Cityam 2012-06-29

FTSE 100 5,493.06 -30.86 DOW 12,602.26 -24.75 NASDAQ2,849.49 -25.83 /$ 1.56 unc / 1.25 unc /$ 1.24 -0.
01
BUSINESS WITH PERSONALITY
LONDON2012
days to go
WORLD NO2 CRASHES OUT OF WIMBLEDON
See Sport
Page 38-39
WE REVIEW THE NEW INTROSPECTIVE SPIDERMAN
See Page 35
28
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Certified Distribution
30/04/12 till 27/05/12 is 132,076
BANKSHARES PLUNGE
AS SCANDALS SPREAD
BY PETER EDWARDS
MORE: ALLISTER HEATH, Page 2 and 8
L L
FORUM: Page 18
L L
AROUND 3.7bn was wiped off the
value of Barclays shares yesterday as
anti-fraud investigators looked into
the interest rates scandal and
George Osborne said the banks exec-
utives should pay the price.
Barclays shares fell up to 18 per
cent as chief executive Bob Diamond
and chairman Marcus Agius were
left clinging on to their jobs.
After a day of intense speculation
over his future, Diamond published
a letter in which he attempted to
explain the banks actions in manip-
ulating the interest rate known as
Libor. He said that the banks prime
motivation in acting as it did was to
protect itself from suggestions that
it was in financial difficulties. He hit
out at other banks too, saying that
their actions forced Barclays to act in
the way it did.
Although he said the decision to
do what the bank did was wrong, he
did not adopt the tone of a man con-
templating resignation.
Barclays shares closed down 15.53
per cent and dragged down the rest
of the sector with Royal Bank of
Scotland sinking 11.45 per cent and
Lloyds and HSBC dropping 3.9 per
cent 2.58 respectively.
Prime Minister David Cameron
joined the political backlash against
Barclays and said management had
serious questions to answer. His
spokesman said there had been a
discussion of the possible criminal
aspects of the long-running bid to
rig the rate at which banks lend to
each other. It came as Osborne
described the banks behaviour as
an epitaph to an age of irresponsi-
bility. He later said that HSBC, RBS,
Citigroup and UBS are also under
investigation. Labour leader Ed
Miliband called for criminal prosecu-
tions against Barclays.
Barclays and the other major banks
will face further embarrassment
today when the FSA is expected to
reveal evidence of the improper sale
of interest rate swap products to
small businesses. The regulator has
completed an initial review after
claims Barclays, HSBC, Lloyds and
RBS pushed firms to take out interest
rate swap products. Analysts warn
that potential claims from swaps mis-
selling could reach hundreds of thou-
sands of pounds, or even millions.
Barclays boss tries to explain actions FSA to confirm fresh mis-selling shame
HSBC Holdings PLC
27Jun 28Jun 22Jun 25Jun 26Jun
575
570
565
560
555
550
p
558.20
28Jun
Lloyds Banking Group PLC
32.00
31.00
31.50
30.50
30.00
29.50
29.00
p
29.94
28Jun
Barclays PLC
210
200
190
180
170
p
165.60
28Jun
Royal Bank of Scotland Group PLC
250
240
230
220
210
p
206.40
28Jun
Bob Diamond is determined to stay in post despite a wave of political criticismis.
NADAL STUNNED
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
BLACKBERRY manufacturer
Research in Motion (RIM) last night
announced worse-than-expected
quarterly losses and said it has been
forced to delay the launch of its new
operating system until early next
year, a potentially devastating
setback for the struggling firm.
RIM said consumers would have
to wait for devices running its next-
generation BlackBerry 10 software
because the integration of a huge
volume of code into the platform
had proven to be more time
consuming than anticipated.
Until recently it had maintained
that the long-awaited new phones
would be available to purchase in
late 2012, in time for the crucial
Christmas buying period.
Last night RIM said losses for the
three months to June were $192m
(123m) as revenues plummeted by
33 per cent to $2.8bn.
The firm also said its plans to cut
5,000 jobs about 30 per cent of its
workforce as it looks
to reduce costs in the
face of falling sales.
Shares in RIM
dropped 15 per cent
to $7.75 in after-hours
trading on New
Yorks Nasdaq.
RIMs massive
losses delay
new BlackBerry
BY JAMES WATERSON
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Obamacare given green
light by Supreme Court
THE FUTURE of American healthcare
will be a key battleground in the run
up to this years presidential elec-
tion, after the US Supreme Court
waved through the controversial
Affordable Care Act yesterday.
Republicans had hoped the court
would deem part of the bill, which is
dubbed Obamacare, to be unconsti-
tutional a decision that would have
thrown its progress into turmoil.
Yet by a narrow vote of 5-4 the
court said that the legislations indi-
vidual mandate, intended to force
Americans to buy health insurance,
was constitutionally valid because
penalising people without insurance
would count as a tax.
Following the announcement,
Republican presidential candidate
Mitt Romney said: What the court
did not do on its last day in session, I
will do on my first day if elected
President that is to act to repeal
Obamacare.
Attacking the policy as being set to
add trillions of dollars to the US gov-
ernments mammoth debt, Romney
concluded: If we want to get rid of
Obamacare, were going to have to
replace President Obama.
Yet observers said that even if they
lost the White House, Democrats
would still be likely to have enough
votes in the Senate to prevent the leg-
Bostock poised to leave M&S
Kate Bostock, the head of all of Marks and
Spencers non-food business, including
clothing, is poised to leave the high street
retailer. Ms Bostocks departure could be
announced at M&Ss annual meeting on
July 10, or possibly sooner. The expected
departure of Ms Bostock, who has been
with M&S for eight years, is the latest
blow to Marc Bolland, chief executive.
Dearth of deals weighs on bank fees
Global investment banks are bracing
themselves for a dismal second half, with
further cuts in costs and staff, after a
sharp drop in dealmaking pushed down
fees in the second quarter to their worst
level in three years. The dearth of
transactions drove down advisory fees
from M&A as well as debt and equity
issuance to $32bn in the first half, a fall of
a quarter on the first six months of 2011.
Batista no longer Brazils richest
Brazilian billionaire Eike Batista is
set to lose his title as Brazils richest man
after shares in his flagship oil company
plummeted 40 per cent in just two days.
OGXs stock dropped 25 per cent on
Wednesday and 19 per cent yesterday.
Lawyer: Kerviel was made scapegoat
Socit Gnrale spent millions in an
attempt to sully the junior employee
accused of dragging the bank into
Frances biggest rogue-trading scandal, a
court was told yesterday. Lawyers for
Jrme Kerviel who lost 4.9bn
(3.9bn) painted him as the scapegoat
in a scandal caused by the bank itself.
Fiat targets US and China
Fiat is hoping to revive the glory of the
102-year-old Italian marque by returning
to the United States and entering China,
now the worlds biggest car market.
Glencore executive moves shares
Glencores finance director has moved
shares worth 200m into trusts, at least
one of which is based in Cayman Islands,
as the commodity giant's merger with
Xstrata stands on the verge of unravelling.
Shareholder spring hits Stobart
The shareholder spring claimed its latest
scalp as a third of investors at Stobart
failed to back the transport groups pay
report. Shareholders are angered by a plan
that could see directors given shares worth
10 per cent of its market capitalisation.
Beijing and EU tangle over telcoms
Beijing is pressing the EU not to start a
trade investigation into Chinas
telecommunications-equipment makers
that could spark a trade war. European
officials are in China to discuss allegations
that China gives subsidies to the firms
that are forbidden by trade rules.
HSBC sells stake in Indian banks
A unit of HSBC has sold stakes in two
Indian banks for around $425m. HSBC
described these sales as the disposal of
"non-core investments and said India
remains a priority market.
WHAT THE OTHER PAPERS SAY THIS MORNING
CITY law firm Herbert Smith
announced yesterday that it is to
merge with Australias Freehills, in
a tie-up that will create one of the
worlds top 10 law firms by
headcount.
Herbies, which employs more
than 700 lawyers in its London
offices, will combine with the
Australian firm to create a business
with historic joint revenues of
more than $1.3bn in the biggest
legal merger for 12 years. The
combined firm will be known as
Herbert Smith Freehills, and
operate across 20 global offices.
It will be lead by Herbert Smiths
managing partner David Willis and
his equivalent at Freehills, Gavin
Bell, who will be co-chief executives
of the 2,800-strong lawyer firm.
Yesterday Willis told City A.M. that
a vote among partners had shown
overwhelming support for the
merger, which will see the two
firms share a single profit pool.
Willis also said Freehills
Australian experience would allow
the firm to increase its capacity to
take on large cross-border deals,
particularly in the lucrative Asia
Pacific market. There are also plans
to open a New York office in the
autumn, and an application for a
South Korean licence is underway.
The merger is expected to be
completed by 1 October this year.
Herbert Smith
merger to form
top 10 law firm
President Barack Obama said the decision was a victory for people across the US
2
NEWS
BY ELIZABETH FOURNIER
BY JULIAN HARRIS
To contact the newsdesk email news@cityam.com
C
AN it get any worse for Britains
banks? Well, yes. Much, much
worse. Not only is Barclays
merely the first firm to settle
when it comes to the despicable Libor
scandal others are also being
investigated but the FSA is about to
announce that it will penalise a
number of banks for a separate
scandal which involved misselling
swaps to small businesses. In at least
some cases, retail bankers talked
absolute nonsense to their customers,
telling them they couldnt lose out
when they obviously could and did.
This is a perfect storm for the bank-
ing industry, and one from which it
will take years to recover. Just when it
seemed the industry was on the
mend, this latest blow could set it
back years. And this time those insti-
tutions being targeted actually
deserve the opprobrium they are get-
EDITORS
LETTER
ALLISTER HEATH
From boom to bezzle: this banking scandal will run and run
FRIDAY 29 JUNE 2012
ting. The behaviour of a small minor-
ity of staff was disgusting, and should
have been checked by senior manage-
ment. Those of us who believe that we
need a strong, healthy and honest
City, for the sake of hundreds of thou-
sands of jobs and of the UK economy,
have the right to be very angry at the
idiocy of many individuals and insti-
tutions. Ordinary City workers in
banks, fund managers, law firms and
other related industries are especially
entitled to be furious.
It is vital that all banks deal with
their problems, and that heads roll. It
beggars belief that Bob Diamond
thought all those months ago that
the time for contrition was over for
his industry. He must have known he
was sitting on the Libor scandal.
But it is important to understand
what is really going on. Im no fan of
John Kenneth Galbraith, the US econ-
omist. But he was right about one
thing: at the height of a bubble, a
punch drunk world becomes so
wealthy that it turns a blind eye to
financial crime (embezzlement, or
the bezzle). But when the music
stops, and the crash comes, everybody
suddenly uncovers past scandals. It is
worth quoting him at length: the bez-
zle, he said, varies in size with the
business cycle. In good times people
are relaxed, trusting, and money is
plentiful. But even though money is
recession had everybody behaved
legally: it was US government policy
to subsidise mortgages for those who
couldnt afford them. It would have
ended in tears regardless of whether
everybody had been honest or not.
Greece would still be bust even it had-
nt lied about its deficit in the run-up
to euro membership. Others made
honest but terrible mistakes. And so
on. It is vitally important to crack
down and punish wrongdoing but
doing so wont prevent another eco-
nomic crisis. The two problems need
to be tackled in parallel.
The biggest issue is this: this latest
outburst of self-harm from the City is
bound to hinder the recovery. It will
make all of us poorer. It will prolong
the crisis. It is very, very bad news.
plentiful, there are always many peo-
ple who need more. Under these cir-
cumstances the rate of embezzlement
grows, the rate of discovery falls off,
and the bezzle increases rapidly. In
depression all this is reversed. Money
is watched with a narrow, suspicious
eye. The man who handles it is
assumed to be dishonest until he
proves himself otherwise. Audits are
penetrating and meticulous.
Commercial morality is enormously
improved. The bezzle shrinks. We
are now at this stage of the cycle.
Yet while the discovery of lies is
shocking, it will inevitably confuse
our understanding of the boom and
bust. The wrongdoings were over-
whelmingly the product, not the
cause, of the bubble. Of course, they
contributed to the subsequent pain
but only marginally. There would still
have been a sub-prime crisis and a
islation being quashed.
In such an event, Republicans could
seek to delay and erode Obamacare by
targeting smaller elements of the bill.
Fiscal sections involving tax and
spend decisions could be outvoted,
the Cato Institute in Washington DC
told City A.M.
In the event of a Barack Obama victo-
ry in this Novembers elections, the bill
will progress in 2013, yet much of its
components remain unpopular and
will provoke more debate.
Todays decision was a victory for
people all over this country whose lives
will be more secure because of this
law, President Obama said yesterday.
The highest court in the land has
now spoken. We will continue to
implement this law and well work
together to improve on it where we
can, Obama added.
Stocks in US hospital firms shot up
after the Supreme Courts verdict.
HCA Holdings closed up more than 10
per cent and Community Health
Systems was up more than eight per
cent. Yet some insurers sank, with
Aetna ending down 2.7 per cent at
$39.85 last night.
RIM has delayed its
BlackBerry update.
The new jobs website for London professionals
CITYAMCAREERS.com
G
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RUPERT Murdoch delivered a stinging
blow to the UK yesterday as he out-
lined plans to split his businesses in
two.
Asked about the ongoing investiga-
tions into several of News Corps
British subsidiaries, including News
International and BSkyB, Murdoch
implied his UK-based assets are not
crucial to the success of his company.
The News Corp boss said, There are
billions and billions of dollars, and if
Britain didnt want them, there are
plenty of good places to put them
here [in the US].
But Murdoch averted fears that a UK
exit might be on the cards, saying,
Weve got things to be very bullish
about in this country.
After days of speculation, which
drove up News Corps share price by
almost 11 per cent, News Corp yester-
day confirmed it will split its opera-
tions into two companies a
publishing division and a media and
entertainment arm.
Rupert Murdoch, who will be chair-
man of both companies, said he will
serve as chief executive of the media
Slap in the face
for UK as News
Corp plans split
BY LAUREN DAVIDSON
and entertainment arm. While a sur-
prising announcement, as Murdochs
heart is known to be in newspapers,
the media and entertainment division
will be the larger and more lucrative
company.
The tycoon said the hunt is on for
the publishing companys chief execu-
tive, who is likely to be an internal
applicant. Murdoch said it was highly
unlikely that his son Lachlan would
be put in charge of the division.
Other details of the plan were also
vague, including how investors will be
affected. News Corp said each current
share will translate into one share of
the new company, but declined to
comment further.
The process is expected to take a year.
Murdoch defended the decision
against allegations that the split is a
result of the hacking scandal plaguing
News Corps UK newspapers.
Its nothing to do with it at all. This
is not any reaction. This is looking for-
ward to whats best for the company
and for our shareholders, he said.
Goldman Sachs, JP Morgan and
Centerview Partners are said to be
advising News Corp on its restructur-
ing.
Rupert Murdoch will serve as chief executive of the media and entertainment arm
MEDIA & ENTERTAINMENT
FRIDAY 29 JUNE 2012
3
NEWS
cityam.com
PUBLISHING
BSkyB
Sky Italia
Sky Deutschland
Twentieth Century Fox
Fox Broadcasting
Fox Sports
Fox News
National Geographic
Channels
Shine Group
The Times
The Sunday Times
The Sun
Dow Jones
The New York Post
The Australian
The Herald Sun
HarperCollins
The Wall Street
Journal
Dear Colleagues,
It is with much enthusiasm and
personal pride that I share with you
today's news regarding our plan to
drive towards the next,
transformative phase of this
organisation you and I have built
together into one of the largest,
most innovative media companies
of our time..
We will separate News Corporation
into two global leaders in their own
right we will wow the world as
two, as opposed to merely one...
Our publishing businesses are
greatly undervalued by the skeptics.
Through this transformation we will
unleash their real potential... Our
aim is to create the most ambitious,
well-capitalised and highly
motivated publishing company in
the world... I believe our leadership
is born out of a spirit of innovation.
We have never accepted the status
quo... Over the years, I have become
accustomed to the noise of critics
and naysayers... and pretty thick-
skinned! Remember what they said
when we started the Fox Network,
Sky, Fox News and The Sun? These
experiences have made me more
resilient. And they should you, as
well.
All the best,
ACCOUNTANCY giant PwC will today
announce the names of the 39
employees it will promote to its
partnership next month, bringing
the firms total new partners over
the last year to 61.
The other 22 partners have joined
PwC in the last 12 months from
other companies.
Spread across the firms advisory,
tax and assurance practices, the new
partners will take up their roles
from 1 July.
I am very pleased to welcome our
new partners, PwC senior partner
Ian Powell said yesterday.
As the UKs leading professional
services firm, we continue to invest
heavily in the future as we grow our
business, and as part of this, we draw
our partners from a wide base of
skills to reflect the needs of our
clients in all areas of their business.
The firm also said it planned to
recruit up to 2,200 new staff this
year, at student, intern, graduate
and experienced levels.
In the latest rankings of
professional services firm released by
Morningstar, PwC ranked top of the
list of FTSE 100 auditors, counting 41
of the UKs top companies among its
clients. It also works for 67 firms
listed in the FTSE 250, and 107 on
the Alternative Investment Market.
PwC adds 61
partners across
its UK offices
BY ELIZABETH FOURNIER
G
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THE UK recession was deeper than
previously thought, showed revised
estimates released by the Office for
National Statistics yesterday.
The growth estimates for the fourth
quarter 2011 were revised down to -
0.4 per cent, rather than the 0.3 per
cent shrinkage previously estimated.
On the other hand, the new data
estimates a 6.3 per cent contraction
from peak to trough in the recession
of 2008 and 2009, comparing to an
original estimate of 7.1 per cent. The
new estimates have current GDP as
just 3.9 per cent lower than peak out-
put, whereas output was previously
believed to remain 4.4 per cent down.
The GDP data this morning show
further signs of economic weakness,
said Michael Saunders at Citi
European economics, The economy
has been roughly flat for about two
years andis likely to remain
depressed given headwinds from
high private debts, poor credit avail-
ability, tight fiscal policy and the
UK GDP deeper
in recession on
newest figures
BY BEN SOUTHWOOD
EMU crisis.
With weak nominal growth and
falling inflation, there is a clear need
to add sizeable stimulus urgently.
The newest estimates confirm that
GDP inched down 0.3 per cent in the
first quarter, while manufacturing
also fell 0.3 per cent and services crept
up 0.2 per cent. Household consump-
tion was flat, decreasing 0.1 per cent,
while nominal wages rose 1.1 per cent
well below inflation.
The release also included data on
trade, showing the current account
deficit widening to 11.2bn in the first
quarter of the year.
Analysts at Investec said it was a con-
cern that the largest positive growth
contribution came through from gov-
ernment consumption.
As the government presses on with
this plan through the year ahead, we
would expect the demand support
provided by government spending to
be squeezed with this therefore poten-
tially weighing on quarterly growth
outturns, Investec analysts warned in
a note.
Auditors blame overwork for
HMRCs 5.2bn tax write-offs
THE BRITISH taxman wrote off
5.2bn last year and made billions
more in errors as it was
overwhelmed by its growing
workload, the National Audit Office
said yesterday.
The audit unearthed a large
increase in the amount of tax liabili-
ties that HM Revenue and Customs
decided not to pursue over the last
two years.
Around 503m of the write-offs in
the last year were for corporate tax,
while the department also gave up
1.9bn of VAT payments and 1.5bn
in income tax.
BY MARION DAKERS HMRC overpaid between 2.08bn
and 2.46bn to claimants as a result
of error and fraud in 2011-12, while it
underpaid between 170m and
290m, the NAO said.
And while the Revenue claimed to
meet targets to reduce tax credit
debt to 4bn and crack down on
mistakes, the NAO said the
department only did so by writing
off 1.7bn of old debts and
overstating its error detection rate.
It warned that ongoing work to
overhaul the pay-as-you-earn system
contributed to the jump in rebates.
This year has seen a litany of tax
errors and scandals come to light
with mistakes made at the most
senior level from the Permanent
Secretary for Tax downwards, said
Labours Margaret Hodge, chair of
the Commons public accounts
committee. The sheer scale of waste
and mismanagement at HMRC never
ceases to shock me.
Overall tax revenue rose by 4.5bn
or 0.96 per cent to 474.2bn, as the
VAT hike in January 2011 offset a fall
in corporation tax.
The audit concluded that HMRC
should look again at the cost and
benefits of its collection strategies,
and set out clearly how it would
handle structural changes, such as
the introduction of a universal tax
credit.
Ian Powell recently won a second term as senior partner at PwC
OLYMPICS CABLE CAR LIFTS OFF IN EAST LONDON
LONDONS first
cable car service
opened its doors to
the public
yesterday, a
spectacular ride
high across the
River Thames near
the Olympic Park
which will help
visitors to the
Games avoid any
jams on the
ground. Called the
Emirates Air Line, it
soars almost 300ft
above the river,
offering 360-
degree views of
the east of the
capital including
the O2 Arena and
Canary Wharf.
EUROPEAN regulators published
draft rules yesterday to crack down
on excessive bonuses for managers
of hedge funds.
The European Securities and
Markets Authority (ESMA) said
yesterday the curbs bankers face
must be extended to managers of
alternative investment funds,
including hedge funds and private
equity and real estate funds.
The rules could have a huge effect
on hedge fund managers the bulk
of whose pay is from performance
fees. Open for consultation until
September, the rules bolster a law
the EU has approved to force all
alternative investment fund
managers to undergo supervision.
EU cracks down
on hedge funds
BY CITY A.M. REPORTER
BUSINESS secretary Vince Cable
yesterday threatened HBOS with a
regulatory probe relating to the
banks role in the collapse of
Christmas savings firm Farepak.
Cable said he would refer HBOS to
the Financial Services Authority
(FSA) after a high court judge said it
was the banks decision to extract
around 10m from Farepak that
pushed the firm into
administration.
In an usual move, Mr Justice
Smith last week said that although
HBOS now part of Lloyds Banking
Group acted legally, the bank
should seriously consider the
moral case for providing additional
compensation to victims.
Cable refers
HBOS to FSA
BY JAMES WATERSON
TAX
Fiona Camenzuli
Dean Farthing
Ben Flockton
Janette Jones
Scott Lindsay
Philip Martinos
Tim McCann
Darrel Poletyllo
Lucy Redding
Lachlan Roos
Ben Wilkins
Paul Wolstenholme
ADVISORY
Mark Anderson
Antony Cook
Jeff Ford
Celine Herweijer
John Lyons
Edward Macnamara
Richard Major
David Morris
Brendan ODriscoll
Neil OKeeffe
Will Richardson
Dan Stott
Jeremy Webb
ASSURANCE
Lee Clarke
Jill Emney
Ben Higgin
Martin Hislop
Nick Morrison
Paul Pannell
Reeken Patel
Darryl Phillips
James Quin
Sarah Quinn
Clare Reid
Jessica Taurae
Sam Taylor
Andy Ward
PWCS PARTNERSHIP: THE NEW RECRUITS
FRIDAY 29 JUNE 2012
6
NEWS
cityam.com
THE reign of Vivendi chief
executive Jean-Bernard Levy ended
yesterday in a strategy dispute with
the French telecoms and media
conglomerates supervisory board,
paving the way for possible
disposals to shake up its flagging
share price.
Vivendi, whose shares are at
nine-year lows, has been reviewing
its conglomerate structure and
seeking ideas on how to reverse the
stock slump, while its SFR telecom
business has been hammered by
fresh competition in the French
mobile market since January.
Investors are pushing for a break-
up of the firm in order to release
Vivendi break-up eyed as Levy
steps down over strategy row
the full value of its various
divisions.
Vivendi has mature telecoms
businesses in France and Morocco
generating nearly 60 per cent of
operating profits, while growth is
coming from Brazilian telecom
GVT and video games maker
Activision Blizzard plus smaller
pay-TV and music units including
Universal Music.
Jean-Bernard Levys departure
clearly makes the divestiture
scenario more probable, said
Gilles Guibout, a fund manager at
AXA Investment Management in
Paris.
The question is whether he
couldnt have taken tougher steps
earlier.
INTERNAL auditors at leading banks
must now report directly to an
organisations board in an attempt
to stop bad news being blocked by
senior management, regulators
announced yesterday.
The decision taken by the Basel
Committee on Banking
Supervision helps plug a gap
highlighted by the 290m of fines
levied on Barclays after the bank
was found to have manipulated the
Libor interest rate.
Changing the rules should also
make it more difficult for board
members to ignore what internal
auditors say or claim they were not
told about key developments.
An internal audit function,
independent from management
and composed of competent
auditors, is a key component of a
banks sound governance
framework, said Stefan Ingves,
chairman of the committee.
Setting out 20 principles of
internal auditing, the new
document places additional
pressure on directors.
The banks board of directors has
the ultimate responsibility for
ensuring that senior management
establishes and maintains an
adequate, effective and efficient
internal control system, it states.
Audit reform
makes rate
fixing harder
BY JAMES WATERSON
G
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Y
BARCLAYS could face legal claims
running into billions of pounds after
it admitted trying to rig the Libor rate,
analysts have warned.
The bank, which will pay 290m in
fines to regulators in Britain and the
US, is expected to face legal action
around the world and still faces pun-
ishments from authorities in other
jurisdictions, such as Japans
Financial Services Authority.
We view the final litigation out-
come in relation to Barclays interbank
offered rate settlement as highly
uncertain. However... any litigation
has the potential to be material given
the size of the inter-bank market,
Goldman Sachs said in a note.
Sandy Chen, an analyst at Cenkos
Securities, said the cost of law suits
related to Libor would dwarf the
cost of the fines issued on Wednesday.
Since RBS, HSBC and Lloyds have
also been named in lawsuits, we
expect they will also face significant
fines and damages. We are pencilling
Legal cost over
Libor could run
into the billions
BY PETER EDWARDS
in multi-year provisions that could
run into the billions.
Former SFO prosecutor, Andrew
Oldland QC, now a partner at law firm
Michelmores, said: Barclays decision
to settle with the FSA could just be the
tip of the iceberg.
Separately the British Bankers
Association, which has co-ordinated
Libor since the 1980s in a process
which is not officially regulated, said
it was shocked by the scandal and
called for an official review of the way
the rate is regulated.
The banks which contribute to the
Libor rate must meet the necessary
obligations to their regulators...
It launched a review of Libor in
March after concerns spiralled during
the credit crisis that banks were low-
balling quotes for benchmarks used to
price around $350 trillion in contracts
ranging from corporate loans to home
mortgages.
As part of this review we will now be
asking the authorities to consider in
what manner the Libor setting mecha-
nism should be regulated in the
future, the BBA added.
A DEFIANT but apologetic Bob
Diamond insisted last night that the
bank was acting to protect itself
when it manipulated the key
interest rate known as Libor.
Amid calls for his resignation,
Diamond in an open letter to
Treasury Select Committee chief
Andrew Tyrie, said the actions were
made essentially to protect the
interests of shareholders.
Diamond revealed that both
traders and the bank itself tried to
influence the rate, but with
different motivations.
The traders sought to influence
short one and three-month rates,
BY KATIE HOPE
purely for their own benefit,
Diamond said, in actions he
acknowledged were wholly
inappropriate.
However, the bank was acting to
protect itself following what he said
was unwarranted speculation
regarding Barclays liquidity.
The inaccurate speculation about
potential liquidity problemscreated
a real and material risk that the
bank and its shareholders would
suffer damage, he wrote.
Nonetheless, despite the banks
motivation being to protect itself
from undue speculation, Diamond
apologised for the actions saying; I
accept that the decision to lower
submissions was wrong.
*extracts from Diamond's letter
Chief executive Jamie Dimon has said the bank will be profitable this quarter
JPMorgan Chase & Co
36.50
36.00
35.50
35.00
$
35.88
28Jun
3
2
SHARES in JP Morgan plunged
2.45 per cent yesterday on reports
that its London Whale derivatives
trading loss could end up costing
the bank much more than first
thought.
JP Morgan, which declined to
comment, said it expected to lose
at least $2bn on a bungled credit
derivatives trade when it disclosed
the position in May.
But reports yesterday in the US
media suggested that the total
JP Morgan stock plummets after
reports of bigger trade losses
BY MARION DAKERS loss could balloon to more than
twice initial estimates to around
$5bn.
Chief executive Jamie Dimon
told Congress last week that JP
Morgan would be solidly
profitable in the third quarter in
spite of the trade, which the bank
is working to unwind.
The bank boss has pledged to
give a fuller picture of the
situation on 13 July, alongside the
firms second-quarter results.
Shares in the bank closed at
$35.88 yesterday.
FRIDAY 29 JUNE 2012
8
BANKS IN CRISIS
cityam.com
Bank shares get bashed but arent necessarily mis-sold
B
UY when theres blood in the
streets, goes the old saying. So
was yesterday a good day to be
buying UK bank shares? The
growing outrage over the Libor
scandal saw Barclays plunge 18 per
cent before pulling back slightly,
and RBS was also down more than
11 per cent, although HSBC and
Lloyds Banking group were both
down far less. So does that make
Barclays and RBS better buys? That
depends on how you see the new
round of bank scandals playing out.
Lets start with Libor. While the
record 290m payments that
Barclays will make for its attempts
to manipulate the interbank
lending rate are not enough to
make much of a dent in its 43bn
core tier one capital, it could only
be the beginning. Civil lawsuits for
manipulating the rate could be
vast, with trillions of pounds in
loans affected, and hundreds of
trillions of pounds in derivatives.
And if so, its unlikely to just be
Barclays that gets dragged down.
The FSA is also investigating HSBC
and RBS, among others, and Lloyds
has been named in a private lawsuit
in the US. The problem is that Libor
is set by looking at rates submitted
by a large number of banks, and
outlying values are excluded. That
helps to explain why investigators
are looking for a wider scandal it
wouldnt be easy for one bank to
have played the system alone.
You can see where all this could
be going in the lawsuit filed by US
investment firm Charles Schwab
against all the banks involved in
setting Libor. The documents claim
that these banks collectively
earned billions in net interest
revenues during the relevant
period. It goes on to seek redress
under US racketeering laws,
claiming every member of the
enterprise participated in the
process of misrepresenting their
costs of borrowing to the BBA. Of
course, these claims still have to be
proved, but with an awful lot of
investigations still ongoing.
Barclays could end up looking
shrewd for having come to terms
early. Now isnt a great time to bet
on any of the banks potentially
involved.
Meanwhile, the new mis-selling
scandal involving interest rate
swaps looks set to be seriously
damaging for the sector as a whole.
While theres nothing wrong in
principle with complex hedging
products of this kind, the
suggestion that their potential
downsides were glossed over is a
serious one. Ironically, it has meant
that for some small businesses in
the UK, the costs of lower than
anticipated interest rates have run
into millions. Some estimates put
the overall cost in the billions.
As ever though, its important to
draw the right lessons. Guto Bebb
MP, who moved the 21 June
Commons debate on this scandal,
also made a plea that in finding a
solution, we do not end up going
down the same route as for
payment protection insurance (PPI),
which he described as an
ambulance-chasing gift for
solicitors of disreputable means.
Real scandals need serious answers.
Marc Sidwell is City A.M.s managing
editor.
BOTTOM
LINE
MARC SIDWELL
Dear Andrew
I welcome the opportunity to provide answers....for the
Treasury Committee. Our settlements yesterday represent
only a part of a complex, industry-wide investigation by
authorities that include the U.S. Department of Justice,
Fraud Section, U.S. Department of Justice, Antitrust Division,
the U.S. Commodities Futures Trading Commission and the
Financial Services Authority. Barclays is the first bank to
settle with those authorities. Even taking account of the
abnormal market conditions at the height of the financial
crisis, and that the motivation was to protect the bank, not
to influence the ultimate rate, I accept that the decision to
lower submissions was wrong.
We need to work every day to rebuild the trust that has
been damaged by these actions and others that have come
before them.
Yours sincerely,
Bob Diamond
Diamond in defiant mood as he
attempts to justify Barclays acts
The revelation from Diamond,
who was not chief executive at the
time of the scandal, will put
pressure on him to reveal whether
the decision to manipulate the key
interest rate, used to set the prices of
thousands of retail products as well
as wholesale pricing, was taken at
board level.
Diamond also pointed out that
other rival banks were also under
investigation for libor manipulation.
However, Diamond, who saw a
staggering 3.7bn wiped off Barclays
share price yesterday, conceded
yesterday that the bank now needed
to work every day to rebuild the
trust that has been damaged by
these actions.
Credit subject to acceptance. Credit is provided by external nance companies as determined by DFS. 4 years interest free credit from date of order. Delivery charges apply. After event prices apply from 02.07.12 - see instore or online for details. Mobile charges may apply
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ends Sunday
G
E
T
T
Y
SPAIN and Italy faced mounting pres-
sure yesterday as their borrowing
costs continued to spiral.
Spain saw its 10-year bond levels
surge briefly above the dangerous
seven per cent level yesterday, while
Italy was forced to pay its highest
interest rate in over six months at an
auction of ten and five-year debt.
The endebted nations have been
pleading for emergency action in a
bid to reduce their borrowing costs
before they are forced out of the bond
market.
Italy yesterday managed to sell
5.42bn in five and 10-year bonds,
near the top of its lower-than-average
BY KATIE HOPE
target range, helped by domestic
demand.
But 10-year yields rose to 6.19 per
cent from 6.03 per cent a month ago,
fuelling concern on markets.
Meanwhile, Italys five-year bonds
priced at a rate of 5.84 per cent, com-
pared with 5.66 per cent last month
the highest since a euro-lifetime peak
of 6.5 per cent in December.
The possibility of the Eurozones
bailout funds buying Spanish and
Italian bonds to help ease funding
costs for Rome and Madrid, was dis-
cussed at yesterdays summit.
Both the EFSF and the ESM, once it
is active, have the capacity to buy
bonds in the primary market, one EU
official said.
IN BRIEF
German unemployment rises
n German joblessness rose for the third
month in a row in June, data showed,
signalling that Europes largest
economy is not immune to the euro
debt crisis and cannot be relied on to
prop up growth. The Labour Office said
yesterday the number of people out of a
job rose by a seasonally-adjusted 7,000
to 2.882m in June from 2.875m in May.
Mood across Europe remains low
n Eurozone economic sentiment fell by
more than expected in June, the
European Commission said yesterday.
Its economic sentiment index slipped by
0.6 points in the 17-nation Eurozone to
89.9, compared to the 89.5 point
average forecast. It was the indexs
third consecutive monthly decline.
New chief for Greek National Bank
n National Bank of Greece named
deputy chief executive Alexandros
Tourkolias as chief of Greeces largest
lender yesterday, as part of a
management reshuffle. Tourkolias, in
charge of NBGs shipping portfolio, has
been an executive member of the board
since 2010. Apostolos Tamvakis resigned
as chief executive on Wednesday.
Inflation in Spain eases
n Spains annual inflation slowed
slightly in June, a flash estimate
released by the statistical office INE
revealed yesterday. EU harmonised
inflation unexpectedly fell to 1.8 per
cent in June from 1.9 per cent a month
ago. The rate was expected to remain at
1.9 per cent.
JUNCKER TO STAY ON AS EUROGROUP PRESIDENT
LUXEMBOURG
Prime Minister
Jean-Claude
Juncker (pictured
right) is likely to
stay on as the
president of the
Eurogroup, while
the head of the
temporary
Eurozone bailout
fund Klaus Regling
(pictured left) is
likely to become
the head of the
permanent fund,
Eurozone officials
said yesterday. The
appointments are
expected to be
formally
announced today.
Spains 10-year bond yield
Jun1 May1
8.00
7.00
6.00
5.00
6.94%
%
FRIDAY 29 JUNE 2012
10
EUROZONE CRISIS
cityam.com
Italys 10-year bond yield
Jun28 May31
7.00
6.00
5.00
6.19%
%
Spain and Italy
under pressure
11
EUROZONE CRISIS
FRIDAY 29 JUNE 2012
ECBs Coeure demands power
to inject capital into banks
EUROPEAN Central Bank
policymaker Benoit Coeure called
yesterday for the Eurozones
permanent bailout fund to have the
power to inject capital directly into
banks as part of a package of steps
to tackle the blocs debt crisis.
The adverse feedback loop
between banks and sovereigns ...
can be broken by establishing a
true financial union, Coeure said
at a sovereign risk forum in Rio de
Janerio.
In my view this includes the
creation of a pan-euro area deposit
insurance fund and a pan-euro area
bank resolution framework,
supported by a single supervisory
system with centralised decision-
making, he added.
Spain and Cyprus have both had
to seek bailouts to prop up their
banking sectors.
Giving the European Stability
Mechanism (ESM), the Eurozones
permanent bailout fund, the ability
to inject capital directly into banks
would also help to break the bank-
sovereign loop, Coeure said.
Coeure said a path towards fiscal
union would provide a sound
fiscal pillar on which the single
currency could safely rest but
added that national governments
could not avoid putting their own
houses in order.
A fiscal union can only come
about once the participating
countries have successfully restored
domestic fiscal sustainability and
solidified the conditions for long-
term growth, he said. Joint debt
issuance cannot be a substitute for
putting national fiscal houses in
order and restoring
competitiveness.
ITALY and Spain last night blocked
final agreement on a stimulus pack-
age, saying that they would hold out
until they won promises of immedi-
ate help in reducing their borrowing
costs.
European Council President
Herman Van Rompuy said that
European leaders had agreed to
devote 120bn for immediate
growth measures to try and dig
the Eurozone out of the crisis.
Van Rompuy said half the money
in the new growth pact would
come from increasing the lending
capacity of the European
Investment Bank (EIB) by 60bn,
adding that this money must flow
across Europe, and at least to the
most vulnerable countries to help
them grow out of the crisis.
That includes 50bn in already
existing EIB money, plus 10bn in
new capital, as it loans alongside
private investors.
But the EIBs board has
cautioned that it may have
difficulty in finding projects that
meet its standards.
BY HARRY BANKS Then there are 55bn in funds
that were already earmarked in the
EUs 2013 budget for growth
projects in poorer regions around
Europe.
Finally, the pact will make
another 5bn in project bonds
available to invest in transport,
sustainable energy and digital
infrastructure. While the EU budget
will provide some risk cushion for
the EIB to finance the underlying
projects, the EIB would have to
cover the remaining risk.
But Italy, Spain and some other
countries said that they wanted the
Eurozone to agree steps to help
bring down their high borrowing
costs first, including steps to buy
their government bonds in order to
bring down yields.
Were in favour of the growth
pact and there is a deal on the
content, but before we sign it we
want a comprehensive deal
including short-term measures a
Spanish government official said.
An Italian offical said it also
wanted immediate measures to
relieve Italys borrowing costs. We
see it as a package, he said.
Growth deal of
120bn hangs
in the balance
EU Council President Herman Van Rompuy said there would be project bonds for infrastructure
SHARES of energy giant
International Power (IPR) were
suspended from trading on the
London Stock Exchange yesterday
after its takeover by parent company
GDF SUEZ was hit by delays.
A court needs to sanction the deal
but that process has been held up.
The deal is now not expected to be
completed until at least 2 July.
French utility GDF Suez agreed to
buy the 30 per cent of IPR it does
not already own for 6.4bn in April.
Suspension of
shares at IPR
over GDF deal
BY JOHN DUNNE
BRITISH packaging company DS
Smith yesterday said its full-year
profit rose 44 per cent on strong
sales of corrugated paper in Europe.
The company, which makes
packaging boxes for Procter &
Gamble and Nestle, said pre-tax
profit for the company rose to
110.2m for the year ended 30 April
from 76.7m a year ago.
Revenue rose 12 per cent to about
2bn. DS Smith raised its dividend
by 31 per cent to 5.9p per share.
DS Smith sees
profit increase
by 44 per cent
G
E
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Y
FRENCH utility Veolia Environnement
has sold a majority stake in its regulated
UK water business for 1.24bn including
debt, notching a milestone in its overhaul
aimed at returning to profitability and
cutting debt.
It is the first significant divestment
since chairman and chief executive
Antoine Frerot announced a reorganisa-
tion in December to cut debt that had
piled up under an acquisition spree by
Veolias founder and head Henri Proglio.
The sale will shave 1.45bn off the
14.7bn debt Veolia had at the end of last
year and help it to meet its goal to cut
debt to below 12bn by the end of 2013 by
selling assets worth 5bn. Analysts said
that the price Veolia will receive for the
unit, which is widely seen as the most
attractive it has put up for sale, beat
expectations and the strength of the
pound against the euro had helped prop
up the deals value in euros.
In the current context, regulated assets
are very coveted, they are very defensive
and not exposed to economic growth,
said Exane BNP Paribas analyst Yohann
Terry. Shares in the waste, water and
energy group have lost 46 per cent of
their value in the last 12 months.
The timing and the exit price exceeded
our expectations by a couple of months
and by about 150m respectively,
Citibanks head of utilities research Sofia
Savvantidou wrote in a research note.
Under the agreement with the assets
buyer, Rift Acquisitions, Veolia will keep a
10 per cent stake in the regulated water
business for at least five years.
It will also keep its non-regulated water
business, Veolia said in a statement. Rift
is a joint venture of a Prudential man-
aged infrastructure investment fund and
Morgan Stanley Infrastructure partners.
Veolia sells UK
water unit to
Rift for 1.2bn
BY HARRY BANKS
ADVISERS DEUTCHE BANK
Shell again extends its offer
deadline in bid to buy Cove
OIL major Shell again extended a
deadline for Cove Energy
shareholders to accept its $1.8bn
(1.1bn) takeover offer, leaving the
way open to trump a higher bid
from rival Thai group PTT
Exploration and Production.
The two suitors have been
battling to buy Cove since
February, attracted by the
companys position in huge gas
fields discovered off the coast of
Mozambique which look set to
transform the East African
country into a major supplier of
energy to Asia.
Shell said yesterday that it was
extending the deadline for Cove
shareholders to accept its bid for
a third time to 11 July, following
PTTs move on Monday to extend
to 6 July the cut-off date for
investors to accept its $1.9bn
offer. Investors are still betting
that Shell, keen to establish a
presence in the worlds next
biggest gas frontier in East Africa,
will raise its offer for Cove.
Under British takeover rules,
Shell has until 17 July to launch a
higher offer. Investec analyst
Stuart Joyner said Shell was likely
to raise its offer. The further
extension of the offer was
expected, given the timetable.
Why fold and why raise when
youve got another three weeks?
Id have been very surprised at
any other outcome. As with all
these things, why not wait until
as late as possible? The reason
being, is that gives your
opponent the least ability to
respond, he said. Up to 100
trillion cubic feet of gas enough
to supply Germany, Britain,
France and Italy for a decade
have been discovered off the
coast of Mozambique in the last
two years with forecasts that
$50bn could flow into the
country to help develop the
resources to turn the country
into a gas exporter to energy-
hungry Asia.
BY HARRY BANKS
IN BRIEF
Costain links with Severn Trent
nEngineering group Costain said
yesterday it had a strong order book
and was trading in line for the full
year while securing a joint venture
with Severn Trent. The company said
its forward order book currently
stands at 2.4bn compared to 2.3bn
the same time a year earlier. The
joint venture with Severn Trent will
provide business water and waste
water management services to
commercial and industrial water
users.
OFT says Mercedes broke rules
n The UKs consumer watchdog said
that German automaker Mercedes-
Benz and five UK dealers of its trucks
and vans may have broken
competition law by co-operating
illegally. The Office of Fair Trading
(OFT) issued a provisional finding
alleging that the Mercedes-Benz unit
of German automotive group
Daimler AG and five UK auto dealers
were involved in price-fixing and the
sharing of commercially sensitive
information between 2007 and 2010.
Pursuit dives after update
n Shares in fluid technology firm
Pursuit Dynamics suffered losses
yesterday after it said current year
revenues are expected to be around
1m disappointing investors who
had hoped that the company would
win more exclusive contracts. The
firm also said it plans to reduce its
head-count to 40 from the current
level of 61. As part of the changes
finance chief Richard Webster will be
stepping down from the board on 30
September 2012.
Cove Energy PLC
269
268
267
266
265
264
263
p
267.00
28Jun
FRIDAY 29 JUNE 2012
12
NEWS
cityam.com
Veolia chairman Antoine Frerot announced a reorganisation in December
Nigel Robinson was one of the
advisers from Deutsche Bank who
advised Veolia.
Robinson is no stranger to big deals
and is currently also working on the
mega merger between
commodities giant Glencore and
FTSE 100 miner Xstrata.
Robinson joined the bank in 2007
as managing director and head of
M&A for natural resources Europe.
Robinson initially trained as a lawyer
and spent eight years at Slaughter
and May in London.
He joined Deutsche from Goldman
Sachs where he has was managing
director of the UK Advisory Team.
During his career at Goldman
Sachs, Robinson played a leading
role on a number of major, cross-
border M&A transactions, including
the sale of Thames Water by RWE.
He also steered through the sale of
Serono to Merck, the acquisition of
Associated British Ports by Admiral
Acquisitions, the sale of
PetroKazakhstan to CNPC, the sale
of Innovene to Ineos and the
successful defence by Goldfields
against the hostile bid by Harmony.
Working with him on the Veolia
deal for Deutsche was Martyn
Nicholas.
Meanwhile JP Morgan was joint
adviser with Murray Orr, managing
director, mergers & acquisitions,
and Alex Garner representing the
bank. Macquarie advised Rift on
the deal.
NIGEL
ROBINSON
GLOBAL HEAD
NATURAL
RESOURCES
M&A
DEBENHAMS posted better-than-
expected sales yesterday after events
such as the Diamond Jubilee and the
Easter bank holiday helped lure shop-
pers through its doors despite the wet
spring weather.
Britains second-largest department
store group after John Lewis said that
sales at stores open more than a year
rose 3.1 per cent, excluding VAT, in
the 16 weeks to 23 June.
That compares with a rise of 0.3 per
cent in its first half and analysts fore-
casts that ranged from a three per
cent fall to a one per cent rise.
Chief executive Michael Sharp said
key calendar events such as the
Jubilee and Mothers Day were becom-
ing increasingly important as cus-
tomers focus their spending around
those occasions.
I have seen more of a shift towards
that in the past six months than I
have seen previously. Some of that is
to do with tightening budgets at
home and obviously consumer senti-
ment, he told City A.M.
The retailer, which has 165 stores in
the UK and Ireland, said sales of beau-
ty and homeware products helped off-
set the impact of the cold, wet spring
on demand for seasonal clothing.
But smaller margins on these goods
has prompted Debenhams to lower its
Holidays help
bring sales joy
to Debenhams
BY KASMIRA JEFFORD
gross margin guidance for the full
year by 30 basis points, which Sharp
said yesterday was not a drama.
It would be a concern if the margin
deterioration had been driven by an
increase in discounting or mark
downs but it hasnt. It has been driven
through a mix change and our desire
to grow our non-clothing categories.
Online sales grew by 34.9 per cent,
driven in part by its so-called endless
aisle technology launched in October
that allows shoppers to buy stock from
an online stockroom as well as in
stores. Sharp said 60 per cent of sales
made online were incremental and
not cannibalising its bricks-and-mor-
tar business.
We know that people who shop
multi-channel spend three times more
than those who just shop online...the
key is to get people to shop across
more channels, he said.
Rooney Anand says the industry is resilient
Debenhams PLC
85
84
83
82
81
p
84.95
28Jun
FRIDAY 29 JUNE 2012
13
NEWS
cityam.com
We turned buyers of Debenhams last week, given the transformation that
the company has undergone, increasing cash returns to shareholders and
signicant growth avenues...This potential is not reected in the share price.
ANALYST VIEWS
HAS DEBENHAMS
WEATHERED THE RETAIL
STORM? Interviews by Kasmira Jefford
BETHANY HOCKING INVESTEC
DO YOU STILL GO OUT TO EAT IN PUBS
AND RESTAURANTS? Interviews by Polly Young
I still go to restaurants and pubs as much as I used
to, in fact probably more, as I want to take my mind
off everything that is going on economically. People are more
picky about where they go and pubs are considered cheaper.
These views are those of the individuals above andnot necessarily those of their company
MARTIN JACKS
SKANSEN INTERIORS
Of course I eat at restaurants and pubs as much as I

used to. In my experience people drink more and
smoke more in recessions. More people are going out as they need
something to do with their time with so many unemployed.
STEPHEN ALLEN
RFC AMBRIAN
I go to pubs andrestaurants about the same amount
as I usedto. Imusinga Taste cardat the moment and
that gives you 50per cent off so I use that for when I go out. But I
still dine out as often as I have in the past, despite the recession.
TOM KIELY
KELWAY
CITYVIEWS
Debenhams has announced a strong third quarter interim statement.
Forecasts remain unchanged for now as sales outperformance is offset by
lower gross margins at this stage...we reiterate our buy stance.
JOHN STEVENSON PEEL HUNT

Although a solid rather than exciting update, managements reputation for
generating steady growth is further enhanced... The contrast with larger
rival M&S is notable, with analysts rewarding shares with a buy rating.
KEITH BOWMAN HARGREAVES LANSDOWN

Pubbers in need of an everyday treat boost Greene King
GREENE Kings full year results
suggest that the pub industry, if
anything, is recession resilient.
The pub operator and brewer
posted record pre-tax profits of
152m, up 8.6 per cent on the year
before, as revenues jumped 9.4 per
cent to 1.14bn.
Chief executive Rooney Anand
told City A.M., After reaching the
1bn turnover landmark last
summer, this is another real
milestone for us.
The business has proven itself in
really tough conditions. Going to
the pub is one of lifes little
luxuries, an everyday treat, which
will be reserved and cherished.
Greene King, which operates
2,334 pubs, restaurants and hotels
BY LAUREN DAVIDSON
across the UK, reported a like-for-
like sales growth of four per cent,
while food sales charged ahead
with a 17 per cent rise.
Brewing revenue, which includes
Old Speckled Hen and IPA, grew
five per cent.
Greene Kings shares added one
per cent to 536p.
Greene King PLC
540
535
530
525
520
p
536.00
28Jun
P
OLO stars have raised more than
100,000 for the Laureus Sport
for Good Foundation Argentina
following a weekend event at
the Guards Polo Club in Windsor.
The players were enthusiastic as was
the support from the celebrity-filled
stands, with the likes of rugbys Sean
Fitzpatrick and Boris Becker in atten-
dance. And the victory seemed to lie
not just with the winning team but
with everyone that contributed to rais-
ing money for disadvantaged children
all over Argentina.
Rugby legend Hugo Porta, the
President of Laureus Fundacion
Argentina, said: You just cannot exag-
gerate what good the money that has
been raised here today will do for the
youngsters we are trying to help in my
country.
The fundraising went beyond the
Polo stars turn
out in force for
deprived kids
match as renowned Swiss watch-maker
IWC Schaffhausen donated a special
Laureus edition watch in stainless steel,
only 1,000 of which are being manufac-
tured, which was auctioned to raise
additional funds.
Edwin Moses, chairman of the
Laureus Sport for Good Foundation,
said: This great day out at Windsor has
become one of the highlights of the
Laureus year.
It seems the event was inspiring for
everyone involved, combining great
sport with the opportunity to raise
funds for a very worthy cause.
The next fundraising event is the
London to Champagne bike ride from
4-8 July. This involves travelling across
the English Landscape to the white
cliffs of Dover, ending in the historic
Champagne region, where the reward
of a glass of bubbly awaits.
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
.
M
.
The participants of the Laureus Sports polo event at Windsor line up for the camera
FRIDAY 29 JUNE 2012
14
cityam.com
Got A Story? Email
thecapitalist@cityam.com
cityam.com/the-capitalist
In the golden age of business, networking was an unspoken phenomenon, which
occurred as if unplanned in City bars and restaurants. But in these times of
austerity, the cash-strapped and the wealthy have no time for flirting, instead heading to
designated networking centres to get the job done. With great pride Hackney Borough
Council yesterday announced the opening of Hackney House, a pop-up centre designed
to offer a state of the art networking venue for business, investors and media during the
Olympic games. While this is another nail in the coffin for old-school networking, The
Capitalist applauds any effort to promote business, innovation and entrepreneurship.
THECAPITALIST
LONDON 2012 IMAGE OF THE WEEK
ON WEDNESDAY, giant Olympic rings were lowered
into place beneath Tower Bridges walkways,
signalling one month to go until the Games begin.
Measuring 25 metres wide and 11.5 metres tall, the
rings will remain in place throughout London 2012.
They will also form the centrepiece of a lightshow,
using the bridges newly-installed lighting system,
which will take place every evening of the Games.
Between now and the start of
the Olympics, City A.M. is
publishing its Olympic Image
of the Week. If you have a
shot you think our readers
will like, please email
pictures@cityam.com with
IOW2012 in the subject line.
CELEBRATING its fifth birthday
today, the worlds most iconic
smartphone continues to dominate
its rivals according to data from
Ipsos MORI.
Revealed to the world by Steve Jobs
in January 2007, the first iPhone was
scanned through the till on 29 June
of the same year.
British fans of Apple will be able to
celebrate the smartphones fifth
birthday again in November, the
month in 2007 when the iPhone was
released in the UK.
Ipsos MORI data, which examines
smartphone dominance in the UK,
shows that 19 per cent of people own
an iPhone. By comparison, 15 per
cent use an Android-based phone
which includes Samsung and HTC
and 11 per cent have a BlackBerry.
The last five years have produced a
wealth of milestones for Apple,
including record sales and becoming
the worlds most valuable company.
Earlier this year research firm
Gartner crowned Apple the worlds
top smartphone vendor, pipping
archrival Samsung to the top spot,
although the International Data
Corporation said last month that
Samsung was back on top.
Five years old:
iPhone hits the
grand old age
BY LAUREN DAVIDSON
NATIONAL Express reassured share-
holders that its Spanish bus business
is still growing yesterday, but added
that its UK coach division has been
dented by the cut in subsidies for OAP
passengers.
Just a week after the firm took
investors on a trip to Madrid to
demonstrate its resilience in the
Eurozone nation, National Express
said revenues at its Spanish Alsa unit
are set to rise two per cent in the first
half of the year.
The group added that Spanish state
bodies are paying their bills promptly,
with state receivables falling to 12m
(9.6m) in May compared to 45m at
the end of 2011.
But the firm admitted that its UK
coaches had lost 40 per cent of their
income from concessionary fares
after the government withdrew 15m
of funding for senior citizen ticket
subsidies in November.
Spanish buses
boost National
Express sales
BY MARION DAKERS Analysts at Shore Capital estimate
that profits from UK coach will drop
3m this year, though they are opti-
mistic that the firm can offset this
with growth elsewhere.
Chief executive Dean Finch said the
group is already making progress on
replacing the lost revenues, with its
event-day services to festivals and foot-
ball matches proving increasingly pop-
ular. Revenues are rising in all
divisions apart from UK coach, the
firm added in its pre-close update.
IN BRIEF
Ladbrokes online profits fall
n Britain's second-biggest bookmaker
Ladbrokes issued a profit warning
yesterday after saying income from its
digital division would fall more than
expected in the first half due to a delay
in technology upgrades and a poor
sportsbook margin. Ladbrokes, which
has been pushing its investment in its
internet business, said it now expected
digital profits in the first half to be down
further than expected, at around half
that delivered in the first half of last
year. However, due to a stronger
performance in other parts of the
business including the retail division,
Ladbrokes expects to meet overall
market expectations and believes it will
grow digital profits in 2013 and beyond.
Shares in the company closed down 12
per cent at 152.7p.
Morgan Sindall says it is on track
n Morgan Sindall said yesterday it
remained on track to meet its full-year
expectations but warned that tough
market conditions had continued to
squeeze its margins as companies
compete for a shrinking pile of
construction work. In a trading update
for the first half of the year, the
construction group said its financial
position remains sound with the
forward order book of 3.2bn, broadly
in line with the start of the year.
However Morgan Sindall said its fit-out
unit continued to be impacted by the
lack of major project opportunities while
its affordable housing arm had been
weighed down by the lack of grant
funding for social housing schemes.
Overall, the group said it had a
satisfactory first half.
Olympus insists brand will remain
n An Olympus executive said yesterday
at the firms annual meeting that
despite ongoing talks for a capital tie-up
with several firms, it would maintain an
independent brand. We understand we
need to consider an increase in capital
as one of our key management issues.
The main premise is to fully preserve our
Olympus brand, Yasuo Takeuchi,
Olympus senior executive managing
officer said. Olympus is in final talks
with a firm, believed to be Sony, to get a
roughly 50bn yen (399.7m) capital
injection in return for a stake, as the
Japanese camera and medical
equipment maker looks to rebuild from
a huge accounting scandal. After the
deal, Sony is expected to become
Olympus top shareholder with a more
than 10 per cent stake.
National Express Group PLC
207
206
205
204
203
202
201
p
204.80
28Jun
PHILIPP Humm, who quit the top
job at T-Mobile USA on Wednesday,
said yesterday he would become
chief executive of northern and
central Europe for Vodafone from 1
October.
Humm joins Vodafone from his
role as president and chief
executive of Deutsche Telekoms T-
Mobile USA to oversee the British
firms presence in such markets as
Germany, Britain, Turkey and the
Czech Republic.
Vodafones operations in
northern Europe have held up well
in recent years despite the pressures
on consumer spending, which has
Vodafone snaps up new Europe
boss from rival group T-Mobile
helped to offset the slump in
spending in southern Europe.
Vodafone said yesterday it would
split its European region into two
between northern and central
Europe, and southern Europe, with
the chief executive of Vodafone Italy
Paolo Bertoluzzo taking the top job
over the latter.
He will oversee such markets as
Italy, Spain, Portugal and Greece.
T-Mobile USA said on Wednesday
that Humm was leaving for
personal reasons to spend more
time with his family, but in a letter
to employees Deutsche Telekom
chief executive Rene Obermann said
Humm was leaving to join a
competitor.
15
cityam.com
FRIDAY 29 JUNE 2012
GLOBAL BUSINESSES
RECRUITING LONDONS
BEST PROFESSIONALS
QR SCAN HERE
CITYAMCAREERS.com
NEWS
2007
9 January - Steve Jobs unveils the rst iPhone.
29 June - iPhones hit US shelves for the rst time,
although Apple fans in the UK have to wait until November.
2008
June - Version two, the iPhone 3G, is revealed
and starts shipping in July. It was the rst to
feature the now ubiquitous App Store
2009
June - The third generation iPhone,
dubbed the 3GS,
is presented to the world.
2010
June - Right on cue for its annual
announcement, Apple unveils
the iPhone 4.
2011
March - Apple announces it has sold 100m iPhones worldwide.
October - The iPhone 4S, is released. More than one million devices
go in 24 hours, and four million are sold over the rst weekend.
2012
February - Gartner Research crowns Apple the worlds top
smartphone vendor, but Samsung is hot on its heels.
April - Apple sells 72.14m iPhones in its rst half.
Jan 10 Jul 10 Jan 11 Jul 11 Nov 11 Jan 12 Apr 12
50 %
45
40
35
30
25
20
15
10
5
0
Any
Smartphone
(net)
IPHONE DOMINANCE IN THE UK
HAPPY FIFTH BIRTHDAY, IPHONE
Source: Ipsos MORI
THE FORUM: Page 19
n n
IN BRIEF
Consumer confidence stays low
UK consumers remained down in
the dumps about the economy last
month, according to the latest GfK
confidence figures. The survey
showed an index score of -29 for the
economy, in line with Mays reading
and slightly down on the -25 figure
seen this time last year. Brits are
even gloomier about the countrys
finances than their own purses,
giving the general economic outlook
a score of -31 compared to
-23 for their own financial situation
in the coming year.
Irish retail sales fall further
Irish retail sales volumes fell 0.1
per cent in May and 2.1 per cent on
the year, Central Statistics Office
figures showed yesterday. Final
figures for April showed a monthly
fall of 0.8 per cent and an annual
drop of 1.8 per cent an
improvement on earlier data that
showed falls of 1.5 per cent and 2.7
per cent respectively. Economists
expect retail sales to fall by around
2.4 per cent this year.
Egypt tops emerging equities
Egyptian stocks topped returns on
emerging equity markets in the first
six months of 2012 with a rise of 30
per cent, well above the broader MSCI
emerging stock index, where spectac-
ular first quarter gains crumbled
under the impact of the euro crisis.
MSCIs dollar-based emerging equity
index has fallen one per cent in the
first six months of 2012, figures yes-
terday showed, after the Eurozone cri-
sis wiped out gains seen at the start of
the year. The index fell more than 20
per cent in 2011.
G
E
T
T
Y
THE DROP in house prices in the UK
accelerated in June, as weakness from
the Eurozone and the expiry of the
stamp duty holiday took their toll,
Nationwide said yesterday.
Prices were down 0.6 per cent on the
month, as part of a 1.5 per cent slide
since June 2011 the biggest year-on-
year fall in almost three years.
Values have been sliding since a
spike in March, when first-time buy-
ers rushed to complete purchases
before stamp duty kicked back in.
The slightly weaker trend weve
observed since March is unsurprising,
given the difficult economic back-
drop, with the UK economy dipping
back into recessionand few signs of
a near-term rebound, said Robert
Garden, chief economist for
Nationwide.
The outlook for house prices
remains highly uncertain. Economic
conditions are expected to remain
challenging over the next twelve
months.
Yet again the London market con-
trasted with the patchy picture for the
UK throughout the second quarter,
when nine out of 13 regions saw
prices fall, separate Nationwide fig-
UK house price
drop worsens
as London gains
BY BEN SOUTHWOOD
ures showed. Prices in the capital went
up one per cent quarter on quarter,
adding to a 1.2 per cent rise on the year.
And first-time buyers returned in
May after a poor April prompted by
the end of the stamp duty holiday, ris-
ing 28.3 per cent on the month and
17.3 per cent on the year.
The asking prices on first-time
homes were up 4.3 per cent compared
to April, but down 1.9 per cent on the
year, according to research published
yesterday by LSL Property Services.
David Newnes, director of LSL, yester-
day put the rebound down to wealthi-
er buyers. After Aprils
drop-offbuyers with strong
finances were able to provide large
deposits, and borrow at lower LTVs
[loan to value ratios], he said.
Pension black hole gets bigger at
FTSE 250 firms in spite of funding
THE PENSION deficit black hole
within FTSE 250 firms more than
doubled last year, according to
research released yesterday.
Figures from JLT Pension Capital
Strategies showed that schemes
are 11bn short overall, compared
to a total deficit of 5bn last year.
The surge came despite firms
piling 1.5bn into funding deficits
over the last year, up from 1.2bn
in 2010.
Taylor Wimpey and Cable &
Wireless led the way, with
payments of 122m and 101m
respectively into their pension
pots.
Invensys has the biggest pension
BY BEN SOUTHWOOD liability, at 5.5bn, which
represents roughly 320 per cent of
its market capitalisation. It has a
deficit of 428m, according to JLT.
Overall, 18 companies in the FTSE
250 have reported deficits above
1bn.
Charles Cowling, managing
director for PCS commented: This
latest data underlines the
precarious situation most
companies now find themselves
embroiled in. Changes in economic
conditions and increasing life
expectancy have contributed to
spiralling growth in pension
liabilities.
There are a significant number
of FTSE 250 companies where the
pension scheme represents a
material risk to the business.
Bonds now make up 50 per cent
of portfolios, compared to last
years figure of 48 per cent, as
funds reduce their exposure to
risky equities at the expense of
returns. This is part of a three year
trend in which the allocation of
bonds in pension portfolios has
increased eight per cent.
This de-risking is coming at a
significant cost, as evidenced by
the fact that pension deficit
funding is significantly up,
argued Cowling.
The collapse in defined benefit
schemes continues, with only 15 of
the FTSE 250 providing such
benefits to a significant number of
employees.
Average UK house price
12Jun 04Jun 08Jun 10Jun
200,000
175,000
150,000
125,000
100,000
75,000
50,000
06Jun 02Jun
Bank governor
Sir Mervyn King
THE US economys growth
slowed as expected in the first
quarter, but a less robust pace of
consumer spending and export
growth than previously
estimated could dampen the
economic outlook for the
current period.
American GDP increased at a
1.9 per cent annual rate, the US
Commerce Department said in
its final reading yesterday,
unchanged from its previous
estimate made last month. That
was in line with economists
expectations.
However, when measured from
the income side, the economy
grew at a 3.1 per cent pace in the
first quarter, up from 2.6 per
cent in the previous quarter.
US consumer spending growth
slows but economy is in line
BY HARRY BANKS
The tepid first-quarter pace of
GDP growth was a step-down
from the October to December
periods three per cent rate.
It also reflected a slightly less
sturdy accumulation of
inventories by businesses and
slower pace of investment in
equipment and software than
previously estimated.
Consumer spending, which
accounts for about 70 per cent of
US economic activity, increased
at a 2.5 per cent rate in the first
quarter, rather than the
previously reported 2.7 per cent
pace.
The drag from the revisions to
consumer spending, equipment
and software, exports and
inventory accumulation was
offset by upward revisions to
investment in building projects.
FRIDAY 29 JUNE 2012
16
NEWS
cityam.com
Given the state of the economy, Nationwide is looking at a very low
number of transactions in computing their data, which throws some doubt on
the representativeness of their data. The general trend seems to show a
general downward drift of roughly one per cent per quarter.
ANALYST VIEWS
Though we expected a slight rise, the 0.6 per cent fall wasn't too sur-
prising if banks are unwilling to lend, due to worries about their exposure to
the Eurozone, then housing market activity will be depressed.
The Nationwide data reinforce our suspicion that house prices will trend
gradually lower over the second half of 2012 in the face of limited activity, low
and fragile consumer condence, muted earnings growth and high
unemployment.
IS THIS LATEST HOUSE

PRICE SLUMP A SURPRISE?
Interviews by Ben Southwood
ANDREW GOODWIN ERNST & YOUNG ITEM CLUB
CRAIG ERLAMALPARI
HOWARD ARCHER IHS GLOBAL INSIGHT

House prices fell at the fastest annualised rate since August 2009, Nationwide said
Bank warns borrowing costs will rise
BRITISH banks expect to
significantly raise borrowing
costs for businesses and home-
buyers over the next three
months as the cost of their
funding rises, the Bank of
England said yesterday.
The Banks latest quarterly
credit conditions survey shows
the challenge faced by the
central bank and the coalition to
lower the cost of credit to firms
and households.
they faced when they raised
money from capital markets.
The elevated cost of
wholesale funding for banks has
continued to be passed
through to spreads on
secured household lending,
and lending to firms, the
Bank said.
Spreads were expected
to rise markedly on
lending to firms of all sizes ... in
the next three months, it
added. Despite passing on
higher costs to borrowers, banks
expected supply and
demand for most types
of loan to remain
broadly stable. Analysts
at Investec said the
survey raises another
set of reasons to worry
about the UKs recovery
potential over the
quarter ahead.
The survey took place between
14 May and 31 May, before
governor Sir Mervyn King
unveiled a scheme to provide
cheap longer-term funding to
banks to encourage them to
lend, as well as steps to reduce
banks funding costs, which have
rocketed as a result of the
Eurozone crisis.
The survey showed that over
the previous three months,
banks had been passing on to
customers the higher costs that
17
FRIDAY 29 JUNE 2012
LONDONREPORT
BAE Systems
Tom Arseneault has been
appointed executive vice
president, product sectors, and
chief technology officer of the
defence giant. He most recently
served as president of BAEs
electronic systems sector, and
joined the company in 2010.
Additionally, Larry Prior, current
executive vice president, service
sectors, will become chief operating officer.
Mercer
Aled Jones has been appointed head of responsible
investment for Europe, Middle East and Africa at the human
resource consulting firm. He joined in 2011 as a consultant,
and previously worked for the London Pension Authority,
Jupiter Asset Management and F&C Investments.
LV
The insurance, investment and retirement group has
appointed Mark Laidlaw as its chief actuary. He joins from
Aegon, where he was executive vice president for Solvency
II. Laidlaw worked at Aegon for 20 years, and held
numerous roles in its UK business, including chief risk
officer, chief financial officer and director for shareholder
value.
Alpari
The foreign exchange broker has announced management
changes. Andrey Vedikhin, co-founder and chief executive
of Alpari UK, will become its chairman. Daniel Skowronski,
currently chief commercial officer, will replace him as chief
executive. By autumn 2012, Skowronski will take control of
its subsidiaries in Germany, Japan and India.
Lloyds Bank
Andrew Edwards has been appointed managing director
and head of portfolio management at the banks wholesale
banking and markets division. He joins from Barclays Bank,
where he was head of balance sheet management, Barclays
Corporate. Edwards has also served as global head of risk
analytics and strategy, Barclays Corporate, and head of
portfolio management, Barclays Commercial.
OneSavings Bank
The mutual bank has appointed April Talintyre to its board
as finance director. She previously worked for Goldman
Sachs International for over 16 years, most recently as
executive director in the Rothesay Life pensions insurance
business. Talintyre began her career at KPMG.
7digital
The digital music firm has appointed Kelaine Blades as vice
president of global marketing. She has over 18 years
experience in marketing roles and joins from AeroMobile,
the airline technology company. Blades has also held
similar roles at Velti and Novarra.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Stocks volatile
over EU, banks
and Obamacare
U
S stocks fell yesterday but
pared back sharp losses late
in the session on talk of
progress by European leaders
in easing the regions debt crisis,
while the Supreme Courts ruling
upholding a landmark healthcare
law hit large health insurers.
Markets are especially skittish
about any shift in expectations for
the Eurozone as European Union
leaders began a two-day summit in
Brussels.
This is a process that is just
going to wind on and is going to
bring us periodic bouts of volatility
in our markets depending on the
news flow, said Matt Kaufler, port-
folio manager at Federated
Investors in Rochester, New York.
The Dow Jones industrial average
dropped 24.75 points, or 0.20 per
cent, to 12,602.26. The Standard &
Poors 500 Index shed 2.81 points,
or 0.21 per cent, to 1,329.04. The
Nasdaq Composite Index lost 25.83
points, or 0.90 per cent, to 2,849.49.
Stocks began lower and losses
accelerated after a divided US
Supreme Court backed the centre-
piece of President Barack Obamas
healthcare overhaul law.
The decision surprised many
investors who see the law, which
requires that most Americans
obtain insurance by 2014 or face a
penalty, as a hallmark of a business
unfriendly administration.
Shares later pared losses, though
major insurers such as Aetna,
which face more regulation, ended
lower. Other companies reliant on
Medicaid, such as Wellcare Health
Plans rose as their patient rolls are
expected to increase.
The Morgan Stanley healthcare
payor index added 0.6 per cent.
Aetna ended down 2.7 per cent to
$39.85; Wellcare jumped 8.8 per
cent to $53.98.
Because it was such an unexpect-
ed result from the Supreme Court
today you knew the market had to
have at least a short-term violent
reaction, said Jim Paulsen, chief
investment officer at Wells Capital
Management in Minneapolis.
At the end of the day what does
it really change for the perform-
ance to the end of the year - proba-
bly not much.
Shares of JPMorgan Chase
dropped 2.5 per cent to $35.88 after
a New York Times report projecting
that losses from a recent botched
trade could reach $9bn, more than
four times the original estimate. A
Reuters report estimated the losses
between $4bn to $6bn.
US-traded shares of Barclays
slumped 12.1 per cent to $10.84
after Britain said it had brought in
the fraud squad to investigate pos-
sible crimes over attempts to
manipulate lending rates, a scan-
dal that is expected to spread to
other banks. Lloyds fell 3.6 per cent
to $1.87 in New York. Bank of
America shares slipped 0.4 per cent
to $7.74
B
ANKING shares dragged Britains
FTSE 100 into negative territory
yesterday, battered by concerns
over the financial impact of an
investigation into the fixing of
interbank lending rates that has
already engulfed Barclays.
Barclays slumped 15.5 per cent in its
worst daily fall since 2009, with four
times the usual number of shares trad-
ed in London.
The Libor affair already is costing the
bank a record $453m in fines and
more worryingly for investors has
raised the spectre of chief executive
Bob Diamond being forced out.
Other banks also sold off sharply,
with RBS and HSBC also under investi-
gation.
The honest truth is that you have
absolutely no clue on what the impact
from litigation will be ... and that is
bad for the stock because it will create
more volatility for a very long time,
said Chirantan Barua, UK banks analyst
at Sanford Bernstein, adding that the
possibility of Diamonds departure was
also a big negative due to a lack of
good replacement.
There is too much volatility so what I
am advising clients is to lay up on the
side and watch this out for the next
few days.
Sandy Chen, analyst at Cenkos, fore-
cast multi-year provisions that could
run into the billions for the sector.
RBS, where the public fallout could
be much greater as it is owned by the
government, saw its shares fall 11.5 per
cent.
Banks as a whole slashed 29 points
off the FTSE 100. The benchmark blue-
chip index closed down 0.6 per cent, or
30.86 points, at 5,493.06.
The Libor jitters added to already neg-
ative sentiment in the financial sector
as a result of its exposure to the crisis-
hit Eurozone and its bonds.
Hopes of big new measures to ease
the strains were low as a two-day meet-
ing of European leaders kicked off yes-
terday, with Germanys Chancellor
Angela Merkel showing no sign of
relenting in her refusal to back other
countries debts.
People are right to be cautious that
you cant fix all of the problems of the
Eurozone with a two day summit so I
dont expect any magic wand solu-
tions, said John Haynes, head of
research at Investec Wealth &
Investment.
If the euro falls apart, its our
biggest trading partner, so we wont be
able to get out of the way of that.
UK data offered little cheer to
investors concerned about the health
of the economy, with a downward revi-
sion to fourth quarter gross domestic
product (GDP) and with housing prices
shrinking at their fastest annual pace
in almost three years in June.
The real estate sector fell 1.3 per cent.
Defensive companies such as utilities
and drugmakers whose goods are
needed even in tough times outper-
formed.
But Reckitt Benckiser fell 2.3 per
cent following a downgrade from
Credit Suisse.
Longer term, investors do see value in
UK stocks: a Reuters poll of more than
40 market participants showed the
FTSE gaining around six per cent in
coming months to end the year at
5,800.
Institutions appear to be reserving
their cash and at some point needs
must they will have to invest it, said
Max Bascombe, institutional salesman
at Merchant Securities.
Libor scandal drags FTSE 100 into
the red as banking stocks plunge
BESTof theBROKERS
Reckitt Benckiser Group PLC
3,440
3,420
3,400
3,380
3,340
3,300
p
3,293.00
28 Jun
3,360
3,320
3,280
RECKITT BENCKISER
Credit Suisse has cut its rating from outperform to neutral and has
dropped its target price from 38 to 35. The broker has also lowered its
earnings estimates for the coming two years by seven per cent thanks to
currency changes and a fall in output. Reckitts reliance on growth in the
developed markets means it continues to battle with economic
headwinds more than its peers.
FTSE
5,475
5,450
5,500
5,550
5,575
5,525
5,493.06
28 Jun
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in association with
Hargreaves Lansdown PLC
516
514
512
510
506
502
p
501.50
28 Jun
508
504
500
HARGREAVES LANSDOWN
Canaccord Genuity rates the investment firm buy with a target price
of 694p. The broker thinks Hargreaves will continue to grow its assets
under administration by an underlying 20 per cent a year, in spite of the
FSAs plans to shake up the investment platform market. The firms
position at the forefront of the industry will ensure it attracts new retail
customers, the broker reckons.
EVRAZ PLC
270
265
260
255
245
p
241.00
28 Jun
250
240
EVRAZ
Goldman Sachs rates the steel maker buy but has slashed its target
price from 700p to 410p. The broker has cut its forecasts for commodity
prices, resulting in a four per cent fall in assumptions across the industry
this year. However, Goldman remains positive about steel, and thinks
Evraz is well-positioned to improve as demand for its products in Russia
improves.
F
IVE years ago, the makers of
BlackBerry didnt believe the
iPhone was possible.
According to a former
employee, they held internal
meetings on 10 January 2007, the
day after the unveiling but six
months before it went on sale on 29
June, arguing that Apple was
fudging the truth: it was simply
impossible for a device that was
almost all touchscreen to work on
battery power.
How wrong they were. Thanks to
the willingness of Steve Jobs to
push the boundaries of the
possible, half a decade later Apple
has succeeded in maintaining its
lead. Every day of the first quarter
of 2012, Apple sold 377,959 iPhones
T
HERE can be little that is more
precious to a bank than a
reputation for integrity. The
revelation that Barclays has paid
a 290m fine for misconduct
with regard to the setting of
benchmark interest rates affecting
trillions of pounds of financial
contracts is a big blow for the banks
reputation. Cue politicians calling for
heads to roll and demands for criminal
prosecutions.
Yet the details of the Libor scandal
suggest that this goes beyond any one
bank. Every bank has multiple reputa-
tions with different stakeholders. It is
likely that the revelations about Libor
will impact Barclays reputation most
with regulators and clients. But, if
Barclays is guilty, so are many others.
UBS last year settled with regulators
and gained conditional immunity in
this affair. The list of those supposedly
still being investigated includes many
of the big international investment
banks. By being first to settle, Barclays
and its chief executive Bob Diamond
have exposed themselves to extra flak,
but this may have limited the size of
*Subject to terms, conditions and availability. Price valid as of 20 June. Book before 4th July for travel until 31 August. Fare is one way, inclusive
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TGIFLYDA
cityam.com/forum
The RBS computer
problems will likely
have a greater impact
on the individual bank
In association with
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
18
FRIDAY 29 JUNE 2012
KEN OKAMURA
Barclays reputation is severely
damaged but it will not be alone
the fines.
A key question is whether Barclays
reputation with customers has been
affected. The large decline in the share
price of Barclays can be seen as an
attempt by the market to assess poten-
tial future liabilities. Academic
research shows that in addition to the
cost of fines and settlements, incidents
of rule breaches only have significant
negative effects on the market capitali-
sation of firms if customers or share-
holders are negatively affected
breaches of, for example, environmen-
tal laws have no further effect on mar-
ket capitalisation. The logic being that
firms suffer from a decline in business
or a higher cost of capital if the offence
is committed against customers or
shareholders, but not if it is against
third parties. At first glance this might
suggest that Barclays will suffer further
losses, as some customers may well
have been negatively affected by the
compromising of Libor. But, given the
way that Libor is set, Barclays by itself
could not have significantly impacted
the level of Libor. This diffusion of
blame for the Libor rate fixing means
that Barclays reputation with its cor-
porate and institutional customers is
unlikely to suffer relative to its com-
petitors. This is part of a trend over the
past decade in the US and globally
where major banks have settled with
(primarily US) authorities over issues
such as independence of research and
mortgage foreclosures, and seen little
harm to their reputations with corpo-
rate clients. It is perhaps a little disap-
pointing that we are left with the
feeling after these repeated settle-
ments and fines that most banks are
no worse than any of the others.
Indeed, while the Libor scandal has
helped to chase the RBS computer
problems from the front page, it is pos-
sible that the latter will be the one that
has a greater impact on the individual
bank. The computer problems at RBS
hit the reputation of the bank for com-
petence with its customers. Unlike the
slightly involved explanations of Libor,
the computer glitch has impacted
many more customers directly. And
blame cannot be spread around the
sector as a whole.
This leads us to reputation with regu-
lators. The Libor fixing may have more
serious implications for regulation. The
setting of Libor was one of the few
areas of self-regulation remaining in
an increasingly rule-bound financial
world. The assumption that reputa-
tional concerns and self interest would
bind banks to report honestly their
cost of funding has been shown to be
misplaced. The demands for more
onerous regulation are increasing,
although it is not clear that the extra
rules being mooted will solve cultural
problems or excessive risk taking. Once
again, it is not just Barclays that is in
the frame here, but the entire banking
sector. Banks share a common, and
increasingly poor, reputation with reg-
ulators.
Finally, it is important that UK regula-
tors and politicians do not go too far in
their outrage. What is required is judi-
cious regulation to prevent a repetition
of the problem and suitable penalties
for wrongdoers. There is some pressure
from US politicians to add to the
London problem meme, suggesting
that boom time scandals are concen-
trated in the UK. Yet the present bench-
mark interest rate fixing scandal also
involves Euribor and Tibor, the bench-
marks of the Eurozone and Japan, nei-
ther market known for light touch
regulation. The UK needs to maintain
its reputation as both a clean and com-
petitive financial hub.
Ken Okamura is a researcher at the Oxford
University Centre for Corporate Reputation.
more than the daily average of
babies born worldwide over the
same period. More significant still,
Apple takes a massive 73 per cent
of the smartphone markets
operating profits, according to
analyst Horace Dediu of Asymcos
calculations this May. Thats
thanks largely to mobile carriers
willing to pay a fortune to provide
the latest Sir-Jony-Ive-designed
phone.
The triumph of the iPhone is a
multi-layered business
achievement, in which industrial
design, technological envelope-
pushing and a brilliantly-managed
supply chain all combine to justify
the devices price. Despite the
complaints, and there have been
plenty, there have always been too
many other reasons to stay with
the iPhone. Limited battery life,
especially of the early models,
criticisms of handsets locked to
specific carriers, even sometimes
its limitations as an actual phone
have not been enough to dissuade
its fans.
But perhaps the real lesson to
draw from this world-conquering
gadget is the extent to which its
success rests on providing a
platform for other peoples
creativity. Through its teeming app
store, the iPhone has opened up
the universal flexibility of
computers for a whole world of
developers.
The Swiss army knife of mobiles,
it can be whatever you need: a
notepad, a spirit level, a games
console, a photo album, even a
library. And if you need a service
that doesnt exist, you can
program it and sell it on the app
store yourself.
Steve Jobs sometimes said that
his central achievement was to
bring a liberal arts sensibility to
computing, and the iPhone shows
that as well as anything else. A
liberating device, it blends ease of
use with aesthetic elegance,
making complex technology into a
universally accessible experience.
At the same time, it throws down
the gauntlet to its users to engage
with its computing power and
turn it to the best uses they can.
Apple has put a marketplace of
invention at the heart of its family
of devices. The iPhones success is
built not just on its own ingenious
design, but on offering a platform
where we can all use our
imaginations to serve one another.
Not a bad legacy for a five-year-old.
Marc Sidwell is managing editor of City
A.M.
THE LONG
VIEW
MARC SIDWELL
Steve Jobs made the right call: Apples ingenious iPhone turns five today
AY!
Fly to France for the weekend
from just 79
*
one way.
Bonne n de semaine!
19
Victim of Libor?
[Re: Libor manipulation scandal is a
disastrous own goal for City, yesterday]
Back in the 1990s, my business had a Libor-
linked loan with Barclays Commercial. Every
quarter, when we came to settle, it
mysteriously jumped 0.125 per cent or 2.5
per cent. After the first few times this
happened, I started to keep a daily graph
and around the time of our quarterly set it
used to go up, sometimes as much as 0.375
per cent. Throughout the time we were on
Libor, it was always set 0.25 per cent above
base rate. When rates were 6 per cent, these
small blips were bearable and were
dismissed as bad luck. After this weeks
news, Im not so sure.
SteveBritt, managingdirector of Anchor
Storage.
Tax and voters
[Re: Should the UK create an industrial
strategy to guide the economy?, yesterday]
Kevin Dowd is right. Civil servants, like Vicky
Pryce, arent qualified to determine which
investments will pay off in the future. The
problem is that activist government is
strangely popular. Voters must be
convinced that governments simply cant
do everything.
JamieCauvain
[Re: The UKs consumer debt burden is sti-
fling hope of economic recovery, yesterday]
Excellent MPs like Kwasi Kwarteng need to
come up with costed alternatives to the
Budget. Vague mention of tax cuts isnt
enough to change anything.
Phil Anderson
B
RITAINS businesses and
working families are paying
a heavy price for the
governments mistakes.
Abandoning the last Labour
governments balanced plan for
deficit reduction, and raising taxes
and cutting spending too far and too
fast, has choked off recovery and
pushed the UK into recession. As the
only G20 country other than Italy
already in a double-dip recession,
our economy is in a weaker state to
withstand the global storm.
The costs of this error go far beyond
immediate hardship. George
Osbornes years of lost growth are a
permanent setback to real incomes
and are doing lasting damage to our
economys productive potential.
New analysis I presented yesterday
to the Resolution Foundation shows
that the real disposable income of
the average UK household is expected
to be 1,700 lower in 2015 than fore-
cast in 2010 before the chancellors
austerity measures had hit confi-
dence, employment and earnings.
Even these figures are based on the
Office of Budget Responsibilitys
(OBR) March forecasts, released
before we knew the economy was in
a double-dip recession.
More worryingly, the longer this
goes on, the more difficult it will be
to turn the situation around.
Confidence in our economy is so
low that businesses are holding back
investment, and banks are cautious
about lending. The OBRs projections
for the chancellors hoped-for renais-
sance in business investment have
been repeatedly pushed back. Every
delayed investment is a permanent
setback to the UKs ability to raise
productivity and competitiveness.
And there is evidence that the slow-
down is eroding the UK workforces
productivity and future earnings
potential. Skills investment is under
TOP TWEETS
Barclays has saved taxpayers 50m on bikes,
but if its employees have engaged in criminal
behaviour then bang em up.
@MayorofLondon
Of course financial corruption at Barclays is
the problem. Whats the cause? State inter-
vention, especially socialised risks.
@SteveBakerMP
Leaving David Beckham out of the Olympic
squad is a disgrace. He was a major influence
on the country getting the Olympics.
@OilPriceBates
Kwasi Kwarteng is right. Weve got to cut tax
and get the economy going.
@mchadwickcarbon
Is News Corporations decision to split itself
into two separate companies a good move?
YES
News Corps plan to split its entertainment and publishing assets
should help resolve the conglomerate discount which undermines its
equity value. Over time, it will allow capital to be allocated more
rationally across the businesses. We imagine growth-oriented
investors will favour the much larger, higher margin entertainment
business. The publishing entity is less attractive at face value, but
could work with a big dividend payout ratio. Separately, this strategic
move will increase the probability that News Corp (entertainment)
can bid for BSkyB again, as print assets are kept at arms length. The
time horizon is unclear and the UK regulator will not be taken in by
this change of corporate structure per se, but its a step in the right
direction. BSkyB shares may regain some bid speculation in the price.
To be clear, there is no sense of any change in control. This is about
industry focus and value creation. It should be applauded.
Alex de Groote is a media analyst at Panmure Gordon.
Alex DeGroote
NO
Chris Hutchings
News Corps break-up is a necessary commercial move, isolating its
entertainment arm from ongoing harm to its reputation from
ongoing phone-hacking claims. But is it good for the public at large?
Publishers are fighting to shift their business model from hard copy
form to online content. Revenue in 2010/11 from News Corp's
publishing arm was one third that of its TV and film counterpart;
5.6bn to 15bn respectively. The entertainment arm effectively
subsidises the less profitable publishing division. A loss in resources
for the publishing company will reduce standards and quality of
journalism, not only within the News Corp group of papers but in the
broader market. Long-standing and renowned titles are now at risk
of being sold to other newspaper operators, some of whom would
lower their quality. This would be bad news for the public, in an era
where greater accountability and responsible journalism is required.
Chris Hutchings is media partner at Hamlins LLP.
RAPIDresponses
Coalition policy is
damaging longer
term productivity
pressure. And the scarring effects of
joblessness translate directly into
lower lifetime earnings and living
standards. These effects worsen the
longer someone is unemployed.
The longer businesses postpone
investment and the longer people are
unemployed or underemployed, the
less productive and competitive our
economy will be in future, and the
lower our long-term rate of growth.
There must be tough decisions on
tax, spending and pay. Government
must be ready to take action to sup-
port jobs and incomes, and stimulate
business investment. Our plan
includes accelerated investment in
infrastructure and tax breaks for
firms that take on new workers.
We need an active government
strategy to encourage investment in
high-value sectors. I am working with
Ed Balls and Chuka Umunna to iden-
tify the levers we could use from a
more strategic use of government
procurement powers, to promoting
apprenticeships and incentivising
innovation, to examining how a
British Investment Bank could
improve the flow of finance into pro-
ductivity-raising investments.
There is much more that an active
government could be doing to get
our economy moving again, and to
secure our ability to pay our way in
the world in the future. But the
longer the economy is allowed to lan-
guish in its current weakened state,
the harder that job will be.
Rachel Reeves is Labour MP for Leeds West
and shadow chief secretary to the Treasury.
FRIDAY 29 JUNE 2012
RACHEL REEVES
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one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
20
FRIDAY 29 JUNE 2012
cityam.com
PROPERTYTECH HOMES
Our pick of Europes
best former celebrity
residences: Page 28
Q
Do you think the Olympics are
going to put a brake on the
property market and should I
withdraw my flat while
theyre on?
A
It seems to have become
fashionable to assume that
everything is going to grind to
a halt. Whilst this may be true
of the traffic in some parts of the
capital, I cant help thinking that if
I was a wealthy foreigner (and you
have to be to buy the flipping
tickets), Id be bringing a little extra
cash in order to investigate the
fabled London property market
while I was here. As many as a third
of the London workforce are being
encouraged to work from home
SALES HOTTING UP AT
VERMILLION DEVELOPMENT
The Vermillion development
in Canning Town, a 271-unit,
mixed use development
comprising one, two and
three bedroom flats, has
seen buyers flock to its
ultra-modern apartments
since its launch earlier this
year. The project includes an
innovative eco-garden
that can water itself. Many
of the flats benefit from a
balcony or terrace, as well
as use of the garden.
Vermilion has Rathbone
market on its doorstep
one of the East Ends oldest
markets and is close to
Canary Wharf, Stratford
City, the O2 Arena and other
major transport links. For
more details log on to
vermilionlondon.co.uk or
call Hamptons International
on 020 7758 8481.
during the games but I have a
sneaking suspicion we could be
busier than we think. This year has
not really conformed to type in
central London, with macro-
economic, geo-political and
currency events dictating the speed
of the market and not the seasons.
DIRECTOR
DOUGLAS & GORDON
ED MEAD
Q
A
and
With supply still limited, those
coming over are most likely to be
looking for investment properties,
so cheaper one and two bedroom
flats are most likely to be of interest.
If you own a property that your
agent thinks might appeal, Id gird
your loins rather than abandoning
the market. Id certainly be getting
three estimates from local agents as
to what your property might rent
for and Id make sure my agent
quoted that in the listing details
and online. Indeed, if you feel your
agent is not doing what you want, it
might be worth instructing another
one as well (preferably with a decent
high street presence) to take
advantage of increased footfall
during the games.
You wouldnt buy a car without a few gadgets in it why should it be any
different for your home? Steve Dinneen looks at the latest high-tech properties
HYDE PARK
19.5m
For the best part of 20m, you expect a few bells and
whistles. Fountain House certainly provides them.
Almost everything can be controlled with Star Trek-style
central control panels, including lighting, audio-visual,
curtains and blinds. It comes with a 16 point stereo
system, video entry, built-in BluRay and iPod docks and
the ready-laid wiring to add even more gadgetry. All
that, and it looks rather nice, too. Time to get saving.
Contact Knight Frank on 020 7226 1313.
T
he "internet of things" is big
news right now. Its the idea
that anything with an electrical
plug can become a smart
device, connected to the web.
Companies like Intel have been
busy showcasing everything from
smart gas metres to intelligent wash-
ing machines but it is only recently
this smart technology is moving out
of the showroom and into your
home.
For an idea of what you can expect
from a futuristic home, look no fur-
ther than the new ultra high-tech
Ebony Suite at the May Fair Hotel,
whose gadgetry includes a colour-
changing bathtub, heat-sensitive
sinks and a 25,000 toilet that will...
well, you can probably work that out
for yourself.
Almost everything in a modern
home can be digitalised and person-
alised to save you time. The latest
homes have fully programmable cen-
tral heating, allowing you to save
energy in the rooms you dont use;
light sensitive blinds to keep the sun
out of your eyes without a trip to the
window (not that you would notice,
given the recent weather); smart
metres that can connect to the
national grid and switch between
providers to get you the cheapest deal
at different times of the day.
The question is are these just luxu-
ries or are tech homes also a savvy
investment? Charlie Bubear, from
Savills Chelsea, said: It is a very
mixed opinion. There are those who
love to have all the toys and want to
be able to control their TV, curtains,
fireplace and everything else from
one controller and there are those
who find that far too complicated
and would rather a simple dimmer
switch to turn on the light.
Developers will always put in the
maximum amount of technology as,
on the whole, it does add value.
However, this isnt always the
case I have sold properties where
someone has installed 200,000
worth of electronic gadgets and the
buyer has had it all removed it real-
ly is down to the individual.
It should be a consideration for sell-
ers, though most people do put it in
as it is a selling point.
While the jury may be out on
whether installing the latest kit will
make you rich, it will certainly make
your life easier. People already expect
the latest technology in their cars, be
it smart brakes to make them safer or
air-conditioning to make them more
pleasant. But even the longest com-
muters spend more time at home
than they do on the road. So what are
you waiting for?
CASE STUDY 2:
FOUNTAIN HOUSE
CASE STUDY 3:
HALCYON HALL
RADLETT, HERTFORDSHIRE
12.95m
If security is your number one concern, this high-tech
fortress could be your dream home. The bathroom
doubles up as a safe-room just close the door in a
certain way and three steel bars will make sure no
intruder can follow you inside. The advanced camera
security system is all centrally controlled and you can
even keep an eye on what is going on while you are
abroad by watching the video feed on your iPad.
Contact Savills on 020 7226 1313.
CASE STUDY 1:
WATERFORD HOUSE
WENTWORTH
4.25m
Imagine a home that knows to have a
steaming hot bath ready the moment
you come home from work. Now stop
imagining it and move to Waterford
House. Other gadgetry in this tech haven
includes blinds and curtains controlled
by wifi tablets; biometric and keypad
entry controls; a whats turned on
screen to see where you are spending
money on electricity and fully
centralised control over lighting great
for both security and convenience.
Contact Knight Frank on 01344 840 020.
The Olympics could be a great chance
for the savvy to tap foreign investors
China Wharf SE1
985,000 leasehold
A 2 bedroom, 2 bathroom river fronted duplex apartment with direct views across
the River Tames, Tower Bridge & the City. Benefts from a terrace, balcony & parking.
Te Paragon SE1
495 per week
A well presented & quaint 2 storey Victorian house set within the grounds of a former
school. Tis property benefts from a modern kitchen & bathrooms whilst retaining its
originality & charm.
Pilgrims Mews E14
699,950freehold
Ofered to the market for the frst time is this excellent 4 bedroom end of terrace modern
house in the portered Virginia Quay development. Te house benefts from a mature
45ft garden, an abundance of light & a very spacious 1st foor reception room.
Belgrave Court E14
685 per week
A stunning property in this prestigious Canary Wharf development. Comprising 2
double bedrooms, a study, spacious reception room, balcony with direct river views &
allocated parking. Te development benefts from porterage & is located in the heart
of Canary Wharf.
Tower Bridge & City
020 7357 7999
sales.towerbridge@chestertonhumberts.com
Tower Bridge & City
020 7357 6911
lettings.towerbridge@chestertonhumberts.com
Canary Wharf & Docklands
020 7510 8300
sales.canarywharf@chestertonhumberts.com
Canary Wharf & Docklands
020 7510 8310
lettings.canarywharf@chestertonhumberts.com
chestertonhumberts.com
c
e
l
e
brat
i
n
g
2012
22
cityam.com
Scan Here For More Info
All images are computer generated.
* = 76,000 for a 40% share of the full market value of 190,000
STOP
RENTING
1&2
NEW
APARTMENTS
BEDROOM
SHARED
OWNERSHIP
Computer generated image
Millennium Horizon apartments are a
collection of contemporary one and
two bedroom apartments in the heart of
Canning Town. The apartments offer modern
specications, a host of eco features, with
some apartments beneting from views of the
City including the Millennium Dome. Prices
start from as little as 76,000 for a 40% share*
LAUNCH WEEKEND 23 & 24 JUNE 2012
T: 020 8357 4444
E: sales@nhhg.org.uk
www.nhhg.org.uk/millennium
FRIDAY 29 JUNE 2012
PROPERTY INTERIORS
Try a little boudoir chic
to liven up your home
Steve Dinneen suggests some gothic furniture additions
Golden overmantle mirror
Add character to a room with this
aged mirror, which features a mottled
effect on the glass 375
mirrorstoday.co.uk
Lofty chaise longue
No boudoir is complete without a
chaise longue this gives it a modern
twist and a distinctly retro feel
3,125 designtoday.eu
Jonathan Charles black screen
For a splash of instant elegance, try
incorporating this walnut-framed
screen 1,866
pavilionbroadway.co.uk
Tiffany French display cabinet
This French-inspired piece of furniture
will be as much of a talking point as
the items you keep inside it 1,200
belleinteriors.co.uk
Florence chandelier
A black chandelier may sound like a
prop from a vampire movie but this
subtle example is a classy piece
1,625 johnlewis.com
Silver glass stool
Sometimes its the little things that
count and this small stool will lend
style to any room 175
belleinteriors.co.uk
Digital illustration is indicative only. Prices correct at time of printing.
www.ixialondon.co.uk 020 7101 0214
Contemporary 1 & 2 bedroom apartments and highly
specified 2 & 3 bedroom penthouses
+ 0nly a few minuLes walk from
0ld SLreeL and Lhe CiLy
+ ldjusLable meLallic shuLLers, for privacy,
lighL and shade
+ Underfloor heaLing and comforL cooling
+ Highly specified aparLmenLs wiLh a
balcony or Lerrace
Show Apartment launching 5th July
Now is your chance to live
in Shoreditch
1 bedroom apartments from 384,950
Ixia. Let life unfold
Want to know more? Call 020 7101 0214
Ixia | East Road | Shoreditch | London | N1 6AA
ixia
@
crestnicholson.com
Selling Agent: Hurford Salvi Carr

in Shoreditch

in Shoreditch


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LONDON
BAROMETER
ED MEAD
DIRECTOR OF DOUGLAS & GORDON
23
FRIDAY 29 JUNE 2012
cityam.com
PROPERTYSALES
1200
1000
800
600
400
200
0
Jan2012
high(1029)
Dec 2011
low(211)
Sep Oct NovDec Jan Feb Mar Apr MayJun Jul Aug
2010 2011 2012
Demand
500
400
300
200
100
0
Sep Oct NovDec Jan FebMar Apr MayJun Jul Aug
July 2010
high(448)
Dec 2006
low(127)
Supply
2010 2011 2012 Demand 2012
Demand 2011
Supply 2012
Supply 2011
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1600
1400
1200
1000
800
600
400
200
0
Supply & Demand
DOUGLAS & GORDON AVERAGE LONDON SALES PRICE INDEX
Q2 2011 Q3 2011 Q4 2011 Q1 2012
1 bed flat 374,167 383,750 387,500 404,167
2 bed flat 557,083 570,083 579,583 608,333
3 bed house 1,209,583 1,257,500 1,277,083 1,340,000
4 bed house 1,905,833 1,905,000 1,933,333 2,006,250
T
HE LONDON property market
continues to be seen as a safe
haven in turbulent economic times,
with record numbers of properties
being sold to international buyers.
Previously international buyers have
focused on prime central London, but
recently we have seen purchasers from
Russia, America and France buying across
south-west London in Battersea Park,
Southfields, Pimlico and Hammersmith.
As a result of the recent French elections,
French buyers have been active across the
London market at all price levels, earning
London the title 6th biggest city in
France.
Despite increasing demand and low stock
levels, buyers are determined to weather
the economic and mortgage storm but
seem to be reaching their limit of price
elasticity at the moment.
The number of flats on the market is
lower than this time last year as a result of
the increase in buy-to-let landlords buying
in time for the summer lettings market. Properties are still short in supply, but swift buyers can still grab a good deal
London still
outperforms
the rest of
the country
Knight Franks head of residential
research, Grainne Gilmore, on the market
FRIDAY 29 JUNE 2012
24 PROPERTY INTERVIEW
London Estate Agents | Investment & Development Consultants | Block Managers | Established 1982
CONNAUGHT SQUARE, HYDE PARK, W2
2 Bedrooms 2 Bathrooms Utility Room Private
Courtyard Close to Hyde Park and Marble Arch
Transport Links
850 Per Week Unfurnished
HEREFORD ROAD, BAYSWATER, W2
Bedroom Modern Bathroom Top Floor Private
Roof Terrace Amenities and Transport Links of
Bayswater and Notting Hill Gate Nearby
525 Per Week Furnished
HALLAM STREET, MARYLEBONE, W1
2 Bedrooms 2 Bathrooms Period Conversion
Newly Refurbished Second Floor with Lift Close to
Great Portland Street and Regents Park
1,250 Per Week Unfurnished or furnished
HYDE PARK STREET, HYDE PARK, W2
3 Bedrooms 2 Bathrooms Double Reception
Fourth Floor with Lift Good Storage Moments
from Hyde Park and Marble Arch Underground Station
1,595 Per Week Furnished
WIMPOLE STREET, MARYLEBONE, W1
3 Bedrooms 3 Bathrooms Period Conversion Wood
Flooring Third Floor with Lift Close to Marylebone
High Street and Bond Street Underground Station
1,400 Per Week Unfurnished or Furnished
020 3394 0029 kayandco.com |
Scan here to access our
mobile website
ST VINCENT STREET, MARYLEBONE, W1
3 Bedrooms 2 Bathrooms Third and Fourth Floors
Private Terrace Close to Marylebone High Street
and Bond Street Underground Station
1,450 Per Week Furnished
ALBANY STREET, REGENTS PARK, NW1
2 Bedrooms Bathroom Cloakroom Period Conversion
Excellent Storage Close to Great Portland Street
Underground Station and Regents Park
575 Per Week Unfurnished
Q
What is happening to London
prices at the moment?
A
London property continues to
outperform the rest of the UK
market. The latest official data
showed that average house prices
across the capital are up 5.1 per cent
year on year, compared to a one per
cent fall across England and Wales.
The average price of a home in
Kensington & Chelsea climbed
above 1m in April, the first time
this has happened in a London
borough. There is optimism going
forward too homeowners in the
capital are more upbeat than those
in other regions that the value of
their home will rise over the next 12
months, according to the latest
monthly Knight Frank/Markit House
Price Sentiment Index.
Prime central London property
prices have also risen strongly over
the last year. The latest Knight Frank
data shows that luxury homes in
central London have risen in value
by more than 10 per cent over the
last 12 months and are now at a
record high.
Q
Why are luxury home prices
rising?
A
There is strong demand for
homes in London, both from UK
and overseas buyers. This
demand, coupled with limited
supply, is helping prices to advance.
The political and economic
environment both in the UK and
overseas is also playing a part. It is
now a well-worn phrase, but there is
no doubt that bricks and mortar in
London is seen as a safe haven
investment class, especially
amongst those keen to diversify into
sterling denominated assets.
There has been increased interest
from buyers from the Eurozone
during the financial and economic
crisis which continues to dominate
in the single-currency area.
Interestingly, Greek buyers, who
were particularly active last year,
have been less dominant in the
early months of this year, while
Italian buyers have stepped up their
activity markedly, overtaking
Russian buyers as the top overseas
purchasers in Prime Central London
in the first three months of the
year. French interest in prime
central London property has also
been high. There was a surge in
searches on Knight Franks global
website for luxury homes in the
capital, especially worth 5m or
more, when Francois Hollande, now
the French president, announced
his plans to increase tax to 75 per
This five-bedroom family house in
Barons Court, West London, is on
the market to rent for 4,766 per
month, through Knight Frank.
cityam.com
25 PROPERTY INTERVIEW

Travel times and distances are approximate, sourced from
maps.google.co.uk and www.nationalrail.co.uk. Prices and
details are correct at time of going to press, June 2012.
WIMBLEDON
VILLAGE

Situated behind a magnicent gated entrance sits
an exclusive collection of ten luxurious three to six
bedroom houses

Individually designed to a high specication, the
properties offer both traditional and contemporary
architectural styles

Located within moments of the shops and restaurants
on Wimbledon Village High Street

Excellent road and rail links (17 minutes to Waterloo
from Wimbledon Station)
Marketing Suite, Edge Hill, Wimbledon Village,
London SW19 4RB
Open Thursday to Monday,
10am - 5.30pm
Prices from 2.45 to 4+ million
CALL FOR MORE INFORMATION
T 020 8879 0222 W www.londonsquare.co.uk
BEAUTIFUL HOUSES IN
JUST THE RIGHT PLACE
SW19
cent for the top earners in February.
Q
How does the rise in value
in luxury property in
London compare to
elsewhere?
A
Prime central London saw
the biggest price growth of
any prime European
property market in the year to
March, with Manhattan in New
York just behind with 9.2 per
cent growth in prices. However
both were outpaced by the 14 per
cent rise luxury property prices
in Miami and Jakarta, while all
cities were overshadowed by a 25
per cent rise in luxury property
prices in Nairobi, albeit from a
comparatively lower base. At the
other end of the scale, luxury
property prices in Mumbai have
fallen by around nine per cent in
the year to March, reflecting the
cooling measures introduced by
policymakers in the region.
Q
Are the recent stamp duty
changes having an impact at
the top of the market in
London?
A
In Marchs budget, the
Chancellor increased the
stamp duty charge on homes
worth 2m and more from five per
cent to seven per cent for
individuals buying a property. The
stamp duty charge was raised to 15
per cent for some of those buying
property through a company
structure.
The move has had little effect
on prices so far, but there is
emerging evidence that activity
levels are being affected. The
number of exchanges for
properties worth 2m in May this
year was 25 per cent lower than in
May last year, although there was
a rise in transactions of properties
worth less than 2m.
Buyers who traditionally chose
to purchase through a company
structure are examining their
options, especially as some
elements of the new regime an
annual charge and the widening
of the capital gains tax levy are
still under consultation and are
unlikely to be finalised until next
year.
Q
What about the rental
market?
A
Average rents across London
have risen by more than 4 per
cent over the last year,
reflecting the continued demand
for rental property given the
constraints in mortgage lending
which is proving an
insurmountable barrier for many
would-be first-time buyers.
The dynamics of the prime
rental market in London are
slightly different, as more
properties have come onto the
market recently, diluting demand
somewhat and causing recent
monthly declines in rents. Yet
average rents are still just one per
cent below the record high set in
September last year.
Demand may well pick up in the
coming months as families start
thinking about where they would
like to be located ahead of the new
school year, and overseas students
(there are more than 100,000
overseas students studying in
London) start to arrive for the new
University term in October.
Q
What happened to the
Olympic effect?
A
Demand for short-term rentals
has so far been more muted
and localised than many were
expecting. The release of
thousands of hotel rooms
previously block booked by the
London Organising Committee for
the Olympic Games (LOCOG)
earlier this year means that those
looking for accommodation have
had more choice.
Q
Whats on the cards for the
rest of the year?
A
We see prices in prime central
London rising five per cent
this year if the Eurozone stays
intact. However a disintegration of
the Eurozone may actually push
more capital into Londons bricks
and mortar in the aftermath of
the break-up amid a capital flight
to safety.
Gianni Versaces legendary Miami villa is now on sale for $125m through Coldwell Banker. He was shot on its
steps in 1997, but thats no deterrent to the pool of super-rich potential buyers.
FRIDAY 29 JUNE 2012
26
cityam.com
PROPERTY CELEB HOMES
Q
I own an apartment in
central London with a 125
year lease, which I am
thinking of selling in the
next couple of years. The other
flat owners and I have been
offered the opportunity to buy
our freehold. Is this something I
should do before I sell?
A
There is no question that,
generally speaking, purchasers
prefer to buy in buildings
where they own the freehold.
The difference in value between the
long leasehold which you currently
have and a 999 year lease with a
share of the freehold is probably
only one per cent. While it may not
enhance the value significantly,
what it will do is make your
To buy or not to buy: is the freehold worth aquiring?
apartment more attractive and
essentially more saleable to a
potential purchaser. The most
significant advantage of owning
the freehold is having control of
the service charge levels and when
and how the building is maintained
and to what degree. Naturally the
condition of a building makes a
substantial difference to the price
MANAGING DIRECTOR, KAY & CO
Q
A
and
at which a flat can be sold: a good
flat in a smart building is always
worth significantly more than the
equivalent flat in a scruffy
building. However, all too often,
maintenance of buildings by a third
party freehold are done to a poor
standard, in an untimely manner
and at a cost which does not offer
true value for money.
Ownership of the freehold
makes you master of your own
destiny and you and the other
residents can ensure that the
buildings running costs are
relatively constant. You can also
avoid large unexpected service
charge bills through careful
planning of future maintenance
and through the provision of an
adequate sinking or reserve fund
GOLFE POENTE
Quinta do Lago, Portugal
Artyon Senna, the late Brazilian
race-driver, used this house as
his European bolthole when
competing in Europe. Its a nine-
bedroom estate with a flood-lit
football pitch and tennis court,
sunken trampoline, dog kennel
and a spacious layout. Senna,
born in a ritzy part of Sao Paulo
in 1960, was considered the
best F-1 driver of all time. He
died in a crash at Tamburello
corner while leading the 1994
San Marino Grand Prix.
8.5m through Savills, 020
7016 3740
GRASSE, COTE
D'AZUR
Cote dAzur, France
If it was good enough for
Brigitte Bardot, it might be good
enough for you if youve got
9m. Panoramic views of
countryside to the sea, this
house is over four floors, with
large terraces, a swimming pool
and guest house as well as six
bedrooms, 80 olive trees,
wine production of
approximately 1,000
bottles per year, an artists
studio, spa and pool
house set amid stunning
landscaped
gardens.9.5m through
Knight Frank, 020
7629 8171
CHATEAUNEUF-
GRASSE
Provence, France
This heavenly estate, perched on
a hilltop between Chateauneuf-
Grasse and Valbonne, was
owned by Edith Piaf. Impeccably
restored, it features a master
suite with its own terrace and
study; a guest house, pool and
pool house; summer kitchen,
tennis court, landscaped
gardens. The seven-
bedroom villa is
25km from the
airport and 8km from
a prestigious
international school.
6.89m through
Knight Frank, 020
7629 8171
FARMHOUSE,
Rechthalten, Canton
Fribourg, Switzerland
Frida Lyngstad from ABBA
owned this Swiss farmhouse
from 1990 until 2002. Only on
the second viewing did the
current owners realise who
they were buying the house
from, the clue being the gold
Abba discs decking the rooms.
Wonderful mountain views,
three bedrooms and a
separate guest house
make this a supremely
desirable property.
3.5mCHF through
Chesterton Humberts
International Office, on
20 3040 8210
Versaces place is
for sale at $125m...
here are Europes
rival celeb homes
which is built up over time to pay
for major repairs such as a new
roof or replacement lift. Be
warned, however: a good
managing agent is going to be an
essential part of this process going
forward as you are likely to
struggle to run the building on
your own. I have personally taken
over numerous buildings that
have been poorly managed in the
past by absentee freeholders and
have found that, on average,
running costs can be driven down
by about 15 per cent through
prudent efficiency savings, which
will a big attraction for any
incoming purchaser. In
conclusion, I would say that the
acquisition of the freehold is
something that will benefit you
when you come to sell and given
the length of your current lease it
is unlikely to be particularly
expensive either, relative to the
benefits that you will derive. The
only issue we find is that when
residents do actually own their
freehold collectively, the key is to
ensure that there is a fair voting
system in place so that the
majority can dictate what
happens to the building,
otherwise nothing tends to
actually get done as parties argue
about what they want done and
what they do not want to have
done. In this situation having
someone else actually own the
freehold and controlling the
building can be the lesser of two
evils.
MARTIN BIKHIT
f y f e m c d a d e
e s t a t e a ge nc y b y
020 7613 4044
nine high-end luxury dwellings in the heart of
Shoreditch a sophisticated world-class area for
city and creatives.

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FRIDAY 29 JUNE 2012
28
cityam.com
PROPERTY FOCUS ON
Lender Fixed/Flexible Rate Until APR Maximum Loan
(per cent) (per cent) to Value (per cent)
Chelsea BS Flexible 2.39 May 2014 5.4 70
Norwich & Peterborough BS Flexible 2.49 2 Years 4.7 75
Yorkshire BS Flexible 2.49 June 2014 4.7 75
Vernon BS Flexible 2.6 2 Years 4.7 70
First Direct Flexible 2.69 2 years 2.8 65
HSBC Fixed 2.64 September 2014 3.9 60
Cumberland BS Fixed 2.99 August 2014 4.4 60
Leeds BS Fixed 3.15 August 2014 5.6 75
Post Office Fixed 3.39 August 2015 4.4 75
THE GROVE
Price: 695,000
A four bedroom townhouse with open plan living space, three bathrooms and
accommodation over three floors. It has designer bathroom suites and tradi-
tionally styled kitchens with stone worktops. Contact Knight Frank on 020 7861
1033 or go to knightfrank.co.uk.
FOCUS ON: GUILDFORD
POPLAR
ROTHERHITHE
LIMEHOUSE
Canary
Wharf Canary
Wharf
CANARY WHARF
King Edward
Memorial Park
Park
Limehouse
Heron Quays
Westferry
All Saints
Langdon P
West
India
Quay
Poplar
MUSEUM OF
LONDON
DOCKLANDS
LIMEHOUSE BASIN
*Based on a 40% share of a one-bedroom apartment with a full market value of 220,000. Information correct at time of
going to print July 2012. Your home may be at risk of repossession if you fail to keep up repayments on a mortgage or other
loan secured against it. Terms and conditions apply please call for details. A2Dominion New Homes is a trading name of
the A2Dominion Housing Group Ltd, an exempt charity (I&P Soc. No. 28985R, TSA Reg. L4240) and its legal subsidiaries.
For the full list, visit www.a2dominion.co.uk. Registered ofce: Capital House, 25 Chapel Street, London NW1 5WX.
Gardens
Bartlett
ark
A QUALITY SELECTION OF ONE, TWO
AND THREE-BEDROOM APARTMENTS
AVAILABLE THROUGH THE SHARED
OWNERSHIP SCHEME
AVAILABLE TO PEOPLE WHO LIVE OR WORK IN THE LONDON BOROUGH OF TOWER HAMLETS
Open day Saturday 7th July Between 10am -3pm
(by appointment only)
E 14
ASPIRE
For more information contact us now on
0800 783 2159 newhomes@a2dominion.co.uk
Prices Start from 88,000
*
BOXGROVE AVENUE
Price: 895,000
A family home with accommodation arranged over three floors, with a
master suite located on the second floor and a guest suite, three further bed-
rooms and a family bathroom on the first floor. Contact Savills on 01483 796
820 or go to savills.com.
LITTLE OAK
Price: 1.25m
A four bedroom family home with large reception rooms accessed from the
main entrance hall. The double-aspect sitting room includes a large inglenook-
style fireplace. There is also a conservatory, which is being used as a dining
room. Contact Knight Frank on 020 7861 1033 or go to knightfrank.co.uk.
OLD WESTWICK
Price: 2.75m
Old Westwick is an eight bedroom Edwardian house with pebbledash and tile-
hung elevations under a plain tiled roof. It retains many of the original features
including leaded windows, fireplaces, moulded picture rails, dados and
detailed cornices. Contact Savills on 01483 796 820 or go to savills.com.
CURRENT MORTGAGE DEALS Source: MoneySupermarket.com
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Proud to be a member of the Berkeley Group of companies
www.roman-house.co.uk
Proud to be British
CE L E B R ATI NG
A GREAT BRITISH SUMMER
You are invited to the Preview of Roman House -
the epitome of Boutique City Living
Be one of the first to view this prestigious collection of bespoke residences, nestled beside the Barbican and
just moments from the nightlife, Michelin starred restaurants and culture of the Square Mile. The Residences at
Roman House boast boutique style interiors, 24-hour concierge, gym and access to the beautiful St Alphage Gardens.
Preview: Thursday 5th & Friday 6th July 10am - 8pm and Saturday 7th July 10am - 6pm.
Main Hall & Court Room, Salters Hall 4 Fore Street London, EC2Y 5DE.
Call: 020 7920 9920 or email: romanhouse@berkeleygroup.co.uk
Luxury Studios, 1, 2 & 3 bedroom residences from 499,995
Roman House, Wood Street, London, EC2Y 5BA
Coming soon, an exclusive development of 4, 5 and 6 bedroom
detached luxury homes set in the picturesque village of Tewin.
Not only is this a stunning place to live in peace and tranquillity, there are also superb travel
links making Carrington Grange an excellent choice for commuters. Welwyn North train
station is only 7 minutes away from the development and it only takes 30 minutes to reach
Kings Cross. Tere is also very easy access to the A1, and from there the M25.
So be the frst to register your interest today and stand the best chance of owning one of
our stunning new homes!
LIVE IN THE VILLAGE, WORK IN THE CITY
0845 688 5563
CARRINGTONGRANGE.COM
REGISTER YOUR INTEREST NOW
C A R R I N G T O N
G R A N G E
UP P E R GR E E N R OAD T E WI N HE RT F OR DS HI R E AL 6 0 LU
Shop, dine, live, swim and relax on the river
- Bright, spacious 1, 2 and 3 bedroom Thames-side apartments
- Situated in Zone 2, overlooking Wandsworth Park
- Contemporary interior design with impressive specication
- Secure underground car-parking
- River taxi, underground, railway and shuttle bus services
- Concierge and porterage
- Private residents pool, sauna and gym
- On-site restaurants, delicatessen and convenience store
- Completions from December 2012 to March 2013
*prices correct at time of going to press

www.riversidequarter.com
Enjoy the views
from One Riverside
Sales Gallery now open

Book an appointment 020 8877 2000
Mon - Fri 11am - 6pm, Sat - Sun 11am - 4pm
Sales Gallery, Milliners House,
Eastfelds Avenue, SW18 1LP
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NEW SHOW
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NOW OPEN
FRIDAY 29 JUNE 2012
32
cityam.com
PROPERTY FOCUS ON
ALBURY HEIGHTS
Price: 4.95m
Albury Heights is a substantial family home recently built in the Georgian style.
It includes six bedrooms and six en suite bath/shower rooms, reception hall,
drawing room, dining room, family room and office. Contact Savills on 01483
796 820 or go to savills.com.
FOCUS ON: GUILDFORD
ENNISMORE AVENUE
Price: 1.85m
A five bedroom double-fronted Edwardian villa with original detached coach
house and landscaped garden. It is located 900m from Guildford High Street
and 700m from the mainline train station. Contact Knight Frank on 020 7861
1033 or go to knightfrank.co.uk.
FAIRWAY
Price: 1.475m
A five bedroom property less than two miles from the High Street, tucked away
at the top of a private road. Dating from the 1930s, it has two garages and
large, well maintained gardens. Contact Knight Frank on 020 7861 1033 or go to
knightfrank.co.uk.
HEATHVIEW COTTAGE
Price: 565,000
A three bedroom, gated property with gravelled drive and a conservatory. It
overlooks the green and is within walking distance of several nice local restau-
rants and pubs. Contact Knight Frank on 020 7861 1033 or go to
knightfrank.co.uk.
TRANSPORT
Guildford is located within easy commuting
distance of London but sits next to the
rolling countryside so many City workers
crave at the weekend. Guildford mainline
station offers a frequent train service to
London Waterloo taking approximately 35
minutes. A season ticket will cost 890 for
three months or just over 3,000 for a full
year. In addition, the A3 is within easy
reach, which in turn connects to the M25 at
Wisley, providing access to Heathrow and
Gatwick airports.
LOCAL AREA
Guildford offers an enormous range of
amenities as well as cultural and commercial
attractions. There are many big-name retail
outlets with shops on the High Street and
North Street. Guildford is particularly well
served by good schools, including Tormead,
Guildford High School, Lanesborough and
The Royal Grammar as well as nearby
George Abbot school and St Catherines in
Bramley. Among the recreational amenities
in the area are several golf courses including
Guildford and Woking.
NEED TO KNOW| AREA INSIGHT
LOCAL AREA
|
PRICES
SOURCE: LAND REGISTRY
Detached Semi-Detached Terraced Flats
Guildford 723,673 358,688 353,289 225,745
Homes for a new type of purchaser; one who wants to live in a grand environment surrounded by
landmark historic buildings but who demands a modern lifestyle. Brand new apartments at
The Galleries, Brentwood offer a very different experience with contemporary open-plan interiors
and fully inclusive specication. Commuting to London is quick and easy with Brentwood Station a
short walk away, where a train takes you directly to London Liverpool Street in 40 minutes.
www.the-galleries.net
Modern living.
Historic surroundings.
1 bedroom apartments from 220,000 and 2 bedroom apartments from 245,000
Show homes open daily: 10am - 5pm
Call 01277202122
The Galleries, Brentwood, Essex CM14 5GF
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as well, then, that Marc Webbs
version happens to be brilliant.
It does everything a super-hero
movie should: instills you with a
childlike sense of wonder; provides
some great visual gags and acts out
your schoolboy power fantasies.
Much of this is down to Andrew
Garfield, who is an inspired choice
to play Peter Parker. If youve seen
his previous films (especially the
excellent Boy A and Never Let Me
Go), you can hazard a pretty good
guess at the direction he takes
Parker: its a far more introspective
Spider-Man than the wise-cracking
web-slinger were used to.
Young Garfield is an emotional
soul, and you really feel for him as
he once again lives the death of
dear old Uncle Ben (no relation to
the sauce), as he has in the pages of
comics for the last 50 years. This
time you care even more, as Uncle
Bens brand of all-American good-
ness is portrayed with a stoic digni-
ty by Martin Sheen (the impossibly
glassy-eyed Sally Field plays long-
suffering Aunt May).
There is, inevitably, a slight feel-
ing of deja vu, especially in the ver-
tiginous swinging-through-New
York scenes. Dont get me wrong
they look great, but I cant help
thinking Id have been more
impressed if I hadnt seen it before.
Another unintended conse-
quence of rebooting the franchise
so soon is that Sam Raimi rather
greedily nicked a lot of the most
high-profile villains (both versions
of the Green Goblin, Doc Ock,
Sandman and Venom). To keep
things fresh, Webb really needed
someone new: unfortunately that
someone was The Lizard, a generic
part-man-part-animal baddie who
spends his time tipping over vans
and roaring, despite being the
worlds foremost herpetologist
(Google it). Rhys Ifans plays the pre-
transformation Lizard with just the
right amount of hand-wringing
and simmering menace but the
good work is largely undone when
he turns into what looks like a
weedy version of the Hulk.
In fact, my only real problem with
The Amazing Spider-Man is exactly
what has made the super-hero
genre so successful: the fight scenes.
They start well but suffer from
diminishing returns as the scale
and CGI are ramped up. Webbs
Spider-Man would stand up without
all the bangs and flashes and that
is a very big compliment indeed.
LIFE&STYLE
FRIDAY 29 JUNE 2012
35
cityam.com
GOING OUT
The Tates Munch exhibition may
not have The Scream but there is still
plenty of silent despair on display
THE TEMPEST is one third of a loose

shipwreck trilogy by the RSC at
Camdens Roundhouse and it is the
pick of the bunch.
Ive always thought of Prospero as
cold and aloof not a fundamentally
bad bloke but definitely not someone
youd want to go for a pint with. I
tend to imagine him with a pointy
hat, too, but that might say more
about me than the play. Jonathan
Slingers Prospero, though, is ragged,
jaded and in posession of a tinderbox
temper. You get the distinct impres-
sion that being deserted on a magical
island for 12 years has driven him a
bit bonkers. I suppose it would, all
things considered.
Of course, the ambiguous spirit Ariel
is on hand to help wonderfully
played by Glaswegian Sandy Grierson,
Jonathan Slingers Prospero is a jaded, rather unhinged old bloke
THEATRE
THE TEMPEST
Camden Roundhouse| By Steve Dinneen
hhhhi
ART
EDVARD MUNCH
Tate Modern | By Steve Dinneen
hhhhi
FILM
THE AMAZING SPIDER-MAN
Cert 12A | By Steve Dinneen
hhhhi
who performs his airy tricks with an
unmistakable edge of menace, as well
as some impressive feats of acrobatics,
vanishing through holes in the stage,
only to reappear elsewhere at an
impossible speed.
Jon Bausors set is as good as you
would expect from the world-
renowned designer, with some very
clever lighting transforming a clear
perspex box from a stricken ship to
Prosperos island cell.
The three plays the others being
The Comedy of Errors and Twelfth
Night are running concurrently and
its fascinating to see how the actors
adapt to their different roles. While
one or two play essentially the same
character reading different lines, the
best of them are almost unrecognis-
able from play to play.
Of the trilogy, The Tempest takes the
fewest liberties (The Comedy of Errors,
for instance, became a very modern
tale exploring issues of at immigra-
tion). You get the impression that this
is the one they really, really wanted to
get right. They did it was a joy.
Spider-Man reboot
really is Amazing
Andrew Garfield brings
a more introspective
side to the familiar
lycra-clad hero
THE SCREAMis one of those
paintings that suffers from its
own success. Tattered
versions of it hang on the
walls of too many student
bedrooms an emblem of a
kind of cultural aspiration
(Yeah, I like Munch. Its just
so raw, you know? One day Ill
probably go to the opera too.
Would you like to smoke a
joint and have sex with me?).
The Scream, of course, is conspicuous by its
absence at the Tates new exhibition. The
Norwegians wont let their copies out of their sight
after a couple of rather unfortunate incidents, and
the one privately held version is hanging on the wall
of someone who recently bought it for 80m I
imagine they didnt fancy lending it out. In the end,
though, its probably for the best it allows the
other paintings speak for themselves, rather than
act as a protracted warm-up for the howling money-
shot at the end. If youre looking for alienation and
silent despair, though, there is still plenty
here. Works from Munchs Green Room series
are particularly bleak, with claustrophobic
figures penned in by their drab, sinister
surroundings.
His paintings are strikingly cinematic, with
the restriction of space and tight composition
showing techniques that horror film
directors would take decades to perfect.
Clever curation sees different versions of
some of his more iconic works, including The
Kiss and Vampire, hung on opposite walls,
allowing you to pick out common themes and
subtle differences. One such painting is Two
Human Beings: The Lonely Ones, featuring
two figures, possibly newlyweds, standing
apart on a beach. While they are tightly
defined, their surroundings bulge and bleed.
You cant see their faces but, lost in their familiar
world, you can bet they are screaming inside.
Two rooms dedicated to Munchs amateur
photography seem a little gratuitous they are
interesting enough morsels in the context of the
artist but individually they are no great shakes
they look a bit like a hipsters Instagram page, all
blurry snaps of unmade beds and self-taken
portraits.
This retrospective, though, shows that Munch is
far more than the sum of his Screams.
36
TV & GAMES
cityam.com
T
E
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S
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SKY SPORTS 1
7pmEuro 2012 Report 7.30pm
Live Super League 10pmFootballs
Greatest 10.30pmEuro 2012
Report 11pmInternational One-
Day Cricket 1amSuper League
3amInternational One-Day Cricket
5amFootballs Greatest
5.30am-6amAquabike World
Championship
SKY SPORTS 2
7pmTight Lines 8pmInternational
One-Day Cricket 10pmWWE: Late
Night Smackdown 12amWWE:
Late Night Bottom Line 1am
Tight Lines 2amAquabike World
Championship 2.30amRoad to
London 3amTrans World Sport
4am-6amSuper League
SKY SPORTS 3
7pmAquabike World
Championship 7.30pmSporting
Greats 8pmLive PGA Tour Golf
11pmEuropean Tour Golf 1amPGA
Tour Golf 4amSporting Greats
4.30amRoad to London 5am
Thrillseekers 5.30am-6am
Aerobics Oz Style
BRITISH EUROSPORT
4pmLive Athletics: European
Championships 8.45pmUEFA
Euro 2012 Show9.15pmCycling:
Tour de France 9.45pmBradley
Wiggins: Skys the Limit 10pm
Euro 2012 12am-12.30amInside
IRC
ESPN
6.30pmMajor League Soccer
8.15pmAndy Schlecks Tour
9.30pmESPN Films: The
Announcement 11pmMMA Live
11.30pmPress Pass 2012 12am
Live American Football 3am-6am
Live American Football
SKY LIVING
7pmCriminal Minds 8pmBattle of
the Brides 9pmCriminal Minds
11pmBones 12amMedium1am
Maury 1.50am Americas Next
Top Model 2.40amBones
3.30amMedium4.20amNothing
to Declare 5.10am-6amJerry
Springer
BBC THREE
7pmTop Gear USA 8.30pmSnog,
Marry, Avoid? 9pmDead Boss
9.30pmLive at the Apollo 10pm
EastEnders 10.30pmRussell
Howards Good News Extra
11.15pmFamily Guy 12am
American Dad! 12.45amDead
Boss 1.15amLive at the Electric
1.45amRussell Howards Good
News Extra 2.30amLive at the
Apollo 3amSnog, Marry, Avoid?
3.30amCherry Healey: How to Get
a Life 4.30amLive at the Electric
5am-5.30amDead Boss
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmThe Big Bang
Theory 8.30pm2 Broke Girls 9pm
FILMDie Hard 1988. 11.35pm
Revenge 12.35amThe Big Bang
Theory 1.30amScrubs 2amHow I
Met Your Mother 2.30amRules of
Engagement 2.55amThe War at
Home 3.20amShameless 4.15am
90210 5am-6amGreek
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmStorage Wars 9pm
American Pickers 10pmVietnam:
Lost Films 11pmStorage Wars
11.30pmPawn Stars 12am
American Pickers 1amVietnam:
Lost Films 2amSwamp People
3amIce Road Truckers 4amLock
n Load 5amPawn Stars
5.30am-6amAmerican
Restoration
DISCOVERY
7pmBear Grylls 8pmWorlds
Toughest Drive 9pmWhale Wars:
Viking Shores 10pmAircrash
Confidential 11pmRiver Monsters
12amWhale Wars: Viking Shores
1amAircrash Confidential 2am
Auction Kings 3amAmerican
Chopper 3.50amIce Pilots
4.40amBear Grylls 5.30am-6am
Destroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmWedding Planners 8pm
Twins, Twins and More Twins 9pm
19 Kids and Counting 10pmQuints
By Surprise 11pmSecretly
Pregnant 12am19 Kids and
Counting 1amQuints By Surprise
2amSecretly Pregnant 3am
Wedding Planners 4amBirth
Stories 5am-6amBirth Days
SKY1
7pmThe Simpsons 8pmFuturama
8.30pmThe Simpsons 9pmA
League of Their Own 10pmAlan
Partridge: Welcome to the Places
of My Life 11pmWalking and
Talking 11.30pmAn Idiot Abroad 2
12.30amDog the Bounty Hunter
1amBNP Wives 1.55amBrit Cops:
Law & Disorder 2.55amNext Door
Nightmares 3.45amMedical
Emergency 4.10amReal Filth
Fighters 4.35amRaising Hope
5.05am-6amDont Forget the
Lyrics
S
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&
C
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6pmBBC News
6.30pmBBC London News
7pmThe One Show: Best of
Britain
7.30pmFake Britain: BBC
News
8pmEastEnders
8.30pmWould I Lie to You? The
Unseen Bits 9pmNew Tricks10pm
BBC News 10.25pmRegional News
10.35pmThe Graham Norton Show
11.20pmNational Lottery Draws
11.30pmWhite Van Man 12am
EastEnders 1.25amWeatherview
1.30amSign Zone: Chatsworth
2.30amQuestion Time 3.30am
Great British Menu 4amGreat
British Menu 4.30am-6amBBC
News
5.50pmWimbledon 2012:
Further live coverage on day
five at the All England Club.
8pmToday at Wimbledon: A
round-up of the fifth days play.
9pmSimon Schamas
Shakespeare
10pmCHOICE Episodes
10.30pmNewsnight
11pmThe Review Show
11.45pmWeather
11.50pmFILMWelcome to
Collinwood: Crime comedy
remake, starring Sam
Rockwell. 2002.
1.10amTaken 2.40amBBC News
4.30am-6amClose
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmCoronation Street
8pmGrimefighters
8.30pmCoronation Street
9pmCHOICE The Circus
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMPublic
Enemies: Premiere. Fact-based
crime drama, starring Johnny
Depp and Christian Bale. 2009.
1amThe Store; ITV News
Headlines 3.05amFILMPsycho.
1960. 4.55am-5.30amITV
Nightscreen
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmCome Dine with Me
9pmThe Million Pound Drop Live
10.30pm8 Out of 10 Cats: Best
Bits 11.20pmStand Up for the
Week 12.10amRandom Acts
12.15amFILMDate Movie.
2006. 1.40amMy Name Is Earl
2.05amThe Wrong Turn 2.10am
The Million Pound Drop Live
3.40amCovert 3.45amLula
Fantastic 3.50amMother of
Many 3.55amDeal or No Deal
4.50amCountdown 5.35am-6am
Glamour Puds
6pmHome and Away
6.30pm5 News at 6.30
7pmCricket on 5: England v
Australia; 5 News Update
8pmIce Road Truckers:
Deadliest Roads: New series.
Six drivers test their mettle in
the Andes; 5 News at 9
9pmBig Brother: Live Eviction
10pmCHOICE The Bachelor
11pmBig Brothers Bit on the
Side
12amSuperCasino
3.55amMotorsport Mundial
4.20amWildlife SOS 4.45am
Wildlife SOS 5.10amHouse Doctor
5.35am-6amHouse Doctor
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6 7 8
9
10 11 12
13 14
15 16 17 18
19 20
12 11 11
11 24 13
22 23
6 10
10 21
45
7 15
30 9
17 16
4 13 9
6 8 13
26
20
6
17
22
33
11
3
12
8
19
4
28
16
14
31
21
11
17
18
29
ACROSS
1 Sprang (5)
3 Sorcery (5)
6 Provide food for
an event (5)
7 Dance involving
a long line of
people (5)
10 Harmful to living
things (11)
13 Machine with a
revolving drum
used in making
concrete (6,5)
15 Slacken of (5)
18 Breakfast
rasher (5)
19 Full amount (5)
20 Of great weight (5)
DOWN
1 Coherent (5)
2 Law established
by following earlier
judicial decisions (9)
3 Waterproof raincoat
(abbr) (3)
4 Firearm (3)
5 Caste (5)
8 Bring into being (9)
9 Bunk in a ship,
train, etc (5)
11 Before, poetically (3)
12 Consumption (3)
13 Intonate (5)
14 Capable of owing (5)
16 Pertinent (3)
17 Long and slippery
sh (3)
N
T
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A
S L
C
E
O

4

P O P P Y S E P I A
I R E A U
P I N E A L F R E D
E U F O F A I
S T R A P H E L L O
S C E N E R Y
S N E E R L O S E R
O M A P S I E
B E A U T Y I S L E
E I O O D
R I D E R A N G R Y
8 9 5 7 8 4 9 5
1 3 2 3 5 2 7 1
6 9 4 1
2 7 1 4 5 3 3 9
7 8 4 6 9 2 5 1 3
4 3 1 9 8 6
4 9 7 5 1 6 3 2 8
1 6 8 3 7 6 4 9
9 2 1 2
1 2 7 3 4 1 2 8
5 6 8 7 9 4 8 9
4
4
4
4
4
4
4
4
4
The nine-letter word was
DEPORTING
T
E
R
R
E
S
T
R
I
A
L
S
A
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&
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
FRIDAY 29 JUNE 2012
EPISODES
BBC2, 10PM
Matt upsets his fierce ex-wife, while
Beverly prepares to go on a second
date with Rob. Comedy, starring Matt
LeBlanc and Tamsin Greig.
THE CIRCUS
ITV1, 9PM
Life with one of Britains longest-
established family circuses, the Paulos,
and the challenges they face to stay in
business.
THE BACHELOR
CHANNEL5, 10PM
Reality show in which Made in
Chelseas Spencer Matthews is the
Bachelor, romancing 24 women in
global settings in a bid to find love.
TVPICK
Palazzo Bianco to cap off an incredible month for Gosden
Spain, the 2008 European Championship and 2010 World Cup winners, defend their title in Kiev on Sunday against the 2006 World Cup winners Italy
37
THEPUNTER
SPORT TRADER
BEN CLEMINSON PREVIEWS THE EURO 2012 FINAL AND BILL ESDAILE PICKS OUT THE BEST WEEKEND RACING BETS
cityam.com
FRIDAY 29 JUNE 2012
SPAIN.....................................
ITALY......................................
Sunday 7.45 pm BBC One
Text MOBILE
to 65559
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nationwide
0800 242 232
Mon-Sat from8.30am
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FROM BRITAIN
WITH
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BACK ANY
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MONEY BACK
IF THEY LOSE THE
FINAL SET 6-0
TODAY
,
S GENTLEMEN
,
S
SINGLES ROUND 3
2/5 F. Mayer v 7/4 J. Janowicz
13/8 M. Youzhny v 4/9 J. Tipsarevic
6/4 N. Almagro v 1/2 R. Gasquet
7/4 V. Troicki v 2/5 J. Monaco
7/2 H. Watson v 1/6 A. Radwanska
11/10 S. Stephens v 4/6 S. Lisicki
6/5 S. Cirstea v 8/13 M. Kirilenko
10/3 V. Zvonareva v 1/5 K. Clijsters
TODAY
,
S LADIES
,

SINGLES ROUND 3
Others on request. Prices subject to uctuation.
SPAIN have quietened the
doubters and now they have the
chance to silence them in the
European Championship show-
down against Italy on Sunday.
It might have been more of a
slog than their previous journeys
to the finals of Euro 2008 and the
2010 World Cup, but Vicente del
Bosques men stand on the verge
of history, with the chance to
become the first side to win
three successive major tourna-
ments and the first to retain the
Henri Delaunay Trophy.
I was among the ranks of
those who had misgivings about
whether Spain could live up to
their billing as antepost
favourites. Even during the tour-
nament their performances
havent been the stuff of champi-
ons and the bookmakers reacted
by shortening Germany to the
head of the betting, yet they have
dragged themselves to the last
stage of the competition. It truly
is a great side that continues to
rack up the victories when they
are not playing so well.
The semi-final against
Portugal was Del Bosques 60th
fixture in charge and La Roja
have won 50 of those. And, like
Wednesdays game, on the occa-
sions when there is no way
through, they just dont give up.
They are now unbeaten in 19
competitive games since
Switzerland gave them a fright at
the beginning of the World Cup
in South Africa.
Something else Cristiano
Ronaldo and co. failed to do was
score. Not that there should be
much surprise there: Iker
Casillas and his back four of
Alvaro Arbeloa, Gerard Pique,
Sergio Ramos and Jordi Alba
have only conceded once in the
entire tournament, the best
goals against record of any
nation in Poland and Ukraine.
Spain and Italy couldnt be
split when they played out a 1-1
stalemate in the opening game
of Group C three weeks ago, but
the Azzurri were undoubtedly
more impressive in their semi
than the Spanish were, with
Mario Balotelli showing what a
world-class player he can be.
Any side which can topple
another as talented Germany has
a great chance, but given Spains
recent history, they are deserved-
ly favourites.
However, another hard-fought
battle is likely to be on the cards
here. Both teams have quality to
spare and either could win, but
Id prefer to back the draw, at 9/4
with Coral. It would be no sur-
prise to see the game going the
distance into extra-time and even
penalties, so taking the same
firms 6/1 for no goalscorer
seems a wise choice to me.
Regular readers of this column
will know that, due to the nature
of the occasion, I am a dedicated
seller of goals when it comes to
finals and I see no reason to
change my stance for this con-
test, with spread bettors advised
to go short of Sporting Indexs
quote of 2-2.2.
A single strike has settled the
last two European finals from
the boot of Fernando Torres
against Germany four years ago
and the head of Angelos
Charisteas in 2004 while the
five prior to that saw just two
goals each in normal time. It is
a similar story in the World
Cup, where France 98, when the
hosts won 3-0,stands alone
among the past six finals as one
that more than two goals were
scored in.
JOHN Gosden was crowned lead-
ing trainer at last weeks Royal
Ascot for the first time in his
illustrious career. It was an
incredible feat to notch five win-
ners during the most competi-
tive racing week of the year and
he looks to have an excellent
chance of claiming his second
Northumberland Plate tomor-
row afternoon (3.20pm).
I was interested in PALAZZO
BIANCO for last weeks Ascot
Stakes, but he didnt take his
place in the line-up. The Princess
Haya-owned four-year-old looked
like a promising stayer last sea-
son and it just seemed that inex-
perience caught him out. Hes
been beaten on both his starts
this campaign, but looks very
well-handicapped and Gosden is
a master at improving this type
of horse.
He has snuck in at the bottom
of the weights and is well drawn
in stall seven. My only worry is
very testing ground as he was a
beaten favourite on heavy at
Haydock last campaign. It didnt
look like he failed to handle the
conditions that day, though,
more that he was just a three-
year-old and slightly on the weak
side. He has matured now and is
a cracking each-way bet at 12/1
with Coral.
Il De Re bids for a historic dou-
ble following his Chester Cup
success, but Attivo in 1974 was
the last to achieve it in the same
season, and hes short enough at
5/1. Gulf Of Naples was behind
him on the Roodee and
although he ran a stormer in last
weeks Ascot Gold Cup, he has to
carry plenty of weight in this.
Im going to have a saver on
ICON DREAM on his first start
for Jim Goldie, having previously
been with David Simcock and
David Wachman before him.
Hes one of only a handful that
has form on bottomless ground
and he didnt run badly to finish
seventh in this race last year. The
excellent Graham Lee takes the
ride and the 25/1 with Coral is
more than fair.
Gosden could get his day off to
a flyer with MICHELANGELO in
Newmarkets opening Tattersalls
Millions Cup (2.00pm). William
Buick is in the saddle and the
duo stayed on dourly to beat
Expense Claim at Goodwood last
time. This trip looks a bare mini-
mum for the son of Galileo, but
the stiff finish and juice in the
ground should make them hard
to beat.
Ireland has been hit by plenty
of rain recently and only six run-
ners stand their ground against
Camelot in tomorrow nights
Irish Derby (7.40pm). Aidan
O'Briens unbeaten son of
Montjeu was an emphatic win-
ner of the Investec Derby last
time and is just 1/3 with Coral to
add another Derby to his CV.
The one niggling doubt would
be his ability to handle heavy
ground, but Im not sure connec-
tions would risk him if further
rain arrived. At the prices, I'm
prepared to take a chance on
IMPERIAL MONARCHeach-way
at around 8/1. He'll handle the
conditions, appreciate the step
up in trip and looks booked for
second at worst.
You can follow me on Twitter
@BillEsdaile.
n Pointers
Draw at 9/4 with Coral
No goalscorer at 6/1 with Coral
Sell total goals at 2 with Sporting Index
n Pointers
MICHELANGELO 2.00pm Newmarket
(tomorrow)
PALAZZO BIANCO e/w 3.20pm Newcastle
(tomorrow)
ICON DREAM e/w 3.20pm Newcastle
(tomorrow)
IMPERIAL MONARCH e/w 7.40pm Curragh
(tomorrow)
Extra-time
beckons in
final that
is just too
close to call
Should Beckham
have been picked?
TEAM GB football manager Stuart
Pearce was facing a backlash last
night after controversially omitting
former England captain David
Beckham from his final squad for
London 2012.
Ex-players Gary Lineker and Robby
Savage criticised the decision, while
some fans vowed to boycott Team GB
matches, having bought tickets in
the hope of seeing Beckhams inter-
national farewell.
The veteran midfielder, 37, looked
the one certainty to be named in the
18-man party but yesterday con-
firmed that he would not get to
realise his dream, with Pearce opting
for Ryan Giggs,
Craig Bellamy
and Micah Richards
as his three overage
players instead.
Terrible shame for
Beckham having
given so much to the
Olympic bid and foot-
ball, Lineker wrote on
Twitter. What I dont
Becklash: Stars
and fans hit out
at Olympic snub
understand is why string him along
by including him in a short list?
Pearce had included Beckham on
his 35-man shortlist but trimmed
him from the final squad, to be
revealed next week.
Savage added: Why was Beckham
on the shortlist in the first place,
then not to pick him! Disgrace!
Football fans took to social media
to express their dismay, with some
insisting they would swerve Team
GBs matches in favour of seeing
other sports at London 2012, which
starts next month, as a direct result
of Beckhams snub.
The LA Galaxy player said:
Naturally I am very disap-
pointed, but there will be
no bigger supporter of
the team than me. And
like everyone, I will be
hoping they win gold.
Evertons Jack Rodwell
is also set to be left out
when Pearce
announces his
squad next
week.
World No2 Rafael Nadal had not lost before the third round of a grand slam since 2005
How many with tickets for Team GB matches
bought them hoping to see a fairytale end to
David Beckhams career? Loads. And how
many will now clamour for more than a
million spare seats in the hope of witnessing
Micah Richards instead? Not too many, you
suspect. Yes, Beckham should be included
for deeds off the field, namely helping
Londons bid win and putting national duty
first unlike Richards. But given England
struggled to cobble together a midfield for
Euro 2012, just who are the other players so
deserving of inclusion over him? Team GB
would be more interesting with Beckham
involved, and its hard to shake the feeling
hes been sacrificed on the altar of Stuart
Pearces eagerness to assert his authority.
YES
BY FRANK DALLERES
FRIDAY 29 JUNE 2012
38
SPORT
cityam.com/sport @cityam_sport
Rosol stuns Nadal
to clear Wimbledon
route for Murray
WORLD No100 Lukas Rosol hailed
his performance as a miracle after
producing one of the biggest
upsets in grand slam tournament
history to eliminate second seed
Rafael Nadal.
The Czechs stunning 6-7 (9-11),
6-4, 6-4, 2-6, 6-4 victory makes him
the first since 2005 to defeat Nadal
at such an early stage of a grand
slam and owed much to an array
of merciless groundstrokes to
which even the decorated
Spaniard was no match.
In what was unquestionably the
most impressive feat of his career,
Rosol developed a ruthlessness
that very few have ever equalled
and admitted that the result had
even come as a personal surprise.
It is a miracle for me, I never
expected this, said Rosol. There
are so many emotions. He is a
superstar but I played
unbelievable today. I hope I can
play one more match like this.
I am happy and congratulations
to Rafa. He played a good match
but I was better.
In every sense that Rosols
victory was an unprecedented
individual success, for British No1
Andy Murray it provided the most
incredible of incentives. Nadal last
summer defeated Murray in the
tournaments semi-finals and was
BY DECLAN WARRINGTON
FRANK DALLERES
Sports Editor
NODECLAN WARRINGTON
Sports Reporter
If the argument for David Beckhams
inclusion is strictly sporting not moral
then he is owed nothing. Great player
though he is, Stuart Pearce (whether he
should be in charge is another matter) has
every right to omit Beckham from the squad
after his appointment, and by extension,
judgment, was backed. Ryan Giggs has
proved himself a more worthy candidate,
and if all decisions were influenced by
sentiment, then several successes think
Jimmy Greaves in 1966 may never have
taken place. Pearces motive is to build a
successful side, and, rightly or wrongly, if he
believes that Beckhams selection inhibits
him doing so, then so be it.
IN BRIEF
Hodgson and Mears retire
n RUGBY UNION: Fly-half
Charlie Hodgson and hooker
Lee Mears have retired from
international rugby following
Englands tour of South Africa.
I cannot thank them enough
for the support they have
given me and this young
squad, said coach Stuart
Lancaster, whose set-up has
been boosted by the arrival of
Andy Farrell from Saracens.
Petric signs for Fulham
n FOOTBALL: Fulham have
signed Croatia striker Mladen
Petric on a free transfer from
German side Hamburg after his
contract expired. Im very
happy to be part of what is
happening at Fulham, he said.
FRIDAY 29 JUNE 2012
39
Unseeded Czech Lukas Rosol is 98 places
behind two-time Wimbledon champion
Rafael Nadal in the world rankings
cityam.com
on course to again meet him this
year at the same stage, so the
removal of such a talented rival
makes the prospect of reaching
the final far greater in reality.
Murray had earlier overcome Ivo
Karlovic 7-5, 6-7 (7-5), 6-2, 7-6 (7-4)
to secure his own passage to the
third round, though fellow Brit
James Ward could not match such
success during his defiant 6-3, 5-7,
6-4, 6-7 (7-3), 6-3 defeat to Mardy
Fish. Serena Williams and Maria
Sharapova also advanced.
Proud Prandelli:
Balotelli double is
only the start for
him and Italy
GERMANY...................................1
ITALY..........................................2
BY DECLAN WARRINGTON
EURO 2012
TODAYS HIGHLIGHTS
Mens singles
n N Djokovic [1] v R Stepanek [28]
n R Federer [3] v J Benneteau [29]
n M Youzhny [26] v J Tipsarevic [8]
Womens singles
n M Sharapova [1] v S Hsieh
n A Radwanska [3] v H Watson
n V Zvonareva [12] v K Clijsters
Striker Mario Balotelli scored both of Italys goals
ITALY coach Cesare Prandelli was
adamant his players pride in
representing their country was the
inspiration in reaching Sundays
European Championship final
following the most professional of
performances against tournament
favourites Germany.
Two impressive finishes from
Manchester Citys Mario Balotelli
proved sufficient in sending Italy
through to face 2008 winners Spain
and though Prandelli was keen to
highlight his sides togetherness, he
reserved particular praise for his
precocious striker.
We have played an extraordinary
game, said Prandelli, for whom
masterful midfielder Andrea Pirlo
was again exceptional. We have
given an example of how to
show grace and an attachment
to the shirt.
[Balotellis] brilliant, but this was
a team effort. We played a fantastic
game against a really good side. We
did those things that put the
opponents in difficulty. The career of
Mario Balotelli has only just begun.
It was in the 20th minute when
Balotelli headed Italy in front and
just 16 minutes later he doubled
their lead with an explosive finish
from Riccardo Montilivos pass.
Germany responded through
Mesut Ozils stoppage-time penalty
but it was by then already too late.
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MAYOR Boris Johnson has warned
that he will only give proposals
for a Formula One grand prix
through the streets of central
London his blessing if it is
environmentally sound.
F1 chiefs last night confirmed a
tentative blueprint for a possible
race past landmarks such as
Buckingham Palace, Trafalgar
Square, Big Ben and the Thames,
to which Johnson has given
qualified support.
I am always interested in
projects that attract jobs and
bring growth, said Johnson. The
question of air quality and noise
impact will have to be looked at. I
am broadly positive providing we
can satisfy the air quality and
noise issues.
A circuit in the capital would
Boris issues pollution warning
over London grand prix plans
BY FRANK DALLERES
take five days to assemble and
three days to dismantle, with
three days of racing in between,
meaning likely traffic disruption
for a fortnight. Noise levels at the
start line are equivalent to a jet
engine 100 feet away.
It is estimated that the race
would cost 35m to stage but
might generate more than 100m.
FAST FACTS
A London Grand Prix?
n Proposed circuit starts and finishes
on the Mall, taking in Green Park, St
Jamess Park and Westminster
n Top speeds of 180mph expected to
be reached on straights at Piccadilly
and Birdcage Walk
n Anticipated lap time of one minute,
34 seconds
Results
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