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LONDON 2012 18 …days to go
LONDON 2012
18
…days to go
▲ ▲ ▲ ▲ LONDON 2012 18 …days to go ISSUE 1,669 MONDAY 9 JULY 2012

ISSUE 1,669 MONDAY 9 JULY 2012

2012 18 …days to go ISSUE 1,669 MONDAY 9 JULY 2012 BUSINESS WITH PERSONALITY www.cityam.com FREE
2012 18 …days to go ISSUE 1,669 MONDAY 9 JULY 2012 BUSINESS WITH PERSONALITY www.cityam.com FREE

BUSINESS WITH PERSONALITY

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MONDAY 9 JULY 2012 BUSINESS WITH PERSONALITY www.cityam.com FREE BRANSON: UK IS AT RISK OF JOINING

FREE

BRANSON: UK IS AT RISK OF JOINING THE THIRD WORLD

FREE BRANSON: UK IS AT RISK OF JOINING THE THIRD WORLD BY MARION DAKERS IN CANCUN

BY MARION DAKERS IN CANCUN

BRITAIN will fall behind the rest of the world unless a “bold, brave” stance on airline growth is adopted by the gov- ernment, Virgin founder Sir Richard Branson warned yesterday. Speaking at the launch of new Virgin Atlantic routes to Cancun and Moscow, Branson hit out at leaders who stand in the way of expansion at close-to-capacity Heathrow and impose steep taxes on air travel. “What we ought to be talking about is wholesale expansion to Asia, to Africa, to South America, and options on routes that are not current- ly serviced,” he told reporters. “But it’s impossible, and it’s been impossible for the last 15 years. Britain came to a full stop 15 years ago.” “Millions of travellers across the world are going to other European cities rather than com- ing to the UK and that affects every single aspect of the UK. In time it will turn into a third world country – it’s that serious.”

Branson said that Virgin will partici- pate in the coalition’s ongoing avia- tion review, but only if it reverses its “farcical” blanket ban on considering a third runway at Heathrow. “If by some miracle they think Heathrow isn’t the answer, then we will go along with it. But all the experts think Heathrow is the answer, so I think it will be very surprising if it’s not,” he said. Branson was speaking as Virgin Atlantic unveiled its latest bid to mus- cle in on BA’s dominance at Britain’s biggest airport, pledging to launch a new route to Moscow next year – but only if it can take over some of BA’s landing slots at the hub. BA has been forced to sell 12 landing slots at Heathrow following competition concerns surround- ing its takeover of BMI earlier in the

year. Virgin said it will bid for all 12 slot pairs and use some of them to start flights to Moscow using new A330 planes from 2013. “We will know by Christmas what routes we can fly,” Virgin Atlantic Airways chief executive Steve Ridgway told reporters. “The competition that we have provided to BA on the long- haul destinations, we can now do that on short haul.” Virgin Atlantic’s head of North America, Chris Rossi, said the firm had been looking to fly to Moscow for 15 years, but had until now struggled to gain a toehold in the market. In a separate development a group of influential backbench Conservative MPs will today make a stand against their party and call for two new run- ways to be built at Heathrow. The report by the Free Enterprise Group says a third runway “would only provide a stopgap solution”. “One solution is to grant plan- ning permission for both a third and fourth runway at the same time, allowing Heathrow to upgrade itself to a truly world class hub,” the report says.

itself to a truly world class hub,” the report says. Virgin founder Richard Branson says the
itself to a truly world class hub,” the report says. Virgin founder Richard Branson says the

Virgin founder Richard Branson says the UK must adopt a brave stance on aviation policy

TEARFUL MURRAY LOSES FINAL BUT WINS HEARTSsays the UK must adopt a brave stance on aviation policy AN EMOTIONAL Andy Murray insisted

aviation policy TEARFUL MURRAY LOSES FINAL BUT WINS HEARTS AN EMOTIONAL Andy Murray insisted he is

AN EMOTIONAL Andy Murray insisted he is “getting closer” to winning a Grand Slam tournament after losing the Wimbledon men’s singles final in four sets to Roger Federer yesterday. Murray was widely deemed to have won over some previously sceptical fans, who have found him dour, with a gracious and tearful speech following his defeat.

SEE SPORT: Pages 22- 23

Labour: changing banks should be as easy as switching phones

B Y T I M W A L L A C E BY TIM WALLACE

TOP BANKS’ grip on the market would be broken if consumers could change banks as easily as they change mobile phone networks, Labour leader Ed Miliband will say today. He will also call for the big five high street banks to sell off up to 1,000 branches, allowing two smaller institutions to join the big players, in a speech that accuses the coalition of failing to restore

competition to the sector in the wake of successive crises. However, the government believes it is already taking sufficient steps as Lloyds is selling hundreds of branches to the Co-Op. Furthermore, new rules will create a new account switching service by September 2013. Meanwhile reports yesterday claimed Barclays is looking at spinning off its investment bank in the wake of the Libor scandal.

ER HEATH: Page 2

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in the wake of the Libor scandal. ER HEATH: Page 2 ALLIST Certified Distribution 30/04/12 till
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2

NEWS

MONDAY 9 JULY 2012

To contact the newsdesk email news@cityam.com

Why it must be made much easier to switch bank accounts

F OR once, Labour has got it half

right. It will confirm today that it wants to make it much easier for current account holders to

change bank, in a bid to empower

consumers and to drastically improve competition in retail banking. The idea is to make switching bank as easy as it is changing mobile phone company by giving consumers ownership of their bank account numbers, in the same way that they now own their phone numbers. Bank account portability might sound like

a technical change – but it would

revolutionise the entire financial services industry and allow new entrants such as Tesco to scoop up market share very quickly. Signing up students when they open their first account, knowing that they are less likely to leave than to get divorced, remains a central strategy

to leave than to get divorced, remains a central strategy EDITOR’S LETTER ALLISTER HEATH for many

EDITOR’S

LETTER

ALLISTER HEATH

ALLISTER HEATH

for many high street banks. In theory, it is not that hard to change bank and some people do so already (see story below) – but most consumers are put

off by the paperwork and worry that money will get lost. Red tape – includ- ing anti-money laundering legislation – also makes it harder to switch. Unfortunately, Ed Miliband’s other views on banking reform are misguid- ed. He wants to carve out yet another 1,000 branches from the existing Big Four – Barclays, HSBC, Lloyds Banking

Group and RBS – and hand them over to “challenger banks” to create a Big Seven. Some of this is already happen- ing, with Virgin snapping up Northern Rock, and Co-op set to buy branches from Lloyds. But there are three problems with extending this top-down approach any further. Centrally planning competition doesn’t work. Why seven banks? Why not nine, or 30? The truth is that the supermarket industry is ultra compet- itive – even though people often only have the choice of two or three stores. The same holds in other industries. Market structure is not the issue. The key is to empower consumers to vote with their feet – and then allow the structure of the market to adjust to their free choices, in a bottom-up fashion, rather than to try and plan what it should look like. Another problem with forcing more

branch disposals is that large num- bers of customers would have to change bank against their wishes, cre- ating chaos and inconvenience. Last but not least, it is complicated and costly to carve out branches from an existing bank. The current amputa- tions are taking years to execute, with vast numbers of consultants involved. It would be better to spend the money – bank account portability would be expensive – on building a new ultra- modern clearing system. It would hold all accounts with an identifying code to establish which bank holds the account, allowing near instanta- neous switching. Intriguingly, this is one issue where Labour and the Free Enterprise Group of Tory MPs are now allies. The group issued a pamphlet advocating full bank account portability last year, penned by Andrea Leadsom. In her

version, any newly authorised bank would be able to buy a licence to use the system, removing the advantage of the long established clearers. Accounts could also be easily trans- ferred from failed institutions to sound ones during a crisis, reducing the risk of a run. This is the kind of policy the City needs to adopt to rebuild itself along pro-market lines. Banks should embrace full account portability, rather than the adulterated, ersatz version proposed by the coalition. Banks desperately need to improve their reputations. Enforced relation- ships never end well – so treating con- sumers like grown-ups by giving them an easier exit strategy would undoubtedly be a good first step.

easier exit strategy would undoubtedly be a good first step. allister.heath@cityam.com Follow me on Twitter:

allister.heath@cityam.com Follow me on Twitter: @allisterheath

Smaller rivals pick up business after rates scam

Smaller rivals pick up business after rates scam BY JANE HAMMOND SMALLER banks and building soci-

BY JANE HAMMOND

SMALLER banks and building soci- eties are benefiting from increased current account business as con- sumers become disillusioned with big banks. Metro Bank saw a 30 per cent increase in new account enquiries last week, and has increased call cen-

tre manpower by 13 per cent to cope with demand. It typically opens 1,500- 2,000 new accounts each week. New figures from the Co-operative Bank show a 48 per cent increase in the number of online customers requesting to switch their current account in the last two weeks. Nationwide saw an 85 per cent increase in the number of online accounts opened last week, while Norwich & Peterborough Building Society saw applications double, with

a high proportion of these coming

from Barclays and NatWest, accord- ing to Ewan Edwards, head of current accounts at N&P, although an RBS spokeswoman said there is no “signif-

icant change” in the current account customers and that it was “too early”

to see any real change.

With politicians stressing that banks must make the switching process easier, Metro Bank spokes- woman Beth Murray said a better understanding of the switching process would lead a number of cus- tomers to smaller banks and building societies.

Bank of England deputy faces Libor quiz from MPs

societies. Bank of England deputy faces Libor quiz from MPs BY JAMES WATERSON PARLIAMENT will today

BY JAMES WATERSON

PARLIAMENT will today question Paul Tucker, the deputy governor of the Bank of England, over his role in the Libor-fixing scandal that brought down top executives at Barclays bank and threatens to cause lasting damage to the reputa- tion of the financial system. Tucker made the unusual decision to request an appearance in front of the influential Treasury select com- mittee at the earliest opportunity after Barclays released an account of a telephone conversation he had with Bob Diamond, then head of Barclays’ investment banking divi- sion, in October 2008. According to Diamond’s memo, Tucker said “senior figures” in

Whitehall were asking questions about Barclays’ high Libor rate sub- missions and may have implied that the bank should lower its estimates. Yesterday the official who dis- cussed Libor submissions with Tucker was widely named as cabi-

net secretary Sir Jeremy Heywood. Tucker will be asked about the minutes of a November 2007 meet- ing he chaired where concerns were raised about incorrect Libor rates. Before the Bank of England was dragged into the scandal Tucker was widely considered to be the favourite to take over as governor

considered to be the favourite to take over as governor Deputy governor of the Bank of

Deputy governor of the Bank of England Paul Tucker asked to be heard by the committee

when Mervyn King steps down in the autumn. His chances of winning the top job may now depend on the qual- ity of the evidence he presents today. Further committee hearings are expected to be arranged before the parliamentary recess, with Barclays chairman Marcus Agius due to make an appearance tomorrow. Meanwhile Deutsche Bank declined to comment on reports that two of its traders have been suspended after it used external auditors to examine whether staff were involved in manip- ulating interbank lending rates.

QUESTIONS FOR TUCKER

n What was said during the call he had

with Bob Diamond in October 2008?

n Did he act on concerns raised about

Libor at a 2007 meeting of the Bank’s Sterling Money Markets Liaison Group?

n Was he aware that Libor-fixing was

taking place at other banks?

n

Did he turn a blind eye to Libor abuse?

n

Was Sir Jeremy Heywood the Whitehall

official worried by Barclays’ Libor rate?

IN BRIEF

Greek government wins approval

n Greece’s new conservative-led government today won parliamentary approval, but faced the much tougher task of convincing European partners and the IMF to give it more time to meet the terms of its bailout. There had been little doubt the government would sail through the confidence vote after a heated three-day debate in which it pledged to win back the trust of foreign lenders. All 179 ruling coalition deputies backed the motion in the 300-seat parliament. After demanding a long list of changes to Greece's latest rescue package when it took power last month, the three-party coalition has struck a more conciliatory tone in recent days as it faces the prospect of running out of cash without more aid.

Egypt to reconvene parliament

n Egypt’s new president yesterday ordered a parliament dominated by his Islamist party to reconvene, challenging the authority of the generals who had dissolved the assembly in line with a court order. President Mohammed Mursi's decree appeared to catch off guard the generals who handed power to him on 30 June. State media said the army's

supreme council held an emergency meeting and a council member,

declining to be named said the generals were not given prior warning. Before the handover, the army put

some curbs on the presidency and gave itself legislative powers. Mursi’s decision hands those powers back to a

parliament that was led by his allies in

the Muslim Brotherhood.

WHAT THE OTHER PAPERS SAY THIS MORNING

Muslim Brotherhood. WHAT THE OTHER PAPERS SAY THIS MORNING Call for French business boost French business

Call for French business boost

French business urgently requires shock treatment to cut labour costs and boost its flagging ability to compete on international markets, top economists and business leaders have warned Francois Hollande.

ArcelorMittal refuses to rule out EU steel closures as demand falls

ArcelorMittal has refused to rule out further site closures in Europe as the global steel industry enters what some

observers fear could be a five-year spell of overcapacity linked to signs of a severe slowdown in demand and consumption in China.

FTSE 100 total pension deficits soar

The total pension deficit at the UK’s largest companies has more than doubled over the past year, hit by falling bond yields and volatile markets. The combined deficit rose from £19bn at the end of June last year to £41bn at the end of May in the annual analysis of 83 FTSE 100 companies by actuarial consultants Lane, Clark & Peacock, to be published tomorrow.

Lane, Clark & Peacock, to be published tomorrow. Asda joins race to “replace” battered high street

Asda joins race to “replace” battered high street banks

The plunging popularity of banks has prompted Asda to follow its closest rivals in taking an aggressive step into the world of personal finance.

Oil explorers get tax breaks to help quit North Sea

Offshore oil explorers are to be given deeds by the Treasury guaranteeing tax relief to offset the multibillion-pound cost of dismantling North Sea equipment.

multibillion-pound cost of dismantling North Sea equipment. BP is dragged into SFO “bribery” investigation BP is

BP is dragged into SFO “bribery” investigation

BP is facing a Serious Fraud Office investigation relating to work the company has been involved with in Azerbaijan.

German president tells Merkel to come clean on EU debt deal

German president Joachim Gauck has ordered Chancellor Angela Merkel to clarify exactly what she agreed at the EU crisis summit.

to clarify exactly what she agreed at the EU crisis summit. Boeing to expand lead in

Boeing to expand lead in orders over Airbus

Boeing looks set to start Europe’s big air show with orders from at least two leasing companies – deals that should help the US plane maker consolidate its lead in orders over Airbus this year.

Thousands could lose internet

Thousands of people whose computers were infected with malicious software more than a year ago faced the possibility of not being able to get online today.

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MONDAY 9 JULY 2012

NEWS

3

cityam.com MONDAY 9 JULY 2012 NEWS 3 Permira partner Cheryl Potter sits on the Iglo board

Permira partner Cheryl Potter sits on the Iglo board

Permira plans £400m Birds Eye refinancing

B Y J A N E H A M M O N D ners – BY JANE HAMMOND ners – Cheryl Potter and Maximilian Biagosch – sit on the Iglo board.

The source also said that the refi- nancing would put a better capital structure in place and allow Birds Eye to “back up” its growth and innova- tion strategy over the next three to four years. The source added that the acquisition of Findus Italy, the frozen Italian food producer, had “significant- ly transformed” the Birds Eye busi- ness, and the money raised from the refinancing could pave the way for future consolidation in the market. Permira put Birds Eye up for sale ear- lier this year, but offers from rival pri- vate equity houses BC Partners and Blackstone were both rejected. It is understood that Permira, whose port- folio includes names such as high- street chain New Look, Just Retirement and Hugo Boss, was look- ing for around 2.8bn, but offers fell short at between 2.5 and 2.7bn. Private equity house Permira owns around 20 companies globally, with around 35 per cent in the consumer sector and 33 per cent in TMT.

Private equity house Permira is con- sidering a refinancing of frozen food firm Birds Eye, which would land the firm a 500m (£397m) windfall. Under the terms of the refinancing, the level of Birds Eye’s debt would expand to almost 2bn from 1.4bn. Permira, which bought the UK- based frozen food producer from Unilever for 1.6bn in 2006, is under- stood to be considering the refinanc- ing in order to return value to shareholders. A source told City A.M. that Birds Eye’s strong growth throughout the past few years, helped by strong per- formance of subsidiary Findus Italy, which it bought from consumer giant Unilever in 2010 for 800m, meant that refinancing the business could return some of that value to investors in the form of a dividend. Total net sales at Iglo Group, the par- ent company of Birds Eye, grew 1.4 per cent to 1.5bn for the year ended 31 December 2011. Two of Permira’s part-

Debenhams launches website in German to lure shoppers

BY KASMIRA JEFFORDpart- Debenhams launches website in German to lure shoppers DEBENHAMS, Britain’s second largest department store

DEBENHAMS, Britain’s second largest department store group, revealed yesterday it is launching its first foreign language website in Germany as part of its ambitions to expand overseas. The retailer, which runs 164 stores in the UK and Ireland and the Magasin du Nord chain in Denmark, also plans to expand its international delivery service to an extra 34 countries, including Argentina, Israel and Singapore, taking the overall number of

countries to 41. Simon Forster, online director at Debenhams, said: “With the second largest e-commerce market in Europe after the UK, Germany has consistently been one of our top performing countries online and now German shoppers will benefit from their own bespoke website.” The group last week posted better-than-expected sales – up 3.1 per cent in the 16 weeks to 23 June – after events including the Diamond Jubilee helped lure shoppers through its doors. Online sales jumped by 34.9 per cent.

Firms more cautious on profits

jumped by 34.9 per cent. Firms more cautious on profits B Y T I M W

BY TIM WALLACE

THE NUMBER of profit warnings issued by UK businesses fell 18 per cent in the second quarter of 2012, according to figures out yesterday from Ernst and Young – but only because firms are more cautious in their initial predictions, not because profits are improving. Sixty warnings were issued in the quarter, down from 73 in the previous three months. But any unexpected deepening of the Eurozone crisis could push warnings up again, the report warned. “Part of the fall in warnings is

undoubtedly due to a slight improvement in trading conditions, alongside hopes for an Olympic boost, and, crucially, falling input prices,” said Ernst & Young’s restructuring head Alan Hudson. “However, many companies have also battened down the hatches and cut costs to meet targets,” he added. Though most FTSE sectors saw a year-on-year drop in profit warnings, the UK’s construction and materials companies were the worst hit during the quarter as seven firms issued alerts – the highest number since 2008. The British high street has also continued to feel the stretch, with

five profit warnings from firms in the FTSE’s general retailers list. Though this number matched the previous quarter it was down from nine in the same period a year ago, suggesting that pressure on the consumer purse has begun to ease. “Even if the UK economy moves back into the black this summer, the recovery still lacks the traction it needs to build sustainable momentum,” said Hudson. “There is only so much fat that companies can trim and only so long they can tread water with little or no investment – investment that both they and the UK economy desperately need.”

they can tread water with little or no investment – investment that both they and the
they can tread water with little or no investment – investment that both they and the

4

NEWS

MONDAY 9 JULY 2012

cityam.com

M&S expected to reveal weak non-food sales

cityam.com M&S expected to reveal weak non-food sales B Y J A M E S W

BY JAMES WATERSON the AGM, with M&S declining to deny press reports that the head of non-

food products is set to leave the firm. If Bostock leaves she will be follow- ing M&S’s head of menswear, Richard Price, who quit last month to become managing director of Bhs depart- ment stores. Meanwhile chief executive Marc Bolland will face questions over the size of his pay deal after corporate governance lobby group Pirc recom- mended investors abstain from vot- ing on the firm’s remuneration report. M&S has had a turbulent 2012, with shares in the firm dropping by 18 per cent since mid March.

RETAIL giant Marks & Spencer (M&S) is expected to announce weak first- quarter sales at its annual meeting tomorrow, after clothing sales were hit hard by the poor weather. A consensus forecast of 12 analysts compiled by the company predicts a 6.7 per cent drop in clothing and homeware sales compared to the same period last year. This is expected to translate into a three per cent drop in overall sales, with 0.8 per cent sales growth in the firm’s food division going some way to make up for falls elsewhere. Such results would represent the worst quarterly figures in three years. “Unfavourable weather has clearly paid a part in the poor general mer- chandise performance, although with John Lewis continuing to post growth and Debenhams reporting strong UK trading, we think there is an element of poor execution at play,” said Richard Cathcart, an ana- lyst at Espirito Santo. Investors will be keen to clarify the future of executive Kate Bostock at

be keen to clarify the future of executive Kate Bostock at Marks and Spencer Group PLC

Marks and Spencer Group PLC

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322.5 320.0 317.5 2 Jul 3 Jul 4 Jul 5 Jul 6 Jul Marks & Spencer

Marks & Spencer chief Marc Bolland is expected to address speculation of Kate Bostock’s departure at the annual meeting tomorrow

It’s not just any sales fall, it’s an M&S sales fall

M ARKS & SPENCER’s trading

update tomorrow is likely to

suggest that the high-street

stalwart has been

particularly weather-beaten in the first quarter of the year. Not only in the face of the wettest spring on record – which it is expected to blame for a 6.7 per cent decline in non-food sales – but

also metaphorically speaking, with

an unnerving number of senior

staff blown elsewhere by the winds

of change.

Some analysts fear changes at

the top are beginning to trickle

down to its trading performance;

after all, a company needs a stable management team to ensure consistent results. But if it’s not the

team to ensure consistent results. But if it’s not the BOTTOM LINE always the best formula

BOTTOM

LINE

always the best formula for success and it’s here that Marks seems to be struggling with its general merchandise – in particular women’s fashion. At the company’s full-year results in April Bolland jumped from one initiative to the next – reassuring that work was well underway to modernise stores, grow market share in clothing, revamp its homeware, create a beauty department and become a leading multi-channel retailer while expanding abroad. The retail sector never stands still and Bolland is clearly not short of ideas. But the key challenge he faces now is to show that two years after joining, he can turn those ideas into consistent positive sales growth.

KASMIRA JEFFORD

KASMIRA JEFFORD

changes in management – chief executive Marc Bolland has in the past argued that staff turnover is normal for a business of M&S’s size – then surely rain can’t be the sole cause of the retailer’s worst quarterly trading in three years? Finance director Alan Stewart has done an admirable job reining in costs and keeping 2011 profits in line with forecasts. But growing sales is

Stewart has done an admirable job reining in costs and keeping 2011 profits in line with

cityam.com

MONDAY 9 JULY 2012

NEWS

5

French may buy iconic British toy store Hamleys

NEWS 5 French may buy iconic British toy store Hamleys BY BEN SOUTHWOOD roughly £59m. This

BY BEN SOUTHWOOD

roughly £59m. This was after a bidding war with rival investor Tim Waterstone, who had offered 230p but judged bids of around 254p a step too far. Last year Landsbanki rejected a £60m offer for the retailer from Bahraini investment bank Global Banking Corporation. The second most important stakeholder is Bracken, a pri- vate equity firm run by David “Spotty” Rowland, the property develop- er who left school at 16 and developed an empire centred on a property empire hundreds of millions of pounds. Rowland, a tax exile living in Jersey, has been a major donor to the Tory party, giving close to £3m in the run up to the 2010 election.

HAMLEYS may be sold to French retail group Groupe Ludendo, according to reports yesterday. Britain’s most famous toyshop is cur- rently owned mainly by nationalised Icelandic bank Landsbanki, famous for running the Icesave deposit programme that defaulted in the financial crisis of late 2008. Landsbanki acquired its stake from retail investment group Baugur in a debt- for-equity swap after the investment

group went into administration in early

2009.

Baugur took control of 63.7 per cent of Hamleys in 2003, in a bid worth 254p a share, valuing the company at

in 2003, in a bid worth 254p a share, valuing the company at High Street footfall
in 2003, in a bid worth 254p a share, valuing the company at High Street footfall

High Street footfall drops as weather hits retail recovery

High Street footfall drops as weather hits retail recovery BY JAMES WATERSON FOOTFALL on Britain’s high

BY JAMES WATERSON

FOOTFALL on Britain’s high streets fell by 5.5 per cent in June, hitting hopes that an increase in consumer spending could boost the economic recovery. Research released today by consumer monitoring firm Springboard blamed rain throughout the month, which has continued into July and is set to wipe out any potential boost from the Queen’s Jubilee celebrations. “This was supposed to be the Great British summer but it seems we’re abandoning our

towns because of the Great British weather,” said Diane Werhle, research director at Springboard. “We’re calling on people to get out and about in the UK’s weather-proof historic destinations.” Historic town centres suffered the least, dropping 2.7 per cent on a year-on-year basis. But coastal towns were hit hard by the poor conditions, with footfall down 4.4 per cent. The government recently awarded grants of £100,000 each to rejuvenate the high streets of 12 towns, under the guidance of retail consultant Mary Portas.

Valentino to go to Qatar

of retail consultant Mary Portas. Valentino to go to Qatar BY BEN SOUTHWOOD THE EMIR of

BY BEN SOUTHWOOD

THE EMIR of Qatar may buy Valentino from its private equity owners, Sky News said yesterday. The private equity firm Permira currently owns Valentino, having acquired the luxury Italian fashion brand near the top of the market, for 2.6bn (£2.1bn). The deal could see a loss of some 2bn on that investment, as the price suggested is between 550m and 600m. The acquisition would see not only the eponymous Valentino label, but also Hugo Boss and Missoni changing owners. No spokesman from Permira was available to make a comment.

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MONDAY 9 JULY 2012

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Serious Fraud Office reopening probe into Weavering Capital

Serious Fraud Office reopening probe into Weavering Capital B Y J E N N Y F

BY JENNY FORSYTH

THE Serious Fraud Office (SFO) has reopened its criminal investigation into the collapse of Weavering Capital in 2009 – 10 months after dropping the original probe. New director David Green called for the U-turn after a high court judge found Weavering Capital’s founder Magnus Peterson liable for deceit and breach of his fiduciary duties in a civil case in May. Weavering Capital, one of London’s oldest hedge funds, went into administration in March 2009.

Last September the SFO dropped its investigation into the case, saying it did not have “a reasonable prospect of conviction”. However liquidators of Weavering, represented by law firm Jones Day, successfully launched a civil case against Peterson and other Weavering staff. The SFO announced its change of heart on its company website, citing the court judgment. “The company was advisor to a Cayman Islands incorporated hedge fund called Weavering Macro Fixed Income Fund Ltd which had funds of

$639m [£413m] under management in 2008,” said the SFO release. “The investigation concerns interest rate swap transactions between the fund and a related Weavering company in the British Virgin Islands which had the effect of inflating the net asset value of the fund.” It is not the first volte-face for Green, who took the helm at the SFO in April. His predecessor, Richard Alderman, backed out of a criminal investigation of Libor manipulation because of lack of resources but Green secured an extra £3m of Treasury funding to carry it out.

secured an extra £3m of Treasury funding to carry it out. Sir Brian Souter founded Stagecoach
secured an extra £3m of Treasury funding to carry it out. Sir Brian Souter founded Stagecoach

Sir Brian Souter founded Stagecoach in 1980 with two second-hand buses

Stagecoach to launch luxury sleeper buses

second-hand buses Stagecoach to launch luxury sleeper buses BY JANE HAMMOND TRAVEL company Stagecoach is eye-

BY JANE HAMMOND

TRAVEL company Stagecoach is eye-

ing a move into upmarket transport through its budget bus brand Megabus.

It has commissioned a 52ft double-

decker bus, designed to carry passen- gers on inter-city journeys. It is understood that the buses, which will operate under the firm’s Megabus brand, will have luxury leather seats by day, and give way to more than 40 fully-flat beds at night. The buses will also include a hostess service, where customers will be served food and drink at their seat.

A prototype bus, which will be one

of the longest in the world, is current- ly being tested in Scotland and costs around £500,000.

Stagecoach will order an initial lot of 10 buses, taking the investment in the new premium product to £5m. The service is expected to be fully- operational by 2013, although it is not known how many routes the buses will be available on. Megabus currently runs an inter-city service across much of England, Scotland and Wales.

Stagecoach declined to say how much the luxury service will cost, and how it will compare in price terms to first-class train travel. There is already a similar Megabus Gold service that operates between Glasgow and Inverness and Glasgow

and Dundee, which offers an at-seat food service. It has been running for around 18 months and has been ‘very successful’, according to Stagecoach spokesman Steven Stewart. As well as the Megabus brand, Stagecoach Group, run by chief execu- tive Sir Brian Souter, owns the Oxford Tube, a coach service that runs between London and Oxford, and the Scottish Citylink brands, a provider of

express coach services in the country.

Stagecoach Group PLC 274.60 278 p 6Jul 276 274 272 270 268 2 Jul 3
Stagecoach Group PLC
274.60
278
p
6Jul
276
274
272
270
268
2 Jul
3 Jul
4 Jul
5 Jul
6 Jul

IN BRIEF

Praetorian Resources lists on Aim

n Natural resources investment company Praetorian Resources today lists on Aim with an initial market capitalisation of £24m. Established by Richard Lockwood and Malcolm Burne, the geographically unconstrained portfolio will invest in equities and debt securities in the precious and base metals, energy, industrial minerals, soft commodities, diamonds and other gemstones sectors. Of the initial market cap, the company has raised £10m through a placing, with £14m from leading institutional investors.

stay afloat, French finance minister Pierre Moscovici said yesterday, as the threat of closure looms over a major production centre. Moscovici said a plan to save the auto sector would be unveiled in the next month, including job-saving solutions for

a

Peugeot PSA factory near Paris.

Bombardier gets $1.02bn order

n Canada’s Bombardier Aerospace said yesterday a new customer, which has requested to remain unidentified, has placed a conditional order for five CS100 and 10 CS300 jetliners. Based on the list

France eyes changes to auto sector

prices of the aircraft, the contract is valued at about US $1.02bn. Earlier it said it was

n France will not let its auto industry collapse and plans to unveil structural measures to help the struggling sector

in

talks with AirAsia about a more densely

packed 160-seat version of its CSeries jet

in

a bid to compete with Airbus.

8

NEWS

MONDAY 9 JULY 2012

cityam.com

Spain praised for pushing on with reforms

cityam.com Spain praised for pushing on with reforms SPAIN is on the right path to over-

SPAIN is on the right path to over- come recession and regain investor confidence, and its public accounts can handle the extra weight of European aid designated for banks, Germany’s finance minister said in an interview published yesterday. Wolfgang Shaeuble praised the Spanish government’s tough steps to stabilise public finances, and said the state can cope with the extra burden of taking on European debt to bail out its troubled banks. However, he would not be drawn on the possibility of a banking union. “To talk of what will happen when the future banking supervisor is functioning is to build castles in the sky. Right now we must work with what we have,” he told Spanish newspaper El Pais. “The fundamental figures and the intention to reduce the deficit shows

figures and the intention to reduce the deficit shows Swiss economics minister Johann Schneider-Ammann said the
figures and the intention to reduce the deficit shows Swiss economics minister Johann Schneider-Ammann said the
figures and the intention to reduce the deficit shows Swiss economics minister Johann Schneider-Ammann said the

Swiss economics minister Johann Schneider-Ammann said the cap on the franc must be kept

Pressure set to rise on franc as

capital escapes single currency

set to rise on franc as capital escapes single currency B Y C I T Y

BY CITY A.M. REPORTER

THE SWISS National Bank (SNB)

must defend the cap it has set on the franc as the upward pressure on the safe-haven currency is only set to rise, the country’s economy minister said in an interview yesterday. The latest data show the SNB’s foreign exchange reserves jumped 19 per cent in June as a flood of cash into Switzerland forced the Bank to sell francs to defend the cap, set at SwFr1.20 to the euro last September. “The pressure on the SNB will increase. That is why it is all the

more important to defend this minimum exchange rate without compromise,” Johann Schneider- Ammann told SonntagsZeitung. The minister confirmed the government has contingency plans in case of the “horror story” of a Eurozone collapse, but added that he does not expect that to happen as Europe could not afford to let the single currency break apart. However, he said capital controls would not be among any tools used, including imposing negative interest rates on foreigners’ Swiss franc deposits in Swiss bank accounts, pointing to the failure of previous such moves.

Euro banks seek official sector loans

previous such moves. Euro banks seek official sector loans BY TIM WALLACE SPANISH and Greek banks

BY TIM WALLACE

SPANISH and Greek banks have had to borrow hundreds of billions of euros from central banks to shore up their balance sheets as depositors have fled from the risky institutions, a top economist has warned. Banks borrowed an additional 81.1bn (£64.3bn) from the Eurosystem in June, an increase of 5.9 per cent. Over the same period the Bank of Spain increased lending by 62.3bn. “Assuming that system-wide loans were unchanged between 31 May and 1 June, Spanish banks accounted for 77 per cent of the total lending rise last month,” said Simon Ward from Henderson. “The size of the increase suggests funding was used to finance the government as well as cover deposit outflows.” That means banks have increased borrowing from the Bank of Spain by 288.7bn since the end of November 2011, while its Target2 liabilities rose by 271.2bn to 408.4bn. Meanwhile figures from the Bank of Italy show it’s loans at 8.5bn in June. “The Spanish and Italian figures imply that lending to banks by other Eurosystem members rose by only about 10bn in June,” said Ward. “This is a net result so could conceal higher borrowing by Greek banks; the suggestion, however, is that Greek deposit outflows were smaller than feared last month.”

BY HARRY BANKS that we should not exaggerate the cost of the bailout on public accounts. Spain is on the right path.”

Spain’s government has applied for up to 100bn (£79.3bn) from the Eurozone to recapitalise its weaker banks, hit by a burst property bubble, which would add around 10 percent-

age points to the country’s debt levels

if taken in full.

Madrid expects Spain’s debt ratio as

a percentage of gross domestic prod-

uct to be around 80 per cent, exclud- ing the bank bailout, by the year-end, in line with the European average. But Schauble praised Spanish efforts

to bring down its borrowing and main-

tain access to debt markets. “Spain is doing a great deal to break the vicious circle and strengthen mar- ket confidence,” he said. Meanwhile Italian prime minister Mario Monti hit out at opponents of his labour market reforms, arguing that complaints about government policy undermine his efforts and push up borrowing costs.

Schaeuble said Spain can cope with the bank bailout

government policy undermine his efforts and push up borrowing costs. Schaeuble said Spain can cope with
government policy undermine his efforts and push up borrowing costs. Schaeuble said Spain can cope with
government policy undermine his efforts and push up borrowing costs. Schaeuble said Spain can cope with
government policy undermine his efforts and push up borrowing costs. Schaeuble said Spain can cope with
government policy undermine his efforts and push up borrowing costs. Schaeuble said Spain can cope with

cityam.com

MONDAY 9 JULY 2012

NEWS

9

cityam.com MONDAY 9 JULY 2012 NEWS 9 Elizabeth Corley is chief executive of Allianz Global Investors

Elizabeth Corley is chief executive of Allianz Global Investors

Regulators dominate top list of Europe’s finance power players

dominate top list of Europe’s finance power players BY KASMIRA JEFFORD EUROPEAN Central Bank (ECB) president

BY KASMIRA JEFFORD

EUROPEAN Central Bank (ECB) president Mario Draghi has been ranked as the most important figure in European financial markets for a second year running, according to a list published today. The table of the 100 most influential people in European financial markets, released today by Financial News, comes as Eurozone leaders put plans in place to give the ECB supervisory powers over its biggest banks, adding to Draghi’s responsibilities.

He leads a quartet of regulators to make it into the top 10 including Stefan Ingves, the chairman of the Basel Committee on Banking Supervision; Mervyn King, the Bank of England governor who is preparing for its new role overseeing UK financial institutions; and Michel Barnier, European commissioner for internal markets and services under whose watch a slew of new rules has come into effect. For the first time since the survey was first published in 2005, a woman has broken into the male- dominated list of top 10 influential

people. Elizabeth Corley, chief executive of Allianz Global Investors is ranked in sixth place, largely for the part she has played as a leading spokesperson for the asset management industry. Overall, the number of women on the FN100 has edged up to seven from the average in previous years of five. Daniel Pinto, JP Morgan’s head of Europe the Middle East and Africa is the highest placed banker, in fourth place, followed by Goldman Sach’s co-chief executives Richard Gnodde and Michael Sherwood in fifth and eighth places respectively.

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BRITISH defence giant BAE Systems
said yesterday that it is the fron-
trunner in the race to win a $11bn
(£7.1bn) to provide trainer jets to
the United States Air Force (USAF).
“The USAF has a requirement to
replace their aging training air-
craft and we believe Hawk, as
world’s most successful and afford-
able jet trainer, is best placed to
meet their needs,” a spokesman for
the company told City A.M.
Although the contract would ben-
efit British-based staff it is under-
stood that political constraints
mean that the majority of manu-
facturing work would be undertak-
en in the US.
The firm is confident that it can
face down opposition from
American rival Lockheed Martin to
provide 350 trainer aircraft, in part
because the USAF is seeking a tried-
and-tested replacement for its age-
ing fleet of T-38 airplanes. Over 900
Hawks have been sold since the
model first entered services with
the in 1976.
The USAF is expected to make a
decision by 2014, with the first air-
craft due for delivery in 2020.
BAE is facing a difficult period as
domestic defence cuts bite and it
becomes increasingly reliant on
overseas orders. It appears to have
missed out on a £7bn contract to
provide fight jets to India but is
hoping to conclude a $2bn deal
with Oman for 12 Typhoon aircraft.
In late May the firm sealed a
£1.6bn deal to supply Saudi Arabia
with Hawk jets, including 22 new
Hawk advanced jet trainer aircraft,
which will be made in UK, and 55
Swiss made Pilatus turboprop air-
craft as well as training equipment
and other support services.
Meanwhile yesterday’s Sunday
Times reported that the firm is
planning to close Glasgow’s historic
Govan shipyard and its Portsmouth
dockyard after a drop in naval
orders.
“We continue to work closely with
the Ministry of Defence to explore
all possible options to determine
how best to sustain the capability to
deliver complex warships in the UK
in the future,” the firm said in
response.
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MONDAY 9 JULY 2012

cityam.com

THECAPITALISTcityam.com/the-capitalist

Got A Story? Email thecapitalist@cityam.com

ANYONE making an unwelcome weekend trip into the office yesterday will have been greeted by
ANYONE making an unwelcome
weekend trip into the office
yesterday will have been greeted by
busier-than-usual City streets, as more
than 25,000 runners took to the
pavements around London for the
annual British 10k.
Among those braving the rain to jog
the iconic route past landmarks
including Big Ben, St Paul’s Cathedral
and even the City A.M. offices was a
57-strong team raising money on
behalf of the London Legal Support
Trust, which provides funding to
support law centres and legal advice
agencies across London and the South
East.
Leon banking
on appetite of
hungry savers
Henry Dimbleby & John Vincent co-founded Leon in 2004
BUSINESS HAS SUFFERED A SERIOUS BLOW.
JOIN THE RECOVERY TEAM.
HUNGRY investors in search of an
investment in a falafel wrap may find
solace in fast-food chain Leon’s new
retail bond. Nicknamed the Leon
bond, the three-year fixed-term cor-
porate bond pays an annual coupon
of between 10 to 15 per cent in £eon
Pounds, depending on the amount
invested, which can be redeemed at
the restaurant’s chains. Investors
need to subscribe for a minimum of
£1,500.
The chain, with six branches in the
City, hopes to raise £1.5m from the
bond issue, which will support the
chain’s expansion as well as setting
up the not-for-profit Leon founda-
tion, whose first initiative is to set up
a cookery school for young renal ill-
ness sufferers. Leon is giving away
£1,000 in £eon Pounds at one of its
restaurants nationwide each
Thursday until applications for the
bond close on 31 July.
Leon is not the first SME to turn to
its customers for funding. Hotel
Chocolat raised £3.7m through its
retail bond in 2010, offering a gross
annual return of 6.72 per cent for a
£2,000 investment, payable in choco-
late. And online travel group Mr &
Mrs Smith sought £5m from a retail
bond paying 7.5 per cent, or 9.5 per
cent in “loyalty money”.
Henry Dimbleby, co-founder of
Leon, said consumers are keen to
invest in favourite brands rather than
banks. It remains to be seen how
many will put their money where
their mouth is.
OLYMPIC MEDIA BUZZ
LONDON 2012 PARTNERS
IN ASSOCIATION with Repskan.com,
City A.M. is measuring the relative Olympic
media buzz around the London 2012
Olympic and Paralympic Games partners,
week by week. The leaderboard, right,
reflects their ranking over the past week, in
this case from Wednesday 27 June to
Wednesday 4 July.
TOP TEN PARTNERS BY MENTIONS
Brand
Position change
McDonald’s
-
Samsung
2
Coca-Cola
1
Visa
-3
Adidas
-
Coca-Cola has maintained its high position
in the rankings, and has recently launched
its largest Olympic-themed marketing effort
in its 84-year history of supporting the
Games. But along with McDonald’s, Coca-
Cola has also received attention for less
positive reasons. The International Olympic
Committee has come under pressure from
the London Assembly to ban sponsors that
produce high calorie food and drinks.
BP
4
British Airways
-1
Lloyds TSB
3
BMW
-1
BT
-1
10
1
COCA-COLA
MENTIONS BY
10 4
13
CATEGORY
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12

GLOBAL ECONOMICS

cityam.com

UK confidence devastated by Eurozone crisis

B Y T I M W A L L A C E until the end BY TIM WALLACE until the end of the year, or for the economy to hit a “triple dip” reces-

sion in the next two years. “Economic uncertainty remains the big constraint on corporate expansion,” said Deloitte chief econ- omist Ian Stewart. “Uncertainty has had a corrosive effect on risk appetite and 80 per cent of CFOs say this is not a good time to take risk onto their balance sheets.” Meanwhile BDO’s business trends report reveals confidence fell to its lowest point of the year so far in June, with the manufacturing sector taking a particularly hard knock. The optimism index, which pre- dicts business performance two quarters ahead, fell for the fourth consecutive month to 93.5 in June, from 95.5 in May – below the key 95 level that indicates growth. The manufacturing sector led the fall with a drop from 96.5 in May to 83.8 in June – the lowest reading since March 2009.

THE EUROZONE crisis has battered British business confidence again, influential surveys from both Deloitte and BDO show today, leav- ing firms unwilling to borrow and invest, and too uncertain to boost hiring. Deloitte’s survey of chief finance officers (CFOs) shows its third major dip in confidence in the last five

years, and its sharpest decline since

2007.

Ninety-five per cent of CFOs rated current financial and economic uncertainties as “above normal” in the second quarter, with a major neg- ative impact on spending plans. A net balance of 32 per cent expect hiring spending to fall, 34 per cent see capital expenditure falling, and a balance of 67 per cent predict a fall in discretionary spending. After a rally in the first quarter, CFOs now see an almost 50 per cent chance of the recession continuing

Tory MP group calls for cuts to red tape and tax to help growth

B Y B E N S O U T H W O O D BY BEN SOUTHWOOD

THE UK must cut red tape for small businesses to help transform the UK’s economy, a group of Tory MPs will say in a paper released today. Seven MPs have voiced a raft of ideas on how Britain can get its economy back on track including fairer taxes, a reduced regulatory burden, and the creation of a dedicated Ministry of Infrastructure. The so-called Free Enterprise Group suggests that “micro” businesses – those with three or

fewer employees and less than £75,000 annual turnover – should be exempt from employment regulation. They also call for the Treasury to focus more on the supply-side, implying that lower taxes might be supported. Member Kwasi Kwarteng MP said: “We need to take bold decisions to create jobs and growth and restore credibility to the UK’s financial sector. It’s time for the government to stop hindering businesses and to create the space to allow entrepreneurs to thrive.”

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cityam.com

MONDAY 9 JULY 2012

GLOBAL ECONOMICS

13

Global outlook takes a hit as Germany joins worsening slump

BY TIM WALLACEGlobal outlook takes a hit as Germany joins worsening slump GLOBAL business confidence slumped last month,

GLOBAL business confidence slumped last month, led by declines across much of the Eurozone, according to data published today by Markit. A net balance of 37 per cent of firms expect activity to increase in the next year, indicating slower expansion than the 44 per cent recorded in February. That slowdown also extended to the jobs market, with a net balance of 17 per cent expecting to take on more staff in the next 12 months, down from 19 per cent in February, with manufacturers

leading the decline.

Confidence fell sharply in Germany, where a net balance of just 16 per cent expect to expand in the year, down from 37 per cent four months ago. Italy and Spain all recorded similarly low optimism figures, leading to negative employment expectations – a net balance of 10 per cent of Italian firms and 16 per cent in Spain expect to cut headcount. Business confidence also slumped in the UK and US, though net balances of 38 and 57 per cent remain above those in the Eurozone. Meanwhile optimism slowed in China and Brazil and dropped

sharply in Russia, dragging down capital expenditure expectations in all three. However, India stood out among the BRIC nations with rising employment intentions. “The recent deterioration of business optimism and employment intentions is clearly centred on the Eurozone and Germany in particular, where confidence has fallen to levels similar to the downbeat moods evident in France, Spain and Italy,” said Markit’s Chris Williamson. “However, the survey provided some hope, because global business optimism remained higher than the post-crisis low seen late last year.”

Companies hoard cash against growing market uncertainty

Companies hoard cash against growing market uncertainty B Y T I M W A L L

BY TIM WALLACE

EUROPE’S listed firms are sitting on £110bn, a new study reveals today, but are afraid to spend it in the uncertain economic environment. German firms hold the most, with liquid assets and cash totalling £25.88bn – an average of £195m for each of the 133 firms covered in the study from Company Watch. British hoards came in next with a total of £18.92bn, or £90m for each of the 211 firms, followed by 61 Swiss firms that are sitting on a total of £14.6bn, averaging £239m. Despite the countries’ problems overall, large listed Spanish firms

hold an average of £285m in cash, and Italian firms £143m. “All European economies are affected to some degree by the Eurozone crisis and it looks as if the headlong growth of the BRIC economies is faltering, so it’s hardly surprising that the bosses of our largest businesses view debt as dangerous and cash as comforting,” said Nick Hood from Company Watch. “Investors in these public companies have a clear choice between companies which have to rely on a risk-averse banking sector with limited liquidity and their better endowed brethren, who hold plenty of cash, but aren’t currently willing to risk too much of it on expansion.”

Global business optimism fell in June as the debt crisis across the Eurozone continued Big
Global business optimism fell in June as the debt crisis across the Eurozone continued
Big firms' financial prospects dropped sharply in Q2
Business Optimism,
% net balance
Top European firms are sitting on huge cash piles -
but are unwilling to invest in the crisis
Staff Appointments fell in June
70%
Germany
Net balance of CFOs who
aremoreoptimisticthan
threemonthsago
70
50 = no change on previous month
Temp/ContractBillings
50%
65
£25.9bn
30%
60
50+
10%
55
50
Switzerland
-10%
£14.6bn
45
25 to 50
-30%
40
-50%
Italy
35
Permanent
UK
£3.4b
below 25
-70%
30
Placements
£18.9bn
France
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
25
£11.1bn
2007
2008
2009
2010
2011
2012
1998
2002
2006
2012

SOURCES: MARKIT, KPMG/REC, DELOITTE, COMPANY WATCH

BRIC troubles scare markets

DELOITTE, COMPANY WATCH BRIC troubles scare markets BY CITY A.M. REPORTER INVESTORS have been pulling hundreds

BY CITY A.M. REPORTER

INVESTORS have been pulling hundreds of millions of dollars out of stock funds that invest mainly in companies associated with the big four emerging market nations of Brazil, Russia, India and China. But it’s China that is causing most of the worry for investors, amid signs that the world’s second-largest economy is slowing more sharply than expected. Even emerging market bull Jim O’Neill, chairman of Goldman Sachs Asset Management, who coined the BRIC acronym, said he’s been a bit surprised by the slowdown in China. But O’Neill remains convinced China’s economy will be more than enough to make-up for any weakness in the other BRIC nations. “It is making the trajectory that I predicted difficult to stick with,” O’Neill said about the slowdown. But he added, “I find it hilarious that people question the thesis on the

basis of two quarters.”

The second-quarter was not kind

to so-called BRIC-focused stock funds,

with investors redeeming $787m

(£508m) during the period,

according to fund tracking firm

EPFR. Chinese-focused funds were hit

particularly hard, with investor

redemptions totalling 88 per cent of

the $1.6bn in new money those

funds took in during the first quarter.

Bankers and graduates hit with crashing wages and less hiring

B Y B E N S O U T H W O O D BY BEN SOUTHWOOD

WORKERS are taking a hammering as appointments collapse and wages stagnate, according to recruitment industry research published today. Permanent placements slumped in June – the first fall in six months and the quickest drop for three years, the Recruitment and Employment Confederation (REC) and KPMG report on jobs showed. The index crashed from 51 in May, to 46.8 in June. A score of 50 indicates no change. “The real worry is that the acceleration in the pace of decline suggests this isn’t a mere blip,” said

Bernard Brown, head of business services at KPMG, after temporary staff billings fell for the seventh month running, accelerating to the fastest pace of contraction since mid 2009. Chief executive of REC Kevin Green said: “A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates enter the labour market over the summer.” Separate research published by the Association of Professional Staffing Companies showed graduate salaries were down 20.5 per cent on last year, while banking and insurance performed

consistently poorly across nearly all regions and job types. Although the results show permanent placements rising 17 per cent in June compared to May, the level of placements was still down strongly on the year. “The latest data are an improvement on the bad news from early spring, but it’s not clear that this is the beginning of a long-term positive trend,” said chief executive Ann Swain. “It’s not been a good time to be a banker recently, and fears about new regulation, whether from Europe or the UK, in the wake of the recent scandals could put a dampener on recruitment.”

Fraud total down but computer crime is the new battleground

Fraud total down but computer crime is the new battleground BY BEN SOUTHWOOD FRAUD dropped massively

BY BEN SOUTHWOOD

FRAUD dropped massively in the first half of this year but worryingly is mainly perpetrated by management, says research released today by KPMG. Fraud figures fell from £1.1bn during the six months to June 2011 to just £374m in the same period this year – the lowest since the second half of 2006. Though this came from an increased number of prosecuted cases, up from 131 last year to 136, there were a smaller number of major cases. Most cases tend to come from within organisations, according to the study, with 55 per cent of the total perpetrated by management. Employees, on the other hand accounted for under six per cent.

One key difference this year has been the absence of so-called

“missing trader” VAT fraud after a government campaign – no crimes of this type were prosecuted in the first half of 2012. KPMG fears that streamlining operations in a tough economic environment may lead to less oversight of managers, giving them more leeway to engage in fraudulent activity. But this oversight may not always give the results intended – one notable case

is that of the counter-fraud head at

a bank who pocketed £2.4m in

procurement scams. Cyber-crime has emerged as a new battleground in fraud – one case involved the sale of over 340,000 individuals’ details, and losses to businesses of some £27m.

14

MONDAY 9 JULY 2012

cityam.com

CITYDASHBOARD

9 JULY 2012 c i t y a m . c o m CITY DASHBOARD YOUR

YOUR ONE-STOP SHOP FOR JOB MOVES, BROKER VIEWS AND MARKET REPORTS

CITY MOVES in association with WHO’S SWITCHING JOBS Edited by Tom Welsh LONDON Capita Insurance
CITY MOVES
in association with
WHO’S SWITCHING JOBS Edited by Tom Welsh
LONDON
Capita Insurance Services
Alliance Medical
The specialist provider of Lloyd’s
services has appointed John
Holm as commercial director. He
joins after five years at National
Australia Bank, where he was
insurance sector head and
director of corporate banking for
its Clydesdale Bank business.
& Walker’s business crime and regulatory investigations
group. Richard Honeybourne joins from Addleshaw
Goddard. He is a funds specialist and acts on complex
headline transactions.
REPORT
The healthcare diagnostic services provider has appointed
Nick Burley as group chief financial officer. He joins from
Tianhe Chemicals Group, a Chinese chemicals firm, where
he served as chief financial officer. Burley has also served in
the same role for The Vita Group and McCormick.
OneSavings Bank
Katten Muchin Rosenman
Holm previously held a number
of senior roles at RBS, notably as director of origination for
the insurance sector.
The mutual bank has announced that Rodney Duke is
joining its board as a non-executive director. He will also
chair its risk committee. Duke is an experienced FTSE 100
non-executive director, and worked previously as group
general manager at HSBC. He was also on the board of
Alliance & Leicester.
Bank deputy
and M&S take
centre stage
Wainbridge
The full service law firm has announced a triple hire into its
London real estate team. Stephen John and Ranjeev Kumar
join from the London office of Fried Frank, and will serve as
special counsel and partner respectively. Joe Payne will also
arrive as a partner from Field Fisher Waterhouse. Their
appointments follow the recent hire of Peter Sugden as the
law firm’s London managing partner.
Otkritie Capital
Jonathan Hardie has been appointed head of asset
management in the London team of the property
investment firm. He has over 25 years’ experience in asset
management, and has previously held positions at
Westbrook Partners, Haslemere Estates and MEPC.
Fox Williams
The law firm has appointed two partners to its financial and
regulatory practices. James Carlton joins from Russell Jones
The investment arm of the Russian financial group has
appointed Pavel Dubovets as sales director for its
derivatives team. He joins from Troika Dialog, where he has
worked in equity sales for the past 11 years. Dubovets has
also held senior roles at Surgutneftegaz, the gas firm.
A LL eyes will be focused on the
Treasury Select Committee
hearing today, as deputy Bank
of England governor Paul
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
THE WEEK AHEAD
BESTof the BROKERS
ICAP PLC
Alcoa and JPMorgan start earnings
season as traders await more data
313.60
345
p
6Jul
340
335
330
325
320
W ALL Street has been running in
315
circles for the past two months,
and the pattern may continue
2 Jul
3 Jul
4 Jul
5 Jul
6 Jul
despite the upcoming start of the
earnings season.
Quarterly report cards from blue-chips
Alcoa and JPMorgan this week could fade
into the background as traders jockey for
position before key data from China and
more central bank headlines.
After three major central banks eased
monetary policy last week, investors will
comb through the minutes of the latest
Federal Reserve policy meeting, which will
be released on Wednesday, to see what offi-
cials said about a further round of asset
purchases.
US stocks face headwinds from a slowing
global economy. Europe’s debt crisis has
drawn much of the attention, but little
clarity has emerged about how the
Eurozone’s debt and banking problems
will be fixed despite numerous meetings.
The uncertainty has left the market in
the hands of traders, who look for opportu-
nities for quick returns, while investors,
from the Bank of Japan that would depreci-
ate the yen and would be a short-term pos-
itive for global equities,” said Brian
Jacobsen, chief portfolio strategist at Wells
Fargo Funds Management in Menomonee
Falls, Wisconsin.
The recent central bank actions are seen
as precautionary moves as the global econ-
omy stalls. This week’s gross domestic
product data out of China will help give
the market important clues about the
world’s second-biggest economy.
“Some of the negative news is built in,
and I’m anticipating a positive surprise
coming out of China,” Jacobsen said.
Economists expect China to report year-
on-year GDP growth of 7.6 per cent, com-
pared to an 8.1 per cent yearly gain in the
first quarter.
Other Chinese data next week include
inflation, loan growth, trade balance and
retail sales.
Europe remains on traders’ minds
despite an agreement last week that opens
the door for troubled banks to receive res-
cue funds. However, Italian and Spanish
ICAP
Numis has downgraded the interdealer broker from “buy” to “hold” and
lowered its target price from 412p to 344p after a fall in electronic
volumes over June and potential knock-on effects of the ongoing Libor
scandal. The broker has downgraded its forecasts by four per cent for
this year and five per cent next year, and continues to see negative
revenue pressure from regulation for several years.
Carillion PLC
251.40
285
p
6Jul
280
275
270
265
260
255
250
2Jul
3Jul
4Jul
5Jul
6Jul
CARILLION
who are in the market for the long haul,
watch from the sidelines.
The S&P 500 flirted with going negative
for the year shortly before posting its best
week since December. The benchmark
index is less than 0.1 per cent above where
it was two months ago.
“Traders are happy going in and out of
the market within a range, but for the aver-
age investor it’s a market in which the
path is still unclear,” said Quincy Krosby,
market strategist at Prudential Financial in
Newark, New Jersey.
On Friday, the S&P 500 closed down 0.55
per cent for the week. The index has posted
four weeks of gains and four of losses in
the last eight.
Weak US labour market data on Friday
raised the chances in favour of the Fed
launching a new round of monetary stim-
ulus to boost growth, according to a
Reuters poll.
The Fed’s minutes midweek will be fol-
lowed Thursday by the Japanese central
bank’s views on the health of its economy
after a two-day meeting.
“If we do see additional asset purchases
borrowing costs have resumed their rise in
bearish sign for markets.
Testimony by ECB President Mario
Draghi to Europe’s parliament today will
be followed by a meeting of Eurozone
finance ministers.
Aluminum company Alcoa reports sec-
ond-quarter results today. Alcoa surprised
a
UBS has downgraded the support services and construction firm from
“neutral” to “sell” with a target price of 230p , seeing low growth potential
in its support services division and even possible revenue decline in 2013.
The broker says unsustainable construction margins and low cash conversion
will also weigh on the stock. However, UBS does see a possible upside to its
new rating if contracts materialise in the second half.
Marshalls PLC
Wall Street last quarter with a positive out-
look, but the global slowdown could make
80.00
90
p
6Jul
it
harder for the aluminum maker to keep
88
its bullish stance.
JPMorgan Chase & Co will also report
earnings this week, with investors eager to
know how big the bank’s losses will be fol-
lowing a botched trade. The initial estimat-
ed loss at the bank was $2bn but later
reports indicated it could balloon to more
than four times that.
“The idea is that analysts have been
marking down not only earnings estimates
but revenue estimates, and the reason is
because of weakness in Europe, which is
spilling over to weakness in global opera-
tions for many companies,” said Brian
Gendreau, market strategist with Cetera
Financial Group in Gainesville, Florida.
Tucker presents his side of the story
in the Barclays/ Libor scandal.
His appearance will be followed
tomorrow by one from Marcus Agius,
the former Barclays chairman.
Today sees trading updates from
housebuilder Bovis – expected to be
positive – and recruitment group
Michael Page.
Companies updating the market
tomorrow include ASOS and
Interserve, while Big Yellow Group,
Intermediate Capital Group, Young &
Co’s Brewery, Blackberry maker RIM
and retail giant Marks and Spencer
are all holding annual general meet-
ings.
Hundreds of Marks and Spencer’s
shareholders are likely to turn up for
the ubiquitous free sandwich. But they
are likely to also come away with bad
news from chief executive Marc
Bolland, with analysts predicting a fall
in trading of general merchandise,
including clothing.
In economic news, the Office for
National Statistics (ONS) is expected to
announce a marginal increase or
decrease in May’s industrial produc-
tion and manufacturing output as the
market remains stagnant.
Wednesday will see trading updates
from Barratt Developments,
Bloomsbury Publishing, JD
Wetherspoon and luxury retailer
Burberry.
Meanwhile BT Group, FlyBe, ICAP,
UK Mail Group and supermarket J
Sainsbury will hold their annual
meetings.
On Thursday, retailer SuperGroup is
set to give full-year results, with
investors keen to see if it can maintain
the massive growth it had as a private
company. Since floating, it has been
plagued by problems including “arith-
metical errors” in its profit and loss
forecasts which resulted in a profit
warning.
Trading updates are due from
Associated British Foods, Centaur
Media and Premier Oil.
Meanwhile, in economic news the
Office of Budget Responsibility (OBR) is
set to publish its report on fiscal sus-
tainability. The report is expected to
contain the OBR’s long-term view of
the UK’s public finances, including tax
and spending pressures.
On Friday both Dell and British Land
are due to hold their AGMS.
86
84
82
FTSE
80
5,662.63 6Jul
5,750
78
5,725
2Jul
3Jul
4Jul
5Jul
6Jul
5,700
MARSHALLS
5,675
Panmure Gordon has downgraded its recommendation on the
landscape, driveway and garden products retailer from “buy” to “hold”
following a trading update, which saw the business impacted by bad
weather from April to June. Though the broker sees much to be positive
about at the group in terms of groundwork, Panmure says it is hard to
see a share price catalyst in the short term.
5,650
5,625
5,600
5,575
2 Jul
3 Jul
4 Jul
5 Jul
6 Jul
16
16

THEFORUM

MONDAY 9 JULY 2012

In association with
In association with
16 THE FORUM MONDAY 9 JULY 2012 In association with cityam.com/forum MF Global’s bankruptcy highlights perilous

cityam.com/forum

MF Global’s bankruptcy highlights perilous faults in UK finance rules

L ESSONS have been learned” is today’s platitude of choice. It was used to account for the failings that led to the collapse of Lehman Brothers – an event

that was meant to change everything. So it was with disbelief that I heard from a group of MF Global clients. MF Global was a derivatives broker that filed for bankruptcy last October. It bet $6.3bn on the bonds of Europe’s most indebted nations, contributing to an internal liquidity crisis. Before bankruptcy, it seemed to dip into seg- regated US customer funds to cover margin calls through MFGUK, its UK operation. The UK was a convenient cover for such trades compared to the US, where the reuse of client collater- al on this scale is forbidden. Regulators from other jurisdictions acted quickly to get client money back. Canadians had their funds fully returned, Singaporeans got 90 per cent and US clients 72 per cent. In the UK the figure is just 26 per cent. The case highlights two shortcom- ings in British finance. The first is re- hypothecation, a process whereby brokers use, for their own purposes,

a process whereby brokers use, for their own purposes, MARK FIELD assets posted as collateral by
MARK FIELD

MARK FIELD

assets posted as collateral by clients. The second is the failure of UK regula- tion and its impact on the City’s repu- tation as a safe place to do business. Re-hypothecation usually involves a right of brokers to transfer assets held in custody. They can use collateral to back their own trades and borrowing. This is largely a UK practice. In Canada, re-hypothecation is banned. In the US, client protection rules exist alongside a cap of 140 per cent on the amount a client’s balance can be re- hypothecated. In the UK, there is no limit unless specifically negotiated. This links us back to UK regulation. Among the edicts of the Financial Services Authority (FSA) is the Conduct of Business Sourcebook, which explains how institutions

should classify clients – as retail, pro- fessional or eligible counterparty. Retail funds are held in segregated accounts. But the money of profes- sional or eligible counterparty clients can be lent to the broker when the client agrees to a title transfer. Clients

have little control over their classifica- tion and can be pressured to agree to

a title transfer structure to obtain

financing – with huge implications if the broker goes bust. Non-retail clients are unsecured creditors and are left far down the pecking order come bankruptcy. This is the hapless fate of most MFGUK clients, who thought that “client money was client money.”

They are now jostling with others for

a share of the property. It will be a

long and expensive process. It didn’t need to be this way. The FSA put MFGUK into special administra- tion when it was technically solvent, with sufficient resources to give regu- lators scope for a less disruptive strat- egy to clients and counterparties. But there’s more at stake than the return of client funds. Brokers have exploited UK regulation to transfer an

unknown amount of client funds to the UK to be re-hypothecated many times. This could compromise the sta- bility of the entire UK financial sys- tem. While money does come into the UK, clients and taxpayers potentially bear all the cost and none of the bene- fit in the event of systemic failure. There is a second shotcoming in

‘

The FSA’s bungled

handling of the MFGUK case shows its inability to fulfil its duties

British finance. The speed at which clients’ money is returned on bank- ruptcy is a litmus test of the attrac- tiveness of the City. Clients will have realised that their money may not be as safe as assumed, and re-hypotheca- tion also makes sorting out who gets what from an estate very messy. When the City’s competitor jurisdic- tions return funds quickly, it will be

no surprise if investors turn away from us. The FSA’s remit is to protect clients and maintain confidence in our financial system. Its bungled han- dling of the MFGUK administration

highlights the FSA’s inability to fulfil its duties. To shore up London’s repu- tation before confidence drains away, the MFGUK case needs immediate attention from the wider UK financial establishment. We must examine re-hypothecation. The ability to manipulate collateral is

a good way to promote liquidity. But

this benefit must be balanced against

the cost of investors overlooking the UK, and any taxpayer burden if there

is systemic failure. We must dispense

with re-hypothecation or limit the percentage of client funds that can be used for this purpose. The FSA’s awareness of client segre- gation problems after Lehmans debunks the myth that “lessons have been learned”. This latest episode of regulatory incompetence risks dam- aging London’s international compet- itiveness as a financial centre. Mark Field is Conservative MP for the Cities of London and Westminster.

Agree? Disagree? Got a sharp comment? The Forum wants you to join the debate.

Got a sharp comment? The Forum wants you to join the debate. Twitter: @cityamforum on the

Twitter: @cityamforum

Forum wants you to join the debate. Twitter: @cityamforum on the web: cityam.com/forum Top responses will

on the web: cityam.com/forum

Top responses will be reprinted in The Forum.

Top responses will be reprinted in The Forum. or by email: theforum@cityam.com Trust in the City

or by email: theforum@cityam.com

Trust in the City is central to its ability to create jobs and foster growth

O UR SUCCESS as a global

financial centre depends

on trust. Recent events

have shaken that trust,

and we must restore it. It is

the responsibility of us all to make the case for the importance of the City to both the British economy and to other economies abroad, both now and in the future. It is vital in creating jobs and growth. The services we provide are our livelihoods, but they also help to create and support the livelihoods of our fellow citizens, up and down the country. But the City must be trusted if it is to help create jobs and growth. If it is not, our ability to serve the

jobs and growth. If it is not, our ability to serve the CITY MATTERS DAVID WOOTTON

CITY

MATTERS

DAVID WOOTTON

DAVID WOOTTON

wider economy will be restricted by overly burdensome regulation and law. My concern is that the way in which the current debate is being conducted omits the central importance of the City to the wider economy and also the fact that only a tiny number of people have not met the standards the City and the

wider community expect of them. Over 300,000 people work in the City, and nearly all of us go about our work with the right values and the right ethos. We deserve the

trust our clients put in us. We must also convince others that we are to be trusted. On Wednesday, when I entertain Her Majesty’s Judges to dinner at the Mansion House, I will – as Lord Mayor and as a lawyer – reaffirm the importance we attach to the rule of law. This is not a legal abstraction. It

is about having the right

regulations and the right laws in place, but it is about those who are governed by regulation and law to

following them because they know them to be right. They should be followed by choice, not by necessity. It is no coincidence that international business bases itself in London: English law and British politics provide the stability, predictability and clarity that it needs – and because international business knows that we go about business in the right way. Our commitment to the rule of law is valued right across the world. There is no doubt that the reputation of London as a global

financial centre has been damaged by the minority involved in the Libor scandal. That is why we need to stress the importance of

upholding the highest standards of ethics when it comes to dealing with clients, shareholders and the public. Only then can the City prove that we are once again worthy of the public’s trust. We should be firm with those who have let others – including the rest of the City – down and we must be seen to be firm. But we must also make it clear that we live the right values in our work and are worthy of the trust of our clients, shareholders and country. These are the standards that have made London the world’s pre-eminent global financial centre. David Wootton is Lord Mayor of the City of London.

FLIGHTS STRAIGHT

FROM £63

ONE

WAY*

global financial centre. David Wootton is Lord Mayor of the City of London. FLIGHTS STRAIGHT FROM
global financial centre. David Wootton is Lord Mayor of the City of London. FLIGHTS STRAIGHT FROM
global financial centre. David Wootton is Lord Mayor of the City of London. FLIGHTS STRAIGHT FROM
global financial centre. David Wootton is Lord Mayor of the City of London. FLIGHTS STRAIGHT FROM

MONDAY 9 JULY 2012

The Forum is open for you to take part. Got a sharp comment on one of today’s 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

RAPIDresponses

Cheapened money

[Re: Why QE is not the answer to Britain’s economic problems, Friday]

Quantitative easing is a disaster. Milton Friedman wouldn’t have supported this further injection if he were still alive, and he’d be right – as he was about most things. He predicted the euro would have about a 10 year lifespan. It seems he was pretty spot on about that too. Though I don’t blame the euro so much as its poor management, as governments have pandered to the whims of their citizens.

Steve Okare

This article is correct. Debasing our currency will inevitably result in long-term damage to our economy.

Hugh Harris

Financial pain

QE is like financial morphine. Imagine a patient post-operation: there is only so much morphine the body can take to dull the pain. If you have too much, it can harm or even kill you. It will only last for a while, and then you just have to get on with recovery and live with the pain.

Chris Staerck

[Re: The fall of Bob Diamond: How tragedy can stalk even the most powerful, Friday]

Crowing at the resignation of Bob Diamond is just another instance of popular glee when- ever anyone successful falls from a great height. And Marc Sidwell is right to say it’s a tragedy – through their hard work, these men and women enrich all our lives.

Tim Walker

work, these men and women enrich all our lives. Tim Walker TOP TWEETS There is no

TOP TWEETS

There is no such thing as cheap money. Everything has a value that must be paid sooner or later.

@Parsonsivor

Blaming Ed Balls for Libor because he was City minister is like blaming the transport minister for every car crash.

@campbellclaret

I can’t understand the calls for a judge-led inquiry into Barcays, considering the waste of time and money Leveson has become.

@ChillieHead_86

Hollande is more grounded in reality than Labour. He admits that “national debt is the enemy of the left.”

@David_RutleyMP

Have recent events shown that relationships between banks and regulators are too close?

relationships between banks and regulators are too close? YES Steven Woolfe NO Stephen Gilchrist “Without banking

YES

Steven Woolfe

banks and regulators are too close? YES Steven Woolfe NO Stephen Gilchrist “Without banking Britain is

NO

Stephen Gilchrist

“Without banking Britain is bust,” a taxi driver recently told me. He is right. A competitive, free, financial market is vital to our country’s well-being. Any regulation imposed should be applied equally to all market participants. What the Libor scandal has shown is that the too big to fail principle has created a regulatory advantage for bigger banks. Regulators and banks have a cosy relationship of soft words, nuances and nudges on how banks can conduct their business. This is dangerous and unfair. Smaller players in the markets do not have the same relationships and consequently pay for it in higher trading costs or increased regulatory burden, while compliance officers face huge personal costs when their advice is ignored. Our concern is that regulators have to be seen to be fair to all, not just the special few. Otherwise the financial markets will smell and rat and desert the great ship, the City of London.

Steven Woolfe is Ukip financial services spokesman.

Pointing the finger at the FSA and shouting “conspiracy!” misses the point. “Cock up” is a more accurate battle cry. While individuals within the regulator are assigned to individual banks to enable it to understand the bank’s business, it is not the regulator’s business to manage the bank’s affairs. Resourcing and the quality of resources is the issue. Missing warning signs about Libor problems is not necessarily indicative of an unhealthy relationship with the banks. It points much more towards the dichotomy of a relatively compact regulator being expected to monitor the behaviour of a global financial giant, operating in an essentially amoral industry. Especially when the tension between doing well for the bank, the economy or the commission-earning individuals within it, is ever present. Trust also plays a part. The banks must comply with FSA principles. It must be assumed as a default position that they are in fact doing so.

Stephen Gilchrist is chairman and head of regulatory law at Saunders Law.

17
17

Hollande is at risk of slaying France’s golden tax geese

P RESIDENT François Hollande is only just settling into the Elysée, but ripples of unrest towards his tax policies are already

being felt, both in France and further afield. The headline figure is the pro- posed 75 per cent rate of income tax, which will apply to income of over 1m (£793,000) a year. This will be a substantial increase for those taxpayers – albeit few in number – whose income falls with- in this bracket. Of wider impact are the proposed changes announced by the French government on 4 July. These involve not only increased rates of income tax, but also wealth tax, capital gains tax and inheritance tax. Some of the changes will affect a considerably larger proportion of the popula- tion, including non-resident own- ers of residential property in France. These significant increases in tax- ation may result in less revenue being generated, partly because some who would be affected by the new rules will simply move abroad until the tax climate improves. This would have the wider conse- quence that France could lose the sort of people who are helpful to have around in difficult economic times – entrepreneurs and high- achievers. Prime Minister David Cameron recently quipped that England would be “rolling out the red car- pet” for French taxpayers seeking to escape the 75 per cent charge. This remark was, for obvious rea- sons, not well received across the Channel. Economies in the devel- oped world all seek to attract organisations and talented individ- uals who will stimulate economic growth. The UK is not alone in

who will stimulate economic growth. The UK is not alone in JAMES JOHNSTON doing so, and
JAMES JOHNSTON

JAMES JOHNSTON

doing so, and one of the balancing acts facing the new government in France will be to avoid frightening off those who fall within this cate- gory – either currently based in France or looking where to invest. Where governments wish to retain internationally mobile entrepreneurs and investors, the way in which they introduce tax and the language they use about it can be important. An example of how not to do it was seen in the unrest caused within the interna- tional community in the UK in 2008 when, without warning, the previous UK government proposed sweeping changes to the tax sys- tem affecting non UK domicil- iaries. The tipping point at which any individual decides to move from one country to another, or to cease investing in one economy in favour of another, will always depend on a range of circumstances – by no means only to do with tax. But as governments the world over have learned, there is a point at which raising taxes can become counter- productive. In the 1970s, when tax rates in this country had reached 98 per cent, some took the view that France was a pleasanter place to be resident. It will be interesting to see how many residents of France decide to reverse that trend. James Johnston is a private wealth partner and head of the French group at Bircham Dyson Bell.

partner and head of the French group at Bircham Dyson Bell. 4th Floor, 33 Queen Street,

4th Floor, 33 Queen Street, London, EC4R 1BR Tel: 020 3201 8900 Fax: 020 7248 2711 Email: news@cityam.com

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18

MONDAY 9 JULY 2012

cityam.com

WEALTHMANAGEMENTPERSONAL FINANCE

Big changes are happening in the way you are charged – you need to understand this new investment landscape

– you need to understand this new investment landscape INVESTMENT COMMENT GRAHAM MANNION A RE you

INVESTMENT

COMMENT

GRAHAM MANNION

GRAHAM MANNION

A RE you ready for the retail distribution review (RDR)? After many years in the planning, the implementation of the RDR is

quickly approaching on 1 January 2013. While it will change the way financial advice is received, recent surveys show there is little awareness amongs investors of the review and why it matters. An InvestSmart survey found 93 per cent of investors have no awareness of the RDR, while another, carried out by Defaqto, found that 80 per cent of independent financial advisers (IFA) believed the public knew nothing of the RDR. However, every investor should be speaking to their advisers about the RDR. Sadly, when it comes to financial advice many investors do not under- stand what they are paying for and whether it’s a fair price. The RDR is designed to help solve this problem. It represents a very important change in the regulation of financial advice, designed to improve value for money. Investors will be entitled to clear and simple information about the fees they are being asked to pay, and should therefore in a better position to decide whether they represent fair value. There are three main things investors should be asking their finan- cial adviser about:

Find out what kind of advice your adviser will be giving you.

Under the RDR, all advisers will have to inform their clients whether they provide “independent” or “restricted” advice before the advice is given. Independent advice is based on a com- prehensive and fair analysis of the rel- evant market. It is free from restrictions that could impact on the adviser’s ability to recommend what is best for the client. If the advice is not independent, it’s called restricted. It can translate into advice on a limited range of products

1
1
GETTY
GETTY

Are you sitting comfortably

What to ask your financial adviser to avoid costly fees

or providers. Firms who offer restrict- ed advice will be required to tell you this and what the restriction is before they provide a service.

Know what you are paying your adviser for and give your con-

sent. Advice has never been free, but many consumers may think it has been because they previously paid the adviser indirectly, through the money they invest in the product. The RDR will require advisers to make any such payments explicit (if they do not do so already) and gain your con- sent.

2
2
3
3

Know your adviser’s pricing

model. Ask your adviser how much they propose to charge and what services they will provide for that fee. Do not confuse the cost of advice with the cost of the product you are buying. If the adviser propos- es to link their fee to the cost of the product so that you do not have to pay for advice directly, be very sure that you understand the on-going payment that the adviser will receive as a result of this arrangement post- RDR. And satisfy yourself that it is a fair payment for the on-going advice they are providing.

A big issue is the advice gap the RDR could bring to investors with lower amounts of money to invest. There is speculation that financial advisers who are unable to meet the RDR requirements will leave the industry. In addition, the fee-based approach will mean certain investors are unable, or unwilling, to pay for financial advice. These investors will be left to a Do It Yourself approach to investing and plotting their financial future them- selves. There are a number of compa- nies that already fill this gap and more are on the way. If you fall into

this category, ensure you explore the options available to secure a solid financial future. Ultimately, in the lead up to RDR implementation, don’t be afraid to ask direct and perhaps difficult questions around the changes the RDR will bring and what they mean for your investments. Good advisers should welcome a client who wants to be informed, and good advisers should be confident about the quali- ty of their work and the fact that it justifies the fees they wish to charge. Graham Mannion is managing director of InvestorBee.

charge. Graham Mannion is managing director of InvestorBee. INVESTMENT COMMENT JEREMY FAWCETT Y OU’VE probably

INVESTMENT

COMMENT

JEREMY FAWCETT

JEREMY FAWCETT

Y OU’VE probably changed the way you buy airline tickets and car insurance over the last decade, and it’s likely

that you shop around on the internet or buy through price comparison sites. But what about the way you invest your own money? Some of us do it ourselves, some leave it to a trusted adviser, but most of us give it as little thought as possible. According to our recent research, there are 6.5m active private investors in the UK and the number of people who choose to do it themselves is increasing. There is a view that we all need to take more interest and have more control over our long- term financial security. If that means managing your investments online, what are the options and which approach is right for you?

Modern means for managing your money

Self-directed investors often use “platforms” or “fund supermarkets” and most services will include the ability to buy and sell investments, and to take advantage of tax savings in pots like individual savings accounts (Isa) or self-invested personal pensions (Sipp). As well as showing users what they’ve got, they usually offer information and guidance to help them make investment decisions. Asset managers will sell their own funds directly to you through their websites, but it may not always save you money compared to buying through your Independent Financial Adviser. Most won’t give you access to other asset managers’ funds or enable you to manage other investments. However, some have decided to offer open architecture, where you can buy other companies’ funds on their platform. Fidelity was one of the first with FundsNetwork, which is a comprehensive

proposition with some slick tools. Alliance Trust Savings has a more basic website but takes a different approach to pricing. Discount brokers offer funds directly to the self-directed investor at a discount, by rebating back some of the commission that would ordinarily be paid to an IFA. Some, like Cavendish Online, are undoubtedly cheap but limited in

their scope. At the other end of the spectrum, Hargreaves Lansdown offers a very comprehensive investment proposition with high levels of customer service, but are not as highly discounted as some of

customers to consolidate all their pensions into Sipps – an approach that Bestinvest would also like their clients to take. Stockbrokers have traditionally specialised in listed securities, like stocks and shares, but these days they are making it easier and cheaper for their clients to include funds in their portfolios. Barclays Stockbrokers re-launched their proposition in February, with more focus on funds and more competitive pricing. Interactive Investor has done the same and has a website jammed full of information and tools for engaged investors. But what about the millions of people who don’t enjoy managing their investments? Barclays and HSBC have both launched simple investment propositions over the last year, so

GETTY
GETTY

their discount broker peers. It is, in our view, the market leader for self-directed investors, with almost 400,000 clients and are at the forefront of assisting

you can see your investment portfolio next to your online banking. New entrants, like InvestorBee and rplan, offer new thinking using the “wisdom of crowds” and slick planning tools to guide your decision making. So which platform is right for you? It very much depends on your experience and your level of engagement with your investments but there are plenty different propositions for different types of people – horses for courses. Do you want simple, sophisticated, hand- holding or ultra low cost? Are you a long-term saver or a short-term trader? Figure out what’s important to you and there are good options to put your money on. Try www.which.co.uk for further tips, or look at www.candidmoney.com which has guides to using fund supermarkets and Isa discount brokers – including the costs involved. Jeremy Fawcett is head of new platform channels at The Platforum.

20

MONDAY 9 JULY 2012

cityam.com

LIFE&STYLE

TRAVEL

Live like a true king in Kingston

T HE SUN descends over Kingston town, casting a warm blood orange-hued glow over the city and dramatic dock beyond. At

street level music systems crank out

raga, cars beep, locals chat animatedly by beer shacks and jerk chicken stands as our car weaves masterfully through the throng of traffic. “Rush hour,” explains our driver, handing me a beer as I sit back, watching the sunlight fade. We’re here to unwind

in two legendary, recently refurbed

resorts: Golden Eye and Strawberry

Hill – and already I’m relaxed.

Jamaica is having a bit of a “moment”. Stars have been flocking to the island of late (not least HRH Prince Harry on his recent Caribbean tour.) In addition to the buzz surrounding Golden Eye and Strawberry Hill, GeeJam, one of the island’s other hot hotel residences and partnering resorts, has become the go-to for any recording artist in search of a record- ing haven (Alicia Keys is in residence when I am there, making her album at the hotel’s studio. Snoop Dog took it over last month.) Sensing the movement, perhaps, in March British Airways also increased

its flight frequency for the summer to

Kingston from Gatwick Airport from two to three flights a week. GoldenEye owns almost mythic sta- tus in Jamaican history. The home of Ian Fleming from 1946 (and place where all James Bond novels were penned), there’s not a celebrity or icon who hasn’t frolicked on its beaches. Noel Coward loved staying there so much he bought a house, Firefly, near-

‘

The Bob Marley

museum is worth a visit to hear the staff sing his tunes to you

by in 1949. Throughout the 1950s, the

small strip of northern coastal land was a hub for visiting luminaries including Katherine Hepburn, Elizabeth Taylor and Errol Flynn, who gallivanted on its beaches. The proper-

ty later gained Rock and Roll status

when Island Records founder and Jamaican resident Chris Blackwell pur- chased it in 1976, attracting The Rolling Stones, Sting and others to hang out and party. He’s done the same with GoldenEye in the past year, adding 25 acres, build- ing 21 swanky new hut residences and suites for guests around the pristine beach and lagoon, adding a dramatic saltwater pool and beach bar-meets- infinity pool, refreshing the original Fleming Villa as a sleek MTV cribs-style (but chicer) five bed residence, and launching a lagoon spa. The result is quite something: a secluded Jamaican oasis with a blissful beach on one side, emerald lagoon waters on the other,

and lush jungle-bedecked hills in the distance. It’s easy to see why the resort is attracting fresh waves of glitterati –

P Diddy, Jay Z, Beyonce, Naomi

Campbell and Kate Moss are some recent visitors. But enough of the celebrities. My abode for the duration is one of the new beach huts, a one bedroom suite complete with vaulted ceiling, living area (with gigantic daybed), ceiling fans, roll top bath, kitchen, garden (with outdoor shower), and — most

For a relaxing paradise vacation, Jamaica’s finest is worth a look, says Lucie Greene

Jamaica’s finest is worth a look, says Lucie Greene Dreadlock holiday: Clockwise from top, GoldenEye and

Dreadlock holiday: Clockwise from top, GoldenEye and below, Fleming pictured in 1964

from top, GoldenEye and below, Fleming pictured in 1964 KINGSTON: NEED TO KNOW SLEEP: Stay at

KINGSTON: NEED TO KNOW

SLEEP:

Stay at GoldenEye from £355 per night. Price is based on two sharing a Lagoon Suite and includes breakfast. Stay at Strawberry Hill from £150 per night. Price is based on two sharing a one-bedroom cottage and includes breakfast. To book: visit www.islandoutpost.com or call 01895 522 476

FLY:

All-inclusive World Traveller fares are available to book on ba.com for £679. World Traveller Plus fares are available from £1,095 and Club World fares from £1,975.

available from £1,095 and Club World fares from £1,975. blissfully — a terrace with steps direct-

blissfully — a terrace with steps direct- ly on to the beach. The vibe is laid-back

luxury — I pad around bare foot in a bikini, lounge in the resort’s beautiful tie-dye bath robes (made by a local artist) and mix myself drinks at the kitchenette. Vibrant stylish furnishings come courtesy of 1960s doyenne Barbara Hulanicki. The Bizot beach bar is meters away and cranks out rare reg- gae, ska, and hip hop throughout the day. Each of the suites has all the frills you’d expect, including free wifi, tea, coffee, bottled water, cable TV. At night I fall asleep to the soundtrack of gently lapping waves. It’s heaven. The food is pretty good too, modern Jamaican food a twist, and bistro clas- sics if you want them. Slow cooked ackee and salt fish in the morning with a coffee starts the day. Coconut crusted shrimp in the evening is a hit. The barmen at both the resorts mix a

mean rum punch. GoldenEye is prima- rily about relaxing but there are water- sports on offer if you choose. Jet skis are available to hire. Snorkelling, kayaking and paddle boarding are free. I spend one afternoon paddling round the lagoon and in to the next bay. The spa is recommended; all the treatment rooms are in self-contained huts built in to the hillside with open

shutters that allow a gentle breeze. Treatments use locally-sourced ingre- dients. (I had a warming deep tissue pimento and ginger massage with tropical birds tweeting outside which sends me in to a relaxation coma.) Nearby the town of Oracabessa is worth a look for a slice of local life. I also visit Firefly, Noel Coward’s dra- matic hilltop residence, which boasts staggering views across the coastline. And on to Strawberry Hill… The drive from GoldenEye to Strawberry Hill — which is perched high in the hills over- looking Kingston — is a winding tra- verse through the Jamaican Hills. It’s a fascinating, and beautiful, window in to Jamaican life. I stop to buy jerk chicken from roadside stands and fresh (fresher than I’ve ever tast- ed) pineapple. The final zig zag in to the clouds seems endless at one point, but we eventually turn a corner in to the Strawberry Hill grounds and it’s clear that it’s worth it. Strawberry Hill is 3,100 meters above sea level. Originally a 18th century cof- fee plantation, then a restau- rant, it’s been owned by Chris Blackwell since 1972, who trans- formed it in to

a hotel in the 90s, adding several rooms, and later the pool. The hotel has just completed a careful restora- tion and facelift for 2012. There’s something utterly charming about this place. The small 19th centu- ry-style white wooden hut residents are perched in to the surrounding hill- side around the main clubhouse, and feel like a window in to a bygone colo- nial era. Original features, such as tra- ditional cut out wooden decorative panels featuring giraffes and lions have been kept. Cute kitchenettes in rooms feature original decorative tiles. Each has small balconies overlooking the mountainscape. They have all the luxuries — soft bil- lowing sheets and four-poster beds — but there’s also a feeling of old-fashioned rusticness too. Floorboards creek, the doors are locked using (wait for it) actual keys, there’s no air conditioning (you don’t need it that high up) and no internet, except for in the clubhouse. At the heart of the property, and at it’s highest point, is the club- house and restaurant, which features one of the most dramatic and stunningly beau-

which features one of the most dramatic and stunningly beau- tiful infinity pools I have ever

tiful infinity pools I have ever seen. A glacial pane of water gives way to palm trees and Kingston bay beyond. Guests can eat by the pool, or sit on the open terraces. At night local Kingstonians come up to sample the Jamaican fare. Like GoldenEye, Strawberry Hill is also steeped in cultural history. Bob Marley famously convalesced here after being shot in 1976. The Rolling Stones, Marianne Faithful, Grace Jones, Sting, Peter Tosh, and Willie Nelson have also drank in its bar and today an expertly crafted playlist still infuses the atmos- phere with grooves from 8am onwards. Nearby, guests can wander to the local Craighton Estate Coffee Plantation and buy Blue Mountain cof- fee. The hotel also has a decent spa. But really it’s all about the views. I spend one, two, then three days peri- odically looking up from a book to take in the majestic landscape – shrouded in mist one minute, and drenched in sunset the next. It’s gen- uinely breathtaking. Only a visit to the Bob Marley museum in downtown Jamaica is enough to lure me down to Kingston (well worth a look – if only for the fact that the guides actually sing Bob Marley tunes at you.) There’s just about room for one rum punch then its home.

TERRESTRIAL

TERRESTRIAL

SATELLITE & CABLE

SATELLITE & CABLE

cityam.com

MONDAY 9 JULY 2012

TV & GAMES

21

BBC1

BBC1

BBC2

BBC2

ITV1

ITV1

CHANNEL4

CHANNEL4

CHANNEL5

CHANNEL5

6pm BBC News 6.30pm BBC London News 7pm The One Show 7.30pm Food Factory; BBC News 8pm EastEnders 8.30pm Britain on the Brink: Back to the 70s? – Panorama 9pm Blackout 10pm BBC News 10.25pm Regional News 10.35pm CHOICE How to Live Beyond 100 11.15pm The Graham Norton Show 12am FILM Educating Rita: Comedy drama, with Michael Caine. 1983. 1.45am Weatherview 1.50am Sign Zone:

Coast 2.50am Sign Zone: The Little Paris Kitchen: Cooking with Rachel Khoo 3.20am Sign Zone: Fake Britain 4.05am Sign Zone: Great British Railway Journeys Goes to Ireland 4.35am-6am BBC News

6pm Eggheads 6.30pm The Farm Fixer 7pm Faster, Higher, Stronger:

New series. The history of the Olympic Games. 8pm CHOICE Volcano Live 9pm Double Cross: The True Story of the D-Day Spies 10pm QI 10.30pm Newsnight; Weather 11.20pm Lost Land of the Volcano 12.20am World’s Most Dangerous Roads

1.20am BBC News 3.15am The Super League Show 4am-6am BBC Learning Zone

6pm London Tonight 6.30pm ITV News 7pm Emmerdale 7.30pm Coronation Street 8pm Countrywise 8.30pm Coronation Street 9pm Live Who Wants to Be a Millionaire? The People Play 10pm ITV News at Ten 10.30pm London News 10.35pm I Took My Baby’s Life 11.35pm In Plain Sight 12.20am Jackpot247; ITV News Headlines

3am Jeremy Kyle Show 3.55am ITV Nightscreen 4.35am-5.30am The Jeremy Kyle Show

6pm The Simpsons 6.30pm Hollyoaks 6.55pm 4thought.tv 7pm Channel 4 News 7.55pm Channel 4 Presents: London 2012 – Stephen Miller Part III 8pm Secrets of the Taxman: Channel 4 Dispatches 8.30pm Jamie’s Summer Food Rave Up: Jamie Oliver cooks sticky ribs and a festival breakfast. 9pm CHOICE Undercover Boss 10pm Thelma’s Gypsy Girls 11.05pm Coming Up 11.40pm Random Acts 11.45pm Embarrassing Bodies: Live from the Clinic 12.45am The Good Wife 2.15am The Big C 2.45am FILM The True Story of Jesse James:

1957. 4.20am St Elsewhere 5.05am-6am Deal or No Deal

6pm Home and Away 6.30pm 5 News at 6.30 7pm Jurassic Park: The True Story; 5 News Update 8pm New Police Interceptors; 5 News at 9 9pm Big Brother 10pm The Walking Dead: Rick, Hershel and Glenn face foes both dead and alive. 11pm FILM Hollow Man: Paul Verhoeven’s sci-fi thriller, starring Kevin Bacon. 2000

1.05am SuperCasino 3.55am Great Artists 4.20am Wildlife SOS 5.10am House Doctor 5.35am-6am House Doctor

SKY SPORTS 1

7pm Fight Night Countdown 7.30pm Live Super League 10pm Fight Night Countdown 10.30pm Time of Our Lives 11.30pm Golden Moments of European Football 12.30am Soccer AM: The Best Bits 1.30am Super League 3am Sports Unlimited 4am Watersports World 5am-6am Max Power

SKY SPORTS 2

7pm Live World Cup Speedway 10pm NASCAR 11pm Sporting Greats 11.30pm British Miler 12am Fight Night Countdown 12.30am World Cup Speedway 3.30am-4.30am NASCAR

SKY SPORTS 3

7pm Live Winning Post 9pm Thrillseekers 9.30pm British Miler 10pm WWE: Late Night – Bottom Line 11pm WWE: Late Night – Afterburn 12am WWE: NXT 1am WWE Vintage Collection

2am-4.15am WWE: Late Night – Raw

BRITISH EUROSPORT

6pm Live UEFA Under-19s Championship Football 8pm UEFA Under-19s Championship Football 9.15pm Cycling: Tour de France 10.20pm MotoGP 11.20pm Rallying 11.35pm-12.35am Cycling: Tour de France

ESPN

7pm Press Pass 2012 8pm Beach Soccer 9pm Major League Soccer 10.45pm ESPN Kicks: Extra 11pm NBA Action 11.30pm Press Pass 2012 12am UFC 148: Silva v Sonnen II 4am GRAND-AM Road Racing 5am-6am NHRA Drag Racing

SKY LIVING

7pm Criminal Minds 8pm Strictly Baby Ballroom 9pm Britain & Ireland’s Next Top Model 10pm Criminal Minds 11pm Katie

12am Bones 1am America’s Next Top Model 1.50am Supernatural 2.40am Medium 3.30am Bones 4.20am Nothing to Declare 5.10am-6am Passport Patrol

BBC THREE

7pm British Olympic Dreams 8pm Don’t Tell the Bride 9pm Riots:

The Aftershock 10pm EastEnders 10.30pm Snog, Marry, Avoid? 11pm Family Guy 11.45pm American Dad! 12.30am Riots:

The Aftershock 1.30am Snog, Marry, Avoid? 2am Coming Here Soon 3am Don’t Tell the Bride 4am British Olympic Dreams 5am-5.30am Snog, Marry, Avoid?

E4

7pm Hollyoaks 7.30pm How I Met Your Mother 8pm David Blaine:

What Is Magic? 9pm Revenge 10pm The Inbetweeners 11.10pm Rude Tube: Mashed “n’ Mixed 12.15am The Big Bang Theory 1.15am Scrubs 1.40am How I

Met Your Mother 2.10am The War at Home 2.30am Rules of Engagement 2.55am My Name Is Earl 3.40am 90210 4.20am Greek 5am-6am Switched

HISTORY

7pm Storage Wars 7.30pm Pawn Stars 9.30pm American Restoration 10pm American Pickers 11pm Storage Wars 11.30pm Pawn Stars 12am American Pickers 1am Pawn Stars 1.30am American Restoration 2am Pawn Stars 3am Swamp People 4am The Last Days of World War Two 5am Pawn Stars 5.30am-6am American Restoration

DISCOVERY

7pm Bear Grylls: Born Survivor 8pm Extreme Drug Smuggling 9pm Bear Grylls: Born Survivor 10pm Sons of Guns 11pm Finding Bigfoot 12am Bear Grylls:

Born Survivor 1am Sons of Guns

2am Auction Kings 3am American Chopper 3.50am Ice Pilots 4.40am Bear Grylls: Born Survivor 5.30am-6am Destroyed in Seconds

DISCOVERY HOME & HEALTH

7pm Supernanny US 8pm Secretly Pregnant 9pm Untold Stories of the ER 10pm Hospital Sydney 11pm Fat Hospital 12am Untold Stories of the ER 1am Hospital Sydney 2am Fat Hospital 3am Wife Swap 4am Birth Stories 5am-6am Birth Days

SKY1

7pm The Simpsons 8pm A League of Their Own 8.30pm Spy 9pm Cop Squad 10pm Spartacus: Gods of the Arena 11.10pm Strike Back:

Project Dawn 12.10am Costa Del Street Crime 1.40am Stargate SG-1 3.35am Emergency Animal Rescue 4.35am Airline 5.05am-6am Sell Me the Answer

TV PICK

TV PICK HOW TO LIVE BEYOND 100 BBC1, 10.35PM Centenarians reveal their thoughts on seeing 100

HOW TO LIVE BEYOND 100

BBC1, 10.35PM

Centenarians reveal their thoughts on seeing 100 years of change, describing how their attitudes and opinions have altered over time.

how their attitudes and opinions have altered over time. VOLCANO LIVE BBC2, 8PM Exploring the science

VOLCANO LIVE

BBC2, 8PM

Exploring the science of vulcanology and how Kilauea on Hawaii’s Big Island is transforming the terrain that surrounds it.

Big Island is transforming the terrain that surrounds it. UNDERCOVER BOSS CHANNEL4, 9PM Peter Marks, the

UNDERCOVER BOSS

CHANNEL4, 9PM

Peter Marks, the CEO of Britain’s biggest nightclub chain, which includes well-known brands Oceana and Liquid goes undercover in his own business.

COFFEE BREAK

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

9 3 13 39 12 24 37 8 SUDOKU KAKURO 26 30 11 15 Place
9
3
13
39
12
24
37
8
SUDOKU
KAKURO
26
30
11
15
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.
7
Fill the grid so that each
22
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16
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in the box above or to the
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34
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10
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a block. The same digit may
28
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19
23
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WORDWHEEL
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Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
B
A
H
N
Y
or more, all must contain the central letter and
letters can only be used once in every word. There
KAKURO
is
at least one nine-letter word in the wheel.
U
R
1
9
8
4
9
7
6
SUDOKU
3
7
2
6
1
8 4
9
5
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8
6
9
3
1
2
Y
A A
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2
4
1
5
7
6
8 9
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5
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FETA EUROPE
4
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B
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ADVERSITY
ADDER ARABS
7
2
9
3
7
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7 N T B M S ADVERSITY ADDER ARABS 7 2 9 3 7 2 1
ACROSS DOWN 1 Boasts (5) 1 Cast out (6) 4 Fruit of the oak (5)
ACROSS
DOWN
1
Boasts (5)
1
Cast out (6)
4
Fruit of the oak (5)
2
Postal service for
overseas (7)
7
Constricted (6)
3
9
Expel (gases or
odours) (4)
Mixture of fog
and smoke (4)
5
Slink (5)
10
Unit of heredity (4)
6
Short letter (4)
12
Submerge in
a liquid (4)
8
Strongly built,
sturdy (4-3)
13
Facing of a jacket (5)
11
Forty winks (3)
15
High mountain (3)
14
17
Island, New
York Bay area (5)
Large imposing
building (7)
15
Be of service (3)
19
Number indicated
by the Roman V (4)
16
Pauper (6)
21
Estimation (4)
18
Strong, tightly twisted
cotton thread (5)
23
Osculate (4)
20
24
Making an
attempt (6)
Gait in which steps
and hops alternate (4)
22
Painting, sculpture,
25
Leaves of a book (5)
music, etc (4)
26
Take an oath (5)
22
22

SPORT cityam.com/sport

22 S P O R T cityam.com/sport Rain was predicted at Silverstone, yet the clouds stayed
22 S P O R T cityam.com/sport Rain was predicted at Silverstone, yet the clouds stayed

Rain was predicted at Silverstone, yet the clouds stayed away for winner Mark Webber

Sun shines on Red Bull as Webber grabs win

BY JULIAN HARRISMark Webber Sun shines on Red Bull as Webber grabs win recent domination of the British

recent domination of the British Grand Prix. Torrential rain had disturbed quali- fying throughout Saturday afternoon, yet stayed away for yesterday’s race. McLaren’s Lewis Hamilton was unable to improve on his eighth place start on the grid, while team-mate Jenson Button

only narrowly got in on the points in 10th. Force India’s Paul di Resta had to retire for the first time in his last 24 races after contact with Romain Grosjean’s Lotus in lap one. Another collision occurred in lap 13 when Williams’ Pastor Maldonado crashed for the sec- ond time in two races, taking

out the Sauber of Sergio Perez. Perez criticised the Venezuelan

and called on the stewards to take action, yet the Williams man escaped with just a 10,000 fine. Kamui Kobayashi was fined 25,000 for a separate incident in which he crashed into his Sauber engineers in the pit-stop. Webber’s victory takes him to within 13 points of Alonso, who leads the drivers’ championship on 129 points. Vettel is in

third with 100 points, while Hamilton has slipped into fourth place in the rank- ings, on 92 points.

RED Bull driver Mark Webber poured praise on his colleague’s efforts yester- day after leading the Milton Keynes- based team to their third Formula One victory at Silverstone in four years. Webber, who has held talks with other teams with a view to leaving Red Bull, pipped Ferrari’s Fernando Alonso to first place with only three laps

of

Grand Prix to go. “It’s a very special victo-

ry for the team, being just down the road –

thanks to them for doing

a great job,” an elated

Webber said, having won

in one hour, 25 minutes, 11

successive for podium finishes Webber at Silvertsone
successive
for podium
finishes
Webber
at Silvertsone

an action packed British

seconds. “A bit of strategy at the end there [worked for us],” Webber said, after instructions through the team radio helped him overtake Alonso on lap 49. The Australian lives only a short drive

from Silverstone, while Red Bull’s base is

a mere 18 miles away. Webber’s team-

mate Sebastian Vettel completed the podium, to hammer home Red Bull’s

Vettel completed the podium, to hammer home Red Bull’s MONDAY 9 JULY 2012 @cityam_sport Moved Murray

MONDAY 9 JULY 2012

@cityam_sport

Moved Murray sobs after final loss to Federer

BY DECLAN WARRINGTON@cityam_sport Moved Murray sobs after final loss to Federer BRITISH No1 Andy Murray failed to fight

BRITISH No1 Andy Murray failed to fight back the tears that emerged from a defiant defeat after win- ning the hearts of a nation against Roger Federer in yesterday’s final at Wimbledon. The Scot’s performance was as gutsy as his fate was cruel, but if he possessed a composure that had previously eluded in past grand slam finals, new world No1 Federer’s greater class and experi- ence ultimately separated the two on an afternoon when hope was regardless renewed about Britain’s possession of a genuine grand slam winner. In securing the match’s opening set, Murray had displayed the suit- ability in style that had inspired such a promising record over the Swiss but even though his play underlined the same dogged deter- mination that had earned a first final at the All England club, the sport’s greatest ever player had yet another level to unlock from which he produced his latest land- mark triumph with a 4-6, 7-5, 6-3, 6-4 scoreline. “I’m getting closer,” said Murray, the emotion in his voice as patent as the pride emitted from a loyal crowd towards the All England Club’s mod- ern day hero. “I’m going to try. This is not going to be easy. Firstly I’d like to congratu- late Roger. “I was asked the other day: ‘Is this your best chance, Roger is 30 now?’ He’s not bad for a 30-year- old. He played a great tournament. I know he had some struggles with his back, but he showed what fight he had.

“He deserves it. I’ll try not to look at him as I’ll start [crying] again. Thanks to everyone who has supported me. You did a great job. “And last of all to the crowd. Everyone always talks about the pressure of playing a Wimbledon and how tough it is. It’s not the people watching, you make it so much easier to play. The support has been incredible. Thank you. “I’d say that’s the best I’ve played in a slam final. I created chances, I went up a set. “It was a long match. Even the last two sets, I still had chances. The game where I got broken in the third set was a very, very long game. I had a lot of game points. “It wasn’t like I gave away bad games or stupid games and stuff. I played a good match. I made pretty good decisions for the most part, so I’m happy with that. “I felt more comfortable this morning and before the match than I had done maybe in the pre- vious slams.” Murray’s other grand slam final defeats – in the 2008 US Open and the 2010 and 2011 Australian Opens – showed a player unpre- pared for the pressures associated with a Major final but yesterday afternoon that was simply never the case. During the week he spoke convincingly of dealing with the stresses that had built and so it proved when business truly began; this was a player ready to seize a place in history and to use his fans’ support. For Federer, the deserved victory repre- sents a record 286th week at the top of the world’s rankings, the equalling of American Pete Sampras’s seven Wimbledon titles and a dismissal of the criticism that suggested his best years had passed. “To win 90 per cent of my

his best years had passed. “To win 90 per cent of my Roger Federer is once
his best years had passed. “To win 90 per cent of my Roger Federer is once

Roger Federer is once again the world No1

90 per cent of my Roger Federer is once again the world No1 World No4 Andy

World No4 Andy Murray has now lost in each of

matches throughout the year is impossible every single year,” he said. “So you’re always going to go through ups and downs. “But I knew how close I was for the last few years, and some people didn’t quite see that maybe for dif- ferent reasons. But I knew and I

Wiggins fumes at doping talk

reasons. But I knew and I Wiggins fumes at doping talk BY JULIAN HARRIS BRITISH cycling

BY JULIAN HARRIS

BRITISH cycling hopeful Bradley Wiggins held onto the yellow jersey after stage eight of the Tour de France yesterday, yet reacted angrily after the race when asked about doping allegations made on the social network Twitter. “I can’t be doing with people like that,” Wiggins said during an expletive-fuelled rant against critics who have suggested that winning the Tour is impossible without the use of performance enhancing drugs.

“They’re just ****ing *******

it’s

easy for them to sit under a pseudonym on Twitter and write that kind of **** rather than get off their ****es and apply themselves and work hard at something,” he told reporters. His sentiments were later backed up by fellow Team Sky racer Chris Froome, who took to Twitter itself to make his point. “Critics need to wake up and realise that cycling has evolved. Dedication and sacrifice equals success,” he wrote. Wiggins even took a jibe at the popularity of tennis, on a day that

millions were glued to the men’s final at Wimbledon. “Tennis is nothing. It only lasts one and a half hours,” he barked. Yet the Team Sky man had reason for a rosier outlook, after retaining the overall lead of the Tour ahead of today’s stage nine. French crowds cheered on youngster Thibaut Pinot yesterday, as he rode to victory in three hours, 56 minutes and 10 seconds. Wiggins finished fourth, one of a pack that came in 26 seconds behind. Overall he stays 10 seconds ahead of Cadel Evans.

MONDAY 9 JULY 2012

Chelsea captain John Terry’s trial for an alleged racially

Chelsea captain John Terry’s trial for an alleged racially cityam.com aggravated offence committed against QPR last

cityam.com

John Terry’s trial for an alleged racially cityam.com aggravated offence committed against QPR last season begins

aggravated offence committed against QPR last season begins today at Westminster Magistrates’ Court

23
23

WIMBLEDON RECORD

Men’s singles winners

n

Roger Federer, seven titles

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Pete Sampras, seven titles

n

Bjorn Borg, five titles

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Rod Laver, four titles

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Boris Becker, three titles

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Fred Perry, three titles

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John McEnroe, three titles

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Jimmy Connors, two titles

the four grand slams finals he has made it to but became the first Briton in 73 years, since Bunny Austin, to reach Wimbledon’s final

think the belief got me to victory. I think it’s going to take much longer to understand what I was able to achieve today. It was crazy how it all happened under the cir- cumstances. I played terrific.” Federer had been uncharacteris- tically nervy in the match’s open-

ing set but he thereafter settled to take control of play. After levelling the match with a masterful backhand drop volley in the second, Federer took control of the third set – following a 35 minute break and the closing of the roof because of rain – to

assume a lead that he at no point looked like conceding. Murray remained tenacious – saving one of two Championship points in doing so – but was fight- ing to stay in the match and sealed his defeat when hooking an ambi- tious forehand into the tramlines.

when hooking an ambi- tious forehand into the tramlines. GIGGS NAMED FOOTBALL CAPTAIN FOR TEAM GB

GIGGS NAMED FOOTBALL CAPTAIN FOR TEAM GB

into the tramlines. GIGGS NAMED FOOTBALL CAPTAIN FOR TEAM GB WELSHMAN Ryan Giggs, the Manchester United

WELSHMAN Ryan Giggs, the Manchester United veteran midfielder, was yesterday named captain of Great Britain’s football side for London 2012. Manager Stuart Pearce said that Giggs – who retired from playing for Wales five years ago – was “the standout captain” among his squad. Team GB women’s manager Hope Powell, meanwhile, named Lincoln Ladies’ Casey Stoney as captain for their Olympics campaign.

IN BRIEF

 

RFU appoint Beaumont as chairman

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RUGBY UNION: Former England captain Bill

Beaumont has been appointed as the Rugby Football Union’s new chairman as the governing body progress towards staging the 2015 Rugby World Cup. Paul Murphy, meanwhile, has taken over as President.

Spurs confirm Vertonghen signing

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FOOTBALL: Tottenham have announced the

signing of defender Jan Vertonghen from Ajax for an undisclosed fee, subject to the Belgium international passing a medical.

Groves announces stateside ring return

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BOXING: British and Commonwealth super-

middleweight champion George Groves will fight Mexico’s Francisco Sierra in San Jose, America, on 28 July.

Bryan and Raymond take doubles trophy

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TENNIS: American pair Mike Bryan and Lisa

Raymond yesterday won Wimbledon’s mixed double championship by defeating India’s Leander Paes and Russia’s Elena Vesnina 6-3, 5-7, 6-4 on Centre Court.

Results

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