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    The Odey European fund, which fell 20 per cent in 2011, is up 14 per cent so far this year. The Eurozone's blue-chip Euro STOXX 50 gained 4. Per cent and the FTSE 100 rose two per cent During the month. The figures mark a return to form for the industry after last year, when the average hedge fund lost around five per cent.

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    The Odey European fund, which fell 20 per cent in 2011, is up 14 per cent so far this year. The Eurozone's blue-chip Euro STOXX 50 gained 4. Per cent and the FTSE 100 rose two per cent During the month. The figures mark a return to form for the industry after last year, when the average hedge fund lost around five per cent.

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    617 views36 pages

    Cityam 2012-02-07

    Uploaded by

    City A.M.
    The Odey European fund, which fell 20 per cent in 2011, is up 14 per cent so far this year. The Eurozone's blue-chip Euro STOXX 50 gained 4. Per cent and the FTSE 100 rose two per cent During the month. The figures mark a return to form for the industry after last year, when the average hedge fund lost around five per cent.

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    of 36

    FTSE 100 t5,892.20 -8.87 DOW t12,845.20 -17.03 NASDAQ t2,901.99 -3.67 /$ 1.58 unc / 1.21 +0.01 /$ 1.

    1.21 +0.01 /$ 1.31 unc


    Hedge fund
    stars toast
    top January
    STAR traders Crispin Odey and Pierre
    Lagrange led a recovery for the belea-
    guered hedge fund industry in
    January as European bank stocks
    soared 10 per cent.
    The Odey European fund, which fell
    20 per cent in 2011, is up 14 per cent so
    far this year after taking a bullish
    stance on banks and the media as well
    as individual stocks such as Pendragon
    and Sports Direct.
    David Stewart, chief executive of
    Odey, said: Our stock selection has
    been good. It wasnt a stockpickers
    year last year but we held our nerve.
    And Lagrange made 4.7 per cent in
    GLGs European long-short hedge fund
    in January following a return of 7.2 per
    cent last year.
    GLG, part of Man Group, the worlds
    largest listed hedge fund manager, also
    saw gains of 4.2 per cent in John
    Whites Alpha Select fund and 3.9 per
    cent in its Emerging Markets fund.
    During the month the Eurozones
    blue-chip Euro STOXX 50 gained 4.3
    per cent and the FTSE 100 rose two per
    cent.
    The figures mark a return to form
    for the industry after last year, when
    the average hedge fund lost around
    five per cent. Funds gained 1.72 per
    cent last month, according to Hedge
    Fund Researchs HFRX index.
    Equity funds were among the best
    performers, gaining 2.07 per cent,
    after the European Central Bank flood-
    ed banks with 489bn (405bn) in
    loans in December. More cash is
    expected to follow later this month.
    BY PETER EDWARDS
    HEDGE FUNDS

    Sir David Higgins has said he will forego his bonus Picture: REX
    THE CHIEF executive of Network Rail
    has caved in to political pressure and
    waived his right to a six-figure bonus.
    Sir David Higgins and five other
    Network Rail directors yesterday
    decided to forego any entitlement
    to bonuses and will instead offer the
    proceeds to safety improvements.
    The announcement came after
    transport secretary Justine Greening
    threatened to exercise her right to
    vote against the proposed 20m
    bonus pool at Fridays annual general
    meeting, even if her vote was not
    enough to block the resolution being
    passed.
    Network Rails six board members
    were entitled to receive up to 60 per
    cent of their annual salary as a bonus
    this year as well as longer-term bonus-
    es of up to 500 per cent after five years
    if certain targets were reached.
    Sir David was eligible to collect a
    336,000 payout in addition to his
    560,000 basic salary.
    In a statement yesterday, the com-
    pany said the meeting would be
    adjourned and its board will take
    the opportunity to reflect further on
    how to incentivise performance in
    the company.
    Sir David said: Even if this situa-
    tion does arise this year, I and my
    directors decided last week that we
    would forego any entitlement and
    BY KASMIRA JEFFORD
    POLITICS

    instead allocate the money to the


    safety improvement fund for level
    crossings.
    Chairman Rick Haythornthwaite
    insisted that Fridays planned meet-
    ing was to not to approve a specific
    annual bonus payment but to amend
    a previously approved long term
    incentive scheme to ensure addition-
    al external scrutiny of performance.
    The company which runs the rail-
    way tracks and receives 4bn from
    the taxpayer each year has faced
    criticism over its safety record and
    poor track conditions.
    More than 30 Labour MPs signed a
    House of Commons motion last week,
    which cited major asset failures, con-
    gested routes and poor management
    of track condition as reasons for
    poor performance of the UK rail net-
    work in 2011.
    Greening said Sir Davids decision
    which comes in the wake of the ongo-
    ing row over banker bonuses and
    executive remuneration was sensi-
    ble and welcome.
    I have made it clear to Network
    Rail at every stage that this proposed
    package did not go far enough in
    reflecting the need for restraint, she
    said.
    Institute of Directors boss Simon
    Walker said the decision marked a
    good day for owner activism and
    called on the coalition to revisit
    Network Rails governance structure.
    ALLISTER HEATH: P2
    Certified Distribution
    28/11/11 till 01/01/12 is 92,879
    www.cityam.com FREE
    DOZENS OF GREAT
    PRESENT IDEAS
    VALENTINES DAY
    GIFT GUIDEP29-32
    BUSINESS WITH PERSONALITY
    ADVISERS to Glencore and Xstrata
    were last night trying to convince
    investors that the proposed manage-
    ment team will be able to work
    together following the 50bn merger.
    Under the terms of the proposed
    deal, Xstrata chief executive Mick
    Davis is expected to be appointed
    chief executive of the combined
    group, with Glencores Ivan
    Glasenberg set to accept being
    deputy chief executive.
    This arrangement is what we
    needed to do to get the deal done,
    said one source close to Glencore.
    Investors, however, most of whom
    have been made insiders ahead of
    the official announcement today,
    are concerned that Glasenberg will
    not be happy to be number two to
    Davis for long. They worry that the
    two men might have conflicting
    strategies and find it difficult to
    work together.
    Glasenberg would be a major
    shareholder in the merged group.
    He has a 15 per cent stake in
    Glencore, which floated in London
    last year.
    Some sources have talked about a
    discussion about a Granita-style
    agreement dubbed such after an
    unenforced agreement between
    Tony Blair and Gordon Brown for
    Blair to step down at an agreed
    time in which Davis might agree to
    step down after a short period, hav-
    ing received a multi-million pound
    share-based retention deal.
    Glencore shares fell 4.52 per cent
    yesterday on fears that the commodi-
    ties trader might offer more than
    expected for miner Xstrata.
    Glencore is under pressure from
    some Xstrata shareholders, such as
    Schroders Richard Buxton, to offer a
    premium higher than an expected
    eight per cent on Xstratas share
    price in its all share offer.
    One source said: Investors are
    worried about who does what and
    who gets what.
    BY DAVID HELLIER
    MINING

    Issue 1,565 Tuesday 7 February 2012


    ITS ALL CHANGE FOR
    THE CITYS LAWYERS
    PRIVATE EQUITY FIRM
    INVESTS IN PARABISP8
    NOW RAIL CHIEFS
    SURRENDER BONUS
    Investors fear mining giants Granita deal could end in tears
    News
    2 CITYA.M. 7 FEBRUARY 2012
    Greek delays
    anger Merkel
    TIME is running short in the Greek
    negotiations, and its politicians must
    make up its mind fast, German leader
    Angela Merkel said yesterday.
    But instead of concluding talks last
    night as planned, the latest meeting of
    Greek politicians with technocratic
    Prime Minister Lucas Papademos was
    postponed until today.
    I honestly cant understand how
    additional days will help, Merkel said.
    A lot is at stake for the Eurozone.
    Papademos said on Sunday that
    party leaders had accepted the need
    for additional spending cuts worth 1.5
    per cent of GDP in 2012, improving
    competitiveness through cutting
    wages and non-wage labour costs, and
    the recapitalisation of banks.
    However, details of reforms still
    need to be finalised, and protracted
    talks with private sector bondholders
    are still not finished despite numer-
    ous deadlines passing.
    The debt and bailout talks all need
    to be successfully concluded before 20
    March when 14.5bn of debt repay-
    ments are due, which the government
    may not be able to pay.
    Meanwhile European Council
    President Herman van Rompuy told
    Greece and other EU countries they
    need to take greater responsibility for
    their actions and consider their
    impact on other members.
    BY TIM WALLACE
    EUROZONE

    BAE CONSIDERS CUT TO TYPHOON


    PRICE
    BAE Systems, Europes largest defence
    contractor, has signalled its willing-
    ness to reduce the price of the
    Eurofighter Typhoon to win back a
    $20bn Indian tender from Frances
    Dassault. Ian King, BAEs chief execu-
    tive, told the Financial Times that
    BAE needed to consult with its part-
    ners in Germany, Italy and Spain, but
    said all options were open.
    FRESH BLOW TO TCI AS ANALYST
    JOINS RIVAL
    The Childrens Investment Fund has
    lost another of its stars to rival hedge
    fund Thlme Partners in a sign of
    tensions among top managers at the
    activist investor. Oscar Hattink, a
    portfolio manager at the $6bn TCI
    and a firm partner since 2008,
    resigned last year, leaving the firm in
    August. He has now surfaced as a
    partner at Thlme, people familiar
    with the matter told the Financial
    Times.
    VERIZON TIE-UP SET TO CHALLENGE
    NETFLIX
    Verizon and Coinstar, owner of the
    Redbox DVD rental service, are team-
    ing up to take on Netflix. The two
    companies announced a joint ven-
    ture yesterday that was thin on
    details but telegraphed their ambi-
    tion to compete in the booming mar-
    ket for subscription video services.
    TNT EXPRESS SHAREHOLDER FIGHT
    GROWS
    Dutch express mail company TNT
    Express is engaging in an open feud
    witgh a group of activist sharehold-
    ers, rejecting their request to appoint
    three new directors on the grounds
    they had been paid directly by the
    shareholders. In a letter of response,
    the leader of the shareholder group
    said TNT Expresss lack of good faith
    and reasonableness was stunning.
    COURT RULING OFFERS HOPE TO DRUG
    COMPANIES OWED 6BN
    British drugs companies owed mil-
    lions by Spanish health authorities
    may resort to the courts to get their
    money back. According to the indus-
    try lobby group Farmaindustria,
    regional authorities owe 5.83bn
    (4.87bn) to companies including
    Astrazeneca, Shire and
    GlaxoSmithKline.
    FRENCH BUSINESSES READY TO PACK
    BAGS FOR BRITAIN
    Dozens of French businesses are con-
    sidering crossing the Channel if
    Franois Hollande defeats Frances
    current President Nicolas Sarkozy in
    the election this spring, as the opin-
    ion polls predict, The Times has
    learnt. His programme is also likely
    to drive wealthy French families to
    Britain, according to lawyers and
    accountants.
    3M RISKS TURBULENCE WITH $250M
    DEAL TO REPLACE FIVE PRIVATE JETS
    US industrial group 3M is to risk
    antagonising shareholders by spend-
    ing up to $250m (158m) replacing
    its fleet of private jets. The company
    is understood to be looking at plans
    to update its five jets, including buy-
    ing state of the art Gulfstream G550s.
    FARMERS GUARDIAN IS SOLD AS UBM
    SHIFTS FROM PRINT
    UBM forged its reputation producing
    trade magazines such as Property
    Week and Famers Guardian, but has
    now offloaded its medical and agri-
    culture titles as part of its ongoing
    shift away from print. The founders,
    of Briefing Media, Neil Thackray and
    Rory Brown, yesterday acquired the
    portfolio of magazines, which also
    trade publication Pulse, in a 10m
    deal backed by GCP Capital Partners,
    the private equity fund.
    DISNEY AND UNIVISION IN TALKS TO
    LAUNCH NEWS CHANNEL
    Walt Disney and Univision
    Communications are in talks to cre-
    ate a new 24-hour cable-news chan-
    nel, in an effort to keep pace with
    changing demographics among US
    Hispanics and reach a new audience
    of English speakers, people familiar
    with the negotiations said. The chan-
    nel would plunge Disneys ABC News
    more directly into the fractious cable-
    news wars, competing alongside CNN
    and Fox News.
    HASBRO NET SLIPS ON HIGHER TAXES
    Toy maker Hasbro said yesterday that
    higher income taxes and choppy sales
    weighed on its profit in the fourth
    quarter, and business in the US and
    Canada last year was weaker than
    expected. The maker of the
    Transformers and Nerfs said sales in
    the US and Canada slid two per cent.
    WHAT THE OTHER PAPERS SAY THIS MORNING
    Britains rail industry is a giant mess
    ONE of the problems with Britains rail
    industry is its nightmarish, confusing
    structure. It is part private, part gov-
    ernment owned; part financed by
    users and part by state subsidies; and
    few people understand the real costs of
    the railway services they use, or who is
    really in charge. When it comes to rail
    travel, politics has trumped economic
    rationality for many decades and
    continues to do so today.
    The industry was grossly misman-
    aged and under-invested during the
    1970s and 1980s, when it was in full
    public ownership; its artificial break-
    up on functional rather than geo-
    graphic lines in 1994 was flawed; the
    semi-privatisation of 1996 (massive
    subsidies remained) was doomed from
    the start, even though services
    improved and passenger numbers
    rocketed. The privatised firms inherit-
    ed a dilapidated infrastructure which
    triggered human tragedy, financial
    catastrophe and partial renationalisa-
    tion. The set-up today is one giant, cor-
    poratist mess which satisfies nobody.
    Subsidies are huge, fares are increas-
    ingly steep, resources are misallocated
    and services are not good enough.
    Network Rail isnt owned by any-
    body: it does not have shareholders,
    but 78 members, who can appoint and
    remove directors. The department for
    transport which subsidises it to the
    tune of 4bn a year is a special mem-
    ber. This weird structure emerged
    from one of the murkier affairs of the
    Labour years: the dubious way
    Railtrack the previous private infra-
    structure operator was forced into
    bankruptcy in 2001-02 by a govern-
    ment that wanted to renationalise it
    but didnt have the guts to say so, and
    then shoved its successor into a struc-
    ture designed purely to maintain its
    massive liabilities off the public sec-
    tors books. Yet its 20bn debt capital
    markets programme is underwritten
    by the government, which would pock-
    et any proceeds if the company were
    sold. The Strategic Rail Authority holds
    reserve powers. Network Rail is a
    creature of off balance sheet account-
    ing, an incoherent hybrid in desperate
    need of reform.
    Yesterdays bonus climbdown con-
    firms the government controls the
    organisation; its status must reflect
    this. Directors bonuses will be paid
    into a safety fund to signal contrition
    for accidents in 2005 and 2007, for
    which the company faces prosecution
    (though Sir David Higgins, the CEO,
    has only just joined the firm). Talk
    about PR being elevated over sub-
    stance: either Network Rail is spending
    enough on safety; or it isnt. If the lat-
    ter, then this is a disgrace that needs to
    be remedied immediately; 1m wont
    make much difference. If it is the for-
    mer, then why bother? By implying
    pay is reducing spending on safety, the
    directors will now face claims that any
    money they are handed in future
    would jeopardise passengers safety.
    That said, I dont feel sorry for them.
    I was angered at Stephen Hesters treat-
    ment: he was hired on the assumption
    that RBS would be treated like a pri-
    vate firm, with private levels of pay, to
    turn the bank around; he was sold a
    pup. The Network Rail situation is dif-
    ferent; a radical shake-up of contracts
    and structures is required. But there
    are dangers: first, that nobody of talent
    or ambition will ever again want to
    join public sector firms; and second
    that the war on wealth will move from
    public to private sector, and that even
    successful, unsubsidised individuals
    who are creating profits and jobs are
    going to be demonised. I hope the
    coalition knows what it has unleashed.
    allister.heath@cityam.com
    Follow me on Twitter: @allisterheath
    NATIONAL Australia Bank, the owner
    of the Yorkshire and Clydesdale
    banks, has put its troubled UK opera-
    tions up for strategic review as it
    reported a 7.7 per cent rise in first-
    quarter profit across the group.
    NAB chief executive Cameron
    Clyne said it was forced into a review
    since it now expected the UK econo-
    my to experience a much longer peri-
    od of subdued growth due to the
    governments austerity programme
    and the ongoing sovereign debt crisis
    in the Eurozone.
    [NAB] will work with UK manage-
    ment to appropriately reposition its
    business mix and structure for the
    changed economic environment and
    improve returns, he said, with the
    review due to be completed in May.
    Tough market conditions also
    forced Australian bank Macquarie
    Group to last night issue a dramatic
    profit downgrade, warning its 2012
    earnings will fall by 25 per cent.
    BY KASMIRA JEFFORD
    BANKING

    Clydesdale up for review


    Cameron Clyne, chief executive of National Australia Bank, has put Clydesdale on review
    NEWS | IN BRIEF
    Britain decries Syria bloodshed
    Britain yesterday recalled its ambassador
    from Damascus and the US closed its
    embassy in Syria in a bid to force
    President Bashar al-Assad to leave power
    and halt the fast-growing death toll. As
    Syrian troops targeted the city of Homs,
    Foreign secretary William Hague hit out
    at Russia and Chinas veto of a recent UN
    Security Council resolution on Syria and
    said the government would redouble
    efforts to stop the violence.
    BofA case wins class-action status
    Shareholders suing Bank of America
    have won class-action status for their
    lawsuit, which accuses the bank and
    various executives of fraudulently mis-
    leading them about the 2008 takeover
    of Merrill Lynch and the size of Merrills
    losses and bonus payouts.
    Ferragamo pays record UK rent
    Italian luxury shoemaker Salvatore
    Ferragamo has agreed a deal to pay a
    record UK rent at its Bond Street store
    that will break the 1,000 per square
    foot mark for the first time. The retailer
    will extend the lease of its store at 24
    Old Bond with landlord NFU Mutual.
    EDITORS LETTER
    ALLISTER HEATH
    Editorial Statement
    This newspaper adheres to the system of
    self-regulation overseen by the Press Complaints
    Commission. The PCC takes complaints about the
    editorial content of publications under the Editors
    Code of Practice, a copy of which can be found at
    www.pcc.org.uk
    Printed by Newsfax International,
    BeamReach 5 Business Park,
    Marsh Way, Rainham, Essex, RM13 8RS
    Distribution helpline
    If you have any comments about the distribution
    of City A.M. Please ring 0207 015 1230, or email
    distribution@cityam.com
    Greek PM Papademos
    failed to conclude talks
    with political leaders,
    delaying their meeting
    until today
    4th Floor, 33 Queen Street, London, EC4R 1BR
    Tel: 020 3201 8900 Fax: 020 7248 2711
    Email: news@cityam.com www.cityam.com
    Editorial
    Editor Allister Heath
    Deputy Editor David Hellier
    News Editor David Crow
    Acting Night Editor Marion Dakers
    Business Features Editor Marc Sidwell
    Lifestyle Editor Zoe Strimpel
    Sports Editor Frank Dalleres
    Art Director Gavin Billenness
    Pictures Alice Hepple
    Commercial
    Sales Director Jeremy Slattery
    Commercial Director Harry Owen
    Head of Distribution Nick Owen
    VIRGINMEDIA LINE RENTAL 13.90 APPLIES. SERVICES AVAILABLE INVIRGINMEDIA CABLEDSTREETS ONLY. Subject to network capacity, status and credit checks. 18-month minimumcontract applies. If you cancel during your minimumcontract period an early disconnection fee will apply. This ofer requires you to pay by Direct Debit and use ebilling. If you prefer not to pay by Direct Debit you will incur a monthly 5 payment handling fee payable to Virgin Media Payments Ltd. If you would like paper bills, the fee is 1.75 a month.
    Equipment remains property of Virgin Media. Ofer ends 31/03/12: Newcustomers only (subject to status and credit checks): To get bundle discount applied for three months you must take a bundle containing Broadband XL with a phone line. Adiscount of 13.50/month will be applied with a Broadband XL phone bundle. Standard prices apply after rst three months. Virgin Media reserves the right to withdrawor amend discount if you change any part of your ofer package. May not be used in conjunction with any other ofer unless stated by Virgin Media.
    Headline bundle prices (i.e. prices before discount is applied) may vary during this ofer. *Source: Ofcoms reviewof UK broadband speeds published in July 2011, based on OfcomMay 2011 test results. General: All prices include VAT. Information correct at Jan 2012. Payment may be required in advance. Further legal stuf applies. Go to virginmedia.comfor details.
    Our up to 30Mb broadband is four times faster than
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    0800 052 1341
    SHARES in EFG-Hermes, the London-
    listed Arab bank, dropped four per
    cent yesterday after Egyptian authori-
    ties banned its co-chief executive from
    leaving the country.
    Yasser el-Mallawany (pictured) was
    prevented from catching a flight to
    the United Arab Emirates on Sunday
    night amid allegations of links to last
    weeks football riot in which 74 people
    were killed. EFG-Hermes strongly
    denies any link to the Port Said
    tragedy.
    The firms stock fell
    4.51 per cent to LE11.01
    (Egyptian pounds) on
    the Egyptian
    Exchange yesterday
    and its Global
    Depository Receipt list-
    ing was down 4.24 per
    cent to 3.73p in London.
    El-Mallawany, one of
    two EFG chief executives, is
    one of several
    business leaders who have been
    banned from foreign travel by the pub-
    lic prosecutor in the period since the
    overthrow of president Hosni
    Mubarak last year.
    EFG has come under the spotlight
    for its association with Mubaraks
    younger son Gamal, who owns 18 per
    cent of the investment banks sub-
    sidiary EFG-Hermes Private Equity. Last
    night EFG said neither the bank nor el-
    Mallawany have been charged, adding:
    The firm has been informed that the
    ban was issued as a precautionary
    measure.
    EFG-Hermes Private Equity gener-
    ates no more than seven per cent of
    EFG Hermes Holdings total revenue.
    EFG has said it does not manage
    any funds or portfolios for Mubarak
    or his family and did not receive
    any special privileges from the gov-
    ernment.
    Mubarak, his two sons and
    some former officials and minis-
    ters are on
    trial for cor-
    ruption.
    Arabian bank
    falls in London
    as boss held
    LAZARD was pushed into the red in
    its fourth-quarter of last year due to
    a slowdown in trading and a deci-
    sion not to defer bonus pay-outs, the
    US investment bank revealed yester-
    day.
    It reported a pre-tax loss of $3.4m
    (2.15m) in the fourth quarter, com-
    pared to a profit of $134m during
    the equivalent period in 2010.
    But the bank said that its disci-
    plined approach to accounting for
    staff costs was partly to blame for the
    loss.
    Unlike many of its rivals, Lazard
    opted not to defer more of its bonus
    pay-outs to bankers this year in
    response to the weak economic cli-
    mate. Instead, it deferred 20 per
    cent, the same as last year.
    That meant that its expenses from
    paying staff was roughly flat in the
    quarter (up three per cent to $337m)
    while revenues slumped 23 per cent
    to $468.7m.
    The investment bank was worst hit
    in its capital markets advisory busi-
    ness, which saw revenues fall by 59
    per cent to $17.7m. Its M&A advisory
    business also saw top line income
    drop by over a third to $167m.
    The restructuring division benefit-
    ed from a rise in revenues, however,
    growing 58 per cent to $75.7m.
    Lazard bonus
    payments wipe
    out its profits
    BY PETER EDWARDS
    POLITICS

    BY JULIET SAMUEL
    BANKING

    News
    3 CITYA.M. 7 FEBRUARY 2012
    THE QUEEN CELEBRATES DIAMOND JUBILEE
    Sixty years after ascending the throne, Queen Elizabeth celebrated her reign with a royal
    visit to see children in Kings Lynn, Norfolk. The Queen, 85, will enjoy four days of more
    lavish events in July, including a 1,000-ship pageant on the River Thames and a concert
    at Buckingham Palace. Yesterday she vowed to dedicate myself anew to your service.
    CHANCELLOR George Osborne is creat-
    ing a dangerous concentration of
    power and information in the Bank of
    England, according to opposition crit-
    ics of his new financial regulation bill.
    Shadow chancellor Ed Balls said
    that it was a mistake to channel infor-
    mation only through the BoE gover-
    nor in the event of a crisis.
    He complained that the
    heads of the new statutory
    bodies that will replace the
    FSA will not be able to
    air their views direct-
    ly to Number 11.
    The statutory
    stakeholders are
    kept out of the
    room in his own
    memorandum,
    said Balls. The con-
    centration of power
    and access to the
    chancellor in the
    government is highly
    unstable.
    Balls was mocked, however, for his
    prominent role in designing the previ-
    ous regulatory regime that presided
    over the crisis.
    The new bill gives the Treasury
    sweeping powers to direct the Bank in
    the event of a crisis if the latter con-
    siders there to be a material risk of cir-
    cumstances arising in which public
    funds would be at risk.
    But the role assigned to the heads of
    several new regulatory bodies in the
    event of a crisis is not specified.
    MPs also raised concerns that the
    new regulator could prioritise the sta-
    bility of the graveyard over growth.
    George Mudie MP of the Treasury
    Select Committee said the Bank
    should have regard to growth and the
    governments economic policies.
    Balls warns
    Osborne over
    Bank powers
    INVESTMENT banks are paying out
    unequal pay packets on an unprece-
    dented scale, according to industry
    experts.
    Recruiters who have been in the
    business for decades say they have
    never seen such a disparity between
    those being amply rewarded to keep
    them and those whose bonus has been
    scrapped entirely often in an attempt
    to persuade them to leave.
    So far this year weve seen the
    greatest polarisation between the
    haves and have-nots. Weve also seen a
    lot of zeroes, says Jonathan Eckman, a
    partner at executive search firm
    Aubreck Leung.
    On average, many investment banks
    have slashed pay by 30 per cent, but
    the top-line figure disguises a mixed
    pictures, say headhunters.
    You cant just look at the headline
    number, says Eckman. For instance if
    someone was paid down 20 per cent
    you might think, He did OK this year.
    But if he was paid down 40 per cent
    last year then the picture is a little less
    rosy. Weve never seen this aggressive
    polarisation in the pools before.
    He added that many managing
    directors took the pain in order to
    keep up the amounts they can pay
    more junior associates and vice presi-
    dents so as to keep hold of top talent.
    New extremes
    for investment
    bank bonuses
    BY JULIET SAMUEL
    REGULATION

    BANKING

    The Financial Services Bill, released a week


    ago, reached its second reading yesterday.
    It replaces the FSA with two new Bank of
    England committees and one independent com-
    mittee.
    FAST FACTS | NEW FINANCIAL BILL
    News
    4 CITYA.M. 7 FEBRUARY 2012
    FSA chief Hector Sants has sought to
    reassure firms that the governments
    new regulatory regime would not
    produce duplication.
    In a briefing to bankers, Sants said
    the new bodies supervising financial
    firms will be able to act independ-
    ently as they will be pursuing differ-
    ent goals but stressed that this
    approach is one of independent but
    coordinated decision making.
    For example, he said that firms fill-
    ing in their ARROW risk-assessment
    forms will only file one form. But
    there will be two supervisory teams
    assessing the risks against their new
    objectives.
    City lawyers expressed doubts over
    the promise to coordinate, with one
    calling it a One Man Two Guvnors
    style of regulation.
    Sants also revealed that the FSA
    will begin operating on a twin
    peaks model along similar lines to
    the new system in April.
    Sants: we will coordinate
    legion of new regulators
    FSA chief Hector Sants has promised not to duplicate procedures Picture: REUTERS
    BY JULIET SAMUEL
    REGULATION

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    BORIS Johnson has made a bid to
    control every rail service in London
    as part of an ambitious plan to sim-
    plify ticket structures and improve
    reliability and service frequency.
    Johnson said the current
    Byzantine fares-setting policy will
    be abolished and that his plan
    could save up to 100m over 20
    years by removing the need for pri-
    vate franchisees to build risk pre-
    miums into their ticket prices.
    The Mayors proposal would see
    control of franchises on suburban
    lines in the capitals rail network
    devolved from central government
    to Transport for London (TfL).
    TfL would have direct control
    over the lines, setting standards
    before hiring a third party to run
    the service, following the model of
    the existing London Overground
    services.
    Johnson has targeted parts of
    the South Eastern (pictured)
    and Greater Anglian network
    as priorities for devolution
    when the existing franchises
    come up for renewal in 2014.
    This would see TfL control-
    ling services outside London
    to Sevenoaks, Dartford and
    Hertford.
    Boris wants to control
    every railway in London
    Boris could control trains to Sevenoaks and Dartford
    ANALYSIS l Southeast London routes proposed for devolution
    Westminster
    Charing
    Cross
    Victoria
    Brixton
    West
    Dulwich
    Catford
    Bridge
    Elmers End
    WoolwichArsenal
    Hays
    Eltham
    Dartford
    Slade Green
    Sidcup
    Knockholt
    Sevenoaks
    Southwark
    Lambeth
    Lewisham
    Bromley
    Bexley
    Greenwich
    Merton
    Sutton
    Croydon
    KEY
    Devolved
    stations
    Other stations
    BY JAMES WATERSON
    TRANSPORT

    THE UKS financial services sector is


    deeply attractive to foreign investors, a
    study by TheCityUK claimed yesterday.
    Over a quarter of the 50,000 firms in
    the sector are owned overseas, rising to
    33 per cent for companies valued
    between 25m and 100m, and 45 per
    cent for businesses firms worth over
    100m.
    Of that investment, 45 per cent
    comes from the US, 26 per cent from
    Europe and 16 per cent from Asia.
    Chris Cummings, chief executive of
    TheCityUK, hopes the governments
    strategy of commercial diplomacy will
    help boost those shares and increase
    economic growth.
    Foreign cash
    flows to City
    BY TIM WALLACE
    FINANCIAL SERVICES

    News
    5 CITYA.M. 7 FEBRUARY 2012
    HEDGE fund tycoon Michael Farmer
    has been appointed as the
    Conservative Partys co-treasurer, after
    Lord Stanley Fink said he would step
    down from the role in March to focus
    on business interests and philan-
    thropic work.
    Farmer, a prominent Tory donor,
    has more than 40 years trading expe-
    rience on the London Metals
    Exchange and founded RK Capital
    Management in 2004. The firms com-
    modities fund Red Kite is a big
    investor in copper and other metals.
    CMC Markets founder Peter
    Cruddas will take Finks place on the
    Conservative Party board.
    Tories pick a
    co-treasurer
    BY MARION DAKERS
    POLITICS

    MOST plans put forward by European


    banks to improve the industrys
    resilience are in line with what was
    asked of them, their regulator said on
    Monday, as some banks made last-
    ditch efforts to meet the demand to
    lift capital.
    Italys Banco Popolare unveiled a
    plan to raise hundreds of millions of
    euros by buying back hybrid bonds,
    as one of 31 banks told to fill a 115bn
    hole in their balance sheets by
    the end of June.
    Intesa Sanpaolo also said
    it will boost capital by buy-
    ing back debt, even though
    it has not been ordered to
    do so.
    The aim is to ensure the
    industry is strong enough to
    withstand an economic slow-
    down and the
    Eurozones sovereign
    debt crisis.
    The European
    Banking Authority (EBA), chaired by
    Andrea Enria (pictured), meets
    tomorrow and on Thursday to assess
    each banks plan.
    The overwhelming majority of
    measures outlined in the plans
    appear to be, in aggregate, in line
    with the spirit and the letter of the
    EBAs recommendation, the EBA said
    in a statement yesterday, saying
    reports suggesting otherwise were
    inaccurate and misleading.
    The watchdog said it was still
    reviewing the plans but it had been
    impressed with the banks willing-
    ness to undertake all appropri-
    ate measures to meet their
    needs.
    Banks have several options
    to find the capital required.
    They can retain earnings,
    shrink loans to customers,
    convert hybrid debt into
    equity, buy back their
    own bonds, sell
    assets, and
    cut dividends
    or staff pay.
    EU body says
    bank capital
    plan on track
    European state debts worsen
    GOVERNMENT debts in Europe have
    grown even bigger, official data
    revealed yesterday.
    Average state debt in the
    European Union rose to the equiva-
    lent of 82.2 per cent of GDP in the
    third quarter of last year up from
    81.7 per cent at the end of the sec-
    ond quarter.
    In the troubled Eurozone area,
    burdened by an ongoing debt crisis,
    debts are even higher. Average euro
    area state debt is the equivalent of
    87.4 per cent of GDP, down slightly
    from 87.7 per cent.
    Its nice for EU policymakers to
    say that things arent as bad as the
    US, but Washington still has market
    confidence and that cannot be said
    for all of Europe, said INGs Carsten
    Brzeski.
    Yet there was better news for the
    continent in a separate report
    reflecting investor confidence.
    The Sentix index of sentiment
    among investors in the Eurozone
    eased to a score of minus 11.1 this
    month, from minus 21.1 in January.
    And the expectations element of
    the index improved by an even
    stronger degree, coming in at minus
    6.3, up from minus 23.5 in January.
    Meanwhile, private sector produc-
    tivity in the EU has improved for the
    first time in six months, data from
    Markit showed.
    The purchasing managers index
    (PMI) crept into positive territory,
    moving from 48.8 in December to
    50.2 in January, showing that out-
    put per worker is now slightly grow-
    ing.
    BY HARRY BANKS
    BANKING

    BY JULIAN HARRIS
    EUROPEAN ECONOMY

    THE CHINESE arm of Citigroup


    announced yesterday that it has won
    regulatory approval to issue credit
    cards in mainland China, becoming
    the first non-Asian bank to receive
    permission.
    Citi, which has branches in 13
    cities, said it would likely launch
    credit card operations this year.
    This approval represents a signifi-
    cant milestone in the continued
    expansion of Citis business in China,
    a priority market for Citi, said Citi
    Asia Pacific chief executive Stephen
    Bird.
    Citi had about 16m cards in Asia at
    the end of 2011, according to compa-
    ny figures. The move also comes after
    the bank signed an agreement with
    Shanghai-based Orient Securities in
    June to launch a securities joint ven-
    ture in the country.
    Citigroup wins consent to
    offer credit cards in China
    BANKING

    News
    6 CITYA.M. 7 FEBRUARY 2012
    CHINESE airlines have been banned
    from paying the EUs carbon emis-
    sions charges, the government in
    Beijing announced yesterday, setting
    the scene for a row over the enforce-
    ability of international tax arrange-
    ments.
    Starting from next year, airlines
    will be given permits covering 85 per
    cent of their current carbon emis-
    sions but will have to pay fines of up
    to 100 (82.94) for each tonne of car-
    bon dioxide they emit beyond their
    permitted level. Persistent offenders
    may be banned from flying.
    Chinas Civil Aviation
    Administration told airlines they are
    not allowed to pay the charge or
    raise fees in line with the charges,
    unless the government allows them
    to.
    The carbon charging scheme for
    flights in and out of EU airports
    runs contrary to relevant principles
    of the United Nations Framework
    Convention on Climate Change and
    the international civil aviation regu-
    lations, the administration said.
    Beijing had already denounced
    the scheme as a trade barrier.
    However, the UK department for
    energy and climate change warned
    It will be much more costly for any
    airline not to comply than to do so.
    Beijing refuses
    to pay planned
    flight CO2 tax
    REGULATION

    A FULL-BLOWN recessionary crisis


    prompted by the Eurozone would
    cause Chinas GDP growth to collapse
    by half, the IMF warned yesterday.
    The global bailout body urged
    Chinese authorities to defer any
    reduction in government spending,
    and instead target a deficit of around
    two per cent of GDP.
    And in the event of a global reces-
    sion China should respond with a
    significant fiscal package, executed
    through central and local govern-
    ment budgets, the IMF said.
    Taking the World Economic
    Outlooks worst case scenario of a
    1.75 percentage point global econom-
    ic contraction, Chinas growth would
    fall by around four percentage points,
    the IMF expects.
    Yet if shocks are avoided, the IMF
    predicts Chinese growth slightly
    above eight per cent.
    Euro recession hit would
    threaten eastern growth
    Chinese GDP expansion could be halved by a global recession Picture: GETTY
    BY JULIAN HARRIS
    WORLD ECONOMY

    DRESDNER Bank kept its staff working


    hard by offering a minimim bonus
    pool months before it confirmed indi-
    vidual guarantees, a former executive
    told the Commerzbank trial yesterday.
    Stefan Jentzsch (pictured), previous-
    ly head of Dresdners investment bank-
    ing arm, defended the decision to
    create a 400m (331.9m) bonus pool
    for 2008 because of the need to pre-
    vent staff defections and ensure
    operational stability. At the
    time the markets were dete-
    riorating and Allianz, then
    the parent company, was
    considering selling or wind-
    ing down the division. In an
    extreme case, Jentzsch
    said, bonuses should be
    awarded to the best
    staff even if their
    department closed.
    He admitted,
    however, that the
    guarantee of an individual bonus did
    not become binding until bankers
    received confirmation on letter day.
    We wanted people to retain a cer-
    tain amount of uncertainty about how
    much they would be paid to make
    them work hard.
    A group of 104 former Dresdner
    investment bankers are suing
    Commerzbank for 50m and claim it
    reneged on contractual promises
    made to staff in internal meetings in
    2008 as well as in letters. The German
    bank said the switch became neces-
    sary as markets slumped.
    When Jentzsch was asked about
    Allianzs statement on the future
    of Dresdners investment bank,
    he denied that staff had to be
    wary of his blandishments but
    accepted he had put a positive
    spin on it.
    You take joint deci-
    sions and have joint
    responsibility... You
    have a duty.
    The trial continues.
    Ex-Dresdner
    boss defends
    bonus policy
    NEDBANK, South Africas fourth-
    largest lender, said its full-year earn-
    ings rose by as much as 28 per cent,
    boosted by higher non-interest rev-
    enues and a better-performing retail
    unit.
    The bank, majority owned by insur-
    er Old Mutual, said it expects to
    report a 23 to 28 per cent increase in
    diluted headline earnings per share
    for the year to the end of December. It
    will post full-year results this month.
    SWISS private bank Julius Baer expects
    to pay a fine to escape a growing US
    crackdown on offshore accounts.
    Boris Collardi, chief executive, said
    he did not expect the bank to be indict-
    ed, as smaller rival Wegelin was last
    week, and that Baer had taken an
    early, proactive approach with the
    US authorities.
    We expect we will probably have to
    pay a fine, but have the resources to
    satisfy a solution, Collardi said.
    Baer said 2011 net profit fell 27 per
    cent on the year to SwF258m (177m),
    hurt by lacklustre client trading,
    restructuring costs and other expenses
    including a one-off payment to resolve
    a tax dispute with Germany.
    Baer cut its profit margin target and
    raised its cost income ratio forecast as
    a soaring Swiss franc kept the banks
    mainly franc-based costs high but
    capped foreign-currency revenues.
    African dreams
    for Nedbank as
    earnings soar
    Baer chief: US fine looms
    but we wont be charged
    Fingers crossed: Boris Collardi hopes Julius Baer will not be fined Picture: GETTY
    BY PETER EDWARDS
    BANKING

    BANKING

    News
    CITYA.M. 7 FEBRUARY 2012
    BY PETER EDWARDS
    BANKING

    7
    PROFESSIONAL services company
    Towers Watson posted better-than-
    expected quarterly results yesterday,
    helped by higher revenue from its
    benefits segment, and forecast full-
    year earnings above estimates.
    Second-quarter net income rose to
    $65.4m (41.3m), or 92 cents a share,
    from $48.6m, or 65 cents a share, a
    year ago. The firms revenue rose 11
    per cent to $880m.
    Towers Watson
    beats forecasts
    with its results
    BANKING

    PRIVATE EQUITY firm Duke Street


    has become the first investment
    house to take a stake in the UKs legal
    sector, buying a majority stake in
    Parabis Group the parent company
    of two insurance litigation firms.
    Duke Streets investment, which
    means it owns just over 50 per cent of
    Parabis, values the company at
    150m-200m.
    Parabis, which trades through com-
    panies including Cogent Law and
    Plexus Law, applied for alternative
    business structure (ABS) status when
    investment in the legal sector was lib-
    eralised through the Legal Services
    Act 2007, which came into force last
    year.
    Duke Street has been widely
    expected to make an investment in
    the legal sector since the Act was first
    proposed.
    The private equity houses operat-
    ing partner, Paul Lester, will become
    chairman of the Parabis Group on
    completion of the deal, which is
    expected to be approved by the
    Solicitors Regulatory Authority (SRA)
    by the end of March.
    He will be joined on the board by
    ex-Aviva chief executive Bob Scott,
    another Duke Street operating part-
    ner, with the current Parabis manage-
    ment chief executive Tim Oliver and
    commercial director Tim Roberts
    remaining at the firm.
    The 50m investment, which is
    part funded by a consortium of banks
    including RBS, Lloyds, Santander and
    Ares, will primarily be used for acqui-
    sitions, the firms said yesterday.
    The SRA revealed yesterday that
    since it started accepting applications
    for firms to register as ABS, it has
    received more than 100 requests from
    firms looking to be licensed.
    The number of applications is very
    interesting and encouraging, said
    SRA chief executive Antony
    Townsend. I was on record at the end
    of last year as saying that we expected
    much lower numbers of applica-
    tions.
    Duke Street
    takes stake in
    legal market
    CITY law firm Pinsent Masons yes-
    terday confirmed it will merge
    with Edinburgh-based McGrigors,
    in a legal tie-up to create a company
    with a turnover of more than
    300m.
    The combined firm will employ
    over 2,500 people in total including
    more than 1,500 lawyers, with
    around 500 based at Pinsents cur-
    rent headquarters in the legal heart
    of the City, close to Liverpool Street.
    As well as existing offices in Asia
    Pacific and the Gulf region,
    Pinsents said yesterday the com-
    bined entity will launch offices in
    France and Germany before the end
    of this year.
    The new firm will operate under
    the Pinsent Masons brand, with the
    firms highlighting their expertise
    in construction, energy and infra-
    structure as key sectors where the
    firms can complement each other.
    Last November Pinsents, the larg-
    er of the two companies, reported
    half-year revenues of 105m, a six
    per cent increase on the previous
    year.
    Pinsents made a profit per equity
    partner (PEP) of 400,000 in 2010-11,
    compared to 247,000 at McGrigors,
    which is led by managing partner
    Richard Masters.
    Pinsent Masons
    and McGrigors
    confirm merger
    BY LIZZIE FOURNIER
    LEGAL SERVICES

    LEGAL SERVICES

    News
    8 CITYA.M. 7 FEBRUARY 2012
    Tim Oliver will remain at Parabis, where Duke Streets Paul Lester will become chairman
    SJ Berwin private equity partner Tim
    Wright is advising Duke Street on its
    investment in Parabis Group, building on
    a long-standing client relationship with
    the investment house.
    Wright has previously assisted Duke
    Street on its leveraged buyout of
    Burtons Food, its 76.9m offer for
    British dentistry operator Oasis
    Healthcare and its secondary buyout of
    The Original Factory Shop.
    He also advised Duke Street on its
    sale of pension and employment bene-
    fit group Xafinity to Advent
    International in 2010.
    The bank consortium that provided
    funding for the deal was advised by
    Stuart Brinkworth, an ex-SJ Berwin
    partner who joined Hogan Lovells in
    2010.
    Brinkworth has previously advised
    the banks in relation to Exponents
    121m purchase of the BBC Magazine
    business, including the acquisition of
    the Radio Times.
    MEET THE ADVISERS
    TIM WRIGHT
    SJ BERWIN
    Schmidt from Mercedes-Benz, and
    Vodafone Group chief Vittorio Colao.
    Richemont brand Cartier designed the
    nine 30cm-high, 2.5kg silver statuettes
    given out on the night, while Bryan Ferry
    provided the entertainment and Academy
    Award-nominated actor Clive Owen was
    the evenings host, helped by actress
    Thandie Newton.
    Tennis champion Novak Djokovic won
    the overall Sportsman of the Year award as
    he looks to win both the Olympic and
    Wimbledon titles this summer, while
    Paralympian Oscar Pistorius made the
    journey from South Africa to collect the
    Laureus World Sportsperson of the Year
    with a Disability award after being nomi-
    nated three times previously.
    Sir Bobby Charlton, however,
    was unable to collect his life-
    time achievement award in
    person after returning to
    Manchester earlier in the day
    to undergo minor surgery.
    Making a rare public statement
    on his behalf, Manchester
    United manager Sir
    Alex Ferguson said he would
    take the statuette back
    to Old Trafford in person.
    He loves the work he does
    for Laureus and I
    know how delighted he
    is to have received
    this tribute, he said.
    LAUREUS WORLD SPORTS
    AWARDS FIRE THE GUN ON
    LONDONS OLYMPIC YEAR
    MOST SPORTSMEN keep their trophies in
    cabinets or on the mantelpiece. Golfer
    Darren Clarke uses his Open
    Championship silverware to pour wine.
    When I was serving the wine at
    Christmas from The Claret Jug; I thought
    this is the life, said Clarke on the
    moment winning the Open on the twenti-
    eth attempt aged 42 finally sunk in.
    The golfers perseverance in the tourna-
    ment its been a long road, said an
    emotional Clarke was last night reward-
    ed for a second time by the Comeback of
    the Year statuette at the Laureus World
    Sports Awards at Westminsters Central
    Hall.
    The annual sports industry awards,
    held for the first time in London in its
    Olympic year, are organised by Laureus,
    the joint venture between Mercedes-Benz-
    maker Daimler and luxury goods con-
    glomerate Richemont, and this year
    attended by model Bar Rafaeli (right),
    and sporting stars including Boris
    Becker, Daley Thompson and Arsene
    Wenger.
    The business world was repre-
    sented by Richemonts chief
    executive Johann Rupert,
    alongside the heads of the
    awards global sponsors:
    Georges Kern, CEO of
    watchmaker IWC
    Schaffhausen, Daimler
    board member Dr Joachim
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    The Capitalist
    10
    Laureus World
    Breakthrough of the Year
    Rory McIlroy (right)
    Laureus World
    Comeback of the Year
    Darren Clarke
    The Laureus Sport for
    Good Award
    Ra Souza
    Vieira de Oliveira
    THE LAUREUS WORLD SPORTS AWARDS WINNERS
    Laureus World
    Sportsman of the Year
    Novak Djokovic (right)
    Laureus World
    Sportswoman of the Year
    Vivian Cheruiyot
    Laureus World
    Team of the Year
    FC Barcelona
    Laureus World Sportsperson
    of the Year with a Disability
    Oscar Pistorius
    Laureus World Action
    Sportsperson of the Year
    Kelly Slater
    The Laureus Lifetime
    Achievement Award
    Sir Bobby Charlton
    Above left: Richemont CEO
    Johann Rupert with his
    wife Gaynor
    Above (inset): Former hep-
    tathlete champion Denise
    Lewis
    Above right: Ex-Formula 1
    racing driver David
    Coulthard with his wife
    Karen Minier
    Pictures: GETTY
    EDITED BY
    HARRIET DENNYS
    Got A Story? Email
    thecapitalist@cityam.com
    Follow The Capitalist
    on Twitter: @dennysharriet
    11
    Left: Golfer
    Darren Clarke
    and fiance
    Alison Campbell
    Above right:
    Boris Becker and
    his wife Lilly
    Kerssenberg
    Right: Actress
    Thandie Newton
    News
    12 CITYA.M. 7 FEBRUARY 2012
    TESCO Bank will not launch its
    current account in 2012 as expect-
    ed, hitting the governments
    attempts to shake up the notori-
    ously uncompetitive retail banking
    market.
    The supermarkets financial
    services arm had planned to unveil
    its flagship product this year but is
    now set to launch at the end of
    2013.
    The delay will allow the firm to
    take advantage of forthcoming
    reforms designed to simplify the
    process of switching accounts.
    A spokesman said the bank is
    progressing at the right pace in
    its efforts to offer a full banking
    service but that it will continue to
    take a cautious approach to
    launching new products.
    The Payments Council, the
    group responsible for the future of
    financial transfers, promises that
    by September 2013 it will be possi-
    ble to redirect regular payments
    from one bank account to the
    other within a week, making it
    substantially easier to switch
    providers.
    Clive Black, an analyst at Shore
    Capital, said the launch date of
    Tescos current account is towards
    the end of both our and their
    expectations but backed the
    firms decision to delay the launch:
    It is critical that Tesco Bank does
    these things right first time.
    The supermarket has quietly
    built a bank from scratch, expand-
    ing from 250 to 3,000 employees
    during the last four years. It cur-
    rently offers a basic range of sav-
    ings products, personal loans and
    credit cards.
    Tesco delays launch
    of current account
    BY JAMES WATERSON
    BANKING

    NEWS | IN BRIEF
    Smith & Nephew settles bribe case
    Medical device maker Smith & Nephew yes-
    terday agreed to pay $22.2m (14m) to set-
    tle allegations that its subsidiaries paid
    bribes to win business in Greece. The US
    Justice Department and SEC said the firm
    charged a Greek distributor full price for its
    products, then paid to shell companies the
    amount of discounts usually given. The
    money sent to the shells was used to bribe
    publicly employed Greek healthcare
    providers, according to court papers.
    News Int takes to the airwaves
    The Sun and other News International titles
    have partnered up with Global Radio brands
    in a wide-ranging advertising deals. The
    papers will sponsor such programmes as
    the Capital Breakfast show, LBC 97.3 and
    Classic FM.
    MORE NEWS
    ONLINE
    www.cityam.com
    @
    @
    @
    Westerman goes east in Goldmans reshuffle
    F
    OLLOWING in the footsteps of
    Richard Campbell-Breeden (Asia)
    and Chris Barter (Moscow),
    Goldman Sachs is moving
    Matthew Westerman to Hong Kong
    to become co-head of its investment
    banking division for Asia outside of
    Japan.
    Westerman, whose recent deals
    include the Prada IPO and the HSBC
    rights issue, was recently global head
    of equity capital markets in a year
    when Goldman ended up number
    one in every region. So he is certainly
    leaving London on a high. He will be
    co-head with Dan Dees, who was
    head of the financing group in Asia
    Pacific.
    Goldman has a policy of offering
    jobs around the globe and
    Westermans move is being seen by
    some as a tremendous opportunity.
    But it is not clear whether
    Westerman himself is totally enam-
    oured by the move. He is part of a
    dynamic investment banking couple:
    his wife Sian is a managing director
    at Rothschild in London.
    One source close to Goldman said
    he might try commuting in the way
    the late Brian Keelan once did after
    his days at UBS.
    Westerman, who is currently based
    in London, will start working in
    Hong Kong on 1 April. He was out yes-
    terday on a reconnaissance trip and
    could not comment on his move.
    With Westerman going, the top
    equity capital markets job will trans-
    fer to Stephen Pierce in New York,
    which probably makes sense given
    how quiet things are currently in
    London and Europe.
    REFLECTIONS ON TULLOW OIL
    BarCaps winning of the corporate
    brokership for FTSE 100 company
    Tullow Oil is another feather in the
    cap for the groups investment bank-
    ing ambitions.
    Coming as it did in the same week
    as the banks US arm got on the ros-
    ter for the Facebook IPO, there can be
    no doubting that BarCap is fast
    becoming a feared rival in most cor-
    porate pitches where once it would
    have been an also-ran.
    Barclays chief executive Bob
    Diamond laughs off suggestions that
    he shows up to pitches for equity
    mandates, though some say his grow-
    ing relationship with Tullow Oil
    chief exec Aidan Heavey played a part
    in the banks latest broking victory.
    Morgan Stanleys appointment as
    joint broker was being attributed in
    large part to Andrew Foster, who
    used to be Tullows long-time broker
    when he was at RBS Hoare Govett.
    Hoare Govett did not even pitch this
    time around, leaving the way clear
    for Fosters new employees.
    david.hellier@cityam.com
    INSIDE TRACK
    DAVID HELLIER
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    EASYJET has seen its first decline in
    passenger numbers since sales were
    hit by the eruption of the volcanic
    ash cloud in April 2010.
    The budget airline said the num-
    bers of passengers fell by 0.4 per
    cent to 3.73m in January compared
    to 3.74m in the same month last
    year after economic headwinds
    took their toll.
    easyJet posted an 8.1 per cent rise
    in passengers in final three months
    of last year, helped by the absence of
    winter disruption. However, it now
    faces a more difficult February with
    the possibility of more snow.
    The group has kept its capacity
    flat over the winter to reflect weak-
    er consumer confidence. Despite
    lower traffic figures, its load factor
    has risen from 78.9 to 81.9 per cent.
    EasyJet passenger
    numbers take a hit
    BY KASMIRA JEFFORD
    TRANSPORT

    News
    14 CITYA.M. 7 FEBRUARY 2012
    Terms apply. Subject to credit check. Lines open Mon-Fri 8am-8pm, Sat 9am-5pm. Calls
    fromlandlinesarefree. Standardnetworkchargesapplytocallsmadefromamobilephone.
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    Visit vodafone.co.uk/businessoffers or
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    Doing business abroad?
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    MORE NEWS
    ONLINE
    www.cityam.com
    ANALYSIS l Easyjet
    p
    3Feb 6Feb 31 Jan 1 Feb 2Feb
    480
    470
    460
    450
    440
    472.00
    6 Feb
    It is too early to say. The snow
    has pretty much gone and luckily
    it was over the weekend so travel-
    ing into work wasnt affected.
    This year there is a lot less snow, so you cant really argue whether London has coped any better or is
    any better prepared than last year. But the snow did not affect my travelling this weekend.
    TERRY JAMES | S3 GROUP
    www.RateSetter.com Customer Phoneline: 08442490115
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    CITY VIEWS: DO YOU THINK LONDON HAS LEARNED TO COPE WITH
    SNOW? Interviews by Phoebe Torrance
    GRAHAM WICKENS | LLOYDS OF LONDON
    I think London has coped better,
    but to be honest there hasnt been
    very much. The trains have all
    been punctual and the main roads
    were all cleared quickly.
    GURDEV LANDA | CITITEC
    BRITISH
    Airways is
    expanding its
    routes from
    London City
    Airport this
    summer, with
    plans to launch
    new flights to
    Menorca,
    Angers and
    Quimper in
    late May.
    Picture: GETTY
    BRITISH AIRWAYS EXPANDS ITS CITY ROUTES
    * These views are those of the individuals below and not necessarily those of their company
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    Occasional habit
    getting out of
    control?
    * Based on a sample of all patients during 2010/11 with completed HoNOS data.
    ** Improvements as measured by The Health of the Nation Outcome Scales (HoNOS). HoNOS is the most
    widely used routine clinical outcome measure used by English mental health services and is also used in
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    Tel: 0845 2 774679
    Email: info@priorygroup.com
    www.priorygroup.com/addictions
    The Priory Hospital Roehampton
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    London, N14 6RA
    Contact The Priory today to speak to
    an adviser or to arrange a confidential,
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    Youve come this far, dont back out now.
    Losing streak?
    One too many?
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    Scan with a QR reader for a
    direct link to our website
    When an occasional habit gets out of control it can quickly
    become an addiction. It can wreck your life and the lives of
    those around you but fortunately addictions can be
    treated.
    Addictions patients who completed The Priorys 28 day
    programme had a 98%chance* of showing improvement
    in their mental health and social
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    News
    17 CITYA.M. 7 FEBRUARY 2012
    TAIWANESE smartphone maker
    HTC has yet to catch up with mar-
    ket dominators Apple and
    Samsung, posting expectations of
    a weak quarter ahead despite
    strong growth in fiscal 2011.
    The worlds number five smart-
    phone maker said it expects rev-
    enues of 65bn Taiwanese dollars
    (1.4bn) in the first three months
    of this year, down from
    T$101.42bn in the previous quar-
    ter.
    In fiscal 2011, HTC pocketed
    profits of T$61.98bn up 57 per
    cent year on year after a 67 per
    cent jump in revenues to
    T$465.79bn.
    And profit margins at the
    smartphone company continue to
    decline, with operating margins
    reaching just 12.7 per cent last
    quarter and expected to hit 7.5 per
    cent in the coming period.
    HTC called this trend a tempo-
    rary phenomenon and said the
    margins will normalise when
    product cycle transition is over.
    HTC, whose smartphones oper-
    ate on Android, is expected to
    release four new handset models
    later this month in a bid to catch
    up with market rivals Apple,
    which shipped 37m iPhones last
    quarter, and Samsung, which fol-
    lowed closely behind with its
    Galaxy range.
    By comparison, HTC yesterday
    reported a 52.6 per cent drop in
    January sales from a year earlier,
    bringing in T$16.62bn.
    Shares in the Taiwanese compa-
    ny more than tripled in the year to
    April 2011 before spending the
    rest of the year in decline.
    The stock dropped 5.2 per cent
    to T$551 yesterday.
    Phone maker HTC is
    facing tough future
    BY LAUREN DAVIDSON
    TECHNOLOGY

    NEWS | IN BRIEF
    O2 extends rugby sponsorship
    Telecoms giant O2 has renewed its
    sponsorship agreement with the Rugby
    Football Union, which has been in place
    since rugby turned professional in 1995.
    The deal which extends the partner-
    ship until after the 2015 Rugby World
    Cup gives O2 customers priority book-
    ing for England matches at Twickenham
    while the telecoms company supports
    the RFUs various programmes.
    Brits dominate UK album market
    Brit music has returned to its Spice Girls
    heyday, with British artists accounting
    for 52.7 per cent of last years album
    sales in the UK, according to Official
    Charts Company data, pushing the US to
    its lowest market share (32.7 per cent)
    since 1999. But while Adele and
    Coldplay increased Britains share of the
    UK singles market to 42.6 per cent, the
    US retained top spot with 43.8 per cent.
    GlobeOp directors back TPG bid
    The independent directors of takeover
    target GlobeOp Financial Services have
    re-stated their support for an offer from
    US private equity giant TPG Partners
    after the prospect of a rival bid
    emerged. They said the 508m TPG bid
    represents good value after US firm
    SS&C Technologies, a rival to GlobeOp,
    said it has been performing due dili-
    gence. Connecticut based SS&C said
    there is no certainty it will make a bid.
    BT HAS spoken out against regula-
    tions suggested to the European
    Commission by media watchdog
    Ofcom which would see the whole-
    sale broadband providers prices fur-
    ther capped.
    This marks the third time Ofcom
    has regulated rental costs for BT
    Openreach, which dominates the
    wholesale broadband line rental
    market.
    As they currently stand in draft
    form, the changes would see the
    price of wholesale line rental
    through BT Openreach drop from an
    annual 103.68 to 98.81, decreasing
    further each year according to the
    formula retail price index (RPI) less
    7.3 per cent.
    Wholesale rental of an entire line
    to a property will cost 87.41 next
    year, while the lease of part of a line
    will be charged at 11.92, down from
    91.50 and 14.70 respectively the
    prices stated by Ofcoms last review
    of BT Openreach.
    These charges will also decrease
    each year by a set formula until 31
    March 2014.
    However, BT said it disagrees with
    several of Ofcoms underlying
    assumptions, such as the weighted
    cost of capital, level of efficiency sav-
    ings and rate of inflation.
    The British telecoms company said
    it will consider an appeal if the
    European Commission approves the
    suggestions.
    After consulting BT stakeholders,
    customers and competitors last year,
    Ofcom expects to publish a final
    decision, with approval from
    Brussels, in early March.
    BT Openreach cost
    could be capped
    further by Ofcom
    BY LAUREN DAVIDSON
    TELECOMS

    Swedish Kinnevik bids for


    remaining chunk of Metro
    SWEDISH investment firm Kinnevik
    has made an all cash offer for the
    half of Metro International it does
    not already own, valuing the news-
    paper group at around 1.15bn
    Swedish krona (108m).
    Kinnevik, which currently owns
    46.6 per cent of Metro and controls
    42.4 per cent of the votes, has offered
    a premium of approximately 46 per
    cent compared to Metros volume-
    weighted average share price on
    Nasdaq during the last three
    months.
    The Swedish company has pro-
    posed a price of SEK0.9 for Class A
    shares, SEK0.94 for B shares, SEK0.5
    for warrants and SEK0.4 for deben-
    tures.
    Mia Brunell Livfors, chief execu-
    tive and president of Kinnevik, said:
    We have followed Metros develop-
    ment with great interest since the
    company was founded more than 15
    years ago to its present position as a
    unique and world leading player on
    the free newspaper market.
    Kinnevik is the largest stakeholder
    in Metro, which distributes free
    newspapers in over 100 cities.
    The Swedish company also holds
    stakes in Baltic broadcaster Modern
    Times Group, telecoms company
    Tele2 and discount website Groupon.
    Metro shares jumped 19 per cent,
    closing at SEK0.93.
    MEDIA

    Kinnevik, under chief Mia Brunell Livfors,


    already owns 46.6 per cent of Metro shares
    Taiwanese firm is caught in pincer
    THE demise of Nokia happened in
    slow motion. Apple released its
    first iPhone in 2007 but it took
    almost four years before Nokia
    admitted it was standing on a
    burning platform. Even now,
    some believe Nokias new
    Microsoft Windows smartphone,
    the Lumia, could snatch the
    Finnish handset maker from the
    jaws of defeat (for the record, we
    arent one of them).
    The tale of HTCs fall from grace
    couldnt be more different. Last
    year, it was in bullish mood, hav-
    ing chalked up impressive gains in
    the US, where its 24 per cent share
    of the smartphone market bested
    even Apple (20 per cent). At the
    end of October, the firm was say-
    ing it expected to grow fourth
    quarter revenues by a third.
    In fact, they fell by 23 per cent
    compared to the earlier quarter,
    causing profit to drop for the first
    time in two years. Now it expects
    sales to fall a further 35.5 per cent
    in the first three months of the
    year. This car crash is happening at
    breakneck speed.
    Although it is still in fine fettle
    compared to Nokia, the direction
    and speed of travel is alarming
    nonetheless.
    So where did it all go wrong?
    Firstly, HTCs strong sales had
    more to do with the runaway suc-
    cess of the Google Android soft-
    ware that powered its phones; the
    handsets themselves were pretty
    unremarkable, especially when
    pitted against iPhones and
    Samsung Galaxys. Now there is a
    greater choice of Android phones,
    and customers arent choosing
    HTC.
    We always argued HTC would be
    better placed focusing on the low-
    end smartphone market that is
    ripening up in emerging markets.
    Even that looks unlikely now, with
    ZTE and Huawei making strong
    gains in the sub-$200 space.
    So HTC finds itself caught in a
    pincer movement, with luxury
    titans Apple and Samsung on one
    side, and budget players on the
    other. We dont fancy its chances.
    david.crow@cityam.com
    BOTTOMLINE
    Analysis by David Crow
    ANALYSIS l HTC Corp
    TWD
    3Feb 6Feb 31 Jan 1 Feb 2Feb
    600
    575
    550
    525
    500
    551.00
    6 Feb
    RETAIL sales have remained sluggish
    at the start of 2012, despite earlier
    reports that weak consumer confi-
    dence was turning a corner.
    Like-for-like sales were down 0.3
    per cent in January compared to the
    same time last year, the British Retail
    Consortium (BRC) said this morning.
    Customers parked their worries
    in December and spent, encouraged
    by discounts, commented the BRCs
    Stephen Robertson. Now, in the New
    Year, reality has bitten again as con-
    cerns about jobs, wages and house-
    hold costs reassert themselves.
    Tough comparisons hurt the fig-
    ures. Last winter saw high levels of
    deferred sales in the January, after
    heavy snow prevented people from
    hitting the shops in December 2010.
    Separate figures from Visa showed
    annualised sales down 2.2 per cent,
    despite a 0.4 per cent rise in the value
    of purchases between December and
    January.
    Yet the underlying trend remains
    bleak, with the BRC revealing like-for-
    like sales up by just 0.3 per cent on
    the three month weighted average,
    compared to a year earlier.
    The value of total sales which
    includes sales from new shops and
    expanded shop-floors rose 2.1 per
    cent in January and 2.4 per cent in
    the three month measure, with both
    figures significantly below current
    levels of inflation.
    Earlier in the month a survey of
    consumer confidence hinted that
    tumbling sentiment among UK shop-
    pers could have bottomed out.
    THE UKS largest companies face a
    huge deficit in their defined benefit
    pension funds which shows no sign of
    being closed, Mercers pensions risk
    survey revealed yesterday.
    Combined deficits of FTSE 350 firms
    stood at 83bn on 31 January, the
    study showed, barely changed from
    the 84bn deficit recorded at the end
    of December.
    Asset values did rise in the month,
    from 478bn to 487bn, but liabilities
    also rose from 562bn to 570bn due
    to a small fall in corporate bond yields
    which are used to discount liabilities.
    The changes in January highlight a
    number of factors at play driving the
    overall funding level, said Ali Tayyebi,
    senior partner and pension risk group
    leader at Mercer.
    Although the FTSE 100 increased
    by around two per cent over the
    month, pressure remained on the lia-
    bility side with double-A corporate
    bond yields reducing further over the
    month.
    The survey covers about half of pen-
    sion scheme liabilities. The pensions
    regulators data showed UK pension
    schemes as a whole had a shortfall in
    assets of 471bn in March 2011.
    Company pension deficits show little
    sign of being filled, warns risk survey
    RESILIENT car sales have provided a
    boost to the UKs outlook, economists
    said yesterday.
    New car registrations edged up by
    0.03 per cent last month, compared
    to January 2011, figures from the
    Society of Motor Manufacturers and
    Traders (SMMT) showed.
    This is surprising because almost
    200,000 cars were pre-registered by
    the industry in December 2011 which
    will have depressed January 2012 new
    car registrations compared to January
    2011, explained John Leach of KPMG.
    Howard Archer of IHS Global
    Insight added: Encouragingly, pri-
    vate car sales rose 2.3 per cent year-on-
    year in January, having been very
    much a weak link in 2011 when they
    fell by 14.1 per cent over the year.
    Strong car registrations
    boost outlook for the UK
    UK ECONOMY

    AUTOMOTIVE

    RETIRED homeowners are losing out


    from housing market volatility,
    according to research published yester-
    day by Key Retirement Solutions (KRS).
    Over-65s own an estimated
    749.45bn worth of property outright,
    and lost 7.185bn in the last three
    months as the housing market stalled
    equivalent to 1,236 each.
    The markets continuing poor per-
    formance means pensioners are down
    25bn since September 2010.
    Those in London and the south east
    have been worst hit, losing an average
    of 5,937, while homeowners in Wales,
    the north east and the west Midlands
    have seen gains in property values.
    Losses in the past three months
    show the recovery is still a long way
    off, said KRSs Dean Mirfin.
    People are starting to realise that
    waiting for recovery is not a viable
    strategy when considering equity
    release.
    Retired homeowners are losing
    billions in weak property market
    UK ECONOMY

    HOUSE prices rose in January,


    defying the trend of recent
    months, Halifax said yester-
    day, as it warned that values
    are set to stagnate this year.
    Average prices increased 0.6
    per cent to 160,907, though
    they fell 0.9 per cent over the quarter
    and are down 1.8 per cent since
    January 2011.
    Low interest rates have con-
    tributed to mortgage pay-
    ments falling to their
    lowest level as a propor-
    tion of disposable earn-
    ings for a new
    borrower for 14 years,
    said Halifax econo-
    mist Martin Ellis.
    Mortgage pay-
    ments for first-time
    buyers and for
    movers stood at 27 per
    cent of disposable earn-
    ings in the fourth quarter
    of 2011, well below the 37 per cent
    average recorded over the past 27
    years and almost 50 per cent down on
    the 48 per cent peak seen in 2007.
    A recent improvement in employ-
    ment trends may also have supported
    demand, said Ellis, though other
    economists point to the simultane-
    ous rise in unemployment as a factor
    pushing prices down.
    Halifax expects prices will stagnate
    throughout 2012, though if the
    Eurozone crisis drags the UK into
    recession, they may sink further.
    House prices set to stagnate
    BY TIM WALLACE
    PROPERTY

    Retail morale
    is knocked by
    sluggish sales
    BY JULIAN HARRIS
    RETAIL

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    News
    18 CITYA.M. 7 FEBRUARY 2012
    TOP FED OFFICIAL HITS OUT AT LOW RATES
    Years of ultra-low interest rates, which the Federal Reserve is advocating, distort and
    damage the economy by hitting savers and paring back savers spending at a time when
    consumers are increasingly reluctant to borrow, St Louis Fed president James Bullard
    argued yesterday. As a result, current policies will fail, he said. Picture: REUTERS
    NEWS | IN BRIEF
    Warning of crisis over youth jobs
    Youth unemployment is threatening to
    become a crisis we cannot afford, said
    a report published yesterday. Over
    250,000 young people have been unem-
    ployed for over a year according to
    Labour MP David Miliband, who chaired
    the commission, with a further 200,000
    unemployed for over six months. Some
    of the areas of the highest youth unem-
    ployment have the lowest levels of immi-
    gration, Miliband added, dismissing the
    governments concern over foreign
    workers. The commission suggested
    doubling the number of wage subsidies
    for the young unemployed. It also sug-
    gested that every young person in
    employment should mentor a jobless
    young person.
    German factory orders bounce up
    Orders at German factories recovered
    more than expected at the end of 2011,
    due to strong demand from outside the
    Eurozone. New orders were up 1.7 per
    cent in December compared to
    November, when they tumbled by
    almost five per cent. A breakdown of
    the data showed that non-Eurozone
    orders bounced back by 12.3 per cent,
    having dipped heavily in November.
    German new orders have been on a
    rollercoaster ride during the last couple
    of months, with sharp monthly fluctua-
    tions probably due to bulk orders, com-
    mented INGs Carsten Brzeski. The high
    volatility actually masks a trend of sta-
    bilisation.
    RANDGOLD Resources has seen its
    profits surge by 259 per cent, allowing
    it to double its dividend, it announced
    yesterday.
    The gold miner, whose main opera-
    tions are in West Africa, attributed the
    figures to the strong performance of
    its Mali mines and rises in the price of
    gold.
    Randgold posted full-year profits for
    2011 of $433.4m (274.6m) with output
    rising 58 per cent to 696,023 ounces.
    That was in line with guidance,
    although the miner had already
    trimmed that guidance twice after
    operational problems.
    The FTSE 100 company said its Mali
    mines had offset weaknesses in pro-
    duction in the Ivory Coast after poor
    weather and other practical issues had
    taken had taken their toll.
    Production at the Tongon mine in
    Ivory Coast fell by 40 per cent in the
    fourth quarter, triggered by problems
    attached to connecting the site to the
    national grid in the country.
    However, the project was unaffected
    by political unrest in the country last
    year. There were also some issues with
    its Kibali project in the Democratic
    Republic of Congo.
    Chief executive Mark Bristow said:
    Randgolds long-term strategy of
    building sustainably profitable gold-
    mining businesses through discovery
    and development continues to pay
    off.
    The Jersey-registered company, with
    stock market listings in London and
    New York, proposed doubling its divi-
    dend to $0.40 per share on the back of
    a surge in earnings per share.
    Randgold forecast that production
    will rise to between 825,000 and
    865,000 ounces in 2012.
    Analysts are tipping growth to come
    from the Loulo-Gounkoto mines on
    Malis western border.
    Production rocketed by 34 per cent
    and profits from its mining operations
    there by nearly 90 per cent. Randgold
    added that it expected costs to remain
    at around the same level for 2012,
    before dropping over the next five
    years.
    Randgold in
    dividend hike
    as profit lifts
    BY JOHN DUNNE
    MINING

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    OIL and gas company Afren yester-
    day announced that it had started
    drilling off the coast of Ghana.
    Afren said that drilling began at
    the Keta block with Eni Ghana.
    Afren and Eni Italys largest
    energy company each have 35 per
    cent stakes in the block.
    Japanese conglomerate Mitsui
    and the Ghana National Petroleum
    Corporation own interests worth 20
    and 10 per cent, respectively.
    The drilling is taking place at the
    Volta River Basin near Eastern
    Ghana.
    Afren chief exec Omar
    Shahenshah (pic-
    tured) said: The
    company is now
    firmly engaged in
    its most active
    phase of explo-
    ration activity
    across its core assets
    which are said to
    have the potential to
    ma t e r i a l l y
    increase the
    companys
    discovered
    reserves
    base.
    Yesterdays announcement fol-
    lows Januarys discovery at the
    Okoro East exploration well.
    In addition to its African opera-
    tions Afren has recently embarked
    on projects in Kurdistan.
    Last month Afren posted 2011
    production figures and output fore-
    casts for this year that missed ana-
    lyst expectations. Problems
    at the companys key
    Ebok oil field in
    Nigeria was part of
    the reason for the
    bleaker figures,
    the firm said.
    Afren starts drilling off the Ghana
    coast in the hope of finding more oil
    BY HARRY BANKS
    ENERGY

    Premier
    plugs East
    Fyne well
    FTSE 250-listed Premier Oil said yes-
    terday it would abandon an apprais-
    al well in the North Sea as it would
    not be commercially viable to con-
    tinue.
    The East Fyne appraisal well was
    drilled to a depth of 5,020 feet. It
    encountered 11 feet of gas bearing
    sands and eight feet of oil bearing
    sands at the low end of Premiers
    estimates.
    It said in a statement: The
    results of the East Fyne Appraisal
    well will be incorporated into the
    Greater Fyne Area go forward plans
    and a decision on whether a com-
    mercial development is viable for
    Premier is expected to be taken by
    the end of the second quarter of
    2012.
    Meanwhile Premier said that in
    Indonesia, the Anoa development
    well on Natuna Sea Block had been
    deepened to a total depth of 11,012
    feet to investigate the potential of
    the Lama Formation.
    The next exploration well to be
    drilled in the Natuna Sea Block A
    will be at Biawak Besar which is
    expected to spud in March 2012, the
    company said in its update.
    Shares in Premier Oil closed
    down 1.1 per cent yesterday at
    413.7p.
    Antrim, Premiers partner in the
    East Fyne well with a 35 per cent
    stake, saw its Aim-listed shares
    plunge 22.5 per cent to 70.5p follow-
    ing the news.
    BY JOHN DUNNE
    ENERGY

    NEWS | IN BRIEF
    Greencore moves to sterling
    Food group Greencore is planning to
    change the denomination of its shares.
    Subject to approval at the companys
    annual general meeting on Thursday,
    Ordinary Shares of 0.01 will be
    changed to 0.01 at close of business
    on 10 February. It said that for share
    dealing purposes the effective date of
    the change in share denomination is 13
    February. In December, the reporting
    currency of Greencore was changed to
    sterling and dividends will also be
    declared in the currency.
    Compass acquires Dora Gastro
    Compass Group, the worlds largest
    caterer, said yesterday it had complet-
    ed its acquisition of Dora Gastro in the
    Czech Republic. The group announced
    that it had agreed to acquire the food
    services provider in December.
    However, it required the green light
    from the Office for the Protection of
    Competition in the Czech Republic.
    Compass, which snapped up a number
    of small companies last year in a glut
    of acquisitions, said the clearance had
    now been given.
    Red Rock sells Mount Ida slice
    Red Rock Resources said yesterday it
    had sold a 50 per cent stake in its
    Mount Ida royalty for $14m. FTSE
    250-listed Anglo Pacific is paying
    $14m (8.8m) for the interest in the
    iron ore project, which is based in
    western Australia and is being devel-
    oped by Jupiter mines. The acquisi-
    tion will be paid for in three
    instalments including some shares,
    the firm said in a statement yester-
    day. Red Rock shares rose 3.8 per
    cent to 3p on the back of the news.
    News
    19 CITYA.M. 7 FEBRUARY 2012
    West Africa
    Mali
    Burkina Faso
    Ghana
    Cote dIvoire
    Senegal
    Loulo Mine
    Morila Mine
    Tongon
    Project
    ANALYST VIEWS: CAN RANDGOLD CONTINUE
    ON ITS GROWTH PATH? Interviews by John Dunne

    ANDY DAVIDSON | NUMIS


    Overall a positive operational and earnings update and a good hike in
    the dividend which should keep everyone happy. As expected, lower production
    from Tongon following the perfect storm of issues, offset by better ounces from
    the Loulo- Gounkoto complex.

    JOHN MCGLOIN | COLLINS STEWART


    With a strong gold price we see upside in the stock, which should bene-
    fit on these results. Kibali, which is expected to go into production in 2013, will be
    the key growth driver for capital expenditure, including investments in the antici-
    pated start-up of construction at Kibali, set to reach $660m this year.

    KEITH BOWMAN | HARGREAVES LANSDOWN


    Gold continues to be buoyed by concerns that central banks will simply
    print more money, while shareholders have today been rewarded with a increase
    in the dividend payment. In all, and with ongoing group investment balanced
    against sizeable share price upside over the year, we say hold.

    ANALYSIS l Randgold Resources


    p
    3Feb 6Feb 31 Jan 1 Feb 2Feb
    7,800
    7,700
    7,600
    7,500
    7,400
    7,300
    7,200
    7,100
    7,565.00
    6 Feb
    Randgold chief executive
    Mark Bristow (inset) has seen
    growth in West Africa
    Covington & Burling
    Veteran litigator Casey Cooper is leav-
    ing Baker Botts to join Covington &
    Burling as a partner in the London
    office, to focus on its global anti-cor-
    ruption and white-collar practices. In
    2008, Cooper was a member of the
    Obama administrations transition
    team, focusing on the justice depart-
    ments policy and operations.
    Maxwell Drummond
    Oil and gas headhunter Maxwell
    Drummond has appointed Andy
    Baillie as chief executive of Talent
    Reservoir, its upstream recruitment
    process outsourcing start-up. Baillie
    joins from Kenexa, where he was vice
    president, alliances.
    Bfinance
    The independent consultant has
    appointed Chris Jones, chief invest-
    ment officer of hedge fund Key Asset
    Management, as head of alternatives.
    Jones has 18 years experience in
    hedge funds and has authored a num-
    ber of publications on trading and risk
    management.
    Amati Global Investors
    David Stevenson has joined the invest-
    ment team at the investment manage-
    ment boutique. He joins from Cartesian
    Capital, which he co-founded in 2005;
    prior to that, he was assistant director
    at SVM, where he managed a range of
    UK equity products.
    Cala Group
    The housebuilder has appointed Mike
    Pacitti as a non-executive director.
    Pacitti spent the majority of his
    career as a non-executive director and
    chairman of 3is portfolio companies,
    and his current non-executive direc-
    torships include a seat on the board of
    House of Fraser. Additionally, Ian
    Percy, senior independent director
    and chairman of CALAs audit, gover-
    nance and remuneration committee,
    will retire in March 2012.
    DC Advisory Partners
    Andrew Strudwick has been appoint-
    ed as an executive director in the
    European financial sponsors group,
    led by Simon Tilley. Strudwick most
    recently worked at 3i Group, where he
    was an investment director and co-
    founded 3is UK technology, media
    and telecoms team.
    CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
    +44 (0)20 7092 0053
    morganmckinley.com
    To appear in CITYMOVES please email your career
    updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
    in association with
    Corporate results
    worries sink stocks
    U
    S stocks closed slightly lower
    yesterday as lingering questions
    about Europes debt crisis and
    corporate earnings overshad-
    owed growing optimism about eco-
    nomic growth after a five-week rally.
    The S&P has risen about seven per
    cent so far this year, helped by a slew
    of better-than-expected US economic
    data, which was capped by Fridays
    solid jobs report.
    The magnitude and swiftness of
    the gains, however, has kept some
    investors on the sidelines. The S&P is
    at levels not seen since July, and the
    ongoing worries about Europe and
    corporate results have some wonder-
    ing if the market has more room to
    rally.
    Through yesterday morning, of the
    290 companies in the S&P 500 that
    had reported results so far for the
    quarter, 60 per cent posted profits
    that topped expectations, tracking
    below recent quarters at this point of
    the earnings season.
    Companies arent surprising on
    the upside like they have in previous
    quarters, which could mean slow
    going for stocks for a while, said
    Tommy Huie, president and chief
    investment officer at BMO Asset
    Management in Milwaukee. That
    said, I can see us near 1,400 on the
    S&P by summer if we get decent news
    out of Europe.
    Another deadline lapsed in Athens
    as political leaders failed to respond
    to bailout terms from the European
    Union and International Monetary
    Fund. Greece needs the funds by
    March in order to meet big debt
    repayments and avoid a messy
    default.
    The Dow Jones industrial average
    was down 17.10 points, or 0.13 per
    cent, at 12,845.13. The Standard &
    Poors 500 Index was down 0.57
    points, or 0.04 per cent, at 1,344.33.
    The Nasdaq Composite Index was
    down 3.67 points, or 0.13 per cent, at
    2,901.99.
    Its not surprising for the market
    to catch its breath after the very
    strong start to the year that weve
    seen, especially as there are still a lot
    of concerns about what will happen
    in Europe, said Bernie Schoenfeld,
    senior investment strategist at BNY
    Mellon Wealth Management in New
    York. Were treading water in a fairly
    calm market at this point, but some
    retracement wouldnt be surprising.
    Hasbro rose 2.2 per cent to $36.66
    after the toymaker reported a fourth-
    quarter profit just above analysts low-
    ered expectations. Humana posted a
    big rise in fourth-quarter profit, but
    revenues came in below estimates,
    sending shares down 5.4 per cent.
    M
    INERS dragged Britains top
    share index lower yesterday,
    after doubt surfaced about
    Glencores potential merger
    with Xstrata, while banks waned in
    the absence of a debt deal for Greece.
    The FTSE 100 index ended down
    8.87 points, or 0.2 per cent, at
    5,892.20, remaining near six-month
    highs after strong US jobs data boost-
    ed appetite for cyclical stocks. It had
    risen four per cent over the previous
    four trading days.
    The bears have effectively had to
    remove themselves from the field
    after Fridays macro data and only a
    retracement to 5,800 by the FTSE 100
    would give them any real encourage-
    ment, Silverwind Securities trader
    Darren Sinden said.
    Sinden said the prospect of a so-
    called golden cross on the weekly
    chart between the 20-day and 50-day
    moving average lines, as the faster
    moving line (20-day MA) closes in on
    its slower moving peer from below,
    will encourage the bulls longer term.
    Having led the FTSE 100 higher so
    far in 2012, miners were the top fall-
    ers.
    Glencore, which had risen 17 per-
    cent over the previous three trading
    days, fell 4.5 per cent as brokers said
    the commodities trader might have
    to pay a premium of up to 20 per cent
    to satisfy shareholders in its proposed
    $80+ billion merger with Xstrata.
    UBS estimated synergies at around
    $1bn between the two firms and said:
    These are sufficient for Glencore to
    pay around a 20 per cent premium on
    the undisturbed price of Xstrata.
    Xstrata, which had jumped 20 per
    cent since news of the takeover talks,
    fell 1.7 per cent after reports that
    Glencore would offer 2.8 new shares
    for each Xstrata share, an eight per
    cent premium.
    HB Markets downgraded Xstrata to
    sell, saying: The premium is on the
    light side, but we struggle to see that
    Glencore would agree to any signifi-
    cant upward revisions. And given
    recent price action, most of the
    upside is therefore priced in.
    Banks, which have risen 18 per cent
    this year, ebbed with doubts resurfac-
    ing over Greeces ability to strike a
    deal to avoid a chaotic default, which
    could cripple the financial system.
    German Chancellor Angela Merkel
    told Greece yesterday to make up its
    mind fast on accepting terms for a
    new EU/IMF bailout. Greek political
    leaders responded by delaying their
    decision for another day.
    It is easy to see where this caution
    is coming from. The sovereign crisis
    last year was, we reckon, quintessen-
    tially a piece of hard to price macro
    risk, analysts at BofA Merrill Lynch
    said. It would be the sign of a die-
    hard optimist of Bruce Willis-esque
    proportions to be willing to rule out
    similar macro angst this year.
    Lloyds Banking Group, however,
    bucked the weaker trend, up 2.6 per
    cent with traders citing a positive
    readacross from a Halifax report
    which showed British house prices
    rose 0.6 per cent in January.
    Defensives dominated the risers list
    as risk appetite waned with dividend
    favourite Vodafone up 1.6 per cent
    and Imperial Tobacco 0.8 percent
    higher.
    Oil major BP rose one per cent
    ahead of results, while oil explorer
    Cairn climbed as it commenced trad-
    ing without rights to a 160p per share
    cash distribution, and post comple-
    tion of the 13-for-33 share consolida-
    tion.
    Randgold Resources rose 2.2 per
    cent after saying profit in 2011 leapt
    259 per cent to $433m and it would
    double its dividend to 40 cents.
    FTSE 100 falls on doubts over
    deals for Greece and Glencore
    THELONDON
    REPORT
    THENEW YORK
    REPORT
    BEST OF THE BROKERS
    To appear in Best of the Brokers email your research to notes@cityam.com
    ANALYSIS l Royal Dutch Shell Plc
    2,400
    2,300
    2,200
    2,100
    Dec Jan Feb
    p 2,257.00
    6 Feb
    ROYAL DUTCH SHELL
    Credit Suisse downgrades the oil major from outperform to neutral and
    cuts its target price from 2,750p to 2,600p after a key part of the brokers
    positive investment case the long-awaited inflection point in free cash
    flow in 2012 failed to materialise. Capex has been re-estimated to a high-
    er figure of $32bn per year to drive growth, but Credit Suisse does not
    expect a pay-off from this for several years.
    ANALYSIS l French Connection Group PLC
    70
    60
    50
    40
    Dec Jan Feb
    p 51.00
    6 Feb
    FRENCH CONNECTION
    Following another profit warning last Friday, Merchant Securities rates the
    fashion retailer as a hold with a target price of 58p. The broker says a
    strong balance sheet with net cash of 33m is encouraging, and supports
    the current share price, but expects a downgrade of 2013 profits before
    tax, which currently stand at 6.7m. The brokers sees the stock as fairly
    priced at 6.3 times estimated 2013 earnings.
    ANALYSIS l 888 Holdings PLC
    55
    50
    45
    40
    35
    Dec Jan Feb
    p 57.25
    6 Feb
    888 HOLDINGS
    Panmure Gordon rates the online gaming group as a buy with a target
    price of 63p ahead of its fourth quarter statement due this morning. The
    broker expects 888 to report $88.5m in total operating profit for the quar-
    ter, driven largely by the companys poker and casino operations. Despite a
    recent uplift in the share price on the extension of a US agreement with
    Dragonfish, the broker sees the stock as inexpensive.
    p
    25Nov 7Nov 15Dec 9Jan 27Jan
    6,000
    5,400
    5,600
    5,200
    5,800
    ANALYSIS l FTSE
    5,892.20
    6 Feb
    Deloitte
    Mark Williams has been appointed as a partner
    in Deloittes economic consulting practice.
    Williams, who joins Deloitte from the World
    Bank, will join a team of more than 30 in
    Deloittes economic consulting practice, where he
    will focus on telecoms clients. He worked at the
    World Bank for five years, where he led the team
    designing the banks strategy for African broad-
    band infrastructure and published two books on
    telecoms in Africa. Prior to that, he worked at
    Frontier Economics for six years.
    News
    20 CITYA.M. 7 FEBRUARY 2012
    LON GD ONCE FIX AM...........1717.00 -42.50
    SILVER LDN FIX AM ..................33.62 -0.16
    MAPLE LEAF 1 OZ ....................36.25 0.05
    LON PLATINUM AM................1610.00 -21.00
    LON PALLADIUM AM...............694.00 -16.00
    ALUMINIUM CASH .................2158.00 -42.00
    COPPER CASH ......................8315.00 -23.50
    LEAD CASH...........................2146.50 24.50
    NICKEL CASH......................20775.00 -37.00
    TIN CASH.............................23975.00 -75.00
    ZINC CASH ............................2087.50 -5.00
    BRENT SPOT INDEX................113.24 1.39
    SOYA .....................................1232.50 15.50
    COCOA..................................2300.00 75.00
    COFFEE...................................215.95 0.35
    KRUG.....................................1785.20 -27.40
    WHEAT ....................................168.12 1.62
    AIR LIQUIDE........................................97.66 -0.31 100.65 80.90
    ALLIANZ..............................................88.19 -0.33 108.85 56.16
    ANHEUS-BUSCH INBEV ....................48.85 -0.09 49.00 33.85
    ARCELORMITTAL...............................16.16 -0.39 28.55 10.47
    AXA......................................................12.66 -0.07 16.16 7.88
    BANCO SANTANDER...........................6.50 0.07 9.00 4.94
    BASF SE..............................................61.35 0.03 70.22 42.19
    BAYER.................................................55.25 0.16 59.44 35.36
    BBVA......................................................7.22 0.03 9.17 4.94
    BMW ....................................................70.76 0.78 73.85 43.49
    BNP PARIBAS.....................................34.99 -0.21 59.93 22.72
    CARREFOUR ......................................18.35 -0.04 31.64 14.66
    CRH PLC .............................................15.62 -0.17 17.40 10.28
    DAIMLER.............................................45.47 0.02 57.22 29.02
    DANONE..............................................48.41 -0.22 53.16 41.92
    DEU.BOERSE OFFRE ........................48.52 1.25 55.75 35.46
    DEUTSCHE BANK..............................33.65 -0.39 48.70 20.79
    DEUTSCHE TELEKOM.........................8.87 0.05 11.38 7.88
    E.ON.....................................................17.11 0.01 25.00 12.50
    ENEL......................................................3.09 0.01 4.86 2.78
    ENI .......................................................17.18 -0.06 18.66 11.83
    FRANCE TELECOM............................11.52 -0.02 16.65 11.09
    GDF SUEZ ...........................................21.32 -0.25 30.05 17.65
    GENERALI ASS...................................12.33 -0.03 17.05 10.34
    IBERDROLA..........................................4.69 0.01 6.10 4.16
    INDITEX ...............................................67.45 -0.78 69.40 50.92
    ING GROEP CVA...................................7.31 -0.18 9.50 4.21
    INTESA SANPAOLO.............................1.53 -0.04 2.47 0.85
    KON.PHILIPS ELECTR.......................15.87 0.05 24.12 12.01
    L'OREAL..............................................81.68 -0.38 91.24 68.83
    LVMH..................................................128.65 -0.65 132.65 94.16
    MUNICH RE.......................................105.40 -1.05 126.00 77.80
    NOKIA....................................................3.81 -0.07 8.49 3.33
    REPSOL YPF.......................................20.28 -0.87 24.90 17.31
    RWE.....................................................32.41 0.82 53.86 21.15
    SAINT-GOBAIN...................................35.63 -0.78 47.64 26.07
    SANOFI ................................................55.80 -0.15 57.42 42.85
    SAP......................................................48.09 -0.08 48.36 32.88
    SCHNEIDER ELECTRIC.....................48.75 -1.08 61.83 35.00
    SIEMENS .............................................75.79 -0.04 99.39 62.13
    SOCIETE GENERALE.........................23.55 -0.70 52.70 14.32
    TELECOM ITALIA..................................0.79 0.01 1.16 0.70
    TELEFONICA ......................................13.42 -0.06 18.75 12.50
    TOTAL..................................................40.91 -0.10 44.55 29.40
    UNIBAIL-RODAMCO SE...................145.65 1.85 162.95 123.30
    UNICREDIT............................................4.18 0.07 13.34 2.20
    UNILEVER CVA...................................25.33 0.08 27.16 20.90
    VINCI ....................................................36.97 -0.20 45.48 28.46
    VIVENDI ...............................................16.17 -0.04 21.68 14.10
    VOLKSWAGEN VORZ ......................143.45 1.25 152.20 86.40
    Price Chg High Low
    EUSHARES
    WORLD INDICES
    FTSE 100 . . . . . . . . . . . . . . 5892.20 -8.87 -0.15
    FTSE 250 INDEX. . . . . . . . 11237.74 2.59 0.02
    FTSE UK ALL SHARE . . . . 3043.62 -3.80 -0.12
    FTSE AIMALL SH . . . . . . . . 784.62 3.19 0.41
    DOWJONES INDUS 30 . . 12845.20 -17.03 -0.13
    S&P 500 . . . . . . . . . . . . . . . 1344.33 -0.57 -0.04
    NASDAQ COMPOSITE . . . 2901.99 -3.67 -0.13
    FTSEUROFIRST 300 . . . . . 1075.19 -1.51 -0.14
    NIKKEI 225 . . . . . . . . . . . . . 8929.20 97.27 1.10
    DAX 30 PERFORMANCE. . 6764.83 -1.84 -0.03
    CAC 40 . . . . . . . . . . . . . . . . 3405.27 -22.65 -0.66
    SHANGHAI SE INDEX . . . . 2331.14 0.73 0.03
    HANG SENG. . . . . . . . . . . 20709.94 -47.04 -0.23
    S&P/ASX 20 INDEX . . . . . . 2582.40 0.00 0.00
    ASX ALL ORDINARIES . . . 4364.60 0.00 0.00
    BOVESPA SAO PAOLO. . 65223.72 6.35 0.01
    ISEQ OVERALL INDEX . . . 3139.26 3.94 0.13
    STRAITS TIMES . . . . . . . . . 2904.76 -1.93 -0.07
    IGBM. . . . . . . . . . . . . . . . . . . 890.46 -0.94 -0.11
    SWISS MARKET INDEX. . . 6147.03 -6.28 -0.10
    Price Chg %chg
    3M........................................................87.56 -0.17 98.19 68.63
    ABBOTT LABS ...................................55.39 0.39 56.84 45.28
    ALCOA ................................................10.74 -0.03 18.47 8.45
    ALTRIA GROUP..................................28.64 -0.20 30.40 23.20
    AMAZON.COM..................................183.14 -4.54 246.71 160.59
    AMERICAN EXPRESS........................51.81 -0.44 53.80 41.30
    AMGEN INC.........................................69.12 -0.16 70.00 47.66
    APPLE...............................................463.97 4.29 464.98 310.50
    AT&T....................................................29.97 0.02 31.94 27.27
    BANK OF AMERICA.............................7.97 0.13 14.95 4.92
    BERKSHIRE HATAW B.......................79.85 -0.15 87.65 65.35
    BOEING CO.........................................75.46 -0.88 80.65 56.01
    CATERPILLAR..................................113.78 -0.16 116.55 67.54
    CHEVRON.........................................106.67 1.17 110.99 86.68
    CISCO SYSTEMS................................20.19 0.10 22.34 13.30
    CITIGROUP.........................................33.30 -0.24 49.60 21.40
    COCA-COLA.......................................68.03 -0.05 71.77 61.29
    COMCAST CLASS A..........................27.09 -0.06 27.18 19.19
    CONOCOPHILLIPS.............................71.32 0.86 81.80 58.65
    CVS/CAREMARK................................43.27 -0.24 43.98 31.30
    DU PONT(EI) DE NMR........................51.78 -0.23 57.00 37.10
    EXXON MOBIL....................................85.75 0.83 88.23 63.47
    GENERAL ELECTRIC.........................19.05 0.03 21.65 14.02
    GOLDMAN SACHS GRP ..................117.39 -0.14 169.90 84.27
    GOOGLE A........................................609.09 12.76 670.25 473.02
    HEWLETT PACKARD.........................28.76 -0.31 49.39 19.92
    HOME DEPOT.....................................45.20 0.03 45.50 28.13
    IBM.....................................................192.82 -0.82 194.90 151.71
    INTEL CORP .......................................26.72 -0.02 27.00 19.16
    J.P.MORGAN CHASE.........................38.14 -0.14 48.36 27.85
    JOHNSON & JOHNSON.....................65.19 -0.45 68.05 55.76
    KRAFT FOODS A................................38.70 -0.18 39.06 24.30
    MC DONALD'S CORP ........................99.49 -0.52 102.22 72.89
    MERCK AND CO. NEW......................38.40 0.03 39.43 29.47
    MICROSOFT........................................30.20 -0.04 30.40 23.65
    OCCID. PETROLEUM.......................104.00 1.37 117.89 66.36
    ORACLE CORP...................................29.00 -0.11 36.50 24.72
    PEPSICO.............................................66.52 -0.14 71.89 58.50
    PFIZER ................................................20.95 -0.25 22.17 16.63
    PHILIP MORRIS INTL .........................76.85 0.23 79.96 57.49
    PROCTER AND GAMBLE ..................63.51 0.74 67.72 56.57
    QUALCOMM INC ................................61.07 0.01 61.95 45.98
    SCHLUMBERGER ..............................79.64 0.98 95.64 54.79
    TRAVELERS CIES..............................59.33 -0.79 64.17 45.97
    UNITED TECHNOLOGIE ....................80.57 -0.48 91.83 66.87
    VERIZON COMMS ..............................38.14 0.30 40.48 32.28
    VISA CL A..........................................107.36 0.33 108.27 70.45
    WAL-MART STORES..........................61.88 -0.15 62.63 48.31
    WALT DISNEY CO ..............................40.46 0.46 44.34 28.19
    WELLS FARGO & CO.........................30.20 -0.43 34.25 22.58
    COMMODITIES CREDIT & RATES
    BoE IR Overnight ............................0.500 0.00
    BoE IR 7 days.................................0.500 0.00
    BoE IR 1 month ..............................0.500 0.00
    BoE IR 3 months ............................0.500 0.00
    BoE IR 6 months ............................0.500 0.00
    LIBOR Euro - overnight ..................0.281 0.00
    LIBOR Euro - 12 months ................1.700 0.00
    LIBOR USD - overnight...................0.141 0.00
    LIBOR USD - 12 months.................1.082 0.00
    HaIifax mortgage rate .....................3.990 -0.02
    Euro Base Rate ...............................1.500 0.00
    Finance house base rate................1.500 0.00
    US Fed funds...................................0.250 0.00
    US Iong bond yieId .........................3.090 -0.01
    European repo rate.........................0.230 0.00
    Euro Euribor ....................................0.384 0.00
    The vix index ...................................17.91 0.81
    The baItic dry index ........................614.0 -33.0
    Markit iBoxx...................................241.44 -0.61
    Markit iTraxx..................................127.10 -5.98
    Price Chg High Low
    Price Chg %chg Price Chg %chg Price Chg %chg
    USSHARES
    BAE Systems . . . . . .317.9 -1.2 356.5 248.1
    Chemring Group . . . .412.7 -12.3 736.5 368.8
    Cobham . . . . . . . . . . .188.9 -2.6 236.5 165.9
    Meggitt . . . . . . . . . . . .370.2 -2.5 397.6 304.9
    QinetiQ Group . . . . . .136.0 1.0 137.4 101.5
    RoIIs-Royce HoIdi . . .785.5 0.5 788.5 557.5
    Senior . . . . . . . . . . . . .186.9 2.2 190.6 132.6
    UItra EIectronics . . .1579.0 4.0 1830.0 1305.0
    GKN . . . . . . . . . . . . . .224.6 -1.0 245.0 157.0
    BarcIays . . . . . . . . . . .231.4 -6.1 333.6 138.9
    HSBC HoIdings . . . . .557.5 -2.0 730.9 463.5
    LIoyds Banking Gr . . .35.3 0.9 69.3 21.8
    RoyaI Bank of Sco . . .28.8 0.1 49.0 17.3
    Standard Chartere .1588.5 -15.5 1712.5 1169.5
    AG Barr . . . . . . . . . .1261.0 1.0 1395.0 1031.0
    Britvic . . . . . . . . . . . . .368.0 -1.7 449.2 289.9
    Diageo . . . . . . . . . . .1474.0 13.0 1474.0 1112.0
    SABMiIIer . . . . . . . . .2494.0 -32.5 2530.0 1979.0
    AZ EIectronic Mat . . .314.0 2.6 338.1 206.1
    Croda Internation . .1999.0 1.0 2081.0 1456.0
    EIementis . . . . . . . . . .160.4 -1.5 187.4 107.5
    Johnson Matthey . .2255.0 -15.0 2278.0 1523.0
    Victrex . . . . . . . . . . .1402.0 22.0 1590.0 1025.0
    YuIe Catto & Co . . . . .199.8 -0.7 253.0 148.0
    C/$ 1.3118 0.0028
    C/ 0.8293 0.0024
    C/ 100.38 0.2213
    /C 1.2058 0.0034
    /$ 1.5816 0.0011
    / 121.04 0.6156
    FTSE 100
    5892.20
    8.87
    FTSE 250
    11237.74
    2.59
    FTSE ALLSHARE
    3043.62
    3.80
    DOW
    12845.20
    17.03
    NASDAQ
    2901.99
    3.67
    S&P 500
    1344.33
    0.57
    Smith (DS) . . . . . . . . .163.0 4.3 266.2 157.0
    Smiths Group . . . . .1000.0 -17.0 1429.0 869.5
    Brown (N.) Group . . .244.8 1.2 304.5 227.0
    Carpetright . . . . . . . . .602.0 18.5 770.5 375.0
    Debenhams . . . . . . . . .71.4 0.7 74.8 51.2
    Dignity . . . . . . . . . . . .786.0 0.0 854.5 648.5
    Dixons RetaiI . . . . . . .14.8 0.4 22.3 9.4
    DuneImGroup . . . . . .476.0 -0.2 524.5 383.9
    HaIfords Group . . . . .327.4 0.5 411.4 268.6
    Home RetaiI Group . .114.5 -2.6 235.0 72.5
    Inchcape . . . . . . . . . .358.2 -3.0 425.4 268.1
    JD Sports Fashion . .799.0 18.0 1030.0 570.0
    Kesa EIectricaIs . . . . .74.0 -1.0 151.4 60.2
    Kingfisher . . . . . . . . .271.9 -1.0 287.1 217.0
    Marks & Spencer G . .345.8 4.7 402.2 301.8
    Next . . . . . . . . . . . . .2768.0 -3.0 2810.0 1868.0
    Sports Direct Int . . . .254.2 -2.5 266.2 159.0
    WH Smith . . . . . . . . . .528.0 0.5 559.0 433.8
    Smith & Nephew . . . .642.5 2.5 742.0 521.0
    Synergy HeaIth . . . . .887.5 31.0 981.0 808.0
    Barratt DeveIopme . .119.6 -0.3 121.0 67.5
    BeIIway . . . . . . . . . . . .780.5 -11.5 800.0 540.5
    BerkeIey Group Ho .1299.0 1.0 1360.0 934.5
    BaIfour Beatty . . . . . .284.3 -3.5 357.3 214.6
    CRH . . . . . . . . . . . . .1296.0 -14.0 1700.0 1053.0
    GaIIiford Try . . . . . . . .493.9 9.9 530.0 321.0
    Kier Group . . . . . . . .1416.0 18.0 1458.0 1097.0
    Drax Group . . . . . . . .530.0 -10.5 581.5 371.9
    SSE . . . . . . . . . . . . . .1247.0 -5.0 1423.0 1166.0
    Domino Printing S . .619.5 22.0 705.0 434.3
    HaIma . . . . . . . . . . . . .375.5 4.3 429.6 306.3
    Laird . . . . . . . . . . . . . .170.0 0.6 207.0 127.9
    Morgan CrucibIe C . .331.0 4.4 357.1 224.0
    Oxford Instrument .1083.0 88.0 1083.0 600.5
    Renishaw . . . . . . . . .1496.0 11.0 1886.0 800.0
    Spectris . . . . . . . . . .1620.0 -4.0 1679.0 1039.0
    Aberforth SmaIIer . . .600.0 4.0 714.0 494.0
    AIIiance Trust . . . . . .363.7 -1.7 392.7 310.2
    Bankers Inv Trust . . .404.9 -2.6 428.0 346.5
    BH GIobaI Ltd. GB .1167.0 -12.0 1212.0 1058.0
    BH GIobaI Ltd. US . . . .11.8 0.0 12.2 10.4
    BH Macro Ltd. EUR . . .19.7 0.2 20.2 16.3
    BH Macro Ltd. GBP 2028.0 7.0 2078.0 1661.0
    BH Macro Ltd. USD . . .19.4 0.0 20.2 16.2
    BIackRock WorId M .744.5 -2.5 815.5 574.5
    BIueCrest AIIBIue . . .161.0 0.0 176.2 160.8
    British Assets Tr . . . .126.5 1.0 139.5 109.0
    British Empire Se . . .451.0 1.5 533.0 404.0
    CaIedonia Investm .1503.0 0.0 1819.0 1337.0
    City of London In . . .294.0 0.5 306.9 257.0
    Dexion AbsoIute L . .139.7 0.1 151.0 130.0
    Edinburgh Dragon . .242.2 0.2 252.0 201.4
    Edinburgh Inv Tru . . .478.2 0.0 492.2 414.9
    EIectra Private E . . .1548.0 1.0 1755.0 1287.0
    F&C Inv Trust . . . . . .304.0 -0.3 327.9 261.5
    FideIity China Sp . . . . .83.7 -0.8 114.3 70.0
    FideIity European . .1087.0 2.0 1287.0 912.0
    HeraId Inv Trust . . . . .503.5 5.8 545.5 419.0
    HICL Infrastructu . . . .118.4 0.0 121.3 112.7
    Impax Environment .100.0 0.0 125.4 88.5
    John Laing Infras . . .109.7 0.2 109.7 103.4
    JPMorgan American .919.0 -1.0 924.0 721.5
    JPMorgan Asian In . .199.9 -0.1 244.0 170.1
    JPMorgan Emerging .569.0 -1.0 610.5 480.1
    JPMorgan European .718.0 10.5 983.5 624.0
    JPMorgan Indian I . . .388.8 1.1 459.0 313.1
    JPMorgan Russian .566.5 2.5 741.0 415.1
    Law Debenture Cor . .366.6 6.0 385.0 321.0
    MercantiIe Inv Tr . . . .973.5 3.5 1137.0 823.0
    Merchants Trust . . . .380.5 3.4 431.8 341.5
    Monks Inv Trust . . . .329.0 1.3 367.9 298.1
    Murray Income Tru . .651.0 1.5 673.0 568.0
    Murray Internatio . . .964.0 -3.0 991.5 818.5
    PerpetuaI Income . . .264.0 0.0 276.0 236.5
    PersonaI Assets T .34390.0 120.0 34390.030210.0
    PoIar Cap TechnoI . .361.5 2.6 391.2 299.5
    RIT CapitaI Partn . . .1238.0 5.0 1360.0 1173.0
    Scottish Inv Trus . . . .479.9 2.0 524.0 417.0
    Scottish Mortgage . .679.0 -4.0 781.0 565.0
    SVG CapitaI . . . . . . . .235.0 4.7 279.8 165.1
    TempIe Bar Inv Tr . . .909.0 -1.0 952.0 791.0
    TempIeton Emergin .617.0 -5.0 684.5 497.0
    TR Property Inv T . . .156.6 -1.4 206.1 136.2
    TR Property Inv T . . . .66.7 1.6 94.0 59.8
    Witan Inv Trust . . . . .483.6 0.5 533.0 401.5
    3i Group . . . . . . . . . . .204.2 -1.0 319.4 166.9
    3i Infrastructure . . . .121.9 0.3 124.0 113.4
    Aberdeen Asset Ma .250.6 -2.0 252.6 167.8
    Ashmore Group . . . .388.6 -1.4 420.0 301.5
    Brewin DoIphin Ho . .152.9 1.2 185.4 113.7
    CameIIia . . . . . . . . . .9730.5 -29.010950.0 8800.0
    CharIes TayIor Co . . .127.0 3.5 165.0 115.6
    City of London Gr . . . .66.0 0.0 93.6 61.3
    City of London In . . .364.8 4.8 450.0 304.3
    CIose Brothers Gr . . .708.0 -6.0 875.0 590.0
    CoIIins Stewart H . . . .93.5 1.0 94.0 48.5
    F&C Asset Managem .68.0 -0.6 91.0 56.1
    Hargreaves Lansdo .441.0 -3.1 646.5 402.5
    HeIphire Group . . . . . . .2.3 -0.0 17.4 1.4
    Henderson Group . . .119.5 -0.6 173.1 95.1
    Highway CapitaI . . . . .13.0 0.0 21.0 6.5
    ICAP . . . . . . . . . . . . . .383.0 0.8 556.5 311.6
    IG Group HoIdings . .500.5 5.8 502.5 393.6
    Intermediate Capi . . .298.3 -5.6 354.7 197.9
    InternationaI Per . . . .213.6 0.6 388.8 148.5
    InternationaI Pub . . .121.1 0.0 121.5 108.6
    Investec . . . . . . . . . . .396.8 -6.1 522.0 318.4
    IP Group . . . . . . . . . . .102.0 0.5 102.0 33.9
    Jupiter Fund Mana . .247.0 5.2 337.3 184.9
    Liontrust Asset M . . . .91.1 -0.3 91.8 57.9
    LMS CapitaI . . . . . . . . .56.5 -0.3 64.8 52.8
    London Finance & . . .22.5 0.0 23.5 19.0
    London Stock Exch .944.5 -2.5 1076.0 756.5
    Lonrho . . . . . . . . . . . . .10.0 -0.5 19.8 8.9
    Man Group . . . . . . . . .137.0 0.3 311.0 104.5
    Paragon Group Of . .184.4 0.1 206.1 134.6
    Provident Financi . . .985.0 1.0 1124.0 915.0
    Rathbone Brothers .1199.0 2.0 1257.0 977.0
    Record . . . . . . . . . . . . .11.6 0.0 35.5 11.4
    RSM Tenon Group . . . .5.9 -0.2 57.0 5.8
    Schroders . . . . . . . .1609.0 -20.0 1906.0 1183.0
    Schroders (Non-Vo .1285.0 -16.0 1554.0 970.0
    TuIIett Prebon . . . . . .314.1 -0.5 428.6 262.3
    WaIker Crips Grou . . .40.0 0.0 51.5 40.0
    BT Group . . . . . . . . . .216.0 2.0 217.0 161.0
    CabIe & WireIess . . . .45.2 1.3 51.2 31.3
    CabIe & WireIess . . . .21.4 -0.1 76.9 14.2
    COLT Group SA . . . . .91.6 -0.6 156.2 84.1
    KCOM Group . . . . . . . .75.0 1.8 84.0 57.5
    TaIkTaIk TeIecom . . .118.9 -1.9 159.0 118.9
    TeIecomPIus . . . . . . .654.5 -21.0 802.0 440.0
    Booker Group . . . . . . .75.1 -0.7 80.0 54.5
    Greggs . . . . . . . . . . . .525.5 3.5 550.5 445.0
    Morrison (Wm) Sup .295.0 -0.2 328.0 268.5
    Ocado Group . . . . . . .103.5 -4.8 285.0 52.9
    Sainsbury (J) . . . . . . .295.1 0.0 391.2 263.5
    Tesco . . . . . . . . . . . . .324.8 -1.9 420.1 312.4
    Associated Britis . . .1175.0 -7.0 1189.0 940.0
    Cranswick . . . . . . . . .810.5 -7.5 862.0 588.5
    Dairy Crest Group . . .327.7 2.7 409.7 311.0
    Devro . . . . . . . . . . . . .280.0 4.9 296.9 228.0
    Tate & LyIe . . . . . . . . .687.5 7.0 720.5 520.0
    UniIever . . . . . . . . . .2021.0 -8.0 2189.0 1793.0
    Mondi . . . . . . . . . . . . .534.5 -1.0 664.0 413.5
    Centrica . . . . . . . . . . .300.4 -0.5 345.8 278.8
    InternationaI Pow . . .341.7 -2.1 427.0 279.4
    NationaI Grid . . . . . . .637.0 -4.5 649.5 543.5
    Pennon Group . . . . . .694.0 -5.0 737.5 584.5
    Severn Trent . . . . . .1514.0 -20.0 1600.0 1375.0
    United UtiIities . . . . .601.0 -8.0 637.0 551.0
    Cookson Group . . . . .604.0 8.0 724.5 395.8
    Rexam . . . . . . . . . . . .381.1 -2.6 400.0 299.8
    RPC Group . . . . . . . .393.2 1.9 395.4 231.5
    Price Chg High Low
    Bovis Homes Group .495.8 6.1 499.6 326.5
    Persimmon . . . . . . . .550.0 1.5 551.0 374.0
    Reckitt Benckiser . .3411.0 -76.0 3578.0 3015.0
    Redrow . . . . . . . . . . . .129.5 -2.5 136.2 103.5
    TayIor Wimpey . . . . . . .44.8 -0.0 44.9 28.7
    Bodycote . . . . . . . . . .335.2 3.1 397.7 225.6
    Fenner . . . . . . . . . . . .464.2 5.1 466.9 280.0
    IMI . . . . . . . . . . . . . . . .919.5 6.5 1119.0 636.5
    MeIrose . . . . . . . . . . .388.0 1.7 391.1 268.0
    Northgate . . . . . . . . . .245.8 -3.4 346.7 190.9
    Rotork . . . . . . . . . . .1943.0 -1.0 1979.0 1501.0
    Spirax-Sarco Engi . .2089.0 7.0 2099.0 1649.0
    Weir Group . . . . . . .2047.0 -15.0 2218.0 1375.0
    Evraz . . . . . . . . . . . . .455.0 -5.5 464.9 315.0
    Ferrexpo . . . . . . . . . . .366.3 7.3 499.0 238.7
    TaIvivaara Mining . . .346.7 11.6 622.0 195.2
    BBAAviation . . . . . . .185.4 -3.4 240.8 156.0
    Stobart Group Ltd . . .129.0 1.3 163.6 112.0
    AdmiraI Group . . . . . .998.5 -39.5 1754.0 787.0
    AmIin . . . . . . . . . . . . .337.4 -0.5 427.0 270.6
    BeazIey . . . . . . . . . . . .144.0 -0.5 145.0 109.6
    Informa . . . . . . . . . . . .413.2 2.5 461.1 313.9
    ITE Group . . . . . . . . . .230.3 4.0 258.2 157.7
    ITV . . . . . . . . . . . . . . . . .77.7 -1.7 93.5 51.7
    Johnston Press . . . . . . .6.1 -0.5 12.8 4.1
    MecomGroup . . . . . .200.8 -3.3 310.0 134.5
    Moneysupermarket. .123.2 3.7 123.3 84.8
    Pearson . . . . . . . . . .1206.0 1.0 1255.0 1013.0
    PerformGroup . . . . .255.0 5.0 257.7 150.0
    Reed EIsevier . . . . . .528.0 -1.5 590.5 461.3
    Rightmove . . . . . . . .1299.0 0.0 1408.0 851.5
    STV Group . . . . . . . . . .92.5 1.5 168.0 76.3
    Tarsus Group . . . . . .145.5 0.0 165.0 119.5
    Trinity Mirror . . . . . . . .47.0 0.0 89.5 37.5
    UBM . . . . . . . . . . . . . .582.0 2.0 725.0 416.0
    UTV Media . . . . . . . . .112.0 2.0 150.0 92.5
    WiImington Group . . .83.5 3.0 182.0 78.5
    WPP . . . . . . . . . . . . . .776.0 -3.0 846.5 578.0
    YeII Group . . . . . . . . . . .5.9 -0.0 11.0 3.4
    African Barrick G . . .525.0 2.5 616.5 393.5
    AIIied GoId Minin . . .142.5 -0.9 281.3 34.4
    AngIo American . . .2887.0 -23.0 3437.0 2138.5
    AngIo Pacific Gro . . .315.6 10.6 369.3 237.9
    Antofagasta . . . . . . .1363.0 -36.0 1513.0 900.5
    Aquarius PIatinum . .171.5 -2.0 419.0 149.0
    BHP BiIIiton . . . . . . .2200.0 -6.5 2631.5 1667.0
    CatIin Group Ltd. . . .421.3 -3.0 432.7 334.0
    Hiscox Ltd. . . . . . . . . .400.0 7.2 424.7 340.5
    Jardine LIoyd Tho . . .687.0 -3.5 764.5 576.0
    Lancashire HoIdin . . .738.0 14.5 774.5 532.5
    RSA Insurance Gro . .112.0 -0.7 143.5 99.6
    Aviva . . . . . . . . . . . . . .374.2 -2.8 477.9 275.3
    LegaI & GeneraI G . . .120.5 -0.9 123.8 89.8
    OId MutuaI . . . . . . . . .154.7 -3.1 158.0 98.1
    Phoenix Group HoI . .584.5 0.5 688.0 451.1
    PrudentiaI . . . . . . . . .727.5 -4.5 777.0 509.0
    ResoIution Ltd. . . . . .278.9 -1.7 316.1 229.5
    St James's PIace . . . .365.9 -3.2 376.0 294.0
    Standard Life . . . . . . .226.9 -2.4 244.7 172.0
    4Imprint Group . . . . .259.0 3.5 295.0 200.0
    Aegis Group . . . . . . .166.9 0.4 168.2 115.7
    BIoomsbury PubIis . .113.5 0.5 138.0 91.3
    British Sky Broad . . .689.0 -10.5 850.0 618.5
    Centaur Media . . . . . . .36.8 0.3 73.0 32.5
    Chime Communicati .226.0 5.0 298.5 163.0
    Creston . . . . . . . . . . . .51.1 1.4 121.0 47.0
    DaiIy MaiI and Ge . . .470.0 -3.7 594.5 343.4
    Euromoney Institu . .730.0 15.0 736.0 522.5
    Future . . . . . . . . . . . . . .12.6 -0.1 30.0 8.3
    Haynes PubIishing . .200.0 -5.0 257.0 195.0
    Huntsworth . . . . . . . . .41.0 -2.5 81.0 32.3
    Bumi . . . . . . . . . . . . . .795.0 -6.47 855.0 727.0
    Centamin (DI) . . . . . . . .96.6 -1.5 154.2 78.5
    Eurasian NaturaI . . .721.5 -9.5 1051.0 522.0
    FresniIIo . . . . . . . . . .1817.0 -33.0 2150.0 1302.0
    GemDiamonds Ltd. .234.4 12.2 306.0 179.8
    GIencore Internat . . .460.8 -21.8 531.1 348.0
    HochschiId Mining . .528.0 -4.5 680.0 365.9
    Kazakhmys . . . . . . .1190.0 -24.0 1631.0 730.0
    Kenmare Resources . .50.0 0.7 59.9 31.0
    Lonmin . . . . . . . . . . .1080.0 -23.0 1880.0 941.0
    New WorId Resourc .540.0 33.0 1060.0 409.4
    PetropavIovsk . . . . . .772.0 -36.5 1090.0 543.5
    PoIymetaI Interna . .1175.0 10.0 1195.1 877.0
    RandgoId Resource 7565.0 165.0 7720.0 4425.0
    Rio Tinto . . . . . . . . .3946.0 -42.0 4712.0 2712.5
    Vedanta Resources 1317.0 -42.0 2518.0 928.0
    Xstrata . . . . . . . . . . .1261.5 -21.5 1550.0 764.0
    Inmarsat . . . . . . . . . . .422.0 -0.6 719.5 389.3
    Vodafone Group . . . .177.9 2.8 182.8 155.1
    Genesis Emerging . .509.0 -4.0 548.5 424.0
    Afren . . . . . . . . . . . . . .132.7 -1.3 171.2 73.6
    BG Group . . . . . . . . .1430.0 5.0 1564.5 1144.0
    BP . . . . . . . . . . . . . . . .489.6 5.1 497.5 363.2
    Cairn Energy . . . . . . .344.9 18.0 469.7 257.8
    EnQuest . . . . . . . . . . .113.5 1.1 158.5 85.7
    Essar Energy . . . . . .131.9 -2.0 533.5 120.0
    ExiIIon Energy . . . . . .261.9 -1.9 469.7 184.2
    Heritage OiI . . . . . . . .194.5 -1.0 332.2 160.0
    Ophir Energy . . . . . . .324.0 6.5 325.6 184.5
    Premier OiI . . . . . . . . .413.7 -4.5 535.0 310.0
    RoyaI Dutch SheII . .2257.0 -4.0 2402.0 1883.5
    RoyaI Dutch SheII . .2292.5 -2.0 2489.0 1890.5
    SaIamander Energy .235.0 0.1 317.6 182.3
    Soco Internationa . . .305.3 0.8 400.0 278.0
    TuIIow OiI . . . . . . . . .1466.0 4.0 1493.0 945.5
    Amec . . . . . . . . . . . .1063.0 8.0 1228.0 740.5
    Hunting . . . . . . . . . . .844.5 2.5 850.2 530.0
    Kentz Corporation . .479.1 -2.0 508.0 347.0
    LampreII . . . . . . . . . . .330.3 2.3 395.2 220.7
    Petrofac Ltd. . . . . . .1475.0 1.0 1603.0 1108.0
    Wood Group (John) .679.5 7.5 715.8 469.9
    Burberry Group . . . .1446.0 -15.0 1600.0 1092.0
    PZ Cussons . . . . . . . .312.4 -3.4 387.9 285.0
    Supergroup . . . . . . . .703.0 41.0 1820.0 435.2
    AstraZeneca . . . . . .2997.0 -13.0 3194.0 2543.5
    BTG . . . . . . . . . . . . . .344.0 4.5 347.5 210.1
    Genus . . . . . . . . . . . .1068.0 30.0 1111.0 853.5
    GIaxoSmithKIine . . .1419.5 3.5 1497.0 1138.5
    Hikma Pharmaceuti .719.0 -10.0 869.0 555.5
    Shire PIc . . . . . . . . . .2129.0 19.0 2243.0 1640.0
    CapitaI & Countie . . .196.9 0.1 203.7 142.8
    Daejan HoIdings . . .3030.0 80.0 3030.0 2282.0
    F&C CommerciaI Pr .103.8 0.0 108.0 92.6
    Grainger . . . . . . . . . . .105.0 1.5 133.2 77.3
    London & Stamford .110.3 2.2 140.0 103.9
    SaviIIs . . . . . . . . . . . . .355.7 1.3 427.1 256.2
    UK CommerciaI Pro . .75.7 0.8 85.5 65.1
    Unite Group . . . . . . . .189.1 5.2 224.1 152.9
    Big YeIIow Group . . .295.0 1.0 344.4 218.0
    British Land Co . . . . .505.5 2.5 629.5 444.0
    CapitaI Shopping . . .340.3 1.2 408.6 288.7
    Derwent London . . .1741.0 -5.0 1880.0 1400.0
    Great PortIand Es . . .368.9 -3.1 445.0 312.9
    Hammerson . . . . . . . .381.3 -1.5 490.9 345.2
    Hansteen HoIdings . . .75.5 0.0 89.5 68.0
    Land Securities G . . .687.5 0.0 885.0 612.0
    SEGRO . . . . . . . . . . . .227.5 2.7 331.3 195.0
    Shaftesbury . . . . . . . .519.0 1.0 539.0 441.2
    Aveva Group . . . . . .1722.0 11.0 1799.0 1298.0
    Computacenter . . . . .414.7 5.9 490.0 324.7
    Fidessa Group . . . . .1676.0 16.0 2109.0 1444.0
    Invensys . . . . . . . . . . .215.3 2.5 357.8 180.9
    Logica . . . . . . . . . . . . .83.5 2.3 147.2 59.0
    Micro Focus Inter . . .447.3 1.3 455.0 242.9
    Misys . . . . . . . . . . . . .335.0 5.5 420.2 214.9
    Sage Group . . . . . . . .303.2 -0.3 310.1 231.7
    SDL . . . . . . . . . . . . . . .657.5 1.5 711.5 586.0
    TeIecity Group . . . . . .666.5 4.5 667.5 450.5
    Aggreko . . . . . . . . . .2159.0 -3.0 2165.0 1394.5
    Ashtead Group . . . . .247.8 -4.5 252.5 99.4
    Atkins (WS) . . . . . . . .724.0 -13.0 820.0 490.2
    Babcock Internati . . .740.5 -5.5 758.0 542.0
    Berendsen . . . . . . . . .468.5 3.8 568.0 402.7
    BunzI . . . . . . . . . . . . .873.0 -6.0 906.5 676.5
    Cape . . . . . . . . . . . . . .438.9 11.6 591.5 295.0
    Capita . . . . . . . . . . . . .634.5 -4.0 786.5 611.5
    CariIIion . . . . . . . . . . .309.5 -4.2 403.2 281.0
    De La Rue . . . . . . . . .980.0 0.0 986.5 685.0
    DipIoma . . . . . . . . . . .400.0 -1.6 425.5 263.5
    EIectrocomponents .234.1 1.9 294.9 182.2
    Experian . . . . . . . . . . .906.0 2.5 906.0 665.0
    FiItrona PLC . . . . . . . .383.6 -1.7 404.5 287.1
    G4S . . . . . . . . . . . . . . .274.6 0.6 291.0 219.9
    Hays . . . . . . . . . . . . . . .82.9 -2.9 130.0 58.9
    Homeserve . . . . . . . .284.9 -5.5 532.0 218.5
    Howden Joinery Gr . .109.5 0.3 127.5 93.1
    Interserve . . . . . . . . . .300.0 8.0 341.3 239.8
    Intertek Group . . . . .2207.0 -7.0 2224.0 1738.0
    MichaeI Page Inte . . .429.9 -0.1 567.0 323.0
    Mitie Group . . . . . . . .261.8 1.8 271.0 195.9
    PayPoint . . . . . . . . . . .573.0 -2.0 585.0 327.3
    Premier FarneII . . . . .209.4 -0.6 308.8 144.5
    Regus . . . . . . . . . . . . .106.5 -1.3 119.0 64.0
    RentokiI InitiaI . . . . . . .77.3 -1.2 103.4 58.2
    RPS Group . . . . . . . . .228.4 8.9 253.0 156.6
    Serco Group . . . . . . .522.0 -2.0 618.5 458.0
    Shanks Group . . . . . .105.1 -5.4 130.9 90.8
    SIG . . . . . . . . . . . . . . .106.3 1.2 153.5 77.0
    Travis Perkins . . . . . .939.5 -9.0 1090.0 715.0
    WoIseIey . . . . . . . . .2288.0 -11.0 2302.0 1404.0
    ARM HoIdings . . . . . .577.0 -11.0 651.0 464.0
    CSR . . . . . . . . . . . . . .234.2 -4.8 447.0 154.1
    Imagination Techn . .618.0 19.0 618.0 296.9
    Spirent Communica .132.3 1.1 160.0 105.8
    British American . .3069.0 26.0 3079.0 2300.0
    ImperiaI Tobacco . .2408.0 19.0 2444.0 1878.0
    Betfair Group . . . . . . .884.0 -2.5 1030.0 567.0
    Bwin.party Digita . . .174.0 2.2 204.0 100.6
    CarnivaI . . . . . . . . . .1992.0 1.0 2983.0 1742.0
    Compass Group . . . .629.0 4.5 631.9 512.5
    Domino's Pizza UK . .479.7 -4.0 547.0 377.0
    easyJet . . . . . . . . . . . .472.0 -4.1 477.6 301.0
    FirstGroup . . . . . . . . .306.1 -4.0 378.7 301.8
    Go-Ahead Group . . .1282.0 -2.0 1598.0 1190.0
    Greene King . . . . . . .517.5 -4.0 521.5 410.0
    InterContinentaI . . .1367.0 -6.0 1435.0 955.0
    InternationaI Con . . .186.4 -3.3 268.1 132.0
    JD Wetherspoon . . . .418.1 4.9 468.3 380.5
    Ladbrokes . . . . . . . . .146.3 -0.9 155.3 114.0
    Marston's . . . . . . . . . . .98.7 0.2 112.0 84.6
    MiIIennium& Copt . .470.0 2.0 600.5 371.2
    MitcheIIs & ButIe . . . .268.5 -0.2 348.7 215.6
    NationaI Express . . .225.0 -0.2 270.2 201.6
    Rank Group . . . . . . . .140.0 5.1 153.7 109.5
    Restaurant Group . . .305.9 3.5 335.0 254.9
    Spirit Pub Compan . . .52.5 1.5 55.0 35.3
    Stagecoach Group . .281.3 1.1 287.4 200.0
    TUI TraveI . . . . . . . . . .206.5 -0.8 250.0 136.7
    Whitbread . . . . . . . .1706.0 -10.0 1863.0 1409.0
    WiIIiamHiII . . . . . . . . .230.0 -4.2 244.1 176.8
    Abcam . . . . . . . . . . . .330.0 -4.0 460.0 320.0
    Advanced MedicaI . . .89.0 -2.5 96.0 64.8
    AIbemarIe & Bond . .348.5 -5.0 400.1 281.0
    Amerisur Resource . .19.8 -0.8 29.0 9.5
    Andor TechnoIogy . .530.0 -29.8 685.0 387.1
    ArchipeIago Resou . . .70.0 0.0 79.0 55.5
    ASOS . . . . . . . . . . . .1845.0 -20.0 2468.0 1142.0
    AureIian OiI & Ga . . . .16.0 -0.5 92.0 16.0
    Avanti Communicat .284.0 -1.5 628.0 248.5
    BIinkx . . . . . . . . . . . . . .69.8 0.8 158.0 50.5
    Borders & Souther . . .68.8 -1.0 73.3 43.5
    BowLeven . . . . . . . . . .81.0 2.5 382.3 62.0
    Brooks MacdonaId .1135.0 5.0 1372.5 940.0
    Cove Energy . . . . . . .140.0 0.0 140.7 61.0
    Daisy Group . . . . . . .103.0 -1.0 127.0 88.0
    EMIS Group . . . . . . . .430.0 -10.0 580.0 397.5
    Faroe PetroIeum . . . .165.8 -2.3 194.0 130.0
    GuIfsands PetroIe . . .175.3 -2.8 342.0 142.5
    GWPharmaceuticaI . .90.0 0.0 130.0 78.5
    H&T Group . . . . . . . . .339.0 -7.5 395.0 277.0
    Hargreaves Servic .1177.0 2.0 1185.0 855.0
    HeaIthcare Locums . . . .3.6 -0.0 3.8 3.6
    Immunodiagnostic . .384.3 -11.0 1218.0 288.8
    ImpeIIamGroup . . . .243.0 0.0 387.5 210.0
    Iomart Group . . . . . . .139.0 -0.5 145.0 85.5
    James HaIstead . . . . .475.0 -2.0 495.0 410.0
    KaIahari MineraIs . . .243.0 0.0 301.0 198.3
    London Mining . . . . .294.0 0.3 436.5 257.5
    Lupus CapitaI . . . . . .130.0 0.0 150.0 86.0
    M. P. Evans Group . .450.0 7.5 475.0 371.0
    Majestic Wine . . . . . .426.0 2.5 510.0 315.0
    May Gurney Integr . .290.0 -9.0 302.0 234.0
    Monitise . . . . . . . . . . . .32.3 2.8 40.0 20.5
    MuIberry Group . . . .1844.0 -6.0 1920.0 1065.0
    Nanoco Group . . . . . . .62.0 -1.5 93.3 38.0
    NauticaI PetroIeu . . .323.3 -2.0 547.0 223.5
    NichoIs . . . . . . . . . . . .596.3 -3.8 615.0 410.0
    Numis Corporation . . .95.0 1.0 126.0 72.0
    Pan African Resou . . .17.8 0.0 17.8 9.5
    Patagonia GoId . . . . . .42.3 -0.3 70.0 37.3
    Prezzo . . . . . . . . . . . . .66.5 0.5 71.5 53.5
    Pursuit Dynamics . . . .98.0 -3.0 410.0 67.0
    Rockhopper ExpIor .357.5 0.5 386.0 141.0
    RWS HoIdings . . . . . .476.9 3.5 481.8 328.0
    Secure Trust Bank .1005.0 0.0 1030.0 755.0
    Songbird Estates . . .105.0 -0.1 160.3 103.0
    VaIiant PetroIeum . . .417.8 -6.3 645.0 400.0
    Young & Co's Brew . .631.0 -1.0 712.0 565.0
    Oxford Instruments 1083.0 8.8
    New WorId Resource 540.0 6.5
    Supergroup . . . . . . . .703.0 6.2
    Cairn Energy . . . . . . .344.9 5.5
    Gem Diamonds Ltd. .234.4 5.5
    RPS Group . . . . . . . . .228.4 4.1
    Rank Group . . . . . . . .140.0 3.8
    Domino Printing Sc .619.5 3.7
    Synergy HeaIth . . . . .887.5 3.6
    AngIo Pacific Grou . .315.6 3.5
    Bumi . . . . . . . . . . . . . .795.0 -6.5
    Shanks Group . . . . . .105.1 -4.9
    GIencore Internati . . .460.8 -4.5
    PetropavIovsk . . . . . .772.0 -4.5
    Ocado Group . . . . . . .103.5 -4.4
    AdmiraI Group . . . . . .998.5 -3.8
    Hays . . . . . . . . . . . . . . .82.9 -3.3
    TeIecom PIus . . . . . . .654.5 -3.1
    Vedanta Resources .1317.0 -3.1
    Chemring Group . . . .412.7 -2.9
    Risers FaIIers
    MAIN CHANGES UK 350
    Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
    Price Chg High Low Price Chg High Low
    GILTS
    AEROSPACE & DEFENCE
    CONSTRUCTION & MATERIALS
    ELECTRICITY
    ELECTRONIC & ELECTRICAL EQ.
    EQUITY INVESTMENT INSTRUM.
    FINANCIAL SERVICES
    FIXED LINE TELECOMS
    FOOD & DRUG RETAILERS
    FOOD PRODUCERS
    FORESTRY & PAPER
    GAS, WATER & MULTIUTILITIES
    GENERAL RETAILERS
    HEALTH CARE EQUIPMENT & S.
    HHOLD GDS & HOME CONSTR.
    INDUSTRIAL ENGINEERING
    INDUSTRIAL TRANSPORTATION
    MEDIA
    LIFE INSURANCE
    PERSONAL GOODS
    PHARMACEUTICALS & BIOTECH
    REAL ESTATE INVEST. & SERV.
    SOFTWARE & COMPUTER SERV.
    SUPPORT SERVICES
    TECHNOLOGY HARDW. & EQUIP.
    TOBACCO
    TRAVEL & LEISURE
    AIM 50
    NON LIFE INSURANCE REAL ESTATE INVEST. TRUSTS
    http://corporate.webfg.com
    mailto:
    globaltechsales@webfg.com
    AUTOMOBILES & PARTS
    BANKS
    CHEMICALS
    BEVERAGES
    GENERAL INDUSTRIALS
    MOBILE TELECOMS
    OIL & GAS PRODUCERS
    OIL EQUIPMENT & SERVICES
    MINING
    NONEQUITY INVESTM. COMM.
    Tsy 9.000 12 . . . .103.75 -0.47 111.6 103.3
    Tsy 5.000 12 . . . .100.33 -0.04 104.3 100.3
    Tsy 5.250 12 . . . .101.61 -0.02 105.4 101.6
    Tsy 4.500 13 . . . .104.39 -0.03 106.5 104.3
    Tsy 2.500 13 . . . . .283.11 -0.04 287.7 279.2
    Tsy 8.000 13 . . . . .112.35 -0.03 116.9 112.2
    Tsy 5.000 14 . . . . .111.67 -0.05 112.9 109.2
    Tsy 4.750 15 . . . . .114.44 -0.03 115.4 108.6
    Tsy 8.000 15 . . . .127.53 -0.02 129.2 123.7
    Tsy 7.750 15 . . . .100.00 0.00 106.3 99.4
    Tsy 4.000 16 . . . . .113.55 -0.04 114.7 104.9
    Tsy 2.500 16 . . . .341.83 -0.07 346.7 312.1
    Tsy 12.000 17 . . .121.13 0.00 128.8 120.9
    Tsy 8.750 17 . . . .140.27 -0.30 141.9 132.9
    Tsy 1.250 17 . . . . .115.39 0.00 116.6 106.7
    Tsy 5.000 18 . . . .121.25 0.01 122.5 109.7
    Tsy 4.500 19 . . . . .119.38 0.04 120.7 105.4
    Tsy 3.750 19 . . . . .114.18 0.03 115.6 99.4
    Tsy 2.500 20 . . . .362.81 0.11 367.1 314.0
    Tsy 4.750 20 . . . .121.77 0.12 123.5 106.6
    Tsy 8.000 21 . . . .150.74 0.12 153.4 133.8
    Tsy 1.875 22 . . . .126.32 0.15 129.1 111.3
    Tsy 4.000 22 . . . . .115.94 0.14 118.2 99.0
    Tsy 2.500 24 . . . .326.94 0.16 334.7 275.6
    Tsy 5.000 25 . . . .127.61 0.16 130.6 107.4
    Tsy 1.250 27 . . . .123.18 0.13 127.0 104.8
    Tsy 4.250 27 . . . . .119.38 0.14 122.7 97.9
    Tsy 6.000 28 . . . .144.05 0.15 148.0 119.5
    Tsy 4.750 30 . . . .126.36 0.15 130.5 103.0
    Tsy 4.125 30 . . . .314.33 0.06 322.8 262.9
    Tsy 4.250 32 . . . . .118.91 0.14 123.1 96.0
    Tsy 4.250 36 . . . . .119.14 0.13 123.9 95.0
    Tsy 4.750 38 . . . .128.57 0.14 134.2 102.8
    Tsy 4.500 42 . . . .125.04 0.16 130.8 98.9
    % %
    CITYA.M. 7 FEBRUARY 2012 21
    Wealth Management | ISAs
    T&Cs: Austin Reed branded suits & shirts only
    FINAL DAYS OF SALE
    "645*/3&&%$06,
    READY TO WEAR SUITS
    FROM
    179
    MADE TO MEASURE SUITS
    FROM
    299
    SHIRTS
    FROM
    20
    C
    OUNTRIES receive the immigrants they
    deserve. A migrant has 192 countries to
    choose from. He or she will choose
    according to his own preferences and
    reasons. The possibility of economic better-
    ment is the most important: nobody aspires to
    end up on the breadline. What forms of eco-
    nomic betterment are available will determine
    what sorts of people a country attracts.
    People can preserve or increase their income
    in all sorts of ways and there are correspon-
    ding countries for each option. People who
    already earn a high income may move to
    places like Switzerland and Monaco. People
    who dont want to work too much, but want to
    enjoy substantial social and health care protec-
    tion, may move to France. People who want to
    live in a booming, dynamic society will move
    to Hong Kong or Singapore. People who want
    to work hard, and earn a lot over a short peri-
    od, may move to the Gulf States.
    Who moves to Britain? As the political-eco-
    nomic climate changed over the last decades it
    is likely that the immigrants changed, too.
    What attracted us yesterday will have changed
    from what attracts people today. Of course,
    immigrants come for all sorts of reasons. But
    when the economic opportunities alter, it is
    more likely that certain sorts of immigrants
    will arrive, while others will go elsewhere.
    When I came to the UK in 1994, it was a get-
    on-yer-bike sort of country. If you worked hard,
    you could make it. The state helped by staying
    out of the way. Unemployment was far lower
    than in my native Belgium. It was very easy to
    set up your own business. Taxes were low.
    You know what came next. The Labour Party
    built up its client state with taxpayers money.
    Tax credits helped welfare grow to extraordi-
    nary levels. The state bloated while the private
    sector shrank. Stealth taxes fooled the middle
    classes into believing that it was business as
    usual. Greedy politicians funded their pet proj-
    ects by mortgaging our childrens future.
    At the same time, they threw the doors wide
    open. Millions came. What attracted this
    recent batch of immigrants? Its different for
    every individual. Though when one sees that
    visas were granted to one-legged roofers, one
    has to wonder. Welfare and housing continued
    to be distributed on a last-come, first-served
    basis. Were we advertising a land of opportuni-
    ty or an easy ride?
    Today its even worse. The zeitgeist is to
    attack capitalism, high salaries and wealth. He
    who makes it is subjected to suspicion and hos-
    tility. Under the guise of social justice, Peter is
    robbed to pay Paul. What does this say to aspir-
    ing migrants apart from those who want to
    better themselves through their own efforts
    need not apply? Wannabe entrepreneurs
    would be quite mad to move to Britain today.
    There is nothing wrong with immigration.
    It has always existed to some extent; Churchill
    famously called the Anglo-Saxons a mongrel
    race. Today, the phenomenon of cross-border
    migration is unstoppable indeed, trying to
    stop it is like King Canute commanding the
    waves. Think of the huge numbers of gap year
    students, living abroad. Look at our pensioners
    in France and Spain.
    All you can do is try to influence the sort of
    people who end up on your shores. For this,
    our coalition government favours an immigra-
    tion cap. Only those needed in the economy
    are to be welcomed. But this throws us back to
    the delusional days of the planned economy.
    How on earth is the state to know what sort of
    people the economy needs? A free market
    economy is about unpredictable trial and
    error, not a civil servant with a clipboard
    standing at Britains gate telling the hopeful:
    Weve now accepted 27 engineers. Sorry,
    were full up, we cannot accept 28. Capping
    immigration this way is ludicrous. Especially
    as some powerful business interests will
    always be able to convince the government of
    the day that their sort of labourers are just
    what the economy needs. Crony capitalism
    will never go away, but it flourishes under con-
    ditions like these.
    There is a far more satisfactory way to deal
    with mass immigration. The reason why there
    is a sudden outcry against immigration is that
    money is short. When the economy shrinks,
    the pie shrinks, and citizens are wary of hav-
    ing to share it with ever-more strangers. The
    solution lies in encouraging immigrants to
    help grow the economy. Hong Kongs popula-
    tion increased from 600,000 to 2.2m between
    1945 and 1955. And yet it coped: in 1945, its
    income per capita was a quarter of Britains. By
    1997 it was equal even though Britain had
    grown tremendously over that period, too.
    The best way to deal with immigration is to
    make Britain a land of opportunity. Reduce the
    size of the state. Reduce taxes. Cap welfare pay-
    ments. Cap housing benefit. Keep the safety
    net, but bin the safety hammock. Just you
    wait: an entirely different sort of hopefuls will
    once again enrich our nation.
    JP Floru is the author of What the Immigrant Saw,
    published by Bretwalda Books 9.99.
    22
    The Forum
    CITYA.M. 7 FEBRUARY 2012
    Wannabe entrepreneurs
    would be quite mad to
    move to Britain today
    Britain must become a land
    of opportunity once more to
    attract the worlds workers
    cityam.com/forum
    JP FLORU
    Agree? Disagree? Got a sharp comment?
    The Forum wants you to join the debate.
    COMMENT NOW ON
    Twitter: @cityamforum;
    on the web: cityam.com/forum;
    or by email: theforum@cityam.com.
    Top responses will be reprinted in The Forum.
    23
    As the European
    Parliament hopes
    for its Tobin Tax,
    one MEP says no
    We must resist
    a tax that isnt
    FTT for purpose
    A
    S THE European Parliament held its
    public hearing on the proposed finan-
    cial transaction tax (FTT) on Monday,
    the battle positions were clearly drawn.
    For the Eurozone, an FTT represents a smallish
    subsidy to repair damaged national balance
    sheets; for the UK, the adoption of an FTT
    would represent a massive drag on the coun-
    trys economic performance.
    It is obviously attractive to Germany to sup-
    port an FTT because it would spare the EUs
    largest economy the pain of having to bail out
    its fellow Eurozone members. It is attractive to
    France, Italy, Greece and others because they
    would rather take money first from the UK
    than ask Germany alone to pay for their bur-
    geoning debts. And it is especially attractive to
    French President Nicolas Sarkozy because
    blaming the British in an election year might
    help him get re-elected. In short, the Eurozone
    wants an FTT for all the wrong reasons. It is a
    brazen grab for the riches of this City to bail
    out the rest of the continent.
    The Global Financial Markets Association
    believes that an FTT on foreign exchange trad-
    ing would directly increase transaction costs
    for all transactions by three to seven times and
    by up to 18 times for the most traded part of
    the market. This will have an immediate and
    direct affect on liquidity, with much specula-
    tive FX activity moving outside the EU, with
    the result that it would raise far less revenue
    than hoped for. It estimates that 70-75 per cent
    of tax-eligible transactions would move out-
    side of the EU tax jurisdiction.
    The people who would be hit by the tax are
    those in the real economy (pension funds,
    asset managers, insurers and corporates) as
    both direct and indirect costs are largely
    passed onto end-users, who will be least able to
    move transactions to jurisdictions not subject
    to the tax. Those who defend the FTT say it is a
    tiny amount being raised on each transaction.
    But Avivas figures show the cumulative effect
    over several decades could cost a typical pen-
    sioner upwards of 15,000.
    The European Commissions own impact
    assessment estimates that European GDP will
    be reduced by 1.5 per cent as a result of the tax,
    which some have calculated to mean a loss of
    half a million jobs across the EU. Other
    research claims the reduction in GDP would be
    larger. That matters little to those whom I
    meet in the European Parliament, who are
    clearly motivated more by avenging the appar-
    ent sins of bankers than by practical considera-
    tion of the consequences of their actions.
    Brussels sees the City as a cash cow that it
    wants to milk as hard as it can for as long as it
    can. I hope Icap group chief executive Michael
    Spencer is right that there is not a prayer in
    Hades of the UK agreeing to the proposed
    European Union financial transaction tax. But
    I fear David Cameron will have to use his veto
    again and again.
    If there is no let up in the barrage of new
    taxes and regulations being planned by the EU
    for our financial services industry, and espe-
    cially while there remains no solution to the
    Eurozone crisis, we may hear many more voic-
    es in the City asking if it is worth remaining a
    member of the European Union at all.
    Syed Kamall is MEP for London and a member of
    the European Parliaments Economic and Monetary
    Affairs Committee (ECON).
    Shrinking R&D
    It is not correct to blame inten-
    sified regulation for the phar-
    maceutical industrys woes
    [Regulation has pushed pharma
    off a cliff-edge, yesterday]. The
    statistics actually show that
    per new drug application, the
    FDAs record of approving new
    drugs has stayed more or less
    unchanged over the past
    decade. The problem is that
    research and development pro-
    ductivity within large pharma-
    ceutical compa-
    nies has fallen over the same
    period the number of new
    drug applications has
    decreased, and as a conse-
    quence, approvals. That is why
    larger companies are increas-
    ingly outsourcing their medical
    innovation to smaller, more
    nimble biotechnology compa-
    nies. Investors in these smaller
    companies already know this
    and are making good returns.
    David Pinniger
    investment manager
    Speak your mind
    The Forum is open for you to
    take part. Got a sharp comment
    on one of todays columns or
    rapid response topics? Do you
    have another subject relating to
    business and the economy you
    want to share your opinion on?
    We want to hear your views.
    Readers are invited to comment
    on the web: cityam.com/forum;
    by email: theforum@cityam.com;
    and on Twitter: @cityamforum.
    The best responses will be
    reprinted in The Forum.
    RAPID RESPONSES
    SYED KAMALL
    BY ANTHONY J. EVANS
    CITYA.M. 7 FEBRUARY 2012
    The Forum
    I
    T SHOULD be no
    surprise that social-
    ist economies give
    the impression of
    creating more output
    than capitalist ones.
    Under socialism you get
    rewarded based on
    what you produce
    hence an incentive to overstate production. Under
    capitalism you get taxed based on what you pro-
    duce hence an incentive to understate production.
    These are two rational responses to the rules of the
    game, and demonstrate how the way we measure
    economic activity is dependent on those rules.
    But there is no clear distinction between social-
    ism and capitalism in practice. To some extent the
    Soviet Union was merely a market economy laden
    with rent-seeking and riddled by bureaucracy. The
    present banking system suffers from similar sorts
    of corruption and inefficiency.
    When economists talk about the efficiency of
    the profit and loss system, we tend to take for
    granted that the profit and loss we observe
    matches with reality. But government interven-
    tions are liable to disrupt these signals inefficient
    taxes, arbitrary subsidies, and monetary debase-
    ment all separate prices from the underlying con-
    ditions of demand and supply. Another source of
    noise is faulty accounting standards as Gordon
    Kerr has pointed out in his fascinating new book
    The Law of Opposites: Illusory profits and the
    financial sector.
    Published by the Adam Smith Institute and sup-
    ported by the Cobden Centre, of which I am a sen-
    ior founding fellow, it is a short, accessible, inside
    account of how present accounting standards not
    only permit but actually require wrong accounting.
    With special emphasis on International Financial
    Reporting Standards (IFRS) Kerr shows how
    banks are able to game the system. It warrants
    serious attention from those keen to understand
    how the regulatory structure actually contributed
    to the financial crisis.
    According to Kerr, accounts should be the man-
    agers and auditors honest statement of the
    banks financial position but he points out that
    executives have both the motive and means to
    overstate profits. It would be naive to think that
    independent auditing solves this problem, and we
    should expect accounting errors as a fact of life.
    But this is mitigated if companies that make
    errors or indeed commit fraud can be rooted
    out. The profit and loss mechanism is what
    penalises financial wrongdoing.
    The problem with regulation is that by its
    nature it standardises accounting techniques.
    Therefore if those techniques are faulty, they cre-
    ate a systemic crisis. Kerr outlines this dynamic of
    intervention, showing how the failure of one poli-
    cy (such as the Basel II rules placing higher capital
    charges on small businesses) leads to even worse
    ones (such as subsidising credit). When bureau-
    crats launch new interventions to correct the per-
    verse effects of the old ones we are doomed.
    Kerr was an adviser to the Private Members Bill
    proposed by Steve Baker MP last year, which
    attempts to oblige banks to file accounts based on
    UK company law rather than IFRS. The banking
    industry would be wise to consider its arguments.
    Anthony J. Evans is associate professor of econom-
    ics at Londons ESCP Europe Business School.
    www.anthonyjevans.com
    anthonyjevans@gmail.com
    Its hard to account for
    flaws in the rule-book
    Email: theforum@cityam.com
    Twitter: @cityamforum
    In association with
    A
    NOTHER week has passed by
    without a deal from Athens and
    the currency markets are clearly
    starting to suffer from headline
    fatigue. While the risks are quite serious,
    the markets continue to believe in an
    11th hour deal which is why the fallout
    in the euro has been relatively modest.
    Yet the longer the saga continues the
    more uncertainty it will invite. The situa-
    tion will then enter into uncharted terri-
    tory, as Greece will face the prospect of
    hard default opening up the risk of mas-
    sive counter party losses.
    Away from the drama in Athens,
    however, another theme is unfolding
    that may have much stronger conse-
    quences on currency trading as the year
    progresses. Last Fridays Non-Farm
    Payroll (NFP) report blew out all expec-
    tations printing at nearly 50 per cent
    more than the consensus estimate and
    in the process may have changed the
    terms of debate in the currency market.
    US employment increased by 243,000
    jobs versus 150,000 eyed, the unem-
    ployment rate declined to 8.3 per cent
    from 8.5 per cent forecast. Aside from
    instantly raising the odds of President
    Obamas reelection on the Intrade web-
    site, the bullish NFP report also
    markedly reduced the chances of addi-
    tional quantitative easing (QE) by the
    Fed.
    Fridays much better than expected
    labour data indicates that the Fed will
    not engage in further QE as the need
    for monetary stimulus has diminished.
    That means, all things being equal, the
    Feds balance sheet should remain rela-
    tively stationary. Meanwhile both the
    European Central Bank (ECB) and the
    Bank of England (BoE) are expected to
    continue easing aggressively as the
    year progresses. The ECB will expand
    its balance sheet through the LTRO
    with most analysts expecting an uptake
    of as much as 1 trillion (829bn) at
    the next tender offer, while the BoE is
    expected to increase its QE program by
    50bn in order to support the recovery
    in UK economy.
    Although the Federal Reserve is hard-
    ly a paragon of fiscal virtue, in FX
    everything is relative. With G-3 interest
    rates expected to remain near zero for
    the foreseeable future, currency
    investors may be starting to focus more
    on balance sheet issues instead of risk
    flows.
    In short, if the currency market is
    now in the process of changing its focus
    from economic growth to balance sheet
    integrity then the US dollar may
    become the beneficiary of this new
    dynamic.
    This week the market will focus on
    both ECB and BoE monthly meeting
    announcements, both scheduled for
    Thursday. Neither central bank is
    expected to make any changes in inter-
    est rate policy, but traders will no doubt
    hang on every word of ECB President
    Mario Draghi during his monthly press
    conference at 1.30pm this Thursday. If
    he indicates that the ECB is prepared to
    maintain its LTRO facility for the fore-
    seeable future, the euro could weaken
    further as traders begin to price in the
    massive balance sheet expansion.
    Meanwhile Greece still remains a nag-
    ging problem for the Eurozone and if
    the deal comes undone it could prove to
    be a perfect storm for the single cur-
    rency as the week progresses.
    For now the markets remain in con-
    solidation mode with a $1.3000 level
    continuing to hold. The currency pair
    remains grossly oversold with the latest
    COT data showing only modest reduc-
    tion in shorts from 172,000 to 158,000
    and this skew in positioning is one of
    the primary reasons for its relative
    strength. However, that factor alone
    will not be enough to support the euro
    if the currency market begins to consid-
    er the balance sheet damage that a
    Greek default would entail.
    DIRECTOR OF CURRENCY RESEARCH, GFT
    BORIS SCHLOSSBERG
    A NEW THEME FOR THE EURO
    DESPITE AN AILING ATHENS
    facebook.com/fx360 twitter.com/fx360
    fx360.com
    The contents of this column are provided for general information purposes only. One should consider the appropriateness
    of the information in light of their own objectives, financial situation or needs before trading. CD11UK.074.010612
    A
    S THE buzz continues about
    the Facebook public offer-
    ing later this year, IG
    Markets is offering grey
    market trading on the social net-
    working sites market cap. The grey
    market allows shares to be traded
    on an unofficial market ahead of
    the IPO expected in May.
    When it filed with the Securities
    and Exchange Commission on
    Wednesday last week, Facebook
    stated that it sought to raise $5bn,
    however that number is only a
    placeholder and the figure will
    likely grow in the build up to the
    hotly anticipated launch.
    Based on Ocado and Betfair, our
    grey market ended up being not a
    million miles away from the actual
    price on debut, says David Jones,
    chief market strategist at IG
    Markets. With Facebook talking
    about a May start of trading, there
    is still an awful lot of time left to go
    and at the moment our clients
    appear to be valuing it above the
    top end of expectations.
    The IG price started at $92bn last
    Thursday and had steady buyers all
    through the day. It peaked at
    $123bn, but has seen some selling
    since then (see chart, below right
    for yesterdays trading.) The stock is
    seen by many as being hugely over-
    valued, but at this stage in the
    game the grey market trading
    price is being driven by excitement
    and media hype over any real fun-
    damentals, something that may
    change as more detail about the
    launch slips out into the public
    domain. We have run this in the
    past for the likes of Ocado and
    Betfair and saw little interest from
    clients says Jones. This time
    round it has been different, pre-
    sumably because
    everyone knows Facebook and has
    an opinion.
    BETTING ON THE BELL
    Elsewhere, bookmakers Paddy
    Power are offering odds on who
    will ring the New York Stock
    Exchange opening bell on the day
    of the Facebook flotation Mark
    Zuckerberg is the clear favourite
    at 1/100, with Sean Parker and Bill
    Gates currently being offered at
    25/1 and 50/1 respectively. U2 lead
    singer Bono, who owns shares in
    Facebook via his private equity
    firm Elevation Partners, is a long
    shot at 100/1.
    Grey trading on the
    Facebook IPO price
    Though the public offering is not expected until May, you
    can still take a position on the price, writes Craig Drake
    I
    NVESTORS in housing firm Bellway will be hoping
    that the company wont be dropping any clangers
    tomorrow when it releases its latest trading update,
    but instead will be looking for signs that the future is
    still relatively appealing. The last update back in
    December 2011 was positively ringing with optimism,
    with the company noting that visitor levels and reserva-
    tions were still resilient. If tomorrows update is a similar
    clarion call for an improving market then we could see
    Bellway make yet more gains, building on the 10 per rise
    seen in 2012 so far. IG Index offers a spread on Bellway
    of 779p-785p.
    Xstrata shares had the X-Factor last week as it
    soared on news of the merger with Glencore. Its shares
    climbed nearly 15 per cent following the news, but
    topped out at the top trendline of a down channel it had
    been in for just over 12 months around 1,275p. Eagle-
    eyed chartists who spotted this and shorted Xstrata on
    Friday were rewarded with a 2 per cent fall on profit-
    taking this morning. Spread Co offers a spread on
    Xstrata of 1,258.55p1,260.93p.
    Vodafone is a very popular stock among clients and is
    due to give a trading update on Thursday. Those divi-
    dend hunters will keenly listen to hear whether there'll
    be a dividend increase to the already high yielding stock.
    Capital Spreads quotes a price of 175.8p-176.2p.
    HMV has taken a terrible battering over the past few
    years. The shares have fallen steadily since hitting a high
    of over 280p back in 2005, and continued to slide even
    as the broader equity market rallied off its March 2009
    lows. HMV got a boost last month after reaching a deal
    with its suppliers. But prices are drifting lower once
    again as investors question the companys strategy and
    the general outlook for high street retailers. GFT offers a
    spread on HMV of 5.10p-5.25p.
    Diageo posts half year numbers on Thursday. The
    results will likely highlight the strength of demand in
    North America for spirits. With volumes growing at
    their highest levels in nearly 3 years, Diageo generates
    40 per cent of its profits here. Despite the global down-
    turn, the producer of the iconic Guinness brand has got a
    head in the beverage sector and is aiming to generate
    around half its revenue from the emerging markets by
    2015. CMC Markets price for Diageo is 1,468.68p-
    1,471.23p.
    Craig Drake
    THE TIPSTER
    BELLWAY HOPING TO CHIME IN PROFITS
    $bn
    09:00 12:00 15:00 18:00 06Feb 11:00
    118
    114
    113
    116
    115
    112
    117
    ANALYSIS l Facebook IPO
    $
    Sep 2011 Oct Nov Dec 2012 Feb
    1.44
    1.36
    1.34
    1.32
    1.30
    1.28
    1.40
    1.38
    1.42
    ANALYSIS l Euro-dollar
    Wealth Management | Trading
    24 CITYA.M. 7 FEBRUARY 2012
    ANALYST PICKS
    STRATEGIST
    JOEL KRUGER
    My pick: Buy dollar-Canadian dollar on a daily close above Ca$1.0035
    Expertise: Technical analysis
    Average time frame of trades: 1 day to 1 week
    Our constructive outlook remains, despite the interday pullback, with the
    market largely still consolidating around parity ahead of what we believe
    will be an eventual retest of the key October highs by Ca$1.0660. Look
    for any interday pullbacks to be very well supported above Ca$0.9900,
    while only a close below Ca$0.9900 would give reason for concern. A
    close back above Ca$1.0035 should accelerate gains. Stops should be
    placed on a close below Ca$0.9900 with a Ca$1.0600 objective.
    STRATEGIST
    ILYA SPIVAK
    My pick: Short gold
    Expertise: Global macro
    Average time frame of trades: 1 week to 6 months
    Gold dropped after Januarys US employment report showed the econo-
    my added over 100,000 more jobs than expected, eroding demand for
    the yellow metal. Rising Eurozone debt crisis stress should weigh as well
    through boosting the dollar. Prices have now completed a bearish engulf-
    ing candlestick pattern below resistance at $1,763.00, warning that fur-
    ther losses are ahead. I will enter short from here, initially targeting
    $1,680.40. A stop-loss will be activated on a daily close above $1,763.07.
    STRATEGIST
    JOHN KICKLIGHTER
    My pick: Short S&P 500, long euro-Swissie, long dollar-yen
    Expertise: Fundamental and technical analysis with risk management
    Average time frame of trades: 1 day to 1 week
    The prevailing risk appetite run that has guided the markets since the
    beginning of the year ended last week with another thrust. There are a
    number of appealing setups to accompany this move, but Im too scepti-
    cal of fundamentals to take part. As such, Ill keep the standing order for
    a S&P 500 trend collapse below 1,300, as well as the non-risk depend-
    ent (but intervention-favourable) dollar-yen (long dollar-yen 76.50) and
    euro-Swiss franc (long euro-Swissie from SFr1.2060) positions.
    A
    S CHINAS economic power
    grows, its authorities are
    increasingly willing to punch
    their weight on the interna-
    tional stage. The decision to direct
    Chinese airlines to ignore the
    European Unions carbon-emissions
    system is a slap in the face. But can
    China really afford to be sanguine?
    The latest report from the
    International Monetary Fund (IMF)
    suggests not. China Economic Outlook
    concludes that in the absence of a
    domestic policy response, Chinas
    growth could decline by as much as
    four percentage points relative to the
    baseline projections leading to broad-
    based consumer and asset price defla-
    tion. As the graph (right) shows, a
    financial crisis switched the taps off
    last year the fallout from the last
    one saw global growth fall by around
    6.5 per cent: In China, even after a
    huge credit and fiscal stimulus
    response, which boosted growth by at
    least 6 percentage points, growth still
    fell by 5 percentage points. It would
    do so again.
    PLAYING CHINA
    Brenda Kelly of CMC Markets thinks
    the possibility that China can com-
    pensate for the global slowdown in
    their domestic market remains ques-
    tionable. She notes that when it
    comes to commodities, what every
    trader needs to know is that China is
    the biggest buyer in fact, there is a
    phrase, buy what China needs to buy,
    which has served many investors well
    (as producers of potash, oil, iron ore
    and copper will attest to in the past
    decade). This phrase would be turned
    on its head if Europe buys less and
    China builds less. The price of most
    commodities will only go one way.
    Chinese equities would also take a
    tumble and there are plenty of ways to
    get on the back of this besides taking
    positions against individual compa-
    nies. Angus Campbell of Capital
    Spreads says clients can trade on the
    HS Hong Kong index and China
    Enterprises index. Will Hedden of IG
    Markets notes many of its clients take
    contracts for difference on the futures
    index of China H-shares and the China
    A50. And David Morrison of GFT says
    the most direct way to take a view on
    China is through trading the iShares
    FTSE China 25 ETF.
    China isnt reinventing the wheel;
    its producing things cheaper than
    almost anywhere else on earth and
    flogging them to more developed mar-
    kets. But as with people, the mistakes
    of a growing nation are more easily
    forgiven the report predicts that
    despite increasing government spend-
    ing, as a share of GDP it will decline in
    baseline and contingent debt over the
    coming years. It is keen to push China
    to react to a Eurozone crisis with a fis-
    cal stimulus aimed at boosting con-
    sumer spending. Yet fiscal stimuli
    only get a country so far higher
    aggregate demand will show up in
    higher prices and ultimately it only
    displaces output.
    A sharp and deep recession in the
    Eurozone would hit China hard,
    offering traders an opportunity to go
    short. But as Campbell says: If that
    were to happen then you could sell
    just about anything.
    If the way of the dragon leads the Chinese to hit a brick wall,
    fiscal policy wont offer a route to safety, writes Philip Salter
    Chinas fate tangled with Eurozone
    What goes up... Picture: GETTY
    Wealth Management | Trading
    26 CITYA.M. 7 FEBRUARY 2012
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    ANALYSIS l Export growth by region Source: IMF
    2010-11 2008-09 2005-07 2002-04

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    B
    ATTLING the cold requires all
    sorts of snuggly warm vest-
    ments. The only bit of skin
    left literally in the cold is
    your face. The effect is dryness, red-
    ness and lost luminosity. Panic not,
    though, if a week at a Maldives spa
    is not on the cards this Februrary.
    There are two new facials in London
    that are absolutely perfect for reju-
    venating not just your face but your
    whole body in the depths of winter.
    Both practitioners use their own
    massage routines, both of which
    pay tribute to Chinese energy chan-
    nels and both use all-natural
    creams.
    SU-MAN AT AWAY SPA, W HOTEL
    Su-Mans debut at the W hotel spa is
    very exciting. The former dancer
    who normally practices in her light-
    flooded Crouch End garden studio
    gives an amazingly vigorous,
    assured treatment of your face,
    working you from head to toe. Its
    no wonder that the porcelain-faced
    Juliette Binoche swears by her
    facials during filming in London
    she has them every day.
    Su-Man kicks off with a head
    massage but a proper one, none of
    your namby-pamby stroking. She
    delves into the pressure channels all
    over your cranium, and reaches
    deep down your neck and back,
    kneading and kneading. This, she
    says, is to open up the [energy]
    channels in your face. But before
    the pleasure comes the pain, with
    an agonising battle with blackheads
    next. Dont have this treatment
    before a date: the extraction left my
    nose red for a good few hours after-
    wards.
    Following this, though, comes a
    beautiful-smelling exfoliator, made
    by Su-Man herself. She wont reveal
    Two new facials
    will breathe life
    and glow into your
    cold-battered skin,
    says Zoe Strimpel
    Lifestyle
    28
    Episode 46: a very private conversation
    Is this where Im supposed to what?
    just talk? I ask eventually.
    I wouldnt say just talk, my interlocu-
    tor replies. But yes,
    talking, freely, about whatever strikes you
    as interesting would be,
    well, interesting.
    Silence.Perhaps you could start by
    exploring why youre here.
    Ive just been to Perth. Well, a few hun-
    dred miles east of Perth. Twenty-four
    hours airborne to get there. Two days of
    meetings. Twenty-four hours airborne to
    get home. To spend the weekend jet-
    lagged, incapable of interaction with my
    family. Apart from the
    meetings, Ive until now - hardly spoken
    for, for almost a week. Just sat on planes.
    Hardly slept. Didnt watch the movies.
    Didnt read. Or drink. Just sat. Hour after
    hour
    This, our conversation, this is strictly
    confidential, right? I mean, Im not asking
    my medical insurance to pay. Im paying
    myself. And Id be sunk if anyone knew.
    Our conversation is confidential Mr.
    Cashman.
    Sorry. I know you have your profes-
    sional ethics but, well
    So, you were saying
    Im under a lot of pressure. Work.
    Family Life. Sometimes, I just
    dont know why. Why? You know, a year
    ago I resolved to spend more
    time with my six-year old son. Just hasnt
    happened. And then, whats
    the worst thing you can do to a child? This
    person you adore beyond
    all measure? Bring another two children
    into the world. And love them.
    And expect him to love them. Must be a
    catastrophe for him. Its like,
    its worse than being unfaithful to him
    My father, he used to sing
    this Jim Reeves song to me. As a lullaby.
    We just couldnt be close
    though we tried. We both reached for
    heavens but ours werent the
    same.
    Now I know what he meant. Lullaby?
    Felt like a tragedy when he
    sang it City Dad will continue next week.
    For previous episodes, see cityam.com
    CITY DAD
    FIT IN
    THE CITY
    BY LAURA WILLIAMS
    FITNESS & DIET EXPERT
    Beat exercise
    boredom
    S
    O apparently two-thirds of us have now
    ditched our new health regimes. One of
    the main reasons? Bordeom. Heres my
    pick of the bunch for how best to mix it
    up for the rest of the year.
    For the daredevil: If the noveltys worn off
    your bog standard 10K race, think about
    training for Aprils Wolf Run. A 10K with a
    difference, this Warwickshire-based race on
    7 April involves not just running but climb-
    ing, wading, swimming and crawling too. You
    can either enter as a lone wolf, or if you
    fancy a team bonding challenge this spring,
    get your colleagues to sign on the dotted line
    and enter as a pack. www.thewolfrun.com
    For the Gaming Enthusiast: Last Friday
    saw the release of SoulCalibur V, the latest
    of Namcos Soul series of fighting games.
    Cutting edge gym chain Gymbox has joined
    forces with Soul Calibur and designed the
    Soulcalibur V Swordsman Workout. Ive
    seen this workout and it definitely beats gym
    boredom. Its a fab, high octane way to get
    your cardio quota at the same time as some
    fabulous work for the upper body. For sure,
    launching a sword at high speed without, a)
    making contact with anything or anyone,
    and b) without dropping it, puts Pilates in
    the shade for a phenomenal core workout.
    Running throughout Feb at Gymbox:
    www.gymbox.com
    For the Family Man: Thought you needed to
    run a marathon to keep the cardiologist
    happy? Not so, according to the University of
    Copenhagen 5-a-side is your secret
    weapon to a healthy heart. According to a
    series of studies, football is better for your
    health than pumping iron and running. When
    two groups of men with high blood pressure
    were divided into two exercise groups, foot-
    ball and running, the footballers saw their
    blood pressure fall by an average of twice of
    those in the running group. Not sure where
    to start? Lucozade Powerleague has just
    launched its Fit For Fives campaign, a new
    incentive supported by Spurs midfielder
    Scott Parker. Go to www.powerleague.co.uk
    to find your nearest football site.
    @laurafitness; www.laurawilliamsonline.com
    Give your face a winters
    break with a super-facial
    the recipe, but oats and orange are
    clearly involved and she jokes its
    her breakfast leftovers. Now comes
    the crux of the treatment: the facial
    massage that beats all bloat, infelici-
    ties, and stagnation out of your face.
    This is Su-Mans signature pummel-
    ing, the face muscle workout that
    she claims keeps you looking young:
    she presses, chops, kneads and
    smoothes rapidly, paying attention
    to everything from your eye sockets
    to your temples. Then its either an
    in-depth foot or arm massage
    (depending on what she thinks you
    need), a facial coating in home-
    made moisturizer and off you go,
    enviably smooth-skinned, if a bit red
    in the face. 200 for 60 mins. To book:
    020 7758 1071 or go to
    www.wlondon.co.uk/away-spa.
    SKIN GYM AT TRIYOGA
    Available at the new Chelsea centre
    and in Primrose Hill, this facial is
    pure bliss. Uninterrupted by the
    pain of extraction, this is a combina-
    tion of strong facial and back mas-
    sage and rich, fruity and spicy
    all-natural creams from Hungarian
    skincare brand Eminence. Like Su-
    Mans facial, Charlotte Colwells is
    all about giving the face a workout:
    pumping blood to the face and
    working the muscles, along with
    opening up energy channels. Hot
    stones clinch the pleasure of this
    soothing but active facial, and a
    paprika mask, which burns rather
    intensely, really wakes skin up.
    Nettle, cinnamon and Hungarian
    berry creams also give the senses a
    delicious jolt. I left feeling deeply
    relaxed and energized warm and
    strong rather than freezing. Oh, and
    my skin glowed happily.
    70 for 60 minutes, triyoga.co.uk or call
    020 7483 3344
    LOSING YOUR HAIR?
    IT CAN BE RESTORED!
    THE WIMPOLE CLINIC
    Ha nna h Hous e , 1 1 - 1 6 Ma nc he s t e r S t r e e t , L ond on W1 U 4 DJ
    At The Wimpole Clinic, one
    of the leading hair transplant
    centres in Europe, Dr. Michael
    May F.R.C. S. has pioneered
    a permanent solution to
    male pattern baldness using
    advanced follicular unit
    hair transplant techniques.
    For your FREE consultation
    with Dr May call today on:
    020 7935 1861
    www. wi mpol ec l i ni c. c om
    A winter like the
    one were having
    really zaps your
    face. Get thee to
    a facial spa.
    Picture: Getty
    LET OUR GUIDE
    HELP YOU PLAY
    CUPID ON 14 FEB
    SEE PAGE 29
    V
    alentines day can be a minefield
    for the unprepared. Come home
    on the day with a bunch of super-
    market flowers and a box of
    Quality Street and you may as well bed
    in at the office and prepare for that big
    meeting the next day.
    The discerning partner expects far
    more. Thankfully, we have done your
    homework for you with this compre-
    hensive luxury gift guide. Whether your
    lucky Valentine is looking forwards to tra-
    ditional flowers and chocolates or a
    unique piece of signature jewelery, we
    have the solution.
    So, when the day comes next week, you
    can concentrate on making sure the night
    goes without a hitch, safe in the knowl-
    edge your gift-buying prowess will have
    been well and truly noted.
    29
    PRESTAT HEART
    ASSORTMENT
    15.67, prestat.co.uk
    Quality confectionary
    that wont break the
    bank from chocolatier
    Prestat.
    WILLIAM CURLEY COUTURE
    CHOCOLATE BOX
    96, williamcurley.co.uk
    For the discerning Valentine who knows
    a quality chocolate from a pretender,
    this luxury box of hand-made chocs is
    perfect.
    BREAKFAST IN BED
    HAMPER FROM MOUNT
    STREET DELI
    45, 020 7499 6843,
    mountstreetdeli.com
    Get the morning off to a
    great start with bellinis
    and the finest spreads.
    BILLECART SALMON
    GIFT BOX SET: HALF
    BOTTLE AND TWO
    GLASSES
    52, Harvey Nichols
    The connoisseurs
    favourite fizz.
    LIMITED EDITION
    ARMAND DE BRIGNAC
    CHAMPAGNE TRUFFLES
    Available until 18 Feb.
    400, the-chocolate.com.
    The ultimate luxe
    Valentine, these choco-
    lates come with a bottle
    of the super elite fizz.
    HOTEL CHOCOLATE
    SEAL WITH A KISS
    45, hotelchocolat.co.uk
    An exquisitely colourful box of
    the finest Valentines delights,
    this is sure to be a hit with the
    ladies.
    Sweeten your
    Valentines Day
    with our gift guide
    Lifestyle | Valentines Day Special
    CORNISH YARG
    HEART
    25.95 for a 750g
    heart (bigger hearts
    are available),
    Lynher Dairies,
    Cheese, www.lynher-
    dairies.co.uk
    Cheese-fans and
    there are many
    will melt. Honestly.
    LIBERTY WILD AT HEART FLOWERS
    125, liberty.co.uk
    These beautifully arranged blooms from the
    shelves of alternative-chic department store
    Liberty will bring a smile to anyones face this
    Valentines day.
    POILANE HEART
    BISCUITS
    2.65 per 100g.
    www.poilane.fr
    Heart-shaped but-
    ter biscuits from
    the French baker: a
    perfect alternative
    to chocolate for
    those with a sweet
    tooth.
    Valentines Day Special | To Wear
    30 CITYA.M. 7 FEBRUARY 2012
    LYS MEDITERRANEE BY
    EDOUARD FLECHER
    90, lessenteurs.com
    Heavenly scent of lilies pres-
    ents an intensely romantic
    bouquet. Orange flower,
    water-lily and musk make this
    a sensual icon.
    AL JANA BY SO OUD
    128, Avery Fine Perfumery
    020 7692 1892
    An immersion into green nat-
    uralness: a translucent fra-
    grance at whose heart is
    ylang ylang, cypress and san-
    dalwood.
    RED ROSES BY JO MALONE
    72, jomalone.co.uk
    It doesnt get more romantic
    than this: a blast of naked
    rose from every womans
    favourite luxury fragrance
    brand. To go all out, buy the
    scented candle to go with.
    ROMANTINA BY JULIETTE
    HAS A GUN
    59 from Selfridges
    A glorious combination of
    orange blossom and jasmine
    with a dash rose and
    tuberose plus a warm bottom
    of patchouli.
    NINA FANTASY BY NINA RICCI
    36.50, Superdrug and Debenhams
    Special edition Ricci scent with
    juicy aromas of bergamot, man-
    darin and pear with delicate cherry
    blossom, underpinned by romantic
    nuances of rose.
    VIRGIN ISLAND WATER BY
    CREED
    82 at Harvey Nichols
    Intoxicating summer scents
    of coconut, lime and hibiscus
    evoking the scent of warm,
    sun-kissed skin in the
    Caribbeans.
    BLACK TIGER PRINT STAY-
    UPS BY WOLFORD
    37 at Liberty London,
    www.liberty.co.uk
    These intensely cool, super-
    sexy stockings can be worn at
    work or at home, so theyre
    also a practical gift.
    TAUER L'AIR DESERT DU
    MORROCAN
    87, lessenteurs.com
    A soft, dusky harmony of rock
    rose, coriander and cumin
    with a hint of bitter orange
    and Moroccan jasmine.
    Memories of Marrakesh.
    DAENA BRA, SUSPENDER
    AND BRIEF BY AGENT
    PROVOCATEUR
    Bra, 110; suspender 95;
    brief, 65,
    agentprovocateur.com
    We think these are, quite sim-
    ply, super pretty.
    SO PRETTY IT HURTS CON-
    TOUR BRA BY ELLE
    MCPHERSON
    45, houseoffraser.co.uk
    Elle knows a thing or two
    about looking hot. This range is
    an easy way to spice things up.
    BLUE SILK CHIFFON SET
    'DIMANCHE MATIN'
    BABYLOO BY FIFI CHACHNIL
    156, www.fifichachnil.com
    If this isnt a cute little play-
    suit, we dont know what is.
    Get ready to romp.
    ZAIMA AND OLEYA
    205 for bra, 125 for brief,
    eresparis.com
    Wonderfully delicate, luxuri-
    ous pair from one of Europes
    chicest brands. This, evidently,
    is how the ladies get dressed
    in Paris.
    'POUPEE (DOLLY) BY FIFI
    CHACHNIL
    Bra, 120; brief with zip
    detail, 90
    fifichachnil.com
    Playful, well-made set thats
    sure to bring a big smile to
    both of your evenings.
    CANDACE BRA, SUSPENDER
    AND BRIEF BY AGENT
    PROVOCATEUR
    Bra, 110; suspender 85;
    brief, 75,
    agentprovocateur.com
    Pink and black lace suspender
    set. Need we say more?
    Thought not.
    LA PERLA LACE AND MESH
    BODYSUIT
    299, netaporter.com
    Darkly romantic, this deli-
    cate yet strong piece looks
    incredible on most shapes.
    Well, the curvier the better,
    really.
    BALAAT AND EDJO BY ERES
    245 for bra, 140 for brief,
    eresparis.com
    Another intriguingly elegant
    design by Eres Paris. This bra
    and underwear set are girly
    but in an enigmatic, almost
    industrial-chic way.
    31 CITYA.M. 7 FEBRUARY 2012
    To wear | Valentines Day Special
    RUNNING FOX NECKLACE BY
    WILD THING FOR ETSY
    $35, etsy.com
    Items sell out fast from this
    Tel Aviv-based designer, so if
    this ones not in stock, there
    are plenty of other cool
    pieces on the Etsy site.
    SUNBURST NECKLACE BY
    COACH
    135, Coach New Bond Street
    0203 141 8901
    Coachs New Bond Street
    store heralds the brands
    arrival on these shores. This is
    a great piece.
    BRACCIALE INTRECCIO BY
    FERRAGAMO JEWELS
    ferragamojewels.com
    Ferragamo has launched this
    range just for Valentines Day.
    Its exclusive, sexy and very
    cool: the only way to wear a
    silver heart, surely.
    LOVE HEART RING BY
    WILLIAM & SON
    3,920, williamandson.com
    An 18ct rose gold, 1.26ct pink
    sapphire & 0.55ct diamond
    ring that shows in no uncertain
    terms what kind of romantic
    stuff youre made of.
    ETERNITY RING BY ERNEST
    JONES
    125, ernestjones.co.uk
    This 9ct white gold cubic zir-
    conia cross over eternity ring
    is a great way to show your
    feelings affordably,
    LUNA RING BY MONICA
    VINADER
    80, monicavinader.com
    Vinader jewelry is both fresh
    and unique and fits virtually
    every taste. This is a cute,
    very safe bet.
    ARTY OVAL RING BY YVES
    ST LAURENT
    165, matchesfashion.com
    YSLs range of cocktail rings
    are an ongoing hit, favoured
    by most women with heaps
    of style. A hip homage to V-
    Day.
    TWIN GOLD AND LEATHER
    BRACELET BY BALENCIAGA
    275, matchesfashion.co.uk
    A blistering shock of chunky
    black and gold, from every
    fashionastas favourite brand.
    An awesome gift.
    DODO DIAMOND
    HEARTS RING
    EARRINGS AND
    RING
    Ring, 990 and ear-
    rings, 950
    Hailed as Italys
    best-kept secret,
    Dodo jewels are
    sought by the likes of
    the Queen of the
    Netherlands.
    Valentines Day | Going Out
    32 CITYA.M. 7 FEBRUARY 2012
    AWANA, 85 SLOANE AVENUE
    Malaysian fine-dining restaurant
    Awana is offering a three course
    set menu taking diners on a jour-
    ney through culinary Malaysia.
    60 per person. For an additional 35
    guests can order a bottle of Moutard
    Rose. Available from 11-19 Feb.
    awana.co.uk
    Chocolates and
    champagne are
    one thing but
    memories will last
    longer. We pick out
    some places at
    home and a bit
    further away
    where you can
    while away a
    romantic evening
    to remember
    BRASSERIE JOEL, PARK PLAZA
    The French bistro restaurant located
    in the Park Plaza Westminster
    Bridge London hotel will be serving
    a Valentines Day sharing menu. They
    are also teaming up with Park Plaza
    hotel to offer overnight packages.
    99 for two, overnight package including
    champagne start at 109. Available from
    10-19 Feb. brasseriejoel.co.uk
    CINNAMON CLUB,
    30-32 GREAT SMITH
    STREET
    Indulge in a five-
    course Valentines Day
    supper with an
    emphasis on sharing.
    75 per person
    cinnamonclub.com
    LAUNCESTON PLACE,
    1A LAUNCESTON PLACE
    A special, seasonal five
    course menu. Ladies will
    receive a Valentines rose
    and a box of custom
    made Launceston Place
    chocolates.
    75 per person. launceston-
    place-restaurant.co.uk
    BISHOPSTROW HOUSE, WARMINSTER
    Treat your loved one this Valentines with
    a special stay at Bishopstrow House,
    relax and unwind in the halcyon spa or
    catch up on some quality time over a
    glass of bubbly in front of an open fire
    From 265 per room per night
    www.bishopstrow.co.uk
    DINNER AND DANCE AT
    THE RITZ, 150 PICCADILLY
    The Romance and Dance
    programme includes accom-
    modation in a Louis XVI
    inspired superior room,
    flowers, fresh fruit, a bottle
    of Champagne and an
    evening of a dinner and
    dancing hosted by the Ritz,
    including a four course
    meal.
    From 455 per room per night.
    Available from 10-18 Feb
    FAIRMONT ST ANDREWS
    RECIPE FOR ROMANCE
    PACKAGE
    Enjoy a five star romantic
    break complete with flicker-
    ing candles, sensuous choco-
    late and chilled champagne.
    The famous hotel has every-
    thing to create the perfect
    weekend.
    From 239 per room per night.
    www.fairmont.com/standrews
    T
    E
    R
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    15
    Fill the grid so that each block
    adds up to the total in the box
    above or to the left of it.
    You can only use the digits 1-9
    and you must not use the
    same digit twice in a block.
    The same digit may occur
    more than once in a row or
    column, but it must be in a
    separate block.
    COFFEE BREAK
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    KAKURO
    QUICK CROSSWORD
    LAST ISSUES
    SOLUTIONS
    KAKURO
    WORDWHEEL
    Using only the letters in the Wordwheel, you have
    ten minutes to nd as many words as possible,
    none of which may be plurals, foreign words or
    proper nouns. Each word must be of three letters
    or more, all must contain the central letter and
    letters can only be used once in every word. There
    is at least one nine-letter word in the wheel.
    SUDOKU
    Place the numbers from 1 to 9 in each empty cell so that each
    row, each column and each 3x3 block contains all the numbers
    from 1 to 9 to solve this tricky Sudoku puzzle.
    SUDOKU
    QUICK CROSSWORD
    ACROSS
    1 Remain cheerful
    in the face of
    adversity (4,2)
    6 Impart knowledge
    to (6)
    7 Drag the bottom
    of a lake (6)
    9 Umpire (7)
    10 Norwegian composer
    (1843-1907) (5)
    12 Verbal defamation (7)
    17 Give a speech (5)
    18 Hearing distance (7)
    20 Instruction to
    go away (4,2)
    21 Country which
    borders Belize,
    Guatemala and
    the USA (6)
    22 Work a way
    into someones
    afections (6)
    DOWN
    1 Hispanic shop selling
    wine and groceries (6)
    2 Joan Collins rle
    in Dynasty, ___
    Carrington (6)
    3 Jetty (4)
    4 Member of a
    police force (7)
    5 Groom with
    elaborate care (5)
    8 Lady whose real
    name is Stefani
    Joanne Angelina
    Germanotta (4)
    11 Stretchy fabric (7)
    13 Show excessive
    afection (4)
    14 Babys plaything (6)
    15 Alloy of tin and lead (6)
    16 Smooth surface (as of
    a cut gemstone) (5)
    19 Double-reed woodwind
    instrument (4)
    E
    L
    E
    I
    P N
    M
    M
    T
    4

    4




    4
    4
    S P I C E U S U R P
    K A H M A
    E N A B L E E A R N
    W L A I L E
    E R O S R T W O
    R F E A T H E R A
    E T C L R A I L
    D R U E C L
    E A S E S U C K L E
    B T S O G
    T I M E S L Y C E E
    2 3 1 2 3 1 4
    4 7 2 1 6 5 3 8 9
    7 9 2 8 9 7
    9 8 4 9 6 5 9
    3 9 7 6 2 8
    3 7 1 2 2 5 1 3
    9 8 2 5 8 9
    7 9 8 7 8 5 9
    2 4 5 1 1 7
    1 2 4 7 9 3 5 6 8
    7 9 6 8 1 2 6
    4
    4
    4
    4
    4
    4
    4
    4
    4
    WORDWHEEL
    The nine-letter word was
    ECONOMIST
    Lifestyle | TV&Games
    33 CITYA.M. 7 FEBRUARY 2012
    Sport
    34
    THREE-TIME Tour de France runner-
    up Andy Schleck looks set to be hand-
    ed the 2010 title retrospectively after
    multiple winner Alberto Contador
    was yesterday banned for doping.
    Contador, also Tour winner in 2007
    and 2009, was stripped of all results
    dating back to the 2010 race and
    banned until August this year after
    losing an 18-month legal battle.
    The Court of Arbitration for Sport
    said there was insufficient evidence
    on a balance of probabilities to sup-
    port the Spaniards claim that he
    unwittingly ingested the stimulant
    clenbuterol in contaminated meat.
    Contador gets doping ban
    CYCLING

    WHITEWASHED and humiliated they


    might have been following yesterdays
    71-run defeat to Pakistan in Dubai,
    but England skipper Andrew Strauss
    has ruled out making wholesale
    changes to the side ahead of next
    months daunting tour of Sri Lanka.
    Set 324 to win, England started the
    fourth day on 36-0 but hopes of a suc-
    cessful run chase were scuppered by
    Saeed Ajmal, who took 4-67 and
    ended the series with 24 wickets, and
    seamer Umar Gul who returned fig-
    ures of 4-61 as the tourists were dis-
    missed for 252.
    Alastair Cook (49) and Matt Prior
    (49 not out) both offered token resist-
    ance but with Englands confidence-
    sapped middle order again failing to
    contribute, their efforts were in vain
    as Pakistan recorded a 3-0 win and
    their first ever Test series clean sweep
    against England.
    Kevin Pietersen (right),
    Eoin Morgan and Ian Bell
    ended the series having
    mustered fewer than 200
    runs between them and
    on the entire tour, those
    three players failed to pass
    40 in 29 innings.
    Despite those worrying
    figures Strauss indicated
    he was likely to keep
    faith with a trio that
    have consistently strug-
    gled against spin
    bowling in condi-
    tions that are likely
    to be replicated in
    Sri Lanka.
    Its going to take a
    little time for this to all
    sink in, but we havent
    been in the business of
    panic changes and chopping and
    changing the side too much and I
    dont think well start now, said
    Strauss, who himself has now gone 21
    innings without a Test century. But
    there was a consistent failure on our
    part and we must learn the les-
    sons.
    Head coach Andy Flower
    was less forthcoming in
    his support for Englands
    struggling batsmen and
    admitted he would make
    changes to the one-day
    squad, announced today,
    ahead of the upcoming
    series against Pakistan,
    with the likes of
    Somersets Jos Buttler and
    Yorkshires Jonny Bairstow
    expected to be handed the
    chance to stake their
    claims for future Test
    recognition.
    BY JAMES GOLDMAN
    CRICKET

    Strauss: No need for change


    despite being whitewashed
    Results
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    email sport@cityam.com
    SPORT | IN BRIEF
    Dickson has chance to face Italy
    RUGBY UNION: England are hopeful
    scrum-half Lee Dickson will have recov-
    ered from a broken a bone in his left
    hand in time to face Italy on Saturday.
    Dickson suffered the injury in last week-
    ends Six Nations win over Scotland and
    was in line to be replaced by his brother
    Karl, who played his first match for
    Harlequins since November on Sunday.
    Frimpong out for the season
    FOOTBALL: Wolves midfielder Emmanuel
    Frimpong, on loan from Arsenal, has been
    ruled out for the rest of the season with
    an anterior cruciate ligament injury.
    Redknapp waits
    on verdict as tax
    evasion trial nears
    conclusion at last
    TOTTENHAM boss and England man-
    ager elect Harry Redknapp could dis-
    cover whether he has been found
    guilty of alleged tax evasion as early as
    today.
    Jurors will be sent to deliberate on
    their verdict after the judge delivers
    his final summing up at Southwark
    Crown Court this morning, following
    more than two weeks of hearings.
    Redknapp and co-accused Milan
    Mandaric, the former Portsmouth
    chairman, deny cheating the taxman in
    relation to payments totalling
    189,400 made to Redknapps
    Monaco account.
    The court heard yesterday that the
    prosecutions case against Redknapp
    was illogical.
    Redknapps barrister John Kelsey-
    Fry QC said in his closing argument
    that the 64-year-olds volunteering of
    information about his offshore account
    showed he was not attempting to
    dodge tax.
    Mandaric and Redknapp argue that
    the two disputed payments were
    effectively loans with which the man-
    ager, then at Portsmouth, was to
    invest for his own gain. The prosecu-
    tion claims the sums were bonus pay-
    ments due to Redknapp for the sale of
    striker Peter Crouch made in secret to
    avoid income tax and National
    Insurance contributions.
    Mandarics counsel Lord MacDonald
    QC said there was nothing even
    slightly sinister about the payments.
    In Milan Mandarics mind this was
    not money for Crouch; this was Milan
    Mandaric coming through on money
    he had promised months before for a
    portfolio, MacDonald added.
    The trial continues.
    Parker: We
    want our
    Harry back
    TOTTENHAM midfielder Scott
    Parker admits the absence of man-
    ager Harry Redknapp is damaging
    his sides push for the Premier
    League title.
    Redknapp was unable to be with
    his team at Anfield last night after
    spending the day at Southwark
    Crown Court, where over the course
    of the last fortnight he has been con-
    testing two charges of cheating the
    public revenue.
    Technical issues with a plane that
    was due to fly Redknapp up to
    Liverpool forced the Spurs boss to
    watch the match on TV.
    Without him, the visitors relied
    on a monumental performance
    from Parker to ensure they left
    Anfield with a point that just about
    keeps them in contact with leaders
    Manchester City.
    Harry gives that extra bit of ener-
    gy. Weve missed him the past cou-
    ple of weeks, said Parker, whose
    side remain in third place in the
    Premier League table, seven points
    behind City.
    Well be absolutely delighted
    when he comes back. It was a tough
    night.
    Parker was at the heart of
    Tottenhams rearguard effort and
    put his body on the line on more
    than one occasion, most notably
    when Luis Suarez, returning from
    his lengthy suspension, connected
    with the England midfielders
    midriff with his right boot.
    After soaking up so much pres-
    sure, Spurs missed the best chance
    of the night with four minutes
    remaining when Gareth Bale broke
    the offside trap but shot weakly at
    Pepe Reina.
    BY JAMES GOLDMAN
    FOOTBALL

    0
    0
    LIVERPOOL
    TOTTENHAM
    BY FRANK DALLERES
    FOOTBALL

    Man City 24 18 3 3 63 19 57
    Man United 24 17 4 3 59 24 55
    Tottenham 24 15 5 4 44 25 50
    Chelsea 24 12 7 5 44 29 43
    Newcastle 24 12 6 6 36 31 42
    Arsenal 24 12 4 8 46 34 40
    Liverpool 24 10 9 5 28 21 39
    TOP SEVEN
    TEAM PLD W D L F A PTS
    Parkers Spurs
    are seven points
    behind Man City
    Picture: REUTERS
    35
    ENGLAND manager Fabio Capello has
    been accused of undermining the
    future captain of the national side
    before he has even begun the task of
    determining a suitable replacement
    for John Terry.
    Capello is set for crisis talks with
    the Football Association later this
    week after he publically criticised the
    governing bodys decision to relieve
    Terry of the captaincy an outburst
    which threatens to bring about a pre-
    mature end to his four-year tenure.
    The FA are understood to be exam-
    ining if Capellos outburst means he is
    in breach of contract, but should he
    avoid the sack the Italian must
    embark on the process of selecting
    the fourth permanent captain of his
    reign.
    But former England manager
    Graham Taylor believes whoever is
    chosen cannot possibly feel comfort-
    able in the role knowing Terry
    remains Capellos preference.
    Whoever he makes as captain
    knows that he is not the managers
    choice, said Taylor. That in itself
    doesnt help the dressing room. I cant
    see what Capellos agenda is. All it
    does is disturb everything even more.
    To come out in this public fashion
    actually, in one respect, gives England
    an even bigger problem for the selec-
    tion and harmony of the squad for the
    European Championships.
    Capello reacted angrily after the FA
    informed him of their decision to sack
    Terry following last weeks announce-
    ment that the Chelsea skippers crim-
    inal trial, which sees him accused of
    racially abusing QPRs Anton
    Ferdinand a charge which he denies
    has been adjourned until July, cru-
    cially after the European
    Championships.
    The 65-year-old gave an indication
    he was intent on remaining as
    England manager by attending last
    nights Premier League match
    between Liverpool and Spurs.
    Capello warned as FA
    mull Italians future
    BY JAMES GOLDMAN
    FOOTBALL

    ALL-CONQUERING Novak Djokovic


    was named Laureus World
    Sportsperson of the Year last night in
    London and then vowed to lift more
    silverware when he returns to the cap-
    ital later this year.
    The tennis world No1, who won his
    fourth grand slam from five attempts
    at last months Australian Open, is
    desperate to defend his Wimbledon
    title and win Olympic gold.
    Both of those events are extremely
    important. They are at the top of my
    list next to Roland Garros and the US
    Open. I will prioritise the Majors and
    the Olympic Games, he said.
    Djokovic beat an illustrious band of
    nominees, including sprint star Usain
    Bolt and Formula One king Sebastian
    Vettel to the prestigious award at
    Central Hall in Westminster.
    Kenyan distance runner Vivian
    Cheruiyot was named Laureus World
    Sportswoman of the Year, while Lionel
    Messis Barcelona beat Englands
    cricketers to the Team award.
    Northern Irish golf saw dual suc-
    cess, with Rory McIlroy winning the
    Breakthrough prize and Darren
    Clarke the Comeback gong.
    THE CAPITALIST: PAGE 10-11
    Nov 11: Capello
    picks Terry despite
    FA and police probes
    into allegations he
    aimed racial abuse
    at Anton Ferdinand
    1 Feb: Terry trial is
    adjourned until July,
    raising likelihood of
    him leading England
    into this summers
    Euro 2012 finals
    3 Feb: FA chiefs
    strip Terry of the
    captaincy, insisting
    it is not judgment of
    guilt and that he is
    still free to play
    5 Feb: Capello
    reveals he is at odds
    with FA over Terry,
    saying he absolutely
    disagrees with cap-
    taincy removal
    6 Feb: Former FA
    chief David Davies
    says Capellos public
    criticism of his pay-
    masters could be
    breach of contract
    T
    I
    M
    E
    L
    I
    N
    E
    BY FRANK DALLERES
    SPORT

    Djokovic eyes capital gains


    World No1 Djokovic
    was named Laureus
    World Sportsperson
    of the Year
    Picture: GETTY
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