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ENGLAND CLAIM ASHES EU UNVEILS

NEW RULES
DOWN UNDER BRUSSELS HAS
POWER TO CLOSE
FIRST WIN IN OZ FOR 24 YEARS P26 FAILING BANKS P3
Issue 1,295 Friday 7 January 2011 www.cityam.com FREE

SLAP IN THE
FACE
Cameron excludes City from list of growth
industries in keynote speech on economy
POLITICS seen as a slap in the face by many in London specialises in.
▲

BY DAVID CROW London’s business community. Last night, a Downing Street source
Although Cameron said he didn’t insisted the Prime Minister had not
DAVID Cameron delivered a remark- want to make “banking smaller or the intended to talk down the City, and
able snub to the City yesterday, after City of London smaller”, he only men- said it was “a given” that it was a
he excluded it from a list of Britain’s tioned the Square Mile once in the 11- growth industry. “The City is a hugely
ANALYSIS l GDP “high growth” industries. page speech. The creative industries important growth industry, and it
22 In a speech outlining where he and education were also ignored. would be quite wrong to interpret oth-
20 % expects growth to come from in the UK financial services alone paid erwise,” she said
18 Manufacturing coming years, the Prime Minister said £53.4bn in tax last year – more than But a spokesman for Boris Johnson
16 that tourism, green energy, pharma- any other sector. Cameron’s decision said: “The Prime Minister is right to
14 ceuticals, advanced manufacturing to downplay the role of financial and identify vital industries that we all
12 and aerospace were the five “indus- business services is at odds with the wish to develop and grow in the future
8 tries of the future”. strategy of other successful to create wealth.”
Financial services
6 He failed to name-check a swathe of economies, such as New York, Hong “But the Mayor would argue that
Prof. services successful City sectors that have Kong and Singapore, which are fight- this should not come at the expense of
4
2 accounted for significant growth in ing to grow these industries. It also industries that are already world lead-
Source: ONS National Accounts blue Book recent years – such as insurance, law, goes against the view that the UK has a ing, and which have produced enor-
94 96 98 2000 02 04 06 08 10 accountancy, fund management and comparative advantage in high value mous benefits for the capital and our
business services – a move that will be added business services of the sort country”. ALLISTER HEATH: P2

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 2 News
Gimmicks and spin won’t rescue UK
EDITOR’S LETTER
ALLISTER HEATH
THERE is much that this government
is doing that is good for growth. Its
determination to cut public spending
is the only reason we haven’t gone the
way of Greece. Reducing corporation
tax to 24 per cent is an excellent idea.
The coalition’s Entrepreneurs Visa is a
good thing – but its effect is partly can-
celled out by other restrictions on
migration. Some useful infrastructure
projects are going ahead.
But with a few other exceptions, the
coalition’s growth policies remain
lightweight, a host of incentive-
destroying taxes are still going up, reg-
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WHAT THE OTHER PAPERS SAY THIS MORNING
GOLDMAN TEES UP SALE OF JAPAN
GOLF COURSE
Goldman Sachs is ending its long love
affair with golf in Japan. The US
investment bank is seeking buyers for
its remaining stake in Accordia Golf,
the country’s largest golf course oper-
ator. The proposed sale comes as
Japan’s enthusiasm for golf is also
cooling – the victim of economic
woes, a shrinking population and the
gradual relaxation of corporations’
grip over their employees’ leisure
time.
BLACKSTONE SET TO BUY OFFICE PARK
FOR £480M
Blackstone is in exclusive negotia-
tions to buy one of Britain’s largest
office parks for almost £500m
($773m) in its biggest UK real estate
investment for more than 18 months.
Chiswick Park, the 1.1m sq ft office
campus in west London, has come
ulations are being added and its atti-
tude towards business is still worrying-
ly schizophrenic. Yesterday’s speech on
growth by the Prime Minister was
meant to show that there was more to
the coalition’s economic plans than a
focus on balancing the books. It mere-
ly exposed gaping holes at the heart of
its vision and its continued determina-
tion to downplay the City’s role in cre-
ating wealth.
Cameron’s primary strategy is to
“actively get behind business.” That
means “being clear about which are
the growth industries and working
strategically to strengthen them”. Only
five industries are identified – phar-
ma, green energy, tourism, advanced
manufacturing and aerospace – and
described as “the industries of the
future.” It would be fantastic to see all
those areas grow, though it will be
tough to remain competitive in manu-
facturing. Yet Britain’s real powerhous-
es – the City, including financial,
professional and business services –
marketing, media, the creative indus-
Cost of snow
hitting home
UK ECONOMY
▲
BY JULIAN HARRIS
BRITAIN’S economy took a hammer-
ing from the winter freeze, with the
service sector contracting in
December and retailers being hit, it
was revealed yesterday.
The country’s largest sector experi-
enced its first decline for 20 months,
stalling the recovery. The business
activity index, compiled by Markit
and the Chartered Institute of
Purchasing and Supply (CIPS),
dropped to 49.7, down from 53 in
November – below the 50 signalling
contraction.
The news piled pressure on UK
authorities to be better prepared for
snow and severe weather.
“We are disappointed that the UK
still hasn’t learnt the lessons from
previous bad weather and that the
under offer from the US private equi-
ty group for £480m following a com-
petitive sales process before
Christmas. The price includes the
assumption of the debt that backs the
property.
OBAMA ASKS CONGRESS TO LIFT DEBT
LIMIT
The Obama administration has
requested approval from Congress for
an increase in the national debt limit
of the US, setting up a showdown
with newly empowered Republican
lawmakers and warning of “cata-
strophic economic consequences for
decades” if a deal is not reached. In a
letter to congressional leaders from
both parties, Tim Geithner, US
Treasury secretary, urged them to
move quickly to raise the debt ceiling
from its current level of $14,290bn
“well before the threat of default
becomes imminent”. The Treasury
estimates that the national debt will
hit its upper limit between March 31
and May 16.
tries, education and so on are not even
mentioned. Technology only gets a
small mention, with the gimmicky
plan to set up a new Tech City near the
Olympics.
Out of an 11-page speech, banks
(which pay more tax than any other
industry) are given one short para-
graph to inform them that the coali-
tion doesn’t believe the industry
should be shrunk. They should be
thankful for small mercies, but the
government is clearly more interested
in spin and talking about trendy or
politically-useful industries than dis-
passionately working out where
growth is going to come from.
The idea that we “are going to see
real changes in the way local
economies work” because of elected
mayors, a “network of technology and
innovation centres”, and “local enter-
prise partnerships – coalitions of busi-
ness, council and communities” is
laughable. These will, at most, have a
tiny impact. What is really needed is a
massive shift in incentives to set up
country yet again ground to a halt,”
said Federation of Small Businesses
(FSB) chairman John Walker.
While the government ordered a
review into the impact of the severe
weather, this was the third in three
years, the FSB said.
Companies usually prepare for and
adapt to inclement conditions, but
authorities are too often caught out,
Walker argued.
Small businesses even come to the
aid of local councils, Walker said,
while an FSB survey showed that 17
per cent of companies bought their
own supply of grit and salt.
Yet many retailers were severely hit
by the conditions, blaming reduced
sales on the coldest December since
1910, when records began.
High street giants Next, HMV and
Mothercare saw year on year sales
drop. Next suffered a 6.1 per cent
ASSET STRIP CLAIM OVER BUILDING
SOCIETY DEAL
Kent Reliance Building Society is in
danger of having its assets stripped by
an American buyout company, it was
claimed yesterday. Michael Laws, a 30-
year member of the society who is
fighting an attempt by JC Flowers to
take a stake, told a hearing at the
Financial Services Authority that the
two parties were “incompatible” bed-
fellows.
BRUSSELS PLAN TO STREAMLINE EU
TRADE IS UNWORKABLE, SAY CITY
LAWYERS
Plans to introduce a single European
contract law to replace domestic reg-
ulations would be expensive and dis-
ruptive to businesses, lawyers have
warned. The European Commission
is considering introducing measures
to improve cross-border trade
between consumers and businesses.
new firms, hire people and sell prod-
ucts – as well as a drastic shift in incen-
tives in the labour market.
One option would be to turn whole
regions into enterprise zones with zero
corporation tax and a right to opt out
of red tape. Instead, the latest hike in
national insurance and the banking
tax will destroy jobs. Yet the coalition
understands the fundamental truth of
supply-side economics and accepts
that lower tax rates creates jobs: its
Patent Box, which Cameron boasted
about, offers a 10 per cent tax rate on
patent income to encourage compa-
nies to experiment, innovate and
invest in the UK. So if tax cuts work
with patents, why not do the same in
other areas to boost enterprise?
And surely he cannot believe that he
will “make the next decade the most
dynamic and entrepreneurial in our
history”? More so even than during the
great industrial years of the 19th cen-
tury? All in all, not a great speech.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
TRANSPORT
British Airways lost £50m
CONSTRUCTION
suffered its first decline since February
drop in underlying sales in the 21
weeks to Christmas eve.
Mothercare’s results saw shares
drop 6.6 per cent yesterday.
“It looks to have been the snow
that caused the large decline,” said
George Buckley of Deutsche Bank. “In
the fifteen years that this survey has
GAZPROM “HELD BACK BY ITS COR-
RUPT NATURE”
Russia’s state energy giant, Gazprom,
is being held back from global expan-
sion by its “inefficient, politically-driv-
en and corrupt” nature, according to
leaked US diplomatic messages. John
Beyrle, the US ambassador to Moscow,
gave his opinion of the gas monopoly
in 2009, describing the company with
international ambitions as confused.
EBAY SALES ON MOBILE PHONES
TRIPLE TO $2BN
EBay's global sales made on mobile
devices have tripled to $2bn (£1.3bn),
with the UK leading international
markets. The online auction site said
the popularity of its apps for gadgets
such as the iPhone has demonstrated
that consumers “increasingly want to
be able to shop anytime, anyplace,
anywhere”. The website’s apps were
downloaded more than 30m times.
CITYA.M. 7 JANUARY 2011
NEWS | IN BRIEF
Morgan Stanley shifts execs
Investment bank Morgan Stanley has
moved Colm Kelleher, co-president of
institutional securities, to London in a
promotion giving him responsibility for
Europe, the Middle East and Asia exclud-
ing Japan. He joins Walid Chammah,
now chairman of Morgan Stanley
International. The move supports the
bank’s international growth push and
strengthens its emerging markets pres-
ence.
Brazil moves to curb the real
Brazil took another bold move yesterday
to curb its hard-charging currency by
making it more costly for banks to bet
the real will keep strengthening. The
central bank introduced a reserve
requirement on banks’ short positions in
US dollars – a bet the real will strength-
en versus the greenback – in hopes of
reducing speculative trading in the for-
eign exchange market that has pushed
the Brazilian currency to a two-year
high. The real weakened 0.66 per cent
after the measures were unveiled to
$1.686. It has gained about 13 per cent
since last May, and has been dubbed the
world’s most overvalued major currency.
SHOPS
Shop sales were down 4 per cent
SERVICES
contracted for the first time since Apr 09
been published, in only six previous
months have we witnessed such a
large decline as this.”
The weather could have a “bigger
impact” than in previous years, said
Neil Blake of the Ernst & Young Item
Club.
ECONOMICS: P14
SARA LEE LIKELY TO SPLIT INTO TWO
BUSINESSES
Sara Lee Corp. is moving ahead with
plans to split up its meats and coffee
businesses into two separate compa-
nies after it rejected Brazilian beef
processor JBS SA’s takeover offer last
month, people familiar with the mat-
ter said. JBS hasn't ruled out its interest
in buying the company, which has a
market capitalisation of about $11bn.
BORDERS IN TALKS WITH
RESTRUCTURING ADVISERS
As Borders Group Inc. asks publishers
for leniency on paying bills, the book-
store chain has been in discussions
with restructuring advisers about
ways to rework its debt-heavy balance
sheet, said people familiar with the
matter. Borders has been in talks
with Wall Street firms that have
worked on many high-profile bank-
ruptcies, they said.
CITYA.M. 7 JANUARY 2011
S&P toughens rating rules
BANKING
▲
BY ALISON LOCK
HALF the world’s biggest banks could
face a credit rating downgrade from
Standard & Poor’s, the US ratings
agency said yesterday as it announced
proposals to review the way it rates
the industry.
In a sign of the pressure on agen-
cies to respond to criticism that they
failed to flag up weaknesses in bank
balance sheets prior to the financial
crisis, S&P’s stringent new criteria
would consider not only a bank’s
EU proposes
overhaul to
stop bailouts
EU REGULATION
▲
BY JULIET SAMUEL
THE EU released a set of proposals yes-
terday that would give regulators the
power to take over failing banks and
impose haircuts on senior bondhold-
ers.
The European Commission, headed
by Michel Barnier, published the 100-
page document, which is to form the
basis for consultation submissions
until 3 March.
The document outlines plans to cre-
ate a “resolution authority” for nation-
al regulators, giving them the power
to assume control of systemically
important financial institutions that
are insolvent or failing to comply with
the Basel III capital requirements.
Such a rule would enable regulators
such as the Financial Services
Authority (FSA) to appoint a regulator
which would take over the board’s
responsibilities with a mandate to pro-
tect the stability of the financial sys-
tem.
In order to achieve stability, the reg-
*Exclusions apply, see instore for details.
stand-alone credit profile but also
that of its parent group or govern-
ment.
The criteria, a “significant change”
from current rating methodology,
would also see greater scrutiny of
retained earnings and their capacity
to cover anticipated losses, and
greater emphasis on risks related to
complex off-balance-sheet derivatives.
“We are now emphasising structur-
al changes in the economy, a bank’s
business position, and its financial
strength as key drivers of changes in
creditworthiness,” it said.
ulator could be able “to write down by
a discretionary amount or convert to
an equity claim, all senior debt
deemed necessary”.
The proposal is intended to ensure
that taxpayers do not have to assume
the cost of expensive bailouts for col-
lapsing banks that are “too big to fail”.
It would mean that senior bond-
holders, as well as shareholders, could
see their investment wiped out in the
event of a bankrupty.
In order to pay for the cost of wind-
ing up a failing bank, the document
also proposes the creation of national
deposit guarantee schemes. These
would be funded by the banking
industry to “ensure that for both reso-
lution and deposit guarantee there are
robust arrangements that impose the
costs of any intervention on the bank-
ing sector and not on taxpayers”.
In addition to unwinding the bank,
the document also suggests that the
resolution authority has the ability to
transfer assets from a failing institu-
tion to others willing and able to take
on the risk.
In a trial assessment of 138 banks,
more than 40 per cent saw their
stand-alone credit rating lose one
notch or more. “For roughly half of
the largest banks, the results show
that the proposed criteria would
result in downgrades,” it said.
Fewer than a fifth of banks cur-
rently rated A-1 or higher would see a
downgrade while only about 15 per
cent of long-term issuer credit ratings
were significantly affected.
The new rules would apply to
retail, commercial and corporate and
investment banks.
EUROPEAN PROPOSALS: THE BASICS
● Purpose of the regulations
The European Commission (EC) has
released a consultation document laying
out a framework for regulations intended
to prevent taxpayers having to bear the
huge cost of bailouts when systemically
important credit institutions go bust. The
rules would apply to all financial firms,
however, and not just those currently
deemed “too big to fail”.
● Timeline
Those concerned have until 3 March to
submit responses to the consultation. The
new regulations will come into effect in
2013 and the document attempts to reas-
sure current bondholders by stating that
any debt issued before then will not be
affected. However, if an institution cannot
pay back its debts and they are restruc-
tured, the new rules could apply.
● Resolution authority
The centre-piece of the new regulations
would be a “resolution authority” for
national regulators. This would give bodies
like the UK’s Financial Services Authority
(FSA) the power to take over insolvent
institutions that threaten the financial sys-
tem and to either restore them to stability
or wind them down in an orderly manner.
The aim is to avoid the panic that followed
the sudden default of Lehman Brothers in
October 2008.
● Funding the wind-down
Since winding down a huge institution can
incur considerable costs, the proposals also
suggest the creation of national deposit
guarantee schemes: a fund to meet these
costs. The EC suggests that the scheme is
funded by a toll on banks so that taxpayers
Wheatley leads shortlist
for consumer watchdog
▲
REGULATION
MARTIN Wheatley is considered fron-
trunner in the list of candidates to
lead the new UK consumer protection
agency to be established next year.
Wheatley, the current head of Hong
Kong’s financial regulator, is consid-
ered a leading candidate to head the
new Consumer Protection and
Markets Authority, which will be spun
out from the Financial Services
do not have to pay for it.
● Imposing losses on bondholders
The resolution authority would also give
regulators the power to impose losses on
bondholders when a bank collapses.
Currently, although shareholders can lose
everything, bondholders very rarely suffer
a wipe-out. Under these proposals, a regu-
lator in charge of an insolvent bank could
decide that even senior bondholders must
be forced to take losses or that their bonds
be converted into equity.
● Transferring assets
A regulator winding down a bank could
also be able to transfer its assets to other
willing institutions that she deems able to
take on the risk.
● Prevention of certain activities
In a more contraversial suggestion, the
proposals also state that regulators should
be able to force a financial institution to
stop engaging in certain activities that they
think are too risky.
● Concerns
The EC’s struggle will be to craft rules that
enable regulators to effectively prevent
bailouts, but to avoid making regulators
overly powerful for fear of irresponsible use
of the new powers.
● European Banking Authority
It is not yet clear how the rules will relate
to the newly established European Banking
Authority, the successor to the current
Committee of European Banking
Supervisors (CEBS). The EBA could be
responsible for overseeing implementation
of the rules in European nations.
News 3
Authority when it is broken up in
2012. A final decision on the chosen
head is expected within weeks, while
Wheatley plans to leave his post in June.
Martin Wheatley is
currently the head of
the Hong Kong
Securities and Futures
Commission
Tchenguiz trust to
cede Peverel stake
▲
PROPERTY
THE Tchenguiz family trust is finalis-
ing a debt-for-equity swap with Bank
of America Merrill Lynch that will see
the bank take a major stake in UK
property management firm Peverel.
The US lender, which owns an esti-
mated £100m of Peverel debt, may
acquire a controlling stake. The stake
size and deal structure have been
under discussion for more than a
month, sources told City A.M. The move
is designed to reduce Peverel’s interest
payments, which are barely covered by
its annual £11m pre-tax profit.
Tesco names
incoming UK team
▲
RETAIL
RETAIL giant Tesco yesterday named
the eight-man team to lead its UK
operation from March, reporting to
new UK chief executive, Richard
Brasher.
Noel Robbins becomes chief operat-
ing officer, alongside new commer-
cial directors Per Bank, and Laura
Wade-Gery. Kevin Grace becomes
property director; David North will
become corporate affairs director and
Judith Nelson personnel director.
UK finance director Mike Iddon and
marketing director Carolyn Bradley
will stay in their current posts.
 4 News CITYA.M. 7 JANUARY 2011

Greater disclosure of risk ANALYSIS l Gobal investment banking fee trend (US$m)
140,000
$

needed, says governance body 120,000

Audit committee reports should companies don’t fail because the

▲

REGULATION
BY ALISON LOCK
DIRECTORS should be clearer about
the risks facing their business in
annual reports, the UK’s governance
watchdog said today.
Statements from chairmen and
chief executives should be balanced
and discuss the biggest risks to the
business in more detail, according to
new recommendations from the
Financial Reporting Council (FRC).
also disclose anything in the annual
report that external auditors thought
contradicted financial statements or
their audit findings, the FRC said.
FRC director of corporate reporting
Ian Wright told City A.M. the recom-
mendations would improve discus-
sion about risk after the credit
crunch exposed banks’ failure to
manage the risks they faced.
“Its not just banks that fail,” he said.
“We’re trying to make sure that good
board didn’t consider the right risks.” 100,000
But he admitted the FRC had no
evidence that companies had failed
because of poor information flow
between auditor committees and
shareholders. Post crisis
The recommendations will worry 80,000
businesses that face growing corpo-
rate governance requirements from
regulators. Wright said the proposals
would not force companies to spend
more time on corporate reporting. 60,000

40,000

Biggest ever

Source: Thomson Reuters

20,000

SALE! Year

Asia bank fees

02 03 04 05 06 07 08 09 10

a t,
trump Europe
ry se
eve e , were up 10.2 per cent by volume, by
▲

BANKING

r o u t BY RICHARD PARTINGTON value the gain was only 0.4 per cent,

ry with smaller transactions dominat-

%F eve
ASIAN financial services have contin- ing the dealflow.

y . ued to grow on the global stage, In Europe the difference was even

0 ry da showing a 22.2 per cent lift in invest- more marked, with deals up 8.9 per

3
ment banking fees taken in the cent in volume but down 21.2 per

up ve
Fe
region over the last year, as pay- cent in value.
ments to European banks fell. US banks topped the review,

O Companies in Asia surged to con- charging $43bn between them and

to
tribute £12.8bn last year, as fees
taken globally by investment banks
jumped nine per cent to $84bn
(£54bn) in 2010.
European banks earned 12.3 per
cent less for their service than in
2009, though fees still totalled
$22.7bn, according to data provided
by Thomson Reuters.
The payments were made by firms
to investment banks for financial
services including underwriting cap-
ENDS ital markets deals and advising on
mergers and acquisitions.
TUESDAY Though deals across the market
registering a 21.9 per cent increase
on the previous year.
Among the top fee payers were US
government-backed banks, con-
tributing a total of $2.52bn.
State-backed mortgage lender
Frannie Mae spent $884m on invest-
ment banking services last year, top-
ping rankings compiled by data
provider Dealogic.
Government-sponsored home
mortgage provider Freddie Mac
placed second, paying $656m, and
bailed-out insurer AIG placed third,
paying $582m.

11 JANUARY
London wins as the location of
choice for company flotations
For travel from ed by London, which saw €3bn
▲

BANKING
2 February to LONDON was at the centre of a
European upsurge in initial public
13 July 2011 offerings (IPOs) during the final quar-
ter of last year, according to data com-
piled by PricewaterhouseCoopers.
The capital led the number of
Available to book now until midnight on 11 January 2011. Offer valid for travel from 2 February to 13 July 2011 transactions by volume, securing 49
inclusive. Prices, although discounted, may rise during the promotional period. Variable charges for hold baggage of the 130 European listings in the
apply and some payment methods attract a handling fee. See website for details. fourth quarter.
The value of IPOs was also dominat-
(£2.5bn) of the money raised for the
period. Its most valuable flotation
was that of media company Mail.ru
Group, which generated €669m.
European exchanges attracted just
over €10bn of IPOs compared with
€2.5bn in the previous quarter.
Yet Europe remained behind global-
ly, placing behind the US which raised
€30bn and Greater China, which
raised €98bn.
CITYA.M. 7 JANUARY 2011
LinkedIn eyes
public listing
plan for 2011
TECHNOLOGY
▲
BY NADIA DAMOUNI
LINKEDIN, the social networking site
for professionals, plans to go public in
2011 and has selected its financial
underwriters, according to sources
familiar with the situation.
Morgan Stanley, Bank of America
and JPMorgan are among the book
runners. Bankers made their pitches
to the privately-held company in
November.
“An IPO is just one of many tactics
that we could consider,” a spokesman
for LinkedIn said yesterday. He
declined further comment.
Internet companies such as
LinkedIn and Zynga, a popular maker
of online social games, are consider-
ing offerings well ahead of a potential
IPO of Facebook.
▲
Facebook founder Mark Zuckerberg will be
pleased by the demand for shares
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“Some of these companies want to
go public because they want to beat
Facebook and others [to get to an IPO
first],” said one of the sources.
“If Facebook went public before
LinkedIn, do you think anyone would
pay that much attention to
LinkedIn?”
Facebook is not expected to file for
a public offering until late 2012,
Facebook board member Peter Thiel
said in September.
But that could change. Regulators
are scrutinising a $500m (£323.6m)
investment and a commitment to
raise at least $1bn more in Facebook
this week by Goldman Sachs and
Digital Sky Technologies, one of the
sources said. LinkedIn is hoping to
attract investors on its reputation as
one of the web’s fastest growing
social network sites.
Investors rush to buy Facebook shares
TECHNOLOGY
BY JULIET SAMUEL AND DAVID HELLIER
GOLDMAN Sachs stopped taking
orders for shares in Facebook yesterday,
with analysts saying the firm was inun-
dated with offers from investors want-
ing a piece of the action.
Some said that would-be investors
were prepared to subscribe for $3bn
(£1.9m) of equity in the social network-
ing site, twice as much as is likely to be
required.
Facebook is only committed to tak-
ing $500m of investment, but is expect-
ed to take up to $1.5bn.
Because of the high level of support,
Goldman will have to choose how
much of the stock investors will each
receive, with many allocations expect-
ed to be significantly downsized from
CITY VIEWS: HAVE YOU USED LINKEDIN?
THOMAS LANE | AON
“No, I haven’t. I don’t see any real need to network
online – I’d rather meet clients in person.”
GRANT MORROW | JUBILEE INSURANCE
“Yes, I have. I use LinkedIn to keep in touch
with past clients and colleagues.”
NICK HOCKING | PRICE FORBES
"I signed up a while ago but haven’t logged on
recently. If you’re not looking to move jobs,
LinkedIn isn’t that useful.”
DIPO AJENIFUJA | MANAGEMENT
“Yes. I think LinkedIn is a brilliant
tool, especially from a recruitment
point of view.”
the amounts requested.
The massive interest in the invest-
ment, reminiscent of the days of the
technology bubble of the late 1990s,
comes despite little information being
made available about how Facebook
generates its revenue.
Investors were given an offer docu-
ment providing some of the most
detailed financial information to come
to light so far about Facebook, showing
it earned $355m in net income in the
first nine months of 2010 on revenue
of $1.2bn.
Goldman Sachs declined to com-
ment last night, citing US regulations.
Investors are being asked to sub-
scribe a minimum of $2m and commit
to not selling shares until 2013.
However, hundreds of Goldman part-
ners are able to buy shares without
Technology News 5
LINKEDIN IN NUMBERS
Interviews by Lottie Mungavin
1sec Every second a new
member joins LinkedIn
7.3mins Average amount of time
spent by global users on
the LinkedIn website
38% Percentage of UK
LinkedIn members logging
on at work
67% Percentage of global
LinkedIn traffic generated
by “passers-by”, who visit
the site once a month
£50K+ Salary of the average UK
LinkedIn member
500, Average number of daily
visitors to the LinkedIn
website in the UK
000
4m Number of LinkedIn
members in the UK
85m Number of LinkedIn
members in the world
being subject to the $2m minimum. parator for Facebook’s value would be
Goldman has been criticised by Chinese social networking site
some for being riddled with conflicts Tencent, which has a market capitalisa-
of interest on the deal. It is both receiv- tion of HK$326bn (£27bn) on the Hong
ing commission from Facebook for Kong stock exchange.
raising these initial funds while put- Would-be investors in Facebook
ting itself in prime position to act as an through Goldman’s special scheme,
adviser on any potential money-spin- which include hedge funds, private
ning flotation, slated for next year. equity groups as well as Goldman asso-
There are also some suggestions that ciates, received an invitation to bid for
Goldman’s valuation of the company, stock at the bank’s $50bn valuation.
at $50bn, is too high. It was phrased as follows: “For confi-
Dharmash Mistry, a partner at dentiality reasons, I am unable to tell
European venture capital firm you the name of the company unless
Balderton Capital and an investor in you agree not to use such information
several early-stage technology firms, other than in connection with your
said: “Are expectations ahead of reali- evaluation of the investment opportu-
ty? It’s a question-mark as to whether nity. All I can tell you is that it is a pri-
it’s real and all the theory is going to vate company, but that its stock trades
play out or if it’s a bit of a bubble.” in a limited manner on certain private
He added that an appropriate com- markets.”
LONDON BED COMPANY
selfridges.com
 6 Consumer Electronics Show
Apple opens doors
to laptop app shop
▲
TECHNOLOGY
WHILE most of the electronics
world’s eyes were turned towards the
Consumer Electronics Show in Las
Vegas, Apple – which refuses to
exhibit at the event – quietly opened
the doors to the laptop version of its
app Store.
Around 1,000 apps were immedi-
ately available for download on its
Mac range, with millions more set to
CITYA.M. 7 JANUARY 2011
Microsoft boss
Steve Ballmer
annouced a tie-up
with ARM, headed
by Warren East
(inset)
Picture:
REUTERS
be added over the coming months.
Angry Birds was instantly catapult-
ed to the top of the chart as users
clamoured to destroy green pigs on
yet another device.
Apple boss Steve Jobs said: “Users are
going to love this innovative new way to
discover and buy their favourite apps.”
At present analysts estimate
Apple’s app store contributes just one
per cent of its gross profit – roughly
$198m (£128.1m).
Arm surges
on Microsoft
partnership
also propped up by talk that Intel was
2011
INTERNATIONAL
CONSUMER considering mounting a takeover
ELECTRONICS SHOW attempt, although analysts thought
this unlikely.
BY STEVE DINNEEN, LAS VEGAS
•Separately, Microsoft announced it
ARM Holdings was the stand out win- has smashed forecasts for sales of its
ner at the Consumer Electronics interactive Xbox accessory Kinect.
Show yesterday, after Microsoft Ballmer’s firm had expected to shift
announced its processors would be 5m units over the Christmas period
used in a new, low-powered version of but instead sold 8m.
the Windows operating system. Much of his speech in Las Vegas yes-
Microsoft signalled it will work terday was dedicated to announcing
with UK-based ARM on the next ver- new ways users would be able to
sion of its platform in a bid to gain interact with the Xbox and other
traction in the next generation of Windows software using the plat-
mobile devices. form.
ARM has already raced ahead of He demonstrated an advanced
established rival Intel to corner the “avatar”, a computer generated char-
market in low power-usage chips for acter that is able to recognise facial
devices such as tablet computers and expressions.
smartphones, but has been unable to
break into the laptop and desktop ANALYSIS l ARM
markets so far. 500 p 482.00
The tie-in will enable Microsoft to 6 Jan
offer a full range of devices including 460
tablet PCs, boosting the appeal of its
mobile operating system, which chief 420
executive Steve Ballmer stressed is key
to the firm’s growth plans. 380
ARM’s shares gained 2.25 per cent
to close at 482p, having added 7.7 per 340
cent on Wednesday in anticipation of
the announcment. The shares were 11 Oct 29 Oct 18 Nov 8 Dec 30 Dec
ANALYST VIEWS: HOW IMPORTANT FOR ARM
IS THE TIE-IN WITH MICROSOFT? Interviews by Marion Dakers
VIJAY ANAND | ESPIRITO SANTO INVESTMENT BANK
“ It will give it a foothold in the PC and laptop mar-
ket that until now has been dominated by the Intel and
”
Microsoft partnership, although this won't make a difference
to earnings until the next version of Windows. ‘Sell’.
RICHARD HOLWAY | TECHMARKETVIEWS
“ The news shows that ARM is one of those compa-
nies that has managed in the last couple of years to bring all
”
its stars into alignment. It is the leader in chips for most new
devices. Intel should be shaking in its boots.
CITYA.M. 7 JANUARY 2011
TABLET WARS
Samsung and Panasonic hope to take a bite out of Apple
with their iPad and iPod rivals, finds Steve Dinneen
SAMSUNG and Panasonic upped the
ante in their battle with Apple
yesterday, both releasing products
that will directly compete with
Steve Jobs' core stable of products.
Samsung, the firm that has come
closest to offering a viable
challenge in the tablet wars with its
Galaxy Tab, unveiled a slick new
device designed to compete with
Apple's sleeper success, the iPod
Touch.
The Galaxy Player (left) is the first
non-smartphone to run Google’s
Android operating system. The
range.
In a bid to attract users to buy mul-
wi-fi device will tiple Samsung devices, the Korean
allow users firm has also launched a Media Hub
to access a that will allow easy syncing
database between units.
of apps in City A.M. got a sneak preview of
the same the new products ahead of their
way iPod official launch at the Consumer
Touch users Electronics show in Las Vegas today.
can down- Samsung has already chipped away
load from the at Apple’s dominance of the tablet
Apple Store. market with its Galaxy Tab, which has
Samsung shifted an impressive 1.5m units since
also its release. The firm announced it will
announced a begin shipping wi-fi only
new phone it versions of the device in the first
hopes will help quarter of 2011 but did not give
knock the pricing information.
iPhone 4 from its Panasonic also announced its
perch. The firm arrival in the tablet market yesterday
says the phone is with its Viera Tablet (above right).
the thinnest in its The device is designed to interact
stable and will sit alongside the with its new range of smart TVs, as
Google Nexus S – which it also well as access the internet. The device
manufactures – at the top of its will be available later this year.
Consumer Electronics Show
SONY DISMISSES DOUBTS OVER
THE FUTURE OF 3D TELEVISION
SONY was among a raft of top elec-
tronics firms to place 3D technology
at the forefront of its growth plans
at the Consumer Electronics Show in
Las Vegas yesterday, writes Steve
Dinneen.
The Japanese firm showcased its
new flagship range of 3D TVs, prom-
ising the format will change the way
people watch video content.
Chairman and president Sir
Howard Stringer said his firm will
“aggressively” pursue 3D, dismissing
doubts about the long-term future of
the format.
He said: “People greeted colour
and HD with scepticism. We will pre-
vail with this technology.”
Sony Electronics president Phil
Molyneux added: “Sony is and will
continue to be the leader in 3D TV.
We will bring an even greater
amount of content to our range of
connected TVs.” In all, 27 new Bravia
TVs will launch in 2011.
The firm also unveiled 3D cam-
corders and digital cameras it says
will help bring the format to the
mainstream.
Panasonic also placed 3D at the
heart of its new product range. The
firm predicts a staggering 32 per
cent of TV sales will be in 3D by 2014,
and launched five new TVs offering
the platform.
Panasonic consumer electronics
president Shiro Kitajima told the
Consumer Electronics show audi-
ence 3D will change the way we
watch TV. He said: “At one time you
sat in front of your TV but it is
becoming a much more interactive
experience.
Both Panasonic and Samsung have
also developed a new range of light-
weight 3D glasses they hope will
help remove the stigma of wearing
bulky eyewear to enjoy TV.
7
AT&T launches
12 new Google
smartphones
2011
INTERNATIONAL
CONSUMER
ELECTRONICS SHOW
BY STEVE DINNEEN, LAS VEGAS
GOOGLE won a major vote of confi-
dence in its mobile phone platform
Android yesterday, after America’s
second largest network said it would
launch 12 new handsets which run
the software.
AT&T announced four times as
many smartphones as it did this time
a year ago, backed heavily by Google
software, highlighting the urgency of
its quest to lessen its dependence on
Apple’s iPhone.
The mobile operator, which has
been the exclusive US provider for the
iPhone since 2007, is expected to face
tough competition early this year
when bigger rival Verizon Wireless
starts selling the smash-hit Apple
handset.
AT&T executives said yesterday at
the Consumer Electronics Show that
it would introduce 20 high-speed
smartphone models in 2011, includ-
ing a dozen Google Android devices.
The first of these phones will come
from from Motorola, HTC and
Samsung Electronics.
The Number Two US mobile
provider also said it would sell a
tablet computer from Motorola, but
declined to give further details.
 8 Consumer News
Clinton Cards
in profit alert
If
RETAIL
CLINTON Cards issued a profit warn-
ing yesterday after a sales drop.
In the five weeks to 1 January the
company suffered a two per cent fall
in its like-for-like sales. The greeting
card retailer’s overall like-for-like sales
in the second half of 2010 dropped by
2.9 per cent compared to a year ago.
lif e
Chairman Don Lewin said the com-
pany is trying to turn things around
with a “rebranding and redesign” of
its stores, as well as a new website
which will be launched “soon”.
The retailer also blamed the snow
and ice for the fall in sales.
g i ve s
Chief executive Steve Lewis saw a late rush on his stores
yo u Majestic sees
wine sales up
in festive lift
▲
RETAIL
BY JOHN DUNNE
MAJESTIC Wine has bucked the trend
n s
of retailers turning in poor results fig-
o
ures over the snow-hit Christmas peri-
lem
od with a 6.4 per cent sales rise.
Chief executive Steve Lewis said the
weather had initially put customers
off venturing out but then there had
been a rush.
The figures for the nine weeks to 3
January followed a year of expansion
for the company.
Majestic is delaying the VAT rise
until the end of this month in anoth-
er attempt to help reel in customers
in a month where alcohol sales are
traditionally low after the festive
binge.
Lewis said: “We are pleased with
the figures. After a slow start things
came good. We are opening new
shops this year and are ambitious
about the business.
“We will be debt neutral by the end
McBride warns
of tough year
▲
RETAIL
OWN brand producer of shampoo
McBride saw its shares dive yesterday
after the company warned its full-
year performance may be at the lower
end of expectations due to a tough
retail outlook, especially in the UK.
In a trading update for the six
months to 31 December, McBride said
revenues had risen two per cent,
largely driven by growth in central
and eastern Europe.
“The board believes that the full-
year outlook may be towards the
lower end of its expectations,” the
company said.
Picture: WWW.FOVEA.TV
of the financial year.”
The retailer, which has 160 shops,
is planning to open 12 new shops in
2011.
Comparable sales during the half-
year rose 7.6 per cent, while interim
pre-tax profits increased by 20 per
cent to £7.3m.
In a bid to boost sales, the company
reduced the number of bottles
required for a discount from 12 to six
in September 2009 to reflect the UK’s
mood of austerity.
ANALYSIS l Majestic Wine
400 p
399.00
5 Jan
380
360
340
320
11 Oct 29 Oct 18 Nov 8 Dec 30 Dec
CITYA.M. 7 JANUARY 2011 Consumer News 9

Cineworld boosted by string

of blockbuster film smashes
market expectations as the negative sales as potential cinema-goers strug-

▲
LEISURE
BY JOHN DUNNE
CINEMA chain Cineworld said 2010
sales rose 4.7 per cent as a series of
blockbusters packed its venues.
The Twilight Saga: Eclipse,
Inception and Harry Potter and the
Deathly Hallows (part one) were
among the big hits which drove sales.
The company said it expected full-
Harry Potter and the Deathly Hallows has proved a money-spinner for Cineworld year profit to be within the range of
impact on sales due to harsh winter
was offset by a strong performance
from the rest of the year.
“The year saw Avatar and Toy Story
3 in 3D become the highest and sec-
ond highest grossing films respective-
ly in UK box office terms,” the
company said in a statement.
The company, which operates 801
screens from 78 sites, said the poor
weather last month hurt box office
gled to get out but overall the trend
was positive.
For the 52 weeks to 30 December
the company’s box office sales rose
4.2 per cent, while retail revenue fell
1.5 per cent.
Cineworld also said it was confi-
dent of its performance in the year
ahead, supported by an attractive
film release programme for 2011,
with more 3D films in the pipeline.

Mothercare
sales hit by
bad weather
▲

RETAIL strong start to the quarter, sales were

BY JOHN DUNNE
MOTHERCARE has issued a profit
warning after the winter weather
dented its performance over the
Christmas period.
Like-for-like sales in the last three
months of 2010 fell 5.8 per cent at the
mother and baby retailer as the snow
and ice took its toll, it said in a trad-
ing statement yesterday.
Toy sales were hardest hit after the
firm cut off Christmas online orders
early to ensure delivery.
The retailer said the poor weather
had badly hit its out-of-town shop-
ping centres.
It warned that annual gross profits
from the UK would be lower than the
£41m previously stated, adding that
the consumer environment
remained “difficult”.
However, the firm has continued to
see strong growth in its international
business where sales grew by 17.6 per
cent between September and January
compared with the same period a
year earlier.
Ben Gordon, Mothercare’s chief
executive, said: “In the UK, after a
impacted significantly by the adverse
winter weather conditions.”
Keith Bowman, equity analyst at
Hargreaves Lansdown said: “Despite
growing international sales, an
already challenged UK business now
forms another weather victim.
“The group’s shift towards out-of-
town premises appears to have
worked against it, while like rival
Next, the fragilities of time critical
direct online Christmas sales have
been exposed.” Other retailers,
including Next and HMV, blamed
poor weather on their disappointing
sales figures when they updated the
market earlier in the week.
ANALYSIS l Mothercare
640 p 565.00
6 Jan
600
560
520
480
11 Oct 29 Oct 18 Nov 8 Dec 30 Dec

Asda vows to Theo Fennell hit

cost 10pc less by travel chaos
▲

RETAIL
ASDA has guaranteed to sell 15,000
grocery products at least 10 per cent
cheaper than all of its big rivals.
The UK’s second largest chain
behind Tesco is promising voucher
refunds if customers are charged
more.
Asda chief executive Andy Clarke
said: “The Asda Price Guarantee cuts
through all the phoney claims and
headline numbers, and shows when
it comes to saving people money, we
mean business this year.”
Asda is owned by the US retail
giant Walmart.
RETAIL
AFFLUENT overseas shoppers were cut
off from London by travel chaos, jew-
eller Theo Fennell said as it warned
on profits yesterday.
Fennell saw like-for-like sales drop
seven per cent in December. Sales on
expensive pieces suffered as interna-
tional customers stayed away, the
firm said. “The adverse weather con-
ditions significantly reduced footfall
to the stores from high-end UK clients
and international clients.”
Theo Fennell had enjoyed a 22 per
cent surge in like-for-like retail sales
in the first week of December.
 The Capitalist
10 CITYA.M. 7 JANUARY 2011
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

THE NERD’S “For

REVENGE:
ONLY ELITES
NEED APPLY
AN investment banker’s quandary: how
do you get your favourite clients to invest
a large chunk of cash in a private firm on
the basis of little financial information
and a huge valuation?
If anyone knows, it’s those ex-Ivy
Leaguers at Goldman. Surely practised in
the art of sending out intriguing invita-
tions to events for secret societies,
Goldman bankers sent out a 400-word
invitation to tempt investors toward a
$2m minimum investment in Facebook.
“When you have the chance, I wanted
to find a time to discuss a highly confiden-
tial and time sensitive investment oppor-
tunity in a private company,” says the
mysterious missive.
“For confidentiality reasons, I am
unable to tell you the name of the compa-
ny,” it teases. It only needed a wax seal.
Of course, the presentation is particu-
larly fitting if you believe the story of the
recent movie The Social Network, a semi-
fictionalised account of Facebook founder
Mark Zuckerberg’s brief spell at Harvard
before he dropped out.
The film supposes that he created the
website in order to curry favour with the
privileged kids who populate Harvard’s
Justin Timberlake (r) and Jesse Eisenberg play lead roles in The Social Network
exclusive “Final Clubs”, party clubs
housed in mansions.
Now, it seems, Facebook equity is itself
the grand prize open only to a select few.
The geek gets the last laugh.
FINE
RUN OUT OF TOWN In a review of last year’s investment
England cricket fans might have had a opportunities, Robin Boyle, managing
merry time yesterday, as the national
team streaked ahead – and is likely to
clinch an Ashes victory today – but bookie
Sporting Index wasn’t quite so jubilant.
With the original market in favour of
Australia at 90-130 runs, those Barmy
Army punters who bought in at £10 a run
came away with a cool £9,420 by the end
of the day’s exertions, as England soared
confidentiality
reasons,”
reads the
Goldman note,
“I am unable
to tell you the
name of the
company.”
to 852 runs ahead of the Aussies.
As a spokesman for the bookie sum-
marised it: “A severe case of the runs at
Sporting Index.”
WINES
director of investment company Athelney
Trust, has highlighted a particularly good
bet: “The value of investment-grade Claret
rose 32 per cent on the back of demand
from Asia,” he wrote in his summary, “but
wine has a great advantage over all other
types of investment in that winners and
losers may buy the stuff – the former to
celebrate, the latter to commiserate.”
As for stock-picking global-
ly, Boyle insists that not even
the psychic Paul the Octopus,
who so mysteriously predicted
the outcome of many a World
Cup match before he died,
would have had trouble in 2010,
given the backwards progress in
fashionable markets like China and
Brazil. An unfortunate way to loose
a few million squid.
ANT ON DECK
Shoppers at Land Securities’ One
New Change – the City’s only seven-
day mall – might have been bemused to
come across annoyingly chirpy enter-
tainment duo Ant and Dec on the roof
terrace yesterday. It seems the cheerful
pair were busy filming for Britain’s Got
Talent. The Capitalist has never been able
to remember which of the two boyish pre-
senters is which, but the important mat-
ter was that they both seemed to fit
comfortably under one Union Jack
umbrella.
CITYA.M. 7 JANUARY 2011
Mouchel pans
Costain’s new
takeover bid
▲
M&A
BY MARION DAKERS
CONSTRUCTION firm Costain made
an increased all-share offer for strug-
gling business services group
Mouchel yesterday, which valued the
firm at around £150m, excluding its
near-£100m debts.
Mouchel, which acts as a consult-
ant on infrastructure projects, reject-
ed the offer yesterday afternoon,
claiming that the bid significantly
undervalued the business.
Costain said it would offer 0.5947
new shares for each Mouchel share.
The offer values each Mouchel share
at about 135p per share, based on
Wednesday’s closing price.
Costain said Mouchel’s refusal
“denies its shareholders the opportu-
nity to have a major stake in a well
capitalised, financially efficient,
enlarged business, with a clear strat-
egy for future profitable growth”.
In December, Mouchel rejected an
approach from Costain that valued
the firm at £119m, two weeks after
Mouchel’s lenders hired Deloitte to
review the business after peers
Connaught and Rok fell into admin-
istration.
Execution Noble analyst David
Brockton was not convinced by the
new offer, saying in a note that the
all-share bid represents a retrograde
step for Mouchel shareholders.
“Assuming Mouchel can successfully
refinance its debt we would favour
its prospects as a stand-alone entity
versus the current revised offer from
Costain,” he added.
Mouchel was courted by support
services rival VT Group, which
walked away last March after offer-
ing £330m.
Meanwhile, Costain said in a pre-
close trading update that it has an
order book of £2.4bn, compared with
£2.6bn at the end of 2009. It said
annual results in March are set to be
in line with the board’s expectations.
Shares in Mouchel closed up 18.6
per cent at 127.75p yesterday. Costain
shares lost 1.76 per cent yesterday to
close at 223p.
Costain, under chairman David Allvey, has made a second bid for rival Mouchel
DAVID CURRIE PartyGaming, before Investec quit the
job in 2005 amid reports about the
INVESTEC questionable legality of online gam-
bling in the US – a controversy that
continues to rumble on.
He is not to be confused with David
Currie, chief executive of private equi-
ty at Standard Life Investments.
Also working on the Investec team
COSTAIN hired Investec to fight its are Charles Batten and James Rudd.
corner during the protracted battle to Batten joined the firm in 2009 from
take over Mouchel, with head of Dresdner Kleinwort, and recently
investment banking David Currie lead- worked as joint adviser to private
ing the team. equity firm Cinven during its takeover
Currie, a qualified engineer, has of water meter company Spice.
been with Investec since 1993. He has Rudd worked with KiFin during its
experience in private equity, flotations £84.5m cash takeover bid for proper-
and M&A, and is also currently advis- ty company Minerva in 2009.
ing Irish convenience food maker RBS Hoare Govett is advising
Greencore as it works towards merg- Mouchel, led by Neil Collingridge, Sara
ing with Northern Foods. Hale, Stephen Bowler and John
He was part of the team advising MacGowan.
News 11
Rolls-Royce is
boosted by BA
engine order
AVIATION
▲
ROLLS-ROYCE enjoyed a boost to its
shares yesterday after signing a £3.2bn
contract with British Airways for its
Trent 900 and Trent 1000 engines.
Confirmation of the deal, which was
first mooted in 2007, will allow Rolls-
Royce to book the orders on its balance
sheet.
Rolls-Royce chief executive Sir John
Rose said: “We are pleased that British
Airways continues to put its trust in
our world-class Trent engine technolo-
gy and service provision.”
Rolls-Royce shares gained more than
two per cent following the announce-
ment, and closed up 0.76 per cent at
659p, outperforming a sluggish FTSE
100.
The stock took a battering in
November when a Qantas flight was
forced into an emergency landing after
a Rolls-Royce Trent 900 engine failed.
“Today it takes on perhaps dispropor-
tionate significance because having
British Airways sign up for Rolls-Royce
Trent 900 engines for its A380s after
what happened with Qantas is really
rather reassuring,” said Sandy Morris,
an analyst at RBS.
•Airlines are staying away from fur-
ther hedges on jet fuel purchases, bet-
ting that a recent surge in oil prices to
two-year highs will slow, according to
figures from Reuters.
 12 News
Details of probe
into Anglo Irish
bank revealed
by Eire officials
▲
EUROZONE CRISIS
IRISH prosecutors will take some time
to determine any charges arising from
a long-running fraud investigation
into nationalised lender Anglo Irish
Bank, Ireland’s director of corporate
enforcement said yesterday.
The Office of the Director of
Corporate Enforcement (ODCE) is
probing events leading up to the
nationalisation of Ireland’s third-
biggest bank in early 2009.
However with one file and almost
4,000 pages of documents any deci-
sion on charges is some time away.
The ODCE said its reports relate to
the provision of a loan by Anglo to one
of its directors, the non-disclosure of
certain directors’ loans, the provision
to a number of persons in 2008 of
financial assistance for the purchase
of its shares and the communication
of possible false or misleading infor-
mation in public statements.
CHINA TO BUY €6BN SPANISH DEBT
CHINESE vice premier Li Keqiang has said his country is willing to buy about €6bn
(£5.1bn) of Spain’s public debt. Li said at a meeting that China was willing to buy as
much Spanish public debt as its Greek and Portuguese debt holdings combined. They
said that added up to about €6bn in Spanish government bonds. Picture: REUTERS
Hermes makes gain
in LVMH bid defence
RETAIL
▲
BY HARRY BANKS
HERMES family shareholders won
clearance yesterday to pool their
stakes without having to buy out
other investors, boosting the
French luxury group’s defence
against rival LVMH.
A majority of Hermes family
shareholders decided last month to
create a holding company to group
more than 50 per cent of the com-
pany’s equity as a defence against
LMVH, which recently lifted its
stake to 20 per cent.
The holding, approved by French
market watchdog AMF, is meant to
discourage LVMH from attempting
to acquire control of the maker of
Birkin and Kelly handbags.
Standard Life predicts the FTSE 100
will surge to 6,900 by the year’s end
▲
MARKETS
REDUCED FEARS of a double dip
recession could lead to the FTSE
100 hitting 6,900 by the end of this
year, according to Standard Life.
Low-valued stocks, including
those of BP and Barclays, could
help to push the index up 15 per
cent despite an anticipated bumpy
ride, according to the Edinburgh-
based firm.
The insurer correctly predicted
the FTSE 100 would rise 13 per cent
in the final quarter of 2010 to
breach the 6,000 mark, at a time
Goldman: ECB has
bought up a fifth
of Eurozone bonds
EUROZONE CRISIS
▲
BY JULIET SAMUEL
THE European Central Bank’s inter-
vention in Eurozone sovereign bond
markets means that the central bank
amounts to 20 per cent of mar-
ketable stock, according to analysis
by Goldman Sachs.
The note, released yesterday, says:
“The ECB remains the main buyer of
Portuguese government securities.” It
adds: “The ECB has effectively
removed from the private markets
roughly the equivalent of the entire
gross supply of Portuguese medium-
to-long-term government bonds for
2010.”
The ECB is notoriously secretive
about whose debt it is buying for fear
of panicking bond markets if it is
seen to intervene drastically.
However, it publishes weekly totals
But the holding’s creation need-
ed the AMF’s exemption from hav-
ing to make a tender offer for other
minority shareholdings, which
would have been costly.
“It was already a fortress, this
decision means that the walls have
been heightened,” said a source.
Hermes shares closed down 1.9
per cent at €155.05 (£96.7), valuing
the group at €16.33bn.
But not all the around 70 family
shareholders, descendents of the
Puech, Dumas and Guerrand fami-
lies who in total control around 73
per cent of Hermes’s share capital,
are part of the holding.
The AMF said it would publish
an explanation of its decision soon.
Hermes family shareholders said
in a statement: “This decision
when it stood at 5,325 points.
The FTSE 100 yesterday contin-
ued strongly closing at 6,043.86.
Homebuilder Galliford Try, as well as
mining firm Vedanta Resources and
electronics retailer Dixons, are also
stocks picked by Standard Life that
could benefit from sustained global
economic reovery.
Chief executive of Standard Life
Investments Keith Skeoch said:
“Continued global economic recov-
ery and UK equities’ high exposure
to overseas earnings will deliver
another year of strong cash flow and
earnings growth for UK corporates.”
CITYA.M. 7 JANUARY 2011
for its purchases, which show that it
bought €165m (£138.7m) last week,
the lowest level for several weeks due
to the Christmas holiday. In the three
weeks previously, it bought €1.12bn,
€603m and €2.67bn.
Meanwhile, France held a long-
dated debt auction yesterday, selling
just shy of up to €9bn euros of 10, 15,
and 20-year government bonds.
The sale saw decent demand but
with yields rising since the previous
sale.
“These auctions are doing well
and it’s relatively important for the
market psychologically because there
was some concern at the end of last
year, even for triple A paper,” said
BNP Paribas rate strategist Patrick
Jacq.
Figures showing the ECB’s pur-
chases in the last week will be
released on Monday.
clears the way for our project to
reclassify (our shares) which under-
scores the family’s unanimous will
to preserve Hermes’s culture.”
The minority shareholders’ asso-
ciation ADAM said it would very
likely appeal against the decision.
LVMH declined to comment.
ANALYSIS l Hermes International
210 ¤
155.05
190 5 Jan
170
150
130
11 Oct 29 Oct 18 Nov 8 Dec 30 Dec
STANDARD LIFE’S 2011 STOCK PICKS
1 Galliford Try
2 Vedanta Resources
3 Barclays
4 BP
5 Dixons
CITYA.M. 7 JANUARY 2010
BP sees stock
rise after US
spill report
ENERGY
▲
BY MARION DAKERS
SHARES IN BP rose yesterday morning
following the early release of a US
panel’s findings into the Deepwater
Horizon disaster, which pinned
blame on both the oil giant and its
partners.
An excerpt from the report criti-
cised the oil industry for systemic
risks and cost-cutting, but also point-
ed to failures by contractors
Transocean and Halliburton.
Analysts predicted that the report
from the US National Commission set
up by Barack Obama following the
spill would make it harder for victims
to succeed in lawsuits against BP for
gross negligence.
Richard Griffith from Evolution
Securities said: “The report may pro-
Obama’s chief
of staff is JP
Morgan’s Daley
▲
POLITICS
PRESIDENT Barack Obama yesterday
said he had chosen JP Morgan Chase
executive William Daley to be his new
White House chief of staff, retooling
his team with a politically savvy busi-
nessman at the helm.
“He possesses a deep understand-
ing of how jobs are created and how
to grow our economy,” Obama said.
Daley is head of corporate and
social responsibility at JP Morgan,
where he sits on the executive board.
He will replace Rahm Emanuel, who
left the administration last year.
vide grounds for BP to claw back
monies from licence partners and
possibly Transocean and Halliburton.
While today’s report is damning it
does in our view underpin out target
price of 510p.”
Analysts at BNP Paribas agreed,
adding in a note: “This is the critical
decision as, if not proved, BP can
reclaim 35 per cent of total costs from
its partners (having taken 100 per
cent to date): it is also positive for
future Gulf of Mexico activity.”
Junior partners at the Macondo
well, Anadarko and Mitsui, both saw
their shares dip yesterday.
Transocean and BP both rose in
early trading, though BP later shed
gains to close down 0.5 per cent at
496.9p.
The US commission’s full report is
due out on Tuesday.
British Land snaps
up Plymouth mall
PROPERTY
CARPHONE WAREHOUSE co-founder
David Ross started to dismantle his
property empire yesterday with the
£240m sale of the Drake Circus shop-
ping centre in Plymouth.
Ross’ firm Kandahar sold the mall
to British Land at a net initial yield of
six per cent, the buyer said in a state-
ment yesterday.
Kandahar hired property consult-
ants Jones Lang LaSalle and Briant
Champion Long last September to
advise on options for the company,
which breached its banking
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The US panel’s findings are good news for BP chief executive Bob Dudley Picture: REX
ANALYSIS l BP BP’s share price tumbled by
700 more than half following
p the Deepwater Horizon
600 explosion on 20 April, but 496.90
6 Jan
has since recovered to
around 75 per cent of its
500
previous value
400
300
Jan 10 Mar May Jul Sep Nov Jan 11
Snow to blame as top US
retail results miss targets
▲
US RETAIL
A FLURRY of US retail results released
covenants in December 2009. yesterday failed to meet market pro-
There were several parties interest- jections, despite gains in same-store
ed in purchasing the entire company sales for several companies.
at one stage, but Ross has resorted to After heavy snowfall hit the
selling off properties in an effort to Eastern seaboard just after
pare losses. Christmas, some companies blamed
Kandahar and JLLS declined to the blizzard for their shortfall, with
comment yesterday, while Briant retailers ranging from department
could not be reached. store operator Macy’s and discounter
British Land, the UK’s second Target to teen clothing store
largest real estate trust, already owns American Eagle Outfitters among
several shopping centres around the those whose results fell far short of
UK including Surrey Quays mall in Wall Street’s forecasts.
Rotherhithe and the 1.5m square foot December sales at stores open at
Meadowhall centre in Sheffield. least a year for the 28 major retailers
miss“Breaking
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News 13
At last: Some
good news for
Bob Dudley
THIS isn’t the end, but it is certain-
ly the beginning of the end.
Counterintuitively, the spill com-
mission’s report is good news for
BP, the best it’s had in some time.
It censures BP, that is to be
expected. But it also singles out
Transocean and Halliburton for
blame. The authorities – only too
keen to wag a finger from the side-
lines – also come in for some
uncomfortable criticism.
The commission’s conclusions
only reinforce our view that it will
be almost impossible to prove that
BP acted with gross negligence.
For that reason, analysts at
Evolution think the total impact of
the spill will be around $25-$30bn
rather than the $40-$50bn being
priced in by the market. And that’s
before makes claims against
Transocean and Halliburton.
It’s earlier than we expected,
but it could well be time to buy BP
again. If not now, then when?
BOTTOMLINE
Analysis by David Crow
tracked by Thomson Reuters rose 3.1
per cent, below forecasts of a 3.4 per
cent increase.
Though Macy’s same-store sales
rose 3.9 per cent, this was still below
estimates of 4.5 per cent. Macy’s chief
executive Terry Lundgren said that
bad weather was to blame for the
deficit. “We did a lot better before the
snow hit, no question about it,” he
said.
Shopper numbers were well down,
with research firm ShopperTrak say-
ing that 26 December, which was the
third-biggest shopping day of 2009,
would struggle to make the top 10
this year.
 14 Economic News
NEWS | IN BRIEF
US jobless claims edge upwards
New US jobless claims rose to 409,000
last week, up 18,000 on an upwardly
adjusted figure of 391,000. However,
the underlying trend in unemployment
remains downward, as the four week
moving average fell 410,750, the lowest
level recorded since late July 2008. The
decline comes on the back of a surge in
private sector jobs announced in
Wednesday’s ADP employment figures.
Official nonfarm payrolls data for
December is released lunchtime today.
UK wage settlements hit 2.2pc
Wage settlements in Britain hit their
highest level in nearly two years at the
end of 2010 but remained below infla-
tion, a survey revealed yesterday. The
median wage rise climbed to 2.2 per
cent in the three months to November,
compared to two per cent for most of
last year, and the highest since the first
quarter of 2009, according to Income
Data Services. UK consumer price infla-
tion hit 3.3 per cent in November.
Dutch inflation hits 21-month high
Dutch consumer price inflation rose to
1.9 per cent last month from 1.6 per cent
recorded in November, the Central
Bureau of Statistics said yesterday. That
was the highest rate since March 2009.
According to the statistical office the
increase in inflation was mainly due to
higher prices of motor fuels.
German chancellor Angela Merkel saw factory orders grow 5.2 per cent last month Picture: REX
Winter freeze hits
UK services sector
UK ECONOMY
▲
BY JULIAN HARRIS
SNOW and adverse weather during
December were blamed for a con-
traction in Britain’s services sector,
yesterday.
The country’s largest sector expe-
rienced its first decline for 20
months, stalling the recovery.
Yet economists hope business
activity will pick up this month –
assuming there is no return to arc-
tic conditions.
“It is worth noting that in
January last year, when the weath-
er was similarly disruptive, the
index fell, only to then bounce
back the following month,” said
Simon Hayes of Barclays Capital.
The business activity index, com-
More credit for small UK businesses
but housing market slump continues
▲
UK ECONOMY
BANKS are increasing their lending
to small businesses and expect to
raise the availability of credit in
the coming months, a Bank of
England report revealed yesterday.
Yet demand for mortgages is low
and expected to keep falling,
according to the credit conditions
survey.
And fears over falling house
prices are preventing some lenders
from increasing mortgage loans.
“Significantly, the report indi-
cates a continuing preference
Business sentiment
boost for Eurozone
driven by Germany
EUROZONE ECONOMY
▲
BY JULIAN HARRIS
CONFIDENCE in the Eurozone econo-
my shot up to a 38-month high in
December, official figures revealed yes-
terday.
The European Commission’s eco-
nomic sentiment index rose from
November’s 105.1 to record 106.2 last
month – its highest level since October
2007.
The results were driven by strong
increases in industrial and retail confi-
dence, a relief for European shops
after November data revealed a 0.8 per
cent fall in retail sales.
“We expect brighter news for the all
important Christmas trading period,”
said Chris Williamson of Markit. “The
retail purchasing managers’ index
indicates that sales rose at the fastest
rate for two and a half years in
piled by Markit and the Chartered
Institute of Purchasing and Supply
(CIPS), dropped to 49.7, down from
53 in November.
All figures below 50 signal a con-
traction in the industry. Figures
above 50 indicate growth.
And levels of new business also
fell, “with companies widely blam-
ing the poor weather for market
disruptions,” the report said.
Yet respondents still expect their
businesses to grow this year.
“It’s encouraging to see that
business confidence for next year
continued to improve slowly with
the promise of stronger economic
recovery,” said David Noble of CIPS.
Service sector business expecta-
tions increased to 66.5 in the index.
Restaurants, hotels and the
among lenders to steer away from
higher risk loans,” said Simon
Rubinsohn of the Royal Institute
for Chartered Surveyors.
“While the availability of
finance for ‘low’ loan to value
mortgages [75 per cent and less]
has actually increased, it has con-
tracted where smaller deposits are
put down by borrowers,” he added.
However, sales of properties
worth over £500,000 are attracting
higher loan to value mortgages,
according to a separate survey by
chartered surveyors e.surv.
Overall, secured lending to
CITYA.M. 7 JANUARY 2011
December, with particularly buoyant
trading in Germany and France.”
The Eurozone’s core economies con-
tinue to drive forward, offsetting
slumps in troubled peripheral and
Mediterranean countries.
While business confidence remains
strong in Germany (and grew by 1.5
per cent), “both Greece and Spain saw
a decline in economic sentiment, and
also in Portugal the economic mood
remains depressed,” according to ING’s
Martin van Vliet.
Meanwhile, Germany’s industrial
boom looks set to continue, after new
factory orders rose by 5.2 per cent in
November compared to the previous
month, massively above expectations.
Orders from non Eurozone coun-
tries jumped by 14.8 per cent on
October. “It is clear that the industry
led recovery will continue,” said ING’s
Carsten Brzeski.
catering industry were particularly
affected by the weather, as well as
rising prices.
Prices increased even on the pre-
vious month, according to more
than one in five survey respon-
dents.
Input prices increased at the
sharpest rate in over two years, the
report said.
Yet competitive pressures pre-
vented service providers from pass-
ing the price rises onto their
clients. Absorbing the price pres-
sures, companies reported a
decline in their profitability.
And companies with govern-
ment clients reported a weakness
in demand from the public sector,
as this year’s fiscal consolidation
prepares to kick in.
households remained stable in the
final quarter of 2010, the Bank’s
report said. Unsecured credit fell
slightly.
Yet lending to small businesses
crept up for the third consecutive
quarter and banks say it will con-
tinue to rise.
Last month the Bank expressed
concern about low availability of
credit. Lending to small business
and individuals “has remained sub-
dued even as economic activity has
begun to recover. Weak lending is
more likely to dampen the recovery
than weak demand,” it said.
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 16 News CITYA.M. 7 JANUARY 2011

Xinmao abandons Draka bid Bafin probes role of ACS

ation regretfully concluded that its Draka shares, which had been trad-
and Hochtief shareholder
▲

TECHNOLOGY
intended offer for Draka is no longer ing between the value of the Xinmao
BY HARRY BANKS feasible,” the Chinese group said. and Prysmian offers, closed down 8.4
CHINA’s Xinmao Group dropped its The group had faced an uphill bat- per cent at €17.71, just below the said a spokeswoman for financial

€1bn (£645m) bid for Dutch cable-
maker Draka yesterday, leaving Italy’s
Prysmian free to seal a lower-priced
deal and form an industry leader.
Xinmao’s attempt to enter the fibre
optic cable market by buying an over-
seas company had been seen as a test
of the ability of Chinese companies to
complete such acquisitions.
But Xinmao, which gatecrashed
Prysmian’s agreed €830m cash and
share takeover of Draka in November,
said it would be unable to launch its
bid before Prysmian’s offer closed.
“Xinmao has after careful consider-
tle to launch its offer in time as it
waited for Chinese government
approval for the move.
Prysmian’s offer, launched yester-
day, is due to close on 3 February – 10
days before Xinmao had said it could
put its bid to Draka shareholders.
Chairman Du Kerong’s
Xinmao Group has
abandoned its £645m
bid for Dutch-based
cablemaker Draka
implied value of Prysmian’s offer of
€17.94. Prysmian bounced 9.7 per
cent to €14.16 on relief it would not
have to raise its bid to win over Draka
investors.
Draka spokesman Michael Bosman
said the company had noted
Xinmao’s statement and “will move
forward with Prysmian”.
Prysmian is being advised by
Goldman Sachs, Mediobanca and
Banca Leonardo. Draka’s financial
adviser is JP Morgan and its legal
counsel is Allen & Overy. Xinmao was
advised by Catalyst Advisers.
▲
M&A
GERMANY’S financial watchdog is
investigating the role of a key ACS
and Hochtief shareholder in the lat-
est twist to the Spanish builder’s
unconventional takeover bid.
Southeastern, the US fund manag-
er, holds stakes in both the German
and Spanish construction groups. Its
decision to tender half its five per
cent Hochtief stake to ACS’s all-stock
offer was critical in getting the group
over a key 30 per cent threshold.
“We are looking into clues relating
to Southeastern Asset Management,”
markets regulator Bafin.
Southeastern revealed it had been
approached by the financial regula-
tor but said there was no allegation of
wrongdoing. The US investor has
denied any suggestion it worked with
ACS during the bid, and a spokesper-
son for ACS said it had not collaborat-
ed with shareholders during its bid,
and had complied with German law.
Bafin said it did not see ACS’s bid
for Hochtief being declared void “in
its entirety” in the foreseeable future,
but said it was uncertain when the
investigation would be concluded.

Maybank in BEST OF THE BROKERS

ANALYSIS l Travis Perkins
1,100 p
1,056.00
6 Jan
ANALYSIS l Next
26.5 p
26.20
6 Jan
ANALYSIS l Tesco
445 p
26.20
6 Jan

$1.4bn move 1,000

900
25.5

24.5
435

425

415

for Kim Eng

800 23.5

11 Oct 29 Oct 18 Nov 8 Dec 30 Dec 11 Oct 29 Oct 18 Nov 8 Dec 30 Dec 11 Oct 29 Oct 18 Nov 8 Dec 30 Dec

TRAVIS PERKINS NEXT TESCO

RBS rates the building materials firm “buy” Seymour Pierce rates the retailer “buy” JP Morgan Cazenove has chosen Tesco as
with a raised target price of £12.95. The with a target price of £25. The broker its food retail top pick for 2011, with an
▲

M&A
BY HARRY BANKS
MAYBANK, Malaysia’s largest lender
by assets, is snapping up Singapore
broker Kim Eng Holdings for $1.4bn
(£893m), in a move to strengthen its
grip on the regional stockbroking
industry and diversify the lender’s
source of overseas revenue.
Maybank will pay 3.10 Singaporean
dollars per share for a 44.6 per cent
for further acquisitions in this busi-
ness.
Maybank’s shares gained 2.74 per
cent during trading yesterday, closing
at 6.00 Malaysian ringits (MYR) on
Bursa Malaysia, while Kim Eng closed
2.66 per cent up at 2.77 ringits.
Shares in Thailand’s Kim Eng
Securities surged as much as 11.9 per
cent on news of the planned acquisi-
tion of its Singapore parent.
broker sees the firm’s purchase of BSS
Group last month as an attractive earnings
driver over the next two years until the
underlying market recovery takes over in
2013. It adds that the acquisition gives the
company significant buying power.
believes Next had a passable Christmas, “overweight” rating and a target price of
demonstrating the strength of its multi- 577p. The broker sees a sharply improving
channel sales model. Expectations were returns profile as the firm diversifies. It
low, according to the broker, and the firm also notes that debt is falling. It expects
would have performed at the top end of its like-for-like sales excluding fuel to be up 2.5
guidance if it had not snowed. per cent when it reports on 13 January.
To appear in Best of the Brokers email your research to notes@cityam.com

ENRC advised by PwC on UK tax move

stake in the broker, before launching
a mandatory offer for its entire opera-
tions on completion. The banking
group has said it plans to privatise
Kim Eng, which the acquisition has
priced at 1.91 times its book value at
the end of September 2010.
The acquisition comes as Southeast
Asian markets are on a roll, with
Thailand and Indonesia ranking as
the best performing major markets in
Asia last year.
ANALYSIS l Maybank been considered at board level. Wolseley have relocated out of the UK
▲

Maybank chairman Tan Sri Megat
Zaharuddin Megat Mohd Nor said
that the transaction was “a great leap
forward” for the group, with Kim Eng
offering an “immediate platform to
aggressively build up our global
wholesale banking capabilities in
Asean and beyond”.
Maybank, which was previously
linked with another regional broker-
age OSK Holdings, said it has no plans
MINING
6.0 MYR Last night ENRC issued a statement for tax reasons and further depar-
6.00 ENRC, the mining group partly- saying that it had no plans to change tures would be embarrassing for the
6 Jan owned by the Kazakh government its current arrangements. government.
5.5
and listed on the FTSE, has been “ENRC routinely reviews its tax and ENRC has been the subject of much
5.0
advised that by relocating to treasury arrangements to ensure they controversy because of a dispute it
Switzerland it could save itself £20m remain efficient and appropriate for has had with a rival group over min-
a year in tax. its business. ENRC has no current ing assets in the Democratic Republic
4.5
According to SkyNews, the group plans to change its existing arrange- of Congo.
was given the advice by its auditors ments,” it said. Sources said the PWC plan has not
4.0
PricewaterhouseCoopers several In the recent past a host of busi- been “actively discussed” and was not
22 Oct 5 Nov months ago but the matter has not nesses such as Shire, WPP and acted upon.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

Syndicate Asset Management
The fund management group has promoted
Jeremy Rance to the role of chief operating
officer for the group. He will now be in charge
of organising operational performance across
all of the group’s subsidiaries. He joined the
company in June last year at its subsidiary
Ashcourt Rowan, having previously worked at
Barclays, KPMG and AMP. At Ashcourt Rowan,
he played a key role in buying and intergrating
the Cooperative Bank’s IFA business.
Deloitte ing partner of its tax practice. Hodge
The financial services firm has appoint- will take over from David Sproul, who is
ed Andrew Hodge as the new manag- moving to take over as chief executive
in June.
Phoenix Equity
The mid-market private equity firm has
appointed Jim Graham as operating
partner and Edward Lunken as origina-
tion analyst.
Graham joins the company from
Candover, where he has been in a simi-
lar role for the past three years. He has
also worked as a marketing manager
for Orange and in a consultant role at
Accenture, before which he was in the
Navy for ten years.
Lunken comes to Phoenix from LEK
Consulting, where he worked for three
years. Before that, he worked as a
researcher for the European
Commission.
Collins Stewart
Erik Anderson has been appointed co-
head of corporate broking at Collins
Stewart. He will work alongside the
other co-head, Mark Dickenson, and
Roger Lambert, who chairs the division.
Anderson has 23 years’ experience in
the area and has worked for the last
eight at Investec. Previously, he has
worked at WestLB Panmure and James
Capel.
WM Morrison
The grocer’s corporate division has
appointed four new senior managers,
three of them in newly created roles.
Richard Lancaster has been promoted
to marketing director, replacing Angus
Maciver.
The new appointments include
Belinda Youngs to own brand director,
Nick Collard to commercial director,
and Gordon Mowat as strategy direc-
tor.
Marsh
The insurance broker has appointed
Alan Morton to senior claims advocate.
He joins the company from Aon Global
Risk Consulting. Previously, he has also
worked at JLT.

To appear in CITYMOVES please email your career

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com morganmckinley.com
CITYA.M. 7 JANUARY 2011
F&C board fights
back as Sherborne
showdown looms
ASSET MANAGEMENT
▲
BY ALISON LOCK
EMBATTLED F&C Asset Management
has set a date for its showdown with
Sherborne Investors over its bid to
replace chairman Nick MacAndrew
and take control of the board.
F&C shareholders will meet on 3
February at Sherborne’s request to
vote on whether to oust MacAndrew
and director Brian Larcombe and
appoint Sherborne’s founder Edward
Bramson, chairman Ian Brindle and
an independent director, Derham
O’Neill, in their place.
F&C’s board opposes the bid, argu-
ing it is destabilising the firm as it
implements a turnaround strategy to
return it to full value after prolonged
uncertainty over its future.
“Sherborne has requisitioned this
general meeting without putting for-
National Grid agrees
£8m Ofgem penalty
ENERGY
▲
BY HARRY BANKS
BRITAIN’S energy regulator Ofgem
yesterday imposed an £8m fine on
National Grid for misreporting infor-
mation during a gas mains replace-
ment programme between 2005 and
2008.
Ofgem will hold a 21-day consulta-
tion period on the fine to consider
comments from the public.
If the consultation concludes in
favour of the penalty, National Grid
will be expected to pay the fine this
financial year, Ofgem said.
The gas network operator did not
benefit financially from the misre-
Expansion pays off for Hays @
porting and all detriment to con-
as foreign fees drive revenue
RECRUITMENT
▲
BY HARRY BANKS
BRITISH recruitment group Hays
reported a 21 per cent rise in second-
quarter net fees yesterday, as its over-
seas expansion strategy was
vindicated by a recovery to pre-reces-
sion levels in many international
markets.
“We have now got several countries
both in Asia and Europe approaching
above pre-downturn levels,” said
finance director Paul Venables, not-
ing an improved performance in
countries such as Australia, Germany,
ward an alternative strategy and at a
time when stability has finally been
achieved,” said MacAndrew. “This
unwelcome and opportunistic move
by Sherborne is damaging to the busi-
ness and is not in the best interests of
our shareholders.”
Key shareholder Aviva, which owns
a ten per cent stake in F&C and 19.5
per cent of Sherborne, is known to
support Sherborne, saying last month
it believes Bramson can deliver a turn-
around at F&C as he has in previous
investments Elementis and Spirent.
Guernsey-based Sherborne, an
activist investor with a track record of
taking control of firms it believes are
underperforming, has built a 17.6 per
cent stake in F&C since August and is
now its largest single shareholder.
It believes F&C’s share price under-
values the company and that it has
underperformed over the long term.
sumers had already been corrected,
the regulator said.
National Grid has accepted the fine
and does not intend to appeal against
it, a spokesman said.
The energy network company is
accused of various cases of filing inac-
curate information, such as claiming
to have completed work in one year
when it was only finished the next
year, a spokesman for Ofgem said.
Another example of misreporting
was that National Grid charged for
completed work twice, he said.
“We are disappointed that a matter
such as this should ever have arisen,”
National Grid executive director Mark
Fairbairn said.
“Significant enhancements have
Japan and Spain.
Hays, which specialises in placing
office workers, describes itself as the
world’s biggest specialist recruiter,
although its revenue is about a sixth
of Adecco, the world’s biggest staff
agency.
Hays said net fees grew more than
20 per cent in 19 countries in the
quarter. Asia was up 36 per cent and
Germany, its largest European mar-
ket, jumped 47 per cent.
But the British and Irish market,
which has shrunk to 35 per cent of
Hays’s overall net fees, was flattened
by a slump in the public sector, where
Sherborne wants to oust F&C
independent director Brian
Larcombe (left) and chairman
Nick MacAndrew (right)
been made, including to processes
and systems in the mains replace-
ment programme within National
Grid, to ensure the accuracy and com-
pleteness of the data provided to
Ofgem.”
ANALYSIS l National Grid
p
590 579.50
5 Jan
570
550
11 Oct 29 Oct 18 Nov 8 Dec
a 38 per cent drop in fees offset
growth of 28 per cent in the private
sector.
Venables said the trough is in sight
in the public sector.
“We expect our UK public sector
business to hit the bottom in the
April, May time. We expect to return
to absolute levels of growth ... from
July onwards.”
Hays, which has more than 340
offices in 29 countries, is looking to
countries such as China for growth,
pledging to increase the number of
consultants there more than four-
fold.
News 17
NEWS | IN BRIEF
HK’s richest 40 worth $163bn
The combined wealth of Hong Kong’s
top 40 billionaires now totals $163bn,
adding $28bn to last year’s figure. The
latest Forbes rich list sees Chung Kong
and Hutchison Whampoa controller Li
Ka-shing stay on top, with a personal
fortune valued at $24bn ($105.3bn). A
third of the top 40 make their money in
real estate development, including the
family of Thomas and Raymond Kwok,
vice chairmen of Sun Hung Kai Properties.
The future of F&C chief executive Alain
Grisay has been in doubt after Sherborne Boom in media sector M&A
raised its stake to 17.6 per cent Fifty per cent of M&A transactions by
value in the media sector took place in
the fourth quarter of 2010, with ana-
lysts predicting that the upswing will
last throughout 2011. According to new
figures from PricewaterhouseCoopers,
110 European Media deals were closed
in 2010, totalling €12bn (€10.1bn) in
deal value. This was more than a 90 per
cent rise on the 2009 data.
Skoda sees jump in Czech sales
Volkswagen's Czech unit Skoda Auto
sold a record number of cars worldwide
in 2010 and said it aimed to double
sales by 2018. Skoda boosted its global
sales by 11.5 per cent year-on-year to
762,600 vehicles in 2010. The automo-
tive industry is a key driver for the
Czech economy, which is expected to
grow around two per cent this year,
according to finance ministry forecasts.
TO GET OUR
NEWSLETTER: LICENSING
ACT 2003
@
Notice of Application for
grant of a Premises Licence
NOTICE IS HEREBY GIVEN THAT Land
Securities, 5 Strand, London, WC2N 5AF
has applied to the City of London Corpo-
ration on 23rd December 2010 for the
@
grant of a premises licence to use the
premises One New Change, London, EC4M
9AF for the provision of films, live music,
recorded music, performances of dance,
making of music and supply of alcohol
(for sampling purposes) between the
hours of 08:00 and 22:00.
30 Dec The record of this application is held by the
Licensing Authority and can be viewed on the
website www.cityoflondon.gov.uk or
inspected at the offices of the City of
London Corporation, Trading Standards
(Licensing), Walbrook Wharf, 78-83 Upper
Thames Street, London, EC4R 3TD
during normal office hours (Ring in advance
for appointment)
www.CityAM/newsletter.com
Any person wishing to submit
representations to the application must give
notice in writing to the Licensing Authority
at the address shown above, giving in
detail the grounds for objection by
20th January 2011.
Representations must be received by the
Licensing Authority by the date given above.
The Licensing Authority will have regard to
any representations made when considering
this application.
It is an offence under section 158 of the
Licensing Act 2003 for anyone to recklessly
or knowingly make a false statement in
connection with a licensing application.
The maximum fine on conviction is £5,000.
 18
Wealth Management | Personal Finance
Key dates to watch in 2011
Planning ahead will
help you stay on top
of your finances,
writes Jessica Mead
J
ANUARY is traditionally a month of
self-imposed austerity and resolu-
tions to do better. Despite a recover-
ing economy, in an environment of
high unemployment, rapidly rising prices
and a less generous state, keeping one’s
finances under better control ought to be
topping many 2011 resolution lists.
While the VAT rise will be foremost in all
of our minds, there are plenty of other tax
changes and planning measures scheduled
for 2011. Staying on top of your money
requires forward thinking. Not only do you
need to think about what you want to
achieve, but you also need to be aware of
changes to legislation.
That doesn’t just mean government
measures; decisions taken at a European
or even an international level could have a
knock-on effect on individuals. The key to
managing your finances is not to be taken
by surprise: here are some of the issues you
need to be watching this year.
MORTGAGES
Despite high inflation, the Bank of
England is expected to keep monetary pol-
icy highly accommodative this year.
However, that does not rule out the
(strong) likelihood that we will start to see
interest rates rise at some point this year –
many economists have pencilled in a small
increase in the second half. A rise in rates
has the potential to affect mortgage deals
and whether you choose to fix or float. The
Council for Mortgage Lenders (CML)
believes that remortgaging rates will be
low this year because standard variable
rates (SVR) will remain attractively priced.
SAVINGS
As of 6 April, the personal limit for ISA con-
tributions will increase to £10,680, which
means couples can shelter £20,400 from
income and capital gains tax. Half of your
annual allowance can be placed in a cash
ISA. The allowance will increase annually
in line with inflation.
Parents should also be ready for the
Falling real wages don’t have to mean pain
Daniel Knowles
offers three tips to
cope with austerity
T
HANKS to inflation of 4.7 per cent,
most workers will probably see cuts
in the real purchasing power of
their salaries in 2011. But there is
no reason for that to cut into your living
standards. Here are some easy New Year’s
resolutions to follow that will help you
endure austerity Britain without feeling
too pinched.
1
DON’T BUY THINGS YOU DON’T
USE
This one may seem obvious, but it is
Be ready for all of introduction of the Junior ISA in the
2011’s notable dates autumn and watch out for further details
such as the annual allowance.
Picture: GETTY
PENSIONS
2011 is going to be a year of change for pen-
sions and unlike ISAs, the changes to the
pension rules are not all to investors’
advantage, says Adrian Lowcock, senior
investment adviser at BestInvest. From 6
April, the maximum amount which can
be put into a pension each year, and still
qualify for tax relief, will be cut to £50,000
from £255,000.
Therefore, anybody considering topping
astonishing how much it is ignored –
we keep spending money on things we
just don’t need. In fact, according to
research from Crunch.co.uk, the average
Brit wastes an impressive £1,213 a year on
goods and services that they then don’t
use.
Unsurprisingly, gym subscriptions and
sports equipment are the most pointless
of purchases, accounting for £461 of the
total wasted. So if your New Year’s resolu-
tion is to get fit, ask yourself whether
you’re really committed to it before pay-
ing a hefty joining jee.
If gym membership is non-nego-
tiable, those surveyed also
admitted to spending £100 a
year on food not eaten,
£70 a year on
clothes never worn
and £110 a year on
gadgets never used. A
little thought about
up their pension by a significant amount
should do so before the end of the tax year,
advises Lowcock. From April, unused
allowances can be carried forward for up
to three years giving the potential to pay
up to £200,000 into a pension for those
who do not make the full permitted contri-
bution each year.
As of 2011-12, pension holders will also
no longer have to buy an annuity and
could continue to invest or take the
income drawdown option. The govern-
ment is also expected to confirm its posi-
tion on early access to pension funds after
the consultation period ends in February.
whether purchases are actually a good
idea can save you a lot.
2
SWITCH PRODUCTS TO SAVE MONEY
Many companies make their money by
exploiting existing customers but offer-
ing enticing deals to attract new ones.
Don’t be a sucker. According to research
from Gocompare.com, over 12m people
have never switched any one of the 20
most common financial products, from
car insurance to bank accounts, meaning
that 12m people are probably paying too
much money for everything from gas to
car insurance.
Switching energy provider or insurance
providers can save hundreds of pounds a
year – according to Gocompare, the aver-
age saving from switching car insurance
provider is £296 while the average saving
from switching energy provider is £442. If
CITYA.M. 7 JANUARY 2011
PERSONAL
FINANCE NEWS
BY DANIEL KNOWLES
RATE WAR ON £7,500 LOANS
The average interest rate charged on unse-
cured personal loans of £7,500 has dropped
to 7.89 per cent, the lowest level since
November 2008, according to a survey by
moneysupermarket.com. The fall in rates is
thanks to a price war between providers. Tim
Moss, head of loans and debts at moneysuper-
market.com, said “It is great to see providers
creating some healthy competition in the
unsecured loans market”. However, according
to the same analysis, smaller loans are getting
more expensive. The average rate on loans of
£3,000 is now 15.12 per cent, an increase of
2.19 per cent on November 2008.
BALANCE TRANSFERS CARRY ON
Over 2.8m credit card holders will shift a total
debt of £2.8bn onto new credit cards in 2011,
according to new research from Santander.
The average balance transfer made by “credit
shifters”, of whom there are 2.8m, is £1,015,
which is considerably less than the peak of
£2,290 at the end of 2008. Despite the fall in
the balance transfer size, the research sug-
gests that much of the debt was incurred
some time ago – many credit card customers
are still paying off debts from Christmas
2009. The research also found that young
people are more likely to transfer their credit
card balances than old people, with 41 per
cent of those aged between 18 and 35 plan-
ning to transfer a balance this year.
HOUSE PRICE GAINS IN NORTH WALES
The market town of Conwy in North Wales
registered the biggest rise in house prices in
the UK in 2010 according to the latest Halifax
country house price survey. The average price
of a house in Conwy rose by 13 per cent to
£162,691 in 2010. After Conwy, East
Dunbartonshire and Dumfries and Galloway,
both in Scotland, did best, registering increas-
es of 12 per cent and 11 per cent respectively.
Of the top twenty performing counties, 10
were in the south of England, while only two
were in the North. Surrey remains the most
expensive county to buy a house in, with the
average property selling for £296,344. The
average house costs more than £200,000 in
fourteen counties in the UK.
243 UNLUCKIEST DOOR NUMBER
Number 243 is the unluckiest house number in
the UK by insurance claims, according to
research by Confused.com. The majority of
claims – 75 per cent – were for accidental loss
and damage in the home, suggesting that
number 243 might just be a popular place for
a party.
you switch your current account, you
could even earn money. First Direct is
offering new customers £100 just for sign-
ing up,
3
USE YOUR TAX ALLOWANCES
And when you’ve saved that money,
you will want to make sure you put it
away in a rational way. With VAT having
jumped up this week, the government is
taking even more of your money – but
you don’t have to give them any more
than necessary. According to research
from Fidelity, 42 per cent of people will
miss out on tax free investment returns
by not using their annual ISA allowance.
If you’re saving money, you should be
sure to make the most of your allowance.
Up to £10,200 can be saved this tax year
in stocks and shares in an ISA wrapper, or
£5,100 in cash.
Dev
Developing
D evvelopi
l piing
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Corrporate Credit
Corporate Creddit Rationale
Rationalee
Today’s
Today’s landscape requires the sharpest credit analysis skills. Whether you’re looking for a
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16 - 18 February,
Februa
February, 2011
Standard & Poor’
Poor’s,
s, 20 Canada Square, Canary Wharf, London, E14 5LH
Full course £2,200 ++VAT
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Copyright © 2010 by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. All rights reserved.
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 20 Wealth Management CITYA.M. 7 JANUARY 2011

LONDON’S TOP 250

Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)

3i Group 337.75 -2.25 340 250 COBHAM 218 5 276 192.25 Jardine Lloyd 631 2.50 631 459 RIT Capital Partners 1232 4 1250 971.50
3i Infrastructure 122 0 125.25 101 Colt Telecom 133.75 -0.75 142.50 109 John Wood Group 563 -8.50 571.50 293 Rolls-Royce Group 659 5 659 473.50
A.B. Foods 1139 -11 1182 838.50 Compass Group 573.50 0.50 594 425 Johnson Matthey 2055 4 2100 1446 Rotork 1815 -43 1895 1214
Aberdeen Asset.Man. 212.75 5 212.75 112.75 Cookson Group 675 4.50 687.50 367.50 JPM Flem.Emerg Mkt. 630.50 -8.50 639 450.50 Royal Bank of Scot 40.50 -0.50 58 31.25
Admiral Group 1567 2 1693 1114 Croda International 1545 -3 1616 751 Jupiter Fund Man 300.50 -2 310 180.25 RSA Insurance Grp 132 2.25 136.50 114.75
Aegis Group 142.50 1.75 145.50 103.50 Daily Mail & Gen 590 14.50 590 423.50 Kazakhmys 1619 -5 1649 965 SABMiller 2245.50 -1 2306 1650
Afren 148.50 -1.50 150 79 DAVIS SERVICE 440 4.75 441.25 360.25 Kenmare Res. 32.25 -1.50 35 9.25 Sage Group 279 2.25 289 222
African Barrick Gold 581.50 -18.50 670 503 De La Rue 835 -1 1005 549.50 Kesa Electricals 162.75 1.50 174 99.25 Sainsbury (J) 387.25 1.25 395 313
Aggreko 1474 -13 1685 882 Debenhams 73.25 -1 79 53 Kingfisher 260.50 -4.75 267 198.50 Schroders 1898 12 1900 1116
Alliance Trust 375.25 -0.50 377 293.50 Derwent London 1544 -39 1605 1208 Ladbrokes 125.75 0.25 162.75 122.75 Schroders NV 1488 7 1502 929.50
Amec 1180 -5 1185 733.50 Diageo 1228 24 1228 1000 Lancashire 574.50 7.50 647 435 Scot.& Sth. Energy 1220 -22 1258 1010
Amlin 417 1.25 433 362.50 Dixons Retail 23 -0.50 37.50 22.75 Land Securities 682 -1 696.50 545 Scottish Mortgage 704.50 -2 712.50 475
Anglo American 3309.50 -39 3407 2254 Domino’s Pizza 586 24.50 586 309.25 Legal & General 104.50 1 106.25 69.75 SEGRO 293.50 -4 350.75 250.25
Antofagasta 1537 -49 1634 761 Drax Group 388.75 3.25 441.50 326.25 Lloyds Banking Grp 67.25 -1.25 77.50 46.50 Serco Group 562 -7.50 651 494.25
Aquarius Platinum 331 -3 458 227 DS Smith 206 -2 210 104 Logica 135.75 -1.50 148 101.75 Severn Trent 1463 -2 1499 1072
ARM Holdings 482 10.50 482 187 Dunelm 510 -20 550 325.25 London & Stamford Property Ltd.131.75 -0.25 132.50 110.25 Shaftesbury 440 -7.50 460 349.25
Ashmore Group 342 -1 383.75 218 easyJet 455 -2.75 496.50 348.50 London Stock Ex. 869.50 1.50 869.50 544 Shire 1562 1 1567 1220
Ashtead Group 171 6.50 177 77 Edin.Inv.Tst. 467 -0.25 467.25 364 Lonmin 1910 -30 2157 1355 SIG 132.75 -1 137.75 90.75
AstraZeneca 3026 17 3385 2732 Electrocomponents 274 1 279.50 166.75 Man Group 302.25 -8.25 327.50 202 Smith & Nephew 662.50 -11 696.50 537.50
Autonomy 1552 -1 1975 1271 Enquest 144.25 -1.25 146.50 89.25 Marks & Spencer 388.25 13.25 427.50 323.50 Smiths Group 1291 -10 1301 995.50
Aveva Group 1608 -55 1663 1007 Essar Energy 556 -19 589.50 383 Meggitt 379 7.75 379 251.50 Soco International 366.25 -8 484.25 292
Aviva 416 4 423.50 294.25 Eurasian Nat Res 1074 -5 1266 818 Melrose 320 1.50 320 162 Spectris 1310 0 1335 735
AZ Electronic Materials SA (WI) 301 -2 310 249 Euromoney Inst. 698 -5 727 444 Mercantile Inv Tst 1082 0 1096 828 Spirax-Sarco 1926 22 1987 1235
Babcock International 575 -3 635 492.75 Experian Group 784.50 -10.50 819 572 Michael Page 542.50 -7.50 565.50 346.50 Spirent 147.50 -0.75 160.25 102.75
BAE Systems 351 9 388.75 294.75 Ferrexpo 414.25 -9.75 424 197 Micro Focus 398 3.50 546.50 276 Sports Direct 165 -6.50 171.50 92.25
Balfour Beatty 324.75 0.50 324.75 229.75 FirstGroup 398.50 4.50 422.50 336 Millennium & Cop. 592.50 5.50 592.50 368.50 St James’s Place 280.75 3.25 292 204.25
Barclays 278 -3 383.25 255.25 For.&Col.Inv.Tst 315.50 2.50 315.50 251.50 Misys 341.50 9 343 201.50 Stagecoach Group 215.50 -4.50 224 160.75
Barratt Development 96.50 0.50 142 70 Fresnillo 1578 -89 1682 669.50 Mitchells & Butlers 361 5 361 252.25 Standard Chartered 1759.50 -9.50 1950 1351.75
BBA Aviation 219 3 221.50 158 G4S 261 2.50 283.50 237.75 Mitie Group 239.75 -1.50 241 188.75 Standard Life 219.75 0.25 236 173
Bellway 700 17.50 826 511 Genesis E.m.f. 562 -6 568 399 Mondi 519.50 -8.50 557.50 338.25 Supergroup 1265 -38 1638 535
Berkeley Grp Hldgs 942 1 942 742 GKN 220 1 226 102 Monks Inv.tst. 357.50 0 363 271 TalkTalk 163 3 168.25 108.50
Betfair Group 898.50 -39 1550 898.50 GlaxoSmithKline 1249.50 -2.50 1318.50 1095 Morrison (Wm) 268.25 -3.75 306.25 257.50 Talvivaara Mining 590 -16 620 342.50
BG Group 1311.50 -19.50 1337.50 984 Great Portland Est. 355 -14 369.25 279 Murray Int.Tst 960 4.50 966 736.50 Tate & Lyle 537.50 0.50 544.50 388.75
BHP Billiton 2517 -17 2616 1684.50 Greene King 474.50 -5.50 491.50 376.25 National Express 253.50 0.75 259.50 194 Taylor Wimpey 35 2.25 44 22.25
BlackRock Mining 796 -12 811 492 Halfords Group 437.50 -2.50 550 372.75 National Grid 579.50 0.50 596.25 484.25 Telecity Group 461.50 -5.50 532.50 360
BlueCrest AllBlue 171.25 -0.75 174.50 156.25 Halma 356.50 -3 366.50 223 Next 2074 -29 2344 1817 Templeton Emrg. 683.50 -6 689.50 471.50
Booker Group 58.50 -1.75 60.50 38.75 Hammerson 428.75 -2.25 434.50 336.25 Northumbrian Water 330.50 -1.25 361.50 252.75 Tesco 430 -6.75 454.50 377.50
BP 497 -2.25 655.50 303 Hargreaves Lansdown 585 -14 599 276.50 Ocado Group 190 -10 200 123.50 Thomas Cook Group 200.50 3.25 272 171.75
Brit Insurance 1050 1 1050 728 Hays 126.75 -1.25 133.50 88.50 Old Mutual 125.25 0.75 145.25 97.25 Travis Perkins 1056 14 1058 664.50
British Airways 300.25 12.50 300.25 184.25 Henderson Group 139.50 2 151.75 112.75 PartyGaming 205 -5.25 334.50 205 TUI Travel 256.75 -2 308.50 190
British Amer.Tob 2481 -4 2521 1959 Heritage Oil 486 3 581 296.75 Pearson 1013 4 1051 855 Tullett Prebon 413.75 -5.25 419 262
British Empire Tst 510 5 510 396.50 Hikma 853 -13.50 866.50 516 Pennon Group 636 -3 646 483 Tullow Oil 1321 -25 1369 991.50
British Land 528 -1 537 418.25 Hiscox 399 6.50 399 320.75 Persimmon 450.50 7 507.50 336.50 UK Commercial Prop 81.75 -1 85 72.75
Britvic 476.25 -1 518 403 Hochschild Mining 592 -18 658 234 Petrofac 1625 -24 1649 876.50 Ultra Electronics 1731 -9 1895 1265
Brown (N.) Group 300.50 -2.50 303 206.50 Home Retail Group 202 4.25 295 188.50 Petropavlovsk 1078 -19 1365 852 Unilever 1928 -27 1997 1688
BSkyB 746 4 746.50 524.50 Homeserve 441 -8.25 487.50 326.25 Phoenix Group Hldgs 620.50 0.50 758 557.50 United Utilities 597 2 628.50 488.25
BT Group 185.50 -0.75 187.75 110 HSBC Holdings 687.25 -1.75 740 596.25 Premier Farnell 302 -1 304.50 174 Utd Business Media 712 11 712 409.75
Bunzl 745 -0.50 777 616.50 Hunting 744.50 -5.50 750.50 439.50 Premier Oil 2013 -12 2025 1017 Vedanta 2494 13 2934 1839
Burberry Group 1121 1 1156 581 ICAP 540.50 0.50 543 294 Provident Financial 874.50 -9 974 728.50 Victrex 1469 -3 1522 806
C&W Comms 49.75 0 63.75 44.25 IG Group 528 0.50 553 362.50 Prudential 689 7 689 487.50 Vodafone Group 175.75 0.50 175.75 129.50
C&W Worlwide 71.25 1.75 100 60.50 Imagination Tech 384.75 -3.75 441.75 215 PZ Cussons 398.75 -2.50 409 234.75 Weir Group 1752 8 1861 735.50
Cairn Energy 433.25 -9 493.25 318.25 IMI 915 -7 948 530.50 QinetiQ Group 132 -1 166 96.75 Wellstream Holdings 790.50 0 793.50 436
Caledonia Inv. 1908 -20 1928 1512 Imperial Tobacco 2019 7 2154 1753 Randgold Res 5105 15 6655 4209 Whitbread 1856 24 1856 1266
Capita Group 694.50 -13 826 635.50 Inchcape 380 0.50 380 237 RDS ‘A’ 2115 -32 2162 1624 William Hill 170.50 0.50 216.50 155.50
Capital & Counties 146 -2 157 100 Informa 424.75 2.25 448 304.50 RDS ‘B’ 2117 -24.50 2159.50 1554 Witan Inv Trust 518 -2.50 520.50 410
Capital Shop Centre 419 -1.75 424.75 301 Inmarsat 670.50 3 821 606.50 Reckitt Benckiser 3518 -58 3655 3037 WOLSELEY 2045 0 2087 1223
Carillion 378 -9.50 387.50 273 InterContinental Htl 1310 7 1310 887 Reed Elsevier 531 -6.50 563 460.50 WPP Group 793 12.50 798 572.50
Carnival 3150 -3 3153 2037 Intermediate Cap.Grp 346.50 -2.75 351 240.50 Regus 96 4 120 66 Xstrata 1515 15.50 1535 845.75
Catlin Group 382.25 3.75 393 320 International Pers Fin 374 -10 386.50 183.25 Renishaw 1283 11 1306 565.50
Centamin Egypt 172 2 197 106.75 International Power 425 -5.25 448.50 284.50 Rentokil Initial 98.25 0.25 138.50 87.75 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 335 -0.75 346 264 Intertek Group 1772 -29 2000 1150 Resolution 243.25 8.25 346 211.25
Charter 820 -17 853.50 567 Invensys 359 3.25 361 230.25 Rexam 343.75 4.75 346.75 276.50 POWERED BY
Chemring Group 3200 16 3663 2598 Investec 530 -8 562 417.75 Rightmove 810 -1 812 500.50
Close Brothers 873.50 0.50 873.50 664 ITV 73 1 74.25 48.25 Rio Tinto 4437 -39.50 4584 2812
www.digitallook.com

US uncertainty takes toll on Soft retail sales hit

FTSE despite blue chip gains investor confidence
data that showed initial weekly job- by heavy snow. chief investment officer at

THELONDON less claims for unemployment benefit

had risen to 409,000 last week, out-
Chip designer ARM Holdings was
also stronger, up 2.3 per cent, on top THENEW YORK Greenwood Capital Associates in
Greenwood, South Carolina. “It

REPORT
pacing the consensus forecast for of sharp gains on Wednesday when makes me think it had more to do
REPORT 400,000.
Miners fell 0.7 per cent.
“The jobless data was the catalyst
Microsoft said it was linking up with
ARM to take on Apple in the red-hot
tablet and smartphone arena.
with weather than fundamentals.”
The US dollar rose 0.7 per cent,
helping send crude prices down 2.2

B
RITAIN’S top share index was (for the fall), it’s the first data of the Marks & Spencer bucked a weaker per cent. Oilfield services company

U
pushed down to close lower yes- year to come out and investors are retail trend, adding 3.5 per cent with S stocks slipped yesterday as Halliburton dropped three per cent to
terday, after uncertainty on the thinking it could be setting a tone for analysts expressing optimism about a soft retail sales and a sharp rise $38.22 while US Steel shed 2.5 per
outlook for the US economy the year,” said Joe Rundle, head of trading update due out next Tuesday. in the dollar left investors edgy cent to $59.06.
from weak retail sales and jobs data trading at ETX Capital. Analysts said there were few techni- a day before December’s US The Dow Jones industrial average
dented commodity prices and hit “It could be a reality check, with cal factors preventing further sharp employment report. was down 25.58 points, or 0.22 per
mining and energy stocks. some investors thinking that the gains for the FTSE 100, though many Given a rise of about eight per cent cent, at 11,697.31. The Standard &
Gains in retailer Marks & Spencer, strong gains seen are not justified by remained sceptical whether the in the S&P 500 since the start of Poor’s 500 Index was down 2.71
British Airways and technology firm the state of the economy.” broad trend higher could be main- December, investors could be looking points, or 0.21 per cent, at 1,273.85.
ARM Holdings ensured losses were Investors were watching the data tained. for an excuse to sell stocks if the jobs The Nasdaq Composite Index was up
relatively muted, however. closely yesterday for clues about the Michael Hewson, analyst at CMC report falls short of forecasts that 7.69 points, or 0.28 per cent, at
The FTSE 100 ended 24.35 points or significant US non-farm payrolls due Markets, said the next significant were raised after Wednesday’s strong 2,709.89.
0.4 per cent lower at 6,019.51, though out this Friday. resistance is at the 6,375/80 May 2008 private-sector payroll report. The Nasdaq was buoyed by Nvidia,
the blue chip index is still up two per Payrolls are estimated to have highs. He said this could be reached if “If tomorrow's payroll numbers which surged 14 per cent to $19.33 on
cent after the first three trading ses- increased by 175,000 in December, there is a good non-farm payroll don't live up to expectations, that optimism over a new mobile chip.
sions of 2011 following a 6.7 per cent according to a Reuters poll, instead of number on Friday. “But if you had to could create the correction that some Another gainer was Microsoft, which
gain in December. the 140,000 expected before an inde- twist my arm I would have to say ... I have been predicting,” said Paul rose 2.9 per cent to $28.82 after it took
“After a midday push near the pendent report by ADP Employer think we are overdue a correction Radeke, vice president at a step away from its alliance with
6,100 level, some of the bullishness Services on Wednesday showed a soon,” he added. Minneapolis-based KDV Wealth Intel to team up with ARM Holdings.
has waned slightly as the day has record jump in private jobs last Management. Investors expect a gain Intel fell 0.8 per cent to $20.77.
gone on. A cautious open on Wall month. ANALYSIS l FTSE 6,019.51 of 175,000 in non-farm payrolls in Telecommunications shares were
Street has tempered enthusiasm in Diageo was a significant support 6,100 6 Jan December. among top drags on the Dow, with
London, and a weak performance by for UK large-caps, up two per cent Several big retailers missed esti- AT&T down 1.4 per cent at $29.15 and
the mining sector has pulled the after the maker of Johnnie Walker mates in their December comparable Verizon Communications off 2.6 per
index back,” said Will Hedden, sales and Smirnoff was initiated with a 5,900 sales, news that weighed on consumer cent to $36.23.
trader at IG Index. “buy” rating in a note from Citi, shares. Target fell 6.8 per cent to $54.91 About three stocks fell for every
Energy stocks were the biggest drag which painted a rosy picture for the and Gap was 6.9 per cent lower at two that rose on the New York Stock
on the index as crude, which hit a 27- premium spirits market. 5,700
$20.70. The S&P retail index lost 1.6 Exchange while on the Nasdaq about
month high of $92.58 (£59.52) on British Airways was top gainer, up percent while the S&P consumer dis- five stocks fell for every four that rose.
Tuesday, slipped to below $89 per bar- 4.4 per cent after the airline said its cretionary sector fell 0.7 per cent. About 8.39 billion shares traded on
rel. Energy giant BP fell 0.5 per cent. December traffic figures would have The weakness “was both surprising the NYSE, the American Stock
Metals were also hit on US jobs been up without disruption caused 11 Oct 29 Oct 18 Nov 8 Dec 30 Dec and disturbing” said Walter Todd, Exchange and the Nasdaq.
Business Features | Entrepreneurs
Investors views: what’s hot this year
Private equity and venture capital providers
tell Donata Huggins what business sectors
they are interested in investing in for 2011
2
010 was a big year for entrepreneurs
and small business. The success of the
popular BBC television show Dragons’
Den combined with Prime Minister
David Cameron’s call on Britain’s “doers
and grafters” to save us from recession,
which pushed the work of entrepreneurs
up the news agenda.
But however good your business model
JULIE MEYER | ARIADNE CAPITAL
VENTURE CAPITAL
“
Everything is social – by which I mean that business-
es rely on networks. The hottest businesses to invest
in this year will understand and leverage that using
things such as social media. The most successful businesses
will be those who organise the most inclusive model for
everyone involved. In a music start-up, for example,
the artist, fans and the live events manager – all of
them should get a cut of the upside. I call this
“ecosystem economics.” So Ariadne Capital is
looking out for businesses that utilise people's
data effectively. This is already being done
with search trend words and advertising.
This sort of data use is encouraging peo-
ple to expect something in return for
their custom such as cash back or a gift
to charity. The utilisation of online infor-
mation for commercial ends is moving so
fast that business models such as Tariq
Krim's JoliCloud have sprung up in reac-
tion. He believes that people will start to
prefer to pay subscription fees for internet
privacy. We believe the businesses that follow
these developments will be successful. This does-
n’t simply mean using technology, it means
“going social” to shake up an industry.
TIPS | WHERE TO FIND OUT MORE ABOUT PITCHING TO INVESTORS
l Angels Den is a 4,000 strong network of
investors who offer free business funding clin-
ics and speed funding events. The investors
offer funding of £2m upwards per business.
For more information see
www.angelsden.co.uk.
lThe British Private Equity & Venture
Capital Association (BVCA) is the trade body
and public policy advocate for the private equity
and venture capital industry in the UK. It gives
advice to entrepreneurs about which venture
capital and private equity firms to target for
funding and how to go about it. See
www.bvca.co.uk for more information.
SMALL BUSINESS AND START-UP NEWS
BY DONATA HUGGINS
SMES BURDENED WITH VAT ADMIN TASKS
Small and medium sized businesses (SME)
spend up to one day a week on financial admin
tasks such as VAT returns, monthly accounts
and tax issues according to findings from Regus
research. This has been exacerbated by the
introduction of further employment laws and
the three VAT changes that have been intro-
duced in the last two years. The research also
showed that a third (34 per cent) of companies
with less than ten employees spend three days a
month on time-consuming VAT tasks. More
than a quarter (27 per cent) are bogged down
with the complexities of paying staff for a fur-
ther day each month. And two thirds of small
businesses (67 per cent) believe a day a month
is lost due to bookkeeping chores.
you are going to need funding to get it off
the ground. Bank loans and funds from
friends and family can be a good start but as
you grow, you might need to turn to exter-
nal sources. Getting funding is never easy so
certainly helps to have an idea that is popu-
lar at the moment. We asked five investors
what business sectors they are most inter-
ested in this year.
”
l The Funding Game teaches entrepreneurs
how to fund an early-stage business. The
organisation, backed by HSBC and Business
Angel Capital, holds educational seminars
several times a year. For more information see
www.thefundinggame.co.uk
lThe British Business Angels Association is
the UK’s trade body for angel investors. Its web-
site has a comprehensive directory of investors
including details on the types of business they
are interested in. The organisation offers advice
on writing business plans, appointing lawyers
and accountants. See www.bbaa.org.uk for more
information.
ENTREPRENEURS ARE GETTING YOUNGER
The number of 18-25 year-olds who own their
own business has risen by 4 per cent in the
past three years, says a survey conducted by
Simply Business. This number is now equal to
those in the 35-44 age bracket. This is partly
due to the fact that the number of business
owners over the age of 35 has shown a slow
but steady downturn since 2007, declining by
3 per cent in the 35-44 bracket and 3.6 per
cent among 45-54 year olds. However, cer-
tain areas have seen greater growth than oth-
ers: London has witnessed the largest rise in
young business owners, climbing by 14 per
cent in the last three years. This is closely fol-
lowed by an 11 per cent rise in the North East
and Scotland.
ROSS STEWART| EVOLVE
PRIVATE EQUITY
“
Many investors like me specialise in
turnaround. That means we look for dis-
tressed companies with easily fixable problems
such as recapitalising the business or changing
the management. So we don’t look out for par-
ticular sectors really. We are looking for oppor-
tunities to really make some money. But I do
think that manufacturing will do well. We saw
”
that it was growing at around 5 per cent
in the UK earlier in the week.
DAVID GIAMPAOLO | PI CAPITAL
PRIVATE EQUITY INVESTMENT CLUB
“
There’s no easy
answer to this,
for Pi Capital
looks for good business
models regardless of
the sector. Historically,
we’ve gone for good
companies with good
growth potential rather
than conducting turn-
arounds for those in
distressed circum-
stances. But again we
go where the opportu-
nity lies. It’s all about
finding appropriately
priced risk. In terms of sectors, I think anything
that involves healthcare and fitness has poten-
tial. These follow the demand that will come
from demographic change: the population is
aging and the government is looking for preven-
tative solutions. Or alternatively, anything that
is investing in the growth potential in India or
Brazil. While there’s no such thing as easy
money, if you’ve got a good business
” ”
model and work hard there’s plenty of
potential for success.
SME AND ANGEL INVESTING WORKSHOP
The British Business Angels Association is hold-
ing a winter workshop on 26 January to review
the implications of the measures introduced to
support start-up and high growth businesses,
focusing in particular on early-stage
angel investing. Mark Prisk, the minis-
ter for enterprise and business, will dis-
cuss the government’s proposals, Ken
Cooper from Capital for Enterprise Ltd will
present the proposals for the new Angel Co-
Investment Fund, whilst Stephen Pegge of
Lloyds Banking Group and the British Bankers
Association will present the role that the banks
intend to play in supporting SME growth. The
event will held at the Travers Smith offices, 10
Snow Hill, EC1 from 9.30am
21
FRED DESTIN | ATLAS VENTURE
VENTURE CAPITAL
“
I think that
investors are
moving away from
investing in capital-
intensive business,
manufacturing for
instance can require
millions to get off the
ground. I’m particularly
interested in ecom-
merce. The eBay-style
businesses that are
leveraging the capabili-
ty of social networking
are certainly interesting
at the moment. Mobile
and web based services are becoming more and
more important and there’s certainly growth
potential there. People are starting to realise
that these services are really taking off. Also,
there’s likely to be demand for more transparent
banking models. To say the financial crisis dis-
rupted the market is an understatement. I’ve
recently invested in a business that is aiming to
bring greater transparency to asset
”
management. I reckon we will see
more of this kind of thing in the future.
JAMES BRUEGGER | SERAPHIM
VENTURE CAPITAL
“
There’s a lot
of hype
around web-based
businesses at the
moment, the
Facebooks, Groupons
and such like, they’ve
had some astonishing
valuations lately and
that will no doubt
attract a greater
number of investors into the market for those
types of businesses. I’m personally interested in
“connected home” businesses. Businesses that
make best use of the services that can be deliv-
ered through broadband connections. Smart
energy, for instance, where you can remotely
monitor household utilities, perhaps check the
temperature of your boiler. Likewise, alternative
media services that combine the internet and
television – things like Google TV – are likely to
pick up in the next 12-18 months. Aside from
these sectors, it is good to bear in mind that
Europe rides on the coattails of American
trends. A wave of mergers and acquisi-
tions could also take off here in the
next year.
INCREASE IN VAT THRESHOLD CREATES JOBS
An increase in VAT thresholds could create up
to 35,000 jobs in small firms, finds a report
commissioned by the Centre for Economics
and Business Research. The report found that
increasing the VAT threshold to £90,000
from the current level of £70,000, could save
up to £162m per year from the reduction
in red tape surrounding VAT compliance.
It could also save just over £700m in VAT
payments. The report argues that this
money could then be used to create 35,000
jobs on an average wage. While this will
reduce the amount of money the Treasury
receives from VAT receipts, it will be more
than offset by the potential £13bn that will
come from the increase in VAT to 20 per cent.
 Living
22 CITYA.M. 7 JANUARY 2011

| Property of the Month

History, elegance
and luxurious
style overlooking
Regent’s Park
A crescent of Grade I-listed Georgian homes
has been converted into some of London’s
most spectactular , writes Jeremy Hazlehurst

I
F – as Kirtsy and Phil are always
telling us – the three most impor-
tant things in a property are loca-
tion, location and location, then
there can be few better than Cornwall
Terrace, overlooking Regent’s Park. It’s a
short chauffeur-driven hop from the
Ritz, the Houses of Parliament and
Harley Street.
This Grade I-listed crescent of perfect
British neoclassicism was commissioned
in 1811, having been designed by John
Nash and Decimus Burton, the men
responsible for the most elegant examples
of the Georgian West End. It is now owned
by the Crown Estate and was acquired in
2008 by Oakmayne Bespoke, who
employed 250 craftsmen to expend 83,000
man-hours over two and a half years to cre-
ate eight unthinkably high-end homes,
where there were originally 19.
Each has an official name – Paget
House, Carruthers House and so on –
and a snazzy title that refers to one of
its famous erstwhile occupants and
adds a bit of historical Imperial glam-
our. For example Silk House is also
called the House of the Explorer, named
after James Silk Buckingham, a travel-
writer who lived in Cornwall Terrace in
the 1820s.
The properties range from just over
8,000sq ft to over 14,000, and each has a
mews cottage tacked to the back that
would serve as staff quarters. The largest
has seven bedroom suites, and every
property has a newly-dug basement
entertainment room, while the lower
ground floor houses a gym, spa, cinema
and staff quarters.
Each also has an internal lift, and
three parking bays, including a Bentley-
sized internal garage and ram-proof
garage doors.
Bedrooms, the developers boast, are
bigger than the size of a normal apart-
ment – and they’re not thinking of a stu-
dio flat in Balham.
The houses have stunning views of the
park, and they haven’t stinted on the
gadgetry either – each house has 1,700
miles of cabling for all the high-tech giz-
mos.
Two of the properties are currently
dressed and on the market, while the
others are pretty much blank canvases
and the developer says that wine-cellars,
libraries or swimming pools could be
added – a full interior design job will
cost £1.5-2m on top of the selling price.
Number 6 is currently on the market for
£39m, while Number 11 is £29m.
Number 9 will launch imminently, and
Number 20 in autumn, while the others
will trickle on to the market later.
For more information, contact Meriam
Makiya of Knight Frank on 020 7861 5487 or
email meriam.makiya@knightfrank.com

PROPERTY NEWS
BY TIMOTHY BARBER

WHERE TO BUY IN 2011
Predictions for the property market may be uncer-
tain, but independent homefinders network County
Homesearch has named the areas it expects to be
bucking the trend for sliding prices. These include
perennial favourites like Alderley Edge in Cheshire,
Exeter in Devon and East Hampshire, but it also
names places such as Anglesey, Dalston in East
London, Dunbar in East Lothian and Northallerton
in North Yorkshire in its list of “shrewd invest-
ments.” www.county-homesearch.co.uk
£200K CARPARKING SPACE UNDER HARRODS
What would you pay to be able to park the Jag at
London’s most famous shop? Harrods Estates reckons
£200,000 is about right, which is what anyone will
have to pay to own a 284 square foot space in a car
park underneath the Knightsbridge department store,
on Basil Street. There’s a catch though: you need to
live within a 400m radius of the car park to buy it.
Given a flat went for £100m in nearby 1 Hyde Park,
there’ll hardly be a shortage of deep-pocketed buy-
ers. Call 020 7225 6506 for information.
RENTS TO GO UP THIS YEAR
Tenants hoping for a rent reduction as the cost of
living goes up are likely to be sorely disappointed.
Research produced by buy-to-let specialist
Paragon Group suggests that 41 per cent of land-
lords plan to increase rents over the next year
while 55 per cent will keep rents at 2010 levels.
Of those looking to put rents up, one in 10 are
aiming for a whopping 4-8 per cent rise, while
nearly a third are planning on an increase of up to
4 per cent.
NEW NO FEES MORTGAGE FOR FIRST TIMERS
Halifax has launched a new no fees mortgage for
first-time buyers with a fixed rate of 5.79 per cent
for two years. Typically, a first-time buyer would
have to pay a product fee of £995, £506 on con-
veyancing costs, £320 on a valuation fee and
around £250 on set-up costs. The mortgage is
available to those borrowing up to 90 per cent of
the purchase price. But it is only available if you
hold an Ultimate Reward Current Account or pay
£1,000 or more into a Halifax current account.
 Lifestyle RELAXING BLISS 23
IN THAILAND
| Reviews IN MONDAY’S
TRAVEL SECTION

Here come the Oscar contenders

Colin Firth, James
Franco and Danny
Boyle are among the
hot tips as awards
season gets going

Film
THE KING’S SPEECH
Cert: 12A
hhhhi
RECENTLY missed out on the Best Actor
gong? Check. Playing a monarch? You bet.
With a disability? Hell yes. Colin Firth’s
turn as tongue-tied stammerer George VI
ticks so many Oscar boxes that it’s barely
worth other contenders turning up at next
month’s ceremony, whether he or the film
are any good or not.
Thankfully, the film is classy and satisfy-
ing, and Firth is very good indeed.
Sympathetic and aloof, pitiable and irasci-
ble, daunted by responsibility and fearful of
failure, Firth gives us a King with no more
control over his own destiny than over his
speech. The abdication of his brother
Edward VIII (Guy Pierce) to marry Wallis
Simpson, the country’s inevitable slide into
war with Germany, and the new duty of Above, Geoffrey Rush, unlikeliest of tales, and so it proves. opens with standard thriller fare – sinister
monarchs to deliver live radio broadcasts
represent a historical tide upon which he’s
Film Colin Firth and Helena He uses every visual trick in the book,
and invents a few new ones. We go rocket-
police break up John Brennan’s (Crowe)
family idyll by arresting his wife, Lara
Bonham Carter in the
swept helplessly along, while constantly 127 HOURS King’s Speech. Above, ing through the desert with Ralston before (Elizabeth Banks), on suspicion of murder.
undermined by a crippling stammer with Cert: 18 James Franco in 127 his accident, meet other characters in John thinks she’s innocent, and we’re
its roots deep in his psyche. Hours; below, Russell Ralston’s life through his pain-induced hal- inclined to agree; but the US legal system
Enter Lionel Logue (Geoffrey Rush), an hhhhi Croew in the Nest lucinations, and see his cocky, happy-go- doesn’t and locks her up. When all legal
unorthodox Australian speech therapist, to Three Days. lucky demeanour change to one of cold, avenues fail there’s only one solution:
whom Queen Elizabeth (Helena Bonham problem-solving logic – Franco is brilliant. break her out.
Carter, cutting a glamorous dash as the THE only person who might mount a seri- We face his decisions with him, and watch Unfortunately, being a schoolteacher,
future Queen Mum) turns in desperation. ous challenge to Colin Firth on the Oscar his rations drain away as he does, and yearn John needs a little help from some
Firth’s Bertie (George VI’s birth name was front is James Franco, star of the latest with him for escape into the vast land- friends in low places. Liam Neeson puts
Albert) forms a relationship with Logue of movie from Trainspotting and Slumdog scape. When the moment of gruesome in his five minutes as a world-weary ex-
the kind he’s not used to: one in which Millionaire director Danny Boyle. action comes, we don’t just see it, we hear con who’s managed to break out of jail
both men are equals, using Christian As movies go, it’s one hell of an experi- the internal sound of pain in the most several times. Next up is a foray into
names, forming a bond that can reach past ence. Enjoyable? Well, not exactly – this is, extraordinary way. Pittsburgh’s sordid underworld to
the surface mechanics of the disability. after all, the story of Aron Ralston, the out- So no, not enjoyable. But compulsive, acquire fake ID and an encounter with a
The film’s not perfect – the subtleties of door adventurer who in 2003 found him- gripping, extraordinary and beautiful? All strangely prophetic deaf crook.
the abdication scandal are skated over, and self stuck at the bottom of a remote Utah of those, and more. TB Then there’s a lengthy slog as John
some of the historical exposition clunks. canyon with his arm pinned beneath a learns the tricks of the jail breaking
But it looks beautiful – director Tom boulder. Ralston had to use a penknife to trade – really, a montage would have suf-
Hooper (the Damned United) has an eye for
sumptuous cinematic imagery, while keep-
sever his own limb and save himself – it’s
as terrifying and harrowing a subject as
Film ficed.
As the film enters its final third, things
ing things measured – and is a funny and one can imagine, and Boyle doesn’t THE NEXT THREE DAYS briefly threaten to get interesting, with
appealing look at a strange, unheralded make it seem anything less. Cert: 18 Lara’s assumed innocence called into
story. But there’s more to the film than that. question; but Haggis opts instead to play it
Firth is terrific but so too is Geoffrey One might imagine that the story would hhiii safe and give us thriller fare that’s engag-
Rush – polite, slightly eccentric, slightly make a charismatic documentary like ing in an entirely nuts and bolts kind of
bemused and passionate about his meth- Touching the Void, but a dramatic film way. It’s a lengthy film that’s too content
ods. It’s Rush, in fact, not Firth, who gives about such a story is harder to conceive. RUSSELL Crowe is a desperate man with a to wallow in its comfort zone, and
the film its lightness and charm. Boyle, though, is just the man to eek adren- desperate plan in Oscar-winning director becomes a chore to sit through.
Timothy Barber aline, imagination and soul from the Paul Haggis’ mediocre thriller. Haggis Rhys Griffiths

OUT THIS WEEKEND

PREVIEWS

FILM DVD MUSIC GAMES

SEASON OF THE WITCH Nicolas Cage goes witch SOULBOY Drama set amid the rise of the Northern QUEEN Remastered version of Freddie & Co’s original ANGRY BIRDS (PSP, PS3) Addictive-like-crack app
hunting in this dark medieval hokum. Soul scene in the Seventies. Greatest Hits album. So hardly essential. comes to the Playstation.

IT’S KIND OF A FUNNY STORY It kind of is – a tale of FREAKANOMICS Documentary examining the SARAH GILLESPIE The singer songwriter’s glitchy, ILOMILO (XBOX LIVE ARCADE) Puzzle game, also
teenage depression and redemption – but only a bit. theories of the pop economics book. jazzy album is called In the Current Climate. originally for phones.

ABEL A quirky, enjoyable comedy directed by AGATHA CHRISTIE’S POIROT – COLLECTION 8 ALEXANDRE DESPLAT Er, orchestral soundtrack to GHOST MANIA (WII) Spooky fun for the Wii, or
Mexican actor Diego Luna. More David Suchet. It’s the butler what done it. the King’s Speech. Look, it’s a slow week. the “Wooo” more like. Sorry.
24 Lifestyle | TV& Games CITYA.M. 7 JANUARY 2011
 Sport
Andrew axed as RFU opens door to Woodward
▲
RUGBY UNION
BY FRANK DALLERES
ENGLISH chiefs have begun the
search for a performance director in a
move that opens the door for the pos-
sible return of World Cup-winning
coach Sir Clive Woodward.
Former South Africa boss Jake
White and Australian Eddie Jones are
also leading contenders for the new
role, while elite director Rob Andrew
Carlo: Angry
Blues will put
things right
▲
FOOTBALL
BY JAMES GOLDMAN
CHELSEA manager Carlo Ancelotti
claims his players have been left furi-
ous by a run of form which has seen
them drop out of the title race.
The Italian is understood to be safe
from the ignominy of being sacked
eight months on from leading the
club to a historic double, despite pre-
siding over a run of just one win from
nine games following Wednesday’s 1-
0 defeat at Wolves.
Ancelotti revealed his squad are
determined and that there is also
anger at the club’s predicament
which sees the champions nine
points behind leaders Manchester
United and in danger of missing out
on a top four finish.
He said: “ At this moment we have
to stay focused on the details. I think
that on the training ground every-
thing is OK. The [players] are angry
and they want to move on quickly
from this moment.
“I think that to move on quickly
FOOTBALL TRADER BEN CLEMINSON BRINGS YOU THE BEST FOOTBALL
BETS OF THE WEEKEND
United ready to pile on the misery for Liverpool
MANCHESTER UNITED
LIVERPOOL
SUNDAY – 1.30PM ITV 1
THE FA CUP is never a priority for Sir
Alex Ferguson, but when
Manchester United get drawn
against Liverpool in the third round
you can be certain he will be taking
it seriously.
United have been practically
untouchable at Old Trafford this sea-
son, winning 10 of their 11 league
games. They beat Liverpool 3-2 earli-
has seen his role scrapped. The moves
are part of a wide-ranging shake-up of
the Rugby Football Union (RFU)
announced yesterday at the behest of
new chief executive John Steele.
Andrew will remain in his current
position for several months while the
RFU recruits, and has been invited to
apply for the job of operations direc-
tor. The dissolution of his role, howev-
er, means that he is no longer the
man to whom England team manag-
from this moment we have stay com-
pact together. Not just the players,
not just the manager, not just the
staff – also all the people that are
involved with this club with emotion
with passion can do something to
move on quickly from this moment.”
After losing a clutch of influential
players in Michael Ballack, Ricardo
Carvalho, Joe Cole and Deco in the
summer Ancelotti’s squad lacks depth,
and he hopes to strengthen during the
transfer window.
“Looking [at] the transfer market
there are some opportunities we can
do something,” Ancelotti said. “But I
think it’s private and confidential.”
Ancelotti’s transfer funds will be
boosted to the tune of nearly
£500,000 after the club received com-
pensation from Fifa for letting their
players go to the World Cup.
“We are pleased that we can share
the success of the 2010 Fifa World
Cup with the clubs by providing
them a share of the benefits of our
flagship event,” Fifa President Sepp
Blatter said in a statement.
er this campaign, thanks to a
Dimitar Berbatov hat-trick, and the
Bulgarian has now scored 14 league
goals from 16 games. He has also net-
ted seven times in his past three
matches at Old Trafford, so snap up
some of the 9/2 about him scoring
first.
Liverpool are in the midst of a hor-
rific season, which sunk to a new
low at Blackburn on Wednesday
night. The Reds were simply awful
and they have now won only one of
10 away league games this term.
They have scored a paltry seven goals
on their travels and only Wolves
have scored less goals on the road
this season.
United haven’t won this trophy
“COOK’S BRISBANE HEROICS
SET THE TONE FOR VICTORY”
ANDY LLOYD SELECTS HIS TOP FIVE
MOMENTS OF THE ASHES SERIES: P27
er Martin Johnson reports.
All eyes are now on whom the RFU
will choose to oversee the senior side,
with Woodward, White and Jones the
early frontrunners for the perform-
ance director post.
Woodward famously mastermind-
ed England’s success at the 2003
World Cup, in which Johnson was his
inspirational captain.
White also led the Springboks to
the trophy, coincidentally beating
Ancelotti intends to spend in the transfer window
since 2004 and they lost against
fierce rivals Leeds in the third round
last year. However, they will have no
problems in kicking Liverpool while
they’re down and are a decent bet at
4/6 on Betdaq.
There have been at least three
goals in five of the last six meetings
between these sides, so spread bet-
tors are advised to buy total match
goals at 2.8 with Sporting Index.
The Punter will be back as normal next
week.
POINTERS...
Manchester United at 4/6 with William Hill
Dimitar Berbatov first goalscorer at 9/2 general
Buy total match goals at 2.8 with Sporting Index
25
England in the 2007 final, and has
THE CANDIDATES
made his interest in the job known.
So too has Jones, who was technical Sir Clive Woodward Perfectly suited but doubts
advisor White four years ago and
coached the Australia team that lost over whether he’d leave similar role with British
in the final to Woodward’s England. Olympics Association so close to 2012
Andrew said he would consider the Jake White Another World Cup winner, the
role of operations director, adding: “I South African has thrown his hat into the ring
am very excited about the future of
the game in England, and the re-
Eddie Jones Credited as brains behind SA’s
structuring that will place rugby at 2007 win and says he’s “definitely” interested
the heart of everything the RFU does.”
SACKOMETER
CARLO ANCELOTTI is just one of sev-
eral top flight managers currently
feeling the heat, with the three belea-
guered bosses below also on some
extremely thin ice.
READY FOR HIS P45
Roy Hodgson is a
dead man walking
and only questions
remaining are over
how long the owners
will take to pull the
trigger and who will
be anointed the next
Anfiled messiah.
ON THE BRINK
Avram Grant is the
bookmakers’
favourite to be next
to go. Decent results
at Christmas bought
time but back at the
bottom of the table
after a 5-0 drubbing
from Newcastle.
SAFE – FOR NOW
Even dragging Aston
Villa into the bottom
three hasn’t cost the
Frenchman his job –
yet – although he’d be
advised not to get
too settled in the
Midlands as the axe
surely beckons.
Picture: PA
Results
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email sport@cityam.com
26 Sport CITYA.M. 7 JANUARY 2011

TREMLETT
SEALS
HISTORIC WIN
■ England win in Sydney by an innings and 83 runs
■ First series win Down Under for 24 years
■ Surrey’s Tremlett takes the deciding wicket
▲

CRICKET
BY JAMES GOLDMAN
ENGLAND captain Andrew Strauss
became the first man from these shores
to lift the Ashes urn in Australia in 24
years after his side wrapped victory in
the fifth Test in Sydney yesterday.
Out of keeping with the majority of
the rest of the series, the hosts put up
some resistance on the final morning,
with England having to wait just shy of
two hours to take the remaining three
wickets required to claim a resounding,
historic and much deserved 3-1 series
victory. England were frustrated in their
attempts to knock over the tail, first by
the weather, and then by some stub-
born batting from Steve Smith and
Peter Siddle.
After a half hour delay caused by
showers, Graeme Swann ended the
waiting game when he invited Siddle
into playing one attacking shot too
many. The Aussie bowler miscued the
ball to the leg-side boundary where
Jimmy Anderson took a well judged
catch.
England immediately took the new
ball and Anderson produced a beauty to
get rid of Ben Hilfenhaus, caught
behind by Matt Prior for just seven.
And it was left to Chris Tremlett, who
only came into the side after the second
Test because of an injury to Stuart
Broad, to take the final wicket which
ended over two decades of hurt on
Aussie turf.
The Surrey paceman ripped through
the defences of No11 Michael Beer to
spark scenes of joy amongst the long
suffering Barmy Army fans, who had
been granted free admittance to the
Sydney cricket ground.
On taking the final wicket, Tremlett
said: “It’s an unbelievable feeling. I
could never have expected to be the guy
to take the last wicket. It was a bit of a
tired delivery to be honest and I’m glad
he edged it onto the stumps.
“We came here today and just tried to
put the ball in the right areas and
thankfully we didn’t have to wait too
long to finish the job. The support has
been unbelievable and it’s been great to
see them enjoying themselves today.
They’ll be in for a long night.”

THE ALL-ROUNDER | END OF SERIES SPECIAL

THE BEST OF THE ASHES STATS AND BANTER
STATS OF THE SERIES
Were it still running, Alastair Cook
could fill up an entire show of
Record Breakers with his achieve-
ments this winter. Here are the high-
lights:
l The Essex man has bat-
ted for an astonishing 2,171
minutes – that’s over 36
hours – the most by any
Englishman and the longest
occupation by a batsman
from any country in a five-Test
series.
l Cook's tally of 766 runs so
far is the second highest by
an England batsman in any
series, behind only Walter
Hammond’s 905 in Australia
in 1928-29 (compiled over
nine innings to Cook’s
seven). His average of 127
is the second highest by an
Englishmen in the Ashes.
l Cook has faced 1,438 balls in this ninth highest England stand in history. it could have got very nasty if the ground sat behind Boycs is always
series so far, the equivalent of 247.1 there hadn’t been people interesting. Just got to his 8th test hun-
overs and 86 more balls than the total QUOTES OF THE SERIES on hand to keep them dred. Only 14 to go.” Ω There must be
faced by Simon Katich, Phil Hughes, Events off the field have been apart. They reacted some downside to covering an Ashes
Ricky Ponting, Michael Clarke, Marcus just as, if not more, colourful quickly because series. Being relentlessly lectured by
North and Steve Smith. than those out in the middle we all know the Geoff Boycott on the merits of being
this winter. Here are a few history brought up playing on uncovered pitch-
l Cook became the sixth England classic examples. between es represented karma for Michael
player to score three Ashes hun- these two. Vaughan (left).
dreds in the same series in “I am wondering if Australia They might
Australia. He began the should bother turning be aged 55 “Why do they speak in platitudes. I’m
series with an Ashes up. That’s how bad and 67, fed up of all the media spin and
average of only 26. It’s we are going to be but nei- PR talk. Why don’t they just
now just shy of 50. according to what’s ther of come out and say they played
been said in the them are the rubbish?” – Speaking of
l Cook’s 235 not out media.” Ω Former type of people to give an Boycott, the England legend
in the first Test was Aussie skipper Allan inch.” Ω A Channel 9 got the hump after the defeat
the sixth best Ashes Border (left) won- source’s take on the in Perth.
score by an Englishman dered what all the alleged dust-up which
and he also surpassed fuss was about prior took place between “I've never said this before,
Sir Don Bradman for the to the series. A clear sworn Ashes enemies but I lost the captaincy and got
highest Test score at the example of the media Ian Botham (right) and rid of it for the good of English
Gabba. knowing more than the so Ian Chappell during cricket.” – Kevin Pietersen tells
called ex-pro. the Adelaide Test. us we won the Ashes because
l Cook and Jonathan Trott, who hit he got sacked and not because
135 not out in Brisbane, put on 329, the “They went for each other all right and “The drive back from Ali Cook scored millions of runs.
CITYA.M. 7 JANUARY 2011 Sport 27

High five: Series-defining moments

ASHES COMMENT
ANDY LLOYD

O
UR cricket columnist, former
England batsman and
Warwickshire chairman Andy
Lloyd, has been poring over the
Ashes action and selects his top five
moments of the series.
1. COOK’S DOUBLE TON IN BRISBANE
England were looking down the bar-
rel halfway through the first Test
before their top three responded in
record breaking fashion. Andrew
Strauss and Jonathan Trott both
scored centuries, but it was the
innings of Alastair Cook that really
caught the eye. He came into the
series as the supposed weak link, but
his 235 not out immediately sent the
Aussies back to the drawing board
and really laid down a marker for the
rest of the series. Collingwood’s
catch (above), KP’s
2. KP COMES TO THE PARTY double ton and
They won’t admit it, but if there’s one Johnson’s Perth spell
player the Aussies fear, it’s Kevin were all great Ashes
Pietersen. His double century in moments
Adelaide helped England set-up their Pictures: GETTY / PA
victory, but it was the way he took the
game to the Australian attack that
really thrilled. It also confirmed that
he’d overcome the mental, technical
and physical problems that had
dogged him for the previous 18
months. To see their star batsman fill
his boots gave England a huge lift.

3. JOHNSON’S PERTH MASTERCLASS

Mitchell Johnson’s certainly a mercu-
rial talent, but one Australia need to
learn to handle properly. He’s not
been given the best possible opportu-
nity to shine in this series by the selec-
tors or his captain. His spell in Perth,
where he took six quick wickets, was
as a good a display of fast, accurate,
swing bowling you’re ever likely to
Anderson took see. England, for once this winter,
the catch that simply had no answer.
got rid of siddle
4. COLLINGWOOD’S MIRACLE CATCH
Picture: GETTY Colly’s produced so many memorable
moments in the field it’s hardly a sur-
prise when you see him pull off catch-
es like the one which got rid of Ricky
Ponting in Perth. But that one was
seriously special. The Durham bats-
man announced his retirement from
Test cricket on the fourth morning of
the fifth Test, and there’s no doubt
he’ll be missed. England’s improve-
ment as a fielding side in general, not
just in this series, where they’ve been
miles better than Australia, is largely
down to the way he leads from the
front in an often unappreciated
department of the game.
5. WINNING THE TOSS IN MELBOURNE
Not a spectacular note to end on, but
in my eyes it was the moment I knew
the Ashes were coming home. Had
the Aussies had the chance to bowl
first on a green wicket in humid con-
ditions, we might not be sitting in the
happy position we are now. England,
Chris Tremlett and James Anderson
in particular, exploited the condi-
tions at the MCG expertly and it was
just wonderful to behold.