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If the declining trend of unemployment
sustains a brief pause, or a slight blip, then
markets could transition into ‘cheering
bad news’ on the basis of maintaining
ultra-loose monetary policy as long as
inflation is largely contained.
- Ashraf Laidi
Ashraf
Laidi
James
Chen
Peter
Esho
Joshua
Raymond
coming from a one per cent gain
in the price of HSBC. But during
the day, the index hit 6,311.26, the
highest level it has reached since
May 2008.
This means the UK’s 100 largest
firms have added some 5.4 per
cent to their collective value since
markets opened on 2 January,
bringing the index from 5,969.5 to
its current level just under 6,300.
And yesterday’s currency
movements were just as marked.
Pound sterling lost 0.8 per cent
against the dollar to reach a five
month low of $1.5673. Sterling
also dived 0.7 per cent against the
euro, to €1.1643, with pounds
buying fewer euros than at any
point in the last 13 months.
Lee McDarby at Investec put this
move partially down to Mark
Carney’s speech last week, in
which the incoming Bank of
England governor said monetary
policy was not “maxed out,” and
that he was willing to consider
policy frameworks other than the
traditional inflation target. This
hints at nominal GDP level
targeting – a policy that could see
increased monetary intervention.
FTSE
28Jan 22Jan 23Jan 24Jan 25Jan
6,325
6,300
6,275
6,250
6,225
6,200
6,175
6,150
6,294.41
28 Jan
BUSINESS WITH PERSONALITY
Zombie firm
massacre as
lenders scare
TENS of thousands of firms could
close unnecessarily, taking with
them a million jobs, if banks cut
back the support they offer to zom-
bie companies, the Institute for
Turnaround (IfT) warned yesterday.
The group said that after years of
helping struggling firms banks are
running out of patience and looking
to sell on their loans.
That would enable increased bank
lending to more productive firms, as
the authorities want. But if banks
sell those firms’ debts onto investors
who are not interesting in their long-
term future, the firms could be lost.
IfT chairman Iain MacRitchie
warned a “zombie company mas-
sacre” could take place, particularly
in the troubled specialist retail and
consumer electronics sectors –
which would leave even more empty
spaces on UK high streets.
“There is every possibility that mas-
sive amounts of value will be lost in
short order, thousands of jobs will
disappear,” he wrote to IfT members.
The IfT estimates 75,000 zombie
firms struggle to pay the interest on
their debts at the moment but could
be turned around if they act fast.
That equates to 3.6 per cent of all
UK firms. But banks denied taking a
tougher line on zombies.
“Trying to return firms
to health by giving them
time to restructure or
actively getting involved
has been an effective strate-
gy – 50 per cent of those
in intensive care are
turned around,” said
Lloyds’ Stephen Pegge.
Icelandic residents voted against the deal to repay Britain and the Netherlands in a referendum in 2010
ICELAND’S government will not have
to pay back the UK for bailing out
depositors who lost money in the
country’s banks in 2008, a top court
ruled yesterday.
The move leaves the UK £2bn out of
pocket, and the Treasury is likely to
have to wait for years to get the money
back as the failed banks’ estates are
unwound.
Iceland can escape paying back the
money because the European Free
Trade Association (EFTA) court ruled
that the financial crisis was so severe
the country could disregard previous
deposit guarantee plans.
The guarantees had been drawn up
in case a single bank failed, rather
than the whole industry, the court
said, noting the very severe systemic
nature of the crisis which hit the
nation’s banks.
But MPs reacted with shock, warning
that the ruling casts doubt on the reli-
ability of the guarantee system as a
whole, undermining confidence in
the protection states give savers.
“While I am sure there will be rejoic-
ing in the streets of Reykjavik, many in
the City will be surprised and disap-
pointed by this ruling,” said Mark
Field, Conservative MP for the Cities of
London and Westminster.
“This is a worrying precedent which
throws into the air a lot of question
marks around the future of govern-
ment guarantees, with the notion of
what an exceptional crisis is.”
And Labour’s John Mann MP, a mem-
www.cityam.com FREE
ber of the influential Treasury Select
Committee, warned governments to
reconsider the whole idea of guaran-
teeing deposits in all instances.
“This ruling has huge ramifications –
this blasé attempt by all governments
to guarantee all deposits is now in
some jeopardy,” he told City A.M.
He argued consumers should bear
more of the risk if they want to seek
very high returns on savings, rather
than leaving the government to pick
up the whole tab if their bank fails.
Icelandic institution Landsbanki
went under in 2008, including its
online arm Icesave, which had 300,000
UK customers. The British government
decided to bail out depositors entirely,
rather than just up to the then limit of
£50,000 through the Financial Services
Compensation Scheme (FSCS).
The UK loaned Iceland’s Depositor
and Investor Guarantee Fund £2.25bn
and the FSCS £1.4bn, and another
£780m to cover the amount over the
usual limit. Half of that has been paid
back in the years since as the bank’s
remains are picked apart.
“We note the judgment of the EFTA
Court and will study it in detail,” said a
Treasury spokesperson.
Iceland’s government said: “It is a
considerable satisfaction that Iceland’s
defence has won the day; the EFTA
Court ruling brings to a close an
important stage in a long saga.”
WE SAMPLE TOP CHEF ANGELA HARTNETT’S CHAMPAGNE SPECIAL
BY TIM WALLACE
FTSE 100 6,294.41 +9.96 DOW M13,881.93 -14.05 NASDAQ 3,154.30 +4.59 £/$ M1.57 -0.01 £/€ M1.16 -0.01 €/$ M1.34 -0.01
BY TIM WALLACE
ICELAND LET OFF
£2BNDEBTTO UK
ISSUE 1,807 TUESDAY 29 JANUARY 2013
THIS IS NOT
AUSTERITY
Andrew Lilico in The Forum, Page 18
See Page 24
TRADING: Page 20

THE FTSE100 index rose through
the 6,300 barrier to a 56-month
high during yesterday’s trading,
just as sterling dived to a 13-
month low against the euro, and a
five-month low versus the dollar.
The index closed up 9.96
points – 0.2 per cent – at 6,294.4,
with more than half of that
BY BEN SOUTHWOOD
FTSE breaks 6,300 mark – as sterling slides to deeper lows
Certified Distribution
from 26/11/12 to 30/12/12 is 127,678
Zombie firms have been
blamed for slow growth
DEBATE: Page 19

KRUG EXTRAVAGANZA
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
MPs say coalition budgets
have been omnishambles
THE TREASURY Select Committee
(TSC) this morning slammed coali-
tion budget policy as unclear, con-
fused and generating uncertainty.
The MPs on the committee, led by
Andrew Tyrie, used the report to crit-
icise the government for turning the
Autumn Statement into a second
budget; for giving out unclear sig-
nals on plans for fuel duty; and for
leaving parliamentarians too little
time to read finance bills.
“The Autumn Statement is not, nor
should it be, a second budget,” Tyrie
said. “The case for two budgets is
weak – an additional one can create
uncertainty and carries an economic
cost.”
Overall the MPs concluded that
business activity was being stymied
by the need to respond to two big
policy announcements in the year,
rather than just one.
This was especially damaging
when highly important tax
changes – such as scrapping the pen-
cilled-in fuel duty rise – have been
juggled around and shrouded in
mystery, the MPs said.
“Recent government policy on fuel
duty has failed to provide either the
certainty or the stability that are the
hallmarks of good tax policy. The
chancellor must use the 2013 budget
to set out a clearer strategy for fuel
RBS tips UK back into bonus debate
George Osborne is braced for a new
political backlash over bank bonuses, as
state-controlled Royal Bank of Scotland
prepares to pay as much as £250m to
staff at an investment banking division
heavily implicated in the Libor-rigging
scandal. The chancellor’s discomfort has
been amplified by the fact that the bonus
round comes just as RBS prepares to
settle with US and UK regulators over the
Libor scandal with a fine expected to top
£500m. The taxpayer will effectively be
paying RBS investment bankers about
£250m in bonuses, while simultaneously
footing the bill for the bank’s abuse of
Libor over a number of years up to 2010.
Burgundy capital sells prized wines
The city of Dijon has just sold off half of its
prized municipal wine cellar to help fund
local social spending – including a bottle of
1999 Burgundy knocked down at auction for
€4,800 (£4,112.74) to a Chinese buyer. In
total, the capital of the Burgundy region
raised €151,620 from the “historic sale” of
3,500 bottles that were part of a collection
built up since the 1960s, it announced in a
statement yesterday.
Green Deal opens with warning
The government-appointed body running
the Green Deal can handle fewer than 200
applications a week. The lack of resources
behind the Green Deal Finance Company
is threatening the programme’s target to
insulate 14m homes by 2020.
1m letters to taxman left unanswered
One million letters to the taxman were
left unanswered last year, the head of
HM Revenue and Customs said
yesterday.
Minister says France is bankrupt
France’s labour minister sent the country
into a state of shock yesterday after he
described the nation as “totally
bankrupt”.
UK will pay by mobile phone in 2013
Mobile phones could hit the mainstream
as a method of making payments in
Britain next year, the boss of Vodafone
has claimed – finally helping the UK to
catch up with much of the rest of the
world.
Goldman raising $1bn from ICBC sale
Goldman Sachs is raising around $1bn
(£637m) from the sale of shares in China’s
biggest lender, Industrial & Commercial
Bank of China, two people with direct
knowledge of the matter said yesterday,
in what could be the biggest share sale in
Asia, excluding Japan, so far this year.
US Treasury fails to rein in pay
The US Treasury failed to rein in pay at
companies that received federal bailout
funds, a watchdog said yesterday.
THE GOVERNMENT will today
unveil plans to reform the
childcare system in an attempt to
reduce the financial burden on
families and help parents return to
the workplace.
Education minister Liz Truss will
announce that the number of
children allowed to be managed by
one member of nursery staff will
rise from four to six. She will also
insist that childminders are better
qualified, in attempt to push up
standards across the industry.
However more radical plans to
reform the system by offering
childcare tax breaks of up to
£2,000 – originally due to be
announced this month – have been
delayed until at least the March
Budget following a Whitehall row
over the cost of the scheme.
“It is right that the government
does everything it can to ensure
the provision delivering early
education is of the highest quality,
staff are paid better, and childcare
is affordable to parents,” Truss said
of today’s announcement.
She will also announce plans to
set up agencies who will take care
of “business practicalities” on
behalf of childminders. In addition,
rules on changeovers will be
relaxed, so parents are not obliged
to wait if another mother or father
is late to pick up their child.
Childcare reform
to help parents
back to work
Andrew Tyrie’s Treasury Select Committee hit out at coalition budget policy
2
NEWS
BY JAMES WATERSON
BY BEN SOUTHWOOD
To contact the newsdesk email news@cityam.com
T
HERE is much that the coalition
has done that is helping the
economy. Its reforms to
education and welfare will, over
time, improve the workforce’s skills
and reduce the number of people
trapped in dependency. Cutting the
top rate of tax, which kicks in in
April, and the increases to the
personal allowance, which have
helped millions of lower earners,
have both boosted incentives. But the
coalition has also made too many
mistakes that are preventing the UK
from rebounding properly. Here are
three examples, all featured in news
stories in today’s paper.
An astonishing 299 separate tax
rises – measures that have increased
revenues, including changes in
allowances, reliefs and rates – have
been announced by the coalition . No
fewer than 254 have already come
EDITOR’S
LETTER
ALLISTER HEATH
Zombie firms, tax hikes and HS2 all dragging the UK down
TUESDAY 29 JANUARY 2013
into force, with another 45 due to
kick in before May 2015. Needless to
say, the number of tax cuts have been
far smaller: 119 so far, with 109 hav-
ing already taken effect and another
10 due by the next election, according
to the TaxPayers’ Alliance.
There are two lessons: far too much
of the austerity implemented by this
government has taken the form of
higher taxes, and a government that
came to power promising to simplify
the tax system is making it ever more
complicated. The Tories used to
describe Gordon Brown as the Grim
Tinkerer when it came to the econo-
my. Yet for all their criticisms at the
time, the coalition has turned out to
be equally bad. We need a flat, drasti-
cally simpler tax system that doesn’t
double, triple or quadruple tax flows
of income – instead, with a few impor-
tant and positive exceptions, we are
getting even more social engineering
via the tax system.
The coalition’s second big error of
the day is HS2, the new high speed
railway which the government wants
to build and finance over a very long
period of time. In the same way that
there is good austerity and bad auster-
ity, there is good and bad capital
spending. I’m very much in favour of
new infrastructure projects but they
need to be the right ones. The road on
which I live has been dug up and then
struggling to pay interest on their
debts. Ultra-low rates, quantitative
easing (which, until recently at least,
had pushed down longer-term gilt
yields) and massive pressure on banks
have given them a stay of execution.
This has temporarily saved jobs – but
has also prevented bad businesses
from being purged, capital from
being reallocated to more productive
uses and is cluttering up bank bal-
ance sheets. The zombie firm phe-
nomenon is one reason why
productivity has gone into reverse.
We need supply-side tax reforms, an
enlightened market-driven infrastruc-
ture policy and – eventually – a more
rational monetary policy. Easier said
that done, I know, but a change of
course is urgently required.
repaired five times in the past three
years, mostly uselessly. Yet that
counts as capex, which we are always
supposed to love. French-style grand
projets – grandiose, politically driven
schemes whose primary purpose is to
leave a legacy for the history books –
are not the right way of picking infra-
structure projects. A much better
answer is to allow the market to lead
and to make sure that as much of the
spending as possible is financed pri-
vately. The government needs to be
the enabler: it must allow the con-
struction of railways, roads, airports
and utilities that the private sector
believes it can profitably provide. The
economic costs of HS2 would always
be greater than its benefits so it fails
that test.
Last but not least, there are 75,000
zombie firms in the economy, accord-
ing to the Institute for Turnaround,
duty over at least the medium term.”
The TSC report also registered wor-
ries about the effectiveness of the
Funding for Lending Scheme, saying
that benefits may be flowing back into
mortgages – but failing to reach small
businesses that are suffocating for lack
of credit.
And the committee took issue with
another monetary policy – the govern-
ment’s decision to transfer Bank of
England profits on quantitative easing
(QE) to the Exchequer, saying the
opaque way it was carried out harmed
the Bank’s rate-setters’ credibility and
reputation.
“The announcement of the transfer
was poorly co-ordinated,” Tyrie said.
The TSC said the Treasury and the
Bank should have made the announce-
ment with the November rate and QE
decision, instead of separately, which
suggested the government was usurp-
ing the Bank and undertaking mone-
tary policy – even though it was not.
“It is vital that the monetary policy
committee fulfils its duty to demon-
strate its independence – the way the
transfer was announced could have
had the opposite effect,” Tyrie said.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
Moody’s downgrades six banks
nMoody’s yesterday slashed the
ratings of six Canadian banks on
worries over rising consumer debt and
a housing boom. The Bank of Nova
Scotia, Caisse Centrale Desjardins and
National Bank of Canada all saw their
credit score move down one notch, as
did Toronto-Dominion Bank, Bank of
Montreal and Canadian Imperial Bank
of Commerce. The only big Canadian
bank to escape a ratings cut was Royal
Bank of Canada, the country’s largest.
Egyptian protestors defy curfew
nEgyptian protesters defied a night-
time curfew in restive towns along the
Suez Canal, attacking police stations
and ignoring emergency rule imposed
by Islamist President Mohamed Mursi to
end days of clashes that have killed at
least 52 people. At least two men died
in overnight fighting in the canal city of
Port Said in the latest outbreak of
violence unleashed last week on the eve
of the anniversary of the 2011 revolt that
brought down autocrat Hosni Mubarak.
US appeals court protects SEC
nInvestors who said they lost money
in Bernard Madoff’s fraud may not
pursue a lawsuit against the US
Securities and Exchange Commission
(SEC) for missing the swindler’s Ponzi
scheme, a federal appeals court said
yesterday. The 9th US Circuit Court of
Appeals in Pasadena, California said a
federal district judge correctly
dismissed their lawsuit seeking to
hold the SEC responsible under the
Federal Tort Claims Act.
Yahoo stocks
lifted by fourth
quarter figures
BY CITY A.M. REPORTER
DAVID Cameron yesterday raised the
ire of his own party following the pub-
lication of the second half of the HS2
railway route from London to north-
ern England.
Most of the Y-shaped railway –
which will link London to Leeds and
Manchester – will run through
Conservative-held constituencies, rais-
ing the prospect of a backbench rebel-
lion when parliament votes on the
plans before the 2015 election.
“Although I accept the need for an
additional line to relieve capacity on
the rail network, this route plunges
through rural Britain and should use
existing transport corridors,”
Lichfield MP Michael Fabricant told
the House of Commons. “It blights
the environment, homes and lives.”
Opposition to HS2 has grown within
the party since last year’s confirma-
tion that the first half of route would
run through the Chiltern Hills.
Yesterday Chesham & Amersham
MP Cheryl Gillan said the project left
thousands of people suffering “blight
and uncertainty” and called for the
Cameron faces
HS2 anger from
backbenchers
BY JAMES WATERSON
government to build the northern
phase first in order to boost the
region’s economy.
Leicestershire MP Andrew Bridgen
insisted the route would mainly bene-
fit the southeast and warned of the
effect it will have on local businesses:
“The route puts in jeopardy a potential
£450m private sector investment in
my constituency.”
But chancellor George Osborne –
whose Tatton constituency is affected
by the route – said the project must go
ahead as “Britain has not undertaken
these big projects” for too long, leav-
ing it with a creaking rail network.
Route maps published yesterday
reveal new platforms will be built next
to the existing Leeds and Manchester
Piccadilly stations, with HS2 entering
Manchester via a lengthy tunnel.
There will be intermediate stops at
Manchester airport, Sheffield, and the
Nottingham suburb of Toton.
The railway will also be connected to
the existing East and West Coast main
lines, enabling services to run along
HS2 from London before heading on
to other northern cities and Scotland.
THE FORUM: Page 19

TUESDAY 29 JANUARY 2013
3
NEWS
cityam.com
HIGH SPEED TWO: THE FACTS
CREWE
MANCHESTER
AIRPORT
BIRMINGHAM
LONDON
EUSTON
OLD OAK COMMON
(FOR CROSSRAIL)
WIGAN
LEEDS
MANCHESTER
SHEFFIELD
TOTON (EAST MIDLANDS)
BIRMINGHAM
AIRPORT
Chesham & Amersham
Cheryl Gillan Conservative
North West Leicestershire
AndrewBridgen Conservative
Tatton
George Osborne Conservative
FIRST PHASE
SECOND PHASE
KEY CONSTITUENCIES
MANCHESTER TO LONDON EUSTON
1 HR 8 MINS
2 hrs 7 mins
MANCHESTER TO BIRMINGHAM
41 MINS
1 hr 26 mins
1 hr 58 mins
LEEDS TO BIRMINGHAM
57 MINS
2 hrs 22 mins
LEEDS TO LONDON EUSTON
1 HR 22 MINS
JOURNEYTIMES OF UNDER20MINS
BETWEENSTATIONS AT LEEDS, SHEFFIELD,
EAST MIDLANDS ANDBIRMINGHAM
HS2 JOURNEY TIME SAVINGS
£32.7bn
HEADLINE COST
CONSTRUCTION
DUE TO START
ON FIRST PHASE
100,000
CONSTRUCTION &
MAINTENANCE JOBS
PROMISED AS RESULT
1,100 SEATS
EACH TRAIN...
400m LONG
CURRENT
TOP SPEEDS
125 mph
250 mph HS2
IN 2017
YAHOO’S shares shot up 4.5 per cent
in after hours trading yesterday after
the technology giant reported fourth
quarter net revenue of $1.22bn
(£777m).
The figure was up four per cent
year-on-year, as an increase in search
advertising revenue offset weakness
in the web portal’s display ad
business.
Stocks rose to $21.22 after the
bell, following the company’s
quarterly announcement of
$272.3m net income, or 23 cents per
share, versus $295.6m, or 24 cents
per share, in the same period a year
ago.
Excluding certain items, Yahoo
said it had earnings per share of 32
cents, versus the average analyst
expectation of 28 cents. It said search
revenue had increased four per cent
to $482m in the fourth quarter,
while display advertising revenue fell
by three per cent to $591m.
Chief executive Marissa
Mayer (pictured) is
moving to revive
Yahoo’s fortunes
after several years of
declining revenue.
Yahoo’s stock has
risen roughly 30
per cent since she
became chief
executive last
July.
HUNDREDS of British iPhone users
yesterday piled into a class action
lawsuit against Google that claims
the company bypassed Apple securi-
ty measures to track web habits.
Law firm Olswang is bringing the
case against the web company, claim-
ing that Google illegally installed
tracking files – known as cookies –
on products that use Apple’s Safari
web browser during 2011 and 2012.
Olswang lawyers originally notified
Google on behalf of 12 clients, but as
news of the case spread yesterday,
hundreds of people contacted the
firm interested in becoming part of
the class action. Around 50 people
are believed to be in the formal
process of joining the case, with
lawyers expecting more this week.
With more than 10m people in the
Hundreds join
iPhone lawsuit
against Google
BY JAMES TITCOMB
UK who own iPhones, iPads and
Apple Macs – all of which run Safari –
the case could balloon further.
Any settlement could cost Google
tens of millions of pounds.
Google has not responded to the UK
case, the first of its kind, but it was
fined $22.5m (£14.3m) by US authori-
ties over the incident last year. The US
firm did not comment yesterday.
3i in talks with potential buyer
of holding in insurer Hyperion
PRIVATE equity group 3i is in talks
with an unnamed buyer about
potentially selling its sizeable share-
holding in private insurer Hyperion,
sources have told City A.M.
3i has a stake of around 23 per cent
in the group, with BP Marsh (13.5
per cent) and Murofo Investments
(14.46 per cent stake), the other
major institutional shareholders in
the company.
“There’s been a good offer for a
stake in a good company,” said one
source.
Hyperion said last week that a
much talked about IPO plan
remained very much on the agenda.
But others have speculated that an
IPO is being put back until next year
following the recent acquisition of
Windsor.
Market sources suggest that 3i,
which is in the middle of a strategy of
divesting some of its non-core assets,
might be keen to sell out now rather
than wait for the company to float if
this means waiting until 2014.
3i declined to comment.
Industry sources suggest the group,
which has 60 per cent of its shares
owned by an employee trust, is worth
anything between £150m-200m.
In the year to September 2012 the
group, which includes the broker
Howden, had revenues of £111m with
Ebitda of £20.6m.
Ex-Conservative cabinet minister
Lord Forsyth is on the board of the
group, whose chief executive
David Howden recently spoke
about wanting to be an industry
consolidator.
FORMER cabinet member Chris Huhne will go on trial next week over allegations his ex-
wife Vicky Pryce took speeding points on his behalf. The leading Lib Dem yesterday
pleaded not guilty to perverting the course of justice in a hearing at Southwark Crown
Court. The charge relates to an alleged driving offence committed in March 2003.
CHRIS HUHNE TO STAND TRIAL NEXT WEEK
GOOGLE INC
28Jan 22Jan 23Jan 24Jan 25Jan
730
740
750
720
710
700
$
750.73
28Jan
DRIVERS of hybrid cars will be
forced to pay the congestion charge
if plans under consideration
receive the green light, Transport
for London (TfL) said yesterday.
Owners of some diesel-fuelled
cars – as well as hybrids such as the
Toyota Prius range – are currently
exempt from the £10 fee for driving
into central London by virtue of
their low carbon dioxide emissions.
BY JAMES WATERSON But TfL fears that drivers are
taking advantage of this loophole
and wants to lower the exemption
limit from 100g/km of emissions to
75g/km. This would exclude most of
the 2,500 drivers who currently
enjoy the benefit on a daily basis.
Other proposals included in the
ongoing consultation include
raising the penalty for not paying
the charge from £130 to £140 and
removing the ability to pay the
congestion charge in shops.
EXCLUSIVE
BY DAVID HELLIER
TUESDAY 29 JANUARY 2013
5
NEWS
cityam.com
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Diesel and hybrid cars to lose
congestion charge exemption
DESPITE promising to simplify the
UK’s bloated tax system, the
coalition government has actually
added more taxes than it has
removed, according to data released
this morning.
The coalition has implemented or
pencilled in 299 separate tax rises
but only 119 tax cuts, the TaxPayers’
Alliance (TPA) said, based on a
“forensic study of Treasury and Her
Majesty’s Revenue and Customs
documents.”
Of these 299 tax hikes, 254 are
already on the books, while 45 more
are to hit the UK public by the end of
the parliament, as the government
attempts to bring tax revenues up
from the £513bn clawed in in the
last year of Gordon Brown’s Labour
government to £671bn by 2015-16. At
constant 2012-13 prices this
represents an £84bn jump – from
£549bn to £633bn.
“Endless tinkering at the edges of
the tax system was a vice that
George Osborne criticised in the last
government, but of which he is
equally guilty now he is in office,”
said TPA chief Matthew Sinclair.
But the Treasury rebuffed these
criticisms, pointing to the increase
in the tax-free personal allowance as
evidence they were working toward
a “fairer, more efficient and simpler
tax system, in which those with the
most contribute the most.”
Coalition adds
299 taxes for
119 that it cut
BY BEN SOUTHWOOD
SOME of the City’s top lawyers have
been named on the industry’s annual
Hot 100 list, including the silk help-
ing Guardian Care Homes pursue
Barclays for Libor-related mis-selling
and the partner leading Co-op
through its bid for Lloyds bank
branches.
The Lawyer magazine’s 2013 list,
released yesterday, singles out 100
legal names to watch this year, with
restructuring partners, corporate
dealmakers and in-house counsel all
winning spots on the roster.
Among the magic circle firms,
Slaughter and May’s incoming execu-
tive partner Richard Clark makes the
cut, as does competition partner
Claire Jeffs and tax chief Sara Luder.
Allen & Overy boasts two partners
on the list – Charles Lindsay, who
launched an Istanbul office just over a
year ago, and energy star Gareth
Price, made head of projects last May.
Turnaround specialist Adam
Gallagher, who led the team advising
senior lenders on the Biffa restructur-
ing, makes the grade at Freshfields, as
City’s brightest
named in legal
hot 100 line-up
BY ELIZABETH FOURNIER
does corporate heavyweight Jennifer
Bethlehem – one of the 46 female
lawyers ton the list this year.
And at Linklaters, litigation partner
Christa Band, Emea managing partner
Sandeep Katwala, M&A man Iain
Wagstaff and banking and restructur-
ing’s Bruce Bell are all named.
Hilary Evenett, the Clifford Chance
partner who spent much of 2012 help-
ing Co-op put together its bid for 632
branches of Lloyds, also makes the list.
Elsewhere, high-profile insolvencies
have thrown several lawyers into the
spotlight, including Ashley Katz at
Mayer Brown, who’s working with
administrators Deloitte as they tackle
Comet, and Charlotte Moller at Reed
Smith – helping KPMG wind down
spread betting firm WorldSpreads.
Also on the list are Irwin Mitchell’s
Alison Eddy, the London managing
partner of the personal injury special-
ist that has said it may consider a stock
market listing after last year’s Legal
Services Act opened up the sector, and
Brick Court Chambers’ Tim Lord QC –
who won the right last week to name
Barclays staff at the High Court as part
of the ongoing Libor rate-fixing case.
TUESDAY 29 JANUARY 2013
6
NEWS
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Mayer Brown partner Ashley Katz Reed Smith’s Charlotte Moller
Brick Court Chambers’ Tim Lord QC Slaughters’ veteran Richard Clark
Irwin Mitchell’s Alison Eddy Hilary Evenett, partner at Clifford Chance
SHARES in the company behind
Hovis bread and Mr Kipling cakes
tumbled yesterday after its chief
executive quit after just 18 months at
the helm.
Premier Foods said Michael
Clarke, who joined from Kraft Foods
in September 2011, had indicated to
the board over Christmas he was
considering moving on “to pursue
other business opportunities”.
Premier said Clarke will remain on
hand until mid-2013 to help with
the handover to his successor, Gavin
Darby, the former chief executive of
Cable & Wireless who will take over
the reins in early February.
Shares in Premier fell 12 per cent
on the news and left analysts con-
cerned over the firm’s future.
Clarke, who has overseen a mas-
sive cost-cutting and restructuring
programme since joining the debt-
laden group, was widely expected to
stay on to ensure the group’s stabili-
ty after the turmoil of the past year.
Martin Deboo, analyst at Investec
said: “With its financial restructur-
ing complete, we think that consis-
tency and longevity of leadership
Premier Foods’
shares tumble
as chief resigns
BY KASMIRA JEFFORD
was going to be critical to its pros-
perity. We now anticipate a further
period of uncertainty.”
Clarke is thought to have collected
around £2.7m in pay and bonuses
during his time at company.
Premier has been selling off assets
such as Branston’s range of pickles
and Robertson’s jam to pay down
debts of more than £1bn. It is con-
centrating instead on eight key
brands including Ambrosia, Hovis
and Bisto.
The food group secured a £1.4bn
debt refinancing with its banks last
year in exchange for making major
disposals. In November it also cut
900 jobs at its bread unit as part of
the restructuring.
Clarke got them out of a pickle
but all could still come unstuck
M
ICHAEL Clarke’s sudden
departure from Premier
Foods put a dent in its share
price yesterday. Justifiably so.
Clarke extricated Premier Foods
from a pickle – not just ownership of
Branston’s and other sweet pickles
and sauces, which disposal is due for
completion at the start of February,
but also by overseeing the £1.4bn
restructuring of the massive debt
pile Premier Foods built up in the
2000s while acquiring its portfolio of
well-known brands.
Analysts previously soothed by
Clarke’s work to hive off non-core
assets and boost sales on power
brands like Bisto and Hovis are now
unnerved, just when stability was
needed. The debt deal that Clarke
struck runs until June 2016 and
pension deficit contributions have
been deferred until January 2014, so
it is a case of changing horses mid-
stream. Clarke’s decision leaves new
incumbent Gavin Darby the hard
task of seeing the crossing through.
Darby didn’t serve long himself in
his last role as chief executive,
moving on after less than a year.
That is unfortunate in the context.
However, investors may be reassured
by the fact his departure from Cable
and Wireless Worldwide was the
result of his selling the company to
former employer Vodafone, rather
than a tendency to cut and run.
Darby previously spent 15 years at
Coca-Cola and another seven years at
Vodafone.
If Darby can restore a sense of
stability, Premier Foods seems to be
making progress. A two per cent lift
to power brand sales in the first half
of 2012 followed its Jubilee-themed
push of Great British Fancies under
the Mr Kipling brand. But the food
specialist needs more such increases
and they are not cheap. Premier
committed to doubling its
marketing spend in 2012.
There will also be bumps along
the way. Premier has decided to
make a virtue of its primarily British-
based production, with 82 per cent
of its ingredients, goods and services
sourced in the UK – one reason for
the patriotic notes its ads are
sounding. But following bad harvests
it found itself forced to backtrack
this month on a 2010 promise to use
only British wheat in Hovis loaves.
Union flag designs are to be stripped
off bread wrappers (not its premium
Farmers Loaf) as a result.
Darby needs to work through the
existing strategy but with enough
flexibility to adjust when things go
wrong. That is plenty to have on his
plate. Happily for shareholders, he
has already promised to put his
money where his mouth is – he will
spend a significant personal sum on
Premier Foods’ shares that will also
be matched by the firm. After
Clarke’s shock exit, that is a
welcome sign of commitment. With
Darby’s own fortunes tied to a
Premier outcome, all he has to do
now is deliver the goods.
BOTTOM
LINE
MARC SIDWELL
Premier Foods PLC
28Jan 22Jan 23Jan 24Jan 25Jan
105
110
115
120
125 p
106.00
28Jan
TUESDAY 29 JANUARY 2013
8
cityam.com
PROFILE: GAVIN DARBY
GAVIN DARBY is making a return to the con-
sumer goods sector after a decade in the
telecoms industry that ended abruptly last
year. Darby, who was hired in November to
2011 as chief executive of Cable & Wireless
Worldwide, engineered its £1bn takeover
by telecoms giant Vodafone last
summer.
But his stay at CWW came to an end
following the merger after
Vodafone decided to replace
him with the head of its enter-
prise unit Nick Jeffery. It was
not the first time Darby
had been ousted from
Vodafone. He first
joined the
FTSE firm in
2001 and
became
chief
execu-
tive of its UK operations before taking charge
of growing Vodafone’s international business
in the US, Africa, India and China. Despite
gaining a good reputation and rising through
the ranks he left in 2010, reportedly due to
differences with Vodafone chief executive
Vittorio Colao. Before moving into telecoms,
Darby spent 15 years working for the soft
drinks giant Coca-Cola, where he ended up as
regional president with responsibility for 30
European countries.
Darby yesterday pledged to invest “a signifi-
cant personal sum” in Premier’s shares, with
the company matching the size of his invest-
ment. The move should reassure investors
looking someone committed to the long-haul
at Premier Foods. Darby added: “I am very
excited to be taking on this role. Although
markets remain difficult, I look forward to
working with the team to develop and grow
the company’s power brands in the coming
years,” he said.
NEWS
CANADA’S second largest pension
fund has teamed up with private
equity firm TPG to buy a landmark
office building in the City for £265m.
Ivanhoé Cambridge, the property
investment arm of Caisse de dépôt et
placement du Québec, said yesterday
it has jointly bought the Woolgate
Exchange in Moorgate as it steps up
its investment in the London office
market.
The firm has now spent more than
£400m in the capital over the past
year after snapping up two residen-
tial buildings in Kensington and
Belgravia in December.
The Woolgate Exchange, which is
close to the Bank of England, was put
up for sale a year ago after its owner,
clients of the property Irish invest-
ment manager D2 Private, defaulted
on £270m of loans.
Malaysian sovereign wealth fund
PNB was close to buying the building
in April last year but talks collapsed
at the eleventh hour.
In November, TPG bought the jun-
ior debt secured against Woolgate
from Irish Bank Resolution and
Ivanhoe has now come in and provid-
ed the majority of the equity to take
control of the asset.
The 350,000 square feet building is
Canadians buy
landmark City
site for £265m
BY KASMIRA JEFFORD
let to Portigon, the German bank for-
merly known as WestLB, and sub-ten-
ants including Investec Asset
Management, Sidley Austin and the
University of Chicago.
Ivanhoe, which holds more than
£18.9bn worth of assets in 24 coun-
tries, joins several overseas firms
lured by the UK capital’s safe haven
status against an uncertain economic
environment.
“This investment is perfectly in line
with our strategic positioning in
London,” Daniel Fournier, Ivanhoé
chairman and chief executive said.
“We are convinced that it will gen-
erate attractive returns for our depos-
itors,” he added.
SHOULD THE GOVERNMENT SPEND
£33BN ON HIGH SPEED TWO?
It is a complete and utter waste of money. You
cannot balance the books of the country by
ploughing money into black hole infrastructure projects.
Not one penny of public money should go into HS2.
These views are those of the individuals andnot necessarily those of their company
STEPHEN HARRIS
ACCOUNTANT AND
INSOLVENCY PRACTIONER

Yes. Anything with better connections across
the country will be better in the long-run –
it’s less trouble than going to the airport. But in the
short-run, there is that amount of money.
BRYAN HASLAM
NETWORK INTERLINKS
The current forms of transport linking London
to the regions are inadequate for today’s
needs. But the finance for HS2 would be much better
spent on a major overhaul of all current services.
ALPESH PATEL
ACTUARIAL ANALYST


L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
CITYVIEWS
ITV SNAPS UP £56M SOUTH BANK HEADQUARTERS
ITV has bought the
freehold on its
London headquarters
for a sum of £56m.
The 22-storey tower
on the South Bank
serves as the
broadcaster’s
corporate
headquarters and
hosts shows such as
Loose Women.
The 2.5-acre London
Television Centre was
built in the early
1970s and was
previously leased to
ITV by Coal Pension
Properties, which
could earn up to
£6.5m extra if ITV
redevelops the site.
City trophy building Woolgate Exchange
TUESDAY 29 JANUARY 2013
9
NEWS
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JOIN THE DEBATE PAGES 18-19
ITALIAN consumer confidence fell
back to an all-time record low as
2013 began, according to official
data out yesterday.
The headline indicator dropped
to 84.6 in January, from 85.7 in
December, according to official
data from Istat, further below the
100 level that corresponds to the
average sentiment recorded during
2005, hitting the lowest level ever
seen on the 17-year old index.
“Despite the easing in financial
market tensions and the prospects
of an election, the underlying
weakness of the Italian economy
was again underscored by another
sharp fall in consumer
confidence,” said Societe
Generale’s James Nixon.
Nixon said the biggest pressure
was on family budgets, going on to
forecast that disposable incomes
were down around five per cent
over the year to the fourth quarter
of 2012.
This came after French jobless
claims steadied, climbing only 300
in a month – though this still
brought unemployment on this
measure to a 15-year high of
3.133m. And despite President
Francois Hollande’s promise to
bring joblessness down, official
statistics agency Insee forecasts it
will continue to rise during 2013,
reaching close to 11 per cent.
Confidence dip
hits Italy again
as 2013 rolls in
BY BEN SOUTHWOOD
EUROPE’S planned ringfence to split up
retail and investment banking activi-
ties could easily be evaded by banks
and need to be based on new rules to
avoid this happening, a report from
the Eurosystem and European Central
Bank (ECB) argued yesterday.
The plan, proposed by Finnish
central banker Erkki Liikanen,
would see the split of activities
based on International Financial
Reporting Standards (IFRS),
which the ECB fears are too loose.
“The recognition and measure-
ment of financial instru-
ments under IFRS
should not be the only
ECB fears banks
will dodge new
ringfence rules
BY TIM WALLACE
basis for separation as it may provide
sufficient discretion for banks to, for
example, restructure financial transac-
tions and use the scope provided by
accounting rules to circumvent separa-
tion rules,” said the report.
The ECB also worried that harmonis-
ing risk weighting guidelines could
backfire.
“This could lead to reducing
diversity or inadequate risk assess-
ments and potentially triggering
similar response from banks to
market developments, thus
increasing the risk of the amplifica-
tion of market swings,” it
warned.
But the ECB broadly
welcomed the propos-
als to take the taxpay-
er off the hook for
bank failures.
Eurozone’s households and
firms wary about borrowing
LENDING to companies and
households in the Eurozone
shrank further in December, as
borrowers remained cautious
about the direction of the
currency bloc’s economy.
Private sector lending fell 0.7
per cent in December compared
to a year ago, after a 0.8 per cent
fall during November, figures
from the European Central
Bank showed.
The drop, representing the
eighth successive month of
decline, came in spite of the
ECB’s loose monetary policy
that is intended to encourage
borrowing.
The monthly flow of loans to
households fell €3bn (£2.57bn)
in December, compared to a rise
of €6bn in November, while
loans to non-financial
corporations dropped €22bn,
BY MARION DAKERS
accelerating from a €7bn fall the
prior month.
Spain and Portugal bore the
brunt of the declines in private
sector lending, the figures
showed.
“Today’s Eurozone bank
lending figures provide a timely
reminder that the economic
situation in the 17-country
region remains very fragile,” said
ING economist Martin van Vliet
in a note.
Overall, the M3 money supply
increased 3.3 per cent on a year
ago, slowing down from 3.8 per
cent the previous month,
according to the ECB.
“So long as credit growth to
the private sector remains weak,
however, this is unlikely to set
the inflationary alarm bells
ringing in Frankfurt,” added van
Vliet.
These figures mask a rise in
bank deposits in several
countries on the periphery of
the Eurozone.
Greek bank deposits rose by
€6.4bn or four per cent in
December, after a spell of
stability since June, while
private sector deposits at Italian
banks rose by 3.7 per cent to a
record €1.497 trillion.
The Greek banking system
holds around a third less in
deposits than it did before the
sovereign debt crisis sent the
country’s economy into a
tailspin.
The rise in deposits can
nevertheless be taken as a sign
of faith in the Eurozone’s banks,
suggesting fear of an outright
banking collapse is receding.
In Ireland, deposits decreased
one per cent to €197bn and
Portugal’s deposits fell by 1.4 per
cent to €210.4bn, showing that
confidence across the bloc
remains patchy.
Liikanen wants retail and
investment banking split
GREECE has scrapped its short-
selling ban for all but financial
stocks.
The short-selling ban was
introduced in August 2011 to
protect investors from the
fallout of the debt crisis. It has
since been repeatedly extended,
with the latest ban expiring on
31 January.
Only the short-selling of bank
stocks will be extended until 30
April, the country’s Capital
Market Commission said, in
view of the recapitalisation of
the country’s lenders.
Greece scraps short-selling
ban as strikes start to end
BY CITY A.M. REPORTER The news came as strikes
across Greece’s public
transport network appeared to
be drawing to a close, following
the government’s attempt to
use emergency powers to
prevent walkouts last week.
And investors are
increasingly hopeful that
Greece will remain part of the
Eurozone, a survey suggested.
A poll of 956 investors by
Sentix showed just 17.2 per
cent expected one or more
states to leave the bloc over the
next 12 months, and those
forecasting a Grexit fell from
22.5 per cent to 13.9 per cent.
Antonis Samaras, the Greek Prime Minister, has criticised widespread strikes
TUESDAY 29 JANUARY 2013
10
NEWS
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BANK of America Merrill Lynch has
beaten off strong competition from
rivals, including Barclays and UBS, to
become new joint brokers to RSA,
the insurance giant.
BoAML is replacing Deutsche Bank
as joint broker alongside JP Morgan
for the group which has changed its
advisory line-up following the
appointments of Simon Lee as chief
executive and Martin Scicluna as
chairman. The winning of the new
mandate is being seen as a
vindication of BoAML’s resilience
after a period during which three of
its senior brokers, Mark Astaire,
Simon Fraser and Andrew Osborne,
left its broking team in quick
succession.
The RSA win follows the firm’s
appointment as brokers to Tui Travel
and St James’ Place towards the end
of last year. BoAML has 26 FTSE 100
clients, putting it just a few clients
away from the leader in the field of
corporate broking, JP Morgan.
Broking in itself is not viewed as
an especially profitable venture but
is seen as important in developing
relationships with clients who might
then go on to use a bank’s advice in
mergers and acquisitions or fund-
raising deals.
BoAML clinches
broker remit
for insurer RSA
BY DAVID HELLIER
RYANAIR chief executive Michael
O’Leary said yesterday he thinks his
airline’s “radical and unprecedented”
concessions will ensure success in its
bid for Aer Lingus.
The budget airline, which expects to
hear back from the EU competition
authorities in March, has offered to
sell parts of Aer Lingus’ network to
two buyers to help ease anti-trust
concerns.
“We believe these remedies address
every current Ryanair/Aer Lingus
crossover route and all other competi-
tion issues raised by the Commission
in its Statement of Objection,” said
O’Leary.
His bullish comments came as
Ryanair posted a surprise profit
before tax of €19.3m (£16.6m) for the
three months to the end of December
and raised its full-year profit forecast
by around €30m to €540m.
Revenues rose 15 per cent to
Ryanair posts a
profit and talks
up Aer Lingus
BY MARION DAKERS
€968.8m, fuelled by a 24 per cent jump
in ancillary revenues such as reserved
seat fees and baggage charges to
€220.1m.
The surge in turnover soaked up
some of Ryanair’s rising operating
expenses, up 14.6 per cent to €934.2m.
Most of this increase came from fuel
and oil costs, which climbed 24 per
cent to €414.8m.
Davy analyst Stephen Furlong said
Ryanair “continues to produce the
best returns in the industry”.
Short sellers look to cash in on
slump in European car market
HEDGE funds are betting that
companies relying on European car
sales will plunge in value amid a
sharp slump in new cars being sold
across the region, data reveals.
Italian car firm Fiat, which
releases earnings tomorrow, has
shot to the top of a list of most
shorted stocks, with 8.7 per cent of
shares out on loan ahead of results,
figures from Markit show.
The car maker, which is listed on
the Borsa Italiana, has seen
instances of stock lending double
since October, despite a recent
BY MICHAEL BOW
retreat in the lending of Fiat stock.
German car microchip maker
Infineon Technologies is also on
hedge funds’ short list, with double
the amount of shares out on loan
versus last year. It is the third most
shorted stock ahead of earnings in
Europe, according to the figures.
The firm, based in Neubiberg,
gets 42 per cent of revenues from
selling chips to car manufacturers
Last week figures showed demand
for new cars in Europe fell to a 17
year low in 2012, highlighting the
crisis for car makers in Europe.
Additional Markit data last week
revealed French car giant Peugeot
was another in-demand stock from
hedgies, with 92 per cent of shares
made available by owners to be
borrowed by short sellers.
Ryanair Holdings PLC
28Jan 22Jan 23Jan 24Jan 25Jan
5.40
5.45
5.50
5.25
5.30
5.35
5.55
5.60 €
5.56
28Jan
Fiat SpA
28Jan 22Jan 23Jan 24Jan 25Jan
4.65
4.70
4.75
4.60
4.80
4.85 €
4.72
28Jan
ITALIAN coffee brand Lavazza is
taking on the likes of Starbucks,
Cafe Nero and Costa with plans to
open up 400 shops across the UK
this year.
Property agents Cushman &
Wakefield said yesterday it has
been hired by Lavazza to advise on
the roll-out of its new coffee shops,
called Lavazza Espression.
The coffee giant currently has a
concession in Harrods and one
standalone shop in Manchester’s
Trafford shopping centre, which
Italy’s Lavazza poised to give
UK high streets a caffeine boost
BY KASMIRA JEFFORD
opened in November. It plans to
open 50 stores in the London area
in the next three years, with the
first two due to launch on Villiers
Street near Embankment in April
and on Cannon Street in June.
According to recent research by
Opinium, Britons spend £6.34bn a
year on takeaway coffee from high
street cafes, with 16.1m people
buying at least one shop-brewed
drink each week.
Costa Coffee, owned by FTSE 100
firm Whitbread, is the largest
coffee chain in the UK, with 1,375
shops as well as vending machines.
DIAGEO has formed a new South
African joint venture with Vijay
Mallya, the FTSE giant said yesterday,
as it awaits approval to buy a
majority stake in the Indian tycoon’s
drinks business United Spirits.
The owner of brands such as
Johnnie Walker whisky and
Smirnoff vodka, confirmed it
has signed a £23m deal to
buy a 50 per cent stake in the
firm that owns United
National Breweries’
traditional sorghum beer
business in South Africa.
A firm affiliated to Mallya
will own the remaining 50
per cent in the brewing
Diageo strikes African beer deal
as it waits for United Spirits call
BY KASMIRA JEFFORD
business.
The deal, which is subject to
approval from South African
regulators, is expected to complete
in the first half of this year.
The agreement is part of Diageo’s
wider £1.3bn deal for a majority
stake in United Spirits, announced
in November last year.
The initial tender offer
timetable was postponed
earlier this month and Diageo
is now understood to be
caught up in talks with the
Securities and Exchange Board
of India (Sebi), which could
delay its acquisition until the
second quarter of this year.
TUESDAY 29 JANUARY 2013
11
NEWS
cityam.com
Lavazza opened its first standalone coffee shop in the Trafford Centre last November.
The HAILO app.
Black Cabs just got easier.
Kalahari, a sorghum beer
IN BRIEF
80,000 face tripled stamp duty
nA tenth of home buyers in England
and Wales may be clobbered with a
tripling in stamp duty this year, London
Central Portfolio said yesterday. Houses
bought for over £250,000 face stamp
duty of three per cent – versus just one
per cent for those under the boundary.
But the UK’s average house price
climbed to £249,958 last year, LCP said,
bringing more people over the limit.
Fitch says AAA risk gone after deal
nThe short-term risk to the US
federal government’s vaunted AAA
rating has dissipated after warring
government bodies managed to pass
a debt ceiling deal, Fitch said
yesterday. But the ratings behemoth
warned that the recent deal only
solved the short-term issues, and
reform remained necessary to “place
public finances on a sustainable path.”
UK inflation expectations tick up
nThe UK public’s forecasts for inflation
ticked up in January, according to a
YouGov poll out yesterday.
Respondents think inflation will be 2.8
per cent over the coming year, up from
2.7 per cent in December – and 0.8
percentage points above the Bank of
England’s target. Over the next five to
10 years the public thinks inflation will
average 3.4 per cent annually.
THE UK high street’s woes will not let
up in coming months, and rents will
continue to fall, according to a survey
out this morning.
A glut of unoccupied floor space
and continued weakness in retail
demand will hold rents down, the
Royal Institution of Chartered
Surveyors (RICS) survey suggested.
Some 22 per cent more respondents
said retail sector rents had further to
fall than said they would rise over
the first quarter of 2013, indicating
that the troubled sector may worsen
further – even after Jessops, HMV and
Blockbuster fell into administration.
“The end of 2012 was yet another
incredibly tough period for the high
street,” said RICS economist Simon
Rubinsohn. “Sadly, this downbeat
picture doesn’t look like changing
More closures
expected in
town centres
BY BEN SOUTHWOOD
any time soon, with demand for retail
space continuing to drop and more
empty premises set to blight the
country’s town centres.”
Other sectors of commercial proper-
ty were doing much better, according
to the RICS survey, with the overall
demand for commercial space grow-
ing, especially in the office sector,
where a balance of around 20 per
cent said demand was on the up.
Demand also increased in the UK’s
hard-pressed industrial sector, the
RICS survey showed.
But the overall increase in demand
is not expected to translate into
increased rents or property values. A
narrow margin of three percentage
points of the chartered surveyors
polled thought capital values were on
the slide in the coming three months,
while a nine percentage point majori-
ty reckoned rents would fall.
BRITAIN’S largest firms are issuing
increasing levels of bonds, Bank of
England figures showed yesterday,
illustrating the sharp shift away
from bank debt towards the
markets.
Corporate bond issuance came in
just shy of £70bn in 2012, according
to the Asset Purchase Facility (APF)
quarterly report, from under
£40bn in 2011 and under £30bn in
Bond boom gathers pace as big
firms tap markets for finance
BY TIM WALLACE 2010. That compares with steady
falls in bank lending to small and
large firms – net lending to large
firms fell £18.1bn in the four
quarters to September 2012, while
SME lending dipped £6.4bn.
The report also showed the Bank
of England sold £55m of corporate
bonds in the fourth quarter and
has £35m remaining. It has bought
£375bn in gilts in total, with the
last purchases in October.
THE FORUM: Page 18
▲ ▲
Figures from Sir Mervyn King’s Bank of England show an increase in cash being raised
TUESDAY 29 JANUARY 2013
12
NEWS
cityam.com
The new
jobs website
for London
professionals
C
I
T
Y
A
M
C
A
R
E
E
R
S
.
c
o
m
D
E
A
L
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G
I
C

/

B
A
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K

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Corporate bond issuance is soaring
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
50
60
0
30
20
40
10
70 £billions
2012
2009
2011
2010
2003-2008
YET another duo have thrown in
the proverbial banking towel, and
gone it alone as entrepreneurs.
Former Summit Partners venture
capitalist Rytis Vitkauskas and ex-
Goldman Sachs strategist Viktoras
Jucikas both quit the City last year
to found YPlan, a London-based
events app that was designed with
time-poor former City colleagues
in mind.
The pair, tired of long working
hours, told The Capitalist that
when they resigned they actually
had no idea what they
would do next, apart
from book a long
holiday. Luckily
they soon
hatched the idea of YPlan, which
lets users book tickets to events
with a few pushes of the iPhone.
The Capitalist hears that one City
worker even used the app to sponta-
neously get hitched.
However after-
wards she
lamented: “I
wish I’d had
more make-
up on, but it
was good
fun.”
YPlan founders Rytis
Vitkauskas (left) and
Viktoras Jucikas (right)
The Capitalist isn’t usually in the
business of dishing out fashion
advice, however an email arrived from
Central Markets broker Andrew Blaylock:
“I’ve noticed in previous articles that you
have discussed acceptable attire on the
trading floor. A trader here, Arjun Bhogul,
believes it acceptable to wear a black shirt
to work. I am under the impression that
only four colours – white, blue, pink and
(very occasionally) yellow are acceptable.
Please confirm.” The Capitalist deferred to
tailor Gieves and Hawkes which informed
that the classic fabrics are white and sky
blue. However “there is a rising popularity
in white collar and contrast body” which
apparently is “a bit Gordon Gekko.” When
even an infamous (albeit fictional) insider
trader’s attire is deemed preferable to a
black shirt, you know you’re in trouble.
There was no doubt a red face or
two in the HR department of law
firm Addleshaw Goddard, and probably
a couple amongst the firm’s lesser
performing trainees. A member of the
HR team committed the cardinal sin of
“emailing all” after having accidentally
attached details of every trainee's
individual performance ratings to a more
mundane email on seat moves. When
quizzed, the firm responded: “A
firmwide communication unfortunately
also contained, by mistake, private
information relating to individual
trainees. We are reviewing our processes
and have apologised to our trainees.”
Let’s hope they are more careful with the
private information belonging to clients.
lombard.co.uk
Lombard North Central PLC. Registered Office: 3 Princess Way,
Redhill, Surrey RH1 1NP. Registered in England No. 337004.
At Lombard we understand that investment is at
the heart of economic recovery. That’s why we are
committed to lending to UK businesses. Our year on
year lending to October 2012 increased by 16%. Our
commitment is stronger than ever and our specialist
team of relationship managers is working with an
increasing number of companies to help them meet
their capital investment needs.
Lombard: Funding Britain.
Security may be required and product fees may apply.
Call today to find out more.
Call 0800 502 402.
Typetalk 18001 0800 502 402.
THERE are certainly no shortages
of age going hand-in-hand with
wisdom in the City, or so we are
led to believe. However The
Capitalist has news of perhaps the
youngest worker in the heart of
the Square Mile.
Jake McMullen, who is a
whipper-snapping 17 years old, has
been taken on by the City of
London’s post room as an intern
this week. Apparently the newest
addition to the Guildhall staff
already has his sights set on a
permanent position. Maybe he can
start by converting the recipients
of council papers and briefing
notes that arrive thick and fast(ish)
to the even speedier method of
electronic mail.
Jake McMullen, the newest intern addition to the City of London’s Guildhall staff
Teenage intern has sights set
on rising the ranks of the City
Ex-investment
bankers hatch
a plan for apps
13
cityam.com
TUESDAY 29 JANUARY 2013
cityam.com/the-capitalist
THECAPITALIST
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
IN BRIEF
Anite buys £27m Finnish 4G firm
nSoftware group Anite yesterday
announced the €31m (£26.6m)
acquisition of a Finnish network
testing business, Propism. The deal
will improve Anite’s standing in the
telecoms market as network firms roll
out 4G technology across the country.
Anite has grown rapidly in the last
year as telecoms firms invest in
infrastructure in anticipation of a
launch of 4G services in the summer.
Slowdown hits recruiter SThree
nWhite collar recruitment firm
SThree posted a 17 per cent decline in
annual profits yesterday, blaming it on
“a steady deterioration in macro
economic confidence”. This came
despite strong performances in
energy, engineering and
pharmaceuticals, which account for a
third of profits, and a seven per cent
rise in turnover to £577.5m.
Premieres move R4E into black
nTheatre marketing group
Research4Entertainment (R4E) said
yesterday it expects to have swung to
a profit last year, driven by contracts
for film premieres in Leicester Square
such as those for new Spiderman and
Batman films. The company, which
went public in May last year, saw its
share price rise about 15 per cent
yesterday. R4E has operations both in
New York and London.
VENTURE capitalists (VC) went cold
on Europe in the last three months
of 2012, as dealmakers cut invest-
ments in European-based start up
businesses by more than a quarter,
data out yesterday revealed.
VCs poured €967m (£616.4m) into
European firms in the fourth quar-
ter, a 26 per cent decline on the same
period last year, according to Dow
Jones VentureSource. The number of
deals also slipped 22 per cent
between October and December.
The bearishness of VCs at the end of
last year stands in stark contrast to
European public equity markets,
which roared to their highest levels
since before the financial crisis.
Despite this, mergers and acquisi-
tion activity across the continent was
even more subdued last year, with
145 exits garnering €4.7bn, down an
eye-watering 45 per cent on the
Venture capital
deals plummet
across Europe
BY MICHAEL BOW
figures in 2011.
This is the lowest recorded since
VentureSource – which tracks more
than 20,000 private investment firms
around the world – started collecting
European data in 2000.
“Investors appear trapped in their
current investments, needing to wait
longer to recoup their financial
returns while at the same time lack-
ing funds to fuel new ventures,” head
of research Anne Malterre said.
The figures also reveal the UK as the
venture capital hotspot of Europe,
beating off France and Germany with
UK firms getting €1.4bn of VC back-
ing compared to €822m for Germany
and €721m for France.
While the traditional hunting
ground of VCs – like healthcare and
energy – diminished last year, inter-
est in social media and online shop-
ping firms boomed to become the
most popular sector for VC invest-
ment, attracting €1.3bn over the year.
Software group Aveva struck by
difficulties in Brazil oil and gas
DELAYS to oil and gas projects in
Brazil have affected design software
company Aveva, whose engineering
technology is used to design oil rigs,
power plants and ship structures.
However, the FTSE 250 company
said it had been boosted by
increased spending in the Europe,
Middle East and Africa region and
continued growth in Asia Pacific.
Much of Aveva’s growth has
been targeted in Russia, India and
China in recent months. In
November, the company reported a
21 per cent growth in Asia Pacific
revenues during the first half of
BY JAMES TITCOMB the financial year and yesterday it
said: “We have not seen any
noticeable shifts in the regional
trends we reported at the time.”
Aveva is betting on the success of
its new Everything 3D software to
drive further growth in the future.
The modelling technology has
recently been put on sale and the
company said it was seeing “good
levels of interest” but that it did
not expect sales to take off in this
financial year, which runs until
the end of March.
Because of Aveva’s specialist
focus, it has survived a slowdown
seen elsewhere in the software
industry, and investors have piled
in on the stock, sending shares to
historic highs.
However, warnings over Brazil
meant shares dropped by just over
1.5 per cent yesterday.
AVEVA Group PLC
28Jan 22Jan 23Jan 24Jan 25Jan
2,225
2,250
2,150
2,175
2,200
p
2,186.00
28Jan
UPMARKET money manager Signia
Wealth yesterday said the former
chief of Schroders Private Banking
Rupert Robinson had joined the
company to head up its wealth
management activities.
Robinson, a private banking
heavyweight who has worked at
institutions including N.M.
Rothschild & Son and boutique
firm Beaumont Capital, joins the
firm’s chief executive and founder
Nathalie Dauriac-Stoebe to help
Signia Wealth signs up former
Schroders boss in growth bid
BY MICHAEL BOW
push the development of the three
year old business.
He told City A.M.: “I always had
a burning desire to get re-involved
with a smaller business where I
could influence its
development  through my
personality and skills”
Robinson was pivotal in growing
Schroders’ private bank offering,
boosting the pot of cash it
manages from £3bn to £10bn
during the ten years he led the
firm. Philip Mallinckrodt replaced
Robinson at Schroders in October.
TUESDAY 29 JANUARY 2013
14
NEWS
cityam.com
Ex-Schroders boss Rupert Robinson has joined wealth manager Signia Wealth
Russia, India and Europe are strong, China is recovering, Brazil is still
weak and the net update is positive. This is not enough to take the shares higher
on a near-term basis. However the long term prospects of E3D look very
compelling. We retain “Buy” and upgrade target price to 2,450p.
ANALYST VIEWS


No surprises – short and hits the spot – Aveva’s operational news is in
line with our expectations; no change to estimates. In time E3D sales could
translate gushing comment into a snip of an upgrade, maybe as early as
quarter four. Until then a “Hold” and 2,332p target feels about right.

As usual, it’s succinct and qualitative rather than quantitative and
unsurprisingly reports a continuation of the trends from the interims. Quarter
three is relatively unimportant vs quarter four due to the heavy weight-
ing of rental renewals. We make no changes: “Buy”, and a 2,470p target.

WHAT DID YOU THINK OF
AVEVA’S INTERIM
STATEMENT? Interviews by James Titcomb
JULIAN YATES INVESTEC

GEORGE O’CONNOR PANMURE GORDON

DAVID TOMS NUMIS SECURITIES
LENOVO downplayed suggestions it
was considering a takeover of
Research in Motion (RIM) yesterday,
sending shares in the BlackBerry
maker down by almost eight per
cent.
The Canadian firm was lifted last
week when Lenovo, the Chinese
computing giant, signalled a
potential interest. Chief financial
officer Wong Mai Ming had said
Lenovo was “looking at all
opportunities” including RIM.
However, Lenovo attempted to
distance itself from the speculation
yesterday, claiming Wong’s
comments had been taken out of
context. “We are aware that Lenovo’s
CFO... was speaking broadly about
M&A strategy in a recent interview,”
the firm said yesterday.
“RIM was raised as a potential
target by a journalist and Mr Wong
repeatedly answered in a manner
consistent with all of our previous
statements on M&A strategy.”
Shares in RIM, which had risen
above $18 on the supposed Lenovo
interest, fell 7.75 per cent to $16.18 in
New York yesterday.
The company will unveil its new
BlackBerry 10 software tomorrow.
RIM falls as
Lenovo cools
takeover talk
BY JAMES TITCOMB
JAPANESE firm Toyota has retaken
its crown as the world’s biggest sell-
ing car maker after its sales rose
22.6 per cent to a record 9.75m vehi-
cles in 2012.
Japan’s three biggest car compa-
nies all posted record sales yester-
day, as they continue to recover
from natural disasters that left the
country reeling in 2011.
Toyota, which lost the top spot in
the wake of the Japanese tsunami
and a vehicle recall in the US, has
overtaken General Motors and
Volkswagen during the last year.
GM sold 9.28m vehicles in 2012, up
2.9 per cent, while Volkswagen sold
9.07m vehicles, up 11.2 per cent.
Sales in Toyota’s recovering home
market jumped 35.2 per cent in the
year to 2.4m cars, trucks and buses,
while overseas sales rose 19 per cent
to 7.34m.
Exports rose for the first time in
two years, with Toyota picking out
the Americas, the Middle East and
Toyota regains
the top spot for
global car sales
BY MARION DAKERS
Africa as highlights.
The firm aims to sell 9.91m vehi-
cles globally in 2013, up 1.6 per cent
from 2012. Toyota also sells minicars
under the Daihatsu marque and
Hino-branded trucks.
Toyota raised its profit forecast for
the financial year to 780bn yen in
November, in spite of a Chinese boy-
cott following a dispute over islands
in the East China Sea.
The protests also hit rival car
maker Nissan, though worldwide
the firm sold a record 4.94m vehi-
cles in 2012, up nearly six per cent, it
said yesterday.
And Honda posted a 19 per cent
rise in sales to 3.82m vehicles, on the
back of growing turnover in the US,
its biggest market.
Smaller firm Mazda yesterday
revealed a two per cent rise in annu-
al global production to 1.19m units,
helped by a 23 per cent rise in North
American exports to more than
323,000 cars.
Mitsubishi more than doubled its
production to 1.1m units during
2012.
Honda will kick off earnings sea-
son for Japan’s car makers when it
reports first quarter results on
Thursday, followed by Toyota
and Nissan next week.
Research In Motion LTD
28Jan 22Jan 23Jan 24Jan 25Jan
17.0
17.5
18.0
16.5
$
16.18
28Jan
SHARES in Sony and Nintendo
leapt yesterday amid hopes that
the Chinese government would
end a ban on video game consoles.
The country’s official
newspaper, China Daily, said the
country’s culture department was
considering allowing consoles in
the world’s second-biggest
economy for the first time since
2000, when they were banned to
protect children.
This would provide a much-
needed boost to Sony and
Nintendo, which saw shares rise
by nine and 3.5 per cent
respectively in Tokyo yesterday.
Both Japanese firms reported
annual losses last year on a
slowdown in the home console
market. Sony’s PlayStation 3 has
Video game firms power up on
prospect of end to Chinese ban
BY JAMES TITCOMB
been on sale for more than five
years, while Nintendo has been
affected by the rise in casual
gamers on smartphones and
tablets. It launched its Wii U
console in November in an
attempt to revive sales and steal a
march on Sony and Microsoft’s
Xbox, which could unveil new
consoles this year.
Despite home consoles being
prohibited in China, it is expected
that there would be a healthy
appetite for them. Online games
on computers, for example, are
extremely popular.
“We are reviewing the policy
and have conducted some surveys
and held discussions with other
ministries on the possibility of
opening up the game console
market,” the China Daily quoted a
government source as saying.
CATERPILLAR, the world’s largest
maker of construction equipment,
posted a 55 per cent drop in
quarterly profit yesterday due to a
charge connected with accounting
fraud at a Chinese subsidiary and
weak demand among its dealers.
Caterpillar’s machinery has been
accumulating in warehouses due to
slowing economies in China, Europe
and the US. Quarterly results were
hit by a charge of 87 cents per share
after the firm discovered accounting
fraud at a Chinese coal mining
supplier it bought last year. For the
fourth quarter, it posted net income
of $697m, compared with $1.55bn in
the year-ago quarter.
Wall Street looked past the China
accounting fraud mess, sending
shares higher.
Caterpillar hit
by China bill
BY CITY A.M. REPORTER
TUESDAY 29 JANUARY 2013
15
NEWS
cityam.com
Nintendo, makers of the iconic Mario series of games, posted its first annual loss in 2012
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ROYAL Dutch Shell said
yesterday it will tie up with
Kinder Morgan to export
liquefied natural gas (LNG)
from a terminal near
Savannah, Georgia.
El Paso Pipeline Partners, a
Kinder Morgan unit, and
Shell will form a limited
liability company to develop
a natural gas liquefaction
plant at Southern LNG’s
existing terminal.
The project is expected to
have a liquefaction capacity
of 2.5 mtpa of LNG or 350m
cubic feet of gas per day. El
Paso Pipeline will own 51
per cent and operate the
facility, while Shell will own
the rest.
Shell to export
LNG from US
BY CITY A.M. REPORTER
THE UK moved a step closer to
switching on its local TV
network yesterday, when
channel operator Comux was
awarded the licence to operate
the spectrum for the new
channels.
In addition to the 19 local TV
areas already announced,
Comux – owned by broadcast
firm Canis Media – said it
would cover 28 further
locations, opening the
possibility of TV stations
launching in the likes of
Reading, Maidstone and Luton.
Ofcom has not yet decided
which one of five applicants
will be chosen to run London’s
network before stations are
switched on at the end of 2013.
Licences given
for local TV
BY JAMES TITCOMB
Toyota has enjoyed record
car sales in the past year
IN BRIEF
BP starts production at Valhall
nBP has kicked off output at its
Valhall field in the Norwegian North
Sea, which is expected to ramp up to
producer around 65,000 barrels of oil
equivalent a day in the second half of
2013. “It is one of BP’s most complex
field expansion developments and
gives Valhall a further 40-year design
life with the capacity to handle
120,000 barrels of oil and 143m cubic
feet of gas per day,” BP chief
executive Bob Dudley said yesterday.
Thermal coal prices fall at NWR
nCentral European coal producer
New World Resources yesterday said
prices for thermal coal had plunged 19
per cent this year to €60 (£51) a
tonne, due to oversupply in the
market, which sent its shares tumbling
on the market yesterday. Elsewhere,
the average sale price of coking coal in
the first quarter this year was up three
per cent to €103 per tonne compared
to the fourth quarter of last year, the
producer said.
Watchdogs baffled by 787 fault
nAviation authorities have admitted
they still do not know what caused a
fault that led to the emergency
landing of a 787 Dreamliner plane
earlier in the month. The US National
Transportation Safety Board said it
has found “no obvious anomalies” in
the batteries thought to have been at
the root of the problems that have
grounded the entire Dreamliner fleet.
Shares in Boeing, which makes the
planes, opened one per cent lower.
THE BUMI soap opera over who will
control the coal miner continued yes-
terday as co-founder Nat Rothschild
questioned the independence of a
new director of Indonesian subsidiary
Berau Coal, repeating his call for a
new board at the London-listed miner.
Bumi has appointed Eko Budianto
as a replacement to Rosan
Roseslani, and has also appointed
Tony Redman as technical advis-
er to Berau, in which it has an 85
per cent shareholding.
“We appointed Tony Redman, a
former head of Anglo Coal, as
technical adviser and Eko
Budianto as president
director to strengthen
operational manage-
ment at Berau,” Bumi
said last night.
But Rothschild said
earlier in the day
that Budianto was
not truly independ-
ent. Instead, the
banking scion wants
Rothschild calls
again for new
board at Bumi
BY CATHY ADAMS
to appoint Brock Gill as chief exec of
the coal miner, and veteran Australian
miner Wallace King as chairman.
Earlier this month, the financier
demanded a general meeting to dis-
cuss plans for a board overhaul, which
includes ousting 12 out of 14 current
directors. Yet the two directors that
escaped his proposed cull – Steven
Shapiro and Graham Hearne – have
said they do not support his plans.
Rothschild’s plan for the future
of the FTSE 250 miner has support
from four Bumi shareholders so
far: Schroders’ Richard Buxton,
John Duffield at Brompton Asset
Management, Sofaer Capital and
Taube Hodson Stonex.
Bumi is expected to dis-
tribute a circular to share-
holders this morning
detailing when the gen-
eral meeting will be held.
It is expected to be held
around the last week of
February.
As well as being co-broker on the placing,
RBC Capital Markets is also acting as the
sole global bookrunner on the transaction.
Martin Eales, European ECM and corporate
broking managing director at RBC Capital
Markets led the team on Minera’s placing.
The team also included colleagues Stephen
Foss and Richard Hughes.
Martin Eales joined RBC in 2006 from Collins
Stewart, though he has been advising AIM
and main market companies on takeovers
and listings since 1998. He became the
corporate finance director at Westhouse
Securities in 2004, after helping transform
the business from its previous guise as
Brown, Shipley & Co.
In the past, Eales has advised several
natural resource players including Petra
Diamonds, Aureus Mining and Pan African
Resources.
Eales was involved in RBC’s role as joint
broker to AIM-listed oil and gas explorer,
Chariot Oil & Gas, which purchased an off-
shore exploration licence from the Moroccan
government in October last year.
The director also advised Allied Gold on its
acquisition by Santa Barbara, which was
completed in August last year.
RBC has a long track record of fundraising in
the mining sector, having secured the role
of joint corporate broker for FTSE 250 min-
ing firm African Barrick Gold in August 2011.
On this particular deal with Minera,
Jennings Capital, Fraser Mackenzie,
Desjardins Securities, Canaccord Genuity
and finnCap also worked on the offering.
Canaccord Genuity is the nominated adviser
and broker for Minera in London, where
Andrew Chubb and Sebastian Jones worked
on the team. FinnCap is the co-broker in
London, where Geoff Nash, Matthew
Robinson and Elizabeth Johnson were
involved with the placing.
ADVISERS RBC CAPITAL MARKETS
MARTIN
EALES
RBC CAPITAL
MARKETS
OUTSOURCING company Mitie
said yesterday it expects total
revenue growth to be higher in the
second half on the back of its
recent Lloyds Banking Group
contract win and acquisition of
healthcare group Enara.
Mitie, which bought Enara last
October for £110.8m, said it
remained focused on the
healthcare, local authority and
social housing markets in the
public sector. It said yesterday it
had netted a waste management
contract worth £3m with Kings
Mitie on track for strong second
half as contract wins pay off
BY CATHY ADAMS Health Partners, and had retained
a £4.7m cleaning contract with the
East Hull Primary Care Trust.
With regards to the private
sector, the FTSE 250 outsourcing
firm said it continued to see
growth. Last year it secured a
£775m five-year contract with
Lloyds Banking Group, and a five-
year contract with Sky worth more
than £100m.
Chief executive Ruby McGregor-
Smith told City A.M. that Mitie
remained focused on future M&A
opportunities in the private sector,
particularly in the energy and
healthcare sectors.
TUESDAY 29 JANUARY 2013
16
NEWS
cityam.com
Ruby McGregor-Smith has served as chief executive of Mitie since 2007
Arbuthnot Latham
The private bank has appointed
Dan Saxby as director, private
banking. He joins from Coutts &
Co, where he was an executive
director and wealth manager.
Saxby has 24 years’ experience in
the industry.
BDO
The accountancy firm has appointed Kevin Cummings
as a tax partner. He joins from Berwin Leighton Paisner,
where he was also a tax partner. He qualified as a
lawyer at Allen & Overy.
Insparo Asset Management
Lucas Wurfbain has been appointed to oversee the
asset management firm’s new food fund, expected to
be launched this year. He has previously held roles at
Fortress Investment Group, Rubicon Fund Management,
and Global Asset Management.
Aon Hewitt
The human resources firm has appointed Ian Smart and
Paul Whelan to its investment consulting practice.
Smart joins from Helvetica Wealth Management
Partners, where he was a managing director. He has
also worked at Lazard Asset Management. Whelan joins
from Aviva Investors, where he was a fund manager for
credit fixed income funds. He has also worked at
Henderson Global Investors and UBS Global Asset
Management.
Kuber Ventures
The Enterprise Investment Scheme multi-manager
platform provider has appointed Brett Williams as
adviser to its senior management team. He is a former
chief executive of Cofunds, and was part of the Old
Mutual team that acquired Skandia UK. He then became
chief executive of that company.
Baillie Gifford
The investment partnership, has announced the
appointment of Tom Walsh as deputy manager of the
Monks Investment Trust. He has worked as an
investment manager in Baillie’s UK equity team since
2009. Walsh was previously a fund manager at Fidelity
International, an analyst Merrill Lynch, and has also
worked for Deloitte.
WHO’S SWITCHING JOBS Edited by Tom Welsh CITY MOVES
in association with
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
LATIN American miner Minera is
hoping to raise up to C$32m
(£20m) in a share placing for the
development of its Ollachea gold
project in Peru, it announced
yesterday.
The offering will be marketed in
Canada, the UK, the US and in
certain jurisdictions in South
America on a private placement
basis.
The Ollachea project in Puno,
southern Peru, is in a highly
prospective area, according to
Minera. The gold producer
completed a feasibility study on
the project at the end of last year,
and it is currently in the
permitting stage.
The funds raised will be used to
develop the project, and will be
Minera launches £20m share
placing for Peruvian gold mine
BY CATHY ADAMS
spent on engineering costs and to
advance the exploration tunnel.
The expected capital
expenditure for the project is
$177.5m (£112.9m), and full
production at Ollachea is expected
to begin the first half of 2015.
The placing will be held through
a syndicate of investment dealers
led by RBC Capital Markets as sole
global bookrunner.
Assuming the placing is a
success, it will be the second
equity raise by Minera in the past
year, following the $33m raised
last March.
The Latin American producer
currently produces around 35,000
ounces a year from its open mine,
the Corihuami mine in Peru.
Shares in Minera sank yesterday
on the news to close down 4.76 per
cent at 50p.
REFINED gold output at Russian
producer Polyus Gold jumped by 12
per cent last year to a record 1.68m
ounces, it said yesterday.
The gold producer, which
exceeded its 2012 production target
by five per cent, yesterday recorded
the fifth consecutive year of growth
in gold output.
The yellow metal producer
forecast refined gold production for
this year at between 1.7 and 1.8m
ounces.
Chief executive German Pikhoya
yesterday hailed an “exceptional
performance” from its large Russian
Olimpiada and Blagodatnoye mines,
and steady improvements at its
Kuranakh operations, which helped
to drive the record year on year
output.
Polyus Gold
output jumps
BY CATHY ADAMS
Nat Rothschild criticised
the new appointments
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
TUESDAY 29 JANUARY 2013
17
cityam.com
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LONDONREPORT
B
RITAIN’S top share index
breached the 6,300 level for the
first time since May 2008
yesterday, driven by strength in
banking and energy stocks, although
that heady height failed to hold for
the close.
Global giant HSBC added the most
points to the FTSE 100 index, with its
1.0 per cent advance alone, accounting
for almost 5 index points and helping
the UK banking sector to a 0.8 per cent
gain.
Goldman Sachs reiterated its “convic-
tion buy” rating on HSBC on the basis
of relative valuation, return trends
and expectations.
The bank also repeated its “buy” rat-
ing on Barclays, the top percentage
blue chip gainer, up 1.7 per cent.
But Goldman downgraded its rating
for Royal Bank of Scotland to “sell” as
it believes the majority-state-owned
lender is the most exposed to near-
term regulatory risk.
RBS shares still gained 0.5 per cent
with the banking sector overall buoyed
by Friday’s news that banks will repay
early €137bn of crisis loans taken a
year ago from the European Central
Bank, and which ECB President Mario
Draghi has said “avoided a major,
major credit crunch”.
The bigger-than-expected repayment
was seen as a sign that at least parts of
the financial system are returning to
health.
Other financial stocks also took
heart from the move, with Aberdeen
Asset Management rallying 1.6 per
cent, and insurer Standard Life up 1.2
per cent.
The FTSE 100 index closed up 9.96
points, or 0.2 per cent at 6,294.41, hav-
ing reached a fresh four and three
quarter year peak of 6,311.26.
“The benchmark has now seen off
four major figure levels in under a
month and is now 6.7 per cent higher
than where it started the year which
has caught even some of the more
bullish investors by surprise,” Angus
Campbell, Head of Market Analysis,
Capital Spreads said.
“Since we’ve seen such considerable
strength in equity markets so far this
year there's bound to be some resist-
ance near the highs, but with the
6,300 level now behind us for those
bullish investors the only way is up,”
Campbell added.
Market heavyweight Vodafone was
also a big contributor to the FTSE 100
advance again, up 0.5 per cent and
adding more than 1.6 points to the
index as the telecoms firm extended
its advance into a third consecutive
session. Traders have cited talk that
the mobile telecoms group may sell its
stake in its US wireless joint venture to
partner Verizon as the main reason
behind the rally.
Energy stocks also added their con-
siderable strength to the blue chips,
providing over three points of the
index’s advance, ahead of the sector’s
upcoming earnings season.
FTSE breaches
the 6,300 mark
but loses steam
CITY
YOUR ONE-
STOP SHOP
BROKER VIEWS AND
MARKET REPORTS
DASHBOARD
S&P 500 dips
after its long
winning streak
T
HE S&P 500 eased slightly
yesterday after an eight-day
run of gains, while the
Nasdaq edged higher as Apple
shares rebounded.
The index remained above 1,500,
however, after closing above that
level on Friday for the first time in
more than five years. The S&P 500’s
eight sessions of gains was its
longest winning streak in eight
years.
Caterpillar shares helped limit
losses on the Dow industrials even as
the company posted a 55 per cent
drop in quarterly profit due to a
charge connected with accounting
fraud at a Chinese subsidiary and
weak demand among its dealers.
Caterpillar’s shares, down 2.2 per
cent in the past three sessions, rose
two per cent yesterday to $97.45.
“I think this multi-year high is real-
ly something that’s in play both for
shorter-term traders and with folks
with money on the sidelines,” said
Bucky Hellwig, senior vice president
at BB&T Wealth Management in
Birmingham, Alabama.
Bargain hunters lifted Apple after
the tech giant’s stock dropped 14.4
per cent in the previous two ses-
sions. With Apple’s stock up 2.3 per
cent at $449.83, the iPad and iPhone
maker regained the title as the
largest US company by market capi-
talisation as Exxon Mobil fell 0.7 per
cent to $91.11 and slipped back to
second place.
On the down side, Boeing fell 1.4
per cent to $74 on worries about the
potential hit from delays in its 787
Dreamliner programme.
The Dow Jones industrial average
was down 14.05 points, or 0.10 per
cent, at 13,881.93. The Standard &
Poor’s 500 Index was down 2.78
points, or 0.18 per cent, at 1,500.18.
The Nasdaq Composite Index was up
4.59 points, or 0.15 per cent, at
3,154.30.
BESTof theBROKERS
CAPITA
Canaccord Genuity has downgraded the stock from “hold” to “sell”, with a target
price of 650p. While Capita remains a “well-managed business”, says Canaccord,
“its investment case has diminished”. The broker warned that medium-term growth
rates could be slow due to changing government initiatives. Investors reacted
negatively to the downgrade yesterday as the stock closed down 0.88 per cent.
TATE & LYLE
Numis Securities believes chief executive Javed Ahmed’s strategy of “focus, fix,
grow” has been well received by investors and that there is already evidence of
major changes to the business culture. The broker says that while Tate & Lyle retains
“some volatile and commoditised businesses”, it is impressed with the business and
has initiated and “add” stance with a target price of 910p.
DIRECT LINE GROUP
Canaccord Genuity has initiated coverage of Direct Line Group following its
successful flotation at the end of 2012. It has issued a “Buy” recommendation with
a target price of 240p, citing the potential benefits of improved margins from the
motor insurance business and “the net benefit from a £100m cost reduction
programme”.
NEW YORK
REPORT
Capita PLC
22 Jan 23 Jan 24 Jan 25 Jan 28 Jan
p
800
795
790
785
780
775
787.00
28 Jan
Tate & Lyle PLC
22 Jan 23 Jan 24 Jan 25 Jan 28 Jan
p
835
830
825
820
815
810
805
800
824.00
28 Jan
Direct Line Insurance Group PLC
22 Jan 23 Jan 24 Jan 25 Jan 28 Jan
p
226
224
222
220
218
216
214
224.41
28 Jan
FTSE
28Jan 22Jan 23Jan 24Jan 25Jan
6,325
6,300
6,275
6,250
6,225
6,200
6,175
6,150
6,294.41
28 Jan
Q
UANTITATIVE easing (QE) is
like macroeconomic doping.
America is like Lance
Armstrong.” Or so a British
journalist overheard at
Davos. Relative to the size of the
economy, of course, the UK is a more
likely Armstrong than the US. Central
bank asset purchases here have been
about 25 per cent of GDP, compared
to less than 15 per cent in the US and
5 per cent in the Eurozone.
There’s understandably an
increasing scepticism about the
effectiveness of QE and continued low
interest rates. The Treasury line since
2010 has been that fiscal contraction
and monetary activism would lead to
recovery. The reality has been quite
different. In 2010, the Bank of
I
N ORDINARY parlance, “austerity”
means a period of cutbacks,
spending reductions, and debt
being paid down. So when voters
hear talk of government austerity,
most of them assume that’s what the
government is doing. When they hear
(a few) economists saying that weak
growth has resulted from “austerity”,
voters think cuts to public sector pay
and public sector lay-offs are a cause
of weak growth, and that those
economists think either the pace of
cuts should slow, or even that they
should be reversed.
In fact, total government spending is
going up and the government isn’t
paying off debts at all. It is accumulat-
ing them at a record rate. There isn’t
anything happening, yet, that the pub-
lic would call “austerity”, if it under-
stood the term properly. Journalists
like Fraser Nelson and the politician
John Redwood, therefore, perform an
important service when they note that
there hasn’t really been any “austerity”
in that sense – yet.
They might also go on to note anoth-
er thing about those few economists
cityam.com/forum
Cuts to government
consumption spending
benefit the economy –
in theory and empirically
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

18
TUESDAY 29 JANUARY 2013
ANDREW LILICO
Austerity can’t have hurt UK growth
because austerity hasn’t yet begun
who allege that slow growth is the
result of austerity. Mostly, when they
urge that “the pace of austerity should
slow”, or that there should be addi-
tional “fiscal stimulus”, they don’t
mean that there should be slower cuts
to public sector pay, or fewer similar
cuts to what economists call “govern-
ment consumption spending”.
What they actually mean is this: first,
the government has raised taxes too
fast, and should have retained the flex-
ibility to introduce temporary tax cuts
as required, without threatening its
medium-term deficit reduction tar-
gets; and/or, secondly, that the govern-
ment has cut spending on
road-building and other infrastructure
too fast, and should try to find some
one-off investment schemes to take
advantage of low interest rates.
Yet despite the public confusion, and
the public service done by these few
commentators prepared to say the
Austerity Emperor has no clothes,
some senior economists prefer to
attack the truth-tellers. On Sunday, the
respected head of the National
Institute of Economic and Social
Research, Jonathan Portes, devoted a
whole blog to attacking what he see as
the “errors” made by the likes of
Nelson and Redwood.
Portes said it was an “error” to say
that the fact that the government
deficit is rising, not falling, means
there is no austerity. That’s obviously
not an error in the normal sense of the
word “austerity”. But Portes wanted to
use “austerity” in a technical sense to
mean measures likely to make the
economy larger rather than smaller.
Well, he’s wrong on that too. Portes is a
“Keynesian” economist. And in stan-
dard Keynesian models, a deficit is
what’s called an “injection” into the
economy – stuff “injected” makes the
economy bigger. The naï ve version of
the theory normal in political debates
says the larger the deficit (the more
government spending is higher than
taxes), the bigger the injection. So if
the government is running a huge
deficit, as it is now, that means GDP
ought to be going up. It isn’t. And this
is pretty good evidence that the theory
is wrong. Nelson and Redwood are
right to point that out.
Portes also says Nelson and Redwood
have no basis in “economic logic” for
asserting that spending cuts should be
any less a growth-damaging way to cut
a deficit than tax rises. But Portes is
just wrong. Tax rises damage growth.
Cuts to consumption spending (like
public sector salaries, consultants’ fees,
IT support) or benefits spending mean
more growth. That’s true both in stan-
dard theory and extensive empirical
studies.
Government consumption spending
is, alas, still going up. But it’s sched-
uled to start being cut seriously now.
Spending cuts are a potential cure for
this economy, like an operation is a
potential cure for a man with cancer.
Our economy is like a man that fears
the operation, so keeps putting it off.
When he gets worse, people say: “Ah,
what’s making him sicker is that he
has an operation planned. To get bet-
ter, he should cancel the operation.”
No. What’s making him sicker is that
he keeps putting it off. And if he can-
cels the operation, he may well die.
We need to cut government con-
sumption spending so the UK econo-
my can grow faster, so that households
can in turn service their mortgages, so
they don’t default and bust the banks.
It doesn’t help public support for that
when respected economists attack
those correctly pointing out that such
spending cuts haven’t happened yet.
Andrew Lilico is a columnist for
ConservativeHome.
England forecast real GDP growth for
2011 would be 3 per cent. The
outcome was 0.7 per cent. We’re now
heading towards a triple-dip
recession, and the combination has
clearly not worked as expected.
In a speech last week, even Bank
governor Sir Mervyn King abandoned
the pretence that monetary policy
was all-powerful: it was “no panacea,”
he said. Structural factors were
holding the UK economy back and QE
was stealing spending from the
future. Others have pointed out how
QE and low rates risk mal-investment,
zombie companies, deficits for
pension funds and encouraging
governments to put off necessary
fiscal adjustments.
Opinion seems to be turning
against extraordinary measures. This
makes it all the more intriguing that
future Bank governor Mark Carney
clearly disagrees with the new King
prognosis. At Davos, he insisted
central banks could loosen policy
further through “communication”
and “other unconventional
instruments”. This means tolerating
above-target inflation for longer – a
“flexible inflation target” – or
publicly committing to low interest
rates in the future, even if inflation
picks up, to affect expectations today.
It could even mean buying up
different types of assets.
If it’s unclear whether these are
even options, it’s less clear whether
they are desirable. “Open mouth
operations,” saying that you will keep
interest rates low in future even if it is
undesirable, does not seem credible,
given the lack of a firm commitment.
Would the Bank commit to stand
aside if inflation really took off, as in
the 1970s? I doubt it. And buying
other assets, as advocated by former
Monetary Policy Committee member
Adam Posen, would be fiscal policy
(socialising certain risks) and rightly
beyond the remit of a body not
directly accountable to the public.
But overall, it’s difficult to argue
that the UK inflation target has not
already been very flexible. Inflation
has been above target since 2009.
Indeed, the Office for Budgetary
Responsibility argues that falling real
incomes, as a result of above-target
inflation (rising as high as 5.2 per
cent in 2011), have been a key factor
in suppressing recovery. Investec
forecasts that rising electricity, petrol
and food prices will push consumer
price index inflation back to 3.5 per
cent by June. In this environment, a
deliberate decision to tolerate above-
target inflation risks entrenching
higher inflation expectations.
Ryan Bourne is head of economic
research at the Centre for Policy Studies.
FRONTLINE
ECONOMICS
RYAN BOURNE
The failure of QE isn’t an excuse for further Bank of England experiments
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19
TUESDAY 29 JANUARY 2013
Effective cuts
[Re: The state is still growing – this isn’t the
right kind of austerity, yesterday]
The coalition’s failure to make any real dent
into the deficit is indicative of its failure to
undertake any meaningful reform of the
state and its functions. We’ve seen salami-
slicing – costs squeezed down and some
salaries cut. But we still expect the same
services from the government. Outside the
Department for Education, where is the bold
thinking? Even Iain Duncan Smith’s much-
vaunted welfare reforms don’t go far
enough. He is reducing benefit growth, and
chipping away at the edges of eligibility (by,
for example, looking to prevent under 25s
getting housing benefit). But too many
people still expect an income from the state.
Roger Liscombe
Growth plans
[Re: Dear chancellor: Five steps to inject
some life into a flatlining economy,
yesterday]
Mark Littlewood’s proposals have an elegant
simplicity. But I wonder whether his
suggestion that all policy be subject to a
veto by the chancellor (if it fails a growth
test) is already dead in the water. Many of
the programmes the Treasury itself expects
to encourage growth – Regional Growth
Funds, infrastructure investments, HS2 – will
cost more than they should do, even if they
encourage some small amount of extra
output. The problem, so often, is not that
government spending harms growth. Rather
that the same money could be better spent
by the private sector.
MarkBerman
B
ACK in the 1840s, almost the
entire rail network we use
today was built over just one
decade. Yesterday, the
government set out the
route that its proposed new high
speed rail line – known as HS2 – will
take to Leeds and Manchester. It
wants to build this new line in two
decades. Is HS2 a return to Victorian
ambition we should celebrate, or a
political vanity project we should
oppose?
There are two important differ-
ences between the breakneck devel-
opment of the nineteenth century
and the government’s proposals
now. First, it was private capital and
not taxpayers’ money on the line
back then. And second, the
Victorians were mostly building new
railways along routes that had often
known nothing faster than a horse
before. By contrast, the government
is building a new line to serve cities
already connected by the West Coast
Main Line, with trains travelling at
125 miles per hour.
Many Victorian investors lost their
shirts. But the railways were still
there at the end, and their cus-
tomers still enjoyed much faster and
more convenient travel than they
had before. Now we all need to
worry about whether the govern-
ment has got the benefit-to-cost
ratio on this new project right. The
billions it is planning to spend are
equivalent to well over £1,000 for
every family in Britain.
Unfortunately, the business case is
desperately weak. The benefit-to-cost
ratio outlined for the original line
(before several adjustments) has
steadily fallen. It has dropped from
£2.70 of benefits for each £1 the line
costs in the Department for
Transport’s original March 2010 esti-
mate, to just £1.70 at the latest esti-
mate in August 2012. But this is still
Should banks be concerned by the amount
of bad debt sitting on their balance sheets?
YES
There is too much debt in our banking system, and not enough
growth to service it. While a degree of forbearance by banks is
desirable – to consumers and companies – it is toxic in the long
term. If this continues, we run the risk of ending up like Japan,
where low growth and spiralling public debt will be the norm.
Banks are now trapped in a stasis: interest rates are low enough to
stop them from realising their bad debts, but aren’t high enough to
build a healthy balance sheet. Correcting this is necessary, but will
be painful. With further socialisation of losses economically and
socially untenable, it is likely that bondholders may have to take a
hit. But to return to normality, we need banks to lend, employers to
invest and hire, and consumers to spend; ultimately, high debt is
preventing this from happening. Economically speaking, one
Japan in the world is quite enough.
Michael Ingram is a market analyst at BGC Brokers.
Michael Ingram
NO
Christine Elliott
We need to stop worrying about banks. Instead, the focus needs to
be on the zombie companies and consumers themselves. Banks
are in business to lend money profitably; by now, they should have
had plenty of time to get their books in order. On the other hand,
zombie debt is delaying an economic recovery, inhibiting
investment and causing companies to fail. Personal debt further
depresses retail spending. Zombies need a reality check. They
need sensible business plans, appropriate capital structures, and
experienced teams. Not all zombies will survive, and zombie debt
will not magically disappear. While banks’ portfolio sales can help
deal with the problems, they will only do so if sold to buyers that
are committed to maximising the operational potential of the
businesses they purchase, not just recovering assets. Zombie
deniers should wake up and smell the coffee.
Christine Elliott is chief executive of the Institute for Turnaround.
HS2 cost-benefit is
a worrying mix of
naive projections
far too optimistic.
The Department is assuming that
all the time spent on board trains is
wasted; they are using an outdated
model to forecast passenger
demand; and they are not compar-
ing strategic alternatives to HS2 fair-
ly, among other things. In reality,
the benefits are almost certainly less
than £1 for every £1 spent.
HS2 will also create other prob-
lems on the existing transport net-
work. Under the current plans,
important cities like Coventry and
Stoke-on-Trent would get a worse
service than they do now. The trans-
port connections at Euston, on the
other hand, will be completely over-
whelmed, with so many more trains
going into the station.
Even if you think the business case
is robust, however, that doesn’t
mean HS2 is a good investment.
There are much better projects, with
much higher benefit to cost ratios,
which are not going ahead. With
resources scarce, and the govern-
ment spending way beyond taxpay-
ers’ means, the money available for
new infrastructure needs to be
focused on the right projects more
than ever.
The bill for HS2 is just too high. Too
much money would be spent to pro-
vide too little benefit to too few,
mostly fortunate, passengers.
Politicians should scrap this expen-
sive white elephant and look at bet-
ter alternatives.
Matthew Sinclair is chief executive of the
TaxPayers’ Alliance.
MATTHEW SINCLAIR
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FROM
DAM £99
RTN
visit cityjet.com from London City Airport
I’ve got this lingering thought about HS2.
Wouldn’t better and free Wi-fi negate the
need for speed for most commuters?
@tom_watson
The pound falls below €1.17 for first time since
December 2011. Not a good indicator of
confidence in UK economy.
@asentance
Four years of massive fiscal and monetary
stimulus. No growth, chronic malinvestment.
Time to look at underlying competitiveness?
@DouglasCarswell
The cost of HS2 is small when compared to
other areas of spending (over 20 years). The
supposed benefit is where we have problems.
@IainJJohnson
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TUESDAY 29 JANUARY 2013
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T
HE FTSE posted another day of
gains yesterday, continuing what
has been a resiliently bullish
trend. And while it is probable
that we will see a plateauing of the
stock rally this week, or even some
retracement, the trend is likely to
remain intact. This may not be a stock
picker’s market, but the global
equities surge is not going to go away
any time soon.
In the last six months, the FTSE has
gained 11.7 per cent. And over the
same period, the US S&P 500 has
added 9.3 per cent. This rise is surpris-
ing given the sluggish domestic condi-
tions on both sides of the Atlantic, as
well as a continuing European crisis
that ought to be denting investor con-
fidence. But though equities markets
shouldn’t be attracting such inflows,
investors currently have a distinct lack
of options in their hunt for alpha.
Central banks are still pumping mas-
sive amounts of cheap money into the
markets – the Federal Reserve’s open-
ended quantitative easing pro-
gramme is injecting $85bn (£54.1bn)
every month. And that liquidity has to
go somewhere. But with fears of a
bond bubble, equities are viewed by
many as the only market able to soak
up this liquidity.
GLOBAL EXPOSURE
That isn’t to say that there haven’t
been some mis-fires along the way –
notably from retailers with a large
exposure to the domestic market. But
though it is a UK-based exchange, the
benchmark FTSE 100 index is heavily
weighted with financials and min-
ers – the kind of companies with a
broad global exposure, and not solely
at the mercy of the British high street
spender. And it is these companies
that have benefited the most from
loose monetary conditions and other
global macro dynamics.
So how long can this market run?
The UK equity explosion:
Safer than it may appear
TRADING MANAGEMENT WEALTH
other risk assets. It has been on the
edge of the investment conversation
for the past 18 months. But last week,
Bank of America Merrill Lynch chief
investment strategist Michael
Hartnett touted 2013 as the year the
great rotation will finally arrive, and
it is likely that there will be many to
follow in his wake.
There, of course, exists the threat
that a black swan event could cause
the stock market to blow up. But a
hedged and diversified exposure
should allow investors to continue to
get some bang from the equities mar-
ket into the second quarter of 2013
and beyond.
Nobody truly believes that this rally
will not come thumping back down to
earth. It has been fuelled by cheap
artificial money and, at some point,
that money is going to become base-
less. But there is no reason why
investors cannot enjoy the ride until
then.
And many signs point to there being
plenty more life in this bull run yet. As
the year rolls on, it is likely that we
will be hearing more about the great
rotation. As market volatility falls to
lower pre-crash levels, the view is that
investors – both retail and institution-
al – will roll out of the safety of cash
positions and back into equities and
CARNEY TALKS UP
GROWTH POLICIES
DAVID BUIK
VIEWFROM THE CITY
L
AST week’s desperately
disappointing GDP data has
attracted comment and
consternation from
government supporters and
critics alike. The fact that GDP fell
by 0.3 per cent in the last quarter
of 2012 tells us that the UK
economy flat-lined over the year.
Clearly, the recovery process is
teetering on the vortex of the
abyss, and the threat of a triple-
dip recession is now staring us in
the face. Nothing new about that
statement you might say.
However, this dire data
coincides with positive news on
employment. It also sits next to
comments attributed to Mark
Carney, the governor-elect of the
Bank of England at the World
Economic Forum in Davos, which
may signal changes in monetary,
and perhaps fiscal policy, which
could be positive for growth.
In recent years, the labour
market has been more buoyant
than it deserves to be,
considering the fragility of the
economy. There are far more
people in work in the UK than
seems justified. The question that
must be asked is how long this
gravity-defying feat can be
maintained. There is little doubt
that unemployment would be
higher if banks had not been
more compassionate and lenient
– hence bankruptcies are lower
than they would have been.
The fact that sterling is about
25 per cent lower in value than it
was five years ago may also have
helped British exports. Further,
experience tells us that the ability
to rehire the same quality of
employee is often tricky – thus
fewer people will have been made
redundant than might have been
the case, given an assumption
that growth will return at some
point.
Over the years, growth figures
are also highly suspect and
subject to revision. There is no
doubt that the contribution made
by the financial sector to growth
in the first seven years of the last
decade was clearly greatly
exaggerated. Since the 2008
financial crisis, we have had a
reality check.
In Davos, Carney spoke of
perhaps being more flexible about
inflation targets, with a view to
allowing growth to be given every
chance. This thinking is not
wholly different from that of the
existing Bank of England
management. But clearly
employment data and growth will
have greater influence on fiscal
and monetary policy. Carney also
appears to be insistent that
changes to banking regulation,
and regulation of hedge funds
and peripheral financial markets,
must be implemented in the next
two years to avoid another crisis
and irrational talk of too-big-to-
fail. Most interestingly, it is
understood that financial
transgressors will be named and
shamed.
There remains plenty of upside in the rally, writes Craig Drake
There have been some mis-fires along the way
Chief Market Strategist, Cantor Index
THE TIPSTER
ASTRAZENECA TAKES ITS MEDICINE
I
NVESTORS are eagerly waiting to hear
from AstraZeneca’s new chief
executive, when the company reports
on Thursday. The new boss has the
challenge of reinvigorating the
pharma giant after recent investor
frustration, and has already shuffled the
boardroom. As well as headline numbers,
traders will be focusing on the company’s
strategy to boost its pipeline of drugs. ETX
Capital quotes a price of 3142.5p-3148.5p.
Rumours of a takeover have sent shares
in United Utilities Groupstreaming
higher, adding 10 per cent in January. The
company has made significant operational
improvements recently, and looks cheaper
than some of its peers. Eyes will be on
tomorrow’s management statement,
which may jolt potential suitors into
putting their cash on the table. Capital
Spreads quotes a price of 741.10p-742.40p.
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Reaction to debates over America’s budget will be a litmus test for market conditions
funds already, according to
TrimTabs, with several trading ses-
sions still left. Almost 80 per cent of
the stocks in the S&P 500 were over-
bought last week.
“We would very much like to see a
modest and typical sell-off (5 to 7 per
cent),” wrote BTIG strategist Dan
Greenhaus in a weekend client note.
“We think such an event would help
work off some of the excesses
investors are building up.”
What’s interesting, however, is
that post-crisis sell-offs have actually
tended to be more severe than in the
past. Double-digit drawdowns have
become the new norm, as Societe
Generale notes; they are both a
cause and effect of the general port-
folio allocation away from equities
and into credit, particularly among
insurance and pension funds.
Investors, then, ought to be careful
My pick: Sell Aussie dollar rallies
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks
A strong sell-off in the Aussie dollar and Canadian dollar is a
warning that investors are suddenly positioning themselves
for weakness in commodity dollars (“commodity bloc”
dollars are Aussie dollar, New Zealand dollar and Canadian
dollar). As a result, I would look for opportunities to sell into
any breakdowns. An Aussie dollar-dollar close below $1.04
would confirm my bearish bias, and I would look to sell the
currency pair from its recent highs around $1.05.
ANALYST PICKS
US data looms over stock markets
T
OO good to be true? That’s the
growing worry among US
equity investors. Consider that
the Dow Jones Industrial
Average, up roughly 6 per cent since
1 January, is off to its best start in
more than two decades and now sits
within 2 per cent of its record
closing high. The S&P 500, for its
part, just closed above the 1,500 level
for the first time since 2007, and
recorded an eight-day winning
streak – its longest in more than
eight years.
It’s not that the rally isn’t justified.
The past six weeks have seen a steady
improvement in US growth
prospects and, perhaps more impor-
tantly, a temporary resolution of the
“fiscal cliff”. China is still growing,
Japan is shooting for the moon, and
Europe is hanging together.
America’s housing market is heating
up again and corporate earnings are
good enough to be generally ignored.
It’s all coming up roses, in other
words. But just as retail investors are
warming to the stock market, some
of the professionals would like to see
things cool off. A January record of
$55bn (£34.9bn) has poured into
equity mutual and exchange-traded
STRATEGIST
ILYA SPIVAK
My pick: Short euro-Swedish krona
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I expect the Swedish Riksbank to keep rates on hold in 2013,
and the European Central Bank to begin easing as a recession
lingers. Therefore, I went short on euro-krona at Kr8.7315 in
December. Although prices have recovered in recent weeks, it
appears to be a corrective move, which has stalled just below
Kr8.7182. I will continue to hold the short position, and may
add to it at breaks below Kr8.6680, which will confirm a
resumption of the bearish trend.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short Aussie dollar-yen and euro-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
We have been seeing extreme volatility recently, while
volume hits multi-year lows, and risk assets rise to new highs.
This represents a strong contrarian signal to me, but I need
confirmation before I enter into any trades. If we see a clear
shift in sentiment, I will consider shorting both Aussie dollar-
yen below ¥92.50, and euro-dollar below $1.34. For a less
extreme trade, the correction in sterling-New Zealand dollar
looks exhausted, and I may go long from NZ$1.8850.
TUESDAY 29 JANUARY 2013
MANAGEMENT WEALTH
cityam.com
what they wish for; and this behav-
iour, while it lasts, is also a reminder
that healthy “old normal” market
conditions haven’t returned just yet.
Still, there is another sense in
which a sell-off could be useful. Just
as people often learn more from
errors than from success, so too
investors might glean from any cor-
rection a clearer sense of the mar-
ket’s next major move. A sell-off,
spurred by a hawkish statement
tomorrow, following the Federal
Reserve’s two-day policy meeting, is
far different from a sell-off spurred
by a disappointing US jobs report on
Friday. The former suggests funda-
mentals are firm enough to warrant
less central bank policy support; the
latter, that they are not.
The looming budget sequester –
the automatic spending cuts slated
to begin on 1 March – serves as a
similar litmus test. If stocks start to
sputter on every hawkish comment
from a senator or congressman in
Washington, it’s a sure sign
investors still aren’t fully confident
that private-sector growth alone can
power the US.
Kelly Evans is a CNBC anchor. You can
follow her on Twitter @Kelly_Evans
TRADING
22
QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ
CNBC
COMMENT
KELLY EVANS
But the end of recent rallies could be useful corrective for investors
LIFE&STYLE
TUESDAY 29 JANUARY 2013
24
cityam.com
FOOD & DRINK
RESTAURANT
MURANO
20 Queen St, W1J 5PP
Tel: 020 7495 1127
FOOD hhhhi
SERVICE hhhhh
ATMOSPHERE hhhii
Cost per person: £200
AMUSE
BOUCHE
BRUCE WILSON
Head chef, Paternoster Chop House
It is high time
the steamed
pudding made
a come-back
C
an you remember the last time you
ate Spotted Dick? I’m betting that
for many of you it was several
decades ago at school, covered in
lumpy custard. Aside from that eternal
favourite sticky toffee pudding, we don’t
tend to eat a lot of steamed puddings
these days. This is a shame because, as far
as I’m concerned, they are up there with
the poshest delicacies.
The origin of steamed puddings is one
of necessity – in the days before cookers,
the pudding would be rolled in a cloth and
suspended in the cooking pot over the fire
along with the main meal as the most
efficient way of cooking two things at
once. It was a way of making the most out
of what was available, using up beef fat
suet mixed with flour and honey or spices
if they were available to make a filling
meal.
The modern steamed pudding falls into
two camps. On the one hand you can have
a butter sponge which can be made very
similarly to a basic cake recipe, referred to
as a pound cake, with the addition of
whatever flavours you like – lemon,
marmalade, treacle, golden syrup and
ginger, for instance, all infuse the sponge
perfectly. Or there is the more traditional
suet sponge, made without butter or
(usually) eggs, which tends to be denser
and takes dried fruits really well – for
instance spotted dick, jam roly-poly or
clootie dumpling.
Personally, I’m hoping for a steamed
pudding renaissance. At this time of year,
these substantial puds, served with
lashings of real custard, are just the thing
to get you through the cold days. They’re
a wonderful way to finish off a cosy
Sunday roast or even a winter dinner
party with friends. True, they’re not good
for the diet, but they are great for
warming the hear.
T
o some, the Italian-influenced
Murano is a quiet jewel in the
crown of Mayfair’s food scene;
to others it is a little on the
stuffy side – too many starched white
tablecloths and expensive-looking
shades of grey. Few quibble about the
quality of the food.
It was opened by Angela Hartnett
back in 2008, alongside Gordon
Ramsay, who gave her her first break
as a young chef. She became sole
owner in 2010, ending their 17-year
partnership (unusually for Ramsay
without a hint of acrimony). It has
changed little since the sweary chef
departed, keeping the impressive
lunchtime set menu at just £25 for
two courses or £30 for three (and for
a Michelin-starred joint with a
celebrity-chef owner in the heart of
Mayfair, this is pretty remarkable,
even if the obligatory bottle of wine
will double the cost of your meal).
But earlier this month I went
down to try something altogether
more opulent: a new five-course
Krug-matched seasonal menu, which
is usually served at Hartnett’s chef’s
table (although if you ask nicely she
will prepare it for you at a regular
table, too). The idea is to present a
variety of flavours to show the
versatility of the champagne. So far
so good.
First up was a scallop and bream
ceviche with vegetable tempura and
horseradish cream. The plump slivers
of scallop had a decadent, fatty
sheen to them, which the Krug
Grand Cuvée cut through like a hot
knife through butter.
Prawn ravioli with fennel purée
was my pick of the courses, the
delicate prawns practically melting
on the tongue – helped on its way by
the more intense Krug 2000. The
main was rose veal with spiced
bread, an excellently rich (and more
ethically acceptable) cut that was
somewhat overshadowed by the star
of the night’s show: the Krug 1998,
which is hands-down the finest
champagne I’ve ever tasted.
Then Hartnett threw us a swerve
ball. “Can you tell what that is?”
asked the waiter as he served five
beige rocks in a small bowl. We
deliberated before asking if it was
toffee, or maybe tablet. Nope.
Parmesan cheese. Pure,
unadulterated Parmesan cheese. As a
counterpoint to the champagne
(back to the Grand Cuvée) it was
interesting – the acidity of the
fizz really neutralises the sharp
tang of the cheese – but I still only
got two chunks through before the
idea of eating more blocks of
Parmesan became more than I could
bear.
Dessert was a more traditional
affair – a ginger pain perdu (egged,
buttered and fried French bread)
with Earl Grey jelly and ginger ice
cream. Although pleasingly moist, it
lacked that certain je ne sais quoi, or
whatever the Italian equivalent is,
although by this point the
champagne was flying down a treat.
As you would expect, a Krug
tasting menu at a Michelin-
starred restaurant in one of the most
expensive parts of London doesn’t
come cheap – our bill was over £200
a head – but when you take into
account that a glass of Krug Grand
Cuvée sells for £35 (and the vintages
considerably more), it’s not all that
unreasonable. The food was very
good, sometimes close to great, but
unless you absolutely can’t live
without the champagne, I’d forgo
the bubbles and get in on that
lunchtime action for a fraction of
the price.
Murano aims to wow with Krug
Can Murano’s new menu justify the price tag, asks Steve Dinneen
The experimental chef on how he teamed up with Krug to
serve up the world’s finest happy meal, by Steve Dinneen
Murano, owned by former Gordon Ramsay protégé Angela Hartnett
Experimental chef
Nuno Mendes
W
hen Krug decided to host
an event based around the
concept of happiness, they
called on Nuno Mendes,
the experimental Michelin-starred
chef behind Bethnal Green’s
Viajante restaurant. The ambitious
project aimed to create the
ultimate dining experience –
helped along, of course, by some of
Krug’s finest fizz. We caught up
with Mendes to ask him how you
go about creating the ultimate feel-
good food.
“The concept is very similar to
the super club I used to run, called
the Loft Project,” he says. “It is a
very personal thing – it’s a big
team cooking for just 16 people at
a time. It means you can interact
Nuno Mendes: how to create the ultimate dinner party
with and get to know your guests,
spend the night with them. The
communal dining set-up is great –
I like the idea of a dinner party. In
London people are so busy and it
can be difficult to organise. This is
especially hard for people who are
not from the UK, who are used to
sitting around a big table with
their friends and family.
“It took months to set up. Krug
wanted to have a really high-
impact event. I designed the menu,
Krug brought the champagne and
we sat and worked out which
fitted each course best.
“Hosting the event was a lot of
work and there were a lot of
changes in the matching.”
To make things even more
personal, guests were asked to fill
in a questionnaire listing things
like their favourite flower, and the
music that makes them feel
happiest, which were then hidden
around the venue.
“The questionnaire was to add
that little something extra to the
evening,” says Mendes. “We
wanted to get to know a little
more about our guests, add some
special little touches.
“ Some of the food was inspired
by memories, some by emotions.
We were working with the idea of
creating an emotional response.”
Nuno Mendes is the head chef at
Bethnal Green’s Viajante. To
reserve a table call 020 7871 0461
or log on to viajante.co.uk.
TUESDAY 29 JANUARY 2013
25
cityam.com
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London’s first female-only well-being
members club opens its doors in Belgravia
THE CAPITAL is experiencing a new
wave of women’s only clubs. While
men have long enjoyed the benefits of
the popular Turf Club and Boodle’s,
there’s been a void in the market for
women – but that’s changing.
In September Prada’s sister brand
Miu Miu opened a pop-up women’s-
only private members club at Café
Royal on Regent Street and the
interest in women’s only business
organisations like The Sorority is
soaring too. Now Grace Belgravia,
the first holistic women-only well-
being club is tapping into the
zeitgeist.
Former marketing executive Kate
Percival and business partner Chris
O’Donoghue have been working on
the project for two years and managed
to obtain £10m backing from a group
of private investors to secure an
impressive 11,500 sq ft Grade II listed
building in the heart of Belgravia on
West Halkin street.
Members pay up to £5,500 per year
and a joining fee of £2,000 to take
advantage of the impressive array of
facilities on offer.
The gym is manned by Samantha
Cameron’s trainer Matt Roberts and
the classes offer everything from
relaxing yoga sessions to intense
aerobic programs, all of which can be
done before jumping into one of the
club’s cars to head to the office in the
morning. Members can also take
advantage of the private medical clinic
managed by Dr Tim Evans, apothecary
to the Queen, which deals with
everything from clinical nutrition and
fertility issues to stress and sleep
diagnosis.
But it’s not all about health and
fitness. The club also has a spa, which
offers just about every treatment you
can imagine and celebrity hair stylist
Errol Douglas’ team of stylists are
always on hand to make sure your hair
is perfectly preened and ready to go.
If that wasn’t enough, each
member will have a designated
“angel” who will help you create the
ultimate bespoke experience to make
sure you’re putting your membership
to good use. So whether you’re after
someone to take care of you medical
and exercise appointments or pick up
your dry cleaning and organising
travel, all of your needs will be well
and truly catered for.
Grace Belgravia, 11c West Halkin
Street, SW1X 8JL. gracebelgravia.com
Naomi Mdudu
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
LAURAWILLIAMSONLINE.CO.UK
@LAURAFITNESS
Breathe new life into
your fitness routine
The start of the year always sees an influx of new ways to keep fit,
but 2013 has brought some of the most novel and hotly anticipated
classes the capital’s seen in a long time. Here’s the best of the bunch.
For the summer sports fan:
Virgin Active had the brilliant idea of
combining a group exercise class with
tennis to create Cardio Tennis, a new
workout which is said to burn up to 600
calories an hour. The chain’s new take on
the traditional game involves performing
high energy moves on a tennis court
against a soundtrack of fast tempo music
– no prior tennis experience needed. And
if you need any further persuasion,
scientists at the University of Illinois
recently found that tennis may generate
new connections between nerves in the
brain. virginactive.co.uk
For the core queen:
If you’re one of those people who has left a traditional Pilates class
wondering what all the fuss is about, you might like Pop Pilates. Dubbed
the “super intense, hard-core version of Pilates”, Pop Pilates sees you
performing the traditional bridge with weights; a plank on a Swiss ball and
dumbbells added to many of the original mat work moves. Turbo-charging
your workout is good news for your muscles, especially your core. Over
time, regardless of your workout, muscles adapt to a certain load and
intensity and won’t continue to respond in the same way so the different
routines will help combat that and keep boredom at bay too. Pop Pilates at
Reebok Gym, Canary Wharf, reeboksportsclublondon.com
For the bootcamp fan:
The bootcamp favoured by
the likes of Kim Kardashian
and Jake Gyllenhaal has hit
our shores and will launch
in Bloomsbury on 26
January. Routines take
place on state-of-the-art
Woodway treadmills,
designed to work with your
biomechanics and
minimise impact, and on
the gym floor where you’ll
pump and press your way
to your dream new year
body. Definitely worth a go
at £20 a class with no
commitment required.
barrysbootcamp.com
For the dance addict:
Say hello to Bokwa, the brainchild of
Paul Mavi, a fitness instructor who
wanted to introduce his South African
roots into his fitness routine. Bokwa
(“Bo” is for light boxing, while the
"kwa" comes from South African
dance music, Kwaito), involves
drawing sequences of letters and
numbers with your feet as part of a
fast-moving cardio dance routine,
making it perfect for the weary
Zumba addict. And the best thing
about it? It’s available at new gym
chain PureGym, the 24/7, contract-
free club, puregym.com
For the couch potato:
If you’re still trying to persuade a lazy colleague to get moving,
they might be persuaded to try Zumba Sentao, the latest Zumba
workout. Combining Zumba moves and traditional strength and
resistance exercises, Zumba Sentao takes place on and around a
chair. Yes, that’s right – if you thought your chair was only good for
tricep dips and leg raises, think again. Rumour has it Zumba creator
Beto Perez came up with the idea for Sentao when he arrived to
demonstrate a class only to find his pupils already seated and
reluctant to budge, so decided to teach his routines on a chair. It
might not get you buff in a fortnight, but if you’re a fitness-phobe,
this might be the one for you. zumba.com/sentao
For the outdoors type:
Cycling company Evans Cycles are
organising a series of mountain and
sportive bike rides that take place every
fortnight all over the UK. The idea behind
the RideIt! series was to create
affordable, fun and sociable rides that
cater to all levels, making it an ideal
choice for the novice cyclist. With around
70 per cent of your body weight being
transferred through the saddle and
handlebars instead of your joints, cycling
is a better starting place for those
carrying a little extra weight than higher
impact alternatives.
evanscycles.com/ride-it
For the golf guru:
Clubs gathering dust but keen to save face
on the course come spring? Don’t worry,
help is at hand. Urban Golf, London’s
indoor golf centres, has introduced its
Winter Rules Package for players who
want to “lift and clean up” their game
from January to March. Its new simulators
use 3Trak, a revolutionary ball tracking
system that not only measures the ball's
speed and trajectors but is also the only
system to accurately measure spin, so will
really help you brush up your skills
whatever the weather this winter.
urbangolf.co.uk
HEALTH & GROOMING
26
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
6.30pmRevista De La Liga
7.30pmSoccer Special 10pm
Revista De La Liga 11pmFootball’s
Greatest Managers 11.30pm
Football Asia 12amGolden
Moments of European Football
1amRevista De La Liga 2am
Football’s Greatest Managers
2.30amFootball Asia 3amGolden
Moments of European Football
4amRevista De La Liga 5am
Football’s Greatest Managers
5.30am-6amFootball Asia
SKY SPORTS 2
7pmGolfing World 7.30pmLive
Football Special 10.15pm-2.45am
Football First
SKY SPORTS 3
7pmNFL: America’s Game 8pm
British Basketball 10pmNFL:
America’s Game 11pmGolfing
World 11.30pmSporting Greats
12amPool 1amBadminton
2am-4amSuper League
BRITISH EUROSPORT
7pmAfrica Cup of Nations 8pm
Boxing 10pmGT Academy: Race
to Dubai 10.15pmAlpine Skiing
11.15pmWintersports: Ski Pass
11.30pm-12.30amAfrica Cup of
Nations
ESPN
6.30pmEredivisie Review Show
7.30pmESPN Kicks 7.45pmLive
Coppa Italia 9.45pmESPN Kicks:
FA Cup 10.15pmESPN Kicks
10.30pmEredivisie Review Show
11.30pmSerie A Review12am
ESPN FC Press Pass 12.30amFIS
Alpine Ski World Cup Report 1am
Planet Speed 1.30amEuroleague
Basketball Magazine 2amUFC:
The Ultimate Fighter 3amWinter
X Games 5amFIS Alpine Ski
World Cup Report 5.30am-6am
Planet Speed
SKY LIVING
7pmCriminal Minds 8pmBones
9pmCriminal Minds 10pmCSI:
Crime Scene Investigation 11pm
Jerry Bruckheimer’s Chase 12am
Bones 1amSun, Sea and A&E:
South Africa 1.50am
Supernatural 3.30amBones
4.20amNothing to Declare
5.10am-6amMotorway Patrol
BBC THREE
7pmTotal Wipeout 8pmPrince
Harry: Frontline Afghanistan 9pm
Sun, Sex and Suspicious Parents
10pmPramface 10.30pm
EastEnders 11pmFamily Guy
11.45pmAmerican Dad! 12.30am
Sun, Sex and Suspicious Parents
1.30amPramface 2amWay to Go
2.30amWorld’s Craziest Fools
3am-4amSun, Sex and
Suspicious Parents
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8.30pmThe Big
Bang Theory 9pmRude Tube: All
Things Weird and Wonderful
10pmThe Cleveland Show
10.30pmThe Inbetweeners 11pm
What Happens in Kavos 12.05am
The Big Bang Theory 1.05am
Happy Endings 1.35amThe Ricky
Gervais Show2.05amThe
Cleveland Show2.30amWhat
Happens in Kavos 3.20amRude
Tube: All Things Weird and
Wonderful 4.10amHappy Endings
4.30am-6amMade in Chelsea
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 9pmStorage Wars 10pm
Grave Trade 11pmStorage Wars
11.30pmPawn Stars 12am
Storage Wars 1amGrave Trade
2amAmerican Pickers 3amIce
Road Truckers 4amSwamp
People 5am-6amAmerican
Restoration
DISCOVERY
7pmBear’s Wild Weekend with
Miranda 8pmIce Pilots 9pmGold
Divers 10pmSwamp Loggers
11pmAuction Hunters
11.30pmAuction Kings 12am
Gold Divers: Under the Ice 1am
Swamp Loggers 2amJungle Gold
3amGold Divers: Under the Ice
3.50amSwamp Loggers 4.40am
Discovery Atlas: Russia Revealed
5.30am-6amMeerkat Manor
DISCOVERY HOME &
HEALTH
7pmHome Birth Diaries 8pmJon
and Kate Plus 8 9pmI Have a
Child with Special Needs 10pm
Emergency: Life in the ER 11pm
A&E 12amI Have a Child with
Special Needs 1amEmergency:
Life in the ER 2amA&E 3amJon
and Kate Plus 8 4amBaby Days
5am-6amStudent Midwives
SKY1
8pmLast Resort 9pmStella
10pmFILMTurbulence 1997.
11.55pmBrit Cops: Law &
Disorder 12.55amRoad Wars
3.35amCrash Test Dummies
4am-6amStargate SG-1
BBC2 ITV CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders: BBC News
8pmHolby City
9pmDeath in Paradise
10pmBBC News
10.25pmRegional News;
National Lottery Update
10.35pmThe Richard
Dimbleby Lecture 2013
11.25pmFilm 2013
11.55pmFILMFifty Dead Men
Walking: Fact-based thriller,
starring Jim Sturgess. 2008.
1.45amWeatherview
1.50am-6amBBC News
6pmEggheads
6.30pmGreat British Railway
Journeys
7pmWelsh Railways: Full
Steam Ahead
7.30pmGreat British Menu
8pmCHOICE The Mary Berry
Story
9pmLocomotion: Dan Snow’s
History of Railways
10pmThe Sarah Millican Television
Programme 10.30pmNewsnight:
Weather 11.20pmWonders of Life
12.20amSign Zone: Granny’s
Moving In: A Wonderland Film
1.20amSign Zone: Nature’s
Weirdest Events 2.20amClose
4am-6amBBC Learning Zone
6pmITV News London
6.30pmITV News
7pmCHOICE Emmerdale
7.30pmRiver Monsters
8pmCelebrity Who Wants to
Be a Millionaire? Couples
Special
9pmGreat Houses with Julian
Fellowes
10pmITV News at Ten
10.30pmITV News London
10.35pmRiver Monsters
11.35pmGrimefighters
12.05amJackpot247
3amLoose Women 3.45amITV
Nightscreen 5.05am-6amThe
Jeremy Kyle Show
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmSupersize vs Superskinny
9pmThe Undateables
10pmUtopia
11.10pm8 Out of 10 Cats
12amRandom Acts
12.05amEuropean Poker Tour
1.05amSailing: America’s Cup
Discovered 1.30amKOTV Boxing
Weekly 1.55amBeach Volleyball
2.45amBrief Encounters of the
Sporting Mind: Body Building
2.55amFILMPaper Moon
1973. 4.35amSmallville
5.15am-6.10amDeal or No Deal
6pmHome and Away
6.30pm5 News at 6.30
7pmMonkey Life
7.30pmHighland Emergency: 5
News Update
8pmNew Benidorm ER: 5
News at 9
9pmCHOICE Dallas
10pmBrain Hospital: Saving
Lives
11pmCSI: NY
12amCSI: Miami
12.55amSuperCasino
4amHouse Doctor 4.20amHouse
Doctor 4.45amMichaela’s Wild
Challenge 5.10amWildlife SOS
5.35am-6amWildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits 1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUE’S
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6 7
8
9 10 11
12 13 14
15 16 17 18
19 20
21
22
23 24
28 13
45
11 20 9
29
10 30
23 10
12 11
38
4 8 6
45
29 27
7
13
18
42
19
16
17
8
34
15
21
22
16
23
3
35
11
24
39
9
10
6
ACROSS
1 Draws in by vacuum (5)
4 Pouches (4)
6 Intimation (4)
8 Sprang up (5)
9 Maintain in unaltered
condition (8)
12 Once ___ a time (4)
13 Alleviated (5)
15 Organ enclosed
within the skull (5)
17 House attached to
one other (4)
19 North American
black larch (8)
21 Group of elite
soldiers (1-4)
22 US city known for
gambling casinos and
easy divorce (4)
23 ___ Jones, singer
who died in 2012 (4)
24 Agent used in
fermenting beer (5)
DOWN
1 Exchange (4)
2 Weak cry of a
young bird (5)
3 Lustre (5)
4 Pennant (8)
5 Pass (time) (5)
7 Body of a
church (4)
10 Major industrial
region in north-
west Germany (4)
11 Lone (8)
14 Large-scale (4)
15 Trade name (5)
16 An underwriter
of Lloyd’s of
London (4)
17 Famous London
hotel (5)
18 Island, capital
Valletta (5)
20 Standard monetary
unit of Burma (4)
A
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4

4

4


B L I M P F S O P
A U R B A N E O
D I N G O I C P
G O B N E R V E
E A R N E S T E
R T A T N
H C Y A N I D E
O M E G A C V T
V A B T E E T H
A S P I G O T E
L O T N R A C E R
1 5 2 3 7 8 9 2
2 7 3 4 8 5 9 6 1
4 8 9 2 1 7 3
7 9 8 9 5 1
1 2 7 9 8 3
3 4 5 1 6 9 8 7 2
1 2 4 1 5 2
9 5 4 8 1 3
1 2 6 3 5 3 9
7 3 1 9 5 6 4 2 8
9 7 6 8 8 9 4 7
4
4
4
4
4
4
4
4
4
The nine-letter word was
DESCALING
T
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
TUESDAY 29 JANUARY 2013
THE MARY BERRY STORY
BBC2, 8PM
Part one of two. The food writer
reflects on her life, talking about her
childhood and the people and events
that influenced her choice of career.
EMMERDALE
ITV, 7PM
All hell breaks loose when Lisa catches
Belle and Luke in a compromising
position, and she warns him not to see
her daughter again.
DALLAS
CHANNEL5, 9PM
Harris Ryland blackmails Ann, forcing
her and Bobby to confront a shocking
secret from her past. Brenda Strong
and Jesse Metcalfe star.
TVPICK
E
NGLAND’S Chris Wood has
always looked a very promising
talent but he took an enormous
stride at the weekend when he
won his first European Tour title at
the Qatar Masters.
Overnight leader Wood teed off at
the par-five 18th needing a birdie to
force a play-off. Instead he produced
a great drive, a fine iron and holed a
magnificent eagle to claim a one-
shot victory.
The 25-year-old spoke of feeling a
weight lift off his shoulders, having
signalled his talent as an amateur
and then gone close to winning
European Tour titles over the past
two years, and I think this could be
huge for him.
Although we’ve known about his
promise for a while, he’s progressed
from a good amateur career to
threatening to win and now
winning relatively quickly – and has
all the attributes to really kick on.
EFFORTLESS
Wood has a fantastic swing and is
very tall. He will only get stronger as
he develops physically over the next
10 years, which, combined with his
sound technique, should give him
effortless power.
His emergence is more good news
for European golf, as was the
performance of Sergio Garcia in
pushing Wood all the way in Qatar.
The Spaniard picked up two shots
over the final three holes, and it was
nice to see him play beautifully and
putt so well.
Over in America, Tiger Woods
wasted little time in recording his
first win of 2013 by claiming the
Farmers Insurance Open at Torrey
Pines last night. It’s worth
remembering that the former world
No1 finished last year with three
titles, so winning is not his problem
so much as winning Majors again.
Still, last night’s fog-delayed four-
shot triumph, and 75th PGA Tour
title, was a statement of intent.
Sam Torrance OBE is a multiple Ryder
Cup-winning golfer and media
commentator. Follow him on Twitter
@torrancesam
Blossoming Wood
looks set to go from
strength to strength
GOLF
COMMENT
SAM TORRANCE
Wood clinched his maiden European Tour title with an eagle at the last hole in Qatar
SPORT
27
cityam.com
TUESDAY 29 JANUARY 2013
CITY A.M.’S RACING EDITOR BILL ESDAILE WITH ALL THE LASTEST RACING INFORMATION
FOR THE
CHELTENHAM
FESTIVAL.
In association with
JOINING US FROM THE WORLD OF CRICKET…
Phil Tufnell - The most loveable ‘bad boy’
of English cricket.
JOINING US FROM THE WORLD OF GOLF…
Sam Torrance - A member of the European
Ryder Cup team a remarkable 8 times! A golfing legend!
For full Terms & Conditions please visit www.mbnpromotions.co.uk
To make a booking or request further information please
email mark.hudson@mbnpromotions.co.uk. Alternatively
drop us a line on +44 (0) 845 543 8277
Thomas Castaignede
Former French rugby union international. Known as Le Petit
Prince with 54 caps for France.
Premier Table of 10 £1,800 + VAT
Pre-event complimentary drinks reception, prime positioned
table, 3 course lunch, gift for each guest, half bottle of wine per
guest, quarter page advert in the souvenir programme.
Individual Tickets £155 + VAT
JOINING US FROM THE WORLD OF RUGBY
TO DIGEST THE SIX NATIONS 2013…
Josh LewseyMBE - Rugby World Cup
Winner. 55 caps for England and 3 for the British & Irish Lions.
ALSO IN ATTENDANCE…
Former England footballer Trevor Steven, former
England & Warwickshire cricketer Andy Lloyd,
Premiership rugby players.
PRICES...
Standard Table of 10 £1,400 + VAT
3 course lunch, cash bar, company logo in the souvenir
programme.
PLUS… The Girly Show - A collaboration of
London’s hottest and most requested dancers. Deanne Berry is
the lady who stars in the ‘Call on Me’ video!
Grown Ups Sports Day - There will be
an interactive sporting competition throughout the lunch. Who
can beat our rugby stars with the fastest pass or Sam Torrance at
the longest drive? Let the competition begin!
THE CITY COMES TOGETHER FOR THE ANNUAL LONG LUNCH. LOTS OF FUN, BANTER, DRINKS &
GREAT FOOD, WITH ABSOLUTELY NO STUFFINESS! ALL UNITED BY OUR LOVE OF SPORT! PLUS…
TABLES COMPETE IN A HOST OF INTERACTIVE SPORTS IN OUR VERY OWN ‘GROWN UPS SPORTS DAY’!
FRIDAY 8TH MARCH 2013
Midday to 5pm, The Brewery, 52 Chiswell Street, London, EC1Y 4SD
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IN BRIEF
Brown to lead Scotland at HQ
n RUGBY UNION: Scotland have
named Saracens flanker Kelly Brown
captain for Saturday’s RBS Six Nations
opener against England. Interim coach
Scott Johnson added that captaincy
was “about deed and not Churchillian
oratory, in my book”.
Bouncer on Toffees’ guest list
n FOOTBALL: Everton are set to seal
the £8.5m signing of Holland
midfielder Leroy Fer from FC Twente.
Fer, 23, nicknamed “The Bouncer” for
his physicality, was last night due to
fly to England for a medical.
Results
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TOTTENHAM have moved to mitigate
the long-term injury suffered by
Sandro by finally persuading Schalke
to let Germany midfielder Lewis
Holtby join them this week.
A bid believed to be around
£1.25m proved enough to tempt the
Bundesliga club into releasing
Holtby, who was out of contract in
the summer and due to join Spurs
on a free transfer.
The former Germany Under-21
captain, who has an English father,
was keen to accelerate the move
after deciding not to renew his
existing deal.
Holtby is expected to travel to
London at the weekend, meaning he
will miss tomorrow’s Premier League
match at Norwich and, in all
probability, the fixture at West Brom
on Sunday.
The 22-year-old is set to bolster
Andre Villas-Boas’s midfield options,
which have been depleted by a knee
injury to Brazilian Sandro, who has
undergone surgery and is thought
likely to miss the rest of the season.
Sandro suffered his injury just 25
minutes into Tottenham’s match at
Queens Park Rangers on 12 January.
Having won nine of their previous 11
games, they drew 0-0 at Loftus Road
and have since drawn with
Manchester United and suffered a
shock FA Cup defeat at Leeds.
Spurs are also short on forward
options, with Emmanuel Adebayor
representing Togo at the Africa Cup
of Nations and Jermain Defoe
battling a persistent pelvic injury,
though Villas-Boas has played down
talk of signing a striker before
Thursday’s transfer deadline.
Holtby is the north Londonders’
second signing of the January
window, after the £3m capture of
former Manchester United defender
Zeki Fryers from Standard Liege.
Spurs get their
man with £1m
deal for Holtby
ENGLAND head coach Stuart
Lancaster is refusing to panic despite
suffering two serious injury blows
just days before Saturday’s RBS Six
Nations opener against Scotland.
Centre Manu Tuilagi has been
ruled out of the Calcutta Cup clash
at Twickenham, while Lancaster
revealed prop Alex Corbisiero will
miss the entire championship.
Leicester’s Tuilagi, one of
England’s most potent threats, has
an ankle injury that had been
expected to heal by the weekend but
is now in a race to be fit to face
Ireland eight days later.
“Manu is a big loss. He was out-
standing against New Zealand,” said
Lancaster, referring to last month’s
historic triumph over the All Blacks.
“But he missed the first two games
of last year’s Six Nations because of a
hamstring and it’s an opportunity
for someone else.
“We have a pretty good idea of
how we’ll rejig the midfield. It
changes the emphasis a little bit, but
it won’t fundamentally affect the
way we play.”
Saracens’ Brad Barritt is likely to
England boss
won’t panic
despite twin
injury setback
retain his place, with Jonathan
Joseph of London Irish and
Gloucester’s Billy Twelvetrees vying
to play alongside him, although fly-
halves Toby Flood and Owen Farrel
offer alternatives.
“Brad will be in the equation and
we need to make sure we can still
break the gainline and have physical
defenders,” Lancaster added.
Corbisiero was last week ruled out
of the first two fixtures but has been
told that his knee problem will take
far longer to mend.
The London Irish star, who joins
flankers Tom Johnson and Calum
Clark in missing the tournament, is
likely to be replaced in the starting
XV by Harlequins’ Joe Marler or
Saracens’ Mako Vunipola.
“Alex is a big loss, but Joe Marler
has played well for Harlequins recent-
ly,” Lancaster said. “Mako Vunipola is
improving all the time and
[Gloucester’s] Nick Wood was out-
standing for the Saxons.”
Lancaster is also set to be without
promising Gloucester fly-half Freddie
Burns for the first two fixtures, but
full-back Alex Goode hopes to be fit to
face Scotland after making his come-
back for Saracens on Sunday.
Record-breaking United pierce
£2bn barrier after share surge
MANCHESTER United have
become the first outfit in world
sport to be valued at more than
£2bn, according to Forbes,
following a surge in the club’s
share price.
United’s $3.3bn (£2.1bn)
enterprise value is 50 per cent
greater than their nearest
challenger, American football team
Dallas Cowboys, who are worth
$2.1bn (£1.3bn) according to the US
business publication.
Shares in the Premier League
leaders were offered on the New
York Stock Exchange at $14 in
August and initially performed
badly, dipping to around $12
within a month.
But they have rallied in the past
week and, despite a slight drop
yesterday, were trading at between
$16 and $17 per share.
The increase in price has been
attributed in part to the club’s
strong commercial performance,
with United announcing deals with
Japanese paint maker Kansai and
Chinese Construction Bank earlier
this month.
United were last week placed
third, behind Spanish giants Real
Madrid and Barcelona, in Deloitte’s
Football Money League, which
ranks clubs by their turnover.
The Old Trafford side, which is
controlled by the American Glazer
family, recorded revenue of £320m
last season, the most recent for
which accounts are available, down
from £331m in 2010-11.
Deloitte predicts United’s
revenue is likely to rise this term
due in part to improved
performance in the Champions
League, and possibly the Premier
League. United currently sit five
points clear of champions
Manchester City in the top flight
and have reached the last 16 in
Europe’s top competition, a feat
they failed to achieve last season.
Holtby, who has an English father, has agreed to join Tottenham immediately
TOUGH-TACKLING former
Middlesbrough defender Emanuel
Pogatetz admits the lure of playing
in England again convinced him to
join West Ham on loan until the end
of the season.
The Austria international, 30,
completed his short-term move from
German side Wolfsburg yesterday
and could make his Hammers debut
tomorrow at Fulham.
“First of all when I heard that
West Ham wanted me, I thought it
was a club I wanted to play for
because they are a very traditional
club, with passionate supporters,”
said Pogatetz, who left
Middlesbrough in 2010 after five
seasons. “Secondly, it was good to
Hammers recruit former Boro
defender Pogatetz on loan
have the opportunity to come back
and play in England. This is the
football I want to play and I have
missed playing here.”
Queens Park Rangers manager
Harry Redknapp, meanwhile, has
blamed Twitter for undermining his
chances of signing Peter
Odemwingie, after West Brom
rejected a second bid for the
unsettled striker.
“It’s a bit of a difficult situation
for West Brom,” he said. “It’s not
worked out in an ideal way. The
whole situation has become a bit too
public. I think too many people get
involved in Twitter.”
Rangers, who have been linked
with Porto defender Rolando, host
Premier League champions
Manchester City tonight.
BY FRANK DALLERES
BY FRANK DALLERES
BY FRANK DALLERES
BY FRANK DALLERES
TUESDAY 29 JANUARY 2013
28
SPORT
cityam.com/sport
This was a huge win for
Chris Wood, who has all the
attributes to really kick on

@cityam_sport
Sam Torrance on golf: Page 27
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