RBS set for a miserable day as FSA readies Libor fine

TAXPAYER backed Royal Bank of
Scotland is expected to be hit with a
fine of around £390m by the City
watchdog and US regulators today
over its role in the Libor rigging
scandal, piling further political
pressure on the bank.
RBS, which is 82 per cent owned
by the state, is to announce a
settlement with the UK Financial
BY MICHAEL BOW
Services Authority, US Department
of Justice and US Commodity
Futures Trading Commission over
the scandal following months of
negotiations over the size and
severity of the punishment between
the parties.
The fine, which will weigh in at
around £390m, is set to be revealed
at midday, although a source said
there could be last minute changes
to the figure.
Investment banking head John
Hourican, who joined after the
bailout, is also understood to be
quitting the firm.
He will be forfeiting a £4m share
bonus, despite the fact that
regulators and the bank’s board
acknowledge that he had no
knowledge of, or involvement in,
Libor-rigging.
Hourican, who took over the
investment division after the Libor
rigging incidents, is expected to
leave the bank with a minimum
payout of £700,000, equivalent to a
year’s basic salary.
The Libor fine will be the latest in
a string of punishments handed
down by global financial regulators,
which has seen Barclays fined
£290m and UBS $1.5bn (£940m). RBS
chief executive Stephen Hester has
previously warned of a “miserable
day” in the bank’s history when the
fines are handed down. Publication
of embarrassing emails exposing
the extent of collusion between
traders is also likely to heap
scrutiny on the firm.
The outcome could prove
politically explosive for the bank,
which is still wrestling with its state
owned structure. Chancellor George
Osborne has previously said fines
should be paid out of banking
bonuses.
nComputer maker Dell taken private in largest
leveraged buyout since before the financial crisis
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nUS billionaire John Malone closes in on
$20bn deal for UK telecoms giant Virgin Media
TWO of the biggest buyout deals
since the financial crisis struck
were revealed yesterday, as
British communications firm
Virgin Media and US computer
giant Dell moved towards deals
valued at more than £12bn each.
Virgin Media, the UK’s second
largest broadband supplier,
signed off on talks late last night
with US billionaire John
Malone’s Liberty Global over a
deal expected to be worth
around $20bn (£12.8bn).
Meanwhile, PC manufac-
turer Dell ended weeks of
speculation over its future
by announcing a $24.4bn
private buyout led by chief
executive Michael
Dell. The deal is the
biggest leveraged
buyout since
Blackstone took
Hilton Hotels
private for
$26bn in July
2007.
Dell has
struggled in
recent years as
c o ns ume r s
shun new PCs
in favour of
tablets and
smartphones
and as competi-
Microsoft, which is looking to
revive a PC industry which saw
shipments fall for the first time
in a decade last year, said it is
“committed to the long term
success of the entire PC ecosys-
tem” and that it “invests heavily
in a variety of ways to build that
ecosystem for the future”.
However, Hewlett Packard, the
world’s biggest PC manufactur-
er, issued an unusual jibe at its
rival. “Dell has a very tough road
ahead. The company faces an
extended period of uncertainty
and transition that will not be
good for its customers,” HP said.
Virgin Media yesterday con-
firmed it was in talks with
Liberty Global over “a possible
transaction”. This is understood
to be a sale, which could be
announced as early as today,
when the broadband, pay TV
and mobile phone company
announces its annual results.
The two parties met in New
York last night to sign the deal,
which will pit Malone against
his old rival Rupert Murdoch,
who owns 39 per cent of Virgin
Media competitor BSkyB.
Following the announcement,
shares in Virgin Media shot up
18.5 per cent in New York to
value the firm at $12.4bn. The
British company has almost
£6bn in debt.
BY JAMES TITCOMB
tion from the East has
surfaced.
Michael Dell, who
founded the Texas-
based company in
1984, is rolling over
his 14 per cent stake
as well as putting in
a sizeable portion of an estimated
$16bn fortune.
Buyout specialists Silver Lake
Partners will put cash into the deal,
and Microsoft, which counts Dell as
one of its biggest customers, is con-
tributing a $2bn loan. Bank of
America Merrill Lynch, Barclays,
Credit Suisse and RBC Capital
Markets are adding debt financing.
“I am committed to this journey
and I have put a substantial amount
of my own capital at risk together
with Silver Lake, a world-class
investor with an outstanding repu-
tation,” Michael Dell said yesterday.
US billionaires
Michael Dell, right,
and John Malone,
lead the deals
Dell Inc
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allister.heath@cityam.com
Follow me on Twitter: @allisterheath
UK service sector swings
back into output growth
THE BIGGEST sector in the UK
economy swung back into growth
in January, banishing fears of a
triple-dip recession.
Markit’s purchasing managers’
index (PMI) for services jumped
from 48.9 in December to 51.5 in
the first month of 2013, indicat-
ing a rebound from slight decline
to moderate improvement.
With the January improvement
in manufacturing activity, this
meant the all-industry composite
output index also moved into
expansion, from 49.9 in
December, suggesting marginal
contraction, to 52.0 in January.
Analysts hailed the upbeat data
as squashing fears the economy
would register a second straight
quarter of falling GDP, and there-
fore a third technical recession in
just over four years. A return to
economic growth, after output
shrank 0.3 per cent in the final
three months of 2012, would be a
massive boon to the credibility of
chancellor George Osborne.
Chris Williamson, chief econo-
mist at Markit said: “A huge sigh
of relief accompanies these num-
bers, as a return to growth in the
service sector greatly reduces the
likelihood of the UK falling back
into a triple-dip recession.”
Turner defends permanent printing
Lord Turner, outgoing chairman of the
Financial Services Authority, has launched
an impassioned defence of financing
government spending by printing money,
arguing that within limits it “absolutelym
definitely [does] not lead to inflation.
Speaking ahead of a valedictory speech in
London today, Lord Turner, who applied
to be the next Bank of England governor,
called for “intellectual clarity” in
economic policy, including breaking the
taboo that permanently printing money
to pay for government is always bad.
Swiss banks end partner liability
Pictet and Lombard Odier, two of
Switzerland’s oldest private banks, have
broken with more than 200 years of
history by calling time on their existence
as unlimited liability partnerships.
Amazon launches virtual currency
Amazon is launching a virtual currency
through which it will subsidise developers
joining its service. Amazon said it would
give out “tens of millions of dollars” of
Amazon Coins to spend on apps and
games. Developers will get 70 per cent of
the currency spent to convert to dollars.
University cities “best” for business
University cities led by Cambridge came
top in a league table assessing Britain’s
best places to do business. Oxford and
Edinburgh take the second and third
places in Santander’s Town and City Index
Kingfisher Airlines “lost £1m a day”
Kingfisher Airlines lost £1 million a day in
the final three months of last year, a
period during which none of its aircraft
made a commercial flight. The carrier
founded in 2005 has never made a profit.
Compensation to 6,000 dead savers
More than 370,000 policyholders who had
their pensions wiped out by the collapse
of Equitable Life have been paid partial
compensation, but 6,000 payments went
to estates of those who died waiting for it.
HMRC charge taxpayers twice
Up to a thousand taxpayers paying online
through the BillPay system, managed by
Santander Corporate Banking were
charged more than once for their tax bill
last week due to a system failure at HMRC.
Lego to lay off 380 in Denmark
Lego said it will lay off hundreds of
workers in Denmark in order to move its
assembly and packaging activities closer
to “core markets.” in the Czech Republic,
Hungary and Mexico
Pringles boosts Kellogg sales
Kellogg sales jumped 18 per cent in the
fourth quarter, helped by its recent
acquisitions of Pringles crisps, growth in
Latin America and improving results in
North America.
THE HOUSE of Commons backed
gay marriage overwhelmingly last
night, although more Tory MPs
voted against David Cameron than
with him.
136 Conservative MPs opposed
the bill, which will allow same sex
marriage for the first time in
Britain, while 127 backed it and 40
abstained. 12 Tory ministers,
including Owen Paterson, the
environment secretary, and David
Jones, the Welsh secretary,
opposed the bill.
Despite less than half of
Conservative MPs voting in favour
of the bill, widespread support
from Labour and the Liberal
Democrats pushed it through. 400
voted in favour, with 175 against.
217 Labour MPs backed gay
marriage with 22 opposed, while
44 Lib Dems voted for the bill
against four who voted against it.
London MPs to vote against the
bill included Tories Sir Malcolm
Rifkind (Kensington) and David
Evennett (Bexleyheath and
Crayford), Lib Dem Sarah Teather
(Brent Central) and Labour’s
Stephen Pound (Ealing North).
Cameron said the vote was “an
important step forward for out
country”. The bill will now be
scrutinised in the House of Lords.
MPs back gay
marriage but
Cameron defied
A triple-dip recession would be a hammer blow to chancellor George Osborne
2
NEWS
BY JAMES TITCOMB
BY BEN SOUTHWOOD
To contact the newsdesk email news@cityam.com
I
F you have savings, which asset
class you choose to allocate your
wealth to is one of the most
important decisions you will ever
make. It is vital to look at very long-
term returns, and there is no better
place to find this information than
Credit Suisse’s global investment
returns yearbook, published today.
Over the last 113 years, the real value
of UK equities, with dividends rein-
vested, grew by a factor of 316.0, com-
pared to 5.5 for bonds and 2.9 for bills.
In other words, the very long-term
performance of equities – not just
their capital gains or indice values,
but crucially with reinvested income
– is gigantically superior. Another way
to look at the figures is annualised
real returns: equities delivered 5.2 per
cent a year, bonds 1.5 per cent, and
bills 0.9 per cent since 1900.
The problem with these figures,
EDITOR’S
LETTER
ALLISTER HEATH
We will have to save far more as investment returns dwindle
WEDNESDAY 6 FEBRUARY 2013
however, is that nobody has a 113-year
investment horizon. Even multi-
decade periods can vary substantially
from these very long-run outcomes,
an issue for real world investors.
Investors who buy and sell at the
worst times will massively underper-
form. Wall Street suffered a real capi-
tal loss of 67 per cent in 1929-32,
followed by a huge rebound of 50 per
cent in 1933. It suffered a real capital
loss of 39 per cent in 2008, followed
by a 23 per cent rebound in 2009. In
Britain, there was a real capital loss of
36 per cent in 1920, then a gain of 75
per cent in 1921-22. The 1970s were
crazy: UK equities collapsed 74 per
cent in real terms in 1973-74, before
surging 86 per cent in 1975.
It is clear that the world today – and
probably for the next few decades –
will be very different to what we have
seen in recent decades. From 1950 to
date, the real return on world equities
was 6.8 per cent per year; from 1980,
it was 6.4 per cent. The world bond
returns were 3.7 per cent and 6.4 per
cent, far higher than normal in the
last 33 years. We have just come out of
a period of exceptionally high returns
for many asset classes: even cash gave
a high real return, averaging 2.7 per
cent per year since 1980, far more
than in previous decades.
Perhaps most interestingly of all,
the Credit Suisse data shows how sav-
a year on an all-equity fund.
Assume a 25-year old entering a
defined contribution pension scheme
with the hope of retiring at 65 on half
their salary. If the after-costs real
investment return is 4 per cent, they
will need to contribute 10 per cent of
their salary. A more realistic assump-
tion is that the after-costs real return
will now be 1-2 per cent. This requires
a contribution rate of a crippling
16-20 per cent, the authors calculate –
and that is if they start at the age of
25. If they start any later, then the per-
centage will be much higher.
Who do you know saves a quarter or
a third of their salary for their pen-
sion? A horrible crisis is looming,
caused by low returns, one worse
than almost anybody realises.
agely equity investors have been ham-
mered in recent years. Over the first
13 years of the 21st century, the real
return on the world equity index was
just 0.1 per cent per year. Real bond
returns stayed extraordinarily high at
6.1 per cent per year – but the long
bull market in bonds, which started
in 1982, is now over, in a dramatic
and hugely important shift.
The research’s conclusions are
depressing. The high returns made
from stock market investments in the
second half of the 20th century were
abnormal; the same is true of the
high bond markets returns made of
the last 30 years and the high infla-
tion-adjusted interest rates since 1980.
The future will be one of much lower
returns. Credit Suisse estimates that
over the next three decades, global
investors can expect to earn a real
return of a maximum of 3.5 per cent
In a note Colin Edwards at the
Centre for Economics and Business
Research (CEBR) agreed that the size
of the service sector – it makes up
about three quarters of GDP –
meant expansion there was evi-
dence the UK economy would
return to expansion.
“Barring another dramatic turn of
events, early signs suggest that the
UK will more likely than not avoid
contraction in the first quarter at
side-step a triple-dip recession,”
Edwards forecasted.
But other analysts stressed that
the levels remained well-below pre-
crisis norms.
UK services rebound to quash triple-dip fears
Jan‘13 Jan‘12 Jan‘11 Jan‘10 Jan‘09 Jan‘08 Jan’07 Jan‘06
50
54
42
46
38
58
62
66 Servicesectoractivity, 50indicatesnochange
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:
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it
THE DEBATE: Page 19
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WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
Japan bank chief to leave early
nJapanese markets are expected
to rise today, helped by a sharp fall in
the yen after central bank governor
Masaaki Shirakawa decided to step
down three weeks earlier than
expected, possibly bringing forward
an anticipated shift to a more
aggressive monetary policy. Prime
Minister Shinzo Abe has made it clear
he wants someone in the job who will
be bolder than the outgoing bank
chief in loosening monetary policy.
Huhne ex-wife sought revenge
nVicky Pryce, the ex-wife of former
energy secretary Chris Huhne,
attempted to destroy his career in
revenge for ending their marriage, a
court heard yesterday. Pryce has
pleaded not guilty to perverting the
course of justice regarding allegations
she took speeding points on her
driving licence instead of Huhne.
Having previously professed his
innocence, Huhne pleaded guilty to
perverting justice on Monday.
BlackBerry reports high demand
nBlackBerry has said that sales of its
new smartphones, released in the UK
last week, have beaten expectations,
selling out in some stores. Phones
running new BlackBerry 10 software
have been made available in the UK
before anywhere else. The release of
the new handsets is seen as a make or
break moment. “The response we’ve
seen exceeded all of our launch
partners’ expectations,” UK managing
director Stephen Bates said.
SWISS bank UBS plunged to a loss in
2012 as its huge Libor fine and
ongoing restructuring programme
pushed income down and expenses
up, the institution said yesterday.
The bank also launched a SFr5bn
(£3.5bn) bond buyback as it has
sharply reduced its funding needs
and wants to reduce its costs in line
with that.
Operating income for the year
dropped 8.4 per cent to SFr25.44bn,
while operating expenses increased
21 per cent to SFr27.22bn.
That leaves a pre-tax operating loss
of SFr1.77bn, compared with a profit
of SFr5.31bn for 2011, and a loss
attributable to shareholders of
SFr2.51bn, compared with a 2011
profit of SFr4.14bn.
For the fourth quarter of 2012 the
bank made a loss of SFr1.89bn, its
second consecutive loss.
UBS was hit with a Libor fine of
SFr1.4bn in December and is already
in the process of laying off 10,000
staff as it shuts down much of the
fixed income arm of its investment
banking operations.
The bonus pool has been cut by
another seven per cent to SFr2.5bn to
reflect that, and a bail-in element
will be applied to those awards.
But the bank is making progress
in its restructuring, shrinking its
balance sheet and reducing funding
needs, leading to the bond buyback.
UBS takes loss
as shake up
gets underway
BY TIM WALLACE
WEDNESDAY 6 FEBRUARY 2013
3
NEWS
cityam.com
FINANCIAL advisers for the house-
builder Crest Nicholson have man-
aged to attract sufficient demand
for the upcoming IPO a week ahead
of schedule.
The demand for the offer has been
achieved despite the nervousness in
the financial markets on Monday
and despite the paucity of new
issues in the London markets over
the past couple of years.
Sources close to the deal, which is
the first major IPO of the year in
London, said yesterday that the
book was fully covered at the
bottom end of the 195p-230p
price range.
With a week to go before
pricing is finalised, the group’s
advisers from Barclays, Lazard,
HSBC and Numis, hope to
nudge the price towards
the middle of the range.
The housebuilder,
which was taken private
by Scottish entrepre-
neur Tom Hunter and
HBoS in 2007, will have
a market capitalisation
Crest Nicholson
flotation gets a
firm following
BY DAVID HELLIER
of between £487m to 578m after the
listing, which will include the sale of
new and existing shares.
Crest hopes to raise £56m selling
new stock, while existing sharehold-
ers, including Deutsche Bank and
Varde Partners, will sell as much as
£175m worth of shares. Deutsche
and Varde will make a healthy profit
on their investment.
Last month, the 50-year-old firm
said it would return to the stock
market to position itself for a house-
building sector recovery five years
after being taken over during a hous-
ing market crash.
The group and its chief execu-
tive Stephen Stone have been
holding back-to-back institu-
tional meetings in the UK and
US in the past few days and
their diaries are jammed
full until the closing
date next Tuesday.
The issue is being
watched by other
IPO contenders.
Stephen Stone’s
plans get backing
SCRAPPING the implicit subsidy for
banks and making sure they will be
allowed to fail when they get into
trouble should reduce public
hatred for the sector and benefit
the City in the long run, JP
Morgan’s former investment
banking head said yesterday.
Bill Winters argued US banks
have benefited from state support
and a sense of nationalism in
handing out punishments, but that
London will be better served by
remaining open to global finance.
“Banker bashing is a bad thing –
if you wake up every morning to be
Ex-JP Morgan chief says cutting
state aid for banks will aid City
BY TIM WALLACE lambasted in the headlines, it is less
likely you will want to work in the
field, and that reaction to the crisis
hurt the economy,” he told the
parliamentary commission on
banking standards. “But if you get
it right, international financiers
can work in London without
domestic banks’ actions having
repercussions for them and it
should make it more attractive for
them to work here.”
In that way the UK is better than
the US where bankers have been
attacked for decades, he said, but
argued the UK must stop attacking
the industry if it wants to remain a
good place for global finance.
Bill Winters holds some sway with MPs as he helped write the Vickers banking plans
THE INEXORABLE rise of smart-
phones and tablets has lifted British
chip designer ARM Holdings to
record profits.
The Cambridge-based firm posted a
20 per cent rise in annual profits yes-
terday, as orders for its latest technol-
ogy leapt. ARM’s chip designs, which
it licenses to manufacturers for a fee
and for royalties, are used in the vast
majority of smartphones and tablets
sold worldwide, meaning that the
global boom for these devices has
shot the company to new heights.
ARM reported pre-tax profits of
£276.5m for 2012, on a 16 per cent
rise in turnover to £913m. The firm
also signed a record number of licens-
ing deals, suggesting strong revenues
will continue in the years ahead.
Despite an expected slowdown in
smartphone growth this year, ARM’s
chief executive Warren East told City
A.M. he expects another bumper year.
“[Smartphone growth] was 45 to 46
per cent growth last year, and this
Chip firm ARM
reaps profits of
mobile boom
BY JAMES TITCOMB
year it’s predicted to be around 40 per
cent. As long as it’s 30 to 40 per cent
we are OK,” he said, adding that the
company is continuing to develop to
stay ahead of Intel, its major threat.
Intel, which designs and makes the
majority of the chips in PCs, has
repeatedly threatened to enter ARM
territory to no avail. “Intel is a very
well resourced company with very
good technology, and they have to
adjust to technological changes,” East
said. “Clearly they need to adjust their
strategy, but we’d be more worried if
we had just stayed still.”
WEDNESDAY 6 FEBRUARY 2013
4
NEWS
cityam.com
BY MICHAEL BOW
NYSE Euronext, the exchange
gearing up to be bought by
IntercontinentalExchange (ICE) in a
$8.2bn (£5.2bn) deal, yesterday said
revenues plunged 11 per cent for
the quarter ending December due
to write-offs and merger expenses.
Writing off investments in its
clearing house in Europe and
unwinding a stake in its carbon
trading exchange meant net
income for the fourth quarter fell
from $110m to $28m, it said.
This was on the back of a drop in
revenues down to $562m.
The exchange is set to be taken
over by ICE in the second half of
this year. In the meantime, the
firm is focusing on stripping
costs from the business ahead of
the merger.
The NYSE last year said it
wanted to cut $250m worth of
expenses by next year. Last year it
said it managed to strip out
$115m of costs.
“We are focused on building
momentum in our business prior
to closing the deal with ICE,”
chief executive Duncan
Niederauer said.
WALT Disney last night revealed a six per cent quarterly fall in net income due to the
rising cost of acquiring TV sports rights for its ESPN broadcast arm. The media giant said
net income was $1.38bn (£881m), down from $1.46bn, in the firm’s first quarter.
DISNEY’S RIGHTS COSTS SEE NET INCOME DROP
FACEBOOK game maker Zynga
managed to stem its losses in the
fourth quarter last year, even as its
once-colossal revenue growth
ground to a halt.
The US company, whose hits
have included FarmVille and
CityVille, reported a loss of $48.6m
(£31m), against $435m in the same
quarter last year.
Zynga has had to cut staff and
close offices as people have not
flocked to its games in the
numbers once anticipated. Shares,
which have plummeted since
December 2011’s flotation, rose in
after hours trading yesterday.
Zynga able to
reduce losses
BY JAMES TITCOMB
CME Group’s fourth-quarter profit
fell sharply from a year ago, the
exchange operator said last night.
The firm’s net income tumbled to
$167m (£106m), or 50 cents a share,
from $745.9m a year earlier, or $2.25
a share. Revenue fell to $660.9m
from $736.5m, it said.
However, stripping out a one-time
tax expense of $43.5m and increases
in deferred tax liabilities, earnings in
the fourth quarter were 63 cents a
share, in line with expectations.
Trading in the quarter fell 13 per
cent to an average of 10.2m contracts
per day. Trading in contracts tied to
stock indexes also fell.
Tax expense
knocks CME
BY CITY A.M. REPORTER
ARM Holdings PLC
5Feb 30Jan 31 Jan 1 Feb 4Feb
900
920
880
940
960
980 p
931.00
5Feb
NYSE earnings fall
ahead of merger
MASTERCARD doubled its
quarterly cash dividend and said it
would buy back up to $2bn
(£1.3bn) of Class A shares,
yesterday, just days after reporting
strong fourth-quarter results
helped by its performance in
emerging markets.
The programme will become
effective after the company
completes its existing $1.5bn
repurchase programme, which
had about $440m remaining as of
25 January. The new dividend of 60
cents per share will return $75m
every quarter.
Mastercard to
buy back $2bn
BY CITY A.M. REPORTER
WEDNESDAY 6 FEBRUARY 2013
5
NEWS
cityam.com
LISTED investment giant KKR
Financial Holdings last night
revealed a nine per cent increase
in net income for last year.
The company – a branch of
private equity giant KKR – said
revenues for the full year 2012
ticked upwards to reach $555.5m
(£481.8m), up from $542m in the
previous year.
Subsequent net income for the
full year hit $348.2m, up nine per
cent from $318.1m, or $1.75 per
share in 2011. Quarterly revenues
ending December fell however.
KKR arm adds
9pc to income
BY MICHAEL BOW
ONLINE travel agency Expedia
reported a rise in quarterly profit
yesterday led by a 24 per cent surge
in revenues.
Adjusted for items, profit was
$88.9m (£77.1m), or 63 cents a
share, the company said last night
on revenues of $975m.
Gross bookings rose 19 per cent
year on year.
This compared to adjusted net
income of $80.6m, or 58 cents a
share for the fourth quarter ending
2011. Revenues this time last year
came in at $787m.
Expedia posts
rise in profits
BY CITY A.M. REPORTER
BARCLAYS has set aside another £1bn
to compensate misselling victims as
the bill for PPI and interest rate swaps
scandals grows ever larger, the bank
revealed yesterday.
It has allocated another £600m to
the PPI redress pot taking its total so
far to £2.6bn. And it has almost dou-
bled its interest rate swaps provision,
setting aside another £400m to make
a total of £850m to date.
That leaves a total of £3.45bn across
both misselling scandals.
The Financial Services Authority
finalised its redress process for the
swaps last week and this decision has
enabled the bank to become more
certain of the ultimate bill it will face.
Although PPI compensation pay-
ments have grown to unexpected lev-
els the bank hopes the swaps
provisions will be more predictable.
Barclays sold roughly 5,000 such
products to 4,000 customers, a much
more limited level than PPI sales.
And it will review every such sale
under the redress scheme, rather
than waiting for customers to apply
as with PPI, giving the bank more cer-
Barclays hikes
misselling bill
again to £3.5bn
BY TIM WALLACE
tainty over the scale and timings
involved.
Analysts expect the other big banks
to increase their provisions in the
upcoming full year results.
Nomura’s Chintan Joshi estimates
Lloyds will increase its provisions
from £90m to £600m, HSBC will up its
own from £151m to £501m and RBS
from £50m to £800m, leaving a total
among the big four of £2.8bn.
And Joshi also expects them to join
Barclays in hiking PPI provisions in
the coming weeks, forecasting a rise of
£2.14bn to a total of £12.46bn.
The bank’s shares dipped initially on
the announcement but ended the day
up 1.7 per cent.
Barclays PLC
5Feb 30Jan 31 Jan 1 Feb 4Feb
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292.5
295.0
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302.5
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295.25
5Feb
NEW Barclays chief Antony Jenkins
yesterday told MPs and peers he
has the “iron will” needed to force
through cultural reforms at the
bank, and that his dedication to
good behaviour saw him challenge
former boss Bob Diamond on the
problem a year ago.
He said that the bank’s bonus
pool will be “adjusted substantially
to reflect the events of last year.”
Jenkins told the parliamentary
commission on banking standards
he would resign if a Libor-style
scandal struck on his watch –
unlike Diamond who only stood
Jenkins shreds Diamond legacy
as he defends his own PPI past
BY TIM WALLACE down after a grilling from MPs.
But he added any punishment
should be proportionate, noting
that although he headed Barclay-
Card for three years while it sold
PPI, he had tried to improve the
sales process and cut down on
misselling, so should only lose his
bonus, not his job.
“On occasion the executive
committee had debates on topics
around citizenship,” he told the
commission.
“I felt we should pursue that at
the bank – in the first part of last
year I sought to argue we needed
to run the bank in the way we are
now describing,” he added.
Antony Jenkins is attempting to fix Barclays’ image and improve behaviour at the bank
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THE FORUM: Page 19
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WEDNESDAY 6 FEBRUARY 2013
7
NEWS
cityam.com
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FRENCH President Francois Hollande
yesterday urged the Eurozone to set a
medium-term target for its currency’s
exchange rate, effectively bringing
the EU into the currency wars.
But Berlin quickly moved to slap
down the suggestion that Europe
would intervene in the currency mar-
ket, saying the bloc should improve its
competitiveness in other ways.
Speaking two days before an EU
budget summit, Hollande said
that European countries should
agree on a “realistic” exchange
rate for the euro.
“The Eurozone must, through
its heads of state and govern-
ment, decide on a medium-
term exchange rate,”
he told journalists at
a press conference
after the speech to
the European
Parliament.
Hollande’s call
echoes growing
fears in some
European states
and within his
Hollande says
EU should fight
in currency war
BY HARRY BANKS
Socialist government that fresh gains
in the euro could hurt exporters and
snuff out the recovery France needs to
restore its public finances.
But German economy minister
Philipp Roesler countered: “The objec-
tive must be to improve competitive-
ness and not to weaken the currency.”
Growing confidence that the 17-
nation Eurozone is past the worst of its
debt crisis has helped strengthen the
euro to around $1.35 (£1.17) in recent
weeks, although recent political trou-
bles in Spain and Italy have seen
yields jump and stocks fall.
“This is not about externally set-
ting a target for the European
Central Bank, which is inde-
pendent, but about engaging the
essential reform of the interna-
tional monetary system,”
Hollande said.
The Socialist premier also
told the parliament that the
UK could not pick and
choose favoured chunks of
EU membership.
BANKS could be forced to
publish small business lending
data for each region on a weekly
basis, Vince Cable will say this
morning, in an effort to shame
them into lending more to firms.
The business secretary will
argue that the Funding for
Lending Scheme (FLS) – which
gives cheap funds to banks to
lend onto the private sector – is
failing to benefit SMEs, with the
cash only getting through to
mortgage borrowers and big
businesses.
As part of the scheme banks
Cable says Funding for Lending
Scheme is failing to help SMEs
BY TIM WALLACE publish total lending data, but
only on a quarterly basis and not
broken down more closely.
“I have contacted the banks
demanding much more
transparency: gross and net
lending to SMEs, and overall
lending, disaggregated to
institution, branch and –
preferably – constituency or
postcode level,” the business
secretary will say.
“It should be shared not just
with the government but with
parliament, which holds the
government to account. In the
absence of cooperation, we shall
seek a regulatory solution.”
Vince Cable is keen on creating a state-backed business bank to boost lending again
BORIS Johnson will tonight call on
the government to let London
retain the tax charged on property
sales in the capital, so he can use
the money to stimulate
housebuilding in the capital.
The Mayor will tell the
Chartered Institute of Housing
that if City Hall took control of all
the stamp duty receipts raised on
London property sales – worth up
to £1.3bn a year – it would provide
a secure funding source for a 25-
year plan to build up to a million
homes in the capital.
“What is needed now is a
radically different approach which
optimises City Hall’s role, unlocks
the potential of the capital’s
boroughs, allows developers
including housing associations to
up their game and creates a stable
supply of land for housing,”
Johnson will say.
Writing in today’s City A.M.
deputy mayor Richard Blakeway
says control of the income would
allow City Hall to “tackle London’s
housing challenges with creative,
longer-term measures” such as
boosting transport links to
development sites, expanding
first-time buyer products, and
ensuring stalled building projects
are brought to the market.
Boris wants to
keep property
tax in London
BY JAMES WATERSON
President Hollande wants
to smooth currency moves
LIBERTY Global’s interest in Virgin
Media, announced yesterday, has
reignited a rivalry between tycoons
Rupert Murdoch and John Malone
which dates back a decade.
Buying Virgin Media will put
Malone in direct competi-
tion with BSkyB, which
Murdoch’s News Corp
owns 39 per cent of. The
two firms are battling for
control of the growing
pay-TV market,
while racing to sign
up broadband and
landline customers.
It will not be the
first time the two
men have locked
horns, however.
After amassing a
fortune from sell-
ing his cable TV
BY JAMES TITCOMB
company TCI to AT&T for $48bn at the
height of the dotcom boom in 1999,
Malone steadily bought shares in
News Corp until he owned a threaten-
ing 16 per cent stake.
At the same time, News Corp and
Malone’s Liberty Media were vying for
control of DirecTV, the US’s largest
satellite broadcaster.
Murdoch was then
forced to give up his stake
in DirecTV in exchange
for Malone letting
go of his share in
News Corp, an
agreement that
was finalised in
2008.
Malone has
since bought
telecoms assets
in Europe, part
of Barnes &
Noble, and
TripAdvisor.
8
LIBERTY GLOBAL/VIRGIN TIE-UP
cityam.com
The pair’s rivalry dates back a decade
0
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Virgin Media 3.8m
Talk Talk 80,000
BT 770,000
0
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10
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Sky 4.1m
Virgin Media 4.2m
Talk Talk 4.1m
BT 6.5m
0
5
10
M
i
l
l
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Sky 3.9m
Virgin Media 4.2m
Virgin Media 3m
Talk Talk 4.1m
BT 9.9m
0
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30
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i
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Vodafone 19.3m
MOBILE
LINE RENTAL
BROADBAND
TELEVISION
0
2
22.5m
Three 8.8m
EE 27m
UK TELECOMS CUSTOMERS
OCTOBER 2005
Lengthy discussions between the UK’s two
dominant cable operators results in NTL
agreeing to pay $6bn to buy Telewest.
JULY 2006
Just a few months after completing the
merger NTL:Telewest agrees to buy Richard
Branson’s Virgin Mobile in a deal valuing
the phone network at £962.4m.
FEBRUARY 2007
The company’s products are merged under
the single Virgin Media brand. The business
becomes the first UK operator to offer tele-
vision, broadband, mobile phone and land-
line phone services on the same account.
MARCH 2007
Sky TV channels are removed from Virgin
Media for 20 months in a dispute over costs.
MARCH 2010
Virgin Media launches the first widely avail-
able 100mb/s broadband service in the UK.
MAY 2012
Virgin Media starts providing Wi-Fi on
London Underground stations.
STRAIGHT TO CABLE: VIRGIN MEDIA’S STORY
F
i
g
u
r
e
s

f
o
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3

2
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Malone restarts
decade-long
Murdoch feud
VIRGIN MEDIA, Britain’s second-
biggest broadband provider, will
announce its sale to US tycoon John
Malone’s Liberty Global as early as
today, after a deal worth around
$20bn (£12.8bn) was signed late last
night in New York.
The telecoms group, which offers
pay-TV, broadband, landline and
mobile services, announced talks yes-
terday morning, pointing to “a possi-
ble transaction”, although
it did not elaborate.
News of the talks
sent shares up 18 per
cent yesterday, giving
Virgin Media a mar-
ket valuation of
£7.8bn. The deal will
also include the compa-
ny’s £5.7bn of debt.
Liberty Global, though
based in New York,
owns telecoms
companies in 11
European countries, and is under-
stood to see huge potential in the UK,
where the pay-TV market is far less
saturated than in the US.
Between them, BSkyB and Virgin
Media have 14.1m pay-TV customers,
over 95 per cent of the market but
still only around half of the house-
holds in the UK.
Virgin Media’s expertise in signing
customers onto triple-play (landline,
broadband and pay-TV) or even
quadruple-play (including mobile
phone packages) could also reap
rewards for Malone’s operations in
the US, where firms are trying to put
more customers onto these packages.
A deal would hand Richard
Branson, who was instrumental in
Virgin Media’s founding in 2007, a
$600m windfall. His Virgin Group
owns three per cent of Virgin
Media, although this is
down from 10 per cent
a few years ago.
Richard Branson
WEDNESDAY 6 FEBRUARY 2013
9
LIBERTY GLOBAL/VIRGIN TIE-UP
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MARC SIDWELL
J
OHN Malone’s bid makes good
sense for Virgin Media. Born of
the pioneering consolidation of
UK cable and mobile firms to
build Britain’s first quadruple-play
media firm (providing broadband
internet, fixed-line telephone, mobile
telephone and television services), the
resulting company has acknowledged
it remains vulnerable to a larger-scale
consolidation by its rivals.
Joining a global player like
Liberty Global, with operations in
13 territories and a growing
European footprint offers the sort
of economies of scale and
competitive heft that secure futures
are built on in a cut-throat market.
That is, if the longstanding rivalry
between Rupert Murdoch and
Malone doesn’t simply up the ante.
For all the natural interest in that
potential corporate face-off, Malone
is making a mistake if he imagines
he is buying a television company.
Virgin Media’s cable broadband
internet is more profitable than its
television services, according to the
most recent annual report, and
while it is the second largest in pay
TV in the UK after BSkyB, the
difference is significant, with Sky’s
10m-plus TV customers outclassing
Virgin’s 3.8m.
By its nature as a multiple-play
company, Virgin has to bundle its
customers together, to maximise
revenue and minimise churn, with
subscription to more than one
service helping to lock users in for
longer. But this model requires a
healthy future for all four media
segments in order to look robust.
For instance, Virgin’s most
profitable customers are those who
are triple-play: subscribing to
broadband, television and fixed line
telephone. But Virgin has candidly
described its fixed telephony
business as in decline and not likely
to improve. That is thanks not just
to a shift to mobile-only phone use
but also to the disruptive transition
from voice to data, with Skype and
related voice-over-internet-protocol
firms providing a service hard for
fixed lines to outcompete on price.
Meanwhile pay television is
another marketplace under
pressure from innovative providers
like Netflix and the ease of access to
free or pirated video content online.
Virgin does have a massive
competitive advantage in its cable
network, enabling it to offer fast
broadband independently of BT.
However, the overlap between its
broadband customers and its
mobile customers has been poor,
which must be why I keep getting so
many leaflets imploring me to sign
up for a Virgin BlackBerry.
The firm’s imperative has to be
keeping its broadband advantage
while developing unmissable
television services and packaging
both so as to make a Virgin mobile
subscription the natural choice – its
new TV Anywhere service is a start
but streaming was wi-fi only at
launch, still lagging Sky Go.
Tackling all this will take plenty
of cash. Right now, Virgin mainly
has plenty of debt, some £5.686bn
net. It knows a man who can help
with that however. Liberty Global
may be riding to the rescue at just
the right time.
Marc Sidwell is City A.M.’s managing
editor @marcsidwell
Four-play isn’t enough: Virgin should make this deal
BANKS working on Dell and Virgin
Media’s multi-billion dollar deals
are set for welcome advisory fees
after a dearth of M&A activity in
recent years, although one name
in particular was conspicuous by
its absence yesterday.
Morgan Stanley had been a long-
time adviser to Dell, having
worked on many of the PC
manufacturers biggest deals, and
has been a well-respected
technology sector adviser over the
past decade.
However, the bank was shut out
of the $24.4bn (£15.6bn) leveraged
buyout yesterday, and was by far
the biggest New York bank not
involved in the deal, with JP
Morgan, Evercore Partners,
Goldman Sachs, Bank of America
Banks that stand to gain from
pair of blockbuster tech deals
BY JAMES TITCOMB
Merrill Lynch, Barclays, Credit
Suisse and RBC Capital Markets all
set for a slice of the estimated
$400m in fees from the deal, most
from arranging financing.
The omission is the latest
embarrassment for Morgan
Stanley after it was fined $5m in
December over its handling of
Facebook’s initial public offering,
on which it was the lead
underwriter.
Advisers on Liberty Global’s deal
to buy Virgin Media are also
expected to be in for a sizeable
windfall. Virgin Media’s house
brokers are Goldman Sachs, while
JP Morgan, which has worked with
the company on financing before,
is also expected on the deal.
Credit Suisse is believed to be
advising Liberty Global, having
worked on other acquisitions.
Virgin Media in
$20bn sale to
US billionaire
BY JAMES TITCOMB
ENERGY firm BG Group warned
yesterday that it would not hit its
2015 production target of more than
1m barrels of oil equivalent a day.
In November, shares in the FTSE
100 explorer plummeted as it
warned that this year’s output
would be flat, largely due to delays
to projects.
New chief executive Chris
Finlayson – appointed in December
to replace Sir Frank Chapman –
said its production guidance for
this year would be between 630,000
and 660,000 barrels of oil a day.
As a result of this lower starting
point and a deal with China's
CNOOC to sell a stake in an
Australian liquefied natural gas
project, the 2015 production target
would not be met, Finlayson said.
Over 2012 as a whole, BG Group
said production rose three per cent
and earnings jumped three per cent
to $4.4bn (£2.8bn). Over the fourth
quarter though, earnings slumped
29 per cent to $1bn, which it said
was hit by the loss of a one-off
$277m tax credit in 2011.
Its announcement sent it to the
bottom of the FTSE 100 yesterday
morning, although it recovered to
close up 3.44 per cent.
BG warns on
production
goal for 2015
BY CATHY ADAMS
BP said yesterday it has been present-
ed with a bill of at least $34bn
(£21.7bn) from US states and local
governments over the Deepwater
Horizon oil spill in 2010.
The figure, which BP says is based
on “seriously flawed” methodology,
would move the total cost of the dis-
aster to more than $90bn.
The announcement came as full-
year underlying replacement cost
profit at the oil major fell to $17.6bn,
compared to $21.7bn over 2011.
Fourth quarter profits came in
above expectations though, at $4bn
compared to $5bn over the same peri-
od in 2011, helped by record earnings
from its downstream business.
The results come just days after a
US court approved a $4bn settlement
for criminal penalties relating to the
oil disaster, which killed 11 workers
and spewed oil into the Gulf of
Mexico for three months. BP added
BP given new
$34bn bill for
Gulf oil spill
BY CATHY ADAMS
that it took a $4.1bn additional charge
in the fourth quarter to cover its crim-
inal settlement agreement with the
US Department of Justice, racking up
a bill of $42.2bn for the Deepwater dis-
aster so far. The $34bn in claims, as
well as other penalties such as those
under the US Clean Water Act, would
put costs above $90bn.
Chief executive Bob Dudley said that
BP was prepared to settle all remain-
ing civil claims on reasonable terms
before the trial on 25 February.
BP chief executive Bob Dudley said BP is close to settling Deepwater Horizon legal cases
IN BRIEF
Boeing seeks Dreamliner test flight
n Boeing has asked the Federal
Aviation Administration (FAA) for
permission to conduct test flights of its
787 Dreamliner, suggesting the
company is making progress in finding
a solution to the battery problems that
grounded the entire 787 fleet last
month. The flight could test a potential
fix for the problem. Yet passenger
flights could still be weeks if not months
away, the Seattle Times reported.
Glaxo to publish more trial data
n Drugmaker GlaxoSmithKline, which
paid $3bn (£1.9bn) last year to settle
charges that it gave misleading
information on its medicines, said
yesterday it would publish more of its
clinical research data. When the
company agreed to the fines last July,
government officials called it the largest
healthcare fraud case in US history,
involving Glaxo drugs such as the
antidepressant Paxil and diabetes pill
Avandia.
McNulty joins Gatwick board
n Sir Roy McNulty, the transport
stalwart who is currently deputy chair
of the Olympic Delivery Authority, is
joining Gatwick Airport after its
chairman Sir David Rowlands steps
down. Sir Roy, who will start on 1 April,
has spent time on the boards of
National Air Traffic Services (NATS) and
the Civil Aviation Authority, and last
year penned a report for the
government on the future of the rail
network.
BP PLC
5Feb 30Jan 31 Jan 1 Feb 4Feb
465
470
475
480
485 p
468.70
5Feb
WEDNESDAY 6 FEBRUARY 2013
10
NEWS
cityam.com
Munich Re profits quadruple
after dearth of catastrophes
THE WORLD’S largest reinsurer
yesterday reported an enormous
jump in year-end profits following
a quiet year for catastrophes.
Munich Re smashed analysts’
already high expectations to
announce a net profit of €3.2bn
(£2.74bn) for 2012, up from €712m
for the year before.
Reinsurers help spread the risk
of primary insurers and their
profitability relies heavily on the
absence of major natural disasters.
Munich Re enjoyed a successful
BY JAMES WATERSON
year in this respect, easily
absorbing the €800m cost of
Superstorm Sandy. Total
catastrophe losses for the full year
were only €1.3bn.
In response to this – and a
healthy rise in investment income
– the company hiked its year-end
dividend by 12 per cent to €7 a
share.
However analysts are concerned
that the company now offers
limited growth potential. Munich
Re admitted the volume of its
property-casualty business dropped
when it renewed key contracts at
the start of this year, partially
offset by a small price rise.
“January renewals offer more of
a reality check on the challenges
ahead for Munich Re and the sector
in terms of an ‘unrelenting
competitive environment’ on
underwriting,” said Joy
Ferneyhough at Espirito Santo.
She also suggested that stable
earnings forecasts support the view
that “Munich has become almost a
utility stock”.
The company’s shares closed up
3.89 per cent at €138.95 in
Germany yesterday.
The agreement on Rosneft leaves BP with exposure to the Russian
region without some of the previous distractions, the dividend policy is progres-
sive and the general streamlining of its operations form a strong base.
ANALYST VIEWS


BP has agreed divestments of $37.8bn since 2010, a year earlier than
planned. Investors may believe that this places the company in a robust financial
position ahead of a significant year of upstream activity.

Attention will now revert to Deepwater Horizon issues, with the trial
date approaching. There is a reasonable probability that BP manages to reach a
settlement over federal and state civil penalties before it starts.

HAS BP LEFT ITS 2012
WOES BEHIND?
Interviews by Cathy Adams
RICHARD HUNTER HARGREAVES LANSDOWN

SAM WAHAB SEYMOUR PIERCE

GORDON GRAY CANACCORD GENUITY
BUDGET constraints risk
undermining the work of the
organisation responsible for
investigating insolvent companies,
a group of MPs warn in a report
released today.
The business, innovation and
skills committee said limited
resources at the Insolvency Service
affect its enforcement regime,
sending the “the wrong message to
delinquent directors”.
The committee also raised
concerns about the monitoring of
controversial pre-pack
administrations, where a business
is put into insolvency protection
before being swiftly sold on to a
new buyer in a pre-arranged deal.
“Greater transparency, higher
levels of compliance, and a stricter
regime of sanctions are needed,”
said chairman Adrian Bailey MP.
MPs’ concerns
over pre-packs
BY JAMES WATERSON
THOMAS Cook plans to merge its
German, British and Belgian airline
operations, appointing a new
airline management board to run
the business.
The world’s oldest travel group
yesterday said that Condor, its
German airline brand, Thomas
Cook Airlines UK and Thomas Cook
Airlines Belgium would become one
airline segment within the group
from 1 March.
The move is part of a turnaround
plan, the effects of which began to
kick-in late last year. The company,
which was thrown a lifeline by
lenders last May, has since seen a
steady improvement in its finances
and a pick-up in demand.
Christoph Debus, group head of
air travel and Condor boss Ralf
Teckentrup will chair the board.
Thomas Cook
merges airlines
BY CITY A.M REPORTER
PROFILE: JIM O’NEILL
WEDNESDAY 6 FEBRUARY 2013
11
NEWS
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THE ECONOMIST who first picked
out the BRIC economies will retire
from Goldman Sachs later this
year.
Jim O’Neill, the chairman of
Goldman Sachs’ asset
management division, coined the
term to refer to the four markets
of Brazil, Russia, India and China,
which he forecast would lead a
shift in the global economy.
Earlier this year, the 55-year-old
said that China should be
removed from the BRIC umbrella,
as its influential position as the
world’s second biggest economy
meant it had outgrown the other
three nations.
He is an economist by training
who joined Goldman Sachs in
1995 as a partner.
In 2010, he stepped back from
his job as chief economist to take
a broader role at the bank.
In an internal memo, Goldman
Sachs chief executive Lloyd
Blankfein said: “Jim is an
influential economist and
thought leader, and is
regarded as an expert in the
world’s foreign exchange and
bond markets.”
The memo did not
say what O’Neill
plans to do
following his
retirement.
DUTCH telecoms group KPN set
out plans for a €4bn rights issue
yesterday, one of many debt-laden
European firms expected to
capitalise on surging equity
markets in an attempt to avoid
credit rating downgrades.
KPN, in which Mexican
billionaire Carlos Slim’s America
Movil took a near 28 per cent stake
in 2012, has along with other big
telecoms groups seen earnings
dwindle in competitive markets
and had to pay more than expected
for a 4G mobile licence.
KPN will hold an extraordinary
general meeting (EGM) on 19
March. However, analysts said the
company’s opaque outlook was
unlikely to entice shareholders.
Telecoms firm
KPN planning
a rights issue
BY CITY A.M. REPORTER
MEDIA and marketing services
company UBM said yesterday it has
received a £160m binding offer
from private equity firm Electra
Partners for a portfolio of its data
services businesses.
The deal consideration includes
a £40m vendor loan note, UBM said
in a statement.
The businesses being sold
represent a bulk of UBM’s data
services operations including its
UBM sells £160m data services arm to Electra
BY CITY A.M. REPORTER health, technology and IP, trade
and transport, and paper business
units.
Revenue from these businesses
for 2012 is estimated at around
£179m.
Margins at the data services
business, which provides
information sets and data sets to
customers, were hurt as advertisers
cut back on higher-margin print
advertisements in directories post
their transition to a digital format.
UBM will issue its full-year
results on 1 March.
UBM PLC
5Feb 30Jan 31 Jan 1 Feb 4Feb
720
740
760
780
800 p
740.50
5Feb
TAXI app company Hailo has
raised $30m to help fund launches
in New York, Tokyo and
other cities this year.
The firm, founded
by three London
cab drivers in
2011, has clinched
fresh funds from
Cab hire firm Hailo raises $30m
to fuel drive into new markets
BY MARION DAKERS
existing and new backers. One of
the new investors is Sir Richard
Branson, while Union Square
Ventures is among its existing
supporters.
Hailo said it has carried 2.5m
passengers using its app.
BOOKSELLER Waterstones revealed
yesterday that a “disappointing
sales performance” had dragged the
company to a £40m loss last year,
sparking fears for the future of the
high street chain.
HMV sold the retailer for £53m
last year to Russian billionaire
Alexander Mamut who put James
Daunt, the founder of the
eponymous books chain, in charge
of turning the business around.
The group said sales fell 14 per
cent to £410.4m in the year to the
end of April as a result of the
change in ownership together with
fierce online competition and
tough high street conditions.
Losses widened from £20.6m in
2011 to £37.3m last year. The group
now has 286 stores after closing six.
Waterstones’
losses widen
BY KASMIRA JEFFORD
Hailo was set up by
London cabbies in 2011
BY MARION DAKERS
Jim O’Neill joined
Goldman in 1995
Jim O’Neill, once described as the world’s
first rock star economist, started on
the road to financial fame at Bank of
America, having completed a PhD in
economics at the University of
Surrey.
After spells at Marine Midland Bank
and Swiss Bank, he joined Goldman
Sachs in 1995. He rose to global
economics, commodities and
strategy research in
2001.
As well as coining the
BRIC acronym the
same year, following
which he wrote a
book and earned the
nickname “Mr BRIC” across the banking
world, he has built a reputation on his
accurate economic calls. His forecast that
the credit crunch of 2007/8 would blow
over is a notable exception.
Born and raised in Manchester, O’Neill is a
dedicated fan of Manchester United, going
so far as to become a non-executive direc-
tor in 2004. He joined the Red Knights dur-
ing their attempts to buy out the Glazer
family from the club in 2010.
He is leaving as his team sits at the top of
the Premier League and the turbulent mar-
kets of the last five years have broken into
a brief bull run – assuming that he’s called
it right in his most recent missive to clients,
entitled “Are Things That Good?”.
Goldman’s O’Neill to step down
IN BRIEF
British Airways carries IAG stats
nInternational Airlines Group posted
a slight rise in January traffic, as
strong growth at British Airways again
made up for weakness at Spain’s
Iberia. Traffic, measured in revenue
passenger kilometres, rose 0.7 per
cent versus January 2012 on capacity
one per cent lower. IAG said its first
and business-class travel, the most
profitable part of its passenger
business, rose 2.7 per cent.
Budget airline Ryanair, meanwhile,
carried 50,000 fewer passengers in
January after it grounded up to 80 of
its planes over the winter.
EnQuest invests £169m in Thistle
nOil explorer EnQuest will plough
£169m into the Thistle field in the
North Sea, creating almost 1,000 new
jobs in Aberdeen, Newcastle,
Manchester and Swansea over the
next three years and increasing
production threefold, thanks to a
brownfield tax allowance. It will also
safeguard around 500 existing North
Sea jobs. The allowance, which is one
of the government’s measures to
stimulate investment in the North Sea,
will extend the life of the field and
help award contracts to around 30 UK
companies.
EADS prepares for new chairman
nAirbus parent EADS paved the way
to getting its first independent
chairman yesterday, as it put finishing
touches to proposals for a new board
to be led by the former head of French
defence group Thales, people familiar
with the matter said. Denis Ranque,
61, was contacted about the plan
while still sailing in the Atlantic,
setting in motion his probable return
to power almost four years after he
fell victim to a boardroom coup at
Thales. The company, whose merger
with BAE Systems fell through last
year, declined to comment.
SABMILLER, the world’s second-
biggest brewer, is to expand further
into high-growth regional markets
in China after CR Snow, a local joint
venture, agreed to buy Kingway
Brewery assets for 5.38bn yuan
(£549.7m).
Asia’s $258bn (£164.7bn) beer mar-
ket is growing twice as fast as the
rest of the world, leading to rising
competition and expectations of
more industry deals in the region
this year.
CR Snow, a brewing joint venture
between SABMiller and conglomer-
ate China Resources Enterprise, will
see its capacity rise 8.5 per cent
with the acquisition of seven brew-
eries that Kingway put up for sale
early last year.
Four are in Guangdong province,
one of China’s fastest-growing and
most affluent regions, SABMiller
said yesterday. The other breweries
are in Sichuan, Shaanxi and
Tianjin.
SABMiller said last month lager
sales fell in China in the final three
months of 2012 as the country’s
coldest winter in 28 years hit
demand and, as a consequence, the
group’s growth.
“The acquisition of Kingway
[assets] gives us greater access to
high growth and attractive regional
markets in China, thereby enhanc-
ing CR Snow’s competitive posi-
SABMiller buys
£550m brewery
assets in China
BY HARRY BANKS
tion,” SAB Asia Pacific managing
director Ari Mervis said.
Kingway, which is to change its
name to Guangdong Land Holdings,
said at a news conference in Hong
Kong it was to focus on property
development and investment in
China.
Kingway said in January 2012 it
planned to sell brewing operations
in southern China as its profit was
being hit by competition and rising
costs.
Beijing Yanjing, China’s fourth-
largest domestic brewer, had been in
advanced talks to strike a deal with
Kingway last year, after beating
Anheuser-Busch InBev NV, the
world’s biggest brewer, in the final
round of bidding, sources previously
said. That agreement failed.
The price of the Kingway deal
includes a small portion of loans
and debt, the companies said.
JP Morgan acted as financial advis-
er to the buyer.
THE CHIEF executive of blue chip
gold miner Randgold Resources
has warned that making changes
to mining codes in African
countries could stunt investment
in mining companies.
Speaking at the Mining Indaba
conference in Cape Town, Mark
Bristow said that Africa, which is
rich in mineral terms, has to
compete for investment with
other regions with natural wealth
such as South America, Eastern
Europe, Russia and Asia.
Bristow added that Randgold,
which has operations in Mali, the
Ivory Coast and the Congo, had to
return a “substantial slice of the
net revenue pie” to the state,
despite funding the entire
Randgold boss warns changing
mining codes will dent finance
BY CATHY ADAMS discovery and development costs
itself.
Bristow said that it was
“disturbing” that there existed a
“growing tendency among the sub-
Saharan mining countries to want
more without giving anything
back”.
“Even a moderate change in
their current codes will diminish
these countries' ability to compete
for direct fixed investment, or to
encourage reinvestment,” Bristow
added yesterday.
The African governments should
provide a “stable, business-
friendly” regime to attract
investors, then partner with
mining companies to drive the
projects forward and share in the
proceeds, according to the gold
miner’s chief executive.
Mark Bristow was speaking at the annual Mining Indaba conference in South Africa
WEDNESDAY 6 FEBRUARY 2013
12
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The new
jobs website
for London
professionals
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SABMiller PLC
5Feb 30Jan 31 Jan 1 Feb 4Feb
3,100
3,120
3,140
3,160
3,180
3,200
3,220 p 3,181.50
5Feb
TOYOTA Motor Corp yesterday
lifted its annual profit guidance,
banking on stronger sales in its
key US market and a boost from a
weaker yen which put its Japanese
manufacturing in the black for the
first time in five years.
But the world’s best-selling
carmaker, which shipped a record
number of cars last year, said it
would not build any new factories
Japan’s Toyota lifts forecasts
on record worldwide car sales
BY CITY A.M. REPORTER
over the next three years despite
the pickup in its fortunes, after it
was burned in the financial crisis.
The Japanese company raised its
net profit forecast for the year to
March by more than 10 per cent to
¥860bn (£5.87bn) on strong US
sales.
Toyota posted net profit of
¥99.9bn for the three months to
31 December, up 23.5 per cent
from a year ago but below the
average estimate of ¥143.7bn.
HOUSEHOLD water and sewerage
bills in England and Wales are set
to rise by 3.5 per cent or around
£13 over the next year, water
regulator Ofwat said yesterday.
The increase will take into
account an inflation rate of three
per cent and will mean a total
average bill of £388 in 2013-2014,
the regulator said.
The changes will come into
effect on 1 April and apply until
31 March 2014, and bills will vary
for each household depending on
their water supplier and whether
they have a water meter.
Water bills in England to rise
by 3.5 per cent over this year
BY CITY A.M. REPORTER
Ofwat's chief executive Regina
Finn said she understood there
was huge pressure on household
incomes driven by inflation.
So far, however, average bills
have stayed broadly in line with
inflation and are 10 per cent lower
than what companies asked for.
“We will make sure customers
get value for money, and if
companies fall short in delivering
their investment promises, we will
take action,” she added.
Ofwat data showed the highest
water and sewerage bills in the
country continue to be from South
West Water, with households
paying an average £499.
ICAP, the world’s biggest interdealer
broker, yesterday said electronic
broking volumes on its bond and
foreign exchange platforms leapt
17 per cent last month, versus a
year ago.
Average daily volumes on its bond
trading suite BrokerTec and EBS
foreign exchange platform totalled
$767.9bn (£491bn) for January,
according to the firm.
Icap broking
volumes up
BY MICHAEL BOW
RYANAIR has agreed the possibility
of transferring some of its routes
and aircraft to smaller operator
Flybe in order to win the European
Commission’s approval for its Aer
Lingus bid.
Flybe confirmed yesterday that
Ryanair had agreed in principle to
create a new company, into which
business assets and cash of €100m
(£86.2m) would be transferred and
which Flybe would then acquire.
Ryanair is making its third
takeover attempt of Aer Lingus and
needs to make concessions to keep
competition on Irish routes.
Ryanair lines
up concession
BY CITY A.M. REPORTER
WE all know that comparing bonus
size is a taboo akin to divulging
religious and political beliefs – that
is to say, not very British.
Thank goodness then, that the
Americans have come to the res-
cue, with the Banker’s Bonus app
on iTunes.
The app allows
users to enter
their bank,
bonus, position
and department
and it sorts them
into handy league
tables that can be
filtered according
to country.
After a curious
scroll through
the London table, The Capitalist
noticed bonus braggings that claim
to have been posted by associates
and vice presidents through to
managing directors at Goldman
Sachs, JP Morgan, Citi, RBS, Morgan
Stanley, Nomura and Deutsche.
With no means of verifica-
tion, users should be scepti-
cal. The current big earner in
London is a trader on
£1,149,801, but he or
she doesn’t reveal the
name of the bank in
question.
Others appear happy
to: analysts from JP
Morgan are either the
most keen to share their
big bonuses or the most
often impersonated.
Pay negotiations just got a
whole lot more interesting.
Banker’s Bonus 2013
costs £2.99 on iTunes
Who would live in a scandalous
house like this? Readers will
recall the Profumo affair that arose in
1963, when the secretary of state for
war John Profumo (pictured) was
caught lying over a tryst with showgirl
Christine Keeler. At the time Profumo
and his wife, the
actress Valerie
Hobson, lived in a
Grade I listed
property built by
architect John Nash.
Now anyone with a
spare £8m could live
in the Regent’s Park
home, as the four-
bedroom house
has gone up
for sale.
The Capitalist was pleased to hear
of more good deeds in the City this
week. Barclays investment banker Tom
Yusef is one of the organisers putting
together The Tom Maynard Memorial
Ball, in honour of the young sportsman
who passed away last year. England
rugby captain Chris Robshaw, cricketers
Kevin Pietersen and Darren Gough,
rugby player Danny Care and patron of
the Tom Maynard Trust Freddie Flintoff
will all be attending, as well as lots of
young City faces. The ball will be held at
the Kia Oval on 8 May and tables start at
£1,500 for ten people. Tickets can be
organised through the website
www.thetommaynardball.com
THE TRIAL of the Pyx is (yet
another) ancient ceremony that
takes place in the Square Mile.
Yesterday 17 jurors and 19 Royal
Mint staff congregated at the Hall
of the Worshipful Company of
Goldsmiths in order to check that
the coins produced at the Royal
Mint were the right weight, size
and metallic composition.
The Trial dates back to the
twelfth century, when our coinage
included far less base metal. It is
named after the boxes in which
sample coins are kept. The Pyx
chamber in Westminster Abbey
still hosts the originals – should
readers wish to take a closer look.
Official verdict won’t be passed
on the mint’s current coins until
May, but The Capitalist awards top
marks to the 1kg gold ones.
The jury inside Goldsmiths’ Hall, where the annual Trial of the Pyx takes place
Goldsmiths’ Hall is minted for
the annual Trial of the Pyx
Whose bonus is
bigger? iTunes
has the answer
13
cityam.com
WEDNESDAY 6 FEBRUARY 2013
cityam.com/the-capitalist
THECAPITALIST
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
TRANSPORT for London (TfL) yesterday
backed calls for a new £12bn under-
ground railway link to be built through
the capital by the early 2030s, following
the publication of a proposed route for
the Crossrail 2 project.
Business group London First unveiled
its preferred route for the railway,
which will run from south west London
to the north east. They say it will stop
the capital’s transport infrastructure
“grinding to a halt” as London’s popula-
tion grows by 1.5m to 10m people by the
mid-2020s.
Crossrail 2, which has the backing of
Mayor Boris Johnson, could see main-
line-standard trains running directly
from Surrey through a new tunnel
under central London before continu-
ing on to destinations in Hertfordshire.
Crossrail 1, which will run east to west
under London, is already under con-
struction and is due to open in 2018.
Lord Adonis, the former transport
minister who helped put together the
Crossrail 2 plan, yesterday told City A.M.
that unless Crossrail 2 is built com-
muters who use Waterloo, Victoria,
Euston and Clapham Junction will “face
frequent station closures at peak hours
due to congestion” within two decades.
“It is essential Crossrail 2 is seen as a
successor to Crossrail 1 to minimise the
costs and retain the skills,” Adonis said.
“The genius of Crossrail 1 was to bring
in partnership funding between central
government, London and the business
community. We recommend the Mayor
follows the same model for Crossrail 2.”
Crossrail 2 is designed to relieve pres-
sure on the already overcrowded
Victoria, Northern and Piccadilly lines,
in addition to reducing the need for
new approach routes and Underground
interchanges at major mainline
stations.
The route suggested by London First
runs along existing suburban railway
tracks before going underground in the
Wimbledon area. It will then re-emerge
with existing lines near Tottenham.
TfL will begin a consultation on the
Crossrail 2 proposals this spring. It will
also consider a cheaper £9.5bn tradition-
al tube line running from Wimbledon
to Alexandra Palace in north London.
BY JAMES WATERSON
I’m always supportive
about growth and
infrastructure – anything that makes
journeys shorter and brings together
different parts of the city is positive.
These views are those of the individuals above and
not necessarily those of their company
ALYA RANDELL
NABARRO

We need a new rail system,
definitely. Anything to
alleviate congestion and speed up
travel. Expense-wise, the city is
always going to spend money, so
why not spend it on travel and lessen
disruption for passengers?
ZIG ARONOWICZ
HAYS

It’s not necessary to build a
network specifically travel-
ling from south-west to north-east
because there are already a lot of rails
and Underground routes within
London. If we’re talking about an area
outside London, then maybe it’s
relevant.
GEORGE CHENG
M&G INVESTMENT

DOES LONDON NEED MORE RAIL
LINKS?
CITYVIEWS
WEDNESDAY 6 FEBRUARY 2013
14
NEWS
cityam.com
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C
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A
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R
S
.
c
o
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PROPOSED ROUTE FOR CROSSRAIL 2
ALEXANDRA PALACE
NEW TUNNEL
CHESHUNT
HACKNEY
ANGEL
EUSTON, KINGS CROSS / ST. PANCRAS
TOTTENHAM COURT ROAD
VICTORIA
KING’S ROAD CHELSEA
CLAPHAM JUNCTION
TOOTING BROADWAY
WIMBLEDON
MOTSPUR PARK
EPSOM
CHESSINGTON SOUTH
HAMPTON COURT
SHEPPERTON
TWICKENHAM
KINGSTON
SURBITON
TOTTENHAM
HALE
TURNPIKE LANE
SEVEN SISTERS
DALSTON JUNCTION
EXISTING RAILWAY LINE
Interviews by Amy-Jo Crowley
TfL considers
proposed route
for Crossrail 2
EUROZONE output declined again
in January, according to business
survey data released yesterday.
The bloc’s purchasing managers’
index (PMI) rose to 48.6, Markit
said, from 47.8 in December
– another month of retrenchment,
as indicated by the below-50 score.
This improvement in the index
level came mostly from a resurgent
Germany, which posted a 19-
month PMI high of 54.4, up from
50.3, indicating growth across the
Eurozone largest economy.
But the performance of France –
which suffered a catastrophic fall
in its PMI from 44.6 to a 46-month
low of 42.7 – suggested GDP could
do a lot worse than stay flat.
“Growth is heavily skewed
towards Germany, where the con-
trast with the contraction seen in
France is the greatest seen since
the survey began in 1998,” said
Markit’s chief economist Chris
Williamson.
He pointed out that even Italy and
Eurozone slips
further despite
German boom
BY BEN SOUTHWOOD Spain’s PMIs of 45.4 and 46.5 beat
France’s lacklustre performance.
But Williamson took an optimistic
approach to the data overall, saying
the smaller fall in output suggested
the Eurozone’s troubles were “easing
sharply” and the bloc was “showing
clear signs of healing”.
However, retail sales data, also
released yesterday, this time by
Eurostat, gave a gloomier picture of
the zone’s prospects. The seasonally
adjusted volume of sales was down
0.8 per cent between November and
December, capping off a 3.4 per cent
annual decline.
Shop price inflation droops to
38-month low in January 2013
PRICE rises in shops were recorded
at their slowest rate in over three
years in January, according to data
out this morning.
Shop inflation ran at just 0.6 per
cent over the year to last month,
according to figures from the
British Retail Consortium (BRC), the
lowest rate since November 2009.
This impressively low number
came from sharp discounting in
non-food prices, particularly
electronics and clothes, BRC boss
Helen Dickinson said.
“The 1.4 per cent year-on-year fall
in non-food prices was driven by
cheaper clothing and electricals,”
Dickinson said. “Promotions were
BY BEN SOUTHWOOD
not as widespread as last year, but
where discounts were applied, they
were deeper.”
Clothing firms needed to make
the sharp cuts – bringing prices
down 7.7 per cent on the year, the
biggest fall since the survey began –
she said, because demand was so
weak in the sector.
On the other hand food price
inflation was stubbornly high,
edging down only a 10th of a
percentage point from 4.1 per cent
to hit four per cent over the year to
January. This small fall came from a
slight easing down in commodity
prices, Dickinson said. The release
pointed to falling sugar, corn, soya
bean, cocoa and coffee prices.
Eurozone PMI ticked up last month
2013 2011 2009 2007 2005 2003 2001 1999
45
50
35
40
30
55
60
65 Economicactivity, 50indicatesnochange
S
o
u
r
c
e
:

M
a
r
k
i
t
BUSINESS activity increased
sharply in Brazil, Russia, India and
China in January, banishing fears
the world was set for an economic
slowdown.
Chinese output increased at its
fastest rate for two years,
according to Markit’s purchasing
managers’ index (PMI) business
survey, which rose from 51.8 in
December to 53.5 in January –
BRICS roar their way out of global slowdown
BY BEN SOUTHWOOD
where 50 indicates no change.
India saw a 45th month of
private sector output growth,
according to another Markit
release, as its services PMI climbed
to 57.5, a 12-month high, from 55.6
in December. Its overall PMI also
remained firmly in expansion
territory, flat at 56.3.
Russia continued the run of
impressive figures with its 29th
straight month of private sector
service activity, according to its
PMI, which improved from 54.1 in
December to 54.8 in January.
And Brazil also saw its
composite PMI jump, from 53.2 to
54.9, again showing not just
output growth, but output
growing at a faster pace – in
Brazil’s case the fastest for 11
months.
And upbeat figures were not
limited to the BRICs, with the
United Arab Emirates, Hong Kong
and Japan also enjoying expansion.
WEDNESDAY 6 FEBRUARY 2013
15
NEWS
cityam.com
EUROZONE GLUM AS EMERGING MARKETS FIGHT THEIR WAY OUT OF WORLD SLOWDOWN
*All-industry purchasing managers’ index business
surveys for January, change compared to December
*Figures above 50 indicate expansion
Numbers below indicate contraction
IRELAND 54.9
FROM 54.2
INDIA 57.5
FROM 55.6
UK 50.2
FROM 49.9
SPAIN 46.5
FROM 43.9
EGYPT 45.0
FROM 37.1
GERMANY 54.4
FROM 50.3
UAE 55.0
FROM 55.6
RUSSIA 54.8
FROM 54.1
CHINA 53.5
FROM 51.8
HONG KONG 52.5
FROM 51.7
JAPAN 50.4
FROM 49.3
BRAZIL 54.9
FROM 53.2
ITALY 45.4
FROM 45.7
EUROZONE 48.6
FROM 47.8
FRANCE 42.7
FROM 44.6
Oreo scores a touchdown with innovative tweeting
Oreo reach on Twitter
5Feb* 4Feb 3Feb 2Feb 1Feb 31Jan 30Jan
4
6
2
0
8
10
12
*
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til m
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L
AST Sunday was America’s
biggest sporting event and
arguably the biggest
advertising moment of the
year: the Super Bowl.
The half-time commercials are
anxiously awaited, and while the
winner of the sporting event is
always clear, the victor of the
advertising battle is debated for
days and weeks afterwards.
Brands compete for whose über
expensive advert can generate the
most excitement around a brand.
Generally it is the half-time
commercials that create all the
excitement – but what I want to
focus on here is one brand’s super-
quick reaction to the power outage
that stole the night for free
(compared to around $4m for a 30
second half-time slot).
Whilst the lights were out
@Oreo tweeted “Power out? No
problem” with a picture of an
Oreo cookie and the tagline: “You
can still dunk in the dark”. This
inspired piece of spur of the
moment marketing received over
15,000 retweets.
What it also showed was the
global effect of social media; if you
bought an ad slot it was shown to
those watching in the US but
Oreo’s tweet reverberated around
the world.
Looking at our social media
analysis – known as YouGov’s
SoMA – we can see a 20-fold
increase in the reach of Oreo on
Twitter.
On an average day news about
Oreo reaches less than 0.5 per cent
of the Twitter population in the
UK; on Monday that was up to 10
per cent.
So well done Oreo – an inspired
moment that is driving
conversation about the brand,
even here in the UK.
GAY MARRIAGE
By the time this column goes to
press, MPs in Westminster will
almost certainly have voted in
favour of gay marriage – but what
impact will that have on voting?
Well, in spite of all the
excitement it has generated, the
impact will be pretty much zero.
A YouGov poll at the weekend
found only seven per cent saying
that gay marriage is an important
factor in deciding their vote. This
was split 54 per cent to 44 per cent
more likely to vote for a party
supporting the measure.
And just five per cent of Tory
supporters said that gay marriage
is an important factor in deciding
their vote.
Boiling this down; at the
extreme it might reduce Tory
support from 34 per cent to 33 per
cent of vote share, but even that is
probably an exaggeration.
Perhaps more important will be
the impact of Conservative
infighting, which may have been
exacerbated by disagreements in
its ranks over gay marriage.
Seventy-one per cent of people
now see the Conservative party as
divided – the highest level we have
ever recorded.
Stephan Shakespeare is the chief
executive of YouGov
BRAND
INDEX
STEPHAN SHAKESPEARE
US SERVICE sector activity
increased for the 39th straight
month in January, according to
numbers put out yesterday
afternoon.
The Institute of Supply
Management’s (ISM) overall index
for the top sector in the economy
crept down 0.5 percentage points,
leaving it at 55.2 per cent – where
an index level of 50 indicates no
change.
The sub-index for employment
shot up 2.2 percentage points to
57.5 per cent, the highest for
nearly seven years, just after last
week’s jobs report revealed
166,000 new private sector jobs.
US services industry continues
to chug on solidly in new year
BY BEN SOUTHWOOD
Paul Dales, US economist at
Capital Economics, said the
upbeat numbers could imply
growth had rebounded from last
quarter’s surprise 0.1 per cent
annualised fall to hit 2.5 per cent
growth in the first quarter of this
year. With the solid rise in the
employment sub-index, Dales
judged that “lingering fiscal
uncertainty” did not appear to be
harming macroeconomic
prospects.
“Respondents’ comments are
mixed, however, the majority of
respondents are optimistic about
the overall direction [of the
economy],” commented ISM chair
Anthony Nieves.
IN BRIEF
Fitch lowers Dutch outlook
n Credit rating giant Fitch last night
cut the Netherlands’ outlook to
negative on a series of shocks to the
Dutch economy, including sagging
home prices and nagging worries
about the country’s banks. Fitch also
affirmed the AAA rating of the
Netherlands.
EU blamed for UK scepticism
n The head of a German economic
think tank yesterday blamed Brussels
for rising euroscepticism in the UK.
Ifo boss Hans-Werner Sinn said:
“Cameron is right. There is something
rotten in the states of the EU and the
Eurozone. The concept of subsidiarity
agreed upon in the Maastricht Treaty
is constantly being trampled upon by
the politics of the EU.”
Akin Gump
The law firm has
appointed Jon
Hanifan to lead its
European hedge
fund tax advisory
team. He joins from
Ernst & Young,
where he was a
director in its hedge fund tax practice.
F&C Asset Management
The investment management firm has
appointed Ben Fox as director in its multi-
alternative business. He was previously a
fund manager at Goodhart Partners. Fox
has also held senior roles at Fidelity and
Aon Consulting.
Stephenson Harwood
Tom Nicholls has been appointed partner
in the law firm’s corporate practice. He
joins from Lawrence Graham, where he
was head of its energy and natural
resources sector group.
Kentz
Mark Payton has been appointed group
corporate development officer at the
engineering solutions firm. He has worked
as an independent consultant since 2009,
and was previously a vice president at
Mustang Engineering.
Berwin Leighton Paisner
David Robertson has been appointed
international contentious construction
partner at the law firm. He was previously
a partner at Fenwick Elliott, where he
worked in its international arbitration
practice. Robertson has also held roles at
Baker & McKenzie.
THE CENTRAL London office market
enjoyed its strongest year for invest-
ment since 2007 last year, thanks to a
record level of purchases by foreign
investors, according to data published
yesterday by Knight Frank.
The property specialist said total
investment turnover for central
London was £13.8bn in 2012, up from
£9.6bn in 2011 and higher than the
ten year average of £10.8bn.
Overseas buyers invested £9.6bn, the
highest figure on record, and nearly
70 per cent of total activity compared
with 24 per cent in 2000.
Major deals last year included the
landmark sale of Battersea Power
Station, which was rescued out of
administration by a consortium of
overseas developers led by Malaysia’s
SP Setia for £400m.
Winchester House, Deutsche Bank’s
City headquarters, also went under
the hammer to China Investment
Corporation (CIC) for
£245m, the sovereign
wealth fund’s first direct
property investment in
the UK.
Stephen Clifton of
Knight Frank said for-
eign buyers dominat-
ing the London office
investment market
London offices
enjoy strongest
spend in years
BY KASMIRA JEFFORD
“has become an established state of
affairs”. He said the further weaken-
ing of the pound in recent weeks will
also increase London’s appeal to over-
seas investors, whose home markets
often offer less attractive yields.
“In 2012, much of the focus was on
the safer assets, but in 2013 I expect to
see investors taking on more risk,
including looking at development
sites in order to ride the global eco-
nomic recovery,” Clifton added.
Despite a strong year for office invest-
ments, leasing in London was down,
with take-up reaching 9.6m square
feet compared to 10.7m sq ft in 2011.
The City office market was the top
performer. As banks shelved plans to
move, TMT firms (technology, media,
telecoms) became the largest source of
demand of office space in the City in
2012, accounting for 22 per cent of
activity, targeting areas such as
Clerkenwell and Farringdon.
Knight Frank’s James Roberts said: “A
lot of people are surprised that the
City has seen take-up rise in 2012,
because it is associated with the
banks, who are known to be cut-
ting staff.” Insurers also drove
demand for space, dou-
bling their activity to
878,000 sq ft last year.
Overall, City take-up
rose to 5.8 m sq ft, up
from 5.5m sq ft in
2011.
TalkTalk, led by Dido Harding, has benefited from the launch of YouView
REVENUES at media company
TalkTalk fell 1.7 per cent to £415m
in the last three months of 2012,
though the company saw net gains
in its customer numbers for the
first time in three years as the new
YouView TV platform launched.
TalkTalk attracted a 80,000 new
television subscribers, who will use
broadband TV service YouView.
BY CITY A.M. REPORTER
The FTSE 250 firm’s broadband
service gained a net 10,000
customers.
The level of churn, or customers
cancelling subscriptions, fell from
1.6 to 1.5 per cent in the quarter.
Chief exec Dido Harding said the
rise in customers is “an important
milestone on our journey to
become a growing and more
profitable business”.
Shares fell 4.5 per cent to 242p.
THE BBC Television Centre in White
City is to be opened up to the public
for the first time, under its new
guise as a site for hotels, flats and
offices.
Developers unveiled plans
yesterday to turn the landmark
building into a mixed-use scheme
including 1,000 new homes, a hotel
and offices as well as new BBC
Developer of BBC Television
Centre sets out masterplan
BY CITY A.M. REPORTER headquarters and studios.
The 53-year-old centre was sold to
Stanhope and its backers for £200m
in July last year.
Stanhope said that some offices
would be “aimed at occupiers in the
creative sector providing new
employment opportunities”.
A cinema, health club,
restaurants and cafes are also
planned on the site, parts of which
are Grade II listed.
WEDNESDAY 6 FEBRUARY 2013
16
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93
ST MODWEN said yesterday it has
agreed terms with Swansea
University to develop the first
£150m phase of its New Science and
Innovation Campus as it revealed a
rise in full year profits.
The property developer said the
first phase of the £300m scheme
will consist of 700,000 square feet
of development including 430,000
sq ft of academic space, 899 student
flats and retail space. It plans to
start on site in April.
The agreement marks St
Modwen’s second major deal of the
year after signing a contract for the
£2bn regeneration of New Covent
Garden market last month.
Reporting its results for the year
to 30 November, St Modwen said its
EPRA net asset value – a key
industry measure – rose nine per
cent to 272p per share.
The company, which saw its
share price rise more than 100 per
cent last year, said trading profits
increased by 12 per cent to £25m.
Asset management and planning
consents across the portfolio
helped drive valuation gains of
£48m – particularly in the south
east of England – and offset a £20m
market driven valuation loss.
“This has been another
successful year during which we
have achieved some significant
milestones across our portfolio,”
Bill Oliver, chief executive said.
“These achievements underline
our growing presence in the
London and the south east market
while also proving that there are
still opportunities in the regions
for well-placed and well- priced
product,” he said.
St Modwen ups
asset value by
nine per cent
BY KASMIRA JEFFORD
Qinetiq in line as US defence
market remains uncertain
TRADING in the third quarter
continued to tick along in line
with expectations for defence
technology group Qinetiq, it said
in a trading update yesterday.
In November, Qinetiq said its
first half performance had been
strong, despite cuts to
government spending in the UK
and the US.
BY CATHY ADAMS
This uncertainty in the US
market had lingered this year, the
company said yesterday, as delays
to award contracts continued to
weigh on performance as a
“significant number” of bids
remain outstanding.
The performance of its UK
services division continued to
benefit from a more competitive
cost base and better project
execution.
As previously guided, Qinetiq
said that the performance of its
global products division will be
weighted towards the first half
due to the delivery of two key
orders for its vehicle survivability
product, Q-Net.
The FTSE 250 firm confirmed
that its full-year outlook remains
unchanged, despite visibility
remaining much lower,
particularly in the US.
+44 (0)20 7092 0053
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CITY MOVES
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Battersea was
sold for £400m
YouView launch helps TalkTalk
boost its customer numbers
WEDNESDAY 6 FEBRUARY 2013
17
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LONDONREPORT
T
HE FTSE rebounded yesterday
from a steep fall in the previous
session, with investors
encouraged by forecast-beating
earnings and improving economic
data from the Eurozone.
The index closed 0.6 per cent, or
35.92 points, higher at 6,282.76, after
suffering its biggest one-day in three
months on Monday as political
uncertainties in Spain and Italy and a
string of analyst downgrades sparked
profit taking from four and a half
year highs.
“Despite the general plotline being
of renewed European concerns, I do
not think the broader economic
backdrop has changed materially and
yesterday's moves were more posi-
tion-based than fundamental
change,” Jack Pollard, analyst at
Sucden Financial Private Clients, said.
“In the context of this, we’ve seen
these lows bought and we’ve traded
higher today, along with a tightening
in European credit spreads which is
helping to underpin the macro.”
Yields in Spain and Italy eased after
Markit’s Eurozone composite PMI,
which gauges business activity across
thousands of companies and is seen
as a good gauge of future growth in
the currency bloc, hit a 10-month
high in January.
The oil price also recovered towards
$117 (£75) a barrel, helping the ener-
gy sector, which contributed over 11
points to the rally on the FTSE 100.
Oil heavyweight BP added five
points alone to the index after its
fourth-quarter profits beat forecasts,
although profits fell.
Oil and gas group BGalso boosted
the sector as its shares recovered
from a 3.1 per cent fall in morning
trade after it said it would miss 2015
production targets.
Following a more upbeat confer-
ence call, the shares surged as much
as 6.5 per cent on the day, before clos-
ing up 2.9 per cent. They added the
most points to the FTSE 100 index
after BP.
“We’ve been buying them on the
rebound after the conference call.
They’re going to be drilling Egyptian
wells to offset the output decline,”
says Darren Easton, director of trad-
ing at London-based Logic
Investments.
Chip designer ARM was also a big
riser following earnings, gaining 4.4
per cent after fourth-quarter profits
beat expectations.
British retail sales also rose strongly
in January, boosted by the popularity
of tablet computers and smartphones
which ARM provides parts for, a sur-
vey showed.
“Fundamentals are driving individ-
ual movers with ARM’s results help-
ing to underpin the market, though
today’s retail sales probably had a bit
of spillover given the expectation
these were boosted by purchases of
technological items,” Pollard said.
FTSE flips back
to rally mode
after fresh data
CITY
YOUR ONE-
STOP SHOP
BROKER VIEWS AND
MARKET REPORTS
FTSE
5 Feb 30 Jan 31 Jan 1 Feb 4 Feb
6,250
6,300
6,350
6,200
6,150
6,400
6,450
6,500
6,282.76
5Feb
DASHBOARD
Recovery for
US stocks on
strong profits
U
S stocks climbed yesterday,
recovering a day after the
market’s biggest sell-off since
November, as stronger-than-
expected earnings brightened the
profit picture.
Dell’s stock rose after the world’s
No3 computer maker agreed to be
taken private in a $24.4bn deal, the
largest leveraged buyout since the
2008-2009 financial crisis. The stock
gained 1.1 per cent to $13.42.
All 10 S&P sectors were higher, and
the S&P 500 and Nasdaq gained more
than one per cent.
The market’s bounce follows a sell-
off on Monday that gave the S&P 500
its biggest percentage decline since
mid-November.
The benchmark remains up six per
cent since the start of the year and is
less than four per cent away from its
all-time closing high of 1,565.15 from
October 2007.
Analysts said fourth-quarter results
have been among factors helping to
boost stocks. Yesterday Archer
Daniels Midland reported revenue
and adjusted fourth-quarter earnings
that beat expectations, boosted by
strong global demand for oilseeds.
Shares rose 3.3 per cent to $29.38.
“There’s not a huge upside surprise
by any means, but we’re definitely see-
ing slightly better-than-expected earn-
ings overall,” said Bryant Evans,
portfolio manager at Cozad Asset
Management, in Champaign, Illinois.
The Dow Jones industrial average
was up 99.22 points, or 0.71 per cent,
at 13,979.30. The Standard & Poor’s
500 Index was up 15.58 points, or 1.04
per cent, at 1,511.29. The Nasdaq
Composite Index was up 40.41 points,
or 1.29 per cent, at 3,171.58.
The market shot higher at the start
of the year after US lawmakers were
able to come to a last-minute agree-
ment to avoid a national “fiscal cliff,”
but questions on spending cuts
remain.
BESTof theBROKERS
SMITH & NEPHEW
Panmure Gordon has downgraded the medical technology firm from “buy” to
“hold” rating reflecting a recent rise in the share price, and raises its target to 720p.
“We cannot imagine the outlook statement as strong as consensus implies,” the
broker says ahead of the firm’s annual results on Thursday. However, Panmure
maintains a positive stance on Smith & Nephew over the longer term.
PREMIER FOODS
Investec has downgraded Britain’s biggest food manufacturer from “buy” to “hold”
and lowered its target price from 125p to 95p, after the recent departure of chief
executive Mike Clarke. The broker added that if the firm is to remain public, it
depends on an “established team with a consistent record” that can steer the firm
through an equity raising.
ROLLS-ROYCE
Morgan Stanley has an “overweight” rating on the engine maker and has raised its
target price from 1,000p to 1,200p. Rolls-Royce trades at a discount when compared
to the global industrials sector, the broker reckons, and the shares offer protection in
a weaker after-market. The firm will need to improve cash generation to bridge the
value gap, Morgan Stanley adds.
NEW YORK
REPORT
Smith & Nephew PLC
30 Jan 31 Jan 1 Feb 4 Feb 5 Feb
p 740
735
725
730
715
720
710
707.50
5 Feb
Premier Foods PLC
30 Jan 31 Jan 1 Feb 4 Feb 5 Feb
p 102.5
100.0
97.5
95.0
90.0
87.5
92.5
88.75
5 Feb
Rolls-Royce Holdings PLC
30 Jan 31 Jan 1 Feb 4 Feb 5 Feb
p 980
970
960
950
975.00
5 Feb
I
T HAS suddenly become
fashionable to be concerned
about a slowdown in China’s
growth rate. It’s not a matter of a
short-run cyclical downturn,
with normal service resumed shortly.
It is a worry that there will be a
permanent slowdown by the end of
this decade. Instead of annual
growth rates around 10 per cent or
more, the Chinese economy will
settle down to the more sedate rates
seen in the West in the 1950s and
1960s, in the range of 3 to 5 per cent.
The source of the problem, it is
argued, is that the workers are
getting uppity. Certainly, the Chinese
authorities have held down increases
in the living standards of the average
person. As a result, the wider
Y
OU’RE all the same” is the
complaint often levelled at
politicians. But this cannot be
said of small businesses, even if
the increasing use of “SME” as
a shorthand for small and medium-
sized enterprises can give the opposite
impression.
One of my resolutions for 2013 is to
stop using the term. It doesn’t do jus-
tice to the diversity of enterprise in
Britain today. And it is only by under-
standing these differences that Labour
can show it is not the same as other
political parties when it comes to sup-
porting British business.
My late father arrived in London from
Nigeria in the mid-1960s with very little
money. He worked his way up from
nothing to run a successful import-
export business. He succeeded in his
own way – not as a generic SME, but as
a very particular business, facing very
particular challenges.
Entrepreneurial values are part of my
history, but they are also core to my pol-
itics. They are central to the values of
One Nation Labour: people getting
ahead, turning ideas into action, chal-
cityam.com/forum
Enterprise must be a
motor of social mobility,
enabling people to
achieve their potential
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
WEDNESDAY 6 FEBRUARY 2013
CHUKA UMUNNA
Why Labour is the natural party of
small business and entrepreneurs
lenging vested interests, generating
profit and creating jobs along the way.
Enterprise can and must be a powerful
motor of social mobility, enabling peo-
ple to achieve their full potential. But
developing ideas that support this goal
begins by understanding the variety of
motivations and needs that small busi-
ness people have.
There are the “aspirants” – those with
the ambition to be their own boss, but
who lack the push or the pull, knowl-
edge or access to advice needed to take
the plunge. In our schools, colleges and
universities, we must normalise entre-
preneurship as a career, alongside
other occupations, to help address this.
Then there are the “traders” – the
market traders, shopkeepers,
plumbers, craftsmen, and white van
men. We know them because we can’t
function without them. If the hot
water goes, they get it working. If
you’ve run out of milk, they sell it
round the corner.
A growing group are the “lifestylers”
– those who choose patterns of work to
fit around other parts of their lives like
caring responsibilities, or who might
seek income from an interest, hobby or
talent. Since 2008, their numbers have
ballooned, with the number of people
in self employment rising by 9 per cent.
A full 40 per cent of new jobs created in
this parliament have been self-
employed. This is partly the product of
an important shift in how business is
done, although it also reflects people
having to freelance to keep afloat as job
opportunities dry up.
Some consciously self-define as
“entrepreneurs”, particularly those
doing business through social media
and in emerging sectors. This can range
from those with rapid growth plans as
pioneers of new products, to high-tech
designers and innovators.
Finally there are the “small employ-
ers” – those who are still small but pro-
vide substantial employment in their
localities. They’re not so large as to jus-
tify a HR department, but in aggregate
they provide jobs for large numbers of
people nationally.
The five categories I mention are not
exhaustive or mutually exclusive. I use
the descriptions to highlight the chang-
ing nature of our business population.
For political parties, they make up an
important part of the electorate, whose
support Labour is seeking to win at the
next General Election. And what they
all have in common is a need for cus-
tomers with money to spend, banks
that will lend, investors who will back
them, invoices to be paid on time and a
government that can see things from
their point of view when it regulates or
in how it taxes.
That is why we would stimulate
demand with a temporary VAT cut and
by bringing forward infrastructure
investment. It is why we would set up a
British Investment Bank to increase
access to finance, and we would give a
national insurance break to all micro
businesses in London taking on extra
employees. We would also clamp down
on the scandal of large companies fail-
ing to pay their small business suppli-
ers on time.
Above all, access to networks from
which to draw expertise and advice is
incredibly important to businesses –
and it is important to us too. We have
established NG: Next Generation,
Labour’s entrepreneurs network which
gathered at London’s Tech City last
night. We are determined to show we
are not “all the same”. A good place to
start is by listening to what businesses
have to say, giving them the opportuni-
ty to connect with one another and
translating our words into action.
Chuka Umunna is Labour MP for
Streatham and the shadow business secre-
tary.
economy has grown faster, with the
surplus ploughed back into capital
investment projects.
A couple of years ago, I was in
Shanghai in August. It was 35
degrees even at nine in the evening.
Watching a group of middle-aged
women perform Pilates in the street
to the sounds of an old ghetto
blaster, I could not help but feel that
it will not be long before they expect
an air-conditioned gym and cutting-
edge music. More seriously, “internal
security” is a major headache for the
Communist Party. There are frequent
demos and riots demanding better
living standards.
But we’ve been here before. This is
how the UK industrialised. In the
first half of the nineteenth century,
the share of wages as a portion of UK
national income was much lower
than today. As with China in recent
decades, profits were high. This is
how almost all rich countries started
on the path of development. Marx
even coined a phrase for it – the
“primitive accumulation of capital”.
The economist Paul Krugman,
now a famous critic of austerity, was
not always the darling of the
metropolitan liberal elite. In 1994, he
published a brilliant paper in which
he wrote of his “faith in free
markets” called The Myth of Asia’s
Miracle. Back then, the West feared
economies like Japan and Singapore,
which were apparently poised to
take over the technological
leadership of the world.
Krugman essentially rediscovered
Marx and showed that their success
was based on letting profits and
investment boom. He concluded that
“if there is a secret to Asian growth,
it is simply deferred gratification,
the willingness to sacrifice current
satisfaction for future gain”.
Intriguingly, given his current
advocacy of increasing government
debt, Krugman went on: “That’s a
hard answer to accept, especially for
those American policy intellectuals
who recoil from the dreary task of
reducing deficits and raising the
national savings rate”.
But the slowdown in Asian growth
rates was not at all bad news. Rapidly
rising living standards created
export markets for consumer
products. In China – and everywhere
else – people now demand services.
And these are the sorts of things at
which the US and the UK excel. The
process of China growing up is a
massive opportunity, not a problem.
Paul Ormerod is an economist at
Volterra Partners, a director of the think-
tank Synthesis and author of Positive
Linking: How Networks Can Revolutionise
the World.
AGAINST
THE GRAIN
PAUL ORMEROD
We don’t need to fear a Chinese slowdown – it’s real capitalism in action
In association with
AMSTERD
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19
WEDNESDAY 6 FEBRUARY 2013
Bank ringfencing
[Re: Ringfencing is the wrong solution to
the wrong problem, yesterday]
It’s right to point out that Northern Rock,
HBOS, and Bradford and Bingley were
largely retail banks. But that doesn’t mean
there isn’t a problem to solve. Retail banks
have been relying on a flood of cheap
money from the Bank of England, and are
still reticent (or lack the incentive) to stop
propping up zombie companies and
mortgages. Whether we have structural
reform or not, banks will still gratefully take
Funding for Lending to throw at mortgages,
and Britain’s property bubble will stay
inflated. Gimmicks like structural separation
may win votes from an ignorant electorate,
but they won’t resolve systemic fault lines.
MatthewNicolson
Airline taxes
[Re: Axe tax and life growth, airlines urge
Osborne, yesterday]
The airlines’ latest salvo in their campaign to
persuade the public and the government
that air passenger duty is damaging to the
economy is a report they commissioned
PwC to produce. They have subsequently
claimed that the industry would be able to
“move quickly to add new flights in
and out of the UK”. But with the airline
industry simultaneously complaining about
lack of extra capacity at Heathrow, in
particular, where would this increase in
flights actually occur? This seems
particularly pertinent given that these extra
flights will supposedly lift GDP by 0.46 per
cent.
Namewithheld
F
IFTY years ago the average
London house cost roughly the
same as a month’s rent in
some parts of North London
today. Notwithstanding the
effect of inflation, that cannot be
sustainable, socially or economically.
Among the range of housing
challenges we face, the greatest by far
is simply to build more homes.
That’s why Boris Johnson will today
set the challenge of building 1m
homes over the next 25 years. They
are needed to meet a growing popula-
tion – effectively Birmingham’s popu-
lation added to London – and to boost
the capital’s economy through con-
struction jobs. But it is also about
ensuring that London’s dynamic
workforce can afford to live in and
commute from the new communi-
ties coming to life across the capital.
Currently, we simply don’t have a
housing system capable of delivering
that number of homes, and this has
been the case for at least a generation.
The market alone didn’t get close to
providing the right amount – even at
the peak of the biggest housing boom
this country has ever seen in the mid-
1990s.
So it’s time for a radically different
approach. And this needs to be sup-
ported by a new financial settlement
that treats housing as essential infra-
structure. Huge progress has been
made to expand the mayor’s housing
powers, with record numbers of
affordable homes being built and a
major programme of releasing vacant
public land – worth over £1bn so far.
But City Hall’s powers will only be
optimised with stable financial
resources. Stamp duty, the tax on
London’s successful but overheated
housing market, should now be used
to offset the costs of that success.
Stamp duty is increasingly a London
tax. Most Londoners pay 3 per cent,
and new levies on homes costing over
Will Tory divisions over same-sex marriage
damage the party’s re-election prospects?
YES
The same-sex marriage bill was not in the Conservative manifesto,
the coalition agreement, or the last Queen’s speech. No green or
white discussion paper has preceded it. But it was “whacked”
through the Commons – to borrow the ugly but efficient word
deployed by Boris Johnson – on a whipped timetable. It is this haste
and speed which has so angered Tory MPs. It stands in contrast to
ministers’ lack of urgency over transferable tax allowances for
married couples – which is in the agreement. The bill will help propel
traditional Tory voters towards the waiting embrace of UKIP. It has
already forced large-scale resignations among the foot soldiers the
party relies on to canvass. It will further endanger David Cameron’s
leadership. And it assisted in producing a record post-2010 election
poll lead for Labour yesterday. How can this be good for the party?
Paul Goodman is former Conservative MP for Wycombe and
executive editor of ConservativeHome.
Paul Goodman
NO
Alex Singleton
The opponents of gay marriage failed to make a decent argument
and did not manage to sway public opinion – which, by some
measures, broadly supports the change. In any case, the public will
adjust to gay marriage just as it did to the legalisation of
homosexuality, and to the lowering of the age of consent during the
governments of John Major and Tony Blair. Yes, a handful of
authoritarian right wing Tories will be disgruntled about the
legislation. But by 2015 they will have other concerns, such as Europe
and the economy. Meanwhile, among the majority who support gay
marriage, the legislation helps David Cameron soften the Tories’
image. This will be particularly useful when the party’s economic
policies come under criticism from Labour. This branding objective
remains important – voters want not only to feel that their politicians
have the right policies, but also that they are decent people.
Alex Singleton is managing director of the Singleton Group.
Give London back
its stamp duty to
reinvest in growth
£2m are focused largely on central
London. It must be right, therefore,
that tax paid by Londoners is retained
and reinvested to the benefit of
Londoners. And it could be worth
about £1.3bn a year.
That investment would transform
City Hall’s ability to tackle London’s
housing challenges with creative,
longer-term measures. It would allow
us to accelerate major regeneration
schemes – just half of London’s prior-
ity areas will provide enough homes
to house Luxembourg. We could
pump-prime transport improvements
to make building more viable. We will
also be able to expand first-time buyer
products through the mayor’s hous-
ing covenant. We could dramatically
reduce build times by scaling up work
on new models like Build to Rent, and
continue a forensic approach to
unlocking stalled sites that have plan-
ning consent, but which are not
being built in London.
The government has already made
welcome attempts to localise spend-
ing through business rates and coun-
cil tax. Scotland has been given the
power to retain stamp duty. Wales
looks set to get it too. But when the
Confederation of British Industry is
citing housing as a bigger block to
economic growth than transport, it is
absurd for an international city of
London’s stature not to have a signifi-
cant revenue stream to meet the
needs of its inhabitants and remain
globally competitive.
Richard Blakeway is deputy mayor for
housing, land and property.
RICHARD BLAKEWAY
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FROM
DAM £139
visit cityjet.com from London City Airport
RTN
The average water bill in the south west is
now £500 per annum. A horrendous
impact on low-income households.
@RichardWellings
Dell has gone private. But how will this
allow the company to become more
responsive to market changes?
@WillMackey
Dell will be the third largest US private
company behind Cargill and Koch, and the
twelfth or thirteenth globally.
@harryhenry
Fitch: Greece (which had the highest peak
deficit of any Eurozone country) has done
the most to balance its books.
@Frances_Coppola
BEST OF TWITTER
LETTERSto the editor
WE WANT TO HEAR YOUR VIEWS
E: theforum@cityam.com | Comment: cityam.com/forum | @cityamforum
WEDNESDAY 6 FEBRUARY 2013
21
cityam.com
PERSONAL FINANCE MANAGEMENT WEALTH
I
T IS important for investors to pick
solid investments that perform
well over time. Equally important,
however, is how you choose to buy,
manage and monitor them.
Many online platforms have sprung
up that can help you with the process.
They allow you to buy and hold differ-
ent assets – like shares, bonds and
funds – within tax wrappers, like indi-
vidual savings accounts (Isas) or self-
invested personal pensions (Sipps), or
outside of them.
Part of the benefit is that you can
conveniently hold your investments in
one place, making it easier to monitor
performance. Some platform providers
also offer online tools and research,
which you can use to optimise your
portfolio, and ensure that you are
investing in suitable products.
Although charging structures vary,
many providers offer discounts on fees.
But with such variety on offer – from
both established providers like
Barclays Stockbrokers, and newer
firms like Nutmeg – the key to select-
ing the right platform is to understand
what type of an investor you are, and
what you require. Are you a buy-and-
hold investor who invests for the long-
term? Or are you an active investor
that trades frequently?
ACTIVE INVESTORS
Dealing fees for shares and investment
trusts typically begin at between £10
and £15 per transaction – when you
buy and sell. The cost of trading can
add up and eat away at your returns.
So investors who trade frequently
should ensure that their platform
offers a good deal for individual trades.
For investors buying or selling more
than 10 times per month, Interactive
Investor charges a very competitive £5
per transaction (£10 per transaction for
those that trade less). But like some
other platforms, it levies a fee for using
its service – £20 per quarter (although
this charge is waived for Sipp
investors).
However, this fee is credited against
the commissions that you pay, mean-
ing that you will effectively get your
first two trades commission-free. But
costs like this can still make a platform
unappealing to those who prefer to
manage their portfolio less actively.
BUY-AND-HOLD
Long-term buy-and-hold investors
often lean towards low-cost tracker
funds, which can be invested into regu-
larly, or with a lump sum. Trackers are
cheaper than actively-managed funds,
and some platforms have enticing
deals. For example, Hargreaves
Lansdown offers a range of trackers
that cost just £2 per month to hold.
But be cautious of other fees, like
annual management charges for cer-
tain investments (like open-ended
investment companies and unit trusts)
held within an Isa. Alliance Trust
Savings charges a flat fee of £10 per
quarter (plus VAT), and Hargreaves
Lansdown caps it at £45 per year.
This doesn’t mean that buy-and-hold
investors should ignore actively-man-
aged funds – some have delivered
respectable returns. But they are more
Investing is a lot
easier with the
right platform
expensive. Again, look for discounts:
Bestinvest, Alliance Savings Trust and
Hargreaves Lansdown all offer dis-
counts on initial charges for some
funds, which can be up to 5.5 per cent
of the invested amount. They can also
offer discounts on the annual manage-
ment charges, potentially saving you
another 0.5 per cent.
RESEARCH AND MONITORING
Many investors will want a platform
that offers research about investment
performance, and how different invest-
ments match with their own risk pro-
file. Most platforms provide
information of this sort. But it is
important to realise that they do not
offer bespoke advice based on your
own circumstances, only offer guid-
ance. Under new FSA rules you must
pay a regulated adviser for tailored
financial advice.
But you needn’t solely rely on your
An appropriate provider can help you to
save on costs, writes Yogesh Chandarana
platform. Online portals like
Morningstar and FE Trustnet have
extensive fund research, and offer
their own assessment of fund perform-
ance, as well as giving fund manager
ratings. This can help you to find top
performers that work within your
portfolio.
And while platforms can offer a con-
venient place to monitor your portfo-
lio’s performance in one place, it could
also be worth using independent
online tools like Rplan. This not only
allows you to check performance, but
also gives an assessment of the fees
that you pay.
DON’T BE TIED
You needn’t be tied to one platform
either. It is clear that some have differ-
ent advantages, and target different
types of investors. There is no harm in
using more than one, as long as you
keep an eye on the costs.
However, beware of costly transfer
fees associated with switching between
some providers. Transferring your
funds and investment from one plat-
form to another can be subject to
administration fees – usually a one-off,
flat-cost – and they can vary between
providers.
Before you transfer, ask a provider if
it has any incentives for switching over.
Barclays, for example, offers clients
£150 per account to switch over
(capped at £500). It also provides other
financial incentives of up to £1,000
(depending on the size of your
account) to transfer across. Although it
can be soporific, it is always worth
reading the terms and conditions –
you don’t want to encounter nasty
costs down the road.
But the one cardinal sin is to be
shackled by inertia – putting in a little
hard work could save you money, and
enhance your portfolios performance.
UK stocks have performed quite
poorly over recent years against
most of their international
counterparts. A compounding
effect has been the general
weakness of the pound, which has
not helped one jot. As a stark
reminder of the global effects of
currency moves, a UK investor in
the German DAX would hardly
have noticed any bear market at
all. Even if he or she had bought at
the highs of 2007, German euro
holdings in sterling terms would
still be up nearly 20 per cent.
Compare this to a German investor
in the UK who, over the same time
period, would still be staring at a
25 per cent loss even after the
rallies of the last few years.
What is curious is the oft-stated
fact that most of the senior stocks
in the FTSE are not UK focused at
all. It is generally agreed that over
70 per cent of FTSE 100 business is
actually overseas. You would have
M
ARKETS finally saw a sell off
this week, as investors
decided that discretion was
possibly the better part of
valour, and concluded that
booking profits might be the thing
to do.
On the basis that nobody ever
got sacked for taking a profit, it is
understandable that funds, which
have generally had a tough time
over the last few years, might want
to lock in some of their good
fortune before it disappears. That
said, even after the reversal, the
market is up over 6 per cent on the
year to date. But investors might
note that there are over 40 FTSE
100 index dividends due to go “ex”
over the next month, and we may
see some lightening of positions
once payment dates have passed.
Overall, the question on
everyone’s lips is whether the rally
can really take hold and continue
through 2013. It is always hard for
markets to continue higher, day
after day, as the psychological
pressure builds on new entrants to
avoid being the person who “buys
the high”. Little market
corrections, therefore, are meat
and drink to those looking for a
pull back to get in.
Underlying the moves is the need
for return. Dividend yields for blue
chip stocks are still over 4 per cent,
which looks fantastic against
returns on cash or bonds. It is also
a simple fact that the Bank of
England is unlikely to move rates
aggressively higher for a good
many years to come.
thought that a weak pound would
have been good for UK stock
prices. These are some of the
reasons why advisers have been
getting increasingly positive about
the UK equity markets.
Unfortunately, all of the best
intentions do not help if the
market decides to go on one of its
regular walkabouts. Every year,
there seems to be a period when
confidence flies out of the window.
Last year it happened around May,
2011 ran into summer blues in
August, and in 2010 it was May
again. February has its fair share of
“moments” (2007, 2008 and 2009
come to mind). But it is fair to say
that most of our clients are
ignoring any thoughts of negativity
and are buying into any weakness.
Time will tell if they are right.
It is true that the actual
economic data has been pretty
grim recently, although markets
have generally ignored this.
The need for returns is still driving investors into equities
Investors playing on the long side
will be hoping that this effect will
continue until such time as the
numbers turn prettier.
Simon Denham is chief executive of
Capital Spreads. You can follow him on
Twitter @DenhamSimon
While Capital Spreads attempts to
ensure that the information herein is
accurate at the date the information was
produced, it does not guarantee the
accuracy, timeliness, completeness,
performance or fitness for a particular
purpose of any of the information
provided herein and under no
circumstances are they to be considered
an offer, solicitation to invest or be
construed as giving investment advice.
CAPITAL
COMMENT
In association with
PLATFORM PROVIDER PARTICULAR BENEFITS
Interactive Investor Share trading accounts have low transaction charges for regular investors (£5 per transaction)
Hargreaves Lansdown The platform levies no annual management fee on over 2,400 funds held within its Vantage Isa
Bestinvest Bestinvest First offers discounts of up to 5.5 per cent on initial charges for fund purchases
Alliance Trust Savings Alliance Trust Saving’s Isa wrapper charges a competitive £10 per quarter (plus VAT)
Selftrade Offers a wide range of research, including independent analyst notes of varying sophistication
Barclays Stockbrokers Barclays Stockbrokers’ Funds Market offers loyalty bonuses to long-term customers
SIMON DENHAM
LIFE&STYLE
WEDNESDAY 6 FEBRUARY 2013
22
cityam.com
FOOD & DRINK
RESTAURANT
STK
336-337, The Strand, WC2R 1HA
Tel: 020 7395 3450
FOOD hhhii
SERVICE hhhhi
ATMOSPHERE hhiii
Cost per person without wine: £45
By Steve Dinneen
AMUSE
BOUCHE
BRUCE WILSON
The sustainable food argument is flawed – we just need more variety
T
he recent news that the
Marine Conservation Society
has removed mackerel and
gurnard from its list of
“sustainable” fish is an ironic sign
of the times.
Responsible diners avoid some
foods in a bid to protect a species,
only to find that everyone else has
done the same and now their new
favourite is on the watch list. In
recent years, this quest to eat
“sustainably” has led to less
common fish coming to the fore,
such as pollack and ling instead of
cod and haddock. But now pollack is
more expensive than cod and is
being threatened in much the same
way. And just 10 years ago, gurnard
was practically given away for bait,
whereas now it is so sought after
that it commands as high a price as
red mullet.
Of course, there has to be a
balance and restaurants and
supermarkets have started to do
their bit to introduce more variety.
However, this throws up a tricky
problem for the diner: are all of
these “new” options as nice to eat as
the old favourites?
There was a phase a few years ago
of serving squirrel on London
menus, hailed as the new
sustainable meat choice – a free-
range, plentiful source of
protein that would reduce
our reliance on intensively
farmed meats and doubled as
pest control. In the case of squirrel,
I’d say that there’s a reason why no-
one eats them – they are dry, tough
and unpalatable no matter what you
do with them.
My point is: if you want to eat
well, it’s really important to get to
understand the best way to use
whatever new ingredient you are
trying.
As far as fish goes, trout can
easily be substituted for salmon, but
ling, for example, which is a
member of the cod family, is
actually quite different to cod.
Although it works well battered for
fish and chips, it would be horrible
if you just pan-fried it as the meat is
much firmer and has an earthy
flavour. Dogfish is good smoked, a
Head chef, Paternoster Chop House
bit like eel, or used in a stew but is
pretty much inedible done any
other way, and the only thing to do
with wrasse or coley is make
fishcakes out of them.
Ultimately, nothing is sustainable
if demand becomes too high, so a
bit more variety on our plates
should be encouraged.
But there are other ways
to eat more sustainably too:
choosing seasonally,
buying from day-boat
fishermen, talking to suppliers
about what they have, rather than
what you want, and reducing
wastage as far as possible. That way
we might not have to resort to
eating squirrel.
STK does a belter of a rib eye – if
you can stand the club atmosphere
P
RIMAL SCREAM frontman Bobby
Gillespie once said: “All vowels
are fascist, man, everyone knows
that”. It’s a sentiment that
obviously chimed with the owners of
US steakhouse chain STK, which has
just arrived at the ME London hotel.
This isn’t just any old steakhouse,
though. Oh no, this is a “female friend-
ly” steakhouse. Female friendly.
Women rejoice: at last, somewhere
you can eat that doesn’t despise you.
No doubt this will have you weeping
with joy into your apron (don’t forget
to reapply your mascara before your
husband gets home!).
To illustrate how female friendly it is,
the website features a photograph of a
red stiletto heel stomping on a raw
piece of steak. It looks like an advert
for the kind for a low-rate S&M club
you might find in a smashed-up
phone-box. This may or may not be the
aesthetic they were going for.
Its design is the height of sophistica-
tion, if you happen to be a footballer
from the 1980s. It is all chrome and
beige leather and chandeliers and lit-
tle oriental-style trees, and everything
is suffused with ubiquitous purple
lighting. It is half restaurant, half
nightclub, and it has the volume to
match. It has a DJ, who progressed
from R&B to electro as the night went
on, looking increasingly despondent,
head bopping like a nodding dog,
probably wishing he were playing to a
basement in Hoxton instead of a
restaurant in Aldwych.
Most evenings, I was informed, the
clientele like to kick off their shoes
(presumably red stilettos) and dance
on the seats. The only people I saw
dancing were a group of drunken
Irishmen who had the general air of
purposeful violence suggestive of a
stag do.
The volume of the music means con-
versation is out of the question, which
I guess could be a plus point if you’re
on a date, given that you’ll have to be
within snogging distance just to ask
someone to pass the salt.
Our waitress was a force of nature,
presumably hired for being the only
person loud enough to cut through
the music when reading out the spe-
cials. She was the kind of waitress I
would usually move not only tables
but cities to avoid. In the context of
STK, though, she was perfect. Just as I
excused myself to go to the bathroom
she arrived at the table. “Where are
you going?” she demanded. “Order
your drinks first.” I obeyed. She didn’t
seem like the kind of person who takes
no for an answer.
She went on to tell us about the
upcoming rugby match between
Ireland and Wales (she wrongly pre-
dicted Wales were going to “smash
them”) and even drew a little map in
my notepad for reasons that now
escape me. Anyway, I digress.
To start I went for prawn Rice
Krispies, just because I didn’t believe
it would actually come with breakfast
cereal. I was wrong: it consisted of
king prawns served on a bed of rice
puffs and topped with a shellfish
bisque. Unfortunately, the volume of
the music meant that to hear the
snap, crackle and pop I would actual-
The sea of beige
and purple that
adorns the STK
steakhouse
ly have had to dip my ear in it, which
somewhat defeats the purpose. The
other problem is that soggy Rice
Krispies aren’t very nice – you end up
with a kind of mushy soup that
smells far better than it tastes. The
foie gras French toast was better –
rich and tasty – although the portion
was more fine dining than all-
American steakhouse.
The starters, though, are just the
warm-up act. Anywhere that dares to
call itself STK – vowels or no vowels –
better do a bloody good slice of cow.
And the rib eye was excellent – a ten-
der tract of meat the size of
Greenland, cooked properly rare and
marbled with delicate fat that melted
in the mouth. I had it with the STK
sauce, which turned out to be a rather
unexciting barbecue dip. My guest
went for the fillet steak, which, despite
being from the “small” section of the
menu, was as thick as a fist. It wasn’t
bad but it was a little on the dry side
and a touch over-done, lacking that
deep, smoky flavour of a great
American fillet steak.
I shudder to think of the sheer quan-
tity of meat that must be involved in
the “large” section of the menu, which
culminates with the 750g “cowboy
steak” at £55.
For dessert, on the insistence of the
waitress, I went for “a taste of the fair-
ground”, which comes served on a
miniature Ferris wheel. It consists of a
selection of fairground-themed snacks
including popcorn, candyfloss and tof-
fee apples, all of which we were far too
full to make even a half-hearted
attempt at eating.
With most of the steaks starting at
the £30-mark, it’s not cheap, but nei-
ther is it wildly unreasonable. It cer-
tainly didn’t seem to be putting many
people off – it was jam-packed when I
was there. Maybe I just didn’t get STK.
Maybe I’m too old, craving such anti-
quated concepts as conversation and
lighting that isn’t purple.
As we were leaving, the DJ was play-
ing Daft Punk. If STK were a nightclub,
and not a restaurant, this would have
been the track that brought everyone
to the dance-floor. But there was just a
solitary Irishman dancing on a chair. Is
this what we’ve come to?
From January
mocktails to a
real Bloody Mary
ALCOHOL’S VALUE goes beyond its simple
price-tag. Over the Christmas period it
was no doubt used by plenty to ease
family tensions, as well as to smooth the
passage from 2012 into 2013. Alcohol is so
ingrained within our social experiences
that human guinea pigs exhibit the effects
of drunkenness, even when tricked with
non-alcoholic placebos.
But sometimes, it is time for a little time
off. Following in the footsteps of hopeful
Babylonians, Romans and medieval
knights, many of us spent last month
enduring a dryathlon, which may have
involved you sipping on
non-alcoholic
cocktails, otherwise
known as
mocktails.
The idea of
cocktails without
alcohol may seem
oxymoronic, but the
history of the cocktail
is finely laced with
drinks that won’t get
you drunk. Even
Jeremiah P Thomas –
widely considered the
father of American
mixology – has a
chapter on temperance
drinks in his seminal 1862 book, The Bar-
Tender’s Guide.
But January is fast becoming a distant
memory. And those of us getting back on
the wagon may be in search of a hangover
cure. Those looking for a variation on the
classic Blood Mary may want to head over
to Barts, a late night speakeasy on Sloane
Street, where you can pick up a Mary
Tudor (a Bloody Mary with a twist):
MARY TUDOR
n50ml of Bloodshot Vodka
n3 ½ bar spoons of rose jam
n½ lemon
nA drop of Fee Brothers Orange Bitters
nA splash of sugar syrup
WEDNESDAY 6 FEBRUARY 2013
23
STRAIGHT
UP
PHILIP SALTER
City A.M.’s cocktail expert
1. HKK
HKK is the ultimate destination for
Chinese aficionados. The
restaurant, which is one of the
most recent openings of the
Hakkasan group, is already
gaining a reputation for offering
some of the best Chinese food in
the City. Michelin-starred chef
Tong Chee Hwee has created an
impressive eight- and 15-course
banqueting menu that’s the
perfect way to celebrate the New
Year with a bang. While the menu
taps into traditional Cantonese
flavours, it does so with a modern
flair, fusing age-old techniques
with new styles.
HKK London, Broadgate West, 88
Worship Street, EC2A 2BE.
To book, call 020 3544 6871
2. Yauatcha
If you’re after great ambiance, this
is the place to go. The restaurant
is known as much for its swanky
interior and mood lighting as it is
for its innovative Cantonese food.
Since it was opened by
Wagamama founder Alan Yau in
2009, it’s become a favourite
amongst foodies for its excellent
selection of modern but authentic
dim sum and wok dishes.
15 Broadwick Street, W1F 0DL.
To book, call 020 7494 8888
3. China Tang at The Dorchester
While the décor might be hit and
miss, there’s no disputing that
China Tang delivers an excellent
fine dining experience. Housed in
The Dorchester Hotel, this
restaurant is the brainchild of
restaurateur David Tang, owner of
several Hong Kong and Beijing hot-
spots. The majority of the food is
Cantonese and the menu features
an array of clay-pot dishes and
roasted meats. Make sure you try the
famed Peking duck or lamb brisket.
The Char siu (rich roasted pork with
Shaoxing wine) is also a winner.
China Tang, The Dorchester Hotel,
Park Lane, W1.
To book, call 020 7629 9988
4. Min Jiang
If you’re after a restaurant that
offers more than great food, Mian
Jiang is the place to go. Aside from
delivering dishes like the much-
loved wood-fired Beijing bird, gong
bao chicken and exquisite dim sum,
its views of west London will make
your night. Housed on the 10th
floor of the Royal Garden Hotel, you
have a bird’s eye view of Kensington
Gardens and Hyde Park.
Min Jiang, Royal Garden Hotel, 2-24
Kensington High Street, W8 4PT
To book, call 020 3544 7970
Celebrate Chinese new year in real style
Chablis is one of the toughest wines to get right –choose wisely
THE BOTTLE
OPENER
NEIL BENNETT
C
HABLIS is a pretty but
inconsequential looking town
just over 100km north of
Burgundy. There are none of
the great chateaux or domaines of
Bordeaux or Burgundy here. Spend
half an hour loitering in the town
square and it is hard to believe this
is the epicentre of one of the world’s
most famous wine regions.
In fact, until last autumn I had
almost given up on Chablis. I had
been served so many glasses of thin,
tinny, pale liquid purporting to be
“Chablis” that I had simply lost
faith in the place. Mass production
and brand exploitation were not
doing it any favours.
But I had a moment (or in this
case a mouthful) of epiphany just
before Christmas, when I opened a
bottle of Chablis Premier Cru, and
was reminded what all the fuss was
about. It was a delicious wine, with
a hint of oak and the wonderful
citrusy, flinty taste the wine is
renowned for. Interestingly enough it
came from Vocoret, which is one of
the less highly-rated winemakers in
the region. Considering the prices for
white burgundy, its southern
neighbour, are whizzing into orbit (a
drinkable bottle of Meursault will
now set you back £25-£30), I thought
it was time to reappraise the region
and the wines. Not all Chablis is
created equal and you need to buy
carefully, here more than almost
anywhere.
The question is: how can a single
appellation produce such good and
bad wines? The answer is partly one
of geography and one of commerce.
Chablis is one of France’s most
northerly wine making regions, so
growing grapes here is tough. Many
years there’s simply not enough
sunshine and the growers face an
annual battle to prevent late frosts
destroying the blossom. So, when
drinking Chablis, pick your vintage
carefully – opt for hot sunny
summers and skip the wash outs. At
the moment that means stocking
your cellar with 2010, drinking up
2005 and avoiding 2011 and 2009.
There is a caste system in place in
Chablis that is directly relevant to
what you drink. Bottom of the heap
are the so-called “Petit Chablis”. To
my mind this is rather like an estate
agent telling you somewhere is
“Maida Vale borders” when you
know it’s Kilburn. Many Petit
Chablis display the worst aspects of
the region. The local growers and
winemakers know that Chablis is a
global brand they can exploit – and
they don’t hold back. Many pick the
grapes by machine, so the ripe and
unripe are piled in together, and then
make mean-spirited wines in large
steel vats and sell them for more than
double what they would fetch
elsewhere. But then comes Chablis
proper, then Chablis Premier Cru, and
top of the heap Chablis Grand Cru.
Taste some of the Premier and Grand
Crus and you would be forgiven for
wondering if they come from the
same planet as the cheap imposters.
The vines are all grown on south-
facing slopes, catching every last ray
of sun, the grapes picked lovingly and
the wines matured for just long
enough in oak barrels. The best are
simply sublime.
So choosing Chablis is like choosing
any wine, only more so. Don’t be
gulled by the brand – get to know
your growers and vintages and be
aware that cheap Chablis is the
opposite of a bargain.
THREE TO FOLLOW
One for the weekend
Chablis Vocoret 2010 (Majestic, £9.99)
The lesser cousin of the wine that
made me change my mind. Nicely
balanced with a lemony finish
One to impress the neighbours
Chablis Grand Cru Les Clos 2008 (Marks &
Spencer £38).
This is a bit of a find. Les Clos is one
of the most sought after fields in all
of Chablis and wine of this quality is
scarce. Snap this up and serve when
you want to impress.
One to tuck away
2011 Chablis Grand Cru Valmur, Jean-Paul
Droin (Lay & Wheeler £205 for six, duty paid).
An excellent wine at a good price. It
won't age like the 2010s but well
worth keeping for 2 to 4 years.
bottle.opener@cityam.com
Naomi Mdudu
1
2
3
4
The Chinese year of the
snake begins on Sunday.
Celebrate in style by tucking
into the best Chinese cuisine
the capital has to offer.
24
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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
3 3 12
45
30 10
39
9 11 20
45
10 6 7
21
29 27
45
13 8 17
17
23
12
28
22
24
15
16
28
11
30
4
11
35
34
14
7
41
16
6
16
ACROSS
1 Celebrated (6)
6 Yellow-flowered
tropical tree (6)
8 Showing
apprehension (7)
9 Eat hastily without
proper chewing (6)
10 Glances over (5)
13 Devoid of practical
purpose (7)
16 Cook with dry
heat (5)
18 Moves around
the border (6)
20 Clearly readable (7)
21 Member of a crowd
causing a violent
disturbance of
the peace (6)
22 Pause
uncertainly (6)
DOWN
1 Becomes bubbly,
frothy (5)
2 Pungent bulbs (6)
3 Complacent (4)
4 Port city in southern
Kenya (7)
5 Milky plant substance
that coagulates on
exposure to air (5)
7 Chemical with the
same formula but a
diferent structure (6)
11 Accounts checker (7)
12 Resolve (6)
14 Marked by friendly
companionship
with others (6)
15 Excessive rate
of interest (5)
17 Those people’s (5)
19 Villein (4)
A
N
D
T
S E
U
H
C

4

4
S E L E C T B P
U A O P A Q U E
B A D E G G Y C
T I O S T R I C H
L E E N U I
E A S T G E R M A N Y
R O E R I O
V A N I L L A O U
C L A M O U N T
C H E E R S S H
E T S I R E N S
4
4
4
4
4
4
4
4
4
The nine-letter word was
DOCTRINAL
9 4 5 1 2 4 1
8 1 9 3 6 2 4 7 5
7 8 9 9 6 8
6 2 5 7 1 4 3 9 8
9 3 6 2 1 6 3
9 8 6 7 5
4 9 8 3 2 3 1
1 6 5 9 4 3 8 7 2
3 2 1 1 2 5
5 7 6 3 1 4 9 8 2
9 8 7 9 5 9 7
T
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S
T
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S
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WEDNESDAY 6 FEBRUARY 2013
BRAIN DOCTORS
BBC2, 9.00PM
New series. Documentary following
the work of doctors in the
neurosurgery department of Oxford’s
John Radcliffe Hospital.
DEREK
CHANNEL4, 10.00PM
The retirement-home worker
celebrates his 50th birthday with a
party at Broadhill, and the staff
welcome a new addition to their ranks.
NCIS
CHANNEL5, 9.00PM
McGee and Ziva investigate when a
US marine drops dead at his
homecoming party, having suffered a
stab wound on his way to the event.
TVPICK
IRELAND are giving injured centres
Gordon D’Arcy and Keith Earls
maximum time to prove their fitness
for Sunday’s RBS Six Nations visit of
England.
D’Arcy suffered a dead leg and
Earls a shoulder problem during
Saturday’s 30-22 victory in Wales,
and team manager Mick Kearney
admitted both were still
recuperating.
“Gordon suffered a nasty dead leg
but is recovering better than we
expected. The prognosis is still
guarded but we are more hopeful
than we were yesterday,” he said.
“Keith took a blow to his left
shoulder that was quite sore. The
prognosis is guarded. He will do
modified training today and
tomorrow and will be reviewed by a
specialist tomorrow.”
Scotland are set to hand uncapped
back-row forward Robert Harley his
Test debut in Saturday’s Six Nations
clash with buoyant Italy.
Harley, 22, replaces injured
Glasgow colleague Alasdair Strokosch
for the fixture at Murrayfield, while
head coach Scott Johnson’s other
enforced change sees Ross Ford come
in for Dougie Hall, who limped off in
Saturday’s defeat against England.
Ireland sweat
on centre pair
H
E HASN’T always had the
easiest time in an England
shirt, but the selectors stuck
with wicketkeeper-batsman
Jos Buttler and he has repaid that
faith by starting the tour of New
Zealand with a bang.
England had to try alternatives to
Craig Kieswetter, who has been left
out of the short-form sides, and
Buttler showed every sign of taking
his chance in the opening Twenty 20
warm-up win yesterday morning.
Buttler is probably not as good with
the gloves as Kieswetter but he is by
no means bad behind the wicket,
and his 57 off 24 balls against a New
Zealand XI underlined his explosive
batting potential.
The opposition are not the best –
the Black Caps are professional and
well organised but lack the three or
four brilliant individuals of England
– so the next few weeks are a golden
chance for him to impress.
Buttler will have his eye firmly on a
place in the team for the 50-over
Champions Trophy in England this
summer. Test recognition may have
to wait as I don’t think he is techni-
cally ready for the five-day game.
While his excellent display did not
surprise me much, I was hugely
encouraged to see fast-bowler Stuart
Broad return in such emphatic fash-
ion from the injury that limited his
action in the winter tour of India.
The captain bowled with good
pace, showed no signs of his recent
heel problem and, by claiming a late
hat-trick in England ‘s 46-run victory,
showed he has not lost his knack of
getting the ball in the right place.
Broad is very important in all forms
for England – when he plays well they
invariably do too – and Test coach
Andy Flower will be just as hopeful as
one-day and T20 boss Ashley Giles
that he stays fit and in form.
Keeping players in peak condition
will be on the coaches’ minds, as any
injuries now wouldn’t leave too
much time for recovery before the
two main events of the summer, the
Champions Trophy and the home
Ashes series. England will surely con-
sider resting seamer James Anderson
and Test skipper Alastair Cook when
feasible in New Zealand, especially
the former as the physical demands
on bowlers are more gruelling.
This tour is a chance for some to
regain form and others to stake a
claim for a regular spot, and I expect
England to be too good for New
Zealand. I see them winning the T20
series, which starts on Saturday, 3-0
and, if they play as they can, going
the whole trip unbeaten.
Andy Lloyd is a former England Test
cricketer. He has also captained and been
chairman of Warwickshire.
IN BRIEF
Ogogo rubbishes Hatton reports
n BOXING: London 2012 star Anthony
Ogogo has denied reports that former
world champion Ricky Hatton is to be
his trainer. The Olympic middleweight
bronze medallist, set for a professional
debut in April or May, said: “Speculation
regarding my trainer situation is wide of
the mark. To be clear, no decision has
been made at this point.”
Button fastest in first F1 testing
n FORMULA ONE: Britain’s Jenson
Button enjoyed an encouraging start to
the 2013 pre-season when he set the
fastest time in testing in Jerez
yesterday. The McLaren driver was
0.848 seconds faster than Red Bull’s
Mark Webber, despite missing five
hours’ track time with a fuel pump
problem, with Romain Grosjean of Lotus
third. English rookie Max Chilton
crashed after his Marussia’s suspension
failed, but the 21-year-old escaped
unhurt. Compatriot Lewis Hamilton was
not among the 11 drivers to test, but is
set to debut his Mercedes today.
Cavendish victorious in Qatar
n CYCLING: Manx sprint star Mark
Cavendish produced a trademark finish
to claim victory in the third stage of the
Tour of Qatar yesterday. Cavendish’s
second stage win since joining Omega
Pharma-QuickStep left him fourth in the
overall standings, eight seconds behind
leader Brent Bookwalter.
FIT-AGAIN England centre Manu
Tuilagi has been told that the onus
is on him to prove he deserves to
be recalled to the starting XV for
Sunday’s RBS Six Nations
showdown with Ireland in Dublin.
Tuilagi had been widely tipped
to return in place of either Billy
Twelvetrees or Brad Barritt for a
match that looks pivotal to
England’s hopes of winning the
championship for only the second
time in a decade.
But the Gloucester man’s try-
scoring debut in Saturday’s
encouraging victory over Scotland
and Barritt’s key role in
marshalling the defence have left
England’s coaching staff agonising
over their midfield selection.
“You have three guys and each
of them bring special attributes,”
said defence coach Mike Catt.
“It is great Billy performed the
way he did against Scotland. Manu
has been out of the game for three
or four weeks. We’ll see how they
all train and we will go
accordingly from there.
“If the guys have performed
exceptionally well on the weekend,
the guys coming in need to make
sure they have the tempo and up
the intensity to really put their
hands forward.”
Catt said it would be “very hard”
to drop Barritt before facing the
twin threat of Brian O’Driscoll and
Jonathan Sexton, who shone in
Ireland’s victory in Wales.
“O’Driscoll is playing
exceptionally well at the moment,”
he added. “We know they are
capable of doing that.”
BY FRANK DALLERES
BY FRANK DALLERES
SPORT
25
WEDNESDAY 6 FEBRUARY 2013
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CRICKET
COMMENT
ANDY LLOYD
Prove you’re worth recalling,
England coaches tell Tuilagi
Buttler delivers on T20 promise
Results
Buttler smashed 57 off just 24 balls
in England’s first T20 warm-up win
ENGLAND captain Steven Gerrard
has tipped his midfield partner Jack
Wilshere to become one of the
world’s great players as they prepare
to start an international match
together for the first time
Wilshere will
be one of best
in world, says
captain Gerrard
tonight.
Gerrard and
Wilshere are
tasked with
i n s p i r i n g
England to a first
victory over
Brazil since 1990
when the 2014
World Cup hosts
visit Wembley for a
prestige friendly to celebrate
150 years of the Football
Association.
Wilshere, who has not
started an England game
since June 2011, has rediscov-
ered top form for Arsenal
since returning from a career-
threatening ankle injury and
impressed Liverpool skipper
Gerrard when the sides collid-
ed last week.
“Jack’s got a bit of every-
thing: he can tackle, pass, get
up and down the pitch, create
or score a goal. He ticks every
box, and he’s going to get bet-
ter and better. He’s only 21 and a fan-
tastic talent, and we’re delighted he’s
back,” said Gerrard.
“He has the potential to become
one of the best in the world. I don’t
want to put any pressure on him, but
having played against him recently
and seen him in training, he’s a
one-off. He’s a lot better
than your normal Premier
League midfielder.”
England manager Roy
Hodgson is expected to
partner Wayne
Rooney with
M a n c h e s t e r
United colleague
Danny Welbeck in
attack, despite trying
Wilshere’s Arsenal team-
mate Theo Walcott as a strik-
er in training.
Ashley Cole is inked in at left-
back and poised to become only
the seventh player to win 100
England caps, and insists he
wants to play on despite clam-
our for Everton’s Leighton
Baines to replace him.
“I’m proud, privileged and
overwhelmed by how many
times I have played for
England, and I hope it doesn’t
stop here,” said Cole.
“If there comes a time –
and there will – when I am
not first-choice left‐back, it
won’t be a problem. I am
not going to quit just
because someone
is playing better
than me or
deserves to
play. “
RETIRING double Olympic
champion Rebecca Adlington is
aiming to ensure all children in
Britain are able to swim 25m
before the age of 12.
Adlington yesterday confirmed
the end of her hugely successful
competitive career, which also
brought medals at world,
European and Commonwealth
level. The 23-year-old from
Mansfield insists she is not
retiring from the sport
altogether, however, merely
changing her focus from
racing to encouraging
participation.
“As a competitive
element, as an elite
athlete, I definitely
won’t be competing
any more, she said,
Adlington retires and sets goal
of improving kids’ swimming
but added: “I hate the word retire
so I don’t want to say ‘retires from
it at all’ because I will never retire
from swimming in general.”
Adlington conceded her target
for getting children swimming,
through her programme Becky
Adlington’s SwimStars, was
ambitious but has declared her
“absolute goal in life”.
“I want to create a deeper legacy
which is trying to get every
single child swimming 25m
when they leave primary
school,” she said.
“I know it is very out there
but I wouldn’t have said five
years ago that I’d have
four Olympic medals in
my drawer at home.
“I know with a lot of
hard work you can do
that. It is such a life
skill. It would
overtake anything I
have achieved
medal-wise.”
WEDNESDAY 6 FEBRUARY 2013
26
SPORT
cityam.com/sport
BY FRANK DALLERES
Adlington won medals at
every major championship
@cityam_sport
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*World Travel Awards 2012
Title-winning Juve boss Conte
linked with Chelsea hot seat
JUVENTUS manager Antonio
Conte has emerged as the
latest candidate to take over at
Chelsea in the summer,
according to reports in Italy.
The 43-year-old, who
masterminded the Turin side’s
unbeaten 2011-12 title-winning
campaign, is on a
shortlist with
former Blues
boss Jose
Mourinho,
Swansea’s
Michael
Laudrup and
Stamford
Bridge hero
Gianfranco Zola,
the Gazzetta
dello Sport reported yesterday.
Conte was in August handed
a 10-month touchline ban for
failing to report match-fixing,
but following multiple appeals
his suspension was cut to four
months and he resumed his
place on the bench in
December.
A run of just one win in six
games has left current
Chelsea manager Rafael
Benitez fighting for his job,
although it is thought
unlikely that a permanent
replacement will arrive
before May.
Conte is said to
have been
learning English
for two years
and to be an
admirer of
the Premier
League.
BY FRANK DALLERES
BY FRANK DALLERES
HUNGARIAN football club
Debrecen have confirmed their
2009 Champions League defeat to
Liverpool was investigated for
suspected match-fixing.
Goalkeeper Vukasin Poleksic
was banned by governing body
Uefa for two years in 2010 for not
reporting being approached to rig
games against Fiorentina and
Liverpool. There is no suggestion of
wrongdoing by the Anfield side,
who say they were unaware the
fixture had been probed.
Reds game
was probed
BY FRANK DALLERES
Conte’s Juve went
unbeaten last term
2
0
Months since Jack
Wilshere’s last
England start
Wilshere has rediscovered
his top form for Arsenal
27
He hasn’t always had the easiest time, but Jos Buttler
repaid the selectors’ faith by starting the tour of New
Zealand with a bang

cityam.com
WEDNESDAY 6 FEBRUARY 2013
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BRAZIL coach Luiz Felipe Scolari
admits to still being tormented by
his decision to turn down the
England job, and hinted he would be
open to taking charge of the Three
Lions in future.
Scolari, whose Portugal team
knocked England out of successive
major tournaments, held talks with
the Football Association about
succeeding Sven-Goran Eriksson in
2006 before rejecting the post.
The 64-year-old, who begins his
second spell in charge of his native
Brazil tonight at Wembley, said
yesterday he felt compelled to turn
down the job, albeit reluctantly.
“Of course it hurts. It hurts a lot
because I would have loved to have
been the manager of the England
team. Who wouldn’t? It’s a
wonderful national team,” said
Scolari, whose Portugal later ended
England’s 2006 World Cup.
“When I was invited to be national
coach of England I still had a
contract with Portugal and I was not
willing to break it. It was my duty to
fulfil it. Imagine what it would have
been like when we played each other
in 2006 and I had signed that
contract with England.”
Scolari said his ill-fated seven-
month spell in charge of Chelsea,
which ended with his sacking in
February 2009, was “marvellous”
and left the door open for the FA to
make another approach.
“Who knows what will happen?
One day, maybe,” he added. “I wish
all the best for the English players
and their manager.”
BY FRANK DALLERES
Scolari was offered the job in 2006
Gerrard, set to start a
game alongside
Wilshere for the first
time, says the Arsenal
player is “a one-off”
Turning down England job
still hurts, admits Scolari
Andy Lloyd on Cricket: Page 25
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