BUSINESS WITH PERSONALITY

Meet London Business School

Speak informally with a London Business School representative about our portfolio of
top-ranked Masters degree programmes and receive advice on the right programme for you.
Monday 28 May 2012: Novotel London Tower Bridge, 10 Pepys Street, London EC3N 2NR
Tuesday 29 May 2012: Hilton Canary Wharf, South Quay, Marsh Wall, London E14 9SH
Please join us at any time between 11.00 and 15.00
Find out more and register your interest at: www.london.edu/startplanning/
Email: masters@london.edu or call: 020 7000 7500
+21*
.21*
1(:
<25.
'8%$,
Deficit row
as IMF calls
for growth
THE IMF heaped praise on George
Osbornes deficit reduction plans yes-
terday, but warned that the coalition
might have to change tack if the
economy worsens much further.
IMF boss Christine Lagarde
expressed delight at the austerity
measures, saying when I think back
to May 2010, when the UK deficit was
at 11 per cent and I try to imagine
what the situation would be like
today if no fiscal consolidation pro-
gramme had been decided, I shiver.
But the IMFs report said Osborne
should spend less on public sector
wages and more on infrastructure if
he wants to boost growth and jobs.
The chancellor welcomed the
report, hitting out at opponents who
have called for the government to
borrow and spend its way out of a
debt crisis, arguing fiscal responsi-
bility is an essential part of our road
to recovery, in part because it
enables interest rates to stay low.
But Lagarde told Osborne he must
be prepared to be flexible if the
Eurozone crisis worsens and the
economy slides further, suggesting a
temporary boost from tax cuts and
spending increases could stave off a
deeper recession in the short-run.
The IMF is right to call for action to
stop slow growth and high unem-
ployment causing long term damage
to our economy, said shadow chan-
cellor Ed Balls. A year ago the IMF
warned that if economic growth
undershot expectations, the govern-
ment should boost the economy with
temporary tax cuts and greater infra-
structure spending.
Since then our economy has been
pushed into a double-dip recession.
There is no case for delay and there
can be no more excuses.
Vincent Tchenguizs status as a suspect could be quashed from next month while his brother Robert will continue to fight to clear his name
ANTI-FRAUD investigators could be
forced to drop a long-running probe
into property tycoon Vincent
Tchenguiz after admitting they have
made a series of mistakes.
The Serious Fraud Office said it is
urgently reviewing Tchenguizs sta-
tus as a suspect after he was arrested
in an inquiry into the collapse of
Icelands Kaupthing Bank.
Yesterday Tchenguizs barrister
accused the SFO of institutional fail-
ure as Vincent and his brother,
Robert, began a judicial review into
their arrests in a dawn raid last year.
The agency made false and mis-
conceived allegations against Vincent
Tchenguiz, the Queens Bench
Division of the High Court was told.
The brothers, two of Britains best-
known entrepreneurs, have not been
charged and have protested their inno-
cence after the raids, which involved
135 police officers in London and
Iceland. Their judicial review accuses
the SFO of unlawful entry, searches
and seizures, misleading a judge and
an abuse of process.
The nature and extent of the SFOs
admitted errors in the present case are
of a different order. In the interested
partys submission they point to collec-
tive institutional failure, said Lord
Goldsmith, for Vincent Tchenguiz, in
court filings.
Lord Macdonald, QC, said the SFO
had made inaccurate and untrue
allegations against Robert Tchenguiz,
who has previously branded the
www.cityam.com FREE
agencys actions as unlawful. The
SFO has cautioned that Roberts rela-
tionship with Kaupthing executives
still needed careful assessment.
The hearing comes after reports the
agency considered putting undercover
agents into Mayfair nightclub
Annabels as part of its investigation.
It will only increase scrutiny on the
SFO, which has been haemorrhaging
staff and is facing its first independent
assessment by the Crown Prosecution
Service Inspectorate.
The SFO, which also promised to
return material seized last year, will
make a decision on Vincent by 18 June
after David Green, its new director,
said that in light of the material filed
in response to the SFOs evidence, the
status of Mr Vincent Tchenguiz as a
suspect in the SFOs investigation
must be, and will be, reviewed and as
a matter of urgency.
Lord Goldsmith said the papers are
as close as I have ever seen to a prose-
cuting authority saying they might
well have to stop this investigation.
Last month a top judge criticised the
sheer incompetence of the SFO. Lord
Justice Thomas ran out of patience
after the SFO admitted there isnt a
record of precisely what information
or documentation was relied upon to
obtain search warrants.
The SFO is expected to begin the
defence of its actions today.
INVESTORS CONTINUE TO SPURN FACEBOOK FLOAT
BY TIM WALLACE
FTSE 100 5,403.28 +98.80 DOW 12,502.81 -1.67 NASDAQ2,839.08 -8.13 /$ 1.58 unc / 1.24 unc /$ 1.27 -0.01
BY PETER EDWARDS
FRAUD OFFICE SET
TO DROP KEY CASE
DEFRIENDED
ISSUE 1,638 WEDNESDAY 23 MAY 2012
EURO HERO
DROGBA OFF
See Sport, Page 30
See Page 3, Page 10
MORE: Page 8

Certified Distribution
02/04/2012 till 29/04/2012 is 100,668
R
E
U
T
E
R
S
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
G
E
T
T
Y
Higher public spending
pushes up UK borrowing
GOVERNMENT borrowing jumped
in April as spending increased
unexpectedly, official figures
showed yesterday, although the
takeover of the Royal Mail pension
funds assets skewed the data in
the month.
The Office for National Statistics
(ONS) officially recorded a budget
surplus of 16.5bn in April, com-
pared with a deficit of 16.9bn in
March and 9.06bn in April 2011.
However, when the 28bn shift of
Royal Mail pension assets is
removed from the calculation it
reveals an 11.5bn deficit, includ-
ing a 12.4bn deficit in the current
budget.
Economists warned the gain in
headline figures disguised longer-
term costs from taking on the pen-
sion funds liabilities.
The current value of those liabil-
ities is 10bn higher than the
assets, so in any holistic assess-
ment of the governments
accounts this can hardly be
thought of as a bonus, said BNP
Paribas economist David Tinsley.
Perhaps more worrying, the
underlying picture this month
looks a little soft. Given the month-
ly volatility in the data there is plen-
ty of time for that to come right. But
it is well to remember that the gov-
Trafigura to move to Singapore
Singapore has enticed Trafigura, one of
the worlds biggest commodities trading
houses, to move its legal headquarters
from Switzerland to the Asian city state,
highlighting the attractions of its low-tax
regime and proximity to China.
Trafiguras relocation is a big boost for
Singapore as it challenges the supremacy
of Switzerland as the worlds commodities
trading hub and fends off competition
from other financial centres, such as
Shanghai, Hong Kong, and Dubai.Pierre
Lorinet, chief financial officer, is to move
to Singapore, joining 150 traders in the
city. But the company will retain its larger
team of traders in Geneva.
BAE wins submarine contract
BAE Systems and its submarine site in
Barrow-in-Furness, have received a boost
after the government confirmed the
company has been awarded a 328m
contract to design the UKs next
generation of submarines. The vessels are
intended to replace the Vanguard class of
submarines, which carry the Trident
nuclear missiles. BAE employs more than
5,000 people in its submarine business,
primarily at Barrow. Engineering firm
Babcock was also awarded a 15m
contract to design parts of the in-service
support, while Rolls-Royce won a reactor
contract worth 4m.
Bosses say GCSEs are not up to job
GCSEs are unfit for the 21st century,
business leaders say. They argue that so
much emphasis is placed on funnelling
teenagers into make-or-break exams at 16
that schools are failing to produce the
confident, rounded young people that
employers want. A CBI group is
considering whether scrapping GCSEs
would give greater freedom to provide a
broader curriculum. Last week the owner
of one exam board called for a cap on the
number of GCSEs sat by each student.
Private spacecraft lifts off
The first private spacecraft aiming to dock
with the international space station
blasted off from Florida early yesterday.
NASA says private industry can develop
unmanned cargo vehicles faster and at
less cost than traditional programmes.
THE EUROZONE crisis remains the
single biggest threat to the global
economic recovery, the
Organisation for Economic Co-
operation and Development
(OECD) said yesterday.
The crisis in the Eurozone
remains the single biggest
downside risk facing the global
outlook, said OECD economist
Pier Carlo Padoan.
Adjustments in the euro area
are now taking place in an
environment of slow or negative
growth and deleveraging,
prompting risks of a vicious circle
involving high and rising
sovereign indebtedness, weak
banking systems, excessive fiscal
consolidation and lower growth,
the report added.
The OECD urged national
governments to implement
structural reforms as the short-
run remedy to spur growth and
boost confidence.
The Paris-based group expects
growth across its member states to
slow to 1.6 per cent this year,
down from 1.8 per cent in 2011.
In the Eurozone alone, the
economy is expected to contract
by 0.1 per cent, the OECD said.
And next year the
unemployment rate in the euro
area will reach an eye-watering
11.1 per cent, the report predicts.
OECD warns of
Eurozone risk to
world economy
George Osborne has agreed to take on the Royal Mails deficit-laden pension fund
2
NEWS
BY JULIAN HARRIS
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
I
F you want proof that the global
economys woes are increasing, as
a result of extreme imbalances,
look no further than some
countries borrowing costs. Germany
has set a zero per cent coupon on its
2-year government bonds (or Schatz)
due to be sold today in other words,
borrowers will not be paid for the
privilege of lending money to the
German state. They will provide their
funds for free or actually at a loss,
given that inflation will eat away at
the real value of their assets.
Germany is due to auction 5bn of
bonds; we will soon find out if it has
been successful. I suspect that it will
be. This was meant to be a regular
bond with a coupon, but with market
yields at 0.06 per cent on the current
2-year, the German authorities had
no choice given market issuance
rules but to set a zero coupon. This is
EDITORS
LETTER
ALLISTER HEATH
Free money for governments is a grave threat to investors
WEDNESDAY 23 MAY 2012
yet another sign of profound turmoil
and distortions in the financial
markets and in monetary policy.
The first reason for the ultra-low
yields, of course, is the desperate need
by investors to find ultra safe-haven
investments and their flight from
risky ones. Hence this rush into ludi-
crously priced German, US and UK
bonds, which are seen as safe.
But there is another consequence to
this: other investors with fewer
restrictions or greater imagination
will increasingly become disenchant-
ed with all financial assets. With equi-
ties still at extremely weak levels, and
the possibility of far worse to come if
the Eurozone crisis intensifies, it is
becoming increasingly tough to find
a good risk and reward balance for
paper assets. Of course, some
investors do manage but Facebooks
disastrous float isnt helping either.
Hence why many will again be
tempted by hard, non-paper assets
(land, property, gold, commodities,
art and so on), fuelling fresh bubbles.
Some such as Marc Ostwald of
Monument Securities believe this
collapse in returns will deal a devas-
tating blow to the very foundations of
government issued paper money. It
certainly makes the challenge of
wealth preservation even tougher
and that is even before Eurogeddon
kicks off in earnest.
dont buy any of it. It was also interest-
ing to hear renewed calls for a cut in
interest rates, in the wake of yester-
days IMF report which discussed the
idea (and other) stimulus measures
in case the Eurozone worsens. There
would clearly be a strong case to
review all monetary policy if the
Eurozone implodes that would be a
real emergency. But those getting car-
ried away and calling for immediate
rate cuts need to stop and think: why
would cutting rates right now from
0.5 per cent to 0.25 per cent or zero be
the answer to any of our problems?
We need to make the UK a better
place to work or invest in, and fix the
banking system, not obsess with
micro-managing demand at the cost
of ever-increasing debt.
DEFICIT WOES
Here is an intriguing question for
those who believe the UK should not
be attempting to reduce its public
spending, or at least that cuts should
be reduced. Stripping out a one-off
accounting transfer of 28bn, the
public finances actually worsened in
April. Borrowing went up by over
2bn compared to the same time last
year, the current budget deficit
widened by over 4bn, central govern-
ment tax receipts on production,
income and wealth were down 0.9 per
cent year-on-year while current
expenditure rose 3.8 per cent.
How much larger do the (misguid-
ed) anti-austerity folk believe that the
governments borrowing needs to be
to make a difference to growth (or
at least GDP)? Another 25bn a year?
50bn? Do we need a deficit of 10 per
cent, or 12, or what? For how long? I
ernment is still relatively only just
into a long period of austerity.
It needs to keep its eye on the ball
if it is to keep delivering on spending
targets that will become progressive-
ly harder to deliver as the low-hang-
ing fruit have been picked.
Current spending rose from
54.15bn in April 2011 to 56.24bn
last month, made up of a 424m rise
in interest payments, a 790m jump
in the benefits bill and an 896m
increase in other spending.
Meanwhile current receipts only
rose 548m on the year from
42.38bn in April 2011 to 42.93bn
this year.
The ONS revised the previous
months data, showing annual bor-
rowing for the financial year 2011-12
was actually 1.6bn lower than ini-
tially thought.
This is mainly because of an
upward revision to receipts of
income tax and national insurance
contributions and slightly lower
spending on net social benefits, par-
tially offset by higher net investment
spending, explained the Institute
for Fiscal Studies.
cityamactivetrader.com 0203 201 8900
In association with Champagne reception sponsor
WHAT THE OTHER PAPERS
SAY THIS MORNING
FACEBOOK shares tumbled again yes-
terday on the third day of trading as
more investors turned their backs on
the websites inflated price.
Falling 4.3 per cent in pre-market
trading, the stock slid further in the
day to close down 8.9 per cent at $31.
The social networking giant has
now shed $19bn from its initial
$104bn market cap since floating on
Friday.
Facebooks bankers, who stepped in
on Friday to keep the share price
above $38, now have even more to
explain after the shares closed under
the hiked IPO price range.
US regulators the SEC and FINRA
added pressure to the banks and the
Nasdaq stock exchange last night,
saying that the issues around the IPO
should be reviewed.
I think there is a lot of reason to
have confidence in our markets and
in the integrity of how they operate,
but there are issues that we need to
look at specifically with respect to
Facebook, said SEC chairman Mary
Schapiro.
Nasdaq had come under fire after a
glitch delayed trading in Facebook
Facebook loses
friends as stock
drops further
BY LAUREN DAVIDSON
shares for 30 minutes on Friday.
Meanwhile Morgan Stanley, the
lead adviser in the offering, said it
had acted in compliance with all
applicable regulations after it
emerged the bank had cut its revenue
forecasts for Facebook in the middle
of its IPO roadshow.
JP Morgan and Goldman Sachs, also
main underwriters on the deal, were
said to have done the same.
There is still scepticism over what
Facebooks underlying value is.
Pricing the stock is a delicate line it
was pitched at the very top and
theres no where else to go from
there, BDOs head of valuations
Andrew Caldwell told City A.M.
BOTTOM LINE: Page 10

WEDNESDAY 23 MAY 2012
3
NEWS
cityam.com
Facebook Inc
18May 21 May 22May
32.5
35.0
37.5
40.0
42.5
45.0 $
31.00
22May
JUST two bids for the London
Metal Exchange (LME) remain on
the table after an offer from US
exchange group CME fell short of
expectations.
This leaves just InterContinental
Exchange (ICE) and Hong Kong
Exchanges and Clearing (HKEx) in
the race to purchase the world's
largest metals marketplace.
Both remaining parties are
understood to have submitted bids
of around 1.2bn.
The Board of the LME has
decided to continue discussions
with two parties regarding their
proposals for the potential
CME knocked out of race to
buy London Metal Exchange
BY JAMES WATERSON
acquisition of the LME. This
process will continue over the
coming weeks, the exchange said
in a notice issued yesterday.
Some traders have raised
concerns that a potential sale
could end many traditions
associated with the 135-year-old
exchange.
But the LME board confirmed
that it will consider each bidders
plans for the future governance
and operation of the market and
the deliverability of their
respective proposals in addition
to the value of the bid.
Both CME and ICE declined to
comment, while HKEx could not
be reached.
Investors have chance to snap
up photo agency Getty Images
PHOTO agency Getty Images could
be on the market after its owners
appointed advisers to consider a
potential sale or IPO.
Hellman & Friedman, the US
private equity fund which bought
the business for $2.4bn (1.5bn)
four years ago, is understood to be
working with Goldman Sachs and
JP Morgan Chase to help it decide
whether to dispose of the business.
A source close to deal said that a
sale or IPO could value the
BY JAMES WATERSON company at $4bn, a healthy return
given that the owners have already
paid themselves $875m in two
special dividends.
Hellman & Friedman and JP
Morgan declined to comment while
Goldman Sachs was not
immediately available for comment.
Investors have recently increased
their interest in photo agencies and
last week Gettys smaller rival
Shutterstock announced its
intention to raise up to $115m in a
float on the New York Stock
Exchange.
Seattle-based Getty Images was
founded in 1995 by Mark Getty
the British-born heir to the Getty oil
fortune and Jonathan Klein.
It adopted a programme of
aggressive acquisitions in the
fragmented photo agency business
and became the first company to
license photos online.
Before being taken private Getty
recorded net income of $125.9m
from revenues of $858m. It also
generated cash of $249.3m.
Klein continues to be the firms
CEO while Getty sits as chairman. The photo agency could be floated or sold off by its private equity owners
G
E
T
T
Y
All you
can eat
data
2000
Any network
minutes
5000
Three-to-Three
minutes
5000
Texts
IN BRIEF
Japan hit by credit rating cut
nFitch cut Japans sovereign credit
status yesterday to the lowest level
among global ratings agencies as a
political stalemate there dims the
chance that the country can curb its
snowballing debt. Fitch Ratings cut
Japans long-term foreign currency
rating by two levels from AA to A+, the
fifth highest investment grade. It cut
the more important local currency
rating by one notch from AA- to A+.
Both were given a negative outlook.
Fitch warned further downgrades were
possible unless the government takes
steps to stabilise public finances.
Dutch MP tries to halt bailout fund
nDutch politician Geert Wilders, who
aims to turn a September election into
a referendum on the euro and EU mem-
bership, filed a lawsuit yesterday aimed
at postponing the Dutch parliaments
ratification of Europe's permanent
bailout fund until after the vote.
Wilders' move comes amid popular
resentment at European Union bailouts
for the bloc's smaller debt-saddled
economies.
Graduates lose interest in finance
nJobseeking graduates are less inter-
ested than ever before in working in
finance and accounting, according to a
survey by the Graduate Management
Admission Council. The sector fell
below 100 on the studys attractiveness
index for the first time since the analy-
sis was developed in 2003. Among all
students graduating in Europe this
year, the most popular industries for
job searches were consulting, with 65
per cent searching for roles in the
industry, products and services at 44
per cent, only then followed by finance
and accounting with 38 per cent.
GREECES four largest commercial
banks will receive 18bn (14.5bn)
recapitalisation funds by Friday, a
senior banker at one of the four
said yesterday.
We will get the money by Friday
at the latest. Maybe we will get it
tomorrow, said the banker, who
did not want to be identified.
The funds are needed to
recapitalise Alpha Bank, National
Bank of Greece, EFG Eurobank and
Piraeus Bank.
Once they receive the
recapitalisation, in the form of
European Financial Stability Fund
(EFSF) bonds, the banks will be able
to resume funding operations with
the European Central Bank (ECB),
he said.
The ECB suspended some Greek
banks from funding operations last
week because their capital was too
low, forcing them to obtain higher-
cost funding from an emergency
programme at the Bank of Greece.
Greek banks saw much of their
capital vanish this year because of
losses in an historic bond swap that
wiped out most of the value of
their holdings of Greek
government debt.
Ratings agency Fitch yesterday
warned that a range of banks
across the Eurozone will need to be
recapitalised before the current
crisis can be solved, and pointed to
banks in the UK to prove that such
a strategy can work and restore the
sector to health.
Greek banks in
line for 18bn
recapitalisation
BY CITY A.M. REPORTER
G
E
T
T
Y
FRENCH President Francois Hollande
faces his first major negotiating test
at todays informal EU summit, as he
wants Germany to back jointly guar-
anteed eurobonds, lowering weak
governments borrowing costs.
European Council president
Herman van Rompuy convened the
summit to bash out a common posi-
tion among leaders on plans to boost
growth and jobs across the EU.
With much of the Eurozone in
recession, Greeces ongoing political
crisis and worries over Spains banks,
uncertainty is growing over the
future of the euro.
Yet this week a senior German offi-
cial called the bonds the wrong pre-
scription at the wrong time.
Although Spanish Prime Minister
Mariano Rajoy and Italian leader
Mario Monti have insisted any sup-
port through German-backed bonds
would not be used as an excuse to
relax reforms, Berlin is unconvinced.
Chancellor Angela Merkel has long
maintained only market reforms to
boost competitiveness will solve the
crisis permanently.
Hollande, backed by Italy, Spain and
the European Commission, believes
jointly issued eurobonds will relieve
the pressure on weak governments,
cutting their borrowing costs and
ending the imminent threat to their
use of the currency. He also wants to
relax the fiscal compact, letting coun-
tries spend more in the hope of boost-
Germany and France to
clash over eurobonds
BY TIM WALLACE
ing GDP growth in the short term.
Additional infrastructure spending
is also on the agenda, possibly through
the use of project bonds and the
European Investment Bank funds.
Furthermore, as Greeces election
next month could see the election of
anti-bailout party Syriza, discussions
are also expected to cover the
Eurozones response to any slippage in
the countrys fiscal programme.
CONSUMER confidence remained very low in
May, European Commission data showed
yesterday, with falling inflation expectations
giving consumers a little extra hope.
The index rose to minus 19.4 in May from
minus 20.2 in April in the EU as a whole, and to
minus 19.3 from minus 19.9 in the Eurozone.
That leaves confidence still below the seven-
month high recorded in March, and firmly
below its long-term average of minus 12.8.
The improvement in confidence may well
have been helped by reduced inflation
expectations given the recent appreciable
retreat in oil prices, said Howard Archer from
IHS Global Insight, who also pointed to rising
GDP figures as a fillip for the outlook.
However, with the Greek situation
heightening uncertainty and with economic
fundamentals largely against the consumer, it
is hard to see Eurozone consumers being
anything other than cautious.
Consumer spending makes up more than
half of the Eurozones output, but households
are hit by wage cuts, austerity and joblessness.
BY TIM WALLACE
Francois Hollande hopes to persuade Germany to guarantee other countries debts
Consumer condence remains low
2012 2010 2008 2006 2004 2002
0
-5
-10
-15
-20
-25
-35
-30
EUlong-termaverage
EU
B
a
la
n
c
e
s
%
Eurozone
FORUM: Page 22

WEDNESDAY 23 MAY 2012
5
NEWS
cityam.com
Europes consumers remain cautious
MARKS & SPENCER, Britains biggest
clothing retailer, has scaled back
ambitious sales growth targets as it
reported its first profit slide in three
years.
The group yesterday revealed a one
per cent drop in underlying profits to
705.9m for the year to 31 March,
slightly ahead of analysts forecasts of
694m.
Chief executive Marc Bolland con-
ceded yesterday that targets set out
two years ago to grow sales by up to
2.5bn by 2013-14 had been made
unrealistic due to the deterioration
in the economic climate.
M&S now expects to achieve
between 1.1bn and 1.7bn more in
annual revenues by 2014, as dispos-
able incomes remain squeezed and
the outlook across the Eurozone is
uncertain.
Bolland said austerity had become
the new normal: People are feeling
the squeeze but they are a little bit
more in control.
Total sales grew by two per cent to
9.9bn in the year, with international
sales up 5.8 per cent.
UK sales grew 1.5 per cent, driven by
a strong performance at its food divi-
sion, which saw sales rise 3.9 per cent.
But general merchandising fell 0.9 per
cent, with home down 10 per cent and
clothing up just 0.2 per cent.
Bolland said efforts to revamp all of
its UK stores to make them easier to
navigate were working well, with the
92 newly refurbished stores showing a
2.5 per cent uplift in sales.
He said M&S was still on track to
become an international multi-chan-
nel retailer and plans to have 10 web-
sites worldwide and open 100
international stores by the end of year.
G
E
T
T
Y
HAS MARKS & SPENCER LOST ITS
SPARK? Interviews by Anaam Raza
I dont think so. Its retail services are very good
so this is just due to reduced protability in the
economy. If you compare it with Sainsbury or Tesco it is a
much higher value brand and its bakery is exceptional.
These views are those of the individuals above andnot necessarily those of their company
PORTOLEIO
MATTHEW
CHARTIS

No. I think this dip is just a response to the gen-

eral market trend. Shoppers are switching to
other supermarkets but Ive always shopped at M&S and it
really offers value for money with excellent quality.
NATASHA RUSKINA
IG GROUP
Yes, because it is not catering for the right audi-
ence anymore; it just caters for old people now.
With new retail outlets such as H&M and Topman entering
the market, it has to be more competitive on the price.
MUHITUR RAHMAN
INVESTEC

CITYVIEWS
Marks and Spencer Group PLC
17May 16May 18May 21 May 22May
350
345
340
335
p
344.30
22May
WEDNESDAY 23 MAY 2012
6
NEWS
cityam.com
The C-Class Coup AMG Sport.
From just 299
*
a month.
AMG body styling and 18
"
AMG alloy wheels, bi-xenon headlamps,
Attention Assist and when youve finished driving, theres Parktronic with
Advanced Parking Guidance. 299
*
can sometimes go an awfully long way.
Visit mercedes-benz.co.uk/oers
*For Business Users only. Advance payment applies. Ocial government fuel consumption gures in mpg (litres per 100km) for the C-Class Coup range: urban: 15.5(18.2)-44.8(6.3), extra urban: 33.6(8.4)-
65.7(4.3), combined: 23.5(12.0)-55.4(5.1). CO2 emissions: 280-133 g/km. Model featured is a C 180 BlueEFFICIENCY AMG Sport Coup at 31,580.00 on-the-road with optional panoramic glass sunroof at 1,350.00 (on-the-road price includes VAT, delivery, 12 months Road Fund
Licence, number plates, rst registration fee and fuel). *All payments subject to VAT: Finance based on a C 180 BlueEFFICIENCY AMG Sport Coup with metallic paint on a 36 month (6+35 prole) Contract Hire agreement, excluding maintenance, with an advance payment of 1,794.00. Based on 10,000 miles per annum.
Excess mileage charges may apply. Rental includes Road Fund Licence for the duration of the contract. Written quotations available on request including alternative contract lengths and mileages. Guarantees and indemnities may be required. Available on C-Class Coup models ordered/credit approved
between 1 April and 30 June 2012, registered by 30 September 2012. Oers subject to availability. Oers cannot be used in conjunction with any other oer. Some combinations of features/options may not be available. Please contact your Mercedes-Benz Retailer for availability. Credit provided subject to status by
Mercedes-Benz Financial Services UK Limited, MK15 8BA. Prices correct at time of going to press 05/12.
A

D
a
i
m
l
e
r

B
r
a
n
d
TESCO AND MORRISONS market
shares are still under pressure from
fierce competition, retail data
showed yesterday, as upmarket and
discount retailers outpaced the
middle market.
Kantar Worldpanel figures for the
12 weeks to 13 May 2012 revealed
that Aldi grew sales by more than
25 per cent compared with the
same period last year, achieving a
record market share of 2.8 per cent.
Lidl also held onto its 2.8 per cent
share, growing sales by 11.3 per cent
while high-end grocer Waitrose
boosted sales by seven per cent to
keep its 4.5 per cent market share.
Tesco and Morrisons both saw
their market share dip slightly
compared to the same three-month
period a year ago, from 31.1 to 30.8
per cent and 21.1 to 11.9 per cent
respectively.
Edward Garner, a director at
Kantar, said, rather than flocking to
the discount sector, many
consumers are continuing to do
their main shopping trip in their
usual store, but spending the
remainder of their household
budget on the discounters.
The market as a whole grew by
just 3.1 per cent over the period
lower than the five per cent seen
last year as retailers failed to match
their 2011 sales, which were boosted
by the Royal Wedding bank holiday.
Waitrose and
budget grocers
outpace rivals
BY KASMIRA JEFFORD
M&S cuts back
growth targets
as profits slide
BY KASMIRA JEFFORD
M&S chief executive Marc Bolland said the group performed well in a tough market
NEWS
7
TRUSTED HERE.
AND TO FIND THE QUICKEST
WAY TO THE AIRPORT.
SAT NAV FROM THE WORLDS GPS EXPERT.
TRUSTED EVERYWHERE.
Trust Garmin to have the most up-to-date maps and 3D Trafc
FREE for the life of your sat nav. Roads change, bridges are
built and trafc delays come and go, but with Garmin you
know youve always got the latest picture of the roads
without paying more. Ever.
garmin.co.uk/lifetime
*Selected sat navs only. See website for details.
*
G
E
T
T
Y
PHILIP CLARKE, Tescos chief execu-
tive, said he would forgo his
372,000 annual bonus after the
retailers weak UK performance last
year prompted its first profit warn-
ing in 20 years.
I decided at the beginning of the
year that I would decline my annual
bonus for 2012, Clarke said in a
statement yesterday.
I wasnt satisfied with the per-
formance in the UK and I wont take
the bonus. Im confident that were
tackling the right issues.
Clarke was paid a basic salary of
over 1m last year and was awarded
share options worth 2.7m during
his first year on the job, according to
the companys annual report.
The supermarket giant also said
yesterday its top 5,000 managers
would receive a reduced annual
bonus representing 16.9 per cent of
their maximum entitlement.
Executive directors will get 13.5 per
Tescos Philip
Clarke waives
annual bonus
BY KASMIRA JEFFORD
cent of the maximum.
Overall, staff will share bonus pot of
more than 110m.
Tesco shares have lost almost a quar-
ter of their value this year after the
supermarket group warned it needed
to invest around 1bn in a bid to stem
market share losses in Britain.
Clarkes decision comes amid a
wave of high profile investor revolts
over boardroom pay at companies
such as Barclays, Aviva, Inmarsat and
Prudential in the so-called sharehold-
er spring.
Tescos chief executive Philip Clarke has passed up his annual 372,000 bonus
Tesco PLC
17May 16May 18May 21 May 22May
320.00
325.00
315.00
310.00
p
309.08
22May
cityam.com
CHIHUAHUAS IN CHELSEA
MORE BLACK CABS THAN
LONDONS BIGGEST BLACK CAB APP DOWNLOAD HAILO NOW
G
E
T
T
Y
WEDNESDAY 23 MAY 2012
cityam.com
8
NEWS
INFLATION fell back into its target
bracket last month for the first time
in over two years, official data
showed yesterday, saving Bank of
England governor Mervyn King from
writing yet another letter of
explanation to the chancellor.
Consumer prices rose three per
cent in the year to April, down from
3.5 per cent in March and the lowest
level since February 2010.
CPI inflation is now within one
percentage point of the Banks two
per cent target, while core inflation
fell from 2.5 per cent to 2.1 per cent.
Transport prices rose 1.2 per cent
on the month, down from the 2.4
per cent increase in the same period
last year, dragging down the
headline figure.
Alcohol and tobacco jumped 2.9
per cent, in part due to rising taxes,
but that is also well down on the
record 5.3 per cent rise a year earlier,
also pulling down the main number.
The cost of living measured on the
retail price index (RPI) fell more
slowly, from 3.6 per cent in March to
3.5 per cent in April, while the tax
and price index (TPI) rose by 3.1 per
cent, down from 3.3 per cent.
It is encouraging that the fall was
driven by a drop in core inflation,
said Capital Economics Vicky
Redwood. We expect inflation to be
below target before this year is out.
Inflation at its
lowest level in
over two years
BY TIM WALLACE
BRITAINS economy needs more sup-
port from the Bank of England, the
International Monetary Fund (IMF)
said yesterday, arguing that falling
inflation means interest rates can be
lowered even further.
The economy has been flat as pri-
vate demand-led growth has not fully
materialised, IMF boss Christine
Lagarde said, after first quarter GDP
estimates showed a contraction.
The government and consumers
are all reducing their reliance on
debt, the IMF argued, saying that this
deleveraging will continue to hit
growth for years to come.
The situation is further compound-
ed by tight credit conditions, and so
the Bank of England should cut rates
below its current record low of 0.5
per cent, and consider expanding its
quantitative easing programme from
its current 325bn, the IMF said.
With the yield curve now essen-
tially flat at the policy rate out to
three-year maturities, a rate cut is
likely to reduce yields nearly one-
IMF wants Bank
of England rate
cut to help GDP
BY TIM WALLACE
for-one well out into the curve,
increasing its stimulative impact, it
suggested.
Cutting the budget deficit is vital
and must be maintained, the IMF
said, but the overall mix of spending
should change to boost growth.
Fiscal space for further growth-
enhancing measures could be gener-
ated by property tax reform, restraint
of public employee compensation
growth, and better targeting of trans-
fers to those in need, said Lagarde.
This fiscal space could be used to
fund higher infrastructure spending,
which has a high multiplier and rais-
es potential output.
If economic momentum fails to
build in the near future, further cred-
it easing, infrastructure spending
and tax cuts should be considered as
temporary measures to support
growth, the report said.
The IMF also supported moves to
reduce systemic risk in the financial
sector and called for the financial pol-
icy committee to be given the power
to set loan-to-value and loan-to-
income limits.
Lagarde said that infrastructure spending could boost the UKs economy
n Growth has been flat, in part because of
essential deficit reduction and households
cutting their debts, but also because of the
Eurozone crisis
n Unemployment is falling and remains
relatively low considering economic woes
n Growth should pick up over the second
half of this year, as long as the Eurozone
crisis does not worsen sharply
n Inflation should fall below target in the
next 18 months, assuming no more jumps in
commodities prices
n Cutting interest rates below 0.5 per cent
will help stimulate economic growth, as
would more quantitative easing
n The deficit reduction plan is on target and
going well, but could be adjusted to boost
growth for example, by spending more on
infrastructure and less on public sector wages
n A sustained push to ease planning restric-
tions will also help the economy by allowing
the private sector to fill the space left by the
public sector cuts to building work
n If the economy worsens, even more could
be spent on infrastructure, while short-term
tax cuts could also help growth
n Efforts to stabilise the financial sector
should be extended, including by granting
additional powers to regulators to limit the
size of loans
THE IMFS UK ASSESSMENT
MORE than a third of UK insurers
fear the industry will miss the
deadline to comply with the
forthcoming Solvency II reforms,
according to research carried out for
Deloitte by the Economist
Intelligence Unit.
Insurers also said uncertainty over
the final draft of the EU directive
which will lift capital requirements
has increased costs.
Rick Lester, lead Solvency II
partner at Deloitte, said that despite
delaying the implementation date
until January 2014, firms were less
confident that it would be met.
There has been a 50 per cent
increase from last year in the
number of respondents who have
expressed concern with the
industrys ability to meet the
compliance deadline, he said.
Lester added that the primary
concern of insurers was the lack of
detailed information on Solvency II
requirements since they are
unlikely to be clarified until
relatively close to the go-live date,
creating additional costs.
The delays are affecting profits,
with 73 per cent of respondents
saying setbacks have taken a toll on
budgets. Meanwhile 42 per cent said
Solvency II delays have increased
programme costs by more than five
per cent.
Insurers fear
industry will
miss deadline
BY JAMES WATERSON
G
E
T
T
Y
PLANS to shake up Britains energy
market were unveiled by the govern-
ment yesterday, in a sweeping over-
haul that looks set to raise
household bills to pay for a greater
mix in the countrys power supply.
Energy bills are forecast to jump
by around 100 a year by 2030
under the plans, but the coalition
insists that the long-awaited
reforms will shave four per cent a
year from the hike facing con-
sumers without these changes.
Under the draft bill put before par-
liament yesterday, low carbon pro-
ducers will be encouraged with
guaranteed prices for green power.
This will be backed up by expen-
sive taxes for fossil fuel generators,
with a carbon price floor of 16 per
tonne of carbon dioxide generated,
rising to 70 in 2030.
The government aims to attract
110bn of new investment over the
next decade to replace ageing ener-
gy sources, with a focus on domestic
gas, wind and wave power.
Power market
overhaul set to
push up bills
BY MARION DAKERS
The coalition has also placed
importance on reviving the coun-
trys nuclear power sector, which
was dealt a blow earlier this year
when E.ON and RWE pulled out of a
15bn scheme to build two new
plants.
Rival firm EDF yesterday said it was
working with nuclear regulators to
extend the life of eight of its UK
nuclear sites, which were due for
decommissioning in 2016.
Energy secretary Ed Davey warned
that the UK faces power cuts, soaring
prices and environmental damage
without the plans.
The reforms will also be better for
the economy, leaving us less vulnera-
ble to rising global energy prices and
supporting as many as 250,000 jobs
in the energy sector, he added in a
statement.
Labours shadow energy minister
Tom Greatrex welcomed the empha-
sis on renewables, but added: There
is nothing to break the dominance
of the energy giants, nothing to sim-
plify tariffs, and nothing to protect
vulnerable customers from being
ripped off.
Energy minister Ed Davey said without these changes, the UK would face power cuts
WEDNESDAY 23 MAY 2012
9
NEWS
cityam.com
n The new draft Energy Bill, combined
with parts of the Finance Bill 2011, is the
biggest change to the UK energy market
in decades
n It aims to secure Britains energy
supply by diversifying into green power,
domestic gas and shoring up the nuclear
sector
n The government reckons it can attract
110bn of new energy investment twice
the level seen in the last decade
n New market mechanisms will be
brought in to encourage producers, such
as a guaranteed minimum price for green
power
n The average household bill is forecast to
rise 100 a year by 2030, in part due to
higher spending on power infrastructure.
But DECC believes bills will actually start
to fall by the end of this period, as Britain
is better protected from the volatility of
the energy markets
n A separate plan for Britains gas sup-
plies, which continue to play a major
role, is due to be published in September
n Plans were also set out to sell the
Ministry of Defences 2,500-kilometre
long aviation fuel network, built in 1939,
to help reduce public debt and encourage
private investment
ENERGY BILL AT A GLANCE
YELL Group, the struggling
publisher of the Yellow Pages,
yesterday unveiled a new name as it
posted a 1.2bn loss.
Subject to shareholder approval,
the group will be renamed Hibu,
pronounced high-boo, as part of its
attempt to change its fortunes.
But the re-brand, which would
have cost the company hundreds of
thousands in consulting fees,
accompanied Yells full year results
in which the debt-riddled company
fell to loss and reported a 14 per
cent revenue decline to 1.6bn.
Yell posted a loss of 1.2bn,
compared to a 47m profit last
year.
Its print directory division
continued to tumble, with
revenues down 21 per cent to
1.1bn, while its digital directories
arm fell by 11 per cent to 327m.
The ailing company found a
small lifeline in its digital services
division, where revenues more than
doubled to 134m, boosting total
digital sales by seven per cent.
Yell, which is currently
undergoing a drastic transformation
due to its enormous debt pile, said it
reduced its net debt by a fifth, or by
565m, to 2.2bn.
Its shares tanked by almost a
quarter, closing at 2.4p a fraction
of its almost 6 high five years ago.
Yell hides poor
results behind
name change
BY LAUREN DAVIDSON
cityam.com
Lines are open 7 days a week, 8am-8pm, except bank holidays.
Call us free on your landline; standard network charges apply to all calls made froma mobile phone.
Terms apply. Subject to credit check. Android
TM
and the Android
TM
logo are trademarks of Google Inc.
Discover the One for you
The latest HTC One and SIM Only deals including
our 3 month Data Test Drive
Vodafone Data Test Drive
Use as much mobile internet as you
want for 3 months to find out which
plan suits you best
This offer is for Pay monthly customers on a mobile internet inclusive,
12-month SIMOnly or handset plan. UK mobile internet only.
WEDNESDAY 23 MAY 2012
10
NEWS
BOTTOM
LINE
DAVID HELLIER
Facebook shares decline deflates internet banking star
H
OTSHOT Morgan Stanley
banker Michael Grimes is the
target of some angry finger
pointing after Facebooks
share price fall since its debut on
Friday.
In many ways he shouldnt be sur-
prised. In the run-up to the float,
Grimes was the subject of a number
of press reports extolling his promi-
nence in the technology sector,
detailing the way in which he stole
lead position on the account from
rivals and generally outlining his all-
out star banker status.
In other words, Grimes had the
profile that any other investment
banker would want and because he
had it, rather than them, he has
quickly become the butt of criticism
as things have not gone absolutely
according to plan on the years most
talked about flotation
For Grimes, Facebook was the
largest of a series of IPOs that have
cemented his position as the go-to
man in his sector. It started with
LinkedIn last May and continued
with the IPO of internet radio group
Pandora, deals site Groupon and
social gaming firm Zynga.
That the Facebook float struggled
since its launch day has given
Grimes critics plenty of ammuni-
tion.
Why did Morgan Stanley re-price
the issue upwards at the last minute
when one of its own research ana-
lysts was revising forecasts down-
wards?
Why did it not seek more advice
from the other banks working on
the deal, including JP Morgan,
Goldman Sachs and Barclays?
Bankers say it very much took the
lead on this deal, making most of
the major decisions without a lot of
input from the rest of the banking
syndicate.
Some are asking more straightfor-
wardly whether Morgan Stanley, in
its quest to be the lead banker, just
got the valuation plain wrong, over-
valuing Facebook massively.
In its defence the bank argues that
the issue got away on Friday with-
out any of it landing on the laps of
the underwriters, which is no mean
feat given an issue of such size and
given the problems of the Nasdaq
market that saw a closedown in
trading for 30 minutes.
Bankers say that Morgan Stanley
was determined not to re-live the
experience of LinkedIn, whose
shares surged 50 per cent on their
debut, leaving many saying the issue
had been underpriced.
With Facebook shares now around
18 per cent below their issue price
and with Grimes reputation built
up so high ahead of the deal, he
faces the prospect of days if not
months of questioning about the
way he has handled the deal.
david.hellier@cityam.com
G
E
T
T
Y
PRIVATE equity house CVC Capital has
moved closer to its hotly anticipated
flotation of Formula One by selling a
$1.6bn (1.01bn) stake to three major
investors.
CVC, which owned 63.4 per cent of
F1, has sold 21 per cent of the busi-
ness, it said yesterday.
Asset managers BlackRock and
Waddell & Reed alongside Norges
Bank Investment Management, the
asset management unit of the
Norwegian central bank, took stakes
in a major fillip for Bernie Ecclestone,
the F1 commercial rights holder,
before a planned initial public offer-
ing (IPO).
The deal gives Formula One an
enterprise value of about $9.1bn
including $7.2bn of equity and $1.9bn
of debt.
This is great news for Formula One
and an important step in its develop-
ment, said Donald Mackenzie, man-
aging partner of CVC, which invested
in 2006 and will remain the control-
ling shareholder.
We have supported the company
and its management as they have
BY PETER EDWARDS
grown the company with great suc-
cess. The addition of these three high-
ly regarded investors to our share
register is validation of this success.
F1 begins pre-marketing the IPO this
week after months of speculation. It is
pressing on with the sale after being
encouraged by the demand for shares
in the run-up to Facebooks IPO, which
raised $16bn. The sport is seeking to
raise at least $2.5bn in a Singapore list-
ing, which could ultimately value F1
at up to $10bn.
Goldman Sachs, UBS, and Morgan
Stanley are lead-managing the IPO,
which could be Singapores largest
since Hong Kong billionaire Li Ka-
Shings Hutchison Port Holdings Trust
raised $5.5bn in early 2011.
Several recent developments have
highlighted the risks from politics to
safety attached to Formula One.
Earlier this month Williams was
forced to cut short its celebrations
after the Spanish grand prix, its first
race victory in eight years, when 31
people were injured in a fire in the
teams garage. In April the visit of F1 to
the Middle East for the Bahrain Grand
Prix was disrupted by civil unrest.
GOOGLE yesterday completed its
$12.5bn (7.9bn) acquisition of
Motorola Mobility after receiving
the green light from the Chinese
authorities.
Long-time Googler Dennis
Woodside was ushered into the top
spot, taking over from Sanjay Jha as
Motorola Mobilitys chief executive.
In a blog post, Google boss Larry
Page said: Many users coming
online today may never use a
desktop machine, and the impact
of that transition will be
profound as will the ability to
BY LAUREN DAVIDSON
just tap and pay with your phone.
Thats why its a great time to be
in the mobile business, and why
Im confident Dennis and the team
at Motorola will be creating the
next generation of mobile devices
that will improve lives for years to
come.
The deal is a central step in
Googles continuing growth in the
smartphone and tablet market.
Googles Android, on which
Samsung and HTC phones run, is
the most popular operating system
according to Kantar Worldpanel
ComTech. The acquisition is
Googles biggest to date.
Google boss Larry Page said its a great time to be in the mobile business
Investors take
$1.6bn stake in
F1 as IPO looms
Google finally takes Motorola
Mobility after China says yes
G
E
T
T
Y
IN BRIEF
SEC looking at JP Morgan accounts
n US regulator the Securities and
Exchange Commission (SEC) will look
into the appropriateness and com-
pleteness of JP Morgan Chases finan-
cial reporting following the banks
recent disclosure of large trading losses,
SEC chairman Mary Schapiro said yester-
day. Earlier this month JP Morgan
announced it had suffered at least $2bn
in losses after trades that the bank says
were intended to hedge risk went awry.
PIRCs slap on wrist for Deutsche
n Deutsche Bank has received a
reprimand from shareholder group PIRC
over its succession planning.
The group also warns that the bank
could see the vote against its pay
packages increase from the 42 per cent
seen at last years annual general
meeting because shareholders
concerns over the remuneration system
have not been adequately addressed.
Renminbi marketing blitz planned
n The UK, China and banks with big
operations in both countries are plan-
ning a marketing blitz to encourage
firms to take advantage of new freedom
to settle trades in renminbi, Beijings
currency. At a meeting of the London
Forum, which includes government rep-
resentatives and envoys from HSBC,
Barclays and Standard Chartered among
others, discussion focused on how busi-
nesses could be encouraged to make
use of extended trading hours and how
banks could improve infrastructure such
as indices and boost liquidity by getting
brokers to offer more renminbi products.
Accor offloads $1.9bn hotels arm
n Accor is to sell its troubled US budget
hotel business for $1.9bn (1.2bn) to pri-
vate equity group Blackstone, in an
expected move by the French hotel
group to focus on growth outside the
US. Accor will take a one-time non-cash
hit of 600m linked to the early buyout
of fixed-lease hotels as part of the deal.
11
NEWS
Pick up
and
set up
in store
Call
08080 99 00 00
today and ask about next day
phone delivery
Search online for
Vodafone press
HTC One S
Stylish & smart HTCs thinnest
phone ever
HTC One X
Multitaskings a breeze with fast
1.5 GHz quad core processor
SIM Only
Including mobile internet 31 a month
on a 24-month plan
NowFREEfrom Was 36
36 a month
on a 24-month plan
Was 41 NowFREEfrom From
10 a month
on a 12-month plan
.50
MORNING UPDATE
Sign up to
our 10:30am
newsletter at
cityam.com
EUROPEAN software company SAP
AG plans to buy US software
maker Ariba in a deal valuing the
company at $4.3bn in a bid to
compete more aggressively against
rival Oracle in the fast-growing
cloud computing market.
SAP and Ariba, a darling of the
first dotcom boom that has since
reinvented itself as a major
networking and online
commerce software developer,
have agreed to the acquisition at
$45 a share, representing a 20 per
cent premium.
The purchase of Ariba, based in
Sunnyvale, California, would be
the latest in a string of
acquisitions by Germanys SAP to
help fuel its revenue growth and
keep up with rivals.
SAPs deal values Ariba at 6.9
times expected 2013 revenue,
according to Roth Capital
Partners.
SAP taps software rival Ariba in $4.3bn deal
BY CITY A.M. REPORTER
One in ten investors
reject Shell pay deal
Shell chief executive Peter Voser
OIL giant Royal Dutch Shell yester-
day suffered an embarrassing
investor rebellion when 9.1 per
cent of its shareholders voted
against its executive pay deal, up
from two per cent a year before.
Chief executive Peter Voser
earned 11.7m (9.5m) for 2011,
double what he took home for the
previous year, despite little
improvement in the companys
share price.
Shareholder group Pensions and
Investment Research Consultants
(PIRC) said the pay deal is exces-
sive and had urged investors to
vote against the remuneration
report.
Although the company pegs its
salaries against its international
competitors, salary levels, which
have been frozen since 2009, are
still at the high end of its UK listed
peer group, PIRC said.
Campaigners also highlighted
the fact that Voser is set to receive
awards worth 526 per cent of his
base salary.
Leading companies have seen
rebellions against pay deals during
the shareholder spring, with
insurance giant Aviva losing chief
executive Andrew Moss after a
majority of investors voted against
the firms pay deal.
Shell also announced that it had
beaten forecasts with an 11 per
cent rise in fourth-quarter profit,
as higher oil prices outweighed the
impact of lower US gas prices.
BY JAMES WATERSON
IN BRIEF
ONE of the UKs top law firms is in
preliminary talks with a US peer
over a tie-up that would create a
900m business, it emerged
yesterday.
According to The Lawyer, City firm
SJ Berwin has held exploratory
merger talks with Mayer Brown a
Chicago-based firm that has a
significant London presence.
The news comes just a week after
Mayer Brown elected a new
chairman to replace Herbert
Krueger, who will step down at the
end of this month. Paul Theiss, a
corporate partner at the firm, will
take over on 1 June.
In March, incoming SJ Berwin
senior partner Stephen Kon told City
A.M. his key focus over his three-year
term would be integrating the
firms international practices.
The firm, which employs more
than 500 lawyers in London, has
recently been on the hunt for a
potential merger, and last year
managing partner Rob Day said a US
tie-up would be the preferred choice.
SJ Berwin has offices across
Europe and Asia, but does not
currently have a US presence.
According to The Lawyer, it had
revenues of 179m in the 2010-11
year, while Mayer Brown turned over
$1.13bn (715m) in the year to
February 2012.
Both firms declined to comment.
SJ Berwin and
Mayer Brown
in merger talks
BY ELIZABETH FOURNIER
WEDNESDAY 23 MAY 2012
cityam.com
12
NEWS
G
E
T
T
Y
VODAFONE yesterday became the
UKs highest dividend payer after
hiking its shareholder payout for the
year by 52 per cent to 13.52p.
Announcing its full year results,
the telco giant said it paid out a total
of 10.2bn to shareholders in fiscal
2011, including 3.6bn in a share
buyback and 2bn from the reapings
of its 45 per cent stake in Verizon.
Vodafone will need to rely on a con-
tinuing strong performance from
Verizon, which accounts for 40 per
cent of revenue, amid waning
income from its European opera-
tions.
While full year revenue grew by 1.2
per cent to 46.4bn, it was dragged
down by poor trading in Europe,
including fourth quarter declines in
Italy and Spain of four per cent and
9.5 per cent respectively.
This was offset by growth in emerg-
ing markets. Egypt revenue was up
7.2 per cent, while India grew by 21
per cent.
Vodafones presence in India has
been clouded by an ongoing spat
Vodafone is top
dividend payer
in the FTSE 100
BY LAUREN DAVIDSON with the government over tax and
regulatory issues. Vodafone chief
executive Vittorio Colao conceded
the company is currently between a
rock and a hard place in India, but
added: We are a pretty hard rock
ourself.
He added that the continuing cuts
to mobile terminations rates in
Europe are hurting the industry.
Vodafone, which suffered an 11 per
cent profit drop to 7bn, cut its rev-
enue projections for the year ahead.
But Colao remained upbeat about
the companys growth strategy. He
said, My ambition is for Vodafone to
be the Amazon of telcos.
Vittorio Colao said he wants Vodafone to be the Amazon of telecoms companies
Vodafone Group PLC
17May 16May 18May 21 May 22May
172
174
170
168
166
p
172.00
22May
Overall, todays results were reassuring. Although the reduced guidance
on revenue for next full year is a little disappointing, we are comforted by the
expectation for stability in free cash ow, given that is the driver of the
seven per cent dividend growth target.
ANALYST VIEWS

The outlook commentary is cautious. The company highlighted ongoing

competition alongside weak consumer demand and harsh regulation as mate-
rial barriers to growth. But its expectation that the ebitda margin will sta-
bilise by March 2014 suggests it is condent of containing commercial costs.

The outlook is slightly disappointing, with downgrades mostly due to

adverse exchange rate movements and tough conditions in Europe. However, in
a sector context, the fact that Vodafone has reiterated a growing divi-
dend should provide reassurance.

DOES VODAFONES
DOWNGRADED OUTLOOK
DAMPEN ITS RESULTS? Interviews by Lauren Davidson
JONATHAN JACKSON KILLIK & CO

JERRY DELLIS JEFFERIES

WILL DRAPER ESPIRITO SANTO

R
E
U
T
E
R
S
Homeserve PLC
17May 16May 18May 21 May 22May
220
200
180
160
p
160.09
22May
BATS Europe is in talks with
exchange rivals over a clearing deal
that will allow the share trading
platform to break into European
futures and challenge incumbents
NYSE Euronext and Deutsche Boerse.
BATS Europe, which handles
about a quarter of European share
trading, has approached the main
exchanges about recruiting their
clearing houses to back its push into
futures, something it plans to do this
year.
We have been talking with the
various European clearing houses for
a while now and we now know
BATS in talks over deal to break
into European futures market
BY HARRY BANKS where the various clearing providers
are, said BATS Europe chief
executive Mark Hemsley.
The main European derivatives
clearers are LCH.Clearnet, which is
set to be bought by the London Stock
Exchange, Deutsche Boerses Eurex
Clearing, CME Clearing Europe, part
of the CME Group and ICE Clear
Europe, from the
IntercontinentalExchange.
BATS Europe, part of BATS Global
Markets, does not operate its own
clearing house unlike most of its
rivals, and, therefore, needs to
partner with another exchange to
help it launch European futures
trading.
INTERMEDIATE Capital was the
biggest riser on the FTSE 350 index
yesterday after it posted a five per
cent jump in profit.
The firm, which specialises in
providing mezzanine financing,
posted fund management company
profit before tax of 37.7m. Group
profit before tax for the year to 31
March rose 31 per cent to 243.8m
despite a year dominated by the
European sovereign debt crisis.
Third party mezzanine assets
under management were up seven
per cent at 3.7bn (2.99m).
Profits soar at
investor ICG
BY PETER EDWARDS
THE OFFICE of Fair Trading (OFT) has
written to short-term money lender
Wonga to warn it against
aggressivedebt collection practices.
The OFT said letters and emails
sent from Wonga to customers
suggesting they had committed
fraud were without appropriate
justification, and that if similar
letters were sent again the lender
would face a fine.
Wonga said it would appeal the
decision.
The OFT launched an investigation
into payday loans earlier this year.
Wonga hit by
OFT warning
BY CITY A.M. REPORTER
WEDNESDAY 23 MAY 2012
13
NEWS
cityam.com
BATS Europe chief executive Mark Hemsley is hoping to expand into European futures
AROUND 200m was wiped from the
value of repairs group Homeserve yes-
terday after it said the City regulator
had launched a probe into mis-selling
claims.
The stock closed down by nearly a
third after it confirmed the Financial
Services Authority would investigate
certain historic issues.
The inquiry, which Homeserve said
would take a number of months,
comes after the home maintenance
and insurance provider suspended its
UK telesales and put staff on a retrain-
ing programme.
The identification of the regulatory
issues in our UK business in October
2011 has made this the most challeng-
ing year in Homeserves history, said
chairman Barry Gibson.
The reforms are extensive but are
taking longer and costing more than
originally planned, he added.
The firm, which has now started to
phase back in its UK sales and market-
ing activity, posted an eight per cent
rise adjusted pre-tax profit to 126m
as revenue leapt 14 per cent to
534.7m for the year to 31 March.
Shares plunge
at Homeserve
on FSA probe
BY PETER EDWARDS
It wants to shrink its UK business,
however, from 2.7m customers to
between 2.2m and 2.4m. It hopes to
limit the turnover of customers and
focus on higher value policies on core
products instead of discounted offers.
In the UK we are planning to create
a smaller, more focused and sustain-
able business from which to grow,
said chief executive Richard Harpin.
The number of international cus-
tomers jumped 14 per cent to 2.2m.
The group also said it would cut 250
jobs, however, on top of the 200
announced in February.
Shares closed down 29 per cent at
160.9p.
IN BRIEF
Kcom posts jump in profits
Telecoms provider Kcom Groups
full-year pre-tax profit rose 55 per
cent, helped by an increase in sales at
its KC business and a reduction in
operating costs. Kcom, which provides
communications services for
enterprise and public sector
organisations across the UK said pre-
tax profit for the year ended 31 March
rose to 51.1m from 32.9m. Revenue
fell two per cent to 387.3m, reflecting
a 2.7 per cent decline in the
company's Kcom segment. Kcom
increased the full-year dividend to 4p
from last year's 3.6p.
Destocking hits Victrex
High-tech plastics firm Victrex
reported a fall in its half-year profit as
destocking by customers in the first
quarter hurt sales. Victrex, whose key
polymer product is used in aircraft
components, car parts and surgical
instruments, also hiked its interim
dividend by 13 per cent to 9p per
share. For the first half, Victrex said
pre-tax profit fell four per cent to
46.2m. Revenue dropped two per
cent to 105.6m.
Anglo and Codelco restart talks
Anglo American and Chilean
copper giant Codelco have agreed to
talks in an effort to end a damaging
months-long row over the global
miner's assets the country's south.
Anglo said the miners, who had been
due to appear before a Santiago court
today as part of conciliation
proceedings, had instead asked for a
month-long suspension of the court
battle.
COMPUTER manufacturer Dell last
night forecast disappointing second-
quarter revenue as US and
European corporate tech-spending
weakens and consumer personal
computer sales continue to shrink.
Its shares dived more than nine
per cent in after hours trading.
Dell, like rival Hewlett-Packard, is
losing market share to mobile
devices such as Apples iPad as con-
sumers choose to buy tablets rather
than laptops.
The worlds third biggest PC
maker forecast revenue growth of
between two and four per cent in
the next fiscal quarter equivalent
to income of $14.7bn and $15bn
(9.3bn and 9.5bn) well short of
Wall Streets expectations.
Clearly we are seeing a bit more
challenging demand environment,
Dells chief financial officer Brian
Gladden said. Europe, in general,
was down for us.
But he added demand from US fed-
eral businesses appears to be
improving slightly: We are seeing a
pretty good pipeline there.
Dell shares dive
as it struggles
to grow income
BY HARRY BANKS
Dells quarterly revenue fell more
than analysts had expected and sales
to consumers took a big hit, with
consumer revenue slipping 12 per
cent to $3bn. Sales to large corpora-
tions fell three per cent to $4.4bn.
The firm revenue in its fiscal first
quarter declined four per cent to
$14.4bn. Net income fell to $635m
from $945m a year earlier.
The firm is attempting to reinvent
itself as service provider, with 50 per
cent of its gross margin coming
from its enterprise and services busi-
ness.
Dells shares traded at $13.50 after
hours, down from yesterdays $15.08
close on Nasdaq.
FASHION brand Ralph Lauren said yesterday it expects lower wholesale sales this fiscal
year, hurt by a slowdown in Europe and the closure of some China wholesale operations
it will eventually replace with its own stores. Ralph Lauren said revenue rose 13.7 per
cent to $1.62bn, while net income was $94.4m compared with $73.2m a year earlier.
RALPH LAUREN GIVES DOWNBEAT SALES OUTLOOK
Dell Inc
18May 17May 16May 21 May 22May
14.8
15.0
15.2
15.4
15.6 $
15.08
22May
Slideshow Gallery Map Trip details
Wipe the tingling spray from your face and follow Ontarios very own
Wine Route with 70 wineries. White or Red?
Related links
http://www.inniskillin.com
http://winecountryontario.ca
Find us on Facebook
www.facebook.com/
keepexploring
www.youtube.com/
keepexploring
www.twitter.com/
keep_exploring
Check-ins
EAT
2:15 PM
Inniskillin Winery
Niagara-on-the-Lake,
Ontario
READ REVIEW

DRINK
8:20 PM
Niagara Wine Route
Niagara-on-the-Lake,
Ontario
READ REVIEW

7 nights Ontario Taster self-drive holiday
with Discover the World
From

499
*
Per
person
www.ontariotravel.net/visitnow
*Price is per person, package includes 7 nights superior accommodation, double room only based on 2 people sharing, 8 days car hire (intermediate), admission to CN Tower, Niagara Falls Great Gorge Adventure Passport,
exclusive travel documentation including personalised maps, driving directions and itinerary. Flights are not included. Prices may vary, according to travel dates and are subject to availability. Promotion ends 15 October 2012.
Spectacular nature combined
with vibrant cities makes
Ontario one of Canadas most
diverse destinations.
Discover awe-inspiring scenery
in Niagara Falls and endless
city pursuits in Toronto.
Iconic architecture, fascinating
museums, enticing restaurants
and brimming night life, plus
shops galore will make this a
fantastic holiday.
Niagara Falls. At refreshing prices.
August 2 16, 2011
See
notes
WEDNESDAY 23 MAY 2012
14
NEWS
cityam.com
C
ITY investment management firm
Brewin Dolphins garden at the
Chelsea Flower Show has won a
gold medal for being the
best in the show, which is great
news for those participating in
the firms online charity
auction.
The auction, which will raise
funds to help the fight against
leukaemia, includes a prize
that gives the winner a private
garden consultation with
Brewin Dolphins Chelsea
Flower Show designer, Cleve
West. His winning design has
been described as formal and
timeless, contemporary yet tradi-
tional.
Theres also a training day with
the Olympic athlete Sonia
OSullivan for avid athletes.
The auction is part of a push by
Brewin Dolphin that involves sponsor-
ing fifteen riders cycling from London
to Paris in three days to raise more than
120,000.
The riders will be led by Geoff
Thomas, an ex-Crystal Palace and
England player who was diag-
nosed with chronic myeloid
leukaemia in 2003 and has now
dedicated his life to raising
money for the treatments.
The project raises funds to help
give patients access to new treat-
ments of leukaemia and lymphoma
and improve their chances of sur-
vival.
The auction, accessed online at
brewin.co.uk/auction, will be open
until 6.45pm on 13 June.
Cleve said he was delighted to be
part of Brewin Dolphins 250th
anniversary.
Brewins top of the
league at Chelsea
Winning garden designer
Cleve West
Got A Story? Email
thecapitalist@cityam.com
15
cityam.com
cityam.com/the-capitalist
THECAPITALIST
WEDNESDAY 23 MAY 2012
Receive 200 trading credit when
you open a NEW spread betting or
CFD trading account.
*Deposit 1000 and place 3 trades at 3 per point or more to
claim your 200 trading credit. Terms and Conditions apply.
TRADING CREDIT
*
www.cityindex.co.uk/200
WANTED
Your support to celebrate
100 years of a Royal charity
Join us for the biggest street
collection in the City of London
Help us provide opportunities for young London
R
O
S
E
D
A
Y
T
h
u
rsd
a
y
2
1
st Ju
n
e
www.alexandrarosecharities.org.uk
TEAM UP SIGN UP JOIN US
To volunteer and field
a team email:
arc2012@alexandrarose.org.uk
Alexandra Rose Youth Project
@ARC1912
AFTER weeks of
intense interest, Holly
Brook from Pitch PR has
been named as the female
champion for this years
Aviva Trophy Lift Challenge.
Ms Brook managed to
hold up the trophy for an
impressive one minute and
seven seconds to declared
the winner.
The male champion was
Simon Smith of ICAP, who
held the trophy up for two
minutes and 31 seconds.
The Aviva Premership
Trophy has visited many
London offices during the
last few weeks, testing the
strength of both male and
female employees.
Competitors pitched
themselves not just against
each other but against
some unnamed Premership
rugby players.
The two winners will be
sharing a box at the Aviva
Premiership Final at
Twickenham on Saturday,
where they will receive full
VIP hospitality.
Holly Brook holds the trophy aloft
IN BRIEF
Digital boost not enough at Future
Media agency Future said yesterday
its digital revenues climbed 37 per cent
in the six months to the end of March,
but the boost wasnt enough to offset a
33 per cent fall in profits. Operating
profits fell to 1.2m, while revenues were
down 11 per cent on a statutory basis at
61.1m and four per cent lower on a
normalised basis at 59.1m.
Bramhill quits Wessex Exploration
David Bramhill resigned yesterday as
chairman of Aim-listed Wessex
Exploration. Bramhill led the Bristol-
based groups IPO in March last year.
Shares in the company fell three per
cent after the announcement, which
comes a month after French major Total
decided not to pursue a takeover bid
for the company.
WEDNESDAY 23 MAY 2012
16
NEWS
cityam.com
FREE landline number
for 12 months
With Vodafone One Net Express
and the new HTC One X
Business
Terms apply. Subject to credit check. Lines open Mon-Fri 8am-8pm,
Sat 9am-5pm. Calls from landlines are free. Standard network charges
apply to calls made froma mobile phone.
Quad core processor for
better power management
and prolonged battery life
HTC One X Free

Get this offer on the Vodafone Business Single Plan
600 mins Mins to UK mobiles or landlines (starting 01, 02, 03)
Standard UK texts 250 texts
3000 mins Mins to other Vodafone UK mobiles
UK mobile internet & email usage on your phone 500MB
BT Openzone Wi-Fi 2GB
30
a month
24-month contract. 30 a month for the first
12 months and 40 a month thereafter.
Prices exclude VAT
Call
Visit your local store today,
search 'Vodafone Store'
08080 101 204
The new
jobs website
for London
professionals
C
I
T
Y
A
M
C
A
R
E
E
R
S
.
c
o
m
Buzz in the UK measured on
BrandIndex has shown considerable
uplift for Facebook since the start of
this month as news of the IPO
created a positive vibe around the
brand. Buzz increased from -8 on 2
May to +6 on Monday. This 10 point
increase has meant that for the first
time in nearly six months, Facebook
is on an even keel with its social
media rival Twitter.
So some bright news for Facebook
amidst the gloom of the
interminable share price falls this
week.
It will be interesting to see if the
increases seen on Buzz can
continue for the social media giant
post-IPO and the stock price slide it
has seen since then. What also
remains to be seen is how the
recent stock launch will impact on
other key brand health measures
for Facebook, such as value and
satisfaction.
Stephan Shakespeare is chief executive of
YouGov
BRAND
INDEX
STEPHAN SHAKESPEARE
Facebook brand image survives embarrassing float
F
ACEBOOK, the worlds largest
social networking site, has
made headlines with its IPO,
which has since turned sour.
Earlier this month, founder Mark
Zuckerberg announced that he
would be leading a roadshow for
Facebook in order to arouse
interest on its soon-to-be available
shares.
On 18 May, the day of the IPO
launch, Facebook began trading
with a share price of $38 each.
That valued the firm at $104bn
(66bn), meaning the value of
Facebook was greater than that of
Disney, McDonalds and Kraft. This
was not only the largest debut ever
achieved by an internet company,
but it was also the third largest US
IPO in history.
Buzz
21 May 19 May 17 May 15 May 13 May 11 May 9 May 7 May 5 May 3 May 1 May
8
6
4
2
0
-2
-6
-4
-10
-8
FacebookBuzz
TwitterBuzz
This week we want to know what our Voice
of the City panel thinks of the Beecroft
report on employment, which has
proposed measures including scrapping
existing unfair dismissal rules and replacing
VOICE OF THE CITY
PoliticsHome.com PoliticsHome.com In association with
Apply to join today at WWW.CITYAM.COM/PANEL
them with compensated no-fault dismissal.
To have your say, apply to join the panel at
cityam.com/panel.
BRITISH companies are sitting on
a 64bn cash pot built up by
delaying payments to suppliers, a
new study claims.
Research by Deloitte found that,
on average, suppliers were paid
four days later in 2011 than they
were two years earlier in order to
help companies amass funding for
their daily cash flow.
This has lead to short-term
improvements for UK firms but in
the long term can lead to
deteriorating relations with
suppliers as they look to recoup
losses by either reducing service
or increasing prices, Deloitte
warned.
Although working capital can
be one of the cheapest and most
accessible forms of funding
available to a businesses, the
report said that if companies
stopped accumulating this cash,
they could instead fund business
growth or help overcome
temporary market downturns.
As the UK economy has
technically entered a recession,
cash and its effective use will
continue to remain high on the
corporate agenda, said Andrew
Harris, partner in Deloittes
advisory development group.
The study drew on responses
from UK-listed companies with
annual sales greater than 60m.
Deloitte: firms
are hoarding
64bn cash pile
BY ANAAM RAZA
G
E
T
T
Y
THE CHAIR of the FSA, Lord Turner,
has assured MPs that if the watch-
dog finds widespread evidence
that banks have been mis-selling
financial products to small firms,
we will take action.
His warning came as the Treasury
Select Committee kicked off an
inquiry into corporate governance,
particularly in banks.
At a hearing yesterday, Lib Dem
John Thurso MP unleashed a
diatribe blaming bank chief
executives for an immoral
practice of mis-selling interest
rate swaps.
Thurso said he believes it
stems from the decision
at the top to go for an
unrealistic return
on equity for provid-
ing what should be
a basic utility for
business to grow,
calling it a despi-
cable culture.
However, the
FSA and Financial
Ombudsman said
Turner vows to
act if FSA finds
new mis-selling
BY JULIET SAMUEL
there is as yet no clear evidence of
how widespread the practice is.
Sir David Walker, senior adviser to
Morgan Stanley, told Thurso in
response: I basically agree with
you. The FSA is currently conduct-
ing an investigation into practices
surrounding the sale of financial
products to small businesses, some
of which have ended up costing
small firms hundreds of thousands.
MPs are also looking at diversity
on boards. Andrea Leadsom, a Tory
MP, claimed male bank bosses are
more aggressive than women,
saying that female executives
display a more mea culpa atti-
tude when things go wrong.
By contrast, she claimed the
male bank executives attitude
was not our fault, dont
blame us, just keep paying
us.
The Financial Reporting
Councils Peter Montagnon
called her summary dan-
gerous stereotyping.
Adair Turner reassured MPs
over banks mis-selling
HIGH levels of American home
sales were recorded in April,
boosting hopes for the US
recovery, as a leading member of
the Federal Reserve said that
conditions are not ripe for more
quantitative easing.
Sales of already-owned homes
shot up by 3.4 per cent to an
annual rate of 4.62m units last
month, the highest since May
2010, according to the National
Association of Realtors.
Across the US, the median
average price for a re-sold home
jumped to $177,400 in April, up
US home sales on the rise as Fed
official says QE3 is not required
BY CITY A.M. REPORTER 10.1 per cent from a year earlier
the biggest annual increase since
January 2006.
Yet prices rose in large part
because a drop in foreclosures led
to fewer distressed sales, said NAR
economist Lawrence Yun.
Nonetheless the housing data
was surprisingly bullish, and
separately senior official Dennis
Lockhart said that the Fed should
make it clear that the economic
climate does not warrant further
bond buying.
QE3 will work under the right
circumstances, Lockhart said.
But I dont believe such
circumstances prevail at his time.
WEDNESDAY 23 MAY 2012
17
NEWS
cityam.com
Dennis Lockhart said that the time is not right for more quantitative easing, dubbed QE3
STORAGE giant Big Yellow
yesterday reported annual losses of
35.6m triggered by writedowns
linked to an impending tax rise.
The government is planning to
slap VAT on self storage payments,
which means that storage costs
could shoot up as much as ten per
cent.
The companys losses in the year
to the end of March compare with
a 6.9m profit for the previous
year.
Big Yellow has been forced into a
51.4m writedown on its property
portfolio as a result of the tax raid,
announced in the Budget and due
to be introduced in October
But revenue for the year rose
slightly to 65.7m compared with
61.9m in 2011.
The company is building three
major new storage depots at a cost
of 14.3m, it said in its trading
statement, and is looking for new
sites.
Chairman Nicholas Vetch said
that despite the tax setback the
company was strong.
He said in a statement: The Big
Yellow Self Storage business model
has proved to be relatively resilient
during the downturn, in line with
the experience in the more
established US self storage market.
Big Yellow raised its dividend by
1p to 10p.
Big Yellow hit
by tax raid on
storage space
BY JOHN DUNNE
SHARES in Bloomsbury jumped 6.6
per cent yesterday as the British
publisher said its pre-tax profits
from continuing operations more
than doubled last year.
Continuing pre-tax profits were
up 53 per cent to 12.1m, while
total turnover grew 11.5 per cent to
103.2m.
Bloomsbury pointed to its huge
ebook growth as a source of the
income boost. Digital sales
increased by 159 per cent to 5.7m,
from 2.2m the year before.
Chief executive Nigel Newton
said: There is a fundamental shift
happening from print to digital
and from the high street to the
internet.
The decision to digitise our back-
list several years ago continues to
reap benefits.
The group, famous for publishing
the Harry Potter series, made
2.6m (2.09m) from the sale of its
loss-making German subsidiary
and called 2011 a transformation-
al year.
Its 19.2m acquisition of publish-
Profits double
as Bloomsbury
turns to ebooks
BY LAUREN DAVIDSON
er Continuum during the year
boosted its academic and profes-
sional publishing division, which
generated 17.5m during the year,
an increase of 22 per cent.
Bloomsburys academic and pro-
fessional arm accounts for 24 per
cent of continuing group sales.
Newton said: At a time when the
traditional books industry is under-
going a revolution, we have built a
robust and balanced business with
more predictable income streams.
Bloomsbury said it has a strong
trade list for the year ahead, includ-
ing a new book from Hugh
Fearnley-Whittingstall and Howard
Jacobsons latest offering, Zoo Time.
Bloomsbury Publishing PLC
16May 17May 18May 21 May 22May
116
114
112
110
108
106
p
113.50
22May
BRITAIN has seen unprecedented
interest in developing North Sea
oil and gas fields, with companies
applying for a record 224 licences
covering 418 blocks in its latest
exploration round, the
government said this morning.
Britains 27th licensing round
was launched in February and
breaks the record for
applications set in the previous
round by 37.
There remains an
extraordinary level of interest in
North Sea oil and gas, and it is
tremendous news for industry
North Sea oil attracts a record
number of licence applicants
BY HARRY BANKS and for the UK economy," energy
minister Charles Hendry said.
Britains oil and gas output
passed its peak in 1999, but the
government estimates there
could still be over 20bn barrels of
oil equivalent (boe) in UK waters,
and hopes the latest licensing
round will help get it out.
Enthusiasm for North Sea oil
has been lifted by a 3bn new
field allowance introduced in the
latest Budget in March, which
aimed to make up for shock tax
hikes last year, which nearly
doubled some exploration profit
levies to pay for a tax cut for
motorists.
WEDNESDAY 23 MAY 2012
18
NEWS
cityam.com
0
%
REPRESENTATIVE
APR
Credit subject to acceptance. Credit is provided by external nance companies as determined by DFS.
4 years interest free credit from date of order. Delivery charges apply. After event prices apply from
02.07.12 - see instore or online for details. Mobile charges may apply when calling 0800 110 5000. DFS
is a division of DFS Trading Ltd. Registered in England and Wales No 01735950. Redhouse Interchange,
Doncaster, DN6 7NA.
Visit your nearest store, order direct at www.dfs.co.uk or
call free on 0800 110 5000 24 hours a day, 7 days a week
4 years interest free credit
on everything
Or pay nothing until January 2013 then take 3 years
interest free credit
50%
OFF
MODA COLLECTION
SOFAS
CARNIVAL
4 SEATER LOUNGER
HALF PRICE
598
AFTER EVENT PRICE
1198
half the price, all the comfort
N
e
w

T
o
t
t
e
n
h
a
m

C
o
u
r
t

R
o
a
d

s
t
o
r
e

o
p
e
n
s

S
A
T
U
R
D
A
Y

9
A
M
Energy explorers have flocked to a recent licencing round in the North Sea
IN BRIEF
Greencore earnings on the rise
Anglo-Irish convenience food
company Greencore yesterday
reported climbing revenue and profits.
The company, which is making special
Jubilee themed sandwiches to be
stocked in Sainsburys and Waitrose,
said first-half revenue soared 49.9 per
cent to 567.7m. Operating profits
were up 36.7 per cent to 31.7m for
the six months to the end of March.
The company has been boosted by
acquisitions including its purchase of
M&S supplier Uniq.
UK Mail delivers strong revenues
Logistics and parcel delivery firm
UK Mail yesterday said its revenue
jumped 8.4 per cent to 429m in the
year to the end of March. The group
said its figures were helped by a rise in
parcel prices, which were introduced
in May last year. But profits before tax
and exceptional items fell from 16.1m
to 15.1m, partly due to the loss of one
working day. It held its dividend at
18.2p per share. Chief executive Guy
Buswell said: We have made progress
in developing our business, investing
in our highly efficient network, and
driving down cost.
Sechin takes the helm at Rosneft
Russian Prime Minister Dmitry
Medvedev yesterday appointed Igor
Sechin as chief executive of state-con-
trolled Rosneft, putting the man who
ran energy policy in the last govern-
ment in charge of Russias largest oil
company. Sechin recently mastermind-
ed three offshore deals with western oil
majors. He pledged to boost Rosnefts
production in taking the post.
G
E
T
T
Y
COMMODITIES giant Glencore yester-
day announced that it had taken con-
trol of the Mutanda copper operation
in Congo for $480m (304.4m).
Glencore had a stake in the compa-
ny but is now in the driving seat.
The move marks the first step in a
planned merger of the mine with its
nearby Kansuki concession.
Mutanda, in central Africas copper
belt, is one of Glencores main growth
assets and a key operation in the
Democratic Republic of Congo along-
side its Katanga operation, largely
thanks to its high ore grades and low
expansion costs.
The company said it had paid
$340m in cash to acquire both a fur-
ther 24.49 per cent in Samref
Overseas, the top holding company
above Mutanda, taking its hold in the
controlling entity to almost 75 per
cent, and a further one per cent in
Samref Congo, a second holding com-
pany.
Glencore, hoping to accelerate devel-
opment of the copper operations with
yesterdays move, has also acquired
Glencore takes
over Congolese
copper mine
BY JOHN DUNNE
shareholder debts amounting to
around $140m.
The deals take its indirect equity
interest in Mutanda Mining to 60 per
cent.
Meanwhile miner Xstrata, which is
the subject a bid by Glencore, raised its
copper production target.
The FTSE 100 company said sluggish
copper demand in China will pick up
in the second half as it makes plans to
boost production of the metal by 60
per cent.
Charlie Sartain, Xstratas copper divi-
sion head, added that demand in
Europe remains flat, but America is
starting to show signs of returning
appetite.
Glencore International PLC
16May 17May 18May 21 May 22May
370
365
360
355
350
345
p
361.60
22May
DEFENCE technology group
Cobham yesterday extended the
deadline for shareholders in
Thrane and Thrane to decide
whether to accept its 275m
offer for their firm.
Thrane, a Danish satellite
communications company, will
have until 18 June to decide on
the bid.
The delay was triggered by the
amount of paperwork associated
with the deal, the firm said.
Cobham has already secured 90
per cent of the issued share capi-
tal in Thrane.
Cobham extends deadline for
Thrane as paperwork piles up
BY JOHN DUNNE FTSE 250-listed Cobham has
offered 435 Danish crowns
(47.54) in cash for each Thrane
share, an increase of 15 crowns
per share over its initial offer.
Cobham returned with a
renewed bid after a board shake-
up at Thrane which made it more
likely to accept.
Cobham said its offer
represented a premium of 48 per
cent to the closing price of
Thrane shares on 24 February,
the last trading day before
Thrane said it had received a
takeover bid.
Thranes rejigged board
recommended the deal on 3 May.
Cobham has given Thrane shareholders another four weeks to decide on its bid
WEDNESDAY 23 MAY 2012
19
NEWS
cityam.com


what will you be doing for the period of the olympic games?

please quote ref: city am to receive a 5% DISCOUNT

on day or 17 day membership

wha

ou be doing for y will t wha

the period of ou be doing for

the ol the period of

ympic games? the ol

ympic games?

n t i
i t a e r t e e r h t

h f t t o r a e e h h n t
y r e w e r e b h s t i

e t u n i 5 m
h d t i o v a
c c a i p m y l o s
d n o f l y o t i e c h
e m v i s u l c x s e y

t c e a h s t s i o m t t o n
at t . s t l s o o p r e v i m l o r s f
n & b o i t s e g n o , c s d w o r e c h
s n e e r c g s i n b n o o i t c
n o d
b u l c s r e b m e

n o i
e r u e s o b n t o i at
f l se r u o se y a n & b

c i tr s e r n u s
i en v e e v i l s
g u e l r u c e s s
u l t c h g i n s
c c i r o t s i h s
v i t c a r e t n i s
s t a e r x a i s s
d f e t i m i l n u s
c c a i p m y l o

e r e th t u o h g u o r th i f - i w d te c
t en m n i a t r e t en g n i
l e s r u o e y s a e b g a r o t e s g a g g
d d n c a i s u h m t i . w m . l 2 a i t n b u
r d a e r o s n o p h s t i d w r a y t r u o c c
ies t i v i t c a d n a ces n ie r e p x e e v
r e v o c s i o d s t
s k n i r d d n d a o o e f n i d f
s n e e r c g s i n b n o o i t c

t ea tr e
t a e r t e e r h t t f a l
g n i c n a d d
s a e r
ies

u t
r g p u

h to t n t i f e n l r
2 e 1 0 r 2 u o e y d a r

t a e r t e e r h
e c n e i r e p x 2 e

e q
e m
r . www
r i o f
s a e l p

r
ava p i h s r e b m e
7 d d 1 n y a a d
e h t . www | k u . o c . y t i c - t a e r t e r
. s t e k c i t e e t s w a o k n o o b
: 0 p i h s r e b m e n & m o i t a m r o f n r i
e b m e y m a 7 d r 1 y o a n d o
e a v i e c e o r m t y a t i : c f e e r t o u e q

p
e l b a l i
y a 7 d
k u . o c . y r e w e r b e
m o c
8 4 4 3 1 4 5 1 4 8 : 0
i h s r
T N U O C S I D 5% e a
WEDNESDAY 23 MAY 2012
20
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
A
MERICAN stocks closed mostly
flat yesterday after volatilility
late in the session, with
weakness in materials and
energy shares offsetting strength in
financials.
Shares traded higher for much of the
session following unexpectedly strong
figures on existing home sales, which
lifted banks. But those gains dissipated
in the last half hour of trading.
Facebookshares extended their slide
and pressured the tech sector, giving
investors few reasons to buy.
Bank of America was up 2.2 per cent
while Best Buy rose 1.6 per cent.
The Dow Jones industrial average
dipped 0.01 per cent, to 12,502.81 at
the close. But the Standard & Poors
500 Index was up 0.05 per cent, to
1,316.63. The Nasdaq Composite Index
declined 0.29 per cent, to close at
2,839.08.
Dominos Pizza UK & IRL PLC
p
480
470
460
450
440
16May 17May 18May 21May 22May
460.00
22 May
DOMINOS PIZZA
Liberum Capital has upgraded the pizza delivery company from sell to
hold with a target price of 414p, and raises its full-year earnings per
share by five per cent. The broker says Dominos should benefit from the
recent bad weather, and expects a strong trading update on 23 July.
DASHBOARD CITY
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
in association with
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
GLOBAL BUSINESSES
RECRUITING LONDONS
BEST PROFESSIONALS
YOUR FUTURE IS OUR BUSINESS
CITYAMCAREERS.com
WWW.CITYAMCAREERS.COM
OVER
OR SCAN HERE
4000
SALARIES UP TO
JOBS
300K
B
ritains leading share index
jumped yesterday, driven by
gains in mining stocks as the
demand picture for metals was
brightened by hopes of fresh moves by
China to boost its economy.
At the close, the FTSE 100 index was
up 98.80 points or 1.9 per cent at
5,403.28 points, adding strongly to
Mondays 0.7 per cent recovery, which
followed a five-day losing streak.
Miners provided the main support
for the blue chips, with the sector
higher after a state-backed Chinese
newspaper said the country the
worlds top metals consumer would
fast track approvals for infrastructure
investment to boost its economy.
Global miner Xstrata said it is bet-
ting sluggish copper demand in China
will pick up in the second half as it
makes plans to boost production of
the metal by 60 percent. As a result its
shares gained 3.2 per cent.
Banks bounced as well, helped by
hopes that a meeting of European
Union leaders could today promote
new measures to tackle the regions
debt crisis.
RBS added 5.3 per cent, Lloyds was
up 4.5 per cent and Barclays gained 2.9
per cent.
Market heavyweight Vodafone also
lent its considerable strength to the
FTSE 100 index too, up 4.2 per cent as
the mobile phone group posted in-line
full-year results which included a
seven per cent dividend hike.
In a sector context, the fact that
Vodafone has reiterated a growing div-
idend should provide reassurance,
Espirito Santo Investment Bank said in
a note repeating its buy rating.
Among the minority blue chip fall-
ers, defensively-perceived stocks were
weaker as investors risk-appetite
returned, with food retailers among
the worst off, led by WM Morrison,
down 0.9 per cent, and Tesco, off 0.4
per cent.
Luxury goods firm Burberry was
also lower, losing 0.6 per cent ahead of
its full-year results due today.
LONDONREPORT
Miners push
up FTSE 100
NEW YORKREPORT
Wall Street flat
after volatility
INVESTEC
Numis rates the specialist bank and asset manager as a buy with a target price
of 505p, saying the stock is far too cheap despite poor results. The broker has
reduced its pre-tax profit forecasts from 526.8m to 490.3m this year, but says
Investec is well placed to benefit from economic recovery when it comes.
INMARSAT
UBS has a buy rating on the mobile satellite company, and has lowered
its target price from 665p to 545p, saying growth remains weak and it
expects trends to improve only slowly from the second quarter. The broker
is looking to the October Ka-band presentation as a catalyst for the shares.
BESTof theBROKERS
Artesian Solutions
Dr Steve Garnett has been
appointed chairman of the
brand surveillance software
firm. He is currently chairman,
Europe at salesforce.com.
Garnett started his career at
Oracle, prior to its initial public
offering, where he was director
of UK sales and vice president
of European marketing and
alliances. He has also served as vice president, Europe
at Siebel Systems.
Horizon Cash Management
The investment advisory firm has appointed Michael
Markowitz as its chief investment officer. He is currently
executive vice president and partner. Before joining
Horizon he was managing director and head of short
duration fixed income at Guggenheim Partners. He has
also served as managing director at UBS Global Asset
Management.
Harmonic Capital
Per Ivarsson has been appointed as a partner at the
quantitative hedge fund manager. He has worked for
Harmonic since 2007. Ivarsson has previously held
positions at online retailer Ocado, where he developed
optimisation algorithms to increase the efficiency of
customer deliveries in the UK. He is an engineering
physics graduate of the Royal Institute of Technology in
Stockholm.
Bluewater Bio
The water treatment technology firm has appointed Jeff
Garwood and Earl Jones to its advisory board. Garwood
and Jones are both partners of Liberation Capital, the
private equity fund specialising in project finance for
renewable energy and water solutions. They are also
both former employees of GE Water & Process
Technologies.
Ingenious Media
The investor and adviser in the media, entertainment
and digital sectors has announced the recruitment of
two corporate financiers. David Brooks and Toby
Ramsden join from Ibis Capital, the specialist investment
and advisory firm. Brooks will become co-head of
corporate finance. Ramsden has over 10 years of
experience in media corporate finance and has held
positions at Schroders and Longacre.
Simmons & Simmons
Robert Koller has been appointed as a finance partner in
the law firms Frankfurt office. Koller is a debt capital
markets and financial regulatory lawyer and he joins
from Clifford Chances Frankfurt offices. He has
previously practised in both Gibraltar and Madrid, and
has also worked for the Austrian Ministry of Foreign
Affairs.
Hamptons International
The residential agency has appointed Olivia Charsley to
the position of account manager in its corporate and
relocations services department. She was previously a
client services consultant at Hamptons.
Investec PLC
p
340
335
330
325
320
315
310
16May 17May 18May 21May 22May
323.09
22 May
Inmarsat PLC
p
410
405
400
395
390
16May 17May 18May 21May 22May
404.04
22 May
Roger Carr
Centrica
2010 Dealmaker
of the Year
Crispin Odey
Odey Asset
Management
2010 Trader
of the Year
Daniel Ek
Spotify
2011 Entrepreneur
of the Year
Gerald Ronson
Heron Corporation
2011 Personality
of the Year
Angela Ahrendts
Burberry
2010 Company
of the Year
Boris Johnson
Mayor of London
2010 Personality
of the Year
Nominate yourself, a colleague or your company
for City A.M.s third annual Business Awards.
Visit www.cityamawards.com
Deadline for nominations 12 July
Awards night Wednesday 17 October
General enquires: 020 8267 4043 | jo.pead@cityamawards.com
Sponsorship enquires: 020 3201 8940 | harry.owen@cityam.com
Are you one of the Citys
personalities of the year?
in association with
champagne reception sponsor
category sponsors venue sponsor
G
EORGE Osborne and Franois
Hollande want Angela
Merkel to support
Eurobonds. These would pool
debt issuance among
Eurozone governments, allowing
them all to fund their spending at
the same borrowing rate. The more
creditworthy Eurozone governments
would thereby subsidise the
spending of the less creditworthy.
Merkel thinks that subsidising the
spending of profligate governments
is a bad idea. Osborne thinks she is
being illogical. On Sunday he claimed
that the Eurozone needs to follow
the remorseless logic of monetary
union towards greater fiscal integra-
tion and burden sharing.
Logic cannot feel remorse or any
W
E ALL know the moral
arguments for taxation: it
pays for police, roads,
hospitals and other vital
services. But there is a
moral case against taxation too and
a surprisingly strong one.
First, while most of us would happily
make some voluntary contribution to
essential services, it is only the threat
of prison that makes us stump up
taxes at todays eye-watering levels. Tax
is extracted by force and the use of
force is an evil we want to minimise.
That puts an awesome responsibility
on governments to ensure that every
penny they extract through coercion is
spent wisely. Waste and bureaucracy
are not just a drain on the economy
they are a moral outrage.
But not only is taxation a form of
confiscation by coercion. It is confisca-
tion by groups who believe their values
and priorities are superior to other
peoples a breathtaking moral claim.
It forces families to pay for things they
fundamentally disagree with. People
with deep moral objections to abor-
tion or foreign wars or mixed-sex
cityam.com/forum
We pay so much
tax many of us convince
ourselves that we have
no social obligations
In association with
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.

22
WEDNESDAY 23 MAY 2012
EAMONN BUTLER
Dont ignore the powerful moral
arguments against high taxation
schools have to live with the dismal
thought that they, unwillingly, help
pay for those things. That should give
politicians the utmost discomfort,
though I doubt it does.
Tax reduces peoples ability to act
morally. They might prefer to spend
their money on helping their children
become good citizens, caring for their
elderly relatives, or supporting good
causes. Instead they see it taken and
going on bank bailouts or expensive
prestige projects. Though we wish to
see individuals, families and local
groups taking more responsibility for
their own lives and welfare, high taxes
leave them less able to do so.
And when the authorities usurp our
choices, we cease to be morally sover-
eign and responsible individuals, and
become mere agents of the state. A
society cannot be considered gener-
ous or caring when its care and gen-
erosity is funded on money forced out
of people, rather than freely given.
Giving that comes voluntarily,
through the public spirit of private
donors, is far more laudable morally
than support that is extracted by coer-
cion.
Americans give almost twice as large
a proportion of their earnings (1.67 per
cent of GDP) to charity than does the
UK (0.73 per cent). In large part, that is
because the US government absorbs a
much smaller part of its citizens
income, leaving them space to make
their own giving decisions. Within
that space, Americans have become
the largest philanthropic givers in the
world, with libraries, orchestras, hospi-
tals, schools and medical research all
funded by private donations.
By contrast, we in the UK pay so
much in tax that many of us convince
ourselves that we have no outstanding
social obligations at all. We are told
that our taxes do wonderful work pay-
ing for education, welfare and polic-
ing. So we see it as teachers jobs, not
ours, to ensure our children are liter-
ate and well behaved. We see the duty
to help others as a matter for the wel-
fare state rather than accepting that
duty on ourselves. We even walk blind-
ly past crime, vandalism or neglect,
reassuring ourselves that these are
things for officials to deal with.
And when people believe the state
will provide, they see less reason to
contribute to philanthropic causes.
Why support good causes when the
state already supports them? A classic
example was the Royal National
Lifeboat Institution (RNLI), which was
created independently in 1924, but
later fell on hard times. In 1854 it start-
ed accepting government grants. But
for every pound the government put
in, the RNLI lost thirty shillings (1.50)
in voluntary donations. So in 1869 it
cut loose again and has flourished
ever since.
Remember too that our politicians
and officials have their own interests,
which inevitably colour how they
spend our money. Ruling politicians
steer tax revenues to their own sup-
porters and pet causes. Interest groups
vie against each other for grants and
subsidies. The only group not repre-
sented in this carve-up of taxpayer
funds is, unfortunately, taxpayers
themselves.
Taxation, then, rests on force. It
undermines morality, crowds out
charity, rewards power, undermines
personal responsibility, promotes
group conflict and turns governments
and the public into cheats. Taxation
may be a necessary evil but it is still
an evil.
Eamonn Butler is director of the Adam
Smith Institute and a contributor to the
2020 Tax Commission.
other emotion. But Osborne should
feel remorse for peddling this non-
sense. Monetary union does not
require fiscal integration and bur-
den sharing.
My neighbour and I are in a mone-
tary union. We both use sterling. But
this does not require him to guaran-
tee my debts. And should I fail to hon-
our them, perhaps by defaulting on
my mortgage, there is no reason why
I should be forced out of this union:
no reason why I could not go on
using sterling.
Nor are governments different from
individuals in this respect. The state
government of California may soon
default on its debt. But both the
Californian government and
Californian residents will surely con-
tinue to use the US dollar.
Or, if you insist on a national gov-
ernment case, consider the fact that
Zimbabwe has dollarised; both its
citizens and government now trans-
act in US dollars. Does this require fis-
cal integration and burden sharing
between the US and Zimbabwe? Not
long ago, most countries used the
same currency: namely gold. Yet
there was no global fiscal integration
or global burden sharing.
Trading nations benefit from a com-
mon currency because it transmits
accurate price signals. Floating
national currencies do not. Consider
sterling. If foreign sales of British-pro-
duced goods increase, then demand
for sterling and, hence, its value also
increases. This reduces the profits
that exporters would otherwise earn
and so dampens the price signal that
would otherwise direct more capital
and labour to these successful indus-
tries. And vice versa. If exports fall,
sterling loses value, which lessens the
loss to exporters and slows the proper
reallocation of resources.
A single currency avoids this sys-
tematic perversion of resource alloca-
tion. But this benefit is more than
offset by the cost of treating a mone-
tary union as a debt union. Merkel is
right about the folly of subsidising
governments borrowing costs.
Because it makes non-voting foreign-
ers pick up the tab, a debt union
encourages politicians to spend
wastefully on their domestic voting
populations.
There is no logical connection,
remorseless or otherwise, between
sharing a currency and sharing debts.
Turning the Eurozone into a debt
union has the simple political motive
of grabbing German wealth. It will
push Europe even faster along its
path of waste and decline.
Jamie Whyte is a senior fellow of the
Cobden Centre.
AGAINST
THE GRAIN
JAMIE WHYTE
Europes shared currency shouldnt entail Germany bankrolling a debt union
23
A hiring revolution
[Re: Britain must embrace 30 per cent tax
revolution to boost growth, Monday]
I agree with your tax simplification ideas,
and the report convinces me that reform
would increase incentives to hire. But Im
not sure tax reform will be enough. It would
help some firms save money. But just
because money is saved, it doesnt mean
that companies will immediately recruit or
increase their capital expenditure.
Unfortunately a lot more still needs to be
done to tackle UK debt, both government
and private, as well as the restrictive policies
and regulations that limit employers
freedom to act. Tax reform should only be
the start. Employers need the ability to
make more flexible decisions.
DanHollidge
Deadweight costs
Either the country persists with the systemat-
ic robbery of the products of work, or it shifts
to a tax on the annual rental value of land. By
forcing large numbers of people out of the
labour market, and by rendering large areas
of the country economically sub-marginal,
our tax system imposes a deadweight cost on
the economy and saddles the government
with the welfare bill. Property taxes may be
unpopular, but theyre less distortive.
HenryLaw
[Re: Blanket immunity for developing
nations has stifled climate hopes, yesterday]
I thought Dominic Raab was one of the sensi-
ble MPs. Dont tell me hes been captured by
the global warming ideologues.
Neil McMillan
T
HE shareholder spring has
shown investors ferociously
protesting about corporate
governance, accountability
and payouts. But a far deeper
financial and reputational time
bomb is ticking in many
corporations.
Todays Ernst & Young global fraud
survey shows the staggering expo-
sure to fraud, bribery and corrup-
tion in UK companies. The numbers
have risen during the economic
downturn at all levels, exposing
businesses to risks that put their
current problems into sharp relief.
The most shocking statistic is that
despite their role in running the
finances of companies, 47 per cent
of chief financial officers would not
rule out performing unethical
actions, including giving cash or per-
sonal gifts to retain business. Less
than half had personally attended
anti-corruption or bribery training.
Overall, 42 per cent of employees
across UK companies agreed that
management was now more likely
to cut corners. The numbers who
said they would provide personal
gifts to secure business has nearly
doubled in two years, potentially
falling foul of the UK Bribery Act.
Action taken in recent years by US
enforcers shows a path UK prosecu-
tors may follow. More than 90 per
cent of reported Foreign Corrupt
Practices Act cases have involved
third-party intermediaries. In one of
the most significant recent cases,
Panalpina was fined $81.9m
(51.9m) by the US Department of
Justice and the US Securities and
Exchange Commission for alleged
payments on its customers behalf to
local officials to speed up import
procedures. In the UK, a judge sent
two former executives to prison last
year for making illegal payments to
the Iraq government in violation of
TOP TWEETS
The 2020 Tax Commission is an intelligent
way ahead. Persuading government is some-
thing else.
@thehugheslady
Better that the Facebook bubble deflates
than the whole internet bubble bursts again.
@thebrandbuilder
I dont think Grexit will happen, at least in the
foreseeable future. If things turn ugly,
Eurozone will go for some kind of geuro.
@YanniKouts
There are parallels between Cameron and
Major governments. Though at least John
Major won an election.
@ChukaUmunna
Should fostering renewable energy sources
be a major priority for the UK government?
YES
The government is right with its overarching principle that well
need more low-carbon generation to keep the lights on in the
future. However, its draft energy bill gets the details wrong on how
to achieve it. By focusing on contracts for difference, the proposals
risk skewing the market towards nuclear and the Big Six, at the
expense of renewable energy and smaller suppliers. These overly
complex instruments, similar to derivatives, will restrict competition
in the market rather than attract the new investment the industry
needs, and the result is that consumers will be the losers and will
end up having to pay higher prices. Renewable energy sourced in
the UK is better for our energy security and will lead to lower and
more stable prices in the long run. It will mean that money spent on
our energy bills is re-invested here in Britain.
Juliet Davenport is chief executive and founder of Good Energy,
Britains only 100 per cent renewable electricity supplier.
Juliet Davenport
NO
David Merlin-Jones
British energy policy has been woefully managed for years. These
new propositions are a compromise by the government that satisfies
no one they are not green enough for environmentalists and are
too costly for consumers. At a time when increasing economic
growth is key, the last thing the manufacturing sector needs is
higher energy bills. The government should ensure competitive
industrial energy prices to revitalise the economy and only after that
should it worry about not subsidising nuclear power and promoting
more expensive low-tech energy sources. Without a strong,
rebalanced economy, Britain will not be able to afford greener
energy investments anyway. At best, increasing prices for already
hard-up consumers will alienate many from the green agenda and at
worst, it will drive hundreds of thousands of households into the fuel
poverty that already affects 4m UK households.
Davin Merlin-Jones is a research fellow at Civitas.
RAPIDresponses
The shareholder
spring must now
pounce on fraud
United Nations sanctions, and police
arrested three UK directors of an
engineering firm over allegations
concerning bribes being paid to
secure contracts abroad.
Companies are reporting a mix-
ture of complacency and institution-
al fatigue. Many are doing all the
right things. The UK could be called
the whistle blowing hotline capital
of Europe, with 90 per cent of com-
panies having set one up to detect
wrongdoing (compared to 49 per
cent in the rest of Western Europe).
The survey found 100 per cent have
an anti-bribery policy. Despite this,
UK companies have shown weakness
in punishing bribery and corrup-
tion. Only around one in four have
taken any action compared to 40 per
cent globally.
Many UK companies are tackling
the problems, but others are not ask-
ing the right questions. Most do not
realise that their company and third
parties may both be culpable for cor-
rupt acts. More than one in five com-
panies do not regularly perform
pre-acquisition due diligence, look-
ing for fraud or bribery skeletons in
the closet. Many have no provisions
to tackle fraud in other countries.
Boards, rather than requiring
more information, need to shine
more light into their companies
affairs. Without this, fresh from a
spring unrest, they could stumble
into a far bleaker winter of discon-
tent.
John Smart is UK head of Ernst &
Youngs Fraud Investigation team.
WEDNESDAY 23 MAY 2012
JOHN SMART
Printed by Newsfax International, BeamReach 5 Business Park, Marsh Way, Rainham, Essex, RM13 8RS
Distribution helpline
If you have any comments about the
distribution of City A.M.
please ring 0207 015 1230, or email
distribution@cityam.com
Editorial Editor Allister Heath | Deputy Editor David Hellier | Managing Editor & Head of News David Crow
Business Features Editor Marc Sidwell | Lifestyle Editor Zoe Strimpel | Sports Editor Frank Dalleres
Art Director Gavin Billenness | Pictures Alice Hepple
Commercial Sales Director Jeremy Slattery | Commercial Director Harry Owen | Head of Distribution Nick Owen
4th Floor, 33 Queen Street,
London, EC4R 1BR
Tel: 020 3201 8900
Fax: 020 7248 2711
Email: news@cityam.com
Editorial Statement: This newspaper adheres to the systemof self-regulation overseen by the Press Complaints Commission. The PCCtakes complaints about the editorial content of publications under the Editors Code of Practice, a copy of which can be foundat www.pcc.org.uk
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
Eurostar brings culture and sport
together to support London 2012
Eurostars chief exec
says why it is 2012s
international rail
services provider
Q
What was your brands
primary reason for being
involved with the Games?
A
For us the partnership felt
natural, partly because of the
geography: we come into St
Pancras, which will be just
seven minutes away from the
Olympic Park by the special Javelin
service. And also it fitted very well
with our objectives, which were,
first, to show that London is the
destination to go to and second, that
you should go there by Eurostar not
just directly but in combination
with high-speed lines like the TGV,
because more and more high-speed
lines are being built on the
continent. Its a fantastic
opportunity to showcase why we
think Eurostar is the best, easiest
way to go to London if you live, not
just in Paris or Brussels, but Holland,
western Germany, all over France,
Switzerland, north-west Europe. So
we liked the idea of helping to bring
Europe to the Games and the Games
to Europe. Were doing events in
places like Strasbourg, Belgium and
getting lots of attention and interest.
Here were partnering with the
London cultural festival, bringing up
and coming European artists over for
our one-day Traction festival.
Q
How did you structure the
case for involvement to the
board?
A
The case was structured as part
of our marketing objective to
grow market share, especially
London-Holland, and Belgium
beyond Brussels. Its a marketing
image investment and the return
has to come and theyre measuring
that very carefully. Its a hard case,
not for fun, and its not so much
about the traffic we generate during
the Games as the longer-run impact.
65 DAYS TO GO
COUNTDOWN
TO THE LONDON
2012
OLYMPIC
GAMES
OLYMPICBUSINESS
24
WEDNESDAY 23 MAY 2012
cityam.com
Q
What was the hardest issue to
reconcile in order to get
board approval?
A
It was the first time we went
into sports usually we
sponsor culture or music, so
there was an element of
scepticism. Arent we going to be
drowned in the noise from all these
massive brands? But we decided to
go ahead and then advertise in a
very different way: not using
athletes in our television
advertisements, for example, but
showing people brainstorming about
the opening ceremony.
Q
How have you structured
your business to maximise
Olympic opportunities?
A
First we talked to people who
had Olympic experience and
then put together a team of
people from Eurostar and
people who had worked on other
Games. We have two big strands to
that work, the commercial,
marketing part and also the
operational part, because a big part
of our job will be to bring people to
the Olympics: athletes, the French,
Belgian and Dutch teams, both for
Olympics and Paralympics, plus
media, officials and VIPs.
Q
How did the announcement
that you were involved affect
your business, internally and
externally?
A
Internally there was great
excitement from day one, but
not so much externally it
seemed too far away, perhaps.
But now the external interest is
catching up, quite late, but I was
over in Paris last week and our
partners and customers are talking
about it over other big events. I
thought, because Paris lost to
London, there could be a bit of
resentment but now theres just
excitement. Its very positive.
Q
How are you handling your
ticket allocation and
hospitality?
A
Weve got quite a few tickets
for staff, for the Games and the
test events, and weve had a
programme of activities to
reward performance and customer
service. Importantly, people are
nominated by their colleagues. Well
also be showing some of our clients
the events, not to win new markets
but to build relationships and also
for some to experience our service
on their way to and from the Games.
Were also doing promotions to
reward our customers.
Q
How will you judge your
success post-Games?
A
The short-term goals are all
around service in transporting
the athletes and other officials,
and also internally making
sure the whole thing is a positive,
light, energising moment not just
a lot of hard work. And the mood in
the business is very good. Then there
are the longer-term goals about
increasing market share over the
next three to five years. You might
have seen weve been advertising
lately about London-Amsterdam.
Q
What has surprised you most
about your involvement to
date?
A
The sheer size of the operation.
Its absolutely massive, and its
difficult to realise the scale
until youre involved. I think it
will be an extraordinary event. And
because it is bang in the middle of
western Europe, I didnt realise but
apparently a lot of the countries are
investing heavily into the national
houses they set up in London for the
duration. I think it will be
exceptional this year.
Nicolas Petrovic is chief executive of
Eurostar.
Nicolas Petrovic Eurostar is responsible for bringing several European teams to the Games
direction of, for example,
Citigroup over the next couple of
months, or the price of gold over
the next few hours, it is easy to
position yourself to profit if the
market drops.
Added to this is the wide range
of markets available. There have
always been ways for private
investors to trade individual
shares, foreign exchange,
commodities, bonds, stock indices,
etc. But with CFDs this can all be
done from one account. And,
unlike with the futures markets,
the size of the exposure can often
be tailored when using CFDs. For
example, if our clients want to
trade stock indices such as the
Dow Jones, or forex pairs such as
euro-dollar, there are mini
contracts available, allowing the
level of risk to be kept to a level
that they feel comfortable with.
CFDs really are one of the best
ways of trading a wide range of
markets if you have a short to
medium-term view on direction.
While all of this can seem a
little daunting to some at
first glance, there is a
whole host of resources
out here to guide you
through.
Will Hedden is a sales
trader at IG Markets.
A good place to start or fur-
ther your education is to come
along to City A.M.s Active Trader.
Your ticket includes a complimen-
tary lunch and champagne recep-
tion.
www.cityamactivetrader.com
A
DVANCES over the last ten
years have served to level
the playing field of financial
markets for private
investors around the world.
It is not surprising that
contracts for difference (CFD)
have enjoyed such strong growth
in popularity over the same
period. Previously, they had been
almost exclusively the reserve of
major financial institutions, but
leaps forward in technology have
opened them up to a whole new
audience.
Another reason for the CFD
boom is transparency. The
financial industry has to be at
the top of the league of
industries which love jargon
but the concept behind a CFD is
very straightforward. It mimics
the movement of an underlying
market so if the price of
Amazon shares rises from $125
to $130, the CFD will follow suit.
If you would like to take a
position using CFDs equivalent
to owning, for example, 100
shares in Amazon, then you buy
100 CFDs.
The movements in various
markets over recent years have
also helped to boost the appeal
of CFDs. In many countries
around the world it has
historically been difficult for
clients to short-sell
markets
particularly
individual
equities. CFDs
can be traded
in both
directions, so if
you had a
negative
view on
the
David Jones is the chief market
strategist of IG Index and he will be
delivering a masterclass at Active
Trader on financial spread betting
and contracts for difference.
G
E
T
T
Y
TRADING
COMMENT
DAVID JONES
Calling all traders: One day to go
cityamactivetrader.com
ACTIVETRADER CONFERENCE
25
WEDNESDAY 23 MAY 2012
FOR MORE INSIGHT ATTEND OUR TRADING AND INVESTMENT CONFERENCE ON 24 MAY: BUY TICKETS AT CITYAMACTIVETRADER.COM
Get your tickets online for Active Trader at The Grange Tower Bridge Hotel
DAVID
JONES
TIM
GUINNESS
ALLISTER
HEATH
RICHARD
FARLEIGH
LEX
VAN DAM
cityamactivetrader.com
0203 201 8900
See the full programme & buy tickets today at
or call
In association with Champagne reception sponsor Produced by
TRADING
COMMENT
WILL HEDDEN
F
OR many years, trading
financial markets in general,
and spread betting in particular,
was felt to be the reserve of City
professionals. But with advances in
technology and an increased
awareness of the impact that
financial market gyrations have on
our everyday lives, it has
increasingly moved into the
mainstream.
Even among people who have never
tried it, there seems to be a lot of
curiosity about financial spread bet-
ting, resulting in a wide spread of
opinion at both extremes with
some thinking its an easy way to
make money, and others petrified at
the risk a small movement in a mar-
ket can have on your profit or loss.
While spread betting is not suitable
for everybody, it does not necessarily
have to be a rollercoaster ride of emo-
tions, glued to the screen 24-hours a
day worried about how the latest
Chinese trade figures will impact on
your long FTSE/short pork bellies
trades. There are plenty of tools these
days that are available and should
be used to help manage risk and
free your time up to do something
more productive than watching
numbers change. For example, stop
losses have been around for a long
time and with the advent of guar-
anteed stop losses you can absolutely
nail down your maximum risk right
from the start of the trade, regardless
of what effect outside events may
have on your position.
Another important consideration
is thinking about the size of your
trade. If you find yourself swinging
from elation to depression with
every one penny move in the price
of Marks and Spencer and the effect
it is having on your account bal-
ance, then it could be the trading
gods way of telling you that maybe
you should scale back the size of the
position. Figuring out the direction
for a market can be tricky enough at
the best of times. Trading at a level
that makes sense, based on your risk
capital, can help you look at the
markets from a balanced viewpoint,
and not get caught up in the
minute-by-minute swings.
There are plenty of educational
resources available from spread bet-
ting companies. Many of these
videos are aimed at those for whom
financial markets are a new thing,
or those just starting to get involved.
They take you right from the basics
finding a market, placing your
very first trade and managing risk
to more advanced topics such as
trading volatility, using options. and
technical analysis.
If the idea of trading financial
markets has ever appealed to you,
there is a wealth of information out
there and you can dip your toe in at
a level that suits your own particu-
lar risk profile.
David Jones will be delivering a compre-
hensive spread betting and contracts for
difference masterclass at 3.30pm tomor-
row. To meet our panellists and dozens
more trading gurus on the day, buy your
ticket today:
www.cityamactivetrader.com
Down can be up when
you go short
Even if you are simply looking to
hedge your equity portfolio in
turbulent times, getting to grips with
contracts for difference is essential
for the active trader.
City A.M.s all-day trading show is on tomorrow sign up and learn more about how to trade the markets
S
O Im supposed to entice you
to keep reading this column
until the end. But Im just
going to come right out and
say it. The new BMW 6 Series Gran
Coupe is very, very good.
Surprisingly so. I couldnt have
predicted it. It may even be my
ideal car. You see? Finished. You
can head to the Sport section now.
Still here? Okay so you want to
know why. Well I, like many other
people, want a car that is powerful,
comfortable and a little bit luxuri-
ous. A car in which you can knock
off hundreds of miles in a single
trip without so much as a twinge of
discomfort or stress. A car that you
genuinely would rather be driving
over the longest distances possible.
Yet at the same time you want a car
that can be thrilling in the bends. A
car you can drive 600 miles to the
mountains just to enjoy the roads
when you get there. A GT then, in
the tradition of a grand tourer?
Well no, not really, because I
couldnt afford to fuel one. And in
any case a 2+2 wont do. I want to
go with friends, kids, the family.
You see, Im asking for more. Its
already getting trickier.
But somehow BMW has done it. I
drove the 640d version of its new
Gran Coupe from Bracknell to
Strasbourg in a single, great solo
romp okay it was interrupted by a
chateau in Reims and I loved driv-
ing it. I didnt want to stop. I
wouldve driven it back home too if
theyd asked me to.
Why? Because it offers the free-
dom of a GT sports car but with the
ability to properly relocate four
people at considerable speed and in
great comfort. It isnt a sports car of
course. But its performance is close
enough. Whats more, it looks the
part. Its genuinely stylish and ele-
gant and a little bit muscular. Its
face is the polite side of menacing,
with its shark-like nose, trademark
kidney grille and xenon headlamps.
Not to mention the frameless
doors which would make it perfect
for red carpet events or indeed
making an entrance anywhere,
because driving this car is quite an
event in itself. To my mind, it is bet-
ter looking than the regular 6
Series Coupe that it is based on. The
difference in length is only an addi-
tional four inches or so. Yet the car
looks better for it and drives better
too.
Inside, the Gran Coupe is luxuri-
ous and comfortable in both SE and
M Sport trim. Dakota leather and
fine brushed aluminium trim make
for a classy environment, while tech
includes a reversing assist camera
and a head-up display. Its in the
rear where most of that four inches
has gone. There is plenty of space
for adults, not just little people.
This 640d Gran Coupe has a 3.0-
litre, 6-cylinder turbocharged
engine which is good for 313bhp.
The car can reach 0-62mph in 5.4
seconds and on to 155mph. These
figures are impressive especially
for a car so big but even more so
when you consider that its 640i
petrol-powered sibling has exactly
the same sprint time and similar
power (320bhp). This means if
youre interested in the superior
fuel economy of the diesel then
there is precious little compromise
in terms of performance.
More amazing is the sound of the
engine. It makes a lovely noise. It
doesnt sound like a diesel when its
underway, and sounds very similar
to a petrol engine. The comfortable
ride experienced on the motorway
is just as good on the back roads.
Changing the setup from Comfort
to Sports+ driving mode which
changes the steering, transmission,
throttle and suspension causes
the limousine-like comfort to make
way for a sports-car like pace and
handling.
Okay, so it feels like a big car, but
its a capable one. In the corners it
feels balanced, progress feels fluid
and the driving just flows. Its a
great feeling and the 640d Gran
Coupe is a lovely motor. It is also
economical. The end.
BMWs 640D Gran Coupe delivers power as well as practicality.
Built for comfort as well as speed
BMWs 6 series Gran Coupe is a deliciously silky, powerful ride for the whole family, with a lush interior
27
WEDNESDAY 23 MAY 2012
LIFE&STYLE
cityam.com
MOTORING
CAR TALK
BY RYAN BORROFF
Zipcar tries out Vauxhall Amperas
Car sharing club Zipcar is trialling Vauxhall Amperas in London over the
next six months as part of a pilot scheme. The extended range electric
car which emits just 27g/km of CO2 and returns 235.4mpg can run
on electricity only for up to 50 miles. Five London boroughs Camden,
Croydon, Islington, Wandsworth and Westminster all have a brightly
liveried Ampera available to drive.
WORDS BY
RYAN BORROFF
THE VERDICT:
DESIGN hhhhh
PERFORMANCE hhhhh
PRACTICALITY hhhhh
VALUE FOR MONEY hhhii
THE FACTS:
BMW 640D GRAN COUPE
PRICE: 63,900
0-62MPH: 5.4 secs
TOP SPEED: 155mph
CO2 G/KM: 149g/km
MPG COMBINED: 49.6mpg
1.6 litre Kia Ceed on sale from June
The new Kia C'eed will cost from 14,395 when it goes on sale in June.
Available with two petrol and two turbodiesel engines, the 1.6-litre
CRDi model is the most economical, with a claimed mileage of
76.3mpg and CO2 emissions of 97g/km. As you can see, the new
model has a more athletic and sporty appearance than before. It is
also longer and lower.
MoT exemption
If you keep a garage at home youll be pleased to hear that classic cars
and motorcycles built before 1960 are to be exempted from the MoT
test. According to the DfT this is because classic and historic vehicles are
usually well looked after and have a much lower accident and MoT
failure rate than newer vehicles. The new law will take effect from 18th
November.
For the next month City A.M. and Brewin Dolphin will be shining a spotlight
on a series of City Treasures as we celebrate some of the great places and
institutions around us. Many of them are established with a long
and interesting heritage yet they still exude their core values
based on service and excellence.
Tomorrow is Truefitt & Hill.
www.brewin.co.uk
Former members of the HAC have a chance to volunteer as Pikemen & Musketeers
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
M
I
n a city packed with spectacular
sights, it takes something truly
special to be classed as a treasure.
But anyone who has ever stood in
the green oasis of the Artillery
Gardens of Armoury House and
caught sight of the sun glinting off
the jagged City skyline will know the
Honourable Artillery Company (HAC)
headquarters is just that.
And it isnt only the companys
spiritual home that is a treasure: the
HAC itself plays an important role in
City life, as it has throughout its
distinguished history. First
incorporated by Henry VIII in 1537,
the HAC is the second most senior
regiment in the Territorial Army. Its
ceremonial duties include firing the
royal salutes at the Tower of London,
and acting as guards of honour to
members of the royal family and
visiting heads of state.
It also provides a detachment of
special officers to the City of London
Police, working alongside regular
officers on street patrols and being
drafted in for special events such as
the London Marathon.
For those members of the company
who wish to continue their affiliation
after their active service, there is an
option for the very best to join the
Company of Pikemen & Musketeers: a
select group of unpaid volunteers who
wear the uniform of the period of
Charles I and act as, among other
things, guards to the Lord Mayor. That
isnt to say the regiment is a stranger
to action, though: it fought with
distinction in both World Wars and
has since been involved in the
conflicts in Bosnia and Iraq.
Armoury House, a Grade II listed
building, is located north of the City
in Finsbury, close to Moorgate station.
The regiment has been tied to the
grand Georgian house since the
completion of its central block in the
16th Century. While it is not usually
open to the public, the building and
its extensive grounds can be booked
for events including awards dinners,
summer parties and weddings. If you
get a chance, snap it up and partake
in a small slice of this London
treasures remarkable and enduring
history.
WHY THIS FAMOUS REGIMENT IS A TRUE CITY TREASURE
H
eres an odd one: a banker I
know is a Gunner: an
Arsenal supporter, that is.
But, he confesses, hes also
a regular at Stamford Bridge.
Thats enemy territory: home of
my team, the Blues, Chelsea FC. He
doesnt go for the football,
though: he goes for the food.
Whoa, back up a minute.
Football and food are not words
that usually occupy the same sen-
tence. But getting into his chosen
place to eat doesnt involve turn-
stiles, terraces and queuing at
burger bars.
The reason he goes is Marco, a
joint venture between Chelseas
billionaire owner Roman
Abramovich and a certain Mr
Pierre White, whose name is syn-
onymous with the M-word
(Michelin). But I still have serious
doubts about whether exceptional-
ly good food can be found some-
where thats lush, plush and more
glitzy than places youd normally
hold a business meeting. The man-
agers a smart, chatty Italian not
Roberto di Matteo but Livio Italiani
-- who shows me to a large horse-
shoe of a seat, close to a sparkly-
gold pillar. Reflective glass is never
far away and the lively buzz bounc-
ing from it isnt exactly what youd
call a discreet murmur.
If youre not obsessed by the
fact youre at one of Europes top
football venues, though, Marco is
actually rather pleasant: an
enjoyable, if not inexpensive,
experience.
Its 10oz steaks served with
thrice-fried chips are well
sourced and have a decadent mar-
bling of fat. My Cornish crab could-
nt have been fresher and, as any
starter should be, was nice and
light, with just a few small leaves
to inject extra vibrancy.
I struggled to choose between
honey-roasted pork or venison as a
main, and then rather nervously
asked for venison to be cooked
rare. Most chefs dont believe you,
allowing this particular red meat
to become pink, at best. But my
slices of seared deer, served with
an extra of buttered peas, were
boldly red.
But what I really had my fingers
crossed about was something
known to Marcos chefs as the
Koffman cabbage. Ever since his
days at his first restaurant Harveys
-- when my wifes fruit and veg
company got outrageously rude
messages from him on the answer-
phone, along with his next days
order for fresh herbs -- Pierre White
has happily pinched the greatest
recipe ideas from chefs hes
worked with.
And I happen to know that one of
the secrets Marco took from the
brilliant Pierre Koffman at Tante
Claire is an absolutely perfect
accompaniment to venison: a gar-
nish of baton carrots, celeriac and
lardons, fried together in duck fat,
then reheated in reduced cream.
And, joy of joys, the Koffman cab-
bage is there.
Now, my Gunner friend assures
me that the best thing on Marcos
menu is the tarte tatin, which he
says is to die for. After the
Koffman cabbage it certainly had a
lot to live up to.
And it was superior to any
caramelised apple tart I have ever
tasted -- even at some of the best
restaurants in France. I was com-
pelled to do the thing that restau-
rant reviewers never do: I asked to
talk to the chef. Like Marco him-
self, I wanted to pinch the secret.
Roger Pizey, I wasnt surprised to
hear, is among a dying breed
among chefs: a ptissier. And the
secret to the tarte tatin? It is vital-
ly important to let the tatin rest for
a good two hours, so as to let the
tart repose, to relax, get rid of its
tensions and to indulge itself to
the caramel, says Pizey. So, quite
simple really.
You didnt, perhaps, need to
know that. But you do now need to
go to Marco at Stamford Bridge to
discover the best-kept dining-out
secret. Its your just dessert.
To book, call Marco on 0207 915
2929. Dining is evenings only from
6pm, Tuesday through Saturday.
Restaurant closed on match-days.
Stamford Bridge
scores with Marco
The decor at Marco isnt what you might expect from a top restaurant but the food is sublime
Marco Pierre Whites restaurant at the Chelsea ground is a hit
WEDNESDAY 23 MAY 2012
cityam.com
28
RESTAURANT
MARCO
Stamford Bridge, SW6 1HS
FOOD hhhhh
SERVICE hhhhi
ATMOSPHERE hhhii
Cost per person without wine: 50
By John Lawless
LIFE&STYLE FOOD & DRINK
THE HONOURABLE
ARTILLERY COMPANY

29
TV & GAMES
cityam.com
T
E
R
R
E
S
T
R
I
A
L
BBC1
SKY SPORTS 1
7pmLucian Bute Behind the
Ropes 7.30pmLive Elite League
Speedway 9.30pmRoad to Dreams
10pmLucian Bute Behind the
Ropes 10.30pmState of Origin
Rugby League 12.30amBoots n
All 1.30amElite League Speedway
3.30amLucian Bute Behind the
Ropes 4amRoad to Dreams
4.30amSporting Greats 5am-6am
Trans World Sport
SKY SPORTS 2
7pmTotal Rugby 7.30pmLive
Championship Rugby Union 10pm
World Endurance Championship
11pmPool 12amProfessional 8
Ball Pool Masters 1am
Championship Rugby Union
2.30am-3.30amTrans World
Sport
SKY SPORTS 3
7pmLive Winning Post 9pmBoots
n All 10pmCage Fighter 10.30pm
Trans World Sport 11.30pmCage
Fighter 12amWatersports World
1amInside the PGA Tour
1.30am-2amEuropean Tour
BRITISH EUROSPORT
7pmGet Ready for Roland Garros
7.10pmOlympic Magazine 7.45pm
Wednesday Selection 7.50pm
Alexias Selection 8pmShow
Jumping 9pmAlexias Selection
9.05pmRiders Club 9.10pm
European Tour Golf 9.40pmGolf
Club 9.45pmYacht Club 10.05pm
Cycling 11.05pmGet Ready for
Roland Garros 11.15pmMarathon
des Sables 11.45pmFootball: Euro
Legends 12.45am-1amEuro 2012
Countdown
ESPN
7pmESPN Kicks: MLS 7.15pmFA
Cup Football 8.45pmESPN Kicks:
Extra 9pmWorld Series by Renault
10.30pmDTM Review Show
11.30pmPress Pass 2012 12am
UFC 146 Countdown Show1am
Behind the Fights 2amPremier
League Classics 4am-6amPolo
SKY LIVING
7pmSteps: On the Road Again
8pmBattle of the Brides 9pm
Bones 10pmGreys Anatomy 11pm
Bones 12amCriminal Minds
1.50amMaury 2.40amMedium
3.30amBones 4.20amNothing to
Declare 5.10am-6amJerry
Springer
BBC THREE
7pmDont Tell the Bride USA
7.50pmFILM Pirates of the
Caribbean: The Curse of the Black
Pearl 2003. 10pmEuros Most
Shocking Moments 11.30pm
Family Guy 12.15amAmerican
Dad! 1amEuros Most Shocking
Moments 2.25amBritain Unzipped
3.25amSnog, Marry, Avoid?
3.55amWorlds Craziest Fools
4.25am-5.25amDont Blame the
Dog
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmFILMCalifornia
Man 1992. 9.45pmFILMSilent
Hill 2006. 12.15amThe Big Bang
Theory 1.10amScrubs 1.40am
How I Met Your Mother 2.05am
Rules of Engagement 2.30am
Accidentally on Purpose 2.55am
Desperate Housewives 3.40am
90210 4.25amGreek
5.05am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmNo County for Old Men
9pmSwamp People 10pmAx Men
11pmAmerican Pickers 12am
Storage Wars 12.30amPawn
Stars 1amSwamp People 2amAx
Men 3amIce Road Truckers 4am
Heir Hunters 5am-6amAncient
Discoveries
DISCOVERY
7pmBear Grylls: Born Survivor
8pmMoonshiners 9pmRiver
Monsters 10pmSons of Guns
11pmGold Rush 12amRiver
Monsters 1amSons of Guns 2am
Deadliest Catch 3amIce Pilots
3.50amWheeler Dealers 4.40am
Bear Grylls: Born Survivor
5.30am-6amDestroyed in
Seconds
DISCOVERY HOME &
HEALTH
7pmSay Yes to the Dress 8pmI
Didnt Know I Was Pregnant 9pm
Hospital Sydney 10pmEmergency
11pmUntold Stories of the ER
12amHospital Sydney 1am
Emergency 2amUntold Stories of
the ER 3amSay Yes to the Dress
4amA Baby Story 5am-6amBirth
Stories
SKY1
8pmEmergency Abroad 9pm
Touch 10pmAn Idiot Abroad 2
11pmCop Squad 12amRoad Wars
1amLuton Airport 2amBrit Cops:
Zero Tolerance 2.55amCaribbean
Cops 3.45am99 Most Bizarre
4.35amReal Filth Fighters
5.05am-6amDont Forget the
Lyrics
BBC2 ITV1 CHANNEL4 CHANNEL5
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
6pmBBC News 6.30pmBBC
London News 7pmThe One Show:
7.30pmChelsea Flower Show
2012: BBC News
8pmDIY SOS: The Big Build:
9pmThe Apprentice:
10pmBBC News 10.25pm
Regional News 10.35pmThe
National Lottery Wednesday Night
Draws: 10.45pmFILMSurrogates:
2009. 12.10amWeatherview
12.15amSign Zone: See Hear
12.45amSign Zone: The 70s
1.45amSign Zone: Great Ormond
Street 2.45amSign Zone:
Chaplains: Angels of Mersey
3.15amSign Zone: Fake Britain
4amSign Zone: Great British Menu
4.30am-6amBBC News
6pmEggheads: Quiz show,
hosted by Dermot Murnaghan.
6.30pmTOTP2: Footage of
Mott the Hoople, Blondie and
the Smiths.
7.30pmGreat British Menu:
8pmChelsea Flower Show
2012: Alan Titchmarsh looks
back on the days events.
9pmHitlers Children:
10pmThe Apprentice: Youre
Fired:
10.30pmNewsnight: Weather
11.20pmThe Fall of Singapore:
The Great Betrayal:
12.20amBBC News
3.55am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale:
7.30pmThe Unforgettable
Dudley Moore:
8pmLewis:
10pmITV News at Ten
10.30pmLondon News
10.35pmCHOICE Soccer Aid
2012:
11.05pmThe Unforgettable
Hattie Jacques:
11.35pmTotal Emergency:
12.35amJackpot247; ITV News
Headlines 2.35amFILMThe Three
Musketeers: 1973. 4.25am-5.30am
ITV Nightscreen
6pmSimpsons: 6.30pmHollyoaks:
7pmChannel 4 News 7.55pm
Channel 4 Presents Liz Johnson
Night Swimmer: 8pmSecret
Eaters: 9pmCHOICE 24 Hours in
A&E: 10pmThe Killing: 10.55pm2
Broke Girls: 11.25pmDesperate
Housewives: 12.25am4thought.tv
12.30amRandom Acts 12.35am
Paralympic World Cup Highlights
1.35amMusic on 4: Spotlight
1.50am Dot Rotten: Intro 2.05am
4Play: Gaz Coombes 2.15am4Play:
The Heartbreaks 2.25amMercury
Prize Sessions 2.40amLaunched at
Red Bull Studios 2.50am Whats
Fufu? 2.55amSt Elsewhere 3.45am
Smallville 4.25amThe Astronomers
Sun 4.30amDeal or No Deal
5.25am-6.10amCountdown
6pmHome and Away:
6.30pm5 News at 6.30
7pmThe Gadget Show: World
Tour: 5 News Update
8pmNew Emergency Bikers: 5
News at 9
9pmCHOICE NCIS:
10pmLaw & Order: Special
Victims Unit:
11pmLaw & Order: Special
Victims Unit:
11.55pmPoker: The Big Game:
12.50am SuperCasino
3.55amHouse Doctor 4.20am
Nicks Quest 4.45amDivine Designs
5.10amWildlife SOS 5.35am-6am
Wildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6 7
8
9 10
11
12 13 14
15 16
17 18 19 20
21
22 23
12 13 9
13 8 14
10 11
9 28
24 10
45
7 20
30 6
17 23
11 12 10
8 19 11
29
13
15
11
22
35
14
16
12
4
24
16
10
5
12
38
34
27
17
13
13
ACROSS DOWN
C
D
P
W
O M
L
N
A
4
4



4


S W E P T B R A C E
H R P B L
I N T O A L P A C A
R A M B L E N T
T O R S O A D D L E
A W A N O
B A N N S T U N I S
A T E L O P E C
S L U R R Y E D G E
I L E N N
S C A L D A D U L T
9 3 8 1 5 7 8
7 2 1 8 4 6 3 9 5
1 3 5 2 1 8
9 8 9 7 8 5 3
1 4 9 3 4 1 6 2
8 4 9 5
7 4 6 9 8 3 9 6
4 5 3 6 1 7 1
2 6 9 8 4 6
4 3 9 6 7 2 1 8 5
9 1 1 2 2 3 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
MENDACITY
1 Embrace (5)
4 Beautiful young
woman (5)
8 Examine (6)
9 Chemically
inactive (5)
10 Save up for
future use (5)
12 Short musket of
wide bore with a
ared muzzle (11)
15 Easily impressed
emotionally (11)
17 Acquiesce (5)
20 Push roughly (5)
21 A bet on four
or more horses
in dierent
races (6)
22 Pass (time) (5)
23 Dexterous (5)
1 Ascend (5)
2 Thoroughly tidy and
remove dirt from the
entire house (6-5)
3 Caress gently (3)
4 Form of transport,
double-decker (3)
5 Set up (11)
6 Field covered
with grass (3)
7 Distinctive spirit
of a culture (5)
11 Musical pace (5)
13 ___ Ferrigno, Incredible
Hulk actor (3)
14 ___ volatile,
smelling salts (3)
15 Crustlike surfaces of
healing wounds (5)
16 Discharge (5)
18 Cereal crop (3)
19 Bring to a close (3)
20 Body of salt water (3)
T
E
R
R
E
S
T
R
I
A
L
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WEDNESDAY 23 MAY 2012
SOCCER AID 2012
ITV1, 10.35PM
New series. Cat Deeley presents the
build-up to the charity football match
in aid of Unicef, which will be staged
at Old Trafford.
24 HOURS IN A&E
CHANNEL4, 9PM
The stories of children and teenagers
brought into A&E and one of the
departments newest recruits,
emergency medicine trainee Matt.
NCIS
CHANNEL5, 9PM
A Marine dies while saving the life of
the Belgravian defence secretary, who
was the target of an assassination
attempt. Starring Sean Murray.
TVPICK
ARSENAL and England midfielder
Jack Wilshere has categorically ruled
out playing for Team GB at London
2012 this summer, after undergoing
minor knee surgery.
The club insist Wilshere, who
missed all last season with an ankle
problem, has not suffered a setback
and remains on course to return at
the start of next term.
Manager Arsene Wenger expects
to take Wilshere on the pre-season
tour of Asia and Nigeria from July as
the 20-year-old gradually rebuilds
match fitness.
However it is understood there is
Wilshere ruled
out of Team GB
after knee op
G
E
T
T
Y
WINNING the Champions League con-
vinced Didier Drogba to quit Chelsea,
the striker said yesterday as he con-
firmed the end of his eight-year spell
with the club.
The Ivory Coast star, who is tipped to
move to Chinese side Shanghai
Shenhua, revealed he agonised over his
future until the Blues conquered
Europe in Saturdays final.
Drogba, 34, scored the equaliser in
the 1-1 draw with Bayern Munich and
then netted the winning penalty as
Chelsea became the first London team
to lift the trophy.
Winning this final was the key. Not
me scoring the penalty, but winning
the game was the turning point, said
Drogba, who scored 157 goals in 341
Blues appearances.
Thats why I decided. I said, Weve
made history, all together. I want peo-
ple to remember that and I think its
the best time to move on.
Theres a chance that if the result
was different, maybe I would be here.
We were talking for many weeks, but
the turning point was based on the fact
I won everything I could and scored in
most of the finals we have played.
Drogba, who is out of contract this
summer, failed to agree a new deal
with Chelsea, who made him their
record signing when they paid
Marseille 24m in 2004.
He is thought to have been offered
250,000 a week to play for Shanghai
Shenhua, the ambitous club who
offered Blues outcast Nicolas Anelka a
gilded escape route in January.
His departure will ease 50m record
signing Fernando Torress fears over a
shortage of first-team starts, and
Drogba believes the Spaniard will come
to replace him as a talisman.
Its been a difficult season for him
but he has shown in a few games that
he is the man. Next season he is going
to be his season, he added.
I tried to speak to him. We have a
very good relationship, and we didnt
understand why we didnt play togeth-
er more, but that is the past, and he is
the future here at Stamford Bridge.
Drogba said Saturdays Champions League win made up his mind to leave Chelsea
BRITISH former world heavyweight
champion David Haye has denied
ducking a bout with WBC title-holder
Vitali Klitschko, insisting he wants to
fight the Ukrainian later this year.
Klitschkos camp this week accused
Haye of rejecting a deal in favour of
lining up the controversial clash with
compatriot Dereck Chisora in July,
saying the Londoner was afraid.
But Haye said: It makes absolutely
Haye hits back at Klitschko jibe
no sense for me to turn down a fight I
desperately want. The whole idea
behind this Chisora fight was that a
victory may then lead to a fight with
Vitali Klitschko. That was my plan, my
reason for returning to the ring.
Haye added he hoped to fight
Klitschko, whose brother Wladimir
beat the Englishman last year, in
September. Chisora and Haye, who
brawled in Munich after the formers
defeat to Vitali in February, meet at
Upton Park on 14 July.
WEDNESDAY 23 MAY 2012
30
SPORT
cityam.com/sport
BY FRANK DALLERES
BY FRANK DALLERES
BY SPORTS DESK STAFF
GET YOUR 2012/13
FULHAM SEASON TICKET,
AVAILABLE NOW.
GUARANTEED SEAT FOR 19
BARCLAYS PREMIER LEAGUE
GAMES FROM 399 ADULTS,
95 JUNIORS.
www.fulhamfc.com/seasontickets
0843 208 1234 (option 3)








































3 1 / 2 1 0 R 2 U O T Y E G
N TI O S A E M S A LH U F
W. O LE N B A L I A VVA AAV . W
T AAT E D S E NTE A R A U G
R LE E I M E R SP YYS AAY L C R A B




, TT, E K C
9 R 1 O T F
E U G A R LE




















9 A 9 3 M O R S F E M A G
S. R O I N 5 JU 9
s //s m o c . c amf h ul f . w w w
8 1 0 3 2 4 8 0




, S T LLT U D 9 A
s t e k tic n o s a e s
) n 3 o i t p o 4 ( 3 2
an acceptance he may not be ready
to start matches by the first round of
Premier League fixtures on 18
August, while the Olympics have
been deemed out of the question.
Team GB boss Stuart Pearce had
included Wilshere on his 80-man
shortlist and warned last month he
was ready to defy Wengers wishes
and pick the youngster.
Already an England regular but
ruled out of Euro 2012, and under
the age limit of 23, the Gunners star
was a prime Team GB candidate.
But with Wilshere expected to
need at least two months before
playing again there is no chance of
him being able to prove his fitness by
Team GBs 6 July deadline.
Goalkeeper Manuel Almunia has
left Arsenal, along with four other
professionals and two scholars after
their contracts expired.
REAL Madrid manager Jose Mourinho
has ended speculation about a
sensational return to Chelsea by
signing a new four-year contract.
Mourinho, 49, broke Barcelonas
dominance of the Spanish league this
year, winning the title in his second
season in charge at the Bernabeu.
The first manager to win league
championships in Spain, Italy,
England and Portugal, he is said to
Mourinho prolongs Real reign
have rebuffed soundings from
Chelsea about returning to London.
The newly-crowned kings of Europe
are mulling whether to offer interim
coach Roberto di Matteo a permanent
deal or attempt to lure a more high-
profile candidate.
Mourinho won two Premier
Leagues, including their first top
flight title for 50 years, one FA Cup
and two League Cups before leaving
Chelsea in 2007. He has also managed
Porto and Inter Milan.
BY SPORTS DESK STAFF
Wilshere has undergone knee surgery
European glory
prompts Drogba
to quit Chelsea
31
IN BRIEF
London 2012 tickets back on sale
nOLYMPICS: More London 2012
tickets go on sale at 11am today, even
for those who have not tried to buy in
previous rounds. Football, basketball
and diving are available, but athletics
and cycling have completely sold out.
Clijsters to quit after US Open
n TENNIS: Former world No1 Kim
Clijsters has confirmed she intends to
retire permanently in September after
the US Open. The Belgian, 28, came
out of retirement in 2009 with the aim
of winning Wimbledon.
G
E
T
T
Y
I
F WHAT we have seen so far is
anything to go by, cricket fans are
in for a real treat during the rest of
this series between England and
West Indies. The first match at Lords,
which England won by five wickets on
Monday, was the best Test in this
country for quite some time.
What surprised me most was the
Windies resilience. Even when
things did not go their way they
showed a backbone that we have not
seen from them in recent years.
They lost the toss and were behind
after the first innings, having been
bowled out for less than 250, yet
they stuck at their task and caused
England more than the odd jitter.
Had a few close calls not gone the
hosts way Jonathan Trott escaped
being given lbw by the finest margin
early in the second innings it
might have been even nervier.
WOUNDED
I had expected West Indies to be
better than perhaps some had billed
them, but they surpassed my
predictions and, while wounded, will
take some heart from their spirited
performance earlier this week.
England did well, as you would
CRICKET
COMMENT
ANDY LLOYD
Strauss deserves a break from criticism after hitting 122 in the first innings of Englands win
It makes absolutely no sense for me to turn
down a fight I desperately want

cityam.com
WEDNESDAY 23 MAY 2012
ALL FOUR OF LONDONS
PREMIERSHIP RUGBY TEAMS,
ONE SPECTACULAR DAY
TWICKENHAM STADIUM 1 SEPTEMBER 2012
IN ASSOCIATION WITH
2 GAMES, 1 TICKET
*Limited tickets available in designated seats only. Offer ends 31st May.
OFF FOR EARLY BIRDS
*
CALL 0844 847 2492 OR VISIT TICKETMASTER.CO.UK
Spirited Windies have surprised
us and served up treat of a series
:I@:B<K
CM :FLEKP :?8DG@FEJ?@G =@IJK ;@M@J@FE;li_Xdm
Jfd\ij\k (T+artar1 ;li_Xd. J5J8 (9o.O a1ers, wR Sm|t| OO, V
J D| Verata 9o, B A Sta|es oO.
:P:C@E>
>`if [@kXc`X (l|mare sa| O+r1+ |+|/es/Pf+|/er, 4|m-JkX^\ (-1 (
J l/+|rre lrs+ast| (Sp+ 4|rs OZm|rs OOsec. J\c\Zk\[ Fk_\ij1 (-' V
O+1er1|s| (O|r +t Jm|rs 8secs, (-- O T|am+s (O|r +t s+me t|me,
(-. l St+rr+r1 (O|r +t s+me t|me, (-/ P Kerr+a| (O|r +t s+me
t|me. Fm\iXcc1 ( J Ra1r|ae/ O||1er (Sp+ o9|rs ZZm|rs O4secs, ) R
Hesje1+| (O+r +t JOsecs, * l B+ssa (lt+ +t .ZZ. J\c\Zk\[ Fk_\ij1 .+
O T|am+s (O|r +t |r 9m|rs Josecs, ((0 P Kerr+a| (O|r +t
Z.OZ.5, (+- l St+rr+r1 (O|r +t Z.JJ.o, (,- VO+1er1|s| (O|r +t
Z.44..
KF;8PJ;@8IP
:I@:B<K
CM :flekp :_Xdg`fej_`g $ ;`m ([Xp ( f] +1 l+rc+s||re 1 V|11|eset
(l|1erpaa|, +m. Sarre] 1 w+rW|c|s||re (T|e K|+ O1+|, +m, [Xp )
f] +1 Samerset 1 Dar|+m(T+artar, +m. CM :flekp :_Xdg`fej_`g
$ ;`m )[Xp ( f] +1 Esset 1 Der|]s||re (O|e|msfar1, +m,
H+mps||re 1 O|+mar+r (T|e Ae+s BaW|, +m, Kert 1
le|cesters||re (O+rter|ar], +m, Nart|+mptars||re 1
O|aacesters||re (Nart|+mptar, +m.
Results
ENGLAND batsman Kevin Pietersen
has hailed team-mates Stuart Broad
and James Anderson as the most
devastating new-ball pairing in
world cricket.
Broad and Anderson took 14 scalps
between them as England beat West
Indies by five wickets in the first Test
at Lords, which ended on Monday.
Our bowlers are a fantastic unit.
To get 20 wickets on a pitch like that
was magnificent, said Pietersen.
Lords is a hard place to win a
Test because its a good batting
wicket. Anderson and Broad are
right up there as the best new-ball
pairing in the world.
West Indies have called up Tino
Best ahead of the second Test, which
starts on Friday at Trent Bridge, after
seamer Shannon Gabriel was ruled
out of the rest of the three-match
series with a back injury.
England chiefs, meanwhile, have
confirmed the schedule for the
winter tour of India. England will
play four Tests and two Twenty20s
before Christmas, with five one-day
internationals in January.
England pair
best in world,
says Pietersen
BY FRANK DALLERES
expect from the worlds No1 Test side,
and it was very much a team success,
with most players contributing.
The win was built on the first-
innings performances of seven-wicket
Stuart Broad and Andrew Strauss,
who batted superbly for his 122.
Hopefully this will silence the
captains critics. Strauss came into
the game under extreme pressure but
did nearly everything right and led
England to the win. Now let him get
on with it.
Seamer Tim Bresnan looks likely to
be dropped for the second Test,
however. Bresnan bowled very tight
and straight but England need a bit
more than that in very good
conditions.
I have mentioned before that I
would be delighted to see Graham
Onions recalled but my hunch is that
Steven Finn will take Bresnans place
for the next instalment of a
surprisingly gripping series.
Andy Lloyd is a former England Test
cricketer, and captain and later chairman
of Warwickshire.
David Haye denies claims he ducked a fight with Vitali Klitschko
Trade AUD/USD from 0.7pts
Its just one of over 300 FX pairs you can trade with our lowest ever spreads.
Open a spread betting or CFD trading account today at cmcmarkets.co.uk
Losses can exceed your initial deposit so ensure you understand the risks.
Spreads may widen dependent on liquidity and market volatility.
Made from a single dollar note by origami expert Won Park.