automo-
bile industry body said, up 12.1 per
cent on that month in 2011. This
latest rise means total sales so far in
2012 are 1,771,861, five per cent or
83,823 up on the same ten
months of 2011.
Despite uncertainty in the
European economy the UK new car
market continues to grow, said
Paul Everitt at the Society of Motor
Manufacturers and Traders (SMMT),
which compiled the data.
The rise was even more impressive
in private sales, which exploded
23.9 per cent compared to the previ-
ous October whereas fleet sales
climbed 4.5 per cent and business
sales fell 3.3 per cent to total just
Alternatively fuelled vehicles
enjoyed a dramatic rise, shooting
up 38.8 per cent over the year to hit
an all-time high defying the green
car sales slump of approximately 16
per cent seen since the pre-reces-
Car sales rocket
up in booming
October market
sion peak.
But Howard Archer at IHS Global
Insight forecast much more diffi-
cult times for the motor industry.
There are still significant pressures
facing consumers, which threaten
to limit the upside for confidence
and spending for the time being,
Archer warned.
He said the car industry might be
hit by fleets delaying replacements
as they work through difficult eco-
nomic conditions.
But SMMT revised its full year fore-
casts up on the better-than-expected
figures, predicting total sales of
2.013m for 2012, up from its July
estimate of 1.97m. And it believes
sales will keep relatively steady into
2013, edging up to 2.015m.
Fords Fiesta continued to domi-
nate through the month, selling
8,058 units, to bring its total for the
year up to 96,805. This was followed,
as in the year-to-date rankings, by
the Vauxhall Corsa and the Ford
Volkswagens Golf places fourth,
ahead of the Vauxhall Astra in fifth,
the Nissan Qashqai in sixth, and the
BMW 3 Series in seventh. The
Volkswagen Polo, the Mercedes C-
Class and the Fiat 500 make up the
rest of the years top 10 so far.
THE LAST YEAR? Interviews by Ben Southwood
Yes I did buy a car but it was a used vehicle,
so it wouldn't have affected the gures.
These views are those of the individuals above andnot necessarily those of their company

No, I don't need a car to get around as I live in

London I can just use the trains. The public
transport in the city is relatively good.
No, I don't drive, in fact I try and stay as far
away from cars and driving as possible. Not to
mention the cost of insurance, fuel, and depreciation.

Eric Pickles wants to double the proportion of funds that can be allocated to infrastructure
Plan to let state pension funds
pump more into infrastructure
TENS OF BILLIONS of pounds in
workers savings could be invested in
infrastructure projects under new
proposals announced yesterday by
communities minister Eric Pickles.
Businesses and the pensions
industry welcomed the move,
arguing that freeing up the funds
investment opportunities should
boost the economy in the long run.
Current rules limit the amount
the local government pension
funds can invest in infrastructure
BY TIM WALLACE projects to 15 per cent of their
150bn in assets.
The new proposal would see the
ceiling lifted to 30 per cent.
Unlocking Town Hall pension
pots so they can be used to invest in
vital infrastructure projects is a
common sense decision that will
help this country complete on a
global scale and get Britain
building, said Pickles.
By lifting the restrictions
controlling local pension
investments councils could pump a
further 22bn directly into job
creating infrastructure projects that
will boost our economy.
The Confederation of British
Industry welcomed the plans.
Infrastructure projects should be
a natural fit for these funds, which
have very long time-horizons and
are looking for a healthy investment
return, said director Rhian Kelly.
But we cannot afford to rest on
our laurels. More must be done to
ensure we deliver a pipeline of
investable projects and ensure
projects of national economic
significance are given support.
ROYAL London Group, the biggest
mutual life and pensions group in
the UK, yesterday revealed flat new
business growth for the year, with
slower inflows for its fund man-
agers offset by increased business
for its pension and protection
The company, comprised of eight
separate business, said total new
life and pensions business flatlined
at 2.6bn for the nine months up
until the end of September, com-
pared to the same period in 2011.
Royal London Asset
Management, its
fund management
business, posted a
28 per cent fall in
net new inflows,
down to 156.8m
compared to the
same figure last
year. The figure
is a 76 per cent
plunge from its
2010 inflow of
However, the
Royal London
balances out
mixed results
firm said RLAM had experienced
strong inflows over the summer,
hinting at a turnaround.
Ascentric, its administration serv-
ice, saw an 18 per cent drop in net
new business in 2012 down to
856.7m, wiping out a 20 per cent
rise in new business posted last
The firm blamed the forthcoming
Retail Distribution Review, coming
into force in January, for dampen-
ing growth in the platform market.
The company, founded in 1861,
saw more new business in its life
and pension businesses, with its
protection firms Bright Grey,
Scottish Provident, and Caledonian
Life all reporting increases.
Chief executive Phil Loney said:
Our protection businesses in the
UK and Ireland have experienced
strong growth.
Its pension business Scottish Life
saw a two per cent drop in new
business and its offshore busi-
ness Royal London 360 post-
ed a 12 per cent annual fall
in new business.
Phil Loney saw varying
business performances
Advisers on track to be RDR-ready
n A majority of financial advisers are
now compliant with the forthcoming
Retail Distribution Review regulations
coming into force in January, a survey
out yesterday said. Insurer Aviva found
two-thirds of advisers had already
achieved qualifications to make them
RDR compliant. A further 46 per cent
said that they would also obtain
qualifications beyond statutory
requirements. Intermediary director at
Aviva, Andy Beswick, said: It is really
positive to see advisers going beyond
the minimal requirements for RDR and
raising the bar for industry standards.
The survey polled 270 advisers and
found that remaining profitable was
the key concern among advisers over
First Derivatives revenue boost
n Capital markets software provider
First Derivatives yesterday posted a
23.3 per cent increase in revenues and
9.8 per cent increase in pre-tax profits
after a bumper half year of contract
wins. The Aim listed company, which
also offers consulting services,
increased turnover to 27.6m on the
back of a 40 per cent increase in
recurring revenue streams from its
software sales. First Derivatives
chairman David Anderson said: To fuel
this growth we have continued to make
substantial investment in the
development of all the groups activities
to ensure we have a strong organisation
that can react to the market through the
quality of our product and service
OWARDS the end of last year I
discussed in this column how
2011 had seen Tescos brand
perception scores fall
throughout the year.
As we would expect to see,
perceptions proceeded sales.
Tescos January announcement
that its sales had dropped led to a
sell-off that knocked around 100p
from Tescos share price.
This is a shock from which the
supermarket has yet to recover,
with the stock closing yesterday at
327p, compared to highs of 405p a
year ago.
With Tescos Christmas 2012
advertising campaign launching
last week, Ive taken a look at
YouGovs BrandIndex to see how
Britains biggest supermarket has
performed in the publics eyes over
the course of this year, and what it
will need its campaign to achieve.
The steady decline throughout
2011 in Tescos Index score (a
composite of six key image
measures) continued in the early
months of 2012.
The +32 score of January 2011
had become +15 by May 2012, and
Tesco fell from second top to last
place among Britains big
In some sense things have
improved since then, with signs
that the decline has halted, but the
recovery has yet to begin. The
downward line has become a
straight one, but Tesco remains in
last place.
Value was the key attribute that
Tesco previously owned, but its
edge has diminished.
At the start of 2011 Asda
overtook Tesco to claim top spot for
best value, and by early 2012
Tescos line had crossed all of its
big rivals to leave it in the bottom
spot with a Value score of +16
(down from +40).
The Value score typically moves
around more than overall Index
as it reacts to campaigns and
promotions, but we can discern a
slight trend upwards with the
latest score at +21.
Tesco has managed to stop the
bleeding, but needs to do much
more to regain lost ground. It will
look to its Christmas campaign to
start the rebuilding process and we
will be watching closely in 2013.
Stephan Shakespeare is the chief
executive of YouGov
Nov12 Jul 12 Mar12 Nov11 Jul 11 Mar11
Tesco Sainsbury
Asda Morrisons
Tesco Sainsbury
Asda Morrisons
Nov12 Jul 12 Mar12 Nov11 Jul 11 Mar11
Tesco set for a Christmas tussle to win back customers
INVESTORS are losing out because
firms and banks attempt to hide
the true level of debts in off-
balance sheet instruments, the
head of the International
Accounting Standards Board
(IASB) claimed yesterday.
Hans Hoogervorst argued that
vested interests are opposing his
move to push leasing
arrangements on balance sheet, as
it would present a less healthy
picture of firms with such
The vast majority of lease
contracts are not recorded on the
balance sheet, even though they
usually contain a heavy element
of financing. For many companies,
such as airlines and railway
companies, the off balance sheet
financing numbers can be quite
substantial, he told an audience
at the London School of
If this financing were in the
form of a loan to purchase an
asset, then it would be recorded.
Call it a lease and miraculously it
does not show up in your books.
Unless the change is made
analysts and investors will have to
continue to guess the true extent
of companies leverage, rather
than basing their decisions on the
facts about the business
operations, he said.
Accounts boss
accuses firms
of hiding debt
COMMERZBANK yesterday won the
right to challenge the bonus awards
of over 100 staff who were formerly
at failed bank Dresdner Kleinwort.
The 104 investment bankers claim
they are entitled to their full bonus
totalling 52m (41.7m) thanks to a
verbal guarantee from senior man-
agers in 2008.
But when Commerzbank took over
Dresdner it too came under strain,
cutting bonuses across the group by
90 per cent including those of the
Dresdner staff.
The 104 won their claim earlier this
year, but the bonus has not yet been
paid out and Commerzbank has suc-
cessfully won the right to challenge
the award.
Commerzbank welcomes the deci-
sion of the Court of Appeal to consid-
er our appeal. We view it as an
encouraging sign that we will be able
to defend our position,
Commerzbank said in a statement.
It is the banks contention that as
a matter of law, no binding contrac-
tual commitment was made, that
bonus amounts communicated were
wins chance to
fight bonuses
provisional and that it was reason-
able and responsible to reduce the
bonuses in the light of the 6.5bn loss
that Dresdners investment banking
operation posted for 2008.
The case is one of several around
the world that contest a total of more
than 400m, and could have wider
implications for other banks.
Irrespective of whether
Commerzbank ultimately wins or
loses, the clear message for City firms
is that they need to be very careful say-
ing one thing about bonuses in a team
meeting, then changing their mind
later when it comes to putting things
in writing or paying the bonuses, said
Paul Quain from GQ Employment Law.
Commerzbank AG
6Nov 31 Oct 1 Nov 2Nov 5Nov
INCOMING rules on banks capital
and liquidity levels are still not
enough to make the financial
system secure, a top regulator
behind the Basel III rules warned
Basel III is necessary, and banks
are reasonably well positioned to
meet the new capital requirements
but it is not sufficient, said
Wayne Byres, secretary general of
the Basel Committee on Banking
Supervision, arguing more rules
are needed on liquidity ratios,
trading book controls,
securitisation and the large
Top regulators say new Basel III
regulations are not yet enough
BY TIM WALLACE exposure regime.
He said the committee needs to
make sure the rules are all properly
implemented and supervised if
they are to work as planned.
But he added that there are
several areas the Committee needs
to study further to come up with
further regulations.
We have embarked on a
fundamental review of the trading
book rules, given that activity in
this area was a major source of the
problems that led to the financial
crisis, he said. We expect to issue
more detailed proposals, and
undertake an impact study, during
Wayne Byres called for more controls on banks trading book activities and securitisation
IF New York is the City That Never
Sleeps, perhaps London ought to be
referred to as the City That Elected Not
To Party last night.
The Capitalist was extremely disap-
pointed at the lack of US election all-
nighters held in the City, particularly
from the likes of Bank of America
Merrill Lynch and Morgan Stanley
who have numerous colleagues in the
US but had no plans to celebrate last
While the big City firms appeared to
shun lavish mid-week drinks parties,
The Capitalist did manage to find one
official bash, hosted by the US
Embassy in Grosvenor Square.
However if the picture of the party
room (above) is anything to go by, the
affair is likely to have been a more
sedate one. Even the Centre for Policy
Studies, which was considering host-
ing a last minute election party, aban-
doned ship due to lack of interest.
Happily it wasnt all doom and
gloom. The Marylebone Sports Bar and
Grill sold out of tickets for its
Democrats party and over at The
Stafford hotel St Jamess, bar staff
promised to mix celebration cocktails
potent enough to make you see stars
and stripes. So patriotic.
Last night at the US Embassy in Grosvenor Square: Nothing says party like a powerpoint slide
CALLING all City philanthropists and hedonists: there
are still places available at a black tie charity dinner
held at the Hurlingham Club tomorrow night. The Champions
in the Community event, hosted by family foundation Miller
Philanthropy and Iain Duncan Smith MP, will raise money for
charities supported by Miller Philanthropy and The Centre for
Social Justice. In addition to dinner there will be an auction
of lots including a drive in a Rolls-Royce and a couture gown
by celebrity couturiers Ralph & Russo. Already on the guest
list are Mark Florman, the chief executive of the British
Private Equity and Venture Capital Association, and Mark
Rodino, the global head of sales at STOXX. Unusually there is
no ticket price, but a donation to attend, as the evening is
being underwritten by SCM Private, the firm founded by Gina
Miller and her ex-hedge fund husband Alan. For more
information contact
CITY landmark St Brides Church is in danger of being
officially classed At Risk if 300,000 is not raised by
Christmas. Architect Christopher Wrens tallest City church has
survived world wars and decades of storms but
damage to stonework has caused masonry to
fall from the tower, which has now become
a serious enough risk that the church may
be forced to close. The Patron of the
INSPIRE! Appeal to restore the church, Sir
Michael Bear, Master of the Worshipful
Company of Paviors and previous Lord
Mayor of the City of London (pictured right),
is leading calls to the business community
to support St Brides. For more
information visit
Got A Story? Email
Canaccord boys
trade their toys
BROKERS at Canaccord Genuity
have been out on the road the past
couple of weeks, working on a bond
issuance for lorry company Stobart
As part of the roadshow the firm
hosted a truckers breakfast at its
London office yesterday, dish-
ing out bacon
sarnies and cof-
fee to those
who attend-
They were
also handing out dinky Eddie
Stobart toy trucks.
While the bond has yet to launch,
The Capitalist hears there is a boom-
ing black market developing among
the traders for the lorry toys, which
will make novel stocking fillers for
A p p a r e n t l y
those with the
most children are
driving the hard-
est bargains.
The highly coveted toy lorry (above)
Election all nighter? Nobody in
the City partying like its 2008
Sir Christopher Wrens masterpiece in Fleet Street, St Brides Church, is in danger of closing
Sindall yesterday announced its
chief executive would stand down
as it warned on trading levels for
this year.
The boardroom shake-up saw chief
executive Paul Smith resign with
immediate effect, and executive
chairman and former chief execu-
tive John Morgan appointed in his
Senior independent director
Adrian Martin will take up the
role of non-executive chairman
and Patrick de Smedt has been
appointed senior independent
Elizabeth Peace has
joined Morgan
Sindall as a non-
exec director for
Morgan Sindall
boss departs on
profit warning
the firm.
It comes as Morgan Sindall, which
last month won a contract with
nuclear power plant Sellafield, said
that trading for 2012 would be
slightly below previous expectations,
as economic conditions have
remained difficult over the period
from July to November.
Reductions in public spending,
deferred investment and high levels
of competition weighed on trading
and the firm said it would cut a
number of regional offices.
The construction group also
said it was facing a 10m
restructuring charge as it
aimed at making 55m of
annualised savings.
Brit chip giants Imagination
and ARM buy American rival
BRITAINS two biggest chip
designers, ARM Holdings and
Imagination Technologies,
yesterday spent $410m (256.5m)
carving up US challenger MIPS.
ARM is leading a consortium
spending the lions share of the
money $350m on buying a
warchest of 580 patents from
the Silicon Valley company.
The remaining $60m has
been spent by Imagination on
MIPSs operating business and
its remaining 82 patents.
Yesterdays development is a
defensive move from ARM,
which is looking to maintain its
dominance in designing the
processors used in phones and
Meanwhile, Imaginations part
of the deal was seen as a very
bold step. While Imagination is a
market leader in the graphics
chips used in devices such as
Apples iPhone, the MIPS deal
signifies a potentially risky move
into the territory dominated by
ARM and US giant Intel.
MIPS was a major player in the
processor business in the early
years of the 21st century,
designing technology used in
Sonys PlayStation 2 console and
blu-ray players, but has slipped
behind ARM as smartphone sales
began to take off. Investec
analyst James Goodman
downgraded Imagination from a
buy to a hold. He said: We see
increased strategic risk as
Imagination attempts to achieve
what MIPS could not, whilst also
continuing to defend its leadership
in graphics technology.
ARM Holdings PLC
6Nov 31 Oct 1 Nov 2Nov 5Nov
p 709.50
OUTPUT at South Africa-focused
AngloGolds Mponeng mine
ground to a halt yesterday as
striking miners staged a sit-in.
The gold miner has been forced
to halt mining and processing
activity, just two days after
protesting employees returned to
The strike that has plagued
AngloGold since the end of
AngloGold halts operations at
Mponeng mine due to sit-in
September is still rumbling on,
with employees staging sit-ins and
threatening violent behaviour,
which is preventing the mine from
operating normally and stopping
employees returning to work.
AngloGold said that it would
continue to engage with staff and
unions to ensure that the mine
can operate.
Meanwhile, work continued as
normal at AngloGolds other
South African mines.
Mponeng in South Africa is the worlds deepest mine at more than 4km deep
To celebrate INGs continuing association with arts charity The Discerning Eye,
ING Commercial Banking has teamed up with CityAM to offer you the chance
to win up to 1,000 of art. The ING Discerning Eye, with its slogan new artists,
new audiences, showcases the work of unknown artists alongside their more
established contemporaries.
This year a total of 485 pieces of art, representing the work of 184 artists, has
br clo|d by crorirr| qurc ror |l ur| world |o qo or clow. Euol
selector will use their own dedicated gallery space to display their choices, pro-
viding a unique range of themes which has earned the exhibition an enviable
reputation among art lovers and collectors alike. All the art on show is for sale.
For a chance to win 1,000 to spend on the artwork of your choice from the ING
Discerning Eye exhibition, simply answer the question below:
What is the slogan of the ING Discerning Eye Exhibition?
Please send your answer to
Terms and conditions
The winner will be entitled to choose a painting from the ING Discerning Eye exhibition up to the value of 1,000. The prize is
non transferable, non negotiable and no cash alternative is offered. Entry to the prize draw is free and is open to anyone aged
18 years and over resident in the UK, except employees of ING, their families, agents or anyone else professionally associated
with the draw. Only one entry per person. The closing date is midnight on Sunday 11 November 2012. The winning answer
will b druwr u| rurdor ror ull liqibl r|ric roivd urd |l wirrr will b ro|id by clor or Morduy 1. Novrbr.
The winner must be available on Tuesday 13 November at the Mall Galleries in London to choose their painting. ING assumes
no responsibility and is not liable for any costs, charges or expenses which the winner may be required to pay at any time in
connection with the prize. The winner, by accepting the prize, agrees to participate in non paid publicity accompanying or
rcul|irq ror |lic druw i rquird. Tl Edi|or'c doicior ic rul ir ull ru||rc oororrirq |lic croro|ior. No oorrccordro
will be entered into about a decision regarding eligibility. ING reserves the right to suspend, cancel, or amend this promotion
and/or review and revise these terms and conditions at any time without giving prior notice and by continuing to take part in the
promotion subsequent to any revision of these terms and conditions, entrants shall be deemed to have agreed to any such new
or amended terms. These terms and conditions are governed by and construed in accordance with the laws of England and
Wales and the English Courts will have exclusive jurisdiction to determine any proceedings in connection with this competition
ING Discerning Eye, Mall Galleries,
London SW1Y 5BD 15-25 November,
10am to 5pm, entrance free.
Follow us on Twitter : INGDiscEye
and join our Facebook group : ING Discerning Eye
David Douglas
Barbaras Tulips (detail)
Win 1,000 of art with ING

uing a s continnu ate ING o celebr TTo
cial Banking has te ING Commerrc
he IN T t. to win up to 1,000 of ar
wcases the sho w audiences, ne
. ies ar established contempor
ear a total of 485 pieces o his yye T
q | r r i r o rro c y b d | o l c r b
d di h i l ill

he Disc T ity ts char association with ar
ou t eamed up with CityAM to offer yyo
with its slogan , e ning Eyye NG Discer
tists alongside wn ar k of unknoow or e w wo
k of 184 a or esenting the w eprre rre t, of ar
o l c r o o q o | d l r o wwo | r u l | r o rro r c rr u q
h i di l d ll

, e ning Eyye cer
the chance
, tists w ar ne
e their morre
has , tists ar
l o u E . ww. o
h i

wn dedi use their o selector will
ange of theme viding a unique r
s and errs v t loov eputation among ar rre
or a chance to win 1,000 to sp FFo
simp xhibition, e e ning Eyye Discer
What is the slogan of the ING D
er to w our answ Please send y
Mall Galle , e ning Eyye ING Discer
v London SW1Y 5BD 15-25 No
. ee ance fr entr 10am to 5pm,

y their y space to displaay cated galler
xhibition a ned the e hich has ear es wwh
w t on sho All the ar . s alike d collectorrs
our choice f k of yyo orrk twwo pend on the ar
w: er the question beloow y answ plly
e Exhibition? ning Eyye iscer win@city
, ies r
, ember vve

o pr , choices -
viable an ennv
. w is for sale
omthe ING frro

ms and conditions er T
be entitled to choose a painting fr he winner will T
alte cash no and negotiable non , able ansfer tr non
emp xcept e UK, the in esident r er v oov s and ear y 18
he c T son. y per per entr y one Onl ly ww. a with the dr
r c i r | r l b i q i l l l u r o r r r o d r u r | u r w u r d b l l i w
v y 13 No uesda TTu ailable on v ust be a he winner m T
ch , y costs liable for an esponsibility and is not no r
y accep b , he winner T . e iz pr with the connection
d c ' r o | i d E l T . d r i u q r i w u r d c i l | r o r r q r i | l u c r
ding e egar about a decision r ed into be enter will
conditio ms and ter vise these e r w and vie e r and/or
ter vision of these e y r an ny to equent subs omotion pr
a and conditions ms hese ter T . ms r or amended te
j e vve xclusi e e v ts will ha English Cour ales and the WWa
witter T w us on olloow FFo INGDisc :
oup r acebook g and join our FFa

alue o xhibition up to the v e e ning Ey om the ING Discer r
is o and ee w is fr a dr e iz pr the to y Entr ed. is offer e v nati iv r
of else pr one y an or agents , families their , ING of ees y plo
ember 2012. v y 11 No losing date is midnight on Sunda
M r o r o l c y b d i | o r b l l i w r r r i w l | d r u d v i o r
to choose their p ies in London Galler ember at the Mall v
ed equir y be r ma winner hich the xpenses w wh ges or e har
paid public in non ticipate par ees to r ag , e iz pr the ting
r o i | o r o r c c i l | q r i r r o r o o c r | | u r l l u r i l u r c i r o i c i o d
or a cancel, ight to suspend, es the r v eser ING r ligibility y.
u contin nu y b and notice ior ving pr gi without y time an ny at ons
r e ag v ha shall be deemed to ants entr , ms and conditions
with the dance ued in accor y and constr ned b er v e go ar
connection in oceedings pr y an ny mine deter to isdiction jur
e cEyye
e ning Eyye ING Discer :

e is iz he pr T of 1,000.
aged one y an ny to open
associated y fessionall ly
er he winning answ T
. r b r v o N . 1 y u d r o
ING assumes . ainting
y time in an y at pa to
ying or an ny city accomp
o r d r o c c r r o o o N .
omotion amend this pr
the in t par take ing to
w y such ne an ny eed to r
ws of England and la
this competition with
Spread bets, CFDs & FX are leveraged
products & can result in losses
exceeding your initial deposit
The new
jobs website
for London
FORMER banking advocate Angela
Knight and outgoing TUC head
Brendan Barber have been
confirmed as new members of the
Transport for London board.
The pair will be joined by Brian
Cooke, the former chairman of
London TravelWatch
and supporter of
Boris Johnson.
The Mayor said
yesterday the trio
will bring
expertise to the
board when they
join in January.
Knight and
Barber join TfL
John Morgan will return as
chief executive
SHARES in Aim-listed oil and gas
explorer Bowleven soared yesterday
as it agreed an alliance with Petrofac
to develop a project offshore
Petrofac will provide the Africa-
focused explorer, through its
subsidiary Euroil, with up to $500m
(313m) towards the first stage of
development and up to $60m
towards well costs to develop the
Etinde permit, which is expected to
deliver first production in 2016.
In return, Bowleven will pay
Petrofac a share of revenue from
Chief executive Kevin Hart said
yesterday that the alliance provides
Bowleven with both access to
investment capital and to Petrofacs
extensive development
Analysts at N+1 Singer said
yesterday that thereassuring
backing from Petrofac should help
alleviate funding concerns and
validate the Etinde project in the
eyes of investors.
Shares rose 7.69 per cent to 80.5p.
Bowleven up
on Petrofac
oil alliance
Ex-British Bankers
Association head
Angela Knight
Mercedes in record sales month
nDaimlers flagship brand Mercedes-
Benz overcame another weak month in
the key growth market of China to sell
six per cent more vehicles in October
and mark a fresh record for that month,
the company said yesterday. Including
the 109,632 vehicles Mercedes sold last
month, volumes rose by 5.1 per cent to
about 1.07m cars in the first 10 months
of this year. Sales in China fell 3.9 per
cent to 15,900 vehicles last month.
Shell seals $4bn Bashneft deal
n Royal Dutch Shell has sealed a
two-year deal worth up to 2.5bn to
supply oil to mid-sized Russian
refiner and retailer Bashneft, the
Russian firm said yesterday,
extending an existing agreement
between the two sides. The deal,
worth 122.4bn roubles (2.5bn), is
signed until 25 November 2014, while
the previous agreement expires this
month, Bashneft said.
DS Smith on target for year
nRecycled packaging supplier DS
Smith said yesterday it expects
substantial year on year earnings
per share growth, and that the board
is confident on its performance for
the remainder of the year. DS Smith
said that the packaging business is
performing in line with expectations,
with its Northern and Western
Europe sectors performing
particularly well over the six months
to October.
EUROPES biggest car manufactur-
er Volkswagen sold one of the
largest convertible bonds on record
yesterday, tipping the scales at
2.5bn (2bn).
The firm, which sells Audis and
Porsches, lined up three heavy-
weight banks, Deutsche Bank, Bank
of America Merrill Lynch and
Credit Suisse, to sell the bond to
investors around the globe.
The bond, which will pay 5.5 per
cent for three years before convert-
ing into non-voting equity owner-
ship, is one of the largest issues on
record. It dwarfs others issues this
year, including the 750m convert-
ible bond issued by Nokia in
October and the 500m issued by
Adidas in March.
Deutsche Banks head of convert-
ibles Keyvan Zolfaghari told City
A.M.: It is the biggest corporate
mandatory ever in Europe and the
first traditional mandatory struc-
ture in three years.
VW sells $2.5bn
in a convertible
note mega deal
Its really a superb instrument,
its a very different profile from a
traditional convertible bond, its
very much an equity substitute
rather than a debt substitute like
most convertibles.
The VW bond, rated A- by S&P, will
convert to equity at a maximum
price of 185.40, against a reference
price of 154.50 in 2015.
VW, which snapped up 50.1 per
cent of Porsche earlier this year,
said it was borrowing the money to
help it continue to take market
share in the car production arena.
Leading the deal for Bank of America Merrill
Lynch was Craig Coben, the banks head of
equity capital markets for Europe, Middle
East and Africa. Coben, who worked along-
side Yacine Amor and Oliver Holbourn on
the deal, has previously led two other major
deals this year, the 174m initial public
offering of fashion designer Brunello
Cucinelli and a 750m convertible bond for
telecoms rm Nokia. He has also worked on
privatisation deals of over $1bn each in eight
European countries in the course of his
career, and on over a hundred $250m-plus
equity deals in around eighteen countries
across EMEA. Coben joined BAML in 2005
and is a major gure in the equity capital
market world and widely recognised as one
of Europes leading bankers. He currently
chairs the equity capital markets division of
the Association for Financial Markets in
Europe. Noted for his keen interest in ski-
ing, Coben sits on the board of governors of
Tower Hamlets College in east London and
is a trustee of Presence Theatre Company.
He graduated from Yale University with a
Bachelor of Arts degree and holds a Juris
Doctor degree from Harvard Law School.
His brother is the best selling crime ction
novelist Harlan Coben, author of the Myron
Bolitar series and several other books.
6Nov 31 Oct 1 Nov 2Nov 5Nov
International Consolidated Airlines Group
6Nov 31 Oct 1 Nov 2Nov 5Nov
p 175.00
Bayerische Motoren Werke
6Nov 31 Oct 1 Nov 2Nov 5Nov
British Airways helps boost IAG
traffic by 3.2 per cent in October
INTERNATIONAL Airlines Group yes-
terday posted a strong rise in October
traffic, as a robust performance from
British Airways made up for weakness
at Spanish sister firm Iberia.
Traffic, measured in revenue passen-
ger kilometres, rose by 3.2 per cent
versus October 2011, while passenger
load factor a measure of how well it
fills its planes was up 0.4 percentage
points at 80.5 per cent, it said.
IAG said its first and business class
travel the most profitable part of its
passenger business rose 3.2 per cent,
while non-premium traffic was also
up 3.2 per cent.
British Airways October traffic was
up 6.2 per cent compared to a 3.7 per-
cent fall at Iberia.
IAG has seen worsening economic
conditions in Spain hit its perform-
ance in recent months, undermining
strength in long-haul travel out of
The group recently said its commer-
cial performance at its Madrid hub has
deteriorated further due to the ongo-
ing effects of challenging macroeco-
nomic conditions in Spain and across
the wider Eurozone, as well as the
after-effects of prolonged industrial
IAG is due to announce a new
restructuring plan, including a swathe
of job cuts, for Iberia on Friday, having
completed one for BA last year.
The Anglo-Spanish group expects
underperforming Iberia to push it into
a small operating loss for 2012.
Luxury carmaker BMW starts to
feel pain despite rise in profits
BMW, the worlds largest premium
carmaker, warned yesterday it was
starting to feel the pain of a sickly
European market, overshadowing
strong quarterly results and a
forecast record annual profit.
Chief executive Norbert Reithofer
said conditions were weakening,
after the German company posted a
14 per cent rise in third-quarter
profit that beat analysts forecasts.
Like the rest of the sector, we are
now beginning to feel some
headwind, Norbert Reithofer said
in a statement, which BMW put
down to intense competition an
industry term for rising levels of
incentives to attract customers such
as low interest-rate financing and
cheap leasing deals.
For example, BMW offers leasing
conditions on its revamped 3 Series
that effectively equate to 26 per cent
off the list price in Germany,
according to the CAR think tank.
Earnings before interest and tax
(Ebit) rose 14 per cent to 2bn,
exceeding the 1.72bn forecast, due
to strong demand in China.
BMW reiterated its full-year
forecast for record pre-tax profit and
an Ebit margin, an important
industry benchmark, in its core
Automobiles division at the upper
end of its target range. The cars
division Ebit margin narrowed to
just 9.6 per cent from 11.9 per cent a
year ago and below expectations of
9.9 per cent.
Finance chief Hans Dieter Ptsch said the notes would strengthen VWs capital base
LOW COST carriers EasyJet and Aer
Lingus posted passenger growth
for October yesterday, though both
showed signs of slowing
EasyJet said passenger traffic
rose 6.2 per cent to 5.25m in
October, but this growth is lower
than the seven per cent increase
seen over the past year.
The carriers load factor, a
measure of how well it fills planes,
fell 0.4 percentage points to 88.4
per cent.
EasyJet has opened a string of
new routes over the last year, and
hopes to begin flights to Moscow
next year.
Aer Lingus, which reports third
Low cost airlines Aer Lingus and
EasyJet deliver passenger gains
quarter results today, said its
October traffic rose 0.9 per cent on
a year ago to hit 962,000.
Its growing long haul services
saw a 10.3 per cent jump in traffic
to 86,000. Passenger numbers on
regional flights also took off, rising
34 per cent on last year to 89,000.
These gains were offset by a 2.7
per cent slide in short haul traffic
to 787,000 passengers.
Year to date, Aer Lingus has
enjoyed a 3.7 per cent increase in
traffic to 9.16m.
The Irish airline is trying to fend
off takeover interest from larger
rival Ryanair, which said on
Monday it is willing to offer
regulators more concessions in
order to smooth the path of the
694m (556m) deal.
COUNTING the cost of anti-
Japanese protests in a territorial
dispute with China, Nissan Motors
yesterday cut its full-year net profit
forecast by a fifth to $3.99bn, and
said it had lost share in its biggest
July to September net profit rose
7.7 per cent to 106bn, Nissan said,
despite lower than expected car
sales in the US and Europe. The full
impact of the China damage will
come through in the current
second half.
Demand for Nissan, Honda and
Toyota cars in China, the worlds
biggest car market, was virtually
halved due to the protests in
September and October sparked by
China row drags on Nissan sales
as it cuts its full-year forecasts
BY CITY A.M. REPORTER a row over disputed islets in the
East China Sea. Nissan is the most
exposed of the three to China,
where it has 27 per cent of its
vehicle sales.
The company said that over the
first half of its financial year, a
stronger yen against Russian and
Brazilian currencies, and higher
selling costs, ate into operating
The company trimmed its 2012
China sales forecast to 1.175m
vehicles from a previous 1.35m.
Globally, it said it now expects to
sell 5.08m vehicles in the year to
end-March, down from a previous
estimate for 5.35m.
Nissans US sales skidded 3.2 per
cent in October from a year ago, to
79,685 vehicles.
US stocks lifted
by promise of
vote outcome
S stocks climbed yesterday, the
last day of trading before the US
election results came to a close,
as investors looked forward to a
resolution to the drawn-out race for
the White House.
The rally defied a string of weaker-
than expected results from US compa-
nies and was attributed in part to
expectations that a victor in the presi-
dential race would be known late last
night or early today, despite some fears
that have nagged markets recently
that the outcome could remain up in
the air for days.
The market just wants to wake up
tomorrow and know for sure that
theres a winner, said Linda Duessel,
senior equity strategist at Federated
In trading on the last seven presiden-
tial election days, going back to 1984,
the S&P 500 has averaged a gain of 0.85
per cent, according to Bespoke
Investment Group of Harrison, New
York. Yesterdays gain of 0.79 falls pret-
ty squarely in the realm of expected
performance for the market.
The Dow Jones industrial average
was up 133.08 points, or 1.02 per cent,
at 13,245.52. The Standard & Poors 500
Index was up 11.09 points, or 0.79 per
cent, at 1,428.35. The Nasdaq
Composite Index was up 12.27 points,
or 0.41 per cent, at 3,011.93.
Computer Sciences Corp jumped 17
per cent to $36.80 after the US technol-
ogy services provider posted a second-
quarter profit that blew past estimates
as the company halved costs.
Shares of AOL jumped 22 per cent to
$43.70 after it reported higher-than-
expected revenue and profit on the
strongest advertising growth the
Internet company has seen in seven
RITAINS blue-chip stock index rose
yesterday, buoyed by some
encouraging earnings reports in
light trade ahead of what is
expected to be a close US presidential
election result.
The FTSE 100 was up 45.84 points, or 0.8
per cent, at 5,884.90 by the close, remain-
ing within the tight 200-point range it has
held since September.
The narrow trading range and thin vol-
umes of recent weeks were both symptoms
of the lack of conviction in the market,
said Bill McNamara, technical analyst at
Charles Stanley.
I understand the indecision, waiting for
the election, but Im not even convinced
that once the elections are out of the way
that investors are going to know what to
do, he said, citing the failure to sell off
markedly after a summer rally. What that
tells me is that while there might not be
too many buyers up at these levels, there
clearly arent a lot of sellers around either,
and the impression that I get is that people
really are sitting on the sidelines.
Marks & Spencer rose 2.8 per cent after
the bellwether British retailer beat profit
forecasts. Shares in the company have risen
14 per cent over the last three months, lift-
ed by persistent takeover speculation.
Security firm G4S also posted solid
results, gaining 3.5 per cent after reporting
a pick-up in underlying revenue in the
third quarter.
Life insurer Resolution topped the FTSE
100 leaderboard, rising seven per cent,
with traders citing an upgrade to the stock
by BofA Merrill Lynch to buy from
FTSE 100 lifted by strong results
from Marks & Spencer and G4S
Chemring Group PLC
30Oct 1Nov 2Nov 5Nov 6Nov
6 Nov
UBS has downgraded
defence equipment
maker Chemring from
buy to neutral with
a target price of 300p,
down from 390p, citing
uncertainty over future
profits and revenue.
31Oct 1Nov 2Nov 5Nov 6Nov
6 Nov
30Oct 1Nov 2Nov 5Nov 6Nov
p 1,000
6 Nov
Panmure has reduced its
recommendation for
engineering group IMI
from buy to hold
and cut the target price
to 1040p (from 1140p),
because it forecasts
long-term challenges.
Severeld-Rowen PLC
30Oct 1Nov 2Nov 5Nov 6Nov
p 150
6 Nov
N+1 Singer rates the
structural steel maker a
buy despite its profit
warning. It cut its target
price from 185p to 150p,
but says the firm has a
stable order book.
Sainsburys Bank
Peter Griffiths has been
appointed chief executive of the
supermarket bank, effective 19
November. He was previously
chief executive of Principality
Building Society. Griffiths has also
worked as chief operating officer
at Morgan Chambers, a
consultancy, and head of
commercial services at NatWest
Group IT.
RBC Wealth Management
Nick Reid has been appointed head of charities in the wealth
management firms private client team. He was most
recently director at HSBC Global Asset Management. Reid
has also served as head of charities at Cazenove Fund
Shawbrook Bank
The newly-launched savings and lendings bank has
announced changes to its finance team. Tom Wood joins as
chief financial officer from NBNK Investments, where he was
finance director. Nick Fielden has also been appointed
group finance director. He has worked at Shawbrook since
October 2011.
The brokerage has appointed Eddie Benson as managing
director and head of European salestrading. He joins from
Deutsche Bank, where he worked as a trader. Benson has
also held similar roles at Rowe and Pitman and SG Warburg.
Timothy Chen has been appointed president and group
managing director of the communications firm. He joined
Telstra in March 2012, and has previously held senior roles at
GL Capital Group and Microsoft.
Canaccord Genuity
The international capital markets division of Canaccord
Financial has appointed Steve Buell as global head of
research. Buell will continue as director of US research for
Canaccord Genuity and will be based in New York.
+44 (0)20 7092 0053
To appear in CITYMOVES please email your career updates and pictures to
in association with
in association with
in association with
ORD Heseltines recent report
into economic growth has
attracted a great deal of
comment almost all of which
suggests that he longs for the
old Regional Development Agencies
and the state-planned decades of the
60s and 70s. But the report does, at
least, outline a list of possible policy
actions to deal with a serious
What is to be done about the
regions of the UK? The first thing to
note is that there are very marked
differences within each of the
individual regions. Northern towns
like Hexham, Harrogate and
Wilmslow are every bit as
prosperous as the Home Counties. So
discussing the problem of the
HERE is widespread
agreement in both
government and in business
circles that Britains pension
regime needs urgent reform
to make it fit for the long term.
People are not saving enough for
retirement and businesses are con-
tinuing to struggle to provide ade-
quate pension schemes for their
employees. So far, plenty of work
has been done to raise awareness.
But the debate must now move for-
Part of the problem is a lack of sta-
bility in Britains savings frame-
work, which is preventing people
from making a long-term commit-
ment. Every year brings new change
investors are now drowning in an
alphabet soup of forthcoming regu-
lations. If we want people to save for
the distant future, we need regula-
tors and politicians to be commit-
ted to the same timeframe.
Cross-party agreement on pen-
sions would also be welcome. Above
all, there needs to be a period of sta-
bility in government policy. Current
Every year brings
further new changes
to the UKs savings
industry investors
are now drowning in
an alphabet soup of
current and
impending regulations
Twitter: @cityamforum on the web: or by email:
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

Britains unstable pensions policies
are holding back long-term saving
schemes and initiatives, like the
National Employment Savings Trust
(Nest) the governments new work-
place pension scheme need time
to work through, with no addition-
al changes.
Secondly, we need to raise the gen-
eral level of financial education.
Governments should take a more
hard-hitting approach to raising
awareness among consumers about
the importance of taking personal
responsibility for their financial
future. Building on the introduc-
tion of auto-enrolment pensions
last month, the government needs
to invest in national campaigns to
encourage people to prepare for a
retirement that could last as long as
their working life.
Technology and product innova-
tion also play a vital role in the
future of UK pensions. Technology
will enable employers and individu-
als to monitor, manage, administer
and plan. Again, the success of
auto-enrolment relies upon the
effectiveness of platforms available
to employers.
There are signs from the embryon-
ic workplace savings platform mar-
ket that employees with online
access have a higher propensity to
choose funds outside of the default
option. Indeed default funds, in
which typically at least 80 per cent
of direct contribution members
invest, are not considered fit for
purpose across the life of the invest-
ment. Many experts think that
more active management is need-
We could also imagine a system
similar to the Driving Vehicle
Licensing Agency (DVLA) for pen-
sions. When someone moves job,
marries or divorces, even if the
underlying pension doesnt move,
individuals should only need to
update all their schemes in one
place. This would simplify the sys-
tem and keep people engaged in
their long-term financial planning.
Providers that embrace technology
for the benefit of their members
will also achieve a competitive
My vision for the future of private
workplace pensions embraces a
world in which people will be able
to access platforms to construct
their own portable pension pot,
likely to be a mixture of Isas, com-
pany share schemes and pensions.
It supports innovation and greater
flexibility, recognising that con-
sumers are driving change. The
relationship between employers
rand their pension partners,
providers and advisers will be
increasingly important as they
address the challenges ahead
ranging from managing auto-enrol-
ment to reviewing investment strat-
There is undeniable enthusiasm
in the pensions industry to resolve
these issues. We now need politi-
cians and regulators to provide a
firm and stable commitment on
behalf of present and future pen-
sion investors.
Anne Richards is chief investment offi-
cer of Aberdeen Asset Management. This
article follows a recent a research study
into the UK pensions industry called 250
expert voices: the future of UK pensions.
regions is an over-simplification. But
there is still a problem. Incomes per
head are considerably higher in
London and the South East than in
any other region taken as a whole,
and average unemployment rates are
lower. And if anything, these gaps
are widening.
The suffering of Britains regions
stems from the fact that they are
trapped in a monetary union the
sterling area with two very
dynamic and productive areas:
London and the South East. We are
not accustomed to thinking of it in
this way, but the underlying
problems of Greece and Spain are
the same as those of Yorkshire and
Wales. They are uncompetitive in
their respective monetary unions.
Britains regions do not face the
acute problems of Eurozone
countries for two reasons. First, they
have lacked the autonomy to take
decisions which have bankrupted
some Southern European states.
Second, until now, the prosperous
South of Britain has been happy to
hand over large sums of money to
keep the regions afloat.
Ultimately, our regions are
running large balance of payments
deficits with London and the South
East. They are not sufficiently
competitive to produce enough
goods and services that our
consumers want to buy. In a
monetary union, a balance of
payments deficit translates into
lower growth and higher
unemployment, something that
standard trade theory one of the
best bits of economics shows.
The coalitions policy of varying
regional pay is therefore a good
thing. Paradoxically, Britains
regions are poor because they pay
themselves too much. They cannot
devalue their currency against
London to make themselves
competitive, so they need to price
themselves back into the market.
But they also need more trade,
and this means better links and
more connections with London and
the South East. Modern network
theory has been used to provide
exciting new perspectives on the
structure and patterns of world
trade. The same principles apply
within a country. More
infrastructure connections would
give the regions a chance to
transform themselves. They could
become prosperous areas again, as
they were in the nineteenth century.
Paul Ormerod is an economist at
Volterra Partners, author of Positive
Linking: How Networks Can Revolutionise
the World.
Monetary union is clipping the wings of regions outside the dynamic South
This page finished drying at 3:58 am. Find out whats changed between then and now, with expert analysis from Alpari Newsroom.
Losses can exceed your initial deposit.
Refresh the
In association with
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 or comment at
Minimum wage
[Re: As the mayor announces a rise in
Londons Living Wage, does it make
economic sense? Yesterday]
Sam Bowman is right that low paid workers
should be taxed less. The Institute for Fiscal
Studies has shown that, if firms paid the
Living Wage, the government would knock
1,000 per worker off of the benefits bill,
giving them the option to reduce taxes. But
Bowman misses two points on the issue of
unemployment. First, dire predictions about
increasing unemployment were made, and
proved wrong, when the minimum wage
was introduced. Second, most of the money
going into the pockets of the lowest paid
will be spent to make ends meet.
Bharat Mehta OBE, chief executive of Trust
for London
Learning curve
[Re: City jobs bloodbath shows that
backlash has gone too far, yesterday]
While I support capital ratio requirements, I
agree that tax and other transaction levies
render business more attractive elsewhere.
But banks are still adjusting from an era of
easy profits and need more innovation in
organisational efficiency, product offerings
and client services. The shift of focus by
banks to services and private clients could
just lead to another glut of suppliers. The
sector itself needs to become more
competitive internationally and client
focused. Recent job losses in the City are a
stark reminder that the UK must both
support its financial services, and ensure the
health of other parts of the economy.
Adam Fourie
ROAD sections of the media
are reporting misleading
statistics on recent increases
in directors pay. According
to figures released by
Incomes Data Services (IDS), the
average salary rise among FTSE 100
directors was a huge 27 per cent over
the last year.
But highlighting 27 per cent mis-
represents the facts. It follows on the
reporting of similar figures last year,
when IDS announced that pay rose
by 49 per cent. Back then, a more
realistic representation of the
change was a 10 per cent increase. So
what is going wrong?
The first issue is focusing on the
average change. An average is not a
good way of presenting a picture of
skewed data. If just five companies
on the FTSE 100 offer their directors
a large increase in salary, the overall
average change will inevitably be dis-
A better way of looking at the fig-
ures is to consider a median adjust-
ment the mid-point in the data.
This removes the skew of a few very
high (or very low) changes, and gives
us a more accurate figure of what is
going on. According to the IDSs
report, this years median increase
was just 10 per cent.
Pay for chief executives is also high-
ly variable, so remuneration can
change drastically from one year to
the next. A large increase could be
because of excellent performance. In
many cases, it is also a case of timing.
It is now normal practice for direc-
tors to be given a long-term incentive
plan (LTIP), which measures perform-
ance against the companys share
price over three years. A large part of
the pay received this year may there-
fore be related to the successful per-
formance of the company over that
three year period.
Three years after the award of a
Cost of US 2012 elections: $6bn (3.74bn).
Exercising your right to vote: Priceless.
A clear marketing strategy pays dividends.
This is why Primark has seen such a strong
rise in annual sales.
Why are people complaining about Nadine
Dorries going away from Parliament to
appear on TV? Surely the less time MPs
spend legislating the better.
Marks and Spencers profits down 9 per cent
on womens clothing. Its because theyve
reverted to old fashioned ranges.
After its profits once again disappoint, can
Marks & Spencer return to its former glory?
Marks & Spencer sits squarely in the mid-market. Because of
this, its under constant attack from more specialist brands like
Next (for families), John Lewis (for labels), Zara (for the career
woman) and even New Look (for teenagers and young adults).
The historical legacy of the Marks & Spencer brand is that, by
default, its centred on a Middle England female customer. Shes
not just more sophisticated than she was in the past shes now
got a much wider choice of high street brands to choose from.
However, a senior management reshuffle especially the recent
appointment of Janie Schaffer (formerly the chief of creative
design at Victorias Secret) as director of lingerie and beauty
is a significant step towards helping the retailer recapture the
hearts and minds of customers who have been shopping
Rafael Gilston is managing partner of Geek Brand Consulting.
Rafael Gilston
Neil Saunders
Marks & Spencer remains a successful business, but it has clearly
lost its way. Can it ever regain its former glory? Bluntly put, it is
difficult to imagine. Part of the issue is competition: the clothing
sector is far more competitive than it was in Marks & Spencers
heyday. The retailer now finds itself somewhat stuck in the
middle. Primark is nibbling at its heels at one end, with more
premium players at the other. The days when M&S could
dominate the clothing market have long since gone. Growing
market share back to the levels it enjoyed 13 years ago seems an
all but impossible task. Underlining this is the fact that Marks &
Spencer is far too risk averse for a modern retailer, which
prevents it from realigning itself with changing demand.
Changing this culture is a Herculean task; a task which no one
seems willing to undertake.
Neil Saunders is managing director of Conlumino.
Printed by Iliffe Print Cambridge, Winship Road, Milton, Cambridge CB24 6PP
Distribution helpline
If you have any comments about the
distribution of City A.M.
please ring 0203 201 8955, or email
Editorial Editor Allister Heath | Deputy Editor David Hellier | Managing Editor Marc Sidwell
News Editor Elizabeth Fournier | Business Features Editor Tom Welsh | Lifestyle Editor Steve Dinneen | Sports Editor Frank Dalleres
Creative Director Gavin Billenness
Commercial Sales Director Jeremy Slattery | Commercial Director Harry Owen | Head of Distribution Nick Owen
4th Floor, 33 Queen Street,
London, EC4R 1BR
Tel: 020 3201 8900
Fax: 020 7248 2711
Editorial Statement: This newspaper adheres to the systemof self-regulation overseen by the Press Complaints Commission. The PCCtakes complaints about the editorial content of publications under the Editors Code of Practice, a copy of which can be foundat
LTIP, performance will be assessed. In
roughly half the cases, the perform-
ance target will not be achieved. In
about one quarter it will be fully met.
And in the other cases only part of
the award will be handed out.
A simple example will explain what
is happening and how the statistics
become biased. Suppose in the first
year, a chief executives payout is
1m salary, a 2m bonus and noth-
ing from the LTIP a total of 3m. In
the second year, the payout is a 1m
salary, a 2m bonus, and a full pay-
out of the LTIP. If the companys
share price triples in the perform-
ance period, the LTIP payout would
be 6m. This would mean total pay
received of 9m a 200 per cent
increase on the previous year. In the
third year, pay is 1m salary, a 2m
bonus and nothing from the LTIP a
total of 3m.
If you just take the year-on-year fig-
ure, inevitably youll see large
changes as share prices move up or
down from the date of the LTIP
award. But a large payout will likely
reflect a companys good perform-
ance over the time period. And the
same reward could easily disappear
the next year.
There are, therefore, better ways of
understanding IDSs figures on direc-
tor-level pay. Unfortunately theyre
just not so newsworthy.
Cliff Weight is an executive compensa-
tion consultant at MM&K and a member
of the advisory board of the High Pay
Centre. His forthcoming book on directors
remuneration is published on 17
How manipulated
figures distort the
FTSE pay debate
Traders dont always do it with models
OREIGN exchange is the worlds
largest and most liquid market.
Some estimates put the average
daily turnover at $4 trillion (2.5
trillion). Currency is traded over the
counter rather than on an exchange,
meaning that the machines do not
have to be turned on to get a counter-
party to your trade. It is traded 24
hours a day, five days a week from
20:15 on Sunday night until 22:00 on
Friday. Though I wouldnt
recommend it, you can buy euros
while Brussels is asleep, and sell
dollars before New York wakes up.
With the size, liquidity and ease of
access of the global foreign exchange
market, it can be easy to just dive in,
trade and refine your strategies as you
go along. But it can be useful to take a
step back from the trading screen and
take a bottom-up view (not like that)
of the fundamentals that drive cur-
rency flows. At the same time, where
the real world deviates from the theo-
ry can teach you when to tread care-
fully in the markets.
At its most basic, foreign exchange is
dictated by supply and demand. In an
efficient market, exchange rates will
move to ensure that total demand for
a currency equals the total supply.
Whenever a domestic currency is sold
to buy a foreign currency, demand for
that foreign currency and a supply of
the domestic currency is created. If a
countrys balance of payments moves
into a deficit domestic supply
exceeding foreign demand exchange
rates will fall, reducing the price of
the domestic currency until the bal-
ance of payments is restored to equi-
When economies under the Bretton
Woods system of fixed currencies
approached the transition to free-
floating currencies, their respective
monetary authorities had to make
attempts to forecast the outcome of
this shift, and whether structural
models of exchange rates would be of
systemic forecasting value. The mod-
ern foreign exchange market is a very
different place to the early 70s, but
work by Kenneth Rogoff and Richard
Meese of the Federal Reserve at the
time still gives insight into he issues of
foreign exchange forecasting. Based
on the classic elasticities approach of
supply and demand, markets ought to
Spot Gold
Nov12 Jul 12 Mar12 Nov11 Jul 11 Mar11
Exchange rate forecasting can teach a lot
about fundamentals, writes Craig Drake
S A historically close US election
comes to an end, the outcome
may still be uncertain. But more
certain is the less ambiguous
outcome of a potential Mitt Romney
victory a negative impact on gold and
other metals, due to his intention not
to re-appoint Federal Reserve chairman
Ben Bernanke when his term expires
in January 2014. Considering
Bernankes support for ongoing
quantitative easing, which will
continue until US unemployment falls
below 7 per cent, removing him would
cause serious damage to gold, while
likely boosting the US dollar.
The implications for metals are mag-
nified by the threat of the US fiscal
cliff. In the event that Congress does
not take action to avert the crisis by the
end of the year, the combination of
spending cuts, and expiration of Bush-
era tax cuts, are expected to remove
$607bn (379.7bn) from the US econo-
my, or 4 to 5 per cent of total GDP. It is
estimated that this will drag down
growth, possibly resulting in a 2 per
cent GDP contraction in the first quar-
ter of 2013.
There is also the possibility that, if
Romney wins, he may ask Bernanke to
resign immediately. The balance of
power in Congress is also crucial: a con-
gressional status quo (a Democrat-led
Senate and a Republican-led House of
Representatives), combined with a
Romney victory may reduce the odds of
falling off the fiscal cliff, but could still
pave the way for a Bernanke exit.
However, the worst-case scenario for
gold would be if Romney won and
there was no change in the House,
along with the further loss of
Republican seats in the Senate.
The combination of a Romney victory
and persistent budgetary stalemate in
Congress would have a negative knee-
jerk reaction throughout metals trad-
ing. Gold has already shed half of the
gains that it has made since summer. It
could lose a lot more this quarter, and
risk testing the $1,600 level.
Keep informed with the expert opinion of
City Indexs chief global strategist, Ashraf
US budgetary stalemate could have a negative impact on the price of gold
be much less volatile than they are in
reality. It is a given now, but the theory
is that markets do not just respond to
this classic, and easily forecastable
supply-demand model, but to market
expectations of future developments
in the fundamentals including out-
puts and money supply.
And this is where foreign exchange
rate forecasting starts to become
much more complex. In doing so it
also throws a spanner or two into the
works of foreign exchange forecasting.
The first proverbial spanner comes in
the form of the link between prices
and exchange rates. Pretty much any
theoretical model of nominal
exchange rates relies on purchasing
power parity (PPP). There should be a
long-term relation between national
price levels and exchange rates. If you
can use these national price devia-
tions, you should be able to model for-
eign exchange rates. The problem is
that these PPP rates have a very long-
relationship with a half life of 3 years
or more.
The second issue relating to the dis-
connect between exchange rates and
fundamentals was cited by Rogoff
himself, as one of the six millennium
major puzzles in international macro-
economics. That is, not only do macro-
economic fundamentals fail to
explain the effects of exchange rates,
but it is not easy to systematically
trace back the effects of exchange
rates to economic fundamentals
So what do these difficulties in fore-
casting foreign exchange rates teach
you, the retail trader? First of all, you
should be grateful that it is so diffi-
cult. If it was possible to perfectly
model and forecast the foreign
exchange market, it would be nigh on
impossible for the retail trader to
make money. Secondly, it highlights
the risks inherent in fundamental
analysis. Markets are not rational.
And, given the same fundamentals of
outputs and money supply 12 differ-
ent times, they will react in a dozen
different reactions. That is not to say
non-linear foreign exchange model-
ling cannot produce a workable trad-
ing system the enormous electronic
trading market would back this up.
But traders trying to model markets
should tread carefully.
Learning from models behaving badly
higher-powered 2.2-litre diesel and the
top of the range 3.0-litre V6 tur-
bocharged diesel but lower-powered
versions of each will also be offered.
The 3.0-litre V6 turbocharged version
is a revelation. I have driven few cars
this year that have engines as compli-
ant and effortless as this. The eight-
speed transmission is diligent and
readily complies with my paddle
inputs, when shifting up or down.
This translates to a 0-62mph time of
6.6 seconds and this estate feels like a
fast and powerful car. It rides well and
is particularly impressive in the cor-
ners but this is also a car that has
plenty of straight-line speed. On the
motorway it is quiet and refined and
very, very comfortable. I drive for
hours at a time weaving my way
through the slippery country roads. It
is a marvellous experience, not least
because of the wonderful and varied
autumnal colours of the tree foliage
this year, which blends and blurs and
bends around me as I scoot through
the glens.
There are other powerful diesel-pow-
ered estates, but none this pretty.
Jaguar may have arrived late to the
this particular party but it has arrived
in style. And so may you. With or
without the fridge.
Jessica Ennis shows off the new Jaguar
Olympian Jessica Ennis will be driving the new Jaguar F-Type at this
years Lord Mayors Show on 10 November. Ennis has already driven
the two-seater at Jaguar's test track reaching a speed of 150mph.
Ennis is a Jaguar Academy of Sport Ambassador and already drives an
XKR. She will be joined in the procession by two classic Jaguar E-Type
Stuff gets in a tizzy over the Twizy
Renaults diminutive Twizy fully-electric urban compact two-seater electric
car has won Stuff magazines Tech Transport award. A spokesperson from
Stuff magazine said, Drive it and... you realise how much of an urban
weapon the Twizy really is instant-on electric torque and a wheel at each
corner combine to make every traffic gap an attainable goal. Its brilliant.
It costs 6,690 plus a monthly battery lease cost of 45.
Ford wins best engine design award
The Royal Automobile Club has awarded the 2012 Dewar Trophy to Ford
of Britain for its 1.0-litre EcoBoost engine. The Dewar Trophy recognises
the best of British automotive engineering. The Ford team was
recognised for pushing the boundaries of engine design. The 1.0-litre,
three-cylinder turbocharged engine is very economical and efficient, yet
delivers enough power to replace larger petrol engines.
DESIGN hhhhi
0-62MPH: 6.6 secs
TOP SPEED: 155mph
CO2 G/KM: 163g/km
HY are we changing cars? I
ask, momentarily confused.
Climbing out of Jaguars
new XF Sportbrake and into
exactly the same car the top-end
271bhp 3.0-litre twin turbo diesel V6
version makes no sense. And then it
all becomes clear the new car has a
50kg Smeg fridge in the back.
This is the first time Ive ever been
racing in an estate car, any estate car,
and certainly the first time Ive done so
with a fridge in the back. The rear seats
are folded down to extend to 1,675
litres of load space and the heavy
fridge is strapped down to the cars
floor rail system to stop it moving
around. I am sure the Jaguar guys have
done this with mathematical preci-
sion. But even so, its raining heavily
here in the Scottish Borders and the
East Fortune race track is very wet. Im
about to drive the most powerful ver-
sion of Jaguars latest rear-wheel-drive
XF. With a fridge in the back.
Off we go. Whats most surprising
is how unsettling it isnt. One lap in
and Im pretty much tooling around
the track as I would in a regular XF
saloon car. Thanks to its clever new
self-levelling suspension system,
which has been especially developed
for the estate version of Jaguars
sporty XF it works very well. So
good, in fact, that the additional
weight of the fridge is neither ruin-
ing my racing experience nor send-
ing me off into the wet weeds. As a
display of the new Sportbrakes load-
lugging abilities its impressive, if
slightly tongue-in-cheek: proof that,
despite its additional practicalities,
this is still a sportscar at heart. Its
also nice to know that, if you do fancy
a bit of track day racing on the way
home from picking up a new fridge
or telly, the Jaguar XF Sportbrake is
the car to do it in.
But making a sporty estate car is no
mean feat. Given its heritage, Jaguar
has a lot to live up to but it was a mar-
ketplace that was crying its name. It
seems many of us myself included
still rather like our estate cars.
Despite this, you can count on one
hand the number of genuinely quick,
attractive estate cars currently on
sale. Jaguar is only selling its XF
Sportbrake with a range of diesel
engines, for now at least. I drove the
The XF Sportbrake is that rare thing: an estate with the heart of a sports car. We test it with a fridge in the boot
The new Jaguar estate.
Victoria Beckham was one of the biggest winners
of the night, beating stiff competition from the likes
of Alexander Wang and Christopher Kane

HE 2012 Global Fashion
Awards was a very British
affair this week. The annual
event, which celebrates the
best in fashion and retail across the
world, saw many British companies
walk away with several of the big
Victoria Beckham was one of the
biggest winners of the night, beating
stiff competition from the likes of
Alexander Wang, Christopher Kane
and Jonathan Saunders to be named
the best womenswear designer of
the year. And this isnt the first time
shes been recognised. Only last year,
she walked away with the gong for
designer brand of the year at the
British Fashion Awards. In only five
years shes managed to launch an
incredibly successful luxury brand,
along with a full accessories line and
highly coveted diffusion line,
Victoria by Victoria Beckham, defy-
ing her critics and winning a legion
of loyal fans on the way.
And she wasnt the only Brit receiv-
ing a big gong. British designer Kim
Jones was awarded the best
menswear designer for his work at
Louis Vuitton; Hackett was recog-
nised in the category for best
menswear design team; and
Cambridge Satchel Company, which
has quickly become the go-to brand
both in the UK and America, was
named the best in footwear and
accessories design. The big award on
the night, though, went to
acclaimed celebrity photographer
Rankin who was induced into the
Hall of Fame in recognition of his
contribution to the fashion industry.
This year marked the first time
that the event has been held in
London, having taken place in New
York over the past few years. The cer-
emony was hosted by Cat Deeley,
who flew in for the occasion, and
guests included George Lamb, Jade
Parafit, Downton Abbey star Joanne
Froggatt and actor Luke Evans.
British fashion
reaps rewards at
industry gongs
Hall of Fame
The CATRICE womenswear designer
Victoria Beckham
Menswear designer
Kim Jones for Louis Vuitton
Emerging designer
Emma Yeo
The LYCRA Future Designers Award
Shireeka Delvin
Footwear & Accessories Designer
Charlotte Olympia
Denim Design Team
Levis Commuter Series
Intimates/Swim Design Team
Sports/Activewear Design Team
Buying Team (multi-brand retailer/e-tailer)
Footwear & Accessories Design Team
The Cambridge Satchel Company
Womenswear Design Team
Menswear Design Team
Kidswear Design Team
The GFK Best Multi-channel retailer
Aurora Fashions
Best New Store/Refit
ALTER (Shanghai)
Best E-Store (pure play)
Mr Porter
Best Store
El Palacio de Hierro (Mexico)
Top (left to right) Joanne
Froggatt, Julie Deane, VV
Brown. Far left: Suki
Waterhouse. Left: Cat Deeley
Below: Pixie Lott
British shoe designer Charlotte Dellal; Mr Porter boss Jeremy Langmead, whose company won Best E-Store; musician Mr Hudson; fashion photographer Rankin
6pmLive ATP World Tour Finals
Tennis 10pmTrans World Sport
11pmA League of Their Own 12am
UEFA Champions League Goals
1amFIFA Futbol Mundial 1.30am
A League Football 2amTotal
Rugby 2.30amUEFA Champions
League Goals 3.30amA League
Football 4amInside the PGA Tour
4.30amEuropean Tour Weekly
5am-6amLive European Tour Golf
6pmLive UEFA Champions League
10pmUEFA Champions League
Goals 11pmPoker 1amWorld
Endurance Championship 2am
Watersports World 3am-5am
7pmTotal Rugby 7.30pmLive
UEFA Champions League 10pm
Cage Fighter 10.30pmTotal Rugby
11pmNFL Midweek Special
12amCage Fighter 12.30amMax
Power 1.30am-2.30amWorld
Eightball Pool Championships
7pmWednesday Selection 7.05pm
Equestrian 8.05pmRiders Club
8.10pmAlexias Selection 8.15pm
Golf 9.15pmAlexias Selection
9.25pmGolf Club 9.30pmSailing
10pmYacht Club 10.05pm
Wednesday Selection 10.15pm
Olympic Magazine
7pmESPN Kicks: Brasileirao
7.15pmGlobal Rallycross
Championship 8.45pmDTM Motor
Racing 9.45pmESPN Exclusive
Interviews 10pmESPN Kicks: MLS
10.30pmESPN Kicks: Brasileirao
10.45pmESPN Kicks: Serie A
11pmESPN FC Press Pass
11.30pmESPN Kicks: FA Cup
12amUFC: Ultimate Fighter 1am
Live Major League Soccer 3.30am
ESPN Kicks: FA Cup 4am-6.30am
Live Major League Soccer
7pmCriminal Minds 8pm
Elementary 9pmChicago Fire
10pmGreys Anatomy 11pm
Supernatural 12amSun, Sea and
A&E 1amBones 1.50amCriminal
Minds 2.40amSupernatural
3.30amBones 4.20amMedium
5.10am-6amPassport Patrol
7pmYoung Apprentice 8pmGavin
& Stacey 9pmUnsafe Sex in the
City 10pmUnzipped 10.45pm
Family Guy 11.30pmAmerican
Dad! 12.15amUnsafe Sex in the
City 1.15amUnzipped 2amGavin &
Stacey 3am-3.55amDont Tell the
Bride Goes Global
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmThe Big
Bang Theory. Penny regrets her
night with Raj. 8.30pm2 Broke
Girls 9pmThe Big Bang Theory
9.30pmThe Work Experience
10pmThe Inbetweeners 11pm
Rude Tube: Epic Fails 12.10amThe
Big Bang Theory 1.10amHow I
Met Your Mother 1.35amScrubs
2amMisfits 2.55amThe IT Crowd
3.20amBalls of Steel Australia
4.10am90210 4.55am-6amOne
Tree Hill
7pmStorage Wars 7.30pmPawn
Stars 8pmStorage Wars 8.30pm
Storage Wars: Texas 9pmSwamp
People 10pmAx Men 11pm
Storage Wars 11.30pmPawn Stars
12amSwamp People 1amAx Men
2amAmerican Pickers 3amAx
Men 4amSwamp People 5am
Pawn Stars 5.30am-6am
American Restoration
7pmBear Grylls: Born Survivor
8pmAmerican Guns 9pmFast n
Loud 10pmThe Devils Ride 11pm
Deadliest Catch 1amThe Devils
Ride 2amAmerican Guns 3amFast
n Loud 3.50amThe Devils Ride
4.40amDiscovery Atlas: France
Revealed 5.30am-6amMeerkat
7pmDr Oz 8pmSecretly Pregnant
9pmHospital Sydney 10pm
Trauma: Life in the ER 11pmThe
Girl with Eight Limbs: A Bodyshock
Special 12amHospital Sydney 1am
Wanted Down Under 2amTrauma:
Life in the ER 3amThe Girl with
Eight Limbs: A Bodyshock Special
4amA Baby Story 5am-6amBirth
8pmThe Glee Project 9pm
Last Resort 10pmFringe 11pmAn
Idiot Abroad 2 12amTrollied
12.30amRoad Wars 1amBrit
Cops: Frontline Crime UK 1.55am
NCIS: Los Angeles 2.50amRoad
Wars 4.10amBrainiac: Science
Abuse 5.05am-6amDont Forget
the Lyrics
6pmBBC News 6.30pmBBC
London News 7pmThe One Show
7.30pmPolice Elections Time to
Choose: BBC News 8pmPound
Shop Wars 9pmCHOICE Brazil
with Michael Palin 10pmBBC
News 10.25pmRegional News
10.35pmThe National Lottery
Wednesday Night Draws 10.45pm
Michael McIntyres Comedy
Roadshow11.15pmFILMThe Ring
2002; National Lottery Update 1am
Weatherview1.05amSign Zone:
See Hear 1.35amSign Zone:
Exploring China: A Culinary
Adventure 2.35amSign Zone:
Andrew Marrs History of the World
3.35amSign Zone: Cash Britain
4.05am-6amBBC News
6pmEggheads: Quiz show,
hosted by Dermot Murnaghan.
6.30pmStrictly Come Dancing
It Takes Two
7pmThe Dark: Natures
Nighttime World
8pmMasterChef: The
9pmHow Safe Are Britains
10pmThe Culture Show
10.30pmNewsnight: Weather
11.35pmThe Road to El
Alamein: Churchills Desert
1.05amBBC News 4am-6amBBC
Learning Zone
6pmLondon Tonight
6.30pmITV News
7.30pmCoronation Street
8pmAll Star Mr & Mrs
10pmITV News at Ten
10.30pmLondon News
11.35pmTake Me Out
12.40amJackpot247; ITV
News Headlines
3amFILMColumbo: The Most
Dangerous Match: Crime drama,
with Peter Falk and Laurence
Harvey. 1973. 4.20am-5.30amITV
6pmThe Simpsons
7pmChannel 4 News
8pmThe Great British
Property Scandal: Every Empty
9pmGrand Designs
10pmCHOICE Secret State
11pmRandom Acts
11.05pmGeordies Overboard
12.10amMusic on 4: Mercury
Prize: 2012 Awards Show1.20am
Spotlight 1.35amFILM
Conspirators of Pleasure 1996. 3am
FILMThe Thief 1952. 4.30amDeal
or No Deal 5.25am-6.10am
6pmHome and Away
6.30pm5 News at 6.30
7pmEddie Stobart: Trucks and
Trailers: 5 News Update
8pmThe Removal Men: 5
News at 9
10pmLaw & Order: Special
Victims Unit
10.55pmLaw & Order: Special
Victims Unit
11.55pmThe Mentalist 12.50am
Forensic Files 1.15amSuperCasino.
Live interactive gaming. 3.55am
HouseBusters 4.20amHouse
Doctor 4.45amMichaelas Wild
Challenge 5.10amNicks Quest
5.35am-6amNicks Quest
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd,
1 2 3 4 5
7 8
9 10 11 12
14 15 16
17 18 19
21 22
9 20 12
29 9
11 16
12 29
22 9
24 23
30 3
15 8
6 23
4 6 13
1 Food used in
a trap (4)
3 Small pouch for
shampoo, etc (6)
6 Not in favour of (4)
7 Crust-like surface
of a healing
wound (4)
8 Distant but
within sight (6)
9 Not responsive
(to argument,
feeling, etc) (10)
14 Showing sensitive
insight (10)
17 Young cattle (6)
19 Overtake (4)
20 Strip the skin
of (4)
21 Intense dislike (6)
22 Shafts of light (4)
1 ___-Herzegovina,
country (6)
2 Item of furniture (5)
3 Enclosure for
swine (3)
4 Garlic mayonnaise
5 Level betting (5)
10 Food in a pastry
shell (3)
11 Compete (3)
12 Mr Geller,
psychic (3)
13 Population count (6)
14 Pedestrianised
public square (5)
15 Thin pancake (5)
16 Narrow to a
point (5)
18 Distressing (3)

3 1 2 4 1 3 4
9 5 3 6 8 4 1 7 2
8 2 1 9 4 8 7
2 6 1 2 9
9 6 5 8 4 7 5 8
8 2 9 7 8 6 9
2 1 7 3 2 8 1 4
3 5 2 1 5
8 7 9 3 9 6 8
6 5 2 1 9 8 7 3 4
1 4 2 7 9 1 5
The nine-letter word was
BBC1, 9.00PM
Michael learns about the Brazilian
mining industry, then heads to Rio,
where he hears how the authorities
are ridding the streets of drug gangs.
ITV1, 9.00PM
Part one of two. The detective
investigates the murder of an internet
entrepreneurs daughter and quickly
identifies his prime suspect.
CHANNEL 4, 10.00PM
New series. Political drama, starring
Gabriel Byrne. The deputy prime
minister vows to take on an American
petrochemical company.
Trott rejects opener role idea
n CRICKET: Englands Jonathan Trott
has rebuffed suggestions he could open
the batting in India. The uncapped Nick
Compton is tipped to partner captain
Alastair Cook in next weeks first Test.
Theres going to be someone making
their debut and whoever gets that spot
will do a great job, said No3 Trott of
Compton and rival Joe Root. Theres
not been much debate or talk about
[Trott opening] in the dressing room.
Green Moon lands Melbourne Cup
n HORSE RACING: Green Moon ensured
the Melbourne Cup stayed on Australian
soil for the first time in three years as
the European entrants flopped. The 19-1
shot, formerly trained in Lambourn by
Harry Dunlop, beat Fiorente and
Jakkalberry, the best British contender.
Brit track stars join Wiggins team
n CYCLING: British Olympic track
champions Laura Trott, Dani King and
Joanna Rowsell have joined a new road-
racing team part-funded by Bradley
Wiggins, DTPC Honda.
Ennis up for female athlete gong
n ATHLETICS: Britains Jessica Ennis
has been shortlisted for world
governing body the IAAFs female
athlete of the year award. Ennis, who
won heptathlon gold at the London
2012 Olympics, faces competition from
American sprinter Allyson Felix and
New Zealand shotputter Valerie Adams.
A BRITISH team featuring London
2012 Olympic silver medallist Fred
Evans will take part in the fledgling
World Series of Boxing.
The British Lionhearts, who were
officially announced yesterday with
a photocall on Millennium Bridge in
central London, include 15 other
fighters also part of GB Boxings
Olympic programme.
Middleweight Evans is joined by
bantamweight Andrew Selby, who
also competed at this years Games,
but neither Anthony Joshua nor Luke
Campbell, both gold medallists in
the summer, have signed up.
The World Series of Boxing, which
is entering its third year, allows fight-
ers to take part in professional-style
competition while retaining Olympic
eligibility. It pits squads from around
the planet in two leagues of six, with
teams facing each other in five fights
at different weights, home and away,
before a grand final.
The British Lionhearts will be led
by Rob McCracken, performance
director of GB Boxing and a key fig-
ure in the sports successful
Olympics. They have been placed in a
group with teams from Germany,
Kazakhstan, Italy, Ukraine and the
United States.
Irish lightweight John Joe Nevin,
who lost to Campbell in the Olympic
final, has been included after revers-
ing his decision to turn professional
following the Games.
take aim at
World Series
AST week I wrote about how
important it was for some of
Englands fringe players to step
up and stake a claim for a
regular Test place during the tour
matches that precede the upcoming
series in India.
So I have been delighted to see
Samit Patel do just that in the first
two warm-up matches, proving his
worth as an all-rounder by hitting a
first England century and grabbing a
few important wickets.
Im sure captain Alastair Cook and
the England selectors will want to
pick two spinners for the Tests,
and Patel has pushed himself
ahead of Monty Panesar in the peck-
ing order to join regular twirler
Graeme Swann.
The team has to have balance, and
with Patel likely to bat at six in the
order, as well as being able to bowl 15
to 20 overs, its a nice position for
Cook to be in as he ponders next
weeks first Test.
The other bowling selection issue
facing England chiefs is which seam-
er to pick, with Steven Finn, Graham
Onions and Tim Bresnan vying to join
guaranteed choice James Anderson.
Patels likely inclusion and with
Matt Prior at seven, Stuart Broad
eight and Graeme Swann nine
means there is little need to worry
about the relative batting abilities of
the three candidates, which will dent
Bresnans chances.
Im a huge fan of Finn, so Id love to
see him included and partner
Anderson with the new ball, but
doubts remain over his fitness, which
would leave it a coin toss between
Onions and Bresnan.
At the top of the order, I was pleased
to see Nick Compton enhance his
hopes of earning a Test debut and
opening the batting with Cook with a
half-century in the second tour
match. It took him a while the
innings was slow and steady, and
came after two cheap dismissals in
his previous innings but its his
style to get stuck in and graft. He has
worked very hard for his chance so I
wish him luck.
I hope Cook, meanwhile, responds
well to being in the spotlight like
never before, as he prepares for his
first Test and series as permanent
England captain.
His predecessor Andrew Strauss
struggled for runs in his last few
months and all skippers do at some
point. The same will happen to Cook
eventually, but hes in good form and
I hope he can keep it up now, when it
really matters.
Andy Lloyd is a former England Test
cricketer who has acted as captain and
chairman of Warwickshire.
WORLD champion Ronnie OSullivan
is set to miss the rest of the season
after abandoning plans to return to
snooker due to personal issues.
OSullivans manager Django Fung
said the 36-year-old, who pulled out
of last weeks International
Championship citing illness, may
quit the game permanently.
Lets hope not. You never know
with Ronnie, hes an emotional
player, said Fung. We all have
personal problems and some can
handle them better than others.
When he has these personal
problems, Ronnie finds it difficult to
OSullivan triggers retirement
talk by taking indefinite break
concentrate on snooker. Hes had
glandular fever, which has been
dragging on for some time. He also
has issues with his children and
getting access and hes finding it
difficult with all the travelling.
The Essex cueman announced he
was taking a break in June, a month
after winning his fourth World
Championship, after criticising
governing body World Snooker for
its onerous new 50-week schedule.
OSullivan missed the first three
ranking events of the season but
returned in September to play a non-
ranking Players Tour Championship
event in Gloucester, where he
suffered a shock first-round defeat.
0yaame K|ev ......... (0) 0 |0 Perte ..................... (0) 0
Att. 52,000
PS0 .........................(I) 4 0|aame Zaoreb ......... (0) 0
A|et o. V+ta|| o
Vere/ o5. Ha+r+a 8O Att. 4I,000
P w 0 | | A 00 Pts
=:Gfikf%%%%%%%%%%%%%%%%%%%%%%%%%% + * ( ' - ) + ('
GJ>%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% + * ' ( (' ) / 0
;peXdfB`\m%%%%%%%%%%%%%%%%% + ( ( ) , . $) +
;`eXdfQX^i\Y%%%%%%%%%%%% + ' ' + ' (' $(' '
0|ymp|aces ............(I) J Neatpe|||er ............... (0) I
P+a|a V+c|+a 4 Be||+r+ o |per
Oreca 8O. V|traa|aa 8Z Att. 25,000
Scha|ke 04 .............(I) 2 Arseaa| ...................... (2) 2
Harte|++r 45 w+|catt 8. O|raa Zo
|+rf+r o Att. 50,000
P w 0 | | A 00 Pts
JZ_Xcb\'+%%%%%%%%%%%%%%%%%%%%% + ) ) ' / , * /
8ij\eXc%%%%%%%%%%%%%%%%%%%%%%%%%%%%% + ) ( ( . - ( .
Fcpdg`XZfj%%%%%%%%%%%%%%%%%%%% + ) ' ) . . ' -
Dfekg\cc`\i%%%%%%%%%%%%%%%%%%%% + ' ( * , 0 $+ (
A0 N||aa ................ (0) I Na|aoa ........................(I) I
A|et+rre P+ta J E||sea 4O
Att. 20,000
Aa4er|echt .............(I) I Zea|t St Petersbaro . (0) 0
V|a|+r| Att. I9,000
P w 0 | | A 00 Pts
DXcX^X%%%%%%%%%%%%%%%%%%%%%%%%%%%%% + * ( ' / ( . ('
8:D`cXe%%%%%%%%%%%%%%%%%%%%%%%%% + ( ) ( + + ' ,
8e[\ic\Z_k%%%%%%%%%%%%%%%%%%%%% + ( ( ) ( + $* +
Q\e`k%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% + ( ' * * . $+ *
Naa 0|ty .................(I) 2 A|ax ............................ (2) 2
Taare ZZ De Jara O.
Aaaera 4 Att. 40,222
Rea| Na4r|4 ...........(I) 2 Berass|a 0ertmaa4 .. (2) 2
Pepe J4 Reas Z8. Ar|e|a+ 45 |aa
O/|| 89 Att. 5,000
P w 0 | | A 00 Pts
9;fikdle[%%%%%%%%%%%%%%%%%% + ) ) ' - + ) /
I\XcDX[i`[%%%%%%%%%%%%%%%%%%% + ) ( ( (' . * .
8aXo%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% + ( ( ) - / $) +
DXe:`kp%%%%%%%%%%%%%%%%%%%%%%%%%% + ' ) ) - 0 $* )
B|rm|aoham .......... (0) 2 Br|ste| 0|ty ................ (0) 0
Be|tea .................... (0) 0 |e|cester ................... (0) 0
Br|ohtea ................ (0) I Peterbere .................. (0) 0
Bara|ey .................. (0) I |ee4s.......................... (0) 0
0har|tea ................ (2) 5 0ar4|II ....................... (2) 4
0rysta| Pa|ace ........(I) 5 Ipsw|ch ..................... (0) 0
0erby ..................... (0) 2 Baras|ey .................... (0) 0
da44ersI|4 .............(I) 2 B|ackbara ...................(I) 2
da|| ..........................(I) 2 we|verhamptea ....... (0) I
Nettm |er .............. (0) 0 N|44|esbreaoh ......... (0) 0
SheII we4 ............. (0) 0 B|ackpee| ...................(I) 2
watIer4 ................. (0) 0 N|||wa||...................... (0) 0
P w 0 | | A 00 Pts
:ipjkXcGXc%%%%%%%%%%%%%%%%%%%%% (, 0 * * *' )( 0 *'
D`[[c\jYif%%%%%%%%%%%%%%%%%%% (, 0 ) + ), (0 - )0
:Xi[`]]%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, 0 ( , *( )) 0 )/
?lcc%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, 0 ( , )* (0 + )/
C\`Z\jk\i%%%%%%%%%%%%%%%%%%%%%%%%% (, / ) , )( (+ . )-
9cXZbYlie%%%%%%%%%%%%%%%%%%%%%% (, - - * )( (/ * )+
?l[[\ij]c[%%%%%%%%%%%%%%%%%%% (, . * , )( )( ' )+
9i`^_kfe%%%%%%%%%%%%%%%%%%%%%%%%% (, - , + (0 (( / )*
;\iYp%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, - , + )+ (0 , )*
9liec\p%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, . ) - )0 )0 ' )*
Efkkd=fi%%%%%%%%%%%%%%%%%%%%%% (, , . * )( (/ * ))
9cXZbgffc%%%%%%%%%%%%%%%%%%%%%%% (, - * - ), )) * )(
Nfcm\j%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, - * - (0 (/ ( )(
D`ccnXcc%%%%%%%%%%%%%%%%%%%%%%%%%%% (, , , , ). ), ) )'
C\\[j%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, , , , )) )) ' )'
NXk]fi[%%%%%%%%%%%%%%%%%%%%%%%%%% (, - ) . (0 )) $* )'
9fckfe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% (, , + - )( )* $) (0
9`id`e^_d%%%%%%%%%%%%%%%%%%%% (, , + - (. )) $, (0
:_Xickfe%%%%%%%%%%%%%%%%%%%%%%%%%% (, + , - )' )* $* (.
J_\]]N\[%%%%%%%%%%%%%%%%%%%%% (, + * / )' )- $- (,
9Xiejc\p%%%%%%%%%%%%%%%%%%%%%%%%% (, + * / (, )* $/ (,
G\k\iYfif %%%%%%%%%%%%%%%%%%%%% (, + ' (( (. )* $- ()
9i`jkfc:`kp%%%%%%%%%%%%%%%%%%%% (, * ) (' )+ *( $. ((
@gjn`Z_%%%%%%%%%%%%%%%%%%%%%%%%%%% (, ) + 0 (( *( $)' ('
Bearaemeath ....... (2) 2 Shrewsbary ...............(I) I
0e|chester ............. (0) 0 Netts 0eaaty ............. (2) 2
0eveatry ............... (2) J 0raw|ey Tewa ........... (0) I
0eacaster.............. (0) 0 0rewe .........................(I) 2
0|4ham .................. (0) I Bary ............................(I) 2
Pertsmeath ........... (0) 0 BreatIer4 ...................(I) I
Prestea .................. (0) I 0ar||s|e .......................(I) I
Sw|a4ea ................ (0) 0 SheII 0t4 ................... (0) 0
wa|sa|| ................... (0) I Scaatherpe ............... (2) 4
Yeev|| ......................(I) I Steveaaoe ..................(I) J
A|4ershet .............. (0) 0 wycembe .................. (0) 0
Baraet ................... (0) I Teroaay ..................... (0) 0
Bra4Ier4 ................ (0) 0 0hesterI|e|4 .............. (0) 0
Br|ste| Revers ........(I) 2 Seathea4 ................... (2) J
xeter .....................(I) 2 A|0 w|mb|e4ea ........ (0) 0
||eetwee4 Tewa ....(I) I Retherham .................(I) I
0||||aoham ............. (0) 0 0he|teaham ............... (0) 0
Nerecambe........... (0) 0 Accr|aotea Staa|ey .. (0) 0
0xIer4 0t4 ............ (0) 2 0ao & Re4 ...................(I) J
Pert Va|e ................(I) 2 Rech4a|e .................... (0) 2
Yerk ........................(I) I Nerthamptea ............ (0) I
KF;8PJ;@8IP|.45pm ar|ess st+te
0|A 0hamp|eas |oe 0reap
O|e|se+ 1 S|+||t+r Darets| .........................................................................
Ja1ertas 1 |O Narsj+e||+r ........................................................................
0reap |
B+]err Var|c| 1 l|||e ......................................................................................
V+|erc|+ 1 BATE Bar|sa1 ................................................................................
0reap 0
Berf|c+ 1 Sp+rt+| VascaW ...........................................................................
Oe|t|c 1 B+rce|ar+ .............................................................................................
0reap d
Br+a+ 1 V+r Ut ...............................................................................................
O|R O|aj 1 O+|+t+s+r+]....................................................................................
apewer |eaoae 0ae
H+rt|epaa| 1 Tr+rmere ....................................................................................
V||tar Ke]res Dars 1 le]tar Or|ert.........................................................
apewer |eaoae Twe
P|]maat| 1 Bartar ............................................................................................
0|y4es4a|e Baak Prem|er |eaoae
Vat|erWe|| 1 Daree Ut..............................................................................
(Left to right) Antony Fowler, Sean McGoldrick, Josh Taylor, Fred Evans, Joe Joyce and Andrew Selby are among 15 British Lionhearts
Patels tour fireworks have earned him Test place
Chelsea need a
perfect game,
says Di Matteo
ARSENAL forward Theo Walcott last
night pleaded with manager Arsene
Wenger to give him a run in the
team after he justified a rare start
with a goal as the Gunners squan-
dered two points in Germany.
Walcott, who has been left on the
bench amid his refusal to extend a
contract that expires next summer,
poached the opening goal, before
striker Olivier Giroud headed the vis-
itors into a surprise two-gaol lead.
But Holland forward Klaas-Jan
Huntelaar caused Arsenal jitters by
scoring just before half-time and
Schalke deservedly equalised
through Jefferson Farfan to maintain
top spot in Group B.
I just want to play, said Walcott.
Hopefully now I can get a run in the
team because I feel I fully deserve it.
It was a good point in the end. It
would have been a fantastic victory
but Schalke are a tough side.
Wenger, whose side lie second but
look very well placed to qualify,
praised Walcott, who shrugged off
illness to play last night.
He did well, he said. He had a
Play me boss,
begs Walcott,
after star nets
on comeback
positive attitude and was fresh as
well. He was the only one you always
felt could make a difference and it
was no coincidence he had the
chance in the final minute.
Wenger axed under-fire Andre
Santos and Aaron Ramsey for Laurent
Koscielny and Walcott, the clubs top
scorer with eight despite only four
starts. Yet it was against the run of
play when, in the 18th minute,
Walcott gobbled up a loose ball fol-
lowing a last-ditch tackle on Giroud
to round Lars Unnerstall.
Eight minutes later Giroud flung
himself at Lukas Podolskis whipped
left-wing cross and headed the
Gunners second goal.
The home side hit back just
moments before the interval, when
Huntelaar drilled left-footed first
time across Mannone. With gnawing
inevitability Schalke levelled in the
67th minute, when Afellays cross
reached Farfan and he lashed in via
Arsenal captain Thomas Vermaelen.
MANCHESTER City manager Roberto
Mancini accused referee Peter
Rasmussen of denying them a
dramatic late victory over Ajax after
last nights draw left them on the
brink of elimination from the
Champions League.
The fiery Italian manager
confronted the referee at the final
whistle to complain about the
decision to not award a late penalty
for what he saw as a foul on Mario
Balotelli and for the offside call
that meant that what would have
been Sergio Agueros winning goal
was instead disallowed.
The referee and the linesman
were really poor. It was a penalty,
and it was a goal, said Mancini,
after goals from Yaya Toure and
Aguero had brought City level
following the concession of two
goals to Siem de Jong in the first 17
minutes. I told [Rasmussen] it was a
goal and not offside.
Of their fading qualification
hopes, he added: Its finished. I
always believe in my team but now I
think it is very difficult.
Ajax captain De Jong had skilfully
improvised to give his side a 10th-
minute lead when Citys static
defence left the diving Joe Hart
exposed for him to fire over the
goalkeeper from a tight angle, and
an impressive near-post header
followed seven minutes later when
he was left unmarked at a corner.
Yaya Toure superbly volleyed his
side back into contention just five
minutes later before Agueros placed
equaliser almost 15 minutes from
time into the bottom left corner
from Edin Dzekos knockdown.
Roberto Di Matteo needs Chelsea to win
SPORT @cityam_sport
Shakhtar 3 2 1 0 5 2 7
Chelsea 3 1 1 1 7 4 4
Juventus 3 0 3 0 4 4 3
Nordsjaelland 3 0 1 2 1 7 1
CHELSEA manager Roberto Di
Matteo has demanded his side take
revenge over Shakhtar Donetsk
tonight at Stamford Bridge, or risk
the ignominy of becoming the first
Champions League winners to fail to
progress from the group stage.
Di Matteo said his out of sorts
team would need to summon a
flawless display to overcome
dangerous opponents who inflicted
a wounding 3-1 defeat upon them in
Ukraine two weeks ago.
Failure to plunder all three points
would leave them in a precarious
position third in Group E if
Juventus beat Danish minnows
Nordsjaelland in Turin as expected
and likely to require a result in Italy
to advance.
I think we need to be at our best.
We need a perfect game. Every player
on the pitch needs to perform at the
highest of their ability, said Di
Matteo. In Donetsk the early goal
helped them massively, and then to
play a bit on the counter, so its
important we start well and get the
crowd behind us, and draw
confidence from a good start.
Defying the odds in Europe last
season proved the making of Di
Matteo, with Chelseas unlikely
Champions League triumph
cementing his progression from
caretaker manager to permanent
boss. That campaign was built on a
series of against-the-odds victories,
against Napoli, Barcelona and Bayern
Munich, and the former Blues
midfielder believes the experience
will aid their cause this evening.
Weve had must-win games and
tomorrow is another one like that,
he added. We need to play a perfect
game tomorrow against Shakhtar,
but we are strong at home. We found
that over many years and we will be
fired up to win it.
Left-back Ashley Cole is injured,
meaning Ryan Bertrand will
deputise, while midfielder Juan
Mata and defender David Luiz face
late fitness tests. Veteran Frank
Lampard has been ruled out for
another seven to 10 days.
Schalke 4 2 2 0 8 5 8
Arsenal 4 2 1 1 7 6 7
Olympiacos 4 2 0 2 7 7 6
Montpellier 4 0 1 3 5 9 1
B Dortmund 4 2 2 0 6 4 8
Real Madrid 4 2 1 1 10 7 7
Ajax 4 1 1 2 6 8 4
Man City 4 0 2 2 6 9 2
Mancini: Champions League
dream is over, thanks to ref
SCHALKE ....................................2
MANCHESTER CITY.....................2
AJAX ..........................................2
MANCHESTER United manager Sir
Alex Ferguson has urged his side to
ensure they finish top of their
Champions League group by
winning tonights fixture against
Braga in Portugal.
Fergusons team have won all
three of their Group H matches this
season and at a stage when they
were last year eliminated but the
manager has implored them to
produce another victory.
With nine points from the first
three games we really should be
kicking on and make sure we
confirm the No1 spot, said
Ferguson, who yesterday celebrated
26 years in charge at Old Trafford.
Thats the important thing.
Defender Chris Smalling is set to
play for the first time since May, but
Nemanja Vidic, Darren Fletcher and
Paul Scholes have been ruled out.
Ferguson calls
for first place
WORLD No2 Roger Federer believes
that he is on course to perform to the
best of his ability after easing to vic-
tory over Janko Tipsarevic in his first
match at the ATP World Tour Finals
in London.
The Swiss great, widely revered as
the finest player of all time, comfort-
ably cruised to a 6-3, 6-1 victory over
Serbias Tipsarevic to secure a record
40th victory at the tournament and
revealed he felt that, with his fitness
at a level he is comfortable with,
he is now well placed to pursue
further success.
Im happy with my performance
today, no pain anymore anywhere,
said Federer, who has already won
the season finale six times and who
withdrew from last weeks Paris
Masters as a precaution.
Im happy with my level of play
against Janko, who is obviously a
good player.
Coming in knowing that Ive
played so well in past years, I expect
myself to be at a solid level. I feel like
Im striking the ball well. I hope its a
sign of more to come but I dont
want to get ahead of myself. Im
happy the first one went so well and
it takes pressure off the next couple
of matches.
It took the Swiss little over half an
hour to secure the first set against an
opponent who has yet to taste victory
over him in their five previous matches.
His serve was as consistent as both his
power and slice which left the Serb, who
on Monday had revealed his fitness was
not where he would like it to be, with a
significant struggle to remain in con-
tention in a battle he ultimately lost.
I think Roger was just too good,
Tipsarevic said of the opponent who yes-
terday overtook Ivan Lendls record of 39
wins at the ATP World Tour Finals after
defeat was confirmed in just 68 minutes.
[But] the beauty about this tournament
is that nothing is finished with one win
or loss.
After a closely-contested, three set
affair, Spains David Ferrer defeated Juan
Martin del Potro 6-3, 3-6, 6-4. It was a
very difficult match, said Ferrer, who
has won 11 consecutive matches.
RUGBY chiefs hope to copy the
example of the London 2012
Olympics and use Games Maker-type
stewards to improve the spectator
experience at Twickenham for
England internationals.
Ian Ritchie, the Rugby Football
Unions chief executive, said they
planned to increase the number of
people greeting matchgoers from
Twickenham station and lining the
route to the ground itself. The purple-
clad Games Makers volunteers were
widely hailed as a huge success, and
the RFU will draw on the expertise of
Debbie Jevans, the former director of
sport for London 2012 now heading
the board planning for England
staging the Rugby World Cup in 2015.
Not just at the Rugby World Cup
but at Twickenham, said Ritchie at
yesterdays Sports Industry Breakfast
Club. What were trying to look at is
from the moment somebody arrives at
Twickenham station to when they get
to the ground do they feel
welcomed, do they feel embraced? The
Games Makers side of it worked
fantastically well. I think that works at
Twickenham and certainly at the
World Cup. And if anyone knows
about that, its Debbie.
Ritchie played down talk of
scrapping Premiership relegation and
promotion, a notion put forward by
former British and Irish Lions coach
Sir Ian McGeechan, who the RFU are
consulting on other matters.
He said: You can have a vibrant
second tier, like with the Football
League, and promotion and relegation
is very helpful in bringing that about.
Ronnie OSullivan casts doubt over his future
in snooker by taking indefinite break
Snooker: Page 33
RFU chief eyes recreating Games Makers at Twickenham
Buy online at
or call 0843 208 1234
(option 1)
All matches are now on General Sale (excluding Tottenham). All tickets are subject to availability, terms and conditions apply.
Wed 26th Dec Sat 29th Dec Sat 1st Dec Mon 10th Dec
Federer finding Finals form and
fitness after win over Tipsarevic
World No2 Roger Federer has won 40 matches at the ATP World Tour Finals a record number
US OPEN champion Andy Murray
this afternoon faces the world No1
Novak Djokovic in the most
significant match so far in Londons
ATP World Tour Finals.
In a rivalry that is being compared
with that witnessed between Roger
Federer and Rafael Nadal, the two
have been involved in several
momentous matches in what has
been a successful season for both
and most recently competed in the
final of the Shanghai Masters,
where Djokovic won.
Though comparisons with Federer
and Nadal are perhaps premature,
that Murray overcame Djokovic in
the final of this years US Open to
secure his first ever grand slam
should not be overlooked.
Whenever I play Andy, I know its
going to be a gruelling fight with a
lot of long rallies, said Djokovic
after his victory of Shanghai, and so
it consistently proves. Most of our
games have been tight, Murray said.
Murray set for
Djokovic again
Novak Djokovic v Andy Murray,
1.45pm; Tomas Berdych v Jo-Wilfried
Tsonga, 7.45pm
R Lindstedt/H Tecau v M Bhupathi/
R Bopanna, 12pm; M Mirnyi/D Nestor v
J Marray/F Nielsen 6pm
Our order boundaries technology allows you to avoid
unwanted execution slippage on market and stop entry
orders. Another reason weve been a world leader in online
trading for over 22 years.
Youll feel right at home with us.
Spread betting & CFD trading can result in
losses that can exceed your initial deposit.