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Angela Merkel (left) promisedintensive talks followingcalls fromDavidCameron (right) torenegotiate the UKs membershipof the EU

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GERMAN chancellor Angela Merkel
yesterday said she would seek a com-
promise agreement to stop Britain
leaving the European Union, following
David Camerons pledge to hold a ref-
erendum on the UKs membership of
the organisation by 2017.
We are prepared to talk about
British wishes but we must always
bear in mind that other countries have
different wishes and we must find a
fair compromise, Merkel said. We
will talk intensively with Britain about
its individual ideas but that has some
time over the months ahead.
However her foreign minister Guido
Westerwelle warned that cherry pick-
ing is not an option with the EU.
French foreign minister Laurent
Fabius was even less enthusiastic: If
Britain wants to leave Europe we will
roll out the red carpet for you. FREE
Italian Prime Minister Mario Monti
said he believed Britons would stay in
the EU if they were given a choice,
while the White House restated its
belief that the UK should stay in
Cameron yesterday insisted that he
would vote in favour of Britain staying
in the 27-member bloc. However
Labour leader Ed Miliband rejected
the entire concept of a public vote on
membership: Our position is no: we
dont want an in-out referendum.
However, business leaders came out
in support of the Prime Minister with
48 industry and City leaders backing
his plans in a letter to The Times, pub-
lished today.
The Prime Minister delighted
Eurosceptics and angered European
leaders in equal measures with his
long-awaited speech, which was deliv-
ered yesterday morning in the City.
In it he pledged to renegotiate
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Britains relationship with the EU, and
put the new deal to a vote by halfway
through the next parliament, saying it
is time for the British people to have
their say on Europe.
As part of the renegotiation process
Cameron promised to conduct an
audit of the powers Britain wants to
claw back from Brussels. In the speech
he highlighted working time restric-
tions on doctors in the health service
as an example of the EU restricting
British practices.
Cameron also attacked City leaders
who fear a referendum may negatively
affect the economy: Some people say
that to point this out is irresponsible,
creates uncertainty for business and
puts a question mark over Britains
place in the EU. But the question mark
is already there: ignoring it wont
make it go away.
Yesterday the fiercely Eurosceptic
Ukip party claimed credit for
Camerons decision.
Ukip should be awarding itself a
medal. I dont think we would have got
here with internal pressure alone,
Eurosceptic Conservative MEP Daniel
Hannan told City A.M. Weve got the
thing weve been wanting for over 20
APPLE posted record profits last
night, as sales of the iPhone 5 and
iPad mini in the months since
their releases drove it to new
However, the companys
performance disappointed Wall
Street, sending Apple shares down
more than 10 per cent in after
hours trading as it warned of
lower revenue growth in the
coming months.
Apples highly anticipated
results for its crucial first quarter,
which covers October, November
and December, revealed sales of
$54.5bn (34.4bn), an 18 per cent
increase on the previous year.
Profits, which had been
expected to fall due to lower
product margins, rose marginally
to $13.1bn. This was despite the
quarter spanning 13 weeks,
compared to 14 weeks last year.
Apple sold a record 47.8m
iPhones and 22.9m iPad, and this
would have been higher if it had
managed to keep up with demand.
The companys profit margins
were hit, however, due to the
relatively low price of the iPad
mini and the higher production
costs associated with the iPhone 5.
Were very confident in our
product pipeline as we continue to
focus on innovation and making
the best products in the world,
chief executive Tim Cook said.
Follow me on Twitter: @allisterheath
THE US House of Representatives
yesterday passed a Republican plan
to allow the federal government to
keep borrowing money until mid-
May, after the top Senate Democrat
and White House endorsed it.
The vote in the Republican-
controlled House drew the
opposition of 111 Democrats, many
of whom labeled it a negotiating
gimmick that would set up a new
fiscal cliff just weeks after the
White House and Congress reached a
deal to avert a package of automatic
spending cuts and tax hikes.
The plan avoids for the time being
a repeat of the 2011 debt ceiling
standoff that rattled markets and
prompted a downgrade of the
governments triple-A credit rating.
The US Treasury is expected to
exhaust remaining borrowing
capacity under the $16.4 trillion
(10.4 trillion) debt limit between
mid-February and early March.
House Speaker John Boehner
warned immediately after the vote
that Republicans would take the
next opportunity automatic
budget cuts set for 1 March to
demand reforms from President
Barack Obama.
Boehner said the automatic cuts,
which were temporarily delayed
earlier this month, are going to go
into effect unless Obama makes
Congress votes
to extend US
borrowing limit
Jobs miracle sees record
number of Brits in work
UNEMPLOYMENT plunged again in
the three months to November, offi-
cial figures showed yesterday, defy-
ing fears of a triple dip recession and
bringing fresh hope that the econo-
my is on the mend.
Employment jumped 90,000 to a
new record high of 29.68m while
unemployment dropped again to
2.49m. Full time employment drove
that increase, rising by 113,000,
while the number of people in part
time employment dipped by 23,000.
That sent hours worked soaring 3.3
per cent to 364.9m per week, and the
number of part time workers unable
to get a full time job dropped by
23,000 to 1.38m. But youth jobless-
ness edged up by 1,000.
Despite the positive figures, GDP is
still expected to have fallen in the
final three months of 2012.
It remains a puzzle that an econo-
my showing basically flat growth is
generating a rise in total hours
worked of 2.3 per cent on a year earli-
er. The apparent continued decline
in service sector productivity
remains a bit odd, said BNP Paribas
economist David Tinsley.
Part of the reason for such a sus-
tained rise in employment may be
the low rise in pay incomes rose 1.5
per cent in the year, hitting 472 per
week in November, well below infla-
GMG ends talks to sell Trader stake
Guardian Media Group has called off talks
with interested buyers over the sale of its
half stake in the car classifieds company
Trader Media Group following a failure to
agree a price. Apax, its joint venture
partner in Trader Media, was interested in
buying out the 50.1 per cent owned by
GMG in a deal that would have netted the
publisher of the Guardian and the
Observer around 300m in cash. Apaxs
offer for the stake valued Trader at around
1.2bn including net debt of 600m,
significantly less than GMG had hoped for
Cuts cause General Dynamics loss
General Dynamics yesterday became the
first big US military contractor to take a
significant writedown for declining US
defence spending when it announced a
$2.13bn (1.3bn) fourth-quarter loss at
the start of its reset year.
Chinese fund and Schmidt bank unite
Raine, a boutique merchant bank backed
by Google executive chairman Eric
Schmidt has struck a deal with a Chinese
state-owned fund to work together on
media, sport and entertainment
Jobs warned rival to stop poaching
workers from Apple
Steve Jobs threatened a patent lawsuit
against Palm, the maker of phone
handsets, unless it agreed to stop hiring
Apples employees, according to court
documents revealed this week.
Dreamliner inquiry lands at Eaton
An aerospace factory in Hampshire has
been drawn into a Japanese investigation
over a fuel leak that caused an emergency
on one of Boeings 787 Dreamliners.
Ladbrokes homes in on 30m Betdaq
Ladbrokes chief executive Richard Glynn is
on the verge of making his first acquisition
since taking the reins at the bookmaker
three years ago with the purchase of
betting exchange Betdaq for about 30m
Tea cartel formed to boost profits
The price of a cup of tea could rise after
the world's biggest producers agreed to
join forces to boost profits, a Sri Lankan
minister has announced.
Goldman opposes independent chair
Goldman Sachs is trying to block a
shareholder proposal for an independent
chairman from appearing on the proxy
ballot, following an effort last year
against a similar proposal that saw the
company name a lead outside director.
Judge approves Kodak loan
A judge has approved a financing deal
worth $843.7m (533m) for Kodak, which
the company says should help it emerge
from bankruptcy protection midyear.
RUPERT Murdochs News
International has snapped up the
rights to show online highlights of
Premier League football games.
The three-year deal, which begins
at the start of the 2013-14 season,
means that News Internationals
news outlets the Sun, the Times
and the Sunday Times will be able
to show Premier League highlights
on their websites and smartphone
and tablet apps. Meanwhile, BSkyB
extended a deal to show lengthy
highlights of the 226 games not
shown on live television.
to 8.1%
12,100 to
JUMPED 90,000
to 29.68m
FELL 37,000
to 2.49m
NOW 7.7%
1,000 to 957,000
3.3% to 364.9m
per week
2% to 487 per week
1.4% to 468 per week
OF 2.7%
Murdoch scores
with footie deal
THE investigation into interdealer
broker Icap in connection with
Libor rate rigging has intensified,
a source close to the probe
confirmed last night.
Seven of the estimated 50 staff
working on the Libor probe for
City watchdog, the FSA are now
focusing on Icap.
Icap, founded by Michael
Spencer, said last year that it had
been asked to provide information
to investigators and said it was co-
operating fully with the
FSAs Libor probe
gathers speed
To contact the newsdesk email
OOD on David Cameron. He has
finally listened to public
opinion and agreed to seek a
better, renegotiated EU
membership deal for the UK. Nobody
born after 1957 in the UK has ever
had a chance to say what they think
of an organisation that controls more
of UK public policy than ever before.
Of course, the details of the prime
ministers proposed course of action
are not perfect, and all of this could
yet come to nothing as the referen-
dum is due to take place after the
next election, which Labour will prob-
ably win, but this is nevertheless a
hugely important moment. Cameron
deserves to be congratulated for his
courage. He wants to stay in the EU;
but understands that without signifi-
cant repatriation of powers the public
will eventually lose patience.
Those who believe in free trade and
Camerons decision to call a referendum is absolutely right
open markets should not fear this ref-
erendum. The business community is
divided on the EU, unlike in the 1970s
when it almost universally backed
joining the common market. Now
many, especially smaller firms but
also plenty of large ones, support a
looser arrangement; they realise that
the EU is in terminal decline as a mar-
ket and resent the endless stream of
damaging, job-destroying rules, with
Solvency II for insurers merely the lat-
est in an extraordinarily long list.
In the 1970s and early 1980s, it was
possible to portray the EU as a liberal-
ising, anti-communist force; these
days, it is primarily an engine of anti-
democratic corporatism and social
democracy, with some important pro-
individual freedom elements
drowned out by state-building.
It is sad that most banks remain in
favour of the status quo, which in
reality means progressively greater
centralisation. They have got this ter-
ribly wrong. Yet business as a whole,
like British society is divided; most
want to stay in some much looser
relationship, if it is possible to negoti-
ate one. Thats also clearly Camerons
position, though it remains to be seen
what he exactly has in mind, and
what he is able to negotiate.
A referendum will create uncertain-
ty. But so does holding general elec-
tions or referenda on Scottish
laps with pro-EU integrationists)
argued it would have no impact on
where business chose to locate;
Londons pool of talent, language,
restaurants and culture would sup-
posedly be enough to keep everybody
here. Yet now, suddenly, none of these
matter: business is about to run away
because of the EU question. These
people need to make up their minds.
Above all, the City and business
must stop scaremongering. They
should focus on getting the right kind
of renegotiation which preserves
trade and essential freedoms but lib-
erates us of unnecessary interference.
If they dont engage in this debate in
a constructive manner, they will have
only themselves to blame if they dont
like the final outcome.
independence, events which are gen-
erally backed by opponents of this
particular referendum. Big City firms
have got their priorities wrong: the
prospect of the Labour party winning
the next election and imposing 75 per
cent tax rates on bonuses, or the pos-
sibility of the EU capping them in an
unworkable way, are much greater
threats to their business models. Car
companies should spend more time
worrying about energy regulations or
a further collapse in demand for their
products caused by the dysfunctional
euro. It is strange that these firms
many of which have gone begging for
handouts in recent years are so
vocal about opposing any repatriation
of political powers to the UK but so
quiet on other issues of far greater rel-
evance to their prospects.
There is a parallel with the 50p tax
rate. Supporters (a group which over-
tion at 2.7 per cent.
Recruiters Robert Half forecast a
strong start to 2013, with professionals
particularly likely to benefit from
strong hiring. Its study shows 23 per
cent of directors expect to take on
more staff in the first half of the year
while only nine per cent expect firings.
The Association of Graduate
Recruiters predicts a nine per cent rise
in vacancies for university leavers this
year, as well as a two per cent rise in
average starting salary to 26,500.
And the British Retail Consortiums
latest figures show a one per cent rise
in employment in the sector in the
year to December, despite the indus-
trys problems.
The new jobs website for London professionals
BUSINESS leaders yesterday broadly
welcomed David Camerons plans to
renegotiate a new deal with the
European Union.
In a letter to The Times, 48 industry
and City leaders said the Prime
Ministers promises of a negotiation
followed by an in-out referendum
within five years was good for busi-
ness and good for jobs in Britain.
The signatories included London
Stock Exchange chief executive Xavier
Rolet, Standard Chartered chairman
Sir John Peace and Diageo
chief executive Paul
Many major UK indus-
try bodies also said they
would be happy to see
Britains current EU deal
renegotiated with a new
focus on free trade.
The vast majority of busi-
nesses across the UK want to
stay in the single market,
but on the basis of a
revised relationship
with Europe that
promotes trade
Business backs
Camerons call
on Europe vote
BY JAMES WATERSON and competitiveness, said John
Longworth of the British Chambers of
Commerce. Announcing plans for a
referendum on British membership
puts the onus on the rest of Europe to
take the Prime Minister seriously, as
they will now see that he is prepared
to walk away from the table.
The Institute of Directors called the
speech realistic and pragmatic and
welcomed any move to curtail large
amounts of costly regulation being
introduced through unaccountable
But there were concerns over the
timescale of the announcement, with
the vote not likely to take place
until late 2017. This is a political
decision, not an economic deci-
sion, said Sir Martin Sorrell, WPP
chief executive, at the World
Economic Forum in Davos. You
just added another reason why peo-
ple are going to postpone invest-
ment decisions.
The Prime Ministers commitment
to reshape the EU from within and
his ambition to secure a better deal for
Britain is right. But this strategy is not
without risk. If the door to a UK exit from
the union is open it will diminish our
ability to influence the reforms that
Europe needs. It is far from certain,
moreover, that the outcome of
negotiations will be clear cut, meaning
that greater uncertainty about UK
membership particularly for business,
will prevail.
Chief executive of the
EEF organisation for
UK manufacturers
LSE chief Xavier
Rolet said he
backed Cameron
THE FORUM: Pages 20-21

n David Cameron has committed to
holding an in/out referendum on Britains
membership of the European Union by
the end of 2017 if the Conservatives win
the next general election.
n Before this he will seek to negotiate a
new deal with Europe but the
referendum will be on membership, not
whether to accept this revised package.
n The referendum could be required as
part of any Conservative coalition deal
after the 2015 general election.
n Cameron will personally campaign for
Britain to stay in the EU but fears a
stronger Eurozone could curtail free trade.
n The Prime Minister wants completing
the single market to be our driving
n Cameron used the speech to portray
himself as heretic, who wants the EU to
be more flexible rather than act with the
cumbersome rigidity of a bloc.
n Some powers should return from
Brussels to national parliaments. Cameron
did not provide details but hinted the
working time directive is his top target.
n Cameron attacked those who say a
referendum creates uncertainty for
businesses. He said the other option is to
let anti-EU anger build up until the public
vote for complete withdrawal from the
n Holding a referendum immediately
would be inappropriate because it is not
clear what form the EU will take following
the Eurozone crisis.
n Cameron rejects complete withdrawal
from the EU in favour of the model
practised by Norway and Switzerland
because they are very different from us.
n The Prime Minister believes the
Eurozone crisis will force the EU to pass a
new treaty, providing the opportunity for
Britain to renegotiate its relationship.
Free movement of goods and
people is enormously important
for the British economy, and we need to
preserve that situation. At the same
time, there are serious concerns about
large amounts of costly regulation
being introduced through
unaccountable processes. A future
referendum to decide the workings of
our relationship is the best way to
affirm Britains participation in a free-
market Europe which is competitive and
Director general of the
Institute of Directors
We support the Prime Ministers
stated goal of keeping the UK
within the European Union albeit on
better terms. Londons position as
Europes leading international financial
and business centre is crucial to
sustaining jobs and growth not just in the
UK but across the continent. Uncertainty
over this relationship with Europe risks
making the UK less attractive as an
international centre across many
industries by making it more difficult to
make long-term investment decisions.
Policy chairman at the
City of London
Polling has consistently shown that
the British electorate want a better,
looser relationship with the EU rather
than a Brixit or the status quo if thats
on offer. David Cameron has outlined a
clear course towards precisely the type of
slimmed down Europe that most people
and MPs in his party have been calling
for. European partners who feared an
imminent dawn raid on Brussels will be
relieved. He has set out a plausible and
powerful case for EU reform and should
get a fair hearing in national capitals.
Director of Open
Europe, a think tank
calling for EU reform
The Federation of Small Businesses
remains neutral on the issue of
being in or out of the European Union,
but recognises there is more certainty
going forward to 2017-18. Nearly a
quarter of FSB members export and the
vast majority do so within the European
Economic Area. Generally FSB members
find it easier to trade with other EU
countries, especially first time exporters.
Governments around the world need to
do all they can to keep markets open and
take barriers away.
National chairman,
Federation of Small
GROWTH in the UK will be even
more sluggish than previously
expected in 2013, while the
Eurozones economic output will
shrink again, the International
Monetary Fund (IMF) said yesterday.
The lending body slashed its GDP
projections for regions throughout
the world, predicting that global
growth will slow to 3.5 per cent in
2013 slightly down from its earlier
estimate of 3.6 per cent expansion.
Britains economy will expand just
one per cent this year, the IMF
expects, edging down its previous
forecast of 1.1 per cent growth.
In its last World Economic Outlook,
published last year, the IMF said the
Eurozone could expect 0.1 per cent
growth in 2013. Yet now it predicts a
0.2 per cent contraction.
While there are plenty of candi-
dates vying for the dubious honour
of being the sick man of Europe,
Europe has got the sick man of the
world gong in the bag, commented
IMF expects UK
to grow just 1pc
as forecasts cut
BY JULIAN HARRIS Jason Conibear of foreign exchange
specialists Cambridge Mercantile.
With Germanys economy going
off the boil again, the bloc's laggards
will drag it into contraction for the
second year in a row.
Despite being widely regarded as
the Eurozones powerhouse economy,
German will fare even worse than the
UK in 2013, the IMF said.
German GDP will grow by just 0.6
per cent, its economists believe, down
0.3 percentage points from last
yearss forecasts.
And the IMF expects France the
Eurozones second largest economy
to expand by just 0.3 per cent.
In crisis-struck Italy and Spain, GDP
will shrink by one per cent and 1.5
per cent respectively, the IMF said.
Across the pond the situation is
thought to be more robust, however.
Despite ongoing strife over the US
debt ceiling, the IMF expects the
worlds largest economy to grow by
two per cent throughout 2013 down
by only 0.1 percentage point since its
previous forecast.
JP Morgan boss Jamie Dimon apologised to shareholders yesterday for the $6.2bn loss
JP Morgan boss Dimon hits out
at accusations of opaqueness
JP MORGAN chief executive Jamie
Dimon made a staunch defence of
the banking industry yesterday
after accusations that big banks are
not transparent enough.
Speaking at the World Economic
Forum in Davos, Dimon warned of
further regulation of the industry.
I think a lot of regulators are
overwhelmed, he said. Theyre
overwhelmed with rules and
Responding to accusations from
Paul Singer of hedge fund Elliot
Associates that large banks are too
big, too leveraged, too opaque,
Dimon said: Our [company filing]
is 400 pages long. What would you
like to know? With all due respect
hedge funds are pretty opaque too.
Dimon also apologised to
shareholders for the $6bn (3.8bn)
loss associated with a London
trader nicknamed the Whale. He
said the incident was a terrible
mistake, but that the bank has
moved on and is still highly
If youre a shareholder of mine,
I apologise deeply, Dimon said.
But we had record results and
life goes on.
Despite a $6.2bn loss from bad
trades in JP Morgans chief
investment office last year, the bank
still managed to earn a record
$21.3bn in 2012.
JPMorgan Chase is the largest US
bank, with $2.36 trillion in assets.
Its chief investment office has since
been restructured and traders and
executives involved with the
whale trade were dismissed.
After an internal review,
Dimons bonus was cut in half to
$11m for 2012.
GREENHILL & CO, the New York
based investment bank and
advisory firm, reported a 6.1 per
cent fall in profits in the fourth
quarter of 2012 on lower returns
from investments.
Despite a 17 per cent rise in
revenues from advising clients, a
poor run of investments pushed
profits down to $15m (9.5m) from
just over $16m in the previous
Greenhill saw investment losses
of $8m in the quarter, compared
with a $9m profit in the same
quarter a year earlier.
The results sent shares in
Greenhill down around 0.8 per
cent in trading yesterday.
Greenhill profits fall as advisory
gains offset by bad investments
Mergers and acquisitions
worldwide fell in 2012 for the first
time in three years, stunting
income from advisory work. For
the full year, Greenhill saw a four
per cent fall in revenues from
advisory work.
However, Greenhills chief
executive Scott Bok said he expects
the market for M&A work to
improve in 2013.
For the near term, it is clear
that we began the new year with a
far more attractive backlog of
announced and pending
transactions than we had a year
ago, Bok said yesterday.
Greenhill was founded in 1996
by current chairman Robert
Greenhill, who was previously
chief executive of Smith Barney.
METRO Bank may not have been
established if founder Vernon Hill had
realised in advance how arduous and
expensive the process of getting a
banking licence would be, the
American billionaire said yesterday.
It is famously difficult to get a new
banking licence issued, as the new
ventures backers must prove they
have enough capital before they can
have the permission, but generally
need the licence before they can
attract the necessary capital.
Hill set up Metro Bank in 2010,
becoming the first new high street
bank in more than 100 years.
But although he had set
up other banks previously
and has ambitions for
Metro to grow to 200
branches in the
south east, he
doubts he could
face apply-
ing for a
to set
up a
Metro boss: I
wouldnt set up
UK bank again
UK bank again.
I had forgotten how hard it is I am
not sure I would do it again, he told a
Westminster Business Council event.
And he added that he does not
believe the regulators are seriously try-
ing to make it easier to get a new
licence, instead simply paying lip serv-
ice to the idea of a more open and
competitive industry.
Martin Wheatley and Andrew Bailey
the leaders of the new Financial
Conduct Authority and Prudential
Regulatory Authority respectively
have both pledged to do more to open
up the sector. Their new plans to
reduce barriers to entry will be
announced in the next month.
They say they are making it easier,
but it is very hard and expensive it is
not at all easy, said Hill.
But it is not only the UKs regulators
that make his life difficult the chair-
man also noted that the EU is respon-
sible for more new regulations than
the domestic authorities.
LLOYDS staff in roles from IT
support to insurance to branch
management were yesterday
notified they will be leaving the
bank as it continued to roll out its
plan to cut another 15,000 jobs.
Lloyds informed 940 staff across
the country they will be losing
their jobs over the next three to six
months, depending on the terms of
their contracts.
The group operations, insurance,
wealth, retail, international and
commercial divisions are all
That takes the total lost since
mid-2011 to 8,000, more than half
way through the current cost-
cutting plan.
Lloyds renews job cutting plan
with another 940 staff to go
BY TIM WALLACE The groups policy is always to
use natural turnover and to
redeploy people wherever possible
to retain their expertise and
knowledge within the group, said
the bank in a statement.
Where it is necessary for
employees to leave the company, it
will look to achieve this by offering
voluntary redundancy.
Compulsory redundancies will
always be a last resort.
It comes a day after Barclays
informed hundreds of its London
investment banking staff they will
be losing their jobs in a review
which will be announced next
month, while banks across the
globe are also cutting back Citi is
losing 11,000 workers, for example,
while UBS is cutting 10,000.
Lloyds chief Antonio Horta Osorio is trying to restore the state-backed bank to health
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Eurozones consumer morale
shows some sign of recovery
CONSUMER confidence in the euro
area has jumped sharply in the first
month of 2013, a survey showed
yesterday, while separate data
revealed that the debt ratios of
Eurozone governments are
beginning to stabilise.
And on a rare day of positive
figures for the single currency area,
Portuguese debt yields fell to their
lowest since late 2010. Investors
were heartened by strong demand
at Portugals first bond market
foray since its 2011 bailout. They bid
around 10bn (8.4bn) for Portugals
reopening of its October 2017 bond,
five times more than the 2bn the
Treasury sold, allowing it to borrow
at a relatively low cost.
Subsequently, Portuguese two-year
bond yields fell 29 basis points on
the day to 3.125 per cent, their
lowest since October 2010.
Meanwhile, across the Eurozone,
consumer morale rose to an index
score of minus 23.9 this month
from a December figure of minus
26.3, the European Commission
said suggesting households can
help boost the blocs economy.
The Eurozone remains mired in a
debt crisis, yet separate figures from
Eurostat show that its states debt to
GDP ratio stood at 90 per cent in the
third quarter of 2012, only slightly
up from 89.9 per cent in the
previous quarter.
There was still some food for
bears in yesterdays data, however,
as the Bank of Spain reported that
Spanish GDP shrunk 0.6 per cent in
quarter four of 2012. And in France
business morale has worsened,
according to statistics group Insee.
Its confidence index fell from 89 to
86 this month.
Vernon Hill prides
himself on US-style
customer service

PROVIDERS of a new high-profile
investment product are actively lobby-
ing to be included in a government-
run compensation programme, City
A.M. has learned.
Oliver Cardigan, a director at Numis
Securities, said his company has had
discussions with top people in gov-
ernment in the hope of extending
consumer protection to retail bonds.
Numis want the FSA-controlled
Financial Services Compensation
Scheme (FSCS) which guarantees up
to 85,000 of personal savings with a
bank or building society to be
extended to cover the balance of an
individuals investment in retail
Retail bonds enable individual
investors to buy debt directly from a
company. The UK market has grown
at a fast rate since 2010, with investors
attracted by yields that can be
upwards of 7.5 per cent.
Retail bonds
considered for
Under current rules the entire
investment is at risk if a company is
liquidated. Including retail bonds in
any compensation scheme is likely to
demystify the product and substantial-
ly push up demand for retail bonds.
Currently the vast majority of these
issues are taken up by discretionary
fund managers, rather than self-
traders, Cardigan explained. There
are ads in the newspaper [but] because
the FSA is so cagey about the risk of
any lawsuits you cant put a Facebook
campaign or a TV campaign because
all the regulatory language would
spoilt the effect.
Numis is preparing to unveil details
of the first retail bond issue of 2013
involving FTSE 250 oil and gas explor-
er EnQuest within the next week.
According to Henrietta Podd, head of
debt advice at Canaccord Genuity,
there were 16 new retail issues in 2012,
raising a total of 1.5bn up 78 per
cent year-on-year. She said the average
ticket bought by investors in retail
issues managed by her company is
around 20,000.
NEW LOOK is in talks with banks over refinancing its 1.1bn debt, following improved
trading. The fashion retailer, whose designers include Kelly Brook (above), has
revamped stores in a bid to attract older customers. New Look reported a 3.7 per cent
like-for-like sales rise at Christmas, and is seen to be able to attract lower interest rates.
TWO top lawyers were yesterday
appointed to the board of the
Financial Services Compensation
Scheme (FSCS) to bolster the
leadership team after the
departure of two veteran members.
The FSCS acts as a fund of last
resort for depositors in broken
banks and building societies if
they go under, deposits are
guaranteed up to 85,000, with the
rest of the sector bearing the cost.
Former Aegon general counsel
Marian Glen has been appointed by
Banking depositors backstop
beefs up its governing board
the Financial Services Authority.
Her experience in the area includes
remediation for Scottish Equitable
customers, working on redress
And Charles McKenna, formerly
a corporate partner at law firm
Allen & Overy has also joined the
They replace Ros Reston and
Tony Ashford, who were members
of the board through the financial
crisis, when the FSCS was called
upon to compensate the UK
customers of several failed
Icelandic banks.
JUST a week after revealing they
were in merger talks, Tui Travel
and its German parent Tui AG
have called off discussions, send-
ing shares in the FTSE 100 com-
pany tumbling nearly five per
Tui AG, which owns 56 per
cent of Tui Travel, said the nil-
premium merger on the table
was not attractive based on the
current share prices.
The holiday groups are now
barred from rekindling talks for
six months under Takeover
Panel rules.
Tui AGs major shareholders,
including Russian billionaire
BY MARION DAKERS Alexei Mordashov and Norwegian
shipping magnate John Fredriksen,
have been pushing the companies
to save on costs by sharing
Sources close to the companies
had talked up the value of syner-
gies, but analysts were sceptical
that the firms could squeeze the
claimed 500m (420.3m) savings
out of two companies that already
work closely together.
With denial well ahead of the
mid-February put-up-or-shut-up
deadline the no-deal announce-
ment may suggest to the markets
that Tui Travel shares are overval-
ued, Accendo Markets head of
research Mike van Dulken said in a
note to clients.
TUI Travel PLC
23Jan 17Jan 18Jan 21 Jan 22Jan
300 p
HILCO emerged yesterday as the
front runner to buy the brand of
collapsed camera chain Jessops.
The retail restructuring firm,
which bought HMVs debt from its
lenders on Tuesday, is understood to
be mulling a plan to open Jessops
concessions in HMVs stores.
Administrators PwC have received
around half a dozen expressions of
interest for the brand. All of Jessops
187 stores closed on 9 January.
Jessops brand
eyed by Hilco
AMAZON tightened its grip on CD,
DVD and game sales at Christmas,
taking a quarter of the market at the
expense of the high street.
Research from Kantar Worldpanel
Entertainment found that the online
retailer took 23.4 per cent of
entertainment sales in the 12 weeks
to 23 December, up from 20.3 per
cent last year. HMV rose only
marginally to 17.5 per cent, while
Tesco and Game saw big losses.
Amazon gains
over Christmas
News, info and offers at
City of London plans to hear your views
Rare and unusual ilems from The Worshiful Comany of
ovyers, one of lhe Cily's Livery comanies daling back lo 1363,
vill be dislayed al Guildhall Library, IC2, unlil 28 March.
FRII admission more delails from!dha!!!ibrary
Bowyers' exhibition at Guildhall Library
The Cily of London Cororalion has issued a Drafl Local Plan for
consullalion and ve vould like lo hear your vievs on il. The Plan
builds on lhe Cily's Core Slralegy adoled in 2011, and sels oul
more delailed olicies lhal vill be used vhen making decisions
on lanning alicalions. You can see lhe Drafl Local Plan al lhe
Guildhall, in all Cily libraries and on lhe Cily's vebsile:!nca!p!an.
We are also holding lvo ublic meelings al lhe Guildhall, vhere
you can ask queslions aboul lhe drafl lan, lalk lo Cily lanners
and give us your vievs on Monday 11 February, 12.00 2.00m,
or on Tuesday 26lh February, 6.00 8.00m.
All commenls on lhe Drafl Local Plan are very velcome and
should be senl by 5m on 11 March 2013 lo: The Cily Planning
Ocer, Dearlmenl of lhe uill Invironmenl, Cily of London,
P.O .ox 270, Guildhall, IC2P 2I}, or allernalively, lo lhe
folloving email address: !nca!p!
McDonalds to create 2,500 UK
jobs as it reveals rise in sales
MCDONALDS announced plans
yesterday to create 2,500 jobs at
its restaurants this year, taking
its UK workforce to 93,500.
The worlds biggest
restaurant group said the move
builds on the 3,500 jobs created
in 2012, of which 70 per cent
were taken by young people
under the age of 21.
Business secretary Vince
Cable, who met with employees
yesterday said: A highly-skilled
workforce is an important part
of any growing business. Thats
why I am pleased to see how
McDonalds is providing
training and apprenticeships in
a range of skills.
McDonalds is also to be
applauded for helping adult
employees get qualifications
in maths and English.
The fast food giant also
revealed an unexpected
rise in December sales at
established US restaurants,
which helped lift its
profit by 1.4 per
cent to $1.4bn
(883.8m) above
analysts estimates.
The group said global same-
restaurant sales for 2012 rose
3.1 per cent, with US sales up
3.3 per cent and European
sales its largest market after
by revenue up 2.4 per cent.
Total sales rose 1.9 per
cent to $6.95bn.
Tui Travels shares closed at 278p,
below the price they were before the
merger talks were announced.
Shares in German-listed Tui AG fell
5.4 per cent to 7.51.
Tui Travel was advised by Lazard
during the talks.
Mark Kleinman is the City
editor of Sky News
R R O G A N T , i n d o l e n t ,
avaricious and these are
some of the politer adjectives
applied to investment
bankers and private equity firms
during their ongoing stand-off with
City fund managers.
The permafrost between them
has shown few signs of thawing
since two BlackRock executives
outlined in 2011 a litany of gripes
about the way bankers sell new
share issues.
Now add the voice of Legal &
General Investment Management
(LGIM), the most influential
investor in the City, to this chorus
of criticism.
In its submission to the UK
Listing Authoritys review of
listing standards, a copy of which
Ive seen, LGIM suggests a range of
proposals to reform the pivotal
relationship between fund
managers and bankers.
Among its most notable
demands is a call for banks to
publish their previous
performance record on company
listings and to name the
individuals responsible for those
It also wants to see a limit on
the size of bank syndicates in
order to preserve a broad range of
independent research on
companies, and a deferral of
Icy times between fund managers and bankers
sponsors fees for up to six months
after a company lists with
payments linked to the average
post-flotation share price.
The fund manager also criticises
the widespread practice of
parachuting directors onto
company boards shortly ahead of
an initial public offering (IPO),
which it argues signals a
lukewarm commitment to
corporate governance.
LGIM is right. The emergence of
ever-larger syndicates has acted as
an impediment to the
accountability of banks.
Smaller pools of advisers would
redress that balance. Likewise
delaying fees would demonstrate
closer alignment between the
long-term interests of bankers and
The mutual distrust between the
private equity industry and fund
managers will take time to repair
itself. The Citys virtually-
moribund IPO market is testament
to the need for it to happen.
One company that could play a
role in that rapprochement is
owned not by private equity
barons but by Britains wealthiest
Step forward, Global Switch, the
data centre operator founded by
billionaire siblings David and
Simon Reuben.
A flotation of Global Switch
has been on the cards for years. A
roadshow of institutional
investors, which City sources say
got underway earlier this month,
and the ongoing rally in equity
markets, lend the idea fresh
The Reubens are in no rush. The
motive for the roadshow, which
also took place last year, is to
familiarise prospective
shareholders with Global Switch
well in advance of a listing
process one of the other
demands expressed in the LGIM
Global Switchs earnings growth
profile means that it would sit
comfortably in the FTSE 100, with
a market value of at least 3.5bn.
If it floats in London, that is.
Global Switch is an emerging
markets technology play that
could list as easily on New Yorks
Nasdaq or in Singapore as in the
That gives the owners
geographical optionality (as
bankers might put it). It will
provide another test of the Citys
IPO credentials.
As a rule, chief executives prefer to
project themselves as corporate
predators rather than prey.
Nowhere is this narcissistic trait
more stubbornly exhibited than in
the Citys saturated small- and
mid-cap broking sector, where the
dearth of fee-generating activity is
exacting a stiff toll on the survival
prospects of many firms.
The dire environment has
prompted tentative merger
discussions between most of the
significant operators in this space,
including, I understand, Panmure
Gordon and WH Ireland shortly
before Christmas.
Another prominent name is
understood to be in talks about a
rescue deal that could materialise
in the next few weeks.
Expect more news imminently.
Tui Travels merger
talks with parent fail
Business secretary Vince
Cable applauded
McDonalds for
creating the
new jobs
ANGLO-Dutch consumer goods giant
Unilever said yesterday full-year sales
exceeded 50bn (42bn) for the first
time thanks to strong demand for its
soaps and hair products in emerging
The owner of PG Tips, Persil and Cif
Cleaning brands yesterday said pre-
tax profit rose seven per cent in 2012
to 6.68bn on sales up 10.5 per cent to
Underlying sales in emerging mar-
kets such as India, China and Brazil
grew by 11.4 per cent and now make
up around 55 per cent of turnover.
The company said Magnum ice-
cream and Sunsilk shampoo both
became 1bn brands in its portfolio,
meaning that Unilever now has 14
brands in this category.
Unilever has been focusing on grow-
ing its personal care products, which
are more popular in regions like Latin
America and Asia. Sales of these prod-
Unilever profits
from emerging
market growth
ucts rose 10 per cent in the period.
This helped offset sluggish growth at
its food division particularly spreads
such as Flora with underlying sales up
just 1.8 per cent in the quarter, due to its
exposure to more developed markets.
Chief executive Paul Pollman said:
Markets will remain challenging,
with intense competition and volatile
commodity costs. We remain focused
on achieving another year of prof-
itable volume growth ahead of our
Shares in PG Tips owner Unilever rose 3.1 per cent to hit a record high of 2,526p
Unilever PLC
23Jan 17Jan 18Jan 21 Jan 22Jan
2,540 p
Swanns way has brought profit but not boosted sales
HRISTMAS should hardly have
been a season for merriment at
WHSmith, judging by the latest
trading update, with like-for-like
sales down five per cent for the 20
weeks to 20 January, and total sales
down four per cent. Yet the stationery,
books and impulse goods seller was
chipper, pointing to good profits
thanks to careful margin control
especially impressive in a season given
to heavy discounting.
Investors seemed to share the
cheer: shares fell, but remain well
above both their January lows and
the price they have commanded for
most of the last five years. Thats
thanks to the remarkable strategic
turnaround worked by Kate Swann,
the outgoing chief executive, which
helped WHSmith evolve from a loss-
making dinosaur burdened with
selling the sort of low margin CDs
and DVDs that laid HMV low into an
agile, margin-conscious business,
returning ever-increasing profits.
However, it might be time for a
little anxiety about how long this
new vision can remain airborne.
It isnt as if Swann can claim that
there is a problem in one particular
division. High street sales were down
five per cent like-for-like and five per
cent in total perhaps hardly
surprising, given the performances
other high street chains have been
reporting over the same period. But
travel stores in travel hubs like
train stations and airports, the focus
of the new WHSmith strategy was
down as well. Total sales for the
division were flat, despite the chains
continued expansion visible once
again this month with the
announcement that eight new stores
will be part of the new Doha airport
when it opens later this year. And
like-for-like sales in travel, stripping
out sales in new stores, were down
by four per cent.
The new WHSmith is much less
dependent on Christmas season sales
than it used to be, but these figures
are no one-off. WHSmith total like-
for-like sales were down four per cent
in 2010, five per cent in 2011 and five
per cent in 2012.
Investors havent minded that fall,
since group pre-tax profits rose at
the same time, and in healthy
increments: group pre-tax profit was
up nine per cent in 2010, four per
cent in 2011 and 10 per cent in 2012.
Yet there must come a point
where one effect starts to cancel out
the other. Despite the expansion in
travel and overseas outlets, overall
revenues have continued to decline:
down two per cent in 2010, three per
cent in 2011 and two per cent in
2012. Revenues have fallen only on
the high street side of the business,
but like-for-like sales have fallen
every year for travel as well: two per
cent in 2010, three per cent in 2011
and three per cent in 2012.
With profits continuing to march
upwards, it would be foolish to lose
faith in WHSmith just yet. No doubt
its interims on 11 April will continue
to reflect the remarkable success of
Swanns way. But the book and
magazine market faces a continuing
onslaught from the digital
revolution, the high street is on the
critical list and economic gloom is
keeping travel numbers soft.
Without growing revenues, or at
least arresting their decline, how
long can profits keep soaring?
With two recent disposals in US foods, we expect Unilever to continue its
favourable skew to faster growing categories in 2013. It is encouraging to see cash
ow improving...The outlook remains the same; further sales growth ahead
of the market and continued steady and sustainable margin expansion.

Unilevers fourth quarter and full year 2012 numbers have beaten con-
sensus expectations on the key metrics of organic growth and core margins (core
earnings per share was in line). This caps a strong year for Unilever and
we see the trends as supportive of our buy case.

In all, Unilever looks to have moved from a recovery play to a core port-
folio holding. Exposure to the emerging markets remains enticing, cashow and
the resulting dividend payment still attractive, while its defensive attrib-
utes continue to appeal.


Interviews by Kasmira Jefford



Books and stationery retailer WH
Smith yesterday said strong margins
helped to underpin profits and offset
a five per cent fall in like-for-like
sales over Christmas.
Sales at high street stores open
more than a year slipped five per
cent in the 20 weeks to 20 January
2013, but WH Smith said gross
margins improved strongly and
costs were tightly managed to fend
off tough trading conditions.
WH Smiths travel arm, which
includes 619 stores at airports, train
stations, and motorway service
stations, reported a four per cent
drop in like-for-like sales.
We expect the trading
environment to remain challenging
however we are a resilient business
with a consistent record of both
profit growth and cash generation,
and are confident in making further
progress said outgoing chief
executive Kate Swann.
Steve Clarke, head of the firms
high street arm, will takeover in July.
During her nine-year tenure,
Swann has expanded WH Smith into
more lucrative travel locations. She
has exited the ailing entertainment
market while also focusing on
selling more profitable products.
Margin growth
offsets sales fall
for WH Smith
THE chief executive of steelwork
manufacturer Severfield-Rowen
resigned yesterday as it reported
huge cost overruns on the
Cheesegrater project, sending its
shares tumbling.
Cost overruns on the 122
Leadenhall project known as the
Cheesegrater due to its distinctive
shape adversely affected UK
performance, the firm whose other
work includes the Olympic stadium
and the Shard said.
As a result, the board said
it would review
expeditiously its current
contract base.
Tom Haughey, chief
executive of the
Yorkshire-based firm,
has resigned with
immediate effect.
Chairman John Dodds
has assumed the role
of executive chairman.
The firm said it was
in talks with its
lending banks over
compliance with its
covenants. Shares
fell 33.26 per cent.
costs spell end
for steel chief
The Cheesegrater is at
122 Leadenhall Street
LAND Securities has bagged
itself another tenant for its
Walkie Talkie skyscraper in the
City, the property giant revealed
yesterday in an upbeat trading
Royal Sun Alliance is to take
four floors at 20 Fenchurch
Street, meaning thirty-four per
cent of the building is now pre-
let and a further 18 per cent is
under offer.
Insurers Ascot Underwriting
as well as Markel and Kiln have
also pre-let office space in the
160-metre high tower.
Land Securities said the
tower, a joint venture with
Canary Wharf Group, is on track
to be completed by March 2014.
Chief executive Rob Noel also
said it has now fully let the
office space at its One New
Change centre in the City and
that elsewhere in the West End
it has seen strong demand with
its 123 Victoria Street scheme
now 58 per cent let.
The group has also struck a
deal with Google to drive
footfall to its malls. The deal,
which allows shoppers to see if
items are in stock, comes as the
number of retail units in
administration - including
Jessops, HMV and Blockbuster
rose from 1.8 per cent in
September to 2.2 per cent.
PROPERTY developer Capital &
Counties (Capco) moved a step closer to
realising its 8bn Earls Court scheme
after signing a conditional land sale
agreement (CLSA) yesterday with
Hammersmith & Fulham council.
The agreement gives Capco the go-
ahead to use land including the West
Kensington and Gibbs Green estates
in the wider redevelopment of Earls
Capco has the option to buy approxi-
mately 22 acres of land in the Earls
Court & West Kensington Opportunity
Area for 105m.
It also has to provide new homes for
the estates 760 households.
Gary Yardley, chief investment offi-
cer at Capco said the agreement
marks another important step for
the group after the masterplan
designed by Sir Terry Farrell was grant-
ed planning consent by both
Kensington and Chelsea council and
Hammersmith and Fulham council
last year.
We look forward to working with
the local community and delivering
the Earls Court Masterplan which will
create 7,500 new homes and 12,000
new jobs in the area, he said.
The CLSA was granted after a judge
threw out a legal challenge by one of
the Gibbs Green estate residents earli-
er this week.
Capcos Earls
Court scheme
moves closer
Walkie Talkie tower
seals fourth letting
EnQuest buys 8pc stake in Alba
nNorth-Sea focused EnQuest has
snagged an eight per cent holding in
the Alba oil field for 19.25m. EnQuest
will acquire two of CIECO Energys
companies, which together hold a
total of eight per cent in the field. The
oil producer will pay 18.75m in cash,
plus a further 0.5m for the
completion of certain project
milestones. The stake in the field has
reserves of 5.9m barrels of oil,
EnQuest said yesterday.
Iron ore output jumps at BHP
nAustralian miner BHP Billiton
posted a three per cent annual uptick
in iron ore production in the last three
months of the year, as it kept pace
with Chinese demand. The FTSE 100
mining giant produced 42m tonnes of
iron ore in the fourth quarter, from
41.1m over the same period in 2011.
BHP reiterated its production
guidance for the base metal at 183m
tonnes, and forecast a five per cent
increase in output this year.
Output falls at Hochschild Mining
nGold and silver output edged down
during 2012 for South America-
focused silver miner Hochschild
Mining, although it said it hit all of its
targets. Attributable silver production
fell to 20.3m ounces over the year
from 22.6m ounces for 2011. Gold
output sank to 337,660 ounces over
last year, from 377,000 ounces the
previous year. Hochschild reiterated
its target for 2013 of 20m silver
equivalent ounces, which is flat on last
THE CHIEF executive of utility firm
SSE resigned yesterday after a decade
at the helm.
Outgoing chief executive Ian
Marchant, who will step down at the
start of July, said yesterday that the
time is right for a change for both
SSE and me. He gave no detail as to
what his future plans are, although
it is thought he is not looking for
another executive position.
He will be replaced by deputy chief
executive Alistair Phillips-Davies.
Finance director Gregor Alexander
will also have an expanded role in
supporting the new chief executive.
Marchant joined SSE predecessor
Southern Electric in 1992 and joined
the board of SSE as finance director
when it was formed in 1998. He is
also a board member of FTSE 100
engineering company John Wood
Incoming chief Phillips-Davies has
worked closely with Marchant over
the past 15 years, joining Southern
Electric in 1997 and the board of SSE
as energy supply director in 2002. He
has held the role of deputy chief
Ian Marchant
resigns after a
decade at SSE
executive since last year.
Phillips-Davies said yesterday he
would build on the companys track
record of building real dividend
growth and making energy supplies
more sustainable and affordable.
The market took the announce-
ment negatively, with the shares clos-
ing down 3.69 per cent yesterday at
We believe that this is an unneces-
sary reaction: much though Ian
Marchant has generally performed
well as chief executive over the past
decade, the remaining team is solid,
and the progression is orderly,
Angelos Anastasiou at Seymour
Pierce said yesterday.
23Jan 17Jan 18Jan 21 Jan 22Jan
1,460 p
HEALTHCARE Locums, the
troubled staffing provider for the
health and social care sectors,
yesterday warned that poor
trading conditions meant it might
not meet its banking covenants in
March and June.
The group, led by chief executive
Stephen Burke, has approached its
two largest shareholders, Tosca
Fund and Ares Capital, which
between them own around 72 per
cent of the equity, with a view to
them providing some additional
funding, as part of a strategy to
safeguard the business.
Healthcare Locums on the hunt
for funds to meet covenants
BY DAVID HELLIER Healthcare said it could not
guarantee the success of these
talks until it became clear how
much was needed and on what
terms the shareholders wished to
provide the additional capital.
The company said its trading
had been affected in the UK by the
implementation of a new IT
system and a delay in the NHS
moving towards a higher volume
model. In Australia the group has
been hit by a weakness in demand
in the private and public sector.
Shares in Healthcare Locums,
which is suing its former executive
chairman Kate Bleasdale, fell 71.5
per cent to 0.70p yesterday.
Stephen Burke said he has approached existing shareholders to provide funding
Netflix trounces expectations
nNetflix reported a spectacular rise
in user numbers last night, sending
shares in the video streaming
company up by more than 40 per cent
in after hours trading. The company,
which set up in the UK this time last
year, said it now has 33m subscribers,
10m more than at this time last year,
following international expansion and
the increasing popularity of tablet
computers. Netflix profits fell to $8m
(5m) as it invested in new content.
United Technologies profit falls
nUnited Technologies reported a 26
per cent decline in profit, reflecting
large restructuring charges at the end
of a year that saw the company close
its largest-ever acquisition and sell
several small units. The diversified US
manufacturer said yesterday the
fourth-quarter earnings from
continuing operations fell to $945m
(596.8m) from $1.28bn a year earlier.
Per-share profit from continuing
operations came to $1.04, down from
Motorola gloomy on 2013 growth
nCommunications gear maker
Motorola Solutions yesterday forecast
current-quarter revenue below
analysts estimates, and said it
expected growth in its government
business to moderate in 2013 after the
end of an upgrade program for two-
way radios. Net income from
continuing operations rose to $336m
(212.2m), or $1.18 per share, in the
fourth quarter, from $177m, or 54
cents per share, a year earlier.
MERCHANT bank Close Brothers yes-
terday delivered a good set of results
for its lending and money manage-
ment divisions but its market mak-
ing side continued to disappoint.
The 134 year old independent bank,
listed on the FTSE 250, grew its loan
book by boosting lending to small
businesses. It increased its assets
under management three per cent to
8.5bn for the five months ending 31
December, it said.
Its troubled securities division
Winterflood Securities continued to
be plagued by low trading volumes
currently hitting all firms in the sec-
tor. Average bargains per day were
lower versus a year earlier, while
income per bargain was broadly
The group, led by Preben
Prebenson, is expected to reveal
more details when it publishes its
interim results in March. Shares
remained flat in trading yesterday,
masking a 12 per cent climb in the
stock price since the start of the year.
Analyst Robin Savage at Canaccord
Close Brothers
weighed down
by slow market
Genuity said: This pre-close state-
ment confirms its banking division
continues to grow profitably; its secu-
rities should be seen in the context of
current market conditions; we view
Close Asset Management as immate-
rial to CBGs share price.
Close, which started life in 1878
making farm mortgage loans in the
American state of Idaho, said it grew
its current banking divisions loan
book by six per cent, up to 4.4bn, but
with a lower net interest margin than
last year.
The company said its asset manage-
ment arm would move into prof-
itability this year.
Close Brothers Group PLC
23Jan 17Jan 18Jan 21 Jan 22Jan
990 p
CHARTERED accountants are not
protected by the same rules on
client secrecy as lawyers, the UKs
highest court decided yesterday.
The Supreme Court said it could
not extend legal professional
privilege to cover tax advice given
by non-lawyers.
Prudential had claimed that the
privilege rules meant it did not
need to hand over documents to
tax inspectors back in 2004. The
papers were linked to a tax
avoidance scheme set up by PwC.
Michael Izza, head of the
Institute of Chartered Accountants
in England and Wales (ICAEW), said
he will lobby politicians to have
privilege extended to its members.
We want people to be free to seek
advice from whichever adviser is
best able to provide that advice,
irrespective of their profession, he
The court said it would be up to
parliament to alter the rules.
As parliament is well-stocked
with lawyers it has to be doubtful
whether it will bother, said law
firm CMS Cameron McKenna.
Prudential and PwC declined to
comment on the case.
Court says accountants cannot
use privilege to protect advice
THE WORLDS biggest activist
investors spent a third more
building up disclosable shareholders
last year, and used their influence
mostly to gain boardoom seats,
according to industry research.
In a year that saw FTSE firms
Xstrata, Intercontinenal Hotels and
Alliance Trust attract activist
interest, the biggest spent $12bn
(7.6bn) on disclosable stakes in
2012, from less than
$9bn in 2011.
Bulldog Investors
was the most active in
2012, according to
research by Activist Insight. It made
12 new investments and exited one.
The most common strategy is to
gain a seat at the top table, almost
always in US firms. Of the 135
investments in the research, 58 saw a
push for board representation, of
which 45 succeeded.
The strategies appear to pay
off: the figures show that
activist funds beat the MSCI
World Index by 5.54
percentage points in the nine
months to the end of
Activist investors spend $12bn
and push for change on boards
Philip Goldstein of
Bulldog Investors
BIDDING for the UKs 4G mobile air-
waves kicked off yesterday, with com-
munications watchdog Ofcom
hosting an auction that is expected to
hand George Osborne a multi-billion
pound windfall.
Seven parties are now vying for a
slice of spectrum that will enable
them to deliver the next generation of
mobile internet, promising speeds
around 10 times faster than current
3G connections.
Ofcom chief executive Ed Richards
said the auction is a very significant
milestone for the UKs communica-
tions sector. The bidding is expected
to take several weeks before winners
are announced, with 4G set to go live
in late spring or early summer.
The UKs four mobile operators
O2, Vodafone, EE and Three
are expected to snap up most of
the spectrum available, while
the three other bidders BT,
Hong Kongs PCCW, and MLL
will be looking to buy less desir-
able parts of the airwaves to
improve their wireless
broadband offerings.
4G bidding war
starts as Ofcom
opens auction
The auction follows years of attacks
and legal threats between the regula-
tor and the telecoms firms, which
came to a head in the summer when
Ofcom controversially allowed EE to
use its current spectrum to deliver 4G,
giving the company a six-month head-
start on its rivals.
EE has heavily marketed its 4G serv-
ice since its launch, but consumers
have criticised the price and data lim-
its imposed on users. EE reduced some
prices this week in response.
The auction takes place over several
rounds, with many different combina-
tions of lots on offer at a fixed price.
The price of a lot is then raised if there
is more than one party prepared to
meet the previous cost, until there is
only one bidder left. The auction has
been specially designed to extract
maximum value for the Treasury.
George Osborne has pencilled in
3.5bn, although recent auctions
in Ireland and the Netherlands
have beaten expectations.
SOFTWARE maker Sage said yester-
day that it had continued to be
affected by tough trading in Europe.
The company said that conditions
in the UK and Ireland had improved
in recent months, but that trading
since October had been in line
with the previous financial year, in
which Sages growth slowed to two
per cent.
Sage, the only software firm in the
FTSE 100, is best known for its pay-
roll software, Sage Pay, which it said
saw strong growth in the period.
Economic conditions for our cus-
tomers are challenging across our
Software group Sage highlights
continuing European troubles
markets and we remain particular-
ly watchful of the uncertain mar-
ket environment in mainland
Europe, chief executive Guy
Berruyer said.
Despite Sages troubles in Europe,
Sage has performed relatively steadi-
ly, with growth in North America,
South Africa and Brazil impressing.
In fairness the iffy mainland
European operational backdrop is
commented on by other vendors so
we do not see Sage losing market
share it just needs to grind
through the conditions, Panmure
Gordons George OConnor said.
Shares in the company fell just
over two per cent yesterday.
Sages French chief executive Guy Berruyer has been at the FTSE 100 firm since 1997
Osborne expects the
auction to raise 3.5bn
GERMAN industrial bellwether
Siemens yesterday said it would
stick with its focus on cost cuts as
a weak global economy saps
demand for factory equipment.
The engineering group, which
makes products ranging from fast
trains and gas turbines to hearing
aids, reported a three per cent fall
in new orders to 19.1bn (16m)
for its financial first quarter.
Profit fell 12 per cent to 1.2bn,
partly due to a 115m writedown
on its solar power business.
Siemens to cut
as profit drops
SWISS pharmaceuticals group
Novartis said its long-standing
chairman and former chief executive
would step down next month.
Daniel Vasella, who has served as
Novartis chief executive and
chairman for 17 years, said he would
not stand for re-election to the board
of directors.
Novartis, which said results will
be hit this year by the loss of a
crucial patent, expects sales to grow
in the mid-single digits from 2014
once it has absorbed the full impact
of competition from cheaper drugs.
Novartis boss
to step down
Got A Story? Email
Anthony Thomson
chaired the bank
until Hill took the
top job last month
MOST ad campaigns about fun
firms or service with a smile are
just talk a half-hearted effort to
look like a generous firm which
cares for its staff.
But Metro Bank founder and
chairman Vernon Hill insists smil-
ing is a very serious business.
In fact, if staff look grumpy,
theyre not going to be staff for
much longer.
If you dont smile in your first
job interview here, that is the
end, Hill said yesterday, taking a
tough line on sad faces.
Employees are also expected to
take an unconventional approach
to the rules, with the boss
demanding they kill stupid
rules whenever they see them.
Every computer has a button
that staff press to send in any stu-
pid rule theyve found
to kill for example,
why do banks not
open on Sundays
like other high
street stores? said
the billionaire
chairman, who
founded the bank in
2010 and took the top
job at the start of this
And US-style service is not
the only unusual thing
about Metro Bank.
Hill likes to
supersize everything he sees,
too with his ambitions even
stretching to the expanding
borders of Londons sprawling
We want 200 branches in
Greater London, he told the
Westminster Business
Council event.
For me, that stretches
from Brighton to Milton
Keynes, from Reading to
A much Greater London,
it seems.
Metro Bank cracking
down on staff frowns
Following David Camerons early
morning oration, the corporate
world was aflutter yesterday with
European chatter. Eurotunnels French
boss Jacques Gounon did his best to
build bridges during a conference call
by declaring: I would be pleased to
live in London and my wife would be
happy to live in London. Flybes Jim
French, by comparison, admitted: I
can just about find enough brain power
to work in the airline industry; I dont
have enough to talk about politics.
Some news to cheer Lord Mayor of
London and celebrated pianist
Roger Gifford a report from the City of
London corporation has shown that arts
and culture across the Square Mile gave
291m of gross value added to the
capital in 2011-12, as well as providing
more than 7,000 jobs. But not to be
outdone by its more central neighbour,
Canary Wharf also chose yesterday to put
out its events programme for the next
few months, including a Valentines Tea
Dance and the 10th annual squash classic.
BEDSPACE may be tight at Davos, but every inch of space is utilised. While The
Clinic may sound like a luxury spa, its actually an asthma hospital offering
spare beds to attendees. If you fancy your own oxygen supply, this is the place.
Slater & Gordon (UK) LLP (OC371153) is authorised and regulated by the Solicitors Regulation Authority.
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Legal Comment
by Julie Morris
Julie Morris is
Employment Practice
Group Leader with
Slater & Gordon
Here she discusses the law
on the sensitive issue of
bankers' bonuses
Bankers bonuses are never far from
the news at this time of year and this
year is no exception. Goldman Sachs
apparent decision not to defer its
bonuses until the new tax year to save
their staff from the 50% tax band
shows just how sensitive banks have to
be to keep the tide of public opinion, if
not on side, then at least from crying
for blood.
It has been reported that this years
bonus pool is very significantly down
on the boom years and even lower than
last year. That must make for some un-
happy bankers on announcement day
but is there anything they can do about
it? We have seen less litigation on
bonuses in recent years, following the
2006 case of Keen v Commerzbank,
which suggested then it was harder to
challenge the level of a discretionary
The negative publicity banks and
bankers have been getting has also
contributed, making some reluctant to
put their head above the parapet. How-
ever, times are (relatively) hard and
this could be the year where we see
more litigation following the success
of the ex Dresdner employees in their
claim against Commerzbank last year.
This case is still under appeal but
the employees managed to hold the
bank to promises it made about their
bonus levels in order to persuade them
to stay. The bank had tried to break
those promises when it announced the
amount of the bonuses, seeking to re-
duce them by as much as 90%. Whilst
this case had unusual facts, it is likely
to have a more mainstream application.
The current FSA Code on bonuses
imposes some onerous restrictions on
what banks can formally do to give
staff specific guarantees on their
bonuses. We understand that some
managers are feeling the need to give
assurances about bonus pools or bonus
levels to ensure individuals stay on
side, or to keep an employee who is
threatening to leave.
Although human resources and legal
departments would not approve of
such assurances, if an employee has
sufficient evidence of bonuses being
offered, that employee can have some
confidence in pursuing a claim where
their bonus does not match up with the
promises given.
If you have similar concerns or need advice
contact Julie Morris on 0808 175 7742
THE COST of raising a child has
soared 58 per cent in the last 10
years, pushed up by the price of
childcare and education.
Figures released this morning
estimate that raising a child until
the age of 21 leaves a 222,458 hole
in parents pockets, on average
across the UK.
Insurance firm LV=, which
compiled the figures, reports that
childcare costs have shot up 60.9 per
cent to an average of 63,738 for
each child.
And outgoings on education,
which include school uniforms and
university costs, now average 72,832
per child an eye-watering 123.5 per
cent higher than in 2003.
The data refers to the 21 year
period ending December 2012.
It also revealed stark gaps in the
cost of raising offspring in various
parts of the country.
In London the average cost of
raising a child is 239,123, yet in the
north east of England it is
considerably lower, at 206,495.
If the costs associated with
bringing up children continue to
rise at the same pace, parents could
face a bill of over 350,000 in ten
years time, warned Mark Jones,
head of protection at LV=.
Cost of raising
a child jumps
to 220,000
THE BANK of England is balking at a
further expansion of its balance
sheet, with minutes of its January
meeting, released yesterday, reveal-
ing that senior officials are wary of
the effects of more quantitative
easing (QE).
The Monetary Policy Committee
(MPC) has ordered 375bn in asset
purchases to date, in a bid to stimu-
late the UKs sluggish economy. But
only one of the nine-man group
voted in favour of more QE.
While saying there remains con-
siderable further scope for more
asset purchases, the committee
warned: But there remained
uncertainty about their impact
on nominal demand, and they
might prove less effective in
boosting real output when
resources needed to be
shifted between sec-
tors and while the
banking system
was constrained.
Minutes show
Bank wary of
more easing
Economic developments in the
month prior to the meeting, held on
9 and 10 January, had been modestly
positive, the committee also said.
While these developments had not
substantially altered the balance of
risks associated with maintaining
and increasing the size of the mone-
tary stimulus, they had strengthened
the belief of some of these members
that no further asset purchases were
required at the current juncture.
For the third straight month David
Miles voted for the QE programme to
be boosted by a further 25bn in pur-
chases, yet seven of his colleagues on
the MPC supported governor Sir
Mervyn Kings recommenda-
tion to hold policy as it is.
On Tuesday night Sir
Mervyn said more QE could
happen, but advised we
should not rely solely on
general stimulus to aggregate
Confident Dubai raises $1.25bn
as it returns to the bond market
cemented its comeback to the bond
markets late on Tuesday,
comfortably selling $1.25bn (787m)
in notes as the Middle Eastern state
takes advantage of its improved
image among investors.
It launched both a $750m 10-year
Islamic bond known as a sukuk
as well as offering a more
conventional $500m 30-year bond.
Both portions of the debt sale
were substantially oversubscribed,
allowing the emirate to secure
relatively low borrowing costs.
The 10-year sukuk launched at
3.875 per cent, while the longer-
term debt will yield 5.375 per cent.
Dubai has strived to regain its
credibility among investors after it
rocked global markets in 2009 with
its $25bn restructuring request for
state entity Dubai World.
It has since successfully
refinanced or reorganised debt
while benefiting from its status as a
regional safe haven amid the Arab
Spring turmoil.
The 10-year sukuk received orders
of $11bn. Over half (52 per cent) of
the paper was placed in the Middle
East followed by 26 per cent in
Britain. By investor type, banks were
allocated 46 per cent, followed by
funds with 34 per cent. The rest was
evenly placed with private banks
and other investors.
Of the 30-year conventional deal,
investors in Britain received the
highest allocation at 38 per cent,
followed by Europe at 24 per cent
and US investors at 22 per cent.
Dubai Islamic Bank (DIB),
Emirates NBD, HSBC Holdings,
National Bank of Abu Dhabi and
Standard Chartered arranged the
sukuk, while the same banks,
minus DIB, were bookrunners on
the 30-year bond.
Spending on the UK high street
knocked by January snowstorm
BRITAINS ailing high street has
been dealt another blow by the
cold snap of weather felt in
recent weeks, data from Visa
revealed yesterday.
Spending through Visa dipped
by more than four per cent in the
last week, compared to the same
time a year ago, the company
Deterred from hitting the
shops, some consumers chose
instead to boost their online
purchases but this failed to
offset their absence on the high
While high street spending was
down by five per cent on a year-
ago basis, online spending
BY JULIAN HARRIS increased by only one per cent,
according to Visa.
The squeeze on the UK high
street has been evident this year,
with Jessops, HMV and
Blockbuster all tumbling into
administration. With tomorrows
quarter four figure [for 2012]
expected to show a contraction in
GDP, Visas data highlights the
real danger of a triple dip
recession if quarter one 2013 does
not improve, the firm said.
Heavy snowfall has previously
contributed to quarters of official
economic contraction. Yet retail
started the year reasonably well,
Visa added spending on its cards
was unchanged in the first week
and up slightly in the second week
of 2013.
Governor Sir Mervyn King voted
to stick with the current policy
HOUSE prices in the US shot up by
5.6 per cent in the year to
November, according to a widely-
observed survey released yesterday.
Prices of American homes
climbed 0.6 per cent in November,
compared to the previous month,
according to the Federal Housing
Finance Agency (FHFA).
The FHFA compiles data from
new mortgages owned or
guaranteed by US home loan giants
Fannie Mae or Freddie Mac, to
calculate its monthly figures.
While the numbers appear to
bode well for a recovery in the US
housing market, tight supply is
believed to be one factor behind
House prices in US climb 5.6pc
in the 12 months to November
the growing prices.
The National Association of
Realtors said on Tuesday that US
existing home sales dropped one
per cent last month to a seasonally
adjusted annual rate of 4.94m
Michael Gapen of Barclays
Capital said yesterday that he
expects prices to continue trending
upwards. The improvements in
the FHFA index are very much in
line with what we have seen in
other home price indices recently
and point toward further
momentum in US house prices
heading into year-end, Gapen
We look for this momentum to
continue into 2013.

239,123 237,233
58% COMPARED TO 10 YEARS AGO 222,458
302 per year
And for every child at...
106,428 195,745
UK Average
PEOPLE are cutting down the level
of debt they take into their
retirements, data from Prudential
showed yesterday yet nearly one
in five still have debts when they
leave the workplace.
One in five men enter
retirement with debt, the firms
research showed, compared to 16
per cent of women.
The amounts owed by these
indebted retirees is falling, it
The average owed by men with
debts fell from 45,300 a year ago
to 33,800 in this survey, while for
Britons reduce levels of debt
being taken into retirement
women with debts it fell from
29,400 to 28,100.
Average monthly debt
repayments for this demographic
thus fell to 215, from 257.
The fall in average debt owed
by this years retirees is a welcome
sign that people are paying off
some of the money they owe
before they stop working, said
Vince Smith-Hughes, Prudentials
retirement income expert.
The region with the highest
proportion of people entering
retirement with debt is Wales,
with 26 per cent. In London and
the south east exactly one fifth of
people enter retirement with debt. 18 per cent of people still retire with debts
Big Yellow raises 37m in placing
nBig Yellow said yesterday it had
successfully sold 10m new shares as
part of a fundraising to expand its
self-storage sites, pay down debts and
give bigger dividends to shareholders.
JP Morgan led the placing for Big
Yellow, raising 37m through the
offering to existing shareholders and
new institutional investors. Members
of the board, including chairman
Nicholas Vetch, said they intended to
invest up to 320,000 in the placing.
Britvic plots Fruit Shoot growth
nBritvic yesterday posted a 4.8 per
cent rise in first quarter revenue and
said it would accelerate distribution of
its troubled Fruit Shoot drink in the US
and also launch it in Spain this year.
The drinks company whose profits last
year were hit by a costly recall of the
childrens drink over faulty caps, did
however warn that its second quarter
had started more slowly due to a
challenging economic and trading
Finsbury Food sales edge higher
nFinsbury Food Group, the cake and
gluten free bread manufacturer, said
revenues in the first half of the year
rose 1.3 per cent to 103m, in line with
management expectations. The
companys cake business grew two
per cent to 1.1m. However Lightbody
Europe, the Groups 50 per cent
owned joint venture business, was hit
by a 17 per cent drop in sales, which
Finsbury blamed on the strength of
the pound against the euro.
REGIONAL airline Flybe is cutting 300
jobs as part of its plan to stem losses by
saving 35m a year.
The carrier, which has been hit hard
by falling profitability on its short-
haul flights, said 20 per cent of its
management will be cut, while execu-
tive directors are forfeiting one
months wages this year as part of its
bid to turn around the business.
One in ten UK staff are expected to
lose their jobs once talks with workers
and unions are complete. Flybe said it
currently loses 1.30 per seat, which it
hopes to improve to breakeven next
year and eventually to a 3 per seat
profit over the next three to five years.
It will spend 10m to 12m on its
restructuring this year, and outsource
its call centre, ground handling and
possibly its maintenance work to save
35m a year by 2014-15.
The Exeter-based airline will also
beef up its European contract flying
unit, though it said the UK will
remain the engine room of the busi-
ness. It will decide whether to alter its
routes later in the year.
Chief financial officer Andrew
Flybe axes jobs
and cuts costs
to stem losses
Knuckey blamed some of the airlines
problems on the UKs air passenger
duty (APD), levied on customers either
taking off or arriving in the country.
Im not saying every challenge this
airline faces is down to the govern-
ment but 75 per cent of our passen-
gers are domestic passengers, and
these passengers pay tax both ways.
Chief executive Jim French suggested
employees could write to the govern-
ment on the matter, and believes APD
could be cut at regional airports by
charging more in London.
The airline estimates that 18 per cent
of its UK ticket revenues is eaten up by
APD, or 68m this year, compared to
around six per cent at rival carriers.
Flybe Group PLC
23Jan 17Jan 18Jan 21 Jan 22Jan
52 p
EUROTUNNEL hopes that Britons
will continue to use the Channel
Tunnel while the UK reassesses its
relationship with the Continent,
after the firm posted record
revenues for 2012.
I would recommend that Great
Britain remains in Europe, said
chief executive Jacques Gounon,
who thinks the vast majority of his
customers support Britains place
in the EU.
Tunnel traffic is 75 to 80 per
cent related to the UK economy.
When I see in London the cranes
and the restaurants that are full,
Record revenues for Channel
Tunnel as freight delivers gains
BY MARION DAKERS even if I see staff reductions in the
City, Im still impressed, he said.
Revenues for the tunnel operator
rose 14 per cent to 993.1m
(833.9m) last year.
This was helped by a 28 per cent
surge in turnover to 209.5m at
Europorte, the groups freight arm.
Truck shuttle traffic rose 16 per
cent to 1.46m vehicles in 2012,
which the firm said made it a
world leader in piggy back
Car traffic rose seven per cent to
2.4m as tourists drove in to see the
Queens Jubilee and the Olympics,
while the Eurostar carried 9.9m
passengers in 2012.
If its online...
If its afecting your reputation..
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you are in control of how you, or your business is perceived online.
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Eurotunnel benefited from Olympic tourists and athletes travelling to London
Lloyds Commercial Banking
Anthony Williams has been
appointed head of consumer
services and entrepreneurs at
Lloyds. He joins from Westhouse
Securities, the advisory firm.
Williams has over 25 years
experience in banking, and has
also held roles at ABN Amro/RBS,
most recently as head of
consumer sector advisory.
Altius Associates
Joachim Suter has been appointed partner in the private
equity and asset management businesss Europe, Middle
East and Africa investor relations team. He joins from
Macquarie Infrastructure and Real Assets, where he was
senior vice president for private placement. Suter has also
held roles at PIMCO Europe, Credit Suisse and UBS Asset
Baker Tilly
Paul Merris has been appointed financial reporting
advisory partner at the business services firm. He
specialises in international finance reporting standards and
UK accountancy practices, and has previously held roles at
both BDO and KPMG.
Valence Group
The investment banking boutique has appointed Ian
George as managing director. He has over 18 years
experience as a mergers and acquisitions investment
banker, and most recently worked at EPIC Private Equity.
George has also held senior roles at both Nomura and Bear
KNG Securities
The fixed income specialist has appointed Derrick Lockley
and Gwenael Fort to its convertible bonds team. Lockley
joins from Salomon Brothers/Citigroup Global Markets,
where he was most recently managing director of
European convertible bonds. Fort joins from
Commerzbank, and has also held senior roles at Morgan
Stanley and Merrill Lynch.
JLT Employee Solutions
Margaret Snowdon has been appointed as an executive in
the employee benefit providers trustee solutions business.
She is currently governor of the Pensions Policy Institute,
and chair of the Pensions Administration Standards
Association. Snowdon is a former vice president of the
Pensions Management Institute.
Insolvency Practitioners Association
Mark Sands, head of personal insolvency at RSM Tenon, has
been appointed deputy vice president of the membership
body for licensed insolvency practitioners. Sands will
become president of the association in 2015-16. He
specialises in personal insolvency, professional practices
and investigating fraud transactions.
+44 (0)20 7092 0053
US rises again
as Google and
IBM lift mood
HE S&P 500 rose for a sixth day
yesterday after stronger-than-
expected profits from IBM and
Google but the rally could be
halted as Apples after-hours miss
send its shares lower.
The S&P was just 4.7 per cent from
its all-time closing high as IBMs and
Googles earnings, released after
Tuesdays close, followed on the heels
of stronger US economic data.
But Apple, still the largest US pub-
licly traded company, fell more than 4
per cent in extended trading after
sales of its flagship iPhone came in
below analyst targets and quarterly
revenue slightly missed Wall Street
Declining issues beat advancers in
both the NYSE and Nasdaq during
regular market hours, in a sign the
markets rally may be overstretched.
The broad Russell 2000 index closed
the day down 0.3 per cent after earlier
hitting and intraday historic high just
below 900 points.
Shares in IBM, the worlds largest
technology services company,
climbed 4.4 per cent during regular
market hours to $204.72, providing
just about all of the Dows 67-point
Also helping the tech sector was a
5.5 per cent jump in Google to
$741.50. The Internet search company
reported its core business outpaced
expectations and revenue was higher
than expected. The S&P technology
sector rose 1.2 per cent.
The Dow Jones industrial average
rose 66.96 points or 0.49 per cent, to
13,779.17, the S&P 500 gained 2.22
points or 0.15 per cent, to 1,494.78,
and the Nasdaq Composite added
10.49 points or 0.33 per cent, to
The benchmark S&P 500 is a mere
0.35 per cent away from hitting 1,500,
a level not seen since12 December,
Netflix shares soared 32 per cent,
above $136, after the video subscrip-
tion service said it added subscribers
in the United States and abroad and
posted a quarterly profit.
LED maker Cree jumped 22 per cent
to $40.85 after it forecast a higher-
than-expected third-quarter profit,
and reported results above analysts'
Upscale leather goods maker Coach
plunged 16.4 per cent to $50.75 after
reporting sales that missed expecta-
Clearing a market hurdle, the US
House of Representatives passed a
Republican-led plan to extend the
countrys borrowing authority until
mid May. This delays a confrontation
in Congress similar to one in 2011,
which generated a stalemate that trig-
gered the first-ever US debt rating
Thomson Reuters data through
Wednesday showed that of the 99 S&P
500 companies that have reported
earnings so far, 67.7 per cent have
topped expectations, above the 65
per cent average beat over the past
four quarters.
RITAINS FTSE 100 share index hit
the 6,200 level for the first time
since May 2008 yesterday after
Unilever got the UK earnings
season off to an encouraging start,
sending its stock to a record high.
Shares of the Anglo-Dutch consumer
goods company rose 3.1 per cent to top
2,500p for the first time ever on strong
turnover after Unilever reported underly-
ing sales growth of 6.9 per cent for 2012.
It beat forecasts for 6.5 per cent growth,
propelled by a double-digit sales expansion
in emerging markets.
Shore Capital analyst Darren Shirley reit-
erated his buy rating after the results,
saying despite the shares strength they
were still worth invesing in.
Unilevers investment potential remains
in its infancy with ongoing sales outperfor-
mance to be driven by the structural
advantage of its more than 55 per cent
emerging market sales exposure and the
systematic implementation of the com-
pass which is now embedded within the
groups culture, and with sustained mar-
gin expansion to come from the ongoing
costs saving programme (+1bn per
annum) and the greater rigour and focus
being applied to gross margin expansion
across all areas of the business, supported
by the materially enhanced IT capability,
he added.
The FTSE 100 saw a late surge that briefly
took it above the psychologically signifi-
cant 6,200 level. It closed up 18.47 points,
or 0.3 per cent, at 6,197.64 with Unilever
accounting for 3.5 points of the index gain.
The FTSE has now hit a fresh 4-1/2 year
high in nine of the past 11 sessions.
As we are now holding above some key
levels on the FTSE 100, namely 6,105 and
6,150, we see continual upside from the
market from here, Atif Latif, director of
trading at Guardian Stockbrokers, said.
Earnings have once again beaten expec-
tations and forward looking estimates
remain at elevated levels alongside better
economic data. From experience, we do
expect this uptrend to remain intact over
the short term and break above some
recent highs.
Despite the strength in markets, IG ana-
lyst Brenda Kelly cautioned that it was
unlikely to continue.
The jury is out on the effect of another
postponement in the US fiscal cliff deba-
cle. With markets looking significantly
overbought, it may provide the climate for
a market correction, she said.
Leading the late surge was Tullow Oil. It
rose 3.5 per cent, overtaking Unilever as
the top index riser, as rumours circulated
that drilling at a key well in Kenya which
the company part owns may have been suc-
cessful, with official results due shortly.
Tullow has a 50 per cent share of the
Kenyan Paipai prospect, in partnership
with UK mid-cap Afren and Canadas
Africa Oil, who hold 20 and 30 per cent
stakes respectively. Afren closed 9.2 per
cent higher. The reason [for the price
moves] is market rumours that drilling
results on the Kenyan Paipai prospect are
coming, a trader said.
Tullow shares were also supported by
news that Uganda, where the company
has a significant presence, is to auction 13
more blocks for oil and gas exploration.
In all, the energy sector including oil and
gas firms added 9.3 points to the FTSE 100
index, while the FT350 Oil and Gas firms
index hit a three-month high.
In Europe, the FTSEurofirst 300 index of
top European shares closed 0.2 per cent
higher at 1,167.65 points, just a few points
below a peak of 1,170.29 points hit two
weeks ago, a level not seen since early
2011. However, the Eurozones blue chip
Euro STOXX 50 index fell 0.3 per cent to
2,708.28 points, dragged down by a fall in
financial shares after lofty gains so far
this year.
Unilever and Tullow Oil help drive
FTSE briefly over key 6,200 level
Barclays PLC
17Jan 18Jan 21Jan 22Jan 23Jan
p 302
23 Jan
Investec upgraded the bank yesterday on the back of new investment
bank job cuts. Although the market knew some staff were being
trimmed, the scale took the analysts by surprise. Consensus still
appears to underestimate the material benefit that will flow through the
Barcap cost line as headcount and pay are rebased to the benefit of the
shareholder. Buy, wrote Ian Gordon, revising its target price to 320p.
23Jan 17Jan 18Jan 21Jan 22Jan
23 Jan
To appear in CITYMOVES please email your career updates and pictures to
in association with
Faroe Petroleum PLC
17Jan 18Jan 21Jan 22Jan 23Jan
p 144
23 Jan
Cannacord upgrades Faroe Petroleum to buy from hold and raises
its target price to 190p per share from 170p. Says that it expects Faroes
remaining five significant exploration wells to provide solid cashflow
and that help to offer a convincing investment case for Faroe.
Cannacord also believes that Faroes programme for this year looks
strong, particularly towards the second half.
Fresnillo PLC
17Jan 18Jan 21Jan 22Jan 23Jan
p 1,800
23 Jan
UBS has cut its target price for precious metals miner Fresnillo from
2,100p to 2,000p and kept its neutral rating on the stock following a
mixed fourth-quarter production report yesterday. Going forward, UBS
said that the construction of a leaching plant at Herradura which
remains on track for the third quarter should increase annual gold
production, along with the construction of the San Julian mine.
ERE doing the Euro
hokey cokey: in, out, in
out, shake it all about.
We were out, were
now in, we might be
out again, but in the meantime
we are certainly shaking it about.
Indeed, the reaction from other
governments is that the UK is
shaking things up far too much.
Like everyone under the age of 55,
I have never been able to vote on
the UKs relationship with the EU,
and am glad I now will. But we
are certainly entering uncharted
territory. Only Greenland has so
far left the European Union, after
a row over fish. But in this as in
so many other things Greenland
holds few lessons for us.
AVID Camerons Europe
speech united the
Conservative party. But it also
created two enormous
challenges: one for Cameron
himself and one for Ed Miliband.
In 2009, with the Lisbon Treaty rati-
fied, Cameron and William Hague
decided it would be absurd to have a ret-
rospective referendum. They
announced a new policy, including a
sovereignty bill, a referendum lock, and
the repatriation of key powers. This gar-
nered reasonable mainstream
Eurosceptic support. But they also
made the terrible error of indicating
that achieving significant repatriation
would be a low priority compared with
addressing the economy and public
service reform. They thought the way to
a quiet life on Europe was to talk about
it as little as possible.
They were wrong. By refusing to
engage on Europe and especially by
agreeing to a coalition with the Lib
Dems that ruled out renegotiation
Cameron and Hague lost the confi-
dence of their party. MPs began to rebel
more and more on European questions,
Few Tories will be
upset by this exit-or-
renegotiate referendum
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.

Conservative unity on Europe will
break open deep Labour fractures
culminating in 81 defying the whip to
vote in favour of an EU referendum.
And with a spirit of rebellion in place,
MPs started grumbling about other
issues House of Lords reform, the
deficit reduction strategy, and health
reforms. It was not talking about the
EU that created splits in the party.
By contrast, with the leadership now
committed to a renegotiation-and-refer-
endum strategy (and MPs cant fail to
note that Cameron has promised a ref-
erendum even if he leads another coali-
tion after 2015), Conservative MPs will
rally around, allowing focus and disci-
pline on other issues the economy,
education reform, welfare reform and
so on. Get-outers have long argued for
an in-out referendum. But Cameron is
now offering more than that. In his ref-
erendum, there will be no in option,
where in means the status quo. His
will be a renegotiation-versus-leave ref-
erendum. Almost no-one in the
Conservative Party will be unhappy
with that.
The big challenge will come if
Cameron wins in 2015. Then he has to
carry his promise through. It will be a
big ask to achieve a sufficiently signifi-
cant repatriation that Conservatives
can agree to accept. The chances are
that a large body perhaps half to two
thirds will consider a modest repatria-
tion a failure that should entail a no
vote in the referendum. If Cameron
agrees, all well and good. But if he feels
he has to back whatever deal he
achieves, most of his party may split
against him.
But thats a challenge for another day.
From now until 2015, much the bigger
challenge and much the bigger threat
of splits lies with Labour. Miliband has
said that Labour wants to repatriate
powers (bizarrely including state aid,
the repatriation of which would consti-
tute the end of the Single Market). But
yesterday he appeared to rule out a ref-
erendum. Most serious Labour com-
mentators have urged or predicted that
Labour must enter 2015 promising
some form of referendum just as in
1997 it promised a public vote on the
euro to park the issue and focus on
other things.
Labour is not an instinctively pro-EU
party. It does not attract activists
because of its EU policies. Supporters
are interested in the NHS, the unem-
ployed, the poor, or equality issues. Its
members will have little appetite for
standing against public opinion on the
issue, and most of the public has want-
ed a referendum for years.
Indeed, thats also true of Labour vot-
ers. Around 60 per cent of them want a
referendum, according to YouGov.
Labour voters are highly ambivalent
even about the benefits of EU member-
ship 41 per cent think leaving would
be bad for jobs; 41 per cent think it
would be good or make no difference.
As austerity and unemployment contin-
ue across the Eurozone, how long will a
pro-EU stance, originally adopted to cre-
ate political difference from Labours
deep EU splits of the 1970s and early
1980s, be sustainable?
Miliband must surely U-turn and
offer a referendum. But what of Nick
Clegg? Does anyone care? The Lib Dems
cant exit the coalition without self-
immolating, and if theres a hung
Parliament in 2015 they will go with
Labour anyway. Theyll match everyone
elses referendum pledges eventually.
From now until 2015, Labour will
have the problem. It must promise a ref-
erendum, but likely cannot promise
substantial renegotiation. So its referen-
dum would probably result in the UK
leaving the EU. As Cameron argued, the
true Europhile position from here is
the one in which we renegotiate. A slim
chance of success, but worth a try.
Andrew Lilico is chairman of Europe
Economics, and a columnist for
It is easy to understand the
British publics anxiety over the
EU. Its reach into our daily lives
has increased. It has problems, not
least with the Eurozone. It comes
up with policies that are clearly
detrimental to the economy, such
as the recently announced
financial transaction tax. This is
basically a tax on consumers but
will thankfully only apply to the
countries who opt in.
But despite all this, there is a
reason why business groups,
including the British Bankers
Association, were queuing up
yesterday to stress the importance
of the UKs membership of the
Single Market. The tearing down
of trade barriers, and the creation
of a (more) level playing field
across a market bigger than the
US, has helped boost exports and
inward investment. The UK and
London has been a particular
winner from this.
The increasingly-integrated
single market in financial
services has enabled UK financial
service companies to win
business across the EU,
consolidating Londons position
as Europes financial centre. It
has created a far more integrated
market in capital, with surpluses
in saver countries, like Belgium,
helping fund investment in
countries such as the UK to the
benefit of both savers and
It has meant that global
companies can have their
European headquarters (and the
vast bulk of their operations) in
London, and simply passport in
their services across the EU via
what are essentially sales offices.
If Britain lost its access to the
Single Market, it would almost
certainly lose many of those
international banks.
It is not just important that the
UK is in the Single Market, but
also that it can influence the
rules that the market operates by.
Roughly 80 per cent of financial
services legislation comes from
the EU, and it is vital to UK
financial services companies that
their government is sitting
around the table helping write
the rules.
As we plunge into a prolonged
national debate about the pros
and cons of EU membership, we
must ensure that anger about the
downsides doesnt blind us to the
Anthony Browne is chief executive of
the British Bankers Association.
European Union anxieties dont demolish the case for a level playing field
In association with
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EU negotiation
[Re: Camerons EU balancing act makes
treaty renegotiation unavoidable,
This article overwhelms with its lack of
ambition. It argues that EU partners will let
us reform the terms of our membership, but
only if we stick to those reforms they
already agree with. What of the
membership requirements they want to
keep or extend? Europe-wide justice
policies are pursued with enthusiasm.
Employment regulations are happily taken
up by social democratic European
governments. Europe wont allow Britain to
put these issues on the table because it
considers them integral to a level playing
field inside the Single Market.
As the author says, the whole referendum
issue is fraught with uncertainty. First, Ed
Miliband says he wont hold a referendum.
But will he risk the clear public support for a
vote undermining his poll ratings? Secondly,
will David Cameron manage to achieve a
significant new deal? Its possible that he
wont and, if hes still Prime Minister after
2015, he may be unable to support either
side of the vote. Finally, will the public have
lost patience with the issue by the time a
referendum is held? The experience of
Britains last referendum over the
alternative vote suggests enthusiasm is
followed by lackluster turnout and fear of
change. Will the decision be accepted if too
few were involved in making it?
HE announcement by
Michael Gove that the
government is planning to
reform A-Levels in England
will be broadly welcomed.
Many syllabuses and exams are
completely inadequate. They do
not provide the preparation for
university that the brightest
students deserve, and are justifiably
criticised by employers for lack of
Its also right for the government to
look to top universities to shape new
qualifications. But there are reasons
for concern. Goves reforms are
inspired by a faith that government
can set a single framework that will
deliver for all. While qualifications
should be more stringent, reform
should also be realistic.
In September last year, policymak-
ers framed a consultation on GCSE
reform. The most important fea-
tures that all should sit a single
exam, that there should be a single
qualification for each subject, and
that awarding powers should be
bestowed on a franchise basis have
beencriticised for overthrowing the
very objective they set out to achieve.
In attempting to give better oppor-
tunities for all, creating uniform
exams is somewhat counterproduc-
tive. It ignores the fact that educa-
tional opportunity is largely specific
to individual aptitude. Students need
different opportunities, which
means diverse qualifications across a
wide range of subjects.
In the governments proposals for
reforming A-Levels, we see signs of
the same self-defeating centralist
approach. Were told that our top
universities are to have a shaping
influence over content and format,
and yet the government has already
decided against modular assessment.
Evidence shows that modular
exams have a motivational effect for
Will other EU countries block any attempt
by the UK to renegotiate its membership?
David Cameron seems to have made it his mission to frustrate
other EU countries. This means his plea for renegotiation will be
(largely) rebuffed. What has Cameron done to upset the others?
First, he took the Conservatives out of the centre-right group in
the European Parliament. Then he threatened to veto the
Eurozones fiscal compact. He has crossed swords with the French
over tax rates and the European budget. You may agree with
these decisions, but they have worn Camerons political capital
away and isolated Britain. The others may give Britain some small
reforms, like the abolition of EU restrictions on working hours.
But they wouldnt see any advantage to full scale renegotiation
every state might then try to repatriate things they were unhappy
with, unravelling the situation entirely. Not to mention, it would
fail to satisfy the right of his own party.
John Springford is research fellow at the Centre for European Reform.
John Springford
Chris Howarth
Angela Merkel, the EUs key player, has said she will talk
intensively with the UK to find fair compromises. She will also
find areas of consensus: a reformed budget, less regulation and a
more dynamic economy. Germany has good reasons to help. The
UK is a good partner, representing 15 per cent of the Single
Market, 14bn (11.8bn) of the EU budget, and is a destination for
19.4 per cent of EU exports. The UKs EU trade deficit also remains
important as the continent looks for growth. The UK is vital for
the EU politically; without it, the liberal bloc would lose its ability
to challenge the protectionist south. The UK is also one of only
two EU global powers. Lastly, nearly all the proposals for
Eurozone integration require treaty changes. If others propose to
change the way the EU operates, the UK has the ability and the
right to put forward its vision.
Chris Howarth is senior political analyst at Open Europe.
isnt the route to
rigorous A-Levels
goal-oriented learners (often boys),
focusing minds from the outset.
They also ensure that those who do
not achieve pass-level competency
first time are forced go back and
learn it again.
And though the linear approach is
preferred by Russell Group universi-
ties (those taking the lead in advising
on the rigour of exam boards pro-
posals), manyother high-quality uni-
versities still structure their courses
along modular lines. How will this
one-size-fits-all approach to reform
serve students preparing for entry to
non-Russell Group universities, or to
overseas (notably US) institutions,
where modular learning is the
norm? And if the modular approach
is inferior, why has it served so well
(and for so long) in exams regulating
entry to the professions?
Clearly the intention is for the A-
Level to perform its traditional sort-
ing function more effectively. But
the government cant provide ade-
quate challenges to the most able,
while offering equal opportunity
through access to the same qualifica-
tions, to all students at the same
time. Gove would do better to leave
the A-Level alone, open up the mar-
ket so that students are offered a
wider range of qualifications, and
challenge Russell Group universities
to commission the boards directly or
better still to design qualifica-
tions for themselves.
James Croft is director of the Centre for
Market Reform of Education and a fellow
of the Institute of Economic Affairs.
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From now, the EU question no longer hinges
on what Tory MPs think. Its about what the
people decide in an in-out vote. Historic.
Labour MEPs have created a headache for Ed
Miliband. Six months ago they blocked an
EU vote in the Shadow Cabinet.
Were back in the 1970s with a vengeance
reconsidering our relationship with Europe.
The rock music was so much better then.
We voted to be part of a trade bloc and
landed in a federal Europe like going on a
date and discovering an arranged marriage.
LETTERSto the editor
E: | Comment: | @cityamforum
Charterholders go on to work in a range of professions
CFA charter has won converts
beyond investment analysis
agers, and must therefore master the
same level of detail.
But theres also pressure from
clients. Tim Rotherham of Hanover
Search Group says that the growing
sophistication of customers is influ-
encing the need for the broad swathe
of employees to be CFA accredited.
The maturing of the pensions market
has meant pension schemes are bring-
ing in investment specialists. Sales
teams are therefore having to upskill.
Outside client services, the CFA can
also help staff to better understand
their role. Tina Gould of research firm
Morningstar says that employees from
all areas of her business are encour-
aged to further their industry knowl-
edge. We have a number of colleagues
in data analysis, for example, who find
that the CFA programme adds a fur-
ther level of context to their work.
This is not to say that the CFA is for
everyone the programme has its lim-
itations. Its curriculum is not as broad
as an MBA, for example. An MBA is
also arguably more practical, though
it does not cover the investment
industry with the same level of depth.
Further, although clients may be
comforted by an industry credential,
they are unlikely to know exactly
what it means. Its usefulness in client-
facing roles is still less significant
than the ability to build trust and rela-
Completing the course also requires
a heavy commitment, typically three
to five years of study, and many never
finish. While the CFA programme can
certainly widen your horizons beyond
your specific role, its not to be under-
taken lightly.
HE Chartered Financial Analyst
(CFA) charter is widely
considered to be the professional
credential of choice for the
investment industry. Its course is
designed to provide the full breadth
of knowledge necessary to
understand all the major investment
products, alongside instruction in
financial reporting, corporate
governance and economics. All this is
underpinned by a grounding in
professional ethics.
Given the diversity of its curriculum,
its unsurprising that CFA charter-
holders are found in a wide range of
positions. While the course is primari-
ly focused on training investment ana-
lysts and managers, developments in
the way financial products are market-
ed and sold have contributed to an
increase in demand from non-invest-
ment staff.
Richard Ker, head of investment
management at Odgers Berndtson,
says that this demand is primarily
concentrated in the more technically
demanding, client-facing positions.
And data from the CFA Institute shows
that 5 per cent of UK charterholders
now work in sales and marketing.
Although dwarfed by the 24 per cent
in portfolio management or the 19 per
cent in research analysis, the propor-
tion is growing.
One explanation is that new invest-
ment positions have recently appeared
notably the product executive. He or
she presents investment products to
the market on behalf of fund man-
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Employers are demanding the qualification

for a wider range of roles, says Chris Harlow
Occupations of UK
CFA charterholders
Profession Percentage
Chief executive 3.6
Consultant 6.1
Portfolio Manager 24.5
Relationship Manager 5.1
Research Analyst 19.3
Risk Manager 5.9
Other 35.5
XX 23
KATE LANDER, Northern Trust JUSTIN KEW, Schroders
KATE Lander, senior vice
president of transition
management at Northern Trust,
originally became a CFA
charterholder in 2003 to aid her
in a previous role teaching the
programme to others. But she
credits it with subsequently
helping her find employment in
a bank working across asset
management, fixed income
securities trading, and now
transition management. Lander
has been a charterholder for 10
years, but does not feel her
training is out of date. Rather
than focusing on current
regulations, the charter arms
you with the fundamental first
principles of finance. Whoever I
am talking to, and whatever
product we are talking about, I
can go back and draw on the
knowledge I acquired on the
programme. But its a
challenging process. It is a long-
term commitment and, if you do
it just because you think it will
facilitate a step up the ladder,
you will find it difficult to
sustain motivation. However, if
you have the drive, the CFA
program is highly rewarding.
The result is yours, not your
employers, and you can display
the accreditation for the rest of
your life.
SERVAAS Houben heads up the
risk scenario generation team at
Prudential Assurance. He spent
the first four years of his career in
the Dutch life insurance industry,
before moving to Dublin and
then London. He became a
charterholder in 2010. As an
actuary, the CFA gave him an
alternative perspective on his
work. Taking the programme
did increase my stamina and my
willingness to get things done.
But the main reason I would
recommend it is that it widened
my scope on finance. Once a
charterholder, getting involved in
a member society can also add to
the professional value of being
CFA accredited. When I first
qualified, I did very little, but
then I became more active as a
member of [the UK charterholder
member society] CFA UK. I started
summarising articles for the CFA
Digest magazine and organising
events for its economic capital
special interest group. This
helped me to expand both my
outlook and my network.
Houbens top tip for parents
taking the exams is to arrange a
quiet period over the last few
days to concentrate freeing this
up will make a big difference to
the outcome.
David Shaw is a structured rates
product controller at the Royal
Bank of Canada. He qualified as
a chartered accountant in 2004,
and became a CFA charterholder
in 2010. He considers the key
benefit of taking the
programme (from a non-
investment analysts perspective)
to be the holistic view of the
financial services that it
provides. An appreciation of the
motives of different players, and
an understanding of the big
picture has been immensely
beneficial. And the benefits of
the programme can go beyond
your immediate role. You will
carry the investment skills and
analysis methods with you
throughout your career.
Completing the charter is also a
mark of quality. It is an
indication you are disciplined
enough to have stayed the
course, and have a firm grasp of
the body of knowledge. When
you become a charterholder,
attending CFA events can be a
useful way to network. Ive
attended evenings as diverse as a
talk from a successful hedge
fund manager, through to events
on the impact of changing
regulations all of which have
been thought-provoking and
thoroughly entertaining.
JUSTIN Kew is a product
executive in Schroders equity
investment team. He joined the
firm in 2012 the same year he
became a charterholder before
which he worked for five years in
various roles at JP Morgan. Kew
took the CFA charter with the
aim of gaining the knowledge
and ability to deal with a broad
range of requests from clients
and colleagues in various teams
throughout the world. The
programme has helped him
meet this target by giving him
the tools to understand the work
of his investor colleagues. The
most valuable skill I learnt from
the course was portfolio
construction. I now have a better
comprehension of what the fund
managers are doing, meaning I
am better able to communicate
the details of our products and
processes to our clients and local
offices. And the professional
credibility the charter gives you
is not limited to the letters after
your name. The programme has
equipped me with useful tools
and an improved understanding
of my day-to-day role, which will
help me add value to the team
and the business. I believe it has
already enhanced my career, and
has established me very well for
the future. And it helps to know
why you are making the
substantial time commitment,
and what you hope to gain.
Having a goal in mind makes it
more interesting and much more
Why the investment
credential is moving
fast to stay relevant
Continued educational interest is vital to getting the most from the CFA programme
HE Chartered Financial Analyst
(CFA) programme aims to
produce individuals with a good
understanding of the key
techniques, major asset classes, and
ethical and professional standards
most needed in todays investment
The course is made up of three pro-
gressive levels of study. Level I focuses
primarily on testing investment tools,
Level II on asset valuation, and Level III
on portfolio management. And the
curriculum centres around ten core
topics, including portfolio manage-
ment and wealth planning, quantita-
tive methods, and economics.
Over the last decade, and not solely
because of the financial crisis, the cur-
riculum has had to adapt significantly
to a changing investment industry.
And these changes have started com-
ing faster. In 2007, the Education
Advisory Committee of the CFA
Institute began to conduct its evalua-
tion process continuously rather than
every five years.
The past decade has particularly seen
a sharp shift in the CFA programmes
focus away from simple accounting to
a more holistic analysis of companies
financial reports. This is intended to
reflect the increasing importance of
corporate reporting standards in both
the investment industry and society as
a whole.
In addition, the weightings given to
individual asset classes in all levels of
the CFA programme have shifted to
reflect the increased use of derivatives
and alternative investments in the
industry. The increasing complexity of
investment products has also resulted
in a greater demand for non-invest-
ment professionals, like those in client
services, to be CFA accredited.
But while the ability of the CFA char-
ter to keep up with underlying move-
ments in the market is attractive,
there are still alternative credentials
on offer that deserve consideration.
The Certificate in Investment
Performance Measurement (CIPM) is a
specialist qualification for investment
professionals with a specific focus on
investment performance evaluation.
In response to the financial crisis, the
CIPM curriculum has also changed.
From 2013, for instance, candidates
will be taught new skills designed to
help them better evaluate and select
investment managers for their clients.
Opinions are mixed about the rele-
vance of the CIPM outside of perform-
ance measurement, however. Jim
Trotter, executive director at invest-
ment analysis firm MSCI, took the
CIPM programme to complement his
26 years experience in the industry.
He says that the new weightings make
it a relevant qualification for more
than just performance professionals;
many roles in investment forecasting
can benefit. But Colin Kay, head of
performance at HSBC securities servic-
es, disagrees. He says the CIPM is too
specialised to be of widespread inter-
est to those outside of the industry.
At the other end of the spectrum,
the Claritas Investment Certificate is a
graduate-level course that gives stu-
dents a much more basic grounding
in the investment industry, with mod-
ules in investment instruments, indus-
try structure, and serving client needs.
It was created in response to the grow-
ing market for investment knowledge
from people who work alongside
those in investment roles including
consultancy, legal, PR and IT profes-
But although an evolving qualifica-
tion can assist new entrants in acco-
modating themselves to the changes
facing the invesment industry, there is
still a burden on professionals them-
selves to adapt. All these qualifications
depend on an interest in continuing
education. While investment creden-
tials are a useful means of demonstrat-
ing your understanding of the new
world of investment, they cant do so
on their own.
Although the CFA charter has adapted, there are alternatives that
can demonstrate your knowledge of the industry says Chris Harlow
n Aims to teach the practical skills and knowledge required to evaluate
and communicate investment performance.
n There are five core topics, including performance measurement,
performance attribution and ethical standards.
n Exams are held twice a year in April and October, so it is possible to
complete the course in one year.
n For first-time candidates, course enrolment (including exam
registration and curriculum ebook) will cost $1,950 (1,210).
Investment company
Private client wealth management
Investment banking
Institutional investment
United States
Mainland China
United Kingdom
Hong Kong
South Africa
12,678 Other
48,981 TOTAL
n Aims to provide a foundation in investment analysis and portfolio
management, along with a degree of practical knowledge.
n To enroll in the programme, candidates must have a bachelors
degree or equivalent.
n Exams are held in June, with an additional sitting in December for
Level I students.
n Costs vary depending on what time of year candidates register, but
range between $1,080 and $1,585 (670-985).
In a world of financial risk, organizations can never be too prepared. Thats why more global
companies are relying on Certified Financial Risk Managers. As an FRM,

youll be recognized for

mastering the complexities of credit, market, and operational risks. Youll also play a critical role
in the financial well-being of banks, consultancies, corporations, and asset management firms.
If you want to be part of the solution, take the first step by earning your FRM certification. Visit
the Global Association of Risk Professionals (GARP) at Early registration for the May 2013
FRM Exam ends January 31.
7pmPremier League World
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ITV1, 8.30PM
Somerset district nurse Iona attends
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George Clarke follows their progress.
Games you shouldnt miss in 2013
THE LIFESPAN of the current crop of consoles is
almost over, with Nintendos next generation
Wii U already on shelves and Microsoft and Sony
preparing to launch an updated Xbox and
PlayStation, respectively. But there is life in the
old dogs yet, and 2013 looks set to be another
milestone year in terms of industry innovation.
From new instalments of blockbuster franchises
(I lie awake thinking about the hours I am going
to waste playing the new Grand Theft Auto), to
promising new titles (Watch Dogs, a cyberpunk
adventure in the mould of Ridley Scotts Blade
Runner, is my prediction for game of the year).
Here is our pick of six of the best, most original
upcoming games you cant afford to miss.
DEAD SPACE 3 Released 5 Feb; PS3, Xbox 360, PC
What we hope it will be:
Another terrifying instalment in the most original space
shoot-em-up on the market.
What we hope it avoids:
Becoming the first Dead Space to try to wring too much
from the corridor-crawling format.
WATCH DOGS No release date; PS3, Xbox 360
What we hope it will be:
The first open-world game to realise the potential of hacking
as a weapon; an intelligent look at the privacy debate.
What we hope it avoids:
Not living up to its incredibly ambitious premise (as it is
Ubisoft, this probably isnt going to happen).
BIOSHOCK INFINITE Released 26 March; PS3, Xbox 360
What we hope it will be:
A steampunk paradise with sinister political overtones
that builds on the combat system of the original.
What we hope it avoids:
Losing the magic of the art-deco underwater world that
housed the previous two iterations of the franchise.
GRAND THEFT AUTO V Released 5 Feb; PS3, Xbox 360, PC
What we hope it will be:
The same blend of action and wicked humour, set in an
even more richly developed city.
What we hope it avoids:
A tired re-hashing of the now-familiar GTA tropes (steal
car, shoot cop, get rich).
DEADPOOL No release date; PS3, Xbox 360
What we hope it will be:
An irreverent, over-the-top journey through the
deranged mind of one of Marvels top-selling characters.
What we hope it avoids:
Falling into the Duke Nukem quagmire of fart jokes and
misogyny; being another photo-fit superhero bore.
NI NO KUNI Released 25 Jan; PS3
What we hope it will be:
A graphically rich Japanese role playing game (RPG)
that reminds us why the genre still exists.
What we hope it avoids:
A case of style over substance where the Studio Ghibli-
designed graphics mask the repetitive gameplay.
CHELSEA midfielder Eden Hazard
was forced to apologise last night
after being sent off for kicking a ball
boy as his side crashed out of the
Capital One Cup at Swansea.
In a bizarre incident late in the
semi-final second leg, Hazards right
boot connected with the prone
teenager as he attempted to kick the
ball from his grasp. The ball boy, who
had appeared to be wasting time by
lying on top of the ball, writhed in
apparent pain and referee Chris Foy
showed Hazard the red card.
Hazard said: The boy put his
whole body onto the ball and I was
just trying to kick the ball and I
think I kicked the ball and not the
boy. I apologise. We had a quick chat
and I apologised and the boy apolo-
gised as well, and it is over. Sorry.
Chelsea manager Rafael Benitez
said Hazard and the ball boy had
apologised to each other, adding:
They know they were wrong. He
[the ball boy] was wasting time.
South Wales Police launched an
investigation after receiving com-
plaints but Swansea said the boy, 17,
would not be pursuing the matter.
Swansea manager Michael
Laudrup said: I can understand frus-
trations when you are behind, but
there are things you can never do.
Chelsea arrived knowing they
needed to overcome a two-goal first-
leg deficit to reach next months final
a feat last achieved in 1994.
Benitez dropped 50m Fernando
Torres in favour of Demba Ba, and the
January signing sparked penalty
appeals in the seventh minute when
he tumbled over Ben Davies, but Foy
waved play on.
But Swansea posed a threat on the
break, and Blues defender Cesar
Azpilicueta had to fling himself at
Wayne Routledges goal-bound
effort, before Petr Cech saved low
from Spanish striker Michu.
The closest the visitors came to
scoring was in the 21st minute,
when Gary Cahills header was
cleared from the goalmouth by
Angel Rangel, while Ba curled nar-
rowly wide early in the second half.
TENNIS world No2 Roger Federer
admits Britains Andy Murray has
blossomed into a far more
dangerous opponent as they prepare
to face off in tomorrows Australian
Open semi-finals.
Federer dropped his first sets of
the tournament in beating seventh
seed Jo-Wilfried Tsonga yesterday,
after Murray strolled past another
Frenchman, Jeremy Chardy, in
straight sets.
The Swiss maestro beat Murray in
last years Wimbledon final, but the
Scot took revenge in the London
2012 gold medal match and has
since claimed his first grand slam, at
the US Open.
He has changed his game around
a bit. Hes playing more offensive. Im
looking forward to it, said Federer,
who beat Tsonga 7-6 (7-4), 4-6, 7-6 (7-4),
3-6, 6-3.
How offensive can you play when
the ball is coming flat and hard into
the middle? You also have to know
when to back off. Hes very clever at
all these things. But I think its
especially on the return that you see
the biggest change in his game.
Murray is yet to drop a set in
Melbourne this year after sweeping
aside unseeded Chardy 6-4, 6-1, 6-2 in
less than two hours.
I think you have to trust yourself
that when youre tested, youre going
to play better tennis, he said. But
Ive done a good job so far in this
tournament. I cant be disappointed
with where my games at.
Womens favourite Serena
Williams suffered a shock quarter-
final defeat to fellow American
Sloane Stephens, 19, after enduring
back spasms. Stephens, who downed
Britains Laura Robson in round
three, beat the 15-time grand slam
winner 3-6, 7-5, 6-4 to set up a semi-
final with top seed Victoria Azarenka.
Williams, who needed treatment
in the second set, said: Im almost
relieved that its over because theres
only so much I felt I could do.
Murray worries
Federer ahead
of semi-final
ENGLAND rugby head coach Stuart
Lancaster is facing mounting injury
worries as he prepares for his first
Six Nations as favourites, after
Exeter flanker Tom Johnson was
ruled out of the entire
London Irish prop Alex
Corbisiero, who looked set to start,
and promising Gloucester fly-half
Fredie Burns are also set to miss at
least the first two matches, against
Scotland and Ireland.
Lancaster has further concerns
over Leicester centre Manu Tuilagi
and Saracens back Alex Goode,
both doubts for the Twickenham
opener in nine days time.
The absence of Johnson, who is
facing three months out after
injuring his knee in Saturdays
defeat to Leinster, deprives England
Lancaster besieged by injuries
as Johnson ruled out until April
of back-row cover when they are
already without flankers Calum
Clark and Tom Croft.
But Corbisieros knee injury,
which has kept him out since last
months famous win over New
Zealand, is likely to have greater
impact and mean Harlequins Joe
Marler reclaiming a starting place.
Alexs knee hasnt settled down.
It keeps swelling after small
amounts of exercise, Lancaster
said. Well get him rehabbed and
back playing for London Irish. That
will take him out of the first two
games minimum.
Burns is out for two or three
weeks with a knee problem, and
Lancaster said it was too early to
tell whether Tuilagis ankle injury
would clear for the Scotland game,
while Goode faces a race to recover
his fitness after overcoming
shoulder damage.
Future star Root shines brightly
amid Englands one-day gloom
NGLAND are crying out for
reinforcements in the bowling
attack, as India showed yesterday
when their five-wicket win in
Mohali wrapped up victory in the
one-day series with a match to spare.
It was a good toss for the hosts to
win as the ball nipped around early
on, and though Kevin Pietersen (76)
and Alastair Cook (76) forged a good
stand they didnt play with freedom.
The tourists did not look like
getting a competitive total until the
last 10 overs, when they added
another hundred runs to finish on
257-7, but Indias batting and
bowling proved superior.
I had doubts about Jade Dernbach
before this series and he has not
played well in India. He goes for too
many runs yesterday he finished
with figures of 1-59 off 9.3 overs
and doesnt have a stop ball.
Im disappointed Stuart Meaker
did not play and, with the fifth game
now a dead rubber, Id like to see
him and Chris Woakes tried.
Wicketkeeper Craig Kieswetter is my
other concern, and Jos Buttler did
enough in his stead yesterday to
warrant another chance.
Englands biggest positive from
the trip has undoubtedly been Joe
Root, who hit 57 not out and looks a
future England regular in all forms.
We knew his batting was good but
his bowling is more than useful.
He has a great temperament, is
adaptable and his emergence
reminds of when Eoin Morgan burst
onto the one-day scene with a bang.
Root had been pencilled in to lead
England Lions in Australia next,
rather than join up with the senior
team in New Zealand, but he looks
certain to be in this summers
Champions Trophy side so that
decision must surely change.
Andy Lloyd is a former England Test
cricketer who has also been captain and
chairman of Warwickshire.
Hazard was sent off (main) after an
altercation with the ball boy (inset)
Chelsea star
Hazard says
sorry for kick
on ball boy
Swansea win 2-0 on aggregate
Im almost relieved that its over
because there is only so much I felt that I
could do
History shows financial fair play
likely to have teeth, says expert
ONE of football finances leading
experts has voiced his surprise at
continued scepticism over the
willingness of European chiefs Uefa
to ban clubs if they break new
financial fair play (FFP) rules.
Deloittes Dan Jones believes Uefa
will see through its threat to issue a
range of sanctions against teams
whose losses exceed allowable FFP
limits, and says chairmen who think
otherwise are very, very brave.
The thing that surprises me is
people being very sceptical. Uefa
have put so much political capital
into this, Jones, partner in
Deloittes Sports Business Group,
told City A.M.
One of the arguments I hear is
that Uefa needs the clubs. I
understand that, but equally no
club is bigger than the competition.
The Champions League has thrived
without some very big clubs in the
past when the likes of Chelsea or
Man City havent made the last 16.
Liverpool havent been in it recently.
Also there is a precedent for
competitions taking a very hard line
against clubs, who you would think
were very important to them, for
financial misdemeanours. You only
have to look at Rangers [demoted
three divisions in Scotland after
going into administration]. Anyone
who thinks, Well be OK, well get
away with it is very, very brave.
Doubts have been raised over the
governing bodys ability to prevent
clubs bypassing FFP rules by
artificially increasing revenue with
sponsorship deals from related but
quasi-independent companies.
The acid test is still to come but
Uefa have been really clear on the
rules, that they are serious, and
about the range of sanctions
available, Jones added.
What they havent said is, If you
commit this offence you will get
this sanction. That is smart. That
gives them flexibility but hopefully
acts as a deterrent.
FFP places greater onus on clubs to
generate income, and Joness
warning comes as research from
Deloitte published today reveals the
worlds top 20 teams grew collective
revenues last season by 10 per cent to
4.8bn (4bn).
Real Madrid remain the richest
club in the world and last year
became the first outfit in world
sport to record revenues of more
than 500m (420m), according to
the Football Money League report.
Manchester Citys Premier League
title win propelled them into the top
10 and closer to an unchanged top
six, which includes Manchester
United, Chelsea and Arsenal.
Real and Barcelona look set to
retain their stranglehold on the top
two spots as long as La Liga clubs are
allowed to negotiate their own
broadcast deals, Jones said.
Visit or call 0843 208 1234 (option 1)
All tickets are subject to availability, terms and conditions apply.
Wednesday 30th January,
Kick-Off 8pm.
Tickets on sale now
Cheltenham confident over Trials
n HORSE RACING: Cheltenham
organisers expect Saturdays Festival
Trials meeting to go ahead despite
further snowfall. Course clerk Simon
Claisse said: We have severe frost
forecast for Thursday night, but
providing the forecast for rain on
Friday night stays in place and there is
no further snow Im optimistic about
the Saturday card going ahead.
MVila snubs QPR for Russia move
n FOOTBALL: Queens Park Rangers
have missed out on transfer target
Yann MVila after the France
midfielder signed for Russian side
Rubin Kazan for 8m. Meanwhile
manager Harry Redknapp has named
defender Clint Hill captain, with
former skipper Ryan Nelsen set to
leave to manage Toronto FC at the
start of next month.
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1 Real Madrid 512.6m
2 FC Barcelona 483m
3 Manchester United 395.9m
4 Bayern Munich 368.4m
5 CHELSEA 322.6m
6 ARSENAL 290.3
7 Manchester City 285.6m
8 AC Milan 256.9m
9 Liverpool 233.2m
10 Juventus 195.4m
11 Borussia Dortmund 189.1m
12 Internazionale 185.9m
14 Schalke 04 174.5m
15 Napoli 148.4m
16 Olympique de Marseille 135.7m
17 Olympique Lyonnais 131.9m
18 Hamburger SV 121.1m
19 AS Roma 115.9m
20 Newcastle United 115.3m
24% 78.2m
34% 99.1m
16% 90.6m
47% 73m
Source: Deloitte
WEST HAM boss Sam Allardyce last
night denied star midfielder
Mohamed Diame is on his way to
Arsenal, after watching his team
thrashed by the Gunners.
Jack Collison gave the Hammers
an early lead but Lukas Podolski
soon equalised, and four goals in 11
frenetic second-half minutes from
Olivier Giroud, Santi Cazorla and
Theo Walcott boosted Arsenals
Champions League hopes.
Diame, who has been linked to a
move from east to north London,
came on as a second-half substitute
but Allardyce denied his omission
was due to anything other than a
recent a hamstring injury.
At the moment weve had no bids
from the type of clubs that have
been speculated not an Arsenal,
not whoever else, not a Newcastle,
he said. Hes our player at the
minute and hopefully on 1 February
[after the transfer window shuts]
hell still be our player.
West Ham took the lead on 17
minutes when Collison pelted in a
half volley from 18 yards. But three
minutes later Podolski equalised
with an even more fierce shot.
Straight after the break a low
Walcott corner was turned in by
Giroud, and before an hour was up
Cazorla had flicked in a backheel
and two superb passing moves were
finished by Walcott and Giroud.
Arsenals joy at the result which
moves them a point behind Everton,
and four points off the Premier
Leagues top four was marred by
injury to West Hams Dan Potts, who
was hospitalised with concussion.
Hammers rout
edges Gunners
near top four
WEST HAM UNITED.....................1
Breakdown of revenues

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