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READER SURVEY: TELL US WHAT YOU THINK
ISSUE 1,769 TUESDAY 27 NOVEMBER 2012
Certified Distribution
01/10/12 til 28/10/12 is 129,297
CHANCELLOR George Osborne
stunned the City yesterday by
appointing Canadas Mark Carney
as the new governor of the Bank of
England the most powerful
unelected role in the UK.
Former Goldman Sachs executive
Carney is currently head of Canadas
central bank, a position he will give
up on 1 June 2013 in order to take
up Threadneedle Streets top job
from 1 July.
The decision to replace outgoing
governor Sir Mervyn King with
Carney was widely welcomed in the
City and drew support from
commentators of varying political
and economic persuasions.
Osborne revealed the hire in the
House of Commons, calling Carney
quite simply the best, most experi-
enced and most qualified person in
the world to be the next governor.
On the opposing bench, shadow
chancellor Ed Balls welcomed the
decision. Ive known Mark Carney
for a number of years and have
worked with him closely. In my view
this is a good choice, a good judge-
ment and his experience will be
invaluable, he said.
Carneys seven years at the helm of
the Canadian economy saw the
nation avoid bank bailouts or sover-
eign debt crises at a time when
many Western powers were flailing.
The 47-year-old will take over the
Bank just as its powers are set for an
historic expansion. Carney will have
responsibility not only for the
Banks Monetary Policy Committee
(MPC) but also the new Financial
Policy Committee (FPC) set up in
the wake of the crisis to attempt to
steer the financial sector away from
turbulent waters.
The extra remit will have played in
Carneys favour given his key roles at
the top of global efforts to control
and stabilise finance. Carney cur-
rently serves as chairman of the
Financial Stability Board (FSB) and as
a member of the board of directors
of the Bank for International
Settlements (BIS).
The appointment of the first non-
British governor since the Banks
inception in 1694 came as a shock,
with most analysts expecting
deputy governor Paul Tucker the
favourite with the bookmakers to
step up to the top job.
Yet Carney, who appeared to rule
himself out of the job as recently as
August, was instead convinced to
make the move across the pond. He
will be paid a salary of 480,000 per
annum, with the option of an extra
30 per cent in lieu of pension.
The wage dwarfs the 305,000 a
year paid to outgoing governor Sir
Mervyn.
However, Carney will not be eligi-
ble for the Banks generous final
salary pension scheme, which has
significantly bulked up the earnings
of other senior Bank executives but
is now being wound down.
Carney will receive a relocation
package, which is yet to be finalised.
The Bank also said that Charlie
Bean, a deputy governor, will stay on
until 30 June 2014 to help ease the
transition to a new governor.
Mark Carney, who spent 13 years working for Goldman Sachs, has been revealed as the new head of the Bank of England
BY JULIAN HARRIS
More on the new Bank
of England governor
See pages 2, 3, 4, 14, 22
HELP US MAKE YOUR FAVOURITE PAPER EVEN BETTER WWW.CITYAMSURVEY.COM See Page 7 for full terms & conditions
THE CITY HAS
A NEW KING
Meet Mark Carney:
flown in to save the
IN APPOINTING Mark Carney the new
governor of the Bank of England, the
government has found an ex-Goldman
Sachs director comfortable with gar-
nering the views of the City yet
unafraid of standing his ground at
times of conflict.
The Canadian famously clashed with
JP Morgan chief Jamie Dimon after a
fierce disagreement over the new
Basel III regulations designed to safe-
guard the global financial sector.
At the heart of an evolving battle of
macro-prudential regulation, follow-
ing the most severe financial crisis in
history, Carney is determined and
speaks his mind.
The reform agenda is being pursued
with a legitimate effort to increase the
resilience of the system in the most
efficient way possible, he told the
Euromoney website last month.
The interests of the private financial
community should be absolutely
aligned with those of the regulatory
community to grow the real economy
in a sustainable way. And the more
enlightened members of the financial
community have that perspective, he
said, in an apparent jibe at his neme-
ses.
His forthright approach earned him
respect among global officials. If
Mark Carney had a run in with Jamie
Dimon, then I have every sympathy for
him, former chancellor Alistair
Darling told Channel 4 last night.
And the Bank of Englands Andrew
Haldane has already clashed with his
new boss. I thought Haldanes speech
was uneven, Carney said after the
Banks executive director of financial
stability questioned the complexity of
Basel III. Basel I was simple and it
drove us off a cliff. Haldanes conclu-
sion is not supported by the proper
understanding of the facts.
Mark Carney is one of the leading global
figures in mending post-crisis regulations
2
NEWS: THE CITY HAS A NEW KING
BY JULIAN HARRIS
To contact the newsdesk email news@cityam.com
TUESDAY 27 NOVEMBER 2012
The pair will need to patch up their
differences if they are to work together
on the Banks new regulatory responsi-
bilities over the City. Carneys term
will be a shorter than expected five
years, yet will cover a crucial period as
the Bank radically extends its remit
beyond monetary policy.
Born in Fort Smith, Canada, in 1965,
Carney went on to study at Harvard
and Oxford, meeting his British wife
Diana Fox while taking his post-grad
courses.
Both are economists, and have an
environmentalist bent having worked
on issues such as climate change.
The new jobs website for London professionals
CITYAMCAREERS.com
CARNEYS VIEWS
VIJAY KRISHNASWAMY
HYMANS ROBERTSON
We see this as an exciting
and bold step for the Bank of
England. Mark Carney is a
well-respected financial fig-
ure with a strong track
record.
PHILIP SHAW
INVESTEC
Mark Carney is a surprise
choice but he is highly respect-
ed, and experienced, regulat-
ing the Canadian banking
system and chairing the G20s
Financial Stability Board.
MARTIN GILBERT
ABERDEEN ASSET MANAGEMENT
The appointment is astute. He
comes with strong international
credentials as a board member
at the Bank of International
Settlements and as Financial
Stability Board chair.
NEIL WILLIAMS
HERMES
Carney is a highly credible
choice for both the policy
establishment and nancial
markets. He has helped steer
Canada to be the G7s best
recovery-rate-economy.
KATJA HALL
CBI
Carneys strong track record as
the Canadian central bank gov-
ernor and extensive experience
in nancial regulation mean he
is well positioned to guide the
UK through challenging times.
ROBERT WOOD
BERENBERG BANK
Carney is an excellent choice
for BoE governor, bringing a
top quality CV and a factor
that Paul Tucker lacked: he
comes from outside the Bank
of England.
DOUGLAS MCWILLIAMS
CEBR
The task for Carney is to
know when to overrule his
underlings. He will get a better
press if he can persuade them
to agree, but it is more impor-
tant for him to get it right.
HOWARD ARCHER
IHS GLOBAL INSIGHT
The appointment of Carney
likely reects the view that it
is a good time to have a com-
plete new broom within the
Bank of England following Sir
Mervyn Kings dominance.
A critic of the US
Volcker Rule on
separating banking
operations. It is not
truly accurate to say
they [financial crisis
events] prove that
something systemic
[was the cause], he
has said.
WHAT THE CITY MADE OF GEORGE OSBORNES LATEST APPOINTMENT
T
O my great surprise, George
Osborne has just pulled off an
amazing hire. Appointing a
new governor of the Bank of
England was always going to be
Osbornes most important
decision. I thought the chancellor
would go for the easy choice I
was wrong. His wooing of Mark
Carney, who will shake up the
Bank and draw a line under the
failures of the financial crisis, was
inspired. Within the bounds of the
mainstream consensus, he is the
best possible governor and
financial regulator that Britain
could possibly hope for right now.
The fact that he is not British
will make his communications
with the public more challenging,
especially when tough decisions
need to be taken but it sends a
signal to the world that the City
remains global and open, an
international marketplace at the
heart of a trading nation.
His appointment will guarantee
a coherent and stable approach. He
wants to reform finance to make
sure it doesnt explode every few
years and to make sure that if
firms do go bust, special wind-
down and resolution procedures
kick-in, protecting taxpayers from
having to bail out banks.
Crucially, however, he is a tough
reformer, not a vandal. He is no
soft touch but neither does he
want to turn Canary Wharf into a
ghost town. He oozes
reasonableness. He doesnt want to
destroy universal banks, unlike
some in Britain. His appointment
shows Osborne still wants big
financial firms to be based here.
Carney rightly doesnt like the
Volcker rule, so beloved of banker-
bashers; the Canadian, who
actually knows what he is talking
about, sees that one cannot
distinguish between prop trading
and hedging. He wants to reform
behaviour, reduce leverage and
improve supervision, not ditch
scale and complexity for the sake
of it. He is too confident in Basel
III but at least that is a possible
framework. Most important of all,
he understands the trade-off
between making banks safer and
EDITORS
LETTER
ALLISTER HEATH
their ability to lend. He is a breath
of fresh air. It is a tragedy that he
wasnt around before the flawed
Vickers Commission, whose
findings wont solve anything.
Carney is hardly perfect. I partly
disagree with his approach to
monetary policy, though he
understands the danger of
bubbles. The Canadian economy is
not in as good a state as some have
argued. But Carney, unlike some,
listens to his most interesting
critics: he recently sought to
address (though ultimately
dismissed too readily) the concerns
of Austrian school economists, for
example. Carney will also be a
fearless, independent figure who
will happily contradict Osborne.
Brussels second rate regulators
will suddenly face a formidable
alternative. Yesterday was
therefore an unusually good day
for the British economy, for the
City and for all of our future jobs
and prosperity.
CITY A.M. NEEDS YOU
Dear readers, as a quality
newspaper provided free to a
record number of readers, we
would very much like to find out a
little more about you. I know that
many of you will be keen to help
us so please go to
www.cityamsurvey.com and you
will be guided through a simple
questionnaire. To thank you for
taking the time to help us,
everybody who fills in the survey
will be entered into a draw for an
all-inclusive trip for two to one of
Sandals luxury resorts (see full
terms and conditions on page 7).
Thanks again to all of you for your
exceptional loyalty and trust, for
which we are extremely grateful.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
New governor pulls
no punches in his
determination to fix
the financial crisis
The cost of fresh
regulations, such as
requirements to build
up capital buffers, is
not culpable of hitting
growth so he argues.
In many cases, the
problem is the
absence of credit
demand, he said.
An advocate of
flexible regulation with
supervision rather than
one-size-fits-all rules.
We are careful not to
force absolute
commonality in the
financial system as this
would reduce diversity
in the market, he said
of new global moves.
An unusually brilliant
move by Osborne will
give City a huge fillip
Age: 47
Born: Fort Smith, Canada, 1965
Academia: Harvard (economics),
Oxford (D.Phil at Nuffield College)
Career: 13 years at Goldman Sachs,
senior associate deputy minister of
finance (in Canada), and governor
of the Bank of Canada.
Chairs the Financial Stability Board
and is on the board of the Bank of
International Settlements
Personal: Married to British wife
Diana Fox, with four daughters.
MARK CARNEY
CV
TUESDAY 27 NOVEMBER 2012
3
NEWS: THE CITY HAS A NEW KING
cityam.com
the Canadian
UK economy
WHEN he takes up the mantle at the
Bank of England, Carney will be
stepping into shoes filled by 119
others over 319 years, since first
governor Sir John Houblon.
Carney succeeds Sir Mervyn King,
who took the role on in 2003, and
led the institution through the UKs
worst recession for decades. Sir
Mervyns predecessor was heavy-
smoking Eddie George, known as
Steady Eddie, who held the role
during the rapid expansion of the
late 1990s. Earlier bosses include
Montagu Norman, who ran the bank
during 1920-1944, overseeing the
exit from the gold standard.
THE Bank of England under
Mark Carney will be far more
powerful than it ever has been
under Sir Mervyn King. It is
likely he will have to restructure
his top team to cope with the job
and take a role akin to that of a
corporate chairman, with
executives of each branch of the
Bank below him.
Carney is expected to appoint
two new deputy governors, in
addition to the two currently
employed. The governor will
continue heading the central
task of setting monetary policy
controlling interest rates and the
printing presses in an effort to
manage demand in the economy
and so inflation.
The new powers being given to
the Bank include control over
financial policy.
Carney will chair the financial
policy committee (FPC) which is
charged with maintaining
financial stability and stopping
bubbles building. For example, it
will be able to raise the level of
capital banks hold against
commercial property loans if it
feels the market is overheating.
The Financial Services Authority
is being broken up, with part of
its powers going to the new
Prudential Regulation Authority
which will be run by the Bank. It
is charged with promoting the
safety and soundness of firms,
including insurers and some
investment firms.
Finally, a new chief operating
officer is due to be appointed
next year, and may become the
fourth deputy director
responsible for the day to day
running of the Bank, including
finance, IT and HR roles.
But the Banks power is not
unlimited the government still
sets the inflation target and the
instruments the Bank can use to
try to achieve it, and alternative
policies like Funding for Lending
were driven forward by the
Treasury and the chancellor.
The Bank of Englands huge
new powers over UK finance
MARK CARNEY
OTHER GOLDMAN ALUMNI WHOVE RISEN TO THE TOP
William C Dudley
President of New York Fed
Joined Goldman Sachs in
1986 where he was a
managing director and the
firms chief US economist.
Mark Patterson
Chief of staff to the US
Treasury
Was a Goldman vice
president and managing
director from 2004-2008.
Michael Cohrs
Member of the Financial
Policy Committee
Worked for Goldman in
New York and London in
the 1980s.
Olusegun O Aganga
Nigerian minister for
trade and investments
Worked in hedge fund
consulting and European
prime brokerage.
Mario Draghi
European Central Bank
President
Former vice chairman and
managing director of
Goldman Sachs International
Hank Paulson
Former US Treasury
secretary
Three decades at
Goldman, rising to chief
executive.
Mario Monti
Italian prime minister
Was once employed as an
was an international
adviser to Goldman.
Gary Gensler
Chairman of the CFTC
Joined Goldman Sachs in
1988 and spent 18 years
there, inculding time
spent in Tokyo.
Robert Zoellick
Chief executive of the
World Bank
Vice chairman,
international at Goldman
Sachs.
Stepping into a historic banking job
ANDREW BAILEY
THE HEAD OF THE PRUDENTIAL
REGULATORY AUTHORITY
CHARLES BEAN
DEPUTY DIRECTOR FOR MONETARY
POLICY, STAYING UNTIL JUNE 2014
NEW COO
A NEW CHIEF OPERATING OFFICER
WILL RUN AREAS LIKE HR AND IT
PAUL TUCKER
DEPUTY DIRECTOR FOR FINANCIAL
STABILITY, NEXT MOVE UNCERTAIN
BY BEN SOUTHWOOD
MARK CARNEYS succession to the
Bank of England throne will be the
first step in a revolution at the top of
the central bank, analysts forecast yes-
terday.
Deputy governor for monetary poli-
cy Charlie Bean will leave after a year,
chancellor George Osborne con-
firmed in his announcement to par-
liament. And Paul Tucker, deputy
governor for financial stability and
formerly the frontrunner to succeed
Sir Mervyn King as governor,
is only contracted to
continue in his job
until February 2014.
This appointment
opens up an interest-
ing question on the
two deputy governors,
said Philip Shaw at
Investec. Even with a
one year extension,
Charlie Bean is set to
retire in June 2014.
It is not clear that
Osbornes hire
could herald a
Bank shake up
BY BEN SOUTHWOOD
having missed the governors job,
whether Paul Tucker will remain in
his post beyond February 2014.
Yesterdays appointment could well
usher in a period of significant
upheaval at the Bank of England.
Robert Wood at Berenberg Bank said
that Carneys first priority might be to
convince Tucker to stay longer with
the Bank. If both deputy governors
were to leave shortly into Mark
Carneys tenure, it would mark a huge
loss of experience at the top of the
Bank, he said.
But before any of this, Carney will
face a grilling on monetary and
financial policy from Andrew Tyries
Treasury Select Committee, on his
own request.
MPs are likely to quiz the
Canadian on his plans for rates
policy, and his views on the quan-
titative easing programme.
GUEST
COMMENT
MARTIN BACCARDAX
Paul Tucker had
been seen as
the frontrunner
for the job
TUESDAY 27 NOVEMBER 2012
4
NEWS: THE CITY HAS A NEW KING
cityam.com
Carney is a great choice - but he didnt save Canada
I
N hiring Mark Carney, George
Osborne has ensured that Britain
will stay at the forefront of global
financial market regulation. The
new governor will be a game-
changing counterweight to European
banking reform and a man certain to
keep the UKs financial services sector
at the centre of its economic recovery.
His chairmanship of the Financial
Stability Board and his directorships at
the Bank for International
Settlements (the central bank for cen-
tral banks) means Britain will now
have the most influential and respect-
ed regulator batting for it during what
could be the biggest round of legisla-
tive and regulatory changes the indus-
try has ever known. Carney will also be
able to offer a persuasive challenge
and alternative to the EUs plans to
establish control over financial servic-
es regulation across Europe.
Having Sir Mervyn King or his Paul
Tucker argue for City of London excep-
tionalism when both were fairly or
not tainted with the worst excesses
of the crisis was not the most effective
strategy. Carneys role as head of the
Bank of Canada during the worst of
the financial crisis not a single bank
received state aid nor was implicated
in any of the myriad financial market
scandals makes him an almost unim-
peachable representative of the UKs
interest in EU negotiations.
Hes also a former banker who
knows the markets. He is trusted by
the major players as a no-nonsense
professional who muddied his boots
in the same trenches, not someone
who lectures them on morality from
an ivory tower. Hes also famously
unafraid of their judgement, having
withstood a furious tirade last year
from JP Morgan CEO Jamie Dimon.
But Carney is far from perfect. Hes
left behind the largest pile of
Canadian personal debt on record and
the brewing ingredients of a housing
bubble some say could pop at any
moment. Hes been criticised for try-
ing to use bank rhetoric to anchor
inflation expectations but failing to
hike interest rates for fear of inflating
the Loonie and blunting the interna-
tional competitiveness of Canadian
exports. Canadas pristine record for
financial market probity owes more to
the protective instincts of the Federal
government and the province of
Ontario, home to the city of Toronto
and the countrys biggest banks, than
to any form of central bank prescience.
Replicating his success in the UK
seems unlikely. Canadas financial
services industry is tiny when com-
pared to the global powerhouse that is
London. Its economic insularity dur-
ing the crisis owed more to the soaring
value of commodities and the
spillover from the billions in US stimu-
lus spending than to any particular
policy decision from Ottawa. Even
today, Canada benefits for having its
biggest trading partner the US
growing at a two per cent clip. The
UKs closest export destination, the
Eurozone, is sinking into recession.
But without a strong, confident and
well-managed City, the UKs future
would be too bleak to contemplate.
The simple truth is that the Bank of
Canada governor was the best choice
available to preserve and strengthen
the UKs key economic asset.
Martin Baccardax is a Canadian journal-
ist and former finance professional. He is the
European business editor of the
International Business Times at
www.ibtimes.co.uk
Intrade to cut off bets from US
Intrade, the leading prediction market for
bets on events from elections to box-
office receipts, said it would cut off US
customers next month in the face of a
regulators lawsuit. The Dublin-based
online marketplace was regularly cited as
a barometer of the fluctuating odds of the
candidates during the US presidential
campaign.
Urban Decay scrubs up for LOreal
LOreal has made a foray into the make up
market for younger consumers with the
purchase of niche US brand Urban Decay.
The French cosmetic giant bought
California-based Urban Decay from
Castanea Partners, a private equity firm,
for an undisclosed sum. The brand was
created in 1996 by Sandy Lerner.
Civil servant sues DfT
Kate Mingay, one of the three civil
servants suspended over the West Coast
rail bid fiasco, has filed legal proceedings
against the Department for Transport over
the way she has been treated. A
preliminary High Court hearing is
scheduled for Thursday. She is
being represented by Mishcon de Reya.
US Airways says Sandy cost $35m
US Airways Group said yesterday that
Superstorm Sandy cost the airline $35m
in profits, as the storm contributed to a
decrease in bookings that stretched into
November. The carriers bookings
declined by 13 per cent in the several
days before and after the storm,
compared with a year ago.
WHAT THE OTHER PAPERS SAY THIS MORNING
Mary Schapiro has been looking to stand down as SEC chairman for several months
Greek prime minister Antonis Samaras has seen interest rates cut
Elisse Walter will
head the watchdog
EUROZONE finance ministers and
the International Monetary Fund
clinched agreement on a new debt
target for Greece last night in a
breakthrough towards releasing an
urgently needed tranche of loans to
the near-bankrupt economy, offi-
cials said.
After nearly 10 hours of talks at
their third meeting on the issue in
as many weeks, Greeces interna-
tional lenders agreed to reduce
Greek debt by 40bn, cutting it to
124 per cent of gross domestic prod-
uct by 2020, via a package of steps.
They also agreed that the interest
rate on bilateral loans to Greece
would be reduced by 100 basis
Eurozone finance ministers to
allow Greece to cut its debt
BY HARRY BANKS points to 50 basis points above the
cost of financing once Athens has
reached a primary surplus of 4.5
per cent of GDP, a source familiar
with the talks said.
The deal should open the way for
a major aid instalment needed to
recapitalise Greece's teetering
banks and enable the government
to pay wages, pensions and suppli-
ers in December.
Greece could receive up to 44bn,
although it remains unclear if the
full amount will be paid in one go.
Greek finance minister Yannis
Stournaras said earlier that Athens
fulfilled its part of the deal
through tough austerity measures,
now lenders needed to do their
part.
TUESDAY 27 NOVEMBER 2012
5
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THE HEAD of Americas financial
watchdog will be replaced by a
Democrat next month, the White
House said yesterday, in the first reg-
ulatory reshuffle since President
Barack Obamas reelection.
Mary Schapiro, a registered inde-
pendent voter who has chaired the
Securities and Exchange Commission
since January 2009, is stepping down
on 14 December.
She will be replaced by Elisse
Walter, who has sat on the SEC board
since 2008 and whose own
term is due to end next
year.
Walter served a short
spell as interim chairman
before Schapiro was
appointed during the
depths of the banking cri-
sis.
The SEC is stronger, and
our financial sys-
tem is safer and
better able to
serve the
American peo-
ple thanks in
Schapiro steps
down from SEC
chairmanship
BY MARION DAKERS
large part to Marys hard work,
President Barack Obama said yester-
day.
Speculation had been rife for
months that Schapiro would leave
soon after the November presidential
election.
Walter, a Harvard law graduate with
decades of regulatory experience,
takes the reins as the SEC grapples
with a raft of new rules in the wake of
the Dodd-Frank Act to separate invest-
ment and retail banking operations.
The SEC, which came under fire for
its handling of the crisis sparked by
Lehman Brothers collapse in 2008,
has logged record numbers of
enforcement actions in recent
years as it attempts to clean up
the financial sector.
The SECs five commissioners
are appointed by the President
for five-year terms. No more
than three commissioners can
belong to the same political
party, to try and keep the reg-
ulator non-partisan.
BARCLAYS shares dropped sharply yes-
terday after a sizeable sale of warrants
by Qatar Holdings, which invested
heavily in the bank at the height of the
financial crisis.
Goldman Sachs and Deutsche Bank
bought the warrants which can con-
vert into shares at a later date from
the fund, and aimed to sell up to 303m
shares in Barclays to avoid being left
with a residual position.
The sale of 80 per cent of the equity in
the warrants would cover the cost of
the instruments, though some war-
rants were also sold directly, reducing
the amount of stock that the banks
needed to sell.
By not selling the whole position, the
banks generated speculation that the
stock was overpriced.
Barclays shares
drop on sale of
Qatari warrants
BY TIM WALLACE
However bank sources close to the
deal insisted there was no problem with
demand rather, they suggest the
banks may simply be interested in hold-
ing the warrants They claim to be com-
fortable with the result.
Goldman Sachs and Deutsche Bank
declined to comment. Barclays shares
fell 5.39 per cent on the day.
Megafon set to float in London
as investors line up for shares
ALISHER Usmanovs Russian
telecoms group Megafon appeared
to be on track to successfully pull
off its 1bn plus flotation
yesterday, with banks saying the
controversial share sale had
attracted sufficient investor
demand.
The listing of Russias second-
largest mobile phone firm was
nearly killed at its inception
when the intention to float
announcement was accompanied
BY DAVID HELLIER
by news that Goldman Sachs, the
US investment bank, had stepped
aside from the deal despite
previously being tipped to be the
lead bank.
Sources at Goldman Sachs
suggested the bank was perturbed
by corporate governance issues
relating to the ownership
structure of an umbrella company
that will own Megafon and other
Usmanov assets, including the
tycoons shareholding in Arsenal
football club.
Yesterday it was suggested that
the share sale was boosted when a
large global investment fund
placed an order for more than a
tenth of the shares on offer.
Megafon is trying to sell global
depositary receipts in London, the
US and Moscow at $20 to $25,
raising between $1.7bn and $2.3bn
(1.06bn and 1.44bn) and valuing
the business at $11.2bn to $14bn.
The books on the deal are set to
close later today.
Banking sources said they
expected pricing to be towards the
lower end of the range.
TUESDAY 27 NOVEMBER 2012
6
NEWS
cityam.com
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26Nov 20Nov 21 Nov 22Nov 23Nov
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CITYA.M.
EDITORS
LETTER
ALLISTER HEATH
IT is that time of the year again. Today, City A.M.
begins its annual readership survey. As a quality
newspaper provided free of charge, it is
important for us to understand who our readers
are and what you think of us, and this survey is
one of the main vehicles we have to achieve
this.
We know that many of our growing band of
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but as good capitalists here at City A.M. we also
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the survey, we will also be entering survey
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We recently reached our highest ever audited
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the future. We are by no means finished
improving the quality of the paper and making
it even more widely available; and we are very
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Thanks for reading City A.M., thank you for your
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FUND manager Aberdeen Asset
Management yesterday said it had
upped its full year dividend payout to
investors by 28 per cent, capping off
a solid year of double digit revenue
and profit growth for the FTSE 100-
listed firm.
Aberdeen, which was set up in the
granite city in 1983, took its final
investor payout up 37 per cent, giv-
ing shareholders a full year dividend
of 11.5p, up from 9p last year.
This came despite a difficult and
uncertain year for markets, the firm
said. The business has grown rev-
enues consistently over the past few
quarters while also keeping its cost
base under control.
Yesterday it reported that full year
revenues had shot up 11 per cent
over the year to 869.2m sending
its operating margin over the magic
40 per cent mark.
Aberdeen hikes
dividend after
revenue gains
BY MICHAEL BOW
Chief executive Martin Gilbert yes-
terday said emerging market debt
products would be a growth area for
the firm.
Aberdeen recently attempted to
slow the flow of money into its
emerging market equity funds but
yesterday reported 1.3bn inflows.
Its higher than we would like.
Were looking at other measures to
slow it down without hard closing
funds, Gilbert said.
Aberdeen remains condent in sales of its equity-based products, but
also looks to increase the contribution from other asset classes in coming
months. Its agship EM Debt fund has now passed the $2bn milestone,
and Aberdeen has recently strengthened its global property platform.
ANALYST VIEWS

The base case price to earnings does not feel overly expensive to us and
if you believe management can achieve its EMD ambitions and possibly
organic growth in other areas, then Aberdeen is still arguably cheap. It is
nonetheless not as cheap as it once was.

Having hit our target price, we upgrade our target price to 380p based on
preliminary estimate of an uplift in current dividend driven by stronger
earnings per share momentum compared to our number and consensus. The contin-
ued ow into pooled funds increases the revenue yield on managed assets.

HOW WELL WILL

ABERDEEN PERFORM IN
FUTURE? By Michael Bow
HALEY TAMCITI

DAVID MCCANN NUMIS

ARUN MELMANE CANACCORD GENUITY

Aberdeen Asset Management PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
335
340
345
350
355 p
336.00
26Nov
Businesses help people work their way out of poverty
Poor people are business people. To grow their small business they need capital but...
THE REALITY
3. GEOGRAPHIC
The commercial banks
are too far away. They are concentrated
in the cities whereas the majority of people
living in povery are in rural areas.
2. ECONOMIC
Poor people have no collateral
to secure their loans.
1. SOCIAL
The process is often too complicated
for those whith little or no education.
3 BIG BARRIERS TO
ACCESSING THIS CAPITAL:
THE OPPORTUNITY
GEOGRAPHIC ACCESS
We use technologies, such
as mobile banking, which
takes banking to people
living in poverty.
SOCIAL ACCESS
Our loan service
is designed with
poor people in
mind. Our ATMs
with ngerprint
recognition allow
easy and safe access.
ECONOMIC ACCESS
We use trust as a guarantor.
Groups of clients guarantee
each others loans.
OPPORTUNITY
INTERNATIONAL BREAKS
DOWN THESE BARRIERS:
HELP US
FUND LOANS TO
more people in GHANA, MALAWI, MOZAMBIQUE,
RWANDA and UGANDA (the ve countries we are
supporting with appeal funds).
260,000
140
PROVIDES THE AVERAGE AGRICULTURAL
LOAN TO CASSAVA FARMERS
RESULT:
Small businesses grow and prots increase.
98% of our clients pay back their loan on time.
These are recycled, so more people lift
themselves out of poverty.
Our clients invest their prots in:
THEIR BUSINESS - They can employ
more staf, providing the opportunity
for someone else to work their way out
of poverty.
THEIR CHILDREN - Afording nutritional
meals, heathcare and school fees.
9
CHRISTMASAPPEAL
CITYA.M.
TUESDAY 27 NOVEMBER 2012
cityam.com/appeal
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work from company
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MAGIC Circle law firm Slaughter
and May said yesterday it has
chosen disputes resolution head
Richard Clark as its next
executive partner, stepping into
Graham Whites shoes when he
retires next year.
Clark will take up
responsibility for the firms
overall management strategy
from 1 May 2013, having joined
Slaughters 30 years ago as a
trainee.
Since making partner in 1991
Clark has specialised in banking
and international trade disputes,
as well as fraud and global asset
recovery cases.
Deborah Finkler will take over
Clarks place as head of disputes
resolution.
LATIN Americas biggest bank Itau
Unibanco is relocating its wholesale
operations to London, taking advan-
tage of the relative weakness of UK
and EU banks which are shrinking
much of their operations
The bank is relocating its wholesale
arms headquarters to its City offices,
according to a note sent to clients and
seen by City A.M., and has already
moved 20 staff from Lisbon to
Broadgate Tower. They includes capi-
tal market operations, investment
and corporate banking roles and
treasury operations.
That takes the total UK workforce to
70, and Itau Unibanco is believed to be
considering taking on more staff to
cover roles including compliance.
The banks 100 European back office
staff will still be based in Portugal.
The move stands in stark contrast to
many other major banks, which are
Brazilian bank
expands work
force in London
BY TIM WALLACE
cutting back in London the Centre
for Economics and Business Research
estimates more than 100,000 City jobs
have been lost since the start of the
financial crisis, with thousands more
set to go in the next year.
Quite simply, London is one of the
worlds most important financial cen-
tres, said a spokesman.
It is thought that the rapid growth of
Latin American firms is also a driver of
the move, pushing the bank to expand
its geographic footprint.
Richard Clark joined Slaughter and May in 1982 as a trainee
Itau Unibanco Holding SA
23Nov 19Nov 20Nov 21 Nov 22Nov
31.50
32.00
30.50
31.00
BRL
31.50
23Nov
TUESDAY 27 NOVEMBER 2012
10
NEWS
cityam.com
Capita Financial Managers let
off from FSA fine over Arch Cru
CAPITA Financial Managers,
which provides administration
services to asset managers,
yesterday escaped a 4m fine but
was publicly censured by the UKs
financial watchdog for failing to
monitor client cash under its
wing.
The company, which is a
subsidiary of Capita, escaped the
financial penalty from the
Financial Services Authority after
the watchdog said the company
would be unable to pay it. CFM
has already contributed 32m to a
BY MICHAEL BOW
BY ELIZABETH FOURNIER
compensation scheme.
Investors were hit by losses
when funds CFM was supposed to
be monitoring were suspended in
March 2009. CFM was Authorised
Corporate Director to the two
funds, run by investment manager
Arch Financial Products, and had
a duty to protect investors by
monitoring the fund prices but
failed to do so until late in 2008. It
was discovered the funds were
invested in highly illiquid private
equity assets, which meant
investors struggled to get their
cash out.
FSA director Tracey McDermott
said: Capita Financial Managers
has major responsibilities in
relation to funds holding a very
significant amount of investors
monies. However, its performance
in relation to the CF Arch Cru
funds fell well short of the FSAs
requirements.
A 54m payment scheme was set
up last June to compensate
investors who lost out.
The FSA said CFM would be
unable to make its 32m
contribution to the scheme as well
as a fine. The firm had to rely on
its parent firm Capita to help it
pay the fee.
GERMANYS Deutsche Bank has
hired up to 50 new front office
staff in Birmingham as the firms
efficiency drive forces it to look at
less expensive operations centres
than London.
The fixed income and equity
sales workers will focus on serving
smaller clients those which it may
not have been cost effective to
Deutsche hires in Birmingham
as it cuts back in expensive City
BY TIM WALLACE
serve from the City, where office
space and salary costs are higher.
The 50 posts in Birmingham are
likely to be expanded in the coming
months, while a similar process is
underway in the US, with staff
being taken on in Jacksonville,
rather than the more expensive
financial centre New York.
The bank is undertaking a 4.5bn
(3.64bn) savings programme,
which includes London job losses.
Slaughter and May picks Richard
Clark as next executive partner
WHICH COUNTRIES WOULD STRUGGLE TO COPE WITH NATURAL CATASTROPHES?
$0.78bn
POLAND
$10.23bn
TURKEY
$5.35bn
SAUDI ARABIA
$3.20bn
EGYPT
$7.78bn
MEXICO
$0.57bn
COLOMBIA
$12.68bn
BRAZIL
$2.40bn
CHILE
$2.64bn
NIGERIA
$79.57bn
CHINA
$0.08bn
HONG KONG
$2.90bn
PHILIPPINES
$14.12bn
INDONESIA
$1.41bn
THAILAND
$1.69bn
VIETNAM
$19.72bn
INDIA
$2.99bn
BANGLADESH
* Figures indicate amount underinsured (US $bn)
METHODOLOGY
Money spent
on insurance
Adjustmenttoaccountfor
diferencesinGDPlevels
Adjustmenttoaccountfor
diferencesinGDPlevels
Expectedloss
fromcatastrophes
UNDERINSURANCE BENCHMARK
HONGKONG 0.0
POLAND -0.2
COLOMBIA -0.2
THAILAND -0.4
BRAZIL -0.5
MEXICO -0.7
SAUDI ARABIA -0.9
CHILE -1.0
CHINA -1.1
NIGERIA -1.1
INDIA -1.2
TURKEY -1.3
EGYPT -1.4
PHILIPPINES -1.4
VIETNAM -1.4
INDONESIA -1.7
BANGLADESH -2.6
11
HEAVY rain continued to bring mis-
ery to swathes of the UK last night
as the government locked horns
with the insurance industry over the
future of domestic flood cover.
A week of poor weather has closed
dozens of major roads, while some
rail links are out of action and hun-
dreds of homes have been affected.
But recent events have focussed
attention on concerns that 200,000
households at high-risk of flooding
will not be able to access insurance
cover when the current deal runs out
in June 2013. At the moment insur-
ers offer universal cover in return for
guaranteed government investment
in flood defences.
City A.M. revealed earlier this
month that talks on a replacement
agreement are at a standstill follow-
ing Septembers cabinet reshuffle
and yesterday the industrys repre-
sentative body broke ranks to con-
firm that negotiations with the
government have hit an impasse.
Government
slammed over
flood insurance
BY JAMES WATERSON
Nick Starling of the Association of
British Insurers (ABI) said his mem-
bers wanted to push ahead with a
plan to charge every UK household an
extra 10 a year to subsidise a not-for-
profit universal cover scheme. But
the government has refused to pro-
vide the scheme with a temporary
overdraft facility, making it very dif-
ficult for it to go ahead.
No country in the world has a free
market for flood insurance with high
levels of affordable cover without
some form of government involve-
ment, Starling added.
Environment secretary Owen
Paterson told the House of Commons
that the ABIs statement was com-
plete nonsense, although he admit-
ted that finding a suitable solution
for the affected homes remained a
conundrum.
The government is wary of commit-
ting itself to the industrys preferred
scheme in case costs spiral out of con-
trol. This years UK flood payouts are
expected to pass 1bn, according to
accountancy firm PwC.
SHOULD HOMES AT RISK OF FLOODS BE
GIVEN INSURANCE SUBSIDIES?
Interviews by Kasmira Jefford
It is very difcult to nd insurance when you are
continually ooded out. It is up to the govern-
ment and locals councils to ensure that areas at risk are pro-
tected and some subsidy should be provided if they are not.
These views are those of the individuals above andnot necessarily those of their company
ANTHONY LEECH
AGRICULTURAL BANK OF
CHINA

I dont think there should be a subsidy. The prob-

lem we have in this country is there are too many
subsidies... My main concern about insurance is it should be
available, so the issue of price is slightly different.
GEORGE BROWN
SHELL
I think there should be some sort of subsidy...
if bad systems of sewage and things like that
and things are ooding then thats not the fault of peo-
ple that live there.
DAVE HARRISON
10 EIGHTY

CITYVIEWS
NEWS
TUESDAY 27 NOVEMBER 2012
Emerging economies
face catastrophe threat
COUNTRIES with high-growth
economies could see their progress
derailed by natural disasters,
according to research released
today.
It finds that emerging nations
such as Vietnam, China and India
do not have enough insurance to
cover the effect a major natural
catastrophe, leaving the countries
at risk of long-term economic
damage if they are severely affected
by an earthquake or hurricane.
The research, commissioned by
BY JAMES WATERSON
Lloyds of London from the Centre
for Economics & Business Research
(CEBR), says China insured just 1.4
per cent of losses arising from
natural catastrophes between 2004
and 2011, with $208bn (130bn) of
uninsured losses having a negative
affect on economic performance.
This insurance gap has a huge
and lasting impact on the ability of
businesses, governments and people
to recover from the earthquakes,
hurricanes, flooding and forest fires
that affect us all every year, said
CEBR chief executive Douglas
McWilliams.
LEHMAN Holdings is set to sell
apartment owner Archstone, it
announced yesterday, in a cash
and shares deal worth roughly
$6.5bn (4.05bn).
Lehman Brothers bought the
company, which at the very peak
of the housing boom was worth
around $22bn. But it will now get
just $2.7bn of cash and $3.8bn of
shares from developer rivals
AvalonBay and Equity Residential.
This will give the Lehman
creditors 9.8 per cent of Equity
Residential and 13.2 per cent of
AvalonBay. The two buyers will
split Archstone 60-40 in favour of
Equity Residential.
The sale came after the firms
initial plan to raise $3.45bn, in
what would have been the biggest
US real estate initial public
offering ever. Lehman had
acquired the entire firm, but the
two buyers pre-empted the listing.
The transaction delivers
significant return on the
investment we made earlier this
year to fully control Archstone
and has generated immediate and
considerable proceeds for our next
distribution to creditors, said
Lehman chairman Owen Thomas.
AvalonBay shares slid 1.7 per
cent in after-hours trading while
Equity Residentals fell some 1.5
per cent.
Lehman set to
sell off biggest
asset Archstone
BY BEN SOUTHWOOD
PUBLISHING company UBM will
move its tax base back to Britain by
the end of the week after sharehold-
ers overwhelmingly voted for the
return from Ireland yesterday.
The transition was emphatically
approved at a special meeting, with
99.997 per cent of votes cast in favour
of the move.
The former owner of the Daily
Express newspaper, which now runs
a successful events division as well as
owning over 100 business-to-business
print titles such as Property Week,
moved its tax base to Dublin in 2008
due to what it calle a less complex
tax system. It will now make a
speedy move back to the
UK.
It is anticipated that
UBM will become tax resi-
dent in the UK effective
30 November 2012, the
company said after the
move was approved yesterday
afternoon.
UBM had decided on the move
after George Osborne
made changes to cor-
UBM flies back
to UK after near
unanimous vote
BY JAMES TITCOMB
porate taxes in a bid to turn Britain
into a more competitive place to do
business.
The chancellor is slashing tax on
foreign earnings, and cutting corpo-
ration tax from 26 per cent to 22 per
cent by 2014. This compares to
Irelands 12.5 per cent rate.
Martin Sorrells advertising giant
WPP is set to follow UBM when its
shareholders vote on a return to the
UK next month, and the likes of
drinks giant Diageo and pharmaceu-
ticals firm Shire are also believed to
be considering a move.
UBMs lawyers are now set to
finalise the move. Although the com-
pany only generated around one-
eighth of last years 972m in
revenues, it was founded in the UK
and has a long history in Britain.
As well as the events and print
business, the company owns the
PR Newswire service as well as a
business information arm. It
employs around 6,500 staff
worldwide.
UBM, led by boss David
Levin, has a UK history
SWISS bank UBS, which last week
saw former trader Kweku Adoboli
jailed for a 1.4bn trading fraud, was
fined 29.7m by regulators yesterday
for failing to prevent the scandal.
The Zurich based bank, which lost
its chief executive Oswald Gruebel
over the trading debacle, managed
to reduce an original fine of 42.4m
the Financial Services Authority
handed it by settling early.
The FSA also said a 16m audit by
KPMG paid for by UBS and 34m the
bank clawed back from staff
involved in the trading scandal
including taking back bonuses and
UBS fined 30m by watchdog
over 1.4bn rogue trader loss
BY MICHAEL BOW
withholding 50 per cent of deferred
pay had been mitigating factors.
Adoboli was given a seven-year
sentence last week for $2.3bn
(1.4bn) of losses he racked up
making bad trades.
The fine is the third largest by the
FSA in its history, following a
59.5m fine for Barclays over Libor
and a 33.3m for JP Morgan for
failing to segregate client money
properly.
The FSA said UBSs controls were
seriously defective.
Separately, the Swiss financial
regulator Finma said it may call on
UBS to increase capital to back its
operational risks.
TUESDAY 27 NOVEMBER 2012
12
NEWS
cityam.com
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The new SL-Class.
The new Mercedes-Benz SL-Class is the perfect balance of agility
and power. The aluminium bodyshell trims up to 110kg off the
weight, while the muscular new V6, V8 and V12 engines pack
a smooth punch. The lithe SL-Class. Beauty with a sting in its tail.
Ocial government fuel consumption gures in mpg (litres per 100km) for the new SL-Class range: urban 16.6 (17.0) - 28.5 (9.9), extra urban 33.6 (8.4) - 46.3 (6.1), combined 24.4 (11.6) - 37.7 (7.5).
CO2 emissions: 270 - 169 g/km. Model shown is an SL 63 AMG at 124,025.00 on-the-road including panoramic vario roof at 735.00 and AMG Performance Package at 12,530.00 (on-the-road price includes VAT, delivery, 12 months Road Fund Licence,
number plates, new vehicle registration fee and fuel). The SL-Class range starts from 72,520.00 on-the-road. Prices correct at time of going to print.
Kweku Adoboli was sentenced to seven years in jail


AMAZON made 3.351bn in revenues
in the UK last year, private letters
published by the governments
Public Accounts Committee (PAC)
revealed yesterday.
Information shared by the web
retailer with the committee, intend-
ed to be confidential, revealed a 23
per cent rise in sales on
Amazon.co.uk last year. The UKs
website, which channels revenue to
Amazons European headquarters in
Luxembourg, made 2.4bn in 2010
and 1.9bn the year before that.
The public release of the figures is
against Amazons wishes. Andrew
Cecil, Amazon Europes director of
public policy, was grilled by PAC
members earlier this month over the
companys tax arrangements. He
was criticised when unable to
answer questions about certain
Amazons UK
sales revealed
by committee
BY JAMES TITCOMB
aspects of Amazons business, but
promised to share the figures on a
confidential basis.
The news came as Amazon revealed
it was issuing debt for the first time
since 1999, in a bid to continue an
enormous investment drive that has
hit profits in recent months.
The $3bn bond sale, which is being
handled by Goldman Sachs and
Morgan Stanley, is believed to have
attracted a good level of demand.
UK e-tail is paying off all round
T
HE UK component of Amazons
European revenues is a
startling figure. Amazons sales
hit 9.1bn (7.3bn) across the
continent last year. The new data
shows it took in 2.91bn, or almost
40 per cent, from amazon.co.uk
alone, and another 441m from
other UK business such as Lovefilm.
With Amazon getting 45 per cent
of its European income from the UK,
despite dedicated websites for
France, Germany, Spain and Italy, it
needs Brits loyalty. The new figures
also show the VAT revenues brought
in by Amazons UK sales.
Amazon UKs corporation tax
payment of just 1.8m for 2011,
thanks to a legal if convoluted tax
structure, generated political
outrage. It certainly made the case
once again for a simpler tax system,
but as these figures also reveal, the
liabilities in question are dwarfed by
the 416m in VAT generated last year
by Amazon.co.uks sales. And for the
last two years these VAT revenues
have increased by more than 50 per
cent a year. Web sales are booming
and thats a good thing all round.
The figures are also a reminder of
Amazons wafer-thin margins. It
earned just 74m in pre-tax profit on
its 3.351bn of UK sales, a bare 2.2
per cent. The cost Amazon pays for
each sale is at the edge of
sustainability. Consumers would
count the cost if it paid more tax.
BOTTOM
LINE
MARC SIDWELL
Amazon.Com Inc
26Nov 19Nov 20Nov 21 Nov 23Nov
237.50
242.50
227.50
232.50
$
243.62
23Nov
13
NEWS
cityam.com
LOYAL readers will remember that
The Capitalist reported last month
on five sparring solicitors from
DLA Piper, Clyde & Co and SJ
Berwin clubbing together to com-
pete in a black tie charity boxing
match near St Pauls.
The gloves are now firmly off
and The Capitalist is happy to report
that Saturdays punch-up at the
Grange Hotel has so far raised
over 23,000 for the
renovation of
Buhinga School in
Uganda.
No surprises that our
favourite Ed the Executioner
Eccles, a litigation associate at
Clyde & Co, came out on top in his
bout against Chris The Cremator
Ashbourne, a spy tells The
Capitalist. Apparently the
lawyer bashing went
down so well
they are
a l r e a d y
planning
the next
fight.
14
cityam.com
cityam.com/the-capitalist
THECAPITALIST
Retail fever has struck again. First Black
Friday, then Cyber Monday. And
adding to the spending spree, an unusual
invitation arrived on The Capitalists desk
yesterday morning. A festive red envelope
revealed an invitation to attend The Royal
Exchanges Christmas shopping event this
evening: Join us from 6-9pm for luxury
shopping, Christmas fayre, canapes and
cocktails in The Grand Cafe. Nothing
strange there, in fact it all sounds
delightfully jolly. Save for the fact the
luxury shopping centres invite was
emblazoned with the words HAPPY
REXMAS. Nothing quite says eat, drink
and be merry less than a rexy Christmas.
A milestone today for electronic charity box Pennies,
which has not only celebrated an anniversary, but is also
welcoming over 20 new partners to the cause. Among them are
Monarch Airlines, The Fragrance Shop and tailor Gieves &
Hawkes. The charity works on the basis that every penny counts
and therefore gives customers of affiliated firms the option to
donate a few pence to charity when paying for goods or
services by card. All of which will soon be handily explained by
Casualty actor Robson Green (pictured left) in a video that is
sure to tug on the heart and purse strings. President of
Visa Europe, Peter Ayliffe, and chief executive of Kingfisher,
Ian Cheshire, will both be speaking this morning at a
conference held by the charity at Bafta. Ayliffe informed
The Capitalist: As banking, shopping and payments
increasingly go mobile we should be working to ensure
Pennies benefits from this evolving channel.
`
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
FOLLOWING the announcement
yesterday that Canadian candidate
Mark Carney is the new chosen one
at the Bank of England, bookies
have wasted no time in setting odds
on his reign as governor.
Ladbrokes has set odds of 8/1
that Carney will authorise a greater
volume of quantitative easing than
his predecessor. They also make
interest rates 4/1 to rise above 2.5
per cent in Carneys first year,
while its much longer odds, at
25/1, that UK borrowing rates will
soar above 7.5 per cent under his
watch.
Bookies raise a glass to the
surprise new Bank governor
Only seven of the bookmakers
punters correctly backed Carney
for the job following his public
withdrawal from the running for
the position, which was good news
for the firm. Alex Donohue of
Ladbrokes said: Carney has foiled
a major gamble and were raising a
glass with him tonight.
No odds yet on Carney passing a
UK citizenship test, when he takes
it, although with practice questions
such as which two places can you
obtain advice if you have a problem
at work?, he may find revision an
informative exercise.
Mark Carney, the surprise new Canadian governor of the Bank of England
Adam The Ginger
Juicer Marcus (left)
takes on Salvatore The
Bee Chioccanii (right)
Twitter channel of the President of the European Council
Autumn end november: The night has fallen/ The bare
branches can be seen/ Even more lonely
A POETIC tweet yesterday from president of the European Council, Herman Van
Rompuy. Following an update to followers on important EU business such as Meeting
with Minister of Defence of France Jean-Yves Le Drian and Meeting with the
chairman of the EU Military Committee Patrick de Rousiers the above seasonal verse
appeared. Creative musings or an ode to the Eurozone crisis? Let the followers decide.
Herman Van Rompuy @euHvR
Lawyers slug it
out for charity
Visit
Were an FSA regulated Forex broker with a
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We provide MT4, one of the leading trading
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YOUVIEW, the internet-
connected set top TV box
company backed by BT and the
BBC, has been sued in the High
Court for trademark
infringement, and may have to
face a hefty payout or change its
name.
The lawsuit, from Yorkshire-
based telecoms firm Total, comes
after YouView lost an appeal to
have its name trademarked. Two
weeks ago, the High Court ruled
that YouView has a confusingly
similar name to Your View, a
business owned by Total.
Total is now seeking damages
as well as an injunction, which
would prevent YouView from
using its name. The companys
managing director Stuart Balkie
said: Despite the recent
vindication of our position in the
appeal proceedings we believe
that YouView has continued to
act without regard to our
registered mark and business
interests.
Arty Rajendra, of specialist
intellectual property law firm
Rouse, said that YouView would
be very likely to lose the case if it
were completed, but that 99 per
cent of similar cases end up
being settled behind closed
doors, with YouView likely to pay
a one-off fee to Total.
I would consider a sum of
over half a million pounds to be
reasonable, she added.
The news comes just months
after YouView launched,
following years of delays which
led analysts to question its
impact. The technology is being
rolled out to BT and TalkTalks
pay-TV customers.
A spokesperson for YouView
said the company has no
intention of changing its name.
YouView sued by Yorkshire telecoms
group in trademark name dispute
BY JAMES TITCOMB
BETFAIR has pulled out of Greece in
its second European exit in a month,
citing the threat of sanctions from
the countrys gambling authorities.
The exchange betting operator has
been trading without a licence in the
country, claiming that Greek gam-
bling laws violate EU ones.
Earlier this month the Greek
Gambling Commission announced a
clampdown on non-licensed online
bookies, threatening financial
penalties and criminal sanctions
against gaming operators that did
not have a permit. The changes have
forced Betfair out of Greece, where it
had expected to generate 13m of
revenue this year.
The firm has previously said it will
withdraw most of its business from
Germany, after its exchange model
in which players wage bets against
each other was made unviable by a
tax hike on sports betting.
Betfair, along with a host of other
online bookies and the European
Commission, want many countries
to liberate their market. The commis-
sion has launched proceedings
against nine European nations
including Greece and Germany and
will refer them to the European
Court of Justice in the coming weeks
if they fail to comply. Betfair yester-
day said it was disappointing that
the commission has not acted faster.
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
Betfair Group PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
750
745
740
755
760
765 p
760.00
26Nov
QUINTAIN moved a step closer to
realising its giant Greenwich
Peninsula scheme after announcing
yesterday it has submitted plans for
the first 500 homes on the site.
The developer secured a 300m
investment in June from Hong
Kong billionaire Henry Cheng,
helping to kick-start the 150-acre
project, which will see 10,000
homes built on the peninsula.
Announcing its half-year results
yesterday Quintain said the overall
value of its portfolio, which
includes its Wembley scheme, fell
1.7 per cent to 1.1bn in the six
Quintain pushes forward in
Greenwich as asset values fall
BY KASMIRA JEFFORD
months to the end of September as
property markets outside of
London continued to struggle.
Revaluations and other
provisions sent the firm to a pre-
tax loss of 29.1m for the six
months to the end of September.
Non-core regional assets are
losing valueif you look right
across the market you are seeing a
real distinction between the
performance in London and the
rest of the regions, said Max
James, who replaced founder
Adrian Wyatt as chief executive.
The group is selling off non-core
assets to cut its 465.2m debt pile
and focus on its London schemes.
TUESDAY 27 NOVEMBER 2012
17
NEWS
cityam.com
Quintains Greenwich scheme is set to deliver one of the UKs biggest housing projects
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IN BRIEF
International Greetings on track
n International Greetings, the maker
of wrapping paper, cards and
childrens party bags, said sales and
underlying profits for the six months
to 30 September were on track to
meet City expectations, boosted by
strong growth in the US. The UK-
listed group is gearing up for the
festive season and has made over
65m Christmas crackers at its new
facilities in China. It also reported it is
selling record levels of gift wrapping
despite tough market conditions in
continental Europe.
McGraw-Hill sells textbook arm
n US financial services and
publishing firm McGraw-Hill said
yesterday it will sell its educational
publishing unit to buyout firm Apollo
Global for $2.5bn (1.6bn), ending
talk of the business being spun off as
a public company. The sale completes
a shift for the 124-year-old firm,
which has published educational
textbooks for nearly a century.
As a result, the company will change
its name to McGraw-Hill Financial.
The deal fetched less than the $3bn
figure originally mooted.
Samsung finds labour failures
n Korean electronics giant Samsung
said yesterday it had found evidence
of several instances of inadequate
practices at its suppliers in China.
An internal audit of working practices
at 105 Chinese suppliers found
repeated examples of excessive
working hours and incorrect
contracts. The company, which is now
investigating further factories, said it
would remedy the failures.
Working conditions in China have
become a difficult issue for many of
the worlds top technology firms.
Greece
State operator Opap has a monopoly
on some markets including sports
betting, with other companies
refused licences
Cyprus
Betfair has complained to the
European Commission on new
legislation that efectively bans
exchange-based bookies
France
Liberalised online
gambling market in 2010
A recent 5%tax on sports betting has forced Betfair to pull out of the country
Belgium
Only ofers online gaming licences to ofine bookies, and has blocked
websites of many internet gambling companies
Spain
Introduced regulated online
gaming in June this year
Belgium um
Only ofers online gaming licences to ofine bookies and gam n gam o
ALL BETS ARE OFF FOR GREECE
Betfair is cashing out of
Greece over crackdown
BY JAMES TITCOMB
Cranswick PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
780
760
740
800
820
840 p
812.50
26Nov
GlaxoSmithKline PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
1,320
1,310
1,330
1,340
1,350 p
1,330.00
26Nov
SDL PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
450
475
500
525 p
438.50
26Nov
TUESDAY 27 NOVEMBER 2012
18
NEWS
cityam.com
IN BRIEF
Standard Life to open Dubai office
nStandard Life has unveiled plans to
expand its presence overseas by
opening its first office in the Middle
East. The insurer revealed yesterday it
has been granted a licence by the
Dubai Financial Services Authority to
open a branch of Standard Life
International within the Dubai
International Financial Centre. The
move follows news last month that it
plans to expand into South East Asia
by opening an office in Singapore.
German carmakers want loophole
nGerman car manufacturers are
seeking to widen a loophole in EU
regulations that would allow them to
produce more cars with carbon
emissions above a 2020 EU target. EU
car makers are divided over how a
2020 EU target to cut emissions to an
average of 95g per km should be
shared across the industry. A proposal
from German automakers body VDA
would allow manufacturers to add on
around 10 grams of carbon per km.
EasyJet rolls out allocated seats
nBudget airline EasyJet will from
today allow passengers on all of its
flights to choose a seat, for an
additional cost. Following a trial in
April, the carrier is rolling out allo-
cated seating across all routes. Chief
exec Carolyn McCall said last week the
trial had originally targeted business
travellers, but found that families and
older customers were also keen to pay
extra to reserve a particular chair.
BRITAINS largest pharma company
is hoping to spend over half a billion
pounds expanding into consumer
markets in India and Nigeria, where
it earns significant revenue from
the highly popular Horlicks drink.
GlaxoSmithKline (GSK) announced
yesterday a 591m offer to boost its
stake in its Consumer Healthcare
subsidiary in India, along with a
62m bid to buy more shares in its
Nigerian consumer wing.
The moves follow chief executive
Andrew Wittys 2010 pledge to steer
the company away from traditional
white pill and Western markets.
GSK warned this year that it con-
tinues to be hit by Western govern-
ments enforcing price cuts on
drugs, and that it will continue to
look elsewhere for growth.
GSK Consumer Healthcare is a
well established business in India
and its leading product, Horlicks, is
an iconic household brand, said
GSK executive David Redfern.
Glaxo heats up
move towards
drinks markets
BY JULIAN HARRIS
The Nigerian division also specialis-
es in Horlicks, along with Panadol,
Sensodyne, and Lucozade.
GSK has reached an agreement in
principle to increase its stake in GSK
Consumer Nigeria to 80 per cent, the
maximum possible while still keep-
ing the division publicly listed.
Meanwhile the voluntary open
offer for its Consumer Healthcare
subsidiary in India would take its
holding up to 75 per cent again the
highest allowed by listing rules.
GSKs shares close down 1.26 per
cent in London at 1,330p.
Profit warning knocks 30m off
troubled software company SDL
TRANSLATION software company
SDL saw more than 30m wiped off
its value yesterday after posting a
surprise profit warning.
When chief executive John
Hunter was shown the door earlier
this month, interim boss Mark
Lancaster conducted an internal
review of the business. Yesterday
the company revealed that it
expected profits 3m-4m up to
10 per cent less than previously
forecast.
The news sent shares in SDL
plummeting as much as 16 per cent
yesterday, before they finished
BY JAMES TITCOMB
eight per cent lower, knocking
32.5m off SDLs market
capitalisation.
The company which offers a
range of content management
software as well as translation
services has not seen shares this
low since mid-2010.
It said the profit warning was
due to a cautious outlook on
contract completion in the second
half of the year, coupled with the
unstable macroeconomic
environment.
Peel Hunt analyst Alex Jarvis,
who cut her price target on the
stock yesterday, said the
announcement was one of those
warnings that raise a lot of
questions of management and
controls, and comes on top of
concerns over strategic positioning
of the groups technology offering.
Cranswick profits jump as pig
prices passed on to customers
CRANSWICK, the sliced meat and
sausage-maker, yesterday reported
a 21 per cent rise in half-year
profits as it succeeded in passing
higher pork prices onto its
customer.
The Yorkshire-based group
warned last month that UK prices
were at a three-month high and
would continue rising because of
high livestock feed prices and the
introduction of new EU laws on
animal welfare that come into
effect in January.
Cranswick, which supplies
supermarkets including Tesco, said
BY KASMIRA JEFFORD talks with customers were
progressing well and it had
managed to recoup some of the
inflation, although this is likely to
mean higher prices being passed
on to shoppers.
But Cranswicks finance director
Mark Bottomley said he did not
expect pig prices to rise sharply
during the run-up to Christmas.
Costs are stabilising now, they
are round about just a touch over
160 pence per kilo, Bottomley said
yesterday.
Pre-tax profits rose 21 per cent to
22.5m in line with analysts
expectations.
Underlying revenue rose five per
cent to 418.6m in the period, not
including the acquisition in June
of Milton-Keynes-based Kingston
Foods, which manufactures cooked
meats.
LAW firm Pinsent Masons
yesterday announced a half-year
turnover figure of 146m, a four
per cent increase on the same
period last year.
Pinsents, which earlier this year
secured a tie-up with Scottish firm
McGrigors, also said it had hired
corporate finance specialist
Jonathan Beastall from rival
Clifford Chance. Stripping out
revenues from McGrigors, the
turnover figures was 105m up
six per cent from last year.
I anticipate that our enhanced
reach and capability will put us in
good stead for the second half of
the year, said managing partner
David Ryan.
Pinsent grows
turnover 4pc
BY ELIZABETH FOURNIER
STOBART Group has shelved plans
to enter the retail bond market,
though its board has not ruled out
an offering in future.
The company said it decided not
to proceed following the entry of
larger bond issuers at higher
coupon pricing.
Stobart chief financial officer
Ben Whawell said: "We will keep
under review the possibility of
issuing a retail bond in the future,
as we see it as a potential
attractive funding option, but only
when we feel the cost of the bond
to the company, its attractiveness
to investors and its liquidity
characteristics are in the right
alignment.
Stobart pulls
its retail bond
BY JENNY FORSYTH
THE INCREASING need for
security checks in online banking,
gambling and shopping has driven
identity screening firm GB Group
to a 44 per cent rise in sales in the
first half of its financial year.
The Chester-based business,
whose software checks online
registrations and logins against
databases of information in order
to verify them, has made a number
of acquisitions in the last year, but
said its biggest driver of growth
was the shift from paper forms to
electronic filing systems.
The company reported turnover
of 17.7m in the six months to the
end of September, up from 12.3m
in the same period last year. Profit
Identity screening company GB
Group driven by online demand
BY JAMES TITCOMB
was up 58 per cent to 1.5m with
acquisitions stripped out.
As online and cross-border
trading continues to increase, we
remain confident that there is a
corresponding demand for our
identity management services
which are designed to enable
online business and make it safe
and easy for consumers and
businesses, the firms chief
executive Richard Law said.
The six months of trading was
the first complete period to
include three recent acquisitions
of Data Discoveries, Advanced
Checking Services and Capscan,
and the group has continued its
shopping spree since September,
spending up to 3m on CRB check
software TMG.
BORIS Johnson yesterday urged the
government to make it easier for
foreign students to study in the UK.
Despite the hurdles for students,
he revealed that the number of
Indian tourists visiting London hit
145,000 in the first half of 2012
up from 113,000 in the same period
last year.
Speaking on a trade visit to India,
the Mayor of London said more
must be done to tap the huge
spending power of overseas
students and said he had written to
the home secretary to request that
students are removed from the
Boris says UK is losing foreign
students due to tough visa rules
BY JAMES WATERSON
governments net immigration
target.
The government is right not to
open the door to those who will
simply be a drain on the state, but
its crazy that we should be losing
Indias top talent and the global
leaders of the future to Australia
and the United States, he said.
The coalition has set an official
target of reducing net immigration
from its current level of 216,000 a
year to less than 100,000.
Last week the Mayor of London
told City A.M. it was also absurd
that the capital was losing Chinese
tourists to Paris because of visa
restrictions.
Johnson also presented a petal from the London 2012 Olympic torch to Indian athletes
A SPLIT within the Bank of Japan was
laid bare yesterday, with newcomers
to its board pressing to strengthen
commitment to an ultra-loose policy.
Pressure on the central bank for
bolder action has intensified in the
run up to next months election
with leading opposition candidate
Shinzo Abe calling for the central
bank to adopt negative interest
rates and other radical measures.
Existing Bank governor Masaaki
Shirakawa repeated his view that
monetary easing alone can not beat
deflation, citing fiscal alternatives.
But minutes of the 30 October
meeting of the Banks nine-member
board released yesterday showed
Takehiro Sato, one the newcomers,
had suggested a more
activist stance on
monetary expansion
once Shirakawas term
ends in April.
Japans general
election is scheduled for
16 December.
Bank of Japan
split over new
stimulus ideas
BY CITY A.M. REPORTER
CUTTING entire government depart-
ments, freezing public sector pay and
benefits, and allowing some cuts to
NHS spending are the only ways to
put state spending on a more sustain-
able long-term footing, Conservative
MPs warned yesterday.
It came as Arbuthnot Banks eco-
nomic adviser Ruth Lea warned the
government will not balance its budg-
et until 2017, and will also miss its tar-
get to have debt as a percentage of
GDP on the way down by 2015.
The Free Enterprise Group of MPs
called for another 22bn in spending
cuts. Kwasi Kwarteng MP called for
benefits to be frozen in cash terms,
arguing it is unfair that wages rise by
just 2.7 per cent per year while bene-
fits, linked to inflation, rise at closer
to five per cent. He believes that
would save the taxpayer up to 7bn
over the rest of this parliament.
Tory MPs demand pay
and benefits freeze
BY TIM WALLACE
Similarly he believes a public sector
pay freeze which has not been imple-
mented so far despite the chancellors
efforts will save another 7bn.
David Ruffley MP called for the
Department for Business, Innovation
and Skills, as well as the Department
for Culture, Media and Sport to be
abolished, saving at least 2bn a year.
Both carry out work already done by
other departments, or which could be
done better elsewhere, he said.
Ruffley agreed with PwC economist
Andrew Sentance that this should just
be the beginning. The former mone-
tary policy committee member said
there are currently 46 departments,
which could usefully be cut to 10.
Meanwhile practicing GP, Philip Lee
MP, called for the ringfence around
the NHS to be dropped. He suggested
starting with the drugs budget, trans-
ferring more responsibility to patients,
particularly for lifestyle-induced condi-
tions, saving more than 400m a year.
IN BRIEF
Inflation expectations ease
n Inflation expectations have fallen
slightly this month, according to a
prominent survey released
yesterday yet people still expect
prices to keep ticking up. Median
inflation expectations for the year
ahead edged down to 2.8 per cent,
the YouGov report for Citigroup said,
down from three per cent in October.
In the longer term the next five to
10 years inflation is expected to be
3.4 per cent, the survey showed.
There is little sign of deflation
fears, it added. The share of people
that expect prices to fall or be stable
in the year ahead is only four per
cent below the long-term average
of nine per cent.
Taxes crippling the high street
n High taxes on empty retail
properties are crippling the recovery
agenda, a leading group of
chartered surveyors will argue this
morning. More than nine in 10
surveyors say that the charges on the
high street are significantly
detrimental to UK town centres.
The charges faced by property
owners are quite simply crippling the
high street and preventing
businesses of all types from
achieving financial stability, said
Simon Rubinsohn, economist at the
Royal Institution of Chartered
Surveyors (RICS). The group says the
coalition should extend exemption
periods for high street firms.
Argentine floods hit food prices
n Flood-hit Argentina will harvest
corn later than expected this season,
supporting already-high world food
prices as consumer nations are forced
to rely longer on thin US supplies.
Argentina is the number two corn
exporter after the US, where the
worst drought in decades trampled
this years crop. With food stocks hit
by dry weather in breadbaskets
Russia and Australia as well,
importers are looking to South
America. But Argentine growers have
said they will produce 20 per cent
less corn than initially forecast due to
excessive August-October rains that
turned prime Pampas farmland into
unplantable mush.
L
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E
A
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Kwasi Kwarteng wants pay frozen
Masaaki Shirakawa
steps down in 2013
BRITISH banks are being hit hard
by incoming regulations, hurting
their ability to lend and so
damaging the economy, TheCityUK
warned yesterday.
The lobby group particularly
singled out the impact on small
firms, who are more reliant on
bank funding than bigger
businesses, and called on the
government to slow down the
Banks warn tough new capital
rules hit lending to small firms
BY TIM WALLACE
implementation of the new rules to
limit the damage being caused.
New capital requirements in the
UK are tougher than those being
imposed on banks in the rest of the
EU, meaning the government
should not worry about stability
being undermined by a slower
timetable, it argued.
But TheCityUK also said the state
needs to do more to promote non-
bank lending to SMEs to reduce
their dependence on banks.
TEN thousand first-time buyers took
out a mortgage in London during
the third quarter of the year,
according to Council of Mortgage
Lenders (CML) data out yesterday.
The figure was the highest on the
CMLs records since the fourth
quarter of 2009, yet its research also
revealed significant barriers to
getting on the property ladder in
the capital.
London has the lowest home
ownership rate in the UK, the CML
said. Buyers on average need to be
older, with higher earnings and
more parental help.
The London housing market
faces similar issues to the rest of the
UK in terms of a lack of supply and
affordability, yet different
demographics, population flows
and tenure patterns mean that it is
also unique, commented CML
director general Paul Smee.
The average age of a first time
Highest number of
first time buyers in
London since 2009
BY JULIAN HARRIS
buyer in London is 31, the CML said,
compared to 29 elsewhere.
Parental assistance is greater,
the report added. Recent estimates
indicate that only 28 per cent of
first-time buyers in London bought
unassisted, compared to 34 per cent
in the UK overall.
Duncan Stott from the campaign
group Priced Out said that the
CMLs figures exposed how many
people are reliant on the so called
Bank of Mum and Dad.
Sky-high house prices are
destroying the aspirations of a
whole generation of would-be first
time buyers, Stott said. Britain
simply cant call itself a property
owning democracy if home-
ownership is only open to those
from the wealthiest backgrounds.
The average first time buyer in
London now has an income of
50,000 per annum, compared to a
UK-wide average of 34,000 for
workers making their first step onto
the property ladder.
TheCityUK said small businesses need more access to funding, but new rules hit new lending
TUESDAY 27 NOVEMBER 2012
19
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IN BRIEF
STEELMAKER Mittal, which acquired
Frances Arcelor in 2006, is no longer
wanted in France due to years of bro-
ken promises, Industry Minister
Arnaud Montebourg said yesterday,
intensifying a row over plans to close
two furnaces in north-eastern France.
Montebourgs attack on
ArcelorMittal, which he later quali-
fied, risks exacerbating tensions in a
dispute that is central to Socialist
President Francois Hollandes efforts
to save jobs and reverse years of indus-
trial decline.
It came after Montebourg, one of
the most left-wing ministers in the
government, said last week France
could nationalise the companys
Florange site on a temporary basis
while the government tries to find a
buyer.
ArcelorMittal, the worlds largest
steelmaker, has said it will shut down
two blast furnaces at Florange from 1
December unless the government can
find a buyer to operate them.
French minister
wants Mittal to
leave country
BY HARRY BANKS
We no longer want Mittal in France
because they havent respected
France, Montebourg said in an inter-
view with Les Echos business daily
published on Monday.
A source close to Indian-born
Lakshmi Mittal, who according to
French media is due to meet with
Hollande today, saidmanagement
were very shocked at Montebourgs
words.
These are quite violent declarations
against a company which employs
20,000 people in France, the source
said.
Egypt unrest and worries over
funding slash Centamin shares
CENTAMIN was yesterday the
second biggest faller on the FTSE
250 as funding worries spooked
investors.
The mining company said it
needed to make a gold shipment
from Egypt shortly to meet its
working capital needs.
The growing political tension in
Egypt has also unsettled
shareholders.
Centamin said yesterday it was
preparing to resume exports from
Sukari, which had been halted after
an October court judgement
questioning its right to operate its
BY JENNY FORSYTH
only mine.
It has now lodged an appeal
against the ruling, and has decided
to resume exports. Operations at
Sukari had continued since the
judgement.
Yesterday Centamins share price
dropped 6.34 per cent.
Numis analysts said: While there
is plenty of cash on the balance
sheet, Centamin may have to move
more cash in-country to meet those
commitments, unless an export is
made soon.
Separately, trouble continued in
Egypt over the weekend following
last weeks decision by President
Morsi to place all of his decisions
beyond legal challenge. The protests
in Egypt do not look like they will
come to a halt any day soon so
expect stocks with exposure to the
area to underperform.
Oil explorer Tullow announces
fresh discovery at Kenyan well
TULLOW Oil confirmed yesterday
that its Twiga South-1 well in Kenya
had discovered oil, raising prospects
that the region holds a significant
reservoir.
The British explorer said it had
found 30 metres of net oil pay at the
well, its second at the Lokichar
Basin, onshore Kenya. The oil was of
a similar quality to that found at
the first Ngamia well about 22km
away, it said. Tullow found 100m in
more shallow sections at Ngamia,
which was drilled closer to the
basin fault.
This immediate follow on
BY CITY A.M. REPORTER
discovery reaffirms the considerable
prospectivity of the Lokichar Basin,
said exploration director Angus
McCoss in a statement.
Tullow said it had also found
about 800m of gross oil pay deeper
in the rock, a potential new play
that would need further evaluation
to understand how large it was and
whether it was productive. The
commercial viability of the Lokichar
finds is yet to be ascertained, but
hopes are rising that Kenya could
become a petroleum producer and
exporter.
The 30 metres discovered at Twiga-
1 was in-line with pre-drill estimates,
said broker Morgan Stanley.
The well results to date reaffirm
the basins multi-billion barrel size
and support our belief of the
regions transformational potential,
Morgan Stanley said.
Tullow Oil PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
1,360
1,370
1,380
1,390
1,400
1,410 p 1,366.00
26Nov
Centamin PLC
26Nov 20Nov 21 Nov 22Nov 23Nov
60
62
64
66
68
70 p
60.80
26Nov
DEFENCE manufacturer Cobham
yesterday poached the group
finance director of its FTSE 250
aerospace technology rival Senior
to become its new chief financial
officer.
Simon Nicholls will leave Senior
at the end of April next year after
five years in the post to replace
outgoing Cobham CFO Warren
Tucker, who will stand down at
the firms annual meeting after
ten years.
Nicholls appointment comes at
Cobham recruits chief financial
officer from listed peer Senior
BY MICHAEL BOW a time of tough markets for
Cobham, which warned last
month of a slowdown in revenues
on the back of a shrinking US
defence market. Senior, which
makes components used in the
aerospace and defence market, is
seeking Nicholls replacement.
Nicholls, who began his career
at PwC, has previously been CFO at
Hanson North America and
financial controller for former
FTSE listed firm Hanson. He said:
I leave the Group, to take the next
step in my career, at a time when
it is performing strongly.
TUESDAY 27 NOVEMBER 2012
20
NEWS
cityam.com
Cobham has snapped up Seniors group finance director Simon Nicholls to take over
ROSNEFT may dig deeper into its
pockets and raise funds from
TNK-BP to help finance its $55bn
(34.3bn) takeover of the Anglo-
Russian oil firm that will make it
the worlds largest listed oil firm
by output.
Rosneft said in a Eurobond
prospectus, dated 23 November,
that it may use its and TNK-BPs
existing cash which totalled
over $15bn at 30 September to
fund the deal in combination
with borrowings from banks.
It was not clear how exactly
state-controlled Rosneft would
rely on TNK-BP to finance the
deal.
Some analysts say the joint
Rosneft may use TNK-BP cash
and loans to fund takeover
BY CITY A.M. REPORTER
venture may eventually pay a
special dividend or loan funds to
Rosneft to help complete the
deal.
Rosneft needs $45bn in cash to
fund its two-stage takeover of
TNK-BP. In the first leg, which
has already received Russian
government and board approval,
it will buy out British oil major
BPs one-half stake for stock and
$17.1bn in cash.
A source close to the deal told
Reuters that Rosneft will hold
roadshow for a dollar-
denominated Eurobond early
this week.
Rosnefts offering is expected
to be of benchmark size,
meaning it would raise $500m or
more.
POWER plant operator and oil
refiner Essar Energy yesterday
reported an 18 per cent rise in
core earnings for the first-half
as the benefit of a contribution
from its Stanlow refinery in
Cheshire offset its struggling
Indian power business.
The company, which is 77 per
cent-owned by privately held
Indian conglomerate Essar
Group, said operational
earnings before interest, tax,
depreciation and amortisation
(Ebitda) was $383m (239.1m) for
the six months ended 30
September.
The company, which recently
changed its accounting period,
Essar Energy gets boost from
Stanlow as earnings increase
BY CITY A.M. REPORTER
reported operational Ebitda of
$324m in the six months to 30
June 2011.
Essar said Stanlow, the second
largest UK refinery which Essar
acquired from Royal Dutch Shell
for around $1.3bn in March last
year, had made good progress,
with operational Ebitda of
$132m in the first half.
The companys power
business, meanwhile, continues
to be hit by regulatory and coal
supply issues in India, where it
is struggling to obtain the
permits it requires to mine the
coal needed to fuel its stations.
Essars London-listed shares
rose almost five per cent in
trading yesterday, closing up
4.87 per cent at 128.65p.
ILVA may close plant over seizure
nItalys ILVA said it may have to close
Europe's biggest steel plant after
judges ordered the seizure of steel and
semi-finished products in a corruption
probe that saw several managers
arrested yesterday. Justice system
officials said the prosecutors arrested
Emilio Riva, chairman of the group that
owns ILVA, and six others including his
son Fabio. No comment was
immediately available from the Riva
group.
Ex-SAC manager granted bail
nA former SAC Capital portfolio
manager was released on $5m bail
yesterday after making his first
appearance in a New York court on
charges of making illegal trades that
hedge fund titan Steven A Cohen
personally signed off. Mathew
Martoma, 38, of Boca Raton, Florida,
was charged last week in what US
prosecutors called the most lucrative
insider-trading scheme ever. Cohen
was not charged with wrongdoing.
Regulators to discuss derivatives
nGlobal regulators will meet in New
York tomorrow to hammer out a deal on
how to supervise the $650 trillion
derivatives market. The Commodity
Futures Trading Commission has been
criticised by other regulators for its
aggressive stance in applying domestic
US rules to traders abroad. Together with
the Securities and Exchange
Commission, it will now host a meeting
for international derivative regulators.
ArcelorMittal
26Nov 20Nov 21 Nov 22Nov 23Nov
11.60
11.70
11.40
11.50

11.53
23Nov
TUESDAY 27 NOVEMBER 2012
21
Black Friday
hangover dogs
Wall St stocks
W
ALL Street slipped
yesterday, pulling back
from last weeks gains, as
retailers fell on concerns
about heavy discounts at the start
of the US holiday shopping season
and the overhang of the fiscal
cliff kept investors wary of
making big bets.
The Nasdaq outperformed to close
higher, led by gains in eBay and as
Apple continued its bounce back.
The Dow Jones industrial average
fell 42.31 points, or 0.33 per cent,
to 12,967.37. The Standard & Poors
500 dropped 2.86 points, or 0.20 pe
rcent, to 1,406.29. The Nasdaq
Composite gained 9.93 points, or
0.33 per cent, to 2,976.78.
The S&P 500 cut most of its losses
during the session and managed to
stay above the psychologically
important 1,400 level. It also
remained above the 200-day
moving average, maintaining its
long-term uptrend.
The S&P 500 consumer
discretionary index fell 0.5 per cent
after the start of the holiday
shopping season over the four-day
Thanksgiving weekend. Target, one
of the largest retailers by market
value, fell 2.6 per cent.
The concern is big retailers are
discounting so much, sales look
better, but at what cost? said
Angel Mata, managing director of
listed equity trading at Stifel
Nicolaus Capital Markets.
Bucking the retail trend, shares of
eBay closed at their highest in
almost eight years, rising 4.9 per
cent to $51.40, as the online
marketplace notched strong sales
on Cyber Monday.
Amazon gained 1.6 per cent to
$243.62.
B
RITISH blue chip shares fell
yesterday, with Barclays tumbling
more than five per cent, as the
market retreated after its best
performance this year last week.
Barclays dropped 5.4 per cent after top
shareholder Qatar Holdings cashed in its
remaining warrants in the UK bank, a
move which led to the sale of up to 303.3m
shares.
Bookrunners Deutsche Bank and
Goldman Sachs said the Barclays shares
were sold at 244p each, a four per cent dis-
count to Fridays closing price, but did not
confirm whether all the stock had been
sold.
Overall, banking was the weakest blue
chip sector, knocking over 11 points off the
FTSE 100 index. The sector, though,
showed little reaction to the surprise news
of the appointment of Bank of Canada
chief Mark Carney as the next governor of
the Bank of England.
Chancellor George Osborne said Carney
brought the skills to revamp financial reg-
ulation at a time when the BoE will take on
a new role in charge of British banking
supervision.
Aside from the drop by Barclays, RBS fell
3.2 per cent on concerns it could receive
separate fines for its alleged involvement
in the Libor-fixing controversy, one from
the Financial Services Authority and one
from US regulators.
The FTSE 100 closed down 32.42 points,
or 0.6 per cent, at 5,786.72, having risen 3.8
per cent last week and posting five straight
days of gains. Trading was modest, at
around 80 per cent of the FTSE 100s aver-
age 90-day daily volume, as investors await-
ed the outcome of a Eurozone meeting
over Greek debt.
Barclays leads FTSE down as Qatar
Holdings sells remaining warrants
BESTof theBROKERS
British Land Company PLC
20Nov 21Nov 22Nov 23Nov 26Nov
p 545
540
535
530
525
520
515
538.00
26 Nov
BRITISH LAND
UBS has upgraded the
property firm from a
neutral rating to
buy, citing reduced
risk from the companys
ageing portfolio. UBS
upped British Lands
target price to 580p.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
26Nov 20Nov 21Nov 22Nov 23Nov
5,840
5,820
5,800
5,740
5,760
5,720
5,780
5,786.72
26 Nov
Compass Group PLC
20Nov 21Nov 22Nov 23Nov 26Nov
p 730
720
710
700
690
716.50
26 Nov
COMPASS GROUP
Analysts at Nomura have
upped their guidance on
the caterer, increasing
the price target from
800p to 832p on the
back of improving sales
and margins. It retains its
buy guidance.
Darty PLC
20Nov 21Nov 22Nov 23Nov 26Nov
p 54
52
50
48
46
44
50.50
26 Nov
DARTY
N+1 Singer has upgraded
the electrical goods
retailer to a buy on
news it will sell its
lossmaking Italian
business. London-listed
Darty has operations in
four other countries.
Alvarez & Marsal
The professional services firm has
appointed Faisal Galaria as a
senior director. He was previously
vice president of Spotify, where
he was responsible for mergers &
acquisitions and strategic
partnerships. Galaria has also
held senior roles at Skype and
eBay.
Pinsent Masons
Jonathan Beastall has been appointed to the law firms
corporate finance team. He joins from Clifford Chance,
where he was a partner for 19 years. Beastall specialises in
advising clients on independent price offerings and other
equity capital raising transactions.
Capgemini
Cliff Evans has been appointed to the newly-created
position of chief digital officer at the consultancy. He was
previously transformation director for the defence and
security sectors at Capgemini. Evans is a chartered
mechanical engineer.
Baird Investment Banking
The investment bank has appointed Satoshi Matsumoto as a
managing director and director of Japan mergers &
acquisitions. He was most recently a managing director at
Barclays Capital. Matsumoto has also previously held senior
roles at Nomura Securities.
MetLife
The insurance company has appointed Andy Stephenson as
national sales manager for its employee benefits business.
He joins from Aviva, where he was group risk national sales
manager. Stephenson has more than 23 years experience in
the industry, and has also held roles at Legal & General, RSA
and Zurich.
John Lewis Partnership
Paul de Laat has been appointed to the newly-created role
of partnership customer insight director. He was most
recently customer value managing director at Lloyds
Banking Group.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
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in association with
S
IR Mervyn Kings replacement
as Bank of England governor
has finally been announced.
But we shouldnt let our
excitement at the
appointment of Mark Carney distract
us from the severe structural issues
that persist beneath the surface.
The Bank has recently come under
strong scrutiny for the way it
handled the financial crisis. Its
economic forecasts have been
criticised by David Stockton (former
chief economist of the US Federal
Reserve), who pointed out that the
Bank routinely overestimates growth
and underestimates inflation. In
addition, Andrew Tyrie MP, chairman
of the Treasury Select Committee,
has criticised the scale and scope of
W
E should be prepared for
changes at the Bank of
England when the new
governor, Canadian Mark
Carney, takes over in the middle of
next year. George Osborne has chosen
to go outside the UK economic policy
establishment in his choice of a
successor to Sir Mervyn King. And that
suggests that he is looking for a fresh
perspective on the critical issues facing
the Bank of England over the next five
years.
There will be three big challenges in
the new governors in-tray. The first is
how to chart an exit from the mone-
tary policies put in place to fight the
financial crisis extremely low interest
rates and large injections of quantita-
tive easing. These policies have had the
benefit of stabilising the economy and
supporting a return to growth. But
they have had a number of unfortu-
nate side-effects.
Inflation has run persistently above
the governments 2 per cent target
averaging about 3.5 per cent over the
past five years. Returns to savers have
been undermined by a prolonged peri-
cityam.com/forum
Its unlikely that well
build a sustainable
recovery with current
extreme policy settings
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

22
TUESDAY 27 NOVEMBER 2012
ANDREW SENTANCE
Three challenges await the new
governor of the Bank of England
od of very low interest rates. And the
Bank of England has accumulated a
substantial holding of the national
debt around a third of the total.
It is unlikely that we will build a sus-
tainable recovery on the basis of these
extreme policy settings. So the new
governor needs to plan an exit strategy
to a more normal world in which infla-
tion is under control, interest rates
offer a better return to savers and the
Banks holdings of government bonds
are returned to the private sector.
The second challenge facing the new
governor is in reorganising the Bank of
England to manage its greatly
increased range of responsibilities.
When I joined the Monetary Policy
Committee (MPC) in 2006, the main
responsibility of the Bank was mone-
tary policy keeping the economy on a
steady course with stable prices. And it
had the benefit of operating in the
benign economic environment that
prevailed before the financial crisis.
The Bank of England which Mark
Carney will inherit will be operating in
a more uncertain and volatile world.
And it will have not one, but three very
big and challenging responsibilities:
monetary policy; financial stability;
and financial regulation all of which
contain difficult problems for the Bank
to grapple with. Dealing with these
problems will require not only the
skills of a capable governor, but also a
strong team of deputy governors and
supporting senior managers.
In my view, this means that the
Banks deputy governors will need to
take on more responsibility in their
particular areas. And the new governor
will therefore need to adopt a more
supervisory role in the running of the
Bank, delegating more to his deputies
and supporting management team.
Carney may not agree with this model
and may have other ideas. But whatev-
er he decides, he will need to put in
place a management structure which
reflects its expanded range of roles and
responsibilities.
Third, the new governor faces the
challenge of rebuilding confidence
among the general public in the finan-
cial system, which has clearly been
dented by the experience of the finan-
cial crisis. In doing this, regulatory
changes including the ring-fencing
of investment banking activities will
be important. But that wont be
enough. The new governor must also
work closely with banks and other
institutions to ensure that big financial
risks are better identified and man-
aged. It was a failure to do that which
contributed greatly to the banking
problems we experienced from 2007
and the financial crisis which then fol-
lowed.
In meeting these challenges, Carney
will hopefully have one great advan-
tage. As someone who is already an
experienced international central
banker, he will bring a wealth of inter-
national experience to his new role. In
the highly-globalised economy we now
inhabit, that will be crucially impor-
tant.
As a member of the MPC during the
financial crisis and in its aftermath, I
felt that the international influences
on our economy such as changes in
energy and commodity prices, changes
in the value of the pound, and the
growing importance of the Asia-Pacific
region to the world economy were
not always properly recognised within
the Bank of England. Carneys appoint-
ment may help to bring an internation-
al perspective that addresses this issue.
I wish him well in his new appoint-
ment.
Andrew Sentance is senior economic advis-
er at PwC and a former member of the Bank
of Englands MPC.
the Banks assessment of its own
actions during the crisis, claiming
that a comprehensive review still
needs to be made.
For many economists, this isnt
surprising. The Bank of England is a
state institution that attempts to
manipulate the demand for and
supply of money. Prior to the crisis,
its intention was to fix interest rates
at a particular level. Now, it also sets
target quantities. If you believe that
the central planning of the milk
industry would cause shortages and
gluts, then its not unreasonable to
apply the same logic to the market
for money. And even though the
Bank of England has operational
independence, its targets and tools
are set by politicians. It is
fundamentally an instrument of the
state.
It is widely accepted that the Bank
of England had a role in contributing
to the financial crisis by keeping
interest rates artificially low, stoking
a housing bubble, and encouraging
excessive leverage and debt. It is
somewhat arrogant to believe that
this was a failure of individuals. This
implies that, if only we had different
economists in charge, everything
would be ok. In fact, we put an unfair
burden on central bankers. It is next
to impossible for them to achieve
what we ask. Monetary policy
mistakes are a nearly inevitable
consequence of monetary policy.
This leaves free market critics of
the current system two options.
Many would argue that, for better or
worse, we are stuck with the central
bank in its current form. Therefore
its worth trying to reduce the harm
that it causes by taking an active
advisory role in an attempt to
improve policy decisions.
Others would say, however, that
since the Banks decisions are
destined to fail, efforts to improve
them are foolish. The only solution is
an event so catastrophic that radical
reforms can be made.
This is part of a broader concern
about how we should deal with the
state. Some want to get involved with
policymaking in order to alleviate
any harm caused. But in doing so
they end up endorsing the very
system they so heavily criticise.
Others simply stand back, hope that
something snaps, and stand ready to
pick up the pieces when it does.
How much economic damage
must policymakers cause before the
public cottons on? Too much, it
seems.
Anthony J Evans is associate professor of
economics at ESCP Europe Business School.
Web: www.anthonyjevans.com, Twitter:
@anthonyjevans.
FRONTLINE
ECONOMICS
ANTHONY J. EVANS
You cant reform a central bank by changing the faces of its management
MORNING UPDATE
A.M.
23
TUESDAY 27 NOVEMBER 2012
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
Bill please
[Re: There must be no compromise on our
own press freedom, Monday]
Brendan O'Neill is right to invoke the
spirit of the First Amendment that
guarantees freedom of speech and by
extension, freedom of the press. He
highlights a gaping hole in our political
institutions: we do not have a simplified
Bill of Rights. Instead, our rights are
hidden in volumes of legal precedent,
making it easy to furtively attack our
liberties. If we want to move towards a
transparent society, we need to create a
constitution and our own Bill of Rights.
We must shake off our inertia, be brave
and have the will to drive change, lest we
fall down the slippery road to serfdom.
A.N.Segoy
Head in the sand
[Re: EU budget stalemate: The battle is
about more than European waste, Monday]
Matthew Sinclair is spot on. Its outrageous
that our taxes are being squandered in
Brussels. Hannes Swoboda, president of the
Progressive Alliance of Socialists in the
European Parliament believes that David
Cameron is blackmailing EU countries by
threatening to veto the EU budget. But
those of us who have had the misfortune to
live under socialist governments understand
that they excel in their ability to tax, spend
and waste. Eventually they always run out of
other peoples money. Cameron speaks for
more people in these islands and
continental Europe than bureaucrats and
politicians like Swoboda realise.
Alex Sawyer
T
HE Leveson Inquiry will make
its long-awaited
recommendations on
Thursday, and the main
expectation is that Lord Leveson will
propose putting Britains press
under statutory regulation. But this
is a one-way street towards a British
media that is afraid to take on the
most powerful voices in the land.
That is not what civil society should
look like.
Yes, revelations of phone hacking,
and the acquisition of personal
information from medical records
to bank details have cast a shadow
across the media. But this is, and
was at the time, illegal. Indeed, one
of the few certainties about Lord
Levesons report is that it will not
propose the creation of any new
data protection offences. Everything
the inquiry has heard is already cov-
ered by the Data Protection Act.
Statutory regulation of the press
would similarly do nothing to pro-
tect privacy. It makes it no more ille-
gal to hack a phone, or to blag or buy
personal information. And a new
regulator would not make it easier
for any of us to seek redress if our
personal information is disclosed
without our permission.
Furthermore, those in favour of
statutory regulation have failed to
address an inherent contradiction in
their plan. How exactly are they
addressing and fixing a culture
where politicians court the media by
replacing it with one where the
media courts politicians?
In any case, in an age of wide-
spread dissemination of informa-
tion via the internet, the idea of
regulating such a small group of
organisations is absurd. The press is
already competing with informa-
tion sources that will presumably
stay outside any regulatory struc-
ture.
TOP TWEETS
Mark Carney will be the first non-British
citizen to hold the post of governor of the
Bank of England since its creation in 1694.
@DicksonKalu
Congratulations to Mark Carney on his
appointment. Some will say it was a surprise
call, but it was always on the cards.
@StevenMackie
Britain needs competent people to do the
UK PLC job. Mark Carney is a step in the right
direction.
@UK_Got_It_Wrong
Mark Carney will be effective in his new role
as governor. Cross-party support, and his
experience in Canada bodes well.
@neil_mp
Will the 29.7m fine imposed on UBS by the
FSA reduce the risk of future rogue trading?
YES
The extra capital requirements proposed by the Financial Stability
Board reflect the global effort to make banks safer post 2008. But to
really change the way banks deal with risk, we need a culture where
risk management is prioritised and adequately resourced in all
financial institutions. The FSAs enforcement agenda increasingly
focuses on governance and risk management. The fine levied against
UBS for the defective controls that failed to spot Kweku Adobolis off
book trades follows similar action taken against the bank in 2009
and Socit Gnrale in 2008. By setting UBSs fine at 15 per cent of
the revenue of the relevant trading division, the FSA is sending the
message that it expects high standards in these areas. The FSA also
tries to hold senior individuals to account for any failings. In our view,
FSA action of this nature will be more effective than increased capital
requirements in changing banks attitude to risk management.
David McCluskey is a partner at Peters and Peters.
David McCluskey
NO
Douglas McWilliams
Post 2008, we have had two trends in City regulation. The first is
increased reserve requirements in various different ways oddly
ministers persist in trying to persuade banks to lend more while at
the same time increasing the restrictions that stop them lending
more. The second is constraints on pay in the direction of making the
pay more dependent on long term results. The only real way of
making banks careful about risk is not by getting civil servants to
second guess them but by making the boards take personal
responsibility if necessary reinforced with fairly draconian
sanctions. If boards take personal responsibility, then dangerous
lending will be curbed. And pay will move into line with the
objectives of the shareholders. Put the responsibility where it
belongs on the banks boards.
Professor Douglas McWilliams is chief executive of the Centre for
Economics and Business Research.
RAPIDresponses
Press regulation is
not the solution to
privacy breaches
The government should welcome
Lord Levesons report. But it should
then make it clear that legislation is
not necessary, emphasising that, as
Lord Leveson has heard, it is the fail-
ings of the police and the informa-
tion commissioners office that
warrant concern and further investi-
gation.
And to truly grapple with the prob-
lems that led to the Leveson Inquiry
being set up, the government should
make clear its acceptance that a cus-
todial sentence should be available
to judges sentencing anyone who
breaches the Data Protection Act.
Journalist or not, such a penalty is a
far greater deterrent against anyone
obtaining personal information ille-
gally than a new body only con-
cerned with the press.
The media must abide by the law,
of course. But it must also be fearless
in holding power to account. Even a
slight diminishing of its undaunted
view of power will bring comfort to
those who seek to evade and avoid
scrutiny. Every citizen would be
worse off.
It would be a step that betrays
future generations. Ultimately, the
best regulator of all is competition
and if the government is looking for
an alternative to statutory regula-
tion, a return of media ownership
laws, taking into account the digital
footprint of publications, would
offer a much more reasonable way
forward.
Nick Pickles is director of Big Brother
Watch.
NICK PICKLES
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TUESDAY 27 NOVEMBER 2012
24
cityam.com
T
HE Bank of Japan (BoJ) has a
real problem. Japan has an
astronomical debt burden,
ailing exports (hurt by a
strong yen), and a population that
cannot be persuaded to spend its
way out of recession.
October saw the fifth straight
month of export declines, down 6.5
per cent on the year. Japan has been
hit by a boycott of Japanese prod-
ucts by China its biggest export
market following a diplomatic dis-
pute over territorial waters. But it
has been hit harder by yen strength,
pricing Japan out of dollar and euro
export markets.
JUNKED
Fitch recently cut the credit ratings
of Japanese technology giants Sony
and Panasonic to junk. It said that
the recovery of both companies
rests on aggressive restructuring.
The rating agency downgraded
Sony and Panasonic three notches
and two notches respectively.
But the companies have struggled
with a broader issue that has
dogged many Japanese blue chips.
They are cash rich but are faced
with low demand from domestic
consumers, who have a conserva-
tive tendency to save in the bad
times. The yens strength also
makes Japanese products unattrac-
tive abroad.
The scale of the problem has
caused a split on the board of the
BoJ. Though Japans central bank is
technically independent, its gover-
nor and its board of directors are
appointed by the government, and
the Ministry of Finance maintains
control of foreign exchange policy.
Compared with the Swiss
National Bank (SNB), Japan has been
almost calamitous in its handling of
currency interventions. When the
SNB announced in September last
year that it would intervene to
defend a currency floor under the
euro-Swiss franc rate, the move was
Japans companies are
in dire need of a boost
Spot yen
Its central bank is
also facing a split,
writes Craig Drake
TRADING MANAGEMENT WEALTH
THE TIPSTER
THOMAS COOK STRUGGLES TO FLY
D
OUBTS remain over whether
tomorrows full-year results
from Thomas Cook
Group will launch another
take-off for the travel
company. Even though its shares are
up by over 30 per cent over the last
year, many seem unconvinced
whether the firm can fly any higher.
Chief executive Harriet Green is set to
unveil a new strategy, but traders may
be spooked by higher headline losses.
Spreadex quotes a price of 23.41p-
24.09p for Thomas Cook Group.
It has been a shaky year for
electrical retailers, as chains like
Comet have run into difficulty.
However, Dixons Retail has
confounded expectations. Its share
price has surged by over 150 per cent
in the last 12 months. With the
company due to give an update this
week, traders will be assessing
whether this outperformance can
continue. CMC Markets quotes a price
of 25.98p-26.05p for Dixons Retail.
DIY retailer Kingfisher gives an
update on Thursday. Traders expect a
small drop in sales, as poor weather
and difficult trading on the continent
continue to weigh. But there may be a
modest boost in the value of shares,
which are up by over 12 per cent over
the last year, if some improvement is
detected in its margins. IG quotes a
price of 277.10p-277.70p for
Kingfisher.
United Utilities Group has had
its fair share of volatility this year, as
utilities watchdog Ofwat has looked
to loosen inflation-linked pricing
agreements. Its shares are up by 11
per cent over the last 12 months, but
are still someway off highs of over
730p a few weeks ago. Traders will be
hoping that tomorrows results
provide some positive news to put
shares back on course. Capital
Spreads quotes a price of 670.10p-
671.40p for United Utilities Group.
YOGESH CHANDARANA
April of next year.
Sato has been strong in voicing his
views on measures to keep the
strengthening yen in check, includ-
ing linking central bank policy to
consumer prices. And Abe has also
expressed commitment to the idea
of a 2 per cent inflation target to
combat deflation worries.
But as the worlds most indebted
nation, Japan cannot afford to
make any monetary policy mis-
takes. The yield on 10-year Japanese
government bonds is only 1 per
cent, but interest on its debts is
expected to surpass 22.3 trillion
(159bn) for the fiscal year. If the
yield were to rise to 2 per cent, the
interest expense on that debt would
outstrip the total expected Japanese
tax revenue of 42.3 trillion.
If Japanese consumers do not start
spending, and international mar-
kets continue to be turned off by
yen strength, traders should look to
more Japanese giants feeling the
swing of the ratings agency axe.
largely successful. It came after the
Swiss struggled with an overheat-
ing currency, much like the yen. But
unlike the shadowy BoJ, the SNB
clearly communicated its inten-
tions and underlined the level to
which it was prepared to defend its
measures. It is unlikely that the
Japanese will change their policies.
DISSENT
Shinzo Abe, the leader of the oppo-
sition Liberal Democratic Party and
frontrunner in the upcoming
December elections, called on the
central bank to adopt negative inter-
est rates and other stringent meas-
ures.
Minutes from the central banks
latest meeting showed that there is
also pressure to strengthen Japans
commitment to ultra-loose mone-
tary policy. Dissent came primarily
from Takehiro Sato, who has been
pushing for greater monetary
activism when current BoJ governor
Masaaki Shirakawas term ends in
www.gftuk.com
HOW TRADERS COULD PILOT
FESTIVE MARKET SENTIMENT
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
A
S CHRISTMAS rolls around, many
market pundits will once again
seek to explain away the typical
bull market sentiment as a
seasonal anomaly or indeed, to
give it full moniker, a Father Christmas
rally. But is this actually something you
can hope to trade successfully? Or is this
seasonal sentiment nothing more than a
good catch-all for the informed to use
with the benefit of hindsight especially
when theres likely to be little in the way
of fundamental news to work on at the
end of the year?
If you dig through the charts for each of
the last 10 years or so, you can by and
large pick a date in the run-up to
Christmas, and another early in the New
Year, and highlight where a broad index
like the FTSE managed to tack on a
healthy couple of hundred points. But if
you are to have any hope at all of trading
off the back of this phenomenon
successfully, you need to know when to
get into the market and of course when
to get out.
This is a classic opportunity for those
traders who look to back-testing to
validate their strategies. They can get
stuck into their Excel spreadsheets, and
the specialist back-testing tools that are
provided by the bulk of brokers today. But
can we pull this approach into a
meaningful strategy?
If you bought the FTSE 100 at the
closing price on 15 December, then sold
again at the closing price on 5 January (or
use the first trading day thereafter should
either date fall on a weekend), how would
you fare? On 11 of the last 12 years, the
FTSE rose during this period, providing an
average gain of 2.63 per cent. The only
year that saw a drop a modest 0.64 per
cent - was Christmas 2006, and had you
sold a few days earlier that loss would
have turned into a more festive 1.5 per
cent gain. Even so, compared with the 7
per cent gain seen in 2008, the generosity
of such a rally can clearly ebb and flow.
So whats causing this move? There are
a range of theories in play. Some put it
down to fund managers buying up stock
going into the year end, while others
prefer a looser interpretation. Senior staff
are away from the office, while the juniors
hold the fort full of Christmas cheer.
Theres not much economic or corporate
data to legitimately dampen that festive
spirit, so put this all together and it paves
the way for a heady combination of bullish
behaviour.
As all good disclaimers should read,
past performance is not an indication of
future results. But playing around with the
numbers certainly yields some interesting
results at this time of the year. Purists may
even want to declare that a Father
Christmas rally can only occur between
Christmas and New Year. But ultimately for
any strategy like this to stand up, you have
to be able to declare with some
confidence that it will happen ahead of
time.
Of course, this New Years Eve also has
the potential to see the US hit that much
talked about fiscal cliff. And with the
European debt crisis failing to go away,
could the start of 2013 see a fundamental
shift in attitudes? I dont profess to know
the answer to that one. But even if I have
given up on any hope that the big man in
red will shuffle down the chimney this
year (with a sleigh full of presents for me),
there will be no shortage of traders who
will continue to cling to the hope that
Father Christmas will keep to his promise
and serve up a rally this Christmas. Just
like he always does.
FTSE 100 - 15 December 2008 to 5 January 2009
2008 2009 22 Dec 29 Dec
4,600
4,550
4,500
4,450
4,400
4,350
4,300
4,250
Dollar-Yen

2008 2009 2010 2011 2012

80
85
90
95
100
105
110
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
CATHERINE BOYLE
The Bank of England is just one impediment to a British default
the UK is worse off now than under the
last administration, as parties head into
the second half of the current term and
the election approaches.
Yet this may not be valid when the like-
ly effects on a range of UK investments
are considered. After an initial knee-jerk
reaction to the news, most of the key UK
markets would probably stabilise.
The FTSE 100 is now so dominated by
international companies, or UK-based
companies which do most of their busi-
ness abroad, that a downgrade probably
wouldnt register much beyond a tempo-
rary blip.
The gilt market, too, should remain
unperturbed. As HSBC analysts point
out, because the UK can issue its own
currency, it can always create money to
My pick: Long dollar-yen and gold
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days
I closed my long Aussie-dollar position from $1.0318 at
$1.0390, for a profit of +72-pips. I also closed my euro-dollar
long position from $1.2720 at $1.2790 for a profit of +70-
pips. Although both of these positions overran their targets
in the ensuing days, theres little reason to talk about
hypothetical trading scenarios. Currently, Im only long on
dollar-yen from 80.65 (although I maintain my long gold
position from $1705.00.)
ANALYST PICKS
No reason to fear UK downgrade
T
HE downgrade of the UKs
credit rating by at least one of
the three major agencies
looks increasingly likely in
the New Year. But losing the triple-
A crown may not be such a big deal
after all.
The most important fallout from a
downgrade will probably be politi-
cal. George Osborne has hung his
hat on the UK keeping its rating,
and Labour is unlikely to spare his
blushes if the hat stand gets shaky.
The triple-A rating survived econom-
ic blows like the 1978-9 winter of
discontent, which swept Margaret
Thatcher to power, and Black
Wednesday, when the Conservative
government had to withdraw ster-
ling from the European Exchange
Rate Mechanism.
Osborne has consistently empha-
sised the importance of stabilising
UK debt and committing to austeri-
ty, with the maintenance of
Britains top rating a key element.
There will be plenty of political cap-
ital to be made from arguing that
STRATEGIST
ILYA SPIVAK
My pick: Stay short euro-dollar and Aussie-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold euro-dollar at $1.2982 on 31 October, after prices broke
rising trend line support, hinting that long-term euro decline was
to resume. Prices recovered from the $1.2700 figure, but the
overall set-up remains intact. I expect debt crisis woes to push
the pair to my initial objective at $1.2619. I sold Aussie-dollar on
15 November at $1.0381, seeing a bearish trend shift in the S&P
500 as likely to sink the risk-geared Aussie. I will also continue to
hold this trade, aiming for $1.0181.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short Kiwi-dollar and Aussie-Kiwi, long Loonie-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
My long euro-yen (104.50) and dollar-yen (79.15) picks
from last week worked well. That said, the yen tumbled too
quickly and the Japanese election is still a while away. If there
is a pullback, I like a Loonie-yen long from its former wedge
resistance (81.50). I will keep my set-up for a risk-neutral
technical break for Aussie-Kiwi below the NZ$1.2700 pivot.
As a risk play, I like Kiwi-dollar at the former $0.8175 channel
floor, with a stop above $0.8300.
finance debt. This makes it at almost
zero risk of a pure default on repay-
ing that debt (although of course,
money-printing brings its own prob-
lems).
UK bonds are more vulnerable to
falls if the countrys safe haven status
is perceived to be under threat. But a
one-notch downgrade, which at the
moment appears to be the most likely
outcome, is unlikely to send UK
bonds into the kind of territory seen
in many other parts of Europe.
Sterlings valuation could potential-
ly suffer most from a downgrade, but
a weakening currency might be no
bad thing for UK exports.
Ultimately, downgrades have lost
much of their power to shock the
market, as can be seen by Frances
downgrade by Moodys last week.
They are now often both so well-
flagged and, frankly, long-overdue
that they dont provoke the kind of
negative reaction seen during the
credit crisis.
Catherine Boyle is a writer for CNBC. You
can follow her on Twitter: @cboylecnbc
TUESDAY 27 NOVEMBER 2012
25
cityam.com
TRADING
CURRENCY STRATEGIST
CHRIS VECCHIO
CNBC
COMMENT
TUESDAY 27 NOVEMBER 2012
27
cityam.com
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LIFE&STYLEHEALTH & GROOMING
M
INIMALIST SHOES are
having quite the moment
right now, helped, in part,
by the success of the Vibram
Five Finger shoe. The barefoot
running shoe has appeared on the
feet of high flyers, most notably
actor Shailene Woodley, who ill
advisedly sported a pair with a
designer frock at this years Golden
Globes. Their popularity, and the
resurgence of what many are
dubbing the back to basics
approach, has reignited the debate
as to whether minimalist running is
all its cracked up to be.
Commercially, the shoes are per-
forming pretty well. The industry is
already worth a reported 1.1bn and,
as of 2011, sales were up by 283 per
cent, compared to an 18 per cent
drop for traditional running shoes:
not too shabby for something many
thought would be no more than a
passing fad. Whether thats down to
consumers jumping on the bandwag-
on or people simply giving the big
sports brands the one fingered salute
as they jump ship to new brands is
unclear, but what is certain is the
direction things are heading.
Minimalist trainers are an easy
middle ground between barefoot
running and the traditional styles
weve become accustomed to.
Saucony, one the leading brands in
the field, creates styles with soles
with stripped down cushioning,
aimed at encouraging a mid-foot
strike referring to the part of the
foot that hits the ground with each
stride. The premise is simple. Its
like riding a bike with stabilisers
on. they tell me. You only learn
how to ride the bike properly when
theyre gone. Trainers, they argue,
have become increasingly cushioned
in response to our propensity to
heel strike, leading to a situation
where we have forgotten how to run
properly.
Until relatively recently, weve
always run with a mid-foot strike.
Its the thing that enabled us to
chase prey and, as Christopher
McDougall discovered in his best
selling book Born To Run, allows the
Tarahumara Indians in Mexico to
run at incredible speeds for up to
100 miles at a time. The stripped
down soles are intended to encour-
age people to revert back to this style
of running. In other words, the big
sports apparel brands are now
telling you to ditch the styles that
they were tirelessly trying to covince
you to buy in favour of a brand
spanking new pair that, this time,
will actually work.
Putting those claims aside for one
moment, its not hard to understand
the appeal. The styles are slick, and
are a lot more comfortable than the
average cushioned pair. But the big
question is: are they really worth all
of the hype?
The short answer is no. When I
tried them, the trainers felt no dif-
ferent than any other style, aside
from the fact that there was notice-
ably less padding. What made my
running improve and my joints less
sore were the training tips provided
by the Saucony team, rather than
the shoe itself.
I wasnt given the most extreme
model to test on the basis that it
would likely result in injury due to
the huge jump, which proves my
theory that technique and knowl-
edge are, in fact, the real factors.
The moral of the story? Forget
spending 100 on another pair of
shoes change your running style
instead. Excuse the pun but youll
definitely be better off in the long
run.
Minimalist running: is less really best?
The craze for pared back trainers shows no sign of slowing. Naomi Mdudu asks whether theyre worth the fuss
Its like riding a bike
with stabilisers on. You
only learn to ride the
bike properly when
theyre gone

Sauconys top five running tips

Make sure you have a quality
running shoe such as the
Saucony Kinvara 3 (pictured), that
has been fitted by a running
specialist in a running store.
This helps to prevent injury and
makes your journey more
comfortable.
Wear the right gear: theres
no such thing as bad weather,
just the wrong clothes. Keep your
kit to a minimum to lighten the
load and use specialist-running
textiles that allow you to breath,
transfer moisture and remain at the
correct temperature.
Remember the three Ps:
patience, planning and
progression. Start your training
patiently; build runs and your
weekly amount of training
gradually; and have a plan that
works towards a chosen goal or
racing distance. When you plan
and monitor your training
progress, running will never
become boring or mundane.
Focus on
quality
nutrition and
hydration: Our top
tip is to never allow
yourself to be
hungry or too full.
Snack frequently, grazing on
complex carbohydrates and make
sure protein exists in your diet to aid
recovery and tissue repair after
training.
Be safe and have fun:
Particularly in the winter
months, make sure youre safe by
wearing high visibility clothing. Keep
things interesting by finding a friend
to train with or joining a local running
group or club to share the experience.
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TUESDAY 27 NOVEMBER 2012
28
LIFE&STYLE ADVERTISEMENT FEATURE
cityam.com
T
he cheapest way to look and
feel great? Flash a smile. But
discoloured, crowded and
missing teeth often mean
that people are reluctant to show
theirs off. Thanks to some painless
and affordable new procedures,
this no longer has to be the case.
Lets face it, if youre an adult
with concerns about your teeth,
you hardly want to fill your mouth
with unsightly metal train-tracks.
Invisalign is perfect for those with
wonky or crowded teeth but who
are put off by the prospect of
braces. The procedure uses clear,
plastic aligners that are nearly
invisible to the naked eye, so you
can get those teeth straightened
without being too obvious about it.
These aligners gradually move your
teeth into the desired position.
Visible results can be seen in just
six to twelve months.
The procedure is convenient too:
the aligners can be easily removed,
so meal times and teeth cleaning
pose no problems. They are also
molded to the exact specifications
of your mouth, resulting in a clean,
comfortable teeth-straightening
experience.
London City Smiles
www.londoncitysmiles.com offers
Invisalign alongside a wide range of
cosmetic dental and facial
procedures. It is a passionate
believer in the procedure:
Invisalign is a great choice for
those put off by the thought of
having metal train-tracks in their
mouths. Improvements in teeth
alignment are noticeable even
while the procedure is still in
progress. And theres a fantastic
result at the end as well.
So now your teeth are nice and
straight; but what about the
discolouring and the gaps? Its no
good having a perfectly straight,
yellow set of gnashers. Porcelain
veneers are perfect for these kinds
of adjustments. A veneer is a new,
custom-made front surface for a
tooth. Veneers can help crowding
and protruding teeth, and they can
also close gaps and whiten. The
quality veneers used by London City
Smiles rival natural teeth; the
changes they make to your smile
will last for years.
If youre after a more radical
renovation of your grin, then you
can go for the full Smile Makeover.
With this comprehensive
treatment, you can align crowded
teeth, close gaps, reduce
we take time to meet all of our
patients needs and expectations.
And if you really want to be put at
ease, sedation is available.
If youre interested in any of
these procedures, please come
along to the London City Smiles
open day on Tuesday 4 December.
Alternatively book a free, no-
pressure consultation now to find
out how London City Smiles could
improve your smile and your
confidence. Conveniently located
opposite Angel tube station, theyre
sure to put a smile on your face.
For more information or to
book an initial consultation visit
www.londoncitysmiles.com or
call 020 7837 2300. London City
Smiles is located at 19-21
Islington High Street, N1 9LQ.
Opening hours are 9am-5.30pm
Monday, Wednesday, Thursday,
Friday, Saturday and 9am - 8pm
(Late Night) Tuesday.
protrusion, whiten, reduce a
gummy smile, widen a narrow
smile, change the length or shape
of teeth, replace missing teeth all
in one go!
London City Smiles says: A better
smile not only improves the way
you look, but also the way you feel;
it improves your confidence. If you
are confident about your smile, this
will have a positive impact on both
your professional and social life.
To compliment your sparkling
new teeth, London City Smiles also
performs a range of facial
rejuvenation procedures, including
dermal fillers and wrinkle relaxing
injections. These will ensure that
your smile is framed by a youthful,
confident face.
People often feel nervous about
undertaking cosmetic and medical
treatment. The team understands
this: Here at London City Smiles
we always put the patients interest
first. We never rush treatment and
A better smile not
only improves the
way you look, but
also the way you feel

A passionate team whose goal

is to put a smile on your face
Cosmetic dentistry includes:
nVeneers
nWhitening
nSmile Makeover
nInvisalign
nDental Implants
Facial Rejuvenation includes:
nDermal Fillers
nWrinkle-relaxing injections
nTopical treatments, including
moisturizers sunscreens and exfoliating
creams
London City Smiles carry out a range of cosmetic
dentistry and facial rejuvenation procedures.
29
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
7pmFootball Asia 7.30pmSoccer
Special 10pmRevista De La Liga
11pmTest Cricket 1amFootball
Special 2.30amFootball Asia
3amFootballs Greatest 3.30am
Revista De La Liga 4.30am-6am
Football Special
SKY SPORTS 2
6.30pmRevista De La Liga:
Highlights from La Liga. 7.30pm
Live Football Special: Aston Villa
v Reading (Kick-off 8.00pm).
11pmBradley Wiggins: A Year in
Yellow12.30amBritish
Basketball 2.30am-4.30am
Premier League Poker
SKY SPORTS 3
6.30pmBradley Wiggins: A Year
in Yellow8pmTest Cricket: India
v England. 10pmPremier League
Poker 12amFootball Asia
12.30amFootballs Greatest 1am
Golf 2am-3amWorld Match Tour
Sailing
BRITISH EUROSPORT
6pmFigure Skating 8pm
Strongest Man 9pmBoxing
10pmBirmingham Motorcycle
Show11pmGT Academy: Race to
Dubai 11.15pm-12.15am
Intercontinental Rally Challenge
ESPN
7pmESPN FC Press Pass 7.30pm
ESPN Kicks: Premier League
7.45pmLive Serie A 9.45pm
Bundesliga 11.30pmESPN FC
Press Pass 12amESPN Kicks:
Premier League 12.15amLive
College Basketball 2.15amLive
College Basketball 4.15amESPN
Kicks: Scottish Football 4.30am
Russian Premier League Review
5amPlanet Speed 5.30am-6am
FIS Alpine Ski World Cup Report
SKY LIVING
7pmCriminal Minds 8pm
Bones 9pmElementary 10pm
Chicago Fire 11pmCriminal
Minds 12amSun, Sea and A&E
1amSupernatural 1.50am
Medium2.40amBones 3.30am
Nothing to Declare 5.10am-6am
Passport Patrol
BBC THREE
7pmTotal Wipeout 8pmFree
Speech: Body Beautiful Special
9pmInside the Body Beautiful
How Cosmetic Surgery Works
10pmSome Girls 10.30pm
EastEnders 11pmFamily Guy
11.45pmAmerican Dad!
12.30amSome Girls 1amInside
the Body Beautiful How
Cosmetic Surgery Works 2am
Free Speech: Body Beautiful
Special 2.55am-3.55am
Transsexual Teen, Beauty Queen
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmRules of
Engagement 8.30pmThe Big
Bang Theory 9pmNew Girl: The
flatmates attend Schmidts office
party. 9.30pmSuburgatory
10pmTool Academy: Boyfriends
Behaving Badly 11.05pmThe
Inbetweeners 12.15amThe Big
Bang Theory 1.10amHow I Met
Your Mother 1.40amThe Ricky
Gervais Show2.05amThe
Cleveland Show2.55amScrubs
3.20amPete Versus Life 3.45am
90210 5.05am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8.30pmCajun Pawn Stars
9pmStorage Wars 9.30pm
Storage Wars: Texas 10pm
Seeking Salvage 11pmStorage
Wars 11.30pmPawn Stars 12am
Storage Wars 12.30amStorage
Wars: Texas 1amSeeking Salvage
2amAmerican Pickers 3amAx
Men 4amSwamp People 5am
Pawn Stars 5.30am-6am
Storage Wars: Texas
DISCOVERY
7pmFast n Loud 8pmFlying
Wild Alaska 9pmJungle Gold
10pmSwamp Loggers 11pm
Wheeler Dealers 12amJungle
Gold 1amSwamp Loggers 2am
Sons of Guns 3amJungle Gold
3.50amSwamp Loggers 4.40am
Raging Planet 5.30am-6am
Meerkat Manor
DISCOVERY HOME &
HEALTH
7pmDr Oz 8pmI Didnt Know I
Was Pregnant 9pmAddicted to
Food 10pmFreaky Eaters USA
11pmA&E 12amAddicted to
Food 1amWanted Down Under
2amFreaky Eaters USA 3am
A&E 4amA Baby Story
5am-6amBabys Room
SKY1
8pmLast Resort 9pmA League
of Their Own 10pmAn Idiot
Abroad 2 12amFILMWhite Men
Cant Jump 1992. 2.15amBorder
Invasion USA 3.15amRoad Wars
4.10am-6amStargate SG-1
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders; BBC News
8pmHolby City
9pmLast Tango in Halifax
10pmBBC News
10.25pmRegional News;
National Lottery Update
10.35pmCHOICE Imagine:
How Music Makes Us Feel
11.40pmFilm 2012 12.10amFILM
The Big Easy. 1987. 1.50am
Weatherview1.55amSign Zone:
Vikings 2.55amSign Zone: Britains
Hidden Hungry 3.50amSign Zone:
Great British Food Revival
4.50am-6amBBC News
6pmEggheads
6.30pmStrictly Come Dancing
It Takes Two
7pmAntiques Road Trip
8pmMasterChef: The
Professionals: Five competitors
face a skills test of making a
crepe souffle.
9pmDara O Briains Science
Club
10pmLater Live with Jools
Holland
10.30pmNewsnight; Weather
11.20pmThe Albino
Witchcraft Murders: Storyville:
12.20amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmThe Martin Lewis
Money Show
8pmYouve Been Framed!
8.30pmIm a Celebrity Get
Me Out of Here! Another
camper is sent home.
10pmITV News at Ten
10.30pmLondon News
10.35pmTake Me Out
11.50pm Grimefighters
12.10amJackpot247; ITV
News Headlines
3amLoose Women
3.50am-5.30amITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv
8pmGeorge Clarkes Amazing
Spaces
9pmHestons Fantastical Food
10pmCHOICE Fresh Meat
10.50pmRandom Acts 10.55pm
Homeland 12amEuropean Poker
Tour 1amChannel 4 Presents
Nathan 1.05amA Racing Portrait:
For the Love 1.30amBoxing 2am
Sailing: Americas Cup Discovered
2.25amBeach Volleyball 3.20am
Bullrun: Cops, Cars and Superstars
3.45amExtreme Sailing Series
4.15amBest of British: Mind Game
5.10am-6.05amDeal or No Deal
6pmHome and Away
6.30pm5 News at 6.30
7pmHighland Emergency
7.25pmHighland Emergency;
5 News Update
8pmRolfs Animal Clinic;
5 News at 9
9pmCHOICE Body of Proof
10pmCSI: NY
11pmCSI: NY
11.55pmCSI: Crime Scene
Investigation
12.45amForensic Files 1.10am
SuperCasino 3.55amHouseBusters
4.20amHouse Doctor 4.45am
Divine Designs 5.10amWildlife
SOS 5.35am-6amWildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7 8 9
10 11
12 13 14
15 16
17 18 19
20 21 22
23 24
25 26
7 6 7
30 17
16 8
8 37
15 23
45
24 16
33 12
17 15
22 18
9 14 13
5
34
9
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15
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38
9
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13
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4
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ACROSS
1 Holds fast (5)
4 Colour of bleached
bones (5)
7 Rules as a
monarch (6)
9 Cobblers stand (4)
10 Garden building (4)
12 In ones sleeping
place (4)
13 Far beyond the
norm (5)
15 Machine that
dispenses money
(init) (3)
17 Conform (5)
19 Armys temporary
living quarters (4)
21 Individual unit (4)
23 Gelling agent (4)
24 Elaborate (6)
25 Habitation (5)
26 Metal-shaping
machine (5)
DOWN
1 Hard deposit on
the teeth (6)
2 Liquorice-avoured
herb (7)
3 Performs an act of
transgression (4)
5 Elevated open grassland
in southern Africa (5)
6 Abominable
snowman (4)
8 Mechanical device
on a camera (7)
11 Common type
of tree (3)
14 Person who accepts the
world as it literally is (7)
15 Appropriate (3)
16 Each (6)
18 Transmitted (a pro-
gramme) on radio or
television (5)
20 Long detailed story (4)
22 Repast (4)
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S A S S Y Q U O I T
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T R I B A L D Y K E
T C A R E F R E E
L I K I N G E N D S
E N A S C
R O A M T U S S L E
P L A T E L E T N
J E E R E N D I V E
N I A N R
A S S E S R A T T Y
8 2 5 7 9 7 3
6 3 7 4 9 2 5 8 1
7 9 8 6 8 9
9 4 8 7 2 1 3 6 5
8 1 9 3 1 3 2
9 6 5 8 7
1 6 2 4 9 2 5
9 7 8 2 1 5 3 4 6
9 7 4 7 9 6
2 8 5 1 4 6 7 3 9
1 4 3 2 3 1 7
4
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The nine-letter word was
GOLDSMITH
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
TUESDAY 27 NOVEMBER 2012
IMAGINE: HOWMUSIC MAKES US
FEEL BBC1, 10.35PM
Alan Yentob investigates the
emotional power of music, an art form
that people turn to when words are
not enough.
FRESH MEAT
CHANNEL4, 10PM
As the end of the academic year
approaches, Josie must consider her
future, while Kingsley accidentally
moves into a flat with Heather.
BODY OF PROOF
CHANNEL5, 9PM
A champion equestrian is found dead
in the woods, and Megans daughter
Lacey provides valuable evidence in
helping to track down the killer.
TVPICK
ENGLAND rugby head coach Stuart
Lancaster insists Chris Robshaw
will remain captain despite his
much-criticised decision-making
during the 16-15 loss to South
Africa at Twickenham on Saturday.
The flanker opted for Owen
Farrell to kick at goal when
England were only trailing 16-12 to
the Boks with a few minutes left,
and failed to score from the restart.
I definitely wont be making any
changes in that regard. The most
important thing is we backed the
captain and the players are 100 per
cent behind him, said Lancaster,
who confirmed fly-half Toby Flood
will miss Saturdays clash with New
Zealand due to a toe injury.
The incident followed criticism
of Robshaws decision to forgo
kickable penalties in the 20-14 loss
to Australia last week.
Games are never won on one
decision. There were lots of little
decisions that put us in that
position and meant we were
chasing the game, said Lancaster,
In hindsight we shouldve
maybe gone for the corner but
what disappoints us as a group is
we didnt make it work for Chris.
Owen Farrell is set to replace
Flood at fly-half against the All
Blacks, with uncapped Freddie
Burns on the bench as cover.
Robshaw still
leader despite
decision chaos
QUEENS Park Rangers manager
Harry Redknapp has prioritised bol-
stering his goal-shy forward line in
the January transfer window as he
prepares to launch his latest attempt
at the great escape tonight at
Sunderland.
Redknapp, who replaced the
sacked Mark Hughes at the Premier
Leagues basement club on Friday
but did not take charge of Saturdays
3-1 defeat at Manchester United,
admitted signings would be scarce
next month.
Hughes overhauled the playing
squad in the summer, recruiting 10
new players to add to his three pur-
chases in January, meaning there is
limited scope for Rangers owners to
fund another spree.
But with top scorer Bobby Zamora
and fellow striker Andy Johnson fac-
ing months out injured, and Djibril
Cisse managing just one league goal
so far this term, Redknapp will look
to add greater firepower.
Were not overloaded with strik-
ers here. Thats certainly an area we
are short. If there are one or two in
the window a couple of loans
then wed be interested, Redknapp
said yesterday.
There wont be wholesale spend-
ing. The owners have been fantastic. I
dont think too many clubs brought
in more players than QPR did. Now
its up to the people who run the
team to get the best out of them.
Redknapp revealed David
Beckham had texted to wish him
luck but played down suggestions
the former England captain, who is
set to leave Los Angeles Galaxy next
month, would join QPR in January.
The former Tottenham boss could
not prevent Southamptons relega-
tion from the top flight in 2005, but
saved Portsmouth from the drop the
following season and reversed a
dreadful start by Spurs when he took
charge in 2008-09.
Yet the 65-year-old believes keeping
QPR in the Premier League after the
worst start by any team in the compe-
titions history four points and no
wins from 13 games is the sternest
test of his career.
We mustnt kid ourselves, this is
much tougher that those two jobs in
my opinion, but Im optimistic we
can pull it off, he added. I want to
be successful here, really badly. I want
to keep this team in the Premier
League. If the players try as hard as I
am going to try well be successful.
Redknapps quest begins at the
Stadium of Light against a struggling
Sunderland side who have won just
twice in the league since 24 March
when they beat QPR 3-1 in the same
fixture last season.
Former Tottenham assistants Kevin
Bond and Joe Jordan are set to join
Redknapp, who was dismissed from
White Hart Lane in the summer
despite leading them to a top-four fin-
ish, at Loftus Road this week.
Redknapp dismissed the notion of
recalling Joey Barton from Marseille
as the controversial midfielders loan
deal is due to last for the season.
Redknapp admits injuries to Bobby Zamora and Andy Johnson have left QPR short of forwards
TUESDAY 27 NOVEMBER 2012
30
SPORT
cityam.com/sport
BY ALEX SHARP
NEWLY-crowned Formula One world
champion Sebastian Vettel has
quashed rumours of a move
to rivals Ferrari by stating that he is
extremely committed to current
team Red Bull.
Speculation that the German
would join Ferrari in 2014 arose
earlier this year, but 25-year-old
Vettel, whose title win in Brazil on
Sunday made him the youngest ever
triple world champion, insists that
he still has more to achieve as a Red
Bull driver.
I have a contract until 2014, he
said. Im very happy with what we
have achieved so far and I dont
think this story is over yet.
Im very happy and extremely
committed to give everything I have,
also in the next years when Im with
them. At the moment I dont see any
point thinking about another team
or something else.
Vettel secured the 2012 title ahead
of Fernando Alonso by a narrow
three-point margin. Alonso, whose
contract keeps him at Ferrari until
2016, admits that the constructors
speed let them down this season.
For the future we need to
improve the car, said the two-time
world champion.
We have the best team in terms
of approaching and preparing for
the race but we were too slow.
Im not done
with Red Bull
yet Vettel
BY TOM SHEPHERD
BY FRANK DALLERES
I
T WOULD have been easy for Rory
McIlroy to take it easy at the DP
World Tour Championship in
Dubai at the weekend, having
won the European and US money list
double and a second Major this year.
Even as he approached the closing
stages of his final round and Ryder
Cup colleague Justin Rose made a
charge, many players who had
enjoyed the 2012 he has might have
settled for a very good second place.
But thats not in Rorys nature. He
said he wanted to win the season-
ending event, and thats exactly
what he did. He has a hunger to win
its not about money for him, its
success and that will stand him in
very good stead for the future.
McIlroy was magnificent. To birdie
his last five holes was phenomenal,
especially up against Rose in
wonderful form. Opponents
knowing he can produce that kind of
storming finish under pressure will
only help him too. They will be even
more aware of his position on the
leaderboard during final rounds.
Rose also deserves credit for a
great round, not least an incredible
100-foot putt that looked to have
stopped, only to trickle to the edge of
the hole. His runner-up finish lifts
him to a career-high fourth in the
world, which is fantastic for him and
Europe, who, with McIlroy and Luke
Donald in the top two, own three of
the top four spots.
McIlroy, meanwhile, is about to
switch from Titleist clubs to Nike,
prompting questions about how it
will affect his game. I wouldnt
worry too much; with that swing, he
could play with a hockey stick.
Sam Torrance OBE is a multiple Ryder
Cup-winning golfer and commentator.
Follow him on Twitter @torrancesam
@cityam_sport
IN BRIEF
Wiggins heads SPOTY shortlist
n GENERAL: Tour de France winner
Bradley Wiggins is the bookies tip to
win the BBC Sports Personality of the
Year award after the shortlist of 12 was
announced last night. Tennis star Andy
Murray, cyclist Sir Chris Hoy and
athletes Mo Farah and Jessica Ennis
are also contenders. Paralympians
Sarah Storey, Ellie Simmonds and
David Weir, golfer Rory McIlroy, boxer
Nicola Adams, rower Katherine
Grainger and sailor Ben Ainslie also
vie for the award on 16 December.
Derbyshire open for champions
n CRICKET: Defending champions
Warwickshire will begin their County
Championship campaign with a home
match against promoted Derbyshire.
Warwickshire open the season with a
four-day curtain raising match with an
MCC XI on 24 March in Abu Dhabi.
HARRY HOUDINI?
nTOTTENHAM: Took over in October
2008 with Spurs bottom of the league
and only two points from eight games.
Recovered to finish eighth
nPORTSMOUTH: Returned to Pompey
in March 2005 with the side in the
relegation zone and three points adrift
of safety after 15 matches. Managed to
survive with a game to spare
nSOUTHAMPTON: Joined in
December 2004, a point from safey
after 16 games. Relegated on final day
GOLF
COMMENT
SAM TORRANCE
Hunger for success not money is
what drives magnificent McIlroy
Redknapp plots swoop
for striker in January
31
West Hams Israeli star Yossi Benayoun has
called the few Hammers supporters who aimed
anti-Semitic chants at Spurs fans embarrassing
cityam.com
TUESDAY 27 NOVEMBER 2012
ALL ROADS LEAD TO VICTORY
WITH MICHELIN TYRES.
Congratulations to the winners of the 2012 FIA World Endurance
Championship and the 2012 FIA World Rally Championship*.
In endurance and rally racing, drivers need to have confidence in their tyres
ability to cope. MICHELIN tyres with their excellent grip and long life give
them that confidence, whatever the weather or terrain.
You could also benefit from the expertise Michelin has derived from
motorsport with MICHELIN tyres.
Experience the performance at www.michelin.co.uk/experience-the-performance
*Subject to publication of the official results by the FIA.
ENGLAND IN INDIA
Last five Test series
n 1984-85: Ind 1-2 Eng (5 Tests)
n 1992-93: Ind 3-0 Eng (3 Tests)
n 2001-02: Ind 1-0 Eng (3 Tests)
n 2005-06: Ind 1-1 Eng (3 Tests)
n 2008-09: Ind 1-0 Eng (2 Tests)
Results
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Dhoni heaps praise on destructive Panesar
INDIA captain Mahendra Singh
Dhoni hailed spinner Monty Panesar
after he inspired England to a 10-
wicket victory in the second Test,
but promised to keep demanding
pitches with maximum turn and
bounce from groundstaff ahead of
next weeks third Test.
Panesar destroyed Indias batting
line-up on Sunday, taking five
wickets to limit the hosts second
innings, after Kevin Pietersens
superb 186 knock had put England
in control in Mumbai. The Sussex
spin-bowler then finished the second
innings with 6-81, and 11 wickets in
the match, while Graeme Swann
joined Panesar with 8-113.
All the other bowlers were getting
bounce and turn, but Monty bowled
at real pace, said Dhoni. He bowled
at 90-95kph and even above that, and
still he got real turn. He had a big
impact on the game.
The other spinners got the
bounce, but they never looked to
trouble the batsmen as much a
Monty did. Big credit goes to him. If
you get performances like this,
margin of defeat can be big.
Despite Englands success with
spin in Mumbai, Dhoni stood by his
demand for more turn.
I think this was a very good
wicket. Tests in the subcontinent
should be played on such wickets.
The toss wasnt that vital. It started
turning from the first day, he said.
What is the point of playing on a
flat track and winning the toss and
batting for three or four days over
the Test?
You want to face challenges in
Test cricket. These are the kinds of
wickets that push you. Definitely all
the wickets should be like this.
BY ALEX SHARP
BATSMAN Kevin Pietersen backed
captain Alastair Cook to tear up
Englands record book as the
tourists basked in the glory of a
phenomenal 10-wicket victory in
the second Test against India in
Mumbai yesterday.
Pietersen also praised the
dressing room unity that fuelled an
astonishing response to their nine-
wicket humiliation in the first Test,
just weeks after his return raised
doubts over internal conflict.
Cook and Pietersens 22nd Test
centuries in the first innings put
them joint top of Englands all-time
list, while the spin bowling of
Monty Panesar and Graeme Swann
befuddled a previously lethal
Indian batting line-up.
England needed just 45 minutes
of the fourth morning to take the
last three wickets, before Cook and
Nick Compton raced to their target
of 58 without loss and only a
second Test win in India since 1985.
Panesar and Swann were
outstanding in the second innings,
and Cooky didnt talk about
himself but hes a magnificent
cricketer. Hell break every England
record, said Pietersen, dropped in
the summer for sending text
messages to opponents in the South
Africa team about his colleagues.
We came to Mumbai, trained
hard and worked hard. Theres a
good united spirit in the dressing
room. Thanks to the guys in the
dressing room, the management,
for sorting everything out. Every
day you put on an England jersey is
a special day and we are so
privileged as England cricketers.
Panesar took his figures to 6-81,
to add to his five-fer in the first
innings, while Swann claimed two
more scalps to finish on 4-43 and
eight wickets in total.
BY FRANK DALLERES
Panesar inspired England with 11 wickets
Born again Pietersen
backs Cook to rewrite
England Test history