Cityam 2012-12-18

BUSINESS WITH PERSONALITY
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EC3 is the postcode of
choice for insurers
BUSINESS WITH PERSONALITY
CITY SKYSCRAPERS AND OFFICE BUILDINGS
The Leadenhall Building
or "the Cheesegrater"
20 Fenchurch Street
or "the Walkie-Talkie"
Developers: Oxford Properties and British Land
51 per cent let
Tenants: Aon and Amlin
Total square feet: 610,000
Completion: Mid 2014
Cannon Place
Developer: Hines
No space let
Total sq ft: 389,000
Completed: October 2011
The Shard
Developer: Sellar Property Group
No ofce space pre-let,
30 per cent pre-let
to restaurants and
Shangri-La Hotel but
no ofce lettings.
Total square feet: 900, 000
Completed: July 2012
The Walbrook Building
Developer: Minerva
No space let
Total square feet:
383,000
Completed:
February
2010
Developers: Canary Wharf Group and
Land Securities
23 per cent pre-let + 11 per cent in
solicitors' hands
Tenants: Ascot Underwriting, Markel
and Kiln
Completion: April 2014
The St Botolph Building
Developer: Minerva (nowowned by
Delancey and AREA property partners)
100 per cent let to Jardine Lloyd Thompson who
signed biggest letting of 2012, taking
287,000 sq ft and Lockton
International, Clyde & Co.
Completed in 2010
1
g
Minerva
feet:
BRITISH Land and Oxford Properties
have bagged their second tenant at
the Cheesegrater skyscraper in the
City, underlining the booming
demand in Londons insurance dis-
trict in stark contrast to parts of the
City that have traditionally depended
on the banking sector.
Amlin is to take 111,000 square feet
at the Leadenhall Building for an
undisclosed rent, which means the
224-metre tower will be at least 51 per
cent full when it opens in 2014, the
firms said yesterday.
The deal comes after Aon
announced last year it is to take up a
third of the building.
The lacklustre City lettings market
has been buoyed so far this year by a
wave of insurers looking for new
offices in the EC3 postcode, which is
popular with the sector because of its
proximity to the Lloyds of London
building.
Last month Land Securities and
Canary Wharf Group let 30,000 sq ft
in the nearby Walkie-Talkie sky-
scraper to Lloyds syndicate Ascot
Underwriting. It has also signed pre-
let deals with insurers Markel, Kiln
and RSA.
Minerva owned by Delancey and
AREA Property Partners also
announced last month that insurer
Jardine Lloyd Thompson is to move its
headquarters to the St Botolph
Building in the City, sealing Londons
largest letting deal
this year.
The activity in the
insurance sector
compares with a
near-frozen market for lettings in the
bank and financial services sector, as
companies shelve plans to move
office due to
job cuts in the sector and continuing
economic uncertainty.
Recent office developments such as
Hines Cannon Place and Minervas
Walbrook Building, which sit in the
EC4 and EC2 postcodes traditionally
dominated by the financial service
sector firms, have stood empty for
more than a year.
They are both excellent office
buildings but perhaps the percep-
tion is that they are sitting in a mar-
ket which is dominated by the finan-
cial sector and there is less demand in
that area, Matthew Elliott, partner
and head of City agency at Drivers
Jonas Deloitte, told City A.M.
Their natural tenant base has been
sitting on their hands. As and when
that part of the market decides to let
space those buildings will let well.
Recent figures by Drivers Jonas
Deloitte show that a total of 4.1m sq
ft of space is under construction in
the City, a 15 per cent increase on six
months ago and the first time that
construction in the City has risen
above the four million sq ft mark
since the first quarter of 2009.
But despite signs of a pick-up in con-
struction, developers delaying
schemes in 2009 and 2010 means that
overall building completions in the
City remained low.
Developers such as Brookfield,
which owns 100 Bishopsgate in a joint
venture with Great Portland Estates,
have delayed getting shovels out until
signing a pre-let deal with a prospec-
tive deal.
Property specialists CBRE said the
timing of when companies are look-
ing to move also has a part to play in
the contrast in lettings activity in the
two parts of the Square Mile.
Most of the transactions we have
seen have been for the available space
in EC3, which completes in 2014,
whereas there is little available in EC2
that is under construction for the
future, CBRE said.
The firm offers some hope for the
sector in the future: Looking further
ahead, we expect that the upcoming
peak in lease breaks and expiries will
fuel activity, particularly in the busi-
ness services and banking & finance
sectors in spite of some mixed eco-
nomic news.
www.cityam.com FREE
MEET THE MAN BEHIND THE CITYS NEW LUXURY HOTEL
BY KASMIRA JEFFORD
A TALE OF TWO CITIES
SOUTH PLACE STYLE
ISSUE 1,784 TUESDAY 18 DECEMBER 2012
ENGLAND WIN
INDIA SERIES
See Sport Page 28
See Page 17
Certified Distribution
29/10/12 till 25/11/12 is 129,356
The Cheesegrater bags its second tenant but the banking district remains in low demand
Queen joins
theCabinet...
for one day
BY MARION DAKERS
THE COALITION Cabinet will be on
its best behaviour today as it keeps
a royal appointment.
The Prime Minister has invited
the Queen to sit in on this
mornings Cabinet meeting as an
observer, becoming the first
reigning monarch to do so since
Queen Victoria.
Ministers will present Her
Majesty with a gift to mark the
Diamond Jubilee.
Ministers will be excited but
minding their Ps and Qs even
more than normal, energy
secretary Ed Davey said.
The Queen will be present for
half an hour of the weekly
meeting. The trip to Downing
Street comes just days after the
head of state visited the Bank of
England, when she
grilled an economist
on lax rules that he
said led to the
financial crisis.
The monarch
holds the right to
consult,
encourage
and warn
politicians.
A royal
appointment
at Number
10
FTSE 100 n5,912.15 -9.61 DOW L13,235.39 +100.38 NASDAQL3,010.60 +39.27 /$ 1.62 unc / 1.23 unc /$ 1.32 unc
EC3
EC3
EC3
Allister Heath is away

david.hellier@cityam.com
Banks challengers weigh
in over Haldane warnings
BOSSES of start-ups aiming to chal-
lenge the banking industry yester-
day sided with senior Bank of
England director Andrew Haldane,
following his comments that inno-
vative new finance firms are a chal-
lenge to major banks dominance.
Giles Andrews, the founder of
peer-to-peer (p2p) lending service
Zopa, told City A.M. that there is
pretty strong evidence that we are
becoming a major threat, and that
our biggest competitors, the banks,
are in a weak position.
His comments follow a prediction
from Haldane that the mono-bank-
ing culture we have had since the
1990s is on its way out, and that
the rise of p2p lenders such as Zopa
could hit banks.
Instead, we are seeing a much
more diverse eco-system emerging
with the growth of new non-bank
groups offering peer-to peer lending
and crowd-funding which are oper-
ating directly with a wider public,
Haldane told the Independent.
Zopa, which has lent more than
250m since its 2005 launch and
has investors including Lord Jacob
Rothschild, now accounts for
around one per cent of the UKs
unsecured personal lending.
Andrews said the blow to banks
reputations following incidents like
G4S set to win child benefit role
G4S, the company at the centre of the
Olympics security fiasco, is set to win a
role in implementing the governments
contentious and complex changes to child
benefit and the universal credit. The FTSE
100 group is among six companies
selected to run call centres that will deal
with queries on the most far reaching
change to welfare benefits for the low-
paid and unemployed for decades. The
contracts to be announced in February
are worth a total of 150m over four
years.
Dozens implicated in UBS Libor deal
About three dozen bankers and senior
managers will be implicated in the
alleged rigging of Libor interest rates
when UBS settles with global regulators
later this week, according to people
familiar with the matter.
Tesco edges closer to naming UK boss
Tesco is moving closer to appointing a UK
chief executive, with Chris Bush, chief
operating officer, emerging as the front-
runner for the role. An announcement could
be made within the next few months, said
people familiar with the situation.
O2 hangs up on Vodafone for BT
O2 is set to sign a new long-term deal to
buy network capacity from BT in the new
year. BT beat off competition from
Vodafone, after the mobile company paid
1bn for Cable & Wireless worldwide
earlier in the year.
Vince Cable plans copyright tour bus
The governments action plan to combat
file-sharing has taken a strange twist with
plans to send a tour bus to fun fairs to
teach youngsters about copyright.
Mark Carney cleared on rules breach
Mark Carney, the future governor of the
Bank of England, has been accused of
breaching rules of political impartiality at
the Bank of Canada. The governor of the
Bank of Canada was referred to his
internal general counsel after details
emerged of a family holiday at the home
of Liberal MP, Scott Brison. The reports
had claimed Carney had discussed joining
the opposition party, but on Monday, Bank
of Canada spokesman Jeremy Harrison
said the general counsel had cleared him
of wrong-doing.
GE close to buying Avio for 3bn
General Electric is on the verge of
finalizing a deal to buy Italian aerospace
group Avio for as much as 3bn
(2.44bn), according to people familiar
with the negotiations.
Clearwire accepts $2bn Sprint offer
Sprint agreed to acquire the half of
Clearwire it doesnt already own, in a
deal worth $2.2bn (1.36bn), moving to
consolidate a longtime partner that is
key to the cellphone carriers strategy.
US STOCK markets climbed
upwards yesterday evening as
hopes for a fiscal cliff deal rose.
The Dow Jones Industrial
Average was up 100.38 at
13,235.39, a rise of 0.76 per cent,
while the S&P 500 was up 1.19 per
cent and Nasdaq rose 1.32 per
cent, after President Barack
Obama and congressional
Republican leader John Boehner
shared a 45-minute meeting.
Their goal in the meeting was
to hammer out a package of
policies to avoid some of the tax
hikes and spending cuts, known
together as the fiscal cliff, and
aides from both parties said they
thought a deal could be reached
in coming days.
Together worth around 4.9 per
cent of GDP, the automatic cuts
and tax rises are set to hit the
worlds biggest economy at the
beginning of 2013. Many
economists think that such a big
fiscal consolidation pill would
shock the US economy into
recession if taken all in one dose.
On Saturday evening Boehner
made a significant compromise
by offering to let taxes on
earnings above $1m (617,000)
return to their Clinton-era rates
while keeping all other tax cuts.
But Obama wants taxes to go up
on all earnings above $250,000.
US markets rise
on new hope of
fiscal cliff deal
Andrew Haldane, executive director for financial stability at the Bank of England
2
NEWS
BY BEN SOUTHWOOD
HMRC cost its customers 136m by
keeping them dangling on the
phone, a damning National Audit
Office (NAO) report reveals today.
NAO criticised the tax office for
giving customers poor value. It
found those who got through to
HMRC in 2011-12 had to wait on
average 282 seconds to speak to an
adviser.
Between April and September
2011, 6.5m customers waited more
than ten minutes to have their call
answered. NAO said that equates
to 33m in call charges and gave a
value of 103m for wasted time.
HMRC slammed
for call handling
BY JENNY FORSYTH
LONDON Underground workers
have voted in favour of festive
strike action after peace talks
over bank holiday pay collapsed,
the Aslef union said yesterday.
Tube drivers will walk out on
26 December, 18 January and 25
January after a ballot for a strike
achieved 90 per cent support
from members.
The Boxing Day action could
cause havoc for supporters of
Londons Arsenal and West Ham
football clubs, who are due to
play at the Gunners Emirates
stadium on that day.
Tube strike set
for Boxing Day
BY CITY A.M. REPORTER
BY JAMES TITCOMB
To contact the newsdesk email news@cityam.com
T
heres been anything but a
gradual winding down towards
the Christmas break for many
of those who ply their trade at
the London offices of Jefferies.
Whilst for many rivals Christmas is
truly coming early, with some execu-
tives already off for a touch of winter
sun, many of the Jefferies teams are
still much in action.
In the past few weeks Jefferies has
advised on a number of money-rais-
ing deals for property groups. In con-
junction with Dexion Capital it has
just advised on an IPO that raised
228m for Starwood European Real
Estate Finance.
In recent weeks the US bank also
raised 62m for Blue Capital Global
Reinsurance Fund and 207m in
November for Sherborne Investors,
Edward Bramsons Guernsey-based
equity vehicle.
Jefferies finishes 2012 on a high, but it is tough out there
TUESDAY 18 DECEMBER 2012
Yesterday afternoon mining analysts
were invited down to Jefferies head-
quarters alongside the River Thames
to discuss the next moves in First
Quantums hostile bid for rival cop-
per miner Inmet. First Quantum has
increased its bid to 3.2bn, an
amount that may still not be suffi-
cient to win the deal.
It might not be the biggest deal of
the year but it is another sign that
Jefferies is becoming a force in the
mining sector, working on this occa-
sion alongside Goldman Sachs and
RBC.
2012 has been a big year for Jefferies
in London, where it employs around
900 people. Earlier it acquired the
broking firm Hoare Govett from the
part-government owned bank RBS
and the following few months have
involved spending much time inte-
grating the two businesses.
Although one or two clients have
been lost in the move, many of the
others have stayed remarkably loyal;
those that do stay look like theyll be
sticking with a firm that might be
going places.
In a reminder, though, of how
tough conditions are in investment
banking, there was news yesterday
that one of the Mayfair-based finan-
cial boutiques, Fairfax, had gone into
administration.
Both at the large end, where Credit
All Fairfaxs employees have been
made redundant.
There is a wide array of advisers in
the small to mid-cap sector in the
City, fighting over the same kind of
deals, some of which are not always
terribly lucrative in the first place.
These include Panmure Gordon,
Investec, Canaccord, Seymour Pierce,
Daniel Stewart, Peel Hunt, Finncap,
Arden, Oriel Securities and Cenkos, to
name but a few.
According to one source, the
Financial Services Authority has put
five brokers on daily reporting watch,
where their finances are being looked
at regularly.
Something tells me the competi-
tion will only intensify in 2013. Lets
hope the deal flow improves too.
Suisse recently downgraded its
Moscow office, and at the smaller
end, investment banking is hurting,
with capacity in most parts of the
business still exceeding demand.
Fairfax was launched in 2006 by
Stefan Allesch-Taylor and by Rolly
Crawford, formerly of Collins Stewart.
It built up a decent enough name for
itself but always found it difficult to
make profits in an overcrowded mar-
ket-place.
Malcolm Cohen, BDO business
restructuring partner, said yesterday:
Unfortunately the company was
affected by a significant reduction in
revenues due to the on-going difficul-
ties with the economic climate. The
joint administrators have taken steps
to enable any remaining clients to
transfer their assets, stocks or funds
to other brokers following the closure
of the business.
the Payment Protection Insurance
scandal created a gap in the market.
Even if they werent doing things
that damaged their reputation,
theyve forgotten the consumer is at
the heart of their business. We could
easily have 10 per cent of that mar-
ket, Andrews said.
Nick Hungerford, the chief executive
of personal online investment manag-
er Nutmeg which has signed up
thousands of users since it launched
in October said that many parts of
big banks operations could be threat-
ened by more focused, nimbler firms.
Every segment of the banking
world is being sliced out by each com-
pany thats doing each niche better,
Hungerford said. Each bit of clothing
is being stripped off and theyll be left
with nothing on. Until they can adapt
to that theyre going to be struggling.
If you can get a seven or eight per
cent return and your bank is offering
you one or two, theres only one
choice, he added.
However, Brian Mairs of the British
Banking Association said that com-
petition is not something the banks
are not used to.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
EDITORS
LETTER
DAVID HELLIER
INSURANCE giant AIG is today set to
sell its remaining stake in AIA in a
block offering worth up to $6.5bn
(4bn), exiting the Hong Kong-based
business it founded almost a century
ago.
It is understood that AIGs remain-
ing 13.7 per cent stake in AIA is being
priced at 29.6530.65 Hong Kong dol-
lars a share, below Fridays closing
price. Trading was halted yesterday
while the placing was completed.
The Asian insurance market is
booming as the emerging middle
class buy its products for the first
time. However AIG has been forced to
dispose of the prized asset after the
US government bailed out the group
to the tune of $182bn at the height of
the 2008 financial crisis.
After a deal to sell the business to
Prudential collapsed in 2010, a two-
thirds stake was floated in Hong Kong
for $20.5bn. Since then AIAs share
price has rocketed by more than 60
per cent while AIG has continued to
BY JAMES WATERSON
sell down its stake.
Both firms trace the roots back to
1919 when a 29-year-old American
named Cornelius Vander Starr start-
ing selling insurance from his
Shanghai office. He later returned to
New York where he ran operations
under the AIG brand but retained
ownership of the Asian operation
under a different name.
Earlier this month AIG sold most of
its aircraft-leasing division for $4.2bn
and last Friday the US Treasury dis-
posed of its final shares in the group.
American International Group Inc
17Dec 11 Dec 12Dec 13Dec 14Dec
34.50
35.00
34.00
35.50
$ 34.95
17Dec
Sir Richard
Lambert
ICELANDS special prosecutor last
night indicted the former chief
executives of Baugur Group and
Glitnir Bank for their roles in a loan
approval, according to reports.
The two ex-bosses, with two other
directors at Glitnir, were charged
with fraud, Bloomberg reported, due
to their involvement in a 6bn krona
(29.3m) loan. According to the
special prosecutor, approving this
loan to holding company FS38
breached their authority.
The loan was made just three
months before Glitnir failed in
October 2008, and was used to buy a
stake in a swiss jewellery firm.
Iceland indicts
ex Baugur CEO
BY BEN SOUTHWOOD
DEUTSCHE Bank has hired former
Bank of England policy maker Sir
Richard Lambert as a senior
independent adviser, as the firm
grapples with the effects of the
sovereign debt crisis and a raft of
new banking rules.
Sir Richard was director general
at business group the CBI from
2006 to 2011.
Prior to this, he was a member
of the Bank of Englands interest-
rate-setting committee for three
years, and worked 35 years at the
Financial Times, ten of which he
spent as editor.
As a senior independent
Deutsche Bank appoints Sir
Richard Lambert as an adviser
BY MARION DAKERS
adviser, he will help ensure
Deutsche Bank remains the
industrys leading universal bank
and a trusted adviser to the UKs
leading companies, said Deutsche
Banks UK boss Colin Grassie.
Deutsche Bank said in October
that it plans to cut
around 1,900 jobs
worldwide, as the
bank embarks on
a restructuring
that will add a
string of one-off
charges to this
years results.
UNLIMITED and free Wi-Fi will be
spread across the Square Mile
from today, following a new deal
signed between the City of London
and Skys The Cloud service.
The move which will bring
wireless internet to 400,000 people
in the City comes after a
successful trial of the service
during the Olympics.
The Cloud already runs a Wi-Fi
network across the City, but free
use of the service has been
Free and unlimited Wi-Fi comes
to the Square Mile for first time
restricted until now. Mark Boleat,
policy chairman at the City of
London Corporation, said it was of
critical importance to have
adequate communications
infrastructure in the Square Mile.
Users that register for the
service will be taken to a page
showing news from Sky which
bought The Cloud in January last
year for 50m in a bid to compete
with BTs Openzone service.
It launched Wi-Fi in the City in
2007, but up to now, non-paying
users have been limited to 15
minutes of use per day.
EXCLUSIVE
BY JAMES TITCOMB
3
NEWS
cityam.com
WALL STREET FALLS SILENT
The floor of the New York Stock Exchange was silenced for a minute yesterday at 9.15am
as traders paused to remember and mourn the victims of the Sandy Hook Elementary
shootings in Connecticut. Twenty children and six adults died in the attack by a lone
gunman, the second-deadliest school shooting in US history.
Insurer AIG to
exit AIA after
4bn share sale
90
THE BANK of Englands mass asset
buying scheme is still stimulating
economic growth, it claimed in a
research paper out this morning.
The first two rounds of gilt-buy-
ing both successfully boosted the
supply of broad money, the Banks
quarterly bulletin showed, poten-
tially lifting growth. But the frac-
tion of purchases that leaked out of
the transmission grew from 39 per
cent to 44 per cent, the paper said.
However, by showing that leakage
had only edged up, this data was
more supportive of the power of
quantitative easing (QE) than
November comments made by
Charlie Bean, deputy governor of
the Bank, responsible for monetary
policy.
Bean had said that though QE
could still influence interest rates
across the economy, the effect on
output could be very weak while
there was such uncertainty over
the future path of demand.
Old Lady says
QE programme
is still working
BY BEN SOUTHWOOD But the research paper suggested
the programme was boosting
demand through impacting broad
money since approximately 56 per
cent of the funds were getting
through.
For QE to work, the broad money
created by asset purchases should
flow through to households and
companies and help finance a high-
er level of spending in the econo-
my, the paper read, concluding
that this did happen.
And this effect continued into the
third round of purchases, the paper
said, though that period was not
directly covered in the data.
The pickup in broad money
growth during the latest round of
asset purchases would also appear
to indicate a positive effect, the
authors wrote, connecting the lat-
est round with the previous, larger
monetary injections.
One thing QE failed to do was
invigorate lending, the paper
noted, but it stressed that this was
not the policys purpose.
Sir Mervyn King has led the Bank of England through its quantitative easing programme
SEVERAL UK equity income funds
are at risk of falling out of the
Investment Management
Association sector next summer as
they fall short of yield criteria.
IMA figures show that industry
stalwarts Henderson and St Jamess
Place are among firms with funds
that are not yet meeting the trade
bodys target of 110 per cent of the
FTSE All-Share annual yield over
the past three years.
Income funds
could lose out
FTSE 100-listed investment manager
Schroders has agreed to buy STW, a
fixed income manager in the United
States, for an undisclosed sum.
STW manages around $11.9bn on
behalf of institutional clients, with
a focus on investment-grade fixed
income assets.
The deal boosts Schroders fixed
income assets under management
in the States by 50 per cent. It is due
to complete in early 2013.
Schroders to
buy US firm
BY MARION DAKERS
5
NEWS
cityam.com
THE European Commission gave
preliminary approval yesterday to a
3.9bn (3.16bn) state bailout for
Banca Monte dei Paschi, ending
months of uncertainty for Italys
third-biggest lender.
The approval is conditional on the
bank, which was forced to request
state aid to bolster its weak capital
base, presenting a restructuring plan
within six months.
Monte dei Paschi, the worlds
oldest bank, was one of just four
European lenders that failed to
meet tougher capital requirements
set by the European Banking
Authority.
EC bailout for
Monte Paschi
SPAINS largest bank Santander
announced yesterday that it will
spend around 260m (211m) to
absorb subsidiary Banesto and will
close 700 local branches as it tries
to cut longer-term costs.
Spains banks, hit by a slump in
the property market and a
prolonged recession, are trying to
rid themselves of around 185bn
of real estate assets.
Santander said the move would
generate savings of 520m for the
group by the third year of the
merger, of which 100m are
expected from revenue increases.
Santander to shut 700 Spanish
branches as it looks to cut costs
BY HARRY BANKS Santander, Banesto and
unlisted private banking division
Banif, which will also be absorbed
in the merger, have around 4,664
offices in total. The groups
combined market share of
branches in Spain would increase
from 10 per cent in 2008 to 13 per
cent in 2015, as its branch cuts
would be less than the decline
across the sector as a whole.
At the end of 2015, Spain will
have an estimated 30,000 bank
branches, down by 16,000 or 35
per cent in eight years.
The move will have a neutral
effect on Santanders capital
ratios, Santander said.
FINANCIAL advisers must contact
thousands of people who bought
into two Guernsey funds to see if
they are eligible for compensation
after Britains markets watchdog
wielded new powers yesterday in its
crackdown on mis-selling.
The Financial Services Authority
(FSA) said yesterday up to 800
advisers who recommended the two
CF Arch cru funds would have to ask
customers if they want their cases
reviewed for possible mis-selling,
after the funds lost an estimated
140.5m for investors.
Although the sums are not huge
compared with other mis-selling
scandals, the FSAs tactics signal a
tougher approach.
The FSA has concluded that there
was widespread mis-selling by firms
who failed to assess the funds as
high risk despite the fact that the
funds were typically invested in non-
mainstream assets such as private
equity, private finance and
commodities, it said.
Advisers will have until the end of
April to contact clients sold the
funds, with two reminder letters if
there is no reply.
The FSA estimates it will cost
advisers 600,000 to 2.7m in total. A
firm offering redress must pay the
money within 28 days of receiving a
claim from a consumer that is
determined as being payable.
Regulator asks
advisers to act
on mis-selling
BUSINESS minister Michael Fallon
issued a fresh warning over red tape
coming out of Brussels yesterday.
The Tory MP told City A.M. that
deregulation is absolutely critical
if the UKs small and medium sized
businesses are going to grow, but
that people can see the weight of
European legislation coming and
that it was important to flag these
issues and to show firms the efforts
the government is making.
There is a lot of red tape in
Brussels, and we, and 12 other
member states are calling for
the same kind of deregulation
and cutting red tape targets in
Brussels as we have developed
here, Fallon said.
His comments came at the
opening of an expanded
hub from data centre
operator Telecity. The
centre will house
much of the IT
equipment used
by the UKs fast-
growing technolo-
Cuts to Brussels
red tape critical
says minister
BY JAMES TITCOMB
gy companies. Its expansion was
described as vital by Fallon, but the
centre was only built after years of
applications for permission to
expand the centre, a situation that
Fallon said showed how chronic our
[planning] system is.
Its just unacceptable, the plan-
ning system needs to adapt to the
new economy. And it just isnt suited
to it, Fallon added.
The government has pledged to
save billions by slashing red
tape, a move that was wel-
comed by business groups
yesterday.
We are beginning to see
real progress, the
Federation of Small
Businesses said.
It is good to see that the EU
measures due to come into
force are also documented in
new regulation, but for this to be
of real use, the cost of these reg-
ulations also needs to be
shown, the group added.
Business minister Michael
Fallon warned over the EU
BUSINESSES are hiring more female
directors, with 40 per cent of large
companies now having at least one
woman on their board, according
to research released yesterday.
Information services firm
Experian studied 2.7m businesses
and found the total number of
female directors has increased by
240,000 since 2007.
However most of the increase
can be attributed to progress at
small businesses, while companies
employing more than 250 people
remain more male-dominated.
The news came as two women
Female representation in the
boardroom hits record high
BY JAMES WATERSON were promoted to senior positions
on the boards of FTSE 100 firms.
Jean Tomlin, currently HR director
at Olympics organiser Locog, will
join supermarket group J Sainsbury
as a non-executive director after
running the successful Gamesmaker
volunteer programme.
Meanwhile, senior Credit Suisse
banker Gillian Sheldon is set to
take up the position of senior
independent director at
outsourcing firm Capita, where she
is already a non-executive director.
Last month the EU failed to
impose a 40 per cent quota for
female representation on boards at
listed companies.
6
NEWS
cityam.com
Gillian Sheldon (left) and Jean Tomlin both took jobs on FTSE 100 boards yesterday
TEMPORARY power solutions
provider Aggreko saw its stock plum-
met yesterday, as it warned of slow-
ing revenue next year.
Over the year to December, group
revenues are expected to come in at
around 1.6bn, up 13 per cent, the
FTSE 100 firm said in a pre-close trad-
ing update. Profit before tax and
amortisation is expected to increase
12 per cent to 365m.
Despite a strong 2012, the compa-
ny, which supplies temporary power
generators, warned that the econom-
ic environment next year is particu-
larly uncertain.
The absence of the Olympics effect,
a reduction in US troops in
Afghanistan and the likelihood that
Japanese clients will not extend their
contracts into the second half of
2013 could push revenues down by
around 100m next year, Aggreko
said yesterday.
The power solutions company
added that while its international
Aggreko sinks
as it warns of
2013 slowdown
BY CATHY ADAMS
power projects and local businesses
were expected to grow in 2013, it
would not be enough to mitigate the
100m reduction in revenue, leading
to a lower group performance overall
next year.
Yesterdays statement marked the
firms second profit warning in
almost as many months.
In October, Aggreko warned that its
full-year profit would be hit by
unfavourable exchange rates and
increased bad debt provisions.
Shares closed down 21.69 per cent at
1,664p yesterday as analysts down-
graded their forecasts.
Centamin rebounds as its gold
exports resume at Sukari mine
EMBATTLED gold miner Centamin
yesterday said gold exports from
the Sukari mine had restarted after
they were halted by customs
officials last week, sending its
shares on a sharp rebound.
Fuel supply to and from Sukari
has also resumed normal service,
after the gold miner was told on
Friday that it was not liable for
$65m (40m) in back payments for
diesel fuel.
Last week, Centamin shares
BY CATHY ADAMS dropped 46 per cent as it said it
had suspended operations at
flagship asset Sukari, following the
dispute over diesel supplies.
Normal operations at the mine
should resume in the coming days,
Centamin said yesterday, once
payment for the first shipment has
been received.
The FTSE 250-listed miner added
that it had the continued support
from the Ministry of Petroleum
and its partner on Sukari, the
Egyptian Mineral Resources
Authority. Shares closed up 21.65
per cent yesterday at 42.14p.
L
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A

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E
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N
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A
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M
.
Aggreko chief executive Rupert Soames has headed up the firm since 2003
Centamin PLC
20
30
40
50
60 p
42.14
17Dec
Aggreko PLC
1,800
1,900
1,700
2,000
2,100
2,200
2,300 p
1,664.00
17Dec
BOTTOM LINE: Page 11
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Management are stressing that it is very early to be making guidance
for 2013 and that they are quite likely to be wrong. However, it does again
reiterate the risks in the business and the market is now likely to put a
higher risk premium on the company.
ANALYST VIEWS
The update suggests that 2012 will close largely as expected in overall
terms, though 2013 has a stronger headwind than expected and that previous
expectations are likely to be too optimistic. We now expect 2013 to be
below 2012 something not seen at Aggreko for some time.
Aggreko is, in our view, a well-managed, quality business. The underly-

ing drivers, namely the continued supply demand power imbalance in develop-
ing countries, remain strong. However, contract awards can be lumpy,
particularly in international power projects.
SHOULD INVESTORS BE
WARY OF AGGREKOS
PROFIT WARNING? Interviews by Cathy Adams
MIKE MURPHY NUMIS
PAUL JONES PANMURE GORDON
CAROLINE DE LA SOUJEOLE SEYMOUR PIERCE

BUDGET Irish airline Ryanair has
announced that head of communi-
cations Stephen McNamara is resign-
ing after four years of being
battered and abused by Michael
OLeary on one side and the
European media on the other.
A press release sent by the airline
revealed that McNamara has decid-
ed to pursue an easier life as director
of communications for the Irish
Rugby Football Union: Stephen can
expect to take far fewer hits working
for Irish rugby than he does work-
ing for Ryanair.
The statement added that
McNamara will leave
Ryanair on 7
February after an
extensive round
of lunches and
dinners with
his many
The man with
the worst job
in PR resigns
friends and admirers in the media,
all paid for by the Ryanair press
entertainment budget of 3.94.
Ryanair boss Michael OLeary
praised McNamara for his service to
Ryanair over the past four years and
said the hunt was now on to recruit
another brave soul to take on the
worst job in Irish PR.
OLeary said the firm would look
forward to grooming the
next candidate to take
over the high profile and
incredibly overpaid posi-
tion. Safe to say sense of
irony is also a require-
ment. Funnily enough, no
author name appeared
on the press release.
IN addition to the Christmas
lights shining around Canary
Wharf, a 15ft high menorah has
been installed in the gardens of
Jubilee Park.
To commemorate the Jewish
festival of Chanukah, the candles
were lit in special lighting
ceremonies, sponsored by KPMG
and Citi, over eight days last
week.
This is the 14th time Canary
Wharf has had a giant menorah
Chrismukkah in Canary Wharf:
Final menorah candles light up
on display, the lighting of which is
said to be a symbol of optimism.
Docklands-based finance folk
who are feeling festive may also
be inclined to take a twirl on the
One Canada Square ice rink.
Those feeling less boisterous
have the option to enjoy the apres
skate, at the rinkside Boisdale on
Ice bar which will be serving
mulled wine, hot toddies and,
naturally, a haggis sausage roll or
two.
The 15 foot high menorah on display in the gardens of Jubilee Park in Canary Wharf
8
cityam.com
cityam.com/the-capitalist
THECAPITALIST
Word has reached The Capitalist
of post Christmas party antics
from the Drift Bar at The Heron Tower.
Party frivolities were pushed to the
limit last Friday when a gentleman
from a well-known City brokerage
climbed the 30ft display in the bar,
only to be greeted by a table of ten
diners enjoying their meal in the
restaurant above. You may be
wondering what spurred our young
climber on, to scale such dizzy
heights? The answer was not pride or
honour, but a 10,000 wager from his
companions. Needless to say our party
climber was ejected shortly
afterwards. He ought to be more
careful next time: they do say pride
comes before a fall.
An unlikely Christmas Number
One entry from drivers at lorry
firm Eddie Stobart. Ten of the truckers,
and stars of the strangely popular
Channel 5 series Trucks and Trailers,
have released a charity single. The
parody of the 12 Days of Christmas
comes complete with adapted lyrics,
including seven spotters spotting, a
nod to the legion fans of the firms
trucks. The single, in aid of the Help
for Heroes charity, is available to
download now from major online
music retailers.
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
Head in hand: Ryanair PR
man Stephen McNamara
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Making waves
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NICK Clegg yesterday suggested the
Liberal Democrats will fight the 2015
general election as the party of the
centre ground, in an apparent admis-
sion that his party cannot win back
the left-wing protest voters who
supported him in 2010.
The decision could have major
implications on the make-up of the
next government as a collapse of the
Lib Dem vote would be devastating for
the Conservatives and hand many key
constituencies to Labour.
In a speech to mark five years as
party leader Clegg said the Lib
Dems have shifted from the
dogmatic liberalism of oppo-
sition to pragmatic liberal-
ism in government.
With some opinion polls
suggesting the Lib Dems
have slipped into fourth
place behind UKIP, Clegg
acknowledged that his party
is a suffering as a result of the
UKs tribal politics.
As a result he
said Lib Dems
must do
Clegg launches
centre ground
election battle
BY JAMES WATERSON
more to publicise divisions in the
coalition, so the electorate knows
when they have forced a concession.
If we are to become a more perma-
nent fixture of government, then it
will be, at least at first, as a partner in
coalitions, he said. [That] means put-
ting up with people who object that
we havent got everything they
wanted.
Clegg cited the example of the gov-
ernments controversial welfare
reforms as an example of the Lib Dems
influencing policy. He said interven-
tion by the junior coalition partner
meant the country avoided the dra-
conian cuts he claims would
have accompanied a majority
Tory administration.
All the major parties have
begun positioning them-
selves for the next election
and last week the
Conservatives launched a cam-
paign to promote their welfare
policy in key marginal
constituencies.
A contrite Clegg
will fight for the
centre ground
9
NEWS
cityam.com
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o
o
k
b
e
f
o
r
e

m
i
d
n
i
g
h
t
For travel on East Coast trains only, from 7 January 2013 to 1 March 2013, excluding 15-24 February inclusive. Book by midnight 18 December 2012 only at eastcoast.co.uk/sale. At least 40,000 30 fares and 85,000 10 fares will be made available for the ofer and are subject to
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We have 125,000 seats available for train travel from
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SALE ENDS TODAY
Yes, I think so. Its a brand name, and I expect a
lot of people to be interested in it. If it gained
new capital to invest maybe the service would get better.
Though of course theres tough competition with DHL.
These views are those of the individuals above andnot necessarily those of their company
BEN BERNICE
BANK OF TOKYO
No. As an organisation, it has not really earned

my condence and as a service business it has
not been the best. I dont see a lot of growth potential in
that sector either. Were all sending emails, arent we?
DAVID BAILEY
BANK OF ENGLAND
Maybe. Its a reputable company, and they
already have the infrastructure. UPS and DHL are
making money, so I dont see why they couldnt do that as
well. Of course, they need to upgrade their service levels.
AMIR DAVALOU
MONITISE
CITYVIEWS
WOULD YOU CONSIDER BUYING
ROYAL MAIL SHARES?
Interviews by Jakob Villumsen
THE INSTITUTE of Directors said
today most of its members sup-
port a bigger Heathrow Airport as
a way to improve aviation capacity
in the UK.
More than 1,000 directors sur-
veyed by the IoD plumped for
expansion at Heathrow as the best
way to expand capacity, with 27
per cent selecting this option.
Around one in five, or 21 per
cent, said a major expansion at an
airport outside of the south east
would be their preferred option.
Fifty-nine per cent agreed that a
lack of capacity at Heathrow is
damaging inward investment in
the UK, compared to 17 per cent
who disagreed. The IoD said that
in all UK regions, more directors
supported this statement than
not.
We cannot afford to ignore the
reality that demand for air travel
in the south east will soon be
more than our airports can han-
dle, said Corin Taylor, senior eco-
nomic adviser to the IoD.
This means airport capacity
must expand, alongside other
measures to improve our competi-
tiveness in terms of taxes and
immigration processes.
By 2030, overall demand for
flights in the south east is expect-
ed to outstrip supply,
according to
Department for
Transport figures
cited by the IoD.
Regional air-
ports should be
used better to
h e l p
shoulder extra capacity in the
short-term, the IoD recommends,
with Birmingham Airport picked
out as particularly well-suited.
Nearly two thirds of IoD mem-
bers said direct flights from the
UK to emerging markets are likely
to be important to their business
in the next decade, flagging up a
desire among businesses for new
routes in the short-term.
The IoD repeated its criticism of
Air Passenger Duty, a levy imposed
on all passengers entering and
leaving the UK. The group wants
the tax to be frozen, a step it says
will make the countrys airports
more attractive for passengers and
potential investors.
The government has commis-
sioned a report into the vari-
ous options for beefing up
Britains air links, but it is
not due until 2015.
Directors want to see
new Heathrow runway
BY MARION DAKERS
RITZ ACCUSED OF PAYING NO CORPORATION TAX IN 17 YEARS
The Ritz hotel has not
paid corporation tax
since 1995 thanks to
its use of legal
loopholes, according
to last nights episode
of the BBCs
Panorama
programme. The
landmark building is
owned by an offshore
trust set up by the
Monaco-based
Barclay brothers, who
yesterday said they
do not have any
direct involvement in
the business. We
are not responsible
for corporate taxes in
the UK and are
unaware what tax is
paid on the Ritz, Sir
David Barclay said.
The governments transport
secretary Patrick McLoughlin
ENERGY watchdog Ofgem has
approved billions of pounds
of investment by energy
companies to overhaul the
UKs gas and electricity grid,
reducing initial overall
spending plans by 16 per cent
to 2021.
The proposals will
nevertheless add 15.10 to the
average yearly fuel bill by
2021, Ofgem said.
Energy companies initially
proposed spending 45.4bn on
upgrading and maintaining
the country's energy networks
until 2021, which would be
clawed back through higher
energy bills.
Ofgems latest proposal,
which aims to curb energy
spending plans in order to
reduce the impact on utility
bills, reduces that figure by 16
Energy grid overhaul to add
15 a year to household bills
BY CITY A.M. REPORTER per cent to 38.2bn.
Within the 38.2bn, 24.4bn
will go towards modernising
the energy grid, up 2bn
compared with initial
proposals made in July
following a row over the
budget.
Initial proposals made by
the regulator were slammed
for being too low by the
country's biggest energy
distributor, National Grid, in
July. The FTSE 100 company
will respond to Ofgems latest
proposals in March.
The spending plan comes as
the government-sponsored
Fuel Poverty Advisory Group
warned that high utility bills
will push 300,000 more homes
into fuel poverty this year.
The term fuel poverty means a
household spends more than
ten per cent of their income
on heating.
10
NEWS
cityam.com
IN BRIEF
Hunting warns of dimmer outlook
nEnergy services provider Hunting
closed down more than seven per cent
yesterday, as it warned the short term
outlook was increasingly cautious in
its operating markets. Hunting said it
was seeing a switch from natural gas
to liquids drilling in its drilling tools
unit, although the London-listed
company added that global offshore
drilling continued to improve. Despite
the gloomy outlook, it says it is still
trading in-line with full year forecasts.
New contract splash for Rolls
nBlue-chip Rolls-Royce has netted a
contract with the Finnish Navy to
supply water jets to power high-speed
landing craft. The contract is for 12
craft to be built by the Marine
Alutech shipyard in Teijo, Finland
and will enable the vessels to
manoeuvre more effectively in the
Scandinavian countrys shallow
coastlines. The 19-metre long vessels
will enter service in mid-2014, the
company said.
11
NEWS
cityam.com
C
ENTAMIN shares roared back
to life yesterday as the gold
miner announced it had
restarted exports of the yellow
metal. But even a jump of 21 per
cent did not restore the companys
share price to the level it was at
before it was forced to announce
the suspension of operations on 13
December. Shares are well down on
their October highs and still around
their lowest point for the year.
It is easy enough to see why.
Centamins principal asset, the
Sukari gold mine, is in Egypt. The
firms share price climbed steadily
from 2009 to the end of 2010. Then
came 2011s Egyptian revolution,
since when, apart from a brief
improvement this autumn,
Centamin has fallen steadily.
It is not gold demand that is
causing the problem. Since 2009,
the price of gold has doubled. This
is about Egyptian politics.
That is not to say Centamins
investors are callous enthusiasts for
Hosni Mubaraks old regime, but it
is a clear verdict on the pharaonic
ambitions of President Mohamed
Morsi, whose November power-grab
brought fresh rebellion to the
streets of Cairo. Now the country
has been left in limbo again by the
arguments over the new
constitution, drafted by an Islamist-
dominated assembly. As the
Islamists claim victory in the
national referendum and their
opponents claim fraud, there is no
sign of an easy resolution.
For all the initial hope of a liberal
Arab Spring, Egypt is clearly at best
facing a long, slow march out of
disorder towards functioning
democracy. That makes investment
in the country in the short-term
look anything but appealing.
Centamin suddenly found itself
without reliable diesel fuel supplies
and unable to get its gold past
customs without approval from the
minister of finance. It is not its
fault, but not surprising that such
unpredictability drives investors to
get their money out of its shares.
BOTTOM
LINE
MARC SIDWELL
Centamin counts the cost of Egypts unrest
BRITISH packaging company DS
Smith yesterday insisted its 1.3bn
takeover of Swedens SCA
Packaging is on track, despite
launching an investigation into
allegations of accounting
irregularities at its new
acquisition.
FTSE 250-listed DS Smith took
control of its competitor in June,
but the completion accounts have
still not being signed off and the
firm is understood be disputing
the final purchase price. Reports
suggest DS Smith is seeking a
180m (146m) discount on the
original figure.
DS Smith says 1.3bn deal not
affected by accounting probe
BY JAKOB VILLUMSEN Clearly, there is a negotiation in
an acquisition like this. You start
by disagreeing, and then you meet
at a point where you agree. It is
completely normal, a spokesman
for DS Smith told City A.M.
He said the current schedule is
ahead of prior expectations.
Berkshire-based DS Smith also
confirmed that last month it called
in forensic accountancy firm Alix
Partners to investigate allegations
of financial irregularities at SCA
following an anonymous tip-off.
Yesterday it said the
investigation found the allegations
were without substance. Despite
this, the findings were forwarded
to the Serious Fraud Office.
NORILSK Nickel named longtime
co-owner Vladimir Potanin as its
chief executive yesterday under a
Kremlin-inspired deal to end a
boardroom war at the worlds top
nickel and palladium producer.
Roman Abramovich will take
control of a 20 per cent voting
stake and act as a buffer between
Potanin and rival Oleg Deripaska,
who owns a share in Norilsk
Oligarchs make peace over the
worlds largest nickel producer
BY HARRY BANKS through UC Rusal, the worlds
largest aluminium producer.
When the new lineup of
shareholders gets used to each
other, confidence will grow that
we now feel is now lacking,
Potanin said, paying tribute to the
role to be played by Abramovich,
an ally of President Vladimir Putin.
Potanin plans to stay for up to
two years. The peace deal will last
for 10 years. Core shareholders
agree to keep their stakes for five.
Vladimir Potanin says that he will stay as chief executive of Norilsk for up to two years
OIL major BP yesterday announced it
was to sell its interest in a North Sea
gas field to SSE for $288m (178m) in
cash.
Completion of the deal, to sell BPs
non-operated 50 per cent stake in the
Sean gas field, is expected in the first
half of next year. Sean, located in the
Southern North Sea, is currently
operated by Shell, and produces
around 18,000 barrels of oil equiva-
lent a day.
Trevor Garlick, regional president
of BP North Sea, said yesterday: The
divestment of BPs interest in the
non-core, non-operated Sean field is
consistent with our strategy of focus-
ing on high value assets with long
term growth potential.
The British oil behemoth plans to
invest $10bn over the next five years
in the North Sea. BPs strategy to
focus on the region has included the
sale of the Wytch Farm oil field in
Dorset, the Southern Gas Assets and
the sale of its stakes in the Draugen,
Alba and Britannia fields.
Last month, BP announced it was to
divest its interests Harding, Maclure,
Braes and Devenick to Abu Dhabi
state oil firm TAQA.
Jefferies advised BP on this transac-
tion, with Neil Schroeder leading the
team from the bank.
BP sells stake in
North Sea gas
field for 178m
BY CATHY ADAMS
INDUSTRIAL materials supplier
Cookson yesterday confirmed that
its demerger had become effective,
splitting the company into two
separate divisions and getting rid of
the Cookson name.
In line with the terms of the
demerger, Cookson shares were
cancelled yesterday morning.
As proposed at the start of
November, the FTSE 250 listed firm
said it would spin off its
performance materials division into
a new speciality chemicals company
called Alent. Its shares are due to
begin trading on the London market
tomorrow morning.
The rest of the Cookson Group,
made up largely of the engineered
ceramics division, has been renamed
Vesuvius and its shares were
admitted to the London Stock
Exchange yesterday morning.
Alent and Vesuvius, which are
likely be FTSE 250 companies, will
have separate strategic, capital and
economic characteristics as well as
different management teams.
Existing Cookson shareholders
will receive one share in each
Vesuvius and Alent for each share
they already hold in the company.
Cookson Group
split takes
effect on LSE
BY CATHY ADAMS
BP PLC
425.0
427.5
430.0
432.5 p
427.00
17Dec
SWEDISH clothing giant, Hennes &
Mauritz yesterday posted a smaller
than expected drop in like-for-like
sales for November compared to
same month last year, easing fears of
large markdowns to reduce unsold
stock amid weak demand in key
markets.
The retailer said local-currency
sales at stores open a year or more
shrank one per cent in the last
month of its financial year.
This was better than the three per
cent drop predicted by analysts
following a drop of five per cent in
October.
There had been some concern
among analysts because industry
data showed that clothing sales in
Germany, H&Ms single biggest
market, were down five per cent in
November.
H&M, the worlds second-biggest
clothing retailer behind Zara owner
Inditex, has the bulk of its business
in Europe, where a sovereign debt
crisis and austerity measures have
dampened demand.
Turnover in the full September to
November quarter grew five per
cent from a year earlier to 32.5bn
Swedish Krona (3bn), matching
expectations.
Retailer H&Ms
like-for-likes
ease worries
BY A CITY A.M. REPORTER
APPLE sold more than two million
iPhone 5s in China in its first week-
end on sale in the country, it
emerged yesterday, but the company
was knocked by its share price sink-
ing during the days trading.
Despite the record launch in China,
which is expected to become
Apples biggest market in
the near-future, Apple stock
floated around $500 before
recovering later on.
A close below the coveted
$500 mark would be a psy-
chological blow for the firm,
that has suffered from a
sinking share price since
peaking in September.
The company had taken a
hit earlier this month when
research firm IDC said Apple
had slipped down to sixth in
the list of Chinas top smart-
phone sellers.
China snaps up
iPhone 5s but
shares wobble
BY JAMES TITCOMB
Apple was hit yesterday by analyst
downgrades. Citi downgraded the
stock from buy to neutral, while
Jefferies analyst Peter Misek said the
company had cut orders of the
iPhone 5 due to weaker sales, and
that manufacturing plans for the
iPad had also been reduced. Apple
has lost more than 25 per cent of its
market value since mid-
September
Nonetheless, yesterdays
announcement from Apple
proved that there is still
high demand for the compa-
nys products in the worlds
second-biggest economy.
Customer response to
iPhone 5 in China has been
incredible, setting a new
record with the best first
weekend sales ever in China,
Apple boss TimCook.
Imagination finally lands chip
firm MIPS after bidding frenzy
BRITISH chip designer Imagination
Technologies has finally won the
bidding for US-based company MIPS,
in a deal that will speed up its entry
into the fast-growing processor
industry.
The company agreed a $100m
(61.7m) price for MIPS yesterday,
and bidding rival CEVA said it
would not up its offer.
The agreed price comes after a
series of bids from the two parties.
Imagination had agreed a $60m
sum for MIPS last month, but then
had to bid $80m after CEVA waded
BY JAMES TITCOMB
in. CEVA then offered $90m last
week. However, the company backed
down after Imaginations latest bid.
Further increasing the purchase
price would not meet our financial
objectives, CEVA chief executive
Gideon Wertheizer said yesterday.
The deal, which is expected to
complete in the first quarter of next
year, will be paid for in cash.
It follows the majority of MIPSs
value its patent warchest being
sold for $350m to a consortium
including Cambridge technology
company ARM Holdings.
Imagination will use MIPSs
operating business to diversify its
offering as it moves into the
processor market dominated by
ARM. Shares fell yesterday on
warnings the move could be risky.
Imagination Technologies Group PLC
400
425
450
475 p
383.00
17Dec
The iPhone 5 sold two million
in Chinas first days of sales
13
NEWS
cityam.com
n Imagination, which designs microchips
and makes royalties on sales of chips that
use its designs, is now paying almost
double what was agreed for MIPS last
month. The price comes after two rival
bids from California chip designer CEVA,
which now says it will not bid further.
n However, in buying MIPS, Imagination
is not buying a successful, healthy
business the company made a $9m
(5.6m) loss in the year to July. It is, in
fact, signalling a move into a new market,
which some analysts have flagged as a
risky manoeuvre.
n While Imagination is generally seen as
the market leader in smartphone graphics
chips, which generate what is displayed
on the screens of devices such as Apples
iPhone, it has a much smaller presence in
the processor territory dominated by
another British chip designer
Cambridge-based ARM Holdings.
n Processors are the brain of a
computer they crunch the numbers on
applications, and are present in electronic
devices from smartphones to televisions
to car dashboards. Imagination part
owned by Apple is signalling a move
into this area with the MIPS deal.
n Imaginations chief executive Hossein
Yassaie has outlined processors as an area
of extraordinary growth in the next few
years, as more everyday objects, such as
fridges and central heating systems,
become connected to the internet and
thus need computing power.
n Buying MIPS which has a history in
processors would speed this transition
up, although Yassaie was determined to
make Imagination a processing
powerhouse even if the MIPS deal had not
gone through. Experts have questioned
the viability of this move, with more
established competitors in this space.
WHY IS IMAGINATION SO KEEN ON MIPS?
Luxury lingerie firm Agent Provocateur saw sales increase 18 per cent in the year to 26
March, with figures boosted by shop openings in cities such as Amsterdam, Madrid and
Rome. Turnover rose from 26.7m to 31.4m, while net earnings grew from 3.3m to
4.1m, an increase of 24 per cent on the previous year.
AGENT PROVOCATEUR FIGURES LIFTED
IN BRIEF
Eurozone trade surplus rises
nThe Eurozone achieved a 10.2bn
goods trade surplus with the rest of
the world in October, compared to
9.5bn the previous month,
according to official statistics body
Eurostat. Seasonally adjusted exports
fell 1.4 per cent while imports rose
0.6 per cent. For the 27-member EU,
its goods trade deficit narrowed
slightly to 12.5bn. Meanwhile, hourly
labour costs in the euro area rose two
per cent in the year to the third
quarter.
Draghi defends banking union
nNew European Central Bank powers
to oversee Eurozone banks will help
restore confidence in the sector and
revive interbank lending, boss Mario
Draghi said yesterday. The single
supervisory mechanism will contribute
to restoring confidence in the banking
sector across the euro area," he said.
The new body will automatically
oversee around 150 of the currency
blocs 6,000 banks to start with, and
will have authority to intervene if
others show signs of trouble.
IMF deadline passes for Argentina
nA deadline for the Argentinian
government to provide more accurate
economic data to the International
Monetary Fund (IMF) passed last
night, with the country facing the
prospect of being expelled from the
group. IMF chief Christine Lagarde had
warned in September that Argentina
could be show a red card by the
global support mechanism if it failed
to submit satisfactory evidence over
its rates of growth and inflation.
THE UK population has grown at its
fastest pace since the post-war baby
boom in the past decade, according to
the 2011 census figures out yesterday.
On census night, there were
63,181,775 people living in the United
Kingdom, the Office for National
Statistics said.
The country has gained a net 4.1m
people, or almost seven per cent, on
the previous survey in 2001 a rate of
growth beaten only by the nine per
cent population explosion after the
Second World War.
Over the last 100 years, the UK popu-
lation has increased by just over 50 per
cent, the figures showed.
London attracted much of this
growth, with the citys headcount ris-
ing 12 per cent to 8.17m people in the
decade.
Islington is the most densely popula-
tion part of London, with 138.7 people
per hectare, compared to an average
across the 33 boroughs of 52 per
hectare.
There are also more people than ever
living in Scotland, after its population
rose 4.4 per cent to 5.3m.
UK population
growth fastest
since the 1950s
BY MARION DAKERS
However, the number of Scottish
over-65s grew at an even faster pace,
rising from 15.9 to 16.8 per cent of the
total population.
In the UK as a whole, the proportion
of over-65s was steady at 16 per cent,
rising from 9.4m to 10.4m people.
Around 50.4 per cent of the popula-
tion is female, thanks to their slightly
higher life expectancy.
In separate figures out yesterday, the
ONS revealed that the average British
lifespan was 85 for men and 89 for
women in 2010. Since 1960, the aver-
age man has gained 10 years and the
average woman eight years. The ONS
used the modal age at death for these
sums, stripping out infant mortality.
UK population in the last 100 years
2011 2001 1991 1981 1971 1961 1951 1941 1931 1921 1911
20
30
10
0
40
50
60
70 Residents(Millions)
Nocensus
takenin
1941
Males
Females
S
O
U
R
C
E
: O
N
S
MORTGAGE lenders will focus
their attention on the safer, low
loan-to-value (LTV) end of the
credit market during 2013,
research showed yesterday.
Lenders will conserve their
precious capital and boost their
lending in the remortgage market,
which will grow a quarter from
around 310,000 transactions this
year to almost 400,000 next year,
according to data from LMS, a
conveyancing firms.
Chief executive Andy Knee put
this down to the Funding for
Lending Scheme, which he said
First-timers to be kept locked
out of 2013 mortgage market
BY BEN SOUTHWOOD was lifting activity at the low LTV
end of the market.
Amidst a difficult market for
funds, and in the tough economic
climate, prospective first-time
buyers are forecasting that they
will need even longer to raise a
deposit, according to figures from
the Building Societies Association.
Over a quarter of those who
hope to buy their first property
predict they will need 10 years or
more to raise a deposit, versus just
26 per cent who say they need
three years or less. By contrast,
prior to the credit crunch under a
third thought they would need
more than three years.
15
NEWS
cityam.com
All I want for
Christmas
is not to be
hit anymore
This Christmas, most children will look
forward to getting toys. But others,
like Emma, will be wishing more than
anything, for their hurt to end.
Will you be a Santa for the NSPCC
and send a special Christmas gift of
4 to help us support a child who
needs us most?
Photograph posed by model Getty Images. Emmas story draws on real life examples from NSPCC services, but does not describe a specic case. Texts will be charged at 4 plus your standard rate.
A minimum of 3.97 will be received by the NSPCC. By using this service you agree to being contacted by the NSPCC by telephone or SMS. Registered charity numbers 216401 and SC037717.
Text EMMA to 70744 and give 4 Be a S NTA for the NSPCC
LMS says loans with a low loan-to-value ratio will be easier to get hold of during 2013
IN BRIEF
Dods expands political portfolio
nPolitical information group Dods
has acquired the owner of Total
Politics magazine, Biteback Media,
along with Edinburgh-based political
publisher Holyrood Communications,
for a total of 1.46m from Political
Holdings. Dods, which runs the
website Politics Home, expects buying
Holyrood will increase its presence in
Scotland. Dods is buying from Lord
Ashcrofts Political Holdings.
WPP continues China growth
nAdvertising giant WPP has
expanded its reach in China with the
acquisition of entertainment
marketing agency Filmworks China.
The deal, for an undisclosed sum,
follows the creation of a chief
executive role for WPP China. The
boss of the worlds largest advertising
firm, Sir Martin Sorrell, expects China
to overtake the UK as WPPs second-
largest market soon.
Kentz nets three Iraq contracts
nFTSE 250-listed engineer Kentz has
snapped up three contracts in Iraq
worth $55m (34m) through its
technical support services business.
Over the next three to four years,
Kentz will be involved in the
development of in-plant process
facilities and infrastructure on
upstream facilities in Basra and
Baghdad, to boost oil and gas
production capacity.
CHINA-focused Fortune Oil yesterday
said it is to sell its natural gas busi-
ness to China Gas Holdings for
$400m (247m).
The deal, to be approved by share-
holders, will net Fortune Oil $200m
in cash on completion of the transac-
tion and a further $200m as a
deferred consideration, which could
be taken as shares.
The oil company also has the right
to nominate two directors to China
Gass board.
Fortune Oil held an 18.4 per cent
stake in China Gas as of 16
November, primarily through a joint
venture formed last year with one of
the company's founders.
London-listed Fortune Oil said yes-
terday that both companies gas
assets are complementary, and it
marks a unique opportunity for it
to become a large shareholder in
China Gas.
China Gas snaps
up Fortune Oil
gas business
BY CATHY ADAMS
The company intends to be a long
term shareholder in China Gas so as
to benefit from the potential growth
in this sector in China over the medi-
um term, the oil firm added.
Analysts at VSA Capital yesterday
hailed the sale. An investment in the
rapidly growing Chinese gas market
is likely to grow substantially over the
next 10 years and thus should trade
at a substantial premium to Western
gas distribution companies, they
said yesterday in a note.
Yellow Pages owner Hibu falls
over worthlessness warnings
SHARES in Hibu, the stricken owner
of the Yellow Pages, plummeted
yesterday as management
confirmed that the companys stock
could become completely worthless.
The company, which was
formerly known as Yell, announced
yesterday it had obtained a request
to negotiate a debt restructuring
with a group of creditors that own
hundreds of millions of pounds of
Hibu debt from 2009.
The company said it had won
various waivers and an
amendment including the ability
to negotiate with the lenders on a
capital restructure.
It said a number of capital
structure options are being
BY JAMES TITCOMB
considered but that all of those
options are likely to result in little
or no value being attributed to the
groups ordinary shares.
Although it had made this
warning before, shares in the
company still fell by more than 13
per cent yesterday, following a pop
last week.
Standard & Poors, the ratings
agency upgraded the companys
debt last Wednesday, which saw
stock rise around 50 per cent.
The company is currently in the
process of restructuring various
tranches of debt, which dwarf its
9.3m market capitalisation.
As Yell, Hibu faced continually
declining revenues from its core
Yellow Pages business, and it
rebranded itself earlier this year as
it pushed to become a digital-
focused directory business.
However, the shift has failed to
pay off and Hibus six-month
revenues crashed from 69m to
7m in the period to the end of
September. Since rebranding, shares
have fallen by two-thirds.
Fortune Oil PLC
11
10
9
12
13
14 p
10.75
17Dec
Hibu PLC
0.35
0.30
0.40
0.45
0.50 p
0.39
17Dec
Fortune said that both firms gas assets were complimentary
16
NEWS
cityam.com
Appendix 1
Section 17 Licensing Act 2003
Licensing Act 2003
Application for a new Premises
Licence
Notice is hereby given that (1) __________________________
has applied to the City of London on (2) __________________
for a new premises licence to use (3) ____________________
__________________________________________________
for the provision of (4) ________________________________
__________________________________________________
__________________________________________________
A record of this application is held by the City of London and
can be viewed by members of the public online by visiting
www.cityoflondon.gov.uk or by appointment at the offices of
City of London licensing authority, Walbrook Wharf, 78-83
Upper Thames Street, London EC4R 3TD.
Any person wishing to make a representation in relation to this
application must give notice in writing to the licensing authority
at the address shown above, giving in detail the grounds of
objection by (5) _____________________________________
The licensing authority must receive representations by the
date given above. The licensing authority will have regard to
any such representation when considering the application. It is
an offence, under section 158 of the Licensing Act 2003, to
knowingly or recklessly make a false statement in or in
connection with an application for premises licence and the
maximum fine on being convicted of such an offence is 5000.
FABIO ANDREA MARAZZI
05th DECEMBER 2012
PICCOLO BAR,
7 GRESHAM STREET, LONDON EC2V 7BX
SALE OF ALCOHOL: MONDAYS
TO FRID
2nd JANUARY 2013
AYS 11:00 - 22:00 & SATURDAYS 11:00 - 17:00
The new
jobs website
for London
professionalsT
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Morgan Stanley poked by a $5m
fine for Facebook deal influence
MORGAN Stanley, the lead
underwriter for Facebooks initial
public offering (IPO), will pay a $5m
(3m) fine to settle charges that its
bankers improperly influenced its
research analysts when the internet
company went public.
Massachusetts top securities
regulator, William Galvin, charged
yesterday that Morgan Stanley
helped Facebook disclose sensitive
financial information selectively,
perpetuating what he calls an
unlevel playing field between Wall
Street and Main Street.
BY HARRY BANKS
Morgan Stanley has been criticised
since the social media company
went public in May for having
revealed revised earnings and
revenue forecasts to select clients
before the media companys $16bn
IPO. A Morgan Stanley spokeswoman
did not immediately return a call
seeking comment.
Galvin, who has been aggressive in
policing how research is distributed
on Wall Street ever since investment
banks reached a global settlement in
2003, said the bank violated that
settlement. He fined Citigroup $2m
over similar charges in late October.
Massachusetts says that a senior
Morgan Stanley banker helped a
Facebook executive release new
information and then guided the
executive on how to speak with Wall
Street analysts about it.
The banker was not allowed to
call research analysts himself, so he
did everything he could to ensure
research analysts received new
revenue numbers which they then
provided to institutional investors,
Galvin said in a statement.
Retail investors were not given any
similar information, Galvin said,
saying this case illustrates how
institutional investors often have an
edge over retail investors.
THE INCREASING levels of
interest in nanotechnology have
led technology group Oxford
Instruments to spend up to $80m
(49.4m) on buying a US-based
microscope manufacturer.
The deal for Californias
Asylum Research, announced by
Oxford Instruments yesterday,
significantly increases [the
companys] footprint in the
nanotechnology space, chief
executive Jonathan Flint said.
The acquisition is the latest
step in the firms plan to increase
revenues by 14 per cent a year
over the next two years.
Asylum Researchs technology
Ox Instruments eyes big gains in
nanotech with microscope deal
BY JAMES TITCOMB
scans items thousands of times
too small for the naked eye, and
represents them visually. The
companys products are in high-
demand in the fast-growing
nanotechnology sector, which
now accounts for around half of
Oxford Instruments revenues.
The deal will be paid for in
cash, with $32m up front
followed by $48m over the next
few years depending on
performance.
Asylum Research saw earnings
of $1.1m on revenues of $19.6m
last year, though Oxford
Instruments said the deal which
will be done by the end of the
year will see Asylums earnings
improve.
Paul Staples, head of UK corporate nance
at BNP Paribas, led the team on the sale of
Fortune Oils gas business to China Gas
Holdings. Staples, who spent the majority of
his early career at Schroders and Citigroup,
also sits on BNP Paribas executive commit-
tee. He joined the bank in 2005.
The banker has presided over a signicant
period of expansion for the advisory busi-
ness in London, with a particular focus on
major cross-border deals.
BNP Paribas has gured prominently in
recent years within the energy & natural
resources sector, advising EDF on its offer
for British Energy in 2008 and GDF on its
offer for International Power in April this
year.
Earlier this year, Staples led the team advis-
ing Ferrovial on its successful sale of
Edinburgh Airport.
He is also a chartered accountant and grad-
uated with a rst class honours degree in
history from Trinity College, Cambridge.
Staples is working alongside colleague
Kenny Yau from the London ofce on the
transaction. Kenneth Quinn is also working
on the deal in the Hong Kong ofce.
Oriel Securities also had a role on the deal,
with Michael Shaw and Stewart Wallace
working on the transaction.
ADVISERS BNP PARIBAS
PAUL STAPLES
BNP PARIBAS
London is still the most exciting
place for food bar none,
Gunewardena says. Business at both
ventures has been good so far and
hotel bookings have also been robust.
We are even more convinced, given
the success of the South Place hotel,
that in the future we will develop a
nice boutique hotel business to sit
alongside our restaurants, he adds
confidently.
But what about the four years of
recession, jobs cuts in the financial
services sectors and the consumer
spending squeeze? The triple dip
shortly to be quadruple dip? he
mocks and insists there isnt a better
time to push ahead with projects.
Gunewardena has worked with Sir
Terence since the start of the business
in 1991, when the design guru left
retailing behind for eating out.
D&D, which has 30 restaurants in UK
and overseas, will open in Istanbul and
in Leeds next year.
We are building businesses we hope
will last from 10 to 20 years. You are
building restaurants to last through
several business cycles so it shouldnt
matter when you build them... You
have got to be able to survive the bad
as well as the good times, he said.
Hopefully for Gunewardena it will
just be good times ahead, with the
right choice of wine to celebrate.
tal needed to drive further restaurant
openings overseas and in London.
D&D has powered ahead with open-
ings in the capital, particularly in the
City, where Gunewardena believes
there is a growing appetite for a more
dynamic restaurant scene.
In September, D&D opened the Old
Bengal Warehouse, a restaurant ven-
ture off Bishopsgate on the site of an
old East India Company warehouse.
Two weeks later it also opened the
South Place Hotel (see review below)
marking the groups first hotel since it
developed the Great Eastern near
Liverpool Street in 2000, now owned
by Hyatt Hotels. And the group has no
intention of slowing down, with
another venture shortly to be
announced in the New Year.
The chairman and chief executive of D&D is building businesses for the long term
17
INTERVIEW
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Luxury
Travel
A special report
distributed within
City A.M. tomorrow
No. 1 / December 2012
Distributed within City A.M.
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analysis on topical industry and market
issues, in print, online and broadcast
The new
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professionals
The new
jobs website
for London
professionals
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CV: DES GUNEWARDENA
Age: 55
Background: Born in Kandy, Sri Lanka
until the age of seven when his family
moved to the UK
Education: Wimbledon College,
London; studied economics at Bristol
University; qualified as a chartered
accountant with Ernst & Young in 1981
Career:
1978 to 1984: Worked at Ernst & Young
where he qualified as an accountant.
1984-1989: Joined Heron International
where he was responsible for financial
planning
1991: Joined Conran Holdings
1995: Took over as chief executive of
Conran Restaurants in 1995
Family: Married, with two children
Lives: Wimbledon
Hobbies: Tennis, skiing and cricket
D&D owner plans
a dynamic future
D
ES GUNEWARDENA peers into
his wine glass and wrinkles his
nose. The chairman and chief
executive of D&D London has
invited me for lunch at the Angler, the
groups new seafood restaurant at
South Place Hotel in the City where
the sommelier is waiting for a verdict
on the wine.
Gunewardena, impeccably dressed
in a dark navy suit and a tieless white
shirt, has asked the sommelier to sur-
prise him but looks unconvinced by
the choice. He declares it too appley
before the sommelier disappears to
brush the dust off another bottle.
This attention to detail befits a man
running some of Londons most ele-
gant restaurants, including Coq
dArgent and The Grand Caf at the
Royal Exchange. And it also speaks vol-
umes about the far-reaching ambi-
tions the Sri Lankan-born 55 year-old
has for the business.
Gunewardena is in the process of
orchestrating the sale of a large chunk
of the restaurant group in a deal that
will pave the way for the next stage of
expansion.
LDC, the private equity arm of Lloyds
Banking Group, is the frontrunner to
acquire Sir Terence Conrans 51 per
cent stake, plus the 18 per cent owned
by private equity firm Caird Capital.
Gunewardena, however, has no
intention of cashing out just yet.
Management, led by himself and man-
aging director David Loewi, will retain
the 31 per cent stake they acquired in a
management buy-out in 2006.
It is a momentous period for the
group. The sale will effectively see Sir
Terence relinquishing his control of
the empire he founded two decades
ago. And it ushers in a new era for the
business under Gunewardenas con-
tinued leadership.
He wont say more about the deal
until the ink is dry expected to be
early in the New Year except that a
new investor will inject the fresh capi-
We are building
restaurants to last
several business
cycles... it shouldnt
matter when you
build them
D&Ds Des Gunewardena explains why a financial deal can only

help push his groups expansion forward. By Kasmira Jefford
REVIEW
SOUTH PLACE HOTEL
3 South Place, EC2M 2AF
020 3503 0000
By Steve Dinneen
T
HE MUSIC, man, it reminds me
of last night. It makes me want
to dance. These words are
probably not what you expect
to hear from the reception staff at a
new opening by D&D Group the
company behind Coq dArgent, Le
Pont de la Tour and The Grand Caf.
But the restaurant groups new
hotel, South Place, isnt like its more
formal siblings. Maybe its trendy sur-
roundings (it is only a few blocks
from Old Streets Silicon
Roundabout), have rubbed off on it.
When I checked in on a Saturday
night, the downstairs bar complete
with DJ was in full swing. The staff
were clearly enjoying it.
South Place has the unmistakable
Conran furnishings and minimalist
aesthetic (design maestro Terence
Conran may be selling his stake in
D&D but his influence clearly
remains) but there is more than a lit-
tle hipster thrown into the mix,
too.
My room was more trendy than ele-
gant, decked out in shades of grey
and accented by a (not unattractive)
bilious green. On the wall over the
bed was a portrait of an owl wearing
a hat East End hipsters would feel
right at home. My floor to ceiling
window (which, for a terrifying sec-
ond, appeared to open, sending me
into a vertiginous panic before I
realised it came with an irremovable
safety catch) looked down onto a ter-
race with an outdoor bar the site of
a burlesque show for the hotels
opening party.
I ate at the Angler restaurant at
the top of the building, which pro-
vides views across the City from win-
dows lining a jauntily angled wall.
The lobster and scallop ravioli were
delicious and the angler and lobster
pie not too shabby either.
South Place is not one to recom-
mend to your grandparents, but it is
perfect for the chic geeks checking
in to visit Silicon Roundabout. If
youre not averse to a bit of loud
music and pointedly hip dcor, this
comes recommended.
South Place is a haven for the
denizens of Silicon Roundabout
18
US markets up
on hopes of
economic deal
T
HE S&P 500 ended at its highest
level in almost two months
yesterday on rising hopes that
negotiations over the fiscal
cliff were making progress and that
a deal could be reached in days.
After weeks of stalemate, President
Barack Obama and Republican House
Speaker John Boehner met at the
White House, raising hopes that
Washington will be able to head off
steep tax hikes and spending cuts
that threaten the economy.
All of the S&P 500s 10 sectors were
higher, led by financials and other
growth-oriented sectors. The S&P
Financial Index gained 2.1 per cent,
while the S&P consumer discre-
tionary sector was up 1.8 per cent.
Investors worry the US economy
could slide into recession if the tax
and spending changes are implement-
ed so suddenly.
Boehner has edged closer to
Obamas position by proposing to
extend lower tax rates for everyone
who earns less than $1m. Still, his
position remains far from that of
President Obama.
Trumping everything right now
are the fiscal cliff talks. It seems like
progress is being made. I think its
getting to the nitty gritty, said Alan
Lancz, of Alan B. Lancz & Associates.
The Dow Jones industrial average
was up 100.38 points, or 0.76 per cent,
at 13,235.39. The Standard & Poors
500 Index was up 16.78 points, or 1.19
per cent, at 1,430.36, its highest close
since Oct. 22. The Nasdaq Composite
Index was up 39.27 points, or 1.32 per
cent, at 3,010.60.
In the financial sector, shares of
Bank of America rose four per cent to
$11. American International Group
shares rose three per cent to $34.95.
B
IG falls by temporary power firm
Aggreko and market heavyweight
Vodafone weighed on Britains top
shares yesterday as the final full
trading week of 2012 got off to a lacklustre
start.
Aggreko was the biggest percentage blue
chip faller, dropping 22 per cent after the
firm issued its second profit warning in
two months, saying there would be less
need next year for its generators.
Aggreko shares now trade just above 52-
week lows, crossing beneath its 200-DMA
(day moving average) without any major
support as investors remain bearish on the
stock, Rik Thakrar, risk manager and sen-
ior dealer at Spread Co. said.
The dealing floor has noted a flurry of
short selling activity in the stock, with
traders viewing current lower levels as a
consolidation point ahead of further falls
throughout early 2013, Thakrar added.
Volume in Aggreko shares was the
biggest on the blue chip board at over nine
times its 90-day daily average.
Overall FTSE 100 volume was relatively
thin at about three-quarters of the already
low 90-day daily average as the festive lull
approached. Volume was also strong in
Vodafone, at 160 per cent of its daily aver-
age, as the mobile phone firms stock shed
1.7 per cent, accounting for over five
points, or around half of the FTSE 100
indexs total decline. Vodafone suffered
after the Dutch state raised much more
than expected in its auction of fourth gen-
eration (4G) frequencies, pointing to high-
er costs for operators.
In London, the FTSE 100 closed down 9.61
points or 0.2 per cent at 5,912.15, albeit
bouncing off session lows below 5,900.
BESTof theBROKERS
AZ Electronic Materials SA
11Dec 12Dec 13Dec 14Dec 17Dec
p 370
365
360
355
350
345
344.23
17 Dec
AZ ELECTRONICS
Numis has cut the
chemical maker from
buy to hold, due to
lower than expected
growth and a weak
market for PCs, which has
not seen a boost by the
launch of Windows 8.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
5,950
5,940
5,930
5,920
5,900
5,890
5,910
5,912.15
17 Dec
Mytrah Energy
p 70
68
66
62
64
58
60
54
56
52
68.00
17 Dec
MYTRAH ENERGY
N+1 Singer has a buy
rating on the India-based
power producer after a
rise in revenues. The
broker had been hesitant
on the firms target for
this year, but concedes
that it has performed
significantly well.
Betfair Group PLC
p 780
770
760
750
740
730
723.00
17 Dec
BETFAIR
Morgan Stanley keeps its
overweight rating and
raises its target from
860p to 950p, expecting
to see the gaming firm
take market share in the
UK as it embarks on a
turnaround strategy.
Kleinwort Benson
Lucy Gazmararian has been
appointed head of investment
advisory at the private bank. She
joins from Goldman Sachs Asset
Management, where she was an
executive director. Gazmararian
previously held roles at Schroders
and began her career in
journalism.
Argonaut Capital Partners
Dennis Pellerito has been appointed head of UK sales at the
fund management firm. He joined Argonaut in July as head
of intermediary sales after five years with Neptune
Investment Management. Pellerito began his career at
Fidelity Investments.
SJ Berwin
David Huff has been appointed consultant to the law firms
tax and international funds practices. He joins from 3i,
where he worked for 24 years, most recently as director of
tax. Huff is also a former chairman of the BVCA, the private
equity and venture capital trade body.
JP Morgan Private Bank
The private bank has appointed two executive directors to
its London-based Russia team. Darius Daubaras was
previously a director at BNP Paribas, and has also held roles
at Citigroup, Credit Suisse and Merrill Lynch. Anatoly
Crachilov joins from HSBC Private Bank, and has also held
roles at Troika Dialog.
Westhouse Securities
The corporate and institutional broker has appointed
Harinder Sandhu to its institutional sales desk. He joins from
GLG Partners, where he was an asset manager in its UK
alpha select team. Sandhu has also held senior roles at UBS
Global Asset Management.
Baker Botts
The law firm has announced two appointments to its
banking and finance division. Stuart McIntyre is promoted to
the partnership. Matthew Hinxman joins as special counsel
from Norton Rose.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
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Aggreko sinks on profit warning as
Vodafone is hit by high 4G pricing
D
AVID Cameron often says
that growth is the coalitions
priority. Yet the 2010
Comprehensive Spending
Review stated its priorities
included aid, the NHS, fairness and
social mobility. Clearly, some of these
will directly conflict with the growth
agenda. Public policy inevitably
entails trade-offs.
We should therefore be suspicious
about policies that supposedly
produce the double dividend of
satisfying two different social and
economic ends at once. Take
redistribution programmes. Many
claim that transferring funds from
rich Peter to poor Paul stimulates the
economy and creates jobs. After all,
poorer people are more likely to
I
T IS shocking, isnt it? Despite UK
sales of 7.6bn between 2009 and
2012, Amazon paid almost no
corporation tax to the UK
Treasury. Starbucks has not paid
UK corporation tax in 14 of the past 15
years.
Big corporate interests, it seems, are
not paying their fair share of tax. An
open and shut case of corporate greed,
you might think. Both the chancellor
and the Public Accounts Committee
seem to agree. Such immoral and
unacceptable tax avoidance by
multinational companies must be
stopped. And when all the politicians
agree, they must be right? Yes?
Well actually, no. When everyone in
Westminster agrees about something,
it usually means that the rest of us
should think again.
Are the low rates of tax that big cor-
porations are paying evidence of cor-
porate wickedness on an industrial
scale? There are plenty of government
officials happy for us to think so, and
plenty in the UK Uncut mob quick to
shout about the need to make corpo-
rations pay.
cityam.com/forum
Unless government
introduces Albanian-
style isolationism, firms
will increasingly pay less
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
20
DOUGLAS CARSWELL
Politicians are powerless to curb
our shrinking corporate tax base
But what we are witnessing is not
merely a matter of clever corporate
lawyers exploiting tax loopholes. If it
was, then ask yourself why no govern-
ment has shut them.
Politicians still see this problem in
terms of tax rules that need changing.
But its actually a case of a changing
tax base. The tax base, once so solid
and dependable, is becoming more
fluid.
A generation or two ago, wealth was
made when things were manufac-
tured or mined. If the state wanted to
raise revenue, it needed to tax factories
what they produced and those who
worked in them.
But in the digital economy, added
value increasingly comes not merely
from making things, but from the
added intellectual value.
In 1980, the Ford Motor Company
had half a million employees in the US
paying tax; Bethlehem Steel over
100,000. Today Google, with a market
capitalisation five times that of Ford,
has a mere 17,000 on the payroll.
Bethlehem Steel does not exist.
Not much of a tax base, is it?
In the modern economy, the high-
value bit, to put in crudely, lies in intel-
lectual property rights. Supposed tax
avoidance is really a debate over which
tax jurisdiction intellectual property is
being exploited in. Holland or the UK?
Europe or the US?
As tax officials soon discover, when
trying to close those mythical loop-
holes, intellectual property is mobile.
You might struggle to move a mining
operation or factory from one tax
regime to another. Intellectual proper-
ty can move as quickly as an email.
Louis VIXs tax minister, Jean
Baptiste Colbert, once described taxa-
tion as the art of plucking the goose
to obtain the largest amount of feath-
ers with the smallest amount of hiss-
ing. The trouble for latter day
Colberts is that, in the modern econo-
my, more and more geese are able to
take flight.
What the politicians would like us to
see as evidence of tax avoidance is in
fact evidence of tax migration. In the
digital economy, it will happen more
and more no matter what the tax
rules say.
Blaming those who move intellectu-
al property from one jurisdiction to
another for not paying enough tax is a
bit like blaming migrating birds for
wanting to avoid winter. Only an odd-
ball might hold it against them.
Of course tax officials feel frustrated.
Treasury officials would like a general
anti-tax avoidance rule. Instead of tax-
ing businesses on the basis of pre-
defined rules, which specify how
much tax is payable and under what
circumstances, this kind of arbitrary
arrangement would enable tax collec-
tors to bill firms what they think they
ought to be paying.
Perhaps this draconian and ill-con-
sidered measure merely underlines
how no set of tax rules, however com-
plex, can get to grips with the fact that
the source of wealth in the digital
world intellectual property can
move.
Unless governments are prepared to
embrace 1950s Albania-style isolation,
businesses will inevitably find it easier
to transact business in a way that
reduces their tax bill.
But if the tax base turns out to be a
river that can flow away, you ask,
how are governments going to man-
age to raise revenue to pay for all the
things that governments do?
How indeed. Perhaps they wont.
Without a dependable tax base, maybe
the era of Big Government is over.
Douglas Carswell is Conservative MP for
Clacton.
consume, so the transfers raise
aggregate demand. Increasing state
benefits is therefore not only morally
right, but economically beneficial.
But what if the exact reverse is
true? What if increasing peoples
income streams through transfers
actually increases unemployment?
Redistribution Recession, a recent
book by professor Casey Mulligan,
concluded that redistributive
interventions in 2008-09 account for
half of the large fall in the USs
labour participation rate. As
eligibility for programmes like food
stamps and unemployment
insurance increased, the annual
average payoff for not working rose
from $10,000 (6,172) in 2007 to
$16,000 in 2009, falling back to
$14,000 in 2011. This was inversely
related to the path of working hours.
And the fall in working hours was
only partly a demand issue many
industries maintained output, but
simply substituted away from labour
to other production inputs.
By discouraging work, hand-outs
make labour more expensive by
reducing its supply. The unemployed,
or those in low paid jobs, face higher
marginal tax rates when deciding
whether to work more. They have to
weigh up the benefit of any extra
income against the costs of paying
taxes and losing benefits. Mulligan
finds many examples of Americans
whod now be worse off in work.
Iain Duncan Smith is grappling
with similar issues in the UK. The
present welfare system can lead to
marginal deduction rates as high as
96 per cent, meaning that some keep
just 4p of every extra 1 earned.
500,000 families see rates of well over
80 per cent.
The introduction of the universal
credit next year aims to streamline
the myriad of different benefits. It
will provide significant incentives for
the unemployed to find jobs, by
treating in and out of work benefits
the same. But those already in work
could still face marginal tax rates,
including benefit withdrawal, of well
over 70 per cent.
Its important to understand,
therefore, that welfare entails a
trade-off. Providing a more generous
safety net for a decent standard of
living for the poor may be the right
thing to do. This, of course, raises
their static living standards and
affects the composition of goods
demanded. But we shouldnt forget
that the same policy harms
incentives and makes it harder for
poor families to earn more money in
the future.
Ryan Bourne is head of economic
research at the Centre for Policy Studies.
FRONTLINE
ECONOMICS
RYAN BOURNE
The welfare trade-off: Why raising benefits doesnt boost the economy
MORNING UPDATE
A.M.
21
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Banking union
[Re: European banking union will be no
friend of vibrant financial services,
Thursday]
If Europes banks are going to be regulated
under one umbrella, the financial sectors of
smaller countries will likely find themselves
stifled. The inclination for a European
regulator will be to impose the level of
regulation that is already in place in the
most regulated often largest EU
countries. European regulations have
already had the same effect on business
more broadly. Big business likes the EU
because restricted markets prevent smaller
firms from challenging their dominance.
And so the sooner Britain is out of the EU,
the happier I will be.
HelenaPiggott
British retail
[Re: As more Christmas shoppers chose to
buy online, can the British high street
survive?, yesterday]
Theres no such thing as the British high
street. As anyone will tell you, smaller
independent shops either struggle to cling
on to decaying residential areas or thrive in
gentrified and prosperous parts of the
country. Otherwise, most people either shop
online or go to large complexes like
Westfields. But there doesnt need to be
some artificial division between online and
instore. Some firms are already adapting.
Its interesting to note that Argos is radically
changing its retail experience by getting rid
of physical catalogues in its shops, and using
web-based panels instead.
MatthewRichards
S
UPERSTORM Sandy was 2012s
reminder of the damage
caused by natural disasters. It
hit within a few of months of
the anniversary of the Thai
floods in 2011, which killed over 800,
made millions homeless and
inundated the business parks that
underpin the countrys economy.
Knock-on global supply chain
disruption forced Honda and Acer to
cut production, and the World Bank
put the total cost at $45bn (27.7bn).
Only $12bn was insured.
In 2011, it was an extraordinary year
for natural catastrophes, and Im
increasingly uneasy about how well-
prepared governments and business-
es are to face disasters. Their
vulnerability was highlighted by a
recent Lloyds global underinsurance
report. Analysis by the Centre for
Economic and Business Research
thew up an alarming underinsurance
deficit of an annualised $168bn in 17
out of 42 countries eight of them in
Asia, a region many assume will lead
an eventual global recovery. China is
a particularly extreme case. The eco-
nomic cost of the Sichuan earth-
quake in 2008 was $125bn. Insurance
covered less than $400m. This isnt
sustainable.
Closing the gap boils down to trans-
ferring the cost from government to
industry using the insurance indus-
try to pick up more of the financial
cost. We exist to pay claims, and last
year global insurers paid out $107bn
globally. But extending our reach into
underinsured economies will require
us to better understand new risks and
to compile the data and models to
price them effectively.
Wed also like to see governments
share data more freely. Industry-led
initiatives like Oasis, of which Lloyds
is one of the founding sponsors, will
launch next year to provide an open
marketplace for models and data.
TOP TWEETS
I see Nick Clegg is in desperado mode, trying
to win back votes. His reckless promises
before the election couldnt be met.
@Mike_Fabricant
Nick Clegg is right to repeat his support for
ending universal benefits for wealthy
pensioners. Theyre hard to justify.
@bmitchellwrites
Stripping benefits from better off pensioners
disincentivises saving for future. More
means-testing means less self reliance.
@rosaltmann
Economic irony: US banks are calling for
Basel III relaxation, when their own
regulators are penalising foreign banks.
@vignesh178
Will US politicians be able to broker a deal by
the end of the month to avoid the fiscal cliff?
YES
We see a 90 per cent chance that a temporary extension will be
agreed before the end of the year. But every day of inaction lowers
this estimate. In the latest twist, the Republican House speaker
John Boehner has suggested an increase in taxes for incomes over
$1m (620k). While this is positive, it is still much higher than the
$250,000 proposed by Barack Obamas camp, and would still
leave a gaping hole in reaching the Presidents $1.4 trillion revenue
target. As such, the divide between the two camps remains
significant. If an agreement was not forthcoming and the US fell
off the cliff, it would prove highly disruptive for both the markets
and the global economy. In this scenario we set a 90 per cent
probability that retroactive legislation will come into effect in early
2013, which would help to reverse part of the fallout from the cliff.
Michala Marcussen is global head of economics at Societe
Generale Corporate & Investment Banking.
Michala Marcussen
NO
Grover Norquist
The strongest reason to believe President Barack Obama will
deliberately drive America over the fiscal cliff is that it serves his
interests. Beginning on 1 January 2013, five major tax increases
for Obamacare totalling more than a trillion dollars begin to bite.
Thousands of pages of regulations written over the past four
years will now slam the economy like a hailstorm. And Obama
has no intention of reducing his ongoing spending spree. Higher
taxes, more regulations and more spending dropped atop an
already weak economy is a recipe for another recession. How
better to hide this than to drive America over the fiscal cliff,
bringing some of the $500bn (310bn) in tax hikes back, and to
spend the next four years replacing George Bush with fiscal
cliff when whining about how the recession is not Obamas
fault.
Grover Norquist is president of Americans for Tax Reform.
RAPIDresponses
Insurance deficits
leave the world at
risk of catastrophe
But we also need to encourage soci-
eties to mitigate risks and, critically, to
adapt to a more uncertain climate.
Some are already planning for the
long term. After the Sichuan earth-
quake, Chinas government rebuilt to
a higher standard. Engineers in New
Zealand are implementing structural
lessons after its 2011 earthquake.
An established insurance market
can help with this. The best result for
insurers and clients is to minimise the
impact of any disaster. In this vein,
some travel insurers recently decided
to insist that skiers wear crash hel-
mets. Reducing casualties on the
slopes reduces potential claims. But
isnt this good for everyone?
On a macro level, insurers stimulate
safety by casting a second pair of eyes
over risk management. This leads to
more resilient communities. But
insurers cant do this alone.
Governments need to invest in flood
defences, for example, and establish
strong building codes. This debate is
currently playing out between the UK
government and the Association of
British Insurers, and it is essential that
they reach agreement.
With global economic recovery
uncertain, businesses and insurers
need confidence that they can with-
stand disaster. How do they get this?
They can invest in mitigation and pro-
tect their assets through transferring
risk. Or they can take a gamble. Do
you feel lucky? Can you afford another
2011?
Richard Ward is chief executive of Lloyds
of London.
RICHARD WARD
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22
cityam.com
U
S BANKS are staging an
eleventh hour appeal to have
the implementation of Basel
III delayed from its 1 January
2013 deadline, arguing that they
would need to bolster their
balance sheets with an additional
$800bn (493bn) in core capital
assets under the new framework.
But while there may be some
protests, and the date may be
pushed back, the changes con-
tained within Basel III will eventu-
ally go through and shift the way
that banks are capitalised. And
although it may give banks a
headaches, it could be good news
for goldbugs.
CHANGED ATTITUDES
What the Basel Committee on
Banking Supervision (BCBS) says
isnt binding, but as a supranation-
al committee of the central banks
of the group of ten, when it tells
the banks to jump, they ask how
high? In the first two Basel
accords, gold could be treated as
capital, but as only a tier three
asset, meaning that just 50 per
cent of its market value could be
treated as bank capitalisation. This
classed gold not as an alternative
currency but, in terms of capital,
instead put it just above a pile of
old computer monitors that could
fetch some cash on eBay if push
came to shove. At the top of the
pile, and treated as core capital and
100 per cent convertible, were gov-
ernment treasuries, mortgage-
backed securities and cash. Clearly,
the events of the last half a decade
have demonstrated that, when the
markets slide into a crisis, mort-
gage-backed securities cannot be
considered freely convertible to
cash at face value.
But with the coming of Basel III,
gold is now considered as tier one
Capital classifications
will give gold a boost
The changes will be good news for gold bugs
Though it may be
delayed, Basel III
will support prices,
writes Craig Drake
TRADING MANAGEMENT WEALTH
THE TIPSTER
STEADY AS SHE GOES
S
HARES in cruise operator
Carnival are up by over 14
per cent over the last year. Its
earnings conference call on
Thursday will confirm that
bookings have held up well. The
company has also commissioned new
ships, adding to its burgeoning fleet.
It may not be entirely plain sailing
going forward but, for now, the course
seems to be steady as she goes. IG
quotes a price of 2,454p-2,460p for
Carnival.
The long-running Sportingbet
takeover saga could be concluded
today, ahead of its annual general
meeting tomorrow. William Hill has
lowered its offer price, following last
months poor trading update.
Sportingbets share price has also
come under pressure after rival Betfair
withdrew from some European
countries, highlighting the difficult
trading conditions that lie ahead for
online betting companies. Spreadex
quotes a price of 48.32p-49.18p for
Sportingbet.
Shares in London Stock
Exchange may be dragged lower,
when it reports tomorrow. After a
strong first quarter, traders expect the
stock exchange to report lower
trading volumes. However, there will
also be focus on its acquisition of
LCH.Clearnet, and traders will look to
the management to gauge how
quickly a deal can be completed. ETX
Capital quotes a price of 1059.62p-
1064.38p for London Stock Exchange.
Dixons Retail has positioned itself
for a white Christmas, and traders are
expecting sales to snowball over the
holiday season. The demise of
competitor Comet has amplified
footfall in its stores, and the retailer is
one of the top risers of the year, with
shares up by almost 180 per cent over
the last 12 months. Spread Co quotes
a price of 27.84p-27.89p for Dixons
Retail.
YOGESH CHANDARANA
portable and divisible store of
value. If the Mayan calendar is
almost correct, and the world is
destroyed on Friday save for a few
dozen people, it is likely that you
would be able to use your gold
holdings as a proxy to barter for
food and water. But while govern-
ments and individual investors are
quick to buy gold in times of finan-
cial instability, the regulations
reducing gold to tier three capital
and assuming 50 per cent of its
face value may have suppressed
institutional demand.
Daniel Fisher, chief executive of
Physical Gold, is understandably
bullish about the effects of Basel III.
Banks realise that a fast depreciat-
ing dollar does nothing for their
reserve levels and only gold can
provide a reliable store of wealth,
says Fisher. Im sure banks have
also been tempted to shift their
reliance on holding paper currency
as capital but the traditional tier-
ing ratio has prevented this. Now
they have a compelling reason to
re-address this balance and we
dont believe the delays to imple-
menting the bank capital rules will
change this.
Even if the shifting focus does not
lead to a net increase in institution-
al gold purchases, it will at least
stop banks from liquidating gold
holding to buy up government
bonds or hold cash. And if that hap-
pens, gold will hold firm in 2013.
capital and a 100 per cent loan-
backing reserve. The new regulato-
ry framework will consider gold as
equivalent to cash or bonds and a
de facto currency.
PROPHETS AND PROFITS
Warren Buffet has long been dis-
missive of gold and other precious
metals as an investment asset.
Famous for his dividend focused
investment strategies, Buffet has
quipped: you cant eat gold. But
on the other side of the fence, a
higher authority than even the
Oracle of Omaha, in Isaiah 1:22 the
prophet admonishes: Thy silver is
become dross, thy wine mixed
with water.
BANK HOLDINGS
Clearly the debate will rage on and
on. But the Basel Committee on
Banking Supervision has implicitly
sided with gold as a currency in
Basel III. But just how much of a
difference will it make to gold
prices?
You could argue that banks will
have little incentive to go to the
gold markets, and will instead use
the changes to use existing gold to
meet the higher liquidity require-
ments, but at the full 100 per cent
of the market face value rather
than the 50 per cent at its old tier
three status.
But this is to neglect the draw of
gold it is the ultimate liquid,
www.gftuk.com
THE MARKETS DONT SLEEP
DURING THE FESTIVE PERIOD
twitter.com/gftuk facebook.com/gftmarketsuk
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
NEAL GILBERT
SENIOR MARKET STRATEGIST, GFT
O
VER the Christmas period, equity
markets are often seen as offering
slim pickings for spread bet and
contract for difference traders.
Granted, theres the prospect of a
Santa rally, but otherwise the FTSE-100 index
tends to end up trading in tight ranges as
volatility ebbs away. Underlying volumes are
low, traders generally arent at their desks,
and many are resigned to leaving investment
decisions until the New Year. Earnings news
is sidelined and the fundamentals are also
thin on the ground, knocked further by the
run of market holidays. But closer inspection
shows that this assessment isnt universally
true. This time of year can often throw up a
bright star, especially if you look East.
During the period between 20 and 31
December, Eurasian Natural Resources
Corporation (ENRC) and Kazakhmys, the
mining companies, have both seen their
respective volatility rise to between two and
three times that of the underlying index.
Obviously were dealing with a relatively
small sample set, and both companies have
only been part of Londons top flight index
for the last few years. But the pattern follows
if you look elsewhere in the mining sector.
Fresnillo, the worlds largest silver producer,
has also shown itself to be another volatile
player around Christmas during its short
tenure on the FTSE-100. Vedanta also adds
its own lines to the story.
Is there anything that can explain why
these resource companies manage to stand
out at this time of the year? Arguably, theyre
always at the more volatile end of the
spectrum, as their prices are clearly
correlated with the raw materials they have
rights over. Any abnormal behaviour in the
price of the underlying commodity clearly
has the potential to skew the companys
perceived valuation. And with the
proliferation of automated trading systems
they certainly dont need time off over
Christmas its easy to see how choppy
movements in something like the price of
copper might translate into the valuation of a
firm with huge quantities of that material
under the ground.
So what about the other end of the range?
Its perhaps no surprise that the defensive
plays win out. Severn Trent, Pennon, GSK
and Unilever have historically or for the last
decade at least tended to see less volatility
than the benchmark index during the final
third of December. Unless theres any
extraordinary factors at play, if youre hoping
to make a quick profit in the dog days of
December from a share thats going to be
jumping round like a three year old on
Christmas morning, you probably want to
give these stalwarts a wide berth.
Beyond these two opposing ends of the
volatility spectrum, recent history suggests
theres little to differentiate the rest of the
market at this time of year. There is one thing
for sure, however. Theres no need for
investors to resign themselves to a week of
eating chocolates and watching Christmas
films on TV. Even though common lore may
suggest otherwise, the markets never really
sleep.
KAZAKHMYS SHARE PRICE, CHRISTMAS 2011
2011 5 Dec 12 Dec 19 Dec 26 Dec 30 Dec
980
960
940
920
900
880
860
For more information on which markets will be
closed during the Christmas and New Year period,
please visit: http://www.gftuk.com/Range-of-
Markets/Market-Information-Sheets/Public-Holidays
n UK equities closed:
12:30 24 December till 08:00 27 December
n US equities closed:
n Germany equities closed:
n UK 100 index (cash) closed:
12:30 24 December till 08:00 27 December.
n Spot Brent crude oil closed:
n Spot gold closed:
CHRISTMAS MARKET
CLOSURES
CNBC
COMMENT
LOUISA BOJESEN
Many hope Angela Merkel will get less coverage in the new year
practical if they hold sterling or UK
bonds, theyll probably see reason to
keep them. Among bond profiles, the UK
has a relatively long duration, and that is
encouraging. This means the UK doesnt
have to come to the market as frequently
as other countries.
In my very unscientific method of ask-
ing guests what they think about equi-
ties, most reply that they think global
stocks will continue to outperform other
assets. Bank of America Merrill Lynch
says policy support, reasonable valua-
tions, and diminishing tail risks will all
help to make equities the best perform-
ing asset class in 2013. Franklin adds that
the shift back towards equities from
bonds will take place as economic recov-
ery gains pace, and the prospect of high-
My pick: Short Aussie-yen and euro-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days
I closed a long dollar-yen position at 84.15, booking a gain of
4.3 per cent. Given the results of the Japanese elections, I then
flipped the position, going long on yen. The futures market
shows that traders are currently the shortest theyve been on
yen since July 2007, making the short position very crowded.
With the euro fundamentally weak and the Aussie at yearly
highs, I find that both Aussie-yen and euro-yen look favourable
as potential short positions in the near term.
ANALYST PICKS
Looking ahead to the 2013 markets
I
F WE have to go through 2013 in
a similar vein to 2012, with a
record number of Eurogroup,
Ecofin, Euro summit, and
FinMin meetings, my patience will
be severely tested. Its about time we
moved on from over-analysing
upcoming banking unions or aid
packages. We need to return to a
sense of normality, and to make
business decisions based on
investing, rather than reacting
through short-term trading.
But predicting the year ahead can
be tricky. To help me out, I asked
Mike Franklin, head of investment
strategy at Beaufort International,
how hes feeling about 2013. To sum
up, there are no free lunches.
According to Franklin, economic
recovery will continue in the US and
China, while Europe will lag behind.
In turn, if Europe doesnt recover
quickly enough, theres a real possi-
bility the UK will lose its AAA credit
rating, though the market impact
would be limited. People will be
STRATEGIST
ILYA SPIVAK
My pick: Long Canadian dollar-yen (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I am looking to enter long on Canadian dollar-yen to capture the
impact of the Feds easing on Canadas economy and the Bank of
Canadas monetary policy, coupled with the election of Shinzo
Abe as Prime Minister of Japan. Abe wants to push the Bank of
Japan into open-ended easing, with an inflation target of 2 per
cent. I will look for a pullback from resistance at 84.95, and
position for attractive buying opportunities near downside
barriers at 82.88, 81.26 and 80.00.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short New Zealand dollar-yen and Aussie-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
Last weeks long position on Canadian dollar-yen, and short
position on Aussie dollar-New Zealand dollar have worked well.
My focus is now on potential corrections in overdrawn moves.
Going short on Aussie-dollar from $1.05 seems appealing. I also
like the idea of going short on the New Zealand dollar-yen, which
I believe is one of the most overextended currency pairs. And on
the back of the yens structural shift, I like a long position on
dollar-yen, after the pair has pulled back to 82.50.
er interest rates grows.
In its 2013 outlook, BlackRock
Investment Institute says caution is
the watchword, and that fixed income
investors especially must look out.
BlackRock favours emerging market
debt and, in Europe, the investment
management group prefers Italian
and Spanish bonds over the debt of
weaker core countries.
When looking at commodities, Bank
of America thinks 2013 might be the
year gold rises to $2000 per troy
ounce, given its use as a hedge against
macro and inflation risks in light of
policy easing by the Fed and the
European Central Bank. Franklin
takes a slightly less optimistic line.
There are signs that the 13 year gold
advance may be running out of steam,
as investors choose to shift to equities.
Personally, I predict markets will go
up a bit in 2013, and then down a bit,
and then up a bit, etc. Because they
always do.
Louisa Bojesen is anchor of European
Closing Bell on CNBC.
23
cityam.com
TRADING
CURRENCY STRATEGIST
CHRIS VECCHIO
LIFE&STYLE
24
cityam.com
HEALTH
K
HALID ISMAIL is a British-
Moroccan Mixed Martial Arts
(MMA) fighter who has
trained in contact fighting
since he was five years old. He came
through injury and adversity to
cement himself as one of the UKs
top fighters. He tells us why MMA is
a great way to get fit.
DO YOU THINK THERE HAS BEEN A RISE IN
MMA POPULARITY?
MMA is probably the fastest growing
sport in the world today. Its already
huge in the US, but every year its
getting bigger and bigger in the UK.
Itll continue to grow as its an
exciting sport to watch, but at the
same time its very technical.
HOW DO YOU SEE MMA?
MMA is a good metaphor for life it is
about struggle and respect and
when the time is right, you have to
attack with everything youve got and
never give up. I always have respect
for my opponents and dont make my
move until the time is right.
YOU SUSTAINED A HORRIFIC BICEP
INJURY THAT SAW YOU OUT OF ACTION
FOR QUITE A WHILE. WHAT HAPPENED?
I was getting ready for my third
fight last year and was in good
condition, but on my last sparring
session, as I threw my training
partner wrestling, I heard a very
loud snap in my arm. I looked
down at my bicep and realised the
whole muscle had detached, and
was near my shoulder. Being a
fighter, and just being the way I
am, I decided my injury was a
blessing, and I wasnt going to let it
get me down. I had surgery and as
soon as I arrived home, I went for a
power walk to make sure I
understood that while my arm was
injured, the rest of my body was
still functioning fine. I could still
train safely and correctly while
rehabilitating my arm and I had to
train myself mentally.
YOU WON YOUR COMEBACK FIGHT HANDS
DOWN HOW DID THAT FEEL?
It was great getting back into the
cage and doing what I love.
Winning a fight is always special
but this was extra special due to the
long, injury-induced lay-off.
YOU TOOK UP MARTIAL ARTS AS A RESULT
OF SUFFERING WITH ASTHMA AS A CHILD
DID IT IMPROVE YOUR CONDITION?
Yes. My GP recommended to my
mum that she encourage me to try
some sort of sport, so thats exactly
what she did. I think it did help
with my asthma, but more so
with my confidence I wasnt afraid
to participate in sport and, even if I
struggled, I learnt not to give up.
WOULD YOU RECOMMEND MMA TO
ANYONE WHO WANTS TO FEEL SAFER
WALKING HOME AT NIGHT?
I think Mixed Martial Arts is
brilliant for anyone that wants to
learn how to defend themselves. It
suits any body type and gender, and
works for any individuals level of
strength because it combines such a
mix of different arts and skills.
WHAT DO YOU THINK ABOUT WHITE-
COLLAR BOXING?
White collar boxing is great most
mixed martial artists have some
sort of background in a base-sport
like boxing or wrestling. Boxing is a
huge part of MMA so I think its
growth in every community should
be supported.
WOULD YOU RECOMMEND MMA TO THE
STRESSED OUT, FRUSTRATED EXECUTIVE?
MMA is a great workout for stress
release as you get to channel your
anger by hitting and throwing
things, which releases tension in a
controlled environment. The
strength and conditioning part of
MMA training will help release
endorphins that will keep you
smiling long after your workout.
WHAT WOULD BE YOUR TOP TIPS FOR THE
TIME-POOR CITY WORKER WHOD LIKE TO
GET IN THE CAGE?
The time-honoured little and
often works in this scenario. If you
get a good trainer, theyll be able to
devise workout plans that will have
plenty of quality, so you wont have
to worry too much about quantity.
DO YOU THINK GOOD FIGHTERS ARE
BORN OR MADE?
I think fighters are born and then
champions are made, through hard
work, dedication and desire.
Ismail runs the LDG gyms in North East
London. For more information visit
khalid-ismail.com or
Cage fight your way to a
healthy mind and body
Where to try your hand (and elbow and knee) at MMA
FIT IN
THE CITY
LAURA WILLIAMS
FITNESS & DIET EXPERT
TWITTER: @LAURAFITNESS
WEB: LAURAWILLIAMSONLINE.CO.UK
Mixed Martial Arts is shedding its violent image and growing in
popularity. Laura Williams catches up with leading British
fighter Khalid Ismail to talk injury, asthma and stress relief.
New Wave Academy covers all
aspects of mixed martial arts and
is heralded as one of South
Londons premier gyms. With
only one MMA class a week, its
not somewhere to go if you want
to explore the sport in depth but
if youre after an introduction, its
a great place to start.
new-wave-academy.com
Lewis Sports Centre, Maberly
Road, Crystal Palace, SE19 2JH
07956 951 133
Prices start at 30 for
membership plus 5 per session
NEWWAVE ACADEMYMMA
Nestled in a quiet courtyard in
Kings Cross, the gym is within
close proximity to the City and
offers over 70 classes a week.
The sessions are delivered by
world-class instructors in
comfortable, modern
surroundings. When youre done
working up a sweat, members
can relax in the sauna or juice
bar.
urbankingsgym.com
4 Bravingtons Walk, Kings Cross,
N1 9GA. 020 787 7774
Membership starts at 99, 15 a
class
URBAN KINGS
If you plan on taking up mixed
martial arts as a serious hobby,
theres no place like London
Shootfighters. The gym is a
favourite among top competing
athletes and is the place to be if you
intend to take the discipline to the
highest level. Its the worlds largest
MMA gym and has just about every
gizmo you could hope for.
londonshootfighters.com
Royal Leisure Park, Great Western
Way, Park Royal, W3 0PA
Prices for a single class starts at 12
Membership packages from 195
LONDON SHOOTFIGHTERS
KO MMA is part of the famous KO
Gym Group, and while its known
primarily for Murray Thai, its
quickly gained a reputation for
being one of the best-mixed
martial arts destinations. So
whether youre after self-defence
techniques or simply want to
shift the pounds and get fit,
theres something here for you.
ko-mma.co.uk
Unit 102, Day Lewis House
324 Bensham Lane, Thornton
Heath CR7 7EQ
020 8665 7787
Prices start at 10 a session
KO MMA
Former MMA champion Khalid
Ismail (see left) trains himself
and other pro fighters at the LDG
Fitness Centre in Chadwell Heath,
which he founded in 2006 after
becoming disillusioned with the
approach of more mainstream
clubs. The gym promises a
friendly, affordable high quality
establishment in which to train.
ldgfitnesscentre.com
13BridgeClose Romford, RM70AU
01708 740011. An access all
areas membership costs 80 a
month and all classes are free
LDG FITNESS CENTRE
The Villa Saletta vineyard in Tuscany, owned by Guy Hands (inset) is producing some very fine wines indeed
25
I
WAS once told that the finest
luxury a man can have is an
opera house in his garden
oddly enough by a man who
had exactly that. If that is true
then having your own vineyard
must come a close second. Thats
what Guy Hands has done and no
ordinary vineyard either.
Hands, of course, is one of the
countrys most
recognisable
financial figures
founder of Terra
Firma,
swashbuckling
investor and the
brains behind some
of the most
audacious deals of
the past two decades
(as well as the
occasional miss such
as EMI). But a little-
known fact about him is that he
also owns an estate in Tuscany,
complete with a 50-acre winery
thats starting to produce some
really rather stunning wines.
I wouldnt describe it as a
luxury, more as an expense, says
Hands, who has patiently invested
in Villa Saletta for almost a decade.
He originally bought the estate
with his wife Julia to develop a
small number of luxury villas in its
historic buildings, but the property
came with its own land and its
own vines.
They had been making wines on
the land since before the Romans,
in Etruscan times, he says. So we
thought we would give it a go.
But Hands is not someone to do
anything by halves. Rather than
brew up a few demijohns of Vino
Ordinario in the cupboard under
his stairs, he set himself the target
of making one of the finest wines
in Italy, opting to produce a Super
Tuscan wine, rather than a local
Chianti or the like.
Super Tuscans are both highly
expensive and highly difficult to
make. Rather than use local grape
types, he uses the same trio found
in Claret Merlot, Cabernet
Sauvignon and Cabernet Franc
but grow them in the brutally dry
heat of the Tuscan hills. The result,
if you can get it right, is a
wonderfully intense wine, full of
fruit and structure. The most
famous of the super Tuscans are
cult wines like
Sassicaia and
Solaia, which
can sell of
upwards of
150 a bottle.
We chose
to make a
Super Tuscan
because it is a
style I
personally like
and it offered
an attractive
business case. Typical to form,
Hands had set himself a towering
challenge but one with a
substantial financial rewards at
the other end if he gets it right.
He hired Jonathan Rodwell, an
Englishman and one of the worlds
top wine-makers, with a pedigree
that stretches from California to
France and even Chile. He in turn
planted the vines in nine fields
across 50 acres and created a micro
winery that today makes 50,000
bottles.
Interestingly, this a business
that, apart from Rodwell, is
almost entirely staffed and run by
women. When we started, we
found the local men would always
want to do things their way, the
way they had grown wine for
centuries, but we needed to prune
and harvest very differently. The
women were better at adapting,
says Rodwell.
The key question is: what are the
wines like? Hands and Jonathan
laid on a tasting for City A.M. in the
shadow of the Shard a couple of
weeks ago and the results were
really rather impressive. First, as a
nod to local customs, there is a
Chianti Riserva, which would more
than hold its own against
established competition. Then the
Chiave, a predominantly Merlot
wine that is designed for easy
drinking again nicely made but
not worth writing home about.
Things get more serious with the
two top wines: the Borgo Saletta
and the Saletta itself, the estates
top wine. Both are impressive but
the Saletta (I drank the 2005) takes
the honours. This is a powerful
wine with a lot of fruit and great
depth and complexity; one of the
most delicious wines I have drunk
all year. Everyone tasting it was
bowled over.
Villa Saletta has been keeping its
wines quiet while Hands and
Rodwell perfected them its not
even easy to buy them in the UK
since you have to apply by email on
their website for a price list.
Now, though, it appears the
world is going to hear more about
them. Rodwell is beginning to
enter them for a number of
competitions and the medal haul is
growing. Soon he may ask the all-
powerful Wine Spectator to rate
Saletta.
This means there may be a short
window to pick up these wines at
extremely reasonable prices. The
Chianti currently sells for just 11,
the Borgo Saletta for 14 and the
Saletta for an astonishingly
reasonable 28 a bottle, with
discounts when you buy by the
case (the only snag here is the
minimum order is three cases).
Hands accepts the current prices
cant last. "At the moment we
could sell every bottle we make
and still make a loss", he says. But
as the wine world learns what he
has been doing on a distant Tuscan
hillside, I suspect that picture will
change rapidly and this will
become another of his profitable
ventures.
To buy wines from Borgo Saletta, visit
the villasaletta.com and email your
enquiry using the contact us section.
Guy has his Hands on some fine wine
City A.M. resident wine buff Neil Bennett
catches up with renowned financier and
surprise wine-extraordinaire Guy Hands
They have been
making wines on this
land since the Romans
in Etruscan times so I
thought, why not?
O
NE OF the things I love
about the festive period is
the opportunity to do very
little cooking at home. Yes,
there is the main Christmas Day
meal to be prepared and perhaps
some party food for evenings with
friends. But after all that, I relish
being able to graze on cold meats
and cured fish, snack on cheese
and generally just enjoy one long
picnic of leftovers and easy
seasonal treats from Boxing Day
until New Years Eve.
If you want hassle-free seasonal
fare, here are my top picks:
A truckle (a wheel of cheese) of
some very good, strong cheddar or
stilton, or alternatively some
Lancashire or Stichelton which
both are in season now, as well as
some really stinky cheeses. For
something different why not try
Vacherin, a cows milk cheese
which really comes into its own at
this time of year. Having a truckle
on the table is a great way to share
with friends and family who can
just scoop out what they want it
should see you through the whole
festive period.
A good selection of smoked,
cured or potted meat and fish
(such as gravadlax or smoked
trout), dried sausages, cured ham
or a terrine of pate, and a stock of
pickled vegetables and chutneys.
All these will last a long time,
minimising the need for shopping
and cooking over Christmas week.
Some shellfish, which is at its
best right now, to freshen your
palate. British fishermen risk the
terrible winter weather to bring
us exceptional scallops, crab
and lobster, which are at their
meatiest and full of flavour at
the moment, as the waters
around the Atlantic coast are so
fertile.
Bowls of dried figs and dates,
candied chestnuts and sugared
plums, which can be eaten like
sweets, as well as a dense fruit
cake and some sloe gin to wash it
all down.
Of course, everyone has their
own, very personal, traditions of
what and how they like to eat
over the season. Usually
this is
rooted in our own upbringing, but
we are increasingly embracing
other nationalities traditions,
with things like stollen, panetone,
eggnog and smorgasbords (which
can be prepared or bought in
advance and are easy to serve)
becoming favourites.
I might break with tradition this
year and replace the turkey curry
with a mole a traditional
Mexican stew made with chocolate
and chilli, to use up the last of the
bird. But other than that, Ill be
keeping it simple. Im feeling
hungry already...
AMUSE
BOUCHE
BRUCE WILSON
Head chef, Paternoster Chop House
How to eat well and cook little this festive period
FOOD&BOOZE
A truckle of cheese will help
keep you out of the kitchen
this Christmas
26
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
7pmLive Darts 12amFootballs
Greatest 12.30amFootball Asia
1amRevista De La Liga 2am
Premier League Review3am
Footballs Greatest 3.30am
Football Asia 4amRevista De La
Liga 5am-6amPremier League
Review
SKY SPORTS 2
7pmPremier League Review8pm
Test Cricket 9pmT20 Cricket
The Big Bash 9.30pm
Powerboating 10pmRevista De La
Liga 11pmPremier League Review
12amTest Cricket 1amT20
Cricket The Big Bash 1.30am
Powerboating 2amEuropean
Seniors Tour Golf 3amThinking
Tackle Special 4am-5am
Badminton
SKY SPORTS 3
7pmEuropean Seniors Tour Golf
8pmTrilby Tour Golf 10pmAngling
11pmPool 12amEuropean Seniors
Tour Golf 1am-3.15amLive WWE:
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BRITISH EUROSPORT
7.15pmWintersports: Ski Pass
7.30pmLive Alpine Skiing 8.45pm
Skeleton 9.45pmBobsleigh
11.15pmAlpine Skiing 12.15am
Wintersports: Ski Pass
12.30am-12.45amGT Academy:
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ESPN
7pmESPN FC Press Pass 7.30pm
Live German Football 9.30pm
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Kicks: Premier League 10pm
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5.30am-6amFIS Alpine Ski World
Cup Report
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7pmCriminal Minds 8pmSing
Date: Celebrity Special
8.30pmSing Date 9pm
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Medium3.30amBones 4.20am
Nothing to Declare 5.10am-6am
Passport Patrol
BBC THREE
7pmSnog, Marry, Avoid: The
Pageant 2012 8pmDont Tell the
Bride: Christmas Revenge 2012
9pmDont Tell the Bride
Christmas on Ice 10pmRussell
Howards Good News 10.30pm
EastEnders 11pmFamily Guy
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Impractical Jokers 2.30am
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Howards Good News
E4
7pmHollyoaks 7.30pmHow I Met
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12.15amThe Big Bang Theory
1.15amThe Inbetweeners 2.15am
How I Met Your Mother 2.40am
The Ricky Gervais Show3.05am
The Cleveland Show3.55am
Scrubs 4.20am-6amUgly Betty
HISTORY
7pmStorage Wars 7.30pmPawn
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2.30amCajun Pawn Stars 3am
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Pawn Stars 4amSwamp People
5amPawn Stars 5.30am-6am
Storage Wars: Texas
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7pmFast n Loud 8pmIce Pilots
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7pmDr Oz 8pmKate Plus 8 9pm
42 Stone Mum10pmObese and
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Supernanny US 4amA Baby Story
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SKY1
8pmLast Resort 9pmJason
Manfords Little Cracker 9.30pm
Omid Djalilis Little Cracker 10pm
FILMHide and Seek 2005.
11.55pmBrit Cops: Zero Tolerance
1.55amRoad Wars 3.45amCrash
Test Dummies 4.10am-6am
Stargate SG-1
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
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8pmHolby City:
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10.25pmRegional News;
National Lottery Update
10.35pmImagine: A Beauty Is
Born Matthew Bournes Sleeping
Beauty: 11.35pmFILMThe
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2.25amSign Zone: Supersized
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Boxing Weekly 1.35amSailing:
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Beach Volleyball 2.55amBest of
British: This Is Rehab 3.50am
Freesports on 4 4.20amSurvival of
the Fittest 4.45amThe Grid
5.15am-6.10amDeal or No Deal
5.30pmEmergency Bikers:
The paramedics help a child
who has been hit by a car.
6.30pm5 News at 6.30
7pmHighland Emergency:
7.30pmHighland Emergency: 5
News Update
8pmCHOICE Murder Files:
Killer on the Run: 5 News at 9
9pmBody of Proof:
10pmCSI: NY:
10.55pmCSI: NY: 11.55pmSlaves
in the Cellar: 12.55amSuperCasino
3.55amHouse Doctor 4.20am
HouseBusters 4.45amGreat
Artists 5.10amMichaelas Wild
Challenge 5.35am-6amMichaelas
Wild Challenge
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7
8 9 10 11 12 13
14 15 16 17 18 19
20
21
22 23
13 10
45
9 23 17
28
28 29
6 16
24 11
25
4 19 11
45
30 27
24
17
10
28
20
3
33
16
17
16
17
22
34
35
6
15
11
11
42
20
16
7
O
U
T
G
I R
D
N
B

4
B A S I C S H O R E
O P R U E
L H O P E N I N G
S T E W S G T
T R S L E E P E R
E V E R O R O D E
R O S E B U D R P
O G O T T E R
A D O R I N G R E
O E M A S
M O N T H A B Y S S
8 1 9 8 1 2 4
9 7 5 1 3 8 9
6 3 8 7 2 1 4
5 2 1 3 2 8 6 9
3 8 9 6 3 1
9 2 5 6 8 3 7 1 4
5 1 2 4 1 2
8 3 9 7 7 9 6 8
4 1 6 2 5 3 9
3 9 7 9 5 2 5
1 2 6 8 4 1 7
4
4
4
4
4
4
4
4
4
The nine-letter word was
SHRINKAGE
ACROSS
1 Large bags (5)
4 Scour
vigorously(5)
7 Orderly
grouping (11)
8 Amphibian (4)
11 Fried potato
slices (6)
14 Country, capital
Stockholm (6)
17 Hard fruits (4)
21 Marked by
independence
and creativity
in thought or
action (11)
22 Bill ___, of
Microsoft
fame (5)
23 Puts a name to (5)
DOWN
1 Outerwear garment (5)
2 Consignment (5)
3 Bathroom xture (4)
4 Implement with a shaft
and barbed point (5)
5 Tall perennial grasses (5)
6 Seizes with the teeth (5)
9 Not processed
or rened (3)
10 Deity (3)
11 Metal container (3)
12 Travellers pub (3)
13 Deep hole (3)
14 Wasps defence (5)
15 Accurate (5)
16 Departs (5)
18 Applying (5)
19 Paces (5)
20 Fruit preserves (4)
T
E
R
R
E
S
T
R
I
A
L
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WARTIME FARMCHRISTMAS
BBC2, 9PM
Ruth Goodman and Peter Ginn return
to Manor Farm to recreate the
conditions that prevailed in rural
Britain during the Christmas of 1944.
INSIDE GUINNESS WORLD
RECORDS ITV1, 8PM
Concluding the documentary meeting
a wide range of record holders,
including Pauline Potter, the worlds
heaviest woman.
MURDER FILES: KILLER ON THE
RUN CHANNEL5,8PM
The story of Neil Entwistle, who was
convicted of the murders of his wife
and their nine-month-old daughter in
Massachusetts in 2006.
TVPICK
ARSENAL manager Arsene Wenger
last night hinted he is ready to play
Theo Walcott in his favoured central
role more often after the experiment
helped his beleaguered team redis-
cover devastating form.
Midfielder Santi Cazorla scored a
hat-trick while Lukas Podolski and
Walcott netted the others as the
Gunners tore through hapless
Reading at pace and climbed to fifth
in the Premier League.
Bottom-of-the-table Royals still gave
Arsenal a scare when Adam Le
Fondre and Jimmy Kebe scored with-
in six second-half minutes to make it
4-2, but Walcotts strike finished the
job and pleased Wenger.
Hes shown ability to play in this
position, he said of contract rebel
Walcott, who could leave for free in
the summer.
I believe for his first game hes
done very well in that position. There
were very encouraging signs. I felt it
was a good opportunity to do it
tonight. On what Ive seen in train-
Walcott striker
cameo caps off
Cazorla treble
ing, I thought he was ready to do it.
Wengers men scored seven at the
Madejski Stadium in the Capital One
Cup earlier this season and took just
14 minutes to add another, Podolski
deftly killing a Kieran Gibbs cross and
lashing in with his next touch.
Cazorla swerved a 25-yard drive
narrowly wide, Walcott shot at
Federici when clean through and Jack
Wilsheres volley was tipped wide
before the Spain midfielder scored
twice in four minutes.
First the 5ft 6in star dived to head
home Podolskis left-wing cross; then
he turned smartly and fired through
a crowd after Gibbs had headed
Walcotts centre back across goal.
Adrian Mariappas sliding interven-
tion stopped Walcotts shot on the
line just after half-time, but Cazorla
tapped in the fourth, and completed
his treble, from Podolskis cross after
a sweeping move on the hour.
Arsenal were cruising, yet Reading
stunned them and raised hopes of a
comeback with two goals in six min-
utes, Le Fondre rounding Wojciech
Szczesny and then Kebe beating the
offside trap and stroking home.
Walcott settled Wengers nerves in
the 80th minute, however, and
crowned his striking audition with a
sharp finish, gathering Cazorlas pass
and turning Kaspars Gorkss before
steering left-footed past Federici.
Tottenham dont rely upon Bale
to climb table, says Vertonghen
TOTTENHAM defender Jan
Vertonghen is adamant Spurs can
succeed without injured winger
Gareth Bale.
The Welshman remains sidelined,
having limped off during the 3-0
victory at Fulham a fortnight ago
with a hamstring injury.
Vertonghen, who scored his first
Premier League goal for Tottenham
during Sundays 1-0 win over
Swansea, believes Clint Dempsey has
proved an effective replacement
during Bales absence.
Maybe we needed a little more
width on the pitch but Clint has
replaced Gareth very well, like he
has done with all the strikers
already, said Vertonghen.
Of course Gareth is a world class
player, but we did well without him.
We have a big squad but have had
too many injuries. But even without
those players weve played quite well.
When everybody comes back well
have a very strong team.
Spurs climbed to fourth in the
Premier League after Sundays win
and will be relieved to halt a trend of
conceding late goals.
Andre Villas-Boass side would be
top of the league if matches had
finished on 80 minutes.
Weve conceded too many goals
in the last 10 minutes, we know that.
We have to keep our focus for 95
minutes, added Vertonghen. We
talked about not conceding late
goals and last week [a late 2-1 loss to
Everton] was a perfect example.
IN BRIEF
Brit Chilton steps up onto 2013 grid
n FORMULA ONE: British racing driver
Max Chilton is expected to drive for
Marussia next season, having been
promoted from reserve driver. The 21-
year-old was their testing and reserve
driver for the second half of the 2012
season. Chilton will become the fourth
British driver on the grid for 2013 along
with Jenson Button, Lewis Hamilton and
Paul Di Resta.
Anelka in talks to quit Shanghai
n FOOTBALL: Former Chelsea striker
Nicolas Anelka has initiated talks to
terminate his contract with the Chinese
side Shanghai Shenhua. Anelka joined
from Chelsea in January but has only
scored three times during his short spell
as Shanghai struggled to finish ninth in
the Super League. Former Blues
teammate Didier Drogba joined Anelka
in China in the summer but his future in
Shanghai also remains uncertain.
Warnock insists pressure on Blues
n FOOTBALL: Leeds manager Neil
Warnock is relishing taking on Chelsea
in the Capital One Cup quarter-finals
tomorrow. The Championship side have
won four of their last five games, while
Chelsea return from Japan after the 1-0
defeat to Corinthians in the Club World
Cup on Sunday. It promises to be
fabulous with no pressure on us, said
Warnock. Whatever team I select we
can just go out and enjoy it.
Cazorla (right) scored a hat-trick as Arsenal climbed to fifth in the Premier League
ENGLAND Rugby 2015, the board
organising the 2015 World Cup, has
recruited Locogs Paul Deighton to
try to replicate the success of the
London 2012 Olympics.
As chief executive officer of Locog,
the organising committee for the
London Games, Deighton was
responsible for raising the 2bn
budget from the private sector and
for relations with the government.
He joins Debbie Jevans, former
director of sport for Locog, who was
appointed chief executive of England
Rugby 2015 in September.
BY ALEX SHARP
BY ALEX SHARP
SPORT
27
cityam.com
REFEREE Mark Halsey has saved
Everton midfielder Marouane
Fellaini from an extensive ban
following his head-butt on Stoke
defender Ryan Shawcross during the
heated 1-1 draw on Saturday.
Fellaini yesterday accepted a
charge of violent conduct for the
incident, which officials missed, and
was banned retrospectively by the
Football Association for three games.
But the Belgian avoided a much
longer ban because Halsey admitted
seeing a further two incidents
involving Fellaini and Shawcross late
Fellaini out until 2013 but spared
long term ban for losing head
in the game, but deemed neither to
be violent conduct.
Fellaini has been inspirational in
Evertons fine start to the Premier
League season but is now out until
the New Year. The 25-year-old will
miss upcoming fixtures against West
Ham, Wigan and Chelsea.
I apologise completely to Ryan
Shawcross, my team mates and to
our fans at the game, said Fellaini
after the match. I have also
apologised to the manager and the
staff. I have no excuses, I was
disappointed with the way I was
being treated and I lost my temper,
which was unprofessional of me.
BY ALEX SHARP
SPORT England has announced large
budget increases for cycling,
triathlon and netball but cricket,
tennis and rugby have suffered
heavy cuts.
The body will provide 493m to
grassroots projects in 46 sports
between 2013-17, with only 11 sports
receiving less than in 2009-13.
Cycling had a hugely successful
year at London 2012 and most
notably with Bradley Wiggins
becoming Tour de France champion.
Alongside the Sky Ride scheme,
these achievements have seen a large
increase in cycling numbers leading
to a 30 per cent rise in cash to 32m.
Netball funding has increased
from 18.7m to 25.3m for its key
contribution to increasing womens
participation in sport, while
triathlon projects are set to receive
7.5m, up from 4.7m.
However rugby has been hit hard,
with league cut by 10.1m to 17.5m
and union by 8.8m to 20m despite
the 2015 World Cup being hosted in
England. Crickets funding has fallen
7.7m to 27.5m. Tennis, swimming
and basketball have been granted
just one years guaranteed funding
with the rest dependent on results.
BY ALEX SHARP
Deighton joins
board for 2015
Cycling reaps rewards of Wiggo
as rugby and cricket funds fall
Results
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READING....................................2
ARSENAL....................................5
BY FRANK DALLERES
PREMIER LEAGUE
TRIUMPHANT England captain
Alastair Cook has hailed yesterdays
historic first Test series victory in
India for 27 years as the equal of
their landmark 2010-11 Ashes suc-
cess in Australia.
Centuries from batsmen
Jonathan Trott and Ian
Bell comfortably secured
a draw in the fourth Test
in Nagpur and with it a
2-1 series win in condi-
tions that have torment-
ed England for a quarter
of a century.
The tourists fabled trou-
bles looked set to continue when
India won the first match by nine
wickets, but Cooks leadership and
exemplary batting inspired an
emphatic response and a place in
cricket folklore.
Opener Cook shared in the first
Ashes series win in Australia for 24
years, but ranks becoming only the
fourth England team to beat India on
their own soil alongside that water-
shed 2010-11 achievement.
It is a very special
day, a special tour,
said the left-hander,
who hit 562 over the
four matches.
I think it is on
a par with the
Ashes. As an
Englishman,
winning in
Australia
after so
l o n g
meant a
h u g e
a mo unt .
But to be in
that that dress-
ing room there
Party like its 2011
[yesterday] for that last half an hour
knowing what we had achieved was a
very special place and it will live long
in my memory.
Cook pinpointed the second
innings of the first Test, when he
scored 176, as the moment that he
felt the pressure of succeeding
Andrew Strauss lift and
believed England could
mount an unlikely come-
back.
You want to prove the
captaincy is not a bur-
den. To do it straight
away is a big monkey off
your back, he added. After
that second innings in
Ahmedabad we thought: Yes, we
can score runs out here.
Defeat was Indias first in a home
Test series since 2004 against
Australia, while former England skip-
per Michael Vaughan called it the
hardest place of all to win.
It will perhaps be remembered as a
series in which England finally found
success against spin, with Kevin
Pietersen, Bell and Trott also hitting
vital centuries.
Theyve really done them-
selves their country proud, said
head coach Andy Flower.
Theyve learnt how to play spin
a lot better, theyve learnt
how to take 20 wickets
in these conditions
and theyve learnt
how to be
resilient in for-
eign condi-
tions.
T
O PUT Englands long-awaited
triumph in India yesterday in
context: the last time they won
there I was still playing. The
length of time everyone in English
cricket has waited for this moment
says it all. It is a terrific achievement
and, in recent memory, second only
to winning the Ashes in 2005.
Ashes victories are all the more
delicious because of the opposition,
but this was better than the last
series in Australia, when England
crushed a poor side. What set 2005
apart was that England defeated
greats such as Shane Warne and
Glenn McGrath. But if that is No1 in
Englands greatest successes of
modern times, then fighting back
from the first-Test drubbing in
Ahmedabad to win in India for the
first time since 1985 is certainly No2.
And, more than just the winning,
what is immensely satisfying is the
transformative effect the series has
had on the team.
It may not have been make or
break exactly, but England went into
the series having just lost to South
Africa, with a new captain and amid
off-field strife, so another setback
would have left them in a sorry state.
Instead they have emerged far
stronger, the skipper galvanised and
the squad reinvigorated, and youd
expect them to beat New Zealand
after Christmas and keep the Ashes
next summer.
Cook has earned the respect of
everyone in cricket, not only with his
outstanding captains performances
but also with his leadership and bold
decision-making.
Newcomers excelled. Opener Nick
Compton may not have made huge
scores but, for a man making his Test
debut in probably the most
demanding conditions for a
batsman, he did a very good job.
Not many pundits predicted Joe
Root would come into a winning
side for the final match, but he
played with great confidence and is
entitled to expect to keep that No6
spot for the trip to New Zealand.
Monty Panesar found the
consistency that has often eluded
him and announced himself as a
credible rival to Graeme Swann
when England play one spinner.
One of my favourite memories was
Monty bowling Sachin Tendulkar in
the second Test. It was typical of the
way England handled Indias best
player and a key moment in the
balance of power shifting.
Theyve had wobbles in 2012 but
England are still among the top two
teams in the world, along with
South Africa. Their aim for next year
should be to put together a long
unbeaten run.
Andy Lloyd is a former England
cricketer. He has also been captain and
chairman of Warwickshire.
562
Runs scored by
Alastair Cook in
the series
Winning in India is as good as Ashes glory
in Australia, says England captain Cook
BY FRANK DALLERES
Monty
Panesar and
Graeme
Swann revel
in the win
(left)
28
SPORT
cityam.com/sport
Santi Climax: Cazorla
scores hat-trick as Arsenal
return to form at Reading
@cityam_sport
CRICKET
COMMENT
ANDY LLOYD
Watershed series has transformed this England team
INDIA captain Mahendra Singh
Dhoni singled out seamer James
Anderson as the difference
between the sides after England
clinched a landmark series win
yesterday.
Anderson took 12 wickets over
the four-match series fewer than
spinners Graeme Swann and
Monty Panesar as the tourists
fought back to beat the hosts 2-1.
But Dhoni identified Andersons
ability to reverse swing in later
matches and keep the Indian
batsmen under pressure as
Englands most potent weapon.
They are a very well balanced
side, the two spinners they have
are very good, the losing skipper
said of England. Anderson
bowled really well throughout the
series on wickets where there
wasnt much help for the fast
bowlers. That was really crucial.
He tested the batsmen all the
time and kept them guessing. I
thought the major difference
between the two sides was James
Anderson.
The Lancashire man,
who took 4-81 in Indias
first and only innings in
the drawn final match in
Nagpur, put his reverse
swing success down to
laborious honing.
Weve really practised
in the nets and the games
weve had leading up to the
series, he said. We executed our
plans really well in the game.
Anderson was
the key, says
India skipper
BY FRANK DALLERES
12
Wickets taken by
James Anderson
during the series
Kevin Pietersen,
who scored a
second Test ton,
enjoyed the
celebrations
Football: Page 27
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