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LESS REGULATION PLEASE BUFFETT’S


HEIR STEPS
WE INTERVIEW LORD LEVENE P8 DOWN P2
Issue 1,354 Thursday 31 March 2011 www.cityam.com FREE

MORE FIRMS
BLOOMBERG WOOS BARCLAYS

JOIN NORTH
SEA MUTINY
ENERGY

Aberdeen yesterday. Statoil, which on Tuesday said it was


BY MARION DAKERS AND JULIET SAMUEL Valiant, which has seen its shares suspending a $10bn (£6.2bn) project at NEW YORK mayor Michael Bloomberg (pictured) yesterday called on Barclays bank to
tumble more than 10 per cent since the Bressay and Mariner oil fields – move its headquarters to the Big Apple. “It would be a great move for them to move
PRESSURE mounted on George the news last Wednesday, has report- two of the most valuable deposits left here,” Bloomberg said at a press briefing. “I hope they move here; it’d be great for us.”
Osborne to rethink his oil profit tax edly scrapped projects worth more in the North Sea – to review whether Barclays has held early-stage talks with US regulators about domiciling across the pond.
raid yesterday, as more oil firms than £100m. It issued a statement that the investment is still worthwhile. BOB DIAMOND SPEAKS OUT ON REGULATION: P12 Picture: REX
threatened to shelve lucrative projects did not detail specific cuts, but chas- Oil & Gas UK, which represents

IPO market stunned


in the North Sea in protest at the chan- tised the chancellor for his “unclear” almost 120 firms in the industry, is
cellor’s surprise levy. policy that “will reduce investment, due to meet energy secretary Chris
Gas giant Centrica, oil explorer put further pressure on oil and gas Huhne today for the first government
Valiant and French group Total all said supply in the UK and ultimately could consultation on the tax since it was

as £1bn float pulled


yesterday they are reviewing current drive oil prices up further”. unveiled.
and future investments in the North The trio follow Norwegian oil giant Yesterday, a senior Treasury source
Sea following the plan in last week’s told City A.M. the chancellor had been
Budget to hike the North Sea supple- forced to raid North Sea tax profits
mentary charge from 20 to 32 per cent because the public was expecting sig-

overnight. nificant action on fuel duties ahead of CAPITAL MARKETS has a firm sense of what the business
Centrica just last month pledged to the Budget. BY DAVID HELLIER is worth and feels that it will get the
invest £450m in two gas fields but has The Treasury hopes to make £10bn valuation it wants at some time in
joined the growing number of firms from the tax grab over the next four OMAN’S Renaissance Services was the future,” said one banking source.
lobbying Osborne to modify his plans. years to fund a petrol duty cut. yesterday forced to pull its £1bn Topaz, a Dubai-based oilfield serv-
“We are reviewing all projects, Ed Balls, shadow chancellor, put London flotation of Topaz Energy ices company, was due to raise

S
including fields that are in current soaring petrol costs at the heart of after investors failed to show enough £311m to fund expansion plans and
production and projects that are com- Labour’s economic message in the appetite for the repay its debt. Advisers expect the
ing down the pipeline,” a spokesper- weeks before the Budget, in a bid to shares. group to try a London issue again in
FREE
son told City A.M. yesterday. “Each
project has a different [tax] regime
capitalise on growing concern over the
rising cost of living.
The banks were
due to price the Crisis t the near future once markets
have settled.
attached to it, and it will take some Osborne’s tougher stance on oil issue before lunch-
called alks The Danish group ISS ear-

L
time to work through. There is still firms sharply contrasts with that of US time but did not lier this month pulled its

Topaz over
work going on at the fields.” President Barack Obama, who yester- do so after it flotation and the French
Total is also reviewing its £170m day unveiled attractive tax breaks for became clear group Lagardere postponed a
annual spend on exploration in the
North Sea, the French firm’s vice pres-
oil companies operating in the States
in a bid to start weaning the world’s
things were not
going as float sale of a 20 per cent stake in
Canal Plus.
ident for northern Europe Patrice de biggest economy off fuel imports. planned. CAPI How we broke the news yesterday

B TAL
Vivies told an oil conference in Osborne is under pressure Picture: Micha Theiner ALLISTER HEATH: PAGE 2 “Renaissance Y DAVID HELL MARKETS that the Topaz float was in trouble

FTSE 100 ▲ 5,948.30 +16.13 DOW ▲ 12,350.61 +71.60 NASDAQ ▲ 2,776.79 +19.90 £/$ t 1.61 -0.01 £/¤ 1.14 unc ¤/$ 1.41 unc Certified Distribution
03/01/11 till 30/01/11 is 97,465

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2 News CITYA.M. 31 MARCH 2011

Libyan minister
Populist tax on oil firms has backfired defects to UK


out of those two key sectors can only a fortune from the increase in the around the world. WORLD NEWS
mean one thing: higher taxes on the price of oil in recent years. It is equal- Not only is the coalition artificially
rest of us and fewer jobs. ly true that conditions in many other accelerating the North Sea’s natural LIBYA’S foreign minister Moussa
It was therefore bizarrely short-ter- countries are even more unstable – decline, it is also cooling on nuclear Koussa defected to the UK yesterday,
mist for Osborne to launch such a sav- and not just in Libya. But some energy in the aftermath of the saying he opposed his government’s
age raid on North Sea energy firms in mature North Sea oil and gas fields, Japanese tragedy. Combined with the attacks on civilians.
the Budget. The special additional tax which pay petroleum revenue tax as UK’s woeful infrastructure, an energy As the US, UK and France refused to
on the sector was hiked from 20 to 32 well as corporation tax, will now face crisis – perhaps in a decade or so – is rule out arming Libyan opposition
EDITOR’S LETTER per cent. All too predictably, several a marginal tax rate of 81 per cent. looking ever more likely. Even more forces to help oust Muammar
important firms are reconsidering Others will pay 62 per cent tax. This is supplies will have to be imported Gaddafi, Kusa resigned from his post
ALLISTER HEATH whether it is worth the hassle devel- oppressive and reminiscent of the from countries such as Russia, fur- in the Libyan government and
oping new fields. First Norway’s 1970s. Luring firms into making an ther endangering energy security. claimed refuge after he landed at
IF George Osborne is to be believed, Statoil halted investments in the investment in the belief that tax will Energy companies are also key Farnborough airport yesterday, the
Britain is open for business once Mariner and Bressay fields, which are be low, before tightening the screws investors in skills: the coalition keeps Foreign Office said.
again. Some senior executives clearly worth up to $10bn. Yesterday, Valiant, once the spending has taken place, saying it wants to help high tech man- A Libyan government spokesperson
agree: Sir Martin Sorrell, WPP’s boss, a British firm, cancelled a project can only destroy a country’s credibili- ufacturing and science – and yet it is earlier claimed that Kusa was here on
wants to move his firm’s legal base worth £93m, while Centrica is review- ty, and forces investors to impose a crippling an industry that does all a diplomatic mission.
back to Britain if all of the proposals ing its options, as is Total, the French risk premium on all their dealings these things. Libyan rebels struggled to hold
in the Budget are voted through. But giant. Just like when Gordon Brown with that economy. Large oil firms It is not just oil firms. The US has its back advances from pro-Gaddafi
if you are an oil and gas company, or a foolishly introduced a 10 per cent tax need to invest in parts of the world own problems, of course, but Mike forces yesterday.
bank, Britain is looking like an hike on oil firms in 2006, the North with the highest return on capital Bloomberg, New York’s mayor, yester-
increasingly bleak place to be based. Sea will suffer and jobs will be lost. and the least tax and regulatory day said that he would love Barclays Libyan foreign minister
This should concern everybody: finan- Already, many of the oil majors have uncertainty. It is not much of an to relocate to New York. As we cut off Moussa Koussa has
cial and energy firms are both very been quietly selling their fields, rein- advert for the UK when the only argu- our nose to spite our face, others will defected to the UK, the
large payers of tax to the exchequer, vesting their capital in other, more ment in our favour is that we are not happily be picking up the pieces. Foreign Office said last
and important employers. In these promising parts of the world. as bad or unpredictable as various allister.heath@cityam.com
straightened times, any hollowing Of course, energy firms have made banana republics or dictatorships Follow me on Twitter: @allisterheath night

7th Floor, Centurion House,


24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Buffett’s heir
stands down
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
INVESTMENT or $135 per share, a 28 per cent premi-

Lifestyle Editor Zoe Strimpel


Sports Editor Frank Dalleres BY MARION DAKERS um, on 14 March. James Murdoch will relocate to New York Picture: Micha Theiner/City A.M.
Art Director Craig Gaymer “Neither Dave nor I feel his Lubrizol

Murdoch promotes his son


Pictures Alice Hepple WARREN BUFFETT’S heir apparent purchases were in any way unlawful.
Commercial has resigned after buying shares in a He has told me that they were not a
Sales Director Jeremy Slattery company he then repeatedly pushed factor in his decision to resign,” said
Commercial Director Harry Owen Buffett to acquire, the billionaire Buffett. “Dave’s letter was a total sur-
investor announced yesterday. prise to me, despite the two earlier
Head of Distribution Nick Owen
David Sokol had twice previously resignation talks.”
tried to quit his role at Buffett’s “Sokol will be missed, but the bench MEDIA move, still reporting to chief operat-

Distribution helpline Berkshire Hathaway over the same is pretty deep. There have been three ing officer Chase Carey, makes him
If you have any comments about the distribution BY STEVE DINNEEN
of City A.M. Please ring 0207 015 1230, or email issue, the Sage of Omaha said in a let- to four candidates mentioned as peo- officially the third most important
distribution@cityam.com ter to shareholders, but could not be ple who can replace Buffett as a chief JAMES Murdoch has continued his person in the company, and he will
persuaded to stay this time. executive,” said Jerry Bruni of fund rise through his father’s media work closely with his father.
Editorial Statement Sokol held shares in Lubrizol last manager JV Bruni & Co last night. empire after being promoted to He will relocate to New York for the
This newspaper adheres to the system of December when he flagged up the deputy chief operating officer of role, making former Sun editor
self-regulation overseen by the Press Complaints company with Buffett. Warren Buffett has News Corp in addition to his role as Rebekah Brooks the most senior UK-
Commission. The PCC takes complaints about the Buffett said he was originally not in chief executive of the media group’s based member of the Murdoch
editorial content of publications under the Editor’s lost David Sokol, a top
Code of Practice, a copy of which can be found at favour of the idea but warmed to it international operations. empire. The move follows the
www.pcc.org.uk after Sokol told him of a conversation executive at Berkshire He will remain in direct control of appointment of Elisabeth Murdoch to
Printed by Newsfax International,
with Lubrizol’s chief executive. Hathaway, following News International, the UK-based the News Corp board following the
Beam Reach 5 Business Park, Berkshire ultimately announced its the Lubrizol acquisition business which operates newspapers acquisition of her Shine production
Marsh Way, Rainham, Essex, RM13 8RS purchase of Lubrizol for $9bn (£5.6bn) including the Times and the Sun. The company.

WHAT THE OTHER PAPERS SAY THIS MORNING


have their funding reduced by 15 per
cent in a three-year funding period
beginning next year.
CHRISTIAN CANDY TO RESELL GOLD PROFITS PROPHET QUITS AFTER BLACK CAB MAKER SUED BY DRIVERS BANKERS PAN LONDON STOCK
SHARES AT&T CHIEF DEFENDS US DEAL BOARD DEFIED HIS WARNING OVER MASS RECALL EXCHANGE MERGER WITH TMX
Christian Candy, the property devel- AT&T’s proposed $39bn (£24.3bn) pur- The board of Cable & Wireless The maker of London’s black cabs, As the Ontario government approach-
oper, is to sell shares back to minority chase of Deutsche Telekom’s T-Mobile Worldwide rejected the advice of its Manganese Bronze, is being sued by es a deadline for considering the pro-
investors in a gold mining company USA , if approved, would result in a finance director that it needed to 436 cab drivers because of a mass posed merger of TMX Group and
after his attempt to take the mine significant increase in mobile broad- lower its profit guidance in the run recall of vehicles in 2008. In a stock London Stock Exchange Group, some
owner private was thwarted. The band capacity and improved coverage up to a positive trading statement last market announcement yesterday, the top Canadian banking executives
agreement is part of a deal that could in key markets such as New York, month, only to shock the market company said it was being pursued for have ratcheted up their disapproval.
strengthen the rights of small according to Randall Stephenson, with a damaging warning two weeks alleged financial losses suffered by At the same time, the country’s
investors. It is set to be approved at AT&T chief executive. later. Tim Weller quit the telecoms the taxi drivers following the inci- prime minister warned he would
today’s annual meeting of Metals company three weeks ago, just ten dent. block foreign investment that doesn't
Exploration, an Aim-quoted company RUSSIAN TYCOON APPLIES TO TAKE months into the job. generate a net economic benefit for
that is mining in the Philippines. CONTROL OF SAAB DEBENHAMS’ LONDON BASE SOLD TO Canada.
A Russian entrepreneur has applied EMERGING ECONOMIES’ TASTE FOR SCOTTISH WIDOWS FOR £36M
FUNDS AXED FOR MORE THAN 200 to take over Saab Automobile amid SCOTCH GETS STRONGER The headquarters of Debenhams has DIAMOND THEFT ROCKS JEWELLERY
BODIES further signs of trouble at the strug- Scotch whisky exports jumped to a been sold for £36m, paving the way SHOW
More than 200 arts bodies are to lose gling Swedish car-maker. Saab yester- record last year amid rising demand for the department store group to Diamonds worth several million dol-
their funding from Arts Council day halted production for a second for a top-price dram in countries move to new offices. The Scottish lars have been stolen by thieves from
England in the biggest shake-up of day after some of its suppliers including India and China. Although Widows Investment Partnership, on the Baselworld watch and jewellery
arts funding for 30 years. A further stopped deliveries because of dis- volumes fell by two per cent, to the behalf of Scottish Widows Unit Funds, show, police said yesterday. A gang of
308 institutions will suffer grant cuts agreements over payment and terms. equivalent of 1.06bn bottles, continu- has acquired 1-2 Welbeck Street in the five snatched gemstones from a dis-
in real terms, including leading bod- Vladimir Antonov posted on Twitter ing “premiumisation” of the industry West End with a view to redeveloping play in Hall 3 of the giant show, the
ies such as the Royal Opera House, he had “officially submitted the ensured a 10 per cent increase in the the site. Debenhams is paying an world’s largest display of luxury
and the National Theatre, which will forms... for change of control”. value of those volumes to £3.45bn. annual rent of £1.43m. watches and jewellery.
CITYA.M. 31 MARCH 2011 News 3

June IPO planned for SUEK


ADVISERS: SUEK FLOAT
Koemtzopoulos and Laurent
CREDIT SUISSE Charbonnier on the attempted float of
Nord Gold, which was cancelled in
CHRIS BYRNE January.
EXCLUSIVE

to float for some time, with a London whether the miner’s owners are will- And last year, he was put on the
BY JULIET SAMUEL initial public offering (IPO) originally ing to offer an “oligarch discount”, as account for UK engineering firm
slated for 2008, then June last year and one investor in the sector put it, for the Bodycote alongside Execution Noble.
RUSSIAN coal giant SUEK is planning a then postponed until 2011. risk of buying shares in a company He also advised on the £12.8bn
$1bn (£623m) float in London by the There is speculation that the deal that is 50 per cent owned by Russian rights issue for Intermediate Capital
end of June, City A.M. has learned. could again be pushed back due to tycoons Sergei Popov and Adrei CHRIS Byrne is leading the effort to Group in 2009, where he was work-
The float is being shopped around ongoing market uncertainty, but with Melnichenko. Such a discount should get SUEK on the London Stock ing with Indy Bhattacharyya and Alex
some of the world’s biggest investors bulk commodities currently seen as a be around 20 per cent, said the Exchange – no mean feat given the Phillips. At JP Morgan Cazenove his
in commodities during pre-marketing hot proposition, part-owner Sergei investor. failure of its previous attempts. clients included property investment
meetings in London, with BlackRock Popov is keen to take advantage of Several Russian floats planned for Byrne has been with Credit Suisse firm Capital & Regional, defence and
and Renaissance Capital having been high prices for resources to scale down this year have failed due to overly high since 2006 when he moved from JP technology company QinetiQ, and
approached. his ownership share and concentrate value expectations by owners, while Morgan Cazenove to focus on UK electronics firm Laird Group.
The deal, which is being led by Chris on other businesses. others, such as Rusal, saw their share industrial and technology clients. Credit Suisse is also an adviser on
Byrne at Credit Suisse, is set to value Investors say they would welcome price drop sharply after going public, Since moving to Credit Suisse, he Glencore’s potential float. The bank
Russia’s biggest producer of thermal another major coal player on the mar- although it has since risen above its has worked alongside Nicholas declined to comment yesterday.
coal at $5-$8bn. SUEK has been trying ket but there will be a question of float price.

DIMON GETS TOUGH ON REGULATION

JPMORGAN chief executive Jamie Dimon warned yesterday that excessive regulations risk
harming the economy. Speaking at the US chamber of commerce, Dimon said new capital
rules could be “the nail in our coffin for big American banks”, adding that the Dodd-
Frank banking reform was “one of the most irrational pieces of legislation I’ve ever seen” .

Ireland braces
for stress test €23bn in additional capital.

EUROZONE CRISIS
The government has set aside
BY MARION DAKERS about €35bn to support the debt-rid-
IRELAND is due to announce the den banks. “I think the market is posi-
results of its banking stress tests this tioned for less [capital than the
afternoon, raising the spectre of fur- government has set aside], but it is a
ther nationalisations, while Portugal, pretty enormous figure no matter
Spain and Greece continue to grapple what,” one trader said.
with their debts. Meanwhile, Spain’s planned merg-
Irish finance minister Michael er of its cajas (regional banks) looked
Noonan will announce at 4.30pm close to collapse yesterday after the
whether the country’s banks have Bank of Spain ordered the four banks
enough capital to withstand future involved to come up with an alterna-
financial shocks. tive plan. Three of the partners in the
Prime Minister Enda Kenny told state-backed Banco Base plan voted
parliament yesterday that Noonan against the restructuring yesterday.
will outline the next steps towards a And Portuguese and Greek govern-
“strong, working, credible banking ment bonds underperformed other
structure” after the results. Eurozone debt yesterday following
Trading in the shares of Bank of Tuesday’s ratings downgrades, with
Ireland and Allied Irish Banks, the top their yield and credit default swap
two lenders, will be suspended today curves expected to invert further on
pending their stress test results and bets it was inevitable Lisbon will seek
any subsequent announcements, to a bailout.
avoid “the possibility of a disorderly Portuguese 10-year yields rose by
market”, the Irish central bank said six basis points to 8.303 per cent, with
last night. the three-year debt yielding 8.914 per
Analysts estimate the four remain- cent. Five-year Portuguese credit
ing Irish lenders – Bank of Ireland, default swaps rose by 15 bps to 565
AIB, Irish Life & Permanent and EBS – bps, on track for the highest close on
require between €18bn (£15.8bn) and record, according to provider Markit.
CITYS.M. 31 MARCH 2011 Focus on Bribery Act 5

COMMENT: LAWYERS REACT TO THE BRIBERY ACT GUIDANCE


SATINPOD DONGA| LINKLATERS STEPHEN MORRELL| DAWSONS

“ The guidance provides a welcome dose of


common sense. The Act is not intended to subvert nor-
mal business interaction and this is now much clearer.
The focus on proportionate compliance procedures
may help save costs for some businesses, and foreign
“ It is a pity that the Act imposes absolute
duties. Despite representations from businesses, the
government has refused to carve out ‘facilitation pay-
ments’. This criminalises conduct for which, as Ken
Clarke admits, there is no public interest to prosecute,

” ”
companies will be assured that they will not fall within but leaves businesses in a state of uncertainty. This is
the clutches of the UK regulator unless they unlikely to make the UK a more attractive des-
have a demonstrable business presence. tination for overseas companies.

HARRIET TERRITT| JONES DAY

“ The Bribery Act will have a big impact on M&A deals where one or more parties is subject to the Act. The possibility that a tar-


get company could be subject to a significant corruption investigation has obvious business and reputational implications, particularly
given that fines are expected to be substantial and the target will likely have to disgorge any benefit received as a result of a bribe.

Despite Ken Clarke’s assurances businesses are still hesitant to book expensive hospitality
packages for the London 2012 Olympics Picture: Michal Theiner/CITY A.M.

Bribery Act to
hit Olympics

REGULATION
BY ELIZABETH FOURNIER clients at the biggest sporting event to
hit our shores since 1966 for these rea-
THE BRIBERY Act could hit corporate sons.”
hospitality bookings at the London Justice minister Ken Clarke also
2012 Olympic games, despite assur- backed up rumours that some foreign
ances that it is not intended to target companies listed in London would be
“genuine” hospitality. exempt from the Act, sparking con-
In the long-awaited guidance to the cern that UK companies could be left
Act, released yesterday after a delay of at a competitive disadvantage.
more than two months, the Ministry “Mere listing on the London Stock
of Justice sought to reassure compa- Exchange, or just the fact of having a
nies that “bona fide hospitality...is UK incorporated subsidiary, would not
recognised as an established and necessarily mean the act applies,” he
important part of doing business”. said.
But with a single VIP hospitality But while Clarke played down the
package for 10 people to attend the Act’s overseas effect, the Serious Fraud
Olympic opening ceremony running Office – which will be responsible for
to more than £55,000, businesses are enforcement – is keen to stress it will
keen to err on the side of caution. exercise a firm extraterritorial hand.
“Parliament would be advised to Speaking to a conference of Russian
consider the content of the guidance business leaders in mid-March, Serious
which it issues in light of these con- Fraud Office director Richard
cerns,” said Jonathan Walters, a part- Alderman said: “Do not be surprised if
ner in the sport group at law firm the SFO takes a wide view of this
Charles Russell. phrase so that we can ensure that the
“It would be a great shame if compa- policy objective of ensuring competi-
nies were deterred from entertaining tiveness is complied with,” he said.

AT A GLANCE: THE BRIBERY ACT PRINCIPLES


● PROPORTIONATE PROCEDURES by people it’s associated with.
The procedures that a company must have ● DUE DILIGENCE
in place to prevent bribery should be pro- Companies will have to carry out stringent
portionate to the risks it faces and to the due diligence investigations into anyone
nature, scale and complexity of its activi- they choose to do business with, or who
ties. This offers welcome respite to smaller will carry out business on their behalf, in
companies that are less likely to take part order to mitigate the risk of bribery.
in overseas transactions. ● COMMUNICATION AND TRAINING
● TOP-LEVEL COMMITMENT Businesses must make sure that all
Leadership on preventing bribery must employees and associates are aware of the
come from management, who should fos- official bribery policy and procedures, and
ter a culture within the organisation in provide training on compliance where nec-
which bribery is never acceptable. essary.
● RISK ASSESSMENT ● MONITORING AND REVIEW
Companies will be responsible for ongoing Procedures in place to prevent bribery
and in-depth risk assessment of its poten- must be constantly reviewed and improved
tial exposure to bribery, both internally and where potential gaps are found.
6 News CITYA.M. 31 MARCH 2011

PROFANITY FAIR
Tepco asks for public money
JAPAN QUAKE The firm’s shares tanked 17 per The Japanese authorities said in


BY MARION DAKERS cent yesterday, taking the stock to a briefing with the World Trade
its lowest level in almost half a cen- Organisation (WTO) yesterday they
TOKYO Electric Power Company tury. are monitoring radioactive con-
(Tepco) asked for government fund- Workers are still struggling to tamination in soil to prevent
ing yesterday as it admitted that it bring the Fukushima Daiichi reac- potential food safety risks and
would not be able to fund a clean- tors under control. Units 1, 2 and 3 would provide the WTO with quick
up at its stricken Fukushima still need water pumped into the and precise information.
Daiichi nuclear plant. tanks to prevent the nuclear rods “In return, Japan asked mem-
Tepco said it wanted to remain a from being exposed and risking bers not to overreact,” said a WTO
publicly-listed company, but added further meltdown. official.
that emergency loans of 2 trillion Tepco said publicly for the first French Prime Minister Nicolas
MICROSOFT co-founder Paul Allen (top left) claimed that Bill Gates tried to deprive him of shares yen (£15bn) from the country’s time yesterday that four of the six Sarkozy is due to arrive in Japan
in the technology giant in its heyday in the 1980s. In an excerpt of Allen’s memoirs in Vanity banks were not enough to cover Daiichi reactors are beyond repair. today, becoming the first foreign
Fair, he claims Gates tried to cut him out of the company after he fell ill with cancer in 1982. costs in the wake of Japan’s worst The president of Tepco, leader to visit since the disaster ear-
Gates said in a statement that “my recollection of many of these events may differ from Paul’s”. nuclear accident, caused by the Masataka Shimizu, was yesterday lier this month that killed more
magnitude 9.0 earthquake and taken to hospital with stress-relat- than 11,000 people according to
tsunami on 11 March. ed symptoms. the latest official figures.

Lords call for probe


into audit oligopoly
REGULATION The Lords blasted the auditors’ industry and said the tone of it

BY JULIET SAMUEL role in the financial crisis as dis- was “unhelpful”.


playing a “dereliction of duty” and Despite objecting to the report’s
The “oligopoly” of Big Four audi- a sense of “complacency” that led language, however, many auditors
tors contributed to the financial to them signing off on accounts welcomed some of the Lords’ prac-
crisis, according to a damning that they should have questioned. tical suggestions, particularly for
report released yesterday by the The committee’s conclusions on more dialogue between audit
influential House of Lords the “culpability” of the Big Four in firms and regulators and for
Economic Affairs Committee. the crisis were roundly criticised direct consultation with share-
The committee, chaired by by the industry. holders about the appointment of
Conservative Lord MacGregor, The Institute of Chartered auditors.
called for a full probe into concen- Accountants in England and The report said that a “self-rein-
tration in the industry by the Wales (ICAEW) said: “We do not forcing cycle had helped to consol-
Office of Fair Trading, citing the accept that auditors contributed idate the dominance of the Big
fact that 99 of FSTE 100 companies to the severity of the financial cri- Four” and that it represents a “sys-
are audited by one of the big four sis. They did the job that they temic risk”, particularly in the
– Ernst & Young (E&Y), were expected to do.” banking sector because conflicts
PricewaterhouseCoopers (PwC), A Big Four source called the of interest mean that only three
Deloitte and KPMG. report a “broadside attack” on the are “active”.

BUY 1 Tullow in $2.9bn Uganda deal


GET OIL The deal leaves unresolved a fields, for $404m in taxes the gov-

BY HARRY BANKS massive tax dispute with the gov- ernment says is due on the sale of

2 FREE
ernment. Uganda’s energy minis- its interests to Tullow.
OIL explorer Tullow has agreed to ter Hilary Onek said the country Tullow said it expected this
sell stakes in its Ugandan opera- would receive a total of $472m in money would be repaid but it was
tions to France’s Total and China’s taxes from the farmdown deal. unclear if the companies will
CNOOC for $2.9bn (£1.8bn), bring- Tullow, however, said this figure receive any interest on the deposit
ing in big partners to develop the was calculated incorrectly and that while the Heritage dispute rum-
oil fields. it believes the total liability to be bles on.
EXCLUDES LIMITED EDITION & DRESS SHIRTS Tullow said it agreed to sell each “significantly less” than the $141m The matter is expected to take a
company a one third interest in it has agreed to deposit with the year to settle.
fields around Lake Albert, which government pending discussions Tullow said up to $10bn will be
Tullow estimates to contain 1bn on the matter. spent developing the field, partly
SHOP ONLINE AT barrels of oil, and potentially as Additionally, Tullow, Total and on the construction of a small
WWW.HAWESANDCURTIS.COM much as 3.5bn barrels. Tullow will
retain a third share.
CNOOC have agreed to deposit
$313m with the government while
refinery and a pipeline to the East
African coast – activities in which
OR VISIT OUR STORES NATIONWIDE Analysts said the price was in Uganda pursues Heritage Oil, the oil explorer has little experi-
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8 News CITYA.M. 31 MARCH 2011

The insurance man turns to banking


Lord Levene has turned Lloyd’s of n’t want to say you worked
there because it was a terri-
of new capital requirements on the
industry, Solvency II, is his most
“If you’ve got to tighten up bank regu-
lation that’s as maybe but don’t reck-
London into a market able to weather the ble place,” he said.
He has overseen nine
immediate concern.
Lloyd’s is still locked in negotia-
on that insurance is a systemic risk
because it isn’t.”
world’s worst storms, reports Alison Lock years of growth and globali-
sation, gaining licences to
tions with new European Union
insurance super-regulator the
Levene is set to step down from
Lloyd’s this December and will doubt-
operate in Brazil, the European Insurance and less be studying bank regulation
Netherlands, Occupational Pensions more closely next year as chair of
AFTER nine years at the helm of £2.18bn in catastrophe claims in 2010 China and Authority to ensure the high street bank NBNK, which
London’s insurance market Lloyd’s, it turned a £2.2bn profit and holds Russia among capital demands levied launched last June.
its chairman Lord Levene is singularly £19bn in reserves. For Levene, it others. He has against different risks NBNK has been spearheaded by
unshockable even in the face of disas- marks a remarkable turnaround also restored are fair. But he’s amused Levene and other finance heavy-
ters on the unprecedented scale that from his arrival in November 2002. order to its and amazed by the farci- weights as a customer-friendly and
struck Japan. Peter Levene was made Lord Levene affairs by cal scale of the bureau- transparent bank.
The earthquake and tsunami of Portsoken in 1989 after a career introducing cracy it creates. It aims to buy branches sold by
which hit the northeastern coast of building United Scientific Holdings t h e “They have worked bailed-out lenders such as RBS as part
Japan on 10 March will cost insurers into a top defence contractor and Franchise out the regulator here, of EU regulatory demands. Levene
$20bn-30bn (£12.5bn-18.8bn), but advising ministers from Michael Board and the Financial Services confirms a package of 600 for-sale
Levene doesn’t think the loss is big Heseltine to John Major on areas such the Franchise Authority, is going to get Lloyds Banking Group branches is in
enough to stretch the capacity of the as defence, trade and efficiency. Performance something like 10,000 NBNK’s sights.
market. He has been a City stalwart since, Directorate. sheets of paper because of “Lloyds Banking Group has
“The Japan earthquake, as ghastly as deputy chairman of investment Today Lloyd’s is it – it has just become a huge appointed advisers to help them put
and horrible as it is, is a large event bank Wasserstein Perella, senior “much more disci- paper mound,” he said. the package together and help pro-
for us, but it’s not mega stupendous,” adviser at Morgan Stanley and vice plined”, he says, “Does it mean it ought to be vide an interim funding package for
he says, comparing it to the destruc- chairman of Deutsche Bank in returning to its simplified? Yes. Will it be them to make it balance, and then we
tion wreaked by hurricanes Rita, London. He served as the City’s Lord profit figure: “Five simplified? I don’t know.” will be a bidder for that package
Katrina and Wilma in the US in 2005 Mayor in 1998-99. or six years ago It’s a problem being along with anyone else who chooses
or 2001’s World Trade Centre attacks. But he’s best known as a fixer: the that would have played out on a larger scale to bid,” he said.
In both of those years, the stagger- man who delivered the Docklands been an all time in the financial services sec- Looking back, while he’s pleased to
ing losses borne by insurers saw pre- Light Railway and Canary Wharf proj- record.” tor as a whole, and insurers have achieved financial turnaround
mium rates shoot up, but Japan’s ects against the odds, and he’s Levene’s role at have had to battle to make reg- at Lloyd’s, he says it is the improve-
crisis hasn’t spooked the market in worked the same turnaround magic Lloyd’s has also put ulators understand their ment to its reputation he hopes to be
the same way, he says. at Lloyd’s. him in the front line work’s difference to more remembered by.
“It is not in that league,” he said Levene was parachuted in after five of clashes with gov- risky investment banking. He says: “We’re now one of the best
calmly. “We will probably see rates consecutive years of losses, and ernments and he has “Insurance is not banking; regarded businesses in the UK and
creep up, they ought to, but we will admits the market was disliked at the become an outspoken insurance had a good crisis; it our staff and the market are very
have to wait and see.” time. “When I got here…if you critic of burdensome didn’t get into a terrible mess, proud to be associated with Lloyd’s.
Indeed, Lloyd’s is now so financial- worked at Lloyd’s it was like more regulation. so don’t throw the baby out To the extent that I have been able to
ly strong that despite paying out recently you worked at RBS – you did- The torturous birth with the bathwater,” he said. drive that, I consider that a big win.”
CITYA.M. 31 MARCH 2011 News 9

Badly written
Disasters cut regulations cost
Lloyd’s profits insurers $25bn


INSURANCE

INSURANCE revealing a £520m loss on underwrit- INCONSISTENT regulatory practices in


BY ALISON LOCK ing in its UK motor division. different jurisdictions are costing glob-
“What we have seen in the motor al insurance firms an extra $25bn
LONDON’S insurance market Lloyd’s businesses in Lloyd’s is just a micro- (£16bn), research yesterday found.
paid out more than £2bn in global cosm for what is happening across the Europe, the US and China are all
catastrophe claims in 2010, pushing its UK. The increase in claims has caught implementing new regulation to
profit down 43 per cent to £2.2bn, it all insurers unaware,” he said. Lloyd’s, make insurers hold more regulatory
said yesterday. home to 52 UK insurers, said it paid capital, such as Solvency II. But greater
It said the fall was to be expected in a claims worth $1.3bn from last March’s convergence between regimes could
year that saw net claims of £2.18bn and earthquake in Chile; $600m from the cut billions from insurers’ compliance
the third-highest level of catastrophe quake to hit New Zealand last costs, according to a report from
losses in 15 years apart from 2001’s 9/11 September; and $275m from the KPMG.
attacks and hurricane Katrina in 2005. Queensland floods in Australia last “There are bespoke capital, invest-
Lloyd’s chief executive Richard Ward December. ment and governance regulations
said estimated losses relating to Japan’s It also paid out $386m from the which require different levels of finan-
earthquake and tsunami will only be destruction of the Deepwater Horizon cial reporting depending on each juris-
released on 20 April after it received rig in the Gulf of Mexico but said it diction,” said KPMG director Rob
data from all its members. believes claims may reach $600m over Curtis. “A significant amount of
But finance director Luke Savage time. money is being spent on possible
said Lloyd’s insurers had enough capi- Lloyd’s wrote £22.6bn of gross premi- duplication and there is no consistent
tal to withstand a $64bn (£40bn) ums across more than 200 territories, measure of insurers’ financial solven-
Japanese quake loss – far above the $20- up 2.9 per cent on 2009. Its combined cy.” Curtis supports ComFrame, a “sin-
$30bn estimated cost of the disaster. ratio – a key measure of profitability – gle rulebook” framework from the
Ward also hit back at no-win-no-fee rose to 93.3 per cent from 86.1 per cent International Association of Insurance
car crash claims and welcomed govern- in 2009. Numbers under 100 mean the Supervisors, to harmonise regulation,
Insurers have been hit by Japan’s devastating earthquake Picture: REUTERS ment plans to reform the sector after firm is operating profitably. which he developed in 2008.

Hiscox: Japan loss BE


THERE
could hit $150m FOR
INSURANCE in Australia in January this year, while LONDON

BY ALISON LOCK the February earthquake that


destroyed large areas of Christchurch
LLOYD’S insurer Hiscox expects up to in New Zealand would cost it £15m.
$150m (£94m) in estimated losses Critically, chief underwriting offi-
from Japan’s devastating earthquake cer Robert Childs said the losses
and tsunami, it said yesterday. would not affect Hiscox’s own rein-
Hiscox said it could expect losses of surance cover – other companies’
between $60m and $150m based on insurance of its risk exposure – leav-
its exposure to an event that caused a ing its protection against large losses
$24bn loss to the global insurance intact.
industry. Its average loss within that “These events will only minimally
range would be $100m. impair our own reinsurance pro-
“Any estimate of the insured loss gramme,” he said, adding that it has
from the very tragic and severe earth- seen “significant increases in rates for
quake in Japan is still at an early stage the affected regions and expects this
so considerable uncertainties exist,” it pressure to become widespread.”
said in a trading update on catastro-
phes in the first quarter of the year. ANALYSIS l Hiscox
Risk modelling agency AIR last
400 p
week revised its estimate of the indus-
try loss from Japan’s disasters to 383.00
390
30 Mar
$20bn-$30bn from $15bn-$35bn.
Hiscox said the losses from Japan
would be through its underwriting of 380
other reinsurance, rather than direct
insurance or reinsurance. 370
It added that it estimates it will VOLUNTEER A
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10 EDITED BY CITYA.M. 31 MARCH 2011
HARRIET DENNYS
Got A Story? Email
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on Twitter: @citycapitalist

CHILL OUT Nothing


daunts Prince
FOR PRINCE Harry, but his
Arctic trip is
ON POLAR being cut
MISSION short to get
home in time with guests from the UK government and
COLD comfort for Prince Harry, who has City institutions as they admired the
arrived at Base Camp at Svalbard in for William’s installation by Chinese artist Ai Weiwei.
Norway to join the Walking for Wounded The mood at the party was upbeat, with
team before they set off for the North Pole wedding Ricardo Espirito Santo Salgado, vice-chair-
tomorrow on April Fool’s Day. man and president of BES Group (above)
But Harry’s training regime under and Jose Maria Espirito Santo Ricciardi,
expedition leader Inge Solheim is no joke CEO of Espirito Santo Investment Bank,
– on Wednesday he spent the day cross- outlining the bank’s global prospects fol-
country skiing and yesterday he tested lowing the acquisition.
immersion suits in Arctic waters. Harry chills out at the Walking for Wounded Base Camp in Norway before his brother’s big day But with Portugal looking set to default
The Capitalist was unable to speak to on its national debt without an EU
Harry because he was about to get on a together at radio business GCap, now Gina Miller (right), founder of Miller bailout, let’s hope Espirito’s confidence
bus, so instead it fell to the charity’s co- Global Radio. “The time off was all agreed Philanthropy, told The Capitalist: “Music is doesn’t prove to be misplaced.
founder, Simon Daglish, to provide an before I joined [ITV],” he assured us. what feelings sound like, as someone once
update. “Nothing daunts Harry,” said said. But for many of us it also lifts our
Daglish, who added that the young Royal spirits and keeps us sane.” ON THE FENCE
is “getting on famously” with the rest of
the team – although his stay will be brief
SANITY SAVER Specialist insurer Beazley is dispelling the
CITY big hitters sought an oasis of calm myth that fencing is “difficult to under-
as he has to fly home on 6 April in good
time for his brother’s wedding.
away from the financial maelstrom at last
night’s concert hosted by Miller
HIGH SPIRITS stand” by holding a series of demonstra-
TO Tate Modern for cocktails to mark tions of the sport in the Olympic run-up.
Spare a thought for Daglish’s col- Philanthropy at the Cadogan Hall. Banco Espirito Santo Group’s expanded The first – where City workers can
leagues holding the fort back at his Spotted being soothed by the perform- presence in London after the Portuguese watch Olympic hopefuls Laurence
employer ITV though, after Daglish set off ances from Derek Paravicini, the world- bank bought a majority stake in UK stock- Halsted, Tom Bennett and Chrystall Nicoll
for the Arctic just one week after joining famous autistic pianist known as “the broker Execution Noble. – takes place between 5.30pm and 7.00pm
the broadcaster as its new director of mul- human iPod”, were Edward Horner, man- As a corporate sponsor of the Tate, today. Drop by Leadenhall Market for
tiplatform and partnerships. aging director of Eden Rock Capital Espirito Santo held the event in the coaching tips and – for anyone feeling
Fortunately, Daglish’s friendship with Management; Garfield Ramsay, director Turbine Hall, where representatives of the more adventurous – the chance to clash
his new boss at ITV, Fru Hazlitt, dates way at Credit Suisse; and Stephen Brawn, prin- Portuguese Embassy in London and the swords with your colleagues in the win-
back to the days when the pair worked cipal of Locus Capital Consulting. Portuguese Chamber of Commerce mixed ner-stays-on competition.
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CITYA.M. 31 MARCH 2011 News 11

Leon Black sees Apollo lose value on first day


APOLLO boss Leon Black, who The news will, however, still 5.8 times its 2010 adjusted income. His art collection is
founded the private equity giant in come as a disappointment after Black, a former banker with the envy of curators
1990, is a man well used to the trials Apollo pulled off a remarkable IPO, Drexel Burnham Lambert, is known around the world, taking
and tribulations of company stocks. pricing at the top of its indicative as a charismatic leader with an eye in everything from past
During the financial crisis his range and selling an additional 13 for a deal and an appetite for risk. masters to impressionists.
personal fortune is believed to have per cent of its equity. It raised a In the lead-up to the financial cri- The Harvard graduate is
plunged from $4bn (£2.5bn) to $1bn total of $565m – a feat made all the sis he invested $8.1bn of equity in married with four children.
as shares in Apollo and other invest- more impressive by the tough IPO 10 buyouts. But just as his personal Advising his firm on its
ments rode stormy waters. market. The sale values the whole fortune took a hammering after IPO were Goldman
Bearing this in mind he will not company at $7bn – more than some 2008, so did his portfolio, and some Sachs, JP
be overly worried by his firm’s expected but still far behind fellow of the assets, particularly property- Morgan and
shaky performance in its first day publicly listed private equity groups based ones, are still in recovery. Bank of
trading, with Apollo falling 2.1 per such as KKR at $12bn and Most, however, have bounced America
cent in afternoon trading on its Blackstone at around $21bn. back strongly, giving Black the con- Merrill
maiden day yesterday. The IPO priced Apollo at about fidence to take Apollo to market. Lynch.
LEON BLACK

European venture capital


funds more than double
strongly to £1.9bn, after January’s total

FUND MANAGEMENT
BY JULIAN HARRIS of £900m.
February’s figure matches the
MORE than double the number of monthly average of £1.9bn for the pre-
European-focused venture capital vious 12 months, and is £300m higher
funds are raising capital this year than on the same time last year.
last year, research firm Preqin has said. “Equities were again the highest
There are now a total of 89 funds, selling asset class in February, led by
looking to raise $13.8bn (£8.6bn). Last funds investing in overseas equities,”
year, 34 European-focused venture said IMA director of markets Jane
funds closed on $5.8bn, Preqin found. Lowe.
Meanwhile, strong equity markets She added: “The top three selling
saw fund sales hit a record for North equity sectors were the global, North
America last month, the Investment America and Japan sectors.”
Management Association (IMA) said With net retail sales of £272m, the
yesterday. sterling strategic bond sector was the
Net retail sales for the North highest selling during February.
American sector reached £222m, the Total funds under management in
IMA revealed February came in at £575.9bn.
Total net retail sales sprung back WEALTH MANAGEMENT: P24

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12 News CITYA.M. 31 MARCH 2011

Lloyds lures Horta-Osorio


with £13.5m pay package
each year – adding up to £880,000 share and cash awards which he had

BANKING
annually. His maximum bonus for the forfeited upon leaving his previous job
BY KATIE HOPE year would be 225 per cent of basic as the head of Santander UK with
THE cost of wooing new chief executive salary – around £2.4m. And he has shares worth around £4.1m – none of
António Horta-Osório to Lloyds been awarded shares worth 420 per which vest immediately – and a cash
Banking Group was unveiled yesterday cent of his base salary (£4.6m) for the payment of £516,000.
as its annual report revealed his total first year of his long term incentive In addition, under the terms of the
package was worth up to £13.5m. plan – more than a quarter higher Project Merlin agreement between
His annual salary is £1.06m, than the 300 per cent limit imposed on the banks and the government, the
increased from predecessor Eric other board executives – but a sum report also lifted the lid on the scale
Daniel’s £1.03m outgoing salary to Lloyds said was “essential to the suc- of rewards outside the boardroom of
reflect market rates. An additional cess of the recruitment process.” the bank. Five senior executives, like-
sum worth up to three quarters of his Lloyds added that Horta-Osório ly to be dealmakers or traders,
salary will be pumped into his pension would also be compensated for various received between £1.4m and £4.8m.

António Horta-Osório’s package is worth up to £13.5m Picture: Micha Theiner/City A.M.

Co-operative
profit jumps
after merger

BANKING cent.
BY JULIET SAMUEL The insurance business was hit by
snow-related claims “following the
CO-OPERATIVE Financial Services exceptionally cold conditions in the
saw pre-tax profit rise 5.5 per cent early months of 2010, increasing the
last year to £53.3m, with the bank cost of claims by 9.7 per cent on
attributing a steep drop in costs to 2009.
synergies after its 2009 merger with Overall, however, insurance sales
Britannia. grew, with general insurance seeing
But earnings were dented by a net earned premiums rise 7.1 per
sharp rise in claims due to weather- cent.
related chaos early last year, with the The vast majority of the bank’s
bank estimating a claims cost of earnings came from its corporate
£7m as a result. and markets business line, where
Overall operating costs fell 36.8 operating profits soared by 116.4 per
per cent to £338m and the company cent to £80.7m.
said that it is on track to meet its tar- The bank reported that its newly
get of reducing costs following its founded asset management busi-
acquisitions. ness, set up to invest money in its
Impairments fell dramatically by pensions and insurance funds “is in
41.1 per cent to a cost of £42m last a break-even position”.
year, which the Co-op attributed to The annual results released yester-
“improved arrears collection process- day follow the revelation in
es and tightening of credit-risk score- Monday’s City A.M. that the Co-op has
cards”. been chosen by the government to
The bank reported that its core head up the administration of the
tier one capital ratio remained flat Reclaim Fund, an asset manager for
at 8.7 per cent – above the Basel III dormant bank accounts that will
minimum requirements of seven per fund the Big Society Bank.

Diamond: Banking transition will


sort the wheat from the chaff
several regulatory bodies. He did not

BANKING
detail what the resolution plan would
BARCLAYS chief executive Bob look like.
Diamond has warned that many On the changing landscape of the
banks will not survive the transition to industry, he said: “We’ll see a diver-
“the new environment” of higher cap- gence in the industry between those
ital and liquidity requirements. that are able to respond… and those
Speaking at a conference hosted by that are not. The gap between winners
Morgan Stanley, Diamond also said and losers will become greater than
that Barclays is “at an advanced plan- ever.” He said that Barclays’ “universal
ning stage” with its “living will” or res- bank” model of retail and investment
olution plan, in cooperation with banking would be key to its success.
CITYA.M. 31 MARCH 2011 News 13

Firms cool over


BAA must sell
IN ASSOCIATION WITH
CITY VIEWS: SHOULD BAA BE
FORCED TO SELL TWO AIRPORTS?
coalition’s plans Interviews by Phoebe Torrance and Eric Wilkens

for UK aviation Save or Borrow peer to peer at RateSetter.com

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two airports

AVIATION

BUSINESSES were yesterday unenthu- AVIATION rial change in circumstances” since


siastic about government proposals “BAA shouldn’t have to sell because it BY PHOEBE TORRANCE the Commission’s report was pub-
on the future of aviation in the UK, should have to improve Heathrow first lished in March 2009.
which reiterated the coalition’s oppo-
sition to any airport expansion what-
and then sort out the problems with the THE Competition Commission yes-
terday again ruled that BAA should
The news about the forced sales
came on a bad day for BAA, which is
soever. other airports.” sell Stansted and either its owned by Spanish infrastructure
The document offered several possi- Edinburgh or Glasgow airports, in a company Ferrovial.
bilities for improving aviation in the decision that is sure to spark a bid- Earlier, a confidential interna-
UK, such as making better use of the RICHARD LEY | INCISIVE MEDIA ding war for the airports. tional table rating the aviation
country’s existing airport capacity. The decision backs one made in industry had ranked Heathrow 99
But David Frost, director general of March 2009 which BAA successfully in a league table of the world’s
the British Chambers of Commerce, “Terminal Five is great, but the others are appealed on a technicality, but the main airports, behind the likes of
said the document “fails to set out a difficult to get to and confusing. It’s fair for court of appeal yesterday reinstated hubs in Calcutta, Dublin and
clear plan as to how we can build our
aviation capacity in the months and
BAA to have to sell – it would be good to its original ruling.
BAA, which owns Heathrow,
Humberside.
Ryanair, Europe’s biggest airline,
years ahead”. see others create some competition.” already sold Gatwick in October welcomed the Commission’s deci-
He added: “The vital role of aviation 2009 for £15bn to investment fund sion.
in boosting the economy should not
be underestimated. Britain’s status as
JOSEPH CASSIDY | RSA Global Infrastructure Partners.
Competition Commission chair-
It said: “Today is a great day for
low fares and competition and a
an international business hub is man Peter Freeman said: “We bad day for monopolies.”
under threat while our European remain convinced that the original The airline added: “We welcome
competitors are leading the way.” “Heathrow comes out very well in compar- decision to require BAA to divest the Competition Commission’s deci-
The Tory-Liberal Dem coalition is ison to other airports, especially abroad. It three airports is the right one for sion to proceed with the break-up of
adamant that it will not give the is fair that BAA has to sell two airports passengers and airlines.” the BAA airport monopoly, and
green light to any new runways or air- But BAA argued against the rul- eagerly await the sale of Stansted
ports. because there is a lack of competition.” ing saying: “There has been a mate- and Glasgow airports.”

Losses at Qantas as
routes and jobs go  
AVIATION



BY ERIC WILKENS capacity on several popular routes.


The airline plans to cut domestic
RISING fuel prices and a string of nat- capacity growth in the second half of
ural disasters that resulted in $140m the current financial year to eight per
(£87.2m) in losses have forced cent from 14 per cent and interna- ²
6WUDWIRUGWR&DQDU\:KDUI
   
Australia’s Qantas Airways to cut
back on capacity and management.
tional capacity growth to seven per
cent from 10 per cent.
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Brent crude futures for May delivery earnings guidance, but said the poten-       
rose 36 cents to settle at $115.16 yes- tial impact on earnings in the second-
terday as expectations for a quick half included A$45m from the Japan     
restoration of Libyan oil to the market earthquake and tsunami, A$60m    
were cut back. from flooding in Australia’s
Qantas chief executive Alan Joyce Queensland state, A$20m from  
said he was aiming to cut manage- Queensland cyclones and A$15m from

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ment headcount as well as reduce the recent New Zealand earthquake.       
  

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CITYA.M. 31 MARCH 2011 Economics 15

Budget will worsen inflation Labour market recovery


CPI. Some economists expect infla- es at three per cent or higher,” IDS
boosts optimism on US

UK ECONOMY
tion to fall back towards the Bank of said.
BY JULIAN HARRIS England’s two per cent target when Another survey of wages released
BUDGETARY changes for the coming the VAT effect drops back in January today shows a 2.2 per cent rise across Barclays Capital Research.


US ECONOMY
fiscal year will exacerbate the UK’s spi- next year. Inflation hit 4.4 per cent in the UK for the 12 months to February. Separate data yesterday showed
ralling inflation, it was revealed yes- February, and is expected to rise fur- However, this is still the weakest AN ADP report yesterday showed that applications for US home mortgages
terday. ther, towards five per cent. rise in wages for 10 years, according to private employers added 201,000 jobs tumbled last week as higher interest
Measures such as higher alcohol Inflation expectations could be the Chartered Management Institute. in March – slightly below consensus rates sapped demand for loan refi-
and tobacco duty will add 0.29 per driving stronger pay increases, report- expectations for an increase of 208,000 nancing. Another report showed the
cent to the consumer price index (CPI) ed today by Incomes Data Services FAST FACTS | UK INFLATION LEVELS jobs. number of planned layoffs at US firms
in the fiscal year 2011-12, and 0.37 per (IDS). Small and medium firm payroll fell in March after spiking up the
cent to the retail price index (RPI), the Seven out of every eight pay settle- ● Consumer price inflation hit 4.4 per cent in growth remained strong in March, month before.
Office for National Statistics said. ments recorded between December February. adding 102,000 and 82,000 jobs, while Employers announced 41,528
However, the inflation effects of 2010 and February 2011 were at or ● The retail price index reached 5.5 per cent. large firms added 17,000 jobs. planned job cuts this month, down 18
budget changes are far lower than in above two per cent, IDS revealed. ● The tax and price index jumped to six per “This indicates continued momen- per cent from February, according to
2010-11, when hikes such as the VAT “And most of the April deals record- cent – it’s highest level since April 1991. tum in the pace of labour market the report from consultants
rise put an estimated 1.77 per cent on ed thus far by IDS have set pay increas- recovery,” said Nicholas Tenev of Challenger, Gray & Christmas.

Rebound in UK FISHER: RESERVES-AVERAGING MUST WAIT NEWS | IN BRIEF


IMF: Japan quake will knock GDP
Japan’s annual growth forecast was cut
from 1.6 per cent to 1.4 per cent by the

services after International Monetary Fund (IMF) yes-


terday, following the devastating earth-
quake. The IMF also lowered the outlook
for the US, reducing its 2011 forecast to
2.8 per cent, from three per cent. Indian
growth prospects were also reduced

winter freeze from 8.4 per cent to 8.2 per cent. In the
Eurozone, the IMF predicts growth of 1.6
per cent, yet dragged down by sluggish
growth in Italy, expected at only 1.1 per
cent for the year.

Gambling restrictions criticised


1.1 per cent. The UK is losing out on billions of pounds

UK ECONOMY
“Without the effect of the weather, of investment through its “irrational”
BY JULIAN HARRIS
the underlying output of the service clampdown on the gambling industry.
THE UK economy bounced back sector would have been broadly flat in Harsh gambling regulations are also
strongly at the beginning of the year, December and January,” it said. resulting in pub closures, and, according
fresh data suggested yesterday. However, Saunders expects growth to the Institute of Economic Affairs, do
The service sector – which accounts in the first three months of 2011 to nothing to reduce gambling addiction.
for over three quarters of GDP – more than recover the half per cent
expanded by 1.3 per cent in January, decline at the end of 2010. “At this Drop in German business morale
compared to December. The rebound stage, our forecast is for quarter-one German business confidence declined for
marked the sharpest monthly growth growth of 0.6-0.8 per cent,” he said. the first time in nine months in March,
in services since July 2002. The index of services was up by two the German think tank Ifo said yesterday
Meanwhile, there was some relief per cent compared to January 2010, – although the markets were boosted by
for the struggling British high street, the ONS revealed, largely driven by the drop being less than expected. While
with 42 per cent of retailers reporting business services and finance, which Ifo’s expectations index fell to 106.5 from
that annualised sales rose in March, were also up two per cent. 107.9 in February, credit constraints are
according to the Confederation of While the positive balance of 15 per not a problem for German industry,
British Industry (CBI). cent of retailers reporting a rise in remaining low, Ifo said.
“The data suggests that the econo- sales surprised economists, the CBI
my has returned to positive growth in survey revealed downbeat responses to Eurozone sentiment suffers a fall
the first-quarter, after the 0.5 per cent other questions. Eurozone economic sentiment dropped
drop in GDP recorded for the fourth- Four from ten retailers said sales 0.6 points to 107.3 in March, a European
quarter of 2010,” said Citigroup’s were poor for this time of year, result- Union survey showed yesterday. Among
Michael Saunders. ing in a negative balance of -24 per the seven largest member states, Poland
The economy shrank by half a per cent – the lowest figure since August (-3.1 points), Spain (-3 points) and
cent in the final three months of 2010 2009. Germany (-0.7 points) experienced drops.
due to the effects of the winter freeze, Retailers also expect sales to under- The Netherlands (+3.1 points) and the UK
the Office for National Statistics (ONS) perform against seasonal norms in (+2.7 points) both recorded increases.
said yesterday. April. “Sales growth picked up slightly THE Bank of England is only likely to return to its reserves-averaging system of manag-
The sharp return to growth in serv- for retailers compared with last ing interbank lending rates after it has begun normalising interest rates, senior Bank Inflation creeps up in Belgium
ices partly reflects recovery from the month, but look beneath the surface policymaker Paul Fisher (pictured) said yesterday. The requirement on banks to set tar- Belgian inflation rose from 3.4 per cent
snow-affected December, the ONS said and conditions remain tough on the gets for the average cash reserves they intended to hold with the Bank were put on hold last month to 3.5 per cent this month,
yesterday. In December, services fell by high street,” the CBI said. when quantitative easing starting boosting the money supply in March 2009. official data showed yesterday.

House prices turn upwards in London MP: Financial crisis was


yet continue to slump in rest of the UK due to weak competition
ply, the report said. George Osborne will fail to revive the end a situation where banks are “too

HOUSING

BANKING
BY JULIAN HARRIS “Central London saw some of the housing market, the Council of big to fail,” and instead can fail and
highest price rises with a one per Mortgage Lenders (CML) said today. BARRIERS to entry must be cut in exit safely, the report says.
LONDON is the first UK region to reg- cent increase over the month,” said “The new FirstBuy scheme is less order to promote competition in the Competition authorities have
ister a rise in house prices for eight Hometrack’s Richard Donnell. generous than the one it replaces, banking sector, former City worker been too junior for too long,
months, the Hometrack monthly However, outside London, and has the capacity to help only Andrea Leadsom MP will say today. Leadsom will argue, calling for a
national housing survey announced Hometrack’s research mirrored around one per cent of first-time buy- A lack of real competition was a new financial competition commis-
today. other recent surveys, with prices ers in a ‘normal’ year of activity,” the key cause of the financial crisis, as sion to carry out investigations.
While prices across the UK fell by remaining under downward pres- CML said. market concentration hindered the The authority would also “ensure
0.1 per cent in March, in the capital sure. “However, other announcements free entry and exit of banks, products and services offered are
they rose by 0.2 per cent. All other regions recorded price by the chancellor, albeit of a more Leadsom argues in a report for the themselves subject to competition,”
The upturn was driven by a 25 per falls in March, except for the south technical nature, could help improve Centre for Policy Studies. it says.
cent increase in demand, over a two- west, where prices stagnated. mortgage funding in the long run,” it The Financial Conduct Authority Leadsom is currently a member of
month period, and tightening sup- The recent Budget from chancellor conceded. (FCA) should also take measures to the Treasury Select Committee.
16 Consumer News CITYA.M. 31 MARCH 2011

Suit hire
Dixons warns sales boost
on profits for Moss Bros
second time


RETAIL
BY ALISON LOCK
FORMAL menswear retailer Moss
Bros has narrowed its full-year under-
lying losses thanks to a record result
RETAIL gle roof. in its suit hire division.

BY DAVID CROW Net debt is expected to stand at The firm posted an underlying loss
£250m at the end of the current of £2.7m for 2010, compared to
DIXONS Retail, the owner of Currys financial year in April, up from £3.9m a year earlier, after like-for-like
and PC World, yesterday said it would £215m at the half-year stage in sales rose by nine per cent.
slash costs as it issued its second prof- November. The firm has a covenant But its full-year pre-tax loss
it warning in three months. test with its lenders in October. Dixons boss John Browett is rolling out new “big box” stores Picture: REX widened to £7.5m from a loss of
The firm said consumer confidence Elkjop, the firm’s Nordic brand, £6.6m in 2009, after it took a £4.8m
had deteriorated since the start of the offered a single glimmer of hope, exceptional charge.
year, especially in the UK and Ireland,
hitting sales of big ticket electrical
items such as flat screen televisions
and laptops.
with sales up nine per cent in the 11
weeks to 26 March. Revenues have
jumped some 30 per cent over the last
two years.
Browett is in race against time Suit hire revenues rose by 11 per
cent, after the collapse of rivals like
Suits You and Speciality Retail
Group, the parent of Young’s Hire.
Full-year profits in the year ending Shares in Dixons plunged on the JOHN Browett’s bid to save Dixons it also needs to preserve cash to sur- Clothes sales were up nine per cent.
30 April 2011 are now expected to be news, closing 18.3 per cent down at by rolling out new “big box” stores vive in what is going to be an The firm said sales growth had fall-
£85m, around £20m less than it fore- 13.69p. was always going to be a race increasingly tough retail environ- en to eight per cent in the first two
cast in January. Other retailers also suffered on the against time. No-one doubts that ment, especially for sellers of “nice months of the new financial year but
Sales at stores in Britain and news, as fears that the rise in the VAT the new format – which combines to have” discretionary items like attributed this to tougher compara-
Ireland – which account for almost and slumping consumer confidence more product choice with lower electricals. tives.
half of profits – fell 11 per cent in the would cause a fresh nightmare on the staffing costs – was the only way to Yesterday’s trading update sug- The narrower loss follows a
11 weeks to 26 March, the firm said. High Street. Home Retail Group, Kesa, go. If the electricals retailer wants gesting an 11 per cent drop in sales turaround plan devised by new chief
Dixons said it was on track to slash Mothercare, Marks & Spencer and Next to keep afloat in a world increasing- wipes around £20m off annual prof- executive Brian Brick. Earlier this
costs by £50m in the current financial fell between five and two per cent. ly dominated by discounters and its (although that is before further month, he sold the firm’s 15 Hugo
year and is hoping to save a similar online retailers, it needs to sell cost cuts). That makes Dixons look Boss stores for £16.5m to free up cash
amount in each of the next three ANALYSIS l Dixons Retail more lines at lower prices. But if increasingly vulnerable, especially for investment.
p
years. 24 Browett’s turnaround were to be a when its covenants are tested in Moss Bros, which also trades under
It also said it would consider a sale success, it would have had to be October. We think the strong eco- the Savoy Taylors Guild and Cecil Gee
of its 34 Spanish stories, removing
22 13.69 completed before the debt-fuelled nomic headwinds will prove too brands, said it would continue to buy
20
30 Mar
£5m of losses from its underlying consumer hangover kicked in. Sadly much for Browett’s good intentions. Hugo Boss merchandise on a whole-
profit before tax in 2010-11 and 2011- 18
for shareholders, it wasn’t. Investors shouldn’t wait around to sale basis to sell in its remaining
12. Now Dixons is between a rock find out. stores.
Capital expenditure will be cut by 16 and a hard place. If it scales back Altium Securities analysts said the
£40m to £160m, although Dixons said capital investment any further, it result was slightly ahead of expecta-
it would continue to invest in new
“big box” stores that combine its PC
14

12
will be forced to put the skids on
the company’s transformation. But
BOTTOMLINE tions and its year-end cash position of
£6.9m was £2.1m better than had
World and Currys brands under a sin-
10 Jan 28 Jan 17 Feb 9 Mar Analysis by David Crow been expected.

Irish austerity cuts take a bite out


of Domino’s Pizza as growth slows
CONSUMER franchise basis, said its overall per- a year dropping by 10.5 per cent.

BY HARRY BANKS formance had been dragged down Shares in Domino’s, which have
by falling sales in Ireland where an lost a quarter of their value since
BRITAIN’S biggest pizza delivery EU bailout, record austerity meas- January having trebled in value over
firm Domino’s reported slower sales ures and a prolonged downturn the previous two years, closed down
growth, hit by a slump in trade in have severely hit consumer confi- 9.3 per cent at 404.6p, having earlier
Suits from £175 & Jackets from £125
Ireland, sending its shares down 9.3 dence. been as low as 394.9p.
per cent yesterday. “The company’s total like-for-like “A check in like-for-like sales
The company, which operates the figure is increasingly affected by the growth has been exacerbated by
Shirts £30 or 4 for £100 British and Irish franchises of the performance of the Republic of negatives in Ireland and the VAT
global delivery brand, said sales at Ireland stores, where trading condi- increase,” said Peel Hunt analyst
Ties £20 or 3 for £50 its 608 shops open more than a year
grew by 4.2 per cent in the 13 weeks
tions have continued to deteriorate,”
Domino’s, which has 48 shops in
Paul Hickman, who downgraded
the stock to “hold” from “buy”.
Trousers £50 & Coats from £175
to 30 March, compared with a 4.7 Ireland, said in a statement. Domino’s has so far benefited
per cent increase in the first seven Sales at shops in the UK open from the downturn, with cus-
weeks. more than a year grew by 5.5 per tomers staying in and ordering take-
Domino’s, which operates 672 cent during the period, with sales at aways rather than eating out in
New lines added daily shops in Britain and Ireland on a shops in Ireland open for more than restaurants.

Starts Thursday 31 st March 2011 NEWS | IN BRIEF


Finishes Tuesday 5 th April 2011
Fresh fears for Saab’s future Signet UK sales fail to shine Burberry boost for Nomura
The owner of struggling Swedish car Signet Jewelers reported a higher- The iconic clothing group Burberry has
Shop 14, The Old Truman Brewery maker Saab sought to reassure than-expected quarterly profit but said hired Nomura, the Japanese bank, to be
investors about its finances yesterday its British stores were struggling. one of its corporate brokers. Nomura
91 Brick Lane, London E1 6QL after a dispute over non-payment to Signet reported net income of $105.4m will advise Burberry alongside Morgan
suppliers interrupted production for (£66m) for the fourth-quarter, down Stanley and Bank of America Merrill
Tel: 020 7434 2001 two days running. The stoppages yes- from $115.5m a year earlier. Sales at Lynch. The appointment will be a boost
terday created fresh uncertainty over US stores open at least a year were up for Nomura which also advises Tesco
All major credit cards accepted Saab, whose long-serving chief execu- 11.4 per cent so far in the first-half of and Invensys. Nomura’s team com-
tive unexpectedly announced his retire- the current quarter. But Signet, which prised of Ed Matthews, Ed Peel, Ed
Terms & Conditions apply
ment last week. The company said operates British chains H Samuel and Boyce and Adam Wright. Burberry isn’t
production would resume today and Ernest Jones said its UK like-for-like known for its corporate activity but
said a dispute with a key supplier, trans- sales fell 2.9 per cent in the fourth- winning such a prestigious account will
port firm Schenker, had been resolved. quarter and are continuing to tumble. be seen as a coup.
Don’t miss Canary Wharf’s
sensational style weekend
with fashion shows featuring
all the latest trends plus
amazing in-store offers

FASHION SHOW TIMES:


Friday 1st April JUBILEE PLACE: 12.30pm & 5.30pm CANADA PLACE: 1.30pm & 6.15pm
Saturday 2nd April CANADA PLACE: 12noon, 2pm & 4pm JUBILEE PLACE: 1pm, 3pm & 5pm
Sunday 3rd April CANADA PLACE: 12noon, 2pm & 4pm JUBILEE PLACE: 1pm, 3pm & 5pm

EXCLUSIVE OFFERS*:
30% off 15% off
Crabtree & Evelyn (on purchases of £35 or more) Carat*, Cecil Gee (exclusions apply), French Connection,
Gap, Karen Millen, L’Occitane (on purchases of £25 or more),
20% off Neal’s Yard Remedies (on purchases of £25 or more),
Aquascutum, Aspinal of London, Austin Reed, Runners Need, Vision Express (complete spectacles only),
The Body Shop (on purchases of £25 or more), The White Company, Yoomoo Frozen Yoghurt
David Clulow Opticians, Dune, Fiorelli, Hackett,
Hobbs, Jaeger London, Jones Bootmaker, 10% off
Kate Kuba (15% off Ugg Australia), Artisan Fine Art (on select collections), Brown’s London,
L.K. Bennett (exclusions apply), Mint, Myla, Charles Fish, Charles Tyrwhitt, Choice (exclusions apply),
O Spa, Oasis, Phase Eight, Reebok Sports Shop, Church’s English Shoes, Freedom Back Clinics,
Sean Hanna, Sri Nam (valid on Friday only), Links of London, Nails Inc, The Reebok Spa,
Sweaty Betty, Tie Rack, Toni & Guy, Wallis T.M. Lewin, Whistles

Other offers available at:


Barbican Dental Care, Café Rouge, David M Robinson, Frontispiece The Gallery, Gant, The Gentry Hair & Spa,
Goldsmiths, Jessops, Jo Malone, Montblanc, Reebok Sports Club, Sk:n, Tumi

*Correct at time of print. Please note, terms and conditions apply to individual retail offers. Retailers reserve the right to amend their offers.
18 News CITYA.M. 31 MARCH 2011

Spring in the NEWS | IN BRIEF


SocialGO swings into profit
UK social network SocialGO saw its rev-
enues rise 183 per cent year-on-year

air at Bellway after adding a number of high profile


clients including Hilton Hotels, Texas
Instruments, Asda and Levi’s. The firm
said its profits were £238,000, com-
pared to a loss of £24,000 the previous
year. SocialGO focuses on providing per-

as profits rise Bellway boss John Watson said London sales rates were particularly strong

ANALYST VIEWS: WHAT DO YOU THINK OF


BELLWAY’S RESULTS? INTERVIEWS BY ELIZABETH FOURNIER
sonalised social networks for schools,
sports clubs, churches and political
movements.

Google settles Buzz rollout case


Search giant Google has settled with US
regulators investigating privacy prob-
PROPERTY fragile but it was well positioned to lems that cropped up in its botched roll-

BY HARRY BANKS increase returns through rising vol- out of social network Buzz, the Federal
umes, growing average sales prices MARK HUGHES | PANMURE GORDON Trade Commission said yesterday. Under


BRITISH homebuilder Bellway and improving margins. the deal, Google agreed to have inde-
expects its profits this year to grow by Bellway reported a £24m pre-tax The company saw revenues grow in the first-half, as both volumes and pendent privacy audits every two years


a third after a strengthening spring profit for the six months to the end of average selling prices increased year-on-year. With a positive trend in for the next 20 years. Launched in
market gave encouragement for an January, up from £19m in the same current trade, we are happy with our full-year forecasts. February 2010 to compete with Twitter,
increase in sales. period a year earlier. It raised its inter- Buzz initially used its Gmail customers’
Posting a 26 per cent jump in first- im dividend by 12 per cent to 3.7p. email contact lists to create social net-
half profits yesterday, the company
ANALYSIS l Bellway
MICHAEL VASSALLO | BREWIN DOLPHIN works of Buzz contacts that the rest of


said site visitors and reservations have the world could see, which led to an
returned to the pattern of a “tradi- 720
p 712.00 uproar.
30 Mar Bellway is trading at a larger discount to all in the sector bar Barratt.


tional spring market” in spite of econ-
omists’ gloomy housing market
Given the strong track record of management, strong London land bank Vale’s Martins set to be chief exec
forecasts.
680 and improving trading this is not justified. Vale director Tito Botelho Martins will
“Expectations for this financial be named chief executive, a local news-
year are that profits will grow by a
factor of maybe a third,” finance
640
ROBIN HARDY | PEEL HUNT paper reported yesterday, the latest
chapter in a tussle over the leadership of


director Alistair Leitch said. the world’s largest producer of iron ore.
600
Bellway, the UK’s fifth largest Bellway has upped its guidance for sales volumes but guidance has Brazilian bank Bradesco, a key Vale SA


housebuilder by market value, said been volatile. Margins are a little below expected levels and the state- shareholder, backed Martins to replace
that consumer confidence remained 10 Jan 28 Jan 17 Feb 9 Mar current chief executive Roger Agnelli.
ment is peppered with caveats.

3 surges into
the black for
BT moves pension UK Commercial Property
Trust net asset value up
the first time payment forward

PROPERTY
able to continue to seek out poten-
UK COMMERCIAL Property Trust, the tial targets.

TELECOMS TELECOMS
financial year. largest UK-focused trust of its kind, “Having performed well through-
HUTCHISON Whampoa yesterday BT HAS paid the latest installment to BT, which has agreed to pay £525m has announced that its net asset out 2010 and taken advantage of
announced the first-half results for its its pension deficit programme nine a year for the first three years of its 17- value (NAV) per share has risen to market conditions to make a num-
network operator 3, which provides months early in order to qualify for year recovery plan, said the early pay- 77p, an increase of 4.6 per cent on ber of high quality acquisitions,
services to Europe and Australia. the tax deductible corporation tax ment would not affect the group’s the previous year, and 0.5 per cent UKCPT is well-placed for the future,”
The firm was pushed into positive rate of 28 per cent, rather than the 26 previously announced outlook for from September 2010. he said.
territory for the first time since it per cent rate that will apply from free cash flow. In its full-year results to December In June last year, the Trust merged
started offering services in 2003 April. The first two payments were made 2010, the Trust also said that the with rival F&C, creating the sixth
thanks to a one-off payment. BT says the decision to pay £505m in December 2009 and December value of its property portfolio had largest UK property firm, worth an
It reported Ebit of £230m, com- into the BT Pension Scheme, the actu- 2010. The next payment was due in grown by 7.9 per cent – up from estimated £1.6m.
pared to a loss of £700m the year arial value of the £525m due to have December 2011. £710.5m to £898.8m on a like-for-like The company’s net rental income
before. 3 Group customers increased been paid in December, made finan- BT’S pension deficit, which stood at basis. increased 23.4 per cent to £60.2m,
by 13 per cent to 30m and users of its cial sense. The timing of the tax £9bn in 2009, fell by £2.9bn last year Chairman Chris Hill said that the from £48.8m in 2009, with office
higher-value mobile broadband serv- deduction will also be brought for- thanks to recent changes in inflation company’s cash position and unused properties reporting the best per-
ices grew 32 per cent to 6m. ward to the first-half of the upcoming calculations. debt facilities meant they would be formance, followed by retail.

 
    
    
  

 
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CITYA.M. 31 MARCH 2011 News 19

CITY MOVES | WHO’S SWITCHING JOBS Edited by Harriet Dennys in association with

financial services industry, most recent- ty, at firms including Grosvenor, London restructuring professionals in the sector
Astbury Marsden ly at Punter Southall. Capital Holdings and Stockley. of stressed and distressed real estate.
Mark O’Reilly has been appointed as managing
director of the financial services recruitment HSBC RBS Insurance Signia Wealth
firm’s Asia Pacific operations. O’Reilly will be Rob Carver has been appointed as Andrew Palmer has been appointed as The wealth management firm has
based in Hong Kong and will continue to lead the deputy head of commercial segment, non-executive director of the insurance appointed Laurent Jeanmart as direc-
expansion of the company’s Singapore and Hong UK, at HSBC. Carver will be responsible giant. Previously, Palmer spent 21 years tor and Andrew Larsen as associate
Kong offices. O’Reilly has more than 13 years’ for managing the bank’s commercial at Legal General and is also a member director. Jeanmart, who will manage
experience in financial services recruitment, banking operations in Northern Ireland, of the Financial Reporting Council’s the firm’s new hedge fund proposition,
including three years in Australia. Astbury Scotland, Wales, the Channel Islands Financial Reporting Review Panel. joins from GLG Partners and Larsen
Marsden plans to open a new office in Sydney in and the Isle of Man. joins from Coutts & Co.
the first quarter of 2011. Jones Lang LaSalle
Mayfair Capital Marc Nardini has been appointed as a Electra Partners
The property investment firm has surveyor in the firm’s London-based The private equity fund manager has
PSigma opment team at the investment and appointed Stephen Musgrave as chair- Real Estate workout team. Nardini will appointed Alex Fortescue as chief
William Manuel has been appointed as asset management firm. Manuel has man. Musgrave has more than 20 specialise in working with banks, loan investment partner. Fortescue joins
associate director in the business devel- more than 24 years’ experience in the years’ experience in commercial proper- providers, insolvency practitioners and from Apax Partners.

To appear in CITYMOVES please email your career


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

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ANALYSIS l Randgold Resources 4,567.00 ANALYSIS l 3i Group 301.10 ANALYSIS l Autonomy 1,601.00
5400 30 Mar 350 30 Mar 1750 30 Mar
p p p

4800 315 1550

4200 280 1350


10 Jan 28 Jan 17 Feb 9 Mar 29 Mar 28 Jan 28 Jan 17 Feb 9 Mar 29 Mar 10 Jan 28 Jan 17 Feb 9 Mar 29 Mar

RANDGOLD RESOURCES 3I GROUP AUTONOMY


Societe Generale has started covering the miner with a “sell” rating and a Evolution Securities rates the private equity house “add” with a target Peel Hunt rates the software firm “sell” and has cut its target price by £1 to
12-month target price of £34. The broker thinks Randgold is facing a host price of 370p. The broker thinks recent market weakness could dampen £13. The broker estimates that underlying profit at the firm has shrunk dur-
of operational, political, fiscal and macroeconomic headwinds. It believes the firm’s expected net asset value ahead of its pre-close update due on ing the year to March, after it missed fourth-quarter targets by around 10
that the firm’s expansion at some of its mines is likely to be delayed further Friday. Evolution believes that the market must improve before value oppor- per cent, but thinks the company is still being valued in the market as a
by political instability, and adds that rising gold prices can only go so far to tunities at 3i are crystallised, though the stock currently looks cheap on an growth stock. It adds that margins have been hit by higher sales and mar-
offset the soaring cost of fuel. absolute basis, it says. keting costs and rising levels of bad debt.

FTSE rally continues despite Quarter-end dash


earnings woes for retailers pushes up Wall St
blue-chip index closed up 16.13 He said industrials, tech stocks and The US labour market showed

THELONDON points, or 0.3 per cent, at 5,948.30.


The index has risen six per cent
chemicals producers look well
placed. THENEW YORK further recovery in March as private-
sector employers added jobs while

REPORT REPORT
since its year-low of 5,591.59 on 15 Industrials such as IMI and Weir planned layoffs fell, according to
March, rebounding from sharp falls Group, up 1.9 and 1.2 per cent respec- separate reports on Wednesday.
after Japan’s earthquake, political tively, benefitted from an upbeat The ADP report on private-sector
trouble in the Arab world and note on the sector from RBC Capital jobs, which may not be a depend-

T
HE FTSE 100 closed higher for a European debt worries. Markets. able indicator of the government’s

U
sixth consecutive session yester- Miners, which now trade above IMI was RBC’s top pick but it said S stocks rose yesterday as broader jobs report due on Friday,
day, its best run since August their 20- and 50-day moving average, Invensys and Smiths Group, down investors positioned them- showed 201,000 jobs being created.
2010, as investors ditched retail- led the gains as investors refocused 2.3 and 1.1 per cent respectively, may selves for the quarter’s end That kept expectations intact for the
ers over earnings worries in favour of on stocks that provide hopes for earn- underperform UK peers. and the S&P 500 attempted to Labor Department’s report.
growth sectors such as industrials ings growth. Smiths, Anglo American, British hold above a key technical level. “At 200,000 or so, that number is
and mining. Vedanta Resources added 3.4 per Land, British Sky Broadcasting, Stocks advanced as money man- not enough to excite the market one
Dixons issued a profit warning cent, with traders citing a bullish Eurasian Natural Resources and agers re-allocated positions for the way or the other - if it indeed hap-
and gloomy outlook as a survey from note from Morgan Stanley - in which Prudential all traded without their end of the quarter, with the S&P 500 pens to be the number for payrolls
the CBI showed the underlying trend the broker says the miner’s industry- dividend attractions. up 5.9 per cent. on Friday,” said John Canally, and
for retail sales remained weak. leading growth is not recognised by Traders said bid talk boosted The S&P broke through 1,330, economist for LPL Financial.
Dixons, Britain’s top electricals the market - as the catalyst. Centrica, up 2.5 per cent on strong which was noted as a resistance “You need well below that to get
retailer, fell 18.3 per cent, while the Rolls Royce gained 1.7 per cent volume, with traders citing talk that point for stocks. The benchmark was people worried about a double-dip
country’s biggest pizza delivery firm, after HSBC upgraded the aerospace Spanish peer Iberdrola was set to unable to hold gains above that and well above that to get people too
Domino’s Pizza, fell 4.2 per cent as it and defence firm to “overweight”, make a bid. mark in its three previous attempts. worried that the Fed is going to
reported a slowdown in sales growth. citing growth prospects and shrug- Traders also cited talk of bid inter- “They are selling commodities, tighten.”
Next shed 2.6 per cent and Marks ging off concerns over the impact of est in fashion group Burberry, which they are moving back into industri- In the latest deal news, Canadian
& Spencer dropped three per cent as high oil prices. added two per cent. als,” said Paul Mendelsohn, chief drugmaker Valeant
MF Global initiated its coverage on Rolls Royce shares are flat on the Technical analysts said the index investment strategist at Windham Pharmaceuticals International
the latter with a “sell” rating, argu- year but trade just above their 50-day looked set to retest the 6,000 level. Financial Services. made an unsolicited bid to buy
ing it has a “history of boom and moving average of around 619p, on a “You’ve got a mini-market rota- Cephalon for $5.7bn (£3.5bn), driv-
bust”, while Oriel cut its earnings forward price-earnings ratio of 13.8 ANALYSIS l FTSE 5,948.30 tion coming into your final couple ing Cephalon’s stock up 28.1 per
6,100
forecasts. times compared with a sector aver- 30 Mar of days of the quarter, and that is cent to $75.25 while Valeant’s US-
Traders said banks weighed on age of 10.4, Thomson Reuters data 6,000 the way the window dressing takes listed shares shot up 10.4 per cent to
gains ahead of Irish banking stress- showed. place.” $49.
test results today. “The updates companies have been 5,900 The Dow Jones industrial average The deal pushed the NYSEArca
Barclays potentially dealt UK Plc a giving investors since the oil price 5,800
gained 71.6 points, or 0.81 per cent, biotech index up three per cent.
blow, after it was reported to be con- picked up have indicated that price to 12,350.61. The Standard & Poor’s Gains in the US helped propel
sidering moving its headquarters to can be passed on and that demand is 5,700 500 Index gained 11.85 points, or global markets. MSCI’s all-country
the United States due to the UK holding up,” Colin McLean, manag- 0.90 per cent, to 1,331.29. The world stock index rose more than
5,600
threat of higher capital require- ing director at the £650m Scottish Nasdaq Composite Index gained 1.0 per cent yesterday while in
ments. Value Management in Edinburgh, 5,500 19.9 points, or 0.78 per cent, to Europe, equities hit a three-week
Despite the retail gloom, London’s said. 10 Jan 28 Jan 17 Feb 9 Mar 2,776.79. closing high.
20 CITYA.M. 31 MARCH 2011

Wealth Management | Personal Finance


A fight through the
fund acronym jumble
The European Commission thinks that its Ucits, KIIDs
and SRRIs will make understanding fund risk easier for
retail investors, but some will disagree, writes Craig Drake

U
CITS IV, or to give it its full non-technical language and in a
title, the Undertakings for common format. All existing Ucits
Collective Investment in funds must put the same document
Transferable Securities in place within a year.
Directive IV, comes into force in July. Further to this, asset managers
A set of EU directives aimed at allow- are obliged to present their risk and
ing collective investment schemes to reward disclosure via a synthetic
operate freely throughout the EU, risk and reward indicator (SRRI).
they try to harmonise financial reg- This fund volatility indicator will be
ulation throughout Europe. based on the weekly returns of the
The aim of the original Ucits fund and on the previous five years.
directive was to make open-ended It will then be quoted as a number
funds investing in transferable secu- between one and seven, where one
rities in all member states to be sub- will indicate a low risk/low reward
ject to the same legislation. But for investment and seven will indicate
retail customers, it will affect how that the investment carries a high
fund risk is communicated. level of risk with an equally high
The most noticeable to retail fund level of potential return.
investors will be the key investor These measures may be champi-
information document (KIID), which oned by some, bu they are not with-
will replace the simplified prospec- out criticism. Gemma Godfrey, head
tus as the primary document via of research and chair of the invest-
which fund promoters communi- ment committee of Credo Capital
cate with prospective clients. says “it is easy to see where the
All new Ucits funds launched appeal of the Ucits measures as a
after July 2011 will have to issue a whole lies, with promises of
two-sided KIID, written in a clear, increased liquidity and transparen-

PERSONAL FINANCE NEWS


BY CRAIG DRAKE
OFGEM FORCES NOTICE CHANGES MORTGAGE AGREEMENTS ON THE UP
Ofgem has responded to pressure from Figures released yesterday show that
consumers to force energy suppliers to UK consumers have increased their
give increased notice of rate changes. credit card and mortgage borrowing
Suppliers have been ordered to give The Bank of England says that 47,000
their customers 30 days notice before loans for home purchases were granted
implementing price hikes. in February. This constitutes a six
Geared towards protecting consumers month high in home loan lending.
from shock utility bill increases, the At the same time, the number of those
energy industry regulator Ofgem has re-mortgaging their properties rose in
issued new changes to rules which pre- February to 35,725.
viously only called for suppliers to write Total secured lending stands at £11.3bn,
to customers within two months of put- representing an increase of £1.2bn over
ting up their prices. the course of the month.
CITYA.M. 31 MARCH 2011 21

to improve transparency will deter sector is also the largest of those important to remember that not all
communication from the industry. that fall within the directive’s scope. clients are the same, and common
According to Petronella West, “with The UK financial industry makes up sense due diligence from the finan-
regulation from both sides, there is more than 40 per cent of the cial adviser is in most cases a more
a risk that the left hand won’t know European sector, yet has only an 8.2 accurate method of communicating
what the right hand is doing. The per cent vote share at the European important information to a client
intended outcome of these meas- level. than a number on a fact sheet. For
ures is that the consumer is better The FSA have also criticised the this reason, although the directive
informed, but over-regulation will approach towards the SRRI grading will mean that, in the future, you
make the industry very protective.” of risk for consumers. Quantifying will be faced with a much clearer
risk is a difficult task. Whether investor information document
FSA VERSUS THE EC using standard deviation ratings or with a helpful number telling you
The FSA has been prickly towards volatility statistics, you are not going how risky the fund is deemed to be,
the directive, taking the view that to be able to find a method that you shouldn’t be lulled into a false
the UK is a highly diversified market accurately fits all funds. sense of security. You should famil-
compared to its continental equiva- Furthermore, risk is interactive and iarise yourself with the underlying
lents. For this reason it thinks that subjective, and as such it is impossi- risk in the fund and not just read
the “one size fits all” approach may ble to simply come up with a system what it says on the label. Caveat
not be the best one. The UK financial that will suit all investors. It is emptor.

BIG
ON FREEDOM
Scottish Mortgage is not bound by index weightings and our fund
managers are free to comb global markets in search of companies
with a distinct competitive advantage.

The FSA and the EC are squabbling over the quantification of risk Picture: REX

cy. However there are three main risk. You should ask ‘can you afford
reservations that I have with the pro- to risk your money?’ We look at their We’re 100% committed to making sure our fund
posals. There are question marks time horizon for investment and
over whether these funds can truly their tolerance to investment risk.” managers never have a restricted outlook.
deliver. There are also problems
when replicating flagship funds in a UNINTENDED CONSEQUENCES So what’s the secret to their liberated attitude?
Ucits fund, with a widening of the Though the Ucits directive may have
tracking margin, and liquidity dis- lofty aims, in many instances it may Well, our flagship fund, the Scottish Mortgage
parities, which are made more visi- achieve consequences opposite to
ble in times of market pressure. those intended. As 12th-century Investment Trust, is a global stock-picking
Finally, from a fund manager point priest and part-time financial regu-
of view, this extra layer of legislation lation wag Saint Francis of Assisi fund that is completely free of asset allocation
is going to raise the cost of fund almost said, “where Ucits seeks har- constraints, that ignores index weightings and
management.” mony, it instead brings discord.” Ss
the measures are yet to kick in, and that selects stocks purely on their merit. Simple!
GETTING BEYOND THE NUMBERS managers and independent finan-
Petronella West, director of private cial advisers are yet to really feel the Please remember that changing stock market
clients for Quorum Investments, a impact of the legislation, but there
boutique wealth manager, takes the are worries about the overlap and conditions and currency exchange rates will
view that the measures resulting crossover between the FSA and Ucits
affect the value of investment in the fund and
from the directive should not be legislation. The concern is that this
treated as the best way to communi- will add to the regulatory burden on any income from it. You may not get back the
cate risk to clients: “When advising a fund managers and in turn will
client, the most important thing to increase costs for the consumer. At amount invested.
communicate to them is downside the same time, a measure intended

Call 0800 027 5227 or visit www.scottishmortgageit.com


NEW SHORT-DATED CORPORATE BOND EC GIVES MONEY TO CAR BUILDERS
iShares, the exchange-traded funds The European Commission has decided The Scottish Mortgage Investment Trust is available
(ETF) platform of BlackRock, has upon a cross-European electromobility
expanded its fixed income range with initiative, dubbed Green eMotion. It has as a Share Plan or an ISA
the launch of the iShares Markit iBoxx announced that €41.8m will be used by
GBP corporate bond. the fund to prop-up the electric car sec-
Listing on the London Stock Exchange tor.
yesterday, it is the first ETF to provide Working with 42 partners, the commis-
specific exposure to short-dated corpo- sion states that the aim of the initiative We may record your call. Baillie Gifford Savings Management Limited is the manager of the Baillie Gifford Investment
rate bonds which are denominated in is to exchange and develop know-how Trust Share Plan and Investment Trust ISA and is wholly owned by Baillie Gifford & Co, which is the manager and
sterling. and experience in selected regions with- secretary of the Scottish Mortgage Investment Trust PLC. Baillie Gifford Savings Management Limited, Calton Square, 1
It provides investors with access to in Europe, as well as facilitate the mar- Greenside Row, Edinburgh EH1 3AN.
investment grade, sterling-denominated ket roll-out of electric vehicles in
corporate bonds. Europe.
22 Wealth Management | Isas CITYA.M. 31 MARCH 2011

The clock is ticking I F YOU are in the 20 per cent of


Londoners who, according to
research from Fidelity, put off
getting their individual savings
account (Isa) to the last week of the

to keep your savings


financial year, now is the time to shel-
ter your savings from taxation. You
will have to act quickly to pick up the
best deals. Of equal importance, you
should move money out of your old
Isas, where they are probably earning

from the taxman


close to nothing. The work doesn’t
stop there – from 6 April, new Isas
will be launched. So if you have any
additional money in low paying sav-
ings accounts, rather than waiting
another year you would be better off
opening your 2011/12 Isa early.
Alana Fitzpatrick of
MoneySavingExpert.com advises that
Use this year’s allowance, transfer old Isas earning little “at this stage it’s very unlikely any-
thing better will be launched; the
interest, and grab next year’s early, writes Philip Salter best buys are already beginning to
close, so the sooner you apply the bet-
ter.” Stay away from one year fixed
rate Isas though, as they offer lower
returns than variable rate Isas. There
are some longer term fixed rate Isas
that offer slightly higher returns, but
assuming the base rate is finally
Do you have an raised, these returns will probably be
trumped by other options. savers in this Isa would benefit,” says
ISA portfolio that’s

y
The best cash Isa currently on offer Julie Smith of Fair Investment

el
is the Santander Flexible Isa, which Company. Be warned though,

u
offers 3.3 per cent over the year. As Santander is pulling its online offer

niq
well as offering the highest return it today. “Branch and phone applica-

u tailored
“guarantees to be 2.8 per cent above tions can still be made until closing
the base rate (currently 0.5 per cent) time on 5 April, though go sooner
for a year, so if the base rate does rise, rather than later,” suggests

to you? OUR
INVESTMENT
rs do IN YOUR ISA.
Selftrade ta
don’t wan
to c k m a rket, but e le c t Shares
in v e s t in the s o p e n a self-s
Want to
fi ts all’ portfo
lio?  e n
o rt fo lio and se
lect the Save up to £636 of costs in your first year.
‘one s iz e ilor yo u r p return.
S e lftrade. Ta ie ld the best
ISA w it h
ou think w il l y Are you paying too much for your ISA?
nts that y gilts
investme onds and
re s , fu n d s, ETFs, b
from sha is investe
d
• Choose y o ur money
h o w
ere and
when, wh on
• Decide subscripti
in b a c k your ISA Invest today at www.alliancetrustsavings.co.uk/isa/ca
u could w
• Plus yo s apply) or call 0845 128 6360
,680 (term
up to £10
rm
r longer-te
p p e r d e signed fo ll a s ri se
nt wra can fall as
we
IS A is a tax-efficie e s tm e n ts x ru le s may s .
OINITIALCHARGEONMOSTFUNDINVESTMENTSMEANSYOUCANSAVEUP
An
e v a lu e of inv u in v e sted. Ta
investing
.  s than y o elftrade to 5.5% or £560 on each new stocks and shares ISA subscription
m a y g e t back les a l c ir c u m stances. S
and you idu
d on indiv s 3
AVE UP TO  OR UP TO a EACH YEAR WITH OUR FUND ANNUAL
nd depen t advice.
change a s tm e n
n o t p ro vide inve charge rebate for each annual subscription
does
s 7 INNEROFTHEWhat Investment Best ISA four years running

O pen an ISA now


lftraders.
Join the se o.uk/isa3
it w w w.selftrade.c
Vis 0
r ca ll 084 5 0700 72
o
The value of your investments and any income from them can go down as well as up, so you may get back
less than you invested. Figures based on a stocks and shares ISA investment of £10,200 with an annual charge of
£25 + VAT plus a £5 charge for reinvesting the dividend. This investment is compared to a product with an initial
charge of 5.5%, annual management charge of 1.5%, no dealing charge and no rebated AMC. Fund manager rebate
payments we receive for funds bought and held through us may change at any time. This information is based on our
understanding of current tax law and HMRC rules. Legislation and tax regulations are not guaranteed and can change
at any time. Current tax advantages may change and could be withdrawn, tax rates and reliefs may change and
depend on individual circumstances. If you are in any doubt about whether an investment is suitable for you, please
consult a financial adviser. Alliance Trust Savings Limited is registered in Scotland No. SC98767; registered office, PO
Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised and regulated by the Financial Services Authority whose
address is 25 The North Colonnade, Canary Wharf, London E14 5HS; Firm Reference Number 116115; gives no
Lines are open Monday to Friday 7.45am – 7pm. Calls may be recorded. Selftrade® is a trading name of Talos Securities Limited and financial or investment advice.
registered trade mark of Boursorama. Talos Securities Limited is incorporated in England and Wales (Registration No. 4196325,
Registered Address: Boatman’s House, 2 Selsdon Way, London E14 9LA), is authorised and regulated by the Financial Services
Authority (FSA Register No. 208271) and is a member of the London Stock Exchange and PLUS Markets plc. Dealing accounts ISAs Pensions
CITYA.M. 31 MARCH 2011 Wealth Management | Isas 23

pared to accept that their capital is at


risk and that they may get back less
than they invested,” as “there is the
potential to achieve greater returns
over the long term.” Despite the possi-
ble volatility in the short term, “in an
environment where interest rates are
lower than the inflation rate, savings
are being eroded in real terms.
Anyone looking to use a cash Isa for
the medium to long term should con-
sider the impact this will have on the
spending power of their savings,” says
Penney.
Whether or not you decide to opt
in the long term for a cash or shares
Isa, or a combination of both, in the
short term most people would be bet-
ter off opting for the Santander
Flexible Isa for this year, while mov-
ing their existing Isas into the
Nationwide e-Isa. If you don’t, the gov-
ernment is about to take a bite out of
your savings, especially if you are
The government is about to pick earning a paltry 0.43 per cent on your
your pockets unless you tuck old cash Isas. Stop a moment to think
your cash in an Isa about what inflation at 5.5 per cent
RPI is doing to your wealth. Then act.
Picture:
GETTY TOP SIX CASH ISAS
Account name Interest Transfer
Fitzpatrick. The second best cash Isa is est rate for cash Isas is an astonishing- “A higher rate taxpayer who waits to Fitzpatrick says “it’s definitely worth- rate (AER) in
the Barclays Golden Isa. It “pays 3.25 ly low 0.43 per cent. If you already secure an Isa deal at 3.4 per cent while filling up your new Isa as soon Santander 3.3% No
per cent AER and also tracks the base have any cash Isas you should find would have been receiving 2.04 per after 6 April as you can. Why wait a Flexible ISA
rate until March 2012. New customers out how much interest you are receiv- cent in an equivalent rate taxable year when you could be earning tax Barclays Golden 3.25% No
can only apply in branches until clos- ing. Not all new accounts will accept account. Why hang on for less than free interest?” ISA Issue
ing time on 5 April,” says Fitzpatrick. transfers. The highest paying account 0.5 per cent when 40 per cent tax sav- Cash isn’t the only option for your
If you do opt for the Santander that you are able to transfer into this ing on a 3 per cent Isa is the equiva- Isa umbrella. Even if you use your full Nationwide 3.1% Yes
Flexible Isa, after a year your interest year, the Nationwide e-Isa, offers 3.10 lent of 1.2 per cent,” says Cox. If you £5,100 cash allowance this year, you e-ISA
rate will plummet to the base rate, as per cent. Do check for any transfer plan to use your Isa umbrella for cash still have a further £5,100 for a shares Halifax 3% Yes
2.8 per cent is made up in a one-year charges on your existing accounts in the financial year 2011/12, you Isa. Alternatively you could put the Direct Reward
bonus. As such, you should remem- prior to making the move, though. should put the full £5,340 – the whole £10,200 into a shares Isa. Next
ber to transfer your funds – most peo- Assuming you make the deadline, allowance rises in line with year you will be able to put £5,340 Northern 2.65% Yes
ple won’t. According to research this is not the time to relax. In fact, September’s RPI inflation figure – into a cash Isa, or up to £10,680 into a Rock e-ISA
undertaken by Consumer Focus rather than putting it off for another into the account straight away, if you shares Isa. Catherine Penney of Lloyds TSB 2.65% Yes
“more than a third of savers who hold year, “savers should invest in an Isa as can. Kevin Mountford of moneysuper- Barclays Stockbrokers says that a Cash ISA Saver
a cash Isa have had it for more than early in the tax year as possible,” says market.com expects to see some shares Isa could prove a better option,
Source: moneysupermarket.com
five years.” As such, the average inter- Danny Cox of Hargreaves Lansdown. interesting Isa rates on offer. “provided that an individual is pre-

TH A D
No need to search the high street

BE 5 A DLI
IS
E EA
AT PRI NE
for a great tax-free savings rate.

L
We’ll do it for you
How can you be sure you’re getting a great variable cash ISA rate month after month
without trawling up and down the high street comparing rates?
Simple: let our unique Champion ISA do the legwork for you.
Every month we look at the branch based cash ISA interest rates of eight high street

2.76 %
gross p.a.
banks then give you an average of the top five. With a nice little bonus on top. /AER
variable inc.
What’s more, when you transfer a cash ISA to us you will start earning interest as 1.21% BONUS* fixed
soon as we receive your application1. This is promise number 4 of our seven until 30 June 2012
Savings Promises. ~2^aTaPcT $$Va^bb_P04AePaXPQ[T^]QP[P]RTb
of £1,000+. Balances below £1,000 will
We can make promises like this because we don’t have shareholders to please. achieve a variable rate of 0.25% gross p.a./AER
and accrue no bonus over that period
Instead, we’re free to focus on our customers. ~<X]X\d\^_T]X]VQP[P]RTŠ 
~>]T_T]P[chUaTTfXcWSaPfP[TPRW
Even if that means doing a little running around. tax year. Further withdrawals are
subject to 60 days notice
or loss of interest
With no shareholders our only focus is you
SAVINGS
?A><8B4

4
ASK us in branch VISIT nationwide.co.uk

¹ Provided that your funds are free to move and are not subject to any notice period. Our Savings Promises will form part of your savings account terms and conditions. These Savings Promises DO NOT apply to accounts opened with Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society.
* Applies to accounts opened from 01 February 2011.
Rate correct as at 01 March 2011. Champion ISA is a cash ISA. The core rate is based on an average of the top 5 paying branch based instant access cash ISAs, limited access cash ISAs and notice account cash ISAs (including any bonuses) published on www.moneyfacts.co.uk, available from Halifax, HSBC, Lloyds TSB, Barclays,
NatWest, Santander, Northern Rock and Royal Bank of Scotland. Fixed rate cash ISAs, regular savings cash ISAs and cash ISAs that do not accept transfers of existing ISA funds have been excluded. Full terms and conditions available in branch. Rates are calculated on the 2nd Monday of each month and come into effect from
the 1st of the following month. Interest is calculated daily and paid annually on 30 September. AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. The gross rate of interest is the interest rate payable before any income tax is deducted (if
you do pay tax). The rate advertised is a limited offer and may be withdrawn without notice. Applications are required. Standard terms and conditions available on request. Nationwide Building Society, Head Office, Nationwide House, Pipers Way, Swindon, Wiltshire SN38 1NW.
24 Wealth Management | EIS and VCTs CITYA.M. 31 MARCH 2011

Investing in fledglings
is now more appealing
Venture capital trusts (VCT) and the enterprise invest-
ment scheme (EIS) have been promised better terms from
2012. Donata Huggins asks what they are, how they are
changing and which is best for you now and in the future

A low rate 2 Year Tracker


After a new mortgage? We could have the
perfect arrangement for you. Our 2 Year
Tracker Repayment Mortgage gives you
a great mortgage rate with the flexibility
to overpay as often as you choose.
VCTs and EIS feed hungry baby businesses Picture: REX
So, make tracks, call us today.

T
HE Budget increased the tax will be able to invest £1m a year and
breaks available for the enter- both schemes will be able to invest
prise investment scheme (EIS) in larger companies.
2 Year Tracker and sorted out some of the The government is also consult-
Repayment Mortgage legislation involved in venture cap-
ital trusts (VCT). This is making both
ing on improving the situation for
investment in smaller companies,
Tracks the Bank of England base rate plus look appealing to investors, espe- simplification of the rules and the
1.49% for 2 years, currently cially those desperate to escape the removal of some restrictions.
burden of the 50p tax rate. Here’s Anything, it seems, to get people
1.99%
Changing to our Standard Variable Rate
your guide to what they are and
how they are changing.
putting money into start-ups –
which investors should remember is
still a genuinely risky business.
for the rest of the term, currently WHAT THEY ARE Many of the proposed changes

3.69%
The overall cost for comparison is
VCTs were introduced in 1995 to
encourage investment in a portfolio
of smaller, unquoted companies
still need to be nodded through by
the EU, but are likely to be imple-
mented in this year’s Finance Bill.
trading wholly or mainly in the UK.

3.6% APR
Maximum loan to value (LTV) is 65%.
VCTs offer individuals a 30 per
cent income tax rebate on an invest-
ment of up to £200,000 a year, so
WHICH IS BEST FOR YOU
EIS and VCT investments probably
shouldn’t be more than 5-10 per
Minimum mortgage is £10,000. long as the shares are held for five cent of your portfolio, but if you pay
Arrangement fee is £999. years and you have paid that much enough income tax, then VCTs and
tax. You are not liable for income the EIS offer a substantial rebate –
tax on dividends and when you dis- at the price of higher investment
Other fees and charges may apply. pose of your shares there is no CGT, risk. One advantage of the EIS is
should they be trading above issue that 40 per cent loss relief can be
You must hold or open a 1st Account price. Bear in mind the market can offset against gains elsewhere.
to qualify. This offer may be withdrawn be illiquid, making disposal diffi- Fees can be high for both and you
at any time without notice. cult, something also true for EIS. should consider the total expense
The EIS was launched in a similar ratio (TER) as well as likely perform-
manner to VCTs a little later on, but ance. An independent financial
A range of mortgages, nicely arranged
with the aim of getting people adviser will be able to help you con-
interested in higher risk, smaller sider which is best for you.
0800 151 3009 companies. The projects had some
teething problems (a few remain)
But Patrick Reeve at Albion
Ventures characterises the differ-
firstdirect.com with arbitrary lines drawn between
qualifying and disqualified compa-
ence between the two: “VCTs tend to
be less risky affairs because – if they
nies and the tax breaks offered on are like ours – then they are diversi-
each. Currently you can invest fied and the risk is spread across the
£500,000 a year and receive an product. EIS are slightly higher risk
income tax rebate of 20 per cent. because they usually invest in small-
er, less established companies.
Your home may be repossessed if you do not keep up repayments on your mortgage. HOW THEY ARE CHANGING Higher net worth individuals tend
AC20517

first direct credit facilities are subject to status. Rates correct as at 7 March 2011. Because we want to make sure From 6 April 2011, the EIS will offer to go for them.” VCTs and the EIS
we’re doing a good job, we may monitor and/or record our calls. © HSBC Bank plc 2011. All Rights Reserved. first direct a rebate of 30 percent to match are a chance to invest in UK enter-
40 Wakefield Road, Leeds LS98 1FD.
VCTs. As of April 2012, EIS investors prise, but research carefully first.
CITYA.M. 31 MARCH 2011 Wealth Management | Markets 25

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Business Features
26 CITYA.M. 31 MARCH 2011

| Careers

Nowadays you need to monitor your


online presentation just as closely
Googling yourself isn’t
narcissistic these days,
it’s essential when you
are looking for a job,
writes Donata Huggins

T
HE online you is important – 70 per
cent of human resources (HR) profes-
sionals have rejected potential candi-
dates because of their online
information, according to a Microsoft sur-
vey. Or put more positively, 86 per cent said
that good online information could work
in a candidate’s favour. This makes having
a clean reputation on the internet essen-
tial for those that want to get on in life. But
don’t panic just yet, sorting out your
online profile and sprucing it up to make
you look attractive to employers is within
your control. Here is a step-by-step guide to
help you.

KNOW WHAT IS SAID ABOUT YOU


You might think it is narcissistic to spend
time googling yourself, but to properly
manage your online presence you should
do it frequently and thoroughly. Setting up

Signs of maturity will a Google alert on your name can make this IMPROVE WHAT IS THERE
be an advantage easier because every time your name Experts suggest that you should try to
online appears, Google will email you a link to the craft the image of a coherent whole per-
page. Look at the various links that you are son online. Someone whose life narrative
Picture: GETTY offered and consider what someone who is easy to piece together. Have a look at all
doesn’t know you might guess about your your online profiles. Check they are up to
character from it. Don’t just use Google, date and consistent. Beefing up the infor-
either – use all the different search mation on these will improve your online
engines: Google, Bing and Yahoo for a start. image. Using the LinkedIn website is an
Different engines give different – some- ideal way to achieve this since it is essen-
times unexpected – results. Check your tially your online CV. Starting a blog is
Facebook and Twitter privacy settings as another way to present your skills and
well. Are you comfortable with potential experience. These are available for free
employers seeing your photos or knowing from sites such as Blogger and Wordpress.
what you had for lunch?
WASH AWAY THE DIRT
If you have undesirable information about
you on the internet that you are unable to
change yourself, don’t panic. There are
ways to deal with this. Firstly, try the
human touch: charm the provider into
Restart your IT Career? removing the post. If that isn’t an option
or if it fails, you can try to minimise the
Hatstand’s 2 year Green Beret programme gives damage by opening accounts with every
IT professionals the chance to develop careers in networking profile going. These are popu-
investment banking. Tailored for individuals with
a solid academic background and 1-3 years’ IT lar sites and will always appear higher in
the search ranking than whatever you
Serious about an MBA? experience, we provide a rare opportunity to work
for Hatstand in global investment banks.
As a Hatstand Green Beret, you are provided with
a generous starting salary, guaranteed pay rise
wish to hide. Starting a blog has other
advantages too, if you regularly update it
and learn a few search engine optimisa-
Choose wisely. and financial bonus incentives. We support your
development continually with regular catch ups and
tion (SEO) tricks (Google offers guides on
bespoke training, to ensure you are performing and
this for free). This will push your good
challenged in your role. information up and all that nasty infor-
MEET TOP BUSINESS SCHOOLS | SAMPLE MBA LECTURES mation further down the rankings. Of
Our 2 year programme develops your technical
ability as well as your own goals, giving you a course, if the information is untrue, you
LEARN HOW TO CHOOSE A PROGRAMME platform to prove your skills and become a real can always turn to the law. Libel laws
asset in the banking industry. You will then have apply on the internet and Twitter too.
The Accredited MBA Fair, London the opportunity to convert to a permanent position
within the investment bank, or become a Hatstand
While defamation cases don’t always hold
up if the accusing party claims there is jus-
consultant to explore future banking projects, at the
16 April 2011, Grange City Hotel, EC3N 2BQ end of the programme. tification for their statement, there are
(nearest tube station: Tower Hill) To take the first step in restarting your career, log
other ways around this. Contacting a
on to lawyer is the best way to explore these
options.
www.hatstandgreenberets.com There is also a website called iCorrect
Text AMBA 4 to 88101* Or register online at
that is often used by celebrities to set the
for details on the event. www.mbaworld.com/mbafair record straight on accusations made
against them. In worst-case scenarios, you
*Texts will be charged at your standard network rate could use this. But be careful, this could
electronic trading systems consultancy
draw more attention to the problem.
CITYA.M. 31 MARCH 2011 27

How to be
the perfect
interviewee
Look beyond this book’s cheesy
cover for a valuable applicant’s
guide, writes Jeremy Hazlehurst

GET THE JOB YOU REALLY WANT


BY JAMES CAAN
Portfolio Penguin, £12.99
hhhh

I
F YOU were going to create a parody of in the business. Caan says that he would Happy to be here
an inspirational business book, it be very impressed by somebody who cart-
would look a lot like Get The Job You ed a load of highlighted printouts of the Picture: GETTY
Really Want (the “really” is actually company website. In fact, notes of any
underlined on the book’s cover). It has all kind are good. Interviewers like to know
the hallmarks of an inspirational that you have done your

EMERGING MARKETS RESEARCH


business tome, from the picture of research. Bundles of paper
the author looking arrogant on the prove it.
cover to the story of the guy who Also, he says, remember at
pitches up in reception despite not an interviewer has a checklist
being qualified, blows everybody’s in their head, and if you can
socks off and gets the job. And it find out what’s on that then
has the galloping, go-getting style,
replete with clashing metaphors
(do pendulums really move in
you can make sure you tick the
boxes. So, start out by asking
questions; what are the five
Part-time
Emerging Market
cycles?) key components of the job?
A lot of it is entry-level stuff – if And who did it before? This
you want to move sector, look at your core will tell you exactly what you need to

Country Analyst:
skills and then find where these are prove, and let’s you get on with the job of
required; dress smartly to an interview. doing so. Sneaky? Maybe. But it’s also sim-
But Caan has been in recruitment for 30 ple and brilliant. It’s full of little gems.
years and he knows his onions. The best Oh, and if Caan’s own style is anything to
bits in this book are when he tells you
how an interviewer thinks, and how the
interviewee can use that knowledge to his
go by, the successful applicant uses peo-
ple’s first names in job interviews. A lot.
Even if you don’t go down that route,
Turkey
advantage. So, for example, an interview- even the most hardened interview veter-
er wants somebody who shows an interest an will learn something from this book. Our client, a major blue-chip company, is seeking a part-
time emerging market analyst who specialises, or has the
ODD JOBS capacity to specialise, in Turkey. The successful
WAYNE LINCOLN, GREYHOUND TRADER, SPORTING INDEX candidate will perform analysis of the Turkish market
producing assessments of economic, financial and political
In 2006, just before the World Cup in
Germany, I saw an advert in the Racing Post developments based on detailed personal research
for a variety of trading positions at Sporting and relationships with key decision makers. He/she will
Index. I’m a self-confessed sports junkie, so
saw this as the perfect opportunity. The present written and oral briefings to be considered by
World Cup was great, and it was thrilling to senior executives at our clients.
be sat on the trading floor, speaking with
clients on the phones and watching sport
on multiple screens. Strong academic background in relevant discipline

I
’M FROM Jersey and my first job was Not long after joining, I became a grey-
with a menswear business that my hound trader. Now, I didn’t know that Relevant experience in a business or government context
brother-in-law and I formed in the late much about the dogs, but that wasn’t too Strong communication skills in English
1980s. Shortly before I sold the business, important. The key thing is to learn about
I met some traders who opened my mind to the tracks and their biases, as weather con- Turkish language skills desirable
London and the markets. ditions can make a huge difference at cer- Ability to travel internationally
I joined the London Commodity tain tracks.
Exchange in 1996 to trade coffee in the days For example, Crayford is very tight with a
of the open outcry exchanges. My stripey big camber. If you get a lot of rain there, the This is an ideal role for an individual in a professional
light blue and dark blue jacket might not dogs on the outside have a big advantage as
have gone down too well in the menswear all the water drains down to the inside. business role looking to diversify their portfolio.
store, but it was a tremendous experience, Whereas Newcastle is a very flat track with
full of larger than life characters and the no camber, so the rain doesn’t make as
Remuneration will be decided according to experience.
perfect place to learn about trading. much difference.
After three years, the open outcry The spread betting markets we offer on
became an electronic exchange and I the dogs, “Barking Mad” (aggregate num- Please apply to EMR on the online application form at
returned to Jersey to become a stockbroker. ber of first multiplied by second placed trap www.emergingmarketsresearch.eu
I’d be the first to admit that I didn’t have a numbers) and “Bananas” (aggregate num-
passion for coffee beans, and even less for ber of first multiplied by second multiplied
P/E ratios, but I loved the environment and by third trap numbers) are very volatile, so
the hustle and bustle of London. the weather can have a huge impact.
Lifestyle JAKE GYLLENHAL
28 CITYA.M. 31 MARCH 2011
GOES SCI FI
SOURCE CODE: IN
REVIEWS TOMORROW

Industrial cool
Celebrate Mother’s Day and botanical
with a luxurious high tea garden chic
Tim Badham
Forget flowers and
cards, take your mum
Going
for some foodie fun, Out
says Timothy Barber

H
OT on the heels of his downstairs bar at
Polpo, Russell Norman’s new site
LANDMARK LONDON Spuntino on Rupert Street gives a
The grand Marylebone hotel is well-known Lower East Side flavour to their rustic
for its splendidly lavish Sunday brunch buf- Italian style. The look is nineteenth century
fet served in the vast atrium of the Winter industrial Brooklyn, with wire caged filament
Garden, with everything from pastries and bulbs, a pewter-topped bar, mosaic tiles and
salads to roast dishes, and a sweeping array exposed brickwork. Don’t expect to see much
of desserts topped off with a chocolate of that, however, as it’s normally packed, with
fountain. As an added treat for Mother’s the atmosphere making it the place-to-be as
Day, you can mix such indulgence with much as the prohibition cocktails. Fun dining is
some serious relaxation in the form of a also to be had but get there early as there’s no
complimentary day pass for the Spa and booking and no phone number.
Health Club. £75 per person for brunch, spa For other openings you’ll have to venture a
pass included (£22 for those under 13 years old). little out of zone one but it might be just
www.landmarklondon.com worth the trip. The “Left Bank” Battersea
area has really taken off since Von Essen’s
HAYMARKET HOTEL Hotel Verta launched next to the helipad last
At this chic West End boutique, close to year. Bennett on Battersea Square is a fresh
Trafalgar Square, you can pop along to the offering combining oyster bar, brasserie, wine
hotel’s Brumus restaurant for the Mother’s cellar and grocery store. Featuring an al-fres-
Day afternoon tea, which includes a glass co patio and even a botanical garden, it’s
of Veuve, strawberries, chocolate tiffin, and ready for spring, but the inside oozes classic
coronation chicken sandwiches. English style with the warm quaintness of a
Alternatively, check in with your mum over Parisian brasserie. Just down the road, Helix
the weekend and enjoy afternoon tea on Bar is newer still, with a sleek interior worthy
Saturday and a sumptuous English break- of a Bond film with huge windows giving it
fast in the morning. £30 per person for after- views of the whirlybirds below. Sip cocktails
noon tea; from £295 for overnight stays. and watch the world fly by. With terrific
www.haymarkethotel.co.uk seafood specialist The Fish Place opening
close by, the air is a-buzz round here.
TEN MANCHESTER STREET For the most interesting and eccentric new
A relative newcomer to London’s boutique launch, however you’ll need to head east to
hotel scene and a favoured bolthole of the birth of Baby Bathhouse in Stoke
those in the know, Marylebone’s Ten Newington. This little treasure embodies the
Manchester Street is a short walk from same decadent pleasures of City local The
Oxford Street. The spiffing high tea is per- Bathhouse senior (hidden away near
fect for weary shoppers needing a bit of What mums love: get Liverpool Street) with luxurious Victorian-
cosy sanctuary – we particularly recom- stuck into scones, with red wine kirsch cherry parfait, traditional fish pie or a inspired design, including gilded candelabras
mend the fresh scones and clotted cream – sandwiches and tea jelly. Champagne afternoon tea whole roast chicken for the and reclaimed church pews, but brought even
and includes a glass of chilled champers £25; hot chocolate afternoon tea family to share. Sunday lunch more up to date with modern materials and
and a chocolatey gift for mums. £30 per per- Picture: £18; three course lunch with from £29.95 for three courses. gothic glamour. Risqué, cutting-edge enter-
son. www.tenmanchesterstreethotel.com GETTY glass of champagne £38. www.brasseriejoel.co.uk tainment will be the order of the day with
www.thebotaniston- everything from burlesque, comedy, litera-
THE BOTANIST sloanesquare.com THE LANGHAM ture, fashion and performance art. The night-
Now that Oriel is no more, The Botanist, Indulge her with the club and cocktail bar in the basement give
just across the road, is Sloane Square’s BRASSERIE JOEL Overnight Package in the way to the darker side of Victorian erotica so
place for ladies to sit, sip champagne, and Acclaimed French chef Joel Grand Room of one of be warned. A botanical garden is on the way
compare shopping bags from the Sloane Atunes opened his new London’s most famous too, obviously the must-have spring/summer
Street and King’s Road boutiques. So you restaurant in the Westminster hotels, just off Oxford Street. venue accessory. If you don’t travel well and
may as well do just that with your Mum. Park Plaza on South Bank last This takes in Mother’s Day after- are looking for a little quirky East End chic in
Sunday’s afternoon tea includes sandwich- year, where it’s been winning fans of noon tea in the stunning Palm Court the West End then the always-fun Punk on
es, scones, sweets and cakes, and a choice fine French food. Sunday Brunch this week- (which some claim is where the afternoon Soho Street has just been refurbished so
between a luxurious hot chocolate or glass end includes a complimentary gift for tea concept originated) and a spa treatment might be worth rediscovering.
of fizz. Alternatively, lunch includes a mums from the hotel’s newly opened, Bali- in the hotel’s recently opened, impressively Tim Badham is the founder of Innerplace,
glass of champagne and dishes like roast- inspired spa plus a 15 per cent discount opulent Chuan spa, which bases its treat- London’s leading providers of VIP entertain-
ed beetroot and apple salad, fillet of gold- voucher for a treatment of her choice, ments around traditional Chinese medi- ment, including film premieres, fashion shows,
en bream and bitter chocolate mousse along with yummy dishes like chicken liver cine. london.langhamhotels.co.uk launch parties and members clubs.

OUT OF OFFICE
ZOE STRIMPEL
Left, Dali’s DALI COMES TO THE CITY COOL CRAFT WORKSHOPS RATTIGAN SEASON AT BFI
painting for Dali lovers rejoice: London is to be Feeling arty? Join the craft movement BFI Southbank is celebrating the cen-
the Alice in graced with an outdoor installation of by attending some creative workshops tennial year of the birth of wartime
Wonderland Dali’s Alice in Wonderland monument, at Make-Do, a pop-up “craft hide- dramatist Terence Rattigan. Famous
monument. previously unseen in the UK. Nearly away” off Regent Street. Here you can for his plays, he also had a prodigous
five metres high, the bronze piece was get back to basics with finger and screenwriting career. Throughout
conceived in 1977 and has travelled thumb action – knit, stitch, ink, fold April, audiences will have a chance see
the world since 2010. Its appearance and glue. Workshops include begin- everything from Brighton Rock to The
coincides with an indoor exhibition in ners’ knitting, screen printing, hand Browning Version. From the 1940s
Norman Foster-designed Moor House, embroidery and crochet. Workshops until his death in 1977, Rattigan was
right here in the City. 1 April – 30 are from 4-30 April and last three and one of the most successful screenwrit-
June. www.moor-house.com. Moor a half hours. To find out more, go to ers in the world, writing more than 20
House, 120 London Wall, EC2. www.makedo.uk.com A print-making project. films. bfi.org.uk
CITYA.M. 31 MARCH 2011 Lifestyle | TV& Games 29

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5


TERRESTRIAL
6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away: Nicole
6.30pm BBC London News 6.30pm Royal Upstairs 6.30pm ITV News 6.30pm Hollyoaks offers support to Indi.
7pm The One Show Downstairs 7pm Emmerdale 7pm Channel 4 News 6.25pm OK! TV
7.30pm EastEnders: BBC News 7pm David Attenborough’s 7.30pm Charities in Crisis: 7.55pm 4thought.tv 7pm 5 News at 7
8pm DIY SOS: The Big Build – First Life: Part one of two. The Tonight 8pm Three in a Bed 7.30pm How Do They Do It?:
Brynmawr origins of life on Earth. 8pm Emmerdale 9pm Love Thy Neighbour 5 News Update
9pm CHOICE Crimewatch 8pm Great British Food Revival 8.30pm Coronation Street 10pm 10 O’Clock Live 8pm JFK – The Scandals:
10pm BBC News 9pm Neil Morrissey: Care 9pm CHOICE Monroe 11.05pm Friday Night Dinner Revealed: 5 News at 9
10.25pm Regional News Home Kid: Conclusion. What 10pm ITV News at Ten 11.35pm The Ricky Gervais Show 9pm FILM Exit Wounds:
10.35pm Crimewatch Update happens to young people when 12.05am Music on 4 Favourites:
10.30pm London News Thriller, starring Steven Seagal
10.45pm Question Time they leave care. James Blunt 12.40am The Great
10.35pm Benidorm Escape Festival 1.05am Japan’s and Tom Arnold. 2001.
11.45pm This Week: Holiday 10pm CHOICE Rhod Gilbert’s
Weatherview 12.35am Sign Zone: 11.35pm The Late Debate Tsunami: How it Happened 2am 11.10pm CCTV Cities
Work Experience 12.05am Grimefighters 12.30am 12.05am SuperCasino
The Big Squeeze: Panorama 1.05am Dispatches: BP – In Deep Water
Countryfile 2.05am Antiques 10.30pm Newsnight: Weather The Zone; ITV News Headlines 2.55am Unreported World 3.20am 4.05am The FBI Files 4.55am
Roadshow 3.05am Rip Off Britain 11.20pm The Joy of Stats 2.35am The Jeremy Kyle Show Hill Street Blues 4.10am Without a Animal Rescue Squad 5.10am
3.35am My Big Fat Fake Wedding: 12.20am BBC News 3.30am Charities in Crisis: Tonight Trace 4.55am Wogan’s Perfect Wildlife SOS 5.35am-6am
Panorama 4.35am-6am BBC News 4am-6am BBC Learning Zone 3.55am-5.30am ITV Nightscreen Recall 5.20am-6.05am Countdown House Doctor

SKY SPORTS 1 2.30am European Tour Golf 4.20am Four Weddings 12.10am My Name Is Earl 1am in HD Colour 3.50am Extreme
SATELLITE & CABLE

7pm Live Premier League Darts 4.30am-5.30am Racemax 5.10am-6am Maury The Inbetweeners 1.55am Engineering 4.40am Clash of
10.30pm Ringside 11.30pm Russell Brand: Skinned 2.50am the Dinosaurs 5.30am-6am
Premier League World 12am
BRITISH EUROSPORT BBC THREE Important Things with Demetri How Does That Work?
6pm Live WTA Tennis 7.45pm 7pm Top Gear 8pm Junior Martin 3.10am Ugly Betty
The Rugby Club 1am Premier
League Darts 4.30am Ringside
World Superbikes 9.15pm Doctors: Your Life in Their 3.55am Privileged DISCOVERY HOME &
MotoGP 11.15pm-12.15am Hands 9pm Love Me, Love My 4.35am-6am Switched
5.30am-6am Premier League
Cycling Face 10pm EastEnders
HEALTH
7pm A Baby Story 8pm Twins
World 10.30pm Russell Howard’s HISTORY
ESPN Good News 11pm Family Guy 7pm How the Earth Was Made by Surprise 9pm I Didn’t Know
SKY SPORTS 2 7pm Goal! 7.30pm NBA Action 11.45pm Love Me, Love My 8pm Ax Men 9pm Pawn Stars I Was Pregnant 10pm Change
7pm Boots ‘n’ All Special 8pm NBA 10pm UFC Unleashed of Face 11pm A&E 12am I
Face 12.45am Russell Howard’s 10pm American Pickers 12am
7.30pm Live Championship 11pm Freestyle World Cup Good News 1.15am Thailand: Pawn Stars 1am American Didn’t Know I Was Pregnant
Rugby League 9.30pm Super Magazine 11.30pm Snowboard Tourism and the Truth – Stacey Pickers 2am Cities of the 1am Change of Face 2am A&E
League’s Supermen 10pm NRL FIS World Cup Magazine 12am Dooley Investigates 2.15am Underworld 3am Nostradamus 4am Bringing Home Baby
Fulltime 10.30pm Rugby Club NBA Action 12.30am Live NHL Junior Doctors: Your Life in Effect 4am UFO Files 5am-6am 5am-6am A Baby Story
11.30pm WWE: Raw 1.30am Ice Hockey 3am Live NHL Ice Their Hands 3.15am Young, Ancient Discoveries
WWE: NXT 2.30am WWE Hockey 5.30am-6am ESPN Jobless and Living at Home SKY1
Special 3.30am Championship Press Pass 4.10am-5.10am Thailand: DISCOVERY 8pm Hawaii Five-0 9pm
Rugby League 5.30am-6am Tourism and the Truth – Stacey 8pm How Do They Do It? Martina Cole’s The Runaway
Super League’s Supermen SKY LIVING Dooley Investigates 8.30pm How It’s Made 9pm 10pm House 11pm NCIS: Los
7pm Ghost Whisperer 8pm Race Across America with Angeles 12am Night Cops
SKY SPORTS 3 Chuck 9pm Hairy Women 10pm E4 James Cracknell 11pm HMS Ark 1.50am Road Wars 2.40am
7pm Live LPGA Tour Golf Katie 11pm Criminal Minds 7pm Hollyoaks 7.30pm Friends Royal 12am Trawler Wars 1am Cold Case 3.30am Lost 4.20am
8pm Live PGA Tour Golf 12am CSI: Crime Scene 9pm Glory Daze 10pm The Deadliest Catch 2am Future The Filth Files 5.10am-6am
11.30pm Live LPGA Tour Golf Investigation 2.40am Charmed Inbetweeners 11pm Shameless Weapons 3am World War Two Liza and Huey’s Pet Nation

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
12 17 6 28 38 15 7
7 6 3
13  
12 34
Place the numbers from 1 to 9 in each empty cell so that each 9
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 41
14 16
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 8 8 10
    
above or to the left of it. 21 20
You can only use the digits 1-9 24 33  
    and you must not use the
21
15 11    
same digit twice in a block. 5 18 35 18 12
   The same digit may occur 16 23
14
  more than once in a row or
column, but it must be in a
7
10
22
15
5

31
    separate block.
11 17
32 11
  4 13 16
 

    ACROSS DOWN
1 Title given to 1 Having a broad or
 
   WORDWHEEL I C
Siddartha Gautama
(c563–483BC),
founder of a religion
rounded end (5)
2 Workstations (5)
3 Official language
Using only the letters in the Wordwheel, you have of spiritual purity (6) of Israel (6)
    ten minutes to find as many words as possible,
P T 4 Chilly (4) 4 Open-topped glass
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters C 6 Remove one’s email
address from a
flasks used for serving
wine or water (7)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
G A mailing list (11)
8 Bunch of cords fastened
5 Owing (3)
7 Small and delicately
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E N at one end (6)
12 Mount ___, the highest
worked item (5)
9 Swamped with
QUICK CROSSWORD 5 1 9 1 3 6
peak in Japan (4) water (5)

S U R F A D D E R
2 1 3 7 7 6 9 8 SUDOKU         
13 Double (5)
15 Female horse (4)
10 Aseptic (7)
11 Saucepan cover (3)
4 9 1 5 2 8 1
A O D D S E I          16 Object thrown in 14 Roman statesman and
N E A R K N V 1 3 2 5 1
        
T N E C T A R I N E 2 4 1 6 8 9 2 athletic competitions (6) orator remembered
        
A M I G O F G R 2 4 9 3 8 7 5 6 1 19 Communication for his mastery of
WORDWHEEL
M O N S T E R         
8 7 2 7 9 1 3 sent successively to Latin prose (6)
W A T E N A C T         
I N T E R P R E T E
5 8 9 8 9 many people (5,6) 17 Makes reference to (5)
        
V I A R E I N
2 3 1 3 2 1 8 The nine-letter word was 20 Went on horseback (4) 18 Device producing a loud
8 9 3 7 1 3 2 4         
E O R I N G O
COWARDICE         
21 Child of one’s aunt sound as a warning (5)
S O N N Y Y A W N 8 2 9 8 9 7
or uncle (6) 19 Low-breed dog (3)
Sport
30 CITYA.M. 31 MARCH 2011

Spurs query
Newham role
Uefa looks in West Ham
Liverpool managing director, Ayre Pic: PA

to tighten stadium bid


finance rules sially securing them a £40m loan

FOOTBALL
BY FRANK DALLERES from the treasury.
FOOTBALL

And City A.M. understands that the


TOTTENHAM have raised fresh ques- council’s role is one of particular
EUROPEAN governing body Uefa yes- tions about the role of Newham coun- interest to Tottenham as they ponder
terday vowed to monitor those clubs cil in helping West Ham’s successful whether to request a judicial review –
who may attempt exploit loopholes bid for the Olympic Stadium after tak- a process that could take until late
in new financial restraints which are ing the first steps towards seeking a this year to play out, and at consider-
due to be implemented from 2014. judicial review of the contentious able financial cost.
Clubs, specifically those with decision to award the £530m venue to Spurs, headed by chairman Daniel
wealthy owners who consistently the Hammers. Levy (inset), have until early May –
spend more than they earn, will be The Olympic Park Legacy Company three months after the OPLC’s deci-
barred from European competition (OPLC) yesterday confirmed that sion – to lodge any request for a judi-
from 2014-15 season under president Spurs had sent a letter to them cial review.
Michel Platini’s “fair play” rules. regarding “potential judicial review Leading sport lawyers contacted
There has been some scepticism as proceedings” relating to their choice yesterday by City A.M. were quick to
to how rigorously Uefa will imple- to recommend West Ham, and not play down the club’s chances of suc-
ment these sanctions but their head Tottenham, as preferred bidders ceeding with such a bid, but
of club licensing Andrea Traverso last month. acknowledged that the
revealed that the organisation is Tottenham insist no role of Newham would
already on the lookout for “clubs put- legal action has been be likely to feature
ting in place specific structures that initiated yet and highly in their pos-
allow them to easily go around some would not be until sible legal argu-
of the principles that we didn’t think they have received ments.
about.” responses to the Andrew Nixon,
He added: “We will monitor how letter “raising a associate at
the clubs react and if necessary, if we number of con- Thomas Eggar,
notice there are measures that need cerns with the said: “There is no
to be taken to address particular prob- process that led to question the
lems then we will address those to the award”, which involvement of
the executive committee for consider- was also sent to Newham and this
ation.” mayor Boris Johnson £40m payment will
Liverpool managing director Ian and government min- form a significant
Ayre warned that the regulations isters. part of Spurs’ case.”
would be “killed” if they are not Spurs said they had also A spokesperson for the
applied equally across Europe. sent a separate letter to the London OPLC said it had run “a very rigor-
“These rules should be rules and Borough of Newham, which was West ous and transparent process” in
should be hard and fast,” he said. Ham’s official bid partner and helped anointing West Ham as long-term
“The rules should be clearly defined, the club underwrite their proposed tenants of the stadium after next
you cannot have a half-rule process.” £90m relocation plan by controver- year’s London 2012 Games.

Fitter than ever Wilshere SPORT | IN BRIEF Results


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says he’s ready for Euros Clarke named as Aussie skipper intends to run Cheltenham Gold Cup hero 8ZZi`e^kfeJ%%%%%%%%% *  + ?\i\]fi[%%%%%%%%%%%%%%%%%%%%'  '
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development as an international play- with many of the same players and recovery from throat cancer having RUGBY UNION: Richie McCaw has ?\i\]fi[%%%%%%%%%%%%%%%%%%%%%%%%%*/ (( (( (- ++ -( $(. ++
er to be competing in tournaments at did well. undergone an operation to remove a turned down an invitation to attend Dfi\ZXdY\%%%%%%%%%%%%%%%%%%*0 (( (' (/ +, ,0 $(+ +*
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But Wilshere believes he will be up Fabio Capello will have the final say. ments nowadays are fantastic.” New Zealand last year. “It was a heck of D\o`Zf%%%%%%%%%%%%%%%%%%%'  ( M\e\ql\cX%%%%%%%%%%%%%%%%%%'  (
to the task in Denmark during June. He said: “I want to play. It is up to an honour to get an invitation,” he said. LJ8%%%%%%%%%%%%%%%%%%%%%%%%'  ' GXiX^lXp%%%%%%%%%%%%%%%%%%%%(  (
He said: “At the moment I feel I can Stuart Pearce, Fabio Capello and my Long Run set for Aintree “Had I still been injured, then I'm sure
keep going. I feel fitter than ever. manager at Arsenal Wenger.” HORSE RACING: Nicky Henderson fully things would have been different.” email sport@cityam.com
CITYA.M. 31 MARCH 2011 31

‘Tottenham Tendulkar tees up


face uphill final showdown
struggle’ CRICKET

103-3 in the 23rd over, but their mid-


BY JAMES GOLDMAN dle order batsmen failed to keep up
with the rate, Misbah-ul-Haq and
INDIA will contest the World Cup Younis Khan in particular wasting
LEADING sports lawyers believe final on home soil against Sri Lanka much of the strike, and they eventual-
Tottenham would find it difficult to on Saturday after they secured a 29- ly fell well short of their target.
succeed in overturning the OPLC’s run win over Pakistan in Mohali. For Tendulkar, the chance to write
decision with a judicial review. Here Sachin Tendulkar won the man-of- himself even further in the annals of
is a selection of their comments on the match award despite falling 15 the game now presents itself with an
the latest development in the row. runs short of his one hundredth opportunity to win a World Cup on
international century as the hosts his home ground in Mumbai and col-
Robert Campbell, head of litigation, failed to fully capitalise on the breezy lect what would be a momentous
Faegre and Benson: “Judicial review start given to them by Virender hundredth hundred.
is probably the only legal route Sehwag. “Going back to Mumbai for this
available to Tottenham so to that Indeed, India only reached a total event is a wonderful occasion,” said
extent I’m not particularly sur- of 260- 9 on the back of some dreadful the 37-year-old, who has now won
prised. Judicial reviews in these cir- Pakistan fielding. Shahid Afridi’s men every one of his five World Cup con-
cumstances are notoriously difficult spilled six catches in total with frontations with Pakistan since 1992.
to succeed. They require the party Tendulkar let off the hook on four “I just hope we can get the job done.”
to convince the administrative court occasions – the Little Master also sur- He added: “I thought the way we
that the public body has exercised vived a missed stumping chance and bowled and fielded was fabulous.
its discretion in a way that is irra- had the UDRS system to thank when Viru got us off to a flier, which gave
tional. This decision was carried out Saed Ajmal looked to have trapped us a little bit of extra time after the
in the full glare of public scrutiny. I him in front. wicket slowed down a bit. We just
think they face an uphill struggle.” Pakistan were well in contention at needed to get a competitive total.” Tendulkar (left) top scored for India with 85 Picture: GETTY

Andrew Nixon, associate, Thomas

McGinley tips Rose to bloom in Augusta


Eggar: “I’m very surprised. I think
Tottenham’s prospects are slim.
Their strongest argument will be
that the OPLC ignored a number of
considerations when coming to the
decision. I’d be amazed if the OPLC
have not been very very careful
about how they’ve gone about this
to make sure it’s water-tight, Irishman tells Frank as he attempts to revive his career fol-
lowing seven knee operations, is confi-
while McGinley acknowledges he is
rightly among the favourites, he
ularly well in American conditions.”
McGinley, 44, took the latest steps in
because they must have known very
early on there was a chance their Dalleres about the dent more than a decade of largely
American dominance is about to come
believes the Englishman most in form is
Rose.
his comeback with a decent showing at
the Andalucia Masters last weekend and
decision would be reviewed.” is desperate for an injury-free year.
Masters and Ryder to an end.
“I really fancy a European win-
“Lee Westwood played very well in
Augusta last year and was very unlucky Beyond that, the man famous for sink-
Harry Karaolou, senior associate, ner,” he told City A.M. “We’re to come up against an inspired Phil ing the winning putt in the 2002 Ryder
Lawrence Graham: “It’s taken them Cup captaincy blessed now with so many candi- Mickelson, who beat him,” the Cup is delighted to be mentioned as a
approximately two months so it’s a dates. Europeans have won the Irishman added. “Justin Rose is the possible captain when the contest visits
surprise that they have waited so PGA, US Open, and British Open in most in-form European at the Gleneagles in 2014.
long, but it’s a surprise they are RYDER CUP star Paul McGinley admits recent years but they haven’t won moment. He’s had a particular- “It would be a great honour, absolute-
doing it at all. I’d expect them to he would love to see a European tri- the Masters. It’s an iconic event ly strong start to the ly, a huge honour and I’d love to do it,”
argue that the decision was irra- umph at the Masters next week and is and a European winner American season and he’s he said. “At the moment I’m more con-
tional, and would therefore have to tipping England’s Justin Rose to be would cement where we going to be there or there- cerned with playing good golf, and if I
show that the OPLC took into among the strongest challengers. are at the moment – right abouts. He’s played well can find a bit of form then it will cer-
account irrelevant matters or failed European players are currently enjoy- at the top of golf.” at Augusta in the past tainly do my hopes of being Ryder Cup
to take into account relevant mat- ing unprecedented dominance of the Hopes are high that too. There’s such a fine captain no harm at all.”
ters. I think it’s unlikely to get as far world game but have not tasted victory world No2 Lee line, but if you’re look- Paul McGinley will be appearing at Golf LIVE
as judicial review, and I think it at Augusta since 1999, when Jose Maria Westwood may finally ing at form, you’re prob- 2011, the ultimate live golf event, which takes
would be unlikely to succeed. ” Olazabal donned the green jacket. end his wait for a Major ably looking at someone place at London Golf Club on May 20-22. For
Yet McGinley, who won’t be playing at the Masters, but like Rose who’s played partic- tickets visit www.golfliveevent.com

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