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▲
BANKING
BY MARION DAKERS
THE UK is likely to break even or make
WORLD ECONOMY a profit on its bailout of the banking
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2 News CITYA.M. 15 DECEMBER 2010
Distribution helpline ship with the carrier, according to future. several other directors, ahead of a
If you have any comments about the distribution BY JULIET SAMUEL
of City A.M. Please ring 0207 015 1230, or email Sky News, and Virgin has asked Virgin Atlantic posted a pre-tax possible Glencore flotation next
distribution@cityam.com Deutsche Bank to help examine its operating loss for the period March WILLY Strothotte, the chairman of year. Glencore, which owns a 34 per
options. 2009 to February 2010 of £132m. Glencore and FTSE 100-listed miner cent stake in Xstrata, shares several
Editorial Statement Virgin Atlantic reportedly said IATA UPS PROFIT FORECAST: P9 Xstrata, is due to leave his post at board members including Strothotte
This newspaper adheres to the system of there is no formal process underway Xstrata in the coming year as part of and Glencore chief executive Ivan
self-regulation overseen by the Press Complaints to team up with other airlines. Sir Richard Branson a board-room changeover. Glasenberg, who is a non-executive
Commission. The PCC takes complaints about the Virgin and Delta did not return Strothotte has been at the helm of on the Xstrata board.
editorial content of publications under the Editor’s has already considered
Code of Practice, a copy of which can be found at calls for comment last night. Xstrata since it floated in London in A source close to the firm told City
www.pcc.org.uk Branson mentioned earlier this pairing Virgin Atlantic 2002, and several other non-execu- A.M. that the changes are “part of a
Printed by Newsfax International,
year that he was considering merg- with another airline in tive directors have been on the board general look at whether the board
Beam Reach 5 Business Park, ing Virgin Atlantic with other carri- order to compete for eight to nine years. needs refreshing.”
Marsh Way, Rainham, Essex, RM13 8RS ers to keep up with rivals as the The company has started to look Xstrata declined to comment.
INVESTOR IRE OVER SIG CHIEF’S PAY GOLDMAN’S ASIAN DILEMMA AS WORLDWIDE AIRLINES ON A YAHOO! TO CUT 560 JOBS PAULSON-LED GROUP WEIGHS
Investec Asset Management has hit REGION HEAD PRESSES TO STAY IN US DESCENDING PATH Yahoo!, the US technology giant, is set ALTERNATE LEHMAN BANKRUPTCY
out at the board of SIG for ignoring Goldman Sachs is seeking an execu- The merger of British Airways and to cut about four per cent of its work- PLAN
investor outcry about the amount its tive to run its day-to-day operations in Iberia will do little to stave off falling force as the company continues to A group of investors including hedge-
chief executive is being paid. Investec, Asia even as the bank struggles to profits in the airline industry, ana- streamline operations in the face of fund manager Paulson & Co. are
which owns 3.3 per cent of the find a new role in its New York head- lysts predicted yesterday. Combined sluggish revenues. Yahoo! has strug- weighing a competing reorganization
Sheffield-based insulation and plas- quarters for the region’s chairman, profits for all European airlines are gled to stanch a migration of users plan for Lehman Brothers Holdings
terboard maker, has written a letter Michael Evans. The months-long forecast to fall to $100m (£63m) next and advertising dollars to Facebook. Inc. that would provide a better recov-
to SIG to protest against a 15 per cent uncertainty over Mr Evans’ next posi- year, from the $400m expected this Carol Bartz, chief executive since ery to creditors of the original
pay rise awarded to Chris Davies, its tion underscores the sense of flux year. January last year, is leading a job cull Lehman parent company while offer-
chief executive. within Goldman. which cut around 560 positions. ing a smaller payout to some credi-
SOARING REPOSSESSIONS, STAGNANT tors of Lehman subsidiaries,
THERE IS NO PLAN B, INSISTS FURTHER SETBACK FOR NOKIA AS E7 SALES: IT’S DOOM ON THE HOME US JUDGE THROWS OUT FRAUD CASE according to a person familiar with
TREASURY IS DELAYED FRONT AGAINST BAUGUR’S JON ASGEIR the investors’ thinking.
The Treasury has insisted it is not Nokia has warned that another of its The housing market is likely to JOHANNESSON
drawing up a “Plan B” to prop up the new range of smartphones will be remain in an extremely gloomy state A New York judge has thrown out a PFIZER’S NEW CEO SHUFFLES TEAM
economy if the recovery falters in delayed, highlighting the difficulties for “many years to come” as banks legal case against London-based New Pfizer Inc. CEO Ian Read shuf-
2011, despite suggestions from facing the Finnish group as it strug- continue to restrict lending and a Viking raider Jon Asgeir Johannesson, fled his executive team yesterday,
Britain’s top civil servant that stimu- gles to regain lost ground in the fast- shaky economy deters buyers, which claimed he was the architect of installing associates he’s worked
lus measures should be put on stand- growing smartphone market. The Britain’s biggest lending body has a $2bn (£1.2bn) fraud. The court decid- closely with at the pharmaceutical
by.The proposal, in a private memo by world’s biggest mobile maker said its warned. The number of households ed the case should not be tried in the giant while keeping key leaders in
Sir Gus O’Donnell, the cabinet secre- E7 device would not hit the market falling into arrears will rise to 180,000 US, as most of the key players are their posts. The moves come just a
tary, was revealed in Monday’s until early 2011, after being due to in 2011 according to the Council of Icelanders and it revolves around the week after Read succeeded Jeffrey
Financial Times. It caused irritation launch before the end of this year. Mortgage Lenders. collapse of Icelandic banks. Kindler, who retired unexpectedly.
CITYA.M. 15 DECEMBER 2010 News 3
US considers
Tyrie calls for capital rules for
FSA to reveal banking groups
▲
BANKING
Romans riot as
ECB to ask for Berlusconi pulls
more cash to off narrow win
buy up bonds
POLITICS
▲
ITALIAN Prime Minister Silvio
Berlusconi clung to front-line politics
by the skin of his teeth yesterday after
defeating a vote of no confidence by
just three votes.
Romans took to the streets in
EUROZONE CRISIS bonds, which was called for by the protest as some of the most serious
▲
BY JULIET SAMUEL Luxembourg finance minister, or an rioting the city has seen in years broke
increase in the size of the Eurozone’s out. Dozens were injured as protestors
The European Central Bank (ECB) is to €440bn (£373bn) bailout fund. threw smoke bombs and firecrackers
ask for more cash to aid in its battle As for what the ECB will do with the and fought baton-wielding police in
against the spread of the Eurozone cri- extra cash, a German official said: “I running street battles in the historic
sis. imagine the ECB would hope to city centre.
In its governing council meeting strengthen its basis in order to show The result underlined Berlusconi’s
today and tomorrow, the bank will dis- the markets that it was well capi- reputation as one of the great sur-
cuss whether to ask for a capital hike. talised, if for example, it wanted to buy vivors of Italian politics, but left him
With Germany, now seen as the additional sovereign bonds.” unable to ensure the stability of the
Eurozone’s paymaster, already indicat- The ECB was forced to resume its government at a time of major eco-
ing that it would back an increase in special bond-purchasing programme nomic problems and a menacing
the bank’s capital, it is likely to have its last month as gilt yields spiked to Eurozone debt crisis.
request granted. record highs and threatened to tip the The no-confidence motion, brought
The move would be a departure Eurozone into chaos. by the centre-left opposition, was
from Germany’s stance on other meas- It bought €2.67bn of bonds on the defeated by 314 votes to 311, and vote
ures touted as possible solutions to the secondary market last week in an counting in the chamber was briefly
Eurozone crisis. effort to keep government borrowing interrupted by a scuffle between
Chanceller Angela Merkel has costs down, but it has been reluctant deputies from rival camps.
blocked other extraordinary measures to relaunch the programme on the The result was secured after a
such as the issuance of Eurozone-wide same scale as earlier in the year. Silvio Berlusconi has clung to power despite a motion of no-confidence Picture: REX fevered campaign of back room deals.
POLITICS
focussed on the Irish economy,”
IRELAND’S government will have finance minister Brian Lenihan
▲
TELL US YOUR TOP 3 CHOICES 2011 The online gambling firm had rid-
den a lucky streak since its £1.4bn
flotation earlier this year.
cent after the migration of users onto
a new platform in July.
Morana declined to give a new
FOR THE POWER HUNDRED 2011 But its pre-tax profits dipped 18.9
per cent to £7.4m after taking
timeframe but said: “Being realistic,
it’s going to take longer. We are tar-
account of one-off items including geting double digit growth for 2011
WIN ONE OF 7 PAIRS OF FLIGHTS the cost of its IPO, down from £9.2m overall... but poker will be a challenge
the year before. for us.”
Underlying revenue rose 12.3 per The results have tarnished the halo
TO ANY CITYJET DESTINATION* cent to £188.5m but core revenue
grew just 1.6 per cent year-on-year.
surrounding the firm after it pressed
ahead with a float despite difficult
The Power Hundred 2011, published on Two years ago, the Power Hundred was Its active customers jumped 31 per market conditions. It managed to
cent to 654,000, with strong revenue avoid the fate of online grocer Ocado,
22 December in City A.M., will highlight all dominated by those involved in rescuing the growth, but average customer spend which was forced to slash its valua-
those who will be calling the shots in the City in banks. This year's list will have a different dropped sharply in poker and horse tion to get its flotation away earlier
racing. this year. Ocado closed yesterday at
2011, whether they be bankers, lawyers, chief complexion, with dealmakers and successful Betfair floated at £13 a share in 160p after floating at 180p.
executives or hedge fund managers. business leaders in the ascendancy. October and subsequently rose to over
£15. But yesterday it closed at £9.90 – ANALYSIS l Betfair
a 16 per cent fall on the day and 24 1,500 p 990.00
per cent below the IPO price. 14 Dec
FOR YOUR CHANCE TO WIN, SIMPLY TELL US YOUR TOP 3 CHOICES FOR THE POWER HUNDRED. A NEW WINNER WILL BE CHOSEN EACH DAY. Chief executive David Yu said con- 1,400
WHO WILL TOP OUR EXCLUSIVE CLUB THIS YEAR? ditions at the firm had been tough,
admitting results in poker had fallen
short of expectations and blaming
1,300
1,200
Go to www.CityJet.com/cityam the heavy snow for slowing growth.
He said: “Recent weather condi- 1,100
tions in the UK and Ireland... caused a
to submit your entries and for full number of race meeting cancella-
tions, moderating growth rates in the
1,000
15 Nov 28 nov 29 Nov 6 Dec 13 Dec
BANKING
BY ALISON LOCK drastically lowered the valuation of prices of mortgage-backed securities
their sub-prime assets in early 2007. during this period,” its letter to the
GOLDMAN Sachs has hit back at alle- The Financial Crisis Inquiry FCIC’s Christopher Seefer said.
gations that its actions caused the col- Commission had suggested that Goldman had loaned the funds
lapse of two key mortgage hedge Goldman’s valuations of the securi- $453m (£286m) with only mortgage- Goldman Sachs’
funds in 2007 at the onset of the ties were deliberately low and led the backed securities as collateral, so Lloyd Blankfein
financial crisis. funds to fail. Their collapse ultimate- stood to lose out if they failed, it said. says the firm did
In letters now published, Goldman ly led to the fall of Bear Stearns. “It was against the financial inter- not intend to
told the US agency investigating the Goldman said its markdown would est of Goldman Sachs to cause the cause the crash:
credit crunch it did not intend to not have materially altered the funds’ failure of the fund and it did not do Picture: GETTY
force two funds run by Bear Stearns valuation, which was instead “attrib- so,” the letter from 1 November said.
OFT to probe
UK’s private
health sector
has led to concerns that too much of
▲
HEALTHCARE
the market is too concentrated in the
BY ALISON LOCK
hands of a few major companies,
THE UK’s lucrative £5.5bn private making it harder for new players to
healthcare market is to come under gain ground.
scrutiny from market watchdog the Branch told City A.M. that “our own
Office of Fair Trading (OFT), it research suggests markets are not
announced yesterday. working optimally,” adding that a
The regulator has opened a consul- range of submissions from people at
tation into whether the market for different stages in the market alerted
private hospitals and medical proce- the OFT to the fact that “something
dures offer customers enough choice more endemic” was wrong than any
and value, ahead of a full investiga- one isolated factor.
tion in early 2011. The market study will investigate
As the NHS accounts for 25 per cent concentration and market access
of all revenues into the private health but also whether the industry impos-
industry, the government is increas- es any restrictions on doctors and
ingly eager to get value for money how easily consumers can access,
from providers. understand and compare provider
“We are keen to establish whether information.
patients and buyers of private health- Medical insurance provider Bupa
care services, including the NHS, are said it would support the study.
getting the full benefit of choice and “Competition in the private health-
competition,” said OFT senior director care market is good for our cus-
Sonya Branch. tomers,” said Dr Natalie-Jane
The top five private healthcare Macdonald, managing director of
providers according to acute medical Bupa Health and Wellbeing.
revenues, which includes names such Ageing populations, longer life
as Spire Healthcare and Nuffield expectancy and reforms to the NHS
Health, accounted for 71 per cent of have all added to the role private
the UK market in 2008. OFT research healthcare provision plays in the UK.
TAX ENERGY
TAX breaks that encourage house RIO TINTO plans to spend more than
“flipping” when selling could be $1bn on two of its Canadian alu-
ruled out as part of a government minum smelters, aiming to boost effi-
review. The Office of Tax ciency, cut costs and deliver on
Simplification has evaluated 13 tax commitments made when it acquired
reliefs in a provisional exercise to Canada’s Alcan.
understand how to either scrap or The Anglo-Australian mining giant,
simplify the UK’s 1,042 tax breaks. which bought giant Canadian alu-
Capital gains tax relief on private minum maker Alcan in 2007, said yes-
homes “remains as valid today as in terday it will spend about $760m to
1965, if not more so,” it said, though complete the first phase of its AP60
it was “questionable” whether its plant in Quebec. The new plant will
three-year time frame encouraged house the most cost-effective, energy-
flipping. Others such as R&D tax cred- efficient and environmentally friend-
its and Gift Aid, a tax break on chari- ly smelting technology commercially
table donations, were endorsed. available, the company said.
CITYA.M. 15 DECEMBER 2010 News 9
WORLD ECONOMY
BY MATTHEW WEST details discussions over lunch sary given the “almost dysfunctional”
between US ambassador Robert nature of the G7 in relation to eco-
THE governor of the Bank of England Tuttle, US Treasury deputy secretary nomic issues.
was so concerned about the global Robert Kimmitt and Mervyn King, in It said King’s proposals were “not
economy that he suggested the UK, which the Bank governor said the casual ideas” adding King’s “principal
US, Switzerland and Japan create an group of four countries must find a objective in the meeting” was to out-
international bailout fund six way to keep the banks from collaps- line his thinking for Kimmit.
months before the economic crisis ing and that a coordinated effort to Six months later Royal Bank of
hit its peak, a confidential US diplo- recapitalise the global banking sys- Scotland, Lloyds Bank and Halifax
matic cable released by Wikileaks tem could become necessary. He sug- Bank of Scotland had been rescued by
revealed yesterday. gested the creation of the group the government.
BP’s Bob Dudley is selling assets to pay for the spill Picture: Micha Theiner/City A.M.
BP set to sell
Pakistan unit
for $775m
▲
AVIATION
IATA said the increase is due to an
AIRLINES will post higher profits upturn in the market, “exceptionally
than expected this year and next, strong third-quarter performance”
according to the industry association and better capacity usage. It therefore
IATA. raised its profit forecast for this year
However, margins remain low and from $8.9bn (£5.6bn) to $15.1bn and
the sector’s recovery is patchy, with predicted profit next year of $9.1bn,
European airlines underperforming up from an earlier forecast of $5.3bn.
those in other regions, the The industry body represents 230
International Air Transport airlines covering 93 per cent of sched-
Association (IATA) said in its latest uled international traffic.
The Capitalist
10 CITYA.M. 15 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
Go-Ahead sees
Snow disturbs FSA BANS TWO BROKERS
profit growth
sales jump at in train travel
Travis Perkins
TRANSPORT
▲
TRANSPORT group Go-Ahead said yes-
terday that it expects first-half operat-
ing profit to nudge ahead of its
expectations, driven by its rail unit,
but will not move its full-year targets
given the economic uncertainty.
Turnover in the firm’s merchanti- The company, which operates com-
▲
PROPERTY
BY MARION DAKERS ng business rose 7.6 per cent in the muter rail franchises including
first 11 months of the year, with like- Southeastern and London Midland,
BUILDERS merchant Travis Perkins for-like turnover rising 7.2 per cent. said yesterday its bus division is
said yesterday that turnover for the Travis Perkins also completed its expected to remain robust, with sec-
year had risen 6.5 per cent, though acquisition of BSS Group yesterday, ond-half revenue in its unregulated
the wintry weather has hit recent creating the country’s biggest businesses returning to last year’s lev-
sales, as it completed its £558m plumbing and heating trade and els.
takeover of BSS Group. retail distribution. However, revenue in its regulated
The firm saw a jump in sales in Travis Perkins announced the deal London bus services is likely to be
the last two months to 30 November, in July, although it was forced by the around seven per cent below last year
although it said the snow and freez- Office of Fair Trading to sell off 20 due to lower contract prices.
ing conditions will have “some plumbing branches before it could Turnover in its rail unit Southern is
impact on our sales trends and take over its rival. expected to be around six per cent
financial performance” during Its shares closed 2.62 per cent up higher than last year due to a four per
December. at 997.5p yesterday. cent growth in passenger journeys.
Its Wickes DIY chain saw turnover ANALYSIS l Travis Perkins “We continue to anticipate chal-
for the year to 27 November rise 2.7 p lenging economic conditions in the
per cent, with like-for-like turnover 1,000 997.50 near term and therefore believe it is
14 Dec
per trading day up 0.6 per cent. prudent to maintain our full-year
Sales accelerated by 4.2 per cent in expectations as previously reported,”
the last eight weeks. Travis Perkins 900 it said in a statement.
said this was due to shoppers splash- Go-Ahead also said that it contin-
ing out ahead of the VAT rise in THE Financial Services Authority’s (FSA) head of enforcement Margaret Cole yesterday ues to look for bolt-on acquisitions in
January, although the pre-Christmas fined and banned two stockbrokers for using inside information to allow their clients to the UK and will continue its cautious
jump has been less marked than in 800 buy shares in listed health food company Provexis before it announced a deal with a major expansion in North America.
2009, when sales in the nine weeks unnamed food firm. The FSA fined William James Coppin and Perry John Bliss £70,000 Shares closed up 5.5 per cent at
to December rose 10.2 per cent. 20 Sep 8 Oct 28 Oct 17 Nov 7 Dec and £30,000 respectively for their role in the 2007 deal. Picture: Micha Theiner/ CITY A.M £12.80 yesterday.
12 Economics CITYA.M. 15 DECEMBER 2010
EUROZONE ECONOMY
stalls recovery. ness morale, as the ZEW Indicator of
BY JULIAN HARRIS “The German industrial sector very Economic Sentiment climbed 2.5
▲
EUROZONE industrial production much led the way for the Eurozone, points on November. EU ECONOMY ty and output,” the report said.
rebounded in October, driven markedly out performing most other The survey measures the expecta- Some European countries have
upwards by a resurgent Germany, countries,” said Howard Archer of IHS tions of investors, with more antici- RED tape that deters new businesses “miniscule” start up costs along the
official data revealed yesterday. Global Insight. pating an improvement in business is responsible for low levels of same levels as the US, Canada and
After a decline the previous Industrial production contracted conditions (than those expecting a European productivity, according to New Zealand. While rates are low in
month, production sprung back with in Greece (-4.6 per cent), Portugal (-2.8 deterioration) over the next six research released today. Denmark, Norway and the UK, coun-
a 0.7 per cent increase across the sin- per cent) and Spain (-1.9 per cent) months. The costs of setting up a business tries like Germany, France and Italy
gle currency area. from the previous year. In neighbouring France, new infla- result in uncompetitive markets, have significantly higher barriers to
Compared to the same time in Meanwhile, Ireland’s production fell tion figures showed consumer prices higher prices and less innovation, said entry, Poschke said.
2009, industry expanded by 6.9 per by 4.8 per cent compared to September, rising by 0.1 per cent in November. Dr Markus Poschke, an economist The research, published in the
cent, according to the Eurostat office. as the crisis grew in the run up to last Year-on-year consumer price index from McGill University in Quebec. Economic Journal, found that up to
Yet growth was lower than expect- month’s €85bn (£72bn) bailout. (CPI) inflation stands at 1.6 per cent. Even small start up costs of around one third of the productivity gap
ed by economists. And the Eurozone Germany recorded a 12.1 per cent Eurozone inflation figures are £5,000 have knock on effects “leading between Germany and the US could
remains reliant on strong core increase on the previous year, and expected tomorrow. to large losses in terms of productivi- be due to entry costs.
Inflation hits
ASIA | IN BRIEF
Deflation unavoidable for Japan
Japan’s deflation is due to proximity to
low cost Asian economies, the govern-
UK ECONOMY
prices, the depreciation of sterling stance is affecting Asian markets, after
BY JULIAN HARRIS
and increases in VAT. Monday’s sharp gains turned sluggish
ABOVE target inflation rose further “Measures of inflation supposedly yesterday. China avoided a rise in inter-
in November, jumping higher than stripping out tax effects remain very est rates last week, opting only to nudge
economists expected, official data low at around 1.5 per cent,” said up the reserve requirement ratio (RRR).
showed yesterday. Jonathan Loynes of Capital “The market’s sharp gains on Monday
The news cast further doubt over Economics. were driven by pent up demand follow-
the Bank of England’s loose policy And low borrowing costs and rising ing milder than expected policy tighten-
and monetary stimulus. productivity are actually causing falls ing,” said Zhuo Xiangyu of China
“Another round of quantitative eas- in business prices, financial consult- Securities Information. But “many peo-
ing was always a long shot and this ants Fathom reported yesterday. ple” fear that monetary tightening will
will reduce the odds still further,” However, core inflation, which come before the year end, he said.
said economist Andrew Goodwin of excludes rising food and energy High inflation is worrying Mervyn King’s Bank of England Picture: REX
the Ernst and Young Item Club. prices, remains stubbornly high at 2.7 China to appeal WTO tyre ruling
Consumer prices were up 3.3 per per cent – “way higher than the ANALYSIS l Inflation China plans to appeal a World Trade
cent compared to the same time last equivalent measures in the US and % Organization ruling that the US was
year, above October’s rate of 3.2 per Eurozone,” said Loynes. 6 entitled to impose extra safeguard
cent – and considerably above the Core prices are “simply not 5
duties on Chinese tyres, the Ministry of
government’s two per cent target and responding to the apparent spare Commerce said yesterday. China’s
the EU average of 2.3 per cent. capacity” that the Bank had assumed, 4 Ministry of Commerce said in a state-
And the retail price index (RPI), he added. 3 ment on its website that it was “deeply
which includes mortgage payments, Constantly high inflation could concerned” about negative conse-
increased by 4.7 per cent, a jump cause people to demand higher wages 2 Target CPI rate quences from the Monday ruling and
from October when it stood at 4.5 per and places further pressure on prices, 1 condemned the US safeguard measures.
cent. according to economists. "The US safeguard measures adopted
The Bank is watching the “uncom- The risk from inflation expecta- 0 toward Chinese tyres are trade protec-
fortably” high levels of inflation “like tions “has probably increased,” admit- -1 Consumer Price Index tionism intended to shift domestic politi-
hawks,” deputy governor Charles ted Bean, who also sits on the Retail Price Index cal pressure. They are not in line with
Bean said on Monday. Monetary Policy Committee (MPC). -2 WTO rules and have been widely criti-
Yet Bean and his colleagues show Andrew Sentance is believed to be -3 cised,” it said. President Barack Obama
little sign of increasing interest rates, the only member of the MPC to have Nov May Nov imposed the 35 pe rcent duties on
blaming “temporary” inflationary voted for an increase in rates. 2009 2010 Chinese tyres in September 2009.
US ECONOMY
▲
EDUCATION
BY JULIAN HARRIS stock prices,” said Rob Carnell, chief and food) jumped 0.3 per cent in Littlewood.
economist at ING. November, against the previous EDUCATION reforms by the coalition A statistical analysis of the Swedish
THE Fed’s second phase of quantita- “Underlying sales growth [exclud- month. government must allow profit mak- system found that the profit incen-
tive easing (QE2) came under attack ing petrol price hikes] has been tick- “Whilst not inflationary, the high ing schools, an influential thinktank tive boosted the number of new
yesterday, after jumps in retail sales, ing along at this decent rate for four figures suggest that the Fed’s con- said today. schools, driving up standards.
business morale and inflation. months,” said Capital Economics. cerns over deflation are substantially Reforms in Sweden -- which the In Sweden 13 per cent of schools
Retail sales for November increased And the National Federation of overdone,” said Carnell. UK’s plans are loosely based upon -- make a profit. Yet the UK government
by 0.8 per cent, and figures for the Independent Business (NFIB) Last week Fed chairman Ben only worked due to the contribution has received only 62 applications for
previous month were revised announced a rise in optimism to its Bernanke hinted at a third period of of for-profit schools, according to the independent new “free schools.”
upwards to show a 1.7 per cent rise. highest level for three years. easing (QE3), citing concerns over Institute of Economic Affairs (IEA). “It is hardly surprising that we have
“Today’s figures suggest that QE2, Despite the rise, business optimism growth and unemployment. “That “This is especially the case in pro- seen such a low uptake when the
announced on 3 November, is totally is still at recession levels, Bill really does not look credible right viding access to good schools for profit motive has been excluded,”
superfluous, as well as being largely Dunkelberg of NFIB warned. now,” commented Carnell. those from low socioeconomic back- said Littlewood.
CITYA.M. 15 DECEMBER 2010 News 13
▲
TECHNOLOGY
BY STEVE DINNEEN “The acquisition will enable us to ue our mission of delivering the most
accelerate our plans to be the leading advanced graphics technologies to
IMAGINATION Technologies, the supplier of all forms of graphics tech- mainstream markets.”
British firm behind video chips in Caustic chief executive Chip
Apple’s iPhone, will acquire 3D Imagination chief Stearns said: “Our vision is to enable
graphics group Caustic for £17m. cinema quality computer graphics at
Imagination chief executive executive Hossein new cost and power consumption
Hossein Yassaie said: “We have a Yassaie says that design points. We will utilise their
proven track record of disrupting Caustic will help grow extensive resources and partnerships
markets by bringing new and high- its 3D operations. to bring our technology to every con-
end technologies to consumer and sumer screen.”
TECHNOLOGY
BY STEVE DINNEEN Australia’s IBA Health in 2007, is des-
perate to repair its dented reputa-
DEBT-LADEN healthcare IT firm iSoft tion and claw itself back into the
yesterday offloaded its financial man- black. Its debt pile stands at around
agement solutions arm to outsourc- £150m, although some of the pro-
ing group Capita. ceeds of the sale will go towards pay-
It sold iSoft Business Solutions (iBS) ing this down.
to Capita for £23.2m after it was ear- Storey accepted he had provided
marked as “non-core”. Last year the “false and misleading” information
division generated revenue of £17.7m, to iSoft’s former auditors in relation
and £5.8m in earnings. to an iSoft contract.
The firm behind the £6.2bn Chief executive Andrea Fiumicelli
upgrade of the NHS computer sys- said: “While iBS is a profitable busi-
tems – one of the world’s largest IT ness, its key products, Oracle’s e-busi-
projects – was rocked by a series of ness suite and Integra financial
scandals involving making mislead- accounting solutions, have little over-
ing statements to the market lap with iSoft’s proprietary core
between 2003 and 2005, ending with patient-focused healthcare IT busi-
its former accountant Ian Storey ness. Given this, and our strong desire
being banned for eight years. to reduce debt, the divestment was
Problems with the NHS IT pro- deemed appropriate and in line with
gramme have also hit the firm, send- our strategy of focusing on core
ing its share price tumbling a patient-specific healthcare products
staggering 90 per cent this year alone. going forward.”
TECHNOLOGY Thursday 23 Dec 3.00 PM & 7.30 PM Thursday 30 Dec 3.00 PM & 7.30 PM
the earnings per share for Atos
FRANCE’S Atos Origin will acquire Origin, it added. Friday 24 Dec 3.00 PM Friday 31 Dec 3.00 PM
Siemens’ IT unit Solutions and The deal caps efforts by Europe’s No Shows Saturday 1 Jan
Services (SIS) in an €850m (£721.1m) biggest engineering company to spin
Saturday 25 Dec 3.00 PM & 7.30 PM
deal, the German conglomerate said off its money-losing IT unit and paves
late yesterday. the way for Atos Origin to reach a
“We are creating a European global scale.
Champion,” Siemens chief executive
officer Peter Loescher said.
Following this deal, Atos Origin
will become a major league player in
0844 482 5115 • mamma-mia.com
The deal is expected to have a “con-
siderable negative earnings impact”
cloud computing, which Siemens
said will be a major growth driver in
PRINCE OF WALES THEATRE
in Siemens’ fiscal 2011, it said in a future. The combined group will have © LITTLESTAR
statement. The deal is structured in pro forma revenues of around €8.7bn,
order to be short-term accretive on making it the largest in Europe.
14 News CITYA.M. 15 DECEMBER 2010
in Tech Mahindra
strategies after
withdrawing its
offer for rival
Hardy
Underwriters
TELECOMS
information technology services to
BT yesterday completed the sale of a the telecoms industry, is a unit of
5.5 per cent stake in Tech Mahindra tractor and utility vehicle maker
in a move that could pave the way for Mahindra & Mahindra (M&M). BT
further share sales in the Indian tele- Group owns about a 30-per cent stake
coms firm. in Tech Mahindra.
The sale takes BT’s stake in the firm BT and M&M established the joint
down to 24.4 per cent, with the UK venture that became Tech Mahindra
telecoms giant saying “further sales in 1986. It has grown to over £630m of
may be considered in the future”. The annual revenues after listing on the
6.9m shares netted BT a total of £63m. Bombay Stock Exchange in 2006.
Beazley drops
What women £180m bid for
find attractive its rival Hardy
in stockings. ▲
INSURANCE
BY MATTHEW WEST
LLOYDS of London insurer Beazley
withdrew its £180m offer for rival
to grow in the United States, at
Lloyd’s of London and in Europe,”
said chief executive Andrew Horton
Horton said Beazley could continue
to look for acquisitions but added: “If
Lloyds firm Hardy Underwriters yes- we end up with surplus capital, I am
terday after failing to win an agreed sure we will look at ways of handing
deal and said it might now return back cash to shareholders.”
cash to investors. Lloyd’s of London insurers have
In a brief statement issued yester- been at the centre of takeover specu-
Personalised Seven day, Beazley said it had submitted a lation as a difficult trading environ-
Ring Initial Bangle £97 final offer of up to 350p per share for ment has weighed on their share
Hardy but the firm said it would only prices, opening up potentially attrac-
consider an offer substantially above tive acquisition opportunities. In
this level. October, a four-month takeover battle
The withdrawal of the offer was led to Brit Insurance agreeing to be
not unexpected. Beazley had initially taken over by buyout firms Apollo
offered 300p per share for Hardy in Management and CVC Capital
October but this was rejected by the Partners.
underwriter as opportunistic and
designed to exploit a low point in the ANALYSIS l Beazley
insurance cycle. Beazley then said on p
15 November it might pull the bid 120 114.70
after its revised offer, increased to 118 14 Dec
330p per share from an initial 300p,
116
was once again rejected by Hardy.
Beazley said it would now look at 114
other growth strategies. Hardy shares 112
fell 4.6 per cent to 269p. Beazley
110
shares edged up 1.3 per cent to 115.3p
on the announcement. 108
20 Sep 8 Oct 28 Oct 17 Nov 7 Dec
“We will continue to look at ways
NEWS | IN BRIEF
Best Buy reports profit drop quarter operating profit will be "clearly neg-
Best Buy shares tumbled 14 per cent ative" rather than close to breaking even.
yesterday, their biggest decline in more The forecast had the knock on effect of
than eight years, as the biggest US elec- reducing shares in ThyssenKrupp, Germany’s
tronic retailer reported an unexpected largest steelmaker.
third-quarter dip in profit. The company
also cut its outlook after decreased British Airways lifts fuel charge
demand for televisions, notebook com- British Airways yesterday announced it
puters and videogames took its toll on will raise its fuel surcharge on longhaul
sales. Net income in the fiscal third quar- flights following a recent surge in oil
ter, which ended 27 November, fell four prices. “BA will increase its fuel sur-
per cent to $217m (£137.4m), or 54 charge on longhaul services from
cents per share, from $227m, or 53 cents Thursday, 16 December,” the group said
per share, last year. Analysts had expect- in a statement. “The move reflects the
ed 61 cents per share. Revenue fell one substantial recent increase in the price of
Christmas shopping made easy. Shop now at per cent to $11.89bn, from $12.02bn last
year. Analysts expected revenue of
oil.” There will be no increase on short-
haul flights. BA, which is merging with
www.notonthehighstreet.com $12.45bn.
I
N the latest YouGov SixthSense In addition to those in negative negative equity is most severe for peo- 92%
80% Positive Equity
Mortgages Report, mortgage hold- equity, the YouGov report puts eight ple who bought a property between
ers were asked to estimate the cur- per cent of mortgage holders in the 2000 and 2008, especially those buy- 70% Negative Equity/
75% 75% No Equity
rent value of their household and “no equity” bracket – the point at ing at the peak of the market in 2005
cost of their mortgage. which asset value just meets debt – to 2007. 60%
Ninety-one per cent who were able translating into 1.5m households tee- The graph shows that the negative
to give these figures were in positive tering on the brink of negative equity. equity is disproportionally present 18-34 25-34 35-44 45-54 55+
App downloads App revenue personal and business lives will be At present analysts estimate
▲
TECHNOLOGY
2010: 2010: BY STEVE DINNEEN one of the hallmarks of the new Apple’s app store contributes just one
decade with enormous opportuni- per cent of its gross profit – roughly
10.9bn $5bn Text Calendar Photos Camera
APP sales are set to rocket to $35bn
(£22.2bn) a year by 2014, according to
ties for virtually every business sec-
tor.”
$198m. However, the rapid growth
combined with the firm’s new iAds
new research by IDC. The roaring growth is great news platform, which allows it to charge
A staggering 10.9bn apps for for app marketplaces including for adverts contained within adverts,
devices including smartphones and Apple’s app store, which keeps 30 per is set to drive this far higher.
YouTube Stocks Maps Weather tablets such as Apple’s iPad will be cent of the sale price of every down- Apple has also shown its belief that
downloaded this year alone, with the load. Google and Microsoft both apps will drive future sales by allow-
10
9
11 12 1
2
3
number rising to 76.9bn annually in charge a lower commission for access ing them to be installed for the first
8
7 6 5
4 2014 – a growth rate of around 60 per to their app platforms. time on its new generation of laptops
Clock Calculatior Notes Settings
cent a year. as well as its hand held devices.
Scott Ellison, vice president of No of apps Angry Birds is among the most suc-
10.9bn
Estimated Estimated Mobile and Wireless research at IDC cessful app, with 7m downloads in
said: “Mobile app developers will downloaded the 12 months since its release, with
app downloads app revenue
‘appify’ just about every interaction worldwide $4.9m of that going to developer
2014: 2014:
you can think of in your physical and within the Rovio. Doodle Jump, another simple
76.9bn $35bn O
N
L
digital worlds. The extension of
mobile apps to every aspect of our
last year but addictive game, has similar sales
figures.
S
JAPANESE ECONOMY
ernment provides tax breaks for for that a reduction in the corporate
BY HARRY BANKS research and capital investment, tax rate is not enough. The yen is still
JAPAN’S plan to boost its ailing econo- helps combat the strong yen and very strong, and for companies like will provide a light van to Mitsubishi
▲
AUTOMOTIVE
my by cutting corporate taxes got a makes progress on free trade deals. ours that rely heavily on exports, it’s a Motors for the Japanese market,
guarded welcome from business yes- Political analysts said the tax cut tough situation.” NISSAN and Mitsubishi Motors said while Mitsubishi will supply an SUV
terday, but is unlikely to help restore would neither induce businesses to Cutting the tax rate to 35 per cent yesterday that they would deepen to Nissan for sale in the Middle East,
the fortunes of unpopular Prime back Kan’s ruling Democratic Party of from 40 per cent would still leave it their operational ties to make better they said.
Minister Naoto Kan. Japan, nor help raise voter support, higher than the 28 per cent corporate use of their resources as a strong yen Discussions are also underway for
Kan gave orders on Monday for a which hit a fresh low of 21 per cent in tax rate in Britain, 29.4 per cent in makes competing tougher for the production of Nissan’s Navara
five percentage point cut in the tax a media poll published yesterday. Germany and 24.2 per cent in South Japanese automakers. pickup truck at Mitsubishi’s Thai fac-
rate from the year starting next April, “Corporate taxes in Japan are high Korea, which is gaining overseas mar- Nissan and Mitsubishi, Japan’s tory, and for the establishment of a
despite the country’s ballooning compared with countries around the ket share in cars and electronics at third and sixth largest carmakers 50-50 joint venture to develop and
debt, saying it would enable business- world, so a reduction of the tax rate is Japan’s expense. respectively in 2009, have been work- produce 660cc minivehicles for Japan.
es to increase domestic investment, a good thing,” Mitsubishi Motors pres- Many Japanese companies are ing together since 2003, mainly Nissan said it was also considering
boost jobs and raise salaries. ident Osamu Masuko said yesterday. more inclined to invest abroad as involving Mitsubishi Motors building providing Mitsubishi Motors with
But executives, especially in the car He added: “But in order to boost they try to reduce reliance on the 660cc minivehicles under Nissan’s higher-end models in Japan.
and electronics industries, say their jobs and capital outlays on facilities, stagnating home market, doing little badge in Japan. Carmakers around the world are
firms will still lose out to South management needs to be able to have to reduce the 5.1 per cent jobless rate. Under the new agreement, Nissan seeking partnerships to cut costs.
growth helps
320 14 Dec 68.75 14 Dec
85 14 Dec 750
300
75 700
280
to boost sales
65 650
260
20 sep 8 Oct 28 Oct 17 Nov 7 Dec 20 sep 8 Oct 28 Oct 17 Nov 7 Dec 20 sep 8 Oct 28 Oct 17 Nov 7 Dec
MANUFACTURING
well,” Bunzl said in a statement. potential for a restructuring programme firm’s interim results due on Friday to con- The broker thinks Capita can benefit from
BY HARRY BANKS Bunzl, which started life as a haber- under new management, or at least a strip- centrate on operational performance, with the government’s new localism bill, which
BUNZL, the distribution and out- dashery in Bratislava in 1854, added ping out of undervalued capital. However, like-for-like sales set to rise by two per raises the prospects for increased out-
sourcing company, predicted full-year “the environment for further acquisi-
revenue growth would meet expecta- tions was promising and discussions the broker has cut its target price from cent, slightly lower than last year because sourcing. It adds that Capita’s acquisition
tions as strength at its US business are ongoing with a number of inter- 395p and earnings per share estimates by of the weather. Numis also predicts dispos- of iSoft this week will add around one per
and acquisitions offset sales falls in ested parties.” four to six per cent for the next two years. al rates for failing pubs to have halved. cent to operating profit this year.
Britain and Ireland. The firm, led by chief executive
FTSE 100-listed Bunzl, which sup- Michael Roney, said that while in
plies products such as carrier bags, North America underlying revenue To appear in Best of the Brokers email your research to notes@cityam.com
take-away boxes and healthcare prod- was strong, in Britain and Ireland rev-
UTILITIES
according to market consensus. p The group, which is led by chief The group will announce its full
For the first half ended 30 June, the 770 711.50 DRAX, the operator of Britain’s executive Dorothy Thompson, added results on 22 February.
company posted a six per cent rise in 14 Dec largest coal-fired power station, said that it had maintained a high load Drax has plans to build three bio-
pre-tax profit to £100m, as revenue 750 yesterday it expects its earnings for factor and improved profitability. mass-fired power plants at a cost of
rose two per cent to £2.34bn. the full-year to be slightly ahead of It anticipates that earnings before £2bn, but investment has been
“Acquisitions continue to be a key 730 current market consensus. interest, tax, depreciation, amortisa- delayed because it wants the govern-
component of the group’s growth “While the commodity markets in tion and underlying earnings per ment to offer better incentives.
strategy. The nine acquisitions which 710 which we operate remain challeng- share for 2010 will beat the market The government is expected to pro-
have been announced to date in 2010 ing, as previously described, we bene- consensus. pose what subsidies it will offer for
have annualised revenue of approxi- fit from a strong contracted position,” The market consensus for full-year low-carbon projects in an electricity
mately £150m and are integrating 20 Sep 8 Oct 28 Oct 17 Nov 7 Dec said the business based in Selby, Ebitda for the group currently stands reform paper due this week.
CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with
Lannes and Knut Schafer. private banking team. He will be report- years at TSX Group as senior legal
IG Group ing to Peter Blatchford, a client partner, counsel.
IG Group has appointed Christopher Hill as its Motive Television and will be responsible for giving sup-
new chief financial officer from April next year. Paul Cuatrecasas has joined the digital port and advice to the bank’s private RBC Wealth Management
In his new role he will also be a member of the TV company as a non-executive direc- clients in Devon. The Royal Bank of Canada’s Wealth
group’s board, helping to make strategic deci- tor, starting immediately. He will draw He has previously worked at the Management division has added Julian
sions about the company. To take the job, he on his mergers and acquisitions experi- Bank of Scotland Investment Service Washington as a director in its British
will be moving over from his role as CFO of ence in order to offer advice to the and HSBC. Isles’ private client fiduciary services
Travelex, where he has worked since 2007. company. He is also the founder and team. He will be in charge of drumming
Formerly, he has also worked at VWR chief executive of Aquaa Partners and Futures and Options up business in London, reporting to
International, a US-based lab supply company founded Alegro Capital in 2003. Association Steve Sokic.
and General Electric. Previoulsy, he has worked at ARC The FOA has appointed Kathleen Washington will bring over 17 years’
Associates and during his career has Trayner as director of regulation, effec- experience in private client trust, tax
worked on over 35 M&A transactions. tive from January. She joins the associ- and estate planning services. He moves
Ernst & Young India & Africa financial services adviso- ation from the London Stock Exchange, to RBC Wealth Management from
Ernst & Young has appointed five new ry practice: Nasir Ahmad, Richard Coutts & Co where she was head of regulatory Forsters, where he was a partner. He
partners in its Europe, Middle East, Brown, Maren Hausmann, Andreas Coutts has added James Hosking to its strategy. She has also worked for six has also worked at Charles Russell.
RETAIL
Rates Supplement (BRS) of 2p in the year which can now only be slapped
BY JOHN DUNNE pound, primarily as a contribution to on them after they agree in a vote.
RETAILERS across the UK will be bal- the Crossrail scheme. BRC director general Stephen strengthen this presence and expand
▲
PRIVATE EQUITY
loted on whether they want to pay Retailers are obliged to pay the sup- Robertson said: “Compulsory busi- it into further overseas markets.
extra on their business rates to help plement, which has been set for at ness ballots are a major victory for PRIVATE equity investor 3i has added Peter Wirtz, managing director of
bankroll local projects – but London least the next 20 years. the BRC on behalf of vulnerable retail- new sparkle to its European portfolio 3i Deutschland, said Amor had expe-
has missed out because a rate has The argument was made that the ers big and small. after buying German jewellery sup- rienced continuous growth over sev-
already been imposed. £16bn east-west London rail scheme “It would be fundamentally unde- plier Amor yesterday. eral years and 3i was “convinced of
The government – under pressure would help boost commerce across mocratic to put extra taxes on local Amor, which sells more than eight the great potential the company has
from the British Retail Consortium the capital, so making it of overall businesses without establishing their million pieces of affordable jewellery for further growth.”
(BRC) – has made it a legal require- benefit to London businesses. views first and assessing the potential each year, has been sold by Pamplona “We are delighted about this invest-
ment for rate-setting local authorities A BRC spokesman said: “The argu- impact on jobs.” Capital Management for an undis- ment,” he said.
to gain the agreement of firms under ment in London is not relevant now A spokesman for the London closed amount. Family-owned Amor is Germany’s
its Localism Bill, published on because the rate has already been Chamber of Commerce said it had Pamplona acquired Amor in 2006 largest wholesale and in-store jew-
Monday. set.” supported the rate supplement for and has grown it into a significant ellery retailer and sources, distributes
However, businesses in the capital The BRC said the rest of the UK Crossrail. international business. 3i intends to and supplies jewellery to retail outlets.
Carpetright in
Whitbread in profit blow as
boost from sales tumble
Premier Inns
RETAIL
▲
CARPETRIGHT, the country’s biggest
floor coverings retailer, said the out-
look for 2011 looked poor as sluggish
mortgage approvals meant housing
market activity was unlikely to pick
up quickly.
He added: “It’s always hard to see Chief executive Andy Harrison said he had inherited a strong business British mortgage approvals, which
▲
LEISURE
what the new year has got in store are a key lead indicator for
BY JOHN DUNNE
WHITBREAD has seen sales rise at its
but Whitbread has traded very well
throughout the recession and I
ANALYST VIEWS: CAN WHITBREAD MAINTAIN Carpetright, fell to 30,766 in October,
their lowest monthly level in more
budget Premier Inns and Costa Coffee
bars, which will help it stay on target
believe we’ll do well whatever the
economy throws at us.”
GROWTH ACROSS ITS BRANDS? Interviews by John Dunne than one and a half years.
“The availability of mortgages, par-
for its full-year forecasts, the company Whitbread is planning to expand ticularly for first time buyers, is sig-
said yesterday.
Sales at Premier Inns open for
its Premier Inns brand and has
opened 26 new sites so far this year.
SIMON FRENCH | PANMURE GORDON nificantly different from what it was
three years ago (with people) needing
“
more than a year grew 8.7 per cent in More than 300 new Costa outlets a much higher level of deposit.
the third quarter to 2 December. will have opened by the end of the “I think that’s having a knock-on
Occupancy rose to 80 per cent in financial year. We are not expecting consensus expectations to move impact through the rest of the hous-
”
the year to date, up from 70 per cent The total is now 1,200 in the UK upwards given what seems to have been a difficult start to ing chain at the moment,”
last year while revenue per available and 650 internationally. the fourth quarter and harsh weather conditions. Carpetright finance director Neil
room (RevPAR), a key industry meas- At its restaurant business, offers Page said.
ure, grew 9.2 per cent to £43.70. such as two meals for £10 at Brewers He was speaking after the firm
Meanwhile sales at Costa Coffee Fayre helped the group lift sales at RICHARD HUNTER | HARGREAVES LANSDOWN posted a 28 per cent fall in first-half
“
rose 11 per cent over the period, bene- outlets open more than a year by 1.5 profit.
fiting from a surge in demand for per cent while rivals have seen sales Page is also concerned that the
mince pies as the festive season decline. Despite the company warning at the half year stage country’s prolonged cold snap could
approaches, with over 200,000 sold hit third-quarter trade.
”
already this year. ANALYSIS l Whitbread 1,740.00 in October that the second half would be more difficult, “If we have Arctic conditions for six
The average forecast for full-year p
14 Dec Whitbread has maintained its impressive growth. to 10 weeks... I’m sure it will impact
pre-tax profit across the company, 1,800 consumer demand. But it won’t just
which also includes the Beefeater impact Carpetright, it will impact the
1,750
chain, stands at £279m, compared MARK BRUMBY | LANGTON CAPITAL whole of retail,” he said.
“
with £208m the year before. 1,700 However, he added that the compa-
Andy Harrison, the former easyJet ny, which has 584 stores in the UK
chief executive who succeeded Alan 1,650 and Ireland, was continuing to win
Parker as Whitbread chief executive
It’s a good company, operating in growing markets market share from smaller rivals, and
”
last month, said the company was in
1,600 & focused on what it does best but the share price had got a said he has high hopes for the firm’s
good health and he would not be pur- 1,550
17 Nov 7 Dec
little ahead of itself. Comparatives are tough and fast-growing beds business, which
suing a change in strategy. 20 Sep 8 Oct 28 Oct will be in 200 stores by Christmas.
will get tougher through the fourth quarter.
revenues slump amid tough conditions Renovo sees its losses narrow Odds for a White Xmas slashed
Anti-scar treatment firm Renovo's loss- Bookmakers have shortened the odds on
es have narrowed – thanks to lower a white Christmas, as weather
operating costs from restructuring. The forecasters warn of an icy blast on its
company said it remains well funded. way later this week. With less than a
Renovo, which had £51.8m in cash, cash fortnight to go until Christmas, tempera-
However, its underlying profit Travel up almost 11 per cent year-on- equivalents and investments in tures are set to drop as winds from the
▲
LEISURE
BY HARRY BANKS from operations rose by a quarter year, in line with the results of the September, said it would have at least north bring a band of rain and high winds
year-on-year to €589m. London-based tourism company stat- £30m in cash when it reports data from tomorrow. The Met Office expects the
TUI Group, the parent of Tui Travel, TUI derives almost all its earnings ed earlier this month. a late-stage trial of its key anti-scarring wintry weather to last, with snow very
reported a 45 per cent fall in profits from travel – about one-third of them The group is reported to be prepar- product Juvista in the first half of next probable over the Christmas weekend.
for the year to September despite a 14 from the UK – after moving into the ing to sell its stake in shipping compa- year. Pre-tax loss for the year to On 25 December, snow is the most likely
per cent increase in operating earn- sector in the 1990s from heavy indus- ny Hapag-Lloyd after rescuing the September was £8.6m, compared with to fall in Aberdeen, with odds
ings from tourism. try and shipping. company from failure during the £20.2m a year ago. Revenue rose more of 9/4, followed by Newcastle, Edinburgh
The company reported a group The German group reported total downturn of 2009. Hapag-Lloyd is all than three times to £16.2m. Operating and Glasgow, with odds of 3/1
profit of €114m (£135m) down from revenue of €16.4bn, of which Tui that remains of TUI’s former heavy- expenses, excluding revenue-related at bookmaker William Hill. For Leeds,
€206m a year ago and chief executive Travel contributed €15.7bn and sepa- industry empire. The group was in research and development, fell by 22.4 Liverpool and London, the odds of snow
Michael Frenzel said it would not pay rate companies Tui Hotels & Resorts the process of completing its divest- per cent to £19m as the company falling on Christmas day are 4/1. One
a dividend in 2010 because of tough and Tui Cruises added €559m. ment in 2008 when the world finan- reduced staff and pre-clinical pro- flake of snow must fall on monitoring
markets. TUI reported earnings from Tui cial crisis struck. grammes. stations for the payout to be made.
18 Markets & Investments CITYA.M. 15 DECEMBER 2010
B
RITAIN’S leading share index The broker reiterated that BP was ed. The PHLX KBW Bank Index lost 1.5
U
pushed higher yesterday, led by its top sector pick. British consumer price inflation, S stocks cut gains to end mostly per cent. Recent winners, such as
energy stocks with BP boosted Among individual blue chip gain- however, rose unexpectedly to a six- flat after a late-day sell-off yes- Regions Financial and Marshall &
by Royal Dutch Shell bid inter- ers, outsourcing firm Serco gained month high of 3.3 per cent in terday as yet another cautious Ilsley, led losers, falling 5.3 per cent
est talk. 2.1 per cent after being selected as November, which could increase the statement from the Federal and 3.4 per cent respectively.
The FTSE 100 index ended up 30.46 preferred bidder for a prison manage- pressure on the Bank of England to Reserve on the economy offset strong US retail sales rose for a fifth
points, or 0.5 per cent at 5,891.21, a ment contract in New Zealand, val- raise interest rates. retail sales data for November. straight month in November, point-
closing level not seen since June 2008. ued at around £190m. Analysts expected no surprises The Dow Jones industrial average ing to a firm rebound in consumer
“Volumes remain thin, but the And Scottish & Southern Energy after the markets closed from the US was up 47.98 points, or 0.42 per cent, spending, which accounts for roughly
FTSE keeps going up, with oils adding added 1.2 per cent after newspaper Federal Reserve Open Market at 11,476.62 – its highest close since 8 two-thirds of the US economy. But
the main fuel today, although reports revived possible takeover Committee, with sentiment towards September 2008. The Standard & shares of Best Buy plummeted 14.8
whether the 5,900 level can be interest in the multi-utility. the panel’s decision making little Poor's 500 Index was up 1.13 points, per cent after the top US electronics
breached without more momentum Miners were the biggest blue chip impact on UK trading. or 0.09 per cent, at 1,241.59. The retailer posted a third-quarter profit
is a big question,” said Mic Mills, head fallers, retreating after gains on US blue chips were up 0.6 per cent Nasdaq Composite Index was up 2.81 that missed expectations and cut its
of electronic dealing at ETX Capital. Monday, with Lonmin shedding 1.1 by London's close supported by points, or 0.11 per cent, at 2,627.72. full-year profit view.
Integrated oils gave the blue chips per cent. stronger than expected US retail sales With trading volume still anaemic, “The data was encouraging overall
strength, although the crude price Whitbread, however, was the top data. the afternoon’s drop could be a sign and shows that retailers are driving
slipped back following strong gains FTSE 100 decliner, down 2.8 per cent ANALYSIS l FTSE that the major indexes have hit the traffic into the stores,” said Liam
made on Monday after data high- despite posting strong profit growth. 5,900 5,891.21 upper range of a rally that has pro- Dalton president of Axiom Capital
lighted continued growth from Panmure Gordon downgraded its rat- 14 Dec pelled them all to recent two-year Management. “But Best Buy is a
China. ing to “hold”, saying it did not expect 5,800 highs. reminder that there’s a lot of dis-
BP was the biggest FTSE 100 riser, consensus expectations to be raised. The Fed, in a policy statement after counting and market share being
up 3.2 per cent as traders cited vague Tour operator TUI Travel fell 0.6 per 5,700 its last scheduled meeting of 2010, pulled in several directions, meaning
talk of potential bid interest from cent as its German parent company said the economic recovery was still it could still be a choppy Christmas.”
Shell, ahead 1.4 per cent. Both compa- TUI posted full-year results, and as 5,600 too slow to bring down unemploy- Financial stocks were the top losers
nies declined to comment. JPMorgan Cazenove cut targets for ment and reaffirmed its commit- yestesrday, with the group down 0.9
BP was also supported by its both TUI Travel and mid-cap peer 5,500 ment to buy $600m in government per cent, the biggest drop among S&P
announcement that it would sell a Thomas Cook, down 0.9 per cent. bonds. The move pushed bond yields sectors. Dow-listed JPMorgan Chase &
portfolio of oil and gas assets in Elsewhere on the second line, 20 Sep 8 Oct 28 Oct 17Nov 7 Dec sharply higher and pressured finan- Co lost 1.7 per cent to $40.79.
20 Investment | Foreign Exchange CITYA.M. 15 DECEMBER 2010
EURO’S RALLY
IS DEPENDENT Looking ahead
ON THE DATA
BORIS SCHLOSSBERG
to 2011: some
likely winners
DIRECTOR OF CURRENCY RESEARCH, GFT
W
ITH the euro bears still fixated on sover-
eign debt problems, Monday’s 200 point
rally in euro-dollar caught many curren-
cy traders by surprise and created a
massive short squeeze. As Ireland appeared to be
on its way towards finalising the EU bailout, risk
aversion flows abated and credit spreads sta-
bilised, leaving late shorts wrong footed.
Meanwhile, China’s refusal to raise its bench-
mark rates despite strong inflationary signals
was seen as positive for risk FX. Although the
and laggards
Chinese economy is experiencing pricing pres-
sures and a rise in food costs – a gallon of milk is
now more expensive in Shanghai than it is in
A weaker greenback daily moves for currency traders to capi-
talise on.
Seattle – Chinese monetary authorities are reluc-
tant to use interest rate hikes to fight the prob- and euro are on the But which currencies are likely to be
the winners or the losers next year?
lem. Instead, the People’s Bank of China (PBoC)
opted to raise the bank reserve requirements for cards but the Aussie Societe Generale’s Kit Juckes says:
“Barring a dramatic change, the scene is
the sixth time this year to try to control the set for the 2011 currency outlook to be
developing asset bubble without hampering should still do well, dominated by Fed accommodation,
growth in the real economy. European Central Bank (ECB) fire-fighting
The PBoC’s pro-growth stance was viewed as writes Jessica Mead to save the euro, and the response of
positive for Germany, whose economy benefits almost every other central bank in the
greatly from Chinese demand for capital goods. world to currency appreciation.”
In fact, as long as Germany’s economy continues He reckons we will see a weaker euro
F
to expand at a robust pace, the risk of sovereign ROM sovereign debt crises threaten- and dollar with the latter likely to win the
debt default in the Eurozone remains contained. ing the very future of the euro to losers’ race. In contrast, the Aussie dollar
The currency market views Germany as the currency wars and more quantita- and the Norwegian krone will benefit
financial backstop for the whole region. So the tive easing, 2010 has been an event- from interest rate differentials, solid fun-
current consensus view is: as goes Germany, so ful year in the foreign exchange markets. damentals and appetite for natural
goes the rest of the Eurozone. Currency traders will be pleased to hear resources.
That’s why the latest data could determine that volatility, which has been so charac- Here we take a look at six of the most
whether this move in euro-dollar can extend teristic of the FX markets since the crisis, popularly traded currencies and what
beyond the $1.3500 figure or stall and retrace is unlikely to disappear any time soon. analysts expect 2011 is likely to hold for
towards the low $1.30s. Tomorrow, the market Consequently, there will still be plenty of them.
will get a look at the flash purchasing managers’
index (PMI) readings in both the manufacturing MAJOR FX | FOCUS MAJOR FX | FOCUS
and service sectors, which provide the most accu-
rate reading of the latest economic conditions in US DOLLAR EURO
the region. If they surprise positively, showing ancing, which is likely to be very gists reckon that pressure on the
even a modicum of improvement in demand, the dollar negative over the next few dollar will be greater because of
euro could have further to run. Just as last week years. Equally, further QE would high unemployment in the US.
when I noted that the Aussie’s fortunes were
dependent on the Australian jobs report, this weigh on the greenback. Barclays Capital’s Paul Robinson
week it all comes down to data for euro-dollar. But others say that since the dollar thinks that it’s unlikely that the euro
Boris Schlossberg and Kathy Lien are directors It has not been a good second half has fallen against almost every 2010 will be a year that members of will sink against the dollar to the
of currency research at GFT. Read commentary of the year for the greenback, other G10 currency over the past the euro will want to forget. As the level it reached in June. He has
at www.GFTUK.com/commentary or e-mail which has come under pressure decade, being bearish on the dollar year draws to a close, the future of reduced the three month forecast to
borisandkathy@gftuk.com
from a sluggish US recovery and “is somewhat in the price” now. the euro is still under threat – $1.28 but raised the forecast for
additional quantitative easing by But dollar buyers should remain although the odds suggest the sin- end-2011 to $1.42. Others are more
the Federal Reserve. cautious as there is the potential for gle currency is likely to survive for bearish: although Xenfin Capital’s
Opinions are somewhat divided a major dollar fight-back as a result now. Over the next few months, the Luca Rubinelli thinks the pair could
about the outlook for 2011. Some of risk aversion, says Mark Deans, euro is expected to continue to trade higher in the near-term, he
analysts point to the need for rebal- dealing manager at Moneycorp. come under pressure but FX strate- foresees $1.20 by the end of 2011.
E
trading at around ¥83 to the dollar in US yields, if US yields start to URO-US dollar formed a bullish engulfing
yesterday. Japanese exporters have candlestick yesterday and in the process
rise, the yen would fall against the made a breakout from its recent down-
revised their currency estimates to dollar. “With a predicted pick up in ward trend. A break of the $1.3280 level
account for a stronger yen. risky assets in 2011, the yen will was crucial and led to further buying with the
Xenfin trader Ian Langton agrees: likely be sold by traders looking for cross back above $1.3400. The strength could
“We foresee the emphasis shifting carry trade plays elsewhere,” says continue following this move and in the run up
to the meeting of European leaders on
to focus on the negative US balance World First’s Jeremy Cook. Thursday. Capital Spreads quotes a price of
$1.3420-$1.3421 for Euro-US dollar.
A major British clearer sold sterling-
MAJOR FX | FOCUS Australian dollar quite aggressively yester-
day, helping drive it down to AU$1.5836, not
AUSTRALIAN The Aussie is likely to see some dips far off its all-time lows. Although it might be
DOLLAR dangerous to try to catch a bounce in this
in 2011 – with the key risks being pair, the area around AU$1.5840 offered
Chinese tightening and risk aversion. strong support in October, November and as
“Among all the G10 currencies, the recently as last week. If you are tempted to
Aussie remains the most sensitive to try a long trade, it might be wise to keep your
A combination of (relatively) high yuan moves. The market will need to stop losses tight, around AU$1.5760, in case it
does break October’s low of AU$1.5768.
interest rates, exposure to commodi- adjust to tighter conditions in China. Spread Co offers a spread on sterling-
ty demand and the distinction of The immediate impact may be brutal Australian dollar of AU$1.5837–AU$1.5849.
being one of the few advanced on the FX markets,” says BNP A rise in German sentiment announced in
economies to escape recession has Paribas’ Ian Stannard. yesterday’s ZEW survey coupled with
kept the Aussie dollar in demand. It October’s increase in Eurozone industrial pro-
But the Aussie remains a clear duction is good news for the struggling euro.
MAJOR FX | FOCUS hit parity with the US dollar a month favourite and SocGen’s Juckes But the bullish trend we have seen cannot con-
ago and traded back through this believes it could still have further tinue for long amid doubts over the future of
BRITISH A sluggish US recovery and loose level on an intra-day basis yesterday. upside against the US dollar. the euro. Against the yen, the resistance area
POUND of ¥111.70 has been robust since November
monetary policy should keep the
pound well supported against the and shows no sign of being broken. Cantor
ANALYSIS l Currencies' year-to-date performance against the US dollar Index offers euro-yen at ¥111.72–¥111.75.
dollar with some predicting $1.82 Marginally hotter than expected inflation in
12 %
by end-2011. the UK offered some support for sterling but
For a currency that has spent most Yet it is still all too easy to be a ster- 8 it proved to be somewhat short lived after
of the year plagued by fiscal and ling bear. Stephen Gallo at better than expected ZEW economic senti-
political crises, sterling has not Schneider FX says: “From the per- 6
ment readings from the Eurozone. As a result,
euro-sterling is rallying and a test of
done too badly. While concerns spective of trade and financial flows December highs would be the obvious next
about further quantitative easing alongside the UK’s fiscal imbalance, 0
Currency traders all level to watch for. The debate over a pan-
want one of these from the Bank of England and the there is certainly no shortage of European bond issue continues, however, and
for Christmas -4 there is a chance that this recent episode may
risk of contagion from the Eurozone downside risks to sterling that need
Picture: GETTY remain, these worries are starting serve to accelerate harmonisation of econom-
to be squared over the medium- -8 ic policies across member states. IG Index
to dissipate. Source: Societe Generale
term.” offers a price on euro-sterling of 84.91p-
JPY AUD CHF CAD SEK NZD GDP NOK EUR
84.93p. Daniel Knowles
My pick: Stay long dollar-yen My pick: Sell Kiwi-dollar, go long Aussie-Kiwi My pick: Buy US dollar-Swiss franc at SFr0.9810
Expertise: Global macro Expertise: Fundamental and technical analysis with risk management Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months Average time frame of trades: 1 day-1 week Average time frame of trades: 1 week-6 months
I entered long dollar-yen at ¥83.08 in mid-November expecting the We are coming into the thin-liquidity, end-of-the-year period. Therefore, I The market is currently carving out a major base after putting in a
pair to rise along with US Treasury yields in the aftermath of QE2 will cut my dollar-Canadian dollar. My long dollar-yen from ¥82 and short record low at SFr0.9460 several weeks back. Look for a fresh higher
after the $600bn increase in asset purchases matched traders’ expec- Aussie-Loonie from Ca$0.99 are meant as long-term setups and shall low to carve out in the SFr0.9700 area ahead of the next major upside
tations and opened the door for profit-taking into the year-end. remain in place. What I want to fall back on now are setups that take big extension towards our target at the 200-day simple moving average at
Indeed, US yields have started to rebound aggressively over recent events and moves. For that I am looking at a Kiwi-US dollar break below SFr1.0500. A push back above SFr0.9920 will strengthen the construc-
weeks and I will remain long, initially targeting ¥85.87. A stop-loss US$0.74 (with a 200 point stop and first target) and perhaps even tive outlook, while SFr1.0070 will confirm and accelerate gains. Only a
will be activated on a daily close below ¥81.72. Aussie-Kiwi above NZ$1.3225 (stop to be determined). daily close below SFr0.9550 would give reason for concern.
City Focus
22 CITYA.M. 15 DECEMBER 2010
| Accounting
A WISHLIST
The first step in the hoped-for evolution
of audit is an increase in its scope. If
auditors didn’t spot the problems at the
banks and other companies it wasn’t
because they missed them, it was
because they weren’t expected to look
for them. The problem wasn’t misrepre-
IAN WELCH sented accounts – auditors would have
raised an alarm if it had been – but
HEAD OF POLICY, ACCA
rather it was the underlying business
T
HERE are two sides to every story. models that weren’t sustainable. If the
This particular story concerns audit scope of audit was expanded to look at
and its value to society. Are you sit- things like business models or even the
ting comfortably? assumptions that supported them,
“Extraordinarily self-satisfied” is how financial crises like the one we’ve just
the former chancellor Lord Lawson experienced could maybe have been
described the suggestion by top auditors averted.
that there hadn’t been a failure of audit Roundtables in Britain indicated that could risk the openness of auditors in auditor liability could help kill two birds
prior to the financial crisis. “You were they would appreciate auditors looking Auditors are held their dealings with management. with one stone.
the auditor of [a bank] which went belly- at forward-looking information. tight on a leash The biggest problem with changing Caught in the middle of all these ques-
up within a few months of you giving it Malaysian roundtables wanted more the role and scope of auditors is auditor tions and caveats is the audit profession
a clean bill of health,” he told one Big information from auditors on a compa- Picture: GETTY liability. If auditors are asked to do more itself. Auditors were criticised for not
Four chief who was giving evidence to a ny’s risks. Roundtables in the above two then there are more things that can go doing what wasn’t their job, and they
House of Lords inquiry. countries and also in the Ukraine all wrong. This wouldn’t be so much of a now find that an important part of liv-
Unfortunately, though Lord Lawson’s hoped for almost real-time reporting as problem if liability was reformed along- ing up to such expectations is out of
criticisms grabbed headlines, they didn’t opposed to the easily out-dated end-of- side audit, but even minor attempts at their hands. Audit is valued by those
really capture the nuances of the debate year report that is currently the norm. reforming audit liability have run that use it, but it is beginning to test the
about the role of audit. Alongside expanding the scope of aground. patience of some stakeholders.
It’s easy to accuse auditors of failing to audit, the idea that attracted most wide- A change in British rules in 2006 Consequently and appropriately, audi-
spot the financial storm on the horizon, spread support was throwing open the which allowed the possibility of ad hoc tors are feeling the pressure to change,
but in reality, that wasn’t really their audit “black box”. Frustration was restrictions on liability was a welcome but audit liability is not a hurdle that
job. Lord Lawson said that auditors were expressed that despite paying for the step, but it floundered on American reg- the audit profession can overcome by
the dog that “didn’t bark”, but auditors audit, all shareholders ever get to see of ulatory scepticism and other practical itself. Action will be needed by govern-
are more like bloodhounds on a leash the extensive work done by auditors is a issues. Without audit liability reform, ments to help break the log jam, but
than free-roaming watchdogs. There was- two-page boilerplate, once a year, which auditors are unlikely to want to expand until we get that, we’ll be stuck in a very
n’t anything worth barking about where mostly consists of a detailing of auditor their roles. unsatisfactory place; indeed we’ll be
they were being told to look – a point responsibility anyway. It’s interesting to note at this point stuck where we were three years ago.
agreed on by many reviews preceding Audit reports may give an answer to that those countries, such as Germany, Auditors may not have barked, but
the Lords’ inquiry. shareholders, but they don’t tell them with some sort of statutory limited lia- were they supposed to in the first place?
That still leaves a question to be what the question was in the first place. bility have been most successful in There are two sides to every story.
answered though. If it wasn’t the audi- Malaysian participants were keen to see increasing the pool of audit firms that Ian Welch is head of policy at the Association
tors’ job to look out for the problems “red-flags” waved at shareholders by operate in the listed sector. Addressing of Chartered Certified Accountants (ACCA)
that rocked global banks then what auditors ahead of any impending prob-
exactly is the point of audit? The prob- lems. Communicating the detail of the ROUNDTABLES | ACCA/DELOITTE
lem however, for those that try to define audit process more widely than just the
and defend the value of audit for society audit committee could re-assure share- l Poland – Delegates believed that auditors l UK – British roundtables welcomed the
is that until recently there’s a been real holders that auditors really do put a
paucity of research into this area. company through its paces. had to do more to re-assure shareholders that inclusion of forward-looking information.
To rectify this, the Association of their investments were being looked after – Delegates urged that the “audit black box”
Chartered Certified Accountants (ACCA) A REALITY CHECK be opened, and process communicated much
has spent the past twelve months run- No point on the audit wish-list can be
ning a series of roundtables around the implemented easily, however – some- l Ukraine – Delegates, including Big Four more effectively to shareholders
world looking at the value of audit. They thing recognised by the roundtables. auditors, called for monthly management
brought together businesses, finance Some wishes are potentially mutually
providers, regulators, auditors, ratings exclusive. Real time audit reporting accounts to be available online and audited l Malaysia – Shareholders wanted to see
agencies and others to tell us what they could hamper attempts to broaden the – Leading auditors were concerned that fees more information on risks from auditors.
think of and expect from audit. scope of audit because of the amount of weren’t high enough for firms to be able to – Shareholder groups wanted to see more
And the message delivered was clear. required work, while increasing the
Audit is valued by stakeholders, but they scope of work required could push audit invest in quality improvement procedures and interim reports and auditing so “red flags”
are increasingly expecting more from it. fees up. Requiring auditors to be more employee training could be raised at the first sign of trouble.
Picking up on the problems at the banks candid in their published statements
Lifestyle
23
| Motoring WORDS BY
RYAN BORROFF
I
F the Škoda Roomster looks a little
strange – as if the front half of the
car was developed by a different
team to the back of it – it’s not acci-
dental, it’s by design. The concept under-
lying the Roomster set out to split the car
into two “rooms”, a “driving room” up
front and a “living room” in the back.
Looks-wise, the front of the car suggests
sportiness while the back is more practi-
cal and the resulting car is more success-
ful as a living space than a driving one
and gives the car its quirky split
personality.
From the outside, this 2010 Roomster S
may look a little schizophrenic but not
unattractively so. Looking at some of its
small MPV rivals, it’s a positive oil paint-
ing, though there’s no doubt that reac-
tions are mixed. But it’s a clever design
inasmuch that as a family car it’s practi-
cal and flexible.
Two things in particular mark the
Roomster out. The first is that the win-
dows in the rear are extra low, lower than
the front in fact, which contributes to its
unusual looks. Second, the seats sit much
higher than conventional rivals, which is
why the roof pitches upwards at the rear.
Together these two unusual characteris-
tics mean there is loads of visibility in the
rear, even for the smallest kids. Rear seat
passengers can see the road outside and
the road ahead. Which is pretty cool if
you’re a little one. From a parent perspec-
tive it helps alleviate boredom and travel
sickness in kids. Which is quite com-
pelling. steering wheel and gearknob in particu- unusual looking. It’s a very imaginative
Unfortunately you may have to compro- lar – let the interior down somewhat, THE FACTS: and practical car that is really quite
mise elsewhere. There’s no avoiding it but although this is the lowest trim option. SKODA unusual amongst its rivals. It’s not
the 1.2 12V 70bhp engine in the Roomster But the fabric trim on the doors helps to ROOMSTER thrilling, just very sensible and practical.
we tested is just too slow. It feels surpris- lift what would otherwise be a fantastical- If you’re in the market for such a family-
ingly bunged up on the motorway and ly dull place to sit. The Roomster’s master focused car its worth a look, but go for
though comfortable enough around stroke inside is its seats which tumble for- PRICE: £11,260 one of the turbocharged engines in the
town, it’s a tortoise. Pootling will be what ward individually – or can even be 0-62MPH: 15.9secs range rather than this one if you can.
you’ll be doing, whether you’re in a hurry removed – so you have a great deal of flex- TOP SPEED: 99mph
or not. Combine this with light steering,
an unremarkable ride and a noisy diesel
ibility to carry whatever stuff you’re into.
There really is a lot of space for both pas-
CO2 G/KM: 143g/km THE VERDICT
engine – and not a nice noise either – and sengers and luggage, 450 litres with the MPG Combined: 45.6 DESIGN iihhh
it’s quite clear that the Roomster is all seats up and a mahoosive 1,780 litres with PERFORMANCE iiihh
about the inside. them folded. PRACTICALITY iihhh
Cheap plastics – on the dashboard, There’s no doubt the Roomster is VALUE FOR MONEY iihhh
NEW SERIES M COUPE FERRARI’S FAST CAR OF THE YEAR NISSAN LEAF TO BE CHEAPER TO RUN THAN THOUGHT
This is the new 340hp BMW 1 Series M Coupé that will debut at The TV show Fifth Gear has nominated Ferrari’s stunning-looking 458 There’s been a lot of negative press about how expensive electric cars
January’s Detroit motor show. The twin-turbocharged car will have a Italia as its “Fast Car of the Year”. The 4.5 litre, 560bhp, mid-engined V8 will be when they get here next year. But Nissan says its new electric
0-62mph time of just 4.9 seconds which, amazingly, is just a fraction sports car can reach 62mph from standstill in just 3.4 seconds and has a LEAF car can be had for just under £400 per month, which should
slower than the existing M3, despite the fact that the car will be a lot top speed of more than 202 mph. The award follows a raft of other inter- mean more people will be able to afford to “go electric” than previously
cheaper at £39,990 when it goes on sale in May 2011. Other tweaks national awards including BBC Top Gear Magazine’s “Supercar of the thought. Running costs will be cheap; a full battery charge should cost
include 19-inch alloy wheels and quad exhaust pipes. Year” and “Car of the Year”, and GQ Magazine’s “Supercar of the Year”. just £2 and there’ll be no road tax and no congestion charge to pay.
24 Lifestyle | TV& Games CITYA.M. 15 DECEMBER 2010
SKY SPORTS 1 12.30am European Tour LIVING 10pm Desperate Housewives 3.50am Nasa’s Greatest
SATELLITE & CABLE
7pm Sky Sports News at Weekly 1am-4am 7pm CSI: Miami 8pm Four 11pm Alan Carr: Chatty Man: Missions 4.40am Days That
Seven 7.30pm FIFA Futbol IRB Rugby Sevens Weddings 9pm Cheryl Cole’s With Colin Farrell, David Shook the World 5.30am-6am
Mundial 8pm Live Ringside Crazy 2010 10pm Criminal Hasselhoff and the cast of The How Does That Work?
BRITISH EUROSPORT Minds 1am CSI: Miami Inbetweeners. 12am Scrubs
Boxing: Martin Lindsay v John
Simpson. 10pm You’re on Sky 7pm European Tour Golf 2am CSI: Crime Scene 1am Glee 1.45am Alan Carr: DISCOVERY HOME &
Sports! 11.30pm FIFA Futbol 7.30pm Ladies European Tour Investigation 3am Charmed Chatty Man 2.40am What HEALTH ANCIENT WORLDS
Mundial 12am Ringside Boxing Golf 7.40pm Golf Club 7.45pm 4.40am Boston Legal 5.30am- About Brian 3.20am Reno 911! 7pm A Baby Story 8pm 10 BBC2, 9PM
2am-6am Live Test Cricket: Yacht Club 7.50pm Wednesday 6am Home Shopping 4.05am Being Erica Years Younger 9pm Richard Miles investigates the rise and
Australia v England. Selection: Sport round-up. 4.50am-6am Switched Emergency 10pm Hospital fall of the Roman empire, and learns
8.05pm Live Equestrian: The BBC THREE Sydney 11pm Emergency how Christianity superseded the
SKY SPORTS 2 Olympia International Horse 7pm Mad About the House HISTORY Medics 12am Emergency 1am Roman multi-god belief system.
7pm IRB Rugby Sevens 10pm Show. 10.15pm Bobsleigh 8pm FILM Catch Me If You 7pm Ancient Aliens 9pm Ax Hospital Sydney 2am
Darts 11pm Bowls 12am Darts 11.15pm-12.20am Skeleton Can 2002. 10.15pm Family Guy Men 10pm The British UFO Emergency Medics 3am 10
1am Transworld Sport 2am 11pm The Real Sleeping Beauty Files 11pm The Sword 12am Years Younger 4am Baby Tales
Snow Ride 2.30am European ESPN 12am Russell Howard’s Good Ancient Aliens 2am Extreme 5am-6am A Baby Story
Tour Weekly 3am European 6pm Live UEFA Europa League News 12.30am Mad About the Trains 3am-5am Mega Movers
Tour Golf 3.30am-4.30am Football 8pm Live UEFA House 1.30am The World’s SKY1
Watersports World Europa League Football: Strictest Parents 2.30am DISCOVERY 8.30pm Raising Hope 9pm
Coverage of a matchday six Russell Howard’s Good News 8pm How Do They Do It? Justin Lee Collins: The
SKY SPORTS 3 fixture. 10pm Premier League 3am The Real Sleeping Beauty 8.30pm How It’s Made 9pm Wrestler 10pm FILM Stargate
7pm Transworld Sport 8pm World 10.30pm Ski World Cup 4am Lip Service 4.55am- Shark Attack File 10pm Behind – Ark of Truth 2008. 12am
Darts 9pm European Tour Golf Report 11pm Snowboarding 5.25am The Real Hustle: Bars 11pm Frontline Battle Road Wars 1.50am Shadow of EMMERDALE
9.30pm European Tour Weekly 11.30pm ESPN Kicks Extra Celebrity Scammers Machines with Mike Brewer the Shark 2.40am Oops TV ITV1, 7PM
10pm Cage Fighter 10.30pm 11.45pm 30 for 30 1.45am 12am Bear Grylls: Born Survivor 3.30am The Dresden Files Rhona is unsure whether she can go
International Judo World Press Pass 2010 2.15am E4 1am Deadliest Catch 2am 4.20am Sell Me the Answer through with the pregnancy after the
Circuit 11pm Golfing World ESPN Kicks Extra 2.30am- 7pm Hollyoaks 7.30pm Chris Barrie’s Massive Engines 5.10am-6am Are You Smarter midwife confirms her fears and tells
12am Asian Tour Golf Show 5am Live NBA Basketball Friends 9pm Ugly Betty 3am The First World War Than a 10 Year Old? her the baby has Down’s syndrome.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
QUICK CROSSWORD
SUDOKU KAKURO
7 28 22 11 12 13 23 13
35 24
16 9
Place the numbers from 1 to 9 in each empty cell so that each 14
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 10 16
27 34
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 4 10
above or to the left of it. 17 29 26
You can only use the digits 1-9 23 17 3
and you must not use the
12 5
45
same digit twice in a block.
The same digit may occur 13 9 21
28 29
more than once in a row or
column, but it must be in a 8 19
30
6
10
separate block. 25
8
10
11
7 33
17 15
ACROSS DOWN
2 Animal that feeds 1 Metal fastener in
WORDWHEEL O R
on refuse (9)
6 Worries excessively (5)
the form of a clasp,
with a guard (6,3)
2 Oozes (5)
Using only the letters in the Wordwheel, you have 7 Measures of land (5)
ten minutes to find as many words as possible,
D E 9 Each and every (3)
3 Analysis of a substance
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 10 Appetising (5)
such as gold or
silver, to determine
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N C 12 Weapon that delivers a
temporarily paralysing
its make-up (5)
4 Glorify (5)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
N U electric shock (5)
5 Lasses (5)
14 Appeal (5)
QUICK CROSSWORD 8 Admit defeat (9)
SUDOKU
1 2 8 4 6 8 7 9
17 Assert (5)
0 $ 1 $ 1 $ & $
3 1 7 2 1 3 2 8 11 Popular hot beverage (3)
9 5 8 2 1 4 19 Rod Hull’s famous
( 1 1 ( 8 5 2 1 13 Toward the stern
5 ( 6 7 7 < 1 1 3 7 9 3 5 9
bird (3)
, 3 , 1 ( $ 3 3 / ( 2 4 5 3 1 2 1 3 of a ship (3)
20 Connected with birth (5)
7 5 $ & ( / 7 $ ; 6 9 1 7 1 3
15 Organic compound (5)
$
8 6 (
,
*
& (
5 (
1
$ ' <
4 9 8
1 7
6 8 5 9
1 7 9 6
7
9
WORDWHEEL 21 Inquired in a
16 City in India (5)
6 3 $ * + ( 7 7 , , meddlesome way (5)
8 5 ' 8 5 * ( 2 6 3 4 5 1 The nine-letter word was 17 Excellent (5)
7 8 9 5 3 2 4 1 22 Carnival held on
5 $ 7 , 1 * ' /
MECHANISM
3 + ( < ( / , ' 1 5 8 2 6 4 9 8 Shrove Tuesday (5,4) 18 Farewell remark (5)
Sport
25
“DON’T BELIEVE THE AUSSIES
ARE DEAD AND BURIED YET”
TUFFERS TELLS ENGLAND TO GO FOR
THE JUGULAR IN THIRD TEST: P26
England must go
for jugular. This
isn’t over... yet
In his exclusive Ashes column, spin king
Phil Tufnell urges KP and co not to let up
I
CAN’T think of a better Christmas condition so far and everything is overall I think he’ll be rejuvenated by
present to everyone involved in going right for them. If they win the the experience. For me it’s also up to
English cricket than securing the toss they have to bat. The batsmen the individual whether they want
Ashes; it would be absolutely fan- have been racking up the runs, so we their family to join them out there, as
tastic. Victory in the third Test, which want to be aggressive, get a big score many have this week. As long as cou-
starts in the small hours of tonight, and keep them under pressure. ples don’t break off from the group, it
would guarantee we bring the urn can actually make the squad a
back to these shores, and you can be TREMLETT COULD BE NEXT STAR stronger unit.
sure that’s exactly what all of the Stuart Broad’s injury was very disap-
England team will be utterly focused pointing but you couldn’t ask for a AUSSIES IN DISARRAY
on, despite their short break and the more ideal replacement than Chris Of course it’s nice to see Australia get
arrival of wives and families. Tremlett. On a fast, bouncy wicket a taste of their own medicine. Not in
Australia are on the back foot and you want a tall, pacy bowler; the a malicious or vindictive way, just
what we need now is a big push to fin- Surrey player is 6ft 7in and delivers at because it’s a joy to see England play-
ish them off. That’s why head coach 90mph – perfect. If he, as expected, ing such brilliant cricket.
Andy Flower has been emphasising gets the nod I fancy him to play a star- The Aussies are going through a
that there is no room at all for com- ring role in Perth. Alastair Cook, hard time and need to look around
placency. Flower has to marshall the Kevin Pietersen (right) and Graeme for where the next Warne or Ponting
troops and beat the Aussies because, Swann have all dazzled so far; is coming from. England have
simply, we are better than them. I reckon this might just everything in place because
be Tremlett’s they’ve been working on this
REST WILL PROVE A BOOST turn. team for a couple of years now.
A week away from the strains of Test While they have the luxury
cricket can work in two ways. For of a settled side, Australia are
Australia, it has been time to chew in disarray.
over their woeful start to the series. One minute Mitchell
But for England, it has allowed them HAPPY Johnson’s in the side, the
to savour and appreciate just how FAMILIES next minute he’s out. It
well they’ve played and the lead that J i m m y sounds more like an
they’ve built up. Anderson has England tour.
They’ll still have their momentum, come in for They’ll be feeling
and they’ll have kept the team spirit some criticism under huge pres-
alive by playing golf and doing other for cramming in a flying sure, but one
group activities. This is where the visit back home to see his sec- thing you can be
backroom staff really matter; it’s ond child being born in sure of is they
their job to keep the squad together between the second and third will regroup,
and focused as they gradually step up Tests. It didn’t happen in my prepare very well
preparation for the match in Perth. day but I am behind him: if and still be confi-
he wants to do that and it dent. They’ll do that
DON’T FEAR THE WACA falls at a convenient time, until the last ball is
England don’t have a great record at which it did, then he’s enti- bowled. Don’t think
the Waca: they’ve won there once, tled to do so. they’re dead and buried.
and that was 32 years ago. It’ll be for- Far from being affected Phil Tufnell is part of Paragon
eign to Flower’s men; The pitch is badly, Anderson will proba- Sports Management. For all
hard, bouncy and will crack up as the bly now have an extra your hospitality and event
Test progresses. But none of this spring in his step after such requirements please contact
should be a great concern. a happy occasion. The trav- Paragon on 020 83328640 or visit
England have adapted well to every el may tire him a bit but www.paragonhospitality.co.uk
CRICKET TRADER OLLIE DREW HIGHLIGHTS THE BEST BETS AHEAD OF THE THIRD
ASHES TEST
THE ALL-ROUNDER |
CONDITIONS, STATS AND BANTER
DAY ONE FORECAST
HIGH
LOW
Bright sunshine
310
160 Arshavin: no time for self pity
PITCH
Comfortably the most interesting at Emirates Stadium would see the “We didn’t deserve defeat. The
▲
FOOTBALL
surface of the series to date. It’s Gunners return to the summit, with match was a battle. Both teams
traditionally fast and bouncy, but
BY JAMES GOLDMAN the champions and United clashing fought for the result and unfortu-
early reports suggest this track also ARSENAL forward Andrey Arshavin at Stamford Bridge the following day. nately we lost. We didn’t play for a
has a green tinge. If that’s the case, has implored his teammates not to With the visits of Chelsea and draw. We simply acted responsibly in
it could muddle England’s thinking dwell on Monday’s damaging defeat Manchester City to north London also defence and looked for chances.”
when it comes to selecting either at Old Trafford and quickly turn their on the horizon, Arshavin believes
Ajmal Shahzad or Chris Tremlett to attention to Saturday’s visit of Stoke. Arsenal would be better served look- FIXTURES | ARSENAL’S NEXT FIVE
step in for Stuart Broad. Ji-Sung Park’s solitary goal handed ing toward the future rather than
Manchester United a significant edge focusing on their apparent big game Defeat at Old Trafford will be forgotten if
STAT OF THE DAY in the title race – Sir Alex Ferguson’s paralysis.
Arsenal win their next five league games.
No doubt you’ll be hearing a lot charges now hold a two point lead He said: “There is no time to be
about the Fremantle Doctor over with a game in hand – and extended melancholy or sad. We need to forget
the next few days. Don’t mistake Arsenal’s lacklustre record against this defeat and start thinking about 18 December – Stoke (h)
him for England’s team physio, it’s their main title rivals. the next match. 27 December – Chelsea (h)
the afternoon sea breeze which Despite a miserable return of one “We need to prepare properly for 29 December – Wigan (a)
occurs in south west coastal areas draw and 10 defeats against United each opponent. The championship is 1 January – Birmingham (a)
of Australia, and is known to assist and Chelsea from their last 11 games very interesting this year and nothing 5 January – Manchester City (h)
swing bowlers. Despite it’s useful- in all competitions, a win over Stoke has been lost yet.
ness, it shouldn’t be ignored that in
the warm-up match between
FIGHTING TALK
“We planned before the series that
we wanted Mitchell up and run-
ning for Brisbane and Perth. It has- with his teammates for the first time He said: “City supporters idolise
▲
FOOTBALL
n’t all gone to plan.” Aussie BY JAMES GOLDMAN since handing in his shock transfer Tevez because of the way he is playing
selector Greg Chappell excels at request last week. and the way he is leading by example
stating the obvious. WANTAWAY Manchester City striker It is understood City manager on the field.
Carlos Tevez returned to the club yes- Roberto Mancini had already taken “But we have seen the other side
“Somebody has to be game terday, but won’t travel with the rest the decision to rest the Argen- when he is not living up to his respon-
enough, maybe Greg Chappell, to of the squad ahead of tomorrow’s tina striker for the match in Turin sibility as club captain off the field.
tell Ricky Ponting to drop down Europa League dead rubber against before the story of his desire to leave “He has been making strange com-
the order.” Daryl Foster, Western Juventus. broke. ments about his future, about his
Australia selector, says what other The City skipper trained at the Tevez is yet to be stripped of the ambitions in football and lately hand-
shrewd observes have noticed, but club’s Carrington complex having captaincy, but former City striker ing in a transfer request.
haven’t been brave enough to say. flown back from a pre-approved holi- Uwe Rosler believes that should be “I would take the captaincy away
day in Tenerife, where he met up Mancini’s first course of action. from him, 100 per cent.”
ONS reveals 0.8% growth for Q3,
double the predicted rate.
Real amount of debt tumbles.
Gilt yields fall as markets Inflation returns to UK.
factor in the optimism.
UK debt servicing
costs fall.
Can sterling stay on
its feet? Take a position at
igindex.co.uk
The flood of money
Will George Osborne’s increases business credit
and mortgage lending.
spending cuts send sterling Will sterling
deflate?
down the tubes? Take a position at
igindex.co.uk
Bank of England steps in with
further quantitative easing.
Chance of Bank of England
using more quantitative
easing weakens.
20th October 2010 and the
full scale of George Osborne’s Does sterling
comprehensive spending strengthen?
review is revealed. Take a position at
igindex.co.uk
S&P revises UK to ‘stable’
from ‘negative’, affirms triple
Debt perceived to Will the FTSE
‘A’ credit rating. Fall in consumer
be under control. follow suit?
Take a position at confidence
Private igindex.co.uk causes retail
sector contracts sales to drop.
squeezed. Reduced tax revenue
plus increased benefit
claims inflate the UK
Will Gilt prices fall? deficit.
Take a position
at igindex.co.uk
But what’s the
reality for the FTSE?
Take a position
at igindex.co.uk
Investors fear a UK
Profits feel credit downgrade. Job loss fears prompt those
under pressure.
still employed to pay off more
As companies personal debt.
take a hit do shares
feel the blow?
Take a position at
igindex.co.uk
Predicted UK corporate Private sector layoffs add to estimated
tax revenue falls. 490,000 public sector redundancies.
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