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Euro debt
RAGE AS MUBARAK crisis rears
REFUSES TO RESIGN ugly head


EUROZONE
BY JULIET SAMUEL
THE euro crisis moved dramatically
WORLD ECONOMY back into the spotlight yesterday as a

BY MARION DAKERS sharp spike in Portuguese bond yields


at a €3bn (£2.5bn) debt sale forced the
EGYPTIAN President Hosni Mubarak European Central Bank to plunge back
refused to stand down last night, into the market.
sparking fury across the country and After two weeks of inaction, the ECB
fuelling talk of a military coup. swooped in to buy what analysts said
Mubarak said in a televised speech could be up to €2bn worth of bonds –
that he would delegate powers to his two thirds of the day’s issuance – in a
deputy Omar Suleiman, but pledged desperate attempts to keep a lid on
to remain as leader until elections in Portugal’s borrowing costs.
September and repeated his vow to die In a case of what one analyst called
on Egyptian soil. “déjà vu”, the yield on Portuguese ten-
“I am conscious of the dangers of year bonds shot up more than 20 basis
this crossroad... and this forces us to points to an all-time Eurozone high of
prioritise the higher interests of the 7.6 per cent, but stayed there less than
nation,” he said. an hour before retreating down to 7.3
His late-night speech was met with per cent.
furious chants of “leave, leave” from The sharp spike in yields comes in
tens of thousands of protesters in the wake of a European Council sum-
Tahrir Square in Cairo, the focal point mit last weekend that Eurozone lead-
of the unrest since late January. ers had said would result in a
Egypt’s emerging opposition leader, “comprehensive” package to solve the
Mohamed Elbaradei, said on Twitter crisis, but which in the event produced
after the speech: “Egypt will explode. Furious protesters chanted “leave, leave, leave” after President Mubarak said he would not immediately stand down Picture: REUTERS very little.
Army must save the country now.”
Robert Springborg, professor of Cario’s military head General during Mubarak’s speech, on hopes rich Middle East.” ANALYSIS l Yield on 10-year
national security affairs at the US Hassan al-Roueini had told protesters that it would end weeks of uncertainty. Oil cartel OPEC said yesterday that it Portuguese bond spikes
Naval Postgraduate School, said: “The in Tahrir Square earlier in the day that London Brent oil also gave up gains is increasing production to help ease 7.6
speeches [last night] are not intended “all your demands will be met today”. to close at $101.52 (£63.09) for March the ongoing pressure on prices.
to bring an end to the crisis in a peace- Foreign secretary William Hague, delivery on expectations that Mubarak Deputy governor of the Central 7.5
ful way but to inflame the situation so who is in Bahrain, said it was not would use his speech to resign, but Bank of Egypt, Hisham Ramez, said
YIELD %

there is justification for the imposition “immediately clear” which powers head of trading consultant Cameron yesterday that the Egyptian markets 7.4
of direct military rule. Mubarak planned to transfer, and that Hanover, Peter Beutel, said last night: were “functioning in a normal way”
“They are risking not only the coher- the UK government would closely fol- “The great fear of the oil market is that with some foreign investors taking 7.3
ence of the military but even indeed, low any developments. violence and protests which seem like- part in the first bond auction since the
and I use this term with advisement In the US, the S&P and Nasdaq were ly to intensify after the speech may be unrest, though the bank had to offer
here, civil war.” slightly higher as the markets closed transferred to other parts of the oil- yields of 11.8 per cent. 9am 11am 1pm 3pm 5pm

FTSE 100 t6,020.01 -32.28 DOW t12,229.29 -10.60 NASDAQ ▲2,790.45 +1.38 £/$ 1.61 unc £/¤ 1.18 ▲+0.01 ¤/$ t1.36 -0.01 Certified Distribution
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2 News CITYA.M. 11 FEBRUARY 2011

Some good news in a gloomy world NEWS | IN BRIEF


Briton to head up Olympus
A British businessman will become head
of Japanese camera-maker and technol-
and the general anti-business climate It would be a total disaster were left- guage, commonly used in internation- ogy group Olympus, the firm announced
that are slowly throttling large parts of wing activists to get their wish and al commerce, international dispute yesterday, as the firm tries to turn itself
the private sector. Britain to slap a transactions tax on resolution and arbitration: the num- around following the downturn.
Forex trading – loathed by propo- currency trading. ber of disputes involving international Liverpool-born Michael Woodford, who
nents of the destructive Tobin tax – is Law is another successful yet under- parties resolved in London rose 59 per has been with Olympus for three years,
one of the few bright spots in the City. appreciated part of the economy. cent to 5,297 between 2007 and 2009. will take over as president when
London increased its share of global Exports from the UK of law firms It is not David Cameron or George Tsuyoshi Kikukawa moves to become
forex trading to 37.2 per cent in totalled £3.2bn in 2009, up nearly Osborne’s job to pick winning econom- chairman on 1 April. Kikukawa said yes-
EDITOR’S LETTER October 2010, from 36.7 per cent six three times over the past decade. Two ic sectors. It makes no sense for the terday that Woodford’s promotion to
months earlier. We are up from 31 per of the top five global 100 firms, based coalition to pontificate about those the top job is part of an effort to reach
ALLISTER HEATH cent at the start of the decade. The US on gross revenue, are from the UK. areas of the economy it claims to know more global markets.
is on 17.2 per cent, Japan 6.2 per cent Overall, London firms generated an will do well and create jobs – and
BRITAIN is losing market share in glob- and Singapore 5.9 per cent. The UK’s astonishing 14 per cent of the global promptly humiliate itself when one of More suitors emerge for Eon
al investment banking, retail banking daily trading averaged $1.821 trillion 100 gross revenue (against 54 per cent the key ones, pharmaceuticals, actual- Utility giant Eon is thought to have field-
and private equity – and has been in October 2010, up 8 per cent on April for the US and 19 per cent for the ly turns out to be in long-term crisis, as ed several fresh bids for its UK electrici-
hammered especially badly in hedge 2010 and a quarter higher than a year whole of Europe ex-UK). The real dan- demonstrated by Pfizer’s cuts to its ty grid distribution business. US energy
funds and energy trading, where firms earlier. Twice as many dollars are trad- ger is the growth of Asia (already at 10 R&D division in Kent. supplier PPL, Hong Kong-based CKI and
and people have upped sticks to ed on the foreign exchange market in per cent) and the fact that some of the But equally the coalition should MidAmerican Energy Holdings, owned
Switzerland. But it is not all grim for the UK than in the US; more than business being conducted there could stop deliberately downplaying and by Warren Buffett’s Berkshire
the City. Two areas that are still doing twice as many euros are traded in the have been done here. So far, there has hammering unfashionable industries Hathaway, were among those named
well are foreign exchange trading and UK than in the Eurozone. Foreign been no decline in UK market share: in in which we evidently have a compara- yesterday as potential suitors for the
legal services, according to research owned institutions account for around 2009-10, the downturn triggered a 6 tive advantage. London still excels in business. All three firms already have
from CityUK. 70 per cent of foreign exchange trad- per cent reduction in fee revenue of many areas; the private sector should operations in the UK. Eon, which has
So far at least, these sectors have suc- ing in London, confirming the need to law firms globally to $74.6bn – but UK be given the freedom to continue to do taken on JP Morgan Chase and Barclays
cessfully resisted decline, despite the retain global firms and their staff in law firms’ fee revenue outperformed, what it does best. to advise it during a €15bn (£12.7bn)
sweeping increases in tax and regula- London. The industry is a great success dropping by 4 per cent to £13.7bn. allister.heath@cityam.com asset sale over the next three years, was
tion, restrictions on non-EU migrants story, paying tax and employing staff. English law is, like the English lan- Follow me on twitter: @allisterheath unavailable for comment last night.

7th Floor, Centurion House,


24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Further audit
rules planned
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
REGULATION also consider making firms change

Lifestyle Editor Zoe Strimpel


Sports Editor Frank Dalleres BY ALISON LOCK auditor regularly and would encour- Michel Barnier warned he could crack down again on bonuses
Art Director Craig Gaymer age new market entrants.

Barnier threatens bonuses


Pictures Alex Ridley AUDITORS’ work came under fresh Separately, the Bank of England
scrutiny yesterday by EU and UK regu- and Financial Services Authority
Commercial lators. issued a draft code of practice for
Sales Director Jeremy Slattery EU internal market commissioner auditors to ensure they coordinate
Commercial Director Harry Owen Michel Barnier told a Brussels confer- their work better with regulators.
Head of Distribution Nick Owen ence he was preparing a directive for Richard Thorpe, FSA auditing and
November to overhaul audit oversight. accounting sector leader, said: “The POLITICS whether the current rules are being

Distribution helpline He said auditors should be more FSA and its successor organisations, as followed properly.
If you have any comments about the distribution BY MARION DAKERS
of City A.M. Please ring 0207 015 1230, or email accountable to wider economic stake- supervisors, need to have confidence European rules dictating that at
distribution@cityam.com holders – investors, stock exchanges, in audited financial information to THE EU’S new rules restricting bank least half of bank bonuses must be
clients and suppliers – and auditors’ ensure that we are making informed bonuses might not be enough to deferred for three years, plus limits
Editorial Statement independence should be reasserted. judgements and the right decisions.” limit risky behaviour, the bloc’s on cash awards, were introduced in
This newspaper adheres to the system of Conflicts of interest that have “tar- financial services chief Michel January, and are already seen as the
self-regulation overseen by the Press Complaints nished” the profession, such as when Richard Thorpe of the Barnier said yesterday. toughest bonus curbs in the world.
Commission. The PCC takes complaints about the auditors supply extra non-audit serv- The French commissioner warned “Remuneration, bonuses – these
editorial content of publications under the Editor’s FSA says there needs
ices to clients, could be prohibited an industry gathering yesterday that are the things that are shocking for
Code of Practice, a copy of which can be found at
www.pcc.org.uk under new rules, he said. to be more information the EU “will look into current meas- people who find it difficult to get to
Printed by Newsfax International,
“The status quo is not an option for passing between audi- ures on remuneration and we will the month’s end,” he said. “Banks are
Beam Reach 5 Business Park, the auditing world,” he said. tors and the regulator look into whether or not it is part of European society. They
Marsh Way, Rainham, Essex, RM13 8RS Barnier said EU authorities would enough”, alongside examining should take this into account.”

WHAT THE OTHER PAPERS SAY THIS MORNING


power to contain tuition fees if too
many institutions attempt to raise
their charges close to the maximum.
BIG SOCIETY PLAN “WILL NOT PLUG INQUIRY SOUGHT TO STOP AIRLINES SPAIN ORDERS DRASTIC CAJA CLEAN- FOR UK BANKS, A CALAMITY IS BORN
CUTS GAP” CAIRN TAKES TOUGH LINE ON OIL- CASHING IN ON CARD PAYMENTS UP TO WIN CONFIDENCE AND FIGHT UK bank regulators are launching a
The Big Society Bank and other social FIELDS SALE Budget airlines could face an official OFF EMU DEBT CONTAGION new type of “stress test” that forces
finance initiatives will not be enough Cairn Energy, the UK-listed oil and gas inquiry into “rip-off” credit and debit Spain has imposed draconian rules on banks to consider unlikely but poten-
to replace charitable projects hit by company, has hardened its stance in card charges after the Which? con- its saving banks and is preparing for tially disastrous scenarios like a flu
government spending cuts, according its battle to secure the Indian govern- sumer group lodges a “super-com- part-nationalisation of the industry to pandemic or disruptions to the coun-
to figures compiled by the Financial ment’s approval for its proposed plaint” next month. The charity is restore confidence and boost the try’s food-supply chain. The latest
Times and the Young Foundation $9.6bn sale of oilfields in Rajasthan, using its statutory powers to ask the country’s defences against contagion exercise, which the UK’s Financial
think-tank. Geoff Mulgan, former rejecting conditions being placed on Office of Fair Trading to investigate from the debt crisis in Portugal. The Services Authority instructed banks
strategy director at Number 10 and the transaction. The directors of the fees, which can reach hundreds weaker banks, or “cajas”, must raise to start conducting in mid-December,
head of the Young Foundation, said: Cairn’s Indian subsidiary on of pounds for some transactions. Tier 1 core capital to 10 per cent by is dubbed a “reverse stress test”.
“There are a lot of fertile ideas about Thursday said they “cannot accept” September if they depend on whole-
[raising money] and things are start- any interference that might change CHANNEL 4 PLANS TO BECOME sale capital markets for over a fifth of BLOCKBUSTER HEADS TOWARD SALES
ing to happen. But even on the most the value of the sale of a controlling CHANNEL 6 WITH LOCAL NEWS their funding or if less than a fifth of BLOCK
optimistic scenarios there is a vast stake in the company to UK-listed OUTLET their shares are in private hands. Blockbuster is preparing to put itself
gap between the scale of new money Vedanta. They said uncertainty over Channel 4 will bid to become the host up for sale after creditors disagreed
coming into social ventures and the the deal was affecting the business. broadcaster for the government’s INTERNATIONAL MONETARY FUND on plans to give the movie-rental
sheer speed and scale of the spending new network of city-based television DIRECTOR DOMINIQUE STRAUSS-KAHN chain more cash to help it exit bank-
cuts.” EUROFIGHTER TO OFFER INDIA A ROLE stations. It is understood to be consid- CALLS FOR NEW WORLD CURRENCY ruptcy protection, people familiar
The Eurofighter consortium is pre- ering plans to overhaul one of its dig- Dominique Strauss-Kahn, managing with the matter said. Blockbuster
STUDENT LOAN COST FEARS SPARK pared to offer India a manufacturing ital channels, E4 and More4, or their director of the International now plans to seek buyers instead of
TUITION FEES THREAT role, as the international race intensi- timedelayed “+1” counterparts, to act Monetary Fund, has called for a new reorganising in bankruptcy court and
Ministers have warned universities fies to supply 126 jet fighters worth as a national “spine” for a host of world currency that would challenge could ask a judge to approve bidding
that the government will seek new $11bn to New Delhi. local news providers. the dominance of the dollar. procedures as soon as next week.
CITYA.M. 11 FEBRUARY 2011 News 3

Two years of record low rates US budget deficit widens


UK ECONOMY close vote,” said Howard Archer of IHS “We expect rates to rise soon and
to near $50bn in January

BY JULIAN HARRIS Global Insight. rise further than markets price in,”
“Given the difficult inflation envi- said Michael Saunders of Citigroup.
INTEREST rates will stay at half a per ronment we suspect there was a con- The Bank’s inflation report, pub- expecting a $70bn shortfall.


US ECONOMY
cent for the 24th month in a row, the siderable debate at the meeting over lished next Wednesday, will provide The deficit for the fiscal year to
Bank of England announced yesterday. whether or not to raise rates,” echoed new evidence on how seriously it con- THE US budget deficit widened less date narrowed to $419bn from
Analysts were unsurprised by the Investec economist Philip Shaw. siders the threat of lingering price than expected in January but was still $431bn but is expected to expand as
decision to keep rates at a record low, Andrew Sentance and Martin Weale inflation, as well as the fragility, or the second-highest on record for the the effects of payroll and business tax
but expect the meeting’s minutes, may have been joined by another col- strength, of the British economy. month, underscoring the liability it cuts kick in.
published on 23 February, to reveal a league voting for a quarter point “We expect an upward revision to has become for the Obama adminis- The figures came as the US House
fractious and increasingly hawkish increase in rates, suggested Alan the inflation projection, particularly tration. Speaker, Republican John Boehner,
feel to the committee. Clarke of BNP Paribas. “Given the at the two year ahead horizon,” Clarke The gap broadened to $49.8bn called for the biggest budget cuts in
“The Bank’s decision likely followed worse news on inflation we would not said. “At the very least that is likely to (£30.9bn), held back in part by a rise US history as part of the Congress
an intense, heated debate and could be surprised if there was an additional show that the committee is moving in tax receipts, the Treasury debates on President Obama’s federal
well have been the result of a very dissenter,” Clarke said. closer to a rate hike.” Department said. Analysts were budget for 2012.

MPs decide
Russian IPOs prisoners have
pulled due to no right to vote
POLITICS


Egypt unrest MPs yesterday voted overwhelmingly
in favour of a ban on prisoners having
the right to vote.
The cross-party motion, tabled by
Jack Straw and David Davis, was
passed by 234 votes to 22.
But parliament is likely to have to
CAPITAL MARKETS investors pulled more than $7bn from agree on a watered-down version of

BY RICHARD PARTINGTON such funds in the week to 2 February, the ban, as it puts the government on
largely due to unrest in Egypt. a collision course with the European
NORD GOLD, the gold mining unit of Earlier this week, pump manufac- Court of Human Rights.
steel giant Severstal, has become the turer HMS Hydraulic was forced to cut In 2005 the European court ruled
latest Russian firm to scrap plans for a its price range in order to list in the voting ban was contrary to the
London initial public offering (IPO). London. Alexey Mordashov’s Nord Gold IPO has been postponed Picture: Reuters European convention on human
The miner, led by billionaire Alexey It will now raise just $360m, as rights. The British government was
Mordashov, is the latest casualty of opposed to between $396m and ANALYSIS: RUSSIAN IPOS IN LONDON given until this summer to pass more
the ongoing volatility in emerging $580m as originally planned. relaxed legislation.
markets, fuelled by unrest in Egypt. Sources close to the Nord Gold, Company Price Range Status Advisers Initially, the government proposed
Nord Gold had been seeking to raise Chelpipe and Koks IPOs said the firms giving the vote to prisoners serving
up to $1bn (£622m) to pay down debt, were unwilling to cut their list price NORD GOLD $4.80 - $6.25 postponed Morgan Stanley, Credit sentences of less than four years.
yet sources close to the deal said last in order to come to market. But MPs from across the political
night it would be postponed. A planned privatisation drive by the (part of Severstal Group per share Suisse, Troika Dialog divide backed yesterday’s motion,
It is the biggest of three aborted Russian government later this quarter which rejects the European court’s
Russian IPOs, following steel pipe will make it tougher still for the coun- ruling.
maker Chelpipe’s $688m attempt and try’s corporations to list. CHELPIPE $3.50-$4.60 scrapped JP Morgan The government has been warned
coking coal producer Koks $500m Head of research at Moscow-based it faces hundreds of compensation
effort. Unicredit Securities Rustam Botashev claims from disgruntled inmates.
Chelpipe yesterday blamed “unusu- said: “The government plan made
al market sentiment” for the decision Russian corporations look to tap the HMS $9.25 - $12 listed at $8.25 JP Morgan, Morgan Prime minister David
to pull its IPO altogether, whilst Koks markets before it privatised compa- HYDRAULIC Stanley, Renaissance Capital Cameron said he believes
last week postponed its listing as a nies.
result of “market conditions”. “When the government comes to prisoners should not have
The firms were hoping that emerg- the market, it will be more difficult voting rights because of
ing markets funds would become for Russian corporations to raise KOKS $6.25 - $8 postponed Citi, UBS, VTB Capital their crimes
institutional shareholders, but money.”
4 News CITYA.M. 11 FEBRUARY 2011

Sir Stelios hits


TIMELINE | EASYJET’S FIGHTS
WITH FOUNDER SIR STELIOS

March 1995
Stelios Haji-Ioannou sets up easyJet using

out at easyJet funds from his family’s shipping business

22 November 2000
EasyJet floats on the London Stock
Exchange, valuing the firm at £777m

pay decisions 26 November 2002


Stelios resigns as easyJet chairman to
spend more time on other ventures

May 2005
Stelios returns to the board as a non-exec;
seven months later Andy Harrison joins as

AVIATION were determined by the remunera-


tion committee and to the best of my chief executive
BY MARION DAKERS
knowledge were communicated to
EASYJET’S largest shareholder Sir the full board.” August 2008
Stelios Haji-Ioannou has spoken out Sir Stelios wrote that he plans to Stelios takes easyJet to court for using the
against an ex-chief executive’s pay, in vote against a resolution to approve “easy” brand to make money from ventures
the latest flare-up between the budg- directors’ pay at the shareholder that compete with his other businesses
et airline and its founder that could meeting next Thursday, and will also
cause fireworks at next week’s AGM. abstain from a vote to re-elect David November 2008
Sir Stelios, whose family owns a 38 Michels as senior independent direc- Stelios raises his stake in easyJet and
per cent stake in easyJet, wrote to tor. demands two additional board seats, after
chairman Michael Rake to complain EasyJet shares, which took a batter- refusing to sign off the firm’s accounts
that former chief executive Andy ing last month after forecasting
Harrison was paid £2.2m between £160m half-year losses, fell 2.2 per July 2010
April and September 2010, despite cent yesterday to close at 380.5p. Harrison quits after a row over strategy
leaving his full-time post in July. and is replaced by Carolyn McCall
“The main criticism… is that by ANALYSIS l easyJet
insulating the pay of Harrison from
p 380.50 14 May 2010
the actual results in the 2009 deal, he 10 Feb After failing to nominate board members,
gave the CEO the right to destroy 460 Stelios resigns again in order to lobby for
shareholder value in the summer of strategy change as an investor
2010 with impunity,” Sir Stelios said.
Harrison, who is now the chief 420
executive of Whitbread, replied in a 11 October 2010
statement: “As chief executive of EasyJet agrees a deal to pay Stelios to use
easyJet, my job was to implement the 380 the “easy” brand name on certain non-air-
strategy agreed by the board. line services
“All aspects of my remuneration 15 Nov 3 Dec 23 Dec 17 Jan 4 Feb Sir Stelios (top) and former chief executive Andy Harrison Pictures: GETTY/ REUTERS
CITYA.M. 11 FEBRUARY 2011 News 5

Irish recaps could


Credit Suisse chief
executive Brady
Dougan said lower
bonuses had been
partly offset by

wait for stress test


higher base
salaries.

Picture:
GETTY

25 February election, said a new


EUROZONE
BY HARRY BANKS administration should wait until after
the central bank completes its sector
A NEW Irish government is likely to review, at the end of March, before
wait until a fresh round of stress tests putting more capital into lenders.
are completed before recapitalising “If there is no government until 9
the country’s top lenders, giving the March or beyond that, I think it is pru-
only bank left trading on the main dent for (an) incoming government to
index more time to avoid state con- wait until stress testing before putting
trol. capital in,” Fine Gael’s finance
The main opposition party, expect- spokesman Michael Noonan said yes-
ed to lead the next government after a terday.

Credit Suisse
cuts bonuses
and dividend
of banks: “The industry is facing a

BANKING
BY JULIET SAMUEL new environment with more capital
requirements and new business con-
CREDIT Suisse has cut back on bonus- ditions.”
es dramatically, announcing at its The bank’s profitability was hit by
full-year results yesterday that 2010 stringent Swiss capital requirements
bonus payouts were down 25 per cent that go beyond the Basel III regula-
per employee compared to last year. tions. It announced a core tier one
The bank also downgraded its all- capital ratio of 17.2 per cent, up from
important return on equity forecast – 16.3 per cent last year.
a key prediction of mid-term prof- Credit Suisse also cut its full-year
itability – from 18 per cent to 15 per dividend by more than expected. It
cent, citing strict Swiss capital will fall to SwFr1.30 a share for 2010
requirements as a drag on earnings. from SwFr2.00 the prior year.
The bank’s overall compensation Like many of its rivals, its invest-
costs fell nine per cent per person, ment banking division was also hit
however, ahead of a six per cent fall in hard by slow trading due to market
revenues to SwFr31.4bn (£20.1bn). uncertainty in the second half of last
Chief executive Brady Dougan said year.
that lower bonuses had been partly Despite gaining market share, pre-
offset by bigger base salaries, while tax profits at the investment banking
there was a five per cent increase in arm plunged 48 per cent to SwFr3.5bn.
global headcount to 50,100. The bank said it was hit hard by the
Unlike many global investment strong Swiss franc, with many of its
banks, Credit Suisse does not link revenues in dollars and costs in francs.
bonuses purely to revenues but uses a Despite the drag from Swiss regula-
range of other metrics to generate tions, however, Dougan said that the
bonus payments. rules had at least given them the abil-
Overall, the bank’s results disap- ity to plan, saying: “We have emerged
pointed, with pre-tax profit down 21 from the regulatory uncertainty that
per cent on 2009 to SwFr6.8bn. the rest of the industry is still experi-
Chief executive Brady Dougan said encing.”

Investors balk at bad news


INVESTORS didn’t like the bevy of third was too steep for some. In a
bad news from Credit Suisse. Lower way, Credit Suisse has over-promised
profits – and lower expectations in and under-delivered. It has repeated-
the medium term – were com- ly told shareholders that their
pounded by a bigger-than-expected returns wouldn’t be hurt by
drop in the dividend. Shares lost Switzerland’s famously tough capi-
almost six per cent yesterday to tal requirements. But with mid-
close down at SwFr42.10 (£27). term profitability expectations
Chief executive Brady Dougan downgraded and lower dividends,
will likely be miffed. In many ways, that isn’t the case.
he has steered the bank through the UBS, although in a worse shape,
crisis remarkably well, especially has been incredibly cautious, deny-
compared to closest rival UBS ing investors even the prospect of a
(which had to contend with the dividend for several years.
highly-damaging US tax agree- Still, yesterday’s sell-off was likely
ment). Credit Suisse pulled in net over-done, providing a buying
new assets of SwFr68bn over the opportunity for others.
year, compared to an annual net
outflow of SwFr14.3bn for UBS.
So why did investors walk? Firstly,
the dividend cut of more than a
BOTTOMLINE
Analysis by David Crow
6 News CITYA.M. 11 FEBRUARY 2011

Bloomberg backs merger of BLACKS LEISURE CHIEF TO STEP DOWN

Deutsche Boerse and NYSE


intense scrutiny from German regula- tor with unprecedented global reach

CAPITAL MARKETS
BY HARRY BANKS tors and European anti-trust authori- and -- most worrisome for regulators –
ties, potentially putting the a dominant grip on Europe’s lucrative
NEW York Mayor Michael Bloomberg blockbuster exchange tie-up in peril. derivatives markets.
yesterday gave his full-throated sup- It could also face hurdles in While executives from Frankfurt
port to Deutsche Boerse’s planned Washington as US lawmakers and reg- and New York have hatched a tentative
takeover of NYSE Euronext. ulators consider whether they are pre- agreement, there are still obstacles
He said of the proposed deal: “It’s pared to allow such an iconic that must be overcome -- hurdles that
going to give us access to Europe, and institution to fall into foreign hands, have scuppered attempts to combine
Europe access to the US in a way our although early criticism was muted. Deutsche Boerse with Paris-based
competitors like London will not The companies said on Wednesday Euronext. “These key questions are not
have.” they are in “advanced talks” to join yet resolved,” a senior German finan-
However, the deal is likely to face forces and create an exchange opera- cial source said yesterday.

NEIL Gillis, chief executive of Blacks Leisure, has announced he will leave his role, two

The Great
weeks after the outdoors retailer said it had been unsuccessful in its search for a bidder.
Gillis, who has been chief executive at Blacks since November 2007, will not receive a pay-
off, and will work his six months notice period. Gillis said it is “right for another individ-
ual to lead the business in the final phase of the turnaround programme”.

Getaway! Hargreaves
lambasts bill
for bust firms
Yet some City firms have spoken

FINANCIAL SERVICES
BY RICHARD PARTINGTON out against the levy, which they say is
unrelated to their area of business.

.99*
THE FOUNDER of fund manager The Association of Private Client

29
Hargreaves Lansdown has warned a Investment Managers and
controversial compensation scheme Stockbrokers, along with several of its
could put firms out of business, members, will next week meet with

£
resulting in spiralling costs for the the FSCS to voice concerns over the
financial services industry. current system.
Peter Hargreaves said the Financial The firms could lobby for several
Services Compensations Scheme options, including an extended pay-
(FSCS) levy, which hit his firm for £3m ment period or staggered instal-
for 011
last year, said some companies would ments.

ly 2 be unable to pay the charge. The Investment Management

13 Ju
“There are firms that might not be Association is also considering a judi-
as profitable as mine that might have cial review of the FSCS levy on behalf

rch to to pay this amount of money and of its members.

1 Ma
they can’t,” he told City A.M.. Hargreaves Lansdown yesterday
“They could go out of business, not posted a 41 per cent increase in half-

l from pay the levy and then not pay com- year pre-tax profits to £56.3m, despite

e
pensation to clients. being hit by the FSCS levy.

Trav
“There could be a domino effect Hargreaves said: “We’re footing the
and we could get loaded with bigger bill for liabilities of which we know
and bigger bills.” nothing about and we have no say in
The FSCS levy demands investment whether we should foot the bill or
firms pay into a £450m pot used to not.
compensate investors in funds that “We’re being asked to pay taxes
have gone bust. without any vote.”

BP’s Russian deal is put on hold


until March by arbitration panel
Hurry, book now
rights to BP’s activities in Russia

ENERGY
through arbitration.
BP must wait until at least March to “The arbitral tribunal has ordered

while stocks last!


learn the fate of its £10bn share-swap that a final hearing on certain mat-
with Russian oil firm Rosneft, after an ters to be agreed will take place in the
arbitration tribunal yesterday extend- week commencing 7 March 2011,” BP
ed the injunction blocking the deal. confirmed in a statement.
Russian investor group AAR, which “The injunction which has put on
*Price single inc. taxes, availability and prices correct as at 7 February 2011. Available to book now while stocks last. Offer valid owns half of BP’s Russian venture hold the Rosneft transaction
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February while it tries to establish its outcome of this arbitration hearing.”
CITYA.M. 11 FEBRUARY 2011 News 7

Dotcom fears
DOT COM MADNESS RETURNS *SOME FIGURES ARE MARKET ESTIMATES

Fantasy tweets...*
facebook: @twitter
Hey, liking your style,

amid $10bn Value: $315m Value: $6bn


how about me and you
hook up??? Enjoying
being single? How
does $10bn sound? I’m
the CEO &*^%$

Twitter talks
2010 revenue: $50m 2010 revenue: $350m
Multiple: 6.3x Multiple: 17x twitter: @facebook
2010 profit: $15m 2010 profit: $50m $10bn???? SRSLY????
I mean, yeah, let’s talk.
Call me!!!

TECHNOLOGY placed a number of its privately held


BY STEVE DINNEEN shares. Facebook brought in revenues
of around $2bn last year.
FEARS that a second dotcom bubble is Ian Maude of Enders Analysis told google: @twitter wait!!!
rising grew yesterday, with Google City A.M.: “It looks like March madness will pay whatever
and Facebook both understood to be has come early. There have been a @facebook is offering.
in talks to buy Twitter for up to $10bn number of pretty crazy valuations Must control everything
Value: $50bn Value: $10bn on internet. Don’t be
(£6.23bn). recently but this one wins the prize. evil!!!
The Silicon Valley giants are in
“very speculative” negotiations to
“Facebook has a high valuation
but it has a much deeper relation-
2010 revenue: $2bn 2010 revenue: $45m
take control of the hugely popular ship with its customers than Twitter Multiple: 25x Multiple: 222x
microblogging site for a valuation of does. There may be ways to better 2010 profit: $400m 2010 profit: Small loss
between $8-10bn, according to people monetise the service but $10bn is apple: OMG!!!!!
close to the deal. astronomical.” @facebook and
In its recent financing round, But Nic Brisbourne, an investment
Twitter was valued at $3.7bn, after manager for DFJ Esprit, said: “It’s a @google have gone
selling $200m worth of shares. The big multiple, but they are clearly not mad!!!! LOLZ!!!!!!
site has 175m registered users who looking at Twitter on a multiple
send 95m “tweets” of up to 140 char- basis.
acters every day. “Google bought YouTube for
The talks follow the rejection of a $1.65bn on revenues of virtually zero. AOL: #twitter staying
$6bn Google bid for online deal site “It looked at the market and decid- well away from this.
Groupon in December. LinkedIn, the ed that was an important sector to #HuffPo risky enough.
professional networking site, is control. It could apply the same logic
Value: $2bn Value: $200m Didn’t really enjoy the
expected to reach a valuation of to Twitter. It is a fantastic service – 2010 revenue: $205m 2009 revenue: $97m first dotcom bubble
#time_warner #bebo :(
around $2bn after filing plans for an
IPO. And Facebook has been valued at
any valuation is going to be based on
where the market is at and the mar-
Multiple: 10x Multiple: x2
a staggering $50bn after Goldman ket is very frothy right now.” 2010 profit: $2.3m 2009 profit: £1m loss * as imagined by City A.M.
CITYA.M. 11 FEBRUARY 2011 News 9

Record profit PROFILE | SIR JOHN ROSE

AT the end of yesterday’s analysts’

for Rio Tinto


briefing on the Rolls Royce results,
Sandy Morris of RBS, the doyen of
the aerospace sector, stood up and
gave a vote of thanks to Sir John
Rose, one of British industry’s
iconic figures. Applause from the

on iron prices
60-odd analysts present followed.
It was a fitting tribute to a man
who has led the company as chief
executive since 1996 and whose
reign has in the main been an out-
standing one.
True, the last few months of Sir
John’s tenure were marred by the
failure of the group’s Trent 900

MINING Chief executive Tom Albanese said: engine on an Airbus plane, but as
BY MARION DAKERS “Rio Tinto is reinvigorated, running industrial catastrophes go this
strongly and benefiting from Sir John Rose reported his last results before retirement Picture: REX was a manageable one, if there
RIO TINTO was the latest miner to post favourable markets.” can ever be such a thing.

Rose’s last hurrah at Rolls


record profits on the back of soaring Chairman Jan du Plessis added that Mercifully there were no
commodity prices yesterday, as it sur- the firm will continue to make small human casualties related to the
prised investors by more than dou- to medium sized acquisitions. failure and after a few days of
bling its full-year dividend and Rio’s shares dipped 2.4 per cent to unhelpful headlines the group

as it posts rising revenue


announcing a $5bn share buy-back. £45.49 yesterday, faring worse than has come out the other side with
The Anglo-Australian miner said the rest of the FTSE 100, as earnings its reputation intact. This was no
pre-tax profit for 2010 more than dou- fell one per cent short of estimates BP-style disaster.
bled to $20.6bn (£12.8bn), while under- and on disappointment that the buy- Under Sir John’s stewardship
lying earnings rose 122 per cent to back will not return cash to sharehold- Rolls-Royce became a truly global
around $14bn. ers more quickly. player, with an order book that
Rio said the price movements on ENGINEERING Rishton. has grown from £7.6bn in 1995 to

commodities including diamonds and ANALYSIS l Rio Tinto BY MARION DAKERS “The view for 2011 is that we’ll con- £58.3bn now and a share price
iron ore made a $9.5bn contribution tinue with good growth in underlying that has grown from 188p to 645p.
to the earnings rise, though produc-
4,800 p 4,549.00 ENGINE-MAKER Rolls-Royce reported a profit, supported by services growth One would imagine the govern-
10 Feb
tion volumes also rose thanks to the four per cent rise in underlying annu- in the civil aerospace and marine sec- ment will be keen to use Sir John’s
major expansion of its iron ore project 4,600 al pre-tax profit to £955m yesterday, tors,” said Rose yesterday. services as it strives to find a con-
in Pilbara, Western Australia. and told investors most of the costs Revenues rose six per cent to vincing growth strategy for the UK
The firm also reduced its debts from 4,400 linked to last year’s A380 engine prob- £11.1bn, and the firm raised its final economy. Business Secretary Vince
$18.9bn to $4.3bn during the year. lems have been dealt with. dividend 6.7 per cent to 9.6p. Cable speaks of Sir John’s “huge
Rio raised its dividend to $1.08 per 4,200 The results announcement was the Operating profits fell slightly as contribution”. At Rolls, he will be
share, 20 per cent above previous guid- last for chief executive Sir John Rose, £56m costs linked to the A380 engine, a hard act to follow.
ance, and unveiled plans to return who retires next month and will be which malfunctioned on a Qantas By David Hellier
$5bn to investors by the end of 2012. 15 Nov 3 Dec 23 Dec 17 Jan 4 Feb replaced by former Ahold boss John plane last year, were absorbed.
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10 News CITYA.M. 11 FEBRUARY 2011

Pepsi lowers its targets


call, said the lowered longer-term out- Pepsi said it now expects 2011 earn-


FOOD AND DRINK
look was prudent given the uncertain ings to rise seven per cent to eight per
BY HARRY BANKS economic conditions. cent, with high single-digit growth
PEPSI cut its earnings growth targets “We have no idea what the com- beyond that. It had earlier forecast
for 2011 and beyond yesterday, citing modity markets are going to look like low double-digit percentage rate
higher commodity costs, a difficult in 2012 and beyond,” Nooyi said on growth for 2011 and 2012.
economy and investments in emerg- the call. In the fourth quarter, Pepsi’s net
ing markets. The results come a day after rival income fell five per cent to $1.37bn
Chief executive Indra Nooyi, who Coca-Cola surprised the market with (£850m), or 85 cents per share. Its
was peppered with tough questions sales volume increases in all of its seg- sales jumped 37 per cent to $18.16bn,
Chief executive Indra Nooyi says the commodities market is uncertain Picture: GETTY by analysts during a tense conference ments. helped by buying two bottlers.

Kraft hit by Thomson


Cadbury and Reuters sees
commodities revenue lift


CONSUMER MEDIA
BY MARION DAKERS BY HARRY BANKS
KRAFT FOODS saw its quarterly THOMSON Reuters yesterday said it
income drop 24 per cent on last year expects revenue to rise in 2011 after
as the cost of taking over UK confec- stronger growth in the fourth quarter
tioner Cadbury began to bite. and more signs that its financial and
Net income at the owner of Oreo professional customers are recovering
cookies and Philadelphia cheese fell from the recession.
to $540m (£335.5m) from $710m a The company, which provides news
year ago, in part due to costs linked to and information to financial, legal,
Cadbury and to the rising price of accounting and healthcare profes-
corn, sugar and cocoa. sionals, expects 2011 revenue to rise
Revenues rose 30 per cent to by a “mid-single digit” percentage.
$13.8bn, slightly ahead of consensus Analysts on average expect 2011 rev-
estimates, including a 26.2 percent- enue to rise about four per cent,
age point gain from acquiring according to Thomson Reuters.
Cadbury in a controversial deal last As a result, the company raised its
February. annual dividend by seven per cent to
Cadbury fared badly in North $1.24 per share.
America in the fourth quarter, with The revenue forecast suggests that
net revenues dropping 6.1 per cent the company’s customers are recover-
after lower sales of Trident and Stride ing from the economic downturn
chewing gum. that caused a pullback in spending
Cadbury turnover in Europe was and widespread layoffs.
flat, with a decline in southern “A shock like the world went
Europe offsetting what Kraft said through leaves a caution that hangs
were strong sales in the UK. around for a while,” Chief Executive
Operating income in Europe fell Tom Glocer said in an interview. “But
27.7 per cent to $159m, as costs linked there’s no question that the condi-
to integrating Cadbury wiped out tions themselves are getting better in
half of the division’s profit. many of our markets.”
In emerging markets, where Kraft Total revenue from ongoing busi-
hopes to grow through its takeover of nesses rose four per cent in the fourth
Cadbury, the group saw revenues rise quarter to $3.46bn (£2.15bn), before
73.5 per cent with 61 percentage currency adjustments. Underlying
points coming through Cadbury. operating profit rose three per cent to
Kraft forecast profit growth of $669m.
between 11 and 13 per cent excluding
integration costs this year, which has ANALYSIS l Thomson Reuters
been scaled back from predictions of $
“mid-teens” growth in November’s
update. 41 40.09
10 Feb
Kraft chief executive 39
Irene Rosenfeld hopes
to see profit growth of
37
13 per cent next year
after a tough quarter 2010 6 Dec 27 Dec 18 Jan 7 Feb

Owen-Jones resigns as L’Oreal chair Sprint Nextel adds users


stay on its board and become hon- per cent for 2010 to €1.80 (£1.52) a tiny compared with growth at bigger

CONSUMER TELECOMS
BY HARRY BANKS orary chairman as of next month. share for 2010 and pledged to lift rivals Verizon Wireless and AT&T, it
The group also asked for share- profits and revenue again this year. SPRINT Nextel added mobile sub- marked a milestone for Sprint, which
L’OREAL, the world’s biggest cosmet- holder Liliane Bettencourt, descen- The group also said like-for-like scribers for the first quarter in more last reported contract customer
ics maker, has confirmed the resigna- dant of the group’s founder, to sales rose 4.1 per cent in the three than three years, sending its shares growth in the second quarter of 2007.
tion of charismatic chairman Lindsay remain on the board with the same months to 31 December, undershoot- up five per cent. While several analysts expect
Owen-Jones and elevated current terms, dismissing analysts’ specula- ing growth expectations of 5.3 per The Number Three US mobile serv- Sprint to revert to a customer loss
chief executive Jean-Paul Agon to tion she could leave in favour of cent. ice added 58,000 subscribers in the again this quarter, they applauded its
executive chairman. younger members of her family. The maker of Lancome creams quarter, ahead of the average expecta- promise to report subscriber addi-
Owen-Jones, widely regarded as the Having benefited from the mar- and Garnier shampoos made an tion for almost 17,000 customer addi- tions for the full year 2011, which
man who transformed L’Oreal from a ket’s recovery last year, Owen-Jones operating profit of €3.06bn on sales tions from analysts. would mark the first full year of
French into a global business, will proposed to raise the dividend by 20 of €19.5bn. While the customer number was growth since 2006.
CITYA.M. 11 FEBRUARY 2011 News 11

Catlin shakes off cat loss


cent to $683m, as it added ten per risk appetite has remained pretty


INSURANCE
cent to the net premiums it wrote, to constant,” he said. “It is within what
BY ALISON LOCK a total $3.2bn. It wrote $4.07bn gross we would expect in any year.”
LLOYD’S insurer Catlin returned solid premiums, up from $3.71bn in 2009. Jardine added that Catlin, Lloyd’s’
full-year results yesterday despite tak- Chief executive Stephen Catlin said largest syndicate with an 8.5 per cent
ing a $218m (£136m) hit from catas- the results were achieved “despite the market share, was not involved in UK
trophe-related losses. catastrophe losses and the low inter- M&A activity. “From a London per-
Catlin saw pre-tax profit fall by a est rate environment” that continued spective I don’t see what a further
third to $406m from $603m last year, to make the market challenging. acquisition would do for us,” he said.
but beat analysts’ forecasts of $382m. Chief operating officer Paul Jardine Catlin expects to make a $50m loss
Catlin, headed by chief executive Stephen Catlin, beat analyst expectations Underwriting profits grew five per said 2010’s losses were normal. “Our from Australian floods in January.

NEWS | IN BRIEF
Boparan to forfeit his dividend
Dynegy in
defence of
Ranjit Boparan will forfeit £36m of divi-
dend payments over three years while
he overhauls convenience foods maker
Northern Foods, according to his

Icahn bid
takeover documents lodged this week.
Boparan has brokered a deal with
Northern’s pensions trustees to plug the
£142m deficit in the fund, which will
involve pouring in £15m a year, funded
in part by Boparan’s annual dividend
award from his existing business,


M&A
2Sisters Food Group. The deal is the BY HARRY BANKS
same one that Greencore had promised
Northern as part of their planned merg- DYNEGY yesterday defended its bid to
er in November. sell itself for $665m (£413m) to bil-
lionaire Carl Icahn, arguing weak
Geo-Alliance gives up Regal bid market conditions could force the
Energees came closer to taking over power company into a liquidity crisis
AIM-listed explorer Regal Petroleum unless the deal goes through.
yesterday, as rival bidders Geo-Alliance The $5.50-a-share deal has come
and Heamoor walked away from making under fire from hedge fund Seneca
an improved offer. Energees, whose Capital, which led a similar effort to
£85m bid won the support of Regal’s oppose the company’s previous deal
board last Sunday, also received irrevo- to sell itself to private equity firm
cable undertakings from Ukrainian fund Blackstone Group. Shareholders voted
manager Timur Khromaev yesterday, that deal down in November.
taking total support for the bid up to “Given Dynegy’s cash flow position,
14.54 per cent. Regal shareholders have we believe there are serious questions
until next Thursday to accept the 38p as to whether Dynegy will have suffi-
per share offer for 70 per cent of the cient liquidity available to reach even-
firm. tual market recovery,” the special
committee of Dynegy’s board of direc-
Zurich profit slips 13 per cent tors said in a letter to the company’s
Insurer Zurich Financial Services saw shareholders.
its 2010 profit fall 13 per cent to Dynegy, which sells power at com-
$4.9bn (£3.04bn) from $5.54bn in petitive rates into the open market, is
2009, as catastrophe claims rose and it trying to sell itself in the face of weak
paid one-off costs in Russia and the US. natural gas prices, which often dic-
Zurich, which wrote premiums of tate power prices.
$33.1bn in 2010, made $3.45bn net But Seneca has said that manage-
profits, in line with market forecasts, ment has consistently undervalued
and increased its dividend six per cent the company, and is arguing that
to SwFr17 (£11). But S&P analyst Tony Dynegy is worth $7.50 to $8.50 a
Silverman downgraded his 2011 income share. Dynegy shares closed at $5.74
forecasts by four per cent, saying he on the New York Stock Exchange yes-
saw little potential for share price rises terday
despite its effort to improve its non-life The Dynegy directors argued in the
underwriting. letter that accepting the Icahn bid
was superior to the risks of remaining
Nova Ljubljanska loses €202m an independent company.
Nova Ljubljanska Banka, Slovenia's They also asserted that Seneca had
largest bank, made a net loss of €202m made various errors in its presenta-
(£170.7m) last year, compared with an tion materials and called some of the
€86.8m loss in 2009. “A higher loss was assumptions behind Seneca's valua-
due to high weakenings and provisions,” tion “exceedingly wishful”.
unlisted NLB said yesterday. NLB, which Icahn extended his tender offer yes-
barely passed the EU stress test in July terday, saying he needed more time to
and plans a capital hike of €250m by receive approval from the Federal
the end of March to meet tougher EU Energy Regulatory Commission. Only
capital requirements, confirmed the new about 4.4 per cent of Dynegy’s shares
shares would be sold at €116. have been tendered into the bid.

Expedia profits slip due to higher taxes Willis results top forecasts
ago. Expedia’s operating margin nar- Annual revenues rose two per cent

CONSUMER INSURANCE
BY HARRY BANKS Excluding one-time items, Expedia rowed to 18.5 per cent from 20.2 per to $3.34bn as fee and commission
said it earned 32 cents per share, com- cent. Gross bookings climbed 14 per WORLD top three insurance broker income rose six per cent in all busi-
ONLINE travel agency Expedia said pared with analysts’ average estimate cent, while transactions rose 13 per Willis saw its net profits hit $455m ness units apart from its North
yesterday its quarterly profit slipped of 36 cents per share. cent. Worldwide hotel revenue (£283m) or $2.66 a share in 2010, up American operations, which
30 per cent due to a higher tax rate The total value of Expedia’s book- climbed 15 per cent, with nights four per cent from the $436m, or remained flat both in the fourth
and increased interest expense. ings rose 14 per cent in the quarter stayed rising. Air revenue also $2.58 a share, made in 2009. quarter and in the year overall.
The largest online travel agency from a year ago to $5.75bn. increased 15 per cent. Fourth-quarter profits beat expecta- Growth drivers were reinsurance
said fourth-quarter net income The company posted revenue of Shares of Expedia fell 5.3 per cent tions, rising 24 per cent to $98m or 57 broking, which saw double-digit
amounted to $71.3m (£44.3m), or 25 $808.4m, compared with forecasts for to $24.33 following the release of its cents a share, up from $79m or 47 growth; energy, aerospace and
cents per share, compared with $801.3m. Revenue was $697.5m in the earnings from their $25.69 close in cents a share in 2009. Analysts had marine insurance; and Latin
$102.2m, or 35 cents per share, a year same period a year ago. regular trading on Nasdaq. forecast 54 cents a share profit. American and Asian markets.
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CITYA.M. 11 FEBRUARY 2011 News 13

ANALYST VIEWS: WHY DID DIAGEO’S RESULTS


Diageo hit as sales LEAD TO A DROP IN SHARE PRICE?
Interviews by John Dunne

slow down in Europe MARTIN DEBOO | INVESTEC

“ Given the momentum around the stock in recent months, where we


sense that enthusiasm for a gradual American recovery, buoyant M&A speculation
and anticipation around a compelling first-half profit story have galvanised the


CONSUMER proving popular – particularly with growth over the period. share price. This is a a poor result with further hangovers to come. The

BY JOHN DUNNE middle class customers. Despite Total group marketing spending in market had assumed there would be an upgrade to the full-year earnings
shares dropping by around four per the half increasing 12 per cent to guidance.
SHARES in drinks giant Diageo cent after the half yearly results, chief £813m.
dropped yesterday after the company executive Paul Walsh said the compa- Meanwhile Walsh said that Diageo
said that European sales were weak- ny was performing well and was hik- would continue to be based in the UK PHIL CARROLL | SHORE CAPITAL
ening and that it was pinning its ing the interim dividend. for the time being as the coalition’s


growth hopes on middle class “Emerging market sales in scotch corporate and personal tax plans
drinkers in emerging markets. have been very strong. would not be detrimental to the busi-
The company said like-for-like sales “Middle class customers in these ness. We expect that there may be some disappointment on the bottom-line
in the six months to 31 December are on the rise. Our super-premium “We do not feel compelled to be performance with worries on how [Diageo’s operations in] Europe may fare during
the rest of the year but some comfort may be taken from the reiteration of man-


rose four per cent to £5.3bn. ranges are very popular. talking about leaving,” he said.
Operating profit increased two per “There have been problems in agement’s profit guidance. Overall, we expect that there maybe some dis-
cent to £1.7bn, but fell short of the Europe and consumers have been hit appointment with worries on how Europe may fare over the year.
five per cent forecast by analysts. in Spain, but particularly Greece.” ANALYSIS l Diageo
1,260
Diageo, which has brands includ- But Russia and East Europe saw net p
1,195.00
ing Guinness and Johnnie Walker,
said European sales had been dragged
sales up 20 per cent, driven by spirits.
In the UK net sales grew by one per 10 Feb RICHARD HUNTER | HARGREAVES LANSDOWN
1,220


down by the economic crisis in Spain cent, with sales of wine like Blossom
and Greece where consumers’ spend- Hill up at the expense of beer.
ing power has been hit. Net sales fell North American sales were solid, 1,180 The initial share price weakness belies a progressively strong underly-
by 38 per cent in Greece, where excise with Canada the star performer. Net ing story. Whilst demand in Europe remains relatively weak, Diageo has continued
tax rises also took their toll. sales rose seven per cent to £1.8bn to benefit from its geographical diversification. In all, Diageo may have narrowly


1,140
However, the company said emerg- across the region. missed estimates but prospects remain positive in what is a globally diffi-
ing markets were driving growth Johnnie Walker contributed more cult environment.
with beer in Africa and scotch in Asia than a third of all Diageo’s sales 15 Nov 3 Dec 23 Dec 17 Jan 4 Feb

DIAGEO SALES GROWTH BY CATEGORY

SCOTCH BEER
sales up sales up
6
per cent *
3
per cent

VODKA
sales up Overall
8
per cent *
sales up

WINE
sales up
5
per cent *
4
per cent **
*annual organic net sales growth
** annual like-for-like sales growth Source: Diageo

NEWS | IN BRIEF
Arena bags Olympic contract er Hennes & Mauritz faces the chal- along with our Jaeger Black and
The UK’s largest racecourse operator lenge of rising raw material costs, Boutique by Jaeger collections,”
Arena Leisure said yesterday it had such as cotton, which will pressure Belinda Earl, Jaeger Group's chief
won a catering contract for the 2012 sales of budget clothing chains. “We executive, said.
London Olympics, which was expected have identified the opportunities to
to boost its profit. The company, which diversify our portfolio in different La Rinascente in sale talks
would provide catering services at two countries. One of the countries that Italian department store chain La
venues for the Olympic and Paralympic we have identified is Bangladesh,” Rinascente could be put up for sale,
Games in 2012, said its 2012 net profit Esprit’s chief executive Ronald Van der after its three major stakeholders
contribution from the contract would Vis said. “We will open selectively new started discussions about selling their
be up to £1m. For the six months sourcing offices in future in markets shares. Investment bank Deutsche
ended June, the company had posted where we believe there are opportuni- Bank, which owns just under a third of
an adjusted pre-tax profit of £1.2m. ties for us.” Esprit shares ended down the 13-store chain, Italian landlord
Arena, which supplies catering servic- 0.3 per cent. Prelios, which owns a fifth, and Italian
es across each of its seven racecourse private equity firm Investitori
venues, established its own catering Jaeger moves into Russia Associati, which owns 46 per cent, are
business in 2007. Jaeger has signed a deal with JamilCo, all in talks to sell their shares. The
one of Russia's leading luxury brand three companies acquired their respec-
Esprit profit drops distributors, to bring the British brand tive stakes in La Rinascente, an upmar-
Clothing retailer Esprit Holdings post- to Russia. The first two stores are set ket store seen as the Italian equivalent
ed a 21 per cent fall in first-half net to open in spring 2011 in Moscow, of Selfridges, in 2005. One Italian
profit and will switch its textile sourc- with more to follow in autumn 2011 in newspaper suggested that Prada,
ing to Bangladesh from southern Moscow and St. Petersburg. “We are LVMH and PPR could be in the running
China to cut costs. Esprit, like rivals delighted to be expanding into the to snap up shares. It is not known if a
such as the world’s No3 fashion retail- Russian market with Jaeger London, formal sales process has started.
The Capitalist
14 CITYA.M. 11 FEBRUARY 2011
EDITED BY
DONATA HUGGINS
GOT A STORY? EMAIL
thecapitalist@cityam.com

Left: Boris Johnson.


Right: guests at the
Square Mile Salute

Above: Carmen
Windsor, a guest.
Left: General Sir Mike
Jackson, former chief
of the general staff.
Right: Alexander
Michaels,
Toastmaster

A.M.’s managing director, took another

FORCES, FOOD AND FINANCE £8,000 for the worthy cause in return
for a second internship for the auc-
tion’s rival bidder.
Johnson showed some more love for
the City by regaling the audience with
YESTERDAY at the Square Mile Salute banquet, held at the Guildhall, was an together because his son was injured stories from classical antiquity:
fundraising banquet, Boris Johnson event offering the City an opportunity in Afghanistan: “He wasn’t too serious- “Boudica was this country’s first and
said: “There are three things I want to to support troops through Help for ly hurt. He was shot in the groin after most disastrous banker basher. It took
share my appreciation for tonight, one Heroes and meet Boris, General Sir ten days and can’t go back. It just more than a century for Britain’s econ-
– my appreciation for the armed Mike Jackson, former head of the brought home to me how important it omy to recover from it.”
forces, two – for Britain’s financial army, and, er, Jeremy Clarkson of Top is to support our boys.” Johnson’s aide shuffled him
services and three – food.” The audi- Gear fame. So what is the connection to the away before he could tell City A.M.
ence of the City’s finest chuckled The fundraiser was launched last City? Gayler laughs: “It’s where the whether he thought big bonuses – if
while a fleet of waiters sailed round year by Paul Gayler, the head chef at money is, of course. Plus City A.M. and donated to Help for Heroes – were a
them offering canapés made by the Lanesborough hotel, with the help others pitched in to make it happen.” good idea. He did say, however, that
London’s best chefs. of his friends and rivals at London’s Enthusiastic supporters bid a whop- the City’s “downstream effect was vital
The waiters’ military-style proficien- top restaurants, including Sheraton ping £8,000 for a two-week internship for growth.” An effect probably also Left to right: Alex Hogg, Finclass; Martin
cy, however, was not what the assem- Park Lane, the Hilton and Koffmann’s at City A.M in the auction. And in after true of the guests’ stomachs after the Powell, the Royal Automobile Club; and
bled guests had turned out for. The among others. Gayler says they came hours trading, Lawson Muncaster, City fifth course. Chloe Hogg, Google.

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CITYA.M. 11 FEBRUARY 2011 News 15

Rates risk for repossessions Inflation expectations


ber of people facing payment pres- tinued to fall in the final three
rise across the Eurozone

MORTGAGES
sures may increase if interest rates months of 2010, to 7,900, down 11 per
BY JULIAN HARRIS rise,” said director general Michael cent from the third quarter of the
REPOSSESSIONS fell by 24 per cent Coogan. year – the fifth quarter in a row to “Although the forecasts are still in


EUROZONE ECONOMY
last year, while the number of mort- The CML expects there to be 40,000 have recorded a drop. line with ECB’s definition of price sta-
gages in arrears also dropped, the repossessions this year, up from In a separate statement, the CML INFLATION expectations in the bility, the trend is alarming,” said
Council of Mortgage Lenders (CML) 36,300 in 2010. revealed a 22 per cent rise in the Eurozone have shot up, according to Dominique Barbet of BNP Paribas.
said yesterday. At the end of last year, the number value of buy-to-let mortgages last an official survey released yesterday. Worryingly, the rise is “not entirely
Yet stubbornly high inflation has of mortgages with arrears of 2.5 per year, which now account for 11.5 per The anticipated rate of consumer due to higher raw material prices,” she
heightened the risk of a hike in inter- cent or more of the outstanding bal- cent of all mortgages. price inflation for this year jumped added.
est rates, which would lead to an ance fell by 13 per cent. “Tenant demand seems set to from 1.5 per cent to 1.9 per cent, the The news came after a Reuters poll
upturn in repossessions, the CML Of all loans, just 1.49 per cent were remain high in the face of continuing European Central Bank (ECB) revealed. showed inflation expectations for the
said. in arrears. deposit constraints to entering the For 2012, expectations rose from 1.6 single currency area rising to 2.1 per
“As we go through 2011, the num- The number of repossessions con- owner-occupier market,” Coogan said. per cent to 1.8 per cent. cent for 2011, up from 1.9 per cent.

DO YOU AGREE WITH THE BANK’S RATES DECISION? City will drive
Winter freeze ANDREW CLAUDET | CHEESWORTHS
Interviews by Juliet Samuel

Britain out of
sees jump in “My gut feeling is they should have raised rates.
It’s a tough call really. But I am worried about
inflation because I think the rates they publish are
the recession


UK ECONOMY
not always indicative of costs, for example with

energy supply petrol prices. I’m a saver so my savings


aren’t going to be worth much.”

GAJ PILLAI | GUY CARPENTER


FINANCIAL services will be at the
heart of the economic recovery this
year, an academic research group
said today.
Along with Britain’s resurgent
manufacturing sector, “growth in
2011 will be driven by financial and
However, underlying growth in business services and by computing

UK ECONOMY
BY JULIAN HARRIS
manufacturing remains strong. In the “Personally for me, the decision was good. I’ve got services,” Cambridge Econometrics
fourth quarter of the year, manufac- found. Banking and finance will
INDUSTRIAL production jumped by turing was up 1.1 per cent compared an interest-only mortgage. It’s hard to borrow at stimulate growth in several key busi-
half a per cent in December, fuelled by to the previous three months. the moment and a lot of guys my age are trying ness services, it said.
a surge in energy supply as households The ONS recommends observing “We expect financial and business
cranked up the heating, official data this measure to remove inherent to get on the property ladder. I’m not too wor- services to account for larger shares
showed yesterday. volatility in the monthly figures. ried about inflation. Savings get hit but I’m of value-added and employment
Spikes in the supply of electricity On this three monthly comparison, than it did in 2007,” it said.
(up 12.3 per cent) and gas (up 10.3 per over industrial production – which
watching my spending.” And the private industry will more
cent) drove up the UK’s index of pro- includes mining and energy, as well as than make up for job losses in the
duction, recorded by the Office for factory activity – was up 0.7 per cent. JOHN HUTTON-ATTENBOROUGH | government sector, it said.
National Statistics (ONS). For 2010 as a whole, British industry ASHCOURT ROWAN “Between 2010 and 2015 we expect
Yet there was surprisingly bad news grew by two per cent, driven by manu- employment in the public sector to
from British factories, as manufactur- facturing’s expansion of 3.6 per cent. “It’s fine as a decision. I work on the basis that if fall by just over 400,000, and employ-
ing fell by 0.1 per cent compared to “The prospective weather-related ment in the private sector to
November. bounce-back, together with additional interest rates go up too quickly, it could trigger a increase by more than 700,000,” the
Some observers blamed the surprise
drop on December’s freezing condi-
strong business survey readings, sug-
gests there might be a sizable jump in
downturn. I would worry if inflation goes above report said.
However, the group warned that
tions, although the ONS reported only manufacturing output in January,” five per cent, but if it stays below then I’m the labour market faces a “bleak”
“a small amount of anecdotal evi- predicted Blerina Uruci of Barclays not too worried about it.” year, before recovering from 2012
dence” for the effect of snow. Capital. onwards.

NEWS | IN BRIEF
January rebound for UK
after winter snow slump
Tax guide takes 20 hours to read Industry up in France and Italy Moec of Deutsche Bank.
The UK’s tax system is so complex that Industrial output increased in both
guides for individual taxes are even France and Italy at the end of 2010, offi- Jobless claims plummet in US
longer than War and Peace, the cial data showed yesterday. The boosts Claims for unemployment benefit in the
Taxpayers’ Alliance (TPA) said today. All to industry in the Eurozone countries US fell to 383,000 in the week ending 5
tax guides except one (inheritance tax) contrasted with a decline in German out- February, it was revealed yesterday. The
have over 1,204 pages, the length of Leo put, after a severely snow-affected considerable drop (from 419,000 the (NIESR).

UK ECONOMY
Tolstoy’s epic novel. Tolley’s guide on cor- December. Italy’s output rose 0.3 per previous week) surprised observers and While the recession is over, the
poration tax guide is 1,897 pages long, cent compared to the previous month, was a two and a half year low – pointing THE economy bounced back in economy needs to improve its “flat”
the TPA said. The document is 185 per slightly above the expectations of econo- to a firming undertone in the labour mar- January, expanding by 0.6 per cent, a GDP to return to pre-recession levels,
cent longer than it was in 1999-2000 mists. French industrial production rose ket as the economic recovery gathers Westminster-based economic think it said.
and would take 20 hours to read aloud. 0.3 per cent in December, confounding momentum. Although the decline partial- tank said yesterday. The economy may not fully recov-
“This shows just how burdensome it has average expectations of a 0.4 per cent ly reflected the unwinding of a weather- However, the UK is still in a er until 2013, NIESR forecast.
become,” said TPA director Matthew fall. “Germany was hit by very adverse related spike in late January, analysts “depression”, with GDP 4.5 per cent January’s spike in output “is large-
Sinclair. “It is now so complex that fami- weather conditions at the end of the said it was consistent with other indica- below its pre-recession peak, accord- ly related to recovery from the
lies and businesses are often not aware fourth quarter while the shock was felt tors suggesting a strengthening jobs ing to the National Institute for impact of adverse weather at the end
how much tax they are actually paying.” much less in Italy and France,” said Gilles market. Economic and Social Research of last year,” NIESR said.
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CITYA.M. 11 FEBRUARY 2011 News 17

CITY MOVES | WHO’S SWITCHING JOBS Edited by Elizabeth Fournier in association with

expansion plans following its new part- sultants. Federica Ambrosini and job was at Finsbury PR where he has
Alvarez & Marsal nership with AION Global last year. Caroline Harper. Ambrosini joins from been for the last three years
The global independent professional services Claudia joins from DTZ where she pre- Cluttons, where she worked as a senior advising a broad section of FT250
firm, today announced the appointment of viously held the position of senior sur- consultant advising on residential and clients.
Stuart Ells, a seasoned media and entertain- veyor in the West End of London mixed-use schemes and on Greenfield
ment expert, to its European performance investment team. At Grafton Advisors, site development strategies. Harper CPA Global
improvement business. His arrival marks the she will work closely with Nigel previously worked in the CB Richard CPA Global, the world’s leading
formation of a specialist media & entertain- Kempner and Paul Connellan in under- Ellis General Planning Team. The con- provider of legal services outsourcing
ment team focused on supporting both cor- taking existing asset management ini- sultant has also appointed Katie (LSO) and intellectual property (IP)
porates and portfolio companies of private tiatives and sourcing new business Patterson as a senior surveyor in its management services, today
equity firms in this sector, which Stuart will opportunities primarily in Central retail agency team in London. announced the appointment of David
lead. London. Harrel as chairman. Harrel, former sen-
Corporate Broking ior partner at City law firm SJ Berwin,
Jones Lang LaSalle Charlie Leigh-Pemberton will be joining succeeds Geoffrey Grime who will
Grafton Advisers appointed Claudia Kemp as senior The commercial property consultants Corporate Broking on 14 March remain on the board as a non-executive
The strategic property advisers has investment executive, as part of its has hired two new senior planning con- as an associate. Charlie’s most recent director.

To appear in CITYMOVES please email your career


updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
morganmckinley.com

NEWS | IN BRIEF
The global man for the job Sareum raises funds for Xcap
Cancer drug discovery company Sareum
leukaemia drug programme, and for working
capital.
Holdings has conditionally raised £500,000
Boeing submits refuelling tender

PROFILE France, the UK and Saudi Arabia Swiss orthopaedics before expenses via a placing at 1p a share,
BY ELIZABETH FOURNIER during his career. group it had representing a 40 per cent discount to the Boeing said yesterday it submitted its final
Before joining Abbott he spent acquired in closing market price of 1.65p on Tuesday. proposal to capture US refuelling aircraft
AFTER leaving his post at the ten years at GlaxoSmithKline, and 2006. The company said the shares were issued to orders valued at up to $50bn (£31bn).
helm of French pharmaceuticals was president of SmithKline meet investor demand from clients of Xcap Boeing and European rival EADS, the parent
and cosmetics company Pierre- Beecham at the time of its merger Securities. Sareum will use the proceeds to of Airbus, had been asked to submit their
Fabre a few weeks ago, Olivier with Glaxo Wellcome in 2000. accelerate its Aurora+FLT3 Kinase final proposal revisions by 11 February.
Bohuon will step into David His appointment is likely to
Illingworth’s shoes at Smith & reignite takeover speculation, and
Nephew on 1 April. analysts have pointed out that his
Bohuon had been at Pierre- heavily pharmaceuticals-focused
Fabre just five months when he background could drive a change
stepped down, having succeeded in direction for Smith & Nephew.
Jean-Pierre Garnier in September Illingworth’s legacy at Smith &
last year. He previously worked Nephew will be the three-year
with Garnier at Abbott, where earnings improvement drive he
Bohuon headed up the pharma- led at the UK firm, turning it
ceutical products unit. round from a $80m revenue
Bohuon brings an international warning it issued in 2007 follow-
twist to the top of Smith & ing the discovery of “unaccept-
Nephew, having spent time in able sales practices” at Plus, the OLIVIER BOHUON

Change at the top


for optimistic S&N
PHARMACEUTICALS The companies shares reacted Illingworth said that his depar-

BY ELIZABETH FOURNIER well to the positive figures yester- ture was in no way linked to the
day, closing 2.1 per cent up on the speculation, and that he had no
PERENNIAL takeover target Smith previous day at 727p. immediate plans to take on a role
& Nephew posted strong fourth- Smith & Nephew has been the elsewhere.
quarter profits yesterday, as chief subject of various takeover
executive David Illingworth rumours since the end of last year, ANALYSIS l Smith & Nephew
announced he would be stepping with its share price reflecting the p
down on 1 April, to be replaced by interest with a rise of more than 700 727.00
Olivier Bohuon. 20 per cent since December. 10 Feb
Pre-tax profits for 2010 were up Industry names Biomet, 660
33 per cent at the medical devices Johnson & Johnson, Zimmer and
manufacturer, rising to $890m Stryker have all been touted as
(£552m) from $670m the year potential buyers, though Smith & 620
before. Nephew said last month that it
Sales were up at $4bn compared was not engaged in any talks that 580
to $3.8bn in 2009, and earnings might lead to a takeover or merg-
per share rose from $0.53 to $0.69. er. 15 Nov 3 Dec 23 Dec 17 Jan 4 Feb

Shire expects sales growth in 2011


PHARMACEUTICALS said sales would again rise by about improvement on people’s expecta-
16 per cent in 2011, against its target tions.”
PHARMA firm Shire said it would to grow revenue in the mid-teens, Shire posted a seven per cent
sustain the strong sales growth of after it posted fourth-quarter profit drop in fourth-quarter non-Gaap
2010, when its rare disease business matching in-house forecasts. earnings per American depository
reaped a windfall from problems at “We are increasingly confident share to $1.03, in line with analysts’
US rival Genzyme. about achieving our aspirational forecasts. Total revenue for the final
Shire, which also makes hyperac- growth targets,” chief executive three months of the year rose four
tivity and gastrointestinal drugs, Angus Russell said. “It’s a marginal per cent to $931m (£578m).
18 News CITYA.M. 11 FEBRUARY 2011

PetroChina invests RENAULT CONFIRMS PLANS FOR GROWTH


FRENCH carmaker

£3.4bn in Encana
Renault said yester-
day it would target
an operating mar-
gin above five per
cent of sales in
2013 as part of a
long-awaited six-
economy, now the world’s second- year strategic plan

ENERGY
largest. In January, CNOOC struck a for growth.
PETROCHINA is buying half of a prolif- $570m shale deal with US natural gas Renault said 2010
ic shale gas project from Canada’s company Chesapeake Energy, its sec- net profit reached
Encana for C$5.4bn (£3.4bn), marking ond such deal with the American com- €3.42bn (£2.9bn),
the largest Chinese investment yet in a pany in about four months. compared with a
foreign natural gas asset. Shares of PetroChina, Asia’s largest net loss of €3.13bn
Chinese companies such as oil and gas producer, fell more than in 2009.
PetroChina and CNOOC have been two per cent yesterday in Hong Kong
scouring globally for unconventional trade, lagging the Hang Seng’s 0.7 per
gas assets to reduce reliance on coal cent fall, as analysts said the deal, to be Picture: GETTY
and satisfy its energy hunger to fuel its paid all in cash, was pricey.

Danske Bank
plans £2.3bn
rights offer
hand back capital to shareholders.

BANKING
BY HARRY BANKS The expiry last year of a govern-
ment aid package to banks, ending a
DANISH lender Danske Bank said it restriction on dividends, has
would raise 20bn crowns ($3.7 bn) in increased pressure on Danske Bank
new capital as it posted fourth-quar- to resume payouts.
ter profits below market consensus, Meanwhile, DnB NOR, the biggest
as loan impairments remained high. Norwegian bank, reported fourth-
The bank reported a 12 per cent quarter profits surpassing all fore-
rise in fourth-quarter pre-tax profits casts and said it saw low loan losses
to 1.45bn crowns, aided by a 40 per this year.
cent drop in loan losses, but missing The contrasting results released
market consensus for 2.85bn. yesterday, and earlier strong profits
Denmark’s biggest financial insti- from major Swedish banks, reflect
tution said it recommended no divi- the different pace of economic recov-
dend be paid for 2010 and that it had ery, with Denmark clearly lagging its
requested permission from the gov- Nordic neighbours. On Tuesday
ernment to repay early a hybrid loan Swedish lender Swedbank reported
it received from state coffers during it had swung back into the black.
the financial crisis.
These measures, combined with ANALYSIS l Danske
the capital increase, would strength- €
en group capital, Danske said in the
125.10
132 10 Feb
statement.
It said fourth-quarter loan impair-
ment charges fell 40 per cent to
128
2.98bn crowns, still above the 2.22bn
expected by analysts.
As Nordic banks start to emerge
124
from the worst of the financial cri-
sis, supported by robust economies
in the region, pressure is building to 15 Nov 3 Dec 23 Dec 17 Jan 4 Feb

NEWS | IN BRIEF
Snam Rete Gas beats forecasts end-March, but would remain in the
Italian gas grid operator Snam Rete Gas black.
beat forecasts on its 2010 dividend and
operating profit yesterday, sending its Mondi expects earnings to rise
shares to a near four-year high. Paper and packaging firm Mondi said
Continental Europe’s biggest regulated underlying operating profit for the year
gas operator raised its dividend 15 per ended 31 December 2010 is expected to
cent to €0.23 per share after posting a be considerably higher than the same
17 per cent rise in operating profit to time a year earlier. The group, listed in
€1.86bn euros (£1.6bn), helped by gas London and Johannesburg, said it
assets bought from parent Eni. expects basic underlying earnings per
share for the year to be in the range of
Profit warning hits Air France 44-49 cents compared to 18.7 cents a
Shares in Air France fell to their lowest year before. Mondi also said restructur-
level since October, dragging the sector ing costs will be greatly reduced. Special
more than one per cent lower. At mid- item charges before tax and non-con-
session it was down 7.1 per cent at trolling interests in aggregate of €133m
€12.65 with more than three per cent of (£112m), mainly relating to impairments
its capital having traded. Air France- of assets and restructuring and closure
KLM has said it would miss its target for costs in 2009 will mean the equivalent
operating profit of €300m in the year to special item charge of €22m this year.
CITYA.M. 11 FEBRUARY 2011 News 19

BEST OF THE BROKERS To appear in Best of the Brokers email your research to notes@cityam.com

ANALYSIS l ARM Holdings ANALYSIS l Barclays 318.85 ANALYSIS l International Consolidated Airlines Group
650 595.00 320 10 Feb 310
p
10 Feb p p 251.00
10 Feb
550 300 290

450 280 270

350 260 250

24 Nov 14 Dec 6 Jan 26 Jan 30 Nov 20 Dec 7 Jan 27 Jan 24 Nov 14 Dec 6 Jan 26 Jan

ARM HOLDINGS BARCLAYS INTERNATIONAL AIRLINES GROUP


RBS rates the technology company “buy” with a target price of 625p. Morgan Stanley rates the UK bank “overweight” but has cut its target Investec has begun covering the newly-merged airline with a “hold” rating
Hewlett Packard’s introduction of the Palm operating system on its PCs price from 400p to 380p. The broker believes better visibility on returns and a target price of 281p. The broker believes that the recent hike in jet
later this year could help ARM penetrate the notebook PC market, moving in several aspects of the business, including Barclays Corporate and fuel prices has more than offset any synergy gains from the British
its market share from one per cent in 2011 to 20 per cent by 2015. RBS impairment charges, could fuel better returns on equity. Morgan Stanley Airways / Iberia tie-in and predicts that the firm will underperform in the
estimates that ARM’S earnings per share would be boosted by 2.25p for looks to Barclays’ full-year results on 15 February for an update on this short-term. Investec forecasts earnings per share of 15 cents (12.7p) in
every 10 per cent unit share gain. strategy. 2011, nine cents below consensus forecasts.

FTSE falls due to poor results S&P climbs after


as banks and miners weigh Mubarak delegates
“There’s a bit of nervousness as media reported that Egypt’s embat-

THELONDON around now, but there are always


going to be a couple of disappoint-
ments, but overall earnings have gone
tled president of 30 years might step
down, helping to push crude higher.
BP edged up 0.1 per cent.
THENEW YORK uneasiness among global investors on
fears that political instability could
spread through the region and impact

REPORT reasonably well, and there’s no reason


for the market to be depressed for a
long period of time,” said Peter Dixon,
On the upside, Smith & Nephew,
Europe’s largest artificial knees and
hips maker, rose 2.1 per cent after it
REPORT commodities. Mubarak’s move, howev-
er, failed to meet the demands of
enraged protesters that he step down
economist at Commerzbank. posted a 9 per cent rise in fourth-quar- immediately.

D T
isappointing corporate results There was little reaction to the ter trading profit. he S&P and Nasdaq eked out- Volume on Wall Street was stronger
crimped confidence on the out- expected decision by the Bank of Advertising group WPP climbed 1.5 gains in the final minutes of trad- than in recent days, which had seen
look for risk-sensitive banks and England to leave interest rates per cent to a nearly nine-year high, ing yesterday as Egyptian some of the thinnest trade of the year.
miners, pushing Britain’s top unchanged following its latest mone- with traders citing a positive read- President Hosni Mubarak said he But with a total of about 8.15bn shares
share index lower by yesterday’s close. tary policy committee meeting. across from the results of French rival would delegate powers to the vice pres- traded on the New York Stock
Diageo shed 4.6 per cent as half-year Banks were the worst blue-chip per- Publicis. And software maker ident. Exchange, the American Stock
results from the world’s biggest spirits formers, with HSBC down 1.1 percent, Autonomy rose 2.2 per cent as UBS Weakness in Cisco Systems brought Exchange and Nasdaq, volume was
group missed forecasts, prompting hit by a profits disappointment from upgraded the stock to “buy”. the Dow’s eight-day rally to an end still below last year’s daily average of
broker Espirito Santo to downgrade its Swiss peer Credit Suisse. On the economic data front, British after the network equipment maker 8.47bn.
rating to “hold”. Renewed sovereign debt concerns manufacturing output unexpectedly gave a weak outlook. “Egypt stopped us from dropping
International Consolidated Airline also weighed on the lenders as fell in December, but a surge in ener- The S&P and Nasdaq wavered in lower, but the low volume means that
Group was also sharply lower, off 3.3 Portugal’s government bond spreads gy production meant overall industri- volatile late-day action as Mubarak people are skeptical of the climb we’ve
per cent as peer Air France-KLM slid widened. al output rose as expected. began a speech in response to the had,” said Michael Nasto, senior trader
after warning it would miss a key Insurers retreated, too, with weeks of civilian protests. Earlier in at US Global Investors in San Antonio,
profit target after being hit by a triple Prudential down 1.9 per cent, revers- ANALYSIS l FTSE the day, as media reports spread that Texas.
whammy of snow, strikes and security ing gains made on Wednesday after a 6,100 p
6,020.01 Mubarak might resign, equities Cisco shares tumbled 14 per cent to
problems. broker upgrade. 10 Feb rebounded off early lows sparked by $18.92 on heavy volume a day after the
The FTSE 100 ended down 32.28 Miners extended Wednesday’s the disappointment over Cisco. outlook, but shares in its chief com-
points, or 0.5 per cent, at 6020.01, declines, reflecting weaker metals 5,900 The Van Eck Market Vectors petitors surged.
extending Wednesday’s retreat after prices after China raised interest rates exchange-traded fund ended up 0.45 The Dow Jones industrial average
hitting its best closing level since May earlier in the week. per cent, cutting gains late when it was down 10.60 points, or 0.09 per
5,700
2008 on Tuesday. Rio Tinto shed 2.4 per cent despite appeared that Mubarak was not step- cent, at 12,229.29. The Standard &
The index is still up 2 per cent in announcing a doubling in its divi- ping down. Previously, the fund had Poor’s 500 Index was up 0.99 points, or
2011 after a 9 per cent rise last year, dend payout and promising to return 5,500 risen as much as 5.8 per cent. 0.07 per cent, at 1,321.87. The Nasdaq
and many analysts remain fairly $5bn to shareholders by 2012. More than two weeks of civilian Composite Index was up 1.38 points, or
upbeat about prospects for equities. Energy stocks recovered from lows 15 Nov 3 Nov 23 Dec 17 Jan 4 Feb unrest in Egypt have created some 0.05 per cent, at 2,790.45.
20 CITYA.M. 11 FEBRUARY 2011

Wealth Management | Listed Products


The Malthusian bull
market carries on
Long-run commodity investors are betting on the end of
economic history as we know it, writes Daniel Knowles

Famine, pestilence and death – history’s most dismal scientist Picture: GETTY

I
N 1980, two academics, Julian But according to the Barclays ana-
Simon and Paul Ehrlich, agreed a lysts, he was not completely wrong.
now famous wager. Ehrlich chose Instead, they argue, we are currently
five commodity metals and bet entering a tightening period for com-
that over the next 10 years, they would modities. While there is still supply
get more expensive. Ultimately, Simon growth, the sheer pace of demand
won, and all five metals – copper, growth in China and India is likely to
chromium, nickel, tin and tungsten – outpace it, pushing up prices for much
got progressively less expensive all the of the foreseeable future. As they put it,
way up to 2002. “The very fast rate of growth in some
For much of the last nine years how- large emerging markets would then
ever, that trend has gone in reverse, in a support the Malthusian prediction
pattern known as the commodity across a broad spectrum of commodi-
super-cycle. A barrel of oil, which went ties.” Investors would seem wise then to
for $20 in 2002, now costs $100. Copper buy up commodities.
recently passed through the $10,000 a But nothing is assured. As Dylan
tonne level. Even food prices are rocket- Grice of Societe Generale points out,
ing, creating uncomfortable conditions the expected long run real return of
for third world dictatorships. commodities is nothing – and all com-
What has hurt dictators (and their modity bull runs eventually come to an
subjects) has, however, benefitted some end. As Grice puts it: “When you buy
canny speculators. Over recent years, commodities, you’re selling human
exchange traded commodities (ETC) ingenuity.” He says that while informed
have offered an easy way to place a speculators might be able to make
long-run bet on rising commodity money from fluctuations, even over
prices. But should investors want to? several years, over a long enough peri-
Commodity prices may seem to be od, even the most conservative invest-
going up relentlessly, pushed up by ments will still outperform
unquenchable Chinese and Indian commodities – as the chart below
demand, but as Simon’s and Ehrlich’s demonstrates.
bet showed, they are not guaranteed to According to Grice: “Prior commodi-
climb – the price of stuff quite often ty bull markets have been much like
falls. England football managers: they prom-
As analysts from Barclays Capital ised much, burned brightly for a while,
observe, the question is essentially a but ultimately crashed, breaking the
Malthusian one. Thomas Malthus, writ- hearts of those who believed in them
ing at the end of the 18th century, most.” He recommends that commodi-
argued that the demands of humani- ty bulls buy shares in the companies
ty’s endlessly growing population that produce them, rather than the
would eventually outstrip the available products themselves, since then they
natural resources. The population will also benefit from improvements in
would then inevitably be checked by technology and labour productivity, as
“Malthusian crises”, where the natural well as from rising demand.
resources available run out. Because what long-run ETC investors
Quite clearly, based on history, are ultimately betting on is the long
Malthus was wrong. Despite growing trend of history reversing now. That is
from less than 1bn in 1800 to nearly not an uncommon view these days, but
7bn now, the human population is bet- as Ehrlich discovered in the 1980s, it
ter fed, housed and clothed than ever. can be a dangerous bet to make.
This month, the London Stock Exchange is celebrating
the first anniversary of the launch of its Order book for ANALYSIS l Real commodity prices have gone nowhere
Retail Bonds (ORB). On ORB, private investors can invest 1,000,000
and trade in bonds as simply as they trade shares. The bonds T-Bill total real return
are tradable in low denominations, typically £1,000, and have 10 y bonds total real return
100,000 AAA corp bonds total real return
continuous buy and sell prices displayed throughout the trading
day. The market hosts a range of corporate, government and S&P500 total real return
supranational debt. 10,000 Economist All-Commodity Index

For further information on ORB,


1,000
go to www.londonstockexchange.com/bondsmadeeasy
or email us at bonds@londonstockexchange.com
100

10
Source: SG Cross Asset Research, GFD
1871 1882 1893 1905 1916 1922 1939 1950 1961 1973 1984 1995 2007
CITYA.M. 11 FEBRUARY 2011 Wealth Management 21

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Living
22 CITYA.M. 11 FEBRUARY 2011

| Luxury Property

Live at the most


famous 18th hole
Opulent flats are for sale overlooking the Old
Course at St Andrews, writes Timothy Barber

T
HE most famous building in golf is,
without question, the Royal &
Ancient Clubhouse at St Andrews.
But the most recognisable? Arguably
it’s the tall, turreted eruption of high
Victoriana that overshadows it, the
Hamilton Grand. So the story goes, it was The 18th hole at
originally built by a chap named Thomas St Andrews over-
Hamilton in 1895, after he was turned looked by the
down for membership of the Royal & Hamilton Grand
Ancient – he decided on a course of archi- in the centre.
tectural one-upmanship. The gothic, red-
brick result – originally built as a grand
hotel – now towers over the 18th green of
the Old Course, the backdrop to the closing PROPERTIES AT OTHER FAMOUS GOLF COURSES:
moments of many golf’s greatest contests.
Anyone inside, therefore, arguably has
the greatest view in golf, if not world sport.
Up until a few years ago that meant stu-
dents at St Andrews University. But now the
building is being converted into luxury ments are expected to be ready next sum-
apartments, with 26 in total up for grabs. mer.
For golf fans, there’s never been an oppor- Starting prices for two bedrooms are
tunity like it. £1.35m, while larger apartments, including
In the early 20th century it was the sixth floor penthouse and a fifth floor
Scotland’s equivalent of the Ritz – an opu- property which includes a living room in
lent, glamorous hotel which attracted the the famous “pepper pot” turret, will
likes of Douglas Fairbanks, Mary Astor and require offers of over £5.1m and £5.5m
Bob Hope, was patronised by royalty and respectively. They can be bought without
had the quirky claim to fame of being furnishings, or designed down to the last
Scotland’s first hotel with running hot and bit of linen by Kohler Co. There’s the option
cold water in every room. to of renting them out through the hotel
During World War Two it housed RAF when owners are not in residence, splitting
officers, before being acquired by the uni- the takings.
versity and converted into a hall of resi- You’ll want to be in residence though. As
dence. In 2005 an American businessman well as the stupendous views over the six
bought it with plans to develop it, only for links courses and out to sea, there will be a
the recession to come crashing down, and restaurant and bar (open to the public), pri-
it has lain dormant for five years. vate members’ room with log fire and a
Billionaire US businessman and golf fan roof garden. Butler service is laid on by the WENTWORTH SUNNINGDALE
Herbert Kohler, whose Wisconsin-based Old Course hotel, as is valet parking, use of Price: £6.75m Price: 4.65m
company Kohler Co also happens to own its magnificent spa and of the Duke’s golf A six bedroom family home, built two years ago, on A restored house with beautiful Dutch gables, this
and operate the Old Course Hotel at St course. For golf nuts, the phrase “once in a Wentworth Estate. overlooks the ladies’ course at Sunningdale.
Andrews, bought it in 2009. Following con- lifetime” in this case rings absolutely true. Contact: Knight Frank on 01344 840 020 Contact: Barton Wyatt on 01344 843000
sultations, Kohler Co is now in the process Reservations are being taken now. Call Savills on www.knightfrank.com www.bartonwyatt.com
of transforming the building. The apart- 0207 016 3740. www.savills.co.uk

Hhme is where the heart is...


rom
Looking for a place of your own in 2011? Prices
£722
sta r t f * *
pcm

Let L&Q find your heart a part buy, part rent home in North, South, East or West London.
Register with L&Q today and you could win an iPhone 4*.

Register at www.lqgroup.org.uk/heart alternatively text HEART to 60123

To get your heart into a new home call

0844 406 9800


DISCLAIMER: Industrial and Provident Society 30441R exempt charity. Details correct
at time of going to print 01/11. Your home is at risk if you fail to keep up repayments on
a mortgage, rent or other loan secured on it. Please make sure you can afford the
repayments before you take out a mortgage.* Register today to be entered into
the prize draw for an iPhone 4. **The figure quoted is a percentage share and is a
guideline and may vary according to individual incomes and circumstances. TERMS &
CONDITIONS apply: please see www.lqgroup.org.uk/heart for details. Imagery depicts
Follow Us. Like Us. Watch Us. a typical L&Q show home.
24 Living | London CITYA.M. 11 FEBRUARY 2011

Chelsea’s superluxe
new development
For the first time in a decade, a high calibre new-build
scheme will be completed in Chelsea, raising the bar for
jetsetters and home-makers alike, says Zoe Strimpel

L
IKE bees to a hive, wealth comes to London that the service charge is 50 per cent below equiva-
property. Certain prime areas of the capital are lent schemes in London at £7 per square foot per
magnets for international superstars in year – you’re paying for security and maintenance of
finance and business – Belgravia, the common areas but not for collective air condi-
Knightsbridge and Mayfair. But if you’re truly dis- tioning and heat and water. So when you lock up
cerning, do you aim to be Harrods’ neighbour? and leave (you can, of course, control the systems in
Perhaps not, according to the people behind your property from wherever you are in the world),
Henry Moore Court, a super-luxe development in you aren’t wasting your money keeping other
Chelsea, off the Fulham Road in the former Chelsea flats temperate.
School of Art building – and the first of its kind in Asia, naturally, is a big target market and the
the last ten years. “This part of Chelsea is known for scheme will be marketed heavily in Singapore
more discerning Londoner or European – it’s for from next month. Indeed, research produced by HENRY MOORE COURT, MAN-
people who want a discreet London base,” says leading UK agents suggests that 60 per cent of RESA ROAD
Charles Symons Jones, the development’s sales man- prime central London property purchases are Price: £5-£14m.
ager. “It’s an antidote to flashy Knightsbridge, with a completed by people living in Hong Kong and Flats have two-four bedroom to hous-
much more village atmosphere. There are good qual- Singapore (many are expats). es of six bedrooms. Decor includes
ity schools locally, too.” But Symons Jones is keen to stress that this double height luxury reception area,
Pure new-builds are a rarity in Chelsea. Henry development is not simply being branded as a finished with Spanish origin polished
Moore Court provides a kind of shiny big space that cash depot for wealthy Asians. “We’ve always had Azul Naif marble, European oak hard-
older properties simply can not and this is a good bit local interest and support,” he says, “from the wood floors, bespoke solid timber
of its appeal. Certainly the flats aren’t cheap, rang- planning process right through to building. The reception desk and French origin Noir
ing from £5m to £14. important thing is that this development is not Saint Laurent worktop, and feature
But they are spacious and well-designed. It’s what necessarily for Chinese buyers, but for expat slot fireplace. Bedrooms come with
is known as a low-density scheme – just 15 apart- Brits and Europeans. We do expect a lot of for- Spanish origin Crema Marfil Natural
ments and two houses, with a secure underground eign investment as the pound is weak.” Launching Stone slabs and floors made of Italian
carpark and gym. Spring 2011, completing Autumn 2012. Prices £5-14m. Porcelain tiles. Contact: Aylesford on
Of particular pride to the developer is the fact www.henrymoorecourt.com. 351 2383, www.aylesford.com
NG
M LD
NI
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an iconic city
FE %
ST 5

an iconic address
LA 7

The Barbican

Stunning studio and one bedroom


duplex apartments available
for immediate occupation

Prices from £350,000

a development by

New Homes

020 7606 8000 020 7288 0330

www.frobishercrescent.com
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26 Living | Focus On CITYA.M. 11 FEBRUARY 2011

ROCHESTER BY AMY HIGGINS FINDHORN, HIGHAM


Price: £600,000
This majestic wedding cake of a
property is currently split into
three residences, but has the
potential to be transformed into
an impressive eight bedroom
family home. An elevated con-
servatory runs the length of the
rear of the house, looking out
onto one and a half acres of gar-
den. Gads Hill School, a well-
regarded independent day
school, is directly opposite.
Contact: Geering & Colyer on
01227 477009 or go to
www.geeringandcolyer.co.uk.

NEED TO KNOW | AREA INSIGHT


Commuting: Trains from Bars and restaurants: Rochester’s
Rochester railway station will quaint Victorian high street is stud-
whisk you to Victoria in 45 minutes ded with a diverse selection of gas-
WHORNES PLACE, CUXTON and St. Pancras in 39 minutes. tronomic delights, from cream teas
Price: £850,000 at Mrs. Bumble’s Tea Rooms to
A magical home with a unique Education: There is an unusually divine French cuisine at the Atrium
blend of old and new qualities. This high number of good grammar Restaurant, voted one of Britain’s
property is grade II listed and schools in the area, including the top ten hidden gems by foodie web-
steeped in history. It even has a HIGH STREET Rochester Grammar School for girls site Toptable. Atmospheric bar the
coat of arms inscribed above the Price: £110,000
front door. However, it has been ren- and Sir Joseph Williamson’s George Vaults is the place to go for
A top floor, two bedroom flat in the Mathematical School for boys. The cocktails and dancing.
vovated to the highest standards of centre of Rochester, perfect for the
modern luxury. The walled garden first-time buyer who wants to be in the private sector is equally well
is more reminiscent of a Provencal thick of things. Along with generously catered for, with Rochester Leisure: Choc-a-bloc with muse-
gîte than a Tudor estate, with its proportioned accomodation and a sur- Independent College and King’s ums and heritage sites, namely the
garden lodge, terrace shaded by a prisingly swish kitchen, there is envi- School, which is nestled in the Cathedral and Castle. Bookworms
cedar canopy and deck area inset able access to an abundance of pubs, Rochester Cathedral’s precincts. will be charmed by the nearby
with a large sunken spa bath. restaurants and shops, plus fabulous Dickens World, an indoor theme
Contact: Geering & Colyer on views over the town. Contact: Mann Crime: Rates are in line with park celebrating Rochester’s most
01227 477009 or go to Countrywide on 01634 812697 or go national averages. famous literary export.
www.geeringandcolyer.co.uk. to www.manncountrywide.co.uk.

& 62
2 2
0 1
,1
*

Computer generated images


for illustrative purposes only

Keston W aaterside, is a development of eight exclusive thr


Waterside, ee-
three- AApartments
partments rrange
ange ffrom
rom aapprox.
pprox. 2,2,100
100 ––2,900
2,900 sq ft
bedroom apartments and duplexes including two penthouses with
bedroom PPrices
rices sstarting
tarting ffrom
rom £940
£940,000
,000
roof gardens
roof gar dens in a brbreathtaking
eathtaking lakeside setting. Just 20 minutes
by rail from
from Central London… yet a world away away.. Savills: 0
01689
1689 860 999
Alan de Maid: 0 01689
1689 8813
13 333
Another development by In joint ventur
venturee with Viewings
Viewings strictly by appointment

www.kestonwaterside.com
www.kestonwaterside.com
Keston W
Waterside
aaterside Apartments,
Apartm Keston, BR2 6EA
Superb new homes
with incentives to match
at Liberty Park!
Crest Nicholson at Liberty Park are now
Liberty Park is an exciting development of traditional homes ideally located in the offering a number of tailored incentives
village of Wainscott. Enjoy being within easy reach of local amenities, stunning to suit your circumstances. Choose from:*
countryside and motorway connections, whilst being close to Rochester.
Part Exchange – Enjoy a cash buyer for your
Move to Liberty Park and benefit from: existing property, as well as a hassle free
move with no chain and no delays!
Q Easy access to the M2 for the M25, via the A289
Q Excellent connections via the High Speed 1 service from nearby Strood station. OR
Arrive in London in just 35 minutes
5% deposit PAID!
Q Close to local shops and schools, as well as the picturesque North Downs countryside

The Farleigh The Kelvendon The Faversham


2 bedroom coachouse from £149,500 3 bedroom house from £209,500 4 bedroom, 3 storey house from
Q Fully fitted kitchen/living/dining area Q Fully fitted kitchen and dining area £357,500
Q Master bedroom with fitted wardrobe Q Spacious living area with French doors Q Fully fitted kitchen with integrated
and en suite to the garden Bosch appliances
Q Allocated parking Q Master bedroom with fitted wardrobe Q Spacious living area with French doors
Q 5% Deposit Paid* and en suite to the garden
Q Two further good sized bedrooms Q Master bedroom with dressing area and en suite
Q Two parking spaces Q Three further good sized bedrooms
Q 5% Deposit Paid* Q Flooring and light fittings throughout
Q Part Exchange available*

Want to know more? Call 0870 752 4382 today!


Liberty Park
Marketing Suite & Show Home open daily 10am to 5pm
Hoo Road | Wainscott | off the A289 | ME3 8AA
Email: libertypark@crestnicholson.com
Selling Agents: RPC Land & New Homes 01634 835 900

www.crestnicholson.com/libertypark 0870 752 4382


*5% deposit paid is available on The Farleigh and The Kelvendon only. Part Exchange is available on The Faversham only. Subject to Crest Nicholson’s terms and conditions. Prices correct at time of going to press. Travel times are approximate.
Photography taken at Liberty Park.
28 Living | Focus On CITYA.M. 11 FEBRUARY 2011

CURRENT MORTGAGE DEALS BY AMY HIGGINS BUYING


Lender Fixed/Flexible Rate
(per cent)
Until Standard Rate
(per cent)
APR
(per cent)
Source: MoneySupermarket.com

Maximum Loan
to Value (per cent)
Q&A
First Direct Flexible 1.99 2 years 3.69 3.5 65
Santander Flexible 2.19 2 years 4.24 4 60
HSBC Flexible 2.29 Term 3.94 2.3 60
Camilla Dell
MANAGING PARTNER AT LONDON PROPERTY CONSULTANCY, BLACK BRICK
Yorkshire BS Flexible 2.29 Feb 2013 4.99 4.7 60

Q.
NatWest Flexible 2.39 April 2013 4 3.9 60 I am thinking of buying a buy-to-let found anything suitable. However, since I
property in central London. What live in London, I am reluctant to spend
Santander Fixed 2.65 April 2013 4.24 4.2 60 type of property makes the best money on a buying agent. What the bene-
Mansfield BS Fixed 3.09 2 years 5.59 5.3 75 rental and which tenant market should I fits are of working with a buying agent?
Loughborough BS Fixed 3.55 2 years 4.99 5 80 be going after?

A.
This is becoming a more and more
Leek United BS Fixed 3.75 March 2014 5.19 5.1 75

A.
We tend to advise our investment common scenario for us at Black
Skipton BS Fixed 3.78 April 2014 4.95 4.9 60 clients to opt for a two double bed- Brick due to incredibly low stock lev-
room, two bathroom configuration els, especially in central London. The difficulty
for a rental investment. This set-up will in this kind of market is that there are many
PROPERTY NEWS BY AMY HIGGINS appeal to a wide tenant market: professional
sharers, but also single professionals who
buyers competing for very little good quality
stock. To be in with a chance, you need to
want the luxury of a second bedroom. Three have the time to build relationships with
bedrooms are to be avoided because whilst estate agents to ensure you are the first per-
you will inevitably end up paying more for the son they call when they take on a new prop-
property, three beds are often too small for erty. Most buyers don’t have the time to do
families and too big for sharers/singles. Other this, and this is where a good buying agent
things to consider are proximity to transport can make all the difference. Because estate
links and shops. Buildings with porters will agents know us, and know that we represent
also attract a premium, and will help you get clients who are committed to buying, we are
a corporate tenant. This is the best type of often the first to hear about properties before
tenant, as corporate lets tend to be secure they come onto the open market. This means
HEATHROW GETS PROPERTY BOOST THUMBS UP FOR POWER STATION RENTS TO GROW BY 3 PER CENT and lengthy, with the company often footing we can alert our clients to suitable properties
The regeneration of West London’s Eric Pickles, the Minister for Communities Residential rents in Central London are the rent bill. The corporate tenant market is before anyone else, and enable them to buy a
very strong in central London at the moment, property without it ever appearing on the
“Heathrow Quarter” has been given a and Local Government, has given the final set to grow by 3 per cent this year, but in order to secure such a tenant, you must open market. Through our extensive connec-
further boost by the launch of The seal of approval to the £4bn redevelop- slightly ahead of the predicted increase ensure that the property is professionally tions, we also have access to properties that
Hurley Apartments at St George’s inno- ment of Battersea Power Station. in average income, according to property managed during the tenancy, as many com- are entirely off market. A good buying agent
vative Parkwest development. The antic- Developer Treasury Holdings says that it consultants, Cluttons. Head of Residential panies will insist upon this. should also be able to negotiate you a great
ipated arrival of Crossrail is giving this is “delighted” and will start the planned Consultancy Andrew Stanford put the deal, because we know the market and prices,

Q.
up-and-coming area an added edge, and building of offices, shops and apartments strength of the market down to foreign I have been looking to buy a two so we can negotiate aggressively and ensure
investors in The Hurley’s apartments can on the site in 2012. However, the project’s investors, particularly those from China, bedroom property in South our clients end up getting not only the right
look forward to a rental yield of 7 per finance is on shaky ground: Treasury where rising interest rates are encourag- Kensington for around £800,000 property, but acquiring it at the best possible
cent. Prices start at £179,950. For more Holdings is still in need of an investor to ing investors to put their money in for the last six months, and I have not price.
information go to www.park-west.co.uk. buy a 50 per cent stake in the scheme. English bricks and mortar.

www.apdinteriors.com

No need to move, improve


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In need of a makeover?
Need to entertain in a beautiful
new kitchen or lounge?

Then make the most of our special offer and have the home you
want this year without breaking the bank.
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*Nationwide Building Society.
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ALBION STREET
HYDE PARK, W2
A stunning newly refurbished four
bedroom flat on the second floor (with
a lift) of this portered building close
to Hyde Park.
• Four Bedrooms

$GYHUW
• Three Bathrooms
• Wooden Floors
• Views of Hyde Park

£1,700 Per Week


Hyde Park & Bayswater
020 7262 2030

CRAWFORD STREET
MARYLEBONE, W1
A bright and contemporary two
bedroom flat on the fourth floor (walk
up) of this modern conversion close
to Baker Street underground station
HANWAY PLACE, FITZROVIA, W1 and Marylebone High Street.
A stunning, rarely available loft style duplex apartment arranged over the top two floors (with • Two Bedrooms
lift) of this converted school building located in a quiet backwater just off Oxford Street. • Two Bathrooms
• Juliet Balcony
Two Bedrooms • Two Bathrooms • Two Reception Rooms • Double Volume Ceilings • Wooden Floors
Large Roof Terrace
£695 Per Week
Offers in Excess of £2,050,000 • Leasehold
Marylebone & Regent’s Park
Marylebone & Regent’s Park 020 7486 6338 020 7486 6338

London Estate Agents | Investment & Development Consultants | Block Managers | Established 1982 kayandco.com
Lifestyle THE JOYS OF A 29
HALF TERM SKI
| Fashion IN TRAVEL ON
MONDAY

BEFORE

From scruffy hack THIS is how I arrived. Quite scruffy and colour-
less, in a suit I bought from a rather strange lit-
tle shop in Camden. Or as I always thought of
myself, kind of smart but mostly battered, as a journalist

to dashing banker
should be. “It’s very, well, washed out?” said Ben, his
head tilted quizzically. Somehow I think he had
more scathing things to say. He was right though.
My grey suit is a little bit of a disgrace, while my
coat is quietly falling apart from the inside. And
after trying on the best of Selfridges’ range, I can’t
say I felt too happy putting it back on.

LOOK 3: Corporate entertainment


Even in the harshest of City jobs, occasions arise that
involve looking smart somewhere a bit glamorous. In
my case, I was to spend the weekend after we did
this shoot with a bank in Klosters, Switzerland, to
cover a snow polo match with a bank, and this was
how Ben thought I should dress. The woolen navy blue
jacket is suitably elegant, touched off by its beautiful
silver buttons. The jeans are from Etro, turned up and
paired with some astonishingly nice brown brogues. My
favourite bit though was the tie; hand knitted and worn
with a smart blue shirt, it shows that a tie needn’t just
be part of a corporate uniform, it can be casual too.
Prices: Blazer, Ralph Lauren: £1055. Jeans, Etro: £210.
Tie, Ermenegildo Zegna: £105. Navy v-neck, Aquascutum:
LOOK 2: £170. Brogues, Grenson: £165. www.selfridges.com
The Silicon Valley entrepreneur

MUCH though I wanted to after trying on


the job interview look, you can’t wear a suit
all of the time. My next ensemble consisted
of a Ralph Lauren check jacket, Ralph
Daniel Knowles didn’t know a good suit Lauren black jeans and a Ralph Lauren polo
neck. So it was very Ralph Lauren. The aim
was for a sort of casual, entrepreneurial
from a bad...until Selfridges stepped in style – but more Steve Jobs than Bill
Gates – and it does seem to work. And
MUST make a confession. How wrong I was. Like so many while some might question a polo neck as

I Before researching this piece,


I had only visited Selfridges
once, and only then to buy
Lucky Charms and jelly beans. So
going in to meet Ben Leaver,
young men in the City, I have
learned how to make myself look
truly sharp. Though I now wear a
jacket, and sometimes even a tie,
spiritually I am still wearing the
business wear, I was assured that this is
how all the really successful people are
dressing. Together with the world’s Bond
villains.
Prices: Polo-neck, Ralph Lauren: £545.
Selfridges’ exceedingly well- hoodie and jeans that got me Jacket, Ralph Lauren: £1350, Jeans, Ralph
dressed men’s formal wear buyer, through university. But while that Lauren: £270. www.selfridges.com
was frankly rather daunting. might do for journalists, it will
What would he make me wear? never do for my peers in the City’s
What are these … looks? Surely an banks and law firms. Here are my
ordinary suit cannot be much new favourite looks – and I’m fair-
improved on? ly sure they’d lift any wardrobe.

LOOK 1: The Interview Suit


THERE are suits, then there are suits. This
one, from Savile Row tailor Richard James,
is definitely one of the latter. Together with
a Mad Men inspired tie, it made me feel like
a CEO of the finest sartorial sense. The
navy colour is conservative but not dull,
while being dressed entirely in silk instantly
lifts your confidence. The cut is also mag-
nificent, and rarely for someone skinny like
me, doesn’t hang like something construct-
ed out of sackcloth around the shoulders. I
saw myself blissfully in a boardroom, like
Gordon Gekko, but with decorum. “That’s
actually quite good,” said City A.M. lifestyle
editor Zoe, sounding more surprised than I
felt was justified. But she was right, and I
didn’t want to take it off.
Prices: Navy silk suit, Richard James: £850.
Tie, Charvet: £125. Lilac shirt, Charvet: £265.
www.selfridges.com

LOOK 4: Urban sophisticate about town


Pictures: Alex Ridley City A.M.

JEANS and a jacket is something I’ve been doing for years. You can look effortlessly sophisticated
just by adding a little tailoring to your lounging around gear. Or, as an ex-girlfriend once put it to me,
you can look like the top and bottom halves of two different people sewn together at the waist.
Unlike the attempts that provoked that quip, Ben’s version definitely felt right. Not only does it turn
out you can wear a polo neck without a shirt, you can also wear black shoes with jeans, and some-
how it all actually works. Of course, the jacket is the key, but it is also important to get jeans with a
smart, traditional cut like these. Perfect for dinner parties or simply for impressing your girlfriend.
Prices: Shoes, Churches: £340. Jeans, Ralph Lauren: £270. Black v-neck, Aquascutum: £170. Jacket,
Ralph Lauren: £1350. www.selfridges.com
CITYA.M. 11 FEBRUARY 2011 Lifestyle 30

Coens inspire with a gritty Western

Hailee Steinfeld and


Jeff Bridges in True
Grit.

Hollywood’s first Mixing the drama of No Country For Old


Men with the humour of Oh Brother, GNOMEO & JULIET Above, Elizabeth
siblings have struck Where Art Thou?, True Grit is among the
finest of the Coen Brothers’ films.
Cert: U Moss and Keira Theatre
Knightley in The
Tom Latter hhhhI THE CHILDREN’S HOUR
gold again with this The greatest love story ever told… re-told
Chrildren’s Hour;
below left, Gnomeo Comedy Theatre
with animated garden gnomes and an & Juliet.
remake of an old NEVER LET ME GO Elton John soundtrack. Gnomeo and Ihhhh
Cert: 12A Juliet does not, it must be said, look
John Wayne classic hhIII
promising on paper. Yet on the big
screen, what is conceptually unconvinc-
THE excitement of seeing Keira Knightley
and Elizabeth Moss – Peggy in cult TV series
ing becomes a high-camp, off-the-wall, Mad Men – in the flesh seems at first to over-
Richard Nixon used to tell his psychiatrist seriously enjoyable romp that kids and shadow the play. The first time they share
Film that when he looked into the mirror in the
morning, he saw no one there. I felt a simi-
their parents will love.
In fair suburbia where we lay our scene,
the stage, it feels as though Keira is being
Keira (that controversial mouth and skinny
TRUE GRIT lar sensation watching the spectral Keira the ongoing feud between warring neigh- frame working overtime) and Moss is, well,
Cert: 15 Knightley’s void-like performance in this bours Mr Capulet and Miss Montague has not quite sure what to do with her hands
drab adaptation of Kazuo Ishiguro’s novel. been taken up by their respective garden and talks a bit loudly.
hhhhI Kathy (Carey Mulligan), Tommy (Andrew gnomes, the Reds and the Blues. When But as the the spell-binding action of the
Garfield) and Ruth (Knightley) grow up bright young Blue thing Gnomeo (James play unravels (Hellman, a German Jew from
IN this Coen Brothers-directed re-make of a together in the 1970s and ‘80s at a seeming- McAvoy) meets feisty Red stunner Juliet New Orleans, wrote it as the Nazis are com-
John Wayne Western, Jeff Bridges is the ly-idyllic English boarding school. But all is (Emily Blunt) on a rare trip outside the Blue ing to power but the play is in the midwest),
maverick, whisky-slugging gun-slinger not as it seems. The pupils are special. garden, cupid strikes and, well, you know the two become riveting.
Marshall Rooster Cogburn, a self-professed Because when they hit adulthood, they will the rest. Karen (Knightley) and Martha (Moss) have
"foolish old-man who has been drawn into be systematically harvested for their What Gnomeo and Juliet lacks in faith- spent their twenties slaving away to set up a
a wild goose chase by a harpy in trousers organs, until their skin drapes over their fulness to Shakespeare (the tragic third act school for girls in a farmhouse in Michigan
and a nincompoop". empty skeletons like a withered balloon is ditched in favour of a fairytale ending, while other girls their age were out at par-
The harpy is 14-year-old Mattie Ross and they die. naturally), it makes up for with an imagina- ties. Among the pupils at their school is
(Hailee Steinfeld), who, thanks to a mother Mulligan – with her ruddy, English tive and irreverent playfulness. It is also Mary, a spooky, deranged girl and a compul-
who is “indecisive and hobbled by grief” Cream Tea charms – is watchable as the lik- packed with familiar-sounding voices (Ozzy sive liar (played brilliantly by the androge-
has taken it upon herself to avenge her able Kathy. Garfield (The Osbourne, Hulk Hogan and nous Bryony Hannah). Finally, one of her
father’s recent slaying by wanted criminal Social Network) does his best Dolly Parton among many lies – inspired by a row that her two friends
Tom Chaney (Josh Brolin). The nincompoop with the irritating script. others) – no doubt overhear – has grave consequences. But it is
is the pleasantly dim-witted Texas Ranger Knightley floats through thanks to the showbiz Mary’s doting grandmother – who chooses
Laboeuf (Matt Damon). Together they the film with dead-eyed connections of the to believe Mary and the friend she manipu-
embark on a mission to get Chaney. vacuity; half mannequin, film’s producer lates into slandering Martha and Karen –
With its crisp, wide-angled vistas, the half human abyss. David Furnish. who becomes the moral focus of the play.
film earns its Best Cinematography Oscar The film hints at Big Issues And, if nothing Hellman’s preoccupation here is the wreck-
nod. Likewise Steinfeld and Bridges’ per- – being human, science and else, viewers can age that lies – particularly those containing
formances are both superb. The script is morality, the brevity of life – but the have great fun tiny grains of truth – can do. And so the play
infused with the hilarious, machine-gun trite, laughably earnest love triangle working out who becomes a gripping moral piece, with a host
verbosity that’s been the Coen brothers' saps away all life from it. Awful. is who. of riveting performances.
trademark for 25 years. TL Amy Higgins Zoe Strimpel

ALSO OUT THIS WEEK


FILMS, MUSIC, GAMES

FILM DVD MUSIC GAMES


JUST GO WITH IT Rom com with Adam Sandler and EAT PRAY LOVE Julia Roberts stars in saccharine JAMES BLAKE Debut album from the non-tennis- TEST DRIVE UNLIMITED 2 (PS3, X360, PC) Race fast
Jennifer Anniston. For masochists only. adaptation of Elizabeth Gilbert’s hit book. playing, electro songwriting whiz kid. cars around Ibiza.

YOGI BEAR New animated version of the Sixties car- THE RUNAWAYS Dakota Fanning and Kristen Stewart THE STREETS Mike Skinner has suggested Computers STACKING (PS NETWORK, XBOX LIVE ARCADE)
toon, with Dan Ackroyd on “pick-a-nick basket” duties. star in this film about the seventies girl rockers. and Blues may be his last album as The Streets. Puzzle game based on stacking Russian dolls.

SON OF BABYLON Iraqi drama about a boy and his UPSTAIRS DOWNSTAIRS DVD release for the Beeb’s THE BOXER REBELLION Third album, the Cold Still, TRINITY: SOULS OF ZILL O’LL (PS3) Swords, sorcery
grandmother in the chaos of modern Iraq. good-but-not-as-good-as-Downton costume revival. from the London-based Coldplay-alikes. and silly words-based action adventure.
CITYA.M. 11 FEBRUARY 2011 Lifestyle | TV& Games 31

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK


TERRESTRIAL
6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News 6.30pm One Man and His 6.30pm ITV News 6.30pm Hollyoaks 6.30pm Zoo Days
7pm The One Show Campervan 7pm Emmerdale 7pm Channel 4 News 6.55pm Meals in Moments
7.30pm A Question of Sport 7pm Julia Bradbury’s German 7.30pm Coronation Street 7.25pm 4thought.tv 7pm Five News at 7
BBC News Wanderlust 8pm Children’s Hospital 7.30pm CHOICE Father Ray 7.30pm Vets in Action: Five
8pm EastEnders 7.30pm An Island Parish 8.30pm Coronation Street Comes Out News Update
8.30pm QI 8pm Mastermind 9pm CHOICE Comedy Rocks 8pm Relocation: Phil Down 8pm Ice Road Truckers: Ray
9pm Hustle 8.30pm Life in a Cottage with Jason Manford: Variety Under Veilleux encounters large
10pm BBC News Garden with Carol Klein show, with Julian Clary, Alfie 9pm Embarrassing Bodies snowdrifts; Five News at 9
10.25pm Regional News 9pm Can’t Take It with You Boe and Matt Lucas. 10pm The Million Pound Drop Live 9pm The Mentalist: A corporate
10.35pm The Graham Norton 10pm CHOICE Fast and Loose 10pm ITV News at Ten 11.20pm 10 O’Clock Live 12.25am financier falls to his death. FAST AND LOOSE
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COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
    

SUDOKU KAKURO
14 35 12 19 11 24 17 3 
27 23

29 13
Place the numbers from 1 to 9 in each empty cell so that each 37    
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 11 9
3 30 6
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 9 15 4
above or to the left of it. 19 5
You can only use the digits 1-9 8 39 
    and you must not use the
3
16  
same digit twice in a block. 10 18 15 4
  The same digit may occur 22 7     
28
     more than once in a row or
column, but it must be in a
11
13
17
16
10

16 25
  separate block.
17 6 12 
14 26
    16 10


  ACROSS DOWN
4 Boundary (5) 1 Enthusiastic (5)
    
  WORDWHEEL O G
7 Disturb (7)
8 One trained to
install, maintain
2 Money extracted
as a penalty (4)
3 Male red deer (4)
Using only the letters in the Wordwheel, you have
    ten minutes to find as many words as possible,
H D
and repair
equipment or
4 ___ Strauss, jeans
manufacturer (4)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E wiring (11)
12 Absolving from
5 Very short skirt (4)
6 Contaminate (5)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
T N blame (9)
9 Cut thinly (5)
15 Not absolutely
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E U essential (11)
10 Major European river (5)
11 Counters used to represent
20 Frank ___,
QUICK CROSSWORD 9 2 8 3 9 3 8
money when gambling (5)

C I C A D A D L
7 3 9 1 7 4 9 8 SUDOKU         
nicknamed Old
Blue Eyes (7) 13 Prompting (5)
L S C A J O L E
1 5 2 3 1 5 4
         21 Bring together, 14 Little-used side road (5)
9 8 2 1 2 7 9
A F G H A N I O E          assemble (5) 16 Group created in 1949 for the
M O E R O D E D 4 5 7 6 9 8
2 4 1
         purpose of security (inits) (4)
P E E R S G L S 8 9 6 8 4
         17 Division between signs
L
M E A
O V
S U R
N A
E
S A L
8 2 1
5 1 7 4 3 2
5 6 6 1
WORDWHEEL          of the zodiac (4)
A S T R A Y B E         
M I G O R I L L A
9 8 6 7 4 4 9 The nine-letter word was 18 Grains on the beach (4)
7 3 2 1 4 2 7 1         
B R O K E R E F
SANDSTONE         
19 Pretentious (4)
S N E A S I L Y 9 3 8 2 1 5 3
Punter
32 CITYA.M. 11 FEBRUARY 2011

| Sports

SPORT TRADER DAVID WILD, BEN CLEMINSON AND BILL ESDAILE TEAM
UP TO BRING YOU THIS WEEK’S BEST RUGBY, FOOTBALL AND RACING BETS

Azzurri able to surpass


low expectations at HQ

Picture: ACTION
ENGLAND

ITALY

TOMORROW – 2.30PM BBC1


ENGLAND got off to a winning start at the
Millennium Stadium last week, their first
victory in Cardiff since 2003. Carrying the
confidence from Friday’s thriller, Martin
Johnson’s side returns to Twickenham
where they welcome Italy for the first of
three consecutive Tests at HQ.
After coming within three minutes of
beating Ireland at the Stadio Flaminio last
weekend, the Italians arrive in London
hoping to end a winless run of 16 matches
against the Red Rose. While Nick Mallett’s to a crazy experiment which saw flanker being in the right place at the right time.
side are not well enough equipped to do so Mauro Bergamasco played as scrum-half. The Italians are sure to be wary of him
against the most promising England XV I expect it to be tight in the opening after that performance, but whether they
for a number of years, they can be expect- period as the Italian forwards cause the can stop him is another matter. Three
ed to get within the 23 point handicap set England pack trouble. I’m particularly players – Austin Healy, Jason Robinson
by Paddy Power and should be backed at looking forward to the battle between and Mark Cueto – have scored hat-tricks
10/11. Azzurri tight-head Martin Castrogiovanni against Italy and it’s certainly not beyond
In their 11 years competing in the Six and his Leicester Tigers understudy Dan Ashton to join that list. It’s not for the
Nations Championship, there’s no doubt Cole, but as the game progresses faint-hearted, opening punters up to a
that Italy have struggled more than any England’s superior stamina and discipline potential 47 point loss, but a buy of
other side but in match terms, they are should see them pull away. Victory by a Ashton’s try minutes with Sporting Index
often underrated. In 2008, the Azzurri got couple of converted tries will keep the is highly tempting for those brave enough.
to within four points of England (19-23), Twickenham crowd happy and England to
while only five points separated the sides win by 11-20 points at 5/2 with Paddy POINTERS...
last year. In 2009, when the Italians last Power seems a good bet. Chris Ashton
came to Twickenham, England did claim received a ticking-off for his elaborate dive Italy to win (+23) at 10/11 with Paddy Power
a 36-11 victory – a winning margin of 25 across the line for his first try against England to win by 11-20 pts at 5/2 with Paddy Power
points – but that can largely be put down Wales, but he confirmed his knack of Buy Ashton’s try minutes at 47 with Sporting Index

way as he’s already done this season. City United have the class to break down any
MANCHESTER UNITED have played five games against the top side at Old Trafford, but Arsenal couldn’t
five, scoring just one goal, and their manage to score at the Emirates against
matches at Arsenal and Tottenham, as City and I can see a similar outcome here.
MANCHESTER CITY well as at Eastlands against United, all The draw is available at 11/4 with Victor
ended goalless. Chandler, which is worth taking, as is the
The Red Devils are the only side in the 9/1 on Betdaq about no goalscorer. In
TOMORROW – 12.45PM SKY SPORTS 1 league with an undefeated home record United’s four games against the top five
this term and they’ve dropped just two this season there have been just three
MANCHESTER United’s defeat at Wolves points out of a possible 39. They average goals and in City’s five against the same
last Saturday has breathed fresh life into over three goals per game at Old Trafford, opposition there have been only four, so a
the title race and a game against local so it’s understandable that they are a gen- sell of goals at 2.6 with Sporting Index is
rivals Manchester City wouldn’t necessar- eral 4/5 shot. surely the correct call.
ily be top of Sir Alex Ferguson’s wish list However, Mancini is always defensive
for his side’s next fixture.
It’s true that United have been excellent
against the best teams and it’s no coinci-
dence that there has been just one goal (a
POINTERS...
at home this season, but City are difficult 90th minute Paul Scholes header) in the Match to be drawn at 11/4 with Victor Chandler
to beat and it’s likely that Roberto Mancini two league Manchester derbies since he’s No goalscorer at 9/1 on Betdaq
will set his stall out in exactly the same taken the reins. Sell total goals at 2.6 with Sporting Index

COUNTDOWN TO CHELTENHAM
Plenty of horses put their Cheltenham ran him back too soon when he was vying for favouritism on the day and he
Festival credentials on the line this week- beaten over Christmas and he has had will surely be nearer half his current
end and there is bound to be movement plenty of time to recover. price.
in the ante-post markets. SO YOUNG was an extremely impres- Finally, Philip Hobbs runs PERSIAN
ZAIDPOUR is a very interesting runner sive winner at Punchestown on SNOW in the last at Newbury tomorrow
at Leopardstown tomorrow and the 8.0 Wednesday and now heads to the and he could well develop into a serious
available on Betdaq about Willie Neptune Investment Hurdle. contender for the Champion Bumper if
Mullins’ charge for the Supreme Novices That doesn’t look to be too strong a he wins as expected.
will be nearer 5.0 if he turns in an contest and the 10.0 available on Betdaq He can currently be backed at 15.0 for
impressive performance. looks massive. that particular contest and will be a lot
His shrewd trainer admitted that he I’d be seriously surprised if he wasn’t shorter if he sluices up tomorrow.

Join now for a risk free £20 bet and 2.5% commission in association with:
until March 31st (Betdaq T&Cs Apply, see site for details.)
www.betdaq.com 0870 178 1221
Sport
33
WEST HAM SET FOR OLYMPIC
STADIUM GREEN LIGHT
TOTTENHAM CHAIRMAN LEVY
PONDERS HIS NEXT MOVE: P35

SPORT | IN BRIEF

Scrum laws need changing Kubica out of intensive care


FORMULA ONE: Renault driver Robert
Kubica is out of intensive care as he con-
tinues his recovery from a rallying acci-
dent which threatens to cut short his
career. The 26-year-old Pole suffered
multiple fractures and will undergo two
operations on his foot and upper arm at
an Italian hospital on Friday. A further
operation on Kubica’s elbow has been
scheduled for Monday.

Ivanovic signs new Chelsea deal


FOOTBALL: Chelsea’s Serbia internation-
RUGBY COMMENT al defender Branislav Ivanovic has
signed a new contract which will keep
KYRAN BRACKEN him at Stamford Bridge until 2016.

AFTER an encouraging start to their Cleverly gets his world title shot
RBS 6 Nations campaign, England will BOXING: Britain’s Nathan Cleverly will
be looking to build further momen- challenge Jurgen Braehmer for his WBO
tum against Italy. The Red Rose will light-heavyweight title on 2 April at
need the following three men to Wembley Arena. Cleverly, 23, unbeaten
reproduce the form they displayed at in 21 fights, was installed as the WBO
the Millennium Stadium if they are to interim champion after victories in his
make it two wins from two. last two bouts against Karo Murat and
Nadjib Mohammedi. Braehmer, like
DAN COLE Cleverly, is a former European champion.
It’ll be difficult for Cole, not only
because he’ll be up against his club
colleague Martin Castrogiovanni, one
of the most mobile props in the
game, but also because of the way
Results
scrums are being refereed these days. ;8IKJ
I hate this crouch, touch and engage G;:N?PK<D8:B8PGI<D@<IC<8>L<K_\F)#
business. It’s difficult for the front Cfe[fe 1DN\Yjk\iNXc YkANX[\<e^ /$*#>
8e[\ijfeJZf YkJN_`kcfZb8lj /$,#KA\eb`ej<e^ Yk
row guys to get their timing right and fast becoming England’s talisman. icism, who excites the crowd. ning to stamp his authority on ImXe9Xie\m\c[E\[ /$-#8C\n`j<e^ YkGKXpcfi<e^ 
the whole process takes too long. It’s Normally that would be a label attrib- Martin Johnson’s side. Against a team /$)%
ridiculous. I’m hoping the powers uted to a vocal captain, a Martin TOBY FLOOD like Italy, who’ll try and turn the >FC=
that be revert to the previous system Johnson or Keith Wood for example. The Leicester fly-half has been a slow game into a dogfight, it’s important FD<>8;L98@;<J<IK:C8JJ@:<d`iXk\j>:#;lYX`#
before too long. Ashton might not be a leader in the developer, but his display against he puts them in their place early on. Le`k\[8iXY<d`iXk\j Ç(jkie[>Yi@iclec\jjjkXk\[#
sense that he commands the side, but Wales was perhaps a defining gXi.) 1-,IDZ@cifp%-.K8`b\eIjX #J\i^`f>XiZ`X
CHRIS ASHTON he’s very quickly established himself moment in his international career. It Gamesman Solutions – Managing profile JgX %-/A$9>fee\k=iX #JN\Yjk\i#;N`cc\kk#M
;lYl`jjfe=iX #GDXik`eJgX #IJk\ie\IjX %-08
He may have only played eight times as England’s chief try scoring threat can’t be easy with an icon like Jonny and popular sport stars – Speakers, ?Xej\e;\e #DBXpd\i>\i #K?Xd`ckfeLJ8 #D9ifne
for his country, but the rugby league and he’s the one guy in that back divi- Wilkinson breathing down your Leaders, Motivators, Ambassadors – Eqc #9Ild]fi[8lj #G?XejfeJn\ #8NXcc#=
convert has proved a real find and is sion, which has come in for some crit- neck, but Flood is definitely begin- www.gameplansolutions.co.uk 8e[\ijjfe?\[Jn\ #CN\jknff[%
IL>9PLE@FE

McIlroy outshines Woods and co Cricket mourning ‘Barnacle Bill’ D8>E<IJC<8>L<


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8KG89E8DIFNFIC;K<EE@JKFLIE8D<EK
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Africa’s Thomas Aiken and Spain’s Cricket Board chairman Giles Clarke YkA9\ee\k\XlA$NKjfe^X=iXeZ\ -$*-$*%

GOLF

Sergio Garcia. CRICKET praised Bailey’s “enormous contribu-


NORTHERN IRELAND’S Rory McIroy Woods rescued what he termed a tion to the game” and he also hailed KF;8PËJ;@8IP
put the world’s top three golfers in “scratchy” 71 with a stunning closing ENGLISH cricket is mourning the him as “one of the finest all-rounders =ffkYXcc.%+,gdlec\jjjkXk\[
the shade in the first round of the eagle, while Westwood and Kaymer death of former international Trevor this country has ever produced.” egfn\i=ffkYXccC\X^l\Knf
Omega Dubai Desert Classic. both carded 69s. Bailey who died in a fire at his home Bailey, who was nicknamed 9likfe8cY`fem:_\jk\i]`\c[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
Lee Westwood, Martin Kaymer and “I’d like to think I’m a better player aged 87. ‘Barnacle’ after recording the slowest IL>9PLE@FE
Tiger Woods were grouped together, than two years ago. I’m definitely Bailey played 61 Tests and was a ever Test half-century, played his 8m`mXGi\d`\ij_`g1 JXc\m9Xk_.%+, %
but it was the 21-year-old McIlroy who more experienced and a more round- member of a side which won three entire first class career at Essex and DX^e\ijC\X^l\1 >cXj^fnm:Xi[`]]Blues .%*, .
put them in shade with a superb 65 ed and complete player,” said McIlroy, consecutive Ashes series between was later a member of the BBC’s Test
to lead by two shots from South who holed eight birdies. 1953 and 1956. England and Wales Match Special commentary team. email sport@cityam.com
34 Sport CITYA.M. 11 FEBRUARY 2011

HEAD-TO-HEAD
Johnson urges The clash will pitch rival Leicester props
Dan Cole and Martin Castrogiovanni into
battle against each other. Both are strong

England to go
in the scrum but stats from the Amlin
Opta Index, which uses Heineken Cup
data, show that the Italian is a far more
prolific ball carrier, while Cole has a slight
edge when it comes to tackling.

for the jugular


l Manager warns team against complacency
l Side unchanged for Italy visit to Twickenham

RBS game off last week. We had one


near the end that would have killed
6 NATIONS the game off and we didn’t get in,
BY FRANK DALLERES so we spoke a bit about that.
“Our No1 [priority] is a win, No2
ENGLAND manager Martin Johnson is no serious injuries and No3 is a
has told his team to forget the fact good game. We know what they’re
they are overwhelming favourites about. They’re a good team and a
for tomorrow’s RBS 6 Nations clash
with Italy and show no mercy when
real challenge.”
Johnson has stuck with the same
l STATISTICS l
the perennial wooden spoon recipi- team that beat Wales, with Tom COLE CASTROGIOVANNI
ents visit Twickenham. Wood (inset) retained at blindside 5 Appearances 6
Johnson was far from flanker after impressing on 8 Carries 32
satisfied with his side’s debut – not that his manager 12 Metres 37
performance in last was in any mood to shower 0 Clean Breaks 0
week’s champi- him with more praise.
onship opener “The lad did okay on 0 Defender Beaten 1
against Wales, Friday,” Johnson said. 0 Offload 1
despite leaving the “There are lots of bits we 0 Turnover Won 0
bear pit of the need to get better at, things 3 Turnover Conceded 2
Millennium Stadium that we talked about after 1 Penalties Conceded 4
with a hard-fought vic- the game.” 25 Tackles 22
tory. Only a late drop goal from 0 Missed Tackles 2
And last night he warned the replacement fly-half Ronan O’Gara
1 Passes 4
same starting XV that they cannot denied Italy a famous win over
afford to let their guard down Ireland in an attritional contest in 0 Lineout Steals 1
against an improving Italy side who Rome, and Johnson took note.
he believes were robbed of a “You have the same conversation
deserved first-round win by Ireland. when you play Italy, they are tough
“There was a big build-up to that games,” he added. “They should
game last week, and this is not seen have won last week. They can play.
as the biggest game of the week, but They keep hold of the ball and put
they are the only team that can beat you under pressure. They do that
us this week,” said Johnson. well and we are under no illusions
“Right from the first meeting on that this is the toughest test we can
Monday we have spoken about play this week. People say we didn’t
things we did well and things we play well against them last year but The Amlin Opta Index is the first ever player
can improve on. We had plenty of they are a good side and they are a
chances to score tries and finish the different challenge.” performance comparison analysis in rugby
CITYA.M. 11 FEBRUARY 2011 Sport 35

Questions mount as
West Ham set for
stadium green light
Tottenham, who joined forces expressed surprise at suggestions

OLYMPICS
with entertainment giant AEG to their proposals had failed to meet
BY FRANK DALLERES bid for the stadium, refrained two of the five criteria, given that
A DECISION may not be confirmed from comment other than to objections of such a serious nature
until this morning, but the widely express surprise at the apparent might be expected to have been
anticipated move to award the foregone conclusion. flagged up earlier.
Olympic Stadium to West Ham “Whilst we are concerned to Tottenham, who spent big on a
over Tottenham has already read that there appears to have communications strategy, first
prompted serious questions to be been a leak of information declared interest in October,
raised about the bidding process. from the OPLC about what were shortlisted in November
The Hammers have been unani- their recommendation and and in recent weeks have
mously declared the winners of a decision may be, we regard it held weekly meetings with
lengthy and increasingly bitter as premature to make any the OPLC. Club insiders feel
battle with Spurs even though the comment at this stage,” the that there has been ample
Olympic Park Legacy Company club said in a statement. time to raise any funda-
(OPLC) is only due to vote on the Spurs played down mental flaws.
matter over breakfast today. suggestions that But the club’s
Apparent leaks suggest key chairman Daniel plan to knock
OPLC executives view West Ham’s Levy (right) is down and then
bid as the only one that matches already primed to rebuild the stadi-
all five of its selection criteria, and
the 14-man board is expected to
fall into line and recommend it.
Barring an almost inconceivable
seek a judicial
review of the
OPLC’s verdict,
although it is
um without a
track and house
athletics else-
where drew vocif-
"Swing low,
sea change in opinion, it means
the east London club will inherit
the £537m venue after next sum-
mer’s Games and begin work on a
understood that
they remain
open-minded
about legal action.
erous opposition
from the world of
track and field, and
proved unpopular
sweet Charidee''
£95m conversion that, crucially, Sources close to with the public in a Come and swing a club in aid of the Wooden
will retain a running track. the club, however, recent poll.
Spoon and challenge the ‘Tiger’ in you.

Our ‘Pebble Beach’ Golf Competition has tee’d off this week at City Golf.
COMMENT choice, with high-profile politi- placed to judge that.
cians and key figures from the But perhaps a bigger question
FRANK DALLERES athletics world backing the
Hammers over their pledge to
is: were the criteria themselves
the right ones? Is it viable for top
It’s only £10 to play 5 virtual holes (Stroke Play) all
IF, as expected, West Ham are retain the running track. level football to share with athlet- of which goes to this worthy cause; sponsored by
handed the keys to the Olympic It may be that their bid and not ics? And Twenty20 cricket too? Saxo Bank, and hosted at:
Stadium it will be seen as a tri- Tottenham’s meets the five crite- It would be nice to think so, City Golf, 40 Coleman Street, EC2R 5EH.
umph of idealism over pragma- ria set out by the Olympic Park not least for the community ben-
tism, of fulfilling legacy promises Legacy Company – the OPLC efits West Ham promise, but suc-
over cold, hard financials. itself, which has been privy to the cessful precedents are hard to
Just email ElliotLake@citygolfclubs.com to book your one hour
It appears to be the popular minutiae of both bids, is best find, and only time will tell.
simulator experience.

The competition runs over six weeks and our current leader is Ian Dennis

Rooney: Wilshere’s got what it takes


of Saxo Bank with 1 over.

There is no limit as to the number of times you can enter.

1st prize
A custom set of 8 Irons and the chance to mingle with
rugby legends at the Prize Giving and Q&A on 22nd March.

FOOTBALL thought Jack Wilshere did really this season, and the Manchester
BY JAMES GOLDMAN well,” said Rooney. “He is really United talisman was suitably
composed on the ball and really impressed by his contribution. For the live Leader board - http://tinyurl.com/4ewl4ja
ENGLAND striker Wayne Rooney is good to play with. You can see the “With Ashley, he has been play-
confident Jack Wilshere will have a potential he has got.” ing behind the main forward for For Blog and further details -
long and distinguished interna- Wilshere aside, England’s other Villa this season. You could see he http://www.imaginegolfclub.com/blog/competitions
/wooden-spoon-virtual-golf-competition-1123.htm
tional career after the Arsenal star- standout performers were the has benefited from that with the
let impressed on his first senior Aston Villa duo, Ashley Young and way he did against Denmark. He
Sponsored by
start against Denmark on Darren Bent, who were both on the got his goal and he’s always a
Wednesday. scoresheet in a 2-1 win. threat in there.
Wilshere looked composed in Young replaced Rooney at the “The manager is trying to give
front of the back four before he break and played behind the main players a chance and they are start-
was taken off at half-time. “I striker, as he has done for his club ing to take those chances.”